Business Innovators Radio - Interview with Ben Green Co-Founder of Ready2Retire™ Discussing Annuity Strategies

Episode Date: August 16, 2023

A native of Columbia, SC, Ben is Co-Founder of Ready2Retire™, the leading retirement planning firm for people who want to retire with confidence. Ben greatly appreciates customer service and client satisfaction, honed from over 20 years of experience, and is recognized nationwide as a top retirement, insurance, Medicare, and Social Security planner.He has over 2,000 clients and has educated over 10,000 people. Ben is also President and COO of Insurance Advantage, an employee benefits agency he co-founded 13 years ago. Ben has previously served as COO of a human resources staffing firm and as Vice President of Asia and Europe for an American software company.Ben has extensive experience in economic development and consulting and worked as a Business Recruiter for South Carolina. Since Ben opened the Japan office in 2012, South Carolina has received over $2.2 billion in investment. In 2014, he was hired to write the Strategic Plan for the State of South Carolina.Based on ten years working overseas in Japan, Brazil, & Spain, he wrote the Amazon Best Seller The Global Superstar: How Your Students Can Develop an Advantage over Global Competition to help students prepare for careers in this changing economy. He holds a Bachelor’s degree in Finance from Morehouse College, an International MBA from The University of South Carolina, and certificates from UNC and Temple University.He’s conversant in Japanese, Portuguese, and Spanish. He has served on numerous boards, including the South Carolina Independent Colleges and Universities Association, the SC Chamber of Commerce, and the Columbia (SC) Chamber of Commerce. He’s a member of the Nashville City Club and the Nashville Kiwanis Club.Ben splits time between his homes in Nashville, TN, and Columbia, SC, with his wife and their two wonderful daughters. He loves traveling, spending time with friends and family, and helping his clients win.Learn More:https://www.ready2retire.net/Investment Advisory Services offered by James Jurica CFP® CLU® CHFC® RICP® through Wealth Watch Advisors, an SEC Registered Investment Advisor. Wealth Watch Advisors has no affiliation with the website represented. Wealth Watch Advisors is not responsible for their views and opinions, and makes no representations or warranties about the accuracy, reliability, completeness or timeliness of the content and does not recommend or endorse any specific information herein. NJM Wealth Preservation Strategies is not affiliated. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed as written or recorded are subject to change at any time without notice and are not intended to be used as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.This information is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that NJM Wealth Preservation Strategies and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney for any legal or tax advice.Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments, and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Fixed Insurance and Annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Wealth Watch Advisors.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ben-green-co-founder-of-ready2retire-discussing-annuity-strategies

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 this Ben Green, who's the co-founder of Ready to Retire, and we'll be talking about annuity strategies. Ben, welcome back to the program. Mike, thank you so much for having me again. You're welcome.

I always love when we can have a follow-up conversation because if we don't want to get too much into the weeds in one talk, but we want to learn specific nuggets of knowledge. And I know that this one is going to be really powerful because I think people have misconceptions about annuity. So before we dive into that, talk a little bit about what makes your firm different and what kind of clients that you serve. Yeah, Mike. So we got started back in 2010, really kind of helping folks with health insurance and then migrated into Medicare and help folks with Social Security. And we started getting a lot of questions and referrals from financial advisors, actually, and financial planners, quote unquote, you know, had lots of questions around what we thought were kind of fundamental parts of retirement. And so we took what we did really well in insurance advantage and migrated it over to and added to. to it, an investment piece for ready to retire. And so really, our clients range in,

uh, range in kind of income and asset levels from $50,000 to up to about $50 million. And they're typically, Mike, around 60 to 75 years old. They're either a pre-retire or they're in retirement. And they want to make sure that all of their bases are covered, not just, you know, their, you know, their, they're, you know, their 457 products are, you know, are covered. So we provide holistic comprehensive planning. We have basically a 12 point tool that we walk through at 12 point checklist. We walk through Mike to make sure that people have their entire retirement plan put together and that they're not just focused on their mutual funds or their IRA.

You know, I like how you lay out that transition. You were serving clients in one specific area insurance and all the things that go into that. And then you started noticing that there were other needs, you know, and that's where, you know, are you ready to retire? And that's where you're ready to retire a concept came in. I think probably you started noticing indicators and noticing clients saying and experiencing and struggling with the same kinds of things. So what are some of the issues that you were noticing that retirees should be aware of

when they start now dialing in preparing to retire? So, Mike, the fundamental issue with a lot of retirees and is simply because of all the advertisements people have seen and, you know, all the rhetoric they've seen is that most people think that your 401k or 457, your 403B, your TSP is a financial plan. Okay. And we have to tell people all the time and we really kind of drive this in the folks' heads until they really get it. The 457, your 401K, your TSP, those are retirement products. Those are financial products just like a CD, a bank CD is, just like a money market account is, just like an annuity is, just like a life insurance policy is. And so we take a look at the

entire spectrum of financial products that are available and see what is appropriate for you at your age level, given your time in the market, if you will, that you still have, given your job and maybe your current income, given your potentially your estate planning, needs, you know, your required minimum distribution needs. If you're 73 or above, now we take a look at Medicare, we take a look at Social Security, we take a look at taxes. And so as I said, we take a look at the entire pizza, if you will, or pie and not just a slice or two of that retirement pie. You know, as you were describing that, I thought of, I'm always a big analogy person. And I think a lot of guys and men are. But I don't play.

golf, but I do play mini golf, but it made me think about a caddy carrying around, you know, like on the PGA tour, here's this whole, you know, amount of golf clubs. Now, when you approach whole number whatever and what's the weather and the wind and the conditions and how far away, that all means you take that into consideration and that means I must select this club over this club. And that's exactly what you just described that you're doing with your clients. It's not the same cookie cutter. Here's this club to use for every single swing of every single hole, you've got to assess. How much time do you have before retirement? What is your age? What's your risk tolerance? All of those things. So I think that is such a big way that you

describe that. It makes so much sense. Absolutely, Mike. And our logo is basically a mountain, sort of like Mount Everest. And what we tell folks all the time is that as you're working and you're working years, you're 40 or 50, even your early 60 years old and you're accumulating assets, That's part of sort of the accumulation phase as you come up the mountain and overcome some struggles. But on Mount Everest, 55% of the deaths on Mount Everest are from folks that have already reached that peak and then they're coming down the mountain. And so at ready to retire, we get people ready to retire. And then we also specialize in wealth preservation. So we are wealth preservation specialist after we have gotten you to that certain level.

and we make sure that folks have peace and they have really kind of a calm period in retirement and they're ready for all the storms that may come. And with all of the financial tools out there, why is an annuity a really good potential piece of the retirement puzzle? Yeah, Mike, that's a great fundamental question. And that's we really spend a lot of time. getting educated on annuities. And what we found is that about 85 to 90 percent of financial advisors, quote unquote, are not actually licensed because they're not licensed in insurance to be able to

offer fixed or multi-year guaranteed annuities. They can only offer what are called variable annuities. And so when you go to a lot of these advisors and financial planning shops, quote unquote, that are right around the corner that, you know, you've heard of sort of like Walmart or or a McDonald's in terms of their offerings, the only thing they can offer you are certain pieces of the pie. They cannot offer you the entire pie like we can with our wealth management team and insurance side. So annuities are really important now and they're quickly might becoming a really a bond replacement option because of the fact that bonds have been getting hammered, especially in the last two years. And everyone who's an investor and certainly who owns bonds or bond mutual funds,

I certainly understands that. You know, that's a really, really good point. And it makes me think of the fact that there's certain times of year, not necessarily the times of year, but depending on what the market is doing, you're going to select a certain financial tool. You know, so if the inflation is high, maybe this kind of a product is going to be better than another kind of a product. So right now at the time we're talking in mid to 2023, what is attractive about annuities now? Yeah. So a lot of the utilizers are the proper clients for

annuities or folks that are either pre-retirees, right? They're about five years from retirement or they're currently in retirement. And so they're transitioning from the growth phase of their life in their career over to the preservation, really the income phase of their of their retirement. And we always say, you know, income or really, you know, cash flow is a king, right? So now that we have, we have fixed rates, Mike, because of the Fed has been raising rates, you know, for the last two years, we have fixed rates that are guaranteed, you know, short term and long term rates that are available with annuities and CDs that are 4.5% or higher. And the stock market, as you all know, you know, It was up pretty high in 2020, kind of late 20, 21 and 22.

And then it dropped all the way down in 2022. A lot of folks who are listening to this, they lost 20 or 25 percent of their portfolio. And we're now back up to kind of a two-year high. So really in the last two years, the stock market is, for a lot of folks, returned 0%. And so we may be in another situation like we were in 2000 to 2013 where the market It went down, it came up, it went down, came up. And over that 13-year period, the average person earned 0% for 13 years, Mike. And as you know, we're really facing a lot of headwinds now.

The U.S. debt is out of control. In fact, just got downgraded a couple of weeks ago. The 10 largest banks just got downgraded by standard and poorest with their debt outlook. Customer debt is at one of its highest levels. really just hit over a trillion dollars this weekend, apparently. You have commercial real estate, which is a lot of that. You already have bankruptcies and defaults coming with that, but a lot of that's coming due. In the next few months, you have the stock market.

Is it kind of all-time value, high valuations when you look at the price to earnings ratio. And the Warren Buffett indicator is also all-time highs. And so if you, if you're a pre-retiree or if you're where you do not really, have that time or if you know you're not working now you're retired and you don't have that income coming in to buffer you then you really have to consider capturing some of the gains or lots of the gains that you enjoyed in the last 10 years and um and making sure that you can live to fight another day and you can live off of that that income that you're going to be really accounting on and so annuity you can never go wrong being safe that's that's right you can

You know, I mean, you hear some people that are like, oh, over the last 20 years, the stock market has returned, you know, whatever the number. Let's just pick the number, you know, 8%. That might be the case when you do this average. But if you took a look at the chart and it's dramatically up and then dramatically, you know, down in the valley, it's like, man, can you stomach that volatility? And yes, while the average might be that whatever, palatable number, man, can you weather those really deep, deep valleys? So I think that there's so many people that just go, you know, done with that, done with the gut-wrenching, worry, sleepless nights. I don't want to watch the news. Give me some safety.

So I know annuities sometimes have some misconceptions, but they're not new. They've been around for a long time. How long have they been around and kind of give us a little bit of a thumbnail sketch of a definition what actually is an annuity? Absolutely. So annuities are longstanding financial products, a whole lot longer. I believe the 401ks were invented in 1974. Okay. As an example,

annuities have been around in total for about 2,000 years, Mike. Wow. But for a lot of folks, the most popular annuity is one, you know, you and I and tens of millions of other Americans really contribute to every year through FICA taxes and Social Security taxes. You know,

we pay our premiums for 30 or 40 or 50 years. And then we hope, you know, we hope we hope we, We hope that we will receive our Social Security payments because Social Security is probably the most popular annuity that's out there, if you will, where it's a guaranteed income stream for life. And really, that is what annuities, that's what annuities do. But annuities are really insurance-based, life insurance-based retirement products that can create a stream of income in retirement, kind of like a pension. And it's a contract with a life insurance company for, which you pay a premium, just like you do for health insurance premiums to either receive

regular payments over a certain time frame, which can be the rest of your life, or there are a lot of annuities where you put down a premium. It's held for three or five or seven years. You earn interest over that period of time, and then you get all that principle back plus the interest. And so there's several different types, if you want me to kind of get into those. Yeah, you know, with the way you described that was safety, security, and now there's different types. And you mentioned that some of the big box kind of providers out there, they're limited to only one type, you know, like the variable. Well, what are someone like yourself, like independent financial professionals? What are some of those other alternatives that, you know, if someone hears, okay, annuity, that's a good safe potential choice for me.

What are some of those types that I can consider? Absolutely. So, so on a fundamental level, you have the deferred annuities versus immediate annuities, Mike. So you had, with deferred annuities, you put down a premium kind of typically a single premium, let's say $100,000. And the, the life insurance company, they're going to hold it for a three, five, or seven year period. And you're going to have interest credited to to your account every year. And that interest is, that's, it's all tax deferred, actually. And so, So, for example, if you have a, if you're taking that money from a 401k or a TSP or 403B, for example, you transfer that over tax-free, if you do it properly through someone who knows what they're doing,

to an IRA in an annuity. And so that's a tax-free exchange there that you have. And then the annuity company will hold that money. It grows as credited to your account. And you do not have to pay any taxes during that period of time unless you have to pull out, you know, required minimum distributions, which we help folks with. When it comes to immediate annuities, that is when someone wants to turn over $100,000 to the life insurance company. And they want to immediately really the next month start receiving payments. And a lot of times you can do those payments

for 10 years or 20 years or you can do those, receive those payments for life. And then with the deferred annuities, with those immediate annuities, we also call them income annuities and that that's where some of the confusion can come into place sometimes. But with deferred annuities, there are really three types, Mike. And the first type is called a multi-year guaranteed annuity. It's essentially like a CD, but with a life insurance company who, quite frankly, has a lot more cash and cash equivalents on hand a lot of times. And most of the national banks that you're familiar with.

And Mike's are multi-year guaranteed annuities, they pay. pay you just a fixed, really they're straightforward simple products that pay you a fixed interest rate every year. So whether it's three, five, seven, or even 10 years, they pay you a fixed interest rate based on that, on that, on that, the amount you put in. And when it matures, you get that principal back plus all of the, plus all the, the, the, the interest as well. with the fixed index annuity is essentially it's a type of annuity that's designed to provide investors with a return on their investment that is linked to the performance of a specific index. So the most popular kind of link is with the S&P 500 index, but they're probably 100 different indexes, Mike. And these fees or these fixed index annuities that can allow investors to participate in the potential upside.

of the market without exposing themselves to the market risk and all the the potential calamities that can happen over the next couple of years. Obviously losses from volatility. That's right. That's right. So it eliminates that downside volatility, as do the multi-year guaranteed annuities because they're just simply your principle is guaranteed based on, based on the strength of that life insurance company.

We will only utilize a rated companies. and that principle is guaranteed. Your interest is going to be coming in guaranteed. And with those fixed index annuities as well, you have eliminated that downside risk. And you have the opportunity to earn a return with the indexes that it's linked to. So there's just one choice and it's really easy to understand the choices, right? But I say that in Jess because I think that so many times people go, oh, I heard this on the radio of the TV. I'm going to Google this, click, click, set it up.

Goodbye. It's not a one size fits all. If an annuity is a good choice in your retirement puzzle, let's see what all of these options could be. And let's talk to someone that can assess. And so, like, who are annuities for? I mean, is it for someone that is fresh out of college or someone that is in their 80s or 90s? So who typically of your clients, what type of people are choosing annuities? Yeah, that's a great question. Before I get into that, I do want to talk a little bit about the last annuity, which is quite frankly, the one that a lot, we're coming across a lot of folks have been, they've been selected into this annuity really without understanding the fact that there were two other types that were available. And that's what's called a variable annuity, Mike. And that is the one that only securities license folks can offer, whereas they cannot offer the fixed index annuities and the multi-year guaranteed annuities.

And variable annuities are the ones that get so much negative advertisement, if you will, because when you call them variable, that's exactly what they are. The investment can go down and it can go up. But we've seen them where they've gone down 15 or 20 percent. And variable annuities typically also come with fees. The average fee is between 2 and 2.5 percent per year. multi-year guaranteed annuities are a 0% fee because it's like a CD. You put your money in, they give you interest. Fixed index annuities, they can come with some fees.

If you add an income rider, for example, or other bells and whistles, we typically only recommend those with zero percent fees, Mike. And so literally the first two annuities, I talked about, the multi-year guaranteed ones and the fixed index ones do not come with fees with our firm. Okay, we not work with fees. That's good. Variable annuities, absolutely.

Variable annuities, on the other hand, can come with lots of different fees. You can lose a whole bunch of money. And we, quite frankly, a lot of times do not understand why other advisors have put folks into these, into variable annuities, except for some other reasons other than the best interest of the clients. And so did want you, did want, you know, the public to know about those types of annuities because those are the, the types of annuities that can can go go really wrong and cause a lot of a lot of issues with with clients now in terms of who we work with and in terms of who annuities are good for typically someone if they're 60 years or older they're within a five-year period of retirement they should absolutely consider annuities as a part of their their retirement solution just like they have

maybe have some money in a 401k, they may consider converting their 401k to a Roth IRA, for example. That's another great solution. They may be looking at CDs, especially now because of the way the interest rates are set up. They may still consider some municipal bonds, although Treasury outflows just look at this are at a record high, actually very recently, Mike. And then annuities, these multi-year guaranteed annuities and fixed index annuities can be a fantastic solution in addition to the kind of the rest of the portfolio mix for folks. And we work with the folks that are pre-retirees, certainly people that are retirees and they do not want to see, you know, 10% or 20% of their overall portfolio evaporate overnight. We work with them. And then even folks who

were young, like athletes, for example, Alan Iverson famously utilized annuities and is still receiving payments from annuities about 10 years after he stopped playing basketball because someone was smart enough to set that money aside in this, you know, kind of in this fixed opportunity for him where he gets income payments for life. And so there are actually a lot of different applications for annuities. And the clientele can range a tremendous amount. Yeah. And again, And it all depends on your need, your runway to retirement, all of that. And so let's wrap up, Ben, with kind of a bookend question, which is, if all of this sounds good and it fits your retirement need, how do you purchase annuities? And then what happens when they end at the very last part?

I mean, do they just go on forever? Or is there like an expiration? What is kind of like the, how do you get them? And then what do you do when the benefit is run out if that ever is the case? Those are great questions, Mike. So when you want to, when you're thinking about purchasing annuities, we always recommend that you speak with an independent broker, okay, an independent life insurance broker that has access to hundreds of different annuities like we do it ready to retire. We always recommend that folks, you look at A rated companies. We typically don't even look at A minus rated companies.

Mike, especially because of, you know, all the, all the economic calamities calamities that are potentially on the horizon. So we look at A-rated companies. We ask folks to send over their, their latest tax returns. We can take a look at potential tax consequences if they're, if we're working with, you know, kind of non-qualified money, if we're working with qualified money, like 401Ks and TSPs and so forth, there are no tax consequences typically for that. We, we, we take a look at annuities that that are going to provide some liquidity, okay, so that you can withdraw at least 10% of your money per year if you need access to it during that three or five or seven year period. And then we also take a look at annuities that do not have any fees. And so as I said,

we really recommend that folks contact folks like our firm that has that expertise, they have knowledge around which annuities to take a look at and have access to. dozens of annuities and really hundreds of annuity companies, Mike. I think that makes such a perfect sense because it's not for everyone, but if it is for you, let's get with someone who can give you the best advice and the most flexible advice, not be roped into we can only offer this one and this one. So someone that's an independent that has your best interest in mind.

I think that is so powerful, Ben, And you've been really helpful in helping us explain these intricacies of annuities. If someone is interested in learning more and reaching out and connecting with you, what's the best way that they can do that? Absolutely. And I did want to touch you on what happens, you know, once annuities do end so you can roll those funds over, you know, back to back to another IRA, which we help a lot of clients out with. You can annuitize the contract and annuitize that $100,000 plus the interest, turn it into that income stream. You can renew the contract with that company for another year, typically. There are lots of different options that we help our clients with. So if folks want to want to reach out to us, they can certainly go to our website at ready to retire.net.

That's ready, the number to retire.net. And they can schedule a complimentary consultation with us. Or they can email me at Benjamin at ready to retire.net. And those are probably the easiest ways Mike to get to get in contact with us. Perfect. Well, Ben, thank you so much for coming back on. It's been a real pleasure talking with you today. Thank you.

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