Minimizing Fees and Maximizing Your Social Security Benefits

3.10.23: Audio automatically transcribed by Sonix

3.10.23: 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. Happy Saturday, people. What a great day to be alive in these United States of America. And you guys listening to Money Matters with Mike. This 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 it again. Okay. On today's show, we're going to talk about one of the most important decisions that you're going to make for retirement and how to navigate the future of Social Security. And as always, I have the distinct honor and privilege of being joined by the one the only my co-host and producer extraordinaire sounding a little froggy today, Mr. Matt McClure. Matt, how are you doing today? Yeah, just a little.

Producer:
Froggy there, Mike. But, you know.

Producer:
I'm I'm hanging in and I'm ready to share some great info with the folks.

Mike Zaino:
That's right. That's right. We're going to get it done today.

Producer:
We will. Absolutely. And we got plenty to share. I mean, we've got so much coming up here. And we'll we'll kind of give them a rundown here in just a second. But, of course, folks, we want to share with you first that we're so glad that you are joining us not only here on the air, but also as you join us on the podcast. And if you didn't know that we were a podcast, join us on the podcast. You can get us pretty much anywhere that you find those podcasts. Apple, Spotify, et cetera. Et cetera. The list goes on and on, right? Subscribe to us. Leave us a message or a comment there. We'd absolutely love it. You can also check out our YouTube channel. Mike, That that's one thing that I know we are really have really been emphasizing here lately, but it's because we put some good content on there, some show highlights and some special content as well. And all you have to do is search for Money Matters with Mike on YouTube.

Mike Zaino:
Absolutely. That is a phenomenal place to check us out. It's, believe it or not, the second largest search engine in the world is YouTube and more. More so on the social side. If you want to jump on Facebook and just type Money Matters with Mike, we'd love to have you like our page and follow us on Facebook because we do put a lot of stuff on Facebook that I don't put on YouTube. So you really want to stay tuned in and plugged in. Make sure that you that you, you know, hook up with us on both YouTube and Facebook. But whatever you do, just please reach out to us, okay? We absolutely love reading and hearing your messages and we would be happy to answer any questions that you might have on the show or during a complimentary consultation with you, your spouse or you and your spouse. And so you can do that by just calling seven and 45601573. That is my personal cell phone number. It's the only number I've had since 1997. If I don't happen to answer, leave me a message. I promise you I'll give you a call back. You can reach out to us at MoneyMattersWithMike.com or on Facebook or on YouTube. Okay. So I appreciate everybody for tuning in today. We've got a lot of stuff to cover. So Matt, why don't you take us in?

Producer:
Yeah, absolutely. So we've got a little inflation demonstration talk coming up and a little interest rate talk as well. It's been an interesting week in the news on that. So of course, we'll we'll have a kind of a rundown coming up. What to do with your old and unused. 529 funds. You can also get a bit of a tax break. It's something to take advantage of as well as we're in the middle of tax season here. We've got a cost cutter tip of the week and talking about shopping around for your health care needs. Also, how much are you paying in fees? We're going to talk about that and maybe help folks cut some costs there as well. And then, of course, how to navigate Social Security. As you said, Mike, really one of the most important decisions that people are going to make in retirement, so, so important. And so we'll cover that as well. But first.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Producer:
And our words of wisdom this week come from Jonathan Winters. Boy, such a funny guy. He was an American actor, author, television host and artist as well. You might know him, at least my frame of reference for Jonathan Winters. Mike was from Mork and Mindy. Yes. He was also on Hee Haw. He was later the voice of Grandpa Smurf, which I didn't even know that Jonathan Winters did that so diverse, so funny. But here's a quote from Jonathan Winters, and I think it's a great one. It's this If your ship doesn't come in, swim out to meet it. Wow.

Mike Zaino:
Swim out to meet it. So many people just wait, right? They wait for life to happen to them instead of making things happen.

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

Mike Zaino:
Today's meat on the bone is just to kind of highlight that the problem is that most people are lazy, okay? They they too often choose the path of least resistance, especially when it comes to paying themselves first and taking control of their financial future. Well, if you understand that money is one of the longest relationships you'll ever have, it can be extremely costly for you to be financially lazy. And by lazy. This is what I mean. You're just not really making any effort. You're taking things or people for granted and you're devaluing the importance of doing the little things. Okay. And so here's a few examples of what being lazy, where money is concerned can look like. You're not saving due to other pressing financial obligations. You're not investing due either to a lack of interest, a lack of knowledge or fear of losing what you've invested. Okay. Another way would be to spend without intent. They say that you should never go shopping without a list and definitely don't go when you're hungry. C c Laziness can be equated to sloth, and if you remember, sloth is one of the seven deadly sins and the price is heavy. I was reading an article in Forbes magazine and Forbes asked a slew of experts, and this was like a over a decade ago. It was almost 15 years ago. But they asked a slew of experts in fields that ranged from personal finance to health care just to estimate the not so hidden costs of our laziness and to demonstrate what little you can do. Because in many cases, that's all it takes just to turn things around some some little things, right? And so one of those little things was not choosing the best rate on your savings account, especially in today's interest rate environment that we're going to get into a little later on the show.

Mike Zaino:
Right. Banks are offering a lot higher interest rates and the best banks are not actually brick and mortar banks. They're the online banks that don't have the overhead. So if you're not getting at least 4% on your money, you're being lazy with your money inside of an account at the bank. Not opening a retirement fund as soon as possible is another way that you're being lazy. Okay? If you don't have one set up and you're in your 20 seconds, you're in your 30s, God forbid you're in your 40s or 50s or older and you still don't have one. It is never too early, it is never too late and it is never too often to save for retirement. If you like to play the 0% transfer games on credit cards, you might have a credit card where you're paying somewhere between 16 and 29%. Well, there are a lot of 0% offers that may cost you 3% to transfer the balance. But if you get, you know, 18 to 24 months of not having to pay any interest, then that's going to save you a lot more than that. 3% transfer fee was if you're buying big ticket items, not bothering to negotiate a better deal. And one that I thought was was was pretty profound, is just spending too much time in bed over sleeping.

Mike Zaino:
Okay. The right mindset when it comes to, you know, knowing about finance is a combination of knowing. Number one, the world doesn't owe you anything. Not at all. Number two, you need to create value in order to get paid for what that value is. Number three, and this is a big one. Life isn't fair, but complaining about it won't change that fact. Okay. Four You need to be willing to work hard and to make sacrifices. The fact of the matter is, is that most people have a really, really good income while they're working, and when they retire, that income takes a significant drop. And if you could look at my hands, if you're if you're not watching us on YouTube, make sure to tune into this portion. You're up here while you're working. When you retire, it's going to be down here. What I'd rather see is that you sacrifice a little bit while you still have earned income and save so that this comes up and there's not as significant, if any, transition into retirement. And then you just need to understand, too, that you need to stay humble and learn as much as you possibly can. I still learn and am mentored on a daily basis. I read, I listen to other podcasts and I seek out information to be able to bring to you guys. And guess what? I put it into practical application. So the bottom line is guys and girls that are listening, don't be lazy, okay? If the ship doesn't. Come in, swim out and meet it.

Producer:
There you go. And that comes directly from those great words from Jonathan Winters. And yeah, Mike, you're right. It's it almost reminds me of this quote that I heard a long time ago. So you can't wait for things to happen. You gotta make them happen, right? You got to get out there and take some initiative. And part of that begins with just simply educating yourself about what your options are.

Mike Zaino:
It is. I mean, if it's to be, it's up to me, right? That's another little, you know, quote we can throw in there. You have to take charge and understand that that, you know, the first the first step of of of fixing a problem is recognizing that you have a problem. So if you keep doing what you've always done, you're going to keep getting what you've always gotten. And laziness. Unfortunately, when it comes to finance, you have to be deliberate. You have to make certain sacrifices and you have to be willing to put in the effort to do the research, to learn in on yourself and or to seek the help of a financial professional who can help navigate you through all of this stuff and give you some guidance and provide clarity. And Matt, I happen to know a guy.

Producer:
Yeah, I was going to say me too. His name is Mike Zaino and he happens to be right here. And he's got that cell phone on him, folks, at all times. The number is 704 5601573. Or you can go to the website MoneyMattersWithMike.com that's MoneyMattersWithMike.com.

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

Producer:
So, Mike, we've got a little bit of an update this time around on on inflation. Of course, this being our inflation demonstration segment, but also on interest rates, which has a direct correlation with the inflation situation that we've got going on. And it's been a it's been an interesting week here. We've had Jerome Powell appearing before Congress talking about the Fed potentially raising interest rates more than they thought they were going to have to because inflation is just really been so stubborn.

Mike Zaino:
Yeah, I mean, things are really just exactly what you said, being stubborn. And in my opinion and I've been saying this, I actually had a conversation with a gentleman that worked at the State Department while while I was up in the DC area, and he happened to work in logistics. And I've been calling for this for literally three years since the pandemic. And we were talking about, you know, if they would attack it from both fronts, you know, obviously the Fed and raising the inflation rate, but also fixing the supply chain. Right. If you fix the supply chain and allow those goods and products to come into the United States, the demand is going to be satiated, which will bring prices down as well. So, you know, we were talking about that Fox Business article that we you know, that we read Matt and kind of used some of the things in the show today where Biden paints a rosy picture on inflation and I'm going to use a Biden ism and be like, come on, man. I mean, like, really look where it is now. Look where it was last year in June. We're talking about 50 year highs with inflation and everybody has felt the pain.

Producer:
Yeah, no, they really have. And and I mean, you know, you look at the different categories year over year prices in food still over 11% up over last year. Electricity almost 12%, natural gas 26.7% natural gas. I mean, it's just it's kind of crazy when you look at, you know, break down these different categories, transportation services, that's airline prices, your bus ticket, your train ticket, all that kind of stuff up 14.6%. And of course, that is in direct correlation to those energy prices, which are also really high.

Mike Zaino:
Yeah, right. I mean, and so when we're looking at the 12 month, year over year inflation, you know, this this January, it was it was 6.4%. Okay. Their targets too. So it's like literally three and a half times what it's supposed to be, even though that was down. Okay. This is where they paint the rosy picture down from 9.1%. The high of June of 2022. But it's still three and a half times what it should be. So, again, don't be fooled, America. Wake up. Okay. And what we're finding is, is that the central bank has raised rates at the fastest pace since the 1980s. I know a lot of our listeners were alive in the 1980s. I was and I can remember my parents mortgage was like 15 to 18% back then. Can you imagine that? I mean, just a couple of years ago, I refinanced my home at two and a quarter, Right. Can you imagine if we get anywhere close to the true measure of inflation as it was measured back in the 80s?

Producer:
Wow. I mean, I can't even imagine. Although if it keeps going like it's going, we don't have that much farther to get there. Really.

Mike Zaino:
We really don't because, I mean, most economists tend to think that in order to bring inflation back down to 2%, the Fed's policymakers are going to need to raise those rates higher, which I've read and looked at some stuff even just this morning, they're targeting like 5.25%, which is is is high. Okay. A lot higher than they had projected in December. And, you know, they keep saying we're not in a recession. Guess what, folks? We're in a recession and we're heading for not not just a soft landing, not a hard landing, but a crash landing if they don't get this stuff under control.

Producer:
Yeah. And it's this balancing act, you know, it's And how far do you go and how fast do you go? And that's the battle that they've been fighting. And it's like, you know, people often will say, well, they didn't do enough fast enough or they did too much, too fast. You know, it's like, how do we know what the solution really is? It's it's a it's a difficult thing, but it's also very frustrating from the standpoint of a consumer where you're sitting here and being like, well, I'm paying a heck of a lot more than I did for stuff this time last year. And, you know, both on the just the cost of goods and services period and now interest rates. But inflation is still high.

Mike Zaino:
It is. And so the lead us economist at Oxford Economics, pretty smart guy's name is Michael Pierce. He wrote in a research note that he expects the Fed to raise its key rate by a quarter point at each of the next three meetings, and he foresees the possibility of additional hikes even beyond that. Okay. So those Fed hikes typically make mortgages, They make auto loans, they make credit card rates, and they make business lending much more expensive. And that's how it affects you out there listening to this show. And it's a trend that can slow spending, because let's face it, if you can't, you know, afford as much house or you can't buy as much car, you might not be willing to settle. And so you'll just try to wait it out. Right. It can also slow inflation, but it's going to threaten to send the economy sliding headfirst at a full speed into that recession that I just mentioned. So, yeah, you know, if you are out there and you're listening to the show and you're concerned about inflation and how it could impact your plans, especially for retirement, because let me tell you folks, it will absolutely affect your retirement dollars. I'd love to meet with you and stress test your current plan just to see if it could withstand future inflationary pressures. Okay. If you don't currently have a formal plan for retirement, please, please, please give us a call. Go to the website, schedule a complimentary consultation.

Producer:
And the website is MoneyMattersWithMike.com. The number 704 5601573. And that you know stress testing your plan and all of that really super important because you look back. Back just a few years ago. And who would have thought after this long run, you know, post 2008, post the financial crisis, then in the Great Recession, and then, you know, this slow, steady growth in the economy and the markets, all of that, we sort of were lulled into this false sense of security. So who would have thought, you know, a few years back that we would be where we are? So that's why planning for the Unknowns is so important.

Mike Zaino:
Matt, you took literally the words right out of my mouth and I was going to say lulled to sleep. Okay. But you took that lulled right out of my mouth. And yeah, we enjoyed the longest bull run in the history of the stock market. It had never happened again in any of our lifetimes. So the likelihood of that happening again in our lifetime is probably pretty slim, right? So people kind of got financially lazy, which that's why I had to point that out in the meat on the bone, they could, you know, my dog Murray could have made money by sticking money in an index fund or in the stock market or in the S&P or in the Nasdaq or heck, any of the indices. Right. He could have made money and he's a dog. So now that volatility is back and we have things like inflation and we have things like the talk of recession, it is more important than ever to get your finances under control and make sure that your plan will stand the test of time no matter what we have going on locally, regionally, nationally or internationally. And how all those things, by the way, that you have no control over can negatively affect the value of your portfolio unless your plan is stress tested against each and every single one of those possibilities.

Producer:
Yeah, and that's taking those scenarios into account is so, so important here. Money matters with Mic.com once again is the website folks, and the number 704 5601573. I know Mike. A big thing that is on people's minds these days as well taxes it is tax season right now. You know it's never a fun thing to talk about when we're talking about the IRS, of course. But they're there, Right? But there are some tax advantages that we're going to talk about when it has to do with 529 plans. And if people aren't necessarily familiar with 529 plans, that's an education savings plan, right? A college savings plan.

Mike Zaino:
Particular it is. It allows folks who have children to save tax deferred money so that their kids can go to college and not have to pay the taxes on those dollars. It is an absolutely phenomenal way to help save for your child's retirement excuse me, not retirement, but college. Okay. But in a way, it can save help them save for their retirement because thanks to the secure Act 2.0 that just went into effect this year, starting next year in 2024, they are going to allow you to use unused $529, roll those into a Roth IRA starting in 2024. So if plans changed, okay, if if you guys had a financial windfall, if not all the money inside of that 529 was used thanks to the $1.7 trillion federal omnibus spending package. It actually included that provision that would allow those $529 to be rolled over into a Roth IRA. And so that new provision provides a great opportunity for people who have those 529 college savings accounts. And the money wasn't used. Well, guess what? Now they can be put to very good use. Okay. The rollover measure, again takes effect in 2024 next year, and it does have some limitations. Okay. And among the biggest limitation, they're going to cap the amount of money that you can roll over into the Roth at a lifetime cap on transfers of only $35,000. So if you're going to go to an in-state school or a community college, that's probably great. If you were going to go to Harvard where, you know, it costs a heck of a lot more money than than $35,000.

Producer:
35,000 a credit is what, $35,000 a class, right? Yeah, exactly.

Mike Zaino:
At least you get a class is worth of of Roth IRA rollover money. Okay. So again, those restrictions include the $35,000 lifetime cap on transfers. They are subject also to the annual Roth contribution limit, which is $6,500 in 2023, and the rollover can only be made to the beneficiaries. Roth IRA. Not that of the actual account owner. So in other words, if you're a parent and you have the child as the beneficiary, then the child gets the Roth IRA money, not the parents. So that's actually a pretty good way like I kind of alluded to a minute ago, of helping your child prepare for retirement with any unused $549. Okay. And the other caveat is that the 549 account must have been open for at least 15 years. So if you've got young children, then you're great and it's not going to be an issue because by the time they get to college age or beyond, it'll be a seasoned account. Now, if you had a late start, then you're just going to have to leave the money in the 549 for those years. And then eventually after 15, you can transfer it over into a Roth IRA. So that is a little bit of good news that came out of the Secure Act 2.0 when it comes to the ability to take unused $549 and roll that into your child's 401. Excuse me, Roth IRA.

Producer:
Yeah. And and, you know, I mean, we've talked about the Secure Act 2.0 a few times here, and this is one of those provisions that was kind of hidden. I feel like it didn't get a lot of attention. But really, as you said a moment ago, Mike, it could be a great way to really, if you fall into that category, kick start your child's retirement planning and retirement savings, because, you know, we're talking about a little bit earlier on in the show how, you know, a lot of people, even in their 30s or 40s, might not have started that process. Well, this could be a good way to get that started. If there's some money left in that 549.

Mike Zaino:
And not only that, Matt, I actually ran a scenario whereby if $6,500 was placed into a Roth IRA for somebody from the years of 18 to 22 and they didn't touch it, it wasn't used, okay, that would be about $5.5 million by the time they reached full retirement age, just assuming a 6% return. So that's the power of compound interest. And you may decide, you know what, heck, I'm going to open one of those 529 plans, just roll it over into a into a Roth IRA to let it grow tax free after the 15 year seasoning period and then really set my child up for a great retirement. So, um, yeah, that's just one of the ways to, to, to, to magnify wealth for sure.

Producer:
Wow. Absolutely. So and that that goes, you know, goes back to that discussion that we've had on the show before about compounding interest. It really, really does add up as as evidenced by that particular illustration right there. That's it. I love it.

Mike Zaino:
When Albert Einstein called it the eighth Wonder of the World.

Producer:
Absolutely. Absolutely.

Mike Zaino:
We're talking about compound interest, right?

Producer:
Compound that interest on top of the interest, on top of the interest. And it really, really does add up. Well, speaking of adding up, our our next sort of topic of discussion, Mike, is all about fees. It's something that really can add up. And I think a lot of people don't even realize the fees that they're paying for their retirement plan or for their heck for any of their, you know, sort of financial investments or or or accounts. It just sort of is something that can fly under the radar but really does have an impact on their plans.

Mike Zaino:
It has a huge impact on their plans. In fact, I don't know why I didn't add this to Forbes. You know, little things that you not paying attention to your fees is a way that you can be lazy, okay, in your finances. And I remember, goodness gracious, after the collapse of of the financial markets in 2008, I think it was around 2010 or 2011 that that 60 Minutes did a like an expose, a 7 to 12 minute. You know, piece. Steve Kroft was the narrator on just all of the fees in 401 seconds and how they can absolutely destroy its earning power. And what we find, Matt, is that most people that we meet with don't understand the fees that they're paying inside of their portfolio in retirement accounts. Many of them, many of them are paying excess fees for assets that are underperforming and have been underperforming. Why would folks do that? I have no idea. Right?

Producer:
I mean, it's just there again, it's not taking the initiative, not taking the time to actually look at it. And I get it. You know, it's like you're busy. 401. K is one of those things. I understand it comes out of my my paycheck before I even get my paycheck. Like it's it's taken care of. Right. And it can easily fall under the radar. But you got to take the initiative, folks. I mean.

Mike Zaino:
It's your money, right? It's your money. Don't you want to get the most that you possibly can out of it? Fees will affect everyone who is saving for retirement, regardless of how much money you might have in your nest egg. I see people that say, Oh, I've got enough money in there. Well, that means you're probably paying more fees because it's all related, right? So remember that retirement is about income, okay? The cash flow, it is not about building up this huge nest egg and reaching that elusive magic number, so to speak. So what we do is we help our clients take advantage of fee efficient strategies while also generating safe and predictable income streams that they can never outlive. Did you know that you can absolutely establish your own personal pension by replacing that the bonds that make up your portfolio with fixed indexed annuities? And you can also delete the fees out of the bond portion of your portfolio. Okay. Bonds were down like 15% last year, 12 to 15, depending on which bonds you bought. And nobody should ever have to pay a fee for an underperforming asset. So another question that we like to ask is about the expense ratio.

Mike Zaino:
Do you know what your expense ratio is? And some people out there are going, what the heck is an expense ratio? Well, that's when you take your management fees and you divide it by the total investment. Okay? So if your management fees are X, whatever they are, and then you divide it by how much money you have in there, that is called the expense ratio. So if you're one with one of those big name drive up financial institutions, or if you've ever been told by your advisor to just hang in there. All right, you'll see. It'll turn around, it'll get better. Just hang in there with your money. You need to give me a call today and visit my website. And no matter how much money you have, the money that you have is important to you. And it's also important to me. Okay, So let us help you grow and protect your assets. Give us a call. (704) 560-1573. Hit us up on Facebook. Hit us up at MoneyMattersWithMike.com. We love answering questions for our listeners.

Producer:
Yeah absolutely do and and one of those things that I think people are so on the lookout for these days is just what you said protection and growth and and like getting both of those things. I feel like it's that sort of elusive thing that's out there that people are like, Oh, this sort of seems like the Goldilocks scenario, you know, but it can be a reality. I feel like, you know.

Mike Zaino:
One of the biggest reactions is this sounds like it's too good to be true. And I've always heard that that if it sounds too good to be true, it probably is. Well, guess what? It's not too good to be true. There are companies out there and financial vehicles out there that will allow you to participate only in the growth of the indices that you're linked to so that you get market linked gains without market linked risk. What does that mean? That means 100% downside protection. That means the ability to not have to worry about what's on the news and how it might negatively affect your portfolio. Because upside potential downside protection, no fees, zero fees, folks. None. Zip. Zilch, nada. Okay. These products exist. And if that sounds even remotely interesting to you, still, while offering flexibility, liquidity and money passing to named beneficiaries, then we need to have a discussion about how that can fit into your portfolio.

Producer:
And you can get that discussion started by going to MoneyMattersWithMike.com MoneyMattersWithMike.com or give Mike a call at (704) 560-1573. Well a big portion of the discussion today, Mike, I know, is going to revolve around Social Security. You know, we get a lot of questions about Social Security when we were talking to our our listeners and just to folks out in the out in the community, I know that you you get Social Security questions all the time. Yeah and and there. Are a lot of those questions that we wanted to go through here today and maybe try and clarify some things and at least get some discussion started here. So let's start helping people navigate those important decisions that have to do with Social Security.

Mike Zaino:
Mike No doubt. So you're likely out there listening about Social Security and wondering, you know, hey, can I count on Social Security to be there through my entire retirement, whether that's ten years, 20 years, 30 plus years, okay. Because people some folks are retiring actually a little bit early Now, You know, the answer to that is who knows? So what we want to do is develop a plan for you where you're not necessarily counting on Social Security. And when it's there, it's gravy on top of the plan. Okay. But the biggest question that I get asked, especially for folks who are retiring now, is based on my information, based on everything that you see, my income, my expenses. When should I take Social Security? And guess what, folks? The answer depends on your individual situation because we do not use a cookie cutter approach, and there are thousands of ways to strategize, literally thousands of ways to strategize when you should take Social Security. Another question that we get is why should I wait? Okay. To take Social Security, especially if, you know, people are doubting the the long term viability of the program? Well, I'll tell you why. Every year that you delay taking Social Security, it's a guaranteed 8% return. You can't get a guaranteed 8% return in the stock market. And as far as the long term viability of Social Security, they're going to have to make some adjustments. But Mike Zaino's opinion and the opinion of most of the, you know, educated financial folks that I speak with, it's not really going anywhere.

Mike Zaino:
It can't go anywhere. It would cause a global financial crisis, not just here in the United States, the likes of which I don't think we've ever seen, not not even in, you know, Black Monday or 1929 during the during the Depression. Okay. So another question that you might ask is what happens to our benefits when my spouse passes away? And so that's a that's a really, really good question and one that hits home for so many folks, because especially if you're in a married situation or a partner situation and you're used to living off of two Social Security incomes, well, when one of the spouses dies, so too does one of the Social Security payments. So if you're used to living on 2000, $2,500, somewhere in there each and every single month, and now all of a sudden that's just gone. Just like that, when your spouse passes, that can cause some serious ripples in your lifestyle while you're grieving the loss. And then beyond that, of course, I don't know that anybody ever gets over grieving the loss of a spouse, especially if you've been married for any length of time. Right. But the surviving spouse will get to keep the greater of the two Social Security amounts. The lesser of the two is gone. Okay. So that is huge. And why a lot of folks will also pick up some form of life insurance to help offset that transition, especially if there is a need to replace that income over time.

Producer:
And there have also been some big changes to the Social Security landscape over the years that that really speak to the long term viability of the program and why some of those big changes are going to be have going to have to be made, rather, as we as we move forward here into the future.

Mike Zaino:
When Social Security first came out, okay, you were supposed to have been dead for four years before you could actually draw because the average life expectancy was 58 and you couldn't start drawing it until you were 62, even in 1950. Okay, 1950. My mom was born in 49. Right. So I know a lot of our listeners out there were born, you know, or alive during the 50 seconds. There were 16 people paying into Social Security for every one person taking out. And today, okay, there's only 2.8 people per recipient. So it's obviously headed in the wrong direction. And meanwhile, our national debt, something that I hate talking about, I really do, because I can't spend more money than than than I make. Right. But apparently our government can. Our national debt sits at 31.6 trillion and counting, like rapidly counting, and the nation's unfunded liabilities are. Are already topping 182 trillion and that's according to the US debt clock. Org you can go to US debt clock. Org. And watch how fast that clock is winding and how those dollars keep just adding and adding and adding and adding. And when we throw away around Matt we throw around trillion people don't understand the power of 12 zeros. Okay. If you go back in time 1,000,000 seconds ago, just 1,000,000 seconds, that was 12 days ago. If I changed the M to a, B and go back in time, 1,000,000,000 seconds. That was 32 years ago. And if I change the B to A T and go 2,000,000,000,000 seconds Neanderthals weren't even around yet. We're talking about 32,000 BC. Okay. So that is the power of 12 zeros. The bottom line is you can't count on Social Security as your only source of income in retirement. You absolutely need a plan for when one of your spouses pass away and when one of those two benefit checks stop coming in each and every single month like you've been accustomed to.

Producer:
And Mike, you know, we've been doing a lot of talk here about Social Security and and how people can really, you know, take advantage of the, you know, many benefits their maximize their benefits. And we actually have a list here of seven ways to maximize your Social Security benefits. Let's run through these and and just give the folks some good tips.

Mike Zaino:
Yeah, absolutely. Okay. The first one is to to work at least 35 years or longer. Okay. The way Social Security determines your benefit is they will look at your highest 35 years of earnings to determine what your individual benefit will be. You get zero for any years that you didn't work. So if you're having zeros inside of that 35 year period, then that is going to permanently lower your payout. So as long as you have at least 35 years of earnings. And the the normal way of thinking is that your highest earning years are right there as you retire each year you work longer is going to replace one of those years when you were in your 20s say that you might not have been making more than, I don't know, ten grand a year. 12 grand a year. I remember that's what I made when I was in the army way back when. Number two would be to stretch out those top earning years. So most people reach their peak earning level later in their career. And so working an extra year or 2nd May increase your benefit for the rest of your life. Number three is kind of obvious to me. Wait until you're full retirement age to claim your benefits. Okay. A lot of people want to do the Steve Miller band, Matt and take the money and run.

Mike Zaino:
But claiming as soon as you can at age 62, you're going to give the government a 25% discount. You're only getting 75% of your benefit. Whereas if you wait until you're full retirement age for Social Security, you actually get the full benefit itself. Number four would be to delay your benefits until age 70, and you're only going to do this if you're in great health and you have extreme longevity. The wife who just walked in the door, okay, her family, the women on her side of the family, they all just live all the way until their 90s, mid 90s. You know, they're still driving, you know, looking through the the steering wheel and doing 35 miles an hour in their Buick land yacht. You know what? But they still have all their marbles and they're moving slowly. So if that's you and you're relatively healthy and you have longevity, then you might want to hold off to the maximum retirement age at age 70 because your benefits actually go up to 132% plus cost of living adjustments. So that's a big one right there. Number five, exercise your right to change your mind. What does that mean? Well, you can withdraw your initial Social Security claim within the first 12 months of receiving your benefits.

Mike Zaino:
And what that means is it can potentially lock in a higher benefit when you decide to reclaim them later on in life. Number six, don't overlook spousal Social Security benefits. So a non-working spouse, for an example, or a spouse with limited work history can potentially receive up to half of the primary worker's benefit. So that is something. That is huge, especially in those spousal situations. And then the last one I wanted to highlight, Matt, if you are working couple, if both husband and wife, both spouses work and are eligible for benefits, you may be able to time your claims to get smaller benefits at full retirement age and higher payouts at age 70 and beyond. So this is a strategy that I'm personally planning on using. I'm going to have my wife jump on hers when she's 62, and as long as God sees fit to give me breath, if I'm planning on delaying until age 70, why, I just kind of foreshadowed that my wife, her family, they just live forever. And my people, we give up a little bit sooner. So by doing that, I'm setting my wife up for a much happier and financially prosperous retirement when I'm no longer around.

Producer:
There you go. Well, that that's the kind of guy you are just thinking about her for that, you know, period of her longevity. And, you know, God willing, that will definitely be the case. But yeah, you know, and here's the thing, though. Everybody's retirement is a little bit different. Nobody has the same exact plan. These are these are great guidelines, I think, for folks and and great suggestions to, you know, for things to be on the lookout for and things to know and options that you have. But the bottom line is everybody's situation is different. And so that's why it's really super important to reach out to somebody like Mike Zaino to talk about why talk about what your your options are, rather, and why you should maybe make decision A instead of B or C or D or E or F, you know, whatever those the letters of the alphabet go to.

Mike Zaino:
And we take all of those, you know, B, C, D, E, or F and into account when we're deciding what's the best for you and your scenario. And so, you know, before anybody retires, before anybody takes Social Security, one of the first things that I will suggest that you do is to go get a complete physical, a very, very comprehensive physical. If you just stop and think for a second how many people you've either known or have heard of who have retired, and then within a year or two, they're dead. They probably didn't know that they were sick. And had they gone and gotten some comprehensive testing, make sure that they were financially or health wise fit for retirement combined with financially fit for retirement, then obviously that's a much better situation than planning to have all this money to enjoy in retirement and then not being around to actually enjoy it. So, you know, couple that with the fact that everybody's different. There is no cookie, cookie cutter, one size fits all. Make sure you get a physical and all of that is going to give you great information with which to make a decision that's best for you and your family. You know, for our listeners, we're out there providing full retirement plan consultations and a large, large portion of that is going to center around social Security planning.

Mike Zaino:
So that's at no cost to our listeners, no obligation. You're only going to work with us if it's best for you. And we'll take a complete 360 degree view of your financial situation. We'll definitely look at the fees that you are paying and try to help you cut unnecessary costs, both in your IRAs, your 401. K's, your thrift savings plan or any other retirement savings vehicles that you have. We can help you with Medicare planning. If you have annuities in place, we can do what we call an annuity x ray. And guess what? If you're in good shape, I'm going to tell you you're in good shape. Okay? I'm not going to try to, you know, stick a round peg in a square hole. I don't I can't stand salespeople. All right? I'm an educator at heart. And my goal is to just arm you and equip you with the information so that you can make great decisions. Bottom line is that we're going to compare what's possible if you work with us to your current situation. And I just have this inkling there's not too many people that I see that I can't actually help.

Producer:
Yeah. And I would I would agree with that because, you know, as we've been talking about here, so many people just don't necessarily have the best grasp on exactly what their current situation is and just need a helping hand with with going through and making that situation better.

Mike Zaino:
Yeah. And I always tell people to, look, you do what you do and I'm sure you do it very, very well, right? So if you work at McDonald's, I'm sure you're a great McDonald's worker. If you work at the airport, I'm sure you're a phenomenal in whatever you do. If you work in an office, I'm sure you're great at whatever you do. Most of the folks out there are not financial professionals. Most of our listeners don't have a solid grasp and are and are not able to, you know, make adjustments and tweaks without seeking the help of a financial professional. So I've said it, you know, 100 times on our on our shows, if I have a toothache, I'm going to a dentist. You know what I mean? Because he's the guy or she's the guy, that girl that knows how to alleviate the pain. Well, I want to alleviate the pain in your financial outlook for retirement. It's a.

Producer:
Holistic picture. It really, really is. And that is a great thing to take into consideration there for sure. One of the things, too, Mike, that people are really focused on these days, cutting costs in in retirement and really cutting costs before retirement, after retirement at retirement anytime, really. But we've got this free resource for folks, 23 retirement cost cutters for 2023. We're going to tell you how you can get your hands on it here in just a second, folks. But first, we have the cost cutter of the week that we're going to share with you. And because my voice has been all froggy like this all week long, our colleague Sam Davis, who so graciously filled in for me a couple of weeks ago on the show, actually recorded this for me this week. And it's our cost cutter of the week that's part of the retirement cost cutters, the 23 retirement cost cutters for 2023. And it's all about health care costs. Let's take a listen to this and we'll tell you how you can get your hands on the entire list right after this.

Producer:
Have you considered ways to cut your health care costs? I'm Sam Davis with the Retirement.Radio Network Powered by AmeriLife. In retirement, you may think Medicare is free, but you would be wrong. Author Ryan Haugen recently told Yahoo Finance there are actually quite a few costs to consider. So the first.

Ryan Haugen:
Part of Medicare to think about is there are multiple parts, and so Part A is actually free, but part B has $148 premium per month. On top of that, consumers then have to think about, you know, are they going to get a medicare Advantage plan, which really pulls all of the costs together, or are they going to add on a drug plan as well as adding on a supplemental plan to add themselves with more protection?

Producer:
Combine that with overall expenses which continue to increase due to inflation and retirees are really feeling the pinch. A recent poll by Clear Match Medicare showed that more than a third of seniors have cut down on costs in other areas of their life to afford their health care expenses. But before you go making any big decisions, take the time to do your research. You can use online tools to compare prices for prescription drugs, medical procedures and insurance premiums to get the best deal. Another good idea is to seek out the advice of a financial advisor or professional. They can help you decide what might be best for you and work your health care plan into your overall financial picture. Many are also licensed and certified Medicare agents, and if not, they often work with one who can help you learn more about your options. So have you shopped around for health care in retirement? That's a key question to consider, and it's one of our 23 retirement cost cutters for 2023. With the Retirement.Radio Network powered by AmeriLife. I'm Sam Davis.

Producer:
And to get your hands on the 23 retirement cost cutters for 2023. Just go to. MoneyMattersWithMike.com or call 704 5601573. That's (704) 560-1573. It's a great resource Mike, and it's got a lot of great ideas for folks to cut costs in retirement.

Mike Zaino:
Absolutely. A couple things that I like to point out, too. If you are holding excess cash outside of a reasonable emergency fund right now, please get in contact with me to talk about better options for that money because we're going to recommend having a liquid emergency fund that can cover expenses for approximately maybe six months. Beyond that, you're kind of just sitting your money in a place where it goes to die. Okay. So a savings account for an example is one of the safest places to lose money as ongoing inflation erodes that buying power. And I wake up every day just to help my clients both protect and grow their hard earned money. All right. So, Matt, what do you think about that?

Producer:
Yeah, you know, a savings account under the mattress. It's basically the same kind of thing. You know, where you're talking about your money is definitely not going to keep up pace with inflation if it's not growing at all. And you mentioned this earlier, too, Mike. A lot of the banks today, the brick and mortar banks specifically, will not have the best interest rate growth in a lot of these, you know, accounts like like a CD or something like that. Some of the other banks might have a much better rate of growth. Those online banks that don't have the overhead that that the big brick and mortar banks do. But then there are also some other options that I know that you like to talk about with your clients as well. And those have to do with my multi multiyear guaranteed annuities.

Mike Zaino:
Yeah. So Amiga, just like Matt just said, it's called a it's the acronym for multi year guaranteed annuity. So if you have money that is just sitting in an account or God forbid, sitting in a certificate of depreciation, which is a CD, that's my, my, my nickname for that, you can take that money if you don't need it for 2 or 3 years, five years, whatever. Some, some interim, you know, term money, then we can still give you upside protection. Um, or excuse me, upside potential. We're going to guarantee rates north of five, 5.5% now. Okay. While still providing liquidity. So here's the thing. If you need access to that money, you can always get up to 10% of it, even while the money is in the annuity. You can't do that in a CD, okay. And you're 100% downside protected. And these are with some of the strongest financial institutions on the face of the planet. All the ones that I work with are A-rated multi billion dollar companies who've been doing this long before most of our listenership were in diapers.

Producer:
I love that. Just a financial institution wearing diapers. I will. It's an illustration. I will not get out of my head anytime soon. But folks, if you sound like that or if you think that that sounds like something that you might be interested in, a multi year guaranteed annuity, a better place for your money potentially, or any of the ideas that we've been talking about here on the show today. Go to MoneyMattersWithMike.com that's MoneyMattersWithMike.com or call (704) 560-1573.

Producer:
It's this week in history.

Producer:
With some big things happen this week in our history, Mike. And the first one has to do with a historical moment. It's got me. It's got me wanting to put the pedal to the metal here.

Mike Zaino:
On this date in 1964, the very first Ford Mustang was manufactured, and this car was originally expected to only sell 100,000 models. And what ended up happening is that the Ford Mustang became the most successful car launch since the 1927 Model A, and it is currently the longest produced car nameplate.

Producer:
Boy. They underestimated that one, didn't they?

Mike Zaino:
They absolutely did.

Producer:
And also on March 11th, a big birthday. And I got to say, I love the song that we're going to reference here, Mike, But you you take it away on this big birthday.

Mike Zaino:
I almost wanted to start singing it in my best, you know, island accent. But on this date in 1950, the American folk and jazz artist Bobby McFerrin was born and he sang the song Don't Worry Be Happy, which was a number one United States hit back in 1988, and it actually won Song of the Year at the Grammy Awards in 1989. And so a little a little side note is that Bobby McFerrin was later awarded the Lifetime Achievement Award at the A Cappella Music Awards in 2018. Wow. Goo Goo Goo.

Producer:
Goo. That's right. I was going to say, even even when your voice sounds like mine does this week, don't worry, be happy.

Mike Zaino:
You do kind of sound like Froggy from The Little Rascals. But I appreciate you, brother. And that's some dedication to to still do what you do and to help me out on the show. And so I appreciate that very much.

Producer:
Well, now, I appreciate you, Mike, and I really do appreciate all of our listeners as well as I know you do. And folks, don't forget, coming up next week on the show. Did you know your retirement nest egg could actually be 15 to 37% smaller than you think it is? Well, we're going to tell you why that is and what you can do to keep more of your hard earned and hard save money. That is coming up on next week's show.

Mike Zaino:
Absolutely, folks. So thank you so much for tuning in on this Saturday. I know you have a lot of things that you could be doing instead of listening, but hopefully learning about how to better protect and prepare for your retirement. Whatever you're planning on doing for the rest of the weekend, I hope you do it to the fullest extent and enjoy yourselves. 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 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 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. Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then to then to Money Matters with Mike to learn how you can protect and grow your hard earned money. Money Matters with Mike every Saturday at 9 a.m. right here on FM 100.1 and AM 1340. Schedule a free no obligation consultation now at MoneyMattersWithMike.com.

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