Michael Finke

It May Be Time To Swap The Old Annuity For A New One, Experts Say

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

Ashley SaundersIt May Be Time To Swap The Old Annuity For A New One, Experts Say
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Episode 169: Should Interest Rate Changes Rewrite Retirement Product Recommendations with Dave Blanchett and Michael Finke

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For those of us in the business, it feels like interest rates have been rising every two weeks. Fixed rates and guaranteed income have gone up. However, other competing fixed income options have risen as well. How does this new environment reshape how we evaluate recommendations for our clients? We explore this topic and more with Michael Finke, Professor at The American College and David Blanchett, Head of Retirement Research at PGIM.

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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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00:00:06,102 –> 00:00:10,051
[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

36
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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

44
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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

47
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[michael_finke]: going

48
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[david_blanchett]: know

49
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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

79
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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

87
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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

102
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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

109
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[ramsey_d_smith]: oh

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[michael_finke]: bond

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[paul_tyler]: yeah

112
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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

126
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[paul_tyler]: yeah

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[michael_finke]: done in two thousand twenty two if

128
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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

131
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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

133
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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

135
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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

139
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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

145
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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

151
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[paul_tyler]: yeah

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[michael_finke]: bear in fact

153
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[ramsey_d_smith]: oh

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

155
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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

160
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[michael_finke]: fact that the insurance company is willing
to bear that risk

161
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[paul_tyler]: a

162
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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

165
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[ramsey_d_smith]: yeah

166
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[michael_finke]: s versus using um you know using
them as a substitute for longer duration bonds

167
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[michael_finke]: than a portfolio

168
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[paul_tyler]: yeah it’s been i will tell you
this has been

169
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[michael_finke]: it

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[bruno_caron]: oh

171
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[paul_tyler]: a wild ride and even if i
looked at you

172
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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

176
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[ramsey_d_smith]: yah

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[paul_tyler]: quarter versus third and fourth

178
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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

183
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[paul_tyler]: course the markets were very be very
differently you know in the last eighteen eighteen

184
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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

186
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[paul_tyler]: these ball control so i personally took
a lot calls and chats from from clients

187
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[paul_tyler]: who started to look at the statement
he said wait a second s m p

188
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[paul_tyler]: s gone up this much and this
much you’re only giving me this much and

189
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[paul_tyler]: we’re all sort of rubbing our hands
together saying what are we going to do

190
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[paul_tyler]: now the minute the market crashed michael
those calls stopped and in fact i know

191
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[ramsey_d_smith]: hm

192
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[paul_tyler]: go on a bike ride and find
somebody i know from a long time ago

193
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[paul_tyler]: says paul i love my annuity

194
00:06:16,590 –> 00:06:16,610
[ramsey_d_smith]: m

195
00:06:16,941 –> 00:06:21,953
[paul_tyler]: i love my annuity of the market
going down so it really has reenforced huge

196
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[paul_tyler]: you know part of the value prop
of a fixed and eccinuity i guess my

197
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[paul_tyler]: question will be is this temporary

198
00:06:28,569 –> 00:06:28,590
[ramsey_d_smith]: m

199
00:06:29,266 –> 00:06:31,770
[paul_tyler]: or is this you know a more
permanent shift than how

200
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[ramsey_d_smith]: m

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[paul_tyler]: people are looking at these products

202
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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

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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

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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

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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

286
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[paul_tyler]: ye

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

288
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[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
00:09:04,027 –> 00:09:05,329
[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

 

 

Nick DesrocherEpisode 169: Should Interest Rate Changes Rewrite Retirement Product Recommendations with Dave Blanchett and Michael Finke
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Why Advisors Shouldn’t Dismiss Index-Linked Annuities

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

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

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

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

How should advisors think about protected annuities?

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

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

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

Limiting Risk

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

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

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

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

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

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

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

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

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

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

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

Buffered RILAs

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

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

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

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

Another Option

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

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

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

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

Deferring Gains

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

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

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

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

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

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

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

Ashley SaundersWhy Advisors Shouldn’t Dismiss Index-Linked Annuities
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Episode 145: Diving Deep into the Power of Annuities With Michael Finke

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In this business, we have all heard about the ability of annuities to create a guaranteed income in retirement. Today, Michael Finke, investments/retirement professor and Frank M. Engle Chair of Economic Security Research at The American College joins us  to bring the actual numbers into sharper focus.
Also, do you want to get regular updates on news about guests of our show? Go to https://thatannuityshow.com and subscribe to our newsletter.
We hope you enjoy the show.
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Transcript

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[Paul Tyler]: hi this is paul

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[Paul Tyler]: tyler and welcome to another episode of that annuity show ramsey welcome

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[Ramsey Smith]: thank you it’s great to be back live from new york city having a good time

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[Paul Tyler]: yeah and yeah it’s good to see you

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[Paul Tyler]: so we’ve had kind of an

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[Michael Finke]: hundred and

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[Paul Tyler]: interesting series of discussions about rules of thumb for a variety of topics

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[Paul Tyler]: including withdrawal and mr bill bengen joined us a week or two ago to talk about

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[Paul Tyler]: the four percent rule

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[Paul Tyler]: and

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[Michael Finke]: sure

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[Paul Tyler]: we’ve got a great discussion teed up with somebody else who’s a very important

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[Paul Tyler]: voice in

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[Paul Tyler]: understanding how that may work do you want to introduce our our guest ramsey

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[Ramsey Smith]: sure absolutely so delighted to be joined today by michael finke he is he is

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[Ramsey Smith]: one of you know number of sort of very important voices of what i like to call the

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[Ramsey Smith]: academic and sort of pragmatic cabal in

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[Ramsey Smith]: retirement uh in retirement research

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[Michael Finke]: hm

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[Ramsey Smith]: and we’re just delighted to have him he’s the professor of wealth management at

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[Ramsey Smith]: the american college of financial services and he is the frank m

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[Ramsey Smith]: angle chair of economic security

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[Ramsey Smith]: so

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[Michael Finke]: yeah

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[Ramsey Smith]: michael

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[Ramsey Smith]: it’s been we should have done this six months ago a year ago delighted to have you

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[Ramsey Smith]: on

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[Ramsey Smith]: so many things to talk about

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[Ramsey Smith]: let’s get right into it i would like to first of all find out

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[Ramsey Smith]: what you’ve been focusing on you know most recently in your you know in your

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[Ramsey Smith]: travels and your practice

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[Michael Finke]: well i topic

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[Michael Finke]: a couple of topics ramsey so first of all great to be here

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[Michael Finke]: just as a way of background this is one of

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[Michael Finke]: i

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[Michael Finke]: those topics that i’ve been working on now for over a decade it’s been i think now

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[Michael Finke]: ten years

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[Paul Tyler]: yeah

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[Michael Finke]: since wade vow and david blanchett and i wrote the original article criticizing

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[Michael Finke]: the

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[Michael Finke]: four percent rule in a low interest rate environment

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[Ramsey Smith]: yeah

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[Michael Finke]: and since then

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[Michael Finke]: like that

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[Michael Finke]: i’ve done a lot of different studies on

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[Michael Finke]: understanding what risk means in retirement helping clarify the idea of

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[Michael Finke]: taking risk

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[Michael Finke]: oh yeah

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[Michael Finke]: by investing in stocks and bonds and

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[Michael Finke]: bed

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[Michael Finke]: understanding what happens when things go well and when things don’t t go not so

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[Michael Finke]: well

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[Michael Finke]: uh what if they

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[Michael Finke]: and one

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[Ramsey Smith]: i think

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[Michael Finke]: of the things that i’ve been thinking a lot about over the last year or two is

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[Michael Finke]: this idea of a fixed withdrawal rate and a certain amount

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[Michael Finke]: you know

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[Michael Finke]: of safety so the whole

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[Michael Finke]: like

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[Michael Finke]: idea of a monte carlo analysis so if you run one of these monte carlo analyses

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[Michael Finke]: which by the way it is just a randomizer it has a distribution of returns that you

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[Michael Finke]: can get on an investment portfolio you have to plug in your expected returns your

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[Michael Finke]: expected standard deviation it’ll spit out an asset return the first year’ll

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[Michael Finke]: simulate

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[Michael Finke]: about

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[Michael Finke]: thousands of retirements you know sometimes people get lucky sometimes people get

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[Michael Finke]: unlucky

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[Michael Finke]: but i didn’t

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[Michael Finke]: but i think when you run a money carlo just and you just do it at one point in

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[Michael Finke]: time it gives you this idea that you’re ninety five percentage safe or ninety

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[Michael Finke]: ninety percent safe what does that safety mean it means that you can withdraw a

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[Michael Finke]: certain amount of money every year from a retirement portfolio and this is

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[Michael Finke]: really

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[Michael Finke]: really the idea behind bill

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[Michael Finke]: bacon

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[Michael Finke]: begin’s work is let’s look at historical time periods and let’s see how much you

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[Michael Finke]: could have withdrawn from an investment portfolio of stocks and bonds safely

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[Michael Finke]: historically

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[Michael Finke]: and one of the points

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[Michael Finke]: the white on

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[Michael Finke]: that i think is not covered enough

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[Michael Finke]: he he want a money car

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[Michael Finke]: is that when you run a money carlo and you’re doing a simulation and you’re

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[Michael Finke]: i remember that

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[Michael Finke]: trying to capture what asset returns are probably going to look like in the future

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[Michael Finke]: because again we’re in a low interest rate environment we have very high prices on

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[Michael Finke]: risky assets like stocks that’s going to adjust our expectations of returns

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[Michael Finke]: downward what sort of a risk does that involve does that change the mechanics of

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[Michael Finke]: the four percent rule

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[Michael Finke]: but also

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[Michael Finke]: but also what happens when you get unlucky and to me that is the one area of

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[Michael Finke]: retirement income planning that is not discussed enough so if you get unlucky the

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[Michael Finke]: first year of retirement so for example you experience something like investors

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[Michael Finke]: experienced in two thousand

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[Michael Finke]: you

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[Michael Finke]: eight how much does that affect the safe withdrawal rate now we

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[Michael Finke]: no

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[Michael Finke]: know that you may have had a ninety percent chance of success the first year of

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[Michael Finke]: retirement but

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[Michael Finke]: back in the

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[Michael Finke]: that can go down to a sixty percentage chance of success that you’re going to be

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[Michael Finke]: able to maintain the same lifestyle if you have a two thousand eight occur and

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[Michael Finke]: that might

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[Michael Finke]: that gets into this idea of the

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[Michael Finke]: we

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[Michael Finke]: requirement of spending

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[Michael Finke]: like

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[Michael Finke]: flexibility if you have no safety net you have to be able to adjust your spending

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[Michael Finke]: downward if you want to maintain the same probability of success

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[Michael Finke]: and

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[Michael Finke]: you

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[Michael Finke]: there’s no getting around that you know people they just cling to

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[Michael Finke]: like

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[Michael Finke]: this idea that

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[Michael Finke]: he couldn’t

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[Michael Finke]: because you had a ninety percentage chance of success the first year of retirement

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[Michael Finke]: you always have a ninety percentage chance of success

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[Michael Finke]: the

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[Michael Finke]: but that changes every

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[Ramsey Smith]: it’s still nice

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[Michael Finke]: day every day you’re a chance of being able to maintain a given income changes and

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[Michael Finke]: whatever

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[Michael Finke]: whatever asset prices were the first day of retirement which are very high

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[Michael Finke]: right

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[Michael Finke]: right now that’s irrelevant a year from now if you would have just waited a year

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[Michael Finke]: of retirement to retire and you went from a million dollars down to seven hundred

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[Michael Finke]: fifty thousand dollars

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[Michael Finke]: that

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[Michael Finke]: all of a sudden your four percent rule would be thirty thousand dollars instead of

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[Michael Finke]: forty thousand dollars

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[Michael Finke]: yeah i been thinking bi that

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[Michael Finke]: and i think it’s one of these ideas that people don’t give enough thought to that

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[Michael Finke]: if you want to maintain the same probability of success

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[Michael Finke]: your spending path has to be

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[Michael Finke]: why

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[Michael Finke]: widely variable that was a very long answer to what are you working on right now

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[Michael Finke]: but it’s one

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[Michael Finke]: what

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[Michael Finke]: of these things that i feel very passionate about that’s not discussed enough is

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[Michael Finke]: the requirement of spending variability if you have no safety net because you have

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[Michael Finke]: to avoid that worst possible outcome

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[Paul Tyler]: so i it’s interesting you mentioned control and expenses

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[Michael Finke]: so it’s interesting you mentioned control and expenses

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[Paul Tyler]: i listened to you know susie armon the other day on one of her our shows interest

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[Michael Finke]: i listened to you know susie arman the other day in one of her hour shows interest

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[Paul Tyler]: interesting i just really wanted to sort of catch up and hear what she’s doing and

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[Michael Finke]: interesting i just really wanted to sort of catch up and hear what she’s doing and

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[Paul Tyler]: michael her her advice always also seems to come back to yeah but

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[Michael Finke]: michael her her advice always seems to come back to yeah but

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[Paul Tyler]: you know lower your cost of lower expenses that is one thing i have in my own

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[Michael Finke]: you know lower your cost of lower expenses that is one thing i have in my own

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[Paul Tyler]: control

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[Michael Finke]: control

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[Paul Tyler]: is managing expenses down

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[Michael Finke]: is managing expenses down

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[Paul Tyler]: as you go into retirement a hard thing to do or is it easier is it natural do you

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[Michael Finke]: as you go into retirement a hard thing to do or is it easier is it natural do you

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[Paul Tyler]: have any sense of what that pattern looks like for a typical senior

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[Michael Finke]: have any sense of what that pattern looks like for a typical senior

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[Michael Finke]: well this is a great

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[Michael Finke]: but

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[Michael Finke]: question so i think at the beginning of retirement the first step needs to be to

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[Michael Finke]: look at your expenses and to identify which of those expenses is flexible and

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[Michael Finke]: which of those expenses is not flexible your property tax is clearly inflexible

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[Michael Finke]: your health care is inflexible paying for insurance on your car is inflexible all

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[Michael Finke]: of these expenses represent about

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[Michael Finke]: but

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[Michael Finke]: seventy percent of a retirees’ budget

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[Michael Finke]: and it does not make sense to fund those expenses using risky assets because you

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[Michael Finke]: cannot withstand a drop in value

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[Michael Finke]: but you can fund those expenses with safe assets so things like social security or

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[Michael Finke]: a pension or an annuity or maybe a bond ladder and here’s where it gets

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[Michael Finke]: interesting because if you fund it with a bond ladder versus an annuity we know

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[Michael Finke]: that you spend less each year or it requires more money up front you have to

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[Michael Finke]: allocate more money up front to fund those basic expenses now the second part of

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[Michael Finke]: the equation is the flexible expenses of those flexible expenses

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[Paul Tyler]: yeah

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[Michael Finke]: how willing are you to cut back

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[Michael Finke]: okay

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[Michael Finke]: if markets don’t perform well

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[Michael Finke]: how about

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[Michael Finke]: and a lot of people they look at their gym membership and they say that well

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[Michael Finke]: that’s

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[Michael Finke]: what

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[Michael Finke]: not that flexible of an expense my vacations are not that flexible of inexpensive

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[Michael Finke]: my going out to dinner with friends is not that flexible of an expense therefore i

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[Michael Finke]: am not willing to adjust my spending significantly if markets don’t perform well

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[Michael Finke]: remember the whole point of taking investment risk is that you’re hoping to

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[Michael Finke]: get

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[Michael Finke]: good

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[Paul Tyler]: thank you

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[Michael Finke]: a higher return

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[Michael Finke]: but you have to accept risk in retirement what risk means is the possibility of

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[Michael Finke]: spending less so the question you have to ask yourself is are you willing to

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[Michael Finke]: accept the possibility of spending less on going out to dinner with friends in

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[Michael Finke]: order to

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[Michael Finke]: about

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[Michael Finke]: have on average more money to go out to dinner with

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[Paul Tyler]: yeah

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[Michael Finke]: friends in the future that’s the trade off all retirees need to accept and anybody

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[Michael Finke]: who tries to say that you don’t have to make that trade off does not understand

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[Michael Finke]: the basic economic concept of risk risk is real if it wasn’t real we wouldn’t get

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[Michael Finke]: rewarded for taking it but it does mean that we have to be thinking about our

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[Michael Finke]: spending first when we’re developing a retirement income investment plan

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[Ramsey Smith]: so that’s a

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[Ramsey Smith]: it’s it’s a concept that’s that’s very compelling and

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[Ramsey Smith]: there’s some interesting sort of second sort of in my mind two ways to look at it

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[Ramsey Smith]: obviously there’ the expenses that are clearly inflexible right so that the true

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[Ramsey Smith]: fixed costs and then there are others that that aren’t flexible um but for

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[Ramsey Smith]: personal utility reasons people want to treat them as as as is inflexible and why

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[Ramsey Smith]: i find that interesting is that that potentially opens up the use case for

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[Ramsey Smith]: annuities to a broader socioeconomic audience so maybe there are wealthier people

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[Ramsey Smith]: that that ultimately are determined that there is a lifestyle that they want to

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[Ramsey Smith]: lead

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[Ramsey Smith]: that again

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[Ramsey Smith]: there may be activities that aren’t absolutely necessary but they’ve decided for

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[Ramsey Smith]: sure they want to pursue them

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[Michael Finke]: well

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[Ramsey Smith]: and the question is should those sort of voluntary inflect i’ll call them

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[Michael Finke]: oh

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[Ramsey Smith]: voluntary and flexible expenses is there a use case for greater use of annuities

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[Ramsey Smith]: is for coverage of that part

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[Ramsey Smith]: of their income needs as well

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[Ramsey Smith]: i’m not sure if that’s part of the conversation but i’ve always thought that that

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[Ramsey Smith]: was another sort of additional use case

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[Michael Finke]: what is the weather i

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[Michael Finke]: when i interview retirees sometimes what i hear is

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[Michael Finke]: yeah

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[Michael Finke]: they’re

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[Michael Finke]: very crowd

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[Michael Finke]: very proud of the fact that they’re not spending that much in retirement

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[Michael Finke]: yes

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[Michael Finke]: and

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[Michael Finke]: i

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[Michael Finke]: like

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[Michael Finke]: say great you know it’s great that you’re using coupons or going out to the two

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[Michael Finke]: for one dinner early you’re not taking too many vacations you’re not spending too

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[Michael Finke]: much money you must really want to give more money to your kids

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[Michael Finke]: and then what i very often hear is

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[Ramsey Smith]: hey

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[Michael Finke]: no well you know they have plenty of money i i help them pay for their education

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[Michael Finke]: they make more money than i ever did and then there is this silence this sort of

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[Michael Finke]: see

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[Michael Finke]: realization that there’s only two places your money can go in retirement you can

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[Michael Finke]: either give it to other people

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[Michael Finke]: or you can spend it to live better now spending it to live better could mean

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[Michael Finke]: spending it on fun stuff it can it can mean giving money to a grandkid to help

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[Michael Finke]: them with something that they want to be able to do

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[Michael Finke]: like

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[Michael Finke]: but it’s still spending and you know it’s it’s the the the objective no matter how

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[Michael Finke]: much money you have is what plan can i use that will allow me for the portion of

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[Michael Finke]: my wealth that i want to devote to my lifestyle how much what

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[Michael Finke]: what

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[Michael Finke]: what what

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[Michael Finke]: strategy can i use that’s going to allow me to spend the most money every year and

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[Paul Tyler]: or something

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[Michael Finke]: the big

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[Michael Finke]: big mar

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[Michael Finke]: barrier is that you don’t know how long you’re going to live and you don’t know

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[Michael Finke]: the returns you’re going to receive on your investments therefore

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[Michael Finke]: optimally you’ll cut back you won’t spend as much because you want to avoid the

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[Michael Finke]: risk of potentially

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[Michael Finke]: yeah

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[Michael Finke]: running out it’s like if you’re in a circus and they take away the safety net

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[Michael Finke]: you’re not going to take as many risks because the downside is far worse but if

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[Michael Finke]: you can somehow take away the risk of that potential downside from living too long

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[Michael Finke]: or getting bad investment returns that frees you up to spend more money especially

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[Michael Finke]: when the money can do the most good in terms of your lifestyle in your sixty

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[Michael Finke]: seconds and seventy seconds when your physical and cognitive abilities are

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[Michael Finke]: sharpest as opposed to you know in your ninety seconds when you know so how many

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[Michael Finke]: people do you see that end up in their nineties with more money than they can ever

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[Michael Finke]: spend and in essence what they’ve done is they’ve been overly cautious especially

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[Michael Finke]: if they don’t have a strong motive to give the money to someone else you know they

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[Michael Finke]: at the last minute that they could have lived better but they didn’t because of

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[Michael Finke]: that potential fear and you know

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[Michael Finke]: annuitity the whole point of it is let’s take away that source of risk to free you

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[Michael Finke]: think

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[Michael Finke]: up to be able to spend more especially when you can enjoy the money the most

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[Paul Tyler]: so how many retirement plans michael do you think a retiree actually needs i mean

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[Michael Finke]: so how many retirement plans michael do you think a retiree actually

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[Michael Finke]: mm hm

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[Michael Finke]: needs i mean again back to sort of rules of thumb well meet with ramsay your

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[Paul Tyler]: again back to sort of rules of thumb well meet with ramsey your advisor once a

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[Michael Finke]: advisor once a year once a quarter review how your portfolio is going

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[Paul Tyler]: year once a quarter review how your portfolio is going

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[Michael Finke]: oh

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[Paul Tyler]: sounds to me like there may be three major you maybe you’re redoing your plan in a

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[Michael Finke]: sounds to me like there may be three major you may maybe you’re you’re redoing

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[Michael Finke]: your plan in a significant

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[Michael Finke]: oh

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[Paul Tyler]: significant way what three times four times in the course of retirement do you

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[Michael Finke]: way what three times four times in the course of retirement do you have any sense

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[Paul Tyler]: have any sense at how

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[Michael Finke]: at how many how this actually works in practice with retirees who say you yeah

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[Paul Tyler]: how this actually works in practice with retirees who say you yeah i

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[Paul Tyler]: i i will end up with too much money and my kids don’t need it so why am i why am i

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[Michael Finke]: i i end up with too much money and my kids don’t need it so why am i pinching

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[Paul Tyler]: pinching pennies here i want i wanna go on the vacation

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[Michael Finke]: pennies here i want i wanna go on the vacation

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[Michael Finke]: well you know ideally

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[Michael Finke]: it

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[Michael Finke]: if technology advances enough

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[Michael Finke]: yes

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[Michael Finke]: and you know this may

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[Michael Finke]: he

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[Michael Finke]: not be something that requires constant meetings because you’re going to be given

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[Michael Finke]: the information you need to guide you towards making the right decisions your

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[Michael Finke]: portfolio is going to be automatically rebalanced you are going to have that

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[Michael Finke]: protection you’re going to have an idea a guideline about how much you can safely

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[Michael Finke]: spend

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[Michael Finke]: then you know part of the value of going to advisor obviously is well beyond the

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[Michael Finke]: retirement income plan it is

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[Michael Finke]: first of all

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[Michael Finke]: i

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[Michael Finke]: deciding how much you want to pass on to others what is the most efficient way to

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[Michael Finke]: do that how much you want to spend what is the most efficient way to do that

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[Michael Finke]: adjusting along the way

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[Paul Tyler]: eight

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[Michael Finke]: having a voice of comfort so that you don’t freak out when markets fall these are

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[Michael Finke]: all the things that advisors provide tax efficiency understanding rds all the rest

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[Michael Finke]: of it now there’s a huge amount of value that an advisor provides but when it

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[Michael Finke]: comes to the retirement income aspect ideally you put it on autopilot and i think

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[Michael Finke]: one of the reasons why you want to put it on

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[Paul Tyler]: that’s true

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[Michael Finke]: autopilot is that especially as you get to your eighty seconds and ninety seconds

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[Michael Finke]: your you ability to manage an investment portfolio

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[Michael Finke]: is not the same as it was in your sixty second and seventies and decide how much

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[Michael Finke]: you can safely withdraw from that investment portfolio

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[Michael Finke]: it’s good to have professional help to do that not everybody has access to that

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[Michael Finke]: kind of professional help

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[Michael Finke]: for them what i’m hoping is that we eventually get to a point where people first

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[Michael Finke]: of all don’t have to worry about running out of money and second of all have a

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[Michael Finke]: clearer idea of how much they can

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[Paul Tyler]: what

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[Michael Finke]: spend every year

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[Ramsey Smith]: fascinating

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[Ramsey Smith]: so

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[Ramsey Smith]: one of the um one of the other things that uh that you’ve been talking about

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[Ramsey Smith]: recently uh is a social security claiming and you’ve also been talking about

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[Ramsey Smith]: contingent deferred annuities why we start with social security claiming what it

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[Ramsey Smith]: it’s a a it’s a topic that is as often as it’s discussed it is not a it’s not

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[Ramsey Smith]: knowledge that is widely as dispersed among consumers as one would hope or imagine

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[Ramsey Smith]: so tell us a little bit about how you approach that discussion and how you help

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[Ramsey Smith]: educate consumers and frankly advisors on the importance of this

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[Michael Finke]: first of all social security is an annuity you know

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[Michael Finke]: it fun

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[Michael Finke]: for anybody who says they hate annuities well then you must really hate social

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[Michael Finke]: security

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[Michael Finke]: but as it turns out a lot of people like their social security so the idea of

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[Michael Finke]: getting an income

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[Michael Finke]: every month for life

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[Paul Tyler]: yeah

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[Michael Finke]: yeah

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[Michael Finke]: is actually not such a bad thing to have in retirement essentially that is what an

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[Michael Finke]: annuity is and when you think about it as an annuity by delaying claiming for a

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[Michael Finke]: year what you’re doing is you’re giving up the amount of money that you could have

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[Michael Finke]: gotten between say sixty two and sixty three and you’re getting a higher income

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[Michael Finke]: every year in retirement

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[Paul Tyler]: i think

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[Michael Finke]: that begins at age sixty three and then last as long as you’re alive and the way

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[Michael Finke]: that we calculate the value of that income stream is we estimate what it would

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[Michael Finke]: cost to buy that income stream in the future in a low interest rate environment

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[Michael Finke]: that costs a lot and then we look at the likelihood that you’re going to be alive

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[Michael Finke]: at a given age and we’re especially focused on the kind of people that would

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[Michael Finke]: listen to this show who actually have made the biggest gains in longevity over the

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[Michael Finke]: last twenty or thirty years so

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[Michael Finke]: men in the top tenth percentile of income have gained six years of longevity over

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[Michael Finke]: the last twenty five years or so that’s one of the most interesting phenomenon

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[Michael Finke]: that’s happened in the united states is that

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[Michael Finke]: especially higher income men and women but higher income men especially because

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[Michael Finke]: they’re not doing stupid things that they used to do and in the

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[Michael Finke]: sixties and seventies they’re not smoking they’re not you know they’re taking

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[Paul Tyler]: they get it

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[Michael Finke]: better care of themselves they’re eating better they’re exercising for whatever

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[Michael Finke]: reason they’re living longer uh women as well so women who earn more money live

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[Michael Finke]: longer on average they’ve gained about three years and so when we’re estimating

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[Michael Finke]: the value of delayed claiming we now use these updated mortality tables and

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[Michael Finke]: remember the formula that you use to estimate the benefit from delayed claiming

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[Michael Finke]: was actually created in the one thousand nine hundred eighty seconds when people

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[Michael Finke]: were not living as long and when real interests rates were higher than they are

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[Michael Finke]: today so those delayed claiming rules are wrong

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[Michael Finke]: it means that the actuarial value from delayed claiming is significant and a lot

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[Michael Finke]: man

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[Michael Finke]: of people think they’re sticking it to the government by claiming it sixty two

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[Michael Finke]: well in fact it’s the exact opposite the government is sticking it to you if you

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[Michael Finke]: claim at age sixty two

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[Michael Finke]: the

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[Michael Finke]: yeah

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[Michael Finke]: other thing that we’ve noticed is that the delayed claiming rules are tiered in

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[Michael Finke]: other words the percentage increase in income that you get from delaying between

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[Michael Finke]: sixty two and sixty three is five percent but between sixty four sixty three and

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[Michael Finke]: sixty four it’s six and two thirds percent per year and then between sixty six and

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[Michael Finke]: sixty seven it goes up to eight percent per year and when you actually back out

399
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[Michael Finke]: the benefit the present value benefit that you get

400
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[Michael Finke]: the biggest benefit you get is from waiting between sixty seven and sixty eight

401
00:19:02,617 –> 00:19:07,897
[Michael Finke]: why because that’s the first year of the eight percent bump in income and that

402
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[Michael Finke]: means that you know by just waiting between sixty seven and sixty eight you have

403
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[Michael Finke]: almost the same expected longevity but your income is so much higher that the

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[Michael Finke]: present value of that bump is you know as high as twenty thousand dollars for a

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[Michael Finke]: healthy woman and it’s significant for a healthy man as well and if you’re healthy

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[Michael Finke]: every year you delay claiming has a positive net present value is it if you’re

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[Michael Finke]: buying an annuity that is priced below market it is pretty much the best deal that

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[Michael Finke]: you can get from buying annuitity is from delayed claiming of social security so

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[Michael Finke]: we recommend to everybody who is healthy that they delay claiming again because

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[Michael Finke]: the rules are meant to be actly fair but in fact they’re not

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[Michael Finke]: because they’re old

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[Paul Tyler]: snacks

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[Michael Finke]: they’re stale they’re probably going to get changed at some point but if you can

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[Michael Finke]: delay claiming now it’s definitely in your best interest now annuities are priced

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[Michael Finke]: the exact same way or at least the simple fixed annuity products are priced the

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[Michael Finke]: same way it’s simply a matter of multiplying the probability that you’re going to

417
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[Michael Finke]: be alive at a given age by the present value of buying that income in the future

418
00:20:16,297 –> 00:20:22,617
[Michael Finke]: and that’s one of the reasons why especially late life annuitity is so cheap so

419
00:20:22,777 –> 00:20:29,097
[Michael Finke]: buying an income late in life is so cheap because when you multiply the present

420
00:20:29,497 –> 00:20:35,017
[Michael Finke]: value of the cost of an insurance company guaranteeing an income starting say at

421
00:20:35,097 –> 00:20:39,737
[Michael Finke]: the age of eighty five well there’s you know a relatively and certainly not one

422
00:20:39,817 –> 00:20:42,697
[Michael Finke]: hundred percent chance that you’re going to be alive at the age of eighty five and

423
00:20:42,777 –> 00:20:47,497
[Michael Finke]: the probability of being alive goes down every year after that so you can buy a

424
00:20:47,577 –> 00:20:53,337
[Michael Finke]: pretty significant income for a relatively modest amount of your savings through

425
00:20:53,897 –> 00:20:57,257
[Michael Finke]: some kind of a deferred income annuity and of course i’m a huge fan of the

426
00:20:57,337 –> 00:21:01,977
[Michael Finke]: qualified longevity annuity contracts the q lax because they take away a lot of

427
00:21:01,977 –> 00:21:06,377
[Michael Finke]: that longevity risk for a relatively modest price and that’s what’s known as

428
00:21:06,377 –> 00:21:10,537
[Michael Finke]: mortality credits if you try to do it without an annuity then you would have to

429
00:21:10,537 –> 00:21:14,697
[Michael Finke]: set aside so much money today let’s say you wanted to make sure that your money

430
00:21:14,777 –> 00:21:18,377
[Michael Finke]: lasted to the age of one hundred which is realistic if you were a healthy woman

431
00:21:18,457 –> 00:21:21,497
[Michael Finke]: you still have a nine percent chance that you’re going to live beyond the age of

432
00:21:21,577 –> 00:21:25,977
[Michael Finke]: one hundred so let’s say you only want a ten percent chance of failure you have to

433
00:21:26,057 –> 00:21:28,137
[Michael Finke]: build the bond ladder up to the age of one hundred

434
00:21:29,337 –> 00:21:34,137
[Michael Finke]: it may be three or four times as expensive to do that as opposed to buying a late

435
00:21:34,217 –> 00:21:38,697
[Michael Finke]: life annuity in which case you can way that risk at a relatively low price you

436
00:21:38,777 –> 00:21:42,617
[Michael Finke]: have more money available to spend early on in retirement you can live better you

437
00:21:42,697 –> 00:21:46,537
[Michael Finke]: can spend more with less risk and that’s one of the advantages of annuities it

438
00:21:46,617 –> 00:21:50,297
[Michael Finke]: sounds like you’re a salesperson it’s like you get something for nothing but in

439
00:21:50,377 –> 00:21:54,697
[Michael Finke]: fact you do get something for nothing you can spend more and you’re at less risk

440
00:21:54,857 –> 00:21:56,217
[Michael Finke]: of potentially running out

441
00:21:57,337 –> 00:22:01,177
[Michael Finke]: when you pool some of your retirement savings with other retirees and have it

442
00:22:01,257 –> 00:22:04,697
[Michael Finke]: managed by an insurance company or the federal government in the case of social

443
00:22:04,477 –> 00:22:05,477
[Michael Finke]: security

444
00:22:05,600 –> 00:22:08,320
[Paul Tyler]: okay i’m about to throw a curve ball here which is

445
00:22:05,623 –> 00:22:08,343
[Michael Finke]: okay i’m about to throw a curve ball here which is

446
00:22:10,000 –> 00:22:15,680
[Paul Tyler]: how much does the math and the risk calculus change based on events over the last

447
00:22:10,103 –> 00:22:12,263
[Michael Finke]: how much does the math and

448
00:22:11,837 –> 00:22:12,837
[Michael Finke]: co

449
00:22:12,343 –> 00:22:17,143
[Michael Finke]: the risk calculus change based on events over the last couple of years and i’ll

450
00:22:15,840 –> 00:22:19,920
[Paul Tyler]: couple of years and i’ll throw some provocative statements at one is yeah delay

451
00:22:17,223 –> 00:22:21,063
[Michael Finke]: throw some provocative statements at one is yeah delay social security because

452
00:22:20,080 –> 00:22:22,720
[Paul Tyler]: social security because everybody’s living longer well actually

453
00:22:21,143 –> 00:22:22,823
[Michael Finke]: everybody’s living longer well actually

454
00:22:24,160 –> 00:22:29,280
[Paul Tyler]: mortality tables reversed last year with covid and you know your statement you

455
00:22:24,183 –> 00:22:29,303
[Michael Finke]: mortality tables reversed last year with covid and you know your statement you

456
00:22:29,280 –> 00:22:33,200
[Paul Tyler]: know michael if you’re healthy well a lot of people who are sick looks or had

457
00:22:29,303 –> 00:22:33,223
[Michael Finke]: know michael if you’re healthy well a lot of people who are sick it looks or had

458
00:22:33,360 –> 00:22:38,320
[Paul Tyler]: covid looks like they’re experiencing some longer term health problem so hm that’s

459
00:22:33,383 –> 00:22:38,423
[Michael Finke]: covid looks like they’re experiencing some longer term health problems so that’s

460
00:22:38,480 –> 00:22:39,920
[Paul Tyler]: one another one is well let’s

461
00:22:38,503 –> 00:22:39,943
[Michael Finke]: one another one is well let’s

462
00:22:40,763 –> 00:22:41,763
[Michael Finke]: you know not not

463
00:22:41,600 –> 00:22:42,720
[Paul Tyler]: not necessarily yours but

464
00:22:41,643 –> 00:22:42,643
[Michael Finke]: not necessarily yours

465
00:22:42,157 –> 00:22:43,157
[Michael Finke]: four

466
00:22:42,743 –> 00:22:44,023
[Michael Finke]: but you know

467
00:22:44,400 –> 00:22:48,400
[Paul Tyler]: take money out of the equity market put into bonds some other people in the market

468
00:22:44,423 –> 00:22:48,023
[Michael Finke]: take money out of the equity market put into bonds some other you know people in

469
00:22:48,023 –> 00:22:52,663
[Michael Finke]: the in the market are saying that well look at the credit risk you know ramsey

470
00:22:48,720 –> 00:22:52,720
[Paul Tyler]: are saying that well look at the credit risk you know ramsey from

471
00:22:52,283 –> 00:22:53,283
[Michael Finke]: from

472
00:22:53,920 –> 00:22:57,520
[Paul Tyler]: you know half the world defaulting effectively right on

473
00:22:54,023 –> 00:22:57,543
[Michael Finke]: you know half the world defaulting effectively right on

474
00:22:58,720 –> 00:23:02,240
[Paul Tyler]: you know on some of their bonds what does that do michael to some of these

475
00:22:59,383 –> 00:23:02,823
[Michael Finke]: on some of their bonds what does that do michael to some of these with their all

476
00:23:02,320 –> 00:23:03,760
[Paul Tyler]: withdrawal right assumptions

477
00:23:02,883 –> 00:23:03,883
[Michael Finke]: right assumptions

478
00:23:04,880 –> 00:23:10,160
[Paul Tyler]: diversify your portfolio let’s you know yes you put money in the u s but spread it

479
00:23:04,983 –> 00:23:10,823
[Michael Finke]: diversify your portfolio’s yes you put money in the u s but spread internationally

480
00:23:10,240 –> 00:23:14,240
[Paul Tyler]: internationally we’re starting to see almost a bifurcation of economies you know

481
00:23:11,143 –> 00:23:15,143
[Michael Finke]: you know we’re starting to see almost a bifurcation of economies you know given

482
00:23:14,480 –> 00:23:17,680
[Paul Tyler]: if given what’s sort of where we’re seeing the world

483
00:23:14,957 –> 00:23:15,957
[Michael Finke]: oh

484
00:23:15,283 –> 00:23:16,283
[Michael Finke]: what’s sort of

485
00:23:15,780 –> 00:23:16,780
[Ramsey Smith]: oh

486
00:23:16,743 –> 00:23:17,783
[Michael Finke]: where we’re seeing the world

487
00:23:18,880 –> 00:23:22,640
[Paul Tyler]: get pushed with this war and oh yeah the really ugly one that everybody’s looking

488
00:23:18,903 –> 00:23:22,583
[Michael Finke]: get pushed with this war and then oh yeah the really ugly one that everybody’s

489
00:23:22,663 –> 00:23:25,943
[Michael Finke]: looking as inflation so michael is this just

490
00:23:22,880 –> 00:23:24,880
[Paul Tyler]: as inflation so michael

491
00:23:24,797 –> 00:23:25,797
[Michael Finke]: like

492
00:23:25,260 –> 00:23:26,260
[Paul Tyler]: is this just uh

493
00:23:25,997 –> 00:23:26,997
[Michael Finke]: just

494
00:23:26,880 –> 00:23:30,960
[Paul Tyler]: is this the one of those bumps you just described you know i’m in retirement i see

495
00:23:26,880 –> 00:23:30,960
[Paul Tyler]: is this the one of those bumps you just described you know i’m in retirement i see

496
00:23:26,983 –> 00:23:30,983
[Michael Finke]: is this the one of those bumps you just described you know i’m in retirement i see

497
00:23:31,040 –> 00:23:36,320
[Paul Tyler]: a bump and you know guess what you survive it manage the expenses you can survive

498
00:23:31,040 –> 00:23:36,320
[Paul Tyler]: a bump and you know guess what you survive it manage the expenses you can survive

499
00:23:31,063 –> 00:23:33,143
[Michael Finke]: a bump and guess what you survive it

500
00:23:33,680 –> 00:23:34,800
[Ramsey Smith]: movies pretty

501
00:23:33,703 –> 00:23:36,743
[Michael Finke]: manage the expenses you can survive it or

502
00:23:36,397 –> 00:23:37,397
[Michael Finke]: like

503
00:23:36,400 –> 00:23:40,800
[Paul Tyler]: it or do you see a fundamental shift in how you start to approach long term

504
00:23:36,400 –> 00:23:40,800
[Paul Tyler]: it or do you see a fundamental shift in how you start to approach long term

505
00:23:36,903 –> 00:23:41,623
[Michael Finke]: do you see a fundamental shift in how you start to approach long term planning for

506
00:23:41,120 –> 00:23:42,800
[Paul Tyler]: planning for the next ten fifteen years

507
00:23:41,120 –> 00:23:42,800
[Paul Tyler]: planning for the next ten fifteen years

508
00:23:41,703 –> 00:23:42,823
[Michael Finke]: the next ten fifteen years

509
00:23:43,897 –> 00:23:49,337
[Michael Finke]: you know it’s it’s a great point like we retirees did not realize that they were

510
00:23:49,497 –> 00:23:53,337
[Michael Finke]: exposed to this risk of a pandemic a lot of scientists understood that that risk

511
00:23:53,477 –> 00:23:54,477
[Michael Finke]: was a possibility

512
00:23:56,057 –> 00:24:00,057
[Michael Finke]: they face that in retirement now if they’ve gotten through it and assuming that

513
00:24:01,177 –> 00:24:02,297
[Michael Finke]: the pandemic is

514
00:24:01,940 –> 00:24:02,940
[Paul Tyler]: that’s

515
00:24:02,457 –> 00:24:07,817
[Michael Finke]: on its way out everybody else now is facing the same expected longevity that they

516
00:24:07,897 –> 00:24:11,657
[Michael Finke]: had before covid so for them it didn’t really make that much of a difference

517
00:24:12,137 –> 00:24:18,617
[Michael Finke]: obviously it has a effect on on overall longevity unfortunately you know some

518
00:24:18,697 –> 00:24:20,697
[Michael Finke]: people who had expected to live longer did not

519
00:24:21,737 –> 00:24:24,857
[Michael Finke]: but you’re still exposed to that same longevity risk

520
00:24:26,057 –> 00:24:31,817
[Michael Finke]: you know and your job when you’re planning for retirement is to address the risks

521
00:24:32,057 –> 00:24:37,017
[Michael Finke]: that you’re aware of and do it in in an efficient fashion but there is always

522
00:24:37,177 –> 00:24:40,217
[Michael Finke]: going to risks that you’re not aware of i mean that’s just part of

523
00:24:42,137 –> 00:24:46,217
[Michael Finke]: the game that you play in financial markets and just being a human being we all

524
00:24:46,377 –> 00:24:49,897
[Michael Finke]: face a certain amount of risks that we cannot anticipate and so maybe

525
00:24:49,700 –> 00:24:50,700
[Paul Tyler]: yeah

526
00:24:50,137 –> 00:24:55,337
[Michael Finke]: part of that risk is the possibility that bond markets crash maybe part of that

527
00:24:55,497 –> 00:24:59,897
[Michael Finke]: risk is the possibility that equity markets also fall or that the dollar loses

528
00:24:59,977 –> 00:25:05,257
[Michael Finke]: value or that inflation goes up those are all things that we have to face we are

529
00:25:05,337 –> 00:25:07,097
[Michael Finke]: aware of those risks we try

530
00:25:06,843 –> 00:25:07,843
[Michael Finke]: what do you

531
00:25:07,177 –> 00:25:12,857
[Michael Finke]: to address them as best we can but the only way to respond to risks that we’re not

532
00:25:12,917 –> 00:25:13,917
[Michael Finke]: aware of is to

533
00:25:13,977 –> 00:25:18,217
[Michael Finke]: recognize that we can be overconfident about the lifestyle that we expect to lead

534
00:25:14,043 –> 00:25:15,043
[Michael Finke]: i have

535
00:25:18,357 –> 00:25:19,357
[Michael Finke]: and to

536
00:25:18,603 –> 00:25:19,603
[Michael Finke]: better

537
00:25:19,097 –> 00:25:22,377
[Michael Finke]: build a certain amount of slack into that lifestyle to account

538
00:25:22,043 –> 00:25:23,043
[Michael Finke]: yeah

539
00:25:22,537 –> 00:25:25,497
[Michael Finke]: for the possibility that there may be risks that we don’t anticipate

540
00:25:26,697 –> 00:25:31,897
[Michael Finke]: one of those risks that i think david blanchett and wade fou and i have been

541
00:25:31,977 –> 00:25:37,017
[Michael Finke]: thinking about for a long time is the risk of united states equities and

542
00:25:37,837 –> 00:25:38,837
[Michael Finke]: a lot of people

543
00:25:39,897 –> 00:25:44,297
[Michael Finke]: almost have a religious belief that united states equities are going to continue

544
00:25:44,777 –> 00:25:49,737
[Michael Finke]: to provide ten to twelve percent return indefinitely in retirement and if you can

545
00:25:49,897 –> 00:25:54,297
[Michael Finke]: just wait it out if equities go down in value then everything’s going to be okay

546
00:25:54,357 –> 00:25:55,357
[Michael Finke]: in the long run

547
00:25:56,457 –> 00:26:01,257
[Michael Finke]: this fervent belief that we are all entitled to what’s known as an equity risk

548
00:26:01,497 –> 00:26:05,977
[Michael Finke]: premium in other words a higher return from stos for than from bonds can get

549
00:26:06,137 –> 00:26:10,857
[Michael Finke]: people in trouble as well because there is no guarantee and especially as

550
00:26:10,937 –> 00:26:14,297
[Michael Finke]: expensive as stock prices have been in recent years

551
00:26:15,897 –> 00:26:19,497
[Michael Finke]: historically when stocks are this expensive they simply don’t perform that well

552
00:26:20,937 –> 00:26:26,217
[Michael Finke]: over a long term time horizon that’s a risk we’re aware of and if you’re not

553
00:26:26,297 –> 00:26:30,297
[Michael Finke]: building that risk into your retirement income plan the possibility that equities

554
00:26:30,377 –> 00:26:34,857
[Michael Finke]: are not going to bail you out then you may end up in trouble and let me just give

555
00:26:34,637 –> 00:26:35,637
[Michael Finke]: you as an example

556
00:26:36,537 –> 00:26:41,337
[Michael Finke]: if you look at remember the four percent rule concept is based on this idea that

557
00:26:41,417 –> 00:26:46,137
[Michael Finke]: your spending goes up every year in order to match inflation of course inflation

558
00:26:46,217 –> 00:26:48,297
[Michael Finke]: is its own video syncretic risk

559
00:26:49,437 –> 00:26:50,437
[Michael Finke]: so

560
00:26:52,457 –> 00:26:55,017
[Michael Finke]: you can buy what’s known as a treasury inflation

561
00:26:55,083 –> 00:26:56,083
[Michael Finke]: man

562
00:26:55,177 –> 00:27:00,377
[Michael Finke]: protected security as a way of getting rid of that inflation risk but if you do

563
00:27:00,457 –> 00:27:04,537
[Michael Finke]: that and you follow the four for percent rule then at today’s low treasury

564
00:27:04,697 –> 00:27:06,937
[Michael Finke]: inflation protected security rates you’re going

565
00:27:06,603 –> 00:27:07,603
[Michael Finke]: that was

566
00:27:06,937 –> 00:27:12,057
[Michael Finke]: to run out of money at about age eighty seven so you’re relying on the stock

567
00:27:12,377 –> 00:27:13,897
[Michael Finke]: portion of your portfolio

568
00:27:15,017 –> 00:27:20,297
[Michael Finke]: drag your investment portfolio beyond the age of eighty seven so that you can

569
00:27:20,457 –> 00:27:25,497
[Michael Finke]: continue to spend four percent after inflation every year but there’s no guarantee

570
00:27:25,497 –> 00:27:28,857
[Michael Finke]: that it is going to do that and it could do that on average but if you get unlucky

571
00:27:28,937 –> 00:27:32,937
[Michael Finke]: the first ten years of retirement you may not have much of an equity portfolio

572
00:27:33,097 –> 00:27:39,497
[Michael Finke]: left so you’re putting a lot of weight on that equity risk premium to provide

573
00:27:39,977 –> 00:27:45,017
[Michael Finke]: safety that it simply cannot by definition provide because risk is real it would

574
00:27:45,177 –> 00:27:47,737
[Michael Finke]: not be compensated again if it weren’t real

575
00:27:50,683 –> 00:27:51,683
[Michael Finke]: you have

576
00:27:53,360 –> 00:27:56,720
[Ramsey Smith]: so uh first of all super commentary

577
00:27:57,760 –> 00:28:02,400
[Ramsey Smith]: i have to say we’ve had i’m just gonna go back quickly to to your comments on

578
00:28:02,480 –> 00:28:05,680
[Ramsey Smith]: social security we’ve talked about it a lot on this show but you’re the first

579
00:28:05,580 –> 00:28:06,580
[Ramsey Smith]: person to

580
00:28:06,523 –> 00:28:07,523
[Michael Finke]: yeah

581
00:28:07,680 –> 00:28:10,560
[Ramsey Smith]: break down the pv benefit sort of

582
00:28:10,580 –> 00:28:11,580
[Paul Tyler]: man

583
00:28:10,683 –> 00:28:11,683
[Michael Finke]: man

584
00:28:11,600 –> 00:28:13,440
[Ramsey Smith]: in those specific tiers that is

585
00:28:14,720 –> 00:28:17,600
[Ramsey Smith]: that is actually very helpful very helpful perspective there

586
00:28:19,920 –> 00:28:24,080
[Ramsey Smith]: so one other one other area that you’ve been focusing on

587
00:28:25,360 –> 00:28:27,680
[Ramsey Smith]: is contingent deferred annuities

588
00:28:28,260 –> 00:28:29,260
[Paul Tyler]: yeah

589
00:28:28,640 –> 00:28:31,840
[Ramsey Smith]: want to hear what your thoughts are on those do you think that that’s something

590
00:28:32,000 –> 00:28:33,040
[Ramsey Smith]: that that should be

591
00:28:34,320 –> 00:28:38,080
[Ramsey Smith]: uh more un offered do you think people are ready for them do you think you think

592
00:28:38,160 –> 00:28:40,640
[Ramsey Smith]: that advisors and consumers will understand them

593
00:28:42,617 –> 00:28:47,577
[Michael Finke]: well let’s say that you have a client and you’re you know you were a strong

594
00:28:47,817 –> 00:28:53,977
[Michael Finke]: adherent in the four percentage rule and the client comes to you and you tell them

595
00:28:54,137 –> 00:28:58,217
[Michael Finke]: that you can withdraw four percent after inflation every year from your investment

596
00:28:58,377 –> 00:29:01,417
[Michael Finke]: portfolio and you’re probably going to be okay and then you say well what does

597
00:29:01,497 –> 00:29:04,937
[Michael Finke]: probably mean well you’ve got a ninety percentage chance of success according to a

598
00:29:04,937 –> 00:29:09,657
[Michael Finke]: monte carlo model that uses historical returns and you say well what if returns

599
00:29:09,737 –> 00:29:10,777
[Michael Finke]: aren’t what they have been

600
00:29:10,763 –> 00:29:11,763
[Michael Finke]: yeah

601
00:29:11,017 –> 00:29:13,897
[Michael Finke]: historically what if we get unlucky what if we end up like japan

602
00:29:15,317 –> 00:29:16,317
[Michael Finke]: will you

603
00:29:17,417 –> 00:29:22,217
[Michael Finke]: provide a backstop will you continue to pay my income if i do what you tell me to

604
00:29:22,297 –> 00:29:25,417
[Michael Finke]: do if i follow the four percent rule and i live to age

605
00:29:25,140 –> 00:29:26,140
[Paul Tyler]: my

606
00:29:25,657 –> 00:29:28,697
[Michael Finke]: ninety and all of a sudden i don’t have any money left

607
00:29:28,980 –> 00:29:29,980
[Paul Tyler]: red

608
00:29:29,083 –> 00:29:30,083
[Michael Finke]: yeah

609
00:29:29,277 –> 00:29:30,277
[Michael Finke]: then

610
00:29:30,857 –> 00:29:36,617
[Michael Finke]: will you continue to send me a check and the advisor will say no i’m not gonna

611
00:29:36,857 –> 00:29:38,297
[Michael Finke]: take that liability and i’m

612
00:29:37,860 –> 00:29:38,860
[Paul Tyler]: i

613
00:29:38,237 –> 00:29:39,237
[Michael Finke]: not going to take that risk

614
00:29:40,617 –> 00:29:45,577
[Michael Finke]: and then the client says well why not you just told me that there was no risk to

615
00:29:45,737 –> 00:29:49,737
[Michael Finke]: following the for four percent rule why are you not willing to follow that up with

616
00:29:50,137 –> 00:29:54,617
[Michael Finke]: some sort of insurance to protect me so that i can feel comfortable spending my

617
00:29:54,697 –> 00:29:58,857
[Michael Finke]: money every year in retirement without the possibility without thinking in the

618
00:29:58,937 –> 00:30:03,497
[Michael Finke]: back of my mind that if i spend too much i could potentially run out of money

619
00:30:03,163 –> 00:30:04,163
[Michael Finke]: she

620
00:30:04,617 –> 00:30:11,177
[Michael Finke]: well that’s what a contingent deferred annuity is it is portfolio income insurance

621
00:30:12,057 –> 00:30:14,937
[Michael Finke]: is the backstop and of course it’s going to cost money

622
00:30:14,523 –> 00:30:15,523
[Michael Finke]: what

623
00:30:15,177 –> 00:30:17,337
[Michael Finke]: because your advisor is not going to give it to you for free

624
00:30:16,900 –> 00:30:17,900
[Paul Tyler]: know

625
00:30:17,517 –> 00:30:18,517
[Michael Finke]: he’s he’s

626
00:30:17,963 –> 00:30:18,963
[Michael Finke]: i

627
00:30:18,377 –> 00:30:23,337
[Michael Finke]: not gonna say he or she is not going to say i will write a check out of my own

628
00:30:23,497 –> 00:30:29,977
[Michael Finke]: account if you run out of money and i will continue to provide that income for you

629
00:30:30,377 –> 00:30:37,897
[Michael Finke]: in retirement now sometimes i hear advisors or advising companies say that the

630
00:30:38,137 –> 00:30:43,017
[Michael Finke]: insurance expense that people pay to provide that backstop is a fee

631
00:30:44,057 –> 00:30:45,977
[Michael Finke]: well it’s not a fee it’s

632
00:30:45,780 –> 00:30:46,780
[Paul Tyler]: what

633
00:30:46,217 –> 00:30:53,577
[Michael Finke]: insurance so you you’re paying for an insurance premium whether it be for a uh for

634
00:30:53,657 –> 00:30:58,777
[Michael Finke]: the cost of receiving a guaranteed minimum withdrawal benefit from your investment

635
00:30:58,937 –> 00:31:03,177
[Michael Finke]: portfolio or this new thing which is a contingent deferred annuity which is

636
00:31:03,337 –> 00:31:06,777
[Michael Finke]: entirely separate from your investment portfolio so you’re managing your

637
00:31:06,937 –> 00:31:10,217
[Michael Finke]: investments but then you have this insurance product that’s tacked onto it that

638
00:31:10,217 –> 00:31:12,377
[Michael Finke]: you’re gonna have to pay a fee for but

639
00:31:12,343 –> 00:31:13,463
[Michael Finke]: what okay

640
00:31:13,497 –> 00:31:19,097
[Michael Finke]: that fee allows you to spend money from your investment portfolio free from the

641
00:31:19,257 –> 00:31:24,697
[Michael Finke]: worry that if markets tank and you live too long you are not going to be able to

642
00:31:24,777 –> 00:31:26,377
[Michael Finke]: maintain your lifestyle

643
00:31:26,603 –> 00:31:27,603
[Michael Finke]: but that

644
00:31:26,937 –> 00:31:30,137
[Michael Finke]: now that’s something that i think as you know someone who comes from the

645
00:31:29,883 –> 00:31:30,883
[Michael Finke]: right

646
00:31:30,077 –> 00:31:31,077
[Michael Finke]: ria community

647
00:31:32,217 –> 00:31:33,577
[Michael Finke]: i didn’t give enough thought to

648
00:31:34,423 –> 00:31:35,863
[Michael Finke]: but you don’t have any

649
00:31:34,457 –> 00:31:38,697
[Michael Finke]: but if you don’t have an answer to that question if you’re not willing to provide

650
00:31:38,777 –> 00:31:43,737
[Michael Finke]: the backstop and if your client wants the backstop then you have to consider

651
00:31:45,017 –> 00:31:50,777
[Michael Finke]: buying portfolio income insurance now it’s not cheap but’s not expensive either

652
00:31:51,817 –> 00:31:56,617
[Michael Finke]: so in the sense that it may not be much more than what you’re charging for asset

653
00:31:56,777 –> 00:32:00,217
[Michael Finke]: center management fees the insurance company is willing to take on that risk what

654
00:32:00,297 –> 00:32:02,617
[Michael Finke]: does the insurance company do will they put the money into

655
00:32:03,817 –> 00:32:08,297
[Michael Finke]: a general account portfolio and safe investments they might buy hedging

656
00:32:09,177 –> 00:32:10,377
[Michael Finke]: instruments they might buy

657
00:32:10,443 –> 00:32:11,443
[Michael Finke]: area

658
00:32:10,777 –> 00:32:14,857
[Michael Finke]: instruments that hedge against equity risk or interest rate swaps but

659
00:32:14,580 –> 00:32:15,580
[Paul Tyler]: yeah

660
00:32:15,417 –> 00:32:20,537
[Michael Finke]: that costs money and it’s going to result in a lower expected wealth over time

661
00:32:20,597 –> 00:32:21,597
[Michael Finke]: just like any

662
00:32:21,220 –> 00:32:22,220
[Paul Tyler]: thank you

663
00:32:21,817 –> 00:32:26,217
[Michael Finke]: insurance product that you buy if you buy homeowners insurance you will have less

664
00:32:26,457 –> 00:32:33,337
[Michael Finke]: wealth over time because you are paying for that pooling risk so that if if your

665
00:32:33,417 –> 00:32:37,497
[Michael Finke]: house burns down then you’re going to get a new home in the same way you’re

666
00:32:37,577 –> 00:32:41,737
[Michael Finke]: pooling risk it results in less wealth over time but you’re getting rid of the

667
00:32:41,737 –> 00:32:46,377
[Michael Finke]: risk of potentially running out and the advantage of that is that even with a

668
00:32:46,537 –> 00:32:51,897
[Michael Finke]: portfolio that includes risky assets that could allow you to spend more so this is

669
00:32:51,977 –> 00:32:58,697
[Michael Finke]: a solution i think for the flexible part of your budget is that yes i’m willing to

670
00:32:58,777 –> 00:33:03,417
[Michael Finke]: take a certain amount of risk but with my flexible expenses i am also not willing

671
00:33:03,497 –> 00:33:04,617
[Michael Finke]: to cut back so much

672
00:33:06,137 –> 00:33:11,977
[Michael Finke]: that i’m not able to enjoy my retirement so that insurance product then provides

673
00:33:12,037 –> 00:33:13,037
[Michael Finke]: that backstop

674
00:33:12,500 –> 00:33:13,500
[Paul Tyler]: the

675
00:33:13,577 –> 00:33:18,377
[Michael Finke]: portfolio income protection now from the perspective of an insurance company this

676
00:33:18,077 –> 00:33:19,077
[Michael Finke]: is actually

677
00:33:19,977 –> 00:33:26,217
[Michael Finke]: not an incredibly onerous insurance product to provide why because it only kicks

678
00:33:26,297 –> 00:33:31,897
[Michael Finke]: in if the person lives too long and markets don’t cooperate and if you’ve hedged

679
00:33:31,977 –> 00:33:35,897
[Michael Finke]: this appropriate appropriately if markets have done really badly then your

680
00:33:36,217 –> 00:33:41,257
[Michael Finke]: portfolio that you’re using to fund this guarantee is actually doing pretty well

681
00:33:41,977 –> 00:33:47,657
[Michael Finke]: so that that’s why you can buy it for a relatively modest cost but the benefit in

682
00:33:47,737 –> 00:33:50,297
[Michael Finke]: terms of lifestyle is enormous

683
00:33:50,363 –> 00:33:51,363
[Michael Finke]: white

684
00:33:50,857 –> 00:33:54,937
[Michael Finke]: i can spend money even if the markets tank i can go out to dinner i can continue

685
00:33:55,177 –> 00:34:00,697
[Michael Finke]: to go on vacations because i know that that backstop protection exists and from

686
00:34:01,097 –> 00:34:05,097
[Michael Finke]: most of us who are in the ra world are trained to believe that this is just sort

687
00:34:05,097 –> 00:34:11,657
[Michael Finke]: of a scam but if it is a scam then are you willing to provide that yourself to a

688
00:34:11,737 –> 00:34:16,297
[Michael Finke]: client are you willing to provide the backstop if they run out of money if not

689
00:34:17,097 –> 00:34:21,817
[Michael Finke]: then you have to consider incorporating this kind of portfolio insurance into your

690
00:34:21,897 –> 00:34:23,177
[Michael Finke]: retirement income plans

691
00:34:24,400 –> 00:34:26,720
[Ramsey Smith]: yeah i look i think that’s a very strong point and

692
00:34:28,240 –> 00:34:34,480
[Ramsey Smith]: i i my view is that financial advisors provide an extraordinarily important

693
00:34:34,800 –> 00:34:36,480
[Ramsey Smith]: service along so many

694
00:34:38,000 –> 00:34:42,880
[Ramsey Smith]: parameters but they don’t necessarily have like that that skin in the game and

695
00:34:42,960 –> 00:34:44,080
[Ramsey Smith]: this is the discussion that

696
00:34:44,860 –> 00:34:45,860
[Ramsey Smith]: that sort of

697
00:34:46,100 –> 00:34:47,100
[Paul Tyler]: me

698
00:34:46,123 –> 00:34:47,123
[Michael Finke]: me

699
00:34:46,560 –> 00:34:49,680
[Ramsey Smith]: puts that puts that at the forefront i mean i imagine it’s

700
00:34:49,803 –> 00:34:50,803
[Michael Finke]: yeah

701
00:34:50,000 –> 00:34:54,000
[Ramsey Smith]: imagine it can be an uncomfortable discussion but i i think it

702
00:34:53,780 –> 00:34:54,780
[Paul Tyler]: that

703
00:34:54,160 –> 00:34:55,440
[Ramsey Smith]: you know over time you know

704
00:34:54,160 –> 00:34:55,440
[Ramsey Smith]: you know over time you know

705
00:34:56,220 –> 00:34:57,220
[Ramsey Smith]: there’s the potential

706
00:34:56,843 –> 00:34:57,843
[Michael Finke]: yeah

707
00:34:57,280 –> 00:35:01,680
[Ramsey Smith]: for it to lead to better write better and more complete solutions for for

708
00:35:01,580 –> 00:35:02,580
[Ramsey Smith]: consumers

709
00:35:04,403 –> 00:35:05,403
[Michael Finke]: yeah i

710
00:35:04,720 –> 00:35:10,560
[Paul Tyler]: yeah i i i i’d actually be interested to know like in my you’ve probably done this

711
00:35:04,720 –> 00:35:10,560
[Paul Tyler]: yeah i i i i’d actually be interested to know like in my you’ve probably done this

712
00:35:06,583 –> 00:35:10,823
[Michael Finke]: i’d actually be interested to know like and my per you’ve probably done this i

713
00:35:10,300 –> 00:35:11,300
[Paul Tyler]: i mean

714
00:35:10,300 –> 00:35:11,300
[Paul Tyler]: i mean

715
00:35:10,443 –> 00:35:11,443
[Michael Finke]: mean

716
00:35:12,720 –> 00:35:18,720
[Paul Tyler]: that product versus an fi a when i’m taking income out you know fifteen twenty

717
00:35:12,743 –> 00:35:16,423
[Michael Finke]: that product versus an fia when i’m taking

718
00:35:16,237 –> 00:35:17,237
[Michael Finke]: cool

719
00:35:16,663 –> 00:35:20,903
[Michael Finke]: income out you know fifteen twenty years from now i mean how does how does it how

720
00:35:18,960 –> 00:35:21,600
[Paul Tyler]: years from now i mean how does it how does it compare

721
00:35:20,803 –> 00:35:21,803
[Michael Finke]: does it compare

722
00:35:23,040 –> 00:35:25,360
[Paul Tyler]: in terms of the income you’d be able to show a client

723
00:35:23,143 –> 00:35:25,383
[Michael Finke]: in terms of the income you’d be able to show a client

724
00:35:26,077 –> 00:35:27,077
[Michael Finke]: so

725
00:35:26,300 –> 00:35:27,300
[Paul Tyler]: i yeah

726
00:35:26,323 –> 00:35:27,323
[Michael Finke]: i yeah

727
00:35:26,323 –> 00:35:27,323
[Michael Finke]: i yeah

728
00:35:27,897 –> 00:35:32,857
[Michael Finke]: yeah um you know one of the benefits of this type of a product is that you get to

729
00:35:33,657 –> 00:35:36,777
[Michael Finke]: capture more of the equity risk premium if

730
00:35:36,340 –> 00:35:37,340
[Paul Tyler]: right

731
00:35:36,363 –> 00:35:37,363
[Michael Finke]: right

732
00:35:36,857 –> 00:35:41,977
[Michael Finke]: you get it that’s why you invest in risky assets is so that if stocks do well then

733
00:35:42,137 –> 00:35:47,337
[Michael Finke]: your portfolio value is going to rise and then your income your guaranteed income

734
00:35:47,417 –> 00:35:50,297
[Michael Finke]: amount can also ratchet up that allows you to spend more and that’s why you take

735
00:35:50,297 –> 00:35:51,497
[Michael Finke]: risk in the first place so that

736
00:35:51,083 –> 00:35:52,083
[Michael Finke]: yes

737
00:35:51,497 –> 00:35:54,217
[Michael Finke]: you could potentially with your flexible expenses you could potentially live

738
00:35:54,217 –> 00:35:58,617
[Michael Finke]: better if stocks do well with a fixed index annuity especially at today’s low

739
00:35:58,777 –> 00:36:03,577
[Michael Finke]: interest rates the budget for your upside is really not that great so it’s really

740
00:36:03,577 –> 00:36:07,657
[Michael Finke]: more of a fixed income like potential for growth whereas this gives you more

741
00:36:07,557 –> 00:36:08,557
[Michael Finke]: upside potential

742
00:36:10,297 –> 00:36:13,337
[Michael Finke]: whereas the downside actually might be a little bit lower than it would be for a

743
00:36:13,237 –> 00:36:14,237
[Michael Finke]: fixed and extra noy

744
00:36:15,580 –> 00:36:16,580
[Paul Tyler]: yeah well

745
00:36:15,683 –> 00:36:16,683
[Michael Finke]: yeah well

746
00:36:17,920 –> 00:36:22,320
[Paul Tyler]: we’re close to the end i just got to have to have to ask you this question you

747
00:36:17,920 –> 00:36:22,320
[Paul Tyler]: we’re close to the end i just got to have to have to ask you this question you

748
00:36:18,023 –> 00:36:19,783
[Michael Finke]: we’re close to the end i i just got

749
00:36:20,763 –> 00:36:21,763
[Michael Finke]: have to ask you

750
00:36:21,277 –> 00:36:22,277
[Michael Finke]: any

751
00:36:21,703 –> 00:36:24,183
[Michael Finke]: this question you know you’ve mentioned a number of your

752
00:36:22,320 –> 00:36:26,240
[Paul Tyler]: know you’ve mentioned a number of your colleagues you’re working with wade we’ve

753
00:36:22,320 –> 00:36:26,240
[Paul Tyler]: know you’ve mentioned a number of your colleagues you’re working with wade we’ve

754
00:36:24,397 –> 00:36:25,397
[Michael Finke]: oh

755
00:36:24,743 –> 00:36:26,903
[Michael Finke]: colleagues you’re working with wade we’ve had on

756
00:36:25,980 –> 00:36:26,980
[Paul Tyler]: had on

757
00:36:25,980 –> 00:36:26,980
[Paul Tyler]: had on

758
00:36:27,840 –> 00:36:33,360
[Paul Tyler]: dave we talked to press and cherry back i guess have been like i don’t know four

759
00:36:27,943 –> 00:36:33,223
[Michael Finke]: dave we talked to press and cherry i guess it must have been like i don’t know

760
00:36:33,303 –> 00:36:38,583
[Michael Finke]: four or five months agogo we discovered texas tech was like somehow a nexus of

761
00:36:33,360 –> 00:36:38,800
[Paul Tyler]: or five months ago we discovered texas tech was like somehow a nexus of people

762
00:36:38,743 –> 00:36:42,423
[Michael Finke]: people doing really interesting work in this space tell us more i mean is there

763
00:36:39,120 –> 00:36:42,560
[Paul Tyler]: doing really interesting work in the space tell us more i mean is there something

764
00:36:42,503 –> 00:36:45,383
[Michael Finke]: something in the water in texas tech michael that just

765
00:36:42,720 –> 00:36:44,720
[Paul Tyler]: in the water in texas tech michael that just

766
00:36:46,380 –> 00:36:47,380
[Paul Tyler]: makes you want

767
00:36:46,443 –> 00:36:47,443
[Michael Finke]: makes you want

768
00:36:46,843 –> 00:36:47,843
[Michael Finke]: to

769
00:36:46,877 –> 00:36:47,877
[Michael Finke]: thank you

770
00:36:48,160 –> 00:36:51,200
[Paul Tyler]: really make a difference in this planning market

771
00:36:48,263 –> 00:36:51,223
[Michael Finke]: really make a difference in this planning market

772
00:36:51,977 –> 00:36:57,497
[Michael Finke]: you know the the credit for texas tech goes back to a guy named bill gustafson and

773
00:36:57,657 –> 00:37:02,537
[Michael Finke]: vicky hampton if you’ve ever heard those names so those two recognized the

774
00:37:03,897 –> 00:37:08,617
[Michael Finke]: importance of the financial planning profession and providing an education to

775
00:37:08,937 –> 00:37:13,817
[Michael Finke]: financial advisors that was high quality and so back in the one thousand nine

776
00:37:13,897 –> 00:37:18,857
[Michael Finke]: hundred ninety seconds they put together this team of experts and they became the

777
00:37:19,097 –> 00:37:23,417
[Michael Finke]: place to go if you wanted a high quality financial planning education and then in

778
00:37:23,577 –> 00:37:28,697
[Michael Finke]: two thousand six i came to texas tech and my job was to lead the phd

779
00:37:28,500 –> 00:37:29,500
[Paul Tyler]: that

780
00:37:28,777 –> 00:37:32,537
[Michael Finke]: program in financial planning and a lot of the people who graduated from that

781
00:37:32,617 –> 00:37:36,377
[Michael Finke]: program are now heads of financial planning programs across the united states

782
00:37:35,963 –> 00:37:36,963
[Michael Finke]: yeah

783
00:37:36,457 –> 00:37:39,657
[Michael Finke]: so the chair of the program at georgia is from texas

784
00:37:40,043 –> 00:37:41,043
[Michael Finke]: yeah

785
00:37:40,217 –> 00:37:42,057
[Michael Finke]: tch kansas state

786
00:37:42,683 –> 00:37:43,683
[Michael Finke]: five

787
00:37:44,057 –> 00:37:47,337
[Michael Finke]: you know utah valley a lot of these smaller programs that really focus on

788
00:37:47,497 –> 00:37:52,537
[Michael Finke]: financial planning they’re texas tech graduates and when it comes to annuitity

789
00:37:53,977 –> 00:38:01,017
[Michael Finke]: this i think receptivity to annuitity came from this idea that you know we’re

790
00:38:01,017 –> 00:38:06,217
[Michael Finke]: economists we read the economic research and for a long time it kind of economists

791
00:38:06,217 –> 00:38:10,217
[Michael Finke]: have been talking about this annuity puzzle this idea that people are not

792
00:38:10,297 –> 00:38:14,777
[Michael Finke]: annuitity izing as much as they should and in financial planning practice you know

793
00:38:14,857 –> 00:38:19,657
[Michael Finke]: there’s this historical split betweens and investments and there’s not a whole lot

794
00:38:19,597 –> 00:38:20,597
[Michael Finke]: of cross pollination

795
00:38:21,897 –> 00:38:26,617
[Michael Finke]: but as economist our job is to try to tell investment advisors how they can

796
00:38:26,777 –> 00:38:32,137
[Michael Finke]: actually be fiduciary and exposing your client to an idiosyncratic risk like the

797
00:38:32,217 –> 00:38:37,177
[Michael Finke]: risk of unknown longevity is not something a fiduciary should do it’s not in the

798
00:38:37,177 –> 00:38:41,737
[Michael Finke]: best interest of a client so we have to then teach them how to do it appropriately

799
00:38:41,737 –> 00:38:45,737
[Michael Finke]: and that’s part of what motivated us to think about what are some of the tradeoffs

800
00:38:45,817 –> 00:38:50,057
[Michael Finke]: between using for example the four percent rule which exposes the client to that

801
00:38:50,137 –> 00:38:54,377
[Michael Finke]: idiosyncratic risk of not knowing how long they’re going to live as opposed to

802
00:38:54,777 –> 00:38:59,337
[Michael Finke]: another strategy that incorporates some combination of annuitity that allows

803
00:38:59,417 –> 00:39:04,377
[Michael Finke]: people to live better in retirement and so that’s really the genesis of a lot of

804
00:39:04,377 –> 00:39:08,537
[Michael Finke]: the research on david blanch had also got his phd at texas tech but he was doing

805
00:39:08,777 –> 00:39:13,977
[Michael Finke]: research on retirement income planning before he came to texas tech waited foul

806
00:39:14,057 –> 00:39:19,257
[Michael Finke]: and i and david have done a lot of research together and really our main purpose

807
00:39:19,277 –> 00:39:20,277
[Michael Finke]: is to

808
00:39:21,337 –> 00:39:22,937
[Michael Finke]: get advisors to understand

809
00:39:23,977 –> 00:39:26,697
[Michael Finke]: when annuities provide value and why they

810
00:39:26,580 –> 00:39:27,580
[Paul Tyler]: that’s true

811
00:39:26,857 –> 00:39:31,417
[Michael Finke]: provide value really how to put together a retirement income plan that does the

812
00:39:31,577 –> 00:39:37,497
[Michael Finke]: best job for your client and then we have obviously faced a lot of opposition

813
00:39:37,737 –> 00:39:40,617
[Michael Finke]: along the way from people who like to believe that

814
00:39:40,603 –> 00:39:41,603
[Michael Finke]: yeah

815
00:39:40,857 –> 00:39:45,817
[Michael Finke]: annu doesn’t actually provide value but the reality is that every economist who

816
00:39:45,897 –> 00:39:47,657
[Michael Finke]: studies retirement income planning has been

817
00:39:47,323 –> 00:39:48,323
[Michael Finke]: yeah

818
00:39:47,817 –> 00:39:51,257
[Michael Finke]: saying for a long time that people are simply don’t anu as much and they could

819
00:39:52,297 –> 00:39:55,897
[Michael Finke]: have be happier in retirement they could spend more they could have more welfare

820
00:39:56,057 –> 00:40:01,097
[Michael Finke]: if they actually annu more of their savings and we just sort of adopted that as

821
00:40:01,177 –> 00:40:02,297
[Michael Finke]: the financial planning researchers

822
00:40:05,680 –> 00:40:10,080
[Ramsey Smith]: fantastic so i think we’re i think we’re at the the top of the hour here it’s been

823
00:40:10,240 –> 00:40:16,800
[Ramsey Smith]: uh been fantastic to have you on michael and uh we would love to have you back on

824
00:40:17,120 –> 00:40:19,360
[Ramsey Smith]: or make you a regular frankly in the

825
00:40:19,140 –> 00:40:20,140
[Ramsey Smith]: coming

826
00:40:19,380 –> 00:40:20,380
[Paul Tyler]: uh hu

827
00:40:19,563 –> 00:40:20,563
[Michael Finke]: hu

828
00:40:19,620 –> 00:40:20,620
[Ramsey Smith]: months and years

829
00:40:21,557 –> 00:40:22,557
[Michael Finke]: well i’d love that

830
00:40:21,763 –> 00:40:22,763
[Michael Finke]: no yeah

831
00:40:21,840 –> 00:40:26,160
[Paul Tyler]: no yeah ab absolutely michael so for listeners out there who want to learn more

832
00:40:22,420 –> 00:40:23,420
[Ramsey Smith]: yeah

833
00:40:22,743 –> 00:40:26,743
[Michael Finke]: ab absolutely michael so for listeners out there want to learn more all your

834
00:40:26,320 –> 00:40:28,480
[Paul Tyler]: follow your research where’s the best place to go

835
00:40:26,823 –> 00:40:28,583
[Michael Finke]: research where’s the best place to go

836
00:40:29,497 –> 00:40:33,737
[Michael Finke]: well i’m a contributing editor forth advisor magazine so once or twice a month

837
00:40:33,897 –> 00:40:37,497
[Michael Finke]: i’ll be writing articles for think advisor you can always follow my research on

838
00:40:37,737 –> 00:40:43,417
[Michael Finke]: social science research network to search ss rn and my name and you’ll find the

839
00:40:43,497 –> 00:40:47,817
[Michael Finke]: articles that i’ve done recently and all the articles that i’ve done in the past

840
00:40:48,560 –> 00:40:52,560
[Paul Tyler]: excellent all right wilson thanks so much for time michael ramsey great to see you

841
00:40:48,663 –> 00:40:52,583
[Michael Finke]: excellent alright wilson thanks so much for time michael ramsay great to see you

842
00:40:52,720 –> 00:40:59,120
[Paul Tyler]: in thai and for those of our listeners join us again next week for another episode

843
00:40:52,743 –> 00:40:58,343
[Michael Finke]: in thai and uh for those of our listeners join us again next week for another

844
00:40:58,663 –> 00:41:00,583
[Michael Finke]: episode of that annuity show

845
00:40:59,280 –> 00:41:00,480
[Paul Tyler]: of that annuity show

846
00:41:04,560 –> 00:41:07,360
[Paul Tyler]: hey thanks that was great michael can you leave your um

847
00:41:08,400 –> 00:41:13,520
[Paul Tyler]: your browser open you’re about halfway uploaded so we’ll end up dropping off but

848
00:41:13,600 –> 00:41:17,920
[Paul Tyler]: just if you just let it let it run that would be great hey ramsay thank that we

849
00:41:18,000 –> 00:41:19,760
[Paul Tyler]: appreciate it this is great to get you on here

850
00:41:22,660 –> 00:41:23,660
[Paul Tyler]: yeah

851
00:41:24,980 –> 00:41:25,980
[Paul Tyler]: well

852
00:41:28,160 –> 00:41:29,200
[Paul Tyler]: for getting you on

853
00:41:34,340 –> 00:41:35,340
[Paul Tyler]: yeah

854
00:41:36,960 –> 00:41:40,640
[Paul Tyler]: yeah and michael just on your last name is it finke if fink

855
00:41:41,760 –> 00:41:47,440
[Paul Tyler]: fina okay german excellent all right hey listen no this is great well i’ll put

856
00:41:47,520 –> 00:41:50,800
[Paul Tyler]: those links in the show outs and anything else you’d think you’d want us to link

857
00:41:50,420 –> 00:41:51,420
[Paul Tyler]: to

858
00:41:52,000 –> 00:41:56,640
[Paul Tyler]: shoot me out and we’ll get it up in the next i think to look out how many weeks

859
00:41:56,640 –> 00:42:00,880
[Paul Tyler]: we’re out it what we’re one or two weeks out right now uh with show but uh good

860
00:42:01,340 –> 00:42:02,340
[Paul Tyler]: alright

861
00:42:03,440 –> 00:42:05,440
[Paul Tyler]: thank you thanks bye

862
00:42:09,520 –> 00:42:11,680
[Paul Tyler]: we call okay great thanks

863
00:42:14,640 –> 00:42:16,720
[Paul Tyler]: we leave it up ts yeah thank you

864
00:42:18,480 –> 00:42:21,520
[Paul Tyler]: uh okay so next is what

865
00:42:25,920 –> 00:42:27,440
[Paul Tyler]: ashley yeah this is really good here

866
00:42:29,220 –> 00:42:30,220
[Paul Tyler]: ha

867
00:42:30,500 –> 00:42:31,500
[Paul Tyler]: lake

868
00:42:39,660 –> 00:42:40,660
[Paul Tyler]: yeah stream key

869
00:42:50,060 –> 00:42:51,060
[Paul Tyler]: right okay

870
00:43:20,960 –> 00:43:22,000
[Paul Tyler]: here are the times

871
00:43:25,280 –> 00:43:26,320
[Paul Tyler]: okay ashley

872
00:43:30,240 –> 00:43:31,280
[Paul Tyler]: hm okay

873
00:43:36,620 –> 00:43:37,620
[Paul Tyler]: hm

874
00:43:41,840 –> 00:43:47,760
[Paul Tyler]: hey ashley oh how you doing you don’t feel it feels like two weeks i’m telling you

875
00:43:48,000 –> 00:43:50,480
[Paul Tyler]: and what we part two

876
00:43:51,060 –> 00:43:52,060
[Paul Tyler]: yeah

877
00:43:53,760 –> 00:43:57,760
[Paul Tyler]: no good good interview with michael finke finke fink

878
00:43:59,040 –> 00:44:03,680
[Paul Tyler]: who who’s a professor at the american college some he you know he’s somebody he

879
00:44:03,760 –> 00:44:09,280
[Paul Tyler]: gets written up all all over he’s a vocal but i don’t know a little stuffy guy i

880
00:44:09,280 –> 00:44:13,120
[Paul Tyler]: don’t know it it was good it was good he’ll be a good name to get on there but

881
00:44:13,680 –> 00:44:17,760
[Paul Tyler]: this guy net you can tell he never deals with clients and he’s been you can tell

882
00:44:17,840 –> 00:44:20,320
[Paul Tyler]: he’s saying the same thing over and over and over and over again

883
00:44:21,920 –> 00:44:25,760
[Paul Tyler]: he’s a te he’s a teacher exactly a teacher

884
00:44:27,600 –> 00:44:34,800
[Paul Tyler]: yeah yeah so fs out yeah and shagging on social media at least oh yeah totally

885
00:44:35,200 –> 00:44:39,040
[Paul Tyler]: okay so hey listen you’re you’re working a lot here let me let me go through my

886
00:44:39,120 –> 00:44:41,360
[Paul Tyler]: list and kind of you tell me what i what i’m missing here

887
00:44:42,260 –> 00:44:43,260
[Paul Tyler]: so

888
00:44:45,580 –> 00:44:46,580
[Paul Tyler]: pull us up

889
00:44:50,580 –> 00:44:51,580
[Paul Tyler]: let’s see

890
00:44:52,980 –> 00:44:53,980
[Paul Tyler]: okay uh

891
00:44:56,000 –> 00:44:57,520
[Paul Tyler]: all right so if i were looking

892
00:44:58,960 –> 00:45:00,720
[Paul Tyler]: backwards and i know i’m missing stuff

893
00:45:05,460 –> 00:45:06,460
[Paul Tyler]: oh yeah let’s see

894
00:45:13,440 –> 00:45:15,360
[Paul Tyler]: make sure i’m like not missing it here

895
00:45:19,600 –> 00:45:23,760
[Paul Tyler]: okay big stuff if i look at and tell me what i’m missing if i if i kind of grouped

896
00:45:23,840 –> 00:45:26,080
[Paul Tyler]: it by like okay fi work

897
00:45:28,320 –> 00:45:29,520
[Paul Tyler]: well writer courses

898
00:45:30,900 –> 00:45:31,900
[Paul Tyler]: writer pages

899
00:45:33,040 –> 00:45:34,720
[Paul Tyler]: the index videos right

900
00:45:35,780 –> 00:45:36,780
[Paul Tyler]: um

901
00:45:37,360 –> 00:45:41,280
[Paul Tyler]: th th were those kind of the big ones i think like if you look back last quarter

902
00:45:42,140 –> 00:45:43,140
[Paul Tyler]: right for

903
00:45:44,480 –> 00:45:48,240
[Paul Tyler]: i would say so i think most of the the time and organization went into those

904
00:45:51,520 –> 00:45:57,120
[Paul Tyler]: y yeah question i’m not sure i have to go back and look the rest of the stuff i

905
00:45:57,200 –> 00:46:00,000
[Paul Tyler]: know there’s a lot of stuff but i’m trying yeah if i’m going to try back and say

906
00:46:00,080 –> 00:46:04,560
[Paul Tyler]: well what did she do well you know listen ashley was played a big role in getting

907
00:46:05,280 –> 00:46:10,800
[Paul Tyler]: all those new products launched and out the door for the fs now i think on med sup

908
00:46:11,200 –> 00:46:16,160
[Paul Tyler]: you’ve been doing a ton there now the ones that kind of leaps out is all the work

909
00:46:16,400 –> 00:46:21,680
[Paul Tyler]: to get all the ads running on meds yeah that was for or for last quarter

910
00:46:22,000 –> 00:46:25,600
[Paul Tyler]: definitely for this past quarter for sure yeah obviously we

911
00:46:27,200 –> 00:46:32,080
[Paul Tyler]: yeah millions right i mean it’s it’s a it’s a it’s a lot of stuff going on but and

912
00:46:32,080 –> 00:46:35,360
[Paul Tyler]: then going back and actually looking through those pages after we got them

913
00:46:35,440 –> 00:46:41,120
[Paul Tyler]: launched now you’ve also done you did a lot for for the content for the app right

914
00:46:41,520 –> 00:46:44,080
[Paul Tyler]: a lot of the content development work for our

915
00:46:45,680 –> 00:46:49,520
[Paul Tyler]: and development part management and the app kind of going back and forth between

916
00:46:49,760 –> 00:46:53,360
[Paul Tyler]: systems and loading everything and organizing with nick how to update the website

917
00:46:53,420 –> 00:46:54,420
[Paul Tyler]: right to reflect

918
00:46:55,760 –> 00:47:00,640
[Paul Tyler]: yeah yeah that was that was big um and the other one was i think which is a good

919
00:47:00,800 –> 00:47:04,080
[Paul Tyler]: one and probably it probably didn’t take you that much time but it was i think

920
00:47:04,080 –> 00:47:08,160
[Paul Tyler]: it’s good for time just to see doing that stuff is you know pulling those pages

921
00:47:08,240 –> 00:47:09,360
[Paul Tyler]: apart and

922
00:47:10,720 –> 00:47:14,400
[Paul Tyler]: on sales net it seemed like okay how do you tell a story about going from here to

923
00:47:14,560 –> 00:47:19,120
[Paul Tyler]: here to there so i think that’s the bit you like right are we missing anything now

924
00:47:19,680 –> 00:47:23,920
[Paul Tyler]: you did a lot with salesforce but there’s still kind of stuff in flight there um

925
00:47:25,600 –> 00:47:29,440
[Paul Tyler]: yeah a lot of building of reports and organizing things tesa and i are going to

926
00:47:29,520 –> 00:47:34,000
[Paul Tyler]: have a call with them this week to renew our package for next year and ask a

927
00:47:33,820 –> 00:47:34,820
[Paul Tyler]: couple of questions

928
00:47:35,760 –> 00:47:40,240
[Paul Tyler]: yeah right i mean you got all the reimagined contacts in there right that was a

929
00:47:40,320 –> 00:47:44,880
[Paul Tyler]: big deal we had all the um update elite stuff in we had all the reimagined

930
00:47:44,880 –> 00:47:49,520
[Paul Tyler]: contacts too we added all the simple annuity and red agent information that we

931
00:47:49,680 –> 00:47:56,160
[Paul Tyler]: have and organize that um i think those are the good paths they list close yeah

932
00:48:05,680 –> 00:48:10,960
[Paul Tyler]: and the f stuff kind of being part of that oh yeah yeah yeah let me not it is a

933
00:48:11,040 –> 00:48:14,480
[Paul Tyler]: problem it’s like this action i mean this year i’m swear i’m keeping these lists

934
00:48:14,540 –> 00:48:15,540
[Paul Tyler]: so that it’s

935
00:48:16,880 –> 00:48:18,480
[Paul Tyler]: easy through the course of the year here

936
00:48:20,960 –> 00:48:24,800
[Paul Tyler]: it is as we talk about it more stuff is popping up in my mind so i’m like yeah i

937
00:48:24,800 –> 00:48:28,000
[Paul Tyler]: guess yeah it just not like you’re you know it’s not like the score points however

938
00:48:28,160 –> 00:48:29,920
[Paul Tyler]: it’s great to be able to look back and say

939
00:48:30,500 –> 00:48:31,500
[Paul Tyler]: okay

940
00:48:32,720 –> 00:48:37,760
[Paul Tyler]: w you know we just sit on our butts for accomplishments to yeah

941
00:48:40,640 –> 00:48:43,280
[Paul Tyler]: yeah five nine implementation and that was

942
00:48:47,680 –> 00:48:51,920
[Paul Tyler]: that was mary mary was mary was really involved in that one too right as what’s

943
00:48:52,000 –> 00:48:56,720
[Paul Tyler]: tea she really drove it and then he’s a kind of like handled it from the back end

944
00:48:57,840 –> 00:49:03,040
[Paul Tyler]: yeah all the calls but mary i think was kind of put together yeah okay so that’s

945
00:49:02,860 –> 00:49:03,860
[Paul Tyler]: good so that

946
00:49:04,720 –> 00:49:08,320
[Paul Tyler]: if you think either stuff tell me because i think it’s great to kind of what you

947
00:49:08,400 –> 00:49:10,080
[Paul Tyler]: know what i do right was big

948
00:49:12,480 –> 00:49:17,280
[Paul Tyler]: i think um now in progress oh my gosh okay let’s let’s kind of go through this so

949
00:49:18,180 –> 00:49:19,180
[Paul Tyler]: um

950
00:49:20,160 –> 00:49:22,320
[Paul Tyler]: this is not an order this is just how it’s sorted

951
00:49:23,680 –> 00:49:27,120
[Paul Tyler]: okay triathlon that thing’s kind of going when i’m moving along right with

952
00:49:28,720 –> 00:49:35,360
[Paul Tyler]: you and jessica yeah for that for our ordering a braided items and or where it’s

953
00:49:35,440 –> 00:49:36,800
[Paul Tyler]: coming from reasonable

954
00:49:38,320 –> 00:49:41,600
[Paul Tyler]: okay i’m getting pricing on snow fencing and other manners of

955
00:49:43,280 –> 00:49:45,600
[Paul Tyler]: yeah you know what i would do is see if you could

956
00:49:47,840 –> 00:49:52,320
[Paul Tyler]: see if neal could be there for photos why are you why do you why don’t you book

957
00:49:52,140 –> 00:49:53,140
[Paul Tyler]: him now

958
00:49:54,860 –> 00:49:55,860
[Paul Tyler]: let’s do that

959
00:50:00,180 –> 00:50:01,180
[Paul Tyler]: i think

960
00:50:02,320 –> 00:50:07,520
[Paul Tyler]: can you put something together for mark i think there’s the triathlon uh i think

961
00:50:07,300 –> 00:50:08,300
[Paul Tyler]: there’s a

962
00:50:08,820 –> 00:50:09,820
[Paul Tyler]: yeah i

963
00:50:10,480 –> 00:50:12,640
[Paul Tyler]: for sale for sales people yeah i think um

964
00:50:13,540 –> 00:50:14,540
[Paul Tyler]: day

965
00:50:16,480 –> 00:50:19,440
[Paul Tyler]: yeah it just something that he could kind of

966
00:50:20,480 –> 00:50:25,280
[Paul Tyler]: send to people to say what what the heck is this i’ve got a starter page for you

967
00:50:25,520 –> 00:50:29,360
[Paul Tyler]: feel free to start from scratch right that was one that just kind of put out there

968
00:50:32,880 –> 00:50:36,800
[Paul Tyler]: okay grow together deck we gotta wait for tom mark was actually asking for us

969
00:50:37,600 –> 00:50:40,320
[Paul Tyler]: that’s kind of out there annuity genius

970
00:50:40,900 –> 00:50:41,900
[Paul Tyler]: piece

971
00:50:43,280 –> 00:50:47,200
[Paul Tyler]: you just need to know like when can we cancel are we hooked into this thing

972
00:50:47,060 –> 00:50:48,060
[Paul Tyler]: forever

973
00:50:48,800 –> 00:50:52,080
[Paul Tyler]: i asked her in the mail yesterday and i said we’d like to consider a three month

974
00:50:52,140 –> 00:50:53,140
[Paul Tyler]: contract i want to

975
00:50:53,940 –> 00:50:54,940
[Paul Tyler]: okay

976
00:50:58,560 –> 00:51:04,480
[Paul Tyler]: so you know suffer for snub on your end is personalized agendas and then has colin

977
00:51:04,560 –> 00:51:08,720
[Paul Tyler]: given you any sort of run a show yet to figure out like what are you doing when no

978
00:51:08,960 –> 00:51:13,520
[Paul Tyler]: so she said that mary’s creating it the contractor is gonna create it and send it

979
00:51:13,600 –> 00:51:15,360
[Paul Tyler]: to us but i haven’t seen anything so i

980
00:51:16,560 –> 00:51:19,600
[Paul Tyler]: yeah just to ask her because i i don’t want you to go down there and feel like

981
00:51:19,600 –> 00:51:25,040
[Paul Tyler]: you’re sitting on your hands or worse you you’ve you kind of jumping around at

982
00:51:25,120 –> 00:51:30,080
[Paul Tyler]: last second to do stuff right enough either way is fine i mean i i don’t think’ll

983
00:51:30,080 –> 00:51:33,520
[Paul Tyler]: be sitting around cause there’s less staff now this time around than there wasn’t

984
00:51:33,680 –> 00:51:37,040
[Paul Tyler]: noa and yeah i think she wants us to drive people around

985
00:51:38,320 –> 00:51:41,040
[Paul Tyler]: i think that’s going to be part of like a big part of what we’re doing is like

986
00:51:41,120 –> 00:51:44,160
[Paul Tyler]: golf caring people okay so stay

987
00:51:45,200 –> 00:51:46,480
[Paul Tyler]: do we have insurance for that

988
00:51:48,140 –> 00:51:49,140
[Paul Tyler]: it’s a good question

989
00:51:50,240 –> 00:51:51,440
[Paul Tyler]: yeah seriously right

990
00:51:52,640 –> 00:51:55,760
[Paul Tyler]: so i think you ask because if we start to shuttle people around

991
00:51:57,600 –> 00:52:01,040
[Paul Tyler]: okay somebody falls off a golf cart somebody gets hit by a golf cart

992
00:52:02,720 –> 00:52:08,320
[Paul Tyler]: the resort yeah i don’t want to see you personally right right wrong

993
00:52:09,360 –> 00:52:12,880
[Paul Tyler]: i mean i probably it prob it would probably fall on her scope right

994
00:52:14,320 –> 00:52:19,600
[Paul Tyler]: it probably is in shared with the event um but i don’t know yeah because there’s a

995
00:52:19,680 –> 00:52:22,160
[Paul Tyler]: reason why people at companies aren’t driving people around

996
00:52:23,920 –> 00:52:25,360
[Paul Tyler]: okay we be hire companies

997
00:52:26,640 –> 00:52:27,840
[Paul Tyler]: yeah yeah okay

998
00:52:29,700 –> 00:52:30,700
[Paul Tyler]: so okay

999
00:52:31,420 –> 00:52:32,420
[Paul Tyler]: personalized stuff

1000
00:52:33,840 –> 00:52:37,600
[Paul Tyler]: now i think the ones where i think you know the big impact okay

1001
00:52:38,640 –> 00:52:43,360
[Paul Tyler]: chat usage by elites this is going to be good i think the bigger salesforce stuff

1002
00:52:43,760 –> 00:52:48,320
[Paul Tyler]: is a big deal like i think that elite scoreboard i i’m calling it elite score

1003
00:52:48,400 –> 00:52:49,600
[Paul Tyler]: board in salesforce

1004
00:52:50,260 –> 00:52:51,260
[Paul Tyler]: um

1005
00:52:52,640 –> 00:52:56,560
[Paul Tyler]: uh when do you think you’re i’m sorry i keep asking so is it ended this week

1006
00:52:56,720 –> 00:53:01,680
[Paul Tyler]: they’re giving you data um ask for it by monday so we could do the first up monday

1007
00:53:01,680 –> 00:53:04,080
[Paul Tyler]: scott’s right back he’s at the office oh good

1008
00:53:04,740 –> 00:53:05,740
[Paul Tyler]: okay

1009
00:53:07,340 –> 00:53:08,340
[Paul Tyler]: that’s right

1010
00:53:09,200 –> 00:53:10,960
[Paul Tyler]: so yeah don’t worry

1011
00:53:11,620 –> 00:53:12,620
[Paul Tyler]: i think

1012
00:53:15,140 –> 00:53:16,140
[Paul Tyler]: let’s see

1013
00:53:17,600 –> 00:53:20,560
[Paul Tyler]: i think we’re in a good place though with the fields and i think he can do it all

1014
00:53:20,720 –> 00:53:24,960
[Paul Tyler]: it’s not i don’t think there’s is any issue in him mapping those skills okay all

1015
00:53:24,580 –> 00:53:25,580
[Paul Tyler]: right

1016
00:53:25,780 –> 00:53:26,780
[Paul Tyler]: um

1017
00:53:27,680 –> 00:53:32,720
[Paul Tyler]: did you see sorry back to the live chat thing you see the facebook messenger yeah

1018
00:53:32,880 –> 00:53:36,720
[Paul Tyler]: that it was great because i actually it started pop up and i think i think it gave

1019
00:53:36,720 –> 00:53:42,240
[Paul Tyler]: me a a two like a like some initial chat thing coming through there but it was

1020
00:53:42,400 –> 00:53:45,520
[Paul Tyler]: great i responded she went back through facebook

1021
00:53:47,220 –> 00:53:48,220
[Paul Tyler]: no

1022
00:53:49,600 –> 00:53:50,640
[Paul Tyler]: yeah no i yeah

1023
00:53:52,320 –> 00:53:53,680
[Paul Tyler]: yeah i think this was really good

1024
00:53:56,080 –> 00:54:00,960
[Paul Tyler]: again chat the reason i’m kind of walking through this elite and chat is going to

1025
00:54:00,960 –> 00:54:04,800
[Paul Tyler]: be really important for how do we engage these people in sort of an automated

1026
00:54:04,960 –> 00:54:08,880
[Paul Tyler]: fashion and that this will link the phone calls to the notes to the whatever so we

1027
00:54:09,120 –> 00:54:12,160
[Paul Tyler]: really you know get to know these people and

1028
00:54:16,080 –> 00:54:19,920
[Paul Tyler]: you know how do you turn into advisor for these elites right thats you know hey

1029
00:54:20,000 –> 00:54:23,840
[Paul Tyler]: i’m calling up ashley because she needs help with this stuff like i i’ll go back

1030
00:54:24,080 –> 00:54:27,120
[Paul Tyler]: to chris and give him a call and say he how’s everything going i’ll probably call

1031
00:54:27,200 –> 00:54:32,320
[Paul Tyler]: him the next next four or five days oh ashley’s great she does this she knows my

1032
00:54:32,020 –> 00:54:33,020
[Paul Tyler]: stuff

1033
00:54:36,880 –> 00:54:41,440
[Paul Tyler]: that will be i think that this will be a really good experience for you right if

1034
00:54:41,520 –> 00:54:44,960
[Paul Tyler]: you can sort of become the consult not the person’s doing it but the consult

1035
00:54:46,000 –> 00:54:50,400
[Paul Tyler]: but you know it’s a fine line between here’s the destruction manual versus i’m

1036
00:54:50,480 –> 00:54:53,360
[Paul Tyler]: actually going in and doing your phot post w where’s that

1037
00:54:54,400 –> 00:54:57,520
[Paul Tyler]: yeah there’s always a little bit of a healthy hand or at least willingness right

1038
00:54:57,260 –> 00:54:58,260
[Paul Tyler]: like you

1039
00:55:00,880 –> 00:55:03,120
[Paul Tyler]: yeah yeah so that’s that’s really good

1040
00:55:04,480 –> 00:55:08,480
[Paul Tyler]: now in terms of i don’t have the stuff on here it feels like you’re really

1041
00:55:08,640 –> 00:55:13,600
[Paul Tyler]: enjoying these podcast promotional stuff right went into riverside last night i

1042
00:55:13,760 –> 00:55:16,480
[Paul Tyler]: played around a little bit with the clips and i like redid the layouts and stuff

1043
00:55:16,800 –> 00:55:19,920
[Paul Tyler]: myself so i that was fun okay good good i’m

1044
00:55:20,900 –> 00:55:21,900
[Paul Tyler]: okay good

1045
00:55:22,880 –> 00:55:26,640
[Paul Tyler]: now i’m kind of excited about i think this will be good too for you to launch this

1046
00:55:26,720 –> 00:55:31,280
[Paul Tyler]: med sup piece frank’s going to come up here i want to work i want to work a little

1047
00:55:31,360 –> 00:55:35,920
[Paul Tyler]: more on that logo i kind of look at it it just feels a little too drab

1048
00:55:37,040 –> 00:55:39,280
[Paul Tyler]: yeah what does it feel like old

1049
00:55:40,140 –> 00:55:41,140
[Paul Tyler]: yes it does

1050
00:55:42,100 –> 00:55:43,100
[Paul Tyler]: i’m

1051
00:55:44,240 –> 00:55:47,760
[Paul Tyler]: some of the stuff that i heard in that social media examiner podcast was like the

1052
00:55:47,840 –> 00:55:52,720
[Paul Tyler]: trends and the upcoming trends are we use neons but brighter colors and things

1053
00:55:53,680 –> 00:55:57,280
[Paul Tyler]: well yeah and i’m gonna have freak like i looked at those color palettes and

1054
00:55:59,040 –> 00:56:02,720
[Paul Tyler]: you know i’ve been watching all these drug commercials like o tesla i can almost

1055
00:56:02,800 –> 00:56:08,240
[Paul Tyler]: say sing the o tesla commercial now hot you know ro zamak

1056
00:56:09,920 –> 00:56:14,560
[Paul Tyler]: but you know they’re all like real neon purple green blue and i think if frank

1057
00:56:14,640 –> 00:56:17,680
[Paul Tyler]: just tuned those colors up i think what i’m gonna do is have him i’m gonna have

1058
00:56:17,680 –> 00:56:22,000
[Paul Tyler]: him up here work through what the how to make sure the graphics are all kind of

1059
00:56:22,080 –> 00:56:25,760
[Paul Tyler]: set up but i think i’m going to have him tune those colors up a little more take

1060
00:56:25,840 –> 00:56:30,160
[Paul Tyler]: the hues up so we have a gray one but let’s take it up i agree with you we need

1061
00:56:29,940 –> 00:56:30,940
[Paul Tyler]: more of a

1062
00:56:31,660 –> 00:56:32,660
[Paul Tyler]: it seems like a very

1063
00:56:34,080 –> 00:56:38,880
[Paul Tyler]: yeah it’s too i don’t know it’s different it’ll definitely look different than

1064
00:56:39,040 –> 00:56:43,520
[Paul Tyler]: anything else that’s on the yeah yeah and it’s legible and i think it’ll appeal to

1065
00:56:43,600 –> 00:56:45,840
[Paul Tyler]: end and i think we can animate some of those characters

1066
00:56:46,420 –> 00:56:47,420
[Paul Tyler]: so

1067
00:56:48,400 –> 00:56:53,280
[Paul Tyler]: how what’s her name jessica ho her down i haven’t seen any emails come back let’s

1068
00:56:53,280 –> 00:56:58,240
[Paul Tyler]: see an emailer today to reach out towar and see kind of touch base introduce

1069
00:56:58,320 –> 00:57:01,920
[Paul Tyler]: yourself find out about the speakers yeah find find out where we are

1070
00:57:02,980 –> 00:57:03,980
[Paul Tyler]: now

1071
00:57:05,280 –> 00:57:06,640
[Paul Tyler]: we line them up i think

1072
00:57:07,620 –> 00:57:08,620
[Paul Tyler]: um

1073
00:57:09,840 –> 00:57:13,840
[Paul Tyler]: you know if we could telling actually if we could lock them all up in a week we

1074
00:57:13,920 –> 00:57:18,800
[Paul Tyler]: could bundle them up say ten of them and that could be our initial launch you know

1075
00:57:19,120 –> 00:57:25,200
[Paul Tyler]: for you know we load three or four and then push out a couple others later i don’t

1076
00:57:25,200 –> 00:57:29,440
[Paul Tyler]: know think about what that launch may be because we could do this all probably in

1077
00:57:29,520 –> 00:57:34,000
[Paul Tyler]: one set and push it up there you want to do the podcast release weekly or you do

1078
00:57:34,080 –> 00:57:38,480
[Paul Tyler]: it by week i don’t know i would think so sometimes when they i i think you talked

1079
00:57:38,480 –> 00:57:41,040
[Paul Tyler]: to jessica about how they will push and promote it

1080
00:57:42,880 –> 00:57:47,040
[Paul Tyler]: but when we apply for you know apple and stuff to get in there there’s a process

1081
00:57:47,360 –> 00:57:50,400
[Paul Tyler]: it’s super easy and lets them to sort of set up a new podcast

1082
00:57:51,680 –> 00:57:56,320
[Paul Tyler]: however i didn’t actually do the approval process for apple so it’s kind of like

1083
00:57:56,400 –> 00:58:00,960
[Paul Tyler]: you have to put it all together and then apply to apple to be listed and i have

1084
00:58:01,040 –> 00:58:04,400
[Paul Tyler]: not if you could kind of investigate that that is what we paid this other firm to

1085
00:58:04,480 –> 00:58:07,760
[Paul Tyler]: do for us you know and we used them once yeah

1086
00:58:08,800 –> 00:58:11,360
[Paul Tyler]: yeah that different versus

1087
00:58:13,600 –> 00:58:17,120
[Paul Tyler]: yeah yeah yeah it’s it’s different but it’s similar because you have to get listed

1088
00:58:17,280 –> 00:58:20,800
[Paul Tyler]: i’m not sure if they need five episodes or six episodes they just kind of want i

1089
00:58:21,040 –> 00:58:23,120
[Paul Tyler]: think they listen or screen through and say are you

1090
00:58:24,720 –> 00:58:27,280
[Paul Tyler]: doing anything offensive for something

1091
00:58:30,320 –> 00:58:35,520
[Paul Tyler]: yeah yeah so and then let’s figure out like is this a one time thing or you know

1092
00:58:35,680 –> 00:58:38,800
[Paul Tyler]: does it keep going oh guess what speak of the devil j

1093
00:58:39,920 –> 00:58:42,640
[Paul Tyler]: jw trub just sent an email through it jay says

1094
00:58:44,820 –> 00:58:45,820
[Paul Tyler]: hey

1095
00:58:46,640 –> 00:58:48,080
[Paul Tyler]: inclusive of age tech

1096
00:58:51,200 –> 00:58:53,120
[Paul Tyler]: wanna see if we align this with the event

1097
00:58:59,900 –> 00:59:00,900
[Paul Tyler]: like innovation st

1098
00:59:02,160 –> 00:59:04,720
[Paul Tyler]: yeah a little broader and then like line it up there

1099
00:59:06,000 –> 00:59:07,520
[Paul Tyler]: yeah do you want let’s see

1100
00:59:09,360 –> 00:59:11,440
[Paul Tyler]: sure like like i think the answer is

1101
00:59:13,280 –> 00:59:17,120
[Paul Tyler]: meds up if we get line with this event you don’t have to by any account

1102
00:59:19,680 –> 00:59:20,880
[Paul Tyler]: yeah absolutely

1103
00:59:22,400 –> 00:59:24,960
[Paul Tyler]: absolutely um absolutely how closely

1104
00:59:26,420 –> 00:59:27,420
[Paul Tyler]: absolutely

1105
00:59:30,080 –> 00:59:32,000
[Paul Tyler]: how closely would you want want it

1106
00:59:34,880 –> 00:59:37,360
[Paul Tyler]: how closely would you want this

1107
00:59:39,360 –> 00:59:42,000
[Paul Tyler]: to a lot to align with your event you know

1108
00:59:44,320 –> 00:59:45,440
[Paul Tyler]: you know i eat you know

1109
00:59:47,460 –> 00:59:48,460
[Paul Tyler]: levels

1110
00:59:49,980 –> 00:59:50,980
[Paul Tyler]: could be

1111
00:59:51,900 –> 00:59:52,900
[Paul Tyler]: you know

1112
00:59:53,580 –> 00:59:54,580
[Paul Tyler]: colors

1113
00:59:55,680 –> 01:00:00,800
[Paul Tyler]: um is us a really nice yeah inclusion you know you know i’d say cut your e you

1114
01:00:00,340 –> 01:00:01,340
[Paul Tyler]: know

1115
01:00:02,560 –> 01:00:04,960
[Paul Tyler]: your color palate around that n

1116
01:00:06,960 –> 01:00:08,880
[Paul Tyler]: you know include you know your you know

1117
01:00:09,620 –> 01:00:10,620
[Paul Tyler]: and

1118
01:00:15,380 –> 01:00:16,380
[Paul Tyler]: mediterranean name

1119
01:00:17,860 –> 01:00:18,860
[Paul Tyler]: mediterranean

1120
01:00:21,620 –> 01:00:22,620
[Paul Tyler]: name

1121
01:00:23,600 –> 01:00:24,880
[Paul Tyler]: include your medicare name

1122
01:00:27,140 –> 01:00:28,140
[Paul Tyler]: in the show

1123
01:00:34,080 –> 01:00:35,920
[Paul Tyler]: like it in the right end or in the reader

1124
01:00:37,580 –> 01:00:38,580
[Paul Tyler]: yeah um

1125
01:00:39,820 –> 01:00:40,820
[Paul Tyler]: you know partnership

1126
01:00:45,060 –> 01:00:46,060
[Paul Tyler]: eight

1127
01:00:52,720 –> 01:00:57,280
[Paul Tyler]: i checked him out on linkedin that looks like he’s like the entrepreneur oh he is

1128
01:00:59,420 –> 01:01:00,420
[Paul Tyler]: happy to

1129
01:01:01,440 –> 01:01:04,400
[Paul Tyler]: email s name too quick zoom

1130
01:01:08,560 –> 01:01:11,760
[Paul Tyler]: yeah so when you can you cook start looking at page check

1131
01:01:13,060 –> 01:01:14,060
[Paul Tyler]: a check

1132
01:01:14,880 –> 01:01:18,800
[Paul Tyler]: might be a nice tian you to re imagine it could be it it really could it really

1133
01:01:18,960 –> 01:01:20,400
[Paul Tyler]: could here so um

1134
01:01:22,080 –> 01:01:24,800
[Paul Tyler]: so so we have to think like let’s see what the answer is but there’s like is the

1135
01:01:24,880 –> 01:01:27,040
[Paul Tyler]: age tech or is it you know

1136
01:01:31,020 –> 01:01:32,020
[Paul Tyler]: health and

1137
01:01:33,780 –> 01:01:34,780
[Paul Tyler]: senior health

1138
01:01:36,300 –> 01:01:37,300
[Paul Tyler]: yeah yeah

1139
01:01:38,400 –> 01:01:43,200
[Paul Tyler]: to see home age tax sounds better i’d rather oh i do a senior health care podcast

1140
01:01:46,800 –> 01:01:49,040
[Paul Tyler]: right yeah no i agree yeah

1141
01:01:50,320 –> 01:01:53,200
[Paul Tyler]: um okay i’ll do some research around that yeah

1142
01:01:56,720 –> 01:01:59,840
[Paul Tyler]: because it could be just a limited thing man we’re just doing it this i’m looking

1143
01:02:00,000 –> 01:02:02,080
[Paul Tyler]: at this is like get us in the door with these people

1144
01:02:03,100 –> 01:02:04,100
[Paul Tyler]: absolutely

1145
01:02:05,260 –> 01:02:06,260
[Paul Tyler]: alright

1146
01:02:08,320 –> 01:02:13,360
[Paul Tyler]: let’s see oh for he kudos to you for taking these courses ashley i wish everybody

1147
01:02:13,680 –> 01:02:15,120
[Paul Tyler]: were doing what you’re doing okay

1148
01:02:16,400 –> 01:02:20,640
[Paul Tyler]: um i i would like you to take people through that write up that you did on the um

1149
01:02:20,800 –> 01:02:24,480
[Paul Tyler]: social media examiner thing what was your like what were the big like you know the

1150
01:02:24,560 –> 01:02:28,640
[Paul Tyler]: things you say i’m like we should be doing you know x y and z like what’s the

1151
01:02:28,960 –> 01:02:32,720
[Paul Tyler]: what’s the we’re doing the lot of it i think’s room for enhancement in a lot of

1152
01:02:32,800 –> 01:02:35,600
[Paul Tyler]: what we’re doing so like the things that really stuck out to me obviously videos

1153
01:02:36,000 –> 01:02:41,920
[Paul Tyler]: came so yeah look for the short short form video is a big deal clearly through tip

1154
01:02:42,080 –> 01:02:46,080
[Paul Tyler]: top and instagram because that’s the way like the whole world is working so they

1155
01:02:46,320 –> 01:02:48,160
[Paul Tyler]: talked about trends that they’re seeing in

1156
01:02:49,360 –> 01:02:53,600
[Paul Tyler]: like when instagram releases things or facebook meta releases things

1157
01:02:54,800 –> 01:02:59,280
[Paul Tyler]: be clues about what they’re looking for right um video is a huge one so they’re

1158
01:02:59,280 –> 01:03:03,680
[Paul Tyler]: moving away from picture towards video the other thing i thought was interesting

1159
01:03:03,920 –> 01:03:05,600
[Paul Tyler]: was they didn’t mention twitter at all

1160
01:03:06,640 –> 01:03:10,800
[Paul Tyler]: yeah there was one word about not one session about twitter

1161
01:03:12,240 –> 01:03:15,440
[Paul Tyler]: that was super interesting they did talk about long form video coming back on

1162
01:03:15,520 –> 01:03:18,800
[Paul Tyler]: youtube and how to kind of work around that and what to do there

1163
01:03:19,700 –> 01:03:20,700
[Paul Tyler]: um

1164
01:03:22,800 –> 01:03:25,200
[Paul Tyler]: you know it was huge that was like the big big takeaway

1165
01:03:27,600 –> 01:03:29,840
[Paul Tyler]: current parent making yourself trustworthy right

1166
01:03:30,880 –> 01:03:34,160
[Paul Tyler]: things that we don’t understand just made very clear

1167
01:03:35,920 –> 01:03:40,720
[Paul Tyler]: right so i i i guess the qu you know the question i was struggle with is okay how

1168
01:03:40,800 –> 01:03:43,920
[Paul Tyler]: much of this is you know do we do this for the consumer

1169
01:03:45,280 –> 01:03:50,720
[Paul Tyler]: versus how much it is for the agent and we you know for the community we tie into

1170
01:03:51,520 –> 01:03:55,040
[Paul Tyler]: right absolutely go for an instagram we need an instagram account for our company

1171
01:03:57,120 –> 01:04:01,360
[Paul Tyler]: to you so i started setting it up this morning do you wanna go with a user name

1172
01:04:01,680 –> 01:04:05,040
[Paul Tyler]: nasa financial group or would you like to go if user named nasa careers

1173
01:04:07,120 –> 01:04:10,400
[Paul Tyler]: i thought that an group is what we use on everything else even though we’re not

1174
01:04:10,540 –> 01:04:11,540
[Paul Tyler]: like we go

1175
01:04:12,720 –> 01:04:16,960
[Paul Tyler]: oh i know and then and then fi and phil wants somehow has got this nasa annuities

1176
01:04:17,100 –> 01:04:18,100
[Paul Tyler]: in his head right

1177
01:04:20,000 –> 01:04:21,840
[Paul Tyler]: which is terrifying to me but that’s okay

1178
01:04:26,140 –> 01:04:27,140
[Paul Tyler]: yeah um

1179
01:04:28,720 –> 01:04:31,280
[Paul Tyler]: the only worry i have about care is is

1180
01:04:32,480 –> 01:04:36,880
[Paul Tyler]: it feels like i you know i i don’t want to get us in the hook of its you know

1181
01:04:40,480 –> 01:04:43,760
[Paul Tyler]: because i remember when this popped up i think it’s popped up right around the the

1182
01:04:43,840 –> 01:04:49,120
[Paul Tyler]: pandemic a little bit before when everybody’s using a hashtag travelers cares

1183
01:04:51,200 –> 01:04:54,000
[Paul Tyler]: i didn’t know about that yeah yeah like i think

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

Ashley SaundersEpisode 145: Diving Deep into the Power of Annuities With Michael Finke
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