10.21.22: Audio automatically transcribed by Sonix

10.21.22: 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 worked 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 live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Fall is in the air, and this time it looks like it's staying. But today we are absolutely going to bring the heat again. The whole goal of our show is to give you useful information that you can chew on with our meat on the bone segments each and every single week. I'm really super excited for today's show. On how inflation is casting a shadow over the 2022 holiday season. And once again, I have the distinct honor and privilege of being joined by the one, the only Mr. Matt McClure. Matt, how are you doing today?

Producer:
I am doing great, Mike. I am having a great weekend so far and I can't believe the holidays are almost here.

Mike Zaino:
My goodness. It's scary, isn't it? I walked into Lowe's the other day. I mean, this was like a week and a half ago and they already had Christmas stuff out. I'm like, Guys, it's not even Halloween yet. Come on, give us a break.

Producer:
Yeah, seriously. I remember a few years ago, this is back when I lived up north and I walked into the Macy's at the at the local mall there, and it was September. It was literally was late September. And they had the Christmas stuff out. I'm like, okay, guys. Too soon. Too soon. It was like like it had been barely been Labor Day, you know.

Mike Zaino:
I hear you. We're like still kind of maybe we have a glimpse of summer yet, although I don't think we got anymore because I think we had our first frost last night. But on the same token, it's like Christmas music is going to start coming out. Please don't rush the year away. I like Christmas as much as the other person. I love Thanksgiving. I love Halloween because I eat a lot of candy, but I probably shouldn't do that. But, you know. Please Wait.

Producer:
Well, I tell you what, we are not waiting to, as you say, bring the heat for the listeners today. We got a lot of great info to share. We have a lot of wonderful tips and all of the above. In the Meat on the Bone segment especially, we're going to have a cost cutter for folks. We got the market update, We're going to talk about the annual enrollment period for Medicare, which is going on now. So a lot of great stuff to come up in the next hour. So I think it's just my own personal opinion. I may be a little bit biased about it, but I think folks need to not go anywhere over this next hour because there's really a lot of great stuff to be had and to be digested.

Mike Zaino:
Matt, I agree with you 100%. If you are driving, you may want to pull off and enjoy the brisk air and listen and pay strict attention to what we're going to tell you today, because this will definitely affect you moving forward.

Producer:
Yeah, absolutely. And folks, if you hear anything that you're interested in that does pique your interest and you want to know more or you want to get in touch with Mike Zaino for anything at all regarding what you hear on the show today, MoneyMatterswithMike.com Is a great place to go. That is the website for the show. You can also give Mike Zaino a call at 704 560 1573. As I always say that that rings right to his phone and it does. I'm not just I'm not pulling your leg about it. It rings literally to the phone that is in his pocket at this very moment. 704 560 1573.

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

Producer:
Well, we have sort of remember that the Doublemint gum commercials, mcFlurry, it's like double your pleasure, double your fun with the twins, like with the twins riding on the the tandem bike and all that over swimming and that kind of thing. This is kind of like that.

Mike Zaino:
Had a crush had a crush on the blonde twins

Producer:
Yeah. Those. Those commercials are actually great. That's back when you could, like, really remember commercials. Like, they were very inventive and all that. That's one that I'll always remember, I think. But today's kind of like that with our quote of the Week, because we have quotes of the week this time around, both very appropriate, I feel like, for what we're going through in the economy and in just life in general. I think right now the first one comes from Jack Bogle or John Bogle, as his mother called him, I'm sure, especially when he was in trouble. But he's somebody who didn't get in trouble too much in business and in the markets. And all of that was an American investor, philanthropist as well, credited with creating the first index fund. I mean, just a very, very famous guy of Vanguard fame, etc.. So this is what John or Jack Bogle said, quote, If you have trouble imagining a 20% loss in a stock market, you shouldn't be in stocks. We don't have a hard time imagining that today.

Mike Zaino:
Not at all. Not with the market is volatile as it's been and the pain that all of our listeners have felt really since September of last year this year has been absolutely abysmal in the market. So if you don't have the stomach to witness a 20 heck, 30% drop, then you probably shouldn't be in stocks like a very wise man once said.

Producer:
Yeah, absolutely. And so that's number one, as I said, very appropriate. Another one that's appropriate for these days is from a guy I know you really, really like because he was your commander-in-chief, the 40th president of the United States, Ronald Reagan, who, of course, as if anybody needed a refresher on this, served from 1981 to 1989. He said this, and I quote, When a business or an individual spends more than it makes, it goes bankrupt. When a government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident.

Mike Zaino:
Wolf. Man, that is some powerful words. Spit by our president, former President Ronald Reagan. I mean, think about that for a second. Tax and inflation. And that's absolutely what is about to become an avalanche that hits America in the coming future. We know the exact date that the current tax cuts are set to expire, that they're good through December 31st of 2025. So unless something happens January 1st, 2026, or during that year or possibly before then, your taxes are going up. Meanwhile, you've got that silent tax, the inflation.

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

Mike Zaino:
In the last couple of weeks, we have discussed the first two stages of creating a solid financial plan, the first one being goal setting, and then the second being creating a budget. Well, today in our Meat on the Bone segment, we're going to talk about that third step, which is mitigating risk specifically when it comes to generating tax free retirement dollars. And on this show, we often discuss the benefits of using a Roth IRA or a Roth version of your 401 K or other type of employer sponsored plan. We also talk a lot about the advanced form of life insurance called an IUL or indexed universal life and how that could also fit into your portfolio. And while the Roth IRA can be a great vehicle to generate tax free wealth, I want it to visually show you the difference between the two by comparing a Roth IRA to what has been called a rich person's Roth. And no, you don't have to be rich in order to participate in one of these plans, but you do have to qualify. So if you are driving right now or if you're listening to the show, either on the radio or on podcast, please make sure that you visit MoneyMatterswithMike.com. So that you can watch the visual demonstration of what I'm about to teach you.

Mike Zaino:
So on the left-hand side of the screen, what you're going to see is the Roth IRA, and we're just going to talk about it first. These here are you contribute to the Roth IRA with after tax contributions, which means that your money is going into the vehicle. Most of the time, these Roth IRAs participate in the stock market. And here's the issue with that. When the market goes up, the market also goes, what, down? And so then it goes up again. But then it goes down again, consistently going up and consistently going down. And you know that this year it's pretty much been all of the way down. So you're riding that roller coaster. And if you have a 50% loss, think about this for a second. You have to get a 100% return just to get back to even. Heck, if you have a 20% loss or a 30% loss, let's call it 30% loss, you have to generate a 43% return just to get back to even. And so most of our listeners that are right knocking on the door of retirement or have just retired or are in retirement and have been for some time, the biggest luxury that you don't have is time. And so when you contribute to a Roth IRA, you're subjected to the age 59 and one half rule, which means that if you touch that money, if you take money out before you're 59 and a half, there is a 10% IRS penalty if you're under that age.

Mike Zaino:
There are some exceptions If you're using the funds to purchase your first home, if you're using the funds to further your education through college, or if you have the birth of a child, you are able to access those funds. Otherwise you have to wait the five years in order to gain the protections of the Roth, which means tax free growth. Otherwise, you can only withdraw what you put in because you've already paid the tax on that, plus the interest plus penalties, compound interest. If you go to take money out of the Roth IRA, your compound interest growth is interrupted. It stops growing because you've just taken money out and there is no legacy, which means your family, when you pass away, only gets what's left inside of the account and it is subjected to. Attribution limits, both from an income standpoint and from an ability to contribute on a dollar amount. This year for 2022, it's $6,000 if you're under 50 years old and $7,000 if you're over 50 years old. Now, I want to contrast that and compare that to what Forbes actually called the rich person's Roth.

Mike Zaino:
And in other words, it's it's an indexed universal life policy. You're still contributing after tax contributions, but here you're not subjected to any risk because you participate in the gains of a market linked index. So when the market goes up, you go up, but you don't participate in any of the downside. So when the market goes down, you just go straight across. Then when the market picks back up, you pick back up and so on and so forth. So it's kind of stair stepping your wealth over the course of time. And guess what? There is no age 59 and a half rule, which means there's no penalty if you access those dollars. Also no restrictions as to when you can access that. And whereas in the Roth IRA, you have to wait five years before you get the protections, you are literally protected from day one inside of the rich person's Roth, better known as the IUL. Another thing is that you can access this money at any time for any reason. So if you want to purchase a second home, a third home, a vacation home, an Airbnb home, if you have other investments that you want to make, if you want to buy an Airbnb, like literally any other thing that you can spend your money on, you can tap into your IUL at any point in time.

Mike Zaino:
It's almost like you're becoming your own bank. In fact, there are books that have been written about this. If you don't believe me, check out the retirement miracle. Check out the power of zero. Check out Be your own Bank. Those are three titles about the advanced usage of the indexed universal life plan. Right. And then when you pass away, here's another beautiful thing. Your family gets everything. They get the cash value and they get the insurance benefit. As far as the tax free death benefit that it provides. And guess what? Unlike the Roth IRA, where you are limited by an income standpoint of whether or not you'll even be able to take one out. And if you are, you're limited by contribution limits. There are no contribution limits or income limits with the indexed universal life. So again, you have the ability to participate in a rich person's Roth, but you absolutely have to qualify. And if this is something that you're interested in finding out whether or not you do qualify, pick up a phone and call me at 704 560 1573 or visit Money Matters with Mike dot com and fill out a contact request form and I'll get in touch.

Producer:
That's great. And you know, it's an interesting way to put it and I think a very brilliant way to put it, because I've always sort of just looked at, you know, a Roth IRA and IUL indexed universal life is kind of to sort of separate things. But here it's kind of like switching up the script. You're looking at it like two sides of the same coin, which when you think about it, it really is. And you know, there could be advantages and disadvantages for folks from, you know, either one. But the indexed universal life makes a heck of a lot of sense since rather since you are participating in those gains, but not the losses. And, you know, it reminds me a lot of, you know, the other annuity products that we'll talk about, like fixed indexed annuities, same sort of, you know, stair step growth where you see the upside but not the down. I think a lot of people, especially in times like these, are looking for something like that.

Mike Zaino:
Yeah. And this is when people have to stop looking at the life insurance component as another bill they have to pay. And though we can't legally say that you can invest in life insurance, what you're doing is you're putting your money into a vehicle that never participates in market losses. So if you're in the Roth IRA, you're riding that wave, whether it goes up, whether it goes down, and when it goes down, it takes sometimes twice as long to come back as far as the amount of gain that you need. So that's why Forbes called this the rich person's Roth. Think about that for a second.

Producer:
That's very true. I love that. I always love our Meat on the Bone segment. I think today is probably going to go down as one of my favorites because I always I always like learning. I always learn something during the Meat on the Bone segment and which is how I know that our listeners do as well, because I'm I'm probably, you know, slightly less smart than a lot of people out there. What I think that this is this is great. And I think it's going to really help a lot of folks really sort of rethink a potential aspect of their retirement. So that's that's awesome. Well, speaking of gains, people who are taking part in Social Security, who are getting to that age or who are already in the system are going to be getting some more money next year. We just we learned what was last week that the COLA adjustment and no, we're not talking about, you know, Coca-Cola or Pepsi Cola or RC Cola, any of the COLAs. We're talking about the cost of living adjustment in Social Security and it's a big one this time around, Mike.

Mike Zaino:
It is a big one. The increase for 2023 is actually going to be 8.7%, and that's up from last year's 5.9% cost of living adjustment, which brings the total for the two year increase to 14.6%. We're finally seniors are finally who are drawing that Social Security benefit are being paid for the last decade where they haven't gotten those cost of living adjustments simply because we are living in the worst stretch of inflation that we've seen in 40 years. The good news is that your Social Security income benefit has a built in adjustment to help protect your buying power. And that's what we're seeing now and have this year and will next year with an 8.7% increase. The bad news, however, is that inflation is still wreaking havoc on American families, particularly in the following areas Your food costs, your energy costs, your new and used vehicle cost, and then travel costs. And this is part of why we want all of our listeners to have a solid and tested plan for protecting and growing their hard-earned money. You need to outpace inflation in order to protect your buying power, and we can help you do just that.

Producer:
And I always say, you know, you've worked hard for your money throughout your life. You've worked hard to save that money to to invest that money to to do whatever you're doing with that money. You've worked hard for it, put it to work hard for you in retirement as well. And so that is the goal here. And, you know, folks, one thing that Mike does for all of our listeners is offer a free, completely obligation, free, completely cost-free, full retirement plan consultation. And Mike, tell the folks about that and exactly what they'll receive when they reach out to you.

Mike Zaino:
Okay, Matt. No worries. All right, so you're only going to work with me if I can do better for you. I'll help analyze your current situation because it's specific and unique to you. And everybody is different, and there is no one size fits all. I'm going to try to help you discover how much you're actually paying in fees and help you cut unnecessary costs in your IRAs. 401 ks Any other type of retirement savings vehicle. If you have any other annuities that are in place and they're the old school annuities, we're going to closely examine any of those that you might have, and we can help you with both Social Security planning as well as Medicare planning. And so if you feel like you've already learned something today, please give me a call. I would love to help you answer any questions about your specific and unique situation.

Producer:
I know you've learned something already today, folks. I know I have. So I know you have 704 560 1573. Is that number to get in touch with Mike Zaino That's 704 560 1573. Or you can go to the website MoneyMatterswithMike.com. Well, as part of that full retirement plan consultation, Mike, you mentioned their Social Security, which we just talked about. You also mentioned Medicare. And this time of the year we are right in the thick of things as far as a very, very important time for Medicare. It is the annual enrollment period. And this is this is crunch time for folks who want to take a look at what their coverage, their Medicare coverage is going to look like next year.

Mike Zaino:
It is. It's we're going to take a little bit closer look and try to make sense of all these parts. And I can promise you that if you're already on Medicare or if you're turning 65 this year, you've probably just been absolutely inundated with junk mail, with phone calls, robo calls, everybody trying to sell you this, that or the other. And like I said a second ago, I'm just going to try to help you make sense of it. So October 15th, we just completed the very first week of the annual enrollment period through December 7th. That is the window that the government has said if you're going to come on board, you can come on board. If you're going to make changes, you can make changes. This is their annual enrollment period, which is different than a special enrollment period. So Medicare has four parts and I'm going to go through them relatively fast because I know it can be extremely confusing because it's a very comprehensive health plan. So Medicare Part A is also known as hospital insurance. This is the one that covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. It is free in retirement. And I say free in retirement because you have paid for it your entire life. If you ever have a question about whether or not you're paying for Medicare, just look at your pay stub and see as it as it comes out.

Mike Zaino:
So in retirement, it is free. That's Medicare Part A medicare Part B is also known as medical insurance. This is going to cover certain doctors services, outpatient care, medical supplies and preventative services. Some people automatically get part B, but other folks actually have to enroll. And you want to enroll as soon as you turn 65, because you could be subject to a late enrollment fee if you don't sign up for Medicare Part B when you are first eligible. Medicare Part B has a cost. It has a monthly premium. The good news is this year it was one 7010 at the lowest monthly premium next year. Believe it or not, it's going down by about $5. So that's exciting to save you an extra five bucks, be able to pick up a Starbucks coffee. No, scratch that. We talk about the latte effect. Don't do that. Keep it in your pocket. We're going to go to Medicare Part D, which is also known as drug coverage. To me, it's the only one that makes sense. You just think D is for drugs. And the plans cover a very wide variety of prescription drugs. That's Medicare Part A, medicare Part B, Medicare Part D. Then you have this thing called Medigap or supplements, and then you also have what's known as Medicare Advantage.

Mike Zaino:
And these types of insurances, they're designed to fill the gaps, the coverage gaps that part A and part B plans don't cover. But here's the thing. You can't have both a supplement and an advantage plan. About 81% of beneficiaries who have part A and part B supplement their coverage with either. There Medigap, Medicaid or other employer sponsored plans. And when we combine Medicare with Medigap or a supplement, obviously that's going to be more expensive than other plans, but it covers any hospital or doctor that accepts Medicare and there's no need for any prior authorization or referral from your primary doctor. This is great for people who have specific doctors or hospitals that they want to use. Well, then there's Medicare Advantage, which is also known as Medicare Part C. Medicare Advantage plans cover hospitals and doctors, and they often include prescription drug coverage and other coverage that's not included in parts A and part B so they can operate as both an HMO or a PPO. And so, as you can see as a whole, extremely comprehensive, extremely confusing. And so if you need help putting the pieces of the puzzle together and kind of streamlining what would be best for your, again, unique and specific situation, visit our website. Give us a call today and let me know how I can help.

Producer:
Yeah, and that is a great point to to make over and over again, because it's really one of the points of the show, of course, is to to educate folks, to let them know what the options are that are out there for them, but also to let them know that there is no one size fits all, you know, plan for retirement. There's you know, there's not okay, you hit 65, you go down the street to the retirement superstore and you get the box off the shelf, you go to the checkout, you're done. You know, that's not the way that this works. It's there's no big box store for this. Everybody's situation is different. Everybody's situation is unique.

Mike Zaino:
That is 100% accurate in your statement.

Producer:
But hey, I like that. I got I got it right. Well, if you want to to find out more folks about your own particular situation, as we said a few minutes ago, that free consultation is available to you by going to money matters with mike dot com. That's MoneyMatterswithMike.com, all one word. And then you can also give Mike a call directly at 704 560 1573. 704 560 1573. All right, Mike, so now, you know, we're getting close to Halloween and we talked about talked about a little earlier with, you know, getting close to the holidays. I actually like Halloween. I, I love Halloween, I think because I always loved the weather around Halloween time. Like, the leaves are really pretty and it's, you know, and all that. And as a kid, of course, I go around and I would get candy and get like, you know, dress up and all that stuff. But now this year, I think it's going to be frightening for a lot of people and not just because of people in scary costumes running around. It's when you buy the candy. I feel like people are going to be a little frightened.

Mike Zaino:
I think they are, too, because we talked about inflation and how the different things are going up. The cost of goods and services, the cost of candy. Candy is up 13% just in time for Halloween. Isn't that great?

Producer:
Don't you love how the timing works out like that? Sometimes we need to buy a bunch of candy. Well, candidates are going to have to pay 13% more than last year. Sorry, guys.

Mike Zaino:
Oh, my word. It's like we love the day after Thanksgiving when all of the Reese's eggs are on sale and half off.

Producer:
Oh, yeah. Well, and that's the thing. I go, you know, to the Walgreen's or the CVS or whatever store, and they'll always have still aisles and aisles and aisles full of candy. And it's all led literally like slashed in half, at least price wise. So, yeah, that's the time to go buy it.

Mike Zaino:
Yes, absolutely. I mean, but unfortunately, the kids are going the know before. Right?

Producer:
So convinced. Just convinced all the kids in your neighborhood that Halloween is the next day and then you'll be great.

Mike Zaino:
Oh, my word. So that 13% increase, that is the largest yearly jump in candy prices since the Consumer Price Index has ever recorded. Since it's been around and it's existence, it's never jumped 13% for comparison. It took nine years from 1997 all the way to 2006 for candy prices just to go up 13% nine years. We did it in one.

Producer:
It only took us a year to do something that it used to take us. Nine.

Mike Zaino:
Right. Right. And I think a driving factor in that. What's the number one ingredient in candy?

Producer:
Sugar.

Mike Zaino:
Sugar. Right. Sugar is up over 17% since last September. And then flour has risen even more. It's a. It's up at 24%. I know a lot of Halloween goodies have some flower in it as well. So, I mean, just it's unreal how much inflation is impacting the candy that we hand out on Hallows Eve. Right. Crazy.

Producer:
It really, really is. And I mean, you know, it's another thing to add to our sticker shock here. And something else, too. I feel like that people, you know, might need to be aware of before they go out costume shopping is the fact that the costumes are going to be more expensive this time around as well?

Mike Zaino:
They are. The costumes jumped five and one half percent. And so I know a lot of people out there are pretty thrifty and their mom or grandma might be able to do some sewing. But guess what? Handmade costumes cost even more. Sewing machines, fabric, those types of supplies, they're up 11%. So that's literally double of the five and one half percent. You may as well just go buy it at the costume store.

Producer:
Exactly. Well, yeah, that's the thing. If you if you have some old fabric lying around and if you already have those supplies, if you have the thread, if you have the sewing machine, if you've got everything in your house already, you're golden, You're great. Otherwise, if you've got to go out and buy it, you're going to be paying a little bit more, a.

Mike Zaino:
Little bit more. And again, staggering statistic. But even though the price of sugar has risen 17%, Candy is up 13% and home supplies for homemade costumes are up 11%, according to the National Retail Federation. Halloween spending this year is expected to reach a record $10.6 billion in 2023.

Producer:
Yeah. Wow. I mean, that's just that is a staggering, staggering number there. And I got to speaking of costumes, I got a question for you, Mike. Did you ever dress up much when you were a kid for for Halloween?

Mike Zaino:
As a kid all the time. And even as a you know, when I was a young I don't even want to call myself executive, but I remember one time I went as a pregnant woman and, you know, it was it was the most backbreaking experience that I ever had. All I did was carry a pillow on my belly, and it gave me a total respect for all the women out there that have to carry an alien on them for nine months.

Producer:
Exactly. Exactly. Oh, talk about backbreaking. My goodness. Women, you have our sympathies and all of our respect out there. Amen. Yeah. No, I. I used to dress up a lot when I was a kid. I remember my. I think my favorite Halloween costume. Probably two of them from when I was little. One was there was a costume contest at church when I was I don't know, it was like five or six. There's a photo of it somewhere, and it was a handmade I don't know if my mom made it or somebody made it, obviously, because it was handmade. It was I was dressed up as it was as a biblical character, I believe I want to say Moses. I don't know why I want to say Moses, but I want to say Moses. But I just imagine myself carrying the staff around and being like, you know, parting the Red Sea of like people trying to get down the hallway of the church or something, you know? Choir set my people free or, you know, something like that. But that one was cool. But then the other one that wasn't quite as church appropriate was going as a vampire. I used to love to go as a vampire when I was a kid. I think it was because I had I got my dad's hairline and so it was easy to like draw the widow's peak on the front. You know.

Mike Zaino:
I actually went as Count Dracula one time.

Mike Zaino:
Remember that. I was Batman. I was Superman. I think I was Rambo. I mean, I. I watched a lot of different things for sure. But by far, like I said, when I dress as a pregnant woman, as a young adult, that one was. Oh, yeah, word just absolutely backbreaking.

Producer:
I can only imagine. Well, as an adult I worked and and and we'll move on after this. But I worked for a couple of years at this is when I was it was I was late in high school. I was like 18, I think. So I was just an adult, barely. And I worked at a now defunct video chain, Blockbuster Video. And I they'd let us dress up as a as a movie character as like a favorite movie character. So I went as Darth Vader.

Mike Zaino:
Nice.

Producer:
That helmet got hot after a while. I'm just going to say. But that was a favorite of mine too.

Mike Zaino:
That's funny. So, you know, another thing that that a lot of folks may have been feeling the pain on, especially in the last little bit, last few months even, is housing and how mortgage rates are just sky high right now. I mean, we're talking about the upper sixes, like 6.9 to 7% on a mortgage rate where just a year or two ago, I mean, people were refinancing in the twos. So, I mean, that is a huge jump. That can mean hundreds of thousands, if not thousands of dollars on some larger home purchases each and every single month. So, I mean, you got to look for different ways to cut costs when inflation is as high as it is now.

Producer:
Yeah, it's very true. You know, I mean, and we're seeing a couple of things happen in the housing market at the moment. You know, we're seeing people actually slash prices of the list, prices of houses more than we've seen in a long time because they're used. We got so used to this hot, hot housing market with bidding wars in a house only staying on the market for a day or so and all of that sort of craziness. But now it's not the house, the housing prices themselves that are necessarily pricing people out of the market. It's the interest that you're going to be paying on that loan that's doing that's doing that job and really, you know, causing people to to think twice about entering the housing market right now. And that's really what I think one of the Fed's kind of goals actually, with raising interest rates is to cool things off so that we don't get as much inflation. And hopefully, you know, prices will start to come down eventually because they're trying to tamp down demand. That that's the goal there.

Mike Zaino:
And creating a recession.

Producer:
I mean, you know, that's the thing is they always try to do this dance, right, where they don't go too far. And it's like, okay, yeah, it's like they can't.

Mike Zaino:
Do far and it doesn't look like it's slowing down.

Producer:
So, yeah, well, they say they're going to go even further. That's the thing.

Mike Zaino:
Yeah, Yeah. Recession. Here we come. Right we are.

Producer:
Right. Well, there you go. Well, that's that's the look at the housing market for right now. And it's a it's a tough one. So, you know, be proceed with caution, if you will, as we look at the scary, scary housing market right now. And that, I promise, folks, I think anyway was the scariest part of our show today.

Producer:
Here's the cost cutter of the week.

Producer:
All right, Mike. So cost cutter idea for folks. You know, we've been talking a lot about price increases, inflation, interest rates rising. So people are like, okay, where can I save money? I got to save money wherever I can. What's our cost cutter idea for the day?

Mike Zaino:
I think this year coming into the holiday season, you guys need to really examine whether or not it is worth it to take holiday travel, especially holiday air travel this year and maybe this year is one that you opt to stay home for the holidays. We we looked at an NBCNews.com article and it was saying that Thanksgiving airfare prices round trip are up 25% from last year and that's according to travel booking group Hopper. And I can tell you from personal experience that that is absolutely true. My wife and I this year, because our kids are grown and out of the house and one's a senior in college not coming home at the time for Thanksgiving or she's coming home like just for a couple of days and we'll still get to see her. We said, hey, let's go to the islands. We're going to go to Saint Croix. And so I went to go book airfare and just roundtrip airfare, leaving from Charlotte to Saint Croix and then coming back and making two different stops, flying to JFK and coming back. That was the cheapest way I could get it. We're looking at $4,000 for that airfare. So I'm like, we need to consider not going because there's no way I'm spending, you know, twice what I spend on a vacation for a week just on airfare to get there. And for Christmas travel. Those airfare prices are up 55% from last year, and that's 19% higher than in 2019. So, yeah, you may want to stay home because those are the highest levels in at least five years, according to the website. Meanwhile, the cost of fuel jet fuel remains elevated, thanks in large to the part that the war in Ukraine and the decrease in crude oil refining capacity is causing. So again, you might want to stay home and closely, closely examine whether it's going to be worth it for you to take air travel this holiday season.

Producer:
Yeah, And you look at the you know, one of the things that you mention there, the war in Ukraine, people are like, well, why is that have such an effect? Well, basically, Russia's entire economy is built around the oil and gas industry like that. They have they have one industry there. And so when they do something that's going to cause them to get cut off from the rest of the world, that cuts off a huge supply of the oil and gas that goes around the globe. And so that is one of the things that's really causing those prices to skyrocket.

Mike Zaino:
Yeah, it's ridiculous right now. Absolutely ridiculous.

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

Producer:
All right. Yes, it is that time once again for me to present Mike Zaino with some statements and he gets to tell me whether I'm right or whether I am wrong. And we'll see how it goes this time around. All right. I'm all.

Mike Zaino:
Right. Let's do it.

Producer:
It. I'm feeling fairly confident. All right. I just got to say, it's good to put that out there. I'm feeling fairly, at least fairly confident. All right. Here's statement number one. We'll see how confident I am after this statement. Number one, in right or wrong, life insurance can only be used as a death benefit and provides no other features unless the policyholder dies. Is that right or is that wrong, Mike?

Mike Zaino:
Man. I think you know the answer to that. Even though you asked me the question that is wrong. We talked about in our Meat on the Bone segment, one particularly really fine example of how life insurance can be used for money for the living or money for the living after the insured passes away. So permanent life insurance builds cash value, and some policies are tied to an index that provides growth potential that can give you tax free retirement income. Plus you have the ability for living benefits that protect you if you ever get a chronic critical or terminal illness. So think about this. It protects you. If you die too soon, you got the death benefit. It protects you. If you live too long, you've got guaranteed tax free retirement income for life, and it protects you if you get sick in between. So, Matt, you got that one wrong, brother.

Producer:
You could you could tell by the tone of my voice, I. I knew that one was wrong as I was as I was telling it to you there. But, you know, okay, I'll get that one wrong. I'll take that one for the team as we move along here, because that's again, as we talked about that in our Meat on the Bone segment, That's just great info for folks to really think about. You know, it's not your your just your grandfather's life insurance anymore. There are different options out there for you. All right. So number two, in right or wrong, you can enroll in Medicare and change your coverage plans at any time. Is that right or is that wrong, Mike?

Mike Zaino:
Matt, I don't know how you were so confident coming into this segment and asking me these questions. That's wrong to my man. I mean, yes, there are special enrollment periods where you've had a life event that would enable you to come in. Otherwise you must enroll in Medicare and make any adjustments during a EAP, the annual enrollment period, which this year runs from October 15th through December 7th and the first week is already gone.

Producer:
Yeah, running out of time quickly here for the annual enrollment period in Medicare. All right. So I'm I'm batting zero right now. My confidence was misplaced, apparently, as we started. Right or wrong here. Maybe I can redeem myself, work my way back to Hall of Fame numbers because we got two more. I'm just going for at least 500 at least. All right. So here's statement number three. So you can use an annuity to fund your Medicare expenses throughout your entire lifetime. Is that right or is that wrong?

Mike Zaino:
Matt, you got that one right. In fact, we believe that this is a smart idea. It's a great step to ensure that both you and your spouse will be able to fund expensive health care costs during your retirement.

Producer:
You know, we mentioned Medicare. We mentioned all the different parts of Medicare. And some of those, of course, are are free, as you put it in air quotes earlier. But some of those others, you have to you have to pay for out of out of your pocket in in retirement as your Medicare recipient. Right. So the other part you've paid for throughout your working life, this part you have to pay for in the form of premiums or co-pays or whatever. You have to pay for those other parts of Medicare. So, yeah, this is an important thing because it can be pricey. You know, it's retirement and and, you know, being a medicare recipient, not necessarily free. So wouldn't it be nice if it was?

Mike Zaino:
Well, I mean, if you strategize for it and you have an annuity that's covering the cost of it because you've done some planning earlier on in life, then in essence, I mean, it's not free, but you don't have to worry about where that money is coming from because you already had a plan.

Producer:
Yeah, it almost it feels like it's free anyway then. So there you go. All right. So number four in right or wrong, and this one is I'm trying to get to 500. I'm batting, what, 333 right now. So let's see if I can work my way back up. This one is the last chance that I have to do that. And the statement is Your Social Security benefit can increase annually due to inflation. I already I already know this. Just just so we're all clear, is that one rider, is that one wrong? Like I was paying attention earlier, I promise.

Mike Zaino:
So you were paying attention. So therefore, you know that. That is correct. That is right. In fact, there have only been three years since the cost of living adjustments first began back in 1975 where there wasn't any increase, and that was in 2009, 2010. Go figure why. Right. And then 2015, there have been increases every other year. And in 2023 you guys are going to get an 8.7% increase. So that is phenomenal. And Matt, you are right.

Producer:
There we go. So I got myself back to 500. I love that. And yet so the only other time actually, because we were looking at these numbers earlier on in the week, the only other time that the cost of living adjustment has been higher than it has been right now. You know, we talk about all of these different sort of markers being the higher than they've been in 40 years. Well, that's also the case here. It was the it was the early eighties when we saw inflation really wreaking havoc on the economy then even to a greater extent than it is right now. Now we're seeing the highest cost of living adjustment because we have the highest inflation that we've seen since the early eighties. So in in 40 years, we haven't seen this. And, you know, I mean, it's as we said earlier, it's kind of it's good news. Bad news. Good news is there's more money coming in. But the bad news is, is those those pennies don't go quite as far as they used to.

Mike Zaino:
No, they don't.

Producer:
So, you know, Mike, we've had a lot of the sort of doom and gloom talk today. We're approaching Halloween, so I guess it's kind of appropriate. But we've been talking a lot about inflation. We've been talking about. Yeah, exactly. Scary, scary stuff. We've been talking about, you know, candy prices obviously being part of that inflation, those prices getting higher, home prices, the interest rates getting higher as well in an effort to curb the inflation. But it's all coming together in that like storm of craziness. So now I wanted to share something that might be a little bit better news, I think, for our listeners, and that is saving money on taxes, which I think sounds great to everybody. And the reason that you can possibly do that is because the IRS has. Just adjusted the tax brackets for the year 2023. So next year's taxes. I did a piece on this. I just just finished it up. Listen to it a couple of minutes here and we'll talk about it on the other side.

Producer:
Could a recent IRS change actually save you money on next year's taxes? I'm Matt McClure with a retirement dot radio network powered by Amerilife. When you think of the Internal Revenue Service, your mind may very well recall the sting of forking over your money to Uncle Sam or the hassle of preparing your taxes. A recent study by the American Action Forum estimated Americans spent more than $190 billion. That's billion with a B on tax preparation in 2021. Plus, many economists predict the federal government will have to raise taxes in the future to pay off the national debt. But there's one change the taxman is making for 2023 that could actually mean you'll owe less in taxes next year.

Andrew Pelosi:
How much you save will be relative to your personal situation. So it's not going to be the same for every household, but certainly it could have a nice little savings come tax time.

Producer:
Andrew Pelosi, with Pelosi Accounting and Consulting, recently told Atlanta News. First, the IRS typically makes annual adjustments to income tax brackets, but this year they're bigger than usual due to, you guessed it, inflation.

Andrew Pelosi:
Some people will see a savings of perhaps 1000 during tax time on their tax return. Others might see a little bit more. Certainly the brackets have changed, so the those who are in higher brackets will probably see more savings than those who are in lower brackets. But across the board, everyone is going to see some kind of savings.

Producer:
In short, all tax brackets are going up by about 7% for 2023. That means you can make more money and be in a lower tax bracket than you would be this year. The standard deduction is also going up to the tune of a $900 increase for single filers and 1800 bucks for married couples filing jointly.

Andrew Pelosi:
I mean, look, it's beneficial for everyone, right? At the end of the day, we're all looking to save money and keep more money in our pockets. In a time like this where groceries are more expensive, fuel prices are at record prices, Every little bit helps.

Producer:
Keep in mind, though, that these adjustments are for money you earn next year in 2023, so you won't actually see the results until you file your taxes in early 2024. So could you benefit from the IRS's new tax brackets? That's a key question to consider as you plan your financial future With the retirement dot radio network powered by AmeriLife, I'm Matt McClure. So there you have it, Mike. It is a look at what the tax brackets are going to see that that increase about 7% in the year 2023. And as I said at the end of that piece, that caveat is you're not really going to see it or feel it until you file your taxes in 2024 because it's applies to the money that you make next year.

Mike Zaino:
Right. And I think a key point to take out of that is that for most households, there's going to be some semblance of savings. But again, everybody is unique, everybody is different. Everybody has their own specific situation. So hopefully that's a little bit of good news. But, you know, the government always has in its power the ability to make these adjustments. And like we discussed earlier in the show, it can be a short-term relief for people. But when the hammer drops, who's going to have to pay? That's my question. Right? Who's going to have to pay?

Producer:
Yeah. And you know, as I point out in another piece that will probably I'm imagining we'll share this one next week, but it's looking at some taxes that are possibly coming to different states. And, yeah, you know, economists and average Joes like myself who are not economists but, you know, kind of follow these things, you know, believe taxes are going to have to go up at some point in the future because it's it's just you know, there's been so much by way of spending that that money has to come from somewhere. And it's going to come from, you know, not only corporations and the super, super rich people, it's going to at least partially come from you and me, too. And that's the kind of scary part for folks not to go back to the Halloween scariness here. But that's that's kind of the scary part for people.

Mike Zaino:
They're putting a Band-Aid on the situation if we just want to call it what it is. Matt. All right. There, there. It's been so ridiculous this year that they have feel like they have to do something and we're not even going to really reap the benefits of that again until 2024. But what happens when that Band-Aid gets ripped off and it's stuck to a lot of hair that hurts?

Producer:
It really.

Mike Zaino:
Does. It does not feel good or God forbid, skin is stuck to it. I've done that before and ripped the skin off. Right. So this is a temporary fix for for for a much, much larger issue that has to be dealt with by government and your elected officials. So keep that in mind come November when it's voting time.

Producer:
There is some some pain to be seen and it will. Come our way one way or another. Eventually, it seems like. Well, so that is a look at at least some good news on the tax front for 2023. Like we say, though, a caveat, you won't feel it until 2024. But but there you go. Something to at least look forward to. All right. So speaking of the IRS, Mike, you know, people are thinking, okay, maybe after they've heard what we just talked about, maybe they're thinking, okay, maybe the IRS not so bad after all. You know, maybe that they're raising those they're raising those tax brackets. I'm not going to have to pay. And I know I'm really exaggerating here, but, you know, raising those tax brackets, I'm not potentially going to have to pay as high of a tax rate next year if I'm, you know, in a lower tax bracket. But because of that, I increase, etc., etc.. But now we know people do not want the IRS to be a part of their retirement. So often it is you don't want to be having to you know, you work all your life. You pay taxes in retirement when you're not working anymore. That's kind of the last thing that you want to do. So in our last few minutes, and we've got about five, five and a half minutes left in the show in our last several minutes of the show here. Let's talk about some ways that our listeners can kick the IRS out of being a partner in their retirement.

Mike Zaino:
What does that even mean? Matt kicking the IRS out of your retirement plan? Well, you have to really want them out in order for you to do that, because it takes action and it takes a plan and it takes putting that plan into action. Because my number one question for folks with regard to tax, even though they just increased the amount that you can make within certain tax brackets, do you really think taxes are going to go up or down in the future? What say you, Matt?

Producer:
Well, I would say once again, I think taxes are going up. I'm just some average Joe here. But I think that taxes are going up at some point.

Mike Zaino:
I have never heard anybody tell me, Mike, I think they're going to go down. In fact, most people believe that taxes are going to be higher in the future. So you may want to consider a strategy that actually does kick the IRS out of being your partner in retirement. And so there are ways that you can do that. You can reduce future tax rate hike risks by implementing what's called a Roth conversion. So in a Roth conversion, you have maybe some room left, especially since they're expanding that cap this year within a certain tax bracket, you can take the part that would bring you just up to the limit, pay the tax on that now at a known rate and then convert that over to a Roth. That's what's called a Roth conversion. And you can do that systematically year in and year out so that by the time you're in retirement, you're drawing down nothing but tax free dollars. And so smart retirees also diversify their money into different tax buckets. So you have three different types of investment accounts and we've gone over these before. But for today's segment, we're going to go over them again because it's that important. The first type is taxable accounts. So if you have a brokerage account, you've got Edward Jones, Raymond James, Charles Schwab, Merrill Lynch.

Mike Zaino:
I mean, I can go on and on and on and on bank CDs, any of those other types of investment accounts, those are taxable accounts. That's the first type. Well, then you have tax-deferred type of accounts, which are 401 KS, SIPP, a self employed pension plans, annuities, if they've been purchased with AFTERTAX dollars, that that part's free. But the growth on a non qualified annuity would be taxable. That's the second bucket tax deferred. Then you have the tax free bucket, which includes the Roth IRAs, and it includes the indexed universal life policy that we discussed earlier and other life insurance in general. And those are the only true tax free vehicles that you can use in America today. So, I mean, would you be interested in generating a tax free income during your 30 to 40 plus year retirement? We have proven legal strategies to help you do just that. And guess what? The market has been abysmal this year. We've we've really hit on that in today's show. But now is an opportune time to convert those tax deferred IRA funds into a Roth IRA. And so why would you continue to pay ordinary income taxes decades after you have stopped working? To me, Matt, that just doesn't make any sense whatsoever.

Producer:
It really doesn't. I mean, you know, we said it earlier in the show, You just need to because you've worked so hard for this money, you need to put it to work for you in your retirement. That's the goal. And doing that without having to pay taxes on that, when you make those make those withdrawals, you get those payments without having to pay taxes on top of that is just fantastic. It gives you a lot more peace of mind in your retirement because then you're able to plan better. You know, the amount of money that's going to come to you regardless of what happens to the tax system. And as we say.

Mike Zaino:
No matter what the IRS does. That's right. No matter what Big brother does, right?

Producer:
That's right. Those taxes, they are going up. And so, you know, you can have a plan to actually buffer yourself against that, avoid it altogether, potentially. And so that is what you need to do, folks, is get that plan in motion by calling Mike Zaino. 704 560 1573 at 704 560 1573. MoneyMatterswithMike.com Is the website as well. Once again it's money matters with Mike dot com and that is the website for the show the contact. His pages right there as well. Easy breezy. All right, Mike. It is that time again for us to say goodbye. The show has just flown by once again this week. I have enjoyed myself once again, as I always do. And I've learned some stuff as I always do. And I will see you again next week, sir.

Mike Zaino:
Matt, it's been a pleasure. People out there in listener land. Thank you so much for listening. We realize that without you, we do not have a show. If just a gentle reminder, if you were listening to this on podcast or driving while listening to the show, make sure you go back to Money Matters with Mike. Just to look at the Meat on the Bone segment, to see the visual that I was able to put up on the screen. Thank you. Again. If you know anybody else that you believe this show could help, please feel free to share it. My number is not a secret. The website's not a secret. The more people we help, the better off we're all going to be. All right. Make it a great day and have a great weekend.

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 That's 704 560 1573.

Producer:
Not affiliated with the United States government, Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature. It 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 are the results obtained from the use of this information.

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