Financial Seminars in The Villages, Part 2

Last time I started a three-part series on financial seminars I’ve gone to in The Villages, Florida.

In case you missed that one, you can catch up by reading Financial Seminars in The Villages.

Today I’ll just cover one event…and it’s a doozy!

It’s the largest one of these I’ve ever been to…and probably the largest I’ll ever attend.

Let’s get started…

Villages Financial Planning Event #4

Details:

• Date: August 9, 2023
• Location: Brownwood Hotel 
• Company: Parady Financial 
• Presenters: Greg Parady, Tom Hegna 
• Type: Educational Seminar

This one was held at 4 pm in the Brownwood Hotel’s main ballroom. It was (by far) the longest of the events (almost two hours) and thus deserves its own post.

I took notes as fast as I could possibly write, but still missed some things. As such, some of the sentiments that follow are my comments and some are quotes from the speakers. Note that the quotes are often not exact quotes, but they are 95%+ of what the speaker said (the information was delivered too quickly to get every single word exactly recorded every time.)

Getting There

I arrived and checked in around 3:30 pm and a crowd was already gathering. They had different color/style nametags for different types of people. I assumed this identified attendees as either current or prospective clients. Many people also had shirts with “Parady Financial” on them so I assumed they were clients (some were employees but you couldn’t tell who was who exactly).

I waited in the hallway for about 15 minutes and scanned the crowd. It seemed like they had the right attendees – the place reeked of money (as well as a lot of people who looked clueless about managing money – though you can’t judge a book by it’s cover – stealth wealth, you know.)

I looked over the info they had handed me. It was very professional and well done. It talked about their services and their charity work.

The doors opened at 3:45 pm into a gigantic ballroom with tons of chairs (later they announced there were 600 people there – but we were told at the next event (which I’ll cover in my final post in this series) that 750 attended.) I grabbed a seat near the front and center and settled in.

As we all walked in, up at the lectern watching people come in was CEO Greg Parady.

Folks milled in and then we waited. At 4:10, Greg asked if he could wait for 5 more minutes for some people who were late. I think he expected us to be ok with it but the crowd booed him. I was with them. If people can’t be on time, then it’s their loss. And we’d already waited 10 minutes for them to show up.

To me this was a bad impression for what was otherwise an impressive start. We began the presentation late – which means the organizers were either rude or incompetent – either of which is not something you want to be if you’re asking people to let you manage their money.

Since the crowd had not reacted positively, Greg started to get ready and we began around 4:15 pm.

Company Overview and Highlights

Greg opened by welcoming us to the “Wealth Summit” or the “Protect Your Wealth Summit” (either name worked). [FYI, I later found their events page – wow.]

He said there were three groups of people here:

• Parady clients
• TB Financial clients
• Potential clients

More on who TB Financial is in a minute. I was in the dark at this point.

Greg said he moved here from Portland, Maine and used to do dinners like so many other planners do. But now he does financial training/education instead.

He’s been in The Villages for 23 years.

He then talked about the “recent merger” between Parady Financial, TB Financial, and a company called Risk Strategies. I can’t really tell if it was a merger, an investment, some sort of agreement with money exchanged, or something else (this article says it was a sale). It appears each company is keeping its original name though – at least for now.

Greg said that “the merger meant no changes for clients.”

Then he proceeded to tell us what changes there were. Hahaha.

He said there were “good changes” including:

• Improved technology
• Better cyber security
• Better product options
• Improved services operation
• Offloaded HR, accounting, and IT
• Crisis management strategies

After seeing this, I wondered if old clients felt like they were getting an upgrade or if they thought they had been getting poor service previously and now it would be “better.” LOL.

Greg said that Parady had merged with Risk Strategies in January and TB Financial merged with them in April.

Then he said Parady has three divisions:

• Annuities and life insurance
• Wealth Management (RIA fiduciary, fee-based)
• Tax planning and tax preparation (Greg noted that “free tax prep can cost you a fortune.”)

He also said that Parady is “the largest financial planning firm in The Villages.” If you go by ads they place in the papers, billboards, etc. you could easily guess this is true.

Next Greg invited Jessica from St Jude’s to the stage. He said that Parady Cares (their non-profit) had raised $203,000 in 2022 and $2 million since 2013. They presented Jessica a check for $60,000. This was money that had been raised by both Parady and its clients.

FYI, Parady had signs in the hallways showing the different organizations they had given to in past years.

Then Greg referred to a Morning Star email/report that had just been published. They had sent an email out about it earlier in the day (which I had received). Here it is…

———————
Morning Star changes tune on annuities!

Timing is everything and the Timing is NOW!! Tom Hegna, America’s Retirement Income Spokesman is coming to The Villages on Augusta 9th – wow! Things couldn’t be better for retirees than right now.

We are truly living in one of the most lucrative times in retirement history — especially for the risk averse, ,and people that want to Make the NEXT 10, their BEST 10! Annuities are enjoying the highest income payouts in generations. Not even close.

Morningstar Just released a 48-page study on Fixed Index Annuities with GLWB (income riders) and how good they are compared to other financial tools when ‘part’ of the overall strategy. Annuities win. Period.

Morningstar has NEVER REPORTED ANYTHING for 26 years that was positive about annuities …..that alone should tell you how good they are right now.

Soaring Income payouts are UP more than 30% or more in some instances, and when you combine those record payouts for guaranteed lifetime income ON TOP of the NEW DAY ONE BONUSES ranging from 10%-25% (some for deposit and some for income only) What else do you want… Besides more income and less taxes 🙂

Payouts now routinely show up between 7.5% — 9.2% on new products depending on your age, and objectives sometimes more….. but it’s an amazing time to be retired – two years ago that range was 3- 4.5%

We now have a contract with a 10% bonus day 1, and another with a 15% bonus day 1 -with options for income day 1 !! – both are in the very top two of the income charts – Both contracts are leading the pack for income despite surrender penalties or other fees that you may incur – it’ll all come down to Math – but we are auditing all contracts to see if we can take advantage of the incredible income available.

The fact is, that today we only need about half as much as we needed two or three years ago to match or beat existing income annuities.

Life Insurance Gets a BIG BREAK TOO!!

Life Insurance owners….. Despite record rates, existing life insurance rates continue to drop – when that happens, they can’t earn enough to cover the internal costs of insurance – putting some policies in a spot where they aren’t earning what they were, or what they need to earn.

But, at the same time, NEW products are more competitive from a cost standpoint and have better rates, but it’s more complicated because you could have had some health changes since purchase —- IN THAT CASE we have new survivor policies – which cover both lives if married —easier underwriting.

Additionally, the Life Insurance industry is still feeling the hit from COVID because it was challenging for them to underwrite people over 65.

The takeaway: Life Insurance can be bought at a significant discount despite when you purchased it previously — Life Insurance products today can do things that they couldn’t do even three years ago.

• Tax Free income for life
• Tax Free Death benefits
• Long Term Care benefits
• Flexible premium payments and costs that can be controlled annually

Last month we were able to buy the same life insurance with half the money – on a policy purchased in 2017 for one family. So high rates are your best friends right now!! Take advantage of the tax benefits of Life Insurance and the Low Costs due to Record Rates!!

We will be contacting everyone over the next 60 days, we don’t expect rates to move, and these are the NEW rates anyway….which means we are locked for at least 60 days.

——————

I’ll let you make of that whatever you like.

FYI, from another Parady ad I had seen in the paper they stated that Parady is “America’s largest individual annuity producer” and that they “already service over 15,000 annuities in Central Florida with over $1 billion in annuity income benefits.” Wow. Just calculate the fees on those puppies!!!!

Greg then introduced Tom Hegna, the main speaker for the event. I looked him up online and it appears he trains advisors how to sell and speaks at their events (to get leads most likely).

Don’t Worry, Retire Happy

Tom came up at 4:33 p.m.

He started by saying he doesn’t sell any products — but he owns 11 annuity products personally.

He also said he’s “75% retired.” His LinkedIn profile shows he was a Lieutenant Colonel in the Army where he served 22.5 years (so you have to give him some props for that) but somehow during those same years he worked for New York Life and MetLife. I’m not sure how that works as I didn’t know the military allowed you to moonlight (I was recently told it’s ok if it’s approved – but I still don’t know how an officer in the Army would ever find time for a second job.) He graduated from college in 1983 so if he was 22 then it would mean he’s 62 or so now.

FYI, I do that math because if someone is 70+ telling me about retirement and they are not retired (at least partially), then I wonder if they know what they are doing/talking about.

Tom said he now does 25 live events every year – he used to do 200 – but now most events are virtual.

He then talked about his first book, “Paychecks to Playchecks.” It’s about the “optimal way to retire.” He said the book doesn’t cover his opinions but “what experts say is best and it’s backed up by math.”

The general idea of the book is to turn paychecks (that you work for) into playchecks (which is passive income) in retirement so you can then stop working and start playing (golf, tennis, etc.) to enjoy life.

His second book is “Don’t Worry, Retire Happy.” It’s been seen by “80 million people on PBS.” It was from this book that he’d be sharing today. BTW, this is how this seminar was advertised so credit to them for covering what they actually said they would. And, I saw an infomercial with him/his book a couple days later on TV (not PBS, I think it was on ABC on Sunday morning.)

He started by reviewing the book’s seven steps to help people retire happy as follows:

1. Have a plan for retirement.
2. Maximize Social Security benefits.
3. Consider hybrid retirement (some work).
4. Protect Savings from inflation
5. Secure more guaranteed lifetime income.
6. Have a plan for LTC.
7. Use home equity wisely.

FYI, he also noted that people should use life insurance to transfer wealth – to leave kids money. He talked more about this later. For now, he jumped into details of the seven steps.

Step 1: Have a Plan for Retirement

He said you have to work with a planner to have a great retirement plan because you need an expert. Then he asked, “You don’t do your own dental work, do you?” and noted that “retirement is not a do-it-alone sport.” I guess he doesn’t read my retirement interviews. lol.

He showed a slide which said those who plan for retirement are 3x more sure about retirement (source: Hartford).

He ended this step by noting that the plan must include guaranteed lifetime income – other income (that’s not guaranteed) does not count.

Step 2: Maximize Social Security (SS) Benefits

Tom asked, “What is your largest retirement asset?” then answered, “Your SS benefit. Yet people spend more time planning a vacation than they do deciding when to take SS.”

BTW, he’s not wrong. People do seem to spend a lot of time on certain things (like vacations) which are much smaller in scope than retirement, financial education, taking Social Security, and so on.

He talked about SS a bit. His general message was that the breadwinner should wait until 70 to take SS – the lower earning spouse can take earlier. (This is very general advice, and he noted this saying each situation is unique so you must really evaluate it. That said, this is my personal current plan for SS.) He also said that “taking SS at 62 is the answer you get if you ask the guys at the counter at Waffle House.” Hahaha.

Then he said, “Before you make the #1 most important retirement decision of your life, sit down with a planner (Greg in this case) to look at options to maximize SS.”

Step 3: Consider Hybrid Retirement

General message: “If you can work a few extra years into retirement you can have major gains – much more than saving more in working years. This is why a hybrid retirement is best.”

Who knew I was living a hybrid retirement? LOL!

Again, this is pretty decent advice. Extra/longer income covers a lot of bad decisions and lack of planning.

Step 4: Protect Savings from Inflation

He sort of skipped over this one, but it’s covered in the next step…

Step 5: Secure More Guaranteed Lifetime Income

“At a minimum, you have to cover your basic living expenses with guaranteed lifetime income.”

He then listed three sources of guaranteed lifetime income:

• SS
• Pension
• Annuities

He then gave this equation:

How much you need for basic living expenses – SS payments – pension = amount you need in annuities

FYI, he did not define “basic living expenses.” My guess is what’s “basic” for one is a luxury for another.

He said that the right annuities have no fees – you get the amount you are promised (like $3k per month). No extra charges. I’m sure the fees are taken out of the return (i.e. the return could be higher except for the fees)…but there was no mention of that.

He also said, “Assets can be lost, stolen, swindled, sued, divorced, decimated in market crash and more!” and “income is more important than assets!”

FYI, I do agree with the income statement, at least in part. I don’t know if I’d say income is “more important” than assets, but I would say it evens out a lot of stresses – you don’t have to worry about stock market volatility, withdrawal pressures, and so on. If you have income and (especially) if it covers all your living expenses, it is a great hedge of protection around your finances.

After seven years I have seen how income in retirement is a very powerful thing – I actually do prefer it to assets in retirement. And having income has allowed me to let my assets sit and grow for seven years, which has doubled my net worth.

Next Tom asked, “How much guaranteed income do you have?”

This is where we differ. At the moment I have zero “guaranteed” income. But I have a lot of sources of income and it’s well enough above my basic living expenses – so I’m ok with it. I also have plenty margin of safety. (And if worse comes to worse I could simply withdraw from assets if I wanted.)

Tom then discussed several risks faced in retirement – sequence of returns, longevity, market risk, and several more (#1 risk is longevity risk). Then said, “This is why you need guaranteed, increasing income in retirement.”

He said that to retire optimally you must take longevity risk off the table – and that assets can’t do this – annuities can. Then he suggested that we think of annuities as longevity insurance.

And he said, “Only a life insurance company can protect you from dying too soon with life insurance and from living too long with annuities. That’s a mathematical, scientific fact!” Hahaha.

He went on selling annuities by quoting academics like Finke and Pfau (“experts”) who have recommended annuities in their work. He also cited BlackRock, the Wall Street Journal, and Time Magazine as organizations who have mentioned the value of annuities.

Then he made these statements:

• “If you have guaranteed income you can afford to invest more aggressively with other money (and thus earn more).”
• “The safe withdrawal rate is 3.2% not 4% since Covid and inflation. Annuities are well above this.”
• “You don’t even need to replace stocks with annuities. If you have a 60/40 portfolio just take the bond portion and put into annuities.”
• “Ernst and Young tried to find the best portfolio ever and found it is 30% annuities, 30% life insurance, 40% investments.”
• “All of this is math – not an opinion.”

As a selling technique, the “switch your bond allocation (which is in theory 40% of your investments) to annuities” is an effective one. It’s not asking for everything to be invested in annuities (which seems risky) but “only” 40%. If they got a small fraction of the people at this event to invest anywhere near 40% in annuities they would be rolling in cash and fees!!!

Then he asked, “Who is happy in retirement? Those with guaranteed lifetime income.”

He quoted a Freakonomics/University Of Chicago study showing that people who buy annuities live longer and stated, “People with annuities are less stressed and live better – thus they live longer.”

Next, to show annuities have been around for a long time (which implied they are legit and no one should be hesitant about them) he noted:

• “The Roman Empire issued annuities.”
• In 1811 Jane Austen wrote in favor of annuities in Sense and Sensibility.

Here’s the source for both of those claims. 

As we end this section, let me just say that point 5 got way more time than the other steps – maybe 20 minutes of the hour-long speech.

Step 6: Have a Plan for Long Term Care (LTC)

“LTC is very expensive.”

3 Phases of Retirement:

• Go-go years
• Slow-go years
• No-go years

Not sure why this was in here as he didn’t really elaborate on it much…

Then he said that with LTC any plan is better than no plan.

Tom then suggested none of us leave kids money – instead we should leave them life insurance. His example: for $150k paid now, he has a $1 million insurance policy to leave his kids. He plans to spend the other $850k himself.

Step 7: Use Home Equity Wisely.

A couple options:

• You can sell your home and downsize – and take some equity out.
• You can also do a reverse mortgage. Just be careful with these and work with an expert.

I’m ok with the first one, but I think of a reverse mortgage as a last resort.

Supposedly, according to Tom, Pfau and others have studied reverse mortgages (and in theory approved of them in some way).

Millionaires

Tom then covered his new book quickly. It is “Who Wants to Be a Millionaire?”

It’s “for kids and grandkids.”

He said, “I help people become millionaires. You tell me how many millions you want and I’ll tell you how to get there.”

He then showed an example, solving for $1 million at 65 with life insurance.

The book covers the three phases of wealth

• Building Wealth. Here you need to make more money, spend less, and invest in appreciating assets. [E-S-I in action! How can I disagree with this? lol.]
• Protecting Wealth.
• Distributing Wealth.

Two reasons most people aren’t millionaires:

• They buy new/expensive cars.
• Divorce.

“People are driving their retirement plans. Buy a used car and invest the difference.”

“The only person who will take care of your older self is your younger self.”

Wrap-Up

After this (we were past 5:30 pm by now), Greg Parady came up and went through a few things including their slick marketing materials.

He then announced there were six open bars in the lobby as well as some food for everyone.

I fought my way up to get a free book (Don’t Worry, Retire Happy) and by the time I got out to the hallway it was packed with people lined up to eat and drink, so I left.

Overall I left feeling “ok” about what they had presented. Nothing much new and a lot of good mixed in with the sometimes questionable. I think they could be trusted with the basics of money management but my guess is that they would push annuity sales very hard which might become an issue. I don’t think annuities are inherently evil, but they also aren’t the answer to every financial problem (and probably only fit as the best option in a minority of cases.)

I filled out the form to be notified when they did their “famous” “Untax Your Retirement” seminar. I say it’s famous because they advertise it everywhere, though since they merged with Risk Strategies they seem to be moving to “Unstress Your Retirement.” My guess is the former is about moving IRA assets to Roths and the latter is more about selling annuities.

Anyway, that seminar is covered in the next post for your enjoyment.

And as a final wrap on this event, on August 20 they sent me a bundtlet from Nothing Bundt Cakes. It was very kind and my wife enjoyed it (it was lemon, so that’s a pass from me.)

To read the last post in this series, see Financial Seminars in The Villages, Part 3.