Part Two: Get your retirement plan on track

In episode 14 of the Financial Checkup, the Advantages Retirement Plan™ Specialists, Yash Khubchandani and Guillermo Nafarrate, go through a retirement planning checklist for physicians and respond to live questions submitted by OMA members. 

Transcript

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Yash Khubchandani: To start saving, essentially, if that's the first key aspect to retirement planning or savings plans of any clients. As long as you're saving towards it, there's a chance to achieve that.

Speaker 2:  Welcome to the Financial Checkup, a podcast series devoted to improving the financial health and retirement readiness of physicians and their spouses or common law partners. This series is brought to you by the award-winning Advantages Retirement Plan from OMA Insurance. This episode features audio from an Advantages Retirement Plan webinar recorded in May 2022.

Otniel Trejo: Hi everyone. Thank you for joining us today. I am Otniel Trejo of the Internal Advisors here at OMA Insurance, and I am your host for this afternoon's webinar on this very important topic, how to get your retirement plan on track. Quick disclaimer, please keep in mind that we're providing this presentation as an educational resource for you. Our comments today are based on our experience supporting physicians with their retirement planning, but it is not meant to be used as financial advice. And with me today, we have two special guests. Let me introduce you to Yash Khubchandani and Guillermo Nafarrate.

Guillermo Nafarrate: Hey everyone.

Yash Khubchandani: Hey everybody.

Otniel Trejo: And both of these gentlemen are our retirement specialists with OMA Insurance. Yash is a certified financial planner with nearly 10 years of experience in working with insurance companies and non-for-profit. Guillermo is an experienced financial professional who has worked for banks as an independent owner and for non-for-profit. If you find retirement planning a challenge, you are not alone. In a survey that we conducted, we heard that members wanted help with this aspect of their lives. We found that very few physicians, especially those in their early or peak working years, are confident in the ability to retire. The survey also showed that OMA members trust our association and strongly believe that OMA should be the one responsible for providing them with retirement tools and options.

This is why we have partnered with experts to create the Advantages Retirement Plan, which has one purpose, and that purpose is to help physicians earn more money in retirement and to retire when they want. It was established exclusively for our OMA members and their spouses and common law partner. It uses a simplified, cost-effective investment approach designed to maximize retirement wealth. Its investments are managed by BlackRock, an industry leader in asset management. And it's overseen by the OMA Insurance Investment Committee, which means that OMA members play a vital role in the planned governance.

Yash and Guillermo, what we decided to do was create a couple of short checklists that can help someone start their retirement planning conversation with an advisor or with one of our specialists like Yash and Guillermo. So, Guillermo, when supporting physicians, what are some key takeaways that they should consider?

Guillermo Nafarrate: If you're evaluating current strategy, or you're even seeking out a second opinion, there are some questions that you should keep in mind. How have your investments been performing relative to benchmarks or alternative solutions such as the Advantage Retirement Plan? As mentioned, what are the fees that you're paying for your investments? Do you know what those are? Do you know if there's any hidden fees? Do you know if there's a deferred sales charges? These type of things, right? Are your assets allocation appropriate to your time horizon and the risk tolerance you're willing to take? How do you feel about the amount of time and effort required to manage your investments? And another question you should be asking is how frequently are you rebalancing that portfolio with your advisor?

Look, if there's something wrong with me, I'm going to go and see my family physician. He'll send me for some images, some scans. He'll look at those images and tell me what is wrong, or tell me it's all in my head. We do the exact same thing with your portfolio statements. You send us a portfolio statement, we'll do an analysis and present it to you. And it's a great way for you to know if this program makes sense for you or not. You should recall we're not commissioned advisors and our job is to determine if this is a program that could improve your retirement plan. And we need to ensure that it does make sense before we switch over. So that's something that I can finish off with. I'll transition over to Yash who will answer this same thing.

Otniel Trejo: So those were some great, excellent, key takeaways for someone who's looking to stay on track from their plan. So, Yash, when supporting physicians who are getting started, what are some key takeaways that they should consider?

Yash Khubchandani: Yeah. So some of the key takeaways are starting off by knowing your target retirement income. As I mentioned, trying to figure out what we need in retirement per year, and then working our way from there. Identifying that goal, how we're going to get there. Also taking a look at what kind of accounts can be used towards getting to this goal? Such as registered accounts like an RSP or a TFSA. An important part on getting started is obviously just getting started, saving regularly and increasing them over time. Which as I mentioned, the auto escalation can assist with as well on the plan. And lastly, fees. Don't pay more than you need to because it's definitely your money and it's only coming in used for you. And lastly, I would like to say, always include diversification, rebalancing and risk adjustment over time in your portfolio, because these are what are going to get your portfolio to grow as opposed to deplete over time. So always make your plan work for you rather than against you.

Otniel Trejo: So once more, thank you both. And if you would like to learn more about the Advantages Retirement Plan, please visit our website at www.omainsurance.com/retire. It's easy to enroll, but you don't have to do it on your own. Feel free to book an appointment with one of our specialists and they can help you with the enrollment process or answer any questions or inquiries that you may also have. So I'd be happy to answer some of the questions, and maybe Guillermo you can help us out. And the question is, is the OMA Advantages Retirement Plan appropriate for physicians over the age 70 or is it too late to join?

Guillermo Nafarrate: Yeah, no, I appreciate the question. Thank you to whoever asked that. Remember we have to recall retirement isn't a one time event. Okay? Retirement is an ongoing event until death. Initially, you're looking at wealth accumulation. Once you are retired or within that age bracket, you're looking at tax efficient wealth distribution. You're looking at earning a return on investment, above and beyond inflation, that is consistent. You're looking at not taking any unnecessary risks. So having an optimal asset allocation that is appropriate for your stage in life, which is retirement. And you're looking to accomplish this with a low fee structure. So certainly it's not too late to join. You know, whether you're starting building up wealth or in wealth distribution mode, it makes sense to look at this program to see if it could improve your plan, whether you're in a retirement mode or wealth accumulation mode.

Otniel Trejo: Thank you very much. And the second question here, maybe Yash, you can help us out. Someone asked how can I afford to retire and how to determine the amount of money needed for retirement.

Yash Khubchandani: So in this case, actually going back toward how you can afford to retire, to be honest, the Advantages Retirement Plan. No, I'm just kidding. Just start saving, essentially, if that's the first key aspect to retirement planning or savings plans of any clients. As long as you're saving towards it, there's a chance to achieve that. Now with regards to how to determine that, going back to my first point as well, with regards to getting started, look into your current finances. Right now in your life, based on your particular journey, you're probably at your highest liability peaks. You probably own a house. You've got a partner. You probably have children. This is a time where you're doing your maximum spending in order to accumulate those assets, build that life and work towards everything that you're working for now, but going forward, that is also what you're going to be putting towards yourself.

And in terms of that, as long as you get started, I think that's pretty much the only way to afford it, in terms of looking at what you need today. Now, into retirement is look into what you need today. A fair assumption is 60% of that, assuming you don't have more liabilities going forward. That would be a good place to start. And other than that, if you'd like to talk to myself or Guillermo, to get more details about that, we'd love to take that off the webinar as well, but just start saving.

Otniel Trejo: Excellent. No, I completely agree. Third question here. And maybe Guillermo, you can address this one. In terms of cost and benefits of the GLI program, what are some of those costs and benefits for the Guaranteed Income Lifetime Annuity program?

Guillermo Nafarrate: Yeah. I'm glad somebody asked this because we've just been talking about BlackRock. So we do have another offering in the program, it's called Guaranteed lifetime Income. Starting at age 50, you can actually make contributions into your RSP that you can elect to put into this program. What this is, it allows you the ability to build your own pension, set up your own pension, where you're making monthly contributions or lump sum contributions into a product that is a deferred annuity. So what that means is when you retire the insurance company, in this case, our partners, Brookfield Annuity, is going to pay you a set amount every single month for life. And this is really not meant to replace your BlackRock portfolio. It's meant to compliment it. It's just another form of cash flow. So reduce market risk in retirement, reduce longevity risk.

We have some members that are worried about outliving their money. This product will pay you a set amount every single month for life. It doesn't matter what the market does. It doesn't matter how long you live. You're basically putting some money aside, which is then going to pay you a guaranteed cash flow as another source of retirement income. Our program, our tools, tells you where each source of cash flow will come from, from the government, from this GLI product, from the BlackRock product. If there are any additional gaps, then we look at alternative retirement solutions through the corporation as well.

Otniel Trejo: Exactly. And that, unfortunately, is all the time that we have for today. If we didn't address your questions, please reach out by email to info@omainsurance.com and either Guillermo or Yash will be able to follow up with you, or anyone in our insurance team. Thank you so much, everyone, and have an excellent afternoon.

Speaker 2: The Financial Checkup Series is produced in collaboration with OMA Insurance and Commonwealth, the administration and technology partner for the Advantages Retirement Plan.