Retirement Quiz

SPEAKER_00 0:05

You're gone to a really great financial feature. Tom and Don are talking real money.

SPEAKER_01 0:12

Well, the results of the survey are in, and podcast listeners love quizzes. You do like your quizzes. It's why we occasionally find a quiz somewhere online and go, that's an interesting quiz. Let's see how smart the talking real money audience really is. Today's topic from the Wall Street Journal. How well do you know your 401ks, 529s, and HSAs? And we're going to take the quiz. Well, not we, just Tom. Hi everybody, I'm Don. I love this.

SPEAKER_03 0:45

That's Tom. What a great ad. Let's quiz Tom. That's his I'd love that. Yeah, perfect.

unknown 0:51

Yeah.

SPEAKER_03 0:52

All of America likes that. Except for Tom. You don't count. Okay. And in in complete and you know, in fairness, you sent this to me. I read it. Uh-huh.

SPEAKER_01 1:05

And um Wait a minute, you had an advantage.

SPEAKER_03 1:09

I did have an advantage, and here's part two of that. I there were some I didn't know the answer to. I won't lie.

SPEAKER_01 1:14

I mean, I read them thought, uh, Tom, that is part of the charm of talking real money. And what sets us apart is that we don't know everything. And when we don't know, we either make a mistake and correct it, or we say, Oh no.

SPEAKER_03 1:28

Yeah. Well, that guy, remember one guy we did, I think I told him I didn't know, and he wrote me later and said, You I can't believe you didn't know that, blah, blah, blah. I'm like, well, I I don't know all the like it was a it was a the obscure social security. If I do this, what about that thing? I don't know.

SPEAKER_01 1:42

I think they think that we're AI, maybe. Let me tell you that. We're I'm a long way from that. So we're connected to this huge server farm somewhere in Nevada.

SPEAKER_03 1:54

That sounds good. You're gonna be outside of Nevada too? That'd be better than that.

SPEAKER_01 1:58

Well, uh that's the thing later. This is my plan for uh for after uh death, is I'm just gonna AI myself.

SPEAKER_03 2:05

Aaron Ross Powell Just so your brain will still be functioning.

SPEAKER_01 2:07

Yeah, I'm gonna be on a server. Will the voice still be there? What? Will the voice still be there? Aaron Ross Powell I've already I've already AI'd my voice, dude. Of course you have. I have. I've created an AI clone of my voice. That's scary. It could be some it could be AI actually doing the show right now, and you wouldn't know. Yeah, actually you would, because it doesn't sound like me all the time. It sounds basically like me reading a book. That's what it sounds like.

SPEAKER_03 2:33

Well, I know how well you read. So all right, so go ahead and roll me your guinea pig. Why not hit me? Okay.

unknown 2:39

Yeah.

SPEAKER_01 2:39

I'm not even gonna use the game show sound effects this time because they were cheesy. I like those. Oh, I could throw them in maybe later. I don't know. Dating game, maybe or something. Oh Lord, he's doing it to me. Now I gotta figure this out. Oh, let's see. What do we got? I gotta change screens. Uh okay, here we go. Is it working? Oh, I didn't have it on the right screen. Okay, never mind. That would be this one. Welcome to the quiz, ladies and gentlemen. I don't know what that was. Um applause. Sounded good. Do we have anything else? Um We have this. No, we don't have that.

SPEAKER_03 3:21

Monday night football intro, dating game. Oh, we have this. Jeopardy. That's your final answer, Tom? Craigs.

SPEAKER_05 3:30

Got it, yeah.

SPEAKER_01 3:32

All right. So I I thought I had game show music, but apparently I do not. Oh, no, that's the game show crowd. That's the right answer. What's this one? Oh, I know what that one is. Let's try that. Is it playing? No, that's waiting for you to answer. All right. We're not ready for this. Sorry. Sorry you had to hear that, but I'm not editing it out. Behind the curtain there. Let's go to the question, shall we? Yeah, okay. I just need to move along. Question one. Yeah. Tom. Yes. Which account type offers the most tax advantages? The most tax advantages. The most tax advantages. Yep. Health savings accounts. Roth IRAs. 401Ks or all of the above. Okay, so the most tax advantage. The most tax advantages.

SPEAKER_03 4:30

I believe would be health savings accounts. Because you get a tax break when you put the money in. Right. That's one. Number two, it grows tax deferred. And number three, you can take it out and pay yourself back for medical expenses or pay medical expenses. So I think it's I think it's three.

SPEAKER_01 4:48

So I think it's a tax benefit. That is the that is the correct answer.

SPEAKER_03 4:54

All right. That probably ends my run for successful answers, too, by the way.

SPEAKER_01 4:59

Congratulations.

SPEAKER_03 5:00

I think it's underutilized, by the way. I think most plans now have it. I'm doing it. I love it.

SPEAKER_01 5:05

So I'm and Well, don't be a dummy like me and take uh Medicare at 65 and take part A because you think why not? Because you can't do HSAs with your employer anymore, darn it. Yeah. Anyway. So okay, HSAs. Question two. Yeah. Both Roth and traditional retirement accounts grow with tax advantages. But how do they differ? This is a multiple choice. You don't even have to think of the answer. A Roth is funded with contributions you've already paid taxes on, and withdrawals are typically tax-free. With traditional accounts, you can deduct contributions from taxable income and must pay taxes on withdrawals. That's A. B. Roths are exempt from required minimum distributions. Or C, workers who want to contribute the maximum to a retirement savings account can accrue more wealth in a Roth than a traditional account, or D. All of the above.

SPEAKER_03 6:02

Okay, so I this is kind of an odd one. I mean, because what they're saying is if you put money in a Roth, does it grow more? Well Does it? I mean it grows more tax-free.

SPEAKER_01 6:23

The reason why is that uh Because a Roth is tax you're taking the money out, it's tax-free.

SPEAKER_03 6:28

Trevor Burrus, Jr.

SPEAKER_01 6:28

Right. Because you you could put a maximum of twenty-four-five in a traditional but up to twenty-four five after paying taxes in a Roth. So it's the after tax. Yeah. It's a kind of a weird question. You're right. Trevor Burrus, Jr.

SPEAKER_03 6:41

Again, some of these No offense, just not that well written. But good information nonetheless. So okay.

SPEAKER_01 6:47

All right. Which accounts require employers to offer matching contributions? Trump accounts, 401ks, HSAs, or none of the above?

SPEAKER_03 6:55

Require? Uh-huh. None.

SPEAKER_01 6:58

Well, that was fast. Okay, that's the correct answer. Wait.

SPEAKER_03 7:00

I don't think I don't think anything's required. I think it here we get matched for the HSAs and the 401ks, I believe.

SPEAKER_01 7:10

Yeah, but it's not required.

SPEAKER_03 7:11

It's not required.

SPEAKER_01 7:12

Right.

SPEAKER_03 7:13

No. All right. Which of these which can we dispel one more kind of because this is still semi-new? Trump accounts have nothing to do with your employer. No.

SPEAKER_01 7:23

I think your employer can make contributions, though, if I remember right. Like any anybody, I think, can, but we're still calling them Trump accounts. I thought we had decided on Trump.

SPEAKER_03 7:32

Yeah, I just did a call with a guy, yes, he calls them youth retirement plans or something, YRPs or youth retirement account YRA. Yeah, maybe we came up. Did we come up with that? YRA? Anyway.

SPEAKER_01 7:41

Well, one of our listeners came up with the idea of calling them 530s, which is what their tax code is. Okay. Anyway, moving on. Yeah. Which of which type of account has no IRS mandated dollar contribution limit? 530s, HSAs, Roth IRAs, or 529 plans?

SPEAKER_03 8:00

Okay, so for full disclosure, this is the one that I read and I said, I I don't know. So pre-program, I told Don I don't know. And then I because I looked it up and I was like, I doesn't make sense because they're there on a 529, there's no IRS limit. This is a little bit tricky. There is a state limit for all these states that sponsor these plans. Remember, these are 529 is a state-sponsored plan.

SPEAKER_01 8:28

And the limit, but the limit is up to 600,000. Well, it depends on the state. It depends on the state. That's the highest. I think that's Vermont or somebody.

SPEAKER_03 8:36

So the answer is none.

SPEAKER_01 8:39

The answer is no. Well, the answer is 529s. Which type of account has no IRS management.

unknown 8:46

Trevor Burrus, Jr.

SPEAKER_01 8:46

Which account type is not correctly matched with its standard 2026 contribution limit? 401Ks have a limit of 245. Trump accounts have a limit of 125. IRAs have a limit of 7,500. HSAs have a limit of 4,400 for self-coverage and 8750 for family. That's a complicated question.

SPEAKER_03 9:07

Can you hit a buzzer and just say I don't know because I don't know?

SPEAKER_01 9:11

Well, the answer is uh Trump accounts have a limit of twelve five. That's five thousand, right? No, twelve thousand five hundred.

SPEAKER_03 9:22

Well, it says is not correctly matched, but here it says it does have a limit.

SPEAKER_01 9:26

Yeah, that's right. So that they don't right. So they have a limit of five, not twelve.

SPEAKER_03 9:29

It's five thousand a year.

SPEAKER_01 9:31

Right. Yeah. It's a terrible question.

SPEAKER_03 9:34

I'm not even going to read that one. Number two, who knows anything about the YRAs?

SPEAKER_01 9:41

But this one's actually a pretty good one. Okay. This one's a pretty good one. All right. Because I think this is a general knowledge question that people should should know. They probably don't. What do you need to have to contribute to an IRA account? Ah, this is actually a little tricky, so yes. Yeah. I knew this was. A. Taxable earned income. Uh-huh. B legal status as an adult. C automated contributions, or D a W-2.

SPEAKER_03 10:11

Yeah. Okay. So the answer here is taxable earned income. You don't have to have a W-2. You don't have to be an adult. And automated contributions has nothing to do with anything.

SPEAKER_01 10:21

That's just a that's a canard thing. That's just a display.

SPEAKER_03 10:25

But yeah, this is tricky because it's come up before. Can you can you go mow somebody's lawn and then say, yeah, I mowed this lawn and put it in your Roth IRA? I wouldn't do it personally, because I think it's risky.

SPEAKER_01 10:39

But you could. But you could. You could. And you definitely could if the person if you g i if they gave you a 1099.

SPEAKER_03 10:49

Oh then, yeah, no question. Sure. But do your neighbors often give you a 1099.

SPEAKER_01 10:54

The kitchen. W2 would be. No, no, no. The one that you g give to a W9. Is it a W isn't it? No, for 1099 income. I think it's I can't remember. See, this is the problem. I can't remember all the IRS numbers, but it's like 529s and 530s. Which why do they number stuff? Maybe Trump account is a better name, at least we know what it means.

SPEAKER_03 11:20

But in this case, the bottom line is it's a little gray. Yeah.

SPEAKER_01 11:26

What is the earliest stage the tax code allows? Penalty-free withdrawals, not without the 10% penalty from a 401k, assuming a person leaves the company and needs the money for any purpose. What is the earliest age a 401k can be withdrawn after you leave the company? 55, 59 and a half, 62, or 65? I believe if you leave the company.

SPEAKER_03 11:53

And agree to as it take an equal amount? You can take it at 55 without penalty.

SPEAKER_01 11:59

You don't even have to agree to an equal amount.

SPEAKER_03 12:01

Oh, okay. What's that there's that rule, too, the one with the That's the uh for IRAs.

SPEAKER_01 12:06

Okay. Substantially equal contribution uh distributions over your life expenses.

SPEAKER_03 12:10

Okay, so 55, I think, is correct.

SPEAKER_01 12:11

55 is the correct answer.

SPEAKER_03 12:14

Thank you, studio audience. I'm now old enough to start drawing money from my uh from my IRA and my 401k.

SPEAKER_01 12:21

You can take you can take it all out. You just go right ahead. You're good. You are so old you can do pretty much anything you want. And and basically get away with it. Except not hurt. That's the only thing you can't not do. At that covered in spades. Yeah. Which type of account requires investing in stock index funds? Now listen to the word requires. Requires investing. You must invest in stock index funds.

SPEAKER_03 12:47

It's not even it should have been more specific, which we'll talk about here in a moment, but okay.

SPEAKER_01 12:52

But which type of account? 401ks, 529 education accounts, Trump accounts, or HSA's health savings accounts.

SPEAKER_03 13:01

Okay, so the previously mentioned Trump account is the only one that requires and by the way, it's not just stock in index funds, it's U.S. stock index funds. Mm-hmm. Which is just I guess America first, weird, but anyway. So the other ones you can do anything you like with the 529s or four. I recommend it.

SPEAKER_01 13:25

And that's only and the qualifier in this is that it's only until they're 18. After they're 18, they can do anything they want with it. That's true. It's just for the first eighteen years of life. Very strange. The rules are very strange. Again, and this came up recently.

SPEAKER_03 13:47

I don't know that we needed it, but I but I ha was forced to admit that anything, anytime there's more publicity about saving for the future, I th I guess that's good news, right? We'd something we should do.

SPEAKER_01 13:58

Well, and then there's the other thing that we're all selfish, take the free money.

SPEAKER_03 14:02

Yeah. I'm only out of s I only missed that by like 67 years. I was very close.

SPEAKER_01 14:07

Yeah, but your your granddaughter nailed it.

SPEAKER_03 14:09

She nailed it. She's got her 1K coming.

SPEAKER_01 14:12

So there you go. Final question. Final question.

SPEAKER_03 14:17

Yes. Okay.

SPEAKER_01 14:18

Oh, sorry, you didn't like the quiz that much? Okay, well, a lot of people happy for that. Okay. There. You know, you think you won the over the audience and then they turn on you. Like that. Yeah, just like that. Under the tax cut Trump signed into law last July, what expenses now count as covered for the purposes of taking money tax-free out of a 529 plan, an education plan? Is it K-12 tutoring? Is it fees for APSAT or ACT tests? Is it C, K-12 books and supplies, or D, all of the above?

SPEAKER_03 15:01

And this is one that's changed in the last decade. Yeah. Yeah. I I believe, and I I know you're gonna you won't have any trouble, correct me if I'm wrong, but I believe it's all of the above, right? That is the correct answer, Tom. Oh, okay. No, I can't remember.

SPEAKER_01 15:17

Wait, Tom, hit the wrong button again. Oh. I'm not good at this. I should never be the producer of a game show. You're the guy in the booth. I'm the guy in the booth doing a bad job.

SPEAKER_03 15:26

That's right, Don. You just won. Because that's yeah, that's one they changed about, I think about a decade ago, where which allowed you to use the money for for kids. I thought it was only high school, but I guess it says K through twelve.

SPEAKER_01 15:39

No, it used to be just college and then it that went to uh to under college, pre-college, whatever they call it. It's not undergrad, because that's college. It's undergrad.

SPEAKER_03 15:49

All right, you ready for me to ask you some questions now, my friend?

SPEAKER_01 15:52

No, no, no, I am not because shoes on the other foot now, huh? I think I think we need you to I think first we probably should get you to take a caller. Ray from Royalton, Vermont. How are you, Ray?

SPEAKER_02 16:06

Well, Tom.

SPEAKER_03 16:07

Thanks.

SPEAKER_02 16:08

My pleasure to have you on. Yeah. Thanks. I had a question about um getting over my anxiousness about doing a transfer from one uh account to another. Recently there was a big uh upday in the market, and I had put in an ACAT transfer request from TIA Fidelity, and it didn't go through. And so seeing the market move that much to Dow in that case, of course. Um I know logically it shouldn't make any difference outside of the time that the money would be out of the market, but it it made me nervous.

SPEAKER_03 16:49

Yeah, this is and so TIA oftentimes our experience and we primarily work with our clients at Charles Schwab. So Tia and Charles Schwab don't get along all that well. And man, it may be the same with Fidelity. I don't know. Um you mentioned ACAT, the automated customer account transfer, which is a a system of uh financial custodians that work together to try to make these things faster. And oftentimes, if you if you're moving money from an ERISA plan like a 403B, 401k to Schwab, it could be as quick as five days. Um so uh so that just set as a background, that's an important thing to know. Um and then the question kind of is what I'm getting from you as well, but if I do that, then I'm gonna be out of the market for a period of time, and that could work against me. Is that what I'm hearing?

SPEAKER_02 17:43

I I know it doesn't uh maybe make any rational sense, but um as Don would say, you know, this is the part of my brain that's overthinking it. Yeah. Um I think we've been based on what's happening.

SPEAKER_03 17:59

And it has been, you know, kind of even though I think I did just read a piece that volatility actually year to date is less than what we would expect. It feels like more. Um certainly in March we had a pretty big down month, and then April pretty big up month, so it's been kind of back and forth. But remember, on a day-to-day basis, the market has a very small bias to more up days than down days. Uh you got to get into you got to get into months before you really I think it's 75% of the months are up and 25% are down. It's about the same when it comes to years. It's about three out of four years the market's up and uh and uh a one quarter when it's down. We all have to keep that in mind. Um and and back to your kind of apprehension, because this does come up, as I said, for us, because not everybody sort of plays in the same sandbox when it comes to moving money around, and we can do it generally pretty quickly, but sometimes it takes longer. You got to remember that you're you're you're a long-term investor. I know that. Um and by the way, thank you for listening to us and and being so kind to outreach to us on a regular basis. You're a long-term investor, and you're as likely to miss a down day as you are, up days, et cetera. And we just all have to sort of say, you know, I'm making this move because I want to move my money here. Um I'm making it, you know, now because it's the right time to do it. And I never really advocate one time over another because there really isn't a period of time where it's we can sort of guarantee that the market's gonna do any such thing. And I'm gonna, you know, sort of take whatever they it gives me, remembering that again, done properly, these transfers should take, you know, as as few as five days and maybe a couple of weeks at the outside if they're done right. If they're outside of ACAT, it could take a little bit longer. Um, but generally it's about that period of time, and we and we all have to deal with that. There's nothing, there's no way really around it.

SPEAKER_02 19:54

I do think there's a little bit of this that is unique to TIA because they do not, they will only do outbound requests.

SPEAKER_03 20:03

Well, they are as a thing. Yeah, they're kind of on their own. They don't I know, for example, TIA does not accept any Schwab paperwork. You have to, if you're moving money from TIA to Schwab, you've got to use their paperwork. A little unusual. You know, they're gonna tell you it's for the protection of the client. Okay, well, I'm all in favor of protecting the client. So it makes it a little more difficult. Uh, I get that, but again, I wouldn't, I think you're right. I think it it it feels emotional in some ways, and uh it's really something that not unlike what the market does on a short-term basis, sort of out of our hands. Appreciate it. I hope that helps. Ray, thank you so much again for listening and uh for reaching out to us. And uh it's great to chat with you here on Talking Real Money.

SPEAKER_01 20:48

And if you want to send us questions or ask questions or get on the air with Tom, all you have to do is go to talkingrealmoney.com, click the ask a question button, and type it in. That'll get you to Tom. Speak it in. That'll get you on the Friday QA podcast. But either way, we're gonna try and get your questions answered because answering your questions is our favorite thing to do. We like it so much better than game shows. Correct answer. Thank you. All right.

SPEAKER_03 21:15

Uh here's our here are the questions for today, Don. You ready? Hi, Don. I'm 77 and retired. I have a million dollars in my traditional IRA taking RMDs. I've been presented with an opportunity, an option.

SPEAKER_01 21:31

Oh gosh, this scares me.

SPEAKER_03 21:32

The could convert the 1 million within two years by taking out a fixed index annuity, Athene, the company will provide me$170,000 up front as a bonus. At my bracket of 33%, surrender periods ten years. Each year the policy fee is.95 for ten years. Is this wise to consider? The Athene proposal.

SPEAKER_01 21:55

Okay. So much wrong with this. One, that bonus is a lie. That bonus only applies. It raises the value, the value, which is a nebulous figure anyway, because it no longer has any value when or if you turn it into an immediate annuity. You start taking in, you give up the money to the insurance company. So basically, they're giving themselves a made-up bonus check to the insurance company, not to you. And they claim they're going to pay you an income based on that. But what they do is just internally adjust the figures so that they don't really give you money, they just make it appear like they do. And the problems with indexed annuities are legion. I mean, there's so many problems with these things. One, they claim they're something they can't be, that they go they return what the market does and they do it with no risk. It's a lie, it's a lie, it's a lie. That's a lie. They give you a portion, and I do mean a portion, and generally it ends up being a tiny portion of the the overall average returns of the market, some markets, some weird index that they made up. When they have a 10% surrender charge, that means the agent, the agent who's selling it to you is getting a commission somewhere between 8 and 10 percent. Where's that money coming from? The fact that they're not going to give you that much money. I pretty much despise every single insurance investment known to mankind. The only thing that I might consider in a certain situations is putting the money into an immediate annuity if you need an absolutely set amount of income for the rest of your life or your life and your spouse's life. That's the only time. And even then, I would try and talk you out of it. Trevor Burrus, Jr.

SPEAKER_03 23:53

Yeah, I guess for me, Pam, on this um, and thank you for your question, is why you would want to do this at age 77? Because why are we annuitizing the money? Is it the future of the Aaron? No, no, no.

SPEAKER_01 24:05

She's not annuitizing yet. She's indexed.

SPEAKER_03 24:09

Why would you want to buy one now? Trevor Burrus, Jr.

SPEAKER_01 24:11

Probably because the pitch is we're going to give you the returns of the market with none of the risk. All right. I see that. Because it's not, she's not she's not annuitizing it. But what I'm saying is the only time you get that bonus is if you annuitize.

SPEAKER_03 24:23

And when would she annuitize? I mean, not that you're seventy-seven. I mean, it's kind of like how many more years you go. Anyway, okay. So so in with that in mind, we have a uh unfavorable comment from Kenyon in Roseville, Minnesota. He says, I don't own any annuities, and no one in my family works for the insurance industry. I certainly agree with you about the insurance industry selling two complex and opaque products. However, on this show, you repeatedly made a claim that it's just as misleading and downright false. A number of times you stated that if you die before you start receiving funds from the annuity, the insurance company gets to keep your money. That is patently false.

SPEAKER_01 25:06

Okay, one, let's start right there. We never said that. Ever. Ever. If you annuitize and you've got no writers that pay out a certain amount to, you know, to your heirs or you you get back something. If you annuitize and then you die the next month or the next year, but you have to annuitize, the money belongs to the insurance company, generally speaking.

SPEAKER_03 25:37

That's right. Um so but so just to be clear, we never said that. We never said that about before you actually start taking money back. Um he he goes on. They pool your money to pay people who do not die before receiving their money, some of whom will live to be centurions. The insurance company is trying to make money between what they've offered in payments versus what they can earn on largely safe investments. Yeah, we get all that. Which brings me to my second more minor quibble. Good use of words. You discussed how earning 6% a year return, you'd be much better off in the market than in an annuity. You're comparing apples and oranges. A person may choose to buy an annuity to remove the market risk from their portfolio. So you really should compare the annuity payments versus U.S. bonds. That's the only investment that truly removes market risk. We could make an argument there, too, by the way.

SPEAKER_01 26:25

Wait, no, hold on. Gotta, gotta, gotta challenge this. They are you would you want to talk about apples and cum quats? Talk about comparing an annuity to a bond because you still own the principal with the bond. Thank you. With the annuity, you no longer own the principal. Basically, the amount over and above the income stream from a safe security like a treasury, that amount is your capital plus whatever they're making, plus whatever their profit is coming back to you.

SPEAKER_03 26:52

Yeah. That's good. Um and there's if you have a fixed annuity, technically that should be lower risk than a bond, technically. But it it's not because what's backing it up. But anyway, um, let's see. So it says the only investment that truly removes the more we talk about that. I agree that statistically a person is likely to be better off in the market. I'm assuming you were served referring to stocks there, than in an annuity. However, there's no guarantee we won't have another period like 1929. To blithely say that you can make six percent a year clearly ignores both the history of your returns for the U.S. market and the potential that our future returns could be even worse. While I certainly don't invest like this is a likely outcome, it's a potential outcome that should not be brushed over lightly.

SPEAKER_01 27:37

Again, you're uh I we're gonna I can't let this this assumption, and this is the insurance company speaking, really, what you're you're you're their puppet in in the way you're stating this. When you annuitize an annuity, it is not a six percent return on your money because you no longer own your money. Your money is no longer making you money. The insurance company has said, give us all your money, and then we're going to pay you a monthly check equivalent to six percent of the amount you gave to us forever. It's not the same. No, it's not the same.

SPEAKER_03 28:12

So um yeah, and and and back to the kind of the market assumptions. All we're doing is looking back and saying for a long period of time, by the way, it made far more than six percent a year. You're right. Future could look completely different. We don't know. So thank you, by the way, for listening. Thank you for taking the time to write us. And for all of all those who've been writing and calling us, thank you for all that. It's been tremendous the last few weeks. And guess what? Some, some, sometimes you write me these, I don't know, 1,500 word, I'm taking Social Security here and I'm doing this and this and this. The reality is we can't really do those questions on the show because it just it just it's too involved, it's too long. And um, what you really need at that point is to talk to an advisor. And I know you sit at home and go, that's where they start to sell me something.

SPEAKER_01 29:03

That's what hey, and that's the case with 99% of companies.

SPEAKER_03 29:07

I understand that that that that that you feel pressure for that, and that's why, since we started the once Vestry, which by the way, one of my son's 33-year-old friends brought up recently, Los Faintes. I said, Wait, you remember Vestry? That's so nice of you. Uh anyway, that's why when we started Vestry, we said, and we've said it publicly since, for garn near 20 years, we'll help anybody, we'll help you free, we'll help, we'll analyze your portfolio for you, we'll give you all the information you need to make good decisions, and it's as simple as reaching out to us and asking for help. And we love it.

SPEAKER_01 29:44

So take advantage of that. And by the way, before we go, while Tom was uh clapping his lips, I was actually researching. Good good good cover for me. Thanks, Tom. I appreciate it. Um because I I didn't remember the exact number. But let's say you're 65 years old and you put a million dollars into an immediate annuity, paying you six percent per year or sixty thousand dollars. Not making you, but paying you. Paying you sixty thousand dollars, okay? If if you only live until eighty-one, you have made no money on your money. Zero. You just got your million dollars back. If you live until eighty-three, now you've started making money. It takes seventeen years before the annuity before the insurance company actually has to pay you anything they're making on your million dollars, basic uh uh essentially. They're just giving you your money back for the first 11, I mean the first 17 years.

SPEAKER_03 30:58

They're giving you your money back. That's not part of the pitch, I presume that they don't have a lot of people.

SPEAKER_01 31:03

They don't tell you that part of the pitch because that would kill the pitch. Do you think do you think annuity sales would uh would would would rise or fall if everybody who was buying an immediate annuity was told, well, if you die before 801 eighty two, then we really didn't pay you a darn thing except your money back. Yeah.

SPEAKER_03 31:21

It's it's it's it again, you've said this as well. Insurance companies are profitable. Insurance companies are profitable because the odds that they've figured out, they're the ones selling the products, are on their side.

SPEAKER_01 31:35

And let me put it another way, just for for for those of you who didn't get it yet, because we've said it about 10,000 times. Take a million dollars, put it under your mattress, hope no one breaks into the house, put it under your mattress. Every year, pull sixty thousand dollars out from under the mattress.

unknown 31:56

Okay?

SPEAKER_01 31:57

Spend it. Enjoy it. You will not run out of money as long as you don't live past eighty-two. Start taking it at sixty-five. You will be able to do that.

SPEAKER_03 32:07

Well, unless we have your home address.

SPEAKER_01 32:09

Well, yeah, that's what I'm saying, short of a burglar. Oh, okay. You didn't mention that. Yeah. Otherwise. Otherwise, lit I can literally tell you that you won't run out of money. You will be absolutely safe as long as you die by age 82. You're in good shape. Oh, don't smoke in bed in the same way. No risk, no risk except burglar risk.

SPEAKER_03 32:28

Trevor Burrus, Jr. Don't smoke in bed either.

SPEAKER_01 32:31

Does anybody smoke anymore? I don't think so. You remember when fires used to start that way? Oh my god. Houses used to burn down all the time back in the days of smokers. No.

unknown 32:42

No.

SPEAKER_01 32:43

Pretty hard to find one here in the great state of Washington. So don't invest in fire departments. Probably not. All right. Fire suppression gear. Thanks for being here. We appreciate you. Go to talkingrealmoney.com to ask all your questions, keep listening, keep telling friends, because the numbers are going up. Our downloads are just looking lovely, folks. Thank you. And keep keep keep doing it. I'm Don. That's Tom. We're Talking Real Money.

SPEAKER_04 33:08

The opinions and views expressed on this podcast were current on the date recorded. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and our subjects change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. Although information and opinions given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Information presented on the podcast is not personalized investment advice from Apollo Well. The views and strategies described may not be suitable for everyone. This podcast does not identify all the risks, direct or indirect, or other considerations which might be material to you when entering any financial transaction. Performance does not guarantee feature results, and profitable results cannot be guaranteed. We hope you realize that the information provided on Talking Real Money is for informational, educational, and hopefully enjoyable purposes only. The podcast is not trying to get you to buy yourself any financial products or securities. Instead, the program is provided as a public service by Apellow Wealth, a fee-only registered investment advisory. A public capital LOC DVA Apellow Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in the states where it is properly registered, or excluded or exempt from registration requirements. Registration with the FCC or any state securities authority does not imply a certain level of skill or training. Apollo does not provide tax or legal advice, and nothing either stated or implied here should be inferred as providing such advice. Thanks for listening, and please visit TokyRailMoney.com for more information and important disclosure related to performance of any specific index or fund quoted in this podcast. The lawyers get richer.