MMWM Full Show 7.21.mp3: Audio automatically transcribed by Sonix

MMWM Full Show 7.21.mp3: 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 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.

Mike Zeno:
What's up? What's up? What's up? It's Mike Zeno coming to you live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Today, we are going to bring the heat and give you plenty of useful information you can take with you and apply to your personal situation. And once again, I have the distinct honor and privilege of being joined by the one and only Mr. Matt McClure. Matt, how are you doing today?

Producer:
Hey, Mike, I'm doing great. How are you, sir?

Mike Zeno:
If I was any better, I'd be twins.

Producer:
I love it. I don't know if the world could handle two Mike Zenos. You know, we got. We got.

Mike Zeno:
You.

Producer:
I always, you know, give myself a little bit of heck at the beginning of the show, so I just figured I had to turn it around and give you some.

Mike Zeno:
No, that's fine. That's fine. I think they broke the mold with me, threw it away at that point. So that's a good thing for some people. Hey, you can't laugh at yourself. Who can you laugh at?

Producer:
Exactly. Exactly. If you can't laugh at yourself, how can you laugh at somebody else? That's absolutely true. Well, folks, here is Money Matters with Mike. Thank you so much for being a part of the show this weekend. Money Matters with Mike Dotcom is the website and of course, you can not only hear us on the radio, you can subscribe to us as a podcast wherever you get podcasts. And I'm talking the big ones like the Spotify and the Apple Podcasts and all of the big players in that space. Please subscribe to us there. Leave us a rating. We would love it. And another thing that we would love is for you to spread the word, you know, talk to your friends, talk to your family about the show and get more ears on the radio here and on the podcast. And hopefully everybody will get some great and useful information. And of course, this week is all about that, is all about information. It's all about education, because the title of the show has something to do with our Quote of the week, which is coming up. And I won't I won't give that completely away. But it's all about education this week, Mike. And I know that's something that you are big about anyway, is really helping people understand, not just going in and telling people what to do, Oh, you need to do this. You're really big on education.

Mike Zeno:
It is the financial education system in America is broken. Things that they used to teach us and teach the kids in school, they're no longer teaching in school. And so by the time young adults get into living on their own, a lot of them have absolutely no idea from a financial standpoint on how money works. And so the point the whole point of this show is to educate and empower everybody out there that's listening to the show to make decisions that are going to enable them to maximize their retirement, whether that's 40 years away or whether you're already there or anywhere in between. We really hope to give you meat on the bone, so to speak, stuff that you can digest and carry with you, that satiate you for days and keeps you thinking about your current situation and how to improve. So it's all about education, for sure.

Producer:
Yeah. And you'll you'll certainly feel better after that meal than you do after a huge meal of like, you know, meat off the grill, for example. If that keeps you full for days, you're probably feeling pretty sick at the end of a couple of days. This is going to leave you feeling a lot better than that. So knowledge, hopefully.

Mike Zeno:
That's the goal anyway.

Producer:
That is our goal. Knowledge is filling hopefully. And that's that's the goal here of what we're trying to do. You know, Mike, a lot of people, of course, are still facing a lot of uncertainty with the markets, with inflation, with all of the above and the inflation causing uncertainty in the markets, and then that causing uncertainty for people like it's the trickle down effect of it all. Have you heard, you know, recently from from more of your clients that they are getting just more and more concerned with every passing day about kind of where things are headed?

Mike Zeno:
Yeah, it's unbelievable. The state of the economy right now and folks that that are really close to retirement or already in retirement, you see it affecting their bottom dollar. And so, yes, my phone's been ringing off the hook. We've been setting appointments for consultations left, right and center. I'm working some days. I'm working ten, 12 hours a day, if you can believe that. That's how many people and I'm always going to be around. If you need the help, I'm there to help you. So certain people have certain hours that they can work. And if I need to bend my schedule to fit those schedule people, then I will absolutely do that. But yes, people are absolutely. Be concerned because their money today is not going as far as it used to.

Producer:
Yeah, and we'll talk a lot more about that as the show goes on because there are some some big illustrations of that that I know you want to share with our listeners today. That's actually some pretty shocking info. So we'll get there coming up here in just a couple of minutes. But again, folks, it's Money Matters with Mike Dotcom is the website. And if you would like to reach out via the phone, it's 7045601573. And now I teased this a second ago, Mike, but let's just go ahead and share our financial wisdom quote of the week with our listeners here. And this one comes from Warren Buffett. It's the more you learn, the more you earn. Say that again. The more you learn, the more you earn. And that is a great one, I think, because that's good. Especially building on. Yeah, that's a real good especially you know, going on what we were talking about a second ago about knowledge really being power, especially when it comes to your finances. That is a is a great one.

Mike Zeno:
And one thing that I will say about knowledge being power, if you don't put that knowledge into practical application, you're just an educated derelict. It's applied knowledge being put into action that actually will give you the power there and the ability to earn more and keep more of your hard earned cash for sure.

Producer:
Yeah, that's the thing. It's like if you don't, you can have all the knowledge in the world, right? You can be the smartest person, the most educated person in the world. But unless you put that knowledge to some practical use, then it's great that you have that knowledge, I guess. And more the more knowledge the better. But put it to use in that way, it's going to be beneficial not only to you but to others and improve your life and theirs. So that's that's great. So the more you learn, the more you earn is, of course, kind of the theme of things today. As we've been saying here, Mike, and one learning opportunity, I think that you wanted to share with our listeners is about something that I have am sort of semi familiar with, so I'll be learning along with our listeners today. It's the rule of 72. Talk about that and explain it a bit to our listeners.

Mike Zeno:
You know, again, our goal every week is to give you something to chew on that meat on the bone. And so today's meat on the bone topic, so to speak, would be the rule of 72. We've been talking about inflation for weeks now because it's a it's a really, really hot topic. And whether the inflation is at 3% or it's at 5% or 9%, the rule of 72 is going to apply because they call inflation the invisible tax. And it really gets ugly when you look at it in terms of retirement. So I'm going to explain why. Right? So let's just assume that inflation is normal and we'll say it's at 4%. Just for a simple math. It's a hair higher than what the government typically likes to keep it at, but it's hard to know the true inflation rate since the government has changed the way it's been calculated so many times over the years in order to make it look lower than it actually is. Right. But we're going to use the rule of 72 just to help us get a feel for the damage that inflation is doing to your retirement money, your overall wealth. You guys in listener land may be familiar with a pretty smart guy by the name of Albert Einstein. He is widely credited with coming up with this rule and discovering the rule of 72. And if you aren't familiar, it's time to actually take some notes. It's a concept you definitely need to be familiar with and use on a regular basis to help you see the value of growing your money and protecting it from inflation. So the rule of 72 shows us the amount of time it's going to take for your money to double based on any specific interest rate.

Mike Zeno:
So if you're getting 4% on your money and you divide that into 72, that gives you 18 years. That means your money will double every 18 years. It's pretty easy calculation to do and it's very, very important to know because the rule of 72 can either work for you or it can work against you. When we're talking about compound interest. And what I have found is that those who understand it have it working for them and those who don't understand it, it's absolutely working against them. So, fellas, ladies, you know, you need to understand this rule. Now, here is how it can work for you when you're growing your money, obviously, and then against you when your money is being devalued by inflation. So take that 4% and divide it into 72, which means if your inflation is at 4% and that's cutting your dollars basically in half every 18 years. So imagine this. Imagine you're somebody out there who's working and you're 47 years old. You make 60,000 a year. Well, in 18 years, because of the 4% inflation that 60,000. Ours is only going to be worth $30,000. That's half of what you were used to used to making as far as purchasing power. And then if you wait another 18 years, by the time you're 83, it's cut in half again. And what used to be $60,000 is really only worth about 15,000 in today's dollars. And so it's absolutely shocking, mind blowing when you look at it in terms of how it works against you.

Producer:
That's crazy. I was sitting here just trying to put that into perspective because you think that you are earning a certain amount of money every year, but then, oh, no, inflation comes rearing its ugly head. And even during normal times, like there's inflation is a thing that is that is with us historically. It has been with us all the time, with some exceptions, of course, but there are historically inflation. And so your money is always going to be less and less valuable as a general rule. But that sort of illustration there is just crazy because you think that you've got this money and you really don't have it.

Mike Zeno:
But no, unless you're earning it right. Remember, those who understand it tend to earn it. So if you can outpace inflation and say you're earning an 8% compound return and inflation is still at 4% in theory, now you're you're doubling your money instead of having it cut in half during those same time periods. So for an example, if you're getting a 7.2% return on your money, your money will double in ten years. If you're earning 9% on your money 72 divided by nine, your money will double in eight years. So these are reasonable expectations. And from a from a public standpoint, if if you're not getting a decent rate of return, then you need to look at other options that might provide you the opportunity to be able to earn more than your money. I'll tell you right now, if your money is sitting in a CD, if your money is sitting in a money market account, if your money is sitting in a high yield and I'm laughing and using air quotes when I say high yield write savings account at a bank or a credit union, I promise you you are bleeding slowly. I mean, it's like death by 10,000 paper cuts because you are not even coming close to keeping up with inflation. If that's you, you need to give me a call. You need to reach out to on our contact page and contact me because we have options that give you the ability to earn much higher percentages even than inflation is currently at and what the government likes to keep as their standard.

Producer:
Yeah. And once again, folks, that number is 740 560 1573 and the website Money Matters with Mike Dotcom. If you'd like to reach out to Mike and get that free consultation, just chat. I mean, it really is. It's a chat. It's a it's a learning experience for you both. You know, you get to learn some about Mike and what he's all about. He gets to learn what you're all about and your particular situation. And then, you know, the two sides meet and you find out if you want to work together and go forward. And that's just really what it's what it is all about. No huge pressure or anything when you initially meet. As you can tell, Mike, he's a nice guy and not an intimidating guy. So I can say that because I worked with him for a while now, but he's a he's a great guy. So give him a call. Once again, the number is 704560 1573. Well, as we move forward here, you know, we're talking about inflation and and people's money not being worth what it once was, but how, you know, ways that you can make that work for you and actually get that bigger return on your investments to make up for that. And and then some one thing that always goes up regardless of who is in office or whatever, over time, everything that or this is one of the things that is going to go up as taxes. I think always what I like to say, taxes are on sale right now. Right. Because in the future it's going to be more expensive.

Mike Zeno:
Yeah. I mean, if I ask people all the time, hey, do you think taxes are going up or down in the future? I've never once heard, Mike. I think taxes are going to be going down in the future. And so while inflation is the invisible tax, if you will, actual taxes, they sting. They come come tax time. And all throughout the year, when you see your your paycheck and you're like, wow, this is my gross income and this is what is deposited into my bank. Where did it go? Well, the majority of it is in taxes.

Producer:
Yeah, it absolutely is. And so let's take a listen actually to a piece that I did here recently on taxes and on where taxes. Could be headed and for whom? We'll chat about it on the other side. Here is a piece about the tax code and what it could mean for you or for others who are paying taxes. Probably bigger tax bills than I pay anyway. Let's give a listen and we'll chat about it in just a sec. What's happening in D.C. could affect your bottom line in retirement. I'm Matt McClure with the Retirement Radio Network, powered by Emera Life.

Producer:
This year, we're on track to cut the deficit by more than $1,000,000,000,300 billion.

Producer:
Not long ago, President Biden released his budget plan for the next fiscal year.

Producer:
First, fiscal responsibility. Second, safety and security. And thirdly, the excuse me, the investments needed to build a better America.

Producer:
Part of the fiscal responsibility portion of that plan is an increase in federal taxes, particularly on those who make more than $400,000 a year. That could be consequential.

Terry Haines:
You know, the one the one place where I've said that I think the president's budget is is a bit consequential, is in the so called billionaires tax.

Producer:
Terry Haines is founder of Washington, DC based Pangea Policy. He told CBS News.

Terry Haines:
Would they like to do something to increase rates on the most wealthy Americans slightly in order to pay for some of the things that they want to do? Yes, absolutely. They want to do that. And they also want to be out there on the hustings before the midterm elections saying that they're trying to do that, that that's a big priority.

Producer:
The plans could make things like Roth IRAs more enticing for pre-retirees, according to Entrepreneur magazine. Why? With tax rates potentially going up in the future, high income earners could put money into a Roth. Pay taxes on it at a lower rate now and then withdraw it later. Tax free. But what if you're not a high income earner? Well, some other policies could affect your retirement as well. Biden wants to increase the minimum Social Security benefit and raise it even more for retirees who've been collecting payments for 20 years. Higher taxes on the rich would pay for that under the plan. Whether or not all of this becomes law remains to be seen. After all, budget plans are largely political documents, and Congress has the final say. So how could happenings in Washington affect your retirement planning? That's a key question to consider as you prepare for the future with a retirement radio network powered by a married life. I'm Matt McClure. So, Mike, what do you think? They're we got we got taxes. And as I said beforehand, they're they're always going up for somebody. What do you think the effects of a lot of this could be?

Mike Zeno:
Well, I mean, history has shown us I mean, it's a great ideal to say, yeah, tax the rich. Those guys that make over 400 grand, we need to tax the heck out of them. And we shouldn't have to pay it nearly as much because they make so much more than we do. That's great in theory, but history is showing that it doesn't just affect the rich, because when the rich feel the pressure of higher taxes, they end up passing that cost on down to the middle and the lower class. We've already seen evidence of this. Unfortunately, with minimum wages, you know, being driven up, which $15 an hour is not a livable wage. But what we're starting to see, the last time I walked into a McDonald's, there wasn't anybody there to take my order. There were kiosks that replaced people because guess what? A kiosk doesn't cost the owner of that McDonald's an hourly wage. I'm starting to see now ads on Facebook and Instagram for people who want to invest in robotics that make French fries and flip burgers. And I'm thinking to myself, well, what is that going to do to the kids in our country who that's really they're they're learning that that minimum job, minimum wage type kind of job is where you don't yet have any skills. And so you're learning those skills, how to deal with people and how to follow systems and processes. And and, you know, those those jobs aren't necessarily meant for the people who go out and get a huge education. And then, you know, in theory, right. They're meant for folks that that are either retirees or they're making it their part time gig or they are trying to make sure that they're learning those skills as as a younger individual. But it's going to affect everybody. And so that's that's that's the thing that I think most of America needs to understand. And I think that the government needs to come up with a better plan than just tax the rich, because it sounds great. But it's definitely that trickle down effect, like you had mentioned earlier, where it's going to affect everybody.

Producer:
Yeah, that's the thing is it's some a lot of things that sound good on paper aren't necessarily great on on. Paper or in real life, rather the things that sound great on paper or not the best in real life. A lot. A lot of the times I'll get it out here eventually. You would think I talked for a living or something. We've got a lot more of the show to come. Stick around because we have right or wrong coming up. We're going to take a quick break, though. This is money matters with Mike. Money Matters with Mike is the website. And we'll return in just a moment. Out of the Tree of Life. I just picked me a plum.

Mike Zeno:
You came along and everything started into hum.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? That tune in to Money Matters with Mike to learn how you can protect and grow your hard earned money. Money matters with Mike every Saturday at noon right here on FM 100.1 and AM 1340. Protect your hard earned money today and schedule a free no obligation consultation now at Money Matters with Mike.

Producer:
Not affiliated with the United States government. The agent 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. A merrill 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 of the results obtained from the use of this information.

Producer:
You're listening to Money Matters with Mike. Listen closely, because money matters.

Producer:
Here's Mike. Welcome back. This is Money Matters with Mike. I'm Matt McClure here alongside the one and only Mike Zeno himself. Money Matters with Mike Dotcom is the website and the phone number. 704560 1573. It is time, Mike Zaino, for just I think one of my favorite parts of the show. And it's it's almost like a little bit like The Price Is Right or something. I don't know. I'll have to come up with a better like game show analogy, but we get to use sound effects and I just think that it's fun. It's called right or wrong, and it's an opportunity not only for us to have a little fun, but for you to learn something and for me to learn something from Mike as well, and for you to kind of play along with us at home or in your car or wherever you might be. You're ready for right or wrong there, Mike.

Mike Zeno:
I am, yes. Ready for right or wrong.

Producer:
You were born ready. Well, here's how it works, folks. It basically is like true or false kind of a deal. So I am going to present a statement and then Mike is going to tell us whether that statement is right or if it is wrong. Here is number one, there is no way to generate tax free income in retirement. Is that right or is that wrong, Mike?

Mike Zeno:
Matt. Are you kidding me? That is wrong. Absolutely wrong. In fact, there are two excellent, excellent ways to create tax free income in retirement. The first is a Roth IRA. Some of you may be out there going, what is a Roth? I've heard all about Roth, but I don't understand what it actually is. A Roth IRA is simply an individual retirement agreement that you have taken out worth after tax dollars. In other words, you've already paid the taxes on that money. So you're funding the IRA with money that you've already paid the taxes on. When you do that, that money grows tax free, not tax deferred like a traditional IRA, but tax free for the rest of its life. And when you go to take money out of that, IRA, because you already paid the taxes before you put it into the IRA, those distributions, those withdrawals that you take are also 100% tax free. So that is an excellent method for folks. And as an added bonus, there's not any RMDs, which is short for required minimum distributions. Those who are over the age of 72 already know about this sneaky little clause with tax deferred accounts. If you're fortunate enough to never need your money in a tax deferred account, the government is going to come knocking the year that you turn 72 so that they can collect the taxes. They're going to force you to take required minimum distributions so that you have to pay the piper. So that's one way you're wrong. The second way that you.

Producer:
To let me count the ways, correct?

Mike Zeno:
Well, the second way you are absolutely incorrect is that you can actually, believe it or not, use life insurance to fund a tax free retirement. What do I mean by that? Well, some of you out there are thinking, heck, life insurance. That's just when I die, my my family gets some money to pay for my funeral, and that's it. Well, that's one type of life insurance we like to call that death insurance that is burial or cremation or final expense life insurance. But in the financial world, we have advanced uses for life insurance where you can actually put money into a plan that will, in turn pay you tax free money in retirement. And the way you do that is by taking tax free loans against the death benefit, by over funding a life insurance plan. In other words, paying more than just the premium for the death benefit, you're able to create a guaranteed lifetime stream of income that you can never outlive, even if you live to be 120 years old. And it is offset when you do pass away by the death benefit. So in other words, if you're taking, you know, $500 a month or 1000 a month as a tax free loan against the million dollar death benefit, when you pass away, whatever you take and will just be subtracted to the amount paid out to your survivors. So, Matt, you are absolutely incorrect. That is wrong. There are ways absolutely are ways to generate tax free income and retirement.

Producer:
There we go. At least a couple of them there. I love that. Well, hey, if I if I am going to be proven wrong on something, at least I get good news when I am proven wrong. So there we go. I'm smiling. Okay, time for number two. Mike, this is right or wrong. Of course. Tell us whether this statement is right or wrong. Here it is. You can generate your own personal pension even if you are no longer working. Is that right or wrong?

Mike Zeno:
Matt. That's absolutely right. This time you got one, buddy. You got it right today. Okay. So pensions have gone the way of the dodo. They no longer really exist unless you're fortunate enough to work for a major company or the United States government where they offer a pension plan. And so for the rest of America, you're left to deal with the ability of kind of creating your own pension plan. And one one way to do that is through purchasing an annuity that you can set up to pay you a lifetime guaranteed income stream at a certain time in the future. Multiple strategies on doing this, and we have different strategies for those who need money now. We have strategies for those who don't really need money now but want to take money down the road. And again, one of the best strategies I've seen utilizing annuities is to ladder them. In other words, you purchase one every year for a number of years, and then in retirement you turn on income streams one at a time each year that you need it. And so that's one way to create your own personal pension plan in retirement. So, Matt, you hit that one right on the head. You got that one right. Definitely ways to create your own personal pension.

Producer:
That's awesome. And there are also and you can correct me if I'm wrong here, because I'm remembering stuff now from my from my financial education. But there are also annuities, right, where you can set it to pay out, not just for your lifetime, but you can set it to pay out for a certain number of years. So let's say if you've got an annuity that is going to pay for 30 years and you die in year 20, well, then your beneficiary will get paid for another ten more years, right? So that's not only planning for your income stream for yourself, but that can also benefit your loved ones.

Mike Zeno:
Yeah, there are many ways to set them up, including Joint and Survivor and period. Certain for sure.

Producer:
Yeah. Great. Well, awesome. So let's continue with right or wrong here. I have I've been right about at least one of these statements here. Let's see how how I average out as we do. Number three and here's the statement. You can increase your Social Security benefit by waiting additional time past your full retirement age. Is that right or is that wrong, Mike?

Mike Zeno:
Matt, you're on a roll. That one is right. You got that one correct. Again, in fact, every year that you wait to withdraw your Social Security benefit past your full retirement age, you are going to realize roughly an 8% compound return. And that might not seem significant to you, but it can make a huge difference. And so if you look at your last Social Security statement, if you still have one that they mailed to you years ago, you'll see that your early retirement, according to Social Security, is at age 62. Your full retirement would be anywhere from 65 to 66 and 66 in some months to 67. So we say between 65 and 67 would be considered full retirement. And then your maximum retirement age is age 70. So by looking at the age 62 number versus your full retirement age, most people will see somewhere between a 5 to $800 a month difference just by waiting those few years. And then each year beyond age 67, it still increases, but it does not behoove you to wait past age 70. That is the maximum amount that they will pay you. So you are right. Again, you can increase that Social Security benefit by waiting additional time past your full retirement age.

Producer:
Hey, two out of three. Not too bad. Not too bad.

Mike Zeno:
If I had it all, if I was playing baseball, that'd be a pretty good batting average.

Producer:
That's right. That's what I was going to say. I'd be in the Hall of Fame for sure, if that were the case or indeed. Well, very good. And folks, you know, you have heard here, Mike obviously knows a lot about all of these things that we're talking about. And he can actually share that knowledge with you, not only here on the air and on our podcast, but in person as well, or, you know, through on the phone, through Zoom, whatever you want to do, because he can offer you a free consultation that is absolutely risk free. It's obligation free, right, Mike? And there's no cost to anybody if they want to reach out and see if you might want to work together.

Mike Zeno:
That's that's correct. You know, I learned a little phrase recently that really struck a chord. And I've been using it incessantly since a buddy of mine named Greg. He told me that a man convinced against his will is of the same opinion still. And so my goal is not to convince you to do anything or everything right that I that I might have as far as in my repertoire of ways that I can help. My goal is to educate you and empower you to make the best decisions that fit your specific need. So what we do is analyze your financial situation. We'll dissect every little thing that you have, even if you already have an annuity or annuities. All right. What type are they? Are they the scary ible annuities, i.e., variable annuities that can lose money? And if you have one of those I know you've been losing this year. Right. We're going to find out what kind of fees you're currently paying because you should never pay anybody to lose your money. That's a concept that does not make any sense whatsoever. If you're nearing Medicare or Social Security, we want to do some advanced planning. We can do that. Basically, we're going to compare your situation to what's possible when you work with us. So if you already even if you already have an advisor out there, if you haven't heard from that advisor, it might be time to get a second opinion, a second set of eyes, and see if we might be able to work together and advance your situation so that you can maximize your retirement.

Producer:
Yeah, and you may be doing okay, but just because you're doing okay, that doesn't mean you couldn't do better, right?

Mike Zeno:
Absolutely. Yes. I mean, think about this. The best athletes still have a coach. Yeah, right. They do. They still have a coach. Michael Jordan had a coach. Tiger Woods had a coach. I mean, the best of the best have coaches. That's what enables them to level up. Great. You're doing awesome. You've got a couple hundred thousand dollars. Hey, how do we get you to half a million? All right, I'm doing great. I've got three quarters of $1,000,000. How do I get you to $2 million? Right. So these are all things that we can discuss and put plans in place because even the best have a coach.

Producer:
Yeah, absolutely. And if you are looking for a coach, folks, if you need one, money matters with Michael is the website you can go there for that free consultation, sign up the contact pages right there. It's easy to just fill out a little couple of bits of information about yourself and just reach out to Mike that way, or you can do it via the phone at 704. 5601573. All right, Mike, it is time now for my favorite part of the show, which only lasts roughly, I think, 4 seconds. And it it is the intro to this next segment. And here we go. I'll just let it speak for itself.

Producer:
It's time for this week's Problem Solver.

Producer:
The the drama and just, you know, over the top ness of it all is what I love. It's time for the problem solver, as if there were any question, Mike. So he knows he knows how much I love the the intro there. Well so the problem this week that I'm going to present well, let me put it this way, folks. What I do, as I often do, is present a problem to Mike. I often present Mike a problem, and he always solves that problem. So this is going to be this week's problem and it all has to do with risk. We've talked a lot about risk so far in this show. You know, we sort of began things by talking about the risk in the markets right now and all of that. So here is sort of the problem that we want to solve and the question that needs to be answered right here we go. What is the right amount of risk to have? And is there such a thing as smart risk, Mike?

Mike Zeno:
So the right amount of risk is subjective. Very subjective, because I know people that don't like losing a dollar and then I know other people that'll take all their money and they'll go to the casino and they don't care if they set it on fire. And so I think that they're for the most of us. There's a delicate balance. And so if you look at stocks in general, they have historically performed very well during times of inflation. So even though the markets have touched bear market territory this year, this can be seen as an opportunity for a long term investor. So if you're not retiring for at least ten years or so, cutting off your retirement and savings contributions for any period of time is likely to have detrimental effects decades from now. So I know a lot of people, because of the inflationary period that we're going through in the cost of goods and groceries are going up, they're backing off on their long term savings, their investments to their 401. Ks, and that can absolutely have just a catastrophic event or effect, I should say, on their savings long term.

Producer:
Yeah, that's the thing is I think that people might not realize sort of the what is it, the the butterfly effect, I guess it is, you know, where it's just a little tiny change or a ripple or something so small can have a big impact elsewhere, unseen, completely out of sight, out of mind at the moment. But because you're taking a certain action now, that doesn't mean that that you're going to have no effect later. You might think you're doing the right thing now, but later on is when you're really going to be feeling that pain.

Mike Zeno:
Yeah, absolutely. And I know a lot of folks, too, in times like this, you know, people who can't afford to lose money right now, they've been pretty much going to cash. They're moving all their assets into cash, thinking that the old the old moniker that cash is king still rings true. Well, I can tell you that cash is crap, because if you have your money in a bank that's earning you like percentages of percentages. And inflation is what it is. Even if inflation was back down in harnessed at 3%, 4% like it normally is, cash is not king. You're losing purchasing power. And so cash piles can provide a psychological comfort during down markets that runaway inflation can quickly erode your long term purchasing power if you're only earning 1% or around or less than. So once you have a solid emergency fund, which I would consider 6 to 12 months in reserves, now that's above what your normal operating expenses are and your operating expenses, your operating capital, that's what it takes each month to pay your bills and live comfortably after you have that in place 6 to 12 months. You should definitely consider maximizing your contributions in a smart risk strategy for sure. And to find out more about those smart risk strategies, who are you going to call? Not Ghostbusters, but Mike Zeno, right? 7045601573. It's the same number I've had since 1997 and everybody has it.

Mike Zeno:
If you're not calling it, you're missing out. You can also go to Money Matters with Mike Dotcom and fill out our Contact US page. So I'm happy to help in any way that I can. Matt We just got to get these people to understand that, you know what? Managing their money is not their set of skills. That's not what they do best know. They might be dentists out there. I'm not going to try to do a root canal. They might be mechanics out there. I'm not going to try to give anybody a I don't even know what the heck a manifold replace take off an exhaust manifold and like I just don't I don't even know what I'm talking about. Right. So the point is, is that when it comes to money, most people don't even know what they're talking about and need to speak to a professional who is going to break things down, break things down into plain English, not talk above them like a lot of people I know do. And people who have come to me are like, Mike, these people, all they did was try to talk coefficients and beta and this, that and the other. And I didn't understand a word they were saying to me. And so I just try to break down complex financial situations into terms that they can understand and put into action.

Producer:
Yeah, and that's what it's all about, taking that knowledge, as we said earlier in the show, taking that knowledge and turning it into action that you can take to improve your life. Well, folks, this is money matters with Mike. Once again, money matters with Mike is the website. We're going to take just a quick time out here, but we have a little bit more time to spend with you. And we're going to talk about some fears that retirees have. And you might be a little bit surprised to understand or learn, according to a survey, what people fear even more than death itself. Stick around. We've got more money matters with Mike coming up right after this.

Mike Zeno:
At first I was afraid. I was petrified. I kept thinking I could never live without you by my side. But then I spent so many nights just thinking how you done me wrong.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? That tune in to Money Matters with Mike to learn how you can protect and grow your hard earned money. Money matters with Mike every Saturday at noon right here on FM 100.1 and AM 1340. Protect your hard earned money today and schedule a free no obligation consultation now at Money Matters with Mike. You're listening to Money Matters with Mike. Mike the Money Man. The more you listen, the more you make. Here's Mike.

Producer:
Right. This is money matters with Mike. I am Matt McClure here alongside Mike Zeno. Talking about life and money and planning for retirement and educating folks about their retirement planning. You know, educating people about all of the above. It is what Mike Zeno does best, and that's why he likes to share his knowledge with all of you. Well, we have kind of shocking, I think, results of a survey that was recently done by AIG life and retirement. And Mike, I want to get your your opinion, your take on this and maybe some possible solutions to this as well. When they asked when AIG asked about planning for retirement, 59% of respondents said that they fear running out of money more than they fear death itself. It's close to two thirds of people saying that they actually fear running out of money more than they fear death itself. What do you.

Mike Zeno:
Say? I mean, that that statistic actually blows me away. I mean, that is a very, very high percentage. But it's true. And why is it true? Americans just simply are not saving enough for retirement. And what that's doing, unfortunately, is it's causing them a lot of stress. It has become so common that the fear of running out of money is now the number one fear that most people have. And guess what? It's not just those who haven't saved that much money for retirement. I'm seeing a lot of folks that have pretty decent amounts saved for retirement and they're still worried about their financial futures. So wherever you fall on that spectrum, whether you have a little or you have a lot, we have options for you and solutions to help you address this fear. So what are those solutions? Well, number one, you've got to beat inflation or at least minimize the effect that it has on you by putting your money in vehicles that allow it to earn more than the current rate of inflation. Now, if you are a younger person, then investing in the stock market is the way to go. I mean, after all, even though the markets are down right now, younger people have this benefit. They have the luxury of having time on their side. And so they have time to allow it to come back. And if they keep buying when the market is in decline, what they're actually doing is buying those stocks at a discount so that when the market does turn around, they're going to rebound that much faster because they now hold more shares of the stock. Right. They have purchased shares that were on sale.

Mike Zeno:
I know a lot of people only buy things when they're on sale. Well, when the markets are down as much as they've been down this year, stocks are on sale for the people who do have the luxury of time. Now, for those of you out there who don't have that luxury on your side, and I'm talking to those who are within five years of retirement and to those who are already retired, you can't afford to lose what you've just spent your whole life building. There is a show on the Discovery Channel. It's called The Deadliest Catch. Many people out there have watched the show. It is an amazing show. These fishermen go out off the the Bering Straits of Alaska out there in the most dangerous waters on the face of the planet. We're talking 80 foot waves, 120 foot waves. And they go out there and risk their lives to go out and catch King Crab. The reason that they call this show The Deadliest Catch is that somebody dies every season on the show. And it's just a documentary. It's not like a what do you call those reality TV where there's a prize at the end? No, these people are just going out there so that we can eat king crab. I like king crab personally. It's my favorite kind of crab. But and I really thank those folks that go out there and do it. But when they hit their quota and they fill their pots with all those crab, they don't just hang out in party on those 80 to 120 foot waves, do they, Matt?

Producer:
I wouldn't I wouldn't think so, no.

Mike Zeno:
What they do is they get their boat back to the pier. Some of you out there listening to me right now, you guys need to get your boat back to the pier. And you guys should strongly consider a fixed indexed annuity that helps you beat inflation and build your own personal pension that we talked about before. And that mat, correct me if I'm wrong, I think we have a little excerpt from our buddy Ford Stokes about building your own personal pension now.

Producer:
That's absolutely right. We do have Ford. Stokes is an author. He's, you know, a financial advisor himself. And he's written a book called Annuity 360. And this is actually one of the chapters of that book. Here are this little snippet for just a couple of minutes. And it's. Called You can build your own personal pension.

Ford Stokes:
Chapter nine You can create your own personal pension. Big idea. Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiary. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don't overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date. You specify you don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiary. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don't give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee. But you can still create a personal pension without an income rider on your annuity.

Ford Stokes:
If you get an annuity with an income rider but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuities in your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payment. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals. From your accumulation based annuity policy, many accumulation annuities are set up to be RMD friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier.

Ford Stokes:
Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they'll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income rider, know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account.

Producer:
And that was just an excerpt from Annuity 360, talking about building your own personal pension. Now, that, of course, Mike, a great solution for a lot of folks, but there's more.

Mike Zeno:
That's correct, Matt. In fact, another one that I like to use is called the 4% rule. And the 4% rule is just a practical rule of thumb that can be used by retirees to decide how much they should withdraw from their retirement funds every year. And so if you're looking at 4% of your money, simple math says that that will last you 25 years of life. So if you're retiring in your late fifties to early sixties, then 25 years will put you in your mid to late eighties. And so that assumes and takes a really, really big assumption on two major important factors. Number one, you're not losing any of that money. And then number two, you're not earning any of that any money on that money. So it's almost as if your money is in a vacuum. So it's just a general rule. Obviously, we have solutions that will take losing money out of the equation. That's a variable that we can eliminate for you. And so. Therefore, anything that you earn on your money from that point on in one of our solutions to your problem will prolong the longevity of those funds. Experts are divided on whether the 4% rule is actually very viable in today's interest rate climate and in today's inflationary climate. Because you might be a little bit older and you can afford to take 5%, or you might have extreme longevity in your family to where everybody lives well into their nineties or even eclipses age 100. And for you, that number might be 3%. So again, it's just a practical rule, but the 4% rule, I think, is one that a lot of retirees can lean on going into retirement.

Producer:
Right. And actually, we're going to play just a little bit more of Fords book Annuity 360, which talks about the 4% rule and gives a little bit more insight and detail here about exactly what it is and how it works. And we'll talk about another solution, possible solution, I should say, on the other side. This is the 4% rule from annuity 360.

Ford Stokes:
Chapter seven, the 4% rule, big idea withdrawing 4% or less annually from your portfolio will ensure that you will not draw down your account too quickly and that your income lasts for your entire retirement. What is it? The 4% rule is a rule of thumb used by investors to determine how much retirees should withdraw from their retirement account each year. This rule should ideally help provide a steady income stream for the retiree, while also maintaining an account balance that keeps their income flowing throughout retirement by withdrawing only 4% from your account, many financial professionals believe this will help your wealth last through your retirement and that you will be able to live comfortably with this withdrawal rate. This rule helps financial planners and retirees set the withdrawal rate for their portfolio. Life expectancy also plays an important role in this process. By determining if the selected rate will be sustainable, retirees that live longer will need portfolios to last longer, and medical costs and other expenses could increase as retirees age. Where did this rule come from? The 4% rule was created using historical data on stock and bond returns over a 50 year period from 1926 to 1976. Before the early 1990s, experts generally considered 5% to be the safe amount for retirees to withdraw from their portfolio each year. In 1994, William Bingham, a financial advisor, conducted a study of historical returns. He focused heavily on the severe market downturns in the 1930s and the 1970s. Bengtsson concluded that even during those markets, there was no historical basis that a withdrawal rate based on the 4% rule would exhaust a retirement portfolio in less than 33 years.

Ford Stokes:
What about inflation? Some retirees will choose to stick to the 4% rule all the time and never adjust for inflation. However, the rule allows retirees to increase the withdrawal rate to keep up with inflation. There are two options to do that. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Option one Setting a flat annual increase of 2%, which is the Federal Reserve's target inflation rate. Option two Adjusting withdrawals based on actual inflation rate. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Two scenarios where you should avoid using the 4% rule scenario. One A severe or protracted market downturn can erode the value of a high risk investment vehicle much faster than it can in a typical retirement portfolio. Be cognizant of the health of the market and talk with a professional if you have any questions or want to make changes to your portfolio. Scenario two The 4% rule does not work unless you commit to it year in and year out. Violating the rule for one year to splurge on major purchases can have severe consequences down the road. It will reduce the principal, which directly impacts the compound interest that the retiree depends on for sustainability.

Producer:
And once again, that was a little excerpt from the book Annuity 360, The 4% rule. And there's one more thing before we have to run here. I know, Mike, that we wanted to mention to folks we were dealing with that sort of fear of running out of money in retirement.

Mike Zeno:
Absolutely. A solution to that fear could be just eliminate debt. And one of that, the biggest sources of debt is your mortgage. If you have a mortgage, you want to try to go into retirement. Without that mortgage, it is if it's even a remote possibility going into retirement without a mortgage, that can be just a huge weight off of your shoulders because if you still have one, a mortgage payment is going to consume a lot of that monthly Social Security benefit. I see people in their sixties all the time taking out mortgages, and I just kind of shake my head, especially with today's mortgage interest rates hovering between five and six, six and a half percent. And that's if you have great credit, and that's going to cost you several hundred dollars more each and every month than just one year ago. So paying off your home would definitely be a solution and heading into retirement with as minimal debt as. Possible can just give you the biggest peace of mind and knowing that you don't have to come up with those extra dollars.

Producer:
Well, very good, Mike. It is just about time for us to wrap things up here. But money matters with Mike is the show. Money matters with Mike. Com therefore is the website. We made it easy for you. Money matters with Mike. Com and the phone number for that free consultation we've been telling you about 704 560 1573. All right, Mike, I have enjoyed it once again, sir, and I look forward to talking to you again next week.

Mike Zeno:
It's been real. Matt, I appreciate you. I appreciate all of our listeners out there. Without you guys, we don't exist. So as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation visit money matters with mike dot com or pick up the phone and call 704560 1573 That's 7045601573 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. It does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. A pro 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. Are the results obtained from the use of this information?

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