Risk, Reward & Retirement: How to Plan for Long-Term Success

2.7.25: Audio automatically transcribed by Sonix

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

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Mike Zeno.

Speaker3:
Welcome to Money Matters with Mike, the show where we dive in to the strategies, insights, and tools you need to secure a confident and stress free financial future. I'm Mike Zeno, and my mission is to help you protect your nest egg, outsmart retirement risks, and live the life you've worked so hard to achieve. Whether you're nearing retirement or already enjoying it, we're here to guide you every step of the way. Because peace of mind starts with a solid plan. On today's show, we're going to talk about creating a financial plan that you can count on. And we'll discuss some smart risk, smart, safe and smart tax strategies that you can apply. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matthew, how are you doing today, sir?

Speaker4:
I'm doing great, Mike. I hope you are as well on, uh, this this busy, busy week. It's, uh, it's been a busy 2025 so far, huh?

Speaker3:
It has been an incredibly busy 2025, especially for me. I work with a lot of federal employees, so, uh, I have been extremely busy helping those folks, uh, make a choice that they had only eight days to make.

Speaker4:
Wow. Talk about, uh, you never know what's going to happen. This is one of those situations, and, uh. Yeah, but but thankfully, you know, they have a resource like Mike Zeno to reach out to and and to be helped in that unexpected journey that they're on. Um, but, you know, folks, if you are listening to the show and this is your very first time joining us for Money Matters with Mike, welcome and thank you for doing just that. We really do appreciate it. Whether you're listening to us on the radio or on the podcast. Um, you can listen to all the previous episodes on the podcast feed. By the way, just wherever you listen to podcasts, you just subscribe to us right there. Leave us a nice, uh, rating. Five stars or a thumbs up or whatever they might be on that particular app, and we would really appreciate that. Also, check out some videos on the YouTube channel as well there. Going back. Uh oh gosh, Mike, over two years now with the with the videos, we got plenty of content there. And uh, you can also reach out on the socials. Mike is all over the Facebook page. Just search for Money Matters with Mike and don't hesitate to reach out with your questions because Mike is is here to help you. I mean, that's what you do with people each and every day. Mike.

Speaker3:
That is. And whether you reach out through the web or you reach out by picking up a phone, or even if you want to shoot a text, the guys, the number that I put out there is my cell phone, so I'm more than happy to answer any of the questions that you have because, you know, we don't want your golden years to be tarnished by financial stress, right? You need to be prepared. You need to have a solid plan. So don't delay. Pick up the phone and give us a call. (704) 560-1573 or visit the web. Just do whatever you have to do to schedule your complimentary and no obligation consultation.

Speaker4:
That is right and money matters with Mike comm is the name of the website Money Matters with mike.com. All right. So coming up on today's show here, Mike you did a great job at the beginning of course setting us up for it. But we're going to talk about some smart tax strategies coming up in just a bit. Also smart safe investing and smart risk investing got a list of different risks that you face as you're planning for retirement. Kind of how to deal with those. But first, let's get some inspiration for our conversations. It's our quote of the week.

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker4:
An author and motivational speaker, Brian Tracy, has this week's quotes and it is this. The best way to avoid a problem is to solve it ahead of time. I love that. You know you solve it ahead of time. You don't have to worry about it.

Speaker3:
You know, it reminds me of my days back in the United States Army, right? We used to have a saying that proper prior planning prevents pitifully poor performance. I've. I've mentioned that several times on our show, but specifically, whenever we would go on a mission, we would start at the objective and do backwards planning, and we would plan for every single possible contingency so that we knew how to respond to anything Thing that was thrown our way on that mission. So in effect, we solved it ahead of time, right? And you can do that as well with your financial planning and your retirement planning. If you think of where you want to be in retirement, and then that's your objective and then backwards plan to where it is and what it is that you have to do in order to achieve your goal.

Speaker4:
That is great and wonderful advice there from your own personal experience. I absolutely love it. And yeah, you know, we sort of talk about how this kind of first step in this whole journey of retirement planning specifically, is getting that vision in place. Right. You got to know where you're going before you can get there, essentially. So and then if you backwards engineer the thing accounting for contingencies that may come up along the way, hey, that's, uh, that's even better. And you'll do as Brian Tracy said. Uh, avoid the problem by solving it ahead of time. Absolutely love that. All right. So let's get into kind of the meat of the show here today. And we're going to talk about risk. First of all. But we say smart risk around here because you know, you don't want to jump out of a plane without a parachute. Right. So that that would not be very smart. So we got your parachutes here that we're going to talk about today. Some careful planning for savvy retirees. And, um, you know, Mike, it really is an investment strategy that's designed to maximize returns while minimizing risk, right?

Speaker3:
Yes. And, you know, talking about jumping out of airplanes, right. As one who has jumped multiple times out of perfectly good airplanes, uh, I was very happy to have that parachute deploy and never had to deploy a reserve. But the fact is, having a reserve gives you another degree of safety, right? It's proper prior planning just in case something goes wrong. Well, smart risk investing is based on the concept that all investments carry at least some amount of risk, and the only way to reduce the overall risk is to diversify. So diversifying means investing in as many different asset classes as you can, whether they're stocks, real estate, commodities and other financial instruments. So a lot of people think they're diversified because they have this company stock and that company stock and another company stock and yet another company stock. And yes, they're diversified with companies, but they're in one asset class across the board. So investors need to consider their individual needs and goals, as well as their risk tolerance for all the various types of investments that they might pursue.

Speaker4:
Absolutely right. And, you know, people might, um, as we go through kind of this list here of these different risks, people might think, oh, I didn't even realize that that was something that I needed to concern myself with or. Oh, I didn't realize that this risk was that actual thing. I may have heard this term before, but you know, so let's go through and kind of define these different risks that people may face, starting with the kind of the biggie, the one that everybody thinks about in the beginning and that is market risk.

Speaker3:
Yeah, we've seen our share of that this past week. Right. There was a little volatility that, uh, reared its ugly head. But your portfolio is going to be affected by changes in the market. So there's a couple of different types of risk being systematic and unsystematic risk. They can cause drastic changes in your investment. And so being prepared for volatility and uncertainty in the market by practicing tactical asset allocation just makes sense.

Speaker4:
It really does. And that is a great reason for you to have some protection in your investment portfolio. I know that, um, you know, Mike Zeno is a is one of the ones who I would trust with that aspect of things, making sure that everything is properly balanced in my financial life. And if you know that sounds like something that you need help with, go to Money Matters with mike.com and reach out via the contact page. Money matters with mike.com. All right. Something else Mike that's been in the in the news. Uh, not only the past few weeks or anything, but the past months and years is interest rates.

Speaker3:
Yeah. Interest rates affect a lot, right? Changes in the rates can have significant effect on American families as well as the economy as a whole. Right. When the interest rate, the Treasury rates are high, that means the cost of borrowing money is higher. When they are low, then the cost of borrowing money is is much lower. So you have to pay attention to how the interest rates are set and how that might affect you and what you plan on doing in the future, especially if you have some big purchases ahead.

Speaker4:
Yeah. And something of course, very closely related to that interest rate risk is the risk of inflation. I mean, we've seen that of course rear its ugly head. And then interest rates come up pretty drastically to try and fight inflation. That's sort of what the Federal Reserve will do is when when inflation jumps really, really high, they'll bring up interest rates to try and tamp down demand so that then they can, you know, just really bring down that inflation rate.

Speaker3:
Right. And that affects every single one of our listeners as well as every consumer in the United States, because the spending power that you have just does not go as far when the price of goods and services is inflated. As inflation continues to rise, your spending power continues to decrease. So when planning for retirement, it is crucial to consider inflation and how it might affect your retirement accounts. And make sure that you plan for that while making your future budgets.

Speaker4:
Yeah. And then something else that's kind of, uh, another side of that same coin. How many sides this coin got? Um, it's public policy. I mean, it really is. You know, it's kind of like we're talking about monetary policy a moment ago with interest rates. Right? But then you've got public policy kind of like basically legislative risk, essentially, that we talk about a lot. You don't know what they're going to do, especially in Washington. That was one of the things that sent the markets kind of crazy earlier this week.

Speaker3:
Absolutely right. Public policy affects everything from taxes to retirement accounts, uh, to contribution limits and rules. Right? Retirees should pay attention to policies that are related to their pension plans, Social security benefits, health care coverage, and obviously be aware of the latest tax law changes and how to use them to your advantage.

Speaker4:
Yeah. You got to pay attention to those. And, you know, it's really. Something's changing all the time with taxes. They say the only thing constant is change, right?

Speaker3:
Yeah, absolutely.

Speaker4:
And so of course, you know, we're talking about change there. And so the things do change over time. And but you don't know when those changes are going to happen. My crystal ball is broken as I often say. And so timing is really, really an important thing to keep in mind.

Speaker3:
Absolutely. And because you can't predict when the markets are going to be going, you know, berserk as far as in a positive way. And when they're going to drop your retirement might look a little bit different. If you retire during a recession, then it would in a more favorable market. So by having a formal retirement plan, you can be prepared for whatever happens.

Speaker4:
Yeah, that's really key. And then of course liquidity. You know, you've got to have money that you've got access to in other words.

Speaker3:
Yeah I mean you want a plan that allows sufficient access to your savings and your funds. Um, just in case anything happens, you don't have to then, you know, sell your house, which takes a lot more time. You want access to quick cash. And that was what we referred to when we say liquidity.

Speaker4:
Absolutely. And then, of course, something tied very closely to the timing thing that we just talked about a moment ago is sequence of returns risk. Yeah.

Speaker6:
The way I like to explain.

Speaker3:
This and it's so, so important is imagine you just retired in 2007 and then the market just absolutely tanked in 2008, oh nine and ten before it started coming back. Your money would never last as long as somebody who retired in 2010 and then saw the longest bull run in the market. So the sequence of returns risk is one that absolutely must be paid attention to.

Speaker4:
Yeah, 100%. And then of course, longevity risk is a thing, especially now, you know, like people are living longer than ever before.

Speaker3:
Yeah. Advancements in technology, medications, medical equipment. Right. Make sure that you're planning for your money to outlive you and not the other way around. You don't want to have to worry about your finances in retirement or becoming financially strapped, and therefore a burden to your children.

Speaker4:
Yeah, and going hand in hand with that. You know, the longer you live, the more health expenses you're going to have.

Speaker3:
Yeah. Prepare for those medical costs in retirement by having a Medicare plan in place that covers you and your spouse if you're married throughout your lives, simply because medical costs are one of the largest expenses for American retirees.

Speaker4:
Yeah. And speaking of a spouse, you know, you know, something that people don't really like to, to discuss because it's not a happy topic. But the loss of a spouse is another risk that, you know, we all face.

Speaker3:
Matt, I deal with this a lot. We have a lot of widows, a lot of widowers that, you know, call me and say, hey, Matt or Mike. I've just lost my my, uh, spouse. And so when your spouse passes away, it can have a significant effect on your income, especially when it comes to Social Security, because when that spouse passes away, so does one of your Social Security income checks, right? It goes away and the survivor gets to keep the greater of the two. So be being prepared for the loss of income. Um, is is crucial in ensuring that your savings are enough, that you are able to get through and not necessarily thrive, but just make sure that you have enough to cover the loss of that income.

Speaker4:
Right. And folks, if you would like to get some more information about how you can get a plan in place that's going to account for all of these risks that we just mentioned, then I would suggest you get in touch with Mister Mike Zeno. Um, he is uh, he is standing by. Operators are standing by right now and by operators, I mean Mike Zeno himself. Because, you know, there's no weird phone tree and robot voices to talk to and all that stuff. Uh, you just call him at (700) 456-0157 3704560 1573 or go online to Money Matters with mike.com. Reach out this week for a complimentary retirement and financial consultation with Mike Zeno. And yeah, when we say complimentary, we mean it. There's no cost and there is no obligation there. All right. So we've covered the smart risk portion of our conversation here today Mike. And so now let's go into smart safe investing for retirees. It's kind of like the other side of that coin right? I mean it's you've got the risk and then you've got to balance it with safety.

Speaker3:
Absolutely. And you know, sometimes the argument is that you cannot make money if you're safe. Think of savings accounts in a bank. They're real safe. But the interest pays you squat. Right. So smart safe investing is an investment strategy designed to generate the highest possible return while keeping risk to a minimum. And so one of the things that we love in this instance, especially for pre-retirees and retirees, is actually an insurance product that's called a fixed indexed annuity, or FIA for short, because it's able to provide you with a guaranteed stream of income for your retirement. And they're absolutely seen as an alternative to traditional bonds and provide a way for investors to protect their retirement savings from market volatility because they only participate in the gains of the market. But you're 100% protected from any downside.

Speaker4:
Yeah. Absolutely right. I mean, that's, you know, kind of the big benefit there is that protection from market volatility as as you just said, I mean, you know, because it's tied to an index's performance but not directly invested in it. So anytime you have those big, you know, like 2000, 2000, eight, 2000, nine, 2010, just like you were talking about when everybody else was tearing their hair out, you know, people with a product like this would have just been sitting pretty and saying, well, I haven't lost anything. I don't know what you're talking about. Um, but there are.

Speaker6:
Also.

Speaker3:
Definitely an attractive option for investors who are looking for a steady and reliable income stream and no risk of loss. We don't even have to go back that far. We can go back 2020 2022. And this week, right?

Speaker4:
It's very true.

Speaker3:
My clients lost the penny.

Speaker4:
Right. See there you go. And that that is one of the advantages, one of the benefits here of an FIA a fixed indexed annuity. Let's talk about a couple more here. Mike. We got tax deferred growth as well. We've also got that lifetime income stream that you talked about.

Speaker6:
Yeah.

Speaker3:
So I mean if you're funding a fixed indexed annuity with maybe an IRA or a 401 K, or if you're a federal employee, a TSP, that means in the traditional sense you've not paid taxes on that. It is tax deferred. So when you roll those vehicles over into a fixed indexed annuity, you also get that tax deferred growth. That means that any earnings on the annuity are not subject to taxes until the annuity is withdrawn. Most people choose to withdraw them as a lifetime income stream. That's another guaranteed check every single month that you can count on, right? You don't have to worry about breaking the budget. It allows you to enjoy your discretionary money with an income that you can count on and never outlive.

Speaker4:
That is absolutely right. I mean that, you know, several several benefits there. And those are really just a few of them that we could mention. So, folks, you know, if you want to get more information on perhaps a product like that, uh, as kind of a strategy that will keep you, you know, invested in a way where you will see growth, market like growth, but without the market losses at the same time, uh, then go online money matters with mike.com or call one (700) 456-0157 three. And there are a lot of reasons why you should meet with a financial professional like Mr. Mike Zeno. And, uh, Mike, walk us through several reasons here why you think people should should reach out if they're in a particular situation or a particular spot in life?

Speaker3:
Sure. I mean, number one, if you don't have a formal, uh, retirement plan, you should probably meet with a financial professional. If you don't understand the risk that you are taking within your investments, you might want to consider consulting a professional. And if you don't know how much you are paying in fees within your investments, you should absolutely consult a professional who can point those out. Or if you don't, maybe understand how to manage risk on your own, especially as you get older. If you've got money all over the place and you want to consolidate and simplify, you should probably meet with a financial professional. And a lot of people have the question, you know, does it make sense for me to pay my house off or not? Well, we have the answers to those questions. And that's why you want to speak with a financial professional. Matt.

Speaker4:
Right. And, you know, I mean, it really is all of those reasons and more, you know, but it's personalized for that individual. I mean, this is not is not a one size fits all thing we're talking about. So when you hear, you know, maybe people on the radio saying, oh, well, you know, this, this is exactly what you should do, and this is perfect for everybody and all that. No, it has to do with what your individual situation is and what is best for you.

Speaker3:
Yeah. You know, a prime example of that, Matt, is, is, uh, you've been hearing a lot about gold lately and why you might want to add gold to your portfolio. In fact, I had an article published in Forbes magazine this past week on Monday, February 3rd that says why you might reconsider adding gold and whether or not that is a fool's gold move. So if my listeners want to go to forbes.com and check out Mike Zeno's stuff, that's where you can find it.

Speaker4:
Absolutely. But hitting the big time there on Forbes with, uh, Mike Zeno. So yeah, absolutely. Go to Forbes.com, search for Mike Zeno. And also if you want to reach out once again for that initial consultation, which is free of any cost or obligation, and get a personalized retirement plan just for you. Go to Money Matters with Mike. Dot com. All right. So we've talked about smart risk. We've talked about smart safe. Let's get to some smart tax strategies for retirees here Mike. And there are a lot of different considerations that go into planning over the long term for what your tax situation is going to be in retirement.

Speaker3:
Yeah, a lot of folks don't understand that different investment accounts are actually taxed differently. And by understanding how those accounts are actually taxed, you can ensure that your money is working, how you need it to and when you need it to.

Speaker4:
Yeah. And if you don't understand those concepts there, Mike, you know people's retirement nest egg might actually be 10 to 37% smaller than they think right.

Speaker3:
Yes. Unfortunately it's not a laughing matter, although it does make me chuckle because, you know, it's so easy to find solutions by just consulting with somebody who has the knowledge, right? Too often we meet with folks, uh, and learn that almost all of their retirement savings is in a deferred tax account, like a 401 K or a 403 B or a 457, or an IRA or a thrift savings plan. And those folks really are, you know, lighting the wick on a ticking time bomb, right? So they allow you to defer paying taxes on your contributions until they're withdrawn, because the government would much rather tax you on the harvest, okay. Versus just the bag of seed. So don't forget to account for the taxes that you have not yet paid, Uncle Sam. The IRS is not a good partner to have in your retirement.

Speaker4:
Yeah. You know, there may be some partners that you would want to have for your retirement years. The IRS, uh, not one of them. And so if people want to maybe divest the IRS from their retirement accounts. Um, there actually is a way to do that that will cover right here. Now, I mean, this is one of really only two truly tax free investments available to Americans today, right?

Speaker3:
Absolutely. I am a huge fan of the Roth type of account, whether that's a Roth IRA or a Roth 401 K if your employer sponsored plan allows that. So the Roth is a traditional type of account that allows you to contribute after tax dollars to an account and then the money within that account. Since you've already paid the taxes on it, it grows tax free for life. That means you're paying the tax on the seed and not on the harvest. In any future, tax increases should not affect this portion of your portfolio.

Speaker4:
Yeah, I mean, that is it's music to the ears of a lot of folks, especially when you are looking at the taxes you might be paying in retirement and thinking about those accounts that are going to be tax deferred. So when you make those withdrawals, they're going to be taxed. But not so with a Roth IRA. And I think that's kind of like maybe the number one benefit here that we're looking at. I mean those withdrawals in retirement are tax free.

Speaker3:
Yeah not only that, but it's tax free growth forever. Right. So you know you don't have to pay the taxes on there. The money grows tax free. It passes on tax free. And then if you're eligible you can even convert your traditional IRAs into a Roth IRA which could help, uh, your tax rate go lower in retirement if you expect it to be higher. So, I mean, a lot of people incorrectly assume that their tax rate bracket is going to lower in retirement because they're not working and they don't have earned income. That may or may not be true. It's definitely true for those who have planned for it to be true. So unlike a traditional IRA with a Roth, There's no age limit for contributions. As long as you have earned income, you can contribute to a Roth IRA. There are no RMDs required. Minimum distributions. Unlike a traditional IRA, you don't have to start pulling money that you may or may not even need out just because Uncle Sam wants his cut when you turn 73, as is the current age, right? Estate planning is also beneficial because our Roth IRA assets can be passed on to your beneficiaries without the need to pay taxes on those inherited assets. So, you know, Roth is a huge, huge, huge benefit for those who actually look into it, right?

Speaker4:
Absolutely. Several different benefits there, not just the fact that those withdrawals are tax free in retirement, but several other considerations to take into account. And if you would like to take them into account, folks, if this has piqued your interest, go to Money Matters with Mike. Com or call them (700) 456-0157 573. Well, um, just, uh, less than a couple of minutes left here in the show. Mike. So talk about just before we wrap up here, what you talk about. So, so let's say somebody is listening to the show today and they want to pick up the phone and reach out. What is that sort of initial conversation like. And then where do you go from there.

Speaker3:
Well, I mean, initially we're going to have a discovery call, right? 15 minutes. Yeah. You just asked me some questions. I'm going to ask you some questions, and we'll kind of get to know each other and figure out if it makes sense for us to, you know, do business together or actually sit down in a consultation. Right. The consultation I'm going to ask you to bring some documents in and I'll review them, take a deep dive and figure out exactly where you are, where you want to go, what your vision for retirement looks like, who you're doing it with. I mean, do you want to just wait and see what the market is like when you retire? Um, or do you want to be able to ensure that you're getting to those guarantees in life and, you know, start planning on what you're going to do with your paychecks as opposed to your paychecks. If that is at all appealing to you, then pick up a phone, go to the web, do whatever you got to do. Send a carrier pigeon. Mike Zeno 704 5601573. Or Money Matters with mike.com.

Speaker4:
Smoke signals. Whatever you got to do, just get in touch with Mike Zeno. That will do it. And that'll do it for the show this week. Mike, it has come and gone quickly here, but thank you for everything you bring to the table each time we got together here, sir. And we'll talk to you next time.

Speaker3:
Matt, thank you for everything you bring to the show. But most importantly, thank you to all of our listeners, whether you're listening to us on the radio on Saturday, in whatever market you're in or whether you're anywhere across the globe listening to us on your own time on podcasts. Okay. Without you, we don't have a show. So whatever you're doing this weekend, I hope you enjoy it to its fullest extent. And as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit. Money matters with Mike. Com or pick up the phone and call 704 560 1573. That's 704 5601573. Not affiliated with the United States government. Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

Speaker7:
The.

Speaker4:
Information provided is not intended as tax or legal advice and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional.

Speaker2:
Nationwide's P10 fixed indexed annuity is designed to help protect and grow your savings to generate income you can never outlive. P10 also has an optional rider that offers an immediate 20% bonus based on your principal. Apply to your income benefit base. Call us now at 704 5601573. That's (700) 456-0157 three. Guarantees and protections referenced within are subject to the claims paying ability of Nationwide life and annuity insurance company. Nationwide P10 is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio.

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