Business Innovators Radio - Interview with Andrew Hanson Vice President of Generations Wealth Management Discussing Creating A Financial Plan for the Future

Episode Date: December 18, 2024

Two generations of trusted Hanson financial professionals serve multiple generations of clients concerned with financial goals, wealth management, safety, security, and estate planning. Richard Hanson, President of Generations Financial & Insurance Services, began his career in 1983. He is currently an educational speaker on retirement and money management. Mr. Hanson is Designated as a Certified Senior Advisor (CSA). He Currently Holds a membership with the National Association of Life Underwriters. 2011 Insurmark Hall of Fame Inductee. Andrew Hanson, Vice President of Generations Financial began his career in January 2016. He is the Head of Case Design Team & Digital Outreach. He hosts numerous Seminars educating our community on such subjects as; Social Security, RMD’s, Asset Protection, Legacy Protection, College Funding and IRA / 401(k) Analysis.Learn more: https://www.generationswealthmgt.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-andrew-hanson-vice-president-of-generations-wealth-management-discussing-creating-a-financial-plan-for-the-future

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Andrew Hansen, who's the vice president of Generations Wealth Management, and we'll be talking about creating a financial place. plan for the future. Andrew, welcome back to the program. Hey, Mike, how you doing? Thanks for having me on

again. Hey, you are welcome. And obviously, in creating a financial plan for the future, we want to create a successful financial plan for the future, meaning retirement. And that means we got to start earlier than a lot of people probably put it off to be. You know, I think that a lot of times people go, oh, someday I'll get that in place and then time creeps up. So I would like to just start with the first question that comes to my mind, boy, when you start talking to some of your clients, how far ahead of retirement are you wanting to start developing that good, solid financial plan? Yeah, great question. I think, you know, you spoke to it. There's never, you can never plan too early, but you can plan too late. So there's never, I tell people never be concerned, like,

should I start now? Should I start later? It's the same thing with any kind of, you know, tasks that we have in our daily lives. It's like you said, you're procrastinating. I'll do it another time. I think my stuff's okay. So I always tell people making that first step is going to be the hardest.

And it's imperative that you do it as soon as possible because I've seen positions or situations where people do it too late and, you know, you're... And then there's just no time for it to develop. Exactly. So you're not, you can put a plan together, but you don't have the time for it to envision and for it to prosper and for it to do what it's supposed to do. And with any kind of financial planning and the differences between clients, is time can either be your best friend or time can be your worst friend. And I always tell people that first step is the hardest. And wouldn't it make sense?

I'm just kind of thinking out loud, but wouldn't it make sense that if you put together a plan, you can have the skeleton foundation bones of the plan in place and not be putting men. mega dollars or mega resources into each one of those buckets, but at least start, you know, start with something. And then as you get older and older and closer to retirement, you can start amping up that, but at least you've got the plan in place. Yeah, exactly. And I think for the younger generation, that's a lot of people think, well, especially, you know, you're talking to age 30 or 40. They just started the family. They just bought their new home. The kids are, you know, younger babies, some would say, they feel they don't need to have a financial plan because what do they plan?

They don't necessarily have the assets because we're at the start, pretty much starting finish. Okay, this is where this is adult time. We're going to start right now. And it's like, well, I don't have these assets to build. And that A can be overwhelming in general.

But when you tie that into, hey, I don't necessarily have anything and I don't want to look at it because then it's like, it's going to give me this anxiety. Like, why don't I have this? Yeah. I have that.

And, you know, I tell people, again, that that first step is the hardest. But when you do that, you can see that even making just minor changes or minor goals or, or, or positionings that you can see years down the line, you're not going to be where you're at now. We're going to be able to put this plan in place to where, you know, you can, you can see a brighter future at the end of the road, you know, whether it be five, 10 years from now. But at least you're putting in the plan and putting in the steps. and all that anxiety really it washes over. And you start at that level where you're at, and you begin with the end of mind and you see where you want to be, and then you get momentum and you get encouragement and motivation as you continue on through.

So I think that makes perfect sense. What are the first steps in putting together that comprehensive financial plan? I think that a lot of times people can get confused and go, well, it needs to have all these things. Well, let's make it simple. What are some of those first steps and what should a comprehensive financial plan? comprehensive plan include. Well, I think the first step in any kind of plan, it doesn't necessarily need to be numbers.

I think it's really just goals. And goals and you look at, okay, I want to make sure my family's taking care of should something happen. I want the kids to have, you know, a college fund. Where do I start from there? So, I mean, you can talk about numbers to your blue in the face, but what are the goals that we want to achieve? What are the concerns and fears that we have? I mean, a lot of people my age, 30 to 40, is Social Security going to be there?

You know, how can we plan for the potential loss of Social Security? I myself am not playing on taking on any Social Security. So that kind of, in a weird way, it is a little bit scary, but it's empowering. Because now I know I'm not reliance on something that can or maybe not happen. So that kind of, you know, pushes me forward to, okay, I've got to establish something for my else, something for myself and my family. So it's empowering, it's invigorating to say, I'm going to put this behind the paper and just, this is what I'm going to build. I don't need to be. And if you've got the plan that plans for the worst or, you know, those contingencies,

if in the example you just gave, if Social Security is there in 30 years, then great. That's just a bonus. But if it's not, you plan for that, you're not caught off guard. Exactly. And that's what we talk about when there's never too early of a time to plan. There's too late of a plan. There's too late of a plan. I mean, you know, fast forward 40 years from now and you weren't planning on losing out on Social Security, you get to that age and you're like, where's my Social Security? It's gone. Well, what was I doing for the past 30, 40 years? And I know, you know, it's hard to, you know, envision what it's going to look like 30 to 40 years from now, but why not to start now? It doesn't, it's not going to hurt you. But yeah, again, that first step is always going to be the hardest.

But yeah. And then you then you polish it up. and shore it up and improve upon it each and every year. It's not something you set it and forget it. Yeah, exactly. And it's, it's really kind of invigorating. And it puts confidence back into your life, which is weird to say because everything's so chaotic and so crazy. But if you're able to sit down and put a financial plan together with an advisor, that really

just, it helps, you know, keep things concise. You have a plan going forward for all the craziness outside of, outside of this initial plan because, you know, I'm speaking for myself. I got two little boys and wife, family, and school and drop-offs. And life is crazy, hectic. I wake up in the morning and then, you know, 12 hours passed by and then I'm going to bed. So it's just always chaotic. So when you can find time to sit down with an advisor and they can break down in the most simplistic

ways possible how a financial plan works and what that looks like going forward and here are the steps we can make, it's really one of the more stable things in your life, in my life personally, and we see it with a lot of clients. Like everything's so synced and everything's so stable here. I have a plan. You evaluate annually. We're going to stay on top of this. And it's just, it's one of the hardest steps to make, but it's one of the best ones you're going to make. So once you put that plan into place, and then you, of course, should be reviewing it with your advisor annually.

I would say that would be, you know, every six months to 12 months. how do you make sure that that plan is still flexible that there could be some nuances that change when life changes you know so you might have an extra child you might see taxes went up you might see inflation went up so some things could impact that plan but how do you make sure that it's flexible to bob and weave and adjust to those changes well i think just any type of vehicle or any type of plan should always be prepared for the worst so you want to create certain scenarios especially with taxation. I mean,

you can do the analysis and look at the current tax rates and what they are potentially going to be in the next couple of years based on government spending and GDP. You kind of want to prepare for that in your plan. So you always want to have different scenarios. Like you said, getting with the client

and saying, hey, do you guys plan on having any more kids? And then it's, okay, we plan on having two more. Okay, what does that look like if we plan that, if we want to develop a college firm for them? Or if we want to do, you know, do private school or we want to sign up for hockey, you know, that, that ain't cheap, especially now. Hockey's especially at a team sport.

So you always want to plan, I hate to say, you want to plan for the worst, hope for the best, we do pessimistic planning. We know that if we're able to meet on these doomsday scenarios, so to speak, then we're in a great position, you know, we, you always want to have those different scenarios. And I think, you know, especially people in a young. younger generation, when they started their first financial planning, we talked about it. There's so many uncertainties and you don't have anything necessarily to fall back on. You haven't had the time to build up those assets.

You may have a company 401K, you may have an IRA, you may have a Roth, but it's, you really have to customize your plan to what fits you specifically and not just a generic plan that fits somebody like you, but a totally different scenario. Because every plan is not going to fit and work for every single person. Otherwise, it would be like, oh, well, let's go Google it. Check, set me up, and it's done. Everyone is different. Everyone has different needs.

They're in different stages of life. They have different income, debts, aspirations. So what are some of the tools, resources, or even, you know, product classes that would go into this financial plan to make sure that it's setting them up on the right foundation? Well, one of the main things I think, and it's a good starting vehicle to look at, and a lot of times it gets overlooked, but for specifically the younger generation, life insurance is always a main concern or a main talking point with them. And more often than not, they don't know necessarily what life insurance they have. They might have it through their work, their company that they work with. They don't know the difference between term, index universal life, whole life. So there's a lot of, you know, just like any type of vehicle, there's a lot of different.

nuances and different ways in which they can utilize, you know, like I said, life insurance. But what I find helps the best for my younger clients is indexed universal life. I think that's the best flexibility. It allows for a lot of different variations. When you come into, you just talked about it. How can you say flexible with the market? How can you prepare for ever-changing situations specifically in the market? Taxation.

IULs are perfect because they allow. allow for clients to pretty much pay for life insurance, but they're depositing it into a cash component as well. So it operates the same way like it would a Roth 401k. So you're depositing that. You're paying for the life insurance, but you're also paying for a tax-free cash component. So we're building that IUL, and then when time comes and we're at an older age, we don't necessarily need life insurance because we've had the time to build up those assets we had 30 years ago. They were so small when we started, but now we have time to build it up. So we don't necessarily need a huge, huge life insurance because we have those assets that we can pass onto the kids.

We have the cars. We have the house. We had like I said, the 401k or the stock positions that we built up over time. So why not take from this IUL that we put in over time? We can take that out now as tax-free cash to supplement our retirement. So that's one of the biggest tools I utilize for all of my clients based on their goals and their situation that they're in. And I think it's one of the best, if not best investment vehicles specifically for somebody who's just starting out. You know, you said a lot there and I want to unpack it a little bit to really expand on some of those benefits because you said this is an investment vehicle. You said it's a tool. You said it works similar to a Roth IRA and tax free and cash. All of those terms do not really jive with what

people think of as life insurance. People typically think of life insurance is you die, you get that face value and there it is. You're talking about things that have benefits right now while you're living. Yeah, exactly. I think, like you said, people think of life insurance. They're paying for life insurance, and that goes on to our beneficiaries when we die. You know, if it's a term and I paid it and I exceeded that term, then that money just disappears and I never have life insurance again. But this component specifically with IULs is, like you said, there's, it works as a living benefit. So you can use, it's a life insurance you can use while you're living. So you can. You can use it for tax-free retirement income.

You can use it for long-term care should that happen. And I know a lot of people, especially that are just starting out, don't necessarily think of long-term care. But one of the greatest things about medical science is that we're living longer. The problem is that we're living longer. And there's a lot of different diagnoses involved. So it's not a lot of people think about long-term care, but it's a nice component to have. the main one, but it's another living benefit that's involved with that index universal life.

So, you know, one of three things are going to happen. You're either going to die. You're going to pass that on to the beneficiaries. You're going to go into long-term care or you're going to be able to spend that while you're living tax-free retirement. Basically, yeah, just taking it in as tax-free income for your retirement. You know, when you mention long-term care, I know enough about the industry to know that there are types of long-term care policies, standalone policies. So if you needed it, then it's like your car insurance. You make a claim and there it is. But if you paid for years on end on that policy and never needed the long-term care, those dollars are wasted, but that's not the case in this kind of a scenario, right? It's just like a benefit that's inside of the life insurance,

but if you never used it, the money still just keeps growing. Yeah, exactly. I mean, when you talk about indexed universal life, the keyword is index. So anytime you're making a payment to this life insurance policy, a portion of that is going to a specific index. And if people aren't aware of an index, it operates almost like a mutual fund. It's a combination of multiple different stock positions, bonds. There's like any annuity, like any life insurance, there's a million different indexes. So you want to be aware when you need financial advisor, how that index is structured and doesn't fit your needs? Is it something that you intrigues you?

Because when I speak with clients, I want to make sure that they're aware. Because at the end of the day, this is their portfolio. This is their game plan. I want them to be comfortable with, you know, the positions that we set them up in. So a portion of that is going to grow. And the great thing about index universal life is you're never going to lose that principle. If the market goes down 10%, you're locking in that cash value within your life insurance policy. So if the bottom drops out of the market, air quotes, you're not taking it on the chin.

So that's a good safety feature. Yeah. And I think given today's volatility and most recently the millennials have experienced a lot of some downs, a lot of crazy market volatility. and for us to be able to participate in a growing market is great, but then on the back end, we're protected from any market losses. I mean, it provides peace of mind unlike anything else. And I think anytime I talk with anybody, you know, 40 or younger, 50 or younger, I always bring up IUS because I think it is the foundation for any long-term financial plan.

Yeah. And you talk about the flexibility in IULs. This is something that I have for my two boys. I have an 18-month-year-old boy and a four-year-old boy. They have IUL plans. Interesting. Now, people might think, well, why or how, what is the point of having an IUL plan? Well, my dad did this with me.

He paid premiums for an IUL plan for me ever since I was a baby. When I came time to get married, he said, okay, this is your policy now. So you can continue to make payments or you can take it out tax free and pay for the wedding, pay for the house, pay for the kids. But this is essentially my gift to you. And so that's what I tell my clients. You know, it can be a nice component for college planning as well. So you want to have that because you get in now while they're young and you just build that over time. It's a long lasting financial vehicle.

And you talk about how can you prepare for taxation? How can you prepare for market volatility? How can you prepare for living longer? This is something that will stand the test of time. It's without a doubt one of the foundations for a long-lasting financial plan. Well, you mentioned college planning, and I don't want to get into the weeds of that. But I think that most people have heard of the TV commercials, the 529 plans for their state and whatnot. And if you start that when that kid,

is young and 18 years goes by and now it's time for college. Well, what if they decided not to go to college? Well, now there could be some restrictions in that 529 plan, but that's not the way that it is using an IUL, right? I mean, Mike, you're stealing my thunder. That's what I say to every single one of my clients that I talk about college graduation. I am a proud, proud American and I love America, but I don't want the government and they're telling me what I can and cannot do with my child's college fun. And you just talked, I mean, you can get, like you said, you can get into the the nitty gritty of five to nine plans and how they operate. But there's always going to be some form of restriction. But with the IULs, it, and you know, you're talking ever changing times.

You just, we talked about it earlier. What is college even going to look like now? Yeah. You can go, you can go to YouTube and learn half the stuff on college or that you could have four year university. So I think that's environment and that, that the college environment is going to be totally different than what we see now. So, you know, I'm a big proponent of that. It keeps your options open. Exactly. So IUL is allow for a lot of flexibility.

You can take that if, you know, and hey, if you get to scholarship, how does that operate as well? Well, hey, here's your IUL plan. You can continue to pay for it. If we could take half of it, you can get yourself a new car. Again, a lot of flexibility and nobody's telling you what to do with it. So let's kind of look at the other side of the spectrum. We talked about the very young kids that you can set that up for in case they need for the college and all that. And then you mentioned passing it on to the kids as legacy planning.

So without getting into legal or tax kind of ramifications, isn't it true that when you have this kind of a product in place, when it comes way down the road to your past retirement, a lot of times people just have the goal of getting too. retirement. Well, you got to get through retirement. And then if you have money left over after that, now you're talking about legacy planning, passing on to your kids. But having this kind of a product, that really helps and mitigates a lot of the red tape with that, doesn't it? Yeah. And you brought up a good point. I'm going to share kind of a story that I do with all my clients is. Most of the Mount Everest, you know, climbers when they get to the top, a lot of the deaths do not happen going up. Most of the deaths happen when they come down. So that, unfortunately, is a sort of demise look on financial planning in retirement, but

that's kind of the same concept. There's a lot of people fail in retirement. You can get to retirement. It's just you have to be able to manage it that way. But, yeah, you spoke to it, leaving a legacy plan. So without getting too much into it, IULs are sub tax code of the Roth 401K. So it operates in that same vehicles where you're paying taxes up front. And then as it's growing, you're not necessarily paying taxes on a larger amount.

Where if you had like an IRA or a qualified account, you're not paying taxes on that up front, but you're paying taxes when you take it out. Yeah. Aside from capital gains and you can do the math on that. But generally speaking, that's why IULs are, again, a big opponent when it comes to taxation. Because who knows what that world is going to look like. 30, 40 years down the line when you pass this onto your kids. And yeah, and if you had that IRA and you passed it on to an air, the taxes have never been paid on that.

So now someone's got to pay it. So that's when those kind of things come in. And then there's deadlines and all of that that, you know, your tax and financial professional can dig into. But the concept with this is it keeps it nice and clean and it just helps that transfer to be with as little red tape as possible. Yeah, and you basically want to pay the taxes on the seed, not the tree because you have paid taxes on that tree is going to be much bigger than that little seed that you plant it. So just like any IUUs or any Ross, which I'm a big proponent of, I know I could talk about another podcast, another three hours on Ross.

Same overall concept. You're going to pay taxes on the smaller amounts versus that larger amount when we do get to retirement. But isn't it true, too, that as much as we all like Roths, whatever the limitations are, the annual contribution or your income, there's some limits. Well, then maybe you have the Roth up until a certain limit. And then you go in with this other strategy here with a permanent life insurance to kind of fill in there. So they can work hand in hand. Yeah. And that's when you talk about financial planning and taking those steps, that's something that we're going to cover.

As we make sure, hey, we're going to max out these contributions to the Roth, and then we're going to pretty much subsidize or take in whatever premiums we want, and we can put it to the max with our IUO as well. Perfect. And it's permanent. So if you're going to get life insurance, you're going to get all the testing, why not do it now? Why wait, you know, 30, 20 years from now? You know, and permanent is a word that made me think of something super important, because if you do want to compare. term life insurance to the permanent. One of the benefits of the permanent is you take all of the health test and all that and you get it set up and you never need to do it again. Versus if you get a 10 or

20 year term policy, whenever that expires now at that other age, the later age, what if there are some health issues and then you can't get it? So I think it gives some other benefits front-loaded on that permanent policy. Yeah. I mean, it's permanent in every true sense of the word because, you know, about premiums and paying for that term is you're going to be putting all this money away and then 20 years from now that term runs out guess what you don't have that life insurance and if you do want to keep it they're going to charge you triple double at the age in which you're at now or you know after that term and another great thing about you talk about premiums and payments with iuels is they have a proponent in there or a component flexible premiums so meaning and this is another thing another strategy

you can talk about with your advisor with financial planning. This is what we do is you have all that time to build up that IUL, right? You're putting in the premiums. The cash is growing, is growing, is growing. At age 60, we could just stop paying it. And we're not going to lose it. It's not a term policy. If you stop making your term payments, you're going to lose it.

As long as that cash component has enough money to meet the premium, pretty much the premium payments, it'll keep going. If you miss a premium payment or a scheduled premium adding money into the IUL, the IUL is going to internally just take it from the cash value. That's a safety feature. It makes it feel like it's not really a bill because if some extreme circumstance and there needed to be a month or two or a period of time, you can coordinate it so that it doesn't just automatically go into default or whatever the case is. There's a lot of flexibility there it's sounding like. And there's probably 30 more benefits that are in there. That's why it takes you need to talk with someone that knows what they're doing, knows your situation,

and knows how to properly structure this. Because to me, it sounds like this, you can't just go out and Google, give me one of those and set it up. There's a lot of things that go into it. Yeah, and you spoke to it. I mean, given how crazy the world may seem and how up and down the market may be, this is something that's always going to adjust to any. sort of time or any sort of volatility that you throw it.

You talk about taxation. It has the ability to adjust with that. I think this specifically IULs and a permanent life insurance is by far the best for anybody who's concerned with anything. It does a great job at addressing all concerns and all goals, I think. It's one of my favorite things. It's not as sexy as Bitcoin and crypto, but it's going to carry you for a lifetime. That's what I tell my clients is I tell my younger guys,

They come and talk about crypto, Bitcoin. I said, that's great. You can have some of that. But let's do some serious talking. Let's do some adult. Get the meat potatoes foundation down first. Yeah. I know.

So in your experience, what are you finding some of the mistakes people are making when putting together that plan for long-term financial success? Because I think if someone can hear like, ooh, here's some of the top mistakes people making, well, I want to avoid those. Some of the top mistakes I think would be specifically with the IUL. is understanding the company itself. And I know it's oversight to think, oh, well, all companies are created equal. Customer service is key.

I think the customer service is we only work with the top customer service rated companies because anytime we need help with something or anytime we need a form, you know, it's like overnight it's done for us. The company ratings, you want to make sure that they're financially sound because this is something that like you were saying. permanent for light. We want to make sure that as long as we're around, the company that we're working with is around. So you always want to make sure that the ratings and specifically the indexing. You want to make sure that there is such a thing that's going broke safely. So you want to make

sure that you're staying on top of those indexes. You're talking with your advisor and you're analyzing the performance. And if there are changes that need to be made internally, then we'll make those changes internally, but, you know, like any sort of fixed index annuity as well, you want to make sure that how that works internally is able to maintain your lifestyle, because this is something that I plan on keeping for a long, long time. Yes. Well, I know that there are many, many other considerations to put into place. We've touched on some of these great ones from an overview and talked about some of the strategies for creating that financial plan for the future. Thank you, so much for coming back on. If someone is interested in connecting with you, what's the best way

that they can reach out and learn more? Thank you, Mike. I appreciate it. Yes, you can visit our website, www.org, www.org, mgt.com. All our contact information is there, as well as our YouTube, socials, so you can slide into our DMs from there. Thank you, Mike. I appreciate it. Thank you so much. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.influential entrepreneursradio.com.