Mike Milligan continues his conversation with Coach Pete D’Arruda about matching a retirement strategy to the person who will live with it. They discuss risk, the tendency to rely on familiar products, and lessons from past planning conversations. Hear why the group favors reviewing the full picture rather than treating every retirement decision as a separate transaction. Part three of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And welcome back into the Financial Safari, having a great conversation today. I'm Thomas Lipscomb in studio with America's Wealth, Financial, and Income Coach, Coach Pete D’Arruda. Also joining us from Puerto Rico, Mike Milligan of One Oak Financial. Thomas, let's give a couple of websites out. Yes. I'm going to give one, and I want you to give it. We have so many. I love it. We really need one site where people go and have all our sites on there. We're going to do that. Master site, yes. We're going to do the master site coming up. Let's do it. Coach Pete's master site. Let's do it. But right now, we don't have it. Until then. But we're going to. So you see, you're getting a look inside my mind right now, folks. I've got over 700 domains, Thomas. I'm sure we can find one. I'm sure. So the one I want to give out is a very good one. It's about my new book, Modern Planning. But the site is planonceplanforlife.com. Planonceplanforlife.com.

00:47 Go there. You can download the e-book right now. We're working on an audio book coming up. But right now, you can download the e-book by going to planonceplanforlife.com. It's about 250 pages. And it really puts things in perspective about lifetime income. We're talking about today. The financial termites. How much 2% or 3% fees can cost you as far as what you could have had in your retirement and what you don't have in retirement. And making sure that you have income you can't outlive. Principle that cannot lose due to the market. That's important, too, by the way. Yes, it is. A floor under the spouse. In other words, making sure your spouse always gets income even if you're not here anymore. Ah, yes. And so that's what I call a floor under the spouse. Not knocking your spouse on the floor. And making sure your money isn't doing nothing. It is doing something. It needs to be doing something at all times.

01:33 Going up, not down. So planonceplanforlife.com. Now, what do you want to say? I love it. So the one I am going to focus on is a great do-it-yourself tool at asapplan.com. That's asapplan.com. As you folks know, if you're a regular listener to the show, Coach Pete has a 22-step total retirement plan process. And what we want to do is to try to enable you to take those steps yourself. Kind of figure out what are you missing? What do you have in hand? What questions do you need to be asking? We are developing a new electronic device. It's a calculator on steroids. But take your time. Go over there. I personally would love to hear your feedback. I'm helping develop this. And we want to make sure it's a tool that's beneficial to you. And again, that's at asapplan.com. Again, asapplan.com.

02:18 And we also are keeping track of when you go there because we're going to give an award of a $100 gift card to Ruth Chris for people that go there and give us any feedback. So we're going to draw the name out here in a couple weeks on the show. There you go. Help me out and I'll help you out. asapplan.com. You can't win unless you go and visit and let us know you visited, right? So that's kind of... That's it. That's what Mike thinks. What else? We've got financialsafari.com too if you want to ask a question on the show. Always. Yeah. If you want to ask a question or just catch up on podcasts, check out the television show. And that leads into the Financial Fill-Up Challenge. If you go to financialfillup.com, we would love to have contestants or audience members for our financial game show. You can also subscribe to the channel. Check out our past episodes. It's a really, really fun game show. A great way to look at retirement. Find out how much you actually know about the process.

03:04 We film episodes every three weeks, folks. So call, get on the list. Either be a contestant or if you want to be in the live studio audience. A lot of good giveaways there during the show too. Oh, it's fun. Yeah, we get gift cards we give away for winners too when they win. Yes, we do. And hey, it's a great way to learn the financial world rather than sitting in class trying to learn it. There you go. Hey, Mike, if you ever ask this question to somebody, you say, when the market had its worst week in years, did you have a single dollar sitting somewhere that you couldn't lose a dime? Oh, that's a great question. I mean, it's a fantastic question and one that a listener should listen to, right? Is, you know, I've never asked anybody that question, but one of the questions I ask is, what's the amount of money that you're willing to lose? Yeah. Because it's a similar question that you're just asking there.

03:53 Because at the end of the day, right, when you go to retirement, you don't want to have to continually watch CNBC or Bloomberg every day. You want to spend time with grandkids. You want to go make an impact in the community. You want to travel. And, you know, like having that stress and fear of watching the news every day becomes depressing, right? Because it's almost like riding a roller coaster. And as you get older, roller coasters are not as fun because of like just your age. And so that whole idea of losing money in retirement is not something that at least the people I talk to in our practice won't want to partake of. Unfortunately, a lot of people that we talk to, I wrote another book called Retirement Deja Vu. It's that feeling that you get when you hear the same story over and over again.

04:41 You know, deja vu. We all get that eerie feeling. And retirement deja vu is what I actually experience when I sit down with a new client because I hear the same story. If I talk to somebody from Edward Jones, like a client of Edward Jones, it's the same story. If I talk to a client from Merrill Lynch, it's the same story. If I talk to, you know, if I talk to people at different firms, I know what that firm's doing. They're just, they're selling the same investment plan in their 9, 11, and 1 o'clock meetings every day. And we actually want people to break away from retirement deja vu. And, you know, ours is the one-of-a-kind financial plan. Yours is the fill-up. And we want to make sure that everybody is getting what they need out of life. Because this life is about you folks. It's not about us. It's not about our life.

05:27 It's this life's about yours. Yours is the only one you can live. And you want to make sure your money lasts as long as you do. You know, we get to share our knowledge with folks. I mean, we've seen, I think I could say this, 34 years. I've seen about every kind of situation you could ever imagine. And I would rather, like my dad used to tell me, that a smart person learns from their mistakes. Like if you're trying to hammer a nail in and you hit your thumb, you won't do that again, will you? Let somebody else hammer. But the genius learns from other people's mistakes. So I've seen all the mistakes out there. And when people come in, I already know what kind of mistakes they're making. I can tell them right away. And Mike, a lot of times it goes back to, like you're saying, which company they're utilizing, which investment advisor or investment company. Because certain companies we can already identify. We know they're going to have a mutual fund strategy as well as a variable annuity in there when we meet with them.

06:13 We already know when they say what company their money is with. So I think it's just important to make sure you understand that there are solutions out there that don't involve taking risk. And not all the money should be there, but some of the money needs to be there because we never know what's going to happen the next year. And it brings back memories. 2006, I used to do a live show on WFNC. That's in Fayetteville, North Carolina, right off of Bragg Boulevard. It was a Krispy Kreme donut that I used to always go there. I would get because it was a live show. So I'd get to the Krispy Kreme about five in the morning on Saturday because the show was at seven. Because, Thomas, you never want to be late to your own show. Sure. And so anyway, I met a whole lot of friendly people in Fayetteville. And then I was at a kitchen table with a couple that had called from the show. This was 2006. 2006. And I was sitting at the kitchen table.

06:59 And the husband and wife were on the other side of the kitchen table. And I had the wife's attention. But I kept noticing that the husband, even though he acted like he was looking at me, he was looking over my shoulder. And so the paranoid person in me, because I've seen, I think, psycho movies were out there. I was wondering who was standing behind me because I thought I was getting ready to get tomahawked or something. But I turned around. I casually dropped my pen. And I looked around. There was a TV behind me. And guess what channel it was on? Tell me. CNBC. The price is right. Yeah, CNBC. And he was watching. And his wife said, when his wife finally noticed what I was doing, she said, let's just call him Harry. Harry always has that stupid channel on. And we can never have any fun because we always have to be watching our retirement. Ooh. And long story short, they got two financial fill-up strategies.

07:45 And they've been happy ever after. And so that's what you have to have. And we took the warrior out of living retirement. We left some money in the stock market so we could still play around. But he wasn't glued to the TV anymore because he knew his retirement was safe. His income was safe. And he always had that monthly check coming, regardless of what happens in the market. And there's another thing. When we talk about income riders and we talk about monthly checks, usually they're associated with annuities, Mike. And so somebody's listening now. They say, oh, God, annuities are bad. My broker told me annuities are bad. I heard they are ripoff. What would you say if somebody said that? You know, in the last segment, we talked about how annuities work for business models. All these financial companies, right? Goldman Sachs, all the big firms, right? Yep. Fees every month is an annuity. It's an income stream for them folks. It works for the big banks.

08:30 It works for the big investment companies. And yet they tell you it doesn't work for you. To me, that sounds like they're being hypocritical. But what annuities are they usually selling with those fees, though? They're not usually the friendly annuities that we like, are they? But it's the variable annuity side. Those can have up to 4% or 5% fees a year. Yeah. And those are the ones that hurt performance. Because they're saying, let's use a variable annuity because we can still participate in the market. What they're saying is we can still participate in the upside and the downside of the market with a high cost. There's a lot of strategies out there, like fixed index annuities, where you can participate in the market, but none of the downside. Right? There's strategies. Like even MYGA's right now, multi-year guaranteed annuities. 5.5%, 6% income payments off of those for a fixed period of time.

09:17 But the income riders, when you put that on an annuity stream, even when your dollars may run out, right? Even if you outlive your money, you can never outlive the income that comes from those. That's the insurance company making a promise to you, making a guarantee statement. And listen, you shouldn't guarantee, you know, annuities are bad, right? Because the insurance company promised me they must be making money. Well, yeah, man, the insurance company's making money. There's nobody in the insurance business that is nonprofit out there. Right. There's no banking that's nonprofit. Well, there's no business anywhere that's nonprofit, even though they call themselves not some of these nonprofit places. They're making a lot. If you look at the owners, they're making a lot of profit. Correct. But listen, don't worry about their business model.

10:05 And that's when, unfortunately, when people say, I don't like annuities, what you're really saying is, I don't understand the business model. How can they do that? It sounds too good to be true. That's when you work with somebody who's done this. Pete, you've been in the business for how long? 34 years. In those 34 years, you have worked with thousands upon thousands of retirees, correct? Yes. Correct. So a lot of times when people go into retirement, they're going there for the first time. Yeah. Don't you want to work with somebody who's been to retirement, who's lived in retirement? Who's worked in retirement? For people, thousands and thousands of times. That's why working with a certified financial planner, a fiduciary, working with a group like Pete and the team there, they live retirement.

10:58 They work retirement. And they understand strategies and techniques that's going to make you feel more comfortable and safe in retirement. Don't work with somebody who lives in the market. Work with somebody who lives in retirement. I'm a retirement income certified professional, RICP. That's from the American College, same place where the CFP is. And I'm trained on income because that's what I've done for my clients. And honest answer, some annuities are lousy. They have high fees, long surrender periods, and they're sold to the wrong person. I would never defend one of those. But there are plain vanilla income tools that do one honest thing, a paycheck for life. The word annuity covers both. The way a car covers a lemon and a Toyota. See? So the word annuity gets people in trouble because they haven't defined what kind of annuity it is.

11:44 And my job as your personal CFO is to shop, to guarantee, read you the fees out loud, if there are any, and check the insurer's rating. And if it doesn't fit you, I tell you it won't fit you. So, you know, we basically are like the tailor. We'll come and custom fit the retirement plan just like the tailor custom fits the outfit to you. So if you'd like your very own tailor fit, total retirement plan and income, taking that worry out of planning and living in retirement, call now. We'd be very happy to sit down with you next week. And the lines are open. The number to call is 800-661-7383. 800-661-7383. You can also reach out to the team by texting the keyword plan to 600-700. Plan to 600-700. Procedure on called 300-600.