Plan Ahead for the Loss of a Spouse

9.20.24: Audio automatically transcribed by Sonix

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

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

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

Speaker3:
What's up folks? It's Mike Zeno coming to you from Fort Mill, South Carolina. Happy Saturday. All right. 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. And today, we are absolutely bringing it again. Okay. 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, sir. I hope you are as well and ready to talk all things financial and getting folks ready for that. You know what's going to be one of the longest and hopefully happiest periods of their lives in retirement?

Speaker3:
Absolutely. That's what we do. We put together retirement plans. So many people concentrate on building their nest egg, and then just absolutely ignore how to preserve and distribute their earnings throughout the entirety of the rest of their lives. So that's what we do, is we give people the confidence and the peace of mind, knowing that their money will last at least as long as they do.

Speaker1:
Yeah. And as we say, you can't put a price on that peace of mind at all. And folks, thank you again for listening to the show. As Mike says, each and every time, we would not have a show without you. So we really do appreciate it very, very much. The website is Money Matters with Mike Dot com. That's Money Matters with Mike comm. You can go there. Schedule a free consultation with Mike. And when I say free, I mean free of any cost and any obligation. You can also give him a call. (704) 560-1573 that once again, (704) 560-1573. That will make the phone that's right there in Mike Zeno's pocket ring. And you know what? He'll get back to you if he doesn't answer. Right, Mike I mean, you're on top of things 100%.

Speaker3:
You know, the only time I don't answer the phone is if I'm on the line with a client, if I'm in a meeting with a client, if we're recording, you know, if I'm doing some kind of promotion or on the rare instance that I take personal time. But if you leave me a message, I will call you back normally the same day, but definitely within 24 to 48 hours. It's just a a mission that I have. I can't stand when I call somebody, I have to leave a message and then I don't get a call back for weeks, if ever. So that is my commitment to you. You call me, I will return your call.

Speaker1:
That is the best thing to have happen when you reach out to someone that they actually care enough to call you back and help you, and that's what it's all about. And I mean, that really is what the show is all about, too, is about helping people who are listening and, you know, talking about financial issues.

Speaker3:
Yeah. And another thing I will promise you is you will never have to press one to speak English or get stuck in a quagmire of automation before you actually get to Mike Zeno.

Speaker1:
Listen, because our menu options have changed. You know, like, well, none of that, none of that stuff. And that number once again, folks. (704) 560-1573 you can also get the show as a podcast wherever you listen to podcasts. We're going to talk a lot about some some things that are very important to discuss today. As we start off, you know, we finished last week's show, Mike, by talking about the widow's tax. Right. And it's sort of preparing, making sure that you're you're actually prepared for the loss of a spouse. It's something that is an uncomfortable conversation to have, but I think a very important one, especially from, of course, the emotional perspective and, and just losing the love of your life. And all of that is, is gigantic and almost unimaginable for people. Yeah. I mean, financial standpoint, it's really important as well.

Speaker3:
It is because, I mean, if you've been married to somebody, you know, for a day, I mean, you love them enough to marry them. So if you've been married for decades and then just happen to lose your life partner, you're going to be devastated, right? And extremely emotional. And that is not the time to make important decisions. Having that planned well in advance of even a health decline is very, very important. All right. Because the more time that you have to work and plan for these things, the more options that you're going to have and the better off you're likely to be when that event actually does happen. Because, as we stated last week, and folks, if you did not listen to last last week's show, do yourself a favor and go back in time just for he was the devil. That's me rewinding a little, uh, a little play on Robin Williams as one of his skits. If you guys like Robin Williams, I did. He was awesome. Um, but if you go back in time one week and just you can do it on YouTube, you can do it on Money Matters with mike.com, either watch or listen to last week's show. You're going to get a lot of information, especially about what we're about to talk. But you know, planning in advance is huge because you need to create a smart vision for retirement without your spouse. Well, before you're in a position of being without your spouse, you know, how do you plan on spending your time when your life partner is no longer around? How do you plan on funding your retirement with less income coming into your household? Right. You have to have a smart vision for what you're going to do.

Speaker1:
You absolutely do. And that leads us right into, I think, something that's going to help us really springboard into this conversation, which is our financial wisdom. 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 Alan Larkin, who was a best selling author on personal time management. He wrote How to Get Control of Your Time and Your Life, which sold more than 3 million copies. He was born back in 1938. He'd be 86 years old these days, but a guy who really knew a lot about what to do with your time. And here is what he said that really hits home today. Planning is bringing the future into the present so that you can do something about it now. Boy, that's that really does hit home for talking about you know, what we're talking about right now.

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

Speaker3:
When you bring the future into the present, you're actually giving yourself a gift. Okay. That planning in advance, proper prior planning is going to prevent pitifully poor performance in retirement. I love this quote because in essence, you are giving your future self the gift of the plan, and so you don't have to wonder how or what am I going to do? I love it.

Speaker1:
Yeah, that's absolutely right. I mean, it's it's really you know, we often say our our crystal ball is broken, right? When we talk about trying to see the future or plan for the future and all of that, but I think that this really kind of brings it into into focus that, yeah, you may not know exactly what's going to happen, but there are some things that you do know will happen eventually, and there are contingencies and other things that you can can put in place to plan for those things and and others because, you know, I mean, obviously death and taxes, those are the things we can count on in life, right? Um, and really, that's kind of the the focus both of those today on what we're, what we're talking about, because it's really it's the widow's tax that we're discussing and talk, talk about that a little bit. What do we mean as a little bit of a refresher here, Mike, when we say widow's tax.

Speaker3:
Right. So I mean when we talk about the widow's tax this is huge because inevitably if you are married at some point in time, one of the spouses is going to pass away before the other spouse. It very, very rarely happens that both spouses pass away together. So if you don't plan for that, um, there's going to be specific challenges that the surviving spouse is going to have. So like an immediate loss of income, one of the Social Security payments will go away, which means that anywhere from a third to half of your Social Security is gone. Okay. And as soon as the spouse passes away the following year, you're going to be in a higher tax bracket because you're a single filer and you're going to lose the tax deduction because you're no longer married, which means your Social Security is taxed at a higher rate, which means that your Medicare will go up because you're in a higher tax bracket. And all of these new financial challenges are going to have to be faced right after you've just lost your life partner. So, you know, anytime that you can prepare in advance, it is just smart.

Speaker1:
It's absolutely smart to do that and not be caught off guard. You know, when inevitably something like that does happen, you both need to be, you know, you're in a partnership, right, with your with your life partner. You need to both be prepared. So how can people actually plan and get prepared for dealing with this widow's tax?

Speaker3:
Yeah. Well, number one, it's crucial to start meeting with and working with a financial professional before. Um, one of you passes away and ideally be well before any of your health ever begins to decline. Because the more time that you have to work with me for an example, the more options that you're going to have, and the better off you're going to be in retirement. When the loss of that spouse does, the first thing that we're going to do is help you create a solid retirement income plan, so you'll be able to understand all of your expenses and all of your income and the cash flow that you've got, because that is what it's really all about, folks. It's not about how much you make or how much you save. It's about the cash flow. And so, you know, we'll help you establish income sources that you can count on and never outlive. And so, you know, just one example. A great way to do this is by replacing the bond portion of your portfolio with a fixed income annuity. For an example okay. We'll help you measure before you get there whether or not you have an income gap, which is not a good situation to be in, or you have a retirement surplus, which means you have more money than month at the end of every single retirement month before you actually retire, which involves calculating expected expenses and balancing your budget that we like to call a spending plan. Matt.

Speaker1:
Yeah. That's right. I mean, because people often don't like that word budget. You know, it's like it's a four letter word that's got more than four letters in it, and they're kind of scared of it. So call it, you know, call it a spending plan, call it a beautiful butterfly, call it whatever you want to call it. That's nice. And and and and, you know, non-threatening to you. Um, but call it something that will make you actually, you know, not be scared of actually budgeting because it's so crucial and so important it is.

Speaker3:
And if you're still in your 40s or you're in your 50s, then we can help you build a plan to receive a tax free death benefit when your spouse passes away, and that will help ease the income pressure. We can also show you how to completely eradicate, delete, kick out the IRS from your retirement accounts by implementing what's known as a Roth ladder conversion as soon as possible. Okay. Um, and obviously we will want to immediately review and then reset your financial plan upon the death of your spouse and will encourage you to consult with a CPA or other tax professional each and every single year just to verify that you're on track. Dealing with the emotional burden of losing a spouse often takes time. It takes support from family members as well as from professional counselors, and you need to have people on your team that are looking out for you and looking out for your best interest. All right. And you can take steps in advance to ensure that those financial challenges don't add to the overall stress that you're going to experience at that point in time.

Speaker1:
Yeah, and you can do that by getting in touch with Mike Zeno. 704 56015737045601573. You can also go online to Money Matters with mike.com. And you know, Mike, it's very important that people consider all of those different aspects of retirement. I mean, you know, one of the things too that I think is super important that you said was getting all of this in place and having these discussions, asking these questions before retirement, right? I mean, you don't want to get to retirement and then just be, you know, caught, uh, on on your, um, I don't even know what kind of metaphor I'm trying to use here, but caught off guard by by the things that are going to happen, um, in retirement. And you said, well, I just don't have a plan. It's all about planning and planning in advance and asking yourself some important questions.

Speaker3:
And the discussions, Matt, that everybody should have at least. I think two really, really important decisions that every couple needs to have and consider before they retirement. The first one is when should my spouse and I claim Social Security benefits? Okay, that's huge because in general, the breadwinner should delay, which means whoever's Social Security is going to be more at age 62 should delay taking theirs. Um, because by doing so, they're setting up, uh, either themselves or their surviving spouse upon the death of one of the married folks there, because what will happen is the smaller of the two Social Security payments goes away. So that's a general statement. Obviously, there are things and mitigating circumstances that come to play when making that decision, and having somebody that does this every single day, helping you navigate those choppy waters can definitely bode well for you in retirement. And then you know what happens when one of the spouses goes away? How will the surviving spouse fill the income gap that's left by one of the Social Security payments that goes away? Well, if you don't have a plan to address that well before you're retired, you're going to find yourself reacting in any time you have a reaction to something that is a potential negative. Right. You want to be proactive. Um, if you are proactive, you plan for contingencies. If you are reactive, uh, you're just behind the eight ball right there, Matt.

Speaker1:
That's right. And you don't want to be in that position. Something else to, you know, when we're talking about, you know, getting on later on in life, um, as a, as a spouse and in a couple situation. Um, one of the things that I think is also important to have in mind and to have in hand is a living will talk about why that is so important as well.

Speaker3:
It is paramount because a living will, which is, you know, also known as an advanced health care director, it's it's a legal document that allows individuals to specify how they want it to be treated from a medical perspective, if they become unable to communicate or write, a living will is going to outline an individual's preferences regarding life sustaining treatments. You know, pain management, organ donation. Do you want them to keep the plug in? Do you want them to pull the plug? At least you are taking that burden off of your loved ones. Okay. A living will serves as a legally binding guide for the health care professionals, as well as the family members, to make the decisions that align with your wishes right. Legal requirements for a living will will vary, so consulting with an attorney or following local guidelines is definitely advised for creating a valid as well as enforceable document. Folks, we have people on our team that can help you with that. And if you have any questions about how to go about setting up a living will, we'd be happy to discuss this and assist you by providing resources during your complimentary consultation with us.

Speaker1:
Yeah, and talk just for a second here, Mike, about what happens during that consultation. And and, you know, I mean, we say it often that these are at no cost. There is no obligation or anything like that. But what actually happens? You know, I think a lot of people might be kind of intimidated by meeting with a financial professional if they've something they've never done before or think that, oh, that's only for people who have millions and millions and millions of dollars. But that's that's not true. And it doesn't have to be an intimidating process at all.

Speaker3:
It doesn't have to be intimidating. In fact, you know, a lot of people think of, you know, big banks, they think of Morgan Stanley, Charles Schwab, even Edward Jones. Right. And they think of the suit and tie. And I'm about as approachable as approachable can be. I don't care who gets your money, whether it's your church, your children or your Chihuahua. I just want to make sure that you are literally in the best financial situation that you can possibly be in. So we can meet at your house, we can meet in my office, we can meet virtually in zoom, where I can work from wherever I am in that moment. And all you have to do is have a screen, whether it's your, you know, iPhone or Android device, an iPad or tablet or your laptop or PC, right? We can meet there. And you're only going to work with me if it makes sense. But one of the things that I have an uncanny ability of doing is taking some fairly complex strategy, some financial strategy, and being able to break it down into plain English layman's terms that anybody can understand. So the first thing I'm going to help you do is analyze your current financial situation. We can't figure out a plan for you unless we know where you are. Okay. Um, we can look and discuss what you're paying in fees. We can help you cut costs that you might have within your portfolio, whether it's in your IRA, your 401 K, or any other type of retirement savings account, we can help you plan for Social Security maximization. We can help you plan for Medicare. We can help you plan for what happens from the death of a loved one or spouse. Um, bottom line is we can compare your current situation to what's possible if you work with us. And as Matt alluded to, you are only going to work with me if it is best for you.

Speaker1:
That is absolutely right. And if you want to get started along that road, folks, money matters with Mic.com is the website you can go to. Once again, money matters with Mic.com or you can give Mike a call (704) 560-1573. Well, in the last little bit of the show here, Mike, I wanted to talk about something. I feel like people don't necessarily think enough about when it comes to planning for, you know, your retirement years. And because people look at insurance and yes, we're talking about insurance, they look at life insurance specifically and life insurance type products as just a death benefit. But there can be more benefits beyond that and quite a few of them, because these, you know, policies that are around today are not your grandfather's life insurance policies. And, you know, even though the companies that I know that you work with have been around since probably long before your grandfather was even born.

Speaker5:
Yeah.

Speaker3:
The oldest company I worked with, I think they were founded in 1848. But, you know, folks, people either hate or love insurance, right? I hate paying insurance premiums. But I was very happy when a storm came through Rock Hill, and I had a lot of storm damage to one of my rental properties that I had insurance. They are going to pay for brand new siding, brand new roofing, brand new gutters, brand new downspouts. If I had to pay all that out of pocket, it would cost. I mean, it would take multiple years worth of premium, right? So I'm glad that I had that. People insure their cars in case of an accident, their homes in case of storm damage. They insure their boats, they insure their motorcycles, they insure their lives. But how many of us actually insure our income? Okay. And so when you deposit your money in a bank, including bank certificates of deposit, the bank is only required to keep 10% of your money in reserves. Okay. And that's a Federal Reserve requirement, while the remaining 90% is used for other bank operations, including loans that are made to other customers.

Speaker3:
So they're taking your money and loaning it out. They're only required to keep $0.10 on the dollar. In comparison, we work with highly rated multi-billion dollar insurance companies that have been doing this since well before you were in diapers. Okay. And life insurance can be structured to do a whole lot more than just provide a death benefit. Okay. Some highly, um, structured life policies can actually provide you with tax free income in retirement. And then we can use a product like a fixed indexed annuity to guarantee you a another income stream guaranteed again, for the rest of your life, no matter how long you live. And that's just another example of a retirement tool that is used for safe money protection. And guess what, folks? Banks, while they're only required to keep 10% of your money on hand, insurance company are federally mandated to keep 100% of the dollars that you give them in reserves, as well as having a surplus. So you never have to worry about an insurance company going out of business. While hundreds and thousands of banks have gone out in the past.

Speaker1:
Yeah. That's right. I mean, when have you heard about an insurance company going belly up? It does not happen very often if if at all. Um, you know, in recent, in recent memory, at the very least here. And I mean, you know, you're right, Mike, we really do insure so many things in life, right? I mean, we health insurance, homeowner's insurance, which, of course, you mentioned their car insurance. We're required to have that to be able to pull our cars out of our driveway at all. Um, you know, renter's insurance if you're renting. Travel insurance if you, you know, have a trip, big trip that you have coming up and something goes wrong, you want to make sure that that's covered. Pet insurance as well to to keep the pets healthy. I mean, but people hesitate to insure their own lives sometimes. It's kind of counterintuitive there.

Speaker3:
Yeah, not only their lives, but I think equally as important is ensuring your income in retirement. And so just ask yourself, right. We've had a lot of market volatility over the last several months. Okay. This is an election year. Regardless of who you hope wins. Um, there's bound to be some market volatility. And if you are tired of seeing your account balances drop or barely keep up with inflation, then I would definitely encourage you to consider placing a safety net around a suitable portion of your hard earned savings by getting in contact with me and putting together a plan where I can show you how to never, ever lose a penny of that hard earned money while still participating in market linked gains, all without the potential of market linked losses. And so if that interests you at all, as it does many pre-retirees and retirees, okay, they're concerned about the potential rates of return, then all you have to do is pick up a phone and give me a call at (704) 560-1573 or visit Money Matters with Mike comm, and I can show you how to get out of the Wall Street Casino and, you know, feel confident in a plan that will balance both safety and risk.

Speaker1:
And, you know, it's I love that you mention it and and talk about it that way, Mike about the Wall Street casino. It's funny because I was talking to somebody not long ago who had said, you know, I know that I'm taking too much risk with my investments and in my overall portfolio. It's like, I know that, I know that I am. Did kind of an analysis of everything and was he was actually surprised at really how much risk he was taking inside that portfolio, but at the same time really likes to watch the portfolios every day and had several different accounts, 401 IRAs and that kind of thing, and really liked to sort of play and trade and do all the things. So was reluctant to give up a lot of control because he was sort of enthralled by the Wall Street casino, but still knew in his mind he's like, I got to get this risk under control. Yeah.

Speaker3:
Matt, I see that all the time. Right? And the trick is to get the balance. Okay. Balance is paramount when it comes to establishing how much risk you should take and be willing to accept at a particular age. Obviously, if you're still young and you're in your 20s, 30s, 40s or even early 50s, you know, you you can afford a little bit more risk. But the truth of the matter is, is that as you mature, get a little longer in the tooth, you should not be willing to risk as much of your hard earned savings because especially as a pre-retiree and retiree in that retirement red zone, the ten years before retirement, the ten years immediately in retirement, you just cannot afford to lose because it's just going to take much longer to get back. And then after you retire, you're no longer contributing because you're no longer earning income. So that is the key is the trick is to get that balance of of risk and reward.

Speaker1:
And if you feel like you are not properly balanced between risk and reward, I encourage you to go to Money Matters with mike.com. That's Money Matters with mike.com. Schedule that free consultation. You can also call Mike (704) 560-1573. Well Mike that's all the time we've got for this week sir. But I thank you once again for being a part of the show. The biggest part of the show, bringing all the knowledge and wisdom to us, and we'll do it again next time. Sir.

Speaker3:
Thank you, Matt, for everything that you bring as far as production quality to the show. But I say this each and every single week because I mean it without our listeners. We don't have a show. So from the bottom of my heart, thank you, thank you, thank you. And if you learn something today or you think any of your friends, family members, coworkers or loved ones could benefit from, encourage them to subscribe to Money Matters with Mike. Go to the, you know, hook up with us on on the socials and, you know, just help them help themselves, okay? Whatever you're doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.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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