Can You Trust ChatGPT Answers About IUL?

[music] This is 93 million with Doug Andrew. Welcome to 93 Million with Doug Andrew, where we talk about how to optimize your assets, minimize taxes, and empower the three dimensions of your authentic wealth. My name is Greg Dugwitz, your host, facilitator, and IL specialist. And in today’s show, we’re doing a three uh the part three of the asking Chad GBT what it thinks of IL and grading the responses. Uh and can you rely on social security? And we’re joined by the pioneer of maxf funed IL, New York Times bestselling author and author of the laser fund, Doug Andrew. Good to be here. Top IL specialist in the country and co-author of the laser fund, Aaron Andrew. A and our featured guest hosts for today, top IL specialists at Laser Financial, Brandon Johnson and Scott Reynolds. Hello. Hello. Uh with hair no hair today. Yeah, hair hair no hair. That’s how that’s that’ll those will be your titles. Got to cover that ugly head of it. All right. So, coming up, will Social Security be there for your future? But first, ask chat GPT about IL part three. Like it or not, we live in an AI world right now. Something that’s becoming more and more popular is to just ask Chad GPT about everything, anything and everything. So, welcome to part three of our series where we put Chad GBT to the test and grade its responses about IL and explain where it’s spot-on and where it’s off the rails and more importantly why why it’s off or why it’s on. So, just as a reminder, I asked Chad GPG this question. I’m considering buying an IL for growth and future tax-free income. What questions should I ask? And I asked this on a private window so it wouldn’t bias the answer. It gave about 12 good questions to ask. And in previous shows, we graded and analyzed uh many of those questions already. So if you want to see those initial questions, go back and watch episodes 67 and 70. Okay, are you ready? We’re going to continue on. Again, 12 questions Chad GPT is telling someone to ask about an IL. and our panel, our IL specialists are going to kind of grade or analyze these questions. All right, question set number seven. Again, this is just picking up from where we left off last Stopping IUL Premiums time. Set number seven. What happens if I stop paying premiums? Ask, how long must I fund this? What happens if I stop early? Can the policy lapse later? What happens to loans if the policy lapses? This is huge. An underfunded IL with loans can create tax consequences, policy collapse, unexpected bills in retirement. So, this is gonna this is like a lot of people are going to read this and go, “Wow, these are these are good questions.” How would you respond uh to this? There’s a lot of misunderstanding misunderstandings with premiums, Doug, very often. How would you respond or kind of greater analyze these set of questions? Yeah. again uh chat GPT is trying to do its best coming up with some intelligent questions but again um I don’t know whether to call it shallow they don’t have enough depth for a person to be able to make a wise decision so let me give you an example most of our clients come to us uh not number one necessarily wanting or even needing uh death benefit okay they want a tool a capital accumulation vehicle where they put money in, it accumulates tax advantaged, okay? And they can take it out and it’s tax advantaged. Okay? And when they ultimately die, anything they leave behind transfers taxfree, okay? Very few vehicles do that in the Internal Revenue Code. Okay? And so what what they’re doing is they’re taking the least amount of insurance based upon their age, gender, and their health, the least amount of insurance they can get away with under IRS laws and putting in the most money the IRS allows as fast as the IRS allows. Okay? Now, in a nutshell, if I had a 60-year-old coming to me with $500,000 and they wanted this $500,000 to be liquid, safe, earning a great rate of return, tax-free, I’d say, “Let’s set up an IL laser fund.” You can’t put in all 500,000 at once, or else it would not be tax-free when they went to access the money. It would be taxree if they died, but if they want taxfree income, you have to comply with a law called Tamara. Okay, so 500,000 and basically a 60-year-old, you might be able to only put in $100,000 a year for 5 years. Now, the first question, how long must I fund this? Well, I would tell this person, if you want to max fund it, five years, then you’re then then you’re done, right? Well, could I put in more money? No. No. If you send in more money, the insurance company would refund it to you. Okay? right? You might be able to sneak in uh a little bit starting the 11th year. Okay. Yeah. So, what happens if I stop early? Well, okay, I’ll get there as an example. Um if I had somebody put in a 100,000 the first year, 100,000 the second year. Now, they’ve got in 200,000 of the 500,000. Now, something happens. They have a setback. Uh if I stop early, you would be stopping early. Now, are you going to resume or not? But see, if you fund it at 40%, there’s some things you could do. You could lower down the death benefit. You got to be careful doing that. You might create a mech, but but you’re 40% funded. If you say, “Oh, I can pick this up later.” Oh my heavens. If you were max funding it and you had 40% funded, you could probably coach for 10, 15, 20 years and not and not have to pay another premium and it would not lapse. Does that make sense? So with it, it’s so flexible. That’s why it’s called flexible premium. Okay? And that’s uh uh index universal life. So the questions are a little bit like, well, could I stop early? Sure. Uh can it lapse later? Well, there’s all kinds of ways it could lapse later. You go in and you take out 95% of your money? Yes, it will lapse later. [laughter] Yeah. The idea that it’s asking what happens to loans if the policy lapses implies that someone’s taken loans. It doesn’t mention how many loans or how big the loans are. for a dollar. These questions sound intelligent, but again, asking those questions and getting a short answer, just give me the just give me the quick answer. They they would not have enough information to decide, is this for me? Does that make Yeah. sense again? Okay. Yeah, that’s great. Okay. Yeah, that’s great. Erin, I want to come to you. Like Doug kind of touched on, there’s no mention of is this is this properly structured? How is this structured for premiums, for death benefit, for maximum growth? It just kind of goes straight into just kind of generic questions about premiums, right? Which sounds really good, but like Doug’s pointing out, you kind of dig in, it kind of it’s it feels a little bit shallow once you kind of put that context to it. But what are your thoughts? So true. So true. And like one thing uh with this is some of these first bullet points is some of those answers can be shown with what we call an illustration. So an illustration like Doug was talking about illustration. IUL Fees Explained Compliant illustration. Yeah. the compliant insurance company’s illustration which is regulated on what they can show in returns and it shows and you want to ask for the fees report. This is actually huge. It’s going to remember in this every one of our illustrations we show the clients the fees and expenses. A lot of advisors do not include that fees report. So if you’re getting an IL illustration get one done from us but if you want if you go through someone else ask for the fees and expenses to be shown so you can and whole life ask for fees illustration too. Yeah. And your whole life ask because they don’t provide it. They don’t they don’t have to. So with IL, everything’s fully disclosed, which is pretty cool. But another thing, too, is when we say the word premium, I want you guys to understand that’s not the fees. When we say the word premium, that is the amount of money you are paying into the policy. So like Doug said, $100,000 a year, that’s the premium. 100 grand a year, five years. That’s not the fees, right? You are way overpaying the fees and expenses. But you can see an illustration and see, okay, I put in this much, here’s how much goes out in fees. Here’s how much comes in in interest. I put in the next premium of 100 grand. Oh, let’s use an example. Well, if I don’t pay it all, let’s say I only put 70% of the money in there. Let’s look at an illustration. So, I do this on the spot with clients all the time where they’re asking these kind of questions and we run the example. Okay, here’s the example. If you put in a 100,000 a year for 5 years, here’s the example. If you skip a year and make it up later, here’s the example. If you for some reason take 10 years to fund instead of five, here’s what it does to the to the numbers. Here’s what happens if you take out too much. But another question with some of those that are good is what happens if the policy laps is. Yeah, that’s one of the, you know, dumbest things that you could let happen is let a policy lapse because you could trigger taxes and there’s different ways that it could happen, right? It’s kind of a loaded question. So that’s why a lot of these policies, just to answer that, a lot of these, well, all of them we have have what’s called a loan protection rider or over loan protection rider where if you get too close to taking out too much in loans, like up to 95% of your cash value, like we mentioned, this loan can trigger and it could they could charge you a fee at that time. It doesn’t cost any money till you use it or if or when you use it. It’ll charge a fee for the remaining 5% of money that’s in there and it’ll keep a policy in force a certain amount of smaller death benefit enforce the age 120 till you die basically to help protect you from triggering any taxable event. So there’s some really cool features with IL once you understand it. Those are good questions to ask to prompt the adviser to explain to you these features and what it looks like in different examples. Like today I just actually had an annual annual review with a client. He funded it fully the first three years. Lost his job and for the last three years he’s been trying to get work again. He [clears throat] actually took out a loan as well during those three or during the last six years. And um and yet he just earned over $30,000 on his policy. Um his policyy’s still in force. He’s still growing his money. Yeah. for him the flexibility to take three years off of funding it so that he could find a job and get back up on his feet was huge. So because a lot of people think, oh, if I if I miss a premium, like you not cost, right? It’s just premium. Those are two different things. But yeah, if I miss a premium, the policyy’s going to lapse. That’s not necessarily I mean, if you put in the TAM the first year, Yeah. you’re going to have the policy at least for 11 12 years. Yeah. Cuz these are flexible policies by design from the beginning, right? You you kind of decide over. Yeah. You decide what the premium is. And and in fact, people confuse premium with cost. Yeah. And we can’t officially say it, but consider what you’re putting into this as if we were talking about another type of investment. This is how much you’re investing. Yeah. But obviously it’s called premium with life insurance. Yeah. That’s why we call it maximum premium or maximum funded uh uh you know IL, right? Uh Brandon, any kind of final thoughts on this these questions? I think like with any financial investment or you know uh any kind of instrument that you’re putting money into if you change anything right like it it just changes the the desired outcome. So, if the goal was, oh, I’m I’m going to max fund this in five years and uh you know, put the max amount in each year and then some life event happens, you lose your job, somebody gets sick, whatever. Um, and that that basically derails that. Um, is it going to essentially blow up is kind of what this is getting at. And like what what Doug and everybody has said is there’s there’s so much flexibility with IL. There’s a max you can put in and there’s a minimum. And when you’re putting that max in, you’re getting you’re shoving the most amount of cash that you can. And then it’s just taking that kind of small little portion those early in the early years, it’s taking a portion to cover the cost and expense of the policy. But you’ve got all this other money that’s in there indexing in the investment kind of bucket that’s linked to the S&P. And that money is growing and accumulating. If you’re doing that, it all kind of depends what year did you do it, right? Did you do that the second year, the third year, the fourth year? And then you stopped funding it. So all these questions, there’s so much complexity to it. It all depends. But all really ultimately it’s just changing the desired outcome and maybe it’s prolonging that hey my goal was to have a max fund in 5 years. Maybe it’s going to take me seven or eight years. But you have the flexibility in IL to do that. It doesn’t it’s not rigid where it’s like hey you said you were going to put in 50,000 a year for five years straight and you stopped in year three and now your policy is going to blow. No, that’s not the case. is like and I’ll talk to the client and be like is there can you want to put in just like a minimum amount 5,000 10,000 zero like what is it you can do yeah but and and even then if if someone if someone has a a you know $500,000 to their name that’s all they have do you do you build a bucket for 500,000 I mean how do you guys usually do that you know do you do you build in flexibility to the you know what I mean it’s really just a matter of like you know what assets they can allocate to this what income so people are repositioning either a portion of their assets, right? So, a lot of times, cuz Doug mentioned earlier, I think it was another show, you know, 40 to 60% or something like that, right? So, if we’re doing like 40 to 60% of their assets, we have backup money, I call it. Yeah. So, backup either income, backup assets. So, my clients sometimes are like, “Well, what if I can’t fund this?” I’m like, “Well, think about it. We’re only using 30 or 40% of your that’s what I’m kind of getting at.” And also, not only that is you have all this extra income and rental income, you got properties. So, it’s like you got all these assets, we’re only using this much of it, right? You you’ve got, you know, you could wait and take longer to fund it or and you got all these what I call backup money that you could use to fund the policy to really max out that policy. So, there’s flexibility built in kind of right on the front. This would probably apply more to somebody that’s using like cash flow. Like I I mean, they don’t have the assets earmarked to park in there over this fiveyear period, this window. So maybe it’s just, hey, for my income, I’m putting $500 a month in or $1,000 a month in, which we have lots of clients that do that. And again, if they lose their job or something happens, then then that’s where we try to make adjustments and help them out and work with them on that. Okay. All right. Question set number eight. Policy Loans Explained How are policy loans handled? Ask, is this participating or non-participating loan? What is the loan interest rate? Is the loan rate fixed or variable or indexed? Or indexed. That’s what I was just going to say, Scott. What happens during poor market years? Why it matters? Taxfree income usually means borrowing against the policy. Loan mechanics are one of the biggest differences between good and bad IL designs. Okay, Aaron. Loans are often the most misunderstood and underestimated or undervalued elements of these policies. How would you grade or analyze this set of questions? Um, I would put it like at a C or maybe like a low like a B minus because the reason why is they’re kind of mixing in some whole life terms there a little bit. Yeah. Right. With the participating and nonparticipating loans. I mean, yes, one maybe one company uses that term, but most of the insurance companies use what’s called index loans or standard or fixed loans. So, what we can talk about is but yeah, just bottom line loans are so cool with IL. That’s one of the best features of IL. No, because people say, “Oh, I got to borrow. I to get my own money out of this policy. I got to pay interest.” And that’s what the naysayers say. But it’s like that is the power of IL because it allows it to be tax-free. And these loans that we call index loans or alternate loans or alternative loans is where you get to borrow like for example around 5%. And you borrow at five while the collateral because you borrowed. You did not withdraw money. You borrowed. So, you’re borrowing from the insurance company and the insurance company is saying, “Hey, we got a million dollars of your money with us in cash in the policy. We’re going to lend you money because we have this as collateral. We’re going to lend you money at 5% cost at five.” And you don’t have to pay the loan interest, by the way. So, you don’t have to pay this like a mortgage. You can just let the loan interest compound on the loan balance. So, you got the million dollars in there. You borrow like, let’s say, 100 grand at 5% that loan is going to go up to 105,000. But your million dollars over here, it’s earning the index returns which are probably going to be 7 8 9 10 11 12%. You know, just an example. Yes. Like sometimes it asks one of the questions, what happens in a poor market year? That’s a good question actually cuz like for example, this kind of loan where you borrow that million dollars is going to earn zero some years and the loan went up by 5%. Yeah, you need to make sure you have enough collateral or cash value to cover those bad years on the loans. So why we don’t want to over borrow or to take out too much money. That’s why we have also over loan protection rider. But the loans are so powerful because again taxfree you can earn what we call this arbitrage where you’re borrowing at five while your money the collateral is still earning 7 8 9% for example earning a spread or an arbitrage and that is what’s makes IL so cool with uh the taxfree income you can get out of it. So yeah loans are very um misunderstood in the industry. Wouldn’t you guys say? Yeah, Brandon, is that what you find? Loans are misunderstood on these policies. Oh, absolutely. Everybody hears loan, right? They think and they also think, oh, I’ve got to go and qualify for it. I fill out a bunch of forms, show two is I’ve got to show all my financials, right? It’s it’s not like that. I mean, you pick up the phone or fill out a form and you request the loan. It’s in your bank account within three to four business days. They’re not asking for any kind of documentation or anything like that. Why is that? Because they’re you’re only borrowing against your own money you have in there. Exactly. They’re not going to lend you more than you have with them. [clears throat] It’s your that’s the collateral. Like Aaron said, it’s all about arbitrage and spread, right? On average, like if I if I’m carrying a loan, I hold that loan for several years and my policy over those several years is averaging in that kind of 7 to 9%. Well, I have a net spread of two, three, 4% positive interest. Because it’s loans, your money stays in the policy. Money stays in there and continues to compound. It it just I keep employing it. It’s working. It’s growing. Because this year, Brandon, like this year alone, our clients in some of the uncapped strategies have been earning 20 to 25% right now. Right now, if you would have withdrawn that money, it no longer would be in there earning interest. And you could have maybe had to pay taxes on the gains in other vehicles too. In the insurance, that money was still earning. We still earned 20 25% taxree when we borrowed against it at 5%. 5%. I mean, the last three or four years, right? The last three or four years, it’s just hitting caps. Hitting caps. Or if you’re in the uncapped, like you said, there’s been a lot%. Yeah. Yep. Scott, when you do loans that way, what does it mean for the tax advantages on the policy like Doug was mentioning earlier? None. Yeah. No. No [laughter] taxes. No taxes. Yeah. So, I I think that’s probably the biggest part of it. You’re not having to worry about your tax bracket because if you take out a loan out of your IRA, you’re going to be taxed on it, right? Take out withdrawal. Withdraw. Yeah. You’re going to be taxed on it. So, can you take a loan on on an IRA? No, only on a 401k. [laughter] 401k and you have to pay it back. I think it’s like five years. It’s pretty Yeah, you have to pay back 7% or something like that. Charge the interest. Yeah. But the but the loans are positive thing and then they they be taxree taxree income. I like I like using real world examples. I had a client, he’s in real estate, so he does a lot of like fixing up properties and selling them. And so he took out 90% of the of the money that was in his policy in the form of a loan. Yeah. In the form of a loan. A year later, we had the annual review. He earned more more money on interest on the policy than the amount of cash that was actually sitting in the policy. Wait, what? So wait, say that again. He earned more money as far as the interest that he earned than he had actual cash in the policy. Cash net of the loan in a life insurance policy. In a life insurance policy. [laughter] Yep. Wild. So, and I know people don’t ever think about this, but if you have we have a lot of clients that are 65 and older and so they’re often thinking about Irma with Medicare because they’re they’re a lot of them are a buzz word lately. That’s a big thing. complaining about like, oh, it’s going to bump my, you know, I got to pay more B and these taxree loans, they don’t count towards Irma. That’s amazing. All right, Doug, wrap us up on this subject. Anything you want to add? Are you ready? Here we go. Buckle up. So, [laughter] number eight, how are policy loans handled? The answer is smartly. Okay. [laughter] So, let me let me uh summarize uh in the books that I’ve written, you know, I I talk about three ways to access money out of out of an IL. The sad way, dumb way, and smart way. This is chapter eight, by the way. Yeah. The of the laser fund. Yeah. The sad way is by dying. It’s one heck of a return, but I don’t recommend that one. That’s taxfree. The dumb way. Um the beauty of uh these insurance contracts is you can actually access your money withdraw up to your basis what you put into it and it’s taxfree because it’s taxed um FIFO. First money in is first out. You’ve already paid tax on that. But it would be dumb to do that because anything you accessed of the gain is now taxable. So the smart way is the loan because loans are tax-free. And so you do it the smart way and you you have these options to where you can just leave the money in there earning interest while you’re borrowing from the insurance company and your money is simply collateralizing it and it made it all taxfree and the loans are not due and payable during your lifetime. Can you pay them back if you want? Sure. But at death the loans are washed away or paid off with the gross death benefit which is income tax which for your annual statement show the net death benefit after deducting all loans and everything else anyway. So yeah it seems complicated but it is really brilliant. It is the smartest way to go. Awesome. Awesome. All right. Question set number nine. Can you show me again IUL Performance Proof this is chat GBT telling someone what to ask. Question number nine. Can you show me inforce illustrations from older policies? Ask, can you show actual historical policy performance? How did older policies compare to original illustrations? How often have caps changed? This helps separating marketing from reality. Uh, Brandon, how would you grade or analyze these questions? I I’ll give it a C. I’ll give it a C, you know, and and nothing against chat GPT. Again, it’s just context and so so like you wouldn’t really I mean you wouldn’t compare an old illustration like an original illustration to a current illustration. Current illustration is just going to give a hypothetical. Yeah. An illustration that’s what an illustration hypothetical going forward project 100 or 120. Right. So in reality what we’re looking at is is statements, right? Is like current statements. And we actually have um so correct me if I’m wrong. You’re wrong. We have an IL playlist that’s dedicated, right? That’s just to performance of And that is called what, Aaron? So that is called Does IL work? So if you go to IL performance watch. Yeah. But on on YouTube, right? You’re talking about the YouTube one. YouTube. So on YouTube. So I I’ve done a lot of videos. Emmer’s done some as well. But in that, so if you go right on, if you’re watching this on YouTube, go to our YouTube channel. go to playlists and go to does does IL work and I’ve there some of those are years old now and they’re great but good yeah so I’ve got videos where I show a original kind of what it’s asking here original illustration and then comparing to where we are today in the policy and um then also an enforced illustration sometimes with some of them of what it looks like projecting going forward this question kind of doesn’t it doesn’t make sense in some of it because it’s saying like like Brandon just said in Force means projecting forward. Not where we’re at today, but projecting forward from here. Guessing, you know, with an illustration again, you guys, an illustration is just a projection, right? You know, an illustration is wrong from day one. Just so everybody knows, right? An illustration is wrong from day one. So clients always, you know, if we want to compare to what we illustrated, that’s fine. But we’re showing what what the government regulations allow us to show at right now today. Let’s say 6.59 with one of our favorite companies, right? Right. We’re showing 6.59. Well, are we ever going to probably earn 6.59 exactly like on average every year? No. No. We’re going to earn the cap like we’ve been talking about of 10 or like 20%. Some years zero. So, we’re going to be ahead or behind of what the illustration may be projected. The averages [clears throat] come out in the short wash, right? And like what we show historically, we’ll show historicals and historicals. That’s something we’d love taking you through is say, “Okay, look at this S&P 500 uncapped or S&P 500 cap, NASDAQ capped, uncapped, and look what it’s done over the last 30 years and we can do look backs from, you know, 5 10 years or whatever.” And these have been like 8, 9, 7%. So, they’re going to be kind of all around there. Yeah. But at the end of the day, we have receipts, right? We can show statements from from how far back like 20, 15 years, 10 years, 12 years. That’s the knock that I think some people have in this industry is is they’ll be like, “Hey, you’ll show I um illustrations, but people can’t won’t ever like live up to them.” And there’s agents out there that we always say, “Yeah, there’s a lot of agents who design these policies don’t know what they’re doing. They don’t maintain them. They don’t do like the the check-in, the maintenance work, right? Um annually.” And and that’s something that our firm that we pride ourselves in, right? Is is making sure that we know like when to make maybe a little course correction on the allocations. go heavier on uncapped or maybe not as much uncapped. We’ve talked about VCIs before, when and when not to use VCI accounts. Yeah, we can show you hundreds of historical performance. How many? What was that? Hundreds. [laughter] Maybe even thousands. I don’t even know how how long the list. And also the other thing that Doug was talking about is on laser. Where’s that one at? Laserfinancial.com. AL performance performancewatch.com. Okay. We’ll put we’ll have to put it in the If you’re talking to an agent out there, ask them to show you hundreds of of statements receipts. See how much experience their firm has in delivering and beware of the agent that only shows you spreadsheets that they created [laughter] cuz people do that. Yeah, we we show statements. We can do both. We can showant and then educational tools that show education. We can show you simulations. Everything. And if they don’t give you the illustration, run away. Yeah. Make sure you get a compliant illustration. Ask for the cost. Always ask for Ask for the fees and expenses, especially if it’s full life. That’s right. Yeah. And by the way, you guys, like the last bullet point there, have caps changed? Yes, they have. They always do. They go up and they go down. We’ve seen caps go like we uh said this in the last um episode, but talking about how caps um have gone down through the years because of interest rates going down. So, the insurance companies have to adjust it. They’re making lower returns. they we can’t they can’t afford as high of caps. But then recently, the last four or five years, interest rates have gone up. So, guess what’s happened to caps? They’ve gone up. They’ve gone up and participation rates and spreads have gone down, which that’s good. Spreads go down, caps go up. So, all those things have changed and they’ve gotten really good the last few years because interest rates have been good to us. It’s like the price of gas. It’s going to go up. It’s going to go down. All right, Doug. Go up. Doug, final thoughts on this question, on this entire segment. Go. Yeah. Uh you know we had a challenge a while back from a whole life agent and uh you know he said show me any IL policy [laughter] uh that has outperformed its original illustration and this is one of the videos I think on the playlist. Okay. And I think the original illustration uh 11 or 12 years in projected um a $65,000 cash value and the client would have been thrilled with that but instead he had 115,000. Woo. This was the in this was the actual statement. 115,000 of what actually happened. Yeah. What actually happened and that the rate of return average rate of return was was over 11% and the original projection was 8 and a half or or nine or whatever. Okay. I I think what’s funny about this um can you show me inforce illustrations from older policies? um chat GPT can you show me an inforce uh Google recommendation from 10 years ago and how [laughter] how how your recommendation has proven to be true I mean [laughter] inforce like we’ve said simply means okay this is what the policy did but it’s illustrating what it could do in the future at a given assumption which is using an average interest rate which is very conservative that will likely never be exactly that interest rate. Yeah. So, you have to have a little bit of faith based upon worst case scenarios. This is why I like to use the great uh recession uh where the average return was 7.23%. If during the worst 10-year period since the Great Depression, IL returned 7.23% without even rebalancing, then uh I feel pretty good that I will get that or better. If I don’t, that’s just the way the cookie crumbles in the world. Okay. Well, yeah, and this is what Brandon was touching on because when we show those those historical like yearby years there, you’re seeing some zeros and some maximum, right? Like you’re see that’s what that’s what you’re saying, Brandon. You can see those in real time. Yeah. Anyway. Yeah. Okay. [snorts] Awesome. All right. Well, coming up, can you rely on future social security? H uh first I want to go to you, Scott. Laser Financials, one of the sponsors of the podcast. Many people a little bit worried to call in or engage with an IL specialist like like one of you guys. Uh what can they expect? Maybe nervous to get a pushy salesman or something. What can someone expect if they call into Laser Financial? Well, thank you, Greg. Let me take a moment and look at the camera right now. Yeah, give us a call. Uh give us a call at 8015049. We can just answer your questions for a minute or if you want us, we can put together illustrations and show you how it works. But we’re not gonna charge you for any f any kind of phone calls that you make to us. We just want to teach you how it works. Might even give you a free book that I’ll sign instead of Doug or something like that. Not bad. Um but yeah, just give us a call and we’re not here to twist your arm. If you want to do it, we’ll help you do it. If not, then you learn something. So, um you can also go to our website, laserfinanicial.com, and there’s ways on there to connect with us. But, uh we’re here for you to help educate you, teach you. Um, I think while we’ve been sitting here, someone called in and we missed out, Brandon and I missed out on the opportunity to talk to that person because we’re talking [laughter] to you instead, but you’re on the podcast. It’s worth it. Yeah, it’s worth it. All right, you heard it there. laserfinancials.com or call 80150549. Okay. And if you’re a financial professional that wants to do things the right way, uh, you need to attend the IL Insiders free 3-day workshop. Visit iulchallenge.com93 for financial professionals. All right. Can you rely on future social security? Social Security Crisis [laughter] One of our IL insiders sent me this bombshell article from the committee for a responsible federal budget titled No State Spared Mapping the Impact of Social Security’s Insolveny. The article states that Social Security trustees now project that the retirement trust fund will be exhausted in 2032, less than 7 years from right now. By law, the Social Security program, a retirement program cannot pay out more in benefits than it receives in revenue once its trust fund is exhausted. As a result, all retirees are projected to be subject to an immediate 24% benefit cut upon trust fund exhaustion. And other than that, the article doesn’t say much. So, anyways, what do you guys think about that? Um, Brandon, we’ll start with you on this. Uh, and then we’ll go to Scott, too. I think you have some thoughts as well. Can we rely on future social security? And what should we be doing about it? Well, you certainly don’t want it to be 100% of your income, right? I mean, if a quarter of it is going to get cut when that trust fund is exhausted, as it’s projecting in 2032, um, you’re taking a 25% cut in in your income. And I think when it was originally um when when when they rolled out social security in in the first place, it was never intended to be like the retirement income kind of for people. It was it was really meant as a safety net, right, for for elderly people so that they’re not like out on the streets. Well, life expectancy age was like 65. Exactly. I mean, when you look at it kind of in the context of what when they designed it, it was never meant to be the some something that everyone’s relying on for their retirement, right? So, so yeah, I think if if you’re smart and you’re proactive, I mean, it should just be kind of gravy on top of whatever income that you’ve planned ahead if you were proactive and putting money away and being smart. Yeah. um I wouldn’t be heavily relying on and for people like our age, not not you young man over there, but around our age, it’s going to look different, right? It’s it’s like when we can access it, it they’re going to probably keep pushing the the age and then they’re going to lower the benefit amount, right? To keep it around so that it doesn’t go and solve it. Yeah. Or just keep going into debt to try to service it somehow, which I [clears throat] don’t even know if I don’t know if that’s any better. Scott, what are your thoughts? Yeah, I prefer to take the uh politician approach on this. Um I’m not going to address it [laughter] and if I don’t address it, then it’s not going to be an issue. It won’t be an issue. They should outsource. All right. The old put your head in the sand. Yeah. Okay. Got it. Out. Yeah. No politician is going to touch it, man. They just don’t want to. It’s political suicide. So that’s why they just kind of like Well, most of them wouldn’t even know what to like like no offense, but AOC and Bernie Sanders were they going to fix it? No. Like do they know how? Well, listen. I mean, if Okay. In seven years, do you think how how many of you think six years that pe Okay, six years. I don’t know why my math’s wrong. Okay. How many of you think in six years people will actually just instantly take a 24% cut? Or do you think Congress is going to do something so that that doesn’t happen? They’re going to do something. They’re going to do something. New legislation. They’re going to put us more into debt. They’re going to do something. Put us more into debt and cut costs other places, right? Keep kicking the can down the road, right? Yeah. Yeah, I was surprised it said that they can’t just keep paying out if it’s insolvent. Yeah, I was like all they’re going to do is sign some legislation to change that. Probably they don’t even pass a budget right now. So, I know if they can agree on anything. All right, Doug, final thoughts on this subject. Absolutely. Now, it’s my age has been alluded to here. [laughter] Yeah, I I I’ve told you how old I am. I I remember when BaskinRobins only had one flavor of ice cream and I remember when Burger King was just a prince. Now, so how did we get here? Social Security came about when in the during the Retirement Funding Problem industrial revolution. Okay. And you know the big factories, what did they start doing? They started to retire, put out of use is what retire means, worn out equipment. They said, “Oh, let’s put out of use uh what we consider worn out people and hire younger, cheaper ones.” Okay. Uh before the industrial revolution, people never retired. They worked in the fields until the day they died. Okay. But all of a sudden, uh we started retiring or putting people out of use. And uh the average life expectancy was 7 years. For uh a government worker, six years. A military retirey was five years when they were put out of use. So Social Security came in and said, “We’re going to take care of these people until they die.” Well, they only needed to pay out benefits for seven years back then. Seven years was the average benefit period. Okay. There were uh when it first was introduced, there were 16 workers for every one recipient. It didn’t take long to get down to 6:1, 3:1. Now it’s 2:1. Okay. Now people are living longer. They’re running up health care costs and that’s why this is a train wreck waiting to happen. But what’s so interesting is if they stopped bringing in revenue, the Social Security Administration, in other words, deducting FICA from people’s paychecks for 9 months, they would be broke. Mhm. They only have a 9-month cushion. Yeah. It’s just they’re saying in six years, the the the income coming in is is not going to match what’s going out, right? Why? Because the upcoming baby boomer workforce is a bigger group of people that are taking that are riding the wagon compared to the younger generations that are pulling the wagon now. And I don’t know any other definition of a Ponzi scheme than when you have to bring in new money to pay off old obligations. I was thinking that when you’re saying that it’s like it sounds like a Ponzi [laughter] scheme. Yeah. But anyway, it’s it’s a legitimate Ponzi scheme. But anyway, that’s how we got here. But I believe Congress will do what they need to do to extend it out because it’s such a touchy issue. But it’s going to cost who? It’s going to cost our children. Yeah. Yeah. Well, the good news is if you have an IRA, 401k, probably going to see an increase in your taxes six years from now to help pay for this. So, at some point that’s going to happen, right? Something’s got to give. You got to reduce spending or increasing taxes. You cut programs or you increase taxes. And how easy Nobody wants to cut. No one’s going to cut programs. They can’t. Once they give it to people, they can’t take it away. Well, and it’s political. They tried earlier this year and people were upset about it. Medicare, Medicaid, Social Security, they’re not cutting any of that, right? All right. Well, that’s all the time we have for today. Remember with ChatGpt to trust but verify a lot. Verify a lot or give us a call and take control. Thank you, Scott. Take control of your future. Have a great week and we’ll see you next time on 93 Million. See everybody. [music]