MMWM Full Show 8-5-22.mp3: Audio automatically transcribed by Sonix

MMWM Full Show 8-5-22.mp3: 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 live from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Today, we are absolutely going to bring the heat. We're going to give you plenty of useful information that you can take with you and apply to your personal situation. And once again, I have the distinct honor and privilege of being joined by the one, the only, Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. I hope you're having a great weekend so far.

Mike Zaino:
My m brother. I hope you are as well.

Producer:
I am. I am. You know, it's been a struggle to try and stay cool and stay stay calm in the heat, too. You know, it's it's just been kind of kind of nasty this summer. But, hey, was it hot to the fall? Is it hot out there? Have you been. Have you have you been outside over the past? I don't know. What, three months?

Mike Zaino:
I haven't been outside over the past several days. This week has been so busy. I've had more more appointments this week than I think I have in quite some time. I think listeners out there are realizing that they need help and they're calling and they're setting appointments and we're doing a lot of consultations. So, I mean, I've had 22 appointments so far this week and I have more scheduled for later today and a whole slate of them for next week too. So I haven't been outside quite as much as perhaps I would like to. But hearing you say how hot it is out there, I don't know if I'd actually like to be outside. I just thank God I have air conditioning.

Producer:
That's right. I was going to say, just stay inside in the A.C. and you will be just just fine. But it sounds like you've been you've been interacting with a lot of folks and having some great conversations. And that's really what it's about. Right. With with the show here is giving people that information, like you said, to start off with where we can really help them make better financial decisions for their life. That's what you're all about.

Mike Zaino:
It's all about education. I mean, we've said it before that a lot of people think that knowledge is power. But unless you put that knowledge into practical application, you're really not forwarding yourself and progressing through financial maturity. And so so what we do is we develop plans and easy steps to take so that folks can actually put them into action step by step by step. And a lot of people who are out there who think, man, it's impossible to save for retirement, especially everything that's going on in the world right now. You know, I was asked a long time ago, how do you eat an elephant? And I'm like, huh? And they said, How do you eat an elephant? And I just I looked at them like they had a third eyeball on the forehead. I'm like, What are you talking about? And the person said, One bite at a time. So when you see something that it seems so monumental that that it can't be overcome, you just have to take baby steps. You crawl before you walk. You walk before you run, you run before you leap. So it's that's why these plans are so important, for sure.

Producer:
Yeah, definitely so. And if you folks in in listener land, as we say, we'd like some more information about all of what Mike was just talking about. Money matters with Mike Dotcom is the website. You can listen to past episodes there. You can see all of the information about how to get in touch with Mike Zaino and get a free consultation for your particular financial situation. The phone number 704560 1570 37045601573 as well. And you can also subscribe to the show, by the way, wherever you listen to podcasts. We would love it if you would subscribe there and leave us a rating. Always love that feedback. And speaking of giving people some some some knowledge about how to walk before you can run and run before you can leap and all of that. People have been really worried this week, this recently, I should say, past couple of weeks, we've had some fairly grim economic news out there. Of course, the Federal Reserve has raised interest rates another three quarters of a point, and then we had another quarter where a GDP growth, that's the gross domestic product. So that's how we measure the growth of the US economy. That is saw another downturn in the last quarter as well. So a lot of things out there making people really, really nervous.

Mike Zaino:
Mike they are. And you saw especially what went on with that this week the. The markets are reacting. We had some good days in there. And in fact, when when the Fed was was about to make their announcement, we saw some growth this week, but then we saw some whipsaw back and forth. And so, you know, we can't predict the future, but what we can have control of is how much we're saving and how much we're preparing for retirement. And that's why I think that it is so important that we get as much information as we can, process the information, and then determine what's best for our individual situations.

Producer:
Yeah, absolutely. So, so important. Well, as we continue on with the first part of the show here, we always like to share a bit of financial wisdom with you in our Quote of the Week. And this week, the quote comes from Milton Friedman. And it is Congress can raise taxes because it can persuade a sizable fraction of the populace that somebody else will pay. I don't know about you. I always like it when somebody else pays. But, you know, that doesn't necessarily always work out that way.

Mike Zaino:
No, we talked about that as well in previous shows about, you know, it's great to tax the rich. You know, that's that's a great theory that Congress has and a lot of America gets behind that. But the bottom line is, is that it does trickle down, there's a ripple effect, and that they're convincing the American population that those higher taxes are not going to trickle down to them. But I think we're seeing that that's not the case. All right. People are suffering right now and they're taking home much less of the dollar, not only because of inflation, but because of the taxes. I think refunds were actually down this year. And that's you know, that's that's not it's not a good place to be for a lot of folks who depend on those.

Producer:
Yeah. Less money in folks pockets and and that's the thing even if you are and this is kind of the theme of today's show, even if you are someone who is considered a well paid American, which you can sort of everybody, I think, kind of has their own definition of what being well paid means that you might be even making over $100,000 a year or more, but still be broke. Right. Like you can, depending on your financial situation, the debt load that you carry and those payments that have to come out of your your paycheck every month, you could on paper look like you're making a lot. But but it not necessarily be the case.

Mike Zaino:
Absolutely. And this year, you know, wages are up between somewhere between 5.1 and 5.6%, depending on who you believe. But that still trails the pace of inflation. And so when wages rise at a slower pace than inflation, your paychecks just don't go as far right at the grocery store, at the gas pump. And those are two areas of the budget that are getting particularly squeezed. So when you say well paid, Americans are actually broke. Yeah. And what is well paid? Somebody that's making 50,000 may consider themselves well paid. Somebody that's making 80,000 may consider themselves well paid. And then somebody that's making 200,000 may consider themselves well paid. But what I have learned is that the more you earn, the more you spend. And so even wealthier Americans are definitely having a harder time getting by.

Producer:
Yeah. And I've been there, you know, in and a lot of it too depends on where you live in the country, too. I mean, you know, in luckily we're here in the south, we have a fairly decent cost of living compared to some other areas. And I know from personal experience because I used to live in New York City for ten years and one of the most expensive places to live in the country, I think only next to San Francisco maybe is New York. And I was making a fairly good salary when I first moved to the city, but then you're like, okay, that was coming from Georgia. It sounded like I made quite a bit of money. But then, you know, you we always used to joke that you walk out the door in New York City and 20 bucks falls out of your pocket just just for the privilege of walking out the door. So it's not a cheap place. And so a lot of it depends on not necessarily the dollar amount that goes into your bank account when that direct deposit goes through each week or every two weeks or whatever. But it's how much you have to pay just to live.

Mike Zaino:
Yeah, there was there was a Lending Club poll. They polled over over 3200 adults and half of the workers that earned more than 100,000 a year. They said they had little to nothing left at the end of the month. And so depending on where you live, like you said, 100,000 is not what it used to be because of the rule of 72 that we've discussed in previous weeks, because of inflation cutting in and compound interest affecting them in a negative manner as opposed to them earning it. And so nearly 60% of Americans I thought this was a staggering statistic. Nearly 60% of Americans can't come up with $1,000 in an emergency. What do you think of that, man?

Producer:
Wow, that is staggering. I expected a, you know, a fair share of Americans to not be able to come up with some emergency funds. But the two things that are shocking to me about that statistic are, number one, how many Americans can't come up? With emergency funds. And number two, how many Americans can come up with $1,000 in an emergency? Because if you think about what what kind of emergency or are you talking about an illness, an injury, some sort of disaster that affects your home or your car or something like that. You've got to have some money to be able to pay that. Obviously, people struggle with with finances. Some people are not making a lot to begin with. Some people just have a lot of debt. So not being able to come up with that $1,000 for that many people in the country, I think that's that's kind of wild.

Mike Zaino:
I mean, so many people live paycheck to paycheck. Why why are Americans so bad with money? Because in other countries, you don't necessarily see this. You see people that that that are taught from a young age that they need to be saving money. And I think America is the land of instant gratification, right? When we see it, we want it. We buy it, whether we can afford it or not. And we swipe the plastic. And that can get so many people into just such extreme debt because paying minimum payments or paying just a few dollars more than the minimum payments, it just keeps you in that perpetual rat wheel of of chasing, chasing, chasing. And it just it never you never seem to cross that finish line.

Producer:
Yeah, that really is. You're absolutely right. In just this vicious cycle of wanting the stuff and getting the stuff and have and and buying that stuff makes you feel good. Because if you're not feeling that the impact of that money going somewhere, like if you're, if you have a credit card or charge card or whatever, you just, you know, the cashier swipes that plastic, as you said. And okay, that's great. Now I have my stuff and you don't really think about the consequences later on.

Mike Zaino:
Yeah, no doubt. In while, by historical standards, wage growth right now is high. It's not keeping up with that increased cost of living, which is growing at the fastest pace that it has in four decades. And the challenge is that this requires folks to deplete their savings and use their safety net and that can cause other problems. Right, because they become financially vulnerable. And so I was reading something on the website, Personal Capital, and it said, according to their article, that that in order to feel financially secure, they need Americans need to feel like they're making at least $122,000 a year, which is more than double the national average. National average salary is 60 grand. So, I mean, when you when you look at that, it's like, wow, yeah.

Producer:
I mean, that is that's pretty staggering as well, that people need to be making more than twice what they are to actually feel financially stable. You know, I mean and that just sort of shows to go you as as Daffy Duck would say it shows to you that you don't necessarily know just just what you see. As we've been saying on paper and what goes into your bank account every month isn't necessarily the end all be all answer to your financial situation.

Mike Zaino:
And I think those that are especially vulnerable, they fall into two main groups. Right? Those that have low incomes, they have low educational levels and or they may have lost a job. They're extremely vulnerable in these types of inflationary periods with higher taxes and those that have moderate to high incomes, but they also have substantial debt. They have the credit card balances, they have the mortgages, they have the student loans. All right. And like I said just a few minutes ago, it seems like the more they make, the more that they spend. And everybody is trying to keep up with the Joneses. Right. It's so funny. In my neighborhood, you'll see somebody wake up at 8:00, 830 on a Saturday morning and start cutting their grass. And then by the end of the day, everybody's lawns are have been mowed or you see somebody out there washing their car. And then by the end of the day, everybody's got to drive in a shiny car. Well, it's the same thing with spending. So one of your friends gets a 75 inch high definition 4K TV, and then the next thing you feel like you need to go out and buy one, or somebody buys a new car and then you feel you need to one up them and buy a new car.

Mike Zaino:
I mean, I see people that are paying $800 a month or more in car payments. And and to me, that's just absolutely unfathomable, just to try to keep up with the Joneses. And what they don't realize is that the Joneses are broke, too. Okay? Everybody's trying to impress people that they don't even really like to begin with. Right. And so the lack of discretionary income is one reason why so many people and so many households have trouble saving for retirement. And what's the solution? Well, you have to learn how to pay. Yourself first. That is a key tenant in being able to prepare well for retirement. If you wait and you paid a light bill and you paid the mortgage or the rent and you paid the car payment and the insurance and all your subscription services and your cell phone bill. You know, if you wait and to see if there's anything left over, guess what? There's not going to be anything left over. The first person that you should actually pay when you get a direct deposit or for some of you out there that still insists on paper checks and you know who I'm talking to? There's several out there that still like paper and companies will oblige, at least some of them will.

Mike Zaino:
If you're not paying yourself first chances of you retiring comfortably or minimal, you have to learn to take whether it's 5%, 10% or 20 or 30% right off the rip. If you can learn to live off of that, one of the biggest pieces of advice that I that I tell my my kids and young as young adults as, hey, like when you get a job and that job offers you a 401 K from day one, contribute 15%. You will never miss it because you will learn to live off less. And then if you get a pay raise, instead of doing what most people do and elevate their standard of living, you need to contribute more to your 401. So if you get a 3% raise, then contribute 3% more to your saving maybe every two or three raises that you get over time. Take that home and reward yourself. But if you can do that and do it consistently from a young age, by the time you reach retirement, you'll have more money than you know what to do with.

Producer:
Yeah, well, and that's the goal for everybody. I feel like you just have to know how to go about getting there, and that's why you are here. And you offer people the chance to get that knowledge that's so important and see where they are. And I think sort of what we've established so far in the show is it doesn't matter really how much money you make, how much money you bring in, everybody sort of needs that that guidance. And just another set of eyes on their particular financial situation, right?

Mike Zaino:
Absolutely. And that's why we're able to provide those comprehensive consultations that have kept me so busy this past week at absolutely no cost to our listeners and no obligation. And you only work with us if it's right for you. I'm only going to work with you if it's right for me. And in bottom line is, is that my job is to help as many people reach that financial freedom, or at least some degree of financial freedom as humanly possible.

Producer:
And if that sounds like a good idea to you folks out there in listener Land, Money Matters with Mike Dotcom is the website. It's all one word. Money Matters with Mike. The phone number is 704 560 1573.

Mike Zaino:
Call me.

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

Producer:
All right, Mike, it is one of our favorite times of the show. We get to sort of test at least my financial knowledge anyway with right or wrong. And what's going to happen here, folks, is it's a little bit like true or false kind of a thing. I'm going to make a statement and our resident expert, Mike Zaino, is going to tell us whether or not that statement is right or whether it is wrong. All right. You're ready for number one here, Mike.

Mike Zaino:
I'm ready.

Producer:
Matt. Good. All the synapses are firing. We're good to go here. Here we go, folks. Number one. In right or wrong, you should keep working and stop contributing to your retirement accounts to maximize your Social Security benefit. Is that right or wrong, Mike?

Mike Zaino:
What? Are you, crazy, Matt? That is absolutely wrong. Now, you might want to keep working and delay taking Social Security, but that's a personal decision and obviously one that we can help analyze and determine in the consultation. But whether you do or you don't, you want to keep your money working as hard as you do. And it's extremely important to get a Social Security maximization plan because without a plan, you could only be getting $0.15 on the dollar because up to 85% of your Social Security is taxable. Or with the plan, you can control 100% of those dollars that you're investing in your future retirement, which sounds better to you, Matt.

Producer:
Yeah, I would I would love to be in control of 100% of those dollars. Absolutely.

Mike Zaino:
Absolutely. And you never you never want to stop contributing to a retirement plan if you ever expect to live comfortably in retirement. So, no, you definitely don't want to stop contributing to a to a retirement plan.

Producer:
Yeah. Well, there we go. Well, I'm oh for one in right or wrong this week. Let's see if I can redeem myself here. I don't know. But here's statement number two. There is no way to grow your money tax free in an IRA. Is that right or wrong?

Mike Zaino:
Oh, boy. Matt, you are wrong again. Oh, for two. A swing and a miss. Okay, so in a Roth IRA, you're able to pay taxes on the seed. So think of this like you are a farmer. There are a lot of farmers out in the in the south Charlotte and upper South Carolina region. They grew up on a farm. They may still live on a farm. So imagine you have this this big £50 bag of seed and the government gives you an option to pay the tax on that seed. Right then up front, what they would rather you do is go across into the fields, prepare the soil, remove the rocks, remove the the trees, get that soil really ready to receive the seed. So the seed and then over the course of the entire season, for example, your entire working career, they would rather you keep the pests out, keep it watered and good and irrigated, and make sure that you grow and fertilize and grow it as big as you possibly can so that at harvest time retirement, they are just going to tax the amount of harvest that fits back into that original bucket of seed. Right, wrong. They're going to attack the whole farm. Okay. And so that's the advantage of the Roth IRA and that you pay those taxes on the seed, you pay the money up front. That also allows you to take tax free distributions in retirement, because the whole time that money was in the Roth, as long as it's been in there for five years, it's been growing tax free. And then there are no required minimum distributions in retirement once you reach the age of 72. And for those of you who don't know what required minimum distributions are, again, if you're fortunate enough to never need tax deferred money, tax or money that you have never paid taxes on, once you turn 72 now the government will force you to take required minimum distributions just so they can collect the tax base. Isn't that nice of your government?

Producer:
And it's so nice, you know, that everybody's best friend, the IRS, is going to come knocking at any and every opportunity, aren't they?

Mike Zaino:
Hmm.

Producer:
Well, let's go on now to number three. I've got to I've got to at least try and redeem myself here.

Mike Zaino:
You're o for too long.

Producer:
Oh, let's see if it's a swing and a miss or if it's a home run this time with number three, a 6040 portfolio that's 60% stocks, 40% bonds is a tried and true method and is still the best way to construct a portfolio for retirement. Is that right or is that wrong, Mike?

Mike Zaino:
It's three. You're out. It's wrong. It is absolutely wrong. Now, 60 40% of portfolios in the past have been tried and true. But the the reason you're wrong is you're saying that it's still the best way to construct a portfolio. And I would argue that since bonds this year have just been taking an absolute beating. I mean, they've been down as much as 13%. Why would you pay for an underperforming asset when you have the ability to not have to pay a fee at all and still guarantee safe money options for your wealth in vehicles like a fixed indexed annuity? So one of the questions that I like to ask people is why would you risk your principal in order for potential gains when you can guarantee gains without a risk of principal? Which makes better sense, right? I would much rather guarantee gains without risking my principal. And there are options for those out there who traditionally have thought that bonds were the answer for 40% of their portfolio.

Producer:
Yeah, and that's something that folks need to to really think about because, you know, when we talk about risk, everybody wants to minimize the risk of losing that initial investment. So definitely an important, important thing.

Mike Zaino:
You struck out today.

Producer:
Brother. I did. I was going to say, you know, I did so well. I think I was three for three. What was the last week or week before?

Mike Zaino:
You're like Instant Hall of Fame in the last couple of weeks that we had there.

Producer:
And now I'm I'm sitting in the dugout and I'm about to get sent to the minors. Yeah. Oh, goodness. Well, there we go. Maybe I'll do better next time around on right or wrong.

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

Producer:
Well, this is probably one of my favorite parts of the show here, Mike. And it is, of course, as you just heard, our Problem Solver segment. And, you know, I here's what I have on folks. I will present a problem, as I so often do. And Mike Zaino will solve the problem as he so often does. So there we go. That's how this all kind of works. I'll give the problem. Mike gives the solution. And here is this week's problem for our problem solver. It is. So people might want to generate tax free money for their retirement. Know, we covered this a little bit in in right or wrong, but there are actually a couple of different vehicles to do this right. How would you solve that problem for somebody who comes to you and says, I want to generate some tax free money for my retirement?

Mike Zaino:
Well, a lot of people don't think that there's a such thing. And there's there is a thing called a smart money list where the best kind of money in the world is free money. Oh, yeah, I love free money. And the second best kind of money would be tax free money. And then the third best kind would be tax deferred. So in that order, free money, tax free money, tax deferred money. So in order to get tax free dollars in retirement, you have to take advantage of one of two possible types of tax free investments. And the first one we spoke about during our right or wrong segment, which is which is a Roth IRA, or if your employer offers you or has a 401. K plan that enables you to continue to contribute, but to a Roth 401 K or 403 B or TSP, if you're a federal employee, if they offer a Roth option, people should definitely take advantage of that just simply because, again, you're getting the taxes paid upfront. It allows your money to grow tax free. You can take tax free distributions. There's no required minimum distributions, and it includes a tax free benefit. Once you pass, leave that money to your beneficiary. So big, big, big fan of both Roth 401 KS and TSP and 403 B's and Roth IRAs.

Mike Zaino:
And a lot of folks come to me and they don't really understand the concept of how to go from one to the other. And they think that they can just take their traditional 401. K or their traditional IRA and just move it over into a Roth. And you can't do that, people, not without first paying the taxes. And there are some strategies where we can do what are called Roth conversions, but we want to definitely make sure that whatever we're converting doesn't elevate you into another tax bracket. So, I mean, it's complicated, a lot of variables, a lot of moving parts. So you want to make sure that you're speaking with an expert that's intimately familiar with these kinds of things. But one solution is to go. Roth And I'm actually I've said it before, I'm scared the government will take it away, because once they realize and once more people, I think, realize the benefit of the Roth, both 401 k type employer sponsored plan as well as IRAs, I think that more and more and more and more people are going to start gravitating that way. And once that happens, I'm praying that the government doesn't take it out and rip it right out from under us. So that's one way. The other type we've talked about this before is through utilizing life insurance as a financial tool.

Mike Zaino:
There's a product out there called an indexed universal life where your money is protected, it is tied to an index for beneficial growth. You get the upside potential, you get downside protection. And what you do is you fund it more than what the premium minimum premium calls for just to keep the death benefit alive. And what that does is allows you to take tax free loans from the cash value of your policy in retirement. In fact, many of the products and companies out there, they offer guaranteed lifetime income riders that you can attach to these indexed universal life policies. So I think they're just really, really, really a smart plan for those who have at least 10% disposable income on a on a monthly basis. This is not for somebody who's living paycheck to paycheck, obviously, but for for people who have been a little bit more diligent with their spending and saving. Absolutely. For those people right there. And the best time to take advantage of that is when you're in your thirties, your forties, your fifties, because y you still have time on your side, time to allow compound interest to work for you and grow that cash value so that you have more income tax free to pull from in retirement.

Producer:
Yeah. And I think when a lot of people think of life insurance, they only think of that death benefit. They think of the old. Either. Yeah, exactly. Either either a term life policy where it's you, you pay on it and it's good for a ten, 15, 20 year term or that whole life policy which does build a cash value. But you are really just thinking about that death benefit, mainly where you pass and then your beneficiaries get a lump sum of cash. So I think that that's a great thing to point out where life insurance is not it's not just your grandfather's life insurance anymore.

Mike Zaino:
No, it has definitely changed. And that's that's a great point, because if you have a life insurance policy that's ten years old, 15 year olds, 20 years old or older, you absolutely need a set of seasoned eyes to look at that policy and show you ways that you can improve your current situation. And a lot of times we can take the cash out of an existing policy if it makes sense for you and places you in a better position. And we can use that to fund a new policy that gives you living benefits, benefits that you don't have to die to use so that you're protected if you die too soon, if you live too long, or if you get sick in the middle.

Producer:
Yeah, well, there we go. All right. So that is our problem solver segment. And as of course, as always, Mike, I appreciate you solving the problems for me as we move on here. We've talked a lot today about about Roth IRAs. We've talked about indexed universal life and how much life insurance itself has changed. One other topic that keeps coming up, because it's something that a lot of people definitely use for their retirement planning. I know it's something that you might work with a lot of people on for their retirement years is an annuity. And there are several different kinds of annuities to kind of sift through with folks. And one type might be right for one person, but it might be wrong for another. So it's all on an individual basis, which is, of course, why people need to reach out to someone like you who can help them make sense of it all. But someone else who has helped make sense of it all for us is our good friend, Ford Stokes. He has written a book called Annuity 360. And we're going to listen to a little bit of a snippet from the book right now. One of the chapters from Annuity 360 is called The Rule of 100. I want to play it for our listeners here, Mike. And then on the other side, we'll come back, we'll chat about it just a little bit and then we'll get on into the second half of the show. But here we go, folks. It is from the book Annuity 360. This is the chapter called The Rule of 100.

Ford Stokes:
Chapter six, The Rule of 100. Big idea. You want to risk less as you get older because you have less time to make up any big losses. As you get closer to your golden years, many financial professionals advise gradually reducing your risk. Retirees and pre-retirees don't have the luxury of waiting for the market to bounce back after a dip. The dilemma is figuring out how safe you should be in certain stages of your life. For years, a commonly cited rule of thumb has helped simplify asset allocation. This rule states that individuals should hold a percentage of their stocks that is equal to 100 minus your age. For example, a six year old would have 40% of their holdings in stocks and 60% in fixed income products like bonds or fixed indexed annuities. Why you should follow the rule of 100. Take our current example of a 60 year old at age 40. Your risk capacity is higher. You have more time to rebuild your wealth should you experience a dip in the market. However, at age 60, you can't afford to risk as much of your portfolio in the market because the time horizon to rebuild your wealth is much shorter. Rule of 120. Many financial advisors now advocate the rule of 120 so they can get a significant rate of return for their clients and maintain management of the portfolio. I disagree with today's market volatility. A retiree does not want to go back to work in a job making less than what they made before. They must consider following the rule of 100 or at least a 5050 smart financial plan that is built equally with smart risk and smart, safe investments.

Producer:
And that was from Annuity 360, the book by Ford Stokes and a lot of great info there. You know, with the rule of 100, I think people hear all of these and we talk about, you know, different rules and things like that. We weave and all the different numbers that go along with the different rules so people can be confused. I think that one is one, though, that now might make a lot more sense to people who are approaching retirement.

Mike Zaino:
It is. I mean, bottom line is the older we get, the closer to retirement that we get, the less risk that we want to take. And so so while the rule of 100, I think, rings true, as I stated earlier in the show, why risk your principal for possible gains when there are other options out there that can guarantee gains and no risk of principal? So rule of 100 is great. You know, we talked in prior episodes and prior weeks about the rule of 70 to the 4% rule. And like you just stated, these are simple guidelines and in rules to kind of just go by. But we're going to tweak everybody's individual situation based, based. Wow. Words are hard today based on what you bring to the table. So somebody that is that is making 60 grand a year and and has one pot to pull from versus somebody who's making 150 or 400,000 a year and obviously a different pot to pull from provided they are not strapped in debt, then we're going to tailor make a plan that fits you and your individual situation.

Producer:
Yeah, absolutely. Well, and that is really you know, I think what it boils down to for folks is realizing that there's not just I think I forget who I was talking to the other day and and I was talking about retirement and I said, you know, you can't just it's not like you can just go out to the target or the Wal Mart and buy buy a retirement plan that is just this one size fits all thing. It is it is individually tailored for for them. And that sort of brings me to kind of a good spot here to share a story that I did this week, Mike, with with our listeners about retirees and the things that they sort of need to be worried about. I was reading in MarketWatch the other day this story that had eight big things that.

Mike Zaino:
Retirees had.

Producer:
To worry about. It's a good one and really does point out a lot of good things that people need to to keep in mind. There were a.

Mike Zaino:
Couple of really big ones in there.

Producer:
Too. Oh, totally. And I want to play it for our listeners. We can discuss it a little bit on the other side of the story here, but this is eight things that retirees need to be concerned about right now. Big changes could be coming and they may affect your retirement. I'm Matt McClure with the Retirement Radio Network. Powered by a married life, increases in costs, market volatility and fears of a possible recession. All have people who are close to retirement worried about the future. Some people who were considering early retirement are staying in the workforce, while others who had already called it quits are going back to work. Marketwatch recently published a list of eight big things retirees and pre-retirees should keep an eye on. Some of them are pretty obvious, like number one inflation, as the prices of goods and services continue to go up at rates not seen in four decades, just paying for everyday things could eat through your retirement savings more quickly than you thought. Another concern, Social Security. The trust fund is set to be exhausted by the year 2034. Potential changes to save the program could have a big impact on your retirement years. Two items on the list have to do with savings how much money to set aside for retirement and how to address a growing gap in that amount versus what most of us have actually saved. Yahoo! Finance contributor Vera Gibbons recently reported that the savings gap has been exacerbated by the pandemic, with a lot of folks dipping into their retirement accounts just to get by.

Speaker5:
We are in an inflationary environment here, and some of the experts I spoke to said given the fact that costs are going up for just about everything, they expect more people to actually tap into their retirement accounts or contribute less this year. Also, keep in mind that people are still quitting their jobs at a record rate, and that group may also be tapping into their retirement accounts, too, to cover their costs.

Producer:
Health care spending and drug prices are two more things on the MarketWatch list of retiree concerns and they could be impacted by the last two items on the list diabetes which continues to affect more Americans each year and uses up a good portion of the nation's health care resources and exercise, which could actually bring costs down by helping you stay healthier longer. So which of these items is your biggest cause for concern heading into retirement? That's a key question to consider as economic uncertainty continues to cause headaches for us all, with a retirement radio network powered by Amira Life. I'm Matt McClure. So what do you think, Mike? I mean, we've got a lot of things that people really need to be worried about. One of the things that really stuck out to me, and I think that's why I spent the most time on it in the story, was that sort of savings gap issue there where there's a certain amount and a lot of people might have different ideas about what an exact amount is that someone needs to have saved. There are a lot of guidelines out there, obviously, but the gap between that and what people have actually saved is something that is really kind of astonishing to me, that that it's such an issue and people do need to be concerned about it.

Mike Zaino:
They absolutely do. So, I mean, I've seen things that say and this MarketWatch article actually pointed that out that if you're 50, you should have somewhere between three and five and one half times your annual salary. All right. By the time you're 66 to 11 and one half times and then by the time you're 65, 7 to 13 and a half times your average salary. Now, I don't know how many people out there have the ability to save 13 and a half times. That's a great number to shoot for. Right. But you're going to miss 100% of the shots you don't take. So you need to shoot for those higher numbers and just keep pressing and pressing and pressing. And then a great solution that the article also points out is that, you know, instead of retiring, if you're physically and mentally able, keep working because you're when you retire, you're giving up a job that's paying you a presumably decent wage that may or may not come with benefits. But if you don't have a plan for how you're going to spend that time and what you're going to do, the first couple of months are going to seem like vacation.

Mike Zaino:
Then you're going to get bored. And that boredom can can lead to depression, and that depression can just lead to overeating. And one of the things they talked about was diabetes in the article. And Americans, we like our food. We lie, especially here in the South. We like our fried food. We like it's a gravy. Right. And the portions we think that when we go out to a restaurant, the bigger the portions, the better will. Diabetes is killing people. And I think the more that we educate folks and take action against eating such unhealthy foods. If we can if we can perpetuate a move toward healthy eating, healthy portions and I'm not here to preach, guys. I'm not your doctor. Right. But I'm just saying, hey, if you have diabetes, that could lead to higher health care costs for you in retirement. If you have other issues because of your diet and your lack of exercise that could lead to bigger drains on your retirement portfolio if you haven't prepared for them. So, you know, bottom line is, is just try to try to eat less, eat healthier, exercise more and not be a burden on yourself.

Producer:
Yeah, right. And that's the thing is it's not necessarily just obviously your health is the most important thing. The. The most important aspect of this here. It also can have a huge impact on your wallet, on your pocketbook, where you're spending so much on health care in the later years that you can't you know, you have to maybe take away from that retirement savings, that money that you've saved up so for so long and worked so hard to save and contribute. And now that money is not going toward you enjoying your retirement, it's going toward paying your health care bills.

Mike Zaino:
It is. And the sad thing is, is all of this is preventable. I remember when I was all the way up until about I guess about 36, Matt I still remember the first time that I felt my belly jiggle. I tell this story, I'm like, it was. It was I almost got in a car wreck because of it, because I stopped driving and I'm like, What just happened? Because I used to be in really, really good shape. And, you know, I used to be able to eat whatever I wanted to and I never seemed to gain weight. And then in my mid to late thirties, I was 36 years old and I'm driving down 77. And for those of you who are familiar with the Charlotte area, I was heading south toward Fort Mill and right at the intersection of 77 and 485, there are junctions in the road where they put these big rubber strips to allow for the movement of the bridges. And I went over a pretty rough junction and my belly jiggled and I looked down like, what was that? And I took I took my eyes off the road and I'm like, Are you kidding me? And I almost got into it. I almost ran right into the guy in front of me and I was so shocked. I'm like, Did that just happen that I got off on Westinghouse and I went down and I went north on 77 to the next exit, got back off and did it again, and sure enough, it happened. And I'm like, okay, I've got to take some action. And so I started working out really good and then I got bored with working out, as so many people do as happens.

Producer:
Yes.

Mike Zaino:
And I went back to my old habits. And that's why I weigh more now than I did at 36. Right. So I'm way older than that now. But golly, Pete, I tell that story and it was a revelatory moment in my life.

Producer:
Yeah, I'm just jealous that it took it until, like, 36 for that to happen to you as a writer? Right around 25 for me, you know, I got out of college and I had been used to eating whatever in the world I wanted to eat like you, like you had said. And but then you just reach a certain point where your metabolism cannot keep up with all of the calories that you're putting in. So you've got to you've got to do something. Something's got to give, no doubt.

Mike Zaino:
I mean, I was I was an athlete in high school, in college, and I went to a military college. I spent time in the military. So because because of that discipline at the younger ages of life, I was fortunate enough to to to not have to worry about what I ate. But it did catch up to me. Like it will catch up to everybody if if they're not watching what goes in that mouth 100%.

Producer:
Well, you know, and Mike, we're we're talking about, you know, how health can affect your your health care costs. We're talking about how that could affect your retirement. We just heard from this story that I had one of the Yahoo! Finance reporter in it who was talking about the savings gap, especially being exacerbated by the pandemic, where a lot of people were just like, okay, it really sort of changed their priorities. And a lot of people were just sort of starting to live in the here and now. And so all of this, I think, really speaks to the fact that people need a comprehensive plan. You know, they I think, at least to me from an outsider's perspective, because I'm not a financial advisor, but from an outsider's perspective, I feel like people need a comprehensive plan because so many people just don't have one.

Mike Zaino:
Yeah. Yeah. And why do people need that plan? Right. We find that way, way too many people think retirement planning is just about generating a specific rate of return, but they have no income plan. They have no idea of how they're actually going to fund what they want to do in retirement. We find that way too many people have no clue about their bonds, and in many cases, bonds are up to 40% of their portfolio. They have no clue what they are, but they're just in there and they're trusting people because they've always heard that bonds are the solution. Well, if you keep doing what you've always done, you're going to keep getting what you've always got. And there are better options out there for folks. We find that way too many people have absolutely no plan for health care expenses. And that is a major, major problem if you're if your investments in your plan, they don't attack things or have the ability to account for things such as chronic critical terminal illnesses. If you lose two out of the six activities of daily living and. You can no longer feed yourself or bathe yourself or or any of those other ones. Right. And you have to go into an assisted living facility or maybe you have in-home health care and you don't have anything to address that that's going to wreck your financial plan if you, God forbid, have to go into a nursing home, a 24 hour care facility, and you don't have anything to address that.

Mike Zaino:
Oh, my word. That will decimate your retirement plan. And it surprises us how many people have no legacy plan for their beneficiaries. They have no will in place. Some of our more wealthier folks with assets, they have no trust in place. And so in our experience, many people haven't even thought about what they want to do when every day is a Saturday. Right. And how they're going to finance and pay for every day being a Saturday. And all of those reasons I just talked about, Matt, these are reasons why people need a comprehensive retirement plan. So we're not just looking at one thing about your retirement. We're going to look at a 360 degree view and really attack several different pieces of the puzzle. And we're going to bring all of them together so that they complete a plan and give you action steps that you can take one by one by one to further yourself down and toward reaching some degree of financial freedom.

Producer:
Yeah. And that if if that I should say is something, folks, that sounds like a good idea to you. If you want, just start the conversation with a, you know, no pressure and completely free consultation obligation free cost free as well go to money matters with Mike Dotcom. That's the website for our show Money Matters with Mike all one word dot com or you can give Mike a call directly 700 4560 1573 That's 7045601573. Well, as we move along here in our last several minutes of the show, about 10 minutes left. Here to go, Mike, in the show, as I look at the old clock on the wall, as the saying goes, it's time to help our listeners help help them save a little bit of money, which I guess is kind of a bit of a difficult thing to do in this time of inflation. But it's time for our cost cutter segment.

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

Producer:
So in today's Cost Cutter segment, Mike, we're we're helping folks, you know, watch those watch those pennies and sometimes dollars, especially when it comes to shopping for sort of everyday items, you know, where's the best place to shop for those kinds of things?

Mike Zaino:
Well, I'll tell you where not to shop in. So many people are guilty of this. I've been guilty of it before. And that's shopping at the convenience store. And why are so many people falling prey to this trap? Is that it's convenient? That's why they call it a convenience store. But when you stop at a at a convenience store, your prices are going to be much, much higher. So for an example, peanut butter, peanut butter is roughly 80% higher at a convenience store than it is at a grocery store. If if the wife asks you to pick up a gallon of milk on your way home and you stop off at the gas station because it's convenient, you're going to pay about 75% more for that gallon of milk than if you had just driven a little bit further and went to Harris Teeter or Publix or, you know, or wherever you shop. And then, I don't know, some of you health, food, people out there might like to, while you're getting gas, go in and grab some kind of protein or or maybe you want to get a banana. Bananas are 50, 53% more at a convenience store than they are at grocery stores.

Producer:
It's wild. And, you know, I mean, a lot of the times, too, the thing that I find astounding about going to the convenience store rather than the grocery store is a lot. A lot of the time the convenience store is located in an out parcel, like basically in the parking lot of the grocery store or of the mart that has the grocery section or whatever. And you could really just just go in that extra 100 yards can save you so much money because you know. Right, this is so true. Trust me, I'm a lazy American as well. But these are the things that are that we're talking about are so much cheaper at the grocery store, but it's because these convenience stores don't really make a whole lot of money, if any at all, on marking up the price of gas unless they're doing some price gouging and, you know, taking advantage of situations like we've seen recently. But generally speaking, they don't make the money that they make from those types of sales. They make it. I'm selling all of the stuff inside at that big markup.

Mike Zaino:
Yeah, absolutely. And I actually know a couple of people that have worked at convenience stores and management positions and they tell me, yeah, that's that's where they make their money. It's believe it or not, not at the gas pump. And that was actually shocking to me. I thought that that's where all the money was made on gas. But it's not it's not at the pump. It's on the inside. So when you stop for gas and you go in and you buy that Gatorade and then you go in and buy that little package of Frosted Donuts, or you go in and get some chips and a Coke or a Slurpee. That's where they're making their money. So another place that or another thing, I guess you should you should ask for. I know a lot of folks out there have served in our United States military, no matter which branch. Well, there are a lot of businesses out there that will offer military discounts. They don't necessarily advertise it. But if you ask for it, you can save anywhere from 5 to 20% in a lot of cases. The outlets up at the Tanger Outlets in Charlotte, they actually do advertise it. And all of their stores that are there will have like this star that's red, white and blue. And if you see that, you know that there's a military discount that's applied there. Well, we're we're talking to people that are close to retirement. So there are a lot of folks, a lot of companies, rather, that will offer senior discounts. And and you may not like the fact that you are qualify for that, but if it can save you some money, more money in your pocket is not a bad thing. So don't be afraid to ask, hey, do you offer a senior discount? So these are just some ways that you can help keep some of the the more money in your pocket and the more you save, the more you make.

Producer:
Right. That's absolutely true. And, you know, I'm I'm not quite there myself, but I'd be like, hey, they call me a senior all day long. If it saves me, it saves me some money on my groceries and that that I would not be offended in the least. And then there are also places that offer teacher discounts. There are other places that offer discounts for medical workers, frontline emergency workers as well. So just yeah, check it out and ask. And there are ways to save money that you might not even know about. Well, speaking about inflation, Michael, let's take a look at some of the ways that Americans are paying more right now.

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

Producer:
All right, Mike. So in our inflation demonstration this week, we're taking a look at the way that we're all paying more for for a bunch of everyday things. You know, we talked about how people are paying more if they shop at the convenience store versus a grocery store. But these are overall prices no matter where you shop. And according to the Bureau of Labor Statistics, year over year, there are a lot of things that have really shot up in price wise.

Mike Zaino:
Absolutely. At the grocery store, right. Eggs. Eggs, a staple of Americans breakfast. A lot of folks use it in meals that they make for lunch and for dinner. Eggs are up 33%. That's huge right there. Something else that's up a lot. Airline fares. Airline fares are up 34%. So if you're looking at traveling, airline fares are up. Hotels are up over almost 12%. If you're not traveling and you're just staying home, electricity is up nearing 14%. So you're paying more for your power than you used to pay. And so all of these things obviously are cutting and cutting and cutting into our bottom dollar and how much we're able to save for retirement. But even still, even still, Matt, it is so important to for folks out there to pay themselves first and to not stop contributing to their savings, their retirement plans, their investments. Because when times get tough, well, you know, the tough get going, right. And so you need to get tough and you need to have this mental attitude that come hell or high water. I'm saving for retirement because I don't want to live in poverty, in retirement. I don't want to have to depend on the government, especially the state of the government, the way it is now. I don't want to have to depend on that in retirement. I want to control my destiny. And if that's you, come talk to me and let's get a plan together, because I have lots of thoughts on how not to depend on the government.

Producer:
Yeah. They can't seem to agree that the sky is blue on any given day right now in Washington. So how in the world are we supposed to know what is going on with the way they're going to regulate the retirement accounts and benefits and all of that? So so there you go. Well, Mike, that just about brings us to the end of our show today. The time has really come and gone. It's flown by. But as Mike just said, folks, if you want to reach out and get that initial consultation, money matters with Mike is the website and then the phone number is 7045601573. And Mike, the good thing that you always say, you always tell our listeners this every week is that if they call that number, it's not going to be some ramp person going up phone. It's going to well, it may it may go to voicemail, but you'll give them a call right back. But it's actually going to you.

Mike Zaino:
It rings my direct phone. It's the only telephone number that I have had since 1997. I give that number out, obviously, on the airwaves. I give it out to all of my clients, all of my potential clients, the people that I talk to in the educational workshops that I do, I give my number out. So my number, folks, is not a secret. If you haven't called me, what are you waiting for? If you don't have a plan together, what are you waiting for? If you have a friend or a family member that has no clue or could use a second set of eyes. What are you waiting for? Share my number. Call me 7045601573 OC. Listen again. Thank you. I know you could be doing a lot of different things on a Saturday, but you took time today to listen to this show. Without you guys, we don't have a show, so I'm ever grateful for the fact that you guys are listening, and I want you all to have a wonderful rest of the weekend, a great next week, and as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation visit money matters with mike dot com or pick up the phone and call 704560 1573 That's 7045601573 Not affiliated with the United States Government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature. It does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for. The content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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