A Full Blown Retirement Plan

June 16, 2023 00:27:27
A Full Blown Retirement Plan
Annuity Straight Talk
A Full Blown Retirement Plan

Jun 16 2023 | 00:27:27


Show Notes

In this insightful episode, Bryan Anderson, seasoned financial expert, exposes the often-overlooked realities of retirement planning.

Bryan draws from his extensive hands-on experience to illuminate aspects of financial planning that many Certified Financial Planners (CFPs) may gloss over, arguing that real-world expertise often outweighs the glamour of the CFP title.

Bryan outlines the essentials of creating a successful retirement plan, emphasizing the importance of flexibility, liquidity, and personalized strategy.


Listen in as Bryan goes beyond textbook advice, offering invaluable insights for a secure, prosperous retirement.

View Full Transcript

Episode Transcript

Speaker 1 00:00:05 This is annuity Straight talk. Since 2008, your host Brian Anderson has helped clients nationwide navigate the complex market for annuities. With Brian's assistance, hundreds of clients have achieved a profitable and secure retirement. I would know because Brian has answered many of my questions concerning annuities and retirement planning so that you can benefit as well. Let's get started. Here's Brian. Speaker 2 00:00:45 Hello and welcome everyone to the Annuity Straight Talk podcast episode number 92. My name is Brian Anderson, founder and creator of annuity straight talk.com. Those who have been around know that uh, those new to this that you need to understand. I've been doing this for 15 years or so, publishing information online that will help you understand retirement planning, retirement products, how best to achieve your goals in retirement. That is the objective of doing this and I've made it my lifelong mission. I enjoy it because they make a good living but not at the expense of others. Whether you are new or old, please subscribe or comment on any of your favorite podcast platforms or on YouTube. Share it with your friends because there's a lot of good information going off of what people tell me. There's more good comments than bad, but get the word out there because there's a lot of good information on this subject. So in episode 92, I'm gonna cover a full blown retirement plan. A gentleman I talked to a few weeks ago or a couple of months ago, to be honest with you where we started it, he sent me an email that was really good and it really highlighted all of the things you should be worried about in retirement. And so I'm gonna share my screen, talk to you about the beginnings of the newsletter that's gonna go out along with this. Speaker 2 00:02:08 So if you want to read through it, you can. The commentary's a bit different. There's a little more detail here, but here we go on the full-blown retirement plan. Everybody coming in here is looking for annuity information obviously, but a lot of times is that really like what you say, but I wanna work with a certified financial planner. We're gonna call it A C F P. Everybody knows what that is and I think it's because they assume that I am not A C F P and I'll, I'm not gonna go into the details why that's worth a separate podcast to pull that apart, but they don't think my services cover the gamut of retirement planning concerns. And it's not the truth because every time you make an annuity recommendation or if you teach someone how the annuity fits into their business, you have to take into account all of the other variables and it comes into every single part of the plan Speaker 2 00:03:04 And it covers certified financial planning. Now, I don't think the C F P is like a blanket authorization that oh yes, they're gonna tell me what's best for me. I've seen, I know a lot of them that are really good people. I've seen a lot of really good plans, I've seen a lot of really poor plans. So I think there's a subsection of those people that will say, I'm a fiduciary so just do what I say and that's not good enough for me. It's not how I expect anybody to do business with me. And you should never just take someone's word for it. You gotta do your research. So a few weeks ago I got an email from this guy and he said, these are the questions I essentially have right off the bat. I knew that I had a newsletter or podcast for almost every topic that he had, and you guys can see this email. What I did is put his questions in bold and I'll tighten it up before I posted the website. And I looked at it and I said, okay, holy crap. Well maybe I'm not a C F P. I guess I appeal to the independent-minded person. A lot of people who go through a lot of these newsletters or podcasts will come to the conclusion, Hey, this guy knows what he's doing. Yeah, I'm gonna trust him to help me figure this out. So I'm gonna share these questions and my responses to 'em plus the appropriate newsletters or podcasts is a little bit more than just a review of what I've covered. Speaker 2 00:04:30 And most of these are actually newsletters because I started doing the newsletter long before I did the podcast and I haven't gone back and covered the topics. If there's something you guys want to see, if anybody hears this and wants me to go into any more detail on a podcast, on a newsletter that has not been made into a podcast, let me know and I would be happy to do a 20, 30 minute deep dive into that specific topic because any of these could be expanded. That's why there's a newsletter for each of them. So as first comment that you can see here saying we wanna minimize market risk while maximizing guaranteed income potential because legacy planning isn't a primary concern at this point. As we are planning on passing on our property and physical assets to our children, not necessarily our financial assets, this underscores the importance of using annuities to generate income and retirement. It is the single best thing to use. Eliminate market volatility. If you don't need to use your financial assets for a legacy, you'll be able to more easily achieve maximum guaranteed cashflow on a monthly year. Annual basis. Speaker 2 00:05:47 Newsletter goes back a long time ago, the case for annuities in retirement portfolio it it shows you how guaranteed income is an enhancement over a traditional portfolio, stocks and bonds for generating income. And then just a few weeks ago, four or five or six annuities create a legacy. Talks about how using an annuity enhances the performance of your overall portfolio. These guys don't wanna leg leave a legacy, but the point of enhancing your overall portfolio is you can leave it a legacy. Or if you don't wanna do that, you can spend more money. If these guys wanna maximize income, then using an annuity will enhance growth and spending opportunities and everything you want to do in retirement. Okay, next one. How best to fund long-term care expenses but not forfeit the money. If long-term care isn't used, it seems as if long-term care insurance is losing favor. Speaker 2 00:06:49 So should we consider an annuity that is 77 0 2 be compliant? Why or why not? One of the biggest concerns I've heard from people is guys that are retiring now maybe had a parent who paid for long-term care for years and years, uh, passed away and never used it. The premiums were gone. They didn't want to use it, they didn't want to do the same thing and not leave money to their family. But the point is, it's not so much that long-term care is losing favor it, but it can be cost prohibitive. You don't start until you retire in your sixties or so. And again, back to that story, paying for it, maybe not even using it, never getting the money back. Long-term care annuities are one solution to that because you have the ability to maintain the asset and can change plans and use the money. Speaker 2 00:07:40 If you decide to spend it down several years from now, you buy a long-term care annuity, you get into your eighties, ah, hey, we didn't use this. Everything's fine. You still have the money there. You can use it for something else. You can take lifetime income from it or anything else. So there's a lot of different ways you can look at doing that. But the problem is uh, there is a cost. Life insurance is actually another really great asset to use for this. Maybe not for those who don't want, don't necessarily wanna put money up to leave a legacy, but life insurance can have accelerated death benefits for long-term care planning. This is all part of the process of evaluating products and planning for the best outcome the most. Insurance plus the easiest retirement. A lot of times I tell people there's no benefit without cost. Speaker 2 00:08:26 So if you wanna set up long-term care, you can use a long-term care policy, maybe very expensive in retirement, you can use a long-term care annuity or you can use a life insurance policy, any of those, you're gonna have to put money up for it. You're gonna have to set money up aside and not use it for a period of time to cover that insurance. And if you're serious about doing that, then you wanna look at where you get the most leverage out of the most care benefit for the money you put in. Life insurance is a really good tool. I haven't done a lot with that. A lot of people try to get me to sell that and I've talked about long-term care and it usually falls flat on my audience. I've stayed away from it just cuz nobody seems to be too interested in it. Speaker 2 00:09:12 Anyhow, one of the very first episode is I think episode five Annuities and Long-Term Care Asok. Ramji and I covered that from the very beginning. Get a good DI idea of it. The link is in the newsletter or you can look it up on the podcast website. That is a podcast. Next question, social security benefit planning. Uh, this one is very simple. My advice has always been to take it as soon as you can get it. Honest calculations. If you can understand how to do the math. If somebody gives you math that doesn't show taking it early as the best, they don't know how to do math or they're put in a variable like certain calculators that say, we're gonna assume you live to a hundred, most of us are not gonna live to a hundred. If you delay payments, it costs you money. You have to supplement that from you got, I always say you have to pull it out of another pocket. Speaker 2 00:10:04 So if it costs you to get more benefit, then you have to factor that in as well. When you do that, you'll find there's no mon monetary benefit to waiting for higher payments. You might be motivated to keep working in order to CRE increase the benefit, but once you retire you should apply for it right away. There used to be a lot of strategies for maximizing payments. So spousal like a spouse could claim spousal benefits and delay their own benefits till 70 and then swap to their own benefits and get more money. They've done away with all that stuff cause paying out too much money, those are all the things they're gonna do to try to shore up the social security system anyway. So there's not too many games you can play with it. If you're working, don't take it put you into bad tax situation, but if you are retired, take it when you can get it. Speaker 2 00:11:02 I've de detailed this in newsletters and podcasts for years. Last one's most recent is a podcast maximize social security. You can look it on, look at, look for that on the newsletter or podcast page, just search social security. You'll see everything I've written about it and you'll see how my consistent, my consistent recommendations over time stand up. So it's always the same. Next one is something I haven't done a lot on because it is what it's as long as you and your spouse have paid taxes for 10 years, then part A of medicare is covered. Part B and D require require premiums as those cover physician services and prescription drug for most s costs are relatively minor in the neighborhood of a couple hundred bucks, but it should be added to your retirement budget. That's only for part B and D. I think it adds up to about 200 bucks a month. Speaker 2 00:11:56 If you find yourself in an Irma situation I RM where combined taxable income for a couple is over 194,000, then you're gonna pay additional money. So there's a two year look back on Irma, those who know it, I Irma off the top of my head, forget what it means. I run into that situation more and more. Two, two year look back. So if you made that much money, I it's for a single person, it's 97,000 a couple's 1 94. If you make more than that, then they step it up based on how much you did make and you could have gotta pay extra four parts B and D, it can add up to five or $600 per month extra. Look back on the income for two years. So two years after you retire where you're not making as much money, then you're still gonna pay B and D premiums as if you were making that money. Speaker 2 00:12:54 One of my other clients found a solution to that. So I can fix that. If you have that issue, you can call me and I'll tell you what it is. I'm not gonna broadcast it here because it's so specific. If you run into that, don't worry about it. But anyway, Medicare expense planning plan to pay extra premiums. So healthcare expenses are what I would consider to be the biggest additional expense for those who retire before 65. Some employers will kick in medical benefits until 65 till Medicare cuts in. Other people have to plan and those premiums can seriously be a thousand, 1500, 2000 a month easily. Once you get to Medicare, it won't be as big a deal. Additional premiums for part B and D can be accounted for ahead of time and any care that involves deductibles or copays will be classified as discretionary income in your planning. Speaker 2 00:13:48 That's why it's important to keep a pool of cash handy for things that come outta nowhere, but it's easy to accomplish with a basic emergency fund. Okay, simple, straightforward. So tax minimization, Roth conversions, et cetera. After this steady distributions from a retirement account is the best way to project TA uh, taxes over time. Most people fall into the category where it's simply systematically draw the money out of your I R A stay in a tax bracket. You're probably fine if you've overs saved for retirement, that's not a bad thing. A lot of people that save a bunch of money, oh, I gotta pay taxes. Hey, you're blessed and you have a bunch of money and you did a really good job, pat yourself on the back and realize you gotta pay taxes. But if you pay it systematically over time it results in the least amount of taxes being paid over time as well. Speaker 2 00:14:38 I always ask people the Roth conversions, is your goal to ever pay taxes again or pay the least amount over time? 99% of 'em say we wanna pay the least over time, but the whole buzz about Roth conversions got people thinking, oh, we gotta get outta this. It gets you into converting lumps into a Roth that pushes you into a higher bracket than you would've been if you just take steady distributions. It's nearly impossible to maximize income from an IRA and do Roth conversions out of the same account or tax qualification For these guys, it's going to depend on a mix of qualified versus non-qualified assets. They didn't gimme the details. I don't know. One thing this guy wanted is, Hey, I heard you have somebody in Minnesota. I in fact do. I sent these questions to my colleague, a guy that I respect and I know can do a really good job on all of this stuff. Speaker 2 00:15:28 And when I sent these questions to him, he looked at me and said, wow, this guy really has it all covered. Anyway, back in 2019 I wrote a newsletter. I have not done a podcast on it yet. Does a really good job of explaining when a conversion to Roth works and when it doesn't. There's a couple of very specific examples unless you fit into one of those examples, I suggest it's better to take systematic distributions from your IRA and remain in the same tax bracket. Enjoy your retirement and do not worry about it. You're gonna pay taxes no matter what. Okay, next question was simple guaranteed income floor. And this is just, that's like wide open. It gives me a chance to expand on it, but if you establish a guaranteed income floor, it's the single most important thing you can do to set yourself up for a comfortable retirement. Speaker 2 00:16:15 If you don't ever have to worry about monthly income, everything else is gonna be easier. Do it correctly and efficiently. You got a bunch of money left over for every other planning objective, target, Medicare, long-term care legacy, all the stuff. Over the past 15 years, I've had to use several different strategies for setting up an income floor because rates kept dropping and the best option was always changing. Now we've got better rates. So I'm confident and guaranteed income product will give you the most benefit in most situations except for discretionary income. Some people need the income, some people want the income. Those are two very different things if you need it. Paying for groceries and lights and heat and all that stuff versus want, I wanna take a vacation, I wanna buy a new car. Those are things that happen at irregular intervals. That's discretionary income anyway. Speaker 2 00:17:10 We've got way better deals than guaranteed income products for the first time in the past year. The first time I've done it over the past 15, I'm recommending those in a lot of situations. Wrote it about this earlier this year. Guaranteed income is back. There's a newsletter end a podcast talking about how the math works and why it's a very good deal. That's a very specific case study about a very specific product and objective, but the idea is that for every situation we look at all the options don't give you a guaranteed income product unless that's absolutely the best. Okay, next one. Inflation protection planning. Should we consider purchasing an annuity product with increasing distribution? Social security benefits will provide some protection, but we may want more. I'm not a fan of inflation protected annuities. The cost for an equal payment stream up to 30% increase over an annuity that offers level payments. Speaker 2 00:18:05 I'm a fan of saving the money upfront and counting on growth and access to that asset to offset necessary income increase. And so it's a double win. You're able to have the additional money available for the other expenses you may need to cover in retirement. If you want 1500 bucks a month cost you X, but you say I want 1500 plus inflation, it's gonna cost you x plus 30%. I think you're better off keeping that 30% in your own pocket, investing it elsewhere and having it available for future planning changes. Everybody wants flexibility, liquidity. Nobody wants to give up control of their money. Don't spend the money on an inflation protected annuity that's covered in detail in a newsletter from 20 18 19. It's been a while. That could be a podcast. So if you wanna see a podcast, I'll do that in more detail. Annuities, inflation, hit the newsletter and click on it. Speaker 2 00:19:05 Okay, here's a general kind of an investment management financial planning question. He is thinking about subdividing holdings, not the full-blown bucket style planning, but he likes the idea of establishing some funds that are liquid but still have some earning potential, which is emergency money to cover spikes in income needs or unexpected expenses. Wants to use the largest percentage of his holdings to guarantee income so they can sleep at night, not have to worry about it, wake up in the morning, live their lives, money shows up every month. It's super easy and very worthwhile with good rates. Then using some holdings for long-term growth but still having access to the asset underscores and completely summarizes the need for a good financial plan in retirement. And I hope you guys with these comments will realize how easy it is. Everyone needs guaranteed income, an emergency fund for unexpected expenses and additional investments that allow for future planning changes. Speaker 2 00:20:07 Guaranteed income is a simple matter of deciding how much you would like and finding the most efficient way to produce it. Emergency funds are a personal matter because everyone will throw out a different number. Some people say, ah, just five grand in the checking account. I'm good. We don't spend a lot of money. Some people say, oh, I gotta have a hundred thousand. Whatever makes you feel comfortable. That's your emergency fund. You set that aside. Before you do the rest of the stuff, you and your spouse need to agree on how much should be set aside so that you don't have to worry about anything unexpected that might come up. Different lifestyles will dictate different numbers. Additional investments are a personal matter as well. Some wanna be conservative while others will take some risks and go for top line growth. That's more of the legacy type people or aggressive inflation adjustments. Speaker 2 00:20:54 It's not all or nothing by any means, but a qualified investment manager can help you figure it out. I do that stuff all the time. And to cap it off, this is something he actually put this first and I moved it around to the end cause I thought it was the best at the end. What documents need creation, reviewing, updating proper titles payable on death signatures, beneficiary designations, insurance policies, power of attorney will, will or trust, medical directives, et cetera. So this is what ties it all together. Puts a bow around your financial plan. The first thing I can tell you, no matter how you use it or how you get an attorney involved, make a master list of all assets. Everything from your annuities to your investment accounts, emergency bank accounts and physical assets like real estate, precious metals, collectibles, and anything like that. Speaker 2 00:21:50 Include contact info for any advisor who can assist with each account. For every one of my clients to set this up, if they're really talking about that, I always say, listen, put my number down the website. Give this. I had a couple of people who reach out to their beneficiaries. It's the kids. Most of the time something happens, call this guy, he's gonna help you with this part of it and I can make things a whole lot easier. I think I told someone's kids last year, I said, I sent him an email. I said, listen, I know you guys are busy and you're young and you don't understand this, but call me now. Let's say hi and we'll BS for a few minutes. A few minutes now is gonna make sure everything's way easier down the road and that's gonna be 20, 30 years from now hopefully. Speaker 2 00:22:36 But make that master list and add numbers for people who are qualified to assist with those accounts. I think the best thing to do is set up a living trust that dictates your wishes with all assets. If you are no longer able to preside over it, you can do it with a will, but that's gotta be read by a judge. That's gotta go through probate a trust avoids that has more power and will make things much more convenient for you and your heirs. I helped my dad set up a trust after my mom passed away and my brother and I are the co-trustees of that. When the day comes where we have to do that, and I hope it's a long ways away cause I love my dad, my brother and I can walk into any bank, any institution, we can change title in the real estate. Speaker 2 00:23:25 We can do what we need to. We can go do all of that because I had him set it up perfectly so it's easy for us to do. I could do it, but I recommended having another person so nobody questions me. I've got a big family, you don't wanna do that. He wanted to have all the kids on. I said, that's exactly why we're doing it. So they're not all on it. Find one you can trust, maybe two, whoever it's a trust can be named the beneficiary of all of your financial accounts, brokerage accounts, IRAs, annuities, life insurance policies, and it will also define a protocol of situations involving power attorney or medical directives. If it gets to a point where you're incapacitated but you're not dead. Relatively simple process organizes everything for your family. There's one document they reference. Now I will tell you that you can do this. Speaker 2 00:24:13 You're gonna pay an attorney a few thousand bucks to do this. It's well worth it if you want that. My dad and I went to LegalZoom. I'm not getting paid by them. I'm just saying I knew what to look for. I knew how to set things up. His was relatively simple. Some bank accounts, couple of investments and primarily real estate. And then his personal belongings. If you know what you're looking for and you have somebody that can walk you through that and do it or you wanna do a little bit of research as you do it, it's just a process you work through for a few hundred bucks. You get a trust that's set up and direct it. So anyway, aside from a couple of things these guys have that I didn't think were relevant to most people, this list essentially covers a full-blown retirement plan. Speaker 2 00:24:58 It's not that difficult. You work through it one piece at a time and if you're like this guy, he's gonna work with my buddy in Minnesota, they're gonna figure it out. I know they will because he came with a clear set of instructions. This is what I want to know how to do. In some cases, I've sat with a husband and wife who look at a list like this and say, and each of them will say, this is more important. But no, I think this is more important. I'll put this on a list then. This is good exercise to do with your spouse. If you want to pick the seven or eight things that you think are important, retirement, make two lists. You take one and your wife takes one, or your husband, whoever it is, and each of you ranks those seven items in order of importance. Speaker 2 00:25:42 I've done that probably a few dozen times with people. Don't do it all the time, but I can honestly tell you that every single time I've done it, the rankings of those issues are different for each member of the couple. So you gotta get on the same page with your spouse, goes back to husbands, wives and annuities back when I was in Kansas. But it's a good list and go ahead and tell me you'd rather I have initials from some third party organization that wants a bunch of money from me. That's fine. If you want that, great. I hope the guy knows what he's doing. Go check out that newsletter. I can't believe a c fp designed this plan. That's not all, it's not all glamorous. It's not always the best. Anyhow, so guys, thank you so much for joining me. This has been episode number 92, full-Blown Retirement Plan. Speaker 2 00:26:35 Again, subscribe, comment, or share from any of your favorite podcast platforms or on YouTube. You can get ahold of me at (800) 438-5121. That's how you call me, rings to my cell phone. It's right here. If I'm outta service, leave a message. I will get back to you as soon as I can. If you want a guaranteed time slot, go to annuity straight talk.com, click the upper right corner of any page in the site, says schedule a call and I'll give you a ring. It's as simple as that. I look forward to helping you. I'm here for you. I will be back next week with episode 93. Not sure what it is, but I'll pick something good and share it with you guys in a week or so. Thank you so much for your time. You guys have a great day and I'll talk to you soon. Okay, bye.

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