Mark Elliot: Glad you’re with us today for The Retirement Income Show, I’m Mark Elliott. I’m here– you don’t care who I am. It’s really about Troy Sharpe, the CEO and Founder of Oak Harvest Financial Group. You can always go to YouTube. We’ve been talking about the YouTube channel for the last couple of segments, search for Troy Sharpe and Oak Harvest on YouTube. You’ve got a ton of videos, there’s over 200 videos out there. I did it just by putting in Troy Sharpe YouTube and newest videos, and then they popped up. There’s just a lot of great information on the YouTube channel. Again, just search for Troy Sharpe and Oak Harvest on YouTube, and you can find all of those. There’s no cost. You subscribe, but there’s no subscription fee but that way you get the little bell telling you, “Hey, there’s a new video.” They’re doing– How many do you do every week you think, a couple? Troy Sharpe: I just release one per week. Perras, our chief investment officer, he does two per week, one’s a stock talk podcast and the other is news or noise.
Jessica now is– I haven’t told you this yet, Mark, but Jessica, she has started to record videos, and over the next few weeks, she’s going to start releasing some videos. One of the ones she’s going to do is going to be real cool. For those who don’t know Chris, he spent 20 years, our Chief Investment Officer. He’s a Harvard MBA, and he’s managed the number one mutual fund in the country. He’s managed money in multiple different market environments, ups and downs, and been quite accomplished throughout his career. As you can imagine, with that type of an engineering undergrad, Harvard MBA, 20 years in the institutional space, sometimes when he communicates it’s like, what did he say? The average person is, huh? It sounds good but what did he say? What does that mean? How does that impact me in my retirement? Jessica is going to do a segment, a YouTube video, and it’s going to be just that. She’s going to name it, That’s What He Said or This Is What That Means For You. It’s going to take something that Chris says either on the stock talk podcast or the news and noise one, and cut in, this is what Chris just said in normal people’s language, and here’s what it means for you. That’s going to be pretty cool. Jessica, she’s going to appeal to a much different demographic than I appeal to and that Chris appeals to. She just has a very, very powerful way of communicating in common sense terms what some of the more technical and financial aspects of retirement, what they mean for you, easy to understand. Really excited about that.
She’s also going to introduce this element of behavioral psychology and just understanding the human side of retirement, lots of interviews, it’s going to be really, really cool. Absolutely, it’s our biggest job. Typically, the man is the one who passes away first. Already, in this country, women control more than half of the wealth. I forget the exact statistic, maybe you know, Mark. I know Jessica knows, but something like 80% of– Mark: The numbers say, and this is kind of ballpark, right? Because probably the numbers might have changed in 2020 with the pandemic and all of that, but it was basically 80% of men die married, 80% of women die widowed, divorced, or single. I think at the end, age now is it’s about women, if they’re the same age as their husband, they’re typically going to live another six years, is what the average is right now. That’s the scenario. Troy: Yes, women they live longer. They typically are maybe a little bit younger when they get married, and 80% of women die single, widowed, or divorced. She’s going to, obviously, connect with women, but not just women, it’s just human beings. She’s going to do a really good job. I think it’ll be up to four or five videos a week that we’re putting out there, so powerful stuff. If you don’t yet subscribe to the channel, it’s only $42,000 a year. [laughs] I’m kidding. [laughs] Now, it’s no charge.
It’s just a YouTube channel, you subscribe, and all that does is keep you more connected to us. Like I say all the time, use it, learn. If you want to work with us, great, we’re here, but you don’t have to, it’s there for your enjoyment and your pleasure and your learning. If you say, “You know what, I didn’t know all this stuff. I needed to know all this stuff, and I want your help because I want to optimize my retirement,” give us a call. This is what we’re here for. We do have some requirements, but we’ll talk to you about that whenever you give us a call. Most importantly, we just want people who are serious about the planning. It’s not just investments, that’s one part of your retirement. Give us a call 1-800-822-6434, but definitely go check out the YouTube channel. Just search Oak Harvest, search my name, Troy Sharpe, and a lot of good stuff out there. Mark: Yes, absolutely. All right. Because the pandemic hit in 2020, and people started retiring earlier, my question to you is, are you seeing more and more people come into Oak Harvest that maybe are in their mid to late 50s, instead of the typical 62 to 65 area, kind of the typical retiree? Are you seeing more people that are even under 60 wanting to retire, which then causes some issues with healthcare, because Medicare don’t kick in till 65? Leave your job, do you lose your insurance?
How do we handle that? Are you seeing that? More and more people under 60 wanting to retire? Troy: Yes, we have seen that a little bit more. With the downturn in oil and gas over the past five to seven years, we’ve seen a lot of people, probably more so than other areas of the country, where at 57, 58, 62, people have been getting laid off. It’s been a difficult go for many years in the oil and gas industry. We are accustomed to those age groups coming in. A large part of what we do, and this is part of our planning process, remember, it’s investments, it’s income, it’s taxes, it’s healthcare, it’s estate planning, these are all under one roof. This is what we do. A large part when you’re under 65 years old is, “Okay, where do we get our income from? How much tax are we going to pay? How do we reduce that or optimize it, but then how are we going to pay for our health insurance?” Because we want to be at least covered for catastrophic needs prior to 65 when Medicare kicks in, but some people, they have higher prescriptions, higher, more frequent doctor visits, and you need a different type of healthcare type strategy.
Our focus is on the financial planning side. It’s a great example. We had someone come in recently, and again, I did a YouTube video on this not too long ago. I want to say was released probably just a week or two ago. Here was the situation. It was a couple, they were both 62 years old. They had about $1.5 million inside their retirement account, and only about 250,000, I’d say, outside of their retirement account. What does this mean? Well, first and foremost, if you have all of your money inside your retirement account, let’s say you’re a hundred percent in the IRA. You have very limited flex– You have no flexibility, actually, if that’s the case of where you can take your income from and what your tax bill will be. That means if you’re spending 75,000 a year and it’s all in the IRA, guess what? You have to go into the IRA, take 75,000 out, that goes on your 1040, your tax return. You pay income tax on 100% of that, and you have no flexibility to adjust your, or manipulate the income strategy in order to reduce what’s called your modified, adjusted gross income in order to qualify for a subsidy.
Health insurance for a 62-year-old person in this country is right around about a thousand dollars per month. You can get a better plan or a little bit worse plan, but that’s a pretty good estimate if you’re 62, you’re looking at a grand a month per spouse. Here was the situation. They had this money inside the retirement account, which when we did the analysis, when we did their tax analysis before they became a client and we extrapolated out into the future, they had a significant RMD problem because they don’t spend that much in income.
They were only spending, I want to say, around 60,000 a year. Relative to the money that they had in social security turning on later, it wasn’t a huge income need. To wrap this kind of story up, and I could talk about it for an hour, but here’s the cool thing. We wanted to tackle the Roth conversion. We wanted to tackle the tax infestation inside that retirement account because it made sense over the long term, but we also wanted to keep the health insurance premiums down. We didn’t want them to be $24,000 a year for both spouses. We’re actually implementing a new strategy next year to change the health insurance plan to go more towards catastrophic to reduce the premiums, but another story another day. We wanted to tackle the long-term tax problem.
We wanted to make sure healthcare insurance premiums were modest, but then also we had this question of living expenses. Where do we take the income from? In the non-IRA account, they had capital gains. Just like social security provides long-term benefits as far as taxation is concerned, so do long-term capital gains and dividends. Ultimately, we needed to generate $60,000. What we did is we looked at the comparison of taking out of the IRA versus the long term capital gains for income, we did about a hundred thousand dollars Roth conversion and all of this equaled into healthcare insurance premiums being cut in half from what they would’ve been paying otherwise if they kept going down the path they were going. We got that Roth conversion moved over and saved them about $15,000 a year in income taxes, because we took the gains from the non-qualified account, the non-IRA account, as opposed to the IRA.
We tackled the long-term tax problem. We decided to defer social security because that made sense with respect to their income and tax plan. Cut health insurance premiums down about a thousand dollars a month, and also provided the income they needed for living expenses. All of that income tax, that’s what we do here and that’s how we help them. Yes. I like to say we build the box around you, so thank you. [laughs] So much in this industry is really cookie cutter and there are a lot of good advisors out there, truth be told. Unfortunately, they work for, I don’t want to say, bad companies, but they work for companies where the company is, “This is our box. You either fit into the box or you don’t.” Even if you don’t fit into the box, guess what? We’re publicly traded. We have to put shareholders first, so it’s profits over people, and you just go into their box and nothing really is custom-built. I don’t think that’s the way retirement planning should be. It’s definitely not how your income planning, your tax planning, your investment planning, all of that needs to be custom-made for you and your situation. I think, more importantly, let’s get away from these antiquated mainstream norms where you’re simply 60/40 in retirement and you’re taking 4%, or you’re deferring your IRAs as long as possible and you spend down all of your bank money and non-IRA money.
That’s not the best for most of you out there. Most of the things that you’ve heard throughout your accumulation years, your working and earning years, most of those retirement euphemisms or tidbits or general conventional wisdom advice, they’re not right for you. What is right for you is a custom approach and that’s what we provide here. Again, go to YouTube, search Oak Harvest Financial Group. We put these planning scenarios, these financial planning cases out there to, one, give you an opportunity to understand what it is that you don’t necessarily know, but, two, give you an opportunity to get to know us. Maybe we’re right for you. Maybe we’re not right for you, but either way, you’re going to learn. You’re going to become empowered. You’re going to make better decisions with the knowledge that you gain. Go to YouTube, search Oak Harvest Financial Group, and if you’re ready to sit down and have a conversation, give us a call. 1-800-822-6434, Oak Harvest Financial Group 1-800-822-6434.
Announcer: 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.