Eric and Randy discuss how they can help people manage risk in retirement. Did you know that working with a financial advisor could actually save you money in fees – what are you waiting for?

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1.27.23: Audio automatically transcribed by Sonix

1.27.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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 predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Take Point on Retirement with your host, Erick Arnett. Erick is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Take 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 Erick Arnett.

Erick Arnett:
So, hey, everybody, welcome back to Take Point on Retirement Radio. So glad you're here with us today. Welcome to the show. My name is Erick Arnett from Take Point Wealth Management. This is Take Point on Retirement Radio. We've got a great show for you guys today. Stay tuned and our packed show of information. And then, of course, we have with us some wonderful guests And folks, we have Mr. Randy Woodruff, our CPA extraordinaire. Always good to have Randy with us today.

Randy Woodruff:
Good morning.

Erick Arnett:
And, of course, Mr. Sam Davis. Sam, thanks for being here with us today as well.

Producer:
Yeah, Welcome to the weekend Retirement Warriors. I hope you enjoyed the show today. And if you missed part of last week's show, Randy and I had a pretty good show I think we put together and you can find it on the Take Point on Retirement podcast feed wherever you listen to podcasts.

Erick Arnett:
Yeah, today's show is going to be about building a smart retirement plan. So get your notebooks out, get your pens and papers out. You know, we've often if you listen to our show on a regular basis, you've probably heard some of this in the past. And that's okay because repetition sometimes is a good thing. And, you know, nothing has really changed. You know, we need to get this message across and we build smart, safe, smart risk and smart tax plans here for our clients here. It's called the Smart Retirement Plan. So all our retirement warriors, Thanks for listening. Tampa Bay. Thank you. Port Charlotte, Sarasota, Bradenton, Punta Gorda, and of course, the Nature Coast, all the way into Citrus County, the villages in Ocala. We're so glad you're listening to us today. So if something on the show today makes sense to you or you just have some questions, please reach out to us. That's why we do the show. It's purely educational, no obligation to do anything. Our number is 352 616 0511. That's 352 616 0511. Please reach out to us. We love, love, love hearing from you. We love hearing your comments. But please don't just call and leave a message and say, are you a Democrat or a Republican? I have to bring that out, guys. It was so funny. I got a call the other day from somebody.

Erick Arnett:
You just left the voicemail. I was calling off the show and all he said was, are you a Republican or a Democrat? So we're not going to get into politics here. It's all about retirement planning, but I had to share that with our listeners. Hopefully you guys get a chuckle out of that. But anyways, our website is TakePointWealth.com so you can go there in the upper right hand corner, you can just click the little button you'll get right on my calendar. If you don't have time to call, you just take out your little smartphone there. Just Google take point. We'll come right up, get on to our website. In the upper right hand corner is here a little box you can just click on there and and jump right into our calendar for a 1520 minute chat and we can discuss what might be concerning you. And then also, like Sam mentioned, of course, our podcasts Take Point on Retirement radio. You can get that podcast anywhere Spotify, Apple, iTunes. You know, Sam, you're the younger guy. I don't even know where all those apps are these days, but you might want to give them a shout out and let them know where they can get the podcasts other than our website.

Producer:
Yeah. So if you've got an iPhone, you'll likely it'll be the easiest to find us on Apple Podcasts. If you have an Android or Google Phone, you'll find us on Google podcasts, but we're essentially available wherever podcasts are found, including Spotify, Stitcher, iHeart, all of those. And you can also find us on the show website. TakePointOnRetirement.com . There you can listen to past episodes, you can look through the transcripts of our shows. You can even watch videos of some of our episodes. So check us out their TakePointOnRetirement.com .

Erick Arnett:
Thanks for sharing that with us young buck because I'm a little bit technology challenge when it comes to that and funny funny story actually I was on a conference call yesterday with my assistant and one of my I.T. guys and they she, you know, she's a younger gal and she said, you know, are you on Twitter? And I was like, What do you mean I'm. On Twitter. I said, I'm not even sure I know what Twitter is. She's like, Well, that's really how you can reach the young people. So I guess I got to get on Twitter to guys. I don't know. But anyways, always a rapid, fast paced kind of movement in that space and it's just always something I don't know, Twitter, What's the other one's? Oh, geez, help me out, Sam.

Producer:
Well, I mean, it could be. It could be.

Erick Arnett:
Facebook. Oh, tick tock, tick tock. Not Twitter. I'm talking about tick tock. Yes. What the heck is tick.

Producer:
Tock, Erick? It appears it appears you are on Twitter, by the way. Maybe you didn't know.

Erick Arnett:
Oh, hey, there. I am. I am on Twitter. All right, So you can tweet to me if you want, I guess.

Producer:
Yeah. You can find us on Twitter at Erick Arnette. Get in touch with Erick there. But if you want to reach him a lot faster, you could pick up the phone and call 352 616 0511. That'll that'll reach his pocket a lot faster.

Randy Woodruff:
I think we're better at phones and smoke signals and things like that as opposed to Twitter.

Erick Arnett:
Yeah. If you, if you want to get a hold of Randy, just build a fire in your front yard and start waving the smoke this way. Maybe, maybe we'll get we'll get to you.

Producer:
But No.

Randy Woodruff:
Pony Express is how we get our mail.

Erick Arnett:
To. All kidding aside, we've got a great show today for you folks. So quote of the week, We always love doing quote of the week. We're going to do talk a little bit about inflation and give you an update there. And then, of course, we're going to get right into how do we build a smart retirement plan. And it's all about having smart risk, smart, safe, smart tax. And then we're going to talk a little bit if we get to it at the end of the show, because we seem to chat and bloviate quite a bit. So I'm not sure if we'll get to this week in history, but we're we're going to surely try. So Sam, you always do a great job leading us off and we love these quotes of the week's.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week. So this week's Financial Wisdom quote of the week comes to us from AmErickan humorist Evan Asare, who wrote Acer's Comic Dictionary in 1943, as well as 20,000 quips and quotes in 1968. His quotes are commonly found in crossword puzzles. And here's the quote of the week Some taxpayers closed their eyes, some stop their ears, some shut their mouths, but all pay through the nose. I love that quote.

Erick Arnett:
Randy, what do you think about that one?

Randy Woodruff:
You know, it's unfortunately know we had a quote last week from who's the guy that wrote Tom Sawyer and Huck Finn. I can't think of the name of the twain. Mark Twain. Yes. And he said he had quote back from his time frame with well over 100 years ago. That was if he was living in today's society, it would be he'd be blown away. And look at when this guy was born in 1899 and and that's in 1995. And and so for someone that was in this era to feel this way about paying taxes and and it's you know, it could be even more so a problem for those of us in the future. So yeah, it's interesting as you read back through some of these quotes over time and I love this segment of the show, the words of wisdom. These guys had 50, 150 years ago, and they're still so important today, even more so important today. So thanks, Sam, for looking this up for us.

Erick Arnett:
Yeah, I kind of could equate this to and replace the word taxpayers with investors. And some investors closed their eyes, some stopped the ears, some shut their mouths, but all end up paying through the nose or making mistakes. And that's one you know, one of the things that I wanted to just share with people, if you're listening, you know, things are getting better. You know, one thing that we do here take point is we really dive into the data. You know, we're kind of numbers nerds and we pay close attention to the charts. The data. You know, there's over there's probably over 200 and some odd economic data points that we look at so closely to guide us and our investment decisions and our allocations. And and we're seeing a lot of improvement over the last three months. You know, the stock markets are up, you know, six, seven, 8%. The bond market has also stabilized and rallied. So, you know, the big and the big picture, you might still be feeling some pain and you think, well, my portfolio, 2022, my portfolio got pretty hammered, but it is recovering. And this is great news, folks. You know, this is why we do what we do here at take point wealth. You know, you have to stay in the game. You have to stay invested, but you have to have a smart plan. You have to have a tactical portfolio. And so there's money to be made everywhere. If I could share some charts with some folks and, you know, I'd love for you to call in.

Erick Arnett:
We can do a Zoom call. I can share my screens with you and I'll show you some charts, show you some data that it's really positive stuff. I was super excited to know that our clients weathered this storm and and you can weather the storm if you have the proper investment plan and the proper portfolio, the proper retirement plan. So I just wanted to give those words of encouragement. We are recovering, we have recovered and think about it. As bad as things were in 2022, if you could sit here and say right now, och, basically I'm flat, I haven't lost anything. So we're ready for the recovery. And think about it, folks, there's the talk of recession is still out there, of course, and it's very prevalent and potentially will probably happen. Maybe a mild recession. Maybe we don't have a recession at all. I don't know. I don't have a crystal ball. But what I do know is that the markets will already recover before we even know we're through the recession. So it's starting to if I look back at charts, it's really starting to grind higher and grind forward. A lot of your Dow stocks, your value stocks, I mean, there's positive returns or energy stocks, super positive returns, gold, You know, you have to have a diversified portfolio to weather all storms. And that's what we're offering to you. Please give us a call. 352 616 0511. We're here standing by the phones. We're ready to show you what we do and then we'll give you a free evaluation.

Erick Arnett:
Take a look at your portfolio. Maybe your portfolio or your retirement plan didn't do so well. And let's look at why. Let's look at the risk inside there. Let's let's take a real look at why, you know, you kind of been lagging the market's. You know, I tell people all the time, if you have an advisor out there, a broker or investment company or whatnot, you really need to know how to gauge your performance. You've got to look at what we call the benchmarks. And the benchmarks are your indexes, you know, your S&P 500, your Dow. Your aggregate bond index, your E, then international index. How are you? How is your portfolio performing versus the indexes? And so we we we have outpaced and we've beaten the indexes, and that's fantastic. But I want to make sure everybody else out there is doing the same. So just give us a call. Also, you can reach us at our website TakePointWealth.com and we're happy to get a free put together, a free no obligation plan for you. It's very detailed. We put a lot of work into it. We'll take the time to get you on the right track, but it's time to get in the game folks. I mean, you really can't let fear paralyze you any longer. And we're already seeing positive returns. If I look back over the three months, we have some really nice gains. So like I said, back in September, October, November, this market.

Erick Arnett:
And when I say market, I mean all markets, the stock market, the bond market, the international markets, they will start to grind higher. And even if it looks like, oh, two steps forward, one step back, one step back again, two steps forward, and you're like, hey, you know, you see all this volatility. But if we look at it over the long haul, it's really starting to grind four and grind higher. And there's money to be made everywhere. You know, depending on where we are in the economic cycle, there's money flowing everywhere. So you've got to be tactical. That's the key word tactical. If you just have a static portfolio or what we call passive portfolio, where there's not a lot of action or changes or or shifting shifts being made, you really owe it to yourself to have an actively managed portfolio. And that's what we do here at Take Point Wealth Management. So with that being said, Randy, looking at when you're talking to clients out there in the CPA world, I know you're meeting with a bunch of folks on a daily basis taking care of all their tax problems or tax issues and getting them get on track. You know, what do you tell them or what do you share with them when they ask you about financial advice? Or do I need a financial advisor? And I'm kind of doing things on my own. What are some of the reasons you maybe folks should really consider working with an advisor?

Randy Woodruff:
It's important again that you have a financial advisor because the markets are complicated and we can sit down with you, help you understand where you're at, put together a plan, a strategy for you and educate you along the way. And the more educated you are, the more you understand, the more time you yourself put into understanding the markets and educating yourself, the more you're going to you're going to feel more nimble, like you know what's going on and you're going to feel like you're going to feel comfortable making decisions, adjusting your portfolio and begin to be forward. Looking at the data that's coming in and know how to read the data as opposed to looking at what's happened in the past and making decisions off that. And then when you talk about a tactical portfolio, that's what we do here at Take point. We're not just looking at history is a great guide and it helps educate us and helps us develop trends. We have to look at data coming in and that's what helps us stay tactical and stay nimble here. Take point.

Erick Arnett:
Yeah. And you know, things that come to mind to me is if you're folks, if you're out there listening, you get a pen and paper, write this down, put on your refrigerator. It's really important that you are holding your advisor, your broker, whoever that may be, to a high standard. And if so, you know, a couple of things come to mind for the reasons that I think people need to really consider working with an advisor. And guess what, folks? It's probably not going to cost you any more. One of the misconceptions is, Oh, if I work with an advisor, it's expensive. Guess what? It's probably not going to cost any more than what you're already paying. So if you don't have a formal retirement plan, if you're if you're one of those retirement warriors out there and you're in that retirement red zone, you know, you really need to consider having a formal plan. You know, it's like a it's like a roadmap. It's like a barometer. I mean, whatever you want to call it, you just can't have a hodgepodge of investments here or there. You got these orphan for one KS and IRAs all over the place, and you just don't really know what they're doing.

Erick Arnett:
If I asked you, what's your performance, you know, exactly what is your performance on a percentage basis versus the benchmarks, Could you tell me what are your fees? Could you tell me truly tell me what all your expenses are, your internal expenses, your management fees, trading costs, commissions like really? Do you know what you're paying? Do you know what your tax consequences are or implications are going to be? Do you understand the risk you're taking with your investments? Do you know what your standard deviation is of your portfolio? And that's a big word. I understand it's actually a two words if we break it out, but Google it, look up standard deviation. That is the standard in our industry as to how we measure risk. And that's one thing that I watch. Mostly every day in my portfolios. What is the standard deviation, how the portfolio is reacting to different markets and keeping in line with those and trying to outperform that and just making constant fine tunes and adjustments?

Randy Woodruff:
Erick You mentioned something earlier that I wanted to pivot back to and it was, you know, people are wondering what's it cost to work with a financial advisor? And earlier in the show you mentioned you were on the phone with a client this morning and because of the planning we did, we did with them and the adjustments that we made that were forward looking and tactical, they're basically flat for 2022. So don't just look at what your what, what working with a financial advisor is going to cost you in fees. But look also what it's going to cost you. What would it could save you in terms of not not losing money in the market, not being down as much as the market is making sure making sure someone's making those adjustments for you ahead of time and not just putting you in a portfolio and just set it and forget it. We don't do it. Do that here. Take point. So when you're looking at what a financial advisor is going to cost you, it's not just the fees, it's also what we're going to save you in the market as well by not by your portfolio, not dropping as much as the overall market.

Erick Arnett:
No, no, that's that's an awesome point, Randy. It's a great point. And obviously as an advisor, I'm probably a little bit more sensitive to this. When people say, you know, people get concerned about fees and what they're paying us for fees and, you know, so just to be a little rhetorical and and not overly serious here, but when I say this. But you know, what? If OC if the stock market was down, let's say the Nasdaq over the last year is down 18%, -18. Those are growth assets. Those are those are those are your growth part of your growth portfolio. The Dow is actually basically flat. So Dow is your your value stocks, your consumer staples stocks, your stocks that kind of really hang in there during recessions. It doesn't matter what's going on in the economy. We still need these goods and services. So these stocks are really doing well and outperforming right now. So, you know, if if your portfolio was flat for the year but the markets were down 18%, just take your portfolio value and multiply it by 18%. So if you had $1,000,000 portfolio, that's an 880,000. Right. I guess off the top of my head, I'm no mathematician here, but I think Randy, am I am I correct with my math there? But, you know, you're down a couple hundred grand plus fees. I'm pretty sure if we saved just in hypothetical terms, if we saved you that much money than we earned our fee. So I had a guy tell me one time, Erick, I don't care what your fee is, as long as you're putting money in my pocket, you know? And I used to work for a company years and years ago, and their fee was 2% plus they took 20% of the profit.

Erick Arnett:
This was years ago. And people would say, Oh my gosh, that's really expensive. And I'd be like, Yeah, it is. But what if the guy's dumping ten, 15, 20% into your portfolio every year? Are you okay with that? So don't get too caught up in the fees if the values they're the values there. Right? So but however, when I say that, I say that with caution, because there are a lot of folks out there that are suffering from what I call expense bleed, you know, slowly their portfolio is bleeding because there's way too much expenses. I mean, I've seen portfolios when we take take them in and we do our analysis for them with our free plan. You know, we see sometimes where people are paying three, 5% in their portfolios. And so that is excessive and that's that can be damaging over time. But we'll show you that no matter where you are and what you're doing, you can have us on your team and probably pay less or are about the same what you're doing right now. So anyways, not to get off on a tangent about the fees, but you've got to understand your expenses. You've got to understand your risk, especially as you're getting older. You know, should you pay your house off or not? If you don't have health care, if you don't have a health care plan in place for you or your family's future, you know, we can help you put a health care plan together as well and show you we can do a health plan for you to show you what health care costs are going to look like in retirement.

Erick Arnett:
And even if you're in that phase where you need to kind of bridge the gap until you get to 65 and Medicare and we'll show you what Medicare costs are going to be. So, you know, you need to understand what your expense ratio is and you need to meet with an advisor. It's really important. And even if it's not us, just. Meet with an adviser. And to have that person on your team, I think is just invaluable. That's one of the things that we do here at Take Point is we surround you with a team. I mean, we've assembled what we think are some of the best in the industry, in our marketplace. You know, we have a CPA on the team, we have an investment advisor on the team. We have attorneys on the team. We have real estate experts. We have Medicare experts. So we have life insurance experts. So estate planning, whatever the question that your questions may be, we've kind of have a one stop shop for you. And, you know, Randy and I have been in this marketplace and we've been doing this for over 25 years together. And, you know, we've we've been able to really assess and assemble a pretty awesome team. We're super proud of it. And so we just we're excited about 20, 23 and we want everybody else to be too, and we want everybody else to get back on track. So, you know, just just a few things that come to the top of my mind as to why we really think it's important to work with a financial professional.

Randy Woodruff:
Yeah. Erick Here at the CPA firm, we see time and time again people coming in and get their get their taxes done and say, Well, I did my own taxes last year or I had somebody else do my taxes last year and they worked out of their house or are they whatever? I have my my mother in law do my taxes for me. And time and time again, we see opportunities to look into someone's taxes, usually go back and amend their taxes and get them some money back or to restructure some things so they have a better tax plan going forward. So the same thing is true with financial services. I mean, you know, it's complicated as the tax code is. The financial services industry is just as complicated. And most of you folks out there aren't doing your own tax or or if you are, maybe you shouldn't be doing your own taxes. And the same thing is true with trying to manage your money. I mean, it's just getting more and more complicated. And there's there's we were I was talking to someone yesterday about about some annuities and and I said, you know, 20, 30 years ago there was so few products when it came to annuities or life insurance to pick from. Now there's just there's almost an endless, endless, say, supply, if you will, or options for someone to pick from and share with them a brief story.

Randy Woodruff:
I didn't mention any names, but how we use an annuity product to take care of a client recently for not only for to give them some some income, but also to take care of a long term care insurance need they had as well. So we were able to use one product to handle two needs. So here again, that's an example of how, you know, just like taxes, financial planning, financial services, financial advice is very complicated and trying to go it alone. It can be it can be can be very daunting. And you get that get to that point to where you don't know what you want to do because there's so much information to pick from and choose from. And then you end up doing nothing. You want to stay right where you're at. You wind up instead of making decisions that are strategic and timely for you to to readjust your portfolio, to react to what's going on in the market or to get ahead of the market, you wind up just ride the market down and just you just ride the wave and not really being able to be strategic and timely to to set yourself up in a better position financially.

Erick Arnett:
Yeah, no great points. I mean, you know, I mean, you and I, we probably put 8 to 10 hours a day into this, you know, and we're students of the game. I mean, I've been in the industry 25 years and I have to stay on top of my game every day just for that reason. I mean, it's the everything's constantly evolving strategies, products, markets, you know, all the dynamics. And so you really have to be a student of the game and you've got to be in it 24 seven. And so I just don't picture folks out there, our listeners, our retirement warriors wanting to do that. You know, you need to be out there starting to enjoy your retirement. If you're still working, you get that orphaned for one K, whatever it may be, or even if you're for one K, don't wait until you stop working. Let's look at it now. Let's get you let's get a plan in place now for when you do retire. You know, you really need that that smart retirement plan in place now and it's never too early to start working towards that. So anyways, we we got so much to offer folks and we've got a lot more information coming at you. We're about halfway through the show, so we're going to take a little break. And when we come back, we're going to dive into what is risk exactly and how do you evaluate it in your portfolio.

Producer:
You're listening to Take Point on Retirement to schedule your free no obligation consultation visit. TakePointOnRetirement.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 Erick 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 two point wealth dot com.

Producer:
You may already know what you want your retirement to look like, but do you know how to start planning to get there? I'm Matt McClure with the Retirement.Radio Network . Powered by AmeriLife.

Producer:
Where am I? I don't know.

Producer:
That's a question you must ask yourself before you start plotting out your retirement planning journey. After all, if you don't know where you are, it's pretty much impossible to get to your destination. Step one is keeping track of money that's coming in and what's going out, otherwise known as a personal budget. It's an important thing to have. But a Gallup poll from 2016 found only 32% of couples keep a written budget of any kind.

PBS:
A lot of people tend to think of budgeting as prediction, estimating what you'll make in future months and how you'll want to spend it. But the most effective budgets work exclusively with present dollars. After all, you can't give orders to soldiers that don't exist, so the size of your army is only how much money you currently have in your bank accounts. And as general, your role is to give every last one of those soldiers a job to do.

Producer:
That from PBS's $0.02. Now, once you have a basic idea of what you're dealing with, reach out to a financial advisor, a professional who can go more in depth.

Producer:
We want you to do a financial checkbook checkup. It's just like getting a checkup at the at the doctor's office.

Producer:
Ford Stokes is founder and president of Active Wealth Management. He says getting a smart inspection of your finances is essential.

Producer:
You want to review your accounts, you want to look at your IRAs, your four links. Anywhere you hold assets, including cash, you want to check your balances, you want to review rates of return over the last 12 months, three years and five years. You want to answer this question, Do you have an income gap or do you have an income surplus?

Ford Stokes :
Understanding where you are now will help you plan for the retirement you want, leaving your future in your hands instead of the hands of the market or the IRS. So are you ready to reach out to a financial advisor for a smart inspection of your current situation? That's a key question to consider before you start your retirement journey With the Retirement.Radio Network Powered by AmeriLife, I'm Matt McClure.

Producer:
Welcome back to Take Point on Retirement schedule you're free financial consultation now at TakePointOnRetirement.com .

Erick Arnett:
So hey retirement warriors we are back. Thanks so much for listening. We got another segment about 30 minutes to go here so super excited about that. And I promise you we would dive into some details. We've got, of course, Mr. Randy Woodruff with us here, CPA extraordinaire, and then Sam Davis, our deejay. And so, anyway, let's get it right into it. Smart risk is a big part of our planning process. And to build your smart plan by considering the risk you will face during your retirement and learning how to best handle them. Super important to really pay attention to risk. And Randy, this is why people tend to sometimes get in trouble. And you know, and if you're looking at your portfolio right now and you're like, man, even after the recovery, we recovery, we have had over the last three months, I'm still down ten, 15, 20%, then you probably have a little bit too much risk in there or, you know, you're suffering from a lack lack of tactical allocation. But smart risk investing is an investment strategy, and it's designed to maximize returns while minimizing risk. That's the key. That's the thing that we focus on here every single day. I'm always looking at how can I squeeze the juice out of a portfolio or an investment strategy where I'm really get the risk dialed down as much as possible. But I'm still getting some good returns to keep up with inflation and to also keep up with your financial speed. Everybody out there listening has a different financial speed. And what I mean by that is Randy might only need to get three or 4% on his money to reach his retirement goals.

Erick Arnett:
I might need 8 to 10% on my money to reach my investment goals. I know Sam probably needs about 30 or 40% to reach his investment goals, but because he's just a young buck, he's got a long way to go. So he can he can swing for the fences. But if you're in that retirement red zone, you know that 55 to 65 zone, listen, we've got to dial in on this risk and we're offering you the opportunity, if you call us right now to schedule an appointment or just that 15 minute chat, I will gather the data that I need and I will evaluate and I'll tell you exactly what your risk is. I'll tell you exactly what your standard deviation is, and I'll show you in the portfolio where your biggest risk lie now and going forward. And if there isn't anybody that was able to explain to you why your portfolio did what it did in 2022, please give us a call. Investors need to consider their individual needs and goals as well as their risk tolerance. So you know that that old you know, that old, I guess, standard where you go, you sit down with an advisor and he's like, okay, what's your age? Fill out this questionnaire. Okay. Based on that, we're going to put you in this kind of static passive ETF or mutual fund portfolio. And you know, it's a moderate portfolio. So we're going to have about 60% stocks, 40% bonds. And you should be good. Don't worry about it. I mean, that's really it sounds crazy, but that's really like 95% of the industry and 95% of folks out there how they're going about it.

Erick Arnett:
So, you know, we really take a close look at every family, every individual, and look at their specific goals and needs. And then we build a tailored tactical smart plan specifically for them. And a big part of it is this risk. You know, diversifying people got to be diversified means investing in a variety of different asset classes, such as stocks, bonds, real estate, commodities and other financial instruments. You know, if you have a portfolio that has commodities in it, you've got real estate in it, some bonds, some stocks. You know, you really weathered the storm nice in 2022. But if you're kind of, you know, maybe shifted or allocated a little bit too much to stocks and maybe you have a little bit too much just in growth or aggressive mutual funds or maybe you maybe you were scared the market completely and you put it all in bond funds and you still lost 15%. Right. So you can't you've got to be very careful. You can't just have apples in your fruit basket. You know, I always you know, it's kind of an elementary analogy, but if if you're sitting at home and you got a fruit basket, you know, you don't want to just eat apples all the time. You want apples, grapes, oranges, bananas, grapefruits. I don't know what else persimmons, pears. You know, we want we've got to have variety because sometimes those apples are going to be sour. And so it's really important to have that diversification.

Randy Woodruff:
Erick, when you talk about diversification, it brings me back to something that we were missing on the show for years. And we're talking about we've been talking about people to think about getting out of bonds and getting into other other types of assets because we knew that rates were really low on bonds for years. Interest rates were so low. And then we've seen in 2022 that interest rates just went up astronomically quick and bonds got crushed. I think maybe for the first time in history, both bonds and the stock market were actually down for the year. Maybe this happened before, but it happened. It rarely happens. And so I think a lot of people were caught off guard by how quickly interest rates went up and really had an impact on people's bonds, bond portfolios. And so I'm really glad that we were out ahead of that for the last at least two years and recommending people think about other options besides bonds, because it just seemed like eventually interest rates are going to have to go up. That's what conventional wisdom was telling us. And sure enough, they did. Of course, I think we were all shocked too, how quickly they went up, but nonetheless they did. And so so it's just part of allocation. And in terms of being tactical, it's just one of the ways here. Take point that we do that.

Erick Arnett:
No, and it's a great point because on historical rise in interest rates, you know, is the first time ever in our nation's history if you had a portfolio blended of stocks and bonds, which probably 95% of AmEricka does, is the first time ever think about this, that's this is kind of crazy even to say is the first time ever we had a double digit negative return in bonds in the same year that we had a double digit negative return on stocks. So it was you know, it was a crazy historical year. And that's exactly right. It's about because of interest rates. Interest rates change when there's a dip or a rise in the overall economy. Right. So our economy was on fire and so the Fed had to come in and start raising rates. Well, guess what, folks? We were we as advisors who are in the game, we were out way ahead of this. You know, if you go back and look at our podcast or listen to our podcast, two years ago we were warning about this. So we were prepared for it. So, you know, changes, we knew changes in interest rates were going to come and we knew that they could have a significant effect on our families and our portfolios and they can affect the economy as a whole. Right? So, you know, so that's what we've seen. The Fed is really aggressively trying to tame what is the next one of the next biggest risks that our retirees need to pay attention to and consider very strongly is inflation.

Erick Arnett:
And I can tell you that we talk about inflation all the time. Even before inflation reared its ugly head this year, we always talked about inflation. We want to make sure our retirees stay on pace to at least beat inflation when we're designing their retirement plans and and managing them on an ongoing basis tactically throughout their retirement. So we've got to pay attention to inflation. It has a significant effect on our spending power as Americans. Inflation continues to rise, our spending power decreases. So when planning for retirement, it's important to consider how rising inflation might affect your retirement accounts and your future budgets. I mean, you just got to really pay close attention to it. And right now, Randy, I'm sure you're seeing this all the time. One of my biggest concerns is I think a lot of people because there was so much going on and then it creates this level of fear. They probably went to the sidelines and are just now sitting in a bank CD or a money market or maybe a US treasury. I had a guy tell me the other day, you know, he's got he's just putting seven or 800,000 into a T-bill, you know, which is a very short term Treasury bond making around three and one half percent. And meanwhile, the market went up 7% or more in the last three months. Right.

Erick Arnett:
So, you know, you just that's wonderful. You have that safety and kind of that comfort, that little blankie. You can go to bed at night with your little blanket and be like, okay, I feel comfortable, but guess what? It's not a good answer for your long term health and your long term retirement inflation will suddenly silently eat your retirement alive, and so will taxes and interest rates and fees and everything. So one of the biggest risks that you have to pay attention to as a retirement order is inflation 100% in market timing. And that's what we talked about, Market timing. You know, you can choose when to retire, but you can't predict what the market will look like when you when you do. Right. So your retirement may look a little different. If you retire during a recession, then it would in a more favorable market. So by having a formal retirement plan, you can be more prepared for whatever happens. And so, you know, just so many risks here. You know, Randy, we've got to talk you know, we've got to be concerned when we're building plans about liquidity, longevity. How long are you last? How long are you going to live? Are you taking. Too much from your portfolio. Have folks sometimes we sit down and like, Hey, look, you know, we've got to have this hard conversation. You're taking a little bit too much from the portfolio. My son is also a financial planner and he's up there in the Atlanta area.

Erick Arnett:
And he was he's a young guy. He's just starting out in the business and he's starting to have his first meetings. And he was telling me this really sad story the other day, and he's starting to see that this job isn't just about numbers. It's also an emotional job, you know. And just share this quick story, because I know we like stories, but, you know, this this this one lady, she her and her husband were about in their early seventies. And, you know, each they each had a well, they combined they had about $1,000,000 in IRAs. And and he said that, you know, they unfortunately this couple divorced and so they had to split the assets. So this lady in her seventies is left with about a half a million dollar IRA. And, you know, he she's got a younger son who's well, he's not really that young. He's in his forties and he's not working and he's asking for money from mom and Mom's draining the portfolio to take care of her 40 year old son. Excessive withdrawals. And they're like, you know, they were like, you know, ma'am, you know, as your advisor, as your fiduciary, you know, we really need to tell you that this is very detrimental and you just can't be doing this. And, you know, she emotionally was paralyzed by it and was just like, you know, I know what you're saying, but I can't I can't see my son be homeless and all this kind of stuff.

Erick Arnett:
It was a very emotional thing. I mean, the lady was crying in their office, you know, So this is the stuff that we deal with every day. But this is the stuff that we're equipped to deal with. We want to help you folks, but excessive withdrawals, you've got to be careful about that. You know, and one of the big ones we love, Randi, is sequence of returns. Your retirement funds could take a massive hit if the if the market experiences a downtown and downturn in the early part of your retirement. So why you why you cannot plan for this you can change what you contribute to your accounts and use guaranteed income strategies to combat this issue. So if you're going into the first five years of retirement and you take a massive hit to your portfolio, plus you had to pull money out of it. We call this the sequence of returns. It's very damaging. I mean, you can really risk running, running out of money. And I feel as though, you know, this one lady that my son is working with, you know, they're very concerned that she's probably going to run out of money. And that's a really scary thing, especially when cost of health care and cost of food and rent and housing and everything just still kind of climbing. And so how is she going to be able to deal with that?

Randy Woodruff:
I was had a situation here today, a situation having a conversation reflecting back to the Great Recession. And we've seen a lot of people that were teed up to retire in 2008, nine, ten, and that's when the markets got crushed. And so now they're they lost sometimes half or more of their portfolio, but they're set to retire and sometimes they can't they can't say they can't stop that retirement train. They're already in the queue. Maybe they're in the drop program at some state job or maybe they're some companies have retired retirement dates. Maybe they've already announced their retirement, so they've already got replacements coming in. So now they're in their in their sixties, maybe late sixties or early seventies retiring and now and the economy is in recession or they're losing their jobs. They didn't want to quit, so they've had to start pulling from retirement. So just reflecting back about 12, 15 years ago, we've seen a lot of this happening in a lot of retirees. They work their whole life, get ready to retire, enjoy their golden years. And now because a market risk, a downturn in the market cycles in the market, their their whole retirement is taking on a whole new look. And so yeah so you've got to be prepared for those kind of major events like that.

Randy Woodruff:
You've got to be ready to to be able to pivot and adjust to accommodate that risk. And I heard a stat last night at dinner, I don't want to I don't want to just claim disclaimer here that I verified it yet, but I just looking around at reality, it probably is somewhat true. The stat I heard was that in retirement only 2% of Americans enjoy the same, I'll say quality of life in terms of having financial freedom that they did when they were working in retirement. So most people, because they didn't save enough, because they didn't invest wisely, they didn't they didn't manage their risk, they didn't manage their taxes in retirement. They're not going to enjoy the same standard of living, the same flexibility, the same, I'll say, schedule that they had when they were working. So you've worked your whole life and you plan to get to retirement just to find out that you don't have enough money to live on, to go have fun in retirement. So, you know, it's the sooner you start planning for this, this big retirement, you know, the more enjoyable and stress free. Argument that you can have.

Erick Arnett:
Yeah. Health expenses, right? I mean, let's just talk about that for a minute. And if folks call in today 6160511 area code 352 or go to our website TakePointWealth.com. In the upper right hand corner you can click little box and it'll get right on our calendar and we'll set up a session for you and we will prepare for you what we call our health care plan. And it's basically going to really take a look at medical costs for you specifically as a family and what those going to what that's going to cost in Medicare as well, because it's all related to income. So we've got to really evaluate what your income is. You know, one of the misconceptions about Medicare is like, oh, when I get to 65, I'll be all set. The government's going to take care of me and pay for all my health care. That's not true. So it's based on income. And so you've got to be very careful. I mean, we I was in a meeting two weeks ago and we were talking about this with a large health care provider and trying to figure out ways that we could deliver this message and help educate our listeners. And I was really I was kind of shocked. I mean, even as an advisor, I probably haven't paid enough attention to this, to be quite honest. But health expenses, just for the average couple, if you're just in a median income, you know, and that's a couple of social securities, maybe a pension, a little bit of RMD coming out of your IRA, just, you know, average income, you're looking at an average cost of 18 to 20000 a year in health care.

Erick Arnett:
And that's even with Medicare. And if you're in the higher tax brackets, you're looking at 30, 40,000 a year in medical costs and health expenses. So it's a silent killer, folks, that we've got to prepare for. And Randy makes a great point. If we don't plan for this, save enough, prepare for it, even maybe put some strategies in place to cover just health care in the future, which we can do for you and help you evaluate that so you don't have to worry about those rising health care costs. You know, health expenses are a big, big deal. You know, all those companies out there, folks, all the drug companies, all the hospitals, all the cancer companies, all these health care facilitators, I don't care what they're for profit companies, folks. And guess what? They're going to keep trying to drive those profits. And so they're going to pass all of that on to you. So, you know, you've got to be mindful of that. And you know, what about what about and this is kind of a tough one to talk about, Randy, but what if you what if you lose a spouse?

Randy Woodruff:
Yeah, that is tough because I've seen it here in my office. I'm sure you've seen it too, that depending upon the spouse that passes away, certain certain spouses have different retirement benefits. Some spouses may have pensions from prior employers and and maybe one spouse had a higher Social Security limit as well and different things. And so so when one spouse passes away, the surviving spouse, depending upon the incomes that they had, were they pensions that were tied to the the spouse, how much did they have in their IRAs for for savings, for retirement? How much did they have outside of IRAs and did they have debt? You know, we're we're seeing more and more of that. Retirees are even though they're in their sixties and seventies, they still have home loans, they've got car loans, they have other things they're paying for. I spoke to someone there today is still paying for student loans for their for their children from college. And they had a child late in life. There's also spending still still paying on student loans. And so all these things, they weren't happening like this 30, 40 years ago. So retirees, when they got to retirement house, not everybody, but most people, a higher percentage of them retirees, had their house paid for no car loans, money in the bank, good retirement. So it's not the same anymore. And as you talked earlier, inflation is just is really eating up, you know, making our dollar less and less valuable. And so it's also having an impact on the, say, the amount of available cash or and or available funds that seniors have to spend in retirement. So all the more reason why planning is so much more important.

Erick Arnett:
Yeah, And listen, folks, I mean, Randy and I have no control over where inflation is going to go or where it's going to be. We have no control over where health expenses are going to are going to rise to. You know, we we don't have any control over the market fluctuations and interest rate changes. And but what we do control and what we do have an instant impact on how we do have an instant impact with our clients is that we can control fees and expenses. And that's one of the big and the biggest, biggest kind of silent killers or diseases that kind of eat away slowly at your insides. And we don't really feel it right. But it is. And so, you know, watch out for fees, folks. Watch out for expenses and commissions up front, this and that. We have a strategy that we use with all our clients that we basically, when they come to us, we we cut their fees right in half pretty much, you know, I mean, we just cut them in half. And and what we can share that with you, what our strategy is, if you give us a call three 5 to 6 160511 or reach out to TakePointWealth.com and just get on our calendar.

Erick Arnett:
I'll be happy to kind of chat with you and walk you through that and you know just things like utilizing fixed indexed annuities or structured notes, you know we've got to if you don't know what an indexed annuity is or you don't know what a structured note is, these are some of the tools that we really utilize to dial down the risk, reduce fees, but still bring good, consistent returns to our clients portfolios. And if you don't know what a structure node is, reach out to us and we're happy to educate you on that. But, you know, a structured note is just a type of investment that combines the features of bonds and derivatives, and they're issued by banks and other financial institutions and and typically offer a return that is tied to the performance of the underlying asset, such as a stock or a commodity or a basket of assets. And so it's two components kind of working a bond component and a derivative component. And that derivative component really enhances the returns. And they have some really good protection measures in place for downside. So just, you know, we always like to give out a little tidbit here or there and just not talk in broad terms, but if you don't want to know what a structure node is, you owe it to yourself to give us a call and dive into it so we can really kind of coach you on it.

Erick Arnett:
But that's just an example of maybe one asset class that we would look at adding to your portfolio to make it more diversified to kind of help weather the storm and then to kick up some yield a little bit, you know, just little things, little tweaks here or there. You don't, you know, people listening right now, you might think, oh, man, you know, I don't want to make this big, broad change. It's so daunting. Give us a call. 352616051. Schedule an appointment today. And guess what? You may find that you don't have to make any big, broad, massive changes. Maybe we can just help you make a small tweaker here that will really help optimize your portfolio, your retirement plan, and get you back on track for 2023. We're super passionate about that. I hope if you're listening today you'll get a hold of us so we can get you back on track and unfortunately folks can't. Believe it, but we've run out of time already. And man, I didn't even get through half my outline. Randy So I guess we got stuff.

Randy Woodruff:
Time flies, isn't it?

Erick Arnett:
I guess we got stuff to talk about next week. So that's why, folks, if you're listening, stay tuned to Take Point on Retirement radio. We're happy that you listen. Please stay. Tune in next week. Also, you can get us on all the podcast channels and. Thank you so much, Randy. Wrap us up. Wrap us up, man.

Randy Woodruff:
I want.

Erick Arnett:
To about 90 seconds.

Randy Woodruff:
90 seconds. Okay. I want to comment on something that you said. People think that changing wealth advisors or tax advisors is a big deal and it might be to someone because it's it's daunting because you really don't understand what your portfolio even has in it or if it's your taxes, what your taxes are all about. But for Erick and I, we do this all day, every day, so it's no big deal for us to meet with the client, whether it be on the investment side, the tax side, to have them come in and begin working with us. Because if we can look at statements, look over a couple of years of tax returns, we're going to have a good picture of what you have. And I can't tell you how many times that we met with new clients. And then once they make the transition, like, oh, this wasn't that big of a deal at all. So it's one of those things it's the I call it the fear of the unknown, just not knowing what the transition is going to be like. But, you know, we have done this for years and years and years, and we look at statements and tax returns and financial documents all day long. So this is what we do. The transition will not be that hard. And but if you if you don't have a financial advisor or you're not getting the right advice or getting tactical advice or timely advice from your current financial advisor, you owe it to yourself to come see us here and take point and let us put our years of experience to work for you.

Erick Arnett:
Take point leading you every step of the way.

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 to TakePointOnRetirement.com Or pick up the phone and call 352 616 0511.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC BCM a registered Investment advisor BCM and Take Point Wealth Management are independent of each other. Insurance products and services are not offered through BCM, 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:
Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Structured notes involve risks not associated with an investment in ordinary debt securities. The securities are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of or guaranteed by a bank. The securities will not be listed on any securities exchange, and the secondary trading may be limited. Therefore, there may be little or no secondary market for the securities. Accordingly, you should be willing to hold your securities to maturity. The securities are subject to the credit risk of the issuing bank, and any actual or anticipated changes to its credit rating or credit spreads may adversely affect the market value of the securities.

Producer:
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 Erick 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 TakePointWealth.com.