Influential Entrepreneurs with Mike Saunders, MBA - Interview with Shelby Green Retirement Expert with Retirement Heroes Discussing Bond Replacements and Volatility Buffer

Episode Date: August 21, 2026

Retirement Heroes specializes in helping retirees and those nearing retirement secure their financial future with confidence. Whether it’s ensuring a reliable income stream, protecting assets, or planning for healthcare costs, we take a personalized approach to understanding what matters most to each client. Our mission is to provide the guidance and strategies needed so they can enjoy their golden years without financial stress.Financial security in retirement isn’t just about numbers—it’s about peace of mind. I’m here to help retirees make informed decisions so they can enjoy life on their terms, without the fear of outliving their savings.Learn More: https://retirementheroes.org/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-shelby-green-retirement-expert-with-retirement-heroes-discussing-bond-replacements-and-volatility-buffer

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 the Shelby Green, who's a retirement expert with retirement heroes, and we'll be talking about bond replacements and volatility buffer. Shelby, welcome back to the program. It's good to be back. You know, I think that a lot of times people hear, you know, like volatility and yeah,

I want my money in safe, safe and secure places. And one of the places that typically people look to are bonds, because for decades and decades past those have been that volatility buffer, why is that? Why are bonds a volatility buffer? Yeah, I mean, mostly because it has significantly lower risk than, you know, your actual equities and it simply has a better growth than if you had liquid money in a bank. That's the reason why bonds ended up being pretty popular. And I think that probably if we were to look back over 30 years, we would see like the S&P is high, low, you know, up and down. And bonds sometimes are the

go-to and then sometimes it's just like, no, get out of bonds. What is that kind of like the peaks and valleys? How often are bonds really, really in vogue and good? And then how often do the they kind of dip down and we need to move away from that. Well, I mean, bonds follow the interest rate markets. So when, you know, things happen with interest rates, typically speaking, that's when you're going to make your decisions with bonds, right? So as you see, you know, interest rates changing and that's the speculation expectation. That's typically when bonds will make its change, depending on which direction.

And so I think something really easy for people to do is, you know, is that you understand that all your money shouldn't be in bonds. However, it's going to be significantly safer than putting your money all. and equities. Yeah, and it's just like anything. I know that sometimes, you know, people have heard that, you know, Warren Buffett said, put your all your eggs in one basket and then guard that basket. Well, that might be great for someone like him, but I think we need to have some diversification

and have money and bonds and money in different places. So typically sometimes people have heard about the traditional 60-40 portfolio. What is that number and is that even, what does that look like? What is the 60 and what's the 40? and is that still appropriate for retirees now? That's a good question. I'd say if somebody wants kind of like a rule of thumb, a 6040 just says that you're probably not overexposed

with your amount of money that's in equities. However, each person is so different. Because typically speaking, the idea of having that safe money isn't just to get the money away from risk. That's not the purpose. It's because if the market's down, you need a place that's safe to withdraw money from so you don't have to touch your equities.

That's the biggest idea and the benefit of a volatility buffer, which happens to be something like a bond or, you know, there's other fixed alternates as well. But that's the real benefit of having it is not because of the fact that it's just less risky. It's just really because you have a place that you can touch that's inversely related to, that's not related at all to the actual, you know, exposure you have in the market. Yeah, yeah. You know, I think when people hear about, you know, bonds in 6040, what actually is a bond? You know, what does it look like if you were to say to a client, you know, We need to put some money in bonds to, you know, offset some of the interest rate fluctuations. What actually is a bond?

Yeah. Imagine that you're basically loaning money to the government. And then the government's saying, hey, we'll pay you a specific interest and give you back your original money on whatever the set date of that bond is. And so that's exactly what a bond more or less is. Okay. Yeah, you're lending money to the government. And is that guaranteed or can you lose money on that? You can lose money on it.

And the reason why is because the whole idea of bonds is that they work inversely to interest rates, right? So like when interest rates rise, those fixed payments on older bonds, they become less attractive. And you can compare that to like the new bonds that are offering higher rates. So it causes the existing bonds to then drop. So that's exactly kind of how it ends up working out. And obviously it's going to be the opposite if, you know, interest rates go down. So for instance, if someone were interested in a bond 15, and they had one from 15 years ago, And then someone is interested in doing one right now, those two bonds might look totally different based on when they were issued, right?

Exactly. It's all based on when they're issued. Yeah. Exactly. Okay. So then if we're talking about, you know, helping to be that volatility buffer and we're looking at bonds, that could be maybe a good option. What are some alternatives to bonds? Yeah, I think some popular alternatives to bonds, and it just depends on what you're looking for. I think if you're looking for, you know, something that maybe you're more familiar with, I've seen a lot of people go with CDs. CDs are a bond alternative.

But CDs typically speaking, they're not liquid for the time frame that you choose for maturity. And on top of that, the rate of interest is not too high, right? I think CDs right now are paying maybe 4%. But a few years ago, they were maybe 2% or 1%. I think high-yield savings accounts or money market accounts are another good alternative. if you want money that's a little bit more liquid, those are probably some of the most liquid accounts that you can have money in.

Once again, the issue is they don't grow as high, right? Typically over 20 years, even though rates right now are over 3%. Usually what I've seen is, you know, you'll probably average more like 2 to 2.5 over decades of time. And so that's kind of the problem there, but you do get the liquidity.

I think right now, one of the best bond alternatives on the market, right now are annuities. You have guaranteed, annuities paying out over 5.5% as at the time of this, you know, this podcast. But, you know, depending on the time, the rates are higher than CDs. They work very similar. They have better tax deferral. And on top of that, if you get more like a fixed index annuity, well, you have a potential to get a higher growth rate, right? So I think that the rates are seasonal, just like there with

bonds. Bonds back in the 80s paid out double digit returns. When I start in this industry, annuities paid out 3%. Today, I have some clients getting between. five to eight percent averages in their annuities, which are really nice for somewhere that doesn't have any risk. Yeah. And talk to the person that goes, wait a minute, annuity, I heard on the radio, I heard this person or that person say they're horrible. Yeah, I mean, some of them are. I think right. Yeah, that might be a false statement. Some of them might be. Some of them are bad, but that's the idea of, you know, people who do this a lot myself, especially. One thing that I've spent a lot of time in research on are if annuities are not always bad, how do we find the good ones? And that's exactly

what I've focused my time and research on. I know exactly how to get the good ones. I know what company to do. I know which indices to use. I know the exact strategy to actually have one that will perform better without fees. A lot of these annuities, they have a lot of fees and that's the problem with them. I specifically find the ones without those. That way the person can just really reap the benefits of the return and not have to play around with the idea that, hey, maybe this is not going to be that good of a plan. You know, that's a really good point twofold. A, some annuities could be horrible. B, annuities back in the day, decades ago, were mostly horrible, but yet now these days they're a whole lot better, but it doesn't mean that every single annuity is good. So make sure you're working

with someone like yourself that can show the differences, but fees. Isn't it true that, you know, that number you mentioned, like some annuities are returning five and a half percent, let's just say, as an example. If there were a lot of fees on that annuity, maybe the effect return might be four, four and a half percent, not the five and a half. So you have to watch the the net return, right, because of fees. Exactly. Exactly. So people don't think like that.

Yeah, well, no matter what someone tells you on the other side of the phone, if you have whatever return that you have and you have a fee, you need to minus the fee from the return every single time. And so that's like on Shark Tank when someone goes, oh yeah, I made $1.4 million in revenue last year. And Mark Cuban claps his hands. But then he's like, okay, well, what was your net income? Yeah, we lost money.

Well, it doesn't matter about the 1.4 if you had so much expenses. Well, it doesn't matter if the instrument was 5 or 6% if there were so many fees that bring it down to 3 or 4 or whatever. That's the true number. Exactly. 100%. And that's exactly how you should be thinking about it. Yeah. So when we're talking about volatility, you know, it's like my money is in the market and we know the market.

And we know the market could go up and down. So that's why we want to have a volatility buffer. Maybe there's bonds we want to use. Maybe there's annuities, whatever the case is. But what are the risk of having no volatility buffer? Oh, man. I actually just showed this to somebody not long ago, maybe a week or two ago. And we basically looked at if somebody invested their money from 1995 all the way to 2009, where they would be.

And what I did was I showed them two scenarios. Now, this time frame averaged 10.4% using the S&P 500. So I showed them, hey, if we took money out in 1995 all the way 2009, here's what would have happened with your portfolio. And they took out money every single year and they actually ended up by the end of the 15 years with more money than they actually started with, which is kind of crazy. And I showed them, hey, what if we did the exact same thing, but we did the years inverse, meaning that instead of 1975 happening first, let's say the same return that you would have got

in 2009 happened. And so 2009 was a rebound year, nice. The year after that would have been 2008, right? And so we just did the exact same average return, 10.4%. We did the exact same years. We just inverse them. And the person ran out of money in 15 years instead of having more money than they started with. And this is a $2 million person that we're talking about.

And this is the idea of if you have no safe place to pull money from, if they just had a place to pull money from every year that was negative, they would have ended up with almost exactly what they started with. with 15 years later. And so all we had to do was play, we needed about four years of volatility buffers with whatever income level they wanted. They needed $150,000 per year. I said, okay, sounds like we need $600,000 somewhere. That's unaffected by market volatility. And that saved them tons and tons of money if they end up in that type of sequence where there's a negative year around the time that you retire. Big difference. Yeah. Yeah. You know, I think that

sometimes people hear conversations like this and just throw their hands up and go, I'm just going to keep my money in cash. You know, I'm going to get a, you know, maybe it's a high yield savings account, but still it's cash, not in some of these funds.

What are the risk of keeping too much money in cash? Because that's safe. They're not going to lose money, but isn't there some risks with that as well? Yeah, they have a few risks. I think number one is that they're not going to outpace inflation. Yeah.

Inflation is going to be that silent killer that creeps up and really decreases the power their dollars. And I think, you know, keeping all the money in cash, it sounds nice because it's all liquid, but I'll go back to the $2 million example. At no point, do I need all $2 million at once? Maybe I need $5,000. Maybe I need $10,000. Maybe I need $20, maybe even $30, but I don't need $2 million. Yeah. Right? So if the idea of liquidity is that you're keeping it liquid for a specific purpose. You don't have it liquid just to have it liquid. Right. I don't need $2 million just sitting in my bank account. So if I kept maybe 200,000 sitting safely in something that's liquid, maybe then even if I want to be more risk-averse, you still have these other places you could put

money. Like the annuity example, I mentioned earlier. Okay, at least you're getting 5 to 8%. You're always outpacing inflation and your money's always going to be growing. That's at least going to outpace inflation and allow you, you know, significantly more money in the future. Might as well, especially since you don't have any risk. Yeah. Yeah, huge. Yeah, and people don't think about that. They, they, they, they don't realize that a dollar today, it might be, you know, 75 cents in years to come. And that's what inflation does. Your money just won't go as far. And that's, that's as important to calculate as, you know, taxes. You know, taxes are going to make money leave your account. Well, inflation will make your money not go as far as you need it to go.

So a huge thing to make sure is calculated and baked into your retirement plan. Exactly. Very important. I agree. So when we're talking about risk and volatility and we want to, you know, have those buffers in place, what level of risk is appropriate? And, you know, meaning how far ahead of retirement should someone start making some of these moves to buffer that volatility?

because when you're in your 30s, you've got plenty of runway. You can recover if the market takes a hit. So, A, what level of risk is appropriate? And B, how far ahead of retirement should you start making these moves? Yeah, I'd say what level of risk is tolerable is going to be very specific to the individual and what they've decided to do with their money. If they're able to get most of their guaranteed income that they need for retirement covered without risk, they can be as aggressive as they want.

I have clients literally who we get enough guaranteed income to cover their bills and have plans for any unexpected things that could happen. Once we achieve that, they can be as aggressive as they want. They can have 100% in equities with no bonds, right? It allows them, that's safety. It allows them to be more aggressive in the portfolio. But I have other clients who they didn't put those things in a place. Now we have to be significantly more conservative because now they're in a position

where we have to utilize their money that's at risk and we can't take as much. Yeah. I'd say once you start to get around like age 53, and I say 52, 53, just because you're within 10 years of potential retirement. Most people, they typically retire after they're able to touch Social Security. And so having a 10-year leeway of preparing properly, more than likely if you're in your 50s, you probably have 100% or 90% of your money in equities. And you've got to literally start changing the plan so you can have enough money in a volatility

buffer by the time that you're already there at retirement. I think that the word diversification confuses some people because probably you've heard people go, oh, I'm really diversified. I've got money in Apple and Tesla. And well, you just have a bunch of money in still equities. That's not being diversified. What does diversified really look like for someone who's retired? Where do you feel like a good mix would be for safety and having that volatility buffer?

Yeah, I think diversification is a lot more than it means to some people. It means a lot more than people think it does. I think most people I speak to, they think diversifications, oh, I have money in different companies in a stock market. So therefore, I'm okay. Yeah. I think real diversification is from having your money either in different markets or having money that's unaffected by something differently.

Yeah. What I mean by that is, is let's say that I had money in the market. Well, that's affected obviously by market volatility. Well, if my other money was somewhere that's unaffected by market volatility, I'm diversified. The last thing you want is that one thing goes wrong and all your money's in one place and because all your money's in one place,

now you can't do anything because you literally had all your money in the same bucket. I have people who come to me and all their monies in the market. And I say, well, if the market crashed, what are you going to do? Are you just going to sell to loss? I thought it's buy low, sell high.

Right? Not so low. Yeah. And so it just allows people more freedom and flexibility. If they have their money, in separate places with separate goals versus trying to do all of it the way that they've been doing it in prior to retirement. You can't do things in retirement the same way that you did it prior.

It's not the same. Yeah. Yeah. You know, and I think that you need to have that plan in place. You need to check that plan. You need to stress test it like you've mentioned and check it a couple times a year so that that portfolio that you put together and it might be some in equity, some in annuities and guaranteed income bonds, things like that. But you have to withstand both inflation changes, tax changes. What are some other external hits that people aren't thinking about that would really impact their portfolio that they need to be prepared for? And when we think about volatility, it's not necessarily only the market went up or down. Sometimes you need to think about, ooh, inflation went up so that impacts our volatility of our retirement account, right?

What are some other things that impact? Yeah, good question. A lot of things, changing, like, laws and changing actual structure of things, that actually is a big determining factor of what's going to happen. I'll tell you some examples now. One, RMDs. At some point, they made it so you have to be, you know, 75 instead of 73. Well, before that, it was age 70.

And those changes obviously would heavily affect your retirement, and there's nothing that you can do about it, right? Social Security, the age for your full retirement age used to be 65. At some point it was 67, 66 in a few, you know, a specific amount of months, such and so forth. Now, 70. These are all big changes because it now means because age expectancy goes up, for you to get the full amount of your social security retirement, you actually have to wait longer. Yeah. Right.

On top of that, well, when it comes to Social Security, what if all of a sudden some of the money goes away? What if all the money that you've been expecting actually goes down by 25% or more? These are factors that you can't even control. What if you end up meeting home nurse care? If you have amnesia, maybe you have dementia, and someone needs to take care of you and your kids can't make it, right? Or even worse, they don't want to. It happens. I've seen it time and time again. It's like, I love you, but I don't know if I can move all the way back to, you know, Georgia or X, Y, and Z in order to do that. These are all things that people just don't take into consideration on top of everything else. Interest rates changing. Well, interest rates change.

It means a big deal for the real estate market. But what does it also mean for you? It means debt is going to be at a higher rate of interest when interest rates go up. Right? It means they're going to go down if interest rates go down. Might want to take advantage of that. Same thing with bond rates. Bond rates actually, well, potentially, depending what happens with interest rates,

maybe now bonds are going to be a bigger deal. Right now we're in a position where, annuities are a bigger deal because of the rates. Right now, they're paying out really high, but previously they weren't. And so there's always different things that happen that you have to really pay attention to that you really just can't plan for. But if you just once again stress test the portfolio, then against anything that could happen, well, then at least the things that are in your control are going to be controlled.

Yes. You know, I tell you that it just is something that, you know, you mentioned it in passing, but I think it's just, it needs to have a flag put down to the ground. Hope is not a strategy. I hope I'm good. I should be good. Well, you know, it's like what the old saying, I think Ronald Reagan was famous for saying it, trust, but verify. You know, I trust that the plan is in place, but verify it.

And it's not that it's a wrong plan. It's just that from six months to the next six months to the next year, you might have inflation changes. You might have tax changes. You might have Social Security changes. And how did that impact your retirement plan? Not that it was a wrong plan. to begin with. It just means that some external changes happen. So I think that is something really to keep in mind. So when if someone is thinking, how does this volatility or, or stress test affect my

retirement? What are some options for me? What's the best way that they can reach out and connect with you, Shelby? Yeah, I say the easiest way is typically going to be email. If you try to call, I do my best to answer it. But typically speaking, I'm in meetings and, you know, I try to schedule those meetings accordingly. So I usually don't have much buffer between meetings. But if you email, my name is Shelby Green, that's green like the color, at retirement heroes. That's heroes, h, h-e-r-o-e-s.org. If you email me there, I'll get back to you, and we can just chat about your situation. I can give you some advice and recommendations and build you a plan that stress testes all the things that we talked about today regarding your plan.

Excellent. Well, thank you so much. It's been a real pleasure having you back on again today. Mike, I appreciate the invite. Thank you so much. 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.

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