Income for Life with the Nationwide Peak 10: Interview with Josh Lumme

8.11.23: Audio automatically transcribed by Sonix

8.11.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to the Active Wealth Show with your host, Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs first. He'll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host, Ford Stokes.

Ford Stokes:
And welcome to the Active Wealth Show Activators. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis, our executive producer, here with us. And we've got a very special guest. We've got Josh Lumme with Vertical Vision Financial Marketing. And Josh is a big time wholesaler. He works with the mayor of life and as well. And Mayor Life is one of the largest wholesalers of annuity and life insurance products and also Medicare supplement Medicare Advantage products. And I just wanted to bring Josh on today because I wanted to at least talk about why this is a good time to consider a bond replacement strategy and and also some different products out there that could help everybody out there in listening to the Active Wealth Show. And so, Josh, if you could just share a little bit about why is now a good time to consider replacing your bonds within your portfolio with a fixed indexed annuity?

Josh Lumme:
But the main reason the driving force right now forward is the interest rate environment is is just so good. And it's allowed these insurance companies to offer fantastic rates, fantastic incomes. I've been doing this for over a decade and I've never seen income payout percentages so high since I've been doing this. Right.

Ford Stokes:
And so I want to go through a little bit. We're going to use one product to kind of illustrate everything that the different parts of the annuity product on this interview. And what I'd like to do is can you talk a little bit about this nationwide peak ten and also some of the aspects? And a couple of the aspects are, one, you can get up to if you get the bonus plus income rider, you can get up to a 20% immediate bonus into the income account. I want to understand a little bit of what what that means. And then also they offer a 325% participation rate in the BNP Paribas Global Factor Index, which is a mouthful, but it is an index that follows global health care, and it's offered by that French bank and investment bank BNP Paribas. And then also the the 8% roll up what that means to somebody as well because an 8% annual roll up that's giving simple interest based on your your principal that you you put in or what they call a premium that you invest into the product, you can get 8% simple interest each year that you defer. So I wanted to try to understand from you, you're so knowledgeable on these products. Just if you could just talk about first, you know, the nationwide Peak ten and what it means to get a 20% immediate bonus. Yeah, the.

Josh Lumme:
20% bonus is strong. You know what that means to, you know, a client looking for a guaranteed income is that your your initial deposit is, is going to go up by 20%. So that's a big jump, day one. So if you're looking for income right away, that's a that's a great way to get ahead. And then if your timeline is a little farther, you're going to see that that income base grow by 8% a year and the internal lifetime income at whatever point, you know, it makes sense. But that's how it works. You know, you to yourself kind of walk through it before I did. But that's the basic mechanics there. Now, you asked about participation rates. You know, that gives us, you know, some some great upside potential accumulation to help with wealth transfer or just steady growth. And it's a great alternative from bonds. Yeah.

Ford Stokes:
So I mean, we've seen, you know, bonds are facing interest rate risk, which you know, in the Fed went up last month on on the interest rate again and with interest rates. So when you hold bonds and let's say you held bonds in January of 2022 well, new bonds in January of 2023 are be worth a lot more than what the bonds in January 2022 were because the bonds in January 2023 are paying a lot more. They're paying a much higher interest rate. And therefore, if you want to sell your bond, you want to get out of your bond, you're going to have to discount your bond. And so that is the basically the interest rate risk that people face with bonds and also reinvestment risk. But some of this stuff sounds too good to be true to a lot of listeners and prospects and clients that that we talk to. And it's really truly a hybrid product because you can invest your principal into, you know, the ten year US Treasury because they they have to reserve 100% of the money you give them. The annuity company does also a company like Nationwide, they're an A-rated carrier, A+ rated carrier. Um, so that's helpful. But what would you say to people that that don't understand the 325% participation rate and also a 1% spread that comes off? How does that work? And and how can you get more than what an index actually does in a given year with these types of products?

Josh Lumme:
Yeah, that's I get this question a lot. You know, it sounds too good to be true, 325% participation rate. And so, you know, for those of you listening, don't know what that means is you're going to participate at 325% of whatever that that change was in your index from when it started to the first year to the to the next year. And yeah, so let's say it's 10%. So you get 325% of that and 32.5% interest credit there. And so that's just to kind of put it in perspective of how big that is and how far we've come in the last 15, 18 months as far as where the interest rate environment was, because this participation rate in 2022 and the beginning of the year was around 150%. So yeah, now's the best time since I've been doing this for 12 years to purchase an annuity, not only for the accumulation. Action, but also for for the income.

Ford Stokes:
Yeah. I think it's also. Can you talk a little bit about the 1% spread that would come back off of that 325% growth?

Josh Lumme:
Sure. There's a there's a spread component. So, you know, in that example I gave at 32.5% was the 325% of that that change, they would subtract a spread from that of 1%. So then the credit would be 31.5%.

Ford Stokes:
Gotcha. So 31.5% over a two year protection period. If the if the index went up 10% over that, those two years would be pretty great. Can you also talk about how are your gains and your principal locked in with annuity products over one or 2 or 3 year protection period? And what do they call that in the industry?

Josh Lumme:
Sure, they we call that the reset period or the annual ratchet. And and the ratchet is a good way to think about that because you're going to get the interest credit. And when that locks it and when you get that, that locks in. And so no matter what happens the next year or two year period that you're in, the market could go down 10%. You're you're going to stay right there where you were and then and then you get to take advantage of the market when it goes back up without having to make up any ground.

Ford Stokes:
And so these.

Josh Lumme:
Products.

Ford Stokes:
Truly do. They never retreat. They only advance. Would that be fair to say? Correct. Yeah. And so also you just and the too good to be true part. One interesting article that you and I both saw last month on thinkadvisor.com is that people with fixed indexed annuities are looking to buy more fixed index annuities. It's actually like a majority. It's like 80 plus percent of folks who own annuities are looking to buy more of them, especially as they age because they want more income. One other point that I want to make. All of us, we talk to folks about, hey, if you're going to have your money in the market, which we do tactically managed portfolios and strategically managed portfolios, but we also try to recommend a bond replacement for it. Right. But one of the things we recommend in managing your money and it's really nice you've got this Alison Bell article up here. Thank you, Sam, for pulling that up with Americans with annuities want more annuities. But what I want to share is in the article, Alison Bell's article is 86% of the survey participants who owned annuities said they were somewhat or very interested in buying more, which is pretty remarkable. But what we recommend to people when you're withdrawing money from your portfolios is try to not exceed more than 4%. With these products, you can get much more than a 4% payout. Right? And also, if the interest and the participation rate continues to outpace the withdrawal rate, you won't lose money in your principal and you'll get higher rates of income beyond a typical 4% withdrawal that you could pull off in your own just by withdrawing money from, say, $1 million portfolio. You're going to take out 4%. You're taking out 40 grand. If you were to put money into the nationwide peak ten, it would be a considerable factor of that. Would you agree?

Josh Lumme:
Oh, yeah. I agree with a lot of what you're saying. So I want to touch on a on a couple of things. You know, that article that you're talking about, one of the reasons why so many people have annuities want more is because of how they performed. You know, for them, you know, during the, you know, the 7 or 10 years that they are in those previous annuities because they actually did outperform bond portfolios and studies over the last decade. So people are interested in that. They're easier to understand. And then to kind of go full circle to the income that you're talking about. Yeah, it's you people say 4% rule is a great way to go. You know, I hear that a lot of people are thinking 3.5%. And with an annuity like this nationwide peak was looking at it for a friend. And he's 70 years old and he's got $100,000. And it was a $7,400 a year payout at 7.4%. So the insurance companies are able to offer something that no other investment can offer, which is lifetime income at a much higher withdrawal rate. And they insure that for your whole life and think that that is one of the biggest reasons why more people are buying annuities now than than any other point in history.

Ford Stokes:
Yeah. We're going to talk more about a bond replacement strategy and the potential of investing in fixed indexed annuities with Josh Louis. Right. When we come back from the break. Thanks so much, Liz. The Active Wealth Show. We'll be right back.

Producer:
Thanks so much for listening to the Active Wealth Show. Make sure to rate us everywhere you listen to podcasts, including Spotify.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Producer:
Thanks for listening to the Active Wealth Show. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

Ford Stokes:
And welcome back. Activators, the Active Wealth Show on Ford Stockton. Chief Financial Advisor. I've got Sam Davis with us, our executive producer here on the board. And then also we are talking with Josh Lumme, vice president of Annuity Sales with Vertical Vision, Financial Marketing and a mer life and a mer life is a large actually one of the largest distributors of annuity products or life insurance products and also Medicare supplement and Medicare Advantage insurance products out there. And I want to just check in with you. Josh, we had a pretty action packed segment, last segment, talking about a lot of things, specifically around one product called the Nationwide P10, which is a fixed indexed annuity product, a ten year product. It offers a bonus plus income rider if you want it. And I wanted to also just ask you again, so. What what is the rating for nationwide as an annuity or insurance carrier?

Josh Lumme:
Uh, they're rated A+.

Ford Stokes:
Well, that's great. And those rating agencies are Moody's and S&P. Is that correct?

Josh Lumme:
Yeah, there's Moody's, S&P and Best. And then there's a half a dozen other ones out there. But those are the three main. Gotcha.

Ford Stokes:
Yeah, that's right. I appreciate that. And then also wanted to talk a little bit more about. The nationwide Peak ten product before we go into a little bit more general as well. There. There's a two year protection period on this product. Can you talk to our listeners about what that means?

Josh Lumme:
Sure. So, you know, one of the more popular strategies you have is it's called a two year you call it two year protection period. We call it a two year reset best period from when we start measuring the index, um, you know, for that two year period. So if you start in January 1st of this year, it'd be December 31st, two years from now is when that ends. And then that's how we calculate that return. And so to you have one year, two year, some products you can do 3 or 5 year resets, you know, and there's there's some advantages to going with these multi-year strategies because the longer it is, the better the rates going to be. But also, if you go too long, there's a lot can happen. And you know, in a rolling 3 or 5 year period, so 1 or 2 years generally the more popular. Yeah.

Ford Stokes:
And people do like to see their statements at least once every two years. Yeah, I'm sure you would agree. Gotcha. Okay. And then also, so during that two year period, let's say somebody invests, you know, $400,000 in a in the nationwide peak ten fixed indexed annuity, let's say they've got a 6040 portfolio and it's suitable for them to put 40% of their assets into a fixed indexed annuity. So they've got $400,000. And then that starts the clock right on that BNP Paribas Global Factor index, and then they're going to look at it then two years later. Is that right?

Josh Lumme:
Yep. So and that's you know, there's 325% participation rate with with 1% spread. So that's how we that basically we use to figure out what your interest credit's going to be. And so whatever the change was from day one to, you know, two years from now, that's where we what we apply the participation rate and spread to. So, you know, if it was a 10% change over two years, apply that participation rate. So you're 32.5% minus the spread of one. And so it's a 31.5% interest credit.

Ford Stokes:
And I'm sure people would love to see, you know, over a 15.5% growth on their money in a over a two year mean each year, over two years or 31.5%. I'm sure that would be very attractive to people. And that's not guaranteed. Obviously. It depends on how that index does. Can you talk to us a little bit about the BNP Paribas Global Factor Index and what is that index?

Josh Lumme:
Yeah, it's a it's a proprietary index that Nationwide partnered with with BNP Paribas on. And it's what they call low volatility strategy. And so what it does is it rebalances, you know, between equities and bonds, depending on how volatile the the market is. Right? So, you know, it's going to be tied to some commodities and bonds, but then it's going to have, you know, be heavily tied to like the health care market And with an aging population, you know, that's a good sector to be in. You know, so a lot of people like having exposure to that. And it's all in one strategy. And you don't have to do anything. You set it, you forget about it, and you let then the index do all the work.

Ford Stokes:
Gotcha. Makes sense. Then also, Josh, who should consider a fixed indexed annuity as a bond replacement, whether it's age or also, you know, the amount of wealth they have and and and also what's suitable as a portion of their strategy.

Josh Lumme:
Generally speaking, you know, a lot of people associate annuities with with the senior market you know, folks that are, you know, 60 plus, uh, you know, but I'm seeing more and more annuity policies written on folks that are pre-retirees in their 50s or even somebody that's in their 40 or 45 that's left the job, had a you know, for one, they're rolling them into annuities right now because annuities are attractive from an income standpoint and protection and shoot I've I've considered one before because I can predictable guaranteed income at such a high rate right now. Uh that might not be there when I'm actually ready to retire. So sure, lock it in now. But, you know, to Answer your question, as far as like how much to put in of your net worth to put into an annuity, it's going to be different for for everybody listening. You know, it could be 10%, it could be 50, it could be as high as 70%, depending on what your your situation is. And what you need to think about is what do I have that that needs insured? We always think cars and homes, you know, Medicare and things like that, life insurance. But we forget about, you know, do we need to insure our income stream? Do we need to make sure that we have X amount coming in no matter what happens? Do I need to insure against the fact I have a 70% chance of needing some sort of long term care in the future? And so there's a whole slew of products out there that are tied to annuities that can protect you against things like that. And that's why it's such a big range of, you know, how much of your asset should you have? Gotcha.

Ford Stokes:
We are seeing younger and younger. We're seeing folks in their 50s are absolutely wanting to buy fixed index numbers because they're concerned about the market, they're bearish on the short term and they're bearish on the long term. And and if you are, you know, with it being a contractual agreement between you and the annuity company that you can't lose your principal and they're going to take 100% of the money, you invest, invest with them, they're going to put it into the ten year US Treasury. And that's considered one of the safer investments on the planet where they have defaulted on on paying out on those on those coupon rates and and giving your principal back. That's pretty good. Also financial reserve requirement on these because they are managed by the states they're regulated by the states are not regulated by the federal government. Fdic is is 3 to 10%. If you got over 100 million in assets in a bank, you got to they got to have 10% cash on hand for deposits. But the annuity companies have a much higher bar to crawl over, don't they?

Josh Lumme:
Yeah, they do. You know, they they need to have dollar for dollar. The, the amount of premium or cash value they have their liabilities. And so most carriers to to get a good rating you need to have 105% or in some cases I've seen it 110, 112%. So you know, dollar 12 for every dollar that's in, you know, it's way more stable than the banks where it may be 3 to 10%. Yeah, it's.

Ford Stokes:
A big difference. So we've only got like a couple of minutes left in this segment. Josh And you've been so kind and gracious with your time to do two segments with us. We really appreciate it. Can you just recap why people should consider a fixed indexed annuity and anything else you want to talk about the nationwide Peak ten.

Josh Lumme:
Sure. So you would start with safety, you know, ensuring your principal so you don't lose it. You do have the ability to take advantage of a market type like gains while being in a principal protected product. We talked about the 325% participation rate with the one strategy, and that's not the only one that has, you know, triple digit, you know, 300% are there's JP Morgan Chase, there's an alliance. Bernstein, there's S&P 500. There's so there's different strategies that we have. And then, you know, you know, I've specialized in accumulation over the years. That's where I've spent most of my time. But with rates right now, the payout percentage is being so high. These, you know, these annuities that used to take, you know, 15 to 16 years before you you got your your principal back in payments now. Now we're talking 12 to 13 years. And if you're 65, 70 years old and you're planning for a you know, 30 year plus retirement, that's huge because every dollar past that point, you know, is is is out of the insurance pocket, not yours. There's nothing else out there investment wise that that can do that.

Ford Stokes:
Yeah, I'd really appreciate your time, Josh. One thing we're going to do, we're going to have a bonus segment specifically on the Nationwide pick ten and go through it in detail on active wealth. Show.com. Go ahead and check us out at Active Wealth Show. You can check out this episode and we'll have that bonus interview with Josh Lumme right here this week. Or you can tune into it right now if you just go to Active Wealth Show.com. Josh, thanks so much for joining the Active Wealth Show today. We really appreciate it.

Producer:
Remember all of Ford's listeners receive a free financial consultation just for listening to the show. Visit ActiveWealth.com to learn more and schedule an appointment. Thanks for listening to the Active Wealth Show and subscribing wherever you listen to podcasts.

Producer:
Up any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered or if traditional annuitization payments are taken and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

Charlie Kirk:
Charlie Kirk here to tell you about. Ford Stokes, founder and CEO of Active Wealth Management. Right now for a limited time, Active Wealth is offering a financial consultation to Am 980. The Answer listeners. Absolutely free. That's a $1,500 value at no cost to you. Active wealth will show you the hidden fees you're paying. How to potentially save six figures by deleting taxes on your IRA during retirement visit ActiveWealth.com today.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of active wealth management.

Producer:
With the traditional 60 over 40 portfolio having its worst year in more than four decades now may be a great time to consider more than just stocks and bonds. Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to help you retire with peace of mind. Schedule your free consultation today at ActiveWealth.com. That's ActiveWealth.com.

Producer:
Investment Advisory services are offered through Brookstone Capital Management LLC a registered investment advisor.

Producer:
Like what you're hearing you can watch the show to visit YouTube.com and search the Active Wealth Show to watch clips from this program.

Ford Stokes:
We've got Josh Lumme here who's vice president of Annuity Sales with Vertical Vision Financial Marketing and a MetLife. And MetLife owns Vertical Vision and they're one of the largest distributors or wholesalers of annuities, life insurance, Medicare supplement, Medicare Advantage out there in the United States. And they've got, I think, 70,000 agents that write with them. And and I'm so glad that I get to work with you, Josh, and I appreciate your help with my practice and and also serving all of our clients because we care very much about our clients and we want to make sure we do a great job of protecting and growing their hard earned and hard saved wealth. Josh We could talk about the features of the Nationwide PAC ten, why somebody should consider it, who should consider it? And also I want you to dive in specifically on how the bonus works in that 8% roll up, which are really great features. In addition to that 325% participation rate.

Josh Lumme:
Nationwide, it's an A+ rated mutual carrier, so they don't report to shareholders, they report to the policyholders, which is important, I think, when when considering it an annuity purchase. Yeah. Anybody that is thinking about retirement that has assets, whether they're qualified or non qualified, you should should look into this. And there's a lot of reasons why a principal protection be the uncapped growth potential without the potential of moving backwards like we talked about on the show earlier. And then the lifetime income stream and in that is becoming more prevalent now more than ever with this product since we launched it a couple years ago. And so how that works is, you know, you say you put an initial deposit down of $100,000, you're going to immediately get a 20% bonus on your income base. So you're at $120,000. And then for every year you wait to turn on your income stream, you're going to see an additional credit of 8% for for ten years. And so it whatever point you want to turn on that income, you're going to have a payout percentage that that we use in a formula to determine what your what your income payout is.

Ford Stokes:
The 8% roll up is is one of those often overlooked parts of it. But if you were let's say you're buying an annuity at your 60 years old and you're going to retire at 65 or 67, if you could defer seven years, you're getting 8% a year, right? Josh From 61, 62, 63, and that's guaranteed into the income base, is that correct? Correct. Yeah. I mean, that's that's a remarkable situation. I work with a lot of manufacturing executives and they love things that are guaranteed their bedrock kind of kind of guys and gals and and what they they love is they love okay, I'm going to put this money in and I'm going to set it and forget it and let it go for a while. And I'm gonna keep working really hard for, you know, whether it's Goodyear or Georgia Pacific or whoever that folks that work with me and are even Cadbury Schweppes. Dr. Pepper You know, I've got former Goodyear execs that that have kind of gone out to the to the world and they really want to see things. They can depend on an A-rated carrier. They they they also want to be able to get a higher income than what they've been able to get in the past. They're also disenchanted completely with whatever their pension would have been from Goodyear. They're all taking lump sums on their on their Goodyear pension because they they they want their money to grow and that. Goodyear pension is a CPA and it's really good at paying your money back, but it's not good at growing your money because it's not tied to an index. Also, if you could, again, just to kind of remind everybody from the show, what is that 325% participation rate mean? What does a 1% spread mean that the company is going to take back? And also, how can an annuity company like nationwide, that's an A-plus rated carrier, offer a 325% participation rate and a 20% bonus on the money you give them.

Josh Lumme:
Our participation rate, that is how much of the change in the index that we're going to participate in. So if we're a 100% are and the change is 10%, we're going to get 10%. But if it's 325%, we're going to get 32.5%. And then at that point, then we apply the spread that takes it of 1%, takes it down to 31.5%. And so that's how you that's how you do the math. And and so, you know, so it's real simple. No matter what that rate is, if you choose one of the other strategies that's 315 or 3, you know, 305, you know, it's really easy to do to do that math. And the insurance companies, you know, with the just use of technology and things have been able to partner with these big institutions like BNP Paribas and design these these crediting strategies for their products. And and they they basically they buy options on it at a huge discount with the surplus they get on their their bond portfolio that's the safe money and and and that's so that's how they're you know they're getting to that 325% participation rate and and it's huge. So I've seen it work and it's only been getting better as technology gets better. So yeah. So the long winded explanation probably more than you're asking for, but I guess is that the point of this? No, not at all.

Ford Stokes:
I think that was I think that's probably one of the best explanations of what a participation rate and a spread actually are that I've ever heard. A couple of things. A fee is a fee that's there every year and they take money out of the account each year. A spread only happens when you have growth on the annuity. The interest rate credited, is that correct? That's correct. Okay. And also with this product, there's a 1% fee with the nationwide peak ten and there's a 1% spread. And so that helps them claw back some of the money. But they're giving you a 20% bonus on the front end over it. And then they're able to kind of get some of that money back over time, over the ten years of the product, because they've got to be able to claw back some of that bonus they're giving you. But it's really attractive to be able to get that bonus on the front end when you first invest your money, when you go from $100,000 invested to $120,000 in the income account, does that sound about right?

Josh Lumme:
Yeah, that's about right. And that's that's what I like about some of the income writers out there with bonuses like this, you know, from nationwide. It's for that client that has that immediate need or that need in that year that they're able to kind of leverage, leverage that rather than just only getting that 8% for a couple of years? Well, actually, you got 20% and 8%, right. So I think that's huge. And then, you know, of course, you know, having that big jump start on a longer time frame helps, too. Certainly does.

Ford Stokes:
Yeah. So again, we just want to be full disclosure because we want to talk about all the factors of this nationwide product. There is a 1% fee. They take that out each year, is that correct?

Josh Lumme:
Correct. Yeah. That comes out every year no matter what. And that's okay. And that's to be able to the fee they charge to be able to provide that that lifetime income stream.

Ford Stokes:
Okay but and but they do offer the 20% immediate bonus. Yeah. That goes to the income account. No questions asked. You don't have to qualify for it. You don't have to get medicals for it. You just get the money in the application.

Josh Lumme:
So all you.

Ford Stokes:
Have to do, that's great. And then also the 325% participation rate, you're better off being in this product if you want return than if you were just to buy, um, you know, buy into this index and try to get, try to go long just with the index. Would you agree with that?

Josh Lumme:
Yeah. And you know, part of it is, you know, a, the insurance companies these indices are they're proprietary for the most part, like 90% of them. So the only way you can get access to it is through that huge pool of customers that the insurance companies have. Um, you know, but as a, as an individual investor, you wouldn't necessarily be able to get that. You'd have to find something that's similar to that and invest something on your own. And yeah, that's a, that's a whole other segment.

Ford Stokes:
But no, you know, it's, it's good to explain. I just want to make sure that, you know, what potential clients and prospects need to know and see when they're considering the nationwide ten also. Josh, there's only like, I believe only like 3400 plus advisors out there that have access to the nationwide ten because it's only offered through a life and vertical vision.

Josh Lumme:
We're happy to have that partnership with nationwide and be able to offer that product. You know, it's a small group of agents out there and we think there's probably, you know, 200,000 licensed agents out there that could sell sell that product. There's, you know, a select few. It's almost, you know, not that we're hand you're handpicked, but it is good to know that we're managing a smaller segment of the agents out there. And it's and it's and we're happy to have that product because it's a it's certainly, you know, one of the top solutions out there.

Ford Stokes:
Yeah. It's great to work with a great company like Nationwide. That's an A-plus rated carrier. But also they offer a really attractive product. It's one of the best fixed indexed annuity solutions as a bond replacement thing. We're not advocating putting 100% of your money into one single annuity by any stretch. And it does vary like Josh, like you said on on our radio show, hey, you can go from 10% all the way up to 70 suitability. You know, really the their suitability departments and compliance departments are going to going to really look long and hard to make sure that the product is suitable for you and and it fits your situation. And also you know folks and prospects they they get a chance to make the decision on their own because it is their hard earned and hard saved money. But for me, I just think it's really attractive, especially for those 50 and 60 year olds that have got orphaned for one out there. And they're just wondering what to do. And then it hasn't done much and they want income for retirement. It's a really good idea. Also, income coming out of fixed indexed annuities that are not Roth based. They you will have an ordinary income tax rate placed against it, but it's the same type treatment as your IRA or your 401. K because that money grows tax deferred, is that correct?

Josh Lumme:
Yeah, that's correct. It's, you know, grows tax deferred. You know, for a lot of folks out there with the you know, if you're in your 40s and 50s and you have that orphan 401. K, now's a great time to consider a Roth conversion and nationwide product allows to to do that as well as a few other ones and there's some some good tax advantages to to doing that conversion inside of annuity that I'm sure folks want to give you a call. You could walk them through that. But it's yeah, that's kind of a really good, you know. Age range in a type of account to go ahead and pay those taxes now.

Ford Stokes:
It was really educational. We all loved learning about the different features of fixed indexed annuity products. It was great that we were able to kind of do a deep dive on the nationwide peak ten and that relationship with with the MetLife today. And it was really great to have a really nice solution that's available to our prospects and we just really appreciate your time today. Josh, thank you.

Josh Lumme:
Anytime. Ford Thanks for having me on.

Producer:
Josh Lumme was so gracious with his time forward. I think we all learned a lot about what's possible out there in the world of fixed indexed annuities and how you can use it to really generate that personal pension for you, your family and your retirement.

Ford Stokes:
Amen. And it's also great to see the participation rates are higher, the bonuses are significant. And yes, there's, you know, like a 1% fee involved, but there might be a 1% spread. But when they're giving you a 20% into the income account with the nationwide ten, that's a really good, attractive situation to consider. And if you are considering a bond replacement and you're not happy with what happened in 2022 with your portfolio and you're not happy with, you know, what's going on with the bond portion of your portfolio, I would strongly encourage you even urge you to go ahead and give us a call at (770) 685-1777. Again (770) 685-1777.

Ford Stokes:
This entire show is going to be about bond replacement strategy. And we have two big ones. One was the fixed indexed annuity you've heard Josh talking about or through the first three segments. We want to make sure that we went ahead and aired that bonus segment because it was just so good. We want want to make sure we shared it with the activators out there. And this this last segment we're going to focus on structured notes. And structured notes is another version of a way to replace bonds in your portfolio. And here's what structured notes are. Structured notes are financial instruments, which consists of two main parts combined to generate specific risk and return profile in their most basic form.

Ford Stokes:
Structured notes are investments that combine a low risk, low return component of bonds with a higher risk, higher return derivative on a select asset, often equities or equity indexes. For us, the what we do is we basically work with structured notes that are tied to the S&P 500, the Nasdaq 100 and the Russell 2000, all three of them typically together. So if any of those three indices is lose 30% of their value, then it would hit the trigger level and then your your bond principal would ride the market until a maturity date of 12 months. It's a these these structured notes are 12 months in length. And the ones that we work with, we like to work with the American style structured notes. They pay out a little bit more. And the reason is because that trigger level could happen any time over the 12 months. Most of the time, though, we've seen that the indices do not lose 30% of their value. One other thing we do to diversify risk, what we do is we invest in structured notes with five different banks over a five note ladder and five consecutive months with five different starting points to the indices. So that the premise there is if one of your structured notes hits the trigger level that then it's going to ride the market.

Ford Stokes:
Then the next thing is hopefully the next four won't go down another 30% and another 30% and so on. And so it's a good way for us to diversify the risk. So if you're going to invest in a structured note with us or structured note ladder with us, what we would do is do $20,000 notes over five months. So you have 20,000, one month, 20,000 the next month and so on through five months. And then you basically would go through a full 17 month period because you've got each one of them are 12 months and you're going to go five months out on your structured note ladder. It's a highly flexible basic model that makes it possible for investors to benefit from practically any price move in a specific underlying asset, be it stock index, currency or commodity. As a result, structured notes are often or commonly used as a portfolio enhancement tool to augment returns while limiting the risk of loss of capital. Because you've got a 30% principal buffer. As long as any of those three indices do not lose 30% of their value due to the highly customizable nature of structured products, the individual risk return profile of each note can be calibrated so the individual requirements of each investor are met.

Ford Stokes:
Structured notes are not about owning an underlying security or index, but rather about customizing and investors exposure to that underlying asset. Some of the situational uses of structured notes are, Here's what they are an investor wants to expose to an equity index, but wants to reduce some of the volatility of owning that equity index. And an investor wants the potential to earn a higher yield or coupon rate while limiting or eliminating interest rate risk. An investor wants to find investment strategies for different market expectations, whether you're bullish, bearish or sideways. And then an investor also wants to fine tune their portfolio in line with their risk profile, whether they're conservative, moderate, moderate, aggressive or aggressive. An investor wants to broaden their diversification and gain access to different asset classes, investment themes and market sectors. So that's really structured notes in a nutshell, and it's a way for you to replace the bonds within your portfolio. We think it's a smart move to take 10 to 20% of your overall portfolio and invest them into structured notes. We have structured notes that are offered a significant interest rate. You ought to go ahead and reach out to us to find out about the structure note we're offering for this month. All you've got to do is give us a call at (770) 685-1777 again (770) 685-1777.

Ford Stokes:
Or visit ActiveWealth.com and click that schedule a consultation button in the upper right corner And we also want to give a shout out to our long term listeners and our activators that came in to see us this week. I want to say hello to John and want to say hello to Patrick. It was great to spend time with you both, um, on Wednesday. Just really appreciate you guys listening to the show for, gosh, two plus years and then also coming in to meet with us and also potentially working with us. We just really appreciate our activators out there. And if you listen to the active well show for a year plus or six months plus or whatever, and you're an activator and you consider yourself an activator, somebody who listens to this Active Wealth Show, who wants to protect and grow their assets, who wants to do a great job at building a tax efficient, efficient and market efficient portfolio, then I would encourage you to go ahead and reach out to us at ActiveWealth.com that's ActiveWealth.com and click that schedule a consultation button the upper right corner or you can just call us at (770) 685-1777. Again our number is (770) 685-1777. And we really appreciate the time you're spending with us. Have a great week everybody.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your chief financial advisor, Ford Stokes at (770) 685-1777 or visit ActiveWealth.com.

Producer:
Investment Advisory services offered through Brookstone Capital Management, LLC. Bcm a registered investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
A purchaser should evaluate and understand all of the risks and costs of an investment in Structured Notes or SSNs prior to making any investment decision. A purchase of an RSN entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have the right to withdraw his or her investment prior to maturity, or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure documents for a structured note before investing. An investment in SNS is not FDIC insured and is subject to credit risk. The actual or perceived creditworthiness of the note issuer may affect the market value of Swns. Swns will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell SNS as a holder of SNS. Purchasers will not have voting rights or receive cash dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of SNS prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original purchase price and any sale prior to the maturity date could result in a substantial loss.

Producer:
Sns are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of SNS may be uncertain. Purchasers should consult their tax advisor regarding the US federal income tax consequences of investment in SNS. If a structured note is callable at the option of the issuer and the SNS is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the SNS. Are not FDIC insured may lose principal value and are not bank guaranteed. This material is provided for informational purposes only and should not be construed as investment advice or as an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively.

Producer:
And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk and there can be no assurance that any specific investment will be either suitable or profitable for a client's investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee. The occurrence of which could have the effect of decreasing historical performance results. Economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and types of securities held by the strategy. Not FDIC insured may lose principal value. No bank guarantee.

Producer:
In some cases, cutting costs can be as easy as adjusting the thermostat in your home. I'm Matt McClure with the Retirement.Radio Network . Powered by amerilife hot summers and cold winters can really put a dent in your bottom line by jacking up the cost of your energy bills. But there are some things you can do to reduce those expenses that won't cost you very much, if anything at all.

Sarah Baldwin:
Paying attention to when you're turning on appliances, when you're turning on the AC, if you have a thermostat that you can program setting that thermostat to a modest temperature instead of going straight to really, really cold. Looking at, you know, what kind of window coverings you have.

Producer:
That's Sarah Baldwin with the Think Tank Energy Innovation. Some other low cost ideas to reduce utility expenses, take shorter showers, wash your clothes in cold water, and regularly replace your Hvac air filter. And Baldwin says there are some other changes you can make that would take more money up front.

Sarah Baldwin:
Update your air conditioner to the most efficient unit. A heat pump. Air conditioner is going to be your best bet. You can also look at replacing windows and doors. Those can be a bit more costly, but can have huge benefits in the long term.

Producer:
Along those same lines, appliance manufacturers have put more emphasis in recent years on creating products that use less water and energy than older appliances. Those energy efficient appliances can save you a pretty penny. So are you being energy efficient and budget conscious? That's a key question to consider. And it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network Powered by AmeriLife. I'm Matt McClure.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you’d love including powerful integrations and APIs, upload many different filetypes, secure transcription and file storage, transcribe multiple languages, and easily transcribe your Zoom meetings. Try Sonix for free today.