Call Us CALL US TODAY | 951.243.2800
Auto Insurance AUTO

Auto insurance protects you against financial loss if you have an accident.

Read More
Homeowners Insurance HOME

A standard policy insures the home itself and the things you keep in it.

Read More
Life Insurance LIFE

Browse a variety of insurance options in order to find the right one for you.

Read More

Discover the perfect insurance options to meet your specific and unique needs.

Read More

Learn about different coverage options that fit your specific needs.

Read More

Finding insurance doesn't have to be difficult. We do the work for you.

Read More



What is the biggest problem people face today as they look toward retirement? Join Prism Insurance Agency to find out the answer according to our guest, Joe Jordan, author of the award-winning book Living a Life of Significance. He will share his inside perspective as a behavioral finance expert of the biggest issue we need to prepare for in order to have a happy and fulfilling retirement.





JIM: Are you prepared to face the biggest issues in retirement?  Do you even know what they are?  Joining us today is Joe Jordan, author of the award-winning book, Living a Life of Significance.  He’s also an inspirational speaker, behavioral finance expert and has been named the top fifty Irish-Americans on Wall Street the past three years.  He’s going to share some insight on the biggest issues facing Americans as they face retirement and what solutions you might have to have a happier and more significant retirement.  Welcome, Joe.




JOE: Hi, it’s great to be with you.




JIM:  You’ve been in the business a long time and you’ve been nationally recognized as we talked about in your bio for many different things.  You’ve written books, you’ve been on the public speaking tour.  Maybe give our listeners a little bit of your background.  How did you get into the financial services business?




JOE: Well, I’d love to tell you it was something very dramatic and I spent a lot of time studiously studying all of the different venues I wanted to get into, but I played football in college and I was a Catholic big brother and I met a guy who played linebacker for the Giants who was associated with it so he said this might be a good business to get into, so that’s how I got started.  I have kind of a unique background because I spent the first seven years of my career selling insurance and then I went to Payne Webber which for those who don’t know because it doesn’t exist anymore, it’s bought at UBS.  I ran insurance sales there and so that was dealing with the stock brokerage culture to get them to sell protection products and then I went to MetLife.  I built their annuity business and then I ran all their product development so I’ve been in pretty senior positions during dramatic changes that happened.  Historically, when I got started which was back in 1974, life insurance, banks and stock brokerages were all separate and so I lived through all of the agonizing changes as people tried to combine those disciplines for the purposes of taking care of all client needs.  That’s really kind of the perspective I have.




JIM: Well, share with us, Joe, from your perspective what do you believe is kind of the biggest issue facing people today?




JOE: Well, I think the big issue and I think a lot of people miss it – everyone is dealing with the symptoms, okay, but the biggest issue that people face that humanity faces in the 21st century, so I’m not just talking about the United States.  I’m talking about humanity.  It’s not terrorism, it’s not global warming and it’s not energy.  Those things seem to be taking a lot of space.  What it actually happens to be is the aging and declining population of the world.  By the end of this century, there will be some pretty dramatic changes and all of the problems that we face at prior time periods have been solved.  There’s always a disaster du jour but that’s always been solved by human innovation which generally is the product of younger people.  The major issue which is driving all of the changes that everyone sees and a lot of the things that’s in the press just happens from the demographics, the fact that people are living a lot longer and we’re going to be dealing with a human population that will be substantially older or older than any other group of human beings that ever lived on the planet. 




JIM:  Why is longevity such a big problem now and maybe give a couple examples of what you’ve seen.




JOE: Well, today as we’re broadcasting this, everyone is talking about the Detroit bankruptcy.  That’s simply coming from the standpoint that just about all of the governmental, corporate and even cultural entitlements that people have grown accustomed to are going away and the thing that’s driving it is this longevity.  The person who came up with age 65 for retirement was Otto Von Bismarck in the 1880s and he chose 65 because no one lived that long.  Now people are blowing right past it so when people start to say there seems to be a pension crisis and they look at that, they’re not looking at the bigger picture which happens to be this longevity explosion.  The bottom line to that means that what people have to do is now they have to be self-reliant and to give you an idea of the scope of the problems here; by 2050, there will be two billion people on the planet over 60.  There are five countries; China, India, United States, Indonesia, and Brazil that will have 50 million people over the age of 60.  By 2050, Japan will lose 18% of its population.  Japan in 2008 bought more adult diapers than they did baby diapers and all of the schools they built have hand rails and wheelchair ramps for the when the children disappear.  There are many countries that are really challenged by this.  China will essentially get old before it gets rich and there are a number of other countries where it’s kind of reversed where this Gen Y population people who have been born from 1980 on, make up to half of the population.  The United States is in pretty good shape because we have the echo boom and then also the whole idea of immigration, but this whole idea of longevity is putting strain on every entitlement and things that people think they were entitled to and they can no longer look to the government, they can no longer look to their companies and sometimes culturally, Korea has had record suicides by grandparents because the business model was they would destitute themselves to take care of the kids who in turn would take care of them in retirement.  If you want to see the driving force that’s happening right now, it is the idea of the aging population of the world, ultimately the declining population of the world, some of the absence of having young people that would provide innovation to solve the problems that we face and this is really the major issue that we need to be geared for. 




JIM: As you were talking about self-reliance, I’ve seen a lot of talks and read books about the subject.  Retirement is really a new concept.  For all of history, you pretty much worked until you dropped over and recently as 100 years ago, life expectancies were in the 40s.  Now,  you have things like social security that looked at age 65 as a retirement and back when social security started, I think the average person still wasn’t going to make it to 65 but now you have people living 20 or 30 years in retirement where when they designed those programs they were really designed for people that might live two, three, four years beyond their retirement, not three decades.  That is a challenge and I think people really need to change their mind sets and we see that starting to happen where people aren’t just automatically retiring but there’s still a lot of people that just think hey I’m at that magic age, everything should magically work and just retire without really doing any planning for what impact that’s going to have.




JOE:  Well, as my good Tom Hagnaw (SP?) likes to say, whatever happened to happily ever after?  That’s really the thing that people have to be geared up for.  They have to recognize the source of the problem, it’s not evil governments, it’s not evil companies.  It’s just the simple fact of demographics, the fact that people are living a lot longer.  They’re going to have to be more self-reliant and they’re going to have to begin to think differently and that’s really the major adjustment that’s everyone going through.




JIM: Hey, let’s maybe address then Joe, what should people be doing to prepare for living longer?




JOE: I think there’s three things that people need help with and the first one is they have to turn assets into income.  Many of the retirement plans and many people used to have pension plans, those are becoming obsolete these days so people have 401(k) plans and there are adaptations of that all over the world.  What happens is someone has to first of all, figure out how much to put in, where to put it, and then how much to take out of it.  They don’t know how to turn an asset into income.  This is a is a major issue because someone could wind up and think they’re rich because they have half a million or $600,000 or even $200,000 or 2 million in a 401(k) and they think they’re set for life.  What they really have to do is translate that asset into an income stream, map that over perhaps a possibility of a 30 year life expectancy.  You find out that’s not a lot of money so that is a major issue.  I would tell you this that the whole idea that your wealth is measured by the size of your assets is a recent phenomenon because we all lived in this accumulation phase mostly driven by the mutual fund industry,  The historic perspective on wealth has never been on the amount of assets you have, but on the stability of income.  I’ll tell you, there’s a woman named Jane Austin who wrote these books about the early 1800’s in England.  They’re mostly like romance stories and talk about society in England back in the early 1800’s and there’s a book out, Pride and Prejudice and the big hunk that everyone is chasing, the guy with all the money is a guy named Mr. Darcy.  You’ll notice, she never described him as having a million pounds.  She said he got 10,000 a year.  The historical perspective on wealth has always been on the reliability and predictability of income and on top of that, what happens is people can begin to understand better what their retirement will look like if they can translate those assets back into income.  A simple other equation is that is just taking a look at social security.  At age 62, people have – I’m going to give you some rough numbers here but the concept is right.  At age 62, they can take social security.  It’s around $18,000.  If they waited to 67, they’d get $28,000.  Just by waiting they’d get substantially more.  When someone sees that $18,000, no matter who I speak to, they don’t that’s such a great retirement, but it’s the wrong question.  How much someone have to set aside on their own to give them $18,000 a year.  Ball park, using some assumptions that Fidelity has come up with, they said multiply the income by 25.  25 times 18 is $460,000.  That’s a real eye-opener to someone who thinks they’re in great shape because they have $500,000 in a 401(k).  Now these are numbers are rough, but I’m just giving you an idea because you should really multiply that by age 65 but at 62.  It’s good enough for government work.  If you wait until 67, you’d wind up getting $28,000 a year and you multiply that by 25, it’s about $701,000.  The whole idea is that what they have to begin to think about is begin to think about some other investment vehicle.  Not something that’s an interest rate, not something that’s a dividend, not something that’s stock accretion.  It happens to be the measurement of human life.  Social security, pension plans, and immediate annuities use what’s called mortality credits.  They actually pay people more.  So it’s really the idea and what financial services reps need to do is to make certain that A, people understand how to translate their assets into income.  The second thing they have to do is make certain that people make the most of what they got and that’s something that’s really there.  Most people assume if they had a bag of cash, they could pull out 10% or they go to the average return of the S&P.  There are some Monte Carlo scenarios that came out.  These were a group of eggheads who came out with all the possible scenarios that could happen.  Their guidance is to pull out only 4% a year and increase it by 3% and by the way, you should know because of the recent volatility.  That’s now down almost to 2%.  Big wake up call.  20,000 on a $1 million.  That’s something that people need to be cognizant of.  What they need to do is that in retirement one of the other things, the last point they have to do is they have to manage to risks, not just money.  Everybody talks about the money but they have to manage the risks and what are the risks?  There’s the risks of the aging.  As people live longer, they don’t know how long they’re going to live.  How much should I take out?  That’s the rules that build around the Monte Carlo scenarios and that’s something that people need help with.  The idea of translating assets into income.  The other risks they have and again,  my good friend Tom Hagnaw likes to say that longevity is the big risk multiplier.  If you never saved enough, you don’t have to worry if you’re dead at 67.  If you’re dead at 67, you don’t have to worry about Alzheimer’s or any of the other injuries that people get as they age.  The thing is it’s not just a question of the income, but it’s also the risks they have to take off the table.  One more issue I’d like to throw in on the risks and it’s this whole idea of Alzheimer’s; I’m going to focus in on Alzheimer’s as one of the things that happen to older people.  In the United States, every 68 second, someone is diagnosed.  One in nine over 65, one in three over 85, 39.6 million people worldwide and 2,000 to the year 2010 deaths from Alzheimer’s increased by 68% and one in seven of those people live alone.  The fact of the matter is when someone becomes sick or financially dependent, it isn’t the impact on the individual, it impacts the entire family. 




JIM: Joe, those facts and figures are absolutely right on check and eye-opening for our listeners and certainly should motivate them to not go at this stuff alone and work directly with their advisor.  Hey, we’re going to take a short break and I want to continue to explore this issue of of course, long-term care as part of your planning in retirement, so please stay tuned.




JIM: Welcome back.  As we continue a very intriguing conversation today – a real wakeup call I think for all of us to understand the impact of longevity and Joe Jordan is with us who’s an inspirational speaker, behavioral finance expert, also the author of Living a Life of Significance.  Make sure at the end of the show, Joe we talk about how people can get at that book.  We were just talking before the break about the impact of Alzheimer’s which really addresses the issue of long-term care and many people don’t fully understand the issue of long-term care so let’s maybe discuss this even more as it impacts longevity so let’s maybe discuss this even more as it impacts longevity and planning. 




JOE: Well, sure.  One of the things that you have to do is you have to insure against what can go wrong to gain the luxury to invest in what goes right and so to a large extent, many people are in denial.  Let’s face it.  As a human being, we are protecting against being morbid by thinking about or contemplating every moment that we’ll get sick or die.  It’s a human issue and so the idea is if you go back and recognize the fact back to demographics that people have to be more responsible, then they really have no choice other than to be able to protect themselves.  Long-term care is different because it deals with if someone has the inability to do a couple of things that people normally do, it’s just like bathing and going to the bathroom and stuff like that, long-term care kicks in.  The expense of someone being taken care of and a percent, everybody associates this a lot of time with a nursing home.  The fact of the matter is, most people wind up staying at home and the expense of that when that happens at home, it’s not just individuals who get Alzheimer’s, families do.  The biggest impact is the women in that family and what it does is it totally deteriorates their health and also their financial assets in the strain so people have to recognize that they’re responsible for themselves that there’s a new era in terms of these things used to happen occasionally, but now it’s going to happen a lot and there are going to be too many governmental or corporate programs that are going to provide for that.  Getting back to the original premise, it’s not just the amount of income you receive, it’s also managing the risks you have and how many of those risks you take off the table.  One of them happens to be this long-term care issue which should be seriously looked at.




JIM: As I’m listening to you, I know Tony and I have both based long-term care situations in our families.  I have all four grandparents needing nursing home.  My mom passed away in a nursing home, so we’ve seen it firsthand.  Right now my mother-in-law is in assisted living and I think a lot of people when you talk about that issue are kind of in denial and one of the most serious things is they say well, I’ll just go on title 19 and I don’t think many people really fully understand what that means.  I know here in Wisconsin just as recently as October 1, we had another change in the rules to make it more difficult for people to protect or preserve assets and what we find when we talk about long-term care planning, I think most people immediately think nursing homes and as you well put it, a lot of people are getting that long-term care in their house, they’re getting it in community based care facilities, assisted living.  Nursing home is really a last resort.  I’ve heard of a lot of well-meaning kids that say oh, we’ll take mom and dad in.  That happened in my own family situation where one of the daughter-in-laws said she’d take people in and ended up her family situation didn’t allow her to take mom in.  Now there’s challenges there.  I think people really need to have a plan and at what point are they going to have the government, are they going to look at insurance, are family members going to be able to provide the support?  It’s really a team effort.  To rely on just one, typically leads to some disappointment. 




JIM:  Alright Joe, the title of your most recent book is Living the Life of Significance and this is the topic that we’re talking about.  Can you expand a little bit on what it means for a life of significance and where people can get this book?




JIM:  Sure.  It’s really a personal account given the fact that I was in all of these different high level positions and watched a lot of the changes happening and I was part of financial services in 1980s and everyone was a baby boomer and wanted to go out and make a lot of money and stuff and I finally come through my own personal observation and finally revelation that what our business is about is not about us, but about the people we serve.  For people in the business as long as I was from 1974 on, what just happened in ’08 is not a new thing.  It happens a lot.  In fact, most downturns happen on average of every five years and so it’s a good measurement of that.  The other part that it does is it deals specifically with stories and I think stories are important.  What I’m really doing is trying to raise the level of anyone in financial services to not think about yourself, but think about the impact that you have on others.  I guarantee you I’m not the industry Chaplin.  That’s what sometimes people think.  At the end of the day, the key to productivity in this business is not when people make sales, but it’s at a time when they’re willing to risk negativity and rejection.  They won’t do that if they have low self-esteem.  Generally what happens is if you don’t think about your purpose, the fact that you do something beyond yourself, then it’s not just about you, it’s about the people you serve if you have a mission and a passion.  Then what happens is that begins to come across.  That’s really what Life of Significance is about.  It’s got a number of stories and vignettes about the positive impact that we have on others and it’s really calling for all people in financial services to recognize the fact they are dealing with the number one issue that faces humanity which is the aging and declining population of the world.  When you begin to focus in on that, it gives you the courage to be able to face the rejection and sometimes negativity that pops up because you’re very important.  People in financial services should not be left being analytic egg heads.  What they should really be is a behaviorist.  They have to manage people’s behavior because it’s not just about logic.  I’ll tell you this, economics professor in Harvard and the guy who mops the floor in Harvard operate the same way.  When the market explodes, they buy high, when the market declines, they sell low and that’s a detriment to people so the whole idea is what they have to do is begin to focus in on the idea that if they’re going to be living a longer life, that some of the other risks they have is inflation so that means that what they need to have is to be able to deal with market volatility.  Equities out perform all the time, just not every day but in order to have equity investments over time, you have to deal with volatility which is not risk.  Risk is being alive and broke and what happens is the fact of the matter, is people mistake what money is.  What they think it is is principal.  It’s not.  It’s purchasing power and that’s why people need a percentage of their assets in equities and it’s the financial services person’s role to not just say roll over and say let’s get out.  It’s to be able to get people to get through all those desperate time periods, but they have to believe it.  That’s really what the book is about.  It’s a new opening going back to the fundamentals into the basics and I think a lot of people haven’t heard it too often so they love it.  I speak all over the world so whether I’m in China, Japan or India, it all resonates and I think  what we really need to do is begin to be thinking about in financial services the fact that we’re there to serve others, that we’re desperately needed.  One thing you brought  up, it’s my own personal stuff because my mother got ill and my mother was widowed when I was young and she had to raise us all and then she got sick and you know what, every time we talk about it because we just talk about it – the sandwich generation people like me, you and some of the people you mentioned, most of them have taken care of parents and children at the same time but no one discusses the impact on the person for whom the care is being provided and I guarantee you, if someone wants to live a significant life, they want independence and dignity.  No one wants to go out knowing that their legacy is dependency upon their kids or their family and that’s what we’re talking about in terms of independence and dignity for individuals.  If we focus in on that, if we begin to discuss that aspect, if we can ask the tough questions, if we can go and be from a standpoint of talking what’s important and not what’s popular and not what’s on CNBC every 16 seconds and have a purpose behind us, then I think we’ll fill the gap that society – because at the end of the day, it’s not just individuals, it deals with family units and family units are the building blocks for societies.  I can think of no greater situation or challenges that we face than with this aging population.  Financial services people are real heroes if they bring themselves to do that and ancillary to that, with mission and purpose they wind up becoming very successful. 




JIM:  I really appreciate you joining us, Joe and I couldn’t have put it any better.  Let this be a message to our listeners.  One of the big benefits that you’re advisor can bring to you is the experience of dealing with hundreds of families and talking about the different types of solutions that families have implemented to give you some perspective.  When you try to go it alone, a lot of times you don’t get the full perspective.  Don’t make the mistake of just ignoring the problem and hoping it goes away.  I think too many people look at it and say ah, this is too complicated.  I’ll deal with it another day.  The sooner you start your plan, the better that plan is going to be because you have time to let that plan mature when it comes to saving for retirement or whether it comes to protecting assets for long-term care, the sooner you start, the better results you’re going to get. 




TONY: Joe, I just want to confirm, where can everybody get the book because we’ve got to wrap up.




JOE:  Yeah, you just have to look at my web site.  It’s  It’s pretty simple.




JIM: Pretty simple.  That’s excellent.  Well, listen, if you didn’t make an impact today then people weren’t listening.  It’s that bottom line.  I thank you so much and we really hope we can visit with you again.  Thanks for joining us today. 




JOE: Thank you.




JIM:  Thanks for joining us this week and tune in again next week as we explore another phase of the Real Wealth process and remember if anything you’ve heard in today’s show you’d like to get more information about,  contact your Real Wealth advisor.  Also, if you feel that any of this information would be helpful to a friend or family member, just click the forward to a friend button.

Posted 3:33 PM

Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012

View Mobile Version
© Copyright. All rights reserved.
Powered by Insurance Website Builder