MMWM 7-8-22 FULL SHOW.mp3: Audio automatically transcribed by Sonix

MMWM 7-8-22 FULL SHOW.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Matt McClure:
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.

Matt McClure:
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.

Mike Zeno:
What's up? What's up? What's up? Happy Saturday, people. It's Mike Zeno coming to you live from Fort Mills, South Carolina. And what a great day to be alive in these United States of America. It is summertime and the good old U.S.A. We have got an exciting show for you today. Joining me today is the one and the only, Mr. Matt McClure. Matt, how are you doing today?

Matt McClure:
Doing well, Mike. How are you? I know a lot of people who would say I'm glad that they're very glad that I am the one and only Matt McClure. But I appreciate.

Mike Zeno:
That. Not a problem. I'm doing well. You may hear a little rasp in my voice. I said a lot of words this past week. I did a couple of retirement workshops and had 22 appointments with pre-retirees and retirees that were getting ready to protect their money and wanted to make sure they never ran out of it. And as a result, I ran out of words, ran out of voice toward the end of last week. But everything's healthy, thank God. Tested negative twice for COVID. But I'm just now starting to get my get my voice back so everything is good to go again. Excited to be here with you guys today.

Matt McClure:
Yeah. It's it's never good when you're when you're trying to be on the radio. Trust me, I know from experience. And you have no voice who that's that's not that's a scary, scary proposition. But I'm glad.

Mike Zeno:
Feeling difficult for.

Matt McClure:
Sure. That's right. That's right. I am glad you're feeling better, though. And the website, folks, if you want to learn more about the show, by the way, just as we start off here, this, of course, money matters with Mike. Money matters with Mike Dotcom. We made it easy for you. Money matters with Mike Rcom. The phone number is 700 45601573. And of course you can subscribe to us as a podcast. Also, wherever you listen to podcasts, leave us a rating there. We would really, really appreciate it. Well, Mike, as we start off our conversation here today, we've got, of course, a lot of volatility still in the stock market. People still worried about inflation. Gas prices are still high. What kinds of things have you and your your clients really been kind of stressing out over this week?

Mike Zeno:
Well, the value of their dollar and how it's been so greatly diminished over the past several months of 2022. And they're concerned in making sure that they have enough to last them through their entire retirement. That's that's been weighing heavily on people's minds. And people ask me all the time, Hey, Mike, do you have any tips? And I'm like, Yes, I do. Absolutely. Come book a consultation for sure, because I need to find out a little bit about you and your situation and what we're working with and what your game plan is. And so it really just depends on the individual and what they're trying to accomplish. But the biggest thing weighing on people's minds is definitely the diminishing value of their dollar and what it's able to buy. I mean, things were able to people were able to buy a lot more last year than than they could this year. And we're noticing that. I mean, we've had a running joke for a few weeks now about me and my fill ups and my truck. This week, I set a new record, $137.65. It cost me to fill up my truck. And so I definitely felt the pain at the pump this week.

Matt McClure:
Yeah, that it's not fun. One One of the least fun experiences of all of our lives right now is going to the gas station, pulling in and seeing that price at the pump, although, you know, it has come down from record highs over the past couple of weeks. But still, I mean, we're paying a lot more than we were certainly this time last year or just about any time in in the country's history.

Mike Zeno:
Yeah, unfortunately, I didn't get to fill up in good old Carolina. I had to I had to go across two state lines. And I was up in Virginia where my retirement workshops were up there doing a lot of work in in the Norfolk and Virginia Beach area. And as I was heading back down, I had to I had to fill up. So I had to pay Virginia gas prices. So that's why that's why it was a new record for me.

Matt McClure:
There you go. You're you were feeling the pain. Definitely. Well, we always like to share a little bit of financial wisdom with our list. As in the first part of the show. And this week's quote comes from one of our founders, Benjamin Franklin. And the quote is this, Mike, beware of little expenses. A small leak will sink a great ship. Listen, one more time. Beware of little expenses. A small leak will sink a great ship. I think that one hits home for a lot of people.

Mike Zeno:
I think it does, too, because it is real easy to spring a leak in today's economy. And while you might not have control over the economy itself, you absolutely have control over the actions that you take. And so you need to be aware of some different ways that you can take proactive action to make sure that you don't have any leaks. And then if you do identify that you have a leak or two, here are some action points that you can take to to kind of plug those leaks. Number one, I guess, would be to keep track of your spending. It is really, really important to know where your money is going, because if you know where it's going, it's going to be a lot easier to make the changes that you need to. And I always suggest my clients literally track every single penny they spend over the course of a month. I think that's a solid idea. What do you think, Matt?

Matt McClure:
Oh, definitely. And I you know, when it comes to those smaller expenses and really making a big impact on your spending, on your budget, like I just take, for example, if you have a streaming service that's like 799 a month and you're like, oh, well, it's not such a big deal, 7.99 a month and you and you put it on auto pay on your on your card or in your bank account, you forget about it. Well, pretty soon you might have three or four or five different streaming services because everybody's got a streaming service these days and all it all really adds up. And I mean, that's one thing that I know that I've been guilty of in my spending. Those little things like especially the subscriptions and those streaming services really add up and they're easy to forget that they're even in your life because you just get used to watching them and and not necessarily where the money is coming from to pay for them.

Mike Zeno:
Absolutely. Another thing that you can do is to separate your wants from your needs. And I know this is a tough one for a lot of people because you might see that that thing, whatever it is for you. But I know that there was a point in time where I really wanted to upgrade my television. We were coming. It was at the end of Super Bowl or football season were coming into the Super Bowl. And I really had to think, hey, do I really need that 75 inch is or is my 65 inch going to be plenty? Or if you have a 42 inch, do you really need the 50 inch? If you're a golfer, do you really need that new set of golf clubs or is your old set performing just fine? The funny story is, is I like to play golf. I'm not very good at it. But I went in to Golf Galaxy to hit some golf balls with their new technology. I figured, heck, it's been 20 years since I bought a set of golf clubs. Technology has to have changed. Well, my swing is so bad that it didn't matter what club I had. I was literally hitting all of them within about three yards of my clubs. The guy even told me he goes, I'd love to sell you a set of irons, but you're hitting yours just as far as you're hitting these. So that told me right there, it's my golf swing, not the equipment.

Matt McClure:
So sadly, the upgrade wouldn't have done any good in that in that particular.

Mike Zeno:
Shot at this at this juncture? No, sir. Another thing is, is we're coming into summer. Right. And we just had the 4th of July kickoff Memorial Day. Before that, you've got to be careful about spending a significant amount of money on a periodic purchase like a vacation. And so you might feel good while you're taking that vacation, but just spending an extra 500 to 1000 now can make a long term detrimental effect in your retirement plan. And so you're going to you may end up wishing that you had that money later.

Matt McClure:
You know, you're on vacation. You're not you don't really have your your eyes on the prize as far as long term planning, because you're in the short term, you're having a great time relaxing and chilling out and having fun with family, friends and whomever. And that's something that I have been really guilty of, is not really considering that impact on a longer term scale.

Mike Zeno:
America is the land of instant gratification, isn't it? Oh, yeah. I mean, people want it and they want it now. And one of the things that has made it very easy to get it now are credit cards. And so avoid using credit cards if you can. I know a lot of people that like to use them for everything. And then if they can't pay the bill off at the end of the month, not only are they having to pay for the purchase, but they're adding that compound interest that's working against them instead of working for them. And it's prolonging how long it'll take them to pay it off. So unless you're able 100% able to pay off your bill in total at the end of every single month, please avoid using credit cards for those instant gratification purchases, for sure.

Matt McClure:
Yeah, definitely. And that's one of those things, too, that you've got to be careful of. As far as you know, if you leave that balance on the card at the end of the month, you know, the Federal Reserve is raising interest rates to combat inflation right now. And that is one of the places that people are really in their everyday lives going to feel it because they are you know, those credit card interest rates are already high compared to any other interest rate that you're going to pay, basically, and they're just going to get even higher. So if you've got that money sitting there in your account, you might think it's not such a big deal. It can be if you maintain a balance on those credit card accounts.

Mike Zeno:
It can. Absolutely. And another thing that we're doing, especially in the summertime, because, number one, there's more daylight and we're out a lot more. When we're out a lot more, we tend to eat out a lot more. And so just because you're on the road and you're out doing something, enjoying summer activities doesn't mean that you also have to eat out. If you if you can just cut that down. I mean, think about it. A 10 to $15 pizza, if you're doing that once a week, can cost you over $500 a year. And that's just a pizza. Yeah. So I'm not even talking about, you know, going out on date night or a family night or anything like that. We're talking a significant amount of savings that people can save if they just monitor how much they're eating out, saving regularly, and having some of your paycheck directly deposited into some form of savings account. Although savings account aren't paying a lot of interest right now, just getting in the habit of saving instead of spending will will help you out in the long run as well.

Matt McClure:
Yeah, that's that's one area where I know that I can be better at. Also, one thing that I've actually found helpful is an like an automatic way to save. I know a lot of like online bank accounts will have a you know where you can set up an automatic transfer every week and it can be, you know, whatever amount you want to set. But just set up that automatic transfer once a week or every other week. If you get if you get paid biweekly, let's say, and you want a portion of that paycheck to go into your savings account, set it up on the day that that direct deposit comes in to transfer that money over to your savings account. And then you're automatically setting it aside. You don't even have to make any effort, which is, I think, right up everybody's alley.

Mike Zeno:
Absolutely. It's out of sight, out of mind. And there's another app that I really like, especially for younger folks. I have my my my 21 year old doing it. It's called acorns. And basically it just rounds up every purchase you make. It takes those pennies and throws it into an account that invests it in the stock market, which is awesome when the market's doing great. But when the market's down, obviously it's not performing the same. But I just keep telling my daughter, Hey, you're just buying those shares at a discount, so don't worry about it. It'll come back.

Matt McClure:
Exactly. Well, and here's the thing. I actually have acorns as well, and I have an automatic I think it's only it's not much. It's like ten bucks or something every every paycheck. But but it goes that amount also automatically goes into acorns and it gets invested. And I've sort of been afraid to open the Acorns app here lately, but usually it's been a fairly pleasant experience.

Mike Zeno:
No doubt. And I think another thing that people could try to do is every at least every six months, if you're not doing this anyway, you should is check your insurance policies. As with everything, insurance tends to go up over time and you might be surprised that just by checking and shopping it, a different carrier can save you a couple of hundred bucks, if not more, on a six month basis. And so I know one of my good buddies just he went from I can't remember which carrier he had and he'd been a carrier, I think it was Geico he had for a long, long, long time. And they were going to raise his rates by like 25% and he was able to actually save 25% by switching, which netted him a 50% savings. So yeah, it's crazy what it would have been. Yeah, yeah, I think I think that's that's good.

Matt McClure:
Yeah, that's a good one too. You can really can save a lot and there are apps out there for that as well. I've actually done that here within the past couple of years and gotten a better rate for myself. So yeah, good, good advice there.

Mike Zeno:
Yeah. And you could cost yourself a lot more money in the long run by trying to manage your own finances. There comes a time for everybody when they just simply can't manage their own finances. And so it's it's very important to seek the help of a professional in order to make sure that not only are your ducks in a row, but to ensure that your family has a plan in place should the unexpected occur and you pass away.

Matt McClure:
Yeah. So you really. Yeah. You really want to have that plan not only for your life, but for theirs as well. And Mike, one of the things I know that you like to offer folks is a free, full financial consultation. What does that look like when you sort of start that process and get to know someone in their particular financial situation?

Mike Zeno:
When you contact me, what you hear today on the radio is what you're going to get in a one on one consultation. I'm as real as it gets. I don't try to talk over people and use big, haughty financial terminology that you won't understand. I do break things down in the layman terms, and the biggest thing is, is that you're only going to work with me if it's right for you. I'm only going to work with you if it's right for me. My goal is not to be your friend, but to kind of get you to wake up a little bit and start looking out for yourselves. Because most people haven't been looking out for themselves for the last 20 to 30 years. And when we're talking about retirement, it's time. So I want to find out what your goals are, what your dreams are, you know, do you have a plan already in place? Maybe it just needs a little tweaking. And so working with me will analyze your entire financial situation and then we'll find out if there is a way that we can work together to where it's mutually beneficial.

Matt McClure:
Money matters with Mike dot com is the website if you want to schedule that free consultation folks money matters with Mike. Com and the number the phone number if you prefer to give Mike a call 700 4560 1573 700 45601573. Well, just about time here for us to take our first break of the program, but we're going to come back in just a moment and we'll talk about health care costs. We'll actually hear a little bit about about that during the break. And then we'll come back and discuss a little bit more about health care costs in retirement, how much people need to to have on hand. And just answer some of those questions that I know a lot of people do have. This is Money Matters with Mike. Stick around. We're going to come right back and talk more money.

Jill Gonzales:
Money must be funny in the Christmas.

Matt McClure:
More money, more problems. Not on this show you're listening to. Money Matters With Mike.

Matt McClure:
I'm Matt McClure with the Retirement Radio Network. Next time you head to the pharmacy, you could be in for some sticker shock. So do you need to plan now for higher drug prices in the future? First, let's spell out the problem, and it's not necessarily a new one. Prescription drug prices have been rising faster than inflation for decades, according to AARP. To put it in perspective, the group says if gas had risen as much as prescription drugs have over time, regular unleaded would cost more than 12 bucks a gallon by now. For seniors on a fixed income, being able to afford prescription drugs is essential. Ron Mastro, Giovanni of Health View Services recently told CNBC.

Mike Zeno:
Whether you're affluent or whether you're the average person, I'll tell you what. When you look at your Social Security check, you're paying for health care.

Matt McClure:
Prescription drug insurance plans provide some coverage, of course, but not all plans are created equally. And it's important that you know the details of your plan, especially what it will and won't cover.

Mike Zeno:
You really need to look at the coverage in those types of plans to determine what makes the most sense for you.

Matt McClure:
Lawmakers in Washington have been trying to come up with solutions on several fronts. They include things like allowing the government to negotiate drug prices, capping the cost of insulin and more. But those proposals have stalled. They were part of President Biden's build back better plan. It passed the House, but that massive piece of legislation hit a roadblock in the Senate, even though surveys show big majorities of U.S. adults approve of those measures. It seems like everyone agrees something needs to be done to control costs, but just can't agree on exactly what that might be. In the meantime, what should you do to prepare for higher drug prices in the future? Well, putting more money in savings surely couldn't hurt, according to the experts. But that can only go so far. And what can you do now to save money at the pharmacy? Well, that is a key question to consider as inflation continues its upward climb with the retirement. Radio Network. I'm Matt McClure.

Matt McClure:
High inflation got you down. This is your weekend. Pick me up. You're listening to Money Matters with Mike.

Matt McClure:
Welcome back. This is Money Matters with Mike. I'm Matt McClure here alongside Mike Zaino, talking all things money, particularly planning for retirement. You just heard a little piece there about how much more expensive prescription drugs are these days. And, you know, we talk a lot about inflation here, Mike, and that the fact in there that was over the last several years had gas prices gone up as much as drug prices have? Gas would be like over $12 a gallon right now. I mean, that's pretty shocking. As an illustration, how much more expensive prescription drugs are these days?

Mike Zeno:
It is absolutely unreal. And unfortunately, that's why you see a lot of people trying to get black market drugs and going to Canada and Mexico and then they're not getting the drugs that are actual drugs that they wanted and end up doing a lot more harm than good. I wish the government would get a handle on prescription drug prices for sure. Yeah, absolutely. No reason that people should be paying through the nose, whether it's for insulin or whether it's for inhalers or just everyday pills that folks take that keep them alive.

Matt McClure:
Yeah, stuff like that. That's just kind of crazy. When people need these drugs to survive, it doesn't need like that kind of price gouging especially is just, you know, egregious and and just bad. It's just full of all kinds of bad will and just nastiness. In my opinion.

Mike Zeno:
The hospitals are no better either. I remember when I was in the hospital, they gave me two Tylenol and tried to charge me $800, $400 apiece for the Tylenol I took. I looked at them and I said, I'm not taking those. Take them off my chart. I don't need two Tylenol for $800 because that's just to me is is asinine. If I could say that on the radio.

Matt McClure:
Yeah. You're you're like, I'll go absolutely ridiculous.

Mike Zeno:
Yeah.

Matt McClure:
You're like, I'll go down the street to the to the drugstore. And, you know, I have them for like $0.04 apiece, you know, like.

Mike Zeno:
I'll have a several years supply for $800. You go jump in a lake.

Matt McClure:
Thank you. Right.

Mike Zeno:
Another one of my buddies, he has to take an infusion. And this infusion, it's the only FDA one that's approved for his condition. And that one drug is $1,000,000 a year. That one drug is $1,000,000 a year. And so, I mean, what do people who don't have insurance or who cannot afford that? What what do they do? They they die, right. Because they can't afford it. And that's just a travesty in this country. Nobody should be in those dire circumstances because they can't afford their drugs.

Matt McClure:
Yeah, 100%. And. That sort of leads us into, you know, the question of when you're looking at retirement. How much money do people need to have specifically for health care costs? I mean, you know, the statistics have shown us this and people's personal experiences have shown us this for years and generations, that the older you get, the more you need to use the health care system. Right. So how much is that going to cost? And and, you know, drug price increases included. But, you know, the ridiculous price gouging and things sort of set aside for a second because some of those things you can't really predict, you know, but how much are people really going to need for those health care costs in retirement?

Mike Zeno:
Well, according to a Fidelity retiree health care cost estimate, the average retired couple that's age 65 and this year, 2022, they may need approximately $315,000 and that's after tax savings just to cover their health care expenses in retirement. And that's a lot of money.

Matt McClure:
That really is a.

Mike Zeno:
Lot of money.

Matt McClure:
That's a lot of money, especially if you're talking about, you know, middle, middle income folks who are, you know, just trying to save as much as they can or or, you know, invest as much as they can for their retirement. And trying to build up that, you know, retirement income for themselves, that's a huge chunk of change. And this is even taking into account, you know, people that have their own Medicare policies, Medicare supplements and all of that sort of thing to help cover a lot of these costs. The out-of-pocket still may be $315,000 for a couple to to have enough money to pay for their health care over their retirement. And you've got to take into account, too, people are living longer.

Mike Zeno:
Yeah, and I was exactly right. The amount that you'll need will depend on when and where you retire, how healthy you are or how old you are at retirement, how long you, you, your people live from longevity standpoint. So everybody's different. But I mean, if that's the average, heck, I know a lot of people who don't even have 315,000 total. And so one catastrophic health event can wipe out their entire savings. And if they don't have a plan in place that addresses those needs or those potential needs, they could be forcing medical bankruptcy.

Matt McClure:
Yeah, which is just a completely tragic situation to be forced into. Like you were saying, nobody should have to deal with that in in this country, in any country. But, you know, especially in the United States, where, you know, we have literally, you know, most advanced health care in the world. You know, you shouldn't have to either go broke paying for it or not be able to pay for it and and die from whatever disease you have. Let's just not it's just not right. And so that's a that's a great point. And one thing to that that I think a lot of people might kind of overlook and we'll talk, I think, a little bit more about about nest egg versus income a little bit later on. But is how, you know, how do I fund this? Well, an annuity could be one way for people to consider putting their money in now to be able to pay for a lot of these expenses in retirement later.

Mike Zeno:
Yeah, again, everybody's different. So annuities are great for a lot of people. They're not great for everybody. But no matter what situation you're in, we have a solution to address these needs. And I just want to impress that upon our listeners greatly in that, you know, there is no one size fits all and we do take each person on an as is basis and we'll look at everything that you've got going on in your life, what you have, what you don't have, what you're making. And we'll try to put together a plan that addresses all of those needs. And the important thing is to have the plan in place, because if you are a ship in the wind with no rudder, you're going to go wherever the wind blows you, right? Yeah. And so it's it's important that you have that rudder, that plan in place, that will address those needs if and should they ever occur. So that's one of the things that we will definitely do in our consultations as we get to know each other, is put that plan together that allows you to address any of these catastrophic type health challenges that people run into, whether it's chronic, critical or terminal illness, for sure.

Matt McClure:
Yeah, and that's one of the things too. And I love that you always stress that because it's not a one size fits all thing, because what kind of the way that I like to think about is what's good for your brother in law. Your what was great for your mom or your dad or your relative or neighbor down the street is not necessarily the right thing for you. So that's why it's important to talk to a professional, somebody who knows about all of these things and about these about the different options that are out there. Because, as you say, you know, I mentioned annuities, but but there are a lot of different options for people to have money. Not only, you know, maybe not only necessarily for themselves, for their life, but then also to pass on some wealth to the next generation.

Mike Zeno:
Absolutely. And it really depends on what your withdrawal plan is. And you may be scratching your head going withdrawal plan. What's that? And if you don't have a strategic withdrawal plan, then again, you're just planning to fail. Money in the bank is ideal, but without a plan you could end up running out of your savings with many years left. To live. And so having a strategic plan includes different methods for withdrawing your money and using it as cash flow, in addition to allowing what you still have in savings to continue to work for you. And so whether it's coming from your 401. K plan, an IRA, a mutual fund, bonds, or just your bank accounts? Older adults, especially especially, need that strategic withdrawal plan. So some things that you could do, number one, would be to start small. And what do I mean by that? Well, we've heard of a rule called the 4% rule. And that rule just says, hey, if I withdraw 4% of my money, it should last me 25 years. Four times 25 is 100 100% of your money. That is a great general rule. Some people may only need to take 3% and some people may be able to take six or 7% again, depending upon their current situation, how much they have, how old they are, what their longevity is expected to be. And so starting small would be one way and then increasing that every single year that you are in retirement. Another way to do it would be to withdraw money from one account at a time.

Mike Zeno:
So I would start with taxable accounts because you can withdraw that money so that ultimately you are paying that tax at the lower rates first and then go with your Roth accounts last. Another way to do it would be to withdraw proportionately and that you would spread out your withdrawals across all your accounts to save money so that you're able to reduce the taxable impact. So depending on how much you have in tax advantaged accounts versus Roth accounts or savings accounts where you've already paid the tax, that will determine which of those accounts you should withdraw from. And I think a very important part, too, is to only take out what you need. Keep as much money in savings, whatever vehicle you're using, so that you can get it to continually work for you instead of working against you and then choose a time frame. So whether that is monthly, quarterly or yearly versus hey, just whenever I need to, I go in there and take money out of my account. Because if you get into the habit of just taking money whenever you need to take money, you're going to find that you need to take money a lot more and you're going to end up depleting your accounts that much faster. So I can't hammer it in enough that without a plan in place and some general knowledge of how much money you have and how long you're going to need it to last, it's very easy to spend it quickly.

Matt McClure:
Yeah, absolutely. That that's the thing like I and whether it's financial planning or anything, I'm the kind of person and I think a lot of people are this way, whether they know it or not, that I've got to have a structure in place, you know, and I always use the the illustration myself of like, you know, diet, weight loss, exercise and all of that kind of thing. I am the kind of person who actually has done well in the past on those you know what? They used to be on DVDs, now they're streaming and all that. But those like exercise programs that you do for 90 days or, you know, 60 days or whatever, because it's a structured thing and they give you like the calendar and you can track your progress and all of that. And I'm like, Oh, this is great. I have these goals to meet. I have I know going in, I'm doing this workout this day, I'm eating this on this that, you know, it's like I just have to have that. And I think for a lot of people, it's that way. It's really helpful.

Mike Zeno:
Absolutely. I'm glad those worked for you, because if I went on a 90 day on the 91st day, I'd start eating everything that's in sight. And by the end of the 120th day, I'd be right back where I started, you know, before I started the 90 day challenge, because I got to do it every single day, or at least, you know, Monday, Wednesday, Friday kind of thing and just do it all the time. And with weight loss, it's it's a very, very simple equation, right? Calories in, calories out. If you just stop putting it in your mouth, you won't gain the way.

Matt McClure:
There you go.

Mike Zeno:
And it's starting talking to myself.

Matt McClure:
Yeah. Oh, and you're talking to me too, because I know all about that. You know, it's all and it's like less calories in than the calories that you burn, you know, burn more calories rather than you take in, I should say, to turn the phrase there a little bit. That is that's the formula. It's it's tried and true. So that's what you got to stick to. But see, here's the thing. Finances can be a lot more complicated than weight loss when it comes to that. So that's why people need to to really learn about all of these different options that they have and, you know, get that plan really in place.

Mike Zeno:
Yeah. And, you know, a couple of those options or whether to invest in a traditional type individual retirement account or a Roth IRA. And I'm I would say that you'd much, much, much rather have a Roth than a traditional. And what's the difference? Right. Well, the Roth, you're paying the taxes now at a known tax rate as opposed to deferring it to a later potentially higher marginal tax bracket. And so you have the opportunity to to we say divest the IRS, strip them of their power from becoming a partner in your retirement accounts by going ahead and paying the tax now so that it grows tax free for the rest of its life. And another benefit with the Roth is that there are no required minimum distributions. So some of you out there in listener land, you might be very familiar with RMDs as they're abbreviated and called. Some of you may have no idea what I'm talking about. Let's just say that you have money in a 401. K and you have been very blessed and you've made money and you don't really have any plans to touch the money inside of your 401. K. Whether or not you roll it into an IRA does not matter the year that you turn 72, now the government is going to come knocking on your door. What are they going to come knocking looking for? Well, for you to pay them tax money. And your uncle is very greedy. He has his paws just going. Gimme, gimme, gimme, gimme, gimme. Now, mind you, you don't need to take the money because you're in a good position. But he's going to say, too bad, so sad. Pay me. And so you're going to have to shell out some what are called required minimum distributions in order to pay the IRS. And so when your money is in a Roth, you don't have to worry about required minimum distributions. And so you're able to leave that tax free benefit as well to your beneficiaries with no RMDs for them. And it just bottom line, allows your money to grow tax free.

Matt McClure:
And that's a win for us as the little guy. That's always good thing.

Mike Zeno:
Yeah. And one of the biggest mistakes that people make when planning for retirement is they think that the number they have in those accounts is actually their money. And it's not because if you have 500,000 in a 401. K that you have decided to defer your taxes until a later point in time. Well, let's just conservatively say 20% of that is gone and 100,000 of that belongs to Uncle Sam. It's not your money. And so it's a big wake up call for America when it's time for them to start taking the money that they've saved so diligently over the course of their lifetime in traditional type savings vehicles that are tax deferred. So don't forget that 401. Ks and IRAs, if they are traditional accounts, they are tax deferred account. You still owe the government taxes on the money. And as soon as you take any of those distributions or required minimum distributions, you're going to have to pay the taxman. Yeah.

Matt McClure:
And you also think, you know, too, Mike, that a lot of people, when they focus on money for retirement and planning for retirement, they might focus a little bit too much on building up this big one big dollar amount, this big nest egg dollar amount, rather than focusing on, okay, I'm going to have or do I have enough income that's going to be coming in on a steady basis for me to to make it. Through my retirement years.

Mike Zeno:
Yep. And that could cause a gap in income better known as an income gap. And so one of the things that we seek to do during our consultations is look at what monies you're going to have coming in, whether it's Social Security, which incidentally up to 85% of Social Security income can be taxable depending on what else you've got going on. As far as income is concerned, if you're fortunate enough to still have a pension, we'll look at net numbers from it. If you are depending on your own savings, whether it's in a in a 401. K or a 403 B or a TSP, or if you're a federal employee, we look at the net numbers and we'll back out things like taxes and the cost for your health insurance and the cost for any other insurances that you have. And we'll look at OC after all of my expenses are paid, how much money do I have in that income gap? Is the difference between your living expenses and income from guaranteed sources? So all of our goals and plans are going to put you in a situation to where there is more money than month.

Matt McClure:
Let's actually take a quick time out here, Mike, because we're going to come up on our last segment of this show and we're going to talk more about this. We're going to continue our discussion, talking about retirement planning and about really how much people are kind of afraid of running out of money during retirement, because it's pretty staggering when you when you hear what we're going to say here as we come out of this next break. This is money matters with my money matters with Mike Dotcom is the website that's money matters with Michael all one word and the number if you want to give us a call, 704 5601573. And that's a free consultation offer that you can take advantage of when you get in touch with Mike Zaino. We'll be right back with More Money Matters with Mike coming up right after this. Washington where's the best place to hang your hat when you retire? I'm Matt McClure with the Retirement Radio Network. Powered by a married life. Whether retirement is just around the corner or several years away. Time is ticking on planning not only your finances for your later years, but where you want to live out your post-retirement life. Personal Finance Website Wallethub recently released its list of Best States to retire in 2022.

Jill Gonzales:
Florida, unsurprisingly, ranked number one, followed by Virginia, Colorado, Delaware and Minnesota, while.

Matt McClure:
At job analyst Jill Gonzales.

Jill Gonzales:
The top ten continues with North Dakota, Montana, Utah, Arizona and New Hampshire.

Matt McClure:
So what makes a state one of the best to retire in?

Jill Gonzales:
The study was based on 47 metrics, including tax friendliness, the elderly, population, golf courses per capita and shoreline mileage.

Matt McClure:
As for Florida, which landed the top spot this year.

Jill Gonzales:
Florida excelled in tax friendliness, fellow retirees and things to do, but could use improvement with home health aides per capita, even.

Matt McClure:
Though the Sunshine State is number one overall, if finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years? New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is, naturally, the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement and what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future with the Retirement Radio Network powered by Omaha Life. I'm Matt McClure. Fixed annuities, including multiyear 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 back. This is Money Matters with Mike. I'm Matt McClure here alongside the one the only the man himself, Mike Zeno. As we talk about retirement and you just heard there the list of places that are at least ranked by Wallet Hub anyway as the best states to retire in. No surprise to my mind. Anyway, Florida came in at number one. It's traditionally the place that you think of to where a lot of people retire, and it does well on a lot of the different categories, as you heard that they considered. But you know, Mike, a lot of people, whether they're going to move to Florida or they're going to, you know, stay right where they've they've been for their entire lives or for a long time. They're delaying retirement right now, at least according to to a lot of reports that we've been seeing because of inflation, specifically really taking a bite out of the amount of money that they have to to set aside for the later years.

Mike Zeno:
Yeah. And not only inflation, I mean, the market's just been abysmal this year. And so according to a recent survey that I saw, 60% of Americans have said that this has had an adverse effect on their finances. And so in order to to make up for the combination of a very, very volatile market and inflation, folks are actually working longer. And I always tell people that I sit down with because a lot of them are considering retirement and they just want to make sure that they have all of their ducks in a row before pulling that trigger and making that final choice to go ahead and retire. And one of my questions is, is why do you want to retire? And sometimes I get very emotionally charged. Answer someone at work is is aggravating them or the people that they work with or jerks. And and one of my biggest areas of counsel is, look, don't retire on emotion. Make sure that that you actually can afford to retire, because there is a huge difference, rather, between eligibility and affordability. No wants to nobody wants to retire, only to find out eight months later that they don't have enough money. And now all of a sudden it's welcome to Wal Mart. You know, they're the greeter and nobody wants to have to be forced into a situation like that. So rising inflation is definitely taking a toll on Americans.

Matt McClure:
It really is. And you know, that same survey that that you were looking at said 21% of people have specifically lowered their retirement savings. So the amount of money that people are putting in to their retirement accounts, whatever those accounts may be or whatever those different investment vehicles may be, 21% of them are taking that amount of money and lowering it each and every month or however often they're putting that money in. So it really is having an effect not just now, but as we say later on. And that's that's something that we want to kind of, you know, counsel people, I guess, Mike, on how to offset that because you want to still be focused on your on your retirement years. How do you deal with this inflation that's, you know, gotten to kind of runaway status right now?

Mike Zeno:
You know, I think a really, really good income generating strategy for for a lot of folks is what we call laddering. And so a lot of times people used to do it with bonds, but I find more and more folks are starting to do it with fixed indexed annuities. And what that means is that they will purchase a fixed indexed annuity, say, when they're 52 years of age, with a ten year goal in that in ten years when they're 62, it'll start paying them an income, a guaranteed lifetime income that they can never outlive. Well, the laddering comes into well, they purchase one at 52, then they purchase one at 53, so that in ten years they'll start a second income stream at 63 and then they buy one at 54 and at 55 and at 56. And they literally will do that for a ten year period from the time they're 52 to the time they're 62. So that think about this now. From the time they're 62 to the time they're 72, they're going to be adding an additional guaranteed lifetime stream of income that they can never outlive. That will come every single year, each of those years. So by the time they're 72, they don't have to depend on Social Security alone. Because one of the interesting parts of another article that I was reading in Fox Business said that Social Security is actually set to be completely depleted. Their depletion date is moved up to the year 2034. Well, that's just, what, 12 years away? And so it's like, holy cow. In 12 years, Social Security will not exist as it currently does. Obviously, the Social Security Administration and the government are going to have to do something. But what that means, I have absolutely no idea.

Matt McClure:
Yeah. And they're blaming a lot of that on on stuff like at least according to Fox Business, the, you know, the lost tax revenue during the pandemic because there was a lot of unemployment there. But, you know, people weren't didn't have the income for a long time to pay their taxes on. So there's less income like the payroll taxes, Social Security income, of course, coming from from that. So, you know, and then you've got the baby boomer generation aging into retirement now as well. So there's going to be a lot more money having to be paid out by the Social Security Administration in these coming years. So it's just, you know, a catch 22, I guess it's it's one. One bad thing on on the income side. One bad thing on the the outgoing side. And it's just not great. But, yeah, they will have to step in and do something to make sure that this is solvent because it's something that a lot of people do rely on. But like you say, you don't have to rely on it alone.

Mike Zeno:
No. And a lot of people may feel like they're damned if they do and damned if they don't. And it's kind of looking a little hopeless at this point in life. And I'm here to tell you that it does not have to be that way at all. When we sit down and we come up with a plan for you, I'll show you the light at the end of the tunnel and give you actionable steps to take so that you can make sure that you're able to actually enjoy retirement no matter what life throws at you. And so I think that's why it's very, very important to sit down and have a conversation and let me at least get a second set of eyes if you already have a financial advisor. I know a lot of people that have advisors and that's great. They haven't heard from them in a long time, especially when the markets are as volatile as they are right now. If you're just kind of everybody's asleep at the wheel, so to speak, then you need to make sure that you get a second set of eyes and make sure that your vehicle is heading in the right direction and not running off course.

Matt McClure:
Yeah, and it's especially important to have a plan in place right now because of, you know, inflation. We talk about inflation a lot, and that's because it's really the number one thing that's on people's minds right now when it comes to their finances. We're we're seeing it. We're feeling it each and every day, you know, whether we're at the grocery store or at the the gas station and all of that. So it's the number one thing that's on a lot of people's minds. But it's also apparently, at least according to CNBC, this this report that came out here recently, it's the most most acute risk for retirees and near retirees. Inflation is for those who live on fixed incomes. That's according to a lot of the financial experts who spoke at a summit there. So it's really you know, we think about, you know, inflation having this cumulative effect over the long haul. But for people who are right up on retirement age right now, it's it's go time. And, you know, they're thinking, okay, how am I going to deal with this?

Mike Zeno:
Exactly. Because you hit the nail on the head when you say these retirees are living on a fixed income. Well, inflation means their dollar can only go so far. It's buying fewer groceries and other household staples than it did even a year ago. And it's important to understand that some inflation is expected in a healthy economy, but the prices in consumer goods are rising right now at the fastest pace in 40 years, and that can absolutely erode that purchasing power a lot more quickly than than usual. And so one of the ways that I've seen people in retirement also eke out a little bit of extra monthly income is through a reverse mortgage. It's not right for every person. But if you own your home outright and your children or your heirs have absolutely no desire, no sentimental attachment to that property, then that might be a very, very good source for seniors who are able to write, who own their house outright, to kind of sell it back to the bank and have them pay them money on a monthly basis and literally squeeze every bit of juice available. And then when you pass away, then it just goes to the entity that was paying down the reversal. So I think that's a great strategy for those who it works for. Again, not for everybody, but for those that it works. It works very well.

Matt McClure:
And having someone who knows how to deal with inflation and has, you know, really taken the time to to get these things figured out and knows how to plan and has done it for a long time is super, super important because, you know, I mean, let's say if you're on Social Security, for example. There is a cost of living adjustment there that's built in. Or if you have a pension plan, if you're lucky enough to still have a pension plan, there could be a cost of living increase maybe built in to that. If it's not a fixed amount, but then that's going to be a fairly paltry sum usually. And so it's not necessarily going to make up for the loss of the distance that your dollar will travel, so to speak, in times of inflation like this.

Mike Zeno:
Absolutely true. In fact, we talk about summer earlier today and we talk about the fact that a lot of people are going to be cooking out this past weekend for 4th of July and just summer in general. And we were kind of joking before the call about how things have risen just in the past year. And I think we had some examples that we were going to share with the with the audience that are making us laugh but are really kind of making us cry at the same time. I mean, it's almost comical how much things have gone up in a matter of 12 months.

Matt McClure:
Yeah, that's right. You got to laugh to keep from crying in a situation like this. Mike But yeah, it's the summer cookout, at least according to the statistics here. Your summer cookout going to cost 21% more overall this year. And when you break it down to different items and again, laugh to keep from crying, one of the biggest increases is a half gallon of vanilla ice cream, which is now going to cost on average, $7.44. That's compared to $4.69 a year ago. So that's a big whopping 58.6% increase. And that's just when you're talking about a half gallon of vanilla ice cream, that's not even taking into account a bunch of other, you know, increases as well. And we run through some more of those. But that one, I just just made me laugh because it's a bit ridiculous.

Mike Zeno:
Yeah. And in another way they get you is they used to actually sell half gallons of ice cream. But if you look, they're not a half gallon anymore either. It's a third of a gallon. They've made the the containers skinnier and yet they've increased the prices. And I could go on and on about how have they done that with several food related items, you know, peanut butter, they put the little dimple in the bottom. Well, that little dimple takes up 10% of the product, yet the peanut butter costs the exact same amount or more. But I know that we like to grill out a lot. Right. So £2 of boneless chicken breasts increased almost 41% this year as compared to last year, up to $9.48 just for £2 of boneless chicken breast. And for those of you who do like to grill your meat, that's a huge increase.

Matt McClure:
Yeah. And I mean, even so, let's say you get that chicken, you cook it, you want to make it into a nice chicken sandwich and you want to get some hamburger buns to put them on while those hamburger buns are going to cost more than 50% more. Right. 55% to be exact. 2022 prices are $2.58 for a pack of eight hamburger buns. That's compared to a dollar 66 just last year. So that that's another big one. And we talked about this in the beginning of the show, Mike. It's like you say that let's say you look at it, oh, a pack of eight hamburger buns, 258. Not a big deal. But that's one of those things that it's like the small leak in the ship. It it adds up.

Mike Zeno:
Absolutely. All of those little things. You're going to want to put cheese on your hamburgers. The cheese is more expensive. You're going to want to add some potato salad to go along with that. Potato salad is up. Everything is up. And so a lot of folks are in for that that that barbecue sticker shock this summer, for sure.

Matt McClure:
Absolutely is. And we laugh about the inflation a little bit here, Mike, but it's a real concern for people. So in our last couple of minutes here, just remind the folks how to get in touch and also what it's like when they reach out for that free consultation that you offer.

Mike Zeno:
Yes. So there's two ways that you can get in contact with me. Obviously, if you prefer to talk to somebody, pick up the phone, call me 704 5601573. That is my direct number. It rings Mike Zeno and the only time I won't answer that phone is if I'm on the other line or in a meeting with a client. If I am spending time with my wife or my adult daughter, should they wish to spend time with their old dad? Or if I'm just taking some personal time, but I promise everybody this. If you leave me a voicemail, I will contact you back very, very quickly. My commitment is within 24 to 48 hours. The other way to get in contact with me is by going to the website. Money matters with Mike Dotcom. Just like it sounds. Money matters with Mike all spelled out all one word dot com and you can request a consultation on our online scheduler there. So when we get notification, whether it's through the website or you give me a call, we'll set up an appointment, I'll give you access to my calendar. We'll find a time that works for you, obviously that is available on my calendar.

Mike Zeno:
And we'll just have a discovery call, like a 15 minute conversation just to kind of find out what it is that you're actually trying to accomplish, where you are in life. Because when I'm talking to a 40 year old, it's a lot different than what I'm talking to, a 66 year old who is about ready to start acting on on full Social Security. So the the the conversation will be dictated by where you are in life and what you have and where you want to go. And so I just think that it's important for folks. A lot of people think that dealing with professionals is a daunting task and they would rather get their knee drilled. And I don't think it has to be that way at all. I'm a big believer and you don't know what you don't know. And so when you seek the help of a professional who can lay it out in plain layman's terms, plain English, and it all kind of makes sense. One of the biggest joys of my life is seeing that light bulb go off when people understand what is actually possible in retirement.

Matt McClure:
Yeah, which is great. And, you know, helping people get there to that point, realizing what's possible is what you I know are all about. Money matters with Mike Dotcom once again is that website folks for the free consultation just fill out that that form there with your information 740 560 1573 is the website as well. Well, Mike, that just about brings us to the end of the proceedings today, but we'll do it all again next week. How's that sound?

Mike Zeno:
That sounds like a plan. I want to thank everybody out there again. Without you guys, we don't exist. So thank you for your time. If you know anybody that needs to hear this information, hey, share the website with them. Money matters with Mike Dotcom. We are on the air every Saturday at noon and we try to bring you meat on the bone, stuff that you can actually take with you and apply to your everyday life so that you have more money that matters when it comes time to need it. So again, thank you for listening and as always, make it a great day.

Matt McClure:
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 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 education. 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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