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Market Crash: What Now?

Finishing Well / Hans Scheil
The Truth Network Radio
March 21, 2020 8:30 am

Market Crash: What Now?

Finishing Well / Hans Scheil

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March 21, 2020 8:30 am

Currently, the market is crashing. Hans and Robby go over what you should and shouldn’t do during this time. The first thing to do is make a plan and understand how you want to use your money in retirement.  

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!

You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at  

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You're listening to the Truth Network and Welcome to finishing well brought to you by Cardinal guy Certified financial planner belonged to Schild, best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well where welcome to finishing well today show retirement income market crash.

What now you know all my goodness and you know it's interesting to me harms that the Bible is just filled with stories of pestilence wars and stormy seas. And so you know the kind gives us insight on what to do and as I was thinking about this stock market, you know, I don't know if you've ever been in a real stormy sea, but you know there's waves they come up and they go that they come up and they get more violent as the wind blows you know you go up tired to go down lower and so you get the senses like oh my goodness, Emmett, and as I we were talking about the situation. I couldn't help but think of Peter right and you know those of you who have retirement income. I mean the right retirement savings. Lots of it or use have a lot to have it all worked out. You were the guys got out of the boat and in clearly you know you saw a solution to your retirement situation. Jesus out there you you went reaching form and you know everybody kind of knocks Peter for being the guy got out about Lisa guy got out about me and he's the one who got to walk on water and he's the one. But when he looked at the wind and the waves you know will happen, but when he began to look at Jesus cry as his solution and ultimately he is the solution for all this stuff that's going on or anything that would deal with if we could get our eyes on Jesus and and not on the storm, you know, I think that that's where God would have us rather than ye of little faith, which believe me, I'm in the boat to let me not worried about all the things that you're probably worried about is don't think I'm sitting there going but you know I guess the good news is we could get on the radio and assure ourselves is, technically, whatever, but I do understand that if we can get our eyes on the solution. Hans and I'm so grateful honestly to have you in the studio with me today. In this climate to come to help give us you know some ideas of what now yeah well I was reading something this week or looking at something that been doing a lot of reading over the past couple weeks in the another financial advisor put a thing out there that he really got from the psychology room and said what do our clients need. In these times right and it had a big bar and it said hugs and then down to the right of that. It had a little small bar. It said facts and then to the right of that under the bar it said lecture relate and I think it too often. If you really just if you're watching TV or reading about this seven minute meal you're watching TV in your get the talking heads that are there and they're talking about the market and the market crash in there explaining it there too much into the facts and the lecture and so I don't want to be that guy and I really and getting ready for today's show we really imprint about this in thought about us. What does audience need right now. What do you listeners out there when it went at least I'm not sure I'm hundred percent right about it but I am thinking that's where this thing resonated with me is is what a lot of people need is a just need State assurance that they were the ones I got out about how they were the ones that were put in forward imports take care of their family and grace and of Jesus like that and he's he's gone and so what would your grade is is then after I'm kind of rambling for a while getting ready for the show. Then you say what is a hug look like and then I went rambling for a while and we can end up in a place where you know what what what hugs looks like a hug. It's just listening to people understanding where they're coming from and certainly have been a lot of conversations with clients and discussions and given a lot of hugs out over the last couple weeks but I don't sense that you tuned into the radio station's warning to this financial show with hostile financial planner to get a hug or maybe you tuned in to get a hug, but I think that what you pointed out to me Robbie on this chart that I sent you about the hugs and the facts in the lecture is over the left there was a bigger black bar that I hadn't even seen, and you said you know what they want is a solution and so I'm going to try to give you that today. I mean, I think that the solution ultimately for the fear is can be a plan in order financial plan because people generally know. Okay, they have a plan. They have a senses I have this amount of money in retirement and I have this amount of money and other savings and I know I'm gonna retire.

I'm just in retirement and I just know I have this money out there and it's there if I needed to think generally don't have a plan like what's money for, and one of the things we talk about all the time on the show is is that money is there to provide an income for you.

Your money is there to provide an income for you in retirement when you're not making money from a job and is there to supplement your Social Security or to be a big supplement your Social Security. If you have high income needs and a lot of people don't spend their money in their retirement savings.

They just in effect hoarded until they get to the minimum distribution age which is now 72 and then they can start taking money and if you're already there. If your past minimum distribution Junior taken a little bit every year then basically a lot of folks have not really said so what's this money for which is going to do for me and alone think arms can give to my kids whatever's left.

So it's going to be an inheritance for something and so if I want to circle back to the solution to the whole problem of worry and fear over a severe market decline or a crash.

As we just had is to have a good, well thought out, personalized financial point okay.

And so if you haven't done that at this point I'm not suggesting you run out and create that today and do something rash Mina a good financial plan is going to look at the rest your life and you know we have to make some assumptions in there but we also have to prepare for a long life. We also have to prepare for a possible short life.

If you're married, we needed plan for your spouse surviving you or your spouse going and dying before you do, and then you surviving for a long period of time. We have a lot of considerations and we need a plan and your retirement investments or your retirement savings is just one part of the whole financial plan, you get Social Security Medicare you might have long-term care insurance and you pay for that now or perhaps you about one of those lump sum things and if you did that that didn't go down at all that that's all fixed you got taxes in retirement. All this ends up with you finishing well well we got a call in the name of the show like yeah really that so so the solution is a financial plan as it relates to the specific topic which were talking about today which is if you suffered losses from this market crash and you really haven't suffered them yet.

If you didn't sell which most people have as mostly institutional money getting dumped it in the in the market but some people are sold. So then you you actually suffered embedded in your mind and in your plan. You have suffered and because you just got a statement that one day was $300,000 and now it's 220,000 or 240,000 so you could say well I lost it on paper. I mean, whatever it is it's gone because that's a daily evaluation of your portfolio and its create a lot of fear and I'm like a said I don't want to launch into a lecture here about which you should've done. Actually people calling us a lot of times they launch into that forming your should've done this a should've done that should've done this and what I really want to do for those folks is that I have done is to skim and insist a lot of people have a lot of money in the market and seems about as helpful as fear, it really is not the place to go and clearly I do it all too often, you know, but along those lines. Turning back towards you know wow okay so I need a plan. I need kind of the figure out I've heard you say this.

Lots of times when can I afford to lose. How much more can I afford you minimum financial planning, especially when it comes to investments can be much more focused on what you can afford to lose what you can stomach losing much more than how much do you want to earn and you will a lot of clients coming in the door there. Put that on us. How much can you make, how much yield can you get off of those investments is real tempting to us to just give them an answer but you know what our firm we give an answer those questions, but is not a number, if it's not you know, because when people ever are at retirement or anticipating retirement or in retirement.

We don't recommend that they put all her money in the stock market right. In fact, I heard you told me when we are prepared, they said. Something tells me they want all their money in the stock market and they need to find a different path. They absolutely do in yet we don't tell that right right out the door rewrite when they walk in the door, but that's the general thing is if we have somebody coming in telling us in effectively making demands and trying to push us into making commitments of what we can earn them. What that does is it that that's going to be were Melissa and all that but really do a risk assessment for this book to me that we do that with everybody and this is one of the early steps in our process of taking on a new client.

Really, do we have a thing called a risk profile and the beautiful thing is it's in your book, the complete cargo guide to planning for living retirement which is there a cargo and is always been tell you that you can get the book by just emailing Hans or you can get the PDF on one of the seven hours tabs which is today clearly on retirement investments.

So we got to go to break we come back again to get a lot more into this solution, the Internet, something that we can put our eyes on and put our prayers and hope and in Christ rather than observing the storm. Hans and I would love to take our show on the road to your church, Sunday school, Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security care and long-term care. Just go to cargo and contact to schedule a live recording of finishing well at your church Christian or civic group contact on Cardinal that's Cardinal welcome back to finishing well, a certified financial child today show is retirement savings market crash. What now and we've been talking about Peter.

You know he wasn't crashing. He was just thinking it and if he observed the waves in the water. Yes that's in trouble. But the good news is that Jesus is standing there with his hand out and he wants to give us all a hand up, which has a lot to do with faith, replacing fear, and in faith. And what an end at some strategy right that that that yeah that means is that we got a way to gallons that's the solution is is is you need a strategy and media strategy that's going on whether all storms we we we know that we find that Jesus ultimately in your you know, again, not tuning in today to get a lecture or that you tuning in to learn what I had to say about a strategy and a solution to the problem of the like. What now and so where we left off at the break we were just talking about risk assessment and if you have money in the market even in your 401(k), you've most likely done one of these things before religious can ask you a number of questions about you know to say we have three investments here.

One of them as a potential gain of 70% over 10 years or something and then that same investment you could lose half of it and blah blah blah blah. And then you have to pick and was really doing is just getting a sense is that how are you how well you gonna do with with investment losses and then, furthermore, is it when you lose the money in the market. Are you going to be able to reflect back on well yeah I had the chance. Or I did make this money and this is the kind of thing that markets do every so many many years.

So so working to do a risk assessment and I was going to tell you some simple rules of thumb is that people that come in through our firm that are say 65 years old with a simple rule of thumb is hundred minus your age. That's the amount of money that we like to see somebody have a risk the most amount of money want to see him have a risk. And when we go through that so that that would be 35% of your retirement savings and emotions to five at 75 and 75 and every 25%, but that's still not most, your retirement savings.

So if if if if you just had a small amount of your retirement savings in the market and that's gone way down.

But my sense is that you lost some of the money that you gained over the last year to so don't try to make people feel better about this. I want to get into the strategy and just talking about risk assessment and we, the reason we do risk assessment is ultimately working and need to guide you to put you in a place and generally our clients are going to be very conservative. That's because most of our clients are older and they're getting older every year and they don't want to assume a lot of risk in the market okay and some of that has to do with they can't afford to lose it, but it also has to deal with that. The pain of loss which were all experiencing right now is far more far just has a greater impact than the joy of the exuberance of gains and so were to have people generally invested Morse securely then you can add to that, we're going to and what I would suggest you do in the solution is you can look at your retirement savings and start looking at it from an income stream is you can you can say how much income do I need from this money and we go through this exercise. People are usually pleasantly surprised that they have plenty of money to eke out an income when it when they look at how the numbers fall out and it turns into a monthly income when we take her Social Security check.

And then we add to the withdrawals that were to make out of their retirement savings systematically over the rest of their life. They usually pleasantly surprised.

Now I'm in be bombed when somebody comes in and they say, you know, last month I had 300,000 and now I'm ready to do do what you're asking here and so they they now we only got 220,000 work with her 240,000. I mean, I mean sure, that makes my job a little more difficult but the option of just going back and having 300,000 doesn't doesn't really get us anywhere.

So just in, mumbling now, but I went when when I sit sense is that the solution for all of this is really to get a good idea of how much risk to get your investments set up properly according to risk With the plan being again to finish well in all sorts of different ways. It no long-term care being no certainly something that all of a sudden, rears its head in a big way.

As we see people being affected by instead home nurse was sure and insist the market is emotional, very emotional in the market effectively. People talk about it like it's a person and I guess I just did. When I say that it's emotional but it's a collective group of people running like a herd of cattle and it's driven right now by fear. Fear and anticipation and the underlying thing is now. Well, as the economy can do about how well this corporate earnings unity when you're when you're buying a stock or you're buying a basket of stocks you're buying and the price you pay is betting on the future earnings of that company or that group of company. The other thing that occurs to me immediately, essentially because I have relatives that if based on your advice on the annuity route and an understatement. I think another good I'm slow, you know for for choices like that when you list look at this risk assessment and in the workbook and it shows you these different types of investments like you right now you may not be getting a lot of interest in your annuity but at least no matter what that income is secure.

Absolutely that's that's when we dig in a little bit deeper. That's that's where a lot of our clients end up and then they usually have. Depending on where they are and who they are. Everybody's there can have some amount of money invested in stocks okay and that's the money they can afford to lose but their lunch money or their grocery money or their give the grandchildren a good Christmas money there traveling indication money all that kind of stuff people put that in annuities just you know where and there's all kinds of annuities and the annuities that a lot of folks go into are these things called equity indexed annuities where they're going to give you some of the market upside so from year to year as if the market gains like it is done real well for 11 years. You can get up percentage that you can get all you get up piece of that. But when the market goes down, you lose nothing you perhaps if it goes on in the middle of the year you could lose your game for that year. But the worst you can do in any one year zero then there's other annuities that we sell the don't have anything to do with the market and is guaranteed by an insurance company and they're going to guarantee you a certain amount of money by the month. About a year for the rest your life no matter how long that is another ensuring longevity risk and the insurance company is bearing all the market all the risks and you just have a guarantee from the insurance company now annuities get beat on pretty hard by a lot of analysis position say these things are expensive high costs and fees in your will. Course or is the insurance company.

That's how they get paid is they take on ricin. They have too many people live a long time and they're having to send out checks forever and ever and ever on the smaller amount of money. There can lose so that that that that there's costs and factors of the word entrance is the fees are justified and a lot of those folks that are going to pick on annuities you really haven't heard much of that lately in the last month immunities. The people making commercials on all additives, shut up in the because they people are just experiencing these things are going way down. So that's another solution and were never going to go all or nothing. When I connect I could come in and see me on the sale you take all your money sell it all on a stocks put all annuity we do a financial planning for people and we sit down based upon their needs and with a lot of retirement folks and you talked about some your relatives that have done that I did it for him. They have a business, investing and being in the wrist business and incurring losses so we put them in an annuity and date they've completely been insulated from the things we have a lot of clients with a lot of money. Really they just can't stomach it anymore. I I want to stuff guaranteed I got more than enough to live on. Show me the guaranteed route and then come up with a master thing that jumps out at me and we don't have a lot of time but life insurance. You know, for those of you use that money when they did their financial plan. I want to give this money to my kids while while if if it was all in life insurance than the stock market again market. Even if the money sitting in stocks now were paying the premium withdrawals of the stocks I mean the life insurance cash value and then the ultimate death benefit is all fixed and guaranteed doesn't change all that risk is over the life insurance company. So if that's the plan for your retirement savings is just to keep it until you not here anymore, and then pass it to your kids you you you may want take a look at some life insurance and the systematic plan with that system. Really cool planning things you can do it rather than sit there and watch the wind and the waves because that's that that's how Peter sunk and we if we get our eyes on Jesus, and the whole deal which I'm sure the gods getting our attention if we can get our attention on him rather fear. I'm talking to myself as well as anybody else. It would get were so grateful that you listen today and remember this is brought you by Cardinal if you need it and I hope you will contact Hans to put the plan together for you is going to Cardinal and don't forget the guide. After Cardinal Cardinal and an email Hans call their office numbers are there, as well as about the workbook and all that. Thank you. We hope you enjoyed finishing well brought you by Cardinal visit Cardinal for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as constant best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows what you get.

Hans book go to Cardinal if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word. Once again that's Cardinal Cardinal

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