RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:00:00]
MALE: You found it. It’s your safer place for retirement planning. Prepare to be coddled in pure fiduciary goodness with your host and president of Decker Retirement Planning, Mike Decker. This is Safer Retirement Radio. If you’re in or near retirement, listen up and learn about a math-based, principle-based approach to retirement that is designed to help you enjoy a safer retirement. These strategies are to help protect and grow what you’ve saved and live the life you want today.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:00:00]
MALE: So, grab a pen because your safer path to retirement planning starts now.
MIKE: Welcome to Safer Retirement Radio where you get the transparency that you deserve. I am Mike Decker, president of Decker Retirement planning and your host here. And I’ve got a panel with me today I would like to reintroduce. They’ve been here before. Cameron Archibald from Decker Retirement Planning. Cameron, thanks for joining us on the show today.
CAMERON: Yeah, thanks for having me back on, Mike.
MIKE: And then I’ve got Josh Hunsaker as well. Josh, thank you for joining us on the show today.
JOSH: Thanks, Mike.
MIKE: We’ve got a lot of content here, just some context for why I’ve asked you both to be on the show today and to have a fun conversation.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:00:00]
MIKE: One, Josh handles all the new business. When people come in, a part of the Decker Retirement Planning family, how to implement it is very technically. It’s a difficult task as you’re transitioning from the accumulation investments and using what’s available into a distribution format following the three principles that govern proper retirement planning. And then, Cameron is in-force business; he’s the one that takes the plans and keeps them going for as long as you live.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:00:00]
MIKE: Both two different sides of the coin, but still the same coin, so thank you both for taking the time to be here on the show with me today. There’s a lot of talk in the investment industry around buy and hold right now, and I want to address this head on here. In fact, our newsletter, which you can subscribe to for free at deckerretirementplanning.com, at the very bottom, you can subscribe there. Buy and hold is getting more and more popular, and I have no qualm against buy and hold.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:02:06]
MIKE: There are some benefits, and there are some detriments. It’s up to you on how you want to address it, but I’d like to just take a little bit different of an approach here. We wrote an article that’s going to be released from buy and hold specifically talking about is it right for retirees or not. And, there’s two different sides of the argument here. My point being, though, is with robo-investing getting lower and lower fees and Schwab and Ameritrade, and this idea that who’s going to have the lowest fees to get the most business quantity over quality or investment strategies or whatever it may be.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:02:44]
MIKE: And passive-aggressing with alternate indices, smart beta, or just buying the general indexes, over a 10-year bull market, which we just had, seems like a good option. It seems like it could work, and for anyone that’s in the accumulation phase, it may be a good option, but for a retiree to buy and hold, I would suggest that with a limited timeline and you’re pulling income from your assets, one, it violates the first principle that governs proper retirement planning, never draw income from a fluctuating account. But two, people tend to sell when they need income, not when it makes sense from a financial standpoint or when the markets are there.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:03:24]
MIKE: Josh, Cameron, would you agree? You see this as some clients have pet stocks, Cameron, and then they want to sell them because their pet stocks are really hurting. The value add of who you worked for is an emotional bond, which is fine, but when it comes down to your investments, are you willing to take that hit, should the company you work for not do as well during your retirement?
CAMERON: Yeah, over time that pet can slowly turn into a monster, you know, what you had, the emotional connection at the company you worked with or had some insight, things happen quickly in the market and especially in single stocks and things can change very fast, and within a few years you can be completely out of the loop.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:04:05]
MIKE: I mean, look at some of these heritage stocks, JC Penny, ATT, GE, are they really the same value and are they going the same trend as they used to be? I would suggest that times have changed.
CAMERON: Yeah definitely, times have changed, and kind of on that note, the other day I stumbled across kind of an older article, it actually is…Before I give the title of it, it was dated back in August 2008. So, right before literally, right before the crash.
MIKE: [LAUGH]
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:04:34]
CAMERON: And the title of the article was called Thou Shalt Buy And Hold. And just let that sink in for a second, that it was titled Thou Shalt Buy And Hold, released literally weeks ahead of the crash, and reading through the article, they actually did mention something that you said, Mike, that people tend to sell their securities when they need the income or when something happens in their life, rather than when something happens in the market, and that’s one of the biggest I think, shortfalls with the buy and hold system is it creates too much room for emotion in the trading process.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:05:16]
CAMERON: Whether you’re just buying forever and just going to hold onto it, pass it onto your kids, that’s one thing. But if you’re buying and holding with the intention to take income from it, a lot of times the emotion creeps in there, and you end up selling, I don’t want to say, at the wrong time, but you don’t have a choice at that point, when you sell.
MIKE: And, when the markets go down, it can be very costly. I mean, let’s plot a few examples right here. I won’t use a client example. I’m going to use kind of the overarching theoretical example if that’s okay, just because I think it may apply to more people.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:05:49]
MIKE: The benefit of buy and hold is very low cost. I mean, to buy and hold, if you can hold it long enough, you’ve got the smaller amount of capital gains, right, you’ve held it enough that you’re not in the higher tax bracket or the lower tax bracket for…Not tax bracket, lower tax…Effective tax rate for long term gains. But, at the same time, you have to hold it that whole time. August of 2008, do people have the gumption to take that hit and then, what was it, six, seven, eight years before they really made their money back?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:06:23]
CAMERON: Right, it’s been, you know, like you said, six, seven years before people got back to just neutral at that point.
MIKE: An accumulation person can wait that long and keep investing at a discounted rate, dollar costs averaging, which can make sense. That’s up to you, your suitability. But when it comes to a retiree, a retiree can’t put a pause on their income for six years, seven years. That’s the detriment. That’s the risk that a retiree will have. Now, I’ve met some retirees that have pensions. They weren’t from GE, but they had pensions.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:06:58]
MIKE: And the pension supplied everything that they wanted. I mean, my own grandma and grandpa, my grandfather worked for Boeing as an engineer and they were very frugal, lived off their pensions, so their assets were more of a legacy play. And they didn’t like active investing. So, they just passively invested in a few indexes and a couple of stocks that we liked. And that was it. It was a legacy play. For a legacy play, that may make sense. Now, when you die that’s a whole other conversation, about efficiently passing those investments to your beneficiaries.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:07:30]
MIKE: But, when all is said and done, we rag a lot on buy and hold but there is a time and a place that could be for there, but when it comes to investing, if you are solid, if you are in a pie chart, all together, you are guessing. You are playing retirement roulette with your assets and they break all three principles of retirement planning. And I think it’s funny, because Thou Shalt Buy and Hold, it’s almost like they’re trying to make this a commandment.
CAMERON: Right. [LAUGH]
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:07:59]
MIKE: And then when rules change, my favorite is the four percent rule which is now, I think, the three percent rule, the last conference I went to, it was last year in Las Vegas.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:08:09]
MIKE: I should say, the last conference I went to where I wasn’t the keynote speaker. They were discussing, is it the five percent rule now? Can we tell people they can take more money? A rule shouldn’t change, you can’t make a commandment and then take it back. The whole premise that we can keep changing the guidelines, that’s like playing a football game and then at halftime saying okay, we’re playing soccer everyone, now, so gear up.
CAMERON: [LAUGH]
MIKE: It flies in the face of consistency, and if there’s nothing else retirees are going to want it’s consistency with data. It’s consistency with research, and it’s consistency with their retirement.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:08:45]
JOSH: I just want to draw a quick parallel here. You mentioned you can’t really change the rules of the game, but I think it’s not so much a problem of people changing the rules as people don’t understand the rules of the game. I remember, I think it was, not this last weekend but the weekend before, there was a college football game, and one of the teams kicked off and the ball landed just shy of the end zone on the other side.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:09:13]
JOSH: And one of the teams didn’t understand the rules very well and the other team did. And if the ball lands within a certain space away from the end zone, the other team can recover it before you touch it. And so the team that was receiving just kind of stood around and waited for the ball to stop, but somebody from the other team sprinted down, tackled the ball, and then they got the ball on the one yard line to make another touchdown.
MIKE: [LAUGH]
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:09:38]
JOSH: So, it’s just because the receiving team didn’t understand the rules. Their guys weren’t aware, and I think that’s a big problem is because people don’t understand the rules, not necessarily of finance but more so of retirement, people don’t understand really the baseline or in our case, the principles, the three principles of retirement. And if you follow those principles, you’re going to be pretty well taken care of, but if you don’t know those rules, those principles, you’re guessing, like you said.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:10:07]
MIKE: Let me illustrate the rules right now, just so we’re all on the same page, and we will cover them throughout the show and we continue to do this over and over again so you can understand how you can enjoy a safer retirement. Let’s not play retirement roulette, which is what so many people did in 2008 and the house won. When I say the house, I don’t really know who won in that situation, I mean even the government was kind of given a difficult situation.
JOSH: Certainly wasn’t the housing market, right? [LAUGH] Michael Berry won that, that’s who won.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:10:36]
MIKE: [LAUGH] Michael Berry, that’s right. And he doesn’t love the fact that he won, he just finds value, but the first principle that governs proper retirement planning is only draw income from principle guaranteed sources. I used to say accounts, I’m saying sources now. I want to include those who understand realistic investing, and I’m going to clearly define those who understand it and have been doing it. When you retire, that may not be the right time to start learning how to do real estate investing. But if you have a real estate portfolio, I think that’s close enough to principal guarantee.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:11:12]
MIKE: People need a place to live, if you understand your environments, that’s pretty close to a principal guaranteed income stream like a pension so to speak, that would be an appropriate income but for those that don’t have a real estate portfolio, for those who don’t have a pension, sole security should not be your only source of quote unquote guaranteed politics aside of an income source. So, strategically lining up your assets, which is the second principle, diversify by purpose, not just by risk. We understand risk diversification.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:11:47]
MIKE: But, perfect diversification is a zero sum. You don’t go up or down. Volatility is how we make money. Good volatility we make money, bad volatility’s how we lose money. You don’t want to lose income, which is why you have principal guaranteed accounts that you’re drawing from, but the second principle, diversify by purpose, not just by risk. There’s something we call the investment triangle and it illustrates three different investment types or traits you could say, qualities. There’s growth, there’s principal protection, and then there’s liquidity.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:12:21]
MIKE: Growth and liquidity, great, these are stocks, these are ETFs, mutual funds, they grow and they’re liquid, you can sell them within a day or so and they’ll settle. Then you’ve got-and that’s a long term investment, horizon, most accumulation people are going to be in that category. As you get to retirement, you need to have some growth and principal protection to draw your income. See, we’re diversifying by purpose, okay, these assets over here are going to pay income for the next five or ten or 15 or 20 years, whatever you want.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:12:48]
MIKE: Long term, you don’t need to touch it, great, you can have growth and liquidity, but then you need some principal protection and liquidity. That’s your checking account, your savings account, your money market, when life should happen. We’re going to talk more about that on unexpected costs later on in the show today, that retirees face, but when all is said and done most people, it seems like are trying to do growth and liquidity because they want all the growth that they can get and they want to quickly get out as soon as possible. There’s a lack of planning that’s happening for America’s retirees right now.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:13:25]
MIKE: And whenever the net market crashes next, it can be devastating for them because they’re breaking the second principle, and the first principle that governs proper retirement planning.
CAMERON: It’s almost as if, you know, that they want all three. Not understanding like Josh said, kind of the rules of the game. There has to be a better alternative than keeping your funds fully exposed to the market or sitting in cash in a money market, right? And that’s where our safer distributions plans really come into play for the clients.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:13:56]
CAMERON: They’re able to have principal guaranteed options that provide the principal guaranteed aspect but yet still have the growth.
MIKE: Absolutely, and thank you for bringing that up, that’s the third principle that governs proper retirement planning. Drawing, excuse me, use a distribution plan, not the pie chart guesser. See, the distribution plan is the very framework that allows you to have all three. Not all in one investment, you’ve got some assets over here for your emergency cash, you’ve got a group over here that’s mapped out for your income, and you’ve got a group over here for long term investments.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:14:27]
MIKE: Now, if you want to buy and hold that’s fine. If you want to do a dividend play that’s fine. Our research suggests that perhaps you’d want a two sided model which in our article that we’re releasing right now, we’re talking about the Yale endowment who uses these two sided models. They’re called absolute return models but they’re two sided models that are designed to make money in up or down markets. That’s a pretty powerful statement. Now, we’re not talking about that in depth on the show today, but if you do want to learn more about that you can go to deckerretirementplanning.com or if you’d like to come in and talk to a purebred fiduciary, one of our planners at Decker Retirement Planning, you can do so. If you’re 55 years or older and have at least 300,000 of assets saved up for retirement, we’d invite you to come in, you can call right now.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:15:10]
MIKE: 833-707-3030 and have an open conversation with a purebred fiduciary to talk about the principles that govern proper retirement planning and review your retirement plan to see if you’re doing it correct or not. Are you correctly transitioning from accumulation to distribution? Think about when you left your parents house when you were about 18 years old. How was that transition? You had a safety net, your parents took care of everything for the most part. I understand there’s some difficult situations, I want to be fair to those who had tough upbringings. But you transition from living with your parents to on your own.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:15:47]
MIKE: Some people transition well because they were prepared for it, some people did not. When you are leaving work and retiring that’s a difficult transition. Are you set up for that or are you not? We can talk about that as a math based, principle based firm for you this week. 833-707-3030, call now or you can go to Decker Retirement Planning, at the very bottom you can click get started, and let us know what you want to talk about. It can be the full Decker review, we can talk about a safer distribution plan. We can talk about a safer tax plan, social security. You let us know what you’d like to talk about and we’d be happy to give you fiduciary advice.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:16:25]
MIKE: Now, in speaking of a fiduciary here, I thought this was funny. So, my wife sees a nutritionist and is finishing her certification to be an integrative health coach. And so we talk all the time about nutrition. I’m an avid chef. And what’s so interesting is she gets in these nutritional groups to share ideas of what’s happening. And over and over again it seems like the people, at least, she’s talking with, will hold fast to a study that they believe in and believe it applies to everyone. Everyone needs to be a vegan, everyone needs to be on the keto diet. Everyone needs to be on Atkins.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:17:04]
MIKE: My father once told me when I was young, be wary of absolutes. The issue I have with a dietetic or dietitian standpoint of using absolutes is the bio-uniqueness or individuality we all have. My body operates differently than someone else’s. Sure, there are some parallels. But I’m going to be affected differently with what I bring into my body, and the evidence suggests that. I would be nervous to work with a nutritionist or a dietitian that tells all their clients the same thing.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:17:37]
MIKE: Now, that’s different than principles. The principle would be you’re going to be focused on eating what your body works with. What that is may change from person to person. In the finance world, there’s the idea that a fiduciary is like a dietitian because they should have the ability to recommend any food group, any dietetic habits, they can help alter your life. They have no dog in the fight as opposed to a butcher, who’s going to sell you meat.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:18:05]
MIKE: I’ve got no qualms against meat, I’ve got four barbecues for goodness sakes. I absolutely don’t have any qualms against meat. But the point being, getting your resources from an unbiased setting is the first step and that’s what a fiduciary is. However, many claim to be fiduciaries and some are, and we’ve had some other firms here in the local area that have said, we’re making the claim we’re the only fiduciaries. We are not. There are other fiduciaries out there, but there are good fiduciaries and there are fiduciaries that parrot it, whatever the most recent research is saying, and getting on the bandwagon and not checking it for you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:18:42]
MIKE: We’re a math-based, principle-based firm with two people on staff who do the research and the analytics for you. I don’t know another firm that goes to that extent that’s in the RIA space or in the fiduciary space like we are. So I would challenge that. I would say, of all the fiduciaries or dietitians looking out for your general health, how many of them have full time staff members that are taking an analytical look as a math-based, principle-based approach to your retirement, and how many of them are drinking the Kool-aid and selling you the product on the next big thing that was published?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:19:18]
MIKE: I would just caution you on that. Can we, Josh, Cameron, can we go back to the markets though in the buy and hold? I want to roll back in here.
CAMERON: Yeah, let’s touch base on that.
MIKE: The reason why I want to touch base on this is there’s a lot of articles talking about a crisis or a crash coming in the near horizon, and this was the most interesting take that I’ve seen in a while. This is from one of Goldman-Sachs’s alums, Raul Paul I think is how, Raul, I think is how you say his first name.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:19:44]
MIKE: But we’re coming into a period of illiquidity for equities. We’ve talked about this. Michael Burry has talked about this as well and whether they’re right or wrong, who’s to say? But what’s interesting about this is there’s three big issues that they’re addressing and why the next big meltdown may start this December. Now, I’m going to illustrate again, the first principle of retirement planning is draw income from principal guaranteed sources and the second one is diversify by purpose, not just by risk. If you follow those two principles, regardless of the third principle this should not scare you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:20:21]
MIKE: So if what I’m about to say makes you a little bit uneasy, that’s fine. I hope you call us and we can have a conversation to help ease these concerns. He says, and this is, Mr. Paul says. The first is the blackout period for companies, which hits around earnings times when their shares buy back stocks too slow. Second, he notes that this year has also seen problems with short term borrowing markets or repo markets that the federal reserve has been trying to tackle. We’ve got two issues here. One’s the company, one’s the fed, on how they’re managing the markets.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:20:57]
MIKE: Most people don’t understand that right now we have all time high corporate debts in the triple-B section. If they go down to double-B, there’s a lot of mutual funds or bond funds that will be required to sell them, a lot of pension funds and 401k and other massive amounts of assets that are being managed that will be required to sell them based on their compliance on their documents.
CAMERON: I think you had that backwards, double-B goes down to triple-B, right?
MIKE: No, triple-B, double-B, single-B.
CAMERON: All right, thanks.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:21:32]
MIKE: Yeah. And so when it comes down to the…When it comes down to a possible falling out of these bond funds or bonds or corporate bonds, or whatever the bonds are, are you aware of this? Does it make you feel uncomfortable? It shouldn’t. Because if you’re drawing income from principle guaranteed sources you can sail through whatever may happen. The second part, or the third part I should say, and this is the part I thought was most interesting, I have not seen this before so check this out. Americans born, and this is the third biggest issue.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:22:07]
MIKE: Americans born between the mid-1940s and the mid-1960s, they face the annual requirement, or the RMD at 70 and a half years old. That requirement is going to sell about five percent of their individual retirement accounts, loaded with stocks in some cases. If I think about Black Monday, which happened in 1987, there was a sell-off that happened just because of a happenstance that cascaded down. If we have a lot of retirees that decide to satisfy their RMD in December., that could be a pinprick that starts the contagion.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:22:50]
MIKE: Of another financial difficult or situation. Cameron, you handle all of the RMDs, or your team does, for all of our clients. Out of curiosity, how many of them satisfy them before December?
CAMERON: You know, only the ones who we’ve incorporated it into their income plan, in other words almost all of them. And this is pretty atypical in the industry, usually, you know, a letter is sent out by whatever company holds your qualified funds at age 70 and a half.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:23:20]
CAMERON: And later, and then another reminder letter may be sent out in the fall, but in a lot of clients’ cases it is a massive one time withdrawal at the end of the year. Now, in our safer distribution plans, we managed to incorporate that into your income streams throughout the year. And it’s a much smoother process for you, the taxes and the RMD gets taken out over the course of the year instead of right at the end and for some clients who don’t need the income, we’ve tailor fit that as well to where the net funds are actually reinvested back into your plan, net of the RMD.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:23:57]
CAMERON: And so in some cases yes, tax wise you take it as income, but you’re able to reinvest the net because you simply don’t need the income, and I do believe after, you know, working with RMDs for a few years, it’s an incredibly complex issue, it’s sure nice to have a team in your corner helping to calculate and knit that all together for you, and a lot of our clients are extremely appreciative of that service.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:24:21]
MIKE: Thank you. So check this out. He says the problem is the gap between this year and last year is huge. It’s like 50 percent increase in the amount of selling that has to be done. That’s a significant difference when it comes to the year-end sell off that could happen this year. He blames baby boomers selling for part of the meltdown for the stocks last year, even. Which was pretty drastic, now, it did recover, thank goodness, in January and February. But can we keep going? This bull market seems to get more and more tired as it keeps running on and on and on.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:24:54]
JOSH: So the premise you’re saying here is that there’s a lot more people who have turned 70 and a half compared to last year, and especially after we’ve had kind of an uptick in the markets earlier this year, we’re looking at a larger percentage that could essentially sell off, causing basically an emotional response in everybody else, to say oh, there’s a dip, everybody get out. That’s just going to cascade down. But Cameron, for you, in December I know you’re pretty busy in December trying to wrap up the year with clients and everything.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:25:25]
JOSH: I’m just curious, what do you think that’s going to cause for you? Is that going to make you be busier or do you think that’s just going to sail right through December?
CAMERON: You know, it’s interesting, there’s a lot of work that happens at the end of the year, not only required minimum distributions, but for younger and sometimes older clients, Roth conversions also have a December 31st deadline, which, if you’re pulling funds out of pre-tax IRA to put them into Roth, you’re essentially you know, liquidating a part of that pre-tax IRA as well.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:26:00]
CAMERON: And so there’s a lot of moves right at the end that…It is a fun process, but it is also a relief for me and my team when we pass that January 1st because it is an extremely high volume time of year-end requests around distributions. And so what you and Mike have been talking about as far as the general public having massive 401k or IRA brokerage accounts and needing to liquidate, maybe they hadn’t done the preparation and they are facing, okay, now I’ve got to draw out a huge portion as income. You know, what else are they going to do with it?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:26:39]
CAMERON: They don’t, you know, they’re just going to take it as income and drain out part of that account.
MIKE: Let me throw this out there. If all retirees were taking their income from it, and I’m using absolute here to illustrate a simple point, from a CD. Do you think a CD that becomes liquid and then satisfies an RMD for example or income is going to have much effect on the stock market? No. It won’t. And I’m not suggesting that we’re using CDs for all our clients. There’s about 10 different principal guaranteed sources that you can use in your retirement, but CD’s the most common one that most of us are going to understand.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:27:11]
MIKE: But if we all at the same time have to satisfy our RMDs and we all have stocks, bonds, these basically investments that are meant to be, if you’re buying and holding, you’re meant to keep buying and holding, but we all have to sell at the same time, it could trigger another sell off just like last year, and December is not the time regardless of your religion, Kwanzaa, Christmas, Hanukkah, there’s Thanksgiving, the general holiday season where it gets colder and you want to spend time with family, there’s New Years, families tend to gather in December. Markets crashing when family is gathering is not my ideal holiday.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:27:54]
MIKE: But if my income’s coming from a principal guaranteed source, I don’t worry. That’s the beauty. Principle one, never draw income from a fluctuating account or the principle states draw income from principle guaranteed sources. So you can sail through the market turbulence and not have to think twice. The second one, if you’re diversifying by purpose not just by risk, you’re good. We recommend 15 to 20 years of principle guaranteed income. We’re not recommending income annuities that you set and forget for life. That’s, in our opinion, a mathematical difficulty to get past because the average annuity we’re seeing is paying out about 1.82 percent a year.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:28:35]
MIKE: You can get that in a savings account. It’s just, and I know a lot of you listening right now may be saying, well, mine’s guaranteed to do six or seven percent. Come on in. We would love to have a call with you, with that company, whether it’s Allons or FNG or AIG or whoever it is, and Trans-America, and ask them what you’re actually getting on there. I have yet to see someone say that’s what I expected.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:29:03]
MIKE: It’s typically a shock on how these assets are actually being invested, and what your actual return on investment is.
JOSH: And if you do have one, don’t, you know, don’t feel bad, don’t feel guilty, don’t feel like, you know, you’ve done something detrimental and your retirement can never be repaired. We have so many unique cases and situations where clients come in with a variety of accounts and account types and we are able to help almost all of them put together a distribution plan based around that.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:29:35]
JOSH: And so don’t, you know, don’t give up, oh, no, now I can’t have a safe retirement. You know, there are just still options around that.
MIKE: Yeah, there’s no judgment on where you are now. We are here to help you proceed to the level that you need to be to enjoy a safer retirement. And that’s it, we’re here to help, not to criticize. There’s no sarcasm. There’s no judgment. There’s no [INAUDIBLE].
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:29:59]
MIKE: We’re here to present the research and the data as it is, make our recommendation, and then guide you and help you kind of like the Sherpa, helping you down the mountain. We want to be there to help you accomplish your retirement goals, and we do that with a math-based, principle-based approach. If this is something you want to talk about with one of our purebred fiduciaries, yes, math-based, principle-based dietitians, as we said before, call us. 833-707-3030. We would love to have a conversation with you, whether it’s in person or over the phone. Let us know what you prefer.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:30:31]
MIKE: But we’re here to help you. Not only get you the transparency that you deserve, but when you come in, we’re going to be able to address the three principles that govern proper retirement planning and how that relates to your current plan. We can show you a few paying points right off the bat, that may be significant should the markets do crash this December. Who’s to say, we don’t have a crystal ball, but we’re prepared for all the different options. We’re going to be able to go over your safer tax plan. Show you tax efficiencies, for those that have a million dollars or more, that is huge savings that we can do that’s proprietary to us.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:31:06]
MIKE: We figured it out, we’re not sharing it with other advisors but we are sharing it with all the clients that are coming in our door because it’s what’s best for them, and so much more. Call 833-707-3030 now, if you’d like to have a complementary visit with one of our purebred fiduciaries at Decker Retirement Planning. You can also do more research at deckerretirementplanning.com. And if you want a visit with us at that point, on the very bottom of the screen just click get started, fill out your information, we’ll call you within one business day and schedule that visit because we’re here for you and we want to be able to help you see clearly what your retirement could be.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:31:44]
MIKE: It’s a wonderful conversation, there’s nothing to be worried about because it’s, when you can see the reality, it’s an honest assessment as opposed to wishful thinking, and hope is not a retirement plan, and I personally believe that the pie chart guesser is a retirement plan built around hope. Let’s talk about some of the paying points, shall we? We’re going to transition into a new topic here. Some of the paying points, and this centers around the third principle that governs proper retirement planning, use a distribution plan, not a pie chart.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:32:13]
MIKE: Don’t play retirement roulette. There’s a lot of concern that we’ve noticed when people come in the door about budgeting for retirement and they want to know, okay, what should I expect when I retire? Most people think that they’re going to spend less money when the opposite is actually true. When you have more time on your hands, you tend to spend more money. You want to do things. Most people don’t retire and then sit and watch Netflix and Hulu all day. They want to be active, they have energy, they want to do things, they want to travel, they want to go abroad or even in town.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:32:48]
MIKE: We’ve got a client up in Washington who wants to start farming on his land. So, he’s out there having a ball, and he loves it. And that’s how it should be. That’s really how it should be when it comes to your retirement. So the question addressed is stealth expenses. Now, the society of actuaries did a great study in 2017 called Shocks and the Unexpected, an Important Factor in Retirement. This is a great…You can Google it, if you want, pull up the actual research, but what it says is many people are poorly prepared for unexpected expenses. Here are some of their findings.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:33:23]
MIKE: Major home repairs and upgrades. The biggest one I found is roofs and furnaces. Those are expensive. Heating and air conditioning, things can go sideways. If you have an older house, you might want to look at the plumbing, electrical, just make sure it’s up to par before you officially retire, just to make sure it’s all in tip top shape. Dental expenses. That’s a surprising one that a lot of people have. And we’ve actually written a few articles on how to receive more affordable dental care, instead of going through the main way, you can go to local universities of med students, dental students, they’re brilliant, they get what they’re doing.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:34:00]
MIKE: But they’re still in residency there, and you can get very cheap affordable dental procedures at a very affordable, very reasonable price. It’s quite nice, if you’re okay with that. And if you’re not, that’s fine, you don’t have to. The prescriptions and medication tend to go up the older we get. The more doctors seem to prescribe us medication to keep us going. This one, I thought was interesting. Drop in home value of 25 percent or more, affected a lot of people. Now, I call this into question and the reason why is your home should not be a part of your income.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:34:37]
MIKE: Reverse mortgages are typically a last ditch effort. So though it is sad that your home may drop 25 percent or more in value, but you shouldn’t be taking income from your home. That’s your nest egg. That’s your safety blanket. So any retirement planner who’s suggesting to pull income from your home, your very shelter, I just… Seems a bit risky. There’s illness and disability which creeps up on us, sudden loss of value of savings or more. This is emergency cash, part of the second principle. Going on Medicaid, family emergencies, loss in value of savings of ten percent or more was the other category.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:35:22]
MIKE: And a significant amount of people had that, and what’s interesting is all of these are addressed by the principles that govern proper retirement planning. The first principle, if you draw income from principal guaranteed sources, when the roof leaks, when the furnace goes out, when the water tank or water heater breaks, whatever it may be, you need a new filter, water filter, whatever it may be. You’ve got your emergency cash, you have it set aside if the market’s down, you don’t need to worry about taking a hit. It’s already set aside, you’re good to go.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:36:00]
MIKE: Isn’t that incredible? Second principle, diversifying by purpose. You’ve got your emergency cash to the side, you’ve got all the different assets, so you know if you need to take a dip in your savings for your emergency cash, you know how it’s going to be replenished and you have the planned flexibility to do so. Cameron, you’ve had, over the holidays you had two big calls of medical emergencies. One I can remember in particular because I took that call, of someone that needed, I think it was 30,000 over the Christmas holiday because their spouse had gone to the ER for an emergency and they had to pay for it. Do you remember that?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:36:34]
CAMERON: Yeah, that was, you know, December 26 or 27th of last year, and it was a call, the client was in a bit of a panic, and you know, because of the way their distribution plan had been set up, we were able to send them, I think it was, you know, 30k in two days. It was incredible, they were just…They were able to pay, you know, and able to then see, you know, what their income plan looked like, and because we had drawn from a combination of emergency cash and cash that they had, their income plan was hardly affected.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:37:12]
CAMERON: Things were able to sail on, practically as they were before, and you know, because of the way these plans are set up we know life happens, you know, we don’t get any incentive for setting up emergency cash other than fulfilling our fiduciary duty to you. And often you know, it’s a conversation of, I had to spend my emergency cash this year to pay for my roof, for the roof, I think, four or five times.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:37:39]
CAMERON: And then the conversation at the next annual review is excellent, how are we going to refill this? Because you know, what happened just this year, it may not be the roof but it could be something else the next year or five years down the road, or a car, you know, expenses go on even when you stop working, unfortunately. But with these safer distribution plans it can put your mind at ease a lot.
JOSH: It sound like in that regard sometimes saving had to go on as well in retirement.
CAMERON: Yeah, that’s exactly right, and you know, it’s interesting because clients are able to know, well, this is my monthly budget based on my safer distribution plan, you know.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:38:43]
CAMERON: Otherwise you’re looking at this massive pile of money thinking great, this is my retirement nest egg. How much can I pull out of it and still be okay for the next 30 years without a safer distribution plan. I mean, you’re just guessing, it’s pretty easy to you know, probably over-extend yourself and not have that emergency cash if all you’re looking at is a bunch of accounts fully at risk, right?
MIKE: Mm-hmm. Now, the biggest stealth expense that I have found, which was not even addressed in the research that I had read, but based on my experience is very prominent, is the bleeding heart. Now, I get a lot of resistance when I talk about this with clients so bear with me, Safer Retirement Radio listener, right now.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:39:23]
MIKE: The reason why is the bleeding heart is a tough one. The bleeding heart suggests that when your kids need more money, that they know you’re retired, they know you’re financially sound and in a good spot, that they can ask you for some money. Oh, I need help buying my first house. Oh, I need help paying off some credit card debt. I need help going through school, I need help going back to school, I need help with all these different situations.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:39:51]
MIKE: All with good intentions. And for those of you that have kids, you may love your kids and want to help out with this situation, the problem that lies here is did you plan to help your kids buy a house in your retirement assets? Let’s say you’re going to give away 50,000 dollars to one of your kids, or all of your kids. Is that a part of the plan? Are you expecting to be able to do that? If it’s not a part of the plan that’s a significant hit to your income and your retirement plan.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:40:24]
MIKE: If your kids ask for a little bit here, a little bit there, it has a significant drag on your retirement plan and when it comes to at least, this is now the psychological research and behavioral science. Your kids will love you even if you hold boundaries with civility. Hey, I wish you could help you but I can’t. They’re not going to disown you for that, or at least they shouldn’t. I’m should-ing right now and I recognize that but my point is holding boundaries with civility will cause them to respect you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:40:59]
MIKE: It will be fine, when the relationship comes, don’t be scared to lose a relationship because you need to take care of yourself. Just like on the airplane, they tell you to put the oxygen mask on yourself before you help other people put on that oxygen mask.
JOSH: You know, and every client situation is unique, there’s certain clients that have a target net monthly income that they’re looking for in retirement, they say, you know, this is all we need. If they do have some legacy funds set aside for inheritance and they say, okay, you know, in a healthy way, they discuss with their kids, this is part of your inheritance that I’m giving to you early.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:41:36]
JOSH: That’s… And caveat, it will not, you know, detrimentally affect my retirement, then that’s a different situation. But without the safer distribution plan, without knowing that, you know, income from other sources for the remainder of your life is set away, you can’t have that conversation. It has to be, no, I can’t compromise my future to help out your present. So a lot of it just does depend on the situation, and like you said, having healthy boundaries, either way.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:42:07]
MIKE: And if this is something that you want to talk about and set it up, when you follow the three principles that govern proper retirement planning you can legitimately say sorry kids, I can’t do it. It’s all mapped out. You know the consequences. If you were to do this, here’s the effect. Plain and simple. And if you want to have that conversation, if you’d like to have your own version of a safer distribution plan, and do a full Decker review, we would love to have you come in at no cost to you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:42:31]
MIKE: Must be 55 years or older and we ask that you have at least 300,000 of assets saved up for retirement as we’re here to quantify and plan those assets. If you don’t there’s not much value we can add. We’re here, and here’s what happens, just to walk you through the situation. When you call in we’ll gather your information or you can go to our website, deckerretirementplanning.com and click get started and it’ll come right to our email, and then we’ll reach out to you and schedule the time that’s convenient for you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:42:59]
MIKE: These visits are 90 minutes long, and when you come in what we first do is we want to get to know you and your background and your goals for retirement, we want to have that open conversation for a comfort level. Then what we do is we want to dive into the financial markets, the retirement, the storms ahead, we want to talk about the financial environment as it is. Bear-ish, bull-ish, it doesn’t matter, it’s just how things are right now. For example, retirees face a very difficult situation with a low interest rate environment.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:43:35]
MIKE: They have interest rates go up, bond funds lose money, with interest rates being this low, it’s hard to keep up with inflation. If you’re fully invested in quality bonds and in CDs. It’s just a tough environment. So we want to address it as it is, not as we wish it would be, and then present to you the math based principle based solutions that can be available. And at that point you decide if you want to proceed or not. You have the power to do whatever is best for you, and we want to make sure that you understand that. But when you come in you’re greeted by our office manager, you’re going to have a wonderful view and visit with one of our purebred fiduciary planners who are legally bound to do what’s in your best interests.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:44:16]
MIKE: And we have math-based, principle-based approaches to any recommendation that we would offer. It’s all for you. You can call 833-707-3030 right now. Claim your spot this week. Limited availability here, but call us. 833-707-3030. That’s 833-707-3030. Or you can go to deckerretirementplanning.com and at the very bottom you can just click the get started button. To my podcast listeners, this is a radio show, we put it on the podcast, so forgive me saying it a few times, but you know what, we’re here, we’re transparent, and we’re hoping you enjoy the content here.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:44:50]
MIKE: This is Safer Retirement Radio. We’ve got about ten or so minutes here. I want to talk about a particular client, Cameron, that you had mentioned to me earlier today. And it’s kind of a funny situation here. The comment was, just because I have enough funds saved up to stop working and retire, do I have to? It’s almost like he felt guilty that he could retire but didn’t really want to. Can you walk me through that story? That was a fun conversation.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:45:17]
CAMERON: You know, this story is not unique, you know, it’s part of the planning process with Decker Retirement. You’ll go through, you know, what is your, if you’re still working at that time, what is your anticipated retire date? You know, now that could mean you keep working and begin taking income from assets, it usually means you both stop working and begin taking income from assets. In several client situations though, you know, as we approach that time, my servicing group will reach out and say hey, you know, your plan at last that we’d updated it, has indicated that you’re going to retire next month. Is that still on board?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:45:56]
CAMERON: And for some clients they say oh, well, you know. I’ve got, you know, the money set up, I’ve got the plan set up. Do I have to? I’ll almost get this, you know, they’re asking us permission to keep working. We say, by all means. [LAUGH] You know, this is your retirement, this is, you know, this is what you worked for. Josh, do you have a comment?
JOSH: No, I think it just kind of goes back into the client you mentioned, Mike, who retired and then started farming. Some people just still have the energy, and whether they love what they do or they just love being busy, love working, that’s great.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:46:31]
CAMERON: Yeah, that’s exactly right. And so in this client situation they, you know, this had actually happened. It is a unique situation because I think they’d kicked it down the road, probably two or three times. They’d said, okay, okay, this date we’re going to retire. We’d get close. No, no, you know, we still love working, we still love being busy. You know, and so this day, and so, you know, it’d be a couple years later and a couple years later, we’d check in. But it’s just really interesting that they found that they thought they would love the idea of being retired a lot more than the reality of quitting their job.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:47:06]
CAMERON: And they love their jobs, and so not only were they able to you know, see the updated income plan to reflect their now new retire date, pushed out a few more years, you know. And who knows what they’ll say at that date, maybe they really will be able, be ready to, you know, pull the trigger. But if not, good on them, you know. They’re doing what they love in retirement. They’ve got more than enough for their income needs when they do retire, and then they’ve made some moves to set up a great legacy for their heirs.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:47:36]
MIKE: Some interesting points here is that the research suggests the markets crash every seven to eight years. The average retiree of a 30 year retirement’s going to experience around four market crashes. Right now the media, news and specialists are suggesting that most retirees retiring right now are going to enter into a bear market during their first phase of retirement, which can be detrimental to most people. This client understood that, and they said, you know what, I don’t want to all of a sudden decide I want to retire and then realize I can’t, I want to be in control of my destiny.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:48:09]
MIKE: They did the due diligence, they’re making, you know, they’re making money. Their investments are still set up, it’s not like we put them in cash and said, okay, hold on, guys. No, they’re invested, they’re progressing, and they’re in control. So whenever they decide to retire, it’s an incredibly smooth transition as opposed to okay, I want to retire, now what. Which is a very anxious conversation. We want to make sure we’re making good decisions, mindful decisions, calculated decisions.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:48:41]
MIKE: Math-based, principle-based decisions and the beautiful part about this is if the markets do tank in December or not, they don’t care.
CAMERON: You’d be amazed how many requests I get to change their retire date to their next birthday. I love it, because they’re planning a retirement party.
MIKE: [LAUGH]
CAMERON: You know, they may say some date and then, you know, after looking at their information I realize wow, that’s their birthday, or they’ll say it. You know, I want this to be on my birthday.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:49:11]
CAMERON: They recognize, this should be a happy transition, not one full of anxiety and that’s what a lot of our clients do experience, is that excitement of, this is simply a new phase of life.
JOSH: I love seeing how many clients retire and then immediately go on just a crazy trip, you know. We have a lot of them that we start working with where they basically give us all their information and say okay, good luck setting this up, I’m going on vacation, because they just retired.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:49:43]
JOSH: We had a couple that, they came into our office, they met with a planner for a couple months, they decided, okay, let’s do this safer distribution plan, we started putting everything in place. I had one call with them, and then they were gone for two months. And then they came back and were pretty much done setting it all up and they said, great, now we can start taking income. And I just love that, the excitement around that, being able to be excited for retirement rather than dreading it.
MIKE: Where did they go, out of curiosity? Do you remember?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:50:13]
CAMERON: You know, this one, they went on two trips back to back. The first one they were on a boat for about a month.
MIKE: Was that the transatlantic cruise?
CAMERON: No, it was their own boat.
MIKE: Their own boat? They sailed?
CAMERON: Themselves, yeah. I think that was the plan. I’m trying to remember. The plan was to be on a boat for about a month, going up and down, I think, the west coast. And then after that, they went, oh man, I can’t remember the exact place, but after that I think they went to see some of their kids.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:50:42]
CAMERON: But yeah, just back to back trips, they had it all planned out, retirement happened and they just said bye, we’re out of here. And just, we took care of everything while they were gone and when they got back everything was pretty much set up.
MIKE: I love it. It comes to mind, the RV group we’ve got up in Washington, there’s an RV club that we have and they just go around the nation, all the time. Having a great time. And they just know that their income is just coming each time, and if the markets crash it’s coming from principle guaranteed sources. So they don’t care.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:51:15]
MIKE: They’re good to go, and in all fairness too, there’s a two-sided model, the absolute return model, that we’ve implemented six different managers, and a fun situation where they’re designed to make money in an up or down market. I mean, collectively, they didn’t lose money in 2008. They didn’t make much money, but they didn’t lose any money in 2008. That’s a fun conversation to have for anyone that’s coming into our office this week.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:51:36]
MIKE: Because we…I just, it’s hard not to be biased in this situation, but we’ve experienced buy and hold and the ups and downs that buy and holds can have, and then to look at a two sided model and think gosh, why didn’t I know about this sooner? And there’s a reason why, but in this plan, this client here and their vacations, the beautiful part is they’ve incorporated before they needed to, all three principles that govern proper retirement planning.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:52:04]
MIKE: When they want to retire, they know they’re set up to draw income from principle guaranteed sources. Right now they’re quote unquote principle guaranteed sources, their employment, it’s fine. It’s great. And they can transition and have that same stability. They’ve diversified by purpose, not just by risk. So they have emergency cash set aside, should something happen. They have their income planned out for the next ten, 15 years. They have their two sided models for them. And I believe their 401k as well.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:52:33]
MIKE: That we can make suggestions on. We don’t manage 401ks but we can do our fiduciary responsibility and help people guide through their 401ks, as it’s stuck until you retire in most cases, unless you’re 59 and a half and then you can roll it over. In most cases without issue from the plan administrator, but there’s a lot of contingencies on that. And then the third one is they have a distribution plan. They’re following all three principles that govern proper retirement planning and Cameron, how much stress do they have with the volatility of the market we have right now with a looming bear market in front of us? Are they even worried?
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:53:09]
CAMERON: No, not at all. They’re just enjoying their employment, enjoying seeing their distribution plan updates every year, and that things continue to function as they were outlined, but knowing that there’s the flexibility built in that if they continue to, you know, want to have more life changes, it’s completely something that can be built into the plan.
MIKE: Now, there’s a process that goes into this. The process I mean, the planning process is first we start by understanding the environment and what your wants and needs are.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:53:40]
MIKE: Then we talk about what we call potential problems in retirement, we want to stress test your plan and then we want to talk about all the different options you have and slowly put it together. Second principle suggests that you need to not only know what you have but how to work with what you have. Josh, in your day to day, you experience this a lot. Some financial companies are extremely difficult to work with and it seems like it’s a surprise to the clients. We have about four minutes left, can you just in two minutes kind of sum up the importance of knowing not only what you have but who you’re working with so when you want to retire you understand that it’s like pulling teeth in some situations.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:54:22]
CAMERON: Oh yeah, definitely. I’ve been on a lot of calls with clients talking to their existing, wherever they have funds and in some cases where they used to have funds or were trying to just extract information, and a lot of times it’s hard to be on those calls when these companies tell them, oh no, you can’t do that, sorry, there’s nothing you can do here. And honestly when it comes to financial transactions, there’s some things that you can’t really reverse. Like, if you send taxes to Uncle Sam, you’re probably not getting those back.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:54:53]
CAMERON: But, for a lot of transactions there’s usually something we can do, if it gets put into an account that is not the best or if it’s stuck in some company that they don’t really like, there’s usually a way out. The hard part is knowing how to get from A to B. And that’s what we do, is we jump on the phone, hours on the phone sometimes with these companies, trying to figure out the loopholes, trying to figure out how to get from point A to point B. Basically just problem solving. Client says, this is where I’m at, this is where we need to be. And then we try to help them go through that process. And we do it with them, they don’t…Generally they don’t just hand it all over and we just take it from there.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:55:32]
CAMERON: It usually takes a little bit of back and forth and participation there, but there’s usually a way we can get them into whatever they needed or wanted to be in from A to B.
MIKE: We had a client, this was in 2017, that came on. And had I believe, it was a variable annuity within a trust, within their 401k.
CAMERON: Yeah, that one was a beast. [LAUGH]
MIKE: It took a year and a half to get that out and then put it into a retirement plan to where you could have access. Should he have needed out those funds, he would not have been able to get it.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:56:11]
MIKE: Just a response was taking around 30 days just for a step. I mean, it was like pulling teeth, no pun intended because he was a dentist.
CAMERON: [LAUGH]
MIKE: But these are very eye opening conversations, and so anyone listening right now, if you’re 55 or older, within five years of retirement or currently retired, and you haven’t done the due diligence, really combed a fine tooth comb, gone through the investments that you have, the liquidity restrictions that you have, and understand how your plan works holistically, I would invite you to come in and talk with one of our purebred fiduciaries.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:56:42]
MIKE: It’s at no cost to you. It’s a 2,000-dollar value, but it’s at no cost to you to come in and to speak with someone that’s legally bound to do what’s in your best interest and have it come from a math-based, principle-based standpoint. You can call 833-707-3030 now or go to deckerretirementplanning.com and click the button, get started right there on the bottom of the page. And we would love to visit with you in one of our offices in Kirkland, Seattle, San Francisco, Renton, Salt Lake, Lehi, up to you.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:57:12]
MIKE: Josh, Cameron, thank you so much for joining us on the show today.
CAMERON: Thanks for having us, Mike.
JOSH: Yeah, it’s been a pleasure, thanks.
MIKE: So, we’ll be here, same time, same place next week on the radio, but I do want to press that if you want to subscribe via podcast, iTunes, Google Play, wherever you get your podcasts, that we have specials that will be coming out very soon, and those will only be available to podcast listeners. But from the bottom of my heart, all you Safer Retirement Radio listeners, thanks for tuning in and being with us each week as we try and give you as best we can the transparency you deserve so you, your family, your loved ones, and everyone around you can all enjoy some of the most precious times of your life.
RR S3 E18 DO YOU BELIEVE THAT THOU SHALT BUY [00:57:47]
MIKE: And we call that a safer retirement. Thanks so much. We look forward to seeing you same time, same place next week. More information and transcripts are available at deckerretirementplanning.com. Thank you.
