11.14.22: Audio automatically transcribed by Sonix

11.14.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Money Matters with Mike, with your host, Mike Zaino. Get set for a full hour of financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Mike Zaino.

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing it again. On today's show, we'll discuss how to manage the most overlooked part of retirement planning, that being the accumulation phase. Too often people concentrate on accumulating this huge retirement nest egg with very little thought on how to draw down on those funds in retirement. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today?

Producer:
You know, I'm doing great, Mike. Just over here being extraordinary. That's as you would say. I told you, one of these days I'll live up to the intro. I don't know if it'll ever happen, really, but. But that's what I keep telling myself.

Mike Zaino:
Anyway, buddy, this show doesn't exist without your capabilities on the production side. I love.

Producer:
It. Oh, well, thank you. And it obviously doesn't exist without your capabilities on the hosting side and all of the knowledge that you bring to the table here and bring to our listeners. And you know, as you say, that's the point, is bringing that knowledge to the listeners, right? It's about education, it's about having fun because we have a lot of fun on this show. We have a laugh here, but we also really want to help people. And that's what it's all about, right?

Mike Zaino:
Hey, man, Hey, man. Helping people again, whether whether you have a baseline financial knowledge, whether you're an expert in all things financial or whether you know nothing really. This show is armed to provide information that hopefully rises the tide for all boats. And, you know, the financial education system in America is broken. And I do my best to at least provide information that used to be somewhat commonplace, but no longer is the case because of the fact that it's just not being taught in our school systems.

Producer:
Yeah, that's right. And we actually talked about that not all that long ago on the show. We played a little segment about that and about how some states are really trying to trying to solve that. And that's a great thing. This show is another part of that, right, about trying to get that knowledge out there. And we got a lot of it to share with the listeners today. Folks, once again, this is Money Matters with Mike. MoneyMattersWithMike.com is the website you can also go that you can go there and you can request a free consultation. Of course we'll have more about the free consultation as we continue on at MoneyMatterswithMike.com 704 560 1573 is the phone number. And remember, either on the website or wherever you get your podcast, you can listen to all of the episodes of the show as well. As we start out here. Mike Of course, we like to give folks some reminders about things that are coming up or happening right now. One of those is a biggie and we've been reminding you so. So folks, if you listen to the show, you have no excuse to not know about this and to not know take the initiative to do something about it. That's the Medicare annual enrollment period, Mike.

Mike Zaino:
It is annual enrollment has been going on since October the 15th, and it will continue through December 7th. After that, it's done. All right. So that means there is less than a month that remains in this year's enrollment period. So if you have any questions about Medicare, the different parts to Medicare, the different Medicare Advantage plans that are out there, or whether you're new or whether you're experienced and looking for a change, let us know how we can help you with those Medicare needs. Please do not hesitate to give us a call today. 704 56 01573 or visit the contact page on Money Matters with Mike dot com.

Producer:
Yeah, and it's important that you do that, folks, because you've got to know the ins and outs of all of this stuff, especially when it comes to Medicare because it covers a lot. But there are some things in there that you might not know that aren't covered. So Mike can have you covered for those things that are not covered through Medicare? Traditionally speaking, there are ways to do that. Speaking specifically of long term care as well. It's one of the biggies that really is not covered in Medicare, but it's something that people use a lot and need a lot. And unfortunately, not everyone has the proper planning going in to get that taken care of ahead of time. So once again money matters with Mike dot com is the website now the on this week's show Mike we do have a lot as I mentioned we mentioned Medicare there so that is that's number one checked off the list here we've got an inflation demonstration on the way talking about food prices ahead of Turkey day. Yeah, I can't believe we're almost there already. We're also going to talk about how to manage that accumulation phase. That's sort of the main part of the show today. And it really is important, I think, a lot of people. Do focus too much on that one big number and not exactly how that one big number translates to being spread out across their retirement years. Right. And then so there's also, you know, talking a little bit more about that. And really that's kind of the number one mistake that we see people make when preparing for retirement is not having that plan. We'll also have a cost cutter to talk about. And this is going to be one I think that listeners are going to really appreciate because it's about kicking the IRS out of your retirement plan. And hey, man, everybody loves that, right?

Mike Zaino:
Amen. And amen. Can I get an amen?

Producer:
You can. You got I can hear the amens from over the airwaves right now, from all the listeners in the car or at home, wherever they might be, saying amen and amen and amen to that one.

Mike Zaino:
Amen. Right. And all the people said.

Producer:
Amen. Oh, goodness. But so, folks, as we continue on here, you know, as the markets have been up and down and up and down and more down than up here lately, but hopefully things are going to going to turn around here. And so you need some help. You need some guidance through these times about how do you keep your money safe and keep it growing. Right. So we just so glad to offer full retirement plan consultations to everybody who listens to this show free of charge. Absolutely. 100% free of any charge in any obligation. So if folks do that, if they go to MoneyMattersWithMike.com Or they call the number 704 560 1573, what is that experience like?

Mike Zaino:
Mike So the first call is just an introductory call, you know, ten, 15 minutes where we kind of get to know each other and what we're trying what you guys are trying to accomplish out there and listener land. Okay. The bottom line is you are only going to work with me if I can do better for you than your current situation. I get to analyze your specific and unique financial situation because no two people are the same. All right. We'll discover exactly how much you're paying in fees, whether that's in your IRA, whether that's in your brokerage accounts, whether that's in your 401. Ks, and will help eliminate those unnecessary costs for all of those and any other retirement savings accounts that you have. So please get in touch with us. We would love to answer your questions about your specific situation and also help maximize your Social Security benefits. That's another thing that we put out there in addition to Medicare. In addition to your retirement plan.

Producer:
Yeah. And any time we talk about income in retirement, of course, Social Security is a big one for everybody. So we've got to get that taken care of as well. Money Matters with Mike dot com once again is the website for that free consultation or 700 45601573.

Producer:
Want to know where your hard earned money is going? It's time for an inflation demonstration.

Producer:
Yes, it is. It is that time of year, folks, when you hear the gobble gobble. It might not be a turkey. It might be inflation gobbling up your Thanksgiving budget this year. Mike, it's it's some big numbers that we're seeing as far as the prices of some very popular food items and how much that has gone up since last year, 12 months ago.

Mike Zaino:
Yeah, it's ridiculous. In September, the American Farm Bureau Federation announced that families get this can expect to pay record high prices at the grocery store for Turkey. The retail price for fresh, boneless, skinless turkey breast reached a record high of $6.70 per pound in September, which is 112% higher than the exact same time last year. In 2021, when prices were around $3.16 per pound. Unbelievable. All the things that we eat at Thanksgiving time, whether whether it's your pies or your turkey or your vegetables, I mean, butter has gone up by like 32.2%. Your flour or other prepared mixes up 24.2%. All your bakery products, whether they're frozen or refrigerated pies, tarts, turnovers, all of those have gone up 20%. Canned fruits up 18.6%. Uncooked poultry, including Turkey. We're talking about whole turkeys up 17%. And then all vegetables are up an average of 16.6%. So, you know, bottom line is that Americans are paying much, much more for food.

Producer:
Yeah, the sticker shock is real at the grocery store where no matter where you where you go. I was glad, though, there was a particular chain and I won't mention the name of the chain because I don't want to give a free advertisement here. But there was one particular chain that was lowering their prices for Thanksgiving meal items like that to 2019 prices. So that's that's great. So like pre-pandemic prices before any of this inflation really got crazy for us there. So that that was, you know, some good news that at least they were doing that it was everybody would do that. But, you know.

Mike Zaino:
Kudos to that chain for sure.

Producer:
As a matter of fact, that is 100% right, because that's a great thing to do for folks and not so bad for, you know, the marketing standpoint for them, I'm sure, to get people in the door. But yeah.

Mike Zaino:
Excellent, excellent way to to market your brand.

Producer:
For sure. So I got to ask, though, Mike, as we're talking about Thanksgiving, as we're talking about all the food and as I'm getting hungrier, what's your what's your favorite thing you eat for Thanksgiving, man?

Mike Zaino:
You know, everybody says turkey, right? And we have always had turkey, but we've also had ham. Sometimes we'll mix it up and have have a lasagna. I mean, it's just we do the traditional stuff, but if I had to just pick my absolute favorite, it's it's hard, really, really, really hard to beat my wife's turkey with mashed potatoes and gravy, especially when you throw in her homemade cranberry sauce. We've discussed in the past how my wife is an excellent chef. She, you know, I call her the culinary number 23, which if you out in the listener land don't know who I am referring to 23 Was Michael Jordan, arguably the greatest basketball player in history? Well, I call my wife the culinary 23 because it doesn't matter what she's making. It's delicious, y'all. So I am blessed and it's a miracle I don't weigh £400.

Producer:
Well, there you go. I was going to say that's that that's a great, great thing because I would I probably would if I were in your shoes at this point in time. No, I would have to say so. I'm weird. I like I love cranberry sauce and I've had cranberry sauce that's homemade and all of that. And it's great. For some reason. I guess it's probably a it's like a memory thing. I love the canned cranberry sauce that comes out of the can still shaped like the can. I don't know why I love it. And my mom and I are like the only ones in our family who actually love it. And so we we are.

Mike Zaino:
Like that with Kraft Macaroni and cheese or cheese and macaroni. Like, I prefer that to to my wife's. And I hope she's not within earshot because she'd probably slap me.

Producer:
Hey, number 20. Number 23.

Mike Zaino:
That brings me back to college days. We're just throw some hot sauce in there and we're good to go.

Producer:
There you go. Your own culinary experience. But I love that. I would have to say, though, I think my favorite thing is my mom's chocolate pecan pie that she makes for for Thanksgiving.

Mike Zaino:
Just sounds yummy.

Producer:
It is extremely yummy. But unfortunately.

Mike Zaino:
You might have to save me a slice of that. I.

Producer:
I'll do that. I'll do that. I might come to the to the Zaino household on Black Friday. If there are any leftovers there, I might bring some leftovers and partake.

Mike Zaino:
I'm sure. I'm sure there will be leftovers in Matt. You're always.

Producer:
Welcome. Well, thank you, sir. I appreciate that very much. And we'll try not to break the bank as we plan for our holidays this year.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
Well, our words of wisdom this week come from a guy named Robert Kiyosaki, who is a successful American businessman and New York Times bestselling author of more than 26 books. You might remember the Rich dad, Poor Dad series of books that's very, very popular. Been translated to 51 languages. It sold over 41 million copies worldwide. This is a guy who knows a thing or two about what he's talking about here. And Robert Kiyosaki said this, quote, It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. Very, very good stuff there.

Mike Zaino:
Yeah, that is that is pretty poignant. And I think the the part that hits me the hardest is that how many generations you keep it for or your family is able to perpetuate that wealth hungry for.

Producer:
Something that you on.

Mike Zaino:
Here's some meat on the bone. Generational wealth refers to financial assets that are passed on by one generation of a family to another, and those assets can include cash stocks, other investments, as well as real estate and family businesses. And so to build generation wealth excuse me, generational wealth that you can pass on, you need to acquire assets or save money that you won't need to spend in retirement. You then pass down the money in assets to children or other younger relatives. And this is important because it helps to keep the stability of the family and can help to ensure that the next generation has an opportunity to succeed. So while putting together today's show, I came across a really good article on Clever Girl Finance that simplified the concept of building generational wealth. It made it look easy. You simply have to acquire assets or save cash that you don't intend to spend in retirement. And again, you then pass those assets along to the younger generations when you pass away. Sounds easy in concept, but can be difficult to put into practice. If you are struggling to build your savings, then saving for the next generation can sound absolutely overwhelming, and that's completely understandable. By the way, it is critically important to nail down your own retirement plan and your other financial goals before you start saving for generational wealth. But once you have a handle on your current finances to fund your golden years, then it is time to start saving beyond that. So how should you start saving for generational wealth? Well, here are some of the best ways to start preparing to leave a legacy of wealth for your children and your grandchildren.

Mike Zaino:
Number one, invest in the stock market. Right? The stock market is a great vehicle to help create general generational wealth over the long term. If you're aiming to build that wealth that perpetuates generations, then it is a great option because it has the potential to continue growing for many, many decades. But investing in the stock market can be scary, especially if you've never tried it, especially this year, right? Just think of it as being on sale. Stocks are on sale and over the long haul, the stock market is going up and is an excellent way to build wealth for both your time and beyond. Number two would be to invest in real estate. Real estate is another major way to help build wealth for the long term with the potential for steady cash flow payments from tenants in addition to increasing cash or excuse me, property values. Over time, real estate can be a reliable path to wealth. Number three, build a business to be able to pass down family businesses have the potential for great success, and more than 30% of family owned businesses transition to the second generation. Imagine being able to hand over the keys to a successful business to your kids for a great chance of that successful transition. You should include your kids in the business from a young age. They need to know how the business operates from the ground up and on every single level in order for them to continue the business.

Mike Zaino:
But don't expect them to take over if they show no interest in the business that you've built. If they are either unable or unwilling to take over operations, then you should consider selling that business to be able to fund generational wealth in another form. Number four, take advantage of life. Insurance. Life insurance provides the opportunity to protect your family in the event of your untimely death. Without your income, your spouse, your children, they may be forced into a less than ideal financial circumstance. If you make the effort to invest in a life insurance policy now, then it could prevent financial tragedy. Plus, your family members will already have enough to cope with if they lose you unexpectedly. Not not sure what type of life insurance coverage you should be pursuing for your family. Give me a call to learn how you can use this as a financial tool to safeguard your family's financial future. This is one of the top ways that the wealthy pass on generational money to their heirs. And the best part, it's all tax free wealth. Number five invest in your kids education. In many cases, education can provide a way for your children to support themselves, and we all want that as our goal. Nobody wants to have a 30 year old living in our basement mooching off mom and dad, all right. By obtaining a college degree or a trade skill, many of those kids have the opportunity to then pursue high paying jobs that can help them navigate their own finances.

Mike Zaino:
And so if you have the ability to help your children further their education without any debt, then you're helping to set them up for a much, much brighter future than many of their peers. Because as of 2022, the average student loan debt for college graduates was almost 38,000. It's possible, if not probable, that number will climb even higher in the future. Imagine the amount of financial pressure you'll be able to lift from your kid's shoulders with the ability to pay for their financial education. Right. And regular education. So if you have the ability, definitely set them up for success. Number six, create multiple streams of income. And we've talked about this before when it comes to building generational wealth, creating multiple streams of income can make it much easier. In fact, the average millionaire has seven streams of income and there are a variety of different income streams. But one of the best is known as passive income. Active income is when you trade time for money, like going to your job, or if you have a side hustle, maybe you cut grass on the side. Passive income is when you earn from your assets after the initial set up without much time. So for instance, rental properties, if you write a book, you get book royalties. If you happen to have money that you're able to lend out and charge interest on that, those are examples. So you do have to put in some work on the upfront side.

Mike Zaino:
But once the initial foundation is built, you continue to earn from those efforts. And then last number seven is pay yourself first. I think we talk about this on most shows, saving and investing money for the future is key for how to create generational wealth. And the easiest way to save more money is to pay yourself first. For instance, as soon as you get a paycheck, you deposit money into your savings accounts, your investments accounts before anything else. Because if you wait, guess what? You're not going to have anything left over. And even better way is to automate it so that once you set it, you forget it. So those are some steps that will help you to build generational wealth. But there are some additional things that you can do in order to pass that wealth on to the next generation. If you want to ensure a smooth ride for your financial assets as they transition, number one, create an estate plan because that is absolutely essential to securing an easy transition of those assets. The larger your estate, the more complicated the plan will become. And at any stage, I'm going to recommend that you consult with an estate attorney about how to create that plan. At a minimum, you need to write a will. A will may be included in your estate plan, but it's important to create one. Even if you don't have an estate plan, the will should include your exact wishes. The more specific you can be about your plans for any of those assets that you've accumulated, the better.

Mike Zaino:
Because without a will, it's not uncommon for things to get ugly between surviving family members. Think about it. Emotions are high because they've already lost you and you can prevent a lot of ugliness and financial trauma when you set clear guidelines in your will. And lastly, you need to name beneficiaries on all of your accounts very, very simple way to ensure that your accounts pass easily to that next generation is to name them as beneficiaries on all of your. Counts. And if you were to pass away by doing so, by naming them, the beneficiaries receive the funds with minimal effort, and it only takes a few minutes to set these things up and let people know who your intended beneficiaries are. But it can save countless hours for your family later on. So building wealth to last for generations is not an easy feat, but it is an admirable undertaking. And after you have your own financial situation under control, safeguarding your family's future is that next step. So take the time to both create and implement a wealth building strategy that works for your family. Not everyone wants to invest in real estate or build a business, so find something that works for your situation. Whatever strategy you choose, just make sure to pass your financial knowhow down to your children so that they're already one step ahead of the game as they make their way into the world. And that is today's meat on the bone.

Producer:
And that is a lot of great info in the Meat on the Bone segment today. Let me tell you and folks, if you want some help with doing any of those things and guidance along the way, go to MoneyMattersWithMike.com. That'll get you started. The free consultation. Their money matters with Mike dot com or call 704 560 1573 is the number directly to Mike Zaino. And Mike, a couple of things in there that I really that really sort of stood out to me that are so important and I think overlooked sometimes the number one life insurance. I think the importance of having that and that really stands out to me for a particular reason, because my family has benefited from that within this past year, right when my dad passed away, that was just so important and gave us so much peace of mind. And that means so much to family members when they have that. And as you say, completely, 100% tax free when that money is is distributed out. And just a lot a lot of help there. And then also the part about when you're when you're paying yourself first about automating that that setup. I know that if I didn't if I had things that in my life that I didn't automate, I would just forget them because that's me. I get distracted by other things. Life gets busy, life gets in the way. And so that's such an important thing. If you have that set up and it's and it's there and it's going and it's just in the background and like you say, like the old infomercial used to say, set it and forget it. Right? If you do that, that really goes a long way towards setting you up for success.

Mike Zaino:
It does. And I'm just going to expound on those two points. Right. Life insurance, the younger you are, the healthier you are. So the younger and healthier you are, the cheaper it's going to be. And life insurance is not just death insurance anymore. It can protect you if you die too soon. All right. A tragedy with the death benefit. It can protect you if you live too long, if properly structured, can actually provide you with tax free income for life and then it protects you if you get sick in between. So chronic critical terminal illnesses, the new school type life insurance policies actually have living benefits that you don't have to die in order to take advantage of. And then with the second point, setting it and forgetting it, if again, if you wait to pay all of your bills and then invest, guess what? You're not going to have anything less left. So it's that important to make sure that you pay yourself first If you can't take hold of your financial future and do anything, pay yourself.

Producer:
First. Yeah, that just take that off the top and have that be built in and then let everything else fall. Fall where it may from there.

Mike Zaino:
And it will. Yeah.

Producer:
Absolutely. Well that is a lot of great info there in our Meat on the Bone segment. And from the Meat on the Bone segment, we go to kind of the meat of the show here today, which is the title of the show The Accumulation Phase. And I know that that sometimes I can see through my crystal ball or through my my magic glasses or whatever you want to say and see. Right. Right. To our listeners right now. And some of them, I see them kind of confused look on their face. What in the world is he talking about the accumulation phase? So as we start talking about this phase of life, define it for us and just sort of lay the groundwork for this discussion here.

Mike Zaino:
Yeah, So so think about this. All right? Most people go to work 40 hours a week to 60 hours a week. That's most people. And they do that for 40 to 50 years of their life. And during that time, they're putting away money as best they possibly can. And they're building this nest egg that is called the accumulation phase. But once they reach the pinnacle and they're able. To retire. Then the next phase, the de-cumulation phase comes in. That's the process that you go through during retirement where you switch your focus from saving to using what you saved your assets in order to generate the necessary income and make sure that the distribution of those assets and funds and the preservation of those assets and funds is there for the rest of your life. So during the accumulation phase, again, you're saving for retirement. All right. So you're putting cash contributions into whatever vehicle that you have chosen. You're focused on growth, trying to grow it as big as you possibly can. And these for most folks start in as early as their twenties and go all the way through retirement. So these are longer term investment horizons for most folks. All right. The de Cumulation phase, you've kind of eclipsed the top of that mountain, right? And now you're starting to take money and spend it during your retirement. So it's a net cash drawdown. You're utilizing those assets. And instead of growth being the focus, your focus on the certainty that that money is going to be there for you until you die and then for generational wealth beyond. So for yourself, you have a much shorter investment horizon.

Producer:
Yeah. And so that yeah, that's in its essential sort of definition and that's what we're talking about. We're to instead of putting money in, you're taking it out. But there's a lot more of course that goes into it as you, as you just say there. And it's something that not a lot of people necessarily think about is like, okay, how you know, I spent all my life, as you say, saving, putting, putting this away, investing and all that because I'm working my way up to whatever number I have in my mind. But then, okay, what do I do after that when I when I retire, when the paycheck from the job is no longer coming in, what do I do then? You know, And then the baby boomer generation is huge. And so a lot of our listeners, I'm sure, are thinking about that big time right now.

Mike Zaino:
They are. They're both entering and approaching retirement, and that's leading to a major shift in focus from that accumulation in building up to a retirement to the accumulation and retirement income. So, Matt, the problem is that most people who are approaching retirement, they're really uncertain about how they're going to manage their retirement assets that they've been able to amass and how to generate consistent income without outliving their money. And that's the number one fear for most retirees is running out of money.

Producer:
Yeah, I remember we did a story once on this show talking about how this the study found that really retirees fear running out of money in retirement even more than death itself. I mean, it's a real thing. Like, okay, you know, if I'm if I if I die, I'm not here to worry about it. But if I live long enough and run out of money, what in the world am I going to do? You know? And that's a that's a huge, huge fear.

Mike Zaino:
It's gargantuan. And in fact, a BlackRock study found that only 36% of Americans are confident that they're going to have the income they're going to need in retirement, while 55% are concerned about running out of money in retirement and without thoughtful, trusted guidance and planning. All right. This could have dire consequences for the next generation that's seeking income to sustain a consistent standard of living. And so my goal when we talk with you is we're going to figure out where your income is now minus your expenses now. And then we're going to look at what you've saved for retirement, because, again, we're going to try to identify whether there's an income gap, which means you're going to have more month than money. And if so, we can take actionable steps to to minimize or completely eradicate that gap and make sure that you feel confident enough in your plan. I mean, because the ultimate goal would be to maintain or at least be able to maintain or close to it the same standard of living that you had while working in retirement, except without the work part. Now, in retirement, these are your golden years. You're supposed to be able to enjoy doing stuff, whether it's on your own, with your spouse, with your family, the kids, the grandkids. Your friends taking vacations. That's the time to look forward to. Not the time to fear, because you haven't planned accordingly. And so, again, when we sit down, we meet with you. We give you a concrete plan that you can feel 100% confident in, that you know you're not going to run out of money as long as you stick to that plan.

Producer:
Yeah, And that I mean, peace of mind really is is what it's all about now, of course. And in the future, you don't have to get rid of that fear. You get rid of that fear to begin with. And I feel like it's just you can actually enjoy your retirement at that point if you're not worried about running out of money. If you want to go, you know, if if part of your plan, if you really want to go in retirement to to Bora Bora or wherever, and sit on the beach and sip an adult beverage of your choice, like you can do that and not worry about, oh, okay, does this am I going to run out of money? Is this going to affect that nest egg that I've saved up? What what is what's going to happen here? You've got it planned out. You've got it built in. And that really peace of mind, I think, is the is the thing that comes to mind there for me.

Mike Zaino:
Absolutely. And anything that costs you your peace of mind is way too expensive. I mean, it is just way too expensive. You need to be able to lay your head down at night and not have to worry about what's going on the market and how that might negatively affect your portfolio. And retirees need retirement income solutions that can provide spending confidence for both essential spending needs as well as those discretionary wants so that they can enjoy the lifestyle that they've worked so hard for over all of those years.

Producer:
Yeah, you know, the vacation in Bora Bora, probably not a need that would fall into the want category, the discretionary category.

Mike Zaino:
That's on my bucket list.

Producer:
Yeah, well, there you go. Well, I hate that.

Mike Zaino:
I want to stay in one of those over-the-water bungalows and do some fishing from my. From my dock.

Producer:
How cool would that be? That's. That's pretty awesome. I actually had some friends who they vacationed somewhere in Mexico several years ago and they stayed in kind of like this. It's like this bungalow out over the water and they're kind of by themselves that just looked. So I'm like, Oh, I want to go. I want to go so badly. But yeah, so that that would really, really and truly fall under the discretionary the wants category. It's one of those things that, oh, that would be great to do that. But it's not food, water, shelter, any of that stuff. Right. So so making sure that you have those different categories broken down, knowing what that is, is all going to be part of the plan. And having a plan is really the solution here. But what is the plan? What plan is right for you might be different than somebody else. First of all, we got we got to say that here right up front, because there's no one size fits all. But what's the solution for for people, you know, as they think about, you know, that accumulation phase in retirement? Hopefully we've been sparking the getting the synapses firing. Thinking about that.

Mike Zaino:
Yeah. So so research from the Stanford Center on Longevity looked at different ways investors could potentially utilize assets and then combine a mixture of investments and insurance products against different retirement income goals. And they evaluated systematic withdrawal plans from investment portfolios. They evaluated annuities, and they took all of those against the following criteria. They looked at the amount of income, they looked at the access of savings. They looked at both pre and post retirement protection. They looked at inflation hedges and protection, and then they looked at lifetime guarantees. And one of the key findings from their research was that from a purely financial perspective, believe it or not, annuities often provide higher yearly income when compared to systematically withdrawing from investment assets. So, I mean, I thought that was, you know, if nothing but but just an affirmation of what we preach on this show in that when you are in retirement, it is not about the fact that you have a couple hundred grand or a couple of million or anywhere in between saved for retirement. It's not about that big magic number. Matt, as you mentioned earlier, it is about having those guarantees in retirement. And if you have just just a legendary institution, the Stanford Center on Longevity, you know, telling you that, hey, annuities often provide higher yearly income. Then again, that's just great, great news and affirmation for everything that we've been talking about. Right. So if you are in the retirement red zone, all right, you're you're you're trying to punch that in for a score. Okay. And that's somebody that's within five years of retirement or somebody who has retired within the last five or. Years. Please give me a call so that I can test the strength of your plan. Don't make the number one mistake people make when they are planning for retirement. In that again, thinking that your big magical number is going to be a solution for you. We definitely recommend that you start focusing more on the strength of your income plan than the size of your nest egg, because lifestyle is definitely more about income than it is about total assets.

Producer:
I love that. Ella and I love bringing in the retirement redzone kind of illustration there because it's football season. People think about.

Producer:
You're in you're inside the 20, you know, you're inside the opponent's 20 yard line and you are about to make that touchdown. And hopefully now do you want a touchdown? Do you want to have to settle for a field goal? That is the question here. And you want a touchdown and not just a touchdown on an extra point. You want the two point conversion, you want the whole thing, you know, so you get you want to score as many points as you possibly can in retirement. And that's all the football analogies I have at the moment. But if you want to take advantage of the the advice, the knowledge and all of that kind of thing that is available to you, I know a guy, his name is Mike Zaino, and you can go to his website at Money Matters with Mike dot com it's MoneyMattersWithMike.com All one word all spelled out there or you can give him a call and this number as I say out all the time rings right to his phone right there in his pocket. There it is It's on his desk right now. As a matter of fact. 704 560 1573. So, Mike, while we're on this subject, kind of talking about annuities and that Stanford study there that you had quoted really did open my eyes to because I would imagine that annuities because knowing now what I know about annuities have and having worked with you here for a while, knowing what I know about annuities, it's it didn't surprise me that over the long term, annuities could provide more income to folks because you can get a guaranteed income for the rest of your life using an annuity that's that's built in. Right. It's as we see the different annuities that are out there. But the thing that really surprised me was that they often provide a higher yearly income. So on a year-to-year basis than drawing down your investment assets, that's really surprising and a shocker to me and I think should open a lot of people's eyes or at least make a light bulb go off.

Mike Zaino:
You know, for sure thing. I mean, if you're concerned about outliving your wealth, then annuities are a great solution. But there are a lot of different types of annuities. Some of them I like, some of them I loathe. So let's talk about the ones that I'm not a fan of. I'm not a fan of variable annuities. I call them scary bull annuities because of the word variable. What is variable mean? Matt It means change. And so I'm going to suggest that you avoid a variable annuity at all cost when you're nearing or in retirement, because the last thing you want to do is have that change to the negative. You don't want to be losing money right before or right while you're in retirement. Then there are things like single premium, immediate annuities, and that's where basically you're paying a company to pay you back your own money. So I don't feel that those are necessarily the best option for growing your money. And most pensions are actually funded with this type of annuity, a single premium immediate annuity. And then you have fixed annuities which can be deferred or immediate, but the deferment of a fixed annuity, you're typically going to participate in a in a relatively low percentage on that fixed account number.

Mike Zaino:
All right. The one that I feel is just right using that Goldilocks in the three Bears analogy is one that's called a fixed indexed annuity, because your money is put into an index that mirrors the market. And there are lots of different indices that you can place your money into, whether it's the S&P or the Nasdaq or, you know, Barclays as an index. Goldman Sachs has an index, some BlackRock has an index, some some of the largest money managers in the world offer these indices where your money only participates in the gains of the particular index or indices that you allocated your funds to. So when the markets drop, when those index yield negative returns, you're 100% principle protected. So if you plan on investing in a series of annuities, we. Definitely would recommend the fixed indexed annuity to help protect yourself, insulate yourself from both inflation and the rising cost of living.

Producer:
And I remember a few weeks back and folks, if you want to go to Money Matters with Mike dot com, you can actually see the video on this that we did We looked at and we looked at it with an index universal life policy. But the same is true here for a fixed indexed annuity, also for from a retirement savings and growth standpoint where if you look at the chart right of say like you know, the stock market, if you look at the Dow Jones or the S&P 500 like chart over the last year, let's say it looks like an EKG, right? It's just going up and down and up and down and up and down. And you know that that's a roller coaster ride that I'm not necessarily wanting to take. But if you were to look at something like a fixed indexed annuity, that it looks like stair steps, because while the other thing that the markets are going down, the fixed index annuity not going anywhere, it's staying right where it is. That's why we say often zero is your hero, right? Because if that index falls below zero, if it if it goes down, you don't lose a thing. But you get a good chunk of those gains when the market goes up. So it's a lot of protection. And, you know, based on you point to point annuity, which is like they'll take the index that that that annuity is tied to at one point in a year or a month or whatever. And then at the other point, the difference between those two is how that annuity, the fund either grows or stays the same, and then when it grows, that growth is also protected going into the future. So not only is your principle protected, the growth on top of it is as well. It's just a really great solution. I think for a lot of people out there who are looking for some security in a time when the market really does look like if you look at the even the last couple of weeks here, looks a lot like an EKG.

Mike Zaino:
It does, Matt. And I think one of the biggest benefits of the annuities that we use, number one, we are only using highly rated multibillion-dollar companies that have been doing this literally since for some of them for almost 200 years. So these annuities are not a new financial solution. They have been around for literally centuries. And but buyer beware because not all annuities are created equally, and especially if they are offered to you through your employer. Most of the time you are trading your asset for a payment of X, whatever that payment is, and it's a single life annuity that has most of the time level payments. No additional features, which means if you as the participant pass away, your family gets nothing. The insurance companies get to keep it. We definitely don't like those types of annuities for our listeners. So the listenership that we have has access to the new school annuities that also don't lock up your money, they provide access. Some liquidity features are built into these products so that if you ever need access to, I don't know, ten grand, 20 grand, you have it and you can draw that out of your annuity product. So not only do you have upside potential, you have downside protection, you have liquidity features that are built in. And I think the best part of them is the ones that we utilize have zero fees, mat zero fees. So people who have bonds up to 40% of their portfolio. We've been doing bond replacements like crazy because bonds are down 15% this year and there are fees involved with them and penalties if you get your money before maturation. Right. So why would you ever overpay for an underperforming asset, especially when there are options much, much more suited for what most people these days are looking for in retirement?

Producer:
Yeah, it's safety, some security, some growth there that that will move upward with the market, but not down with it as well. And that's all part of it. And having that liquidity, as you said, stuff happens that the air conditioning breaks the you need a new roof, all of that kind of thing, that life goes on and those those kinds of things happen because life is life, you know. And so being able to access that is is a great thing for folks as well. Money Matters with Mike dot com is the website folks you can go there and request that full consultation. We'll talk a little bit more about that before the show is over.

Producer:
But first here's the cost cutter of the week.

Producer:
So of course, during this time of inflation and. Good uncertainty and all of the things that go along with both of those situations that we find ourselves in here. We like to give our listeners ways that they can save some money where they can. And so the one that we have for you this week, folks, is is a good one. It's a big one. And it's about a particular type of retirement retirement account. It's called a Roth IRA. And so we want to talk about implementing a Roth IRA to as everybody loves, reduce your tax risk and your tax burden in retirement.

Mike Zaino:
So so, Matt, when when people think about IRAs, not everybody is clear on what a Roth IRA is or if they have a traditional IRA, whether or not they can just take that money and put it into a Roth IRA, which is not allowed without first paying the taxes on that money. See, traditional IRAs, you're taking the money and deferring the taxes to a point in the future where you hope you're going to be in a lower tax bracket. But that's not necessarily the case, especially the way that inflation is rising and the cost of living is rising. I ask people all the time, do you think taxes are going up or down in the future? And I've never gotten an answer that says, Hey, Mike, you know what? I think the taxes are going to go down in the future. In fact, it's just the opposite, right? We know that taxes are going up in the future because the government has two choices. They can spend less money or they can tax more. And I think a shocking statistic and people it's just a fact, it's not really a statistic is that in the sixties, the current 24% tax bracket was 56%. Think about that for a minute. You're planning on being in a lower tax bracket in retirement and then they raise the tax brackets on you and you're actually in a higher tax bracket. So that's why the Roth is such a powerful vehicle when it comes to generating tax-free retirement dollars.

Mike Zaino:
And so, you know, saving on taxes by literally deleting the IRS as your partner during retirement years is likely the largest saving effort that you can implement for your retirement. Roth IRAs are invested with after tax dollars and qualified withdrawals from that Roth IRA plan are tax free, and the growth within the account is tax free. And so what a lot of folks are interested in doing if they don't have a Roth already set up, is taking some of the money that they have in their traditional IRAs and then figuring out how much room they have within their tax bracket that will allow them to convert X number of dollars at the same tax rate that they're paying for the rest of their money. So they're not having to pay any more tax dollars and then convert that over to a Roth whereby it will grow tax free for the rest of its life. And so, again, a ladder conversion by doing this is taking some of your funds from your IRA to your Roth IRA, but doing it over a period of multiple years in hopes of reducing the amount of taxes that you're going to pay with each annual conversion. And if laddered correctly, IRA owners can keep their tax rates at or below 24% and dramatically, I mean, dramatically reduce the taxes that they'll pay over a 30 plus year retirement.

Producer:
Matt Yeah, and we talk about this a lot, but it's it bears repeating is that we talked about life insurance being tax free earlier. The only other type of tax free investment type of tax free account like this is that Roth IRA. You know, that's really the only two that people, you know, can can take part in. And that has got to be a part of your plan because nobody likes paying more taxes than they have to.

Mike Zaino:
Yeah, nobody likes that. I mean, think about it. Do you love the IRS so much that you are willing to give them more of your retirement dollars than you give your own children? Or meat on the bone. We talked about generational wealth. Please don't underestimate the importance of having a tax plan for your retirement and get in touch with me so I can start helping you with your own plan today.

Producer:
Yeah, and it's a comprehensive one, a comprehensive plan, not just some, you know, run of the mill. Like we went and picked this off the shelf at the retirement plan store. Kind of a thing. This is customized for you. And it's actually the consultation 100% free of charge. And as we say, money matters with Mike dot com is the website MoneyMattersWithMike.com And you can call 704 560 1573 and a few more minutes here Mike but in our final minutes, what are some things that you can provide when you do start working with someone you know after they give you a call and and they have that free consultation? I know that there's a lot of information that you can give them, because I think one of the myths here about working with somebody is either A, it's going to be too expensive for me to work with a financial professional, right? Or B, I'm not really going to learn much when I do. They're just going to give me some generic spiel about, oh, buy this or do that, that they do for everybody. But that's not the case.

Mike Zaino:
That. That is not the case because, again, one size doesn't fit. All right. So the first thing that I'm going to seek to provide you and identify at least, is whether or not there's a retirement income gap. So we're going to do an analysis. Hopefully you don't have more money than money with what you've been able to save thus far. Hopefully you have a surplus, but then we'll develop a plan for both you and your spouse. If you're married, that'll take you all the way, at least through your 95th birthdays, because you have to consider your longevity risk. How long do you plan on living? And it would be it would be catastrophic to say, well, nobody in my family has ever seen 85. And then you wake up one morning and you're 86 and broke. So no one knows when their time is going to come. So bottom line is you need to plan on living longer. It's better to have the money and not need it than to need it and not have it. So a financial plan will definitely identify those and a tax-efficient plan for withdrawals from that retirement nest egg. You know, I can help set your savings up correctly with a combination of life insurance, a Roth IRA ladder, or both. Okay. And then we'll also look at your Social Security plan and see if we might be able to structure it in a way that maximizes how much you're going to get each and every single month in in in retirement. And some people we suggest delaying Social Security just because the benefit is going to increase an average of 8% per year when you delay.

Mike Zaino:
So it might make sense to draw down a little on the income side from your assets to allow your Social Security to go even higher. And we go from there. I mean, bottom line, market conditions can't guarantee an 8% growth per year. So we think it's an absolutely smart idea to delay Social Security if you're able, because this increase is built into Social Security, it's automatic. As long as you delay people that take their Social Security, as soon as 62, they're giving up $0.25 on the dollar. You're getting you're giving the government a discount. All of these things are included in the complimentary consultation. And again, you're only going to work with me if I can do better for you. So even if you do have an advisor, it never hurts to get a second set of eyes on your situation. And if you're in good shape, Look, I'm not trying to take you away from your advisor. I'll tell you you're in good shape. But if there are any things that I see that maybe we could tweak a little, that will put you in a better place. I'm going to tell you about them and whether or not you take me up on that again. My job is not to convince you I don't twist arms. I am not a sales person. I am an educator at heart. So bottom line is, I'm only going you're only going to work with me and I'm only going to work with you if I can do better for you.

Producer:
Yeah, if it's the right situation. And for that information about the free consultation to contact Mike to get one, you can go to Money Matters with Mike dot com. Or once again the number is 704 560 1573. Well, Mike, that brings us to the end of the show. We are just out of time, but I have enjoyed it once again, sir, as I always do. And as I as I say, I've learned something once again. So I'm several things today, actually. So thank you for all that you do to educate not only me, of course, but all of our listeners. I appreciate it and we'll talk to you next time.

Mike Zaino:
Guys out there in listener land again, without you, this show does not exist. So if you know anybody that could benefit from listening to the show, whether it's on Saturdays at noon, whether it's via podcast, do me a favor and spread the word again. A rising ship lifts all boats. I hope you have an enjoy the rest of your weekend. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation visit Money Matters with Mike dot com, MoneyMattersWithMike.com Or pick up the phone and call 704 560 1573.

Producer:
Not affiliated with the United States government, Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of the respective owners. AmeriLife assumes no responsibility or liAbility for the content of this message. The information contained herein is provided on an as-is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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