Tom Hegna Thank you, great to be back.

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2 Male Speaker 1 Each and every week on the Financial Safari we like to bring in a special guest to help us find out what s happening in the financial world. Authors, artists, actors and financial experts; you never know who is going to stop by and bring their unique perspective to the Financial Safari. So let s send it to with this week s special guest. Take it away Coach. This week we have a very special guest. He is a return visitor to the Financial Safari. His name is and he has written a book. It s a tremendous book. If you haven t read it yet, you are really cheating yourself and your family. The name of the book is Paychecks and Playchecks: Retirement Solutions for Life. It is a great book. Tom. Welcome back in. Thank you, great to be back. Now, people don t really think about tomorrow as much as they should. They are always thinking in the moment and the risk of putting the seatbelt on in the car, because there is a risk of getting in a wreck and all sorts of risks in life. What is the number one risk for people as they approach retirement, and when they are in retirement Tom? There is a lot of risk in retirement. There is market risk. There is board return risk. There is withdrawal rate risk. I know you had Harry Dent come on and talk about deflation risk. There is also the risk of inflation. There is the risk; you might need long term care, you might die. There are a lot of risks in retirement, but there is only one number one risk. The number one risk in retirement is longevity risk; that you could live a long time. The reason that is not just a risk, it s a risk multiplier of all the other risks. What am I talking about? If you live to be age 65, and three years later you drop dead at 68, it won t matter if the market went down 3,000 points. It won t matter if you were drawing 10 or 12% a year, and it won t matter if you forgot to buy a long term care policy. You didn t live long enough. If you live to 85, 90 or 95, it is all those other risks that can wipe you out. If I had to summarize my book, my book summary would be that you ve got to take longevity risk off the table. You have just got to do it, and there are only a few products that can do it.

3 Let s talk about that. A lot of people are out there saying yeah, I know, I want to live longer than 68 and, if I do, I want to make sure what Tom is talking about; I have that in place. How can people make sure to take longevity risk off the table Tom? There is only a few products that can do it. A lifetime income annuity that you would buy from an insurance company can do it. A deferred lifetime income annuity that companies would call longevity insurance; that could do it, or a guaranteed income benefit rider from a fixed or variable annuity, but that s it. If you look at the products, what other products can do it, they all come down to one word and that is annuity. You have to have some form of an annuity in your portfolio because only an annuity can take longevity risk off the table. Stocks can t do it. Bonds can t do it. CDs can t do it. Managed money can t do it. Only some form of an annuity; and here s why. Only a life insurance company can issue an annuity. You know why? Only a life insurance company can issue a life insurance policy to be on the other side of that risk. The risk when you buy life insurance is that -- the risk to the insurance company -- you die too soon and they would have to pay a big death claim. The risk to the insurance company when you buy a lifetime income annuity is that you live a long time and they have to keep sending you these paychecks. Because they are on both sides of that risk, they can neutralize longevity risks for themselves and to their clients. Let me explain it this way; last year I spoke in Singapore and I was interviewed by Asian Insurance Review. The Asian Insurance Review said Tom, we have reviewed your material and we are very concerned about U.S. life insurance companies that sell guaranteed lifetime income. They said We believe that medical technology is going to allow people to live to be 100, 120 or 150 years of age. If you are guaranteeing paychecks for life you are all going to go broke. I just smiled and said Well, you ve got that half right; you are right, we will be paying a lot of lifetime income, but, guess what, we won t be paying any death claims because the insurance companies on both sides of that risk are protected from people living too long or dying too soon because there are products on both sides of that. They are the only industry that can take longevity risk off the table. Tom, it brings the point; I am an investment advisor and I have an insurance license as well, so I am on both sides of that table; the risk side and the safe side. When I go to industry events or I go to money management conferences I am amazed at how many people who are supposedly looking after their clients best interest are so negative

4 towards annuities in general, and won t recommend any of them to any clients. Tom, who are they really hurting when they do that? They are hurting themselves. What I would say is that if somebody out there is negative on annuities, here is what I do, I say, Really, so you are not going to take your Social Security Benefits, because Social Security is a lifetime income annuity; it is a guaranteed paycheck for life. Oh, you are not going to take any pension benefits that you ve earned? A pension is an annuity. It is a guaranteed paycheck for life. I think some annuities got a bad name. There were bad annuities out there. There were annuities with high fees and all that. That is not what we are talking about. We are talking about guaranteed lifetime income from an insurance company, no different than what Social Security offers or a pension offers; a guaranteed paycheck for life. There still is a lot of bad annuities out there. I think it is important that people get a true review of their portfolio and deal with someone who is not pushing one company s products. Do you agree with that? Yep, absolutely, I say you should deal with a financially strong organization. Among those financially strong organizations, go ahead and shop amongst those highest rated carriers which are best for you. The nice thing about a lifetime income annuity is that there are no ongoing fees. Most policies have a one-time policy fee of $100, $200 or $300 dollars, something like that, but that is one time only. After that there are no other fees. This is the kind of annuity that you have to have. I always tell people that you don t have to take my word for it. Just do the research. If they pick up a copy of my book, Paychecks and Paychecks, I put a lot of the research in the math and science chapter Dr. David Babel, Dr. Moshe Milevsky of Toronto, Dr. Amikam Yari of Israel. All of the research clearly states that you ve got to have some form of an annuity in your portfolio to take that longevity risk off the table. It s the number one risk in retirement. If you don t have a guaranteed income plan in place and, let s say, all your money is in the market and you are taking out a certain percent every year, if the market goes the wrong way there is no way your money will survive through that downturn. If you live a long time, will it? That is called the order of return or sequence of returns. When the market goes down

5 you have to take out more shares to liquidate and then those shares can never grow back. For years people said four percent was the safe withdrawal rate. That has been thrown out the window. Four percent is not safe anymore. Morningstar now has it as 2.8 percent. What does that mean? You need $1 million bucks in a portfolio to draw out $28,000 per year. How many people are going to have that much money to do that? The other thing is, in all of these withdrawal illustrations, they use Monte Carlo simulations. If you look at the bottom, if you have broker and they have an income plan for you, read the small print. It will say something like this. We have run 10,000 Monte Carlo simulations and there is a 70% chance your money will last you to age 90. The brokers all use age 90 in their Monte Carlo simulations. Well, age 90 fails 63% of the time. If people do live longer let s say people do start living to 100, 110, 120, 130 every one of those Monte Carlo simulations will fail; every single one of them. Not a single one of them could last to 120. That is where you are going to see big problems if people continue to live longer and they have been in these portfolios. They are going to run out of money. I call it retirement auto pilot. The only way to get that income that you never have to worry about outliving; not a percentage chance that you won t, but never living out your money no matter if you live to be 110 or 120, you need a fixed index annuity with an income rider. These days, Tom, there have been some tremendous advancements in the income planning world. People can get five, six, even seven percent returns on their money for an income in the future these days by shopping around with the right insurance company. What I say is that you only need a portion of your portfolio to do it. To kind of wrap this up, I will tell you a story. It is coming out in my second book, but I will kind of share it with your listeners. There was this family from the Northeast and they had never seen the desert before. They wanted to see saguaro cactuses, coyotes and lizards, so they booked a trip to Death Valley, California. They were going to go through California, Nevada and Arizona. They flew out in July. It was 126 degrees, but that s okay, they rented a big old Lincoln Continental with air conditioning. They were driving through the desert saying Oh, look at that, we haven t seen that. Oh, look at that. They were just enjoying the desert. As the day goes on, all of the sudden somebody notices that the tank is on E, and the next town is 100 miles away. The windows come down, the air conditioner goes off, the heat of the day pours in and now they start arguing. How fast should we drive? They are not viewing anything outside anymore. They are just arguing back and forth. The guy in this chapter is a guy by the name of Dick Austin. He said, That is the way it

6 is when you run out of money. People think running out of money is the day you run out. He said, No, it is all those years in retirement when you know you are going to run out. You just don t know when and you are staring at that gas gauge, your bank account or your investment account, and it keeps going down, down, down, and now you are fighting and arguing; not even enjoying retirement. He said, That is why you have to have a lifetime income annuity. It is like having a quarter of a tank of gas, guaranteeing that you will never run out of gas in the desert. Apportion your portfolio to make sure that your basic expenses are covered in retirement. We will call that financial cruise control to tie in with your story. How s that? Yeah, that s great. Folks, again, his name is, the author of the book Paychecks and Playchecks: Retirement Solutions for Life. Tom, as always, it s our pleasure to have you on the show. Hopefully you will come on again when your new book comes out. Thanks, Coach. Folks, thanks for listening to the Financial Safari today. Coming up next we are going to check in again with your local trusted advisor.

Tom Hegna is an economist, author, and retirement expert. He has been an incredibly popular industry speaker for many years and is considered by many to be THE Retirement Income Expert!

7 Tom Hegna is an economist, author, and retirement expert. He has been an incredibly popular industry speaker for many years and is considered by many to be THE Retirement Income Expert!. As a former First Vice President at New York Life, retired Lieutenant Colonel, and economist, Tom has delivered over 2,000 seminars on his signature "Paychecks and Playchecks" retirement approach, helping Baby Boomers and seniors retire the "optimal" way. He has condensed a large chunk of his considerable knowledge into 3 books. Paychecks and Playchecks: Retirement Solutions for Life. This has sold over 60,000 copies around the world. The top-rated Kindle version has been the #1 best-seller in its category for over 2 years. Retirement Income Masters: Secrets of the Pros. This book compiles the very best tricks of the trade from the very best retirement experts. And most recently, Don t Worry, Retire Happy! Seven Steps to Retirement Security, which is based on his popular Public Television Special. Haven t seen it? You can learn more here Tom specializes in creating simple and powerful retirement solutions. He has the unique ability to pump up a crowd, make people laugh and solve complex financial problems using easy-to-understand words, ideas and stories. He s been featured in Business, Forbes, Money Rates, and many other leading publications. He is available to speak with businesses, government organizations, professional associations, financial professionals and their clients across the globe.

Peter J. D Arruda Peter J. D'Arruda is President of the IARFC (International Association of Registered Financial Consultants), and has been in the financial arena for nearly 25 years.

8 Peter J. D Arruda Peter J. D'Arruda is President of the IARFC (International Association of Registered Financial Consultants), and has been in the financial arena for nearly 25 years. He is the founder at a financial firm designed to help his clients "Cross the street of life." At Capital Financial Advisory Group, LLC he and his team strive to help their clients take the worry out of living in retirement. Known as "COACH PETE" to most of his clients, Pete has made it his lifetime goal to assist his clients in achieving the levels of success they desire. He has authored 6 books and co-authored 2. Two of his books have reached the bestsellers list on Amazon. The most noteworthy book, Successonomics, is one that Coach Pete co-authored with Steve Forbes. But, by far, his favorite book just happens to be his most recent, "7 Baby Steps to a ridiculously Reliable Retirement Income" Each week he hosts the wildly popular, nationally syndicated, Financial Safari radio show, heard by millions each year. You can listen to past shows on itunes and by visiting FinancialSafari.com He has just been named to the prestigious Forbes Leadership Council and will be submitting at least 6 articles a year to Forbes for their readers' print and web enjoyment. He graduated from The University of North Carolina in is WINNER OF: 2 EMMYS 2 Quillys (best-selling author award) 3 EXPYS He is a proud father of daughter, Caroline, age 11 with his wife, Kim.

Chris Scalese Thanks for having me, Coach. It s truly an honor.

Chris Scalese Thanks for having me, Coach. It s truly an honor. Folks, this is the time of the show where we visit with a local or national author, someone who s made a difference in the financial world. His name is Mr.. Chris, welcome in. Thanks for having me, Coach.