The Biggest Retirement Mistakes You Want to Avoid

4.19.24: Audio automatically transcribed by Sonix

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

Speaker1:
Welcome to Nationwide's Peak ten fixed indexed annuity, designed to help provide guaranteed income for life. Peak ten offers protection against market losses, plus protection for a spouse through a joint option and an immediate 10% penalty free withdrawal. Call us now at (704) 560-1573. That's (700) 456-0157 three. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

Speaker2:
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.

Speaker1:
Welcome to Money Matters with Mike, with your host, Mike Zeno. 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 Zeno.

Speaker3:
What's up, what's up, what's up? It's Mike Zeno coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing it again. On today's show, we're going to teach you how to avoid some financial pitfalls and how to break some bad habits that will help you build a better retirement. 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. Matthew, how are you today, sir?

Speaker2:
I am doing very great. Uh, Mike, really do appreciate, of course, being with you each and every week. I'm back in my normal confines, uh, this time around, uh, back in my, my office here in, uh, in Atlanta, the, uh, you know, last week I was in, uh, beautiful Las Vegas, uh, after a conference there, but it's, uh, you know, as great as Vegas is, it's always good to be home.

Speaker3:
You know, I have a. Like and dislike for the city of Las Vegas. I love to visit and I think like three days ish. That's like because I've been to Vegas for a week before and that was way too much. Yeah, uh, it was just way too much sensory overload. I actually had to break it up. And on the fourth day by by going and playing some golf and just getting out of the, you know, the hustle and bustle of the city and the casinos and everything. But, you know, it's it's one of those cities where, like you said, it's it's great to visit, but it's also nice to leave. Yeah. And then, you know, I also returned home this, this, uh, this past week I was up near our nation's capital and, uh, had a couple speaking engagements up there in the DC area and wildly successful. We helped, uh, reach over 150 people and provide them with information that will enable them to secure a much more, um, I guess, uh, fun filled retirement. So that's what we're all about, right?

Speaker2:
I love it, I love it. Be able to meet all of the obligations and then have those paychecks turn into play checks so you can have some fun, uh, in your retirement years, uh, as well, a lot of that is going to be part of our, our topic of discussion today, because, you know, we're going to try and set people up for financial success in retirement here once again this week and really want to give a shout out to everybody there in the Charlotte metro area who is tuning in to the show on WRI. And a great big thank you to you, no matter where you are in the world, if you're listening to us via the podcast and you might be listening to us on the radio and saying, wait, they have a podcast? Yeah. Uh, Mike Zeno is all over the world. He's gone global. Everybody, uh, just go to Money Matters with Mike comm or wherever. You listen to podcasts and you can subscribe and like the show there. Um, also check out the YouTube channel. We've got video highlights and some other content there on YouTube. Just search for Money Matters with Mike. Uh, and also Facebook, uh, Mike very active there on the Facebook page. And answering your questions, interacting with you. So another great way to reach out.

Speaker3:
Absolutely. And you know, I love hearing from listeners, whether it's on the socials, uh, or via email, you can get me at Mike at Money Matters with Mike comm. But ultimately, I would love to meet with you and discuss how we can help you reach those financial and retirement goals. And we can help you with retirement planning, with risk management, with estate planning, and a whole lot more. So building sound financial plans is what I do best, and it is what our listeners want. So pick up a phone and call (704) 560-1573 or visit us on the web at Money Matters with Mike comm.

Speaker2:
Great ways and easy ways to get in touch there as well. Well, we've got a lot to get to here over this next hour of the show. So we've got, um, some bad money habits as, as you said, Mike, to start off with, here are some things for people to avoid. And these are just really common bad decisions that people might make that if you avoid them, you can be set up for much more success in your retirement years. We also have an update on Social Security and, uh, the there's an early forecast for the cost of living adjustment for 2025. Um, and we'll, we'll talk about that, whether that's actually going to keep pace with what's really been stubborn inflation here. Uh, speaking of inflation, we've got an inflation demonstration. And, uh, that's kind of the retirement magic number. There's a new study that says you need more money as to reach that magic number to be comfortable in retirement than ever before. We'll also share some moves that you need to make if you are in your 50s and planning for retirement specifically. We'll get to all that here in just a moment. But first, let's get some inspiration for our discussions today in our quote of the week.

Speaker4:
And now wholesome financial wisdom. It's time for the quote of the week.

Speaker2:
And this week's quote comes from the probably arguably the most prolific investor of all time, the Oracle of Omaha himself, Mr. Warren Buffett. And he said this once, quote, chains of habit are too light to be felt until they are too heavy to be broken. It sort of reminds me there, Mike, of, um, of A Christmas Carol, you know, with, um, the with Jacob Marley, you know, and he's coming there. He's got all those chains, the chains that he forged in line. They're all weighing him down. You know, that's just what I think of when I. When I read this quote from Warren Buffett.

Speaker3:
When all his ghosts come back to haunt him. Yeah, absolutely. I see how you drew that parallel. I think, uh, the Oracle's quote here, okay, encapsulates the idea that certain actions or decisions might seem pretty inconsequential or easy. Okay. In the moment, but their cumulative effects over time can become significant and actually burdensome.

Speaker1:
Hungry for something to chew on. Here's some meat on the bone.

Speaker3:
And so in the context of retirement planning, because that's what we talk about, right? Retirement planning and setting everybody up for a a great financial future. I think his quote underscores the importance of making wise and informed financial decisions early on to avoid potential hardships in the future. And, you know, here's how it relates. Let's talk about savings habits. For number one, saving for retirement often starts with very small contributions to retirement accounts or investments. And initially, the impact of not saving enough may not be noticeable. Okay, as there might be some other sources of income or assets at that time to rely on, like your job, okay? However, as retirement approaches, the consequences of insufficient savings becomes very apparent, which makes it even harder to catch up. Right? So that's number one. Savings habits. Then number two would be investment choices. Similar to savings. The effects of poor investment decisions may not be immediately felt. So ignoring proper asset allocation for one or taking excessive risks, or maybe investing in high fee funds may seem insignificant initially. Yet over time, those decisions can erode retirement savings significantly, making it much more difficult to recover those lost funds. Okay, number three would be debt management, and accumulating debt may not seem problematic in the short term, especially if it's a manageable debt within one's, uh, current income. Like, all right, you make so much you can afford the debt.

Speaker3:
And that's how a lot of people justify it. However, as interest accumulates and financial obligations increase, debt can actually become quite burdensome, and it affects people's ability to save for retirement or maintain their desired lifestyle after retirement, which is very, very, very important. Right? We don't want to have that significant drop off. And then, you know, finally lifestyle choices are going to come into play. Um, spending habits can also be likened to those chains in Buffett's quote, small, frequent expenditures that seem insignificant at the time. All right. Whether it's going to Starbucks every single day or eating out for lunch every single day, um, those are very small, uh, you know, expenditures on the short term, but those can add up over the years, potentially hindering the ability to save adequately for retirement. And so delaying gratification and making mindful spending decisions can help lighten those chains right before they become way too heavy to bear. So I guess overall, his quote serves us as a reminder to be proactive, to be vigilant in your financial planning, particularly when it comes to retirement, and by acknowledging the cumulative impact of seemingly small decisions and taking steps to mitigate those potential risks, you guys, you listeners, can avoid finding yourselves burdened by those financial constraints later on in life.

Speaker2:
Yeah, that's a great way to look at all of that, because I think it really breaks it down into, you know, the big things and the small things. Right. All being important because, yeah, like you said, those small things are the things that seem small in the moment really do add up. And, and you know, as inflation has gotten, uh, you know, worse and worse over time, the cumulative effect of it anyway has gotten worse and worse over time. Um, it really does emphasize, okay, you've got to watch your daily habits and make sure that you're not overspending each and every day.

Speaker3:
Yeah. I mean, like, think about it. When you're in your 20s, if you're hanging out with your your friends and you go to the bar and you have a few drinks, um, and you do that a couple times a week or over the weekend, you know, that can add up to 50 to $100 a week. And, you know, it seems insignificant at the time. And because you're working, you have a job. It's like, okay, I can afford it. But imagine if you took that 50 to 100 bucks a week in your 20s and invested it. The cumulative effect over time when you reach retirement age. Okay. And the problem is, is that most people in their 20s and 30s aren't really thinking about decades ahead, uh, because they haven't even lived that long. So it's hard for them to rationalize not going out and having fun. Uh, and I'm not saying that you can't have fun. That's not at all what we're saying. Just do it and be mindful of the spending and make sure that you're spending and paying yourself first.

Speaker2:
Yeah, have fun and be responsible. And. Then future you is going to thank you for that, because then you can be, uh, somebody who has fun for a longer period of time.

Speaker3:
No doubt. Look, and speaking from experience, I wish I had half of the money, even half of the money that I spent in my 20s and 30s. Um, I might be retired by now.

Speaker2:
Likewise. So much just going right out the door.

Speaker3:
I think a lot of our listeners right now are kind of nodding their heads, going, yep. Oh yeah, relate.

Speaker2:
I can I can see him through the radio or through their headphones or wherever they're listening right now. Well, we've actually have speaking of all of that, we have some bad money habits, kind of like the ones we just talked about that people will need to avoid to make their retirement as good as it can be, or at least improve it. Um, to the extent, whatever extent possible. So bad decision number one, that you'll want to avoid here selling investments when the market drops. You know, they always say that the, the old saying is, you know, buy low sell high because that's what you want to do. Uh, it's not easy to time it especially on both ends of that anyway.

Speaker3:
Correct. I mean, the problem is, is that trying to time the market, like you just mentioned, both ends. That's on the buy side and on the sell side. And a lot of folks can get one of those. Right. Very few people, even money managers, get both sides of that equation. Correct. And so historically, the stock market has always gone through phases of contraction recovery and then expansion. And so avoiding making impulsive decisions during those market downturns because you understand the cyclical nature of the market. Um, you know, and you just kind of eradicating emotions, um, because when the market goes down, you're like, ah, you panic. And a lot of people want to move to safety at that point. Well, inevitably if you're selling when the market is down, you're locking in your loss. Okay. And so that can lead you away from your previous plan and your investment strategy. And so, um, obviously it can lock in that loss, hinder the long term growth. And instead, you're able to consult with a licensed professional to help you develop a well-diversified investment strategy. Okay. Hope is not a strategy, folks. Okay. And that strategy needs to align with your both your risk tolerance as well as your long term goals. So if you're still in your 20s, 30s, 40s and maybe even early 50s, you need to stay invested and stay informed, because market contractions can actually be used as opportunities to invest. When prices are lower and there are more sellers than buyers, it gives you a chance to jump in there and add more soldiers to your army at a discounted price. It's like the shares go on sale. And so you know I love to buy when the market dips.

Speaker2:
Yeah, I can buy when everybody else is selling and sell when everybody else is buying. Uh, not necessarily a bad thing to do, but here here's the thing. As you said, Mike, stay invested over the long term because it's not about the short term, the day to day, uh, the even the week to week or month to month, it's about being invested for the long term because that is what it's all about. Eyes on the prize, right?

Speaker3:
Eyes on the prize. And like I said, if you're in your 20s, 30s, 40s and even early 50s, you definitely want to stay invested in the market. Now, once you hit your mid to late 50s and 60s and beyond, you're going to want to shift some of the focus from the investment and the accumulation phase to that preservation and distribution phase. So normally we like to see some protections put in place to safeguard the money that you've worked so hard for your entire life.

Speaker2:
Absolutely. Right. Well, um, bad decision. Number two here is, uh, something that a lot of people might do because they say, I'm just going to take the money and run as soon as I'm eligible for it. It's claiming your Social Security benefits too early.

Speaker3:
You know, it's funny, I was speaking with, uh, somebody that worked at the Social Security office before, and. And I asked point blank, hey, what do you guys tell? You know, most people when they call and they said, we tell them to do the Steve Miller Band. And I was really confused. And then he started singing go on, take the Money and run. Right. And then the Steve Miller Band actually wrote that song. It was about, you know, Billie Jo and Bobbie Sue, not Social Security, but the, the, the, uh, you know, the phrase still holds true. And I said, well, why do you tell them that? And, you know, her response was, was one of fear. Okay. And and because of everything that's going on with Social Security. But, you know, my retort to that was, you know, claiming Social Security benefits before full retirement age, which is when people get 100% of their benefit, um, results in reduced monthly payments for the rest of your life. And think about. Do you really want to give the government a discount on what they owe you? No. You don't consider the long term impact of this very important decision for both you and your spouse. And instead, if possible, consider delaying Social Security so that you can maximize your benefits and get the most out of this system that you've been paying into during your entire working career. And I can't say it enough. Consult with a financial professional to determine help. You determine the optimal timing for when you know the claim on your benefits. Uh, makes the most sense based on your individual circumstances. So if you are concerned about your Social Security and we trust me, we understand that many of you are worried about those future cuts that might affect your retirement. Well, we want to provide you with a Social Security maximization plan that is customized for you. And if you're married, customize for you and your spouse so that you can make informed decisions. And so that number is 704 5601573. Or as always, you can reach out to us on the web at Money Matters with Mike comm.

Speaker2:
Get a plan in place where you're not relying on Social Security as your sole source of income in retirement. What you're doing is you're making a plan that no matter what happens with it, you're good to go. And then if and when you get Social Security in retirement, boy, that's that's the gravy. That's the cherry on top.

Speaker3:
The cherry on top is exactly what I was about to say. Matt, if we can develop a plan for you to where you're not reliant on Social Security as, uh, the, the, the main stream of retirement income, if any, right? You're not reliant at on it at all, then that is the absolute best case scenario that we can hope for, for you and your retirement. Yeah.

Speaker2:
And once again, folks, the website is Money Matters with Mic.com. Uh, bad decision number three. Another one here to avoid folks, is not having a savings first mindset. You want to you want to make sure that that is top of mind.

Speaker3:
Statistics are sometimes staggering. They are mind blowing. And here's a fact, folks 40% 40% of Americans do not have enough saved to cover a $400 emergency expense. And I don't want that for any of our listeners. We want our listeners to prioritize saving so that you can build a financial safety net. And those are the kinds of people that we feel like we can actually help. Neglecting savings can leave you very vulnerable to unexpected expenses, and it can hinder your future financial plans, because we always say, pay yourself first. I know we mentioned on a show a few weeks back, a couple of weeks ago, I think actually, isn't that, you know, nine out of ten retirees, their number one regret was having not saved enough for their retirement. So instead, things you can do is, number one, automate your savings. Set up a regular contribution to a retirement account. Uh, make sure that you are building your emergency fund so that it is at least able to cover six months. I would prefer 12 months of all of your monthly expenses. If you are eligible, you should also consider maximizing your Roth IRA contributions every single year so that you can reduce future taxes that you would have been paying in retirement. On the Roth money. You won't have those, nor will you have required minimum distributions. And then we encourage you to go online yourself, or contact us so that we can show you where to access a compound interest calculator. And by using this tool, just for a few minutes, you're going to begin to see the power of consistent savings.

Speaker2:
Yeah. And, you know, I mean, as a little sort of a bonus quote of the week here from Warren Buffett, we shared our official quote of the week from him earlier. But he said once, you know, don't save what's left after spending, but spend what is left after saving. I think that really does encapsulate having that savings first mindset here. And it really is, you know, sort of changing your mindset, adjusting, you know, maybe those those bad habits that you've built up over time. Saving is good, obviously. And you want to like, you know, saving is better than not saving no matter when it's being done. Right. But you want to just have that savings first mindset so that that really does make it a priority and sets yourself up for future success.

Speaker3:
Right? Because if folks wait and pay all their bills, there may not be anything left over to pay yourself. But it always amazes. This is me, Matt. How? When you pay yourself first guess what? You find ways to pay those bills. Okay? It's like, where did that money just magically appear from? And where did it magically disappear to when you don't pay yourself first, pay yourself first, folks.

Speaker2:
Absolutely great. Great advice there. Uh, number four, in our list of bad decisions that impact your retirement here, some some bad decisions, you want to avoid not having a realistic budget or no budget at all? Uh, yeah. That's not a good idea. Yeah.

Speaker3:
So first off, I think the reason that people don't like budgeting is because it sounds restrictive, right? It's like budget is actually a four letter word. And that's why I prefer to use the term having a spending plan. Okay. And the fact is that only 41% okay, of Americans, 41% of Americans actually follow a spending plan. And this spending plan is a crucial tool for managing your finances and for achieving your retirement goals. You need to become, if you're not already the chief executive officer, folks, that's called a CEO and you need to become the CEO of your own household.

Speaker2:
Yeah, 100% there. You got you got to take control of the things that you can control. Right. And this is so paramount to be able to take control of your spending and your savings, as we just mentioned there as well. You've got to know really, really and truly, it's all about prioritizing the things that need to be prioritized and actually coming up with that plan and putting it into action.

Speaker3:
It is I mean, if you're able to create a detailed budget and that includes all of your income sources as well as all of your expenses, it really, uh, reflects your actual spending habits. So one of the pieces of homework that I, I give some clients is that, hey, you know, send me 3 to 6 months of your bank statements and your credit card statements. And if you do that, I'm going to show you where your financial priorities lie. And so another thing that you can do is regularly review and adjust that spending plan so that it is able to accommodate changes in your financial situation. You should absolutely, at a minimum, review your spending plan at least once a year or whenever you experience a significant change to your regular expenses and or income. If you've had a a child being born, if you've put a child through college and you're just now starting to do that, if you married off a child and now you're empty nesters, if you've lost a job, there are all types of life events that can impact your overall financial security. And reviewing those, uh, plans at least once a year at a minimum, is crucial and paramount to your overall success.

Speaker2:
Yeah, absolutely. And if you need help in, you know, coming up with a spending plan, getting your, uh, your house in order, as far as you know, your income, your spending, your savings, all of the above. This, uh, go to Money Matters with mike.com. You can schedule a free, no obligation consultation there. It's a money matters with mike.com. Or give Mike a call at (704) 560-1573. Bad decision. Number five here Mike, is, uh, something that we all have to do. We got to have somewhere to live, right? We got to have put a roof over the head. And so you don't want to pay too much for it, though. So bad decision number five is paying too much in housing costs.

Speaker3:
You know the American dream, right? You go to work, you accumulate some money, you get this nice house and a picket fence, right? I mean, that's remember that being the American dream that everybody dreamt about. You know, when I was growing up, I was never much for the picket fence, but that's just my personal taste, okay? Housing is one of the largest expenses for retirees, and so overspending on housing can absolutely strain your retirement budget. We don't want folks to be house poor in retirement, and it always amazes me when it's a husband and wife or just one person and they buy, uh, just this enormous house to show people that they've arrived. But then they also comes with this enormous payment, okay. And it's like, ah, it's like an anchor around their neck weighing them down. So carefully, consider your housing expenses so that you're able to ensure a comfortable retirement budget or spending plan. And if possible, think about downsizing, not upsizing, or maybe relocating to a more affordable and desirable area for retirees. And another thing to consider doing because now, believe it or not, it is actually cheaper to rent in America than it is to own a property. While the rates are as high as they are, you might be better off renting for a few years before you make the ultimate decision to relocate and or downsize.

Speaker2:
Yeah, that's absolutely right. You know, you with those rates, as you said, as high as they are at the moment, not as, you know, they've been higher. Yes, historically at different points in our history, actually much higher at some points a few decades back. But right now they're higher definitely than than they were over the previous decade when we had, uh, the base interest rate, the fed funds rate was like, you know, at or near zero. So yeah, they've gone up the mortgage rates. I think they crossed the 7% threshold for the 30 year mortgage again this week. And it is, um, you know, something that could be cost prohibitive for a lot of people and just kind of price you out of the housing market altogether as far as making a purchase goes. All right. Well, bad decision number six here is probably the biggest one, I think, at least for me. I know that in my life previously I had struggled with, uh, especially as as you were talking about earlier, Mike, the times in your in your 20s and 30s where you, you wish you had all that money back. I wish I had the money back that I carried, you know, and paid in credit card interest. This is carrying a balance on credit cards. Do not do it.

Speaker3:
That is a extremely bad decision carrying that balance on credit card. Here's a fact, folks. The average credit card debt for Americans that are aged 65 and older is almost $5,000. And that's according to an Ncaa.org article. Okay, so it has backed up fact statistics on that carrying a balance on credit cards can lead to high interest charges and financial stress. So avoid the pitfalls of credit card debt and pay off those balances. At least the statement balance, which is what you charged the previous month each and every single month. And folks, if you cannot afford to do that, guess what? You're living above your means. That means you cannot afford what it is that you are buying. So, you know, you guys may say, hey, if I don't have cash, uh, then I'm not going to buy it. If you can discipline yourself, uh, to that, then you'll never go into credit card debt. Yeah.

Speaker2:
And one of the best things really, that kind of helped me as far as this goes, uh, just from my personal experience. And this is not an advertisement at all for a particular company, but was an American Express charge card, because that charge card you pay off, it's not a credit card, it is a charge card. You can charge on it, but you got to pay off that balance each and every month. That really held me accountable. Um, because, you know, you just can't carry a balance over from month to month. Um, so that's it's a matter of, I guess, finding whatever tool you can put in your tool belt that trains you in the, the proper way. And for me, that was one that really kind of helped. Anyway.

Speaker3:
No, I agree 100%. And it's one of those things. It's kind of like a debit card, right? If you just used a debit card, you don't have that money in your account. They're not going to let you overdraw it. But but maybe by a few hundred bucks, which, you know, could be a danger in and of itself. But the point is, just make sure that you can afford what it is you're buying. And the answer is, is if you can't pay it off at the end of the month, you can't afford it. Yep. Do something else.

Speaker2:
That is absolutely correct. And then of course, bad decision number seven here. Um, probably our favorite around these parts because this is what you do each and every day, Mike, is help people with this very thing. Specifically, the bad decision is not having a formal retirement plan. You really do need to have it, because that really is encompassing all of these other six points that we talked about and more.

Speaker3:
Yeah, failing to plan is actually planning to fail. Okay. And so you want to make sure that you don't find yourself in financial insecurity in your golden years. Guess what? When you're going to need regular streams of income to cover your expenses, including an often overlooked thing called health care. Okay, because health care is expensive and a formal retirement plan helps you set those goals, it helps you make informed decisions about saving, about investing, and folks about spending. Okay, many people feel like they understand their money for the very first time in their lives after meeting with me and helping them develop a formal plan. So whether it's me, whether it's any other financial professional out there, just make sure that you have a comprehensive retirement plan and it's tailored to your specific goals and needs.

Speaker2:
Yeah, absolutely. Right. And if you want that complimentary consultation and your retirement plan, all you have to do is give a call to Mister Mike Zeno. You can do that at 7045601573704560 1573. You can also go online to Money Matters with mike.com.

Speaker3:
Listen folks, if you haven't heard from your advisor lately, we are here to help you and your family with that complimentary consultation. So whether you're looking to optimize your investment portfolio to maximize your Social Security benefits, or just to create a comprehensive retirement income plan, our team is ready to assist you every single step along the way.

Speaker2:
Yeah. And once again, the website is Money Matters with Mike comm and the phone number 704 5601573. Well, in our, you know, seven bad habits to avoid there that we just went through Mike we discussed one of those was Social security taking it too early. It potentially a bad habit for a lot of folks. Um and so let's actually take a few minutes here to give an update on Social Security as of this very month and talk about maybe a look ahead at what retirees and Social Security recipients can expect from the cost of living adjustment for next. Yea.

Speaker3:
Yea. And this is actually from The Motley Fool. And they said that last year's annual Social Security Cola and a Cola is cost of living adjustment. It fell significantly down to 3.2% for 2024 because the year before it was all the way up at 8.7%. And so the Senior Citizens League initially estimated that 2025 would bring a cost of living adjustment in at 1.75%, but maybe possibly could be higher, um, based on the recent data. And so their latest estimate actually climbed up to 2.6%, which reflects potential changes in the coming months.

Speaker2:
With the Colas, though, are calculated in a very specific way. We always talk about how does it truly reflect the actual increase in the cost of living? Does it actually true? You know, take into account the true cost of inflation. So talk about that for a minute here, Mike, about how the Cola is actually calculated each year.

Speaker3:
Yeah. So there's this thing called the Consumer price index for urban wage earners and clerical workers. It's called the CPI W okay. And that's the metric that's used to calculate those cost of living adjustments. And it surged 3.5% higher in March of 2024, which is a sign of ongoing inflation. And that means the cost of living just keeps going up. And so the CPI w metric used by the Social Security Administration does not fully reflect health care costs, which also have been increasing significantly. And that is very impactful on retirees and on seniors, because they spend a much larger percentage of their monthly budgets on, guess what, health care costs. So if health care continues to rise without adequate cost of living adjustments, okay, retirees real purchasing power may decrease. It's not May. It will decrease if it continues to rise. And their colas don't adequately include the cost of health care.

Speaker2:
Yeah. Absolutely. Right. And so the question then is do you as uh, you know, an American, you know, pre-retiree today or even retiree, do you need more income than Social Security can provide? I would say for the vast majority. Yeah, absolutely. You do. Because you don't want to be somebody who is just relying on that cost of living adjustment, especially if it doesn't reflect the actual cost of living increase.

Speaker3:
I'm laughing right now, Matt, because the average Social Security payout per month is only $1,213. So it's like, who wants to live on 1200 bucks a month in retirement? That doesn't sound like too too much of a golden year to me, right? Uh, 1200 bucks a month. So, look, if you would like to explore what is known as a personal pension, and you want to look at those different options for your retirement, we can help you create one and maximize your retirement income potential. If you're willing to pick up a phone and give us a call at (704) 560-1573, or visit us on our website at Money Matters with Mike comm. Folks just get in contact with us so that we can help you. It doesn't take much of your time at all, and I promise what you hear on the radio show is what you're going to get in person. I'm about as real as it gets. I'm not a high pressure sales tactic kind of person. I don't care if you've got ten grand or 10 million, you're going to get the same Mike Zeno. And if you've got issues, guess what? We've got a plan for that. If you're somewhat in the middle class, guess what? We've got a plan for that. And if you are a high income earner, guess what? We have a plan for that as well. So it doesn't matter who you are, where you are in life when it comes to finances, I can actually put you in a better position if and only if you take action.

Speaker2:
It's like like the old iPhone commercials. There's an app for that. You know, there's there's a plan for that. And if you want to get one, go to Money Matters with Mike comm and schedule that free consultation.

Speaker3:
Yeah. I like to refer to myself as as the easy button. Right. I'm not sure if you guys remember about 15, 20 years ago, staples had a button and it was it said that was easy, right? I actually have one of those buttons in my office, and I love when I have my clients. Uh, after they see the light bulb go off, right, they just press that button and it says, that was easy. And I'm like, it was, wasn't it?

Speaker2:
I love that, that's absolutely right. Mike Zeno, the easy button. You can schedule your free consultation by going online to Money Matters with Mike comm.

The five and dime I bought.

Speaker1:
Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal applied to your income benefit base. Call us now at (704) 560-1573. That's (704) 560-1573. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio. Want to know where your hard earned money is going. It's time for an inflation demonstration.

Speaker2:
We know a lot of times, Mike, when people talk about their retirement years, they think about the magic number. What is this big lump sum that I need to save or invest or have in my, um, you know, accessible to me? As you know, what do I need to have? What's the number when I retire? Well, you know, we often will say that income is actually much more important than that one big number. But just as a matter of illustration here, and to show how much inflation is impacting things, um, we're going to talk about the magic number because there's a new report out showing that it's at an all time high.

Speaker3:
It is a new study that was published by Northwestern Mutual found that this, quote, magic number that Americans believe they need in order to retire comfortably hit $1.46 million this year, which is the highest level ever on record. And that new magic number represents nearly a 15% jump from the 1.27 million that they said that they needed for retirement in order to feel comfortable just last year, okay, easily outstripping the current 3% inflation rate in the United States of America.

Speaker2:
Yeah. Over the past five years, that number has surged the magic number 53%, 53%. Over the past five years. It was, um, about 951,000 reported in 2020, according to that financial services firm. So it just shows you the, um, you know, we talk about compounding interest a lot and how that just sort of, uh, impacts you as far as you're paying interest on top of interest, on top of interest. Well, yeah, the same sort of goes true in the opposite direction for inflation. You're spending more, you're spending more, you're spending more each and every year. Even if that rate of inflation comes down, the cost of living is still going higher each and every year, even if it slows down like it has. You know, thankfully, the official rate of inflation is not, you know, upwards of nine, almost 10% like it was, um, a couple years ago. Thank God that that's not the case. But it's, um, still, you know, if it's 3% or above, that's just adding on to the cost that we're already paying that are already inflated from where they were before.

Speaker3:
Yeah. No doubt. I mean, like you said, just a few years ago, we were talking about, hey, you know what, a million bucks in retirement savings. You can live pretty comfortably off of that when you combine that with, you know, your Social Security. And if you've if you are lucky enough to, to have a pension, well then, man, that was even more awesome, right? But, you know, this study comes as Americans continue to confront stubbornly high inflation, that what has it done rapidly eroded their purchasing power and in some cases actually forced them to utilize their retirement savings as a financial lifeline. I talk to people each and every single week who have had to tap into their 401 K's, or their 403 B's or their IRAs, and call it a hardship, especially over the Covid years where many people were out of work and not able to create a living. Well, having to have done that, number one must have felt like a last resort for people, and thank God that they had it to to count on however comma, um, that has drastically reduced their income or what will become their income in retirement. So, you know, we want to encourage all of our listeners as well as our clients to stay focused on the size of their retirement income, not this one big magic number.

Speaker2:
And that's the thing. You can reduce the risk in your portfolio. You can also establish a personal pension that creates a lifetime income stream. It all has to do with kind of one really pretty simple strategy. You just got to you got to know that it exists, which means educating yourself, which to my mind means meeting with Mike Zeno and going to the website or giving him a call.

Speaker3:
Yeah, that is a a very popular phrase these days. Right? You need to educate yourself. And normally that's meant, you know, in an entirely different context. But people you need to educate yourself on the tools that are available for you in retirement. And if with a little bit of planning, you can create another source of income that you can rely on that never outlives, um, you. In other words, you can't ever outlive that source of income that is just going to make retirement much more peaceful and give you that peace of mind and confidence that your money will last at least as long as you do. And that you cannot put a price tag on peace of mind.

Speaker2:
Yeah, 100% is absolutely true. And so go to Money Matters with Mike comm. Once again money matters with mike.com. Or call Mike at (704) 560-1573. All right. So if you are listening to the show and you are somebody who is in your 50s, I would imagine probably a good chunk of our listeners are in that particular age group. And even if you're just outside the 50, if you are in your 40s, if you're in maybe your early 60s as well, we've got some financial moves to make. But these are especially geared toward people who are in their 50s. Um, and why would we want to focus on that particular age group in this segment here, Mike.

Speaker3:
Well, I mean, people in their 50s, Matt, they often have multiple financial responsibilities, and that could include paying for children, paying for college, caring for elderly parents, all while they're trying to save for retirement. So if you find yourself in your 50s and you're thinking about retirement, here are three smart decisions three that could save you a significant amount of money in retirement. So the first one we're going to talk about is long term care insurance. When you're in your 50s, especially your younger 50s, securing long term care insurance to cover expenses in your later years. That is just smart planning, because health care is one of the largest expenses for retirees. It takes up more of our lives when we are in our first few years of life, and then once again, once we are older and in retirement. And the median price, the median price of a private room in an assisted living facility was $64,000 in change per year. So that's the first thing. Matt, what do you think about that?

Speaker2:
I mean, that, ladies and gentlemen, should be a wake up call to anybody. Odds are, you know, that we are going to a lot of us have to utilize long term care, and we may wind up in a nursing home and so or an assisted living facility. And so think about that $64,000 plus a year, um, not small change. And so that really does put into focus the need for some type of coverage for long term care.

Speaker3:
Absolutely. And if you have a family history of needing care or you have a family history of stroke or cancer or any type of other debilitating disease, then you should absolutely look into that. And even if you have no family history of any of those things, the fact of the matter is, is that people are living much, much longer than they did even 2 or 3 generations ago, which means that the potential for that need is also rising and securing a long term care type insurance policy when you're in your 50s can help offset those costs down the road.

Speaker2:
Yeah. Another thing that we want people in their 50s to do, another financial move to make, I should say, is to increase your 401 K contribution to boost your retirement savings. It's kind of like, you know, taking advantage of the catch up there.

Speaker3:
Absolutely. Chances are, if you are in your 50s, you're beginning what are going to be the highest income producing years of your life. And what do a lot of people do? They take that money home and they spend it. They buy the new sports car, the, you know, the shiny sedan, they buy the boat, they they buy the jet skis, they buy the new set of golf clubs or join the golf, uh, club itself. Okay. And so if you know, if you're able to redirect some of that spending, it is going to benefit you over the long term. So number one, if you're if your employer offers a 401 K or a 403 b, or if you're a federal employee, the TSP, which is the Thrift Savings plan, please take advantage of that. And if they offer you a match, folks, this is free money where you receive an immediate 100% return on your own contributions. Now, every employer obviously is going to match at a different rate and have a different vesting schedule. But, you know, people that don't at least take advantage of the match. You're telling me that you don't like free money, which makes no sense to me whatsoever. Think about this for a second. A 55 year old who earns around $80,000 a year could have an additional $16,779 in their retirement fund at 67. And that is just with a 1% increase in contributions. So, I mean, it is very important to get your employer sponsored plans working as hard as you do. And we invite you to give me a call and receive a free 401 K or 403 B or any of your employer sponsored plans review so that what I can do is analyze the fees you're paying. I can analyze the risks you're taking, and then I can correlate all of your assets. So do me a favor. Pick up a phone 704 5601573 and contact me today.

Speaker2:
Or you can go to Money Matters with Mic.com as well. Another step to take if you're in your 50s here, Mike, is to diversify your tax buckets by adding money to a non-retirement investment account.

Speaker3:
Every dollar withdrawn from an IRA is actually taxed as. Ordinary income in retirement, while earnings on brokerage accounts are taxed at a much lower capital gains rate, and so IRAs can only be opened up by individuals. But you can own an investment account jointly with your spouse, for an example. And if you don't exceed the earnings limits, we believe that contributing to a Roth IRA each year is a great way to build a nest egg of tax free wealth, so you and your spouse can each do this to maximize your potential for tax free retirement income. So that's the Roth IRA. And I'm going to add to that. If your employer offers you a Roth option in a 401 K, 403 B, or any other type of retirement savings plan like the Thrift Savings plan, then I would absolutely consider paying the tax now on the seed. Why? Well, you know, the tax rate as opposed to deferring to a later time in life when taxes may or may not, um, go up. Right. The government has a history of doing what, Matt? Changing the rules on people. So, folks, take charge of your retirement and your financial future today. And as loyal listeners, we are offering you an opportunity to schedule that complimentary retirement and financial consultation with our expert team. Again, no charge, no obligation. Give us a call.

Speaker2:
That's right. And you can call that number at 704 5601573 704 5601573 is the number. Well a little more than five minutes to go here in the show. Mike, let's spend our time talking about a very important topic that has to do with a lot of the things that we talk about around here. And that is, oh, the national debt. Um, the it's been sort of at the same kind of level over the past few weeks that we've been talking about it. We've been checking in on it on a week by week basis. It's been a little over 34.6 trillion still climbing, but $34.6 trillion is um, boy, that's a lot of money.

Speaker3:
That is a lot of money. And for a like, it seemed like every week here about a month ago, it was jumping by $100 billion each and every single week. It's still holding right now at that 34.6 trillion with a T. And folks, that is 12 digits after the 34. So if you want to write that out, you can write down any digits you want. Just write 34 and write 12 digits after that. It's an enormous number. And I think the reason that it has been, you know, staying kind of, um, stagnant right now is that the government is throwing a lot of money at it to try to pay that off. But guess what? It's they're paying. They're throwing all that money at it, and yet it's not being reduced at all. In fact, it's actually climbing every single minute that we've been talking on the airwaves today. And so here is why Americans should be concerned about the US national debt level. Um, the first two things I'm going to mention are Social Security and Medicare concerns. And the national debt can absolutely impact the sustainability of social safety net programs like Social Security and Medicare, which are absolutely crucial for pre-retirees and retirees. A high national debt can strain those programs, potentially leading to reduced benefits or increased eligibility requirements. So why are Social Security's finances under pressure? Well, beneficiaries are living longer, which means that the program pays recipients over a much longer period of time, you know, and as a result, without any action from lawmakers.

Speaker3:
We've already mentioned this repeatedly on past shows, the Old Age and Survivors Insurance Trust Fund that supports Social Security benefits for retirees is estimated to run dry in only nine years in 2033, which means that people are going to get a significant reduction in payouts. And then economic stability and retirement savings are impacted by the national debt because that leads to inflation, higher interest rates, reduced economic growth, all of which can and will erode the value of your retirement savings. And then finally, the impact on future generations, folks, is real. It has long term implications. Our national debt does for future generations, which includes all of our listeners, children and grandchildren. As the debt grow grows, it leads to higher taxes. It leads to reduced government spending on essential programs, potentially burdening future generations with even greater financial challenges. So folks, it is serious time to get. Serious in 2024. This is an election year, and there is already so much uncertainty in the world that affects both retirees as well as Pre-retirees. So please don't wait until you're ready to retire before you start planning.

Speaker2:
Yeah, that's as we always say. You know, hope is not a plan. So get an actual plan, a formal plan in place. Just go to Money Matters with Mike comm. Or you can call Mike at (704) 560-1573. It's this week in history. Plus some big things happened this week in our history. Uh, we'll start with April 22nd. Uh, big birthday. Uh, on this date, 1937, retired American actor and filmmaker Jack Nicholson was born. Um, do you have yourself a favorite role that Jack Nicholson ever played?

Speaker3:
Mike I would go back and forth between One Flew Over the Cuckoo's Nest and The Shining. I think those were my two Jack Nicholson, uh, you know, movies by far.

Speaker2:
Yeah. I'm telling you, it's, um, a very diverse, you know, actor because he did a lot of comedies. He did a lot of those, like, scarier, um, you know, thriller type movies as well. But he's really, um, widely regarded as one of the greatest male actors of the 20th century. He is, uh, five decades long. Career includes three Academy Awards. Uh, another big historical moment on the April 22nd date, uh, that happened in 1976. Barbara Walters was the first female US Nightly News anchor there. Mike.

Speaker3:
Yeah, I used to love listening to her. She was awesome on the news. She was later inducted into the Television Hall of Fame in 1989, and also received a Hollywood star on the Walk of Fame in 2007. How cool is that?

Speaker2:
Yeah, absolutely. Just a legend there. And then on April 23rd, one more we'll get to probably one of the biggest fails of all time from a business standpoint, at least from a big you know, there have been a lot of businesses that have failed obviously themselves, uh, due to different circumstances. But for my big like legendary American company boy, one of the biggest fails of all time was New Coke, which was released April 23rd, 1985.

Speaker3:
I remember those commercials, you know, from New Coke, and I also remember how disgusting it tasted. I mean, it was so largely unpopular. Uh, I grew up in Atlanta, so I'm speaking from from dead experience on this 40,000 letters, complaint letters were sent into coke in anger and disappointment over the new taste. And then they actually tried to rebrand it, rename it Coke 2 in 1990. But again, epic fail. They ended up discontinuing New Coke or Coke two, whatever you wanted to call it in 2002. And for anybody who likes Coke, thank God they did. So, uh, yeah.

Speaker2:
It was not. It was not pleasant and not pleasant from a business standpoint either. But that wraps up this show for us, and we'll do it again next time. Sir.

Speaker3:
Matt, thank you so much for what you bring to this show. I mean, I couldn't, uh, you know, be as as as thorough as I am without you teeing up everything for me. So I thank you for that. But most of all, I thank our listeners, whether you're listening to us live on Rye or whether you are listening to us on a podcast anywhere around the globe, we do this show for you guys. So hopefully you got something out of today's show. And if you did, please share it with your friends, family, and coworkers. Okay, whatever you're doing this weekend, I hope you enjoy it to its fullest extent and as always, make it a great day.

Speaker1:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704 560 1573. That's 704 5601573 not affiliated with the United States government. Mike Zeno 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.

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