TPOR 0218 SHOW.mp3: Audio automatically transcribed by Sonix
TPOR 0218 SHOW.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Producer Sam Davis:
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Producer Sam Davis:
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Producer:
Welcome to take point on retirement with your host Eric Arnett Eric is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Tech Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams, and they can help you too. And now let's start the show. Here's Eric Arnett,
Producer Sam Davis:
And welcome to take point on retirement. I'm Sam Davis, joined by Eric Arnett, as always. Eric, how are you doing today?
Erick Arnett:
Hey, good morning, Sam.
Producer Sam Davis:
So I know you wanted to start off today's show by talking about some of the things that are in the news. Market update, if you will, and some things that investors should be keeping their eye on as we move forward through Q1.
Erick Arnett:
Yeah. So obviously the markets, we've talked about this several times and probably will continue to be the the discussion throughout 2020, too, as the market continues to adjust to number one, the federal interest rates increasing. You know, there's an old saying out there don't fight the Fed, and that can be whether the Fed is easing or whether the Fed is tightening. So right now, the discussion is and obviously they've announced that they plan on tightening. And so that creates higher interest rates, which tends to for a short period of time, short term put tensions on the stock market as well as the bond market. So, you know, we're experiencing a little bit of that volatility, but also it seems like every day the Russia, Ukraine tensions are the headlines, you know, every single day. And so people, my current clients as well as new folks that we're talking to. This is something that comes up almost in every conversation. Everybody is concerned about this. And so you know, what I tell folks is like, look, you know, these are geopolitical events all going all the way back to the dawn of time, to the inception of the stock market. We always have these geopolitical events. Those are never going to go away. Those are things that we call black swan events. Or, you know, there's always something going on in the world every day.
Erick Arnett:
And it seems like this is the one big topic of discussion whether it's, you know, smoking mirrors or smoke screens to divert, who knows? But you know, in my opinion, it's yes, it can put tensions on the market, the oil market, the energy markets, as well as the stock and bond market. But it's it's a nonevent, and I really, truly believe it will be a nonevent and interesting little statistic that I wanted to share with folks. Past geopolitical events, Mark Diorio, our chief investment officer with Brookstone Capital, put out this really great piece and it kind of puts things in perspective and it's a chart, and I know folks can't see the chart, but you know, I'm going to go through it, but it goes back. Every single major event to the Saudi Arabia drone strike, North Korea missile crisis, the bombing of Syria, World War Two, the Cuban Missile Crisis. So if you could envision this chart COVID 19, the pandemic total drawdown, we'd have to go back to. Let's see. The largest drawdown was Iraq's invasion of Kuwait in 1990, and the stock market for a short period of time was down 16 percent. And it came right back within one hundred and eighty days. And to make a long story short, if I was to take all these major geopolitical events and wars and average out the decline, it's a negative for four percent, four point thirty nine percent.
Erick Arnett:
So that's kind of the average decline that we see. And you know, and the average recovery was just thirty five days after that. And we mean recovery, is it, you know, it came back and even rose higher above that. So it's important for us to put this into perspective, Sam, that yes, you know, there are tensions always throughout the world. But, you know, just sitting there, I know a lot of our listeners and retirees and pre-retirees tend to kind of sit there and just watch the TV and the headlines on a daily basis. And it can really start to wear on you and get to remember that these people are just selling news. And so they've got to constantly, you know, have the crisis of the day out there. And there's so many good things going on. But all we hear about is just this. This crisis in Ukraine and Russia has already pulled back troops. You know, Vladimir Putin's stated numbers a number of times that this is a military exercise. Even the Ukrainian officials aren't worried about it. So why are we creating this huge issue that potentially isn't even there? And even if they did invade Ukraine, it's not going to have a massive effect on the market.
Erick Arnett:
In fact, it's probably already been priced into the market. When we had some big declines back in January, you know, the stock market itself, the S&P is down almost eight percent this year. The Nasdaq is down almost 12 percent this year. So we've already had, you know, sizable correction or bump in the markets or decrease in the markets based on this geopolitical news. So what's more important is, you know, your advisor or a good strong advisor should be focused on the true fundamentals, the underlying conditions of the market, the the economy, all the data that fuels the economy, the fundamentals of the stock market. You know, our stocks overpriced, overvalued. You know, where are things moving, what shifting? And so yeah, more than ever today you need to have an actively managed portfolio, you know, but let's look at some positive stuff. You know, retail sales came out this morning and they were they were much higher than expected. So despite inflation and the talk of all the inflation out there, which is which is difficult because we've had increased gas prices, increased grocery prices, rents, everything's kind of been in a sense, you know, going much higher. But retail sales rose faster than expected in January despite surging inflation, so the consumer accelerated their spending in January as COVID 19 has started to ease up nationwide.
Erick Arnett:
So, you know, so this is a positive and I think that, you know, retail numbers were down a little bit over Christmas and in somewhat going into January because we had so many of the COVID lockdowns and the omni CRON variant was spreading quite a bit. But as we come out of the pandemic and go into the endemic and I think we're very close to that, you know, people are going to be back out spending getting back to normal life. And, you know, I don't think it's so important just to focus on what is going to do. We'll work through it and it's not going to have some major effect on the market. I've heard people thinking that, you know, the entire world is going to get sucked into World War Three over this and it's just creating so much fear and panic that's just not necessary. That's absolutely not going to happen. You know, Russia and NATO and everybody has too much to lose. In fact, you know, I read this one study, Sam, about it would really take over half a million Russian troops to take over Ukraine, half a million troops and you. You think about it. I mean, Russia in the past has tried to take over Afghanistan, they're in a 20 year war there and could not win.
Erick Arnett:
You know, most other than the eastern side of Ukraine, the mass majority of Ukraine, they don't like Russia and they don't want to be Russian, so they're going to fight to the death. And, you know, and it's their battle. And so but I really think this is posturing on Putin's part to keep kind of NATO from consuming Ukraine. And Ukraine's already even said that they don't plan on being a part of NATO. So who knows what's really going on there, but? My main point to our listeners, if you're out there listening is try not to focus so much on the noise and really focus on your long term plan. And if you have a good, solid plan in place, like we talk about all the time, you can weather any storm. And so getting back to the markets and how you should be actively managing a portfolio here at take point wealth management, literally in the in the third quarter of last year. Back in September, August, September, October, we were already repositioning portfolios to more dividend paying stocks, value stocks rotating out of aggressive growth stocks that we're going to be impacted by higher interest rates. So we force, you know, we could foresee this happening. And so we've already made those shifts. We've made our portfolios more defensive. And so you just can't have that buy and hold strategy and hope for the best.
Erick Arnett:
You have to have a tactical manager actively managing your portfolio and we'll get more into that into the show a little bit later. But I just wanted to share kind of some market data, some positive stuff this morning. And you know, this really, it's kind of interesting. I mean, we're worried about inflation so much, but inflation tends to be a sign that there's a ton of pent up demand. And and once we get this supply chain issue fixed and rolling, as if we just release the mandates and and all of these different things and let the free economy in the marketplace flow again, flow again, we're going to be in much better shape. So. So I'm more of a positive thinker. I think the second, it's going to be rough. I mean, it's going to be volatile this first half of the year. But going into the second half of the year, I think we'll have a much greater push higher and things will get much better in the markets. But let's stay focused on what really matters. And that's the key data. And here it take point. Wealth managers, that's what we look at every day is the key data and the key fundamentals in the market, not the noise and the headlines and the latest story of the day.
Producer Sam Davis:
Yeah. And I think it's such a good point to investors, you know, pre-retirees and retirees alike that if you are making all of your investment decisions in your financial decisions based on what you're seeing on the news, you know, it's good to know be keeping track of the news and understand what's going on out there, but your advisor will be able to explain and point out those key data points that actually help them forecast and help you make the best plan possible. I mean, if you're looking at any story in the news right now, you know, really the more relevant story to everyone is is the story that's kind of been in the background for decades and decades. And that's the national debt. You know, it's just been in the news recently because that number eclipse is 30 trillion and that's a big number. And it adds, you know, a different number at the beginning of that long line of zeros. But you know, really what that's going to mean is is that tax rates are more than likely going to go up in the future.
Erick Arnett:
Yeah, I mean, it's it's and what you're talking about there, Sam is thinking about the long term, right? There's nothing we can't control the short term and you shouldn't be investing for the short term anyway. And I tell folks like, Hey, if you want to do some short term investing, some some, you know, short term trading, even day trading, you know, that's a totally separate account that's called your play play account or your gambling account. But let's when we focus and talk about long term investing, we talk about that long term plan that we have to build for you. A plan that weathers all storms, good markets, bad markets, high rates, low rates and combinations thereof. We have to we have to focus, more importantly, on long term taxation. So what is the taxation going to look like on your portfolio long term? So part of our smart plan, there's three phases and and within those three phases is the tax plan and the in creating a tax sensitive plan. And so really focusing on that and yeah, of course, I mean, with the debt that we have and with the fact that politicians are just never going to stop spending money, you know, government just keeps getting bigger. I don't really see any major changes to that anytime soon. So with this huge, huge debt, they're going to have to raise taxes in order to continue to provide the benefits that they've promised. So you can't, you know, and that leads into not just relying on Social Security, but of course, taxes have to go higher and taxes are on sale right now. And actually, that's a a a book that we're currently in writing right now is taxes on sale.
Erick Arnett:
So stay tuned for that so we can get you a copy of that pretty soon. But taxes are on sale right now. With the Trump administration, there was a tax act put in place the Trump Tax Act and it lower taxes across the board. And so, you know, from capital gains taxes to a wealth transfer taxes to income taxes, you know, taxes are on sale right now, so now's the time to take advantage of that. Sit down with an advisor that truly understands taxation and long term taxation. We're also, you know, close friends and share offices with Suncoast CPA Group, Fantastic CPA Group and in business for a long time. And so we also help manage the tax situation for our clients as well. And so, you know, we've got to be focused on that and that's there's all kinds of strategies to put in place to alleviate that. So if your advisor isn't talking to you about tax strategies, risk management, are they making changes to your portfolio currently? Have they talk to you? Have you heard from your advisor during the downturn in the market? I certainly hope so. And, you know, so they talking about risk management, are they talking about making tactical shifts? Are they talking about reducing the risk and taxation and also looking at fees and expenses? So not only are fees and expenses going to eat away at your retirement, but as well as well as the taxes. So these are the three things that we focus inside the smart plan. And so absolutely, I mean, you know, I really think that taxes have to go up in the future. So we've got to plan for that, Sam.
Producer Sam Davis:
And you can schedule your no obligation consultation. It's free. You can get a free retirement plan to age ninety five because people are living longer and the folks over at take point wealth management realize that. And they want to make sure that all of their clients have a plan to live as long as they want to live. And you can also give a call (352) 616-0511 That's (352) 616-0511, or just head over to take joint wealth and book that free consultation now. And that conversation really leads into one of the mistakes we're seeing a lot of retirees and pre-retirees make, and that's that they're assuming that taxes are going to remain flat during their retirement years. You know, they they're sort of thinking that taxes aren't going to go up in the future, which is which is what we're saying is going to happen. And they're also assuming that their taxes personally might actually go down. But that's not the case.
Erick Arnett:
Yeah, absolutely not the case. And one thing that you know, folks just may or may not know is that regardless of whether your income goes up or down in retirement, more than likely tax rates are going to be much higher in the future. But also, we got to talk about Social Security and Medicare. And so, you know, the limits on that are very low. And if you have questions about that, please call us. But, you know, even if you're really not making a lot of income, your Social Security can be can be hammered. I mean, hit pretty hard and so you can lose your benefits as well through taxation. So everything that you make goes to the bottom line. They add Social Security to that as a part of your income. And so more than likely, sometimes we see retirees are in a higher tax bracket than they were when they were in their working years. And you lose a lot of deductions too. As you get older, you know, your child tax credits, child deductions and, you know, all those kind of things. So and we don't even know, like currently under the Trump tax law, they raise the standard deduction for couples. So if you're a retired couple, you got a standard twenty six thousand dollars across the board reduction in your income, which was super helpful. Everybody got that. Whether you were an individual, rates were a little bit different, but everybody got that big break. And so that may go away as well. This all sunsets in twenty twenty six. So, you know, things like we've got to talk about Roth conversion ladders and if you're out there listening, just Google that, but we're happy to help you to work through that.
Erick Arnett:
We do the Roth conversion here for you. And so taking your current 401K or IRA and slowly moving it into a tax free bucket, and so wouldn't it be great by the time you get to retirement or even required minimum distribution age and not have to take those required minimum distributions and not have to pay taxes on your hard earned retirement, pay those taxes now get it out of the way and then be able to enjoy your retirement 20 30 years of retirement. Yes, we do our plan going out to age ninety five and we do have clients living well into their nineties. It's funny when I mentioned that Sam, everybody always says to me, Oh, I'm not going to live to be 90. You're crazy. Yeah. My father died at seventy five or seventy eight. I mean, you really don't know. So we've got a plan. We've got a plan for the long term and and plan for the best. And and so. More than likely, you know, you can possibly live into your nineties, so we've got a plan for that, that's a long time to plan and and be concerned about income, right? So we've got to make sure we generate enough income and we have to keep those taxes low, those those fees low and also that risk real low in the smart plan. So just, you know, so many things to talk about, but that's so, so important.
Producer Sam Davis:
Yeah. And that's, you know, you're talking about age. That's one of the other misconceptions and one of the other mistakes that people are making with regards to their retirement plan. You know, even if you have a plan in place, if you're not planning it into your nineties and budgeting for those extra years of expenses, you may not be prepared. And yeah, there is a lot of people assuming that they're not going to reach that Big 90 number. But there are plenty of people out there alive right now that are working and are going to reach 90, and many, I think, will reach one hundred as well. I mean, I feel like when someone was having their 100th birthday, it used to be a big story in the news. But even over the last 10, 20 years, it's just become much more common. I was actually just out in Savannah, walking through some of the older graveyards in Savannah. And, you know, I was amazed at how many folks were living, what was then considered to be a full life, and it was only into their forties, fifties. You know, if you live right deep into your sixties, that used to be, you know, a long, long life. But you know, some figures here, human life expectancy over the last 200 years in the United States has more than doubled. And the CDC has recently said that if both spouses live to be age sixty five, it's highly likely that at least one of them is going to live to be 90 years old. So you definitely need to plan for your retirement to last.
Erick Arnett:
Yeah, absolutely. I mean, and it may be when we sit down and do your retirement plan or your financial plan, you know that we find that because the whole point of this is to really create some confidence and some clarity and say, you know, Hey, can I retire at 60? Can I retire at sixty five seventy? Am I going to have a working retirement? You know, do I have to save more? Do I have to spend less? You know, you have to have a plan and you have to have some goals. And the only only way you can reach those goals is if you take little steps each day or so, you've got to stay on top of it. So you're not just kind of, you know, hoping for the best. One thing that people, I think, make a mistake quite often, and I wrote a book about this and called What's your financial speed? You can reach out to me and I'll get it to you. People think that retiring is all about just saving as much money as they can and getting to like this magic number. I need to get to a million dollars or I need to get to two million or three million or whatever your number is. But honestly, retirement is so much in good. Solid retirement planning is so much more than that. It's really about, you know, what kind of income am I going to be able to create? What buckets are I going to be able to take that income from? And and how are those different buckets going to be taxed? You know, there's so much more that goes into it other than let me just try to save as much as I can and hope for the best.
Erick Arnett:
And and and there are multiple ways to generate income. But more importantly, you know, one thing that always comes to mind is if you think about our country in general, the baby boomers are the largest segment of our of our population, and they do have quite a bit of wealth in retirement plans. And so it's somewhere up in the neighborhood of 60 billion dollars, just in retirement plans of people in the baby boomer age. And you know, these folks, there's a lot of wealth sitting there. So when they have to, if they're forced to start taking that money out and then all of a sudden Uncle Sam raises the tax rates on that, that's going to have a big dent in your cash flow. So let's try to generate some tax free income for you, and we can show you how to do that at take point wealth management. And it just really it's just really about putting in some time and working with us and and we can get you there. So and that's that excites me. I mean, I I do this myself currently for my family. It's like by the time I have a goal, you know, by the time I'm 70, I really want as much in tax free as I possibly can. And so what? I have to be doing that and planning for that now, and I'm 50 years old, that's 20 years out. So but I'm doing things now to get me there. So little steps each each year, each day, each month to get there. So super, super important to realize that. Guess what, retirees? You have most of the wealth out there and Uncle Sam could be coming for it.
Producer Sam Davis:
Yeah, that idea of one big magic number is for most people walking around on the street, that is their retirement plan. That's not a good retirement plan, and they're really not even thinking of the right number. Because, like we were saying, with taxes, the government could be a very large part of that big number that you're thinking if all of that money is in a 401K account that people don't think, but they just put in that money every couple of weeks with the paycheck, sometimes they get a company match with it, but that number grows and grows, but it's all tax deferred. And so you haven't paid the taxes on that yet. And like we were saying, you're going to get those required minimum distributions because the government, they want their money. So when you talk about Roth Ladder Conversion, can you explain we've got a few minutes left in this segment just to kind of give people an idea of that process and how it's going to pay off for them long term?
Erick Arnett:
Yeah. First, we're just going to take a look at how much you have and what we call qualified dollars or or retirement plans, which is a 401K or a 403b or your IRA. You know, you get the nice corporate match and and you're on your way. Well, no one tells us no one tells you that, Hey, you know, this is creating a partner in your retirement called the IRS and Uncle Sam. And so, you know, the IRS could be as high as a 40 percent participant in your 401K or IRA when you go to retire. So, you know, Roth conversion is quite simple. We're going to take you through a process and show you how we do this and by taking your IRA or your four one K and rolling it over into a Roth account, paying the taxes and then enjoying a tax free growth for the for the remaining life of the account, as well. As the biggest thing that I like about it is there's no one at age 70 two holding a gun to your head, saying, Hey, you've got to take this money out this year so we can tax it. The RMD requirement goes away as well, so you control your money. You can take it when you want to take it and pay no tax. So the power of the Roth is just huge. And so we're going to show you and illustrate for you.
Erick Arnett:
What that means and how that impacts you, so no matter where you are in life, if you're in your 40s, 50s and 60s or even in your 70s, we can show you how much money you're going to save on the back end. And it comes out to be hundreds of thousands of dollars in cash flow that you don't have to pay taxes in the future. And we show you and illustrate you and show you a picture of that. So. And then it may just be a personal decision at that point. How much do I want to pay in tax each year and we can strategize with you? You know, as an example, some clients do it all in one year. They just want to get it over with. Some do it over five years. We could do it over 10 years, and we'll show you specifically what you would pay each year in tax relative to everything else that you have. That's taxable on your tax return. So one of the first things we do and we sit down with folks is gather that data and information and we ask for two years of tax returns. So is your current advisor asking to see your tax returns every year? It's important that that they do. And so we're going to look at your tax returns, look at all your other income sources and really come up with a good sound strategy of getting you from point A to point B.
Erick Arnett:
And that's all completely free, all completely complimentary. All you have to do is give us a call three five two six one six zero five five one one or just go to our website, take point on retirement and you'll see in the upper right hand corner. You can just click and schedule an appointment and we'll take you through and talk about it. But super, super important and it's easy to do. It's easy to understand and then just boils down to how much do we want to pay currently? And you know, it's people ask me this question all the time saying, I'm like, Should I pay off my mortgage or pay off my home? I've got one hundred thousand dollars sitting in cash or whatever, and I'll show them and illustrate to them, No, don't do that because your interest rate on your home is like, you know, two or three percent right now. Let's take that savings. Convert your qualified money to tax free bucket. Pay the taxes now and then. I'll show you how that growth over five, 10, 15 years of tax free growth. You don't even have to worry about getting taxed when you take the money out to live on in retirement. So super, super huge and a super exciting thing, but a very underutilized tool and one that most people just aren't educated on.
Producer Sam Davis:
We'll talk more about Roth conversions when we come back. Schedule your no obligation consultation now at take point on retirement. Take point on retirement. We'll be right back.
Producer:
Miss part of today's show. Take point on retirement is available wherever you listen to podcasts and online at take point on retirement dot com. At Take Point Wealth Management, we know you've worked hard to earn your money and you've worked even harder to save it when it comes to wealth management and planning for retirement trust. Eric Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule your free no obligation consultation now at Take Point Wealth.
Producer Sam Davis:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Producer:
Welcome back to take point on retirement schedule, your free financial consultation now at take point on retirement.
Producer Sam Davis:
And welcome back to take point on retirement. Sam Davis, joined by Eric Barnett. Welcome back. Before the break, we were talking about Roth Ladder Conversion. And Eric, I just want to finish up that we were talking about the tax savings. When you make that conversion over a period of time from your tax deferred account to a tax account that has already been paid, you know, it's nice that you can experience great savings with that. But the other benefit is that you're not going to have those required minimum distributions and also it can be left tax free to your beneficiaries. And I just wanted to give a personal example because I've, you know, even though I'm younger, I've experienced this in my own life. My wife and I were married, obviously, and she, her father, passed away in high school and she inherited his IRA and it was a tax deferred account that she inherited. And even though we're both in our twenties and we're both working, there are required minimum distributions for that and we're nowhere close to retirement. And, you know, just because we're both working. And then you have that required minimum distribution every year that that is taxed as income, it's actually being taxed at a higher rate than it would be if I was retired and that was my only source of income.
Erick Arnett:
Yeah, I mean, great point, Sam. And so it doesn't, you know, and you're a young guy, but it really doesn't matter what age you are. I hate it. This could create a problem and even an issue. I'm thinking about even you as a young couple, like once you start to have kids and folks filling out college applications for their children, trying to get our student aid and financial aid and stuff, all this goes to the bottom line is reportable income, right? So not only does it create higher taxes, it can also create a burden and really financially have a big impact on the beneficiaries that are receiving those requirement and distributions. So it doesn't even matter what age you are. So the great example, you guys are a young couple and you're having to get this, you know, in a sense, paycheck once a year, which you know, hey, it's great to get some extra money, right? But you know, I'm not sure that the father when he was, you know, planning and saving money was, you know, going to be real happy if you told them that, you know, once your daughter gets this money as high as thirty thirty five, even thirty seven percent, I think is the highest tax rate is some of this money can be taxed as high as thirty seven percent, right? So you're in a sense, you know, even if you're at a twenty five percent tax rate, you know, Uncle Sam is getting a big chunk of that.
Erick Arnett:
And so this is a great estate planning tool as well. In order to imagine being able to leave your beneficiaries, your children, whoever they are a tax free inheritance. And so that's the power of the Roth to that's been is being totally underutilized. So I don't care what wealth category you're in, it's just a great tool, you know, to go ahead and and pay those taxes now or over the next five years and get that into a tax free situation because you don't know your children could be in a very high tax bracket already. And now they're receiving that income on top of it and it's just getting hammered, you know, and it's hard to watch. It's hard to see, Oh my gosh, it's just created a big tax burden for us. You know, I don't even want this money right now. Can't I get this question all the time from folks like Eric? I don't want this money. I don't need it. This this stinks. This is horrible. It's getting hammered by taxes and I'm forced to take it. So let's do some planning and be able to alleviate that would be just fantastic, you know?
Producer Sam Davis:
Yeah. And there aren't many situations in this American life that we are going to have a tax free situation. So that's why it's so important to take advantage of that Roth conversion because it is one of the the rare exceptions where you can put yourself in that tax free situation. And you know, everywhere you look, whether you're buying gas, food at the grocery store, a home, a vehicle, I mean, there are taxes and different kinds of taxes on everything. You know, I know Tax Day is coming up in a couple of months and I already have a stack of forms that that paperwork among them for for the RMD, because that's that's listed as income. You've got to do it, you know, no one wants more taxes. So why wouldn't you put yourself in a situation where you can have less? And yeah, it's just imagine, you know, being able to give that tax free gift, you're giving them money, but you're also not giving them the burden of having to deal with it.
Erick Arnett:
Yeah. And think about everything is income based. I mean, everything you do. So it could disqualify you even for for future benefits and in all kinds of different areas where you, you know, you might be needing some of those benefits that are out there. So. Yeah, just a burden that can be completely alleviated with some, some good, solid planning.
Producer Sam Davis:
Yeah. And you know, that's that's just one of the great things about working with the private wealth management firm and someone like yourself is, you know, even you just bringing up that about, you know, if my wife and I had a kid that was applying for Student Aid and stuff like that, that would affect them, that's something that I've never thought about. You know, I've thought about planning for that sort of expense, but I never thought about how that particular thing might affect it. And so, you know, getting that no obligation consultation from Eric Arnett and the team over at Take Point Wealth Management, you know, they can help you get that plan in place. They can also help shine a light on the corners of the room that you haven't seen in a long time and or you've never seen it all. I'm sure you've you've experienced many times people are surprised because you just don't know what you don't know.
Erick Arnett:
No, that's right. Yeah, I mean, nobody's teaching this in high school or college or I mean, heck, I got all kinds of degrees and finance degrees in this and that. And you know, there was never really any harping on Roth conversions in the Roth accounts, you know, so just it's nobody's particular fault other than if now, if you're listening and you're getting this information and you're not acting upon it, then it's your fault, right? So you definitely need to act upon it and start and start planning now. I just met with a gentleman, great guy, a veteran retired veteran. He's 77 years old and has quite a bit of money in qualified accounts, and he wants to go ahead and get on a plane now and pay off those taxes so his daughter can. His daughter is in her fifties and a high earner, and he understands that, hey, all this money is going to be rolling out to her and getting whacked by taxes. So he wants to put together a plan now to get those taxes paid over the next three years and convert that money to Roth so she doesn't have to worry about it. So. And also, once it's over in Roth, guess what? His retirement and minimum distributions go away, and the older you get when you're pushing 80, they get pretty high. I mean, as much as six percent that they require you to take out. And so it's really deteriorating that estate and that wealth over time.
Producer Sam Davis:
Schedule an appointment with Eric Arnett and the team over at Take Point Wealth Management to see what a Roth Ladder Conversion could do for you and your retirement situation definitely something important to look into. You can also give them a call at (352) 616-0511 (352) 616-0511. And Eric, the next thing we want to talk about is sort of a new kind of investment vehicle. Let's talk about structure notes a bit. What are they and how they can offer a nice amount of protection and also return as well?
Erick Arnett:
Yeah, sure. So one of the things that take point wealth management that we're always doing is is bringing new ideas to the table, constantly searching for ways in which we can help clients hedge against the volatility of the stock market. We firmly believe because we're Active Wealth managers that set it and forget it just isn't going to work, you know, just buying a basket of mutual funds inside your four one K or IRA or whatever and just kind of setting it. And forget it might have been the strategy that your grandfather used, but it's just not the strategy that's going to work for you going forward. So one of the things is asset allocation and how do we shift asset allocation to hedge against the volatility in the stock market? And so one of the tools that we started using last year or structured notes and they're very complicated instruments. So therefore you've got to give us a call and we can get you a white paper. We can discuss them with you. We don't have time to go into it on today's show, but they act as a nice hedge against the market. They're promising very high dividends anywhere between eight to 14 percent we're seeing. In fact, we've had some new ones come out recently that are as high as 13 percent. And so these are one year structured notes with very large institutional banks. And so they also utilize components of the market's options and such things. And so in order to fuel them. But they're an alternative to stocks and an alternative to bonds. And so you certainly inside your portfolio, have to have stocks, bonds, indexed annuities, structured notes, high yield, low yield international, right? So you know, looking having an advisor, an experienced advisor, be able to look at your overall asset allocation and see, is it well positioned for what we're what we have coming ahead of us? You know, when markets are just going up like we saw in twenty one and and twenty and nineteen, you know, a rising ship or rising tide kind of floats, all ships.
Erick Arnett:
I mean, you could have been in virtually just about anything and it did. Well, that's not going to be the case over the next 10 years. So we've got to be able to strategically move. And so as an example, reallocating to value stocks, dividend paying stocks, structured notes, indexed annuities, you know, having all these things working together to take that risk off the table or not not to alleviate the risk, but to lower the risk quite a bit and still get you to where you need to be and meet your goals because we talk about this all the time. It's not about what you make in the up years. Like we talked about that magic number. Like, I just got to keep striving forward to get that magic number and make money, make money and make money. It's not about that. It's also about what we retain in the down years. And so that's where a good advisor and a good wealth management team really earns their stripes. It's not during the good years where everything's going up, you know, and everything's kind of on autopilot and we all look like heroes, right? It's about the years like this where the stock market's down almost eight percent, the Nasdaq is down 12 percent, the Dow is down four or five percent like we're and we're only in February.
Erick Arnett:
So. And you know, we've got geopolitical events going on. We've got the Fed raising rates, we've got inflation, you know. So what's your advisor currently doing now making changes in your portfolio to to kind of hedge against that and to work through that? And are they communicating that to you? It's so important they've got to be communicating that to you, what they're doing. And so how to client the other day, call me and just say, Hey, Eric, you know, are we positioned for this Ukraine crisis? And so walking him through that and and telling him, you know, hey, we've already made shifts to value high dividend paying stocks, those stocks that weather the storm, reducing risk off the table by selling off some of those high growth stocks that did really well in 20 20 technology, things like that. So reallocating the structured notes might be the answer, but you've got to truly educate yourself on it first and foremost, and we'll walk you through that and make sure you're one hundred percent educated on them before you made any type of decision. But it just brings to mind that you know you don't have to know everything, but you really should know what's going on inside your portfolio. And I ask people this all the time, Do you know what your performance has been? Well, yeah, I know I know I made money last year. I understand that your account went up, but what was the percentage that it went up? I have no idea.
Erick Arnett:
It's usually the answer I get. Ok, well, did it go up? 20 percent, 10 percent, five percent. Just going up isn't good enough because, you know, if the stock market was up 30 percent and your account was only up five, then we've got a problem, right? And more importantly, what I like to see is this year, for instance, in our portfolios, are we down as much as the market? Are we down a little less than the market? So these are things that we're watching on a daily basis to make sure that we're protecting assets on the downside. It's so much more important because think about it, if your account goes down 10 percent, 15 percent this year, we've now got to make 30 percent, 30, two percent, maybe even higher because of fees to get you back to even where you started out the year, right? So the bigger the hole you dig, the harder is to get out. So let's not dig the hole. Let's let's maintain as much principle as possible. And then, you know, hey, when when things are really rolling and the stock market's really picking up and things are getting more aggressive than we can always reallocate and catch some of that upside. But this year, particularly, we've got to be more defensive. And like I said, take point. Wealth management was already making those shifts and communicating that to our clients last year. So it's so, so important to not set it and forget it and just hope for the best. It's just not going to work.
Producer Sam Davis:
Book an appointment with Take Point Wealth Management just by going to take point wealth. You can also visit Take Point on retirement. You're listening to take point on retirement or pick up the phone and call (352) 616-0511 and see what a structured note in your plan could do for you. And I think so many people, Eric, think set it and forget it is a good idea because they sort of think back to that Warren Buffett philosophy of just put the money away and forget about it. And you know, it is good to to build that habit of of continuing to invest and not make it something you do once in a while, but something that you actually make part of your monthly budget. But there's no need to forget it. Think about planting a tree. If you walk out in your yard and plant a tree, you know, as long as you're getting sufficient rainfall and the soil is good. Yeah, that tree will grow. But if you have someone tending after it, looking after it, pruning it as it grows, you know, maybe lightning strikes a branch one summer and you've got to mend that. The tree is going to grow a lot better if it's looked after than if you just plant it and forget it.
Erick Arnett:
You know, Sam, I've been doing this 20 for years, and I still have to be constantly out there aware and searching for what's going to optimize my portfolios for my clients and what are the best tools and strategies. So in the markets are never the same year to year. They change all the time and what's driving them and and what's not driving them, you know, in twenty twenty and twenty twenty one it was just technology stocks was the only thing driving the market. And so people have got to realize for four mutual funds and four portfolios to be able to perform and keep up with the markets. The mutual fund managers had to heavily tilt into technology. And those are really aggressive, you know, high growth stocks that carry a lot of risk. And so the risk in people's portfolios was much higher than they even thought may have been because, you know, the portfolio manager was making those big shifts inside of the inside of the mutual funds. And so what was driving the market last year is certainly not driving the market this year. We're seeing financials, we're seeing energy stocks, we're seeing, you know, dividend paying stocks, the Dow stocks that are that are driving the market. You're your stalwarts, you know, like things that have been around for a long time really holding up well in the market. So, you know, it's really about, let's get through this storm and we've been we got out and told our clients last year in the third quarter, like, Hey, twenty twenty two is going to be a lot different.
Erick Arnett:
It's really setting up to be a much different picture. We've got the midterm elections coming here in twenty to twenty two, so every year there's something different and and you've got to have an investment management team that's nimble and constantly looking at and massaging your portfolio to make sure it's optimize for the future. And so set it and forget it. You know, that was the investing over the old days, our grandfathers or whatever bought a stock and whatever, and they held it for 20 30 years and that suited them just well. But it was a lot different back then. I mean, in the stock market wasn't as broad as it is now. There wasn't as many tools. I mean, there's six thousand different mutual funds and five thousand different ETFs out there. And, you know, so everything is more strategy based and whatnot. So it's much, much, much more complicated than people may think today than it was in the past. So that's why I say just, you know, bring take point wealth management on your team. Let us sit beside you as fiduciaries. We're on the same side of the table as you. It's about growing your assets, you know, if we don't do. If you don't do well, we don't do well, so we're a constant student in the game trying to grow and build those portfolios and protect them the best we can through the rough times. And so let's get through these rough times and make sure that we're well positioned to capitalize on the future.
Producer Sam Davis:
Yeah. And no matter how much money you make, no matter how much money you have, we're pretty sure that the money you have is is important to you and something that you want to protect and grow and you probably want it working. It's hard for you as you worked for it, if that's possible and there's a lot of people out there. You know, we've been talking about some of the mistakes people make today, assuming retirements, just having one big magic number or not living or not planning on living until their 90s, which is something that's becoming more and more common. There's just a lot of people assuming that they can handle retirement planning by themselves. But you know, I can't think of anything where if you do it by yourself, that's going to be the best way to do it, really, when it comes to to something where you really need a plan, know if you want the best for yourself. You can't do it by yourself and you've got to think, you know, if you're married like myself, you know, if you're the husband and you're handling all of the financial plans and retirement, or if you're the wife and you handle the family checkbook and you've got everything sorted out and you happen to pass away first, then your spouse is left without a plan. So it's important, right, Eric, to have a fiduciary, someone that only makes money when you make money and they're obligated to make the best decisions for you and advise you on the best decisions to make, right?
Erick Arnett:
Yeah, one hundred percent. I think it's the best model out there, and we we tend to show people is like, Look to have us by your side really isn't going to cost you more than what you're probably already doing and trying to go at it alone. So why not have that third party consultant along beside you? I mean, I think I think I sit here and think about some of the best leaders in the world, right? Who comes to mind like even in the financial markets like Warren Buffett, Donald Trump? I mean, you know, all these leaders, OK, they they surround themselves with with consultants and people that are knowledgeable and experts in their fields. They don't try to manage everything themselves, right? A good leadership tactic to lead your family to and through a successful retirement is to surround yourself with a good team. You know, whether that's a CPA, an attorney, an investment adviser is go out there and seek those folks that are going to stand by your side and build a relationship with them. Yes, you're the leader and you're the and you're the steward of your dollars and your money. And I always firmly believe that you have to be the most responsible one when it comes to managing your finances. But why not go out there and seek a team that can stand beside you and has the common interest in your best interests in mind? And that's definitely a fiduciary. And that's definitely take point wealth management. And that's the way I've modeled my business since I've been in the business. Twenty four years as a fiduciary.
Producer Sam Davis:
And we've got just a few minutes left. So Eric, could you tell the people what they can expect after they visit, take point on retirement or call (352) 616-0511 and schedule their appointment? You know, what can they expect in that first consultation? What is that going to be like?
Erick Arnett:
Yeah, I'm really hoping that there's some folks out there listening today that want to become what we call retirement warrior's right. And so take point. Wealth management was established. The name take point because of my military background. You know, I really have a passion of helping folks and leading people and taking that point for them. Watch you on the team. I want you to be a part of the team, but sometimes you just need a leader to take point and lead you through this myriad of of noise. In this most difficult thing to do is to create and build and optimize and protect a retirement plan, right? So, you know, it's real simple. I mean, if you give us a call (352) 616-0511 or go to our website, take point. Well, you can also go to our our radio site, just take point on retirement and you'll see in that upper right hand corner. There's a little box and it says, schedule an appointment, just click that. That's going to come right into my calendar and all I'm going to do is reach out and we're going to have about a 15 to 20 minute really laid back conversation. That's it. That's how it all gets started, you know, and find out if we're a good fit, if we can really help each other, we're not always a good fit, you know, for everybody. And we don't take just everybody as a client, either. So let's just have a chat and see what it is that your concerns are. And then we'll talk about what your plan is going forward. Because Sam, everybody's different. Every single person. I mean, I take hundreds of calls, calls a month and emails, and every plan is a little bit different, right? Everybody's situation is a little bit different.
Erick Arnett:
That's why we tailor it. I hate the. Kind of stuff you see on TV. I'm not going to mention any names, but you know, these these, I guess media icons that just make these blanket statements across the board. This is what everybody should be doing. No, no, no. That's not the case at all. Everybody has their own individual needs and everybody has their own individual plan. So I consider us the Taylors. Let's tailor something for you that's going to help you reach your goals and also create as much stress free retirement as possible. I love that word stress free, so that's really all how it goes. And once we get that data and information, we'll go to work for you and we'll start building out a plan and showing you the steps to get there. And there's no pressure if you if you want to do it on your own and you need a coach, we'll talk about that. If you if you really are looking for a partner to kind of take the reins, we can talk about that. So there's multiple ways that we can build the relationship. But the first step is just picking up that phone and getting the conversation started. And I tell people like, Look, I do all kinds of educational seminars throughout the Tampa Bay Area and I love to educate. But the next 10 years is going to be nothing like the last 10 years. It's really, really important to have a good, solid advisory team by your side, and I can't stress that enough to our listeners.
Producer Sam Davis:
You've been listening to take point on retirement. Don't forget to visit, take point on retirement to learn more and schedule your free consultation today. Eric, thanks for being with us today.
Erick Arnett:
Just such a pleasure and look forward to the weather warming up a little bit. I want to get out there and do some fishing. I'm dying to get that boat fired up, so hopefully it's going to warm up, man. It's been too darn cold around here in Florida, but looking to get out there, hopefully it's going to be warm so I can do some fishing and hopefully the fish are biting. But you know, let's let's there's so much stress out there and so much going on, but let's help create a stress free retirement plan for you. So give us a call.
Producer:
Thanks for listening to take point on retirement. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free no obligation consultation visit. Take point on retirement or pick up the phone and call (352) 616-0511. That's (352) 616-0511. Investment Advisory Services offered the Brookstone Capital Management LLC. Bcm, a registered investment advisor and Take Joint Wealth Management, are independent of each other. Insurance products and services are not offered through VCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.
Producer Sam Davis:
A purchaser should evaluate and understand all of the risks and costs of an investment in structured notes. Essenes prior to making any investment decision, a purchase of an SDN entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have a right to withdraw his or her investment prior to maturity or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure statements for a S.N. before investing. An investment, in essence, is not FDIC insured and is subject to credit risk. The actual or perceived creditworthiness of the note issuer may affect the market value of SNS. Essenes will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell Essenes. As a holder of SNS, purchasers will not have voting rights or rights to receive cash, dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of Essenes prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original issue price and any sale prior to the maturity date could result in a substantial loss. Essenes are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of SNS may be uncertain. Purchasers should consult their tax advisor regarding the U.S. federal income tax consequences of an investment. In essence, if a person is callable at the option of the issuer in the and is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the S.N..
Producer Sam Davis:
Assassins are not FDIC insured, may lose principal value and are not bank guaranteed. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary the value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment for. Folio historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee. The occurrence of which would have the effect of decreasing historical performance results, economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy, not FDIC. Insured may lose principal value. No bank guarantee.
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