1.13.23: Audio automatically transcribed by Sonix

1.13.23: 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 on financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Mike Zaino.

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy New Year, people. 2023 again. We're in January. What a great day. What a great month 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 each and every week. And today we are absolutely bringing the heat again. On today's show, we're going to talk about how to start 2023 off on the right foot. And as always, I have the distinct honor and privilege of being joined by the one, the only my co host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. I hope you are as well getting 2023 started here.

Mike Zaino:
Yes, sir. Yes, sir. January 1st, couple of weeks have been super, super busy. I often say that that I'm as busy as a one armed wallpaper hanger, if you can imagine that.

Producer:
Now. Now that's busy. It is.

Mike Zaino:
Busy. I mean, everybody's wanting to get their 2023 kicked off, right? And so my phone's been ringing. I get about 500 emails a day. I get questions from listeners who who want to be the problem solver during our Problem Solver section, when we do those on the show, it's so, yeah, it's been it's been extremely busy. People are just wanting to make sure that they not only start it, but are able to maintain some, some good financial continuity throughout the end of the year in 2023 and make 2023 the best year yet.

Producer:
So yeah, absolutely, especially after the 2022 that we had. And that's going to be a big portion of the show today, sort of taking a look back, wrapping it all up in a nice bow and saying, okay, 20, 22, we'll see you and we hope not to see you again in a long time.

Mike Zaino:
Yeah, I read something that said, Hey, 2023 before I agree to you, I want to see the terms and conditions. Right? It's like 2022 was abysmal when we're talking about money and the markets and everything. But hopefully, hopefully 2023 will be a little bit better.

Producer:
Yeah, that's what we're hoping. And as as we have this page turned over, it's always nice to sort of reset, get a fresh set of eyes and take a deep breath and just plow ahead because that's all that's all we can do. You just have to do it the right way. And that's what we're going to talk about today. We do have those big takeaways from 2022 coming up on the show today. The down markets, the inflation, the food, energy costs. We've got interest rate hikes, all that fun, fun stuff. But then after we go through. Exactly. But then after all of that, that bad news, we're going to uncover at least a little bit of good news that we can take away from 2022 as we head into further into this new year. We're also going to do a little beating the bank CD's segments. We've got the most important change to make to your plan in 2023. Do a little inflation demonstration, which has to do this time around with with kids who have to take care of their parents. It's almost like that role reversal thing, you know, and we've been there. So that that's something that hits home for a lot of us. I know. And then we'll do a little this week in history if we get time. I mean, hey, we got so much to cram into the show today. It'll be a lot if we can get there. But first, I want to before we get to our quote of the week, which is coming up here, I do want to remind the folks, you can go to the website MoneyMattersWithMike.com or you can give Mike a call at 704 560 1573. If you hear anything that you're interested in on the show today at 704 560 1573, he's always got his phone on him. You know, even if it's if it's in the middle of the night, he probably not going to answer you, but he'll call you back the next morning. Sure. That's the kind of thing that'll do.

Mike Zaino:
Yeah. Middle of the night. I'm definitely not going to answer it. You know, my late, maybe midnight.

Producer:
Right. There you go. But. But you will get a call back, folks. That's. We can guarantee that. But yeah, so that number once again, 704 560 1573. And you can also check us out wherever you listen to podcasts on the website. MoneyMattersWithMike.com as well. See all of our past episodes there and give us a listen also. So now.

Mike Zaino:
Facebook we have Facebook I know a lot we got out there are on the socials so Facebook is a great place for us to interact especially if you have questions.

Producer:
Too. That's right. Absolutely fit. We got the Facebook, we got the YouTube channel. We've got. We're all over the place. They're just search for Money Matters with Mike on your favorite social channel and find us. All right so as promised, our aforementioned quote of the week.

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

Producer:
And this time around, Mike, it comes from a figure in the sports world whom you may have heard of. I know you've heard of actually Venus Williams, professional tennis player, right. Don't even don't even go there. The former number one in the world in both singles and doubles and of course, the sister of Serena Williams. She's done something. So she's done a few things, been been slightly successful in her life here. And so what Venus said once was, quote, I don't focus on what I'm up against. I focus on my goals and try to ignore the rest. I think that's very wise.

Mike Zaino:
Yeah, that is that is huge because, you know, as we've talked throughout last year, a lot of people felt like they were just trying to push that that that huge boulder up the hill that was 2022. And it seemed like a lot of forces were against them. And so different people had different goals. And I know one of the things that we actually talked about last week a little bit was life insurance. And so for 2023, a lot of people have the goal of life insurance and are questioning how they choose which policy is is right for them.

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

Mike Zaino:
I really wanted to tackle that on today's Meat on the Bone segment, because, I mean, you have different types of life insurance. There's temporary life insurance, There's permanent life insurance. And I think each has its place in a person's lifetime. But when you're trying to figure out how much you need, simply ask yourself the question, you know, what do I plan on using that life insurance for? And that's going to impact how much you'll need and what type of policy you'll choose. You'll also want to think about how much money your family would need to maintain their standard of living if you just unexpectedly drop debt. If you are in a spousal situation where you're both drawing Social Security and one of the spouses pass away, you, if you drop dead, your spouse is going to lose half of that Social Security income and only get to keep the greater of the two. Right. The lesser of the two passes away along with you. And then you can't forget about funeral expenses, because the average funeral right now in the Carolinas cost anywhere between ten and 12,000. So these are things that you're going to have to ask yourself as far as to be able to determine how much life insurance that you need. And then you also have to consider the different factors that will affect your premium payments. There are several contributing factors that are going to affect the cost of your premium. And the most important one, of course, is your age, followed quickly by your health. Old sick people pay more than young, healthy people. And for most of our listeners, you're the youngest and the healthiest that you're ever going to be today.

Mike Zaino:
And the reason that those play such an important role is life expectancy is one of the biggest factors that the insurance companies use when they look at you to determine your risk. And then they'll also look at your personal medical history as well as your family medical history. So if every single person before you that has passed away, passed away of cancer, for an example, they might rate you a little bit higher. They'll also consider whether or not you use tobacco in any form, whether it's smokeless or cigarettes or cigars. If you have a poor driving record, believe it or not, people that have poor driving records are going to pay more for their life insurance because their record has proven that they're not a responsible driver. Also, your credit report, people with high credit pay less. People with low credit pay more. And if you like to do dangerous things, like I used to be an adrenaline junkie and for the most part still am a little bit you know, I've jumped out of airplanes. I like to downhill ski. I like to do things that are extremely adrenaline giving type activities. Well, dangerous lifestyle choices can also affect those premiums. All of those factors are going to come together in determining how much of a premium you'll pay. So if it's your goal to get life insurance this year, in 2023, just reach out. Give me a call. I'm happy to help you do that and figure out what's the right policy for you and how much you can afford. And my goal, obviously, is not to sell you anything, but to find something that fits your needs.

Producer:
704 560 1573 is the number to do just that, folks. And I think, you know Mike, we could probably do the the entire hour on life insurance because there's so much that goes into it. You know I mean and a lot that people just don't necessarily know about or haven't been educated on in the past and don't even know exists. So, yeah, there are a lot of different aspects to consider and a lot of different types of policies out there.

Mike Zaino:
Yeah, some you need it for catastrophic coverage, some want to have it for income replacement, some want it for legacy, some want to use it as a tool to generate tax free income. Like there are many, many different uses for life insurance. And smart people get it when they're young and healthy.

Producer:
Yeah, absolutely. It's save yourself some money on those premiums 100% because that's as you as you like to say, you are the youngest and healthiest that you will ever be. Right now.

Mike Zaino:
I'm a prime example. I don't mind sharing with my audience. I had a kidney transplant two years ago in December, just so it's been literally 25 months ago, I had a plan. All right. A plan. You want to make God laugh? You make a plan, right, Matt? So I had a plan to start funding maximum funding in indexed universal life policy the month that I turned 50 today, or actually, I should say last week was my birthday on January five. And so my plan was that when I turned 50 in 2021 to go ahead and maximum fund an indexed universal life insurance policy that I was going to fund for 17 years until I was 67. And then at 67 I could have tax free income of over 75,000 a year for the rest of my life, no matter how long I lived. Now, the reason I say you want to make God laugh, make a plan is the month before I turned 50, I went into end stage renal failure and ended up having a kidney transplant. Now, thank God that my wife ended up being a perfect match and she gave me one of her kidneys. So she calls. She says that I'm a. Champion wife Picker.

Mike Zaino:
And I couldn't disagree with that. Right. So there was definitely some divine intervention when we got together almost 32 years ago, next month, way back when. So so now I can't qualify for life insurance because I've had a health event that just precludes me from being able to qualify. Don't wait. That's my heartfelt advice to everybody that's out there waiting and procrastinating and putting off buying life insurance. Nobody wants their tombstone to read. I was too cheap to buy life insurance and you left your family in a lurch. So. So just take a lesson from me and my failure to act a little bit sooner. I you know, in hindsight, I should have done it when I was 45. Heck, I should have done it when I was 30. Right. And people that do that, we can show you how. Funding it for a period of 20 to 30 years will give you a lot more than the 75,000 I was going to be able to draw. So again, we could talk about this all day long. I'm not going to preach to you, but if you made it your goal to purchase life insurance this year, please don't wait. Give me a call.

Producer:
Yeah. And if you haven't made it your goal, make it your goal because it's a good one to have where you can not only benefit your your family after you are gone, there are potential benefits for you while you are still here. A lot of great things to be explored there and if you would like to explore it, you can go to Money Matters with Mike.com or 704 560 1573 is the number to call. So now it's time Mike, for our promised post mortem on 2022. And I say it that way on purpose because it's like so long 2022 we don't want to see again.

Mike Zaino:
Good riddance.

Producer:
Don't let the door hit you on the way out. All that. Yeah. So big takeaway is here. It was a bit of a of a reality check last year for us, right It.

Mike Zaino:
Was people were lulled to sleep from 2010 really until until COVID happened. Then we had some a little bit of volatility. But the year right? Five months after COVID, we were at all times highs in the market. Right. Well, 2022 was a reminder that down years do happen and now for the foreseeable future, we have volatility. That is normal, folks. It is not normal to just get gains and gains and gains and gains each and every single year. So what that tells you and reminds you is that you need to be managing your risk in an effective way that both protects your principles and your gains the best that you possibly can. Because, I mean, the S&P last year was down 20%. The NASDAQ tech stocks down 35% in 2022. And that's just two of the indices. All of them were down. So it was not not a very, very good year for the markets.

Producer:
Yeah, not not for the markets overall at all. And, you know, I mean, when you talk about an investment portfolio, let's say, you know, the sort of the 6040 portfolio will go a little bit more into this a little bit later on. But just to touch on it now, you know, the 6040 portfolio used to be 60% stocks, 40% bonds, and you would have that in there to to diversify. That used to be used to be this sort of inverse relationship. But the bonds would offer protection in case stocks went down. But this year, this past year, I should say, has not been the case at all.

Mike Zaino:
No, they had their worst year. Bonds did their worst year ever in over 100 years, like since they've been tracking the performance of bonds. They sucked the worst in 2022, just like every other financial product that's out there that was tied to the markets.

Producer:
Yeah, absolutely. 100%. It was it was a not a good situation. Well, and then, of course, we have the big albatross hanging around all of our necks. Inflation, you know, it did it peaked back in the summer and has been sort of ticking down since, but it's still remained really stubbornly high here. And we're all feeling it.

Mike Zaino:
Yeah, we are feeling I mean, the CPI, first off, the CPI is is I think the Liberals way of of repackaging what inflation is. And if we use the measure by which they used to measure inflation, inflation at its highest would have been close to 20% this year. But of course we've got to package things that that that are more edible for for the American public. Right. And so it peaked, I think, nine, nine and change this year. And right now we're sitting at around 7.1 ish percent, but still over 7%. And I had to laugh when I when I read the the chart from the Consumer Price Index and the US Bureau of Labor Statistics, because it said that, quote, Americans are finally beginning to feel relief after months of rapidly rising prices. And I just had to crack up laughing because I don't know about you, Matt, but I'm not feeling that much relief. It's more like pain. And they are wanting to condition our minds to think that, yeah, look how much it's come down. Well, it's still more than two and one half, three and one half times what it was for years at 2% or below. Seven and seven point change of inflation is not acceptable, and the Fed has not shown us any measure of slowing down.

Producer:
And when I was working as a reporter on the floor of the New York Stock Exchange, that is one of those things that we would always say any time the Fed would meet. They're trying to keep inflation at that 2% target. And it just it remained there in that range for years and years and years and years and years. And then, you know, these past two or three years. Boy, we saw it, you know, sort of began around the time of COVID and then the supply chain issues. And then, of course, that led to really this huge snowball effect of energy prices and food prices and all this stuff. And it was almost like a perfect storm where adding to food prices, for example, you have the avian flu that really wreaked havoc on the poultry industry and all that. So it's just been this perfect storm of of words I can't say on the radio. And it hasn't hasn't been fun. And I'm not really feeling the relief yet either, especially since I just went to the grocery store yesterday. Right. And looked at my bill.

Mike Zaino:
Yeah. I mean, again, my wife does all the grocery shopping and it's a good thing she does because the last time I went to the grocery store, she only asked me to pick up a few things and I did. And I'm thinking, all right, this is going to be like, I don't know, maybe 40, 50 bucks. It was $112 and I had $100 bill and I ended up I was going to pay in cash, but I ended up having to pay with a with a debit card. And I'm thinking, man, it's a good thing because if I had to go shopping each and every week, I swear we'd be eating rice and beanie weenies and ramen noodles and, you know, Hamburger Helper and not what we what we have become accustomed to eating because it's just it's painful, you know, both at the grocery store, it's painful at the pump. Gas prices came down for a little bit, but I started to see them creeping back up again. It's like, again, they're conditioning us to think that, look, it's coming down when in fact it's 2 to 3 times what we've been used to paying over the past decade.

Producer:
Yeah, And, you know, I mean, you look at gas prices from January 2020, so pre-COVID, you were looking at about 250 a gallon for the national average, obviously, like in the Carolinas tends to run less than the national average. Same where I am in Georgia tends to run less than the national average.

Mike Zaino:
Yeah, especially since Governor Kemp down there in Georgia just just suspended the state's tax on gas. I wish the Carolina governors would get together and do that. That would be a big relief for us.

Producer:
But come on, McMaster and Cooper, get with it.

Mike Zaino:
They're exactly what's going on, man. Take the lead, please.

Producer:
There you go. But no, they it really that really has helped us at the pump here, though, because it's it's been that's like $0.30 a gallon that it's been saving us over the last several months. And so that's why we've been either at the bottom or near the bottom of the list of states. As far as the prices for for gas go here recently. But yeah, we're right around 250, a little above January of 2020. And even after coming all the way up to nearly right at $5 a gallon on a national basis, it's come down quite a bit, but still above a monthly average. I believe this is from the November numbers, which are the latest that we had from the US Energy Information Administration. $3.69 a gallon. So still you're more than a dollar a gallon on average above what we were January 2020. So it's still way up.

Mike Zaino:
It is. And here in the Carolinas, we're averaging like right around that three, two, three, 15. If you go down to just across the border from Charlotte into into the Rock Hill area, you may you may see some that's in the two eighties because 289 to nineties. But you know again it's was it was way less than that you know five years ago just like pretty much everything was so.

Producer:
It's true it's true And then you know we also had we talked we talked about food costs for a moment. I just wanted to do a little bit of a comparison here, though, as far as two different kinds of food costs. Right. Because we mentioned going to the grocery store in particular, and the numbers from the USDA show that that's the that's the food at home category. They call it grocery store or supermarket food purchases that rose 12% year over year from November 20, 21 to November 2022. But the food away from home, that's restaurant you go out to eat or you go to the fast food place or whatever, those rose, but they rose less 8.5%. So eight and one half percent increase since November of 2021. That surprised me a little bit because I would think that the restaurants would be, you know, adding on more of these surcharges and all of that to try and and compensate for maybe some of the increased prices that they're paying on the supply.

Mike Zaino:
But on the flip side, they want people to come out to eat. So if they can give them, even if it's a three and one half percent, you know, break from that eight and one half to 12% difference. Right. If it's three and one half percent cheaper to eat out and let somebody else prepare the meal and then let somebody else clean up the meal and all you got to do is get yourself there and get yourself back then. I mean, three and one half percent is three and one half percent. That being said, it is still way, way cheaper, folks, to buy. Mysteries and cook stuff at home. It just is. The fact that it went up by eight and one half percent was on their already inflated prices to to to price in them preparing it and cleaning it and cleaning up after you there. So so the biggest thing I saw a little back and forth on on somebody posted on one of the socials that said, you know, hey, what are the price of eggs in your area? And people were checking in from all over the country. And I literally saw prices up to $12 for a dozen eggs. And to contrast that somewhere, somewhere in the Midwest, I saw $0.69. And I'm thinking to myself, I wonder if they own chickens, because that would be the only way that I could imagine that a dozen eggs were still $0.69 if they actually owned chickens. And my mother, my mother in law had chickens up until last year, I think. And we used to go out there and get some real fresh eggs every single day. I think if I had the land, I would own chickens.

Producer:
Oh yeah, we used to have the land and I beginning of the pandemic, I seriously was like, you know, I don't I don't particularly enjoy going to the store to begin with. And I didn't kind of didn't want to go to the store then anyway. And so I said to myself, Should I get chicken? Almost did almost pull the trigger on it.

Mike Zaino:
But unfortunately, I think the homeowner's association may frown upon that, Right?

Producer:
Well, yeah, especially for sure. Well, now that I moved to Atlanta, my my landlord, I don't think would be very happy with that either. It's. What's this in the parking lot? Well, it's my chickens, but on top of the the increase in those type of costs, we also have the increase in borrowing money. I mean, that has been something that's been been really painful. And we're starting to really feel it, especially if you've got plastic in your pocket and you and you're paying an interest charge on your credit card debt.

Mike Zaino:
Yeah. I mean, when we're talking about borrowing for homes or borrowing for cars or credit cards, the plastic you just referred to, we're paying way, way, way more. In fact, the average just the average rate right now for a credit card is 19.1%. And many people are paying a lot higher. The highest that can legally be is 29.99%. So imagine paying 30% for every dollar. Or let me just put it to you this way, 30 bucks for every $100 you spend on interest, or in this case, it's $19.10 in interest for every $100 you spend. That is ridiculous, people. Absolutely ridiculous. And then when we look at, you know, 30 year mortgages, those are the average right now is at 6.8%. Heck, just a couple of years ago, I refinanced my home for two and a quarter percent and then was mad because the week after I closed, I got an offer for 1.99%. Could you imagine had I waited until and not pulled the trigger and now everything is that much higher, literally almost three and one half times higher. I mean, that's why people can't afford the homes that they could afford just a couple of years ago. And it's it's terrible. This, I thought was very interesting, Matt. And I think you and I had this discussion a little before the show was that the average rate for a 30 year average mortgage is higher than the average rate for a 60 month new car loan, where that's always kind of been the opposite of a car loan.

Mike Zaino:
Now the average rate is at 6.1%. And the funds rate, the federal funds rate is at 3.8%. And that's the rate that drives everything, right? That's that's the rate that is going to tell everybody else where to kind of price their stuff. And so the good news, though, I guess, on the inflationary rates as far as the interest rates, is that you can use that to your advantage if you are willing to make some adjustments and place your money. Because even though rates are higher to when you're borrowing money, when you're investing money in in fixed interest type vehicles, you're able to get a higher interest rate. So whether it's a it's a my go, which is a multi year general or guaranteed annuity, it's an m y g a, that's what that stands for. You know, those are paying like five, five and one half percent right now. If you don't need that interim money, that intermediate money, the money that you can put away for 2 to 5 years that you would used to put it into a CD, well, now you can have the exact same safety, but you can also have some liquidity to where with a CD you can't touch the money. Well, now you can actually take some of the money out. They give you up to 10% per year. And the best thing about it is that there's no fees. Right. So so you can take advantage of these interest rates if you are willing to adjust the way that you think.

Producer:
Yeah, take advantage of it on that interest earnings side rather than the interest charge side that you're that you're having to pay. Absolutely. And you know, you mentioned those credit card interest rates and how absurd they can be. And I will just say once again, that's the emphasizes the importance of paying off that balance each and every month so that you don't have that compounding interest, because then you're you know, if you get that interest charge and that becomes part of your balance on. That card. So then the next month that interest gets charged to the new total, not the old total. So yeah, just pay it off every month and you'll be much better off financed.

Mike Zaino:
Yeah. You're paying interest on the interest.

Producer:
Yeah. Yeah. Which is.

Mike Zaino:
Not a good idea.

Producer:
People. Yeah. Which is, which is interesting.

Mike Zaino:
And in my own way. Yeah. In an effort to combat the skyrocketing prices. Right. And that's why the Fed is raising these interest rates. In fact, they've 2022, they raised the interest rates seven times and the Fed funds rate. That's what the central bank controls is just one interest rate. That is what the banks also use when determining to lend money out and how much to to charge and then how much to apply from an interest rate standard. So it's having an immediate impact on all types of lending mortgages, car loans, credit cards, all of which are obviously getting much costlier.

Producer:
Yeah, absolutely. So and all of this is sort of compounding we've talked about compounding interest. This is all all of these different financial burdens are compounding here and really, I think have concerned a lot of people and rightly so, after this past year. So can I give us the bottom line here, Mike, as we close the door on 2022, what are what are we seeing right now as far as what pre-retirees and retirees are feeling about their finances?

Mike Zaino:
Yeah, I mean, we've seen that too many both pre retirees and retirees, they are afraid, Matt. They're afraid to spend their money because of the down market and the rising inflation. And we want to help those folks, especially if you're in that retirement red zone, those five years before or the five years immediately in, because that's the most critical point in determining whether or not your retirement dollars are going to last you for the rest of your life. We want to be able to help solidify a plan that will empower you to live the retirement lifestyle that you have worked so hard for.

Producer:
Yeah, and it's easy to do that and easier than people would think, I feel to do that and get started down that road because I think people have this sort of idea in their heads, Oh, it's going to be too complicated or it's going to be too costly or, you know, or maybe I'm not going to see somebody who's a financial planner or financial expert or whatever. I don't fit that category because I don't have enough money. But I would think that you would be the first to say, Mike, no, don't, don't just put those concerns to the side and get things under control.

Mike Zaino:
I think everybody needs to speak with a financial professional, period. End of story. If it's broken, you need it fixed. And if you're not ready to retire, like right now with the money that you had hoped, then guess what, folks? It's broken. You need it fixed. And if if I have a broken arm, guess who I'm going to go see the emergency room to get a cast put on the arm. And God forbid I needed an orthopedic surgeon to do surgery. Right. I'm going to go to the professional that does that day in and day out for a living and helps people. Well, guess what financial professionals do They look at broken financial pictures and try to put the pieces of the puzzle together and give you a roadmap so that you can follow it and ultimately get to your destination if you want to get from here to there, but you don't know how to do it, you're probably going to go astray, right? You're going to go in circles. You're going to go out of the way. And the shortest distance between two points is actually a great circle on a sphere. But on a map, it's a straight line, right? And let me help you develop that straight line. And so what we do is we'll provide comprehensive consultations at no cost to our listeners. We'll have a phone call at first. So it's a 10 to 15 minute phone call. We call it a discovery call where I'm just going to ask you some questions about maybe your goals, your desires, your objectives for retirement. And then we get into the meeting where I'm going to ask you to bring some stuff and we're going to look at all of your different accounts.

Mike Zaino:
We can help you cut unnecessary costs out of your IRAs, your 401 KS or any other type of retirement savings account. We can help you maximize both your Social Security as well as Medicare. I know we just came out of open season for Medicare, but there are a lot of enrollees that can enroll under a special provisions like they're aging in or they've had certain circumstances where they've come out of a job, where they were covered under health insurance and now they're not. So they can enroll at that point in time. But again, you have to take action. You have to pick up a phone and call me at 7045601573. That rings this phone right here. And the only time I won't answer is if I'm obviously on the air, if I'm in a meeting, if I'm on the other line, if I'm spending time with my wife or my daughters, or if I'm just taking some personal time. But if you leave me a message, I will definitely give you a call. Most of the time it's within 24 hours, but guaranteed within 48, unless my message says that I'm out of the country. Because every once in a while I leave the United States and go enjoy some beach time someplace else. But you can go to our website. Money Matters with Mike. You can go to the Facebook page and reach out to us that way. But bottom line is, the ball is in your court. Hopefully listening to the show arms you with the information. But if you just take that information and lay it down on a shelf or, God forbid, put it in a drawer and shut the door, what are you really doing?

Producer:
Take action. Yeah, absolutely. Do that, folks. And you've got all the info to do it. MoneyMattersWithMike.com or 704 560 1573. Well, you know, we've sort of gone through a lot of these issues that are facing all of us right now as we head deeper into 2023 and leave 2022 behind, thankfully. Let's sort of focus in now, Mike, on some issues that are facing seniors, specifically those who are either already in retirement or heading into their retirement years. I recently put together this this story on eight things that seniors need to be aware of.

Producer:
Big changes could be coming and they may affect your retirement. I'm Matt McClure with the Retirement dot Radio Network. Powered by Amerilife, increases in costs, market volatility and fears of a possible recession all have people who are close to retirement worried about the future. Some people who were considering early retirement are staying in the workforce, while others who had already called it quits are going back to work. Marketwatch recently published a list of eight big things retirees and pre-retirees should keep an eye on. Some of them are pretty obvious. Like number one, inflation. As the prices of goods and services continue to go up at rates not seen in four decades, just paying for everyday things could eat through your retirement savings more quickly than you thought. Another concern Social Security. The trust fund is set to be exhausted by the year 2034. Potential changes to save the program could have a big impact on your retirement years. Two items on the list have to do with savings. How much money to set aside for retirement and how to address a growing gap in that amount versus what most of us have actually saved. Yahoo finance contributor Vera Gibbons recently reported that the savings gap has been exacerbated by the pandemic, with a lot of folks dipping into their retirement accounts just to get by.

Vera Gibbons:
We are in an inflationary environment here, and some of the experts I spoke to said given the fact that costs are going up for just about everything, they expect more people to actually tap into their retirement accounts or contribute less this year. Also, keep in mind that people are still quitting their jobs at a record rate, and that group may also be tapping into their retirement accounts too, to cover their costs.

Producer:
Health care spending and drug prices are two more things on the market watch list of retiree concerns. And they could be impacted by the last two items on the list Diabetes, which continues to affect more Americans each year and uses up a good portion of the nation's health care resources and exercise, which could actually bring costs down by helping you stay healthier longer. So which of these items is your biggest cause for concern heading into retirement? That's a key question to consider. As economic uncertainty continues to cause headaches for us all with a Retirement dot Radio Network powered by Amerilife, I'm Matt McClure.

Producer:
You're listening to Money Matters with Mike. Listen closely, because money matters. Here's Mike.

Producer:
So eight things there that retirees need to be aware of and a lot of challenges there. But as we've been saying, Mike, a lot of opportunity, I feel like to you know, we talked about all the bad news from 2022 that the market's dropped, We got inflation, we've got rising interest rates, all of the things. So that's all the bad news. What's the good news here?

Mike Zaino:
My sunshine, the market, this market. The good news is, is that it brings buying opportunities. If you're sitting on cash, especially in certain sectors that we have confidence in, then you can deploy your cash, your soldiers, as I call them, to help earn you more. All right. It's really a great time to get more fee efficient with the assets that you currently own. What does that mean? Well, that means if you're paying fees, if you're paying somebody to manage your account, especially last year, you paid them to lose your money, which is not really a good idea. Nobody should have to pay somebody for them to lose money. I can do that on my own. Thank you. Right now is also a good time to to start Roth conversions or looking to improve your tax plan for retirement. Because if you have some room in your current bracket to be able to convert some of your tax deferred dollars into tax free money by doing a Roth conversion and paying the taxes now at a known tax rate, that may benefit you long term because once you convert it to a Roth, it's going to grow tax free for the rest of its life. And guess what, folks? We have options available that can offer you upfront bonuses to help you make up for what you lost last year. We have options that participate only in the gains of the market, never any of the losses. So you're 100% principle protected and our options can be set up whether or not you need guaranteed lifetime income as another personal pension that you've created for yourself. Or if you don't need that money, but you don't want to give more of it away to the markets, we have growth strategies that will allow you to pass that money on as a legacy.

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

Producer:
So, Mike, we talked about a little bit earlier. You know, you know, it started kind of with our quote of the week from last week. I feel like the idea got turning for for this segment here because we had that quote where we're talking about how many people have gotten rich putting money into savings.

Mike Zaino:
Right. Right. I remember that. Nobody.

Producer:
It's crickets, You know, just crickets. But so so that was sort of what got the wheels turning on this. And this is, of course, our beating the bank CD segment here, because there there are bank CD's that have been around for a long as a product. It's been around for a long time, a type of account that's been around for a long time. And people have said, okay, this is going to give me some growth and I can put my money away and it'll be safe and great. Grand, wonderful. But there could be potentially for our listeners out there a better. Better way to go.

Mike Zaino:
Absolutely, Matt. You know, beyond a reasonable emergency fund, which typically 3 to 6 months worth of all of your living expenses, we don't like to see people holding on to too much money in savings accounts and God forbid, CD's. It's funny, during that last segment of your vignette, I just literally asked Google what the average one year CD rate was in the United States. And you know what Google told me? 0.9% still. All right. Which means which is really telling me that banks are earning a lot of money off of your money. And then I said, all right, Google, what is the average five year CD rate that's you giving them use of your money for five years? Folks, you can't touch it without penalty. Here is what Google said. Five year CD rate average, 1.15%. So you want to lock your money up for a year. It's 0.9. You want to lock it up for five years, It's only 1.15%. So a possible solution I mentioned this earlier are those multi year guaranteed annuities, because I have the five years that are putting out five, five and one half percent and you still have the liquidity. So to me that definitely beats the banks, beats the CD's without question. Hands down, it would like it'd be like me going into a ring with Mike Tyson in his prime. I wouldn't last 30 seconds.

Producer:
Yeah, you and me both. I mean, and here's the thing too. Like I was looking at bankrate.com a little bit earlier as well, just in preparation for this particular segment and some of the, you know, CD rates that you see from these, you know, online banks that are kind of no name haven't been around for a long time. They can be a little bit on the on the higher side, obviously higher than the average because the average is an average. Right. But I didn't see anything like what you were talking about there with like five and one half percent. Nothing approaching that. But some of the big boys, like your big, big banks names you would recognize. The Bank of America is the Chase. The Wells Fargo and some of the others were way down there. I mean, even some of them below, well below half a percent and even below a 10th of a percent for a couple of them. I'm like, why on earth would you put that money away and not not see any growth at all?

Mike Zaino:
Really? Yeah. I mean, and the banks are getting fat right now. I mean that's that's why I mean, they're trying to they're trying to make up for, for a catastrophic year in 2022. So this is not like the Carter year. You know, when those of you who were alive during Jimmy Carter's presidency, when when bank see these were paying 12 to 15%. But guess what? Mortgages were also 15 to 18% at the time. So it's kind of a trade off, right? It's not quite as bad, although it really was bad in 2022. But there are much, much better alternatives than bank CD's if you're looking to grow that intermediate money. And again, that's the money that you're not going to need for the next two, three, four, five years and can afford to park it someplace to at least get you better than a lot better than the banks can offer you.

Producer:
Yeah, absolutely. And another type of situation that people might want to be thinking about to get a better return on on their money is but still participate in at least the growth of the markets is something like a fixed indexed annuity and we've talked about these a few times before. But as we start off the new year, this could be something that people might want to make as far as a change goes in their retirement.

Mike Zaino:
Yeah, I mean, if you make one change, one change to your retirement plan in 2023, I would suggest doing this, take advantage of this interest rate environment and replace your bonds. Take your bonds out of the portfolio, the ones that you currently hold in there, and replace them with fixed indexed annuities. So the old school way of thinking again was 60% in equities or stocks and then 40% in bonds. Take that 40% and allocate that to fixed indexed annuities so that you're still participating 60% in equities or stocks, right? Same thing. And but now that you're 40% only participates in the growth of the market based on the performance of a selected index. And guess what? We have indices that mirror the S&P 500 that mirror the Nasdaq. We have indices that have actually outperformed the S&P 500 over the past ten years. So annuities are a very safe and fee efficient. And I say that because there are zero fees again, zero fees. So there are safe and fee efficient ways to participate in gains without losses. And they can be said to generate guaranteed income for life or just for growth, or you can set them up for growth for a few years and then turn on some income for life. So again, if you're going to do one thing in 2023, take the bonds out of your portfolio, replace them with fixed indexed annuities. And if you're not sure how to do that, I happen to know a guy.

Producer:
I. Hey, Me too. And his name happens to be Mike Zaino, and you can call him at 704 560 1573. Yeah. And people might hear a little bit about a fixed indexed annuity like this and think, oh, you know, it kind of sounds like a bit like an old school kind of pension, you know? And yeah, it really is. It's, it's a way for you to sort of create your own personal pension that you can never outlive. And it was, you know, because the old school pensions that we think about have really those defined benefit plans as they're referred to and in the business, really have kind of gone the way of the dinosaur. But this is a way potentially for you to create your own personal pension and actually wanted to explore a little bit more about that aspect of this. Mike, through a book that you and I are familiar with, it's called Annuity 360. It's written by Ford Stokes, who's a friend of ours and also just an all around great guy himself and knows quite a bit about annuities and all the benefits and what they can can do for you in your particular situation. And so he's written this book Annuity 360 and we're going to play one chapter and it's not not very long at all but chock full of a lot of great info just a couple of minutes. This is actually chapter nine from the book. It's called You Can Create Your Own Personal Pension. Let's listen to this just a couple of minutes and we'll continue our discussion on the other side.

Ford Stokes:
Chapter nine You can create your own personal pension. Big idea Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiary. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money, but an annuity can help make sure you have income you can never outlive. An annuity can be a great investment for your portfolio, but I encourage you to be careful that you don't overpay for your annuity when you put your money into an annuity. The annuity company will pay you your money back at a date you specify you don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiary. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away, don't give the annuity company fees for doing nothing. We prefer fixed index annuities for our clients that do not have an income rider fee, but you can still create a personal pension without an income rider on your annuity.

Ford Stokes:
If you get an annuity with an income rider but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuity using your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account, value or principal, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments. Without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payment. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be RMD friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier.

Ford Stokes:
Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company. So caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you that will help you build a successful retirement and they'll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. No, the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw. Too much annually. Say 10%. You will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account.

Producer:
Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity. Contract guarantees are backed by the financial strength and claims paying ability of the issuer.

Producer:
This part of today's show, Money Matters with Mike is available wherever you listen to podcast and online at Money Matters with Mike dot com.

Producer:
So that's chapter nine from the book annuity 360. You can create your own personal pension.

Mike Zaino:
Mike Yeah, that's it's true it comes from annuity 360 this book here that's written by Ford Stokes and if you want a copy of this book, give me a call. I'll get you one for free. It's called Annuity 360. Learn All you Need to know about annuities and down here, which ones to avoid and which ones to buy for a successful retirement. If you want a copy of this book, give me a call. 704 560 1573. Reach out to us on the Contact US page at MoneyMattersWithMike.com. Request your copy. I'll just need your address and I'll get you one in the mail. Everybody should educate themselves on the power that these have to transform the safe side of your total portfolio. So I think it's just it's just smart planning when you're talking about people that are pre retirees and people that are retirees.

Producer:
Yeah, and that's a great read, too. And not a not a difficult one. Not an overwhelming thing to pick up. It's not like you're picking up the entire Encyclopedia Britannica here, but you are getting a lot of great info.

Mike Zaino:
It is not war and peace.

Producer:
Right? Exactly. Exactly. Not Moby Dick. It's it's just a shorter read on the shorter side. But as I say, it's got a lot of great info. It is all you need to know about annuities some some great stuff in there. So call 704 560 1573 or go to MoneyMattersWithMike.com.

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

Producer:
So this one, Mike, will hit home. For a lot of people. I know it has pretty much hits home for me because I've been in this situation and still to a large extent am in this situation. This comes from a story in Fox Business talking about the adult children of retirees fit into that category, are worried about the impact that high inflation is having on their parents retirement savings. And this is from a recent survey. I know it's something that I have been worried about over these past couple of years. This past year particularly. It's concerning and it's one of those things where it's it's like a role reversal. You know, when you get a little bit later on in life because your parents have always been there to take care of you. And then one day it just switches and all of a sudden you turn around and you're the one having to take care of them.

Mike Zaino:
It's so true. I mean, Gen X especially, we saw it some with the boomer generation, we call them the sandwich generation. They just you know, they've got kids still maybe living in the house or maybe they're in college and yet they've got to take care of their aging parents as well. And, you know, I live here. My brothers live in Atlanta and my my middle I'm the oldest of three boys, the middle brother. You know, he has a pretty nice house and it's got a full furnished basement. And I always laugh with with him and be like, yeah, that's mom's apartment downstairs. And he's looking at me like and I always tell mom, I'm like, Yeah, Mom. I'm like, Are you going to go live with Mark? But truth of the matter is, is that 60% of the respondents to this survey expressed concern that the inflationary period that we're in and that that is causing their parents accounts to not go as far in hurting their parents financial situation. They said many of them are afraid that their parents won't be able to afford retirement in those later years. That's huge. This retirement savings crisis is real and many Gen X adult children are telling us that caring for their parents is going to be extremely difficult and potentially unattainable. And that's a quote from Eddie Herter, which is AIG's vice president of brand strategy. I mean, that's huge. Think about that. I mean, could you if you had to take care of your parents right now, it would be difficult. I mean, I could probably swing it, but it would be difficult to say the least.

Producer:
Yeah, And it's very true. You know, I mean, I have had to help take care of my my dad before he passed from a physical standpoint, but from a monetary financial standpoint, that's the part of this that I haven't really had to tackle yet. And if that were to happen, gosh, that's just such an overwhelming thing. And it really does show you how much you know, I think it was probably already a concern for a lot of people just from different financial situations going on in their lives. But now with inflation running as high as it's been, it just amplifies it. You know, I mean, I've done over the past few years working in my my news capacity, done several stories on different things from a health standpoint, from a financial standpoint, educational standpoint, already existing problems in society or wherever that were just exacerbated by the pandemic. Well, you can chalk this one up to already existing problems in society that are being exacerbated right now by this high inflation that we're experiencing. And I think that's very true, at least from from my perspective.

Mike Zaino:
Yeah. And the sad thing, like I said, I mean, 2023, we want to try to shed some light on it and say that there's hope at the end of the tunnel. I don't know that that's coming in 2023. If I just want to be real, it's more likely coming in 2024. And so history has a tendency of repeating itself and these things don't just recover overnight. So I just think that having a plan to be prepared for another down year again is just prudent, right? It's just smart business and smart finance to make sure that you're not going to be exposed. Nobody wants to be caught with their pants down from a financial standpoint. It's it's not it's not fun. Mat And so, you know, taking action and putting these plans together and learning about different ways that can help you strategize to to not get caught with your pants down is much better than the alternative.

Producer:
Definitely so. And folks, if you want to find out more, learn more information about how to keep your pants on, financially speaking, go to MoneyMattersWithMike.com or call 704 560 1573. It's this week in history, so some pretty big things happened this week in history. Mike, I know that there is one that spans the pop culture realm and the sports world to talk about here.

Mike Zaino:
It did. I'm a huge Yankees fan. Always have been the first ball game that I ever went to when I was. A wee little thing. Was it Yankee Stadium? Which was amazing. And so I've been a lifelong Yankees fan. So in 1954, Joe DiMaggio married Marilyn Monroe. How about that?

Producer:
Boy, can you imagine, just like being alive to to to see that sort of era of our pop culture and our sports world like colliding?

Mike Zaino:
I mean, I.

Producer:
Mean, you see it legendary.

Mike Zaino:
People. I mean, with I mean, those in my mind, those were just such icons back in the day. And it would I don't know, it would be like Michael Jordan marrying who I couldn't even tell you. I'm like, hoo hoo hoo. One of the Kardashians, maybe like, I mean, the people that are famous for absolutely nothing. I've just never understood that one whatsoever. But here's all.

Producer:
These reality show, folks.

Mike Zaino:
Oh, man. Yeah, right. Here's a big one. In 1981, that's when the Iran hostage crisis ended this week. In 1981, those hostages were finally released. And yeah, that was that was a big one. I know that was a big day. I remember that. I was I was a teenager. But I definitely remember that.

Producer:
Starting that year off on on a good note in 1981. And, you know, you mentioned that the first one there, Joe DiMaggio and Marilyn Monroe, tying the knot this date back in whatever year it was, the fifties, I believe it was, is the fifties, whatever year, the a few decades before that, there was actually something else that happened with regard to the Yankees as well. Back last week, I believe we're not too far from this date, but it was a big one. So I wanted to wanted to mention it and bring it in here. It was 1920s. It was actually, yeah. Oh yeah, Yeah. So 1920s. One of the most impactful transactions of Major League Baseball history happened. The Yankees bought Babe Ruth from the Boston Red Sox. And yeah, back then, you know, you said bought they were bought and sold. They were not traded. They were bought and sold but boy that was a good investment for the Yankees.

Mike Zaino:
That was a phenomenal investment because you know what it was? I mean, it was like literally the curse of the Bambino that that that just affected the Boston fans and the Boston team and that that whole clubhouse for basically, you know, 80 something years until they beat the Yankees in the playoffs. I think it was in the early 2000s and came back from a30 deficit to do that and that was that erased the curse. But yeah again, I mean imagine growing up in the era of of those icons, right? The Babe Ruth's, the Joe DiMaggio's the Marilyn Monroe's I mean, I just I don't know, maybe I romanticize that a little bit, but I just don't see today's icons being anywhere close to the pedestal that I put those those people of yesterday. It's like the whole LeBron versus Michael Jordan debate. I mean, come on, there is no debate. Michael Jordan all day long.

Producer:
Well, there you go, folks. It is settled once and for all via Mike Zaino there. And I just have to tell you just very quickly here, because we're just just out of time. But before we go, my favorite Yankee of all time, Yogi Berra, just because of all of his different quotes and sayings that he had over.

Mike Zaino:
The Yogi isms.

Producer:
That he was the funniest guy, let me tell you. All right. Well, well, on that note, Mike, it is time for us to to get out of here for another week. But I've enjoyed it, sir. I hope you have as well. And we'll see you again next time around.

Mike Zaino:
Absolutely. Matt, Thank you for everything that you do. Are people that listen to this show and tune in religiously each and every single week. Thank you. I guess without you, this show does not exist. I appreciate you. I hope you have a great rest of the weekend. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation visit Money Matters with Mike 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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