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VIDEO: "Freight Train, Each Car Looks the Same" in Railroad Retirement Thumbnail

VIDEO: "Freight Train, Each Car Looks the Same" in Railroad Retirement

Retirement Financial Planning


Cue the music (singing). Welcome everyone to the Highball Advisors railroad retirement whiteboard. My name is John McNamara of Highball Advisors. And that song is one of my favorite songs from the Allman Brothers, written by Greg Allman, 1967, part of the Melissa song from The Eat the Peach album, actually. But it's such a great phrase, and I thought I used that phrase when we talk about my industry, financial advising industry, because we're not all the same, and nor should we be, right? So I want to just walk you through, everybody, what to expect as you deal with the financial advising industry, some of the things to look out for, and just give you a little bit better education about it.

So when you look at the industry, from my perspective, the industry perspective, they look at individuals, and you kind of group them in three groups. You have your do-it-yourselfers that like to study finances, and read the blogs, and listen to the podcasts and videos, and that's great. So those are the do-it-yourselfers. They'll come onto my site, get some information, and that's ... I love that, and they go out and they do it themselves. Then you have people seeking help. They're like, "Well, I really don't enjoy this. Just, I know I want to retire. I want to get done. I want to have a nice life, but I don't want to be bothered by that." And those are people seeking help, so they reach out to the financial industry. And then the final group is just the avoidance group. Just, the head in the sand, and hope everything works out. And so that's that group. That is what that is.

So let's talk about the people seeking help. So you decided, "Hey, you know what? I need to go out. I got to get some help with planning for retirement. I got to take care of my family, all that. So where do I start?" So in our industry, as far as advisors, we really have two groups, maybe three groups, is the fee-only fiduciary, which is what I am, part of Highball Advisors. And there's a lot of fee-only fiduciaries. It's a growing segment. So, we're obligated to work in the best interests rather than our own. So, what does that mean? So we don't take any commissions. Everything that we do is paid through by the client. And every recommendation we make is in the best interest of the client, because you're not making a commission back from, let's say an insurance product, or annuity, or a mutual fund. So, everything is in the best interest of the client. That's fee-only fiduciary, growing segment of the industry, very popular.

All right, another part is the old school, the broker dealer broker, though, it's the stockbroker type guy or gal. And they have a suitability obligation. They just want to make sure, "Hey, the investment makes sense for you," that type of thing. You don't want to have the grandmother buying Bitcoin, everything in there. So that's suitability obligation, and they generate their money through commissions, commissions through selling stocks, commissions through selling mutual funds, selling insurance policies, annuities. That's a nice one there for them. So, that's the broker dealer.

And then you actually have a third one, which is the hybrid. And there's some firms out there that will wear both hats. So you kind of have to ask them, "What hat do you have on at this time? Are you on my side of the table, or on your side of the table?" so that type of thought process goes into it. That's the hybrid.

But now that you've said, "Okay, well I'm settled on ... " And listen, both of these are very good. There's great people in both these categories. I don't want to knock any of the categories. But now you want to say, "Okay, well, I'm just going to settle on a fee-only," or whatever, but you want to further go down and say, "Okay, well now I want to choose somebody who understands me." So you want to say, "Okay, I need to somebody who understands railroading." So that's what we call it a niche, somebody has a niche. There's financial advisors. They might just work with small business owners, and it might even be more refined. They might say, "I just work with plumbers, and I understand the plumbing industry, the challenges of the plumbing industry," and that's a niche. Or they might be dentists. "I just work with dentists." That's a niche.

So I have a niche. I work with railroaders. That's what I do. I understand railroad retirement. So when you're looking for an advisor or a planner, go out and find somebody who understands your niche, or your concerns. And you might say to yourself, "Well, that's great, John, but I really like my advisor. I like my planner. He or she really doesn't understand railroad retirement." And that's fine too, because trust is very important in relationship too. If you have trust with that individual, keep that individual. So in that case, it's up to your advisor or your planner to go out and educate themselves on railroad retirement issues.

So I just wanted to point some resources to you on that is the railroadretirementboard.gov or rrb.gov is very important. And I want to point you towards the resources that I've been putting out on my YouTube, Facebook, LinkedIn, and on my website. I really would like if you guys could share that with your advisors and planners. That would be great, because there's nothing more frustrating when I talk to railroaders and say, "Well, I have an advisor," and then I'll say, "Well, what are they telling you about railroad retirement?"

"Well, they don't know anything, and I usually have to tell them about this or that." So get proactive about it. Push out the information out to them, and I think the more people in the industry that can understand railroad retirement, I think railroaders would better served by it. So, I hope you found this video helpful. Get out there, and just spread the message inside the community for the people that you're working with. As always, feel free to reach out to me if you have any questions. Subscribe to my YouTube channels as always. Leave your comments, I appreciate that. And as always, everyone, please stay on track, stay safe, and take care. So long everybody, bye.



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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved.from Highball Advisors, and all rights are reserved.