11.11.22: Audio automatically transcribed by Sonix

11.11.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
This is Another Money Show. Get set for another hour of the latest financial information and economic news affecting your bottom line. J.R. and Anthony are committed to helping more Americans like you optimize their income, reduce their tax risk, and reach financial freedom. So let's start the show. Here are your hosts, Anthony Carrao and J.R. Rotchford.

Anthony Carrao:
Welcome to another episode of Another Money Show. We are your hosts, Anthony Carrao and J.R. Rotchford taking a break from our day-to-day as financial advisors with Rotchford and Associates, a fully independent fourth-generation family practice in the greater Phoenix area. And we are having this radio show to bring you some information you may not hear on those other money talk shows. The last thing you need is Another Money Show to listen to. But we appreciate you being here. Today's episode, we're really going to get into self funding pensions. We talked about it last week. We're going to spend a lot of time on that. We got some giveaways for you, some movies, some books, hopefully a decent, entertaining show today. But first, J.R. wants to lead us off with some thoughts of his.

J.R. Rotchford:
You know, I always have a few thoughts to add. The good thing about our show, you know, when you say the last thing you need is another financial show. We listen to a lot of different financial shows and they're good. I mean, I really I've got I can't really slam any of them.

Anthony Carrao:
Is that really what you say off air, though?

J.R. Rotchford:
Jim, cricket. Don't leave us with dead air. Make sure you put a credit.

Anthony Carrao:
Line to our listeners. Don't lie.

Producer:
Crickets will be going in, in post-production, I promise.

J.R. Rotchford:
No, I really do enjoy what I listen to. There's. There's a couple of things that bother me. I mean, you know that we have decided to keep this a family practice. You know, I worked for a couple of big broker houses, the wirehouse or whatever you call them. I mean, I've had a history of doing some work where I had pressure and quotas, and it just it didn't seem right. I've always thought if you're handling somebody's health or their money, you should be extra careful. I mean, this practice has been run like a fiduciary practice way before the word fiduciary came into financial planning. You know, that was under President Obama. That was a relatively new term in my career here. And you aired it out a few weeks ago. I mean, you really dug into it and kind of said, you know, what I got from you talking about it was if you're going to do the right thing, whether somebody is watching or not, you're going to if you're not, you're not. Fiduciary has become a marketing buzzword. You know, fiduciary means put your interests before my own. Yeah. You sure that's a good idea with people's health or their money? So anyway, so basically with other shows, I do have some heartburn when they say, you know, if you've saved up 250,000 or you've saved up 200,000, you know, one local show in Arizona, you know, when they started on the show, they had no minimums and then all sudden they had a 50,000 minimum and then it went to 100. It was just funny to watch The Metamorphosis.

J.R. Rotchford:
So I know it was going on. The radio show worked. People were going into their office, people, you know, all sudden they got too busy for you little people. So we have dedicated our practice to stay, not too busy for the little people if you have no money, Anthony says. If you have no money, you might need us more. We do a lot of help with helping you get ready with budgets and debt reduction. If you're going to get a mortgage one day, you're a young family. Your credit stinks. We can help you with that. We can help you with how to repair your credit. We're not mortgage people. We're just we care about people. So it's a little bit different of an animal. So, you know, long story short, with everything we try to get across in this show, we're less financial and more current events. I will admit. With that, I'm hoping that it's good information for people. It's important we help people manage their money into the future without a crystal ball. So if a black swan event rears its ugly head, or if things come up that everybody's watching and you just have your head in the sand, that's not good. You know, we we braced people for the volatility of 2022. You know, we've been telling people this stuff doesn't make sense. And by the way, I mean, you know what I put out on Facebook yesterday? You're in the middle of your third due over this year. The market took a pretty good dump and then all said it was like, well, we were wrong.

J.R. Rotchford:
And it came back and we still told people it doesn't make sense. It took another dump. Then all sudden it came back. We were wrong. It's in the third, you know, I'd say melt up. It's in the third leg of going up. Did anything get fixed in this country or the world? Did any single thing get better? You know, no. The answer is no, I'm not going to put crickets there. The answer is no. Everything is a dumpster fire right now. Sorry to be so extreme, but come on. I mean, look around you. You know, today is Wednesday, the 9th of November. We record on Wednesday air on Saturday. And yesterday was the eighth, which was voting day. I know we're financial. We're not a political show, so I'm not going to go too far with this. But for Pete's sake, you know, roughly 25% of Maricopa County in Arizona, the tabulation machines were broken. Right? I mean, you know what that does? People are like, well, then then that gives an instant opportunity for people. If they didn't like the results of the election to sue and to delay and to do other stuff, you know what else it does? It's something I haven't heard on the news shows this morning. It also tells people, well, you know how you get around that you do all mail in voting. This in-person voting is antiquated. We're in a day and age of tick tock and Facebook and Twitter and YouTube. So you don't you don't need to go to your polling place because that got screwed up.

J.R. Rotchford:
Really. I think we need to go back to you can only go to your polling place. We voted for years, decades. We voted for a long time and it went all right. And then all sudden, you know, Florida with their hanging chads 20 years ago, and then it's just gotten worse and worse. So and by the way, you and Jim and people in your age range, you've got to fix all this stuff. I had a little bit of an issue with somebody that voted for independent party or whatever it was, you know, the one that got like 1.2% of the vote. Here's the deal. You voted your conscience. That's always the right thing to do. So morally, you are absolutely correct. And I'm not going to say the name of the guy that did this that I was talking to. But the thing is, you know, the system is not going to allow for know, you know, your vote went to whomever is in the lead. So you might have done what was right, but you did not get anywhere. You and Jim and people your age have to get rid of this two-party system. We need to go back to voting for whoever's most qualified, you know, or recently we got a Supreme Court justice. The only thing I ever heard was her race and her gender. It's like, you know, you heard of. A bit about the qualifications, but not much. It was mostly on This is who I said, I'm going to get in there and this is who I got in there.

J.R. Rotchford:
Who did people vote for yesterday? I don't care what state you're in, and I'm not going to bring up Fetterman or certain names because some of that stuff, it's pretty passionate for people. You didn't vote for who you think is most qualified, you voted for who you voted against, the other person. And that very much became popular under Donald Trump. It's like people that didn't vote for Trump. It wasn't because they didn't like it. It was because they wanted to vote against him. Well, that's dangerous. So one day you kids have to fix it. You have to get rid of the party system so people don't just go down the ballot with all or all D You got to fix that and you got to go back to people that represent you because that's what this is about. We have forgotten, you know, these millions of dollars that go into the advertising. People are buying votes, these signs. And every quarter, Oh, I know him. I know her. No, you don't. You've just seen the sign for the last month. And by the way, the commercials are annoying. And stop calling my cell phone. I don't care who you are. Blake Masters. You know Mark Kelly. I don't care what side you're on. Stop calling me. Stop texting me. I don't want to. I'll reach out to you when I need you. So that was my take on voting. I know that's not what I meant to do today.

Anthony Carrao:
How are we going to get away from the two party system if you're just going to yell at me for vote in third party?

J.R. Rotchford:
How do you know it was you I'm talking about all the time. You know, I tried to raise you better than that. I'm your stepparent. I try to do a good job. I never beat you. I mean, I wanted to all the time. I still want to. I agree now.

Anthony Carrao:
Right? Maybe that's why that's why I grew up so poorly. Because I can.

J.R. Rotchford:
Be so and more important than voting because I know, you know, by Saturday you've gotten sick of hearing about voting the Powerball. You know, the one what is it, $2.1 billion Powerball. The numbers came out delayed by something like 17 hours. You know, artificial intelligence is wonderful. You know, it's great. You know, we're getting more expedient and everything's going so smoothly. No, it's not. If I had money in the Powerball drawing, if I bought a you know what, ton of tickets, I don't want to hear that there was a snag in one of the states. And now. Well, you know, it gives me a lack of confidence in the artificial intelligence. And by the way.

Anthony Carrao:
Unless you're the guy that won, then you're pretty thankful for it.

J.R. Rotchford:
Well, of course so. And it was one person, one person in California, one one ticket is now a billionaire. Even after the half or whatever in taxes, they're still a billionaire. So take that, Elon Musk. You don't need to create a rocket. He just need a private Elon Musk.

Anthony Carrao:
I hope he won the Powerball.

J.R. Rotchford:
That'd be so funny.

Anthony Carrao:
Well, he needs to find a way to fund Twitter because what a mess that has become right now.

J.R. Rotchford:
It's becoming weird. And I'm paying my $8 a month. You know, I want that little blue check. I mean, that means everything to me. So I'll pay my eight bucks a month. Elon keeps calling me as I dare you in you in. What should I do? I'm like, Stop calling me.

Anthony Carrao:
Anyway, I thought it was hilarious how everybody talked about how he's going to be a hero for free speech. And I was like, No, it's not.

J.R. Rotchford:
He's she's everybody's got an agenda. And if you have a lot of money, you probably think whatever your opinion is, it is the right one. I'd be the same way. So would you. I mean, that's human nature. So last thing I have to say about the Powerball machines and the tabulation machines and artificial intelligence, you know, not only are they flawed, they don't pay into Social Security. So when you go to your self checkout at Lowe's or Home Depot or Walmart or wherever you are or McDonald's, and you push the button and you and somebody is not working because of that machine, those people are not paying into Social Security. So that's that's another problem that we need to dig into one day.

Anthony Carrao:
Well, we talked about Social Security a lot in the last episode. We'll probably talk about it a lot more in this episode because what did you want to talk about.

J.R. Rotchford:
Today is going to be annuities 101. And if you can keep me from getting off track and ranting all day, it's going to be annuities two or two also, we hear.

Anthony Carrao:
So that's why we'll pass it over to Jim quickly first then.

Producer:
All right, guys. Well, later on in the show, we're going to discuss the baby boomer dilemma. That's a film that came out in 2021, an exposé of America's retirement experiment that takes a deeper dive into pensions, both corporate and public Social Security for one case and annuities. Right now, we listen in to a quick little preview clip of the film.

Baby Boomer Dillema:
If you're counting on a pension being there when you retire, you should be aware that there are consultants, corporations are busy hiring to figure out how to screw you out of your pension benefit. And that's what's happening across the world right now. And it's scandalous and it's it's it's creepy. Everybody seems to like a pension. If you doubt that, try taking it away from them and you see how people react. Those are a risky type of retirement plan to operate because you don't have a lot of certainty today about what your obligations will be in the future come bubble burst. My 401 K became a201k. I did not know that you could lose money in a41k.

Producer:
And again, stay tuned. Later on the program, the guys will discuss that film, The Baby Boomer Dilemma. More in depth. Also, a quick reminder, along with listening, of course, to Another Money Show every Saturday at noon on 960, The Patriot, You can listen back to this and previous shows in our podcast catalog. So just hit that subscribe button, Apple, Google, Spotify, or wherever you get your podcasts and listen anytime, anywhere to Another Money Show. 960 The Patriot, Another Money Show. We're back after this.

Producer:
So are you concerned about market volatility, rising taxes from the Biden administration and how it could affect your retirement? Then listen to Another Money Show with J.R. Rotchford and Carrao. Learn how you can reduce the taxes you pay before and during retirement. Another money show every Saturday at 4:00 pm on 960. The Patriot schedule your free no obligation consultation now by calling 623 523 0444. That's 623 523 0444. Another weekend, Another Money Show visit Another money show dot com.

Anthony Carrao:
Welcome back. You're listening to another Money show and the crude J.R Rotchford. Before the break, we played a clip from the baby boomer dilemma. We're going to talk about that documentary slash movie a little bit later in the show. I think it's a great movie. We say this all the time. You know, Anthony, J.R., who are they? Why do I care about their opinions? Right. And I get that. So let us back up that with all of these other experts from we've got people in Congress. We've got people that helped run pension plans, business owners, a lot of experts in that movie, really great content. And we'll have some free passes to give away for that. But we're going to start it off with talking about self funded pensions. You know, we talk about the education, about things going on in the world, but right now we want to focus on kind of better. In your personal financial situation. We talk about in retirement income is key and that's going to be the theme of the rest of the show. you want to take us away?

J.R. Rotchford:
I do. I do. And I you really are going to be able to keep me on track because what we have today to talk about is super, super important. I mean, each week I know I talk about current events, you know, and people may want to know, I mean, why why am I trying to scare you? You know, each week you come out here and scare us. I don't mean to. I mean, our whole theme from the beginning has been, we want you prepared, not scared. So but if everything going on does scare you a little bit, then good. That means you're awake and paying attention. I mean, we. It's a call to action. We don't care if you come in and see it. What? We'd like you to. We don't we? If you have a good adviser that cares about you and puts your best interests first, go to see that adviser. If you're worried about what's going on with bonds or stocks, if we've piqued your interest, then things might get shady or sketchy in this world. Reach out to your advisor if you don't have one or if you want a second opinion, reach out to us. We want to help you. We want one person, one couple, one family at a time to to be in a better situation. So we're not trying to scare you. We're trying to educate you.

J.R. Rotchford:
So you are aware of your surroundings. You know, you've got what's coming up next year. You know, they're talking they're still talking about food shortages and I'm still hearing about World War Three and stuff that we can't bring up every week because then it's just, you know, the doomsday preppers. And so but Social Security is going up eight and a half percent. Food stamps are going up 12 and a half percent. You know, RMD required minimum distribution. They moved it a couple of years ago from 70 and a half to 72. All of these changes mean that you better get ready for your future if you retire at, say, 60 or 62 and you live to 90 or 92 and you're not working, you know, 30 years later, you know, obviously we have to we have to pay attention to inflation and higher taxes and certain things to begin with. We always have. It's just getting more critical. The whole thing is if you have $1,000,000, which when I was new in the industry a quarter of a century ago, you made it. You've got no mortgage. If you live in Sun City, Arizona, you've got some sort of a Buick. It has to be a Buick. Most likely you have a little golf cart. So but $1,000,000, you made it. Now it's like these you know, these heavy duty smart people are talking about, well, you better have 5 million because of taxes, inflation, the granddaddy, health care, you know, the long term care landscape changed dramatically, not for the good for the people.

J.R. Rotchford:
So everything's changing. So whatever you have to work with, it should be very important to you. If you have this pile of money in assets, you've got your stocks and bonds and mutual funds and all this stuff. If we have a market correction, you know, let's throw out there. 2008, the S&P lost 57% of its value. If we have a market correction and you're drawing down money off your million dollars, you know, and it gets cut in half, that's a problem. So with whatever you have to work with our number one goal and our office is protected. We don't want these wild swings. If we have an amount of money with, you know, to work with and we help you protect it, then the second objective is always going to be growth. How we get that done. We ladder your money out. You know, if somebody comes in with, say, $100,000, we don't put $100,000 into one different vehicle. You know, we ladder it out. We have to make sure we look at your income, we look at your emergency fund. Do you have some cash at home? We you know, our big.

Anthony Carrao:
Start with the basis of the retirement planning is the income. And the only way you can get dividend paying stocks, you can get bonds, but there's no guarantees in those. The only real guarantees is self funding pensions through annuities. That's the big vehicle there.

J.R. Rotchford:
Well, when you say self funding through pensions, let's let's hit that for one second. If you worked for the school system or if you worked in the landscaping department for the City of Glendale or whatever, if you have Arizona State Retirement System, So there is a publicly funded pension. Here's the deal. You're in this big pot. You're in this big pool where everybody had to put money into it. You didn't have a choice. In your younger years, you couldn't say, I want to be more in equities, less in bonds. In your nearing retirement years, you couldn't say, I'm only two years out from retirement. Can you put me less in the stocks, more in the bonds? You had no choices. But it's a huge Ponzi scheme when you have all used teachers, for example, if they retire at, say, 55 years of age and they live to 95 and you're paying them 3600 a month or whatever for life, you're going to have to have a whole bunch of money to replace that. You know, a lot of the people with public pensions, you know, they have a longer time in retirement than they're working years. So our fear is that in the future, those pensions are not quite as stable as we think they are. You know, you dug into Social Security pretty, pretty in depth. Social Security is a big Ponzi scheme. They are going to have to cut benefits one day. They're going to have to raise the age that we take it. They're going to have to raise what younger workers pay into it.

J.R. Rotchford:
Well, if all this stuff is shaky, you know, and we look at your self pension ideas, what you're doing is you're basically you're hedging your bets if you have whatever I like the number 100,000 because it's it's it's a good number to work with. It's easy. It's not too greedy. Some of the other radio shows, they use a million. We're only going to use 100,000. So if you set up your 100,000, you have guaranteed lifetime income and then you have whatever's left of your public pension, your Social Security, your stocks and bonds, your emergency fund, all that stuff. So we're hedging bets. You know what we're going to do? We're going to dig into this. When I say annuities one on one, we're going to talk about the main four food groups of annuities, and then we're going to narrow in on three of them and give you a little better idea why we like them. We're going to give you an idea why we don't like the fourth brand. So let's do this and look at me. Anthony I'm staying on track, if you notice that. And believe me, I want to talk about the diesel fluid shortage. I want to talk about I want to talk about everything negative. But I'm not. So let's do this. Let's take a break. And then after the break, let's get into the different types of annuities and let's do our best to keep me on track. Is that fair? Sounds good. How do people find us.

Anthony Carrao:
In the meantime? You can find us at Another Money Show dot com. AnotherMoneyShow.com You can listen to past episodes, you can schedule appointments, you can shoot us emails from there. You could also email us direct at team at Another Money Show dot com, or you can reach out to us by phone. 623 523 0444. And we will be right back.

Producer:
You're listening to Another Money Show.

Producer:
At Rotchford and Associates, we know you've worked hard to earn your money and you've worked even harder to save it when it comes to wealth management and planning for retirement, J.R. Rotchford and his team of specialists have been helping individuals, families and business owners find financial freedom at their veteran-owned firm for more than 25 years. Give us a call now at 623 523 0444. That's 623 523 0444. Are you concerned about market volatility, rising taxes, economic uncertainty, and how it could all affect your future in retirement? Then tune in to Another Money Show to learn how you can protect and grow your hard earned money. Another money show every Saturday at noon right here on 960. The Patriot. Protect your hard-earned money today and learn more at Another Money Show dot com.

J.R. Rotchford:
Welcome back to another Money show. Thank you so much for being with us. So I got in trouble during the break. Apparently, I didn't stick to annuities properly, so I got my hand slapped. So now this segment is going to be all annuities. It's going to be so boring. But hang with me. I know you like to hear me rant better, but this would be good, too. So and, you know, when when we tell people to email us or reach out to us, one thing that we really, really want to do, if anything we say gives you more questions. If we pique your interest, email the question. You know, we're not a live show. We would love to take questions because that's really where we excel day to day. But if you email us a question about any of this, if you want us to use your name, we'll do that. If you don't, we won't. But we will make sure we address your question on the following week. So make sure you're email us. So Annuities 101 the four main groups and I'm going to get to these in the order that we're going to talk about. The first one is variable annuities. The second one is multi year guaranteed annuities. The third one we're going to talk about is single premium immediate annuities, and the last one is fixed indexed annuities. So let's break them down a little bit on variable annuities. And I did I started in this job in the late nineties and I was trained to sell variable annuities.

J.R. Rotchford:
I say the word sell, not offer on purpose because basically what a variable annuity is, it is a contract with an insurance company. All annuities are but a variable one variable meaning up and down. So it's basically mutual funds in a box. You can take this vehicle of this annuity and you can put stocks, bonds, fixed instruments, all this in this annuity. Well, if it goes up, you're happy. If it goes down, you're not just like any other security. So with a variable annuity, they do add a cost. They let you add these riders like one is called a ratcheted death benefit, meaning basically, if your account was 100,000, it goes up to 150,000. The the day it hit 150,000, the market crashes and it goes back down under your original 100, it goes down to 80. But if you die, your spouse or whomever your beneficiary is gets 150. So why don't you just buy some life insurance, you know, for a lesser money and put it next to your annuity? The variable annuities, basically what they are is they're securities. They're they're variable. Basically, they're risky. They're very expensive. We cannot Anthony and I cannot find one that we would own ourselves. I used to have one used to have a variable annuity. Once it came out of a backside surrender charge, I did liquidate it and I put it into a fixed annuity.

Anthony Carrao:
So what is the benefit of a variable annuity versus just buying mutual funds? Then what's the annuity part?

J.R. Rotchford:
I don't see it once. And my biggest my biggest tool, by the way, if somebody comes in the office, we tell them to bring their statements. We look at their statements for a second opinion. If they have a variable annuity, the first thing we do is we call the company that they're with with a pad and paper and a pen, and we dig into it because the clients, you know, I'm not saying the reps don't do full disclosure and their due diligence, but the clients don't remember what the fees are and the sub account fees. So we call and we ask, is there an annual fee? What is the mortality and expense fee? What is the sub account fees? Is there a rebalancing fee? Do I have an income rider fee? We ask all that and sometimes we find these things with 3 to 6% in fees. So you have a 14 year run up in the market that can get cushioned and you still think what you have is pretty good. But 2022 comes around or 2008 and you're losing money. Those fees don't stop. So even if you're losing money, the fees keep going. So we we make sure people understand what they have.

J.R. Rotchford:
My the answer to your question is when I got away from variable annuities, I took let's say it was 100,000 that I was using for an annuity. I would take, say, 70,000 and put it into a fixed annuity where there are no fees, there's no upfront fees, there's no annual fees. With what I was using, there was a declining backside surrender charge. So we always have to be careful with that. We have to look at your time horizon, your other assets, etc. So and then with the remainder, I was using mutual funds. My biggest mutual fund company was Vanguard. I'm like, If you're going to put your money into this S&P growth fund, what do you need me for? What are you paying me if, whatever a quarter percent a year for, why are you paying me? So my number one mutual fund company was Vanguard and I never made a dime. They don't take representatives. They have call centers. So yeah, I think there are alternatives to a variable annuity that work better, less risk, less fees. And I actually was seeing better performance. So a win win win.

Anthony Carrao:
Well, there's definitely alternatives. But the whole point is the only reason that you would go through the annuity route is that guaranteed income for life because there is no other vehicle that does that. The difference between all of these annuities is how they pay out, how they grow before you start taking income or are you taking income immediately? Variable annuities can be turned on for a lifetime pension, which is a good part. The problem is how it grows. In the meantime. I mean, we're slamming the market on pretty much every show saying there's no foundation. So it'd be hypocritical of us to say, hey, we love self-funded pensions, we love annuities, but you should grow your annuity in the market first. So there are alternatives to that in other ways. J.R. alluded to some of the other annuity types out there. Annuity gets used as a blanket term all the time, but it can be used interchangeably with pensions. So people love pensions. They just don't know that they can fund them themselves. So let's talk about some of the the safer alternatives and the way that we use pension planning for our clients in the next segment. We've got to go to break. But in the meantime, check us out at another Money show dot com or you can find our podcast wherever you listen to podcast. Thanks.

Producer:
Thanks for listening to Another Money Show. If you like what you're hearing, be sure to leave us a rating and subscribe to the show wherever you listen to podcasts.

Producer:
This is Another Money Show. Except this one's different. This one will actually keep you awake.

J.R. Rotchford:
Welcome back to Another money show. Thanks, as always, for being with us. So back to Annuities 101. We talked about variable annuities. Obviously, we're not in favor of them. The second type of annuity that we brought up is multi year guaranteed annuities. And I'm going to make this one kind of quick because they're very simple. You give me an amount of money and how long you want to put it in with the insurance company. I give you the interest rate. Our office is fully independent. We go with very solid companies. We look at their ratings, we look at their holdings. And we basically I look at it like a CD alternative. The rates are incredible. I won't give exact rates, but I mean, some of these these ones we have right now, one year, two year three or four year, five year. They are way higher than CD's. So and they are tax deferred, No. 10.99 each year. So you are getting compound growth within. But look at it just like a CD. At the end of it you have a 30 day window, you can pull the money out, you can let it roll over at whatever their current rates are. So we look at that for you very, very much like a CD. The next kind of annuities, the single premium immediate annuity. Let's look at that like a lifetime pension where you put in say you put in 100,000.

J.R. Rotchford:
They take your gender and your date of birth because they're using the mortality tables for how long you're going to live. They tell you how much you'll get a month for the rest of your life. You can never outlive it. We always make sure to name a beneficiary. If you're 75 and they figure you're going to live to about 95, if you die at 76, we don't want the insurance company to keep your money. So we name the beneficiary with this single premium immediate annuity. It's kind of like the best way to say it. It's a lifetime income. You have no loans, you have guarantees. And then on top of that, we look at your Social Security, we look at your pension, we look at the other things. So on the next one, the fixed index annuity, that's the one we want to talk the most about because that's the one that's what everybody in general is talking about and offering there. They're fairly simple. They are a fixed product. They're not a security. Say you give an insurance company 100,000, they put it into this vehicle, whether it's for five years or seven years or ten years. In my experience, I've seen fixed indexed annuities anywhere from five years to 20 years is the.

Anthony Carrao:
Way even now there's some three years that we're saying.

J.R. Rotchford:
Yeah, which is great. I mean, that means interest moving again. So as much as we don't like inflation, it's kind of good for these annuities. I mean for safe investors.

Anthony Carrao:
Yep, the inflation would just bring in rates to what they should have been. I mean, the Fed should have raised rates years ago and they didn't because they were subsiding to what the market decided. And the market wanted fake money to prop up its earnings.

J.R. Rotchford:
And a lot of people capitalized. I mean, it's been wonderful. You got these people in a 30 year mortgage for 2.75%. That's pretty luxurious. It shouldn't have been that low. It doesn't sustain itself. And we're seeing that now. So but for for annuities, you know, people that say, I don't like annuities. Well, tell me why. I mean, you know, Social Security isn't that annuity you put money in during your working years. And then when you take Social Security at 62 or 66 and three quarters or 70, they tell you how much you're going to get for life. So it's an annuity. You know, I won the lottery. You know, I just won 2.1 billion. I was in California visiting. So if I take the 20 year or 30 year, whatever it is, annuity, it's an annuity. You got 1.2 billion. They cut it in half for your taxes. I don't want the lump sum because I'm not even sure what to do with a couple of million right now. So then they put it out for 20 or 30 years. Guess what they do with it? It's an annuity. So. Oh, I like those annuities. Well, you know, most people don't win the lottery, so you should like your own annuity even better than the lottery annuity. So with the fixed index annuity, you know, Anthony, can you tell me you have an example that you've used over the years about playing blackjack? I love that you remember what I'm talking about.

Anthony Carrao:
Yeah. I mean, I would love to be credited with that example. I think I saw in a Tom Hagen presentation where he took it from a book and Tom Hagen, we talked about the baby boomer dilemma. He is a big part of that movie. Very, very smart, not a financial advisor himself, but he teaches about the power of income planning or retirement. It's written a bunch of books, does training sessions, very, very intelligent guy. But listen to a seminar in this blackjack theory on fixed index annuities. We say this all the time with the fixed index annuity. If the market goes up, you get to share in those profits, you get to share in the upticks, but they cap it. You don't get 100% of what's the growth, because what they're doing is they're limiting the downside. So if the market goes up 10%, you don't get all 10%. Let's say you get five or 6%. However, if the market goes down 10%, the trade off is that you don't lose anything. And if the market. It goes down 20% or 30% or 40% or 57% like it did in 2008. You're not going down with the ship. You stay where you're at and then you continue to grow again once the market starts going back up. Also, if you are losing 50% in the next year, the market comes back at 50%. Are you back to even? No. You still have to make up your 50% on 50% of your money. So you have to earn significantly more to get brought back to. Even so, better financial planning is to not lose during those dips.

Anthony Carrao:
Just go up when it goes up and you're in a better position because when there are these massive dips, you don't have to play catch up. But the blackjack example is if you're familiar and image, imagine most people are, you go to blackjack, you put $100 on the table. If you win, you leave with $200. If you lose, you leave with nothing. It's all or nothing. It's double or nothing in the simplest of terms. But let's say, for example, the table next to the standard blackjack table that you know, is the fixed index version of it. And if you put $100 on the table and you win, you leave with 150. Well, that doesn't seem fair when I can leave with 200 on the other table. But on the opposite side of that, if you lose against the dealer, you still leave with your $100. Wouldn't you rather play at a table where if you win, you win, And if you lose, you don't lose where it's either one or the other? I mean, standard blackjack, you either win or you lose. With a fixed indexed annuity, you either win or you stay where you're at and then hope to win later down the road. So I love them. They're safe. But I mean, it's really just how you're growing your money until you turn down for a pension, because our biggest thing is having income in retirement. And that's what this this movie is about. The baby boomer dilemma. Did we you covered you covered spears right before the fixed index?

J.R. Rotchford:
I did. Can I tell you one more thing about Spears, though? Yeah. I mean, yeah, with a spear. Let me give you a real life example. My father and I used to do this fairly often. Let's say you have somebody in Sun City and spouse passes away, one spouse is left. Well, we we are telling people all the time, you know, don't keep too much money in the bank, you know, don't have too much risk. So the surviving spouse is going to move to independent living, say they're going to go to a senior community where the food is incredible. So they sell the home. They have this $250,000 where we've we've told you don't want the risk of the market. Now we have to even add you have to be careful of bonds. We don't think you should have a quarter of $1,000,000 in the bank. What do you do with it? You put it with an insurance company and they take the 250,000 and they say, here's your monthly income. You can never live. So you move to the senior community knowing that you are never it doesn't matter if you live there another 30 years, you are not going to be out on the street. So all a single premium, immediate annuity is in my mind. It's a lifelong pension, but it's peace of mind. Know there used to be a company years ago that called it sleep insurance. I mean, if you aren't worried about losing money, if you're not worried about certain things, you can sleep better. And that's that's what this is all about.

Anthony Carrao:
Well, that's why income is the basis of our financial plans, because you have if you have excess income and not enough savings, you build up your savings. If you have excess savings and not enough income, you spend down your savings. Income is the key to retirement. And that's again, this. Who are J.R. and Anthony and why should I listen to them? And that's a fair argument. But that's this movie has a panel of experts across a bunch of different fields talking about how wonderful pension planning is for retirement. The problem? Is older pensions, right? Because that's if you're listening to this, you may have grown up in the time where you could have pensions. You work for a company 20, 30 years and you walk away with that. It's not feasible for these companies to pay out. So it's dangerous. It's kind of scary. It's important for retirement. It's key. But they've gotten away from that. They've gone from a defined benefit plan to a defined contribution plan, which is your 401. K, But as you know, in 2008 and 2000, in March of 2020, that could be cut in half at any point. You know, there's a scene in the movie, it's got like I said, it's a documentary, but they have some acting and they've got some scenes playing out with the family. And, you know, he decided to go with a41k instead of pension and is getting ready to retire when 2008 happens, as did many Americans.

Anthony Carrao:
So what happens when you have you hit that number? You're told, oh, if I hit this number, I can retire and all of a sudden that number gets cut in half. Can you afford to retire then? Well, no. Now you've got to recover. So if you can focus on income, you don't have to worry about assets fluctuating. They talk about private pensions and how private pensions were 50 billion in the hole. We actually had an episode a few probably a couple of months ago now, where we talked about the pension benefit plan for the private sector. There are FDIC insurance and how it was, I think 64 billion in the hole at the time. Rule right now. The government printed money to bring it back. It's 500 million, I think, in the positive. But that was with money printed by the government, which again, we know we don't have. So this movie so wonderful. We have a bunch of them to give away. We've got digital downloads. Reach out to us at team at another Money show .com. Shoot us an email, contact us through the website. We would love to give you some of these unique codes so that you can check out the movie for yourselves if you're not completely sold on. Self-funded pensions Having income in retirement. Check this out. Let us know if you have questions. Maybe we'll change your mind on that.

J.R. Rotchford:
Well. And if any worse comes to worse, the more you know, the better. You know, wasn't that a big thing on what NBC? The more you know, I mean, if you hate annuities and you watch this movie and you talk to us and you talk to people and you get fully educated on annuities and you still hate them, good, that means you really did hate them are what we run into. People don't understand them. You know how many people knew that when you take that income stream from the lottery it's an annuity. You know Social Security, it's an annuity. Annuities have been around longer than the stock market, so.

Anthony Carrao:
They've been around since Roman times. Stock market came around in the 1600s, which, you know, that's a long time ago. However, it's not nearly as long as thousands of years ago in the Roman time. I mean, Jane Austen wrote about it. And was it the Pride and Prejudice or maybe not Pride and Prejudice, one of Jane Austen's famous books. But she talks about the benefits of annuities. If you have that income stream, you're happier that people live longer if they know that they've got money coming in.

J.R. Rotchford:
Well, yeah, of course. I mean, you know what? What hurts us, what hurts our health stress. I mean, what are people stress over? One of the number one things, obviously, is money. And you're talking about an environment now where the government's 31 trillion in debt. So if you really still think your Social Security is is not going to be changed, I have bad news for you. I mean, you're getting a good dose of inflation and you're about to as soon as next year see what higher taxes look like.

Anthony Carrao:
Let's play one more clip. We played one at the beginning of the show. Let's play one.

Producer:
More. There's got to be a better way to try to save for retirement than using something where half your money can disappear almost overnight and there's nothing you can do about it. And what's been happening over the last few years is, yes, our accounts have been growing. It looks like we're getting wealthier, but the income that we can get from that sum of money is shrinking. Retirement is so much different and the advisors need to shift to become income experts and retirement income experts and risk managers. You have to figure out what are you going to get from Social Security? Medicare? It's been estimated that Social Security will run out of money, not entirely, but it will run out of money such that benefits will have to be cut by one third for everyone. Current retirees, future retirees. What is often underappreciated is that doing nothing and really politicizing the issue is a way of doing nothing will result in a massive cut to everybody's Social Security benefit.

Anthony Carrao:
If that is piqued your interest or if you have questions about any of the stuff we talked about, please reach out team at another Money show dot com team@anothermoneyshow.com. You can find us at another Money show dot com AnotherMoneyShow.com And you can listen and subscribe wherever you listen to podcasts. Check us out Another Money Show. We appreciate you being here.

Producer:
Thanks for listening to Another Money Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets to schedule your free no obligation consultation. Visit Another Money Show dot com. AnotherMoneyShow.com

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM A registered Investment advisor, BCM and Rotchford Financial are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investment involve risk and unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries For all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosures of any conflicts of interest, if any exists. Refer to our firm brochure the ADV two A page four for additional information, any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by BWR. Fixed annuities, including multi year guaranteed rate Annuities are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity. Contract guarantees are backed by the financial strength and claims paying ability of the issuer.

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