If You Fail to Plan, You Are Planning to Fail!

10.13.23: Audio automatically transcribed by Sonix

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

Mike Zaino:
What's up, what's up, what's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing the heat again. On today's show, we're going to discuss the importance of having a retirement roadmap. I want you to think of it like the rudder on a sailboat. Without one, you're going to go wherever the wind blows. Or better yet, maybe like your GPS system that notifies you of construction, speed traps, traffic and alternative routes to get you to your destination. Okay. So we're going to talk about what that means, what it looks like for you. 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, brother?

Producer:
Well, Mike, I'm doing great. I am so glad to be with you again. We got a lot of great stuff to get to. You know, there was a lot of news this week as far as, you know, economic news and things, you know, regarding inflation and you know, how Social Security is trying to keep up with inflation and all of that. So, boy, it's been a busy week financially speaking, for I feel like everybody. And that is why I'm glad to be here with you, sir buddy.

Mike Zaino:
And I'm just happy that I get to take a break from this week. It has been a extremely busy week. I had two speaking engagements up in the Washington DC area. I had over 40 appointments meeting with folks one on one actually, you know, telling some people that they were good to go. They just needed a second set of eyes. I had, you know, a lot of folks that actually needed help. And we made some suggestions and they took me up on those. And so, you know, just putting people on the path to financial security in retirement, that's what I'm about. That's what this show is about. And hopefully our listeners feel that same way.

Producer:
Yeah. And I am sure that there are plenty who do out there. And if you are one of those folks, you can always go back and listen to previous episodes of the show. Of course, if you're listening to us on the air on, we really do appreciate you doing that. Then also, if you're listening to us via podcast, yeah, we upload the show each week as a podcast version as well. And so we thank you for downloading the show, subscribing, leaving great comments there. That really does help the show grow and we appreciate it when you do that. Another thing that we would appreciate you doing, go to the YouTube channel, like and subscribe that just search for Money Matters with Mike on YouTube and you can see highlights from the show, some special content, a lot of great stuff there. And don't hesitate to get in touch with Mike with your questions. You can do that a couple of ways. One is through the website MoneyMattersWithMike.com. That's all one word. MoneyMattersWithMike.com. You can also reach out to them on the Facebook page. Facebook page. I should say that is Money Matters with Mike. Just search for it on Facebook and the old fashioned way if you prefer. And this is Mike's personal cell phone. Don't don't often get to say this on the radio. Call someone's personal cell phone. But Mike Zainos is 704 560 1573. And you know that your personal cell phone, Mike. But it's it's no secret. There are millions who have it out there.

Mike Zaino:
Literally millions of folks. It's the only telephone number I've had since 1997. I don't want another one. You don't have to press one to speak English. You will sometimes get my voicemail and it'll tell you, hey, I can't take your call right now. Leave me a message and I'll be happy to get back with you as soon as I'm able. And I mean that I can't stand when I leave messages and it's days, if not weeks, before I get a return phone call. My commitment to people is if you leave me a message, I call you back within 24 hours. Most of the time it's within just minutes. But you know, within 24 hours again, is my commitment. Just because I want you to get the answers that you so well deserve. Yeah.

Producer:
And every. One deserves to live the retirement that they've dreamed of. And that really is the point of the show to educate you about how to make that a reality. And speaking of that education, we've got a free resource that we can give you as well, tax free investments for a better retirement. And, you know, we're going to help educate our listeners, of course, throughout the show on ways to keep more of your hard earned money. Right. So this report is going to provide you with some additional, more detailed information, as well as some tips for getting started on that. Again, it's tax free investments for a better retirement and you can reach out. Money Matters with Mike.com once again is the website to get your free copy of that. Well a lot of great stuff. As we mentioned coming up here on the show today, we'll go through our quote of the week here in a moment. As we get our conversations started. We'll use that as our springboard into our talks today. We'll also take a look at a survey on some new numbers about how Americans are feeling about the economy. I sort of called this section of the show survey says. And that makes me think of Steve Harvey, you know, on on Family Feud. That's what survey says. Yeah, yeah. I don't dress nearly as snappy as Steve Harvey does, but.

Mike Zaino:
There are not many who do, brother. Not many who do.

Producer:
This is very, very true. We've also got a problem solver segment. It's an extra large edition of The Problem Solver. This week we'll talk about Medicare. The annual enrollment period is upon us. And we'll sort of try to scramble the alphabet soup that is Medicare and all the different parts there. So you'll want to stick around for that. More inflation talk as well with the cost of living adjustment and Social Security just announced this week, we told you we got a lot to get to. So hey, how about let's start stop tap dancing around it and just get to it, shall we? Let's start it off with our quote of the week.

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

Producer:
And those very promised words of wisdom this time around come from a former first lady of the United States, Eleanor Roosevelt, the wife of Franklin Delano Roosevelt, of course. And she said this it takes as much energy to wish as it does to plan. Oh, boy. That's true. I mean, you know, and here's the thing. Having dreams, having things that you wish for and all that. Not not a bad thing, but you know, something that you want. If it's if it's a goal that you have, instead of spending that energy and that time just wishing and hoping and daydreaming about it. You put that energy into creating a plan to actually make it happen, right?

Mike Zaino:
You know, her quote suggests that merely wishing for something to happen is is just as mentally and emotionally taxing as actively planning and working towards that same goal. In other words, both wishing and planning require similar amounts of mental effort, but only planning has a chance of turning those wishes into reality.

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

Mike Zaino:
And when it comes to planning for retirement, this quote highlights the importance of taking concrete steps in order to secure your financial future, rather than simply wishing and hoping for a comfortable retirement. We've talked time and time again how wishing and hoping is not a strategy. Okay. Many people dream about retiring comfortably, but without proper planning and more importantly, action. Those dreams may never come to fruition. So you know when you have that aspiration to retire comfortably. That's awesome, right? We want you to have that aspiration. We want you to aim for the stars. Right? But merely having the wish will not make it happen, okay? Wishing alone won't secure your financial future. You need to plan for retirement, and planning for retirement involves setting specific financial goals, making savings and investment strategies right, not hoping, not wishing and taking action to achieve those goals. And it requires careful consideration of your current financial situation. Your future needs both income and just shelter, food, stuff like that, right? As well as the steps that are required to bridge the gap. Okay. And so both wishing for retirement and planning for retirement, take mental and emotional energy and wishing might lead to stress. It might lead to anxiety as you realize that your retirement is pretty uncertain. Okay, while planning, on the other hand, it actually empowers you to take control and reduces stress by virtue of you taking proactive steps. Okay? And so only planning increases the likelihood of your success as far as having a comfortable retirement. And by creating a well thought out retirement plan, you can work systematically towards your financial goals, potentially making your retirement dreams a reality. Okay, in essence, her quote serves as a very, very staunch reminder that to achieve a comfortable retirement, it is essential to shift from passive wishing to active planning. Okay, so that is today's meat on the bone. I hope you guys got a lot out of Miss Eleanor Roosevelt's quote. I know, I sure did, because it forced me to look introspectively at what I'm doing to plan for my own retirement, and I hope it does that for you as well.

Producer:
Yeah. And that mean really does, in a nutshell, describe so much of what we talk about here on a regular basis, and that is the importance of having that plan in place, the importance of making sure that that plan is tailored to you, because not everyone's plan should be the same. And that is, I think, another really important aspect of this. Yeah.

Mike Zaino:
In the effort that you expend in planning, guess what, folks? That's likely to be far more rewarding than simply wishing for a better retirement without any action whatsoever.

Producer:
Yeah, totally. And that is, you know, if you got to put your your effort into something, if you're going to expend energy doing something, it might as well be something productive and something that is going to actually make a difference in the outcome at the end. So like the way that you you went through that there and really broke it down for us. And, you know, a lot of people I think today may think that they're, you know, planning their future is a bit too daunting just because they're. Are a lot of worries out there about the economy and about you mean.

Mike Zaino:
There's there's volatility happening right now.

Producer:
Matt. Oh no I mean everything's going great. Now the pick a more.

Mike Zaino:
Crazy time to be planning about retirement. We got man. We got what's going on in Israel and Palestine right now. We got what's going on in the Ukraine and Russia. We got China and Taiwan. Oh yeah. And then we got the United States. And next year we have a, you know, a political race. You know, as far as the who's going to be our next commander in chief. And all of these things tend to throw a lot of uncertainty, a lot of fear, a lot of doubt into the markets. And, you know, ultimately people do, although they shouldn't react and play on emotion as opposed to believing in the plan that they have and sticking to their concrete plan.

Producer:
Yeah, no. And that is a very important point because you don't want to do that. You don't want to be an emotional investor or an emotional even hesitate to use the word planner there, because if you're emotionally making a changes on the fly, then you're not really sticking to any kind of plan. You're just going with whichever way the wind is blowing and all of that. So you don't want to do that because that's not a plan either.

Mike Zaino:
That's flying by the seat of your pants.

Producer:
Exactly, exactly. And you know how how much success can you have while doing that? But there are a lot of concerns out there. And, you know, there was this survey that was done just here recently. According to the who was it? The Insured Retirement Institute IRI conducted this survey is their 2023 Financial Advisor survey. And what they did is they asked these financial advisors, what is the top concern or what are the top concerns of your your clients, the people you work with on a daily basis? And they found that financial concerns have really increased in recent years and some big numbers here. Mike, if you want to run through those here for us, kind of what the survey found.

Mike Zaino:
Yeah, absolutely. You know that survey was was enlightening. You know, I wouldn't have necessarily ranked them in the order that the majority of American population who are surveyed, did, you know. So that was a little eye opening for me, 79%, by far the largest group, 79% of the folks surveyed. Matt. They're worried about inflation, right? We just had the the CPI data come out earlier this week. And guess what? It was higher than had initially been forecast.

Producer:
Yeah it was. It came in at at an annual pace of 3.7%. And the initial reaction on Wall Street, the day that was announced just a few days ago was not a great one. You know, the Dow Jones fell, I think, almost 200 points on that day. Also, the ten year Treasury was was up. S&p 500 was not doing well either. So it's you know definitely the stock markets were reacting to the events and news of the day when we got that inflation number that, as you said, was a bit higher than they had anticipated.

Mike Zaino:
Yeah. No doubt the second largest percentage of those surveyed 70%. So just a mere nine percentage points less than the inflation worry 70% are worried about recession and what that looks like. And the fact that, you know what, we've been heading toward it for quite some time. And, you know, the economy seems to stave off that, that period of recession. But if things keep heading in the direction, I'm just not sure how much longer they're going to be able to keep from entering the recessionary period.

Producer:
Yeah. You know, you hear a lot about different groups of economists and people who are, you know, study these things day in and day out and they'll say, you know, one day, oh, we're expecting a recession within the next year or whatever the time frame is, and then the next time they come out with a report, they say, well, you know, never mind. It doesn't look like a recession is is likely given X, Y, and Z that's happened and it keeps going back and forth like that. So that just really adds to the uncertainty for folks.

Mike Zaino:
Yeah. I mean, because with everything going on in the stock market and those same pundits and analysts that are looking at all this data, you know, many of them agree that the stock market is yet, you know, to hit its bottom, okay. And they're predicting, you know, more and more and more declines. And so the third largest number, 65% of those surveyed were actually worried about losing not just a little bit of money, but a lot of money in the stock market. And I know that this past week, as I was sitting down with folks, you know, that seemed to be the majority of concerns vocalized to me based on just the 40 folks that I sat down with and many of them had already lost, especially when you look at last year's, you know, market performance with the S&P down almost 20. You know, and you know, I deal with a lot of federal employees. And so there's fund, which is the Dow Jones Industrial Average. That's their benchmark was down 28%. You know, those were those were huge, huge, huge hits to their version of a 401 K, which is a thrift savings plan for those of you who don't know. Right. So they were worried about losing a lot more money in the stock market. And you know, the good news was, is that I, I had a solution for that and was able to, you know, suggest some things for them.

Mike Zaino:
And then the the last big number that I thought interesting was that 57% of those were actually worried not about what's going on now, but about their ability to maintain their current lifestyle levels. Once they cross that cross the threshold and actually pull the trigger and become retired. Right. And so, you know, think about that for a second. I've said this before. The sad reality is, is that if you're looking at me right now on YouTube, you know, most people, when they're earning money in their last few years, they're in their highest earning years. And so they're used to having a salary of this. But the sad reality is that when they retire, it's going to be reduced significantly. And so what I like to see people do is maybe sacrifice during those prime earning years and build up their retirement nest egg so that this comes down because they're not taking it out. But this comes up so there's not as steep of a drop off and as steep of a reduction in lifestyle once you are retired. And if that is something that you're concerned about, please let's get a plan together. And more importantly, let's start taking actionable steps to make sure that you don't just have a nosedive in lifestyle when you retire.

Producer:
Yeah, that's not a thing that you want. And it is a, you know, concern, as you said, for 57% of the people, at least in this survey, that they won't be able to maintain that. And it's sort of the concern that all of these other worries kind of roll into, because if inflation is too high and you don't have a plan to keep up with it, then you may not be able to maintain your lifestyle in retirement. If there is a recession, you lose a bunch of money in the stock market. Either one of those things. You may not be able to maintain your lifestyle in retirement. So it's you know, one happens to be sort of the the fear that would be the result of all of the other fears potentially.

Mike Zaino:
Right. And, you know, I know we talk about personal pensions a lot on our show. Right. And so I thought it really interesting that a separate survey from the same group found that pre-retirees those who had yet to cross the threshold pre-retirees were most interested in downside protection, okay, as well as guaranteed retirement income. In other words, most retirees wanted to get to the guarantees in life when it comes to their golden years so that they can actually enjoy them. And they are golden and not let.

Producer:
Not a lump of coal in your stocking at Christmas. We want them to be golden. And and yeah, I mean, you know, when we talk about guaranteed retirement income, that is a huge piece of this. And a lot of people over the past decades have, you know, at least taken into account something called the 4% rule. And we talked about it on the show before. It's been a while. So talk about the 4% rule, what that is, how it kind of applies to people's retirement and how you can possibly do better in retirement than the 4% rule.

Mike Zaino:
Yeah. So the 4% rule is a rule that's been around for well over two decades. It's still widely used by many advisors, many retirees today. Okay. But what it says is that you should never spend more than 4% of your retirement income on an annual basis. And the math is simple, Matt. Okay. It's, you know, 4% will last you 25 years, right? Four times 25 equals 104% times 25 years equals 100% of your money. And so if you go through and think that, hey, most people are going to retire somewhere in their 60s, okay, then that should take them to somewhere in their 80s or maybe even early 90s. But the rule makes two very, very bold assumptions. Number one, you're not making any money. And then number two, and perhaps more importantly, you are not losing any money. Okay. So that's the rule in it. And it's, you know, I guess purest form. But my argument is that you actually may be able to do much better for yourself by following a different strategy. And, and that strategy is to consider investing in what's called a fixed indexed annuity and defer taking income for at least two. The three, maybe even four years. You know, I sat down with a with a person, you know, this this week who was a very high ranking member of his particular agency. And between him and his wife, they had over $4 million in, in assets. And, you know, he told me, Mike, if you would have told me two hours ago before I came down, that I would ever consider investing in an annuity.

Mike Zaino:
Okay, I would have told you that you had done bumped your head. Okay. And I started laughing when he said that. And but because I told him, I said, look, let's not get, you know, so caught up in what it's called, what the title of the product is. Instead, let's look at all the boxes that it checks off and the things that it accomplishes. And so, you know, when you invest in a fixed indexed annuity, it gives you the opportunity to let whatever index your money is linked to grow, meaning that you have a larger account value and you have more income during retirement. And then you're able to take consistent withdrawals by taking penalty free withdrawals in addition to your actual income. So if you ever need access to lump sum cash. So he was like, let me get this straight, I have upside potential. I said, yes, sir, you can check that box. Off he goes, I have downside protection. I said, yes sir, you can check that box off. You will never lose money due to the volatility of the market. Whichever index that you choose, he goes, all right, let me get this straight. You know there's no tax implications when I move my money from my 401 K or my TSP or my 457 or my 403 B, he didn't mention all of those because he only had one of them, but any employer sponsored plan and I'm like, you can check that box off. There are no tax implications. And he goes, and let me get this straight. I still have access to lump sum cash and some liquidity if I need it.

Mike Zaino:
I said, yes sir, you can check that box off and he goes, and let me get this straight. My heirs, I can name beneficiaries so that when I die, the insurance company doesn't keep the money. Right. And I said, absolutely true. You can check that box off. You have named beneficiary. You can control your money from the grave. And he goes and the last thing let me check this box off. There are zero management fees. I'm not going to have to pay you to manage anything. And I said, buddy, you'll never pay me a penny. And I make that commitment to all of our listeners out there. You will never pay me a penny. All of the companies that I represent, they all pay me the exact same flat fee, so that I can remain completely objective in my recommendation and go only what is best for your needs. And you know, he started scratching his head and he said, you know, like I said, if you had told me two hours ago that I was actually considering doing this, I would have told you that you had done bumped your head. And we both got a big chuckle out of that. And you know what? He's going to end up becoming a client of mine. And so that may be you in your situation where you had your father, your grandfather absolutely told you to never buy an annuity, but they were talking about the ones that were available back in their day and age. And they've come a long, long way since then.

Producer:
They really have. And that, you know, to there are some of the big financial gurus out there who are also very much vocal about their distaste and dislike for annuities, and was actually listening not too long ago to one of them talk about that. And, and the thing that they were describing was not any of the annuities that you would recommend, not any of them that we have really talked about on the show, except for in a in a negative way as well. But they were lumping all annuities into a category of a variable annuity, which we call a variable annuity. They were kind of lumping it all in with that. And that's something I know that that you've said a lot of times, you know, the certain types of those annuities that you would not recommend to your worst enemy.

Mike Zaino:
No, I wouldn't. And then there are others, like the fixed indexed annuity that I have my personal family members in, and then I actually plan on laddering them as a strategy so that I can turn on multiple streams of income. When I'm in my 60s, I'm only 52 years of age. So my plan, I'm going to ladder them for seven years in a row so that I will have seven additional income streams when I am in my 60s and when I'm ready to retire. I don't have to worry about what the heck is going on in the news, whether it's locally, regionally, nationally, internationally. Right. Why? Well, I'm going to have seven streams of income plus, you know, my 401 K plus Social Security and whatever form that it's out there. Plus I also have some. Real estate rental income. So that's a total of ten streams of income that I'm planning for myself now. Why would I be doing this stuff? Well, I know about this stuff. And when you know better, I hope you do better.

Producer:
That is the hope and the plan. Definitely. And the importance of getting a plan is what we're talking about today. And if you are intrigued by this whole discussion here and hope you are, because it's it's some good, good stuff folks. Go to Money Matters with Mike.com. That's the website Money Matters with Mike.com or call (704) 560-1573 for a no obligation consultation. And when we say no obligation, we mean it here. But still, you know, Mike, a lot of people tend to be maybe nervous or a little bit intimidated by meeting with someone like yourself, a financial professional who they've listened to on the radio or the podcast, or maybe seen even up talking to a group of people on on stage in front of a group of people or something. But what we want to do, though, is, is kind of help ease those concerns because. All you want to do in that initial process, that initial consultation and those sort of, you know, discovery call and all of that is start to help answer a few questions. And it's nothing to be intimidated about because and I'll tell you this, folks, Mike Zaino is there to help, right?

Mike Zaino:
Absolutely. And, you know, I get nervous. I get intimidated when I go to the dentist. Okay. Why? Well, because I don't know how to do any of the dental work that needs to be done on me. But inevitably, after the initial, you know, whatever is going off, you know what? I'm happy that I went to the dentist because now I have a good set of teeth that are being properly maintained so that hopefully I keep my teeth for the rest of my life. And so there's no need to be intimidated, no need to be nervous. If money and finance is not your area of expertise. Okay, in fact, we want to help ease those concerns. So in our initial consultations, we're going to simply try to help you answer some questions. Right. What does your successful retirement look like to you? What are you doing? Who are you doing it with? How are you spending your time? Right. And so, you know, when we find out these things, we can kind of do some backwards planning as far as, you know, what you're looking to accomplish, if whether or not you have specific goals, hopefully you do. And they're not just vague and general. We want them to be as specific as possible. And then more importantly, how you plan on funding your retirement. And I've been able to develop retirement plans for people who don't make a whole lot of money.

Mike Zaino:
We're talking, you know, 40 grand a year, 50 grand a year, just as easily as I am for those who make six figures and beyond a year. And so the biggest question that we seek to answer is, you know, how do you plan on creating that retirement income each and every single month that you can count on? So if you're out there listening now and you think that you might like answers to those questions, especially if you have an employer sponsored plan. So whether that's a 401 K, a 403 A, 457, a Sep, IRA, a thrift savings plan, any other type of retirement plan. We encourage you please reach out to us today. Schedule that complimentary no obligation consultation because I'd be happy to meet with you in person. I'd be happy to have a phone call with you. I can do a private virtual zoom call with you where you're in your house, and I'm in my office. If you don't want to come to the office, I'll meet you at a at a Starbucks, at a Cracker Barrel, wherever you want to meet and feel comfortable and less intimidated. I'll sit on the same side of the table as you and explain these things to you. Why? I know that your money is important to you because you've worked hard for it, and therefore, if it's important to you, it's important to me.

Producer:
And once again, folks, the website is MoneyMattersWithMike.com. That's MoneyMattersWithMike.com. You can also call 704 5601573.

Producer:
It's time for this week's Problem Solver.

Producer:
So in our problem solver segment, usually we just have one problem. Today we got a lot of problems.

Mike Zaino:
We got some problems brother. But you know what? You got a problem. Check out the hook while the DJ resolves it.

Producer:
Thank you, Vanilla Ice. But we're more than just rappers around here. We have got some solutions to the problems that we're going to present. And basically what's going to happen here in our problem solver segment. We've got three different problems to talk about, and these are real life examples of hard working individuals and couples who needed a solution. And they were able to work with a mr. Mike Zaino, the guy who is right here with me on the show that is named after him, Money Matters with Mike. Um, they were able to work that out and come up with a solution that fit them in their particular situation and fit their particular needs. So let's go through these. I'm going to present the problem. And Mike, you will present the solution because it's kind of what you do. All right. Here we go with problem number one Jim and Susan or who we're talking about first. They've been married about four decades now. They filed their taxes jointly as a couple. They have monthly expenses of around $7,000. So seven times 1280 $4,000 a year. His income from Social Security is 34,000. Hers is right at 18. So they bring in a combined 52,000 a year from Social Security. They also have a sizable IRA, $1 million. Right. So according to the 4% rule that we talked about a few minutes ago, they're drawing that down by 40,000 a year. So the total income between Social Security and what they're drawing from their IRA is $92,000 a year. Now, on the surface, you say, oh, that's great because 92,000 is greater than 84,000, which is, you know, the amount that they have in annual expenses. But wait, there's more. They did not pay the taxes yet on that money.

Mike Zaino:
So IRA.

Producer:
Yep. So after they pay the piper they are stuck with a retirement income gap. And that is not a great place that they want to be. They want to have more money than month, not the other way around.

Mike Zaino:
Right. And this in this instance they came to me with with with more month than money. So you know the solution to their problem. After meeting with me, Jim and Susan are now going to take 40% of their assets and invest them in in fixed indexed annuity. Okay. And the reason that they're going to do that, this particular one offered them an upfront bonus that was credited to their account. And for now they're going to live on about 100 grand that they have in their checking and savings account, plus their Social Security income just for the next few years. So they're going to defer their fixed indexed annuity. And what that does is allows the income base to continue to grow each and every single year. And when they turn on income in either year three or year four, both Jim and Susan will end up with a significant pay raise, in other words, an income surplus. They will no longer have an income gap just by reallocating money that they already had. Yeah.

Producer:
And it's, you know, comes down to making the most of the resources that you have at your disposal, and it just wasn't necessarily in the right place for their situation. Move it around and there is the solution for them. So good on Jim and Susan for reaching out and getting help with their situation. Problem number two has to do with a widow named Judy. Her husband Jerry sadly passed away last year, but then when that happened, she began receiving his Social Security income because it was the higher of the two. Right? So she got $41,000 a year, which is what he had been getting. But she lost what she had been getting. It's not like she could take both. She could only take one. She could take the higher of the two. So Judy owns her own home. So that's that's good news. She doesn't have some big mortgage payment, but she does still have $5,000 a month in expenses. So that's a pretty penny. And it's also about $1,300 a month more than Social Security is paying her on a monthly basis. So what is the solution for her? I'm hoping that she has some money lying around as well to use, because living on Social Security alone is not going to cut it for her.

Mike Zaino:
It definitely isn't. So, you know, Judy actually decided on purchasing a $600,000 fixed indexed annuity that came with a 10% bonus up front. Okay, so folks, that's. An extra $60,000 before taxes, and then she also had a $500,000 stuck in an IRA that she doesn't really plan on touching. And then she had about $15,000 sitting in her checking and savings account. So by doing that, what she's done is she now has an income surplus because that 600,000, especially with the bonus, is going to pay her a lot more money than she would have gotten had she left it where it is. Okay. And then she has that money that comes in at the end of each year. That's more than what she needs. So what she's going to do in addition to the fixed indexed annuity, there are these products that are called multi year guaranteed annuities. And they can go for as little as three, 4 or 5 years. And so she's going to purchase a multi year guaranteed annuity each and every single year to be able to increase her income and live the retirement that she actually dreamed of. And so Judy is a perfect example of somebody who is paying herself first. She's not waiting and paying all of her bills and then seeing if there is anything left over. She is somebody that's taken that proverbial bull by the horn and, you know, taking life in the cards that life dealt her. And she's playing them extremely well. And by doing so, she's got a bright future ahead.

Producer:
Yeah, absolutely. So and of course, you know, the only thing there that is a sad development is that her husband of many years will not be there with her throughout the rest of her retirement, but at least the at the very least, she is set up financially very well. She's been able to make those adjustments and is, you know, doing very well for herself in her retirement. So great, great job there for her.

Mike Zaino:
And I still hold I still hold out, you know hope for her. I've got a couple of clients that met each other when they were 75 and 76 years old, and they're the cutest couple. And, you know, they were both on their second marriages after each of their spouses had had passed away. So if you're out there, you know, in a recently lost a, you know, a loved one, my condolences. It is never easy to lose anybody that you love, especially a spouse of any significant length of time. But don't let that, you know, burst your bubble and hold on for for the hope that you may indeed meet somebody else. Just like, you know, my cute couple has. And I always refer to them as my cute couple. They are one of my favorite couples. They're in their early 80s now and have been clients of mine for, you know, for many years.

Producer:
Well, congratulations to them that love, that love, that story. Finding love late in life. Well, speaking of someone who is also potentially looking for love, we don't know. This is not a dating show. It's a money show. But still, Dorothy is the subject of problem number three here in our Problem Solver segment. She's a divorcee in her late 60s, so she's approaching the age of 70 here. She owns her home just like Judy does. She owns her home. So that's a good thing for Ms.. Dorothy. She still, though, has to pay nearly $5,000 in property taxes, so that's a big deal that comes her way. Her monthly expenses right around $3,000. So the least of all of our different scenarios here today, social security, though, only pays her about $3,100 a month. And that, folks, is cutting it really, really close when it comes to that. I mean, you've only got a $100 buffer there each and every month, and that's not much of a surplus, Mike.

Mike Zaino:
It's definitely not. But you know, the solution for this. And thank God, Dorothy, the good news is that Dorothy was a really good saver. Right? She saved a lot of money. She lived probably well below her means, you know, while she was making really, really good money. And currently she has about $800,000 saved up, and she still does some part time consulting work in her retirement, which brings in some extra cash. And she doesn't plan on touching any of her savings until she turns 70. Okay, at that point, she's going to take about $300,000 and she's going to guess what folks purchase an annuity. Why? Because it will enable her to generate more income. Until that point in time, she's actually just simply living off of the money in her $100,000 investment account. So Dorothy is a phenomenal example of somebody who has been able to keep her expenses in check in order that she can enjoy her retirement. But more importantly, she has a retirement income plan in place for the future. Okay, so if you're out there listening, you might see yourself in one of these three situations that were presented as problems, and you saw me how easily we were able to. Turn problems into solutions. So whether or not you can relate to these specific scenarios, you need a plan that is tailored to your specific needs. And the way that you get that plan is by picking up a phone and giving me a call at (704) 560-1573, or simply go to Money Matters with Mike all spelled out.com, and get started on the journey towards the retirement that you have always dreamed of.

Producer:
And we always say, Mike, of course they're complimentary. The consultations. We also say that they are comprehensive. They are full retirement plan consultations. This is not just a scenario where you're going to kind of scratch the surface and look at, you know, some maybe glance at some semblance of a budget and say, okay, this is no, it's a deep dive here. Talk about what goes into one of these free consultations. You know.

Mike Zaino:
So the first the first call that we have is probably going to be just a shallow dive, if you will. It's just going to be, you know, finding out about you and your situation and me telling you a little bit about what we do and what we can do, and maybe giving you some examples of what we have done, like we do on the show. A lot of times if you decide that you know what, you want to dive a little deeper, then we're going to help you analyze your complete financial situation. So we're going to look at all the income you have from every source. You have it. You're going to look at all of the expenses that you go out. And we're going to determine what that looks like. Is there a shortfall or is there a surplus. Then we're going to look at are you retired or are you not retired? Okay. If you haven't retired, we're going to put you on a plan so that you don't have as steep of a drop off. Hopefully none. Okay. Once you get to retirement, if you are paying anything in fees, whether with your current advisor or you have a 401 K or any other type of retirement, you know, employee sponsored plan, we're going to try to cut out unnecessary costs, okay.

Mike Zaino:
And that can be in, you know, individual retirement accounts as well. If you have an IRA, if you have money with, you know, Schwab or Merrill or, or Edward Jones or any of the other Wirehouses. Okay. Bottom line is that we're going to compare your situation to what's possible if you work with me. Okay? Also, if you are somebody who's a little bit older in age and approaching either Social Security or Medicare, okay, those are two extremely confusing topics. And so we can help you with Social Security maximization planning, as well as helping you decipher the alphabet soup, as Matt loves to call it. That can be Medicare. Okay. Bottom line, you're going to compare your current situation to what's possible if you work with me. And again, just like I said it before, it's your money. I know it's important to you and therefore it's important to me as well.

Producer:
And that is really what makes it a great, you know, opportunity and advantage or to take advantage of rather and go to MoneyMattersWithMike.com that's the website. Click on the contact page there, fill out that form and request that free no obligation consultation or call 704 5601573. Well, Mike, you mentioned the alphabet soup. And not just because I'm hungry, but because we're going to talk about Medicare. Let's dive into it here. The annual enrollment period for Medicare is upon us. We are we are just in it here. Uh, it's the you know, several weeks out of the year that that anyone who has anything to do with in the Medicare space spends the rest of the year planning for. I feel like it's such a busy time and such an important time for Medicare beneficiaries and recipients. So let's let's take a look here at Medicare and make sense of kind of the different parts, the different options that are available for people. And start out with kind of a, you know, a big high, high level look at this, the 40,000 foot view, if you will, of like how many people we know. It's a big program. Right. But exactly how big is Medicare.

Mike Zaino:
Well, more than 61 million Americans are covered by Medicare health plans currently. All right. That's right. Now as we speak, which is approximately 18.5% or one fifth, almost of the United States population is on Medicare. Okay. And then almost 40%, four out of ten consumers are also enrolled in what's called a Medicare advantage plan. And for 2022, those Medicare beneficiaries have access to 39 different plans. And that's Medicare Advantage plans alone, 39 different choices and 89% of Medicare Advantage plans that were offered in. 2022 also include prescription drug coverage. And that's, you know, according to the statistics provided by the Kaiser Family Foundation. So we're talking about not just a small plan. It's a large, large plan. When you consider that almost one fifth of the American population is on it.

Producer:
Yeah, absolutely. And, you know, dozens of Medicare Advantage plans out there to choose from. And a lot of them offering prescription drug coverage as well, the vast majority. So let's, you know, we'll get to kind of the details about Medicare Advantage, Medicare supplement, things that people have heard about in just a few minutes here, or maybe people have experienced if they're listening to the show and are a Medicare beneficiary as we speak. But let's go with the basics. First off, Medicare Part A, and this information comes to us, by the way, from Medicare.gov folks. So what is Medicare Part A?

Mike Zaino:
Part A is also known as your hospital insurance okay. Part A for for you guys is free. And I say that jokingly because if you've ever earned a paycheck in your life, you'll see that one of the line item deductions while you're working is Medicare. And so because you pay for it for your entirety of your working career in retirement, when you're on Medicare, you don't have to pay a monthly premium. And so Medicare Part A covers your inpatient hospital stays. It covers your skilled nursing facility care. It covers hospice care. And it will cover some but not all in-home health care.

Producer:
Yeah. And one of the things that you'll notice as we go through kind of these things that are covered by the different parts of Medicare, long term care is nowhere to be mentioned. So that is something else that you got to plan for here and not part of Medicare part A, also not part of Medicare Part B so what is included in Medicare Part B?

Mike Zaino:
Okay, so while Medicare Part A is your hospital coverage, I want you to think of Medicare Part B as your actual medical insurance that's going to cover certain doctors services. It's going to cover your physicians, right? Your outpatient care, it'll cover certain medical supplies. It'll cover preventative service. As far as you know, physicals are concerned, mammograms, stuff like that for for women, colonoscopies for men. So some people automatically get part B, but others have to actually take steps and enroll. Okay. And those who don't enroll when they are supposed to, when they first become eligible could be subject to a late enrollment fee. And unfortunately, that fee is permanent as it currently sits. It's a 10% permanent lifetime premium adjustment. And that's 10% more that you'll have to pay if you don't enroll the three months prior to the month of your 65th birthday, or the three months after. You have a seven month window to enroll in Medicare Part B. So make sure that if you're coming up on 65, you understand when your deadline is. And again, I would encourage you, don't wait until the deadline. Just go ahead and get it knocked out. You would, you know, call up Social Security and sign up for Medicare.

Producer:
Yeah, there you go. And so that's Medicare Part A. So that's hospital Medicare Part B basically doctor's visits that sort of thing. Your medical insurance as we say part C we're skipping over now. We have not, you know, left out a letter of the alphabet. We're going to get to it momentarily. But Medicare Part D, another one people need to be familiar with. And of the A, the A, B and D parts the newest one because I think it was maybe 20 years ago, something like that, that it was enacted by by law. So talk about Medicare Part D, Mike and what it provides.

Mike Zaino:
So so D is really, really simple folks. It's the only one that I think actually makes sense as far as the letter and what it's called thing D for drugs okay. It is also known as your drug coverage. And plans cover a wide variety of prescription drugs. If your doctor or your physician, your physician's assistant, whatever puts you on any particular drug to hopefully improve your situation. So Medicare Part D covers your drugs.

Producer:
And that one. Yeah. As you say, the only one that really makes sense. So we've got also some gaps in there. All right. So so some things that are not covered by those three parts that we talked about. And so that's where a medigap or supplement insurance comes in or Medicare Advantage plan. Just kind of a wrap around sort of a plan here. Talk about those two types of insurance and exactly what they offer and maybe the differences between the two.

Mike Zaino:
Right. So, I mean, a lot of people may think that just part A and having part A and part B might cover everything. Those people would be wrong in most instances. Okay. So there are gaps in the coverages and whether it's Medigap which is a supplement, or whether it's Medicare Advantage which is part C that we skipped over and are addressing it now, those types of insurance are designed to fill coverage gaps in both part A and part B plans. And so some of you might be thinking, well, heck, I'll just get a, you know, a supplement and I'll get Medicare Part C. Well, sad news, you cannot have both. Okay. In fact, 81% of beneficiaries, 81% who have both part A and part B supplement their coverage through either Medigap or Part C, or, you know, some of them have to go on Medicaid, and then others still have employer sponsored plans that they're able to carry with them into retirement.

Producer:
Yeah. And so talk about, you know, if someone wants to then couple Medicare with a Medicare supplement plan, a medigap plan, what are some of the the kind of features, maybe advantages and disadvantages of doing that?

Mike Zaino:
Yeah. So a lot of people do this. And, you know, obviously everybody is going to do what's best for his or her own situation. So when you are paying for Medicare Part B because that one has a premium and then, you know, Medicare Part A is free because you paid for it all your life. Well, supplement plans also come with a premium attached to them. So they are more expensive than other plans. But again, they are going to pick up and cover any hospital or doctor that accepts Medicare. And with a supplement, there is no need for prior authorization or a referral from your primary doctor. And this is really, I guess, good for people who have specific doctors or specific hospitals that they want to use. Now, Medicare Advantage, on the other hand, again, that is known as Medicare Part C, that also picks up what Medicare Part A and part B do not. Okay. And it covers the hospitals and it covers the doctors. And it also can can not everywhere, but can include your prescription drug coverage and other coverages that are not included in parts A and parts B okay. And so Medicare Advantage actually operates as both an HMO, which is a health maintenance organization, but it also operates as a PPO. And so you have some freedom. And I can speak from this personally because I am on Medicare, even though I am not age eligible. I've shared with my audience before that almost three years ago now, I ended up in end stage renal failure and I needed an organ transplant.

Mike Zaino:
And lo and behold, I had 17 folks that were willing to give me a kidney and take an organ out of their body and place it into mine, which totally humbled me. Okay, but they started testing with my wife and they never had to test anybody else. So on December 17th of 2020, she gave me her kidney. And folks, I'm here today because of that selfless act. That's the only reason that I am here today. Otherwise, I would have gone on the waiting list and would have had to endure many, many, many, many, many rounds of dialysis just to sustain life. Okay, so like I said, I can speak to that because when you have an organ transplant, you get Medicare all parts for a period of three years. And then, you know, which my third year is coming up this December 31st and I rue that day because folks, I love part A, part B, part C, and part D, and one of the best things I didn't even tell you guys about is that Medicare Part C. Guess what, folks? It can be free. In other words, zero premium out of pocket. Mine is okay. I don't need a referral. I can go wherever I want so I can speak from with absolute certainty, from personal experience, that all four parts of Medicare are the most comprehensive health insurance coverage plan that I have ever had. Yeah.

Producer:
And there you go. I mean, that is a great, you know, sort of testimonial there. And and to to that being the case and folks, if you want to, you know, have as much. Said there are some premiums involved with different parts of Medicare. There are some things that cause confusion. Obviously when you're dealing with different parts and different options and all of that, it's great, obviously, to have choices. But if you have choices, obviously there are some things that can potentially trip you up. And and all of the all of the above. Some things that could be confusing. So go to Money Matters with Mike.com. Call Mike at (704) 560-1573 and get some help walking through this and maybe even how to fund some of those premiums we talked about. Well Mike, that is going to just about do it. Did want to mention here before we have to run that Social Security Administration did announce the cost of living adjustment for next year. This past week, 3.2% as expected, as predicted by the Senior Citizens League. That's what they were expecting. That's what we got. Much smaller than an 8.7% increase that it that our retirees saw last year. But the good news there guess is that means that inflation has come down from where it was nearly 9%. So kind of, you know, good news, bad news situation there.

Mike Zaino:
I think our listeners out there for tuning in religiously for learning about all things money. Why? Because money matters. If you know anybody that could benefit from any of the stuff we've discussed today or any of our past shows, just send them to Money Matters with Mike.com, send them to Facebook and search Money Matters with Mike. And like I said, I hope you all have a phenomenal 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.com or pick up the phone and call 704 560 1573. That's 704 5601573. 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.

Producer:
Remember, all of Mike's listeners receive a free financial consultation just for listening to the show. Visit Money Matters with Mike.com to learn more and schedule an appointment. Thanks for listening to Money Matters with Mike and subscribing wherever you listen to podcasts.

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