Birmingham, Alabama-based financial guru Jeff Roberts, who was recently named one of the top private wealth advisors in the nation by Barron’s®, came on Yellowhammer Radio to lay out the facts so people can decide for themselves.
The full conversation with Mr. Roberts can be heard on the Yellowhammer Radio podcast or in the video above, and a lightly edited transcript of his interview with Yellowhammer’s Andrea Tice and Scott Chambers can be read below.
Subscribe to the Yellowhammer Radio Podcast on iTunes. Learn more about Jeff Roberts’ private wealth advisory practice at JeffRobertsAndAssociates.com.
Scott Chambers:
Welcome back! It’s Yellow Hammer Radio, super station 101 WYDE. Scott Chambers, Andrea Tice, Big Dave Richardson on the one’s and two’s. And joining us now on the program … I’m so excited to talk to this guy ’cause it’s been two weeks, because of the flu. On the show with us is our local financial guru, Jeff Roberts. He’s the founder of Jeff Roberts and the Associates. And he and his team of seven advisors can help simplify your complex, wealth-management needs. They are exceptional financial advisors who have provided sophisticated financial planning, advice … to high net worth clients for 131 combined years. Jeff Roberts, welcome back into Yellow Hammer Radio! How are you my friend?
Jeff Roberts:
Man, you’re alive from the dead, brother. It’s good to have you back!
Scott Chambers:
Well, I am glad to be back, my good friend. I tell you what, I was under the weather and Andrea was too last week.
Andrea Tice:
Yes.
Scott Chambers:
I gave her the flu as well, man. It was awful.
Jeff Roberts:
Did you both end up getting it?
Scott Chambers:
Yes.
Jeff Roberts:
Oh, yeah. Yeah.
Scott Chambers:
Absolutely. Kind of like good financial advice had just start spreading through all of your friends. You know? Your friends get it and they … I wanna be on board with that. But not the flu. Yeah, definitely no.
Jeff Roberts:
That is not the flu. No way.
Scott Chambers:
No. Not at all. Well, Jeff. It’s good to hear your voice, my friend. You know, two weeks ago you introduced your three minute confident retirement check. Which can be found at jeffrobertsandassociates.com. Now since, then we’ve been drilling down on your confident retirement approach and it’s four principles. So, let’s review that a little bit. What is the confident retirement approach, Jeff?
Jeff Roberts:
Well, the Ameriprise confident retirement approach gives a client a straight forward framework to create a sound retirement plan; to provide income for a lifetime. And it’s designed around one key word clearly. And that is confidence. And we know that confidence is what everyone wants, as they approach retirement or during retirement. And this approach to confidence is built on four key principals. And we’ve covered one previously and we’re gonna cover another one today.
The first is covering essentials. And that’s having guaranteed or stable income sources that can provide income, that can cover the things we know were gonna have every single month, every single day. Expenses, utilities, food, transportation, a place to live, roof over our head. Get that stuff covered so, with a confidence of knowing, “I’ve got my basics taken care of.” The next in line is assuring lifestyle. That’s making sure we have an investment portfolio created to do just that. We’ll be talking about that today. The next piece is preparing for the unexpected. And that is the preparing for the certainty of uncertainty. We’ll be talking about that next week. And the last component … The last principle is leaving the legacy. And that is where assure that your money goes where and when you want it.
Andrea Tice:
Alright, Jeff. Last week I was here, I was not sick. And I remember us covering the essentials and you detailing that out, which was very good. And that was basically the foundation for this pyramid that you find on the website. So now, tell us more about lifestyle expenses and drill down like you did before, on this.
Jeff Roberts:
Yeah, the life insuring lifestyle concept. These are all the things you want to have or want to do, so that you can enjoy the retirement that you worked so hard for. And planning under the confident retirement approach, means that we’ve already designed the basics for our essentials. We’ve got that taken care of. And now, we want to design a portfolio specifically. Where we carve out and say, “This bucket is going to help us accomplish the fun stuff.” And there are four-
Scott Chambers:
Nice.
Jeff Roberts:
Steps to ensuring that we get those lifestyle expenses met. Fairly simple. First is obvious, estimating what our lifestyle expenses are. Guys, I cannot emphasize to you enough, the people that come in over and over and over and sit down. And they have not truly planned through the breakout of those expenses in retirement. Here are our core essential expenses. Here are our lifestyle expenses. And figuring that piece out. That is a specific conversation conversation that has to be purposeful.
Scott Chambers:
No question. Yeah.
Jeff Roberts:
Two, determining the amount of money that’s needed to make that happen. So if we know … I’m making this up. You get a forty-thousand dollars in lifestyle expenses. Well, we can do the math and show you that might be a portfolio that literally takes 1.3 million dollars in order to cover that every year.
Scott Chambers:
Wow!
Jeff Roberts:
And again, we can walk through the numbers more detailed. The third piece is carving off that money that will send out that desired amount of income. So not just identifying how much money, but now creating the income from that portfolio, that will cover the expenses. And lastly, doing so in a tax efficient way.
Scott Chambers:
Interesting. Our guest is Jeff Roberts with Jeff Roberts and Associates. Just talk about insuring lifestyle. And he’s just sort of giving examples of lifestyle expenses. So what are … Give us some more examples, if you will. Of lifestyle expenses. Is that like buying a new truck? Buying the new boat? Things like that?
Jeff Roberts:
Absolutely! And it can be the activities around that. Like traveling. Seeing The United States or the world, visiting grand children, dining out, spending engagements, or income on your hobbies, or the things that you’re really passionate about. Vacations, gifts for family. Lifestyle expenses are all about the goals that likely fill the pages of your bucket list. That’s lifestyle stuff.
Scott Chambers:
Gotcha. So that airplane I want to buy goes under lifestyle expenses.
Andrea Tice:
Not a necessity, Scott.
Scott Chambers:
Not a necessity right now.
Jeff Roberts:
It’s a great point because it’s not a part of those core fundamental essential expenses that you’re gonna have. But, it’s the fun stuff that you hope to have enough in your retirement plan that you can enjoy. Sure.
Scott Chambers:
Right, so I need to wait on that, essentially.
Jeff Roberts:
Right.
Andrea Tice:
Now, last week you did a great job of just asking all the questions that needed to be asked in order to accomplish the goal of the essential. So let’s … What are the same type of risks that people face when it comes to insuring the lifestyle. That level.
Jeff Roberts:
Yeah. Perhaps the biggest is when we take a look at risks that people face, it’s because they’re not asking the right questions in advance. For example, how many years are we going to be in retirement?
Now again, this has to do with longevity. And I’m gonna throw our several at you, Andrea. But just to give you a couple here. The years in retirement … Let me give some statistics. If you’re a male age 65 today … Let’s say you’re gonna retire when you’re 65. There’s a 50% probability that you’re gonna live to age 85, statistically. And there’s a 25% chance, you’re gonna live to 92. Now, if you’re a female at age 65, there’s 50% you’re going to live to 88. And there’s a 25% chance you’re gonna live to 94. Now, the thing you gotta think about is, let’s take married couples; because many people out there, it’s a couple. When you take the probability then of a couple, one of the two living to age 92. There’s a 50% chance that one of a couple, lives to 92. And there’s a 25% chance that one of the two, if you’re age 65 today, 25% chance that one of you is gonna go to 97.
So you gotta sit there and think, “Do I have enough, at age 65, for me or my spouse to live 27 years comfortably in retirement?” That’s a huge risk because … Follow me. Inflation averages for 90 years is averaged about 3%. And at 3%, that means expenses are gonna double every 24 years approximately.
Scott Chambers:
Wow.
Jeff Roberts:
So if you’re going to be 65 today, you’re gonna live until 92. Or in the s’s. And there’s 27 years. Well, you’re literally gonna have to have twice as much money, paying for twice as much expenses, over that period of time. That’s a huge risk. And that’s the piece that I want to ask over and over. “Have you factored inflation into your long term planning?” Most people say no.
Scott Chambers:
Wow.
Andrea Tice:
Yeah. You know, Jeff, like I said before you, you ask these questions and people just don’t even think about it. That one, that’s a killer almost. It just overwhelms you when you realize, you think you’re gonna retire at 65 but there’s another 30 year span there possibly. That you have to-
Jeff Roberts:
Huge.
Andrea Tice:
That’s huge.
Scott Chambers:
You talked about those risks there. And I hate to do this … but can we back up for just a second? You’ve made some wonderful points there, Jeff. But let’s talk about some of the complexities. How complex of an issue is this?
Jeff Roberts:
Well, I love to explain this. This is complex stuff that is actually so easy … That can be narrowed down just to proper planning conversations. And when you try and tackle this on your own, most of the time people don’t even know what questions they supposed to be asking. Or the bret of questions they’re supposed to be asking. So, the message I like to communicate to people is just simply this, “Don’t over complicate it in your mind, but just recognize that having somebody that is going to address all of the different areas for you … of a sound financial plan to make sure, so to speak, that you’re bullet proof.” And that’s what the confident retirement approach is designed to do.
Like next week, we’re gonna talk about the complexity of risks and things that can throw us off-track in our retirement. And that’s huge. But honestly, one complexity people don’t even think about is, the concept of [00:09:55] the cookie on the table. Tom Hammett, one of the guys on my practice references this. And that is, if you’ve got a bucket of money, your nest egg set aside. It’s leaving it alone, don’t go up there and tap it. We’re sitting right now where there’s kind of the boomerang adult children. This is probably the most common thing that were found that people have is, they end up using their assets to cover the boomerang adult kids that come back into their life financially and they just, “Yes. Yes. Yes.” And it puts their own retirement at risk, and they’re not seeing it.
Having a plan where we can show the financial impact of those decisions, we’re helping other people out. And that may be a good thing. ‘Cause we’re gonna talk about leaving a legacy. Two weeks from now, we’ll talk about it as a component. But if it’s not planned, and it eats into either our essential expenses, or our lifestyle, and people aren’t aware of it can be hugely taxing down the road
Scott Chambers:
Absolutely. Man, these are fascinating points and I appreciate you covering this today and helping our listeners out there. Now Jeff, if anyone has an interest in getting help or they want to be more confident, possibly; towards you know, their own retirement. What do they need to do?
Jeff Roberts:
Yeah. They can always give us a budge at (205)-313-9150 or go to jeffrobertsandassociates.com, complete our three minute confident retirement check. Or for feel to reach out to us electronically there. We’re happy to help.
Scott Chambers:
Alright. Jeff Roberts, Jeff Roberts and Associates. You are the man, Jeff. It’s so good to talk to you again today. And I look forward to learning more next week.
Jeff Roberts:
Looking forward to it.
Scott Chambers:
Alright, Jeff Roberts.
Andrea Tice:
Thanks, Jeff.
Scott Chambers:
Jeff Roberts and Associates. We’re back right after this on Yellow Hammer radio.
