TPOR How to Plan for Retirement in a Volatile Economy Transcript: Audio automatically transcribed by Sonix

TPOR How to Plan for Retirement in a Volatile Economy Transcript: 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, 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.

Executive Producer Sam Davis:
This is Take Point on retirement. I'm Sam Davis, and I'm joined, as always by Eric Arnett of Take Point Wealth Management. Good morning, Eric. How you doing?

Erick Arnett:
Hey, good morning, sir. How are you today?

Executive Producer Sam Davis:
I'm doing fantastic. I know it's fantastic weather down there in the Sunshine State. I just spent a couple of days up around Clearwater in Tampa. And the weather is so good, you can almost forget about all this stuff that's going on in the market and in the news and and the economy. But, man, absolutely gorgeous weather down there this time of year.

Erick Arnett:
Yeah, this is the time of year, man. You know, April, May, it's just absolutely perfect. I just came off of a little vacation myself, was down in Boca Grande flying some tarpon, and the water was aqua green, crystal clear. The weather was perfect, absolutely beautiful. And it's it's good to see the beaches are packed. The restaurants are packed. Everybody's kind of getting back out at it and coming out of that COVID slumber and and spending all those dollars that they saved up during COVID. So kind of a double edged sword. It's we're having unprecedented growth here in Florida, in our region, the Tampa Bay and Nature Coast region, and also unprecedented amount of visitors. So it's our state is packed, but everybody's having fun enjoying the weather. And and I think we're going to talk today a little bit about how some of this is all impacting our retirees and our pre retirees and and but kind of a double edged sword. Our property values are going way up. But it also I was reading a little tidbit, I don't know how accurate it is, but you get all these kind of financial news stories throughout the day and just kind of breeze through them. And I saw one where Florida has now surpassed all the other states and become the most unaffordable state to live. So crazy stuff. You know, home values are just going up daily. And I've never seen this kind of price appreciation. And so for our seniors and our retirees and retirees, even those folks that are down here right now that are looking for a place to move or downsize, that's creating some some some serious challenges for them.

Erick Arnett:
So but we I just got off the phone with some clients this morning. You know, they retired a couple of years ago. They sold their larger home and they went in and rented a place. And as their new home was being built, their smaller home and this was like a year ago and it still hasn't broken ground or under contract. The builder has now raised the cost on them 10%. And so, unfortunately, what's happening for some of our retirees is they're having to chase these prices as well to maintain their dream and their lifestyle to stay here in Florida. So definitely posing some challenges. So for those of you listening out there, we're a full service financial planning firm here at Waypoint Wealth Management. We have an accounting firm. Our accounting firm is also very good at sorting out these kind of details, selling homes, buying homes and building and all that kind of stuff and the tax ramifications. So please give us a call. (352) 616-0511. If you have your real estate questions as well. And is now a good time to be investing in real estate here in Florida? So this is this is a big, big key question that a lot of our folks and our listeners are kind of poised and sitting here wondering, you know, so give us a call and we're happy to talk to you about it and walk you through it and talk about the pros and cons. But definitely unprecedented growth here, sir.

Executive Producer Sam Davis:
Yeah. And you can also visit Eric and his team on the Web at take point on retirement. Or you can just Google Take Point Wealth Management and you'll find Eric, his team his information and it is comprehensive retirement planning and financial planning for your family and your future. You know, we were just talking before the show. You know, my sister is planning on moving down to the Tampa Bay area soon and she's just graduating from college. You know, Florida has been a destination for retirees and pre-retirees for decades and decades, but it also attracts younger folks as well. I mean, I moved there and lived in Florida for a couple of years after college and. And it was fantastic. Work took me elsewhere. But if if I had had maintained a work situation that I would have preferred in Florida, I probably would have stayed there. So it's, you know, a hopping place. And we're going to actually talk about housing and how it's affected specifically the Sunshine State here in a little bit. But, you know, it is important, the housing situation, Eric. So when people come in to meet with you and you're starting to put together a plan for them and kind of map out their future, you know, tell me about how the home and housing kind of comes into play when planning, because if someone has a home, that is a big asset, right?

Erick Arnett:
Yeah, absolutely. So, you know, now more than ever, the question, the questions surrounding home ownership and home purchases within the retirement plan are more important than ever. And there's more and more questions and more and more details to work out, because values are changing rapidly as well as interest rates. And so you can get into a situation where if you're if you are a retiree or a pre retiree and you're in somewhat of a transition, you know, these can be challenging times. And so we have some strategies that we can talk about, you know, a lot of different things. I was just talking to a couple this morning and they were like, hey, you know, they're about mid sixties and they're like, hey, you know, our builder just came back and said, we've got to pony up another $40,000 above and beyond what they initially signed the contract for. And so their big question is, should we take this money out of our IRAs, our four one K's or our investment accounts to pay this difference towards the mortgage? Or should we go ahead and mortgage that that money? Should we go ahead and pay all cash for the home as opposed to maybe paying half and mortgaging half or third and mortgaging third? So, you know, a lot of these questions because of rising interest rates, you know, there's we don't know exactly where they're going to end up, but they're certainly going to probably be higher here in 2022. They've already gone up quite a bit. And we don't the Fed, the Fed's actually going to come out this week in and raise rates.

Erick Arnett:
And so this is a challenge for for our seniors and our retirees. And also, I've got clients that maybe had a second home or had purchased an investment property here in Florida, and that property has doubled in value in less than a year or two. So their questions are, should we sell this now? Should we hold on to it? And so our team here take point. Wealth Management has a team that can completely evaluate those questions because they're very detailed and intricate. It has to do with a lot of different moving parts. And we have a team member here, Randy Woodruff. He's a CPA and he's been a real estate advisor and investor for a long time here in Florida. And so he's an expert on this. So we can really help people if they have those kind of questions and try to get them on the right track and and see if we can come up with an idea or plan. Plan. There are some ideas of some strategies we've worked out with this couple, but the big thing is, do I sell right now? You know, and we've really got to take some time and go through all the details and evaluate that. So to see if it really makes sense for you, what kind of profit, what kind of tax, what are the interest rates, what kind of rental income would you be getting? You know, these are all things that we need to factor into that equation. It's not just as simple as well. This house went up 100,000. I should sell and take the profit because that could have a huge impact on your income, your Social Security, your Medicare.

Erick Arnett:
You might throw into a different income tax bracket so it could cause unneeded taxation on your other income or your Social Security if you're already collecting Social Security. So that's that's important to walk through. And in fact, this one couple that we're working with in doing their case design, you know, their question was, do we start collecting Social Security now? And so a lot of and as a couple in Florida, Sam, there's multiple multiple ways and strategies that you can collect Social Security. So it's not as just as simple as saying, oh, yeah, I'm 62. I'm going to go ahead and turn this on. Because, you know, I don't know how much I'm going to live, how long I'm going to live. I don't know how long the government is going to be paying Social Security, all these kind of unknowns. And it might be the totally wrong thing to do. You might end up taking that reduced benefit and paying a lot of tax on it and giving most of it back to Uncle Sam. So I've got to be careful before you make those decisions, run it by us here at the team. We've got CPAs, financial planners, investment advisors. We have the whole package here. So we're happy to help you. And if you call in Tampa Bay or Nature Coast and you call in. Just want to do a quick 15 to 20 minute chat. It's going to cost you absolutely nothing to get that advice and to maybe clear your head and get you in the right direction.

Executive Producer Sam Davis:
Yeah. And while we're on the topic of housing and interest rates, I want to go ahead and play this story that our Matt McClure put together regarding the housing market and how that can affect seniors. So let's go ahead and play that now and we'll be back in a minute and we'll get Erick's comments.

Producer:
Is your home an asset or a liability? I'm Matt McClure with the Retirement Radio Network, powered by Emera Life. In 1950, the average home cost about $7,400. Wow. That's about $88,000 in today's money. But those days are long gone now. The National Association of Realtors says the median home price is around 370,000 bucks. Bu buying a home or being able to afford your mortgage payments just keeps getting more expensive these days. For example, mortgage rates are at the highest level since 2009, and home prices are still rising by double digits. In March, prices rose nearly 20% over the same time last year. From an affordability standpoint, things have not been this dire since the middle of 2006. Mortgage data provider Black Knight says 35 markets in the US are the least affordable they've ever been when it comes to buying a home. And with the Federal Reserve raising interest rates to try to tamp down on inflation, it doesn't look like that'll change any time soon. One thing people seem to be turning to adjustable rate mortgages, also known as arms. Cnbc reporter Diana Olick says these types of loans used to be considered much riskier than they are now.

Speaker5:
Arms can be set fixed rate for five, seven, even ten years. But yes, we did see arm demand literally double in the past three months. That's huge. People are looking for a lower rate. So rate on an arm is about 4.28%, whereas you're looking at well over 5% for the 30 year fixed.

Producer:
The pandemic gets much of the blame for the current situation. Of course, low supply and demand that's through the roof are leading some potential home buyers to seek out alternative and riskier sources of financing. According to the New York Times. Those arrangements often do not have the consumer protections that are available with traditional home loans and are lightly regulated by a patchwork of federal and state rules. Adding to the confusion, they go by different names in different places. One example is a channel loan, which Pew Research says often comes with higher rates and shorter terms. With home costs continuing to increase, many retirees and pre-retirees are rethinking their monthly expenses. If you fall into those categories, should you consider doing something like maybe downsizing to cut costs? That's a key question to consider as home prices and mortgage rates keep soaring. I'm Matt McClure with the Retirement Radio Network Powered by a Life.

Executive Producer Sam Davis:
So Eric, you know, we've been talking about the housing situation specifically in the Sunshine, Sunshine State, but could you help give people sort of a bird's eye view of the Fed interest rates, how that's affecting the housing market and and the most important housing considerations to be thinking about for retirees and pre-retirees.

Erick Arnett:
Yeah. So, you know, when you when you keep interest rates near zero where they were the Fed funds rate for such a long period of time, you know, you get this thing called velocity of money and we're just a lot of free money out there, cheap money. And that's really fueled an amazing boom in the housing industry. And particularly here in Florida. We have an even more exasperated effect because of the COVID 19 pandemic. Is has changed a lot of people's way of living, outlook on life, maybe retiring early. Those baby boomers like heck, we're getting out of that cold weather and coming south to Florida now while we can and take advantage of these low interest rates. So the housing market has absolutely been on fire. It's almost been a little scary when you see home values going up 22% on an annual basis. They're saying that it might go up another 20 to 25% this year. So the Federal Reserve has to step in here. In fact, they're probably a little late. They should have maybe raised rates a year ago because these low, low interest rates give people the ammo and the power to say, heck, yeah, let's go, let's let's let's look at that Florida dream and let's take advantage of it. And our interest rates are low. And so that's what they've done, you know, and the baby boomers. So you have the baby boomer effect wanting to move to warmer weather, lower taxes here in Florida. I know that people are a big fan of freedom and our state and our.

Erick Arnett:
Governor has been fighting for that quite a bit. And so there's a lot of different things working for Florida right now, whether it's to our advantage or disadvantage. But if you're if you're already here in Florida and you've been here and you're sitting in your home and your homes are already paid for, you're already locked in at that low 2.25%. It's not affecting you that much. You know, you may not even have it may not even drive that much. So gas prices aren't affecting you that much. But for those retirees and pre retirees that are kind of in motion and in transition and trying to make the Florida dream happen, you know, they're chasing these high these interest rates are starting to rise. Values are rising. You know, we have a supply chain issue where the materials aren't getting to the builders and so costs are going up every day. And so it's creating this kind of fury almost. So it just. But the Fed has to come out now and get pretty aggressive at raising rates because their main focus is to slow down this housing market, to get prices more under control and try to combat this inflation the best that they can. And reason being is how housing can just get to unaffordable. Florida, like we were talking about earlier, has come out and is now one of the most unaffordable places to settle down because of the home values. And so, you know, the Fed's got to get get control of this to where they can kind of calm things down and slow things down.

Erick Arnett:
So we don't just prices don't just keep going and going and going. And then all of sudden we have a situation where people can't afford housing. You know, rents are going through the roof. I'm hearing from my clients that are in that transition, the rents are astronomical as well, you know, so if you're if you're a retiree or even a pre retiring, you're all set, you're in your home and you're already there and you don't drive a whole lot. Yeah, maybe this inflation isn't hitting you as much or as drastically as for others. But your food costs. I saw I heard one of your audio clips on on inflation about food costs, chicken going up ten, 12, 13%. You know, so, I mean, every time we go to the grocery store, go out to eat, I'm kind of stunned. And so this is affecting our seniors and our retirees. And so we have to plan for this. And it's a big part of the plan, you know, just a little bit. You can't be too conservative and you can't be too risky at the same time, because if you are too conservative, you're not going to be able to keep up with inflation. And if you get too risky and you're chasing, you know, chasing risky investments, that also could could hurt you in a volatile market. So it's more than ever is the time to really sit down with a financial planning team and to really map all this out and build some confidence, try to build some clarity and what is not such a clear environment right now, you know, it's just like anything.

Erick Arnett:
Sam, you know, when I was in the military, you know, hitting a stationary target is pretty easy. But when that target is moving all the time, not so easy to hit it. So and that's where our seniors and our retirees are right now. We've got this this moving target with this incredible inflation and housing market boom. So a lot of a lot of questions need to be answered. You know, and I've even had people ask me, Sam, should we just we can't believe how much our home's going up in value. We're getting offers every day. Like, should we just sell it and take the cash and invest it and create income for ourselves? And and that that might be that might be a good idea or it may not be. So that's things that we've got to really talk about and plan out ahead and and factor in. So our full blown financial plan is a $1,500 value. And we're going to answer all those questions for you and build that confidence and build that clarity at a $4,500 value, completely free if you call in today. And and I know that if folks are listening, you can also listen on our podcast as well. So digitally. Sam I think you have that information, but I think people can go right on their phone and and pull up the radio show digitally no matter where they are on sound on social media. Is that true? How does that.

Executive Producer Sam Davis:
Work? Yeah, that's right. So whatever radio station you're listening to take point on retirement on, you can go to that station's website and listen digitally. Or if you ever miss any part of the show, take point on retirement is available wherever you listen to podcast so you can listen on Apple Podcasts if you have an iPhone or Google Play, if you have an Android phone or Spotify and all the other podcast apps take. Point on retirements. There you can catch part of this episode. If you just hopped into the car and you missed the first part of the show, or you can listen back through past shows that we've done to to really learn more. And you can learn a whole lot more by going online to take point on retirement. Again, that's take point on retirement or giving Eric a call at (352) 616-0511. Again, (352) 616-0511. And it's just as easy as Googling. Take point wealth management. You'll find them online there and it really is like finding. Locking in on a moving target. I like that comparison Eric because you know the retirement that you're helping people plan for now is completely different than people planning for retirement a generation before and a generation before.

Executive Producer Sam Davis:
And it will continue to change. And one of the things that people are most concerned about is inflation. We've been talking about that a little bit, and it seems that inflation hits hardest at the areas that we need the most housing, food, energy like gas and electric and natural gas prices and stuff like that. So people are wondering, you know, how can I protect myself from an ever increasing cost of living? You know, they may be thinking, I'm in, I'm in Florida, this is my home. I'm the Sunshine State. And and I want to stay here. And so how can I be prepared if if I know that things are going to continue to be more expensive and more expensive? We know that Social Security has that built in cost of living adjustment. But for most people, that's only a portion of their retirement income and a portion of their retirement plan. So what sort of strategies do you and the others over there at take point wealth management help people implement so that inflation isn't something that they have to worry as much about and they can sleep well at night.

Erick Arnett:
Yeah, so great point, Sam. And you know, we recommend that retirees more than ever have to really sit down and work with a planner to compensate for inflation when when preparing retirement income projections. So, you know, and you brought up a good point a few minutes ago, the retirement planning and the plans that were done for folks a year ago, two years ago, are much different than the ones we're doing right now because we've had this massive amount of inflation and we don't know when it's going to stop. But I think when you have inflation rates running at 8% and that's just what the government reports on the CPI, I think it's much higher. You know, I think inflation is probably more like 20% right now. So if you're sitting in a portfolio or your retirement plan hasn't been yielding, you know, a good return for you or you're not creating income or increases in income, then that you're going to run into a problem long term. So we do have strategies. We do have products that even factor in inflation and will increase your income with inflation. So that's definitely an option. But what's what's what's most important is that we don't get too conservative here where we're not generating enough growth on our money, but also not trying to take too many chances and risks in this type of environment. And there is a good portfolio for this environment.

Erick Arnett:
And so there has to be adjustments made. So the portfolio that worked for you a year ago or two years ago is not going to work for you today. And so it's all about asset allocation, making those shifts and then keeping a good, mindful eye on that income generation and how you're going to create that guaranteed income and how is that income going to be able to increase with inflation. So we call that financial speed. And so everybody out there, every family, every couple, every individual has a different financial speed than than their neighbor. And so that's our job here. At Take Point, wealth management is to truly find what your financial speed is and put together the right plan in order to achieve that and be able to still reach your goals. It's not a set it and forget it kind of thing, especially right now more than ever. We've got to be talking, we've got to be interacting, we've got to be making those changes. So pick up those statements, call your advisors, ask them, you know, what is my rate of return been? You know, what am I paying in fees? What is my risk here? What kind of income am I generating and what are the projections and what does that look like in the future? You've got to start asking those questions. It's just so, so important that people take action today and and really put together that solid plan and try to build that confidence and clarity.

Erick Arnett:
So the thing that's different about our planning. Process is that we take the plans and the ideas and we can build out multiple plans and then we test them and we throw a simulation at them. A thousand different scenarios. Good markets, bad markets, high inflation, low inflation, high taxes, low taxes, combinations thereof, and see which one holds up the best and gives us the highest probability of success. And so it doesn't always require you to make a full change. You don't have to change everything. But we could potentially tweak things a little bit and really increase your yield and your opportunities to achieve your goals. So. But it's definitely a challenging time. You know, portfolio values are going down even if you have a conservative portfolio of bonds. I mean, bonds are down like 12% year over year. And whoever thought bonds would be down a -12. So if you're sitting on a portfolio that's holding bonds, you've lost money, you know, and so and it's going to continue to kind of be a loss leader for you and drag on. So you take action now. It doesn't cost you anything. No one's going to hold a gun to your head and tell you, you know, you've got to move your money. But to get a second opinion, get a third opinion, you know, when you go to have surgery or you go to have some type of medical procedure done, you know, you have something maybe something done on your home, like some kind of home improvement.

Erick Arnett:
You got to get two and three estimates, two and three, two and three different opinions. And so it helps to really take this time and to really get your get your ducks in a row and then get multiple opinions and then find out what's the best one for you. Take action today. Please give us a call. We're just going to chat with you over the phone and try to help you through maybe some of the questions that are stirring around in your head and maybe help you kind of map things out. We might just be a sounding board for you where you can throw some ideas off of and we can talk through it. So we take a lot of passion here at take point of retirement. We love to help our retirees and our retirees. And that's that's why we called it Take Point, because at some point in time, we know our retirees are going to need somebody to step up and take the lead and take point in their retirement and lead them to and through a successful retirement. So that's what we're all about here at take point on retirement.

Executive Producer Sam Davis:
Yeah. And the great thing is, is once you have a plan in place, you can really enjoy that life that you've worked so hard for. So take action today. And taking action looks like this going to take point on retirement again. Take point on retirement or give them a call. (352) 616-0511(352) 616-0511. And even if you don't have time to give Eric and his team a call right now, just jot down, take point on retirement, go online, give them a call on Monday or Tuesday and take action. Take action now so that you and your family can have that plan in place. When we come back, we're going to talk a bit more about bonds. We were discussing that towards the end here of segment one. You know, what are those bonds doing in your portfolio? Do you know about the fees? Do you know about the performance rate of those bonds? Currently, you know, bonds traditionally were the safe leg of a portfolio, but in 2022, maybe they're not that safe leg anymore. Take point on retirement. We'll be right back.

Producer:
You're listening to Take Point on retirement. To schedule your free no obligation consultation visit takepointonretirement.com.

Producer:
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Producer:
Welcome back to take point on retirement schedule your free financial consultation now at take point on retirement.

Executive Producer Sam Davis:
And welcome back to Take Point on Retirement. I'm here with Eric Arnett, founder of the veteran owned Take Point Wealth Management. You can find him online and takepointonretirement.com or just Google take point wealth they serve the sunshine state and they'd be happy to serve you and your family as well. Right before the break, we were talking about bonds. We were talking a bit about interest rates. And we know those certainly affect bonds as well. You know, traditionally, Eric, the 6040 portfolio, 60% stocks, 40% bonds. That was the way to have a safe, not too aggressive not to conservative portfolio. But lately what you have noticed in clients portfolios is those bonds just haven't been performing as well. So tell me a bit about what you're seeing with Bonds, what you can do for folks by taking a look at their portfolio and some alternative options that you guys have to offer.

Erick Arnett:
Yeah, unfortunately, that traditional portfolio, let's just say if you're a retiree or a retiree around 60 years old, just as an example to utilize Rule 100, you take your age and you subtract it by 100, and that's really the amount that you should have in the stocks in equities. And so that's 40, 50% if you're kind of in that retiree mode. And then the other 40 or 50% of your portfolio is put into fixed income or what we call bonds, you know, bond mutual funds. And so you're probably if you're listening, you're probably sitting on a portfolio that's somewhere in that mix. And in traditionally, heck, when I first started in this business, way back when, you know, that's how we did it. You utilize fixed income and bonds to kind of hedge against the stock market. It also created a nice yield and provided some income. And if the stock markets got a little squirrely, then typically money would go into bonds. Well, we've been warning people for probably two years now, and we've we positioned our clients a long time ago to not be susceptible susceptible to this. But and that's why we strongly believe in active asset management and tactical management versus just passive and kind of set it, forget it. But you know, that portion of your bond or that portion of your portfolio is sitting in bonds. So do you if you're out there listening right now, do you really know how many bonds are in your portfolio? And I'm going to venture to guess that it's going to be hard for you to figure that out.

Erick Arnett:
So we will do for you absolutely free what we call a bond x ray. We'll take your portfolio and we utilize some software and it pulls out exactly how much exposure you have to bonds. And not only the bonds, but what kind of bonds are you in portfolio? Are they good bonds? Good quality bonds, poor quality? Are they what we call long duration bonds? Are they long out their maturity or are they short term bonds, short term maturities? And so, you know, they will all react differently in a rising interest rate environment. So when interest rates are rising, your bonds are losing value. And that's why, like we just spoke about in the earlier segment, the aggregate bond market is down about 12%. So that's huge for bonds. So imagine if half your portfolio is sitting there, got -12%. And also your advisory firm or your brokerage firm or even the mutual fund that you're in is charging you a fee on top of that. So you're paying a fee, you're losing money and you're not really, truly hedging yourself against the risk in the stock market, and it's not even providing a good income. So, you know, high fees, poor performance.

Erick Arnett:
So that safe leg, that traditional safe leg of your stool is looking more like a melting ice cube if you're using bonds right now. And so it's not too late because the Fed is going to continue to raise interest rates and therefore bonds are going to continue to drag on your portfolio. So we've got to allocate to other investments in order to combat that. And so we've got to make shifts in your portfolio. We've got to introduce new ideas to try to alleviate that. And we do have those strategies here at Take Point Wealth Management, we're happy to walk you through them, but now more than ever, you've got to take action. If you're out there listening and you've been thinking about it, please take action. Even just pull off the side of the road right now and give us a call or hit that button on our website and set up a chat session with us for 15, 20 minutes. Take action now because I was talking to some radio show callers the other day and they couldn't understand. They thought they were in a somewhat conservative portfolio and they couldn't understand why their portfolio is down 13% this year. And so if you have stocks that are down. So the stock market, the Nasdaq is down like 20% right now. The S&P 500 is down around ten, 12% right now, fluctuates daily.

Erick Arnett:
But so not only your stocks down, but your bonds are down and that traditional safe leg is letting you down as well. So and you're paying fees on it. So let's look at a way that we can shore up that safe leg, truly put a safe money option in place that's going to provide you a nice income, protect your principal. And by the way, potentially there's a lot of products and strategies out there that aren't that aren't even going to charge you fees on that money. So you may be thinking, well, that sounds too good to be true. I don't understand all this. And that's why you need to call and start the process. You know, we love to educate. We're going to take you down a path. Heck, I've met with people five and six times until they feel comfortable with what they're doing. It's important for folks out there. If you're listening, you've got to know it's your money. You've got to know what's going on inside of your portfolio. And so if you're not getting the answers that you want or if things aren't making sense, then just it doesn't hurt to get a second opinion. And then we're happy to do that for you. But you've got to take a look at those portfolio and assets and and chat about your financial goals, plans and desires again for retirement.

Erick Arnett:
You know, and this is the thing like when you put a plan in place, Sam, doesn't mean that you're just set that plan and forget it. You've got to make sure that that plan is KIRN. You've got to keep taking a look at it on an annual basis at a minimum. And so that's what we do at take point wealth management, even though we put a plan in place, a holistic plan, we are testing that plan and taking a look at that plan on a minimum on an annual basis to look at all the dynamics that have changed. I mean, just in the last year, Sam, look at all the dynamics that have changed out there in the markets. You know, the interest rates, the inflation, the stock pressure, the geopolitical issues, all these things that weigh heavily on our on the future of our retirees. So it's not a time to just kind of sit there and hope for the best. You've got to take action. And so let's take a look at your current plan. Let's test it and then let's put together a plan that works for you. And we're here to answer any questions that you may have on your plan. So super, super important. Once again, how much how many bonds do you have in your portfolio and how are they reacting and how are they potentially hurting your retirement plan going forward?

Executive Producer Sam Davis:
Yeah, and one of the things that is is a good strategy for getting those bonds out of your portfolio. You guys like to do bond replacements with fixed indexed annuities when that's right for the particular client. And if you want to have a more conservative portfolio, that's great. You want to be more focused on achieving your goals and enjoying your retirement than looking at Fox Business and looking at the stock ticker and being emotional when you see the red arrows go down or or the green arrows going up. So, you know, Eric, tell me a bit more about fixed indexed annuities. I know they offer good downside protection, but you can also capture a little bit of that market gain as the market goes up.

Erick Arnett:
Yeah. So, you know, index annuities can be a great complement to your plan. We are never going to recommend that you put all your money into an annuity. In fact, now that you bring it up saying we're going to talk a little bit about annuities, I'm not a huge fan of a lot of annuities that are out there. So we've got to really hone in and target the ones that I feel as though make sense for the client. So so we do that here. Take point. There's thousands of annuities out there. There's hundreds of companies at issue. And you've got to be very, very careful. There are some out there that make a lot of sense, particularly at this point in time where we are in these markets, in this period of time in our economy with the rising interest rates. And so how do we how do we combat that? So we have to introduce new ideas and new tools. And you've got advisors out there that are on the radio and the TV that they totally pooh pooh annuities and they shoot them down and say, oh, you know, you shouldn't buy annuities, but they never give you a really good answer. Variable annuities, particularly we hate and. We can go into that later. Those are dangerous. But these index annuities are a great way to introduce something else to your portfolio that are going to help you bring down the risk of the overall portfolio. We call it the smart, safe plan. We call this part of the plan the smart safe.

Erick Arnett:
We have the smart growth, the smart safe come together and create the whole entire plan. And so the index annuities, you can potentially get market like gains without taking the market risk. We look to alleviate the market risks, the interest rate risk. So interest rate risk is pretty simple. As rates go up, values of bonds go down. So you can protect those hard earned assets and they allow you to generate a consistent income for retirement. You don't really have that in any other investment class. You can also grow the money tax deferred inside of an index annuity. So that might be a good advantage right now for you. And the big thing is eliminating those advisory fees that you pay on the bond income currently. So a lot of good benefits to them. They have to be introduced in a way in which they complement the overall portfolio. We don't certainly recommend people putting all their money in one product or one one strategy, but it's about having multiple strategies working together. So potentially introducing an index annuity to your overall portfolio can reduce the risk, reduce the fees, and then also. Provide an income and still provide a good, solid return to help you meet your goals. That's 6040. Traditional portfolio is not going to do it. In fact, some of the big experts out there I was listening to one of the heads of PIMCO, and they were just saying that traditional 6040 blend over the next 5 to 10 years, you might be lucky if you get 3 to 5% on an annual average return there.

Erick Arnett:
We've got to be active with that money. We've got to bring new ideas and introduce a new plan to the table. Indexed, annuities, fixed indexed and age. Please educate yourself on them. We have an awesome book that we can send to you free of charge. Just reach out to us and we'll get the book to you. It's called Annuity 360. Now you can take this book. It wasn't a book that was written by me, so I'm not pushing or plugging annuities. This is a completely independent source that's written this book, but it's a great we like it because we think it's a great, easy to read informational educational tool. So you take the time, sit on the beach, enjoy life, but take this book, read it, study it, and then come back at us with some questions and let's talk about it. Because don't just because your neighbor or somebody comes on TV or whatever and says, oh, don't buy annuities, put it out of your mind. Do the do the homework and investigate it for yourself. We talked about this, I think, on previous shows, but I had a gentleman, a radio listener, and he was very skeptical about annuities. He finally called in and we got we just said, hey, look, why don't you read this book and let us know what you think? And this guy was told by multiple people, even his current advisor at the time don't do annuities. And typically the guys who are telling me not to do annuities are the ones that don't know anything about them or don't sell them, don't have them in their arsenal.

Erick Arnett:
So but this particular gentleman, you know, he sat down and read the book six times over a three month period and he built a confidence and then he had some a bunch of questions and we walked him through it. And you know what? Four months later, after he really took his time, he implemented some of those into his portfolio. So we have all kinds of really good, solid strategies right now at point wealth management, because we're a boutique advisor, you know, and we have access to things that you probably don't have access to in your 401. K or even maybe at your current investment firm, even other than indexing news that can provide a nice dividend income for you and take some of that stock stock market volatility out of the equation. And I'd be happy to talk about those as well. I mean, we've talked about structured notes, buffer ETFs. I mean, there's all kinds of things that we can be doing. And that's why you've got to have an advisory team that's really passionate, that's watching your portfolio on a daily basis that really cares about it and is constantly bringing new strategies to the table and implementing them to shift with the times. Please, please give us a call so we can get you on the right path and get some of those questions answered. But Sam, offer up that book for for for our listeners. Let them know how they can get that.

Executive Producer Sam Davis:
Yeah, absolutely. Just reach out to Eric and his team. Whatever's convenient for you is convenient for him and the team over there at Tech Point Wealth Management. So you can go online to takepointonretirement.com, you can schedule an appointment there and you can ask for the book. And that initial 15 minute chat, you know, the guy you hear on the radio is the guy you're going to get on the phone now or you can just give him a call. (352) 616-0511. Again, that direct number is (352) 616-0511. And just ask for your copy of Annuity 360. And you're right, Eric, it is an easy to read book, you know, big words, short chapters, easy to understand, and it breaks down the different parts of annuities. And you can also get that that financial plan put in place when you contact Eric or that bond x ray or they can offer an annuity x ray as well. So if you have an annuity right now that's implemented in your portfolio and you're not sure if it's performing the way it should, Eric and his team can can take a look at that as well.

Executive Producer Sam Davis:
I mean, it's it's fantastic. Eric, you have so many tools to offer. One of my favorite things is you were talking about it a few minutes ago is that Monte Carlo simulation. So cool to be able to run someone's portfolio through all these different scenarios so that you can really be prepared for whatever happens and have that adequately balanced portfolio. There are a lot of people out there that have done it, a great job saving. You know, they've got half a million, six, 700,000, maybe $1,000,000 in there in their portfolio. And as they approach retirement, they're feeling prepared. But, you know, really, retirement is more about income than it is about building up that that big bucket of money. And so those people. Could have a big tax problem. So, you know, you know, annuities can offer a part of a solution to that by providing income. But, you know, another thing that you guys can do for folks is is Roth conversions. So tell people a little bit about that and how a Roth conversion can can help kind of protect them from tax risk.

Erick Arnett:
Yeah. So, you know, definitely a great topic to talk about and I think it's a really hot topic right now. And we're getting a lot of a lot of conversation about this today, these days. And most importantly, it's how can you you have to ask yourself, how can I significantly reduce the taxes I would be paying throughout my retirement? Right. So when we retire, hopefully we're going to be retired for 20, 30 years. And so it's a long time. It's a long time horizon if tax rates go up, which we think they are. Right. So here's another thing. Facing our retirees and our pre retirees is not only our is inflation and interest rates. Right. How is the actual tax rates going to affect us in the future? So we're spending unprecedented amounts of money. So how much longer can we do that without raising taxes? And so we feel pretty strongly that taxes are going to have to be raised significantly and they're going to raise them on retirees, unfortunately. Hey, if you're listening, you're a baby boomer. You know, you're the ones that have saved you've made money and you've done well. And so Uncle Sam knows that, hey, they've got to come at you to get some of that money to pay for all this, all these deficits that are running. How are they going to pay this money back? There's only two ways to get control of the deficit.

Erick Arnett:
It's either reduce spending, which I don't see much of that happening right now, or to increase taxes. And so more than likely for you, for you, the folks out there listening, if you're a retiree or a pre retiree, your taxes are going to go up in the future. And so how do we combat that? And one great tool is the Roth IRA. And unfortunately, nobody was educated on this. When folks out there listening, we're working 20, 30 years ago started working and started putting money away in there for one K's and IRAs. Nobody told them about the Roth. And so it's starting to be talked about a lot more now. But you may think, oh, it's too late for me. It's not. You can do what's called the conversion. Everybody out there listening qualifies to take their 41k or their traditional IRA and convert that role to a Roth IRA. And you're going to pay taxes when you do that. But imagine now your portfolio for the rest of your retirement sitting in a tax free investment. And so you're getting tax free growth. And when you want to take that money out to live on or do something with, it's also going to come up tax free. Now, there's some rules there. I'm just giving you the general ideas. So you need to call in and get a hold of us so we can walk you through all the fine details.

Erick Arnett:
That's my disclosure there. But give us a call so we can talk you through it. But, you know, converting to a Roth IRA, I think, more than ever makes a tremendous amount of sense. Folks have got to get a handle on this and start doing this. And it may be a little bit each year. We may put together a plan and we can show you and show you the projections of how much money this is going to save you. So as an example, like if you retire at, say, age 60 with just $1,000,000, and if you had an A Roth versus a regular traditional IRA, you're talking about potentially saving hundreds and hundreds of thousands of dollars in taxes throughout your retirement. So it's hugely impactful. We'll show you we'll paint a nice picture for you in a projection. We'll show you on a spreadsheet how that works with current tax rates and more than likely, those tax rates are going to go up. So imagine I do these educational seminars or dinners every once in a while, and I usually try to talk about these types of strategies and try to educate folks about them. And I remember this one I did not too long ago and everybody was like really in tune and they were really like, Oh yeah, okay, I really need to consider this and this.

Erick Arnett:
There was this one kind of distinguished gentleman sitting back in the audience. He was kind of looking, he wasn't making a whole lot. And I got to talking to him and he was 75 years old and he said, Oh yeah, he said, he said, I already converted my IRA money to Roth years ago and he was just sitting there with a big smile on his face. And I said, Oh, so when you're taking money out for retirement now you're not paying any taxes, so you're really not worried about anything. I'm talking about this on these slides right now. He said no. He said, I'm happy as can be. Feel really good about that. I mean, this guy was like almost smug because he had already done this a long time ago. So if tax rates go to 60, 70%, it doesn't matter because taxes on your portfolio are going to be zero. So there's another awesome book out there now that we bring that up that we can get you to get to. You two is called The Power of Zero, and I'm happy to get that to you for free if you reach out to us. But the power of zero explains all this, and so you can create a tax free retirement for yourself. It's absolutely attainable.

Erick Arnett:
But we've got to get started now and we're going to walk you through the whole strategy. And it takes some time, some patience, but take some action. So think about it. You know, unfortunately, I think, Sam, most of us think about just today or just tomorrow, and even some of us are stuck in the past. But when we sit down and we do this financial plan for you in this Monte Carlo simulation, we're doing it to show you what things would look like over a 20, 30 year period. And that's what you're really going to be thinking. You've got to be thinking long term, long range strategically into the future. And I think that's the most important thing we do for folks, is we get to we open up their minds and we get them to start thinking about long range, long term future and how it's going to impact their portfolio. So just imagine being able to get get more of your money in that tax free bucket and how impactful that can be. Let us show you that it's a Roth conversion ladder scenario and we're happy to work it out for you and show it for you. I mean, I you can tell I get a little pumped up about it because this is the number one tool I think, that's facing folks that they need to take advantage of right now.

Executive Producer Sam Davis:
Yeah. And if you want to learn more about Roth conversions, give Eric and the team over there at take point wealth management a call (352) 616-0511. Or you can just easily go online to www.takepointonretirement.com and contact them there. You know I know that if people are listening to this here in the Sunshine State that they love, you know, taking advantage when something is tax free. You know, when I lived there in the state of Florida, it was really nice come tax season. Once you finished your federal taxes, you're done. There are no state taxes to worry about, at least on income, so why not take advantage of one of the other few opportunities? We are at historic lows for tax rates. And so like you said with with what's going on up there in Washington, DC, you've either got to cut expenses or or increase your income. And every year it seems like there's new bills and new expenses to be paid by by you, the American taxpayer. So Roth Ladder Conversion a fantastic way to reduce that tax risk. So, Eric, we've got just a minute left. Tell the folks once again how to get in touch with you and what they can. Expect when they give you a call.

Erick Arnett:
Yeah. Please give me a call. I'm super excited. I'm waiting for you to call so I can talk to you and work you through some of these things that we're talking about. But (352) 616-0511. If I don't pick up, I'm probably on the phone talking to somebody else. Just leave me a voicemail. I'll get right back to you. Also, real simple and something that I love and we love is if you're if you're listening to us on the car or you're at home, you can pull us right up on your smartphone. Just Google take point on retirement or take point wealth. And you go to our website, you'll see that upper right hand corner, there's a little button you can click and it goes right into my calendar and you can set up a console, a 15 to 20 minute consultation right there online. And so that's the easiest way to get a hold of us. And they'll reach out to you and then we'll chat, we'll set up an appointment and start kind of walking you through this stuff because it's really important to analyze what you're doing, analyze those risks, analyze all the expenses, fees you really deserve to work with a financial advisor or financial firm or financial team who can provide a comprehensive that's the key word comprehensive plan and one that only makes money when you make money.

Erick Arnett:
So if you're making money, we make money. If your portfolio is going down, you're losing money. We are also losing money as a fiduciary and a fee based only planner. So super, super important to, I think, to get into that type of service. And we're going to assess your income needs, your monthly expenses, retirement income, including Social Security, determine your future income gap. We're going to invest in a smart financial plan. Following Rule 100 was smart risk. Smart, safe and fixed indexed annuities invest in tax free accounts like the Roth IRA and the and the life insurance retirement plans that we use with the index. Universal life insurance. You'll follow the 4% rule. Never outlive your money. So all these things, all these questions need to be answered. And that's why we say comprehensive. We're going to bring that all together for you. And we're going to also show you where, you know what, it's not going to cost you a whole lot more, if anything, than what you're currently paying now to work with a team that truly cares about you and truly wants to lead you to and through retirement and get your head in the right direction and truly combat and be a partner with you in this crazy environment that we're in right now. So please, please give us a call. (352) 616-0511. Take point on retirement.

Executive Producer Sam Davis:
Well, with that, I think we put a nice bow on the show today. Have a good rest of your weekend and Eric will be back on the air next week.

Erick Arnett:
Yes, sir. I look forward to it. Have a great one, Sam.

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 through Brookstone Capital Management LLC. Become a registered investment advisor 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. Please refer to our firm brochure the ADV to a page four for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by BWA.

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