Dick Duff: Retirement Breakthrough (Part 2)

Dick Duff’s February 2011 discussion with Coach Pete and Peter Richon continues. They explore retirement planning strategies and the practical examples behind Retirement Breakthrough. Call 800-661-7383 or text PLAN to 600-700. Transcript Automatically transcribed from this episode; timestamps are approximate. 00:00 And welcome back into the Financial Safari. Peter Rashawn here, along with published financial author Coach Pete D’Arruda, recently authored the book, Have You Been Talking to Financial Aliens? And Coach Pete, we are joined on today's program by another published financial author, whose most recent book is Retirement Breakthrough. And of course, I'm speaking of author Dick Duff. Yeah, it's a 45-year compilation of, it's a real comprehensive book, and Dick Duff is an attorney and a chartered life underwriter. So Dick knows what he's talking about, and he writes in simple ways to make sure that people can enact a retirement strategy at any time of their life that will be there for the rest of their life. Dick, I want to go into, well, first of all, welcome back in, Dick. Thank you. I want to go into some of the strategies specifically that you mention in the book and how people can, it's almost like a user's guide or workbook, how they can enact some of these strategies to benefit themselves for future income. 00:51 Well, I'll give you a couple that I like. I think the most interesting strategy of all is how to spend some of your money and accumulate the balance so that you're, after a period of time, you're back to where you started or thereabout. It is much more effective to simultaneously spend a sum of money while you are accumulating another sum of money than simply to live off the income. In other words, have a separate purpose for each bucket of money. You have various products or approaches to this combination plan. I call it split investment planning. One portion will be spent regularly via a payout annuity. A payout annuity is one that is a traditional annuity, which you'll find defined in Webster's as a series of periodic payments, usually over your lifetime. 01:41 Now, therefore, it is designed to be spent, while at the same time another sum of money is being sent forward. The main advantage of this is that when you liquidate a portion of your money in the form of income, only a part of it is taxable, a very small portion. And then while you send the rest of your money forward by letting it just simply be invested somehow in maybe a piece of land or another annuity that builds money, builds income, doesn't pay it out, it builds it. Or life insurance, if you want a legacy for your family. That money will accumulate if done correctly, basically without taxes. So you've really, really improved your financial situation. Dick, I call this the water wheel of money. 02:28 And if you've ever seen a water wheel, how it constantly goes, as long as there's water in the dam, the water wheel is always filling up with buckets and they keep going around and around. And that's what you can do in the financial world, too, isn't it? Well, yes. I mean, I assume that you thought this through like I have. You wake up in the middle of the night with a new idea on this very subject. I think it's the perfect, perfect plan for practically anyone that pays taxes. Because with the likelihood of increased taxes, this one turns the tax man on his ear because it is much more effective to take out your tax paid principal in the form of an income. Because that's already tax paid and therefore you've just cut your taxes. Dick, people used to do this with CDs. And this is what is traditionally known as a systematic income portfolio system, the SIPs back in the day. 03:15 But with CDs, of course, the taxes aren't as advantaged as what you're discussing. And with the low rates that are offered by banks right now, not really a way that's keeping up with inflation if you're doing it that way. Well, not at all. You know, I would look at for just an average situation. I don't mean average at all because everyone is unique. But you would take a sum of money and you might just say $300,000. $100,000 is dedicated to an income from a payout annuity. Another $100,000 might buy a $300,000 insurance policy. So you've taken care of the legacy that maybe improved your situation for your family. And the other $100,000 might be very conservatively invested in some form of deferred tax, tax-deferred arrangement. 04:01 It's just a possibility here. There are all kinds of possibilities. Dick, this is very exciting to me because what I usually do is I take the client's profile, what they have and what they want to do, and I present it to two different financial planning teams, two different salaried financial planning teams, one on the fixed side, no risk side, and one on the risk side. And I have them both put plans together. And then I do what we call a hybrid. I combine the best of both of those worlds together and establish an income plan for folks. Well, it sounds very good to me. And really, you're worth your salt. I mean, this is fun for us to do. But when we work for clients, for prospects, I say, and clients, the way I look at it, everybody's entitled to win, especially the client. And you look at it that way, I know. And I know you win, too, because you win alongside them. 04:48 And in terms of the psyche, possibly the standage or the altruistic look at this, I always like to have my clients win. And, of course, usually I receive a commission of some sort or a fee, but it's being paid by someone with a smile on their face. Well, Dick, I win by never having to say I'm sorry and also by seeing a smile on my client's face. And being invested in the Wall Street casino, unfortunately, Dick, clients aren't always winning, are they? Oh, no. And you just look at the brokerage statements that are still on someone's table. They aren't open yet. Even though we've had a run-up in the market, we've got to remember that this could come crashing down at any moment. And I'm not a negative person. I look at my investment, and I put on, in various ways, some kind of stop-loss things on them, because that means if the market goes up, I don't get quite as much. 05:35 But, you know, I mean, I'm concerned, and I should be, everyone should be, about things that are beyond your control, because they're being hatched right now, and you don't have one single say about the whole thing. In fact, right now, we're probably behind the curve. Yeah, Dick, not being negative at all, but you must prudently discuss any realistic possibility when you're talking about your future planning for your money. Absolutely. Or you may be, you know, you may not be doing your job, because it's not being negative. But just to point out, remember, back in 2004, or whatever the dates are, things can change, and I hope they don't, because I've got some money out there, too. Well, we are talking, folks, with Dick Duff. He's from Denver, Colorado. He's a lawyer and a chartered life underwriter and author of Retirement Breakthrough. 06:23 And if you'd like to get a copy of this book, you can go to retirementbreakthroughnow.com, or it's available at every bookstore I've seen has copies of this. What a great read, Dick. Any final thoughts you want to give our listeners about retirement in general? Well, I think you've got to stop and look at the income that assets can provide. That's the most important thing. It's not the assets themselves that lie around unused until, you know, you're gone. It's how to use very properly your assets to provide maximum income. I wrote this book pretty much altruistically. I've written several, and you yourself, you know, have written some books, Pete. And you either write a book to make a lot of sales and a lot of royalties, if that's possible. You may write a book to improve your ego or to get something there. 07:11 Or you write a book basically to help people. Now, I've always made pretty much the decision to help people. And I know that when I get emails like the one I got this morning, I got two or three of them this last week, about the book. That really means a lot to me. So I wrote this book not to wind people back to me or to make an ego point, but I wrote it to help. And if I can just do that with my remaining years, I'm 72 and pretty active, then I'll be happy. So that's the purpose behind this book. Dick, I've got a final question here for you. I think this is a very important question. There are plenty of people out here who are looking at the prospect of retiring in the near future or may have already retired. They had a career. They've been working full-time at their job, at their career. And when it comes time to make those important retirement decisions, they may spend hours on the Internet or maybe over the course of a few weeks doing some research on what their outlooks are. 08:07 Do you think that it is necessary to sit down with somebody who does this as a full-time job to have the benefits of that as opposed to going it alone? Well, you led me into the answer. I mean, the Internet's wonderful. I learned a whole lot on the Internet, but it's like, don't you want to sit down with your doctor when there aren't other patients out in the lobby and maybe just schmooze with him or her for an hour? How often do you get that chance? Tomorrow, by the way, I've got that chance. He says, we'll take an hour and we'll just do that. Nice doctor. Fabulous. And, yes, you want to find that advisor. You don't want to maybe just answer the phone call when someone's soliciting you. But your job, I say you, the planner, I don't mean the planner, I mean the citizen, the non-planner, is to find that advisor, someone who will sit down with you for that hour and just say, let's put our feet up on the table. 08:56 We may even turn on the radio and listen to some bluegrass music, which I love. And we're just going to brainstorm things with maybe even a chalkboard. We're just going to see what's going on. And, you know, if things work out, then that's what we're going to do probably for coffee or whatever. You know, I want to do that with you for, you know, two or three times a year anyway for the rest of my life. And until proven differently, that will be the way I'll look at it if you stack up, you know. So, yeah, you're absolutely right. You want, wouldn't you want someone who's kind of your partner on this, who's not always having to make a commission, but who knows that, you know, they're getting paid, the doctor gets paid, you know. So, yeah, absolutely, without any doubt. Folks, do your own research. Find out as much as you can on your own, but sit down with a competent professional to find out as well. And you can do that by calling 800-661-7383 on a complimentary basis to find out what your retirement future, your financial security could look like into the years to come. 09:51 And, again, Coach Pete will sit down with you and discuss that with you over an hour on a complimentary basis for folks who call into the radio show today at 800-661-7383. Again, it's been a pleasure to have Dick Duff on with us on the show today. He is author of Retirement Breakthrough. It is in bookstores near you and also available free of shipping at retirementbreakthroughnow.com. Great book and great interview, Dick. We really appreciate it. Hey, thank you. And, Dick, we'd like to check in with you again into the future, if you don't mind. Well, we can spin this a number of ways if we have time. We can actually talk about a couple of situations that might have come up where people in real life, and that's all of us, the children have come in and taken the assets away and see that occasionally. I mean, I don't like to discuss that kind of stuff because it's pretty sad, but, you know, those are parts of all of our stories. 10:41 And so there's lots to talk about. There really is. Yeah. Producer Larry will set up a time I'd love to talk about some real-life examples sometime in the future, Dick, if you don't mind. Okay. Good. All right. Well, we appreciate you again being on the program today. He is, again, Dick Duff, author of Retirement Breakthrough. Thanks for being here, Dick. My pleasure.