Episode Transcript
[00:00:00] Hello and welcome everybody to the Annuity Straight Talk podcast. Episode number 195. Closing in on 200. Got to think of a special topic for the second century mark. My name is Brian Andersen, founder and creator of Annuitiestraighttalk.com. please like subscribe or comment on any of your favorite podcast platforms or on YouTube. Share your thoughts with me. Comments criticisms I like it always gives me ideas. Past few weeks, you the viewer, you the client consumer gave me all the ideas for this. I'm going to talk about your experiences and probably try to give a little bit advice that helps along the way. Episode 195 Helping people avoid terrible Annuity Advice Going to share my screen written, stay on topic. Right. So after all this and closing on two 195 episodes, let's say it that way. I am not afraid to say that this is probably the best retirement planning website available. So there's technical information along with real case studies and stories that show you what's relevant and what's not. There's good information elsewhere. A lot of it comes in like dictionary style terms, book reports, encyclopedia type stuff. I try to bring it to a personal level. I'm proud of everything I've done. I've worked really hard at it and made it as conversational as possible so you can understand it in terms of what's important to you. But on your behalf made things as easy as possible. There's a lot of data out here and most people will find the benefit of four or five, maybe six podcasts relevant to their concerns. And some people are entertained by the other ones. That's great. But if you need help finding the right ones, I would be happy to do it. So if you use this thing the right way, you are going to empower yourself to make the highest quality decisions for your retirement based on reliable information without bias. I prefer annuities. I dictate and clearly define the terms in which they are not the best solution and I will tell you when they are doesn't mean you got to do it. That's just the truth. You are free to take your time making these important decisions. We do not rush anyone into the process. Some people are more suited for making quick decisions and from meeting them to getting something put in place, it's two, three weeks, maybe a month. I've had a guy that took over five years from the first time I met him until he finally committed to something and that's perfectly fine. What I know is is pretty common in this industry is a lot of times I meet people who are being rushed through the process. Oh, you got to get this bonus before it drops. Oh, the Fed's going to make a decision in a couple of weeks. You better get on it. Rates are going to drop. It's like a scare tactic or it's ignorance. Like the Fed is not going to immediately affect rates. Now what they do might affect rates, but there's going to be a shorter term fallout. Don't jump to do something because of the Fed. That's gonna be an episode coming up. We're gonna talk about what happens after the fact. I think would be important to show people that it doesn't really change if you rush through the process. It's either because the advisor just wants to make the sale or they read something from you that suggests you might need to make a quick decision. If they jump on the fact, if they prey on your weakness, that is not a good thing. In both cases, there's a high likelihood of getting something that's not gonna work optimally for your retirement. So last week I gave you an example of the former where guy wants to make a quick sale, doesn't disclose everything. And I'm going to talk about the latter this week where it's somebody who might, because of their situation, might need to make a quick decision. And both of these couples have a short term option that will buy them time to consider all possibilities. So the couple I'm going to talk about today is up against a deadline. One person has an esop. And it's common that these employer plans have a short window of time where they can move the money out of it. An inexperienced advisor will use this deadline to push them toward a long term commitment. So they had talked with some other advisors and they all did just that. Hey, your window opens up on Friday. You got 30 days. Let me tell you where you're going to put it. And then each of them tried to get them to immediately move the money to the place where the advisor would have control over managed money, maybe an annuity sale. Whoever it was, when we first talked, I got the idea that they felt some sort of pressure to get things done quickly.
[00:03:42] All of those advisors missed a very simple step that would taken the pressure away from the situation and given them time. Now, I didn't ask what any of the other advisors had recommended because I already knew it was grounded more in greed for a quick close than it was based on the couple's needs. They didn't need to do anything quickly. A few questions in I could see that an Income plan was probably the first major issue they want to deal with. Really the only immediate need they'd have. But otherwise there was a bit of indecision as to how the money would be invested going forward. So they need to take their time and understand the various options. Risk tolerances. Do you want some in the market market? Do you want to protect it? How do you want to do it? So an esop, an employee stock option program, holds the money in company stock. In a private company. It's not like a 401k that's got oh, blended portfolio worth 60% equities, 40% bonds. There's no investment portfolio to match, so you can't work with that framework. Someone who has one of these is the majority of their retirement. They're really good plans, but they got to start from scratch and build something on their own. You don't do that overnight, you don't do that with a 30 day deadline. So the younger person is delaying Social Security for a few more years. The biggest gap in income comes at the beginning. After both people collect their Social Security payment. Their long term income gap is a thousand bucks a month. They got plenty of money to do it, no need to worry and no reason to hedge any type of risk. They can take risk if they want, they don't have to if they don't want to. They have all the options at their disposal, but we have to deal with that deadline first. If they engage me in further discussions, this will make a good case study. I can share the details of that. It's going to be fun to walk some people through the process. Whether it's them or someone else, I'll get the opportunity. Maybe I don't ever talk to them again. I don't know. So the thing that everybody else missed, whether out of greed or ignorance, but let's give them the benefit of the doubt and just assume that those guys aren't really all that smart. So an ESOP is pre tax, kind of like a company pension without the income benefit. All they have to do before the deadline is open up a traditional IRA and transfer the funds there first. Everybody else is trying to rush them into an investment plan which would have included an IRA as well. Hey, maybe you can move it to this IRA and put it in a money market fund and let's talk through your concerns, your goals, your risk tolerance and do all that stuff first. Nope, nobody said that simple, easy. So I told them, after that window opens up, first thing, go to Schwab, start an ira, transfer it over there they'd have all the time in the world to educate themselves and decide together what they like best. And I'm really surprised nobody else told them what was possible. I prefer to build the relationship because that's an integral part of long term planning. Work on that first. Build a little bit of trust and open lines of communication. Get a feel for each other. So considering the amount of money at play, I can think of a lot of different sales pitches these guys would get and all of them could probably be justified. So if they need a few thousand a month for a few years till Social Security starts, I know guys that would try to sell them an annuity that pays $3,000 a month. But after Social Security starts, a lot of that cash flow isn't needed. Is that going to affect their taxes negatively? Maybe it's a short term problem. Guys will put a long term solution on it or they're going to have an investment manager tell them, ah, you don't need an annuity at all. You're going to get more growth out of the market. Either one of those paths could be justified, sure, but are they the best? Neither one of them is optimal. Some middle ground is probably the best, but it doesn't take into account what they want. I don't even really know what they want or what they're leaning toward. Just trying to help them out, say, hey, cool, look how much time I just gave you. Getting into a hurry only increases the chance of making a mistake. Sometimes we have to do it, but most of the time there's a simpler middle ground. Last week a couple found an intermediate safety inside a money market fund in their 401ks and avoided a long term commitment that they didn't understand. This week it's a couple can do something similar with an easy transfer that provides much more time to figure things out. When I tell you it's simple, that was really simple for both of these couples. I'm trying to help you avoid terrible advice. If someone makes you think you're in a hurry, call me. I'll probably find a way where you don't have to be in a hurry. And two times in a row, two for two on this one. Helping you avoid terrible advice is pretty easy. Get in touch with me. If you got somebody putting the pinch on you, I will help you out and probably tell you how simple and easy it is. That's what I'm here to do. Make it better for everyone that participates, whether I do business or not. This has been episode number 195. Like subscribe or comment on any of your favorite podcast platforms or on YouTube. It's September, middle of elk hunting season. I'm out in the mountains enjoying the cool mornings and warm fall afternoon. Excited about what's to come, but staying productive the whole way. Appreciate you guys joining me. I will be back next week with a brand new episode 196. Going to change subjects unless something pops up. I got to do more about advice, but terrible annuity advice is all over the place. There's some good guys out there. Take your time and find one of them. I'm here if you need my help. Thanks so much for joining me guys. I will see you next week for episode 196. Okay, bye.
