David Blanchett

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Episode Transcript

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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[paul_tyler]: this is paul tyler and welcome to
another episode of that annuity show get a

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[paul_tyler]: great great program some great guests bruno
welcome from canada

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[bruno_caron]: thank you good to be here

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[ramsey_d_smith]: that’s your new

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[paul_tyler]: don

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[ramsey_d_smith]: office

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[paul_tyler]: hat

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[ramsey_d_smith]: bruno

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[bruno_caron]: it is

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[ramsey_d_smith]: nice

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[paul_tyler]: nice

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[bruno_caron]: people typically congratulate me on my plan
but you can do that it’s okay

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[ramsey_d_smith]: alright

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[paul_tyler]: all right ramsey tell us who do

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[ramsey_d_smith]: p

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[paul_tyler]: we have and what are we going
to talk about today

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[ramsey_d_smith]: all right paul thank you always glad
to be here so we are we’re very

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[ramsey_d_smith]: fortunate to be rejoined by two of
the most important voices in the retirement space

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[ramsey_d_smith]: david blanch shet and michael

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[paul_tyler]: oh

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[ramsey_d_smith]: fink so both of both of them
have we’ve been fortunate

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[paul_tyler]: oh

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[ramsey_d_smith]: to have them on the each of
them on the show at least once or

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[ramsey_d_smith]: twice and they can be seen very
frequently on linked in

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[paul_tyler]: yeah

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[ramsey_d_smith]: and in many other venues and in
webinars and and

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[paul_tyler]: oh

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[ramsey_d_smith]: we’ll hear at the end what

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[paul_tyler]: yeah

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[ramsey_d_smith]: the sort of heir next appearances will
be

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[paul_tyler]: yeah

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[ramsey_d_smith]: we we wanted to ring the back
on the show primarily because they’ve been posting

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[ramsey_d_smith]: a lot lately about the different trends
in the space and so with that want

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[ramsey_d_smith]: to welcome david who is the head
of retirement research at p g i m

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[ramsey_d_smith]: and michael who is professor of wealth
and man both management rather at the american

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[ramsey_d_smith]: college of financial services so welcome back
to both you and let’s let’s just get

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[ramsey_d_smith]: into it you’ve posted on so many
things

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[bruno_caron]: yes

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[ramsey_d_smith]: what are the what are the two
or three areas that you think or getting

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[ramsey_d_smith]: the

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[bruno_caron]: ah

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[ramsey_d_smith]: most intense or should get the most
intense scrutiny right now in the retirement space

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[ramsey_d_smith]: david will start with you

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[david_blanchett]: but i was going to

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[michael_finke]: i’m

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[david_blanchett]: say you

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[michael_finke]: going

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[david_blanchett]: know

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[michael_finke]: to

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[david_blanchett]: the

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[michael_finke]: go

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[david_blanchett]: one thing

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[michael_finke]: and

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[david_blanchett]: that i’ve been

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[michael_finke]: ah

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[ramsey_d_smith]: all right

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[david_blanchett]: i gotta go first call on me
thank our plan

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[ramsey_d_smith]: oh

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[michael_finke]: you’re just a knocking over each other
and the

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[ramsey_d_smith]: yeah

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[bruno_caron]: right

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[ramsey_d_smith]: all

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[michael_finke]: go ahead

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[ramsey_d_smith]: right sorry

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[michael_finke]: go ahead david i’m the more voracious
one

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[bruno_caron]: oh

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[david_blanchett]: so

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[paul_tyler]: ye

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[david_blanchett]: the one thing that i would just
say

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[ramsey_d_smith]: oh

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[david_blanchett]: is that we’re taking about

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[bruno_caron]: m

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[david_blanchett]: this before we started is just the
impact that the rise and bonyiels are having

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[david_blanchett]: on

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[paul_tyler]: yeah

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[david_blanchett]: products across the net landscape just because
you know if you think about the way

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[david_blanchett]: that a lot of these products are
built it’s built using

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[paul_tyler]: oh

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[david_blanchett]: bonils’there’s more there but so when we’ve
seen this dramatic rise and rates there’s just

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[paul_tyler]: yeah

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[david_blanchett]: dramatic improvement and change and kind of
the efficacy of products and so

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[paul_tyler]: yeah

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[david_blanchett]: i did a lot of research about
like

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[paul_tyler]: oh

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[david_blanchett]: riles and fees and just a whole
host of products last year it’s kind of

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[david_blanchett]: irrelevant now like i need a kind
of dust off everything i used to do

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[david_blanchett]: because like the marginal value of a
lot of these a lot of these products

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[david_blanchett]: issued by life insures

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[paul_tyler]: yeah

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[david_blanchett]: really have i think a lot

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[paul_tyler]: i

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[david_blanchett]: better a lot

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[paul_tyler]: yeah

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[david_blanchett]: sexyerethan he

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[paul_tyler]: i

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[david_blanchett]: were say

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[ramsey_d_smith]: oh

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[david_blanchett]: even a year ago

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[paul_tyler]: yeah

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[ramsey_d_smith]: michael

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[michael_finke]: david let’s talk about fixed inexinuities because
this is something that i’ve

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[david_blanchett]: yeah

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[michael_finke]: been giving some thought to recently

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[paul_tyler]: oh

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[michael_finke]: and that is that you and i
have boated on research on fa basically the

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[michael_finke]: long term for or man resembles

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[paul_tyler]: yeah

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[michael_finke]: that of a corporate

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[ramsey_d_smith]: oh

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[michael_finke]: bond

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[paul_tyler]: yeah

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[michael_finke]: over time it is we both have
discussed the fact that he is are in

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[michael_finke]: some sense like a bond substitute within
a portfolio this year really illustrated a unique

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[michael_finke]: aspect of f but i don’t think
people really

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[paul_tyler]: yeah

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[michael_finke]: have given enough thought to and that
is that although they

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[ramsey_d_smith]: oh

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[michael_finke]: capture much of that term premium and
a little bit of the credit premium over

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[michael_finke]: time that you would get from corporate
bonds they don’t suffer the same losses the

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[michael_finke]: corporate bond suffer so let’s just take
a moment and reflect on how well for

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[michael_finke]: example

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[ramsey_d_smith]: oh

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[michael_finke]: the long term corporate

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[paul_tyler]: yeah

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[michael_finke]: bond van guard f has

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[paul_tyler]: yeah

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[michael_finke]: done in two thousand twenty two if

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[paul_tyler]: yeah

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[michael_finke]: at the very beginning of the year
you decided hey interestrats are really low i’m

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[michael_finke]: going to try to eke out a
little bit of extra return for my bond

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[paul_tyler]: oh

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[michael_finke]: portfolio by taking term risk maybe also
gonna take a little bit of credit risk

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[michael_finke]: down thirty per cent in fact that
t f is down down more than thirty

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[michael_finke]: per cent and two thousand twenty two

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[paul_tyler]: yeah

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[michael_finke]: if you

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[paul_tyler]: yeah

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[michael_finke]: had instead decided to use a tea
as a bond alternative the guarantee would have

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[michael_finke]: looked similar to the expected return on
those bond t f but

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[paul_tyler]: yeah

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[michael_finke]: you have that principal protection aspect now
why is it that you get the principal

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[michael_finke]: protection aspect

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[ramsey_d_smith]: m

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[michael_finke]: well the insurance company is investing in
those bonds and so the insurance

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[paul_tyler]: oh

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[michael_finke]: company in its general count has experienced
a mark to market loss in that

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[paul_tyler]: as

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[michael_finke]: bond portfolio

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[ramsey_d_smith]: oh

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[michael_finke]: that you don’t have to

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[paul_tyler]: yeah

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[michael_finke]: bear in fact

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[ramsey_d_smith]: oh

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[michael_finke]: the insurance company has taken some of
that volatility

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[ramsey_d_smith]: yeah

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[michael_finke]: of the bond portfolio off your plate
while still

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[ramsey_d_smith]: yeah

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[michael_finke]: offering in the long term similar performance
the bond portion of your portfolio that

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[paul_tyler]: yeah

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[michael_finke]: fact that the insurance company is willing
to bear that risk

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[paul_tyler]: a

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[michael_finke]: and not transfer it to you as
the holder of the fixed in

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[ramsey_d_smith]: yeah

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[michael_finke]: extenuity that is a significant portfoli o
benefit and incorporating f

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[ramsey_d_smith]: yeah

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[michael_finke]: s versus using um you know using
them as a substitute for longer duration bonds

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[michael_finke]: than a portfolio

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[paul_tyler]: yeah it’s been i will tell you
this has been

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[michael_finke]: it

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[bruno_caron]: oh

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[paul_tyler]: a wild ride and even if i
looked at you

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[ramsey_d_smith]: oh

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[paul_tyler]: know what was the

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[bruno_caron]: ay

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[paul_tyler]: story the first or second

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[ramsey_d_smith]: yah

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[paul_tyler]: quarter versus third and fourth

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[ramsey_d_smith]: h

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[paul_tyler]: you know david michel has been so
different you know a lot of a lot

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[paul_tyler]: of products put in as you know
low volatility industries sort of do even the

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[paul_tyler]: best or the best hey we’re goin
t give you a steady return or better

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[paul_tyler]: then the market over a period of
time and not provide those bumps now of

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[paul_tyler]: course the markets were very be very
differently you know in the last eighteen eighteen

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[paul_tyler]: months going into sort of first or
second quarter because the most volatile stocks were

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[paul_tyler]: the ones that were producing biggest returns
they were taking out a lot of these

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[paul_tyler]: these ball control so i personally took
a lot calls and chats from from clients

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[paul_tyler]: who started to look at the statement
he said wait a second s m p

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[paul_tyler]: s gone up this much and this
much you’re only giving me this much and

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[paul_tyler]: we’re all sort of rubbing our hands
together saying what are we going to do

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[paul_tyler]: now the minute the market crashed michael
those calls stopped and in fact i know

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[ramsey_d_smith]: hm

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[paul_tyler]: go on a bike ride and find
somebody i know from a long time ago

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[paul_tyler]: says paul i love my annuity

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[ramsey_d_smith]: m

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[paul_tyler]: i love my annuity of the market
going down so it really has reenforced huge

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[paul_tyler]: you know part of the value prop
of a fixed and eccinuity i guess my

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[paul_tyler]: question will be is this temporary

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[ramsey_d_smith]: m

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[paul_tyler]: or is this you know a more
permanent shift than how

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[ramsey_d_smith]: m

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[paul_tyler]: people are looking at these products

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[ramsey_d_smith]: i

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[paul_tyler]: david

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[ramsey_d_smith]: mean

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[paul_tyler]: what’s

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[ramsey_d_smith]: what

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[paul_tyler]: your

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[ramsey_d_smith]: do you

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[paul_tyler]: what’s your yeah

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[ramsey_d_smith]: go ahead

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[david_blanchett]: i think it depends upon where rates
headed you know

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[ramsey_d_smith]: yeah

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[david_blanchett]: i have have no clue if you
told me

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[paul_tyler]: the

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[david_blanchett]: we’d have rats where they are right
now a year ago i would have laughed

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[david_blanchett]: in your

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[paul_tyler]: yeah

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[david_blanchett]: face like that’s that’s absurd i think
that the one thing that i think is

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[david_blanchett]: interesting right now is this is to
michael’s point is like people are

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[paul_tyler]: oh

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[david_blanchett]: really negative about surrender penalties and

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[paul_tyler]: oh

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[david_blanchett]: things like that well insures are as
long as the insure can hold those bonds

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[david_blanchett]: that

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[ramsey_d_smith]: oh

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[david_blanchett]: they use to hedge he risk to

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[ramsey_d_smith]: oh

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[david_blanchett]: maturity that’s okay right

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[ramsey_d_smith]: yeah

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[david_blanchett]: are like like you know enders we
they’rerally not like they allow individuals to

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[ramsey_d_smith]: m

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[david_blanchett]: have access to certain premiums

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[paul_tyler]: yeah

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[david_blanchett]: they couldn’t access

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[ramsey_d_smith]: m

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[david_blanchett]: otherwise so know michael is talking about
fixing news what about

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[paul_tyler]: i

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[david_blanchett]: a mica i mean a mica is
just like a bond that you know maybe

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[david_blanchett]: s offering or four percent

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[ramsey_d_smith]: oh

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[david_blanchett]: it didn’t get marked to market so
i think that you know a lot of

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[david_blanchett]: the aspects people might not like love
about annuities historically are really maybe going to

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[david_blanchett]: change i hope we’re in a a
longer rate environment for ever becase it’s a

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[david_blanchett]: lot of a lot of really cool
products lot of interesting

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[michael_finke]: ye

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[david_blanchett]: innovation moving forward that we wouldn’t have
if we’re in a lower ate environment

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[bruno_caron]: hey while we’re on

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[michael_finke]: yeah

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[bruno_caron]: that topic david can you discuss a
little bit about

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[paul_tyler]: yeah

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[bruno_caron]: the value of

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[paul_tyler]: yes

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[bruno_caron]: the lifetime income features on every single
one of those vehicles and the impact that

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[bruno_caron]: the market has had on

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[michael_finke]: oh

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[bruno_caron]: those particular on those particular writers and
benefits

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[david_blanchett]: so it’s complicated right so i think
that like certain certain annuities that provide live

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[david_blanchett]: time income more market responsive so like
sp is i’ve got a piece

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[paul_tyler]: yeah

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[david_blanchett]: of research in working rghtnowcanact you know
like looking at like how pay out rat

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[david_blanchett]: fespesandds evolve over time like

262
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[paul_tyler]: yes

263
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[david_blanchett]: very market responsive

264
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[paul_tyler]: yeah

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[david_blanchett]: right you know other products maybe a
little bit less but like collectively it should

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[david_blanchett]: all go up now what’s interesting about
about the

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[paul_tyler]: yeah

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[david_blanchett]: value of guaranteed income is that it
actually it’s worth the higher interest rates are

269
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[david_blanchett]: versus self annuitizing right because you can
actually generate more income from just holding tips

270
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[david_blanchett]: today just for example right but the
thing is i think that that

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[michael_finke]: yes

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[david_blanchett]: is actually outweighed by the behavioral benefit
that you get today from buying annuities that

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[david_blanchett]: pay out much higher i think a
lot of people were saying i’m going to

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[david_blanchett]: wait to buy an annuity until rates
are higher you know when michael and i

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[david_blanchett]: were telling everyone is telling a story
they’re actually worth more when rates are lower

276
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[david_blanchett]: no one could buy them but i
think now we have actually entered a space

277
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[david_blanchett]: where technically

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[ramsey_d_smith]: yeah

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[david_blanchett]: technically the value of the guarantee is
less but there’s less behavioral barriers to actually

280
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[david_blanchett]: buy the annuity because because payorachare is
so much more attractive ye

281
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[ramsey_d_smith]: yeah

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[michael_finke]: i mean the other aspect

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[ramsey_d_smith]: no

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[michael_finke]: bruno is if you would have retired
as a lot of people did at the

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[michael_finke]: end of two thousand twenty one

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[paul_tyler]: ye

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[michael_finke]: and you had some sort of a
lifetime

288
00:09:02,283 –> 00:09:02,465
[paul_tyler]: yeah

289
00:09:02,324 –> 00:09:03,366
[michael_finke]: income benefit

290
00:09:03,433 –> 00:09:05,323
[paul_tyler]: yeah

291
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[michael_finke]: on a variable note product

292
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[paul_tyler]: oh

293
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[michael_finke]: then

294
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[ramsey_d_smith]: oh

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[michael_finke]: imagine someone who didn’t have that benefit

296
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[ramsey_d_smith]: ye

297
00:09:10,056 –> 00:09:10,517
[michael_finke]: how they would

298
00:09:10,543 –> 00:09:11,323
[paul_tyler]: yeah

299
00:09:10,577 –> 00:09:12,870
[michael_finke]: be thinking about what to withdraw

300
00:09:13,003 –> 00:09:13,843
[paul_tyler]: yeah

301
00:09:13,050 –> 00:09:16,095
[michael_finke]: from their investment tooartfolio over the course
of two thousand twenty

302
00:09:15,943 –> 00:09:16,603
[paul_tyler]: yeah

303
00:09:16,176 –> 00:09:16,316
[michael_finke]: two

304
00:09:17,053 –> 00:09:17,356
[paul_tyler]: oh

305
00:09:17,077 –> 00:09:20,623
[michael_finke]: if their investments are down by twenty
per cent and they have already been

306
00:09:20,623 –> 00:09:21,313
[paul_tyler]: yeah

307
00:09:20,683 –> 00:09:22,246
[michael_finke]: withdrawing save a million dollar

308
00:09:22,063 –> 00:09:22,753
[paul_tyler]: oh

309
00:09:22,326 –> 00:09:26,358
[michael_finke]: portfolio you started with a million box
you know maybe now you

310
00:09:26,400 –> 00:09:26,721
[ramsey_d_smith]: oh

311
00:09:26,418 –> 00:09:30,841
[michael_finke]: have seven hundred and seventy five thousand
dollars maybe laugh you hoped that you could

312
00:09:30,921 –> 00:09:33,425
[michael_finke]: withdraw fifty thousand dollars a year from
your million dollar

313
00:09:33,210 –> 00:09:34,260
[ramsey_d_smith]: oh

314
00:09:33,465 –> 00:09:39,776
[michael_finke]: portfolio now you’re significantly lower the risk
of withdrawing that fifty thousand dollars a year

315
00:09:39,916 –> 00:09:43,582
[michael_finke]: is significantly higher than it was at
the beginning of the year will you cut

316
00:09:43,682 –> 00:09:47,449
[michael_finke]: back well you go back now to
forty five thousand or forty thousand dollars thanks

317
00:09:47,569 –> 00:09:50,073
[michael_finke]: the true risk of not having that
income benefit

318
00:09:49,980 –> 00:09:50,221
[ramsey_d_smith]: yeah

319
00:09:50,133 –> 00:09:51,175
[michael_finke]: if you have the income benefit

320
00:09:50,893 –> 00:09:51,216
[paul_tyler]: yeah

321
00:09:51,215 –> 00:09:52,798
[michael_finke]: you know have to worry about it
i’m just going to

322
00:09:52,813 –> 00:09:53,115
[paul_tyler]: oh

323
00:09:52,838 –> 00:09:53,178
[michael_finke]: keep with

324
00:09:53,280 –> 00:09:53,502
[ramsey_d_smith]: oh

325
00:09:53,539 –> 00:09:57,240
[michael_finke]: fifty thousand dollars from that investment portfolio
in the face

326
00:09:57,103 –> 00:09:57,431
[paul_tyler]: yeah

327
00:09:57,380 –> 00:10:02,388
[michael_finke]: of whatever head head wins i’m you
know experiencing all investors are experiencing and

328
00:10:02,328 –> 00:10:02,492
[paul_tyler]: yes

329
00:10:02,448 –> 00:10:06,295
[michael_finke]: it may mean that i deplete my
account faster but that’s okay that’s what that

330
00:10:06,335 –> 00:10:09,400
[michael_finke]: money is there for and that’s why
i also think it’s in ably important at

331
00:10:09,420 –> 00:10:13,787
[michael_finke]: the beginning of retirement to establish how
much of your portfolio you want to use

332
00:10:13,847 –> 00:10:17,694
[michael_finke]: for life style because then you don’t
feel bad about the fact that you’ve depleted

333
00:10:17,734 –> 00:10:20,759
[michael_finke]: the account if you have a lifetime
income benefit it’s just part of the did

334
00:10:20,819 –> 00:10:24,266
[michael_finke]: you and the question is you know
if you’re not you don’t have that then

335
00:10:24,327 –> 00:10:28,295
[michael_finke]: if it what does that imply in
terms of life style volatility

336
00:10:28,140 –> 00:10:28,860
[ramsey_d_smith]: yeah

337
00:10:28,355 –> 00:10:29,558
[michael_finke]: you have to be very flexible

338
00:10:31,744 –> 00:10:32,625
[bruno_caron]: i mean that makes

339
00:10:32,940 –> 00:10:33,223
[ramsey_d_smith]: oh

340
00:10:33,006 –> 00:10:36,011
[bruno_caron]: a lot of sense i mean the
two of you have very vocal on the

341
00:10:36,331 –> 00:10:43,303
[bruno_caron]: sequence of return risk which is basically
what you just what you just explain how

342
00:10:43,804 –> 00:10:49,009
[bruno_caron]: how should you new retires view this
this risk in the light

343
00:10:49,050 –> 00:10:49,393
[ramsey_d_smith]: oh

344
00:10:49,169 –> 00:10:51,912
[bruno_caron]: of you know this new economical context

345
00:10:53,646 –> 00:10:53,727
[paul_tyler]: ah

346
00:10:54,562 –> 00:10:56,766
[david_blanchett]: well i think we’ll be able to
take the answer to that about thirty years

347
00:10:56,806 –> 00:10:57,047
[david_blanchett]: from now

348
00:10:57,013 –> 00:10:57,617
[paul_tyler]: uh

349
00:10:57,087 –> 00:10:57,688
[david_blanchett]: right i think that there’s

350
00:10:57,630 –> 00:10:57,650
[ramsey_d_smith]: m

351
00:10:57,708 –> 00:10:58,208
[david_blanchett]: been a lot of great

352
00:10:58,222 –> 00:10:58,243
[paul_tyler]: h

353
00:10:58,269 –> 00:10:58,549
[david_blanchett]: studies

354
00:10:58,375 –> 00:10:58,537
[bruno_caron]: that’s

355
00:10:58,609 –> 00:11:00,352
[david_blanchett]: done using historical long term talking about

356
00:11:00,309 –> 00:11:00,330
[ramsey_d_smith]: m

357
00:11:00,372 –> 00:11:00,612
[david_blanchett]: you know

358
00:11:00,635 –> 00:11:00,817
[bruno_caron]: hello

359
00:11:00,660 –> 00:11:00,964
[ramsey_d_smith]: oh

360
00:11:00,853 –> 00:11:01,933
[paul_tyler]: oh

361
00:11:00,973 –> 00:11:03,557
[david_blanchett]: i mean here’s the man we don’t
know we don’t know where markets

362
00:11:03,390 –> 00:11:04,080
[ramsey_d_smith]: oh

363
00:11:03,597 –> 00:11:05,841
[david_blanchett]: are head i en maybe michael does
because he’s like really smart

364
00:11:06,106 –> 00:11:06,127
[paul_tyler]: i

365
00:11:06,282 –> 00:11:06,643
[david_blanchett]: i don’t know

366
00:11:06,604 –> 00:11:07,027
[bruno_caron]: oh

367
00:11:06,853 –> 00:11:07,843
[paul_tyler]: oh

368
00:11:07,023 –> 00:11:07,925
[david_blanchett]: and so what if this is just

369
00:11:07,933 –> 00:11:07,954
[bruno_caron]: h

370
00:11:07,965 –> 00:11:08,926
[david_blanchett]: the beginning what if what if

371
00:11:09,013 –> 00:11:09,613
[paul_tyler]: yeah

372
00:11:09,027 –> 00:11:10,249
[david_blanchett]: equities just go down for a

373
00:11:10,303 –> 00:11:11,476
[paul_tyler]: ye

374
00:11:10,309 –> 00:11:12,953
[david_blanchett]: decade right like this literally could be
the

375
00:11:13,119 –> 00:11:13,140
[ramsey_d_smith]: m

376
00:11:13,133 –> 00:11:17,320
[david_blanchett]: perfect post your child for sequence risk
and that bonds are down stocks are down

377
00:11:17,380 –> 00:11:21,247
[david_blanchett]: inflations of can’t pick a worse environment
like okay there’ve been periods where

378
00:11:20,970 –> 00:11:21,990
[ramsey_d_smith]: yeah

379
00:11:21,688 –> 00:11:25,374
[david_blanchett]: sixty forty portfolio does has done worse
but it’s hard to find an environment where

380
00:11:25,474 –> 00:11:28,018
[david_blanchett]: inflation has been where it is right
now and stocks

381
00:11:27,819 –> 00:11:27,840
[ramsey_d_smith]: m

382
00:11:28,058 –> 00:11:29,601
[david_blanchett]: and bonds are both down so i
think that

383
00:11:29,893 –> 00:11:30,787
[paul_tyler]: yeah

384
00:11:30,442 –> 00:11:33,067
[david_blanchett]: to me one thing i have to
this is kind of a check i think

385
00:11:33,107 –> 00:11:34,128
[david_blanchett]: for a lot of retires

386
00:11:34,153 –> 00:11:35,293
[paul_tyler]: yeah

387
00:11:34,208 –> 00:11:36,472
[david_blanchett]: where you know maybe if you haven’t
enjoyed

388
00:11:36,211 –> 00:11:36,354
[michael_finke]: yes

389
00:11:36,512 –> 00:11:39,778
[david_blanchett]: your experience so far things would always
get worse i’m not convinced that you

390
00:11:39,779 –> 00:11:39,800
[paul_tyler]: a

391
00:11:39,818 –> 00:11:42,582
[david_blanchett]: know normally i would say we’ll stay
the course but i don’t know only i

392
00:11:42,623 –> 00:11:42,883
[david_blanchett]: do know

393
00:11:42,819 –> 00:11:42,840
[ramsey_d_smith]: m

394
00:11:42,923 –> 00:11:44,826
[david_blanchett]: is that you know if you’re an
advisor out there listening

395
00:11:44,940 –> 00:11:45,247
[ramsey_d_smith]: oh

396
00:11:45,227 –> 00:11:47,230
[david_blanchett]: you’ve got clients that have not enjoyed
you know

397
00:11:47,113 –> 00:11:47,863
[paul_tyler]: yeah

398
00:11:47,330 –> 00:11:50,876
[david_blanchett]: twenty twenty two so far maybe it’s
time to ask this question well is it

399
00:11:50,936 –> 00:11:52,819
[david_blanchett]: worth insuring part of what’s left

400
00:11:53,217 –> 00:11:53,237
[paul_tyler]: a

401
00:11:53,260 –> 00:11:58,249
[david_blanchett]: to insure things you get worse that
my clients have locked in now today a

402
00:11:58,309 –> 00:12:00,172
[david_blanchett]: lot higher income right so there is
this effect

403
00:11:59,893 –> 00:12:00,973
[paul_tyler]: oh

404
00:12:00,212 –> 00:12:01,314
[david_blanchett]: where if you buy bonds you

405
00:12:01,273 –> 00:12:01,963
[paul_tyler]: yeah

406
00:12:01,374 –> 00:12:01,835
[david_blanchett]: kind of hedge

407
00:12:01,680 –> 00:12:01,944
[ramsey_d_smith]: oh

408
00:12:01,895 –> 00:12:05,360
[david_blanchett]: the income and that when bonds go
down interest payots go up

409
00:12:05,985 –> 00:12:06,086
[paul_tyler]: ah

410
00:12:06,202 –> 00:12:07,964
[david_blanchett]: now as the time it’s worth reassessing

411
00:12:07,874 –> 00:12:08,035
[paul_tyler]: yeah

412
00:12:08,925 –> 00:12:10,788
[david_blanchett]: is a investment driven strategy working

413
00:12:10,825 –> 00:12:11,736
[paul_tyler]: yeah

414
00:12:10,948 –> 00:12:12,870
[david_blanchett]: if not what other options are out
there

415
00:12:13,990 –> 00:12:15,511
[ramsey_d_smith]: so how are your various audiences

416
00:12:15,804 –> 00:12:15,968
[michael_finke]: yeah

417
00:12:16,153 –> 00:12:16,903
[paul_tyler]: yeah

418
00:12:16,372 –> 00:12:17,533
[ramsey_d_smith]: responding to that so

419
00:12:17,593 –> 00:12:17,975
[paul_tyler]: yeah

420
00:12:18,014 –> 00:12:19,135
[ramsey_d_smith]: you know you both you

421
00:12:19,333 –> 00:12:19,534
[paul_tyler]: oh

422
00:12:19,335 –> 00:12:23,018
[ramsey_d_smith]: re are out speaking at conference s
you’ve got webinars

423
00:12:24,253 –> 00:12:24,853
[paul_tyler]: yeah

424
00:12:24,960 –> 00:12:25,421
[ramsey_d_smith]: typically

425
00:12:25,235 –> 00:12:25,420
[paul_tyler]: yeah

426
00:12:25,721 –> 00:12:27,885
[ramsey_d_smith]: like the composition of those audiences

427
00:12:27,523 –> 00:12:27,807
[paul_tyler]: yeah

428
00:12:27,965 –> 00:12:28,546
[ramsey_d_smith]: is it more

429
00:12:29,263 –> 00:12:30,463
[paul_tyler]: yeah

430
00:12:30,129 –> 00:12:31,772
[ramsey_d_smith]: insurance agents is it more

431
00:12:32,083 –> 00:12:32,345
[paul_tyler]: yeah

432
00:12:32,454 –> 00:12:34,557
[ramsey_d_smith]: is it more fenuciadvisors

433
00:12:33,900 –> 00:12:34,062
[paul_tyler]: yeah

434
00:12:35,950 –> 00:12:39,480
[ramsey_d_smith]: who are the sort of the whore
the various consistent with constituencies you talked to

435
00:12:39,540 –> 00:12:44,322
[ramsey_d_smith]: and how are they responding to these
to these changes anyway i assume i sum

436
00:12:44,382 –> 00:12:44,622
[ramsey_d_smith]: it comes

437
00:12:44,570 –> 00:12:44,953
[michael_finke]: ramsey

438
00:12:44,682 –> 00:12:45,003
[ramsey_d_smith]: out in the q

439
00:12:45,114 –> 00:12:45,255
[michael_finke]: just

440
00:12:45,224 –> 00:12:45,264
[ramsey_d_smith]: n

441
00:12:45,336 –> 00:12:45,356
[michael_finke]: a

442
00:12:45,344 –> 00:12:45,364
[ramsey_d_smith]: a

443
00:12:45,396 –> 00:12:45,719
[michael_finke]: week and a

444
00:12:45,705 –> 00:12:45,865
[ramsey_d_smith]: yeah

445
00:12:45,779 –> 00:12:46,202
[michael_finke]: half ago

446
00:12:47,108 –> 00:12:47,228
[ramsey_d_smith]: yeah

447
00:12:47,709 –> 00:12:53,347
[michael_finke]: i presented two presentations at napa which
is a fee only adviser conference

448
00:12:53,361 –> 00:12:53,482
[ramsey_d_smith]: yep

449
00:12:54,109 –> 00:12:59,202
[michael_finke]: i presented at napa maybe four years
ago i had some similar messageting in both

450
00:12:59,262 –> 00:13:03,630
[michael_finke]: presentations and i will tell you there
has been a sea change and openness towards

451
00:13:03,710 –> 00:13:05,633
[michael_finke]: the use of annuities among

452
00:13:05,652 –> 00:13:05,672
[ramsey_d_smith]: m

453
00:13:06,013 –> 00:13:06,474
[michael_finke]: fee only

454
00:13:06,459 –> 00:13:06,480
[ramsey_d_smith]: m

455
00:13:06,594 –> 00:13:08,518
[michael_finke]: advisers there’s an increasing

456
00:13:08,109 –> 00:13:08,130
[ramsey_d_smith]: m

457
00:13:08,598 –> 00:13:11,683
[michael_finke]: recogna and that if they’re going to
be a fiduciary they at least have to

458
00:13:11,723 –> 00:13:14,668
[michael_finke]: consider the use of annuities it’s not
just something that they can

459
00:13:14,739 –> 00:13:14,760
[ramsey_d_smith]: m

460
00:13:14,748 –> 00:13:19,055
[michael_finke]: exclude and feel like they’re always going
to be making a decision in the benefit

461
00:13:19,376 –> 00:13:24,524
[michael_finke]: of the client by exclude inganuities um
you know and then i also see statements

462
00:13:24,805 –> 00:13:30,194
[michael_finke]: such as i was just going on
line to a certain famous investment advisors site

463
00:13:30,715 –> 00:13:31,316
[michael_finke]: and he had

464
00:13:31,200 –> 00:13:31,441
[ramsey_d_smith]: yeah

465
00:13:31,376 –> 00:13:36,431
[michael_finke]: to quote on his site that there’s
nothing that you can do with annuities that

466
00:13:36,591 –> 00:13:39,922
[michael_finke]: i can’t do with investments and there
is not

467
00:13:39,962 –> 00:13:40,063
[ramsey_d_smith]: ah

468
00:13:39,982 –> 00:13:44,496
[michael_finke]: a single economist who studies retirement income
planning who would agree with that state and

469
00:13:44,473 –> 00:13:44,696
[paul_tyler]: yeah

470
00:13:44,557 –> 00:13:45,910
[michael_finke]: it’s just demonstrably

471
00:13:45,343 –> 00:13:45,666
[paul_tyler]: yeah

472
00:13:45,789 –> 00:13:45,810
[ramsey_d_smith]: m

473
00:13:46,030 –> 00:13:46,390
[michael_finke]: false

474
00:13:46,736 –> 00:13:46,837
[paul_tyler]: it

475
00:13:47,152 –> 00:13:48,213
[michael_finke]: that attitude

476
00:13:47,944 –> 00:13:48,144
[bruno_caron]: yeah

477
00:13:48,514 –> 00:13:49,175
[michael_finke]: pervaded

478
00:13:49,355 –> 00:13:49,436
[paul_tyler]: ah

479
00:13:49,456 –> 00:13:49,736
[michael_finke]: i think

480
00:13:49,950 –> 00:13:50,191
[ramsey_d_smith]: oh

481
00:13:50,197 –> 00:13:50,279
[paul_tyler]: ah

482
00:13:50,437 –> 00:13:50,998
[michael_finke]: this industry

483
00:13:50,743 –> 00:13:54,253
[paul_tyler]: yeah

484
00:13:51,078 –> 00:13:52,661
[michael_finke]: in many cases especially with the only

485
00:13:52,663 –> 00:13:52,804
[bruno_caron]: yeah

486
00:13:52,741 –> 00:13:56,487
[michael_finke]: industry that attitude has gone away as
far as i am concerned you know i’m

487
00:13:56,527 –> 00:14:00,254
[michael_finke]: not giving these intations i’m seeing a
new level of open it and it is

488
00:14:00,514 –> 00:14:04,140
[michael_finke]: really reassuring to see i think you
know both david and i come from a

489
00:14:04,220 –> 00:14:06,203
[michael_finke]: background where we have

490
00:14:06,043 –> 00:14:06,853
[paul_tyler]: yeah

491
00:14:06,324 –> 00:14:09,229
[michael_finke]: worked with investment advisors who are compensated

492
00:14:09,241 –> 00:14:09,302
[ramsey_d_smith]: m

493
00:14:09,309 –> 00:14:10,811
[michael_finke]: they on sieve we do

494
00:14:10,869 –> 00:14:10,890
[ramsey_d_smith]: m

495
00:14:10,891 –> 00:14:16,120
[michael_finke]: have a very fiduciary mind set the
word but we want to make sure that

496
00:14:16,441 –> 00:14:20,307
[michael_finke]: when advisors are making decisions that they’re
making decisions that are going to be in

497
00:14:20,347 –> 00:14:24,193
[michael_finke]: the best interest of it clint and
we’ve been arguing obviously for a long time

498
00:14:24,274 –> 00:14:26,016
[michael_finke]: that getting rid of this ideosandcradic

499
00:14:25,693 –> 00:14:26,773
[paul_tyler]: yeah

500
00:14:26,157 –> 00:14:30,223
[michael_finke]: engevity risk is an important part of
retirement income planning people can live better if

501
00:14:30,264 –> 00:14:36,212
[michael_finke]: they do it that way i’m seeing
a change frankly it’s reassuring and it’s great

502
00:14:36,293 –> 00:14:39,897
[michael_finke]: that the message is getting out there
but it’s also a message that needs to

503
00:14:39,957 –> 00:14:45,822
[michael_finke]: be couch and it’s something that you
know i think the insurance industry and i’m

504
00:14:45,862 –> 00:14:46,744
[michael_finke]: sure we’ve talked

505
00:14:46,634 –> 00:14:48,853
[paul_tyler]: right

506
00:14:46,784 –> 00:14:50,211
[michael_finke]: about this in the past but to
the extent that there can

507
00:14:50,203 –> 00:14:52,843
[paul_tyler]: yeah

508
00:14:50,272 –> 00:14:54,479
[michael_finke]: be consistency in terms of sale practices
and messaging

509
00:14:54,330 –> 00:14:54,651
[ramsey_d_smith]: oh

510
00:14:54,939 –> 00:14:56,422
[michael_finke]: i’m also seeing in the insurance

511
00:14:56,370 –> 00:14:56,573
[ramsey_d_smith]: oh

512
00:14:56,462 –> 00:15:00,128
[michael_finke]: industry that they are hiring people who
deal with these types of advisors who are

513
00:15:00,168 –> 00:15:05,617
[michael_finke]: really or on how to use annuity
product efficiently for a client but i think

514
00:15:05,637 –> 00:15:12,088
[michael_finke]: that the industry as a whole really
has harmed itself in many ways by not

515
00:15:12,228 –> 00:15:16,033
[michael_finke]: rain and some of the more abusive
sales practices that we continue to see and

516
00:15:16,694 –> 00:15:19,738
[michael_finke]: it’s going to continue to color people’s
impressions of the industry

517
00:15:21,113 –> 00:15:23,698
[david_blanchett]: i mean so i would say i’m
seeing this as michael and

518
00:15:23,803 –> 00:15:24,063
[paul_tyler]: oh

519
00:15:23,818 –> 00:15:24,880
[david_blanchett]: the one point that i make to

520
00:15:24,832 –> 00:15:24,933
[ramsey_d_smith]: oh

521
00:15:25,501 –> 00:15:26,302
[david_blanchett]: people when i talk about

522
00:15:26,494 –> 00:15:27,394
[bruno_caron]: yeah

523
00:15:26,502 –> 00:15:26,663
[david_blanchett]: anne

524
00:15:26,520 –> 00:15:26,932
[ramsey_d_smith]: oh

525
00:15:26,593 –> 00:15:26,834
[paul_tyler]: yeah

526
00:15:26,763 –> 00:15:28,145
[david_blanchett]: use is like i’m not suggesting that

527
00:15:28,204 –> 00:15:28,466
[bruno_caron]: oh

528
00:15:28,205 –> 00:15:28,566
[david_blanchett]: all of your

529
00:15:28,620 –> 00:15:29,490
[ramsey_d_smith]: yeah

530
00:15:28,626 –> 00:15:29,868
[david_blanchett]: clients need an annuity

531
00:15:29,944 –> 00:15:30,145
[bruno_caron]: yeah

532
00:15:29,948 –> 00:15:31,471
[david_blanchett]: or maybe it’s less than like five
percent

533
00:15:31,723 –> 00:15:32,353
[paul_tyler]: oh

534
00:15:31,751 –> 00:15:33,274
[david_blanchett]: but it’s not zero and i think
that far

535
00:15:33,278 –> 00:15:33,298
[paul_tyler]: i

536
00:15:33,374 –> 00:15:34,295
[david_blanchett]: too many advisors

537
00:15:33,973 –> 00:15:35,173
[paul_tyler]: oh

538
00:15:34,396 –> 00:15:37,621
[david_blanchett]: that are doing retirement income planning is

539
00:15:37,560 –> 00:15:37,844
[ramsey_d_smith]: oh

540
00:15:38,142 –> 00:15:38,222
[david_blanchett]: the

541
00:15:38,224 –> 00:15:38,944
[bruno_caron]: oh

542
00:15:38,282 –> 00:15:39,163
[david_blanchett]: number of their clients

543
00:15:39,060 –> 00:15:40,470
[ramsey_d_smith]: yeah

544
00:15:39,184 –> 00:15:41,748
[david_blanchett]: that have any kind of product that
provides guaranteed lifetime

545
00:15:41,533 –> 00:15:41,793
[paul_tyler]: yeah

546
00:15:41,828 –> 00:15:44,553
[david_blanchett]: income is zero and so i think
the goal to kind of get

547
00:15:44,593 –> 00:15:44,917
[paul_tyler]: yeah

548
00:15:44,613 –> 00:15:49,341
[david_blanchett]: them to kind of more actively considerate
and i do feel like we’re making positive

549
00:15:49,292 –> 00:15:49,843
[paul_tyler]: yeah

550
00:15:49,381 –> 00:15:50,743
[david_blanchett]: steps but you know to be

551
00:15:50,745 –> 00:15:50,846
[paul_tyler]: ah

552
00:15:50,803 –> 00:15:54,129
[david_blanchett]: honest we haven’t made the steps thought
we would have five years ago hopefully the

553
00:15:54,169 –> 00:15:56,109
[david_blanchett]: next five years is better oh

554
00:15:57,681 –> 00:16:01,167
[ramsey_d_smith]: all right so before the call we
we touched briefly

555
00:16:00,856 –> 00:16:00,876
[bruno_caron]: m

556
00:16:01,267 –> 00:16:04,873
[ramsey_d_smith]: on the on the four percent rule
and that’s a that

557
00:16:04,804 –> 00:16:05,644
[bruno_caron]: oh

558
00:16:04,933 –> 00:16:05,113
[ramsey_d_smith]: is a

559
00:16:05,623 –> 00:16:06,150
[paul_tyler]: oh

560
00:16:05,854 –> 00:16:08,499
[ramsey_d_smith]: that discussion is a very regular refrain
on this

561
00:16:08,708 –> 00:16:08,810
[bruno_caron]: yes

562
00:16:09,100 –> 00:16:13,467
[ramsey_d_smith]: on this show so wanted to get
a sense first of what your what you’re

563
00:16:13,647 –> 00:16:17,033
[ramsey_d_smith]: both of your recent thoughts are on
the four percent role and it’s and it’s

564
00:16:17,674 –> 00:16:21,122
[ramsey_d_smith]: and it’s it’s rolled in the in
the personal financial man but

565
00:16:21,103 –> 00:16:21,447
[paul_tyler]: oh

566
00:16:21,163 –> 00:16:21,630
[ramsey_d_smith]: discussion

567
00:16:22,423 –> 00:16:23,383
[paul_tyler]: yeah

568
00:16:24,382 –> 00:16:24,644
[david_blanchett]: oh

569
00:16:24,560 –> 00:16:24,982
[ramsey_d_smith]: i’ll start with

570
00:16:24,909 –> 00:16:25,231
[michael_finke]: ramsey

571
00:16:25,002 –> 00:16:25,404
[ramsey_d_smith]: you michael

572
00:16:26,007 –> 00:16:26,170
[bruno_caron]: yes

573
00:16:27,029 –> 00:16:27,109
[michael_finke]: you

574
00:16:27,064 –> 00:16:27,346
[bruno_caron]: yah

575
00:16:27,149 –> 00:16:27,770
[michael_finke]: know i just gave

576
00:16:27,630 –> 00:16:28,558
[ramsey_d_smith]: yea

577
00:16:27,830 –> 00:16:28,772
[michael_finke]: a presentation

578
00:16:29,542 –> 00:16:29,683
[bruno_caron]: yah

579
00:16:29,914 –> 00:16:31,516
[michael_finke]: at tim co and

580
00:16:31,534 –> 00:16:31,756
[bruno_caron]: yeah

581
00:16:32,839 –> 00:16:34,662
[michael_finke]: at the very beginning of the presentation

582
00:16:34,376 –> 00:16:34,458
[ramsey_d_smith]: ah

583
00:16:35,202 –> 00:16:40,592
[michael_finke]: there was an introduction by richard taylor
of the topic the four percent rule and

584
00:16:40,913 –> 00:16:41,113
[michael_finke]: his

585
00:16:41,164 –> 00:16:41,466
[bruno_caron]: my

586
00:16:41,354 –> 00:16:47,447
[michael_finke]: introduction was well everybody knows that the
four per cent rule is dumb you know

587
00:16:47,667 –> 00:16:51,203
[michael_finke]: ted richard taylor by the way is
a novel lariayouknow the father

588
00:16:50,970 –> 00:16:51,630
[ramsey_d_smith]: yeah

589
00:16:51,263 –> 00:16:53,467
[michael_finke]: of behavioral finance and his impression

590
00:16:53,115 –> 00:16:53,156
[ramsey_d_smith]: m

591
00:16:53,547 –> 00:16:53,848
[michael_finke]: of the four

592
00:16:53,829 –> 00:16:53,850
[ramsey_d_smith]: m

593
00:16:53,928 –> 00:16:55,791
[michael_finke]: percent rule is pretty much consistent with

594
00:16:55,650 –> 00:16:55,894
[ramsey_d_smith]: oh

595
00:16:56,292 –> 00:16:56,572
[michael_finke]: the way a

596
00:16:56,554 –> 00:16:56,776
[bruno_caron]: oh

597
00:16:56,632 –> 00:16:59,457
[michael_finke]: lot of us have thought about it
for a long time it’s not so much

598
00:16:59,477 –> 00:16:59,577
[michael_finke]: that

599
00:16:59,619 –> 00:16:59,640
[ramsey_d_smith]: m

600
00:16:59,637 –> 00:16:59,677
[michael_finke]: it

601
00:16:59,674 –> 00:16:59,694
[bruno_caron]: m

602
00:16:59,717 –> 00:16:59,838
[michael_finke]: would

603
00:16:59,730 –> 00:16:59,971
[ramsey_d_smith]: oh

604
00:17:00,439 –> 00:17:01,600
[michael_finke]: the original conception

605
00:17:01,241 –> 00:17:01,404
[paul_tyler]: yeah

606
00:17:01,741 –> 00:17:02,181
[michael_finke]: was dumb

607
00:17:02,149 –> 00:17:02,250
[ramsey_d_smith]: yeah

608
00:17:02,203 –> 00:17:02,953
[paul_tyler]: yeah

609
00:17:02,241 –> 00:17:02,802
[michael_finke]: in fact they made

610
00:17:02,674 –> 00:17:02,916
[bruno_caron]: oh

611
00:17:02,842 –> 00:17:03,503
[michael_finke]: a very good

612
00:17:03,422 –> 00:17:03,544
[bruno_caron]: yeah

613
00:17:03,644 –> 00:17:05,767
[michael_finke]: point bill began when he wrote the
paper and that

614
00:17:05,644 –> 00:17:05,664
[bruno_caron]: m

615
00:17:05,867 –> 00:17:11,837
[michael_finke]: is you can’t simply rely on average
returns to estimate what is safe with roll

616
00:17:11,764 –> 00:17:11,784
[bruno_caron]: m

617
00:17:11,897 –> 00:17:13,319
[michael_finke]: rated so you use historical

618
00:17:13,024 –> 00:17:13,044
[bruno_caron]: m

619
00:17:13,560 –> 00:17:18,708
[michael_finke]: united states returns et cetera and one
aspect of the four percent rule that got

620
00:17:18,788 –> 00:17:21,544
[michael_finke]: take up with this idea of a
fixed

621
00:17:21,960 –> 00:17:22,620
[ramsey_d_smith]: yeah

622
00:17:22,259 –> 00:17:27,544
[michael_finke]: spending amount from a volatile portfoltha ou
simply can’t do that can’t have a fixed

623
00:17:27,624 –> 00:17:29,345
[michael_finke]: spending amount from a volatile

624
00:17:28,959 –> 00:17:28,980
[ramsey_d_smith]: m

625
00:17:29,385 –> 00:17:31,407
[michael_finke]: portfolio because the portfolio rise

626
00:17:31,389 –> 00:17:31,410
[ramsey_d_smith]: m

627
00:17:31,467 –> 00:17:33,520
[michael_finke]: and fall over time and if it
falls

628
00:17:33,360 –> 00:17:33,666
[ramsey_d_smith]: oh

629
00:17:33,600 –> 00:17:38,027
[michael_finke]: over time and you get a decade
for example like the one retires may be

630
00:17:38,107 –> 00:17:41,853
[michael_finke]: facing they’ve retired in two thousand twenty
one the reality is that they’re going to

631
00:17:41,893 –> 00:17:43,396
[michael_finke]: have to cut back on their spending

632
00:17:43,054 –> 00:17:43,294
[bruno_caron]: oh

633
00:17:43,539 –> 00:17:43,560
[ramsey_d_smith]: m

634
00:17:44,358 –> 00:17:44,638
[michael_finke]: in that

635
00:17:44,739 –> 00:17:44,760
[ramsey_d_smith]: m

636
00:17:45,139 –> 00:17:46,621
[michael_finke]: to some different variants

637
00:17:46,269 –> 00:17:47,580
[ramsey_d_smith]: m oh

638
00:17:46,681 –> 00:17:46,722
[michael_finke]: of

639
00:17:46,703 –> 00:17:46,864
[bruno_caron]: yeah

640
00:17:46,782 –> 00:17:48,164
[michael_finke]: the four percent rule that

641
00:17:48,150 –> 00:17:49,020
[ramsey_d_smith]: oh

642
00:17:48,224 –> 00:17:50,748
[michael_finke]: created guard rails to allow clients

643
00:17:50,469 –> 00:17:50,490
[ramsey_d_smith]: m

644
00:17:50,848 –> 00:17:52,712
[michael_finke]: to adjust their spending upward or downward

645
00:17:52,645 –> 00:17:52,787
[paul_tyler]: what

646
00:17:53,052 –> 00:17:56,338
[michael_finke]: that’s probably a more realistic approach to
trying to develop a spending

647
00:17:56,319 –> 00:17:56,340
[ramsey_d_smith]: m

648
00:17:56,398 –> 00:18:02,628
[michael_finke]: plan from volatile portfolio but again it
also doesn’t address this idea of umlaungevity risk

649
00:18:03,129 –> 00:18:08,558
[michael_finke]: and it doesn’t really say anything about
what happens when you fail you know people

650
00:18:08,638 –> 00:18:12,489
[michael_finke]: run then marti carlo analysis and maybe
you have an eighty percent chance of success

651
00:18:12,509 –> 00:18:17,662
[michael_finke]: but there’s no information about how bad
things can get when you experience when you’re

652
00:18:17,762 –> 00:18:21,368
[michael_finke]: one of those twenty percent of retires
to experience failure and so i kind of

653
00:18:21,428 –> 00:18:27,318
[michael_finke]: is type like to us something called
a utility analysis where it recognizes that

654
00:18:27,274 –> 00:18:29,824
[bruno_caron]: yeah

655
00:18:28,019 –> 00:18:30,744
[michael_finke]: you know if you fail to spend
eight thousand dollars

656
00:18:30,810 –> 00:18:31,410
[ramsey_d_smith]: oh

657
00:18:30,844 –> 00:18:31,104
[michael_finke]: a year

658
00:18:30,924 –> 00:18:30,985
[bruno_caron]: ah

659
00:18:31,645 –> 00:18:32,486
[michael_finke]: but the downside

660
00:18:32,313 –> 00:18:32,374
[bruno_caron]: ah

661
00:18:32,547 –> 00:18:33,749
[michael_finke]: is that you’re spending seventy thousand

662
00:18:33,570 –> 00:18:33,855
[ramsey_d_smith]: oh

663
00:18:33,789 –> 00:18:38,416
[michael_finke]: dollars a year that’s okay that’s that’s
a much better failure than having to go

664
00:18:38,496 –> 00:18:40,099
[michael_finke]: from eight thousand to thirty thousand

665
00:18:40,059 –> 00:18:40,080
[ramsey_d_smith]: m

666
00:18:40,139 –> 00:18:41,201
[michael_finke]: dollars a year and live off

667
00:18:41,203 –> 00:18:41,504
[paul_tyler]: oh

668
00:18:41,261 –> 00:18:42,603
[michael_finke]: social security so

669
00:18:43,043 –> 00:18:43,590
[ramsey_d_smith]: hm

670
00:18:43,264 –> 00:18:45,087
[michael_finke]: the gradation of life style

671
00:18:45,249 –> 00:18:45,270
[ramsey_d_smith]: m

672
00:18:45,548 –> 00:18:46,650
[michael_finke]: is what is captured

673
00:18:46,499 –> 00:18:46,561
[paul_tyler]: ay

674
00:18:46,710 –> 00:18:48,173
[michael_finke]: by using a utility analysis

675
00:18:47,788 –> 00:18:47,871
[paul_tyler]: ah

676
00:18:47,919 –> 00:18:47,940
[ramsey_d_smith]: m

677
00:18:48,233 –> 00:18:49,314
[michael_finke]: but it’s a little bit less

678
00:18:49,560 –> 00:18:49,580
[ramsey_d_smith]: m

679
00:18:49,815 –> 00:18:53,722
[michael_finke]: easy for advisors to understand output it
can optimize

680
00:18:53,319 –> 00:18:53,340
[ramsey_d_smith]: m

681
00:18:53,802 –> 00:18:58,971
[michael_finke]: but it can’t necessarily show you a
very compelling a vocative statistics like a failure

682
00:18:59,011 –> 00:18:59,752
[michael_finke]: rate but that

683
00:18:59,635 –> 00:18:59,656
[bruno_caron]: i

684
00:18:59,832 –> 00:19:00,353
[michael_finke]: failure rate

685
00:19:00,450 –> 00:19:01,380
[ramsey_d_smith]: oh

686
00:19:00,814 –> 00:19:05,711
[michael_finke]: really neglects a lot of important information
and that should go into the retirement

687
00:19:05,353 –> 00:19:06,632
[paul_tyler]: oh

688
00:19:05,751 –> 00:19:06,495
[michael_finke]: planning process

689
00:19:07,303 –> 00:19:08,173
[paul_tyler]: oh

690
00:19:07,980 –> 00:19:12,368
[ramsey_d_smith]: well it seems to me that like
the way that the rule is used and

691
00:19:13,590 –> 00:19:16,054
[ramsey_d_smith]: i’m being this is a rough rough
way of putting it but

692
00:19:16,505 –> 00:19:17,562
[paul_tyler]: yea

693
00:19:16,595 –> 00:19:19,440
[ramsey_d_smith]: it sort of described in a very
linear way and what you’re talking about is

694
00:19:19,483 –> 00:19:19,704
[paul_tyler]: yeah

695
00:19:19,720 –> 00:19:23,166
[ramsey_d_smith]: right has right the utility function as
a curve to it right

696
00:19:23,053 –> 00:19:23,295
[paul_tyler]: oh

697
00:19:23,466 –> 00:19:23,687
[ramsey_d_smith]: and

698
00:19:24,354 –> 00:19:24,516
[paul_tyler]: yeah

699
00:19:24,588 –> 00:19:26,832
[ramsey_d_smith]: to your point going from eighty to
seventy maybe means

700
00:19:26,713 –> 00:19:27,373
[paul_tyler]: oh

701
00:19:27,273 –> 00:19:27,854
[ramsey_d_smith]: right fewer

702
00:19:27,763 –> 00:19:28,024
[paul_tyler]: oh

703
00:19:27,874 –> 00:19:30,498
[ramsey_d_smith]: trips to the golf course but going
from seventy

704
00:19:30,424 –> 00:19:30,628
[bruno_caron]: oh

705
00:19:30,578 –> 00:19:31,620
[ramsey_d_smith]: to thirty it

706
00:19:31,935 –> 00:19:32,016
[paul_tyler]: ah

707
00:19:31,960 –> 00:19:33,283
[ramsey_d_smith]: means you know a lot more

708
00:19:33,274 –> 00:19:33,294
[bruno_caron]: m

709
00:19:33,303 –> 00:19:33,683
[ramsey_d_smith]: essentials

710
00:19:33,613 –> 00:19:34,393
[paul_tyler]: oh

711
00:19:33,743 –> 00:19:38,652
[ramsey_d_smith]: are you know are at risk um
know we had we had william began on

712
00:19:38,692 –> 00:19:39,573
[ramsey_d_smith]: the show some

713
00:19:39,643 –> 00:19:39,904
[paul_tyler]: yeah

714
00:19:39,653 –> 00:19:40,715
[ramsey_d_smith]: number of months ago and

715
00:19:40,834 –> 00:19:41,734
[bruno_caron]: oh

716
00:19:41,296 –> 00:19:42,999
[ramsey_d_smith]: one of the things that was really
remarkable as i

717
00:19:43,033 –> 00:19:43,274
[paul_tyler]: oh

718
00:19:43,039 –> 00:19:45,303
[ramsey_d_smith]: think that he would find common ground
with you and many of the things

719
00:19:45,283 –> 00:19:45,544
[paul_tyler]: oh

720
00:19:45,343 –> 00:19:47,266
[ramsey_d_smith]: you said he talked about spending

721
00:19:47,053 –> 00:19:47,338
[paul_tyler]: oh

722
00:19:47,306 –> 00:19:52,615
[ramsey_d_smith]: control is sort of a fundamental underlying
element that isn’t talked about enough um the

723
00:19:52,635 –> 00:19:53,897
[ramsey_d_smith]: four percent rule is i think it’s

724
00:19:54,394 –> 00:19:54,878
[paul_tyler]: i test

725
00:19:54,618 –> 00:19:54,718
[ramsey_d_smith]: my

726
00:19:54,656 –> 00:19:54,677
[michael_finke]: i

727
00:19:54,778 –> 00:19:57,803
[ramsey_d_smith]: view is it’s really good bench mark
and a good place to start a discussion

728
00:19:57,323 –> 00:19:57,504
[paul_tyler]: yeah

729
00:19:59,366 –> 00:20:00,668
[ramsey_d_smith]: and unfortunately

730
00:20:00,232 –> 00:20:00,514
[david_blanchett]: oh

731
00:20:00,768 –> 00:20:02,932
[ramsey_d_smith]: it has been sort of over utilized
as a

732
00:20:02,985 –> 00:20:03,085
[bruno_caron]: is

733
00:20:03,713 –> 00:20:03,914
[ramsey_d_smith]: right

734
00:20:05,674 –> 00:20:05,898
[bruno_caron]: yeah

735
00:20:06,318 –> 00:20:08,989
[ramsey_d_smith]: it’s been used dogmatical in a way
i don’t think it was ever actually

736
00:20:08,985 –> 00:20:09,188
[bruno_caron]: yes

737
00:20:09,009 –> 00:20:10,256
[ramsey_d_smith]: meant to be meant to be applied

738
00:20:12,342 –> 00:20:12,402
[david_blanchett]: so

739
00:20:12,588 –> 00:20:12,709
[paul_tyler]: yeah

740
00:20:12,622 –> 00:20:15,026
[david_blanchett]: i mean real quick i mean all
all it tells you

741
00:20:14,974 –> 00:20:14,994
[bruno_caron]: m

742
00:20:15,647 –> 00:20:19,033
[david_blanchett]: is how much you need to have
saved when you retire it’s really you just

743
00:20:19,073 –> 00:20:20,075
[david_blanchett]: need twenty five times

744
00:20:19,849 –> 00:20:20,509
[michael_finke]: yeah

745
00:20:20,115 –> 00:20:22,980
[david_blanchett]: your income goal that’s all it’s ever
intended to do i think

746
00:20:22,949 –> 00:20:22,969
[ramsey_d_smith]: m

747
00:20:23,420 –> 00:20:23,981
[david_blanchett]: i think that

748
00:20:23,940 –> 00:20:24,600
[ramsey_d_smith]: yeah

749
00:20:24,222 –> 00:20:25,304
[david_blanchett]: that advice is still

750
00:20:25,500 –> 00:20:25,641
[ramsey_d_smith]: oh

751
00:20:25,564 –> 00:20:27,167
[david_blanchett]: is still a decent rule of thumb

752
00:20:27,258 –> 00:20:27,399
[ramsey_d_smith]: yeah

753
00:20:27,327 –> 00:20:27,728
[david_blanchett]: i mean it’s

754
00:20:27,760 –> 00:20:27,901
[ramsey_d_smith]: yeah

755
00:20:27,768 –> 00:20:29,871
[david_blanchett]: obviously not optima for everyone i think

756
00:20:29,700 –> 00:20:29,963
[ramsey_d_smith]: oh

757
00:20:29,991 –> 00:20:32,896
[david_blanchett]: the larger issue as michal points out
are the underling assumptions

758
00:20:32,889 –> 00:20:32,910
[ramsey_d_smith]: m

759
00:20:32,936 –> 00:20:37,364
[david_blanchett]: that have been used in that model
and other models as well they’ll still permeate

760
00:20:37,724 –> 00:20:41,050
[david_blanchett]: the advisors use today and i think
that you know using some of those assumptions

761
00:20:41,130 –> 00:20:41,591
[david_blanchett]: can lead to

762
00:20:41,550 –> 00:20:41,772
[ramsey_d_smith]: yeah

763
00:20:41,791 –> 00:20:45,758
[david_blanchett]: radically bad advice for advisors who are
doing these financial plans

764
00:20:45,570 –> 00:20:45,838
[ramsey_d_smith]: my

765
00:20:45,838 –> 00:20:50,367
[david_blanchett]: for individuals when focus on things like
the probe ability of success that totally ignores

766
00:20:50,407 –> 00:20:51,129
[david_blanchett]: the magnitude of fill

767
00:20:51,360 –> 00:20:51,380
[ramsey_d_smith]: m

768
00:20:52,794 –> 00:20:55,919
[paul_tyler]: well maybe talk we could talk a
little bit about

769
00:20:56,086 –> 00:20:56,187
[bruno_caron]: ah

770
00:20:56,120 –> 00:21:01,028
[paul_tyler]: you know advice in this period of
time i think of all the rules that

771
00:21:01,308 –> 00:21:01,729
[paul_tyler]: we’ve talked

772
00:21:01,599 –> 00:21:01,620
[ramsey_d_smith]: m

773
00:21:01,749 –> 00:21:05,736
[paul_tyler]: about things like don’t try to time
the mark well should you try the time

774
00:21:05,776 –> 00:21:07,178
[paul_tyler]: to interest environment

775
00:21:07,209 –> 00:21:07,230
[ramsey_d_smith]: m

776
00:21:07,579 –> 00:21:09,181
[paul_tyler]: right the interest rate and why should
i try

777
00:21:09,229 –> 00:21:09,493
[michael_finke]: my

778
00:21:09,262 –> 00:21:09,342
[paul_tyler]: to

779
00:21:09,579 –> 00:21:09,600
[ramsey_d_smith]: m

780
00:21:09,983 –> 00:21:16,434
[paul_tyler]: should i try to time the guaranteed
income market i never would have expected we

781
00:21:16,594 –> 00:21:24,988
[paul_tyler]: see such change dave that we talked
about earlier in income interest rates um and

782
00:21:25,068 –> 00:21:26,470
[paul_tyler]: just to give you a little bit
of color

783
00:21:26,169 –> 00:21:26,251
[bruno_caron]: ah

784
00:21:27,212 –> 00:21:27,352
[paul_tyler]: we’ve

785
00:21:27,299 –> 00:21:27,421
[bruno_caron]: is

786
00:21:27,392 –> 00:21:30,056
[paul_tyler]: had so much activity you knows a
car as carriers

787
00:21:30,240 –> 00:21:30,664
[ramsey_d_smith]: oh

788
00:21:30,637 –> 00:21:34,864
[paul_tyler]: trying to keep up with rates and
deliver now value consumers an agent the same

789
00:21:34,924 –> 00:21:37,108
[paul_tyler]: time agents have used this and advisers

790
00:21:36,630 –> 00:21:36,811
[ramsey_d_smith]: oh

791
00:21:36,810 –> 00:21:37,051
[bruno_caron]: yes

792
00:21:37,168 –> 00:21:40,894
[paul_tyler]: are using this opportunity to go back
and say you know you were in this

793
00:21:40,954 –> 00:21:46,043
[paul_tyler]: product you were in this plan will
move you to hear um carries there’s a

794
00:21:46,063 –> 00:21:48,046
[paul_tyler]: tremendous backlog in carriers

795
00:21:48,930 –> 00:21:49,176
[ramsey_d_smith]: oh

796
00:21:48,988 –> 00:21:53,415
[paul_tyler]: a lot of this a lot of
the money is coming from retirement accounts investment

797
00:21:53,455 –> 00:21:55,579
[paul_tyler]: accounts and they may have started

798
00:21:55,474 –> 00:21:55,836
[bruno_caron]: oh

799
00:21:55,639 –> 00:22:00,156
[paul_tyler]: a conversation with a with their advisor
two months ago the money hasn’t transferred yet

800
00:22:01,097 –> 00:22:02,179
[paul_tyler]: and the balances are down

801
00:22:02,250 –> 00:22:02,970
[ramsey_d_smith]: my

802
00:22:03,141 –> 00:22:07,007
[paul_tyler]: so it’s really this really strange hurry
up and weight

803
00:22:07,020 –> 00:22:07,349
[ramsey_d_smith]: oh

804
00:22:07,127 –> 00:22:12,336
[paul_tyler]: i mean what would your advice be
and all as david and michael to advisors

805
00:22:12,436 –> 00:22:14,660
[paul_tyler]: who are in that transition point

806
00:22:14,401 –> 00:22:14,522
[michael_finke]: or

807
00:22:14,800 –> 00:22:19,047
[paul_tyler]: at this moment with a client trying
to move them from a market based you

808
00:22:19,087 –> 00:22:19,488
[paul_tyler]: know from

809
00:22:19,919 –> 00:22:19,999
[michael_finke]: we

810
00:22:20,930 –> 00:22:22,292
[paul_tyler]: equity exposure into it

811
00:22:22,449 –> 00:22:22,470
[ramsey_d_smith]: m

812
00:22:22,474 –> 00:22:22,857
[paul_tyler]: guaranteed

813
00:22:22,661 –> 00:22:22,702
[michael_finke]: a

814
00:22:22,897 –> 00:22:23,502
[paul_tyler]: income space

815
00:22:24,973 –> 00:22:25,293
[david_blanchett]: so the one

816
00:22:25,223 –> 00:22:25,364
[paul_tyler]: yeah

817
00:22:25,313 –> 00:22:25,574
[david_blanchett]: thing that

818
00:22:25,800 –> 00:22:25,820
[ramsey_d_smith]: m

819
00:22:25,955 –> 00:22:29,142
[david_blanchett]: i think is a bit different now
versus like where we were in early twenty

820
00:22:29,222 –> 00:22:31,287
[david_blanchett]: twenty is that they weren’t necessarily

821
00:22:30,904 –> 00:22:30,924
[bruno_caron]: m

822
00:22:31,327 –> 00:22:34,453
[david_blanchett]: very good you know safe options that
now

823
00:22:34,543 –> 00:22:34,564
[bruno_caron]: m

824
00:22:34,554 –> 00:22:38,460
[david_blanchett]: you can get my guess yielding five
per cent the caps on fees spectacular i

825
00:22:38,520 –> 00:22:43,108
[david_blanchett]: think that you know that i always
worry about investors staying the course right

826
00:22:43,003 –> 00:22:43,227
[paul_tyler]: yes

827
00:22:43,448 –> 00:22:47,956
[david_blanchett]: but it’s always kind of dorbydory or
do i stick with the balance portfolio or

828
00:22:48,016 –> 00:22:50,320
[david_blanchett]: do i move to something else that
may be more secure well now

829
00:22:50,889 –> 00:22:50,910
[ramsey_d_smith]: m

830
00:22:51,281 –> 00:22:54,787
[david_blanchett]: i do think it’s worth having conversations
and say hey you know the markets might

831
00:22:54,847 –> 00:22:57,292
[david_blanchett]: rally they have rallied so far that
they might rally last month

832
00:22:57,189 –> 00:22:57,210
[ramsey_d_smith]: m

833
00:22:57,393 –> 00:22:58,504
[david_blanchett]: i rally michael down again

834
00:22:58,744 –> 00:22:58,926
[bruno_caron]: oh

835
00:22:59,622 –> 00:23:00,223
[david_blanchett]: how do you feel

836
00:23:00,279 –> 00:23:00,300
[ramsey_d_smith]: m

837
00:23:00,283 –> 00:23:01,485
[david_blanchett]: about your current your current

838
00:23:01,294 –> 00:23:02,134
[bruno_caron]: yeah

839
00:23:01,545 –> 00:23:05,492
[david_blanchett]: strategy and i think that now more
than ever you know it’s worth advisors understanding

840
00:23:05,400 –> 00:23:05,420
[ramsey_d_smith]: m

841
00:23:05,512 –> 00:23:09,238
[david_blanchett]: where these products it because what worries
me is that someone looked at apia you

842
00:23:09,278 –> 00:23:12,346
[david_blanchett]: know a year ago and they hated
it and they don’t real how the market

843
00:23:12,406 –> 00:23:13,652
[david_blanchett]: has evolved radically

844
00:23:13,873 –> 00:23:14,713
[paul_tyler]: yeah

845
00:23:14,174 –> 00:23:14,636
[david_blanchett]: over that last

846
00:23:14,580 –> 00:23:14,600
[ramsey_d_smith]: m

847
00:23:14,696 –> 00:23:14,837
[david_blanchett]: year

848
00:23:14,983 –> 00:23:16,003
[paul_tyler]: yeah

849
00:23:16,579 –> 00:23:18,911
[michael_finke]: yeah if you’re thinking in terms

850
00:23:18,853 –> 00:23:19,513
[paul_tyler]: yeah

851
00:23:18,971 –> 00:23:23,078
[michael_finke]: of timing interest rates it’s not a
bad idea to look at where the yield

852
00:23:23,158 –> 00:23:26,704
[michael_finke]: curve is right now because the markets
telling you what the expectations

853
00:23:26,550 –> 00:23:26,712
[ramsey_d_smith]: oh

854
00:23:26,844 –> 00:23:27,826
[michael_finke]: are for interest

855
00:23:27,703 –> 00:23:27,724
[bruno_caron]: m

856
00:23:27,866 –> 00:23:31,973
[michael_finke]: rates going forward and it is that
they will fall i mean it’s not a

857
00:23:32,053 –> 00:23:32,914
[michael_finke]: perfect predictor

858
00:23:32,910 –> 00:23:33,540
[ramsey_d_smith]: oh

859
00:23:32,974 –> 00:23:34,336
[michael_finke]: of interest rates but

860
00:23:34,170 –> 00:23:34,352
[ramsey_d_smith]: oh

861
00:23:34,817 –> 00:23:39,465
[michael_finke]: you know the ten year is significantly
lower than the one year or two year

862
00:23:40,467 –> 00:23:41,148
[michael_finke]: treasury so

863
00:23:41,799 –> 00:23:41,820
[ramsey_d_smith]: m

864
00:23:42,009 –> 00:23:44,513
[michael_finke]: it’s telling you that the market is

865
00:23:44,494 –> 00:23:45,184
[bruno_caron]: yeah

866
00:23:44,594 –> 00:23:46,116
[michael_finke]: expecting this to be a temporary

867
00:23:46,084 –> 00:23:46,326
[bruno_caron]: oh

868
00:23:46,256 –> 00:23:50,704
[michael_finke]: short phenomenon of high interest rates to
sort of flow down the rate of inflation

869
00:23:51,645 –> 00:23:56,233
[michael_finke]: and it’s a retire you can take
vantage fees i mean if i just looked

870
00:23:56,273 –> 00:24:01,021
[michael_finke]: at five year mica yesterday and they
were five point two percent from high quality

871
00:24:01,361 –> 00:24:01,802
[michael_finke]: insures

872
00:24:02,010 –> 00:24:02,532
[ramsey_d_smith]: oh

873
00:24:02,303 –> 00:24:05,569
[michael_finke]: if you can lock in your five
year liability

874
00:24:05,400 –> 00:24:06,150
[ramsey_d_smith]: oh

875
00:24:05,669 –> 00:24:10,455
[michael_finke]: is using a five point two per
cent rate retirement income is a lot less

876
00:24:10,555 –> 00:24:11,577
[michael_finke]: expensive than it was

877
00:24:11,610 –> 00:24:11,630
[ramsey_d_smith]: m

878
00:24:11,777 –> 00:24:12,358
[michael_finke]: a year ago

879
00:24:12,763 –> 00:24:12,784
[bruno_caron]: m

880
00:24:13,314 –> 00:24:13,820
[paul_tyler]: oh

881
00:24:13,399 –> 00:24:17,765
[michael_finke]: you know if it’s good enough if
if that will help you meet your liabilities

882
00:24:17,805 –> 00:24:17,925
[michael_finke]: you’re

883
00:24:17,820 –> 00:24:17,840
[ramsey_d_smith]: m

884
00:24:17,945 –> 00:24:22,541
[michael_finke]: expected liabilities and retirement at a much
lower cost it might be worth locking those

885
00:24:22,657 –> 00:24:22,738
[paul_tyler]: this

886
00:24:22,781 –> 00:24:22,902
[michael_finke]: in

887
00:24:22,839 –> 00:24:22,960
[paul_tyler]: coup

888
00:24:23,042 –> 00:24:23,362
[michael_finke]: today

889
00:24:23,233 –> 00:24:23,455
[paul_tyler]: yeah

890
00:24:23,523 –> 00:24:25,887
[michael_finke]: who knows none of us know where
interest rates are going to go

891
00:24:26,083 –> 00:24:27,283
[paul_tyler]: oh

892
00:24:26,467 –> 00:24:27,409
[michael_finke]: but this

893
00:24:27,283 –> 00:24:27,973
[paul_tyler]: yeah

894
00:24:27,469 –> 00:24:29,252
[michael_finke]: really is an asset liability

895
00:24:29,070 –> 00:24:29,336
[ramsey_d_smith]: yah

896
00:24:29,312 –> 00:24:31,917
[michael_finke]: match exercise that’s what retirement and come
planning is all about

897
00:24:31,920 –> 00:24:31,940
[ramsey_d_smith]: m

898
00:24:32,297 –> 00:24:32,718
[michael_finke]: and right now

899
00:24:32,713 –> 00:24:33,373
[paul_tyler]: yeah

900
00:24:32,778 –> 00:24:36,905
[michael_finke]: it takes we’re at to meet those
spending liabilities now the liabilities may have gone

901
00:24:36,965 –> 00:24:38,467
[michael_finke]: up also because of inflation but

902
00:24:38,469 –> 00:24:38,490
[ramsey_d_smith]: m

903
00:24:39,349 –> 00:24:39,569
[michael_finke]: you know

904
00:24:39,573 –> 00:24:39,759
[paul_tyler]: yes

905
00:24:39,910 –> 00:24:40,070
[michael_finke]: it’s

906
00:24:40,149 –> 00:24:40,170
[ramsey_d_smith]: m

907
00:24:40,591 –> 00:24:43,937
[michael_finke]: a lot of people have a mix
of inflation adjusted and nominal

908
00:24:43,590 –> 00:24:44,550
[ramsey_d_smith]: oh

909
00:24:43,693 –> 00:24:43,934
[paul_tyler]: yeah

910
00:24:43,977 –> 00:24:47,282
[michael_finke]: liabilities for example texas my property taxes

911
00:24:47,379 –> 00:24:47,400
[ramsey_d_smith]: m

912
00:24:47,382 –> 00:24:48,765
[michael_finke]: after after i retire

913
00:24:49,243 –> 00:24:50,383
[paul_tyler]: yeah

914
00:24:49,245 –> 00:24:52,711
[michael_finke]: are going to be fixed so they’re
gonna be held constant that is a nominal

915
00:24:52,560 –> 00:24:52,580
[ramsey_d_smith]: m

916
00:24:52,771 –> 00:24:55,496
[michael_finke]: expense i can get rid of that’s
a nominal liability

917
00:24:55,333 –> 00:24:55,618
[paul_tyler]: oh

918
00:24:55,440 –> 00:24:56,190
[ramsey_d_smith]: oh

919
00:24:55,576 –> 00:24:58,440
[michael_finke]: if we get rid of that with
a nominal invent man you know i can

920
00:24:58,480 –> 00:25:01,945
[michael_finke]: delay social security to deal with my
more inflation

921
00:25:01,959 –> 00:25:01,980
[ramsey_d_smith]: m

922
00:25:02,046 –> 00:25:07,054
[michael_finke]: adjusted types of expenses but you know
it is all asset liability matching in the

923
00:25:07,074 –> 00:25:07,815
[michael_finke]: markets giving you a

924
00:25:07,830 –> 00:25:08,790
[ramsey_d_smith]: yeah

925
00:25:07,855 –> 00:25:10,082
[michael_finke]: lot more these days than it did
in the recent as

926
00:25:12,325 –> 00:25:18,335
[bruno_caron]: well while while we’re on that topic
i know one of the critics to you

927
00:25:18,375 –> 00:25:25,346
[bruno_caron]: know to lifetime income protected lifetime income
is you know is the the inflation protection

928
00:25:26,128 –> 00:25:27,590
[bruno_caron]: um what do you say

929
00:25:27,853 –> 00:25:28,080
[paul_tyler]: yeah

930
00:25:27,890 –> 00:25:35,062
[bruno_caron]: to to those folks who you know
would go against any protected lifetime

931
00:25:34,740 –> 00:25:34,981
[ramsey_d_smith]: oh

932
00:25:35,143 –> 00:25:35,463
[bruno_caron]: income

933
00:25:35,653 –> 00:25:36,403
[paul_tyler]: oh

934
00:25:36,148 –> 00:25:36,309
[ramsey_d_smith]: yeah

935
00:25:36,164 –> 00:25:39,330
[bruno_caron]: uh just based on that that inflation
factor

936
00:25:42,343 –> 00:25:46,490
[david_blanchett]: so i would say that i mean
again it’s different in every country run but

937
00:25:46,570 –> 00:25:46,870
[david_blanchett]: in you

938
00:25:46,804 –> 00:25:47,126
[bruno_caron]: oh

939
00:25:46,910 –> 00:25:50,376
[david_blanchett]: know the u s we have a
asocisecurty system that hat is explicitly linked to

940
00:25:50,436 –> 00:25:54,142
[david_blanchett]: inflation right so and i think that
you have set of

941
00:25:54,313 –> 00:25:54,599
[paul_tyler]: oh

942
00:25:54,964 –> 00:26:00,112
[david_blanchett]: real or inflation adjusted lifetime income to
michael’s point not all of someone’s liabilities have

943
00:26:00,152 –> 00:26:03,618
[david_blanchett]: to be matched to inflation so i
think that yes it isn’t it isn’t like

944
00:26:03,678 –> 00:26:07,324
[david_blanchett]: the best thing in the world but
you can’t buy the explicit inflation hedge with

945
00:26:07,485 –> 00:26:11,892
[david_blanchett]: other guaranteed income but there are there
are emerging set of products that exist today

946
00:26:12,353 –> 00:26:15,879
[david_blanchett]: that do provide at least an implicit
hedgewherethere’s a possibility of a benefit rise of

947
00:26:15,939 –> 00:26:16,720
[david_blanchett]: inflation is higher

948
00:26:16,804 –> 00:26:17,046
[bruno_caron]: oh

949
00:26:17,021 –> 00:26:20,964
[david_blanchett]: but i guess you know if every
if every american didn’t already have

950
00:26:21,030 –> 00:26:22,020
[ramsey_d_smith]: yeah

951
00:26:21,265 –> 00:26:22,926
[david_blanchett]: lifetime guaranteed income

952
00:26:22,804 –> 00:26:23,025
[bruno_caron]: oh

953
00:26:23,026 –> 00:26:23,407
[david_blanchett]: explicitly

954
00:26:23,123 –> 00:26:23,184
[paul_tyler]: he

955
00:26:23,427 –> 00:26:26,189
[david_blanchett]: linked to inflation i would be a
lot more worried about it but i think

956
00:26:26,369 –> 00:26:28,011
[david_blanchett]: people make that argument to view

957
00:26:28,929 –> 00:26:28,950
[ramsey_d_smith]: m

958
00:26:29,112 –> 00:26:34,792
[david_blanchett]: the liability the assets in their entirety
versus an isolation m

959
00:26:35,609 –> 00:26:35,869
[michael_finke]: we should

960
00:26:35,713 –> 00:26:36,373
[paul_tyler]: yeah

961
00:26:35,909 –> 00:26:36,089
[michael_finke]: also

962
00:26:36,043 –> 00:26:36,163
[ramsey_d_smith]: all

963
00:26:36,189 –> 00:26:36,449
[michael_finke]: mention

964
00:26:36,223 –> 00:26:36,423
[ramsey_d_smith]: right

965
00:26:36,529 –> 00:26:36,650
[michael_finke]: that

966
00:26:36,544 –> 00:26:36,644
[ramsey_d_smith]: so

967
00:26:36,690 –> 00:26:38,071
[michael_finke]: there is some product

968
00:26:38,006 –> 00:26:38,246
[ramsey_d_smith]: go ahead

969
00:26:38,191 –> 00:26:42,495
[michael_finke]: innovation in this space that for example
find g has come out with a fixed

970
00:26:42,575 –> 00:26:48,232
[michael_finke]: indexed annuity that does happen at five
percent inflation increase in the amount of guaranteed

971
00:26:48,292 –> 00:26:48,692
[michael_finke]: income that

972
00:26:48,690 –> 00:26:48,710
[ramsey_d_smith]: m

973
00:26:48,713 –> 00:26:50,876
[michael_finke]: you can receive so it’s really the
first fixed

974
00:26:50,734 –> 00:26:50,977
[bruno_caron]: oh

975
00:26:50,916 –> 00:26:56,425
[michael_finke]: into excenuity that i’ve seen with some
sort of an inflation linked income benefit guarantee

976
00:26:57,307 –> 00:27:00,104
[michael_finke]: be great to see a it more
innovation in that space i think

977
00:27:02,793 –> 00:27:02,933
[paul_tyler]: yeah

978
00:27:02,985 –> 00:27:03,146
[ramsey_d_smith]: well

979
00:27:03,133 –> 00:27:06,359
[paul_tyler]: it’s very expensive at this point michael
you know to come out with

980
00:27:06,549 –> 00:27:06,672
[michael_finke]: yeah

981
00:27:06,619 –> 00:27:10,486
[paul_tyler]: a product with value you want you
you want to sell when there’s not inflation

982
00:27:12,209 –> 00:27:12,329
[paul_tyler]: it’s

983
00:27:12,604 –> 00:27:13,624
[bruno_caron]: yeah

984
00:27:12,830 –> 00:27:16,699
[paul_tyler]: it’s very expensive one when we’re in
middle of it but your points well taken

985
00:27:16,980 –> 00:27:18,284
[paul_tyler]: so ramsey or does this

986
00:27:18,210 –> 00:27:19,320
[ramsey_d_smith]: oh

987
00:27:18,364 –> 00:27:18,705
[paul_tyler]: leave us

988
00:27:19,881 –> 00:27:24,009
[ramsey_d_smith]: so look this as always this has
been a this has been a great discussion

989
00:27:24,070 –> 00:27:27,296
[ramsey_d_smith]: i think it would be great to
great to get a sense for you know

990
00:27:27,357 –> 00:27:32,696
[ramsey_d_smith]: where people can see you in the
near term webinar’s appearances

991
00:27:32,728 –> 00:27:32,749
[michael_finke]: m

992
00:27:33,718 –> 00:27:39,708
[ramsey_d_smith]: and you’ve been posting very prolifically on
linked in a lot of important stuff where

993
00:27:39,728 –> 00:27:42,337
[ramsey_d_smith]: should people look to you’re your latest
going forward

994
00:27:45,671 –> 00:27:45,977
[ramsey_d_smith]: ahead dave

995
00:27:46,972 –> 00:27:49,036
[david_blanchett]: yeah so i mean i would say
that if you want to want to follow

996
00:27:49,076 –> 00:27:51,440
[david_blanchett]: me like the best place is linked
in i’m pretty active there

997
00:27:52,002 –> 00:27:52,022
[ramsey_d_smith]: m

998
00:27:52,822 –> 00:27:55,787
[david_blanchett]: but yeah so you know i usually
share hot thoughts i’m pretty honest

999
00:27:56,040 –> 00:27:56,342
[ramsey_d_smith]: oh

1000
00:27:56,248 –> 00:27:57,911
[david_blanchett]: always willing to engage in a good
conversation too

1001
00:27:58,414 –> 00:27:58,818
[bruno_caron]: oh

1002
00:27:58,492 –> 00:27:58,846
[david_blanchett]: yeah

1003
00:27:59,983 –> 00:28:00,608
[ramsey_d_smith]: right michael

1004
00:28:00,544 –> 00:28:00,766
[bruno_caron]: oh

1005
00:28:00,769 –> 00:28:05,016
[michael_finke]: i think you ramsey you can follow
me on twitter at bank on finance and

1006
00:28:05,877 –> 00:28:06,839
[michael_finke]: we have a podcast

1007
00:28:06,540 –> 00:28:07,710
[ramsey_d_smith]: yeah

1008
00:28:06,959 –> 00:28:07,460
[michael_finke]: david and i

1009
00:28:07,870 –> 00:28:07,890
[bruno_caron]: m

1010
00:28:07,940 –> 00:28:08,101
[michael_finke]: and

1011
00:28:08,070 –> 00:28:09,180
[ramsey_d_smith]: yeah

1012
00:28:09,503 –> 00:28:13,332
[michael_finke]: have a league to our podcast both
on lake and twitter you can give it

1013
00:28:13,372 –> 00:28:14,016
[michael_finke]: a lesson if you like

1014
00:28:14,944 –> 00:28:15,934
[bruno_caron]: yeah

1015
00:28:15,083 –> 00:28:15,403
[paul_tyler]: terrific

1016
00:28:15,420 –> 00:28:16,106
[ramsey_d_smith]: yeah

1017
00:28:15,624 –> 00:28:16,245
[paul_tyler]: we’ll put the links

1018
00:28:16,470 –> 00:28:17,460
[ramsey_d_smith]: yeah

1019
00:28:16,645 –> 00:28:19,550
[paul_tyler]: to all that in your in the
show notes if you’re

1020
00:28:19,599 –> 00:28:19,620
[ramsey_d_smith]: m

1021
00:28:19,610 –> 00:28:23,857
[paul_tyler]: listening an ant to find david thank
you michael thanks for your time is great

1022
00:28:23,898 –> 00:28:28,686
[paul_tyler]: to have you on here we enjoy
following you your work and dialogue and stuff

1023
00:28:28,726 –> 00:28:32,973
[paul_tyler]: you support in the industry so thanks
for what you’re doing and bruno ramsey thanks

1024
00:28:33,053 –> 00:28:34,235
[paul_tyler]: for thanks

1025
00:28:34,182 –> 00:28:34,466
[ramsey_d_smith]: pleasure

1026
00:28:34,295 –> 00:28:36,238
[paul_tyler]: for hosting this and join

1027
00:28:36,154 –> 00:28:36,335
[bruno_caron]: thank

1028
00:28:36,258 –> 00:28:36,539
[paul_tyler]: us again

1029
00:28:36,396 –> 00:28:36,496
[bruno_caron]: you

1030
00:28:36,579 –> 00:28:40,577
[paul_tyler]: next join us again next week for
another episode of that annuity show