Coach Listens with Coach Pete

Meet Coach Pete and hear why he shares these conversations. This short introduction features archive highlights from retirement author Tom Hegna, Pro Football Hall of Famer Terrell Davis, and bestselling author Jen Sincero—on income for life, consistency, and taking action.

Call 800-661-7383 or text PLAN to 600-700.

Hear the full conversations:

• Tom Hegna: Don't Worry, Retire Happy and Income for Life
• Terrell Davis: The Four-Yard Run, Football, and Financial Discipline
• Jen Sincero: Making Money and the Mindset of Wealth (Full Interview)

Produced October 15, 2026, from finished Coach Listens interview audio.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 I talk to very interesting people, and the most important part is that I shouldn't be the only one hearing it.

00:05 I really feel that if these people make sense to me, that everyone out there needs to hear it.

00:10 A successful retirement really has two key components.

00:14 Number one is increasing income for the rest of your life, and number two is risk management.

00:20 So my coach, when I got to the NFL, said, hey, man, we're not trying to have the long runs.

00:26 If you break a long run, that's great.

00:28 But what we want is consistency.

00:29 We want to be able to say, what is repeatable?

00:33 Absolutely, and it's because your mindset is what propels you to take action.

00:38 So if your mindset is focused on, I can't, it's impossible, it's going to be hard and no fun, your actions are going to reflect that, and you're going to get very, very much nowhere.

00:52 And very, very quickly.

00:54 800-661-7383 is the number to call.

00:56 800-661-7383.

00:59 You can also text keyword plan to 600-700.

01:02 Keyword plan to 600-700.

See omnystudio.com/listener for privacy information.

Coach Pete D’Arruda and Mike Milligan discuss qualified longevity annuity contracts, retirement-account withdrawal requirements, and the differences among annuity products. They consider why evaluating a financial product requires more than a blanket endorsement or rejection, and why income, access to money, growth, and personal goals need to work together. Part four of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Loving the conversation today. I'm Thomas Lipscomb in studio with bestselling author Coach Pete D’Arruda, also joining us today, host of the One of a Kind Financial Show. He's an author. Mike Milligan, catch up on the show by heading over to FinancialSafari.com. Hey, Mike, do you do any QLACs? Yeah, I've been doing QLACs for like the last 11 years. Oh, okay, yeah. A lot of people don't understand them, so we don't talk about them too many times on the show. QLAC stands for Qualified Longevity Annuity Contract. Yep. You know, you've lived in a world for so long where you've deferred, deferred, deferred, and then all of a sudden you hit an age, and the IRS and the government says it's time to take a required minimum deposit. And you notice I say deposit there, right? Yep. Not distribution. Correct.

00:45 Because it's a required minimum deposit back to their company, right, to the IRS first, right, in taxes, and then you get what's left over. The required minimum deposit that goes to the IRS in the form of taxes is because they're your business owner. So what a QLAC allows you to do is take a little bit of your IRAs, a little bit of your 401k money, and defer it out a little bit longer so those RMDs don't begin, you know, to as late as 85. Yeah. And most find it. You know, the interesting thing about QLACs, Pete, is most firms don't even know they exist. They, they, and then, and then when they hear the word that it's QLAC and they hear annuity, they're like, oh, that's bad. It's got to be bad. It's not bad, folks.

01:31 Right? It's, it's longevity insurance. Right? It's a promise. Yeah. But Pete, did you find the name of the book? Yeah, Quiet Place. Quiet Place. And it's, it's a book about the QLAC, but it's also about how to, how to make sure you have the lifetime income. Now, here, here's one of the misconceptions about QLACs. It's a funny name. It sounds like Aflac a little bit. Yes, it does. That's what I thought. A duck. But a lot of people thought, Mike, and this is a misconception, and I think it's been fertilized by some people who, who don't want you to put money in a QLAC, fertilized, in other words, growing the rumor, the bad rumor, is that you could not touch the money once you put it in until age 85. But the, that's the exact opposite. You have to start taking the money by age 85. You could put it in today at age 65 and take it, start taking it out at age 66.

02:18 Correct? Yeah. It is. Yeah. You know, the technical, I mean, what a QLAC really technically is, is a deferred income annuity. That's really all it is. Zadia. Right? It just has contract language from the IRS code that allows you to avoid RMD on that for a long period of time. It's a good way to pay less RMDs if you're not needing the money. Then put it in a long-term contract where the government can't touch it. Makes sense. And guess what you could do if you, and guess what you could do if you don't need the RMDs? You could use it for something like maybe a Roth conversion. A lot of people do that. Or, you know, you could lower, yeah, I mean, you could lower your tax bracket. The other thing that most people don't realize, too, about, like, later in life is your medical expenses are going to be a whole lot higher. They're just going to be higher when you're that age. And that's going to be for most people, not for everybody, but they're going to be higher.

03:04 The good news is if your medical expenses are over 7.5% of your total income, guess what? You get to itemize that. Right? So there's a potential for even that QLAC income when it starts at 85 to be tax-free if you're using it for medical. QLAC, to me, is also, like, it's just another way to, like, protect long-term care without necessarily having to pay the premiums of long-term care insurance. It's a great strategy to use. You can self-protect yourself or self-fund yourself if you put enough money away. Self-fund. That's exactly right. That's a good way. And you're not paying tax every year on it while you're deferring, which is a very big part. That's right. Compared to anywhere else people have money, you're going to get taxed every year on that. So this way you're not. Exactly. I want to jump in and ask, what happens to a spouse or beneficiary when the person who owns the QLAC passes?

03:54 It goes to the beneficiary. It's still an IRA, right? So it hasn't mysteriously gone to some new world of taxation, right? Okay. The government still wants their required minimum deposit on it. They still want their taxes. They want their share, right? But it goes to the beneficiary. The most important form in that QLAC when you sign up is something called the beneficiary designation form. So basically you assign ahead of time what's going to happen if you're not here anymore. Okay. And that's where people say, what happens if I die early? Does all that money disappear? No. It goes on to whoever. Money never disappears. It goes on to whoever you assign. Okay. Now, if you don't assign anybody, it will go to your will or your estate. And that creates a couple situations you don't need to create if you make sure you have those beneficiary designations. And if you have financial products now, which most people listening do, do you have your bank account set up POD?

04:45 That means payable on death. Do you have your brokerage account set up TOD, transfer on death? These bypass probate if you set them up right. And your beneficiary designations, I've seen people in the past, Thomas and Mike, where they met with me. And when we had this beneficiary form designation conversation, we'd bring out some of their old forms and they were ex-spouses still on there. That creates a nightmare if you didn't correct that, right? So we luckily were able to correct that. So if you'd like a true beneficiary review, give us a call right now. We'll do it at no cost or obligation. We've seen others charge a lot of money for this, Thomas, because this could cost you a whole lot of money if you don't do it right. Let's make sure to get it done at no cost and make sure it doesn't cost you in the future. The lines are open. Take advantage of this opportunity. 800-661-7383. 800-661-7383.

05:32 Or text keyword plan to 600-700. That's keyword plan to 600-700. All right, Mike, annuity. We've been talking about annuities a little bit because I think they're good to talk about. There's nothing to be ashamed of of annuity. There are some bad ones. There are some good ones. But when someone says, I don't want to look at any annuities because of the fees, what would you tell them? Well, good. Let's dissect them. Right? Some don't have them. That's right, because some don't have them. Like, it's so good. If you think annuities are good minus the fees, guess what? We can find one like that. It's just like anything in life, Pete, right? If you, you know, take a pie, for instance, right? There's some pies that I hate. There's some pies in it. But like, would you, if like, I don't want, like, I don't want a cherry pie.

06:21 And you may say I love cherry pies, but I don't want a cherry pie. I like the song. But if I don't like cherry pies, are all pies bad? No. Are all pies bad because cherry pies bad? No, not at all, right? I mean, there's different types. There's fruit pies. There's sweet potato pies. There's savory pies. Guys, annuities, if you're fee adverse, there's annuity solutions for you. Annuities also come with a lot of benefits. A lot of people don't know, right? There's tax deferral if you're in a tax bracket. You don't get like a double tax deferral if you're in an IRA and the annuity. There's also every annuity comes with guaranteed lifetime income in the contracts, right? Already, every annuity, I don't care which one you have, it's in there. And then it comes with, and then, you know, state regulators say, you know, always supposed to talk about this,

07:10 but there is state insurance guarantee funds on annuities. Every state's have them, right? For up to a certain amount. The people that say annuities are bad, grouping them all together, are people with an agenda, right? If somebody tells you, though, that the only thing they do is an annuities, guess what? They also have an agenda. You need to work with a firm, work with a group that has a total picture, right? Everything from CDs to Bitcoin, boy, those things have attributes for investments. They don't mean they have attributes for you, right? But we have to come up with a plan that includes everything. We have to analyze everything. That's good. And then get you that life that you really want to live. And again, you can begin that process by calling 800-661-7383, 800-661-7383.

08:00 You can also connect by texting that keyword plan to 600-700. That is keyword plan to 600-700. You know, it's funny. The people that have asked me about fees and annuities over the years seem to be the people that have been getting feed to death with financial termites on the risk side. So they assume that the safe side is going to be as bad as the risk side. And there are some bad safe options too, Thomas. And that's why you need to deal with a fiduciary who sits down and analyzes. I would never put anyone in something I wouldn't put myself in. Exactly. Like the Mikey, the financial world. It's true. Hey, what would you tell somebody when you're having an annuity conversation with them about this lifetime income, Mike? And they say, I can do better in the market. Well, I mean, you know, the market has performed well historically over time. And so I'd agree with you, right, that there's the potential that you could do better in the market. Well, probability.

08:46 There's also the potential that the market can do what it did in 2007, 2008. There's the potential that the market could do what it did after Y2K. There's the potential that 1987 rears this ugly head again. And do you want to really put your plan based off potential now? On the other hand, our plan, we can set some money over for guaranteed income that you need and that you want for life. And we can still take that potential to help you keep pace with inflation, to give you growth that you want, to leave that legacy, that big legacy you want for your family. So why don't we take some potential for downside off the table? You know, people are mostly optimistic. They only think about the good that can happen.

09:31 They don't think about the bad. And so that's the one thing that we're here to remind people that potential also has the potential for loss. It has the potential to go against you. And that's how I talk to people about it. You're cleaning out your grandparents' house. You find this little vase. You start rubbing it because you're trying to clean it a little bit, and a genie pops out. You say, I got you one wish, but in this one wish, I can give you four things. I can give you an ability to share in the gains of the market. I can let you share. After you share in the gains, lock those gains in so you never lose them. You'll never lose due to the market. And whenever you decide you can get a lifetime income, you can never outlive. That'd be a pretty good genie, wouldn't it? What would you say to that genie? Would you give that genie some money to put that in action for you?

10:20 Absolutely, I would, because at the end of the day, that genie is giving you upside potential, right? But he's also giving you what you need for your life. And, you know, sometimes when we think about that whole genie analogy, you want something that's beyond our reach. If you're in the market, there is for certain a market downturn coming in the future. There is for certain. And if you want to reduce your income, take less income, if you're using a market-based approach on your income, you also have to be disciplined enough that when that 20% or 30% downturn comes, to reduce your income by 20%, 30%. Most people don't want less income in retirement. No, they want more and more.

11:05 Here's three questions I want you to ask yourself, folks, out there. And number one, when your paycheck from work stops, what's the plan for the paycheck that's supposed to take its place? Big one. Okay? That's good. Number two, do you have even $1 in your plan that is guaranteed to show up every month as long as you live? Think about it. Be honest with yourself. Husband and wife now, looking at each other. Somebody's getting mad at somebody right now. And number three, if you live longer than you expect, and most people do, what happens to your income in the later years? Three powerful questions that you need to ask yourself, and you need to ask your broker if they have you in a brokerage-type plan with no income, no true retirement plan. Mike, I mean, how important is that? It's imperative, right? Nobody wants to outlive their money.

11:51 Nobody wants to end the rest of their life having to be a dependent. See, we're dependents when we're infants in life. You know, really, a child is homeless just by the good grace of their mom or dad who allows them to save their house. You don't want to end your life in the guest bedroom of your kids. You don't want to end your life, you know, sharing a room with a stranger in a nursing home facility. That's why having guaranteed income is so important. All right. Wow. Thomas, do you have a trivia question for the week? I absolutely do. Here. Just a minute. All right. So we're going to be texting true or false to the number 600-700.

12:38 So tell me, what do you think? Is this true or false? An income rider can be designed to provide income for as long as you live. An income rider can be designed to provide income for as long as you live. True or false to the number 600-700. Again, that's the keyword true or keyword false to 600-700. Hey, Mike, remember having a substitute teacher and they give you an easy quiz? I do. I do. So here's what you're going to win. Again, the first 15 people to answer correctly are going to get my brand new book called Red, Yellow, Green Light. A hundred more real life money decisions. Good call? Cost of a mistake? Or does it depend? It's basically a game show in book form. A hundred different scenarios. And you decide red, green, or yellow light. And then turn the page and see if you're right or not. You can play this at home. It's a great game to learn financial.

13:24 Again, red, yellow, green light. Very important book. We will send it to you. We've already bought them. Going to send it to you at our expense. Call right now. All right, that number is 800-661-7383. 800-661-7383. Or text keyword plan to 600-700. That's plan to 600-700. Well, for Jose, Thomas, Jackie sitting there watching us this week. She didn't really get to talk much. And we have Mike Milligan joined us here from Puerto Rico. Mike, thanks for your time today. Absolutely. It was good seeing you, Pete. Yeah, and folks, we'll see you next week. And you too, Thomas. Thomas too. Absolutely. Folks, we'll see you next week right here on the Financial Safari.

See omnystudio.com/listener for privacy information.

Mike Milligan continues his conversation with Coach Pete D’Arruda about matching a retirement strategy to the person who will live with it. They discuss risk, the tendency to rely on familiar products, and lessons from past planning conversations. Hear why the group favors reviewing the full picture rather than treating every retirement decision as a separate transaction. Part three of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 And welcome back into the Financial Safari, having a great conversation today. I'm Thomas Lipscomb in studio with America's Wealth, Financial, and Income Coach, Coach Pete D’Arruda. Also joining us from Puerto Rico, Mike Milligan of One Oak Financial. Thomas, let's give a couple of websites out. Yes. I'm going to give one, and I want you to give it. We have so many. I love it. We really need one site where people go and have all our sites on there. We're going to do that. Master site, yes. We're going to do the master site coming up. Let's do it. Coach Pete's master site. Let's do it. But right now, we don't have it. Until then. But we're going to. So you see, you're getting a look inside my mind right now, folks. I've got over 700 domains, Thomas. I'm sure we can find one. I'm sure. So the one I want to give out is a very good one. It's about my new book, Modern Planning. But the site is planonceplanforlife.com. Planonceplanforlife.com.

00:47 Go there. You can download the e-book right now. We're working on an audio book coming up. But right now, you can download the e-book by going to planonceplanforlife.com. It's about 250 pages. And it really puts things in perspective about lifetime income. We're talking about today. The financial termites. How much 2% or 3% fees can cost you as far as what you could have had in your retirement and what you don't have in retirement. And making sure that you have income you can't outlive. Principle that cannot lose due to the market. That's important, too, by the way. Yes, it is. A floor under the spouse. In other words, making sure your spouse always gets income even if you're not here anymore. Ah, yes. And so that's what I call a floor under the spouse. Not knocking your spouse on the floor. And making sure your money isn't doing nothing. It is doing something. It needs to be doing something at all times.

01:33 Going up, not down. So planonceplanforlife.com. Now, what do you want to say? I love it. So the one I am going to focus on is a great do-it-yourself tool at asapplan.com. That's asapplan.com. As you folks know, if you're a regular listener to the show, Coach Pete has a 22-step total retirement plan process. And what we want to do is to try to enable you to take those steps yourself. Kind of figure out what are you missing? What do you have in hand? What questions do you need to be asking? We are developing a new electronic device. It's a calculator on steroids. But take your time. Go over there. I personally would love to hear your feedback. I'm helping develop this. And we want to make sure it's a tool that's beneficial to you. And again, that's at asapplan.com. Again, asapplan.com.

02:18 And we also are keeping track of when you go there because we're going to give an award of a $100 gift card to Ruth Chris for people that go there and give us any feedback. So we're going to draw the name out here in a couple weeks on the show. There you go. Help me out and I'll help you out. asapplan.com. You can't win unless you go and visit and let us know you visited, right? So that's kind of... That's it. That's what Mike thinks. What else? We've got financialsafari.com too if you want to ask a question on the show. Always. Yeah. If you want to ask a question or just catch up on podcasts, check out the television show. And that leads into the Financial Fill-Up Challenge. If you go to financialfillup.com, we would love to have contestants or audience members for our financial game show. You can also subscribe to the channel. Check out our past episodes. It's a really, really fun game show. A great way to look at retirement. Find out how much you actually know about the process.

03:04 We film episodes every three weeks, folks. So call, get on the list. Either be a contestant or if you want to be in the live studio audience. A lot of good giveaways there during the show too. Oh, it's fun. Yeah, we get gift cards we give away for winners too when they win. Yes, we do. And hey, it's a great way to learn the financial world rather than sitting in class trying to learn it. There you go. Hey, Mike, if you ever ask this question to somebody, you say, when the market had its worst week in years, did you have a single dollar sitting somewhere that you couldn't lose a dime? Oh, that's a great question. I mean, it's a fantastic question and one that a listener should listen to, right? Is, you know, I've never asked anybody that question, but one of the questions I ask is, what's the amount of money that you're willing to lose? Yeah. Because it's a similar question that you're just asking there.

03:53 Because at the end of the day, right, when you go to retirement, you don't want to have to continually watch CNBC or Bloomberg every day. You want to spend time with grandkids. You want to go make an impact in the community. You want to travel. And, you know, like having that stress and fear of watching the news every day becomes depressing, right? Because it's almost like riding a roller coaster. And as you get older, roller coasters are not as fun because of like just your age. And so that whole idea of losing money in retirement is not something that at least the people I talk to in our practice won't want to partake of. Unfortunately, a lot of people that we talk to, I wrote another book called Retirement Deja Vu. It's that feeling that you get when you hear the same story over and over again.

04:41 You know, deja vu. We all get that eerie feeling. And retirement deja vu is what I actually experience when I sit down with a new client because I hear the same story. If I talk to somebody from Edward Jones, like a client of Edward Jones, it's the same story. If I talk to a client from Merrill Lynch, it's the same story. If I talk to, you know, if I talk to people at different firms, I know what that firm's doing. They're just, they're selling the same investment plan in their 9, 11, and 1 o'clock meetings every day. And we actually want people to break away from retirement deja vu. And, you know, ours is the one-of-a-kind financial plan. Yours is the fill-up. And we want to make sure that everybody is getting what they need out of life. Because this life is about you folks. It's not about us. It's not about our life.

05:27 It's this life's about yours. Yours is the only one you can live. And you want to make sure your money lasts as long as you do. You know, we get to share our knowledge with folks. I mean, we've seen, I think I could say this, 34 years. I've seen about every kind of situation you could ever imagine. And I would rather, like my dad used to tell me, that a smart person learns from their mistakes. Like if you're trying to hammer a nail in and you hit your thumb, you won't do that again, will you? Let somebody else hammer. But the genius learns from other people's mistakes. So I've seen all the mistakes out there. And when people come in, I already know what kind of mistakes they're making. I can tell them right away. And Mike, a lot of times it goes back to, like you're saying, which company they're utilizing, which investment advisor or investment company. Because certain companies we can already identify. We know they're going to have a mutual fund strategy as well as a variable annuity in there when we meet with them.

06:13 We already know when they say what company their money is with. So I think it's just important to make sure you understand that there are solutions out there that don't involve taking risk. And not all the money should be there, but some of the money needs to be there because we never know what's going to happen the next year. And it brings back memories. 2006, I used to do a live show on WFNC. That's in Fayetteville, North Carolina, right off of Bragg Boulevard. It was a Krispy Kreme donut that I used to always go there. I would get because it was a live show. So I'd get to the Krispy Kreme about five in the morning on Saturday because the show was at seven. Because, Thomas, you never want to be late to your own show. Sure. And so anyway, I met a whole lot of friendly people in Fayetteville. And then I was at a kitchen table with a couple that had called from the show. This was 2006. 2006. And I was sitting at the kitchen table.

06:59 And the husband and wife were on the other side of the kitchen table. And I had the wife's attention. But I kept noticing that the husband, even though he acted like he was looking at me, he was looking over my shoulder. And so the paranoid person in me, because I've seen, I think, psycho movies were out there. I was wondering who was standing behind me because I thought I was getting ready to get tomahawked or something. But I turned around. I casually dropped my pen. And I looked around. There was a TV behind me. And guess what channel it was on? Tell me. CNBC. The price is right. Yeah, CNBC. And he was watching. And his wife said, when his wife finally noticed what I was doing, she said, let's just call him Harry. Harry always has that stupid channel on. And we can never have any fun because we always have to be watching our retirement. Ooh. And long story short, they got two financial fill-up strategies.

07:45 And they've been happy ever after. And so that's what you have to have. And we took the warrior out of living retirement. We left some money in the stock market so we could still play around. But he wasn't glued to the TV anymore because he knew his retirement was safe. His income was safe. And he always had that monthly check coming, regardless of what happens in the market. And there's another thing. When we talk about income riders and we talk about monthly checks, usually they're associated with annuities, Mike. And so somebody's listening now. They say, oh, God, annuities are bad. My broker told me annuities are bad. I heard they are ripoff. What would you say if somebody said that? You know, in the last segment, we talked about how annuities work for business models. All these financial companies, right? Goldman Sachs, all the big firms, right? Yep. Fees every month is an annuity. It's an income stream for them folks. It works for the big banks.

08:30 It works for the big investment companies. And yet they tell you it doesn't work for you. To me, that sounds like they're being hypocritical. But what annuities are they usually selling with those fees, though? They're not usually the friendly annuities that we like, are they? But it's the variable annuity side. Those can have up to 4% or 5% fees a year. Yeah. And those are the ones that hurt performance. Because they're saying, let's use a variable annuity because we can still participate in the market. What they're saying is we can still participate in the upside and the downside of the market with a high cost. There's a lot of strategies out there, like fixed index annuities, where you can participate in the market, but none of the downside. Right? There's strategies. Like even MYGA's right now, multi-year guaranteed annuities. 5.5%, 6% income payments off of those for a fixed period of time.

09:17 But the income riders, when you put that on an annuity stream, even when your dollars may run out, right? Even if you outlive your money, you can never outlive the income that comes from those. That's the insurance company making a promise to you, making a guarantee statement. And listen, you shouldn't guarantee, you know, annuities are bad, right? Because the insurance company promised me they must be making money. Well, yeah, man, the insurance company's making money. There's nobody in the insurance business that is nonprofit out there. Right. There's no banking that's nonprofit. Well, there's no business anywhere that's nonprofit, even though they call themselves not some of these nonprofit places. They're making a lot. If you look at the owners, they're making a lot of profit. Correct. But listen, don't worry about their business model.

10:05 And that's when, unfortunately, when people say, I don't like annuities, what you're really saying is, I don't understand the business model. How can they do that? It sounds too good to be true. That's when you work with somebody who's done this. Pete, you've been in the business for how long? 34 years. In those 34 years, you have worked with thousands upon thousands of retirees, correct? Yes. Correct. So a lot of times when people go into retirement, they're going there for the first time. Yeah. Don't you want to work with somebody who's been to retirement, who's lived in retirement? Who's worked in retirement? For people, thousands and thousands of times. That's why working with a certified financial planner, a fiduciary, working with a group like Pete and the team there, they live retirement.

10:58 They work retirement. And they understand strategies and techniques that's going to make you feel more comfortable and safe in retirement. Don't work with somebody who lives in the market. Work with somebody who lives in retirement. I'm a retirement income certified professional, RICP. That's from the American College, same place where the CFP is. And I'm trained on income because that's what I've done for my clients. And honest answer, some annuities are lousy. They have high fees, long surrender periods, and they're sold to the wrong person. I would never defend one of those. But there are plain vanilla income tools that do one honest thing, a paycheck for life. The word annuity covers both. The way a car covers a lemon and a Toyota. See? So the word annuity gets people in trouble because they haven't defined what kind of annuity it is.

11:44 And my job as your personal CFO is to shop, to guarantee, read you the fees out loud, if there are any, and check the insurer's rating. And if it doesn't fit you, I tell you it won't fit you. So, you know, we basically are like the tailor. We'll come and custom fit the retirement plan just like the tailor custom fits the outfit to you. So if you'd like your very own tailor fit, total retirement plan and income, taking that worry out of planning and living in retirement, call now. We'd be very happy to sit down with you next week. And the lines are open. The number to call is 800-661-7383. 800-661-7383. You can also reach out to the team by texting the keyword plan to 600-700. Plan to 600-700. Procedure on called 300-600.

See omnystudio.com/listener for privacy information.

Coach Pete D’Arruda and Mike Milligan discuss dedicating part of a retirement plan to income and understanding how an income rider works. They examine why a saver’s priorities can change near retirement, the importance of asking how a strategy is structured, and the difference between product recommendations and a plan built around a client’s needs. Part two of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Loving the conversation today. I'm Thomas Lipscomb in studio with bestselling author Coach Pete D’Arruda, also joining us today, host of the One of a Kind Financial Show. He's an author. Mike Milligan, catch up on the show by heading over to FinancialSafari.com. Mike, I'm sure you've been talking to clients for years, and when you talk to them about a true retirement plan, true or false, I mean, we really haven't talked about this ahead of time, so I'm kind of leaving myself out there. But do you believe that if someone is approaching retirement, they need to have some of their money dedicated to lifetime income? Oh, yeah. Like, you know, the book that I'm most famous for is a book called The One of a Kind Financial Plan. Our company, One Oak Financial, stands for one of a kind. So the one of a kind financial plan, the book I wrote,

00:46 says that you have to answer the question, why is money important to you? Because if you don't answer that question, how can an advisor really do their job, right? So answer the question, why is money important? You have to put a vision for what your life's going to be like. You know, what your community is going to be, what your focus on health is, and what's your impact. But then we get to, like, the actual tactical side. Taxes being the biggest expense you ever have, that's what we start with. Number two, then we go to retirement income. Because at the end of the day, right, most investment people, most one-size-fits-all advisors out there, they actually want to talk investments because that's how they get paid, and then they abdicate responsibility. They say, go to this CPA, go to this attorney, go to this insurance guy.

01:32 Because what they want to do is they want to solely focus on investments. But if you don't focus on taxes being your biggest expense, and retirement income being guaranteed that keeps up with inflation, you're just going to be finding a new advisor in retirement, and nobody really wants that. Because at the end of the day, the biggest thing that keeps people up at night is the fear of running out of money. And if I've done my math right, Pete, you can tell me this, but guaranteed means that you would never run out of money. Is that still true? Yeah, and the guarantees, again, they are only as good as the institution backing them. So you need to make sure you only put your money away long-term with companies that are going to be here for a long, long time, if not forever, right? And so how do you really know that? Well, you have to trust the numbers they put out, their books.

02:20 We've analyzed that all the time. We don't let our clients get in any company that's below an A rating. And so because of B or C rated companies, of course, they're going to offer more. But I'm not willing to take that risk with my clients. So they've got to be at least A rated. And there's something called an income rider that some insurance companies offer on annuities. And annuities are great because there are streams of income you can't outlive. The Roman Empire days, annuities were there. The soldiers would give some, when we're going to battle, they'd find the local financial guy. They'd put money in an annuity, which basically said, I want to make sure my spouse gets income when I'm gone. And if I don't show up back, I want that spouse to get the income forever. And that's how long annuities have been. And so the income riders, we've heard some objections, though, usually ignited by the advisor who doesn't want to let go of the money they have in the market, right?

03:07 Because if they let go of the money they have in the market, they lose their planning fee, their quarterly fee, which they call a fee. I call it commission, money's coming out. But here's one, Mike. I don't want to lose control of my money, somebody would say about an income rider. What would you say about that? Well, I mean, like, you're not going to take all of your money at one time. So, you know, the biggest question is, is what's the biggest check you've ever written in your life? So, you know, a listener out there has $2 million, and I'm like, I don't want to put a million of that into an annuity because I lose access to that. Well, what's the biggest check you ever wrote in your life? It's probably the purchase of a car. Maybe it's a college loan payment, or maybe it was that last check you wrote to pay off your mortgage. But for most people, that biggest check they ever wrote written in their life

03:52 is $10,000, $20,000, $30,000, $40,000. Why do you need access? Well, going back to that advisor for a second, Pete, that says they want to keep control of the money, most advisors out there don't leave all the money in the market because their compliance arms make them spread risk around between stocks and bonds. Yep. Well, you know, those income riders, you know, not to talk product or anything, but there's 6% and 7% withdrawal rates that you can get on that guaranteed income. Well, right now, what's the best bond investor in the world getting? Three and a half? Yeah, maybe four. Yeah, I was going to say between four and a half. Yeah, and so, but that's not a guarantee. The bonds can't guarantee you a lifetime income, can they?

04:38 No, no. 2022, bonds went down just like the stock market did, right? Because interest rate risk is a real thing. It's a big one. And so, like, using an income rider from an insurance company is a promise. It's a promise that the money's going to show up every month. It's a promise that it will never end, and it's a promise that you don't have to worry that money's going to be in your account. It's a promise that you won't run out of money. And that's the benefit of an income rider. And that's a big one. And so, like, the strong institutions that offer them, and again, we only talk about the strong ones, and some of them don't fit. I mean, everybody's different. So, there's all different ones. I like to put two different streams of income together for my clients. One for their bills. Those are the bills that are going to come, the housing, the car, whatever else,

05:25 and a little bit extra for emergency bills, or we factor inflation in, too, so put more than you're paying now because we've seen how inflation can affect your net worth down the road. And we also put a stream of income together for you that's going to come every single month all the way through retirement for fun, fun money. Who doesn't want some fun money? You're allowed to spend it for fun. You know, the reason why people don't spend, Mike, is because they're worried in their go-go years, they're worried that they're not going to have enough money. But if you have a guarantee in place that a new check is going to come every 30 to 31 days, showing right up, we call it the green flag on the mailbox, there's no worries anymore. Matter of fact, that's why people pass away when they have too much risk. They're always worried about spending, and they usually don't spend what they should or could. Holy cow, preach it, buddy. Keep going. Keep going, man. That's good. I mean, it's just mind-splitting sometimes how people don't take the right step for themselves,

06:12 and the right step for you listening is to get your very own total retirement plan. But inside there, make sure if you have a retirement plan, make sure it has the retirement income you deserve and you need, and you've been told you need to have. So if you don't have income that's guaranteed, you're not. You're just guessing. Thomas, we got the e-book on lifetime income. Probability is shot down by certainty. You've got to have certainty first. Let's get that e-book in people's hands. All they have to do is call right now. And that number is 800-661-7383, 800-661-7383, or just text keyword PLAN to 600-661. 700, that is keyword PLAN to 600-700. So, Mike, why do you think, you know, well, I know, but why do you think that this one side of the financial world that is constantly lobbing grenades over to the fixed side, the side that guarantees income?

06:58 Well, listen, guys, it comes down to that word fiduciary. A fiduciary is going to do what's in the best interest of the client. Yep. But these firms that manage money for a fee have owners, stockholders, board of directors that are telling you, keep the stream of money coming over to our business over and over again. Pete, do you know what a stream of income is? Oh, yeah, I do. It's an annuity. Yes. It's an annuity. Right. So an annuity, you know, staying in the market, paying a fee every month or every quarter is a stream of income to the business. And so why is an annuity, the stream of income, good for the business, but they will tell you it's bad for you as the consumer?

07:43 It's, you know, it's people who act one way and say something another way. I think we call those hypocrites. And there's a lot of hypocrites in the financial market because how they run their business is how they tell the consumer to not run their household. And all the risk is put on the individual. People, if you have money invested in the market, you have control of that. If you're paying somebody a fee, you have control of that. You can end that. You can use their business model, guaranteed streams of income in your life to reduce fear, stress, and anxiety in your life. And that's probably worth a call in to the show today to see if the model that works for these companies that are earning record dollars.

08:32 Guys, go look at the earnings of Goldman Sachs, JPMorgan Chase, Bank of America, Wells Fargo over the last quarter. Record numbers, record revenue because they have annuities baked in their business, right? Take back control, right, of your future. Get guaranteed income because it's better in the long run. If it wasn't good as a business model, Wall Street wouldn't be doing it. You need to be doing it on Main Street, in Raleigh, in Apex, Chapel Hill, all across the country. You need to take control and call in to make sure you have that guaranteed income. Well, nobody starts a long drive with a quarter tank of gas. Everyone in retirement needs that financial fill-up strategy. Folks, if you want to find out how it could be customized for you based on your numbers, we're not saying take all your money from risk.

09:22 We're saying take enough money to make sure you never have risk with your retirement income in the future. Thomas, let's do this for the next 15 people. Not only are we going to give a total retirement plan, we're going to give them that book, the 22-step total retirement plan. Oh, fantastic. It's a $99 value when you come in. And we're also going to give you a golden ticket where you can share it with a friend or family if they want to get that plan as well. And I'm going to give you three of the books I've written. When you come in, you'll get to choose which ones you want. Thomas, tell folks that I can do that right now. Yeah, super easy. Just call the number 800-661-7383. 800-661-7383. Coach and his team will help you understand what an income rider could provide for you and how it fits into your retirement plan. You can also text us by texting keyword plan to 600-700. That is keyword plan to 600-700. So take that quarter tank and fill it up every single month with that financial fill-up strategy.

10:11 You never – hey, Mike, you've had that feeling. You've gambled before when you're riding down the road. And you say, well, gas is more – it's cheaper down the road. I'm going to keep going. But you see that little red. It's bouncing to the bottom of the red, the gauge. We can't have income like that. No, you can't do that in income, guys. Listen, I don't drive in Puerto Rico. I walk everywhere I go or I get in an Uber. But every time when I go back to Norfolk, you know, that's when I drive. And I have my SUV there that's parked in my garage in Norfolk, Virginia. The last two times I've been back to Norfolk, I'm not going to tell you that I ran out of gas both times. But I barely got to the gas station. Oh, no. You've been pushing your luck a little bit. Yeah, yeah. Because when you don't have somebody or you're out of practice when it comes to driving, you don't always notice what's there.

11:01 This is where that call in and meeting with Pete and the team will actually get you, you know, it'll get you somebody looking under the hood of what your investments are, looking at what the performance is, telling you what your real fees are, and telling you if you really got an income plan or you just got an investment account. Well, green money never sleeps, and it pays whether the market is open or not, whether the market is up or down. And, folks, that financial fill-up strategy. Remember when you used to pull – I remember being in the back seat, Mom would pull into the gas station. Mike, you probably remember this, too. Three or four guys would run out. They'd pop the trunk. They'd check the oil. They'd fill the windshield wiper stuff up. They would fill the car up with gas, all done from the comfort of Mom just sitting in the seat.

11:49 Thomas, those were the days, as they say, in Archie Bunker, right? That's a dream, right? So let's make sure you get your very own financial fill-up strategy, and it really does take the worry out of living in retirement. When you can have certainty and not worry about probability anymore – probability is for Vegas, and that's fine with your leftover money, but not money you're going to need the rest of your life, folks. And I've been saying this for 34 years, and I still mean it today. Thomas, tell folks that they can get their very own financial fill-up strategy. All right. Just call 800-661-7383. 800-661-7383. And you can ask Coach's team to run those numbers with you. Make sure you understand how Income Rider works and that you have enough income in your retirement savings that gives you that certainty as you go through retirement. The keyword as well, plan, to 600-700. Just text keyword plan to 600-700.

12:35 That's it.

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Mike Milligan of One Oak Financial joins Coach Pete D’Arruda and Thomas Lipscomb to discuss retirement income as an asset. They explore the difference between an account balance and a plan for monthly spending, the uncertainty of market returns, and the role income can play in supporting a retirement lifestyle. Part one of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome into the Financial Safari. Excited for our show today. I'm Thomas Lipscomb in studio alongside bestselling author Coach Pete D’Arruda. And joining us, we have on the line Mike Milligan, founder of One Oak Financial, host of One of a Kind Financial Show, and a friend of the show as well, a friend of Coach Pete's for a very long time. Hey, Mike, how you doing? I'm good, Pete. How are you? Good. Hey, Thomas, tell everybody where Mike is joining us from. So Mike is joining us from the beautiful land of Puerto Rico. Oh, Michael would say beautiful, right? Is it beautiful down here today? Oh, my gosh. It's 84. It's 84, 85 every day. It's absolutely gorgeous down here. And it's a little bit of a breeze. We haven't had that heat that you guys have had back in North Carolina, right? That has just kind of been stifling over the last month or so.

00:46 It's been crazy. Same every day. Same every day. Watching the U.S. Open on TV the other day. And the players who aren't used to humidity, like even in the first set, they were like, they look like we're getting ready to die. We're used to this, Mike. I mean, I worked in the watermelon fields one year when I was in high school. And remember, I'd been working in the fields back in the day. I don't know if you ever did that. But you're a Scotland County guy, too, by the way, aren't you? Yeah, yeah, that's right. That's right. Coach Willard. Yeah, Coach Willard. Willard's watermelon. So a little history, folks. Mike Milligan there. My mom taught him seventh grade, and we found that out a couple years ago when we met. I didn't know who he was because I'm a little older. But my mom taught you, and that's pretty funny. That's funny, yes. That's right. Small world. Ten years different in age. We ran the same streets. As a matter of fact, we were talking, you know, before the show today,

01:33 we were talking about just some things, you know, that happened back in Scotland County. Good old LBG. You had to make your own fun back in the day. Yes, you did. The good thing there was no social media to tell everyone about the fun you were making. Yeah. Nowadays, kids are getting into trouble. They post everything. Thomas, we always talk about, like, Pete and I, when we went through elementary, middle school, and high school in Scotland County in North Carolina, North Carolina was the 50th ranked school in education in the nation. Oh, wow. I didn't know that. Wow. There are 100 counties in North Carolina. Scotland County was 100th. So we literally got the worst education in America. The lowest below. Wow. Hey, you're talking junk about my mom? And yet, here we are. The college goes back in the road.

02:20 You cannot be serious. Be serious. I said U.S. Open. So might as well play a little macro there. No, I mean, it is. My mom took it serious. My dad was a college professor. But, yeah, unfortunately, they don't put in. Well, back in the day, we had the mobile home classrooms, and we had the cinder block schools. Look at these Taj Mahals they're building now. I think they're putting money into the wrong places these days. Instead of building big buildings, they should build big mines. That's good. I like that. And the problem was is, like, when your mom had us in her class, right, there were 28 middle school kids in there, right? And we were more worried about, like, man, that girl looks good now because hormones were kicking off. Right? We weren't worried about, like, you know, Pythagorean's theorem or, you know, the atomic symbol of hydrogen. Right? We just weren't interested in it.

03:06 We were interested in what we're going to do in the field later today and what we're going to do in the break. Unless you're going to be a chemist in the future, it really doesn't matter what the atomic symbol of hydrogen is. It's more important to worry about life. And what the most important thing is is to establish a plan in your life, even if you're not the kind of person that likes to write things down, at least have it in your mind. And when we do a plan, Mike, we like to call it Plan Once, Plan for Life. And it's how to give every dollar you own a color and a job and put a check back in your mailbox every single month for as long as you live when you retire. And stop the quiet leaks that have been eating your money alive while you weren't looking. Those are called financial termites. We put a plan together. We eliminate those financial termites, which could save you 2% to 3% to even 4% hidden fees a year not coming out of you, not evaporating out of your portfolio, staying there.

03:55 Over the course of a 25-, 30-year growth cycle, you're talking about about a million dollars you're losing when you talk about the money you lost plus the interest you could earn. How embarrassing is that in the financial world that some advisors are doing that to people? It's absolutely crazy. But think about this, though, Pete. Like when people go to their job, you know, most people work 30, 40 years at a job. When they go into their job, they have a written job description that they know exactly what they're going to get paid for doing that work. And they have somebody helping them along the way, a manager or a coach or a supervisor, right, helping them in their job. And then they go into retirement and they're, you know, they're trying to do it themselves with something that's not written down without a plan. You would never go to work without a plan, right? You would never try to build a house without a plan. You would never try to go on a trip without some type of, you know, some type of itinerary.

04:45 And most people are just, they don't treat their money the same way. And that's what we, I mean, that's what you guys do at your firm when people call into your show is you put this plan in place. That eliminates, right, a lot of things that people don't even know they have, just like termites, right? Most people don't know they have their termites until they're too late. Most people don't realize what advisors are actually charging because, you know, maybe we can talk about this, the things that we've heard advisors say. Yeah. I've heard advisors say, just trust me. Just trust me. You've got my word on it. That's right. Follow the green line, right? I mean, all of these marketing slogans are the best one. The best marketing slogan out there right now, I am a fiduciary.

05:31 Oh, we hear that all the time. Right. Sometimes I say, well, if you are a fiduciary, why aren't you offering a true income plan to folks so that when they hit retirement, they never have to worry about where the income is going to come from? Why haven't you given them a green flag on their mailbox where every month the postman is going to bring you a check? I mean, you have to spend it because the next month another one is coming. So the game here is spending your money, not trying to save it because you've got to spend it because it's coming in faster than you can spend it. That's the ultimate goal of retirement. Well, the biggest asset you have in your life is your income. And most people just don't realize that. Income is an asset. Yeah. Right. Income in retirement is what helps you sleep at night, what keeps you from being fearful. And it's what keeps you motivated.

06:17 Pete, you've seen studies before, right, that people who have guaranteed lifetime income live longer. Why do they live longer if they have guaranteed lifetime income? Less worry, man. And they're not worrying themselves. You heard that phrase, I'm worrying myself to death. Well, I mean, it's truer than you think. It is. Absolutely. Absolutely. Emotion matters so much in so many different things. And I want to make sure our listeners know that you can connect with Coach Pete's team here at Capital Financial. Just give us a call. You can get these questions answered that Mike and Coach Pete are talking about right now. Again, the number 800-661-7383. 800-661-7383. You can also text us if you'd like to take that method as well. Just text the keyword plan to the number 600-700. That's the keyword plan to the number 600-700. Mike, I agree. I think the most important asset class is lifetime guaranteed income.

07:05 Without that, you really don't have a retirement plan. And if we're truthful, and if we all were truthful, if the listeners would just sit back and just be honest with themselves right now, most of the advisors out there do not give you a guaranteed income plan. They give you an investment account and say we're going to take 4% of it. They say let's put this money in this sleeve and you'll just draw down on it. That's not a plan, folks. That's the investment guys still capitalizing by keeping more of your money so they can charge more fees. And at the end of the day, a written income plan is something totally different than a 401k, an IRA, or a brokerage account. A written income plan says what's going to show up in my account on the second Tuesday of every month.

07:51 What's going to show up on the 17th of every month in my checking account so I can pay my bills. A written income plan is something that helps you no matter what's happening in the stock market. We've got something we call a WSST. It's a Wall Street sales tool, WSST. And the biggest Wall Street sales tool we see that is used to put people in the wrong place for retirement, I feel, is something called the Monte Carlo simulation. Are you familiar with that, Mike? Oh, 100%. It's the thing that it's, you know, I mean, what most people don't know about me is we talk about me being the founder of One Oak Financial. And I've written books and, you know, we've done all this. But I'm also a professor at Old Dominion University just across the border in North Carolina, in Norfolk, Virginia. I teach personal financial planning and principles and ethics of financial planning there. I do one class a semester just so I can stay up with what's going on college campuses.

08:40 But Monte Carlo simulation is just, it's just, today it's just AI. AI saying what's the probability I'm going to run out of money? Yep. Yep. It is, it was made, but it looks in the past, guys. Monte Carlo simulation doesn't look into the future to see what's happening today. It doesn't, it doesn't, it doesn't, a Monte Carlo simulation will not pay the bills. It will not get you to your grandkids' first day of kindergarten. It will not get you on that vacation to Europe that you want to go on. And it doesn't provide the legacy that your family really wants. It's investor talk to keep more money so they can keep paying fees. Back in the day, there was, I think it was like Times Square usually got the rap for there.

09:26 Even Myrtle Beach down at Broadway area, there'd be a guy with a table set up and he'd have three solo cups and one ping pong ball. And you put bets on where the, you know, at the end, you'd watch, you'd start where the ball was at the start, and then you'd put bets at where it was at the end. It's the old hidden ball trick kind of thing. And so Monte Carlo simulations is similar to that, in my opinion, because it's all depending on what age you say. Because you're saying based on if I kept all my money at risk and I got income from it and they put at, and I live to age 80, what's my percentage chance of it being okay? And usually that's like 94, 92 to 94%. But then, Mike, if they put 85 or 90, the numbers get worse. And, you know, I want my clients to live to be 100. And if you put 100 in a Monte Carlo simulation, you're going to fail a bunch.

10:12 But even just failing one out of 12 times, that's what 92% is. Are you willing to be that one out of 12 that fail by keeping all your money at risk? And if the answer is no, there are solutions. Matter of fact, we have a, I've got a brand new research paper I wrote this week called The Power of Income Riders. How do you get guaranteed lifetime income for isolating some of the money you have? Not all, but just get enough income or two or three streams of income. If you'd like to get a copy of this, let's say, e-book, and it's about 40 pages. Call right now. We'll send it to you. All right. Very easy to do. Just call 800-661-7383. 800-661-7383. Or text keyword plan to 600-700. Plan to 600-700. But, Mike, I guarantee you when people have that, when the broker gives them that Monte Carlo simulation

11:01 or the guy claiming to be a fiduciary that keeps all their money at risk, I bet they don't tell them what age they run it to. Or they brush past that. Because if they told me here, if you live past 85, we really can't guarantee these numbers. Well, heck, I want to live past 85. This isn't Logan's run where they eliminate you at 30. Yeah. Right. Hey, Pete. Hey, Pete. You fly a lot. Yeah. I mean, you move around a lot. If you were to. On a plane. The next time you get on an airplane. Yeah. If the pilot gets on the air, says, you know, thank you for, you know, hopping on today. You know, we've had a little technical difficulty with the plane coming in today. They didn't have a lot of gas. We have a, we have an 86% chance to get to our destination safely. Would you stay on that plane? That's more than one of 10 chance we're not going to get there.

11:46 So, no, I'd be the first one off. If they said, I said, pilot says, well, you know, hey, we just found a little more gas just sitting out there. Now we have a 92% chance of flying. Would you still stay on that plane? I'd be gone, man. I just want to make sure. Right. No, and we have to take that same correlation with retirement. So, folks, if you want to make sure to get your own retirement plan, then you don't worry about the market. And it's going to be there. Certainty, not probability. That's what we're offering here. Call right now. The next 10 of you will put together a true Coach Pete's power plan. Total retirement plan for you. No cost or obligation. We're here for you. 800-661-7383. 800-661-7383. Or text keyword plan to 600-700. That is keyword plan to the number 600-700.

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Coach Pete D’Arruda and Phil Graham examine costs that can quietly reduce a retirement paycheck. Topics include Medicare’s income-related premium adjustments, taxes on Social Security benefits, Roth conversion considerations, and the cumulative effect of investment fees. They discuss why understanding these rules before making withdrawals can help frame a more useful conversation with your financial and tax professionals. Part four of the Financial Safari interview.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Consumer advocate Thomas Lipscomb here with you alongside Phil Graham, special friend of the show here alongside bestselling author, America's Wealth, Financial, and Income Coach, Coach Pete D’Arruda. Get your own questions answered or tune in to past episodes and check out all of our free resources by heading over to FinancialSafari.com. Again, that's FinancialSafari.com. And don't forget to subscribe to us on YouTube. FinancialSpeakeasy.com is the way to get there. Again, that's FinancialSpeakeasy.com. We're releasing new videos all the time. Great way to make sure that you are up to date on what you need to know heading into retirement. Let me give you one more site while we're doing it. PlanOncePlanForLife.com. That's where you can, if you go there right now, we'll send you one of these e-books out right away. The Modern Planning, PlanOncePlanForLife.com.

00:47 Thomas, there's five, and Phil, and everybody else out there in Radio Land, there are five quiet drains on your retirement paycheck, all right? These are quiet assassins. We don't like quiet assassins when it's touching our money. None of these is a scam, and nobody's going to call you about them. Every one is a rule working exactly the way it was written, and every one of them is far easier to deal with before it applies than after. Very, very important. That's why we're going to talk about it. That's good. Now, I've sat across the table from people who did everything right. They saved steadily. They stayed out of debt. They retired with more than they needed, and still watched a few thousand dollars a year walk out the door for reasons they never saw coming. So we're going to talk about what they are. And it's not because anyone cheated them, Thomas and Phil and everybody out there. It's because a threshold moved past them, or a look back caught them, or a rule that they had never heard of finally applied.

01:42 That always stinks to be zinked by something like that. So what follows? We're going to talk about the five I see the most, the five quiet drains on your portfolio. And all the figures are 2026 figures that we're going to talk about here. So they're pretty up-date. But the first one is something that, Phil, we've talked about this, Thomas, as well, off show. And it's one that came out of nowhere. It's called your Aunt Irma. I-R-M-A-A look back. Thomas, not a good thing. Doesn't sound like a good thing. And when I first heard this word, I thought, because my wife is from Holland. Hold on. I feel like I've heard that as a name before. All right. Let me tell you what it stands for. It stands for Income-Related Monthly Adjustment Amount. In plain language, it's your income. If your income is above a certain line, you pay more for Medicare Part B and D.

02:31 And these are two things about it that catch people. All right. The two big things. First, it looks backward two years. So your 2026 Medicare premium is set by your 2024 tax return. Whoa. Now, a lot of people didn't realize that. No, that's interesting. And not this year's income. Not last year's. The one you filed in 2025 for the year 2024. Talk about confusing. Phil, what do you think about that? Can you repeat the question? Can you just listen to it? I was listening to the years, and in my brain, I'm trying to track. And then that last part, I'm like, now I'm lost again. I don't know. That was the correct answer right there. You're lost. Yeah, I can't figure it out. Yeah. So keep in mind, if 2024, we're talking about 2024 and you're in retirement now, possibly

03:18 that was your last full year of work. Or the year you sold a rental property. Or the year you did a large Roth conversion. And now it puts you way over that threshold. And second, it is a cliff, not a ramp. You know, ramps are easy to deal with because they're slow and steady and gradual. A cliff. Now, I've never jumped over one or walked through one or walked over one of you. You wouldn't be here. Exactly. No. You know, I think of those movies, though, where you see all the buffalo or wherever it is, and they're following each other, and they'll just go right over this. Yeah. So what do I mean when I say a cliff? Well, there's no gentle phase in. One dollar over the line. One dollar over that line that they say, the line of demarcation. Just one dollar. And the full surcharge applies for the entire year. Talk about a government penalty. Wow. How does that make you feel? Don't like it. Now, there's something called a QLAC.

04:06 QLAC. Qualified Lifetime Annuity Contract. Now, these have been developed. They've been around for years, but a lot of people don't realize what they are. And what this is, is for IRA money, which really can kill you when you start doing those minimum required distributions, right? MRDs. You can take the money off that MRD equation by every dollar you put into a QLAC. So let's say you have $500,000 in a regular IRA, and you don't want to keep paying those minimum required distributions on that. So you transfer, let's say, $300,000 into a QLAC. Okay. Now, the QLAC now, that takes $300,000 off of your MRD equation. In other words, you're not taxed on that each and every year. You don't have to take the money out. Oh, nice. And the QLAC says, and this is what confuses people, the QLAC says you have until age 85

04:51 to start taking that money out. The confusion, Phil, and I think you'll agree with that, is a lot of people thought that once you put money in a QLAC, you could not touch it until age 85. Is that correct? That's what people thought. Correct. But that's not the case. No. You can basically take it anytime you want. But when you take it out, now you have to start reporting it again on the MRD equation. Yeah. Uncle Sam's usually flexible when it means that they're going to get tax money sooner. Yeah. So I wrote a book about this called Quiet Money. And when you think about it, the money you put in a QLAC turns quiet. It's not sitting there yelling at Uncle Sam saying, hey, come over here and tax me. It gets really quiet and it hides legally. I like that. So that's a good one. That helps with a tax torpedo. We don't like tax torpedoes. Most people believe Social Security either is or isn't taxed.

05:37 It is neither. How much of it lands on your return depends on a number called combined income, which is your adjusted gross income plus any tax exempt interest plus half of your Social Security benefit. Cross that first threshold and up to half of your benefit becomes taxable. Cross the second one and up to 85% of your Social Security, which was a tax to begin with, by the way, is now taxable. Wow. Oh, man. Thanks, Uncle Sam. Here's the part that makes it a torpedo rather than a bump. Those thresholds have never been adjusted for inflation. Think about that. Have we had inflation the last few years? That means they're low is what you're saying. In other words, a lot of people are triggering that and didn't even know it.

06:23 So $25,000 was a real income in 1984. It is not one now, is it? 1984, $25,000. The Social Security Administration's own historians note that the thresholds were deliberately left unindexed and they document the result. The share of beneficiaries owing tax on their benefits has climbed steadily. In other words, if you have money, you're going to pay taxes now for Social Security because they're not adjusting that inflation amount up. So, I mean, it's $25,000. It's nothing anymore, but that starts triggering things. Yeah, sure. Yeah, that makes a lot of sense. Wow. Phil, how does that make you feel on that? Not good. And when I think about that, Coach, we always talk about it's based on your taxable income. Is there a way to get not taxable income that doesn't trigger that so I can still put the money in my pocket and spend it, but I'm not triggering all these phantom taxes?

07:10 Well, one of the ways is a Roth conversion. And a lot of folks, like David Walker, when he was on here, was talking about he has most of his money in Roth IRAs. And he should know he was our former comptroller general. And he said, Coach, the taxes are going up. There's no doubt. He said, so converting to Roth, it does hurt a little bit. Having to pay the taxes, he said, but now I pay taxes once and never pay again. Again, plan once, plan for life. And you don't have those required minimum distributions where you're forced to take it and your beneficiaries inherit it tax-free. Uncle Sam shows up next year. The tax man says, well, let me start taxing you on your IRAs and say, you know, I don't have any IRAs anymore. I have Roth IRAs. And so you just slam the door in his face. So if you want to find out about the Roth conversion strategies that make sense to make sure you don't get tax torpedoed, call right now. We'll do a plan for you that encompasses everything we've talked about today.

07:57 When you come in, you'll leave with three books. One being this new book, Modern Planning. Plan once, plan for life. You'll also leave with the 22-step total retirement plan. It's a workbook. It's $99. We're going to give it to you. But it's an interactive one. We will cover every step with you or behind the scenes for you and we'll categorize everything on one color-coded page that makes a lot of sense when you see it. There's no need for hundreds and hundreds of pages to confuse you. Put it all on one page and understand exactly what's going on, not only now, but later and after you're not here. All on one sheet. Thomas, tell folks how I can get this. Glad to. That number, 800-661-7383. 800-661-7383. Or you can text the keyword plan to 600700. That is the keyword plan to 600700.

08:43 And it's true. A total retirement plan is a lot more than that IRA or two or that 401k or two that you have. It is a true total plan. Well, here's a good question. Ask yourself, how much bigger would your nest egg be today if 10 years of fees had stayed in your account instead of leaving it? Oh. Bill, you've got a second point on that, don't you? Yeah. I look at it as, I used to say, coach, when is a 2% fee not a 2% fee? It's my little riddle. Yeah? Batman. Because 2% doesn't sound bad, right? It's only 2%. Well, but it's every year it sounds bad. But let's think of it, if you earned 10% in a year and you subtract 2%, that's actually 20% of your gains.

09:29 So that 2% fee actually wasn't 2%, it was 20% of your gains. Wow. So if you're giving up 20% of your gains or more, that starts taking a huge chunk of what could have been credited to your account. And again, what's the value for it? What did you get for it? Are you getting any value? Is it just evaporating and it's just coming out every quarter every year? Those are things that need to be addressed and looked at. And I think the consumer needs to understand where those fees are coming from. And most people have no idea what the total fees are because there's also the internal fees that you can't see in a lot of contracts. Financial termites. You know, it's not only where the fee's coming from, but where are those fees going?

10:18 Good question, huh? Good question for your broker. Right. What are you getting for those fees? So, you know, let's put this 20%. Now, 20% sounds bad enough, but let's look at a $100 bill. So a $100 bill comes in to your house. Before you touch it, it turns into an $80 bill. There's no such thing as an $80 bill. It turns into the 420s. One of the 20s goes away every single time you get that fee. And then that money that should have been your account's not there anymore. So now we have compounding badness. That's a good way to look at it. Yes, it is. And we've done a report before looking at a 2% fee over 20 years. If you had an account with no fees, and they both are in the same interest. So the only thing different was an account with no fees and one with 2% fees. It's about $500,000 difference. Phil, there's where the money went. Wow. That's a lot of money. That's a lot. That's the difference between a beach house in retirement or a trailer park in retirement.

11:07 That's right. There you go. Not good. So let's do this. Let's put a total plan together. It's been a great show, by the way. I appreciate your time today, Phil, coming in. Absolutely. Always love it. And it's very enlightening on some of the taxes that are out there and some of the ways we can bypass it, though. So it's been a positive show. We're talking about ways to bypass the will and the trust and the court, and also bypassing a tax man as much as possible. And legally, by the way, there's no such thing as illegal. You've got to pay some taxes, but there's nothing that says you have to overpay. So if you want a true total retirement plan, folks, we're going to make that offer for the next 10 of you to call. There'll be no fee or obligation. We've seen others charge over $1,000 for plans that I don't think are anywhere near as good as this. But you're also going to get that financial termite inspection report, which will identify these fees we're talking about here. Put it in real black and white. And then now you'll know if it makes sense to continue paying those fees or not.

11:55 Thomas, next 10 people, no cost, no obligation. And that number is 800-661-7383. 800-661-7383. You can also connect with the team at Capital Financial by texting keyword plan to 600-700. That is keyword plan to 600-700. Well, for Phil Graham joining us from the Charlotte area, Thomas, Denise, Jose working the board. It's Coach Pete. We'll see you next week. Same time, same station, right here on the Financial Safari.

See omnystudio.com/listener for privacy information.

Phil Graham and Coach Pete D’Arruda connect retirement income with the broader work of estate and legacy planning. They discuss the shift away from employer pensions, the stress of repeatedly second-guessing investments, and why a written strategy should explain how monthly income supports the rest of a plan. The conversation returns to beneficiary forms, financial blind spots, and reviewing costs before they erode savings. Part three of the Financial Safari interview.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. I'm having a great conversation. Thomas Lipscomb here with you alongside bestselling author, Coach Pete D’Arruda. Also in studio with us, veteran of the financial arena, financial strategist, Phil Gramming. Have a great conversation. If you want to catch up on it, just head over to FinancialSafari.com. Again, that's FinancialSafari.com. Not only can you catch up on this episode, you can catch up on past episodes, as well as check out all of the great resources Coach has made available right there, FinancialSafari.com. Yeah, I wrote a book called Plan Once, Plan for Life. Modern Planning. And modern planning, what is that? Well, I mean, our planning now, Phil, is a lot different than what our grandparents were planning because our grandparents had a pension. That's right. Most people listening now don't. And so this modern planning techniques, and if you're going to plan and spend all the time putting a plan together.

00:46 Thanks to the government. Yeah. But if you're going to spend all this time putting a plan together, do it once and don't worry about it anymore. So Plan Once, Plan for Life is our motto here. And let me ask you this question out there in Radio Land. Listen, how many times a year do you catch yourself checking, worrying, and second-guessing your money? And be honest with yourself. Now, if your spouse is right next to you, don't give it away with a look on your face because you might be in trouble. But I really think I worry about money. Thomas, you ever worry about money? Oh, certainly. I mean, who doesn't worry about money? Oh, yes. But the worries need to have some action attached to it. Worrying all the time is not good. That's what they call the – something called an ulcer develops if you do that. So what we need to do is get rid of that. And how do you get rid of it? Well, you don't go see a pharmacist because they'll give you drugs for it, right? And then that covers it up.

01:32 That really doesn't get rid of it. How you get rid of it is you rearrange your money. There you go. We're not talking about a Titanic, Thomas, by the way. You know, rearranging the furniture on the deck, was that a good job? It doesn't matter. It doesn't matter. So that's what happens a lot of times when people say, well, yeah, I'm just going to move from this brokerage house to this other brokerage gal. Well, that's just rearranging the furniture on the Titanic because the money is still all at risk. Correct? It's true. It is very true. And what was your point? And something else that you've mentioned in the past is paralysis by analysis where people get confronted with this, I think, of a tsunami coming at you and just don't know where to tackle it. And that can be very frustrating when you don't have a professional with you. Yeah. Well, it makes a lot of sense. So here's a question. Remember full service, Phil, at the gas station? Yeah. I think even in New Jersey, they still do that.

02:18 They still do. Yeah, they do. So you drive up, go over that little thing, and then that little bell would ring. I remember back in the day, of course, I was little Pete back in the Ambassador Station Wagon days with the wood panel. It looked like Chevy Chase's station wagon. Dad would buy them from the state auction. They were cheaper, like they were state cars. But we'd pull in, and Mom would be driving, and I think Bob or Jeff would be in front. I like to be in back so I could stay out of trouble. Mom didn't see what I was doing a lot of times. But we'd pull in, and two guys would run out. They would pop our trunk. They'd check the oil. They'd refill the windshield washer stuff, and they would fill the car up. And we didn't have to get out. And so that same kind of theory is what we built the financial fill-up strategy around. And let me ask you this question. What if filling up your retirement income worked like filling up your car?

03:07 You just pull in, and they top it off once a month, and it just keeps running all the way through your life. That's the everlasting gobstopper in the financial world. Remember Willy Wonka? Yeah. Yeah, I could get bored with the same candy, though, wouldn't you? I would. What if it kept putting new flavor, I guess? Remember the everlasting gobstopper? I mean, as a candy connoisseur, Thomas, growing up, I loved to watch Willy Wonka chocolate fag. Oh, me too, me too. And I'll tell you, I can always go back to a butterfinger. Never lay a finger on my butterfinger, as they say. But, Phil, we're talking about the financial fill-up. And a lot of people, again, ask yourself that question. What if you could just every month wake up, and there's a new check in your mailbox? How would that make you feel? That would make me feel fantastic. I would love to have my bank account get refilled every month. Yeah.

03:52 Well, it's possible. It's not one of those improbable things. The problem is a lot of people have their money at too much risk. And when you put your money at risk, what I've seen over my lifetime is if there's risk attached, there's commissions attached. And the commissions are called fees instead of commissions. But it hurts just as much when the money comes out. That's when they can say, well, we don't charge commissions. Well, what is this thing coming out of my account every quarter then if you don't charge commissions? Well, that's a fee. Oh, okay. Well, that makes sense. No, it doesn't. In perpetuity. Phil, does that make sense to you? If it's coming out of your money, who cares what they call it? It's the same thing. I call it a financial termite. That's good. Whether you make money or lose money. I've never seen somebody say that if they manage your money and they lose money, in that quarter, they won't take a fee out of you. Was it like stockbrokers and weathermen are the only people that get paid whether they are right?

04:41 Oh. Yeah. And, you know, the weather, you know, just canceling the cookout is a lot better than losing a lot of money in the market. There you go. Truly. Now that we have microwaves, always cook that hot dog in the microwave. Ballpark Franks, Phil. Remember those? They're still around. They're still around. What do you mean remember? Well, because they're different. What was their saying back in the day? Didn't they fill up the whole bun? They plump. When do you cook them? Ah, there we go. And they used to plump. I used to love that stuff. I'd take it out of the microwave. It'd be double the size. Sure. Not happening anymore. So I'm just wondering what kind of chemical was in there that shouldn't have been. Good stuff. Remember those balloons you'd grow and you'd blow yourself? You'd put the red tube. You'd put that chemical stuff that had a smell to it and you'd blow in the tube and it would make a big ball? Mm-hmm. Yeah. Remember the smell, Thomas? Oh, yeah. Did it remind you of model glue a little bit? I mean, you know. Thomas, don't admit stuff. But, you know, it's funny.

05:27 They don't make that anymore either. And I did some research on it. It was some chemical that has like 30 letters in it. Oh, Lord. Dialed methyl. You know, one of those things. Something that the Breaking Bad guy would probably use. Yes. So let's make sure that our plan is doing what it's supposed to do. And I want you guys, Thomas, do you have a trivia question? Because I want to give a couple of these new books out. Always, always. All right. You got it handy? Let's do it. Let me put the trivia music. All right, folks. So you're going to be able to text your response to the number 600-700. Yes or no? Can a beneficiary designation on certain accounts override what your will says? Yes or no to 600-700. What do you think?

06:13 Good trivia question there. Can a beneficiary designation on certain accounts override what your will says? Text yes or no to 600-700. That is either yes or no to 600-700. And again, you can also call and let us know your response there as well. 800-661-7383. 800-661-7383. And the book is brand new, hot off the press, Modern Planning, Plan Once, Plan for Life. Phil, I've got to get you a copy of this book. It's over 250 pages, and it is a instruction manual for a successful retirement, not just trusting what you hear, but verifying and writing. How important is that? So not hope and pray? No. That's not a strategy? No. And we're going to send this out to you, folks.

06:59 We're not going to charge you anything. I've already bought the books, and I'm going to buy the postage. All you have to do is buy the time, that minute, to text us your address. Truly. And if you have any questions, we can answer those, too. You're also going to get a golden ticket in this book, which will give you the ability to get your very own total retirement plan done for you. You can give it as a gift to somebody else if you want. If you come in and have the plan done, we'll give you another one to give to one of your closest friends or relatives. I just think it's important that we get educated, folks, and make sure our plan is doing what it's supposed to do, what we understand it to do, what we've been told it's going to do. Phil, let's return back to the six places you can put your money to bypass probate. Now, earlier we've talked about 401Ks, 403Bs, TSPs. They bypass any will or trust and probate. We have bank accounts with the POD, brokerage accounts with the TOD form.

07:45 They bypass probate and, again, the courts. And then life insurance, as long as it has a beneficiary form filled out correctly, it'll bypass probate. There's two more. Two more? That's right. You want me to tell you what they are? Do you consider annuities the same as life insurance? Life insurance, well, slash annuities, yes, because annuities have a beneficiary form that bypass probate. Good point. We also have traditional and Roth IRAs, individual retirement accounts. If you put a beneficiary on there, don't put beneficiary my will because it'll go right to will and it'll go right through probate. So you can bypass the will. And, again, we're talking about forms that, Thomas, I don't think people even remember what they filled out many times. No, it's true. You know, I was just going over my life insurance a few days ago and realized, oh, my gosh, I haven't updated my beneficiary designation.

08:31 Yeah, and you do the show every week, so that's no excuse. It's true, exactly. You know who has the worst yard in the neighborhood? The landscape. Yeah, because he's too busy doing stuff for everybody else. Exactly. So, Phil, that's five of the six. And number six, and Thomas, we used to have a drum roll. I don't have it anymore. But number six is joint accounts with survivorship. Phil, you want to talk about that? Yeah, and I'm always careful with the joint conversation on bank accounts because you could have joint signer, which confuses people, or joint owner with rights of survivorship. People hear joint, and they automatically think that it's set up properly, and a lot of times that's not the case because what did you ask the bank teller to actually do? And so, yes, joint bank accounts, if they're set up properly, can avoid probate, but it can't be a joint signer.

09:25 That rights of survivorship is a key element to that. Again, folks, that is Phil Graham, our financial strategist from the Charlotte, North Carolina area, friend of the show, and friend of Coach Pete for over 30 years. Phil is an expert whenever I want some information like this, and thanks, Phil, for that answer. Sure. Thomas, very important that people make sure that they have these forms reviewed. Yes. And, you know, you've got to ask yourself, when's the last time you really thought about this? And most people, it's been a while. You're thinking about paying your mortgage and everything else. You're not thinking about something more important, which is this. It's true. And once you die, it's too late. Oh, yeah. Well, yeah. You can't change it after you die is the problem. If you can figure out a way to do that, you should patent it. Right. Casper, the friendly ghost. Yeah, well, there you go. And so, yeah, it's just very important that we make sure that we're doing the right thing.

10:13 And a lot of times, we don't know right for wrong. And that's why we talk about it in this book, Modern Planning, making sure that you get those six bypass ways, ways to bypass the probate process in your mind. But not only in your mind, in your wallet. Because your money's in your wallet, your money's on your mind, on your money, on your mind, on your wallet, whatever that song was, Thomas. You know what we're talking about? I know exactly what you're talking about. Phil, you know what we're talking about, too. You've got a son. I know that song. Money on my mind and mind on my money. Got my mind on my money. That was Dr. Dre. Oh, yeah. Was he a real doctor? What was he doctorate? Music. Usually when I say something like that, I see Thomas typing away. He wasn't even typing. No, I wasn't even going to try. Phil, the financial fill-up strategy. How important is it? We've got about 40 seconds now.

10:59 How important is it for everybody out there to make sure they have their very own financial fill-up strategy that gives them that monthly check for the rest of their life? The key word you said, Coach, is strategy. It's not just a plan. It's not something you do after the fact. It is a true financial fill-up strategy. That lifetime income or that guaranteed paycheck coming in every month, and we can talk about this on a different episode, but it's been proven that people actually live longer in retirement when they have that money hitting their account every month guaranteed versus the hoping and wishing of just pulling it from their market accounts and praying it doesn't go down. And so I think it's one of the most important pieces of a retirement plan, and it's the foundation that the rest of your retirement, the rest of your estate plan is built around that financial fill-up strategy.

11:49 Yeah, very important. And financial termite's another culprit. Matter of fact, we have an e-book here on financial termites. If you want a copy of this financial termite e-book to help you identify unnecessary risk, fees, or commissions in your portfolio, we will send it right out to you if you call right now. And that number is 800-661-7383, 800-661-7383, or just text that keyword plan to the number 600-700. That is keyword plan to the short code 600-700. When we come back, we're going to talk about five quiet drains on your retirement portfolio, folks. Very important.

See omnystudio.com/listener for privacy information.

Coach Pete D’Arruda and Phil Graham discuss why a will does not necessarily decide who receives every account. They explore beneficiary designations, payable-on-death and transfer-on-death arrangements, life insurance, and the problems that can follow outdated paperwork. Hear the questions they suggest asking when reviewing who is named on your accounts and how those choices fit your family’s legacy plan. Part two of the Financial Safari interview.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome back into the Financial Safari. Having a wonderful show today. I'm Thomas Lipscomb here in studio with bestselling author, Coach Pete D’Arruda. We also have Phil Graham on the line, a friend of the show, who has been a financial strategist for going on 30 years. Coach, you have such great friends. Well, yeah, I keep good friends around. If they're very nice people, then I get along good with them. They're not trying to jump off a bridge, right? No, we don't want any of that. You know, we talked, I teased people before we left. I said six accounts that never read your will. And that's a strange way to look at it, but what does that mean? Well, you spend a lot of money on a will or even a trust, and some accounts that don't depend on that or don't even look at it, or you can bypass that. And so people spend real money on a will and then assume it governs everything they own. For a great many households, it governs almost none of it.

00:48 In other words, it doesn't really handle much at all. So the largest accounts pass from a form somebody filled out years ago. It's a form you fill out when you get in certain things. We're going to talk about that. And the will never gets a vote. In other words, there's some ways to bypass that will or trust. This is not a loophole, and it's not a mistake in the law. It's just how these accounts were designed to work quickly, privately, and outside of court. That's a good thing, by the way. The trouble is that the form is usually signed on the first day of employment, filed away, and never looked at again through a marriage, a divorce, a death, and 30 years of life. So, Phil, in other words, the 20-year-old Coach Pete has nothing to do with the 60-year-old Coach Pete. Right? A whole different thing. What if I had filled out a form when I was 23 and I started a 401K with a company, and now I'm 60?

01:36 I don't remember filling that form out. I don't remember what I did yesterday these days sometimes. What I had for dinner, that kind of thing. So there's six accounts, though, that you can buy. This is a good thing. I set it up to make it sound like it was maybe mysterious or not good. These are good things to bypass the court, bypassing probate and bypassing even trust a lot of times. You have to know what forms. A lot of people write all the language in the will or trust, but no one will ever read that because they filled out a form that bypasses it. So, Phil, do you want to give one of the six that don't depend on the trust or will? I would say probably 401K because it has a beneficiary. Exactly. But the real question is, do you know who the beneficiary is you have on your 401K? Could be an ex-spouse.

02:22 Is it your ex-wife? Yeah. So you never know. That's why we encourage people to review your beneficiary forms. And a lot of people don't even remember filling it out. But once a year, if you can, at least every five years. And when we get closer to retirement or in retirement, maybe every year because things speed up. That's right. I mean, years seem to go faster. So 401Ks, 403Bs, and TSPs. Now, TSPs are the Thrift Savings Plan. We've got a brand new book out called Thrift or Thrive. And if you're a federal employee, you really need to get your hands on this. And by the way, I love federal employees, Thomas. That's our mail people, and they do a great job. Anyone who works for FBI people. I love my FBI people. Don't want to get mad at me. But, you know, federal employees, you spend all your time. I mean, think about the mailmen and women. They're working seven days a week now, it seems like.

03:07 I'm getting mail all the time. So I really appreciate them. So I want to donate to them my appreciation. I've got the book, Thrift or Thrive. If you are a federal employee, all you have to do is call now, and I will send you a copy of this book. It's over 100 pages of very helpful tips and techniques to make sure you can maximize and truly benefit from your retirement plan and make sure you're doing the right things. So, Thomas, federal employees, the next 20 right now. All right, folks, just call 800-661-7383, 800-661-7383, or you can text keyword free to 600-700. That is keyword free to 600-700 because, Coach, great gift here. Yeah. Phil, this is just a fun topic to me because this is talking about bypassing probate. We've heard that phrase before. I just rephrased it a little bit. But bypassing probate. So we've got the 401Ks, 403Bs, and TSPs.

03:53 We count that as just one group. So there's five more places that you can make sure to fill out correctly and bypass that trust or will. Do you want to give another one or do you want me to? Well, one that I talk about a lot because there's certain accounts that don't naturally have beneficiaries. Sure. Bank accounts or certain investment accounts don't naturally have beneficiaries. So you have to add a TOD or POD, a specific form to specific people to transfer that money on death or pay that money on death, which does avoid probate to allow those accounts to go around them too. I've been amazed over 34 years of talking to folks in the financial arena that most people have never heard of this and many times didn't fill it out, especially when you open a bank account.

04:40 POD. Phil, basically you gave me two answers, too. You gave me two of the six right there. That's right. I'm an overachiever, Coach. But POD is payable on death, and you fill that out ahead of time. And that means when you pass away, as long as the death certificate is supplied, that money goes right to the beneficiary. You don't have to go through probate. That's the POD with the bank account. Your CDs, anything you signed up with the bank. Call your banker if you don't have that or don't see it or can't find it or don't remember it. Or bring in what you have here. We can call the bank for you, with you. And then we talked about brokerage accounts. That's where you have signed up, you know, online, maybe the E-Trades or wherever you have a brokerage account at. You probably either did or don't remember or maybe didn't do a TOD form. That means transfer on death. Phil, big question to you. Why do they just name them both the same thing?

05:26 I mean, they both do the same thing. They just want to be different, I guess. TOD for brokerage accounts and POD for bank accounts. Is there a reason? My understanding is the transfer on death transfers ownership, so that way you don't have to liquidate those investment holdings to pay it out. Whereas at the bank, it's just cash. You know, you're not worried about is the stock market up or down. Now, tell folks a very important thing about when we die, the money in our stock accounts, when the money passes on or transfers on to the next of kin. What kind of taxes are owed on that stock? Let's say granny bought UPS at, let's say, $5 a share. And that's $500 a share when she passed away. That's a $495 per share capital gain. What did the beneficiaries owe that day they inherited that money on granny buying that five, and now it's worth $500.

06:14 What do you owe capital gains-wise? If it's set up correctly, you can get a stepped-up basis. So what does that mean? It means you don't have to pay any tax, and me as the person inheriting the money, my new cost basis, what my future tax is going to be based on is that higher value, which is what a lot of wealthy people do, is they borrow from their brokerage accounts versus actually liquidating so they avoid the capital gains or at least defer it almost in perpetuity. Now, that's great. If you can afford that and don't need the money, then that's the best way to pass it on. Unfortunately, a lot of people have most of their money tied to the stock market, and they need to fund their retirement plan. And I've heard this phrase now three times from my advisors in the last couple weeks where people have said, I've got too much of a gain. I don't want to liquidate my stock right now, but they need the money to live on.

07:02 But they're worried about paying taxes. And my phrase, and I've used this phrase, well, I'd rather pay tax on a gain than have a write-off on a loss. And let me ask you this question, Phil. Do you think we are in, historically, are we in a good or bad tax environment for capital gains tax? We are in some of the greatest tax rates in history. So they're on sale right now. And with our debt going up every day, with more people needing Medicare, more people needing Social Security, and fewer people actually paying taxes, I think tax rates have – mathematically, they have to go up. Yeah, and whoever's paying taxes is going to be left footing the bill.

07:48 And now they're starting to go after your retirement income heavily from a tax perspective because that's where the bulk of the income is coming from. Yeah, well, we had David Walker on, former U.S. Comptroller General under Clinton and Bush. So he's on both sides. And he said, Coach, I had to resign because I got tired of signing checks and we're going to bounce. And he is agreeing where tax rates are going to go up like crazy. And so if you're delaying liquidating a gain now because you want to somehow hope for some imaginary tax deduction, I don't think those days are coming. And if you need that money, you're torturing yourself right now by not paying those taxes. And you're going to torture yourself in the future when you could have paid tax rates at what it is today. And what if we do this wealth tax they're talking about where they're going to tax you on all your gains anyway?

08:35 Or all the money you have in your accounts, by the way, not just gains. It doesn't make any sense. And taxes have been as high as 99%. Ronald Reagan, when he was an actor, it was the reason he got into politics is because any dollar he made over $100,000, they taxed at 99%. So he only did two films a year at $50,000 each because he goes, why would I work for a penny on the dollar? Yeah. So if you're in this situation, and a lot of you are, where you need money, but you're going without now because you don't want to pay capital gains tax, but you've got plenty of money sitting there captive in the market. And the only reason it's captive is because in your mind, you don't want to pay taxes. Folks, I don't either. I hate taxes. But you're going to have to pay some. But pay it now and get it moved before, number one, let's say that gain turns into a loss.

09:21 Well, now you're going to kick yourself if you didn't maximize your gain. And if you sell way up here, even if you pay taxes, you're going to have more than if you wait for it to go down and then sell at a loss. Amen. So call right now. We can go through with you all the different options you have, and there are more than you think. So Thomas, give our number out. The next 10 people call. We'll do a full review for you. And we'll also do that financial termite inspection report. You really need to know how much money is coming out that doesn't need to be. And it's hidden a lot of times. We have special tools and techniques. You can identify that. Call it a financial termite inspection report. It's included in my recipe for success. So call right now. We'll do it at no cost or obligation. And you'll leave with three books when you come in. And that number is 800-661-7383. 800-661-7383. Or text keyword plan to 600-700.

10:08 Keyword plan to 600-700. All right, Phil. That's six places that you could bypass basically probate. We looked at 401Ks, 403Bs, and TSPs. That counted as one. We looked at bank accounts with a POD form that's payable on death. We looked at brokerage accounts with a TOD form that's transfer on death. So that's three of the six. What's number four? I would have to say life insurance. I don't think we've said that yet. No, we haven't. Very good one, too, isn't it? And that's the one I think most people think of first is life insurance. Yeah. Well, the only thing that's required then is, number one, you have a policy. Well, true. And number two, you answered the questions truthfully on the life insurance app. Phil, we see with any kind of insurance that you have to be honest.

10:54 And so if you were a smoker and didn't say you were a smoker and you died, they're going to deny that claim when they figure out you were a smoker. They're going to give your beneficiary the premiums you paid back, but they're not going to give you the death benefit. So make sure you're honest on the life insurance contract. We talked about Ronald Reagan. We talked about Abe Lincoln. Honest Abe. Be honest Abe when you're filling out a life insurance app. There you go. Because they have a whole FBI-type staff there to make sure you're telling the truth. But all that's really required for life insurance is a death certificate. And number one is your beneficiaries, your folks that you're leaving the money to, they need to know you have that. And so we have the little green book of life I wrote a couple years ago. And it's 100 pages, interactive pages, which you fill out yourself. And it asks you all these questions. And you fill it out with policy numbers and phone numbers so that when you pass away, your next of kin doesn't have to waste years, if not even not finding things,

11:45 not knowing where you put stuff. So this is your treasure map for the grave. And so I'm going to give this out, Thomas, to the next 20 people who call and come in for their no-cost total retirement plan. Folks, this is invaluable. It puts you ahead of the financial world and tell folks how they can do that, get that. And we also leave with my book, the Total Retirement Plan. That's 22 steps. It's $99 on Amazon, but it's free if you call right now. And that number is 800-661-7383. 800-661-7383. Or text keyword plan to the number 600-700. That is keyword plan to the number 600-700. And we're going to cover the rest of the list when we come right back.

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Phil Graham joins Coach Pete D’Arruda and Thomas Lipscomb to discuss the questions that can reveal weaknesses in a retirement plan. They examine financial blind spots, hidden costs, market losses near retirement, and the difference between an account balance and a dependable income strategy. The conversation connects those risks with Coach Pete’s Financial Fill-Up approach to planning for future spending. Part one of the Financial Safari interview.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome into the Financial Safari. Excited for the show today. Consumer advocate Thomas Lipscomb with you here in studio alongside best-selling author Coach Pete D’Arruda. We also have a special guest on the line with us, Phil Graham, friend of the show, financial strategist that Coach Pete has known for a very long time, nearly three decades in the financial arena. Welcome in, guys. What's happening, Thomas? Oh, everything. I'm loving it. I'm excited for the show today. We haven't had you on in a few months here now, and every time we have you on the show, Coach, I got to say it. It's just a fantastic program. So much insight comes out. I've known Phil for over 20 years now, probably more than that, Phil. I mean, who knows? It's been a long time. We're getting older. Good thing, though. I like getting older. Better than the alternative. And he's in the Charlotte area, an area called Cornelius.

00:47 And when I hear that, I think of playing the Apes because I'm older. Ah, yes, yes. I think of Vanderbilt. I think of the Biltmore House. So, Cornelius Vanderbilt. Oh, there you go. He's in our series, Grow It or Blow It, Volume 1. Yes, he is. Bryson, he was a blow it, wasn't he? Not him, but his next generation and generation after that. His posterity. Yeah. Yes, absolutely was. Yeah, unfortunately. No, Phil, it's just a fast-moving world. We see this every single day and every single year, and it's been a great time knowing you. And every time we've got together, we've talked about some different financial things that have come up. So, one of the things is, the question we always ask each other, and it's good to think about, when the market had its worst week in years, did you have a single dollar sitting somewhere that couldn't lose a dime? That's what we ask people a lot of times.

01:33 And a lot of people can't answer that honestly or truthfully and say, no, all my money was exposed to bad things. Is that a good thing to have all your money exposed if and when the market's going all the way down or down? Even if it's not necessarily a good or bad thing, is it a scary thing? I think that would be frightening if I didn't know whether my money was safe or not, especially if I'm close to retirement. I think that would be a scary thing. Yeah. I mean, what if there's a lot of financial termites in there, too? I mean, and the first question you have to ask yourself is, what is a financial termite? You hear this guy on the radio talking about it. And then you ask your advisor, oh, don't worry, that guy doesn't know what he's talking about. That Coach Pete guy? No, he's just stupid. No, financial termites are unnecessary. And there's a lot of unnecessary things.

02:18 We needed to go to Webster's Dictionary and look up that term, what unnecessary is. But unnecessary fees, risks, and commissions. Now, what's an unnecessary commission in your mind, Phil? I call it Dr. Phil, but Phil? Something I don't get value from. Yeah. Yeah. I would look at that as unnecessary. Hey, Thomas, Phil didn't know he was going to come on and get drilled today, did he? No, it's, you know, unnecessary. Thomas, I saw you typing. Did you look it up? I looked it up. There you go. So it means not necessary, believe it or not, is what Webster's is telling me on the interwebs here. What was the definition? Not necessary. Of what? Of what word? Unnecessary. So unnecessary is not necessary. Well, yeah, Webster did a lot of work on that one.

03:04 I know, really? Oh, man. I think that person was taking the day off when he wrote that definition. Oh, this is funny. Check this out. Browse nearby words. Unnecessarness and unnecessated. Coach, it sounds like you and I wrote this dictionary. Yeah, yeah. Thomas, like they do when they're stalling on the spelling bee. Can you give that to me in a sentence? Hey, no. No, unfortunately, I cannot. When you say, Coach, that's unnecessary. Yay. I like that. That's good. That's a good one. That's a good one. Hey, Phil, while I got you on the phone, you know, we learned this a couple of weeks ago or probably a couple of months ago now. It seems like just yesterday on the show. But, you know, we have borders on our country between us and Canada and us and Mexico. What do the people in Finland call their border? Let me think for a second.

03:50 Thomas, you got the Jeopardy music? Tick, tock, tick, tock, tick, tock. I have no idea, Coach. I can't wait to hear the answer, though. Well, it's the finish line, of course. Dang it. There you go. Sounds like a morning show to me. I love it. I love it. But it's just important, and there's nothing to make fun of, but there's too many people out there that don't realize what's really going on in their wallet. So, folks, do you really, and ask yourself this honestly, do you really know where every dollar in your portfolio is going, has been, or will go, depending on what happens in the market or what your advisor has built into your plan that might not be necessary? Again, there's that word again, unnecessary or necessary. So, it's a good question to ask. And, Phil, you know, you've been around advisors for over three decades now.

04:36 And what do you think some of the main concerns when they're meeting with clients or people that they're meeting with that are concerned? Maybe they're not clients yet. But what do you think some of the, like, let's go over three main concerns. Somebody who is approaching that financial red zone. Let's say somebody 60, in the early 60s. What do you think three main concerns that they need to be paying attention to that they really haven't thought about the last decade or even their whole life? Because it's a whole different time of your life when you approach this retirement world. I mean, it seems like so far away, then it's here. But what do people need to do to make sure they're successful in retirement? What I've seen is a lot of people actually are closer to being able to retire than they think as long as they don't lose a lot of money right before they retire.

05:22 To me, that's a big threat is, hey, I want to retire in a couple years, coach. And then all of a sudden, there's a market correction. We should look up that definition. I don't know who the market is correcting for, but it's not me. But if the market goes down right before you retire, that's not a good thing or something you want to happen is to lose money right before retirement. I think that's something they need to look at. Yeah. Well, because it's not just losing money. Now you're losing time. What do you mean, coach? Well, you can't retire now. Right. I mean, you were just getting to that finish line where you were going to, in your mind, just have enough to retire. And then somebody takes 30 or 40% away. What happens next? And on top of that, do you know to the dollar what you paid your advisor last quarter, or

06:08 does it just quietly come out? Think about that. And even psychologically, even if you could technically get enough income to retire, having a big portion of your nest egg evaporate might make you reconsider retiring. And that's not a good mindset that you want to be in either. That's a financial evaporation. We can't have that either. And so, folks, if you are curious about what's going on in your own portfolio, if you weren't able to answer these questions we've gone over in a positive way, or maybe it just aroused some curiosity, call right now. Our team will go over with you from point A to point Z what's going on in your wallet, where those financial termites are, if there are any. If there aren't, it's great to get that financial termite inspection report and get an A-plus on that. That's good. That means none.

06:54 We go from A-plus to F. We've seen too many Fs lately. I don't want you to have an F. That's right. We need to at least, my brothers and I, because my dad was a college professor, we had to have A's and B's. If we approached the C level, we were in a lot of trouble. And that's when the report cards used to come in the mail at the summertime. We'd get that last report. Now it's through the internet. But luckily, back then, it was through the mail. And it was usually a week or two after school was out. And if it came on a Friday, my brothers and I would always get the mail. We would make sure to lose it until Monday. We didn't lose the weekend. So we can't have, we really need A's or B's. Anything below a B would not be acceptable to my dad. And it's not acceptable to me either, as far as the financial world. So call right now. We'll do that financial termite inspection report. We'll also put together for you the total retirement plan and color code your money so you know your red, green, yellows.

07:44 When we get closer to retirement, it's more important to have green with lifetime income than it is to have red with maximum risk. Thomas, tell folks how to get that. The next 20 people will do this at no cost or obligation. We have seen others charge over $1,000 for things that don't even come close to this. And the question we're going to help you answer is where are your advisor's fees coming from each quarter? Are they coming from your pocket? Or somewhere else? And if it's coming from somewhere else, that means your money stays the same as far as fee-wise. Ask your advisor that. Where are your fees that I pay you? Where are they coming from? Thomas, tell folks that they can call us right now and get on that list to make sure they get that peace of mind, that financial freedom in your mind. Folks, it's a great feeling when you approach where you need to be. And you'll know when you get there that you're in the place you need to be.

08:30 Thomas, give them the number. Absolutely. Connect with Coach Pete's team at Capital Financial. 800-661-7383. 800-661-7383. Or text keyword PLAN to the number 600-700. That is keyword PLAN to 600-700. Phil, you want this question? I'll give it to you. And I want everyone else out there in Radioland to listen to this and think about this as well. Because this is very, very thought-provoking, Thomas. Okay. When was the last time your advisor called you before the market moved instead of after? Think about that, Phil. We have any Jimmy the Greeks out there? Probably. It's rare. I can't say never, but I know that it's rare. Okay. Okay. Okay. Now, I'm having to look this one up. Here goes, Thomas. Jimmy the Greek. Yep. Jimmy the Greek. Now, he was from Durham, North Carolina originally.

09:17 He was one of the famous sports predictors back in the day. Ah, yes. Jimmy the Greek. A famous American sports commentator, Las Vegas odds maker. But he was also, well, Las Vegas. Everybody goes to Las Vegas when they get famous. He was from Durham, though. Yeah, that's incredible. That is absolutely incredible. I don't know his real name. His name, you know, they used to have him on CBS. James Snyder. James Snyder. Well, Jimmy the Greek sounds better, doesn't it? Actually, check this out. So, it says James Snyder is his real name, but then over here it says born Demetrios Georgios Sinodinos. Okay, James Snyder. So, there you go. There's Jimmy the Greek. What about that? Remember him, Phil? Well, I definitely know the name, 100%. They used to have him on one of the pregame shows. I think it was the CBS NFL shows back in the 70s or 80s. Oh, wow. Yeah, I know I'm old. But he was pretty accurate. And so, we need to be accurate in our financial world, too.

10:04 We need to make sure our advisor is doing what they're supposed to be doing, not gambling with our financial future. You know, it's easy to take risk with other people's money. Yes. And I can't do that. I mean, we have to do safety first at my firm because I don't want to look you in the eye when you're getting ready to retire and tell you you can't now because we had that movement downward in the market. And unfortunately, all your money was exposed. So, ask yourself this, folks. How much of my money is exposed to the market? And how would it hurt me if the market went the wrong way right when I didn't need it to? And if the answer is, you don't know, or I need some help, or let's get the real plan, or let's get this financial fill-up strategy in place, by the way, financial fill-up, and make sure that we have that monthly check coming regardless of what happens in the market. And our money is going to come for the rest of our lives. And if we pass away, our spouse also continues to get that money for the rest of his or her

10:52 life. That's a true financial freedom plan. We call it the financial fill-up strategy. Of course, that's trademark, folks. You can look it up at financialfillup.com. We even have a game show we built around the financial fill-up. Oh, yes. Yeah, but if you want your very own financial fill-up strategy, we can tell you to the penny or the dollar. Let's just stretch it to the dollar, Thomas, with inflation. We can tell you to the dollar what your monthly income will be as soon as next year or all the way 30 years from now, depending on when you want to activate your financial fill-up strategy. You can activate it in a week from now, or you can activate it in 10, 15, 20, 30 years, or never activate it and have it go on to your kids. It's up to you. It gives you that full financial freedom, and that's what you're aiming for, I think. Thomas, give folks the number, and we'll do that financial fill-up action plan for you for the next 20 people to call. There's going to be no cost, no obligation.

11:38 You'll even get a three-book set of three of the books I've written when you come in. I love it. Folks, it's your retirement. Get that power. Put the choices in your hands. Connect with Coach Pete's team at Capital Financial by calling 800-661-7383. 800-661-7383. You can also text us by texting the keyword plan to 600-700. That is the keyword plan to the number 600-700. You know, there's six accounts that never read your will. I'll explain that more when we come back.

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Former U.S. Comptroller General David Walker joins Coach Pete D’Arruda to discuss America’s debt, the pressures facing Social Security and Medicare, and why fiscal decisions in Washington matter to families preparing for retirement. They explore Walker’s proposals for reform, his concerns for future generations, and the importance of getting your own financial house in order. The conversation also touches on Roth conversions, taxes, and planning ahead instead of waiting for a crisis.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Consumer advocate Thomas Lipscomb here with you alongside America's wealth, financial, and income coach, best-selling author, Coach Pete D’Arruda. Excited for the show today. Coach, you always have such special guests that come on the program, no less this weekend as well. Well, it's been about 20 years since I've known David, and we're having David Walker, folks, former U.S. Comptroller General, and over with both different parties, so it's not like one party. And I remember, David, we saw each other in 2012 when you were in Chapel Hill, North Carolina. You were on your 10 million a minute bus tour. Remember that day? I remember. It ain't worse now. I know. I was telling Thomas and my daughter Carrie, who's my summer intern here, I told those guys, I said, I'm going to talk about it being 10 million a minute, and David's going to get mad about that.

00:45 Now, what is it now, you think, David? It's over 10. I haven't calculated. Let's put it this way. You know, back then, our total liabilities and unfunded obligations were $70 trillion. Now, they're $136 trillion plus and going up rapidly. And so, you know, we've lost control. There's just absolutely no question. You know, when do you think, because Congress, both sides, they meet, you know, they meet all the time, and who knows what they do up there, but they never accomplish what they're supposed to. They kick this can down the road. They can't even agree on a spending bill anymore. We keep having these government shutdowns. How are they ever going to agree to pay this debt? Well, first, Congress is very good at doing nothing. And that's okay when things are going well. But when things aren't going well and they're getting worse with the passage of time, it's

01:34 not acceptable. And it's a bipartisan problem. It is. You know, whether the Democrats are in charge or Republicans, they've both been kicking the can down the road. You know, there's only one thing in the Constitution that Congress is supposed to do every year, only one. And that's passed all the appropriations bills on time. The last time they did it was 96. They've only done it four times in my lifetime. That's an F minus. So look, here's what it's going to take, Pete. You know, it's going to take a statutory, meaning by law, fiscal commission that will educate, engage the American people on the facts, the truth, the tough choices, solicit input, make a package of recommendations for up or down vote in Congress. And secondly, a constitutional amendment that limits how much debt we can take on as a percentage

02:23 of the economy, absent limited and extraordinary conditions. A constitutional amendment is the only thing that will force the Congress to restore and sustain fiscal sanity. They're not going to, I mean, why would they do that? I mean, I can't even get folks a lot of times to pay attention to the fact that a Roth IRA is a great place. You pay the taxes now, you put the money away, you never have to worry about taxes again. People don't want to even think about spending or paying money right now. And same thing with Congress. It seems like they, you know, they can't get enough traction. I mean, you tried very hard there in 2012 to get attention. How far up did we get in the polls as far as people being aware of the debt and wanting to get something done? Do you remember? Well, first, I have done Roth transfers last year and this year. Okay. So I believe in leading by example. Yes. Secondly, people are getting more concerned about it.

03:11 And it's not just Main Street America. It's our investors. We're starting to have a supply and demand imbalance. We need to issue a lot more debt and the appetite for our debt is going down. China has significantly reduced its debt holdings. Other countries are becoming reticent about buying as much of our debt as they have historically. You know, we're having to pay higher interest rates in order to be able to finance our deficits. The second largest expense is interest. The fastest growing expense is interest. And what do you get for interest? Nothing. And so things are changing. I'm about ready to go back on the road again in late 26 and 27 because while these issues won't be a top priority for the midterms, they will be for the 28 election.

03:58 And I've got a new book coming out this fall that hopefully will be a basis to be able to get people much more informed and engaged. Do you have a title for the book yet? Yes. Saving Social Security in America. Common Sense Solutions. What do you think of the top two or three solutions people can push their congressmen or woman to do now? Well, you know, we need that commission. There are bipartisan bills in both the House and the Senate that hopefully can get moved to the lame duck session. Nothing's going to happen before the midterms. Congress is not going to pass a constitutional amendment. And so we need to go with Plan B. Plan B is what the founders envisioned. The states need to get together, propose an amendment. But Congress should have called a state-led convention as far back as 79.

04:44 They didn't do it. They're stiff in the states. And now I'm trying to get a state attorney general to sue the Congress for failing to call the convention. I think these are very two significant things that are either going to happen or not happen in calendar 2026. And so let's hope that they do. You know, Social Security, the trust fund goes to zero in 2032. That's an action-enforcing event. And that's why I say that while it's not going to be a big issue in this year's midterms, it will be in 2028. We need to start telling the ground on it, turning the heat up. It's right when I was supposed to start getting Social Security in 67. I hear you, my friend. By the way, the 67 is probably going to go up one month a year over 24 years.

05:31 Wow. Yeah. Well, I mean, you can't afford to pay us. We're living longer. And we don't have that money there. It's not there. So the Roth IRA, it makes a lot of sense now because at least we know where the tax rates are now. And if we put it in a place that the government supposedly can't touch, I mean, how confident are you that they won't try to change those rules going down the road? Well, your grandfather, okay, even if they try to change the rules going, they're not going to do it retroactively. And I do think that the individual income tax rates are as low as they're ever going to be. And while the problem to be able to put our finances in order are primarily a spending problem, we're going to have to have more revenues. And the single largest source of revenue is individual income taxes. That's not the one I want them to get revenue from. I understand that.

06:17 Yeah, that was raising tax rates. Folks, we're talking to former U.S. Comptroller General Mr. David Walker joining us on the show today. David, it's just frustrating when we all can see this, but it doesn't seem like Congress really cares. Well, the biggest deficit that we have, Pete, is a leadership deficit. You know, we have too many laggards, not enough leaders, too many people living for today rather than help create a better tomorrow. You know, the sad thing is, is for the first 200 years roughly of our republic, we believed in the concept of stewardship, which is not just generating positive results today, not just leaving things better off when you leave them when they came, but leaving things better positioned for the future. We've abandoned that.

07:29 People in it. And it's called Grow It or Blow It. Grow It or Blow It. And it's about, like, people you remember in the past, like the Commodore Vanderbilt, all the famous people, the big millionaires and billionaires who made the money. And within three generations, many of their fortunes they left was gone because the grandkids never saw mom and dad working as hard as they did. The kids usually kept it alive for the most part. It's the grandkids because they didn't see all the sweat and equity that went into building this empire. And so fast, the empire disappeared a lot of times. And that's what's happening here with our government, if we're not careful. Our whole U.S. system could go the same route as some of these inherited wealth folks had the trouble with. Well, we need to learn from history. We need to learn from others.

08:15 There are plenty of superpowers that have existed in the past that no longer exist. The leading indicator on the way up is economic power. The leading indicator on the way down is loss of economic power. We're not exempt from the laws of prudent finance. If you can't put your finances in order, you will lose economic power with adverse consequences both internationally and domestically. Not only economic consequences but also national security consequences. Now, a lot of people listening say, ah, this doesn't really apply to me. I don't really care. The government's going to do it or they don't do it. But what can we really do? Let's take it down to the grassroots level. People are listening. They're getting mad. They should be getting mad because the dollars, folks, that you've been putting aside are worth less and less because of this. And especially if taxes keep going up, the money you thought you were going to have isn't going to be there anymore.

09:00 And, David, what can the average consumer, the average citizen that's listening right now, how can we get this to a point where we can get that grassroots to grow to 60%, 70%? If we can get up to 70%, 80% of everyone on Congress, they'll have to do something. Well, I'm president of a new and emerging effort that has not gone public yet called We the People. And we're going to try to have a major citizen education activation campaign for the 28th election to get 50 million Americans engaged and communicating with their current and prospective elected officials to make these issues a top priority in the 2028 election. And let me give you some numbers, Pete, that I think people can relate to more.

09:47 Most people can't relate to billions, much less tens or hundreds of trillions. So let's say that Uncle Sam is a real person. And I'm going to take the financial statements for the U.S. government for the year ended September 30, 2025. And all I'm going to do is drop eight zeros. So this is what Uncle Sam's finances look like. He made $52,000. He spent $73,000. He's in the hole for the year $21,000. He's got total liabilities and unfunded obligations of $1,362,000. But don't worry. He's got $61,000 in assets. So he's only underwater $1,301,000. Would you lend Uncle Sam money?

10:33 No. Get out of my office, I'd say. By the way, Jamie Dimon, who's a pretty smart guy, chairman and CEO of JPMorgan Chase, was asked this past week, would he buy long-term U.S. bonds? Personally, he said no. Yeah. I mean, so it's just frustrating when we talk about these kind of things. Folks, if you're interested in finding out how to get that Roth conversion started, because you're going to have to pay taxes when you convert the money from a regular IRA or 401K or 403B or thrift savings plan over to a Roth. But you better pay it now than pay it later over and over again. It's the analogy of a farmer who has a bunch of IRS agents come up when he's planting the seeds one season, and they say, hey, Mr. Farmer, we can either tax you on these seeds and never come back again, or we can let you not pay tax on these seeds today but come back every year at harvest and tax you over and over again.

11:26 I think we all know where we'd stand on that. When we come back with David in a little while, we're going to talk about the We the People tour. We're also going to talk about common-sense strategies we can all employ to make sure that we're on the right track. We'll be right back after this. Loving the conversation today. This really, truly is a special interview that we're having today. Coach, you've brought in David Walker, former Comptroller General of the United States. Folks, if you want to catch up on the conversation, maybe the radio dial has just tuned in to us. Find podcasts online at FinancialSafari.com. Again, that is FinancialSafari.com. David, it's frustrating because you and I both can see this happening, and I know a lot of folks out there can see what's going on with the government. But nobody wants to do anything about the debt. And it's, you know what happens, it's going to keep growing.

12:13 Can't ignore it. Ignoring is not going to make it go away. No one wants to make these uncomfortable decisions. They don't want to get voted out, I guess. So it's a lot easier to promise people a lot of free stuff than it is to tell people we need to tighten the belt a little bit. Well, everybody wants something for nothing. I mean, you know, one party wants to have tax cuts. The truth is not all tax cuts stimulate the economy. Very few pay for themselves. The other party wants to grow government even more, even in circumstances where we're not generating the results that we need to achieve. The truth is we're going to have to reform Social Security and make it solvent, sustainable, secure. We're going to have to do the same thing for Medicare. But we've way overpromised on health care. We're going to have to dramatically reform our health care system. We can get into that if you want. Yes. Social Security is very easy to solve.

13:00 We can exceed the expectation of every generation of Americans. We can talk about that a little bit if you want. But the toughest choices are going to have to be on health care and taxes. Those are going to be the toughest choices. Well, we were talking when I told Thomas that I was going to have you on this week. Well, last week we started talking and I said, you know, this debt is out of control and people don't realize it. And David's been talking about it for a long time. The Social Security aspect, the health care aspect, and nothing is good about this. So Thomas was excited to have you on because he did want to hear about your opinions on, I know, Thomas, you mentioned the health care there, because the Obamacare, when it came in, was supposed to lower prices and all it has done. It was a big time bomb, wasn't it? It was. It's been especially having four kids now. We have to have these conversations.

13:46 It feels like every month or two, do we go to the doctor or not? And I can't believe in America I'm having to ask that question. Yeah. So what do you think about the health care, Dave? Well, first, we've over-promised, over-subsidized, and we have failed on the three elements you have to have to have a successful and sustainable system. Now, we're in baseball season. Let me tell you what those three are. Number one, you have to have properly designed incentives that encourage people to do the right thing and discourage them from doing the wrong thing. You need to have adequate transparency, including things like cost and quality, to provide reasonable assurance they will do the right thing and discourage them from doing the wrong thing. And then you have to have appropriate accountability, which means positive reinforcement when people do the right thing and accountability when they don't.

14:35 In the case of health care, we're zero for three. That's a strikeout, okay? And so we need to step back and ask ourselves how much universal health care, and I did use the word universal, how much universal health care is appropriate, affordable, and sustainable? And most Americans believe that's preventable wellness and catastrophic care that everybody ought to get. If you want more than that, then you get it from your employer, you get it from your union, you get your industry association, or maybe you buy it through the Affordable Care Act, which is, by the way, misnamed, just like the Inflation Reduction Act. How does that work out, okay? But, you know, you've got to keep in mind Congress is not subject to truth in advertising laws, okay?

15:22 If they were, a lot of people would be in trouble. But, so, you know, we need a dramatic reform because we spend about 50% more of our economy on health care than other industrialized nations as a percentage of GDP, and we get below average results. Yeah. Well, you know what's been very troublesome to me is the amount of fraud we keep seeing, like billions and billions of dollars of fraud. I'm kind of mad that I didn't think of one of these things and open up some phony companies with phony patients and no beds and bill the government for billions a year and just get away with it. Because I really haven't seen anyone, you know, we're not seeing these perp walks. And if you don't see the perp walk, I mean, you start thinking maybe I should try something. Well, you know, criminals go where the money is. You know, remember, you know, people asked in the past, why do you rob banks?

16:07 That's where the money is. That's Willie Sutton. Yeah, yeah, I remember they said. Health care is where the money is, okay? Right. But understand this. The federal government needs to learn a lesson. You need to have adequate controls up front before the money goes out. Because once it goes out, you're probably not getting it back. The other thing you need to do is you can't have self-certification. Newsflash. Criminals have no problem self-certifying if they're eligible for something they're not eligible for. And then thirdly, you have to have information systems that will share information, you know, across these different systems. You know, so you're not paying things to dead people. So you're not, you know, very simple things. But again, the government is a lag indicator when it comes to these things.

16:56 And so, like, Social Security, what's the solution for that? Because we're coming right up. I mean, we're right here on the deadline now. It's just a few years ago where people are going to start feeling catastrophic changes. Well, here's where I think we're going, okay? As I said, we can exceed the expectation of every generation of Americans because young people don't think they're going to get it. And they're wrong. They are. They're going to get it probably at a different age and maybe a different amount. Seniors think they're going to get cut dramatically. That's not going to happen either. So we can reform it, phase in the changes, and everybody gets more than they think they're going to get. I think that's exceeding expectations. So what are some of the things? I think we're probably going to see a further gradual increase in the normal retirement age because we are living longer. Secondly, I think we're going to see a significant increase in the taxable wage-based cap, but not an elimination of the taxable wage-based cap.

17:48 I think we're going to see an effort to try to prevent, or if we can't prevent it, minimize tax rate increases because that's a very regressive tax. I think we're going to see adjustment in the benefit formula so we end up keeping more people out of poverty, but we don't turn it into a means-tested welfare program. But upper-middle and upper-income individuals get somewhat less of a replacement rate than otherwise. I think we're going to see changes in the cost-of-living formula, if you will. And I think we're also going to see, for people that don't have an employer-sponsored retirement plan, an automatic savings supplement that would come on on top of the reform-defined benefit system.

18:34 And I think we'll keep the defined benefit system because most everything else you have in the retirement world is defined contribution, where the individual ends up bearing the investment risk. Again, folks, we're talking to former U.S. Comptroller General, Mr. David Walker, joining us, generous enough to join us for two segments today. David, here's what Thomas said to me the other day, and I looked at him and he said, I could say it. We did this little back and forth, and he said, oh, you could say it. We were doing our little communications by sign, baseball signs. I was throwing signs to him. And he said this to me. He said, Coach, if they would have let us have our own individual Social Security accounts when we first started this system, we could have all picked where we had our money, but we all would have had our own money in our own little accounts. Why did the government not do it like that? Well, for one thing, the government created this program in 1935.

19:21 It started paying benefits in 1940. It's a pay-as-you-go system, and therefore the people who ended up getting the early benefits got a huge return on investment, okay? You know, the simple fact of the matter is is that most people don't understand that Social Security is three insurance programs. It's just not a retirement savings account. It is retirement income. It is disability income. And it is survivor's income. And one of the guys that's going to be going on tour with me is a guy by the name of Joe Penland Sr., Joe from Texas. And you can find out more about it at his website, Joe from Texas. And he benefited from all three of those programs when he was young. And he's lived the American dream. He's now wealthy.

20:07 He's a very successful entrepreneur. But, you know, you need to understand what the system is. Insurance system, not just, you know, a savings and retirement account. Yeah. Well, it wasn't designed to be that. It was designed to be a safety net, which that's – Correct. We want to keep that safety net. We can't live – like, you need other money to supplement that, but it's a good way to help pay the bills, I guess, to the living expenses. Well, you know, when we formed it, it was intended to be the foundation. And like a house, you can't just live on a foundation. You need – Get rain done. You need a sponsored plan. You need personal savings on top of that in order to have a habitable dwelling. Yeah. We've got a couple minutes here before we let you go. I want to ask you what you think about this, what appears to be a push towards socialism. Where do you think the money is coming to get all these political ads to push socialism?

20:55 Do you think it's coming from other countries that are trying to bring us down by making us try to get too many people interested in socialism? They've never told them the bad things about socialism, have they? Unfortunately, many Americans don't learn from history and don't learn from others, and this is a perfect example of that. There has never been a true socialist, which many times converts into communism, that's been successful, that stood the test of time. And if you want to scare the bejesus out of somebody, have them read the platform for the Democrat Socialists of America. It's basically paralleling Saul Alinsky's, you know, communist principles, you know, take control of education, take control of health care, don't worry about deficits and debt, tax the rich.

21:43 I mean, it's, you know, it won't work, okay? But again, the problem is people don't learn from history and people don't learn from others. If they did, they wouldn't have anything to do with this. And I'm one of the national co-founders of a group called No Labels, and No Labels is trying to fight the wingnuts, including the Democratic Socialists of America, and provide support to the Sensible Center, which is mainstream America, no matter what your political affiliation is. I think the Sensible Center is about 80% of the people, and like you call them, the wingnuts are 10% on either side, right around there. Yeah, the Sensible Center is at least 60%, at least 60%, and last time I checked, that's a winning formula. It is. It's a majority. Let's say change those rules. That doesn't meet the filibuster requirement, but yeah.

22:29 You know, once I started studying Saul Alinsky, you see it all the time these days. I mean, if you study his rules for radicals, I mean, you can, I can see it. I said, oh, here, they're trying that method. And you know why? Because it works, because nobody's really, nobody calls them out on it. But we see it. I mean, you can see it, and once you see it, you never don't see it, can you? Nope, that's right. Folks, his name is David Walker. David, when is the book coming out, and when is the tour? I think the book will probably come out on Amazon around October time frame, and you know, we're going to start doing some events later this year and continuing into 2027, because as I said, this is not going to be a big issue for the midterms, but it will be. It must be for the 28th election. Well, when the book comes out, we're going to have you back on. How's that? That'd be great. All right, folks, David Walker, former U.S. Comptroller General, thanks for your time today, and folks, we'll be right back after this.

23:18 Thanks, David. Thanks, Coach Pete. Take care. Thomas will get you a copy of this when we get it done. Yes, sir. Sounds great. Take care. Take care. Bye-bye. Bye. Bye. Bye.

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