Stop lying to yourself about retirement! This week, Mike breaks down the biggest financial lies we tell ourselves and how to overcome them. Plus, controlling costs in retirement can be tough. Some costs can be reduced or even eliminated during retirement, but other things get more expensive as you age. Mike shares our list of ten big costs to consider, so they don’t break your budget.

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3.31.23: Audio automatically transcribed by Sonix

3.31.23: 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 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 each and every week. On today's show, we're going to talk about how to fund the retirement of your dreams, including costs to consider, as well as solutions to common retirement obstacles. And as always, I have the distinct honor and privilege, especially today on his birthday, of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, first of all, happy birthday, sir. How are you doing today?

Producer:
I am great, Mike. Thank you so much. I appreciate it. And only for you. What? I work on my birthday, let me tell you, because I have so much fun doing the show. I wasn't going to miss it today. So, you know, that's just the way it works. But thank you. I appreciate it.

Mike Zaino:
You are absolutely welcome. What do you what do you like? 29? 39.

Producer:
What? Oh, yeah, 29 Again? No, I am I'm actually 42 today. And I, you know, I hesitate to say to reveal my age, but I feel like I've caught up with my age because I've kind of always sort of looked and sounded like I was 42, even when I was like in my 20s. I feel.

Mike Zaino:
That. I feel that.

Producer:
But yeah, so I finally caught up with myself. But no, thank you. I appreciate it. And we do have we have got a lot of great stuff to talk about on today's show as well. So we're to we're going to get into it here with plenty of meat on the bone to chew on. I do want to remind the listeners, Money Matters with Mike is available as a podcast wherever you get your podcasts. So let's say these past couple of weeks, previous episodes, we've been talking a lot about these bank failures that have a lot of people concerned. If you missed those and want to go back and listen to them, feel free to go to MoneyMattersWithMike.com. Listen to those past episodes they are or go to Apple Podcasts Spotify, iHeart any place you get your podcasts and search for money matters with Mike, you'll find it there. You can also call Mike Zaino at 7045601573. Check out our YouTube channel as well. You can also check us out on Facebook. A lot of great content both of those places and there you know, just easy to find there. Just search for money matters with Mike we also Mike got to say love giving our listeners free stuff.

Producer:
Yes, we do. And yes. And that really is a privilege and an honor for us to do that because we like giving you free stuff that's going to help you, not just free stuff for the sake of free stuff, right? So one thing that's brand new that we have that's a great resource is a new report on the new Secure Act 2.0 and what it means for your retirement. Absolutely free and it's yours today. If you get in touch with us at those contact ways to contact us, I'll give them to you again in just a second. We've also got the 23 cost cutters for 2023. A lot of great tips there for your year and saving a lot of money in 2023. And also the book Annuity 360, it's by Ford Stokes, who's a great friend of ours. Mike has his copy right there by his side at all times. A lot of great information there about annuities and how they can help you potentially in your retirement. So if you'd like any of that, go to money matters with Mic.com or call 704 5601573. And Mike, you echoed my sentiment there. We love helping out our listeners. Yeah, I.

Mike Zaino:
Mean, that's the whole reason we do the show is because information, right? It's what we do with the information that we've got. If you're the smartest person out there, but you take no action, I'm sorry, but you're an educated derelict. You're not doing anything with everything that you've learned. Put it into play practical application. Because if you do, I can promise you it definitely will change your financial future.

Producer:
Yeah, it absolutely will. And something else that could potentially change your financial future. Staying with us for this next hour because we got a lot to get to, a lot coming up here on the show. We've got ten cost to consider when planning for retirement. We're going to break down that list for you here. That'll be probably the biggest chunk of the show. We also have a new problem solver, which is a new story. That's actually a true story, not a fairy tale. It's a true story about how we helped out a family and help them reach their retirement goals despite some pretty big hurdles that they had getting there. Also, if you are concerned about retirement, we're going to discuss the worries that pre-retirees and retirees have and what you can do about them and if we get to it. That's a question mark because we got a lot to cram in here this week. We got a great this week in history coming up at the end. But first, let's go go ahead and get started with our world famous quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the.

Producer:
Quote of the Week.

Producer:
And this time around, Mike, those words of wisdom come from Richard Bach, who is an American writer, author, born in 1936, who's written numerous books, including two of the big bestsellers of the 70 seconds, Jonathan Livingston Seagull and Illusions The Adventures of a Reluctant Messiah. And among the wise words that Richard Bach has uttered in his life are these The worst lies are the lies we tell ourselves. How true.

Mike Zaino:
Absolutely, Matt. You know, I'd never heard of Richard Bach before. I hadn't read either of those two books. I don't know if any of our listeners have either. Man, when we're talking about the lies we tell ourselves, that is going to be today's Meat on the Bone segment. It's all about money, lies.

Producer:
Hungry for something to chew on. Here's some meat on the bone.

Mike Zaino:
Those money lies that we tell ourselves can change the way that we think. It can change the way that we act. When it comes to our finances and since most of us rarely talk about money with our friends and our family, the money lies that we tell ourselves, tend to stick around and that can lock us into destructive beliefs and reinforce very poor financial habits. Most of us lie to ourselves and psychologists classify it as something called cognitive dissonance, which is the uncomfortable tension we feel when our behavior doesn't match our beliefs. We know what we should save and invest for the future. Right? We should protect our credit scores. We should begin building wealth so when we don't do it, we come up with lies to make ourselves feel better. If you're not saving money, maybe you're telling yourself that it's just because you can't afford to set aside any money right now. And I'm going to tell you that's not true. So I'm going to go into the three biggest lies that we tell ourselves when it comes to money. Lie number one is I'll begin saving and investing next year. Most folks focus on buying what they need and what they want right now instant gratification, if you will. And we tell ourselves that we'll start saving for the future when later, if we save anything at all, it's likely to be whatever we have left over. In fact, fewer than 1 in 6 of us are saving more than 15% of our income, and 1 in 5 aren't saving any money whatsoever, when in truth, it may never feel like the right time to save money.

Mike Zaino:
Maybe your bills are due. There are things that you want to buy or people that you love who need cash and you want to help them. So what do we do? We tell ourselves we'll start saving next year, believing that we'll have more money to spare. The problem is when next year comes around, it tends to bring the same financial responsibilities and temptations, if not more. And saving and investing money, even if it's just a little bit at a time. Matt It offers us a financial cushion against that unexpected. That's lie number one. Okay? Lie number two is I have plenty of time to plan for my financial future, and I don't need to think about it yet. The future can seem really far away when you're talking about ten, 20, or even more years out when we feel like we have a lot of room between now and then, it's really easy to make excuses to not plan or save for it. This lie is an excuse for procrastinate ation. It's the rationale we use when we have a difficult time managing our negative feelings or uncertainties about our financial futures and it makes us turn a blind eye to the years of interest that we lose out on when we don't plan. Ben Franklin may have spoken best about the truth behind this money lie when he very wisely said, By failing to prepare, you are preparing to fail.

Mike Zaino:
That's something that we've mentioned multiple times on this show. And then lie number three is that investing is too risky and complicated. People tend to get intimidated about investing because they don't always understand the terminology or they don't know the right questions to ask. And when you don't know what questions to ask, I'm going to tell you you're always going to find the wrong answers. People also don't want to be taken advantage of or make uninformed decisions. Many to avoid investing altogether because they fear what they do not know. The fact of the matter is, it doesn't matter how much money you make, what matters is how you spend it, how you save it, and how you invest it. The fix is just to commit to saving and investing. The only way to build wealth, no matter how much or how little money you earn, is to pay yourself first. The first step on the path to having a healthy financial future is to get honest about what matters. Money matters, and the second is to take ownership of what happens next. So if you're one of the people out there listening to me right now who've been putting off retirement planning, I would love to invite you to sit down with me. You can also meet with me virtually online or over the phone. I won't charge you for a consultation and I'll be happy to review your portfolio. Address your concerns and answer any questions you might have.

Producer:
And you can get started on that road by going to MoneyMattersWithMike.com. That's all one word. MoneyMattersWithMike.com or give him a call at 704 560 1573. For that free consultation and of course we'll dive into exactly what that entails coming up a little bit later on in the show. But some great meat on the bone this week there, Mike. You know, I mean, fear of of investing, fear of, you know, taking a chance on the kind of the unknown about what the what the future might hold. And then just that reluctance to get started because you tell yourself that lie that you can't afford it or that, oh, I'll do it later. You know, a little reality check is always a good thing. And so that's why I appreciate the Meat on the Bone segment here, especially this week.

Mike Zaino:
Yeah, I like to call it FUD food. That's a that's an acronym for Fear, Uncertainty and Doubt. When you have FUD, just give me a call and let's get a plan together.

Producer:
Yeah, that's absolutely. I think if we're talking about Elmer Fudd now, that's a different thing. But, you know, be be very, very quiet and call Mike Zaino 704 560 1573 Well, we teed this up at the beginning, Mike, and we're going to delve into it now. Ten Cost to Consider when Planning for Retirement. These are some things that we ran across and came from an article in US News and World Report, and they're boy, they're really a lot of common things that a lot of people will have to contend with. Most people will have to contend with all of these during their retirement years. But we want to sort of dispel some of the myths that are around these kind of clear up some of the fog that might be there. And we want to let our listeners know you might not have a lot less expenses in retirement like you might think just because of, you know, different things that happen as you as you get older.

Mike Zaino:
Actually, while some costs can be reduced or totally eliminated in retirement, other expenses might remain the same or even increase as you age, you are very likely to face new costs as you use more health care services or take up new hobbies to help fill the time during your days. And don't forget about inflation and the inevitable effect that it's going to have on your expenses in retirement.

Producer:
Absolutely right. I mean, you know, if you look at it and even if you are let's say let's say you've got one of those bank CDs, for example, at at one of the big brick and mortar banks that's, you know, making you less than a 1% return, a lot less than 1% return, some of them with if inflation is like it is about right now, let's say around 6%. If you get 1%, well, you've actually you haven't gained 1%. You've lost 5% in real dollars. So yeah, inflation a huge, huge concern. But as far as costs in retirement on this list, number one is number one for good reason, and that is because it's probably the biggest cost in retirement for for a lot of people that is housing.

Mike Zaino:
Yeah. Like you said, Matt, you know, it could be your biggest cost in retirement. And a lot of people, they actually forget to account for home repairs. They forget to account for property taxes. And here's the thing. If you pay off your mortgage, yes, your house payment goes away. But property taxes, your insurance, your escrow fees, they never do. Okay. And also consider home repairs can be much more difficult to do it yourself as you get older. Okay. I don't want to necessarily be climbing on my roof repairing gutters or, you know, replacing shingles when I'm in my 70s. Heck, I don't want to do it when I'm in my 60s, right? Much less older than that. And there are a variety of ways to significantly reduce your monthly housing bills. Paying off your mortgage can eliminate a major monthly expense, leaving only the cost of those taxes, insurance and maintenance. And then another option, Matt, would be to downsize to a home that costs significantly less so that you're able to free up some home equity and help pad that nest egg that you're sitting on. And so moving of a new place or to a new place, I should say, that has a lower cost of living can also improve your financial retirement picture in and of itself. Yeah.

Producer:
And you know, another aspect of that is if you've been in a home for a long time, it may make it difficult to leave, obviously from an emotional standpoint because you might be, you know, tied to it in that way. But if you think about it from a financial standpoint, let's say, you know, 30 years ago, for example, you paid 85, $100,000 for that home. The value of that home is going to be much more now. And so you've got yourself a lot of equity there. You can put that to good use, pay down any debt that you might have and really be in a much better financial position if you were to downsize. Size to somewhere smaller. That's one thing that my after my dad passed, my mom really considered doing it. But again, you know, it was one of those things where she was just sort of emotionally tied to the house. And it's a and it's a single level, too. It's a rant. It's not a very big house. So she's like a a little bit more bother than than it would be worth. But in people's particular situations, it could very well be a great opportunity.

Mike Zaino:
Especially to if you bought your house, you know, 15, 20 years ago and you were paying six, 7% interest rates and you didn't take advantage of that extremely low interest rate environment over the last, say, three years before it jumped back up into the sixes and even the sevens. If you did refinance and you're sitting on a 2 to 2.5% or lower, heck, anything lower than 3%, you then need to see, All right, can I make more than 3% on my money? And if that's the case, you may not want to have your house paid off. If you can take your dollars and reinvest them and earn more than 3%. But if you can strategize to have your house paid off before you retire, then obviously the happiest retirees are those with none. No housing debt.

Producer:
Yeah, absolutely. So because, as we say, gets rid of that biggest expense that you have in your retirement. Well, number two on this list of cost to consider in retirement Medicare premiums, and this is one to I think that some people might not realize, especially pre-retirees, they haven't necessarily done a lot of research, much thought about it other than, oh, I'm going to have Medicare. You know, when I reach a certain age, the Medicare premiums can vary.

Mike Zaino:
Yeah. And some employers offer health insurance that you can carry with you through retirement. Some don't. Okay. And so a lot of people, everybody will inevitably end up on Medicare. And most people don't pay a premium for Medicare Part A, which is the hospital insurance because they've paid for it their entire lives. If you look at any one of your pay stubs from any time in history that you've worked, you're going to see a line item deduction for Medicare and that paid for your Medicare Part A, which is why it's free in retirement. That being said, Medicare Part B, which covers your your physicians. You think of it like your doctors. There is a standard premium. And for this year, 2023, that premium is $164.90. You may as well say 165. Right. And some high income earners or people that earned more the two years before they retired, they actually have to pay an income adjusted rate, which is an additional premium. So Medicare Part D, which is the drug plan, covers prescription drugs. That has a separate premium that varies depending on the drug plan that you select each and every year. And there could also be a third premium if you select a medigap plan that will pay for some of Medicare's out of pocket costs. So the biggest thing when it comes to Medicare is don't forget to sign up before the deadline for Part B, Otherwise, there are late enrollment penalties that could be added to your premiums. And that penalty is permanent.

Producer:
Yeah, and you know, you just ran through there, Mike. Some of those, you know, part A, part B, part D, it can be like an alphabet soup of confusion for people. But that's why, you know, don't don't necessarily try and go this alone, folks. You need help navigating these things. And I know a guy who can help you. It's Mike Zaino. Just go to MoneyMattersWithMike.com or call 704 5601573. Number three on the list of ten cost to consider for retirement. Mike really does follow right along with the Medicare premiums. One, we're talking about health care expenses and really health care expenses overall because there are, you know, quite a few things that Medicare doesn't pay for. And you also have to consider deductibles and things like that.

Mike Zaino:
Right? So we talked about Medicare Part A being free because you paid for it all your life. Right. But it still has this year a $1,600 deductible per benefit period. If you're hospitalized and there are additional coinsurance charges, if your hospital stay exceeds 60 days, God forbid you're in the hospital for longer than two straight months. But if you are, then there are additional coinsurance charges. Medicare Part B also has an annual deductible of $226 for the year 2023. Some preventative care services are covered by Medicare with no out of pocket costs. But then there are also several types of commonly needed medical services that typically aren't covered at all, like eyeglasses and hearing aids. So these are definitely things to consider.

Producer:
Absolutely. So. And. A lot of people might think that those are covered, but they're not. And that's another reason you got to have help clearing these things up as you plan for your retirement. Number four on the list, of course, to consider, Mike, is, I think, something that sort of falls under the radar as far as something that you can control because it's seen as an inevitable thing. Right. Death and taxes. Those are the two things we can count on in in life. But this one, at least if you can't totally escape taxes, you can strategize to sort of minimize that impact, especially in your retirement years. Yeah, So, so.

Mike Zaino:
So everybody needs to think of whatever they have in their 401. K, their employer sponsored plan. I don't care if it's a 401. K, 403 B TSP, you know, whatever it is, if it's a tax deferred account, think of your number. And I've said this before, guess what? It's not all yours. After years and years and years of deferring the taxes on your retirement savings, you are going to need to pay income tax on each and every withdrawal that you pull from any of your tax deferred accounts, like the 401. S 403 B's Tsp's or just an IRA. So those distributions from tax deferred retirement accounts are also mandatorily required once you hit age 73. Now, thanks to the Secure Act and it'll eventually go out to age 75, even if you don't need the money. Right? So Uncle Sam will force you to take required minimum distributions. Why? So that they can collect the tax. Okay. And if you don't take the amount that you're supposed to take, there is an extremely stiff penalty. It is the largest penalty in the IRS arsenal. But there are several ways to strategically withdraw money from your retirement accounts and reduce your overall retirement tax bill. Part of your social Security benefits. Matt, could also be taxable if your retirement income taps a specific threshold. In fact, up to 85% of your Social Security could be taxable.

Producer:
Yeah. And that's something, you know, again, that people don't really necessarily take into consideration in retirement. So you got to plan for those taxes. They are obviously an inevitable part of life, but the that amount is not inevitable. And there are those ways, as you say, that you can can really plan for them and minimize that impact, that burden in your retirement years. Number five, as we make it about halfway through this list of ten costs to consider in retirement is something that everybody has been thinking about. You know, we think about it a lot because we do it every day We eat. So this is food I'm talking about. But people have been thinking about the cost of food a lot, especially over this past year or so, with food inflation really going out of control.

Mike Zaino:
I wanted to buy ice cream the other day. You know, I don't I've been cutting back. I've been losing weight. But I still want to go splurge a little bit. And I went to buy some. I couldn't believe how much I think I paid like $7 in change for what used to be a half gallon is now a third of a gallon. So they're they're shrinking the amount you get and they're increasing the price. But you can save money on food in retirement if you're willing to give up some of those expensive convenience foods and actually take the time to cook healthy meals at home. But here's the thing, Matt. A lot of retirees, they have all that additional free time in retirement and that might tempt them to spend more on, you know, lingering lunches, going out with friends and then taking expensive dining experiences and trying the finer things in life. But in actuality, when shopping for your own food and cooking it yourself, you might be able to qualify for senior discounts at grocery stores and even select restaurants as well.

Producer:
Yeah, and don't be afraid to ask for those, you know, I mean, even if they don't advertise a senior discount or something like that, that might still be a thing. So military.

Mike Zaino:
Discounts.

Producer:
For veterans. Yeah, absolutely. That's and that's something that I'm sure you take advantage of, obviously, because the businesses want to thank you and all of our veterans for your service. And so, you know, definitely take that where you can get it, especially these days. Everybody needs it with inflation, as I say, running rampant and still being really, really stubborn here. Well, number six on our list, not quite as fun as food. This is emergencies. Nobody wants to be in that situation, but you've got to plan for an emergency just in case you find yourself with one at hand.

Mike Zaino:
Yeah, so? So think about emergency funds, right? We talk about that a lot on the show. Before you should invest, you need to have an emergency fund. Well, the need for an emergency fund does not end when you retire. You're going to continue to need to make home repairs. What happens if your HVAC goes out? Where are you going to get that money? What happens if your water heater springs a leak and damages some some things that aren't covered under your home insurance policy? Right. So an emergency fund is essential to avoid spending your retirement savings too quickly. You don't want to take from your retirement money when you don't have enough in a reserve for an emergency. So make sure your plan includes funds to set aside to help cope with those emergency expenses.

Producer:
Yeah, you know, not not all that long ago we had here in Georgia, in like central Georgia, south of Atlanta area, a bunch of tornadoes come through and really did some damage, didn't do as much nearly as they did in Mississippi, where they came from. They had weakened a bit by the time they got here. But, you know, the people who lived in those areas and were impacted didn't see that coming. So you never know when an emergency is going to come your way. And it could be something like that, a natural disaster or it could be a health scare. It could be anything, a car accident, whatever. Not that we wish for these things to happen to anybody, but you got to be prepared in case they do. Well, another thing. Okay, back to the fun now as we go through our list of ten costs to consider during retirement, Number seven on the list is entertainment. And you got to keep yourself keep yourself busy in retirement. And part of that busyness can be entertaining as well. Yeah.

Mike Zaino:
So so, I mean, think about it. You're retired now. You have a lot of newfound free time. Well, that provides opportunities to try a lot of new things. But those new things, those new experiences, if you will, can get expensive. And so there are lots of communities that provide plenty of free or affordable entertainment to people of all ages, ranging from summer concerts to library seminars and senior centers often provide social activities just for retirees.

Producer:
Yeah, and I think that's been true of every community I've lived in, I think in my life. You know, here in Atlanta, I know of a couple a couple of different, you know, concert series that are free outdoors in the in the warmer months where you can get out and enjoy things. Um in my. Hometown where I lived and grew up, up in north Georgia, northeast of Atlanta. Same kind of thing. I remember actually when I was younger, taking part in a series of spring concerts like that when I was in high school band, actually, we did a concert on the Square and it was cool. It was fun. But even like up in New York when I lived there, there were a free series of concerts outdoors down in Florida, big festivals and events and all that all the time. So wherever you live, you can find something like that that's not going to cost you a dime and still give you that, that fun, that entertainment. Another thing, too, that's fun and this is the way I like to get my entertainment a lot of the time. And I know a lot of people are with me on this, especially in retirement years is travel.

Mike Zaino:
Retirees finally have the time to travel as much as they want. The only limiting factor is your budget. And so if you want to travel, it really depends on how you want to travel. If you're pulling a camper fifth wheel, that is not going to cost as much as flying first class across the pond and staying at the Ritz Carlton or the Four Seasons. Right. So, you know, retirees have the advantage of being able to travel during the weekdays and off peak times, which could help save them money. And also and this is the part I like, help avoid the crowds.

Producer:
Yeah, I'm with you on that one. It I'm telling you, when I go on vacation, I like to go on vacation. Like during the week. You know, a lot of people will go on the weekend. They'll do a quick weekend trip. Different places. I love to go during the week like Mondays and Tuesdays on vacation or my favorite times because you're like the only people there. So I absolutely love it. Avoid those crowds at all costs. Number nine on the list of the ten cost to consider during retirement. Yeah. Grandkids. That boy, they love spoiling the grandkids. The grandparents do. And just because you retire doesn't mean you're going to stop spoiling them.

Mike Zaino:
That's right. Nothing can throw off a retirement budget like the arrival of a grandchild. Okay? Grandchildren can actually change your financial priorities. And grandparents often love to give those gifts to their grandkids. They like to travel to see them if they don't live in the same town. And some of them actually set up a trust to help provide for their grandkids future. So just making sure that if you have grandchildren and you want to spoil them, that that's part of your retirement plan and part of a way of leaving a legacy and a way for them to remember you, I think is key.

Producer:
Yeah. The only taste of that that I've had so far is with my nieces because I can it's kind of like having grandkids because you can you can take them, you can spoil them, and then you can give them back. You know, it's, it's that same kind of thing that grandparents do with grandkids. Of course, a lot of times, though, grandparents end up actually raising grandkids because of different situations and stuff like that. And that's a whole different ball of wax. But the grand the grandparents spoiling the grandkids is a universal thing, no matter what your particular situation is. And then an important one here, Mike, is number ten on the list that's leaving a legacy for your family. Another one, I think that kind of gets overlooked because you talk about expenses in retirement. You think about, okay, your your lifespan, your particular longevity, whatever you are planning for in your life. But this is leaving a legacy behind for that next generation so that they are better off than they otherwise would have been.

Mike Zaino:
Yeah, I think Matt, that that is. A focal point of a lot of people's retirement plan. Being able to leave financial gifts or heirlooms to to their family and then other other people say, you know what, I'm going to spend my money and if there's anything left over, then you are more than entitled to it. And whatever your plan is, is okay with me. So think about whether you plan to leave a legacy to your family. Think about whether you plan on including charitable giving to meaningful causes. Make sure that your wishes are spelled out clearly in writing. In writing. Okay. So that your plans can be realized. It is important to have that will and that comprehensive estate plan well in advance. And Matt, one of the best ways to leave some tax free dollars to your heirs is through life insurance.

Producer:
Yeah, that's absolutely true. And, you know, I speak from experience, as you know, I've mentioned this before, that when my my dad passed, luckily he did have that life insurance policy and it was so great and so refreshing. It just happened about the time I was sort of getting into this business, you know, And we got that check at my at my mom's house and no taxes taken out. Nothing. Just deposited it right in the, the, you know, place. We deposited it and it was great. I mean, it really is a great way to take a lot of the burden off of your passing. Obviously, there'll be the emotional toll. There'll be that period of mourning and missing you. But a lot of the burden that otherwise would have been there will be eased. And I got to say, Mike, this is you know, we've just been through this list of ten cost to consider. It can be an overwhelming thing to for people to try and think about and plan for. But that's why you're here.

Mike Zaino:
It is. We know that budgeting and planning for the future expenses can seem daunting, can seem very, very challenging. So let us help you and provide you with the retirement income gap analysis. What is that? That's determining whether you're going to have more month than money, which is not good. Right. We want to set you up to where there's more money than month, so call us at 704 5601573 or schedule a complimentary consultation online at MoneyMattersWithMike.com visit us on Facebook on YouTube just by searching money matters with Mike we are here and happy to help.

Producer:
It's time for this week's problem solver.

Producer:
So like I said at the beginning of the show, you know, it's not a fairy tale. The problem solver this week, but it does start out like this. Once upon a time, there was an emergency room doctor. No, I just want to I just want to feel like I want to say anyway, like there was a, you know, a princess in a tower or something like that. But no, there was an emergency room doctor in an area medical center. He was working there in the E.R. and boy, God, what a what a stressful job that is. The doctor, 65, his wife, 61 years old. They had planned on retiring after he turned 65. But the state of inflation and the economy led to them being really concerned about the future. They did not want to draw down their savings too quickly, understandably so. And because of their worries, the doctor was actually considering working for another 2 to 3 years to be able to save up more money. But he was just really, really tired, you know, from that demanding job for so many years. The long hours, the stressful environment at the hospital. So after he and his wife met with us, we actually determined that they will receive about $5,000 a month, give or take, in Social Security income. But and here's the kicker. They were expecting total monthly expenses to be $14,000 a month, leaving that $9,000 a month income gap. And you just mentioned it a minute ago, having more month than money. There's Exhibit A before the court of that exact thing. So so what do we do here, Mike? I mean, lay out the problem. Define the problem for us and the solution. Yeah.

Mike Zaino:
So, I mean, the problem was, is that the couple didn't want to sacrifice their goals or their lifestyle in retirement. Right. And the husband didn't want to delay retirement any longer. So they were really caught between a rock and a hard place. They have a couple of daughters who are going to be married soon, and they wanted to be involved in the planning and the funding of the weddings. And they also receive great fulfillment from their annual mission trips to South America. Simply put, that this couple needed paychecks for their expenses and they needed play checks to enjoy traveling while they're still in their 60s and 70s and youthful enough to actually be able to enjoy it. So what we did, Matt, is we helped them fill the gap in their income plan through two key strategies. The first thing we did for them was implemented what we call a Roth ladder conversion plan, taking the money from their tax deferred retirement accounts. What we did is developed a plan to systematically move it over into a Roth IRA to reduce their future tax risk. Most of their savings were actually in tax deferred accounts, meaning that they still owed the taxes on future distributions in retirement. So by converting what was left over within their income tax bracket, just enough to keep them under the next threshold, we were able to go ahead and pay the tax now at a known rate, which historically pretty low. So that we saw circumnavigated any future risk of the government hiking taxes in the future. So that's number one. Number two, we took about 40% of their bond portfolio that was hemorrhaging in the current interest rate environment.

Mike Zaino:
And we set them up in a fixed indexed annuity that had a 100% cash reserve requirement. What that did is give them safety, it gave them safety, it gave them reinsurer reassurance, it gave them peace of mind that they would have the income they needed to live in retirement, live the retirement of their dreams, because the annuities can provide a lifetime income stream that you can never outlive. So why did we share this story? Well, we want you to think of your own retirement and how you're going to fund it. Number one is your retirement plan tax efficient? Do you have that ticking tax time bomb like this couple had with all of your money in tax deferred accounts? Are you tired of delaying your own retirement? You have to realize, and we've said this a hundred times, at least on this show, retirement is not about the size of your next nest egg or about the total amount of savings. It's about your ability to generate the income you need to fund your expenses during retirement. And if you're trying to systematically withdraw money from the accounts as you need it, you could be at risk of living that just in case retirement. And what we'd rather see you do is get to the guarantees so that you can enjoy both the paychecks and the play checks that come from investing in a fixed indexed annuity. And regardless of whatever tax bracket you might find yourself in, it is important to have a plan and we can help.

Producer:
Absolutely can. And you can go to Money Matters with Mic.com to set up that initial free consultation. Money matters with Mic.com or call 704 5601573. That's 704560 1573 And Mike, when people do that, when they reach out for that full free retirement plan consultation and I say free and I mean it free of any cost, any obligation, what's that like? Tell our listeners what the process is there.

Mike Zaino:
Well, again, you just hit the nail on the head and that there is no cost to our listeners and they are completely comprehensive consultations, no obligation whatsoever. You're only going to work with us if it's best for you. Boy, I tell you what, Matt, words are hard today. Keep tripping over my tongue. But when it comes to planning for you, we're going to help analyze your financial situation. We'll closely examine any annuities that you might have. We will discover exactly how much you're paying in fees. We can help you cut out unnecessary costs in your IRAs, your 401. K's. Any other types of retirement savings accounts that you might have? We can talk about Medicare planning. We talked about that a little bit today. We can talk about Social Security planning. And we bottom line, are going to compare your current situation to what is possible. If you work with us. Remember, it is your money and if it matters to you, it matters to me.

Producer:
That is the advantage of working with someone like Mike Zaino, who can really help you with your particular situation and, you know, somebody who actually is going to care and is going to, you know, just be there to help you along the way as you make it through to your retirement years. 704 5601573 again is the number MoneyMattersWithMike.com is the website. Well you know Mike we worked through ten of the costs to consider during retirement a little bit earlier. Now let's get into another sort of list thing that we have to share with our listeners here of six major concerns for retirees and pre-retirees. Obviously not the only concerns, but six of the most common concerns right now in our current economic situation that we find ourselves in, that retirees and pre-retirees are feeling are really concerned about. And we really want people to to enjoy their retirement. Right. That you've worked hard over the years. You've saved up this money you've planned. But here are a list of some concerns that we're hearing from people currently in their retirement or just planning to retire in the very near future. So number one is one that we've mentioned here before, a potential cut to Social Security.

Mike Zaino:
Yeah, So I mean, that's probably the biggest fear. Social Security, you know, running out. Right. On last week's show, we we discussed that possibility of those Social Security benefits being reduced and cut in the future. If you missed that show, please check it out on our website or go to the podcast MoneyMattersWithMike.com and just listen. But here's what you missed. You know no matter where lawmakers stand on the future of Social Security, there is almost universal agreement that the program faces funding challenges that must be addressed and sometime by the middle, early to middle of next decade. So the 2031 of the trust funds that helps pay for Social Security is going to run out of money, which leaves more than 20% of the program unfunded. And a recent report released by the Congressional Budget Office warned the Social Security trust fund could run out of money as soon as 2032, which is a year earlier than previously thought. If Congress doesn't make changes or bring in more revenue or reduce benefit payouts. So if you haven't already, you need to go check out your own Social security account. Go to ssa.gov. That's the abbreviation for Social Security Administration. Ssa.gov. Create a my security online account. It takes about 5 to 10 minutes and once you have access to your account information, you can reach out to us so that we can put a Social Security maximization report together for you as soon as possible.

Producer:
To be able to maximize that benefit. And that'll be a great, great thing and a great resource there. At TSA.gov, once you have that account, it's really kind of eye opening for you. And then of course, you know, Mike, when you work with some, someone really is even more eye opening as to what it could be for them in the future. Well, number two on this list of concerns for retirees and pre-retirees portfolio balances going down, this is one that we just experienced last year with the S&P 500. If people were indexed to the S&P, they saw a nearly 20% loss just last year.

Mike Zaino:
Yeah, In fact, since 2000 there have been seven years where the S&P actually saw declines. It declined from 2000 to 2001, 2002. So three straight years. Then, of course, we had the financial crisis in 2008 where the S&P lost 38.5% in 2015, in 2018. And then last year the S&P lost 19.4%. So, you know, there was an American investor named John C Bogle who once said that if you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks. And we've used that quote for the quote of the day before. But many retirees and pre-retirees are understandably concerned how market volatility could impact their ability to meet financial expenses and obligations during retirement.

Producer:
Yeah, it is definitely understandable thing. And number three on this list kind of goes hand in hand with number two, and that is a market crash. You know, I mean, there's so volatility is one thing. A market crash is kind of something else. It's more along the lines of what we experienced back in, say, 2008. Yeah.

Mike Zaino:
Who can forget what happened to the economy in 2008 and 2009 when 8.8 million jobs were lost? Unemployed? It spiked to 10% by the fall of October, October of 2009. There were 8 million home foreclosures because of the of the predatory lending practices. $19.2 trillion in wealth gone, evaporated. Home prices fell 40% on average, even more in some cities. We already talked about how the S&P declined at 38.5% and then $7.4 trillion in stock wealth was gone from 2008 to 2009. And yet a lot of people have kind of forgotten about it, even though it was only 14, 15 years ago. We we kind of got rocked to sleep by that ten year bull run right after.

Producer:
Yeah. That very, you know, steady, slow growth in the economy and in the stock market and all of that. And we're sort of lulled into that false sense of security and thought, oh, well, volatility is never coming back to the markets. Well, boy, we've gotten a wake up call here over the past few years.

Mike Zaino:
So alarm is going off right now, brother.

Producer:
That's right. Absolutely is. And so number four actually goes, you know, hand in hand with something that we talked about a little bit earlier. It's tax increases. And if you ask people, do they think taxes are going up or going down? Mike, I know that you pretty much get the same answer all the time.

Mike Zaino:
Not one time have I ever gotten somebody says, hey, Mike, I think taxes are going down in the future. And with the national debt nearing almost $32 trillion and government spending continuing to rise, many people are concerned about future tax hikes as far as what they're going to charge us and people that were alive in the early 60s. Remember that, you know, in the early 60 seconds, the current 24% tax bracket was at 56%. So it's not like they haven't done it before. There's not precedent. Right. They can do it again. And that, my friend, is concerning.

Producer:
Yes, it really, really is there. And, you know, I mean, one thing that that we actually mentioned before is minimizing that impact of taxes in your retirement. And people need a plan for that. They can't just go about it, you know, kind of willy nilly. Well, you know, I'll maybe I'll do this, maybe I'll do that. Or I have an idea of kind of what I want to do. No, you got to have a plan to kick Uncle Sam out of your retirement, kick the IRS out of your retirement. You know that old Think about that old poster. Very famous image. The most famous image, I would guess, of Uncle Sam. I want you, you know, with his finger pointed at you. Well, imagine this. Instead of his finger pointing at you saying, I want you. He's got his hand out and he says, I want your money. That's got both hands out. Yeah, exactly. And pockets open and, you know, all that stuff. But yeah, it's not a situation that you want to be in. Having Uncle Sam and the IRS be your partner in retirement.

Mike Zaino:
Yeah, you definitely don't want the IRS as your retirement partner. So schedule a complimentary meeting with us to discuss how we can help reduce your future tax risk through proper tax planning and a Roth ladder conversion if it makes sense for you.

Producer:
Yeah. What was it? The that statement proper prior planning prevents pitifully poor performance.

Mike Zaino:
Yes. You nailed it on the head. How was it?

Producer:
Yes, I had to remember the edited family friendly version of it there for the Radio four performance. Yes. Yes, exactly. Well, there we go. And you can call Mike Zaino at (704) 560-1573. Another concern, number five on the list, Mike, for retirees, pre-retirees as well, inflation. And we talk about it a lot, but for a good reason, because it is a thing that's affecting us all. And all of our wallets and our pocketbooks are lighter because of it.

Mike Zaino:
Yeah, you absolutely must be prepared for an ever increasing cost of living and through both smart, safe investing strategies and smart risk investing strategies, we can help cushion that blow of rising costs throughout your retirement.

Producer:
Yeah, you know, if you look at inflation in the US over the past, say, ten years, you know, we had low inflation like 2013, 1.5%. That's below, you know, the Federal Reserve always say that 2% is the target, right. For that sort of slow and steady kind of pricing growth. You know, then even that went significantly below that 2014, 2015. Then from say, 2016 on through 2019 was right around that 2% mark actually dipped some in 2020, but boy, it skyrocketed to 7% in 2021 and is trying to work its way down now. But it's still remained stubbornly, stubbornly high. So, I mean, you know, you look back, Michael, we're talking about being lulled into a false sense of security. You look back a few years ago, you can kind of see why, because we had this, you know, inflation rate that was very low, especially compared to what we have right now. The cost of just really been a shock to the system.

Mike Zaino:
Yeah, money. Money was cheap. Okay. Money is no money is no longer cheap. Okay. And what that translates to everybody else is that if money is not cheap, then that means you're paying more for it. So you're paying more for everything that you want and need. So that's where inflation is. Why we call it the silent tax and why you definitely need a plan in place to to curtail its effects.

Producer:
Yeah, And one last thing here on our list, number six on the list of six worries, six concerns for retirees and pre-retirees. Talk about something that costs a lot, long term care expenses. That can be a budget killer.

Mike Zaino:
It can. It absolutely can. And the fact of the matter is, is that at least 70%, 70% of people, 65 years and older, they're going to need some form of long term care at some point in their lives. And the cost of long term care depends mainly on three factors the kind and length of care that's needed. That's number one, the provider chosen number two and the location. So if you look at long term care services in the United States, you know, the average nursing home is about $6,600 a month. The average assisted living facility is 3600 a month. If you need non-medical in-home health care, you're looking at around 3500 a month, as well as just regular home health care. And if you need adult day care, that's around $1,500 a month. Now, keep in mind, folks, these are national averages around here in the Charlotte metro area where if you want to go into a state run facility, and I don't think any of you do, then that's probably where they are. But if you want to go into anything nicer than the Holiday Inn. It's going to cost you a little bit more money and you need to be prepared for those types of events occurring in your life. If 70% of those over 65 are going to need something some form at some point in their lives.

Producer:
And so those are six major concerns for retirees and pre-retirees. If you want help with those concerns, if you are concerned about any of the things that we've mentioned here, go to MoneyMattersWithMike.com that's money matters with Mike. Com or call 704 5601573. It's this week in history. Some big things happened this week in history Mike and we go back just just a few days here. We record the show at a time. So you know, you mentioned it was my birthday at the beginning of the show, something that happened on my birthday, March 30th, 1981. Um, of course, aside from myself being born. And that, of course, was the most important moment. Matt that happened in that. Yeah, I mean, obviously that makes everybody's list of this week in history, but also on that day, little known fact. Um, Ronald Reagan was shot that attempted assassination against the 40th president. And also my my mom tells the story about that day of you know being she came out of labor and delivery and I had been born and all of that and they tried to tell her that the president's been shot. She just sort of looked at him like they had three heads and he was like, you're crazy. That didn't happen. Why are you trying to lie to me like that? You know? So she just couldn't believe it. But it was it was real, obviously. Luckily, thankfully, he survived and went on to serve two terms in the White House.

Mike Zaino:
No doubt, Matt, That is that, you know, he was my commander in chief when I when I served in the United States Army. And so he, you know, Ronnie will will forever hold a near and dear place in my heart. But another historic moment that I think is probably the bane of everyone's existence that lives in the United States of America. On on this date in 1918, the United States switched over to daylight savings time for the first time leading to most areas, changed their, you know, changing their clocks backward or forward. I don't know about you. It doesn't really affect me. But I'm like, why do we need to do it? It makes no sense in today's day and age. I understand it when everybody was farming and you needed an extra day of daylight. But we're we're just not in 1918 anymore.

Producer:
Right? Right. I mean, that is absolutely true. And the annoying thing, too, is I, you know, have some some coworkers and friends out in the West, out in Arizona, actually. Phoenix and yeah. And Arizona does not observe daylight saving time. So then when the time changes, it just messes up everybody's calendars and they have to adjust and all this stuff. And I'm like, Can we just do away with it, please? They don't need.

Mike Zaino:
Another another hour of heat, you know for sure.

Producer:
Absolutely not. And one last thing here, Mike, before we run. I wanted to say April 1st. It was No foolin. On April Fool's Day of 1976, Apple Computer's company, later known as Apple Inc., was founded. And I remember covering this back in 2018 when I was a business reporter in New York at the time when Apple was the first publicly traded US company to be valued at more than $1 trillion. And of course, their products, they've changed our lives, really.

Mike Zaino:
They have. Whether it was, you know, the old school Macintosh or you had one of those little teeny iPods or you had an iPhone or you had an iPad, You now have an Apple Watch. I mean, I remember folks growing up watching Dick Tracy and he was sitting there talking on his on his on his wrist watch. And Apple has brought that to fruition. And so, I mean, when we think about how far we've come now, I just can't wait to see The Jetsons and flying cars right.

Producer:
Right. The spy gadgets are real life and maybe the flying cars one day as well. Can't wait to see. That's right. Well, that'll about do it for this time around. Mike, I appreciate you as always. And thank you for the birthday wishes, sir. I wish you a great rest of your weekend.

Mike Zaino:
Everybody out there listening to us. Without you guys, we don't have a show. So please share this. You know, money matters with Mike as far as 9:00 AM in the Charlotte area, on the radio, share the Facebook page, share the YouTube page. If you know anybody that can benefit from any of this information. And I think you do. All right. Please share it with them. Thank you so much for tuning in today and make it a great rest of the weekend. Take care.

Producer:
Thanks for listening to Money Matters With Mike. You deserve to work with the 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. A car 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 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.

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