Ben Green—Financial Consultant, Educator and COO of Insurance Advantage—joins us to discuss how to financially prepare for retirement by making smart money decisions based on how close you are to retirement age.
- Hello everyone and welcome in to Senior Living Live. My name is Melissa. As always we thank you so much for being with us via podcast and via video here today. Well as always we try to be very timely with our topics and one that has been a great debate for many years but even more so over the past couple of months is where to put that nest egg you've been building for retirement. Today we are talking about safe money strategies with one of our favorite speakers, Ben Green. Ben, how are you today?
- Melissa, I'm doing great.
- Fantastic. And I love this topic so much and if we all have that crystal ball, Ben, we can make a lot of money when it comes to talking about where to put your money where you won't lose it and you hope to build it. That's sort of the topic here today and it's an important one. But before we get into it, first tell us a little bit about yourself and your background.
- Yep, and I'll provide just a little bit of legalese here. So the opinions expressed are my own of course. You should consult with a financial advisor about your particular situation because everybody's situation is different. With that being said, everything I'm gonna talk about we put into practice. Actually I put into practice for myself, and actually my mother and my other family members. And so that's a little bit about that. My name's Ben Green. I am President and COO of Insurance Advantage. We're based in the Southeast. We help folks from South Carolina, Kentucky to Tennessee and parts beyond. We can help folks nationally, and in fact, in the last week helped folks in California, Maryland, Pennsylvania, and Texas, actually. So I have a BA in Finance with an MBA in International Business. I'm CMFS certified, which means it's Certified Mutual Fund Specialist. Have dozens of certifications in life insurance, long-term care, health insurance. Medicare won numerous awards, especially on health insurance and Medicare space. And we have counseled over the last 12 years or so, we've counseled tens of of folks on social security, Medicare health insurance. long term care, annuities and more and I'm really excited to talk with you all for just a little bit today, 'cause we love providing education around really important topics like safe money strategies.
- Yeah, and it's clear that you know your stuff but enjoy talking about it, which is really hard to find when it comes to all the things that you know well. I mean, not just the money strategies, but those more difficult convoluted subjects like social security and Medicare and Medicaid, so that's why we love having you on. So let's start talking money. Everyone has seen the prices skyrocket, we're talking about inflation in another video and cost of living and how that's not really meeting the needs for a lot of people right now. We're looking at food, housing, daily necessities, everyone is really trying to stretch that dollar out. And if you are retired Ben, or you're close to retirement, what should you be doing right now to help make that nest egg last?
- That's great. Great question, Melissa. So if you were close to retirement and you have not yet pulled down social security you need to talk to someone about how you can stretch out and maximize your social security. That would be the first stop, okay. If you are already receiving social security you should talk with someone, a financial advisor, or someone like myself about how you can potentially reduce your social security taxation to make sure that you're not pulling some money out in one bucket and increasing the amount of money or amount of tax that you're gonna be liable for through your social security payments. And so those are two kind of really important stops for the social security side. On the safe money side, if you will, you really need to take a look at your stock market, your bond portfolio. And if you do have all of your eggs in those two baskets it's time for some really hard and in a little bit more detailed conversations about what you can do to potentially take some of those chips off the table, maybe move them over to another table where you're not gonna lose that money.
- Yeah. So the stock market, oh my goodness it has just been a roller coaster. And I remember when it was high, high and every day seemed to be really good and then we hit the fall, right. And since the fall the end of the summer it has just been a roller coaster up and down. I'm talking when it's down, it's down. And then we have crypto which a lot of people are saying, let's go into crypto, but that's now being banned in multiple countries so it's not even an option for some people. So what are considered safe options right now with your money and trying to grow it?
- So the typical financial advisors whether on CNBC or some of these other websites and so forth, they're gonna tell you to just keep all your money in the stock market.
- Yeah.
- Which is interesting advice since the average millionaire has about seven different streams of income coming in meaning they don't just have all their money in the stock market, for example. And so we think that it's not a great idea to keep all of your money in the stock market or subject to how of the bond market is worth. So an option that is available that almost no one talks about is what's called an annuity, okay. There are three types, you have a variable annuity that we do not touch because of the fees and because of the fact that you can lose a lot of money in those annuities, but you also have one called MYGA or a Multi Year Guaranteed Annuity that will pay you a fixed amount of interest, 2%, for example or 2.5% for three years, five years. And so that's a really good way to potentially preserve your capital and also get some growth. And then the other type of annuity that we really like and like to take a look at for customized situations is called a fixed index annuity. And fixed index annuities allow you to take some of your 401k, for example, or your IRAs, you can roll them over a portion of them over to a fixed index annuity. And though your principle is guaranteed and you can fix your money to an index, okay. You can attach your money to an in index like the S&P 500 index. And if it does well, stock market does well then you get some of the gains, 80%, 90%, 95% of the gains, okay. But if the stock market loses 10% or 20% in a year you do not lose any money, okay. You do not lose any money. And Warren Buffet, he's the most famous investor ever, his number one rule is to not lose money, and his number two rule is to remember number one which is to not lose money. And so for folks that are 60 years old, seven years old, like my mom. For example we have clients we have taken some of the chips off the table and out of the 401ks or 403bs, 457s and put them into fixed index annuities where the principal is gonna be guaranteed and they can gain some of the growth if the stock market goes up.
- Okay, yeah. That is very good information. And look, if you're able to quote Warren Buffet on what you're doing I think you're doing a pretty good job. So now let's discuss sequence of returns risk. Why does this become so important to understand as we get closer to retirement?
- Yeah. So just as you've said, the stock market has done remarkably well in the last 12 years. Really since 2008, 2009, we've been on a bull run, we were on a historic bull run for the last like 12 or 13 years, okay. But as you've said in the last six months it has been a roller coaster. I mean, Carowins, Six Flags, Disney World whatever you wanna call it, it's been up and down, I think it's down today, it was up on Friday, But I don't care about that so much because I actually have a lot of my money in the vehicle I just described which is fixed index annuity, okay. And the reason that sequence of returns risk is a really important topic is because... Or first of all just to describe it, it's the risk of receiving lower or negative returns, okay. Early in a period like your retirement when you're gonna be making withdrawals from the portfolio. So for example, Melissa, if this was 2008 you were 65 years old and you're starting to pull money down. Well, when the stock market dropped by 50% in a couple of months, if you're pulling out your 4% per year as your financial advisor has told you to do, you're gonna be pulling from a smaller and smaller base every day, essentially, and every year, okay. So for you to get back to 100%, if you will, and make that money stretch it literally took some folks decades to try to recover that, and some of them never. And that's why you saw some folks coming back out of retirement to go work again. And so this sequence of risk returns it's really important. It can be really dangerous for you in retirement. And so that's why we advise folks sometimes to take a good portion of their money out of the volatile stock market and put it into a vehicle where we know that you're not gonna lose the money.
- Yeah. It sounds so smart, right. And everybody, they look at the stock market and you find a lot of people, especially during COVID that really turned to that 'cause it was something to do, right. And they never maybe had traded before and a lot of people lost everything. And so you kinda have to be smart and that's why hiring somebody like yourself and your group is smart. I mean, smart money strategies is what we're talking about today. So finally, before we leave you, Ben, you've already given us some great tips but any other tips that you can share with our viewers and how they can find you if they have additional questions?
- Absolutely. So in general, we tell folks they need to... Obviously, you need to diversify your education and your financial literacy but you also need to diversify your assets. Not just your stock market portfolio, not just talking about picking apple versus picking Microsoft or IBM. There are other assets that you can put your money into like fixed index annuities like cash value life insurance, for example, that with participating dividends that pay 4 or 5% per year. Those are the other types of assets that you can put money into to make sure that you're not subject to the vagaries and volatility of the stock market.
- Yeah, excellent.
- And we employ these strategies not only for our clients but actually for ourselves. If folks wanna give me a call they can certainly call me at 803-509-3394, or they can just send me an email, it's ben@theiateam.com. And lastly, Melissa, I'll just say thank you so much for helping to educate folks. We like to provide a lot of education. And we tell folks to not just take our word for it, you can do your own education. And in fact, we point people to opportunities to educate themselves so that they understand fully what they're doing and they have full control over their retirement and future.
- Yeah, and you really put your money where your mouth is. I mean, the things that you are telling others or advising other people's to do are the exact things that you are doing with your family and your other family members, your mom, your parents they're doing it as well and reaping the benefits of it. So that's why we appreciate you so much, you're honest guy and out there to help educate others and to help them grow that nest egg, if you will. So Ben Green, helping your clients helping our viewers navigate retirement the right way, as always we appreciate your time. Thank you. Well, Ben has been helping many of our viewers with many different topics from the financials as you heard today, to social security benefits to Medicare and Medicaid. If you enjoy this video, you can find others on our website, www.seniorlivinglive.com. And when you're ready, after watching all the videos feel free to reach out directly and contact Ben for help. We appreciate you all taking the time to visit us at Senior Living Live. Have a great day, everybody.