How to Take the Stress Out of Your Retirement Plan

5.26.23: Audio automatically transcribed by Sonix

5.26.23: 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 every single week. And today we are absolutely bringing it again. On today's show, we're going to talk about how to grow and more importantly, how to protect your money for a happy retirement. And we'll highlight how we take the stress out of retirement planning. 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 hope you are as well.

Mike Zaino:
I am doing well. I'm a little annoyed that, you know, it's been a little over two weeks now that my right ear still has not popped after flying a couple and a half weeks ago up to Rochester, New York, to see my baby girl graduate. So I'm going to give it a couple more days, I think, just to see what's what. And then I'm heading to the doctor. You know, normally these things work themselves out, but it hadn't done that yet.

Producer:
Yeah. My gosh. Well, I can. I'll speak into your clogged ear whenever I want to say something behind your back. Guess you just say it to that side behind my ear.

Mike Zaino:
I won't hear you.

Producer:
We're not talking behind your ear here, Mike. We're doing. We'll be. We'll be doing okay for the show. But now this. I think we got a great show for you here again this week on this Memorial Day weekend. Very important weekend, I know. Which we'll talk about that the meaning behind this holiday as well as the show goes on. But we want to welcome in all of our listeners to Money Matters with Mike, whether you're listening to us on the radio or whether you're listening to us on the podcast, remember, you can subscribe to us wherever podcasts are downloaded and subscribed to. You can do you know you can do that as well on MoneyMattersWithMike.com MoneyMattersWithMike.com See all the past episodes there listen to them. The YouTube channel has a lot of great highlights from the show some special content there Just go to YouTube Search for money matters with Mike it'll pop up right at the top of the page. Subscribe like the channel. We would absolutely love that as well. And don't hesitate to give Mike a call at 70456015737045601573. Mike you answered. You're actually one of the few people I feel like these days who actually answers your phone.

Mike Zaino:
Yeah, you know, Matt, it drives me crazy. If I call a company or if I call somebody and they don't answer. And what drives me even more bonkers is if I leave a voicemail and it's not answered for a week to ten days. I actually had, um, a company that I do business with and I'm kind of second guessing doing business with them. I left a message for the person two weeks ago for their staff, somebody, anybody to give me a call. And I got a call this morning a little over two weeks after I left that message. I don't want to treat anybody like that. And so I don't have perhaps the boundaries that I should. I've answered my phone at 1147 at night before during March Madness, right when I'm staying up watching some of the West Coast Games. The only time I won't answer my phone is if I'm in a meeting. If I'm on the other line with a client, if I'm on date night with my wife. Because, yes, after 32 years, I still date my wife. I also date my daughters. If they ever want to spend time with dear old dad or if I'm just taking some personal time. But I promise you, if you leave me a message, I'll call you back. Otherwise I'm going to answer you.

Producer:
Yeah. And he will answer you and answer your questions. Schedule a free consultation. You can do that as well at the website, which once again is MoneyMattersWithMike.com. That's also a great place to go. Get in touch with Mike to receive a free report on bond replacement and alternate investments for the bonds that you likely have inside your portfolio. You know that 60 over 40 portfolio that I know a lot of the advisors, other financial professionals out there have recommended for quite a while. Well, is that still the best idea? I don't know, because we've got some ideas for you that could actually make a big difference in your retirement plan.

Mike Zaino:
Mike That is absolutely true. I mean, what worked for Grandpa? May not work in today's day and age, especially when bond performance over the last year or so has been in the negative.

Producer:
Yeah, and we've got that free report. We'll send it right out to you. Once again, money matters with Mic.com is the website and reach out there. Well, a lot to get to here on the show over this next hour, Mike, we've got, of course, our ever famous quote of the week, which we'll get to in a minute. I absolutely love this one. We'll have your Meat on the Bones segment right after that where you kind of dive into a little bit more bouncing off of the quote of the week. We'll talk about the importance of Memorial Day weekend, not just the barbecues, not just having fun with friends and family, which is great and wonderful. And we encourage you to do that, of course. But there is a greater meaning behind this holiday weekend and we will talk about it. Also, we'll play a new game of right or wrong here, dispelling some myths, as we put your knowledge to the test. We're going to withdraw your retirement savings early. Well, we're going to not do that for you, but we're going to tell you some things to consider if you want to do that or are considering doing that for yourself. Some potential consequences there. We've also got some financial moves to reduce stress. Doesn't that sound like a good thing? Yes.

Mike Zaino:
It does sound like a great thing.

Producer:
Well, let's get things kicked off here in the main part of our show with the Quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the quote.

Producer:
Of the week. And the words of wisdom this time around might come from Joe Moore, who said this, quote, A simple fact that is hard to learn is the time to save money is when you have some.

Mike Zaino:
Well, I mean, that's pretty true, right? I mean, today's Meat on the Bone segment. We're going to talk about that.

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

Mike Zaino:
Saving money is an essential financial habit that allows individuals to actually build wealth, achieve their financial goals and secure their future. So when is the best, quote, time to save money? Well, I would argue that it's when you already have some money available. Okay. When you already have money, it presents an opportunity to save and build upon your existing financial resources. When you already have some money, it indicates that you are capable of saving. It demonstrates your ability to control your spending, to accumulate funds. Building on this momentum by continuing to save helps reinforce good financial habits and instills discipline in managing your finances effectively. All right. We talk about an emergency fund all the time on our show. If you don't already have one, having some extra money gives you a chance to start establishing that fund. And that fund is going to act as a safety net in case of unexpected expenses, whether those are medical emergencies, home repairs, your Hvac goes out, you lose your job, your water heater bursts. Right. It is recommended that we always like you to have at least six months worth of living expenses in an easily accessible account. Another thing that saving is going to help you do is take advantage of this magical thing called compound interest. Right? Compound interest refers to the interest that is earned on both your initial amount saved and the interest that it accumulates over time. So the longer your money is invested or saved, the more that it can grow through compounding.

Mike Zaino:
And by starting early and consistently saving, you're able to harness the power of compound interest to multiply your savings significantly over the long term. Okay. It also gives you an opportunity to minimize debt and interest payments. Okay. That kind of couples with that compound interest because Albert Einstein said those who don't understand it are going to pay it. So if you have existing debt, such as credit card debt, student loans, mortgages, using some of your available funds to pay off the high interest debts can be a very wise decision because by reducing or eliminating debt, you're lowering your overall interest payments and you're freeing up more of your income for savings or other financial goals. The less money that you spend on interest people, the more you can invest towards your future. And I always say that your future self will. Thank you. Okay, so how do you do that? Well, maybe it's through some investment opportunities. Having some money saved provides you with different opportunities to invest and potentially earn higher returns. Investments, whether they are stocks, mutual funds, real estate or other alternative assets. We're going to talk today about some fixed indexed annuities. They have the potential to grow in value over time, and investing wisely can help grow your wealth and help you achieve your long term financial goals like a golden retirement or maybe purchasing your first or second or third or final home. Okay. Saving money when you already have some provides you a sense of financial security.

Mike Zaino:
It reduces stress and anxiety related to those unexpected expenses or financial hardships. Knowing that you have a financial cushion allows you to handle emergencies without resorting to high interest debt or relying on others for assistance. Okay, Saving money again is essential for achieving your future goals. Whether you wanted to buy another car, whether you want to travel, whether you want to start a business, whether you want to fund your education, whether it's your initial education, or you want to go back to school for your master's or your PhD. By having that money, it allows you to allocate those funds towards your goals and aspirations. And systematically saving will help you make progress. Turning your goals into a reality. So one of the things that we talk about a lot on the show, Matt, as well, is peace of mind saving money. When you already have some, it gives you the peace of mind and a sense of control over your finances. It gives you the confidence that you're actively working toward a better financial future. And having savings also allows you to make better financial decisions as you won't need to be forced to rely on credit or take on unnecessary debt to meet your needs. And by making savings a habit and prioritizing it, you can improve your financial well-being, set yourself up for long term success, and be better prepared to navigate any financial challenges that may arise. In other words, as my good buddy Jerry says, make hay when the sun shines.

Producer:
I love that. And that just goes perfectly with the quote of the week. This this time around, the perfect time to save money is when you have some and you better do it because as you said, Mike future you will. Thank you. Yes. Because you don't want to be someone who's in a situation where when you don't have money and you need it, you think, oh, boy, I wish I had saved money back when I had some. That's not a good place to be in. You want to while you have some make it a priority not to just let it burn a hole in your pocket. Not just to go out and say, Oh, I've got this money, How am I going to spend it? You know, the temptation can be there and it can be a very strong thing. Trust me, I know, but but it's much better to actually have some saved and put away because inevitably you're going to need it sooner or later. And it's much better to have it and not need it than it is to need it and not have it.

Mike Zaino:
Indeed, Matt. And I think the key there is to find a delicate balance, right? I mean, if you're always just Ebenezer Scrooge and you're saving every single penny that you got and you're scared to spend anything, well, that's not a good place to be in either, right? But if if you have an unexpected windfall or if you just find that you know what your bills this month aren't what you thought they would be, maybe you take a small portion of that and reward yourself, but you take the rest of it and you save it. So finding that that balance is is really what it's all about.

Producer:
Yeah, you got to find that balance because as you say, you don't want to be Scrooge. I've got I've got some relatives whose name I won't name that are kind of like that. And my relatives are.

Mike Zaino:
Completely the opposite. They spend everything they have.

Mike Zaino:
Right?

Producer:
Well, these are you know, they live in and, you know, God bless them. They live in a very modest house. They drive a very modest car and all these things. But they've they've, you know, squirreled away quite a lot and and don't and it's because they don't really spend a lot and but they very rarely go out and have fun at the same time. So it's you do have to strike that balance but you want to prioritize saving because it can really come in handy when when you do need it. One of these days and you will and maybe one of those things that you want to do with some of your savings, hey, you could put it away in a particular account to save up for a nice vacation. Maybe you're doing that this weekend. Maybe that's something that you've got going on this Memorial Day weekend and you're not alone. As a matter of fact, a lot of people hitting the roads, A predicting some big, big crowds. And we'll get to those numbers here in just a second. But another important number I know for a lot of people, gas prices this Memorial Day weekend heading into the weekend, the most expensive place to get gas, according to Triple A in the country. No surprise here was California, $4.80 on average a gallon. I am glad when it comes to gas prices, Mike, that we live in the southeast where we pay nowhere near $4.80 a gallon.

Mike Zaino:
You know, we don't. And although, you know, those of us who have to spend money on diesel gas or premium gas for our vehicles, you know, we're up there. Okay, But it's not these are the prices based on just standard unleaded gasoline. I actually was surprised that Hawaii, which is in second place at $4.75 a gallon, wasn't in first place because they have to get that gas from the from the United States all the way out to Hawaii. So typically, things are more expensive there. So it did actually surprise me that California took over the number one spot. Right. And then you got Arizona in third place, Washington and fourth place and Nevada and fifth places. So those are the five most expensive states. And like you said, thank God we live in the southeastern United States where we're not having to pay as high as these guys are.

Producer:
Yeah, definitely so. And as a matter of fact, and I didn't realize, too, just as an aside here how expensive gas was in Nevada until I was there for a conference not not all that long ago. And I was in Vegas and obviously, you know, just off the strip, you're going to be paying. Paying a lot more for gas anyway. But I looked at some of the prices on the site and I was like, Is that sign? Right? I didn't realize how much it was, but it's true. So that one also, you know, well, well deserved. Top five placing there in gas prices. And you know, a lot of people, as I said on the roads, people are getting out and about. There's a lot of pent up travel demand from these last three years plus of people not really going anywhere specifically. And, you know, especially, I should say, 20, 20, 2021 and even on into last year, not really traveling a lot, you know, to to speak of. So everybody's getting out doing it, making up for lost time. 37.1 million Americans driving to their destinations, according to the Triple A report this year. That's a lot. And actually a 20 more than 20% increase from last year.

Mike Zaino:
Mike Yeah, so so I mean, think about it. Even though the pandemic shut down, you know, the world wasn't just America, right? And we couldn't travel really for the better part of two years here. Now we are a little over three years that we've finally got an official end to Covid. Even though I was reading an article this morning that said, you know, it's the third leading cause of death in the United States right now. One person every four minutes is still passing away from from Covid. The first two spots were heart disease and cancer. Go figure. Right. But, you know, because of that pent up, you know, feeling of not being able to go, everybody's going out there and hitting it. And so not only are people going to be on the roads, but triple A travel forecast, you know, comes in just after a week after, I should say, the Airbnb reported record high bookings for the first quarter of 2023. Okay. So according to a survey in February by the US Travel Association, 23% of Americans plan to travel for leisure this year.

Producer:
Yeah, and air travel expected to be up by 11% over last year. Triple A says that this memorial Day weekend, when all is said and done, could be the busiest at airports since 2005. Wow. So not just since before the pandemic. I mean, this is going all the way back to 2005. We're talking about nearly two decades ago, which is still that math doesn't make sense in my head when I say that out loud. And, you know, if you and your family are on the roads, if you have been, you know, hitting the road this Memorial Day weekend, this long weekend, we really hope that you are driving safely and hoping that you are not getting stuck in any of those traffic delays that are out there.

Mike Zaino:
Yeah, no doubt. Please drive safely. Okay. You may consider leaving a bit early to help, you know, beat the traffic. Okay. I'm just saying that jokingly, in some of the areas that that our listenership resides in help you avoid delays. Bottom line, put on your patient pants and expect things not to go 100% your way because that way you can deal with it a little bit better. Right?

Producer:
Yeah, absolutely.

Mike Zaino:
Bonus if if you get to where you're going on time.

Producer:
Yes. Yes. Pack your patience in your luggage there with all of your swimsuits and you know, all of that stuff. Pack your patience as well for this Memorial Day weekend. And it is you know, it's seeing Mike as the unofficial start of summer, you know, the summer season. But we get this three day weekend for a very, very important reason. And I know that it is a reason. It's close to close to both our hearts, really. You, of course, are a military veteran yourself. And as always, thank you so much for your service and your sacrifice in that way. Um, my dad, of course, was a Vietnam veteran as well and just passed away last year. But this is a very important weekend in the life of this country when we take time out to honor those who have really paid the ultimate price for us.

Mike Zaino:
No, no doubt. You know, my grandfather fought in the Korean War. My my father was in Vietnam, like your dad was. I was in during the Gulf War. I thankfully did not actually have to go and fight, which, you know, was both a relief. And as a 20 something year old kid, a little bit of a disappointment. But ultimately, looking back, I'm thankful that I did not have to go that way even though I was prepared. But I want our listeners to understand the difference, namely between Veterans Day and Memorial Day, as they each have distinct purposes and meanings. So Veterans Day is observed annually on November 11th, and that is dedicated to honoring all military veterans who have served in the United States Armed Forces. It's going to recognize the contributions and the sacrifices that veterans have made across all branches of the military, whether they are living or deceased, and whether or not they've served in times of peace or in times of war. Now, memorial. Memorial Day observed on the last Monday of May. That's more of a solemn holiday that is dedicated to honoring and remembering those military personnel who have died in service to their country. They have paid the ultimate sacrifice, and this day specifically commemorates them while serving your for serving, I should say, in the armed forces. Veterans Day again pays tribute to all veterans, including those who are still alive and who have served honorably in the military. And the focus is on expressing gratitude and appreciation for their service, their bravery, their patriotism. Okay. While Memorial Day again primarily focuses on remembering and honoring the fallen military personnel who have died while serving in defense of their country.

Mike Zaino:
And so Memorial Day is typically marked by ceremonies, by parades. A lot of folks go to visit the cemeteries and they place flags or flowers on the graves of fallen soldiers. And when we look at Memorial Day and its roots, they can be traced back to the aftermath of the American Civil War. It was originally known as Decoration Day, and it was established to honor and decorate the graves of those soldiers who died during the Civil War. Over time, it evolved into to include honoring all fallen military personnel from all wars. Okay. It's again, going to be, you know, remembered through ceremonies at military ceremonies, the flying of the flag at half mast until noon, and then the national moment of remembrance at 3:00 where people actually pause for a moment of silence to honor the fallen. So, you know, as we prepare to enjoy this Memorial Day weekend, let's all please take the time to reflect on the immense sacrifices made by the brave men and women of our armed forces, as well as their families, those who lost their lives in the line of duty. Remind us of the value of their service as we strive to build a safe and secure future for all. So thank you to all of our veterans, but especially the ones who sacrificed the ultimate sacrifice and gave their lives as well as the families they left behind. Freedom is not free.

Producer:
Come on down as we test your financial knowledge in right or wrong.

Producer:
All right, folks, we want you to put your financial knowledge to the test now as we play a new edition of everyone's favorite game show where you don't get any prizes, but if you get them right, you just have to take pride in your correct answers. This is right or wrong, of course. And so what I will do is present some statements to Mr. Mike Zaino, who is our resident financial expert around these parts, and he will tell me whether or not that statement is right or whether it is wrong. So here we go. Statement number one, Mike, the Social Security Administration has come out and stated that if no changes are made, the Social Security trust funds will be depleted by 2034. Is that right or is that wrong.

Mike Zaino:
Matt? Unfortunately, that is absolutely right. Okay. What people have speculated for decades appears to be coming in about ten years, if not sooner. Okay. Social Security has a funding problem and it is in dire need of some serious changes in order to continue paying benefits for both current as well as future retirees. And this is why on our show and in our consultations, we stress the importance of having an extremely strong income plan and not counting on Social Security as the main, if any, component of your retirement. I often say that, you know, I'm not counting on Social Security, and if I get it, it is just the cherry on top.

Producer:
Yeah, it's the cherry or it's the gravy or whatever, you know, metaphor you want to think of in in your mind. It doesn't need to be the main course. Basically. It's it's got to be the extra. And so that is good. Good planning there. All right. So one for one batting, 1000 so far. I like that average. And I wish that I could just stop there and let let my average be a thousand. But we got we got three more of these. So number two is this If your employer does not offer a pension or another defined benefit plan, there is no other way to establish a personal lifelong income stream. Is that one right or is that one wrong?

Mike Zaino:
Mike Matt, I'm sorry to say that you are now batting 500 because that is incorrect. It is wrong. Okay, so annuities, annuities, annuities, annuities. They allow anyone to protect and grow their wealth by establishing an income stream they can never outlive. But you have to be very careful who you trust with your money because we have only access to the top carriers out there, the ones who are going to put you in a position that puts you in a better financial position. So we like to use a lot about fixed indexed annuities. They are often used to create those personal pension plans for both pre-retirees and retirees. Okay, So the way that their performance works is that it's tied to a stock market index which allows you to enjoy those market like gains without your money actually being in the market to experience those stock market losses. In other words, your principal is 100% protected, meaning the worst you can do in any given year is 0% growth. And that's only if the markets are in decline. Some of the annuities that we have, they offer bonuses. So if you're considering taking a lump sum versus a pension for work, for an example, schedule an appointment with us so that we can review your options and help you maximize what you've worked so hard for. In fact, I know a lot of folks now because of 2022 where they lost tens or hundreds of thousands of dollars due to the market decline. This is a way that you can get that money back, like we have opportunities for you to not only be made whole, but actually come out on top just by booking that consultation. So make sure if that is something you're remotely interested in making up what you lost last year to give us a call.

Producer:
Yeah, and you can do that. 704 5601573704560 1573 You can also go online to the website Money matters with mic.com. All right. Number three here, Mike. See if I can improve this average at all. Once you turn 65 years old, Medicare will cover all of your health care costs, including any long term care needs. Is that right or wrong.

Mike Zaino:
Matt? You're now down to batting. 333 Okay, that is wrong. Many people actually believe that the government will take care of them. Okay. And their medical expenses once. They're on Medicare, but unfortunately, that is not the case. You absolutely need to be prepared for any and all of the following costs during your retirement. Number one, you're going to have to pay a monthly premium for your Medicare Part B and for any drugs. If you're on Part D, you're going to have to pay your annual deductibles. You're going to have to pay your co-payments. Okay. You're going to have to pay for services that are not covered by Medicare such as vision and dental care. And then you absolutely are going to have to pay. God forbid you need any of it, but for your long term care expenses, whether those are in-home health care assisted living facility or, God forbid, 24 hour round the clock nursing home care.

Producer:
Yeah. And those are big, big expenses, especially when you're talking about that, you know, 24 over seven care in a nursing home. Those are bills that that, you know, can really wreck your entire retirement life because a lot of people don't have that kind of money put aside and don't realize how much it's going to cost.

Mike Zaino:
Even the people that do have that kind of money, you know, aside, they're like, oh, I'm self insured. I've got deep pockets. I'm telling you people, you know, I've seen $1 million vanish. Be absolutely eviscerated by long term care costs.

Producer:
Wow. It will really, really, really just wreak havoc on you. So make sure you've got a plan for that. All right. I'm going to try and at least end with a 500 batting average here in right or wrong, because this is our last one. And it is you can use an annuity to fund your Medicare expenses during retirement. You can use an annuity to do that. Is that right? Or is that wrong? Mike?

Mike Zaino:
Matt, you got that one right. So you're back up to 500. And we actually believe that this is a smart idea. It is a great step to ensure that both you and your spouse will be able to fund expensive health care costs during your retirement. So in order to do that, what do you have to do? Plan ahead and avoid the dread?

Producer:
That's right. And it goes back to that whole thing with proper prior planning. You know, it's like plan ahead and avoid the dread. I like that. That's a good little rhyme we got going with this one here. But yeah, very, very important to do. And just make sure that you have a plan, whatever that plan might be, and it could be different for you than it is for, you know, your mom, your dad, your Uncle Joe, your brother, your sister, whomever. You know, that's the that's the point of the show, really. And that's the point of what you do every day, Mike, is to let people know and to educate people that just because something worked for whomever. Right. Doesn't mean that it's necessarily going to work for you, right? Yeah, because.

Mike Zaino:
Everybody's situation is different. You know what? I'm talking in front of groups of people. I tell them, look, if I were to take this shirt off, don't worry, I'm not going to do it right. But I say I was to ask you to wear it or you to wear it or you to wear it. And I pick three people that look totally different with their height and size and body shape and all that kind of stuff. I said, Obviously it's not going to fit you the same way. It fits me right. I realize that your situation is different from your situation is different from your situation as I'm pointing to each of them, and they're all kind of nodding their heads, right? So why do so many financial advisors out there use that one size fits all approach when it simply doesn't work? And that's why during those consultations, when you come in and you sit down with me, we're going to do a deep dive into what's right for you.

Producer:
Yeah, and that is the point. And you can get that consultation by going to MoneyMattersWithMike.com or giving him a call 704 5601573. And you know Mike a lot of folks I'm sure have concerns and questions about the current state of the economy, about inflation, about obviously these days, things like the debt ceiling and how that could potentially affect things going forward. A lot of market volatility as well. Obviously, even just the debate around the debt ceiling has affected the markets. So, you know, we've got a lot of that sort of external turmoil that takes place sort of outside of people's control. So there are a lot of questions, a lot of stress that goes along with that. And so that could very well lead people to say, okay, how am I going to make ends meet if I don't, you know, have that emergency fund built that we've talked about a little bit earlier? Or if I don't have, you know, some some funds set aside to pay all these bills or I want to pay off some debt or whatever, people might be considering doing something like, you know, tapping into their retirement savings.

Mike Zaino:
Gosh, I hope I hope not. Right. I really, really, really hope not. Because so many people that I've talked with in the past and I've met with who said they were considering that I've actually found them alternative methods of tapping into some other monies and restructuring their plans to where it makes just so much more sense. So if you are considering tapping into your retirement savings during uncertain and volatile times in the market that we've had for the past couple of years since Covid, please consider this first and come meet with us.

Producer:
Yeah, and there are some things here that we want you to consider. Three things here, actually. Number one is the taxation on withdrawals. I sort of feel like, Mike, that people sort of think that, okay, I've got this money, I've put it aside, you know, maybe I got matching funds from the company that I work for or whatever, but I put this money in there so I can I can just go and get it. And there's not going to be any consequences for that because it's my money. But it's really kind of not all your.

Mike Zaino:
Right.

Mike Zaino:
The people who think that would be wrong. Okay. The government, folks, is in the tax business. And any time you go to withdraw some money out of your tax advantaged accounts like your 401. Ks, your 403 BS, your thrift savings plan or any employer sponsored plan where you've elected to defer the taxes. Okay, You are going to have to pay income tax on that money and the IRS will tax your withdrawal anywhere between 10% if you're a low income earner all the way up to 37% depending on your income tax bracket. So as a result, it is necessary to calculate your estimated tax beforehand to ensure that you withdraw enough to pay for your debt. Okay. And again, the only exception to this is if your money was in a Roth retirement account, whether that is in a Roth IRA or a Roth 401. K, where you're actually contributing after tax dollars and therefore you can withdraw those contributions and earnings without paying one single penny of income tax?

Producer:
Yeah, And that's why it's so important to explore a Roth option for you. Maybe that does make sense for you too, to convert some of the money that you might have in an account already to a Roth.

Mike Zaino:
You know.

Mike Zaino:
And so people often ask me, they're like, well, Mike, what do you do? And I'm the one who talks the talk, but actually walk the walk. So 100% of my contributions go into my Roth 401. K, 100% of my wife's contributions go into her Roth 401. K. So why do we do that? Well, I believe with all of my heart that the government is going to change the rules down the road. And I ask people all the time, do you think taxes are going up or down in the future? Never once has anyone said, Mike, I think they're going down. Exactly. Why then would you push off what you could pay for now at a known rate to something unknown in the future? That's why I contribute to the Roth. That's why I believe in it wholeheartedly. And that is why I'm actually afraid that if enough people start contributing to it, they're going to take it away.

Producer:
Too many people take advantage of it. They might realize, Oh, maybe we've given them too much of a good thing here and try and take that away. Absolutely. So take advantage of it. And you can always, of course, meet with Mike Zaino, talk it over, see what the advantages might be for you. MoneyMattersWithMike.com once again is that website. So something else to consider if you are thinking about maybe tapping into those retirement savings early is early withdrawal penalties. Those can be a big chunk of change.

Mike Zaino:
Yeah.

Mike Zaino:
So so early withdrawals create very steep financial drawbacks. Okay. Typically the IRS is going to tax you. Okay, but then also give you a penalty. And that penalty is an additional 10% for any money that you withdraw before the age of 59.5. All right. There are a couple exceptions to that rule. But you just have to understand, like, you know, if your tax bracket is 22%, for an example, and you take an early withdrawal, that actually means you forfeiting 32% of the funds that you take. So if you need to repay a $10,000 debt, you'll have to take about $14,500 from your retirement account. Remember, you won't pay income taxes on early withdrawals of Roth accounts, but the 10% penalty still applies.

Producer:
And that is still something to consider there. Of course, for that early withdrawal. But still, you don't have to pay the taxes. It's all something to weigh in the balance and for you to consider for your particular situation. Also, if you are thinking about tapping into your retirement savings early, that also can have a big impact on your future retirement savings you don't want to get behind if you're if you're doing well with your retirement savings, if you've been contributing year after year after year, month after month, then you don't want to suddenly find yourself behind, like most Americans are. Really?

Mike Zaino:
Yeah.

Mike Zaino:
And it's a sad state of affairs. And I say it kind of laughingly, but it's not. We talk about your future self thanking you if you do things right. Right. Well, if you do this, if you tap into, you know, your your retirement savings, your future self is going to slap you when you get there. And about 55%. Think about that. Over half of Americans are behind on saving for retirement and unfortunately, withdrawing money ahead of time only compounds that problem because the less money in your retirement account, the smaller your returns will be. And making up those years of missed wealth accumulation can be challenging. So maybe a more moderate option is to stop making your retirement contributions during that period of need and divert that money towards your debt. And while you won't put more money in your retirement accounts, you'll at least leave the existing funds intact to continue earning returns. Okay. So I just want to, you know, tell everybody out there in listener lands before you use your retirement savings to pay off debt, please just give me a call. Come meet with me. I'll analyze your current situation. I'll explain the tax consequences of various actions that you may be currently. Consider offering. And I am here ready to help. And I'm ready to serve as a second opinion. If you already have somebody giving you their opinion for all of the listeners of our show.

Producer:
Yeah, absolutely. And you can reach out once again at 7045601573704560 1573 Or go online to money matters with Mike that's all one word.com MoneyMattersWithMike.com well so Mike I started off that that last sort of segment here talking about stress and anxiety and that leading to people thinking about okay what am I going to do? Do I need to tap into my retirement savings early? And that could be definitely one factor that leads them to consider that. But stress and anxiety are real for people. I think even in better economic times than we're in right now when they're planning for retirement, but especially now, it's just compounded because of that situation. So we've actually got seven financial moves to help you reduce stress and anxiety. Some good, good stuff here. And you know, it's a it's a it's a fact of life that things do get more complicated as we get older. So let's try and uncomplicate things for people.

Mike Zaino:
Yeah, like like, like Grammy Award winning Bobby McFerrin said we've, you know, recognized him on our show before. Don't worry. Be happy. Okay?

Producer:
That's right. That's right. Absolutely. That's the goal here. And so hopefully these seven things that you can consider doing will help you reduce that stress so you can stop worrying and just be happy here. The first one is, as we said earlier, Mike, very important. And you said very truthfully, we say it often for good reason. It is so important. And that's why it's first on this list as well. Have an emergency fund in place.

Mike Zaino:
Yeah.

Mike Zaino:
You don't want to have to tap into retirement money to pay for a water heater, right? You just don't want to have to do that to pay for an Hvac, to pay for a transmission on your car Like that is the wrong thing. That is why we recommend having at least six months worth of your expenses ready in a combination of bank accounts as well as cash. This way you won't need to tap into those retirement savings or go into debt should any of those unforeseen circumstances occur over the course, especially in the summer.

Producer:
Yeah, you definitely want to have that emergency fund in place. Another thing to do to reduce your stress, financially speaking, is basically it's knowing where you stand, right? This is keep track of your net worth.

Mike Zaino:
Yeah. And that includes monitoring your debts, not only your debts, but monitoring your assets and knowing where your income is coming from. Right. Well, if you only have one job, that's where your income is coming from. If you're, you know, drawing Social Security and you're working part time, then you have multiple sources. But you want to know where you stand because that brings your whole financial picture into focus and it helps you set realistic financial goals. And if you don't know where you are or maybe it's a little fuzzy or you don't know how to get started, consider working with a financial professional who can help you analyze your current situation and put you on track to where you want to ultimately end up.

Producer:
And I know a guy who can do that. His name is Mike Zaino, and you can get in touch with him by going to MoneyMattersWithMike.com. Number three here, Mike is very, very important because we talk a lot about in retirement you want this to be true but really throughout your life you want this to be true. You want to have more money than month not more month than money. So live within your means and also own an affordable home.

Mike Zaino:
Yeah. So, I mean, I'm going to go and say live below your means, right? So you think about renting homes. Rent prices are on the rise right now. I mean, they've gone ridiculous in cities all across the country. And that kind of makes home ownership as attractive as it's ever been. And so no matter whether you rent or you own, housing is often the biggest budget, biggest budget line item for Americans. Words are hard today, our first day with my new tongue. So you want to choose wisely and keep your housing costs under control. And if you're thinking about maybe downsizing your home. Okay, got to consider things like mortgage interest rates. Okay. Because they have risen considerably just over the past couple of years. And so you might be actually better off staying where you are with your lower mortgage rate and paying than paying the higher interest rate and end up paying about the same, if not more for a home.

Producer:
Yeah, it all depends on your current situation, of course, and exactly what the numbers work out to be. But you know, I mean, if you if you downsize considerably, you're able to save a lot on that that mortgage payment every month, even with a higher interest rate than maybe you could refinance in a couple of years when interest rates come back down, hopefully. Please pray to God. So that could be an option for you as well. It just all depends, again, on your particular situation.

Mike Zaino:
And not only that, some of the builders, like the larger builders, are actually owning their own financing options. And so because of that, I've actually still, even today, are seeing like 4.5% financing if you go through their preferred lenders. So that may be an option for you as well.

Producer:
Yeah. And so just make sure to shop around and, you know, be on the lookout for those types of deals because they are out there even in a higher interest rate environment as as you say. Well, the next one here, Mike, in our list of things to do to reduce your financial stress is to pay off your home. So if you've found a good home that you love, pay it off as soon as possible because it really can take that. What's generally the biggest bill for anybody takes that off the table?

Mike Zaino:
Yeah.

Mike Zaino:
So so this this is a tough one for me because you know, especially if you have an Uber low interest rate. Right? So I mean my thoughts on it, like I have a 2.5% interest rate and I know I can make more than 2.5% on my money. So then why would I ever want to pay that off? However, okay, the happiest retirees are the ones that have no mortgage payment. So once you have that forever home, you should absolutely make it a primary goal to make sure and pay off that mortgage and get completely out of mortgage debt as soon as possible.

Producer:
Yeah, that would definitely be a good thing. Again, to take that big bill just off your plate. Also own safe and affordable vehicles and both of those points safe and affordable. Very important.

Mike Zaino:
Listen, I sit down with people and I see $1,100 car payments, $1,200 car payments, and they're trying to keep up with the Joneses. Right. They're spending so much money to impress people that they don't even like in the first place. And saddling your monthly budget with these unrealistically, sustainably high car payments. All right. You want to be able to get to where you're going when you want. All right. And get from point A to point B if you're still raising kids, you also want them to be as safe on the road. Okay. And giving them something affordable when they're out on the road that is safe is ultimately going to help your bottom line.

Producer:
Yeah, it really will. And, you know, balancing those two things is really sort of like anything else. It's creating that balance. You know, you want you don't want them to be driving around an old rusted out jalopy with no airbags and and a seat belt that only works about half the time if you can get it in there just right and all this, you know, you want them to be driving something that's safe, but also something that is as affordable as possible so it doesn't break the bank. And boy, they're talking about $1,200 a month car payment. It's unbelievable.

Mike Zaino:
Matt, I see it all the time. And these are people, you know, you wonder why they're living paycheck to paycheck. And they got I mean, and it may not be 1200 for that person, but it may be 800 or 700 for for a car. Yeah. Don't get it.

Producer:
Yeah, it's wild. I mean, I can remember this was a long time ago, but I can remember when my, my monthly rent was about that, about $700 a month which wish those days were here again. But, you know, I will just deal with the situation we've got on hand. So owning safe and affordable vehicles is that one. Number six on this list of seven things to do to help you reduce your stress from a financial standpoint, establish an income plan that covers your expenses. It's all about that monthly income.

Mike Zaino:
It is all about that monthly income. And, you know, if you're still working, obviously you're in control of your income, whether you just work at your primary job or whether you have side hustles or whether you have multiple jobs itself. But, you know, when we're talking about retirees, you need to plan ahead and get started on that retirement income plan. And a financial professional can help you put that plan in place so that you can rest assured that your paychecks and play checks, more importantly, are going to arrive on time during what are supposed to be your golden years.

Producer:
Yeah, make them actually your golden years and not like, you know, a lump of coal in your stocking at Christmas time. You want them to actually be golden and you can plan, you can get there with some help, but don't try to go it alone. And of course, we'll talk more about exactly how you can get some help here in just a moment. And one more here, Mike, to help people reduce financial stress. And this one is is not a one dimensional thing. It's kind of sounds like it may be on the surface and it's consider life insurance options. But that word options is doing a lot of heavy lifting in that sentence because there are options. It's not just the life insurance that you might have thought of a decade or two ago.

Mike Zaino:
Right.

Mike Zaino:
So so many policyholders. In fact, I would argue most policyholders feel better. They feel, you know, safe and secure knowing that should something happen to them, that their families are covered by a death benefit. Okay. But there are other options. We often say that, you know, today's life insurance, again, is not your grandfather's life insurance. Heck, it's not even the same life insurance that was sold ten years ago. Right. So if you have bought a policy ten years or more ago, then you need to have a second set of eyes, because today's life insurance policies also provide for addressing chronic critical or terminal illness or Alzheimer's or cognitive impairments. They can be set up so that you can take tax free income in later on in life, so long as you've had enough years funding the policy. I mean, there are just we like to call today's policies the Swiss Army knives of of life insurance because they can just do so many different things. And the sad thing is, is that most people look at life insurance either as it's unnecessary or they look at it as a burden. And I'm just saying, hey, once you sit down and I can show you the things that we're doing, I can switch your focus into looking at all the things that can help you accomplish and prepare for down the road.

Producer:
Yeah. And you know, I think I said this earlier about an emergency fund. It's true with life insurance as well. Is it is better to have it and not need it than to need it and not have it. And, you know, and that's just even speaking of, say, like the death benefit, for example, you know, it's better for for that to be the case. But then when you add on top of that, all of those other things that life insurance can do for someone, including helping with your retirement planning and all of that, it really is something to consider. And at the top of the list really and not be just kind of an afterthought for people.

Mike Zaino:
It should.

Mike Zaino:
Absolutely be forefront.

Producer:
Yeah, totally. And it's I know Mike going to be at the forefront of discussions that you have with listeners and and those other folks in the community who you meet with and talk with every day when they reach out to you for a free and full retirement plan. Citation. We say it's free because it is. It's absolutely free of any cost and any obligation. Talk about that consultation, Mike, and what that looks like when somebody reaches out to you for that to to just kind of get the ball rolling.

Mike Zaino:
Well, so.

Mike Zaino:
I mean, bottom line on this is that you're only going to work with us if it's best for you, right? If we can put you in a better situation. So we're going to dive deep. We're going to discover exactly how much you're paying in fees. We're going to help you cut unnecessary costs, whether those are in your IRA, your 401. K, your thrift savings plan or any other type of retirement savings vehicle. We will look at the many, many, many different ways of planning for Social Security and when you should strategize on taking it, because there are I mean, literally over a thousand different ways of of taking Social Security. So it can be extremely confusing as well as Medicare. Right? There are four parts of Medicare, A, B, C, D, There's also Medicare supplements. You're like, ah, what do I do? Well, I'm telling you, if you're on age 64, you're going to be on every person's turning 65 list and you are going to get inundated with all of the phone calls and the junk mail. I've jokingly said that you can wallpaper your entire house with all the junk mail that you receive. Well, Medicare is confusing. So if you want clarity on that, give us a call. All right. Remember, it is your money. And if it matters to you, it matters to me. And so we're going to compare your current situation to what is possible if you work with us.

Producer:
And to get that ball rolling and start working with Mike Zaino or at least explore that that opportunity that he's got for you there go to MoneyMattersWithMike.com You can reach out and request a free consultation MoneyMattersWithMike.com or give him a call 704 5601573. The number one more time 704560 1573.

Mike Zaino:
As well as hit us up on the socials man if you're on Facebook connect with us at Money Matters with Mike. If you're on YouTube, connect with us at Money Matters with Mike. We love getting questions. We love, you know, kind of communicating through comments and responses and seeing people interact with us. And if you know anybody that could benefit from the show, share the information. Okay. A rising tide lifts all boats.

Producer:
Absolutely does. And you know, that is going to just about do it here for this week's show, Mike. But I wanted to to just give a little preview, a little sneak peek of next week's show, because we're going through Memorial Day weekend right now. Summer is really upon us, if unofficially, at least just yet. But before you start planning your next vacation or maybe even just a little weekend getaway, we've got some things for you to do first. And in retirement, you every day is a vacation day. So on next week's show, we're going to share our list of things to do this summer so you can set up you and your family for success in retirement. Very, very important discussion. That's going to happen.

Mike Zaino:
Then, no.

Mike Zaino:
Doubt. And I also want to remind our listeners, we have a lot of free resources for you to tap into. If you want some free information, I'll send it to you. Anything, whether it's about the widow's tax and how to plan and prepare in advance, or maybe it's about the Secure Act 2.0 that went into effect this year and what that means for your retirement. Maybe it's about bond replacement. Maybe it's about information on tax free investments, whatever it is. Maybe if you're just now hearing about the 23 retirement cost cutters for 2023 and how you can save money, all you got to do is reach out.

Producer:
That's right. And you can do that at MoneyMattersWithMike.com or call 704 5601573. Well that'll do it Mike for this week's episode, sir, I am glad to have spent another hour with you and look forward to doing it again next week.

Mike Zaino:
I do as well. Matt, thank you so much for your contribution to the show. Thank you so much to our listeners and listener Land Without you, we do not have a show. So whatever you're doing on this Memorial Day weekend, I want you to be safe. I want you to have fun. And I want you to remember the reason that we celebrate this three day holiday weekend. As always, make it a great day.

Producer:
Thanks for listening to Money Matters With Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation, visit MoneyMattersWithMike.com or pick up the phone and call 704 560 1573

Producer:
Not affiliated with the United States government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. 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:
Fixed annuities, including multiyear 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.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including secure transcription and file storage, powerful integrations and APIs, upload many different filetypes, share transcripts, and easily transcribe your Zoom meetings. Try Sonix for free today.