Take Control of Your Finances for a Better Retirement

12.1.23: Audio automatically transcribed by Sonix

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

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

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

Mike Zaino:
What's up, what's up, what's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every single week. And today we are absolutely bringing the heat again. On today's show, we're going to teach you how to take control of your money and retire with confidence. And we'll dive a little deeper as far as crafting your financial future with income in mind. 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:
Hey there Mike, I am doing great sir. It is a great weekend. And, uh, boy, I'm I'm looking forward to it. It's been kind of a crazy week. Weeks after holidays. I feel like are always kind of crazy because everybody's playing catch up. Uh, but now this is this is going to be a good weekend. I can feel it in my bones.

Mike Zaino:
I can feel it in the bones, too. I've got a hat on. For those of you who can't see me, my Georgia Bulldogs are playing the, uh, the dreaded Alabama Crimson Tide tonight in Atlanta, Georgia at the Mercedes Dome. And I'm hoping that, uh, we just continue doing what we've been doing for the last three years, and that's just winning games. So I'm I'm super excited about that. And, uh, you know, shout out to all my bulldogs out there.

Producer:
Absolutely. I'll refrain from barking or, you know, saying, you know, too much, too much here. But yeah. No, it's, uh, it'll be great. There'll be a lot of fun. And here in Atlanta, where I am, it's going to be really hectic. And a lot of people on the roads, a lot of people on Marta trying to get there, too. So that'll be a little bit, a little bit crazy adding to the craziness. Um, but yeah, a lot of great stuff to get to as well as, as much as I mean, we could probably talk football the next hour, but we're going to talk money because it is Money Matters with Mike after all. Uh, a lot of great stuff to get to. Of course, folks wanted to, to mention and remind you that if you have not subscribed to the podcast, please do that. We would love it if you would send our subscriber numbers through the roof. Uh, and you can do that one person at a time, one subscriber at a time, and spread the word about it. Anywhere you get your podcast, just go and search for Money Matters with Mike there, um, on all of the major providers and some not so major ones too. Um, you can also go to the website MoneyMattersWithMike.com. That's MoneyMattersWithMike.com. And you can go there. Reach out to Mike. Uh, schedule a free consultation. You can see the past episodes of the show. Um, and uh, you know, download those as well for playback later on, all that kind of thing. Try to make it easy for you and see video highlights, maybe even see Mike and his, uh, in his dogs, uh, cap there, uh, on our YouTube channel as well. Just search Money Matters with Mike on YouTube or reach out via Facebook. We we got options for you people.

Mike Zaino:
Yeah. If you can't find us, you're not looking. That's for sure.

Producer:
That's that's right. Absolutely. So and don't hesitate to use any of those methods to reach out. Uh, because, you know, Mike loves helping our listeners here. Uh, and we would love it if you would just reach out. And you can also do it the old fashioned way. By the way, that's, uh, picking up the phone and giving Mike Well, Mike, I can't believe that we are, you know, less than a month away from the end of the year. Now, it's slightly insane. Um, but we have some important reminders before the end of the year gets here. Uh, to share with our listeners one of those as we start off with these, uh, we've been we've been hammering this home. So if you haven't done it yet and if you if you're a regular listener to the show and you haven't done this, shame on you because we've been telling you about it. It is almost the end. Less than a week to go now in Medicare's annual enrollment period.

Mike Zaino:
Yeah, this is the last week. So if you have, uh, placed this in the drawer of procrastination, it is time to get it out and take some action. Because by reevaluating your Medicare plan or plans, if you're in a spousal situation each and every single year, you're might find out that you can actually save money on some of those Medicare expenses. And, you know, this year especially, who doesn't want to save some money. And we have found that very savvy retirees do a Medicare check, uh, as far as their coverage each and every single year, just in case they have the opportunity to save some extra money in the following year. And again, going into the holidays, who doesn't want to save some extra money? So please let us know if you have any questions whatsoever about Medicare. You can visit our website, or you can give me a call at (704) 560-1573.

Producer:
Save money where you can. Absolutely. And that's a great place to start is with your Medicare coverage. Also, be careful this holiday season and avoid Medicare scams. I mean, you know, we're in kind of the thick of both of those things, Medicare season and the holiday season. So the scammers boy they're going to be out and about. Mike.

Mike Zaino:
Yeah, they they are going to be out and about. And so you need to be hyper vigilant. Just be really aware of any unsolicited contacts. If somebody just reaches out out of the blue, I don't care if it's a phone call, if it's an email, uh, a door to door visit. And they're offering any type of Medicare related services, just be vigilant and make sure maybe while you have them on whatever you have them on, do a quick Google search on who they are and what they're talking about, just to make sure they're legitimate. And then whatever you do, please make sure to protect your Medicare card, okay? You also don't want to share that number with anybody other than your health care providers, because it is tied to you and your Social Security number. So make sure that you just stay vigilant. And we're not only talking about with Medicare, but this is the holiday season, and there are people who will just try to take advantage of seniors especially. Okay, my mom sent me a TikTok, which really surprised me moms on TikTok. But it was about this judge like, so we're talking about a very, very well educated individual who was, um, called on the phone and by an artificial intelligence, uh, you know, scammer pretending to be his, uh, grandson. And so, you know, claiming that he'd just hit, gotten in an accident and hit a pregnant woman. And, I mean, I was actually my jaw, you know, jaw hit the floor because the way he was describing it, there's literally no way that he did not know that was his grandson until he contacted his daughter. And then his daughter texted his grandson, and then the grandson texted him and said, dude, I'm fine, you know? So you have to really, really be vigilant these days when it comes to anything that just seems out of the ordinary. Yeah.

Producer:
Absolutely right. The whole AI thing just makes it even more confusing and scary, quite frankly, when they can do stuff like that. Absolutely.

Mike Zaino:
I mean, it's it's it's insane. Terminator is is is becoming reality.

Producer:
It's very true and unfortunate at the same time. Um, also speaking of unfortunate, um, as we near the end of the year reminder, if you have a retirement account that is required for you to take a distribution before the end of the year, so required minimum distribution, right? Explain exactly what that is. Uh, Mike, for for listeners who this might have snuck up on them at the end of the year and why they need to be so cognizant of it.

Mike Zaino:
Yeah. So the IRS, they say not us, but they say, um, if you have ever worked for an employer that had an employer sponsored plan that was tax deferred, like a 401 K or a 403 B or a thrift savings plan? Um, or if you're self-employed and you put together a Sep or a self-directed IRA, or if you just opened up your own IRAs, anything where you have tax deferred, that money, okay. At the end of every year, once you become age eligible. And that age as of this year is age 73, that was changed by the Secure act 2.0 that went into effect at the beginning of this year. Um, missing that deadline of having to take minimum distributions can be very detrimental to your wallet because the penalty has been reduced by half, but it is still the largest weapon inside of the IRS's arsenal, where they will tax you an additional 25. On the amount that you did not take. So we do this proactively for all of our clients just to make sure that we're helping them plan any annual distributions in an efficient manner before it is too late. So don't forget those distributions are taxable. That's the whole reason that they're requiring you to do them. And speaking of taxes.

Producer:
Oh goodness. Uh, yes. New income tax brackets going into effect this coming year. As we mentioned, the 2023 almost behind us now, 2024 just around the corner. And, uh, the federal income tax code, uh, is, is changing a bit to adjust the rates for inflation. Right. So the rates that are currently taxed are, uh, seven of them, right. 10%. 1222 2432 35 and 37%. Each of those rates applies to a specific range of taxable income. Now, we're not going to go through all seven here. Uh, but Mike, maybe for the most common ones, maybe kind of the ones in the middle, let our listeners know, uh, what is going to be the effect there.

Mike Zaino:
Yeah. So so first thing, I want to just let everybody know we're not certified public accountants. Right? This is not tax advice, but we do know when to inform our listeners on some positive things. And this is actually a positive. So you know, a lot of folks don't understand how the taxes work. And they just think, hey, if I'm at the say 24% tax bracket, that all of my income is taxed at 24%, and that is not true. It's graduated. It's a stepped up process. Right. But so, you know, talking about the most common, we'll start at 22% where now if you're a single filer you fall into that tax bracket. If you make $47,150 by yourself, okay. And it doubles to $94,300 for joint filers. So all your income if you're married up to 94.3, uh, is going to be taxed at 10%, 12% and then 22%. Okay. And then if you make more than 94,300 if you're married or more than $100,525 if you are single, then you are going to jump to the 24% tax bracket there, which again for a single filer is $100,525. And then it doubles. If you're, uh, in a joint filing situation to $201,050. So that's a little bit good news, because while the tax brackets themselves, as far as the percentages stayed the same, the amount of money that you could make in each of those brackets expanded, uh, roughly 7%. So, um, that is huge right there for, uh, taxpayers going into 2024.

Producer:
Yeah. And a lot of people, you know, get confused about paying taxes in retirement, of course. I mean, you've been employed your your whole life. Most of us have, uh, a job where we get a W-2, the employer takes out taxes off the top before we get our paycheck, take out payroll taxes, income taxes and all of those things. And it's all kind of taken care of, at least on a a week to week basis. We have to worry about filing once a year and whether we paid too much or not enough and, and all of that stuff, which is why we all hate April 15th. But, um, you know, a lot of people, since you're kind of, in a lot of cases, going it alone in retirement, you think, okay, this is just really super confusing, but there are some ways to kind of, you know, make your tax burden less in retirement, of course. And that's one of the goals here of this show, is to to help you learn some of those ways that you can do that. Um, and it doesn't have to be quite as maybe complicated as, as you think that it is.

Mike Zaino:
No, it definitely doesn't. And you hit the nail on the head when you say that taxes and retirement are often much more complex than they were when you were working, because when you're working, you get a W-2. For most people out there. Now, some of you may be 1099 workers and responsible for paying for your own taxes. And if that's you and you're comfortable with that, then great. But most people don't know anything about 1099 or how to account for them when doing tax planning. Well guess what? When you're retired and you start drawing down off of a lot of your investment accounts, you're going to get 1099 for those and you're going to have a lot of questions, okay. So give us a call with your questions. You might be a candidate, uh, for somebody to do what is known as a Roth conversion, where we're taking a portion of your money that is taxable, we're going ahead and paying the taxes, keeping you under the next tax bracket threshold so that you're paying, you know, the least amount of tax possible and then convert that over. Into a Roth to where it grows tax free for the rest of its life. So if anybody is interested in deleting future taxes that you would have to be paying during a 30 plus year retirement, you can reach out at 704 5601573. Visit us on the website. Money Matters with Mike comm or heck, send me an email. Mike at Money Matters with Mike comm.

Producer:
Yeah, all great things to do. And, uh, those are the ways to reach out to do them. Uh, we got plenty more to come up with. Uh, here on today's show, we have a bit of an inflation demonstration, uh, to get to in just a few minutes. And this is, you know, as you put up your Christmas tree this year, if you are like me and you have an artificial tree, you are counting your lucky stars that you are not having to pay for a real tree because those prices are really going up. And we'll talk about that here momentarily. Also, a bit of a market update. We've got kind of a roller coaster ride, uh, as Mike described it before we started, uh, the show today, uh, some good news, some bad news on the latest economic reports here. Um, sequence of returns risk. It sounds like a very wonky sort of a thing that, uh, you know, like. Oh, well, you know, I don't it's not anything that I have to worry about. It sounds like some sort of Wall Street kind of worm or something, which, you know, a lot of people on Wall Street and who work in the financial sector will worry about sequence of returns risk, obviously, but we are going to explain it to you in terms that you can understand and why you need to worry about it. That is also coming up here on the show and much, much more. First, though, let's kick things off in the next segment of the show with our quote of the week.

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

Producer:
And these words of wisdom this time around come from Dave Ramsey, who is, of course, a radio guy himself. He is also a nationally syndicated radio host, I should say, and a best selling author of quite a few books, I think, these days. But Dave said this once, quote, you must gain control over your money, or the lack of it will forever control you. Now, Mike, I got to say, there's some things that I vehemently disagree with Dave Ramsey on there. If you, you know, he's completely against annuities and things like that. And I just think he's misguided on that. But the these words, when he when he gets it right, he really gets it right. And this is very, very true.

Mike Zaino:
Yeah. I mean, and I agree with exactly what you just said is, you know, there are a lot of things that Dave Ramsey said that honestly, I think will keep you broke up and keep you in that perpetual wheel. But yeah, this does resonate okay. And that's the reason that we do the show to begin with is, is to bring the information every week. That is relative information. Information that you can take and not let it just come in one ear and go out the other. But information that you can apply to your everyday life and change, alter the course, alter your trajectory as far as your retirement is concerned.

Producer:
Hungry for something to chew on here? Some meat on the bone.

Mike Zaino:
One of those things that I found out about, I guess, about six weeks now is, is this, uh, this rewards debit card. It's called the transact card. And we've spoken about it several times, but this is going to revolutionize the way that banking is done, kind of in the same way that Amazon revolutionized retail and Netflix revolutionized. Um, you know, movie watching and Uber revolutionized the cabbing industry. This card, every time you use it, instead of 1 to 5% cash back or points or rewards or whatever it is that you're getting from your current card, you actually receive dollar for dollar reward. So if you spend $70 at your, you know, at the gas pump, you're going to get $70 to then get to spend again in their online ecosystem. If you spend $125 for groceries at the grocery store, you're going to get another $125 to then spend again in their online ecosystem. And people might say, well, what is their online ecosystem? It's being developed, but it's being also designed to compete with the likes of Amazon and Wayfair. And so you're going to have everyday items from dry goods at the grocery stores to clothing to sporting goods to jewelry. There's some luxury items. There's, uh, pretty much anything you can think of. Diapers are in there. And the ability for our listeners, whether our listeners are young and having to deal with diapers or their grandparents and having to deal with diapers or they're living on fixed incomes, this just gives them an opportunity to stretch their dollars further. And again, that's one of the things that we want to teach and offer our listeners are different ways to be able to do that.

Mike Zaino:
And so if you don't know about this card or if you haven't really heard that much about this card, please reach out to me directly and I will tell you about it. (704) 560-1573 if you want to send me an email and just say, hey, send me some information about this card that you're talking about. My email is Mike at Money Matters with Mike comm. And I will send you all the information that you need because especially coming into the holidays, um, man, people just like to save money. I mean, and I can my wife's not here, so I'm going to tell this story, okay? I went to Williams-Sonoma to go buy her Christmas gifts, and and I was about to pay, and I said, well, let me just check the transact card app. And lo and behold, Williams-Sonoma was on there. So I put the I put the money on a gift card and use the gift card to purchase her gift. But then guess what? I got the same amount of money that I just spent on her gift to then go spend again. And and let me tell you, it was a significant amount of money. So I'm excited about being able to do stuff like that and share stuff like that with our listeners. So again, 704 5601573 or reach out via email. Mike at Money Matters with Mike comm and I will get you some information about that card.

Producer:
Yeah, that's, uh, and that's a great thing to do. And, you know, just, uh, full disclosure here, Mike, talk me into it. So, uh. There we go. They didn't didn't take much talking actually, because it does, you know, sounds like a great thing and is, uh, so far, so. Yeah, that's, um, you know, not not necessarily an endorsement on my part, but I will say that I am. What was the time? Not only the hair club president, I'm also a client. But I may not be the president, but I am a client now.

Mike Zaino:
And you're not the only one, Matt. There are. There are over 100,000 transact card members, uh, just since their pre-launch there in a soft launch right now. But they are adding, uh, 10,000 different products each and every single week to their online ecosystem. So by the time a year or two years goes by, I mean, this is going to be absolutely incredible. And I didn't even mention this. They they you can use it for travel. So if you want to go, uh, you know, that's one of the things, especially over the past three years, that not a lot of people have been able to do with the pandemic and with the inflation, uh, running rampant the way it has been. But now you can save anywhere from 30 to 65% off of hotels, all inclusive resorts, private homes. Airbnb is linking up with these folks. I mean, so there is some major, major, major backing and firepower with the card. And, you know, I don't get this excited about a lot of things, but I really do think that this has the power to affect a lot of people for the positive.

Producer:
Yeah, and that is definitely the hope. Of course, folks, if you are interested in it, once again, go to Money Matters with Mike comm or go on your phone. Just pick it up and dial it like you know, like you're supposed to do because it's a phone. It's not just a texting device, it's a phone 704 56015737045601573.

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

Producer:
Well, as we get closer to the end of the year, we are, of course, getting closer to Christmas. And yet people are putting up their decorations, if you haven't already. Um, and some people kind of wait until sort of the week before kind of deal. We, you know, Thanksgiving basically is when it all goes up at my place. That's just the way I was brought up. Um, but if you are the kind of person or kind of family who puts up a real tree, you're getting some sticker shock this year.

Mike Zaino:
Mike, you are, according to the National, uh, and American Christmas Tree Association. Yes. There's an association called that the National and American Christmas Tree Association. The average price of a Christmas tree is up 10% more than last year, and trees are averaging between 80 and $100 this season. Now, Matt, I you know, we were sharing before the show. I remember that as a child. You know, when I was in high school, sometimes my mom would say, hey, go out and get Christmas tree, you know, for and I think maybe we spent like 15 to 20, $25 if we got a a really tall and bougie Christmas tree. The fact that there are over $100 now is nuts. So to me, the association actually says that artificial Christmas trees are going to break the bank even more than real trees. And those price tags across the board are ranging from a low of about $85, all the way up to $1,000 or more.

Producer:
And that's kind of insane. Although you will, you know, that one is going to be a one time investment last you several years, uh, rather than going out and buying a new one each and every year. That's why I'm glad you know that I have an artificial tree. It was a one time investment. It's pre-lit. It's great. I, you know, we pop it up once a year, take it down, put it away again in its box, and then next, the next time the season rolls around, get it back out. Um, but yeah, it's, you know, even no matter what you're doing, uh, the real or the fake, uh, you're going to be paying more and, and one of the reasons, you know, inflation overall is one of the big reasons, of course, for the, uh, real trees to be more expensive, but also it actually goes back several years as well because they, you know, it's kind of it's kind of weird the way that the whole thing works, the trees that are now, um, old enough and big enough to be cut down and, and put in your home were planted during an economic downturn over ten years ago. So it was, you know, that that was the kind of base it on the level of demand that year. And so then they plant that many trees. And so they didn't plant a lot those years, uh, about, you know, a decade or so ago because there was there wasn't that much demand. And so there aren't that many trees to go around. This has been happening for a few years now. Weren't that many trees to go around. And so that is why laws of supply and demand, they're also more expensive. But of course the overall inflation picture leading to it as well.

Mike Zaino:
Yeah no doubt. In fact, we just broke down and bought, uh, a different artificial tree because one of the things that I hate doing is, is I can't believe I'm gonna say this sound like Ebenezer Scrooge. I can't stand decorating for Christmas. I love when the house is decorated for Christmas, but I can't stand doing it. And so my wife and I, we kind of made a deal several years ago. Thank Jesus. Um, that I just got to set it up, and then she'll take care of decorating all the rest of the stuff. I got to get it down out, uh, you know, out of the attic and and set it up. And then that is my, uh, extent. But we had to break down because one of the things that drove me nuts was when the lights don't work right there, you have a certain strand of lights that that didn't work. And I even brought this, this special tool that would identify and supposedly put like a wedge and bridge the gap in it. And that worked for like 1 or 2 seasons. And then this year it didn't. So we got a new one.

Producer:
You're a regular Charles Griswold, uh, there, uh, you know, with your, uh, with your Christmas decorations and lights and stuff, it sounds like. No, it's it's, uh, it's a great season, but, yeah, I'm the most annoying part is hanging the ornaments on the tree. I find that, you know, I sort of look forward to it for about the, you know, and then about the first, like, couple of minutes, I'm having fun. And then I'm like, it just wears me down because I'm like, oh, God, I still got all this to do.

Producer:
Yeah.

Mike Zaino:
I'm just I'm just thankful that that my daughters helped my wife because that that lets me off the hook and I can go watch football.

Producer:
Well, there you go. And and that, you know, priorities. Right?

Mike Zaino:
Well, I mean, because we're always doing it on Thanksgiving weekend, which, you know, there's a lot of good football on typically.

Producer:
So yeah.

Producer:
Yeah yeah. No it's I don't I do not blame you at all uh for that. Um but you're not, you're only kind of half Ebenezer Scrooge because, you know, you don't like the decorating part, but you like it when it's done, so.

Mike Zaino:
There you go. I love when it's done, you know, and then when it gets taken down. Found in, uh. Typically we leave it up till right after New Year's. Um, because my birthday is on the fifth and I don't really want Christmas and my birthday kind of merging together, but, you know, once it's gone, it's it kind of looks vacant. You know, we're wondering, like, wow. Um, so I do miss it. So I'm not I'm not definite, you know, definitely not Ebenezer Scrooge. And, you know, we actually have multiple trees. And, you know, that was another part of that poll found that, uh, despite 78% of consumers expressing concerns over inflation, 94% of consumers said that they plan on displaying at least one Christmas tree in their homes this holiday season. And so, you know, I could raise my hand. We're guilty. We have multiple trees. And, uh, my my wife, she does a phenomenal job setting them all up.

Producer:
There you go. And you're very thankful for that. I know that happens on Thanksgiving weekend. So that's one more thing for you to be thankful for.

Producer:
Absolutely.

Producer:
Well, speaking of the holidays and, uh, the, the, uh, you know, Christmas season and, uh, the other holidays, the winter holidays, of course, getting underway here, um, Black Friday shopping, uh, just happens, uh, the day after Thanksgiving, of course. And in our market update this week, we're looking at the numbers. And it did provide some, uh, stimulant stimulation, a stimulant to the economy. Um, so, so there's also some bad news in the latest, uh, numbers that are out on the economy. We're going to touch on those in a minute. So we were going to give you the good news first. And that is, uh, about this Black Friday shopping. But yeah, it was, uh, a record, uh, week or weekend or, I guess, day, but it really encompasses many more than one days. But they still just call it Black Friday.

Mike Zaino:
I mean, people are doing Black Friday on the Monday prior to now, I know.

Producer:
I started getting notifications on my phone that literally previous Monday, and I was like, it's only Monday, people. Um, but Black Friday shopping really did hit a record this year. Mike. So that's that's the good news.

Mike Zaino:
Yeah. I mean 9.8 billion with a B and that's an online sales only right. So that's up 7.5% from a year ago. And that spending bump reflects consumers who were just looking to take advantage of of those big deal days. And they find it a lot easier. Let's face it, instead of having to I remember as a, as a, as a young adult, having to fight all of the crowds and people getting to stores, literally lining up at like 3:00 in the morning and camping out at big box stores so they could go in there and get be one of the first 100 people that got, you know, uh, a $2,000 television for like 20 bucks. I'm, you know, something like that, right? But, you know, now people just stay at home and they can compare multiple stores and the same item at multiple places online and sees the biggest discounts. And so not only is it Black Friday, but the following Monday is cyber Monday. And and those sales are likely going to, you know, be taken advantage of this past Monday obviously. But there you're going to start seeing them slowly taper off through the rest of the holiday season as retailers actually trim their discounts, because when they start running out of things, that's the supply and the demand goes higher. They can charge more for that. You know, particular product.

Producer:
Yeah.

Producer:
As always seems to happen, uh, around the holidays, the closer you get to the holidays, the fewer the sales, you see. And, uh, that is definitely bearing, uh, bearing out this time around. So a lot of great news there as far as holiday shopping goes. Really, really good stuff. People are spending money. Um, but the bad news is, you know, are they getting overextended? Uh, because car payment defaults have hit a 29 year high, uh, as borrowing costs surge. And, I mean, that's got to do with the high interest rates, um, because, you know, I mean, I, uh, a few years ago got luckily, uh, before inflation started really rearing its ugly head here, uh, got my car and got a really good interest rate on that loan, which would be a completely different story. If I were to buy my car today.

Mike Zaino:
It definitely would be. I mean, the defaults on auto loans, they're at levels that haven't been seen literally in nearly 30 years. We're talking three decades. And the reason why is those high borrowing costs, they're just they're just threatening to price many Americans simply out of the market. And the percentage of subprime auto borrowers that are at least two months or 60 days past due on their loan just in September, that rose by 6.11%, which was up from a previous high of 5.93%. And that's according to Bloomberg. So should the feds keep rate, uh, the rates higher for. For longer in its quest to bring that stubbornly high inflation back down to that 2 to 3% range. Um, defaults on auto payments are likely to persist. And then, to make matters worse, Americans are also defaulting on their credit card loans, with those delinquencies reaching 3.6% so far this year. And that's according to the credit agency Equifax.

Producer:
Yeah, and.

Producer:
Not good to see those numbers. Um, you know, it's good that of course people are spending money and that stimulates the economy, as we said during our our good news half of this segment. But that bad news is, you know, people could be very well. And it looks like a lot are extending themselves too far, overextending themselves and just getting into some financial trouble because of that. Because, you know, I mean, it's it's easy. And in my young adulthood, I really had this problem where I would, um, you know, have have this sort of twisted vision of what a credit card actually is. And, and it's like money. Exactly. You get that, you get that piece of plastic in the mail and you're, oh my gosh, I'm going to go out here, I'm going to spend all this money. And it feels so great. Yeah, it may feel great in the moment. Then the bill comes at the end of the month and uh, it doesn't feel so great at that point in time. And then the interest rate, uh, just compounds and compounds on top of what you already owe. And it's not fun.

Mike Zaino:
No it's not. And, you know, I, I don't not mind credit card use, I use them all the time. Um, but I make sure that I pay them off at the end of every month. Why? So that I'm not carrying any interest. Because and I've said this before, if you can't afford to pay off your credit cards each and every single month, or at least the statement balance, um, you can't afford what you're buying. I don't know how else to put it. You cannot afford to buy what you're buying if you can't afford to pay it off at the end of the month. And that's how you get yourself into trouble. And that's how you go down that rabbit hole, that never ending downward spiral, until you wake up and realize that you can't do this anymore.

Producer:
Yeah, it's very true. You don't want to learn that lesson the hard way. So listen to Mike Zaino when he speaks about this. All right, folks, um, so.

Mike Zaino:
From experience.

Producer:
There you go.

Producer:
As am I, um. And. Yes. So, so listen, listen, listen, uh, about that, uh, once again, folks, Money Matters with Mike comm is the website. Go there for any questions about anything you hear on the show? 704 5601573704560 1573. That is the phone number. All right. So, you know, at the beginning of the show I teased something called sequence of returns risk. Now before your eyes glaze over and you think I don't know what that is and I'm never going to know what that is. It is something that you should be concerned about and you should know what it is. And we're about to tell you why. Or at least Mike's about to tell you why. So. So, Mike, first of all, uh, just get down to the to the nitty gritty, bare bones of it here. What is sequence of returns risk.

Mike Zaino:
So secrets of returns risk is going to impact pre-retirees and retirees. People that are in the retirement red zone especially are, you know, subjected to this particular sequence of returns. And what we're talking about is the impact of the order in which your investment returns occur, particularly during those early years of retirement, when you're minimizing your contributions and you start making regular withdrawals. So so in other words, when you switch from the accumulation phase over to the decumulation phase or the, you know, preservation and distribution phase. And so if you think about this, you know, if we look at somebody who would have retired in 2007 at the height of the market, and then the market just got pounded due to the financial crisis in 2008, 2009, 2010, three consecutive years of losing money, their money would never last as long as somebody who retired in 2000 and at the end of 2010 and then saw a ten year bull run where every single year they're making more money. And so, you know, to kind of put this into perspective because you're not contributing any longer or you're slowing down and then stop once you retire to your retirement accounts, when you start drawing down on those retirement accounts, if you were to lose 20%, which happens all the time in the market, you have to make 25% just to get back to. Even if you lose 30%, you have to make 43% just to get by. Act to. Even if you lose, you know, 40%. Well guess what? You got to gain 67%. Now, when's the last time you heard of a 67% market return? They just don't happen that often. And God forbid we have another cataclysmic event like 2008 where the market loses 50%. You have to double your money, you have to gain 100%, folks. And that is just to get back to where you started. So when you take a loss in the stock market, the gain that is required for that stock price to recover is much, much higher.

Producer:
Yeah. And so that's why folks, you should really be concerned about sequence of returns risk. It's kind of a fancy or wonky sounding name, but it's something that really does, uh, make a huge difference in your retirement, uh, in those retirement years and could, you know, potentially wreck your retirement. Uh, if you are not someone who has a plan going in and there are ways to plan ahead and to protect yourself from that sequence of returns risk. Talk about that, Mike.

Mike Zaino:
Yeah. So, I mean, the important thing to understand is this the closer you are to your retirement, the less time that you have to make up for any investment losses. Okay? And that makes the need to place protection around your savings even that much more important. So ask yourself the question, how much of my retirement savings am I willing to risk? All right. Another way that I have people ask that question is, you know, come hell or high water, what is the amount that you're not willing to drop below? Okay. Uh, I think that you could look at it either way. How much am I willing to risk and how much do I definitely don't want to drop below? So, you know, I guess there are some steps you can take. And the first one would be to know what your sustainable withdrawal rate is like. In other words, how much can you draw down that is going to allow you to never run out of money? And so, you know, a great rule of thumb is the 4% rule. Well, if you're retiring and you're, you know, late 60s or 70s, then yeah, I think a 4% rule might be okay. But if you start retiring in your late 50s or early 60s, you need that money to potentially last you another 30 to 40 years.

Mike Zaino:
Then the 4% rule might not work in your case. So we suggest consulting with a retirement specialist, and I happen to know a good one. Okay. Who can design a retirement income plan that fits your needs? That's this first step is to know your sustainable withdrawal rate. The second step would be to establish what is known as a personal pension, so that you can create another source of guaranteed monthly income that will last you for the rest of your life, no matter how long you live. Okay. And so, to further improve the certainty in retirement, you can strengthen your income plan by investing a portion of your portfolio inside of what is known as a fixed indexed annuity, establishing the personal pension, and generating a lifetime of income that can't. All right. It's impossible for it to be outlived. And those personal pensions that are created with feas, they provide you with the protection from market volatility. So you participate in the upside of the market, but you never participate in any of the downside market volatility because your money is not directly invested inside the market. Therefore, when the market goes up, you get to participate in the gains.

Mike Zaino:
But when the market goes down or God forbid, crashes, your money is 100% protected. And that's what makes the personal pensions a very attractive option for moderate to conservative investors, which most of us tend to be as we age out of the workforce, um, who are looking for retirement income, they're looking for safety, and they're looking for the ability to outpace inflation by participating in those market linked gains. So that's the second step. And then I guess the third and final step would be please, please, please do not put off retirement planning. And even if you have a plan in place, get a second opinion, okay. According to a recent survey, half of Americans half are do it yourselfers when it comes to retirement, which could lead to overlooking some very critical planning essentials. So if retirees could do things over, we're talking about people who are already retired. 40% of them say that they would have started planning earlier and would have started working with the financial professional, because doing so will make all the difference if you want to be on the right. Track and avoid costly mistakes and surprises inside of your retirement.

Producer:
Yeah, that's absolutely you don't want to be surprised later on. You want to plan ahead. So you minimize those surprises. And when those surprises do come, then you are prepared for them.

Mike Zaino:
And it's one of the things I say, look, do you want your future self to kiss you? Or do you want your future self to kick you because you didn't do what you should have done in order to prepare for your eventually going to.

Producer:
Be, yeah.

Producer:
Don't get kicked. Uh, that is that's pretty much the theme of this part of the show. And and if you don't want to get kicked, uh, folks, you probably want to give Mike Zaino a call or go to Money Matters with Mike comm. Uh, that number, by the way, if you want to give him a call, is (704) 560-1573. Um, so, Mike, if people do that, if they go to, uh, the, the website, if they go to, uh, you know, pick up their phone, give you a call. A lot of people have reservations about doing that. I feel like because they seem to be intimidated by, um, you know, speaking with a financial professional, it's just something people don't like talking about money with their their spouses, certainly. And they're like, okay, I'm going to call up some stranger, like some guy on the radio or podcast that I've listened to. And you know, that, I don't know, I, I think that those reservations are understandable in a lot of cases, but I think in the end, unfounded. Um, so talk to people about what it's like to work with you, because I think that that can sort of allay some of those fears.

Mike Zaino:
Yeah, I think so too. I think the first step, though, okay, the first step is admitting you have a problem, right? You know, if I have a breakdown with my vehicle, I don't know anything about how to fix a car. I'm going to take it to a mechanic if one of my teeth cracks, you know? Guess what? I can't fix my own tooth. I'm going to go to a dentist. If my heart is not working properly, I'm going to go see a cardiologist. Why do I go to see those professionals? Well, they are very proficient and educated in what they do in their area of expertise. So, you know, a lot of people are intimidated, uh, and nervous and anxious about meeting with a financial professional. But I do my best to ease those concerns, um, because I've recognized the fact that, you know, I know what I know, but I know that you probably don't know what I know, at least to the degree. The degree in which I know it. So, you know, I'll start at by asking you what your retirement looks like. What does it mean for you to have a successful retirement? What are you doing? Who are you doing it with? You know, what are you looking to accomplish? What are your goals? What are your objectives, and how do you plan to create income each and every single month.

Mike Zaino:
So, you know, if you're somebody out there listening to the show and you don't have a smart vision for your future retirement, the holidays are a fun, nominal time to really just sit down with your spouse, with your family, really talk about what it is that you want your future retirement to look like. And that first step is in planning a successful retirement is deciding, you know, what that dream looks like to you. And so once you pick up a phone or you reach out on the web, uh, or you email me, however, you're going to get in contact with me, um, we're going to have a consultation. The first one is, is is going to be just what I said, you know, kind of a discovery call. But then the actual consultation, we get to dive deep. Right. And this again is at no cost to any of our listeners. There is no obligation. You will only end up working with me and me working with you, if it makes sense for both of us. Okay. But I'll analyze your entire financial situation, not just, you know, what you bring home, but if you're married, what your spouse brings home, which you've got going out and expenses, any other sources of income or investments that you have, we'll look at it all and we'll try to figure out if you're paying any unnecessary fees.

Mike Zaino:
Why would we do that? Well, if we can cut out fees, then that can save you money. That's found money that we can then deploy elsewhere. And so any of your, uh, retirement accounts, your savings accounts, your IRAs, your 401 s, your thrift savings plans, we can look at those. And, you know, if you're of age, where you're thinking about drawing Social Security and you haven't made that decision yet, there's a lot that goes into that decision. And so we can help you with Social Security maximization planning. We can help you with Medicare planning. Just remember, again, you have less than one week left to, you know, look at your plans during the annual enrollment period. Bottom line, folks, is we're going to compare your situation to what's possible if you come work with us, okay. And I don't take it lightly, um, when when it comes to your money, because I realize that it's important to you. And if it's important to you folks, it's important to me.

Producer:
Yeah. And that's the kind of person that you should want to work with. Somebody who actually cares about your situation. And, uh, you're not just a number or, you know, an account number or, you know, somebody who, uh, they may meet with once a once a year or once in a blue moon. Uh, just go to MoneyMattersWithMike.com and get that free consultation. You can sign up for one. Schedule it, uh, get in touch with Mike. Do that. All right. There on the website. Go to, uh, Money Matters with Mike comm once again or call the number 704 5601573. That's 704 5601573. And I'm sure, Mike, that a lot of the questions that you get, uh, when people call you and get that consultation and all of that there, you hear a lot of the same things a lot of times, I'm sure, because there are common questions that. People have. But there are also some questions that you will have as you were kind of just alluding to there for the listener, for the, uh, you know, prospective new client as well when they, um, speak to you. Um, some of the questions that, uh, you know, you might ask are something that that we can kind of go will go over here rather, uh, over these next few minutes. And I think one of them is a is an important question to ask anybody who, you know, is in the retirement planning sort of phase of things. And that is have you heard from your advisor, from your financial professional? Have you heard from them lately? I think if not, you got a problem. Right?

Producer:
Yeah.

Mike Zaino:
And the sad truth of the matter is, is that most advisors are not reaching out to their clients. And so you may get a quarterly statement or an annual statement. And then you kind of look at your money every three months or every 12 months. And so if you're not at least being contacted a minimum of once a year, that's and that's an absolute minimum, um, by, by your advisor then, then it might be time to, to kind of see what else is out there. And I'm not trying to take anybody away from anybody else's, because there are a lot of good financial professionals out there. But there are also a lot of, um, people who just stick you in an index fund and not are really they're not really not managing your accounts. Right. And so once they set you into a fund, then you just wait for your quarterly or annual statement. And that's the extent of their conversation with you. So you know that that's something that you really need to consider.

Producer:
Yeah, absolutely. So and you know, one of the things, even if you have heard from your advisor, um, here lately, especially with kind of the ups and downs of the market, uh, this this year, uh, in particular is, is, you know, is that advisor, that professional telling you to just kind of hang in there, just, just kind of park it and hold on. Um, yeah. Stay the course. Uh, you know, if that is something that you are being asked to do or being told to do, just hang in there. That's not someone, at least in my humble opinion, who is, uh, nearly as involved in, uh, you and your future as they need to be.

Producer:
Yeah.

Mike Zaino:
And timing and your time horizon, I think, has a lot to do with this as well. Right. Because, you know, if I'm talking to a 20 year old and the 20 year old is freaking out about, you know, uh, a 4% movement in the market, I'm going to tell that 20 year old dude, you got 40 plus years to for to allow that to come back, chill out, stay the course. We've got a plan. Right. But if you're somebody who's in that retirement red zone and you want to be a little bit more proactive instead of reactive, because again, you're you can't afford to take big, big hits because you simply don't have the time to recover. So if you are somebody who's being told to just hang in there and stay the course, then that ought to be the first shot across the bow, the first red flag that goes up, because that's somebody who is not really paying attention to you as an individual and what your time horizon is.

Producer:
Yeah.

Producer:
And some people, you know, might be listening to this and saying, uh, well, with all this kind of sounds foreign to me. Um, so, so then that sort of begs the question, well, does, um, you know, do you even have an advisor or a financial professional to go to?

Producer:
Yeah.

Mike Zaino:
Um, and, and sadly, you know, most people don't and most people think that you have to have a lot of money before any financial professional will even talk to you. And, and I've always tried to never be that guy. Right. I want to help whoever I can possibly help, not make the same mistakes that I made early on in life and the the mistakes that I have learned from people who are much older than I am. Uh, I don't want to make those. And so I'm doing everything in my power possible to make sure that I'm set up to not fall into those traps and pitfalls. So if you don't have an advisor that you can go to, if you don't have that professional that you can count on, reach out to me. Let's have a conversation. We may be a great fit. We may not. Um, but the bottom line is, is I don't want anybody out there ever feeling like they can't pick up a phone and have a conversation about money. I don't judge people, and I don't care whether you got $10,000 or $10 million, you're going to get the same Mike Zaino.

Producer:
Yeah, and that is super important to know. And, uh, really, really, um, great thing because it's kind of the way that it should be. As I said earlier, you know, you're not going to be just a number. And whether that is an account number or whether that's the number of zeros at the end of the. Amount that is in your account. Um, you know, you're going to be treated the same and really is true and very, very important. Another question, Mike. Um, as we got just about three minutes left in the show here. Um, a lot of people, of course, as we mentioned earlier, have most of us work based retirement plans. Um, you know, the 401 K, that kind of thing. And the this question, I think, might just make people kind of, you know, do the little thing like, like dogs do when they hear something, they're trying to figure out what you're talking about and just kind of, you know, cock their head to the side. I feel like a lot of people are that way if they hear this question, is your work based retirement plan manager even trying to help you prepare for your future retirement? And people will say, wait, I have a retirement plan manager at work, like, what the heck?

Mike Zaino:
So most people don't have one at the place they work. The plan administrator is working for the larger company that administrates the plan for your company. So the answer to that question is no, probably not very, very few companies actually have somebody on staff in the house that can walk you through all of the options that are afforded you within your plan. My wife's a teacher, and every year she brings home, uh, literally a book. And they just switched, uh, switched plans to a TIAA, uh, plan now. And so she brings a book that's this thick, and she's like, here. And she hands it to me and I'm like, great, because I get to go through and and read the over 200 different choices that she has, you know, where she can invest the money and whatnot. So, you know, we come up with a plan and we do that. But the the sad truth is that most folks don't have that person that they can go to and wouldn't even know where to begin. So, you know, if anybody out there is going to remember one thing from this week's episode, just remember that I am here for you, and we want all of our listeners to know that retirement is more about income than it is about building this huge, big, large nest egg. Okay? Your income becomes your lifestyle so that your lifestyle in retirement is only going to be as strong as your retirement income plan. So if anything we shared on the show this week makes sense to you and you could use some help with that free and no obligation retirement consultation. Do not hesitate to give me a call. I do this show to bring you the important information, uh, and bring it to people just like you. And I absolutely love meeting with our listeners.

Producer:
Yeah, you can give.

Producer:
A call to 70456015737045601573. You can also go online to Money Matters with Micom. Well, Mike, looking at the clock. That's going to do it for our time together this week sir. But, uh, I wish you a great rest of the weekend and we'll do it again next time.

Mike Zaino:
Matt, thank you so much for everything that you bring to the show. Uh, most importantly, though, thank you to each and every single one of our listeners. Whether you are listening on Saturday mornings at 9 a.m. on WRC in the Rock Hill South Charlotte area, or whether you're listening to us, wherever you're listening to us on podcast, thank you from the bottom of my heart. Whatever you are doing this weekend, please enjoy it to the fullest of its extent and as always, make it a great day and go dawgs!

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 Money Matters with Mike comm or pick up the phone and call 704 560 1573. That's 704 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.

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

Producer:
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 MoneyMattersWithMike.com.

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