Common Pitfalls You Want to Avoid in Retirement

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

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then tuned 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 9 a.m. right here on FM 100.1 and Am 1340. Schedule a free, no obligation consultation now at Money Matters with Mike.com.

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 time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing it again. On today's show, we're going to show you and help you understand, as well as navigate common challenges that American retirees are facing these days. And we're going to show you some just great solutions for how you can prepare. And as always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, brother?

Producer:
I'm doing great, Mike I am always glad to spend a day here on the weekend with you for Money Matters with Mike and you know, sharing a lot of great info with people and we've got plenty of it to go around today. Yeah, we, you know, have you ever like, gotten on a flight and the and the captain says, oh, it's going to take longer than we thought to get there because we've got a headwind, uh, that we're facing. That's kind of what we're going to talk about today, like those headwinds of retirement planning a little bit, things that could cause you to take a little bit longer to get there than than you thought or that you had planned on.

Mike Zaino:
Very true, very true. Because, uh, I just got off a plane late, late, late last night coming back from Colorado. Thankfully, we had a tailwind and we got in early. Uh, the only issue is, is when you get in early, they typically don't have a gate for you already, so we had to sit on the tarmac for a few minutes.

Producer:
So don't you love that? Yeah, we're here early, but not quite. Uh, but yeah. So close yet so far away. Um, but yeah. So we've got a lot of great stuff to get to here on the show today. Uh, Mike, as mentioned, we'll talk about those headwinds coming up. We've also got, um, some an update as part of that on the national debt. That is one of the headwinds. We'll tell you why. Um, the cost of health care in retirement as well. It is going up, creating a headwind for you as you plan for your retirement. Also. And we'll discuss some retirement red flags, some very common landmines to avoid for folks. Um, also wanted to say thank you, thank you, thank you to all of the listeners out there. Without you, we do not have a show at all. So we really do appreciate it. Whether you're listening here on the radio, on WRI, or if you're listening to the podcast version of the show, maybe you're watching this on YouTube wherever you get Money matters. With Mike, we thank you for doing so because it is so, so important for you to keep the show growing and for us to be able to spread, spread the good word about all the things that we talk about, uh, about how you can plan your financial future and make your retirement the retirement that you've always dreamed of.

Mike Zaino:
And one thing that I wanted to highlight that you just said, Matt, I'm going to actually ask all of our listeners for a favor, if you guys don't mind going to YouTube searching Money Matters with Mike and then like and subscribe to the channel. If you guys would do that, it would help our channel grow and enable us to reach more people. So I really, really, really appreciate if you would go and do that for us.

Producer:
Yeah, it's like a snowball effect the way that the algorithm works, which is far above my pay grade to be able to understand. But the more people that like us and subscribe to the YouTube channel, the more that, uh, means then that leads to in the future, kind of to put it, uh, a little bit simply anyway. But yeah, please go do that. And we would really, really appreciate the likes and the follows there. All right. Let's, uh, before we get into sort of the meat of the show here, we'll talk about, uh, some, some words of wisdom, some inspiration to start our. Conversation.

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

Producer:
And this week's quote comes from Joe Moore, who said, quote, a simple fact that is hard to learn is the time to save money is when you have some. Hmm.

Mike Zaino:
Yeah, I mean that that is one I think the profundity of that quote, I mean, it suggests that the best opportunity to save money is when you are in a position to do so, rather than waiting for a future time when you might have more resources. And it really emphasizes the importance of developing a habit of saving, regardless of the amount, as it lays a foundation for financial stability and security down the road.

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

Mike Zaino:
And when you relate this to saving for retirement, the quote highlights the significance of starting very early in one's career when there is income available. Because many people tend to postpone saving for retirement, thinking that they're going to have more disposable income later on in life. But then come to realize that delaying saving for retirement can significantly impact the amount of money that you're able to accumulate over time due to that pesky little thing that has a lot of power called compound interest. And so by starting to save for retirement, when you have some income, even if it's just a modest amount, you give your money more time to grow through investments, whether those are stocks, fixed indexed annuities, 401. S, IRAs or any other retirement type accounts. Right? The earlier you begin saving, the longer your investments have to compound and then generate those returns that are really going to enable you to enjoy retirement, it can make a substantial difference in the amount of money that you have available for retirement. Once you reach that stage of your life. And additionally, starting to save early allows you to develop those really sound fundamental financial habits as well as discipline, which can be invaluable as you progress through your career and face various financial challenges. And here's a big thing, all right. It also reduces the pressure and the necessity to save larger sums later in life, making it much more manageable for you to achieve your financial and retirement goals. So the bottom line seize the opportunity to save money whenever possible, especially for those long terme goals like retirement, by starting early and consistently contributing to your retirement savings, regardless of the amount that can have a significant impact on your financial well-being in the future.

Producer:
Early and often is the key. And that really is the compounding interest, the power of that over time. Before you hit the nail on the head to Mike when you said it really does take the pressure off, having to save a larger amount later on to try and play catch up, because it's much more difficult to get where you would have been had you started saving earlier because of compounding interest, which is just, you know, interest earned on top of interest each and every year that you're putting that money away.

Mike Zaino:
Yeah. I mean, like when you're in your 20s, it's, you know, a hundred bucks a month kind of thing, maybe 200 bucks a month. If you wait until your 30s, you're going to have to save like 800 bucks a month. By the time you're in your 40s. It's a few thousand dollars a month. And God forbid you wait until your 50s. Uh, or later you're going to have to start dumping copious amounts of money. Most of the income that you make if you want to enjoy retirement. So there is no, um, secret sauce. It's just starting early and letting compound interest, you know, work in on your behalf and in your favor. Yeah.

Producer:
And while we can't turn back the clock and, uh, you know, make, uh, make you, you know, 21 years old again or whatever, we can help you catch up. And you know that that is something that you can absolutely do. There are different vehicles out there to help you make up for lost time. Um, it may not be as easy as it would have been, but there are ways to do it, and Mike Zaino can help you along that path if you want to go to Money Matters with Mike.com, that's a great thing for you to do. Uh, folks, Money Matters with Mike.com. You can start down that path with a free, no obligation consultation. We'll talk about that a few more times during the show. So you kind of know what to expect when you give Mike a call or go to the website. And speaking of calling, you can do that by dialing 70456015737045601573, provided all the cell service in the country doesn't go out again like it did this week for at least two AT&T customers, uh, of which I am one. I was not a happy person when I woke up on Thursday morning and had no cell service. That was just not fun. But anyway, so give Mike a call. We're assuming that, uh, all cell lines will be working when you try to do that.

Producer:
Um, and that would create, uh, if you're not able to get in touch with Mike, would create a headwind for you. Hey, see what I did there with that segue? Um, I get the master of Segways here. Um, but no, we're talking about. And the reason I say that is because we're talking about some financial headwinds for retirees and pre-retirees here in America, and there are several of them that we're going to touch on, um, things that might make retirement a bit more difficult or lead to a delay in your retirement, something that is unforeseen for you. You might want to retire, call it quits at the age of 65, and, you know, sit at home in front of the TV or go to the beach or the mountains or whatever. But you get there and you find, oh, wait a minute, I can't do that because of maybe one or more of these things we're going to talk about. Number one is actually something that, uh, a lot of the listeners might probably haven't necessarily thought about here, and that's baby boomers actually withdrawing their required minimum distributions, those RMDs that we talk about creating downward pressure on financial markets.

Mike Zaino:
Yeah, I mean, and a lot of people may say, well, why is this happening? Well, if you think back prior to 1980, 92% of retirement savings plan contributions were to company managed pension plans. Okay. Well, then the, uh, introduction of the 401 K in 1980 led to the largest expansion of the history of the United States stock market. So people were just dumping money into into the market by, you know, virtue of their 401 s now, the first generation of those regular contributors to those 401 s are retiring, and they're reaching the age for those required minimum distributions. And that's creating a trading environment where there are frequently more sellers than buyers, as assets are then sold off to meet those required minimum distributions.

Producer:
Yeah, it really does create a problem. And there are so many baby boomers out there. You know, it's this the largest generation. And you know what, 10,000 retiring each and every day. Like it's it's a lot of people.

Mike Zaino:
It's actually up to 12,000 right now per day. So yeah, it's uh, people are escaping the workforce in droves and trying to get on to their golden years and enjoy what they've worked so hard for.

Producer:
Yeah, yeah, it really is, um, very, very true. And, you know, you look at, um, a lot of the, uh, returns for the Dow Jones Industrial Average. Boy, we saw this big boom over the 20 year period between 1980 and 1999. Uh, 1,200% plus return, 1,200% return over those.

Mike Zaino:
20 years, right?

Producer:
That 20 year period. Then you look at 2000 to 2018, 113%, which is, you know, it's not small change, but it's not 1,200%. So there's a.

Mike Zaino:
Little less.

Producer:
Just slightly. So you can see kind of that effect coming into play there. When you look at those returns just really, uh, being cut because of those required minimum distributions and some other things. But that's one of those headwinds that we're talking about today. Number two, uh, headwinds in our discussions here, ongoing wars and global instability. Um, boy, yeah, there are a few of those we got, you know, Russia and Ukraine. We've got, um, uh, Israel and Hamas. We've got all of these things going on, and it really does create uncertainty and instability around the world. Yeah.

Mike Zaino:
And I don't know that people think about the impact that that, you know, uncertainty on a global scale, especially when we're talking about wars. I don't think that they really think about how that impacts, you know, their 401 K's, their retirement savings. But you know, a couple things. Wars and increased government spending. They often lead to economic instability which can lead to very large fluctuations in the stock market. It can also lead to the devaluation of currency as well as inflation. And so retirees who depend on fixed incomes, whether they are pensions or other investment returns, they might find it very challenging to maintain their standard of living as the cost of goods and services rises. And so during times of war, as well as heightened government spending on military efforts, resources can be diverted away from those social welfare programs that support retirees, such as health care and social security, and other forms of assistance, which could lead to reduced benefits or increase costs for retirees who rely on those programs for support.

Producer:
Yeah. And, you know, you talk about, um, increased costs or reduce benefits. One thing that we're also watching very closely, and we mentioned on the show quite a bit because of its importance, because it could lead to those things. Yes. Is the national debt, which now, Mike is 34.2 closing in on $34.3 trillion and counting, according to US debt clock. Org.

Mike Zaino:
If any of our listeners have ever gone to US debt clock.org and saw how fast those dollars are just getting added to the national debt, I think it would, you know, blow your mind. But in order to address the national debt, the United States may have to increase taxes because, I mean, think about this. They can either, uh, spend less, which they're never going to do, or they can tax more. And if you keep in mind the fact that we are currently living in historically low tax environment times, um, they really don't have anywhere to go but up. And so excessive government borrowing definitely leads to inflation, which erodes the purchasing power of retirees fixed incomes as well as their savings because their dollar is not being able to be stretched as far. And so having those high levels of national debt, what it can do, it can undermine investor confidence and it can lead to market volatility. Which guess what, folks, it also impacts retirees investment portfolios as well as their retirement savings. So when you consider the fact that a large portion of government revenue now has to be allocated towards servicing, just the interest on the national debt, that's going to divert those resources away from those critical programs that we just mentioned and the services that support retirees.

Producer:
Yeah, it absolutely does. And that is, um, you know, something to always keep in mind these big talked about wars and instability, um, you know, across the globe, the national debt, all of these things that are are these big picture sort of, um, you know, macro economic things can have huge impacts on all of us and especially on people who. Are the most vulnerable. Those who rely on things like Social Security, maybe for their only source of income, which is why one of the reasons why this show exists, Mike, is because we want people to not rely on Social Security as their sole source of income in retirement. We want you to be prepared, uh, for, you know, that to be just the cherry on top of your retirement, not your sole source of retirement income. All right. So number four headwind here as we continue on is rising taxes. And this is you know goes right hand in hand with number three. Um, because that rising national debt could lead to rising taxes in the future as you just mentioned.

Mike Zaino:
Right. I mean, understand that the national debt could absolutely lead to higher taxes in the future, as the government looks for ways to manage tens of trillions of dollars in debt. And so, you know, it's important to note that historically, taxes are on the lower end. So there is plenty of room as well as historic precedent for taxes to go up. And so, again, many of those retirees that live on those fixed incomes and very tight budgets, um, a significant change in tax rates, guess what? It's going to dramatically, dramatically affect that. You know, their lifestyle in retirement. So, you know, there are things that we can do to prepare. And that's why we do the show just to help people, you know, mitigate taxes or have a better tax strategy, market efficiency fee structures. Um, again, if you don't take action, folks, I mean, you got nobody to blame but yourselves.

Producer:
Yeah. And really, you know, you haven't made a decision until you've taken action. That's another thing that we'll say here quite a bit because, you know, you can say, oh, well, I want to do this or I want to do that, I want to make my situation better. But you've got to actually take action to make that happen. Because wanting and, you know, uh, saying that you're going to do it, that's not a plan, actually getting a plan in place and taking action on that plan. That is, uh, the plan that that is, you know, making a change in your life. And you can actually get started on that road, folks, by going to Money Matters with Mike.com. Click on the contact page there. Money Matters with Mike.com to schedule a free no obligation consultation. You can also call Mike at (704) 560-1573. Um, you mentioned briefly, uh, Mike, when we were talking just a few minutes ago, pensions. And that's actually headwind number five, the lack of pensions in the workplace these days, it's like finding a unicorn.

Mike Zaino:
Yeah, or a dodo bird in that too.

Producer:
Yeah.

Mike Zaino:
Only 15%, folks. 15% of private industry workers actually have access to a pension, which is also known as a deferred, a defined, excuse me, defined benefit plan. And that's according to the United States Bureau of Labor Statistics data. And that coincides with the trend that more employers are shifting toward what is known as a defined contribution plan. That takes the onus off of them. Okay, uh, to, to basically fund your retirement and puts it all back on you. Uh, and of course, we're talking about those 401 s or 403 B's, or if you're a federal employee, a thrift savings plan. And so without a pension, individuals have to rely possibly solely on personal savings, on Social Security and on other retirement accounts for their income in retirement. And so you now bear the responsibility of managing your own investments and savings for retirement, which can be extremely challenging for most. Okay. And it might lead to inadequate preparation without the help of a licensed professional. So pension plans often provide guaranteed income for life, which protects retirees from the risk of outliving their savings and without a pension. If you don't have guaranteed income for life, you're going to face uncertainty as far as you know, managing your own income through retirement, especially as life expectancy goes up and increases. People are living much longer now than they ever have before, and so individuals without pensions can be overly dependent. Matt, you mentioned this before on Social Security benefits as, God forbid, their primary source of income in retirement, which might not be adequate to cover all of those retirement expenses. And then retirees without pensions are much more exposed to market fluctuations as as well as investment risks, which will impact the value of their retirement savings as well as their income streams.

Producer:
Yeah, absolutely. So and one thing that we often advocate and talk about here is, you know, building your own personal pension, you know, it's the power is in your hands, which is a good thing. Um, but the power is in your hands, which means you got to take action once again. Right? So building your own personal pension is possible. You can give yourself that income stream that you can never outlive. Uh, kind of like what employers used to do, by and large. Now, as you say, only. 15% of them do it, but most of them used to. And so you can do that. You can still have that income for life, but it falls on you, the the consumer, the employee, the worker, the average everyday American to do that for yourself. But it is possible, and there are a lot of different ways to do that. Mike, I think one thing that we talk about a lot is a fixed indexed annuity, right? Yeah.

Mike Zaino:
I mean, fixed indexed annuities, especially the ones that are out, say, in the last couple of years. These things are phenomenal avenues for those who want to create, uh, whether it's a mechanism for protected growth or a mechanism for guaranteed lifetime income or a combination of both, and a lot of them will offer an incentive, uh, give you a chance to make up for both lost time as well as lost dollars if you were exposed to any of the market volatility, say, in 2008 or 2018 or 2020 or 2022, I mean, the list goes on and on, right? So I think there, you know, just a great avenue for those where it fits and, you know, for at least a portion of your portfolio for sure.

Producer:
Yeah, definitely. So well, um, number six headwind here on our, on our list of these, these headwinds for retirement is actually rising health care costs. This is a huge one because it's that makes up such a huge chunk of people's costs in retirement already.

Mike Zaino:
It does. And I think another surprising fact is, is the fact that, you know, there are a lot of healthy people out there, but there are also a lot of unhealthy people out there. And I think the the statistic as far as the percentage of healthy to unhealthy is definitely leaning more in the favor of unhealthy Americans. Um, I know when I go over to Europe and, and have had an opportunity to vacation there, your meal portion sizes are literally a quarter of the size that we as Americans eat. You know, everything's bigger in America, right? Well, that leads to obesity. And obesity leads to a lot of other problems. And even if you don't have any health challenges now, the chances of your body breaking down over time, um, is strong. Okay. And so, you know, if, if you had to say, what would you do? Um, with, say, $351,000 when you retired, you might think of a, a lot of things that you could do with that, you know, go travel, go play golf and tennis and maybe join a club or something. And it might sound like a very nice nest egg, but you may need every single penny of that just to cover your costs. As far as health care is concerned in retirement, including your Medicare premiums, including your drugs, after insurance pays its part. And that's according to recent research. And guess what, folks? That figure is conservative. According to the research that was put together by a story in USA today.

Producer:
Yeah. And it actually found that, you know, that's assuming that retirees have Medicare Part A, which covers hospital stays, part B, which is medical, part D, which is drugs, and part G, which is expenses not covered by A and B, like coinsurance, co-pays, that kind of stuff. And the report says, you know, that that is is what you're going to need to have a 90% chance of meeting your health care costs in retirement, including premiums and out of pocket costs. These numbers, Mike, are just a little, um, a little astonishing, a little scary.

Mike Zaino:
Yeah, I mean, they are. And keep in fact, that's only to meet 90% of it, which means there's another, uh, 10% that you guys need to cover. So a 65 year old man with average premiums is going to need $184,000 in savings. That's no insignificant sum of money. A 65 year old woman is going to need $217,000 in savings. That's because women typically live longer than men, adding more to their health care. Total. Right? Couples will need 351,000 and then a couple with a particularly expensive prescription drug plan, they're going to need almost a half $1 million, you know, to make sure that they're covered 90%, which means the other 10%. I mean, where's that coming from? So it is very important to note that these estimates do not include services that are covered by Medicare, such as dental, vision or hearing. Excuse me, not covered by Medicare, which means you still have to pay for dental, vision and hearing. And they also do not include long terme care, whether that is assisted living in home health care or, um, nursing home care. So a survey by Senior Living, uh, showed that monthly assisted living costs can read. Monthly assisted living costs can reach 8200. $48, and in home health care can total around almost $3,900 a month.

Producer:
I mean, come on, it is. It is not cheap and and nobody going to pay for it but you. So that's why it's so important to have a plan. And it's so important to get that plan in place as early as humanly possible. Right?

Mike Zaino:
It is. And working with a financial professional who can help you prepare for those expenses and show you how that you can regularly save and invest for your retirement. Um, there are some other things that you can do. You can modify your home. You can downsize to somewhere that you can stay as long as possible. Uh, you probably should consider some form of long terme. Um, health insurance coverage. Uh, as far as you know, long Terme care is concerned, and then seniors can can look at something called Medicare Advantage, which is also known as part C, which is an all in one alternative to the original Medicare. It picks up what A and B don't, and those plans often will have a zero premium copay. As far as copay, they don't cost you anything. Um, and then other benefits that include things like dental and vision and hearing services. So, you know, if you don't want your golden years tarnished by financial stress, which is not the goal. Um, you're going to need to be prepared for the rising cost of health care. So please give me a call (704) 560-1573. Visit the website at Money Matters with Mike comm and get in contact with me so I can help answer all of those retirement questions.

Producer:
That's absolutely right. Get that plan in place that is so, so important for you and your financial future and the future of your your health as well, because it's such a big part, as we say, of your spending in retirement. It's also, um, you know, it's your health and, and you got to take care of it, and you don't want the cost of it to be any sort of barrier to you taking care of yourself. So that's another aspect, right?

Mike Zaino:
Stress will kill you. Seriously. It will kill you.

Producer:
You talk about body breaking down. One thing that will lead to that happening sooner than later is definitely stress. The toll that it takes cannot be understated at all. Um, all right. So number seven, our last headwind that we're going to talk about for pre-retirees and retirees here in the good old US of A is rising inflation. Now inflation has been you know we talked about um just the the say the cost of living adjustment the couple of past couple of years, I should say for, um, recipients of Social Security that has gone way up over the past couple of years because of inflation. So that's at least a little bit of good news there. But the bad news is you got to have really high inflation to get the increases that we've seen. And it's been it's been insane.

Mike Zaino:
Yeah. So I mean inflation diminishes the real value of savings and investments potentially reducing retirees ability to generate sufficient income and cover expenses throughout retirement. And so the health care expenses tend to increase faster than general inflation rates, which places higher financial pressure on retirees, particularly those with limited resources. Matt.

Producer:
Yeah, that's absolutely right. And, you know, I mean, we talk about those people who are relying on Social Security. I've mentioned it a couple of times as their primary source, if not only source of income in retirement. And that is those are the people who are impacted the most by this. Luckily, as I mentioned a few minutes ago here, the benefits do receive. The recipients of those Social Security benefits receive cost of living adjustments to account for inflation. But you know, we talk about inflation as far as what the data shows, what what they sort of count as the inflation number. And that's what they base the cost of living adjustments on. But true inflation might might actually be higher than that. When you look at um, some things that are maybe not included in those numbers.

Mike Zaino:
Yeah, especially the fact that they changed the way that they calculate inflation, right, to make it very palatable for the American public. But if you go behind the scenes and you actually look at, you know, uh, sites like Shadow Stats to see what the true inflation is, I mean, it's kind of mind blowing. And so, you know, with longer life expectancies, bottom line, retirees are going to spend more years in retirement, which increases their exposure to the effects of inflation and highlights the importance of having inflation resistant income sources and investment strategies.

Producer:
And if you want to get started on a plan that will plan for inflation, that will, you know, help you, uh, ease the the effects of inflation on your retirement and help you not be as exposed to. How it affects you and your bottom line going forward. Give Mike Zaino a call 7045601573704560 1573. You can also go online to the website Money Matters with Mike. Com well, we also are going to talk about some red flags for your retirement today. And these are things that you will want to avoid when it comes to retirement planning. And also just living in retirement period things that you do not want to do. But they're pretty common. And so that's why we're educating you about them, highlighting them today and telling you why you need to avoid these. Number one is carrying a balance on credit cards. And boy that really does ring true these days. Mike, as you mentioned a minute ago, interest rates are very high these days. We haven't seen interest rates like this in a long, long time. And that really means that you are paying so much more for any debt that you are carrying on your credit card, month to month.

Mike Zaino:
It can, and carrying a balance on credit card can very easily and quickly get you further in debt. And it means that you're paying higher interest, more fees, and therefore more money than you absolutely should be paying. Plus, as retirees transition from receiving a steady paycheck over to a fixed income, which is typically less than what they were making when they were working, paying off interest can become much more difficult because the interest accrued can snowball, which quickly depletes the savings that you've, you know, amassed for your retirement. Um, you know, future. And so bottom line here is, if you can't afford to pay off the statement balance at the end of each month, guess what? You can't afford it. Okay. And so don't succumb to that, that instant gratification that we as Americans love, right. The, the the endorphins it creates by buying something? Well, if you can't pay for it at the end of the month, the pain that is going to be felt by carrying over and paying more interest just isn't worth it.

Producer:
Yeah, boy, that's that. That retail therapy that so many people fall victim to. And, uh, you know, I mean, people a lot of people are guilty of it. I know I have done that before. In all.

Mike Zaino:
Have we all have done that?

Producer:
Yeah. And, you know, you don't have to be like on an episode of hoarders to be guilty of retail therapy, although that seems to be one of the more common, uh, causes of that. Um, but, you know, it doesn't have to go to that extreme, uh, but at the same time, just resist that temptation and only buy what you can afford. Bottom line there. And that will help you, um, live much better, uh, not only in your retirement years, but throughout your life as well. Also, you know, timing of Social Security, Mike, this is a big one for people. And it could be, you know, the answer could be different for everybody. It might people might say, oh, I just I turned 62. I'm taking my Social Security right now. I'm going to go on, take the money and run, as the old song says, but that might not be best for you. So this is another one of those sort of retirement landmines to avoid. Make sure and take your Social Security at the right time for you.

Mike Zaino:
Yeah, and this is another one that kind of just blows my mind a little bit when when the prevailing thought of of a lot of the folks that I meet with or be like, I'm going to get my money as soon as I'm eligible, right? And, you know, because they don't think something's going to last or they don't think the money's going to be there, or they don't think they're going to live as long, you know, in order to justify the delay. And so, you know, when you can start collecting Social Security as early as age 62, um, collecting it too early can significantly reduce your monthly payout. And baby boomers can be very eager to enjoy retirement and think that they should start receiving that Social Security as soon as possible. But waiting at least until you're full retirement age or even later, will actually result in much, much higher, uh, payments. And so one of the things that I always suggest people do, regardless of whether you think you're going to live a long time or not, is just to go get a complete physical. And I'm talking about one that you're not going to enjoy because we want them to, you know, take a gallon of blood and run every blood test known to man. We want to get them to scan your heart, your head, your brain, right, your liver, your kidney, your lungs. Make sure that none of all of those systems are operating as they should.

Mike Zaino:
None of them have anything that's glaringly, um, obvious and needs to be taken care of. And if they do find something that's glaringly obvious and needs to be taken care of, guess what? They found it and they can take care of it. So, you know, all these things matter because if you find out that you have. A clean bill of health and you have a good knowledge of your family history, then if your people live until their late 80s or 90s or beyond, then you're leaving a lot of money on the table if you collect too early. So optimizing when you begin collecting Social Security can make a huge difference in the total lifetime amount that you receive. And the optimal strategy does depend on your specific situation. And for some, that could mean waiting all the way to age 70 before they, you know, start beginning to collect Social Security. And for others, obviously, you can definitely jump on it at age 62. But please, please, please do not enter retirement without a plan for how you're going to draw and when you're going to start drawing your Social Security. And we anticipate some changes coming in the next decade. So it is critically important that you get in contact with me. All right. To learn how to maximize your own social Security benefit based on your unique situation and needs.

Producer:
And go to Money Matters with Mike comm to reach out. That's Money Matters with Mike comm. You can also call 704 5601573704560 1573. Once again is that number. Now here is another one Mike a big landmine that, um, people up on often. Yeah, this one is selling investments. When the market drops, it's like, you know, there's a there's a market drop, you freak out, you're like, I'm getting out before I lose any more money. Um, maybe not the best thing to do.

Mike Zaino:
Yeah. Emotion and investing don't go together, folks. Okay? Fluctuations in the market are an inevitable part of investing. However, some people are going to panic during a downturn, and then they're inevitably going to sell their investments well before the time frame that they had actually planned. And that can be especially bad for retirees because they no longer have the benefit of time on their side. Right? Baby boomers who liquidate their investments when the market takes a hit, what they're doing is essentially locking in their losses, and they're going to miss out on any potential future gains. So a well diversified and well balanced portfolio, as well as a long terme investment strategy, can help ensure a much, much more stable income in retirement. And, you know, we have solutions for those who are you, for those of you who are afraid of, you know, your money being subject to the market volatility, we can take a portion of that and move it over into a fixed indexed annuity, where you're guaranteed to never lose a penny due to market volatility. And what that does is provide peace of mind.

Producer:
Yeah. And you can't put a price on that. That really does take if you take the stress, as we were saying earlier, if you take the stress off the table as much as you possibly can, um, that just means a happier life and healthier life for you as well. Um, also another thing that people do in retirement, something to avoid is paying too much in housing costs. You got to have a roof over your head, but you don't have to pay too much for it.

Mike Zaino:
Yeah, housing is a significant expense no matter what stage in life you are, but it can especially be difficult during retirement, because this is when some baby boomers who own homes might find themselves house rich but cash poor. Okay. And so maintaining a large house with high property taxes, high utility bills, high maintenance costs, um, that can strain an already limited retirement resource. And so maybe downsizing or maybe exploring cost effective housing options can free up those funds for other essential needs. It always kind of blows my mind when when people decide to build their, you know, dream home and and they go nuts. I mean, you can have a dream home that is a dream home and have some of the the nicer finishings and everything you need in it. But if that is also, you know, coming along with a $5,000 a month mortgage, that puts a lot of strain on that financial resource in retirement.

Producer:
I mean, if you win the lottery, uh, go right ahead. And, uh, you know, just build it, pay cash for it, and you're done. Um, but yeah, it's don't go overboard with it. It doesn't have to be 10,000ft² a mansion. It can be, you know, something smaller, maybe a little bit, uh, simpler, but still with a nice finishings and all that is, as you say, it doesn't have to be this, this huge thing. And this kind of goes right hand in hand with that. Mike is having an unrealistic budget. That's another thing people do is just is just don't budget correctly.

Mike Zaino:
Yeah. And you know, the word budget in the in the first place sends people. Like just that they get all. They don't like the word. I don't like it either. I'd rather call it a spending plan. Right. So, you know, for some people that who enter retirement, they have unrealistic expectations about their spending habits. Okay. And failing to create a detailed spending plan that aligns with their fixed income can lead to overspending as well as financial stress. So establishing a realistic budget that accounts for essential as well as discretionary expenses is crucial for maintaining that financial stability in retirement. So, you know, make sure you detail if you're somebody who likes to go out to eat, how many times a week you're going to go out to eat versus eating at home, you know, what is your limit? Are you going to go to, you know, a quick serve place that maybe not fast food, but maybe in between, and maybe you're going to spend 30, $40 for a couple, or are you going to go out and spend, you know, a hundred plus dollars per couple? Are you traveling? Does that mean you're going to a national park and camping, or does that mean you're flying business class on Emirates to New Zealand? Right. Those are going to require different capital amounts. So making sure that your spending plan in retirement is absolutely crucial to its success.

Producer:
Yeah, 100%. And another thing that you've got to do too, you know, you've got to be realistic obviously with your budget, but you also have to plan for those things that you don't see coming. And it's not to say that you have to have, as we say, a crystal ball or something, that you can predict the future. That's why we say plan for the unknowns, because if you don't know what's coming, um, people say, well, how can you plan for that? You've got to just have that contingency built in so that it doesn't, you know, something unexpected happens. It doesn't just upend the whole thing.

Mike Zaino:
I mean, think about it. Does life throw curveballs at us all the time? Right? In retirement, you're going to have unexpected expenses, whether they're medical bills, uh, procedures, uh, emergency car repairs or emergency home repairs. All of those things are going to come. Okay. Taking those into account ahead of time will help you plan for them in your budget or spending plan. And if you don't have room in that, uh, plan for those unexpected expenses, or you don't at least have an emergency fund to cover them, they could have to rely on plastic on credit cards, or taking people that have to take out personal loans just to pay for those unexpected things, those curveballs, which all that's doing is putting you further into debt.

Producer:
Yeah, and that's the thing. You don't want to be caught in a, in a, in a situation where you have to go farther into debt just to, you know, cover an expense that you didn't see coming, plan for those unexpected things ahead of time by having an emergency fund, having the things that you talked about making that plan. And that really kind of goes right into our next landmine to avoid. And that is just not having a plan to begin with.

Mike Zaino:
I hope I don't offend anybody by saying this, but not having a plan is just dumb, okay? Not having a clear plan for how you're going to manage your expenses, how to manage your investments, how to manage unexpected costs that can lead to very poor decision making and financial instability. So please, whether it's me or some other financial professional, seek advice and create a comprehensive retirement plan that can provide guidance that you need in order to navigate the complexities of retirement. Because it's not just waking up every morning going through the motions and going to bed every night. If you don't have a plan, doing even that is much more complicated.

Producer:
Yeah, absolutely. I mean, if it was easy, uh, then, you know, we wouldn't we wouldn't need to have a show because that's that's the thing. It doesn't, um, just happen. You got to you got to make things happen in your in your retirement as well. And so having a plan is making things happen. And then also the last, uh, sort of landmine here for retirement that we'll talk about that that is all too common is that people just wait too long to make an adjustment to their plan. Like, I've got this plan in place and I just want to leave it in place, but you can't just set it and forget it.

Mike Zaino:
Yeah, and I'm glad you put those words into my mouth, because you don't set it and forget it. You should set it and you should inspect it, right? You should at least once a year, minimally once a year. But I prefer once a quarter. Just go over your finances. And a lot of people don't like to because it's not where they want it to be. But that doesn't mean that we can't make slight adjustments along the way to eventually get you where you want to be. And even if you already have a retirement plan in place, it's going to require those adjustments over time. So please periodically reevaluate that plan so that you can account for changes in health, changes in market conditions, changes in those unexpected expenses, those curveballs that that life throws your way. And so we want to help you prepare for a successful retirement. So please contact me this week. All right. For a complimentary retirement and financial consultation.

Producer:
Yeah. And you can do that by giving Mike a call at 70456015737045601573. You can also go to Money Matters with Mike.com. And when people do reach out Mike this is a no obligation consultation. It's absolutely no cost to our listeners at all. What can people expect when they give you a call or go to the website.

Mike Zaino:
We're just going to help analyze your individual financial situation. We'll discover anything that you're paying in fees more so that you should be will help you cut those unnecessary costs, um, out of your retirement accounts, whether those are IRAs, 401 S, Tsp's or any other type of retirement savings account. And we can also help you with Social Security maximization planning, as well as determining the right time for you to take your benefits. And so if you know, I always say this, but if you haven't heard from your advisor lately, just pick up a phone and give me a call and get a second set of eyes on your situation. I can help set you on the path to the retirement that you've always envisioned for you and your family.

Producer:
Yeah, and so give Mike a call. Schedule that no obligation consultation today. It's a $1,500 value provided at no cost to you. So just get in touch with him this week and he'll be able to help you build and navigate that financial plan. It's Money Matters with Mike.com. That's the website if you want to get in touch. That way money matters. With Mike comm. You can also give him a call at (704) 560-1573. That's (704) 560-1573. Now, Mike, another thing that we, uh, people just love to talk about is tax season. And it's here, it's upon us. And, uh, but here's the thing. There are some strategies that you can put in place to make your retirement much more, uh, palatable from a tax standpoint. And you can put those in place. Now, tax day, of course, is coming up on April 15th. That's the deadline. Don't. Wait until that very last minute to get your taxes done though, folks. But in the future, Mike, people can have maybe a little bit more slightly enjoyable tax season.

Mike Zaino:
Yeah, yeah. We don't want to want want want coming around. You know when when when tax time I know it's the single worst day of of my year each and every single year when I have to basically just set the money that I've worked for on fire, in my opinion. And I get it. It pays for the roads and it pays for the schools. Well, then fix the dadgum roads, will you, please? And let's get some, you know, higher pay for teachers so that they can, you know, do better and educate our kids so that they can become more and more and more less dependent, I should say, on the government. But when you talk about the types of tax free investments that are available to Americans, you know, we can help you with both of those. When you pick up a phone and give us a call for your complimentary consultation, or whether that's in person or whether that's online, on, on a virtual one on one. And of course, we're talking about Roth IRAs and the life insurance. And a lot of people may say, well, what about municipal bonds? Well, they're not necessarily tax free. And they're also some types subjected to both federal, state and local taxes and can impact your Medicare costs, especially if you are a high income earner. So if you are concerned about rising taxes, pick up a phone 704 5601573 or go to Money Matters with Mike.com and get in contact with me so that I can help you build a smart tax plan for you and your family during retirement. The cost of taxes is going to significantly affect your retirement. If you don't have a plan, and having a proper estate plan in place is another thing that you can do. If you are interested in minimizing your total tax burden in retirement.

Producer:
It's this week in history. Well, some significant things happened this week in our history, and one of those is a birthday, February 24th. Uh, this date 1955. American entrepreneur, industrial designer Steve Jobs was born. I don't know of anyone, really, who has had such a significant impact on just our everyday lives and the gadgets that we use and the way that we use them. Uh, then Steve Jobs, I just feel like, you know, that cannot be overstated because smartphones, tablets, computers in the way that we use them, he's kind of responsible in a big way for it all.

Mike Zaino:
You know, he is. And I have resisted Apple. I don't speak Apple. I am an Android user, a PC user. But you know, when we're talking about Steve Jobs being the co-founder, the chairman, the CEO of Apple, um, he's recognized as that pioneer in the personal computer revolution of the 70s and 80s. And I didn't even know this. But he also served as a board member of The Walt Disney Company until the time of his death on October 5th of 2011. So, you know, the impact that that one guy made on how Americans, you know, just live every single day of their lives is is astounding.

Producer:
Yeah. Never think that one person can't make a difference because you absolutely can. Um, on February 25th, 1984, Van Halen's hit single jump started a five week run at number one on the US singles chart. You big Van Halen fan there, Mike.

Mike Zaino:
Uh, you know what? I enjoy certain songs with Van Halen. I was never a huge Van Halen fan, but jump was, you know, was always one of them. Um, that became the band's most successful single, and it went to number one on the US Billboard Top 100 music chart. And then in 2021, rolling Stone magazine ranked them the single or ranked that single as the number 177th on their updated list of the 500 Greatest Songs of All Time, and that was February 25th, and I also have to give a shout out on February 20th 5th to 1979, my brother Mark was born. So happy birthday Mark.

Producer:
Happy birthday to Mark. Definitely. So. And uh, also one other, uh, birthday to talk about for this week in our history is 1932, uh, February 26th. Singer songwriter and the Man in Black, Johnny Cash was born.

Mike Zaino:
Yes, he was.

Producer:
One of a kind.

Mike Zaino:
I am definitely a Johnny Cash fan. All right. Cash is one of the best selling music artists of all time. He sold over 90 million records worldwide, and his music spanned across country, rock and roll as well as blues, all of those genres. Okay, he was nicknamed as you just stated, the Man in Black. He passed away in September of 2003. Rest in peace, Johnny Cash.

Producer:
Absolutely. And he was making music just about up until the end as. Well. Making great music as well. Well all right Mike. Well that is going to just about do it for this time around. But I thank you once again, sir, for all that you bring to the table each and every week. And we'll do it once again next time.

Mike Zaino:
Matt, thank you for bringing everything that you bring to the show. But most importantly, thank you to each one of our listeners, whether you're listening to us here in the Charlotte Metropolitan Statistical Area on WRNI or whether you're listening anywhere across the globe on our podcast, thank you so much. Without you, we do not have a show. And so whatever you are doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with Mike.com or pick up the phone and call 704 560 1573. That's 704 5601573 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.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short terme investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Thinking of relocating during retirement? Some places are much more affordable and livable than others. I'm Matt McClure with the Retirement Radio Network, powered by AmeriLife. Moving to a new city or state in your retirement years can happen for many different reasons.

Andy Markowitz:
The sort of cliche was that it's a very true. One was that people moved to be close to their family in retirement. That's still a major reason.

Producer:
Andy Markowitz with AARP says money is increasingly becoming a big consideration. He recently told Newsnation, more and.

Andy Markowitz:
More surveys are showing that people who are nearing retirement want to find a cheaper place to live, maybe move from an expensive urban or suburban market to somewhere a little more rural, to states with lower taxes, to states that have tax breaks for retirees? So you want to look into things like that.

Producer:
Safety can also be an important factor to consider. So if you marry safety and affordability, where do you wind up? Well, Yahoo finance looked at the numbers and the crime stats and found that Bellevue, Nebraska is the safest place you can retire and spend less than 2000 bucks a month rent for a one bedroom apartment. There is less than $900 a month on average. Total expenses less than 1700. Ohio and Texas also feature prominently on the list, specifically Klute and College Station in the Lone Star State. If you'd rather be a Buckeye, look at North Royalton, Willoughby Hills or Parma Heights. Farmington, Michigan rounds out the top seven safest places to retire on less than $2,000 each month. So where do you want to hang your hat in your golden years? It's a key question to consider as we try to stretch our dollars as far as they'll go with the Retirement Radio network powered by AmeriLife. I'm Matt McClure.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then 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 9 a.m., right here on FM 100.1 and Am 1340. Schedule a free, no obligation consultation now at Money Matters with Mike.com.

Producer:
Remember, all of Mike's listeners receive a free financial consultation just for listening to the show. Visit Money Matters with Mike.com to learn more and schedule an appointment. Thanks for listening to Money Matters with Mike and subscribing wherever you listen to podcasts.

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