Protect Your Retirement from Stock Market Volatility

4.28.23: Audio automatically transcribed by Sonix

4.28.23: 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 time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone each and every single week that you can chew on. And today, we are absolutely bringing it again. On today's show, we're going to talk about growing your retirement savings in volatile times. And we'll include some strategies on how to make the most of your hard earned money. And as always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, brother?

Producer:
I'm doing well, Mike. I'm doing well. I hope you are, too. I know you just had some some travel woes that you had to deal with.

Mike Zaino:
Yeah, absolutely. I, I was out in Portland, Oregon, and on the way back we had to connect through Chicago. Well, Chicago was having some weather, so we we had the the privilege of circling Chicago for two hours and then being delayed four times once we landed on the ground. So didn't get into a little after 3 a.m. this morning. So I'm operating off of just a tad over four hours of sleep, hence the the bloodshot eyes and the bags.

Producer:
Well, you know what? We we love it because you're here with us, as always, and you're powering through. That's it. Yeah.

Mike Zaino:
The show must go on.

Producer:
That's right. That's right. It's curtain up for us no matter what. So there we go. And we've got a great show. I feel like today, Mike, as we always do, we always like to bring our A-game here. But, you know, we are really bringing it today because a lot of talk we've got going on about the banking sector and, you know, updating how that's really been affecting the markets and, you know, also people's retirement as a result. And then 100% reserve requirement accounts and vehicles there. That is something that I think in light of these bank failures that we've recently had, it's really something that hits home for people. So that's that's another thing we're going to look at. We're also going to talk about beating the bank CDs. We'll explain what the lost decade is. I think it sort of sounds like it's like a novel or a movie title or something, you know, like a mystery or something to do with dinosaurs.

Mike Zaino:
Retirees wish it was just a fictional piece for sure.

Producer:
Not a work of fiction. It is. It is real life we're talking about. So we will talk about that coming up as well. And wanted to remind everyone that you can always go online to the website. MoneyMattersWithMike.com. To learn more about the show, learn more about Mike, get in touch with him for a free consultation as well. That's MoneyMattersWithMike.com or give him a call at 7045601573704560 1573. He's got his phone right there on him. He will pick it up if it rings except for like during the show. That's pretty much the only time that that doesn't happen. But he'll call you back if you leave him a message. So don't hesitate to reach out at all. And we've also got Mike, speaking of the banking crisis, a great resource for folks that were offering absolutely free of any charge, any obligation. It's a free report on the banking crisis. What you need to know, how you can protect your hard earned money and that's yours if you get in touch with Mike. Once again, the website MoneyMattersWithMike.com and a lot of great information there and some stuff that you probably don't know. So we'll send that to you absolutely free. All right. So let's get into kind of the meat of the show before we get to the the Meat on the Bone segment. We'll start it off with our Quote of the week.

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

Producer:
And those words of wisdom come this time around. Mike from Warren Buffett, who is a popular guy around here because he knows a thing or two about money and investing in particular. Warren Buffett said this, quote, Risk comes from not knowing what you are doing. Oh, boy.

Mike Zaino:
Yes. You know, and when he says that, that kind of resonates with me. Why? Well, we we feature Warren Buffett a lot on the show because he his net worth as of this past March 20th, 23 was $104 billion. Right. So any of you out there who don't have $104 billion, you might want to take heed and listen to what this man says, but he's talking about not knowing what you're doing and protecting your retirement money during volatile markets and global uncertainty can be an extremely challenging task, especially if you don't know what you are doing. But there are several strategies that you can use to minimize those risks and be able to secure your investments. And we're going to go over some of those today.

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

Mike Zaino:
So I think, you know, first and foremost, diversification, right? That is the most important strategy for reducing the risk of your investments. And so when you diversify your portfolio, that just simply means that you invest in a variety of assets and different asset classes. This way, if one asset class is performing poorly, the others may be doing well, which can help reduce the overall risk to your portfolio. And then you always have to maintain that long term perspective, right? During periods of market volatility and uncertainty, it's really, really tempting for folks to want to sell their investments and kind of move to cash. But this can be a mistake if you're investing for the long term. Instead, it is important to maintain that long term perspective and stay invested in a diversified portfolio that aligns with your investment goals as well as risk tolerance. Okay, Keep an eye on fees, fees and expenses that are associated with your retirement accounts can eat into all of those returns over time. And therefore, it is extremely important to watch out for those that you are paying and try to minimize them as much as possible. For an example, you might consider avoiding actively managed funds that have high expense ratios. Coupled with those management fees, you could consider dollar cost averaging, which is a strategy where you're investing a fixed amount of money at regular intervals regardless of what the money is doing. Okay. And this can help reduce the overall impact of the volatility on your portfolio by causing you to purchase more shares when prices are low and then fewer shares when prices are high. Right? So think of it like recruiting more soldiers for your army so that they're able to charge up that hill a lot faster once things rebound.

Mike Zaino:
Okay. We talk a lot about having an emergency fund. I cannot stress this one enough, especially in times of extreme market volatility. Guess what happens? Companies tend to cut back. They tend to let people go. So it is extremely important that you have an emergency fund that is able to cover unexpected expenses. Now I'm talking about outside of your retirement portfolio. That way, if you do lose your job or you do have any kind of medical emergency, having that fund is going to help you avoid having to sell off those retirement investments during the market downturn. All right. And it is always important to rebalance your portfolio periodically. All right. And what that means is you're going to sell some assets and buy others just to try to maintain your desired asset allocation. So when you're in your 20s, you're going to have a much riskier asset allocation than somebody who is in their 60s, 70s or 80s and beyond. And that'll just help you reduce that risk of your portfolio by ensuring that your investments are aligned with your goals and your risk tolerance. Okay, Consider using stop loss orders. Stop loss order is an order placed that's with a broker that sells a security if it drops below a certain price or to a certain price. And what that can do is help limit your losses during the market downturns by automatically selling the security if it drops below your determined certain level. Okay. And we already talked about the importance of rebalancing. That kind of goes hand in hand with doing the stop loss orders.

Mike Zaino:
You just want to make sure that you're protecting your downside. Alternative investments should be considered as well, whether you're investing in real estate or private equity or hedge funds because they can provide diversification benefits as well as potentially higher returns than a traditional investment can during those volatile times and markets. But those markets excuse me, those investments are generally going to be a little less liquid and they're going to be more complex than traditional investments will. And they can also carry higher fees and risks. So again, it is extremely important to consider the risks and the benefits of those alternative investments and consult with a financial professional before considering to invest in them. Now, stay informed, but don't react to every news headline. Okay. Staying informed about the economy and the markets can be helpful, but it is extremely important not to just react to the headline. Instead, focus on your long term investment plan. Make changes only when there is a significant change in your financial circumstance or your goals. Okay, so protecting your retirement money during volatile markets and global uncertainty. It requires a combination of strategies to help minimize those risks of your retirement investments and ensure that your portfolio stays aligned with your long term investment goals. And if you are uncertain about how to protect your retirement money during these volatile times during the global uncertainty, consider seeking advice from a professional. Because a financial professional can help you develop a comprehensive plan and provide guidance on how to manage those investments during those market downturns. And Matt, as I've stated before, I happen to know a pretty good one.

Producer:
I know a guy too. His name is Mike Zaino, and you can reach him at MoneyMattersWithMike.com that's MoneyMattersWithMike.com and you can also give him a call 704 560 1573 (704) 560-1573. A lot of great advice there, Mike about you know really being able to to protect your money, protect the growth in that money as well. And a lot of people concerned about that right now, especially. And that's really because what people thought were this you know, some of the safest places to keep their money have have failed A couple of banks, of course, failing just last month. And so talk about an update on this and give us, you know, kind of where we stand right now.

Mike Zaino:
Well, I mean, depositors fled to this perceived safety of the titans, right? Um, following a pair of bank failures last month and a raft of earnings this week will show just how costly the run was for everybody else. Small and mid sized US banks, They lost hundreds of billions of dollars in recent weeks due to their bigger peers and to the money market funds that were offering higher yields. And what that's likely to do is force many of those to increase their interest rates that they are paying to avoid losing more customers. And just, you know, last week alone, some of the biggest US banks, JP Morgan Chase, Wells Fargo, Citigroup, they announced they'd raked in billions of dollars in deposits from those customers who were fleeing the small lenders following the collapse of SVB and the Fed. Keep in mind now the Fed has raised interest rates at the fastest rate since the 1980s to try to curb inflation. And what that did is it drove some customers with big account balances to ditch banks altogether in search of better yields. Okay. And that shift picked up again after signature failed. Okay. And Silicon Valley Bank failed. So you just you got to keep all of that in mind that when your money is in a bank, it's not always as safe as people think it is.

Producer:
Yeah. I mean, you know, people will think, okay, well, it's got FDIC backing, it's got FDIC insurance, you know, so so up to $250,000, I am protected. There were a lot when you look, though, at Silicon Valley Bank, for example, there were a lot of uninsured funds on the books because a lot of these companies, these start ups, especially that that had their money at SVB. Right. They had accounts well over a $250,000. And so, so much of that money was not protected. And then it just caused havoc when there was a run on the bank. Every you know, the bank just wasn't able to meet its obligations when all these depositors came looking for their money, came knocking on the door.

Mike Zaino:
Yeah, we've talked about this before. You know, it's a situation where fractional lending comes into play. 90% of Signature Valley's money that they had was then lent out. Okay. And which means that when they're only required to keep a 10% reserve and that's how banks make their money, people you deposit all of your money in there and they just turn around and lend it out. And then they're charging interest on those loans so that they're able to make a lot of money in the long run. Well, the risk with that is because there is only a 10% reserve requirement when folks want to withdraw money, if they don't have it in their vaults, they can't give it to you, which is going to cause panic. I had a buddy of mine a couple of weeks ago that tried to get 25 grand. He was I forget what he was doing, buying a car, putting a down payment on a house. I can't remember like an investment property. But he wanted $25,000 and walked into the bank and they couldn't give it to him. They told him he had to come back in a couple of days and he got so aggravated. And guess what he's doing? Pulling all of his. Money out of that bank. Okay. And if that is the case, and that happens over and over and over. All right. That's what causes the runs on banks and causes. Ultimately those banks to fail. And so, you know, that is why when you have an option for your money, your hard earned money to put it into a vehicle that has a 100% reserve requirement, that is definitely something to consider. If you are more conservative in nature and you want to have access to your funds and don't want to run the risk that your bank doesn't have those funds on hand when you walk in and demand them.

Producer:
Yeah, it's about safety. It's about security, it's about peace of mind. And if you are like minded in those those areas and that's what you want, you want that safety, security, the peace of mind. There are 100% reserve requirement vehicles out there for your money. So talk about, you know, I mentioned security. Let's go down this list here of kind of, you know, the reasons why people are keeping their money protected by that 100% reserve requirement. And the first one on our list here is the increased security.

Mike Zaino:
Yeah, right. So folks don't understand that when we say a 100% reserve requirement, what that actually means, that means that whatever you put in there, they actually have to have on hand in cash in case you need your money. So that requires all that, you know, all of the deposits are liquid. And so that provides the highest level of security for your money. Yeah.

Producer:
And so, I mean, that really is the you talking about 100%. The level of security doesn't get any higher than 100%. So so there you go.

Mike Zaino:
It actually does because depending on the states, states are requiring between 5 and 10% surplus as on top of the 100% just to make sure. So it actually does get a little better than 100%. And what that does, Matt, is it protects folks against bank failures because a lot of folks are concerned about the money that they deposit in their local bank accounts. Right now, we've been receiving so many questions about how exactly to keep that money protected from those bank runs and from those bank failures. So you must out there be careful, you know, about who you bank with and check out our previous episodes on the banks and on fractional lending, for sure.

Producer:
Yeah, you got to proceed with caution there. And just just make sure that your T's are crossed, your I's are dotted when it comes to who you are banking with. And that was mentioning a second ago, Mike, that 105 or 110% reserve requirement in some states that that adds extra peace of mind. It sort of actually reminds me of my one of my teachers in high school who used to give a bunch of extra credit and actually ended up making it. It was like a world history class or something. I think actually ended up averaging had like a 104 average in her class. So so there you go. It's like some of these states, they require the extra credit.

Mike Zaino:
Were you a nerd, Matt?

Producer:
Slightly. Can you tell?

Mike Zaino:
Yeah, I mean, I got A's, I got some B's. I got the occasional C, Yeah, yeah. But I don't think I ever averaged 104.

Producer:
That was the only time that had happened for me. But if it was going to happen, it was going to be in, you know, social studies or history or something like that, because it definitely not any math class at all.

Mike Zaino:
I got A's in math, that's for sure. It's a good thing, considering what I do.

Producer:
Exactly. Exactly. I have come a long way since then, but still not, you know, beyond long division. I don't know about it. All right. So number three on our list here is is really has to do kind of with the monetary system as a whole. And I'll let you kind of run down the number three element of our list here.

Mike Zaino:
Yeah, sure. I mean, when when folks participate in a vehicle that has a 100% reserve requirement for their investment, what you're actually doing is you're promoting a much more stable monetary system because you eliminate the possibility of those bank runs. You eliminate the possibility of those banks that fail. Okay. So, you know, think about how many banks have gone out of business just this year. Think about how many banks went out of business during the financial crisis in 2008. Right. They go out of business all the time. Guess what? 100% reserve requirement companies, they don't go out of business. So that is why that you can absolutely just take that off of the table, remove it as an equation or a variable, rather, from the equation.

Producer:
Yeah. And also, you know, people are really interested in these 100% reserve requirement investments. Because they have more control over what's being done with their money. Right.

Mike Zaino:
They. Absolutely. Because, you know, when your money is being invested in the US Treasury bonds or it's tied to an underlying stock market index, guess what your money is not doing? It's not actually in the stock market, right? So when we compare that to a bank that lends out deposits in the forms of loans without the input from the customer, you know, that is why you have more control, because you're able to choose the index or choose the fixed bucket if you want to earn a fixed rate of return. So depending upon what your goals, what your objectives are, those fixed indexed annuities that we've spoken about numerous times on the show for the for the conservative portion of your money, the income portion of your money, the bond portion of your portfolio. Right. That is a huge consideration because guess what? People used to run two bonds for safety. They used to run two bonds for income. Well, you still have to pay fees for bonds. You have prepayment risk. Right. Because when these runs on banks are happening and the banks don't have the capital to fund your request for your money, they have to sell off of their their bonds at a loss, which is not good for who? Them and it's definitely not good for you. So 100% reserve requirement investments are a key and critical component for those of you who are a little bit more conservative in nature, who want to protect your retirement dollars.

Producer:
And for those of you who don't want to end up like Mike's friend, go into the bank and being like, I need my 25,000 bucks. And they say, nope, sorry, not not going to not going to be that way with a 100% reserve requirement. Right.

Mike Zaino:
It's we're really just talking about peace of mind, right?

Producer:
Matt Yeah, exactly. That's what I was going to say. That's that's the bottom line of this.

Mike Zaino:
It is people value that stability and security as they get older. They are concerned about so many different factors going on in the world right now, from inflation to to rising taxes to the global supply chain concerns. Those smart retirees. They want to get to the guarantees so that they can enjoy their retirement without concern for what may be happening in whether it's in the market or in the financial system as a whole or in the global economy. Matt They just want that peace of mind and that, sir, is priceless. So absolutely. If any of you, any of our listeners have any questions, any concerns about the banks, we would love to provide you with that complimentary consultation where you can ask as many questions as you'd like and learn about the options for all of that money that you just have sitting in those banks.

Producer:
And you can do that. Set up that free consultation by going to MoneyMattersWithMike.com That's Money Matters with Mike. All one word.com or give a call to 7045601573. And as we have been talking about the bank situation that's going on right now in the country with those bank failures that we've mentioned and kind of gone in depth on here, I wanted to get a little bit more perspective on exactly where things stand now. So I just actually put together this piece on it. New for this week's show. Let's take a listen to this and we'll continue on. On the other side, is the banking crisis over? I'm Matt McClure with the Retirement.Radio Network. Powered by AmeriLife. Two of the largest bank failures in US history happened just this year when Silicon Valley and First Republic banks collapsed. It happened after the Federal Reserve raised interest rates several times in its effort to tamp down inflation. A secondary effect of those moves is it cuts the value of government bonds, which banks commonly hold. That means when those banks need to sell bonds to improve their financial picture, they do so at a loss. That's what happened with SVB, and it was not able to meet its obligations during a run on the bank. So what happens now? Glenn Hubbard is chair emeritus of the Columbia Business School and served as chair of the Council of Economic Advisors for President George W Bush.

Glenn Hubbard:
You're seeing deposits move from smaller and regional banks into money center banks. You're seeing a lot of questioning of the financial health of many regional banks.

Producer:
Hubbard recently told Bloomberg News. One big question is what will happen to deposit insurance? Currently, the FDIC ensures deposits up to $250,000.

Producer:
The current law wasn't right. The limit was too small to deal with the modern economy, and the Treasury or the Fed would try to move to increase it whenever we get into trouble. So that's not good.

Producer:
So he says changes are needed. But exactly what will happen remains to be seen. Whatever does come our way. Hubbard told Bloomberg. The regulators need to get back to the basics.

Producer:
Banks are very important in lending in some activities, so I think we need a more fundamental conversation about. What do we want banks to do and how are small and mid-sized businesses and real estate going to get credit?

Producer:
New research shows several other midsize or regional banks have hefty loads of uninsured deposits, so they are at risk of potential failure to. Jpmorgan Chase CEO Jamie Dimon recently said the banking crisis could push us closer to a recession. But the silver lining? He does not think it will be as bad as 2008. So how can you protect your hard earned money from a banking crisis? That's a key question to consider as uncertainty makes us all feel uneasy with the Retirement.Radio Network Powered by a mirror life. I'm Matt McClure.

Producer:
Need a higher rate of return from your safe money. Listen up. It's time to beat the bank CD rates.

Producer:
So we've been talking a lot, Mike, about safety of our money, of our listeners, money and of, you know, clients, money, that sort of thing today. And one of the things that a lot of people have done in the past is if they want to keep money safe, get a little bit of growth out of it, they would invest it in a bank CD, a certificate of deposit. Talk about that sort of situation right now and where we stand with bank CDs and if there are any other options available that might be more beneficial.

Mike Zaino:
Sure thing. So with inflation continuing to rise, coupled with the recent bank failures, my question to my audience is, do you really want to count on the banks for your money's safety? Right? You can consider placing a floor on a portion of your assets if you're concerned about the volatility so that you can count on that money being there when you need it. And don't forget about the rule of 100 where you subtract your age from the number 100 just to determine the approximate percentage of your assets that you should consider investing in the market. So the closer you are to retirement or if you're already in retirement, the more concerned you should be with protecting what you already have. So the bottom line is that instead of placing your money in a bank CD where you're not going to have access to it for however many months or years you choose, we suggest that you consider savings vehicles that have a 100% cash reserve, whether it's a multi year guaranteed annuity that's mega for short, whether it's a fixed indexed annuity that we've talked about a lot on the show, whether it's an indexed life insurance policy, the IUL Okay, Will help you get educated on all of those different options that could help you reach your goals will help you determine the appropriate amount of risk that you should be taking with your retirement savings. And ultimately, we're going to let you make that final decision. Why? Well, because it's your money.

Producer:
It absolutely is 100%. And that's why, you know, you want that safety, that security. And one of the things, Mike, I just wanted to pause here for a second, because one of the things that when I started working in this business and started working with you here on the show, one of the things that was a mind blower for me was that life insurance can be a part of your retirement income plan. And a lot of people, I think they might hear that and think, wait, what? Because I thought life insurance was just, you know, I buy it. And after I'm gone, then that's the money that's there for those who I leave behind. Well, this is something where we're talking about it not being your grandfather's insurance policy, right?

Mike Zaino:
No, no. You you hit that nail again, Matt. On the head. It is definitely not your grandfather's. Heck, it might not even be your father's life insurance policy. Old life insurance just used to be death insurance. You didn't get to use it. It was meant to, you know, pass on to your beneficiaries. But new school life insurance can be set up. And those who have the knowledge and put it into practical application, what I see is somewhere around that 15 to 25%, depending on what their needs are of their entire portfolio going into these indexed universal life policies. Why, you might ask yourself, because that seems like a rather large percentage, right? Well, when you consider the fact that you can put money in there and thanks to IRS Code 7702, you can actually structure it to be able to take tax free income, guaranteed lifetime income, and that you can access in the later years on a tax free basis. And oh, by the way, if you happen to get sick and I'm talking about heart attack, cancer stroke, Alzheimer's disease, like a chronic critical or terminal or cognitive impairment, you can access the death benefit folks, not, not, not wait till you die. But while you're alive, you have access to the death benefit or at least a significant portion of it while you're alive to help take care of those things. And then when you do pass away, guess what happens? Whoever you've named as your beneficiaries get the remaining balance that is in there.

Mike Zaino:
Again, on a tax free basis. This is huge. One of my good friends, really, really good friends last March of 2022 was diagnosed with stage four colorectal cancer. Answer. And he had had his eye in place for about four years at that point in time. And they wrote him a multiple six figure lump sum cheque. He is now beaten cancer, if you can believe that, beaten a stage four diagnosis, which is awesome. Working out looks better. He's in great shape. And. And I just think of what that meant to his family, giving them the peace of mind that while he was unable to be behind the desk and and be the income producer for his family, he got a multiple six figure check just to take that, you know, stress the financial stress. Obviously, they were still worried about his health condition, but he is in remission. All of his all of his scans are clear. And it's it just goes to show you that having that as a piece of your puzzle, if he didn't have that in play, guess what? He would have had to probably gone on disability. Okay. But instead, he didn't have to do that and was able to supplement that income. And he still has that in place for down the road when he passes away.

Producer:
Wow. And that's a great, you know, illustration of just how beneficial that can be and and the many different ways. It's not just necessarily for retirement income. It's for the just in case in life as well. And I'm so glad that that, you know, he's doing much, much better now as well. And that was able to help him and his family that IUL policy. So definitely something to explore, folks, if you would like to explore it, you can sign up for a free consultation with Mike Zaino. Just go to MoneyMattersWithMike.com or you can call him at (704) 560-1573. All right, Mike. So we teed this up beginning of the of the show and said it sounded like a work of fiction. And you're like, well, I guess a lot of retirees wish that it was a work of fiction, but it's not. I'm talking about the lost decade. And so tell us exactly what we mean when we say the lost decade here. Mike, Where did where did it go?

Mike Zaino:
Where did it? Well, unfortunately, it happened. And we're talking about when we when we refer to the lost decade as the time period between January 1st of the year, 2000 and December 31st of the year 2009. Okay. During which the stock market experienced a significant downturn. And think about some statistics during that ten year period. The S&P 500, which is an index of the 500 biggest large cap stocks, it had a negative return during that ten year period of 9.1%. And the Nasdaq, which is the index of primarily technology related stocks, had a negative return of 44.2%, 44% over the course of those ten years. So that is why we call it the lost decade. And those of you who experienced those losses, you wish that it was lost. You wish it could be forgotten. And the problem when you really look at what happened then is that you would think that there was a period of high inflation. Well, guess what? Inflation, the annual rate during that lost decade was only 2.5%. Well, kind of look at what's going on now. Where is inflation? Well, it's been over 5% for two years now, literally over 5%. And a lot of folks are predicting a bubble that is going to pop. Well, what kind of effect did that have on the folks who wanted to retire during that decade? Okay. Particularly on those who invested heavily into the stock market and retired at the beginning of the decade. And the challenges that they face was the extreme drops in their portfolios.

Mike Zaino:
Okay. If they were invested with a heavy portion into the stock market, they saw the value of their portfolios plunge during that decade, and that decline in value had a significant impact on their retirement income and on their standard of living. It's not like they were bragging about how much money they lost at their office parties and holiday Christmas get togethers right there. How much money did you lose? Well, I lost 44%. Well, I only lost 9.1. You know, that's not what happened. Right. That's not something that we want to brag about. Um, what that also did is it gave them difficulty in generating income. Okay. If they were relying on systematically withdrawing from their investments to help support their retirement, well, guess what they had to do? They had to make significant adjustments to not only their spending, but their lifestyle during the lost decade, particularly, again, if they were heavily invested where in the stock market. And then because they had lost so much money, there was longevity risk that they now are seriously having to face. And. Because they weren't prepared for it. So retirees who lived longer than expected, well, guess what? They're going to face a greater risk. Of doing what? Running out of money, particularly, Matt, if they had no backup plan for a prolonged market downturn like we had from 2008 all the way through almost 2011 before it started turning around.

Producer:
Yeah, it took years for people to recover those losses in their portfolios over that amount of time. After that, the big market downturn there, the big the big crash of 2008 to build back up. I mean, it really did take years. And and, you know, I mean. The thing is, too, I like so many people. I think even today, knowing, looking, knowing everything that we've just said, that you've just run down here, knowing that there is market volatility right now that's been going on for a couple of years. There's this sort of complacency still on a certain level where people don't necessarily have a backup plan for what is going to happen if there's another one of these big crashes like did happen back in oh eight. Right.

Mike Zaino:
So people I think the first thing to recognize is that people are quick to forget. Right? We enjoyed after the Great Recession, we enjoyed the longest bull run in the history of the market and people kind of got rocked to sleep like little babies. They just got rocked to that lullaby of the ever increasing stock market. Well, then what happened? A global pandemic. And we saw the fastest decline in the history of all of our markets, 30% just boom like that. What we didn't know is what kind of recovery shape would end up presenting itself. Well, the Great Recession took almost ten years before it got back to even. Contrast that with 2008, the market was at all time highs five months later. So so I think people's inability, I should say, people's inability to read the writing on the wall and pay attention to the signs because they are all around us. If we're willing to just open our eyes, open our ears and just pay attention. Okay? We've got several significant things that are affecting your money on a daily basis. And at any point in time, I am not a caller for doomsday, right? I'm not just this this absolutely bearish type of of person, but I am making changes to my own portfolio, let's just put it that way.

Mike Zaino:
So so if if I think it's good enough for me and if I think it's good enough for my family member members, then then that should be something that you take heed of. Okay. We don't know when it's going to happen, but a lot of the global economic man words are hard today. Global economists, okay, they are predicting sometime in the next two quarters for the hammer to fall. Okay. When the hammer falls. I mentioned this on last week's show, The bullet flies. You don't want to be on the receiving end of the bullet when it comes to your financial stability, especially if you are in that retirement red zone, whether that's the five years immediately before retirement or the five years immediately in retirement, because that is when you are so exposed as far as volatility and loss and making sure that your money lasts no matter how long you live. Yeah.

Producer:
And so that just really emphasizes the importance of a plan, having a plan in place no matter what happens, no matter what volatility we experience, no matter the things that go on in the greater economy at large. So, you know, there's a good reason right there for people to call or go to the website and get that full retirement plan consultation. And when we say full, we mean full comprehensive. Also, we do mean free because it's free of any cost. Right. And any obligation. Mike I think that's that's something that a lot of people really need to explore.

Mike Zaino:
I mean, when you call me, the first call we're going to have is just going to be an introductory call. I'm going to get to know you, your situation, tell you a little bit about me and why I do what I do, because I think it's important that you understand my motivations. Okay? I don't care who gets your money, whether it's your church, your children or your Chihuahua. Right. What I want to do is make sure that you have the information so that you can make better decisions because informed decision making is going to yield better results. Okay. So I will help you analyze your current financial situation. I'll try to discover if you're paying way too much in fees, whether those are in your IRAs, your 401. K's or any other retirement savings accounts that you have. Okay. We'll try to cut out all of those unnecessary fees. If you have annuities that you may be purchased or inherited from a benefactor, we can look at what some of the options are versus what you have. Kind of do an x ray, if you will, and if you are somebody who needs some help with Social Security maximization planning. If you need help with Medicare, we can help you with all of that stuff. So we're going to compare your current situation to what's possible if you work with us. Because again, remember, it is your money. And if it is important to you, it's important to me.

Producer:
Absolutely. And that's the way that it should be. Because, you know, when you work with Mike Zaino, he's going to take your particular scenario into account and do what is best for you. Recommend all the things that that he thinks you should do based on your individual situation. Because we say this quite a bit, Mike, is it's not one size fits all at all because, you know, you might have some general recommendations. Everybody should have an emergency fund. That's one thing that sort of might fit into that one size fits all category. But everybody's emergency fund is going to be a different size because everybody's situations.

Mike Zaino:
Depending on their income and their bills.

Producer:
Exactly. Exactly. So so it's not really a one size fits all thing, but you really do take a look at people's assets, their investment portfolio, talk about a little bit more here, about what you do when you do. Take a look at people's current situation. Yeah.

Mike Zaino:
So I want to find out what your vision is for retirement, what your goals are, what you want to accomplish, who you want to be doing that with, so that we can determine a method of funding your plan. Okay? And then what we'll do is we'll look at if you have a plan, what you currently have. If you don't, we'll walk you through what our recommended plan is or compare your plan to what our recommended plan would be. And we'll just, bottom line, answer all the questions that you have about your retirement just to give you confidence. It's in the plan that you have because when you can walk through life and walk through retirement confidently knowing what to expect and not having to worry about what's going on locally, regionally, nationally or internationally in the news, that does give you that peace of mind. And as we said before, that in and of itself is priceless.

Producer:
Yeah, absolutely is. And so you can go folks to MoneyMattersWithMike.com. MoneyMattersWithMike.com is the website. You can schedule that free consultation right there on the contact page on the website or if you prefer to actually talk to Mike Zaino, who does answer his phone. 704 5601573704560 1573 is that number and you can get that free consultation schedule it today do not waste any time because the volatility that we're seeing out there doesn't show any signs of going anywhere and you need a plan to navigate it.

Mike Zaino:
Yeah. So, so the last thing you want to do right now is have that junk drawer mentality and stick it in the junk drawer, shut the drawer, and then find out in two, three, four months that I was actually right. And now you're having to react instead of respond and you've lost tens of thousands or hundreds of thousands of dollars, especially when you could have heeded my my word. Okay. And put some proper prior planning into effect. We want to prevent that pitifully poor performance.

Producer:
Absolutely do. That's 100% correct. So, folks, once again, MoneyMattersWithMike.com is the website. And one of the things I think, Mike, and we'll talk about this today because I think it's something that we spoke about longevity risk a few minutes ago. That is a very real thing because people are living longer. The question then becomes, okay, how healthy are you if you do live into your 90s or beyond? And really and truly one of the biggest expenses, almost regardless of what your longevity is, is going to be health care expense during retirement. And so the question then is, okay, are you prepared for that? Do you have a plan for your health expenses in your retirement?

Mike Zaino:
Right. And, you know, I'm not going to sit here and preach on the the the importance of carrying health insurance, for example, or or getting physicals. I am actually going to preach on getting physicals because, you know, it was it was the physical, the colonoscopy that that found my buddy stage four colorectal cancer. It was the physical that I had that found my kidney issues that eventually led to a kidney transplant. I have shared that before on the show. And so the the ability to actually go to the doctor and get screened for these things, if you're not doing that, then then I don't know why. I really don't. I'm not I'm going to challenge you to go and get screened, especially when you're talking about making financial decisions that will impact the rest of your life. So according to a study by Fidelity Investments, a 65 year old couple that retires in this decade is going to need an average of just over $300,000, Matt, to cover those health care expenses throughout retirement. And that includes those premiums for Medicare Part B and Part D, as well as out of pocket expenses for things like deductibles, for copays, for prescription drugs. If you, God forbid, ever need any type of in-home health care, assisted living care or nursing home care, those are pretty expensive, right? So households headed by people that are 65 and older, they spend an average of just over $7,000 a year on health care. And that's according to the Bureau of Labor Statistics. And that number, Matt, is expected to rise due to inflation and the pressure on the health care system from millions of soon to be retirees. The boomer generation, right?

Producer:
Yeah, absolutely. And and really, you know, you've got thousands and thousands and thousands of baby boomers, part of that generation retiring each and every day right now. And it really is just a flood of of people retiring. So there are a lot of people who are in that boat. And so, I mean, that $7,000, let's just say, for example, you know, you talked about that a minute ago, 65 year old are spending an average of over $7,000 a year on health care. And they say right now, you know, that breaks down to about 5000 on health insurance. That's like a Medicare supplement plan kind of things that we're discussing, about $1,000 in medical services. So that's other things like eye care, dental care, 700 bucks on drugs like prescriptions. But also those non-prescription drugs, vitamins, $300 in medical supplies as well. And this is just on average. I mean, there are people who are spending way more than that. I'm sure there are people who are spending quite a bit less than that depending on their health. But that's just kind of on average. And you see in the numbers, Mike, too, from the Labor Department how much that goes up as you get older. So those health care is not getting any cheaper to begin with and it's certainly not getting cheaper as you get older.

Mike Zaino:
No, it's not. I mean, when you're in your 20s and mid, mid 20s to mid 30s, it's less than half of that $7,000. But then once you get up over 65 and you're of Medicare age, it's doubling and it's not going to get any cheaper, especially with, like we just mentioned, the strain on the health care system by 10,000 people every single day turning 65. Couple that with supply chain being choked. Couple that with inflation rising. I mean, it's not going down. And so health care is one of the biggest expenses for retirees. And my question to the audience again, how do you plan to fund that? Okay. Well, you might consider funding those very important expenses by dedicating a small portion of your portfolio to the fixed indexed annuity that we've discussed numerous times why the fixed indexed annuity is protected. All right. It's got a 100% reserve requirement it can keep up with and possibly outpace inflation. And you can even choose for the annuity to track the performance of any of many multiple underlying indices that follows a collection of health care companies. So if anything, on the show that we've discussed today makes sense to you, please give us a call because we have thoroughly enjoyed meeting and helping our listeners feel more confident about their retirement and their future in general and overall, our goal is to take the stress out of retirement planning.

Producer:
It's like a it's like a massage for the soul. It just relieves the stress you've got, you know, that that peace of mind that comes along with that. That's the goal here on Money Matters with Mike and with Mike Zaino and and what he does every day as well. And the website again MoneyMattersWithMike.com you can call 704 5601573. That's (704) 560-1573. And I think this is a good place to get some more knowledge from someone other than the two of us here, Mike Although we you know, we bring a lot we bring a lot to the table. But someone who literally wrote the book on annuities is who we're going to hear from now, Ford Stokes. He wrote Annuity 360. It's learn all You Need to Know about annuities. That's the subtitle of the book. And it's a great read. It's an easy read, but it's chock full of a lot of information. And we'll actually hear a chapter right now on something that we've been talking about, the fixed indexed annuity. This is chapter 13 of the book Annuity 360. It's the annuity that's just right, the fixed indexed annuity. Let's take a listen to this. We'll tell you how you can get a free copy of the book on the other side.

Ford Stokes:
Chapter 13 The Annuity That is just right. The fixed indexed annuity. Big idea. A fixed indexed annuity gives you a portion of market like gains Without market risk. Your investment is tied to an index but not directly invested in it. How does it work? An FIA gives the owners or annuitants the chance to earn higher yields than fixed annuities when the index they are tied to performs well, they typically will also provide some protection against market declines. The rate on an FIA is calculated based on the year over year gain in the index or the average monthly gain over a 12 month period. Fia's often have limits on the potential gain at a certain percentage. This is known as the participation rate. The participation rate can be 100%, which means the account would be credited with all the gains, or it could be as low as 25%. Most fia's have a participation rate between 80 and 90% benefits guaranteed income stream. With Americans living longer and spending more time in retirement, many retirees are concerned about outliving their savings. In turn, they're searching for a product that can help ensure a steady income stream. Phas are designed with guaranteed lifetime income so you can never outlive your earnings. Diversification of portfolio. A balanced portfolio is essential for managing risk and reward in the financial markets designed for the long term. Phas are a great retirement vehicle to ensure you are not putting all your eggs in one basket. Phas offer the ability to make some money without the risk of losing it. Secure principal. Even with market volatility, investors will not lose value on their fixed indexed annuities. Your savings aren't exposed to market fluctuations, so even in a negative market return, you will not. Fall below zero.

Ford Stokes:
You can never lose your interest once it is credited to your principal. Tax deferred growth fees offer long term tax deferred savings. As long as your money stays in the annuity, you will not be taxed on the interest earnings once you receive a payout. The annuity will be taxed just like ordinary income. Predictable earnings Because Feas offer predictable income, Americans feel more comfortable when withdrawing funds from these retirement vehicles as opposed to an IRA or 401. K. Choosing an FIA is an efficient way to plan for your future as your interest. Earnings rate always remains somewhere between the interest rate floor and the cap. No matter what happens to the market, you can still count on payments throughout your golden years. Potential drawbacks of fixed indexed Annuities. Surrender charges. A surrender charge is a type of sales charge you must pay if you sell or withdraw money from a fixed indexed and even a variable annuity. During the surrender period, a set period of time that typically lasts 6 to 8 years after you purchase the annuity. Surrender charges will reduce the value and the return of your investment. Withdrawal limits. Almost all fixed indexed annuities play surrender free withdrawal limits within the annuity contract that generally range from 5 to 10% of the principal. While all annuities must be RMD friendly and provide for a penalty free withdrawal from a qualified annuity account equal to the RMD requirement for the client's age carriers limit the amount of withdrawal to enable them to grow the money invested for themselves and the client. Not suitable for short term investing if you want to grow your money, but you also need access to 100% of your money, then a fixed indexed annuity may not be right for you.

Producer:
High inflation got you down. This is your weekend. Pick me up. Thanks for listening to Money Matters with Mike.

Producer:
And if you would like a free copy of the book, you can request it by going to the contact page at MoneyMattersWithMike.com. That's Money Matters with Mike. All one word.com or call 704 560 1573. That's 704 560 1573. To request your free copy of annuity 360. So of course, Mike, there's a lot of the uncertainty out there that we've been talking about today during this show. We talk about it quite a bit each and every week because it's been hanging around for a while. But we do have and I mentioned one of these at the top of the show. We've got some resources for folks, some free reports. One of them is very timely. It's the one I mentioned at the top about the bank failures, too big to fail. And the fact that that's really not a true thing, that there's no bank that's really too big to fail because we've we've seen it happen here just over the past several weeks. So talk about some of the other things that we have Because because there's a lot going on right now and a lot of these free resources that we have that we can provide our listeners.

Mike Zaino:
Yeah. So so I love it when listeners either contact me by phone and say, Hey, send me the 23 retirement cost cutters for 2023 that we've been highlighting each and every single episode so far this year. I love it when folks request that I love it when a couple of weeks ago we talked about the widow's tax and how to prepare and plan in advance to be able to combat that that widow's tax that so many people are confronted with with the loss of a spouse. Right. So if you want to learn about that or any of the other free reports that we have, the Secure Act 2.0, how to take advantage of tax free investments, just reach out. Give me a call. (704) 560-1573. Go to MoneyMattersWithMike.com fill out the contact page find us on the socials and just you know comments on on one of our posts hey I want one of those free reports because again they are free. It is information and the smart people who have the information, when they know better, they do better.

Producer:
That's right. And you know, you've got nothing to lose because it's absolutely free and a lot to gain because it's it's really free knowledge and knowledge is power. But as we say on the show, you got to put that knowledge to use. Otherwise, it's just completely wasted, you know, and you really do need to put that knowledge to good use when it comes to your finances in these uncertain times. Well, Mike, that is going to just about do it actually here for our time together. It has it's flown by. We've we've put a lot into the show, but that is, of course, what we do pretty much every week in the hopes that the listeners will get a lot out of it. And I'm sure that they have this time around. I thank you for providing all of the insight and the clarity and hopefully a lot of peace of mind to the listeners that we provide each and every week. Thank you, sir, and we'll talk at you next time.

Mike Zaino:
All right, Matt, thank you for what you do, our listeners out in listener land. Thank. Thank you for listening to the show. If you if you learn something, let me know what you've learned. I love hearing back from you guys. So again, you know, comment on on the socials. That's probably the best place to comment or just pick up a phone and give me a call without you guys. This show does not exist. If you know anybody that could benefit from the information share Money Matters with Mike with them. I hope whatever you're doing this weekend, 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 T.

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. AmarAmeriLife 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:
Good cutting back on cable television. Lower your monthly expenses. I'm Jim Trabka with the Retirement.Radio Network Powered by AmarAmeriLife, an April 2023 survey done by CNBC shows 70% of Americans are feeling financially anxious. Cnbc's senior personal finance correspondent Sharon Epperson explains.

Sharon Epperson:
A vast majority of respondents, 70%, say they are stressed about their personal finances, and that includes 57% of people earning $100,000 or more. 58% say they're living paycheck to paycheck.

Producer:
And while a large majority of Americans are looking for ways to cut back on their expenses, doing away with high cable bills could provide some additional relief. Generation Z and millennials know all about that, having ushered in the streaming era. But with streaming services expanding their menu of options, thus pushing up their monthly prices, streaming may actually do more financial harm than good. In fact, in January of last year, streaming giant Netflix added a $1.50 to their monthly rate, while Hulu is now charging 14.99 a month for their ad free streaming platform up from the previous 12.99 price point. With streaming becoming inevitably more expensive, is it possible to keep traditional cable while lowering the monthly bill? Some cable companies now offer a channel a la carte option. Maybe try cutting back on premium channels, pare down cable boxes, or downsize your plan to eliminate channels you don't watch and save 15 to $25 a month. Cutting back on cable television, part of our 23 cost cutters for 2023 for the retirement debt Radio Network Powered by AmeriLife. I'm Jim. Call Mike today at (704) 560-1573 or visit. MoneyMattersWithMike.com to get your free copy of 23 retirement cost cutters for 2023.

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