Transcript
Speaker: Hi, welcome to the Future of Finance podcast. I'm Marissa Wood with Union Financial Services. And today I'm sitting down talking with my business partner, Lisa Green, who has been in the business for almost 20 years, helping clients achieve the retirement of their dreams.
Speaker: And today the topic that we're going to discuss is the number one fear in retirement and how we help our clients combat that fear with some investment strategies. So welcome, Lisa. Hi, Marissa. It's great to be here.
Speaker: Thanks for joining. is exciting. Yeah. I'm happy to share this information. Yeah. And so when we were talking about, you know, having this podcast, and I know you were little hesitant at first, but course we were excited to be able to talk about some of the strategies that we use with our clients, spread some education, have it in an accessible form that people can watch and listen to on their own, because it's important. It's so true. And and I am excited to to spread the word.
Speaker: i love teaching people about the investments that are available to them. i love being able to help people prepare for retirement. And what what a great way to do it. I'm excited. Yeah.
Speaker: So let's address the elephant in the room. What is the number one fear in retirement? Number one fear in retirement is running out of money. That is a true fear, and it and it really has a grip on people that just retire or are preparing to retire, and they are so afraid to do all the things that they dreamt of doing because they don't know if they're going to run out of money.
Speaker: Yeah, especially as people are living longer nowadays. You don't want to run out of money before you run out of life, right? So true. Now, when we're working, we're getting those weekly, biweekly paychecks.
Speaker: And then imagine that just stops. And you have Social Security. But as we know, that's not enough to live on. So when we talk to people about retiring, they say, how is this money going to last my entire life?
Speaker: Yeah. Yeah. And that's definitely something that, you know, I've learned through you that you know, pretty much any financial advisor can help you get through that accumulation phase where you're just putting money away, saving it, helping it grow. But then what about when you get to that distribution phase?
Speaker: That's where the real strategies need to come in so that you know yeah this is you your lump sum of money. You're never going to make another dollar in your life. How does this sustain you so that you can do all the things that you said you wanted to do? Right. um you know and i have i've learned a lot through you over the years because You are closer to that you know retiree age. Not that you're ever going to retire because- No, I won't. I won't. You're doing this forever.
Speaker: ah But you have more of a sense of what these people are feeling. I absolutely do. I absolutely do. and And I watched my parents struggle with things like, how am I going to make this money last?
Speaker: So being independent advisors as we are, we have access to investments that That will provide you with lifetime income.
Speaker: And that is income that you can never outlive. Imagine that. yeah Imagine putting your nest egg, whether it's a 401k or whatever you have saved, and having that self-directed pension.
Speaker: It's exactly what it becomes. And then you do have that paycheck that you're so accustomed to. All right. Well, yeah we will definitely get more into that strategy in a bit. So what we're going to do is we're going to have a conversation about the four strategies that we use with our clients to help them never run out of money.
Speaker: ah And so that first strategy that I wanted to talk to you a little bit more about is adding a level of protection. you know That's step number one usually when it comes to people that are within, i would say, five-year mark of retiring or they are retired, adding that level of protection.
Speaker: And you know what do we mean by that? So we have investments that are available to us that actually do grow globally. Along with the market, they do mirror what the market is doing, but you can never suffer a loss. You're protected from any loss.
Speaker: Now, when you're in retirement, you don't have time on your side to let your investment grow back to what it was you know a few years ago. You really don't have that time horizon there.
Speaker: So we need to be able to protect what we've saved while still letting that money grow. Yeah, because the crazy thing is is that you know if you experience a 20% loss in the market, you know we ask people sometimes, what return do you need to get back even, to get back where you started from? And most people say, oh, 20%. Well, no, that's not true.
Speaker: $100,000 loses 20%. Now have $80,000. need more 20% to to that $100,000. So true. And that's problem retirement because – you need more than twenty percent to get back to that hundred so true and that's the problem in retirement because you know youre You're going to compound that loss with a withdrawal so that you could pay your mortgage and your bills.
Speaker: And now you're really in a bad position because you need a crazy high rate of return. 34? Yeah, and that's, I guess, what it is. um And so when we speak to our clients about adding that level of protection, one of the strategies we use is a fixed index annuity, which is protected by the claims paying ability of the insurance carrier.
Speaker: And what we're doing is we're putting a floor, 0% floor, so that you know they can earn when the market is doing well. But then if the market has a downturn, their principle just stays level. They're not suffering that loss. And isn't that great?
Speaker: Yeah. And I will tell you that so many people that we meet with, they have no idea that an investment like this exists. So we are happy to share look, you can you can absolutely protect your money in retirement.
Speaker: And they're thrilled. they They had no idea. They just knew about their 401k. It would go up, it would go down. And now if we can show them a way where we they can still capture gains,
Speaker: but never suffer a loss, that's a very, very big benefit in retirement. Absolutely. Yeah. So that really is, you know, step one, protecting a portion. And then step two would be adding a stream of lifetime income, which I know is something that we're both super passionate about. And so tell me a little bit more about how you've seen lifetime income impact your clients over the years? so So when I've met with multiple, multiple clients, they always say to me, what am I going to do now? what am i How am I going know if I can take that vacation, if I can go out to dinner three times a week?
Speaker: I don't know what to do. All I knew was working, saving, accumulating. Now I'm retired with this lump sum of money, And I'm afraid to touch it.
Speaker: So when we can show a person, you can have that check. You can have that... ball of money where you wanted to go on vacation and you wanted to buy a new car. Here is this lump sum of money that is going to be coming in every month for as long as you live.
Speaker: Never will you outlive this money. It will consistently come As a paycheck, monthly, quarterly, however you'd like it. And these companies offer amazing strategies for you to have that lifetime income, for you to be able to enjoy retirement and do everything you wanted to do.
Speaker: And so when we say lifetime income, is that until the account value goes to zero? It is until that account owner passes away. Lifetime income will last the entire life of that person, even if that account value is depleted.
Speaker: You will still continue to get those paychecks. And I know people have said, well, that seems too good to be true. Yeah, it it does, especially if people live really long. Right. Well, and longevity is is something that's happening all the time now.
Speaker: But now what happens if, because I know we do meet with some people that do tell us, well, I don't think I'm going to live long. you know, that seems to be something that we do hear more often than not. I don't know why people think that they're not going to live long. I know, whether it's their family. yeah it's But people do say that. And so what happens, you know, if they...
Speaker: unfortunately die after only a couple years of taking these lifetime income payments. Well, there's a death benefit then. There's going to be money left in that account, and the death benefit gets paid out to their beneficiaries.
Speaker: So they can enjoy those weekly paychecks, monthly paychecks, and then unfortunately, if they pass away, Their beneficiaries will get that lump sum, whatever may be left. Okay.
Speaker: All right. So then, you know, even if someone doesn't think they're going to live long, it's still worth having a conversation and maybe having one of these because what if they do live long? Exactly. that We don't have that crystal ball.
Speaker: Okay. Yeah, that is great. It's a great investment. I know pensions are becoming few and far between now. And, you know, Social Security is not enough.
Speaker: No. And so no having lifetime income plus Social Security, yeah, I could see how that would help someone travel And there are a few different types of of lifetime income.
Speaker: Because we have access to countless investments, the lifetime income – um It doesn't have to be a set steady stream. it can actually There are are some companies that like to offer you a higher payout in the very beginning of retirement while you're still younger and able to maybe do more things than you would later in your retirement. So if you wanted a higher payout in the beginning of retirement, because people do tend to first few years of retirement, they don't.
Speaker: Buy that boat maybe. They go golfing three times a week. They do a lot more than maybe later in retirement. So there's a lot of different options. There are customization ways that that can suit that person's lifestyle.
Speaker: Okay. Yeah, I mean, that's great. It's a great conversation to have to people, you know, that are just retiring. They had no idea that they could do that. so so I mean, I know you've changed a lot of our clients' lives. Mm-hmm.
Speaker: They tell me that. Yeah. And they send you pictures from vacations now and say, well, this was, so you know, this vacation was paid for by my lifetime income payment. and And how cool is that? It's an amazing gift that that we can share with people that you can enjoy the retirement you dreamed about.
Speaker: You, all of your hard work that you did all those years, all of that money that you saved can give you the retirement you dreamed of. Without the fear of running out of money.
Speaker: Yeah. You need to be able to sleep at night because what's the point of having accumulated a ton of assets if it's keeping you up at night? Right. Are you just going to leave it to your kids or, you know, you want to be able to enjoy it. Your kids want you to be able to enjoy it. Sure. Yeah. That is one of the amazing things about our job.
Speaker: It really, it truly is. Yeah. So protecting a portion of your assets, creating lifetime income, and then, you know, another strategy that we use to help people not run out of money is preparing for those extended health care costs.
Speaker: That is a huge fear of people these days because we see that we are living longer. And, you know, what that means is that our body is going to probably start failing us a little bit towards the end of our life. And that gets very costly, whether it be, you know, ah facility that takes care of us or home health care, AIDS assistance, paying someone to even just help with daily tasks,
Speaker: That is a huge cost. And oh, my gosh, can that implode a retirement plan if you don't have something in place? That's right. um So can you tell me, first of all, tell me about what made you so passionate in this? Do you have a client's story? And of course, don't use their name. Or do you have a personal experience? So Yeah.
Speaker: um My mother aged and she was by herself. My father passed away when he was still young. And as my mother aged, she was not able to take care of herself.
Speaker: She was not able to do all the things that she needed to do for everyday life. My family and i we put together a few, it seems like a staff of people that that helped her be able to age in place and be able to have some comfort in life.
Speaker: Unfortunately, we had to go through all of her resources, all of her investments, a lot ah ah lot of our personal money in order to keep her where she wanted to be.
Speaker: And i saw firsthand how expensive it was and how draining it was on everybody. It doesn't just, it doesn't just affect the person that needs care.
Speaker: It's the entire family. It's the friends. It affects everyone, whether it's physically, mentally, financially, of course. So, and this was years ago before a lot of these types of investments were available to us.
Speaker: I also have a friend that, um I saw once and and I ran into her and I said, oh, how are you? and she said, oh, I'm not doing so well. And I said, what's wrong? I thought there was something wrong with her.
Speaker: And she said, well, my mom had a stroke and I've had to quit my job. My mom moved in with me. I have been her caretaker 24 hours a day for while.
Speaker: for at least two years now. And she said, I am physically, mentally, emotionally, financially drained. She said, my life is so different.
Speaker: And I said, I'm sorry, what can I do to help you? And she said, there's nothing that anybody can do. I have to do it myself. So I knew that she had worked in an office for at least 35 years.
Speaker: And I asked her about her 401K. I said, didn't you have plan work? And said, I plan with work and she said i i did And I said, well, let's have a conversation so that you, your kids, don't have to do what you are doing.
Speaker: She said, well, my plan is I'll just move into my daughter's extra bedroom and and I'll sit there. I'll have a nice recliner, a mini fridge, a TV with a remote. And that's my plan. I'm going to just tell her, you go on your way over the weekend. You take the kids to Disney and I'll be fine here.
Speaker: And I said, would you do that to your mom? Yeah. And she said, no. I even had to get somebody to to sit with her while, you know, I just came out to go shopping for a couple hours. Wow.
Speaker: So I said, well that's not a plan, is it? And she said, no. Yeah. It's not a good plan, but what can I do? So. I can only imagine how many people have the exact same plan. Well, we'll just figure Just keep me in the room. Yeah.
Speaker: Go on your way. Yeah. But the plan that we provided her with is Let's go back to the lifetime income investment that we just had a conversation about.
Speaker: That lifetime income investment has additional features if needed for extended care. Now, this is a game changer. Wow.
Speaker: The way it works is if you are taking lifetime income, like we discussed, monthly paychecks, self-directed pension. If you're taking that monthly paycheck and you need extended care, that paycheck will double for up to five years if you ever need care.
Speaker: So let's say, i don't know, you're taking $10,000 a month in income. That will truly become $20,000. That will double. That's incredible. $20,000 for up to five years if care is needed.
Speaker: It is life-changing money if you ever need a care. Paid indemnity to you or paid to do you have to be in a home? there's a couple different There's a couple different investments. that Most of them pay directly to the client. Okay. Okay.
Speaker: There are ones that will pay to a facility if that's the route you choose to go. okay Most people would like to age in place in their home. But to know that you have that peace of mind, that you won't be that burden. sure You don't have to be. You can direct your own care or your loved one can and have the finances and the resources to pay for it.
Speaker: It's an amazing gift, and i have given that gift to my family. yeah um It's truly, truly a life-changing benefit that you can have for yourself, and it is very, very simple to do. Wow.
Speaker: Yeah, and I mean even if – because I know a lot of times people will feel like hopeless almost because you know they say, well, it's not going to be enough money regardless. It's just – it's not going to be enough to pay for that care. Okay, but it's better than nothing. Exactly. you know Why not at least increase your income and afford – part of that care or you know you might be able to afford paying a retired nurse or you know some type of home health care something is better than nothing always um and we always do tell people if you do not have something with lifetime income in your portfolio you're missing out now if you do not have lifetime income with extended care features
Speaker: you are truly missing out because you can have that security, that peace of mind. And do you usually recommend that both spouses have individual policies?
Speaker: Yes. Okay. Because they can activate the healthcare feature at... Different times depending on when they need it. Is that the mindset on having two separate policies? Yes. and And if John Smith opened up a policy like this, well, that's his policy. Mary can't use it. Okay.
Speaker: And so inevitably, if they have just one, it might be the other spouse that needs it. Okay. Okay. Yeah, that makes sense. And I know personally we have met with some clients and there's, you know, two spouses and one feels the need to have some kind of policy in place. They see the importance and the other says, well, this one's just going to take care of me. Exactly.
Speaker: And, you know, that may be the case, but it may not be because what if that person that was supposed to take care of you. Right. dies before you. You never know. Right. Yeah. And and we've I've had that conversation with people. and And then maybe six months later, I get a phone call.
Speaker: Oh, my goodness. Mary had a stroke. Remember that policy that you talked about? It's too late. It's a little too late. So you need to put these in place while you're still healthy.
Speaker: Correct. Okay. Correct. Although there arent not it's not an underwriting process with with blood work or anything like that. It's just just a few questions on the application stating that you can perform the six activities of daily living. Okay.
Speaker: So, yeah, the best time to do it is, of course, today. Today. When you're at your healthiest. Yes. Yes. Let's not put that off. Okay. All right. So we've talked about adding a level of protection, the importance of lifetime income with extended care features. And then, you know, that last strategy that it seems self-explanatory, but we always like to bring it up with clients is having an organized plan.
Speaker: that both parties in the household understand and can see on a you know one or two page document, not a huge binder of information and numbers that are overwhelming, but having an organized plan that's going to show you what your income will be every year, from which investments, which investments we're going to pull from first.
Speaker: Will any of them run out? Will any of them provide care features? What your expenses are going to be in retirement? Is there a gap? You know, really just having that transparency and organization is so important. And that's something that even the best investors over the years, some people we meet with that have crazy high net worths, the other spouse or even themselves sometimes have no idea what their portfolio even looks like or if they'll run out of money, what each investment means.
Speaker: Yeah, that's so true. And we pride ourselves into having that organized plan. let's Let's get together. Let's talk about what your bills are, what your budget should be.
Speaker: And let's get, if there if it is a married couple, let's get both of you in the room and let's explain here is where this money is held. Here is where the other money is held and why. Like you said, do you have that plan? Do you have that lifetime income?
Speaker: It's so important to have both spouses on the same page. And we take pride in explaining and documenting and making it a simple plan so that it's not overwhelming.
Speaker: yeah Because that's – people, I think, sometimes dread meeting with a financial advisor because they're like, I'm not going to understand anything. I'm going to leave overwhelmed, feel like i didn't do anything right my whole life. And, you know, that's something that I've certainly learned from you is breaking it down into simple, easy, understandable terms and explaining it.
Speaker: Right. Because, you know, they might have done a great job. They just need it explained to them. Or maybe we just need to make a couple tweaks. And you've always been so patient with all of our clients. And that's something I'm trying to emulate because, you know, this is people's life savings oftentimes. This is so important what we do.
Speaker: And we need to understand the magnitude of that. um And you do an excellent job. And I'm sure all of your clients would attest to that. Thank you. And and you do as well.
Speaker: Your organization skills are top notch. I'm a bit OCD when it comes to organizing. But as we've talked about, an educated client is a great client.
Speaker: We want our clients to know exactly where their money is held and why. And if they know that, they feel so much more comfortable. They feel confident in their retirement.
Speaker: Sure. Not just retirement, in their in every stage of life. Yeah, because we don't only work with clients in retirement, of course. you know We work with young families, young professionals, each step of the way.
Speaker: ah But that's just you know what we wanted to talk about today, the number one fear in retirement. ah Because that is a huge percentage of what we do every day, is help people.
Speaker: alleviate that fear. Yes. No need to fear. can help you. Is there anything else that you wanted to talk about? Well, i do I do just want to say when you just touched on it recently, yeah we respect the fact that this is people's life savings.
Speaker: This is what they have worked so hard for. And we want people to know that we will take good care of you. we will We will guide you along the way. and we will you know You can be as involved as you want to be, but we really care. Yeah. I mean, I've seen your your clients turn into your friends, your family. They do. And that's part of being a small family business, that you're going to have that special touch and you know know what your clients are doing that year vacation-wise, college.
Speaker: They're having babies, grandchildren, and planning for that. It's so important, in my opinion. And and that is probably the number one on the list.
Speaker: Let's learn about our clients first. If we don't know our clients and what their goals are, we can't put together a plan. So let's get to know them. That is so true. Mm-hmm.
Speaker: Well, thank you so much for coming on the podcast. I hope you're open to doing it again in the future. sure I'm sure our clients and friends, family, neighbors, prospective clients will enjoy how we've touched on these topics. Of course, you know we have to go into more detail on an individual basis. And when it comes to those investments like the lifetime income, ah the ones with extended care features, we're always able to run hypothetical illustrations for For clients with their specific amount of money, their age, their life circumstances, so that they can see what it would look like in their life.
Speaker: And, you know, we can always do that for someone. Would you say even if they're not a client, could we course run a hypothetical so that they could get an idea? that's That's the resources that we have at our fingertips.
Speaker: Okay. So they have nothing to lose. Nothing to lose. Let's see what it would look like for me or my savings, my situation. That's all it's what it's all about. Absolutely. Yeah.
Speaker: I mean, most people are visual. So I think that could be really helpful. Right. yeah So thank you so much, Lisa, for talking to me about the number one fear in retirement. I look forward to having you back on the podcast. And for everyone joining, thank you for listening to this week's episode of the Future of Finance podcast with Marissa Wood.
Speaker: If you want more information or wanted to schedule a complimentary consultation, wanted to ask some questions or get an illustration for yourself, you're free to go to our website,
Speaker: union-financial.com. Click on our scheduling link. It'll take you right to my personal calendar and you can book with either myself or Lisa. Phone call, meeting, Zoom call, totally complimentary.
Speaker: And we look forward to helping you combat that number one fear in retirement. Investment advisory services offered through Brookstone Capital Management, LLC, BCM, a registered investment advisor.
Speaker: BCM and union financial services are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
Speaker: the opinions expressed by marissa wood and guests on this show are their own and do not reflect the opinions of this radio station all statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such any statements or opinions are subject to change without notice Investments involve risk and unless otherwise stated are not guaranteed.
Speaker: Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you.
Speaker: Before acting on any information mentioned, please can please consult with a qualified tax or investment advisor to determine if it is suitable for your specific situation.
Speaker: This program is designed to provide accurate and authoritative information with regard to subject coverage.
