Seven Alarming Statistics That Will Motivate You to Plan For Retirement

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

Producer:
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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 to chew on each and every week. And today we are absolutely bringing the heat again. On today's show, we're going to talk about whether or not America is ready for retirement, and we'll discuss some new statistics that reveal how Pre-retirees are actually feeling about their futures. 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 you doing today, brother?

Producer:
I'm doing very well. Mike. I hope you have had a great and productive week, sir.

Mike Zaino:
Again, it has been a very great and very productive week. I actually hosted a retirement workshop here in the Charlotte market, and we had, um, people from all around the area. People drove for upwards of an hour and a half away just to come, uh, listen to my words. I was I was humbled and honored to be able to deliver them. And then we had many, many one on one appointments. And we helped a lot of people get on the path to financial security in retirement and having confidence in a plan where they know they can never outlive their income.

Producer:
That's amazing. And really, I'll tell you what, that is what the show is all about as well, because, you know, it's all about education around here and making sure that people know what their options are and know that they have options controlling the things you can control. Right. And and giving you the tools to do that. Uh, it really is, uh, where the bread and butter of the show comes in here each and every week. So I just wanted to say, you know, thank you to all of our listeners out there, uh, for for tuning in because, you know, if you don't tune in, then we just don't have a show. So we thank you for that, whether it's here on re on the radio or whether it's, uh, on the podcasts. And hey, you could you might be listening to us on the radio and say, hey, you got a podcast. Yeah, absolutely. Go back and listen to each and every edition of the show. Going back nearly two years now. Uh, just search for Money Matters with Mike anywhere you get your podcasts. And that's where you'll find us. You'll also find us on YouTube. We've got a bunch of video highlights from the show there. Just search Money Matters with Mike on YouTube, either on the website or the app, however you prefer to get it. You can also go on the web to Money Matters with mike.com, Money Matters with mike.com, or give Mike a call at (704) 560-1573. Look, here's the thing. If you don't know how to get in touch with Mike Zaino, um, you got issues because there are a bunch of options there. Yeah.

Mike Zaino:
I mean, we would love to meet with you. We would love to discuss how we can help you reach your financial goals, and we can help you with, uh, things like retirement planning, risk management. We can help you with estate planning and just a whole lot more. Okay. Building sound financial plans for our listeners is what we do best 100%.

Producer:
And again, that. Number is (704) 560-1573 or go online to Money Matters with Mic.com. Bunch of stuff to get to here on the show today. Very, very full agenda for us as we go through here. We're going to give you seven retirement statistics to hopefully motivate you to improve your situation, to give you the retirement that you have always dreamed of. We're also going to tell you why now is a great time to start working with a licensed financial professional. I just happen to know a guy. His name is Mike Zaino. Um, also, we're going to go through a list of the most expensive states for retirees. You can probably guess at least 1 or 2 of them, and some alternatives to consider if you kind of like the climate or like the atmosphere of those very expensive states, but you don't feel like spending all of your money on, uh, you know, things that that cost more the price of housing, uh, higher taxes and things like that. Okay. Also, we've got some. Yeah. What's going on with Social Security? We'll play a little right or wrong coming up in just a bit. So like I said, hey, full agenda for the show today. So let's get right into it shall we. We're going to start off with some inspiration here. It's our quote of the week.

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

Producer:
And this week's quote comes from one of the most legendary presidents of the United States, Mister Abraham Lincoln. And he said this once you cannot escape the responsibility of tomorrow by evading it today. Boy, true.

Mike Zaino:
That is definitely true. And you know, oh, Honest Abe meant that you just can't avoid or ignore your future obligations or plans by ignoring them in the present. And in terms of retirement planning, it really emphasizes the importance of taking action now in order to secure your financial well-being so that your future self thanks you instead of placing your plans in that drawer of procrastination and then facing the consequences later on in life. Okay.

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

Mike Zaino:
So I wanted to, you know, give you just a few examples. Um, number one, like if you if you begin saving for retirement early on in your career, even with small contributions, you're going to benefit from this thing that Albert Einstein called the eighth wonder of the world. And that, of course, is compound interest. Okay. Over time, that compound interest really, really adds up. And delaying this means that you miss out on all of the potential growth, and you might have to contribute more. And I'm talking about much more later in order for you to catch up. Okay. Number two, many employers offer retirement savings plans like 401 S, 403 BES. Uh, tsp. If you're a federal employee and those plans have matching contributions. So by not participating in those plans, you're essentially telling us, nah, we don't like free money. We'd rather pass that up. And you're postponing building your retirement nest egg. And that just doesn't make a whole lot of sense to me. Right? So then you have things like avoiding budgeting and avoiding financial planning. And so without a clear budget, which I actually like to call a spending plan and a financial plan, you might end up spending more money than you actually earn and find that no matter how much money you're making, you're still basically living paycheck to paycheck with little or nothing left over for retirement savings.

Mike Zaino:
So failing to budget now could definitely lead to financial struggles in retirement. Okay. And then things like ignoring debt repayment, you've got high interest debt like credit cards that can absolutely destroy your income, hinder your ability to save, and ultimately negatively impact your retirement. So by tackling your debt now, what you're actually doing is freeing up money to be able to invest for your future again. Your future self will thank you. And then the biggest one, and we're going to talk about this more in detail later on, is delaying seeking professional advice. If you are uncertain about how to plan for retirement, how to invest your savings, delaying seeking that advice from financial professionals can often lead to missed opportunities. It can lead to making very poor financial decisions, and seeking guidance early can help you make informed choices, set realistic goals, and ultimately secure a retirement plan that you can feel confident in, which gives you peace of mind. And you know, I happen to know a guy too, Matt.

Producer:
You you know him better than I do, but, uh. That's because it's you. Mike. Zaino. And you can get in touch with him at Money Matters with mike.com. Great stuff there though, because, you know, I mean, working with a professional like you said. We'll get into more about this coming up in just a bit. But working with a professional. A lot of people may be either intimidated by it or say, oh, it's going to cost too much money or something like that. But in especially in the long run, the benefits far outweigh any, any time spent or, you know, any, um, nerves that you have to get over because there's no reason to be nervous first of all, or any expenses on the, on the front end. Because you know what? It is so worth it in the end, because working with a financial pro like Mike is going to be beneficial to you in that you are going to be much better prepared for your financial future than you were on. If you were to just stay on the road that you were already on.

Mike Zaino:
That's that's true. And a lot of people, guys, I don't care how much money you have. Okay. When's the best time to plant a tree? Well, that was 20 years ago. So if you if you're late to the game, we could. There's a plan for that, right? If you have $10 million, guess what? There's a plan for that. And if you're somewhere in between, guess what? There's a plan for that. So whether you want to meet in person, whether you want to meet virtually over a zoom appointment, you can do that from the comfort of your home, no matter where you're listening to the show from. Just reach out and give me a call. We'll set something up.

Producer:
Yeah. That's right. And that number is 704 56015737045601573. And just in case you need a little motivation to, uh, you know, pick up that phone and make that call or go to the website Money Matters with Mike comm. We've got seven retirement statistics that will hopefully give you that motivation to help you start planning your future here. And number one, this came from something that we saw on Gobankingrates here. 54% of people just don't know their retirement needs. That's more than half, Mike. And that's that's kind of an eye opening statistic.

Mike Zaino:
It is now, I mean, if you're talking to kids in their 20s and 30s, you know, I can kind of get if if that's where a lot of the source of, of the, uh, the survey came from. But I mean, if you're in your 40s, your 50s or 60s or later and you don't know what your retirement needs are, that's an issue. I mean, that means that most people are lost. Most people are not sure how much they need to contribute. You know, when saving toward the future and tracking your progress becomes challenging when you don't have a clear goal in mind. So you absolutely need to have that smart vision for your future retirement. And there are a lot of factors that play roles in those savings needs, uh, you know, which include but are definitely not limited to things like, you know, your retirement age, like when do you plan on retiring? Not only you, but if you're married, your spouse as well. What kind of lifestyle do you actually want to live? Are you somebody who is just going to, you know, garden at home and front porch, sit and sip lemonade and watch, you know, things go by as, as as they happen on your block.

Mike Zaino:
Are you somebody that is traveling? Are you flying first class on Emirates Airlines and you're visiting Europe and Asia and South America? Because obviously those two examples require completely different capital reserves. How about the cost of living where you will live in retirement? A lot of folks like to move to warmer climates. And so we're going to talk about a little bit of that coming up in the show. Um, how about your anticipated health care needs and all the costs that are associated with making sure that your body is as healthy as it possibly can be? And then what happens when it starts to degenerate and things go wrong? So inflation is another thing because it causes so many things, everything. The cost of living to become much more expensive. So, you know, all of these things are extremely important. And for folks to not know, I mean, if you don't have a clear goal of where you're going, how are you ever going to get a plan in place to get there? So that's what we're talking about when we say that most people don't know their retirement needs and are lost without a plan.

Producer:
Yeah, I kind of look at it as like, you know, your retirement GPS a little bit. You know, you've got you get in the car and what's the first thing you do if you're going somewhere you haven't been, you put in the address of the place, you're going into the GPS. Right. So that's the very first step. You got to know where you're going in order to get there. So just, just, uh, a reminder for everybody to maybe think of it and frame it that way, no doubt.

Mike Zaino:
And even if you're going someplace that you have been plugging it into, the GPS is going to alert you of things like detours, you know, accidents, uh, you know, possible speed traps and things that might may cause you to be a little bit more fluid in your travel plans. And just like that, life itself can sometimes throw detours and speed traps and pitfalls, right? And we need to be able to be able to respond to them as opposed to reacting to them.

Producer:
Yeah, absolutely. Respond to it. And you're, you know, be able to skip around it instead of just getting caught in that big traffic jam that's going to maybe delay your retirement to get take you longer to get to that destination that you've plugged in, uh.

Mike Zaino:
Picking up what you're laying down, man.

Producer:
Thank you, thank you. I appreciate that. Sometimes it works out that way. All right. So statistic number two here is kind of an eye opener I feel like for a lot of people like is the average yearly Social Security benefit. So the average income from Social Security per year is less than $22,000. Wow.

Mike Zaino:
Yeah. I mean and that's average if you take it, um, at the average full retirement age. Okay. So when we're talking about, um, expecting to live off your monthly Social Security payments, you might be surprised that the average, again, including all social Security ages, is $1,790 a month, which, like you said, was less than $22,000 on an annual basis. And of course, that's based on 2023 data. But here's the thing, folks. So many people I talk with plan on jumping on Social Security as soon as they turn 62. And if you do that, you lose 30% of. That payout. In other words, the average at age 62 drops all the way down to now $1,253. So try living off 1200 bucks a month. It's not probably going to cover your costs, and because of the fact that it won't cover your cost, having sufficient retirement savings is crucial for your retirement success and financial security. Plus, please don't forget about all the potential changes that you know to Social Security that could negatively affect your benefit amount.

Producer:
Yeah. That's right. I mean, we're expecting and anticipating changes here in the coming years. And just to sort of shine a light on this, Mike, let the listeners know exactly kind of what's going on with Social Security and why it's such a concern right now.

Mike Zaino:
Yeah, well, I mean, number one, the national debt is currently $34.5 trillion. And that continues to grow. Okay. So last week it was $34.4 trillion. The week before that it was $34.3 trillion. So folks, that's ticking to the tune of $100 billion each and every single week. Social security is going to become insolvent by the year 2033. So what year are we in now, 2024, folks, that's nine years away. And that's according to the latest Congressional Budget Office analysis. The CBO projects that Medicare is going to be insolvent in 2030, which is just six years away. And both Democrats and Republicans agree that something has to be done. What is certain is that Social Security benefits will eventually be cut once the program's trust funds run out of money, and significantly less significant changes are made. Yeah.

Producer:
Absolutely. Right. And you know that statistic there that you mentioned with the $34.5 trillion debt that comes from US debt clock org. And I will just say if you have high blood pressure folks probably not a good website for you to visit. It's one of those like if it were in a theme park, you know, it'd be like if that big warning sign would be out front and say, if you have heart problems or high blood pressure, do not ride this ride, do right website if you have similar issues.

Mike Zaino:
Yeah. And so to address the national debt think about what you know the the government's going to have to do. Well they're likely going to have to either increase taxes and or cut benefits for the retirees and for other Americans. You know, down the road they may end up moving. I've heard them talking about moving the initial age of 62 all the way out to age 70. Okay. So things are going to happen. Uh, it have to happen, I should say, in order to combat that. And then when you talk about excessive government borrowing, um, and printing of money that can lead to things like inflation, which erodes the purchasing power of all the retirees fixed incomes and their savings. And of course, that $34.5 trillion debt and counting ticking to the tune of 100 billion a week. That's data from yesterday. Okay. Literally from yesterday. So please. All right. Please do not enter retirement without a plan for your Social Security. And like we anticipate those changes coming in the next decade. So it is critically important that you get in touch with us to learn how to maximize your own Social Security benefit based on your unique situation and needs.

Producer:
Yeah, there's so much that goes into it and so much that needs to be considered, so just reach out for that free consultation. Mike can take a look at it for you and tell you what, in his estimation, is the best plan for you going forward. Show you what that would look like for your retirement and how you can make it a success. Money matters with mike.com is the website that's Money Matters with mike.com. Or call Mike at (704) 560-1573. All right. So statistic number three here Mike is about 34% of people just haven't saved anything. That's that's a third of people just haven't saved anything at all for retirement.

Mike Zaino:
You know. And that statistic really locks in to the point that 100 million Americans, which is roughly a third of our American population, are living paycheck to paycheck. And in in a country that is as great as our nation is, that is just a sobering statistic. I mean, when a third of the country hasn't saved any money at all, and that only includes money for retirement, but that also includes an emergency fund and savings for other goals like travel and vacations on an annual basis. So in addition to causing financial struggles during retirement, having no savings to handle today's emergencies is reckless. It's quite dangerous, and it could force people to take on additional debt, which just furthers that downward spiral that they feel they can never get out of. So, you know, instead, we recommend paying yourself first by saving for retirement and also saving in an emergency fund for those unforeseen expenses every single time that you receive a paycheck. And you know, this will allow you to help pay off, uh, and provide that security, like pay off any of those emergency things that pop up. And then it just gives you what that, that, that peace of mind that, that, uh, that financial security, knowing that those things are taken care of. So a good rule of thumb is saving up at least at least three months worth of expenses. I like to have people to have somewhere between 6 and 12 months. Um, and if you can put away 50. Percent of your earnings for your future retirement savings on top of that emergency fund. That is awesome right now. So if you don't know where to start, just schedule a no obligation consultation with us. It's a $1,500 value and it's no cost to our listeners.

Producer:
Yeah, absolutely. The best thing to do there. Well, number four in our list of statistics to hopefully give some motivation to you folks listening, um, to really make a plan for your future or improve your plan if you have one already, is that around 39% of people just don't invest in stocks? And that's, you know, pretty surprising, uh, to me as well.

Mike Zaino:
Yeah. I mean, one thing that I always tell people is that over time, the stock market goes up, okay. You have to be a little bit more cautious when you're nearing the retirement red zone. And definitely when you're in retirement to not be overweighted in stocks and in equities. But, you know, back in 1929 was the Great Depression. Well then, you know, in 87 we had Black Monday. Then we had the.com bubble burst, you know, right there at the at the turn of the millennium. And then we had, uh, you know, the terrorists come into our towers and we had 2001. Then we had the financial crisis in 2008. Then we had Covid in 2020, and then we had whatever the heck that was in 2022. I don't know that it has a name yet, but I call it losing 20% of the equities, uh, value in stocks. But stocks tend to have some of the best average returns across all asset classes. And even though they do have those course corrections and dips over time, they go up. So if you're a long term investor, you absolutely need to be invested in our stock market. And some investors may not feel comfortable with that higher volatility that comes with those investments. And they choose safer, um, less profitable options instead. Look, folks, safety is really easy to find. But I've never met any millionaires who became millionaires by investing in savings account. All right. So here's a cost cutter tip for you when you're looking to choose to invest in which stocks to invest in, consider things like fee efficient options like ETFs as as compared to typical mutual funds that often contain layers and layers of fees.

Mike Zaino:
So key takeaways it's important to stay invested. It's important to protect that buying power later on in life. And investing in stocks is one of the best ways to combat inflation. And then number two, if you see value in stocks, but you're looking for less risky options as you near or age into retirement, just contact us so we can discuss options that provide market like gains without the risk of losing principal inside of the stock market. So again, if you don't want your golden years tarnished by financial stress, you're going to need to be prepared and you're going to need to have a solid financial plan. So please give me a call 704 5601573. Visit us on the web. Mike at Money Matters with mike.com. All of this is to schedule your complimentary no obligation retirement uh, consultation. Do not spend your retirement watching the ups and downs of the market. Many people like working with a licensed professional who can look out for your best interest, so you don't have to worry about what's going on in the news, whether it's locally, regionally, nationally or internationally, because you have zero control over any of that. But it all can affect the bottom dollar value of your portfolio. So in many cases, as Matt mentioned earlier, consulting with a professional will actually save you money in the long run.

Producer:
That's absolutely right. And once again the website there is Money Matters with mike.com to reach out for that free consultation. And I just wanted to highlight something that you said a minute ago, because I think it bears repeating is that, you know, investing in in the markets to protect against inflation. You know, inflation has been, um, especially what, a little over a year ago was up at like 9% year over year. Yeah, insane levels of inflation. And it's still historically just a little high now the rate of inflation I think the last update was 3.2%, um, year over year, which has come back down to earth, but it's uh, it's a lot better than 9%, but it's still not at like around 2%, which is where the Federal Reserve wants it to be. So but we've had all of this inflation over these past couple of years. But where are the markets they're at or near record highs as well. So I mean there is just an illustration of that kind of in real time as we look at where the markets are and where inflation has been. Uh, yeah, it seems to be just, uh, you know, taking a cursory glance at both of those things, uh, seems to to bear that out.

Mike Zaino:
Absolutely agree.

Producer:
Well, let's go on here to statistic number five on our list of stats to motivate you to get your retirement savings on track. Um, number five actually has to do with that because 69% of retirees or pre-retirees, I should say, think that their retirement savings are not on track. 69%. Wow.

Mike Zaino:
Well, that means that only 31% are confident in their retirement plan. And that probably tells me that 69% of those that were surveyed probably don't have, uh, somebody giving them professional financial guidance and clarity on what they have in store for them. So whether or not they know their retirement goal amount, the fact that 69% don't feel confident about their retirement savings being on track is, uh, eye opening. Okay. And that statistic is based on a 2023 Federal Reserve report that showed how retirement preparedness varied based on different demographic factors. So if you have some doubt about your retirement savings, just consider meeting with me during a no obligation consultation so that we can address any questions that you might have. Identify any possible areas for tweaking your plan, and make those recommendations on how to maximize what you've already saved for during retirement. So, Mike.

Producer:
When people reach out for a complimentary consultation, talk about some of the things that you discuss with them.

Mike Zaino:
Yeah, I mean, many people like to discuss things like balancing risk versus reward, uh, with their investments for retirement. So, so often I see people who are so scared to lose $1 that they fail to make five. And so it's about, you know, putting a little bit of money into play if accepting an acceptable amount of risk. But for an expected return, that's greater than the risk, of course, building an income plan, a lot of folks want to know, hey, how do I build an income plan and be confident in how much money I'm going to have coming in in order to meet and beat, you know, our spending plans in retirement? I'd love to have a spending plan, folks. That's a budget, right? But I call it a spending plan and then have money left over. Okay, well, what about things like establishing a personal pension so that they can enjoy the retirement income that's guaranteed for the rest of their life? Things like, you know, how to maximize their Social Security benefit checks, how to plan for Medicare. And so I just, you know, simply challenge my listeners that if you are unsure on how to best maximize your income in retirement, just give me a call, visit the website, schedule your complimentary retirement consultation. We'll review your 401 K, your 403, your TSP, your IRA. You know, our listeners can work directly with me with absolutely no obligation.

Producer:
And one way, the quickest way. If you are by your computer at the moment to get in touch with Mike is Money Matters with Mike comm or give him a call 704 5601573. Now you mentioned pensions there, Mike, in the form of a personal pension, which we'll actually talk about here in just a second. But statistic number six is actually about pensions and people's feelings on pensions. Nearly 80% of Americans feel that the nation is facing a retirement crisis due to a lack of pension options. And boy, you know, I've said it before, I'll say it again. I'm sure finding a pension is kind of like seeing a unicorn these days.

Mike Zaino:
Yeah, with less than 15% of companies in the United States. And that includes the United States government actually offering pensions. More than 3 in 4 Americans believe that pensions help lead to a more secure retirement, but they can't find them. Okay, unless you're going to work for the government or one of those 15% of companies that offer them. And the survey respondents aren't the only Americans who want pensions back. During last year's labor strikes, unions like the United Auto Workers pushed for pension plans inside of new deals that they were trying to strike. And ultimately the UAW demand was denied, suggesting that companies do not share the appetite to go back to the pension model, which is definitely considered much more expensive for the employers themselves. Okay, only a few companies are going back to offering pensions again. Ibm recently began offering pensions after shuttering its legacy pension plan for nearly 20 years, almost two decades. And they're joining the likes of John Deere as well as Coca Cola, which still offer pension plans as well. So, you know, my challenge, my question to folks is, do you know that you can actually create your own personal pension? You no longer. Need to rely on your employer to generate consistent and often increasing monthly pension payments that you can never outlive. You can do that for yourself, and I can show you how.

Producer:
Yeah, absolutely. And that actually leads us right into statistic number seven here on our list of seven stats to hopefully motivate you, the listener, to get things in order with your financial plan and your financial future. And this is that about 40% of people. So four out of ten people in this country do not consult with an advisor or a professional at all, you know, to to deal with putting a plan in place, doing all the things that we've been talking about. You know, most people just can't go it alone. You know, like, for example, I wouldn't perform surgery on myself. So I, you know, I mean, I have a very sharp kitchen knife, but I don't I don't want to remove my appendix or something, you know. That's right. It's you gotta, you know, get in touch with a professional to help make sure that everything is really and truly on track. Yeah.

Mike Zaino:
And you said you wouldn't perform surgery on yourself. I wouldn't, you know, go to the, you know, try to extract a tooth by myself. I would not try to fix my vehicle, uh, with all the computer components, you know, with, without, uh, some, some mechanical help from, uh, from a licensed master mechanic. And it amazes me how many people do try to go it alone when it comes to personal finance. So Dave Ramsey, who I don't always agree with, right, once wrote this quote, trying to save for retirement without professional help is like wandering into a haunted house, alone in the dark without a flashlight. And Dave on that one. I am going to agree with you. So if you are one of the people who are not working with a licensed financial professional, then you are at a disadvantage with everything from figuring out your retirement savings needs, learning about investment options, and just simply having your retirement questions answered. Okay, now is that time to meet with a licensed financial professional to take advantage of the current offer that we're giving to all of our listeners who tune in on a regular basis, regular consultations with a financial professional provide valuable insights and ensure that you're on track to meet those retirement goals. And many people, as you highlighted in the beginning of the show, Matt, just think that it costs way too much to work with a financial pro, all right? But we can actually help save you money as we work to protect and grow your hard earned assets. So no matter how much money you have, whether it's $10,000 or $10 million, your money is important to you. And that means it's important to me, and therefore you're going to get the exact same Mike Zaino, no matter how much you have and no matter where we meet, whether it's in my office in Charlotte, whether it's over a zoom consultation, or if you want to meet somewhere in the middle in a, in a really just non intimidating environment, like a, like a Starbucks or something like that. I have no problem doing that with you either.

Producer:
There you go over a cup of coffee. You can do this. It's a no obligation consultation as well. And of course I won't, uh, beat a dead horse too much here. But it's, as you said earlier, Mike, $1,500 value, uh, provided at no cost to our listeners. And again, you only work with Mike if it is best for you. And it's really a full consultation. It's not just skimming the surface. It's not just, oh, you need to have this aspect or that aspect. It is all aspects taken into account. Right? Mike?

Mike Zaino:
It is. I mean, we're going to look at, uh, a deep dive and see how much you're paying in fees. We can cut any unnecessary costs out of your plan. Um, whether that may be in your employer sponsored plans, it could be in your IRAs or any other retirement savings accounts. We can also help you with things like Social Security maximization and Medicare planning and determine, you know, when is the best time to start taking Social Security based on your own unique situation. We want our clients, as well as all of our listeners, to live the retirement that they have always dreamed of and that, quite frankly, they deserve. You don't want to live a just in case retirement where you're afraid to spend the money that you saved. Okay, you need to establish a solid income plan so that those paychecks turn into play checks and you can enjoy playing during your golden years.

Producer:
Absolutely. And once again, you can contact Mike via the website at Money Matters with mike.com, or call him 704 5601573704560 1573 to schedule that complimentary consultation. And, uh, you know, a lot of the listeners have really enjoyed seeing the. Various personal pension options currently available out there today, but you got a call to learn about those, to take advantage of those, and to just know what exists so that you can work with Mike to make a plan for your future. All right, Mike, so let's, um, let's keep things moving, uh, to, uh.

Mike Zaino:
What you did there.

Producer:
I know, I know, as Mike knows what's coming up. Uh, that is, uh, talking about moving, potentially relocating in retirement. We mentioned earlier a lot of people like to do that, but there are some places that you might not want to do that, uh, because it's just too expensive. I mean, and and here's the thing, like, America is a big country, right? So the average is like, if you say the average home price, for example, according to Zillow, the average home value, I should say, across the country is $342,000, almost 343,000. All right, as of a couple of weeks ago. But if you live in Hawaii, the average price of a home there is well over twice that more than $828,000. So it doesn't paint the full picture because there can be a lot of fluctuations there, like a, you know, a home in Nebraska is going to be a lot cheaper than a home in Hawaii, for example.

Mike Zaino:
So indeed.

Producer:
Let's talk about three places that are too expensive really to live, potentially for for the vast majority of listeners here. And then three places that might share similar characteristics or might be nearby, those places that people could consider in as an alternative. Right. So here we go. If you currently live in or are considering moving to one of these three states, you may want to consider a similar or nearby state to boost your budget and your quality of life. Number one expensive place to live. This is one that you probably saw coming, folks. California.

Mike Zaino:
Yes, okay. Many people who live in the Golden State, they see it as the best place in the country. Um, and I think it's a great place to visit, you know, because it's got beaches, it's got mountains, uh, the love the redwood forest and Northern California. It's got a very fertile Central Valley, and it has all the glitz and glamour of Hollywood. Like I said, I like to visit, uh, but I don't like to stay there. Other people, though, kind of see it like I do as a very overpriced, high tax state with a major homeless problem and an atmosphere that is very unfriendly to businesses. So if you fall into that latter camp, there is certainly no reason to live in California, given that it is the third most expensive state in the country, with a cost of living nearly 38% higher than the average, and housing prices 94% above national norms.

Producer:
Yeah, it's not a cheap place to hang your hat. Uh, like you said, great place to visit. Not necessarily a great place to live. If, uh, you know, money and the cost of living is at the very top of your consideration list of where you want to live in retirement, um, Hawaii is number two. I mentioned that sort of your average housing cost, for example. But overall cost of living in Hawaii also a very, you know, expensive thing.

Mike Zaino:
It is because it's clearly an outlier in the United States, given that it is a tropical island and it sits 2400 miles, uh, you know, out into sea from the mainland. Okay. It boasts very world famous destinations like Waikiki Beach, uh, as well as the Hawaii Volcanoes National Park. And then those attractions draw roughly 10 million visitors per year. One of my favorite islands is the southernmost island. It's Kauai. And just because it's not populous, right, it's it's still raw and untouched. It's where they filmed, uh, Jurassic Park, incidentally. And they also have a Grand Canyon out there that they call the Grand Canyon of the West. Um, because it's a lot farther west than our Grand Canyon. But just like California for many of its residents, consider it to be a Paradise. But it certainly costs a pretty penny to take a residence in Hawaii, costs there, run an incredible 84% above the national average, making it the most expensive state of all because everything has to be imported 2400 miles at a minimum from the mainland, you can expect to spend more than $10,000 a month just on living expenses in the Aloha State.

Producer:
Wow. And Aloha, of course, means both hello and goodbye, so you can say goodbye to that if you don't. If $10,000 a month just for living expenses. More than that, uh, doesn't sound like a good thing to you. Um, okay, so the the next one, number three. Okay, so we said is slightly misleading the name of this segment because it's talking about three states. That are too expensive to live in. So the third one not technically a state, but it's an expensive place. And it's Washington, D.C..

Mike Zaino:
Yeah. You know, the nation's capital might seem like a great place to live. I go up there multiple times a year and always have an opportunity to speak sometimes at legislative conferences on Capitol Hill. Um, and it certainly is a great place to live if you're, uh, the least bit interested in American politics. Excuse me? In American politics, uh, in history or in the cultural treasures that can be found in Washington, D.C.. But what surprises a lot of people is that Washington, D.C. is quite an expensive place to live. And like you highlighted a second ago, while technically not a state on an annual living basis, living in D.C. would cost you roughly 50% more than the national average at close to $110,000 a year. And so as the district itself is relatively small, you could easily live in the same area of the country and perhaps even commute in, um, trying at all costs to avoid the Beltway, uh, without nearly having to pay as much.

Producer:
Yeah. The good thing about the DC Metro, they're like subway system is that it does go outside the Beltway. Uh, so you can actually you can live in, you know, parts of Maryland or Virginia or whatever, being able to commute in via the train, which, uh, you know, can save you a lot of a lot of headaches. So you're not sitting out there in traffic. And trust me, as you know, Mike, I live in Atlanta, and I know something about bad traffic. So there we do. Uh, two. Two bad. Marta isn't as far reaching as the DC metro, but. Okay, so those are the three expensive states, three expensive places to live. So now we've got some alternatives. You know, these, uh, states or places that have much lower cost of living than those other states but still have a lot to offer. So really, the the mere fact that you can boost your monthly cash flow by spending less money in these states might just be enough for you to consider moving there in retirement if they, uh, if they sort of strike your fancy. Now, number one here, it's kind of like the alternative to California as we're, uh, pitching it in this segment is Nevada.

Mike Zaino:
Yeah. I mean, if you live in California, just hopping over, uh, to the next door state of Nevada might be all it takes to push your budget from the red, uh, which is negative into the black. Okay. Although costs in Nevada are still about 3.2% above the national average at $61,507 a year, total annual expenditures are nowhere close, you know, to the $92,000 a year that you'd spend if you lived in California. And when you throw in the fact that Nevada has no state tax, you might find literally find tens of thousands of extra dollars in your budget each and every year.

Producer:
And that is certainly a good thing to find in your budget every year. Um, let's go on now to the sunshine state of Florida.

Mike Zaino:
Yeah. I mean, the Sunshine State has a lot in common, actually, with Hawaii, even though those two states are on polar opposites of the United States, roughly 5000 miles apart. Both of those states enjoy tropical climates, and the beaches and the waterways play an important part in the lifestyles that they tend to offer. But if you're looking to keep more money in your pocket, uh, Florida should be the runaway choice because residents enjoy. Get this, folks, no state income taxes. Okay? And while Florida's cost of living is 2.8% above the national average, with a total annual expenditure amount of almost $69,000, it is nothing compared to Hawaii, which, like we said, is by far the most expensive state in the nation.

Producer:
Yeah that's right. I mean, it is not a cheap place. And so here we go. Go into Florida where you can find some more money in your pocket each and every month, thanks to no tax burden and all of the things that you said, at least as far as the state income taxes. Okay. So now an alternative to DC. Um, not like right next door, but fairly close. Delaware.

Mike Zaino:
Yeah. And like you said, it's not right next door. It's, you know, roughly 90 miles away. But by moving 90 miles away, you can pretty much save a huge chunk of change when it comes to your annual budget. And the reason being is that total annual expenditures in Delaware average around $70,000 a year, which is 40 grand below the cost of living in the nation's capital. And so addition to its natural beauty, Delaware has some additional advantages over DC, including a very low crime rate. You're not finding that in DC. And then get this, folks again. No. Sales tax and it has significantly more affordable housing. So, you know, if you live in any of the the expensive states, whether that was California or Hawaii or D.C., you may consider just a hop, skip and a jump away and and enjoying Nevada, Florida or Delaware as some alternative.

Producer:
Yeah, absolutely. So we like providing you with options here at Money Matters with Mike. That's that is what we do. All right. So let's, uh, move along here and, uh, Mike get a little bit of a game to play that we like to bring back every now and then. It's been a bit of a of time since we've done this. How about a little right or wrong?

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

Producer:
And this is the Social Security edition of Right or Wrong. So I will present the the scenario. It kind of works like true or False. And you can feel like feel free folks to to play right along with us here. We're just kind of like true or false, except it's right or wrong. So I'm going to say a statement and Mike is going to tell us whether that statement is right or whether it is wrong. So a lot of questions we get from listeners, and I know Mike gets from clients a lot of the time is about Social Security. So we wanted to focus on that. On this week's Right or Wrong number one here, Mike, and you'll give us the answer just momentarily, is this under current Social Security law, full retirement age is at 65, no matter when you were born. Is that right or wrong?

Mike Zaino:
Matt, I think, you know, I think all of our listeners know that is wrong. If you were born in 1960 or after, then your full retirement age is 67. But if you were born from 1943 to 1954, then your full retirement age is 66. And so if you were born somewhere in the middle between 55 and 1959, then we're going to add either two, four, six, 8 or 10 months. So the retirement age increases by two months per birth year if you were born between 55 and 59.

Producer:
Just to make it nice and confusing for everybody, that's kind of what we do. All right. So number one was wrong. Let's go on to number two here. See if we can do a little bit better. All right. It is in most cases if I take benefits before my full retirement age they will be reduced for early filing. Is that right or is that wrong?

Mike Zaino:
Matt. That is absolutely right. In fact, if you take yours at 62, which is the earliest that you can start receiving benefits unless you're disabled, if you choose that option, your benefit amount is permanently reduced by 30%. Okay. So you don't get 100% of your benefit until you reach your full retirement age. And then the reduction is based upon the number of months that you receive the benefit before reaching that full retirement age, and the exact reduction will vary depending on your specific full retirement age, which again, is based on your year of birth.

Producer:
Yeah, exactly. And so that's, uh, definitely something to keep in mind when Social Security planning. This is the reason that we do all of this is because we're educating you out there, folks, because, um, you know, it can be confusing. And so this is why you might want to actually pick up the phone call Mike 704 5601573. These are all things that he can help you out with and walk you through. All right. So number three in right or wrong is if I have a spouse and he or she passes away, I will receive both my full benefit and my deceased spouse's full benefit. Right or wrong.

Mike Zaino:
Matt, that is wrong. When one of the spouses becomes room temperature and passes away, so too does one of those social Security payments. The surviving spouse does, however, get to keep the greater of the two social security amounts, but the smaller benefit of the two is gone, and that often leaves that survivor with a loss of somewhere between 33 and 50% of the income that they were used to living off of.

Producer:
There we go. So definitely another thing to keep in mind when planning for Social Security. Timing a lot of times can be everything there when it goes to putting in your plan in place. All right. So number four, if I delay taking Social Security benefits past the age of 70, I'll continue to get delayed retirement credit increases for each year that I wait. Is that right or is that wrong?

Mike Zaino:
Matt? That is wrong as well. And unfortunately, I've seen too many people who think that they can just keep waiting and keep waiting and keep waiting. And they're working beyond age 70, as many people choose to do in today's day and age, thinking that they're still going to receive that 8% increase, which you do receive for every year that you delay taking Social Security. Um, if you were born, uh, after your fra, if you were born in 1943 or later, but waiting until you reach a 70 is going to help maximize that benefit. But there's no further benefit after age 70, so there's absolutely no reason to wait beyond age 70 because of the fact that your benefits will not increase any further.

Producer:
There you go. All right, so the last one in, right or wrong, is this one based on the government's most recent calculations, Social Security benefits could be reduced within the next ten years. Is that one right or wrong? Yeah.

Mike Zaino:
Unfortunately, Matt, that one is right. So whoever wins this year's election, the presidential election, whoever wins is going to face a Social Security trust fund that is rapidly approaching insolvency. So the program's trustees are projecting that the Old Age and Survivors Insurance Trust Fund, which, folks, if you ever look at any pay stub and you see OAC coming out of your check, that's what's going into the trust fund. But that trust fund will deplete its reserves by the year 2033, when today's 57 year old reaches the normal retirement age and today's youngest retirees turn age 72. And what does that mean? Well, for a typical dual income couple retiring in 2033, we estimate that this could actually represent an immediate $17,400 cut in current dollar annual benefits and an immediate $13,100 cut for a single income couple. So that is not insignificant. That is a huge depletion of your future money.

Producer:
Yeah. And it's like, you know, can you afford a big pay cut like that? Not many of us could. So something's got to be done. And here's the thing, Mike. And we can kind of getting toward the end here so we can kind of wrap on this thought I feel like, is that the bottom line is that you got to have a plan for no matter what happens, right? I mean, there are so many different, distinct possibilities of what could happen. And again, we don't predict the future here. We can't really predict the future here because, you know, we're human beings. But at the same time, if you have a plan where Social Security is not what you're relying on, and it's just kind of the cherry on top or the or the gravy, um, then and not the main dish, then you're golden. I mean, that that really does make your, your golden years, uh, golden and not a lump of coal.

Mike Zaino:
You know, this is true. And while my crystal ball has been broken for 53, uh, years, 50 threes, right? Um, it's been broken for 53 years. I. I can't predict the future, but I can pay attention to clues. And I think all of our listeners can pay attention to clues. And the fact that the trustees of the fund are screaming that they're going to be, you know, gone, it's going to be depleted. And by 2033, and that cuts are going to have to happen. You need to have a plan, whether that's putting in a personal pension in place or making sure that you're saving more in your, uh, stock portfolio. Whatever it is, if you go at this without a plan, then you're going to be that ship, uh, in the wind without a rudder, and you're just going to be blown wherever, you know, life takes you. And again, hope is not a strategy. So choosing things like when to take Social Security, learning things like how to put in a personal pension, all of these things can be accomplished by picking up a phone and giving me a call at (704) 560-1573, or emailing me Mike at Money Matters with mike.com or, you know, filling out a contact us page on Money Matters with mike.com. We put it all out there so that you guys have the information to arm you to make better financial decisions, right? Informed decision making is much better than just flying by the seat of your pants.

Producer:
Yeah, that is absolutely flying by the seat of your pants. Also, not a plan. Uh, that is going to do it for this time around. Mike, we have, uh, just about run out of time as I look here on the clock, on the wall. But I thank you, sir, for all of the insights and information that you bring to us each and every week. And I look forward to doing it again next time.

Mike Zaino:
Matt. Thank you again. You, uh, team me up to sound really knowledgeable and important. And heck, I like to think I am too. Um, but, you know, I say that with all humility. My goal is to just educate as many people as I possibly can so that they are better prepared for retirement. If that's you, you know how to get in contact with me. And I thank each and every single one of our listeners. Without y'all, we do not have a show. So whatever you're doing this weekend, please enjoy 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 licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704 560 1573. That's 704 five. 5601573. 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. Welcome to Nationwide's Peak ten fixed indexed annuity, designed to help provide guaranteed income for life. Peak ten offers protection against market losses, plus protection for a spouse through a joint option and an immediate 10% penalty free withdrawal. Call us now at (704) 560-1573. That's (704) 560-1573. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio. Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then tuned 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 Money Matters with mike.com.

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