Unmasking Annuities when security comes at a cost | On The Money Transcript

Speaker 1 (00:00):
Financial planning and investment management services provided through Certified Advisory Corp cac, a federally registered investment advisor. CAC is a federally registered investment advisor and only transacts business in states where it’s properly registered or is excluded or exempted from registration requirements. Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subject’s discussed. Discussions and answers to questions do not involve the rendering of personalized legal tax or investment advice, but are limited to the dissemination of general information. Listeners should consult with a legal tax and or investment professional for advice specific to their needs.

Speaker 2 (00:30):
Stay tuned for on the Money Central Florida’s most listened to financial call and show brought to you by Certified Financial Group in Almont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a p, but on Saturdays, the advice is absolutely free and has been for more than 30 years. For their WDBO listeners, if you have a financial question you want answered by real fiduciaries, the lines are wide open. Call five 80 WDBO, that’s five 80 WDBO and enjoy the show.

Speaker 3 (01:38):
Hello and welcome to On the Money right here on WDBO 1 0 7 3 FM AM five 80, always streaming live inside your WDBO app. This is your chance to hop on the air with some experts in the financial future, the get ready for yourself to get to and through retirement field. We have none other than Joe Bur and Matt Murphy. Two certified financial planners from the Certified Financial Group helping out the citizens of Central Florida every single weekday at their office over there in the Northern Orlando area and also here on Saturday mornings. Live on the air if you want to call in (844) 580-9326 as the listeners of WDBO have done for over 30 years here on the money, which is pretty fascinating just thinking about the amount of changes that have taken place in that world, just almost probably going before the internet all the way to now, how you would handle your retirement strategies, and that is what the Certified Financial Group has done throughout those decades. Just adapting and being a valuable resource for you. So again, we got Matt Murphy and Joe Burt from the Certified Financial Group. Gentlemen, how are we doing today?

Speaker 4 (02:48):
We’re doing good, Josh. Good to be with you. As you said in the intro, we are here to take calls on things that might be in our listers minds decisions that you’re trying to make regarding your IRAA 401k, your guarding, long-term healthcare, life insurance, mortgages, stocks, bonds, real estate, all the things that Matt and I and the 15 other certified financial planners work with our clients, providing them retirement planning and investment management for a fee on Monday through Friday. But on Saturday morning, we are here for you absolutely freeze. If anything that’s on your mind, decisions that you’re trying to make, rumors that you might’ve heard, things you want clarification on, we are here to try to help you. And the good news for you is the lines are absolutely wide open this morning. All you have to do is pick up the phone and dial these magic numbers,

Speaker 3 (03:30):
8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO or send in your open mic using the free WDBO app. Today’s topic, unmasking annuities when security comes at a cost.

Speaker 5 (03:45):
I thought we would do obligatory New Year’s Resolution radio show this morning, Joe, but I figured we’d do something a little more specific to help our listeners out there today. So I wanted to share a couple of thoughts on the subject of annuities, and it’s always sort of a hot topic in the financial planning world. And I will say, I think, Joe, there is no particular issue that illustrates the difference between a fiduciary and a non fiduciary than the subject of annuities. Would you agree with that? I agree, and I want to preface my comments by saying that annuities in general are not bad. In fact, there’s some excellent annuities that are available out there in the marketplace. The problem that I see typically with annuities is that they are sold as a product rather than used as an implementation tool, as a result of a thoughtful planning process. So some of the things that I’d like to get across this morning are, and Joe, I’m sure you get these, everybody gets these once you get to a certain age where you’re getting these invitations in the mail. Oh yeah. I mean, Joe, could you not

Speaker 4 (04:57):
Eat the rest of your

Speaker 5 (04:58):
Life? I was going to say breakfast, lunch and dinner every day, seven days a week. You could eat for free as long as it’s almost like a timeshare type situation as long as you’re willing to sit there and listen to the presentation. So people are going to attend those workshops. They wouldn’t do ’em if they didn’t, weren’t well attended. So my purpose here this morning is to give our listeners some things to look out for some clues in how some of the unfortunately tricks are played in that particular industry. So one of the first things, and I think probably a lot of people realize this, but one of the downsides of most annuities is that when you invest your money into an annuity, generally speaking, you’re tying your money up for a long time. In some cases it could be for lifetime. Now, again, not to say that that’s necessarily always a bad thing, but you need to be aware of that going into it. So Joe, we were talking a little bit about an example I had here recently before we came on air. Somebody that came into my office and was really sold a handful of annuities, almost their entire portfolio. These folks are over 65.

Speaker 4 (06:07):
I’ve seen that too.

Speaker 5 (06:08):
Yeah, I think we all have, and all of really 90% of their money is in annuities. All of them have surrender charges. So surrender charge just means that, hey, if you get into that annuity, it’s going to cost you an arm and a leg to get out of it anytime soon. So the first thing that you want to be aware of is what is the surrender charge schedule? How many years do I have to commit to this annuity? And if I want to get out, what’s my penalty percentage going to be? Oftentimes, and Joe, you mentioned this, I kind of told you this example, and your first question was, was it a bonus annuity? Oftentimes what’ll happen is you’ll say, okay, well I’ve got a hundred thousand dollars and the annuity will offer, I mean as much as maybe a 10, 15, even 20% bonus.

Speaker 4 (06:56):
And here’s the deal. These are the ones that are often the ones that are touted at the free dinner seminars because they pay the biggest commission.

Speaker 5 (07:03):
Absolutely, absolutely. And so way, and that’s a great point. The way that commission is recouped is by they have to lock your money up. In a lot of cases, they may actually be paying both a bonus and a large commission to the person that’s selling these annuities. That money doesn’t just come out of thin air. The insurance company has to be able to recoup that money. So if you take that annuity out of the annuity within the first X number of years, the way they’re going to recoup the amount of money they paid out in that bonus and they paid out in that commission is they’re going to charge you a stiff penalty. So that’s the first thing to look out for. You always want to ask what’s the surrender charge schedule and what is the percentage?

Speaker 4 (07:44):
Yeah, I think the first thing you want to ask is, okay, if I want to get my money out tomorrow, what’s the cost? Or can I get it out tomorrow? Or when I get it out, what is it going to cost me to get it out?

Speaker 5 (07:53):
Yep. And also what you will find now is a lot of times most annuities have what they call a surrender free withdrawal. So typically you can take five to 10% of the value of that annuity out each year without any penalty. But if you take out more than that, or like Joe said, if you take out the entire thing, what’s your walkaway amount going to be? And typically it’s going to be these surrender charge percentages. I mean, they can be 10, 12, even 15% in the first few years. So you just want to be really aware of that. The second thing that I see a lot is these annuities oftentimes are sold with what’s called a rider. And a rider is just kind of an add-on additional benefit to the policy. So for example, you put a hundred thousand in and in 10 years, let’s say, you’re guaranteed a certain percentage of income for life.

(08:47):
Now, when that’s the case, especially if you’re married, oftentimes what’ll happen is that annuity will be sold as a single life annuity. Okay? So if I am married and I buy a single life annuity, and let’s say I’m guaranteed a 6% income for life benefit, well that 6% for life guarantee is only good over my lifetime. And so if you’re married, and oftentimes Joe and I were talking off air, oftentimes sadly, the people that sell these annuities aren’t even aware that that’s the case, but they’re sold that way because the fee for that single life annuity tends to be lower and it’s more attractive and hint, hint, easier to sell than doing what would really probably be the right thing in setting it up as a joint life annuity.

Speaker 4 (09:37):
And they talk about the income that you’re going to get, the 6% I’ve heard now on the radio, 12% income, that’s not a return on your money, that’s return of your money for the most part.

Speaker 5 (09:48):
It is. It is. That’s right. And it it’s a combination. But yeah, you’re right. They’ll advertise these outrageous income figures and people think, oh, well if I just put in a hundred thousand dollars, they’re telling me I’m going to get 12% return.

(10:00):
It’s not 12% return. Each payment that they send you is going to be a portion of return of the money you put in, like you said, Joe, and then a portion of that will be income that’s paid out to you. So the other, I guess really along those lines is be very careful about if you are buying an annuity, why you’re buying that annuity. To me, there’s kind of two reasons why you might buy an annuity. The first would be to protect your principal, and the second would be to protect your income or to have guaranteed income over your lifetime, just like a pension. If you think about what an annuity can do, it can be sort of a supplement to your income in retirement as another form of a pension that’s funded by your own money rather than the company or the government. Those oftentimes, gosh, it’s sad too, but oftentimes the annuities that are designed to provide you a guaranteed income are sold to somebody that in reality is just looking to protect their principle. And so it’s kind of a mismatch. It’s almost as if you’re selling a single mother that has three kids this fancy convertible Ferrari or something. It’s a beautiful car. It’s really fast. It’s probably fun to drive, but it’s not a fit for that particular person’s situation.

Speaker 4 (11:21):
Exactly.

Speaker 5 (11:22):
And so I think that’s the tie in to what Joe and I and the rest of us here at CFG do is we would only present something like that, like an annuity as a result of a thoughtful planning process. And that’s really what a certified financial planner should do

Speaker 4 (11:38):
As a fiduciary.

Speaker 5 (11:39):
As a fiduciary.

Speaker 4 (11:39):
The thing is that as we say in our ads is anybody can call themselves a fiduciary. A lot of these people selling these annuities say, well, we’re fiduciaries. Trust me, I’m a fiduciary. And as we say, only certified financial planners are required by our licensing to act as fiduciaries, and we put it in writing to our clients and we do investment management. So it’s a minefield out there. And today everybody’s looking for guarantees. Everybody’s looking for income, and you’re attracted to that new shiny object out there, particularly after they’ve given you a nice steak dinner. And I’ve seen these presentations. I mean, I’m almost convinced that it’s a good idea. No,

Speaker 5 (12:15):
I know it,

Speaker 4 (12:15):
But we know what’s under the hood and therein lies the problem.

Speaker 5 (12:19):
And the interesting thing too, Joe, these types of annuities, the sales of these types of annuities skyrocket in years like 2020, even 2022, 2008, 2000. And it’s when people are fearful. And so maybe if nothing else, the message that you take away from our discussion this morning is if you’re fearful or if the market circumstances are such that everybody is fearful, it’s okay to look at options to protect your money, but make sure you should never be in a rush to make a decision and you should never not ask all the right questions and feel comfortable, ask doing your due diligence in making sure that you are asking all the right questions. Well,

Speaker 4 (13:05):
Here are the bumper music Josh taken away,

Speaker 3 (13:06):
Joe Bur Matt Murphy, certified financial planners with the Certified Financial Group, taking your calls today, guiding us through some annuities and what to plan for the new year. If you want to join the conversation, lines are got some lines open for you. 8 4 4 5 8 0 9 3 2 6 is the number to call 8 4 4 5 80 WDBO or send in your open mic using the free WDBO app you are listening to on the money where we’re planning tomorrow today with the Certified Financial Group. Welcome back to On the Money here on WDBO AM 5 81 0 7 3 fm, always streaming inside your WDBO app. We got Matt Murphy and Joe Bur on the studio line today, 8 4 4 5 8 0 9 3 2 6. Your chance to hop on and pick the brains of two certified financial planners with the certified financial group, 8 4 4 5 80 WDBO, or send in your open mic using that free WDBO app. Joe. Matt,

Speaker 4 (14:14):
I think we saw a text question Float in there, Josh, so take it away.

Speaker 3 (14:17):
Absolutely. Tom wants to know, Tom says I’m 58 and I’m retiring in seven years. Is the 4% rule for retirement withdrawals still a good strategy.

Speaker 4 (14:26):
Well, let’s talk about what the 4% rule is.

Speaker 5 (14:28):
Well, yeah, I mean the 4% rule is basically referring to how much of your portfolio can you afford to take out each year in retirement and adjusted for inflation and not run out of money. You know what I mean? At the basic level, that’s really what it’s referring

Speaker 4 (14:43):
To. But let’s emphasize it’s really a broad rule of thumb.

Speaker 5 (14:46):
It really is. And I think, Joe, what I typically tell clients is I think it’s directionally it’s pretty helpful in terms of just having some context around, Hey, I’ve saved X amount of dollars, here’s about how much I could probably afford to take each year, but it’s way oversimplified.

Speaker 4 (15:05):
Another way to look at that quickly is how much money do I need and how much money do I need every year? And multiply it by 25 and then it’ll get you the 4% rule. So if you need a hundred thousand dollars, you need two and a half million dollars.

Speaker 5 (15:19):
Yep, that’s right.

Speaker 4 (15:19):
Because 4% of two and a half million is a hundred thousand dollars.

Speaker 5 (15:22):
Yep.

Speaker 4 (15:22):
That’s the way you do it.

Speaker 5 (15:23):
Do you remember those? Gosh, this is going back maybe 20 years. You remember those ING commercials where they used to have the people walking around with the numbers over their, I think that was actually pretty good because what that did is it kind of told people, look, this general 4% rule doesn’t apply to everybody and it’s based upon the amount that you can actually afford to take out is based on your individual unique circumstances.

Speaker 4 (15:48):
And what complicates that is what’s called a sequence of returns.

Speaker 5 (15:51):
Yes, it does.

Speaker 4 (15:52):
Which means,

Speaker 5 (15:53):
Well, so let’s

Speaker 4 (15:54):
Say you notice the way I’m feeding you here.

Speaker 5 (15:56):
Yeah, I like that, Joe, thank you.

Speaker 4 (15:58):
I knew you’d have the answer.

Speaker 5 (15:59):
It makes it easier for me. If you retired, let’s say for example, in 2007 and you had a million dollar portfolio or something like that in the first year that you’re taking money out of your retirement accounts, the market’s down 40%.

(16:17):
So that is a vastly different situation than if that particular year had occurred later on in your retirement because you’ve dug yourself a hole early on in your retirement and it’s harder to climb out of that hole early on when you’re drawing money out than it would be if, let’s say that 40% downturn happened 10, 15 years into your retirement. And the other thing too, Joe, aside from the sequence of returns, it doesn’t really take into account, Hey, next year we’re going to buy a car and we’re going to get that money out of our retirement account, and then five years from now we got to replace the roof and that’s another 30 grand. Things like

Speaker 4 (16:53):
That. That’s why planning is so important, so important. It’s not just a matter of picking investments, it’s really knowing what you’re need when you’re going to need it, factoring inflation, factoring in taxes, and then those unexpected things.

Speaker 5 (17:04):
Yes. And which accounts do I take it from? If you do have to buy that car, you got to replace the roof. What’s the most tax advantageous way to do that? Where I’m not going to, I’m going to go back to the old, well, here, I’m not going to blow up my Medicare premiums. I’m not going to mess up the social security taxation that I have. So there’s a lot of factors that need to go into that, and that’s what we do is we help clients compile all that.

Speaker 4 (17:26):
And you’re going to do a workshop on that when

Speaker 5 (17:29):
My workshop, well actually, actually I will tell you in, oh, I don’t have that schedule in front of me now. But that’s

Speaker 4 (17:35):
Your specialty is doing that one on when about the when and how to take money out of your retirement accounts.

Speaker 5 (17:41):
Yeah, the tax planning through the different stages of retirement. We talk all about that, how when you take money out of your accounts, how it affects your income, that affects your Medicare premiums, how your social security taxes is so on. So it looks like we got a call though coming in here,

Speaker 4 (17:57):
Joe. Yeah, I think we’re up against the break though, so we’ll catch him at the end. Bill, hang on. And we will catch you at the end of the break and we appreciate your hanging in. And Josh, take it away.

Speaker 3 (18:05):
Thank you so much. If you want to join the conversation, bill actually called in. He’s on his way to your seminar right now,

Speaker 6 (18:10):
But

Speaker 3 (18:11):
He has one question while he gets there, try to get a little headstart before the class starts. If you want to join Bill. In line 8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO is the number to call to hop on the air with Joe and Matt Murphy, two certified financial planners with the certified financial group you’re listening to On the Money where We’re Helping You. Plan tomorrow today with the Certified Financial Group.

Speaker 2 (18:36):
Welcome back to On the Money Central. Florida’s most listened to financial call and show Bronte. You buy Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial Planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a P, but on Saturdays, the advice is absolutely free and has been for more than 30 years. For their WDBO listeners, if you have a financial question you want answered by real fiduciaries, the lines are wide open. Call five 80 WDBO, that’s 8 4 4 5 80 WDBO and enjoy the rest of the show,

Speaker 6 (19:33):
The Sunshine.

Speaker 3 (19:40):
That’s why I’ll always be here. Welcome back to On the Money here on WDBO AM five 80, always streaming inside your WDBO app. If you want to join the conversation, we got Joe Burt, certified Financial Planner with the Certified Financial Group and Matt Murphy, well Certified financial Planner with the Certified Financial Group here in Studio today. Answering your questions as they do every Saturday morning at 9:00 AM here on W DVOs airwaves, as they have done for the better part of three decades here on WDBO. If you want to join the conversation, the number to call is five eight zero nine three two six eight four four five eighty WDBO. If you want to get right into the Office of Certified Financial Group, if you want your question to be taken off the air, more of a private manner, Charles Kry is standing by at 4 0 7 8 6 9 9 8 0 0. That’s 4 0 7 8 6 9 9 8 0 0. He’ll be taking your calls as if it’s your own little private radio show. They’re in the Office of Certified Financial Group. If you want to send in your open mic, you can do so inside the WDBO app and we’ll play it back live on the air. Joe, Matt, what do you say? We head back to these text messages.

Speaker 4 (20:51):
Sure, before you go that I’ll get to that, Josh, I was reflecting about you were saying been on the air and I remember being on the air talking about the Euro. It was launched in 1999 and this is the 26th anniversary this week of the launching of the Euro. So been around a long time doing this and once again talking to our wonderful WDBO listeners here throughout central Florida. So once again, Matt and I are here to take your calls this morning, things that might be on your mind, questions that you might have, decisions that you’re trying to make regarding your personal finances. I like to say on Monday through Friday, we do retirement planning and investment management for a fee working with our clients as fiduciaries on Saturday morning that we are here for you absolutely free. So once again, if you have any questions, the good news for you is the lines are wide open. All you have to do is pick up the phone and dial these magic numbers.

Speaker 3 (21:40):
8 4 4 5 8 0 9 3 2 6 8 4 4 5 80 WDBO. Mike wrote in from Altamont Springs. Mike says, I am 30 and I just got a raise. Congratulations, Mike. Yeah, I just got a raise. Should I increase my 401k contribution or start a Roth IRA?

Speaker 5 (21:59):
Well, great question from Mike because I think Joe, most people that are in that situation end up spending that raise.

(22:05):
So good for him for thinking ahead a little bit here, a couple of comments. Number one would be that let’s make sure that you’ve got a cash reserve set aside. I’m going to go under the assumption that Mike has that already, but if he’s got a raise and he’s just funding a retirement count, but he doesn’t have let’s say, three to six months worth of his living expenses set aside in a cash reserve type account, that would be step one. Another step of course would be paying off some debt, but let’s assume that he’s done all of that. What Mike May not be aware of is in today’s day and age, a lot of 401k plans offer a Roth option inside of the 401k. And the reason why that could make some sense is number one, you could be getting some matching dollars of course on the 401k, but secondly, unlike a Roth IRA, the Roth 401k doesn’t have any sort of income stipulation.

(22:58):
So you’re limited to whether you’re even eligible to make a Roth IRA contribution based upon what your income is. And that is not the case in a Roth 401k. So that would be the first thing that I would look for if I were Mike, is do I have a Roth 401k option inside of my retirement plan? Now of course, because the Roth is after tax money, if he does put money into the Roth side of the 401k, he doesn’t get any tax deduction for making that contribution today. But the benefit is assuming the government keeps the rules the way that they are now, that money that would come out of the Roth later on, of course would be tax free. So any other thoughts on that, Joe?

Speaker 4 (23:36):
Well, it’s all a question of his tax bracket. As we always say. I like to get the burden of hand today when it comes to taxes that you get the tax deduction, but if you’re in the lower tax bracket, maybe glom onto to the Roth, but your point is well taken about having that emergency money set aside. You want to be sure that, because what happens is if you don’t have the emergency money, then what you’re going to do is you’re going to dip into your retirement account and then you’re going to pay a penalty to get the money and taxes on top of that. So yeah, you want to be sure you have that emergency fund. Of course, that’s CFP 1 0 1, have that emergency money because you never know what curve balls going to be thrown at you. And then next thing you want to look at, do you have the adequate protection for yourself and for your family?

Speaker 5 (24:16):
Yes,

Speaker 4 (24:17):
Because we all presume and hope that life is going to go on just the way it always has, but all you have to do is pick up the newspaper or talk to your friends and family and somebody’s died, somebody’s been injured, and life changes, and all of a sudden your income situation changes and your family’s financial future is in awful shape, particularly at age 30. You can buy so much term life insurance to protect yourself for pennies actually and really do the job that you need to do. Once you have that taken care of, then you want to talk about the objectives that you have, whether it’s educating your kids, planning for retirement, whatever long-term objectives you have. Then of course, what’s the best way to save for that? And as we always say, the best way to say for your retirement is in your retirement plan,

Speaker 5 (24:58):
Use

Speaker 4 (24:58):
It to the max.

Speaker 5 (24:59):
And that’s a great point, Joe. These are the boring things too, and I think a lot of times this is the value of working with a financial planner, a certified financial planner in particular, is we will bring to the surface some of those types of issues that Mike, again, Mike here in his question, a lot of credit to him for thinking about saving this money, but what he may not be thinking about are those types of issues like the protection, like having a cash reserve set aside. Those are the types of things that can really derail your financial plan, particularly at an early age. And so I think by sitting down and having a good conversation with a certified financial planner, we can bring up those types of issues. We don’t have any conflicts of interest with those types of things. So we can give you a good, honest assessment of where these dollars should go and make sure that you’re addressing all of your financial risks that you have.

(25:50):
Another one, just to throw this out there, Joe, on that same subject, you talked about kind of life insurance, disability insurance too, making sure that you’ve got that in place. If you’ve got a good job, you’re making a hundred thousand maybe when you’re 30 years old and you don’t have a group disability plan available through your employer, that’s something that could also derail your plan. So not to rain on Mike’s parade here, but those would be the types of things they think that any of us here at CFG would sort of address with somebody like that to make sure that all those boxes are being checked, all the risks are being addressed, and then assuming that they are, then I think like Joe said, it comes down to what your tax situation is now. And if you’re in a low tax bracket, maybe it does make some sense to fund the Roth side of the equation,

Speaker 4 (26:31):
But using your retirement plan as your first line of defense, if you will, for retirement is what it’s all about. But you need to have those basic things in place that you can’t control and that can really upend your financial life. So that’s the words of advice here. Everybody’s situation is different, and that’s what we do. Financial planning, good investing requires good planning upfront. Unfortunately, most people are out there to sell you something and do the investing side without it giving any thought to the long-term plans. And oftentimes as investment plans blow up because you haven’t done the proper planning.

Speaker 5 (27:01):
But boy, that free dinner is attractive, isn’t it?

Speaker 4 (27:04):
Particularly if you’re hungry.

Speaker 5 (27:05):
Yeah. On that subject, I just noticed Gary’s doing a workshop this morning. You see that spread? He’s got put out there.

Speaker 4 (27:12):
Gary does it, I want to tell you.

Speaker 5 (27:15):
So

Speaker 4 (27:16):
The only thing he doesn’t have is bacon and eggs, but I

Speaker 5 (27:18):
No, that’s true. That’s true. Most of it is. He said are empty calories. Boy, it looks awfully good back there. And we got some workshops coming up. We do, we do. So on January the 15th, which is a Wednesday, Charles Curry, who incidentally is taking calls off the air, I think Josh mentioned that earlier. Charles is doing a workshop, social security planning basic rules and claiming strategies. That is Wednesday, January the 15th from six 30 to eight o’clock. That one is always well attended. Super important that if you are nearing that social security age, that you understand all of the implications of when to claim. For the most part, it’s an irrevocable decision. So you want to make sure you’ve got all your facts straight and make sure that the decision you make is an informed one, and it takes into account your circumstances.

Speaker 4 (28:05):
Yeah, as I say in the ad, social security can tell you what your options are, but they can’t tell you and won’t tell you what’s best for you and your family and everybody’s situation is unique. So Charles will uncover some of those things that you ought to be asking, things you ought to be thinking about before you make that decision that once you make it, it’s tough to reverse it. It’s impossible to reverse it after the first year. And we have seen people make the wrong decision and cost them tens of thousands of dollars in guaranteed benefits from the government.

Speaker 5 (28:34):
That’s right. So

Speaker 4 (28:35):
That’s free. When is that? Once again?

Speaker 5 (28:36):
Yeah. So again, that’s Wednesday, January the 15th from week

Speaker 4 (28:39):
From Wednesday, 30 to eight a week from Wednesday here at our offices in Altamont

Speaker 5 (28:42):
Springs. Yep.

Speaker 4 (28:43):
Go to our website financial group.com. That’s financial group.com, click on events, and you make a reservation right there.

Speaker 5 (28:49):
And then Gary, Gary’s busy here in January.

Speaker 4 (28:52):
Is he busy?

Speaker 5 (28:53):
So Saturday, January the 25th, Gary is presenting Gary Oli that is, and Gary, by the way, is a certified financial planner and a CPA, so he’s presenting healthcare options in retirement. Again, that’s Saturday, January the 25th from 10 o’clock to 12, and he’s going to be covering your Medicare decisions. That’s a really, really important one as well. Also, while it’s not irrevocable, once you make those Medicare elections, you really can’t change ’em at least for another year, right? So you want to make sure that, again, you’ve got all the facts straightened out. Gary is very detail oriented and he also provides a great, as we said, great spread, great spread, great refreshment. So again, you can go to our website. That particular workshop is Saturday, January the 25th from 10 o’clock to 12. Go to the workshop financial group.com, go to the workshops tab and reserve your spot there.

Speaker 4 (29:46):
And that one on Medicare planning is really important because you’ve seen the ads from Martha and jj, Joe Namath, all the ads for the Medicare Advantage plans folks, you need to know the ins and outs and mostly the outs of the Medicare Advantage plans and where the hooks are and what you need to be aware of. They sound awfully good. Get the free gym membership and the free dental and the free, whatever else they’re going to give you. You need to be aware of the fine print in those programs. Gary’s going to uncover all that. We do not sell Medicare supplements. We don’t do Medicare. We just want to inform you. And the reason we do this tough, as I say time and time again, the reason we put on these workshops is to prevent you from becoming a financial casualty. And secondly, introduce you to our firm, what we do, how we provide retirement planning, investment management. This way, whether you need our services now or sometimes in the future, you give us an opportunity to earn your business. So once again, our website is financial group.com. That’s financial group.com. And I saw another text question. Float in there, Josh.

Speaker 3 (30:45):
That’s right. If you want to join the conversation, 8 4 4 5 8 0 9 3 2 6. We can talk about the text question here, but we may answer it here after the break. Alice wants to know, Alice says she’s 64 and considering retiring early, a positive episode of the on the money here today. Retiring early, just got a raise, all kinds of exciting things coming through our text messages. Alice says she’s considering retiring early. What impact will that have on her social security benefits? Well, I guess we’re going to catch this after the break. Yeah, I think we will. Joe, thank you so much. If you had some more questions. 8 4 4 5 8 0 9 3 2 6. Charles Curry standing by off the Air Certified Financial Planner with the Certified Financial Group at 4 0 7 8 6 9 9 8 0 0. You’re listening to On the Money where We’re planning tomorrow Today with the Certified Financial Group.

(31:51):
Welcome back to On the Money here on WDBO am 5 81 0 7 3 fm, always streaming inside your WDBO app. If you got a question for the Certified Financial Planners at the Certified Financial Group, we’ve had quite a few people call in during the breaks and they want to get that offline number because they find it so useful to have these experts in their back pocket that number Charles Curry standing by at the Office of Certified Financial Group. Write this one down as the show comes to a close 4 0 7 8 6 9 9 8 0 0. That’s 4 0 7 8 6 9 9800. Maybe your question is a little too personal for the airwaves or you want to just get right to the Office of Certified Financial Group and start today. Again, Charles Kirby, standing by 4 0 7 8 6 9 9 8 0 0. We had Joe Bur and Matt Murphy with us today, and we teased the question before the break, and Alice is probably still wondering. Alice says she’s 64 and considering retiring early, what impact will that have on my Social security benefits?

Speaker 5 (32:54):
Well, and by the way, if Alice wants a full description of the answer to this question, she can attend Charles’s workshop on Wednesday, January the 15th from six 30 to eight o’clock, social security planning, basic rules and claiming strategies. But let’s address our question here on air today. And the first thing that I would say is I think a lot of people don’t understand that social security benefits are based upon your 35 years of highest earnings. So the average of your 35 highest earning years. So if she retires at 64, and it may not be, but chances are she’s probably in her peak earning years or certainly making more money now than she was when she first started. And so every year that she works from here on out, let’s say that she’s making $70,000 each year that she makes $70,000 towards the end here is replacing one of the years that maybe she made 15 or 20 when she was, or

Speaker 4 (33:48):
30

Speaker 5 (33:49):
Or

Speaker 4 (33:49):
30, 34, 34 years ago.

Speaker 5 (33:51):
Yes, exactly. And I’ve seen Joe that make a big impact, huge difference. Two or three years of doing that can make a big, big difference.

Speaker 4 (34:00):
Yeah, when you’re about ready to launch on that road, we call retirement age 64, we’ve got a plan for 25, 30 years into retirement. That’s a long time and it’s easy to see where you’re going to be next week, next month, maybe next year. But try to look at where you’re going to be in three years, five years, seven years, 10 years, 15 years, 20 years, where’s that money going to come from and how long are that money going to last? And people are eager to retire. It’s been a grind, but I’ve also seen where people come in and they’re ready, they really want to retire, and then we run the numbers. If you only work another year or two, it increases your probability of success by a huge number as opposed to quitting too soon. And then you’re going to wonder, do I need to go be packing groceries when I’m 78 years old because I didn’t work another couple years and your peak earning years?

Speaker 5 (34:49):
Not to mention too, Joe, tying in a concept you brought up earlier. Not to mention that let’s say you retire at 64 and at 65 you have a major market downturn,

(34:58):
And now you have that sequence of returns issue where you have bad market performance in the early stages of your retirement, which can really kind of sidetrack things. The other thing that I would just add, this is not so much a numbers thing, but a lot of folks that I talk to that are considering retiring early, some of them are in just such a rush to stop working and maybe your work situation is not pleasant or it’s miserable and you just can’t wait to get out. But if you haven’t put some time and effort into thinking about what are you actually going to do with your time when you’re not working anymore, that might end up being as destructive as continuing to work at your miserable job. So that would just be my one piece of advice on that side of things is make sure that you spent some time thinking about whether it’s volunteering, whether it’s a part-time job, whether it’s watching your grandkids, whatever the case may be, that you’ve got a plan in place, not just for your money, but for your life, for when you

Speaker 4 (35:54):
Retire. For sure. Once again, listeners, if you want some more information about what Matt and I and the 15 other certified financial planners do day in day out, providing retirement planning, investment management for a fee, you can go to our website, that’s financial group.com, financial group.com. You can also sign up for the upcoming workshops that are totally free. Just go to our website financial group.com and click on events, and we hope to see you here very soon.

Speaker 3 (36:20):
Thank you so much. Any last minute questions as the show comes to a close Charles Curry standing by 4 0 7 8 6 9 9 8 0 0 certified Financial Group is filled with certified financial planners, Charles Curry being one of them, 4 0 7 8 6 9 9800 you just listened to on the money or we’re helping you plan tomorrow today with the Certified Financial Group.