Planning Ahead for Good Times and Bad

6.9.23: Audio automatically transcribed by Sonix

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

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

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

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday, people. What a great day 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're going to talk about how to avoid financial burden during difficult times. Plus, this month is Annuity Awareness Month, and we're going to give you five keys to a debt free retirement. As always, I have the distinct honor and privilege of being joined by the one, the only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, brother?

Producer:
I'm doing great, Mike. Boy, I love that intro to the show because we got a lot of stuff to get to and a lot of good stuff to get to.

Mike Zaino:
There is plenty of meat on today's bone for sure.

Producer:
That's right. We'll get to knowing it off here in a second. But I know these are these have been busy times here for you these past several weeks. I feel like things have gotten really busy there. And that doesn't mean, though, that you don't have time and don't make time for, you know, new people to give you a call if they have questions about their own retirement, if they have questions about their financial plan for the future. You are always all ears.

Mike Zaino:
Yeah, I am always all ears and I always make time for our listeners. Why? Because I want to help people. Okay? And a lot of people, they might not necessarily have the time because they also have extremely busy schedules. So one thing I do want to highlight is that as long as you have a computer, we can do virtual appointments. So a lot of folks don't understand that this is a technology that's available and you can be in the comfort of your own home or at your office while I'm in my office and you can see me and I can see you and we can converse and conduct business virtually welcome, you know, to to the year 2023. Right? We've had these technologies in place for a long time and I was actually an early adopter of Zoom. I didn't wait until the coronavirus pandemic forced everybody to work virtually. I had been using it. Why? Because I have clients all over the United States. So if you don't necessarily want to come into Charlotte, then you can just pick up a phone and give me a call and we can schedule something virtually as well. Yeah.

Producer:
704 5601573 is that number. Once again it's (704) 560-1573. The website, by the way also money matters with mic.com and that's another great place to get in touch with Mike Zaino it's MoneyMattersWithMike.com also wanted to give a shout out of course to all of our listeners who are in the Greater Charlotte area there. Thank you. Thank you. Thank you so much for tuning in. You can also get us no matter where you are, you can be in Charlotte or Saskatchewan. Doesn't matter. You can get us via podcast because we're on all the big podcast distributors, Apple, we've got iHeart, we're on Spotify, we're on Pandora, all the big ones, Amazon Podcasts as well. Everywhere there's a podcast, there we are.

Mike Zaino:
And even if you're in Saskatchewan and the reason I'm laughing is because one of my best friends actually had an office in Saskatoon, Saskatchewan, so it just brought a smile to my face, remembering all the stories he used to tell about living in Saskatoon, Saskatchewan. So I'm glad that they also have the opportunity to hear Money Matters with Mike.

Producer:
Yes, they do. Yes, they do. Anywhere there is an internet connection, you can do it. I love that. You can also check out our YouTube channel and you don't even have to be in Saskatchewan for that. You can do that anywhere. Also, go to YouTube on the app or YouTube.com on your computer. Search for Money matters with Mike and you'll see some highlights and special content there. And of course, Facebook Mike very involved in Facebook and interacting with the listeners and really, you know, having good conversations there. And that's really what it's all about starting conversations, answering questions, educating people is what the show is about. And I know that's what you're about. On the other 23 hours of the day when you're not doing this.

Mike Zaino:
That is true. In fact, yesterday evening I shared a letter that that one of my clients had actually written to me, and it just touched my heart. So I felt incumbent to to put that out on on the socials, You know, I blurred the name, but I mean, I just wanted everybody else to see that. You know what? I appreciate you guys as much as you appreciate me. And so, you know, Facebook is an excellent way to have communication and you can get to it and comment as you have time, even if you're on your break, even if you're on the toilet. Heck, I get most of my business done. I'm joking when I'm on the throne and my wife laughs at me and asks if my legs have gone numb yet. But I know a lot of the guys out there listening can relate to that story. Guess what, guys? I'm human, just like you. I put my pants on one leg at a time, just like you. So it's okay to to, you know, to say that kind of stuff on air.

Producer:
There you go. And your your wife picks on you just like everybody else's wife picks on them. So there you go. It's all we're all only human, for crying out loud. Um, and also, folks, you know, we're going to talk a little bit later on in the show. I'll tee this up in a second. We're going to talk about something that we call the widow's tax. And if you want a free report on that, that's another way that you can get in touch with Mike Zaino. And another reason for you to get in touch with Mike Zaino, because this is something especially after you listen to the show today, you know, when we talk about this later on, it's going to be something that you'll be, I think, very interested in receiving. Free report. A lot of great info in there about the widow's tax.

Mike Zaino:
Mike Yeah. And so this segment that when we get to it, that's going to hit hard, folks, and hopefully it's going to wake you up because you know, when you're in this business like I have been for as long as I have been, inevitably we have to deal with death. Right. And one of the things that's guaranteed in life is death. Nobody wants to think about it. Nobody wants to talk about it. But it is in incredibly important that you understand that there are steps that need to be taken well before this is even a possibility in order for the surviving spouse to make sure they know what to do in case of that inevitable event.

Producer:
And we're going to talk about it, as you say, more a little bit later on in the show. But you can also reach out to Mike to get that free report on the widow's tax and, you know, just being prepared for that that time, which is going to be a very difficult time in your life. Prepare ahead of time and you can go to money matters with Mic.com MoneyMattersWithMike.com or call 704 5601573. Well of course as you said at the very top Mike June is Annuity awareness month. We'll talk about that and you know go into the importance of that and exactly how valuable those can be for your particular situation. And that's what it's really all about, tailoring it to your situation. And if it's right for you, it's right for you. And if it's not, it's not right. So we'll go through that and go through the different types of annuities as well. We'll also talk about that thing we were just teeing up there, preparing for the death of a spouse and avoiding that financial burden during what is bound to be a very difficult time emotionally and all of the rest, a living will. That's also an important thing to talk about when you're thinking about that period of life. So we'll discuss that briefly as well. Five keys to a debt free retirement. And then of course, if we get to it with all the other stuff that we have going on this week, we'll get to this week in history. But first, let's get things rolling here with our Quote of the Week.

Producer:
And now wholesome financial wisdom. It's time for the quote of the week.

Producer:
And our words of wisdom this time around come from the 35th president of the United States, John F Kennedy. The late John F Kennedy, of course. And he spoke these words during his next to last State of the Union address back in 1962. And it really is a message that rings true today. Here we go. This is a quote from that State of the Union by JFK. And he said, the time to repair the roof is when the sun is shining. And Mike, you don't want to wait until it's raining before you try to repair that roof. Are a lot of stuff's going to be wet.

Mike Zaino:
This is true. You know, you know, a while back, we did a segment about making hay while the sun shines. Well, you know, I think I think this is equally as important and not waiting until it's raining in order for you to repair the roof. But, you know, JFK's quote is a metaphorical statement that emphasizes the importance of being proactive and taking action before a problem becomes more severe.

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

Mike Zaino:
So I want to break it down just to understand its meaning in a literal sense. When the sun is shining, it implies that the weather conditions are favorable. Favorable? Right. So this is an ideal time to repair your roof because there are no immediate threats like rain or storms or hail or anything that could further damage the structure. And by addressing this issue during good weather, you can prevent any potential leaks or other problems from worsening metaphorically. However, the quote suggests that it's best to tackle problems or make necessary improvements during times of relative stability or when your circumstances are favorable. It highlights the importance of being proactive rather than waiting for a crisis to occur. And by taking action early, you can prevent or mitigate those negative consequences that might arise in the future. So when applied to various aspects of everyday life that quote, encourages individuals, organizations, even governments, if you can believe that to address problems, conflicts or inefficiencies when conditions are relatively stable, it urges them to seize opportunities for improvement and avoid waiting until circumstances deteriorate or become more challenging. So in essence, JFK's quote serves as a reminder that it is wise to address issues when conditions are favorable, whether it's repairing a literal roof or addressing larger challenges in different aspects of life like retirement planning. And by doing so, you can minimize the potential impact and create a stronger foundation for your future.

Producer:
Yeah, so. So we got a repaired roof and a strong foundation. We got a good we got a good house going there. And it's important that you do have both of those things because you can have the strongest foundation in the world. But if you got a leaky roof, you're going to have problems. And if you've got a great roof but a weak foundation, you're going to have big problems, even bigger problems. So it's important that that both ends of that spectrum are taken care of, not only.

Mike Zaino:
Both ends, but in the middle as well. If you don't have good insulation, if you don't have energy efficient windows, you may be leaking, you know, dollars. Basically you're throwing money out the proverbial window by not making sure that your insulation is taken care of. Well, we got a lot of metaphors today, do we not? Yes, we do.

Producer:
And it's funny, though, too, because actually the one of the newest cost cutter vignettes, maybe we'll maybe we'll stick this in at the end of the show. The latest cost cutter vignette that I actually did was on cutting your energy costs. So there you go. You kind of teed that one up perfectly there. That's another one of those reports that we can send to you that Mike Zaino will be glad to get your way. If you go to MoneyMattersWithMike.com 23 retirement cost cutters for 2023 But great stuff there Mike. I mean, you know you've got to you know when times are good that's the that's the time to prepare for when things might not be so good. And the same comes in and we'll talk a lot about that today. It will actually go very well right into our discussion later on when we're talking about preparing for the death of a spouse, because, yeah, it's something that people, you know, we don't like to think about. We also don't like to think about floods or tornadoes or hurricanes or any of the other unforeseen kind of disasters that might happen.

Producer:
But we need to be prepared for those. That's why, you know, in schools, especially here in the southeast, they'll do tornado drills in the spring time because they want kids obviously, to be prepared for when that disaster might happen. And it might never happen. But when it does, you want to be prepared for it. Well, this is something that we're going to talk about later on. It'll happen. You know, one of one spouse will die before the other unless you're in a very small minority where something happens to both of you at the same time. But you need to be prepared for that as well. Before we get to that that segment, though, Mike, we want to highlight something here that is that's very important to highlight during this month of June, and that is Annuity Awareness Month. Yes, it is a thing. It seems like there's a month for everything these days, but this one is one that we that we actually like around here because it's an important time to call attention to annuities that are a very important part of the financial picture for so many people.

Mike Zaino:
Yeah, I mean, so I mean, it's observance obviously is in June. It happens every single year. And the goal is just to educate people about annuities and their potential. Benefits when considered as a part of your retirement planning strategy. And so a lot of people are unclear about what annuities actually are, and they're financial products that are typically offered by insurance companies that are able to provide a steady stream of income that's guaranteed for the rest of your life. In other words, it cannot be outlived and when used correctly, as recommended by a financial professional, these are personal pensions and can pay a play a critical role for retirees. So very similar to Social Security. Annuities pay you an income that won't run out as long as you are alive. And what makes them different from Social Security is that annuities are required. The companies that stand behind them are required to maintain at least a 100% financial reserve so that no insurance companies are going to ever go out of business because they don't have the cash on hand to pay out all of their annuity owners. It's never happened before, okay. And it's not going to happen again. Why? They have to have all the cash on hand, unlike a bank and unlike the government. Okay. Where Social Security is subjected to government volatility. And while the Social Security Administration has projected that its trust fund reserves could actually be depleted by the year, originally it was 2034. They've backed that up now to 20, 33. Ten years from now, that will likely lead to a partial cut in benefits if that actually does come to fruition.

Producer:
Yeah, and it's funny because, you know, you you look at that and you say, well, yeah, it is a lot like Social Security, but boy, what if the government had to have a 100% financial reserve requirement for for the program? That that has not been the case for a very, very long time. Well, we.

Mike Zaino:
Used to have that. It was called the gold standard. And all of the dollars that were in circulation were backed by the equivalent of physical gold. But that went out the window, right? And now the government likes to print money. In fact, this staggering and sobering statistic in that 80% of all US currency in circulation has been printed in the last three years since the global Covid 19 pandemic. Think about that for a second. Only 20% of the money that you see floating around everywhere was even in circulation prior to the pandemic. And now an extra 80% on top of all of the money that was in there already has been printed in the last three years. That should wake you up.

Producer:
Wow. And, you know, I mean, the companies, the insurance companies that offer these annuities, though, are required to have that 100% financial reserve there. And so that means a good amount of security for your money. It means that you will not lose that principal. That's why there are guarantees in these annuity contracts. And so, you know, Mike, I was actually listening well, I wasn't wasn't listening, actually. I was going through I was just on YouTube the other day and kind of sifting through recommended videos, you know, and getting lost down the YouTube rabbit hole a little bit and happened to run across a video by one of the big, you know, Radio Financial guys whose name you would you would know if I said it but I won't talking about a listener had called in and he was telling them about how bad annuities are and all these all these fees and all of this stuff. And this is how terrible and awful they are. And as I was listening to that, I was like, None of that is really true for especially for the annuities that we talk about. And I know the annuities that you recommend. It was it could be true of one particular type of annuity, a variable annuity, which we'll get to a minute in just a minute. We're talking about the fees and and you know, all of that. And basically being a mutual fund wrapped in an annuity kind of a thing. But we'll get to that in a second. But it was like I was just sort of flabbergasted that that person was giving into this myth, really, that all annuities are bad and giving kind of this blanket recommendation to stay away from them.

Mike Zaino:
You know, So so what I find is that there is a lot of misinformation out there. I mean, there is a lot of misinformation. You hear certain people saying that, oh, I'd never buy an annuity. And what I asked them why they regurgitate information that they have heard that might have been passed on through the rumor mill. Right. Oh, I heard my brother's grandmother's best friend's uncle had an annuity. And when he died, you know, no money was left over. And he died only a year into getting the annuity. I'm like, okay, well, that's one type of an annuity. But there are many different types of annuities out there and understanding what they are designed to do is critical in making sure that the one you choose fits your desired circumstance and your ultimate, you know, outcome for what you're looking for. And so, you know, there are these things called immediate annuities that are sometimes called single premium, immediate annuities or a CPA, and they provide an income stream after you give them a lump sum payment. There are lots of corporate and public pension plans that are actually funded using Spias, which is why we sometimes recommend taking a lump sum and then considering more lucrative annuity options offered by top carriers in the marketplace.

Mike Zaino:
That's an immediate annuity. Then there are fixed annuities which offer a fixed rate of return for a specific period. And what those are designed to do is just offer stable, predictable income and are considered to be extremely low risk. Well, then you have indexed annuities which offer lifetime income with returns that are based on the performance of an underlying stock market index and people who own indexed annuities. They enjoy market like gains without the risk of actually losing their principal inside the stock market. And then there are variable annuities and variable annuities. We like to jokingly call them scary able annuities. They offer returns based on the performance of an underlying index. Just like the indexed annuities. However, the value and the income can fluctuate greatly wild swings based on market performance. So there are times when people in variable annuities will lose a lot of their principal, and then there are other times where they make a lot. Well, the word variable means change. And so when I hear people regurgitate all these different negative aspects and myths that are absolutely that pure myth, it kind of aggravates me because they haven't taken the time to actually educate themselves and they're lumping all annuities into a group of, you know, one, basically.

Mike Zaino:
And to me that's like saying, well, I don't like food. Well, guess what? I'm not a big mushroom guy. I'm not a really big chickpea or garbanzo bean guy. But I like food, right? I love a good tri tip steak. I just grilled one last night and it was unbelievably delicious. My wife makes up these potatoes and onions. They're good, too. We had salad. I like to eat. Trust me. I have a food baby right here that I'm patting and rubbing right now that you can't see all you listeners out there. But you know, don't get so caught up in what the annuity is called. But look at instead what it actually does and what it accomplishes. And if what it accomplishes helps you stay on track toward reaching your financial objective in retirement, then that is something you should absolutely consider. So if you currently hold or think you hold a variable annuity or any other type of annuity, just give me a call and I'll do what's called an annuity x ray where I can help you understand what you actually have. Identify any fees that you may be paying and present any alternatives that can improve your future income potential.

Producer:
You can get in touch with Mike at Money Matters with Micom. Click on the contact page there and just fill out that form. MoneyMattersWithMike.com or call (704) 560-1573. That number one more time (704) 560-1573. And when we're talking about planning for retirement and getting this income stream that you can't outlive so so important because I think one of the big mistakes that people do make when they plan for retirement, Mike, is really focusing on that one big nest egg number. You know, they have this you know, they might be a job for however many years. And take a look at their 401. K periodically and be like, I'm getting close to whatever number, whatever big number they've had in their head. I'm getting close to my big number. And so that's the goal and that's all they're focused on. But what's more important than that is focused on being focused on what income you're going to have in retirement.

Mike Zaino:
Yeah. So so again, I think that that mistake, one of the biggest ones and it's very, very common is that you are trying to get to that magic number. Okay. But it's not all about accumulation. It's about all right. Once you reach to the point in life, whatever point that may be, where you don't want to work anymore, how do we make the money that you have busted your tail for your entire working career last you for the rest of your retired career? And so most people. Focus too much on maximizing their 401 K's, maximizing their IRAs or their brokerage accounts, forgetting that those are tax deferred retirement accounts and they are subject to income tax when the money is withdrawn. And if they are in an employer sponsored plan or an IRA. They're also subjected to required minimum distributions. So let's just say that you're fortunate enough to never need the money inside of your 401. K or IRA. You've done a great job planning. Well, now, as it stands, as of January 1st this year, because of the Secure Act 2.0, the day you turn 73, that's Uncle Sam going to come knocking at your door with his outstretched greedy paw out saying, Hey, I need some of that money and you need to take it so you can pay me the taxes. Okay? And so whatever your number is in those tax advantaged accounts, just understand land that somewhere between 10 and 37% of that belongs to your greedy uncle.

Mike Zaino:
And what that ultimately means for you is that your nest egg is not as big as you think, and Uncle Sam is going to make it even smaller. So keep in mind, the more money that you have at risk inside of the market, the stock market, right as you age, the more you stand to lose when it comes to your future retirement income. And there is a thing called the rule of 100. It's another one of those loose guidelines that says, hey, you know what, Whatever your age is, that's how safe you should be. So if I'm 20 years old, I should be 80% in the market. I would argue with that and say, if you're 20 years old, you should be 100% in the market. Right. Because you have time for that to come back. But when you're 80 years old, you should not be 80% in the market by any stretch. You should be at least 80% safe, more so if you can't afford to lose because that loss will impact the retirement income strategy that you've set for yourself. And if you don't have an income strategy set for yourself, I happen to know somebody that can walk you through that process.

Producer:
Hey, I do as well. And his name is Mike Zaino, and you can reach him at (704) 560-1573 or go online to money matters with My.com. Well, Mike, you talked about loss there. So that sort of tees this up, preparing for the loss of a spouse. And boy, you know, it's not a subject that people like to talk about, but it's one that that we all need to talk about. And we need to not only not only think about it, not only talk about it, but act on it. Right? Being prepared for that, because it's going to be a time where, you know, things are not good for you emotionally. You're not going to be thinking clearly. I just I can't imagine that. And, you know, it's you're going to want to have money, not be one of those things that's going to be added on top of all of the other stuff you're going to be be focused on.

Mike Zaino:
Right. So so whatever you're doing right now, if you would just stop for a second. All right. This this is going to hit home and I need it to I need you to understand, it is important to understand that the large majority of married couples are going to go through this at some point in their lives. And it is not common for couples to pass away at the same time. And so there are many, many challenges that the surviving spouses face. You know, number one, grieving the loss of their spouse. Nobody is going to want to do that, especially if you've been married 50 plus years or heck, even if you've been married one year, you love somebody enough to marry them. It's going to hurt when they're no longer there. But from a financial standpoint, the surviving spouse is going to immediately lose somewhere between 33% and up to half. Really, if your Social Security incomes are similar of all of the Social Security income because the smaller of the two benefits goes away. All right. It passes away with that spouse. And as soon as the Social Security Administration and the banks receive the death certificate, those additional deposits that you were receiving are going to cease the year after the spouse passes away, The surviving spouse is going to face a higher income tax bracket because they now have to file as a single filer and they will need to also pay taxes for their spouse the year of their death. All right.

Mike Zaino:
On top of that, they're going to lose a tax deduction because they are no longer married and their Social Security is going to be taxed at a higher rate. Their Medicare surcharges will also go up because. Cause of the fact that they are in a potentially higher tax bracket and they have to face all of these new financial challenges right after losing their partner in life. So whether you're a widow or a widower, all of those folks who meet with us, they will never have to face these challenges alone because our clients know that we are there for them during both the good times as well as the bad. So if you or anyone you know has recently lost their spouse and is experiencing the burden of all of those things that we just talked about and we wrap them up and call it the widow's tax, please have them give us a call or share our information, whether it's at Money Matters with Mic.com, whether it's our Facebook page on Facebook, at Money Matters with Mike, or whether it's my personal telephone number. 704 5601573. This is really, really important stuff. And that's why I asked you to stop what you were doing and pay attention, because at some point in life, you're most likely going to encounter a situation that you're not prepared for. And having the prior, you know, plan put in place before it happens can be the difference in being able to make it through those tough times.

Producer:
Right. And, you know, they say that the only two things in life that are guaranteed are death and taxes. And this really involves both of them. Right. Because we just ran through that list. And a lot of those have to do with tax consequences of losing a spouse. And obviously, you know, the much more devastating thing is losing the spouse. And I can't even, as I say, imagine that. But it is, you know, going to be something that you'll have to contend with. So have that plan in place beforehand. You know, we call this the widow's tax. We talked about, you know, we have this free report that we can send people on the widow's tax to, you know, really help them sift through all of these issues and educate them on on these issues. But how do people really go about preparing for this, Mike? Because it's it's it seems so you know, you run down that list, you talk about it, it seems so daunting. No wonder. Obviously, just even apart from the emotional part of it, no wonder people don't like to talk about this. No.

Mike Zaino:
It's something that, like I say, they put in that proverbial kitchen drawer and then just shut it, right. And then life gets in the way. They know they need to do it, but it's not something that they're going to enjoy doing. But I'm here again just to kind of wake you up. If you are the provider in your family, the breadwinner, and you don't have a solid retirement income plan for the family, then I strongly encourage you to get in contact with me as well so that we can help you build a plan that's going to keep your spouse as well as your family safe after you are gone. And it is so important to be working with a financial professional before you pass away and ideally before your health ever begins declining. You want to take advantage of the fact, you know, while you still can, the more time you have to work with, the more options you're going to have and the better off you're going to be. So, you know, our plan is just to make sure that we have people planning well in advance. And there are several things that we can do. You know, we can create a smart vision for the retirement without your spouse, and we can do that in advance. How do you plan to spend time with your family and with your friends? How do you plan to fund your retirement when you're having less income coming into the household? We can help you create a solid retirement income plan where you're going to understand all of your expenses in retirement and then establish income sources that you can count on and never outlive. And a great way to do that is to replace the bonds that you may have sitting in your portfolio with those fixed indexed annuities, mainly because Bond as as as witnessed last year can lose value.

Mike Zaino:
You still have fees associated with bonds, whereas with indexed annuities you can only go up, you can never go down. And that's contractually guaranteed. We can also help you measure whether or not you have a retirement income gap, which is bad. That's not good news or whether you have a retirement surplus, which is very good before you retire because nobody wants to retire, only to figure out eight months into retirement that they didn't have enough money. And so this involves calculating all of your expected expenses as well as your income in retirement and then balancing your budget if you are still in your late 40s, early 50s, we can help you build a plan to receive a tax free death benefit when your spouse passes away, and that will help. Ease that income pressure. And then we can also and this applies to everyone, help you learn how to completely remove the IRS from your retirement account by implementing a Roth ladder conversion as soon as possible. We can immediately review and reset your financial plan upon the death of your spouse. And obviously we're always going to suggest that you consult with a certified public accountant or tax professional each and every single year to verify that you're on track dealing with the emotional burden of losing a spouse. It takes time and it takes support from family members as well as from professional counselors. But you can take steps well in advance to ensure that the financial challenges do not add to the stress you're going to experience at that time in your life.

Producer:
And you can schedule a complimentary financial consultation with Mike Zaino for not only yourself, but your spouse and your family today. Go to Money Matters with Mic.com. That's all one word. Money matters with Mic.com or call 704 5601573. Now, Mike, when we talk about these sort of end of end of life decisions and all of those things and advance planning, we also wanted to mention a living will doesn't necessarily have have to do directly with your finances, but it's a very, very important thing to have to to make your yourself, your own wishes for medical things known at the end of your life. And same for your spouse, same for all of your loved ones. Really. It's a it's a very important tool.

Mike Zaino:
It is a very important tool. And I'm about to share a personal journey with you. Okay. And to just to emphasize how important these tools are. I was in Miami and business way back in 2007, and I woke up in the middle of the night to to go to the bathroom. And because I was in a hotel and an unfamiliar place, I was I turned on a light and I went to the bathroom and I happened to look down. And I was completely horrified by the color of my urine. Okay. It was dark brown, like Coca Cola. And that scared me. And so I went back to the emergency room at 330 in the morning. There happened to be one right across the street. And they said, Hey, you got a kidney infection, You know, follow up with your primary care. Well, I did. And then my primary care says you need to follow up with a urologist. And I did. And then the urologist says, hey, you need to follow up with a nephrologist. I'm like, What the heck is a nephrologist? I've never even heard of this. I was in my mid 30s and that's a kidney doctor. And so it turned out I had a very slow progressing form of kidney disease and they told me that I would eventually need a kidney transplant implant. Well, fast forward 13 years to to the year 2020. And, you know, my kidney function started to decline fairly rapidly. And after consultation with all of my team of doctors, they decided that it was time for transplantation. And so my wife and I, you know, we started really trying to look at our our personal situation, our living circumstances, our financial circumstances. And, you know, we had no idea who was going to be a match. And I actually had 17 people that that were willing to give me a kidney, which absolutely blew me away.

Mike Zaino:
You want to talk about being humbled. And my wife was obviously the first one to step up to the plate and they never had to test anybody else. So after, you know, at that point in time, we'd we'd been together for 29 years. It turns out that I made a pretty wise decision in choosing her because she was a perfect match and she donated her kidney to me on December 17th. Once we found out that she was a match, though, we made appointments and we got our ducks in a row. We put together our living will, which is also called an advanced health care directive. And what that is, is a legal document that allows individuals to specify their medical treatment preferences if they become unable to communicate. It also outlines their preferences regarding life sustaining treatment, pain management and organ donation. And it serves as a legally binding guide for those health care professionals, as well as family members to make decisions that align with the person's wishes. Okay. And legal requirements for a living will will vary. So consulting with an attorney, which we did or following local guidelines, is strongly advised for creating a valid and enforceable document. And so by doing such, you know, there was no guarantee that either one of us was going to come off of those operating tables. And we the other person had an absolute plan in case one or, God forbid, the both of us weren't able to come out of the kidney transplant. So if you have questions about setting up a living will, I would be more than happy to discuss this with you and assist you by providing resources during your complimentary consultation with me.

Producer:
Yeah. And you know, you speak from experience obviously with that and grateful that everything is doing much, much better for you now health wise, especially thanks to, of course, all the doctors, but your lovely wife as well. And you can go folks to MoneyMattersWithMike.com if you want to learn more about that that living will situation Mike will of course share you know from his personal experience but also you know help you with resources, connect you maybe with someone who could provide you with some legal advice on that as well. So that's all a possibility. Go to MoneyMattersWithMike.com to reach out to Mike or just hey give him a call 704 5601573. And Mike you know as we talk about planning for the future, a couple of questions here that people need to ask themselves when they're talking specifically about Social Security really in retirement and, you know, some decisions that need to be made.

Mike Zaino:
Yeah, they need to be made before retirement. Right.

Producer:
That's the important that's the important thing. Advanced planning is really, really kind of the the theme of the show here today. Make sure you have this plan in advance. And the first question that people should ask themselves is, when should I and my spouse take Social Security? A lot of things in there to consider. Yeah.

Mike Zaino:
That is one of the the most common questions that I get in our consultations after I have looked at all the assets, all the liabilities, the different accounts they have. And we've planned for what they want to do in retirement and how they're going to fund it. So they look at me and they're like, Hey, based on what you see, when should we take Social Security? And so that is obviously a answer that is dependent upon each individual's situation. There is no one size fits all. We've said that multiple times, right? So that's why it's important that I know what you have going on in your life. But, you know, generally speaking, the breadwinner should delay. So if you are in a in a dual income household and we fast forward to where you're in a dual Social Security household, the whoever's is going to be more at age 62, that person should delay and then whoever's is going to be less at age 62, that person should jump on theirs as soon as they're eligible. But lots of factors go into recommending even that generalization. Okay. How is your health or is it in decline? Are you, you know, sturdy as a horse and all your people live into their 90s. I mean, there are so many different things that come into making that decision because we're not guaranteed tomorrow. But with all of the medical data and our knowledge of our family history, we can make educated decisions instead of just winging it.

Producer:
And then the other question here is when one spouse passes away, how is that surviving spouse going to fill the income gap that's left by that? As you said earlier, you know, at least a third up to just about a half of the Social Security payments going away, That's that's a big hole in your income.

Mike Zaino:
So the first thing that I'm going to urge people not to do is be dependent upon their spouse's retirement account, like their 401. K or their IRA. Hopefully you guys have some life insurance in place. Why? Well, life insurance, the death benefit from life insurance itself is traditionally and typically tax free, which means no income tax is paid as long as the premiums weren't paid by an employer. So, I mean, we're going to look at all of the different ways are we going to have to tap their retirement accounts or have you done some planning and put in a life insurance policy that will help mitigate the immediate loss of income by virtue of a larger lump sum death benefit? That guess what we can put into an annuity or an income annuity that guarantees you additional payments for the rest of your life. So it's almost as if the income from Social Security never skipped a beat. And in many instances, the income that we can derive from a lump sum life insurance payout is actually going to be more than Social Security. So it all has to do with planning in advance, which is the key topic of our show today.

Producer:
Yeah, that's right. And you know, I mean, a lot of people, retirees, pre-retirees are really concerned about potential rates of return and overly concerned about that. And it's easy to become, you know, enthralled really with kind of treating treating your money like you're going to Vegas. You know, it's like but it's it's Vegas on Wall Street, really. It's the Wall Street casino, right? I mean, what's more important, though, is having the right plan for you and having that right balance, the balance between risk and safety.

Mike Zaino:
It is. And so for those of you who are even considering or this is resonating with any, please go to the website that's MoneyMattersWithMike.com schedule your free consultation where we can help you become not only more tax efficient but fee efficient as well as market efficient with your hard earned retirement savings.

Producer:
And you can go to MoneyMattersWithMike.com or reach out at (704) 560-1573 and give the listeners Mike just a little bit more of a of a background on exactly what that the initial call is going to be like. And then also the follow up when you give that that free full retirement consultation, right?

Mike Zaino:
So our initial call is just a discovery call. It'll last maybe 15 to 30 minutes and it's just me getting to know a little bit about you and telling you a little bit about me. I'm learning your goals. I'm learning your your financial objectives. When you want to retire, all these types, I'm basically collecting some data. Then I'm going to give you some homework and I'm going to ask you to put some stuff together and bring it to me during the consultation. Now, whether that consultation is one on one in person or it's one on one virtually using Zoom, it is at no cost and there is no obligation. In other words, you're only going to work with me if it's best for you, but I'm going to take a deep dive into all of your accounts and your finances, and I'm going to try to identify perhaps any unnecessary costs that you may be paying without your knowledge. All right. I'll try to discover how much you're paying in fees, whether those are in your IRAs, your 401. K's, your thrift savings plan or any other type of retirement savings account. If you're coming close to Social Security and trying to figure out when you should draw it or start claiming it, then we can go into Social Security maximization planning. We can go into Medicare planning. If you're of Medicare age, you know, bottom line is we're going to compare your current situation to what's possible if you work with us. Because remember, it is your money. And if it matters to you, it matters to me.

Producer:
And if that sounds good to you folks, if that sounds like something you want to explore, go online once again to money matters with mic.com to reach out or give them a call at 7045601. 573. Well, Mike, just about ten minutes left here in the show. And so we want to get to these five things before we are out of time here. And they are some pretty important things. Five Keys to a Debt Free Retirement. Number one on this list is something that is essential. It's where it starts. And first things first is what our list says. This is from a Yahoo! Finance article, by the way. We got this list and it's first things first. Start with financial planning.

Mike Zaino:
Yeah. So like many things in life, a little planning can go a long way when it comes to retirement. You're definitely going to want to excuse me, want to avoid building new debt. Once you have retired, it is crucial that you have a good understanding of what your essential expenses are, as well as the sources, all the different ones. Hopefully you have multiple sources of guaranteed income that you can tap for your day to day cost of living. So you want to meet with us to talk about annuities, maybe even stacking annuity income on top of things like your pension or your Social Security payments. You know, that's a great a great strategy is to actually stack them or stagger them so that you have them starting each and every single year for a period of years. And many retirees enjoy the peace of mind that comes along with being able to plan their golden years with predictable sources of income that they cannot outlive.

Producer:
Yeah, absolutely. Very important. So share a couple of tips. You know, we got rising interest rates here and a lot of people look at that and say, well, that means I'm going to be paying more for the things that I buy, which is very true if you if you have to, you know, use credit of any kind or, you know, take out a loan, that kind of thing, to to buy something, a house, a car, It's certainly credit card debt is subject to this as well, subject to rising interest rates. But when it comes to that, it's not all bad news. And there are some things that you can take advantage of, right?

Mike Zaino:
Yeah, you can absolutely take advantage of the rising interest rate environment. First off, remember that loans can eat into your budget and make it harder to enjoy retirement. So you want to avoid costly car payments, avoid personal loans. Please avoid credit card debt. But secondly, you know, the recent rise in interest rates has made guaranteed income investments like fixed indexed annuities, for an example, much more lucrative for both current as well as future retirees. So you can go to our website and schedule your consultation or call me at (704) 560-1573 so that we can get started on pulling together some options for you that may be right for your current situation and lifestyle.

Producer:
And that website as well is Money Matters with Mike all one word MoneyMattersWithMike.com. Number two on the list of five things to our to give yourself a debt free retirement five keys to that consider downsizing This is a big one too because if you've got that you know this huge house it might have been great when the kids were growing up and everything and the knees were better and you could go up and down those stairs, right?

Mike Zaino:
No doubt. I mean, if your kids are now out of the family picture, as far as living at home, it might actually be a great time to sell your house and maybe move a little bit farther out into the country where you can enjoy your retirement a little bit better. A lot of our clients enjoy living at the lake or they enjoy living near the beach or up in the mountains where the children and grandchildren can't wait to actually plan their next visit. And so depending on what you can receive for the sale of your home, you might actually have some extra cash for paying down debt or making smart re investments for your retirement future.

Producer:
Yeah, it's a, you know, a potential win win win in that way. You know you get the smaller house is less to take care of it helps you in you know a financial way with a smaller house payment or maybe even potentially eliminating the house payment depending on what how much you owed on the previous residence. And then you could possibly, if you've got some leftover, make some good, smart re investments, like you said, it's, you know, potentially a three fold positive there that.

Mike Zaino:
That doesn't that doesn't suck as as I know a good buddy of mine says.

Producer:
I was going to say as as the kids say it doesn't suck. Number three is plan for future health care expenses. It's just, you know, a good thing to think about because you have to make sure that you know what's covered and what is not covered when. Comes to Medicare, what's covered and not covered when it comes to whatever what other, you know, insurance coverage you might have or other plans that you might have in place. That's, you know, an essential kind of a thing to look at.

Mike Zaino:
It is. And a lot of people may just immediately dismiss this and and say like, you know what, I'm healthy. You know, you may have the the body of an Olympic athlete and you may have the genes that that say that, you know, in the past, nobody has ever had to experience major health care events. But, you know, the cost of health care is on the rise. And it is very important to take time to plan for future medical expenses during retirement, because I don't care how good a shape you are Now, as we age, our body tends to degrade. I remember because I used to be in the military and I played. I was an athlete and I was in great shape and I can honestly remember the day, the first time I ever felt my belly jiggle. It was a a monumental experience in my life. And why do I say that? Well, it happened when I was 36 years old. I didn't have the body that I had in my 20s. Well, if you're in your 60s, you don't have the body that you had in your 30s and 40s. Most of you don't. So having a smart health plan that addresses things from annual appointments to specialty services as well as long term care can help you prevent or excuse me, can help prevent you rather from incurring incurring those huge costs or possibly going into debt. When you find that your retirement savings is not enough to cover those health care expenses.

Producer:
Not a good place to be having to go into debt to pay for your health care in in retirement any time, but especially in retirement. Number four, make a plan to be debt free. You've got to you got to plan for that if you want to make it happen. As we've been saying all show long. This is where the rubber meets the road. You've got to have that plan in place.

Mike Zaino:
It is. And you want to start paying yourself more. Okay. During your highest earning income years, which are traditionally right before you retire. So while you have all of that extra income, instead of raising your your your lifestyle, that's called lifestyle creep. Start attacking your credit card debt and other high interest debt. Then maintain that momentum by paying down the next highest interest rate debt. The happiest, the absolute, happiest retirees that we work with. Guess what? They don't have a mortgage. They don't have car payments. Okay. And if you do have a mortgage payment during retirement, that is likely going to consume one of your household Social Security payments. So pay yourself first by paying down those debts and you are unlikely to regret that smart investment in your future income potential, your future self will. Thank you.

Producer:
And that's always a good feeling when your future self can say thank you to current self Here. Number five the last one in these five keys to a debt free retirement. Consider side hustles and as you just said, Mike Smart investments.

Mike Zaino:
Yeah so you know retiring for some people means doing nothing like I'm done. I don't want to ever lift a finger in my life. And even the people that I've heard say that what I have found through my decades plus of doing this is that after the first couple of months, people kind of get bored and there's only so many things they can do around the house. The honey do list can only get so long. Right, guys? But I would say don't just retire. You might want to relaunch. And so many happy retirees keep themselves busy while generating extra income in the process. If you're a good and you're handy with your hands, you like working with wood for an example. You know, sell some stuff on on on Etsy or eBay or Facebook marketplace. If if you're a good seamstress, you may want to have your services advertised and make a little bit of extra money. So whether it's turning your hobby into a side job or meeting with your financial professional in order to discuss smart risk investments, you can make the most of your retirement by trading your extra time or money for future gains.

Producer:
And that is definitely good advice there for our listeners to consider in their retirement. Mike And that's going to just about do it here for the show. It has flown by once again with a lot of great info and a lot of great help and I appreciate you bringing that expertise and bringing everything to our listeners like you do each and every week. I know that the listeners do as well.

Mike Zaino:
Well, I hope they do. Matt, I appreciate you and everything you bring from a setup perspective and all the production value you bring and and not to discount you, but I do appreciate our listeners more, okay? Because without our listeners we don't have a show, if any. Thing today has kind of resonated with you or you think somebody else might benefit? Please, please, please share the show. They can go to MoneyMattersWithMike.com. They can go to Facebook and search Money matters with Mike. They can go to YouTube and search Money matters with Mike. They can call me at my personal number. 704 5601573. I promise you, if I'm able to answer, I will. If I don't leave me a voicemail message, I'll call you back. You can always text me at that number as well. My goal is to help you succeed in retirement. So this weekend, whatever you're doing, I hope you do it to its fullest extent. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters With Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation visit MoneyMattersWithMike.com or pick up the phone and call 704 560 1573.

Producer:
Not affiliated with the United States government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis, with no guarantees of completeness, accuracy, usefulness, timeliness or the results obtained from the use of this information.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract guarantees are backed by the financial strength and claims paying ability of the issuer.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including automated subtitles, enterprise-grade admin tools, powerful integrations and APIs, automatic transcription software, and easily transcribe your Zoom meetings. Try Sonix for free today.