Business Innovators Radio - Interview with Brian Sirota Founder of BES Financial Discussing Income Planning

Episode Date: December 13, 2024

Brian is a Financial Representative with extensive knowledge and understanding of Financial Products to assist clients in planning for their retirement needs.Learn More: https://besfinancial.com/Securities and investment advisory services offered through Osaic Wealth, Inc., member FINRA/SIPC and a registered investment advisor. Insurance products may be offered through Brian E. Sirota, also Known as BES Financial which is not affiliated with Osaic Wealth.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-brian-sirota-founder-of-bes-financial-discussing-income-planning

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 Brian Cerroda, who's the founder of BES Financial, and we'll be talking about income planning for retirement. Brian, welcome back to the program. Thank you. Great being here. You know, I think it's really interesting that the phrase income planning gives the connotation that you need to have a plan. And I think too many times people just kind of, that things

will just all fall into place. And that is not the case with retirement. There are specific things that you should be putting into place well ahead of retirement. So I'm excited to talk with you about how you are guiding your clients to address income planning. What is the first place that you start bringing that topic up with your clients so that they understand what even income planning is? Usually it takes place in the very first meeting. We talk about what their expenditures are that are in place now and what expenditures they might experience or anticipate to experience through their retirement because a lot of people have a unrealistic expectation that they can support themselves through retirement based on their current drawdown rate.

And lifestyles sometimes need to change for the worst, sometimes for the better, depending on what the assets were that were accumulated in their pre-retirement years. You know, that's a really good point. And you mentioned unrealistic expectations. I would suspect that if you asked someone, hey, what do you think you're going to need on a monthly basis in retirement? What's that number? And whatever they write down, I'll bet you that if you started walking them through, well, have you considered this? And what about that? that number could change because they really don't have a good perspective. And something that I would surmise is that people now have more time on the hands if they're not working nine to five. So they have more time to spend money. They have more time to travel. They have more time to do hobbies or work with the charity. So what do you do to help people really clarify what their monthly expenditures will be so that you can then start the income planning?

So in that first meeting, I typically give them a worksheet outlining what expenditures they might actually experience on a monthly basis. And a lot of them that they don't even really consider as a factor. So once I bulletpoint all those expenditures, I give them their homework. They go home, they fill that out. And then we have a second meeting and we review their expenses. Then we go through it one more time because realistically, they've missed something. and then three months down the road, I will actually have them monitor their expenditures and see what was missing from the puzzle.

Yeah. Oh, that's good. That's like stress testing it. Okay, here's what you said. Now let's go back for a month or two and really track some things to let's just make sure that our expectations and planning are accurate. That's a really good point. Yeah, and I have opened a lot of eyes through those meetings.

Yeah, for sure. And I'm sure that most of your clients, when you do that exercise, they discover a gap. So here's what I'm going to need in retirement. It looks like you're going to have. And there's a gap. We've got to figure out how to close that gap. And maybe there's sometimes that you run those scenarios. And they're like, hey, you need this.

You're going to have plenty. In fact, we got a little buffer and cushion. But for the people that have a gap there and need to close that gap, that's when that income planning comes into play. So what are you find are the. most effective strategies for making sure that people have that, you know, sufficient income to get through retirement? So in looking at the client's holdings in regards to what they were expecting to drawdown, for example, this past year has been a great year in the market and people might have experienced 15, 20, 25 percent or more returns, they're thinking, well, it's okay to go in

and take 15 percent of that. But studies have proven that that's wrong. and that could be catastrophic for the end result through retirement that you might actually run out of money if you're betting that that's going to continue to perform in that fashion. So what we do is we look at guidelines that are provided to the financial advisor as far as what is a realistic expectation to draw down those funds. And if there is a hole or a gap in that income planning, then we look at how we can fill that gap. And that gap might be filled with real estate to generate additional income. It might be utilizing annuities to provide that additional income, looking in the fixed income

market for safety. So there's different ways to look at the income planning aspect of it through retirement. The most important component of it is to make sure that either at a high percentage degree of probability that that is going to last and how comfortable the client is with that probability. Yeah. And as with anything, there's no guarantees. We can't, you know, guarantee that this plan and these calculations and estimates are going to work out exactly right, because no one knows. But you mentioned a word that I, that jumped out of me through to get through retirement. And I feel like a lot of people just focus on getting to retirement. Like I want to

retire at X age and I just want to be able to retire. But then how long are you going to live? You know, And I feel like, and my question is, how do you advise your clients on longevity and lifespan? Because I feel like a lot of people, most of the Americans these days are taking better care of themselves. We have better health care. We're staying healthier. We're taking vitamins and supplements. And maybe we're living longer.

So because longevity is a factor, now your money needs to last longer to get through retirement, right? Absolutely. And that's why we take a look at various investment vehicles that might be able to accomplish that goal. without or limiting the amount of risk that's associated with it. And we also have to focus on looking at life expectancy tables have moved significantly higher over the last decade. And so people are living longer. We need to make sure that that money lasts for a longer period of time.

And then we also have clients that are interested in transfer of wealth. So we want to make sure that not only do they have the income, but they're able to provide for their children or grandchildren or whoever, possibly a charity, whomever they're looking to have that transfer of wealth too. Yeah. You think about expenses like we've been talking about, let's figure out that gap.

If there is one, your longevity plays into that. Like you just mentioned, healthcare costs can play into that because as you get older, maybe you're going to need more health care, maybe incidences or surgeries or medications, things like that,

maybe some external things like inflation might rear its ugly head. So how do you help your clients recognize those things and then mitigate those risks. So recognizing them is just showing them what's actually occurred over time and showing, for example, a dozen eggs. What did it cost back 40 years ago versus what a dozen eggs cost today? And just in the last year or two, the difference of what a dozen eggs have cost. And making individuals realize that, and quite frankly, I have a lot of people that are calling me saying, hey, my income needs have gone up higher than I anticipated, and I'm going to need a little bit more income from my portfolio.

So these are things that we put stipulations into the plan so that if a situation arises that requires additional income, we have a solution for that as a backup, right? But otherwise, we're going to continue with the plan as it is and allow the individual to sail through retirement as smoothly as possible. Yeah. Yeah, that's a good point. You know, because again, we don't know if inflation is going to increase or decrease. If it does, then we need to make certain moves.

If it doesn't, we might make other moves. And the same thing with taxes. You know, our tax is going to go up or down. We don't know that. We can make some plans based on some conjecture. But I think the word that we use there, mitigate, you can never eliminate risk. You can ever eliminate taxes, but you can mitigate or lessen them or be well prepared. I think that goes right to what we've been saying in our conversations, which is know what you need,

know where you're at, get with someone that can walk you through the process, guide you through the process, educate you on what you should be considering, and make the best decision based on what you know. The worst thing in the world is to look backwards and go, oh, man, look what happened three months ago. I should have made a different decision. No, because at that moment of time, we made a certain. decision based on what we knew right then. Now things changed. Now we're going to address a little bit. Absolutely. So talk a little bit about different investment vehicles. You mentioned real estate or

stocks, bonds and annuities. What role does asset allocation play in how you're offering guidance and, you know, maybe some things for your clients to consider? So every individual or couple has different risk tolerance. Even within the couple themselves, one may be very aggressive and one may be very conservative. So in balancing those situations and looking at the existing portfolio, we evaluate how much income we would be able to derive from that portfolio. And if we're not able to derive enough, then we look at alternative means. Might be real estate or real estate investment trust, for example, that have high yield,

but also a certain degree of risk. and then we can also look at items like annuities, index annuities, that have income riders to provide that income throughout retirement. And even if the asset is totally depleted, that's all under the insurance carriers guidance and riders that are available through those products. There are other investments out there that can accommodate that. It's just the degree of risk that the client is willing to take. Yeah. And there's some people that might say, I don't want to be in the market at all whatsoever. I'm tired of volatility.

I want it all in protected safe kind of accounts. Fine. There might be some people that say, you know what, let's leave 20% of my retirement portfolio in the market. Just make sure it's safe, but do the best we can. So everyone's different. I know you fully believe in the benefit of regular reviews, whether it's every six months or every year.

What are some of the things that you're seeing when you sit down with a client for their review, what are some of those indicators that you're seeing that might trigger a conversation to make an adjustment? So most recently, I've had a few clients that told me, you know, based on cost of insurance for their homes, has escalated tremendously, especially down here in Florida, or homeowners association fees that have increased doubled, which they'd never even imagine that type of situation. So we have to create and reevaluate what the plan looks like going forward, as well as taking into consideration that those increased costs may continue to increase at a substantial

rate. So all of that requires foresight and realistic expectations of how long your money has to last with the spend down and realistic views of inflation, the costs that will be incurred through retirement. The other costs could be health care costs, could be long-term care costs, could be just upkeep maintenance costs. You need a new roof, things like that. All of those can have a shift. You need a new car.

New car, a couple of years ago, the average car was about $30,000. And now the average car is about $55,000. That's a big shift in planning and how often do you need that new car? So depending on the individual, depending on their needs, that's why there's so much specific. You have to take a look at each individual set of circumstances for each couple or individual that you're looking at. You know, in that list that you were mentioning there, it crossed my mind that some of those things you can go, oh, okay, this happened. So let's make this adjustment. but sometimes you have no control over what happens or how you can adjust.

Like inflation, if your money doesn't go as far as it used to because of inflation, there's not much you can do to adjust that. Like if your homeowner's insurance went up, you could shop around and find a lower cost carrier and see if you can save money. But some things like taxes and inflation, you can't control. So we know, it's like, don't sweat the small stuff or don't worry about the things you can't control, but focus on the things you can and make those adjustments if and when they show up. I think that's a really huge piece to keep in mind as well. Yeah. And that's why we typically

have, you know, an emergency bucket for those circumstances that can arise at a moment's notice. Well, I tell you, Brian, it's been really educational hearing about your thoughts on income planning. And there's, as we've said before, there's never one plan that's right for every single person. So sit down and look at the whole picture. And it's like dominoes. If one thing topples over, it can affect a lot of things. So make sure if one area of your retirement is being worked on, it doesn't negatively affect another area. So look at it as a whole. If someone was interested in learning more about what you offer and maybe getting that holistic approach to their income planning, what's the best way that they can learn more and then also reach out and connect with you? Well, one of the

ways they can learn more, they can go to my website, which is besfinancial.com. And they can get a little idea of who I am, but a little bit about my company. And in addition to that, they can reach out to me via my office line, which is 954-366-1649. And we'd be more than happy to talk with them. Excellent. Brian, thank you so much for coming back on. It's been a real pleasure talking with you. Thank you. Thank you for having me. The views expressed are not necessarily the opinion of the interview guest and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past

performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities and investment advisory services offered through Osayek Wealth, Inc., member of FINRA and SIPC. Osaic wealth is separately owned in other entities and or marketing names, products or services referenced here are independent of osaic wealth. 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.com.