Many people will experience shock when they open their 401(k) statements this year. Will the growing awareness of market risk open the doors for more in-plan annuity offerings in 2023? Today, we explore the challenges and opportunities of creating income protection inside 401(k) plans with Matt Wolniewicz, President at Income America.
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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]: hi this is paul tyler and welcome
to another episode of that annuity show ramsey
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[paul_tyler]: good to see you here this morning
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[ramsey_d_smith]: ways glad to be here
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[paul_tyler]: uh boy this is you know we’re
end of october right and fourth quarter ramsey
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[ramsey_d_smith]: oh
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[paul_tyler]: i will tell you on our company
side it is short stroke time to get
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[paul_tyler]: to the end of the year what
a crazy year it’s been i mean interest
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[paul_tyler]: rates going up like think i guess
you know how many times in history have
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[paul_tyler]: have bonds bonds on and the stock
market falling at the same time this is
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[paul_tyler]: an unusual time
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[ramsey_d_smith]: yes well it highlights uh it highlights
a lot of risks in retirement portfolios that
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[ramsey_d_smith]: i think were under appreciated
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[paul_tyler]: yes
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[ramsey_d_smith]: there was always this presumption that
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[paul_tyler]: oh
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[ramsey_d_smith]: that that stocks with the risky part
of your portfolio and bonds were
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[paul_tyler]: ah
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[ramsey_d_smith]: the
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[matt]: no
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[ramsey_d_smith]: low risk part and in fact you
know we’re suffering on both sides which actually
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[ramsey_d_smith]: makes a great segue in today’s guests
today we’re joined by matt wallnewitts who is
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[ramsey_d_smith]: the president of income america one of
the one of the leading leading institutions in
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[ramsey_d_smith]: the space of inplananuities and i will
confess that’s an area of particularly high interest
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[ramsey_d_smith]: for me and my own company so
really excited to hear what what matt has
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[ramsey_d_smith]: to say today think a very very
important development in uh in the retirement industry
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[ramsey_d_smith]: so with that matt tell us tell
us a bit more about yourself and about
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[ramsey_d_smith]: income america in particular
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[matt]: i’d be glad thanks for thanks for
having me today paul and ramsey it’s it’s
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[matt]: always good to get a chance to
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[ramsey_d_smith]: oh
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[matt]: talk with you to you know just
real quick background on me i have been
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[matt]: the president in merica for the past
two years prior to that i was the
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[matt]: president at f i through sixty the
firm that was really leaving the charge on
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[matt]: the tradiciary standard and then prior to
that i had been at morning star for
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[matt]: for quite a long period and so
it’s been an interesting journey and evolution for
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[matt]: me i certainly always have the end
investor at heart and you know i’ve got
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[matt]: a particularly personal story about my dad
who
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[ramsey_d_smith]: yeah
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[matt]: actually went into retirement in the second
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[ramsey_d_smith]: yeah
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[matt]: quarter of two thousand and eight the
last great bull market and so i’d be
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[matt]: glad to share some of that but
i’ve been really excited about income america you
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[matt]: know i think two years ago when
we launched we were really on the cutting
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[matt]: edge of bringing in plan or when
k retirement income solutions to the market and
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[matt]: it’s been really interesting for how the
how the conversations have changed over the past
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[matt]: two years because two years ago there
was a question about whether there was really
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[matt]: even a need for ramsey um you
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[ramsey_d_smith]: hm
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[matt]: know and i think some of that
was just legacy where there had been solutions
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[matt]: that had been introduced
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[paul_tyler]: yeah
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[matt]: ten or twelve years ago
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[paul_tyler]: yeah
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[matt]: to be honest they just hadn’t had
a lot of take up on the participant
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[matt]: side so it’s been really interesting to
see how
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[paul_tyler]: yeah
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[matt]: the conversation has changed you know certainly
like paul talking about the change in the
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[matt]: markets you know that that’s really had
a big impact and for me yesterday i
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[matt]: was in philadelphia and i was happy
to spend some time with a friend who’s
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[matt]: a really good institutional consult and we
were talking about how the markets have held
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[matt]: up to their traditional correlations
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[paul_tyler]: oh
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[matt]: he
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[ramsey_d_smith]: m
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[matt]: said that they’ve actually had more interest
in the alternative space and i said well
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[matt]: even the altar getting killed and he
said yeah but there’s some areas that have
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[matt]: added some values
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[ramsey_d_smith]: ah
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[matt]: he mentioned a word that i hadn’t
heard in a long time and that was
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[matt]: hedge funds so
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[ramsey_d_smith]: m
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[matt]: it really is it
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[ramsey_d_smith]: oh
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[matt]: really is hard times right now especially
again for an investor who’s worked their whole
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[matt]: life and really made the sacrifices to
make sure that they can have a comfortable
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[matt]: retirement these challenges just couldn’t be they
couldn’t be any tougher to navigate right now
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[ramsey_d_smith]: so wow so much to unpack there
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[matt]: yeah
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[ramsey_d_smith]: a quick comment in the last piece
sort of the alt piece so again big
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[ramsey_d_smith]: believer in the role of altsandin retirement
portfolios over time i think that that at
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[ramsey_d_smith]: the same time though als ultimately are
correlated with public markets over the long hall
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[ramsey_d_smith]: right if credit spreads are widening then
credit spreads and private private credit should widen
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[ramsey_d_smith]: and and the like and if there
are there the stock market is doing well
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[ramsey_d_smith]: and that means fewer exit strategies for
for for equity and private equity investment so
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[ramsey_d_smith]: it’s not sooner or later that you
know there is there’s going to be a
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[ramsey_d_smith]: correlation there but i wanted to want
to back up and go back to the
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[ramsey_d_smith]: personal story you cited
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[matt]: yeah
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[ramsey_d_smith]: and like it’s really like if you
think about it like all of us there’s
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[ramsey_d_smith]: some usually some personal catalog that you
know ultimately translates into right shaping an entire
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[ramsey_d_smith]: career and it sounds like you have
one of these please share more about that
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[matt]: i do you know my dad was
somebody who who really worked hard his whole
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[matt]: life i mean you know always made
always made sure that me and my three
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[matt]: younger sisters had enough but he worked
hard and he never really had the benefit
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[matt]: of a pension so him and my
mom you know were really diligent savers and
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[matt]: i’ll never forget as he
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[ramsey_d_smith]: ah
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[matt]: began to think about retiring asked me
to go and sit with his financial advisor
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[matt]: and we went into the financial advisor
just asked a really simple question i said
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[matt]: hey jim what is your philosophy about
asset allocation as my dad goes into retirement
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[matt]: and i’ll never forget this for the
rest of my life i asked him that
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[matt]: question literally sweat started popping up on
his forehead he looked at me and he
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[matt]: said i’ll be right back he got
up and left the room and my dad
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[matt]: stuck his hand on my lap and
he said mack i settled down he said
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[matt]: you know this is jim we’ve been
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[paul_tyler]: yeah
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[matt]: friends for a long time and i
said i asked him a lay up question
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[paul_tyler]: yeah
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[matt]: right and he
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[paul_tyler]: yeah
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[matt]: came back and he ultimately stuck on
the desk a book that was about two
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[matt]: hundred pages long and it was his
firm view and asked application and i said
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[matt]: no jim tell me about ascidalication for
my dad so as we were leaving i
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[matt]: said to my dad i said hey
dad listen we’ve got to find a new
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[matt]: financial adviser and he said oh man
but he’s grady takes me out to play
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[matt]: golf and gives me golf balls and
i said
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[paul_tyler]: oh
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[matt]: exactly that and so you know when
my
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[ramsey_d_smith]: m
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[matt]: father did finally make the decision to
retire was a second quarter of two thousand
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[matt]: and eight we were in one of
the biggest bull markets in history and he
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[matt]: couldn’t have been any more excited
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[ramsey_d_smith]: m
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[matt]: you know
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[ramsey_d_smith]: m
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[matt]: when he i retire and as that
year began to progress as we all remember
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[matt]: through the summer it started to get
a little bit worse and then once the
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[matt]: fall hit it really started to fall
he would literally call me at the end
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[matt]: of the close of market every single
day
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[paul_tyler]: oh
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[matt]: which is two o’clock in chicago screaming
at me telling me that he was getting
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[matt]: me out of the market and you
know a short story is luckily i convinced
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[matt]: him the park enough money on the
side for a year so
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[ramsey_d_smith]: m
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[matt]: that they had cash to meet their
minimum obligations but the worst
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[ramsey_d_smith]: m
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[matt]: they ever i think it was
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[paul_tyler]: yeah
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[matt]: march ninth of two thousand and nine
um you know that was i believe that
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[matt]: that was the very bottom the market
cycle two o’clock in one second with the
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[matt]: headline news that financial news blaring in
the background i get a call from my
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[matt]: dad saying i’m selling everything i said
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[paul_tyler]: oh
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[ramsey_d_smith]: yeah
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[matt]: dad don’t
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[ramsey_d_smith]: yeah
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[matt]: you
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[paul_tyler]: oh
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[matt]: you will you will never be able
to make up from that and luckily i
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[matt]: was able to state to keep him
convinced stay fully invested and i can only
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[matt]: imagine what would have happened had they
sold out when the market was down fifty
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[matt]: six percent we all know the you
know the catastrophe that’s associated with that so
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[matt]: for me ramsey i have always been
cast on the end investor having my dad
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[matt]: go through a situation like that had
he not had some guidance i am really
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[matt]: convinced that he would have sold out
at the very bottom
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[paul_tyler]: well is
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[ramsey_d_smith]: oh
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[paul_tyler]: interesting you know there’s a lot there
matt so one first you are every vyse’s
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[paul_tyler]: worst nightmare you were the kid
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[matt]: yeah
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[paul_tyler]: who disrupted the relationship but for a
good reason i think the other part is
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[paul_tyler]: what what is the role of should
an advisor really be should it be somebody
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[paul_tyler]: who’s picking stocks or should it be
somebody who is helping manage behavior and it
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[paul_tyler]: sounds like that’s what you did with
your dad
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[matt]: you know that’s a great question paul
because
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[ramsey_d_smith]: oh
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[matt]: you know if we if we just
look at things statistically and analytically
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[ramsey_d_smith]: oh
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[paul_tyler]: oh
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[matt]: most of the active managers can’t beat
the bench back if they can beat their
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[matt]: bench mark in a single year they
certainly can’t do it over a five or
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[matt]: ten year period so it’s interesting when
i look at my career and the way
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[matt]: that the financial advice side of the
business is really more you see more and
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[matt]: more advisors either using models or some
type tamp solution and i really do think
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[matt]: and ramsey we were talking earlier about
my buddy david bland chat you know he
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[matt]: talks a lot about the advisor alpha
that they added really is on the behavioral
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[matt]: finance side i mean even if we
just on a really recent basis even if
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[matt]: we look at the down turn that
happened at the beginning of covid the first
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[matt]: quarter of two thousand one even in
the target date market and you can say
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[matt]: whatever everybody has their own opinions
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[ramsey_d_smith]: oh
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[matt]: on that too paul but even in
the target date market the number of people
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[matt]: that sold out in march of twenty
twenty it was pretty scary and so this
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[matt]: idea that a financial advisor is um
you know i like what joe durant calls
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[matt]: it like a life coach right somebody
who can really help on a behavior in
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[matt]: an side there’s no doubt that that
that investors especially those that are close to
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[matt]: retirement they
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[ramsey_d_smith]: ah
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[matt]: really do need that help and guidance
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[ramsey_d_smith]: so in the hierarchy like the behavioal
piece is probably the most important one so
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[ramsey_d_smith]: agree with you there the investment advice
is of some value but it is actually
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[ramsey_d_smith]: something that’s readily vailable and commoditized if
done right using
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[matt]: great
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[ramsey_d_smith]: industries and the last pieces you know
playing golf and getting free fall which which
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[ramsey_d_smith]: it seems like your dad’s advisor was
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[matt]: a
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[ramsey_d_smith]: over index to that and probably
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[matt]: yeah
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[ramsey_d_smith]: earning hundred basis
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00:10:13,133 –> 00:10:13,214
[paul_tyler]: ah
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00:10:13,458 –> 00:10:14,960
[ramsey_d_smith]: points a year for that and that’s
you
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00:10:14,996 –> 00:10:15,220
[matt]: more
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[ramsey_d_smith]: know
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[paul_tyler]: yeah
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00:10:15,721 –> 00:10:20,309
[ramsey_d_smith]: or more or more god forbid right
and that is that is that is precisely
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00:10:20,369 –> 00:10:22,292
[ramsey_d_smith]: the problem there so all right so
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[matt]: hey
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[ramsey_d_smith]: here
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[matt]: ramsey
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[ramsey_d_smith]: yeah
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[matt]: one other thing
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[ramsey_d_smith]: yeah
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[matt]: i just have to mention to because
when i just think about you know my
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00:10:27,737 –> 00:10:30,520
[matt]: dad’s journey you know the other thing
that you have to remember it was just
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[matt]: him and i that met
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00:10:31,845 –> 00:10:31,967
[ramsey_d_smith]: yeah
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00:10:31,861 –> 00:10:37,543
[matt]: with the financial adviser and my father
ultimately passed away before my mother and
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00:10:37,428 –> 00:10:37,855
[ramsey_d_smith]: hm
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00:10:37,803 –> 00:10:39,426
[matt]: i can tell you that my mother
had no
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00:10:39,407 –> 00:10:39,488
[ramsey_d_smith]: ah
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[matt]: relationship at all
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00:10:40,746 –> 00:10:40,927
[ramsey_d_smith]: yeah
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[matt]: with that advisor
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[ramsey_d_smith]: m
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[matt]: and again as i just think about
you know couples i don’t know what the
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[matt]: stats are exactly but i think that
a high number widows end up changing advisors
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00:10:52,628 –> 00:10:58,298
[matt]: and practices simply because they don’t have
any relationship with the advisor and that’s that’s
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[matt]: too bad for everybody but i think
that it really is an unfortunate fact that
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[matt]: happens a lot
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[paul_tyler]: well ramsey’s going to go ramsey’s got
some good topics here to go into but
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[paul_tyler]: just to stick on this because i
think the topic were we’re discussing is so
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[paul_tyler]: relevant for advisors you know right now
at you talk the other aspect
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[ramsey_d_smith]: oh
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00:11:19,963 –> 00:11:21,385
[paul_tyler]: you just mentioned was
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[ramsey_d_smith]: oh
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[paul_tyler]: frequency so the markets going down you’re
having daily conversations with you your dad i
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[paul_tyler]: got this question ramsey from a journalist
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[ramsey_d_smith]: hm
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00:11:30,080 –> 00:11:37,576
[paul_tyler]: yesterday how frequently should people m revise
or take a look at their retirement plan
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[paul_tyler]: and i was kind of stuck man
on that one which was well probably you
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00:11:41,164 –> 00:11:46,038
[paul_tyler]: know at least once a year but
you know was that check in really what
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00:11:46,078 –> 00:11:51,073
[paul_tyler]: you just described was that almost like
a daily re affirmation that the plan is
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00:11:51,113 –> 00:11:56,602
[paul_tyler]: still working it sounds like you made
some changes reposition cash you know for your
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00:11:56,662 –> 00:12:01,490
[paul_tyler]: dad you know if we fast forward
to this environment how frequently should pe be
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00:12:01,550 –> 00:12:05,497
[paul_tyler]: looking at their at their retirement plans
you know if you were answering that question
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00:12:05,403 –> 00:12:12,775
[matt]: yeah that’s that’s a great question because
when my family calls me with questions i
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00:12:12,840 –> 00:12:14,160
[paul_tyler]: yeah
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00:12:12,855 –> 00:12:14,478
[matt]: tell them just to throw away their
statements
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00:12:14,640 –> 00:12:15,780
[paul_tyler]: yeah
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[matt]: honestly
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[paul_tyler]: oh
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00:12:16,461 –> 00:12:21,705
[matt]: because you know listen it’s not like
you’re looking to retire today you’ve got at
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[matt]: least ten years and so the chances
of the market having a full recovery that
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00:12:26,643 –> 00:12:31,293
[matt]: time are pretty great but you know
paul it is interesting because you know my
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00:12:31,393 –> 00:12:36,233
[matt]: advisor personally will contact me at least
one supporter to meet with me and she’s
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00:12:36,313 –> 00:12:40,361
[matt]: very very good about sending out kind
of updates when there’s big swings in the
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00:12:40,401 –> 00:12:45,560
[matt]: market even though it’s via email i
don’t mind consuming content that way
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00:12:45,878 –> 00:12:46,285
[ramsey_d_smith]: hm
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00:12:46,481 –> 00:12:49,526
[matt]: in fact i’m a lot more likely
to read that that i am to take
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00:12:49,566 –> 00:12:54,174
[matt]: a phone call so i don’t think
it’s i don’t think it’s certainly not an
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00:12:54,234 –> 00:12:58,882
[matt]: every week thing but in these turbulent
markets i don’t think that there’s any problem
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00:12:58,942 –> 00:13:02,969
[matt]: touched in base with a client once
a month just to see how they’re doing
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00:13:03,009 –> 00:13:05,936
[matt]: and to make sure again i think
you hit on the real thing to make
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00:13:05,976 –> 00:13:10,084
[matt]: sure that they’re still committed to their
plan and nothing has changed in their life
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00:13:10,144 –> 00:13:15,194
[matt]: that may be too much especially from
a retirement plan but i would certainly think
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00:13:15,294 –> 00:13:19,522
[matt]: on the private wealth side you know
that would be pretty appropriate
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00:13:21,080 –> 00:13:21,160
[paul_tyler]: m s
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00:13:21,205 –> 00:13:21,493
[ramsey_d_smith]: oh
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00:13:21,320 –> 00:13:21,621
[paul_tyler]: m done
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00:13:22,345 –> 00:13:26,513
[ramsey_d_smith]: all right well that’s a look that’s
that’s an important conversation
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00:13:26,242 –> 00:13:26,363
[paul_tyler]: eh
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00:13:26,674 –> 00:13:30,802
[ramsey_d_smith]: so all right so here we are
in here we are in two thousand twenty
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00:13:30,902 –> 00:13:36,702
[ramsey_d_smith]: two and well we haven’t had sort
of a sudden severity that we saw in
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00:13:37,664 –> 00:13:41,310
[ramsey_d_smith]: in two thousand eight or we have
different reasons i should say for now for
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00:13:41,350 –> 00:13:45,457
[ramsey_d_smith]: the market suffering we’re still in the
situation where you know again stocks are down
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00:13:45,517 –> 00:13:52,106
[ramsey_d_smith]: a lot bonds are also down so
all much of the same pain that somebody
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00:13:52,186 –> 00:13:56,553
[ramsey_d_smith]: retiring in two thousand eight would have
had people that are retiring in two thousand
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00:13:56,593 –> 00:13:57,976
[ramsey_d_smith]: twenty two are having
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00:13:57,813 –> 00:13:58,094
[matt]: oh
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00:13:58,056 –> 00:14:00,320
[ramsey_d_smith]: right now and so you know what
are some
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00:14:00,302 –> 00:14:00,363
[matt]: ah
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00:14:00,360 –> 00:14:05,869
[ramsey_d_smith]: of the lessons we can learn from
that and how you know how how does
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00:14:06,189 –> 00:14:10,897
[ramsey_d_smith]: inplantanuity that does the inplantanuity opportunity play
into that sort of i would say going
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00:14:10,997 –> 00:14:13,141
[ramsey_d_smith]: forward so you know if people had
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00:14:13,143 –> 00:14:13,385
[matt]: oh
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00:14:13,261 –> 00:14:14,904
[ramsey_d_smith]: bought into inplantanuities twenty years
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00:14:14,801 –> 00:14:14,943
[matt]: yeah
288
00:14:14,944 –> 00:14:16,211
[ramsey_d_smith]: ago would they be now versus
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00:14:16,233 –> 00:14:16,474
[matt]: yeah
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00:14:16,754 –> 00:14:17,398
[ramsey_d_smith]: you know where they are
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00:14:19,103 –> 00:14:20,364
[matt]: it’s a really fair question mamsey
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00:14:20,275 –> 00:14:20,295
[ramsey_d_smith]: m
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00:14:20,424 –> 00:14:23,889
[matt]: i mean i think you know and
again conversation i was having yesterday with the
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00:14:23,929 –> 00:14:29,366
[matt]: institutional consultant is how the sixty forty
portfolio and these market conditions it hasn’t held
295
00:14:29,466 –> 00:14:31,730
[matt]: up and i haven’t taken a look
at
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00:14:31,765 –> 00:14:31,886
[ramsey_d_smith]: ye
297
00:14:31,770 –> 00:14:34,835
[matt]: the numbers to see how that worked
back in two thousand and eight
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00:14:35,254 –> 00:14:35,275
[ramsey_d_smith]: m
299
00:14:35,596 –> 00:14:43,085
[matt]: but you know certainly with a retirement
account again on the behavioral finance side knowing
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00:14:43,146 –> 00:14:50,048
[matt]: that a participant has enough income to
at least make their basic needs irrespective of
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00:14:50,108 –> 00:14:56,629
[matt]: market performance on the behavior finance side
that’s just something that it’s really important and
302
00:14:56,690 –> 00:15:01,924
[matt]: it’s interesting because not only is it
important to that end participant you know right
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00:15:02,004 –> 00:15:07,092
[matt]: now in this war for talent amongst
companies it’s crazy how the market is performed
304
00:15:07,112 –> 00:15:10,057
[matt]: and you have the job market has
really head up and held up
305
00:15:10,076 –> 00:15:10,197
[ramsey_d_smith]: eh
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00:15:10,137 –> 00:15:11,339
[matt]: and so you know the
307
00:15:11,381 –> 00:15:11,815
[ramsey_d_smith]: hm
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00:15:11,420 –> 00:15:17,309
[matt]: idea of the great resignation or the
quitting all these professionals are looking for benefits
309
00:15:17,410 –> 00:15:18,091
[matt]: that are unique
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00:15:18,420 –> 00:15:19,075
[ramsey_d_smith]: hm
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00:15:19,273 –> 00:15:25,443
[matt]: to hold and retain employees and so
certainly the you know the benefits like the
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00:15:25,503 –> 00:15:31,433
[matt]: four one plan those are definitely benefits
that need to be competitive and having some
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00:15:31,473 –> 00:15:37,099
[matt]: retirement income in there certainly is different
than some of the other some of the
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00:15:37,159 –> 00:15:43,688
[matt]: other areas and it may be more
important now for those that are um you
315
00:15:43,728 –> 00:15:45,110
[matt]: know near retirement but also
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00:15:45,625 –> 00:15:45,807
[ramsey_d_smith]: ye
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00:15:45,832 –> 00:15:49,539
[matt]: any of the young people that are
going to live through this market cycle i
318
00:15:49,659 –> 00:15:54,027
[matt]: have to believe that yes they like
bit coin and all these other things but
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00:15:54,068 –> 00:15:54,308
[matt]: i have
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00:15:54,295 –> 00:15:54,315
[ramsey_d_smith]: m
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00:15:54,348 –> 00:15:57,876
[matt]: to believe that at least in the
short term they’re going to be pretty adverse
322
00:15:58,016 –> 00:16:00,661
[matt]: to to take in on these risky
bets
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00:16:02,316 –> 00:16:06,503
[ramsey_d_smith]: so part of what were you know
what we’re sort of dealing with here is
324
00:16:06,563 –> 00:16:10,991
[ramsey_d_smith]: sort of a a culture a culture
that’s focused on stocks and bonds target date
325
00:16:11,031 –> 00:16:17,559
[ramsey_d_smith]: funds et cetera and so ah coming
from that to to a market that is
326
00:16:17,839 –> 00:16:23,709
[ramsey_d_smith]: where there is a greater penetration presence
of inplanetannuities what do you think it takes
327
00:16:23,769 –> 00:16:26,634
[ramsey_d_smith]: to get there like who are the
people that need to be brought over the
328
00:16:26,674 –> 00:16:29,946
[ramsey_d_smith]: line who are the stake holders like
so there’s plan sponsors their
329
00:16:30,113 –> 00:16:30,873
[matt]: yeah
330
00:16:30,407 –> 00:16:31,251
[ramsey_d_smith]: plan participants
331
00:16:31,593 –> 00:16:32,343
[matt]: oh
332
00:16:32,305 –> 00:16:35,036
[ramsey_d_smith]: what do we need to do bring
them over the line and and and are
333
00:16:35,116 –> 00:16:36,462
[ramsey_d_smith]: we seeing movement there in your view
334
00:16:37,733 –> 00:16:39,178
[matt]: so so to answer your question about
335
00:16:39,130 –> 00:16:39,150
[ramsey_d_smith]: m
336
00:16:39,258 –> 00:16:45,175
[matt]: movement yes and i would say that
it’s accelerated greatly in the past six months
337
00:16:45,356 –> 00:16:45,556
[matt]: look
338
00:16:45,427 –> 00:16:45,955
[ramsey_d_smith]: hm
339
00:16:46,238 –> 00:16:46,679
[matt]: the market
340
00:16:46,675 –> 00:16:47,039
[ramsey_d_smith]: oh
341
00:16:46,759 –> 00:16:52,063
[matt]: certainly helps annuities right i mean all
the stas that i’ve seen say that now
342
00:16:52,263 –> 00:16:58,133
[matt]: all the all the annuities are you
know setting records for for quarterly sales so
343
00:16:58,193 –> 00:17:02,340
[matt]: we know that market volatility definitely drives
interest in that but you know on the
344
00:17:02,420 –> 00:17:05,994
[matt]: in plan side i think that we
really have to look back to the scare
345
00:17:06,074 –> 00:17:11,102
[matt]: act when that passed unfortunately that happened
just before the covid crisis came through and
346
00:17:11,202 –> 00:17:15,333
[matt]: so one of the challenges for the
plan sponsors in the past had been now
347
00:17:15,535 –> 00:17:18,370
[matt]: if something happens with the insurance company
and they fail
348
00:17:18,655 –> 00:17:19,023
[ramsey_d_smith]: oh
349
00:17:18,953 –> 00:17:20,657
[matt]: who is on the hook for the
obligation
350
00:17:21,055 –> 00:17:21,301
[ramsey_d_smith]: yeah
351
00:17:21,179 –> 00:17:27,193
[matt]: for all of these participant benefits that
the participants have been paying for everybody can
352
00:17:27,274 –> 00:17:31,018
[matt]: tell me you know insurance companies never
fail and again all we have to do
353
00:17:31,078 –> 00:17:34,824
[matt]: is look back to two thousand and
think about a i g and without a
354
00:17:34,884 –> 00:17:37,669
[matt]: government bail out there would have been
a lot of trouble and pain there so
355
00:17:38,190 –> 00:17:42,056
[matt]: the kerak provided a safe harbor for
the plan sponsor so that as long as
356
00:17:42,097 –> 00:17:44,882
[matt]: they went through due diligence process
357
00:17:45,145 –> 00:17:46,015
[ramsey_d_smith]: yeah
358
00:17:46,013 –> 00:17:47,134
[matt]: they could have a safe harbor
359
00:17:47,095 –> 00:17:47,297
[ramsey_d_smith]: oh
360
00:17:47,214 –> 00:17:51,820
[matt]: there and so you know that was
certainly one thing ramsey but again i think
361
00:17:51,860 –> 00:17:57,838
[matt]: that in a raging bull market it’s
hard to have that conversation with participant about
362
00:17:57,858 –> 00:18:00,843
[matt]: the benefit of a guaranteed income because
they think the market is going to go
363
00:18:00,943 –> 00:18:08,924
[matt]: up like that forever so some market
volatility has definitely brought it back or the
364
00:18:08,984 –> 00:18:14,985
[matt]: participants but the other thing is the
retirement plan adviser and the consultants that community
365
00:18:15,225 –> 00:18:20,233
[matt]: definitely has more interest in the in
plan solutions really for two reasons
366
00:18:20,758 –> 00:18:21,265
[ramsey_d_smith]: hm
367
00:18:20,895 –> 00:18:27,433
[matt]: one if the participant rolls out of
the plan than those professions s have um
368
00:18:27,874 –> 00:18:31,420
[matt]: you know little impact there isn’t much
that they can do to make a difference
369
00:18:31,480 –> 00:18:32,441
[matt]: for those participants
370
00:18:32,725 –> 00:18:32,745
[ramsey_d_smith]: m
371
00:18:32,922 –> 00:18:37,550
[matt]: and so it’s interesting that sponsors now
in the past i would say they might
372
00:18:37,610 –> 00:18:42,387
[matt]: be indifferent to maybe hope in a
participant left the plan i feel like now
373
00:18:42,528 –> 00:18:46,816
[matt]: that’s changed and you know typically the
people that are leaving the plan have the
374
00:18:46,836 –> 00:18:48,058
[matt]: higher balances and so
375
00:18:48,123 –> 00:18:48,655
[ramsey_d_smith]: hm
376
00:18:48,138 –> 00:18:49,802
[matt]: it’s to the plan sponsors benefit
377
00:18:50,146 –> 00:18:50,328
[ramsey_d_smith]: yeah
378
00:18:50,453 –> 00:18:55,555
[matt]: those higher balances stay in plan because
then they get some leverage over the providers
379
00:18:56,096 –> 00:19:01,224
[matt]: so it’s been real interesting that the
institutional community has begun to warm up to
380
00:19:01,304 –> 00:19:02,366
[matt]: and embrace this idea
381
00:19:02,575 –> 00:19:03,295
[ramsey_d_smith]: oh
382
00:19:02,827 –> 00:19:07,194
[matt]: the other thing is those consultants are
always looking for a reason to have a
383
00:19:07,234 –> 00:19:08,877
[matt]: conversation with a new prospect
384
00:19:09,425 –> 00:19:09,895
[ramsey_d_smith]: hm
385
00:19:09,919 –> 00:19:15,609
[matt]: on the plan sponsor side and so
the guaranteed income in plan is definitely something
386
00:19:15,649 –> 00:19:17,933
[matt]: that they can take out the prospects
and
387
00:19:17,959 –> 00:19:18,445
[ramsey_d_smith]: hm
388
00:19:17,973 –> 00:19:22,317
[matt]: if the existing consulting her advisors and
talking to him about it it’s a great
389
00:19:22,417 –> 00:19:28,022
[matt]: way to gain some leverage and some
trust and some credibility from the plan sponsor
390
00:19:29,296 –> 00:19:32,882
[ramsey_d_smith]: so you you you introduced a third
sort of stake holder that i
391
00:19:33,074 –> 00:19:33,135
[matt]: ah
392
00:19:33,142 –> 00:19:33,643
[ramsey_d_smith]: that i missed
393
00:19:33,570 –> 00:19:33,810
[paul_tyler]: yeah
394
00:19:33,683 –> 00:19:36,407
[ramsey_d_smith]: which was the retirement plan advisor right
so you’ve got the plan
395
00:19:36,293 –> 00:19:37,113
[matt]: yeah
396
00:19:36,528 –> 00:19:42,558
[ramsey_d_smith]: sponsors you got the plan participants but
retire plan advisor is particularly in the small
397
00:19:43,179 –> 00:19:50,050
[ramsey_d_smith]: medium business segment are super super important
and so i know you know you are
398
00:19:50,451 –> 00:19:56,306
[ramsey_d_smith]: out in the road at conferences talking
you talking to this this segment very very
399
00:19:56,366 –> 00:20:03,601
[ramsey_d_smith]: very frequently is it you seeing traction
are you seeing movement do they under how
400
00:20:03,641 –> 00:20:07,808
[ramsey_d_smith]: much is it do they understand the
value proposition how much do yu have to
401
00:20:07,868 –> 00:20:10,833
[ramsey_d_smith]: explain it like i guess i’m trying
to get sense for how receptive are they
402
00:20:11,053 –> 00:20:15,462
[ramsey_d_smith]: maybe they’re getting there they’re being nudged
or are they receptive so far
403
00:20:16,564 –> 00:20:18,450
[matt]: it’s it’s really changed a lot i
would
404
00:20:18,385 –> 00:20:19,105
[ramsey_d_smith]: yeah
405
00:20:18,510 –> 00:20:21,439
[matt]: say over the course of this year
i was telling paul early i’ve done over
406
00:20:21,540 –> 00:20:23,395
[matt]: forty speaking events
407
00:20:23,275 –> 00:20:23,295
[ramsey_d_smith]: m
408
00:20:23,435 –> 00:20:28,109
[matt]: this year so i dedicated myself to
just being out on the road and providing
409
00:20:28,169 –> 00:20:28,731
[matt]: education
410
00:20:28,385 –> 00:20:28,527
[ramsey_d_smith]: yeah
411
00:20:29,293 –> 00:20:30,114
[matt]: and i would say that
412
00:20:30,445 –> 00:20:30,752
[ramsey_d_smith]: oh
413
00:20:31,276 –> 00:20:36,164
[matt]: that again through the year and again
i mean there’s definitely correlation to the market
414
00:20:36,264 –> 00:20:36,465
[matt]: right
415
00:20:36,887 –> 00:20:37,048
[ramsey_d_smith]: yeah
416
00:20:36,925 –> 00:20:43,805
[matt]: and so there has been more and
more interest but i still when i talked
417
00:20:43,845 –> 00:20:47,092
[matt]: to my friends that are advisors and
i mentioned in plan
418
00:20:47,245 –> 00:20:47,995
[ramsey_d_smith]: yeah
419
00:20:47,533 –> 00:20:49,938
[matt]: or i mentioned guaranteed income right the
first thing that
420
00:20:49,975 –> 00:20:51,055
[ramsey_d_smith]: oh
421
00:20:49,978 –> 00:20:51,521
[matt]: they say is oh that’s an annuity
422
00:20:51,917 –> 00:20:51,957
[ramsey_d_smith]: m
423
00:20:52,283 –> 00:20:53,008
[matt]: i’m like yes
424
00:20:53,095 –> 00:20:53,875
[ramsey_d_smith]: yeah
425
00:20:54,093 –> 00:20:57,379
[matt]: that’s the only way that you’re going
to get any guaranteed income right is with
426
00:20:57,248 –> 00:20:57,775
[ramsey_d_smith]: hm
427
00:20:57,459 –> 00:21:01,906
[matt]: an annuity and they say oh you
know those those don’t work no good they’re
428
00:21:01,946 –> 00:21:05,733
[matt]: too expensive and so i just feel
ramsey that you know again in the educate
429
00:21:05,853 –> 00:21:09,344
[matt]: and there’s one thing in talking about
it a plan
430
00:21:09,629 –> 00:21:09,772
[ramsey_d_smith]: yeah
431
00:21:09,825 –> 00:21:14,474
[matt]: there’s another idea of just talking about
the benefits of it because everybody’s got a
432
00:21:14,514 –> 00:21:19,983
[matt]: bad experience with a retail annuity either
personally or with a client and so talking
433
00:21:20,043 –> 00:21:23,549
[matt]: them through the nuances and the difference
and really the benefits
434
00:21:23,160 –> 00:21:23,790
[paul_tyler]: yeah
435
00:21:23,629 –> 00:21:28,661
[matt]: of an institutional offering it’s pretty interesting
where that conversation ends up at the end
436
00:21:29,140 –> 00:21:29,221
[paul_tyler]: so
437
00:21:29,185 –> 00:21:30,685
[ramsey_d_smith]: yeah
438
00:21:29,361 –> 00:21:33,107
[paul_tyler]: for ams and i we’re gon t
trade mark this thing before it goes out
439
00:21:33,888 –> 00:21:37,815
[paul_tyler]: if we were to form the national
association of in plan annuities
440
00:21:37,735 –> 00:21:37,917
[ramsey_d_smith]: yeah
441
00:21:38,997 –> 00:21:41,521
[paul_tyler]: and start a lobby uh
442
00:21:41,365 –> 00:21:41,385
[ramsey_d_smith]: m
443
00:21:41,741 –> 00:21:42,643
[paul_tyler]: different individuals
444
00:21:42,805 –> 00:21:43,050
[ramsey_d_smith]: oh
445
00:21:43,665 –> 00:21:48,713
[paul_tyler]: would you tell us to focus first
on trying to almost get annuities in plan
446
00:21:48,773 –> 00:21:49,895
[paul_tyler]: annuities set as a default
447
00:21:50,043 –> 00:21:50,369
[matt]: oh
448
00:21:50,055 –> 00:21:54,225
[paul_tyler]: option like ex percent of your plan
for employes should default into that would that
449
00:21:54,286 –> 00:21:56,152
[paul_tyler]: be our number one objective to really
450
00:21:56,725 –> 00:21:56,968
[ramsey_d_smith]: yeah
451
00:21:56,875 –> 00:21:59,413
[paul_tyler]: you now drive activity in the marketplace
452
00:22:01,513 –> 00:22:03,695
[matt]: i think it’s a great question i
think there’s
453
00:22:03,745 –> 00:22:03,946
[ramsey_d_smith]: yeah
454
00:22:03,855 –> 00:22:07,439
[matt]: one a and one b i think
that one a is the idea that in
455
00:22:07,539 –> 00:22:13,812
[matt]: plan annuities can be a q d
a and then one b would be at
456
00:22:13,972 –> 00:22:19,554
[matt]: what age is it appropriate to put
somebody in as a q d is it
457
00:22:19,634 –> 00:22:24,475
[matt]: really appropriate for twenty two year old
should it be for a fifty five year
458
00:22:24,515 –> 00:22:29,399
[matt]: old um or is it somewhere in
between i think that those are i think
459
00:22:29,439 –> 00:22:34,938
[matt]: that those are two of the really
key topics um and again especially in the
460
00:22:34,958 –> 00:22:39,750
[matt]: institutional consultant community there’s a lot of
questions there over those two topics
461
00:22:40,385 –> 00:22:44,191
[ramsey_d_smith]: so i’m glad you answered that question
mat because you did it was way more
462
00:22:44,291 –> 00:22:47,396
[ramsey_d_smith]: nuance than what my answer was going
to be which
463
00:22:47,423 –> 00:22:47,503
[matt]: what
464
00:22:47,456 –> 00:22:47,557
[ramsey_d_smith]: is
465
00:22:47,543 –> 00:22:48,625
[matt]: was yours gonna be ramsey
466
00:22:48,318 –> 00:22:49,279
[ramsey_d_smith]: yes yes
467
00:22:49,371 –> 00:22:49,712
[paul_tyler]: yes
468
00:22:50,582 –> 00:22:56,371
[ramsey_d_smith]: your answer is yes yes we should
lobby to lobby to make them the qualified
469
00:22:56,411 –> 00:23:00,137
[ramsey_d_smith]: default investment alternative as often as possible
into the broadest possible audience
470
00:23:00,911 –> 00:23:01,135
[paul_tyler]: okay
471
00:23:00,919 –> 00:23:04,365
[ramsey_d_smith]: um and ye so well said matt
m
472
00:23:04,773 –> 00:23:05,943
[matt]: yeh
473
00:23:05,283 –> 00:23:06,565
[paul_tyler]: okay the other question which which
474
00:23:06,513 –> 00:23:06,614
[matt]: what
475
00:23:06,805 –> 00:23:07,566
[paul_tyler]: which raises this
476
00:23:07,705 –> 00:23:09,025
[ramsey_d_smith]: yeah
477
00:23:07,727 –> 00:23:13,556
[paul_tyler]: educational question base man i get all
the questions like no surprise you know you’re
478
00:23:13,637 –> 00:23:16,181
[paul_tyler]: answering these all day long which is
these annuities
479
00:23:15,993 –> 00:23:16,216
[matt]: oh
480
00:23:16,221 –> 00:23:17,763
[paul_tyler]: the hint the fees
481
00:23:17,785 –> 00:23:18,108
[ramsey_d_smith]: oh
482
00:23:17,824 –> 00:23:20,187
[paul_tyler]: are high the r is low and
i tell him no
483
00:23:20,073 –> 00:23:20,295
[matt]: oh
484
00:23:20,468 –> 00:23:22,992
[paul_tyler]: it’s it’s not an investment an insurance
485
00:23:22,594 –> 00:23:22,615
[ramsey_d_smith]: m
486
00:23:24,094 –> 00:23:24,274
[paul_tyler]: and
487
00:23:24,445 –> 00:23:25,255
[ramsey_d_smith]: yeah
488
00:23:24,614 –> 00:23:25,419
[matt]: right that’s right
489
00:23:25,436 –> 00:23:28,481
[paul_tyler]: you know what’s your in the house
now when you when i think of the
490
00:23:28,561 –> 00:23:31,927
[paul_tyler]: process at the employe level and i’m
going through
491
00:23:31,773 –> 00:23:32,096
[matt]: oh
492
00:23:31,967 –> 00:23:37,036
[paul_tyler]: making my choice you know all those
forms are kind of getting my head lined
493
00:23:37,076 –> 00:23:39,339
[paul_tyler]: around an investment oriented process
494
00:23:40,493 –> 00:23:40,574
[ramsey_d_smith]: ye
495
00:23:40,790 –> 00:23:44,200
[paul_tyler]: what’s it going to take i mean
to get people to think about oh
496
00:23:44,605 –> 00:23:44,625
[ramsey_d_smith]: m
497
00:23:44,913 –> 00:23:45,154
[matt]: oh
498
00:23:45,122 –> 00:23:46,967
[paul_tyler]: what do i a between
499
00:23:47,163 –> 00:23:47,424
[matt]: oh
500
00:23:48,400 –> 00:23:55,302
[paul_tyler]: my equity my bonds and by the
way you know annuities are bond like protection
501
00:23:55,382 –> 00:24:00,253
[paul_tyler]: their insurance what’s the what do we
need here changing forms in this business is
502
00:24:00,333 –> 00:24:01,756
[paul_tyler]: hard really hard
503
00:24:03,793 –> 00:24:08,242
[matt]: yeah that topic paul is is m
s you know i think that one of
504
00:24:08,262 –> 00:24:09,385
[matt]: the most abused terms
505
00:24:09,745 –> 00:24:10,109
[ramsey_d_smith]: my
506
00:24:09,986 –> 00:24:15,736
[matt]: in the financial services industry today is
financial wellness everybody has a different definition everybody
507
00:24:15,897 –> 00:24:19,844
[matt]: thinks that it means something else there’s
all kinds of software out there and the
508
00:24:19,884 –> 00:24:24,312
[matt]: bottom line is that the participants rarely
engage in that unless
509
00:24:24,685 –> 00:24:25,435
[ramsey_d_smith]: yeah
510
00:24:24,893 –> 00:24:31,223
[matt]: somebody comes out meets with them and
really talks about their specific situation and so
511
00:24:31,303 –> 00:24:37,356
[matt]: it becomes a challenge to to do
education broadly at the participant level see that’s
512
00:24:37,417 –> 00:24:38,908
[matt]: why i like the d a
513
00:24:39,912 –> 00:24:40,465
[ramsey_d_smith]: hm
514
00:24:40,003 –> 00:24:44,531
[matt]: you know we’ve done a really good
job on the on the accumulation side of
515
00:24:44,891 –> 00:24:51,522
[matt]: retirement savings with auto enrolment autoescalation you
know things like that where to the end
516
00:24:51,623 –> 00:24:54,730
[matt]: investor it’s kind of painless because it’s
small incremental changes
517
00:24:54,521 –> 00:24:55,075
[ramsey_d_smith]: hm
518
00:24:54,810 –> 00:25:01,385
[matt]: over time but it’s really disappointing that
once somebody has worked and accumulated the assets
519
00:25:01,425 –> 00:25:05,947
[matt]: and we all know that all investors
under saved that when they get to retirement
520
00:25:06,913 –> 00:25:11,180
[matt]: there’s no way to help them with
that going forward and typically if you’re sixty
521
00:25:11,260 –> 00:25:15,588
[matt]: five and you’ve got a nest egg
and you’re getting ready to retire um
522
00:25:15,445 –> 00:25:15,769
[ramsey_d_smith]: oh
523
00:25:16,088 –> 00:25:19,374
[matt]: you know you might know what your
fixed expenses are but if you’re left on
524
00:25:19,414 –> 00:25:23,101
[matt]: your own to navigate that and if
we look at the vast majority of investors
525
00:25:23,149 –> 00:25:23,845
[ramsey_d_smith]: hm
526
00:25:23,903 –> 00:25:31,090
[matt]: they don’t have enough in acids qualify
to really be serviced by a financial advisor
527
00:25:31,270 –> 00:25:36,559
[matt]: and so there’s a humungus gap out
there in the market today um and again
528
00:25:36,800 –> 00:25:40,325
[matt]: that’s that’s a reason why i believe
that p d i a is such a
529
00:25:40,385 –> 00:25:44,992
[matt]: great alternative for the vast majority of
retirement savers
530
00:25:46,066 –> 00:25:51,034
[ramsey_d_smith]: that is such an important point because
it right it enhances the accumulation phase by
531
00:25:51,695 –> 00:25:57,825
[ramsey_d_smith]: by stabilizing stabilizing account value is a
clear path into into retirement with us stable
532
00:25:58,126 –> 00:26:03,094
[ramsey_d_smith]: sort of foundational income but then i
think this is a really critical point and
533
00:26:03,655 –> 00:26:07,181
[ramsey_d_smith]: i think the industry still needs to
figure out what this looks like but this
534
00:26:07,261 –> 00:26:12,750
[ramsey_d_smith]: notion of staying in plan through now
through a post retirement um i think it’s
535
00:26:12,790 –> 00:26:17,298
[ramsey_d_smith]: really important and to your you made
the point earlier it means more assets retained
536
00:26:17,358 –> 00:26:23,087
[ramsey_d_smith]: by by plan sponsor so that’s more
cost efficiencies purp i pen that’s great um
537
00:26:23,627 –> 00:26:27,052
[ramsey_d_smith]: i do think and actually and the
other thing is that it means not rolling
538
00:26:27,152 –> 00:26:33,892
[ramsey_d_smith]: over into you know expensive you know
an expensive alternative that might mar may not
539
00:26:33,952 –> 00:26:36,356
[ramsey_d_smith]: be you know managed by an r
a or some other
540
00:26:36,204 –> 00:26:36,387
[matt]: that’s
541
00:26:36,416 –> 00:26:36,837
[ramsey_d_smith]: platform
542
00:26:36,469 –> 00:26:36,631
[matt]: right
543
00:26:37,718 –> 00:26:40,803
[ramsey_d_smith]: um but here’s the thing in order
to make that work
544
00:26:40,833 –> 00:26:41,583
[matt]: yeah
545
00:26:41,585 –> 00:26:46,697
[ramsey_d_smith]: plan sponsors or their you know the
vendors have to have a post retirement platform
546
00:26:47,279 –> 00:26:53,481
[ramsey_d_smith]: that replaces some of those services are
provided right now by that that advisor that
547
00:26:53,521 –> 00:26:56,666
[ramsey_d_smith]: takes the role over like those are
those are those are this real value added
548
00:26:56,726 –> 00:27:02,116
[ramsey_d_smith]: services in there even if they’re sometimes
expensive there’s real value added services so what
549
00:27:02,156 –> 00:27:04,684
[ramsey_d_smith]: are your thoughts instead of where now
where
550
00:27:04,563 –> 00:27:04,766
[matt]: oh
551
00:27:04,804 –> 00:27:10,771
[ramsey_d_smith]: we are is an industry instead of
offering those post retirement services sort of in
552
00:27:11,353 –> 00:27:14,982
[ramsey_d_smith]: plan is that a lot more work
to come or you think we’re head in
553
00:27:15,002 –> 00:27:15,062
[ramsey_d_smith]: the
554
00:27:15,015 –> 00:27:15,056
[matt]: i
555
00:27:15,082 –> 00:27:15,202
[ramsey_d_smith]: right
556
00:27:15,178 –> 00:27:15,361
[matt]: think
557
00:27:15,222 –> 00:27:15,503
[ramsey_d_smith]: direction
558
00:27:16,313 –> 00:27:19,718
[matt]: i think that we’re still in the
in the picture warming up on the mound
559
00:27:19,818 –> 00:27:20,119
[matt]: before
560
00:27:20,305 –> 00:27:21,085
[ramsey_d_smith]: yeah
561
00:27:20,480 –> 00:27:25,107
[matt]: they take the mound in the first
inning i mean you know ramsey it’s crazy
562
00:27:25,147 –> 00:27:25,768
[matt]: when you think about
563
00:27:25,705 –> 00:27:26,725
[ramsey_d_smith]: yeah
564
00:27:25,828 –> 00:27:30,416
[matt]: again all the debate about financial welles
or are ways to get people to save
565
00:27:30,496 –> 00:27:35,585
[matt]: more i feel like that’s where more
of the conversation is than you know now
566
00:27:35,645 –> 00:27:40,533
[matt]: that somebody’s reached retirement how do we
help them going forward and again i feel
567
00:27:40,593 –> 00:27:45,374
[matt]: like that’s a topic that’s just really
starting to gain momentum i know that there’s
568
00:27:45,434 –> 00:27:47,457
[matt]: some things in secure act to ow
569
00:27:47,665 –> 00:27:47,866
[ramsey_d_smith]: yeah
570
00:27:48,098 –> 00:27:52,946
[matt]: that may help with that but i
really do feel that on the legislative side
571
00:27:53,527 –> 00:28:01,836
[matt]: that the legislators are becoming more interested
and the retirement outcome certainly because you know
572
00:28:01,956 –> 00:28:07,165
[matt]: say what you will about so security
but you know we’ve got to figure out
573
00:28:07,205 –> 00:28:08,888
[matt]: a way to refill that trust fund
too
574
00:28:08,875 –> 00:28:08,895
[ramsey_d_smith]: m
575
00:28:09,048 –> 00:28:13,560
[matt]: and so there’s only so many ways
that we can do that and so yeah
576
00:28:13,660 –> 00:28:18,426
[matt]: i think that the i really think
that the next focus from the financial services
577
00:28:18,487 –> 00:28:18,928
[matt]: community
578
00:28:18,934 –> 00:28:18,955
[ramsey_d_smith]: m
579
00:28:19,208 –> 00:28:23,740
[matt]: is going to be on you know
post accumulation and how we help people going
580
00:28:23,800 –> 00:28:24,121
[matt]: forward
581
00:28:26,147 –> 00:28:30,213
[ramsey_d_smith]: i agree and i think it’s great
and i think we need to come up
582
00:28:30,253 –> 00:28:36,764
[ramsey_d_smith]: with an institutionally priced and scaleable solution
that it reaches like all consumers who need
583
00:28:36,804 –> 00:28:38,595
[ramsey_d_smith]: it just the wealthy so that’s i
think it’s
584
00:28:38,574 –> 00:28:38,654
[matt]: and
585
00:28:38,636 –> 00:28:39,038
[ramsey_d_smith]: fantastic
586
00:28:38,875 –> 00:28:43,328
[matt]: ramsey he brought up something that i
is again very near and dear to my
587
00:28:43,429 –> 00:28:43,689
[matt]: heart
588
00:28:44,117 –> 00:28:44,157
[ramsey_d_smith]: m
589
00:28:44,883 –> 00:28:48,879
[matt]: now that’s the fiduciary standard and the
benefit by keeping people in plan
590
00:28:48,805 –> 00:28:49,027
[ramsey_d_smith]: yeah
591
00:28:49,140 –> 00:28:49,300
[matt]: is
592
00:28:49,733 –> 00:28:49,894
[ramsey_d_smith]: yeah
593
00:28:49,883 –> 00:28:52,531
[matt]: those are those are fiduciary accounts by
default
594
00:28:52,766 –> 00:28:52,889
[ramsey_d_smith]: yeah
595
00:28:53,233 –> 00:28:56,805
[matt]: so you’ve got a fediciary that’s sitting
on top of that is for the participants
596
00:28:57,547 –> 00:29:04,391
[matt]: sole benefit that that plan exists and
if somebody takes their their roll over and
597
00:29:04,552 –> 00:29:09,780
[matt]: they’re not financially save that’s when people
can really get into trouble and that’s
598
00:29:09,840 –> 00:29:10,082
[paul_tyler]: oh
599
00:29:10,021 –> 00:29:13,307
[matt]: that’s where all those horses he’s come
from so yeah i think that that’s another
600
00:29:13,347 –> 00:29:16,032
[matt]: benefit of keeping people in plan
601
00:29:16,455 –> 00:29:16,637
[ramsey_d_smith]: sure
602
00:29:16,710 –> 00:29:23,141
[paul_tyler]: so so maker question from the annuity
space you and ramsey are wild in the
603
00:29:23,361 –> 00:29:27,488
[paul_tyler]: industry is wildly successful and let’s say
it know ramsey what what’s a
604
00:29:27,543 –> 00:29:27,748
[matt]: oh
605
00:29:27,568 –> 00:29:30,436
[paul_tyler]: big number five per cent i mean
if we were to look back and say
606
00:29:30,496 –> 00:29:34,407
[paul_tyler]: wow this is this was wildly successful
or five percent of
607
00:29:34,863 –> 00:29:35,127
[matt]: yeah
608
00:29:35,610 –> 00:29:40,310
[paul_tyler]: kferinkasset’s in annuity is ten percent you
have a view m
609
00:29:40,736 –> 00:29:43,385
[ramsey_d_smith]: ten per cent would be seven hundred
billion dollars
610
00:29:43,460 –> 00:29:43,602
[paul_tyler]: yeah
611
00:29:43,686 –> 00:29:45,552
[ramsey_d_smith]: so that would be d be a
nice start
612
00:29:45,400 –> 00:29:45,720
[paul_tyler]: huge
613
00:29:46,113 –> 00:29:46,958
[matt]: it’d be a good start
614
00:29:47,002 –> 00:29:47,123
[paul_tyler]: yeah
615
00:29:47,335 –> 00:29:47,518
[ramsey_d_smith]: oh
616
00:29:47,363 –> 00:29:51,570
[paul_tyler]: let’s cut it back and say so
five percent um you know at what what
617
00:29:51,650 –> 00:29:52,872
[paul_tyler]: does this mean for
618
00:29:52,848 –> 00:29:52,991
[ramsey_d_smith]: yes
619
00:29:53,293 –> 00:30:00,104
[paul_tyler]: the ou know independent agent independent advisor
doing you know inganuities today because does it
620
00:30:00,204 –> 00:30:00,425
[paul_tyler]: just
621
00:30:00,205 –> 00:30:00,410
[ramsey_d_smith]: oh
622
00:30:01,487 –> 00:30:06,355
[paul_tyler]: if you delivered annuity you’ve educated public
to the point where they understand and they
623
00:30:06,435 –> 00:30:10,823
[paul_tyler]: love them and the market stays or
de s roll overs go down and so
624
00:30:11,184 –> 00:30:14,250
[paul_tyler]: you know we’re kind of it’s a
water bed the market
625
00:30:15,503 –> 00:30:19,166
[matt]: really really two questions there right one
is what does it do to the advisor
626
00:30:19,186 –> 00:30:22,669
[matt]: who’s focused on annuities and then the
other one is a really common question that
627
00:30:22,709 –> 00:30:23,170
[matt]: i get is
628
00:30:23,455 –> 00:30:24,535
[ramsey_d_smith]: oh
629
00:30:23,610 –> 00:30:27,294
[matt]: why would i do an i plan
guarantee because i’m not going to get any
630
00:30:27,334 –> 00:30:31,038
[matt]: roll over business so those are like
two separate questions but i believe that for
631
00:30:31,118 –> 00:30:37,965
[matt]: the for the financial professional who’s focused
on annuities having inplananuities will be a big
632
00:30:38,025 –> 00:30:42,569
[matt]: lift to their business because again i
would say that you know most practicipants don’t
633
00:30:42,609 –> 00:30:43,569
[matt]: even read their statement
634
00:30:43,410 –> 00:30:43,957
[paul_tyler]: oh
635
00:30:44,310 –> 00:30:50,767
[matt]: and they certainly don’t understand fees or
disclosure so there’s a reluctance for investors to
636
00:30:50,807 –> 00:30:54,914
[matt]: look at some of these solutions is
they just don’t understand them and so if
637
00:30:54,974 –> 00:30:59,141
[matt]: the average participant in a plan could
understand that they are protected with a guarantee
638
00:31:00,103 –> 00:31:03,829
[matt]: everybody has held away assets that are
outside the plan so i think that that
639
00:31:03,869 –> 00:31:08,617
[matt]: would be that would make the story
much easier for those people that are really
640
00:31:08,697 –> 00:31:13,385
[matt]: focused on providing guaranteed income solutions under
wealth man inside because again you’re just going
641
00:31:13,405 –> 00:31:19,014
[matt]: to have a population that’s more educated
the other thing is when a population is
642
00:31:19,094 –> 00:31:23,822
[matt]: more educated it brings more transparency to
the market and that’s good for everybody that’s
643
00:31:23,842 –> 00:31:24,263
[matt]: god for the
644
00:31:24,205 –> 00:31:25,015
[ramsey_d_smith]: oh
645
00:31:24,843 –> 00:31:29,408
[matt]: the advisors that are focused on that
it’s good for the end investors um so
646
00:31:29,488 –> 00:31:33,092
[matt]: that that’s one segment of it paul
the other question that i get asked often
647
00:31:33,172 –> 00:31:38,335
[matt]: is advisers just going to kill my
roll over business and you know if that’s
648
00:31:38,355 –> 00:31:40,318
[matt]: what you built your business on again
i
649
00:31:40,320 –> 00:31:40,562
[paul_tyler]: oh
650
00:31:40,358 –> 00:31:44,525
[matt]: would just challenge that advisor to look
at the demographics of a plan because whether
651
00:31:44,565 –> 00:31:50,755
[matt]: it’s the old eighty twenty rule or
ninety ten the people have sophisticated planning needs
652
00:31:51,295 –> 00:31:55,300
[matt]: they most likely again have outside assets
that they’re going to need help with and
653
00:31:55,320 –> 00:31:59,330
[matt]: they’re still going to look to that
advisor for that the for somebody who’s worked
654
00:31:59,370 –> 00:32:03,584
[matt]: in the plan and they’ve got you
know forty thousand dollars
655
00:32:03,510 –> 00:32:04,110
[paul_tyler]: yeah
656
00:32:04,005 –> 00:32:08,753
[matt]: most likely the advisor um you know
is going to push them into a managed
657
00:32:08,793 –> 00:32:13,421
[matt]: portfolio or you know they may not
even have the time to meet somebody like
658
00:32:13,481 –> 00:32:19,090
[matt]: that so um you know i think
that the in plan is good because again
659
00:32:19,150 –> 00:32:24,459
[matt]: it brings visibility to the idea of
guaranteed income and secondly those individuals with more
660
00:32:24,519 –> 00:32:28,298
[matt]: sophisticated needs they’re going to be lookin
for financial professional help anyways
661
00:32:30,726 –> 00:32:34,933
[ramsey_d_smith]: all right so we we were supposed
to also talk about the four percent rule
662
00:32:34,993 –> 00:32:36,676
[ramsey_d_smith]: but where we’re hitting the
663
00:32:36,783 –> 00:32:37,431
[matt]: yeah
664
00:32:36,896 –> 00:32:40,983
[ramsey_d_smith]: the end of time here so i
know there’s if there’s any any quick comments
665
00:32:41,003 –> 00:32:41,103
[ramsey_d_smith]: you
666
00:32:41,034 –> 00:32:41,280
[matt]: yeah
667
00:32:41,163 –> 00:32:44,073
[ramsey_d_smith]: want to make on or we can
have you come back to to talk about
668
00:32:44,114 –> 00:32:46,242
[ramsey_d_smith]: that sometimes soon as well
669
00:32:47,073 –> 00:32:47,213
[matt]: i’d
670
00:32:47,150 –> 00:32:47,291
[paul_tyler]: yeah
671
00:32:47,233 –> 00:32:50,839
[matt]: love to come back i could do
i could i could beat michell’s record for
672
00:32:50,879 –> 00:32:52,863
[matt]: being on the shows i got so
much to talk about
673
00:32:52,710 –> 00:32:53,318
[paul_tyler]: oh
674
00:32:52,963 –> 00:32:53,123
[matt]: but
675
00:32:53,325 –> 00:32:54,475
[ramsey_d_smith]: yeah
676
00:32:54,005 –> 00:32:56,489
[matt]: you know you guys just have to
you guys just have to rain me in
677
00:32:56,869 –> 00:32:56,929
[matt]: you
678
00:32:56,875 –> 00:32:57,263
[ramsey_d_smith]: uh
679
00:32:56,969 –> 00:33:02,423
[matt]: know i just think you know i
met with all of our partners yesterday and
680
00:33:02,604 –> 00:33:10,565
[matt]: the optimism around in plan has never
been higher i think that the portability question
681
00:33:10,645 –> 00:33:12,368
[matt]: is still a big issue that
682
00:33:12,325 –> 00:33:12,345
[ramsey_d_smith]: m
683
00:33:12,408 –> 00:33:14,592
[matt]: lingers out there both at
684
00:33:14,584 –> 00:33:14,605
[ramsey_d_smith]: m
685
00:33:14,632 –> 00:33:16,836
[matt]: the plan level and at the participant
level
686
00:33:17,695 –> 00:33:19,004
[ramsey_d_smith]: ye
687
00:33:18,258 –> 00:33:23,773
[matt]: and at the same time you know
it’s the record keeping community that really needs
688
00:33:23,833 –> 00:33:27,835
[matt]: to make a decision in a commitment
to commit to these and i think that
689
00:33:27,915 –> 00:33:33,225
[matt]: twenty twenty three is going to be
a very interesting year to see what happens
690
00:33:33,445 –> 00:33:39,656
[matt]: in that regard and to see what
solutions these record keepers begin to select so
691
00:33:40,337 –> 00:33:43,282
[matt]: i think that the twenty three is
really going to be an interesting year for
692
00:33:43,362 –> 00:33:44,770
[matt]: the the plan market
693
00:33:45,631 –> 00:33:51,520
[paul_tyler]: yeah i this this was wonderful and
you know what you offered we’ll pull you
694
00:33:51,560 –> 00:33:53,203
[paul_tyler]: back to talk
695
00:33:53,092 –> 00:33:53,173
[ramsey_d_smith]: ay
696
00:33:53,323 –> 00:33:53,564
[paul_tyler]: more
697
00:33:53,494 –> 00:33:53,837
[matt]: awesome
698
00:33:54,045 –> 00:33:54,465
[paul_tyler]: so i
699
00:33:54,535 –> 00:33:55,555
[ramsey_d_smith]: yeah
700
00:33:54,545 –> 00:34:00,615
[paul_tyler]: guess my last question for you matt
i looked back in twenty twenty twenty one
701
00:34:00,756 –> 00:34:04,101
[paul_tyler]: i think it was the year of
life insurance you know covid happened
702
00:34:03,835 –> 00:34:04,735
[ramsey_d_smith]: yeah
703
00:34:04,181 –> 00:34:08,629
[paul_tyler]: people said i’m like oh oh maybe
i could die and maybe i need insurance
704
00:34:09,371 –> 00:34:09,551
[paul_tyler]: we saw
705
00:34:09,573 –> 00:34:09,796
[matt]: oh
706
00:34:09,611 –> 00:34:14,265
[paul_tyler]: a big spike do you think twenty
two is the year of the annuity when
707
00:34:14,305 –> 00:34:20,470
[paul_tyler]: people say my fork dropped thirty percent
wow i’d had it this an annuity yeah
708
00:34:21,212 –> 00:34:24,882
[paul_tyler]: maybe this wouldn’t happened or at least
i wouldn’t because i wouldn’t be looking at
709
00:34:24,922 –> 00:34:26,286
[paul_tyler]: my statement like i’m looking today
710
00:34:28,976 –> 00:34:30,040
[ramsey_d_smith]: you know go ahead man
711
00:34:30,823 –> 00:34:33,948
[matt]: i was just going to say i
agree i think whether or not twenty two
712
00:34:34,088 –> 00:34:39,698
[matt]: is it definitely opens up the conversation
for literally every investor i also think it’s
713
00:34:39,718 –> 00:34:42,313
[matt]: a good time for financial advisors be
714
00:34:42,369 –> 00:34:42,390
[paul_tyler]: m
715
00:34:42,373 –> 00:34:45,496
[matt]: on the hunt for new clients i
know that they’re really worried about pretension now
716
00:34:45,656 –> 00:34:46,477
[matt]: but when the
717
00:34:46,479 –> 00:34:46,500
[paul_tyler]: m
718
00:34:46,497 –> 00:34:48,059
[matt]: market drops twenty five percent
719
00:34:48,060 –> 00:34:48,443
[paul_tyler]: oh
720
00:34:48,599 –> 00:34:51,202
[matt]: it’s not fair to blame your advisor
but i think a lot of people do
721
00:34:53,076 –> 00:34:56,622
[ramsey_d_smith]: so i was just going to mention
that you know we recently put together a
722
00:34:56,682 –> 00:35:01,129
[ramsey_d_smith]: slide that showed five year performance of
target date funds and it was across all
723
00:35:01,530 –> 00:35:06,640
[ramsey_d_smith]: called the six top providers and the
five year return is about just just under
724
00:35:06,700 –> 00:35:11,208
[ramsey_d_smith]: five percent for most of them so
you know that’s five per cent from you
725
00:35:11,248 –> 00:35:11,389
[ramsey_d_smith]: know
726
00:35:11,340 –> 00:35:11,564
[paul_tyler]: oh
727
00:35:11,889 –> 00:35:13,312
[ramsey_d_smith]: in an at risk situation
728
00:35:13,883 –> 00:35:14,291
[matt]: that’s right
729
00:35:14,454 –> 00:35:18,500
[ramsey_d_smith]: and so the compare the comparison starts
look a lot more
730
00:35:18,390 –> 00:35:18,715
[paul_tyler]: oh
731
00:35:19,162 –> 00:35:20,283
[ramsey_d_smith]: a lot more interesting for sure
732
00:35:21,410 –> 00:35:22,233
[paul_tyler]: yeah well listen
733
00:35:22,364 –> 00:35:23,108
[matt]: yeah you know what
734
00:35:24,942 –> 00:35:25,705
[paul_tyler]: go ahead matt please
735
00:35:25,606 –> 00:35:27,276
[ramsey_d_smith]: go ahead matt you have the stage
736
00:35:27,864 –> 00:35:29,667
[matt]: you guys you guys let me talk
all day long
737
00:35:29,805 –> 00:35:30,027
[ramsey_d_smith]: sure
738
00:35:30,107 –> 00:35:33,413
[matt]: i was just going to say you
know another really quick personal story i have
739
00:35:33,453 –> 00:35:35,977
[matt]: a friend of mine that worked for
a t and t for thirty two years
740
00:35:36,358 –> 00:35:36,518
[matt]: and
741
00:35:36,489 –> 00:35:36,510
[paul_tyler]: m
742
00:35:37,039 –> 00:35:43,556
[matt]: he was thinking about retiring last december
and he didn’t and he just recently retired
743
00:35:43,976 –> 00:35:48,722
[matt]: um but if you think about the
difference between retiring in december
744
00:35:49,315 –> 00:35:49,762
[ramsey_d_smith]: oh
745
00:35:49,493 –> 00:35:51,356
[matt]: of twenty one versus
746
00:35:51,055 –> 00:35:51,925
[ramsey_d_smith]: yeah
747
00:35:51,477 –> 00:35:56,377
[matt]: retiring in october of twenty two and
the hit that you’re for when k is
748
00:35:56,437 –> 00:36:00,726
[matt]: taken now again he has enough cash
on the side that he can wait for
749
00:36:00,886 –> 00:36:04,864
[matt]: the market to recover which is great
but if he didn’t you know from an
750
00:36:05,064 –> 00:36:07,890
[matt]: income standpoint ramsey on a monthly basis
751
00:36:07,705 –> 00:36:07,725
[ramsey_d_smith]: m
752
00:36:07,930 –> 00:36:10,634
[matt]: going forward those you know those
753
00:36:11,065 –> 00:36:11,755
[ramsey_d_smith]: yeah
754
00:36:12,117 –> 00:36:14,501
[matt]: those consequences are pretty severe and so
you’re right
755
00:36:14,670 –> 00:36:15,450
[paul_tyler]: yeah
756
00:36:15,273 –> 00:36:19,720
[matt]: if it’s five percent over the past
five years wouldn’t you rather have that guaranteed
757
00:36:20,185 –> 00:36:20,205
[ramsey_d_smith]: m
758
00:36:20,602 –> 00:36:24,748
[matt]: with maybe some upside is to oppose
to losing twenty five per cent
759
00:36:24,714 –> 00:36:24,796
[paul_tyler]: ah
760
00:36:24,769 –> 00:36:27,092
[matt]: of your value as you get to
enter into retirement
761
00:36:26,905 –> 00:36:26,925
[ramsey_d_smith]: m
762
00:36:27,533 –> 00:36:30,561
[matt]: um that’s a pretty tricky situation for
most investors
763
00:36:32,746 –> 00:36:37,030
[ramsey_d_smith]: all right matt it has been a
real pleasure o thank you for thank you
764
00:36:37,090 –> 00:36:39,291
[ramsey_d_smith]: for joining us and then you know
i echo
765
00:36:39,330 –> 00:36:39,611
[paul_tyler]: oh
766
00:36:39,432 –> 00:36:42,354
[ramsey_d_smith]: paul’s desire to have you come back
on sometime soon
767
00:36:43,313 –> 00:36:43,937
[matt]: on good thank you
768
00:36:43,970 –> 00:36:44,311
[paul_tyler]: excellent
769
00:36:43,997 –> 00:36:44,239
[matt]: fellows
770
00:36:44,510 –> 00:36:44,531
[ramsey_d_smith]: m
771
00:36:44,572 –> 00:36:48,582
[paul_tyler]: he thanks man thanks to our listeners
join us again next week for another great
772
00:36:48,682 –> 00:36:50,126
[paul_tyler]: episode of that annuity
773
00:36:50,035 –> 00:36:50,580
[ramsey_d_smith]: oh
774
00:36:50,207 –> 00:36:50,788
[paul_tyler]: show thanks
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