Are You Ready for Retirement? The Real Risks You Need to Know!

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

Speaker1:
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Speaker2:
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.

Speaker1:
Welcome to Money Matters with Mike, with your host, Mike Zeno. 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 Zeno.

Speaker3:
What's up, what's up, what's up? It's Mike Zeno coming to you casually from Fort Mill, South Carolina today. Happy Saturday people. What a great time to be alive in these United States of America. Money matters with Mike as 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 the heat again. On today's show, we're going to show you how to safely make the leap of faith into your golden years. Okay. And 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. Matthew, how are you today, sir?

Speaker2:
I'm doing great, Mike. I hope you are as well. I know you have been traveling, kind of traveling the world a bit and and been busy as well in the process and kind of getting back into the swing of things at home. So I'm glad to see you today, sir.

Speaker3:
Yeah, I tell you what, brother. I mean, we were fortunate enough to have AA3 and a half week stint celebrating my wife and I's 30th anniversary. We went to Scandinavia, so we went to, uh, Denmark and Sweden and Norway and Finland, and we had a great time. And then coming back, um, I had my daughter, um, finally found a job. So proud of her. She is the graphic designer, uh, for the Shakespeare Theatre Company in Washington, DC. And so she's been working remotely for about six weeks now, and we just got back from DC trying to find her an apartment. So, uh, that's why I'm coming to you a little bit more casual today, but, uh, hopefully you guys can understand life gets in the way sometimes, and we just improvise, adapt and overcome.

Speaker2:
So that's what you got to do. You know you absolutely do. And I don't know, by the way, you mentioned, uh, Sweden and I don't know if you went to this particular place while you were there, but one of my favorite places that we visited when we were in Sweden, we went to Stockholm and saw the the Vasa museum. Did you go? Absolutely. It is just incredible. It's this big. If you don't know about it, folks, it's this big ship that's, like, the most ornate thing you've ever seen in your life. And on its maiden voyage, it got, I don't know how many hundred yards out into the water and sank immediately, um, because it was built so poorly. Great to look at. Not so great to ride in, I could imagine. Uh, but they've restored it and all this, it's it's just cool and very fascinating, too.

Speaker3:
I feel like it was, I mean, I we took a couple of Viking tours while we were there. I mean, um, just the folks in Scandinavia are so incredibly nice and polite. Everybody speaks English. I mean, it was just a really, really good time. So much different than other parts of Europe that we've been fortunate enough to visit as well.

Speaker2:
Well, welcome back to the good old US of a here. And, uh, we've got a lot of great stuff to get to on the show today. As you in a teed up here at the very beginning, we're going to show folks how they can sort of make that leap into their golden years and do it safely, not do it, you know, not not jumping out of the plane without a parachute. Here, we're going to teach you how to build that parachute and make sure that it functions so that you can safely go into your retirement years. We're going to also discuss how much risk is appropriate for your age, and how you can sort of determine that, and of course, how you can work with Mike Zeno to determine that as well. And he can help you make sure that things are appropriately balanced in your financial life. We're going to play a little game of right or wrong. We've got an inflation demonstration. So much to to come up here. Also wanted to say thank you so, so much. If you are listening to us on the radio, on WRI, or if you're listening to us via the podcast, however you get us, we're just thankful you're getting us. And we really do appreciate it, because without you, we do not have a show, as Mike Zeno so often says. And so we just really, really do appreciate each and every person who is listening.

Speaker3:
Mike 100%. Matt. Um, I mean, bottom line is the whole reason this show exists is to help as many of you guys not make the same financial mistakes that I made, right? Um, yeah. I sit and do a radio show now and I write articles for Forbes magazine. And, you know, I speak on Capitol Hill, uh, you know, as far as advocating financial awareness. But I do all of this because I made every mistake there was to make when it came to money. Uh, and in 2008, literally lost everything. And so, you know, just coming to you humble. The reason I do what I do today is because I didn't blame anybody else for my circumstance. I just got really mad at me for not knowing more. And I went back, got all my education, got my licensing and credentials. And I've made it my mission to help as many people as I possibly can not make those same mistakes, especially when they are approaching retirement, because that is the mission critical that you have a way to guarantee your money lasts as long as you do. Yeah.

Speaker2:
Absolutely. Right. I mean, that is just critical, critical timing. And that's going to be a big portion of the show today. Uh, as far as, uh, that particular topic goes, the timing is essential and it is key to to get it right and make sure that you're not going to lose all of that money that you have worked so hard for and worked so hard to save as well. And also, folks I wanted to mention here, just right at the top of the show, that it's doesn't stop on the radio or the podcast. You know, Mike Zeno is here to help you with your individual situation as well. And Mike, folks can just reach out, you know, for a free consultation. It's no pressure and no, no money has to change hands. It's just, uh, you know, something that's very, very easy to take advantage of.

Speaker3:
It is. And I have people calling me just to say hi every once in a while or ask me a simple question or ten, and I don't mind taking that time, uh, just to help folks out. And the number is real simple. (704) 560-1573. That's my direct cell phone line. Okay. I've never had another phone number. Um, don't believe in it. I want people to be able to get Ahold of me and not have to press one to speak English, you know, not have to be stuck in a quagmire of automation. Um, or if you do prefer the web, just reach out us out to us on Money Matters with Mike on the contact us form, and we'll get back with you.

Speaker2:
Yeah, easy to do there. So money matters with Mike comm. You can also connect on the socials. Money matters with Mike on Facebook. Just search their YouTube as well and you can see highlights from the show there. All right. So a bunch to get to. But first let's start off with some inspiration for our conversations with our quote of the week.

Speaker4:
And now for some financial wisdom. It's time for the quote of the week.

Speaker2:
I feel like I need to be singing a chorus of won't you be my Neighbor this week for our quote of the week here, Mike, because it is from Fred Rogers, otherwise known as Mister Rogers. Yes, if Mister Rogers Neighborhood fame and he said this often, when you think you're at the end of something, you're at the beginning of something else. Boy, I love that because it's like, you know, it's talking about the possibilities and the new beginnings that you can have in your life.

Speaker3:
I mean, just think back in time to when you were in, you know, grade school and then you went from being in middle school to being in high school. It was an entirely different scenario. Those of you who went to college and you got away from home for the first time, you know, it's like when one door closes, another door opens. And I really think that plays into, you know, this week's, um, theme of the show and content. Because once you're working years or full time working years, that door kind of closes. Well, then your golden year door opens. And that's when you know, we are talking about, um, enjoying and traveling and spending time with your loved ones and, and making sure that you have the ability to finance all of that fun during those golden years.

Speaker2:
That is absolutely right. It is important that you're able to do the things that you want to be able to do during your retirement years. And, you know, as we often talk about, it used to be that, you know, you would work for a company for four decades and then you'd retire and you'd get a pension. And then that was your retirement plan and the.

Speaker3:
Gold watch.

Speaker2:
And the gold watch. Yes. Very important to get the gold watch and maybe, you know, a toaster or something they'd throw in just for, for fun, a mug with the company logo on it. But, you know, you get all of this stuff and the swag bag and you go home and then you retire and it's all taken care of, and you don't have to worry about your income and retirement and how you're going to live and how you're going to do the things that you want to do. Well, now the onus is on you. And so that is one of the things that makes a show like this one, Mike. So, so important because education really is key when it comes to all of these topics that we cover.

Speaker3:
It is I mean, everybody went from a defined benefit plan, which were pensions to a defined contribution plan, where, like you said, you are the one that is responsible for contributing to the plan. And then some companies will match a lot of companies don't match. So if you're not, um, taking advantage of your employer sponsored workplace plan, then you have to be saving money elsewhere. Otherwise you're going to be in extreme dire straits come retirement.

Speaker2:
Yeah. And then of course, you can get personalized help with all of this by going to Money Matters with Mike comm. That's money matters with Mike comm. You can also call Mike Zeno (704) 560-1573. And we'll share the number and the website as we go through the show many more times as well. So have that that pen and paper handy to write it all down, and you'll be able to get in touch with Mike Zeno to have him take a look at your particular situation. Well, um, you know, and Mike, of course, all of this, uh, goes in right into the the topic of discussion. That's kind of the main topic of discussion today, and that is the amount of risk that you are taking inside your financial life, right? And it's particularly inside your investments. And, you know, as people get older, the things that got them to this point in their life, the thing that helped them get them to retirement, for example, is not always the best thing to still do to get through retirement, right? Your situation completely changes. And so you got to make some changes in your financial life as well.

Speaker3:
You do. It's funny I've made this analogy before, but it's kind of like climbing Mount Everest, right? People prepare and they prepare and they prepare both physically, mentally, spiritually for months, if not years to climb Mount Everest. But very little thought is given to, you know, the descent getting down from the apex, um, at the top of the mountain. So most of the deaths occur not on the way up, but on the way down. And so when we're talking about retirement planning, most of the failures that I see are not necessarily during the accumulation phase when people know that they need to save for retirement and they save, you know, as much as they can possibly afford, you know, in your 20s and 30s. Let's be honest, folks. Um, life kind of gets in the way there, and not as much as you should be. Contributing is actually contributed unless you're the anomaly. Right? And then people tend to start getting a little bit more serious in their 40s and 50s and, and 60s if they're working that long. But, you know, the, the preservation and the distribution phase as far as the drawdown of your money, if you don't have an income plan in place, that is where you are very possibly setting yourself up to fail.

Speaker3:
And so, you know, there are some important, uh, factors to consider. And scaling down risk is one of them. That's the first one that I want to talk about. So as you near retirement, particularly if you're within ten years of retirement. It's it's crucial to transition your investment strategy from a growth focused strategy to more of a preservation focused strategy. I'm not saying that you don't still have some money in equities because you absolutely would, but this strategic shift involves reducing some of the exposure to high risk investments, which are much more volatile and can lead to significant financial losses that close to retirement. And in other words, your goal basically should be to minimize the risk of large scale financial setbacks that could jeopardize the entirety of your retirement and all those plans. So at this point in time, one needs to prioritize protection before growth.

Speaker2:
Yeah. And you want to do that you know, as as soon as you can as you're approaching retirement age. And you know that's different kind of for everybody. Right. It used to be maybe everybody would think about, oh well I'm going to work until I'm 65 and then I'm going to retire and all that. But you know, a lot of people I have known working well into their 70s, and as a matter of fact, one of my teachers in school was well into her 70s before she retired as well. And and she was luckily in a situation where, um, if I remember correctly, because this is going back decades now. But if I remember correctly, she was not in a situation where she had to keep working. She just loved teaching. It was what she did and and all of that. She had a passion for it. And if that is you, wonderful. But we want to, of course, keep you from being in a situation where you have to work. So you want to prioritize that preservation and talk a little bit more about the goal of preservation here, of those assets. Mike, especially in that time right before and and just in the first few years of your retirement.

Speaker3:
No, absolutely. The primary goal during this pre-retirement phase is to protect what you have accumulated as far as all of your savings across all of your different accounts, and be able to ensure that you have a stable income stream in retirement that will replace your salary. Once you actually do cross that threshold and retire, we need to make sure that your income needs are going to be met after you retire. It's not like your lifestyle is just going to radically change. Well, let me correct myself. It will radically change if you don't prepare, um, to have it not radically change. Because the sad truth of the matter is, most people, while they're working, make pretty good salaries, you know, enough to live comfortably on, but when they retire, they're not getting paid anymore and they're having to depend on, you know, Social Security. Plus, you know, anything that they have saved. So protecting your hard earned money from significant market downturns is essential to maintaining your financial security as you transition out of the workforce.

Speaker2:
Yeah. And then that goes right into, you know, talking about the sequence of returns risk, which sounds like something that is very sort of wonky to talk about, I'm sure to to our listeners here, Mike. But what do we mean when we use a term like sequence of returns risk? It really is important to, to to understand that risk that everybody is is going to face, especially if you haven't done any planning ahead of time to be able to withstand any market movements that might take away, like you were just talking about in 2008, might, you know, literally pull the rug out from under you.

Speaker3:
It absolutely did. The good thing that I had on my, on my, you know, side was time. I was still young enough to be able to, you know, make an impact and make some changes that would affect my financial security moving forward. And I got really serious and and literally just did not stop. I would not stop, you know, can't stop, won't stop, but sequence of returns. Okay. Let's just say you have five years worth of market returns and the first three years are good years, and then the last two years are bad years. That is a much better scenario than if we just take that and flip it. And so the first two years in retirement would be negative, followed by three positive years, um, losses suffered within ten years of retirement and within the first ten years after retirement. They have significant financial implications that could affect your lifestyle. Right. So just think about you mentioned 2008. Think about somebody who retired, maybe in 2007 and then saw 2008, 2009, 2010 of just catastrophic loss after loss after loss, before it then turned around and made money for the next ten years. That person's money would not last as long as somebody who retired just three years later in 2010 and saw no losses for ten years, right. So that's what we talk, what we mean when we talk about sequence of returns risk. Now my crystal ball has been broken for 53 years. I don't know about yours, Matt, but it is very, very difficult to be able to predict the future. And everybody has heard the phrase that past performance is not reflective of future results. Right? So we don't know what's going to happen. We can take as much information and process that data and make our best guess. But at the end of the day, most money managers don't beat the overall performance of the market. So, you know, the the trick is, is, is not to be too emotional and just make sure that you're putting things in place that prepare you for life after the workforce. Yeah.

Speaker2:
That's so important that you actually have, you know, a plan. And and we talk, you know, all the time about having a plan, how important that is. But really, really is if you don't have a plan, what is it you plan to fail? Right. So there we go. Um, and then talk as well. Mike, speaking of that about having a plan, talk about a couple of strategies here to reduce risk that people can, you know, maybe put into practice or at least that might spark some interest in working with you to come up with scenarios and some strategies that are right for them in their situation.

Speaker3:
I think the first thing I'm going to tell everybody is no secret to anybody who has ever even heard of or read anything about investing, and that's diversification, right? Diversifying your investment portfolio is a key and critical and crucial strategy in order to help mitigate risks. And that means that you spread all of your investments across different asset classes. I sat down with one gentleman who, you know, was, you know, just just I am diversified. Yes, I am, you know, and I'm thinking of I'm looking at all of his different companies. He's like, I got this company, I got that company, I got this company, I got that company. But each of those companies was he had their stock. So he. Yeah, he was diversified with companies. He was not diversified in the sectors and they were all equities. So turns out he was not divided among various asset classes. So that's number one diversification. Um, you may also want to replace the bond portion of your portfolio, um, with a protected guaranteed income product. Right. Bonds are not guaranteed. They had their worst year in the history of all bonds in 2022, and they're inversely correlated to Fed's decision. Guess what? You have no control over the Fed's decision, right? I like to be in control of my money. So I do like helping people replace the bond portion of their portfolio with, uh, instruments that are protected and guaranteed income products. Okay. And it is essential to see folks essential to see a professional who can actually talk intelligently and break it down in plain English and explain these things to you as far as the detailed analysis of your current portfolio, and then help you make the decisions that will help better protect and grow your hard earned money for retirement, because we want that money working as hard for you as you did for it.

Speaker2:
Yeah, and as hard as you did, not only, you know, working for it, but saving it as well. And, you know, maybe investing it, putting it away for your retirement years. Of course, it all starts, you know, in getting on a on a road to a better financial future. All starts with either a visit to a website or a call. The website is Money Matters with Mic.com that's all spelled out. It's all one word. Money matters with Mic.com. Or you can give Mike a call at 70456015737045601573. The consultation is absolutely free of any cost and any obligation whatsoever, so you've really got nothing to lose and a lot to gain there. Because, you know, if Mike determines that he can improve your situation, then he definitely will. And chances are that he can do that as well. Um, chances are chances are. That's right. We got, uh, we're the odds are in your. Maybe. May the odds forever be in your favor. Um. All right, so we're talking about, you know, a lot about risk and and a lot about decreasing the amount of risk as you get older. A good tool that people can use, Mike, is something called the rule of 100. And it's okay. Don't like freak out here. It's it's a it's math but it's the like the simplest it's the simplest math people. It's just not difficult at all. So the rule of 100 is what? Mike.

Speaker3:
Oh it's math. Oh, it is a simple financial guideline that's often used for retirement planning. Right. It's a guideline. It doesn't mean it's it's a hard set fact, right. But it helps individuals determine what could be an appropriate asset allocation based both on their risk tolerance as well as their age. So the rules suggest that you whatever age you are, that's how safe you should be. So if you are 80 years old, you should be 80% safe and maybe only have 20% in equities that are exposed to high volatility. If you're 50 years old, well then it's pretty simple, right? 50 over 50. If you're 20 years old, then you don't really need a lot of safety because you still have a long time for that to grow, right. So the idea behind this rule is that as you age, you gradually reduce your exposure to those riskier assets and actually shift toward investments that are a little bit more stable and protect your savings from those potential market fluctuations.

Speaker2:
Yeah, and it really is. I didn't mean to scare anybody by using the word math. It is a four letter word, after all. Um, but yeah, I mean, it really is an easy calculation. So, you know, if you're say, 20 years old, for example. And God knows, I wish that I knew the things that I know now at the age of 20. And it started putting money aside then for my retirement years.

Speaker3:
Louder for the people in the back.

Speaker2:
Exactly. I better be listening to me on the back row. But if you're 20, you want to take 100. You'll subtract your age. So 100 -20 is 80. So that's the amount the percentage of your investments that you want to have at risk. As you said Mike, you are you're young. You've got time on your side definitely at 20 years old. So if you're 80% invested in equities in stocks, then you should be 20% invested in safer products. And then of course, let's say you're 40 years old. Well 100 -40 is 60. So then you're going to be less at risk. You're going to be 60% in equities and then 40% in other less risky assets and safer assets. So you see how that works. It just the risk is reduced as you get older just by using this rule. And of course your risk tolerance might be different. Your situation might be different. So it's important to to to work with a financial professional like a mike Zeno and get a deep dive done on your situation to determine if you know that rule of 100, strict rule of 100 is is right for you, or if you need to kind of play around with those numbers and, you know, your situation might end up being a little bit better.

Speaker3:
Yeah. No doubt. So so like you just said, risk tolerance varies among different people. And not only do the risk tolerance vary, but the investment appetite like how much money you're able to invest as far as the goals that you have, no two people's goals are alike, right? And some people are, you know, say, hey, I want to travel. Okay, well, great. That goal is probably, you know, unanimous among most retirees. But how do you want to travel? Are you somebody that's happy pulling a camper in the back and just going to some national parks? Or are you somebody that wants to fly first class or business class and, you know, stay at luxury five star hotels and resorts and really do it up no matter how you want to travel. I mean, that's your goal. That's your dream. My job is to see if I can develop a plan and allow you to be able to attack that plan to make that dream a reality. So we would love to offer all of our listeners a free risk analysis consultation to help you, uh, understand the current risks that you're taking, because a lot of folks had no idea how much risk they are taking in their portfolio.

Speaker3:
Until I quantify it, until I show them, hey, you literally are 97% in equities. And they're like, I say, do you know what that means? And they say, no. And I'm like, all right, well, you've got, you know, $1 million. I'm just using that number for easy math. Right? 97% of that means $970,000 of that portfolio is at risk, and only $3,000 is safe. How does that make you feel? And they're like, um, not very good because I'm talking to people at that point who are in their, you know, 50s and 60s and 70s or older. And so we just have to make a little tweaks and show folks how investments can actually work together to bring you to where you want. As always, there are no obligations. You are free to receive the information, walk away, use it as you wish. So biggest thing is, you know when I ask people, when would you want this information, you know, right before you retire or would you like maybe to have it well before you retire so that you have time to affect change in your retirement?

Speaker2:
Yeah, as soon as possible would be my answer to that question. Or or maybe even, you know, a few years ago would be my yes, like, very truthful answer. But if you want to get those answers and all of that information for yourself and for your situation, folks, once again, go to Money Matters with Mike comm. That's money matters with Mike comm. Or you can give him a call 7045601573704560 1573.

Speaker1:
Come on down as we test your financial knowledge in right or wrong.

Speaker2:
It is everybody's favorite financial game show, and that is, of course, this financial game show. Right or wrong. And, um, this is how it works, folks. It works kind of like true or false or, you know, something like that. But what it is, is I will present a situation, a scenario, give a statement about something to do with finances, and then I am going to then throw it to Mike Zeno, who says whether that statement or situation is right or if it is wrong. This is a great way, as we play along here, for you to play along with us and test your financial knowledge as well, in the car or at home or at work or wherever you might be. Okay. All right. So number one, in our right or wrong for this time around is you should keep working and stop contributing to your retirement accounts to maximize your Social Security benefit. Is that one right or is that wrong, Mike?

Speaker3:
I almost think this doesn't dignify an answer. I mean, hopefully anybody out there that has any modicum of common sense would know that this is wrong. You want your money working as hard as you do, and it is important to get what is known as a Social Security maximization plan in hand, because you could be getting pennies on the dollar versus controlling 100% of the dollars that you're investing in your future retirement. Right? So that is 100% wrong.

Speaker2:
Started off with an easy one there for you, Mike. Okay, just getting back into the swing of things. So didn't want to put it, uh, you know, make it give you too difficult of a question there to start off with. All right. Number two in right or wrong is this. And if you've been paying attention to the show, you should know this one. The rule of 100 might sound familiar, and it's a simple calculation to help one determine how much risk they should be taking inside their portfolio of assets. Is that right or wrong?

Speaker3:
Matt? That is 100% right. It is correct. You just simply take 100 and subtract your age. So whatever your age is, that's how safe you are and whatever is left over, that's what you can have at risk in the market. And the idea is the younger you are, the more time you have to make up for any significant losses. But as you get a little longer in the tooth, you want to have much more of your savings in safe investment products. A fixed index annuity comes to mind where you participate in market gains without any risk of market losses. So if you have any questions on that, just reach out and give me a shout.

Speaker2:
Yeah. And that number 704 5601573. And it also I'm just reminded uh Mike I have kind of always wondered in the back of my mind where the phrase long in the tooth came from, because it's not like old people have longer teeth or anything, but, you know.

Speaker3:
The roots of their teeth tend to degenerate and they fall. They get a little longer as they're as they're about ready to come out. Oh, there we go.

Speaker2:
See, I never knew that when I was young because my grandmother had false teeth. So there we go. Um, her teeth look great.

Speaker3:
That's my.

Speaker2:
Dentist. Yeah. Her teeth. My grandma's teeth look great. Um, and especially in the cup by her bed at night. But anyway, um. All right, number three here. As I stop talking about my grandmother's false teeth, there is no way to grow your money tax free in an IRA. Is that one right or wrong?

Speaker3:
That is 100% wrong. I think that most of our listeners, especially those who have been listening to our show for any degree of time, know that we're huge fans of the Roth IRA because those IRAs allow you to pay all of your taxes up front. Okay. Which means that once that tax is paid, you never have to pay them again. Which means that in retirement, you get to take tax free distributions because you already paid the taxes. And then on top, like the cherry okay, there are no required minimum distributions like they are. There are with regular employer sponsored plans or traditional IRAs.

Speaker2:
Yeah. And that has to do of course, with the tax treatment as well. Because the only reason really that there are RMDs for those accounts that are tax deferred like regular IRAs, 401 K's, that kind of thing is because you've gotten a tax break for years and years and years. You haven't paid taxes on that money yet. And Uncle Sam is standing there with his with his hand out saying, look, give me that money. And so then, you know, you reach a certain age, which right now is 73, and you have to take certain distributions. A minimum distribution is required, hence the name, in order to pay that tax bill. So yeah, if you don't have to pay taxes on it when you make withdrawals anyway, then there's no requirement for an RMD because you know, that just makes sense. All right. So number four in right or wrong is this a 60 over 40 portfolio with 60% stocks and 40% bonds is a tried and true method and is still the best way to construct a portfolio for retirement. Is that one right or wrong?

Speaker3:
Uh, Matt, only because you said it is still the best way we're going to say that is wrong. Okay. The modern portfolio theory of 60%, uh, stocks, 40% bonds. That, folks, is a strategy from 1952. Okay. Do you really want to rely on a 70 plus year old strategy for your retirement, when there are new ideas and new approaches that have been proven to yield much better results. So we believe in using new asset classes to properly balance smart risk as well as smart, safe investments. So you know, only because you said it's still the best way is why we're going to say that is wrong.

Speaker2:
Yeah, it's been around for a long time. And a lot of people still, you know, sort of swear by it. But these days there are, you know, newer and better things to consider. And, you know, customizing a plan for you is the most important thing, I feel like.

Speaker3:
Yeah. Think of the 6040 plan as as grandpa's plan. Okay. And things have come a long way since, uh, grandpa started investing.

Speaker2:
That's that's very true. Things have changed just a little bit. And that'll wrap up this edition of Right or Wrong. Three wrongs and one right. Three wrongs don't make a right, I guess. But, uh, anyway, we'll we'll try and improve on that, uh, that score a little bit better next time here, uh, that we play it on Money Matters with Mike. Um, okay. So, you know, I actually just sort of mentioned this and kind of inadvertently teed this up a second ago, um, that, you know, people really do. It's so, so important for people to have a plan and to have a plan that's customized for their situation. Talk about some of the reasons why, you know, something like a 60 over 40 portfolio. While it might have been just fine for grandpa, um, is not necessarily great for you, and you really do need a customized and comprehensive plan.

Speaker3:
Yeah. So when we sit down with folks and we're going over their portfolio and we're going over, you know, what they hope to see and what they want and what they expect. We find that way too many people think retirement planning is about rate of return, like it's about getting double digit plus returns each and every single year. But they don't have any income plan, no drawdown plan, and especially one that's guaranteed to fund all of their expenses and their lifestyle in retirement. We also find that way too many people have absolutely zero clue about the bonds that they hold within their portfolios, and in many cases, we've seen the bond portion of their portfolio that's greater than 40%. Um, you know, I've seen as high as as 70% in a bond portfolio. And this is an asset class that is just absolutely been underperforming for years now. Okay? We find that way too many people have no plan in their plan to address health care expenses. And folks, that's a problem. Why is that a problem? Well, people are living longer. The longer you live, uh, the greater chance you're going to need health care in retirement. And because of the rising cost of medication, the rising cost of going to see a doctor, a doctor, the rising cost of hospital stays. I mean, if you're not planning for health care and retirement, uh, I kind of feel sorry for you when you actually need, um, that type of care, especially when you're in your 70s, 70s and 80s. So it also surprises me, Matt, how many people have no legacy plan for their beneficiaries? They have no will in place, no trust in place that A is able to avoid costly and lengthy probate proceedings.

Speaker3:
They just don't have one. Folks, we can help you with that. Um, because we have members on our team that are able to address each and every single one of those needs. And in our experience, many people haven't really thought about what they want to do when every single day is like Saturday. Um, as well as how they're actually going to pay for it. So if retirement still sees seems like this pipe dream, it's so far off. Away. Um, I promise you it's not. Don't blink is what I tell people, right? And and people that are way older than me tell me the same thing. And it's like the older you get, the faster time flies. I still remember holding my 28 year old almost. She's almost 28, you know, in my her head, in my palm and her, you know, crotch in my, in the crook of my arm. And I carried her like a football. Like I still remember that. Like it was yesterday. And she's about to be 28 years old. So, you know, again, with life expectancy on the rise, uh, more people than ever need to plan for comprehensively plan for everything that will take them to, as well as through retirement. And by working with us during your planning process, you're going to have a team by your side that can answer questions and properly align your plan with your retirement goals.

Speaker2:
And the word team there is very, very important because you really are a part of the same team. You're working toward the same goals, and those goals are based on what is best for you, not what's best for Mike Zeno, not what's best for your aunt or your uncle or whomever, unless they're also working with Mike Zeno. But, you know, for you and your particular situation and your family and all of that, That is what the goal is.

Speaker3:
I'm laughing right now because I just got a referral, actually, multiple referrals from one of my clients who's been a client of mine for a little more than six months now, and she referred her aunt, her uncle, her cousin and her cousin's son. And so we have appointments with each and every single one of them. So I.

Speaker5:
Just.

Speaker3:
I had to get a chuckle when you said that.

Speaker2:
Well, see, so in that case, it is what's about what's best for your aunt and your uncle and your cousin and all.

Speaker5:
All the people a family affair.

Speaker2:
There we go. Um, but that that's, uh, kind of the a little bit of the exception to the rule here, but, hey, if you work with Mike Zeno, um, you're probably going to be so satisfied. You're going to want to recommend and and refer your aunt and your uncle and cousins and all that. So just keep it on. All in the family here.

Speaker3:
Yeah. And folks, if you haven't heard from your advisor lately or if you're not receiving any help from your work based retirement plan, folks, the folks at HR let us provide you with that service. Okay. Great service that is, as well as that complimentary consultation. And of course, that is again at no cost to our listeners with no obligation. And you only continue working with us if it makes sense for you. We only want to work with you if it is best for you. And we'll show you though things like how much you're paying in fees. Folks have no idea. We'll show you where you can cut costs through strategies like bond replacement, personal pensions, smart tax strategies like Roth conversions. But all you have to do, folks, is pick up a phone and give us a call, or reach out on the web, or reach out on the socials. Of course, the web address is Money Matters with Mike comm. And if you can't find me on social, you're not looking because I'm on pretty much all of them.

Speaker5:
There.

Speaker2:
There you go. That's right. Just do a quick search for Mister Mike Zeno and you will find him. Um, 704 5601573. Once again is the number.

Speaker1:
Want to know where your hard earned money is going? It's time for an inflation demonstration.

Speaker2:
So if you like me, like kind of going through the fast food drive through every now and then, not as often as I used to. Actually, not nearly as often as I used to. Um, you've probably gotten gotten a little bit of sticker shock here because especially at McDonald's, the rising menu prices due to inflation there have taken a big bite out of the sales for the Golden Arches so far this year. Mike.

Speaker3:
Yeah, I mean, they've increased their prices between 20 and 40%. Um, that's how much their costs had gone up. Right. So therefore that necessitated higher menu prices. You guys are paying those prices and those that increase in prices. It disrupted their long standing value programs, leading consumers to reconsider their purchasing decisions. Like do I really want to go spend, you know, $14 in change for an extra value meal when I can actually get a real meal prepared, um, for about the same, if not less money.

Speaker2:
Yeah, exactly. Especially at, you know, some, uh, home grown restaurant mom and pop place down the street, uh, where the the food's going to be better, quite frankly, to. No offense to the folks at McDonald's, but, you know, it's going to be home cooked meals and all of that down down the street at the mom and pop shop. Um, but but also, you know, this has had a big impact on the behavior of consumers, those who, you know, frequent McDonald's especially, um, you know, it's anytime prices rise, that kind of thing is going to happen, right?

Speaker5:
Yeah. I mean.

Speaker3:
Especially the seniors, right? Those folks are so much more sensitive to price changes. Um, I used to see this this couple, um, I worked at a car wash for a little bit of time, and this couple used to go into the fast food restaurant chain. I'm not going to name them. Um, every morning they would go there every morning and have a biscuit and and their coffee. And I think a lot of people are like that. They're creatures of habit. And and it's just fun for them to get out of the house. It's something for them to do. But, you know, if that used to cost maybe 2 or $3 and is now costing them $10 to go get a cup of coffee and a biscuit, I mean, that's a significant change. And when they're living on a fixed income, it just makes them so much more vulnerable to those price increases in essential goods and services, including food.

Speaker2:
Yeah, it really does. And of course, you know, you think McDonald's essential. Well, yeah, I mean you do have to eat. So there is that. And you know, if it's one of the cheaper options around and you're on a fixed income, then yeah, that it is pretty much essential there. But then also, you know, Mike, we're looking not only at the impact on the consumers here in the US, but this has been felt around the world. I mean, McDonald's is a global chain after all. Mhm.

Speaker5:
Yeah.

Speaker3:
I mean we've seen slower than expected recovery in China, ongoing conflicts in the Middle East. Um, obviously sales have declined in the United States, but there's also been notable weaknesses in France and other international markets, which just further illustrates the global impact of economic pressures on McDonald's. As a company, we have a list of of prices on just some, some normal, you know, things that people might order from McDonald's, you know, back in 2014, for an example, a medium fry cost you $1.59. Today it is $3.79. Like what I mean, that's 100% increase.

Speaker2:
It's true. I mean, a Big Mac back in 2014 was 3.99. Now it's 5.99. The one that that really got me. Um, well, the McDouble sandwich that's doubled in price as well. And more than that, actually, 20 tripled in price. Yeah, exactly. It's tripled. They should call it the MC triple now. Um, but you're not getting more meat. I can assure you that $1.19 in 2014 is 319 now.

Speaker3:
Yeah. Three times. I mean, that's that's a significant 300% more, right? A Quarter Pounder with cheese meal back in the meal. Not just the the sandwich. The meal in 2014 was $5.39. Now $11.99. Heck, let's just call it 12 bucks. Let's call it what it is. It used to be five bucks. It's 12 bucks now. I mean, come on, folks.

Speaker2:
Yeah, it's wild. The ten piece McNugget meal, same kind of thing. 5.99 back then in 2014 and now 1099 in 2024. So, yeah, I mean, the prices have gone up and you can see they're in our inflation demonstration. Really how that affects people, especially those, as you were saying, Mike, those seniors that they're pre-retirees retirees living on fixed incomes, um, especially.

Speaker3:
Yeah. So so a lot of people live on a fixed income, and I plan to as well. But the difference is, is I plan to fix my income. So if you want to be able to fix your income, right, and not rely on what's left over, uh, then we need to talk. We need to sit down. We need to talk about what? Your goals, what your dreams are. You know, what your ability, how much you can contribute. Let us come up with a plan that shows you the light at the end of the tunnel, so that you're not having to rely on Social Security in retirement as your end all be all okay. Um, again, 704 5601573 or reach out on the web. Money matters with Mike comm or any of the socials. Just search money matters with Mike.

Speaker2:
That is it. It is easy peasy to reach out to Mike Zeno and get started along that road. All right, so we sort of mentioned this in a little bit of a passing way earlier, Mike, when you were talking about some of the reasons that people need that comprehensive plan for retirement, and I wanted to dive in a little bit more to this one particular thing that you mentioned, and that was health care costs. There was an article on fidelity that we ran across here lately that showed that, you know, a lot of people just aren't prepared, like you were saying, for health care costs in retirement. Dive into that a little bit more, if you will.

Speaker3:
Yeah, so so hopefully this is going to rattle some people's cages and get them to wake up, right. A single person according to this survey in the in the health care cost estimate, a single person that is 65 years of age in 2023, which was last year, needed $157,500. So almost 158 grand saved. Now that's after tax dollars, folks. So we're talking about 200,000 ish contributed to get to that. You know, 158,000. And that's just to cover the health care expenses in retirement. And then if you're a married couple, okay, and you're retired and you're 65, according to again, these are last year's statistics. But this is 315,000 saved, which means that you would and this is just earmarked for health care, just earmarked for health care. So that's not your entire retirement savings. But we're talking about you would have had to contribute like 400 grand, you know, so that you have 315 net to use toward those health care expenses. So and of course, the amount that you will need will depend on when and where you retire, how healthy you are, uh, the family history of longevity and how long you live. Right. But the amount you will need will also depend on which accounts that you use to pay for health care. So whether that money is coming from a 401 K, whether it's coming from an HSA, an IRA, or any other taxable accounts, your taxes in retirement, and potentially even your gross income. So you have to consider health care when planning for retirement, not in the plan, but kind of have a plan for it as well.

Speaker2:
Yeah, exactly. I mean that that is the thing you, you know, that you're going to have to pay for health care expenses in retirement. There's a lot that something like Medicare does not cover. So, you know, long term care, things like that are not going to be covered under Medicare. So you really do have to have a plan for that. And especially these days when people are living longer, I mean, you know, you're going to live probably longer than your parents lived or are still living, hopefully. Um, and so then that's going to cost you more because, you know, you've just got a longer time frame that you're looking at. Yeah.

Speaker3:
The longer you live, the more you're going to have to shell out to fund those extended golden retirement years. So, um, you're probably going to need to supplement that Medicare.

Speaker2:
Yeah, absolutely. And, you know, many of the procedures, as we were saying, are not covered by Medicare, dental, hearing, vision, along with long term care that I mentioned assisted living nursing facilities. So many retirees face unexpectedly high deductibles and co-pays, and all of this can be avoided with a comprehensive plan. And just to make sure that you have enough set aside to cover all of these different categories of expenses, and that that's one of the things that people may or may not consider. Um, you know, that you consider, you know, paying any bills that you have to pay. You consider going and doing the things that you want to do traveling, going to see, um, you know, relatives and friends and all that around the country or even, you know, around the world, all of all of that kind of thing. But do you consider health care because that's going to be one of your biggest, if not the biggest expense in your retirement years?

Speaker5:
It's huge. Yes.

Speaker3:
I mean, it is very, very large. And we want to make sure that all of our clients are prepared for health care expenses in retirement. And bottom line inflation, folks, it's taken a toll on retirees, particularly in the areas of health care. Think about it just for a second. Those of you who are listening, if you just stop and think, many of you listening right now probably know a senior dealing with health care expenses right now. And that is why it is important to have a smart financial plan in place.

Speaker2:
And a smart plan does include a plan for your health care and making sure that you've got that money that is going to be able to pay those bills that are likely going to be larger than you think. Go to Money Matters with Mic.com and get started on your journey toward a better financial future. Well, just a little bit less than five minutes here left in the show, Mike. And, uh, before we go, what we want to do here is just clear up some common misconceptions about Social Security. You know, we're just talking there about Medicare and the things that Medicare doesn't cover. So hopefully we've cleared up some misconceptions there. Now we've got a few more about Social Security, because I'm sure you meet with a lot of folks, Mike, who have questions about Social Security. So this is a great opportunity to be able to answer some of those.

Speaker5:
Yeah.

Speaker3:
So and one of the big ones I get is that everybody's Social Security benefit is the same amount, which is simply not true. Right. So the way Social Security is calculated is they are going to take the highest 35 years of your earnings, which means you've paid into the system, uh, the highest amounts during those 35 years. And they use a formula that uses those 35 years to determine your benefit amount. So not everybody's is the same. Plus, okay, the longer you delay Social Security, the more it is that you are going to, uh, bring home. So your benefit a lot of people think is fixed forever. This is another falsity, okay. Cost of living adjustments. The Social Security can actually reduce your benefits. Um, and they expect that they may need to reduce everybody's benefits by as early as 2033 unless something is changed because the system is set up for failure as it is right now. Um, another one. You're stuck with the benefit offered to you, which is not true. Okay, you have options, especially if you delay the Social Security Administration will pay. So the longer you delay taking your Social Security, the greater your benefit will be.

Speaker3:
You are giving the government a discount if you take it before your full retirement age. So everybody should strive at least to get to their full retirement age. Of course, unless you are in pitiful health then going to get your money right? So you know, hey, I always hear people that say, I'm going to get my money as soon as I can. I'm going to grab it, uh, as soon as possible. Well, oftentimes we don't advise that unless it is absolutely essential that you need that money as soon as possible, but instead we definitely recommend, as I stated a second ago, waiting until your full retirement age. And then a lot of people are under the, uh, the, the myth, the, the, you know, thinking that your benefit is going to increase every year. And unfortunately, that's just not true. Cost of living adjustments do happen, but they do not necessarily happen each and every single year. So bottom line is again, you want a Social Security maximization plan. Just get in contact with us.

Speaker2:
Yeah that's right. Go to Money Matters with Mike comm for that. And you know you were talking Mike there about the cost of living adjustments and those not necessarily happening each and every year. It wasn't too long ago that we actually saw a couple of years like that, kind of in the mid 20 teens, um, where we had 0% cola adjustments, uh, because, you know, inflation was just not, uh, not a big concern was not happening. And we saw, you know, just no increase in that benefit because of that. So yeah, it doesn't happen every year. More often than not it does. And, you know, luckily our retirees have gotten some big raises these past few years. Doesn't look like it's going to be the case this coming year, though, as the Social Security Administration is expected to really kind of compare to last year, cut the amount of the increase by a substantial amount.

Speaker3:
Make sure you get in contact with us if you have not yet taken Social Security just to get a Social Security maximization plan, because we want to provide you with that so that, you know, the future cuts to the program don't affect your retirement. We want to make sure that, as you know, as we've stated before on the show, that you're not relying on the Social Security Administration, um, as the the savior to your retirement, when instead, if you just put some planning in place, you know when you're in your 50s and early 60s, you won't have to rely on the government. You can rely on yourself.

Speaker2:
Yeah. And just reach out to Mike Zeno for that information and more and get a better financial life in place for you. Money matters with mike.com is the website, and you can also call Mike at (704) 560-1573. Well that's going to do it for this time around, Mike. But uh, welcome back into the into the chair, back into the saddle. And I appreciate you being here of course. And I look forward to doing it again next time, sir.

Speaker3:
It's it's always fun hanging out with you, Matt, for an hour. I love what you bring to the show. Um, as we stated at the beginning, we were so thankful for our listeners because without you guys, we don't have a show. So thank you. Whether you're listening on the radio or whether you're listening anywhere around the globe on a podcast, uh, from our bottom of our heart, thank you, thank you, thank you. Right. If you know anybody that could benefit from listening, please share the show. Subscribe. You know, give us a like on social. We love when people do that because it just allows us to reach more and more folks. So whatever you're doing this weekend, I hope you enjoy it to its fullest extent. And as always, make it a great day.

Speaker1:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704560 560 1573. That's 704 5601573. Not affiliated with the United States government. Mike Zeno 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 their respective owners. Amara Life 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.

Speaker2:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

Speaker1:
Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal. Apply to your income benefit base. Call us now at (704) 560-1573. That's (704) 560-1573. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company. Nationwide peak ten is issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

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