081 Tom Hegna: Mortality Credits Drive The Income Train

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welcome to fun with annuities with your

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[Music]

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welcome to fun with annuities i'm your

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host stan the annuity man america's

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annuity agent

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informative and educational videos as

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well but the fun with annuities youtube

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channel is good because you get to see

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me and the guest interact and facial

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expressions and see how darn good

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looking we are which is which is always

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a good thing today's guest is a return

1:11
guest and i you know i really wish he'd

1:13
be on every week but he can't because

1:14
he's his he's pretty busy in fact he's

1:17
just coming off a huge webinar and i had

1:19
to grab him and say hey let's let's fit

1:21
one in because i need my people to hear

1:23
you i call him the annuity truth

1:26
evangelist the soothsayer

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of retirement income planning and the

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pied piper of

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paychecks and play checks

1:34
welcome back tom hegna

1:37
thank you stan great to be back with you

1:39
excellent so let's just jump right in uh

1:41
just want to get your take before we get

1:43
into the meat of the matter

1:45
all of the stats that are coming out now

1:47
are annuities sales are soaring

1:50
and that makes a lot of people scratch

1:53
their heads and go huh how's that even

1:55
possible it's dan and tom because

1:57
interest rates are at perceived or

1:59
all-time lows or however you want to say

2:01
it

2:02
what's your answer to that tom

2:04
yeah but mortality credits are probably

2:05
the highest we're going to see for the

2:06
rest of our lives and so you know

2:08
there's there's three components to a

2:11
paycheck from a from an income annuity

2:13
there's principle well anybody can give

2:15
you that there's interest or investment

2:17
gain anybody can give you that but the

2:19
secret sauce is that third ingredient

2:21
the mortality or longevity credits that

2:24
you get from the risk pool and you can't

2:26
get this from stocks or bonds or real

2:28
estate or crypto and it's really the

2:30
secret sauce and and so as people live

2:32
longer and longer and longer you know as

2:34
they cure diseases which i think they

2:36
will um

2:37
payout rates in the future will have to

2:39
go down not because of interest rates

2:40
but because of mortality credits people

2:42
are going to be living longer so that's

2:44
why i am buying i own 11 annuities i

2:46
don't sell them i buy them and own them

2:49
and uh i'm trying to buy as many as i

2:50
can before those mortality credits go

2:52
down i think interest rates you know

2:54
it's kind of confusing because i see

2:56
inflation every day at the pump and at

2:58
the

2:59
at the grocery store but

3:01
the 30 the 30-year government bond the

3:02
smartest market in the world bond market

3:04
still doesn't see inflation it's at 2.1

3:08
for a 30-year bond so i'm i and i'm an

3:10
economist it's a little conundrum for me

3:14
i know and people always get hung up on

3:16
interest rates and for the and this

3:18
podcast is directed toward in 99 of

3:22
people listening are consumers there are

3:23
people that are trying to figure out

3:26
if an annuity is right for them and

3:29
you know there's a there's a demographic

3:30
tidal wave of 10 000 baby boomers

3:32
hitting age 65 every single day

3:35
and we're seeing that demand time for

3:37
for guaranteed income i just read an

3:39
article on that and the fact that people

3:40
like blackrock who's a big money manager

3:43
they're starting to add annuities into

3:44
their 401k plans

3:46
um

3:47
this secret sauce and the mortality

3:49
credits and you mentioned that this is

3:51
and remember everyone tom doesn't sell a

3:54
new he gets paid handsomely for his

3:56
brain and his advice from the standpoint

3:59
of speaking to the industry et cetera he

4:02
does not sell annuities so when he says

4:04
this is a sweet spot

4:06
to buy lifetime income or income type

4:09
annuities because of mortality credits

4:11
being

4:12
at what he sees as attractive

4:15
levels go deeper into that tom and

4:18
explain it to like you're explaining it

4:19
to a nine-year-old why that mortality

4:22
credit

4:23
um is is good right now it might not be

4:26
in a couple years even though kovid has

4:29
been the lurching dark cloud above us

4:31
for a while

4:33
yeah well you know jp morgan believe it

4:35
or not came out with a great piece on

4:37
annuities and say you've got to use them

4:39
because they said an insurance company

4:42
only has to plan for average because

4:44
they're they're looking at a pool of

4:45
thousands and thousands of people where

4:47
individually you have to plan for

4:49
success they only have to plan for

4:50
average because half the people will die

4:52
before the other half the people and so

4:53
they can offer everybody a higher bail

4:55
rate

4:56
you know i tell a story in my books on

4:58
how to explain mortality credits that

5:00
there were five 90 year old ladies who

5:01
went on vacation every year and one lady

5:03
said hey let's each put 100 bucks in

5:05
this box we'll tape up the box and next

5:07
year

5:08
when we go on vacation those of us are

5:10
still alive we'll open the box and we'll

5:11
split the money they said helen that's a

5:13
great idea so you got five 90 year old

5:15
ladies you put 100 bucks in the box they

5:17
taped up the box what do you think

5:19
happened next year they forgot where

5:20
they put the box no unfortunately one

5:22
ladies died so now four ladies open up

5:25
the box they split the 500 they each get

5:27
125 now that was a 25 rate of return in

5:30
12 months no money in the market no

5:32
interest rate how did that happen

5:33
because of mortality credits so ladies

5:35
look at this they look at the brokerage

5:36
account they said that's a pretty good

5:37
deal let's put it all back in the box

5:39
tape it back up and do it again so they

5:41
decided to let it ride the next year one

5:43
more lady died so now three ladies open

5:45
up the box they split the 500 they each

5:47
get 167 dollars that was a 67 return in

5:51
two years no money in the market no

5:52
interest rate why because of mortality

5:54
credits now we get people who say yeah

5:55
but tom i don't want my money to

5:56
disappear when i die you don't have to

5:58
it can go to you could have joint life

6:00
with your spouse you can join life with

6:02
your granddaughter these things can pay

6:03
for a hundred years um but but i was

6:05
just trying to show that that's how

6:07
mortality credits work it's extra money

6:09
from the risk pool

6:11
the older you are the longer you live

6:12
the better deal the income annuity is

6:15
as always tell people there's no roi

6:17
until you die how do you um how do you

6:20
answer the people that they they always

6:22
the hesitation for the investor in the

6:24
raging bull market is fear of missing

6:26
out loss of opportunity my counter that

6:28
that is everyone needs an income floor

6:30
with the current annuity that you own

6:31
which is social security

6:33
how do you

6:34
answer that

6:36
when people make the incorrect

6:38
correlation or comparison to annuities

6:41
and an investment yeah well you know

6:45
most annuities are great bond

6:47
substitutes they're not stock

6:48
substitutes i mean a variable annuity

6:50
you could argue can give you more upside

6:52
because last year there were hundreds of

6:53
variable annuity sub accounts that were

6:55
up over 20 and 30 percent after fee so

6:57
that'd be the closest to kind of

6:58
comparing with the stock market but if

7:00
you're talking a fixed index annuity or

7:02
income annuity that's really a bond

7:04
substitute and it's a great bond

7:05
substitute because what are bonds paying

7:07
right now almost nothing one or two

7:08
percent and yet if interest rates go up

7:10
what times value bonds they could fall

7:12
20 30 40 50 60

7:14
so there's very little upside in bonds

7:16
huge downside risk why not just use your

7:18
bond portfolio i mean the average person

7:20
out there invested is not 100 stock

7:22
there's 60 stock 40 bond so put the 40

7:26
into an annuity you're going to do

7:27
better than if it's a 60 40 uh 60 stock

7:30
40 bond in fact dr

7:33
roger ibbitson you know the ibison

7:35
mountain chart that everybody looks at

7:36
the stock that guy did a study and he

7:38
found that a 60 stock 40 bond portfolio

7:42
underperformed a 60 stock 40 indexed

7:45
annuity portfolio so just use it as a

7:47
bond substitute

7:49
are the are you hearing um confidential

7:52
whispering

7:54
or is it just your instinct and in in

7:57
decades of experience

7:59
on the fact that mortality tables life

8:02
expectancy tables are going to change

8:05
well i mean actually we've had a dip in

8:08
life expectancy because of covid um life

8:11
expectancy actually has come down but

8:13
what motivates done some research is if

8:15
you go back to the pandemic in the early

8:16
1900s that happened too and then life

8:18
expectancy spiked because most of the

8:21
sick and people who were you know many

8:23
of them were gonna die within the next

8:24
year or two anyway now they died early

8:26
and now life expectancy will actually go

8:28
up for the rest of us because we

8:30
survived it and so it's going to be

8:32
interesting to see but yes i mean i

8:34
think the trend of people living longer

8:36
and longer is going to keep going i do

8:38
believe that

8:39
that's an interesting point that you

8:41
just brought up and i was thinking

8:42
that maybe covid

8:44
was a little bit of a slap in a wake-up

8:47
call as people pass away and and were

8:49
past the 700 000 and that's mark and

8:52
that is tragic

8:53
but um

8:54
for me it was kind of i mean i just said

8:56
wait a minute i've got to probably focus

8:58
even more on my health i know that you

8:59
do as well

9:01
um but you just you just walk them down

9:02
really nice golf courses

9:04
um

9:06
and you hit them straight which as soon

9:08
as possible as much as possible um

9:11
do you think that um that's also a

9:14
determining factor are people living

9:15
longer or

9:17
you know how do how do companies annuity

9:20
companies explain to the consumer out

9:21
there

9:22
what they look at when they decide to

9:25
maybe move or change a life expectancy

9:28
table yeah well what's interesting is

9:30
that the life expectancy table for life

9:33
insurance policies is different than the

9:34
life expectancy table they use for

9:36
annuities because people of annuities

9:38
live longer i mean it's a fact i can't

9:40
tell you if you buy annuity for sure

9:41
going to live longer but of a thousand

9:43
people who own annuities versus a

9:44
thousand people who don't the evidence

9:46
is overwhelming that the people with

9:47
annuities live longer because they have

9:49
less stress they worry less

9:51
because they're being paid to live many

9:52
of them choose to live differently they

9:54
watch what they eat they exercise they

9:55
call the doctor and they're not feeling

9:57
well and all these little things cause

9:59
them to tend to live longer and so you

10:01
know i think

10:03
as more and more people realize this the

10:05
evidence shows your portfolio will do

10:06
better if you have an annuity in there

10:08
that you're going to be happier in

10:09
retirement that's what all the research

10:11
shows as well i got i got a dozen slides

10:13
to prove that in articles and now the

10:15
research is that you're going to live

10:16
longer and so i i don't understand the

10:19
pushback against annuities at least as a

10:21
bond substitute they're going to

10:22
outperform bonds i'm not saying as a

10:24
stock substitute i think that's

10:26
i i think people got it but see people

10:28
think that retirement's about having

10:29
this big number this asset my 401k my

10:32
it's that's not what it's about the the

10:34
two things you want to have in

10:35
retirement number one you want of

10:37
increasing income for the rest of your

10:38
life it should be increasing because of

10:40
inflation and then number two is risk

10:42
management what happens if you need

10:43
long-term care what happens if you live

10:45
to be 105. what happens if the market

10:47
crashes 30 and stays down for 20 years

10:49
or 30 years like the japanese stock

10:51
market what if we have inflation what if

10:53
they double or triple your taxes see

10:55
most people who do it themselves they've

10:57
got all these blind spots but they're

10:58
looking at what's my rate of return

11:00
what's my asset

11:01
they're never going to enjoy the

11:02
retirement they're going to be miserable

11:03
in retirement assets make people

11:05
miserable income makes people happy in

11:07
retirement

11:09
and as you as

11:10
your good friend jamie hopkins says it's

11:12
the why the why you know the why that

11:14
makes you cry is what he said recently

11:17
and we did a podcast with him and i

11:18
thought that was interesting because i

11:20
think a lot of the retirement planning

11:22
and income planning people get caught up

11:24
in the number people get caught up in

11:25
the payout people get caught up on roi

11:28
and it's really peace of mind i i wrote

11:31
this down i think the annuity industry

11:32
might need to take your

11:34
your uh heads up on this you know live

11:36
longer by an annuity that might be the

11:38
annuity industry saying right

11:40
well yeah and and and i mean

11:42
i've got all the documentation to back

11:44
it up and i put that references in all

11:46
my books and we just updated paychecks

11:48
and play checks so my books are updated

11:49
with those references and then there's a

11:51
great website out there

11:52
protectedincome.org

11:55
it's protectedincome.org great third

11:56
party resources um

11:58
and and so i mean

12:00
i was with dr michael finka one of the

12:02
smartest guys who were up in iowa and he

12:05
said tom

12:06
there's zero debate zero zero among uh

12:09
economists and and phd's who study

12:11
retirement about if you should have

12:13
annuity it's a hundred percent yes you

12:14
should the discussions are what type and

12:17
when

12:18
and and and so i i you know george

12:20
bernard once said if you laid all the

12:22
economists in the end the world

12:24
end-to-end they still couldn't reach a

12:25
conclusion but they are unanimous that

12:28
you got to put an annuity in your

12:29
portfolio if you want to be really

12:31
successful in retirement do you think

12:33
that the um current surge of banks and

12:36
brokerage firms

12:37
are riaa's starting to now recommend

12:41
annuities is it because i'm going to be

12:43
i'm going to hope that it's because of

12:45
what you just said or is it because of

12:47
revenue

12:48
or both oh i i think i think they fought

12:51
it because they didn't want to do

12:53
annuities because they wanted assets

12:54
under management that many of them get

12:55
paid on assets under management so

12:57
that's what they're focused on they

12:58
thought if they sold annuities they'd

12:59
earn less revenue so they were not being

13:01
fiduciaries by not using a news i think

13:03
what it is is it comes down to math and

13:05
science because here's the deal i've

13:07
talked to some of the top producers in

13:10
insurance and investments all over the

13:11
world they all come to the same

13:12
conclusion you got to use an annuity

13:14
it's all math and science because the

13:16
way that that annuity functions inside

13:18
of a portfolio it functions like a

13:20
triple a rated bond because it's

13:21
guaranteed every single month as long as

13:23
you're breathing those checks are coming

13:25
with a triple c rated yield because the

13:26
payout rate's much higher than what you

13:28
get from a 10-year treasury with zero

13:30
standard deviation it never fluctuates

13:32
so even among the annuity haters i say

13:34
well okay let's say there's no annuities

13:36
let's throw annuity word out what if i

13:37
could get you triple a rated bond with a

13:39
triple c rated deal with zero standard

13:40
deviation oh man i would love that yeah

13:43
well that's how it functions in your

13:44
portfolio

13:46
interesting um had a recent conversation

13:49
with wade fowle and we talked about the

13:50
four percent rule and he kind of shot it

13:52
down

13:54
based on math and math and facts and

13:56
um from the standpoint of people looking

13:58
at the four percent rule just

14:00
um without taking into account

14:03
asian markets european markets etc

14:06
and um i would encourage people to go

14:08
listen to that podcast with wade knight

14:10
because you know he's he's saying if

14:13
that the four percent rule is pretty

14:14
much based on the united states and in

14:17
canada

14:18
and it really doesn't work the majority

14:20
of the time

14:21
when you start looking at a global

14:23
portfolio do you have any comments on

14:25
wade's findings on the on that four

14:26
percent rule because a lot of people

14:28
hang their hat on that especially in a

14:30
raging bull market

14:31
well you know morningstar says it's 2.8

14:33
percent i think dr phil is at 2.4 or

14:36
whatever four percent here's how four

14:38
percent can work okay if somebody has a

14:41
buffer asset so let's say let's say you

14:44
have a diversified portfolio but you got

14:46
a nice big whole life policy or you've

14:48
got a reverse mortgage line of credit or

14:50
you've got some money sitting in a bank

14:51
account somewhere and you can take out

14:54
four percent from your portfolio and any

14:56
year that the market is flat or up but

14:58
if the market is down you do not take

15:00
money out of that portfolio you take it

15:02
out of a buffer asset i'm okay with that

15:05
i think it's sub-optimal i don't think

15:07
it'll give you the same results as using

15:08
an annuity but if somebody wants to do

15:10
that i'm okay with that but they should

15:12
not be having just a portfolio and

15:14
taking four percent that's that's a

15:16
recipe for disaster especially when

15:18
markets are at or near all-time record

15:20
highs because at some point we all know

15:22
with all the funny money it's going to

15:24
stop and the tape bringing the interest

15:25
rate i mean this thing could go down you

15:27
know 20 30 40 50 percent and it's been

15:29
down in europe for 20 years it's been

15:31
down in japan for 30 years right i mean

15:34
i just don't want that to happen to my

15:35
retirement so that's why i've got 11

15:37
annuities i'm going to be able to play

15:38
golf tennis pickleball travel cruise

15:40
regardless of who's in the white house

15:42
who's in congress what's going on with

15:43
inflation what's going on with taxes

15:45
i've got my paychecks i got my play

15:47
checks and i'm going to enjoy my

15:48
retirement

15:50
off topic a little bit but staying in

15:51
the wadefowl lane he also recommends at

15:54
age 62 you start looking into

15:57
um possibly utilizing the equity from

15:59
your home as instead of drawing down on

16:01
your portfolio drawing down on that

16:04
um a little bit outside the box but

16:06
what's your thoughts on that

16:07
so that that's that's one way to do it

16:10
you could also just get a fixed period

16:12
annuity or you could just take money out

16:13
of a different account for those eight

16:15
years i tell people you know in general

16:18
the breadwinner should delay so if you

16:19
have a husband and wife if the husband

16:21
made more money than the wife the wife

16:22
can take her benefit early if she wants

16:24
to i don't have a problem with that but

16:25
the higher earning spouse this case the

16:27
husband should wait why because his

16:29
check covers both lives see when he dies

16:32
she's going to get his if he took as

16:33
early he locked her into a lower

16:35
survivor benefit so the breadwinner

16:36
should delay but in that eight years

16:38
they don't have to go without anything

16:40
they could still take out whatever it

16:41
would have been at age 62 just take it

16:43
out of a different account whether

16:44
that's a reverse mortgage or a whole

16:46
life policy or iul or

16:48
or a bank account you know just take

16:50
again a kind of a buffer asset take

16:52
money out of that for eight years and

16:54
then kick in that highest check for the

16:56
rest of both their lives

16:58
got it you talk about sometimes you you

17:01
use the phrase

17:03
retirement alpha that is not a

17:04
fraternity for people that love

17:06
annuities

17:08
tell the tell the people out there what

17:09
that means to the consumer what's

17:11
retirement alpha okay so first let's

17:14
talk about alpha alpha is the out

17:16
performance that a fund manager brings

17:18
to an investment fund so let's say like

17:20
will dan off ran the fidelity contra

17:23
fund for years he outperformed the s p

17:24
500 his out performance was considered

17:27
alpha he knew what to buy when to buy

17:29
you know what to sell when to sell and

17:31
his his management provided extra

17:33
performance that's called alpha but i

17:35
never heard it associated with an

17:37
insurance or an annuity product but then

17:39
the financial research corporation of

17:42
boston wrote a white paper and they they

17:44
said that these mortality credits are a

17:46
new form of alpha retirement alpha that

17:49
you can't get from stocks or bonds and

17:51
when you really understand these

17:52
mortality credits being a method of

17:55
outperformance that you can't get from

17:56
any other like guaranteed type in

17:59
product

18:00
it's really powerful and again it's all

18:02
based in math and science these aren't

18:04
people's opinions

18:06
retirement alpha a lot of questions i

18:08
get in the world of standing annuity man

18:10
where i'm working hand in hand with

18:13
consumers

18:14
is the internal rate of return or

18:16
expected that and what you're really

18:18
saying is

18:20
it's mortality credits if you're looking

18:21
at lifetime income

18:23
that's really the return the the box

18:25
with the with the the five ladies that

18:27
that example you gave is a very

18:29
simplistic way of explaining a very

18:31
complex

18:32
item which is mortality credits

18:35
how can the annuity industry

18:38
advance the education

18:40
on explaining mortality credits you did

18:44
it and you do it all the time but it

18:46
needs to be done at a massive level

18:49
is that can that be accomplished or is

18:51
that just pie in the sky stuff for the

18:53
new adults i i really think that's what

18:55
that alliance for lifetime income is

18:57
trying to do it's a consortium of many

18:59
different companies that are pitched in

19:01
and they're trying to educate the public

19:02
and they're trying to show that ken

19:04
fisher is not telling the truth out

19:06
there and they're trying to show that

19:08
you know these mortality credits and

19:09
then they try to bring these phds to

19:12
light that that that share the facts

19:14
with people right now they're just

19:15
getting misinformation and once they get

19:17
the facts i mean i wouldn't own 11

19:19
annuities if they were stupid products

19:21
dr david babel had 14. he died in may

19:24
unfortunately but um

19:26
that's tragic yeah he he and i are both

19:28
in this documentary that's coming out

19:30
here shortly on the retirement crisis in

19:32
america and i i that's the first time i

19:34
heard he had a 14 so i've still got some

19:36
work to do because i'm going to pass

19:37
that because i i can't find a product

19:40
that can that can give me more peace of

19:41
mind and and do more for my my wife and

19:44
i that we can live see

19:47
the american college had this thing that

19:49
if you have enough income you can create

19:52
the lifestyle that makes you the

19:53
happiest and so for us we have a place

19:56
in in phoenix that we spend our winters

19:58
it's got two golf courses there we join

20:00
the country club here up at flagstaff

20:01
ranch we have a place up here and we've

20:03
spent the summers up here and i feel

20:05
like a kid i'm playing in match play and

20:07
team match play and i'm the captain of

20:08
the rim cup the captain of the ranch cup

20:10
i won our club championship last year

20:12
the oldest champion in course history so

20:14
i i'm living the lifestyle that makes us

20:17
the happiest we just got back from

20:18
nashville we went for the rolling stones

20:20
concert i mean so so we're living the

20:21
lifestyle that makes us the happiest but

20:23
some of your you some of your listeners

20:25
wouldn't want that they'd want to be in

20:26
a city where they can have dinner and go

20:28
to broadway place but if you have enough

20:30
income coming in you can create the

20:31
lifestyle that makes you the happiest

20:34
how were the stones how was mick oh it

20:36
was awesome like i don't believe one

20:38
single person left that stadium

20:39
disappointed i mean really it was it was

20:42
it was unbelievable and and you know

20:44
what it was really great to see is how

20:46
diversity is has coming across they

20:48
replaced charlie watts with this great

20:50
african-american drummer they had two

20:52
african-american singers and

20:53
african-american on base and on

20:55
saxophone and so it looked like the

20:57
multi-colors of america up there and it

20:59
was really i really thought it was um it

21:02
was an awesome show and i mean of course

21:04
all the

21:05
everything was just over the top it was

21:07
i need mick to write a song called

21:09
mortality credits uh well because

21:12
start me up and never stop being exact

21:16
that is true for people that don't who

21:17
charlie watts is he's the drummer for

21:19
the stones that just passed away and all

21:21
of these cats are in their late 70s i

21:23
think charlie was actually 80 wasn't he

21:25
yeah well i know mick and uh and keith

21:28
are

21:28
78 and uh

21:31
and what is uh uh ronnie wood is 74 i

21:34
think and maybe that's the reason that

21:36
uh i think a couple years back the

21:38
alliance for lifetime income actually

21:40
sponsored

21:42
the rolling stones they are the sole

21:43
sponsor are they still there

21:45
and i i was hanging out of the booth

21:47
talking to people about retirement and

21:48
how important guaranteed lifetime income

21:51
is and and what's interesting when you

21:52
look i got in that crowd and when you

21:54
look out and who is there 50 67 year old

21:57
people some 80 year old people sure some

21:59
30 40 but it was a baby boomer crowd

22:02
that needs the guaranteed lifetime

22:04
income for at least a portion we're not

22:06
talking all their money stan we're

22:07
talking abortion you know 70 to 40 to 60

22:10
somewhere so every time we talk time we

22:12
we we come up with great ideas and the

22:14
great idea from this one is the annuity

22:16
industry

22:17
um they're saying is live longer by an

22:19
annuity and the the song that's playing

22:21
behind that is starting you up by the

22:23
rolling stones yeah um never stop never

22:27
ever ever stop that's the annuity very

22:30
very good um

22:33
i hate to get off on the interest rate

22:34
tangent because you know we've been

22:36
talking about mortality credits etc but

22:38
it does play a part partial role in some

22:41
of the pricing of annuities and

22:42
depending on the type of annuity that

22:43
you have

22:45
is this the new normal i think i asked

22:46
you this the last time but i'm always

22:48
checking in with your pulse on this

22:50
rates at these levels is this the new

22:52
look normal has the government painted

22:54
themselves into a corner is anything

22:56
normal anymore i don't know like i i i

22:59
see things

23:01
and and you know i used to i used to

23:03
follow harry dent a little bit now yeah

23:05
he's controversial but let me tell you

23:07
what he always got the big things right

23:09
but even he how can you predict based on

23:11
cycles when all of a sudden there's two

23:13
trillion dollars here and three trillion

23:15
dollars there and five i mean you can't

23:16
it does it so the government is

23:20
is totally messing around with normal

23:22
economic cycles so i can't tell you

23:24
what's normal but that's why i'm

23:25
planning i'm hoping for the best

23:27
planning for the worst

23:29
but regardless i'm going to have a happy

23:31
retirement

23:33
um harry dent one of the great things

23:35
that people don't know who that is he

23:37
did i think he wrote a book that he was

23:39
predicting the market crash and he also

23:40
wrote a book predicting the market boom

23:42
which i thought was a very nice hedge

23:44
from an author's standpoint because he

23:46
called both i don't know where he's

23:48
landing right now because i'm not i'm

23:50
not following you know

23:51
we're he gets the big things right we're

23:53
we're i wish he wouldn't do it he said

23:55
you know in june of 2022 the market's

23:57
going to go 20 nobody knows what's going

23:59
to happen in china 2020

24:01
and if they print a billion a billion

24:03
dollars or trillion dollars the week

24:04
before that's not gonna happen anyway

24:06
and so that's where i but but i think

24:09
he's just to the point where he can how

24:10
do you predict this stuff anymore with

24:12
all the government intervention the

24:13
printing and spending it's it's a little

24:15
crazy which leads us back well it's kind

24:17
of like predicting the second coming

24:19
that's a tough one

24:20
to call the date on that um

24:23
based on that last comment of just

24:25
everything's unpredictable we're kind of

24:27
in blue water we haven't really seen

24:29
this before how are the annuity

24:30
companies and i know that they talk to

24:32
you in confidence

24:33
and without revealing anything how are

24:35
they feeling about

24:38
where we're at and the fact that it's

24:39
hard for them to predict where we're

24:41
headed

24:42
yeah i mean it is hard uh to be an

24:44
insurance company right now in this low

24:46
interest rate environment how do you

24:47
give people a long-term guarantee when

24:48
you don't know what's going to happen

24:50
with life expectancy and interest rates

24:52
but but again

24:54
read that jp morgan piece that that the

24:56
insurance companies can plan for average

24:58
where you have to plan for optimal and

25:01
and that's why they can do it because

25:03
you know out of a thousand people they

25:04
know half the people are going to die

25:05
before the other half so they can offer

25:07
high payout rates to everybody they know

25:08
they're not only going to have to pay it

25:09
to half the people and so it's again

25:11
it's based in numbers it's based in math

25:13
and science and and so you know the

25:16
mortality credits are still significant

25:18
especially for older people the older

25:19
you are if you're in your 70s and 80s

25:21
man this is boom time for you you know

25:22
you guaranteed double digits on some of

25:24
these spears and diaz single premium

25:26
media annuities deferred income

25:27
interviews you know so i i just think

25:30
and and now they've come out with these

25:32
rileys these registered industrial

25:33
annuities that are really variable

25:35
annuities that don't have fees they put

25:38
some caps but they're much higher and

25:39
they put some floors or buffers in there

25:42
so that people can you know manage their

25:44
risk and so they're developing some new

25:47
things we'll see how it all turns out

25:48
but it's it's interesting times for sure

25:52
let's talk about sequence of return risk

25:54
i think you kind of covered that but i

25:56
want to dig into that a little bit more

25:58
for the for the listener and viewer out

26:00
there that has heard about it just like

26:02
they've heard about mortality credits

26:03
and i think you have

26:04
have done a very good job of explaining

26:06
that can you do the same for sequence of

26:10
return risk well okay so all sequence of

26:12
returns risk says is that the day you

26:14
retire all the investment rules you knew

26:17
go out the window and average returns

26:19
don't mean anything see the whole time

26:21
that you have your 401k your ira average

26:23
returns matter i mean if you get eight

26:24
percent by the six if you get ten

26:26
percent better than eight if you get

26:27
twelve percent better than ten so your

26:28
entire investing life average returns

26:30
mean everything and yet the day you

26:32
retire they're going to mean nothing

26:34
because you can average 10 a year for 22

26:36
years in retirement only take out five

26:38
percent and go dead broke just like that

26:40
and and what it really says is that if

26:42
you're pulling money out of a portfolio

26:45
and the first three two or two or three

26:46
years your retirement the market goes

26:48
down down down and you're pulling money

26:50
out you're highly likely to run out of

26:52
money because here's the deal not only

26:54
is the market going down you have to

26:55
take more and more of the stock or the

26:57
shares all right but you're spending it

26:59
then and so when the market goes back up

27:00
none that grows back and so that can put

27:02
your portfolio into a death spiral

27:05
conversely if you retire and you're

27:06
taking money out of a portfolio in the

27:08
first two or three years the market goes

27:10
up up up the the math and sciences

27:12
you're highly likely to be successful so

27:14
the riskiest time to invest is not when

27:16
you're 87 it's when you're 57 to 67 it's

27:19
those years right before or right after

27:21
retirement you don't want to lose money

27:23
there but i will also tell you this

27:26
because markets now are at or near

27:28
all-time record highs what's the biggest

27:30
risk that is going to keep going or that

27:31
it's going to fall and the the higher

27:33
the market goes the bigger the risk is

27:35
that it's going to fall and so people

27:37
just need to be very careful and if

27:38
they're going to use a portfolio

27:40
strategy they've got to have a buffer a

27:43
buffer asset do not take money out of a

27:45
portfolio in a down market

27:48
which is what everyone does

27:50
well they have to most of them have to

27:51
because their broker says oh you'll be

27:53
okay markets go up and down but over

27:54
time they always go up well that's good

27:56
when you're saving and investing that is

27:57
not good when you're retired

28:00
me and you've been around a long time

28:01
decades and decades i always tell people

28:03
that a lot of the advisors that are out

28:05
there right now

28:06
on the on the stock side the the market

28:09
side

28:10
math cowboy boots older than they they

28:12
they are they have not seen market

28:14
cycles they've not seen things go down

28:17
tom and i have both seen that seen those

28:19
calamities seen people walk out on the

28:21
front lawn and throw up

28:23
seeing people's

28:25
retirement plans go up poof

28:28
and the last time that was

28:30
you know that happened was in that 2008

28:33
time period and we all were told tom and

28:35
i both

28:36
and next time that's never going to

28:37
happen to me that's just never i'm never

28:39
going to do that again

28:40
tom were right back there again where

28:42
people are forgetting

28:44
the past

28:46
and

28:47
that when things go down if you remember

28:49
everything went down stocks went down

28:50
bonds went down gold went like

28:52
everything went down everything went

28:53
down and it's not supposed to be that

28:55
way like when this goes down that's

28:56
what's go up but there was a time when

28:58
everything went down and so um but my

29:01
annuities just they just keep clicking

29:03
you know and so

29:05
um

29:06
i i just i just don't know why a person

29:09
would want to have a retirement

29:10
portfolio

29:12
without an annuity it will be

29:13
sub-optimal it's mathematical scientific

29:16
fact it'll be less than what it could

29:17
what it should be they're going to worry

29:19
more they're going to spend less they're

29:20
going to be less happy uh they'll

29:22
probably not live as long and and i mean

29:24
everybody's got their choice i mean you

29:26
don't have to wear you don't have to

29:27
wear a seat belt well you don't have to

29:28
wear a helmet

29:29
on a motorcycle you can do dumb things

29:31
but i think retiring without an annuity

29:33
is pretty dumb thing can we rephrase

29:35
that they're already retiring with an

29:37
annuity

29:38
social media

29:39
so so that really the thing is

29:42
adding to that adding to the income

29:44
floor that social security provides but

29:47
but people need to understand if they

29:49
don't already social security was never

29:51
put in place

29:53
to be the primary source of retirement

29:54
income it was never put there and and

29:57
unfortunately it is for a lot of people

29:59
but you know the haters that say they

30:01
hate all annuities like well then you

30:02
need to call social security and cancel

30:04
the payments because that's what you're

30:05
getting and really what you're saying is

30:07
you need to look at adding to that

30:08
adding to that income floor which is

30:10
what i say that that's the amount that's

30:12
hitting your bank account every single

30:14
month so tom can go play golf and you

30:16
can go play golfer you can get in the rv

30:18
and go across america

30:20
um tom i was thinking about you the

30:22
other day i was

30:23
i'm a voracious reader of all things

30:25
annuities just to see if anyone's out

30:27
there thinking outside the box a little

30:28
bit

30:29
and last time we were on together we

30:31
talked about bitcoin but i did see the

30:34
first

30:35
salvo across the bow

30:37
there's going to be annuity attached to

30:39
bitcoin did you see that and what's your

30:41
comment i did not i have said the

30:43
insurance company can come up with a

30:45
crypto sleeve on their indexed annuity

30:47
or variability they're going to do very

30:48
well because

30:49
those things can go up a thousand

30:51
percent you know and if you've just got

30:53
a

30:54
a portion of a thousand percent you can

30:56
do pretty darn well and and so i i think

30:59
um you know especially for millennials

31:02
i i think that would be a great entree

31:04
they can have some you know crypto

31:05
exposure and it have some guarantees i

31:08
i'd have to see the details because well

31:09
the details on it where

31:11
your initial salvo um in the way i

31:14
understood it without getting the

31:15
details it was an accredited investor

31:17
type product but i thought it was i

31:20
thought it was interesting that i was

31:22
waiting for it for the first company to

31:24
say okay we're going to figure out how

31:26
to attach that

31:28
asset class

31:29
into an annuity i think it was a

31:31
variable annuity chassis that's a

31:33
managed type product but that's you know

31:36
that's going to break the seal as they

31:37
say

31:39
yeah i'm sure it's a small i'm sure it's

31:41
like a 5 or probably not more than 10

31:43
exposure you know i told you i put one

31:45
percent of my portfolio in there it

31:47
seemed to make sense if i lost one

31:48
percent it wouldn't matter if bitcoin

31:50
goes to a million dollars it'll be a lot

31:51
and and i bought in it when bitcoin was

31:53
three thousand dollars bitcoin and and

31:55
and that thing has grown to be a pretty

31:57
big chunk and it's back up to like 57

32:00
000 a day or whatever i mean yeah i just

32:02
think to have one percent or a very

32:05
small exposure is is prudent i think

32:08
it's more prudent to have one percent

32:09
than zero

32:11
no i agree with that i just think i was

32:14
speaking with someone the other day i

32:15
said i'll guarantee you that every board

32:17
meeting at companies that in the product

32:19
design division

32:21
that's being thrown out because of just

32:24
the fact that

32:25
from

32:26
attracting consumers and attracting

32:28
premium

32:29
it would be the ultimate carrot

32:32
if you had a crypto of some sort i mean

32:34
have to it would have to be pro customer

32:36
and priced

32:37
in the customer's favor

32:39
but also price so that you do what

32:41
company you know survives but um what

32:44
other innovations other than that being

32:47
an obvious one what are you seeing

32:49
or hearing from the companies are they

32:51
just stuck or kind of locked in right

32:53
now to

32:55
just doing what they're doing and and

32:57
repetitive business because of the

32:59
current environment no i mean i think

33:01
the ryla's the the the um you know index

33:04
variables are were a step um sure i

33:07
think you're going to see more products

33:08
where they combine things you know where

33:09
they combine life insurance with

33:11
long-term care with us their money back

33:12
guarantee so it's an emergency fund it's

33:14
a life insurance policy it's long-term

33:15
care i'm working with a company that's

33:17
trying to really crack this long-term

33:19
care crisis because

33:20
it's a big crisis and and you know

33:23
they're they're trying they're

33:24
developing something that tries to keep

33:26
people out of nursing homes so there's

33:28
incentives for doing certain things to

33:31
to stay healthy um seeing your doctor

33:34
regularly you know just just things you

33:36
can do you know walk a couple blocks or

33:38
something just just minor things that as

33:41
you do them then your coverage can

33:43
increase so that but they'll be like

33:45
almost a near guaranteed issue it might

33:47
maybe just two or three initial

33:49
questions uh and if you pass that then

33:51
there's an initial guarantee and then

33:52
then you can earn extra coverage if you

33:54
do it so so they're trying to keep

33:56
people in their houses as long as

33:57
possible out of nursing homes and i

33:59
think there's going to be some

34:01
popularity around that and it's going to

34:02
be on an annuity chassis

34:05
i love that thought i wish you would

34:06
give it love a call under dr fauci and

34:09
say can we talk about people getting in

34:11
better shape or not being overweight can

34:14
we can we go there

34:15
i know it's it's

34:17
fat shaming however little political

34:19
correct term but i do think that

34:22
that's a great product it's an incentive

34:24
product i think that

34:25
i wish the government would go at this

34:27
cova thing

34:28
and say listen we need to be healthier

34:30
we need to watch what we eat we need to

34:32
exercise we need to lose weight as a

34:34
country wouldn't that be a neat

34:36
political

34:37
um stance and it sounds like this

34:40
product is doing that

34:42
and you can choose you i mean you don't

34:44
have to work out and you don't have to

34:46
eat good but if you want this product

34:48
and you want preferential pricing and

34:50
you want better

34:51
better um

34:53
benefits

34:54
then if you follow these things you're

34:55
going to get it

34:57
it sounds like a pretty good blueprint

34:58
to our friends in dc i mean seriously

35:02
yeah i know and and i don't know why

35:04
they don't just encourage people like

35:05
even if you walk for 15 minutes a day or

35:07
20 minutes a day it can do huge it helps

35:10
your it helps your heart it helps your

35:12
lungs it helps i have a friend he was

35:14
always chubby and i saw him one day and

35:16
he goes i go man you're skinny and goes

35:18
tom i swear all i'm doing is walking 20

35:20
minutes a day i walk 20 minutes a day

35:22
and it's just pouring off me so i you

35:24
know there's simple things you can do

35:25
like you know even portion control you

35:27
go to restaurants because they can now

35:29
charge twenty dollars for everything

35:30
they give you this whole huge thing i

35:32
only eat a portion and i take it home

35:33
but i mean portion control be another

35:35
thing you know but they

35:37
i don't know the world right now is so

35:38
upside down i don't even know what's

35:40
going on sometimes what's interesting

35:42
about the product that you just

35:43
described that you're working on with

35:44
this carry and my my thanks for you to

35:47
i'm doing that because i think it's very

35:48
pro pro consumer

35:51
it sounds like a re i'm going to call it

35:53
might not be the the right phrasing but

35:55
a reverse underwritten product meaning

35:57
that

35:59
instead of underwriting for your health

36:01
on the front

36:03
they're saying

36:04
you get the product and then we work on

36:06
our health as you get it and then we

36:08
reward you as you get better am i

36:09
missing something no that's it and this

36:11
isn't really a carrier this is an

36:13
industry kind of an organization that's

36:15
working with characters so there's going

36:17
to be multiple companies that develop a

36:19
product like this but they've and

36:20
they've got like they've got phds and

36:23
all these uh you know rocket scientist

36:25
type people and and they've really and

36:28
and it's um they've really helped crack

36:30
this nut and so we'll see how it all

36:31
goes but i i'm very i'm very optimistic

36:34
because as you know most people do not

36:36
have a plan for long-term care and

36:38
that's going to be a disaster for many

36:40
people it really is i know that you are

36:43
a

36:44
you're one of the most sought after if

36:46
not the most sought after person to

36:48
speak to the industry to speak to

36:51
agents advisors banks insurance

36:53
companies and also consumers i mean you

36:55
do a great job with the consumer message

36:57
that you give

36:58
but

36:59
um i recently heard you speak about

37:02
advanced income planning but you were

37:04
talking to agents because the people

37:07
that hired you wanted that message to be

37:09
directed to agents and advisors

37:11
can you take that same advanced income

37:13
planning

37:15
message

37:16
and for the do it do it yourselfers

37:19
because that's my that's my people

37:21
that's that's the clients i mean i have

37:23
a site that you can run your own quotes

37:24
and

37:25
and it's a do-it-yourselfer type thing

37:26
even though i do sell annuities but i do

37:29
want people to educate them can you do

37:31
an advanced income planning oversight

37:33
for the consumers listening to this or

37:34
watching this yeah well i mean look i

37:37
honestly don't think that wealthy people

37:40
are much different than anybody else

37:42
they got different basic living expenses

37:44
they might have yacht fees they might

37:46
have private jet fees they might have

37:47
you know their jet netjet card or

37:49
something as they consider their basic

37:51
living expenses and so it doesn't really

37:53
matter how wealthy or not wealthy a

37:55
person is that the the the formula is

37:58
the same they should cover those basic

38:00
living expenses with some form of

38:01
guaranteed lifetime income social

38:03
security accounts because it's an

38:04
annuity a pension counts if you have one

38:06
it's an annuity but whatever you're

38:07
short that's where the annuity fits and

38:09
then you can optimize the rest of

38:11
portfolio to protect yourself against

38:13
inflation that's where dividend paying

38:14
stocks fit real estate you know if you

38:16
want oil stocks or whatever maybe you

38:18
don't want to use like whatever you want

38:19
that that fits over here but but the

38:21
research is clear whether you're wealthy

38:23
or not that that that really does work

38:26
the advanced part when you're talking to

38:28
advisors and agents

38:30
um

38:31
you know the consumer always wants to

38:33
hear those things when you're talking

38:35
the advanced part is that looking at the

38:36
entire portfolio and making sure that

38:39
that income floor is in place there's a

38:41
little bit i'm sure it's a little bit

38:42
more broad and detailed than that

38:44
can you can you give the uh the secret

38:46
sauce to the consumer listening and

38:48
viewing this

38:49
kind of what you're telling i'm i'm not

38:51
sure which one you're referring to or

38:53
honestly not i mean i do have a new a

38:55
new webinar that's out there on how i

38:57
teach people how to become millionaires

38:58
and but that's really directed more

39:00
towards generation xyz and millennials

39:03
you know people who are saving and

39:04
investing in i show people how really

39:07
simple it is for young people to become

39:09
millionaires today but you know there's

39:11
a formula you gotta you gotta get really

39:13
good at what you do because you want to

39:14
make more money the more money you make

39:15
the faster you can become a millionaire

39:17
you got to watch your spending people

39:19
are wasting money like crazy you got to

39:21
stop wasting money and you need to put

39:23
money into appreciating assets see cars

39:26
boats rvs jet skis a handbag shoes they

39:29
all go down in value every single day

39:31
you want to put your money into

39:32
appreciating assets things like stocks

39:34
and and maybe annuities in real estate

39:36
and things that go up in value and so

39:38
that that may be what you're talking

39:40
about i'm not sure but um

39:42
that is one of my newest presentations

39:44
for the younger crowd that's my first

39:46
foray into the younger crowd because

39:48
everything i've done is really for baby

39:49
boomers and above

39:51
and you've done a fantastic job for that

39:53
it's been it's been a life's work for

39:54
you coming out of new york life and

39:56
deciding to make this i mean your your

39:59
life's work and

40:00
um you're certainly the legacy that you

40:02
have in places is phenomenal is this new

40:05
book a new direction toward the young

40:07
people

40:08
is that the is that the new passion for

40:10
you i know we talked about this a little

40:12
bit last time

40:14
no i mean i i'm still gonna focus most

40:16
of my efforts on retirement because

40:18
there's still those 78 million baby

40:20
boomers and very few of them

40:22
have it right most of them have it wrong

40:24
and i'm trying to help them get it right

40:25
but i am dipping my toe in with the

40:28
younger people okay because you know

40:29
i've got to look at my succession

40:31
planning too and i've got i've got three

40:33
boys and a daughter i'm thinking one of

40:35
my sons may you know get into it and and

40:37
then he could start doing some videos

40:39
for the younger people so i i'm trying

40:40
to start building a relationship with

40:42
younger people as well but my fault my

40:44
focus is still going to primarily be

40:46
with that baby boom generation because

40:49
if they get it wrong

40:50
they're going to be miserable in

40:51
retirement and i want them to get it

40:53
right and that that's good news for me

40:56
and that's good news for our listeners

40:57
and viewers when you say getting it

40:59
wrong

41:01
and we've gone over some misconceptions

41:03
and those type of things

41:05
what are the main things that people are

41:06
getting wrong other than not being fully

41:08
educated on things like sequence of

41:10
return risk and mortality credits and

41:13
things like that what are what are the

41:15
glaring examples that you think could be

41:17
easily fixed that people are getting it

41:19
wrong well they're dealing with a

41:21
financial advisor who just talks about

41:22
investments stocks bonds etfs crypto

41:25
you know that's not going to get you

41:26
through retirement that'll get you to

41:28
retime and it will not get you through

41:29
retirement they don't have a plan for

41:30
long-term care they'll be wiped out if

41:32
they have a thing for long-term care

41:33
they don't have a plan for taxes going

41:35
up because taxes are going to double or

41:36
triple it's just a math problem it's not

41:38
a republican democrat issue

41:40
they don't have a plan if inflation is

41:42
there they don't have a plan for

41:43
deflation you know

41:44
they don't have a plan if the market

41:46
crashes uh 40 percent and stays down for

41:48
30 years see they they got blind spots

41:51
and so that's doing it wrong you want to

41:54
be able to be happy and successful in

41:55
retirement regardless of what's

41:57
happening and you cannot do it without

42:00
using some insurance products another

42:01
mistake they're making is they're trying

42:03
to leave money to kids you're not

42:05
supposed to leave any money your kids

42:06
you're supposed to spend all your money

42:07
leave them life insurance because you

42:09
can do that for pennies on the dollar

42:11
we're we bought a a million dollar

42:12
policy for our kids second to die it

42:14
only costs 150 000 completely paid up 15

42:17
cents on the dollar we transfer a

42:19
million dollars tax free to them but

42:21
then we get to spend all the rest of

42:22
money and so

42:24
you know too many people are doing it

42:25
wrong i spend my life trying to help

42:27
people do it right much appreciated on

42:30
that is it you know there's all kinds of

42:32
designations you know certified

42:34
financial

42:36
you know cfps cfas semas

42:40
are they not addressing that or is it

42:42
when the the lights are on and the game

42:43
is on the advisor forgets all of that

42:45
because i know the training is there for

42:47
cfp and this type of stuff and i used to

42:49
work for morgan and dean witter and

42:50
peyton webb and ubs the training was

42:53
there but it seems like and i'm an

42:54
ex-athlete when the lights go on you

42:56
either remember the player you don't

42:57
remember the play do you think it's more

42:59
of that

43:00
what where where do you think that the

43:02
advisory business is going wrong well

43:05
you know many of these advisors claim to

43:07
be fiduciaries well if they're

43:08
fiduciaries they're supposed to work in

43:09
the client's best interest but they're

43:11
not using annuities they're not using

43:12
life insurance they're not using

43:13
long-term care insurance oh i'm just an

43:15
investment guy well then don't say

43:16
you're a fiduciary okay you're a fake

43:18
fiduciary because you can't retire

43:21
optimally without using annuities life

43:23
insurance and long-term care insurance

43:24
you cannot i mean the math and i got all

43:26
the math and science anybody wants to

43:27
come and argue with me debate me i got i

43:29
got reams this

43:31
i got the evidence you know they got

43:33
opinions i got the facts and facts beat

43:35
opinions 100 of time and so you know

43:37
they're just doing it wrong and some of

43:39
them are so adamant you know and they're

43:41
worried about the irr well irr in

43:43
retirement is income reliability rate

43:45
okay that's more important they say roi

43:47
what's the roi say that again for people

43:50
yes

43:51
well you know they are thinking irr's

43:54
investment rate of return and in a

43:56
retirement it means income reliability

43:58
rate is way more important than your

43:59
investment rate of return uh and then

44:02
roi return on investment in retirement

44:05
should be reliability of income those

44:07
are way more important so they they've

44:08
got their they've got their focus in the

44:10
wrong place they think it's about making

44:12
money in the market and the markets

44:14
always go up they go up and down all the

44:15
time it goes but over time it always

44:17
goes up that's great for the play check

44:19
that does not work for the paycheck

44:23
jamie hopkins said ros i said what the

44:25
heck is that he goes return on sleep

44:28
he's a big you know lifestyle guy in

44:30
combination with and he's a good friend

44:32
of yours i know that and he's right i

44:34
mean that's part of the whole health

44:36
component the lifestyle component and on

44:38
living a better life not only just

44:41
looking at the numbers um and and

44:43
looking at chapter two of your life from

44:45
a different standpoint i think you

44:46
covered it very well early in the

44:47
podcast talking about

44:49
going through the accumulation phase of

44:50
your life where you're accumulating

44:52
accumulating i think the word that's

44:55
improperly used i wish they would just

44:56
get rid of it is decumulation i don't

44:58
like that because it's just a negative

45:01
word

45:03
what would be your replacement word for

45:05
decumulation

45:07
well i mean that's that's the word that

45:09
that um academics use they use

45:11
decumulation right i talk about the

45:13
income phase that you need guaranteed

45:15
income for the rest your life you know

45:17
the the the retirement phase you know

45:20
all the research shows that people

45:22
are the happiest in retirement are the

45:24
ones who have guaranteed income because

45:25
they can spend the most and see it's

45:27
spending money it's the dinners out it's

45:29
the bottles of wine with your friends

45:30
it's a cruise it's a rolling stones

45:31
concert that's how you enjoy your

45:33
retirement i don't care how many

45:35
millions of dollars you got stashed in

45:36
some account somewhere if you're too

45:38
scared to touch it and you're living

45:39
this just in case just in case just in

45:41
case retirement well then you're gonna

45:42
die and instead of you joining the

45:44
country club and you buying a boat and

45:45
you see in the world it's going to be

45:47
your kids that join the country kids and

45:49
i just want people to enjoy it yes leave

45:51
life insurance to your kids for pennies

45:53
on the dollar but spend all your money

45:55
you're not getting any younger you don't

45:56
get to take any of it with you you're

45:58
supposed to spend it there's no u-hauls

46:00
behind herself as i always say that's

46:03
one of the biggest challenges with my

46:05
clients is trying to convince them

46:07
they've been box checkers and planners

46:09
and scrimpers and savers their whole

46:11
life they've pro a lot of them grow up

46:13
without money now they have money and

46:15
it's hard it's almost a

46:17
disease

46:18
um so yeah i call it psychonomics so so

46:21
i talk about math science and economics

46:23
but i've been talking a little bit about

46:24
psychonomics see

46:26
you got something from your company

46:28
every two weeks your entire working life

46:29
it was called a paycheck and what did

46:31
you do with that paycheck well you paid

46:33
for your house paid for your car you

46:34
went on trips you bought stuff you got

46:36
and spent a paycheck every two weeks

46:38
your entire working career but when was

46:40
the last time you rated your 401k when

46:42
did you take 200 000 out of your ira or

46:44
401k we can't do that we got to save it

46:47
we got to grow we got to protect it we

46:48
can't spend it so they do this for 40

46:50
years and all of a sudden the paycheck

46:52
stops

46:53
but guess what we can't touch it we

46:55
gotta grow it we gotta save we gotta put

46:57
it and so they never touch their assets

46:59
many of these baby boomers are gonna go

47:01
to their graves never touching their

47:02
assets and so what i say is you need to

47:05
take a portion let's just say 40 as a

47:08
rule of thumb 40 of those assets turn

47:10
that into income that's going to give

47:12
you the freedom because you those checks

47:14
will never stop you'll spend every one

47:16
of them and that's what you're supposed

47:17
to do spend your money in retirement and

47:19
they'll never end as long as you and

47:21
your spouse are alive if you do joint

47:22
life those checks are coming you're

47:24
supposed to spend them and then if you

47:26
want to invest with this other stuff you

47:28
can do that but you know good grief

47:30
enjoy your life you're not getting any

47:33
younger you don't get to take any of it

47:35
with you

47:36
and as i tell everyone if you

47:38
if you have the right income floor in

47:40
place and i'm assuming that you tell

47:42
your in your advanced income planning

47:44
with your advisors and agents if the

47:45
right income floor is in place you'll be

47:47
a better investor

47:49
you'll do a better job in the markets

47:50
period it gives you the license to be

47:53
more aggressive and weather the storms

47:55
you can ride out the storm if you don't

47:57
need that money for that month's uh you

47:59
know rent or your house payment or your

48:01
food you can let it go back up because

48:04
markets do go up and down but over time

48:05
they go up but but that doesn't work

48:08
when you're taking money out for your

48:09
paycheck so that needs to come out of a

48:11
guaranteed source and then you can

48:13
actually invest for the long term and

48:15
you can make more money you can leave

48:17
more money if you want to

48:19
always every time that i speak with you

48:21
tom whether it's on air or just

48:23
one-on-one or we see each other

48:26
you can't hide passion and you can't

48:28
hide iq

48:29
and that's tom hegna i mean i'm telling

48:31
you

48:32
if this doesn't motivate you as a

48:34
listener and and viewer

48:36
to look at retirement differently and

48:39
from the standpoint uh that that tom is

48:42
talking about which is lifestyle you can

48:44
get there but you have to put things in

48:46
place and transfer risk along the way

48:50
just like he's saying i do encourage

48:52
everybody um to go to my site at a new

48:55
the annuityman.com i'll have a page

48:58
that's just for tom

48:59
it'll have his website it'll have how to

49:02
get his books it'll have

49:03
everything about him if you want to

49:06
access his materials and learn as well i

49:08
do if you if you buy a book

49:11
buy the paychecks and play checks he's

49:13
oh he's updated it

49:15
and the first time i saw that title i

49:17
was on an airplane and i was like what

49:19
but and that's kind of how i found out

49:20
about tom but that was a long long time

49:22
ago but he's updated the book so

49:25
anything new else on the horizon for you

49:27
tom before we close this thing out well

49:29
i'm just i am

49:31
making a little foray for the younger

49:32
people trying to help them become

49:34
wealthy because i think they're going to

49:35
need millions to be able to retire

49:37
especially when you're looking at what's

49:38
happened to gas prices and food prices

49:40
and and and young people have the time

49:43
older people don't have the time young

49:44
people have the time that the smaller

49:46
dollars can accumulate to a lot

49:49
well said and tom i really appreciate

49:51
you joining us again on fun with

49:52
annuities and for all the listeners and

49:54
viewers out there thanks again for

49:56
tuning in and i will see you next week

49:58
on fun

50:00
with annuities

50:05
thanks for listening to fun with

50:07
annuities please hit the subscribe

50:09
button and make sure to go to my site at

50:11
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50:12
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50:14
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50:17
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50:20
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50:22
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50:24
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50:27
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50:29
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50:32
encourage you to schedule a one-on-one

50:34
call with me stan the annuity man so we

50:37
can have a full discussion of your

50:39
specific situation it will be the best

50:42
brutally factual and truthful advice

50:45
you will ever get and that's one

50:46
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50:48
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50:53
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50:54
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50:55
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50:59
[Music]

51:10
you