Business Innovators Radio - Interview with Ron Roberts Founder and CEO of Roberts Retirement Group Discussing Guaranteed Retirement Income Planning

Episode Date: November 22, 2024

Ron was born in Burbank California and grew up in the Mojave Desert. Being the first of six children born to deaf parents, he learned responsibility at an early age. His commitment to family and faith is unwavering. It’s the essence of who he is and the foundation of his business success. Living for a higher purpose and caring for others has always been Ron’s focus.After high school, he joined the United States Coast Guard where he learned about hard work, discipline, and duty. He enjoyed serving his country and helping to keep people safe. He grew in experience through training, education, and travel. He developed a love for the sea and enjoys boating and sailing with friends and family.After completing his time with the Coast Guard, Ron served on a mission for the deaf in Chicago for his church. While there, he formed the first deaf scout troop in Chicago for the Boy Scouts of America. Returning from Chicago, Ron attended college in Stockton, California where he met his wife, Julie. They were married in the spring of 1984. In 1991, Ron and Julie moved to Amador County where they enjoyed raising their four daughters in a close knit community. Ron’s hobbies include reading, boating, sports, and traveling with his family. Ron also volunteered at a private school where he taught history and American Sign Language. Family, faith, and community are the most important things that define Ron.Ron’s chosen vocation as a Retirement Planning Professional allows him to use his experience, his gifts, and his love for family to help people in a very special way. Ron has been in the retirement planning industry since 1990. Founded in 2002, Roberts Retirement has grown over the years to serve families in northern California and around the country.Ron has served as President of the California Estate Planning Counsel and continues to mentor other retirement planning professionals all across the United States. He is constantly educating himself on the most up-to-date investment strategies and changes in the financial industry. Ron is recognized as a leader in the industry, is a sought-after speaker, and has been featured in Senior Market Advisor MagazineLearn more: https://www.robertsretirement.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-ron-roberts-founder-and-ceo-of-roberts-retirement-group-discussing-guaranteed-retirement-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 us Ron Roberts, who's the founder and CEO of Roberts Retirement Group, and we'll be talking about guaranteed retirement income planning. Ron, welcome back to the program. Well, thank you, Mike. Glad to be here.

You know, sometimes you hear words or titles of books or websites and a certain word jumps out at you. And I think the word guaranteed is such a spectacular word. So I'm excited to hear about your strategies for guaranteed retirement income planning. So they're so important to make sure that we have the money needed for retirement. Why is it so important for having that guaranteed? bucket of income. Yes. Years ago, retirees had pensions, which provide that guaranteed income for life.

And then more and more companies have decided no longer provide pensions but replaced with 401Ks. And the 401K is basically invested in Wall Street. So you have mutual funds or exchange. traded funds in your portfolio, you've noticed that it would rise and fall based on the stock market or based on the economy or if we have recessions. You saw your accounts go up and down. And so when you retire, you can't afford any longer to watch your accounts go up and down

because of the market. And so because now this is going to be a source of income that you need. you need income that you can count on income that's guaranteed just like a pension that you know that you can pay your you know your expenses and your bills and have some money left over and having that reassurance that you can depend on this because if we didn't have this in place then you're in the winds of the market you're in the winds of the economy and a classic example happened when I was at at this happened back in 2009 i was at walmart and i was at the pet food section and there was a man stock in the shelves and found out he was 68 years old and uh so he and i were having

a conversation uh and he said ron i i worked for a fortune 500 company in a silicon valley and my employer did not offer me a pension he offered me a 401k and i was very diligent every payday I put money in my 401k. My employer would put their money into my 401k, and I would watch my 401k and watch it grow. And then one day I looked at my statement, I go, my goodness, I have a lot of money in my 401K. So he decided to talk to his wife.

They both decided it was time to retire. He said, we can start taking income now from my 401K and take it out and retired. He said, I retired in 2006. and everything was doing just fine until the recession 08. And what happened in 2008, I literally lost half of my account overnight. Talking about he being stressed, he was stressed. But he did a smart thing.

He stopped taking withdrawals out of his 401K because he needed the count to recover. And it will recover. it just takes a matter of time. And so what he did to replace his withdrawals or distributions of his 401K went back to work. And Walmart offered him a full-time job working 40 hours a week. So he took that job to replace what from his 401K. But the question is, how long did he have to wait for it to recover? It took six years.

So that means he didn't earn any interest in those six years. he just got back what he's lost. But what is sad about this story, he lost six years of his retirement. We can make up money, but we can never make up time. And so that's one of the reasons. I do what I do is to share this information with everyone

to help them prepare that you do need guaranteed income. So when times like a recession or a stock market crash, your account will not be affected by it. You can continue receiving income every month like clockwork and your lives go on. You can do all the things you enjoy in your retirement years. You don't have to go back to work. It takes that stress away. So that's how important it is to have guaranteed income.

You know, those are really, really great points. And as you were mentioning that, it reminded me of the flip side of guaranteed income, which is the protection of guaranteed no losses. So yes, you're talking about guaranteed income, but also you're mentioning that you're guaranteed when you have money in these types of strategies guaranteed not to take losses. And that's a huge, huge point because the story you mentioned, I'm sure can be told thousands and thousands of times over. and it's such a massive opportunity to reclaim that time.

But talk a little bit about that guarantee of no losses as well as the guaranteed income. So as people who have pensions, the companies that protect these pensions are called legal reserve companies. and what that means they have reserves in place to protect your retirement. And these legal reserve companies have been in business longer than 100 years. They're regulated. And so that means when I deposit my money into a legal reserve company, they protect my principal. So meaning that, no matter what the economy does or the market does, you know that your money is protected. And then every 12 months, so you'll have growth.

So every 12 months as you have growth, it's called a reset. This is another innovation that was discovered a few years ago. But every 12 months, they lock in your growth. So your account steps up every year. Now, the worst thing could happen is that the market is down, the indexes are down, your account will just get a zero return for those 12 months. months. But you have not lost your principal, you have not lost any principal. You have not lost any previous growth because they all been locked in in the annual reset. So it's a valuable asset in your

retirement planning. So that reset gives you the benefit of compounding on the upside. But then on the downside, if the bottom dropped out, you've got the floor and the knowledge to know that you're not going to lose any money. So that's just such a stress-free peace of mind aspect. And I'm sure that you've got clients that have said their friends have come over and waving their portfolio statement there frantically and said, how much did you lose? And your client was like nothing. Correct. That's exactly what happened. Yeah. Yes. You know, time is just, as we know, it's the most precious commodity. We can't buy more time. But let's talk a little bit about how. much time ahead of retirement, people should be making the plans to start moving into some of these

guaranteed retirement sources. Should it be two years before retirement? Twenty-two years? How does that work? Well, everybody said, I just had a meeting last night with a couple, and her money is with a certain company and a wonderful company, however, it's mutual funds. And she was saying, saying, you know, she's been so accustomed to work with this company last, what, 30 years and to make a change of moving it where it is to what we're proposing, it's going to take her time. So we have another appointment with her. But she says, give me a day or two, Ron. I have to work this out.

But I'm going to go with you because you make a lot of sense. But it was her comfort level at the moment. And so anyway, what we recommend is this is kind of a general answer, but we say if you're within five years of retirement, so we get help from the government. We get help from your 401K. It's called a, it's called a, I know what the word is. You have to forgive me. I just forgot the word. but you are able at 59 and a half,

you are able still working with your existing employer, you can do a rollover out of your existing 401K and put into a guaranteed type of income strategy. So because reason is what happened in 2008, what happened was people had plans to retire in 2008. However, because of their great losses, they had to postpone their retirement. And many had to postpone it for another six years until their account has recovered from the loss. So that's why they're recommending, if you're within five years, you should consider to do a role your existing 401K or IRA that is in mutual funds, that is in the market, and put it to something that's going to, your assets going to be protected.

So if those things do happen during those five years, you're going to be fine and you're able to retire. And you won't have to worry about the stresses or losing time because of losses. I think that most people when they hear the word rollover of their 401K, they think I left my job. I now can roll my 401k into something. I didn't realize that it could be rolled over even while you're still there. That's an interesting potential opportunity. but when you are now talking to people, whether they're rolling over the 401k while they're still at the job or after, what are the preferred type options for someone to look at to get some of this guaranteed retirement income?

So with this same program we're discussing is we can say, okay, your existing plan is you're in mutual funds, you're in the market, and you're within a few years of retail. retirement, and the stress is what's going to happen in the next two, three, four, five years? Are we going to go through another recession? Are we going to go through a market loss, which will deeply affect your existing plans? That means you may have to put off your retirement because you have losses. So, but however, if you transition your existing plan, which you're allowed to, and you can roll it over to what they call a traditional IRA account. It's a tax-free transfer, and then you're into an account that it's going to protect your money. It's going to protect

your income. And so when you're ready to retire, it'll be an easily phase out. You'll be phasing out of working, and now phasing into retirement. So your plans will be in place, no matter what the markets are doing, no matter what the economy is doing, you're going to be right there. And that just gives people that stress-free feeling that I have a plan in place that's going to address it, and I'm going to be able to retire when I do want to retire. Now, based on what the market tells me when I retire, what the economy tells me when I retire, I have a plan in place that doesn't affect those matters. Yes. You know, I know that annuities are often mentioned about, you know, with guaranteed income and sometimes people have misconceptions about them.

Can you walk us through some of the different types of annuities that are available now and and how people should be potentially considering them for a guaranteed strategy? Yes. The annuities have been going through a lot of updates and changes over the years. I remember when I first worked with annuities back in 1995. They're far different. back in 1995. One of the older annuities, they're called index annuities, and they were indexed.

Back then, they were indexed, say, S&P 500. And they would have what they call a cap. A cap could be 5%. It could be 6%. So the maximum you can earn in a given year, was 5 or 6% a year. And then when that 5 or 6% a year was added into your account, it was locked in, it was protected. Now, that would be fine, but the last few years we have this thing called inflation.

And inflation, we've had inflation increase during the COVID years. And that's the concern is the cost of living, cost of buying products and service. And so today, we have indexes that not only is matching inflation, but is exceeding inflation. And so we now have indexes that are paying double digits now. And you will need double digits returns to maintain your standard living, to maintain the inflation growth. So today, after the last few years, we now have indexes that are exceeding. inflation. So the old story about annuity is paying, you know, low, modest returns are being replaced by aggressive growing interest rates to mass inflation. Yeah. You know, that's a great point

because I feel that there's these external forces that people cannot control like inflation or taxes or how far our dollar stretches. But if you are facing that volatility and risk of money in the market or mutual fund like you've mentioned, now all of a sudden you've got a double edged sword, which is maybe you're getting less returns and that external force of inflation is hitting. So how are you recommending your clients balance that risk and security in maybe, you know, what's the balance? So should you have 60% of your portfolio,

in one type of funds and 40% in another? Or when we think about guaranteed accounts, should it be 100% guaranteed? What does that mix look like to you? So one of my opening questions in my interviews is asking the client how much of their retirement they want protected. If they say I want 100% of my retirement protected,

then we're going to direct them towards the annuity side. If they say to us that I'm okay of being in the market, I'm okay, but I would like a portion of my money protected, then we work with the client and say, okay, let's go ahead and we talk about what their comfort level is in risk. If their comfort level at risk is 20%, 30%, 40%, okay, you can keep your money in those mutual funds. however if you want the rest of protect it will direct them to guaranteed strategies. So it's a conversation I have with the client because some clients do like the market. If they like the market, we work with them. But what we found through experience because we do these annual reviews, one of the things they find out,

they see the performance of these indexes. double-digit returns. And they're going, Ron, I think I want to move some more money out of my mutual funds and move it towards protection. And so that's how vital that those annual reviews are is have a discussion looking at their existing portfolio that's still in the market and what their money that's in these protected assets. And then they decide, do I want to leave it as it is, or do I want to move?

some more money out of that's still at risk and move it to be protected. Yep. Great point. You know, we were mentioning economic changes like inflation, things like that, that we can't control. We don't know when it's going to happen, how much and all of that. And I was thinking of like CDs. If you put your money in a CD, you get a fixed rate of return.

But if inflation is up or down, that could affect how that CD performs once, you know, the next, you know, term is coming up. Talk a little bit about how economic changes and inflation impact. these guaranteed type accounts that we're talking about? Yeah, so the component of these fixed protected assets is the index crediting, because the index credit is vital. You will need an historic return that is at least double digits. So if the index is referring double digits consecutively year after year after year,

you're in an account that is going to stay with inflation. It will exceed inflation. If we're in a fixed interest rate that's only paying 2, 3, 4, 5, 6% a year, and you may feel good about that. But then again, you're going, wait a minute, my returns are not keeping up with inflation. I'm not able to buy that loaf of bread or that gallon of gasoline or the cost of living is just going up. So again, you have, that's why it's so vital to have those annual meetings to track how your accounts are performing. And then looking at inflation, what the inflationary rates have been this past 12 months.

And what's the forecast of inflation in the next 12 months? So you just have to have to be sure your plan has. the ability to not only beat inflation, but to be able to maintain your standard of living, that you can buy the things that you were able to buy a year ago, five years ago. So that's all part of the planning process. You know, when we're talking about guaranteed retirement income planning, we've been talking about the guarantee that you can't lose money in the account. And that's spectacular.

That's wonderful. It gives stress-free peace of mind. talk a little bit about the importance of the aspect of the income as it relates to cash flow because that helps close any gap that you may have for the need to pay your bills during retirement when you have this kind of guaranteed cash flow for the income. Right. So the plans that we put in place with the client is we take the cash flow out. We know what that cash flow is. And because of the growth of the index, it exceeds the cash flow.

So what we do with that excess interest, we reinvested back into the principal. So the principle is continually growing as we were drawing the cash flow out every year. So the cash flow can be depending on the client. It could be 4%, 5%, 6%, even 7%. So we do have clients pull out a 7% cash flow every year. And still, there are accounts that are still being credit excess interest. And that excess interest can address future inflation that may go up next year or two or three or four or five years. So that's the plan that way.

Again, this is innovation that's happened within the last three, four years. We didn't really have this innovation before. or if it's cash flow, you're pretty much stuck with that cash flow. If it's 5% a year, your account would maybe stay the same or it may go down a little bit. But the new innovations we have today, the last three years, we now have growth and we have a lot of growth. And that growth, it helps pay out that cash flow every year. And then the access interest goes back into the principal. So you want to have a growing principle and still take cash flow out every year.

Yeah. Wow. That sounds awesome. So can you share any real life examples of working with a client to help them put this guaranteed income into place that made a really big difference for them in their retirement? Yeah. I do have folks that come to my office and they're like, Ron, you know, I want to retire, but I just don't know if I can retire. And so I love doing the planning with them and taking what they've already done. I say, you've done a great job.

You've done. Every paycheck, you put this money aside to go in this 401K plan. And you've been contributing to your Social Security. And then when I, and then we talk about what's that date, they're going to retire. You know, it's going to be a year. It's going to be two. two years or five years out. And I do show them the plan.

This is what you're able to take out every month out of this plan. We're recommending this proposed plan. And then with your Social Security. And I love to see their eyes light up. They're going, oh, my gosh, I can live on that comfortably. And I took away that worry, that concern. Do I have enough to rely on? Do I have enough to retire on?

and when I do the math and I show the big picture, that just relieves them. And they're just like, Ron, I know I feel so good now. Now I can retire the year or two or three or four or five years. We're just given that comfort, that reinsurance and getting from us, that just puts the icy on the cake, the cherry on top. And they're going, okay, Ron, I'm ready to retire. and we have a plan in place.

So again, that's how valuable it is to work with people like myself who do this. And I love those meetings. I always look forward to those meetings. When it's their first time meeting with me or their second time or third time meeting with me and they're concerned, do I have enough money to retire one? And then they put the plan together and the answer is yes. What a gift to be able to give to someone to give that piece of mind to help them sleep better at night and just to kind of have that spring of their step.

So I think that is just spectacular. So Ron, if someone is interested in reaching out and connecting with you to learn a little bit more about how guaranteed retirement income can help them, what's the best way that they can do that? Yes, they can reach us our email address, which is Roberts, R-O-B-E-R-T-S at Roberts. Again, R-O-B-R-T-S retirement.com. or they can reach us on our website, robertsretirement.com, or they can call us at 209, 223-7870. Excellent. Well, Ron, thank you so much for coming back on. It's been a real pleasure talking with you.

Oh, it's been a pleasure to talk with you too, Mike. Thank you. 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.