New Ways to Recession-Proof Your Finances

8.23.24: Audio automatically transcribed by Sonix

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

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. Get set for a full hour of financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here's Mike.

Speaker3:
Zeno. What's up, what's up, what's up? It's Mike Zeno coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week and today we are absolutely bringing the heat again. On today's show, we are going to show you five new steps to recession, proof your finances and discuss why the old rules may not work anymore. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, sir?

Speaker1:
I am doing great. Mike. I hope you have had a wonderful week, sir.

Speaker3:
It has been a very, very busy week. Um, I got to move my baby girl all the way up to Washington, DC, uh, for her first new big girl job. Um, about a mile and a half away from the Capitol building. So she's excited. We're excited. We are officially empty nesters and cannot wait to start that chapter of our lives.

Speaker1:
Love that. That is, uh. That's awesome. And congratulations to her. She's. She's right in the middle of all the craziness up there.

Speaker3:
Yeah. No doubt. And, well, let me tell you, Washington DC is expensive, brother. I mean expensive. The first apartment we looked at was the size of my, uh, you know, primary bathroom, and they wanted $2,500 a month. And I'm like, what? Yahtzee.

Speaker1:
You're like, uh, no, we're not not going to be doing that. Yeah. No, I tell you, my first apartment in in New York was a similar situation when I lived up there. It was a, you know, a small studio. And then when I was looking at coming back to Atlanta a few years later, I was like, the walk in closet in this apartment is the same size as my studio in New York, and this apartment is half the price. You know, it was just crazy.

Speaker3:
Yeah, I mean, we we looked everywhere. Uh, you know, obviously we wanted safe neighborhoods. Um, but, you know, one of the things that that I think just DC in general and, and possibly the northeast, although I've ridden the metro and the subway in New York. Right. I've ridden, you know, other areas of the world, but in DC it is a super clean, um, method of transportation that that actually blew me away. And so she doesn't even need to have a vehicle up there. She can take the metro anywhere she needs to go. Like I said, she's about a mile and a half from work. It drops her off, you know, two minutes from her apartment. There's a grocery store right there at the metro station, and then every, uh, cuisine you could possibly imagine. So, you know, if she doesn't feel like cooking, which she loves to cook, but, you know, she doesn't feel like that, then, uh, she'll have every option available right there at her fingertips. Exactly.

Speaker1:
Just right outside the door, I love that. Well, that's that's great. Congratulations to her. And, uh, glad you got her all moved in. And we have got a lot to get to here on the show, as you mentioned, at the very top five new steps to recession proof your finances. We also have some of the biggest expenses for today's retirees. We're going to talk about why you want to avoid investing with emotion and so much more. We want to take the opportunity though, here at the top of the show to thank our listeners. Mike, thank you know, just everybody who is listening, whether you're listening on the radio or whether you're listening via the podcast, uh, you know, you can actually get the show anywhere across the globe via the podcast. And if you want to find it, just go to your favorite podcast app and search for Money Matters with Mike. You can also listen and get all the past episodes on the website. Money matters with mike.com. We've got the YouTube channel, we've got Facebook, we've got all the places in the world that you could want to possibly find all of your favorite financial information from everybody's favorite financial guy, Mr. Mike Zeno.

Speaker3:
Well, yeah. And you know, my challenge to everybody out there listening right now is, you know, ask yourself, do I have a smart vision for my future retirement? And, you know, now is really a good time to sit down with your spouse, with your family, and really think about what you want your future retirement to look like. And so the first step in planning a successful retirement is deciding what that dream actually looks like to you. And if you have questions and you're ready to get started with a free retirement plan and consultation, just go to our website, Money Matters with mike.com, or pick up the phone and give me a call at (704) 560-1573.

Speaker1:
It's as easy as that, folks. We're going to get to all the meat of the show and our meat on the bone segment here in just a minute. But first, let's get some inspiration for all of those conversations we've got to have with our quote of the week.

Speaker4:
And now for some financial wisdom. It's time for the quote of the week.

Speaker1:
And this week's quote comes from someone who's a bit of a of a polarizing figure in the financial world, I feel like. But I loved this quote by Suze Orman, who, of course, used to have her own show on on the old TV machine. She's written some books and is a podcast host, I believe, these days. But Suze Orman once said, A big part of financial freedom is having your heart and mind free from worry about the what ifs of life. That is very profound. Love or hate Suze Orman and her opinions about a lot of different things. That is some wisdom right there.

Speaker3:
Yeah. You know, Matt, I don't always agree with everything that Susie says. This happens to be one of the things that I absolutely agree with. Okay. Pre-retirees, as well as retirees, often face a wide range of what if questions as they prepare and adjust to retirement.

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

Speaker3:
So those questions typically revolve around financial security, around health, around lifestyle changes. And so I've broken them down into kind of five categories. And the first, um, most common of the what ifs out there have to deal with financial concerns, right? What if I run out of money? What if my investments don't perform as I expected them to? What if I face unexpected expenses like healthcare costs or home repairs? What if inflation, which has been such a buzzword over the last few years, erodes my purchasing power? And then what if I need long term care and can't afford it? What do you think about those, Matt? Those financial what ifs?

Speaker1:
Yeah, those are huge. And, you know, I mean, so many of them are those things that we just cannot control really. You know, kind of all of them are those things that we can't control, especially things like inflation. And if what the market does and things like that, I mean, that's why it's so important. I feel like in life in general and in your financial life, to control the things that you can and not let the things that you can't control, you know, just, just rule the day and, and kind of, you know, ruin your ruin your life and ruin your mood all the time.

Speaker3:
Right. I mean, there's there's only so many things that you can do when it comes to the financial what ifs. I mean, you can try to make more money, right? Whether that's taking on a second job or a part time job. Or maybe it's as simple as asking for a raise. So many people fail to do that. But, you know, financial concerns, those are big, huge what ifs. And that's why they lead off, you know, this particular category segment. Right. The second of the what ifs center around health and longevity. So those could be what ifs like, hey, you know what? What if my health declines. Or what if I live longer than I expect? And then my savings don't last as long as I do, right? That could be a huge what if. What if I or my spouse need expensive medical treatments? Okay, and then what if I become dependent on others for care? You know, my activities of daily living have become so diminished that I can't perform them by myself. So that health and longevity, that's the second set of huge what if questions that we'd like to address.

Speaker1:
Yeah. And those are the things too, that, you know, obviously you can't control. You know, how long, you know, you can have an effect on it, but how long you live. But if you, you know, you could obviously walk out and get hit by a bus at any moment, but the other, the other not the right, but not to not to put a damper on, on the conversation or anything, but I mean, it could, it could happen. So what do you do? Well, you plan for the all of the, you know, different scenarios that could happen. And there are ways to do that to guarantee income, no matter how long you live, to make sure that if you were to die too soon, like if you were to walk out and get hit by a bus, for example, your family, your loved ones are taken care of after that, unfortunately, God forbid happens. So yeah, I mean, there are ways to plan for all of those different what ifs.

Speaker3:
Yeah. And then, you know, again, and this should be common sense. But then again, I've said all along that common sense is no longer common these days. Right. But I mean, do simple things like drinking more water. Okay. That's pretty simple. You can exercise, just go out on a walk, you know, try to walk for at least an hour a day, something like that. You can eat healthier. I mean, those are the things that you do have control over that hopefully will, you know, produce that longevity that you're looking for. Okay. And the third category is, uh, lifestyle and just identity crises, right? What if I get bored or I lose my sense of purpose? That's a huge one. What if I don't enjoy retirement as much as I thought I would? I talked to people all the time who, after the first 8 to 12 weeks of retirement, they are literally getting bored and have lost their sense of purpose, right? What if I miss the social interaction and the routine of going to work? And then what if my relationships change, especially with my spouse or family? Those little things that used to be cute because you only saw your spouse maybe four hours a day. Now that you're retired and you're in each other's grill 24 hours a day, that might get a little old after a while and grate on people's nerves. So these are absolute, um, you know, concerning what ifs that could potentially happen to folks.

Speaker1:
Yeah. And I love that, you know, it's like, oh, I, I used to love the way that you, you know, would make that make that sound when something was stuck in your teeth or whatever. And now it's like, oh my God, could you never do that again.

Speaker3:
Oh, that one hit home for me because my my wife cannot stand chewing noises. Oh, yeah.

Speaker1:
I get that.

Speaker3:
Just make soft foods for me for the rest of my life, then I guess I don't know. Right.

Speaker1:
Nothing crunchy. Nothing. You know, just everything in milkshake form will be great.

Speaker3:
That's hilarious. The fourth category would be the what ifs that concern legacy and family. You know what? If I don't leave enough money for my children or my grandchildren? Some folks actually want to do that. Um, here's a big one. What if my estate isn't properly managed or causes family conflict? And then what if? Probably the biggest one in this one. What if my spouse isn't financially secure after I'm gone? Matt.

Speaker1:
Yeah, that one is just huge. And, you know, I mean, it's again, all of these different things are things that you can plan for. But you know, even whether or not you know, you how, no matter how long, I guess I should say, no matter how long you live, no matter how much you have in the market and the market crashes and all that stuff, if you have a plan in place going in and if you have your assets properly, you know, managed and your, you know, your insurance, all you know, up to date and taken care of and the proper amount of insurance, all of those things. I mean, you can really, um, alleviate some of those fears. I mean, just to take the what ifs off the table is has got to, you know, that in and of itself can provide, I think, more longevity for a lot of people because it reduces your stress. And if you reduce your stress, you improve your health, you improve your health, you live longer. So it's like it all is operates in a circle. None of these things happen on an island, you know.

Speaker3:
No doubt. And I think the second biggest one in that category is the the what if my estate isn't properly managed or causes family conflict? Right. There are things that you can do. Like if you don't have a health care power of attorney or a medical directive or something as simple as a will. Okay, we can help you find the professional link you up, because we've got folks on our team that handle that for you. So if that is of interest to you, then definitely want to give us a call. And then the last category are things that are unforeseen, unforeseen life changes. You know what if the economy does crash or there is another financial crisis, like what happened? Or similarly to what happened in either 2008 or in, you know, 2020 with the global pandemic, or if we go all the way back to, you know, 1987, we know with Black Monday, what if I need to move or I need to downsize and can't sell my home. Or what if there are changes in government benefits like Social Security and Medicare? Okay, those are some pretty big potential unforeseen life changes, Matt.

Speaker1:
Yeah. I mean, really very much the case. And, you know, you were just talking about your your daughter, of course, now living in Washington, when it comes to the things that affect us out of Washington, really and truly anything can happen. And, you know, I don't believe that there are going to be, um, letting the Social Security trust fund completely run out of money and then take benefits away and all of this stuff. You know, they're going to have to be some changes there, obviously. And that's just one of the the, you know, things obviously that they can control there. But it's you don't know exactly what it's going to look like in the future. So yeah, you got to plan for it. And I love what you often say when we talk about something like Social Security is that you don't want to be relying on it solely for your retirement. What you want to do is make sure that you have a plan in place where Social Security is the gravy. You know, it's the cherry on top of the, you know, whatever food metaphor you want to use. Um, it's it's not the thing that you're relying on solely.

Speaker3:
Yeah. I mean, and you literally took the words right out of my mouth. You can plan for each and every single one of those scenarios so that no matter what happens under any of those what ifs, you are going to be okay. So those what ifs that we just talked about, and there's a bunch of them right over five different categories, they reflect the uncertainties, the anxieties that many people face as they approach or even try to navigate through retirement. So planning, education and seeking a professional, uh, you know, financial professional, I should say, can help address those concerns and create a much more secure and fulfilling retirement.

Speaker1:
Yeah, absolutely. And folks, if you want to create a fulfilling retirement, if you want to get started on that road and, you know, get some, just get some help with your planning. And, you know, if you find all of this, you know, thinking about all the different things that that you can't control, kind of overwhelming and don't really know where to start with all the things that you actually can control. The thing to do is to reach out to Mike Zeno, and you can do that via the website Money Matters with mike.com. That's all. One word, all spelled out. Money matters with mike.com. And then you can also give them a call if that is your preferred method of communication. (700) 456-0157 37045601573. And Mike gives it the nice big thumbs up. All right. So now we're moving on to our five steps to recession proof your life. You know there's been some recent volatility in the in the stock market. We had just a couple of weeks ago, just a really big drop in all of the major indexes on Wall Street, and that really kind of put a lot of people's minds on edge, thinking, okay, what can possibly happen? Can we have and that that just so happened to be a Monday. You know, you just referenced the whole Black Monday situation that just happened to be a Monday. So that, you know, kind of got everybody thinking, could we experience another one of those type situations? And so that's got a lot of people concerned about perhaps a recession in the not too distant future. And, you know, I mean, there's a lot of things that, you know, are kind of bubbling under the surface that could potentially point in that direction.

Speaker3:
Mike, there are I mean, so whether that is high interest rates, whether that is extremely low savings rates by the majority of Americans, uh, all of those things contribute to the financial fragility of America as a whole, right? A significant portion of our population does not have enough savings to even cover three months worth of living expenses, which just highlights the need for much more robust and much more active financial planning. Okay. The traditional playbook for safeguarding your finances might not be effective anymore under current economic conditions, which definitely prompts a need for new approaches. And so the first thing I want to talk about is just more emergency savings. We talk about this. And man, I feel like we've beat this horse to death. Um, and then, you know, resurrected it and then beat him to death again and then resurrected it. I mean, but we can't say it enough, folks consider establishing an emergency fund that goes beyond the traditional advice of 3 to 6 months worth of expenses. You know, I have always said, hey, let's get 6 to 12, and I really prefer 9 to 12 because given the unpredictability of job markets and the potential for unexpected expenses, you know, now having a larger safety net, especially for those with unstable income, just makes more sense.

Speaker1:
It really, really does. I mean, it's, you know, you as as we've said already, you don't know exactly what's going to happen. There's an unpredictable sort of nature to our world these days. There's an unpredictable nature to, um, to life, to money, to all of the things. And I think it's just amplified by a lot of the stuff that's kind of going on in the world. And so, yeah, you know, just be prepared. That's the thing. When we say any and all of these things and we talk about potential for a recession and all of that, it's not to scare you. It's to help prepare you. So be prepared, not scared. That's the motto of the day. Really?

Speaker3:
Yeah. And the second one that I'm going to talk about is for those pre-retirees or literally knocking on that doorstep of retirement. If you've got 3 to 5 years, you're within the retirement red zone. The five years before, uh, and this is I'm specifically talking about the five years before. You need to save even more. Okay. Um, it is advised, honestly, to keep, you know, at least two, maybe even three years worth of expenses held back in cash, because that strategy will help avoid the need for you to sell investments during a market downturn. And so with a conservative approach even suggesting up to five years worth of expenses. So if you're in those last five years, I would rather have you sacrifice for the remainder of your working years so that you don't have to suffer when you are retired, especially during the five years immediately in retirement, which is the back end of the retirement red zone. Matt.

Speaker1:
Yeah, absolutely. Right. That's, um, you know, very, very paramount, uh, to have in mind And, you know, it all depends on your individual situation of. Course. And what your assets are right now, where you have your money placed and where it needs to move around. That is why I will say until probably until I'm blue in the face today. Reach out to Mike Zeno to get help on that score because, you know, you can help people in kind of direct them and work together with them. You know, it's not just telling them what to do, it's working with them and with their individual situation to, you know, really get them on a path to being secure, taking those what ifs off the table and, you know, just getting a better outlook on their financial life. And it all starts with a free consultation. And folks, you can get one by going to Money Matters with mike.com and scheduling it right now.

Speaker3:
Yeah I mean peace of mind again. We've said it before. We'll say it thousands of times in the future. You cannot put a price tag on peace of mind. So um, you know, the next thing that I want to talk about is side hustles. Okay. Side hustles. Because in today's gig economy, actually having a side hustle has become increasingly viewed as a crucial element of financial security. And so whether you are, you know, doing content creation online, whether you're working for one of the delivery services UPS, Fedex, Amazon. Right. Uh, maybe you're running an online shop or you are doing something like my father in law, he has a work workshop right outside of his house, and he makes some really, really cool birdhouses and, uh, and flower pots and containers and stuff like that out of wood. And they're gorgeous. And I had to, you know, continually just say, hey, um, you could sell these and make a decent monthly income because people would buy them. And he was like, what are they going to pay two bucks? And I'm like, oh my God, you know, he's still stuck back in, uh, you know, in the days of old. But people pay good money for, for handcrafted stuff these days. So having a side hustle, I just think is, you know, a good idea, especially if you've already got some skills that you could benefit off financially.

Speaker1:
Yeah. And there's so much, you know, given technology and the ability to sell things online and stuff like that. Now you can do a lot of these things from home. I mean, you don't even have to, as you know, you were saying, they're with you can have a shop right outside your house if like a workshop kind of situation, put it in your garage if you want, if you, you know, want like creating and making things, you can do a lot of stuff online as well. Um, you know, I even saw where there, you know, a lot of people will pay you to do take surveys online, you know, things like that. Like you're not going to make a lot of money with that. But it's there are different things that you can do. There are a lot of options out there. And, you know, thanks to all of this technology that's all around us, we can do it remotely and still make a decent, decent amount of money in a lot of those. Sort of positions?

Speaker3:
Yeah. No doubt. Um, I think this one is crucial, especially with interest rates at historic highs. Right. Paying off high interest debt is critical. All right. You need to prioritize the repayment of whatever those debts are, whether they're credit card balances, personal, you know, loans. Doing that and getting the high interest stuff paid off is crucial. And managing lower interest debts, um, should be considered in the broader contract context rather of one's long term financial goals. Yeah.

Speaker1:
Take care of those that high interest debt and and get that paid off. Because you know then if you ever look at the, uh, it's not in such fine print anymore. But if you look at your, you know, credit card agreements and maybe loan agreements and that sort of thing, it'll tell you right there in black and white how much you're going to be paying in interest versus how much the loan was or how much the credit card balance is and all that stuff. And it is astonishing, especially with interest rates as high as they are right now.

Speaker3:
It is. And that's one of the things I think the government got right. It used to be in microscopic print to where nobody could ever, you know, really figure it out. But the truth of the matter is, if you just have $1,000 balance, it'll take you 18 years to pay that off if you just pay the minimum payment. So let that sink in for a second. Right. Um, this next one I want to talk about could be applicable to anybody who purchased a home over the last couple of years during the extremely high interest rate environments. And of course, I'm talking about refinancing opportunities. So with those potential cuts coming in interest rates, the fed has been, you know, talking about, you know, lowering them. Individuals should definitely consider refinancing their fixed rate debt, okay, to capitalize on those lower rates, which could potentially reduce your monthly payments as well as reducing your overall interest costs.

Speaker1:
Yeah, and we're looking for that rate cut here hopefully in not to the not too distant future. Um, that is going to be welcome news for people who are, you know, paying those high interest debts. And you know, the thing that I want to sort of emphasize here as well is no matter what, you know, category you might fall into as far as your concerns in any of these different areas that we've been talking about, you know, or all of the above is meet with a financial professional like Mike Zeno, because he can actually help you establish a plan for your savings folks to to establish a plan for growth, for guaranteed income sources that will last as long as you do, and help you navigate through any economic downturns that might come.

Speaker3:
Yeah. That's that. That is for certain. I mean, I don't want for you to just have the attitude like, ah, I'll wait and see what the market is like when I get ready to retire. Because what if it's not favorable? What if it doesn't make sense for you to retire at that point in time? I mean, wouldn't you rather get to the guarantees and start planning what you're going to do with all those paychecks and what we call play checks that you're going to receive each and every single month? And if you said, yeah, Mike, that does sound a little bit like what I would rather be doing, then stop procrastinating and just pick up a phone or go to the web and register yourself for a no obligation, completely free consultation so that we can help you start your plan for your savings, for your growth, and for guaranteed income. And that way you can effectively navigate through whatever the economy or life throws your way.

Speaker1:
Yeah 704. 5601573 is the number. (704) 560-1573. Or you can go and book yourself a consultation. That's, as Mike says, absolutely free of any cost, any obligation. You can do that via the website Money Matters with mike.com. Once again it is Money Matters with mike.com. All right. So you know we we of course on Money matters with Mike talk a lot about money. Uh which may not be a surprise. Also what might not be a surprise is um, you know what your biggest expenses are in retirement because you pay them already. But it's the combination of those things that you're already paying for and some new expenses that people find difficult to balance in retirement. And that's why we want to take a look now at the biggest expenses for retirees today. This is according to a recent study that was put out by AARP and Down some very interesting findings in here, Mike. And of course, the first one doesn't really surprise me at all. But of course we we both work in this space. So we, we see what people spend money on in retirement all the time. And number one here is, is, at least from our perspective, to be expected.

Speaker3:
Yeah. No doubt. And that is your healthcare spending of all of the spending categories in your retirement. This one over time could likely become the biggest, especially if you throw in the fact that you might need long term care needs. Okay, if you are in reasonably good health. Healthcare spending should be relatively low when you retire and then jump on you as you hit your 80s and then beyond. And so, you know, while those expenses are often less for men because they sadly enough, die first, okay? Or rely on their spouse to take on those caregiving duties and activities. Um. That just means that the surviving spouse will often have to pay for their own caregiving costs. And of course, those tend to vary in different areas of the country. Right. But healthcare costs have seen and will continue to see faster inflation rates than any other, uh, spending category because they're projected to climb about 5% per year over the next 30 years, which is about twice the rate of other expenses. Yeah, which.

Speaker1:
Is kind of a little bit insane that healthcare can be so expensive, but it really, really is. I mean, you know, we've we've done, um, you know, segments before on the exact cost of kind of long term care, especially, you know, comparing nursing homes to assisted living and that to you know, something where like maybe a memory care type situation and all of that. And it really can I mean, run just to be very, very expensive. I mean, we're talking tens, if not hundreds of thousands of dollars per year for that type of care. And it is something that can bankrupt you very easily if you are not prepared for it. So again, be prepared. Not scared.

Speaker3:
Yeah. And it's, it's it's not a surprise to me. Um, because we kind of mentioned this as one of the what ifs and the meat on the bone segment that people who invest in their health and people who invest in their fitness and their wellness, they typically have lower medical costs. Okay. And that can be anything from gym memberships to yoga classes to a stationary bike. And believe it or not, buying quality shoes. Okay. The more retirees spend on fitness and wellness, the less they could end up spending on medical costs as well as long term care. So don't be afraid to spend a little bit of time and money to be able to improve your health and fitness after all. Matt. It definitely pays in this case to be and stay healthy.

Speaker1:
Absolutely right. I mean, you're investing in yourself literally at that point. So number number three then is everybody's favorite taxes.

Speaker3:
Yes okay. And I will argue that this is the largest expense that you will ever pay over the entirety of your life. It will ultimately be, well, more than what you pay on your mortgage. And even though it seems like taxes might decline when you are retired, that's not always the case. Okay, you have to have a plan for taxes when you retire, actually before you retire, because as the federal government looks for ways to reduce the federal deficit that will likely result in higher taxes. Okay. That is the government's best option to increase revenue, um, to increase taxes or to cut spending. Now, what do you think the government's going to do, spend less? Yeah. Right. Okay. Which means that the likelihood of taxes going up is, uh, is higher than them. Drastically higher than them cutting spending. Matt.

Speaker1:
Yeah. There you go. I mean, that's when it comes to kind of the two options there. Um, that's what is generally going to be the case. And, you know, there are, though, you know, while we're on the subject of taxes, here are a couple of different tax free investments that we can remind our listeners about because, um, you know, those can be part of your plan for retirement and, you know, really help cut into that which, as you say, is one of, if not the biggest expense across your entire lifetime. You can reap the benefits of that in retirement and really cut down on this expense.

Speaker3:
And of course, I know you're talking about Matt. You're talking about Roth IRAs as well as, believe it or not, folks, life insurance. Right. And so the younger that you put either of those solutions into place, the more you are going to be able to reap the benefits in retirement. So Roth IRAs, everybody has heard about those, but very few people actually understand that life insurance can be set up in the way that you're able to draw tax free income against the death benefit, or against the cash value in your policy. Significant amounts we're talking you know, I've seen I've seen $100,000 a year, policies that pay the folks 100 grand a year. But you know what? They started those things when they were in their 40s and they had 20 years worth of compound growth, uh, to be able to, you know, facilitate that type of six figure retirement income tax free. So if you'd like to take advantage of learning about either of those two strategies, then again, just pick up the phone 704 5601573 or visit us at Money Matters with mike.com.

Speaker1:
Easy breezy to do just that. Number four on our list of biggest expenses in retirement home maintenance. I mean, you know, things just like, you know, we're talking about with health and fitness and and health care and all that, the the human body breaks down. So do things around the house.

Speaker3:
Yeah they do. I mean, and think about this. If you plan to stay in your home through at least a good chunk of your retirement, you'll likely see that your home maintenance costs do actually jump considerably. And that's because you'll probably have to hire services or professionals to do some of the things that you can no longer do. Okay, my mom is 75 years old. I do not want her climbing on a two story ladder to clean out her gutters. Okay, that is just way too dangerous. Okay, so whether it's cleaning out gutters, you know, doing your lawn service, okay, your wind washing, especially if you have, you know, two story windows or three story windows and then something as simple as just cleaning your home, right. Um, a ladder, believe it or not, as you age is not a really smart idea for folks because, I mean, the more fragile our bodies become, even a simple trip off the first rung can be catastrophic when we're talking about hips and elbows and knees and back and neck, and you just break down a lot easier as we age. So yeah, all those home costs could be significantly increased even more as you age.

Speaker1:
Yeah. My mom, um, she was, uh, a hairstylist for years before she kind of semi-retired. Then she went to work behind a desk for the latter part of her career because it just did a number on her knees. And so she is now. She's got two new knees, and now that she's in her 70s, she's got two new knees. And, um, a few years ago, she fell, broke her shoulder. So now she's got a new shoulder. I told her, you know, just keep not that I want you to fall, but, you know, if you keep falling, you're going to be the bionic woman here before too long. So. Yeah, I know we know all about that in my family.

Speaker3:
Yeah. So the $6 million man, you know, with inflation and today's cost. Right. It's going to be the the $20 million woman.

Speaker1:
Exactly. Pretty much once it's all said and done. Um, okay. Speaking of home, by the way, number five on the list of big expenses in retirement are utilities. I mean, that's, um, that's one of those things that. Yeah, you got to keep the you got to keep the lights on and the water running, you know.

Speaker3:
Yeah. But believe it or not, this is one of the few expenses that could actually decrease during retirement. For one thing, you typically won't have to pay for your children, especially daughters who like to take those really long showers. Or you may not be somebody who is cooking three square meals for your family every single day. And then, as folks tend to downsize their homes, downsizing actually requires less heat, less air conditioning, okay. But nevertheless, the rates that the utility companies charge all customers, those will continue to increase annually due to the silent tax. Again, that's known as inflation.

Speaker1:
Yeah, it will definitely do that. I mean and I also speaking of of that just went to uh, in here in Atlanta with my utility company. They offer that sort of forget what they call the program, but it's like level billing where, you know, you don't have to pay the big spikes in the different seasons and all that. You just know what your bill is going to be every month. And I love the, um, the predictability of that and not being shocked when, you know, some, some months you might be paying more than you would have otherwise. But a lot of the year you're probably going to be paying less than you would have if you had just done that, that same thing. So yeah, that that's potentially something to look into as well, to at least have some predictability when it comes to what you're going to be paying for utilities every month.

Speaker3:
Yep. And then, you know, the sixth on the list, Matt, is is this thing called transportation. It's one of the most important areas of retirement spending, but it's also one of the least considered. And as folks age, especially retired people often rely on others to help get them from point A to point B, whether that's an Uber ride to a doctor's appointment or a cab ride to the grocery store and back. Um, also a lot of retirees, instead of having two vehicles right to have to pay with, you know, two car payments, two sets of insurance filling up two gas tanks. They will downsize to one car to help cut costs. So you need to keep in mind if you purchase a new car before or during retirement, you're going to face multiple transportation costs. Okay? Ranging from everything I just mentioned, the car payments, the maintenance, the gasoline, the insurance, right. All of those stuff. And even if you have an electric vehicle, okay, unless you are fully electric, like you're using wind or solar power when you plug in your electric vehicle, guess what? Your electric bill is going to be that much higher. So it really does, um, add up. And it's one of those least considered costs that absolutely needs to be factored into a well thought out and reasoned retirement plan.

Speaker1:
Yeah. Absolutely. Right. And along the same vein as transportation comes number seven and that is travel. You know, people are going to want to go places that they may have on their bucket list, especially early on in retirement.

Speaker3:
Right. Yeah. So the early the first ten years of retirement, we call those the go go years. Right. And so based on where you go based on where you stay and also based on who you bring with you, if you are treating children and grandchildren to a vacation as well, your costs will rise considerably. So again, you should plan on traveling much more during those go go years and much less or not at all in the later years of retirement, which are known as the slow go years and then the no go years. So we want you to get out there and travel, especially if there are any bucket list destinations while you are still young. And in order for you to do that, guess what? You need to have money. And in order for you to plan to have that money to be able to do those bucket list vacations, um, you need to get with a financial professional who can guide you there.

Speaker1:
And the way to do that is to go to Money Matters with mike.com. That's Money Matters with mike.com. And Mike, you sort of alluded to this in the last one when we were talking about travel there. But the kids and grandkids, they will cost you a pretty penny.

Speaker5:
Mhm.

Speaker3:
Yeah I mean I have kids and and yes they have cost me many pretty pennies you know. So spending on kids or grandkids can be as simple as, you know giving them a, a $10 gift card. Um and they might look at you like you have a third eyeball if you do that, especially these days. It could also be as lavish, though, as a trip to Disney World or a trip to Europe, or, you know, any of these other bucket list destinations that kids want to go to today. And then many retirees also choose to try to pitch in and help pay for their Grandkids college education. So, um, in our experience, when we look at the spending on grandkids, uh, you know, from the first one through the last one, it's almost always that folks tend to overspend on their first grandchild. And then when the next grandchild comes along, or perhaps several more, they are likely to try to match that same generosity, even if they can no longer afford it. So be mindful of those expenses and opt to spend more time, okay, not necessarily money with your loved ones, because the time you spend with them creates the memories. And those memories last a lifetime.

Speaker1:
Yeah, and that is the thing. I mean, spending that time, um, is so much more important no matter what you're doing. Yeah, you can do it in, in Europe or in Disney World or wherever. But just as long as you are spending time, you know, you can just as well do it on the, you know, out back on the patio or you know, that kind of thing. It's it doesn't have to be something lavish and expensive, because when it comes right down to it, your loved ones are just going to want to spend that time with you. And that's so, so important to remember.

Speaker3:
Yeah, I mean, that rings true for me. I mean, I remember sitting on just a front porch swing with my great grandmother, um, and just hanging out with her, and, and, you know, when I was six years old, you know, how, you know, old people tend to get a little flabby under their arms. And I used to just sit there and knock her your underarm fat back and forth, and she just got the biggest kick out of that because she was so sweet. Right. Well, then, you know, one generation later, my grandparents, you know, just hanging out and talking with them or hanging out and, uh, you know, my grandfather played the drums, little things like that. That was that meant more to me than than literally any money that they ever spent on me. It was the time that I got to spend with them and what I wouldn't give right? To be able to drive an hour and a half down the road or fly up to, you know, see my other set of grandparents just one more time. I mean, you can't get it back.

Speaker1:
Yeah, that's very true. I mean, you know, you're just saying that. And I remember one of my favorite memories, recent, more recent memories with my dad before he passed away a couple of years ago was just literally just sitting on their front porch and and talking, and, you know, it was just to be able to spend that time. It just means a whole, whole lot. The bottom line here, though, folks, is no matter what you want to do during your retirement years, there are all of those different expenses that you're going to have to have covered. And what we want you to do is to be prepared, right? Don't be unprepared or uncertain about your retirement. We want you to be prepared and certain. Right, Mike?

Speaker3:
Absolutely. And again, to get that certainty, to get that peace of mind. Just give me a call (704) 560-1573 or reach out on the contact Us page at money Matters with Mike calm.

Speaker1:
Yeah. Easy to do it. All right, so we've got before we start to kind of wind things down here. About ten ish minutes left in the in the show. Um, a few things to talk about when it comes to investing with emotion. So, you know, we were talking earlier on in the show about kind of the Wall Street roller coaster that we've been on here pretty recently. And that, of course, tends to happen the the general trajectory, especially if you look back over the, you know, decades is higher in the stock market. Right. But it definitely has its ups and downs. Just ask anyone who retired 2008 2009, um, because talk about bad timing. But what you want to do is not freak out when you see a day like we had a couple of weeks ago when we had that big, uh, dip in the markets and just be like, oh, I got to sell. I got to sell, you know or whatever. We want you to know, to keep emotion out of it and be logical. And so we've got some strategies here to share with our listeners about managing those emotions and becoming really a wiser investor. Number one, I think Mike is so important because you have to really be realistic about what you expect. So number one is setting realistic expectations.

Speaker3:
Yeah, I've had a few people come to me and they want to get 20, you know, percent per year. And I'm like, okay, um, it can happen, all right. But you have to be extremely aggressive, which can lead to extremely volatile and, you know, consequential returns for you both on the positive or the negative. And so I think folks need to understand that the market goes up and it goes down okay. And you need to be prepared Emotionally. Psychologically. All right. For both Gaines as well as losses and so avoiding the unrealistic short term expectations. I think that is just again smart because those unrealistic short term expectations lead to very impulsive decisions that are based on emotion, sudden emotion. So you mentioned what happened a couple of weeks ago. Yeah, it was actually on the Friday. And the you know, the market lost almost 3%. And then it took another almost 3% dive on Monday. So in back to back, you know, trading sessions over a weekend, which gave a lot of people a lot of time to worry and be anxious about it. Um, you're talking about 6% of somebody's portfolio in two days, right. And so a lot of folks freaked out and they shifted over into safety. And then by the end of the week, all of those losses had been, you know regained and then some. So inevitably, unfortunately, those people that did freak out, they ended up locking in their losses, which is never a good, uh, strategy. Right? We don't want to lock in the loss. So again, trying to avoid unrealistic expectations and then short term impulsive decisions, um, that's going to bode well for if you are able to avoid those and instead set realistic expectations. Yeah.

Speaker1:
You know, take those unrealistic expectations, um, and, and some spare money that you can afford to lose and go to Vegas, you know, like like that. That would be a, a better and probably a lot more fun plan than sitting at home and, you know, wringing your hands over what's happening on Wall Street. If you're expecting some sort of big windfall in a very short period of time like that. Um, I concur. Yeah. So number two here to manage your emotions Establish a solid financial plan. We always recommend this for anybody and anybody and everybody, because if you don't have a plan, then of course, as we say, you plan to fail. And that's especially true when it comes to your finances.

Speaker3:
Yeah. I mean, think of yourself as a as a ship in the wind, like a sailboat in the wind. Except you don't have a rudder. You're going to end up going wherever the wind blows. Okay. And this in this parallel, wherever the market blows you, good or bad. But, you know, the good news is, is that we can help you create a well thought out financial plan that does align with both your goals as well as your risk tolerance, as well as your time horizon for needing the money. We're able to provide a clear roadmap that helps you make rational decisions instead of reacting emotionally to those market fluctuations.

Speaker1:
Yeah, so planning not only helps you in the long term just with your overall financial picture, but it also helps you with your emotional state because you know that it's in writing. You know that you have a plan that is going to get you through no matter what happens. Diversifying your portfolio. Also something that's super important here.

Speaker3:
Yeah. And you know, we say diversify, diversify, diversify. And the pushback that we get is why in the world would I do something that's yielding less of a return than I can put my money over here and get a much higher expected rate of return. So spreading out your investments across different asset classes, stocks, uh, annuities, alternative assets like real estate can help cushion the impact of market volatility and minimize those emotional reactions to individual investment portfolio. That's why you don't want to have all your eggs in one basket. Unless, of course, that basket can't lose and is guaranteed to provide income for the rest of your life.

Speaker1:
Yeah. There you go. I mean, you know, because if you. Here's the thing. If you've got all your eggs in one basket and that basket is, say, the stock market, if you drop that basket, if that basket falls, um, all the eggs are going to be broken and you're going to be left with, you know, just a mess on your hands. Otherwise, if you've got it in a safe basket, then if that basket has that cushion like you were talking about underneath it, you know, the the eggs are not going to break and you're going to be still in good shape no matter what happens on Wall Street, no matter what happens in the overall economy. You've got those guarantees in place, and that's what we want people to do is get to those guarantees. Another thing here, Mike, is super important, and we obviously believe that. I know you do because we do this show every week and that is the point of the show is to help people stay informed and educated. And that's the next thing here on the list is, is really getting that information and that education to help ease your mind.

Speaker3:
Yeah. And so everybody has heard the phrase that knowledge is power, right? Everybody's heard that. And I can, you know, just look at, you know, through through the airwaves and see people nodding up and down. Um, I'm going to say you're wrong. Okay. You're absolutely wrong. Knowledge by itself is not power. You have to actually apply the knowledge before it to become powerful. Okay. And so applied knowledge is a powerful tool that helps you avoid emotional investing. We come on the air every single week to help educate listeners, to help them stay informed with the latest facts, the latest information, and simply learning more about your future retirement. It can help build confidence and reduce fear and uncertainty that often leads to emotional decisions. But that's a lot different than actually picking up a phone or going to money matters with Mic.com and putting your individual plan into play. Okay, if you just listen to us every single week and don't take any action, I worry for you, I do.

Speaker1:
You know, one of the things that I like in my financial life especially. Thanks a lot. You know, these days to technology just makes it easy is to set it and forget it. Not when it comes to investments or anything like that. You know, as far as just set it and never think about it again, because you want to make sure that you can rebalance. You want to make sure that everything is still in the right place because situations change, you know? And when we're talking about controlling the things we can control, you know, you're responding to maybe some situations that do change or rising interest rates or whatever economic conditions, whatever happens on Wall Street, all of that kind of stuff But when you can set up some automatic things that can take it off of your plate, it's one less thing that you have to remember. And so especially if there's a, um, you know, we do this all the time with our 401 s and things like that. You know, you get your paycheck, a certain amount of it is taken out pre-tax and it goes into your 401 K. Well, why not do that same sort of thing on your own and maybe set up some additional streams that are going into different places so that you don't have to worry about consciously making that decision each week or whenever the paycheck comes around to then take money and move it into a certain place and kind of physically go in and do that. The automation really does really does help in that score anyway.

Speaker3:
It does. And so I love what you said there, Matt. So many people, especially when they enter the workforce, if they're offered an employer sponsored plan like a 401 K or a 403 B, or if you're a federal employee, the Thrift Savings Plan, the TSP, right? So many people do set it and forget it. So they may come in and start maybe contributing 5%. And then 30 years goes by and they're still contributing 5%. And so this is an instance where I don't want you to forget it. And in fact, I want you to hey, you know what? When you get a pay raise, don't take it home. You're already used to living off of what you're used to living off of. Bump your contribution to your employer sponsored plan, or take that pay raise and open another plan outside of your employer. And then each time you get a raise, they're on. Maybe take home every third raise over the course of your entire career. But, you know, we suggest a minimum of 15% more for folks who are either starting later in life, uh, have borrowed from their retirement savings, whether that was for unexpected expenses or whatever it was. Right? More if you've lost money in the past, whether it was 2008 or 2000 and 20 or 2022. Um, that was a brutal year, right? So, you know, setting up automated investment contributions definitely will help. But then beyond that, you also need a rebalancing strategy to ensure that your portfolio stays in line with your long term goals without emotional interference. So, you know, somebody that has one strategy at 25 years old is probably not going to have that same strategy 20 years later at 45 and definitely not 20 years after that at 65. Right? So that can help maintain your disciplined approach to both investing and saving and preparing for retirement, just to keep you on track with all of your goals.

Speaker1:
Money matters with Mike. Com is the place to go for an absolutely free consultation with Mike Zeno. Money matters with mike.com, or you can call him (700) 456-0157 737045601573. Well Mike, that's going to do it for our time for this week's show. It has come and gone quickly here sir. But thank you as always for everything that you bring to the table. And we'll do it again next time.

Speaker3:
Matt, I appreciate everything you contribute as well. Today was a really good show, folks. I really hope you listened, paid attention, maybe even took some notes. So if you think anybody in your family or anybody in your friend circle or your, you know, colleague circle could benefit, please share the show with them. It is not lost on me that you guys could be doing a lot of other things today, but you are sitting here learning about your financial future, and without you we don't have a show. So thank you from the bottom of our heart and whatever you're doing this weekend, I hope you enjoy it to its fullest and as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704560 1573. That's (704) 560-1573. Not affiliated with the United States government. Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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