MMWM-06-03-22-FULL-SHOW.mp3: Audio automatically transcribed by Sonix

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

Sam Davis:
And welcome to Episode one of Money Matters with Mike. I'm Sam Davis, joined by Mike Zaino, the man who the show is named after. Mike, how are you doing?

Mike Zaino:
I'm doing well, my man. I hope you are.

Sam Davis:
I'm doing great. I'm located in Atlanta, Georgia, today. Tell us a bit about yourself. You know, a lot of the radio listeners here, actually, all the radio listeners here, they're hearing us for the first time on this station. So let's hear a bit about Mike Zaino. Why does money matter? Why are we here? What sort of business are you in? And and let's get it started.

Mike Zaino:
Wow, we can go back way back. I was born in 1971, January 5th, to be exact, and grew up living in seven states nine times. I lived in a different country. I bounced around a lot as a child, which I think is part of of life, obviously, especially as a military brat. I think that I learned a lot of the skills that I now am able to translate into the business world, because when you are bounced around so much as a kid, you don't really have a whole lot of options, right? You can you can either sit in your room and not go out and play, or you can go out and make new friends. And that's what I did. I grew up a military brat and we settled in the Atlanta, Georgia area. I was there for about 17 years and got a chance to move up to the Charlotte, North Carolina region in 1997. So I've been a resident of the Charlotte area now for 25 years. I can't believe how fast time goes. And I got into this business kind of as happenstance, if you would, you know, prior to getting into this business, if we go back to the early nineties, early 2000s, I was just a middle executive trying to find his nut, you know, the squirrel, that proverbial squirrel trying to go out and find his nut, climbing that corporate ladder. I found that I was making decent money and every year I'd made more money than the year before. And then all of a sudden it happened.

Mike Zaino:
2008, the crash. And I literally lost everything. And I was I was one of those guys that is just like you. And out there in America, the people listening. I find that a lot of the people that I talk to on a one on one situation, they're all just going out, you know, trying to better themselves day in and day out. Right? They're going to work. They're working that 9 to 5. They're coming back on the weekends, trying to spend as much time with family and friends. But at the end of the day, they're really working for a living and not really understanding the potential dangers down the road. So 2008 happened and you guys can remember America has a very, very short memory, but a lot of people lost their jobs, right? A lot of businesses went out of business. And my position that I've been working at this company for 16 years was just eliminated. And so like a lot of America, I was one of the Joneses that was trying to keep up with all the rest of the Joneses. And a lot of people don't realize that the Joneses are broke. You know, they have the nice house, they have the nice car, they have the toys. And on the surface, it looks like they're doing well. But if there's no income coming in, they don't have the ability to keep up those payments. And so I was one of those guys, and because I made a lot of money, I thought I knew a lot about money.

Mike Zaino:
And that was an extremely humbling experience. But that also made me get mad at myself for not knowing more. And so I had an epiphany, if you will, that I needed to make that my mission. Field You know, I've always been very service oriented growing up in a military family. I spent eight years in the United States Army, and our mission is to give back. So I went back to school, I got all my credentials and my licensing, and that enabled me to help. Correct. The brokenness of America's financial education system. So since 2011, I have made this my main mission field, just trying to help people avoid what I went through. But we didn't know what we didn't know in 2008 taught us an extremely valuable lesson. And so, you know, right now there's just way too much at stake to ignore the potential of another crash. And we're seeing that right now coming out of a two year long pandemic, with inflation skyrocketing and the cost of living, just everything costs more. Right. So, again, the purpose of this show, I'm hoping, is just to help people, to reach people, to get them to wake up and start looking out for themselves. Because for so long, people put their trust into a system, into their work and to their environment. And when we boiled things down to nuts and bolts, they really don't care about you as an individual. And so I'm trying to break that mold and reach as many people as we can.

Sam Davis:
So, Mike, I'm wondering, you know, growing up in a military family and being a veteran yourself, how is that maybe affected your approach as you entered your career in the financial world and helping people with their finances? You know, a lot of people out there are just so interested in protecting themselves, protecting their families and protecting the money they've worked so hard for.

Mike Zaino:
Yeah, Sam, that's a great question. And in the military, you're always taught to start with the objective first, right. And work backwards from there. So I've really kind of just stapled that same philosophy into the financial and the retirement aspect of people's lives. Let's start with what your end goal is and then figure out what steps we have to take along the way to have those many victories that allow you to celebrate success, but then are still making sure that you're on that road and pathway to attaining those goals and objectives that you set out with in the beginning.

Sam Davis:
You know, one of the main headwinds that we're all facing, not just people in retirement, not just people that are a few years away from retirement, is inflation. And even if you pay attention to the news a little bit, you're hearing about inflation and why, you know, our buying power is is continuing to drop really since the onset of the pandemic in 2020. But but really, inflation is something that's been been going on for years. It's a big challenge. Every time you go to the grocery store, it seems like things are more expensive. Every time you go to the gas station, it seems like things are more expensive, especially especially this year. And, you know, out on the West Coast in California, diesel gasoline is about $6 a gallon right now. And climbing New York, the same. And, you know, all those trucks that you see on the highway as they're delivering our food, they're delivering the supplies that we need and use every day. Those trucks are running on diesel and so the shipping costs for everything are continuing to rise. So it's not enough to be a good earner anymore. It's not enough to even be a good earner and a good saver anymore, because what you need to be prepared for is an ever more expensive world. Now, you know, if you're if you are a little savvy with planning for retirement, you know that Social Security is a bit a part of that income plan. But for a lot of people, it's just a portion of that plan. You get a little bit of relief with that cost of living adjustment each year with Social Security. But for the rest, you're kind of on your own to make sure that your wealth is going to be protected and also grow so that you can outlast and withstand inflation because people are living longer. So I pulled a couple of examples. You know, at the top, a gallon of gas, regular old gasoline. You know, it did it did get down pretty low early in the pandemic, right around 2 to 50 or so.

Mike Zaino:
But nobody was driving.

Sam Davis:
That's right. That's right. Low demand. High supply. But gas is sitting right around $4.50 a gallon on the national average. So, you know, 20 or excuse me, 30 years ago, the average price for a gallon of gas was a dollar 14. Now I'm young, Mike, so I don't quite remember 1991. I wasn't paying for gas back then, but, you know, it was was do you remember was that a high price, do you feel at that time or was it pretty normal?

Mike Zaino:
Well, you know, it's funny that you say you're young, the lowest that I remember, gas was $0.52 a gallon. And I know that there are people out there that are listening today that remember it a lot lower than that. And so Katrina, when Katrina happened, gas skyrocketed. And it was that way for a few years. And then it just seemed that over time, you know, the gas started coming back down to what we as Americans are used to paying. And right before the pandemic, you're looking at a dollar and $0.15 ish for a normal gallon of gas and for people that have to drive back and forth to work, for people that have to commute even 2 to 3 days into an office. You're definitely feeling that pain. I know personally I filled up my truck and it cost me $125 yesterday for a single gallon or a single tank of gas. So it hits us all. And I think that a lot of folks hear the word inflation. And if they listen to the news, which is always doom and gloom, you hear about all the bad things. But I don't know that. Just regular America understands what inflation is. And it's just bottom line is it's a rising cost of goods and services. Right. If you think back like you mentioned a second ago, 30 years ago, gas was a lot less.

Mike Zaino:
Heck, when I bought my pickup truck, I paid a lot more than people 30 years ago did I think 30 years ago the average cost of a new pickup truck was $15,000? Right. And you talk about housing, how the housing market has absolutely skyrocketed over the past few years and the average price of a house now national average is around $450,000, whereas 30 years ago it was only about 145,000. And what really stinks about all this is that the federal minimum wage is $7.25. And while you have the price of goods and services doubling and tripling in a lot of instances and more, you know, 30 years ago it was $4.25. So it hasn't even doubled yet to keep up with that. So, you know, inflation right now stands at 8.3% and that's actually down 0.2% from the end of April's numbers. But the Fed's target is right around 3%. And so if we can have 3% and you can plan for 3% inflation in your retirement planning, then you should be good to go. What we have difficulty planning for are those periods of hyper inflation where you have to squirrel away even more to make sure that you're prepared for those unknowns.

Sam Davis:
Yeah, and it's really a compounding issue and it seems that it's the things that we need the most that are subject to inflation the most force health care, housing, energy, gasoline. And if you look at that minimum wage in particular, you know, historically, you could work on the minimum wage, work 40, 50, 60 hours a week and afford a home A for the family and stuff like that. But now with the minimum wage just hovering right around seven, $8, you know, and depending on the state, it's a little higher. But still, you know, really the only option for younger people is to seek out an education, seek out a situation, a trade where they can advance their career, make a bit more money. But that education comes at a price as well. Right. And that's another price tag that has been inflated over the years. So inflation, something to keep in mind. You know, we're living with it. We've been dealing with it for years. And it's it's expected to to be around for four years to come. And, you know, if you look at maybe one of the root causes of this inflation, take a look at something like the national debt. You know, if you've got debt in your home, what do you have to do? You either have to cut your expenses or increase your income. Well, if you're the federal government, they're not really interested in cutting their expenses right now. In fact, it seems every four, eight, 12 years, you know, you add all these different programs that that cost money. There's a war going on in Eastern Europe. We send them money. You know, someone has to pay for that. And how do they pay for it? They tax the American people. So it almost looks like that's going to be their solution. Is is burden the American people with more taxes. You know, we don't have a crystal ball, but it does seem like that's on the horizon, right, Mike?

Mike Zaino:
It's definitely a vicious cycle, right? Because, you know, I always tell people the government has two choices. They can spend less, you're right, or they can tax more. And we definitely will feel the brunt of that increased taxation. So, yes, I mean, it can absolutely make you spend your your or excuse me, change your spending behaviors because you think that the cost of goods and services, you know, milk, bread, gas, baby diapers, formula, if you think that in the future this stuff is going to go up, all right, you're going to want to buy those things now before prices increase. And that creates that vicious cycle of supply and demand. Because the higher demand pushes prices, it's going to continually go up and up and up until something happens. Right. So, I mean, there's different ways that we can combat that. Obviously, it saves more. It's it's not spend as much. And there are other financial vehicles and insurance products that can put you in a place where down the road you're in a much, much better position.

Sam Davis:
So we're going to go ahead and move the conversation now to exactly that. How do we tackle inflation if it's something that's going to be around and we're planning on being around, too, then then we need a solution for that and really retirement. And, you know, it's it's a lot more about income than it is about building up that one big nest egg. You know, for so many people, they feel like, okay, I'm fine. I've got four or five hundred thousand dollars, a $1,000,000 in my IRA. My 401k.

Mike Zaino:
Whatever your number.

Sam Davis:
Is. Yeah, whatever your number is. That's great. You did well to earn that money, and it's even harder to save it. So good for you. But, you know, you've got all that money in a tax deferred vehicle, which means Uncle Sam, the government which we were just speaking so fondly about, they haven't gotten their cut yet and they intend to get it so that one big nest egg is not quite as big as as some people may think, right?

Mike Zaino:
Absolutely. In fact, whatever your number is, when you get your quarterly statements and you look at that number and you're happy, this is a moment of of of realization for you. That number is not all yours. A significant portion of that belongs to Uncle Sam, because you are in, like Sam said, a tax deferred vehicle. You may have had the option to go into a tax free vehicle like a Roth 401 k if your company offered it. In other words, they gave you the option of paying the tax on the seed as opposed to paying the tax on the farm. Right. What the government would absolutely love you to do is take that seed and go across the field to this proverbial acreage that's out there, remove all the twigs, the rocks, prepare that soil, get it nice in rows so that you can then so that seed. And then over the course of your working career, keep the insects and pests out, keep it fertilized, keep it irrigated, make sure it has water so that you can grow that as big as you possibly can. So that harvest time, i.e. retirement, right. The government will then tax you just on the amount of that harvest that fits back into that original bucket that the seed was in, right? No, not at all. They're going to actually tax the entire farm. And so I asked people in in my workshops all the time, hey, do you think taxes are going up or down in the future? Guess what? I've never had one person say. Down, right, that nobody thinks that taxes are going to be decreased in the future. And so why in the world would you put your money in a tax deferred vehicle if there are other options, especially if you think that taxes are going up in the future.

Sam Davis:
So if retirement is in fact, more about income, you know, that kind of transitions us into one of the more popular options out there for, you know, protecting growing your wealth and generating that income. And it's annuities. And for a lot of people, annuity can be a bad word. You know, it gets it gets a bad rap. But, you know, there are many different types of annuities out there. And Mike, I just want to let you kind of set the stage. We're going to talk about annuities for a little bit on this show. You know, there's there's a history there and there's a lot of people out there that are happy with their annuities. There are a lot of people out there that are unhappy. And that's because there's a lot of different kinds out there, right?

Mike Zaino:
Yeah, there are. And I think, you know, people may have heard, oh, I hate annuities. You know, I've heard that before. And I'm thinking to myself, you know, I actually love annuities, you know, and to me, hearing I hate annuities is like somebody telling me they hate food. You know, they might not like mushrooms. Like I don't like mushrooms. I'm Italian and don't like mushrooms. I don't get it. But I just I don't like them. Right. But I love food. They might not like, I don't know, cheeseburgers, which I think is sacrilege, but whatever, they might not like cheeseburgers, but they need food to eat. And so when it comes to annuities, there are so many different types. First off, you have a fixed annuity, you know that it's pro is that it's very simple, it's straightforward. But its cons are that given the current interest rate climate, it typically earns a lot less less than than riskier investment choices. Right. And you've got to be careful about fees as well, because some of the fixed annuities all the way down to all the other different types of annuities, they can have fees that are reasonable, they can have zero fees or they can have fees that that are approaching upon unreasonable. Right. So fixed annuities is one type variable. Annuities is another type. The word variable means change. And so for a lot of people that are pre-retirees or retirees, I don't necessarily like a variable annuity for those types of people.

Mike Zaino:
Why it's going to give you maximum stock market exposure, but that exposure comes with what risk? Then there's a product called a fixed indexed annuity, which mirrors the market. This is this is where you place your money in an index that participates only in the gains of the market, but is contractually guaranteed to never lose a penny. And so you have that market exposure with no risk. You also have safe accumulation. And the bad side is, I guess, that you can grow with market like gains over time, but other investments may offer higher returns, right? So they give you a reasonable rate of return, but guaranteed 100% safety. And those are the ones that can have zero to very, very low fees. There are immediate annuities for people that need income, like immediately those are going to pay out the highest incomes traditionally. But then, you know, you're sacrificing your principal because obviously you're using that as you go along for income. And then you have what's called a deferred immediate annuity, which you choose when you are going to turn on your payments. But then also you're sacrificing that time in between when you first open up that annuity and once you turn on your income. And so, I mean, like you said, many different people, famous people that you've heard of. Annuities are not something that's new. I mean, they originated back in the Roman times. So these things have been going on for hundreds of years.

Sam Davis:
Yeah. So a lot of information to digest there regarding the different types of annuities. So what we're going to do is we're going to take our first break here on Money Matters with Mike. Appreciate you listening. You can find more information online at Money Matters with Mike Wwe.com. That's Money Matters with Mike or give him a call. 704 560 1573 one more times 704560 1573 And online at Money Matters with Mike Dotcom. So we're going to step aside and we're going to listen to an audio book chapter explaining those different types of annuities that you just heard Mike talking about. So we'll be back in a moment. Enjoy this chapter, learn something, and we'll be back to talk more about annuities.

Audio Book:
Chapter five Types of Annuities. Big Idea. There are several options for you to consider when choosing an annuity. Be confident in knowing that there is an annuity out there that can meet all of your needs. Fixed annuity. A fixed annuity offers a specific guaranteed interest rate on their contributions to the account. Fixed annuities are often used in retirement planning. Fixed indexed annuity fire. A fixed indexed annuity is an accumulation based product offered by an insurance company. A fixed indexed annuity has features of both a fixed annuity and a variable annuity. The growth of your fixed indexed annuity is dependent on the performance of a chosen stock market index, but your money is not actually invested in this index. This offers you great growth, potential and exceptional protection for your investment. We will talk in depth about fixed indexed annuities in a separate chapter. Immediate annuity. This is sometimes called a single premium immediate annuity or a SPEA spea. An immediate annuity is able to pay the policy owner a guaranteed income starting almost right away. Some spears allow you to defer payments for up to one year. You can purchase an immediate annuity with a lump sum and you are assured a consistent annual payment of an agreed upon amount. Variable annuity. Here's the definition, but please don't invest in a variable annuity. Disclaimer I strongly recommend that you do not invest in a variable annuity.

Audio Book:
I feel compelled to describe what a variable annuity is for you as the reader of this book. This type of annuity includes an investment feature managed by mutual fund managers because the funds are exposed to the stock market. They are exposed to higher risk, which means they carry the potential for substantial losses. How does it work? A variable annuity is a mutual fund wrapped inside an annuity product. There are two elements that contribute to the value of a variable annuity the principle, which is the amount of money you put into your annuity and the returns that your annuities underlying investments deliver over time. You can get variable annuities in two forms deferred or immediate. Deferred variable annuities are the most popular type of variable annuities and are most often used for retirement planning purposes because they are designed to start paying out an income at some point in the future. Immediate variable annuities begin paying you right away. Other things to know. Some advisers would say variable annuities are great products for young high income earners. These types of investors have a much longer time horizon when it comes to recovering losses from stock market volatility. Variable annuities are tied to specific investments, which is a double edged sword for most investors. There is the possibility of impressive growth, also a very real danger of major losses, including your principal.

Audio Book:
The bottom line here is if you are currently investing in a variable annuity, your funds could be in serious trouble if the market experienced any downturns. Two basic configurations. Immediate versus deferred. The option you select will depend on your financial goals. If you want to begin receiving annuity payments right away, you will choose an immediate annuity. Alternately, if you would like to set your payments to begin at some point in the future, you will purchase a deferred annuity and specify the start date in your contract. Income now immediate annuity features number one, funded with a single lump sum payment. Number two, guaranteed monthly payouts. Number three, supplement your retirement savings income. Later, deferred annuity features. Number one, tax deferred premium growth. Number two, guaranteed lifetime income that begins on the date. You specify number three more income later because your money accumulates longer. Phases of your annuity accumulation phase, the deferred growth phase, you defer withdrawals and the principal invested grows without asset subtraction. This refers to the period when an individual is working, planning and building up the value of their annuity through savings. It is a specific period when the annuity investor is in the early stages of building up the cash value of their annuity. The accumulation phase begins when a person starts saving money for their retirement and ends when they begin taking distributions.

Audio Book:
For many people, this period begins when they start working and it ends with their retirement. The sooner you can begin your accumulation phase, the better. The long term financial difference between starting to save in your twenties versus starting to save in your thirties is substantial. Not only will you have more of a financial cushion in your retirement, but you will also have access to advantages such as compounding interest and protection from business cycles. Remember, the more you invest during the accumulation phase, the more you'll receive in the distribution phase. Annuity creation phase. The payout. This happens when you turn on income with your annuity and begin monthly income payouts or penalty free withdrawals. This refers to the period when the annuity starts to receive payments from their annuity after annuities move into the annuity creation phase. They will provide periodic payments to the annuitants. The more money you invested in your annuity during the accumulation phase, the more that is available to you in the annuity creation phase. There are four options when it comes to receiving your payouts during the annuities nation life option period, certain systematic withdrawal or lump sum payment life option. This option typically provides the highest payout because the monthly payment is calculated based on the life of the annuity. This option will provide an income stream for life, which helps retirees with their fear of outliving their wealth.

Audio Book:
There's also a joint life payment option that lets you continue the payments to your spouse upon your death. This means that your monthly payment will be lower because it is based on the life expectancy of both spouses. Period. Certain this option means that the value of your annuity is paid out over a time period that you choose, such as ten, 15, or 20 years. If you choose a 15 year payout period but pass away within the first ten years, your contract is guaranteed to pay your beneficiary for the remaining years. Systematic Withdrawal. This method involves withdrawing funds from an annuity account in specified amounts for a specified payment frequency. The annuity is not guaranteed lifelong payments with option. Instead, the annuity chooses to withdraw funds from the account until it is empty. The risk here is that funds could become depleted before the annuity passes away. Lump sum. This option is a one time payment for the value of the asset. The value of your lump sum payment would most likely be less than the sum of payments you would receive if you choose another payout option. This is because the party in charge of the payout is being asked to provide more funds upfront than they would have otherwise been responsible for.

Sam Davis:
So you just listen to an audio book chapter from Annuity 360 explaining a bit more about the different types of annuities. And Mike, I want to get your thoughts on, you know, the better types of annuities because there's a few different types out there. We talked a little bit about the variable annuities. You explain how, hey, variable means change. So look out for that. I've heard a lot of people call variable annuities scary about annuities because they don't want they don't want to deal with that. But but what types of annuities do you like the most and you think are right for today in 2022?

Mike Zaino:
You know, so everybody's situation is different. And I think that's very, very important to remember that there is no one size fits all right. We're not going to ever just blanket recommend one specific type of annuity because even within fixed indexed annuities, which happened to be my favorite for pre-retirees and retirees, I like them because they can be set up for growth, right? They can be set up for income. If you need immediate income, they can be set up for a combination of growth and then income anywhere from 30 days to ten years down the road if you eventually want to turn on an income stream. But kind of going back to the phrase I hate annuities or where people have heard that annuities are bad, certain types of annuities don't fit certain situations. And so for those people who have been unhappy, it's most likely that whoever was talking to them or convinced them to purchase that annuity either didn't really know about their situation and what they were trying to do. And it was like trying to cram a round peg into a square hole. Remember that game that we used to play as kids with the Shapes game and you put it down in there, and if you do try to do that when it comes to your retirement nest egg, then you're going to find some some potential pain down the road. And that's why when we sit down and we go over your goals and objectives, we treat you as an individual. We are definitely not transactional in any way, shape, form or fashion. And then depending on what it is that you are trying to accomplish, obviously that's going to help determine which of the annuities that we would recommend for best for your situation.

Sam Davis:
Yeah. One of the things I really like about annuities is it's almost like creating your own personal pension. You know, pensions used to be something that people enjoyed. You know, you do your 30 to 40 years of hard work at the company, you retire, you get that gold watch and you get your pension that's going to guarantee you that income for life. I mean, my grandfather worked at Boeing assembling airplanes and he still enjoys his pension from Boeing, along with his pension from the US Army. And that's a big part of his income plan now during retirement. But you know if you're in the workforce today most. Companies aren't offering a pension. They aren't offering that guaranteed income stream for life. So isn't it nice that you can get a personal pension for yourself?

Mike Zaino:
Yeah. I mean, if you think of of of a a personal pension or an annuity like another income stream, because you've mentioned now a couple of times that in retirement, it's not how much you have. Right? It's your cash flow. It's the money that you have coming in and going out and how much you have left over as disposable income that's going to allow you to enjoy your life and do the things that you always dreamed about doing. Social Security is an annuity. Pensions were paid to you through an annuity. The federal government still pays. You know, they're retirees. They're actually called annuitants because their pension is paid to them through an annuity. If you win a lottery, if you're fortunate enough to do that, you'll have the opportunity to take the lump sum or take the annuity payments. Right. So again, I love annuities depending on the right situation. You can't put that square peg into that round hole or that round peg and that square hole. And a lot of unfortunately, a lot of a lot of folks try to force the issue.

Sam Davis:
So if I'm someone out there that's got a lot of money in my IRA or my 401. K, and I'm tired of writing the ups and downs of the market. And in 2022, it's been quite a big down on the on the roller coaster that is that is the market. So how do I get in touch with you and what's the experience like once I sit down and start working with you?

Mike Zaino:
So number one, I'm never going to try to sell you anything. That's my commitment to you. I'm like I said before, I'm not transactional. I will. We'll have an introductory call at first to determine if we're the right fit for each other. And then I can come to you. You can come to me. We can do a virtual meeting. I mean, with with all the technology. And if COVID and the pandemic have taught us anything, it's the fact that we can get together and you can be in the comfort of your home, and I can be in my home office or in my regular office. So once we get together, you'll just bring your documents. I'll take a look at your of your documents. I'll do some fact finding, kind of like when you go to the doctor and you have to fill out the intake form with all the medical information. And they just want to make sure that they don't miss anything so they don't arbitrarily prescribe something to you that might be long term detrimental. And that's exactly what we do. So when we sit down, we'll take an intake form, do that fact finding questionnaire, questionnaire, and figure out exactly what your goals and objectives are and then move from there.

Sam Davis:
You know, it's so important to seek counsel from a professional. And I love that you brought up the doctor example because health and wealth, I mean, for a lot of people, those are the two most important things. Put family or family up there and health, wealth, family, that's that's kind of the big three right there. And how many times do people out there, they've got something related to their health that's nagging them? Maybe it's a back injury, maybe it's that cough that won't go away. And if you don't seek professional advice, it's not likely going to get much better. Or if you try to take care of it by yourself, it's probably not going to be quite as good as if you sought professional advice. Right? So that's why it's so important to go in there and talk to somebody.

Mike Zaino:
You hit the nail on the head because, you know, with colonoscopies, for example, not a fun topic. Right. And we don't like to talk about colonoscopies, the old Roto-Rooter, but it's important. One of my really dear friends just found out from a colonoscopy that he had colon cancer. And unfortunately, they caught it a little bit later than what they would have liked to have caught it. And so he's in a a world of ish right now trying to go through all of the stuff. And he's telling people and screaming from the mountaintops, hey, go get a colonoscopy. Hey, go get a colonoscopy. So one of the things that I always suggest people do before they retire is to go get a full physical. And in the military, we used to have the military entrance processing station called MIPS for sure, and that was a physical that we didn't enjoy, let's just put it that way. It was one where they wanted to make sure you were fit for combat, right? So they would poke us products and make us run on treadmills, stress, test everything so that we knew. They knew we wouldn't crack in the heat of battle, go get things checked out.

Mike Zaino:
And then once you have a clean bill of health from the medical community, you can combine that with your knowledge of your family history and then make educated decisions on what's best for you and your family. And that's really what we are about, you know, at the Zaino Group and with talking about money matters with Mike, this stuff matters. It is important for you to go out there and get it done because how many people have you known who've. Retired and then within a year or two, they drop dead. Right. So most of those people didn't know that they were sick. Had they known they were sick, they probably would have made different decisions, number one, on how they spent their time. And then number two, on how they spent their money. Right. Money and time are two things that once they're gone, it's very difficult to get back. You can't get time back. You can't get that back money. You know, you can always try to make more money, always create different income streams for yourself. So, I mean, again, you hit the nail on the head there.

Sam Davis:
Yeah. So I just I'm wondering why, you know, when it comes to something as important as your health or your wealth, why aren't people seeking professional help? Maybe it's because they're afraid of the truth. And, you know, sometimes the truth can hurt. Sometimes the truth isn't as bad as you think. But, you know, knowledge is power. And how can you make an appropriate decision without having all the facts laid out?

Mike Zaino:
You know, I've always heard that statement, that knowledge is power. I'm going to disagree with you a little bit. Right. You could be the smartest person in the world. You could have read all the books. You could have watched all the the pod, listen to the podcast and watch the TV shows like me. I knew a lot about money. I just didn't act on it. Right? So that made me an educated derelict. I had knowledge. I just didn't apply that knowledge. It's that first step that you take toward action on any particular item that then puts that knowledge into application. And I wouldn't go to a mechanic if I needed a root canal, right? I just wouldn't do it. The mechanic is really good at fixing my car, but I don't. I doubt he's going to be really good putting that drill in my mouth and scrambling a root and then placing a crown on top. So going to the right professional I think is even more important when it comes to retirement. I want somebody that specializes in not necessarily growing my money because I've already done that at this point in time. But how do I take the money that I have earned my entire life and make sure that I don't give it back right. But I preserve it and withdraw it. Preservation and distribution are the two should be the two biggest concerns for most people heading into retirement. It's not about making more money necessarily, but about preserving and distributing the wealth that they've accumulated.

Sam Davis:
Yeah, seeking the right type of help. So important. And also being careful about trying to do the helping for yourself. Like I know lately my wife, she's been wanting to remodel the master bathroom. Sure, I could probably save a lot of money if I did it myself, but would I be happy with the result? Well, would she be happy with the results? No. So I would not be happy either.

Mike Zaino:
So it's one of those things where, you know, you work on your strengths and you hire your weaknesses, right? I'm the same way with you. As far as remodeling, we're actually considering a bathroom remodel right now and like you, I can probably do some of the work, but we want to make sure that the hot water turns hot and not cold, right?

Sam Davis:
That's right. So if you're out there listening, enjoying the show, thank you for being with us today. If you want to get in touch with Mike and you're interested in protecting and growing your wealth and working on that income plan for retirement, just visit money matters with Mike. That's Money Matters with Mike or give him a call. 704560 1573. One more time. 704560 1573. We're going to step aside for another break. We want to play another audio book chapter from Annuity 360. And you can learn more about the book online at Annuity 360 net or get in touch with Mike and he can hook you up with a free copy of Annuity 360. We're going to listen to a chapter about famous people who invested in annuities across history and how it worked out for them. Money matters with Mike. We'll be right.

Audio Book:
Back. Chapter three Famous people who invested a significant amount of their hard earned wealth in annuities. Big idea annuities are for everyone, even if you're not worried about outliving your wealth. Annuities are safer for your money than investing in stocks or bonds or simply not investing at all. Babe Ruth, known as the Sultan of SWAT. Babe Ruth came into his glory days during the Roaring Twenties, and his manager was worried that he was blowing through all of his money without putting any of it away. He introduced Babe to an insurance agent from the Equitable Insurance company, now AXA Equitable, from 1923 to 1929. The slugger contributed more than half of his salary annually, purchasing between 35,050 thousand worth of annuities each year. The Great Depression hit the country hard. In October of 1929. Babe Ruth was forced to retire from baseball in 1935 due to health reasons. He was unemployed during the worst time in history, but Babe Ruth had his income annuity. It's been reported that he received an income of $17,500 a year, which would translate into an annual salary of more than 290,000 in today's dollars. His famous quote still resonates today. He said, I may take risks in life, but I will never risk my money. I use annuities and I never have to worry about my money. Steve Young. Steve Young was signed out of Brigham Young University into a $40 million contract with the USFL. That was the headline, at least in reality.

Audio Book:
Young was given an annuity that would pay out something like $40 million over the 50 years that followed. Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either young or his agent. The annuity payments have lasted longer than the league, and it's safe to say that he's made more money than probably anyone else involved with the league. To be fair, it couldn't have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic in addition to outlasting the league. That annuity even outlasted the Oldsmobile car company. With a staggering number of pro athletes going broke after they retire. It's refreshing to read stories about players who made smart financial choices. Shaquille O'Neal. One player who's used annuities to his advantage is retired star Shaquille O'Neal. Over his 19 year career, he generated $292 million in total compensation in retirement. He is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward. Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending errors.

Audio Book:
Allen Iverson. Nba player Allen Iverson earned $200 Million during his career, $155 Million in salary and 40 to $50 Million in endorsement deals. Iverson ended up going bankrupt because of his overly lavish lifestyle. In a December 2012 court filing, Iverson told the court that his monthly income was $62,500, but his expenses were 360,000. Luckily for Iverson, Reebok saved him from becoming destitute by paying him an annuity worth $2.3 million in 2001. Iverson made a very smart decision that would ultimately save him. He signed a unique endorsement deal with Reebok. Not only will Reebok pay Iverson 800,000 a year for life, they set aside a $32 Million trust fund that he can begin accessing when he turns 55 years old in 2030. Since he divorced his wife in 2013, he will receive half of the trust. Another way that Iverson will be able to protect himself against future bankruptcy is his access to the NBA pension. He is eligible for another 8000 a month. The lump sum of this pension is between 1.5 and $1.8 Million. Most pensions are set up with single premium immediate annuities. Benjamin Franklin. When Benjamin Franklin died, he requested that the 2000 sterling he earned as the governor of Pennsylvania from 1785 to 1788 be divided equally between Boston and Pennsylvania. He wanted the money to be dispersed as a legacy 200 years later in the spring of 1990. The balance in the Philadelphia account was valued at approximately $2 million, and the balance in the Boston Trust was about $4.5 million.

Audio Book:
This was sometimes called Franklin's IRA. The money in the Boston Trust was invested using a new take on an old idea. The annuity using a tax deferred index variety. The money was able to benefit from exposure to stock market growth without stock market loss. This allowed the trustees of the Franklin Institute in Boston to turn an estimated $4,400 into 4.5 million, even while it was paying out an income for 200 years. Beethoven, the social luminaries of Vienna, wanted to keep Ludwig van Beethoven from leaving their country. And so in 1809, two princes and an Archduke Guarantee the musician a generous annuity. All he had to do was stay in Vienna and compose and perform his music. His benefactors have supposedly been quoted as saying something along the lines of only a man free of worries can create with such genius. Interestingly enough, Vienna also saw its time of economic downturn, and one of the annuities guarantors tried to stop paying Beethoven claiming financial hardship. Beethoven sued one and continued to receive his annuity payments. Perhaps this is what inspired the literary genius of Jane Austen, whose character Fanny observes in sense and sensibility. People always live forever when there is an annuity to be paid, and annuity is serious business. It comes over and over every year and there is no getting rid of it.

Sam Davis:
And welcome back to Money Matters with Mike. I'm Sam Davis, joined by Mike Zaino. Happy to have you with us today. You know, you want to have an income plan during retirement, but there's some other things that you need to have during retirement as well. And Mike and I are going to go through this list of what we think are five important things to own during retirement. So, Mike, what's the first one here?

Mike Zaino:
All right. So the first thing that I'm going to say that you need to own and before I even mention it, a lot of this is going to sound like common sense, right? And everybody be like, of course I need that. But common sense isn't that common anymore. So I just need to point this out. The first thing I'm going to say that you need is a reliable vehicle. You definitely don't want to have to rely on other people to get you to and from wherever it is that you need to go, whether it's to medical appointments back and forth, to church, seeing family, having that independence is is paramount. And most retirees don't have access to adequate public transportation. I mean, unless you live inside of a major metropolitan city, your public transportation options are extremely limited. Plus, you just want the independence of being able to go where you want to go. When you want to go, if you want to take a road trip, you take that road trip. And especially from a safety perspective, if you need to get somewhere in a hurry because somebody else or even you need medical attention, having your own reliable vehicle is a very, very important and tops of the list of the five important things that you need to own during retirement.

Sam Davis:
Yeah, that freedom. So good. I mean, remember back to the first time any of us got to just head out on the open road for the first time in our teenage years, how liberating that felt to just have the whole world in front of you and it feels good. I remember being shut in for way more than I wanted during COVID a couple of years ago and how good it felt just to get out there on the road and going somewhere, doing something. So you'll want to have access to that vehicle.

Mike Zaino:
Absolutely.

Sam Davis:
During retirement. Number two on the list I'll take that is is a home make sense shelter. But, you know, again, home represents freedom. You know, you don't have to move in with someone else. You don't want to have to move in with your children. You still want to maintain that independence. And also, a home is a valuable asset. Everybody knows what's going on in the real estate market these days. That can be a big part of of your retirement plan as well. But at the end of the day, you know, I'm from Kansas, so I can't say it enough. There's no place like home having that safe, clean, comfortable place to lay your head. That is the number two thing on our list.

Mike Zaino:
An emergency fund is liquid money that you have set aside that you're not needing to tap into any assets to actually spend. God forbid your air conditioning unit goes out or your vehicle that's no longer under warranty drops a transmission, right? When those unexpected problems arise, you want to have enough money, liquid cash to be able to cover those expenses and your fund. It differs from every individual, but I like to recommend somewhere between six months and 12 months of liquidity just stuck aside. You don't want to have too much that the money is not working for you, but again, you want to have enough to where if you need it, you have it. Right. So the emergency fund, very, very important to have during retirement.

Sam Davis:
Absolutely. Next one on the list and we'll sort of tag team this one because this is so important and kind of goes hand in hand with that emergency fund is insurance if you don't have all the funds to cover the potential loss. Of your vehicle. Well, good news for you. There's insurance policies for that. Or if you don't have all the funds to to cover an unexpected medical emergency, that's okay. You don't necessarily have to because there's Medicare and there's health insurance. There's things out there for you. So, Mike, how important is insurance not just for everybody, but especially for those in retirement?

Mike Zaino:
I think that insurance should should be at least 25 to 30% of somebody's total portfolio. And the reason being is that it covers the unexpected. Right. So if you all of a sudden don't have insurance and you need a major medical problem solved, that's going to cause a lot of financial stress. In fact, the single biggest reason that most people declare bankruptcy is because they did not have the insurance enough to cover these types of things. And I'm talking about health insurance. I'm talking about life insurance, but not the old school life insurance. And this is where people are amazed when we sit down and we talk about their actual life insurance policies that they've had for 20, 30, 50 years plus. I mean, there are new policies out there that include living benefits that can protect you if you die too soon, if you live too long, or, God forbid, you get sick in the middle, you get a chronic, a critical or terminal illness. And some of the policies that we have in the advanced design cases, we can actually structure them to where you can pull out a tax free retirement supplement to supplement your retirement income. And what you're really doing is you're borrowing against the death benefit, and that's a tax free pool to pull from and that's allowable by the IRS codes.

Mike Zaino:
I think it's just very, very smart planning for those who want to look at that as an option down the road. And then, of course, you have annuities. Annuities can structured to give you a guaranteed lifetime income that you can never run out of. Think about that. You may have placed, I don't know, 50 grand, 100 grand and half a million $1,000,000 into an annuity. And if you put that in a bank and start withdrawing it when it's gone, it's gone. But these products can be structured to where you have a guaranteed lifetime annuity, even after you have exhausted the amount of money that you've put into the product to begin with. So if you live to be 100 years old, a centenarian, which incidentally is the fastest growing segment of the American population, people turning 100, we're living longer and longer and longer. Medical advancements are getting better and better and better. Medications are just bottom line, keeping people alive longer. And as long as I have my faculties and I can move around and heck, I want to see 100. Okay, but even if you live to be 120, they've still got you covered with a guaranteed lifetime income stream. So that insurance, I think, is definitely a integral part of one's financial overall financial plan and retirement.

Sam Davis:
And I think that's such important information because a lot of people don't even think about insurance as a part of their portfolio. But insurance especially indexed universal life, which we'll talk more about the different types of insurance on future episodes of Money Matters with Mike, you know, it's one of the only types of tax free investment options out there. And how many times in this life in America do you get the chance to do something that's tax free? So certainly insurance is important. And the last one on our list, we've got just a couple of minutes left in the show today. But the one of the important things to own is, is your schedule. I mean, isn't that what retirement is all about? It's about enjoying that life you worked so hard to build, right?

Mike Zaino:
It is. And it's funny because, you know, I'm now past a half a century in age. And I used to think that 30 was old. And I heard people referring to back then the golden years. Right. And it was kind of back then, like you said, go to work for a company for 20 to 30 years, retire with a pension and a gold watch and be able to enjoy those sunsets. Being able to travel and it's not necessarily that way anymore unless you again take steps and plan and take action toward enacting those plans in order for you to be able to own the time you've worked your entire life. Right. Your bust in your home, whether it's Monday through Friday 9 to 5, whether you're a first responder or a nurse, and you're going out there and you're doing your thing working for tens a lot of times working in 24 hour shifts in a row. I mean, you guys go through it and I understand this because guess what? Before I got into this business, I was like you again, just trying to climb that corporate ladder. Nobody wants to retire. Only to find out eight months later they have to go back to work. Right. There is a huge difference between being eligible to retire and being able to afford to retire. And so when we sit down and we go over your numbers, I'm going to tell you the straight truth. And sometimes we have a come to Jesus meeting. But wouldn't you like to know whether or not you can afford to retire? Sometimes it might work in your favor just to work a couple more years because the numbers work out so much better. Again, you don't want to have to spend time watching the stock market and managing your own assets and retirement. This is for actually traveling and spending time with your loved ones and enjoying this great country and everything that America has to offer, maybe even get the opportunity to travel the world.

Sam Davis:
All right. Get in touch with Mike today. You can visit online at Money Matters with Mike. That's Money Matters with Mike or give him a call. 704560 1573. That's 704560 1573. And you can catch Money Matters with Mike Saturdays at noon right here on this station, and we'll be back same time, same place next week. Mike, thanks for being with us.

Mike Zaino:
Sam, thank you so much and I appreciate you guys as always. Make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation visit money matters with mike dot com or pick up the phone and call 704560 1573 That's 7045601573 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. It 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. Are the results obtained from the use of this information?

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