12.30.22: Audio automatically transcribed by Sonix

12.30.22: 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 live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. It is the last Saturday of 2022, and this show is designed to arm you with information and give you plenty of meat on the bone that you can chew on each and every single week in today's show is no different. We are going to talk about some critical updates that you need to be aware of in order to take advantage before December 31st. 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?

Producer:
I am doing great. Great, great. Mike. I had a great holiday and I hope you did as well.

Mike Zaino:
I did, man. I tell you, Christmastime is one of my favorite times of the year. It's a time to kind of reflect on the year, spend time with family, spend time with friends. And then, of course, there's there's gifts. Who doesn't who doesn't like getting and giving gifts, right?

Producer:
That's right. That's the one thing that I had to tell my family this year is, is no more socks. I just I couldn't do it like I have. So like, I literally have a drawer that is overflowing with socks and in the past years I had needed them and now I just just have way too many. So. So I got no socks this year, but I'm sure we'll talk more about what we actually did get coming up later on in this.

Mike Zaino:
Let's do the quintessential dad gift, right? Socks and ties.

Producer:
Yeah, Socks and a bad necktie. Right. The one that went out of style about 20 years ago. That'd be my love. But no, I'm glad that you had a great holiday as well. And we got a great show, I think, for everybody today as we look forward to the new year, which is I mean, it's not even around the corner anymore. It's like we're rounding the corner and staring it in the face at this point. And we got a lot a lot coming up about that. Some end-of-the-year reminders for folks that they really need to get on before the end of the year because only a few hours left, really. So we've got that. We've got a great Meat on the Bone segment today having to do with Christmas. I love the way that you're going to kind of spin that into a Christmassy kind of a thing, even a few days here after Christmas. But and some reminders for the end of the year. As I say, the way to rebalance your investments in 2023, a lot of great meaty stuff, as we like to say coming up here on the show. Mike. So I think we're going to have some fun and educate the folks and really that's what it's all about. It's about all about education.

Mike Zaino:
I agree with you. I mean, hopefully people that listen to this show get something out of it each and every single week. That's my main goal is just to help as many people as I possibly can on the show. It's information and you do with that information what you want to do with it. And hopefully you're heeding the information and you're taking action in making yourself or creating for yourself a much better and more solid plan for retirement. So, you know, I always say that a rising tide lifts all boats. And if you're somebody out there that could use some help, well, that's what I'm here for. So you can reach out to me, whether it's on the phone at 704 560 1573. That's my direct cell phone. Millions of people have access to my telephone number, and I don't mind. I answer the phone when I'm able and when I can't. If you leave me a message, I'll get back to you as soon as I'm able. Most of the time that's within 24 hours, definitely within 48, unless I'm out of the country. And then you can go to MoneyMattersWithMike.com. That is the website for the show. You can listen to us on podcast and reach out to me that way on on our contact page, whether it's on The MoneyMattersWithMike.com show or website rather, or whether it's on any of the other socials that we have. You can find us on Facebook. Money Matters with Mike. You can find us on other platforms. Youtube again, Money matters with Mike. Bottom line is, if you know anybody that could use some financial awareness education, then have them listen to the show.

Producer:
Yeah, that's right. Don't don't keep it as a secret just for yourself. And if you want to share some knowledge with your your family or friends, a great thing to do is actually go to the website MoneyMattersWithMike.com and you can find all of the. Episodes of the show there. Send him a link to the to the episode that you want them to hear. If you hear or see a topic that we've discussed here on the show that you think might be helpful, it might be useful to them do that because I think that'll be that'll be great. Give them the. We're here, just as we say, a few days after the Christmas holiday. But, you know, give them the gift of some financial knowledge as we head to the new year. I think that's going to be a great thing for a lot of folks going into 2023.

Mike Zaino:
I think a lot of people's New Year's resolutions as they're starting to make them right. Matt, They center around being better with money. That and going to the gym. And it's funny because, you know, I like to go to the gym fairly regularly. I've slacked off a little bit since Thanksgiving. I actually tweaked my knee a little and I got to give it time to rest. You know, the time that March rolls in, you see a lot of people, a lot less people at the gym. And so when it comes to finance and when it comes to retirement, that is something that you never want to give up on. It is never too early, too late or too often to plan for a successful retirement. And again, that's what I'm here for. Let me help you if any of what I'm saying resonates and reach out through one of the many different ways we. You have to get in contact with me.

Producer:
Yeah. And there are there are many. And as you say, the phone number is no secret. 704 560 1573. So I'm curious, Mike, here, as we move on into the show and kind of the meat of the show, the meat on the bone is coming up, but we've got the meat of the show as we as we continue here. What kind of a two fold question? Number one, are there any great Christmas traditions that you celebrated just last week that you really, really enjoy with your family? And I'll ask part two of the question in a minute. So any favorite Christmas traditions for you?

Mike Zaino:
You know, for us, our Christmas traditions are just getting together with family, right. And spending that quality time and life gets in the way throughout the year. And if you've got relatives that don't live in your house and maybe they're out of town or in my case, they're out of state, they live in Georgia, it's difficult and we don't get to see them as often or for as long as we as we want to. So, you know, I had the opportunity to have Christmas Eve here, Christmas Day here. And my wife went to town in the kitchen. And I know I've already gained £5 in the weeks, not over from eating leftovers. So then I got an opportunity on Christmas night. Late that night I went down to Atlanta and I got to see my mom and then I spent Monday with my youngest brother, Tuesday with the middle brother. And then he and I went back to Mom's house and then I drove back Wednesday. So it's been a hectic week as far as travel, but it's definitely been worth it because, you know, the tradition, like I said, of just getting together with loved ones and being able to spend that time with them. Time is a gift that you just don't have enough of to give. And like, I think if I could just spend time with my dad right, he's no longer with us. You know, you've mentioned your grandfather and heck, my grandparents. You know, we would give anything to spend more time with those people. And unfortunately, it's a luxury that as we age, we don't have as much of anymore. And you realize how precious that time is. And so that's probably the biggest thing that now I look at as a tradition is just the ability to spend time with our loved ones.

Producer:
Yeah, time is such an important thing. And you know, in in the financial world, we sort of think a lot about people's time horizon and the time that they have to invest for their future and the time that they have to live to to, to, you know, draw down on that income and all of that and spend in retirement and everything. And so we think about those those two kind of things as far as time goes. But just spending that time with loved ones. Yeah, I think that's that's so, so important.

Mike Zaino:
And one invaluable gift that you can give. It really.

Producer:
Is. And you know what? It doesn't cost you a thing doesn't cost you a penny to that that time with people. It just costs you the time. But it's definitely well worth every second that you spend with your with your loved ones around the holidays especially. And one of the things that that in my family has always been huge has been music we just loved. Like my my great grandparents actually ran a school of music in my hometown long before I was born. Didn't know them, but I've heard stories all my life about them running a school. So it's been something that's been huge in my family. And so that's the second part of my question. Any favorite Christmas or holiday songs that you enjoy?

Mike Zaino:
Yes. I mean, I come from a my wife's side is a very, very musical family. And my side, we like music. We're not the best at it. We some of us can sing, some of us can't. But, you know, my wife, she's the director of music at the Palisades Episcopal School in South Charlotte. So, yeah, music is is definitely a part of our family. I think it all kicks off for me with it's the most wonderful time of the year and I start singing that. Literally in August when football season, specifically college football season starts. And it's my song, like the day that my team start is going to kick off at whatever time they're kicking off. I come down singing It's the most wonderful time of the year and it resonates all the way through, hopefully the national championship and a victory there. So it's the most wonderful time of the year for me is probably my favorite Christmas tune.

Producer:
And there are so many great ones, you know, I mean, a lot of them were like fifties and sixties, even back to the forties, you know, where there were a lot of these great songs recorded by like people like Perry Como and and Bing Crosby and all those who recorded those classics, you know?

Mike Zaino:
But it's hard to not like the classics. Like, I love them, right? I mean, especially when you say Bing Crosby for sure. Yeah.

Producer:
Oh, yeah. I mean, just just absolute classics there like White Christmas that that original version of that song. I would say, though, a couple of my favorites is probably Rockin Around the Christmas Tree. I just love that song, but I also love you're a mean one, Mr. Grinch. And I think it's because the Grinch was as a kid that was like one of my favorite, if not still my favorite, like Christmas, like cartoons to watch. And I still I still love it. I still watch it every year. And it wasn't until I was a little older that I that I knew that it was not so. The only person who's credited with a voice acting credit in the in the Grinch is Boris Karloff, who is really famous for doing a bunch of, you know, like vampires. And so he did the speaking voice of the Grinch. Right? And so he's the only one who's credited with any sort of voice role. But it was actually the person who sang the song You're a mean one, Mr. Grinch. Uncredited was a man by the name of Thurl Ravenscroft. And if you do not recognize that name, I'm not surprised. But you would definitely recognize the voice if you heard him say they're great. He was also the voice of Tony the Tiger. Yeah.

Mike Zaino:
Wow.

Producer:
How about that little trivia? If you're ever on, you know, like Who Wants to be a millionaire if that even still comes on or, you know, whatever show. And that's the million dollar question. Now, you know.

Mike Zaino:
I think that stopped airing about 20 years ago. It might be on syndication, though.

Producer:
There is the daytime version that did air. But I think that I think it went away.

Mike Zaino:
I don't watch daytime TV. I don't have time. I'm too busy dealing with helping people with their financial futures.

Producer:
That's right. Me, me either anymore. But I used to and when I did watch it in the daytime, it still came on. And. But that was several years ago now. Yeah. So actually that and that is sort of the perfect segway, actually. My believe it or not, into our quote.

Mike Zaino:
Of the week. Oh, okay.

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

Producer:
That's right. Our Quote of the Week This time around, Mike comes from Dr. Seuss himself and actually from How the Grinch Stole Christmas. And it is this, quote, Maybe Christmas he thought doesn't come from a store. Maybe Christmas perhaps means a little bit more. I love.

Mike Zaino:
That. I love that, too. And that's, you know, the Grinch was was somebody who started off as the villain but ended up being a hero. Right. And I just talked about how spending time with family is really the most precious thing that I receive any more at at Christmas time.

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

Mike Zaino:
Today's Meat on the Bone segment, though, is kind of the flip side of that. And it's really to beware of the Grinch, the Grinch that doesn't flip his attitude and come back and be the hero, but the Grinch who stays the villain. And the way you do that is by avoiding scams. During this holiday season, many of most of us are going to spend the holiday season relaxing with friends, with family. You've got to be aware of what we call bad actors. These are ill intentioned people, whether they're hacktivists, people that will try to hack into your your info. And they use the holidays to take advantage of people's good spirits. Scammers frequently target pre-retirees and retirees, the elderly sometimes pretending that they're from Social Security or from another government agency. And you really have to be aware of these people, especially now some of these fraudsters are calling to verify information about the 2023 cost of living adjustment for people who get Social Security benefits. Remember, this adjustment is automatic and a beneficiary or recipient of that does not need to verify anything. Social Security won't ask you to provide information or money to get your benefit increase. The Social Security Administration will never ask you for personal information via phone or via text or via email. They will only send you mail. All right. And you can actually tell that it is from the Social Security Administration. Scammers will often pressure you to act immediately, and so you need to be very suspicious of those unsolicited phone calls, those unsolicited emails or mailings from people or companies or other entities that you don't know. All right. Personally, if you receive a questionable contact, whether it's call, text, email, either hang up, don't respond, and better yet, report it. You can report it to the Office of the Inspector General for the Social Security Administration. And their email is OIG dot s a dot gov with a forward slash and then report. That's OIG, dot ssa dot gov forward slash report and let's do our best to curb curtail the success rate of these Grinches during the holidays.

Producer:
Great great advice there and it's something to watch out for year round but as you say especially during the holiday season and I think and now going into the new year when I think sort of any time there's some something big going on in society in the news in our daily lives, that affects a whole bunch of people, they'll the scammers will try to take advantage of that. Right. I mean, any time there's some sort of tragedy and people are donating to charities and all that kind of thing, you might get these unsolicited text messages that say donate to so and so cause. But if you click that link, then it captures your information and does all the bad things that you just mentioned. And so, yeah, you've got to watch out and you've got to be careful only do those things that you know are from verified websites or contact, you know, if somebody contacts you unsolicited, actually reach out to the real organization they claim to be with and verify that.

Mike Zaino:
Yeah. And it really does make me sick that they prey on the elderly. If you think about it, most people who are in their late sixties, seventies, eighties and beyond, they're most are not technologically savvy because the technology just wasn't around for them to learn early on in life. Like, you know, kids these days that grow up with devices in their hands, right? If I need help, I go ask my daughter. Okay. And on on anything. When it comes to technology. And I jokingly tell people that I graduated college the year before the Internet was invented. Right. But these people, they prey on these folks who don't necessarily have that know-how or way no ways to verify whether or not the information is is true.

Producer:
I am right there with you because it's just when you prey on on some of the most vulnerable in society. It just is not it's not a good thing. It's sickening. It really is. Spend your time doing something productive for society and for yourself, not something that's going to be harmful to others in that kind of way. Just bottom line there. Well, actually, not long ago, Mike actually put together a story on this sort of this very topic with some other scams for people to watch out for. Let's take a listen to that. Just a couple of minutes here and we'll continue on with some important end of year reminders as we've only got a few hours left in 2020 to some important end of year reminders coming up here in just a second. But first, here's some more online scams that you need to watch out for.

Producer:
No matter what you do, there's always someone looking to separate you from your hard earned and hard saved cash. I'm Matt McClure with a Retirement dot Radio Network powered by Amerilife.

Producer:
Danger Will Robinson. Danger. Online scams are nothing new. Things like fake Craigslist ads or emails from a Nigerian prince offering you his fortune in exchange for a couple thousand of your own money have been around for years. But the scams do keep changing as scammers tactics evolve. Aarp recently released its list of red hot scams in 2022. One of the newest came in at the top of the list, the Google Voice scam. Here's how it works. If you're selling something online and include your phone number for people to reach out, a bad actor could call and say they want to make sure you aren't a scammer. They'll then tell you that you're about to receive a Google verification code. What's really happening is they're opening up a Google Voice account in your name so they can pose as you while cheating others out of their money. Aarp says to avoid this one, don't ever give out verification codes to anyone. Another one on the list involves fake jobs. Scammers will get your information from an online resume and contact you with a fake job offer. Then they'll ask for payment for things like supposed home office setup fees. This one similar to income scams that make big promises for easy money but don't deliver.

Rhonda Perkins:
Here's the reality There's no such thing as a guaranteed way to make money. If you see an offer like that, it's a scam, period. The FTC has sued and shut down lots of companies that have made fake claims like that.

Producer:
Rhonda Perkins is an attorney with the Federal Trade Commission.

Rhonda Perkins:
So before you invest in a program that says you'll make a lot of money, stop, take your time and do your research. Be skeptical about success stories and testimonials. Also, check with your state attorney general's office.

Producer:
Also on the AAP list, rental assistance scams, Fake Amazon Employees, Cryptocurrency ATM Payments, Imposters offering to settle your tax debt, fake emails that look like they're from a friend asking for a gift card payment and demands through money transfer apps like Venmo or Cash App. With any of these, it's essential that you verify the identity of the person you're speaking to. Never give your personal information to anyone you don't know, and if necessary, report it to the authorities. So are you prepared to protect your money from online scams? That's a key question to consider as you try to grow your wealth for retirement. With a Retirement dot Radio Network powered by amerilife, I'm Matt McClure. So there you have it, Mike. Some more important scams to watch out for. And really, you know, as we say, those people who prey on those who are the most vulnerable in society just really need to get a life.

Mike Zaino:
Quite honestly, they're getting better. That's the scary part. I mean, they are the emails that have actual logos, like they are stealing the logos from financial institutions and utilizing them in their emails to make it look official. You just have to if there's any bit of doubt, like Matt said earlier, go ahead and take down the information from them, but then contact the institution yourself. Do your own due diligence before you give them any of your personal financial information or money. Okay? Just don't do it, folks. Don't do it.

Producer:
Yeah, absolutely. And as I said in the beginning of that piece, it's like the days of the emails from the Nigerian prince asking for money are kind of gone in lieu of these more advanced kind of scams. And you're right, they do adapt and change over the years. So, yeah, you've got got to be careful. Got to watch out.

Mike Zaino:
Definitely so. That's right.

Producer:
Well, all right. So we are just about to head into 2023 here in just a few hours, as we say. And so we need to share some important end of the year reminders for 2022. Now, this one, I think that the first one is good news for folks because they really, you know, are getting if you're on Social Security, if you're if you're drawing on Social Security, you're getting a raise coming up in 2023.

Mike Zaino:
You are getting a raise. In fact, you're getting an 8.7% raise, which is the largest increase that anybody who's on Social Security can remember. And when you couple that with the 5.9% cost. Of living adjustment from last year. You've gotten a two year increase of almost 15%. So that is huge. And that, I guess, is mad as the government's way of of recognizing that because of this significant inflationary period that we've been in over the past couple of years, they had to do something. So we want to help protect our listeners from inflation as well. By protecting and growing their portfolios.

Producer:
And that's really the goal here. You know, to to hedge against future inflation because, you know, I've thought about this often these past few years now in that going at the end of 2019, say we're right here at the new year, you know, and going into 2023, we'll say three years ago when we were going into 2020, who could have known what 2020 would hold? You know, I mean, it would just going to be our lives within three months going to be completely upended. Right. Nobody's got a crystal ball. Nobody knows what's coming. So you've got to be prepared for those unknowns in life. And, you know, because that, you know, COVID and everything else, the supply chain issues that were resulted a result of that and other issues economically that we're still trying to sort of dig ourselves out from under. Now, that was all something that we couldn't have seen coming. So you've got to just be prepared for kind of whatever.

Mike Zaino:
Yeah, you definitely want to be prepared. I mean, 2019 was awesome. I mean, the stock market was screaming in a good way, skyrocketing, if you will. You know, the the inflation period was was next to nothing. Interest rates were around 2% or lower. I mean, it's like what? Contrast that with now and things that things look a little bit grim. But you know what if you are have a plan together. If you're a planner and you have one together and you have contingency plans to be able to respond to periods of time like we're currently in, as opposed to having to scuttle around and react to them, There's a big difference between being able to respond and having to react, right? So that's why it's very, very important. Another one of those things that's coming up and you only have a few hours are required minimum distributions. Matt Now a lot of you out there know what RMDs are, but there are some of you out there who may have turned 72 this year and are not really familiar with what required minimum distributions are an RMD is the distribution that the IRS requires that you take from an employer based retirement plan. So if you have an IRA or an old 401 K or a403b, that money is sitting there tax deferred, meaning you've never paid the taxes on it the year in which you turn 72.

Mike Zaino:
All right. That is a change since 2020. It used to be April 1st following the year that you turned 70 and one half. So if you turned 70 and one half before the age 72 Act was passed, then you're still having to take your RMDs at that by April 1st. But now it is the year in which you turn 72. So well, you only have a few more hours before the end of the year and there is a huge penalty. It's the biggest penalty that the IRA or IRS levels on you, and that's 50% as in five zero, not 15, but five zero 50% is the penalty on any amount that you don't take. And the exception for the time as far as by the end of the year that you turn 72 is if you did turn 72 this year, you technically have until April 1st of 2023 to take your RMD and pay taxes on it. But if you do wait, then you're just going to have to pay two RMDs next year. So it's always best just to pay it. The year that you turn 72, you know, another thing, Matt, is the fact that we can actually help folks manage their distributions in an efficient way because we don't want you being hit with a 50% excise tax on the amount that was not distributed as required.

Mike Zaino:
Again, that is the largest the largest penalty in the IRS's arsenal. So if you want to say goodbye to RMDs and kick the IRS out of your retirement plan, we can actually help you do what is called a Roth conversion tax free withdrawals. Roth IRA contributions, for an example, are made with after tax dollars. So all of the withdrawals, including earnings, are tax free in retirement. You may want to if you have room in your tax bracket, take a little bit out of your traditional IRA or 401 K or 403b so that it doesn't elevate you into the next highest tax bracket, but then convert that into. To Roth dollars that you'll never have to pay taxes on again, and that will grow tax free for the rest of its life. These types of things also offer you flexibility because unlike a traditional IRA, you're not required to take required minimum distributions ever because you've already paid the tax on the seed, not on the harvest. And it also gives you tax diversity in that Roth conversions provides you the ability to diversify your tax liabilities, allowing you to have access to both tax-free money and taxable money. Different sources in retirement.

Producer:
Yeah, it really is something that folks should consider because as you say, I mean, you know, you've got that potential 50% excise tax on the amount that you don't take in your RMD. If you don't take it in a year that you're required to. You also have potential if you do that at age 72, if you delay until April and the year that the year after you turn 72, if you delay until April, you take to required minimum distributions that year that could potentially, if you're kind of on the cusp, throw you into a higher tax bracket and then you'll be paying a higher tax rate on anything above a certain dollar amount. So it could be some tax disadvantages there in in a couple of ways. So this Roth IRA conversion seems to be a great way for folks to, you know, make sure that, of course, Uncle Sam gets his fair share, but gets a lesser amount from you potentially because you're paying, as you say, those taxes now rather than in the future. And as we say all the time and tax is pretty sure they're going to go up in the future.

Mike Zaino:
Right. So, I mean, if you have an old 401 K or an old 403 B or an old annuity or an old IRA, if you have them and you're not quite sure what to do or how to go about making sure your you're not going to be penalized, just give me a call. I'll walk you through the steps of what you can do in order to minimize your tax burden. I mean, obviously, taxes stink, All right? Nobody likes paying taxes. Tax avoidance is perfectly legal or minimization, I should say. Tax evasion is not right. We don't want to go there. So if there are legal ways for you to pay less money and keep more of your hard earned money, then I'm all for that. And I can show you different ways on on how to do that. So if you have any of those aforementioned products, the 401 K, the 403. B, the the IRA or annuities, give me a call and I'll help you review them.

Producer:
Yeah. And that number, folks, is 704 560 1573. You can also go to the website MoneyMattersWithMike.com to reach out. Well, as we move on here Mike, we do have we have got I've got a late Christmas present for you. It's a bonus quote of the week here. Nice. Yeah. Yeah. I wrapped.

Mike Zaino:
Christmas.

Producer:
Gifts. I wrapped it nicely for you. Put, put a nice bow on top. And here we'll open it for all of our listeners. It's our bonus quote of the week is from P.J. O'Rourke, who was a libertarian, an satirist and a fellow at the Cato Institute as well. He actually passed away earlier in 2022, back in February.

Mike Zaino:
All right.

Producer:
Yeah, definitely so. But you know what? He had some great things to say and some words of insight here about the end of the year. And he said that Christmas begins about the 1st of December with an office party and ends when you finally realize what you spent around April 15th of the next year. Truer words never spoken.

Mike Zaino:
I tell you, I don't even wait till April 15th to the next year. Heck, I get that dadgum credit card statement. I'm like, Holy cow, we did what? Right? So kind of a bonus Meat on the Bone segment would be people pay down your credit cards. Please don't carry a big balance on those pieces of plastic, especially the ones with the high percentage rates. No one has ever become rich off of airline miles or hotel points. And I know there's a lot of people out there that like to use their credit cards so that they get the miles and they get the points. That's great if you can pay it off at the end of the month. But I know that Christmas time especially, that might take you until February or March to be able to pay off, make it a goal, to pay off that balance each and every single month. You definitely want to minimize all of those debts. And starting by attacking those cards that have the highest interest rates first, because sadly, most credit cards have double digit appears of anywhere from 12 to 30% depending on the agreement that you signed with them. So pay down your credit cards.

Producer:
Yeah, Great, great advice there because, you know, we've talked about it's been a good long while on the show, but we talked about compounding interest before and how that can either work for you or work against you. This is definitely a case where it can oh, boy, it cannot work against you because, you know, you've got that that for lack of a better term, the the interest that if you don't pay off that. Balance every month. That interest then becomes part of the principal or becomes part of your credit card balance really is the more accurate way to say it. But then the next month you get interest charged on that total amount again. So that compounds each and every month. And so it can just really wreak havoc on your finances.

Mike Zaino:
It does. And most of the time when you get your credit card statements, they're going to show you the total balance, the statement balance and the minimum balance. And you should always pay more than your minimum balance. But the goal should be to pay the statement balance off, because if you pay the statement balance, that's the amount that you charge within that last 30 day period. Guess what? There's no interest. You're only going to pay interest on what you carried over, if anything. So it should be everybody's goal to pay off the statement balance each and every single month and never carry a total balance for long periods of time.

Producer:
Yeah. And, you know, I mean, we talk about a lot about spending and a lot about investing, of course, on on the show here and and, you know, people planning for their futures. 2022 has been a rough year for people's finances. You know, I mean, one of the big things we've talked about inflation that is really wreaked havoc on on all of our finances. The markets have been up and down and up and down and down, down, down, down, down, and then up a little bit and then down some more. So it's been like not a fun roller coaster. I'm not a roller coaster person anyway, but it's not been a fun roller coaster ride even for those who like the roller coasters. So as we close out 2022, what are some things that people might be needing to consider to look at heading into 2023 to try and and recover, to try and take a step forward in their financial life in the New Year?

Mike Zaino:
Yeah, I mean, there are lots of questions that need to be answered. And you guys out there listening, you may have some of these questions like when should you and your spouse claim Social Security benefits if you haven't already? Do you know the best way to maximize those benefits? You may have questions like what is your budget and tax plan for retirement? Do you expect it to change in the future? Are you accounting for inflation and worse, future tax increases? Right? How should you best manage your account balance? Is that have those required minimum distributions that we just spoke about a little bit earlier? And should you be somebody who is going to consider whether or not to convert some of your savings into a Roth IRA? If you own real estate, what should you do with it? Do you have a plan maybe to downsize? You had a four bedroom or five bedroom house and now the kids are gone. They're out of the house and it's just you guys, do you want to get into a a single story? You know, do you have a rental income plan to account for? Maybe you plan on just keeping the house that you're in, moving in another and renting out the property that you're in? There's all types of questions, right? We can keep going. What is your plan for Medicare? Do you have any potential long term care needs? Right. What legacy plan would you like for your children or your grandchildren? The biggest way to recover from 2022 and to start preparing for a great 2023 is for you to schedule a complimentary retirement consultation with us today. Don't wait. Start your year off with confidence and if you need answers to these questions or any other retirement related questions, I am happy to help provide some clarity and a plan that you can be confident in.

Producer:
MoneyMatterswithMike.com is the website for you to go and request a free consultation. As we say, it's absolutely free of any charge and any obligation that once again, MoneyMattersWithMike.com, or you can call 704 560 1573. And that's a great way yeah. To to build confidence in your financial life heading into the new year because I know I can I can use a confidence boost in my finances and it's like there are so many different aspects to financial life, to planning for the future and all of that. There are so many things I feel like that people are either unaware of or or under under educated about that kind of thing and to no fault of their own. I'm not saying that. It's just things that we don't necessarily learn in school, which we'll talk about a little bit, things that we don't necessarily learn from our parents. Maybe our parents weren't the greatest with money or whatever the situation might be. There are a lot of things that that people don't know, what they don't know. And so if you if there are things that you don't know, you need to find out those things because they could potentially be something that could either a, as we talked about a minute ago, save you a bunch of money on your tax bill headed into retirement and or now. Or they could be something that could provide you with a tax free income in retirement. You know, there are many, many different options for planning for your future short term and long term.

Mike Zaino:
Right. And I think you said a mouthful when you said that there are things that people know, right, Matt? There are things that that, you know, you don't know. Like, I know that if I needed to get open heart surgery, I wouldn't go to my brother, who's a plumber, right? He'd kill me. I would go to. I know that. I don't know. And I know that he doesn't know how to perform open heart surgery. But a lot of people don't realize that there are things that they didn't even know, that they didn't know. And so when it comes to money and when it comes to finance and retirement and making sure that you're able to retire confidently and with peace of mind, it is paramount that you speak with somebody who does this every single day for a living and is happy to help provide you with both guidance and clarity in order to give you the peace of mind and confidence in retirement that you deserve.

Producer:
Yeah, And speaking of those things, you know that people know that they don't know or don't know that they don't know. Something that people may have forgotten about is kind of where I'm going here in that there's such a thing as an orphaned 401 K or a stray stray 401 K, It's just kind of out there running around and you don't know, you know, you've you don't have a tracking device on it. It doesn't have its collar and its ID, it's not wearing that. So where is it? What's it doing to talk to the folks about a stray 401 K or an orphaned 401 K? First off, what do we mean by that?

Mike Zaino:
Well, that's bottom line. If you've left a job at any point in your life and you were able to participate in their employer sponsored plan, whether it was a 401 K or whether it was a403b, or if you were a federal employee, it was the Thrift Savings plan. So if you left that job and you didn't do anything with your retirement account, well, that's what we're talking about when we say the stray or the orphaned retirement account, whichever one you may be. And I'm just going to ask you a very simple question. Right? If you if you had a house that you lived in for a period of time and you had been paying money on a vehicle that you owned and then you decided to move, whether it was across town or across the country, doesn't really matter. You wouldn't leave that vehicle that you'd been paying on for all those years parked in the old garage at your old house that you don't live in anymore. Right. The same thing holds true with your money. In fact, I would argue that it's more important to not leave your money parked in the garage at the old employer, where you live or where you worked. Why? They're not looking out for it like you would look out for it. So you should never leave your money in an old retirement account. You could be losing a lot of money in fees if you take your money with you when you leave, you have much more control over your investments.

Mike Zaino:
You have more options, especially if you do what's called a rollover. You can actually roll over those old orphaned accounts into an IRA. The I stands for individual, something that you control that is either a direct or an indirect roller. But if you are going to do an indirect rollover where they send you the money first, you only have 60 days in which to take that money and transfer it and roll it over into another IRA. If if you don't do it within those 60 days, you're going to be subject to income tax because they're going to treat it as a distribution. So please don't do that. And then you could incur what's called an early withdrawal penalty if you're not at least age 59 and one half. So if you're interested at all in doing whether it's a direct rollover, which is institution to institution or which is preferable over an indirect rollover, where they send you the money in your name, you put it in your bank, and then you have to turn around within a 60 day window and do something with it in order to not be taxed. Get in contact with me and let me walk you through each and all, every one of the steps that needs to be made so that your I's are dotted, your T's are crossed, and you're not going to either get it counted as a distribution and incur a huge tax penalty or an early withdrawal penalty.

Producer:
Yeah, very, very important there. You might not see it coming and then all of a sudden, there it is, you get slapped with this penalty and you're like, wait a minute, what did I do? Well, you had that. You had this straight for one K hanging around and he didn't pay any attention to it. It's so funny, too, because, you know, we're talking about the stray for one K is the orphaned 401. Case. And I several months ago I just had this this idea that, oh my God, did I did I move my four one? Kate over from my old job into my new. So I went in to a Fidelity was the website where the accounts live for old, old and new. And so and so I went in and I looked at a previous job I had. I worked for one company that was then bought out by another about three or four years into my my working there. And the old company, as it as it stood, had a pension plan. The new company had a 401 K, So I had thankfully taken my taking care of the 401 K, I had, you know, moved that over. Great. Grand, wonderful. But but I realized it's so funny. I looked and I was like, Oh yeah, there was a pension plan at the old company under the old name and old structure. And so when I retire, I will be getting a whopping like $130 a month from that old company.

Mike Zaino:
Hey, aren't 30 bucks is better than nothing, man.

Producer:
This is very true.

Mike Zaino:
Especially since, you know, pension plans have pretty much gone the way of the dodo. Those are those were defined benefit plans that were replaced by defined contribution plans where you as the employee has to contribute in order to to have any degree of retirement. Whereas the defined benefit plan that was a benefit of working for that company, they gave you a benefit of a pension. So I mean, about the only institution or that does that anymore for pensions that I'm absolutely aware of that I know without a doubt is the United States government, if you work for any of their agencies, they still do have a pension plan. It's a lot less than it would it used to be because they've changed systems, but they give one for sure.

Producer:
Yeah, it's kind of like finding a unicorn these days when if you're able to find a pension plan. But as we say a lot here, that's impossible to create your own personal pension with something like a fixed indexed annuity or some other options that are out there and will, of course talk about all of that on on future shows. But as we continue talking about 401 K so I'll talk about this. What's an in service distribution? People might have maybe heard that term and thought, okay, I don't really know what sounds complicated, don't really know what it is.

Mike Zaino:
So I mean the whole idea behind for one KS and employer sponsored plans in general, again, all the different types that there are is that you're putting in this money on a tax deferred basis and you can't touch the money until you're 59 and one half without incurring a penalty and taxes and all that kind of stuff. But many plans, not all but many plans have what's known as an in service distribution, where you can take some of the money out of your 401 K or TSP or 403 B and roll it over into an IRA for an example. All right. So, so you have access to place that money in a different vehicle, if you will, Matt, so that you can take control of your assets so that you can save more of your hard earned money. I know a lot of people, especially this year we've talked about it. The markets were dismal. They they just sucked. There's no other way to put it. I don't think anybody made money in the market this year. And if you did count your lucky stars. Right. But we want to help you dispel the myth that you can't touch the money that you have saved in your 401.

Mike Zaino:
K or other retirement accounts. If your plan administrator and it'll be in the documents when you first opened up allows what is known as an in service distribution. Most people can remain with their company, stay in their plan, continue to take advantage of any match that their employer may have, but yet still take money out and put it into an IRA that you have a little bit more control, maybe some more flexibility, potentially some more horsepower. So if you are nearing what we have kind of coined as the retirement red zone. Right. And those are you that are within five years of retirement or you have retired within the last five years, you might consider taking 40 to 50% of those 401 K dollars and then protecting them from market risk and the loss that people have experienced in 2022. We have ways to help you do that, that have zero fees. I'll say that again, zero fees. And the solutions that we offer can provide you with an additional income stream that you can never outlive.

Producer:
And boy, doesn't that sound good to folks? MoneyMattersWithMike.com is the website folks there to go and reach out to Mike Zaino MoneyMattersWithMike.com or call 704 560 1573. So we've been talking a lot about financial education. We do that a lot because it's sort of the point of the show and and to you know be a stopgap and fill the void that's there in. The education system in this country because there is little to no financial education in in schools. Actually explored that a little bit a while back and there are states that are changing that. And and I know that that that's great news. Not all the states I think we're getting to be about half of the states so far but more states are doing this where they require financial education of some sort to be able to graduate. I know, Mike, that you would say that's at least a move in the right direction.

Mike Zaino:
It is a move in the right direction because, again, a rising tide lifts all boats. And if we can get to children and if you're in school, whether it's grade school, middle school, high school, college, graduate school, doctoral level, the more you learn typically, the more you earn. Right? So education is key. And when it comes time to learn about finances, there's no substitute for a basic financial education.

Producer:
Yeah, and it's something that I wish I had in, like, you know, high school and college especially, because you've got to teach them early. You learn the earlier you learn those skills, the better. The more that that kind of can become part of your life and just be habit as you move on. But here is a look at some states that are looking to change that to to sort of turn the tide of the financial education system or lack thereof in this country. We'll continue looking at some other states that might be good for retirees coming up right after this. But this is just a couple of minutes here on improving financial education in America. They say you don't know what you don't know, but a growing number of states are trying to fix that when it comes to finances. I'm Matt McClure with the Retirement dot Radio Network. Powered by a life in high school, students are often required to take advanced math courses like algebra and trigonometry. But for years, the basics of budgeting, bank accounts and savings have been neglected in the classroom. But that seems to be quickly changing. 21 states now require at least some form of financial education before students graduate high school. One of those states is Nevada Governor Steve Sisolak recently told CNBC.

Mike Zaino:
A great percentage, I think 50 some odd percent of Americans can't cover $1,000 emergency costs if it comes up without borrowing the money. So it tells us that we need to invest more. We have invested $2.5 million from the state into these programs and to make sure that it gets out, we address access and equity so that everybody gets this education. It's not just reserved for the upper class.

Producer:
Mississippi Governor Tate Reeves also told CNBC he knows firsthand how valuable a financial education can be. He graduated with a degree in economics and worked in the financial arena before running for office, which is one.

Mike Zaino:
Of the reasons that I'm so passionate about trying to encourage my fellow Mississippians and really my fellow Americans to to to make sure that financial literacy is available to as many people as possible. Because I really do think it can help Americans have a better life.

Producer:
In New Jersey, Governor Phil Murphy says programs there start as early as middle school.

Mike Zaino:
There's a temptation that comes with a lot of different things that you all of a sudden think you can afford and you don't realize the consequences on the back end, whether it's physical items, whether it's meme stocks or whatever it might be. And so getting kids at the earliest age as possible, we think is critical.

Producer:
How well are the programs working? Well, it could be too early to tell. Money rates. Dotcom found mixed results in a recent survey, but its authors note that financial education itself is not a quick fix, so with more time results could improve. So how educated are you when it comes to your personal finances and planning for retirement? And are you going to pass down that knowledge to future generations? Those are key questions to consider as our financial lives become more complicated With the Retirement dot Radio Network powered by a married life, I'm Matt McClure. So those are about three states there that we sort of talked about and heard from the governors. Of those three states, actually from, you know, up in New Jersey, also Mississippi, we heard from and I believe Maryland was in there as well. So we got a lot of great information. And the kids are going to be getting a lot of great information about finances in those three states as they look to improve. And about a couple of dozen states across the country are doing that. So, as we say, might move in the right direction.

Mike Zaino:
It is I know North Carolina has instituted it's South Carolina is hopefully going to do that sooner than later. And the goal, obviously, is for all 50 states to enact some form of financial education. And I would challenge our school systems and our leadership in Congress to to make it mandatory at all levels, start teaching it in grade school at basic fundamental levels by teaching people, I guess they do with math. But let's let's start teaching them basic principles of accounting debits and credits, maybe in middle school and then taking that a step further. Are in high school and getting into the use of credit and compound interest and really showing these kids how this stuff works. I mean, because imagine if everybody out there in listener land had that knowledge, you guys would probably have a lot more money in your retirement accounts now. So it is a great step in the right direction. And I know that a lot of folks talk about, man, if I if I had $1,000,000, there was a Barenaked Ladies songs. If I had $1,000,000 right back in that was real popular back in the ninety's and one of the things Matt that you did in your research is you came up with this with this article that was per CNBC that said the most and least affordable states for retirees and I thought that was hugely interesting to see how far $1,000,000 would go. And as I'm sure most of you know, if you're out west or if you're up in the Northeast, $1,000,000 is not going to go very far, right?

Producer:
Matt Yeah, it's true. There were some surprises here, but those that was kind of the big takeaway. That was not a surprise at all. At the top of the list for being the least affordable state was actually Hawaii, where, you know, things are expensive out there.

Mike Zaino:
Yeah, everything has to be imported to Hawaii, right?

Producer:
Exactly. He's got to pay for that. Everything's more expensive, right? And so, yeah. So that $1 million, according to this research, would last you 10.9 years. That's it.

Mike Zaino:
That's not a very long time. Now, contrast that with the Carolinas. Both North and South Carolina actually fell into the same, you know, the length of time that $1,000,000 would go and that would go somewhere between 21 to 23 years. So if you retire in your sixties, that's going to take you into your eighties. And if your people live into their nineties or beyond, that might not be enough money for you, right? So that's why it's important to have a plan in place to be able to respond to different things that that happen in the economy. And the one that I thought was most surprising for me because I grew up in Georgia, I came to the Carolinas here in Fort Mill, what, 27 years ago on January 1st. I literally moved packed up my stuff on the 1st of January and came January 1st, 1996. So in a few hours it'll be my 27th anniversary in the Charlotte metro area in Georgia, we're talking about 23 plus years. So it actually lasts longer in Georgia than it does in Carolina. And Matt, we were kind of talking about that and trying to figure out why. And I guess that might be because we have a larger coastline.

Producer:
Yeah, right. So expensive property along the coast, you know, and people tend to retire closer to the coastline if that's a big attraction for a particular state. So, yeah, I mean, that makes sense to me anyway. But we were also talking I would want a cabin in the mountains myself. That's just me.

Mike Zaino:
We would. And the place where your money goes the farthest was was Mississippi. So if you want to move to Mississippi, more power to you. I'm going to stay right here in Carolina.

Producer:
I mean, you know what? I would not rule out Mississippi if I could if I could live along the Gulf Coast again with with the coastline there thing going on there. But, yeah, you know, like Gulfport, Biloxi area, it wouldn't be too bad. I, of course, then would probably go spend my million dollars at the casino or something like that.

Mike Zaino:
Or on repairs from hurricanes.

Producer:
That's true, too. Hopefully they'll avoid some of those over the next few decades. My goodness. Well, Mike, that actually just about brings us to the end of the show here. It has flown by as we approach this new year of 2023. I thank you for everything that you have done for the listeners, for for myself, for everybody here at the show over the past year, almost, you know, actually be, what, a little over six months or so since we've been on the air here with the show. And so I think we've gotten just to where we have sort of grown by leaps and bounds and bring great information to the people. And so I appreciate everything that you do and just wish you a great and happy New Year and all the best going forward.

Mike Zaino:
Matt, I thank you. Because without without you producing this show and doing what you do, we don't exist. I thank our listeners more than anything though, because without them, this show definitely doesn't exist. And like you said, we have grown our listenership by leaps and bounds. So that tells me what we're doing seems to be working because more people are tuning in, more people or telling people to tune in and sharing the the money matters with Mike time slot that we moved from noon to 9:00 AM now on Saturdays, which is awesome. And even our podcast. So if you don't catch it live, you can catch it on podcast wherever you listen to your podcasts. That listenership is growing as well. And I just thank the listenership for for listening. And to me just babble about money and finances and life insurance and annuities over and over and over and over and over again. But again, meat on the bone segments, if I can give you something from a financial perspective that you can digest and put into practical application, it's just going to put you in a better situation. So know Happy holidays, Happy New Year and let's make 2023 the best year yet. 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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