Income, Income, Income

12.13.24: Audio automatically transcribed by Sonix

12.13.24: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
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.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. 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 Zeno.

Speaker3:
What's up people? Welcome to the show. I'm Mike Zeno, coming to you from Fort Mill, South Carolina. Happy Saturday. We have got a ton of great information on today's show, because we are going to show you how you can Preserve your legacy and protect your lifestyle, as well as discuss why income planning is vital for a secure retirement. 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. Matthew, how are you today, buddy?

Speaker4:
I'm doing great, Mike. I hope that you are as well. And I am so glad that we are talking about this particular subject today because I, you know, people focus so much on building that big nest egg for their retirement and then hardly at all, it seems, on, okay, how am I going to live on that? Or how am I going to make sure that I actually have income to live on in retirement because the two, you know, are related, but very different things. So you got to have that plan in place.

Speaker3:
Yeah. Income. Excuse me. Retirement is all about cash flow. And so if you have a lot of income coming in, but it's all of it is going out, then basically you're broke and that's not the goal of retirement. So you want to have much more cash flow in retirement than your expenses require, which gives you options. And then all those options, they provide happiness. That's right. While money itself cannot provide happiness, the options that it provides, you absolutely can.

Speaker4:
I love me some options. And that is a very good thing to to have for anybody and everybody. And you know, before we kind of get into sort of the meat of the show here and share our quote of the week, as we always do, kind of toward the beginning of the show. I know we mentioned something on last week's show where you did, Mike, that that really wanted to to emphasize to our listeners once again and bring once again to their attention because, you know, we talk about money a lot and about things that you can do with, with money here on the show. Obviously, it's Money Matters with Mike after all. So that's what we do. But there are ways this particular holiday season they're going to be really impactful, especially for our listeners right here. Whether you're listening on the radio on Rye, right in the in the Charlotte metro area. You can really help out your neighbors this year with money and in some other ways. Talk about this, Mike, because it's super important.

Speaker3:
Right. So we all know that, you know, Florida and the mountains of Northern Carolina were just utterly devastated by Hurricane Helene. That happened back in September. And a lot of folks, because a few months now have passed, might just assume, and I know that the media has reported that things are getting back to normal. But, you know, if you haven't been up there and seen that with your own two eyes, that that is the farthest thing from the truth. I mean, yes, they have just lifted the boil advisory three months later, um, for Asheville. But a lot of those smaller outlying areas are still having to boil. Um, the impact that it's taken for where people are living in temporary shelters, they're living in tents, they're living in sheds, the living in small campers as they rebuild. Well, with the arrival of the holiday season, unfortunately in this area comes colder weather and so staying warm has become an absolutely critical challenge in families have turned to using propane for heat, but they are running out a lot faster than they can actually refill their tanks. So I met this wonderful human named Kelly Tidwell, who established a nonprofit, and it's called the Propane and Power Relief Fund, and he's working extremely hard with his team to be able to supply both tanks and fuel for these people all winter long.

Speaker3:
But his efforts and his team's efforts are limited by the number of available tanks as well as the fuel to fill them. So I kind of got tugged a little my heartstrings, and I am personally getting involved, but there's only so much I can do. But I have this platform and I have a lot of contacts in the business world, so I'm putting it out there. So because we need your help, okay. We are seeking donations of both propane tanks as well as funds to fuel those propane tanks to help those in need. We just finished Thanksgiving. We have a lot to be thankful for. We're approaching, you know, the Christmas holidays full of joy and cheer. And we can impact people in the mountains so, so, so greatly. By number one, donating propane tanks. If you have any old or unused tanks that are just sitting around, please consider just donating them. Okay? They're accepting tanks of any size, whether they are full, whether they are half empty or completely empty, even tanks that are out of date. We don't even want you to fill them. Kelly and his team, they will recertify them before refilling them and placing them in service. But the only ones they can't accept are if you have any damaged tanks with any kind of, you know, nicks or gouges in them, as well as any rust on any of the tanks, they cannot accept those.

Speaker3:
And then what's going to happen is some local friends of ours are going to take these tanks to Kelly in the mountains for refilling and distribution, and your donation will help make sure that these tanks get to those who need them the most during the holiday season. The second way that you can help is to actually donate funds for propane. If you live outside of the immediate Charlotte area, or maybe you don't have any extra tanks to donate, you can still help by contributing to the fund that will be used to purchase propane for the tanks. And as a side note, donations are actually tax deductible, which is a great way to make a difference as well as take advantage of year end tax deductions. And so if you would like to donate online, you can just go to Propane Power relief.com. Again that website is propane power relief.com. Some of you may say, hey, I've got Zelle. I've got Venmo. I'd like to send some money that way. Um, we have QR codes that we can send you if you're interested in doing, uh, a donation that way.

Speaker3:
Just reach out to me and I'll provide you with those. And then if you just simply want to mail a check, you can make the check payable to the Propane and Power Relief Fund and mail it to 1420 Pleasant Vail Valley Road. That's three words. Pleasant Vale Road in Delaplane, Virginia, Delaplane is spelled d, e, l a p l a n e. And the great thing about Kelly is that he only accepts handshakes and hugs from those families that have been impacted by the hurricane that he delivers to. They've been through so much already. He doesn't accept any payment whatsoever from them. So if you have questions about the effort or you would like to donate tanks or money, please leave a comment on the Money Matters with my website page. The Contact Us page. You can message me on Facebook. Just search. Money matters with Mike. Um, or you can text me (704) 560-1573. I will respond as quickly as humanly possible. Kelly and his team's work is making a meaningful impact in the affected mountain areas, and you can be a part of it, too, this holiday season. So I'm going to thank you in advance for your kindness and support because these people need our help. Matt.

Speaker4:
Yeah, they really, really do. You know, it's kind of just tends to be the case that the farther away, the farther removed we get from the date of something devastating happening. Kind of people go about their lives and. You know, it's just human nature. It's kind of the thought is not in our brain, it's not top of mind. And so we sort of forget that our neighbors are suffering and they really, really are, especially, as you said in some of those smaller communities in the mountain areas. And so we, you know, who are more fortunate than they can, can help. And so this is a great way to do that. So, yeah, thank you for for bringing it to the attention of the listeners once again.

Speaker3:
And anything if it's $5, if it's $10, if it's $1,000, like whatever you can do, um, please do it. Okay. Don't delay. These people need our help, okay? They really do. So again, thank you in advance. Yeah.

Speaker4:
And it's the season of giving after all. So just just do that once again. Go to Money Matters with mike.com. You can reach out to Mike for any other information there via the contact page and the other contact information that's listed there on the website. All right. So a lot to get to. You know we teed up just a little bit at the beginning of the show here about income planning, why that is just so, so crucial for you to secure your retirement, to make sure that you have some protection for your lifestyle and live the lifestyle to which you are accustomed. You can do that in retirement, but you've got to have that income plan in place. We're going to talk about that and why it is so important and how you can go about doing that as well. On the other side of this thing that we love to do each and every week, it's getting some inspiration for our conversation with our quote of the week.

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker4:
This time around. Once again, the quote comes from Mr. Warren Buffett. We featured a quote from Warren last week, and, you know, his words are so inspiring. And he is a guy who knows a lot about money. So hey, we got to use them when we can. He is the Oracle of Omaha. And he said this one time, never depend on a single income. Make an investment to create a second source. I'll say that again never depend on a single income. Make an investment to create a second source. So many people, Mike, are living on maybe just Social Security in their retirement years. Uh, Warren Buffett is a guy who I will listen to talking about money, and he says that's not a good thing.

Speaker2:
Hungry for something to chew on? Here's some meat on the bone.

Speaker3:
I don't think anything underscores the importance of multiple streams of income more than event. Excuse me? More than an event that happened in the not so distant future that I think a lot of folks have just kind of, um, purged from their mind. It was 17 years ago, 2008, when we had a financial collapse. Do you guys remember watching on the news, the lines at the unemployment office, the lines at job fairs, because so many people lost their jobs? Well, I was one of those people, and I thought I knew a lot about money. And so this is this really hits home for me right about, you know, making investments to create secondary or tertiary or multiple sources of income. In fact, 2008 is why I now do what I do. And so if I can help people avoid those types of mistakes, um, the same ones that I made, then my mission has been successful, right? So I love the fact that he is teaching people and I on his wings are teaching people how not to depend on Social Security, because after all, we don't know if it's going to be there in the format that it currently exists by the time you folks reach retirement.

Speaker4:
Yeah, something's got to give with Social Security. At some point, some changes will have to be made to either shore it up so it can continue the way that it is now, or some changes on the benefit side will have to be made to maybe cut benefits in the future so that it can continue to at least pay something to retirees in this country. And so that is, you know, one source of income that people will have, but it shouldn't be the only source of income in retirement. One, another source of income that people, you know, for for decades and decades and decades, even beyond that, just, you know, have have loved but not many people have these days is a pension. You know, it used to be and I've said this often, but it used to be that, you know, you'd work for a company for 40 years, you'd retire, you'd get the gold watch, you'd get a pension and head out the door and go live your life with this steady stream of income. Right. And so you would have that income from the pension, you'd have your Social Security and you'd be golden that you were just set. You'd have those two streams of income built in. But that's really not the case anymore, right, Mike?

Speaker3:
It is not the case because employers often do not provide pensions anymore. They have gone the way of the dodo or the dinosaur. Right. But those who have pensions, Americans love their pensions, especially those who retired, you know, in the last decade or 2 or 3 and are still alive. Those are defined benefit plans. Okay. Um, they offered secure, predictable income. And that provided that peace of mind in retirement for those who served those companies over the long haul, rather, and from, you know, the 50s to the 70s, pensions were prevalent. Okay. Over half of the private sector employees were covered under a pension of some sort. And they provided also a sense of loyalty and a sense of security with Lifetime payments based on the years of service, as well as the salary that those folks had come into. But what we're seeing is that since the 1970s and the advent or the advent of this thing called the 401 K, pensions are now disappearing. Companies are shifting the onus and the responsibility from themselves to what are known as defined contribution plans, which pushes all of the responsibility to the employees themselves. Okay. And these started back in the 1980s. The corporations then transitioned from pensions to 401 K's. All right. And they did that to help reduce expenses and simplify plan management. But unlike pensions, 401 K's shifted all of the responsibilities to you, the employees, to fund and to manage all of those retirement investments.

Speaker4:
And I would have to venture to say that most people who are listening are not financial professionals. And so the fact that they are being relied upon to manage their own retirement investments, it can be overwhelming because there's there's a lot that that goes into it. And they're actually. Yeah, there are the you and I both know that. Well, Mike, with all of the different classes and courses that we've taken over the years combined, I know you've taken more than I have at this point, but it's, you know, it's a lot that goes into it. And there are a lot of different decisions that need to be made. And so the fact that these corporations are, you know, putting that responsibility on their employees is in some ways laughable. Something just very quickly here. That is a kind of a funny story about pensions. I actually have a pension. Um, because when I lived in New York for ten years, um, I before I moved back to my home state of Georgia, here in the Atlanta area, um, when I lived in New York for ten years, one of the companies that I worked for before it got bought out by another company, um, offered a pension. And so for the like, you know, a year and a half, two years that I worked under the company A before company B bought it, I've got a pension for that time. And so I'll every once in a while, when I want a good chuckle, I'll go online and check what my monthly payment is going to be in retirement. I'll get about 100 bucks a month in retirement from.

Speaker3:
I was thinking it was going to be sentence.

Speaker4:
Yeah, yeah, it was a pretty good pension plan. But you know, it's it's funny because by the time I retire it, probably with inflation it probably will be worth what a couple of cents is worth today. 100 bucks a month. So so there's that. But you know, I mean, they did exist and they still do exist, but only for a small amount of people out there.

Speaker3:
That's true. I mean, the declination, right. Pensions offerings via companies have been steadily declining since the 1980s as the companies shift the burden to their employees instead of taking it on for themselves. And so today, only 10% of private sector non-union workers actually have access to a pension plan, while 68% of them have access to a 401 K or similar defined contribution plan, like a 403 B, or if you're a federal employee, a thrift savings plan. And that's, you know, based on the latest from Investopedia. But public sector employment still offers pensions for many people, especially those in government roles. But even those are now under pressure due to funding issues. Matt.

Speaker4:
Yeah. So so the question then becomes, Mike, what do you do if you are somebody who does not have a pension to make sure that you are set when it comes time to retire?

Speaker3:
Yeah, I think the the main thing that people need to do is if your company offers any type of 401 K, you need to contribute to it, but more so, more than just contributing, you need to try to maximize your contributions. The IRS sets the limits each and every single year. And so for next year, if you're 49 or younger, you get $23,500 to put into your 401 K. If you are 50 or older or you're turning 50 in that year or older, then you get an extra 7500. So next year you can do up to $31,000. Now some of you listening may be going well, man, I barely make more than $31,000. There's no way that I can do that right. And I get it. But the ability to pay yourself first and the priority that you must make that, um, is going to be paramount to your retirement success. So whatever you can do, do it if your employer offers a match, at least contribute up to the match, but try to get to 15% and beyond. Right. Um, and then if you get a pay raise, guess what you can do instead of taking it home because you're already used to living on that, bump up your contribution to your 401 K or to Thrift Savings Plan or 403 B, okay.

Speaker3:
There are. That's the main thing. Just maximize your contributions, okay. Um, number two, consider Roth accounts because these accounts grow tax free, which means you're paying into the the the account with after tax dollars. You've already paid the piper. And so that money gets to grow tax free for the rest of its life, which can be extremely valuable for long term retirement planning. And then, number three, supplement your regular savings and your employer sponsored plans with an IRA, an individual retirement agreement, both traditional as well as Roth IRAs, offer tax advantaged growth, providing another retirement income stream. The more streams of income that you can have in retirement, the more successful your retirement is going to be. So if you have questions about any of those income sources for retirement, please reach out at (704) 560-1573 or visit us on the web at Money Matters with Mike comm to help discuss. Or so that I can help you, you know, see what your retirement strategies could be if you work with me.

Speaker4:
Yeah, that's absolutely right. And chances are you can improve that situation for whomever might be out there listening and saying, you know, look, I, I can't see the light at the end of the tunnel there. It's all a lot for me. I feel sort of overwhelmed. I don't quite understand. There's a lot that goes into it, as we've been saying. And so Mike Zeno can help clear away those cobwebs for you and help you see that light at the end of the tunnel. Once again, money matters with mike.com is the place to go. And you know Mike. So for pensions being hard to find in the workplace I mean that means a lot for retirees. It places a heavier responsibility, as we've been saying, on the employees, on the individuals to save and manage their retirement funds. And so that comes with some added risks. Let's go through some of those risks that people face because of the decline in pensions.

Speaker3:
I think number one is the over reliance on Social Security. Okay. Social security will typically at a maximum cover about 40% of your pre-retirement income, which means there's that's a 60% reduction if you don't have another plan. Okay. Income sources, other, you know, other income sources, I should say like 401 or IRAs or savings or personal investments, annuities. Very few retirees actually have guaranteed lifetime income that was once provided by those pensions and with defined contribution plans. All the retirees income depends on how well they saved, how well they invested, how well they managed their money, which creates a need for very careful planning as well as professional guidance. Right. I look at my wife, who's a teacher, and I think of all of her coworkers, and they have absolutely no idea which funds they need to be in, how much risk they should be taking. You know, whether this fund is going to outperform that fund. They just don't know because it's not what they do on a daily basis, right. They teach our kids. And so another huge risk is market volatility. Um, how can that affect your income. Well, if you're withdrawing from your retirement funds and your fund, your value is losing money. Guess what folks? That is never going to last you as long as you had hoped it was going to. Okay, so that's where annuities and other income focused investments become extremely attractive.

Speaker4:
You know, you mentioned this a minute ago, and I wanted to sort of delve into a little bit more detail on this while we have the time here. And that is how to maximize those defined contribution plans. Right. You said, you know, maximize your defined contribution plans is one of those things that you really can do to if you are one of the individuals who are the majority that do not have a pension plan, which is a defined benefit plan. If you have a defined contribution plan like a 401 K, 403 b tsp, whatever. What can you do to maximize your contributions there?

Speaker3:
Yeah, I mean, number one you can just contribute more. Okay. That's that's how you can do it and take advantage of pay raises and cost of living adjustments. If you get them you just need to contribute more. Bump them up as your income bumps up. So many people forget to do that. They when they first get hired on, they set it at a certain percentage and it never changes. Okay, well, if you make more, you can afford to contribute more. Um, number two, I think, is to diversify your investments by spreading your risk across different asset classes. Okay. And what that will ultimately help manage that risk. But if you don't know which ones are going to come with more risk, that just highlights the need for some guidance there, right? Another one is huge. Avoid early withdrawals. Stop borrowing from your retirement plan because you know, taxes and penalties. And then the just the the time value and the opportunity cost of money is going to force your future self to kick you instead of kick kissing you, um, for making bad decisions. Right? So number four, you should review your asset allocation regularly. What the heck is that, Mike? Well, when you're young, you can afford to be 100% in stocks and equities and take all the risk in the world. Why? Well, in theory, you have 40 plus years to be able to recover, and over time the market always goes up. So adjusting for age and risk tolerance is key to making your savings last. Because the older you get, the less risk you can afford, because you can't afford to lose money once you near retirement. And then, of course, the last piece of advice that I could give anybody is to meet with a professional that is able to review your options, somebody who is licensed, somebody who has the credentials that you're looking for that can help you get the most out of your hard earned savings. Because after all, isn't that what it's about?

Speaker4:
That's absolutely right. It's your money. You better grow it so that you can keep it, and then you can turn that into income in your retirement years. That really is what it's all about. And just in the last about a minute here, Mike, that we have left in the show. Talk about what the experience is like when someone reaches out to you for that initial consultation, which again, there's no cost and there's no obligation to that, but it's easy to get it by. Going to Money Matters with mike.com. What happens after somebody reaches out like that.

Speaker3:
Right. So I mean, the first call we're going to have is basically just a discovery call. I'm going to learn a little bit about you. You're going to learn a little bit about me and see if there's a fit. Right. See if there's a need for us to continue and actually go into a comprehensive consultation. And then what we're going to do is take a look at your portfolio, look at all the assets, discuss what your financial goals are, what your vision is for retirement. We will look in depth at all of your income and your expenses. We will look at your plan if you have one. Try to identify any leaks or holes that will eventually cause your ship to sink. Um, we will walk you through our recommended plan, and then we'll of course answer as many questions as you have about your retirement. One of the biggest attributes I think I have, and I've been told this is the fact that I have the ability to break down complex financial strategies into plain English, where anybody can understand why I'm recommending what I'm recommending. So if that excites you or piques your interest in any way, please reach out to get started on your own customized retirement plan today, just go simply to Money Matters with Mike comm to our Contact Us page. There's even a risk profile questionnaire you can fill out there. You can also call me at (704) 560-1573, or reach out on any of the socials, whether that's Facebook or YouTube. I look forward to hearing from you.

Speaker4:
Absolutely. And once again, the website is Money Matters with mike.com or on those socials, just search for Money Matters with Mike. Well, that's going to do it for this edition of the show there Mike. But thank you as always, sir, for everything you bring to the table and we'll talk to you again next week.

Speaker3:
Matt, thank you for everything you bring to the table. But again, most of all, thank you to our listeners. Without you, we do not have a show. We mean that from the bottom of our hearts. Listen, at the beginning of the show, we tipped off, um, the Propane and Power Relief Fund. If that has tugged on your heartstrings like it did mine, please don't delay because they need your help today. And as a last reminder, if you are 73 this year, your RMDs are due by the end of December, so you have just a few days left to get those in. Folks, whatever you're doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with Mike mike.com. Or pick up the phone and call 704 560 1573. That's 704 5601573. Not affiliated with the United States government. Mike Zeno 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.

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