The Care Girl Podcast
The Care Girl Podcast
Fighting the Cat for Food: Why Retirement Planning Matters
What would it mean to enter your golden years with financial confidence instead of anxiety? In this eye-opening conversation, Alexandra "The Care Girl" sits down with Jack Browne of Successful Retirement to tackle the harsh realities of aging without proper financial planning.
Drawing from his extensive background at Deloitte and fifteen years running accounting departments for public companies, Browne breaks down retirement planning into digestible concepts anyone can understand. He frames money management around three core characteristics – safety from decline, accessibility, and growth potential – explaining why you can only have two simultaneously and the tradeoffs each combination requires.
Browne introduces a compelling framework for understanding retirement phases: the active "Go-Go years," the slowing "Slow-Go years," and the limited-mobility "Won't-Go years." This progression highlights why flexible financial planning matters as spending patterns and needs evolve. The discussion takes a particularly powerful turn when examining annuities, income strategies, and the critical timing of insurance purchases. As Brown puts it, trying to secure long-term care insurance past age 70 is like "paying for the care itself" through premiums – a stark reminder that timing matters tremendously.
Perhaps most valuable is the guidance for families navigating intergenerational financial planning. Browne emphasizes the necessity of transparent conversations about parents' finances before cognitive decline sets in. The Care Girl shares her frontline experience with families facing devastating care costs ($6,000+ monthly) without resources, creating what she calls "the middle of a family feud" when unprepared families face difficult choices.
Whether you're planning your own retirement, helping aging parents, or concerned about future caregiving responsibilities, this conversation provides the framework and vocabulary to take meaningful action today. Your future self will thank you for listening.
Jack Browne is located in Alpharetta,GA he can be contacted via his website at www.successfulretirement.com
To be featured on the Care Girl Podcast reach email us at: Workwithme@thecaregirl.com
Hi everybody. It's Alice the Care Girl. I'm here today in Apparenta Georgia with Jack Brown of Successful Retirement. How are you doing today?
Speaker 2:sir, I'm doing wonderful.
Speaker 1:Thank you for having me in. I know it was random me walking in. Actually, guys, I pass this place every day almost and I'm like hey, who's at Successful Retirement? I need to know more about whoever's in there, because you guys know I am the owner of the Care Girl Agency and we actually help people who need care.
Speaker 1:And today we're going to talk about more of the retirement side and the planning side, because a lot of times for me I am seeing the families who just don't have anything set back for retirement, when mom and dad, when they are needing care, they're putting a nurse in home or they are putting in the middle of a family feud, because there are a lot of people who they just can't afford care right now, right. And then you have the other side of it where people do have the money but they just they just don't know what to do and how to put it back and how to successfully retire. Because I mean I know we've all all been there where we've seen the senior working at Walmart. I mean sometimes they're there just because they want to work, but sometimes they're there because they have to work right, and so we don't want to be 75, 85, and we have to work 65, have to work right. We want to be able to enjoy what we do, something like Jay Brown right now.
Speaker 1:So, guys, I want to give you a little landscape of how, when I walked in here, first thing that I saw were some guitars on the walls and a lot of pictures of Jack Brown and celebrities, and it seemed like he has had a past life or a life right now where he has come across a lot of celebrities and the life in the radio life. Can you give me a little background on that?
Speaker 2:Sure, sure. So, like for my background, I went to the Georgia Institute of Technology, and when I graduated from there, I went to work for Deloitte and Touche, which now goes by. Actually. I went to work for Deloitte, haskins and Sells, which now is known just by the word Deloitte, but it's one of the four largest public accounting firms in the world, and so I spent a decade and a half there learning all that stuff, became an expert in silly things like revenue recognition for software companies you know how esoteric can you get and then I spent about 10 years running the accounting departments of publicly held companies. And then for the last 10 years I've been doing this. I've been helping people in their retirement planning, helping them get ready to retire, helping them when they are retired, helping them plan cash flows, how to allocate their funds to maximize the returns, how to help them understand as one of my clients brought the phrase to me how I can help them keep them from fighting the cat for food and retire.
Speaker 1:Fighting the cat for food. Entire Fighting the cat for food. Yeah, yeah, I love that, I love that. So. So these pictures were you at a working at a radio station.
Speaker 2:No so. So I used to advertise on a radio station here in Atlanta and the people that help produce my radio show produce similar radio shows across the country for hundreds of advisors, produce similar radio shows across the country for hundreds of advisors, and they'd figured out a way to try and add some. Because you know, if you've ever watched something they have some on TV now, half-hour shows, and there's radio shows and if you've watched them and listened to them continuously, effectively, after about four or five episodes you've heard the entire universe of what they're going to talk about. Because of, somewhat because of regulations and compliance issues, there's only so much people are allowed to say.
Speaker 2:And then the other thing is, when it comes to your money, if you think about it, there's only three things, three main characteristics that you're going to have with your money. One is it safe? Is it safe from decline? Two can I get to it? Three is it going to grow? Those are the three things people think about the most. The trick is you only get two at the same time, right, and so you know, if you want safety and access, then you're sticking it in a savings account and in a bank account. It's going to be safe. It's never going to go down. You can get as much of it as you want, any time you want. Yeah, if you want it to grow and have access to it, then you.
Speaker 1:There's a little more risk involved.
Speaker 2:There's more risk. So you're talking about a brokerage account and then brokerage accounts, they can go up and they can go down. I recently had a client mention mentioned to me that she looked at her account on. She's been with me for just about a year and she looked at her account recently. And she went back and looked at an account that was about three or four months ago and the change wasn't all that much and she wasn't really happy about that. And so I went back and looked and I realized that well, it's just based on which day she looked at it, because if you go back and looked at when we started to, when she sent me the message, her account was actually up a little over 8%, which is a high single-digit return. He just picked two days. The numbers happen to be the same. So you have to step back and look at it. But in her account it's gone. It's not even. It reached its peak back in November and then, after the election, with everything that was going on with tariffs and concern, it went down. Now it's starting to work its way back up.
Speaker 2:So it's just a matter of patience, monitoring, understanding how the market works. But that's a situation where it can grow and you can get to it as much as you want, anytime you want, but it's not safe from decline. And the other option that is available and most people don't know about them and some people do is their insurance-related vehicles. That can give you both safety and growth opportunity, same as in the market. But you're limited in how much you can get at it every month or every year. It's usually about 10%, sometimes it's 7%, depending on the company and the policy. So there's access limitations depending on the company and the policy. But so there's access limitations. But the way that sort of plays out is some people love the fact that, okay, I don't lose a dime and every year I get a little bit of an increase and that's fine.
Speaker 2:And if you have an account that and I have several accounts like this where people have those sort of accounts and they just really don't ever touch them, so the limitation on access doesn't apply to that particular investment, because those clients have either other investments or they have cash flows such that between Social Security, pensions and maybe rental properties, things like that, they have such cash flow that they don't need to access their assets for anything unless it's an emergency. So they're fine, just let them continue to grow. So there's lots of different ways that we help people, and I know that you started asking me. You know how did I get started in this. Just let them continue to grow. So there's lots of different ways that we help people, and I know that you started asking me how did I get started in this?
Speaker 2:How I got started in this is about 10 years ago. The company I was working for running the accounting department. They got sold and I became redundant, and so I started looking for ways to continue my career. When I came across this industry and I thought, with my accounting background, it would be somewhat close to what we're doing here, and so I was able to acquire a company, and now I'm running it myself and everything's wonderful, oh wonderful.
Speaker 1:I love that. I love that. I mean, that's the beauty of being an expert in your industry and what you know and what you know, because you can actually transfer that into a company and a business and, like you said, you run your own thing, but do you do insurance as well, or estate planning? Is it a little bit of that added in there too Well?
Speaker 2:so estate planning. There's two aspects to estate planning. One aspect is creating the legal document for how people want to manage their states as they pass on, and usually that involves the creation of a trust, and I don't do trust Trusts are. Those are the purview of attorneys, and so I have people I refer for the trust, but in terms of the state planning, the other aspect of that is okay, what's the big picture view of what is your state going to be like after you pass and how do you want it to be dealt with? And so it's usually the people.
Speaker 2:The more money you have, the bigger an issue. That is, the less money you have. For most of my clients it's a lesser issue, but for most of my clients their estate planning is more along the lines of making sure that the beneficiaries are correct on all their accounts and that the people who are their beneficiaries are in the know in terms of what's going on, for example, with my mother. My mother's 92 years old and she is told all of she's got four children and she's told us all that there's a certain amount that she's allocated to give to her great grant or to her grandchildren, and then, after that, whatever's left gets divided four ways.
Speaker 1:That's how it's going to go. She said the grandchildren are first Right.
Speaker 2:Yeah, and then I had you know. So for most clients it's really a matter of you know how's that going to work out. Actually, I have one client who she didn't want to go into a home. Her husband had passed away. I think she's got six kids. Nice, good Catholic girl from New Jersey, and what she did with her children said look, I don't want to have to go into a home, so if any one of you will agree to live with me to help take care of me, run me to the doctor, all that fun stuff, when I pass away you will inherit my house. And so one of her daughters has done that. And so every family does things differently. I've got another client who they've got two children and so they're working with their attorney to create you know, they've created the trust and now they're fine tuning the trust to say, okay, here's how much is going to go to various church charities, here's how much is going to get allocated to the son, here's how much is going to get allocated to the daughter.
Speaker 2:In some cases you run into situations I've had several clients where you've got you, you may have a child who has an abuse, substance abuse, issue.
Speaker 2:And when you have that then, as a parent, the thing that you're most concerned about is, if I give this person a big pile of money, is it going to go straight up his nose and cause his heart to explode, and what's the good of that? And so you know, a lot of times clients will get attorneys involved and the attorney then reach out to me and we'll talk about ways where we can set up an account to be able to fund the lifestyle. We'll talk about ways that we can take assets and set them up in a way to fund a lifestyle on a monthly basis, to try and limit the potential for someone with a substance abuse problem to make things worse by giving them a big pile of money. So, in terms of estate planning, there's lots of different ways that you have to look at it. From a high level, it's really more along the lines of here's what of different ways that you have to look at it.
Speaker 2:From a high level, it's really more along the lines of here's what I have in my estate and who do I want to get it when I'm gone? Right, that's the high level thing, and for a lot of people it's pretty simple, because it's either going to my kids or, if I don't have kids, going to nieces and nephews or charities or whatever. But then there's also clients with special needs, children, you know, people who are born with autism and things like that, and so, again, setting up something that allow a trust to then take care of people after the clients have passed on, those are the sort of things of you know. In conjunction with working with attorneys, we help people set up.
Speaker 1:What you do is more on the money management side, right? Yes, let's say OK. So let's say for me, for instance, I have a mom. She's 67. She stays with me right now. I know for a fact that she does not have any assets at all, right, Other than clothes and just jewelry and things of that nature. What would you tell me to tell her to do right now at CC Family? Is there anything that she can do? Because I talked about, we're going to talk about a few scenarios. What could she do today? Because she's still working, she's semi-retired. She pulled some retirement, but it's not the full amount right now and she's still working right now. She's working full-time right now and she's still working right now she's working full-time.
Speaker 2:Right now she's part-time. She's working part-time. So has she started drawing Social Security.
Speaker 1:Yes, she has.
Speaker 2:Well, at 67, she'll be at full retirement age anyway. So the one thing that people need to realize with Social Security is everyone has what's known as full retirement age and that sometimes becomes a moving target. With what's going on with Social Security, it might move again to north of 67 or whatever it is now. But if you do want to try and pull Social Security while you're still working, you have to be careful, because for every $2 over a threshold I think the threshold might be like $22,000. Threshold might be like twenty two thousand dollars. But so if you earned twenty four thousand dollars, you know the difference of that is to divide. You know, for every two dollars over, you lose a dollar of your security.
Speaker 1:Yeah, that's why she she works like two days a week or something.
Speaker 2:Right and so. So for those people who are struggling to you know, in that scenario where she has not built up any assets, then the reality is she's going to have to work part time. While she's doing this, she's going to have to find a situation where she can live inside of what essentially is her Social Security benefit.
Speaker 1:Which is with me right now.
Speaker 2:You know which a lot of time is family. We have to move in with family and then the unfortunate thing is, as you get older and if you don't have any assets and your only income stream is Social Security, and you become disabled.
Speaker 1:Yeah, like if she becomes disabled. Yeah.
Speaker 2:You know, and like with my mom, you know she's 92.
Speaker 1:So if she falls and breaks a hip, you know that's when you get into, I'm pretty sure she's probably fed up, for you know that's. When you get into it, I'm pretty sure she's probably fed up, for yeah, no she's.
Speaker 2:yes, you know she worked as a school teacher for the Cap County. Well, she worked in the administration of the Cap County school system, so she's got a pension from working for them for 30 years. So my mom will be fine. But for people that are just on Social Security with limited assets, you know there's not a whole lot of great long term news. No-transcript.
Speaker 1:She gets Medicare right now. So at this point for me, I'm just, you know, understanding like I just got this large loan from a loanist or whatever. Can we put this here to grow? For you know, I want to really be sure that I can actually help If, if this instance happens with my mother, I want to make sure that I could just be able to pay for it.
Speaker 2:Yeah, I mean, that's that. That is one aspect of it. You know, the thing that people like you know you need to think about, and everyone in that situation needs to think about, is you can do that Right, but you got to be careful, because if you exhaust your assets taking care of mom, what happens to Alexandria when she turns 70?
Speaker 2:When she turns 70, if she's spent all her assets down. And that's why you know for those four, for those sort of people, my advice is you know, find your mom. You know, bless you for taking care of your mom. You know she's living with you, you're helping take care of her, and you'll do that as long as she needs it and you can afford it. But there might be a time where she needs care yeah, the care that you provide to folks she might need to get, and then you're going to have to figure out how much can you afford, and at some point there might be a tipping point. And if you reach that tipping point, then it becomes a very hard decision as to what you can do. Now I talked about the insurance-related products, and so a lot of those things are what's called annuities, and so in an annuity, in addition to being able to grow safely without any loss, based on how the market did in 2000 and 2008 when it went down, 40% annuities just stayed the same the next year, some annuities have what they call lifetime income riders, which basically says it'll give you an income stream for the rest of your life as long as you're alive, and a lot of my clients have utilized those. A great example of that is I had a client two years ago. He had to retire early because he had a brain hemorrhage and he had a 401k balance and he had a pension and the pension was going to.
Speaker 2:With pensions from companies, you usually have a few options. One option is to pay just on Alexandria and if she passes that's it. But let's say that you're married. You can have a joint like payout and then usually have choices of here's a payout while Alexandria is alive and then the spouse will get either 50% or 75% or 25%. It's some sort of percentage of what you were going to get. That's what they will get after you pass. And for this client what we're able to do is take the amount of his lump sum from his pension amount. We were able to fund an annuity that had a guaranteed lifetime income and the amount that they were going to get was a little bit less than what he would have gotten on the.
Speaker 2:And any time we see something a pension with a payout I always say what is the most payout for the spouse? And usually because the pension is owned by the male and therefore we're trying to protect the female in the relationship, and so the annuity that we were able to find the payout was a little bit less than what he would have gotten, but it was a lot more than she would have gotten had he, you know, if we'd taken the spousal continuation maximum spousal continuation option Right, right. And the other benefit is because it was a lifetime guaranteed income. It also has a feature that if either one of them needed long term care help, whatever the payment was would double for five contract years. So it doesn't cover the cost of long term care, it just gives you extra cash flow during that period, and so a lot of clients like that, and what I my job is to make sure they understand that that is not an option. It's a nice, good, steady, safe option because the insurance companies that we deal with are all A to B or better. The work rating I think I deal with is B++, everything else is A and above, and so I'm not worried about the insurance company defaulting on their obligation. So that means you'll keep getting paid as long as you're alive, and I have instances where clients have kept getting paid even after the policy runs to zero. The insurance company continues to pay them. The downside is the returns on those aren't as good as the returns in the market. So it's a matter of making sure they understand the choices they're making.
Speaker 2:I'm talking to a client of mine.
Speaker 2:He's got an annuity that's got about $108,000 in it and he wants to retire in two and a half years the end of 2027.
Speaker 2:And so I calculated what that annuity might pay him out on an annual basis in two and a half years, compared to if we surrendered the policy, which has $108,000 in it. Then let that grow for two and a half years and then use that on one of my income generating options that I have in my brokerage account, and I think I can give him more money on an annual basis through a brokerage account, given two and a half years of growth, than he will get if he just leaves it alone. The thing I can't do is double if he needs long-term care help. This client actually has another policy that's going to be paying him close to $2,000 a month when he retires in a couple of two and a half years, and that's why it's up to me it's okay to take this other policy that would only pay about 10 grand and put it into something that will hopefully drive 11 grand when the time's necessary. And the other difference is when you have an annuity and it starts paying you out, your balance just starts going down, down, down down.
Speaker 1:Yeah.
Speaker 2:But don't worry about that, because you bought it for the paycheck you get every month, right, and so every month you get a validation that it was a decent business decision that you made With a brokerage account. I'll give him the same amount of money and the money just stays there, because all I'm doing is paying the interest and then he's got a lump sum. If he needs something, something comes bump in the night later in life and he has to access the money. He'll have access to that, because the other thing that happens is in the retirement world. There's your health. It lasts for 10 years or so, right, right. Then you get into your mid, late seventies and the energy just isn't there anymore. You're getting older, things are slowing down, and so we call the slow go years.
Speaker 1:You're still retiring Go go, slow go. I got it All right.
Speaker 2:Right, and then you know, and so you don't go as many places, and things like then is time gets on. Then you get into the other phrase, which is the won't go years. Some people call that no go years. You know, my mom is sort of the antithesis of that because she's 92 years old but she has bridge club, you know, multiple times a week. She has Mahjong multiple times a week she goes and exercises in the pool down. She currently lives in the villages down in Florida, so she's you know, she's doing all these things At 90 something years old.
Speaker 1:At 92 years old, she's extremely very active, right.
Speaker 2:I love that. So she is now approaching sort of the slow go years, right. But my coin is if you think about the go-go years versus the slow go years versus the won't-go years, as you slow down you start spending less.
Speaker 1:Yeah, okay, I understand that it's a function of consumption. Understood. So you said slow-go, I mean go-go, slow-go. What's the third one? Won't-go, won't-go, because you get hurt.
Speaker 2:Well, because you get old and cranky. I'm not going there. Won't go. No, no, I don't want to go there. There's crowds.
Speaker 1:I like it now yeah.
Speaker 2:So I mean you know some people refer to it as the no-go years, but that implies you know being invalid and you can't go anywhere. Yeah, yeah, yeah, so I like to use the words, we'll go.
Speaker 1:Yeah, I just I'm in the middle a lot with families that just did not prepare appropriately and then they're always very shocked at, like, the price of private care. I mean it could be thousands a month, right.
Speaker 2:Oh yeah.
Speaker 1:You know, 40 hours a week. I just I quoted a lady Monday at $30 an hour. So she's out of about. She's going to pay almost six K a month for care for her and she just is like I. You know she's in the sandwiching generation where she has a husband, kids then, the aging parent. They're all in one roof in a three bedroom apartment Right.
Speaker 1:You know, so it's just like I don't even know what else to do. Right, you know. So it's just like I don't even know what else to do. So I think, for me, understanding where you are today is that is what matters right now. Like you said, like yes, no, I can't expound all of my money on, you know, if my mother needs care, right, but I can, but there's a risk. Yeah, I can. Yeah, but there's a risk. So, if so, are there different vehicles? Like you, like you say you have the annuity, and then there's other things in your brokerage that people the IUL right, can we talk about the IUL.
Speaker 2:Sure, sure. But so you know we can talk about the IUL, because IUL what it stands for, is indexed universal life, okay, and it's a life insurance policy that allows you to make either monthly or annual contributions to it, just like other you know life insurance whole life policies can do. It's the earnings inside of it are tied to the S&P 500 generally. So, just however, the S&P 500 index does determines how you do, and it's really an investment vehicle that really shows its benefits more than a decade after you start it, which is why starting it in your late 60s is not a good idea. Here's the other thing. And so we had a social studies professor in high school, doug Crozier, and he's saying probably he's stuck with me forever. One is Tan Staffel. There ain't no such thing as free lunch.
Speaker 1:Oh, wow, okay, yeah, yeah.
Speaker 2:Okay. And the other one was insurance. If you're buying life insurance, what you're doing is entering into a bet. Alexandra, if you're the life insurance company, I bet you I'm going to die before I finish paying for this thing. Because, especially if it's a term policy, because if you let's say that, you know, let's say you're 35, you buy a 10-year term policy because you think you might die when you turn 46, policy's over, you've paid for it.
Speaker 1:But you don't have it, you can't use it.
Speaker 2:And so the insurance company, they're saying I bet you won't.
Speaker 1:Yeah.
Speaker 2:And so that's how insurance works. And so the other thing about insurance is let's say you had an insurance policy for a million-dollar death benefit Okay, if you. Let's say you had an insurance policy for a million dollar death benefit, okay If I tried to buy one for a client in 70 years old in poor hell, and the insurance company took it. The insurance company look at it and say it's a 10-year policy. Insurance company say well, the guy's in poor hell, he's overweight, he's got diabetes, he wants a million dollar life insurance policy. Okay, there's probably a high likelihood I'm going to have to pay out a million dollars by year eight.
Speaker 1:Bang on, bang on.
Speaker 2:So they're going to well? No, they'll just say if you want it, your premium will be about $120,000 a year, which basically what you're doing is funding a million dollars to get back. So the later you wait to try and get either long-term care insurance because there is separate long-term care insurance that you can purchase or like insurance policy, the longer you wait to try and buy one, the higher the rates go, and so that becomes problematic In terms of trying to use annuities with the lifetime income rider and the doubler. The annuities have to be in the name of the individual. They have to be the owner of it.
Speaker 1:Yeah.
Speaker 2:Right? And if they don't have any assets and they can't fund it, unless you're just going to gift it to them?
Speaker 1:Okay, yeah, and can you, for people that don't know what annuity is, break that down a little bit Certainly.
Speaker 2:An annuity is an insurance company's investment vehicle that will provide you interest credits on an annual once a year and generally will tie up your funds. For you know, depending on whatever the term of the contract is, it can be as low as two years, as long as 15. But let's just say 10 years. It ties up the access to the money, limited generally to 10%, could be as low as seven for that 10 year period. And what it does is it holds your money and at the end of the year or during the beginning of the year you say here are different interest crediting strategies. So let's say you're tied to the S&P 500. And so, whatever the index, whatever the percentage change in the index is from year to year, you get that up to what's known as the cap. And so the insurance companies think about it this way. The insurance companies told you that in 2000 and 2008, when things went down 40%, you don't lose a penny. The flip side of that agreement that you have the insurance company is next year, when then all those indexes went up 27%, you only get four or 5%, and that's the risk. So they limit your growth. But it's nice, it was the classic tortoise and the hare. It's slow, steady, safe growth over time, and so you have to make sure you understand what you're getting into.
Speaker 2:Annuities generally have a bad name, but there are annuities that fulfill needs as long as everyone's clear. So, like the client that had to retire early, he was going to get a pension, right what we ended up doing. So technically, here's how it actually funny work. His pension buyout was almost the exact same dollar as his 401k and we wanted to get this thing going early. It takes about six to eight weeks to run the paperwork and the calculations to get the check on a pension if you take the lump sum, but the 401k gets transferred early. So we took the 401k money and used it to buy the annuity and then, when the lump sum came in from the pension, we parked it where the 401k money would have gone into a brokerage account. But in this situation, finding what I call an income annuity worked really well from their assets because we actually were giving the spouse a better cashflow stream by taking it and putting it.
Speaker 2:So it all depends on what you're trying to accomplish, and you know there's lots of people out there that hate the market and, by and large, the reason they don't? They hate the market. Is it's hard to understand the market? Okay, right, they hate the market. Is it's hard to understand the market? Okay, right, because you know. For example, you know someone will say you know the Dow's up, but my account's down. Why? Well, let's take a look at your account. At this particular moment in time, the Dow was up that day, but the S&P 500 was down and the NASDAQ was down, and most of your investments are S&P and NASDAQ companies. The Dow is only 30 companies.
Speaker 2:Here's a little piece of trivia that everyone should know and learn and enjoy. So you know the Dow Jones average, right, you've heard that phrase. Right, it's 30 companies. That's it. Think about how many companies are out there. The S&P 500 is 500 companies. There is an index called the NASDAQ 100, but there's also the NASDAQ, and the NASDAQ is thousands of companies. There's another index called the Russell 2000,. Right, and so there's, you know, but anyway, back to the Dow Jones. So the Dow Jones is named after a guy named Dow Jones. He created it. The reason he created it is he had a financial newspaper he wanted people to buy and read, and so he created this average to stick in his newspaper as a hook for people to try. Hey, let's see what happened this week or this day or whatever. Want to know the name of the newspaper. Mr Dow Jones was trying to get people to read the Wall Street Journal, so that's where the Dow Jones Industrial came from. It was a marketing ploy to get people to buy the Wall Street Journal.
Speaker 1:Okay.
Speaker 2:But people need to recognize that the Dow Jones is only 30 companies.
Speaker 1:They don't even know that. Yeah, that's a new one. I know S&P 500 is 500 companies. It's in the name, right?
Speaker 2:And so what the insurance companies will do is they'll say, okay, we'll give you the opportunity to earn interest tied to the S&P, and say here's what the index is on the day. I've got a policy in front of me. It was issued on June 16th and so whatever the S&P 500 was on June 16th of 25, what is it on June 15th of 2026? And what does that percentage change? And in this client we get up to the max that. Oh, let's see what the max is on the S&P 500, on this policy, Because I don't know off the top of my head.
Speaker 1:He's pulling out from papers guys looking at. Is that a profile?
Speaker 2:No, this is an actual contract. Okay For a client, then I'm getting ready to deliver On this one. We didn't pick any of the index-related choices because this is a brand new contract in the current interest rate environment. This contract had a guaranteed interest rate of 9% and so we said, hey, 9% guaranteed for one year, I'll take it.
Speaker 2:But I think the cap on this one was like 9.75. So if the S&P 500 had gone up at least 9.75, then they would have gotten interest credit of 9.75. So if the S&P 500 had gone up at least 9.75, then they would have gotten interest credit of 9.7. So, whatever the balance is in that account or in that bucket, so when you have an annuity, you have a total value of the annuity and you're allowed to break that value into different buckets to try and earn interest credits. No, you just try and spread it out, so it's not all eggs in one basket and so on that basket you would have gotten a 9.75% return if that were the cap. If the S&P only returned 5%, you would have gotten 5% because it's less than the cap. If the S&P jumps 27%, you still only get the 9.5% or 9.75%, whatever it is. But on this one, just because we refer to it as the fixed interest rate. Think about the interest rate your bank gives you right now, which is like nothing right, and this one's giving you 9%.
Speaker 1:Yeah.
Speaker 2:And so a lot of clients say, okay, I'll take 9% for one year.
Speaker 1:Yeah.
Speaker 2:And then we'll see what happens next year.
Speaker 1:Yeah, because I know just recently a lot of people were scared in the market because of the whole Iran situation, but the stocks end up going up, right, yeah. So it's like it's it's it's a riff and there's a risk in it, but also, like you said, there's the fix, the fix side of it as well. I think I think having a little bit of both, you know, looks good to me in my eyes, because you just you never know what, what's going to, what's going to appear and what's not, but you'll have your safe and you'll have your. You'll have your risk and that, that, and you can guide the people through that. Right, correct, so I do, I do. You guys know I like using chat GPT, so I do. I had. I have a few scenarios and we'll go over to cause. We're already at almost 40 minutes. He's great so. So let's see what.
Speaker 1:What challenges have come up with. Retirement, so the unexpected, early retirement. A 62 year old executive becomes the primary caregiver for their spouse who suffered a stroke. They need to leave their high paying job earlier than planned to provide care, losing both income and employer health benefits. The specialist could explore options like COBRA continuation, early Social Security claiming strategies and restriction retirement accounts to bridge the income gap. What are your thoughts on that?
Speaker 2:That's all accurate. So if, in that sort of scenario, what you would be faced with is both people have lost their income, so then they're forced to look at other Medicare or medical coverage, you know insurance options For the person who's been disabled, that's going to be a tough one just because they're, you know, not at Medicare age yet. Yeah, so there might be a way to, you know, get into that. I don't do a lot with that sort of scenario.
Speaker 1:The insurance yeah, way to you know, get into that I don't do a lot with that sort of scenario.
Speaker 2:Well, the Medicare in terms of early trying, you know trying to find exceptions to try and get it started early. You know, in terms of like for just medical options, like, for example, I do have a health care plan I use for myself and my family. That occasionally leaves me with a, like my one of my kids had to go to the urgent care recently and that ended up costing me the gross bill was $590. My insurance plan paid 400 of it so I had to cover the last 190, which is kind of high but it's not regular. So in terms of what happens, you know the way my my health plan works.
Speaker 2:Is I, because of bookkeeping stuff and the fact that I've spent so many years in public accounting, I can't help but track stuff. I know that outside of my monthly premium, which I think is one third of what a healthcaregov plan would cost my family, it's like one third of it, or at least half of it my out-of-pocket costs like paying for that $190 versus not having to do things, but my plan reimburses me for activities, sometimes Net-net. My net out-of-pocket costs for the last couple of three years has been a positive cash flow to me. So I don't mind paying the $190 because I know I made more than $190 net from the plan last year in terms of out-of-pocket costs yeah, so it's a matter of exploring what different options you have. The other thing that they're going to have to look at is if they're both retiring and they're age 62, they would be eligible to turn on Social Security.
Speaker 1:Yeah.
Speaker 2:Right At age 62. So that would definitely be something they'd have to look at. Now I do have clients that, for example the client who had to retire early. And so you know, now they've got both social securities to help fund the lifestyle of the house In your example, they will probably have to look into turning on at least one of them. They may want to turn on one. Let the other one continue to cook and grow, because with Social Security you can start taking it at 62. For every year you don't take it, the amount that you're going to get is going to go up about 8% a year and if you're continuing to work and you're continuing to earn more than you did in the past, it'll grow a little bit more than the 8% and then at age 70, it won't grow anymore. So if you haven't turned it on by, then go ahead and turn it on.
Speaker 2:But there could be a strategy where they turn on her social security if his is a lot more. Because here's the other thing about social security If you're married and you've got two social Securities, then generally usually one's greater than the other. If that's the case, the one that's less the amount that they're allowed to or they're entitled to is the greater of their own or half of their spouses. And so if their spouse is 3,000 and theirs is only 1,000, they can step up to 1,500, half of the three when the spouse turns theirs on. And so there might be a strategy for that scenario where you turn on the spouses whoever who was disabled, turn on their social security, don't turn on the other one to let it grow more, and then, as times go a little bit tighter later, then you can turn on the second. One gives you a second income stream and maybe you'll be able to raise that other income stream as well. So it's all part of knowing what your options are.
Speaker 1:Trying to lay it out. Yeah, knowing you know and this is why we go to the experts, because sometimes we don't we may not know what that is, and then you're just panicking, right, Right, and then with her job she probably could transfer that 401k and whatever.
Speaker 2:Yeah, presumably if they were high-powered executives, that they would have 401k plans and then they would roll those over into brokerage accounts and then find a. Some people like to do it themselves. That's great. Other people don't, and that's why I'm here. The people that want to do it themselves congratulations, they end up commenting in a way.
Speaker 2:Sometimes they do, but you know, you roll it over into something and the advisor then will look at it and the advisor will help them. Okay, do I need, like for my client, 100% of what they had went into income-producing accounts because it drove an income every month, into income producing accounts? Because it drove an income every month, the income of about between eight and a half and 9% of the invested balance was getting flowed out to the client every month. And so in the scenario that we just went over, yeah, you would take their 401ks and put them in, invest them in a way to drive an income stream because they both retired.
Speaker 2:And so in my world, what I like to use is the terms gazins and gazals. A paycheck when you're working, that's a gazin, because it goes into your bank account, and then, when you got to pay your mortgage, that's a gazal left. When you retire, the traditional gazins disappear with it your paycheck and you got to replace that. Usually you replace it with Social Security for the starter, and then you say, okay, what are my other sources of gazins to supplement my Social Security, to align with what my lifestyle is, which is the gazouts?
Speaker 1:Right, right. I love that. I love that. That was a great scenario and I think we are going to wrap up now because we're going to come back. We're going to come back. We're going to come back. We're definitely going to come back with more scenarios and just more questions.
Speaker 1:I know a lot of people have a lot of questions retirement but I think the best case scenario for aging the children of aging parents right now is to get prepare ourselves as well, right, get ourselves in the game, put some skin in the game and really, you know, if you, however high, you can get that income and start getting assets at an earlier age, because sometimes we're not in a position to pay, you know, for that care, right. But if we are putting ourselves in position and getting properties and just one little thing at a time, and meeting with people like Jack to set us up well, then we will be more prepared. And then I always say look at the type of insurance mommy that has right now, you know, is they. Look at the type of insurance mommy dad has right now, you know, long-term care insurance. If they can get it before they, you know, decline.
Speaker 2:My advice is if you want to get long-term care insurance, start shopping before you hit 50 years old.
Speaker 1:Definitely yeah.
Speaker 2:Because you can buy it anytime you want. My scenario of a life insurance policy of a million dollars for an 80-year-old person they're going to pay a million dollars for that life insurance policy. Same sort of scenario for long-term care insurance. If long-term care is going to cost $6,000 a month at $72,000 a year and you want to try and buy long-term care insurance five years before you think you're going to need it, you're going to fund $70,000 a year.
Speaker 1:So age 50. I just sort of you know, so so 50, age 50. I just, I just throw that as a marker right, that's a good age to try to, to try to get that, and I always say I always just just be, you know, be as healthy as you can, you know, get insurance. Just just try to stay off motorcycles. I mean guys, just try to take care of yourself as well, because you want to age gracefully Well and the other thing is especially for the children, right.
Speaker 2:The children need to make sure that they understand what their parents' financial situation is. Right, and sometimes it's not easy. It's so funny to me how families can be very tight lipped with each other about money. You know, if I can't talk to you about it, I'm supposed to go talk to strangers. Yeah, ok, but you know. But then, and you know, you need to impress upon your parents Look, I'm not trying to get in your business. I'm trying to help you I need to get to you, but I need to.
Speaker 1:I need to get to you, but I need to get some information so I can be in position to help you the best way possible when that time comes 100%, and I kind of try to help families navigate the conversation, because you have someone who may be losing their memory and you need to know sooner than later what's happening, because that person could be, you know, have Alzheimer's or dementia at 60 years old, 55 years old, and then you don't know what's going on and then that no feel, you don't have a power of attorney, you don't have anything. So the sooner you can get ahead of it, the better, and I'm trying to like get families to have more conversations earlier, because the side that I see is more of the side that's not prepared. And then you know you have these nursing home full of people who are family members. I love you, but there's nothing I can do and it's like we just need less of that now, I feel. How can people find you online right now and work with you if they need to?
Speaker 2:Wonderful question, so just go to wwwsuccessfulretirementcom.
Speaker 1:Wonderful question, so just go to wwwsuccessfulretirementcom. I wish you'd pay for that. Did they have that domain for sale, was that?
Speaker 2:Yep, okay.
Speaker 1:Good. Good, Because I know that seems like a very popular domain. Just a topic, but thank you so much, Jack, for coming on. No, no we appreciate you and we will be back. Y'all have a good one.