Business Innovators Radio - Interview with Ron Cook Owner of Cook Tax & Retirement Discussing Market Loss Protection

Episode Date: September 12, 2023

Ron began his career in the insurance and financial industry in 1988 and has included banking, mortgage origination, and retirement income planning.Throughout his career, he has learned that if you help people address their concerns, you will have a gratifying business. Steering people toward a more stable and predictable retirement is his mission, as he continuously strives to provide better strategies to procure the greatest amount of income for his clients while preserving the integrity of accumulated assets.Ron’s true passion is spending time with his wife and four children. He also enjoys golf and boating.Learn More:https://cooktaxandretirement.com/Licensed Insurance Professional Respond and learn how insurance and annuities can positively impact your retirement. This material has been provided by a licensed insurance professional for informational and educational purposes only and is not endorsed or affiliated with the Social Security Administration or any government agency. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 20578 – 2020/11/12Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/ron-cook-jr-owner-of-rc-wealth-advisors-interviewed-on-the-influential-entrepreneurs-podcast-discussing-a-simple-retirement-strategy

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 Ron Cook, who's the owner of Cook tax and retirement, and we'll be talking about market loss protection. Ron, welcome back to the program. Hello, Mike, hey, and thanks for having me back. I appreciate it.

You're welcome. And, you know, I think that when we talked before it was about having guaranteed income, which gives people that peace of mind, well, one of the things that is probably one of the biggest fears with people in investing is market losses. So I want to talk about how you advise your clients and guide your clients to protect them from those market losses. So what are market losses? first of all, let's define it so that we have something that we're talking about. Well, market losses, when you have monies tucked away, whether it's in a bank, insurance, credit, union, or the market or anywhere, and you lose money. It could be in real estate.

It could be a car. But when you lose money, you don't like it. Yeah. And especially when it impacts you and you know, most people don't, you know, when they do have those market losses, sometimes they don't have purpose to their money. So, and I'll explain purpose later. But, yeah, I mean, I just seen a lot of people that come in and visit with us. That's one of their biggest fears is that they have market losses and they go, oh, boy, I don't like that. And, you know, it happened back in 2001, two and three.

And it happened 2008. And again, during the COVID period, look what happened. Well, you know, it's like the helpless feeling of, you know, if I made this certain mistake and I didn't like the result of it, I'm going to not make that mistake again. but with market losses, you have no control. Now, you can move your money into different kind of, you know, sectors, and that's what you should do. But what I would suspect is because of risk and volatility, there should be some real special ways that you are putting your money in safe places, like what we talked about before for guaranteed income. But talk a little bit about how those market dips, when they happen, it kind of puts you behind the eight ball.

and you feel like, well, to get right back to ground zero, we've got to take even more risk to get it back up there. But then it becomes that, you know, that vicious cycle, right? Oh, you're right, Mike. I mean, you know, I've seen so many people again, they visited us at the office or just phone calls or people chatting with us. Obviously, nobody likes market loss. But one of the things, too, that when you do retirement income planning like we do here at Cook Tax End Retirement, what happens is we look at those things because it could impact your life. In other words, we talked in our other segments about, you know, Social Security guaranteed pensions and all that.

You're guaranteed income. But now, imagine somebody has a portion of their money in the market, right? And then all of a sudden, there's a dip like we just saw. Now, imagine if there's a dip. And then all of a sudden, guess what else happens? You have to withdraw some of that money to live on. Well, just maybe there's an incident. Your car breaks down or your heating system at your house and you need that money.

And now there's a market loss. how do you make that back up? Well, see, the biggest thing is when we were going through the accumulation stage from, you know, 20, 30, 40, 50, and then 60, nobody ever taught us that maybe we should be doing something a little different at 60. Now, some people, yeah, maybe less in risk, but how many people do that? We all get caught up in the roller coaster ride. That's real. Yeah, so even if it's one time, you know, we made whatever percent. And then all of a sudden the next time we got beat the death, well, we still remember that one time and say the glory days.

we'd like that to come back. But think about this for a minute. If somebody was actually pulling money, you know, from your account, too, like even when somebody gets older and they have like some things that we'll talk about in another segment, hopefully, but required minimum distributions, imagine having to actually have to pull money from that, you know, account. Now there, and then all of a sudden, now you have to pull a required minimum distribution. And that's like, how do you make that up?

Now, when you're going through the accumulation years, those 20, 30, 40, 50, 60, you don't really notice it as much. You know why? Because in those 401K plans, 403Bs, IRAs, we're putting money. We're contributing money into those IRA accounts. And that's where most of, you know, the majority of people's money are. You know, they're in some kind of qualified account. Well, it kind of all kind of goes back to how much runway you have ahead of retirement. You know, if you're talking to someone in their 20s, 30s, 40s, hey,

Let's let market losses happen because we'll just wait it out and it'll come back because it always does. But if you're in your 50s or 60s or beyond, you don't have that time. We don't have time on our side, no. So talk about some strategies that you use to make sure that these market losses, which could really happen, are minimized. And then you kind of put that mode of protection around someone's retirement funds. Well, as we talked about earlier, sometimes having things proportionalized, like having the right amount of money. in the market, the right amount of maybe money and guaranteed income. So imagine if you had Social Security coming in and some kind of your own private pension or kind of private annuity

payments coming through the door. And now you didn't even have to worry about that other segment of money where it could breathe a little bit. If you were a little bit riskier on a small amount of money or a smaller amount of money, it's not going to have the same impact as somebody have in maybe $3, 4, 5, 6, $700,000 or a million dollars in the account where if somebody lost a certain percent, say 10%, the larger the number that's in there, the big of the loss. Now, imagine also, too, there are some products out there like banks that are safe, insurance companies, but, you know, the banks aren't really the best place to put money. Until recently, I guess some people are excited because the interest rates are ticking

up, but they're also fixed annuities. There's guaranteed multi-year annuities that grow tax-deferred where you don't get taxed on them. The other thing, there are a fixed indexed annuities that if they follow a stock market index, they mirror it. They're not in the market. But if it goes up, if the cash on that moment. Yeah. And you know, one thing I was thinking about, too, that I think back in the old days, people would say, oh, put your money in the bank.

Banks are safe. give you a CD or whatever. Well, just read the news. Banks can fail. Oh, yeah. Yep. And then that's the problem. And then somebody's always hunting around again for a market law.

And the other thing is, too, when a lot of the banks, a lot of people go in there to cut their teeth or to get a job in the financial world to start their career. But then you go back in and that same person's not there. Yeah. Yeah. You know, I was talking to someone just the other day who was an advisor and he was. He said one of his clients went into the bank and was told some crazy, you know, whatever it was. I don't even remember. But it's like the advisor went into the banker and said, why in the world would you say this?

Because it causes X, Y, Z, whatever the case was. And they're like, oh, I didn't know that. And that's exactly the point you're making because these bankers typically are fresh out of college. They don't have the experience. Whereas someone like yourself, you're looking at all of these opportunities. And like you said, with annuities, that's an insurance product. It's fixed income annuity. We like to hear fixed.

That's wonderful. And in fact, some of these products, like I think annuities, if I'm thinking correctly, they've got some of these extra little writers you can put on that even provide long-term care type coverage, right? So it's even better than just fixed rates of return. Well, Mike, when you have a cut in income because of a market, like when we went back to our original conversation in here, and you have a market dip and all of a sudden you've got to pull out money. and there's a loss in your account, that's a problem. I mean, people get upset about that.

But honestly, with clients that we deal, we have no reaction from people because their money is it like it's into a nice pot where that pot's locked in. It's good. And they're getting a guaranteed income. So that money's locked in. It's mailbox. So they could spend all that money this month. And next month, in the mailbox, there's going to be what, another check.

They could spend it all again and do it. it again. And that's a piece of mind where a lot of other play, you know, if you're playing that interest game with a bank insurance company credit union or possibly investment firms to without having the right adequate implementation strategy, then honestly, then, you know, that could be a problem for you. Yep. Yeah, 100%. And so you'd mentioned previously you want to talk about the purpose for money. How does that factor in to the advice you give your clients? Well, the thing is, like, people do have money. So in other words, they have Social Security coming in.

And now all of a sudden, they have their expenses. Can they lower their expenses? But most people, if they do try to do that, they basically, you know, quit. It's like a diet in the beginning of the year. When people start up in January, you know, we get on this kick of saying, I'm going to lose 30 pounds, right? And the next thing, you know, they're eating pizza and ice cream the next week. But having purpose to your money is,

an awesome thing. So knowing, like, people come in with different products and all financial products are good, but what purpose does it serve you? If somebody could come in and say, oh, I have this annuity, I have this investment, I have this type of money in the bank, well, what's it for? Well, if they could say, this is my emergency funds. Okay, great. Well, is that comfortable for you having that amount of money in emergency funds? Yeah, why? And why did you determine that amount? And so that's a good thing to know, because sometimes, you know, you want to have enough to cover your bills. Look, we went through COVID. some people like on radio and TV, right, they'll talk, oh, you've got to have like two or three months.

Well, this thing went more than three months. It went six months a year and a year and a half. Like, how much money do you need to have saved? So, you know, sometimes I feel comfortable with like a year's type of, year type of expenses in just an emergency account with some people would rather grab all that money and get the comp on it. Now, the second thing is, you know, so having emergency funds set up is important. having the good guaranteed income is important knowing how much money is coming in from a pension, Social Security, or possibly your own private pension or annuity type thing payments. And then all of a sudden, so that has purpose. Other people have, I've had people come in. I said, what's that for?

Why did you buy the annuity? I don't know. And it's like, well, I just didn't want to lose money. I said, well, do you know what annuity's for? And it's like, I said, well, first of all, if you get the right kind, if you don't get a variable annuity, but you get a fixed indexed or a fixed annuity, those do not lose money. The other ones have high fees and all that type of thing. Because people get fee sensitive at that point, and they don't want to lose money.

But so if you have purpose to your money, so they'd understand what those products are for. And so if you have the right one, that's great. I'll tell you that's the right one. And that's going to provide this kind of income for you. That's going to provide that kind of income for you. This is your emergency fund. so you don't have to touch maybe a long-term type investments or things that you're trying to let ride the hedge inflation, well, then, hey, now you can maybe have some market loss protection or maybe even a cost recovery strategy, Mike,

where if somebody does pass away that people can fill in the gap, you know, that income gap, or if one of the Social Securities go away, where's that other money going to come from? So that's why it's important to know, to have, you know, some market loss protection and to know how much exposure. you have and to have purpose to that money. I love it. Can you think of a client where example where maybe they were trying to do some things on their own because, you know, Google is our friend, but Google is our worst enemy when it comes to giving wonderful retirement planning advice.

But can you think of a client that might have tried to make some moves on their own and then all of a sudden just got tired of getting socked in the jaw when the market's dipped and then comes to you and goes, once and for all, I'm just done with it. help and you put them into this type of thing. And then the relief just happened because being able to weather those market losses now is gone. Well, I'll give you two examples. One was on the market protection loss. But what happened was this guy worked for a firm for a long time and they did the medical

company and they did have a pension. And all of a sudden he goes into the company and all of a sudden he says, oh, I'm retiring. And he had a million dollars, seven figures in his account. And so they were going to pay him $67,000 a year for the rest of his life. So all of a sudden, he went to one of the educational events again and said, hey, I just did this the other day two days ago. And I just turned all my money, seven figures and a million dollars into annuity payments through my company, a pension. And I go, do you know the rules or which one did you pick?

He goes, yeah, here's the paperwork right here. Well, he took a single life payout. Now, he's married and has kids. Relatively young guy in his early 60s, right? And all of a sudden, this gentleman, I said, well, tomorrow, let's call into the company and ask him about these rules. I didn't even give him what I knew about it. But I said, let's call into the vendor.

And so they said, when I called up and I said, hey, by the way, this gentleman's going to start his payments to start his pension. And I said, he's taken a single life payout. it says here on the paperwork. Now, if he passes away or leaves my office here in a few minutes and gets killed in a car accident on the highway going home, how much does his wife get? They go zero. And his jaw dropped. He goes, my wife doesn't get any pot. And he said, no. So we actually did some other numbers and did some quotes from different companies and showed him that he could get just a little less payment, maybe $63,000 or $64,000 a year in payments.

and be volatile in the market, have a fixed index annuity with his own private company. And guess what? He ended up getting like $63 grand a year. Now, if he dies, his wife is still going to get the same $63,000 a year. And guess what else happens? If his wife passes away, the kids get the money, it doesn't revert back to the company. So that company didn't take care of the beneficiary side of the equation? He didn't know.

Wow. So you were able to unravel that and then get him back in a better situation. Yeah, because once it happens, it becomes irrevocable and he could not change it. So good thing. He did talk about timing within a really short period of time. What is that time frame? So if it had been 30 days or 60 or 90, what is that time frame? Every company is different.

But mostly like sometimes 15 to 30 days. But he came to you two days later and you probably made that move on the third or fourth or fifth day. So that was fortunate for him. but that's a lesson that you don't just sit there and listen to the old company going, here you go. They dangled $67,000 in front of his eyes and he thought that was great. He didn't know to ask about beneficiaries. That's a powerful story.

Yeah, no clue. Yeah. And, you know, that's the thing that really gives you a hot of compassion towards things when you can help people like that. And you know you protected them. You protected the spouse. You protected the family. That's amazing. Now, I mean, the same thing, too, just in general.

I mean, that's powerful right there. I mean, that's a drop-the-mic situation for me, too. And, you know, honestly, I mean, I've seen tons of people come through the door, even back, because back in 2001, two, and three, people, they lost a lot of money. They lost like 30 and 40 percent in some of their portfolios. Now, again, you know, again, some of these people, as they get older, they have situations that come up. And then all of a sudden, the market ticks down and they had lost. And they didn't know that they had these other types of, like you said, where can I go? I can go to the bank insurance company credit union.

So they had indexed annuities. And then they came up with fixed indexed annuities, which was kind of cool because they had a fixed bucket. And also it had an indexing portion where it could actually, so you could actually divvy it up and have different things, different allocations they call. So now all of a sudden, imagine going through that time. And then all of a sudden people going, oh, no problem. Things are going to be so good and it's going to be great. Well, then in 2008, what happened in nine, the market dropped out and people lost 45, 50, 60 percent of their portfolios. Imagine, you know, this is tough.

I mean, well, this is somebody's life. I mean, imagine being 63 or 67 years old. And then all of a sudden, you've got to put off your retirement because you've lost 100 grand, 60 grand in your account that you had in there when you wouldn't do that if you had a fixed index annuity or a fixed annuity. That's amazing. And I'm not saying put all your money into those types of things, but the right allocation or the right amounts, if that makes sense for that person. Again, who knows even if it makes sense. So, you know, everybody's different. I was literally thinking those words.

Everybody's different. You cannot hear one case study example and go cookie cutter, give me that. You need to figure out what is best for them. But these examples you're giving of people that just didn't know what they didn't know, beneficiaries or, fixed indexed annuities and the comfort that that provides, I think that is just really powerful for people to understand. And, you know, again, if you're tired of dealing with market loss and you want a little protection, come and talk to Ron and see what the situation would look like for you.

And if it makes sense and resonates with you, wonderful. So, Ron, what's the best way that someone can learn more and then reach out and connect with you? Well, Mike, they can actually reach out in the best place everybody's on their phone. or on their computer, but reach out to www.com. CookTax and A&D Retirement.com. And you can hit us up, look at the site, check us out, and definitely give us a call. Excellent. Well, Ron, thank you so much for coming back on today.

It was a real pleasure talking with you. Thanks, Mike. Chat with you soon. 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.