12.17.22: Audio automatically transcribed by Sonix

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

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

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

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information. And we give you plenty of that, plenty of meat on the bone each and every week in order for you to chew on and digest. And today is absolutely bringing the heat again. This year's markets have been extremely dismal. So on today's show, we're going to talk about how to take control of your retirement savings. As always, I have the distinct honor and privilege of being joined by the one, the only Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. How are you? I hope you've had a great week.

Mike Zaino:
I have had an amazing week. This has been an extremely busy week. You know, it's the end of the year. A lot of people are trying to, you know, just put a lid on their planning for 20, 23, doing a lot of end-of-year retirement reviews. People want to see where they are if they're on the right track to reaching their goals. So, yes, I have been busier than a one armed wallpaper this hanger this week.

Producer:
And running around like a chicken with your head cut off and whatever other metaphor you want to use. That's been Mike Zaino. It sounds like this this time of the year, too.

Mike Zaino:
Much running around. It's been a lot of sitting in my office desk and just doing a lot of reviews with folks both in person and virtually so, you know, I have clients that would prefer to meet from the comfort of their home. That's one of the services that we offer, especially with technology. I was an extremely early adopter of Zoom. I've been running Zoom virtual one-on-one appointments since 2018, a full two years before the pandemic hit, and forced the world to go digital If they wanted to hang out with family that was away because we sure couldn't visit them when we were on lockdown. Right?

Producer:
Right, exactly. That's you know, technology is amazing. Now. Everybody knows what Zoom is. But you were ahead of the curve on that one. It didn't even take a pandemic for you to do it.

Mike Zaino:
It didn't. I tried to. I always try to think of different ways to hate the I hate the term thinking outside of the box, but that's really what it is, right? It's being able to come up with ways to meet people where they're the most comfortable. Some people feel intimidated by coming into an office setting and sitting down. Some people would rather meet in their homes and some people would rather me not come to their homes and they don't want to come to my office. They just want to sit on their on their couch or at their desk at home in front of a computer. So whatever way our listeners want to meet with me, I make myself completely available to meet them on their level.

Producer:
Convenience is key there, and it's also key for listening to the show because we're not only here on the air, on radio, we're also online as a podcast as well. You can go to MoneyMattersWithMike.com, see all the past episodes there. We've got video highlights, the whole deal also that you can link to via our YouTube page and everything all right there via MoneyMattersWithMike.com. You can also go anywhere you subscribe to podcasts right? Like Apple Podcasts, Spotify, all the big ones, anyone that you can name. We're on it, I'm sure. And just subscribe there. Leave us a rating. Reach out to us because we absolutely love hearing from our listeners. And we.

Mike Zaino:
Do. We do. And one of the things that you connect with on social as well, if you're on Facebook, you know, connect with us there. If you're on YouTube, you can connect with us there. If you've missed past shows, the podcast and the YouTube channels are excellent ways to kind of catch up on that financial knowledge that you might have missed.

Producer:
Yeah, we cover a lot of great stuff here each and every week and stuff that, you know, you might not have thought of, you might not have even known existed. You're going to learn something when you listen to Money Matters With Mike. That is a promise. And that's really the goal of the show, right, is to educate people, to arm them with that knowledge, to be able to retire successfully, comfortably, in the manner that they want to retire. Right.

Mike Zaino:
It is retirement should be simple, right? It's not easy. It takes a lot of planning and proper prior planning to prevent pitifully poor performance. I'm a big fan of alliteration, in case you can't tell. Right. Those are the seven P's. I learned those back when I served in the military. But you know, if you actually take time to plan for your retirement, you're going to be well ahead of the people who don't take time. In fact, most people will spend more time planning for a one week vacation than they do for the rest of their lives. And that makes absolutely no sense to me. And another misnomer is that, you know, well, seeking the help of a financial professional is only for wealthy people. That couldn't be farther from the truth. I mean, in fact, you know, there are people that have, you know, maybe 100 grand and I can help them and show them different strategies so that by the time they retire, that 100 grand is much more.

Producer:
Yeah, exactly. And there is the goal. Absolutely. And we're going to talk about a lot of those things today as we continue on here with the show and get kind of into the the meat of the show or the meat on the bone, I guess, as we like to say around here. We've got a lot of great stuff coming up. We're going to talk about 401 K rollovers, something called an in-service distribution as well. Tell our listeners about that because as you alluded to at the top of the show, people have been really disappointed and a lot of their investments this year. And we're going to talk about that in our Problem Solvers segment as well and how we were able to help one particular couple really kind of make their situation a lot better. We also have seven questions we can help you answer for retirement. We're going to go through that. We've got some signs you could be ready to retire. And how to save money and headaches this holiday season. So a lot coming up as we go through the show today, getting closer and closer to the Christmas holiday.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
And this week's words of financial wisdom actually come from an athlete of all places. But you know what? Athletes have to work hard and prepare for for things just like people who are planning their finances do as well. And this athlete in particular, Jackie Joyner-Kersee, and she might be a name that you haven't heard in a while. I know that I remember her from back in the 96 Olympics here because I'm I'm down here in Atlanta and I remember her name as being one of the big, big names in that particular Olympic Games. But she won gold in like a bunch of different not only Olympics, but I think pretty much every competition she was ever in. So that's that's how big she has been. All right. So our quote of the week from Jackie Joyner-Kersee is this It's better to look ahead and prepare than to look back and regret. So true.

Mike Zaino:
Hmm. That is true. You know, when you're talking about athletics, you definitely want to look ahead, especially if you're in a race which which she was right. She doesn't want to look back at the race that she lost. She wants to prepare and look forward to the races that she was going to win and did win. That really reminds me of another quote by Zig Ziglar. So you're going to get a two for one quote of the week this year or this week, I should say. And that was by Zig Ziglar again. And when we're talking about specifically about personal finance and success, Zig said, prepare for the worst, but expect the best. So I think that kind of goes hand in hand with Jackie Joyner-Kersee quote right there, because, you know, when we're talking about preparing for financial success, there's a reason that you prepare for the worst, but expect the best because if you do, you're ready to capitalize on whatever comes. And most likely that's going to be somewhere in between the best and the worst case scenarios. Right?

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

Mike Zaino:
So, you know our Meat on the Bone segment this week, utilizing both of those quotes is just about preparing for the worst, but expecting the best. So by now, at this point in time of the year, we're talking it's December 17th. You know, I would expect most of our listeners to be well into their planning financially for 2023. But have you taken those particular factors into account? We tend to look ahead, right? We tend to make optimistic predictions for the future. And we also set lofty goals and then we generally will base our budgets on those. That's that's normal. And it's also good because if your goals don't scare you and if you don't have a lofty target to aim for, you'll certainly never grow your nest egg as quickly as you could. But critically, as important in the planning cycle is to look at what could possibly go wrong in some way by kind of envisioning visualizing different scenarios. The markets are negative again. What happens then? You get sick. What happens then? God forbid, you get laid off, right? You no longer have an income, anything. What happens then? And then have a plan B, a set of contingency plans that are reactions that are already pre-defined just in case those arise. We plan for those contingencies to ensure that we have the agility and the flexibility to capitalize on whatever happens, no matter what happens. Make sense.

Producer:
Yeah, totally. You've got to be prepared for whatever scenario might come your way. And that means, you know, that doesn't mean that you necessarily have to have a crystal ball. My crystal ball is in the shop. It's not working. But you know, you don't have to have one to, you know, sort of know exactly what's coming. Just make sure that you're prepared for as many scenarios as possible.

Mike Zaino:
Yeah, that's true, Matt. And this week's show, especially this week's show is for all of you out there in listener land who've been disappointed with the performance of your retirement account. Ounce this year. All right. We know it's been difficult to look at those statements. All right. And see the numbers just declining and declining each and every single quarter, even though you've continued to work hard and sometimes harder and save consistently, like we look at the S&P 500, it's down 17% in 2022. So far, there's still a few more trading days left in the year. Right. The Dow Jones US market index, that's down 18%. The Nasdaq is down 29% so far this year. And the Russell 2000 even is down 19%. So we're going to talk about different ways to kind of look at where you are right now and and to take control of those retirement accounts to prepare you for a better future down the road.

Producer:
Yeah, And that's it's a great thing to look at right now because of all of that volatility that we've seen and all that downward momentum. Unfortunately, overall, when you look at the last almost 12 months now, you just went through those numbers and that that is pretty, pretty staggering and not not very not very helpful to the old 401. K.

Mike Zaino:
Nobody's going to nobody's going to be willing to talk about how much money they lost at Christmas parties this year. Right. I mean, it's not something that's fun. And especially especially if you are in that retirement red zone, you're about to retire in the next five years or you've just retired within the previous five years. Nobody wants to brag about losing money because that has an extreme detrimental potential of affecting the the longevity. How long your nest egg will last you? Yeah, it's just something that, you know, people have to get under control.

Producer:
Yeah, 100%. And you know, I mentioned the 400 1ka second ago there and I think a lot of people have probably I know I checked my 41k not that long ago and I'm oh boy that I think I got a few more gray hairs or an ulcer or something because it just was not a pretty picture when I when I logged in and it's not like I check it all that often because I know during times like this that that's going to be the case. So at least I was partially prepared. But a lot of people really have have been disappointed in their 401 K performance this year and, you know, rightfully so with losses like that, if they haven't been, you know, reallocating some of the investments in there or if no, no one has been going in and doing that. Right. So talk about that and talk about sort of this myth that's out there that that that money that's in your 401. K is completely untouchable by anybody.

Mike Zaino:
Right. So we want to help dispel that myth that you can't touch the money that you've saved inside of your 401. K or other employer sponsored type plan. Those of you who are in that position can absolutely consider what's called an service distribution from your traditional 401 K or other employer sponsored plans. In other words, do a rollover. You guys have heard of those before, right? And I can just envision all of our listeners nodding their heads up and down. It is always our goal to help people take control of their assets in order that they are able to save more of that hard earned money and maximize their returns. So with a with an age based in service withdrawal, most people can remain with their company. So you're not quitting your job, right? You're staying with your company. You're able to stay in the plan and continue contributing. You're able to take advantage of the match if your employer offers one and you're still able to take a portion of your savings and transfer it, roll it out over into another plan. Nothing changes other than that you are deciding on a portion that come hell or high water you are not willing to lose and whatever that amount is for you, that is the amount that you transfer out and roll over into another plan.

Mike Zaino:
Especially again, if you are in or you are nearing that retirement red zone, which again is defined as the five years either immediately before or the five years immediately after retirement, you should absolutely consider transferring a significant portion, rather of the dollars that you want to protect out of the 401 K or the 403 B or the 457 or the Thrift Savings plan. If you're a federal employee while you're still working and protect that portion of your nest egg from market loss, nothing will change. If this is the amount that you have, you'll just take that amount. This amount here, we'll roll it out, we'll put it on the shelf. It'll grow in a protected state. And then you just continue business as usual with the money that you have remaining inside your employer sponsored plan. You just have to decide how much of that you're willing to keep at risk inside of the markets. And we have ways to help you do that with no. Tax implication whatsoever, meaning you don't have to pay taxes on the money as long as you roll it over with zero fees. And the solution can provide you with an additional income stream that's guaranteed for the rest of your life. You can't outlive it. How does that sound, Matt?

Producer:
That sounds good to me. I know it sounds good to a lot of folks out there as well. With those types of issues with their 401. K. This year is a lot of people have as we said there and you know there is that that myth and I'm glad you're taking the time here to dispel it that you know no matter who you are, no matter what age you are, if you have one of those employer sponsored plans, like a 401. K, if you touch that money, you're going to have to pay that 10% penalty. You won't have to do that under these particular circumstances.

Mike Zaino:
Right. So so sorry to interrupt you there, buddy, But the the easiest way is to contact your plan administrator and just ask if in in service withdrawals are allowed. And if they are, then guess what? You can take and protect that money by transferring it out. So hopefully those folks will get in contact with me for for guidance and clarity on exactly how to take those steps one right after the other, just to make sure that their hard earned money is being protected and working hard for them instead of being victim to the whims of the market.

Producer:
Yeah, that's right. And you can go to MoneyMattersWithMike.com to reach out. MoneyMattersWithMike.com can schedule a free consultation there or by calling Mike Zaino at 704 560 1573.

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

Producer:
And so in this segment of the show, of course, it's you know, it's it's a creative name. We it's a problem solver segment. So we like to solve problems. And so I am going to present a problem. And this is actually a real world one here, Mike, that has to do with just that very thing that we were talking about. Someone, you know, really not happy, actually, a couple not happy with their their 401. K. So let's talk about Edward and Marie. Right. They're a married couple both in their early sixties. Ed is an accountant. Marie is an office manager. They both have retirement plans through work. They're consistently saving enough to actually maximize the free company match, which is free money. So thankfully they're taking advantage of that while reducing their current annual taxable income. They've been great savers there really have. But but both of them just disappointed in what's happened in their balances this year. And each of them has seen 20% or more losses year to date. What was the solution for Ed and Marie?

Mike Zaino:
Yeah, so, so Edie, that's what he goes by. He's a good old country boy. And then Miss Marie, you know, Matt, they're not alone with the recession that we're in right now. So many people have lost money and they might not have time to recover without taking extreme risks that they're just not comfortable taking. So so they wanted to stop the bleeding, bottom line. And so each of them did what is called an end service distribution from their traditional 401 K accounts at work. And they rolled those funds over into new accounts. And this totally allowed them to implement a more risk efficient, more market efficient and more fee efficient strategy. All right. They were able to take the maximum amount of their balances that were allowed by their plan so that they can still remain inside of their plan, still contribute and still take advantage of the companies match that each of their companies offered. And most people have the ability to do this. In fact, most of them, depending on the plans, allow either one or two or three or four age based service withdrawals on an annual basis.

Mike Zaino:
So if you're out there and you're saying, well, heck, I'd like to stop that bleeding, too, you know, I don't want to continue losing and losing and losing, especially now that I just realized, heck, I'm in the retirement red zone, right? I can't afford to lose because I might not have enough time in order to make that money back. You guys can pick up a phone and contact me seven oh and 45601573. That is my direct line. It rings into this phone right here. That's the only telephone number people I've had since 1997. So millions of people have it. So when you call, if I don't answer your phone, that's rare. But if it does happen, leave me a voicemail and I will get back in contact with you just as soon as I'm able. You can also fill out the contact request form on money matters with Mike. Com. But either way, take action. If you continue doing nothing, then you're going to continue participating in those whims of the market. And you might not, like I said, have time to recover.

Producer:
Yeah, if you. What's that? They say the definition of insanity is doing the same thing over and over again, expecting a different result. Well if you kind of stay the course during times like this and you expect a different result, it's chances are not going to happen there.

Mike Zaino:
And it all depends on people's time horizon. Right. If you're in your thirties and you're listening to this show, you know you can afford to stay the course. You absolutely can because markets are cyclical. But the closer people get to retirement and once they're in retirement, they can no longer afford losing money because when you lose 50% and you get 50% back, you don't have the amount of money that you had. In fact, I use this so often in all of my speaking engagements when I'm in different areas of the country educating folks right In my in my financial workshops, I always ask people, look, if you have $100 and you lose 50%, how much do you have? Everybody gets that, right? $50. Mike And I say, you get your 50% right back. How much do you have? Almost everybody says $100. And I'm like, Wrong, You're only getting 50% of those $50, which is 25, right? So you have $75. If you lose 50% of $100 and then get it right back. So that's why in retirement, if you lose 50%, you actually have to gain 100%. Matt, just to get back to even and to gain 100% of your balance. Think about that, people. That's going to take time. So if you have a half a million dollars or $1,000,000 and you lose half of that, it's going to take time to generate those types of returns. And unfortunately, in retirement, time is a luxury that most don't have. So better planning and taking action prior to those events happening is how you are able to avoid catastrophe. When it comes to the decimation of your retirement accounts.

Producer:
That's that proper prior planning that you talk about there and for more pees. And you know, we often talk about you mentioned the ways to getting contact there MoneyMattersWithMike.com the phone number 704 560 1573. Talked about both of those and we talk all the time about the free Financial consultation yes said free consultation with Mike Zaino and I often ask you know what that scenario is like you know when people come and reach out to you and use either of those methods to do that. So I thought we'd kind of approach that question from a different angle today and kind of go through some questions that people might be asking themselves and that you might ask them to help them kind of wade through during that free, full financial consultation. Right. So we've got this list. It's seven questions that we can help you answer for retirement. And by we I mean Mike Zaino. So so number one here, Mike, is this when should you and your spouse claim Social Security benefits if you haven't already? And do you know the best way to maximize your benefits? So Social Security, how do you sort of help people kind of wade through that?

Mike Zaino:
Yeah, this is one of the biggest questions and the most often asked questions that I get when especially when I have married couples that come in. You know, it's not that big of a deal on the individual side, although it's asked a lot, but it's much more concerning and it's almost always asked by the misses of the couples that were that were having, you know, when should we take our Social Security? Because women in general are much more concerned about financial security. They like having that security blanket of knowing that they're going to have regular predictable income coming in month in and month out. And so and so the answer is that it depends, right? It really depends on each and every person's individual financial situation. Some people, when they retire, they are absolutely going to need that money to help bridge the gap from the income they were used to making while working to not having that income anymore. And all of a sudden their income is being replaced by Social Security. Well, I hope that you're not depending on Social Security alone. Right. And that's again, why planning is very, very important in planning at least a decade before you're in retirement. Heck, at least 2 to 3 decades is optimum. But ten years or more, we can we can affect actual change. When I talk about Social Security and a married couples scenario, generally speaking, again, this is going to depend on the individual, but generally speaking, the breadwinner should delay.

Mike Zaino:
Well, what does that mean? Well, if I have two working spouses or a husband or a wife or at least two people who have qualified for social Security benefits, let's let's phrase it that way. Whoever's Social Security benefit is going to be more at age 62, that person should delay taking their benefit at least until their full retirement age. And here is why. Let's fast forward 20 or 30 years into retirement and one of the spouses passes away. Gentleman out there listening, I'm not trying to kill you off, but statistically speaking, we give up first, right? Women live longer than men. That's just fact. I'm stating science. I'm not making stuff up. So imagine that you have just passed away and your wife is now your widow and you just left her with a financial burden because she's going to lose one of those two Social Security benefits. Right. She'll actually get to keep whichever is greatest. But when one of the spouses passes away, one of the Social Security payments also goes away. Therefore, whoever is is going to be higher at age 62. By delaying, you're increasing the amount that you're eventually going to leave to your surviving spouse. So that's just a general way. But there are lots of different ways to maximize Social Security benefits, and it depends on each and everyone's individual situation. So I hope that answered the Social Security question enough. So there we go.

Producer:
Yeah, it does really. I mean, the bottom line is it does depend and a lot of these, I think, really do depend on the individual situation. But it's good to know some of those general guidelines there and give you something to think about because a lot of people sort of delay thinking about all of these things as as long as they can. So, okay. So that's number one with Social Security. Number two question that Mike Zaino can help you answer for your retirement is what's your budget and your tax plan for retirement? And do you expect that to change in the future? And are you accounting for inflation? And future tax increases, all kind of important things to to lump together there when talking about the budget and tax planning.

Mike Zaino:
Yes. So a lot of people get used to living off of what they're living off of while they're working. And going into retirement, you want to make sure that you have as little to no debt as possible. Why? Because that consumes cash flow. And when you're retired, it's not about how much money you have in the bank or how much money you have in a 401K. It really is about how much income you have coming in month in and month out, what is predictable cash flow. And hopefully you've done enough planning so that there is more money or money than month. You don't want there to be more month than money. That means you have an income gap. So if you haven't looked at your budget today while you're working and then looked at what which of those debts or which of those expenditures you can eliminate by the time you retire, because that is going to be a very fluid thing, your budget, right? Because you're only going to have so many fixed dollars coming in in retirement. So that's one thing. Then we look at, all right, where is your money right now? Is it sitting in a savings account where you've already paid the taxes? Is it sitting in a traditional employer sponsored plan like a 401 K or a403b or a TSP? Again, if you're a federal employee and a significant portion of that doesn't belong to you because you haven't paid the tax.

Mike Zaino:
And when I make that statement, a lot of people go, Oh crap, he's right and I am right. Because if you've got $1,000,000 or 500,000 or whatever your number is, right? And that's in a tax deferred retirement account, guess what? That is not all of yours because you chose to pay Uncle Sam at a later point in time. So hopefully listeners out there have created tax free retirement buckets, either by virtue of a Roth IRA or a Roth version of a 401 K or 403 B or TSP. If they haven't, then you can contact me and we can discuss the other vehicle that is used to generate tax free retirement income. And we can talk about that on a one on one basis. And the question, Matt, that you asked about, do you expect your budget to change in the future? Well, let me ask you this. Do you think taxes are going up or down in the future?

Producer:
They're going they're going up, right?

Mike Zaino:
So if they're going up, then and people will say, well, hopefully I'll be in a lower tax bracket when I retire. Well, we hope that's the case. We hope you've planned for that to be the case. But the bottom line is that the government has two choices. They can stop spending money, which is never going to happen people or they can raise your taxes more. And a lot of people think we pay a lot of tax. Now. But historically speaking, we're in one of the lowest marginal tax rates in the history of taxation in the United States. So, you know, these are another way that we can attack retirement in your plan and put something in place together that addresses all of those situations.

Producer:
Yeah, And great to be able to do that with somebody like mike Zaino, who obviously knows these things inside and out. And of course, go to Money Matters with Mike.com and reach out and love to do that. All right. So number three on this list of seven questions is how should you best manage your account balances and those pesky required minimum distributions?

Mike Zaino:
All right. Well, I mean, that's a great question because, you know, everybody that is working right now should be focused on the accumulation phase of building and creating this this this nest egg that we like to say this pool of money, the pot at the end of the rainbow, so to speak. Right. Well, the harder you work, the more you save, the bigger that pot at the end of the rainbow is going to be. And so hopefully you have multiple pots. You might have tax deferred income, you might have tax free income, you might have money in savings accounts and money markets accounts. And so there's a strategy for which one of those you should utilize first in order to maximize the growth and minimize the taxation. And then we talk about you brought up these things called RMDs. Well, do people even know what RMDs are? Those are called required minimum distribution. So let's say that you have been so diligent in saving and you don't necessarily need to touch the money inside of your tax-deferred retirement vehicle. So an IRA, a 401 K or a TSP or anything like that, you don't need to touch it. You've done well. Guess what? The year that you turn 72, they just recently changed that as of as of 2020. It used to be the April 1st following the year and. You turn 70 and a half. It couldn't have been more confusing. So they simplified it and they made it the year that you turn 72. Guess who's going to come knocking at your door? It's going to be Uncle Sam saying, Gimme, gimme, gimme. And what he's saying, Gimme four, is he wants to collect the taxes off of your accounts. And so he's going to require that you take minimum distributions. So do you even know how much your responsibility will be? Don't worry. We'll figure that out for you when you become a client. Yeah.

Producer:
Well, there you go. And that's the thing is a lot of people don't even really know or realize that RMDs Those required minimum distributions are a thing. Well, number four here on our list, should you consider converting some of your savings to a Roth IRA? You touched on this a moment ago, but that's it's one of the only ways to have tax free income in retirement.

Mike Zaino:
Well, again, I'll ask the question, do you think taxes are going up or down in the future? And if you say, Hey, Mike, I think they're going up, then it definitely makes sense to pay some tax. All right. If you're able to contribute to a Roth IRA and go ahead and allow that money to sit in that Roth and grow tax-free for the rest of its life, so that when you go to take it out, guess what? You've already paid the taxes on the seed, not on the harvest. Think of it in farming terms. You plant this little old tiny seed and you plant one on several every several feet or inches, depending on what you're planting. And come fall during harvest time, you get to harvest all the acreage. You couldn't possibly eat all of that, right? Well, you have the choice of paying tax on the seed, but the government would much rather you pay tax on the harvest. Why? Because there's more of it, which means more tax revenue for them. Is that something that makes sense, Matt?

Producer:
Yeah, absolutely. Does. And so people want to we want to pay taxes on that seed if you can, instead of on the harvest. It makes total sense to me.

Mike Zaino:
And not only that, check with your employer if they offer you a 401. K. They may also offer you a Roth version of that employer-sponsored plan. I don't care what it is. 401 K 403 b tsp 457 Just ask if that's a possibility for you to participate in. And if it is, you can automate that, set it and forget it and just contribute to it so that that money is growing tax-free for the rest of its life. Now there is a caveat with the Roth. The money has to be in the account for at least five years in order for it to gain the protections of the Roth and grow tax-free. Otherwise, whatever you put in, you can take out because you have already paid the taxes. But if you don't leave it in there for five years and take out any of the gains, then that money will be penalized.

Producer:
Yeah, the Roth seems like a good idea for a lot of folks right now when, as you say, taxes are at historically low levels.

Mike Zaino:
I'll put it to you this way, Matt. 100% of my 401 K goes into a Roth, 100% of my wife's 401. K goes into a Roth. So if professionals are doing this, then I think it's a great idea for those that have the opportunity to participate also do that.

Producer:
Yeah. Yeah. He's practicing what he preaches here, folks. This is this is not a test of the emergency alert system. This is actual real life. Mike Zaino knows from experience. Okay, so number five on the list, Mike is a biggie. It's what should you do with your real estate? Do you plan to downsize? Do you have rental income to account for? All these things can make a big difference when you head into retirement.

Mike Zaino:
It absolutely can, Matt. And so a lot of folks, you know, you may live in a two story home. I live in a two story home right now, and I used to jump out of airplanes. So so my knees are not the best in the best shape as they could be at some point in my life. I'm not going to want to have to climb steps. So I may want to downsize and go into a house that is smaller or ranch type house. Right. Some people go out in their sixties and seventies and take out a 30 year mortgage. Well, if your kids don't want the house and you don't have any problem with that, then okay, that makes sense. I guess I wouldn't do it. But you know, again, to each his own. So what do you plan for the real estate from a legacy perspective when you die or your kids going to want to live in that property, are they going to want to keep the property and maybe rent it out to other family members or maybe generate rental income otherwise by renting it out to just putting it out on the open market? Or maybe Airbnb. And if you live close to the Charlotte area and in a relatively nice area, but you know, all of these things come into play when it comes to retirement and both income and then legacy planning. So these are things that we keep in mind as well.

Producer:
Matt Yeah, definitely Another big one that we you know, we just a couple of weeks back here wrapped up the the AEP, the annual enrollment period for Medicare. Well, that's another big question. You know, people planning out Medicare and potential long-term care needs as well because those are not covered by Medicare.

Mike Zaino:
They are not covered and a lot of people think they are covered in. The sad reality is, is that they're not right. So so yeah, we did just come out of the annual enrollment period, better known as AEP for Medicare and for folks who qualify, whether by being age qualified at age 65 or older or if they're disabled, that's the way you can get into it earlier. Medicare is an extremely comprehensive government-sponsored health plan. There are four parts to Medicare, and each of those parts covers different things. I mean, bottom line, you got A, B, C, and D, and then you also have these things called Medicare supplements that you can buy. And Part C is called Medicare Advantage. Some of the parts of Medicare don't cost you anything like Part A because you've paid for it all your life. Some of them, like part B do, cost a monthly premium for 2023. The lowest amount to pay is $164.90. That actually dropped a few dollars the first time I've ever seen it drop. But you're going to have to be account and budget for Medicare. As far as a health care, if you're a federal employee and actively employed, as long as you're covered by another federal plan, you only need to pick up Part A, You won't need to pick up part B, but when you retire, you do need to pick up Part B, And so if you're covered under an F B, which is a federal employee health plan, then you have some special circumstances around that.

Mike Zaino:
You may also non federal employees out there may be covered under their work health insurance. And so Medicare again, will become secondary if you're still working at age 65. But when you retire, it becomes primary. That's Medicare. Lots of moving parts, lots of confusion. I took thousands of calls over the past few weeks in in annual enrollment period. And then because Medicare does not cover long term care needs, think about if you have a stroke. One of my relatives, as a matter of fact, did not do some planning. I'm just now finding this out. And she's going to have to apply for Medicaid. And what that's going to do is she's going to lose her house. She's going to lose all of her accounts and everything upon her death. None of that will pass through to her heirs. And so it's really kind of sickening to think that the government will do that to you. But they will. But the silver lining is, again, Matt, with just a little bit of planning, you can make sure that all of your assets are going to go to exactly who you want them to go to.

Producer:
Yeah, I think I just came up with the six P's. Here is proper prior planning puts protection in place.

Mike Zaino:
There you go.

Producer:
I like it. There we go. So we got we got even more PS for you, more alliteration. All right, so the last one, number seven on our list of seven questions that Mike can help you answer for retirement is what legacy would you like to plan for your children or your grandchildren? You talked about this briefly with real estate, but, you know, there are, of course, other considerations there when you talk about leaving a legacy for the future generations.

Mike Zaino:
That is, you know, sometimes people leave their children with debt and with burdens and with just a whole bunch of chaos. And the kids are going, gee, mom. Dad. Thanks. Right. You know, they're rolling their eyes with a hard roll. And then there are other people that say, You know what? I don't want to place that burden on my kids. I want to have all my ducks in a row. I'm going to get all of my stuff put down on paper. You know, all of my account numbers, all of this, that and the other. And I'm going to pass on, you know, a system to them whereby they'll have access to everything they've set up, health care, power of attorneys and medical directives, like what happens if I can't make decisions for myself, Right. They put all that stuff there. And then beyond that, what happens to all of your stuff? That's where a will comes into place, where you're naming people who are getting this, that and the other. From a financial standpoint, whatever your retirement assets are, some people don't have any plan to leave any of that to their kids. You know, if there's anything left over, then by all means, you're welcome to it. But I'm planning on having a good time in retirement right. Then there are other people that say, you know, I've worked hard, I've got enough, and I want to make sure that I'm setting up my children or my grandchildren, you know, for a head start in life, at the point in time where I go to meet my maker, whatever your plans are, that's fine. They're your plans. They're not mine. Right? So we want to help you meet those goals and objectives by looking at different options that will facilitate getting done exactly what you want to get done.

Producer:
Yeah, and those are seven questions that Mike Zaino can help you answer for retirement. And you can do that with a full retirement plan consultation, you know, answering really all of those questions and it's provided to our listeners of Money Matters with Mike absolutely no cost and no obligation. And the big thing here to know is that you will only work with Mike if he can do better for you. You know, if you can't come to a mutual agreement on that, then you just fine. You go your separate ways and it's no big deal, right?

Mike Zaino:
Mike That is true. And beyond that, Matt, beyond those questions that we just answered, you know, I'm going to try to discover exactly much how much I should say you're paying in fees, because fees can can over the long term. I think last week on last week's show, we identified a person that was would have paid over $200,000 in fees alone. And if you missed last week's show, do me a favor. Go back and listen to that, because it was mind boggling. We can help you cut out unnecessary costs in your IRAs and your 401. Ks or any other types of retirement savings vehicles. We just talked about Social Security and Medicare. So we can absolutely help maximize those plans. And bottom line, again, whether you call me by phone, whether you reach out to us on on the website through the Contact US page, the ball is in your court. Just take some action and start taking control of your financial future in retirement.

Producer:
Yeah. And that website can be found at MoneyMattersWithMike.com. MoneyMattersWithMike.com is that website once again and the number is 704 560 1573 Now if people are getting close to maybe that retirement red zone that we've been talking about today, Mike, and they want to know, okay, am I actually like I feel like I want to, you know, be ready to retire. I I'm tired of working and all that stuff which, hey, I get it. You know, nobody really likes to work. That's why they call it work. But there are some signs that maybe they might be ready. Walk us through these, because I think a lot of people might find that the answer to a couple of these questions may not be what they would like and they might have a little bit of work to do before they're there, you know?

Mike Zaino:
Yeah, no, for for sure. For sure. I mean, I look at a whole host of things and I mean, just off the top of my head, you know, if you're if you're a family home, the house that you live in is paid off. You have no mortgage, then that might be a sign that you could possibly retire as long as you also have no other forms of debt, no credit card debt whatsoever. I mean, I think that that's huge. Going into retirement with credit card debt is is not the best case scenario by any stretch of the imagination. When you go into retirement, you also want to make sure that you have a fully funded emergency fund. What does that mean? Well, I mean, you want at least six months worth of bills, All of your bills put away inside of an account that is there for liquidity purposes, break in case of an emergency only if that is you and your family home is paid off and you have no credit card debt, then those are signs that you might be ready to retire if you no longer are supporting any children or any other family members, you're not. The sandwich generation sometimes is taking care of of teenagers. Or early age adults and also taking care of their parents that are in their eighties or nineties. So if you're no longer supporting anybody, you might be ready to retire. If you have an income plan that comes from multiple sources. Right? And overall, your income plan makes sense, then you might be ready to retire. And bottom line, Matt, if you're losing interest in your current job.

Mike Zaino:
And in the morning when that alarm clock goes off, it's like, oh, crap, you know, it's just a big ugh. Then you might be ready to retire. Provided that all of those things I just mentioned. You can also check those off the box as well, because there's a lot of people out there that hate what they do. And I feel sorry for those people because you say, Hey, you know, nobody likes work and that's why they call it work. Well, you know, I look at what I do and I just help people, you know, I really do. I go and that's my my biggest concern is trying to leave people better off than when I found them from a financial standpoint and from a just an overall state of being standpoint from from emotion. Right. So retirement can be very emotional. Talking about money can be very emotional. And when I look at things, I have the ability to compartmentalize and just look at facts and figures. And then based on what goals and objectives tie the emotion back in, but still allow people to feel really good about where they are and where they're going, or maybe light a fire under somebody's rear end. We have a come to Jesus meeting. You know, we come have a come to Zaino meeting because I'm not equating myself to Jesus by any stretch of the imagination, and it causes them to then again take action so and ultimately lands them in a better place down the road. That's my whole goal, just to leave people better off than when I found them.

Producer:
Yeah, and that's a wonderful goal to have. And I think people, you know, can be left in a better position and have a better retirement and things just be much better off for them because that is the goal. And folks go to MoneyMattersWithMike.com if you want to reach out.

Mike Zaino:
Yeah, we'd love to meet you. We'd love to learn about your goals and learn about your objectives and discuss your future. We can help make retirement feel like the next starting line for you and not the finish line. Because face it, if you're retiring in your fifties to sixties, most of you are going to live for another 20 to 30 to 40 years, especially with people living longer. So that's a long time to make the money that you have right now last. And so that's why it is so, so, so important to make sure you have a plan.

Producer:
Yeah, absolutely. And you can get started by going to that website that we mentioned is MoneyMattersWithMike.com or give a call 704 560 1573.

Mike Zaino:
It's funny Matt, my phone's been ringing nonstop but I'm not taking the call when we're on air.

Producer:
That's right. Asking you shall receive for the calls there. I love it. Is it getting to be that busy time of the year? And as a matter of fact, it is getting to be that busy time of the year here. We're just really a few days away from Christmas, if you can believe it. And so we're going to share a little cost cutter segment here with you. But I want to start off with this. It's this story that I put together about holiday spending and maybe some tips so you don't overspend this holiday season or wreck your whole retirement plan. So let's listen to this. We'll chat about it and share some tips on the other side.

Producer:
As the song says But don't let holiday spending wreck your retirement plan. I'm Matt McClure with the Retirement dot Radio Network. Powered by Amerilife. Just over $832. That's how much the National Retail Federation says the average American plans to spend on holiday gifts, food and decorations this year. Many of us will spend much more than that. So how do you keep from overdoing it? Financial website Investopedia has some tips on keeping holiday spending under control. Number one is perhaps the most important set spending limits for yourself. Tyler Ferguson with Jax Federal Credit Union agrees.

Tyler Ferguson:
Some can even go old school like myself and use a cash spending plan to ensure that you're staying inside of your budget. You're actually using cash to mitigate those swiping of the cards. It's also an effective plan if you have kids wanting to shop as well.

Producer:
That from News4Jax. The number two tip from Investopedia is to make your own naughty or nice list. In other words, if you're shopping list includes more than five people outside your immediate family, start cutting it, then bake cookies or other treats to give to those who didn't make the cut. That way you spread holiday cheer without breaking the budget and you don't seem like Scrooge Humbug. Other bits of advice from Investopedia include being realistic about your budget, collecting coupons or discount codes and organizing group volunteering instead of holiday parties, Ferguson says. One thing you should not overlook is getting the kids involved.

Tyler Ferguson:
For the younger kids, you want to give them a smaller dollar amount, maybe a $10 cash transaction to kind of help provide them a visual observation of what they're using the funds for. And then for your older kids who have either been saving themselves already or they have a lump sum to kind of go shopping with, can open up an account for them, go over how to budget and how to spend.

Producer:
So how can you give this holiday season without busting your budget? That's a key question to consider. As Santa starts warming up the sleigh with a Retirement dot Radio Network powered by Amerilife, I'm Matt McClure.

Producer:
Here's the cost cutter of the week.

Producer:
So there you go. Mike. I had I had some fun putting that particular story together and, you know, giving the folks some tips about ways to sort of cut out the spending and not wreck their retirement for the holiday season. And we've got a few minutes left here on the show and want to kind of run through these other tips here in our cost cutter segment quickly, because they're important to get to. And I know that there are a couple of things in this week in history that we want to touch on before the show is over as well. So creating a holiday budget is number one. We mentioned that in the story, but this is something that's very, very important. And I think probably the most important of all of these tips.

Mike Zaino:
Right. So so everybody loves to receive gifts. Right. And a lot of us actually like to give gifts as well. And so it's really, really easy to get sucked into overspending with all of those tempting deals and the the shiny new products that are out there. But starting with a budget that includes all of those anticipated costs, whether obviously for gifts, but then for travel, for Christmas events, if you have to fund them or pay an entry fee for tickets. If you're feeding people, there's extra groceries. Obviously, most people will decorate their homes. So if you need a new tree, if you need more lights. Right. And if you want to be Clark Griswold from vacation, by setting spending limits for yourself in advance, you can avoid that temptation to overspend.

Producer:
Shop early to save on shipping. I know we're getting close to Christmas, right? But but still, I think there's time to save on that shipping. If you've got a few more days to go, you don't have to pay the cost for the rush shipping. You know, you can do the regular, regular kind and still get there on time.

Mike Zaino:
Yeah, I mean, what is it, seven days until Christmas Eve. So if you're just now starting to shop, I feel for you because you're going to be left with the remnants. But there are over 1000 big name and online retailers who promise that, hey, you know what? We'll get it to you by Christmas Eve. We'll see if it happens. It can be a great way to finish those last minute holiday. Shopping's save on shipping costs in my favor to avoid the crowds at the malls. Yeah.

Producer:
Oh, absolutely. That's my favorite part of that whole thing, too. And speaking of crowds and hassle at the airport, let's let's go there instead of the shopping mall. Stay home for the holidays instead of traveling. That's a good one to save some money if you can. If you can manage it. If you won't make the relatives mad.

Mike Zaino:
Yeah. The over the hills and through the woods to grandmother's house we go costs money. So if you want to stop doing that and start building your own traditions at home, wait to visit your family after the start of the new year, you'll be able to save money, and then you can share even more quality time without. The added expense or hassle during the holiday. So I think that's a great way to to save money over the holidays. Just skip that pilgrimage to see those relatives all together.

Producer:
Yeah, absolutely. Well, and giving the gift of your time is another tip here because, you know, spending money on all these gifts and all the things, the physical stuff isn't the only thing that you can do for the holidays.

Mike Zaino:
Yeah. Gifts don't always need to be physical items, right? So just spending time with people I know my mom, I don't get to see her that often. She lives down in Atlanta. I see her maybe five, six times a year. I try to make a conscious effort of when I do go to see her, just to be with her right and spend time with her. She loves just sitting on the couch or sitting on her back porch that she just had screened in not too long ago and sipping a cup of coffee and eating some some pie or some cake that she's picked up at the at the grocery store or cooked. You can consider volunteering, you know, with a special person that could use that help. I mean, there are people who are gifted musically and they can bring an instrument and play. And that's a gift right there. It's just gift of time.

Producer:
Yeah, absolutely. And time is time is money, they say. So you're spending right there. There you go. That's the way you can think about it. Well, just a couple more here that very quickly I wanted to share before we go into this week in history, because we're really we're running up on time here. But make it a potluck is is one where, you know, have everybody bring it, bring a dish. A lot of people will do that. But it really can save you a lot of money, especially if you're hosting the event, the gathering. Right. And do it yourself, too.

Mike Zaino:
This is desserts, drinks. You know, that adds up the big savings at the grocery store.

Producer:
It really, really can. You don't have to buy everything. So the last you buy, the less you spend. That's the kind of bottom line of how that works. And then do it yourself. So, you know, make make a craft for somebody as a gift instead of going out and buying the latest greatest new technological thing or something. It's this week in history. So this week in history, Mike, we do have a couple of big things. One of them very big moment in history for the Carolinas.

Mike Zaino:
Absolutely. On this date, December 17th, in 1903, near Kitty Hawk, North Carolina, the Wright brothers, Orville and Wilbur Wright, they made their first successful, sustained flights in an airplane.

Producer:
Wow. It's wild to think. And the rest, as they say, is history. So that's why it's such a big, big event there and took place right on the shores of North Carolina. Another one is in entertainment news this week. A show that's still going on made its debut.

Mike Zaino:
Yeah, this is unbelievable to think of for me. In 1989, on this date, The Simpsons actually debuted as a Christmas special and it became a weekly series in 1990 and has been on the air ever since. Longest running series in the history of TV.

Producer:
Wow. Well, Money Matters with Mike is going to be running that long and longer, I'm sure about it right there. But that is about all the time we have for this particular edition of Money Matters with Mike. I have learned a heck of a lot this week. Mike, I hope you have enjoyed being here and and teaching me and teaching our listeners about it. All of these different topics that we've talked about as well. Appreciate you and thank you for all the knowledge that you bring and we'll see you again next week.

Mike Zaino:
Absolutely. Matt, I appreciate you as being the co host and producer extraordinaire that you are, But mainly I appreciate our listeners. You know, we're jumping into a new time slot here at 9:00 AM on Saturday mornings. Without you guys. We don't have a radio show. So if you know anybody that can benefit from this type of information, please spread the word. Our podcast is not a secret. They can listen to it on their own time. But biggest thing is, you know, be grateful. Show some gratitude for your fellow man and woman that you live with. I hope you guys have a great rest of the weekend and 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 MoneyMattersWithMike.com Or pick up the phone and call 704 560 1573.

Producer:
Not affiliated with the United States government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks to the property of the respective owners Amerilife 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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