Nobody wants the IRS to be their partner in retirement. With global economic uncertainty, rising interest rates and rising taxes, now is the time to make sure your retirement plan removes the government from your life as much as possible.

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5.12.23: Audio automatically transcribed by Sonix

5.12.23: 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 time to be alive in these United States of America. 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 today we are absolutely bringing the heat again. On today's show, we're going to talk about how Congress and the IRS are putting your golden years at risk, as well as having some steps that you can take right now to kick the government out of your retirement plan. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. I know you're looking forward to this one because, hey, nobody likes the IRS. They certainly don't want to be their partner in retirement.

Mike Zaino:
Not a great partner to have when you need every single dollar that you've worked your entire life for. That is for sure.

Producer:
Yeah, absolutely. Because, you know, the IRS has got deep pockets and they want to fill them with your money. And so that's that's how that works. But yeah, you either and we'll talk about this, I know, as we go along here, but you'll either pay them now or you'll pay them later and you'll you know, there are different ways to, to avoid paying them as much as they want, but while still paying as much as you have to. So, so, you know, it's it's all about paying what you have to without giving Uncle Sam a tip. And we don't want to do that. But anyway, so we got a lot coming up here about kicking the government out of your retirement plan on the show today. As we start off, though, I always like to remind of course, our listeners here, Mike, about the website MoneyMattersWithMike.com that's Money Matters with Mike all one word.com You can also call Mike Zaino at 704 560 1573 He always has his phone with him and unless he is recording the show or meeting with someone, meeting with a client or whatever he's going to answer, and if he doesn't answer, he will call you back. I can guarantee you that for sure. You can also find us wherever you listen to podcasts. Just search for Money Matters with Mike there. Same deal on YouTube, same deal on Facebook. Just go to either one of those and search for Money Matters with Mike.

Mike Zaino:
I just wanted to commend all of our listeners for the phenomenal job that you guys have been doing on the socials. You guys have really been, you know, going through and connecting on YouTube and subscribing to the channel. You've really been doing an excellent job commenting on posts and asking questions on Facebook. So thank you for doing that. And if you know anybody that can benefit from this information, please share us along those social platforms because that's how we can reach the most people the fastest.

Producer:
Yes, please. Do you know word of mouth is the best sort of advertisement as you as it were. And, you know, these days, sharing it on social media. Boy, you can share it with a bunch of people all at once. And so we'd appreciate that very, very much. And also, you can reach out to us and get in touch to receive a free report that we've got for you on the 23 retirement cost cutters for 2023. This is absolutely free. It's filled with a lot of great ideas for really hanging on to more of that money that you've worked so hard for. So it's yours today. You just call schedule a free consultation with Mike at MoneyMattersWithMike.com or 704 5601573. And we'll send that to you a lot of great info there and a lot of great info over this next hour as well. Mike we've got some some talk in our market update about interest rates being on the rise again, the national debt and why it matters. It's not a fun subject to talk about, but you know, people you got to you got to talk about it because you know, it's a thing. Don't count on Social Security as your retirement plan. Boy, a big, big topic there. And I know, Mike, that you often will will say plan your retirement so that Social Security is just kind of the cherry on top. It's not the thing that you rely on.

Mike Zaino:
Yeah, no doubt. I mean, you definitely want to have some meat and potatoes and not have to rely on the government. Even though you've paid in to this entire program for your entire life, you can't just sit back and hope that the government is going to have Social Security in its current state. We always say that hoping is not a strategy.

Producer:
Yeah, absolutely not. We'll also talk about five steps to master your cash flow. Some great tips there as well. And if we get to it, because we got a lot speaking of meat on the bone, we got a lot in the show today to chew on here. So we may get to this week in history coming up a little bit later on. We'll just see how the clock is treating us as we get closer to it. First, though, let's start things off as we get into the bulk of the show with the quote of the week.

Producer:
And now wholesome financial wisdom, it's time for the quote of the week.

Producer:
And those words of wisdom this time around come from Milton Friedman, influential American economist and Nobel laureate known for his advocacy for free market capitalism and limited government. He was passed away back in 2006, so he's been gone a few years. But Milton Friedman's words of wisdom live on. And here are some of them. Quote, The government's solution to the problem is usually as bad as the problem.

Mike Zaino:
You got to love old Milt snarky wit, you know, because that that kind of hits home for a lot of folks. Matt, you know, that quote suggests that when the government intervenes or tries to provide solutions to problems that actually may create unintended consequences or exacerbate the existing problem.

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

Mike Zaino:
And this happens because government is often subject to political pressures, right to bureaucratic inefficiencies and to limited information and resources, which can then turn around and lead to suboptimal decision making in the context of personal finance when the government intervenes, that can actually have a significant impact on each and every single one of your financial journeys. For examples, policies such as tax increases or changes in regulations, those can directly affect your income, your expenses and, believe it or not, your investment decisions. Okay. Similarly, when the government intervenes in the financial markets such as interest rate adjustments or stimulus packages. Sound familiar? Okay. What that can do is create short term volatility and uncertainty affecting the value of your investments and savings. Matt I wonder where I've seen that before, right? Moreover, when the government intervenes in social welfare programs, whether that be health care or education and retirement plans, it can indirectly impact and affect your financial situation. For instance, changes in health care policies can create higher costs and tougher accessibility of those health care services. While changes in retirement plans can directly affect your actual retirement savings and your benefits, Therefore, it is essential for you to be aware of these government interventions and their potential impacts on your finances and being informed and proactive about financial planning and decision making can help you navigate that complexity of government policies and regulations and help you achieve your financial goals despite external factors.

Producer:
Yeah, and you know, I mean, you know, we like to think of Washington as being, you know, it's up in Washington and it's this sort of, you know, foreign thing that doesn't necessarily have a lot of impact on our daily lives. But when you get right down to it, I mean, the they say all politics is local, you know, I mean, and it really does when they're talking about things that are of a fiscal nature or of a of a monetary nature, that kind of stuff will affect us. It's almost like, you know, the ultimate sort of trickle down effect because what happens in Washington really does trickle down to all across the country. No matter where you live, no matter who you are, no matter what political party you might belong to or support, no matter the color of your skin, whatever, all of those different ways we could define ourselves, it affects us all.

Mike Zaino:
It does. And so you have to stay informed. You have to pay attention to what is going on. Now, I know a lot of folks don't like watching the news because all it is is spewing negativity and it's doom and gloom. But, you know, if you're able to sift through the BS, right, and actually look at the things that can affect you and your finances, there are some steps that you can take to. Or mitigate, I should say, and minimize the potential impact of the government's involvement in your personal finances. And that might include diversifying your investments and your assets. Definitely making sure that you have an emergency fund taking advantage of tax advantaged type accounts that are available to you. Getting out and voting right. Actively engaging in the democratic process by voting in support of policies that align with your financial goals and values and then seeking professional advice. Okay. Financial professionals, they can provide valuable guidance on navigating government policies and regulations. And by working with somebody who knows what they're talking about and knows and stays on top of all these types of policies and regulations, you actually might be able to identify opportunities and avoid potential pitfalls in your financial journey.

Producer:
And hey, if you're looking for somebody to work with like that, I happen to know a guy. His name is Mike Zaino. He is the host of this show, Money Matters with Mike. And you can get in touch with him at MoneyMattersWithMike.com or call him at 704 5601573. That's 704 560 1573. Super important to work with someone that you can trust like and who really will get in there and dig into your particular situation, work out what's best for you.

Mike Zaino:
Yeah, 100%. I mean, you got to be very, very careful from whom you get the information because, you know, I shared something earlier today that misinformation or bad information is actually worse than ignorance. And so you have to be so, so, so very careful of who you're trusting as your source of information, for sure.

Producer:
Yeah, absolutely right. And again, a guy who's a good source of info is Mike Zaino. And once again, the website is MoneyMattersWithMike.com. And so so important to pay attention to what's going on to be informed to be someone who is invested because you know the the government is not just some, you know, thing that's in the ether somewhere that doesn't, you know, really exist and is just kind of a concept. No, it's real. And what does happen involves you. So, you know, when when people it's funny because I'll and I get it because when people say to me things like, oh, you know, well, I'm not very political or I don't I don't follow politics or whatever and all that, and I'm like, I get it because there's so much bickering and fighting back and forth and division and all this stuff. I mean, we can't get people in Congress to agree that the sky is blue on any given day, that it seems like these days. But, you know, so so I get that part of it. But at the same time, what what are you are you paying attention to what's going on policy wise? Because that's the stuff that's where the rubber meets the road.

Mike Zaino:
It really is. And these are the things that affect us not only for the short term and the term, but for the long term. So they may directly be affecting your children and your grandchildren and what they have at their disposal and what they're going to be forced to do or be restricted from doing because of who we're electing and who we're putting into office based on the platforms that they're running. And I guess what aggravates me a lot of times is that, you know, honestly, most people take the path of least resistance, right? It's like water. They're lazy. They don't even go and research the platforms when and just because somebody sounds good on a microphone or they, you know, they dress well or they're a good, you know, presenter in front of a lot of people. Very charismatic, right? Well, if you just vote for them because you think they're a good person without actually doing the research and finding out what they stand for, you know, once they're already in office, you might find that their policies go against every single thing that you believe. And that is why it is important to, you know, to do your research and to, you know, try to affect change in the way that you want to affect change.

Producer:
That's right. And, you know, I mean, we are all you know, none of us are going to agree 100% of the time. And so it's it's like, you know, you're not going to ever find someone who really aligns with every single one of the views that you have. But those that are either the most important to you or the majority of those views that you hold and the things that you think should be done, vote for that person whatever side of the spectrum you might fall on, politically speaking. And speaking of and you set this up great here a second ago, Mike is you know, it's going to affect things headed into the future and, you know, directly affecting your kids, your grandkids and and on down the line. A couple of things that could have those ripple effects. The big one we'll talk about in a second. That's the national debt. First of all, the more sort of immediate term thing is interest rates. Right? So interest rates will, you know, affect our ability to be able to purchase things, obviously. And, you know, our ability to to take part in the economy as as a whole. So talk about kind of what is happening right now with interest rates, where things stand, where things might go in the future.

Mike Zaino:
Yeah, I mean, we've already seen how far the Fed is willing to push its interest rate hikes. I mean, they've raised them multiple times last year and still this year, just this past Wednesday, they raised the rate by another quarter of a point. And it's now maybe signaling that it could pause if inflation continues to ease as expected. But what all those rate hikes have done, it's made a lot of your safe. Any options or what you would consider to be your safe money options. A little bit more attractive because as the interest rates rise, then these financial institutions are actually able to pay more on the fixed side. Which still makes me laugh because if you look at the national average in savings account and interest bearing savings account, it's still less than 1% or right around that 1%, even though the interest rates are as high as what they really are. So while that side is the good side, the bad side is that it's costing everybody more money to buy anything big, any of the big ticket purchase items like vehicles. Financing is more expensive, houses, mortgages are more expensive. I actually went to look at a piece of land, property, you know, just piece of land to get out in the country. And, you know, I'm being quoted for for land mortgage rates anywhere between 9 and 11%. And I just kind of laughed at that because I'm like, no, thanks. Yeah.

Producer:
And talking about cost prohibitive, I mean, it's a little that's a little wild. And and you were talking about I know before you've mentioned it a couple of times, Mike, you have such a low interest rate right now on your your mortgage for your home. I do anything especially significantly above it like that. I know I can tell you exactly why you're laughing because it's laughable.

Mike Zaino:
I mean, it's so you know, I've disclosed before I was able to refinance my house and I have a 2.25% interest rate. And the way I look at that is as long as I can earn more than 2.25% on my money, why would I ever want to pay my mortgage off? Right. I'll let that ride out the entire 30 years. And if they give me a, you know, a refi option at that same rate, I'm going to take it. Because, again, I know that I can make more than that on my own money.

Producer:
Yeah, absolutely. So and, you know, I mean, the interest rate environment right now can be described as historic because, you know, we had historically low interest rates for a long, long time. I mean, for several years there after the 2008 financial crisis, the Great Recession and everything, I mean, interest rates stayed at at or near zero for the better part of that decade that we found ourselves in. And we were just sort of lulled into this false sense of security that they were always going to be that low. Right. But now they have gone up and gone up and gone up here suddenly over the past year or so, year plus now. But as you say, there are investment options to take advantage of as a result. It's not all bad news. It's not all doom and gloom out there. So I want folks to know that if they want more information about some of those opportunities, they can give Mike Zaino a call. 704 5601573704560. 1573. When they do that or if they go to the website Mike MoneyMattersWithMike.com they can get a free absolutely free of any cost any obligation financial consultation. Talk to us briefly here about maybe those you know maybe there are some listeners who are tuning in for the very first time to the show. And if you are we welcome you to Money Matters with Mike. But talk Mike, if you will, about that free consultation and sort of what that process is like.

Mike Zaino:
Yeah, sure. I mean, the first phone call that we're going to have is going to be a discovery call. It's going to be me asking you a little bit about your situation and you telling me hopefully a little bit about your situation so we can determine whether or not it makes sense for us to actually dive a little bit deeper. And then in the consultation itself, we are going to dive deep. Like I just said, we're going to try to examine very, very closely your current financial situation. Right. We'll try to determine how much you're paying in fees. We'll try to determine if there are areas that you can cut some unnecessary costs out of your budget itself, out of maybe your IRAs or your 401. K's. If you are close to Social Security, there are so, so, so many ways of of claiming Social Security. And that's one of the biggest questions that I get in the consultation is, Hey, Mike, based on what you see, when do you think we should start taking Social Security? So we'll do a little bit of Social Security maximization planning. If you're of 64 or older and you're about to have a need for Medicare, we can go into Medicare planning. But, you know, bottom line is we're going to compare your situation to what's possible if you work with us. So if you are interested in taking advantage of this historic interest rate environment, get in contact with me ASAP so that I can show you some different investment options that are helping both pre-retirees and retirees build stronger income plans than ever before. Right? Remember, it is your money, and if it matters to you, it matters to me.

Producer:
Absolutely. And you can get that free consultation by going to money matters with. Mic.com clicking on the contact page there at Money Matters with mic.com or call 704 5601573. Now here Mike to the part that is the longer lasting economic factor that we're going to talk about here, and that is the national debt. Get this, folks, $31.7 trillion. That's that's trillion with a T and counting. I mean, obviously, it's it's going up. It's continuing to go up. That number is from US debt clock org which if you want to have nightmares is a great website to visit.

Mike Zaino:
Because buddy that clock spins fast doesn't it. Yes, it does. You know, Matt, we've talked about this and we haven't actually talked about this in a while. But when we start throwing out numbers in the trillions of dollars, those are just honestly, they're too big. They're unfathomable for most ordinary American citizens. I mean, certainly in the circles that I run in. Right. We're not talking about trillions of dollars. Heck, we're talking about, you know, tens and maybe thousands or, you know, some of my wealthier folks, you know, that I talk to are talking in hundreds of thousands. But, you know, very few are talking in millions, billions and trillions. So I wanted to just explain how big of a number $1 trillion is. So first off, that is the number one, followed by 12 zeros. Okay. And if you were to go back in time, 1,000,000 seconds with an M, that's only 11 days ago. All right. 1,000,000 seconds is roughly 11 days ago. If I change the M to A, B and go back in time, 1,000,000,000 seconds. That is 32 years ago. But then if I change the B to A T and go back in time, 1,000,000,000,000 seconds. Okay, Neanderthals walked the earth. We're talking 32,000 BC. Okay. It is a enormous number one that is absolutely incomprehensible to the average American mind. And so when we're talking about our national debt being $31.7 trillion, okay, there are some major reasons that we should all be concerned about the national debt. And we're going to jump into those here right now.

Producer:
Yeah, three big ones that we want to kind of point out here. The first one being economic stability and as we say, future generations, you know, the stability of our economy for not only us in the here and the now, but for those future generations, those kids, those grandkids.

Mike Zaino:
It is it is at risk, Matt. And so what the economic stability for those future generations, you know, the national debt excuse me, national debt. I wish I had a national debt. The national debt. Right. Can lead to increased interest payments, potentially requiring higher taxes or reduced public services. They're going to have to cut back because they're not going to be able to afford it. And this burden falls both on the current and future generations, which is going to ultimately limit their ability to invest in essential areas and is going to hinder economic growth down the line.

Producer:
Yeah, if you're saddled with all of that, there's no room for any sort of expansion of anything really, because it's just so you know, it's overwhelming the number, the amount of debt rather, I should say. Number two, interest payments and opportunity costs. We talk about opportunity costs on a on a personal finance level. Right. But this is more of the sort of macro economic level we're talking about, looking.

Mike Zaino:
At it on a much larger level, right? High levels of debt result in significant interest payments. And what those do is consume a substantial portion of the federal budget. Those payments divert funds from actual productive investments in critical social needs like health care and education, and that can hinder the country's ability to remain competitive, innovative and support its citizens effectively.

Producer:
Yeah, I mean, you know, you look at the the ways in which we need to remain competitive. Education is right at the top of that list because, you know, so, so many other countries, particularly Asian countries, are so much farther ahead of where our students are. Quite frankly, if you look at the numbers in this country overall, it's kind of scary and sad.

Mike Zaino:
Especially in math, which happens to be a pretty important thing when we're talking about money and debt, right? So servicing the debt that we currently have is one of the federal government's biggest expenses. Net interest payments, just the interest payments alone are estimated to be almost 400 billion with a B dollars this fiscal. A year or almost 7% of all federal outlays, and that's according to the Office of Management and Budget. So we're talking about almost $400 billion just in interest that doesn't touch the actual debt that we owe.

Producer:
Yeah, it's it's kind of wild when you think about it and look at it in that perspective. And then also thinking about number three on our list of reasons to be concerned here, the impact on future economic growth.

Mike Zaino:
Yeah. So so what happens when the debt rises right as fast as it's rising? Well, that can also lead to higher interest rates. We're seeing that right now. What that does is makes it much more difficult and much more expensive for businesses and for individuals to borrow money. And when people can't borrow money, they cannot invest in economic activity. What that does is it impacts job creation. Fewer jobs will be created. More companies will be cutting back, laying off. We're already seeing it. We're tens of thousands of people. It seems every single report that comes out are being laid off from this company or that company. Wage growth itself will falter and overall prosperity will decline.

Producer:
Yeah. And a couple of facts that we found here in our research for this segment that are pretty, you know, mind blowing and eye opening here. Yeah, I was.

Mike Zaino:
Blown away.

Producer:
Yeah, I'll let you run these down, Mike, because I don't know, It's. These are wild. Yeah.

Mike Zaino:
So the, the first fact was that interest payments on the national debt this year. All right. Those payments are expected to be $100 billion more than the government expects to spend in its entirety on veterans benefits and and services. And somebody who has sworn an oath to defend the Constitution of the United States of America, you know, that hits home right there. And all of our brothers and sisters in arms that, you know, have fought and died for the freedoms that we that we have, just thinking that just the interest payments are going to be 100 billion more than what the government is going to spend on veterans benefits. That's sad. Here is the one, Matt, that just absolutely shook me. Okay. The interest payments on the national debt this year, get this, are more than the government is going to spend on elementary and secondary education, disaster relief, agriculture, science and space programs, foreign aid, natural resources and environmental protection combined. Okay. All of that together still won't equal the amount of interest payments on the national debt that will be paid this year alone.

Producer:
Wow. And that's just a wild thing to think about. And, you know, I think a lot of people will probably, you know, sit there and say, well, you know, maybe we don't need to be spending as much on this, that or the other, you know, foreign aid or surely or natural resources, environmental protection, all these other little things. I'm like, Well, yeah, maybe not. If you look at it, go through things with a fine tooth comb, but that is a tiny portion compared to just the interest that we're paying on the national debt. So maybe that's something that should be looked at ahead of the others.

Mike Zaino:
Well, we just talked about how, you know, China and their education is so much higher than ours. Well, if we're sitting here going, one, two, three, four, five, six, seven, eight, nine, ten different programs combined, and it still doesn't equal the amount of interest we're paying on the debt. Matt, that is a huge red flag and something that needs to be addressed.

Producer:
It really is it really, you know, is an unsustainable thing in the future going forward. And we'll have to see how this all plays out with the whole debt ceiling kind of fight in Washington and exactly what will happen there. Will this some budget cuts come as a result of raising the debt ceiling. We'll just have to see as those negotiations continue. Bottom line here, though, is that it adds to uncertainty, it adds to instability, and it also adds to concerns that we have already had, like, you know, things like Social Security running out of money. Yes. I mean, it's just we're counting down the days just about until the Social Security trust fund runs out of money.

Mike Zaino:
Just in late March alone, the Social Security Board of trustees released their annual report on the financial status of the Social Security trust funds. And those funds include the old Age and Survivors Insurance, which is Oaci, as well as the Disability insurance or Dei programs. And according to that report, the combined asset reserves of both the OAS, I and d. I funds will be. Depleted. Hear me on that. Depleted by the year 2034. And if Congress does not act before then, there's only going to be enough inside of those funds to pay for roughly 70% of their scheduled benefits. Okay. And again, when we talk about incorporating Social Security into your overall financial plan, I'm not really planning on it for it to be there in the same way that it is now. In another 15 years when I'm eligible for my full retirement benefits. Okay, so the old Age and Survivors Insurance Trust Fund, which pays the Social Security, retirement and survivor benefits, is only going to be able to continue its scheduled set of benefits through the year 2033. Matt, that's ten years away.

Producer:
Yeah, I mean, you're looking at the calendar and you're right, it's ten years. It's kind of a scary proposition there. So the question then is, okay, what happens if Social Security runs out in in the US? I mean, there are a lot and we and we talk a lot about not relying on Social Security and especially not relying on it solely as your only form of retirement income. But there are a lot of people who do that, whether out of necessity or some other life circumstance perhaps. I mean, it's a it's a scary proposition if that just goes away.

Mike Zaino:
It's huge because, you know, according to a report by CBS News, all of the experts say that even if the trust fund is depleted, that the Social Security Administration will still continue to collect payroll taxes from workers and from their employees, which will allow the program to pay most of the benefits. However, if the program does run out of money, that would create a trust fund deficit so that retirees could actually receive lower Social Security payments, which would affect millions upon millions of of retirees. And those cuts would prove devastating for those older Americans, especially people with disabilities, as well as children who receive those benefits. And on the current trajectory, it seems very likely that Social Security, the trust fund itself, is going to run out of money in or around 2033. But here's where I don't think you know, here's what I don't think is going to happen. Right. It's not just going to go away because you want to talk about an economic meltdown on global scale. Okay. Just take Social Security away from all those people who have paid into it for their entire lifetime. However, legislators have proposed a kind of preventative measure, including, get this, raising the minimum retirement age to age 70. Okay. And increasing taxes. So, number one, the people that can first, you know, start drawing it at age 62 would now have to wait until age 70. And the taxes that you're going to have to pay on that on drawing those funds are going to be increased. At least this is the proposed legislation that that they're trying to pass through right now.

Producer:
Yeah. And the other part of this, too, is that, you know, we have already within Social Security, we have built in increases each year indexed to inflation. Right? So we've got you know, we're supposed to get an increase. Those Social Security beneficiaries are supposed to get an increase indexed to inflation. They call it the Cola, the cost of living adjustment each and every year, but doesn't necessarily always keep keep pace with the actual rate of inflation. And it could next year if inflation keeps going well, say going down, but keeps rising at a slower pace than it has been. If that sort of trend continues, then next year's Cola cost of living adjustment could be kind of a disappointment for seniors, especially after this past year where, you know, it was pretty darn high.

Mike Zaino:
Yeah, I mean, this past year it was 8.7%. But back in 2015, guess what? It was zero. There was no cost of living adjustment. In 2016, there was one third of 1% of an adjustment, right. Even in 2020, which was, you know, the year of Covid, the pandemic, it was 1.3%. It wasn't until 21 and 22 that we actually saw some movement based on the devastation that the pandemic caused. Right. So if you out there in listener land are interested in maximizing your Social Security benefits and strengthening the overall retirement income plan, our listeners always receive a complimentary consultation when they call me at 70456015. 73 or visit us on the web at MoneyMattersWithMike.com. We can provide you with a Social Security maximization report and even help you establish your own separate from the government, separate from the workplace personal pension plan.

Producer:
Yeah and that is music to the ears of a lot of folks because you know especially these days, people like to and I speak for myself when I say this have control over as many things as you can possibly control, given the uncertainty that's out there. And if this is one more thing that you can actually have, you know, hands on sort of control over, then take advantage of that MoneyMattersWithMike.com is the website.

Mike Zaino:
Control the controllables you can control your fingers dialing 704 5601573.

Producer:
Or typing out that website MoneyMattersWithMike.com. Okay Mike so we've talked about a lot in the show today which we we don't often do a little bit of a different tack that we have taken so far in the show talking about sort of big picture economics and national debt and Social Security and all of that and kind of the big picture there. Let's break some let's break some stuff down here now to the very personal level and talk about the importance of mastering and taking control, as we say, of your cash flow and creating a budget. I know that budget is is a four letter word that's got more than four letters in it for a lot of people, and it scares a lot of people and they just get frustrated and don't even try. But it's super, super important to know where that money is coming from and where it's going.

Mike Zaino:
It's true. Matt And before anybody out there who's listening needs to figure out where they want to go, they have to first figure out where they are. So you need to step number one is to assess your financial landscape. And what that involves is gathering all of the relevant financial information, knowing how much money you're making, knowing how much all of your expenses and your bills are, knowing what you have in total debt and knowing what you have in savings. Okay, Take note of any irregular income sources. So if you're on commission in one month, you make a lot and the next two months you may starve. Or if you're a gigging artist, okay, and you're trying to go from gig to gig to gig, any irregular income sources and any significant financial obligations you have, you have to take specific note of those and understand that your current financial standing starts with creating this household balance sheet. Okay. That was going to serve as a solid foundation for the budget itself. So a budget doesn't have to be restricting. In fact, it can be just the opposite. It can actually be liberating and free you up to know exactly how much you can afford to go out there and spend without having to worry about running out of money.

Producer:
Yeah, because if it's all just a shot in the dark, wild shot in the dark, if you don't know what you've got and if you don't know where it's going or where it's coming from, I mean, it's just all kind of like a big guessing game. And that's really no way to handle your finances. Number two then, is to once you know where you are, right, then you've got to set that goal. You've got to set clear financial goals in step two. Yeah.

Mike Zaino:
And no matter where you are in life, right. My goals when I was 20 are a lot different than my goals now at 52. Right. So you need to reflect on your short term, your medium term and your long range goals and aspirations. What is it that you want to achieve? And go further by defining specifically your financial goals, whether that is a measurable amount or a timeline by which you would like to have X, whatever your X is, and round it out with some goals that can include saving for emergencies, paying off your debts and investing for your future self. Because I promise you, if you don't do that, your future self is going to kind of look at you with disdain. Whereas if you are one who is planning and investing for the future, your future self will thank you.

Producer:
You absolutely will. And that's the thing is you're if you are, you know, saving, if you are investing, if you are paying money into an account or an investment vehicle that is for you in the future, you are literally you are paying yourself. Right. So before you even pay, you know, your mortgage, before you even pay your cell phone bill, before you pay that car payment, before anything else, pay yourself first. I mean, that's that's really kind of the bottom line of this part of the discussion, because your future self will be extremely, extremely grateful if you do that very thing.

Mike Zaino:
And then step three would be to track and categorize your expenses. And I say this a lot. You need to know where every penny that you have is going, okay? Especially if you're not good with money. And you look at the end of the year or the end of the month and you're like, I know I make this, but why is it that. I only have that right. You have to keep track of your expenses and I mean diligently for at least one month. That's the bare minimum. I like people to do it for a quarter, three months in a row, track every single penny that you spend. Categorize your expenses into broader categories, whether that's housing, whether it's transportation, whether it's groceries, entertainment. And don't forget about those little stops off at Starbucks or, you know, when you go into the gas station and you go inside and grab a Mountain Dew or a Coca Cola or, you know, God forbid, gas station sushi, um, you know, and try to identify patterns and areas where you can potentially make some adjustments, right? Because ultimately it's your willingness to make those adjustments that's going to put you in a much better position overall.

Producer:
Yeah. And you'd be surprised at how much those little things add up and how much just, you know, avoiding doing those little things, maybe doing something a little bit differently instead of going by and picking up, you know, your expensive latte every day on your way to work. Yeah. Make make coffee at home before you leave and and take it with you in, you know, some sort of reusable cup. So then you're not even buying a bunch of different cups all the time and you're, you know, you're not wasting money on that like it is those little things that really do add up to make a big difference.

Mike Zaino:
Yeah, it is. And nobody's going to get rich off of, you know, the latte effect and cutting out your Starbucks coffee. Right? But I mean, every little bit helps. And when you're doing each little bit and you're doing it across multiple different categories and you're at least aware of where you are spending your money, that's going to allow you to proceed into step four, which is allocating your income. So we've already talked about prioritizing, paying yourself first, but then you also need to prioritize those essential needs like housing, utilities, groceries. And I'm going to lump debt payments in there as well, because, you know, the most happy and successful retirees are those who are debt free. Right? Also allocate a very specific portion of your income towards your defined goals. Right? You have to be specific when you're talking about your goals and then also set aside a designated amount for discretionary spending while maintaining balance. This is the the part where I think that a lot of people struggle with, you know, because some people don't want to just work, work, work, work, work and feel like they can never reward themselves. And then other people, they start rewarding themselves. And it's kind of like an addictive drug and they get hooked on the reward. And now they're spending, spending, spending, spending, spending. And those are the people who look at the end of the month going, Hey, I know I made this, but now I only have this. Where did it go? Right. So that's why it's important to allocate your income.

Producer:
Yeah. Before you know it, you're ending your you're ending the month with no money. And that's not the way to to live. And you're just living beyond your means. And that is no way to live because that's how you get into debt and that can snowball. It's just, you know, not a not a good thing. And then step number five here, Mike, is to work your plan, whatever this plan is that you come up with, go using these steps or very similar steps here, work that plan, review it, adjust it regularly don't it's not a set it and forget it.

Mike Zaino:
Thing you took the words right out of my mouth Matt frequently check in on your budget to ensure that it still aligns with your goals and your financial circumstances. You might have gotten a raise. Okay? And if you got a raise and you're now taking that money home instead of saving it, you could be not getting as far ahead as quickly as you possibly could. Whereas if you had just allocated maybe 60% of that towards your future self and took home 40% of that total raise, so identify areas for improvement and make those necessary adjustments. And then as your life evolves, you need to adapt your budget, right? If you have just had the birth of a child, guess what? You're going to have some additional expense. My baby girl graduates college now, basically. Okay. And so so guess what? I'm getting a raise. So that is awesome. I'm embracing new opportunities right there, as well as the challenges that I'm sure everybody is going to encounter as they progress through life. So following those steps is going to help you gain a clearer understanding of your finances. It'll help you set meaningful goals. It'll help you make informed decisions in order to be able to achieve both financial stability and the pursuit of your dreams and aspirations.

Producer:
Yeah, and if you want to get started down that road toward those dreams and aspirations, go to MoneyMattersWithMike.com You can call Mike Zaino as well 704 5601573. Once again that's money. Matters with mike.com or call 704 5601573. Now we talk a lot Mike of course about this the you know the whole concept of making sure that you have more money than month not month than money. We also say, you know, you want to make sure that you have more money than than lifespan, not more lifespan than money as well. You don't want to outlive what you have in your retirement. But there are some reasons here to to to take a step back and examine things because your your nest egg actually might not be as big as you think it is. In fact, it could be 15 to 37% smaller, to be specific than you actually think.

Mike Zaino:
Think about that. Hold on. I just want to make sure I heard you right, Matt, did you just say that people's retirement nest egg might be 15 to 37% smaller than they think? Is that what you said? Because that's what I thought I heard.

Producer:
That is exactly what I said.

Mike Zaino:
Yeah. So? So. And I know where you're going with this because too often we meet people and we learn that almost all of their retirement savings is in what are known as tax deferred accounts. So what are we talking about? We're talking about those 401. K's, those 403 B's, those thrift savings plans. If they're a federal employee, 457 plans, IRAs. Right. These are tax deferred retirement plan type of accounts. And these accounts allow you to defer paying those taxes on the contributions until you actually go to take them out, because the government think of this. They give you an option. Pay me now or pay me later. Think of it like a bag of seed. They would love for you to not pay the tax just on that one bag of seed instead. Matt, they would like you to go across the street to all of that land fertilize and till up that soil and get it prepared to plant and sow the seed. And then over the next 20 to 30 to 40 years of your life, they want you to irrigate it and keep the the weeds out and keep the bugs out and just grow that harvest as big as they possibly can. Why? So that at harvest time retirement for all you people out there listening.

Mike Zaino:
All right, they don't just get to tax that original bag of seed, do they Matt No, they don't. They get to tax the entire farm. So do not forget to account for the taxes that you haven't paid your greedy Uncle Sam and the United States government. And remember that your Social Security is going to be taxed as well. And so that is why that most people's retirement nest egg is going to be somewhere between 15. And believe it or not, 37% smaller than they think. When I talk about this in my seminars, I'm like everybody, you know, get you know, get a picture of what you've got in your in your retirement. And they all I said, you got your number? And they said, yes. And I'm like, guess what? And they're like, What? And then I go, It's not all yours. And they all kind of just look at me and you could hear a pin drop. And it's because of this very thing right here. They have forgotten to account for the single biggest expense that any of us are going to pay over the course of our lifetime, and that is taxes.

Producer:
Yeah, that's very, very true. And so then that, you know, sort of leads us then right into the question of that's the problem. So what do you do? Like, what's what's the solution to that?

Mike Zaino:
Well, I mean, we're definitely going to encourage all of our listeners to schedule an appointment with us so that we can provide you with what is known as a free Roth conversion plan. And this plan is going to outline exactly how you can convert your money that is currently in a tax deferred bucket and then move it over into a tax free bucket. Okay. And so a Roth IRA is one of only two tax free investment options that are available for Americans. And the other one, believe it or not, is life insurance. Okay. So with your money in a Roth IRA, the funds are going to be allowed to grow tax free. Okay. And not only do they grow tax free, but the distribution. So when you go to take money out and pull money out to spend it, guess what? It's already been paid. The taxes have. So it is going to be tax free as well. Additionally, your Roth funds won't be subjected to what are known as required minimum distributions, which is when the government is going to force you to start taking withdrawals from those tax advantaged accounts so that they can get the taxes that they are owed. Remember how I say your uncle is very greedy and even if you have done well in life and you don't need the money. He's going to come knocking at your door when you turn Now 73.

Mike Zaino:
Thanks to the Secure Act 2.0. Remember earlier in the show we talked about laws and regulations and why it's important to understand and trust the people that you're getting your information from. That law went into effect this January 1st of 2023, and it changed the rule from 72, which the Secure Act original changed it from 70.5. So they keep pushing it out and think about why they're doing that. They frame it so that it's better for you. But who's it really better for? Because more time allows the money to grow more, which leads them to be able to collect a bigger what tax you got it in a Roth IRA also protects your money from those future tax increases and changes to the US income tax brackets in the future. So if they decide to go crazy because historically right now we are in an extremely low tax rate environment and I know people are saying what, Mike? That's exactly right. If you look at the history of taxation in the United States of America, we are pretty low considering the overall history of marginal taxation in the United States. So if they decide to raise taxes by having your money in a Roth account, you are insulated, you're shielded, you are protected from those tax law changes.

Producer:
Yeah. I mean, if you ever want to be sort of grateful for the tax tax brackets being what they are now and the percentages of those brackets, the percentage of money that's taxed, if you ever want to be thankful for that, go just Google historic tax rates in the US and see back especially that that highest tax bracket. I mean it was what, Mike over 90%.

Mike Zaino:
96%.

Producer:
Craziness just absolutely so be thankful for that. You know lower much lower tax rate now down in the 30s if you're in the highest tax bracket think.

Mike Zaino:
I'm going to correct myself. Things were actually 94%. You got to keep $0.06 for every dollar.

Producer:
Yeah, there you go. Well, you know, either way we're splitting hairs when you get up to that that.

Mike Zaino:
Ridiculous, right? I mean, absolutely ridiculous.

Producer:
Absolutely. Well, yeah, There you go. Well, that's the thing is. Here you go. No matter where you are, no matter what you are doing right now, no matter where you've been, no matter where you're going in life, you're probably interested in maximizing the savings for retirement you're probably interested in at this point, I'm sure, at least I hope in this discussion. Learning about a Roth IRA, learning about a Roth conversion, what that can do for you. Get in touch with Mike Zaino. If that's the case, it's MoneyMattersWithMike.com or go on the phone and call 704 560 1573 704 5601573. You can get that free full retirement plan consultation and Mike's going to help you build that winning strategy really for you and your family so that you can have a great retirement.

Mike Zaino:
And remember, all meetings are complimentary and you're only going to work with me if it's better and if I can do better for you.

Producer:
It's this week in history.

Producer:
So some interesting things happened this week in our history in this nation and across the world as well. On the date of May 12th, 1937, American stand up comedian, actor and author George Carlin was born. Carlin, regarded as one of the most influential comics of his generation. You know, he would always push the envelope. He was always somebody who was not afraid to be controversial.

Mike Zaino:
He was, and I loved him for it. He was one of my favorite stand up comics. I mean, I would just sit and still to this day, I'll Netflix some old, you know, George Carlin if I just want a really good laugh because he was not afraid to mince words.

Producer:
And then so on this date actually May the 13th, in 1950, singer songwriter Stevie Wonder was born. Boy, talk about someone who has just had a storied career in the music industry and is still going. I mean, he is just I mean, had so many hits, too many to name, really.

Mike Zaino:
I mean, it's ridiculous. He's one of the best selling music musical artists of all time sales or over 100 million worldwide. He's won 25 Grammy Awards through his career. I mean, and to go through life blind and be able to do all that, man, he didn't use that as a crutch, did he? No, not at all.

Producer:
Talent Yeah. And then on May 14th, a big birthday here. May the force be with this gentleman, George Lucas. Who was born on May 14th, 1944. Of course, director, producer, screenwriter, entrepreneur, best known as the founder of Lucasfilm Skywalker Sound, Industrial, Light and Magic. All of the above. Because he created the Star Wars franchise.

Mike Zaino:
Yeah. Star Wars And which was obviously, you know, just an iconic American franchise. And then Indiana Jones, you know, I had forgotten that he actually was the creator of Indiana Jones until I saw This Week in History. It's, you know, da da da da da da da. That was one of my favorite ones, too, as a kid. I loved that stuff.

Producer:
Yeah, it was great.

Mike Zaino:
Harrison Ford is actually making another one at 82 years old. I just found that out. You know, doing research for the show. 82 is he's doing another Indiana Jones So wild.

Producer:
And then on May 14th, 1998, American singer and actor Frank Sinatra passed away at the age of 82. Ol blue eyes there. Boy, what a voice.

Mike Zaino:
Yes, he did. He's obviously considered one of the most popular entertainers of the 40s, 50s and 60s. And heck, he's kind of coming full circle because a lot of the younger generations are starting to actually listen to Frank Sinatra. And I think that's great.

Producer:
Yeah, it is. You got to remember those the the old masters, I guess you can call them. Well, that'll just about do it for this time around here on the show. Mike once again, have enjoyed it, sir, and we'll look forward to doing it again next week.

Mike Zaino:
All right. Thank you again, Matt. Again, you know, we wouldn't have this show if it wasn't for your production ability and what you do to make me sound great. I appreciate you. I appreciate our listeners out there. You know, we talked a lot today about some doom and gloom stuff, some really some things that hopefully I've shook you a little bit. I've gotten you to wake up and start paying attention to these things and how they can actually affect your bottom line. Ultimately, I'd love to help you. That's what I'm here for, to provide you with the information. So if you know anybody else that can benefit from listening to this show, please share my name and number and all of the platforms that we broadcast across. I understand that without you, this show does not exist. So I appreciate each and every single one of you. Whatever you're doing this weekend, I hope you do it to its fullest extent. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with the 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 That's 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. 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.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could 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 noon right here on FM 100.1 and AM 1340. Protect your hard earned money today and schedule a free no obligation consultation now at MoneyMattersWithMike.com.

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