How an 88-Year-Old Lost His Pension

12.5.25 2: Audio automatically transcribed by Sonix

12.5.25 2: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
You are going to see a crack in the bond market. Okay, it is going to happen. And I tell this to my regulators, some of you in this room, I'm telling you it's going to happen and you're going to panic. I'm not going to panic.

Speaker2:
Did you hear that? That was Jamie Dimon warning all of us about serious trouble ahead in the bond market. Hi, I'm Ford Stokes, president of active wealth management and host of the Retirement Results radio show. If you're holding bonds in your retirement portfolio, it's time to rethink your strategy. Our team at Active Wealth can help you replace those bonds, avoid market risk, and still get market like gains without risking your principal. You could get a bonus on your investment. Enjoy gains when the market grows. Generate lifetime income during retirement, all without bond market exposure. Visit active Wealth.com right now to schedule a free consultation that's active wealth.com.

Speaker3:
Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker4:
Welcome to Retirement Results, the national radio show and podcast for listeners like you who want to protect and grow their hard earned money in a world filled with so much uncertainty and financial risk. We seek to cut through the noise and build successful plans for hard working Americans on their road to financial freedom. Retirement results is powered by Active Wealth Management, a team of fiduciary advisors who always place your needs first and now your host. He's a registered Social security analyst, member of the Forbes Finance Council, and author of multiple books on retirement planning. Here's your chief financial adviser, Ford Stokes.

Speaker2:
Welcome to Retirement Results. This is our first podcast after we have moved straight to just podcasting. So we're pretty excited about that. I want to say hi all to our folks over at Am 920 Answer in Atlanta. We've made the decision to really focus on this podcast, and we're starting out with a really good, feel good story here. Uh, there's a gentleman named Ed who was working at a local grocery store. He was 88 years young. He lost his wife seven years ago, and he'd worked, uh, with at a GM plant. And when they went bankrupt in 2012, he lost his pension. Everybody thinks, well, I can't ever lose some, lose a pension there. But I know Sam's got some details to share, and it's a lot better to consider getting your own personal pension, and we can help you do that. We want to make sure we at least talked about it, you know, so glad to hear some of the great outcomes that came from that. They got posted on X formerly Twitter. And what happened in fundraising for Ed. But Sam, go ahead and share the details regarding the story.

Speaker5:
Yeah, thanks for tuning into the podcast result. Drivers. Just wanted to share this story. Uh, heartbreaking but then heartwarming. So it it comes all the way back around. And this is out of Brighton, Michigan. An 88 year old veteran working as a cashier at a Michigan Meyer store that's a grocery store chain up in Michigan, has become an unlikely internet sensation after his story has touched millions of people worldwide, leading to a fundraising campaign to help him retire for good. Ed Bombas works at the Meyer in Brighton, Michigan, a job that he took after being retired for more than a decade to help pay his bills. This story caught the attention of a social media influencer who started helping spread some awareness about the situation. And before I go reading any more details, I just want to play this clip so that you can hear. And if you're watching on our YouTube channel, you'll actually be able to see this clip as well. Take a look. Take a listen to this. This is really interesting.

Speaker3:
Okay.

Speaker6:
I actually had someone nominate you from this store and said you're very hard working.

Speaker7:
Well, I try to be.

Speaker6:
May I ask how old you are? I'm 88 and still working.

Speaker7:
Yes, I have to.

Speaker6:
Why do you have to keep working?

Speaker7:
Retired from General Motors in 99, 2012. They went bankrupt. And, uh, they took my pension away from me.

Speaker6:
Oh my gosh. Do you have a wife?

Speaker7:
She passed away seven years ago.

Speaker6:
Seven years ago.

Speaker7:
She was sick when I lost my pension.

Speaker6:
So you've been struggling a bit?

Speaker7:
Uh, a little bit.

Speaker6:
You said that you lost your pension.

Speaker7:
Yes, sir, I did. I was in the Army back in 60, 66.

Speaker6:
So you're a veteran too?

Speaker7:
Yes. I think that for me the most with my wife was real sick. And they, uh, when they took the pension, they also took the health care coverage. Yeah. And all but $10,000 of my life insurance.

Speaker8:
Oh my gosh.

Speaker7:
So I sold the house, sold the property I had, and we made it through. My wife died seven years ago. Since then, I've been trying to reestablish myself.

Speaker6:
And you're working here? How many days a week?

Speaker7:
I work five days a week. Eight hours a day.

Speaker6:
And you do that because you have to. Or.

Speaker7:
Yeah. I don't have enough income.

Speaker6:
What's your dream?

Speaker7:
Somewhat. To life. I was hoping for.

Speaker6:
I'd like to share your story and try and, you know, get people to help you retire.

Speaker7:
Oh. Thank you.

Speaker6:
Of course. You're amazing. I want to give you $400 here as a tip. Of course. You're amazing, man. Of course.

Speaker7:
I don't know what to say. Goes a long way to help me.

Speaker6:
Give you a hug.

Speaker7:
Yep.

Speaker6:
Lots of love.

Speaker5:
Wow. How about that story? Uh, he said he actually hasn't seen the video. He had retired from General Motors in 1999. And as you heard him say in the video, he lost his pension in 2012 when the company went bankrupt. His wife became ill. And I actually have a photo that I'd love to pull up here, actually, of Ed and his late wife. And it is you know, we've we've heard this so many times for in different companies, people losing their pensions, these promises that they had from their former employer. And there is a way to protect yourself and diversify your income streams. Just your thoughts on this story from Ed?

Speaker2:
Yeah, I mean, it's gut wrenching. We I just everybody thinks that if they've got a corporate pension or a government pension, that it's ironclad and nothing can happen to it and nothing can be further from the truth. Uh, you know, GM went bankrupt and I don't know the full particulars of whether how they access the money, but in my opinion, the pension should have been impervious. And it usually with a corporate pension they use, um, they use a single premium immediate annuity to fund those pensions. I'm not sure how some CFO or some judge accessed pension dollars, but the great news here is that there's $1.556 million raised. And so that should allow him to retire. The thing that just pains me to no end is that he had to sell his home while his wife was sick, so his wife died not in their home and and wasn't able to really enjoy being there and being in a safe place with her husband. It it is awful. Um, so the the lesson here is let's don't completely blindly trust a corporate pension or a government pension. You've got pensions in municipalities like Detroit and and other places, specifically in blue states, that and blue cities that really have had tough times. There's been fraud with these pension programs, all kinds of things. And a lot of them are underfunded.

Speaker2:
So if you've got a chance to take a lump sum pension, we want to help you at Active Wealth Management. We want to give you a free pension x ray, absolutely no cost to you. So you can do an analysis of whether it's a good idea to take the pension or to take a lump sum and roll it over into a fixed indexed annuity. I. We've got, you know, personal story. I've got a couple um, he worked for Yamaha and got laid off at 63 years old. And they're now, you know, they're now over 68 years old. They they met in high school and in their high school sweethearts. And he took he ended up having he had 1.3 million and she had, uh, about $150,000 in her IRA. And we were able to grow that money for a little while. And then we took $250,000 from her money and put it into a personal pension. We took 250,000 from his money and put it into a personal pension. And now they are getting because we had some growth on hers. Um, we went a little aggressive on the on the brokerage account. I mean, on the IRA account, um, because we could. And then we went a little bit more conservative with his. And we took 250,000 apiece. And now they're generating over $50,000 in income.

Speaker2:
Plus they've got $60,000 in Social Security income. So we're making $110,000 a year total. And they're able to let the rest of their assets grow, and the rest of their assets are now well over $2.3 million. And that's what a personal pension can do. You can generate the money you need in retirement through 20 to 40% of your assets, and then let the rest of the money grow unencumbered. And you can even be more aggressive, because you can also minimize the bonds in the portfolio. What's in what's even more interesting here is because we did that rollover and we moved money into, um, a fixed indexed annuity. Specifically with this one was the nationwide peak ten. They got 20% immediate bonus on that money. So they they made $100,000 total into the income account. That allowed them to take much more than the typical 10%. They waited for four years in a day to turn on the income, and they're getting more than 10% of what their original principle was. They're getting over $50,000 a year. That's a big deal. But also, they missed the really bad performance of the of the old typical 6040 portfolio, where you've got 60% stocks and 40% bonds. They were able to eliminate the bond portion of the portfolio. They could be more aggressive with the rest of their portfolio, and they didn't lose all the money when Biden was printing money and ratcheting up the inflation and therefore driving down the value of bonds because people that held bonds in 2019 people bonds are more attractive.

Speaker2:
They were issued in 2021 2022 because they were paying a higher interest rate, so people wanted the higher paying interest rate bonds. And I would just say, hey, it is a much bigger deal and a good idea to replace the bonds in your portfolio as an overall strategy, but also get a personal pension you can never outlive. And also with an A rated carrier where you can count on them paying money back. I mean, they invested money in the nationwide peak ten from nationwide. You know, the people that nationwide is on your side, folks. And that's a big deal. They're an A+ rated mutual insurance company where their shareholders are their policyholders and vice versa. And they're able to give more money in the policies back to the clients. And they're not having to make a financial fiscal quarter on the New York Stock Exchange. I would as a publicly traded company, I would just strongly urge everybody that's watching this part of the Order the podcast, please consider your own personal pension. You don't have to have a lump sum pension pending either. Let's say you've got $1 million IRA. Let's take 200,000 to $400,000 of your IRA.

Speaker2:
Let's roll it into an IRA based fixed indexed annuity. That's going to pay you. Now they're offering 25% income bonus and the income account value. You've got other we have other fixed indexed annuities are offering 105% of how the Invesco performs without any downside risk. I mean, that's that's a really good idea. So if you've got questions about this, I would encourage you to reach out to us at retirement. Com or call us at (770) 685-1777. And if you're interested in just calling us from any state in the Union, any state in the United States, you can call us at 8140304. That's (888) 814-0304. Just reach out to us and give us a call. So feel free to give us a call at any time. We're here to help you. We've got Diane and her team are standing by to take your calls. We're so happy that it worked out great for Ed. We want to make sure it works out great for you as a retirement results podcast listener or viewer to our YouTube channel. And I'm so glad that the private sector was able to come up with $1.5 million for Ed, and I'm just so excited he's going to be retired. I just hate it that his wife did not able to enjoy the last years of her life in her own home.

Speaker5:
Yeah, it's it's it's heartbreaking and also heartwarming to see that the community came together to really lift Ed up. You know, there's just not as many people out there working hard that there used to be. And so to see somebody in their late 80s working so hard to support themselves, it's really inspiring. And I also want to point out that Ed was not the only victim of that GM pension crisis. There were many other victims. This has happened time and time again. There's been a pension fund crisis with the Teamsters. The City of Detroit pension system had struggles. Rhode Island's central pension plan had issues, as well as US Airways, United Airlines, as well as countless issues in other countries. Another thing that people aren't thinking of for, you know, you and I were helping educate a group of educators in recent weeks with those pensions that you often get from your company, or if you work for a state or a school district or something like that. Typically people are choosing the single life payout option, so when their life ends, that income stops. But the personal pensions that we're helping people implement, we can do it as a joint. We can also do it as a way where there is cash value left over, to leave to your beneficiaries, to leave to your loved ones. So you know that they're going to be taken care of. Another thing in that video that really stuck out to me is Ed just came out and said it. He's still working because he doesn't have enough income. Income is the key to a successful retirement. Diversifying your income streams is a great place to start. That bond replacement strategy is a fantastic place to start first. And as you're starting to think about how you're going to optimize your retirement plan and find that financial security for yourself, we just really encourage you to give us a call, reach out to us so we can help you. We can show you what your options are and help you implement one of these, like we have with so many others.

Speaker2:
Yeah, a couple of things to unpack there, by the way, Sam. So one is the income is is the thing. Right. But also truly diversifying your income is a big deal. So you want to diversify your assets from assets that are traded on the New York Stock Exchange or Amex or Nasdaq, and also invest in things like fixed indexed annuities that are insurance products where they have 100% financial reserve requirement, whereas your bank CD only has a 10% financial reserve requirement. And during Covid, they even waived that. So I would tell you that they really haven't changed that back by the way. It used to be between 3 and 10% of a financial reserve requirement for bank CDs. Now it's kind of all over the board. I personally would feel more comfortable having 100% financial reserve of the money I give of an insurance company because fixed indexed annuities are and life insurance and annuities and single premium annuities, just any annuity and any types of life insurance. They are regulated by the states. The states have to balance their own budgets, so they require that every single insurance company or annuity company that operates in their state to reserve 100% of the money that an individual annuity buyer or life insurance policy buyer buys buys from them.

Speaker2:
They have to take 100 pennies that they give them, and put 100 of those pennies into the ten year US Treasury, which is considered the safest investment product on the planet. That is really good. They can't go invest in in crazy stocks or casino stocks or anything like that. They have to invest 100% into the ten year US Treasury. And then, and only then can they take the interest that's generated off the ten year US Treasury and invest those into options, into underlying proprietary indexes like the BNP Paribas Global H factor or the Invesco QQ, or, you know, the JP Morgan Momentum Index, or a cycle index or all these different indices that are available to these annuity companies. There's hundreds of them or thousands of them. And for the most of my life and most of my career, the ten year US treasuries kind of averaged mainly over my career, has averaged between 1.4 to 1.8% in a yield. Today it's over 4%. So it's it's almost triple of what it's been in the past. And so you've got a real opportunity to get triple the growth. Example the nationwide P10 is still offering the 295% participation rate in that BNP Paribas Global H factor index. You can get 2.95 times how that index performs. So if the index goes up 10%, guess what? You're getting 29.5% less than 1% spread spread rate.

Speaker2:
So that would be a 28.5% net return. So that is on a two year period without your money being at risk in the market. Here's another one, the Invesco Q-q-q. Let's say the Invesco Q-q-q does what it's been doing, and it goes up 20% over, you know, just AA2 year period. You're getting 105% times that. I mean, you're getting 21% on how, you know, on how that Invesco Q-q-q does in total over two, two years, you're getting 20%, 21% growth. That's 10.5% growth. And by the way, the Invesco Q-q-q is some years has done over 40% in a single year. So I would encourage you to reach out to us at retirement results. Com forward slash plan. Put your information in. We're happy to get started and help you get going right away. But truly diversify your assets. Don't just leave them all in the same stock exchange. You want to diversify and get to insurance products. Maybe potential real estate and get rental income too. If you're feeling froggy, you want to manage properties. A lot of 80 year olds don't. But I would encourage you to really diversify between equities and life insurance products, specifically fixed indexed annuities.

Speaker5:
Yeah. And at the time we're putting this out forward, we really just wanted to respond to this inspiring story about Ed up in Michigan and let people know that even though interest rates have come down a little, that there are some fantastic rates being offered by some of these annuity carriers that we just mentioned. Some great product features. Let us help you see how this could fit into your retirement plan. Get in touch with us. Follow our podcast, subscribe for more information, check out our past episodes and continue to follow us on YouTube as well so you can see more stories like Ed. And thanks for listening to another episode of Retirement Results.

Speaker4:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.com. Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment advisor and Active wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Speaker3:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients, and to make full disclosures of any conflicts of interest, please refer to our firm brochure. The ADV two, item four for additional information.

Speaker2:
Hey, this is Ford Stokes with active wealth management and retirement results. You've gotten used to getting higher interest rates on your savings accounts and bank CDs, but the fed has been lowering rates. If you are 55 or older and have at least $250,000 to invest, and you'd like to lock in to higher interest rates, we can help. Currently, we can lock in income payout rates as high as 8%, 9%, or even 10% guaranteed for life. Even if interest rates drop back down to 1% or lower, you'd be locked into higher income payout rates for as long as you live. You can do this with your IRA 400 and K 403 pension, rollover, current bank savings, or even brokerage accounts. Schedule your free meeting with us at active Wealth.com, and we will help you battle lower interest rates by locking in great income payout rates for the rest of your life. Call our office today at 06851777 or visit active com investment.

Speaker3:
Advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Guaranteed income streams referred to fixed insurance products only and are subject to the claims paying ability of the issuing company. Fixed annuities, including multi-year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature, not affiliated with or endorsed by the Social Security Administration or any other government agency.

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