Don’t Bury Your Head in the Sand

10.18.24: Audio automatically transcribed by Sonix

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

Speaker1:
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.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. Get set for a full hour of financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here's Mike Zeno.

Speaker3:
What's up people? Welcome to the show. I'm Mike Zeno, coming to you from Fort Mill, South Carolina. Happy Saturday. We have got a ton of great information for you today. And we are going to talk about huge retirement mistakes, as well as how to get the help you need in order to avoid common landmines in retirement. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you today, sir?

Speaker1:
I am doing great. Mike. I hope you have had a nice busy week, but busy in a good way.

Speaker3:
Yes, it has been busy. It has been busy in a good way. We are helping many clients fulfill the retirement of their dreams by having a plan that they have confidence in, and that confidence gives them peace of mind. Matt. Yeah, that.

Speaker1:
Peace of mind goes a long way toward, you know, just really making the whole process of planning for retirement so much easier. And, folks, you are the biggest part of the show. We say this kind of all the time here. You are the most appreciated part of the show as well, because without you, I am listening to the show, whether it's online, doing the, you know, on the podcast, whether it's on the air on WRC. However you get the show. We are so thankful that you are getting the show. You can also go to Money Matters with mike.com. That's Money Matters with mike.com. To see all the past episodes there, subscribe to the podcast. You can get the links to the different podcast channels there as well. You can also call Mike for a free. Yes, that's right, I said free, meaning no cost, no obligation consultation. That number is (704) 560-1573. (704) 560-1573. That rings that phone that's right there in his pocket. And he will pick it up. That's the that's the great thing about calling Mike Zeno. You know, the guy is going to pick up the phone when you give him a call.

Speaker3:
No doubt the one thing I cannot stand doing is leaving a message that goes ignored. I don't mind leaving a message that's returned within 24 to 48 hours. Right. But the ones that I go weeks with and have to leave second and third messages before I get anything that just chaps my rear end. So my commitment is that will never happen to you. Pick up a phone. Give me a call. Test me.

Speaker1:
That's right. Absolutely. Put it to the test. The number once again. (704) 560-1573. We're also on the socials. We're on YouTube. We're just pretty much anywhere that you want to find us. All right, well, let's kind of dive right in. Mike, as you said, we got a lot of great stuff to get to. We're going to talk about those retirement mistakes that people are making and how to avoid them coming up here in just a bit. First, though, we're going to get some inspiration for our conversations this time around, and we're going to do that with our financial wisdom. Quote of the week.

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

Speaker1:
And this week's quote comes from Wayne Gerard Trotman, who said this one time, burying your head in the sand does not make you invisible. It only leads to suffocation. I mean, that's a that's one way to put it. You know, it's like you can't just bury your head in the sand and think everything's going to be okay just because you are shielding yourself from the, you know, knowledge of the outside world and all that's going on. No, you've got to be aware that that's not a good thing, that you actually need to be aware of what's going on in the outside world, because you've got to be able to live in the world.

Speaker3:
Yeah, the fact of the matter is it's still going on, right? So if you just bury your head, I think this quote highlights the supremely dangerous mindset of ignoring retirement planning, hoping that everything will somehow work out. And while it might feel easier in the short term to avoid thinking about those complex financial planning or potential issues like market risks, health care costs, how long your savings will last, and everything that goes along with planning. Ignoring them doesn't make the problems go away, okay? Instead, it only creates bigger problems down the road that can feel overwhelming or downright suffocating when you are no longer working and need your savings to last.

Speaker2:
Hungry for something to chew on? Here's some meat on the bone.

Speaker3:
And while the quote emphasizes the dangers of ignoring retirement planning, especially in this context, the good news is that even if you have been avoiding it, there are still solutions to help get you back on track, right? No matter your situation, there is light at the end of the tunnel, and one powerful tool to help along the way is something I mentioned on last week's show. So if you have not listened to that one, please go back. Do yourself a favor and listen to that light. Night. One of those tools is called a fixed index annuity, or FIA right. Fia can provide guaranteed lifetime income, they can help offset inflation, and they can even offer protection against certain long term care expenses. Matt.

Speaker1:
Yeah, I mean, it really is a great tool to have in your tool belt. So we also kind of mentioned that last week using this sort of, you know, tool, uh, sort of analogy there. But, you know, I mean, it really is a great thing that can solve a lot of common problems like you just laid out. But I think, Mike, a lot of people hear that word annuity and they kind of get scared or turned off just because they've heard people badmouthed them before. But it's these are not those old style annuities that people might have heard about. Yeah, a.

Speaker3:
Lot of people that either don't offer them, um, or don't know a lot about them or are not licensed to sell them. Right. Um, all they have in their arsenal is to talk poorly about them. But I really think it comes down to education, because if we take away what it is called and just concentrate on what it does, a fixed indexed annuity is like the Swiss Army knife of retirement tools. Okay. So even if you are in your 40s or your 50s and you realize that you know what? I haven't saved enough for retirement and that fear of having missed out on decades of compound interest. Yeah, that can feel overwhelming. But there is still hope. Okay. So the first thing to to to realize is that it's important to start saving immediately. But you should also save smart. Okay. Along with increasing your contributions to retirement accounts, fixed indexed annuities can be an excellent option for those who have started late. Okay. The biggest reason is that they can offer guaranteed lifetime income, meaning that once you retire, you're going to have a steady stream of income no matter how long you live. Unlike stocks, F.i.r protect your principal from market downturns so you won't lose any sleep over a market crash. Wiping out your nest egg that cannot happen inside of a fire. Okay. You can even catch up by securing that guaranteed lifetime that supplements your Social Security or your 401 K, which all that does is give you more security in retirement. Matt.

Speaker1:
Yeah. And that's the thing is, you want that security in your retirement, you know, during that time of your life where you're not going to be having those, you know, regular paychecks coming from your employer. You're not going into the office every day. You want to have those guarantees in your life. You want to have that security, because you want to know that you've got that income stream that you're never going to be able to outlive. No matter what happens outside of that, you know that that is always going to be there and talk about, boy, even just just thinking about it, just saying it out loud, I'm like, ah, that's got to feel so good for people who have taken advantage of that, um, in their retirement plan and in their retirement years.

Speaker3:
Yeah. Again, man, it's all about, you know, the educational component. A lot of people just don't know what they don't know. And that can be their biggest downfall because they don't seek the information. Right. Another problem that I see is folks who ignore inflation, because some people may feel comfortable that they got 100,000, 200,000, 500,000, whatever it is in their savings. Okay. Not realizing that the inflation effect is going to erode the purchasing power of their money over time and whatever that dollar amount is six figure dollar amount, that is not going to go as far in 20 years, okay as it does today. And so the solution is that while traditional savings accounts might not keep up with inflation, fixed indexed annuities can help offset that issue. Why? Well, they are tied to the performance of a stock market index, right? Whether it's the S&P 500 or the Nasdaq or any of the Morgan Stanley, Barclays or any of the other major banks have their own proprietary indices. All right. But they also protect you from losses in down years, which means you never lose a single penny of your hard earned money due to downturns in the market. And over time, the potential for those market based gains means that your annuity can grow faster than inflation, and that helps you preserve your purchasing power. And I've made this illustration before. But if you lose 20% right, think if you have $100 and you lose 20%, that brings it down to 80 bucks, okay. If you gain 20% back, you don't have $100. You actually have to gain 25% of the 80, which would be $20 to get you back up. So whenever you lose money in retirement, it takes a lot more just to get back to where you were. And since fixed indexed annuities offer guaranteed lifetime income that can also be indexed to inflation, you'll know that no matter how much prices prices rise, you're going to have a stable income to cover those essential needs.

Speaker1:
Yeah. And you know, this has really come into focus, of course, over these past few years when, you know, since Covid, all of the prices initially went up for everything but things like lumber and all of those types of things initially, because, you know, I mean, just I don't want to cut you.

Speaker3:
Off, man. I don't I'm going to cut you off. You just mentioned lumber. I remember when I was in the middle of a remodel how people were posting, you know, for sale, and they had a handful of toothpicks and they were like, making them, like, $10,000, you know, like, don't, don't, don't lowball me. I know what I have, right. When the price of, when a piece of plywood was like $60 for one sheet. It was nuts. It was insane.

Speaker1:
We were trying to do some some remodeling at that point as well. We're like, yeah, we'll we'll just put this off because it's just wasn't cost effective. And that's the thing. Like everybody like it was supply and demand. Right. Because everybody was wanting to do. Everybody was at home, right. They were wanting to do all these home projects and all that. Well, the supply chain was just at a complete and utter standstill at that time, too, also because of Covid. So it's like it was just a perfect storm. But I mean, it really is It's dumb to have some sort of guarantee, some sort of, you know, protection against inflation, no matter when it rears its ugly head and no matter by how much. Boy, that's that is a lot of peace of mind and a lot of, a lot more assurances that you're going to be set up for success when it comes to your retirement years, you know?

Speaker3:
Yeah. Matt. And you mentioned, you know, Covid, which is a healthcare issue. So many retirees, you know, underestimate healthcare costs. And many people assume, wrongly, that Medicare is going to cover all of their health care needs in retirement, or they simply don't think about long term care until unfortunately, it's too late. So healthcare, and especially long term care can drain eviscerate your savings accounts rather quickly. I've seen it happen. Right. Fixed indexed annuities. They can offer long term care benefits as part of the plan, and they're not standalone long term care benefits, but some have riders that provide additional payouts. If you need any type of long term care. And what that means is it's going to help you cover those expenses without depleting your retirement savings. And that means you won't have to worry as much about paying for in-home health care, assisted living, or a nursing home if that care need should arise. And so, by adding a fixed indexed annuity to your plan, you can secure extra protection for those what if health care scenarios and avoid being financially suffocated by those unexpected medical bills.

Speaker1:
Yeah, it's such a huge, huge part of your, you know, retirement expenses. And as you say, a lot of people really do underestimate it. So it's great to have a plan. And this Particular investment vehicle right. Can can be part of that plan can really be a solution to that big problem. And again it's a fixed indexed annuity. And FIA if you have questions about these folks give Mike Zeno a call. He'll be glad to answer them for you. 704 56015737045601573. You can also go online to the website Money Matters with Mike comm on the website. By the way, you can schedule a consultation there directly, or you can just reach out to Mike Zeno and, you know, present a question if you have questions about anything that we are talking about on this episode of the show or any episodes of the show as well. And, you know, Mike, you brought up, of course, one of the big benefits of this particular type of, you know, investment vehicle here, an FIA, a fixed indexed annuity as being a source of guaranteed income that you can never outlive. Right. So a lot of people just rely on one source of income in retirement. And that is a big problem.

Speaker3:
It is a huge problem. I'll tell you, none of my clients rely on one source of income. The more sources that you can have, whether those be from Social Security or 401 s or dividends, or real estate income or fixed indexed annuities, right, the better off you're going to be. And many people do make the mistake, unfortunately, more so in the South and south West that their Social Security will be enough to cover their retirement without considering that the diversification that is necessary or the impact of market crashes, right, or the impact of inflation and relying too heavily on one income stream is extremely risky in retirement. So diversifying the income streams is crucial, and those fixed indexed annuities are an ideal addition to a retirement portfolio because whereas your 401 K or your 403 B, or your Thrift Savings Plan or your IRA, they may all be exposed to market fluctuations. Fia protect your principal while still allowing for growth based on market index performance. That means that you avoid market losses while still having the potential to grow your money. And by including an FIA in your strategy, you are creating another guaranteed income stream for life, no matter what happens to the market, because you've just taken your money that you've saved and you've created your own personal pension. And what does that do? Well, quite frankly, it gives you peace of mind knowing that you have a stable foundation to rely on, even if other income sources fluctuate.

Speaker1:
Yeah. Which they, you know, are bound to do, especially if you are, you know, just drawing down on your, your 401 K or if you've got, you know, some of those other type plans that you were talking about, those types of income streams are, you know, bound to fluctuate, uh, now and then, of course, there's some uncertainty around Social Security. A lot of uncertainty around Social Security and what benefits are going to look like going forward. So no matter what happens, this guaranteed income stream through an FIA is so, um, crucial to really have as part of your overall plan because then you can you don't have to rely on these other things solely, you know, you've got that guarantee that you will have that particular income in your retirement years.

Speaker3:
Yeah, Matt, I think the takeaway here is quite simple. Even if you feel like you have buried your head in the sand with your retirement planning, there is still plenty of time to lift it up. Okay, and take some action. Fixed indexed annuities offer solutions to many of the problems that people face while preparing for retirement. But I'm starting late. Well, guess what? If I A's offer guaranteed lifetime income? I'm worried about inflation. Well, if I have the growth potential that's tied to the market without the risk of losing any of your principles. Man, what if I do need some of those long term care or health care costs, right? If I can include long term care riders to help protect your savings, and then if you are too reliant on one source of income, like Social Security or or even two sources of income, Social Security and a 401 K, the FIA's provide diversification that helps give you the stability. So by adding an FIA to your retirement plan, you are building a more secure future for yourself, one that's protected against market risks, one that's protected against inflation as well as health care costs. So if you don't wait and face your retirement planning head on, you're going to breathe easy knowing that you've taken the steps to, you know, protect your financial future. Yeah.

Speaker1:
And to start down that road of protecting your financial future, setting yourself up for success in your retirement, I want you to go. I would encourage you to go to the website Money Matters with mike.com. Money matters with mike.com once again is the website. You can set a consultation up there. It's free of any cost or any obligation. You can also give Mike Zeno a call 7045601573704560. 1573 and again, he's the type of guy he will answer the phone. You will not have to hear a message that says, you know, listen closely because our options may have changed. You won't have to, you know, press zero to speak to the operator or one to speak English like any of those things you don't have to worry about. You call Mike Zeno, you get Mike Zeno, and you get the same guy that you hear here on the radio and podcast each and every week as well. Um, so, Mike, you know, we've covered a lot of territory here so far about, you know, how fixed indexed annuities really can be a great solution to a lot of common problems that people face in their retirement planning. And we actually ran across an article as well, um, on MSN about the ten mistakes that the this article says too many pre-retirees and retirees are making. Um, and boy, one of those. This one I feel like is is so easy to do, especially in today's sort of environment of, oh, I've got, you know, four credit cards and they're all maxed out, and, you know, all this. I've got personal loans and the big mortgage and the three car payments or whatever you've got, you know, carrying debt into retirement, that can be a big problem.

Speaker3:
It can write. Americans as a society. Like instant gratification, right? And they gotta have it now. And I'll challenge you and say that if you can't pay your credit card statement off by the end of the month, guess what? You can't really afford what it is that you are buying. Okay. One of the biggest issues that you may be carrying with you into retirement is your debt load. Remember, once you retire, your income is limited, but your debts do not disappear once those paychecks stop. And if you can, make sure to pay off as much of that high interest revolving debt like credit cards, HELOC, which is a home equity line of credit, car payments, all those revolving debts, right? Pay those off before you retire. And, Matt, the happiest retirees that we work with have also paid off their mortgage. All right. And they own their home outright.

Speaker1:
Yeah. That's right. That takes another, you know, your largest payment off the books each and every month and takes that debt off the table as well. And that kind of goes to, you know, my skipping a budget in retirement. Another big mistake that people make. You can't, you know, maybe you've you've budgeted your whole life and you think in retirement I'm going to sit back and take it easy and not worry about the dollars and cents too much. But, you know, it's just as important in those retirement years.

Speaker3:
Yeah, there is no doubt. And people hate the word budget to begin with. It's a four letter word, even though it's actually six letters. Right. They treat it as a four letter word. So I like to rephrase it and talk about a spending plan. Right. So do not go into retirement without an idea of what you expect to actually need on a regular basis. In order to continue paying your bills, you're going to want to include everyday items like your home, your utilities, as well as food and special purchases like, you know, trips. If you want to make travel a priority and try to create this spending plan well before you notify your employer that you are retiring, not after. Okay, there is a huge difference between eligibility for retirement and affordability for retirement, and you don't want to be surprised by how much you plan to spend compared with how much money you have saved and will generate as far as income in retirement. Matt.

Speaker1:
Yeah, that that is absolutely right. You want to not have, um, you know, surprises in your retirement. That's not the time of your life to be surprised. You know, sometimes I'll like it's my birthday and there's a surprise party. That's great. Oh, friends I haven't seen in a long time, and they've they've brought me presents. That's that's a good kind of surprise. Those kind of surprises in retirement. Not the greatest ones. And also not a good thing to do. Um, which sort of will lead us, I think, to the the end of the show here because just a couple more minutes left, but, um, not having a financial plan, I feel like that is because a budget is part of that. Right. And we just talked about skipping the budget and retirement and how big of a plan that is, you know, having your debt that is, you know, can be part of a financial plan. Getting that, of course, paid off and taken care of before retirement. But overall, you just need to have a plan. If you if you have not gotten a plan in place, it's so, so important. Right.

Speaker3:
And many people we talked about this last week, many people have components of a plan. They have, you know, a 401 K, or they have some CDs or they have a couple mutual funds, but that doesn't constitute a financial plan. It's not just about those things. It's how all of those things come together and give you peace of mind, taking into account your overall investment portfolio to get a good idea of everything that you have going forward. It should obviously include all of your retirement funds and your real estate, as well as your necessary expenditures each and every single month. And then make sure that you also consider Social Security and Medicare depending on when you expect to start collecting them.

Speaker1:
And Mike, another big problem. You know, we talked about budgeting there, not having a financial plan. Those things are essential. And they're essential to make sure that you don't spend too much money too early. That's our next problem here. Spending too much too soon, right?

Speaker3:
Yeah, absolutely. Retirement can be a very exciting time, and you might be ready to start spending some of those savings and monies that you've worked your entire life for so that you can enjoy those golden years. Maybe you are going to buy that new car that you've always wanted, or go on an exotic vacation to a place that you have dreamed of visiting all of your life. But it can be possible to have too much of a good thing, and you got to be careful not to go overboard with your spending, especially if it is subjected to market volatility. Because if you're spending money while the market is declining, you are. Money is never going to last you as long as you had originally intended, right? And so you might be in for an unpleasant surprise once your money runs out. This is why an income plan absolutely matters. It makes life a lot easier and predictable.

Speaker1:
Yeah, that's absolutely right. And predictability is is great. Getting to those guarantees again is super important for your retirement years. Another thing that you don't want to do, one of those big mistakes that we'll talk about here, but just before we wrap up, is quitting your job too early? People are like, I'm just going to I'm just going to go as soon as I can go. But that might not be the best thing for you, right?

Speaker3:
Yeah. I mean, retiring too early, um, is never a good idea. You got to have a plan for how you're going to spend your time, number one. And you got to have a plan to know that you can afford to actually retire. Retiring on short notice is also not really a good plan. So you might want to sit down with your HR department. Well, before you turn in that resignation letter or retirement paperwork. Things to think about. You might have outstanding company stock that you could lose if you retire early, right? So ask your benefits manager about other issues like health benefits. Can you keep them in retirement? Seniority benefits that require you to work for a certain amount of time before you can take advantage of them? There is so much to think about when it comes to retiring early. It is best to seek professional guidance. Matt.

Speaker1:
Seek that professional guidance and I suggest that you seek it from Mr. Mike Zeno. You can go online to Money Matters with mike.com. Money Matters with mike.com is the website or you can call him (704) 560-1573. 704560 1573. That initial consultation is free of any cost and free of any obligation as well. Well, Mike, that's going to do it for our time together this week. But I look forward to doing it again next time, sir. So thank you once again, of course, for everything that you bring to the table each and every week. And we'll do it again next time.

Speaker3:
Matt, appreciate you and everything you bring to the table. But most importantly, I appreciate you, the listeners, whether you're listening to us on the radio or anywhere across the globe on podcast, without you folks, we don't have a show. So if you learned anything today, please share it with those that you care for and hopefully they can get something out of our message as well. Whatever you're doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704560 1573. That's (704) 560-1573. Not affiliated with the United States government. Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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