TRANSCRIPTION 🔗
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Your money matters is the show that cuts through the confusion to deliver clarity and confidence for your financial future.
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There's Mike Martinez, president and founder of the Pension Group.
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Thank you for joining us this afternoon for Your Money Matters from the Pension Group and Mike Martinez.
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Mike, you're the founder of the Pension Group, and you actually are taking some time off.
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I mean, you are a hardworking uh financial advisor for sure, but you're taking some time.
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However, you felt so strongly about the show today that you're actually talking to us from where?
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Uh I'm looking over the ocean.
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I'm actually in Maui here out in uh Hawaii.
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And uh my wife and us are on a retreat, and uh, she said this is the only thing you're gonna be doing on your trip.
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Uh it's you and me time, uh, you know, so I gotta adhere to my wife.
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But uh got a great show and uh great views here, mountains in the ocean.
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But uh, you know, the reason why I wanted to talk about this, you know, was um, you know, we had a situation back in 2022, you know, when interest interest rates were increasing.
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And what happened just last week, Kevin Warsh decided to increase interest rates kind of surprised the markets a little bit.
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Uh and we haven't seen a rate increase in over three years.
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And, you know, obviously we're the pension group, we're a wealth management firm, but there's gonna be a lot of people.
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Uh a lot of people have no idea what's gonna happen their pensions this year.
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Well, we do.
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And uh, you know, candidly, when I when I talk about that, we've been tracking these segmented interest rates prior to the rate increase by federal uh chairman Kevin Warsh.
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And and back in uh 2022, I called people gonna lose about 30% of their lump sum pensions back in 2022 over the summer.
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People said, ah, Mike's crazy, doesn't know what he's talking about.
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Folks, I've been doing this for 30 years.
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Uh I I understand pensions unlike any other advisor in Central Ohio, really probably throughout the country.
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Um, you know, we we had a situation with a client many years back in uh 2019, and uh some advisor from Merrill Lynch, uh, won't mention his name, but uh, you know, he basically, young advisor, you know, told my client uh who reached out to me because he was referred to me, he says, don't worry about those rates.
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Nothing's gonna affect you, just retired in December.
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Well, we actually retired back in 2019, interest rates actually uh went down.
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And I said, uh, you know, uh Calvin, I said, if you can you still want to retire December 1st, we won't execute your pension until 401 of the following year, 2020, right as COVID was going on.
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And as a result, uh, the advice that I gave him, he made an extra$69,000 in his lump sum pension.
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And I often ask people, what would you do with an extra$69,000?
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Some wives are saying, hey, I'm gonna go on that vacation to Maui or I'm gonna save it.
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Uh, whatever you want to do with that money is up to you.
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But working with a team that understands pensions is paramount.
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And unfortunately, this year, we're seeing rates starting to go up and up and up.
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Not as bad as 2022, uh, but we still have a few more months.
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And uh federal chairman Warsh indicated that he was not going to be reducing interest rates, obviously, with what's going on with this, you know, Iran and the war over there and gas prices through the roof.
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Um, you know, we don't see that those coming down anytime soon.
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And with you know, that's one of the inflationary pressures, uh, you know, is gasoline and you know, things uh trickle down.
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Diesel prices are over$7 a gallon, which we haven't seen those in a long, long time.
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And certainly that's going to increase inflation.
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And as a result, we're probably gonna see another rate increase before year end.
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But, you know, what what would end up happening if you have a$500,000 pension?
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The average worker somewhere is about four to five hundred thousand dollars for someone 30, 40 years at a major corporation.
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Doesn't matter what corporation, you could be at Coca-Cola, Honda, ATT, AEP, Anheuser Busch, Scott's Miracle Grow, just to name a few of them here locally.
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So, Mike, what does it mean when interest rates go up?
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What does that matter to me if I have a pension?
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Well, you know, certainly we know interest rates uh when they go up is gonna affect a lot of people with credit cards, automobile loans, everything.
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But what most people don't realize is when a segmented when these interest rates go up, it also affects segmented interest rates.
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And the higher the interest rate, the less you get when it comes to your lump
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sum pension.
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I don't care if you work at Honda, I don't care if you're working at Analyzer Bush, ATT, Coca-Cola, Scott's Miracle Grow.
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Any Fortune 100 company that offers a lump sum pension is going to be affected.
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Uh, it's not just, you know, uh the corporation, it's the employees.
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Uh that's who I'm worried about, is the employees.
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And, you know, if you lost$50,000 to$75,000,$150,000 in your lump sum pension, no fault of your own, just like we saw in 2022.
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We saw people on average lose$150,000, the average worker.
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We saw executives lose over$300,000 to$400,000 in the lump sum pension.
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This is real money, folks.
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And if you're on that fence, you know, I've worked 25, 35, 40 years at major corporation, maybe now's the time to really consider the facts.
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You know, what happens if these rates continue to go up?
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If you're eligible to retire from any major corporation, be on the lookout with these segmented interest rates.
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And most advisors don't have an idea as to what's going on when it comes to your lump sum pension.
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You know, we saw people back in 2022, the average worker lost$150,000 in a lump sum pension back in 2022.
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It's just, we were telling people to watch out.
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You know, we had a lot of people retire.
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Um, but now uh, you know, an executive who had a you know a$1.2 million pension lost on average$400,000.
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So you can imagine that, Gerald.
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$150,000 to$400,000 losing that, that's real money, right?
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Uh that's a very real change in your retirement plan.
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Yeah.
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And you know, what I tell people, a lot of major corporations is$1,231.
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You got to retire by$1231.
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You work at Anheuser Bush, you work at uh Coca-Cola, you work at American Electric Power, right?
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A lot of great companies here in Central Ohio.
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Uh, you need to retire by 1231, not January one.
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You go up by one date over, those new segment of rates are gonna affect your plane.
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If you work at at uh Honda, you work at uh Toyota, you work at Smuckers up in Worcester.
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Okay, that's 3-1.
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Again, you can work up to those, you have to understand each country plane is gonna be different.
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The majority of major corporations, the majority are 1231.
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There's obviously those one-offs we just talked about, but understanding your pension is paramount.
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And if we continue to see these segment rates go up, lump sums are gonna go down.
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And you know, I know a lot of people, you know, uh didn't retire back in 2022.
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Mike, I'm gonna continue to work.
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I'm gonna continue to work.
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Well, did you make up that$120,000 loss in your lump sum pension over the last three, four years?
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The answer is no.
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And now people are gonna be hit again with another$50,000,$75,000,$125,000 loss to their lump sum pension.
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Now it becomes how large is your pension?
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Are you at, you know,$500,000 and it's a 10% loss?
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That's$50,000.
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You know, if you're at one point, uh, you know, we'll just call it a million dollars and we're gonna lose uh 10%, again, that's$100.
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What if we lose$15?
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Now it's$150,000.
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So again, people need to understand the importance of these pensions.
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And we have a lot of clients that are now coming in for reviews because we're reaching out to them.
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And we wanted to really emphasize this to, you know, to our to our listenership.
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For we've been doing this, doing this for over a decade, helping people throughout central Ohio with uh, you know, our radio show, Your Money Matters, or financially speaking on MBC Ford.
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And you might say, Well, I don't have a pension, but you know what, my brother does, or my sister, or I got a neighbor.
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I should be talking to them about do you know what's happened to pensions this year?
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Remember back in 2022?
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And I talked to a lot of people who weren't eligible by that thing.
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Yeah, Mike, I remember, but I didn't look into it because I wasn't 55.
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But now all of a sudden you're telling me I'm gonna lose$50,000 to$125,000 in my lump sum pension.
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It's like, wow, it's eye-opening when you think about uh the amount of money people can lose when it comes to lump sum pensions.
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Let's talk a little bit about Social Security.
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The Cola for 2027, it won't be announced officially until mid-October the 14th is the exact date.
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But there are some estimates, as there usually are.
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Yeah, I think, you know, the estimate I saw
recently is about a 3.8 that we saw in 2026.
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So, you know, you know, having that little bit of increase is certainly gonna help out.
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But just like we saw last year, Medicare premiums went up.
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So, how much really of that increase is really gonna go to your bottom dollar or in your wallet, maybe not so much because Medicare continues to increase those costs.
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Yeah, just as your benefit goes up, so does the cost, right?
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So one thing that we always talk about this time of year is the open enrollment for Medicare.
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And here's something so interesting to me.
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Costco has teamed up with Scan.
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That's a nonprofit insurer, and they're going to sell jointly branded Medicare Advantage and Medicare supplement plans in a couple of states.
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And I bet they roll it out in more as this goes along.
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Well, I'm sure they are.
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I mean, uh Costco's into everything.
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They sell cars, uh, want to get your tires done.
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Uh, you know, as a member, that network becomes more and more valuable.
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I remember years ago, it used to always be AARP, remember that.
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Um, you know, and uh I'm I'm sure that uh ARP is still uh paramount, but uh it seems like uh Costco is getting to every uh facet when it comes to planning uh vacations.
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I know my wife uses that for getting cars or a travel vacation, if you will.
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But you know, one of the things I really stress, you know, when you start looking at some of these, you know, a lot of people try to get into, you know, running chat GPT or Claude or, you know, some of these chatbots really, you know, they don't have your doctor network information or prescriptions or, you know, uh formulary information, you know, you know, you're not gonna really have it personalized to your overall plan.
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And that's one of the things I really stress to people is to be a little more cognizant of some of those things, you know, when it comes to these open enrollments with Medicare.
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Well, that is a good point.
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Yeah.
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Yeah, work with someone local.
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Yeah.
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Because I guess AI can really help us maybe narrow it down.
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But when it comes to the final choice, there are some things that you really have to consider carefully.
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It's not going to replace uh an advisor, if you will.
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Uh, some people think, well, I can do a robo advisor.
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Robo advisor's been around forever.
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Uh, you know, I had this uh this guy that we're working with uh from a major credit union, and uh he used a uh, you know, a flat fee group, you know, that's online for the last year.
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He's 100% on equity, he's only averaged four and a half percent uh rate of return.
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I'm like, how can you be 100% equity only average four and a half percent when the market's up 12, 13%?
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So, you know, obviously just because it's cheap doesn't mean it's gonna be uh in your best interest.
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And when you're working with someone that's working on a flat fee or some AI platform, you know, they don't care about the relationship.
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It's just about a number and a fee, right?
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Uh, you know, I've seen situations where a gentleman had three and a half million dollars and uh he's using a group and he's getting charged$8,500 a year and they're not doing any trading for him, not doing anything for him except when he wants to call in to talk about something.
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Uh he's got him on retainer.
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But I, you know, I just don't get some people where, you know, people get to the point where they're so conscious about fees.
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And I tell people, look, we charge a very reasonable fee.
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Uh we don't overcharge our clients, you know, we're managing over four, you know,$400 million of assets, you know, for our clients throughout uh here in the U.S.
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And we continue to grow, but uh nothing's free.
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You know, people think that they have their uh 401ks that they're free.
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Uh you get charged internal fees, expenses.
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You can be charged anywhere from 40 to 75 basis points and fees just in your mutual fund from your corporate 401k or 403B.
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Nothing's free.
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Don't look at ChatGPT or some of these uh AI um, you know, softwares to you know differentiate the differences.
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It comes down to the planning, the advice, so many different things.
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What about advanced tax planning?
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We're not just talking off conversions.
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You know, what if I'm a business owner?
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What are some other things I can write off, right?
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Or, you know, what if I want to get into real estate?
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Bonus depreciation.
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Uh, we still have the rest of 2026 and 2027 where it's 100% bonus depreciation.
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There's so many different things
from a tax planning perspective that I can bring to the table on my team because I do these tax strategies.
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We've surrounded ourselves with uh, you know, CPAs who are attorneys who have masters in tax, as well as an estate planning attorney who has a master's in tax.
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And again, uh, those are hard to come by.
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We've built the team out to really help our high net worth clients, or maybe your high net worth client out there and you're working on the divisor that really doesn't know these strategies.
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Uh, they're really not advising you on those.
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You know, um, the small tweaks we make today can have a profound impact on your future uh down the road.
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And uh, you know, I I've had the opportunity to work with a lot of different clients throughout the last 30 years, and I've been really looking at numbers.
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And, you know, someone, you know, 10 years ago, you know, had$100,000 with us and now he's over$500,000.
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That's a pretty good rate of return.
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That's more than double, right?
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Yeah, a little bit.
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Yeah.
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You know, we we've we've had clients, uh, you know,$400,000 in the last three years, over a million.
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Uh just recent reviews.
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And I've had three and a half million dollar clients worth over six million today.
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Think about that.
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We work with a lot of different folks.
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Regardless of what your number is, we know how to grow your wealth.
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We know how to protect it.
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We can show you advanced tax planning strategies that later on down the road, you pay less than taxes, you know.
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And I think that's important for people to realize.
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We're not in every street corner like Edward Jones, and nor do we want to be.
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We want to work, we in fact, we can't work with everybody.
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You know, just because someone calls in doesn't mean there's going to be a right fit.
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We certainly've turned people away or they're not ready to retire type of thing.
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But, you know, we have the ability to manage someone's 401k or 403B when they're working.
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You know, a lot of advisors say, come see me, Cheryl, when you're ready to retire.
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Well, is that building a relationship?
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The answer is no.
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You know, so I really stress the importance of working with a team that can help you in the pre-retirement years and get you through in in and through retirement.
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I think that's one of the most important things that we do.
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You know, we have the distinctive manage to manage several 401k planes, 403Bs from Honda to ATT to Ohio Health, OSU Medical, uh, St.
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Anne's, Mount Carmel, you know, Scott's Miracle Grow, uh, Nationwide Insurance.
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I mean, a lot of major corporations here in Central Ohio that we can help get today.
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And if you're over 59 and a half, uh, we just had another gentleman come in from Nationwide Insurance, great guy.
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We're able to move his money from nationwide into his own IRA.
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We had a gentleman$1.2 million about a month ago from JP Morgan Chase.
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We did the same exact thing, move the money from the 401k.
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You're still working, you still get your company matched, nothing changes, but now you're in control of how you want that money uh invested.
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Do we want to have more safety?
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Do we want to have some type of guaranteed income where an annuity can come into play to provide uh because a lot of people don't have pensions anymore.
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And that's what an annuity is designed to do, provide lifetime income, or we can even provide growth, you know, with downside protection.
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So a lot of different things we can do for people uh who are still working uh with managing their 401k or 403B, or if they're over 59 and a half, there's a lot of people out there working.
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They've been delaying retirement.
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Uh, maybe now's the time to protect what you've worked so long and hard for the last 20, 25, 35, or maybe even 40 years.
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Maybe now it's time to work with a team that has the expertise that can really help you better understand your options and prepare you for retirement, even if you're two or three years out, or maybe you're 10 years out.
00:16:17.519 --> 00:16:21.279
You know, Mike, I'm thinking about the hard conversations here.
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I imagine you've had a few of those where you have clients that are just not quite financially ready and you have to give them that news.
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Certainly.
00:16:31.840 --> 00:16:34.159
And, you know, but that's what being an advisor is all about.
00:16:34.240 --> 00:16:35.679
And sometimes people don't like that.
00:16:35.840 --> 00:16:40.320
But I think a lot of people like the fact that I'm just uh I'm just to the point.
00:16:40.399 --> 00:16:40.960
You know what I mean?
00:16:41.120 --> 00:16:43.919
I don't sugar, I don't sugarcoat things, you know, based on the
numbers.
00:16:44.000 --> 00:16:44.879
Yeah, you can retire.
00:16:44.960 --> 00:16:53.360
Or, you know, based on the numbers, I think we need to work a little bit longer, but that's okay, you know, because we're we're helping managing their their 401k or 403b.
00:16:53.519 --> 00:16:59.679
Uh, there's no other firm out here in Central Ohio that's actively managing people's 401ks and 403Bs.
00:16:59.759 --> 00:17:05.279
So, you know, as an example, let's say your money's at Fidelity and your 401k, a lot of major corporations here in Central Ohio.
00:17:05.440 --> 00:17:06.480
The money doesn't leave the plan.
00:17:06.559 --> 00:17:08.000
We just open a brokerage window.
00:17:08.160 --> 00:17:11.759
We add our other proprietary uh fund managers.
00:17:11.839 --> 00:17:19.519
Uh, we even have proprietary funds with Fidelity Investments, you know, with advisors capital management, Pacific Financial Group, meter, you know, American funds.
00:17:19.599 --> 00:17:28.720
And uh we're actually outperforming one of our portfolios, our fidelity funds are actually outperforming the market net of fees, including our feet that's built into the into the fund expense.
00:17:28.799 --> 00:17:34.720
We're actually outperforming by one and a half to two percent net of fees on on 100% of all equity portfolios.
00:17:34.880 --> 00:17:40.480
So uh we can certainly deliver value and performance, you know, without uh without costing you.
00:17:40.559 --> 00:17:43.039
Uh, you know, I guess is the best way of putting it.
00:17:43.119 --> 00:17:46.000
And people need to realize, you know, nothing ever becomes free.
00:17:46.160 --> 00:17:48.559
Uh, you need to pay a fee in order to get the services.
00:17:48.640 --> 00:17:54.160
And we charge a very nominal fee to, you know, actively manage those, you know, 401ks and 403Bs.
00:17:54.240 --> 00:17:57.599
So, you know, certainly we'll get them on the what we call our roadmap to retirement.
00:17:57.680 --> 00:17:59.119
Cheryl, you know all about that.
00:17:59.599 --> 00:18:02.480
Mike, can we spend a few minutes on health care?
00:18:02.880 --> 00:18:04.720
I think it's such an important topic.
00:18:04.880 --> 00:18:10.160
And I want to start with something that I saw recently happen to a friend of mine.
00:18:10.319 --> 00:18:26.559
So she has ended up in what we call the sandwich generation because she is caring for her parents, but she still has not young children, but she still has children at home that she's supporting in some way.
00:18:26.799 --> 00:18:26.960
Yeah.
00:18:27.039 --> 00:18:30.000
Or, you know, kid or kids aren't uh quite 26 yet.
00:18:30.079 --> 00:18:36.480
And we see that happen with kids where they're in between jobs and they're still on mom and dad's uh health insurance.
00:18:36.559 --> 00:18:37.119
Yeah, I get it.
00:18:37.200 --> 00:18:37.359
Yeah.
00:18:37.440 --> 00:18:38.160
What's the question?
00:18:38.400 --> 00:18:39.279
Well, that's tough.
00:18:39.359 --> 00:18:46.400
So how do you
plan for your own future when you're caring for people on both sides of you?
00:18:46.720 --> 00:18:54.160
Well, you know, and I would say this because we get a lot of people who are getting into retirement who that's that's a big concern.
00:18:54.240 --> 00:19:00.880
You know, a lot of major corporations, there's there's a handful that we still work with that will provide retirement health care.
00:19:01.119 --> 00:19:08.720
But there's also on the flip side other corporations that once you retire and you're 62, as an example, like JP Morgan Chase here in town.
00:19:08.880 --> 00:19:11.039
I mean, they got the Pentagon, for God's sake.
00:19:11.119 --> 00:19:16.480
You know, it's bigger than the Pentagon here in Central Ohio, and they don't provide retirement health care for their associates.
00:19:16.720 --> 00:19:20.799
And if you think about that, that's a big deal for a lot of people, especially as we get older.
00:19:20.880 --> 00:19:27.200
Maybe we're not in the best of health, and maybe we got kids that are still in college or, you know, whatever the situation may be.
00:19:27.359 --> 00:19:32.400
Uh, you know, I stress the importance of that because uh healthcare is one of the biggest things.
00:19:32.480 --> 00:19:41.200
And sometimes that's when we tell people don't retire, because you know, maybe they don't have a lump sum pension, or maybe they get into a situation where they need that retirement health care.
00:19:41.359 --> 00:19:43.279
I know Battel Institute is another one.
00:19:43.440 --> 00:19:48.319
We have some people working over Battel and they didn't take the buyout back in uh 2019.
00:19:48.559 --> 00:19:52.000
So as a provision, they ended up losing their retirement health care.
00:19:52.319 --> 00:19:58.000
So things can change with a lot of major uh corporations, nonprofits throughout uh the US.
00:19:58.160 --> 00:20:04.480
And understanding healthcare is paramount because if you don't have health insurance, then all of a sudden something happens to you.
00:20:04.559 --> 00:20:07.440
You know, you have a major health issue like a heart attack.
00:20:07.599 --> 00:20:09.759
Unfortunately, I had one when I was 38 years old.
00:20:09.920 --> 00:20:11.279
It had the widow maker.
00:20:11.440 --> 00:20:12.640
Uh, it was hereditary.
00:20:12.720 --> 00:20:16.640
You know, my brother had it, my nephew had it, I had it, and uh one of those things.
00:20:16.799 --> 00:20:23.440
But I remember looking at the bills, and just for one or two days in the hospital was about$150,000 for a stint.
00:20:23.519 --> 00:20:24.319
Can you imagine that?
00:20:24.559 --> 00:20:27.839
What would that do to someone financially if you didn't have health insurance?
00:20:28.000 --> 00:20:39.599
But you know, I feel those people who are in that situation, but that's one of the things that we do is we evaluate people on the entire picture, not just their assets, but okay, if you did retire, does your employer provide health insurance?
00:20:39.759 --> 00:20:41.279
If not, what is it gonna cost?
00:20:41.519 --> 00:20:47.599
Or maybe you decide to leave XYZ Corporation because you're just tired of working there because you've been there 30, 35 years.
00:20:47.839 --> 00:20:52.559
And the expression I've learned throughout 30 years with my clients, you're gonna laugh at me, Cheryl.
00:20:52.720 --> 00:20:53.599
I know you're gonna laugh at me.
00:20:53.759 --> 00:20:58.960
All right, but I get this all the time from my clients is Mike, I'm one bad day away from retiring, right?
00:20:59.039 --> 00:20:59.279
Uh-huh.
00:20:59.440 --> 00:21:02.240
Someone, someone makes me mad, someone makes me upset.
00:21:02.400 --> 00:21:04.720
Mike, help me file that paperwork and get me out of here.
00:21:04.960 --> 00:21:05.279
That's right.
00:21:05.359 --> 00:21:05.599
That's it.
00:21:06.319 --> 00:21:08.640
We've actually had clients do that, believe it or not.
00:21:08.799 --> 00:21:13.759
But understanding that health insurance piece is critical and it can become a drain.
00:21:13.839 --> 00:21:26.799
You know, if you're taking care of your parents and then your kids need assistance, I often tell my clients who do retire, because a lot of the corporations will add additional premiums, like six, seven hundred dollars a month for a kid that's 22, 23.
00:21:26.960 --> 00:21:29.200
I said, you know, have them go on the university health insurance.
00:21:29.440 --> 00:21:30.559
It's a heck of a lot cheaper.
00:21:30.640 --> 00:21:31.279
You know what I mean?
00:21:31.440 --> 00:21:37.359
Or tell them to go on the exchangehealthcare.gov, just get a real high deductible and you know, pay$100,$200 a month.
00:21:37.440 --> 00:21:41.200
It's heck of a lot better than paying seven, eight hundred a month for your dependent son or daughter.
00:21:41.359 --> 00:21:42.160
See what I'm getting at?
00:21:42.319 --> 00:21:52.079
So there's a lot of different ways that we look at helping people retire without having, you know, two, three, four thousand dollars in healthcare insurance brands from their previous employer.
00:21:52.400 --> 00:21:56.640
We had to call timeout on that because that just becomes ridiculous in you know, that type of scenario.
00:21:56.880 --> 00:21:57.119
Yeah.
00:21:58.000 --> 00:22:04.400
And there's a a one big Word that kind of hangs over your head, and that's guilt.
00:22:04.559 --> 00:22:12.480
And you feel guilty about planning for your own future when you know other people need you.
00:22:12.720 --> 00:22:18.640
But at what point do you have to put yourself first or you know, you you and your spouse first?
00:22:18.880 --> 00:22:24.480
Well, you know, I say you have to do that all the time because, you know, at the end of the day, your kids aren't going to help with your retirement.
00:22:24.720 --> 00:22:26.000
Same with, you know, parents.
00:22:26.079 --> 00:22:31.759
You know, I've seen situations I knew growing up, we took care of my nonna, my mom's uh mother.
00:22:31.920 --> 00:22:40.480
And uh it's great that we can do that, but it gets harder and harder today when you have two family, you know, two uh parents uh both working just to make ends meet.
00:22:40.559 --> 00:22:41.200
You know what I mean?
00:22:41.440 --> 00:22:49.279
And you know, it becomes a situation where, you know, just taking someone, you know, to doctor's appointments, it can become a burden.
00:22:49.359 --> 00:22:59.599
And then you throw in your kids who are maybe they're going through college or maybe they just finished college and they really haven't found their first job and they're they're back home with mom and dad living in the basement.
00:22:59.680 --> 00:23:05.200
Uh, trust me, I did that with my kids, but now all my kids are off and having their own jobs and their own families.
00:23:05.359 --> 00:23:09.440
Uh, we all do what we have to do, but you also have to draw the line uh with kids.
00:23:09.599 --> 00:23:14.799
I've had to make a lot of tough decisions and you know, so that it doesn't uh affect uh me.
00:23:14.960 --> 00:23:21.279
You know, there's there's a passage of time when kids have to realize they gotta, you know, you gotta kind of push them out of the nest, you know what I mean?
00:23:21.359 --> 00:23:25.680
And you know, it's a tough uh situation to be in, but you know, it was the best thing.
00:23:25.759 --> 00:23:31.279
Uh and I've had my my boys come back to me and say, Dad, even though that was a tough time, uh, I needed, I needed that.
00:23:31.440 --> 00:23:33.680
I needed for you not to be that safety net.
00:23:33.759 --> 00:23:35.359
And trust me, I know how people feel.
00:23:35.440 --> 00:23:36.000
You know what I mean?
00:23:36.079 --> 00:23:41.359
I need to help my son or my daughter, but they'll land on their feet, they'll figure it out, you know, and that's that's that's part of being a parent.
00:23:41.440 --> 00:23:49.920
And trust me, it's not easy because at the end of the day, they're grown children and they have to start behaving like grown adults, you know, and that's uh part of being a parent.
00:23:50.000 --> 00:24:08.559
And you know, uh hopefully um, you know, I have a client all the way out in Iowa, and uh not only do they take care of their kids, they got grandkids they're taking care of, and there's like they have this small little home that they need to remodel and uh not to get into too much of their situation, but they got like eight or nine people living with them.
00:24:08.640 --> 00:24:11.599
They're not even helping out paying rent or paying utilities.
00:24:11.680 --> 00:24:14.000
And I said, look, you gotta make some tough decisions.
00:24:14.559 --> 00:24:20.160
You have to time to move out, or you need to start, you know, paying, you know, 500 to 800 a month.
00:24:20.240 --> 00:24:20.799
You know what I mean?
00:24:20.960 --> 00:24:22.160
But they refuse to listen.
00:24:22.240 --> 00:24:22.880
You know what I mean?
00:24:23.039 --> 00:24:25.119
You know, and again, kids shouldn't be entitled.
00:24:25.279 --> 00:24:26.000
You know what I mean?
00:24:26.160 --> 00:24:29.839
Uh, we all want to help our kids, but you we got to take sure we take care of you first.
00:24:30.079 --> 00:24:32.640
You mentioned safety net a minute ago.
00:24:32.880 --> 00:24:33.039
Yeah.
00:24:33.279 --> 00:24:42.079
And it made me think about people who think of a potential inheritance as their safety net in the future.
00:24:42.240 --> 00:24:51.279
When you're putting together a retirement plan, do you factor in inheritance or do you say, you know what, let's make our own plan?
00:24:51.440 --> 00:24:55.119
If you get that inheritance, it'll just be, you know, gravy on top.
00:24:55.359 --> 00:25:00.079
Yeah, I don't uh I mean, we always ask that question if they anticipate inheritance.
00:25:00.240 --> 00:25:01.440
And some say they're unsure.
00:25:01.519 --> 00:25:03.759
Some say, yeah, I'm gonna inherit a lot, a couple million.
00:25:03.920 --> 00:25:05.759
Okay, we'll we'll work with that.
00:25:06.000 --> 00:25:11.039
At least we know that later on down the road, but we don't plan on it because who knows what could happen.
00:25:11.119 --> 00:25:14.079
What happens if mom or dad need long-term health care, right?
00:25:14.319 --> 00:25:21.599
They could have a lot now, but that can, you know, if you when you're spending a hundred and hundred, hundred and fifty thousand dollars a year for retirement healthcare, you know, that can go real quick.
00:25:21.920 --> 00:25:23.200
So it don't, you know, it all depends.
00:25:23.359 --> 00:25:34.480
But uh, you know, I've had situations where, you know, I had a buddy of mine that I grew up with and his dad lives down in Naples, Florida, and great, uh, you know, good guy, but you know, struggling, having a lot of issues.
00:25:34.720 --> 00:25:37.759
He said, Mike, when, you know, when my dad passes, I want you to manage the money.
00:25:37.839 --> 00:25:39.599
It's a couple million dollars, blah, blah, blah.
00:25:39.680 --> 00:25:42.240
And I'm just like, why don't why don't we start working on your retirement?
00:25:42.400 --> 00:25:43.839
Meaning you start putting money aside.
00:25:43.920 --> 00:25:47.440
Let's not worry about what dad's going to be leaving you, you know, type of thing.
00:25:47.599 --> 00:25:48.559
You know, people need to grow up.
00:25:48.640 --> 00:25:53.039
You know, you're 50 years of age or you're 60 years of age and you're relying on inheritance from your parents.
00:25:53.119 --> 00:25:54.559
And sometimes I scratch my head.
00:25:54.640 --> 00:25:55.359
You know what I mean?
00:25:55.519 --> 00:25:55.759
Yes.
00:25:55.920 --> 00:25:59.440
Uh, we're all adults, but you need to start planning for your own retirement.
00:25:59.519 --> 00:26:04.640
And if if, like you said, it's uh gravy on top, if that's the situation, then great.
00:26:04.720 --> 00:26:07.920
But let's not rely on that as part of your quote, financial plan.
00:26:08.160 -->
00:26:17.440
Mike, I saw an article in Market Watch, and it was uh a letter a grandparent had written saying, I plan to leave money to my grandchildren.
00:26:17.599 --> 00:26:25.440
However, I'm going to make a stipulation that before they get a dime, they pass a financial literacy test.
00:26:25.599 --> 00:26:26.799
What do you think of that?
00:26:27.119 --> 00:26:27.519
Wow.
00:26:27.839 --> 00:26:29.440
Man, I want to give me that article.
00:26:29.519 --> 00:26:30.000
I want to read that.
00:26:31.680 --> 00:26:32.319
Tell their kids.
00:26:32.400 --> 00:26:33.519
But yeah, that'd be great.
00:26:33.599 --> 00:26:36.480
You know, let's face it, I know uh, you know, I talked with my dad.
00:26:36.640 --> 00:26:40.400
My dad's 92, you know, up in Canton, Ohio, retired fireman.
00:26:40.480 --> 00:26:46.240
And I remember even going through Ohio State, uh, talking to dad, like, you know, they need to be teaching this in high school.
00:26:46.400 --> 00:26:49.279
Stuff you learn in finance courses, they need to be doing it in high school.
00:26:49.599 --> 00:26:54.799
A lot of people I talked to said, Mike, there's no guidance when it comes to that.
00:26:55.119 --> 00:26:56.400
A lot of people are retired today.
00:26:56.559 --> 00:26:59.920
Mike, I'm a manager, I'm an engineer, you know, I da-da-da-da-da-da.
00:27:00.160 --> 00:27:02.160
But when it comes to finances, I don't know what I'm doing.
00:27:02.319 --> 00:27:06.000
And all of a sudden they got a million, two million dollars, you know, in their 401ks.
00:27:06.319 --> 00:27:09.920
For a lot of people, that's their biggest asset, their 401k, unless they have a pension.
00:27:10.000 --> 00:27:14.640
But let's face it, only 9% of corporations today even offer a pension anymore.
00:27:14.720 --> 00:27:15.200
Only 9%.
00:27:15.519 --> 00:27:16.240
It's crazy.
00:27:16.559 --> 00:27:22.559
Thanks again for joining us this afternoon for your money matters with Mike Martinez of the pension group.
00:27:22.880 --> 00:27:31.039
I'm Sheryl White, and Mike, I can almost feel that that soft breeze coming off the ocean right now.
00:27:31.200 --> 00:27:32.640
Describe what you're looking at.
00:27:32.799 --> 00:27:35.599
Do you do you have a a beautiful view right now?
00:27:35.920 --> 00:27:40.720
Well, the mountains here in Maui, the ocean, it's uh breathtaking.
00:27:41.039 --> 00:27:41.599
Breathtaking.
00:27:41.680 --> 00:27:43.279
Yeah, and I and I tell people this all the time.
00:27:43.440 --> 00:27:48.559
That's one of the goals for a lot of our clients is uh, you know, what what goals do you have in uh retirement?
00:27:48.640 --> 00:27:50.720
And a lot of our clients say travel.
00:27:51.119 --> 00:27:55.599
Uh uh, you know, and I'm I'm live here uh from our studios in Maui.
00:27:55.759 --> 00:28:01.519
I kind of joke around about that, but uh uh we'll be doing it again next week, but uh as well.
00:28:01.680 --> 00:28:07.359
But I really stress the importance to people because uh, you know, we all have goals, we all have aspirations.
00:28:07.440 --> 00:28:08.960
What are your goals in retirement?
00:28:09.039 --> 00:28:13.440
Uh I just uh had a review with my client last week, and it was the client we always talk about.
00:28:13.519 --> 00:28:18.960
And I said, you know, I talk about you guys all the time, I don't mention your names, but they absolutely love their cruise.
00:28:19.039 --> 00:28:29.599
They got to take seven of their grandchildren as well as your children, and had an unbelievable seven, seven or ten-day cruise around the Hawaii Islands, and they absolutely loved it.
00:28:29.680 --> 00:28:32.319
I mean, the joy that uh my clients got.
00:28:32.400 --> 00:28:34.799
It's not we just don't talk about uh numbers all the time.
00:28:34.880 --> 00:28:40.480
We talk about experiences, and uh that's that's you know, being part of uh client of ours.
00:28:40.559 --> 00:28:42.000
Uh, you're more than a client.
00:28:42.160 --> 00:28:51.680
We're you know, we're it's all about building relationships and setting those goals for you know retirement, setting those not just goals, but you know, trips people want to take.
00:28:51.759 --> 00:28:55.359
And now we're already talking about the next trip we're getting ready to help them plan.
00:28:55.440 --> 00:28:58.559
And, you know, how how would you like to do that from a tax-free uh basis?
00:28:58.720 --> 00:29:02.400
Pay for your trip, it's all paid for, and not to pay that much in taxes.
00:29:02.480 --> 00:29:05.440
Uh that's another way of uh doing some of these things.
00:29:05.599 --> 00:29:10.720
But uh, you know, just seeing them uh um last uh Friday was uh great.
00:29:10.880 --> 00:29:17.519
And uh I could see the the memories coming back of how great of a time they had, and they're looking forward to the next adventure.
00:29:17.759 --> 00:29:26.960
Mike, do you ever get photos from vacations or people send you a quick text or anything saying thank you or look at what we're doing?
00:29:27.200 --> 00:29:27.680
Absolutely.
00:29:27.759 --> 00:29:30.720
And it's not just the Facebook stuff, they'll say, Mike, I appreciate it.
00:29:30.799 --> 00:29:35.519
You know, hey, uh you just had another client, they were doing some scuba diving, sending me some pictures.
00:29:35.759 --> 00:29:39.839
I mean, the sunsets here and the sunrises are just amazing.
00:29:40.000 --> 00:29:42.559
Again, breathtaking is about the only word I can think of.
00:29:42.720 --> 00:29:46.559
In fact, I'll send one to you uh here in a little bit so you can see it.
00:29:46.640 --> 00:29:56.480
You know, it's it's one of those things where in the stars here at night, oh my goodness, that's you know, you do you you really don't experience stars until you come to like an island like this.
00:29:56.640 --> 00:30:03.359
You know, certainly it's uh one of those things we we you know like to do uh is to get feedback from our clients on their experiences.
00:30:03.519 --> 00:30:08.079
In fact,
a lot of our clients, I think we have seven or eight clients now have done an Alaska cruise.
00:30:08.240 --> 00:30:09.359
Highly recommend it.
00:30:09.440 --> 00:30:10.160
I haven't done it.
00:30:10.240 --> 00:30:12.400
It's on my bucket list for me and my wife.
00:30:12.559 --> 00:30:19.200
Um, but uh everything I continue to get back from clients about their trips to Alaska have been uh nothing but impressive.
00:30:19.519 --> 00:30:23.759
You know, I've had some friends do an Alaska cruise and they say the same thing.
00:30:24.079 --> 00:30:24.720
Oh, yeah.
00:30:24.880 --> 00:30:25.839
Yeah, definitely.
00:30:26.000 --> 00:30:42.720
So we need to point out, though, that you are on vacation and you came in to record this today because you had something very important that you wanted to talk with us about very timely, and that's that's the interest rate hike.
00:30:42.880 --> 00:30:45.759
And so I think maybe we should revisit that.
00:30:45.920 --> 00:30:56.079
We talked about it at the beginning of the show, but for those folks that are just joining us, could you tell us why that's so important and why you took the time away from that view to talk with us today?
00:30:56.400 --> 00:30:57.519
Yeah, well, I still got the view.
00:30:57.599 --> 00:30:58.319
I'm looking out the window.
00:30:58.720 --> 00:30:59.359
Okay, all right.
00:30:59.680 --> 00:31:01.279
Uh, you know, let that soak in.
00:31:01.440 --> 00:31:06.000
But uh when it comes to planning, uh, you know, I really don't take days off.
00:31:06.079 --> 00:31:11.599
You know, I really stress the importance of people having the information so they can make informed decisions.
00:31:11.680 --> 00:31:19.440
And uh if you guys remember back in 2022, people lost a lot of money in their lump sum pensions back in 2022 because of the increase in interest rates.
00:31:19.599 --> 00:31:21.680
But we haven't seen a rate increase in over three years.
00:31:21.920 --> 00:31:31.920
Federal chairman, the new Fed chairman, uh Kevin Wars just increased last week, but we already saw segmented increases, segmented interest rates increase prior to this rate increase.
00:31:32.160 --> 00:31:38.240
So uh we anticipated probably about a 10, maybe a 15% loss to the lump sum pension this year.
00:31:38.400 --> 00:31:41.039
Uh and what does that mean for the you know, the average worker?
00:31:41.200 --> 00:31:44.400
You know, you could work at uh ATT, you can work at Honda.
00:31:44.640 --> 00:31:45.680
What about nationwide?
00:31:45.759 --> 00:31:53.680
You know, what about Anheuser-Busch, American Electric Power, AEP, okay, Scotts Miracle Grove, just a couple of them here in Central Ohio.
00:31:53.759 --> 00:31:57.440
You know, what you know, what what if your lump sum's$500,000 and you lost 10%?
00:31:57.839 --> 00:31:59.039
That's$50,000.
00:31:59.279 --> 00:32:00.880
If it's$15, it's$75,000.
00:32:01.200 --> 00:32:08.000
What if you're, you know, chief engineer or an executive and you end up losing$150,000 to$200,000 of your lump sum pension?
00:32:08.160 --> 00:32:09.920
Would that change your mind in retirement?
00:32:10.160 --> 00:32:10.400
Huh?
00:32:10.640 --> 00:32:10.799
Okay.
00:32:11.039 --> 00:32:12.559
Yeah, yes, exactly.
00:32:12.799 --> 00:32:21.680
So, you know, back in 2022, a lot of people, the average, you know, associate, major corporations lost on average probably$100,000,$150,000 a year.
00:32:21.759 --> 00:32:25.279
I had executives, one guy out in California in particular, he's still working.
00:32:25.440 --> 00:32:27.680
He had a$1.2 million lump sum pension.
00:32:27.759 --> 00:32:32.640
And believe it or not, he lost$400,000 of his lump sum pension.
00:32:32.880 --> 00:32:34.880
Now, this isn't monopoly money, folks.
00:32:34.960 --> 00:32:36.559
I tell these people all the time, this is real money.
00:32:36.640 --> 00:32:38.000
You got to draw a line in the sand.
00:32:38.079 --> 00:32:42.880
You know, XYZ corporation, whoever you work for, has been a great company for all those years you work for.
00:32:43.039 --> 00:32:50.799
But if you're gonna lose 50 to 75 to 150 or even more in your lump sum pension, maybe now is the time to make the decision.
00:32:50.960 --> 00:32:54.000
Maybe it's time for me to retire from XYZ company, right?
00:32:54.240 --> 00:32:55.839
Doesn't mean you can't get a job elsewhere.
00:32:56.000 --> 00:33:05.119
I know a lot of our clients leave particular corporations and they go work elsewhere and they make now double of what they were making when they worked at their current employer.
00:33:05.440 --> 00:33:08.640
So these are some of the things we really help people evaluate.
00:33:08.799 --> 00:33:17.119
But if this trend continues, and Kevin Warsh, the Fed chairman, said he's not gonna be reducing interest rates this year due to inflation, and he may increase it again.
00:33:17.279 --> 00:33:23.039
So if we see another rate increase, could that I'm thinking we're gonna be pretty close to 10%?
00:33:23.519 --> 00:33:24.960
It might be as high as 15.
00:33:25.359 --> 00:33:30.960
I predicted back in 2022 during this number, people are gonna lose 30% of their lump sum pensions.
00:33:31.039 --> 00:33:32.079
That was pretty close.
00:33:32.319 --> 00:33:35.759
28% is where it came out, which shook out all the numbers.
00:33:36.000 --> 00:33:39.599
But we were telling people hey, this isn't something you gotta know when to retire.
00:33:39.680 --> 00:33:43.920
If you work at Anheuser-Busch, AEP, 1231 is your deadline.
00:33:44.079 --> 00:33:46.240
1231, not January 1st.
00:33:46.480 --> 00:33:48.960
If you work one more day, those new rates go into effect.
00:33:49.039 --> 00:33:50.160
So you gotta be prepared.
00:33:50.319 --> 00:33:56.960
If you work at uh Smuckers, if you work at Honda, Toyota, those are 3-1, March 1st.
00:33:57.119 --> 00:34:02.559
Now, the majority of major corporations it is 1231, but those other corporations you have till 3-1.
00:34:02.799 --> 00:34:07.200
But again, knowing when the right day to retire is paramount.
00:34:07.279 --> 00:34:10.320
You don't want to work one day past it because if you do, what happens?
00:34:10.480 --> 00:34:11.679
You lose all this money.
00:34:12.079 --> 00:34:15.280
And let's face it, what happened in 2022 was no one's fault.
00:34:15.599 --> 00:34:17.199
But we are educating people.
00:34:17.440 --> 00:34:19.519
And again, some of our clients decided not to retire.
00:34:19.679 --> 00:34:21.119
That's okay, that's your decision.
00:34:21.280 --> 00:34:23.519
We don't force any of our clients into retirement.
00:34:23.679 --> 00:34:30.239
We give them the guidance, we give them the education to make the most important thing, Cheryl, an informed decision.
00:34:30.480 --> 00:34:41.360
You know, that's a great point because we talk about the planning process, but really the final decisions come down to you, not you, Mike Martinez, uh to the client.
00:34:41.599 --> 00:34:42.400
It absolutely does.
00:34:42.480 --> 00:34:45.199
You know, and some people say, you know, I appreciate that, but I'm just not ready.
00:34:45.280 --> 00:34:46.400
I just can't do it.
00:34:46.639 --> 00:34:46.960
Okay.
00:34:47.280 --> 00:34:54.159
But let's say you lost 125,000 back in 2022, and now you're gonna lose another 50 or 75 or maybe 100.
00:34:54.239 --> 00:34:56.000
And people are like, you gotta be kidding me.
00:34:56.079 --> 00:34:57.679
I'm gonna lose more money in my pension.
00:34:57.840 --> 00:35:02.159
Now maybe this is the time to get those people, you know, over the threshold and say, you know what, I gotta retire.
00:35:02.320 --> 00:35:04.559
I can't continue losing more and more of my pension.
00:35:04.880 --> 00:35:06.079
Because you work so long and hard.
00:35:06.159 --> 00:35:10.480
I mean, people with 30 years, 35 years, are experiencing this.
00:35:10.559 --> 00:35:14.880
And it's not your fault, but we're here to educate people on what the options are.
00:35:15.039 --> 00:35:19.679
Uh, so again, if you have a question when it comes to your lump sum pension, again, most advisors have no clue.
00:35:20.000 --> 00:35:22.480
Ask your advisor, have you ever heard of terms second in interest rates?
00:35:22.559 --> 00:35:27.519
And I get, I bet you nine out of 10 times that advisor is gonna say, What are you talking about?
00:35:28.000 --> 00:35:39.920
And that's your red flag to say, you know what, I need to work with someone that understands me, my situation, my pension that can properly guide me into retirement.
00:35:40.079 --> 00:35:44.079
Because if that advisor is just managing money, they're just a commodity.
00:35:44.239 --> 00:35:49.280
They don't understand how to put together a financial plan, how to put together an income plan.
00:35:49.519 --> 00:35:53.760
You know, how's my social security and taxes, you know, gonna play into this?
00:35:53.920 --> 00:35:55.280
And what about legacy planning?
00:35:55.519 --> 00:35:58.000
You know, make sure you got a basic will, trust.
00:35:58.159 --> 00:35:59.519
What about long-term health care?
00:35:59.840 --> 00:36:04.320
Where we take a very comprehensive approach, what we call our roadmap to retirement.
00:36:04.480 --> 00:36:06.079
Uh, is it time for me to retire?
00:36:06.239 --> 00:36:08.719
Based on the numbers, uh, yeah, you can retire.
00:36:08.800 --> 00:36:11.280
Or based on numbers, hey, you need to continue to work.
00:36:11.360 --> 00:36:16.719
So uh those are some of the things I really stress the importance of uh when evaluating people's pensions.
00:36:16.800 --> 00:36:21.920
I don't want people to lose another$50,000 to$100,000 to$150,000 of the lumpstone pension again this year.
00:36:22.079 --> 00:36:26.800
You know, I think it's important for people to understand what's happened to pensions, what's happened in interest rates.
00:36:26.880 --> 00:36:27.920
Don't be caught off guard.
00:36:28.000 --> 00:36:32.480
Because remember, when it comes to your pension, you're$401, your money matters.
00:36:35.360 --> 00:36:44.719
Investment advisory services offered by One Resource Group, Wealth Management LLC, doing business as the pension group, an investment advisor registered with the Securities and Exchange Commission SDC.
00:36:44.880 --> 00:36:52.639
Content contained herein should not be construed as personalized investment advice or the offer for the purchase or sale of any security, insurance, or other investment product.
00:36:52.880 --> 00:36:55.679
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