Take Point on Retirement – May 8th 2021

Take Point on Retirement 5-8-21 .mp3: Audio automatically transcribed by Sonix

Take Point on Retirement 5-8-21 .mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
The following paid program is prerecorded and sponsored by Take Point Wealth Management on the Nature Coast of Florida take point on retirement, a well rounded show from a well-rounded team leading you into retirement. Listen, Saturday mornings for an hour of simple retirement advice from your friends at take point to wealth management. Saturday mornings, seven 30. Well, welcome to the beginning of the show, take point on retirement brought to you every Saturday at this time, it's one whole hour. That's right. One hour chock full of the information and education that you need and deserve from your friends and mine. Take point wealth management up and down the nature coast within our listening area. Contact, take point, wealth management. The best way is to go online and the information on their website. Just Google or throw it in your old search engine. Take point wealth and it'll take you to take point wealth dotcom, where you will see Eric Arnet, lead advisor, retirement planner and all that team with Datapoint Wealth Management right there on their website. Plus, you can give him a call at three five to six one six zero five one one. Either way, three five to six one six zero five one one. Either way, set your next appointment with Take Point Wealth Management, who is here to lead you into a stress free financial future. So without further ado, the show called Take Point on Retirement, brought to you my take point wealth management, as always. Eric Karnad, lead advisor, retirement planner in our studio. Eric, take it away.

Speaker2:
Hey, good morning, J.W.. Welcome back. Thanks. It's good to be back. Yeah, Erica and I took a nice little vacation for a week and hooked into some nice tapin down there in Boca Grande, laid on the beach for a couple of days. The weather was absolutely perfect. Not like this heat wave we're getting this week, but it was great. We recharge the batteries and we're back at it helping out our retirement warriors. So, yeah, welcome, everybody. To take point on retirement, I'm Eric Garner, your chief financial advisor. A big hello to our retirement warriors out there. Right. So retirement warriors listen to the show. They want to build a successful retirement with a tax efficient, fee efficient and market efficient portfolio. Right. That's what we talk about all the time. If we can't save you on fees, if we can't save you on taxes, and if we can't make your portfolio more effective and efficient, then you know what? We just can't help you. Well, that's if that's what we do.

Speaker1:
And that battle's been won would take point wealth management. But the war is far from over on taxes.

Speaker2:
Yeah. So we've got an action packed show today. First, we are going to share some insight on how to deal with what's going on with bonds right now. You know, we've been talking about that for some some time on the show, but it's getting even more paramount in our economy in the headlines and actually having some effects on investments, real estate in conjunction with what's kind of what's going on with the rates. We heard from Miss Yellen this week. We heard from Kudlow. We've heard from all kinds of people. We're going to give a little market update. And you know how that that's going to affect the return of your overall portfolio, because our goal is to help you get your retirement nest egg working as hard as you have to earn and save it. So then we're also going to talk about the big and little numbers for your retirement. We have our bank beating CD segment to share how you can generate four to six times more growth with alternative strategies to investing in CDs. Many of you have bank CDs that are maturing in the next six to 12 months. We recommend taking a look, taking that money and investing into maybe a maiga or a fixed indexed annuity of Maiga is a multi-year guaranteed annuity, like a CD with the insurance companies, and they offer much better rates.

Speaker2:
And then, of course, we've talked quite a bit on the show about index annuities. You can also still call us, get a hold of us any which way you can, whether you go to the website, whether you give us a phone call and email, we're going to get you out that book, Annuity 360, which is a free ebook, a free gift to you. And I know some of my retirement warriors are out there that I've already sent the book out to and have read the book. Wow. So let's get let's get together and chat about it. I'm sure you have questions. You can fire those to me via email. We'll also play Chapter 16 and 17 of the Annuity 360 book to better educate you on how to reduce risk within your portfolio in segment three. And also a little tidbit. Did you know that you can implement a Roth IRA conversion within a fixed indexed annuity? Well, we can help you do just that. We're going to talk about that in segment four. So. All right, let's get into the show. What do you think? Let's do it. So we've been getting a lot of questions in reference to how do we plan with a typical 60-40 portfolio. We've also been out doing seminars.

Speaker2:
That's kind of cool because dinner seminars are back. We've been hosting some dinner seminars, meeting with people personally. So it's exciting that we're kind of shedding this coronavirus fear since people are getting back our overwhelming response. We've been selling out every night, so be on the lookout for those invitations. We're getting a lot of questions. Everybody out there has a 60-40 portfolio. When I say that, I mean 60 percent stocks, 40 percent bonds. And that's a typical portfolio for a retiree or even someone close to retirement in late 50s or early. As you remember, we always talk about that rule one hundred, maybe a good gauge as to where you need to be as far as risk and having equity exposure as you take your age and you subtract from 100 hundred. But right now, with bond rates the way they are, people tend to be a little bit more tilted towards equities, which I'm OK with as long as we're looking at it actively and it's well diversified. So how do we plan with a typical 60 40 portfolio? Mark Drori, our chief investment officer, he's going to share his important insight on how we are dealing with bonds within our client portfolios right now. So let's play that clip if we can. Let's do it.

Speaker3:
Hi, this is Mark Diorio, chief investment officer. This is a market watch. When we think about portfolio construction, we're building portfolios for tomorrow's challenges, not 2008 challenges. By that, I mean many advisors and investors overestimate the likelihood of another 2008 experience when considering a portfolio. And the 2008 experience is far from today's challenges. In 2008, it was an over leveraged household sector. Today it is a government debt challenge which has vastly different investment implications. The most straightforward difference for investors is the interest rate regime, where in 2007 heading into the crisis, short term rates were near five percent. Today, they're near zero percent. So as the rates dropped from five percent to near zero percent, this helped push bond returns higher during the last 12 years. The effect of these conditions is that the traditional moderate 60 40 portfolio is showing a blended earnings and coupon yield down well below average. In 2008, this ratio was at its long term average, meaning that the 10 year forward return looked promising, even with a massive stock market bear market mixed in. And that's what transpired. From a portfolio construction perspective, given this reduced outlook for core blended portfolios, we use a core plus satellite allocation framework. The satellite allocations are used to augment the corps risk based portfolio with an enhanced opportunity set. This has been the market watch for the week of April 26th,

Speaker2:
Just kind of hammers home a little bit of what we've been talking about for quite some time on the show. Basically, we're still applying old conventional wisdom portfolios. So basically modern portfolio theory that 60-40 typical blend of stocks and bonds came out and was introduced by a gentleman by the name of Harry Markowitz in 1952. So that's like 70 years ago. Wow. So the theory basically stated that the best construction of a retirement portfolio was to grow with safety. So you used to negatively correlated assets traded on the same U.S. stock exchange where 60 percent stocks and 40 percent bonds. The problem is, as Mark Dorio detailed in this audio clip, bonds just aren't delivering five percent growth anymore. Right. So they're generating very little. That's why we recommend replacing your bonds with fixed index annuities to get market like gains without the market risk market like gains without the market risk. You can also consider a five wrong's structured note ladder by investing 10 to 25 percent of your portfolio into five equal structured notes with five different issuing banks within five different coupon rates and five different starting points within the linked indices. So structured notes are securities and do involve market risk. So we need to talk in depth about that. Fixed annuities do not offer any market risk. So we have a nice white paper that's about it, 18 page white paper on structured notes.

Speaker2:
I think if anybody's interested in that, I can get that out to him. Or you can just set an appointment with us and come in and we educate you on it. But with interest rates kind of where they were rock bottom, they're starting to creep up. And with inflation and everything more than likely, interest rates are going to continue to rise. And if interest rates rise, then your bond portfolios are going to suffer. So it's just not a good time to have, you know, 40 percent. Think about that. If you had a million dollar portfolio, 400 hundred thousand dollars in exposed to bonds and interest rates, just not a good idea right now. We've got to do some things, things think outside of the box a little bit and protect that portfolio, because in bottom line, it's not going to get the yield to create any income. You'd have to go way, way out, which creates a lot of risk in the maturity ladder. What I see happening, too, which concerns me, is a lot of folks that just truly don't understand the mechanics of portfolio management. They're putting high dividend paying stocks in their portfolio to try to eke out and get some income going. But that principle is 100 percent at risk if the market's correct. So we're also in the market right now. A little market update for you.

Speaker2:
The market I've seen starting to pick up some volatility. If you look at a weekly chart on the stock markets, you see quite a bit of volatility ups and downs. Yeah. And so we're seeing some we're still seeing a large shift of that growth and profits being taken out of technology shifting to value stocks, more cyclical stocks and so more value stocks. You have to have a well diversified portfolio that's actively being managed that can make these shifts and allocations. So if you just kind of keep things static and passive and you're just sitting in growth, yeah, you had a nice run, but you could also see a nice run downward and give up some of your profit. So on the way in this morning, I was thinking it's I've been doing this twenty two years and you get these certain feelings in cycles in the market cycles. And I just feel like now is the time more than ever that people just can't kind of wing it and maintain a passive strategy with just holding on to mutual funds or just holding on to bonds. I see a ton of portfolios. They come into my office every day and these portfolios are heavily weighted in bonds and they've already gotten crushed. And the people are like, well, what do we do? You know, I don't want to take losses.

Speaker2:
And at that point, but you could still see sustained downward losses. So we've got to do some different things and think outside of the box because things are very volatile. Bond rates not only are super low and there's a lot of volatility in the bond market. You can lose money in bonds, folks, but they're trading at like one hundred and thirty five times their earnings. So that means that bonds are way, way overvalued. And so we've got to look at alternatives as as to what we're going to utilize to hedge against the stock market volatility. So your typical 60-40 portfolio just isn't going to work for you folks going forward. And that's our biggest concern, is getting people educated on that, getting them in the office. It's a stress free. It's just a nice area. And you can take your time how I meet with people four and five times sometimes just so that, you know, we can walk them through it and build that comfort level. But more than ever, there's got to be a change made today. And I feel really, really passionate about that. So great news in the market. Also, J.W., I mean, the jobless claims are down. New jobs are being added. I think this week like 700, 42000 new jobs. Every company is hurting for work. Yeah, there was the National Truck Driver Association or whatever came out and said they need one million new drivers over the next ten years, one million new drivers.

Speaker2:
The shortage there, our infrastructure bill, I mean, this is going to continue to push the economy. I believe, in a positive direction. However, you're going to see some volatility and some shifting in different types of asset classes and stocks. So exciting stuff. And we're in recovery mode. But the biggest problem we're facing, J.W., is. Companies don't have anybody to work, there's a labor shortage and that's been created by our wonderful government by just giving out free money. You know, I read an article the other day, if you are making fifteen dollars an hour, you're still better just staying at home because you're getting your unemployment plus an additional 600 or something dollars. You're almost making like 15 bucks an hour. So just sitting at home. Right. So people wonder why you go to a restaurant and the service is bad. Some of your favorite restaurants, because they're packed and they don't have the labor. That's right. And there's a shortage everywhere and everything because nobody. So there is a job out there for everybody. It's time to go back to work and get this economy rolling so we can be competitive in the world. And let's do that and get get people off of the the social welfare. It's time to get back to work.

Speaker1:
Yeah. And feel comfortable in your future. Of course, a stress free future is what we want for you with take point wealth management. And that's the main purpose of this show. Take point on retirement, because when you hit those retirement years, you want to retire safely and take point. Wealth management is there to take point on that retirement. So portfolios, well, you can build one, you can test one, whatever the case may be. Take point. Wealth management will be there for you and we'll be here for you right back. After a short message from our sponsor, a whole hour of the information you need and deserve brought to you by take point wealth management. This is take point on retirement. We'll be back after this, folks. Structured notes involve risks the 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 government agency, nor are they obligations of or guaranteed by a bank. The securities will not be listed on any securities exchange and 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.

Speaker1:
The securities are subject to the credit risk of the issuing bank and any actual or anticipated changes to its credit ratings or credit spreads may adversely affect the market value of the securities. Well, look at there, see, we're back, we weren't gone too long. Thanks for hanging around, though. We appreciate you being with us the entire hour. That's right. And a whole hour chock full of the information education you need and deserve for a stress free retirement. By the way, what is your financial speed? Well, Eric Arnet, lead advisor retirement plan or is in the studios to tell you from and take point wealth management. That, by the way, is a book that Eric put together. It's called What is Your Financial Speed? And, of course, a take point on retirement, the name of this show every Saturday at this time. Other books? Well, the dos and don'ts of annuities, annuities, 360 and so much more that the well rounded team at take point wealth management has to share with you and offer you as many retirement warrior take point wealth management. There are no once again three five to six one six zero five one one. Welcome back, Eric Arnett.

Speaker2:
Thank you, sir. Let's talk about your big number and your little number in retirement. So, OK, that's a great Segway into discussing more about alternatives with the 60-40 portfolio. But also, it's interesting, this this segment here coincides directly with my book, What Is Your Financial Speed? So I and I wrote this years ago, but it's still completely evident today. And why we talk about why I call it what is your financial speed is you know, we have to know you got to know what your big number is and your little number. So your little number is that word of the week, retirement income. That's your little number. So that's the number that your portfolio for your pension or your Social Security has to create for you. You know, your retirement income, your big number is your overall portfolio value. And is that portfolio value moving along enough in order to, number one, fight inflation, which is going to be caused by interest rates, increasing health care, rising health care costs, you name it, things are just getting more and more expensive. So your portfolio has to be moving at a certain clip also to continue to grow for future needs. And so one of the things that we do with our retirement warriors when they come in, as we put together a long term retirement plan, completely free of charge for our listeners.

Speaker2:
And those of you who have taken advantage of that, that's great. And I hope that more listeners do. But we put together a plan that projects out to age 95. What's your retirement income will look like and could look like based on what your current composition of assets are? And then do we need to increase that? Do we need to make the portfolio more tax efficient, that we need to make the portfolio more market efficient? Do we need to reduce fees and we can play with that software over time and really get a very high probability of of of a potentially good outcome for you? So that's how we work with that software. But it's important to keep up that retirement income. And right now it's tough to do with bonds or interest rates being so low. And so we've got to look at other ways to create that retirement income for and we do have those solutions. So we've got to keep the retirement income going. It's got to be tax efficient. We talk we've talked a lot about the retirement income gap. That's real simple, folks. Think about it. If your your nondiscretionary needs when you add up what you need to live on, let's just say that's 5000 a month, but your retirement income is only generating 3000 a month.

Speaker2:
You've got a two thousand dollars a month income gap. And we've got to find a way to close that gap to make that portfolio on your retirement plan more efficient long term so we can meet your goals and we get you to age 95. Now, I know what you're saying. Oh, I'm not going to live to age 95. Well, guess what? More and more people are. And I've seen it where we have clients that you thought maybe they weren't going to be around that long, but they still are. And guess what? Now, when you're in your 90s or even your late 80s or early 80s, for that matter, and you need assisted living or, you know, health care, and the cost of that is increasingly getting much higher. In fact, we've talked about it before. There's predictions that costs will go up 20 times over the next 10 to 20 years, 20 times what they are currently for for for health care. So we've got to really get out ahead of this and put together a plan that's really going to work for you. So tax efficiency, you know, we talk about this all the time. We've got to you, everybody out there who's got a retirement portfolio for one K, IRA, whatever it may be, you have a silent partner in your in your retirement plan.

Speaker2:
And it's called Mr. IRA. And Mr. IRS, you know, will more than likely try to take about 40 percent of your retirement income, so why have that partner throughout retirement? We're talking if you're out there listening and you're 60 or even in your 60s or even in your 70s for that fact, and you're going to have a 20, 30 year partner in your retirement called Mr. IRS. Let's try to get him out of the picture completely, man. So that's what we do and that's what we talk about, even with doing the Roth conversion ladder. So you've got to educate yourself on the Roth conversion. And I get this question all the time. Eric, can we do a Roth conversion? Can we buy Roth or, you know, invest in Roth, even though we might be interested in the fixed indexed annuity? Absolutely. We can do Roth conversions inside of a fixed annuity, and I know that's all. So it's awesome stuff. I mean, there's so many great strategies that we can do to help try to eliminate that silent partner you have, Mr. IRS. And right now with 35 trillion I mean, I don't even know if that's a number is that a number of 35 trillion is what our national debt is.

Speaker1:
Yeah. And if the government comes up with I guess

Speaker2:
They just seem to keep wanting to run up the credit card. And so how are we going to pay for that? Right. There's only a couple of ways you can. So, one, you can increase taxes, right, too. You can cut expenses. I don't see him cutting expenses anytime soon. They're just adding tremendous amount of expenses. And that's a whole nother story. But 35 trillion in debt, who's going to pay that? So there's going to be an increase in tax. That's absolutely going to happen. So now is the time more than ever to get active and start doing that Roth conversion ladder. And I want to show you how that works. You know, think about it. If you over the next five years or even 10 years, if you're 60 years old, 65 years old, and you can eliminate the IRS as your partner by the time you're 60 or 65, you could do it all in one year if you want. You're just going to pay taxes on whatever we convert. But that's why we kind of try to like to do it over a certain period based on your income. But if we can eliminate that IRS, I don't care if they put tax rates at 60 percent on retirees for one Korzen IRAs, 60 percent of zero zero. So you're not going to have to worry about it. So this is huge. This is what we've got to do to try to protect that big number, because the more efficient that your portfolio is, your big numbers are going to grow. And if your big number grows and we can get that small number to grow as well, which we want to be able to put solutions in place that are going to continue to grow your income as well.

Speaker2:
Also, we have to talk about and we will address that when we're planning with folks is one of the spouses. If you're married, I mean, unfortunately, your spouse could pass, right. And you could lose that household Social Security income. So, you know, loss of about 33 percent of the households, the Social Security income when another spouse passes away. So how do we replace that income? We've got to put strategies in place now to be out ahead of that potential loss. So that's really important as well. A big number, a little number. Got to stay focused on that and get both of those working for you. And we're going to give you a free, no obligation free retirement plan to age 95, where where we're going to address your large number and your small number. And I'll give you a portfolio analysis and you understand the fees you're paying, the risk you're taking with your current investments. I hope you do if you don't get in and see us. And also, for many of you, you've been in the same investment portfolio at 60 40. That's 60 40 portfolio for years. And right now that 40 percent of your portfolio is quite the boat anchor. It's going to drag on your portfolio because in a slightly rising interest rate environment, your bonds are worthless. OK, so let

Speaker1:
Me ask you this. That 60 40 is basically just a baseline. I mean, you said it's been in place now for 70 years and a lot of us are still with that. And it's basically just a baseline. I'm having a little heavier on stock and not so much on bonds. But then again, we can also replace those bonds with fixed annuities and so on and so forth. So it's just a baseline, right?

Speaker2:
Yeah. So I mean, what it boils down to is the conventional wisdom in the investment industry is you sit down with an advisor or broker and they're going to give you this form to fill out. And based on your age and kind of what your goals are more than likely and your risk tolerance. OK, there are more likely at your age going to prescribe that 60 40 blend portfolio. I mean, that may be appropriate, may not be, but that's the majority of what we see folks at. And, you know, so that's a that's a portfolio strategy that I learned. You know, when I first came in the industry 25 years ago. You know, conventional portfolio theory, and but that's when bonds were paying much higher, you know, and you could rely on bonds to create some income, you can rely on bonds to hedge against the stock market. But think about it. Over the last 12 years, you know, the bond prices or the bond interest rates have been coming down. So we've had that. That's an inverse relationship to the prices of the bonds. So as interest rates are coming down, the bond values have grown. So we've had a massive rally in bonds over the last 10, 20 years. And that's kind of why people kind of maybe fall asleep at the wheel and think, oh, my bonds are doing great. Well, yeah, they have done pretty well over the last 10 to 12 years, but that's not going to be the case over the next 10 to 12 years. It's a completely different environment now, and that's what we really got to get out ahead of.

Speaker2:
And that's why we create these tax efficient, market efficient, fee efficient portfolios. Anything about your if you have a 40 percent of your portfolio in bonds, you're paying fees on that 40 percent. So a million dollar portfolio. Right. You might be paying one percent total management fee, right. Well, so four hundred thousand dollars of that. Four thousand dollars a year is getting feed and you're not getting a return on it. So let's eliminate that side of the equation. You're still going to have the fees on the equity side. But if we can eliminate the fees on the fixed income side and make it more efficient and utilize indexed annuities and structured notes, then there's no fees on that side of the equation when we build the portfolio. So we found a way to do that. And so you're cutting your fees in half right there by implementing that strategy. And that has a huge impact. You think about it, one percent on four hundred thousand dollars even into the million dollar example, over five, 10, 15, 20. You're talking about thousands and thousands and thousands of dollars. That's tapping into your overall efficiency and return to your portfolio. So, you know, unfortunately, it's like anything. And most of our listeners out there and the majority of of of the world, they still are following that conventional wisdom on how to construct and build a portfolio that's going to hedge against the volatility of stock market. And that's just not going to be the case going forward.

Speaker1:
Very good. Once again, I believe what Eric Arnet, lead advisor, retirement planner, would take point wealth management is saying that you need to call them and you need to do it today and get that portfolio in check. Three five to six one six zero five one one is the number up and down the Nature Coast within our listening area. They have several offices to serve you three five to six one six zero five one one. And I believe he's also saying that they offer that smart plan to their listeners, which is also, I believe, the take point wealth management blueprint on retirement. You can ask for that. It's a 1500 dollar value. It's yours free today. Give them a call. That's take point wealth management. Just a little something for all of our listeners and retirement warriors out there. Once again, three five to six one six zero five four one one take point. Wealth management, check them out online, answer a few questions, even ask questions if you like their email to do that is info info at take point on retirement dot com. The name of the show take point on retirement every Saturday at this time. One full hour folks. And of course we're going to take a quick break and we're going to be back in just a little bit.

Speaker1:
We have some more to play from that Annuity 360 book as well. A couple more chapters to share with you if you haven't gotten that book. Well, you can ask for that as well. Three five to six one six zero five a one one. Hold on. We'll be back after this. Eric Arnet is an investment advisor, representative of Retirement Wealth Advisors LLC and SEC registered advisor, Bitcoin Wealth Management. This station and RWA are not affiliated. Exposure to ideas and financial vehicles discussed. It should not be considered investment advice or recommendation to buy or sell any financial vehicle. Any comments regarding safe and secure investments in guaranteed income streams before 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 retirement wealth advisors. Let's take a pause for station identification. You're listening to ninety nine point nine FM. WSJ be Homosassa. Do you have any of your hard earned money and bank CDs earning half a percent or less? My friends take point. Wealth can get you three point seven percent with an investment product that places one hundred percent of your money into safe investments like the 10 year U.S. Treasury bond. Your money is not invested in the market.

Speaker1:
It's not at risk and you will earn more than six times the rate of a current twelve month banks. Could be smart. I'll take point wealth today three five to six one six zero five one one or two point wealth dotcom to learn more. And we learn more every Saturday at this time with Take Point Wealth Management, a show called Take Point on Retirement. That's right, take point. They want to take point on your retirement. That's that stress free retirement. That financial future, it's secure would take point wealth management. And that's why the folks from Take Point Wealth Management are in our studios, by the way, Loffler local offices up and down the Nature Coast to serve you within our listening area. Or they'll come to you, you can visit them, they'll come to you. And they also do meetings online via email or of course, Zoome meetings, et cetera. But the thing is, you need to contact, take point wealth management. And to do that, just plug it in the old search engine like Google, take point wealth and it'll pull it right up there. That's their website. Take point. Welcome their phone number three five to six one six zero five one one as we continue with Take Point on retirement. And Eric Arnet.

Speaker2:
Thank you, sir. So segment three on a talk about beating bank CDs. So this is kind of a irritating subject for me. I guess is is a word I'll use. I used to work in the banks, in the big banks years ago, and back in the day you could get a good rate. People were concerned about the markets are concerned about certain situations. They probably put their money in a CD and they could get a decent rate. And somebody out there listening right now might still have some CDs at about five years ago, ten years ago. And you might be getting a decent rate. But guess what? Those are going to be maturing here. Pretty soon you're going to get zero or maybe less than one percent on a on a on a one year, two years, three years CD. So most people put their money in a CD because it just fearful they don't want to lose their money. So they're not going to take any risk for it. And they've been pounded into their head from grandma and grandpa over the years. Buy a CD, buy a CD. Well, that was true. Yep. But right now in today's environment, that's probably the worst thing you can do. You're actually going to lose money by putting money in a CD because it's not even going to keep up with inflation. So what you're going to do is if you roll your money into a new CD or even you put your money into the bank, now you're actually paying the bank yourself.

Speaker2:
You're paying out of your own portfolio for the bank to protect your money. Just kind of a crazy thing that's going on. We have some great solutions. We've talked about the the Maiga, which is a multi year guaranteed annuity. We have some two year guaranteed annuities paying two point one five percent. That's five and six times what the bank is going to pay you. I've written in my book, I've written some articles and we've talked about the show before. And we can get into it if you if you come in or call me and we discuss it. But here, money is actually probably a lot safer in an insurance company than it is in a bank right now. Anyways, American Equity, one of the biggest triple-A rated companies, are offering our three year fixed annuity at two point four percent. We have a five year with three point zero five percent. What we do is we screen every company that exists out there. And quite frankly, I used to do that with CDs. I used to be able to build folks a laddered CD portfolio. We would screen all the banks in the country and find the very best paying CDs, but you can't do that anymore. So we're utilizing the fixed annuity, which is the maiga, the multi year guaranteed folks. All it is is just like a CD. But with an insurance company, however, it has such better bells and whistles that's more tax efficient. There's no fees. These are great alternatives.

Speaker2:
So two point one five on a two year with a company called CELAC right now. That's a great one. American Equity has a three year at two point four and a five year at three point zero five. So even if you don't want to go out long and maturity and you don't want to tie up your money, this is still better than buying a CD or a bar so we can structure a laddered annuity portfolio. We can structure a lot of fixed annuity portfolio. We could put some in a two year sum on a three year and some of the five year. And so as interest rates start moving upward over the next year or two, we'll have money coming out of the two year. We can reinvest and and get the higher rate right. And so we can constantly be moving with interest rates as they're as they're potentially going to move on the upside. And then, of course, another great alternative is the fixed index annuity. Heck, we have some paying as much as five to seven percent a year. I've got one right now that pays a 10 percent bonus up front. Wow. Free money. So let's say you had one hundred grand are 200, 300 foreign grand. You don't get in 10, 20, 30, 40 thousand dollars free boom. There you go. That's huge. That's huge. Not to be like the Forcillo guy from or what happened to him anyway. Like disappeared. Yeah. Come to think of that, he sell out. I don't know.

Speaker1:
A huge

Speaker2:
Guy. No kidding. Anyways, dude, it's huge, but no, it is. It's really, it is. It's a great strategy. And guess what? Your principles are 100 percent protected. You're not going to have to worry about FDIC insurance and banks having. This stuff is solid and we'll get into the details on that, but great alternative as an example, we have a fixed indexed annuity with CELAC. It's called the Tonn Bonus 14. It pays a 10 percent bonus with a 92 percent participation rate and the Barclays' Atlas five index, which, by the way, in twenty twenty, the performance was about seven point five one percent. So imagine seven point five one percent and you got 92 percent of that and you had to take no risk in the market. So do the math. You know, you made seven percent. That's a lot better than having your money in a CD or a bond. And no market risk, no interest rate risk principle is 100 percent protected. They gave you a bonus. These are these are great strategies. Let's go ahead and play some of my friend for stocks. Annuity 360 book, Chapter 16. I think it's a great kind of segue into this. And give us a little more insight and then maybe we'll chat about it and make some comments.

Speaker1:
Ok, this is that annuity three 60 book we've been talking about. You're sorry for your asking. Just cultic point. Wealth management. And we're going to hear Chapter 16 now.

Speaker4:
Chapter 16, reduce risk in your portfolio with annuities. Big idea. An annuity can protect against several risks that can affect retirees and pre retirees and offer a better financial safety net than other investment types. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned well. We believe that annuities can be the answer to risks in your portfolio. Longevity risk. Retirees and pre retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four percent rule. But annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement and annuity can help create an income you can never outlive. Your money will last for your entire retirement by utilizing monthly, quarterly or yearly distributions from your annuity account. After your money grows during the accumulation phase, market risk fixed indexed annuities can protect you from market risk. These annuities are not actually invested in the market. They're only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks. Should your index perform poorly, you will either make money or remain flat. You will never lose any money. Zero is your hero. Inflation risk annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout.

Speaker4:
Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk. It is important to have an annuity with a payout linked to the Consumer Price Index, or CPI, instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk. An annuity that increases at a flat rate each year does not offer sufficient protection against inflation sequence of return risk. An annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by Retire one has shown that you can flip fifteen years of returns from retiring during a recession to retiring during a market that is up and completely change your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return. Consider a smart, safe plan with a smart, safe plan. Your money is invested not in the market. The characteristics of investing, not in the market, include growth with safety market upside limited to no downside principal and gains protection. Low cost zero to one percent annual fee time horizon of seven to 14 years can earn five to seven percent annually. Options are available for guaranteed income. Here's some examples of not in the market investing banks CDs. The annual percentage yield API is about one to two percent. Your time horizon is typically one to three years and you cannot access the funds until the contract is up.

Speaker4:
Treasuries, the API is about three percent. Your time horizon is ten years and you cannot access the funds until the ten years is up. Fixed annuities, the annual percentage yield is between three and four percent. Your time horizon is typically four to seven years. You are able to access the funds during the contract period, multi-year guaranteed annuities or migas. You get between two and four percent growth on your principal depending on the duration of your policy. This is less growth than a fixed indexed annuity. But it is. Is guaranteed, the annuity companies is required to pay you the rate they promised for the duration of your policy, fixed indexed annuities, you receive between five and seven percent growth on your principal. The time horizon is seven to 14 years and you do have access to the funds in your account if you need them. A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed indexed annuity over other not in the market options. If you invest in treasuries or CDs, you will lose ground in your investment due to inflation. Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation annuities because they minimize your risk in several areas and they lock in your gains to the use of point to point protection periods, meaning you won't lose money.

Speaker2:
So there you have it. Great little segment there by Mr. Ford. I love this book. He took a lot of time to kind of simplify things. But, you know, I want this. This reiterates what we talk about when we sit down and build what we call the smart plan with our clients. And the smart plan consists of smart risk, which is your equity side, having a tactical asset managed portfolio, and then the smart safe side, which we're going to be utilizing index annuities and fixed annuities to provide that income and also that hedge against the market. And the great thing about it is we automatically reduce your fees by taking smart, safe side. And, you know, you're not going to pay any fees on the smart, safe side. So and together, if we can, you know, build a portfolio that's going to weather all storms, interest rate risk, market risk, and also be able to provide that long term income on your little on your little number and also some growth on your big number. You're going to we can show you based on the projections inside the software tools that we use and even the you know, we use the hypotheticals that we put in front of folks when we show them these from the annuity returns.

Speaker2:
If you're averaging six, seven, eight percent on your fixed income side and then you're still getting good returns on the stock side, six to eight percent, your overall portfolio is going to yield a lot more than that traditional 60-40 portfolio that you're in currently. And we're going to take away the fees and we're going to make it tax efficient and more efficient. So it's a win win win all the way around. It's time to kind of throw out the old conventional wisdom and really and really take some time to look at this, the smart plan that we put together for folks. So so I just want to make sure folks got that segment from Ford. And when we come back, we're going to get in. I think we're going to be wrapping up with segment four and we're going to be talking a little bit more about Roth IRA Example's and Roth conversions. And that's another way that we can combat taxes and in the future. So 30 year, 20 year plan, folks, let's get out ahead of it and let's make these things efficient for you.

Speaker1:
I'm looking forward to it. I hope you are to beating bank CDs. I hope you got it. If not, you can get it. That's the book, Annuity 360. That's a chapter right out of that book, Chapter sixteen. And we've also got Chapter Seventeen. We're going to try and share with you before we go, but you can ask for that book in the meantime, by get in touch with take point wealth management up and down the nature coast of Florida locally. That's right. Right here in our own backyard. The folks that want to help you are just a phone call away, three five to six one six zero five one one. That's the number to contact. Pick point wealth management. Check them out online. Take point wealth dotcom. In the meantime, take point on retirement every Saturday at this time on this station. We'll be back after this. Vokes. Take point, wealth management is on a mission to honor, protect and utilize the values, ethics and principles learned through military service to our country, to our community, building strong relationships, investment tax advisers guiding you every step of the way into retirement. Take the advice of someone with your best interest at heart. Take the hand of a leader. Take point wealth management. We'll take point on your retirement today. Take point. Wealth, dotcom, citrus, Hernando, Pasko and Levi. Hey, here we are at the final segment of take point on retirement brought to you by take point wealth management every Saturday at this time. And we've got lead advisor retirement planner Eric Arnet here to wrap up today's show, Take Point on retirement.

Speaker2:
Eric Haney, my favorite part of the show and my favorite thing to talk about is the Roth IRA, because I want to help people get the money out from the clutches of Uncle Sam and his potential increases in taxes. Hey, look, I believe in paying taxes. I really do. But there's a there's a balance there, right. I don't get

Speaker1:
A Christmas card every year from the IRS.

Speaker2:
Yeah, exactly. And think about you've worked your butt off your entire year to save this your entire life. I'm sorry to save this money if paid taxes all the way. Now, they say you get in retirement, we're going to tax your retirement. Plus we're going to tax your Social Security. You know, we're going to tax everything. And then when

Speaker1:
You pass away, they'll tax your beneficiaries. Absolutely.

Speaker2:
And so a great tool right there is if your money's in the Roth, it passes to your beneficiaries tax free, too. So it's just you underutilized tool. So when we sit down, we can do actual Roth IRAs inside of the annuities as well. That's exciting because years ago just something wasn't around. But things have become so much more sophisticated, which is great. I can think of an example with some current clients, change the name for identity purposes. But I'll just say, as Deborah said, about a 970000 IRA and we took 12 years, did a hundred and twenty thousand dollar Roth conversion over 12 years, and we sure know what that would look like. It was a tax savings of five hundred and seventy seven thousand dollars. Wow. Total retirement tax savings and inheritance tax savings of nine hundred and thirteen thousand seven hundred forty dollars. So just by slowly converting that million dollar IRA, I mean, those are some huge numbers, folks. I mean, that's hugely impactful. So just sitting there doing what you normally have done for for control and fear issues is just not the right thing. We need to really help you out, make these things more efficient. And that's why we offer our listeners that free retirement plan and analysis will show you the smart plan, will do the Roth conversion ladder for you right in front of your eyes and show you how it can work for you. We can utilize annuities which are completely safe and your principles are 100 percent protected. And guess what? Once it's inside the Roth and it grows inside the Roth, you get to take the money out.

Speaker2:
Tax free to wow. And an annuity. That's awesome. Tax free income for your future. I can think of Tom and Kathy. Tom's investing about 2000 a month into a Roth IRA for ten years, and he is set to generate twenty five thousand dollars, twenty five thousand six hundred dollars plus and tax free retirement income when he retires. So that's going to that's like generating an additional Social Security income, except it's tax free. So we can get out ahead of that and do that planning as well. So this other example of a couple, they had about 680000 in an IRA and she also had a one million dollar IRA. They're retiring early at age 60, and they're going to convert two hundred and twenty eight thousand dollars a year for twelve years to include converting the growth. And they will save an astounding amount over their 35 year retirement income, one point one seven four million dollars in total tax and inheritance tax savings, one point one million dollars in savings that they're going to keep out of the hands of Uncle Sam. We've got to get these strategies in place and we got to take advantage of the low tax rates right now as well. Taxes are on sale, so this is huge. Let's roll Chapter 17 of Annuity 360. I think he's going to get into a little bit about this and and forge great at breaking it down into simple terms for us.

Speaker1:
Ok, here we go. Just a few minutes long.

Speaker4:
Chapter seventeen, you can buy an annuity with your Roth IRA account. Big idea. Many people don't know this, but there are at least five annuity carriers who allow you to invest your Roth IRA account into a fixed indexed annuity. And many others are beginning to follow suit. A Roth IRA is an individual retirement account IRA under United States law that is generally not taxed upon distribution, provided certain conditions are met. The principal difference between Roth IRAs and most other tax advantage retirement plans like IRAs, four one KS for three B's, 457 fifty CEPA, ET, etc. is that contributions into the Roth IRA are invested with after tax dollars and qualify withdrawals from the Roth IRA plan are tax free and growth within the account is also tax free. The Roth IRA was introduced as part of the Taxpayer Relief Act of 1997 and is named for Senator William Roth, who introduced. And sponsored the legislation, this may surprise you, but you can actually invest your Roth IRA account into a fixed indexed annuity as of the printing of this book. There are five annuity carriers that will eagerly accept a full Roth IRA conversion from your IRA. There are only three annuity carriers that can handle partial conversions, but more carriers are adjusting their business operations and illustration software to accommodate Roth IRA investments into their annuity products.

Speaker4:
The largest annuity care in the United States allows for Roth IRA investment into their annuities. They allow Roth IRAs in all of their current fixed indexed annuities, full and partial, with some parameters, including number one. Roth conversions will create new policy numbers so they will show in separate accounts. But this does not change any product feature or the surrender schedule with the annuity product number two, convergence must be at least the product minimum premium between ten thousand and twenty thousand each. Therefore, you cannot implement a Roth conversion that is less than 10 to 20 thousand dollars depending on the annuity product. The title of my next book is Taxes are on Sale. I will cover all the aspects of Roth IRAs, Roth IRA conversions and why now may be the best time to kick the IRS out of your retirement account with a Roth IRA conversion. I believe that taxes will likely increase in the future. So strategic Roth latter conversion will help reduce your future tax risk and save you six figures in taxes paid during your 30 plus year retirement. Please do not let your current Roth IRA account or your desire to convert your IRA to a Roth IRA impede you from investing into a fixed indexed annuity.

Speaker2:
So there you go. We've talked about it before on the show is that these annuity companies, these large insurance companies are getting more and more creative to help retirees and pre retirees out and to attract those dollars. So I venture to guess that there's probably not a lot of financial advisors, brokers out there, even in our community that are stressing this and talking to their clients about it. Maybe clients think even or, you know, it's that's too complicated or I just don't want to deal with that. But I'm telling you, under this environment and going forward, you need to really educate yourself and get it done and come in and see us. You know, you can go to our Web site, you can give us a call. We're going to put together this plan for you and show you right before your eyes have no obligation to do anything completely free. I'm excited about it. And we talk about it in our seminars and people get active and they're coming in. But I want to reach more people. I want more people to do it because I just feel like this is going to be the big silent killer for or for our retirees. So we've got to get this done. And it's all about just educating yourself on it. Big, big savings. The fact that these insurance companies now are offering these annuities that we can do the Roth conversions in is is fantastic. It's it's really awesome. It's exciting stuff. So I don't have to do an annuity. We can do it in a regular portfolio as well. But we do have the flexibility now to to utilize Roth conversion with annuities, which is exciting. Now you have a

Speaker1:
Step by step guide. You make it easy to use and understand and you're educating folks about this this Roth IRA conversion ladder. Explain that. What is the latter mean?

Speaker2:
Yeah, sure. Just means like what we said, like if we decide every case is different. But as an example that I gave earlier with Miss Deborah, she had almost a million dollar IRA. And based on her income taxes and different sources of income, we put together a 12 year conversion which was palatable for her. And so we decided to do a one hundred twenty thousand dollars a year taking from her IRA, paying the tax each year and then converting that to the Roth. So for some people, it might be a five year plan or two year. I've had people call me up and I've actually done large amounts of money, one year, boom. Let's get it done. Really. So as an example, so this sounds this might sound a little crazy to some folks out there, but this one gentleman had about a million dollar portfolio and he's, you know, very, very concerned about taxation. He's also concerned about passing the money on to his to his children. And he had a bunch of money sitting in cash at the bank making nothing. Right. Did a million dollar conversion all in one year. So that puts you in you know, I don't know what it is, the thirty four percent tax bracket or something like that.

Speaker2:
That's where Randy comes in. And that's why we're such a great team. We've got a CPA of thirty years on the team that we meet with, every client with. But as an example. So he paid 340000 in taxes are close to there. It goes down a little bit based on deductions and all that kind of stuff. But let's just say his overall effective tax rate on that was 25 percent. So he had a bunch of money said. The bank, he he paid the taxes and now he's got all that money sitting in tax free growth, some of it's in a tax free annuity as well for safety and and fixed income alternative. And so this gentleman's pretty young. So now he's going to have 20, 30 years of growth, tax free folks, no taxes on the income and interest and dividends and no taxes when it comes out. No taxes to his kids when it goes to them. And by the way, this Roth is a beautiful thing. Like people don't realize how amazing this thing is. You don't have to like with a regular IRA or a 401K. Once you hit 72, Uncle Sam demands you to start taking money out. It's called the required minimum distribution.

Speaker2:
And so Uncle Sam is going to say, hey, if you got a million dollar portfolio, you got to take out roughly to save four percent, 40000 dollars and pay tax on that. And by the way, that 40000 dollars goes to your gross adjusted income, which boosts your Social Security tax as well, makes your Medicare more expensive. So anyways, you know, you're going to pay a lot less right now that the tax rates are on SASO. But if you try to do this in the future, tax rates could be a lot higher. That's why it just makes sense to get more aggressive with this now. So to answer your question, the latter is just kind of based on, you know, our analysis and working with the client, what is the best time frame for them? It might not be 12 years. And so we show them each year on the Roth conversion ladder software, the money coming out of your IRA, going into your Roth what that will create in tax and then also show the growth on the portfolio. So you see this step by step, year by year transformation and a nice spreadsheet. And it's all right there in front of you is all predictable. So exciting. Exciting stuff.

Speaker1:
Yeah. Makes once again, makes it easy to understand that's what they're all about. Educating seminars. Watch out for those invitations. As Eric Arnett mentioned earlier, retirement planner, lead advisor would take point wealth management and looks like we've about run out of time there, Eric. So we're going to wrap this sucker up and, of course, be back next week or take point on retirement every Saturday at this time, a whole hour chock full of the information you deserve and need for that stress free retirement. In the meantime, any last words?

Speaker2:
Just really hope folks give us a call and get in here and let's get to work. We had some this shows also, by the way, if you missed the show or you want to replay some things, you want to go back, you can go to our website, everything's podcast. And we take and you can see up on the right hand corner podcast and click on that and you'll get the recording of the show if you want and give us a call. Let's go over some of these topics, what they mean to you, and let's get your smart plan in place and your conversion later in place today. Procrastination is not the best. Right. And also, you know what we've talked about before. No plan has a plan to fail. So let's get a plan in place and let's kick some butt.

Speaker1:
There you go. Failure to plan is a plan to fail. I'm glad you reminded me of that. You have to remind yourself each and every day, folks, as you make those plans, do not fail, but succeed would take point. Wealth management, they're taking point on your stress free financial future. Take point on retirement brought to you by take point wealth management every Saturday at this time. Seven thirty eight thirty one full hour. The phone number to call, by the way, three five to six one six zero five one one three five to six one six zero five one one up and down the nature coast of Florida, right here within our listening area. They have offices to serve you. You could go to them. They'll come to you. Whatever the case may be, it's so important to be active now, all you retirement warriors, and take that first step by contacting take point wealth management three five to six one six zero five one one. In the meantime, we will see you next week right here. Same place, same time.

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