Episode 75: The B.O.S.S. is Back!

Segment 1 (Show Open):

HELLO Lower Alabama! Hello Gulf Coast! Welcome in. Welcome to Coasting in Retirement! That’s. Right. Thanks for joining us today, we have another great show coming your way! Josh Null here, I’m joined by co-host and show sponsor Jay Stubbs with Providence Partners. Jay, how you doing buddy?

Listeners: Jay and I are here to discuss financial topics relevant to those of you in or near retirement, living your best life along our part of the Gulf Coast. Here’s what we’ve got in store for you today: First segment – deep dive on our topic of the day. 2nd segment - at about 30 minutes past the hour - “Headlines of the Week”. Then at roughly 50 minutes past the hour, stick around for our 3rd segment, we call it” Josh’s Crystal Ball and Big Mouth”. So buckle up, we’ve got a lot to get to!

Quick background on me for those new to the show. Again, my name is Josh Null, I am a fee-based financial advisor, I hold my FINRA Series 65 securities license, and I am the owner of Gulf Coast Financial Advisors, we are an independent investment management and financial planning firm with offices in Fairhope, Orange Beach, and Mobile! You can find more information on me and the team at Gulf Coast Financial Advisors by visiting our website gulfcoastfa.com, or feel free to give us a call at 251-327-2124. If you missed that contact info, get a pen and pad ready because we will repeat our contact info several times throughout the show!

So, Jay, in prep for this show, I took a walk down memory lane. Listeners, please indulge me for a few minutes while I get to our main topic. I got started in financial services in 2009, but the Gulf Coast part of my career didn’t start until January of 2015. For reference Jay, when did your career start down here? I was fortunate to meet you about 6 months in my career, it was a life insurance cases for a local crop duster, shout out of Matt & Billy Williams for the introduction. At the time, I was a frustrated registered rep struggling to gain traction in a completely brand new market to me, and in a decision that I will always be grateful for, you decided to put your neck and reputation somewhat on the line by agreeing to help me with marketing efforts sometime around late 2017 / early 2018. We started with fairly basic short form videos that we posted on FB and IG. Those early efforts led to a more formal relationship when we launched our first podcast, Every Dollar Counts with Josh & Jay.

We actually had a lot of success with that podcast, and it planted the seeds that became this radio show, Coasting in Retirement. Back then neither of us had formal radio training, but thru all of the reps we put into EDC, I was totally prepared for hosting a publicly broadcast radio show when the opportunity presented itself. Quick note listeners – you can still find EDC on our website and on Spotify, it’s a good show! Anyway, one of the most impactful series with did with EDC was called the “B.O.S.S. Series”, that’s an acronym that you came up with that stood for “Business Owner Strategies & Solutions”, where we discussed key topics that mature business owners could use to potentially reduce taxes, plan for the future of their business AND how to reward and retain key employees.

For today’s episode, I wanted to revisit some of those BOSS topics. How does that sound Jay? So for you listeners tuning in, Jay and I are going to discuss topics today specifically designed for mature business owners, anywhere from those of you with many employees all the way down to our solo-entrepreneurs listening in. I would say there’s even some interesting facts for you high-functioning employees out there. I’m going to lay out our 4 topics then discuss each individually:

1. Buy/Sell agreements and Succession Planning

2. 401ks, Simple IRAs and SEPs

3. Cash Balance Plans

4. Key Person – Reverse pink slip – Golden Handcuffs – NQ Deferred Comp

Let’s get started with buy/sell agreements and how small business owners can successfully transition their business to either the next generation or possibly sell it to key employees or a third party:

Listeners, if you want to set up a follow up conversation with the team at Gulf Coast Financial Advisors, it’s easy. You can call us at 251-327-2124, or find us on our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. There are flexible meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, a 30-minute zoom, or my preference, an in-person meeting at any of our 3 office locations: Downtown Fairhope, Orange Beach just down the road from the Wharf, or in Mobile off Dauphin St and I-65. Reach out to us - we would love to meet you!

Alright folks, coming up next - There’s always a lot going on in the world! Particularly the world of finance, investments and money. Every week we scour the internet for financial articles that have important information for those of you in or near retirement. Join us after the break to hear Jay and I discuss this week’s relevant headlines in our “News Headlines of the Week” segment. Stay tuned!

Segment 2 - News of the Week:

Welcome back to Coasting in Retirement, your host Josh Null here! As we discussed before the break, every week we scour the internet for financial articles that pertain to those of you in or near retirement. Our job is to help you all understand how these headlines impact you, especially when it comes to your money! Note – if you want to read our referenced articles yourself, we also include the links in our show transcript, which you can find on our website gulfcoastfa.com under the podcast tab. Alright Jay, without further adieu, let’s get at with the Headlines of the Week:

1. Alright Jay, we’re going heavy on Investopedia today, it’s a site that many investors may not be familiar with but I’ve always found it to be a great source of straight down the middle investing news. I believe most of their articles have a third-party fact checker, a rare occurrence in today’s media. Investopedia has a recent article titled “How Non-Qualified Deferred Compensation Plans Work” that lets us dive a little deeper on a type of plan often referred to as the “golden handcuffs”. For you industry nerds, NQDC plans are also referred to as 409A plans. Any business owner that has ever implemented a qualified plan such as a 401(k) knows that there are bunch of non-discrimination rules written into the plan, not necessarily on race or gender, but more around treating rank and file employees the same as your highly compensated employees, referred to as HCEs. NQDC plans are not qualified, which means they aren't covered under the Employee Retirement Income Security Act (ERISA). As such, they offer greater flexibility for employers and employees. Employers can offer NQDC plans only to executives and key employees who will use and benefit from them. There are no non-discrimination rules, so deferral need not be offered to non-executives. One of the many benefits to employers is that NQDC plans can impose certain conditions, such refraining from competing with the company or providing advisory services after retirement. There’s also the potential for supplemental retirement income for the covered employee. Let’s discuss the appeal of NQDC plans to both employers and employees:

https://www.investopedia.com/articles/personal-finance/052915/how-nonqualified-deferred-compensation-plans-work.asp

2. Next up, again from Investopedia, an article titled “Cash Balance Pension Plan: Overview, Pros and Cons”. As we discussed the opening, a cash balance pension plan is a defined-benefit pension plan with the option of a lifetime annuity. The employer credits a participant's account with a set percentage of their yearly compensation plus interest charges for a cash balance plan. The funding limits, funding requirements, and investment risk are based on defined-benefit requirements. With cash balance plans often layered on top of a 401(k) plan, they obviously appeal to employees because they receive additional funding towards their retirement, often with no additional contributions by them. The appeal to the employer starts with yet another extra benefit to entice good employees to remain loyal to your organization, but a lot of the employers we’ve worked with make great use of the much higher tax deductions allowed to them under a cash balance plan, particularly those business owners 50 years or older. That said, cash balance plans are not for everyone, so let’s discuss the pros and cons of implementing such as plan:

https://www.investopedia.com/terms/c/cashbalancepensionplan.asp

3. Sticking with Investopedia, our final article is titled “Buy-Sell Agreement: Definition, Types, and Key Considerations”. As we discussed in the opening segment, A buy-sell agreement is a legally binding contract that outlines how a partner's ownership share in a business will be transferred if they die or leave the company. It ensures business continuity by defining who can purchase the departing partner's interest and at what value, often using life insurance to fund buyouts and prevent disputes. Given that somewhere around 70% of small businesses fail to transition to the next generation, let’s discuss the importance of having a succession plan in place, and the different types of buy/sell agreements::

https://www.investopedia.com/terms/b/buy-and-sell-agreement.asp

Alright folks, coming up next: Josh’s Crystal Ball and Big Mouth. What have been some of my predictions? Have I been right? Was I ever wrong? How wrong? What do I think is going to affect investors in the near future, or maybe the distant future? We talk about all of these things and poke a little fun at my big mouth. Stay tuned!

Segment 3 – Josh’s Crystal Ball and Big Mouth:

Welcome back! Your host Josh Null here, alongside guest co-host Jay Stubbs of Providence Partners. So, I am opinionated, I have strong opinions at times, I would say a radio show host that isn’t probably wouldn’t be very interesting to listen to. And I am paid in my profession to offer professional guidance and opinions to my clients, otherwise what use am I? Just replace me with AI. I like making predictions, and while I usually proved right, there are times I swing and I miss. Want to hear me eat a little crow? Then let’s get at with Josh’s Crystal Ball and Big Mouth.

So Jay, I’ve been openly critical of crypto on this show since it’s inception over 3 years ago. When I get feedback from crypto bro, they continue to tell me that I just don’t get it and then hit me with a bunch of mumbo-jumbo tech jargon that I suppose is to make them sound smart and make me feel stupid. I just keep asking what I think is a fair question – as someone that is pretty tech savvy myself, and with crypto creeping up on it’s 18th birthday, where’s my everyday utility? I counted and I have somewhere around 150 apps on my phone, and not one of them uses crypto, or even blockchain, to help me with my daily life. Crypto bro keeps telling me their day is coming. Well, I’m still waiting. As open as I am to new tech, my heartburn around crypto has always been that it’s still the “greater fool theory of investing” that often leads to regular everyday investors getting burned by better connected, better funded insiders. The current volatility of crypto is unacceptable at any percentage level in most, if not all, the retirement accounts of pre-retirees and retirees. With the recent crash in crypto, I pulled a very recent article from Yahoo Finance to help me make my point ‘My retirement is completely in bitcoin’: After bitcoin crashed 50%, holders face risks. What this downturn reveals. This article focuses on the most well-known cryptocurrency, Bitcoin. After reaching highs above $126,000 earlier this year, bitcoin is currently trading at about half of that, and erasing all gains since President Donald Trump’s election. So I feel like my big mouth and crystal ball have been spot on so far. Here’s my prediction question for you Jay: do you think crypto has a long future, or do you think it will go the way of digital beanie babies? And more importantly, do you think any folks in or near retirement should be going anywhere near this with their retirement savings?

https://finance.yahoo.com/news/retirement-completely-bitcoin-bitcoin-crashed-124500483.html

Listeners, I hoped you enjoyed a little behind the scenes commentary on how Jay and I form our opinions, and that as fathers and husbands, we are human, and we do pay attention to broad world events. We invite you, one last time, if you would like to start the conversation about your own retirement plans and dreams, then give us a call at 251-327-2124, or visit our website gulfcoastfa.com. One our site, click on the blue button in the upper right-hand corner to set up a meeting on my calendar. We have several meeting choices for your convenience – it can be as simple as a 15-minute introductory phone call, a 30 minute zoom, or a 1 hour in-person meeting at any of our 3 office locations – downtown Fairhope, Orange Beach of Canal Rd, or Mobile near the intersection of Dauphin St and I-65. Reach out to us - we would love to meet you!

Folks, that is it for this week! I want to give a huge thank you to my guest co-host Jay Stubbs, thank you to our show sponsor, Jay’s business Providence Partners, thank you to our two radio stations, FM Talk 106.5 out of Mobile and WHEP 92.5 FM in Foley, many thanks to the provider of our show music, local band Sloth Racer, huge thank to the show producer, my son Payton Null, and as always my sincere appreciation for all of your out there that have been listening and joining us on this journey. We would love to be a part of your journey as well! Until we talk again, have a wonderful and productive week. This has been Coasting in Retirement with Josh Null!

GCFA Disclosure:

Gulf Coast Financial Advisors, LLC ("GCFA”) is a registered investment adviser offering advisory services in the State of Alabama and in such other jurisdictions where it is registered, filed the required notices, or is otherwise excluded or exempted from such registration and/or notice filing requirements. Registration does not indicate or imply that GCFA has attained a particular level of skill or ability, nor does it constitute an endorsement of the firm by the Securities and Exchange Commission (SEC) or any state securities regulator.

The Coasting in Retirement radio program serves mainly to disseminate general information including those pertaining to GCFA’s advisory services, together with access to additional investment-related information, publications, materials and links. The publication of this radio show should not be construed by any client and/or prospective client as GCFA’s solicitation to effect, or attempt to effect transactions in securities, nor should it be interpreted as GCFA providing personalized investment advice, or any type of professional advice, for compensation, wherever this program is broadcast. Any subsequent, direct communication by GCFA with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

Certain information, news stories, headlines, data, charts, graphs, figures or statistics presented on this radio program may have been obtained from third-party sources that are believed to be generally reliable but which GCFA may not have independently verified. GCFA does not and cannot guarantee the timeliness, accuracy, or reliability of any such third-party information and undertakes no obligation to update or correct any information that may become obsolete, unreliable, or inaccurate. The radio program also contains the opinions, views, and perspectives expressed by Josh Null and any other GCFA representatives which are solely their own, and do not necessarily reflect the opinions, views, or perspectives of GCFA as a firm. Such personal views and opinions should not be construed as endorsements or professional advice from GCFA. GCFA makes no representation or warranty regarding the accuracy, completeness, or reliability of any information on this radio program, and disclaims any liability for any direct or indirect loss or damage incurred from using or relying on such information.

GCFA, Aptus, Providence Benefits and Providence Partners are not affiliated, nor are any of their respective representatives.