2.17.23: Audio automatically transcribed by Sonix

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

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

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

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. This show, 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 this week we are bringing the heat again. On today's show, we're going to continue and wrap up our discussion on the Smart Retirement Plan series. And as always, I have the distinct honor and privilege of being joined by the one, the only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, brother?

Producer:
I'm doing great, Mike. I hope you are as well.

Mike Zaino:
Yeah, I've been awesome. Matt This week has been an absolute whirlwind week. For the second year in a row, I was asked to fly up to Washington DC, our nation's capital, and speak at a legislative conference on our program, the retirement program, and how we're able to raise awareness for everybody's financial future. And that was that was an amazing experience, just getting up to, you know, be around the Capitol building and see all the monuments and and see the congressmen and just experience all that is the the governing and the potential governing. There were a lot of lobbyists there trying to affect change for folks in the workplace. So just all in all, a very, very positive experience and and a humbling experience that they would ask me to come up there and speak again, too. So, yeah, that's awesome.

Producer:
That's really great. And yeah, I've been never in any sort of official capacity or anything like that, but I have been to DC before, just on a family vacation. We decided to go and spend a few days there, you know, several years back. It's been a while. But yeah, it's just, it's crazy. And actually it's funny now that I that I work in the line of work that, that I do and that we do here on the show is that my my favorite thing that we did was tour the the Bureau of Engraving and Printing where they print the money and that that was cool.

Mike Zaino:
I bet that would be cool. I didn't get a chance to do that. I mean, we we walked out one night and we actually, you know, got a chance to see the Washington Memorial and the the the Lincoln Memorial as well. And so, you know, they're just so much history in that town. The Smithsonian Museum is there. I remember as a child getting to go to a field trip and they said something and don't quote me on this, people, but I mean, it was ostentatious. Like if you if you spent 30 seconds, literally just 30 seconds at each individual exhibit that you would never in your lifetime see every single exhibit in the Smithsonian. And this was back in the 70 seconds. So. Wow. Can't imagine, you know, what they've added to it since then.

Producer:
Yeah, it's it's great. And if anybody gets a chance to go, definitely go up and you can probably even take take the train. That's what we did. We took Amtrak up there and it was actually a very beautiful ride because you get to go through some beautiful country doing that. So take that. Don't have to worry about driving and save yourself a little bit on gas, which is always helpful these days.

Mike Zaino:
Absolutely. The train is something I've actually never thought of going to DC, but driving there and flying there and then driving there, you get caught in all of that DC traffic, which is never fun.

Producer:
Yeah, never, never. It rivals Atlanta for the bad traffic, let me tell you. And I got a lot of experience with that, but I.

Mike Zaino:
Would definitely put it up there with Atlanta, with with Houston, with LA, with New York. I mean, it's it's just not good.

Producer:
It's it's really it's really not. Well, and we'll leave it at that. It's just not a good situation. But yeah, no, we've got a lot to get to in the show today. A lot of great information. Some meat on the bone to chew on for the listeners here. Mike, we want to mention, first of all, that if anything over this next hour that we discuss sort of piques your interest, folks, you can always go to the website to reach out for a free consultation. That website is MoneyMattersWithMike.com. It's all one word. MoneyMattersWithMike.com or you can call Mike Zaino. He's always got his phone on him. If he doesn't answer immediately number one I'll be surprised. But number two, he will call you right back. 704 560 1573. You can also find us on the socials just search Money Matters with Mike on Facebook, especially also on YouTube. We'd really like it if you would check us out there. And then as well, you know, we're anywhere you listen to podcasts, I mean, Apple, Spotify, iHeart, all the biggies there. Just search for Money Matters with Mike. Subscribe. Leave us a comment because we appreciate it and we really love knowing who all is out there listening to us. Because as you always say, Mike, without listeners, we don't have a show.

Mike Zaino:
We don't have a show. I mean, it's it's so paramount. And so not only should you go and check us out on all the different platforms that we're on, but if you know anybody that you think might benefit from a little bit of financial education, maybe they're just starting out, maybe they're in their mid-career or maybe they're about to retire and they really need to know how to protect their wealth and their assets to make sure they have enough money through the rest of their lifetime, no matter what life throws at them. Then please have those people like and subscribe to all our platforms as well.

Producer:
Yeah, absolutely. Great, great resource there. And speaking of that, you're going to get a lot of great resources from us coming up here over this next hour. We will start off with our quote of the week coming up in just a bit. And Mike, as you said at the top of the show, we're going to sort of round out our Smart Retirement plan series here by talking about three more topics, smart lifestyle that's kind of, you know, living within your means, enjoying your retirement, being able to actually enjoy your time in retirement because, hey, that's that's really what the goal is, I think, for everybody. Amen. Enjoying yourself? We'll also talk about smart adjustments, you know, making some adjustments. It's not just to set it and forget it kind of thing, you know, check in, make some adjustments to your retirement plan and keep on track year after year. As you head toward retirement, we'll do a little inflation demonstration, how to beat the bank CDs with maybe a particular type of investment vehicle that you haven't thought about before. And then smart legacy as well, which is really how to care for those who are going to be here after you're gone. And such an important part of the whole discussion.

Mike Zaino:
Mike It is. It is a very, very, very important part. Now, people have different viewpoints on whether or not they plan on leaving anything to their families. But for some people, that is a really, really important part of why they work so hard and they wish to leave a legacy. And so we're going to talk about how you can protect that legacy for those that you will eventually leave behind.

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

Producer:
And that very aforementioned quote of the week comes from Dave Ramsey, who's a financial guy you might have heard of once or twice in his quote is financial peace isn't the acquisition of stuff it's learning to live on less than you make. And so you can give back money back, rather, and have money to invest. Let me say that one more time so you can give money back and have money to invest. You can't win until you do this. I think those are great words of wisdom there from Dave.

Mike Zaino:
You know, I don't always agree with everything that Dave says. I think there's a lot of people that feel that way. But but this is this is one if you can learn to live on less. So that enables you to give back and have money to invest, right? Then that's just winning, right? So listen, folks, I want you to have a lifestyle in retirement that you can actually enjoy. But I also want to make sure that your money outlives you and not the other way around. So I encourage all of my listeners to visit MoneyMattersWithMike.com connect with and follow us on Facebook by searching Money Matters with Mike Subscribe to our YouTube channel by doing the exact same thing and more importantly, give me a call to schedule a complimentary consultation. There is no obligation. The call is designed to allow me to learn more about you and how I might be able to help you live that stress free lifestyle in retirement that you so, so, so much deserve.

Producer:
Yeah, you worked so hard throughout your career. We want to make your money work hard for you in retirement and so you can actually enjoy those years and that number for that free consultation. If you want to give Mike a call once again, folks, is (704) 560-1573. Well and you don't like talking about that exact thing is a great segway into our smart lifestyle segment of the smart retirement plan. And really it is all about that. You know, the very first thing that we talked about with our Smart Retirement Plan series was that smart vision. You know, taking a look now and envisioning what you want your retirement to look like in. A future. And this smart lifestyle is really where the rubber meets the road. It's making that vision come to life come to fruition, right?

Mike Zaino:
So, so, so many people, you know, they think that, hey, you know what? When I retire, I want to travel. I want to see the world or see the United States. And that's one of the main goals for most folks that I sit down with. Okay. Well, my goal is to help you live the retirement that you've worked so hard for. So let's get together and have a conversation about what you want your retirement to look like so that we can build a smart plan in order to fund it. So remember, if we break down retirement into basically three decades, okay, your 60s or 70s and your 80s plus, we'll say that, you know, during your 60s, that's the first ten years. Those are your go go years. That means you're going to travel more in your 60s than you ever have in the past. So you're going to need to be able to fund that travel. Okay. And the next decade is your slow go years and your 70s, you're still traveling. You may go back and visit some places that you really enjoyed. And so you're also going to need money to do that in your 70s.

Mike Zaino:
And then the last ten plus years, your 80s or 90s, if you're fortunate enough to make it to 100 plus years of age, you're not traveling as much. Those are the no go years. So you're going to spend a lot more on travel during your 60s and 70s than you will in your 80s plus and beyond. So if you want to travel abroad during your retirement, I want to make sure that you have a plan that considers those goals. The last thing that you want to do is outlive your retirement funds. You want your funds to outlive you and the happiest people in the world as far as retirement goes, are those that are living within their means and they have income sources that they can count on. Okay, well, we can help you navigate all of the things Social Security, pensions from your employers, personal pensions from annuity and any other retirement income sources that you may have. It is just about making sure that you are able to live a smart lifestyle. And the only way that you can get there, Matt, is by taking the steps prior to retiring that enable you to do so.

Producer:
Yeah, and part of those steps is really just being educated about what your your retirement is going to hold and what the steps are. The following that, that you that you need to take to to get there. And you know, it's funny because I think about I heard an illustration of this one time, the the retirement smile. I don't know if you've ever heard it where it's, you know, in those early years, those go go years, you know, you've kind of got a lot of spending that's going to have to happen, as you were saying, for all that travel and everything. But then as you enter in those slow go years, you might you're not going around as much. So, you know, that goes down and then the curve goes way back up when you get into those no go years because of, you know, maybe the health care spending that you have to do long term care potentially. So that's one of those things that, you know, people might not necessarily think about in the years leading up to retirement until it unfortunately comes to reality, especially those those no go years.

Mike Zaino:
Yeah. And another thing to keep in mind, too, Matt, is that when people are in retirement, they're living on a fixed income, most of them. Right. Hopefully they fixed that income by putting some some plans into action well before retirement. But you only have so many dollars to be able to draw from. Well, if you are drawing from that money and your accounts are exposed to the volatility of the market and God forbid the market drops, you know, 20 to 35% like it did last year in 2022, then guess what? That directly affects your ability to fund those Go, go and slow go years. So you just want to make sure that you are checking the boxes off on your retirement plan to make sure that, you know, come hell or high water. Those goals of travel are going to be able to be met without having to sacrifice losing money to the market.

Producer:
Yeah, absolutely right. You want that that safety and that assurance that comes with a lot of the things that you can help people navigate through. And really, I mean it's something to you know, and this leads me right into the next sort of section here, which is smart adjustments. It's something that you don't want to leave to chance. First of all, that's that's one reason you need to reach out. And secondly, it's not something that you want to necessarily just, you know, as the old infomercial would say, set it and forget it. Right? Just be like, okay, I in my in my 40s hopefully mid 30s even better 50s maybe came up with this plan and it's in. Great, grand. Wonderful. Nothing needs to change. I'm sure it's fine. You know, Now, there could be some adjustments that need to be made along the way, right?

Mike Zaino:
Absolutely. Because if you think about it, somebody that has a plan in their 30s, 40s and 50s, that plan is probably going to change in their 60s and 70s and 80s. Right. So you need to be fluid. You need to be, as Bruce Lee said, like water. And so that is very, very important to at least have your portfolio and your retirement plan reviewed at a minimum once a year annually to ensure that you are on track to meet those goals and outlive your money. So here's one thing that I'll mention, and I'll say this loudly, okay, If you haven't heard from your advisor lately or they are telling you to just hang in there, all right. Despite all those negative returns, you owe it to yourself to sit down with me, come in, see me, see what your plan could be missing. Again. These consultations are at no cost and no obligation to our listeners. Reviewing your assets regularly allows you to know when you should rebalance, because over time, the performance of different asset classes can cause a person's allocation to drift away from how it was originally set. So again, if you're 80% in equities in your 20s and 30s, you don't want to be 80% in your equities in your 60s and 70s and 80s because you're just subjected to so much risk, right? Rebalancing helps to maintain that desired level of diversification. Matt And more importantly, risk. Okay. Additionally, rebalancing can help keep emotions, emotions out of the equation, out of investment decisions as it requires periodically buying assets that have decreased in value and then selling assets that have increased in value. That's the whole goal, right? Buy low, sell high. And so people that try to do it on their own, unfortunately, might get one of those right. But very rarely are they correct on both. Okay. So we want to help take the emotion and more importantly, the stress out of financial planning so that you can live a stress free retirement.

Producer:
Yeah, And and that's one of the things, too, when you talk about that sort of timing thing, people try to time the market a lot of the times. And yeah, chances are if you try to time the market all the time, especially Hoo boy, you're going to be in for a ride that you don't necessarily want to go on and won't quite be so fun for you.

Mike Zaino:
It's important because it's not trying to time the market, but it's time in the market. People who try to time the market often miss the 3 to 6 days a year that have the biggest impact, positive impact on their portfolio. And if you miss those days, you're eventually going to end up negative. So, I mean, it's very, very important to make sure that you're speaking with a financial professional who is able to help you make those smart adjustments in your plan and take that stress out of the financial planning process altogether. Yeah.

Producer:
And hey, I know a guy. His name is Mike Zaino, and you can get in touch with him at MoneyMattersWithMike.com. You can fill out the form there and it's a simple one and just reach out and he'll get back to you. He'll also get back to you if you give him a call. 704 56015737045601573. And you know, Mike, speaking of speaking of stress, we're going to talk about inflation here in just a minute. But this reminds me of this piece that I just have put together about a new resource that we have for our listeners, which I think could be really, really helpful in helping people sort of navigate this inflationary period that we find ourselves in here. And it's 23 retirement cost cutters for 2023. This is something that we can provide to our listeners for free. It's a nice, you know, nice shiny document that we can send to them absolutely free of charge. But some great tips in there about things that you can just kind of trim the fat and really they add up. You know, when you look at all these different suggestions on how to cut back on those costs, let's actually take a listen to this piece that I just did on it just a couple of minutes here, kind of describing setting it up. And we'll tell you again how you can get in touch with Mike to get your free copy of that. Here are the 23 retirement cost cutters for 2023. With soaring inflation continuing to wreak havoc on everyday budgets, there's never been a more important time to cut costs. But do you know where to begin? I'm Matt McClure with the Retirement.Radio Network. Powered by Imara life, there is no question costs have been soaring.

Sharon Epperson:
About one third, 34%, say they are worse off financially this year than a year ago. Almost half, 46%, say they've had to cut household. Bending due to inflation.

Producer:
Cnbc correspondent Sharon Epperson recently reported on a survey that sheds more light on how inflation has been impacting us all, even those who earn six figures a year.

Sharon Epperson:
These high earners say the first expenses to go are dining out at restaurants, entertainment outside the home and travel and vacations. More than half also say they'll delay big household purchases That.

Producer:
High inflation has led the Federal Reserve to respond with interest rate hikes. The goal is to increase costs to tamp down demand. Esther George is president of the Kansas City Fed.

Esther George:
Already we've seen the committee's policy actions lead to a very sharp tightening of financial conditions.

Producer:
But it hasn't done enough yet and costs still keep rising. So what should you do? Well, we have a free resource called 23 retirement cost cutters for 2023. It's full of ideas to help you make the most of every penny. Things like take advantage of senior discounts, eliminate unnecessary subscriptions and cut back on clothing expenses.

Sharon Epperson:
Look at your needs and wants. Figure out what's optional and what you can cut out.

Producer:
The last one on the list of 23 retirement cost cutters for 2023 is perhaps the most important. Seek advice from a trusted financial professional. That's the best way to get in-depth financial advice in retirement planning that's customized to you and your goals. Just make sure whoever you consult for financial advice has years of experience and credibility. You can verify. So do you know the best way to cut costs in 2023? That's a key question to consider as our budgets get stretched to the max. With the Retirement.Radio Network powered by AmeriLife. I'm Matt McClure to get your free copy of 23 Retirement cost cutters for 2023, give Mike a call at (704) 560-1573 or go online to. MoneyMattersWithMike.com.

Producer:
High inflation got you down. This is your weekend. Pick me up. You're listening to Money Matters with Mike.

Producer:
So you have those 23 cost cutters there, Mike, I think some great, great tips for folks. And you know, I mean, it's not you know, we're not trying to say that all of these are going to be right for everybody, but some great suggestions in there for things that you as I said before, I shared that piece you might not have thought of and some some creative ways, I think, to really save some money. And those little things do add up.

Mike Zaino:
Yeah. After last year with the inflationary period, you know, at nine plus percent, it's come down since then. But you know what? Last year was painful. Highest inflation that we've seen in in 4 to 5 decades. Right. And on top of that, you had market losses. So people were definitely feeling the pain. So anything, Matt, that we can give our listeners that may just spark different ideas that maybe you haven't thought of before, right? That you can actually keep more of that hard earned money in your pocket. I mean, I don't see how that's a bad thing.

Producer:
Yeah, it's definitely not a bad thing. And once again, you can go to Money Matters with Mike dot com request your free copy of those 23 cost cutters for 2023.

Producer:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Producer:
You know, Mike, we've talked a lot about high egg prices and we've and for good reason. I mean, that people are shocked by the the prices that they're seeing at the grocery store here. And we're going to talk about those again. But in a kind of a roundabout way today, because that high inflation of the price of eggs is now spilling over to other things. It's not just affecting you when you go to the grocery store and buy a dozen eggs and have to feel like you've got to take out a home equity loan to do it or something. But you you, you know, it's affecting the price of some other things at the grocery store and at restaurants, right?

Mike Zaino:
So, so think about all the things that eggs are a major ingredient in. So it could be anything from mayonnaise to baked goods, egg noodles, certain kinds of breads, custards, pudding, you know, breaded or battered meat and vegetables, salad dressings, condiments, soup, broths. And one of the funny things that I thought, well, not really funny is that eggs are also inflating the cost of dining out. Matt Because as restaurants use eggs as an ingredient in so many dishes, what they're doing is passing that cost on to who? The people who are eating out. So there was a chart that that we saw that kind of saw a year over year percent changes in the prices of kitchen staples. And, you know, we're going to talk a little bit about this because 59.9% increase in the cost of eggs, that's huge.

Producer:
Gigantic. I mean, it's really is like you think about that 60%. And that was at the the end of 2022 when those numbers were compiled. I'm sure it's gone up even more. You know, since then. It's just been crazy, right?

Mike Zaino:
Butter and margarine are up over 35%. That's butter and margarine. My my wife, I like butter. I don't like the the low fat anything I like flavor. Okay. So and I also like bread. And I have been losing weight simply by cutting out bread and butter. But my wife still says she's going to have that etched on my tombstone. Just bread and butter. And because I like it that much, Matt.

Producer:
I love it. Well, you know, one thing that I like beef, and that is one thing that I was really just thrilled about to see on this chart here, that those prices of beef and veal, they put those in the same category here is actually down 3.1%. I'm like, throw me another steak on the grill, for goodness sake.

Mike Zaino:
Yes. Let's have a barbecue. Come on, let's do it.

Producer:
That's right.

Mike Zaino:
Who doesn't like a good grilled steak?

Producer:
I mean, come on. It's I mean, I'm sure that there. And you know what, vegans? I know you're out there. You're you could be listening at this very moment. Nothing against you and nothing against the poor cows. They're just very tasty, in my opinion.

Mike Zaino:
They are. Hey, look, cows eat grass. That makes me a vegan, right? If I eat the cows that eat the grass. Right.

Producer:
There you go. It's that, like by. By proxy, I guess you're. I don't know. They they eat the veggies and pass it along to you. But that's a look at the inflation demonstration for this week.

Producer:
Need a higher rate of return from your safe money. Listen up. It's time to beat the bank CD rates.

Producer:
So we've talked a lot about the inflation. Obviously, we've also talked a lot about the Federal Reserve and their response to inflation to try and tamp it down, and that is raising interest rates. And so that that means a lot of things, but it also means that there could be some good opportunities for investors here. And I'll let you take the ball and run with it from there. Mike, I don't want to steal your thunder on this one.

Mike Zaino:
Yeah, All right. My thunder. Okay. So so rising interest rates actually present opportunities for conservative investors. Okay. As interest rates continue to rise, so too do the bank rates on certain products. Right. So while the national average I was just reading this this morning, Matt, the national average for a bank savings account is 0.23%. So not even one quarter of 1%. I mean, it's horrible. Okay. That means the banks are making a lot of money. Okay. Cds, seed bank CD rates have climbed a little bit, but the national average is just over 3% on those. What we are going to consider are conservative investors to consider is an alternative. If you're interested in protecting and growing your safe money, okay, There are products out there that are called migas. M-y G. A It stands for multiyear guaranteed annuity and my GO rates are actually much more favorable than definitely savings accounts or money market accounts or CDs right now, especially for that money that you're not going to need for the next 3 to 5 years. So if you are looking for higher returns without taking on too much risk, these can be particularly beneficial for those types of investors who are looking for, you know, the high fours to mid 5%.

Mike Zaino:
Okay, 5% plus guaranteed on your money. That still offers you some degree of liquidity. So when you're in a CD, Matt, you don't really have liquidity. You got to wait till the CD matures and then you can get your money with the MIGA, they'll still offer you up to 10% of whatever you put in there, zero fees. Okay, So please do not settle for low bank CDs rates that are out there just because they're horrible, even though they've come up some coming up from next to nothing to, you know, barely above nothing is not great. While these multi year guaranteed annuities. Matt allow for tax free growth excuse me tax deferred growth. Let me just make sure I correct myself and everybody understands there it is, tax deferred growth, the earnings and the gains from investing in the migas are not subject to taxes until you withdraw the funds, which allows for greater growth potential. So you can receive guaranteed returns because they're going to guarantee the return on your investment no matter what the market does. And this can provide you with peace of mind for those investors who are seeking more predictable returns on their investments.

Producer:
Yeah, absolutely. And you know what, Mike? I think another thing, too, we're talking about your your safe money. You really want that safety. I think that's what a lot of people are really yearning for right now, especially as you said a minute ago after the year we just had in 2022. And so I feel like the difference in the reserve requirements is really important to mention here too, between a bank and Omega.

Mike Zaino:
Yeah. So so please understand, most bank CDs, most banks have a financial reserve requirement. What that means is the amount of money that they have to have cash on hand just in case something happens. That reserve requirement is between 3% and 10%. While multiyear guaranteed annuities because they are issued through the insurance industry, they have to have a 100% reserve requirement. So as much money is in them, they have to have that much money cash on hand. And wouldn't you feel safer knowing that 100% of your principal is backed up in reserves by law versus just 3 to 10% with a bank CD? Okay. What good is a safe investment if your money can't be as safe as it actually could be if just diverted into a safer product?

Producer:
There you go. Backed up 100% because as you say, it is an insurance product. It is a product of an insurance company. So then you've got that safety on top of that steady growth that is going to be written in the contract and you've got the liquidity. I think it's a great thing for people to consider, you know, and the you the greater return as compared to especially as you said, a savings account. You know, a lot of people are saying, well, you know, I'm going to put money in my savings account and I'll get a little bit of growth out of it. And I'm like, Yeah, you might get a few pennies over the next 5 or 10 years. But that's kind of about it when you're looking at those types of returns.

Mike Zaino:
Yeah. So if you have money that you're not going to need for the next 3 to 5 years. I love Amiga in today's interest rate climate because where else are you going to get guaranteed growth, 100% protection and liquidity for zero fees?

Producer:
Matt Yeah, absolutely. Well, you can do it by calling, by calling Mike Zaino is how you can do it. That's where you can get it from. 704 5601573. Or you can go to the website MoneyMattersWithMike.com. You can also hit us up, as we said earlier on Facebook, just search for Money Matters with Mike and please do subscribe to the YouTube channel as well. We would love if you would do that, get our subscriber numbers up and we would much appreciate it. So, okay, speaking of annuities, there is a book that we bought. I actually have my copy right here sitting right. It sits on my desk at all times. It is Annuity 360 by our good friend Ford Stokes, who is literally literally wrote the book on annuities here. And he knows quite a bit about the ins and outs of these. And we wanted to share a chapter of that book with you, the audio book version. It is called Blind Annuity and Life insurance companies are competing for baby boomer dollars. This is a really important chapter, I feel like. Just a just a few minutes here, but chock full of a lot of great information and insight into these types of products will play this and we'll talk about it and continue on with our smart retirement plan as well on the other side.

Ford Stokes:
Chapter two Why Annuity and Life Insurance Companies are Competing for Baby Boomer dollars. Big idea annuities counter one of a retiree's biggest fears outliving their wealth. Annuities create lifetime income streams. There are 73.4 million baby boomers in the United States that are close to or are already in their retirement years. Baby boomers put between 9 and 10% of their pay towards their retirement. Only 55% of boomers have any money saved for their retirement. More than 4 in 10 boomers inaccurately believe that Medicare will cover long term health care costs. Baby boomers hold $2.6 trillion in buying power. They have had more time to build their wealth in comparison to other generations because some might still be in the workforce and making more money. Baby boomers control 50% of the nation's wealth, outspend younger generations and are more likely to spend their retirement savings on themselves rather than passing them down. Total US retirement assets are about $28 trillion. More than half of those assets were either defined contribution plans or individual retirement accounts. Some other facts about baby boomers and their spending habits. 69% of baby boomers either expect to or are already working past age 65 or don't plan to retire. Only 26% of baby boomers have a backup plan for retirement if they are forced into retirement sooner than expected. Baby boomers make up 46.8% of pet spending. Baby boomers are expected to spend 3.4% more on health related purchases than their parents did. Why are annuity companies targeting baby boomers? Boomers face many issues when planning for retirement.

Ford Stokes:
The three primary reasons are, number one, growing the money they have already saved. Number two, dealing with and preparing for unforeseen expenses. The largest of which are tied to health care and long term care. Number three, optimizing their financial plans when their exact lifespan is unknown. Annuities exist to help boomers with the last issue with an annuity, a retiree gives an insurance company a lump sum of money in exchange for an annual income that will last throughout their lifespan. Annuities have the potential to become useful tools in baby Boomers portfolios when planning their retirement. They offer protection from market volatility while also eliminating the risk of outliving one's retirement savings, which are not guaranteed by portfolios that lean heavily on stocks and bonds. The demand for retirement income amongst baby boomers already exists, and annuities are the only products that can provide a hedge for a long life like longevity insurance. Reasons Baby boomers should be interested in annuities. They are falling short of their retirement goals. Roughly 10,000 baby boomers retire every day, but a very small percentage of them believe they can retire and live comfortably throughout their golden years. Only 25% of baby boomers think they have enough money to retire comfortably. Many couples may be on the right track, but unforeseen circumstances such as health problems or staffing cuts, might force them into retirement earlier than planned, leaving a much larger income gap. Baby boomers are looking for a reliable source of retirement income, and annuity companies are beginning to tap into this market because they recognize the need.

Ford Stokes:
Not all annuities are created equal. There are two main types of annuities immediate and deferred. The right kind of annuity depends on your financial goals, your situations and your needs. One thing that makes annuities so attractive is that there are so many options available. While it may seem overwhelming. A financial advisor can help you sort through all of your available options and make a smart choice for your money. Security for their income annuities can help build a secure retirement through different income strategies while also alleviating any stress or fear they may have left over from the financial crisis of 2008 and the bear market. Annuities can play an important role in a plan along with your Social Security, health care and other factors. Annuities can address issues such as maximizing your Social Security benefits, which help create an income that you can never outlive. How annuity and life insurance companies have responded to baby boomer needs. Interest in hybrid products. Baby boomers don't want to pay a fortune for something that offers them only a part of what they need with less income to be counted in their retirement years. Already paying for individual products to meet each of their needs can be too expensive. Life insurance companies heard these concerns and responded with new hybrid products. Many life insurance companies now offer some kind of long term care rider on their whole life or universal life products. Generally speaking, these riders provide coverage for long term care should you need it or you receive a death benefit if you don't.

Ford Stokes:
These combination products have grown from 6,000,000 in 2000 and 8 to 2.6 billion with a B in 2013 and they are still growing. Need for guaranteed income. Baby boomers are also concerned with outliving their money. They want to enjoy their retirement, but they also don't want to run out of funds. The industry responded to these fears by offering a variety of products with guaranteed lifetime income. These products include variable and indexed annuities with guaranteed living benefit riders and immediate or deferred annuities. The annuity industry has been transformed by these new products. According to PricewaterhouseCoopers Employee Financial Wellness Survey, since the economic downturn of 2008, 76% of retirees say that creating a guaranteed income is their top retirement planning priority. Annuity companies rose to the occasion to create products to meet the needs of baby boomers and provide them with a sense of security. The need for advisers Annuity companies have created many products to meet the needs of their consumers. This is a good thing, but it can make for a tough decision on the part of the investor. With so many options to sort through some pre-retirees and retirees can't sort through all the information. Many are afraid to make the wrong decision, which leads them to make no decision at all. A large part of the planning process involves an advisor educating their clients on all of their options so they can make the right decision.

Producer:
If money is on your mind, you're in the right place. This is Money Matters with Mike.

Producer:
So that is chapter two of Annuity 360, read by the author himself, Ford Stokes. And that is why annuity and life insurance companies are competing for baby boomer dollars. A lot of great information in there and in the book as a whole, Mike.

Mike Zaino:
Is there is a lot I mean, if you think about why they're competing for baby boomer dollars, I mean, let's face it, baby boomers have the most dollars at this point in time, right? The most disposable income because they are now in retirement and they need to make sure that money lasts. So what a better way than an annuity that can give you upside potential downside protection, liquidity, zero fees. Again, show me where else this this is available to you. So so if you want a copy of annuity 360. All right, just give me a call. (704) 560-1573. Hit us up on on Facebook request a copy hit us up on MoneyMattersWithMike.com fill out a contact page contact us page with a request for the book and I'll make sure you get your free copy.

Producer:
And you know speaking of annuities and insurance and that that whole industry here you know part of all of that can be a way to leave a legacy for the next generation, make sure that the next generation is being taken care of. And, you know, when you invest in products like that, you're not necessarily just taking care of yourself. You're taking care of the others who you care about. There are a lot of different things that go into leaving a legacy, and that's where our smart legacy, part of the smart retirement plan comes in.

Mike Zaino:
Mike It does. You know, I have been on certain members of my family to to start thinking about this stuff and planning for the end of your life can often be very, very difficult to discuss. Your family does not want to think about life without you. And they may choose not to make a plan just to avoid having those hard conversations. The reality, though, is that making a plan for the end of your life actually protects your family, and it takes stress and burdens and anxiety off of their shoulders. Matt Um, I've shared before that I've had a kidney transplant. I've also shared before that I'm a champion wife picker because my wife happened to be a perfect donor match and she gave me a kidney about 26 months ago, well before both of us were literally lying on the table at the same time. There were no guarantees of us getting up, right? So we had to make sure that all of our ducks were in a row to make sure that money went where we wanted money to go when it came to legacy planning. So, you know, there are certain benefits of estate and legacy planning. Number one, it's going to ensure that your assets are passed on to the loved ones that you want it to, but more importantly, in a tax efficient manner. Okay. By setting up both trusts and wills, retirees can avoid those hefty taxes that are associated with distributing assets after death. Okay. It also is able to ensure that your assets are being distributed according to your wishes. So what that does is eliminates the possibility of any family disputes over who should receive what and how much of this or that asset, because you've already got it outlined its your will. So you're providing for your loved ones in the event of your death. And again, what that does is provide peace of mind knowing that your family is going to be taken care of even after you're gone.

Producer:
Yeah. And that not only provides peace of mind for you, it provides peace of mind for all of them as well. And really, you I can I can say just from unfortunately, personal experience just over the last little over a year now, you know, when my dad passed, it was, you know, knowing that he had taken the the initiative to do a lot of preplanning. It was just such a just a just a burden lifted off of our shoulders that we didn't have to worry about so many things. We could we could literally we could mourn him, spend time with each other and focus on that, which was all what was really important at that time. And remembering him rather than having to worry about something else because that's the last thing you want after you pass, is to have your family with all these worries and all this stress over all of the things that you leave behind.

Mike Zaino:
Unfortunately, Matt, I've seen it work the opposite way, right? I've seen both friends and family members have to deal with death and not only are they having to deal with death, but they're also having to deal, unfortunately, with the business of death. And as as as grim as that sound, it's a reality. It's a grim reality that if you haven't set this stuff up prior to your demise, your family are going to not get the opportunity to grieve you. They're not going to get that opportunity. They're going to they might even curse you for putting them in that in that particular circumstance. It's just not fair. Versus your situation. And others that I've encountered where they've just had their ducks in a row, everything was set up and there was no anxiety and they could just go through that process, that grief process at their own speed and deal with the reality of you not being there anymore. Yeah.

Producer:
And it is a, you know, a reality that has to be dealt with. And you don't want any of those distractions and other burdens that people are gonna inevitably have to deal with. And you don't you want to take off as much as you can from them as the point here. And you mentioned two things in the first part of this little section, Mike and those were wills and trusts. Talk a little bit more about those, if you will, and maybe the differences between them, just to kind of clear that up for our listeners.

Mike Zaino:
Absolutely. Okay. So a will and a trust. They're both legal documents that are used to manage a person's assets after their death, but they do serve different purposes and they have some key differences. Matt A will is a legal document that will outline how a person's assets should be divvied up okay upon their death. It will also outline who should be the executor of their estate, the person that's in charge of making sure that this goes to this person, that goes to that person, and who should receive each and any or all of your assets. That's a will. A trust, on the other hand, is an arrangement that allows a person to transfer all of their assets over to one trustee during their lifetime. And then the trustee is then responsible for managing those assets and then distributing those assets to the beneficiaries who are named in the trust. Okay. So our two big tips when it comes to smart legacy planning, at a minimum, have a will. Okay. Do not leave your legacy in the hands of the courts, in the hands of the state. Okay. Make your last will very clear, very concise so your family does not have to bear any additional burden after you pass away. That's number one. Number two, I'm going to suggest that you have a Roth IRA. Funds within a Roth IRA will actually pass to your beneficiaries tax free. Okay. Tax free. And any growth within the Roth from when you started it. That is tax free as well. Okay. Don't let your family inherit a ticking tax time bomb that explodes on them when you leave them money. That's not fair to them either.

Producer:
Yeah, that's right. I mean, you know, make sure that you leave them what you want to leave them. Makes sure also that the tax consequences of that are taken into account. And a Roth, you know, is really something to consider here. Talk more about that. I mean, we've got you know, because often when people say and I'll say this first part often here on the show is that when people think of retirement planning, they don't think of X, Y or Z. And one of those things that we repeat on the show is they don't think of life insurance because they don't thinking of something like an indexed universal life policy, which can be used to provide income in retirement. Right? So another side of that is that when I think of end of life planning, I. Necessarily think of a Roth IRA, but there are some benefits to that. And putting those two things together.

Mike Zaino:
Yeah, there are definitely benefits of the Roth IRA for end of life planning purposes. Okay. All a Roth IRA is is a type of IRA where you're funding it and paying the taxes on the seed money, the money that goes in. You're not having to pay the taxes on the harvest of the entire farm, so to speak. Okay. So the those main benefits are going to be tax free withdrawals in in in your lifetime. Okay. And your the people that you leave it to. So the withdrawals from the Roth IRA both in retirement and to the people that you leave it to beyond your life are tax free, which means they don't have to pay any of the tax on the money that they pull out. There are no age limitations. Excuse me? No age limits. Okay. For contributions. So unlike a traditional IRA, there is no age limit for how much you can put in there as long as you have earned income. As long as I don't care if if you're working one day a week or a few hours a week, you can contribute to a Roth IRA. You just can't contribute more than you actually earn. Okay. Another great benefit. There are no required minimum distributions, unlike a traditional IRA, where they force you, the IRS will force you even if you don't need the money to start taking minimum distributions. Now, at age 73, thanks to the Secure Act that went into play on January 1st of this year and eventually will be phased to age 75 by the year 2033, you no longer have to take required minimum distributions.

Mike Zaino:
Okay. If you have your money in a Roth so you get the potential for compound growth because it can grow faster because now the interest that you're earning is also growing interest. It's like interest on interest and it it's going to grow much faster than a traditional IRA or a taxable investment account. It offers flexibility. You can withdraw your contributions to a Roth IRA at any time without penalty, although you're still going to owe taxes and penalties on the earnings if you withdraw them before age 59.5. Right. And here's a big one. If you are eligible, you can actually do what is known as a Roth conversion. You can convert a portion of your traditional IRA over to a Roth IRA, which can be beneficial if you expect your tax rate to be higher in retirement. And the way you do this is you look at where you're falling within the IRS tax table. And if you've got room in your table before it elevates you to the next bracket, then what you might consider doing is converting just enough to where it keeps you just under that next tax threshold over into the Roth and pay that same tax as you're paying for the rest of your money so that that money grows tax free for the rest of its life.

Mike Zaino:
So, you know, again, for all of our listeners, we provide full retirement plan consultations. Okay? These are comprehensive consultations. They're at no cost to our listeners. There's never an obligation if you listen to this show, what you hear and what you see, if you watch me on YouTube and Facebook is what you get. Okay, you're only going to work with me if it's better for you. I will help analyze your financial situation. I will discover exactly how much you might be paying in fees unnecessarily will help you cut those unnecessary costs out of IRAs, 401 K's or any other types of retirement vehicles that you may have. If you have annuities, we can closely examine them because if they're the old school type, trust me, there are much, much better vehicles today than there were 20 years ago. We can also help analyze and plan for Social Security planning because a lot of folks don't know that that planning can can actually cause you to earn more money in retirement. If you have a plan to to enact Medicare. There's very, very confusing parts of Medicare, Part A, part B, part C, part D, Medicare Advantage, Medicare supplements. If you're confused as to what you should do, when you should do it, how you should do it, give me a call. The bottom line, Matt, is we will help compare our listeners current situations to what is possible if they work with me.

Producer:
Yeah, and it's a great thing to have that perspective that outside look at all of those different aspects of your financial life that you just mentioned there. Mike And to get that free consultation, of course, folks go to the website MoneyMattersWithMike.com. That's all one word. MoneyMattersWithMike.com or call 704 560 1573. Well, just a little over a minute here. Left, Mike. We've just about timed this whole thing out perfectly for the show this week. But we wanted to before we before we go here, give a little bit of a preview of what's coming up next week. You know, back by back by popular demand. Next time on the show, we're going to be playing some right or wrong. We haven't done that in a while. And it's everyone's favorite financial game show here where you get guess you don't get a prize, you just get the pride of getting the question right if that were to happen. And we'll also talk about some retirement income sources. I can help you understand more about where your income is going to come from during retirement and how it's going to be taxed. And also, if you've got questions, folks, about that, about retirement income, specifically about Social Security, that's one of those things that can be can be pretty confusing to folks. That's just one of the things that Mike really gets asked about all the time. And he would love to help you out with it. And you can give him a call for that help. (704) 560-1573. Once again, is that number. Well, Mike, I have really enjoyed it Once again, Sarah, I have learned a lot, as I always do whenever we sit down together. I appreciate it and I know our listeners do as well. The phone lines I know are lighting up at this very moment. I just just imagine a big bank of phones behind me here, like the old telephones, and that's what's happening right this second. But seriously, thank you so much for all the knowledge that you bring and the information for our listeners. Really do appreciate it. We'll see you next time.

Mike Zaino:
Matt, Thank you for what you do. Without you, the show doesn't get produced right. And more importantly, most importantly, thank you to each and every single one of the listeners who tune in every single Saturday morning in the Charlotte metro area at 9 a.m.. Thank you to all the folks who listen to us on podcast. Without you guys, we don't have a show. So if anybody you know can benefit from the show, please share it with them. I hope you have an amazing 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 are the property of their 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.

Producer:
So you know where you are now and where you want to be in retirement. So how do you plan to get there? I'm Matt McClure with the Retirement.Radio Network Powered by AmeriLife.

Big Jack:
Do you have any other questions for me? Counselor?

Producer:
There are a lot of questions to ask yourself when you start your retirement plan. Questions like When should I retire? How much money will I need? When should I claim Social Security? What about health care costs and taxes? In retirement, this complicated puzzle means you're probably going to need some help coming up with a smart retirement plan.

Ford Stokes:
If you want to retire successfully, you really need to plan early. You know, Inspector, you expect and get prepared. Putting a plan in place now while you're still working is a great idea.

Producer:
Ford Stokes is founder and president of Active Wealth Management. Once you find a financial professional you want to work with, they can help you answer all the questions you may have.

Ford Stokes:
Back to what Warren Buffett said. If you don't find a way to make money while you sleep, you're going to work until you die. So we need to do everything we can to figure out a way to make money while we're sleeping. We talk about this human capital versus actual capital. When you're young, you have a lot of human capital, you've got a lot of left, a lot of room left, a lot of capital left in your career. Right. But at the same time, a lot of people that are older let's say you're 65, 70 years old, you don't have a lot of human capital left, but you should have a lot of capital that is making money while you sleep. And if you don't, then you didn't make the right decisions.

Producer:
There are also some retirement costs you may not have considered yet. Long term care, for example. Did you know it's not covered by Medicare? What about home renovations? If you decide to stay in your home instead of moving into a facility? Your home might need some updates to ensure you're safe and comfortable. And those are just the tip of the iceberg. So do you have a fiduciary financial advisor or professional to help you wade through the complicated retirement planning process? That is a key question to consider. If you want to make the most of your hard earned money with a 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 9AM right here on FM 100.1 and AM 1340. Schedule a free no obligation consultation now at MoneyMattersWithMike.com. You're listening to Money Matters with Mike to schedule your free No obligation consultation visit MoneyMattersWithMike.com.

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