Episode 150: Providing Lifetime Income When Annuities May Not Available With Richard Fullmer

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How can companies and governments offer lifetime income for groups of employees or other individuals when annuities may not be available? Richard Fulmer, CEO of Nuovalo and founder of Nuova Longevita Research offers a platform to do so. It’s not a tontine, but it leverages the power of longevity credits to reduce risk in retirement. We discuss use cases outside the U.S. and applicability here.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

Links mentioned:



Thank you to our show sponsor; The Index Standard!

Fixed Index Annuities and RILAs are getting more complex and technical just when fiduciary rules are getting stricter. How do you choose the right index and allocate to them? The Index Standard is your answer. They are an independent provider ratings and forecasts on all indices and ETFs used in the US insurance space. Their process is systematic and unbiased, identifying robust and well-designed indices. We all know finance is complex and The Index Standard has a clear ratings system and uses approachable language to demystify this complexity. Visit theindexstandard.com for more information.



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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 150: Providing Lifetime Income When Annuities May Not Available With Richard Fullmer
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Episode 149: Planning for Rising Inflation and Changing Emotional Needs of Clients With Marguerita Cheng

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Some elements of financial planning for retirement will not change – market risk, health risk, and lifestyle plans. Today, we talk about some recent curveballs with returning guest, Marguerita Cheng. Those surprises include rising inflation. And we spend time talking about what you can’t put in a spreadsheet – the emotional pushes and pulls that clients face in later years.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 149: Planning for Rising Inflation and Changing Emotional Needs of Clients With Marguerita Cheng
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Conference Speaker Offers New Way To View Retirement Assets

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By InsuranceNewsNet

BOSTON – Moshe Milevsky thinks underwriters, risk analysts, and actuaries are seriously overlooking major elements of their business that could produce savings as well as make more money.

In a fast-paced entertaining 45-minute talk in the main ballroom at the Park Plaza here, which is hosting the 2022 Retirement Industry Conference hosted by Secure Retirement Institute and the Society of Actuaries, the fintech entrepreneur and finance professor, focused on “decumulation.” Decumulation is a relatively new word to describe how to calculate strategic ways to use retirement assets while ensuring everything one has accumulated during their life lasts for as long as it’s needed, with some left over for heirs.

Milevsky’s talk, billed as “Longevity Risk Management Post Pandemic: Purpose, Products, and Strategies,” was an examination of three basic factors that insurers might want to redefine or view from new perspectives to better calculate underwriting risks and actuarial tables in a changing world:

  • Inflation
  • Aging
  • Annuities

 The True Definition of Age

“I’m going to challenge you to think carefully about what the definition of inflation and age is and how we really measure them,” he began. “And I’m going to ask you what really is an annuity.”

Milevsky relied on information from two books he’s authored, “Longevity Insurance for a Biological Age,” and the upcoming “How to Build a Modern Tontine,” to show how there is really no single inflation rate – it can vary dramatically by region, age, race, and economic standing. That information should be specifically factored when trying to determine how long a retirement nest egg will last. And he showed how both chronological age as well as biological age should be considered when designing retirement portfolios.

“Your chronological age is simply how many times you’ve circled the sun,” he said.

Biological age, on the other hand, considers factors such as telomeres, the DNA sequences at the end of one’s chromosomes, and other biomarkers that reveal a person’s true health, mortality rate, and life expectancy that may not correlate with chronological age.

“Consider the implications for this as clients – people, humans – start to become aware of this and they’re on their iPhone or Fitbit, or iWatch, and it wakes them up in the morning and tells them their biological age just went up because of something they did last night,” he said.

Everyone wants their biological age to be lower than their chronological age.

“What happens to your retirement planning and asset allocation and investment models when you have two different numbers,” he asked. “What does that mean to an investment advisor, a Social Security Adviser, and so on.”

A Centenarian Trend

Milevsky surprised the audience when he polled them on what country had the most centenarians. The majority of respondents by far chose Japan, over China, US, Indonesia, and India. The answer, however, was the US, with 92,000 chronological centenarians.

“This is a trend that’s increasing,” he said, again raising the implications on mortality rates and life expectancy. “We’re going to have more of them.”

Finally, Milevsky took the audience through the history of tontines, which date back to the 1600s. Tontines are life insurance policies shared by subscribers to a loan or common fund, the shares increasing as subscribers die – the mortality credit – until the last survivor enjoys the entire income. Milevsky said there is a budding realization that tontines could find a resurgence in the retirement asset allocation business.

“More and more asset managers are saying: ‘We get the retirement income story. We get it, we understand that we have to provide them with something,’ ” he said. “But why does it have to be guaranteed? Why can’t we just give them the mortality credits without the capital? And I think you have to keep an eye on what the investment industry is doing. Because this concept appeals to them and they want to compete in that particular space. I think they can do it.”

Essentially, he said, he believes the investment community will begin to buy up assets that appreciate from longevity improvements. “And what they’re going to tell you is we’re going to take that money, and we’re going to put it in things that do well, if indeed, longevity breakthroughs take place,” he said.

Overall, Milevsky said, it’s a good time to be in the retirement business.

“A lot of players are going to come in and say ‘yeah, maybe we can do this differently,’” he said.  “And there is going to be a big focus on managing longevity, expenditures, and uncertainty.”

Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at doug.bailey@innfeedback.com.

For the full article: https://insurancenewsnet.com/conference-post/conference-speaker-offers-new-way-to-view-retirement-assets

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersConference Speaker Offers New Way To View Retirement Assets
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Don’t Move to Another State Just to Reduce Your Taxes

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By Jerry Golden

We know lots of friends who are considering moving from a high-tax state, such as New York, to a state with low or no state income taxes. They think they will end up with more money, although they are torn because they may also be moving away from family and friends just to escape state taxes.

What I advise them to do is think about spendable income — the amount they’ll have to spend after taxes — and not just low or zero tax rates. If you have more money to spend after paying the tax bill wherever you currently live, you might as well stay where you are, if it’s closer to the grandkids. You may be able to pay for at least one warm-weather winter trip, too.

Design a Smarter Retirement Income Plan

Before making life decisions about moving (or downsizing, purchasing insurance, etc.) retirees ought to know their number for their total starting income, and have a plan for retirement income that includes a projection of income and savings, and all planning assumptions.

The income plan ought to cover:

  • Starting income
  • Inflation protection
  • Beneficiary income protection
  • Spousal income (if applicable)
  • Plan management (when plan assumptions are not realized)
  • Market risk to plan (when markets fluctuate)
  • Legacy passed on to beneficiaries or heirs

All these subjects are covered in articles on Kiplinger.com. In one article, How to Generate an Extra $20,000 a Year in Retirement, we examined the income from our favorite investor (a 70-year-old woman with $2 million of savings, of which 50% is in a rollover IRA). We saw a large before-tax income advantage from Income Allocation planning. Even if she invests a portion of that to meet her legacy objective, she still has a $20,000 advantage in spendable annual income.

The question is whether she gives back that advantage in federal and state income taxes in her home state of New York.

Reducing your Combined Federal/State Retirement Tax %

You may have heard that New York is a high-tax state, and that’s true. It ranks No. 5 on Kiplinger’s list of the 10 least tax-friendly states for middle-class families.

Importantly, most states exclude Social Security income from taxation, as well as a portion of IRA distributions and employer pension plans. Together with interest on state and local bonds that is not taxed, a retiree has a head start in reducing state income taxes.

But the question remains how much of that advantage is eaten up in New York state income taxes. The key for our Go2Income planning is that annuity payments are treated the same in both the New York and federal tax returns, meaning the tax benefits carry over. And with some of the adjustments at the state level mentioned above, the favorable tax treatment of annuity payments may be even more valuable.

Let me share with you the high-level elements of our 70-year-old investor’s federal and New York state tax filing.

A table shows a total gross income of $168,183 results in federal taxes of $20,191 and New York state taxes of $3,564.

Benefits and Cost from this Planning

For our investor the income taxed by New York would be around $67,500 — or about 40% of her total gross income. As a percentage of total income, the state income tax is a little more than 2%. Even after adding federal taxes, her Retirement Tax Rate is less than 15%. That leaves her a big advantage in spendable income. A traditional plan without annuity payments and with lower income actually pays more in total taxes — with a combined tax rate of over 18%.

So, our plan produces more cash flow from savings, much of it tax-favored, and gives our retiree the freedom to live where she prefers.

And the cost? The primary one is that annuity payments don’t continue at your passing even before the premium has been recovered.

You can elect a beneficiary protection feature that makes sure total annuity payments will equal the premium at a minimum. However, that choice will reduce the level of guaranteed annuity payments and some of the tax benefits. Or you can use the higher annuity payments to purchase some life insurance. And those planning choices aren’t the only options you will have in terms of beneficiary protection.

What if the lure of zero state income taxes is too great? Our retiree could move to Florida, save the $3,500 in New York taxes, adopt a Go2Income plan for her circumstances — and pay for the kids’ trips to visit her.

So be with the kids, live where you want and possibly leave less at your passing if it’s early in retirement. Bottom line: Don’t follow the crowd. Do your own research. And rely on resources at Kiplinger.

At Go2Income, we can provide you with a complimentary personalized plan that delivers both a high starting income and growing lifetime income, as well as long-term savings.

Read the Full article: https://www.kiplinger.com/retirement/604701/dont-move-to-another-state-just-to-reduce-your-taxes

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersDon’t Move to Another State Just to Reduce Your Taxes
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Looking to Curb Your Retirement Savings? That’s a Bad Idea

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By Brian O’Connell

Americans are doing what they can to deal with skyrocketing inflation.

According to a new survey from New York Life, U.S. adults say they’re cutting back on dining out, and are pushing back big-ticket items like vacations, buying a car, or buying a home. That’s understandable, as consumer prices are up 8.5% on a year-to-year basis through April 2022.

Americans are also curbing their emergency fund contributions, partly to keep focusing on long-term retirement savings, which haven’t hit the chopping block — yet. According to New York Life, monthly household savings contributions are falling by $243 (and $289 by millennials), yet 72% of respondents still expect to retire at their desired age.

Keep the Retirement Train Rolling

With so many Americans whittling away at the household budget, should retirement plan contributions be on the chopping block next?

No way, say investment experts.

“Lost good habits take a long time to recreate,” said Paul Tyler, chief marketing officer at Nassau Financial Group in Hartford, Conn. “It’s much better to learn how to live on less now than live with regret later.”

According to Tyler, when you stop contributing to a retirement fund, you lose a valuable money-growing tool — compound interest.

“Depending on the growth rate of your savings in the future, the compound effect – both positive and negative – can be eye-popping over a twenty-year period,” he said. “So even with the occasional downturns, putting money in a 401(k) or an annuity could prove to the best hedge yet against inflation.”

Other money managers say that retirement funding should be deemed as a major household financial priority, just like food, mortgage payments, and health insurance.

“It’s a big concern when I hear people tell me that they should cut back or reduce their retirement contributions,” said Ashley W. Folkes, director of growth at BridgeWorth Wealth Management. “I like to talk to clients about their financial priorities, very similar to a hierarchy of needs pyramid, as funding retirement is very much foundational to their futures.”

Unless you can’t put food on the table and gas in the tank to get to work, Folkes advises looking at the budget to find other ways to reduce costs.

“Cutting our back on retirement contributions may feel like the easier, softer way to reduce cost, but it can be detrimental,” he said. “It’s very similar to trying to time the market. We don’t know how long inflation will stay at these levels.”

“You’re not only missing out on putting money into a bucket to fund your future, you’re also missing out on buying funds when they are cheap,” he added.

If You Have to Cut Retirement Savings, Try This Approach

Preston P. Forman, a certified financial planner with Seasons of Advice Wealth Management in New York, said he has yet to see clients reduce retirement contributions. But if you have to cut long-term savings, take a short-term mindset.

“For most of this century inflation has been an afterthought but I expect some people will trim their 401(k) contribution,” he said. “After the pandemic, no one is in the mood to deprive themselves of anything.”

Forman advises clients to reduce, not eliminate, retirement contributions if necessary and then reevaluate in three months.

“By then often the storm has passed, and it’s a lot easier to increase a contribution from 10-to-12 percent than from 0-to-12 percent,” he said. “The funny thing is that many clients who were going to cut their contributions never get around to doing it. And that’s a good thing, ultimately.”

Read the full article: https://www.thestreet.com/investing/dont-curb-retirement-savings

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersLooking to Curb Your Retirement Savings? That’s a Bad Idea
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Episode 148: Planning for Very Long Happy Retirement With Steve Vernon

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People are living longer. Much longer. How should that change how we plan for retirement? Steve Vernon, President at Rest-of-Life Communications and Consultant for the Stanford Center on Longevity joins us today to talk about the financial and emotional issues we all need to consider.

Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.

We hope you enjoy the show.


Steve Vernon

Don’t Go Book in Retirement:

Thank you to our show sponsor; The Index Standard!

Fixed Index Annuities and RILAs are getting more complex and technical just when fiduciary rules are getting stricter. How do you choose the right index and allocate to them? The Index Standard is your answer. They are an independent provider ratings and forecasts on all indices and ETFs used in the US insurance space. Their process is systematic and unbiased, identifying robust and well-designed indices. We all know finance is complex and The Index Standard has a clear ratings system and uses approachable language to demystify this complexity. Visit theindexstandard.com for more information.



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Episode 147: Preparing for Life 2 With Don Ezra

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Planning for retirement should not be just about figuring out how to pay the bills when the paychecks end. Planning should be about finding a new identity, purpose, and direction that is fulfilling in later years. Don Ezra, investment expert and author joins us to talk about his own journey into retirement and the guide he has created to help people learn from his own experiences.
Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.
We hope you enjoy the show.
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00:00:01,606 –> 00:00:06,966
[Paul Tyler]: hi this is paul tyler and welcome to another episode of that annuity show ramsey

00:00:07,206 –> 00:00:12,406
[Paul Tyler]: another great guest this time do you want to do the honors and introduce us

00:00:11,840 –> 00:00:18,080
[Ramsey Smith]: absolutely i’d be happy to so we’re joined today by don ezra from sunny toronto

00:00:18,260 –> 00:00:19,260
[Ramsey Smith]: canada

00:00:20,240 –> 00:00:26,000
[Ramsey Smith]: and this is a fantastic opportunity today for a number of reasons but the primary

00:00:25,940 –> 00:00:26,940
[Ramsey Smith]: reason is

00:00:27,760 –> 00:00:31,920
[Ramsey Smith]: that don spends a lot of time talking about what we do and how we feel about

00:00:32,240 –> 00:00:35,280
[Ramsey Smith]: retirement both the transition into retirement and and life

00:00:36,640 –> 00:00:41,040
[Ramsey Smith]: in in retirement or graduation as he likes to put it which i think is a fantastic

00:00:41,120 –> 00:00:47,440
[Ramsey Smith]: word so don spent many years at russell investments and has a phenomenal

00:00:47,520 –> 00:00:49,520
[Ramsey Smith]: background was an actuary but

00:00:49,306 –> 00:00:50,306
[Paul Tyler]: thank

00:00:50,720 –> 00:00:55,040
[Ramsey Smith]: this very interesting thing that that don does he’s forward focused and we’re

00:00:55,040 –> 00:00:57,840
[Ramsey Smith]: going to talk about that and that’s something that all of us in our lives will

00:00:57,920 –> 00:01:01,120
[Ramsey Smith]: have to face and and that annuity show is about more than just the money and so

00:01:01,200 –> 00:01:04,480
[Ramsey Smith]: that’s why is this is really a fantastic opportunity for us so

00:01:05,580 –> 00:01:06,580
[Ramsey Smith]: tell us

00:01:05,946 –> 00:01:06,946
[Paul Tyler]: help

00:01:06,480 –> 00:01:09,840
[Ramsey Smith]: tell us a little bit about your about your journey and and how you came to the to

00:01:09,920 –> 00:01:16,000
[Ramsey Smith]: the conclusion that it was worth it made not just worth it was it was worth it

00:01:16,080 –> 00:01:20,320
[Ramsey Smith]: was an important time opportunity to focus on life after graduation if you will

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[Don Ezra]: absolutely thank you for the the very generous introduction and it’s an honor to

00:01:27,219 –> 00:01:31,459
[Don Ezra]: join the past list of guests you’ve had on your show it’s fantastic thank you

00:01:32,499 –> 00:01:37,379
[Don Ezra]: so i actually retired as the word goes i hate it as you said i prefer graduation

00:01:37,539 –> 00:01:42,419
[Don Ezra]: from full time work but i i retired at a time of my own choosing which many

00:01:42,579 –> 00:01:45,539
[Don Ezra]: people don’t get do and in a way i wanted to do

00:01:46,579 –> 00:01:49,139
[Don Ezra]: and i continued working part time with

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[Don Ezra]: russell and so everything was absolutely perfect and i was absolutely astonished

00:01:49,420 –> 00:01:50,420
[Ramsey Smith]: it’s like everything

00:01:54,259 –> 00:01:59,539
[Don Ezra]: as a result of that to find that i felt completely discombobulated i had no idea

00:01:59,859 –> 00:02:00,979
[Don Ezra]: what had suddenly gone wrong

00:02:02,019 –> 00:02:03,139
[Don Ezra]: but all of a sudden

00:02:04,659 –> 00:02:08,659
[Don Ezra]: things seemed to be falling apart even though i was doing it exactly the way i

00:02:08,739 –> 00:02:11,539
[Don Ezra]: wanted to and and i realized that

00:02:12,279 –> 00:02:13,279
[Don Ezra]: something

00:02:12,506 –> 00:02:13,506
[Paul Tyler]: what

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[Don Ezra]: my friend mayor sta and a professor at santa clara university

00:02:17,379 –> 00:02:22,499
[Don Ezra]: had said was really really really important and i’d never realized he so when

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[Don Ezra]: when

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[Paul Tyler]: what

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[Don Ezra]: when you when you leave work

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[Don Ezra]: you lose part of your identity you lose

00:02:30,419 –> 00:02:34,899
[Don Ezra]: access to your accomplishments you you you lose a community and at russell we

00:02:34,899 –> 00:02:39,379
[Don Ezra]: were not just colleagues we were friends and i lost all of that even though i

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[Don Ezra]: only lost half of it because the rest of the time was all my own

00:02:43,146 –> 00:02:44,146
[Paul Tyler]: the

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[Don Ezra]: but i felt that

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[Paul Tyler]: my

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[Don Ezra]: i i’d been i was a tree that had been uprooted i was

00:02:51,379 –> 00:02:56,499
[Don Ezra]: a very healthy tree it it had grown in soil that nurtured the growth and it was

00:02:56,659 –> 00:03:01,859
[Don Ezra]: thriving and all of a sudden it was uprooted and now i had decisions to me what

00:03:02,019 –> 00:03:06,499
[Don Ezra]: kind of a tree did i want to be where did i want to plant it and wherever i was

00:03:06,659 –> 00:03:12,819
[Don Ezra]: going to plant it the roots would take time to penetrate and grow back again and

00:03:12,979 –> 00:03:17,139
[Don Ezra]: as it happened it took me about three years of thinking about this and

00:03:17,379 –> 00:03:18,819
[Don Ezra]: researching it i mean i

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[Paul Tyler]: oh

00:03:18,899 –> 00:03:21,299
[Don Ezra]: was a consultant what do consultants do other than research

00:03:22,419 –> 00:03:26,659
[Don Ezra]: and benefit from other people’s wisdom which they absorb it took me three years

00:03:27,059 –> 00:03:29,779
[Don Ezra]: before i realized the kinds of things i wanted to do

00:03:30,979 –> 00:03:34,979
[Don Ezra]: and and part of that was actually moving from new york back to toronto which i

00:03:35,059 –> 00:03:39,299
[Don Ezra]: had left twenty five years earlier and it was all that kind of stuff

00:03:40,339 –> 00:03:46,019
[Don Ezra]: that that made me realize that transition i mean we talk about retirement as if

00:03:46,179 –> 00:03:49,379
[Don Ezra]: yesterday you were working today or retired transition is actually

00:03:49,619 –> 00:03:54,419
[Don Ezra]: psychologically a very important stage and in my case it was a three year long

00:03:54,579 –> 00:03:58,579
[Don Ezra]: stage and one of the things that the guys at russell had me do was the first

00:03:58,340 –> 00:03:59,340
[Ramsey Smith]: yeah

00:03:58,819 –> 00:04:03,859
[Don Ezra]: year into that they had me back at the client conference which it had been my job

00:04:04,019 –> 00:04:05,939
[Don Ezra]: to organize in the past and they

00:04:05,746 –> 00:04:06,746
[Paul Tyler]: i think

00:04:06,019 –> 00:04:11,379
[Don Ezra]: had me give a keynote just describing myself s in retirement and it’s the only

00:04:11,619 –> 00:04:18,099
[Don Ezra]: time in my life i ever had a standing ovation and i know what it was i mean we

00:04:18,179 –> 00:04:22,179
[Don Ezra]: were friends with the clients too so they they liked the old guy they were seeing

00:04:22,179 –> 00:04:24,419
[Don Ezra]: in front of them like seam again et cetera

00:04:24,266 –> 00:04:25,266
[Paul Tyler]: what

00:04:24,499 –> 00:04:29,059
[Don Ezra]: etc but i think they realized that this was something they were going to have to

00:04:29,139 –> 00:04:33,619
[Don Ezra]: go through and the honesty of here’s how i feel here’s what i’m doing here’s

00:04:33,619 –> 00:04:38,099
[Don Ezra]: what’s going right here’s what i’m wondering about i think i think that got

00:04:38,339 –> 00:04:42,259
[Don Ezra]: through to them in a very personal way because they knew they were going to have

00:04:42,319 –> 00:04:43,319
[Don Ezra]: to go through that as well

00:04:43,466 –> 00:04:44,466
[Paul Tyler]: then

00:04:44,579 –> 00:04:48,659
[Don Ezra]: and it was as a result of that that i thought ok can i be a consultant again can

00:04:48,739 –> 00:04:53,779
[Don Ezra]: i research this and so i started researching in god bless the internet and and

00:04:53,939 –> 00:04:59,459
[Don Ezra]: that ended up first in a book on happiness because i’d been studying the brain

00:04:59,619 –> 00:05:03,859
[Don Ezra]: for behavioral finance considerations and stuff like that and after that into

00:05:05,379 –> 00:05:10,339
[Don Ezra]: what are the issues that are involved that have caused me to be to be so

00:05:11,139 –> 00:05:16,419
[Don Ezra]: uncomfortable i don’t know if combobulated is a word but after being disco bob i

00:05:16,579 –> 00:05:18,259
[Don Ezra]: finally got cobo bl it again

00:05:20,019 –> 00:05:24,259
[Don Ezra]: and it occurred to me that sort of if you think of this as a journey life this is

00:05:24,419 –> 00:05:29,219
[Don Ezra]: a journey through the second part of your life it’s long enough to be a life so i

00:05:29,279 –> 00:05:30,279
[Don Ezra]: call it life too

00:05:31,239 –> 00:05:32,239
[Don Ezra]: the

00:05:32,746 –> 00:05:33,746
[Paul Tyler]: no

00:05:33,219 –> 00:05:38,419
[Don Ezra]: there are there are some rocks you need to avoid and as i thought about it i mean

00:05:38,579 –> 00:05:42,659
[Don Ezra]: education is the way to do this but what are the subjects it’s not history math

00:05:42,819 –> 00:05:47,379
[Don Ezra]: geography literature and stuff like that the three rocks to avoid there’s there’s

00:05:47,619 –> 00:05:52,739
[Don Ezra]: there’s an identity rock there’s an activity rock and there’s a money rock so

00:05:52,899 –> 00:05:54,979
[Don Ezra]: exactly as she said ramsey there’s there’s much

00:05:54,586 –> 00:05:55,586
[Paul Tyler]: oh

00:05:55,059 –> 00:05:56,339
[Don Ezra]: more to this than just money

00:05:57,699 –> 00:06:01,939
[Don Ezra]: and some people avoid them all some people hit them all but if you’re aware of

00:06:01,939 –> 00:06:07,299
[Don Ezra]: those rocks the identity the activity and the money rocks at least you know what

00:06:07,379 –> 00:06:12,499
[Don Ezra]: you’re looking for and you can get i put together as much wisdom as i could

00:06:12,579 –> 00:06:14,979
[Don Ezra]: assemble from other people’s lives and my own

00:06:16,179 –> 00:06:19,619
[Don Ezra]: and then put them under these headings and say what can you do

00:06:20,899 –> 00:06:26,259
[Don Ezra]: how do you identify the issues and these headings in your own life and then what

00:06:26,499 –> 00:06:31,939
[Don Ezra]: questions can you ask yourself to relate to how you can then start to at least be

00:06:32,019 –> 00:06:37,779
[Don Ezra]: in control it’s it’s like most people have fear and dread when they think about

00:06:37,939 –> 00:06:41,859
[Don Ezra]: retirement they they they don’t want it it’s they don’t say that they say it’s

00:06:41,859 –> 00:06:45,939
[Don Ezra]: too complicated but it’s not actually too complicated for them it’s just they

00:06:45,939 –> 00:06:50,899
[Don Ezra]: don’t want to think about it they’re scared and so that’s that’s where i where i

00:06:51,059 –> 00:06:55,299
[Don Ezra]: tried to help with the book and with my blog posts on my website and stuff like

00:06:54,999 –> 00:06:55,999
[Don Ezra]: that

00:06:55,926 –> 00:06:59,446
[Paul Tyler]: so three rocks i love it uh

00:07:00,566 –> 00:07:06,406
[Paul Tyler]: do you navigate the rocks by yourself or on who helped you navigate your rocks

00:07:06,806 –> 00:07:08,566
[Paul Tyler]: who were the guides along that path

00:07:09,559 –> 00:07:10,559
[Don Ezra]: well

00:07:10,560 –> 00:07:11,760
[Ramsey Smith]: we see that too

00:07:11,139 –> 00:07:14,739
[Don Ezra]: they say there are ten thousand baby boomers a day retiring now

00:07:16,019 –> 00:07:20,739
[Don Ezra]: and they don’t have enough help et cetera baby boomers baby boomers are kids to

00:07:20,739 –> 00:07:23,699
[Don Ezra]: me i’m a world war two baby so i had

00:07:23,500 –> 00:07:24,500
[Ramsey Smith]: hm

00:07:24,019 –> 00:07:28,419
[Don Ezra]: absolutely no help so i had to do this myself i think more and more

00:07:28,186 –> 00:07:29,186
[Paul Tyler]: i

00:07:28,659 –> 00:07:33,939
[Don Ezra]: today there are people who are becoming experts in this area who can help you on

00:07:33,999 –> 00:07:34,999
[Don Ezra]: the money side of course

00:07:34,586 –> 00:07:35,586
[Paul Tyler]: st

00:07:36,579 –> 00:07:40,499
[Don Ezra]: there are there’s expertise all over the place but on the psychological side

00:07:42,019 –> 00:07:46,979
[Don Ezra]: more and more that there are retirement planners who are coming along who who

00:07:47,219 –> 00:07:50,819
[Don Ezra]: retire and coaches is i think they call themselves and they deal with the

00:07:50,899 –> 00:07:55,539
[Don Ezra]: psychological and practical aspects as opposed to the financial aspect so it is

00:07:55,619 –> 00:07:57,219
[Don Ezra]: possible to get help these days

00:07:58,800 –> 00:08:00,880
[Ramsey Smith]: but what is the best way to think about

00:08:02,080 –> 00:08:06,960
[Ramsey Smith]: like let’s start with the identity rock that’s a that’s a really tough one that’s

00:08:07,040 –> 00:08:12,080
[Ramsey Smith]: that in some ways that’s the you know that seems like the the the least solvable

00:08:12,320 –> 00:08:15,440
[Ramsey Smith]: one of the hardest one to solve right because it’s so it’s so

00:08:15,459 –> 00:08:17,139
[Don Ezra]: i i think you spot on yeah

00:08:15,600 –> 00:08:23,280
[Ramsey Smith]: sub subjective yeah so so how do people so jill or john is retiring and they’re

00:08:23,280 –> 00:08:28,320
[Ramsey Smith]: dealing with this i mean you took three years and you know you took you worked on

00:08:28,400 –> 00:08:30,240
[Ramsey Smith]: it very deliberately so

00:08:29,626 –> 00:08:30,626
[Paul Tyler]: oh

00:08:30,106 –> 00:08:31,106
[Paul Tyler]: god

00:08:30,119 –> 00:08:31,119
[Don Ezra]: yeah

00:08:31,280 –> 00:08:35,040
[Ramsey Smith]: what should people expect is the right amount of time for that transition and

00:08:35,360 –> 00:08:39,200
[Ramsey Smith]: what are the most concrete steps they can make to get to get going on it

00:08:40,659 –> 00:08:44,899
[Don Ezra]: i i think i think you probably ought to start maybe at five years before you’re

00:08:44,979 –> 00:08:46,019
[Don Ezra]: planning to graduate

00:08:45,980 –> 00:08:46,980
[Ramsey Smith]: wow okay

00:08:48,339 –> 00:08:51,859
[Don Ezra]: and start thinking about well one of the reasons is that i’ve seen statistics

00:08:51,859 –> 00:08:57,059
[Don Ezra]: that say half of retirees retired before they planned to

00:08:56,546 –> 00:08:57,546
[Paul Tyler]: it is

00:08:58,099 –> 00:09:02,899
[Don Ezra]: i mean it it it it it could be uh your ill health the ill health of someone else

00:09:03,299 –> 00:09:07,219
[Don Ezra]: you have to look after it could be layoffs it could be all kinds of things but

00:09:07,459 –> 00:09:11,459
[Don Ezra]: half of people don’t retire when they’re planning to so give it five years to

00:09:11,759 –> 00:09:12,759
[Don Ezra]: think about it

00:09:15,219 –> 00:09:19,859
[Don Ezra]: and i think some of the things you need to think about as what is important to

00:09:19,479 –> 00:09:20,479
[Don Ezra]: you

00:09:21,139 –> 00:09:22,979
[Don Ezra]: as i quoted mayor staten

00:09:24,019 –> 00:09:25,619
[Don Ezra]: the more successful you’ve been

00:09:26,979 –> 00:09:29,139
[Don Ezra]: the more your identity is tied to your work

00:09:30,979 –> 00:09:36,179
[Don Ezra]: and the more your life sort of surrounds it in fact until covid came along

00:09:36,180 –> 00:09:37,180
[Ramsey Smith]: yes

00:09:36,819 –> 00:09:41,379
[Don Ezra]: most of us the happier we were at work spent far more time at work than we ever

00:09:41,619 –> 00:09:47,139
[Don Ezra]: did at home and in fact having to work from home i understand has driven the

00:09:47,219 –> 00:09:55,299
[Don Ezra]: divorce rate up so it’s it’s yeah it’s not an easy thing to come back so it’s

00:09:55,299 –> 00:09:59,699
[Don Ezra]: partly the activity the combined activity but partly the identity thing too so

00:10:00,019 –> 00:10:01,539
[Don Ezra]: who am i is the big question

00:10:02,279 –> 00:10:03,279
[Don Ezra]: and

00:10:04,179 –> 00:10:08,659
[Don Ezra]: i i found there were a couple of sets of questions to ask yourself

00:10:10,099 –> 00:10:15,699
[Don Ezra]: that tend to help here at at a very very very high level gentleman named george

00:10:15,779 –> 00:10:22,179
[Don Ezra]: kinder i came up with with three life questions and there as follows one is

00:10:23,999 –> 00:10:24,999
[Don Ezra]: you have all the money

00:10:25,939 –> 00:10:28,579
[Don Ezra]: you want how would you live your life okay

00:10:29,479 –> 00:10:30,479
[Don Ezra]: question two

00:10:31,299 –> 00:10:33,939
[Don Ezra]: you’ve just been told you have five to ten years to live

00:10:34,979 –> 00:10:36,179
[Don Ezra]: how would you change your life

00:10:37,859 –> 00:10:43,059
[Don Ezra]: question three you’ve just been told you have twenty four hours to live what are

00:10:43,119 –> 00:10:44,119
[Don Ezra]: your regrets

00:10:45,219 –> 00:10:47,059
[Don Ezra]: and out of that you can start

00:10:48,099 –> 00:10:51,699
[Don Ezra]: i mean these are not questions you answer in sixty seconds these are questions

00:10:51,939 –> 00:10:56,179
[Don Ezra]: you ponder over and take your time over and perhaps every five years you want to

00:10:55,959 –> 00:10:56,959
[Don Ezra]: rethink them

00:10:57,779 –> 00:11:01,139
[Don Ezra]: but these are things that ought to give you some sense of what is the most

00:11:01,459 –> 00:11:07,539
[Don Ezra]: important purpose i have etc etc etc that’s a very high level one at a lower

00:11:07,619 –> 00:11:12,739
[Don Ezra]: level one another one i found very useful is is by a guy named ed jacobson

00:11:13,779 –> 00:11:20,419
[Don Ezra]: who came up with the concept of a life’s abundance portfolio so a portfolio is

00:11:20,499 –> 00:11:25,379
[Don Ezra]: just a collection of things under different headings and this is your life’s

00:11:25,379 –> 00:11:28,899
[Don Ezra]: abundance and he said there were seven different factors

00:11:28,580 –> 00:11:29,580
[Ramsey Smith]: no

00:11:28,979 –> 00:11:33,219
[Don Ezra]: to me there’s seven asset classes in the life’s abundance portfolio and i cannot

00:11:33,159 –> 00:11:34,159
[Don Ezra]: remember

00:11:35,699 –> 00:11:41,219
[Don Ezra]: the names ed gave it but i remember them myself very simply in pairs family

00:11:41,999 –> 00:11:42,999
[Don Ezra]: and friends

00:11:43,859 –> 00:11:45,139
[Don Ezra]: work and play

00:11:46,279 –> 00:11:47,279
[Don Ezra]: mental health which

00:11:47,060 –> 00:11:48,060
[Ramsey Smith]: you

00:11:47,379 –> 00:11:49,219
[Don Ezra]: includes spirituality and

00:11:48,980 –> 00:11:49,980
[Ramsey Smith]: w

00:11:49,299 –> 00:11:51,939
[Don Ezra]: physical health i said there were seven oh yes money

00:11:52,020 –> 00:11:53,020
[Ramsey Smith]: so

00:11:52,979 –> 00:11:58,179
[Don Ezra]: so these are the seven asset classes in your life’s abundance portfolio and on

00:11:58,259 –> 00:12:02,979
[Don Ezra]: each of them give yourself a personal rating where am i on a scale of zero to ten

00:12:03,299 –> 00:12:07,139
[Don Ezra]: where would i wreck myself there are no right answers or wrong answers and only

00:12:07,299 –> 00:12:11,619
[Don Ezra]: your answer is relevant people may say you’re an awful so and so and you should

00:12:11,699 –> 00:12:15,459
[Don Ezra]: rate yourself very lowly on that no no no only your own answer is

00:12:15,380 –> 00:12:16,380
[Ramsey Smith]: what

00:12:15,539 –> 00:12:20,499
[Don Ezra]: relevant so rate yourself there and then look back on your ratings and say are

00:12:20,579 –> 00:12:23,539
[Don Ezra]: there which are the ones i’m comfortable with i mean you could be comfortable

00:12:23,539 –> 00:12:27,539
[Don Ezra]: with a force somewhere and uncomfortable with the seven that’s okay which are the

00:12:27,619 –> 00:12:31,779
[Don Ezra]: ones i’m uncomfortable with and then what is in my power

00:12:33,299 –> 00:12:38,499
[Don Ezra]: to raise my rating in those asset classes in my life’s abundance portfolio and

00:12:38,739 –> 00:12:43,619
[Don Ezra]: that starts to give you some feeling of what are the things you can do that are

00:12:43,699 –> 00:12:48,899
[Don Ezra]: more important to you etc etc etc and one of the other things this starts to

00:12:50,499 –> 00:12:56,339
[Don Ezra]: to get to and it took me far more than my personal three years of transition to

00:12:56,499 –> 00:13:01,859
[Don Ezra]: come to this realization that one of the things that has become important to me

00:13:02,179 –> 00:13:10,019
[Don Ezra]: personally is the legacy i leave not financial legacy the emotional legacy will

00:13:10,259 –> 00:13:15,699
[Don Ezra]: people think of me after i’m gone on this earth that’s as close to immortality

00:13:15,779 –> 00:13:20,659
[Don Ezra]: i’m likely to get and it’s gonna be family and friends and it’ll be for a few

00:13:20,819 –> 00:13:24,819
[Don Ezra]: years that’s it but will they think of me happily

00:13:26,199 –> 00:13:27,199
[Don Ezra]: i

00:13:28,099 –> 00:13:30,339
[Don Ezra]: the way i’ve been behaving they will think of me

00:13:31,779 –> 00:13:36,419
[Don Ezra]: not only with the smile but with a laugh because i’ve they they keep pointing out

00:13:36,579 –> 00:13:41,219
[Don Ezra]: all the stupid things that this very intelligent person does and they say oh do

00:13:41,219 –> 00:13:45,219
[Don Ezra]: you see what don just did oh uncle don did so and so grand et cetera et cetera

00:13:45,079 –> 00:13:46,079
[Don Ezra]: and and

00:13:47,699 –> 00:13:54,179
[Don Ezra]: i i love i love that because intellect is not what this is all about money

00:13:54,739 –> 00:13:59,219
[Don Ezra]: financial legacy is not what this is all about it’s the emotional legacy that at

00:13:59,299 –> 00:14:04,019
[Don Ezra]: this stage of my life has become important to me and i think questions like that

00:14:04,899 –> 00:14:08,659
[Don Ezra]: start to start to change your mindset it may take a

00:14:08,266 –> 00:14:09,266
[Paul Tyler]: i

00:14:08,659 –> 00:14:13,139
[Don Ezra]: long time as i say particularly the more successful we’ve been the longer it

00:14:13,219 –> 00:14:16,899
[Don Ezra]: takes for us to say but that was in the past what about the future

00:14:17,939 –> 00:14:22,179
[Don Ezra]: and and that’s why that’s why i describe myself not just as retired because

00:14:22,259 –> 00:14:23,859
[Don Ezra]: retired is a backward looking word

00:14:25,059 –> 00:14:30,339
[Don Ezra]: but happily retired because i i i feel i’m in the driver’s seat i i still have to

00:14:30,419 –> 00:14:33,379
[Don Ezra]: make decisions on direction on speed

00:14:34,419 –> 00:14:40,419
[Don Ezra]: but in my life’s car at least i’m in the driver’s seat and that’s as as any as

00:14:40,359 –> 00:14:41,359
[Don Ezra]: anyone could have

00:14:41,686 –> 00:14:47,766
[Paul Tyler]: yeah i i’m not sure many people have a true accounting of their assets for

00:14:47,846 –> 00:14:51,606
[Paul Tyler]: happiness right don i think it also adds a whole nother

00:14:52,886 –> 00:14:54,006
[Paul Tyler]: layer to the question of

00:14:55,126 –> 00:14:56,486
[Paul Tyler]: are you leading a rich life

00:14:59,219 –> 00:15:01,699
[Don Ezra]: beautifully put yes exactly exactly

00:15:03,360 –> 00:15:08,480
[Ramsey Smith]: so one of the things that that comes to mind is as i listen to you spell out

00:15:08,640 –> 00:15:11,680
[Ramsey Smith]: these these various priorities these two different sort of paradigms for

00:15:11,760 –> 00:15:15,680
[Ramsey Smith]: priorities is in the in the first or the second one it was interesting that that

00:15:15,840 –> 00:15:19,280
[Ramsey Smith]: money came last and the first one money i don’t believe it was mentioned

00:15:19,440 –> 00:15:20,480
[Ramsey Smith]: mentioned at all

00:15:21,300 –> 00:15:22,300
[Ramsey Smith]: and

00:15:21,799 –> 00:15:22,799
[Don Ezra]: right man

00:15:22,780 –> 00:15:23,780
[Ramsey Smith]: one of the things i think is

00:15:23,399 –> 00:15:24,399
[Don Ezra]: what

00:15:23,840 –> 00:15:26,640
[Ramsey Smith]: often lost on people is that how you prioritize

00:15:26,519 –> 00:15:27,519
[Don Ezra]: right

00:15:27,360 –> 00:15:31,520
[Ramsey Smith]: all those quality of life issues actually can really help

00:15:31,079 –> 00:15:32,079
[Don Ezra]: i

00:15:31,680 –> 00:15:35,520
[Ramsey Smith]: inform the right answer on the money problem right and sometimes

00:15:35,399 –> 00:15:36,399
[Don Ezra]: that

00:15:36,160 –> 00:15:38,880
[Ramsey Smith]: sometimes we’re trying to fix things with money when they’re not really money

00:15:39,040 –> 00:15:42,720
[Ramsey Smith]: problems and that creates stress in and of itself so so

00:15:42,759 –> 00:15:43,759
[Don Ezra]: so so

00:15:43,340 –> 00:15:44,340
[Ramsey Smith]: h how do you

00:15:44,026 –> 00:15:45,026
[Paul Tyler]: and

00:15:45,180 –> 00:15:46,180
[Ramsey Smith]: do you think that

00:15:45,879 –> 00:15:46,879
[Don Ezra]: you

00:15:46,400 –> 00:15:50,640
[Ramsey Smith]: that in in the world of advice if you will do you think this should be a more

00:15:50,620 –> 00:15:51,620
[Ramsey Smith]: important part of

00:15:53,680 –> 00:15:59,440
[Ramsey Smith]: the the advising that is given to retirees potential retirees and maybe is the

00:15:59,220 –> 00:16:00,220
[Ramsey Smith]: case today

00:16:01,779 –> 00:16:08,659
[Don Ezra]: i yes i think so but i think the the client has to be open to it and in fact ed

00:16:08,819 –> 00:16:15,299
[Don Ezra]: jacobson’s life’s abundance portfolio was something i came across at an aicpa

00:16:15,459 –> 00:16:20,579
[Don Ezra]: conference so accountants and ed was speaking we were both speaking there and so

00:16:20,819 –> 00:16:25,379
[Don Ezra]: i done my stuff and and here was a session about having good conversations with

00:16:25,459 –> 00:16:26,579
[Don Ezra]: clients that was what ed

00:16:26,260 –> 00:16:27,260
[Ramsey Smith]: uhhuh

00:16:26,739 –> 00:16:30,979
[Don Ezra]: was talking about and one of the things he mentioned was here are some subjects

00:16:31,059 –> 00:16:34,739
[Don Ezra]: you can talk about and call it the life of life’s abundance portfolio et cetera

00:16:34,739 –> 00:16:40,259
[Don Ezra]: but it’s not always easy to raise the subject one of the things i remember him

00:16:40,419 –> 00:16:44,579
[Don Ezra]: saying was that you want to if you were the one raising the subject

00:16:45,699 –> 00:16:49,459
[Don Ezra]: you want to raise it at a time when things are going well from an investment and

00:16:49,619 –> 00:16:53,459
[Don Ezra]: financial point of view otherwise there might be a suspicion that you’re raising

00:16:53,539 –> 00:16:58,579
[Don Ezra]: it for other reasons so raise it at when other things are going well and

00:16:58,386 –> 00:16:59,386
[Paul Tyler]: i mean

00:16:58,659 –> 00:17:03,939
[Don Ezra]: now you can introduce these new subjects and it’s not always easy to get client’s

00:17:04,019 –> 00:17:08,259
[Don Ezra]: attention because they’ve got to give of themselves much more personally this way

00:17:08,579 –> 00:17:12,979
[Don Ezra]: they have to open up they have to expose themselves and it’s very difficult but

00:17:13,059 –> 00:17:18,339
[Don Ezra]: if you can get a client involved in that way these are things that are that are

00:17:18,499 –> 00:17:19,619
[Don Ezra]: doubly helpful because

00:17:20,659 –> 00:17:23,219
[Don Ezra]: they’re they they’re helpful not only in the

00:17:22,986 –> 00:17:23,986
[Paul Tyler]: i

00:17:23,379 –> 00:17:29,299
[Don Ezra]: conversation and helping the client shape their lives in the future but also

00:17:30,659 –> 00:17:34,259
[Don Ezra]: it allows them to focus on things other than money and

00:17:34,100 –> 00:17:35,100
[Ramsey Smith]: mm hm

00:17:34,339 –> 00:17:38,419
[Don Ezra]: then from your point of view i think it it it helps as well because

00:17:39,859 –> 00:17:44,019
[Don Ezra]: i read i don’t know if this is still true or not because i i don’t have the facts

00:17:44,099 –> 00:17:48,659
[Don Ezra]: but i read that many people have multiple advisors

00:17:49,939 –> 00:17:52,899
[Don Ezra]: and they would like to consolidate under one advisor

00:17:53,939 –> 00:17:59,539
[Don Ezra]: i think the likelihood of being that one advisor is higher if in fact you were

00:17:59,699 –> 00:18:04,099
[Don Ezra]: talking holistically about the whole life’s abundance portfolio then if all

00:18:04,179 –> 00:18:07,539
[Don Ezra]: you’re doing is talking about you know here was your return in the last month the

00:18:07,619 –> 00:18:11,139
[Don Ezra]: last year the last five years et cetera et cetera et cetera because

00:18:12,239 –> 00:18:13,239
[Don Ezra]: that also helps

00:18:14,599 –> 00:18:15,599
[Don Ezra]: for well for

00:18:16,819 –> 00:18:22,179
[Don Ezra]: for example for for people who are not necessarily financially very

00:18:23,219 –> 00:18:27,779
[Don Ezra]: interested literate whatever the word is take my wife she’s a very very very

00:18:27,879 –> 00:18:28,879
[Don Ezra]: intelligent person

00:18:30,259 –> 00:18:33,379
[Don Ezra]: but she does not want to get involved in finance she leaves that to me

00:18:34,819 –> 00:18:37,699
[Don Ezra]: the one thing she understands about our

00:18:37,779 –> 00:18:45,299
[Don Ezra]: arrangements are that we have enough all our needs permanently and as far as our

00:18:37,866 –> 00:18:38,866
[Paul Tyler]: what

00:18:45,439 –> 00:18:46,439
[Don Ezra]: wants are concerned

00:18:47,779 –> 00:18:52,979
[Don Ezra]: that depends on where markets are et cetera et cetera et cetera and we have we

00:18:53,059 –> 00:18:57,379
[Don Ezra]: have set up a our own portfolio this ’cause this was my

00:18:58,419 –> 00:19:02,259
[Don Ezra]: world war two having to do things for myself i learned i learned from my pension

00:19:02,339 –> 00:19:07,539
[Don Ezra]: fund clients to first you survive then you thrive so we’ve got five years of

00:19:08,979 –> 00:19:10,579
[Don Ezra]: cash flow needs okay

00:19:11,559 –> 00:19:12,559
[Don Ezra]: with cash like

00:19:14,159 –> 00:19:15,159
[Don Ezra]: in investments

00:19:14,820 –> 00:19:15,820
[Ramsey Smith]: oh

00:19:16,259 –> 00:19:21,139
[Don Ezra]: and that gives us five years of security should the market fall suddenly if it

00:19:21,219 –> 00:19:25,459
[Don Ezra]: doesn’t fall we will take money out of our market portfolio and spend it if it

00:19:25,539 –> 00:19:29,699
[Don Ezra]: falls we’ve got five years for it to recover and at least historically who knows

00:19:29,779 –> 00:19:32,739
[Don Ezra]: what the future will bring at least historically seventy fifty five percent of

00:19:32,819 –> 00:19:37,619
[Don Ezra]: the time the market has recovered in real terms inflation adjusted terms after

00:19:37,859 –> 00:19:43,299
[Don Ezra]: five years and she gets this that we have five years of virtual safety and then

00:19:43,459 –> 00:19:45,139
[Don Ezra]: the rest is all in a growth

00:19:44,740 –> 00:19:45,740
[Ramsey Smith]: he

00:19:45,459 –> 00:19:49,059
[Don Ezra]: portfolio and what she understands when for example

00:19:50,339 –> 00:19:55,219
[Don Ezra]: two years ago in march when covid started and the market just crashed she said

00:19:55,380 –> 00:19:56,380
[Ramsey Smith]: what

00:19:56,419 –> 00:19:58,419
[Don Ezra]: what what does this do to us

00:19:59,459 –> 00:20:04,419
[Don Ezra]: and the answer was right now nothing we are doing nothing and we will know what

00:20:04,579 –> 00:20:06,819
[Don Ezra]: it does to us five years from now because

00:20:06,500 –> 00:20:07,500
[Ramsey Smith]: oh

00:20:06,899 –> 00:20:10,739
[Don Ezra]: we don’t have to worry and as a matter of fact as the market has gone up so much

00:20:11,299 –> 00:20:16,739
[Don Ezra]: one of the things we’ve done is expanded our safety net from five years to much

00:20:16,879 –> 00:20:17,879
[Don Ezra]: more because

00:20:19,139 –> 00:20:22,099
[Don Ezra]: sorry i’ve i’ve got way off to wear off your question

00:20:20,540 –> 00:20:21,540
[Ramsey Smith]: now keep going

00:20:21,386 –> 00:20:22,386
[Paul Tyler]: no have

00:20:21,980 –> 00:20:22,980
[Ramsey Smith]: this is good

00:20:23,859 –> 00:20:29,219
[Don Ezra]: what one of the things that in our projections is i’m hoping for a real four

00:20:29,459 –> 00:20:34,099
[Don Ezra]: percent return on the equity portfolio on average over the long term if i get if

00:20:34,179 –> 00:20:38,419
[Don Ezra]: i get four percent i’m happy to cash out the next year’s worth etc in addition to

00:20:38,419 –> 00:20:42,579
[Don Ezra]: the five years where we’ve had such high returns that i’ve cashed out an extra

00:20:42,739 –> 00:20:45,059
[Don Ezra]: year for each of the four percents we’ve made and

00:20:44,740 –> 00:20:45,740
[Ramsey Smith]: okay

00:20:45,219 –> 00:20:50,499
[Don Ezra]: so now we have a safety net a safety part that is way longer than five years

00:20:51,939 –> 00:20:57,059
[Don Ezra]: and and so it’s stuff like that that psychologically i think is very important

00:20:57,859 –> 00:21:02,899
[Don Ezra]: and if you can put that psychological fear to rest then you can help with all the

00:21:02,979 –> 00:21:07,939
[Don Ezra]: other things etc and and you get so much more personal in the conversation with

00:21:07,939 –> 00:21:12,259
[Don Ezra]: the clients when you’re talking about family and friends work and play mental and

00:21:12,259 –> 00:21:16,819
[Don Ezra]: physical health etc etc because now now you’re a friend you’re not you’re not

00:21:16,979 –> 00:21:19,459
[Don Ezra]: just an expert you are an expert who’s a friend

00:21:19,766 –> 00:21:23,046
[Paul Tyler]: don the timing of the conversations you mentioned i think is

00:21:23,746 –> 00:21:24,746
[Paul Tyler]: so important

00:21:25,446 –> 00:21:30,006
[Paul Tyler]: want to have my conversation about my wife about the following ramsey there’s

00:21:30,406 –> 00:21:31,446
[Paul Tyler]: certain times that do it at certain

00:21:30,999 –> 00:21:31,999
[Don Ezra]: th

00:21:31,606 –> 00:21:35,926
[Paul Tyler]: times not today this morning was not a couple topics but dodd

00:21:36,039 –> 00:21:37,039
[Don Ezra]: what

00:21:37,766 –> 00:21:42,166
[Paul Tyler]: you might also mention retirement coaches sort of the evolution of retirement

00:21:42,326 –> 00:21:43,686
[Paul Tyler]: coaching coming in here

00:21:45,686 –> 00:21:50,486
[Paul Tyler]: can i i if i if i were a financial advisor and you were advising me on how to

00:21:50,566 –> 00:21:54,566
[Paul Tyler]: reshape shape my practice should i lead with that conversation

00:21:56,266 –> 00:21:57,266
[Paul Tyler]: purpose

00:21:59,026 –> 00:22:00,026
[Paul Tyler]: you know a

00:22:01,126 –> 00:22:06,486
[Paul Tyler]: happiness assets or is this something i earn the right to the conversation i have

00:22:06,566 –> 00:22:09,046
[Paul Tyler]: the e have to earn the right in order to have that with you

00:22:10,499 –> 00:22:14,179
[Don Ezra]: i really don’t know i don’t know what the answer is and i suspect it probably

00:22:14,499 –> 00:22:20,739
[Don Ezra]: varies from client to client and with the personality of the advisor and and what

00:22:20,679 –> 00:22:21,679
[Don Ezra]: kind of relationship

00:22:22,579 –> 00:22:23,779
[Don Ezra]: you have right from the start

00:22:23,546 –> 00:22:24,546
[Paul Tyler]: but

00:22:24,899 –> 00:22:26,579
[Don Ezra]: i really don’t know the answers to

00:22:27,699 –> 00:22:29,379
[Don Ezra]: is there a right way to do it or not

00:22:30,419 –> 00:22:32,819
[Don Ezra]: i think your judgment there would be much better than mine

00:22:32,480 –> 00:22:35,360
[Ramsey Smith]: well listening to your listening to your story it’s

00:22:35,520 –> 00:22:40,480
[Ramsey Smith]: there’s a lot of things going on so there is there is obviously there’s trust

00:22:35,539 –> 00:22:36,899
[Don Ezra]: look in one

00:22:40,880 –> 00:22:43,360
[Ramsey Smith]: you’re in a marriage that’s something that’s you know

00:22:43,500 –> 00:22:44,500
[Ramsey Smith]: extant

00:22:43,559 –> 00:22:44,559
[Don Ezra]: yes

00:22:45,920 –> 00:22:47,120
[Ramsey Smith]: so there’s trust

00:22:49,280 –> 00:22:50,640
[Ramsey Smith]: there’s been this ability to

00:22:50,639 –> 00:22:51,639
[Don Ezra]: ye

00:22:51,520 –> 00:22:54,320
[Ramsey Smith]: narrow sort of a complicated investment strategy

00:22:54,879 –> 00:22:55,879
[Don Ezra]: scrap

00:22:55,600 –> 00:22:58,800
[Ramsey Smith]: into a few key parameters five years of

00:22:58,599 –> 00:22:59,599
[Don Ezra]: but

00:22:58,960 –> 00:23:01,280
[Ramsey Smith]: safety you know if this then that

00:23:01,079 –> 00:23:02,079
[Don Ezra]: if that

00:23:01,520 –> 00:23:03,600
[Ramsey Smith]: else this then that right it’s a very

00:23:03,799 –> 00:23:04,799
[Don Ezra]: right

00:23:04,400 –> 00:23:07,520
[Ramsey Smith]: small subset of pieces of the puzzle

00:23:07,306 –> 00:23:08,306
[Paul Tyler]: that’s

00:23:07,479 –> 00:23:08,479
[Don Ezra]: a

00:23:08,480 –> 00:23:10,000
[Ramsey Smith]: and also a very fundamental element

00:23:09,719 –> 00:23:10,719
[Don Ezra]: one

00:23:09,940 –> 00:23:10,940
[Ramsey Smith]: is

00:23:11,760 –> 00:23:16,480
[Ramsey Smith]: is this notion that if something does happen there’s a willingness to make the

00:23:16,640 –> 00:23:20,480
[Ramsey Smith]: necessary adjustments we had bill banging on in the last couple of weeks and this

00:23:20,480 –> 00:23:24,800
[Ramsey Smith]: is one of the things that he talked about a lot is just the the

00:23:25,900 –> 00:23:26,900
[Ramsey Smith]: ultimately like

00:23:26,439 –> 00:23:27,439
[Don Ezra]: oh

00:23:26,880 –> 00:23:31,920
[Ramsey Smith]: the killer app using my own words killer app and retirement is is flexibility in

00:23:32,000 –> 00:23:33,600
[Ramsey Smith]: your spending like almost more

00:23:33,639 –> 00:23:34,639
[Don Ezra]: absolutely

00:23:34,000 –> 00:23:35,600
[Ramsey Smith]: almost more than anything else and so

00:23:36,640 –> 00:23:38,240
[Ramsey Smith]: a and and to get to that

00:23:38,900 –> 00:23:39,900
[Ramsey Smith]: part

00:23:39,079 –> 00:23:40,079
[Don Ezra]: yeah

00:23:39,600 –> 00:23:43,200
[Ramsey Smith]: of it is figuring out what’s really important everything else you’ve emphasized

00:23:43,840 –> 00:23:48,480
[Ramsey Smith]: so it’s just interesting to see how all the other qualitative issues that you

00:23:48,620 –> 00:23:49,620
[Ramsey Smith]: brought to the fore here

00:23:51,120 –> 00:23:56,480
[Ramsey Smith]: all that ultimately translate into you know greater safety and retirement because

00:23:57,120 –> 00:24:01,680
[Ramsey Smith]: you’ve narrowed down parameters and you and you’ve and you’ve imparted a you know

00:24:01,760 –> 00:24:03,520
[Ramsey Smith]: a culture a philosophy of

00:24:03,466 –> 00:24:04,466
[Paul Tyler]: understood

00:24:03,600 –> 00:24:04,640
[Ramsey Smith]: like a flexibility

00:24:06,979 –> 00:24:10,259
[Don Ezra]: absolutely absolutely anything bill says is gonna be wise

00:24:10,300 –> 00:24:11,300
[Ramsey Smith]: yeah right

00:24:10,419 –> 00:24:12,419
[Don Ezra]: anyway we know that because he’s such

00:24:12,100 –> 00:24:13,100
[Ramsey Smith]: yeah

00:24:12,279 –> 00:24:13,279
[Don Ezra]: a great guy

00:24:14,359 –> 00:24:15,359
[Don Ezra]: but

00:24:16,839 –> 00:24:17,839
[Don Ezra]: i think

00:24:20,019 –> 00:24:24,819
[Don Ezra]: an important thing that i’ve realized as i’ve come across many advisors

00:24:25,859 –> 00:24:27,699
[Don Ezra]: is the question of defining risk

00:24:29,379 –> 00:24:34,819
[Don Ezra]: and from a professional point of view risk in terms of standard deviation of

00:24:35,139 –> 00:24:38,979
[Don Ezra]: investment returns the stuff marco witz came up with seventy years ago when

00:24:39,139 –> 00:24:41,299
[Don Ezra]: modern portfolio theory started

00:24:42,579 –> 00:24:47,539
[Don Ezra]: i think that that’s a completely foreign concept to most people it it’s it’s only

00:24:47,699 –> 00:24:52,419
[Don Ezra]: us geeks who get into that kind of thing risk is actually a psychological

00:24:52,100 –> 00:24:53,100
[Ramsey Smith]: yeah

00:24:52,579 –> 00:24:58,339
[Don Ezra]: question it’s a lifestyle question it’s what is the risk to my lifestyle what are

00:24:57,999 –> 00:24:58,999
[Don Ezra]: the things

00:24:58,266 –> 00:24:59,266
[Paul Tyler]: but

00:24:58,819 –> 00:25:00,179
[Don Ezra]: i might not be able to do

00:25:01,219 –> 00:25:06,499
[Don Ezra]: and you have to understand the client’s lifestyle the clients’ goals and fears

00:25:07,699 –> 00:25:13,699
[Don Ezra]: and and in in that area the clients the expert and the financial expert is in

00:25:13,699 –> 00:25:18,579
[Don Ezra]: fact the person learning from it whereas most of the time the financial expert is

00:25:18,579 –> 00:25:23,139
[Don Ezra]: the expert and the client is trying to learn or relate to it but the idea of

00:25:23,219 –> 00:25:27,939
[Don Ezra]: saying the client is the expert on himself or herself and you have to learn about

00:25:28,019 –> 00:25:34,499
[Don Ezra]: it is very very important then with your financial expertise you can translate

00:25:34,659 –> 00:25:40,179
[Don Ezra]: their psychological lifestyle risk into investment terms and you can do that and

00:25:40,259 –> 00:25:44,019
[Don Ezra]: they may not understand that and they may not but but you’ve understood it and

00:25:44,099 –> 00:25:48,739
[Don Ezra]: that’s what you’ve done and then when you explain the results or when you explain

00:25:48,746 –> 00:25:49,746
[Paul Tyler]: school

00:25:49,379 –> 00:25:53,859
[Don Ezra]: the basis on which you have made a proposal or given advice et cetera et cetera

00:25:54,339 –> 00:25:55,539
[Don Ezra]: you can then relate it to

00:25:56,819 –> 00:26:00,979
[Don Ezra]: these are the goals you have here’s what we’re trying to achieve and these are

00:26:01,059 –> 00:26:05,539
[Don Ezra]: the things we’re trying to avoid and nothing is ever given this is an uncertain

00:26:05,699 –> 00:26:10,259
[Don Ezra]: world and in the investment world is one of the more uncertain parts even in an

00:26:10,419 –> 00:26:14,499
[Don Ezra]: uncertain world but here are the kinds of precautions which you’re trying to take

00:26:14,599 –> 00:26:15,599
[Don Ezra]: have i

00:26:14,986 –> 00:26:15,986
[Paul Tyler]: okay

00:26:15,459 –> 00:26:20,739
[Don Ezra]: have i read you right is this is does this sound right to you this is so much

00:26:20,899 –> 00:26:26,979
[Don Ezra]: better than a quarterly return then which quartile are you in et cetera etc and i

00:26:26,979 –> 00:26:32,259
[Don Ezra]: think it’s that psychological aspect of risk being able to translate investment

00:26:32,419 –> 00:26:33,939
[Don Ezra]: risk into lifestyle

00:26:35,239 –> 00:26:36,239
[Don Ezra]: effects

00:26:36,020 –> 00:26:37,020
[Ramsey Smith]: but that

00:26:36,659 –> 00:26:40,899
[Don Ezra]: that that would then distinguish you from the vast majority

00:26:42,099 –> 00:26:45,939
[Don Ezra]: of others who are doing this because they are professionals they are very good

00:26:46,019 –> 00:26:50,659
[Don Ezra]: professionals they enjoy being professionals but they are only professionals and

00:26:50,739 –> 00:26:54,739
[Don Ezra]: experts and not relating to the client and i think

00:26:55,939 –> 00:26:57,379
[Don Ezra]: i i think that would make you stand

00:26:57,146 –> 00:26:58,146
[Paul Tyler]: yeah

00:26:57,239 –> 00:26:58,239
[Don Ezra]: apart

00:26:59,846 –> 00:27:01,126
[Paul Tyler]: i think you’re so right around

00:27:02,106 –> 00:27:03,106
[Paul Tyler]: risk equaling

00:27:04,086 –> 00:27:09,286
[Paul Tyler]: a psychological state of being for me this comes from my journey is home housing

00:27:09,346 –> 00:27:10,346
[Paul Tyler]: that’s kind of what

00:27:11,386 –> 00:27:12,386
[Paul Tyler]: my

00:27:11,700 –> 00:27:12,700
[Ramsey Smith]: see

00:27:13,686 –> 00:27:17,366
[Paul Tyler]: center point is okay do i have a house over my head will i have a house or my

00:27:17,366 –> 00:27:21,446
[Paul Tyler]: head don you mentioned time time seem to be important five years why why five

00:27:21,526 –> 00:27:23,046
[Paul Tyler]: years went up four one at six

00:27:22,399 –> 00:27:23,399
[Don Ezra]: oh i’ve

00:27:26,259 –> 00:27:29,459
[Don Ezra]: give a take a few years maybe hay somewhere around five

00:27:29,386 –> 00:27:30,386
[Paul Tyler]: yeah his

00:27:30,339 –> 00:27:35,459
[Don Ezra]: that’s that’s my approximation i mean i think the actual saving for retirement

00:27:35,539 –> 00:27:40,019
[Don Ezra]: you need at least twenty to twenty five years you can get started but twenty to

00:27:40,099 –> 00:27:44,099
[Don Ezra]: twenty five years ago you get serious and then you get set and all that kind of

00:27:43,719 –> 00:27:44,719
[Don Ezra]: stuff

00:27:46,099 –> 00:27:49,779
[Don Ezra]: and compound interest has enough time to work if you give it twenty twenty five

00:27:49,939 –> 00:27:51,299
[Don Ezra]: years because the base

00:27:50,940 –> 00:27:51,940
[Ramsey Smith]: wow

00:27:51,379 –> 00:27:55,859
[Don Ezra]: is relatively low in the early years and these are your best earning years etc so

00:27:56,099 –> 00:28:00,579
[Don Ezra]: i think that’s okay but all i’m i think all i’m saying five years was a number

00:28:00,739 –> 00:28:04,899
[Don Ezra]: that came into my head all i’m saying is that you ought to start thinking about

00:28:04,979 –> 00:28:07,459
[Don Ezra]: the psychological aspects the identity question

00:28:08,739 –> 00:28:14,099
[Don Ezra]: before you retire and usually it takes some time because it’s not an adjustment

00:28:14,179 –> 00:28:18,659
[Don Ezra]: you make overnight it’s a psychological adjustment it’s an adjustment to your

00:28:18,819 –> 00:28:23,779
[Don Ezra]: definition of who you are and that takes time five years i haven’t a clue i have

00:28:23,939 –> 00:28:25,619
[Don Ezra]: no clue you’re absolutely right yeah

00:28:27,139 –> 00:28:31,379
[Don Ezra]: and i think the other one forgive me the other one we haven’t touched on is the

00:28:31,539 –> 00:28:38,179
[Don Ezra]: activity rock which is how do i fill my time when i’m not working full time and

00:28:38,259 –> 00:28:42,019
[Don Ezra]: whether it’s volunteering a part time career carrying on et cetera there are a

00:28:42,099 –> 00:28:47,299
[Don Ezra]: whole bunch of things but there’s one aspect that my friends and even my kids’

00:28:47,119 –> 00:28:48,119
[Don Ezra]: generation

00:28:49,219 –> 00:28:51,219
[Don Ezra]: they were very amused by this and remembered it

00:28:52,579 –> 00:28:57,139
[Don Ezra]: there’s another aspect that’s very important if you have a life partner and that

00:28:57,219 –> 00:28:58,339
[Don Ezra]: is that there are two of you

00:28:59,379 –> 00:29:03,779
[Don Ezra]: and you are not just a couple you were also two two separate people and so

00:29:04,739 –> 00:29:09,619
[Don Ezra]: actually at my my my son’s my son’s wedding i i i i mentioned this to the gang

00:29:09,779 –> 00:29:13,779
[Don Ezra]: assemble there my son said say anything you like whatever you say will embarrass

00:29:13,779 –> 00:29:17,779
[Don Ezra]: me so just go ahead sorry i said okay so so here here are two circles

00:29:19,059 –> 00:29:23,379
[Don Ezra]: your set of interests and your partner set of interest and they have some overlap

00:29:24,339 –> 00:29:28,739
[Don Ezra]: and when you meet you notice the overlap and you get all soppy about it oh we

00:29:28,819 –> 00:29:33,139
[Don Ezra]: have so much in carbon et cetera et cetera et cetera and then later on you have

00:29:34,739 –> 00:29:38,819
[Don Ezra]: the outside bits sometimes if you have kids they get they get

00:29:40,179 –> 00:29:44,739
[Don Ezra]: the kids fill the the middle bit and you lose your chance to do your own outside

00:29:45,059 –> 00:29:49,779
[Don Ezra]: bit and then if with any luck the kids leave home one day you may find that the

00:29:49,859 –> 00:29:56,259
[Don Ezra]: middle overlapping bit is almost empty and that’s why again divorce goes up at

00:29:56,339 –> 00:30:02,019
[Don Ezra]: this kind of stage and so what you need to realize is that as i told them the

00:30:02,099 –> 00:30:06,339
[Don Ezra]: most romantic thing you can say to each other every anniversary as you hug each

00:30:06,419 –> 00:30:10,499
[Don Ezra]: other in kiss and express your love in whatever way you do if you can say in all

00:30:10,659 –> 00:30:15,059
[Don Ezra]: honesty to each other all the parts of our venn diagram are healthy

00:30:16,099 –> 00:30:19,699
[Don Ezra]: that is a very very romantic thing to say to each other if you can

00:30:19,500 –> 00:30:20,500
[Ramsey Smith]: sorry

00:30:20,099 –> 00:30:24,899
[Don Ezra]: and so you know the kids this but the whole idea of the venn diagram and keeping

00:30:25,139 –> 00:30:28,979
[Don Ezra]: all the parts of your venn diagram healthy in retirement not

00:30:28,740 –> 00:30:29,740
[Ramsey Smith]: just

00:30:29,219 –> 00:30:31,859
[Don Ezra]: just doing things together but doing things separately as well

00:30:32,899 –> 00:30:37,859
[Don Ezra]: is very very important because as i say until covid we didn’t have to spend our

00:30:38,099 –> 00:30:42,739
[Don Ezra]: time that much time together now we will have much more time together and so

00:30:42,899 –> 00:30:47,139
[Don Ezra]: getting that middle bit and allowing the fact that there are the two outer edges

00:30:46,839 –> 00:30:47,839
[Don Ezra]: as well

00:30:48,499 –> 00:30:53,379
[Don Ezra]: it’s perfectly legitimate for each person have their own outer edge and do their

00:30:53,459 –> 00:30:56,739
[Don Ezra]: own thing you don’t have to be a couple all the time you’re also two separate

00:30:56,819 –> 00:30:58,259
[Don Ezra]: people that’s very important

00:30:59,539 –> 00:31:03,699
[Don Ezra]: in planning your activities and that will also give a separate sense of purpose i

00:31:03,319 –> 00:31:04,319
[Don Ezra]: think

00:31:04,646 –> 00:31:09,126
[Paul Tyler]: and if we were to look at sort of the macro balance sheet for happiness and covid

00:31:09,206 –> 00:31:12,486
[Paul Tyler]: you kind of introduced it clearly disrupted a lot of people

00:31:13,526 –> 00:31:16,806
[Paul Tyler]: however i’ve seen studies and rams you i think i’m i’m sure if somebody’s

00:31:16,886 –> 00:31:18,566
[Paul Tyler]: mentioned this on our show or not where

00:31:20,086 –> 00:31:24,566
[Paul Tyler]: don you may know where they’ve done studies of people where they live where they

00:31:24,806 –> 00:31:29,046
[Paul Tyler]: work you know where their activities are and their life is the closer that

00:31:29,366 –> 00:31:34,806
[Paul Tyler]: cluster is in terms of sheer distance generally the happier are now clear some

00:31:34,826 –> 00:31:35,826
[Paul Tyler]: outliers people who

00:31:38,300 –> 00:31:39,300
[Ramsey Smith]: i think

00:31:38,486 –> 00:31:42,966
[Paul Tyler]: stayed together because they were not together but do you think this has brought

00:31:38,486 –> 00:31:42,966
[Paul Tyler]: stayed together because they were not together but do you think this has brought

00:31:43,206 –> 00:31:47,526
[Paul Tyler]: you know do you think happiness has gone up collectively as a result of kind of

00:31:43,206 –> 00:31:47,526
[Paul Tyler]: you know do you think happiness has gone up collectively as a result of kind of

00:31:47,846 –> 00:31:52,166
[Paul Tyler]: slowing down being all sort of parked and home or or you you couldn’t say

00:31:47,846 –> 00:31:52,166
[Paul Tyler]: slowing down being all sort of parked and home or or you you couldn’t say

00:31:52,259 –> 00:31:57,219
[Don Ezra]: i have absolutely no idea whatsoever this is something i would wait to see the

00:31:57,299 –> 00:32:01,779
[Don Ezra]: united nations happiness survey they do a survey every year and i would wait to

00:32:01,779 –> 00:32:05,299
[Don Ezra]: see the results and see not only is it gone up or down but are there some

00:32:05,379 –> 00:32:08,499
[Don Ezra]: countries where it’s gone up and somewhere it’s gone down etc and then see what

00:32:08,579 –> 00:32:10,979
[Don Ezra]: you learn from that i have i have absolutely no idea

00:32:12,019 –> 00:32:16,019
[Don Ezra]: but but i think it’s brought the notion that we are

00:32:16,100 –> 00:32:17,100
[Ramsey Smith]: i am

00:32:17,059 –> 00:32:18,419
[Don Ezra]: two people as well as a couple

00:32:19,439 –> 00:32:20,439
[Don Ezra]: um to the four

00:32:21,459 –> 00:32:25,699
[Don Ezra]: because we’ve been forced to confront that and for some people this is good and

00:32:25,779 –> 00:32:26,979
[Don Ezra]: for some people it’s not good

00:32:28,560 –> 00:32:35,600
[Ramsey Smith]: so you’ve now in this in this new chapter you you’re evangelizing this very

00:32:35,840 –> 00:32:40,080
[Ramsey Smith]: important these is very important concepts you’ve written written a book well

00:32:40,240 –> 00:32:44,880
[Ramsey Smith]: long book and then and a shorter version of it and you’ve got your blog how much

00:32:44,960 –> 00:32:50,640
[Ramsey Smith]: is this going to continue to be part of your activity to to spread this to spread

00:32:50,720 –> 00:32:53,200
[Ramsey Smith]: this knowledge in this philosophy sort of more broadly

00:32:54,259 –> 00:33:00,099
[Don Ezra]: oh i i love it i’m absolutely pathetic at selling always have been which is why i

00:33:00,319 –> 00:33:01,319
[Don Ezra]: became a consultant

00:33:02,339 –> 00:33:07,779
[Don Ezra]: and so i have no idea how to propagate this so i write for my own benefit

00:33:07,900 –> 00:33:08,900
[Ramsey Smith]: i like

00:33:08,579 –> 00:33:10,499
[Don Ezra]: i write to explain something to myself

00:33:10,340 –> 00:33:11,340
[Ramsey Smith]: i

00:33:11,239 –> 00:33:12,239
[Don Ezra]: i find that

00:33:11,780 –> 00:33:12,780
[Ramsey Smith]: think about

00:33:12,179 –> 00:33:14,419
[Don Ezra]: if you think about something and you think you know it

00:33:14,580 –> 00:33:15,580
[Ramsey Smith]: you watch

00:33:15,139 –> 00:33:19,459
[Don Ezra]: until you actually write it down you don’t really know it because writing slows

00:33:19,539 –> 00:33:25,779
[Don Ezra]: you down and you don’t go from a to d to m to x you go a b c d and suddenly you

00:33:25,859 –> 00:33:29,539
[Don Ezra]: find my god i may never get to m it because the logic is taking me somewhere else

00:33:29,779 –> 00:33:34,259
[Don Ezra]: so i write for myself so i write in the first person i because i’m doing the

00:33:34,499 –> 00:33:39,619
[Don Ezra]: explaining and the person i’m writing to is also myself that’s the i’ve got two

00:33:39,619 –> 00:33:43,939
[Don Ezra]: bodies i’m i’m the speaker and the listener and so when i say you that’s also me

00:33:43,879 –> 00:33:44,879
[Don Ezra]: and

00:33:44,020 –> 00:33:45,020
[Ramsey Smith]: work

00:33:44,499 –> 00:33:48,739
[Don Ezra]: then i write that stuff and at the end i see have i understood this or not have i

00:33:48,899 –> 00:33:54,099
[Don Ezra]: have i encountered a block or not so i just write for myself and when friends say

00:33:54,339 –> 00:33:58,419
[Don Ezra]: this is good stuff that got me started on you know put it together in a book et

00:33:58,419 –> 00:34:04,499
[Don Ezra]: cetera et cetera et cetera and so the fulfillment i get from from the website is

00:34:04,279 –> 00:34:05,279
[Don Ezra]: that every

00:34:04,660 –> 00:34:05,660
[Ramsey Smith]: years

00:34:05,139 –> 00:34:07,219
[Don Ezra]: now and again i don’t know every few months

00:34:07,180 –> 00:34:08,180
[Ramsey Smith]: so you

00:34:07,539 –> 00:34:11,539
[Don Ezra]: someone will write to me and say you know i’m in australia i’m in south africa

00:34:11,859 –> 00:34:15,619
[Don Ezra]: i’ve just done this i’ve just done that and you helped me enormously in this and

00:34:15,699 –> 00:34:19,299
[Don Ezra]: someone else once told me it was like being hit in the head by a two

00:34:18,986 –> 00:34:19,986
[Paul Tyler]: eight

00:34:19,459 –> 00:34:24,419
[Don Ezra]: by four i really have to do this and never realize it etc and those those are my

00:34:24,239 –> 00:34:25,239
[Don Ezra]: rewards

00:34:26,019 –> 00:34:27,539
[Don Ezra]: that that to me is the

00:34:27,466 –> 00:34:28,466
[Paul Tyler]: thank

00:34:27,619 –> 00:34:33,059
[Don Ezra]: feedback that says oh my god you’ve helped someone somewhere and i don’t know how

00:34:33,139 –> 00:34:36,659
[Don Ezra]: many people in my pension consulting career i actually

00:34:36,780 –> 00:34:37,780
[Ramsey Smith]: do you

00:34:36,979 –> 00:34:43,139
[Don Ezra]: helped i i may have helped institutions i did not help people and my life is now

00:34:43,699 –> 00:34:48,019
[Don Ezra]: people oriented as opposed to institution oriented my focus has changed from

00:34:48,179 –> 00:34:51,139
[Don Ezra]: institutional investing and finance to individual

00:34:51,980 –> 00:34:52,980
[Ramsey Smith]: i don’t know

00:34:52,099 –> 00:34:58,339
[Don Ezra]: investing in finance and happiness and that’s that’s in a way my my my purpose

00:34:58,380 –> 00:34:59,380
[Ramsey Smith]: oh that

00:34:59,619 –> 00:35:00,899
[Don Ezra]: and and that as i say

00:35:02,499 –> 00:35:07,219
[Don Ezra]: that will that i hope will create some kind of emotional legacy that goes beyond

00:35:07,379 –> 00:35:10,819
[Don Ezra]: family and friends to people who read it and say my god that really helped i

00:35:10,979 –> 00:35:16,099
[Don Ezra]: really like that thank you and that’s that’s my reward and i’m i’m absolutely

00:35:16,179 –> 00:35:21,779
[Don Ezra]: thrilled with it and if if the book doesn’t sell i really don’t care i mean

00:35:21,500 –> 00:35:22,500
[Ramsey Smith]: hm

00:35:22,179 –> 00:35:25,939
[Don Ezra]: once as far as i’m concerned i mean i had a best selling book pension fund

00:35:26,019 –> 00:35:30,019
[Don Ezra]: excellence that’s sold ten thousand plus copies which is an awful lot in these

00:35:30,099 –> 00:35:32,259
[Don Ezra]: terms my my happiness and and

00:35:32,180 –> 00:35:33,180
[Ramsey Smith]: smoke

00:35:32,499 –> 00:35:37,859
[Don Ezra]: and life two books have each sold a thousand plus copies and if it hits a

00:35:37,939 –> 00:35:40,259
[Don Ezra]: thousand i’ve been absolutely thrilled with that

00:35:40,666 –> 00:35:41,666
[Paul Tyler]: i

00:35:40,819 –> 00:35:45,299
[Don Ezra]: totally thrilled that’s a success to me best seller list hell no not a chance

00:35:45,539 –> 00:35:50,019
[Don Ezra]: forget it but that’s not the goal the goal is self satisfaction in learning

00:35:51,539 –> 00:35:56,979
[Don Ezra]: in being able to keep learning and to explain and every now and again something

00:35:57,299 –> 00:36:00,899
[Don Ezra]: gets through to someone that’s m that’s my that’s my reward

00:36:00,806 –> 00:36:05,846
[Paul Tyler]: oh this is great now the book is called life two love the title we will put a

00:36:05,926 –> 00:36:10,886
[Paul Tyler]: link in our show notes and we i know don will sell a few more for you so

00:36:11,626 –> 00:36:12,626
[Paul Tyler]: love

00:36:11,959 –> 00:36:12,959
[Don Ezra]: thank you

00:36:12,326 –> 00:36:14,166
[Paul Tyler]: to put a zero on that but you know we’ll look

00:36:14,239 –> 00:36:15,239
[Don Ezra]: thank you

00:36:15,046 –> 00:36:18,726
[Paul Tyler]: think i don’t ramsay any what are your final thoughts or questions for don

00:36:19,280 –> 00:36:23,760
[Ramsey Smith]: no i think we i think we i think we covered it i think we covered the the key

00:36:23,920 –> 00:36:27,920
[Ramsey Smith]: elements there’s really this existential link between

00:36:29,040 –> 00:36:31,760
[Ramsey Smith]: quality of life issues identity activity and

00:36:32,800 –> 00:36:37,680
[Ramsey Smith]: money decisions and money happiness and and that’s really where we really really

00:36:37,840 –> 00:36:39,920
[Ramsey Smith]: nailed that today so thanks thanks for coming don

00:36:39,986 –> 00:36:40,986
[Paul Tyler]: yeah dawn

00:36:41,219 –> 00:36:45,059
[Don Ezra]: my pleasure my pleasure you made this very may i say you’ve made this very easy

00:36:45,379 –> 00:36:50,739
[Don Ezra]: for me i am a i i do this a lot but i am a very very very nervous performer and

00:36:50,819 –> 00:36:53,219
[Don Ezra]: you have made this an absolute joy thank you

00:36:52,586 –> 00:36:53,586
[Paul Tyler]: oh no thank

00:36:53,740 –> 00:36:54,740
[Ramsey Smith]: our pleasure

00:36:53,846 –> 00:36:58,326
[Paul Tyler]: thank you our pleasure and uh all our listeners thanks for listening check out

00:36:58,226 –> 00:36:59,226
[Paul Tyler]: the show notes

00:37:00,566 –> 00:37:04,326
[Paul Tyler]: buy the book look at the website reach out to don we’ll put some links here and

00:37:04,486 –> 00:37:08,086
[Paul Tyler]: join us again next week for another episode of that annuity show

The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersEpisode 147: Preparing for Life 2 With Don Ezra
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Why Advisors Shouldn’t Dismiss Index-Linked Annuities

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Sales of protection-focused annuity products were higher in the fourth quarter of 2021 than the combined total of accumulation and income-focused annuities, according to data from the Secure Retirement Institute.

In fact, the sales of registered index-linked annuities (RILAs) have led the protection annuity charge with sales more than doubling from $4.3 billion in the second quarter of 2020 to $8.9 billion by the end of 2021.

What’s driving the appeal of protection products offered within an annuity wrapper? Why would any investor want a complex financial product that promises protection at the expense of significant upside? And why choose an annuity when similar products exist as ETFs?

In a new white paper written for the Retirement Income Institute, fellow American College Professor Wade Pfau and I take a deeper dive into a collection of financial products that offer varying loss protection and compare them to outcomes from a traditional investment portfolio.

How should advisors think about protected annuities?

First, they shouldn’t dismiss them as an inefficient gimmick. In a series of detailed articles written while he was head of retirement research at Morningstar, David Blanchett lays out the complex economics that underlie the potential benefits of financial products that use a combination of fixed income investments, equities, and financial options to create a customized distribution of outcomes.

Why might a retiree prefer an option-controlled retirement investment to a traditional long-only portfolio of stocks and bonds?

According to Nobel laureates Robert Merton and Myron Scholes, financial options can be used to construct investments that “can be used by investors to produce patterns of returns which are not reproducible by any simple strategy of combining stocks with bonds.” A retiree may prefer this altered distribution of possible returns to a conventional portfolio.

Limiting Risk

Consider a 60-year-old baby boomer who is five years away from retirement. The market has performed well over the last decade, and they have $500,000 invested today in the S&P 500 and $500,000 in bonds to fund the lifestyle they hope to lead.

The distribution of bond returns over the next five years is relatively narrow. The distribution of the overall portfolio is wider and depends primarily on five-year stock returns.

If we run a Monte Carlo analysis on the S&P 500, we can see how much their future wealth can vary by the time they retire at age 65. At the 10th percentile, they will have $410,000. At the 1st percentile, stocks will fall to $265,000. A lucky retiree at the 90th percentile will have over $1 million.

In five years, they should be able to withdraw about $22,000 from the portion of their portfolio invested in bonds (of course this is a simplification and ignores the potential risk of bonds, which can be significant as we’ve discovered recently).

If the retiree gets lucky and achieves the 90th percentile of returns, they’ll be able to withdraw $47,200 from their stocks based on the 4% rule. If they get unlucky at the 10th percentile, they’ll only be able to withdraw $16,400.

Is the retiree willing to accept the downside risk of spending $38,400 each year in order to achieve the potential upside of $69,200 if they get lucky? At lower percentiles the potential downside and upside become even more extreme (as low as $32,600 at the 1st percentile). Is this a risk the client is willing to accept?

An alternative is to give up some of the upside to cut off some (or all) of the downside risk. In a low interest rate environment, products with floors offer less upside potential and more closely resemble fixed income investments.

However, unlike the intermediate-term fixed income investments that constitute the bulk of an insurance company’s general account portfolio, products such as fixed indexed annuities (FIAs) won’t fall in value if interest rates spike.

In practical terms, the distribution of FIA outcomes in a low interest rate environment over five years ranges from 0% at the 1st percentile to 7% at the median to about 12% at the 95th percentile.

Growth is similar to expected growth on safe bonds but without the potential downside of term and credit risk. It should be noted that any attempt to position 0% floor products as “upside with no downside” is disingenuous since the upside is lower at the 95th percentile than a bond fund.

Purchasing a RILA with a -10% floor allows an investor to increase the potential upside to 19% at the 90th percentile. The upside is limited to the call options budget available to capture modest growth after the insurance company invests in bonds to guarantee returning 90% of principal.  A -10% floor allows a bigger options budget than a 0% floor.

Buffered RILAs

RILAs with a buffer allow an investor to accept a greater range of potential upside and downside outcomes. Buffered annuities are an interesting concept because they seem to be tailor-made for loss-averse investors. Why? The insurance company protects against the first 10% of losses, preventing small losses that often result in a big emotional response. However, investors are on the hook for losses beyond -10%.

For example, a -10% buffer would turn the -37% return from the S&P in 2008 into a -27% return. Big negative returns are far less common than small negative returns with a bell-shaped return distribution. Investors are completely protected against most losses and buffered against large ones.

Of course, there is a cost. The insurance company needs to employ an options strategy to provide the buffer. This will limit the upside potential of a RILA distribution. For example, at the 90th percentile a buffered annuity will have a 31% return over five years and taxable stocks will have an 87% return.

At the fifth percentile, a buffered RILA has a -8% return and stocks a -26% return. At any return below the 25th percentile, the buffered annuity provides a higher return than stocks and the difference increases toward the tail, resulting in significant downside protection.

Another Option

Another interesting protection annuity that performed well in our analyses is a variable annuity with a so-called guaranteed minimum accumulation benefit (GMAB).

The product used in our analysis offers a true five-year floor of -10%, resulting in a lower extreme downside than a buffered annuity. GMABs also provide more modest protection than RILAs against smaller downside outcomes with a -10% return at the 10th percentile and a 1% return at the 25th percentile.

The upside of a GMAB, however, was far higher than a buffered annuity with a 53% return at the 90th percentile and a 66% return at the 95th percentile.

For an investor who wants to get rid of any possibility that they will have to cut back significantly on spending if they get unlucky with their stock investments over the next five years while giving up only the more extreme upside outcomes if they get unlucky might find the GMAB product more attractive than an unprotected stock investment.

Deferring Gains

An additional advantage of holding nonqualified assets in products that use financial options to tailor an investment portfolio in an annuity wrapper is the ability to defer short-term gains until after a worker has retired.

This is particularly valuable when a worker is in a significantly lower tax bracket after retirement. Of course, gains could be further deferred if the annuity is turned into lifetime income using an immediate annuity that benefits from the exclusion ratio where only a portion of each payment is subject to income taxes.

The insurance companies who manage these products provide value by managing option trading on behalf of the advisor and providing guarantees that insulate a client from volatility swings that could increase option prices.

Option-protected portfolio strategies aren’t new, but the outcomes they produce appear to be increasingly popular among investors nearing retirement.

This shouldn’t be surprising since many retirees base their decisions about when to retire on the lifestyle they can generate from the investments they hold today. A negative return shock can result in a delayed retirement, or an unacceptable drop in lifestyle that could have been eliminated by cutting off some upside.

Read the full article: https://www.thinkadvisor.com/2022/04/26/downside-down-why-advisors-shouldnt-dismiss-rilas/ 

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersWhy Advisors Shouldn’t Dismiss Index-Linked Annuities
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Reverse Mortgages and Estate Planning

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Your home may be your most valuable asset and represent the largest portion of your estate. A reverse mortgage can help you hang onto that asset, by letting you tap into your accumulated home equity without having to sell the home. Still, the money you receive from the reverse mortgage will also have to be repaid after you die, reducing the value of your estate, possibly substantially. Here is what you need to know about reverse mortgages and estate planning.


  • If you have a reverse mortgage on your home, it will have to be paid off after you die, reducing the home’s value to your heirs.
  • The rules are different for spouses who inherit homes with reverse mortgages than for other heirs.
  • A reverse mortgage could allow you to supplement your retirement income without drawing down other assets in your estate.

What Happens to Your Reverse Mortgage After You Die?

When you leave a home with a reverse mortgage to someone, you’re also leaving them with responsibility for the mortgage. What they’ll need to do next depends on their relationship to you.

If Your Heir Is Your Spouse

Spouses who inherit a home with a reverse mortgage fall into three groups. Which group your spouse is in will determine whether they have a right to stay in the home and possibly continue to receive benefits from the reverse mortgage.

  • Co-borrowing spouse – A co-borrowing spouse is listed as such on the original loan documents. Any co-borrower (they don’t have to be your spouse) can stay in the home and continue to receive money from the reverse mortgage.
  • Eligible non-borrowing spouse – Spouses who didn’t qualify to be co-borrowers (typically because they were under age 62 when the loan was issued) can be listed on the mortgage as eligible non-borrowing spouses. If they meet certain other requirements, they can also remain in the home, but they won’t receive additional money from the reverse mortgage.
  • Ineligible non-borrowing spouse – Such spouses don’t meet the requirements for one of the first two categories. They must buy the home themselves if they wish to remain in it. They can also sell it.1

In the case of co-borrowing or eligible non-borrowing spouses, the home and reverse mortgage become part of their estate when they die.

(Please note that this article describes the rules for Federal Housing Administration (FHA)–insured home equity conversion mortgages (HECMs) originated on or after Aug. 4, 2014; older HECMs have somewhat different rules. The Consumer Financial Protection Bureau provides both sets of rules on its website.)2

If Your Heir Is Someone Other Than Your Spouse

If you leave your home to your children or other heirs who are not your spouse, they will not be eligible to keep the reverse mortgage; instead, they must pay it off within a specified time frame. Essentially, they will have three choices:

  • Sell the home –After they pay off the mortgage, anyequity that remains is theirs to keep.
  • Buy the home –They can also pay off the reverse mortgage with their own funds if they want to keep the home.
  • Deed the home over to the lender – This way of settling the debt is known as a “deed in lieu of foreclosure.”3

Fortunately, no matter how much you owe on a HECM, your heirs won’t be stuck with a net debt. The most they’re obligated to pay is either the full loan balance or 95% of the home’s appraised value, whichever is less. The FHA insurance will cover any difference.4

Your heirs may have to take action fairly quickly. Technically, they have only 30 days from receiving a due and payable notice from the lender, although they can ask for an extension of up to a year to give them time to sell the home or arrange for financing to buy it themselves.5 Which course they are likely to follow will depend on a variety of factors, including how attached they are to the home and how much debt it carries.

One suggestion you may see online is to use some of the proceeds of the reverse mortgage to buy a life insurance policy made payable to your heirs. This could provide them with sufficient cash to purchase the home after your death. However, you may need all the money you receive from the reverse mortgage to cover your living expenses and not have any left over to buy life insurance, which can also be costly in your later years. Still, this could be an option for some people.

If You Have Other Assets

Reverse mortgages may be of greatest appeal to people who lack retirement accounts, nonretirement investment accounts, or adequate cash savings, making their home their only significant financial asset.

For example, if you know your heirs would like to inherit your home, drawing on those other assets for income could make more sense than running up a large balance on a reverse mortgage. On the other hand, if your heirs don’t have any particular attachment to the home, borrowing against it can be a way to preserve your other assets for them.

Wade Pfau, author of Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement,notes that having a reverse mortgage to draw on is one way to protect your other assets in a bear market. Rather than being forced to sell investments when prices are down to supplement your income, you can tap the reverse mortgage for income until prices rise again.6 Of course, you’ll pay a price for that flexibility in terms of the reverse mortgage’s steep up-front costs.7

A reverse mortgage might also help protect your other assets if you ever face major long-term care costs. Bear in mind, though, that the mortgage will have to be repaid if you move out of the home and into a care facility for 12 consecutive months or more, unless you have a co-borrowing or an eligible non-borrowing spouse living in it.8

How Much Can You Borrow With a Reverse Mortgage?

How much you can borrow with a reverse mortgage depends on your age (or the age of your co-borrowing or eligible non-borrowing spouse, if they’re younger than you), the equity you have in your home, and current interest rates. The current maximum for a government-insured HECM is $970,800.7

Where Can You Get a Reverse Mortgage?

To get a HECM (the most common type of reverse mortgage), you must go through a lender approved by the FHA. There is a search tool for locating lenders on the website of the FHA’s parent organization, the U.S. Department of Housing and Urban Development (HUD).9

At What Age Do Most People Get Reverse Mortgages?

While you’re eligible for a reverse mortgage at age 62, most people who get one wait until later. A Consumer Financial Protection Bureau study found that in 2019, the latest year for which data is available, the median age of reverse mortgage borrowers was 73.10

The Bottom Line

Your home may represent a significant part of your estate and having a reverse mortgage on it will affect how much of its value your heirs will receive when you die. If you have financial assets in addition to your home, supplementing your income with a reverse mortgage can help you preserve them for your estate. Because your heirs will generally be responsible for paying off the loan when you die, it’s worth discussing the situation with them well in advance.

Today’s Refinance Rates Are Better Than Ever

$400,000 for 1.93% APR for a 15-year fixed mortgage. These low rates won’t last forever. Experts agree rates will likely rise 30% over the course of this year. Skip this month’s payment if you refinance today. Calculate your new payment and see how much you could save with LendingTree.

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

Ashley SaundersReverse Mortgages and Estate Planning
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Retirement Planning Is No Laughing Matter: WealthConductor CEO

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By Jane Wollman Rusoff

Approaching the challenge of retirement income planning in a lighthearted fashion may have friendliness written all over it, but it’s unlikely to be an effective strategy, argues Sheryl O’Connor, co-founder and CEO of the technology firm WealthConductor, in an interview with ThinkAdvisor.

“Retirement income planning is a deadly serious topic,” she says. “It’s scary.”

Engaging people through “games or funny videos” is “really insulting” — “and it isn’t going to help people save more,” she maintains.

What pre-retirees want, surveys show, is a written customized plan that gives them confidence they’ll conquer their “two top concerns” in retirement: the cost of health care and outliving their money, according to O’Connor, winner of two 2021 ThinkAdvisor LUMINARIES awards in Executive Leadership.

Advisors who specialize in the retirement planning distribution stage “are going to be the ones benefiting from the largest migration of assets from the accumulation phase to the distribution phase in the history of financial services,” O’Connor says in the interview.

“This represents the biggest opportunity that advisors have seen in at least 30 years,” she notes.

WealthConductor’s prime offering is its platform IncomeConductor, which supports advisors with an income distribution strategy customized to a client’s needs and goals.

Further, it helps advisors position themselves as specialists in retirement income distribution.

The online software is available to them on a subscription basis.

IncomeConductor pivots on the strategy of “time-segmented milestones,” devised by O’Connor’s partner Philip Lubinski, a veteran certified financial planner who developed the strategy of bucketing assets, she says.

The firm’s third co-founder is Tom O’Connor, chief marketing officer.

Because client and advisor collaborate on building the IncomeConductor plan, clients “are more likely to adhere to it,” Sheryl O’Connor says.

Before launching Hartford, Connecticut-based WealthConductor in 2017, she co-founded 3D Asset Management, an RIA where she built a turnkey asset management program designed to let advisors completely outsource their back-office administration.

Earlier — from 1998 to 2004 — she was with The Hartford and MassMutual.

In the interview, she describes IncomeConductor’s distinctive features and benefits — including sending alerts to advisors that “there are opportunities to take some risk off the table” — and how it differs from other bucket strategies.

A former schoolteacher, O’Connor is taking the industry to task for not “evolving correctly.”

“It is sticking with the old way of doing things. But we have to move forward and realize that retirement is different today,” she says.

“We can’t keep using the tools and strategies that we used for our parents’ generation for [today’s] generation,” she stresses.

Speaking by phone from South Windsor, Connecticut, O’Connor says: “There’s a lot of talk in the industry about financial wellness, financial education and client engagement. Those are great goals.

“But I don’t see anybody doing them really effectively,” she says.

Here are highlights of our conversation:

THINKADVISOR: What aspect of retirement planning is most critical for advisors to focus on today?

SHERYL O’CONNOR: Because of the huge wave of baby boomers going from a working career into retirement, we’re experiencing the largest migration of assets from the accumulation phase to the distribution phase in the history of financial services.

Therefore, people are looking for advisors to provide retirement income planning services.

This presents the biggest opportunity that advisors have seen in at least 30 years.

Advisors that specialize in this area are going to be the ones benefiting from the big change of assets from accumulation to distribution.

How can they approach this in the most effective way?

Retirement income planning is a deadly serious topic: People are starting a whole new phase of their lives full of unknowns. It’s scary. So the best way to engage them isn’t through games or funny videos. That’s really insulting.

Gamification isn’t going to sustain somebody’s interest and get across what they should do. It isn’t going to help people save more.

Why is being assured of a secure retirement so challenging?

Today’s retirees have to rely almost solely on Social Security benefits and what they’ve managed to save in a 401(k) plan or an outside account, or maybe an investment in property.

Read the rest of the article, here: https://www.thinkadvisor.com/2022/04/11/retirement-planning-is-a-deadly-serious-topic-wealthconductor-ceo/

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The discussion is not meant to provide any legal, tax, or investment advice with respect to the purchase of an insurance product. A comprehensive evaluation of a consumer’s needs and financial situation should always occur in order to help determine if an insurance product may be appropriate for each unique situation.

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