Protecting Your Retirement from Inflation and Taxes

6.23.23: Audio automatically transcribed by Sonix

6.23.23: 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, give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing the heat in. On today's show, we're going to show you how to protect your retirement from both inflation and taxes and discuss some strategies for managing these common threats to your savings. 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? I'm doing great, Mike.

Producer:
You know, we got a lot to get to on the show. And it's it's funny because you say they're protecting your retirement from inflation and taxes. It used to be like the guarantees in life were death and taxes. It's now we're almost going to have to add inflation to that that mix there.

Mike Zaino:
Yeah it's it's an unfortunate state of affairs, but it's around for at least the foreseeable future for sure.

Producer:
Yeah, definitely. And we'll we're going to take a look at that as the show goes on. And of course, I'll I'll have a little bit of a preview of that discussion coming up here momentarily. But we want to give a shout out to our listeners there in the Greater Charlotte metro area, not only there in in Fort Mill where you are, but in all the surrounding areas, right along the along the North and South Carolina border and ports near and far. We appreciate you listening to us because, you know, hey, you can listen to us anywhere on the podcast. So it doesn't matter if you're, you know, right there in the area or if you are in Alaska or Hawaii or Australia, you could be listening to us. So take us wherever you want with the podcast version of the show. You can get that at Money Matters with Mic.com or wherever you listen to podcasts. Also check us out on YouTube. We have highlights from this show that we post there each and every week and some great new stuff all the time. We also have the Facebook page and a lot of interaction. That's the thing I know, Mike, that that I love you love it as well interacting with the listeners because that is really what it's all about. It's about education and really helping people understand stuff. And that like one on one interaction is where that really, really can happen, right?

Mike Zaino:
And whether it's, you know, on a phone call or whether it's on social media, a lot of times people will post questions or they'll, you know, they'll have a comment and I'll be able to engage and go back and forth. And sometimes we get a third, fourth and fifth party chiming in, and it just gives an opportunity for other folks to learn as well. And my challenge to anybody listening is that if you have been listening to the show because you're interested in improving your financial situation and overall retirement, then let us help you with some one on one attention. Simply give us a call. 704 560 1573. Visit the website MoneyMattersWithMike.com Search us out on Facebook at Money Matters with Mike or on YouTube. Right we would be happy to meet with you personally and provide customized guidance and solutions based on your specific financial needs.

Producer:
That is what it is all about to, you know, have a plan. It's got to be customized for you. And because no, no two retirements are exactly alike. So, you know, those sort of minute details in there are things that can trip you up. So leave it to the experts to help you out with that planning. And Mike Zaino definitely falls into that category. You can also get in touch and get a free report on tax free investments for a better retirement. It's a report that's going to help you make legal strategic investments so you can build tax free wealth. And that report is yours today. Absolutely. Free of any charge. Just go to MoneyMattersWithMike.com or call 704 5601573. So as promised preview of today's show, you know we are going to talk about inflation and why those high interest rates are going to stick around in our inflation demonstration coming up. Also, some questions from our listeners. You know, we did this last time around and it went well. So we're going to bring it back. Got some more questions that have been sent into us. And so we appreciate that. And we'll tell you how you can send those questions in as well during the show. Coming up here in just a bit, we've got the 4th of July travel forecast to go through. Yeah, I can't believe it's almost 4th of July time. Once again, that means the year is just about halfway over. And I am old because it's flying by. So yeah, we'll talk about that. Also want to retire or retire earlier? Well, if you do, we've got some things for you to avoid buying according to the experts to make that happen. Also this week in history to round out the show. First, though, Mike, let's get things started off with our quote of the week.

Mike Zaino:
Let's do it.

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 Sam Ewing, no relation to J.R. Ewing. And he did not shoot him either. This is Sam Ewing, a retired baseball player, said this one time, quote, Inflation is when you pay $15 for the $10 haircut you used to get for $5 when you had hair.

Mike Zaino:
Man, I tell you, you can tell Sam was retired and a little on the older side because I don't know who's paying $15 for a haircut in today's day and age. But, you know, his his quote is definitely a humorous way of describing the concept of inflation. Inflation just refers to the general increases in prices of both goods and services over time, which is obviously going to reduce the purchasing power of money.

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

Mike Zaino:
And the quote uses a relatable scenario of getting a haircut to illustrate those effects. And, you know, obviously, if a person had hair way back when and they went to either a barber shop or a hair salon and paid only $5, well, as time passed and inflation occurred, the price of that same haircut just kept going up and up and up. And eventually the person doesn't even have hair anymore. They end up paying $15, you know, in his quote for the same, you know, $10 or $5 haircut that they used to get when they had hair. So it just highlights how inflation erodes the value of money. And those increasing prices mean that people need to spend more money just to maintain the same standard of living or purchase the same goods and services that they used to get for much, much, much less. And so that's just a lighthearted way of capturing the frustration or absurdity. Okay. Of the rising costs associated with inflation.

Producer:
Yeah, it absolutely is. And especially, you know, if you're in a scenario like that, using the haircut sort of analogy, if you're in a situation where you are losing your hair and the prices are going up, you're you're paying more overall, but you're paying a lot more per hair to be cut as well.

Mike Zaino:
Invest in a set of clippers or a shaver. You know what? Here? I don't even know if they make there anymore.

Producer:
That's I know. They might just. Just go completely bald and your and you'll be fine.

Mike Zaino:
That's old. That's old. My wife, you know, um, both of my grandparents had a pretty thick head of hair. But if I ever start seeing myself, like, just balding, like, actually spot this bob shaven, I'm just gone, you know? And thankfully, I have a head, you know, from my days in the military. I know this that can support, you know, a shaved head and I will do that. But you know, I'm just wondering how the women out there are paying attention to, you know, what is going on with the cost of getting your hair done. Because, you know, I have a wife, I have two daughters. And when they go and get their hair done, holy cow, it's like a mortgage payment. If they all do it the same day because, you know, they're getting their highlights, they're getting their lowlights, they're getting this treatment and that treatment, and then they're getting the shit shaped and, you know, volumized and yeah, who knows? Like, I'm in and out and, you know, 15 minutes and each one of them is a 3 to 6 hour ordeal, right?

Producer:
Yeah, not so much the 15 minute thing for them that was like.

Mike Zaino:
Hundreds of dollars to get all that done. Yeah.

Producer:
And you know, that's the thing is I remember, you know, sitting in a barber shop or a salon or whatever and looking at the price list on the wall and seeing the men's haircut prices and then looking over and seeing the women's haircut prices. And I'm just like, okay, I want to faint now because just, you know, poor women, this is I'm glad I'm a guy, especially when I look at that price list. You know, it's insane.

Mike Zaino:
And I actually do remember a $5 haircut at a old school barber shop where they came in with the clean, you know, straight razor and edged you up and shaved the underside of your, you know, your chin in the back side of your ears and with an actual straight razor and and then promptly put, you know, alcohol on it to, to cool it off.

Producer:
And once you were done screaming, you looked great.

Mike Zaino:
And then they take the little duster. And I think they used this, this powder called I think it was like penile. I don't know how you say that. Pinard Piano, you know, if it's fresh. But, you know, down here in the South, we'd say.

Producer:
Pinard Yeah, that's right. That's right. And of course, you know, here in Georgia, we also have a town called I'm sure you're familiar with Mike spelled like you would think it would be Martinez, but it's Martinez, Georgia, and yeah, that, you know, so we say all kinds of things in the south. That's true. Well, one thing here, you know, we're talking about the quote of the week, of course, had to do with inflation. And we'll talk more about inflation as we go along. But also, you know, something else that is going up in the future anyway, taxes. You know, we've got death and taxes as those two guarantees in life, Inflation also in the mix now it seems like. But we want to spend, I think, the biggest chunk of the show today, Mike, talking to the listeners and kind of explaining about ways to mitigate the impact of those two things, taxes and inflation on retirement. So let's tackle the taxes part first here and and talk about the two types and really the only two types of tax free investments.

Mike Zaino:
Yeah. So I mean, if you are one that agrees with us and you think taxes are going. Up in the future. And I've never had anybody tell me when I asked them that question that they actually think taxes are going down in the future. So if you agree with us, there are actually only two types of tax free investments that are available to the average, everyday person. The first one is either a Roth IRA or if you're able to contribute to your Roth employer sponsored plan, if your plan offers a Roth version. And the second one is, believe it or not, life insurance. And I'm going to talk about each one of those individually because I want to show you the power that these have to work in your favor over time. And the key there is time because there is this this little thing called compound interest that a pretty smart guy named Albert Einstein called the Eighth Wonder of the World and said that those who understand it will earn it and those who don't will pay it Well when you. Take compound interest and you add the element of time and you give the interest time enough to compound miraculous things work for you. So when you put your money into a Roth vehicle, whether that's a Roth IRA, something that you're doing outside of your employer sponsored plan or whether you contribute to your Roth 401. K or your Roth 403 B or your Roth Thrift Savings plan. If you're a federal employee that happens to be listening to the show today.

Mike Zaino:
When you do that, what you are actually doing is paying the tax up front on the seed. And so that money goes into the account after tax and anything that it generates over the entirety of its time spent in the account. Compounding is growing also tax free. And then when you go to pull that money out, all when you're actually ready to take distributions and utilize the money because you paid the tax on the seed way back when, when you sowed it into that type of an account, you don't have to pay the tax on the harvest when you go to reap what you have sown. And so, you know, if you look at somebody who has a 20 to 40 year career of being able to contribute and then allow that to grow on a tax free basis, you're talking about significant earnings in retirement from an income perspective. And a lot of folks don't know that even if they have the traditional IRAs or the traditional employer sponsored plans, such as the 401. K, the 403, B, the TSP, the the 457, any of those types of plans, you can actually convert your existing tax deferred retirement savings accounts into a Roth IRA simply by doing what is called a Roth conversion. And those, Matt, can be extremely powerful for folks, especially having, you know, been done to at least two years prior to when it comes time to filing for Medicare.

Producer:
Yeah and there's that you know look back provision there in Medicare where you know they're going to take those those couple of years and use those use those to determine your premiums for Medicare. When you first start taking that in those first years of eligibility.

Mike Zaino:
Absolutely. And so so what happens with the conversion process is you look at how much room you might have, you know, in your current tax bracket, like maybe you have $3,000 before you have to pay a higher tax. If your income is elevated past that certain threshold or maybe it's 10,000 or 20,000. Well, in those instance, you could take 3000 or 10 or $20,000 and just push it to where it's just under the threshold that will push you into the next taxable bracket and convert those dollars at the same tax rate that you're paying for the rest of your money. So you're not paying any additional tax percentage. You just have to pay the regular tax on it. Right. And then then stick that into the Roth IRA and let it continue to grow tax free. So that's that's the whole idea behind the Roth conversion. And we are getting our phones absolutely blown up recently with, you know, just the common state of affairs in the United States with inflation the way it is. And the market's kind of the markets have actually not been bad, you know, so far this year. But everybody is just waiting for that proverbial shoe to drop the hammer to fall, you know, whatever kind of colloquialism you want to use, they're just waiting for the bubble to burst.

Producer:
Yeah, there you go. I mean, they are scared of certainly another 20, 22, but definitely another, you know, 2008, for example, that type of year. So the Roth conversion. Yeah, definitely a powerful thing to be able to to do and to work with you on that because, you know, I know if I were doing it myself, you know, I'd I'd probably mess it up. So, you know, having an expert on my side to do it is always a good thing. And then also, you know, life insurance, that is we've said it before, but it's not your grandfather's life insurance anymore. And you can actually have, you know, living benefits that go along with it. Yeah.

Mike Zaino:
So so life insurance of old. Okay. If you have a an say of old, I'm talking about even a ten year old policy. If you're if your life insurance is older than ten years of age, you should probably have a second set of eyes and make sure that it is not the old school type of life insurance that we often referred to as your granddad's or your great granddad's, you know, life insurance, which in effect, folks, is. Just death benefit, right? You have to die in order to take somebody else to take advantage of the money that you leave behind. Well, that is not today's life insurance. Today's life insurance actually is life insurance that you don't have to die in order to use. You know, they come with living benefits. You just alluded to those. So, you know, as far as if you're ever diagnosed with a chronic a critical a terminal illness, you have a heart attack, you have a stroke, you get diagnosed with cancer. And there's a whole lot of care that needs to happen. You can actually accelerate a portion of the death benefit while you're still alive to help offset those costs. So that's that's a really, really great use for life insurance while you're alive. Right. But the genius part of of, you know, a product in particular I want to highlight is called an indexed universal life insurance policy, is that you can set these up to be able to take a guaranteed lifetime time income stream that is offset by the death benefit.

Mike Zaino:
You take them through loans, okay? Loans you never plan to repay so that when you die, you'll just settle up at that point in time. But your balance is still growing on a separate ledger in most cases with these companies, which enables you to have tax free income, still get living benefits and be able to, when you pass away, pass on a death benefit to your heirs. So it is a great tool to build your retirement savings and help generate additional tax free income during your golden years. Now, I said time was a big variable. You need at least, you know, 15 years or so before you want to turn on an income stream in order for it to deliver what you're really looking for it to do. Now, if that's you pick up a phone and give us a call. You know, if you are tired of worrying about your future, if you are ready to chart that course toward a more tax efficient retirement, simply pick up the phone and give us a call. We help pre-retirees and current retirees with setting these types of vehicles up all the time. So call today. Visit our website today to help yourself learn more, get educated and schedule a no obligation consultation. And we are going to compare your current plan to what your retirement could look like if you work with us. And our goal is to create the best plan possible because you're only going to work with us if we can do better for you.

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

Producer:
Another thing, of course you want to protect yourself from Mike. Not only is the taxes and the potential or definite pretty much increase in taxes going forward, but also inflation mean, you know, we've got inflation that has been stubbornly high. It has come down from its peak, but still sticking around at a pretty darn high rate, higher than we've been used to in many, many years on an annual basis. So we're looking at this article in The Wall Street Journal that was published recently about why interest rates, those high interest rates that we've been seeing, could be here to stay. And, you know, it's not encouraging news for folks who are sick and tired of those high interest rates and high inflation.

Mike Zaino:
Yeah, no, it's not encouraging news. And it's not just here in the United States either. Okay. Across affluent countries, I'm not talking about third world countries. I'm talking affluent countries as well as the world's banking powers. Central bankers are sharply lifting inflation forecasts and they're penciling in further interest rate increases and warning investors. Just what you said, Matt, that that interest rates are going to stay high for some time. And in fact, the Federal Reserve just last week held interest rates steady, but they signaled two more increases this year, which is going to lift the rates in the United States to a 22 year high in price inflation in core services, excluding housing, which is a closely watched gauge of underlying price pressures, remains and this is a quote, remains elevated and has not shown signs of easing. And that's what the Fed wrote in its semiannual monetary policy report last week. So yeah, it is definitely here to stay for at least the foreseeable future when you consider some of the things that are going around all across the globe, it's no surprise.

Producer:
Yeah, you're absolutely right. I mean, you know, underlying inflation in the US and Europe, according to this Wall Street Journal article, remaining around 5% or higher with stable wage growth. Central banks revising their inflation forecasts upward, signaling further interest rate increases. As you say, the impact of previous interest rate increases seems to be waning. They say with with signs of housing market stabilization and unemployment decline, central banks are really facing the challenge of deciding whether inflation is temporarily high or if it requires more drastic measures to address lawmakers in the UK. By the way, you talked about this happening around the globe. Well, they're calling for an independent review of inflation forecasts after the central bank's initial underestimation there. And, you know, economies still recovering from the pandemic also delayed reopening in China could provide a boost with stimulus measures there as well. So it's like there are a lot of variables here, but it's all I know is a my crystal ball is still broken and, B, you got to plan in no matter for no matter what is going to is going to come. It's like that old saying, you know, expect the best, prepare for the worst, capitalize on what comes. That is really what it's about when it comes to planning your financial future.

Mike Zaino:
Yeah. And in the military, we used to say, you know, pray for peace, but prepare for war. And it's one of those things where I'm not saying we're going to go into a war against inflation, but you need to be prepared to do that and make sure that your retirement plan is prepared to withstand any battle that it might face. Okay. And so with record high inflation, they're talking about a 22 year high. That's that's that's huge. Okay. That is huge. And the last thing any of us wants to see are mortgage rates in the in the 15 to 18% like they were back in the 80s. Okay. We don't want to see that. And so we need to make sure that that we are doing everything in our power possible for our own personal economy. Okay. That your personal economy is what you have control over. You don't have control over what the Fed is going to do. You don't have control over what the banks and the monetary systems and all of that stuff and the effect that it has on you and your money. But what you do have control over is your own personal economy and the way that you spend your money.

Producer:
Absolutely. And so, you know, control those things that you can control and plan for the things that you can't. You know, it's like plan just in case no matter what happens, you'll be prepared. And if you want a plan like that, if that sounds like something that's good, good for you and hope it does go to money matters with Mic.com That's money matters with Mic.com. Or give Mike Zaino a call. (704) 560-1573. Well, you know, Mike, we took some listener questions last time around here on the show and we had a lot of fun with it. It went very well. The listeners seem to really appreciate it. And so we thank you to all of our listeners out there who called in or wrote into the show. We did have a really positive response to that last week. So we're going to go back in. We're going to dig back into the mailbag again, this show as well. So you can actually go to that website, Money Matters with Mic.com to reach out and send your question in as well. And don't forget that all of the listeners to the show are eligible for a free financial consultation just for being a listener so you can go there. MoneyMattersWithMike.com for that as well but also. All right here we go. We're going to we're going to get to these questions now. And I'm going to stop rambling on with Larry in Pineville who says, I'm curious about how much money I should have should save rather before I retire. Any tips or guidance would be appreciated. Larry, thank you for that question. Mike, what do you say to Larry?

Mike Zaino:
Yeah, Larry, again, thanks for that question. That that is that is a very popular question. You know, how much money do I need to have saved? Okay. Well, first of all, Larry, and anybody who may be asking that same question, remember, please remember, retirement is not about the size of your nest egg. Right? It's not about attaining one big magical number. In fact, it is about income and how much income you have coming in, as well as how much you know in expenses you have going out every single month. And if you have more months than money, you're going to have an income gap that is bad. You want to make sure that you have more income than expenses so that you have a surplus and be able to live that life that you had always envisioned. Now, secondly, you need to determine what that life you envisioned actually is. You know, what are your retirement goals, what is your lifestyle expectation? So that we have a baseline to estimate what your income is going to, you know, have to be in order for you to accomplish each and every single one of those goals.

Mike Zaino:
And then, you know, next I would tell you, Larry, and anybody listening, you definitely want to consult with a financial professional to help you assess your current rate of savings and then identify any future gaps based on if you just keep doing what you've always done. Okay. And then finally, contributing to any of your retirement accounts and doing it often. Okay. And increasing those those contributions as you get pay raises, take advantage of employer matching programs if they are available. So for an example, if they will match you up to 5 or 6% of whatever you're willing to put in and you're only putting in 3%, you're telling me that you don't like free money, okay? Because you want to be able to maximize their match and their contribution. And by doing and maximizing those savings, now you're going to shorten the length of time, Larry, that you're actually going to have to work. And I mean, after all, if you can retire sooner than later with a plan as opposed to just flying by the seat of your pants, that makes a lot more sense to me. I hope it does to you.

Producer:
Yeah, it makes sense to me. I mean, you know, and and, you know, getting that employer match is 100% the thing to do, because free money is the best kind. And there you go. There's some available for you. All right. So thank you, Larry, again for that question. Now we go to Sharon in Lancaster, who writes in to say this I want to explore different retirement savings options. Can you provide insights on the best ones available for baby boomers today? So so what's the answer there for Sharon?

Mike Zaino:
Well, Sharon, another really, really good question. And you have some options. That's the good thing, right? So the first thing I would tell you to do is, is, you know, consider whether traditional IRAs or Roth IRAs are the way to go for you. If you're looking for tax advantages and you're looking for some flexibility, you may also want to invest in an indexed universal life insurance policy, like I just highlighted a little earlier in the show. That way you're able to, in effect, become your own bank and generate tax free retirement income. You may also, Sharon, want to explore annuities as a way to secure a guaranteed income stream or multiple income streams. If you do a strategy called either laddering or staggering annuities, those can provide streams of income in successive years or at different points in time during your income, your generation or your income need portion of your retirement. And let's face it, you know, how much income do we really need? Well, as much as we can possibly generate, right? That's always my, you know, answer to everything. Because while money doesn't buy happiness, what it does is buy you options.

Mike Zaino:
And those options also and often bring happiness. Okay. And so a lot of folks, Sharon, they contribute to workplace retirement plans like the 401. K or the 403 B's or the Thrift Savings plan, especially if your employer matches contributions. But if you're not taking full advantage, if you're not maximizing your contributions. And what does that mean? Well, in 2023, you can contribute if you are 49 and younger, $22,500 on an annual basis. If you're 50 or older, you can contribute $30,000 a year if you're obviously able to and your salary warrants that kind of contribution. But if you are able to do that and you do that for ten years, that's $300,000. All right, Sharon, before the match and before any potential growth. So a financial professional can definitely help. Look at your overall situation. If you have multiple old 401. K's, if you have old IRAs, we might actually be able to combine them and help you simplify your life by rolling over those funds into one single IRA. That allows both for lower fees as well as a little bit more flexible investment options. Great, great question. Appreciate that.

Producer:
Yeah, absolutely. Sharon, Thank you. And yeah, definitely, Mike, that flexibility and those having those options, that's really what is going to be, you know, a lot of the the gravy on top or the cherry on top of your your retirement when you're able to to do that and take take control of the thing you know and because people like being in control. So one more question here from a listener. This is Steve in Gastonia who says, quote, I am a bit confused about Social Security. Well, Steve, you're not alone. Um, can you explain how it works and when I can start receiving my benefits?

Mike Zaino:
Steve Yes, I can. And you want to know why you're confused about Social Security? I'm going to tell you, Steve. Social Security. Guess what? It's confusing, okay? There are so many different rules and and variables that play into Social Security and eligibility and understanding your eligibility and how your benefits are calculated based on your earnings history is a huge component of determining when you should turn on Social Security. The first thing that I am going to suggest that you do is go to the Social Security Administration's website, right? And that is for all of our listeners, SSA, the the first letters of social and then security and then administration. So SSA knot.com but.gov because it is a governmental agency. So create an account at ssa.gov to view your top earning years as well as your potential benefits. And if you see anything that doesn't look right while you still have time to get those corrected, then you're going to have to take action and make sure that those earnings that you are being reported are in fact how much you earn. Because I've seen people that come in and they're showing zeros, in fact, for years that they actually had a tax return.

Mike Zaino:
And I asked them, do you have copies? And they're like, Absolutely. So all they had to do was carry it down to the Social Security office, right? So the earliest age to start receiving benefits for retirement unless you are. Disabled is 62 years of age, but waiting until your full retirement age, which is typically either 66, 66 and two, four, six, 8 or 10 months or age 67. That can drastically result in higher monthly benefits. And if you can afford to and you have longevity on your side and you have health on your side, if you can afford to wait until age 70, that is going to further increase your monthly payout to its maximum amount. So consider your financial situation, your longevity and your current health before making a decision in order to help you reach your goal. So yeah, Steve, that is a phenomenal question and it is no wonder that you are confused because like I said, it's confusing. So just do yourself a favor, do your own research, go to ssa.gov and create your own account. And let's start the ball rolling right then and there.

Producer:
Absolutely perfect thing for you to do. And another good thing for you to do is schedule a complimentary financial and retirement consultation and receive a Social Security maximization report today. And that is free of charge as part of our full retirement plan consultation offer for our listeners here. And Mike, tell tell everybody who's listening today, whether it's on the radio or via the podcast, what that consultation process is like.

Mike Zaino:
Yeah. So I mean, the first phone call we're going to have is just going to be a, you know, 15, 20 minute discovery call. I'll ask you a little bit about you and what your, you know, where your current situation is and some of your goals and objectives. I'll tell you a little bit about me and we'll kind of just figure out if we need to go and dive a little bit deeper. And, you know, I'm going to say that most of the time we're going to take that deep dive and we're going to provide a comprehensive consultation at no cost and at no obligation. You're only going to end up working with us if it is best for you. So we're going to dive in and we're going to see if we can cut some unnecessary costs, whether those are in fees that you are paying, whether those are in your IRAs or your 401. S or any other types of retirement savings accounts. Okay. As Matt just mentioned, we can help you with a Social Security maximization plan as well as do some Medicare planning if you're a Medicare age. Because guess what? Just like Social Security, Medicare is is maddeningly confusing as well. And again, we'll compare your current situation to just what would be possible if you work with us. And you have to remember, guys and girls, it is your money. And if it's important to you and if it matters to you, guess what? It's important to me and it matters to me. So make sure you contact us at (704) 560-1573 or you visit the website at MoneyMattersWithMike.com to schedule your complimentary consultation today so that we can tailor a plan for your specific situation and needs.

Producer:
And that word complimentary is 100% true because it is free of any cost, free of any obligation to you. When you reach out to Mike Zaino and give him a call. Once again, the number 704 5601573 and the website Money Matters with Mic.com. Well, as we continue on here with the show, Mike, you know, we've got a lot of people think these days who are looking to and I say that from say this from personal experience because my sister just actually retired early. She was able to do that. And so a lot of people might might be in those same shoes wanting to retire early. And so we've got some things here from an article that we saw here recently in Yahoo Finance about what at least some of the experts are saying are some things that you should avoid buying if you want to retire early. Now, whatever your reason for wanting to do that, you know, whether you want to go to the beach, whether you want to go to the mountains all the time, whether you just want to sit around the house and read the newspaper, you know, if you can if you can find a physical newspaper these days or if you want to start a new business, anything like that, no matter what your reasoning is, you can make it a reality. But the experts in this article anyway say these are the things that you should avoid buying in order to reach that earlier retirement goal. And the very first one here, Mike, is luxury vehicles. And we're not talking about only the kind with four wheels. We're also talking about the kind that goes in the water, the boats and the big RVs as well, with maybe more than four wheels. And we've got all these things to avoid here.

Mike Zaino:
Yeah, So so luxury vehicles, heck, vehicles in general doesn't even have to be a luxury vehicle. Those are already what is known as a. Appreciating asset, which means that as soon as you drive off the lot, folks or you you have that sucker placed down in the water. If it's a boat you are, you've just lost value. Okay? And most people are not utilizing their vehicles, whether it's their car or their truck or their SUV or their boat to generate income. So it's not an income producing asset. It, in fact, is a depreciating asset that is going to lose 20 to 30% of its value as soon as you drive off the lot during that first year of ownership. And so those luxury vehicles especially come with luxury price tags. Okay? Those are big price tags and they also come with more expensive ongoing costs like insurance. Okay. Because on new vehicles, you're going to want to have full coverage on all of those. So comprehensive and collision as well as all the bells and whistles. Right. What about maintenance? Okay. I've looked at I've seen some some maintenance for oil changes that are over $2,000 just for an oil change. God forbid you need anything repaired on these luxury vehicles. Okay. If you have to pay storage fees, whether it's a dock for a boat or, you know, storage or parking for an RV, all of these things add up over time. And what is really doing is robbing your future self of actually being able to afford the luxury of this free decision making in retirement. Because if you're buying those luxury vehicles when you're in your, your, your 20s, your 30s or 40s and your 50s pre-retirement, that is money that could be going to your future self. So, you know, bottom line is it's better to drive a Honda to the hills than it is to drive that Lambo to the office.

Producer:
Yeah, you know, that's goes back to to something that we've talked about previously on the show is you know you don't want to be working in retirement if you don't have to work in retirement if you want to like if you if you love what you do or if you want to start a new career or whatever, great. Do that. But don't be in a situation where you are, you know, house poor or car poor or whatever kind of poor that you have to work. Yeah.

Mike Zaino:
And when you say car poor, I mean, I've sat down with folks who are in their 30s and their 40s and these people have a 12 to $1500 a month car payment. And when I point them out, they're like, oh yeah, that's just how expensive cars are. And I'm like, Baloney. I can promise you I can find a car cheaper than that. That gets me from point A to point B in this. Guess what? All those ancillary costs, okay, the insurance and everything, you're well over $2,000 a month just to drive from point A to point B, And so I'm going to lay down my trump card on that and say we could probably do better.

Producer:
Yeah, I would definitely if you're looking at 12 to $1500 a month, you can do quite a bit better than that. Even just doing, you know, if you want, let's say, a luxury car or something, that's that's got all the bells and whistles. Heck, you know, find one that's a couple of years old, like don't buy a brand new off the lot because then that way the original owner has already handled a lot of that depreciation for you. And then, you know, you're getting something that might be a little more along the lines of what you sort of want but don't necessarily need. But you are getting it for a lot less than maybe you would have otherwise. And you don't have to deal with the depreciation yourself in the end. So at least that is is a possibility anyway. But just stay away from them if you can. Holiday homes and timeshares. So, you know those vacation homes that may be at the beach or up in the mountains, maybe you own a cabin or something like that. This article says anyway, don't and especially don't own a timeshare. Yeah.

Mike Zaino:
So so I don't know that many people who actually love their timeshare. Know a few. Okay. Because they utilize it all the time. Right. And it's one thing if you utilize it all the time. But the fact of the matter is, is that most people have these timeshares or these, you know, second or third homes and they're not utilizing it all the time. And unless your vacation home is actually being used to produce enough income to offset its costs, it's likely sitting empty and unused most of the year. So timeshares, especially, offer limited flexibility in terms of travel plans. You might get the same week every single year. And if it just doesn't work into your work schedule to go that particular year or something comes up to where you can't go, you're going to be very, very limited into what your options are. You know, if you want to access the property outside of your specific weeks or seasons and instead you might consider contributing some extra money toward paying off your mortgage, your primary mortgage. That way when it is time to retire, you can actually sell the family home and relocate, whether that is to the beach, to the lake or to the mountains. Guess what? The kids, the grandkids, they're all going to be eager to visit you when you're in a little bit more exotic location than just living down the street in the same town they live in, Right?

Producer:
I mean, you know, good luck getting rid of them at that point. Yeah, they'll they'll be there all the time, but that's great. If there's one thing I know about grandparents, it's that they generally don't mind the grandkids and the and the kids and all that coming to visit. They pretty much love it all the time. So number three on this list of the five things to avoid buying if you want to retire early. The latest and greatest technology. I have been guilty of that in the past and I say in the past because now I think my my my cell phone is probably four years old, something like that at this point. So haven't done it in a while. I may be due for an upgrade fairly soon, but I'm just enjoying having my phone paid off and not having to pay on it every month. That's one of those expenses that I don't have to worry about.

Mike Zaino:
Yeah, so this is another area when we really take a deep dive into people's finances and we start analyzing what they have and what they're paying for on their phone bills, you know, it's really easy to get caught up in those new features of the latest smartphone, you know, the ones that can really, you know, zoom into the moon, literally have one that's called it's got a moon, zoom on it. I'm like, okay, um, how many people are actually using that and zooming into the moon? I don't know what that answer is, but apparently they thought, you know, the marketing geniuses thought that that was a a selling point. Whether so whether it's your smartphone, whether it's a laptop, whether it's a television. You know, I've often found that waiting just 1 or 2 extra years from when they come out can save you. Not just some, but a ton of cash. And so you should consider buying a model from the previous year or hold off on those upgrades until devices go on sale. Matt I'm in the same boat. I think I have a Samsung Galaxy S20 and I think they're on the 23 now.

Mike Zaino:
And so, you know, it used to be that as soon as the new one came out, I was like, Oh, I got to have that one. But then I'm like, Well, that phone is $1,200. Do I really need to spend $1,200? Oh, that's okay. We can we can add it to your payment plan. Well, guess what they're doing? They're securing an additional monthly recurring charge that comes into their bank account and leaves your wallet instead of staying into your staying into, you know, your wallet and your bank account. So Black Friday, Cyber Monday, those are great days to to find deals. On on gadgets or on technology. Believe it or not, TV's the best. The best time is around Super Bowl, where a lot of those are going on sale as well. So, I mean, if you can just hold off on stuff like that and not just have to have the latest and greatest as soon as it comes out, then I think you're going to end up saving a lot more money in the long run.

Producer:
Right. Put that money to better use for you rather than just going either to that monthly payment like you were talking about or shelling out. What for some people is, you know, you said it's $1,200 phone. Oh, those people you're talking about earlier. Oh, that's just a car payment. No, no worries. But that is, you know, a good chunk of change that could be working for you instead of just going out of your pocket. Flying out the window. Right. Another thing that these experts at this Yahoo! In this Yahoo! Finance article say that you should avoid buying if you want to retire early. Excessive daily conveniences are the luxuries in life that we just can't can't say no to.

Mike Zaino:
Can't say no to. Right. It's this one. This one, you know, I've heard it referred to as the latte effect. And. All right, folks, if you are stopping every day and getting a coffee at Starbucks or Dunkin Donuts or the cafe around the corner, I mean, just stopping that could save you about, you know, $2,000 a year on the average couple. Why? Well, specialty drinks cost around $5 or more. And it's really easy to become tempted and purchase the bagel or purchase the donut or purchase that pastry that's just looming at you, staring at you with this longing, you know, eyes, even though those things don't have eyes, but you get your eyes locked on them, You're like, Oh, kind of have that right. So that's what we mean by daily conveniences. If you are too lazy to buy a loaf of bread and buy some cold cuts or some peanut butter and jelly and make a sandwich at home and take it to, you know, take it to the job site. And you are somebody that is consistently spending. Let's face it, you can't go out to eat lunch at any fast food place now for, you know, ten bucks about it's going to take at least $10. Right. If you're getting a drink, especially. Well, if you do that five days a week, well, that's 50 bucks a week right there. You start multiplying that times 50 weeks in a year. And what do you got? You got another $2,500 there. So these are the excessive daily conveniences that we're talking about. So quit being lazy. Make your coffee at home and make your sandwiches at home.

Producer:
Yeah, that can save you a ton. As you say, thousands really over the course of a year. And so even more as that effect, you know, happens year after year after year, you're saving a good chunk of money. And if you put that to work for you, then future you will. Thank you very much. Right.

Mike Zaino:
I mean, in the example I gave you was 4500. Let's just say we cut it down to 4000. You do that every single year for 20 years. What is that, $80,000 before any growth potential that that money has and the time value of money and allowing it to compound. I mean, you could have several hundred thousand dollars if you just cut that out and start investing it instead.

Producer:
Right. I mean, it just really, when you think about it that way, these little things that you think are little each and every day do really add up. And over time, that can be a big, big effect. And one more thing here on this list of things to not buy, if you want to retire early, high fee financial products and investments, that's a biggie. Mhm.

Mike Zaino:
Yes. So many mutual funds come with excessive fees and those are known as the 12 be one fees. Okay. Variable annuities typically have very, very high fees inside of them, speculative investments, They're going to tout potential gains. But guess what? If they're speculative, that means they also carry a high amount of risk. And if you guessed wrong, then you're going to be out a lot of money. And there are safer, structured ways to take and make smart risks and grow your wealth in an efficient manner. And all you have to do is get in touch with us to learn about your options.

Producer:
Right? Go to MoneyMattersWithMike.com to do that that's MoneyMattersWithMike.com or call (704) 560-1573. Well Mike we mentioned it at the top of the show 4th of July just around the corner and I can hardly believe it but it's definitely feeling like it outside as as warm as it's been and as humid as it's been here in the Southeast, you know, it's the summertime. So let's talk about all the traveling people are going to be doing here.

Mike Zaino:
Yeah, people have been have been cooped up for for a long time. Right. With the with the three years of the pandemic. And now that it's finally over, people are starting to get out more. So, you know, the 4th of July forecast is very similar to what it was for the Memorial Day weekend and that more than 60% of the Americans who were surveyed, they actually plan to travel for Independence Day, whether it's that day, that weekend, that week. Right. And we're talking about 60% of America. That's over 155 million people, folks. So if you plan to travel, please hit the road early and or make sure you arrive at the airport with plenty of time. And I always say it, it's difficult for me, but wear your patient pants, okay? Because there are bound to be lines, there's bound to be traffic. And we just want to make sure that everybody gets to where they are trying to get to in the safest manner absolutely possible. And so on the Friday of Memorial Day weekend, speaking of Memorial Day, the Transportation Security Administration, which is better known as the TSA, they screened roughly 2.7 million people at US airports, which was the highest checkpoint volume so far in 2023. And the 4th of July is forecast to be even greater.

Producer:
It's this week in history. So some big things happened this week in our history. Mike, the number one thing that we're going to talk about is one of the one of the biggest sports around. And on June 24th, 1922, a little bit of a morph morphing went on, I guess you could say, as the American Professional Football Association adopted the name the National Football League. Yeah, that's right. The NFL was was born on this day back in 1922, would go on to become the most successful sport, averaging more than 20 million digital and streaming viewers each week. Millions of people play fantasy football each week as well. Some do better than others. And the new season, the 20 2324 season kicks off in just about 11 weeks. So I know I will be probably, you know, kicking myself for it. But, you know, cheering on the Falcons once again this time around, ever since that Super Bowl a few years ago where they were just kicking tail at the half and then came back after and lost, Um, you know, it's just been it's been a bit of a struggle.

Mike Zaino:
Yeah. You're talking about the biggest collapse in Super Bowl history, right, against the New England Patriots and Tom Brady. Yeah, yeah, yeah, yeah, yeah. I feel for you there. You know, I'm a glutton for punishment. So I've been a Dolphins fan ever since 1981, So, yeah, I'm just looking for that mediocre year again. Right? But, you know, fantasy football changed the way that I actually watch football. And so now what I do is I follow players and I actually don't necessarily have a favorite team anymore. Instead, I'm rooting for players, right? It's a little bit different way of of looking at it. Hey, you know what? On this on the date of June the 25th, in 2009, the world lost a great one. And we're talking about, you know, Michael Jackson. He was a legendary singer songwriter. Dancer, philanthropist. He's one of the best selling artists of all time. He sold over 400 million records worldwide, and the music video for Thriller revolutionized the entire space, propelled the album's success to more than 66 million copies. Just of that album alone were sold. I know I actually was fortunate enough to see him in concert twice, and he was a showman for sure, and the world lost a great one on that day.

Producer:
Definitely did that Thriller video, too. Just still one of the best of all time. One last thing here, Mike, before we before we run, June 26th, 1997, that was when the first Harry Potter book was published and it was Harry Potter and the Sorcerer's Stone here in the US. Harry Potter and the Philosopher's Stone across the pond, they called it. And I don't I've used to know why that change was made for the US, but now I have forgotten, so I won't even go there. But more than 120 million copies of that book have been sold in more than 80 different languages. Boy, that was lightning in a bottle for sure.

Mike Zaino:
J.k. Rowling knocked it out of the ballpark with that series.

Producer:
Definitely so. Well, Mike, that's going to wrap it up here for this week's edition of Money Matters with Mike. But thank you, sir, as always, and we'll talk to you again next week.

Mike Zaino:
Matt, thank you so much for what you bring to the table for setting me up and letting me knock you out, You know, knock it out of the park for for all of our listeners. Thank you to our listeners. Okay. Without you guys, we don't have a show. And I really appreciate the fact that you tune in religiously each and every single week and in the Charlotte area Saturday mornings at 9:00 on WRC. We appreciate the listeners who listen wherever you might listen on podcasts, you know, at your convenience, if you know anybody that can benefit from the information that we're putting out over the airwaves, then please share the show. Reach out to us for some of those free reports that we've mentioned time and time again. And if you don't know what I'm talking about, reach out to us anyway and we'll get them to you. So whatever you're doing this weekend, I hope you do it to the 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:
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Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then tune in to Money Matters with Mike to learn how you can protect and grow your hard earned money. Money Matters with Mike every Saturday at 9 a.m. right here on FM 100.1 and AM 1340. Schedule a free no obligation consultation now at MoneyMattersWithMike.com.

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