Business Innovators Radio - Interview with Rick Sechler, CFP Founder of USA Retirement Solutions

Episode Date: June 1, 2023

Rick Sechler is a Certified Financial Planner who truly appreciates the opportunity to serve clients planning for and enjoying their retirement.Based on over 30 years of experience and the ability to listen for the nuances that make every situation different, he believes in a collaborative process that results in solutions developed by gathering information that integrates personal and financial circumstances and goals. Communication is the most important ingredient to developing a plan that is right for you.Learn More: https://usaretirementsolutions.info/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-rick-sechler-cfp-founder-of-usa-retirement-solutions

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 with us Rick Seckler, who's a founder of USA Retirement Solutions. Rick, welcome to the program. Thank you. Appreciate the opportunity.

You are welcome. I'm looking forward to learning from you because I always love when I hear certain words, it makes me think of a solution. Boy, I want to hear about retirement solutions because that presupposes that there are problems to solve. So as we know, that's a broad topic. So we want to dive into that. But before we get into it, tell us a little bit about your story and how you got into financial services.

Thanks, Mike. Just highlights. I graduated a thousand years ago from the Arizona State University College of Business, actually with highest honors, which surprised me. And then I served as an officer in the U.S. Army. I had two company commands in a row and decided that after that experience, what I needed to do is go home and try to catch up with the boys that I graduated from college with and get into business. I was recruited from active duty by the New York Life Insurance Company, and it didn't take me long

to figure out that going out and talking to folks about New York Life is the best at this, and New York Life is the best at that, and by the way, it's the best at something else, wasn't exactly the way to do it. So I became independent, and I earned my certified financial planner designation back in 1993. And now as president of USA Retirement Solutions, I've advised clients, about preparing for and enjoying their retirement for quite a while. You know, that is such a someday aisle kind of a concept.

Like, you know, oh, someday I'll get to that and plan for retirement. And it seems like it creeps up on you and people are like, ooh, that's coming up in a minute or two. So when you're talking with people about retirement, I know you like to focus on peace of mind planning.

Tell us a little bit about that concept. Well, the idea is, and Prudential actually did a great job of highlighting this a few years back, they had a series of ads called the retirement red zone. What that means, it's a football analogy, when you get closer to the goal of actually retiring, you want to make sure that things go well. And that's exactly the wrong time to lose any part of your retirement nest egg. So I, twofold planning. I make sure that they

have the very best health care coverage available, whether that means keeping their employer, former employer coverage, or transitioning to Medicare and the many choices that they have. And they make sure that they're in control of their retirement funds. I emphasize wealth preservation and distributions that minimize their risk and guarantee that they will never run out of money, hence the peace of mind. You know, it's almost like when you set your annual goals at the beginning of the year and you kind of lay everything out, you kind of begin with the ended mind and set some goals. And then you kind of look at it and go, you know, if I break these goals down into weekly, monthly, quarterly, I can achieve that. And it kind of makes you read that sigh of relief. And it's like, okay, I can do that. So it's kind of the analogy that if I feel like your peace of mind planning brings because retirement is so broad and so critical, but when you have the right things place and then you break it down into what you need to be doing step by step, it's not insurmountable each and every step, but they all build upon each other. That's exactly right. That's a good way

of putting it. So I know you also talk about and teach and advise your clients on the seven pillars of fixed income annuities. Tell us a little bit about what that is. Well, the seven pillars, and I'll just, again, I'll highlight them. And I think in some subsequent parts of this conversation. We'll get a little more into detail. The seven pillars are safety, returns without risk, no 1099s, a variety of crediting, which means earnings options, flexibility, income that can't be outlived, and when all is said and done, they avoid probate. If you've ever had, if you ever talk to anybody that's helped to settle their parents or their grandparents' estates, you'll know how brutally complicated and emotionally difficult that can be.

And avoiding that at all costs is extremely important to a lot of folks. And without getting into legal consultation here, but avoiding probate can also avoid a lot of cost because it can be time consuming it can cost a lot. So if there's a solution that can help avoid probate, that's a huge win. That's exactly right. So let's talk a little bit about some of those, you know, you mentioned the list there, safety, no risk, you know, some of those things that jump out. Those are huge advantages. And you know, each one of those things are advantages or else we're not going to list them as, you know, seven pillars. But talk a little bit about those advantages versus other options that many advisors might be advising a client to consider?

Well, if we talk about the advantages of fixed income annuities, we have to break it down into two parts. The first part is non-qualified money, which means money that isn't in your IRA or your 401K or your 403B. And then the second part that we'll get to, if time allows is we'll get to qualified money. But non-qualified money grows, tax deferred. You get interest credits on the money.

You get interest credits on the earnings. And you get interest credits on the money that you would have paid in taxes. So it actually is triple compounding. During the distribution phase, the income can be started, stopped, increased, decreased. All of that's controlled by the. the owner. Funds that are not distributed pass directly to the name beneficiaries, which gets back to the avoid probate. The other really distinct advantage of a fixed income annuity in this case is the legacy benefits and also the way that they can be used to coordinate with your health care

coverages. There's a crisis just around the corner in this country about long-term care and the lack of long-term care planning. And there's an excellent strategy, a solution to this problem by the use of the right fixed income, fixed indexed annuity. You know, you mentioned some of the legacy things. It makes me think about, you know, transferring to your errors and that ties into them the probate concept. But some of those other things you mentioned, like how it can help with making sure that you're, you know, you're accessing the best health care now. Those are, those are living benefits. You know, that's not something that you, you know, take advantage of once you pass and now your errors

aren't taxed this way or that way. But talk a little bit about some of those living benefits as it relates to health care, whether it's long term or health care. Well, let's look specifically first at the chronic impairment or long-term care component. The old way of doing it was to sign up for a long-term care insurance policy, and you'd have a monthly and premium, kind of like your car insurance premium. And you'd start paying that monthly premium when you're in your 50s. You'd pay it all the way through your 50s, your 60s, your 70s. And 75% of the time, you'd never.

have to use those benefits. Now, did the insurance company say, hey, what a great American and send you your money back? No, they did not. They kept it. Well, a better way to do it is to reposition some funds, best to use non-qualified funds, reposition some funds so that they are 100% safe and that they can grow but never lose money. And when the time comes to use them to have someone come into your home to help take care of you, or if you go to an assisted living facility, the company will actually pay you double what your normal lifetime annuity payout would be. Now, let's say that you don't use that during the course of your life,

and we pray that you don't. Then that money acts like any other FIA and just allows for you to take distributions. It's an investment that's been growing on a 100% safe basis all that time. So that's pretty interesting because if I'm hearing you correctly, one of the pillars is safety and no risk and flexibility. Well, if you have like you were mentioning like any kind of insurance, long-term care car insurance, you know, and you never needed to use it, they don't send the money back. So it's sunk money.

Whereas with this instrument, it can never lose money. you know, so guaranteed rate of return, that's safety. And then if you need to use it for long-term care, then you're getting more than the dollar for dollars. So there's a benefit that way because it's double or whatever the extra is. That's huge. And then if you never needed to use it, your money still is sitting there and is growing and there's interest credits and all that. That's a multitude of benefits in that one financial instrument.

Well, it's exactly right. And it's you can giggle, Google, I'd giggle. You can Google fixed index annuities and see about how much misinformation is out there when you do Google about it, I'm sure. That's exactly where I was going with that. You can Google fixed index annuities, and you'll hear from the brokerage firms why they're such terrible ideas, and you'll hear from stock brokers why they're such terrible ideas, and you'll read from people who purport to be financial columnists. Never will you read a good word about that.

And there's a good reason for that. And it's an unfortunate truth. We're all aware that mass media has changed drastically. The explosion of media outlets has dramatically increased the pervasiveness of spin. Financial news is particularly susceptible to being spun. The crux of the problem is that the major financial firms are led by CEOs who, number one, responsibility and duty is to the shareholders, not to the customers. They have a legal obligation to maximize shareholder value.

So what happens? They speak optimistically about the markets and market-based financial products, and they speak, unfortunately, negatively about non-stock market-based types of investments. Because it doesn't benefit them as much as it benefits to the consumer. Exactly. Exactly. Wow. It's exactly right.

So then in the light of misinformation, are there any disadvantages, actual disadvantages of fixed income annuities? If they're used improperly, if they're bought from or sold by somebody who's a one drum band person, there can be problems. If they're owned by people who are well informed, people who have worked on. who have worked on a consultative basis with a fiduciary, and I happen, I am a fiduciary by dint of being a certified financial planner. I've been certified since 1993. Generally speaking, any potential disadvantages are avoided. What people will tell you is that there are high fees, when in fact,

if many, many, many FIAs are set up with absolutely zero fees, then they're critical. criticized in regards to liquidity, and here's the, here's just the facts about liquidity, anywhere you want to go, any place you want to read about how much can I safely take from my retirement nest egg and not lose out of money, the standard percentage is 4%. You can't take any more than 4% out of your money. Okay. Well, you can't take any percent out of a CD until the term is up. You can take up to 10% out of any good fixed-endixed annuity. You never want to take that much, but you can take that much, all right? They say that they're overcomplicated.

They're only overly complicated if people don't take the time to understand simple concepts. A, you cannot lose. B, you will gain. You can get a fixed interest rate and or you can index part of the money. to some really, really, really good indexed funds run by Morningstar, for example, run by Morgan Stanley, for example, run by UBS, outstanding opportunities for growth. So Ben Bernacki, past federal chairman of the Federal Reserve, his latest disclosure, his most recent disclosure before he retired from that position,

He owned between one and two million dollars worth of fixed indexed annuities for those very reasons. Yep. You know, if we were to list all of the advantages next to the disadvantages, obviously there's more advantages, but that certainly does not mean put 100% of your retirement nest egg into fixed income annuity. So what percent would you recommend of your retirement portfolio being in fixed income annuities? That is an excellent question. And the answers are as diverse as the individual investor. Yep, it all depends on your situation, I'm sure.

It absolutely depends on their risk tolerance. It depends on their time horizon. And a lot of it depends on who or what the money is really for. Year after year after year, Limer will tell you that well over 50% of annuities are never annuitized. In other words, they're never accessed for income. But a rule of thumb, basically, very simplistic, maybe overly simplistic, is subtract your age from 100. In other words, if you're 60, subtract 60 from 100, that leaves 40, about 40% of your portfolio you might consider putting in a fixed index to do it.

Why? Because it's the old 60-40 bond ratio, but now bonds, which are you. used to negatively correlate with the market are actually very positively correlated with the market, which is a bad thing. It means when stocks are going up, bond values, you're going up and vice versa. So it's a mess. Neat. Now, what about if you were, like what you just said there, I think the big red flag would

have gone up if you said, as much as you can dump into them, put them in there, because then people would feel like, oh, that's not a good thing. but your answer is spot on really carefully calculated and it depends on your situation. So you would sit down with a client and assess. But what if? And they're not for everybody. To be directly honest with you, some folks, I would tell, don't own one. You don't have enough other liquidity to own one.

It's a whole genre of considerations in this industry called suitability. You have to be able to demonstrate. that you have enough money for medical emergencies, that you have enough money to travel, that if you need new tires, you don't have to put them on a credit card. You need to have $20, $25, $30,000, up to $50,000 of money just sitting in the bank. Other than that, let's talk about your portfolio and risk tolerance and what's your objectives are. So that's a wise comment about having some pure liquid cash sitting in the bank in case you need some things. But what if someone's in a situation where they don't have that much liquid cash and they have a large fixed income annuity?

What if their financial situation changes? Can they access it or sell it or change it from fixed income to something else? How would some of those variables work? Selling them is really for once annuitization has began. Once the fixed income has started to be paid, then sometimes people factor them, just like, you would factor a loan. Generally speaking, it's not a good idea, though. You're going to get 60 to 80% of the value is all you're going to get on average.

If you haven't begun payments yet, then it's a no-brainer. You would simply surrender it. The most you're going to pay in a surrender charge is 10%. So instead of selling it for 60%, sell it to yourself for 90%. But generally speaking, if the plan, planning, if the foundation has been laid properly, there's not going to be a need to do that. And if you're planning the right way, then you've got all those contingencies. But if you did have to, you know, access that extra amount, then there could be some tax implications.

So what are some things to consider regarding taxes? If you're under 59.5, there are tax penalties for surrendering and non-qualified annuity. Once you're over age 59 and a half, there are no additional penalties. If it's qualified money, meaning retirement money, every single dime you ever take out of them is going to be taxed. Because it was not taxed on the front end going in. Right. The IRS has been the coyote over the rabbit hole all this time. I can't wait for you to have to pop your head up.

It's just how it works. I've never heard that example before. That's a good one. I'm going to have to remember that one, the coyote over the rabbit hole. That's awesome. Well, I think of the big thing,

so many takeaways here, Rick, it's been so great hearing your perspective, but they're not right for everybody. But if it's right for you, it sure can provide safety, no risk, a lot of flexibility.

And I think that's just a spectacular opportunity to look and see if it would be right for you in the right percentage of your, portfolio. So if someone who's interested in learning more, what's the best way they can learn more and connect with you? They're welcome to call me directly. My business number is 321-355-88-99. They're welcome to email me at R-T-S-C-F-P, my initials and my designation at gmail.com, or the website is www. www.

www. U.S. Retirement Solutions, all one word, dot info. Excellent. Well, Rick, thank you so much

for coming on today. It's been a real pleasure talking with you. Thank you very much. I appreciate it, Mike. You've been listening to influential entrepreneurs with Mike Saunders.

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