A Magic Tool For Retirement – A Retirement Plan | The Retirement Income Show

Mark Elliot: Welcome to The Retirement Income Show. I’m Mark Elliot alongside the CEO and founder of Oak Harvest Financial Group, Troy Sharpe. Troy is also a certified financial planner. “We always talk retirement.” That’s what Troy and the team at Oak Harvest are all about. You can always find out more on the website, oakharvestfg.com. A great, great website, lots of information there, oakharvestfg.com. Office located right off I-10 and Bunker Hill at 920 Memorial City Way. If you have questions, you can always call Troy. We’ll give you that number throughout the program, it’s 800-822-6434.

There’s no cost, no obligation to chat with the team. They’re here to help. They just don’t know if they can help you until they hear from you. 800-822-6434. Troy now up to about 300 videos on the YouTube channel. Any topic you can think of really in the financial or retirement world, there’s a video on that topic. Just search Troy Sharpe, Oak Harvest, and you will find them. You subscribe, there’s no cost whatsoever. Watch them at your leisure. What do you want to know more about? There’s probably a YouTube video on there.

We’re going to talk a little bit today about one of your newest videos. You’ve been doing these for a while, Troy, about your retirement calculators. “Hey, I’m X, I’m 60 years old, I’m 50 years old, I’m 65 years old, I have X amount of money, how can I retire?” All that kind of stuff. We’re going to talk about some of that today. We’re going to talk about your MYGA annuity page is up on the website. We’re going to talk market inflation. Welcome to your show. We probably ought to start with what’s going on right now, inflation, market volatility, and what’s happening.
Troy Sharpe: Yes, it’s pretty rough out there. First, how are you doing, Mark?
Mark: Doing well, doing well.

Troy: Heard you got a new set of golf clubs there?

Mark: Well, we talked about your golf clubs at one point, and I really thought the i500s would be a great fit for you. The PINGs, they’re blade look, but they’re hollow, so they’re a little hotter, a little higher, and you went with it. Well, I’m like four sets down the road from those 500s that I played, and now I have the new PING, i525. They’re good, especially when you’re old like me. I can hit them high, I can miss hit them, they’re still pretty good. I like them.

Troy: Yes, I love the i500s. I mean, I’ve had them for a couple of years now. Higher, just like you said, a little bit more distance, a little bit more accuracy, and yes, so I enjoy them.

Mark: Any golfer listening will know that, “Wait, it can’t be my fault, it’s got to be the club’s fault.” Well, when things are going on like inflation and market volatility, interest rates rising, the Fed has raised a quarter percent, a half of a percent, three-quarters of a percent, and there’s no really sign that they’re going to slow down anytime soon on that raising of the interest rates, so your bond values go down. A lot of this, we can’t just go buy something different. There is no secret golden retirement tool that will help us. We have to have a plan.

Troy: Yes. I was going to say, actually, the magic tools, so to speak, is that financial plan and then having the discipline to stay committed to the long-term strategy, the long-term vision, the long-term plan that was put in place. If we look out 10 years from now, if you’re 50 years old, or 55, or 60, or 65 years old, and we’re looking out 10 years from now, this is going to be a blip on the radar, right? If you don’t really believe that markets are going to be higher in 5 years, or 10 years, then you absolutely should not have any money in the market, but do so at your own peril.

You do so at your own detriment because it’s been proven time and time again that it’s not about timing the market. This is the big mistake that so many people make, and this is why DALBAR does an annual study for 20-some years. On average, by about 2% per year, I think, is the last number I saw, the average investor managing their own money tends to outperform over long periods of time. It’s simply because they’re trying to time the market and not understanding that what really matters is time in the market.

Mark: You said they tend to outperform, you mean they–

Troy: Underperform.

Mark: Right?

Troy: Underperform. Yes, excuse me. The most recent study from 2021, the average retail investor underperformed the market. I wanted to say off the top of my head, it’s around 10% or 12%. In 2021, we had a really, really good year, but we were coming out of the pandemic. Retail investors actually didn’t do too bad in the pandemic year compared to the market according to the study. They were still behind but not nearly as much as they were in 2021. This is what happens when you get out of the market, is you then have to decide when is a good time to get back in. The problem with doing so is the market always recovers far more quickly than the economy.

Things are still murky, things still don’t feel good. You still have a lot of fears and uncertainty. The same things that encouraged you and helped you to pull that trigger to get out of the market, those things still exist, normally, three months, six months later when the market has already started its rebound. If you didn’t like those things being prevalent in the economy back then when you decided to get out, well, if there’s still uncertainty and there’s no clarity surrounding those items that caused fear and anxiety and made you to get out of the market, you’re probably not going to get back in.

That’s ultimately what happened in 2021 and how the average retail investor underperformed the market by over 10%. Now, here’s the kicker. Most people don’t care. Most people don’t realize how bad they actually did because they look down at their statements and they’re like, “Oh man, I made 14% this year. I made 16% this year.” Well, you cost yourself hundreds of thousands of dollars, probably, because of your trying to time the market. When the market did 25 or 28%, you can look down and say, “You know what? I did pretty good,” but you’re leaving so much money on the table, typically.

That’s part of why when you build a plan, so here your Oak Harvest Retirement plan, what we first have to identify is the timeframe that we’re working with, the amount of income that’s needed, when that income is needed. If you’re soon to retire or are already retired, we want to carve out a certain segment of your assets to not be subject to the volatility of the market so your lifestyle doesn’t change. Your income needs are taken care of.

Then with the other assets, if that’s $1 million or $2 million or $400,000, whatever that number is, the absolute worst thing you can do with your long-term money is take a short-term approach and try to navigate the ins and outs of interest rates and inflation in this sector versus that sector. The average investor who spent 20, 30 years in the oil industry or teaching, or as an engineer, you’re simply not equipped. You don’t have the experience. You don’t have the expertise. You don’t have access to the data.

Even if you did, it’s so complex that no one can time the market perfectly on a consistent basis. Now, hedge funds can’t do it, investment firms can’t do it, so the average retail investor absolutely can’t do it. It’s not about trying to time the market. It’s about how much time you spend in the market, and that’s how you compound wealth over long periods of time. That’s also how you put yourself in a much better situation.

1-800-822-6434. If you don’t have a retirement plan, if you don’t have a strategy of where your income’s coming from, how much income you should take, what are you going to do to reduce tax, these are the types of conversations that we have with clients, and we sit down. The number one thing that we do, I would say one of the most valuable things that we provide our clients, it really is behavioral coaching.

Even during this time, we have to have many conversations with many people. “Troy, I’m concerned. My long-term money is going down.” “Well, that’s okay, Mr. Client, because here is your short term money. This is where you’re getting your income from. This is what your plan looks like. Even with the drop in the market, you still have a 94% probability of success or whatever that number is.” Having those conversations, being able to back it up with data, showing the historical trends, what we believe is going to happen in the second half of this year and how that impacts you in your retirement, having a proactive approach to reaching out to clients.

Part of our mission is to provide world-class client service. What does that actually mean? If we break that down, it’s not just being there for you when you call us. It’s about having a proactive approach to reach out to you and to help you understand why things are happening, when we expect them to turn around, what are some of the factors that will happen that we expect to transpire that will contribute or be a catalyst to things turning around, but most importantly, how those things impact your specific retirement plan.

What’s going on out there? Is it jeopardizing how much income you can take in retirement? Is it jeopardizing how long your money will last? Is it jeopardizing or changing what we’re doing from a tax strategy standpoint? We have done a ton of Roth conversions for this year, taking advantage of this market decline for those clients of ours who have assets in the market and are invested in equities. Quite simply, there’s nowhere really to hide. Everything out there is extremely volatile.

When we have this opportunity where we have depreciated asset values, if it makes sense for you and it’s part of your tax plan, we can take those assets and we can move them over to the Roth. We pay taxes at a much lower figure. Let’s say we had 100 shares of Exxon. Well, I guess Exxon’s probably not a good example because Exxon actually is doing pretty well this year. Let’s say it was 100 shares of Johnson & Johnson, and it was trading at, let’s just say, $10,000 six months ago. Well, today it’s trading may be at $6,000 or $7,000. If we move those shares over to the Roth IRA, we fully believe 10 years from now Johnson & Johnson is going to be worth a lot more than it is today.

We did the conversion on those 100 shares not at the $10,000 market value six months ago. We got a discount. We were able to convert those shares at the depressed market value today. Now, I’m not telling you to go convert to Roth. I’m not telling you to buy Johnson & Johnson. I’m just giving examples of how you can take advantage of these market downturns if you have a plan in place that’s looking at not just the investments. The investments are one part. The investments truly aren’t even the biggest part of the overall probability of success in retirement.

Once you have your risk situation determined, your capacity, and your willingness, then we need to look at income. How much income do you need? When do you need that income? How are we going to increase that income over time? From there, once we have those identified, now we can really start to build out that investment plan. What are our short-term needs? What are our long-term needs? Now, we can really build out the tax plan because this is– We have some really good projections and assumptions in regards to how much income you need, when you need that income, and how the portfolio is going to be invested.

When times like this occur, periods of volatility in the marketplace, we can jump into action with a proactive approach to taking advantage of the tax opportunity that’s there. That’s converting some of these shares. It’s getting some of that money moved over. It’s all about having that comprehensive plan. That’s what the Oak Harvest process is about, is sitting down, getting to know you, building a relationship. Then what that means for you is that you have someone that has your back. You have someone that’s looking out for you, someone with an extremely talented team of hardworking, passionate individuals that care about your retirement as much as you do.
If that is something you would like to talk more about, have a conversation, see if you’re a good fit for us, see if we’re a good fit for you, then pick up the phone, give us a call at 1-800-822-6434. The opportunity is now. There is a ton of opportunity out there. We just need to be prudent. We need to be a bit cautious, but now is the time to make some positive change and take advantage of the situation that we’re currently in.

1-800-822-6434 and go to the website, oakharvestfg as in financial group .com. Check out the videos that we have there. Check out the content. Get to know us. Get to know the investment team, the tax team, the financial planners, the advisors. Get to know who we are first. One of the best ways to do that is through our YouTube channel. Mark, you said it earlier, we have over 300 videos right now. Get to know us. A lot of these planning strategies that I talked about here are on the YouTube channel, so check that out.

When you’re ready and you want our help and you want to start to make positive changes with your investment portfolio, your retirement plan, your tax strategy, have all those dominoes lined up so we can one by one knock them out and get a full plan in place for you. Give us a call, 1-800-822-6434.

Mark: We’re just getting started on The Retirement Income Show with Troy Sharpe, the CEO and founder of Oak Harvest Financial Group. We’re going to talk about our retirement calculator. We’re going to talk about a MYGA annuity page as well on the website. We’ve got a lot of things to get to. Stay with us. We’re back right after this.

Speaker 3: Oak Harvest Investment Services is a registered investment advisory firm. Troy Sharpe is an investment advisor representative and insurance professional. Investing involves risk including the potential loss of principal.