MMWM-FullShow-0610.mp3: Audio automatically transcribed by Sonix

MMWM-FullShow-0610.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

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

Producer:
Welcome to Money Matters with Mike with your host Mike 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 Zaino.

Sam Davis:
And welcome to Money Matters with Mike on the air and happy to be joined by Mike Zaino. Mike, how are you doing?

Mike Zaino:
I'm doing awesome, brother. I hope you are.

Sam Davis:
Doing all right. Doing all right. Enjoying the summer temps? You know, it was a long winter for me. And also, I'm enjoying getting out there in the sunshine, getting a little tan and enjoying it.

Mike Zaino:
They're definitely creeping up, that's for sure.

Sam Davis:
Yeah. So, you know, last week on Money Matters with Mike, we talked a lot about inflation and rising costs. And that's right where we're going to get the conversation started today. We talked about inflation tends to hit in the areas that we need the most, areas like food or energy, gasoline. We don't need to talk or let's not even look at how much unleaded gas is at the pump right now. I've got to fill up before I get started on my weekend. One thing that we all have to spend quite a bit on, unfortunately, is, is health care. And as you get older, health care expenses go up. So, Mike, you know, with regards to you working with clients, what are people saying? Are they coming to you concerned about health care costs and what are you telling them with regards to having a plan, with regards to caring for their health?

Mike Zaino:
You know, that's that's a great question. It's actually the second biggest concern that most of the folks that come to me have on their minds. The first being, you know, running out of money and how do they protect the money that they have and make sure that it is there for them when they need it most? And so obviously, that's my wheelhouse. And then their second major concern is how am I going to pay for the rising cost of health care in retirement? Because they have absolutely skyrocketed. And a new estimate that I was reading from Fidelity shows that the average 65 year old couple that is going to retire this year, they can expect to spend an average of $315,000 in health care and other related medical expenses during their retirement. And that's a huge increase from last year when Fidelity projected that back then it was only 300,000. So we're talking about a $15,000 increase in 12 months.

Sam Davis:
Yeah. And I think it's so interesting, you know, the two things that retirees and seniors in general are are most concerned about is is number one and it is number one running out of money. And number two is death itself and medical costs and things related to, you know, preventing or delaying death itself. So, you know, we talk a lot on the show about protecting your wealth, growing your wealth. But, you know, it's also important to protect and grow your health as well. And so that's why it's so important to have a plan for your health.

Mike Zaino:
For sure. I mean, little things like just getting out and moving. So many people. I've seen 50 year olds that have one foot in the grave and I've seen 85 year olds that literally play 3 hours of competitive tennis every single day. So, I mean, it just depends on you and making a decision to if you're physically able, obviously, to to just move, because once you become sedentary and you stop moving, that's when everything sets in and your body just starts to break down.

Sam Davis:
Yeah. I mean, think about that old convertible parked in the garage with the tarp over it. Know how many years has it been sitting like that? It used to run great, but I'm not so sure if that engine is going to turn over when we get in there and and turn the key.

Mike Zaino:
So it's important to, you know, crank it up every once in a while and take it for a spin around the block before you cover it back up again for sure.

Sam Davis:
That's right. That's right.

Mike Zaino:
And same principle.

Sam Davis:
Yeah. And you know, we're not here to spend that spend the whole show given health recommendations and stuff like that. But I think that's great advice. You know, for me, I find it's easiest to stay active when I'm enjoying the activity that I'm doing. You know, I'm not a guy that enjoys getting in the gym and putting up weights for an hour and a half. I'd much rather go for a hike or play some golf, play some tennis, something like that. That's a game that I can enjoy.

Mike Zaino:
Absolutely.

Sam Davis:
So, you know, we want to take just a quick moment and play a news story related to the rising costs. Of of health care expenses specifically related to drug prices. And there's an interesting note in here, and I want you all listening to pay attention that if gasoline were subject to the same rates of inflation that drug prices have been, we would all be paying $12 a gallon at the pump right now. And, you know, don't don't look. But we may be headed that direction actually at the pump as well. So money matters with Mike. We'll be back in a moment. Let's play this quick story.

Producer:
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.

Ron Mastro Recording:
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.

Producer:
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.

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

Producer:
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.

Sam Davis:
So I hope you all were able to gain a little bit more insight on the rising costs of health care expenses. That story specifically related to prescription drug expenses. And in Mike, when people come to you and they're concerned, you know, maybe they have a plan in place, but they want to make sure that that plan is is putting them in the right direction or maybe they're starting from scratch. They don't have a plan. They've been working hard. They've been saving hard, but they don't have a plan in place. What's it like when they get in touch with you, either at Money Matters with Mike or giving you a call at 704560 1573 the numbers on the website as well. Money matters with Mike. But what's that like once people get in touch with you?

Mike Zaino:
Well, it really depends on the individual. I mean, we take every individual or every couple on on a case by case basis. But the biggest thing with me is that I'm not a sales guy. Right. I'm just going to talk to you. I'm going to have a conversation. I'm not going to try to talk over you and use words that you're not going to understand. I can break down very complex situations into layman's term so that you do have a much, much better understanding with it. But again, it is on a case by case basis that will decide because some people do have a plan put together and that may incorporate long term care plans that may people I meet with all the time already have their funeral and final arrangements paid for. And so, again, if you don't have a plan, then we can put the plan in place. And then if you already have a plan, we can just make sure that you have another set of eyes on it to guarantee that all your eyes are dotted, all your t's are crossed, and you've got all your ducks in a row, so to speak.

Sam Davis:
Yeah, it's it's so important to have a plan, really, with anything you're trying to accomplish. If you if you have failed to prepare, then you might be preparing to fail. So you want to have that plan, but you don't want to have a plan that's too rigid. You don't want to set it and forget it. You want to have some flexibility in there, right?

Mike Zaino:
Absolutely. It's one of the biggest mistakes people can make is to set it and forget it, plan and not be fluid. And I remember Bruce Lee used to talk about be like water and be able to flow. And so if you can staple that and if to your plan, that idea that if anything happens, you're able to respond to it as opposed to reacting to it, typically a response is better than a reaction.

Sam Davis:
Yeah, anticipation over reaction. So again, you can get in touch with Mike. Just by visiting money matters with Mike Dotcom. That's the name of the show. Money matters with Mike Dotcom or give him a call. 704560 1573 704560 1573. You know, we talked quite a bit about annuities last week, and we just want to remind everybody out there, if you currently hold an annuity and you're not sure if it's still the right thing for you, or maybe it's been underperforming your expectations. Mike, what can you do for people maybe reviewing their annuity and seeing if they're on the right track?

Mike Zaino:
Well, when people come in, I ask them to bring all of their documentation, obviously their current W-2 and pay stub. I ask them to bring any IRAs that they have, any annuities that they have, just so that we can sit down and look at everything because things change over time. Right. And just like we talked about last week, the old kind of life insurance is completely different than the new kind of life insurance. So the same thing, if you've had an annuity for 20 years, you've had a life insurance policy for 20 years, heck, 10 to 20 years. You probably need to have that reviewed to make sure it's still the best for you.

Sam Davis:
So get in touch with Mike today online at Money Matters with Mike Dotcom. You know, kind of a theme for the show today is you don't know what you don't know, you know, and especially when it comes to financial information, economics, money, you know, if you attended public school or even many of the private schools here in the United States, they don't do a fantastic job.

Mike Zaino:
No they don't.

Sam Davis:
Educating the youth on, you know, how to treat your your money like your little soldiers and put every dollar to work for you. So, you know, we just want to let people know that this information that we shared last week, this week and every week, an episode moving forward, it's okay to to don't know if you don't know what you don't know. I heard someone explain once everything can fall into four categories. You know, there's the things we know, you know the things you know you don't know the things you don't know you know and the things you don't know you don't know.

Mike Zaino:
That is absolutely true.

Sam Davis:
So we're going to go through some misconceptions on that topic. You know, there's so many misunderstandings, misconceptions, if you will, about retirement. And number one on this list is people think their effective tax rate is going to dramatically decrease once they stop working. Mike For whatever reason, people think that, all right, I'm not working as much anymore. I'm in retirement, so my taxes should be going down.

Mike Zaino:
And that's just something that has been perpetuated throughout time. Right. I mean, you heard people say that way back when and your parents may have said that. Their parents may have said that. But the truth of the matter is, is that unless you plan and take action steps for your tax rate, your effective tax rate to be lower, it might not actually be lower. In fact, you know, if you're an individual that files between, let's just say 25,030 4000 a year, up to 50% of your benefits are going to be taxable. And if you're an individual that makes more than 34,000, up to 85% of your benefits may be taxable. And to me, that doesn't seem like somebody making $34,000 is wealthy by any stretch of the imagination. But I guess that's what the IRS thinks. They think if you're an individual filer and you make more than 34,000 a year, they think you're actually wealthy.

Sam Davis:
Yeah. And this is all factual, real tax information. You can always learn more about taxes online at irs.gov. And we're just here, you know, sharing the facts. It's important to take a look at what those tax brackets are when you're planning for your retirement or if you're planning to to stop working or even if you're in your working years. Take a look at what those tax brackets are, whether you're an individual or you're married, filing jointly. Take a look at what those ranges are. You know, in some cases, people can get a raise during their working years and they just went up from a 24% bracket to a 30 plus percent bracket. So, you know, number two, on the misconceptions about retirement relating to Medicare. You know, we were talking about health care here at the start of the show. People believe that Medicare will cover their long term care costs and that is not the case, right?

Mike Zaino:
That is true. You know, Medicare comes in four parts part A, part B, part C and part D and people have this idea that it's just going to take care of them, but it doesn't cover long term care needs. So if you ever have to have in-home health care, you have to go to an assisted living facility or a nursing facility, 24 hour care. Medicare is not going to cover that. And so you just simply can't depend on it, because that's simply not the case. Almost none of long term care is covered. By Medicare. It's really there for health care, right? So we can break down we can break down each of each of the four parts of Medicare. Medicare Part A, that's the one that's using air quotes. When I say this free in retirement, you've paid for it your entire life. That's why I use the air quotes. So if you ever look at your your pay stub and you see Medicare deduction, that is what's paying for Medicare Part A for you in retirement and part A covers your hospital costs. Right. Then you have Medicare Part B, which is not free. And as soon as you turn 50 excuse me, 65, you actually have to contact Social Security to file for Medicare Part A and part B, unless you're a federal employee already covered under a federal plan and still working. But this year, Medicare Part B is $170.10 per month, and that's also means tested. So if you're a household that's earning a lot of money, you could pay more than that $170.10 a month.

Mike Zaino:
And Medicare Part B is what covers your your physicians. Then you have Medicare Part C, which is better known as Medicare Advantage. It can be zero premium out of pocket. It can cover what A and B don't. It can include Medicare Part D, which is just a D for drugs. But guess what? You're going to have co-pays and you're going to have co insurance and you're going to have deductibles with those Medicare costs. And most people either choose to get a medigap supplement or they get the Medicare Advantage plan to take care of the costs that Medicare Part A and B do not. And that is such a mouthful that I just said. They're right. One of the biggest sources of confusion for folks turning 65 is Medicare. And you know as well as I know that as soon as they turn 64, they're going to be put on every turning 65 list by every insurance agent who sells Medicare products. Right. And they're going to get a whole bunch of phone calls. You're going to get a whole bunch of junk mail. And the bottom line is, is that if you need a trusted source to help you sift through all of that stuff, I am licensed in Medicare. I understand all of its parts. And so if you have any questions with Medicare, you can contact me either by visiting the website or calling me at 7045601573.

Sam Davis:
Yes. So whenever planning for retirement, it's so important to have a portion of that plan. You're considering your health care expenses because throughout our lives we spend thousands of dollars on health care expenses and most of those costs are stacked towards those later decades in life. So people think Medicare covers long term care costs. That's not the case. Get in touch with Mike. You can visit him online at Money Matters with Mike and he can help answer your questions related to Medicare. Next misconception on our list. Mike This is a big one. People believe that the key, the magic ingredient to retirement is acquiring their one big magic number in their portfolio.

Mike Zaino:
That is a huge misconception, right? It used to be, hey, if I could have $1,000,000, that's going to last me a long time. Be fine for the rest of my life. And the truth of the matter is, is while I would like to have an extra million dollars, $1,000,000 is not what it used to be. Right? Maybe your number is 1 million. Maybe your number is 2 million, 3 million, 10 million. Whatever it is, it's more about income, more about cash flow in retirement than actually getting to that single magic nest egg number. And you need to make sure that you're generating retirement income throughout different tax buckets. So again, we talked about the the smart money list a little bit last week where the best kind of money in the world is free money. Right. The second best kind of money is tax free money. And then the third best kind would be tax deferred money. The tax deferred money would be in your 401ks. Case and 403 B's and IRAs and such. So acquiring one big magic number isn't what it used to be, simply because of the rising cost of living.

Sam Davis:
Yeah. And, you know, it's fantastic if if you worked hard during your career and you were able to get to that one big number, whatever it is for you, maybe it's half a million, maybe it's a million, two or three. But the key is and something to remember, you know, that that million dollars is not $1,000,000 if it's sitting in your 401. K because it's true, Uncle Sam and the government hasn't taken their cut yet. That is a tax deferred investment vehicle, right?

Mike Zaino:
Yeah. You've actually generated what could be considered a ticking tax time bomb that's going to explode on you in retirement when you need to draw that money. So when you look at the balance of your 401. K, that's not actually yours, right? Because a significant portion, like Sam just said, belongs to your uncle. And your uncle is pretty greedy.

Sam Davis:
Yeah. So you know what the real magic ingredient is? Is income. Because what is retirement? You know, when you cross that line of your career, the finish line of your career, you cross the starting line of retirement. And at that point, you need income to pay for all of those expenses. Maybe by that point, you own your home. That's great. You're still going to have insurance costs, property taxes. You're still going to have to pay for for food, clothing, all the travel that you want to enjoy now that you have all that time. So what you really need is income. And there are many different buckets of income. Mike Some are Social Security. Maybe you have a pension, maybe you're following that 4% rule and taking a little bit out of your 401. K or your IRA. But really, the key is income.

Mike Zaino:
I agree. I agree. And especially the the the tax free income. Right. The income that you don't have to pay your uncle on and you don't want the IRS holding you back too much. So one way to generate that tax free income is obviously through a Roth IRA. So if you don't have a Roth IRA, we can help you start those. If you're if your company if you're still working, they offer a Roth 401. K option. We can look at all of that and see if that makes sense for you. But whether you're in your forties, your fifties or your sixties, another incredible way to generate tax free income is through a universal indexed life insurance policy. And through that, you can get income that is completely income tax free. And we're happy to help you do that.

Sam Davis:
Yeah. We'll talk more about wills and and annuities later in the show. But the next misconception on our list is people believe that everyone receives the same Social Security benefit we've all been paying into Social Security. If you take a look at your pay stub every Friday or every other Friday, not too many people do take a look at all the details there. But you're actually paying for Social Security and not everyone receives the same benefit, right?

Mike Zaino:
That is that is 100% dead accurate. It's based on your highest 35 years of earnings. So the more somebody makes throughout the course of his or her working career, the more that person is going to earn in retirement through the Social Security benefit. And you can claim Social Security at any age after age 62 unless you're Social Security disabled and you can claim it prior to that. But every year you wait, you actually get a benefit. And so one of the biggest questions that I get asked all the time when we sit down in our individual consultations is, Hey, Mike, based on what you're seeing here, when do you think I should take Social Security? And we will look at each individual as an individual because it does depend on what else you've got going on. But you can take it at 62. You can take it at your FRA, which is your full retirement age. And for most of our listeners, that's either 66, 66 and some months two, four, six, eight or ten or age 67. And then you can wait until you're 70, which is your maximum Social Security age. It does not behoove you in any way, shape, form or fashion to wait past age 70 and in fact below your full retirement age. If you are still working, you're going to be subjected to the earnings test, which for this year for 2022 is $19,560. And so for every $2 above that threshold, they'll actually claw back $1 of your Social Security benefit. But once you reach your magic number, whatever that number is, 66, 66 in some months or 67, your full retirement age, you can make as much money as you want to make. You can become a millionaire if you want. And they're not going to deduct or claw back any of that Social Security benefit. And so that's why a lot of folks will try to wait at least until their full retirement age for Social Security. So, again, not as. Everybody is going to receive the same benefit.

Sam Davis:
That's exactly right. Like so many things in life, including Social Security. You get what you pay for. You know, during those top 35 earning years, you paid into Social Security and you'll get that out in some form of Social Security during your retirement. So the next misconception related to retirement is on our list, and it's also related to Social Security. People think that they're stuck with that same Social Security benefit amount.

Mike Zaino:
And that's just a falsity. Every year you wait to draw Social Security, your benefits going to go up just under 8%. And that's a compound return. So that's not insignificant. So it might be worth it to you once we crunch your numbers to go ahead and start drawing immediately and retire, it might be worth it for you to take some money out of your 401. K for an example to or your IRA to help you prolong the longevity of your Social Security benefits so that you'll collect more. So, again, there's a strategy that that should be used when determining when it's best to take it, because not everybody will be stuck with that same Social Security benefit. And then obviously there's going to be cost of living adjustments, although typically, if history has shown us anything, those colas are not anywhere near keeping up with inflation.

Sam Davis:
Yeah. So you will get a little bit of relief from inflation with Social Security, but it's not going to outpace inflation or maybe not even keep up with it by by any means at all. So when it comes to Social Security, you're not stuck with the same benefit. The more you wait, the more you will make up until a certain age. Next misconception on our list. People think that taxes will remain flat during their retirement years. And we're sorry to tell people that once you cross that finish line in your career and you decide to retire, the US government does not freeze your tax rate.

Mike Zaino:
That is one of the biggest misconceptions we hear. And I ask people all the time, Hey, do you think taxes are going up or down in the future? Not once have I ever gotten the answer down. And did you know that between 1960 and 63, the current 24% tax bracket was actually 56%? I mean, could you imagine if those brackets get adjusted and get risen again for people that are already in retirement, that's going to make a big impact on their ability to go out and enjoy the finer things that we hope to be able to enjoy during our golden years.

Sam Davis:
Yeah, that's absolutely a huge bracket and that's something so interesting. I would encourage people to take a look at, you know, it's important to know what the tax brackets are now, of course, to to know what your will be paying in taxes this year and whenever they release them kind of notice. Were there any changes for for my bracket next year? But take a look back in history you know where the brackets have been over time, 56% for the current 24% tax bracket there in the early sixties. You know, that means if you're salary just to give us a round number was 100,000. That means you're bringing home $44,000 in that. That is not a six figure salary, Mike.

Mike Zaino:
Not even close. And if you listen to what the people up in Washington are threatening, it's going to be a pretty safe assumption that taxes will go up in the future. So you need to absolutely plan for it. And again, that's one of the things that we'll discuss during our consultation.

Sam Davis:
Yeah, you know, a couple of things related to taxes that you need to be thinking about. One is the US national debt. I'm just pulling it up right now. And this is another thing. I encourage people to do the research for themselves. Visit US debt clock dot org to find the current national debt number and we are edging up towards 30 and one half trillion dollars. That is the national debt. And so, you know, we talked about this a little bit last week, kind of relate it back to to what debt is like in any of our personal lives. What do you do to handle debt?

Mike Zaino:
And I just want to interject something, because you hear 30 and a half trillion. That's what the tea people and people hear that number. But I don't think anybody really understands just how big the number, just 1 trillion is. I'll give you an example. If you go back in time, 1000000 seconds. Guess how far back in time that was, Sam? Just take a random guess. Is it 1000000 seconds?

Sam Davis:
Is it 25 years?

Mike Zaino:
It was 12 days ago. Wow. 12 days is 1000000 seconds. If we change the M to a B and we go back in time, 1000000000 seconds, guess how far back in time it was?

Sam Davis:
All right. I'm going to give the same guess. 25 years.

Mike Zaino:
It was 32 years, 32 years. And now if we change the B to a T, we went from 1000000 to 1000000000 and now a trillion. Guess how far back in time 1000000000000 seconds ago was?

Sam Davis:
Oh, man, if we wind the clock back 1000000000000 seconds, I wonder if we are. Before the United States was founded.

Mike Zaino:
We are well before the United States was founded. In fact, Neanderthals still roamed the earth. It was 32,000 B.C. So that's how big a number like a trillion is. And we know people in Washington just toss it around and you hear it all the time. But you have to understand that somebody has got to pay for that national debt that's approaching $31 trillion. Is it going to be you? Is it going to be your kids, your grandkids, your great grandkids, their great grandkids? Something has to be done.

Sam Davis:
Yeah, it's interesting. And if you if you take a look and do some research on US debt clock dot org, you can actually break it out and look at the debts by the individual states. I'm taking a look at South Carolina right now because this show Money Matters with Mike reaches portions of South Carolina. The South Carolina debt is $40.3 billion just in the state of South Carolina. I'm going to take a look at North Carolina as well, because we reach up there and North Carolina has more debt, $51.4 billion in state debt. So when you're looking at the national debt figure and and if you do the research and you look into the individual state debt figures, it really makes you think, you know, what's going on with all of this governmental debt. You know, if we have debt in our own homes, we either have to increase our income or cut our expenses. And when it comes to the government, whether it's the state or federal, I'm not sure if they're doing that.

Mike Zaino:
Mike know, they can either sell off assets, which you know as well as I do. They're not going to do. They can spend less. Yeah, right. Or they can tax more.

Sam Davis:
Yes. Because that's how the government builds revenue. Everybody they tax the citizens. We're all paying for the roads, many of the schools, everything that we share as a community we're paying for, even if you're not participating in those programs. So, you know, I think it's interesting, especially in an election year, you know, no matter who you're planning on voting for, ask them about how they plan to handle the national debt, the state debt and the fiscal problems in our country because we're all responsible for it moving forward.

Mike Zaino:
Absolutely. I know. I can't spend more than I earn.

Sam Davis:
That's that's right. But the government doesn't seem to have a problem doing it.

Mike Zaino:
Not a problem at all.

Sam Davis:
Next thing on the misconceptions list is people assume they will die before they're 90 years old, so they only ever plan to live that long.

Mike Zaino:
Wow. Yep. You know, the single fastest growing segment of our population is people turning 100. The centenarians. Right. And I sit down with people. Oh, nobody in my family has ever made it to 80. I'm like, Great. What if you see your 81st birthday? And you're broke because you planned to have all your money spent by 80 because nobody in your family lived until 80. Again, in the military, I learned proper, proper prior planning prevents pitifully poor performance. Right. And so we would start with an objective and then figure out, okay, how do we tackle and accomplish taking that hill, so to speak. Right. And then if anything happened, we had contingency plans and fallback plans. And so when we're talking about retirement in your individual plan, you need to have a plan for what happens if you live right. What happens if you see 100? Man, that would be awesome if you have all your faculties and you can still move without pain. Right. But did you know that our life expectancy over the last 200 years in the United States has more than doubled? Did you know that?

Sam Davis:
It's unbelievable. I like to share a story. I visited Savannah, Georgia, recently, and I had the opportunity to go downtown and and take a tour through a couple of the old graveyards there in Savannah. And many of the headstones list people living full lives into their late thirties and early forties because that was what a full life was back then. But fast forward to 2022. You're in your thirties and forties. You might still be early in your professional career.

Mike Zaino:
In fact, according to the CDC, if you are married and both of the spouses live until 65, which isn't old by any stretch of the imagination, it is highly likely that at least one of you is going to live to be over 90. So you need to be able to plan for your retirement to last. Because again, what did I say? The biggest single fear was running out of money. You spend all your life building and building and acquiring your nest egg. And one of the hardest things to do is to kind of change your focus once you're hitting or nearing retirement, and that it's not all about growth at that point in time. It's about preservation and distribution. And again, something that we like to just educate folks on and talk about on an individual basis in our one on one consultations.

Sam Davis:
Yeah. So don't assume out there that you're going to to die and leave this earth at a certain age. People are living longer, you know, thanks to modern medicine and lots of different advancements in society diet, nutrition, health, exercise, people are living longer and it probably helps that doctors aren't recommending cigarettes anymore.

Mike Zaino:
You remember the commercials on television, the magazine ads. It's so funny when we look back and we see these things. I saw something the other day on on one of the social media sites that said, I am this old. And it had a a roll of those little caps that you used to stick in the in the little pop guns. And it would like a roll of red tape, basically. And there were a little black dot of gunpowder every inch or so. And that just made me laugh and think back to when I was a kid and how we used to play cowboys and Indians back then.

Sam Davis:
That's fun. I actually I actually remember playing with those little things at my grandparents house, and I was I was surprised as a kid how loud those things actually were.

Mike Zaino:
They were loud. We used to stick them. We used to stick them under the contact tabs of our of of our grandmother's toilet seat. So when she sat down, they would just explode. It was pretty funny. She didn't think so, but we got a good laugh.

Sam Davis:
All right. So next misconception on our list. We touched on this a little bit, but we'll just review it one more time. It's a huge misconception that when it comes to your investments, you can set it and forget it.

Mike Zaino:
Please don't do that. Please, I'm begging of you. We encourage everyone to inspect what they expect about their retirement future. And if you're going to be a bear, then be a grizzly bear about it. Be aggressive, but be aggressive about seeking knowledge. Please don't just forget about it. I mean, buy and hold is a decent strategy at times, but don't put your retirement future up to chance. Hope is not a strategy. I can tell you right now that when I go fishing, I don't really go fishing. I go hoping I throw I throw a line in the water and I hope that a fish bites because I'm not an angler by any stretch of the imagination. Right. The professionals, they have fish finders. They know the exact kind of fish they're fishing for, the exact bait to use. They can throw it in there. And within minutes they're hooking up an £8, £10 bass and reeling it in. You can't just set it and forget it when it comes to retirement. Otherwise you're literally throwing a line in the water and hoping.

Sam Davis:
Yeah, hope is definitely not a strategy, because when hope is your plan and when hope is your strategy, you're you're leaving a lot up to chance. And if you're fishing that, you know, that's not much of a consequence. Maybe you don't catch too many fish that day. Or it kind of sounds like my golf game sometimes. Sometimes the hope is my strategy on on a particular golf shot. But, you know, that's not too consequential. Maybe I go in the bunker. So what? But, you know, when it comes to your personal finances, hope is not a good strategy at all.

Mike Zaino:
I think we want your money working hard for you, harder than you worked for it. Because I can guarantee that you worked hard, very hard for your money. And I bet you work even harder to save it.

Sam Davis:
Absolutely. And no matter how much money you have earned and no matter how much money you've saved, the money you have is so important to you and your family. And you want to be sure that. You can protect it and grow it as well. You know, I think about Warren Buffett and his quote, you know, the two rules of investing, there's two rules. Number one is never lose money. And rule number two is don't forget rule number one.

Mike Zaino:
Absolutely. And you know, Warren Buffett, he's pretty successful guy, right? You know, he's made a dollar or two in his lifetime.

Sam Davis:
Absolutely. And, you know, he has, you know, in done buy and hold, but he doesn't forget it. You know, him and Charlie Munger, you know, they're making changes all the time. They're flexible with their plan.

Mike Zaino:
Absolutely. They're fluid. They're like water.

Sam Davis:
And, you know, look at what they've done. They've built one of the largest holding companies the planet has ever seen. It's unbelievable. Yeah. Number nine, the last one on our list of misconceptions is people assume they can handle retirement planning by themselves.

Mike Zaino:
Mm hmm. Let me ask you this. Right. Some of you guys out there, you guys are probably pretty handy with a wrench. I'm not one of those people. You may be some of you women out there. You guys are probably pretty handy at different things. I can tell you my wife is an amazing cook if I tried to cook. Let's just say that we would all be very, very skinny. But I'm going to ask you guys, especially the husbands out there, because if you've got a wife and you want her taken care of, what is going to happen if you pass away and you've been handling all of your own investments and then all of a sudden she has the responsibility of settling all your affairs and taking care of herself. If you haven't entrusted a professional, somebody that knows these things, how to navigate those absolutely potentially choppy waters, your wife has nowhere to go, no frame of reference. She might make decisions that you wouldn't recommend. So we need to do everything we can to set both spouses, not just one spouse, but both spouses, up for success during retirement.

Sam Davis:
Yeah, you know, it would be a beautiful situation if every happily married couple in retirement could pass away at the same time. I'll Romeo and Juliet. Or maybe or maybe not quite like that. If you if you're familiar with that play, it didn't end so well for them. But, you know, someone's going to live on. And so it's important to have a professional that's helping manage what you're doing in retirement, making sure that your plan is on the right track as you go through the years in retirement. Because I bet you don't want to wake up and flip on Fox Business or MSNBC or or MarketWatch or whatever it is. You don't want to worry about what's going on in the markets. You just want to focus on what it is that you're doing that day. Right?

Mike Zaino:
Absolutely. And it doesn't make sense to me that so many people believe that they can handle their retirement all by themselves. I mean, think about this. When you have a medical problem, you don't try to handle that by yourself, do you? Right. You don't try to give yourself a root canal. You go to the dentist, you go to the experts. Would you try to perform that on your own? Absolutely not. If you did, you'd probably be worse off than where you started. So I imagine that you'll cause yourself a lot more pain if you go at it alone than if you had consulted with a financial professional, an expert that does these things days in and days out.

Sam Davis:
Yeah. So keep this in mind. If you want the best for yourself, you can't do it by yourself. Consult with an expert. You can get in touch with Mike Zeno by visiting Money Matters with Mike. It's the name of the show Money matters with Mike dot com or give him a call 704560 1573 write that down it's 7045601573. So Mike, let's say I'm out there, I'm listening to this show either North or South Carolina enjoying my weekend, but I'm hearing this information and and I want to make sure I'm on the right track. So I pick up the phone or I go to money matters with Mike Dotcom, I give you a call and what can I expect once I meet with you?

Mike Zaino:
So again, we're just going to have an introductory meeting. It's never a sales meeting, never any high pressure. I want to find out what your goals, your objectives are. Right. And if I can make sure or at least provide a map that will enable you to reach your destination, then I've done my job. Look, I sleep very, very well at night because I've helped countless thousands of people literally protect their nest egg. You know, the market has been, let's just say, volatile this year, right? It has gone down, down, down, down. I have many of my clients. In fact, the majority of my clients, they haven't lost a single penny, not one penny. And they send me text messages. Oh, retirement, Mike. That's what they call me. I'm so glad I listen to the what you what you suggested on our on our roadmap. And and if you're somebody who is just kind of wandering in the ocean on a boat without a sail, if you just leave it up to chance, you're going to go wherever the wind blows. If you want to have a concrete idea of what to expect and how to get where you want to go in retirement, then you got to just come talk to me.

Mike Zaino:
All right? So if we're a fit, then great, we'll do business and we'll be friends. And, you know, it's something that everybody gets my personal cell phone number, the number that is on this show. 7045601573. That is my personal cell phone number. It is the only number I've had since 1997. And I give it out because I want people to know that they can reach me if I'm with a client or if I'm on the other line, I'll put you to voicemail. But I make it a commitment to. Contact everybody within 24 to 48 hours. And don't you wish all businesses were like that? I know I do. And so that's kind of how I've always operated. My practice is if if I wanted to do business with me, what would I expect? And so when you call me and we sit down, like I said, if if there's some way that I can help you, I will.

Sam Davis:
So get in touch with Mike today by visiting Money Matters with Mike Wwe.com. That's Money Matters with Mike. Or you can reach him right there in his pocket. 704560 1573 one more times. 704560 1573 So one of those misconceptions that we were talking about just a few minutes ago, Mike, is that people assume that retirement is about reaching that one big magic number. But we let the people know that retirement is so much more about income generating that income for yourself. Now that you're in retirement, you're not working than it is about building up that one big nest egg. You know, it's great that you worked hard and you saved harder, but it's really more about how do I take these assets that I've saved up, I've earned, how do I protect them and grow them moving forward? You know, pensions in the past were one of the things that were able to be another income bucket for folks. But pensions are sort of going the way of the dodo birds. You could say they're not as common anymore. You know, years ago, companies started making people direct to their own retirement plan. They did away with the pensions and they're like, hey, here's the 401. K, we'll, you know, you contribute, we'll match a little bit of it up to a certain point. And you choose your investments, you choose which way to go. But now you kind of have to do some extra steps, some extra work if you want to build your own personal pension, right?

Mike Zaino:
Absolutely. And again, that's where those seven P's come in. So if you want to create your own personal pension again, you can take the nest egg that you've had built up over the entire T of your career. And you can redirect that into a vehicle that can give you guaranteed lifetime income no matter how long you live. Again, single biggest fear running out of income. Well, if you created a personal pension that gave you guaranteed lifetime income every single month until you passed away, and then if there was anything left of your original nest egg, it would go pass on to your named beneficiaries. Wouldn't that be something.

Sam Davis:
So lifetime income? So if I live to 90, Mike, are they going to pay me an income up until 90?

Mike Zaino:
They'll if you live to 90, they'll pay you up to 90. Heck, if you live to be 100, 110, 120, that when I say guaranteed lifetime income, even if you take out more than you put in, these are structured as a fail proof to where you have again guaranteed lifetime income.

Sam Davis:
And if the market has a bad year, you know, and I call you up. Hey, Mike, how's my annuity doing? The market's been getting killed in 2022. What do we what are we going to do?

Mike Zaino:
Do you remember a little bit ago in the show and I just said so many of my clients have been shooting me text messages. I even got a thank you card that says, Man of my grateful that I listened to you. I had a buddy that lost so much money. He could have already bought a mercedes this year with how much he's lost out of his IRA. And I haven't lost a single red penny. And so, you know, when I get stuff like that, it just puts a big grin on my face because not for nothing. But that's the impact that I have on their lives and on their kids lives. Just because I educated them, I didn't twist their arm. I didn't beat them over the head. I just educated them and gave them enough information for them to make an informed decision. See, I believe that most people are smart and unfortunately they're just not presented with the information. And we talked about at the beginning, we started the show with you don't know what you don't know. Well, you don't know what you don't know. And if you have me break it down for you in layman's terms, and I can show you a product that kind of checks off every single one of those boxes and you can create your own personal pension plan. I kind of think that's a better option, and I think most of our listeners would agree.

Sam Davis:
So we're going to step aside for a moment and we're going to play an audio book chapter from Annuity 360. And hopefully this gives you a bit more context and information about how you yourself can use an annuity to build your own personal pension. Money matters with Mike will be right back.

Mike Zaino:
Chapter nine. You can create your own personal pension. Big idea. Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities.

Sam Davis:
Can create.

Mike Zaino:
Annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don't overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date. You specify you don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don't give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee.

Sam Davis:
But you can still create a personal.

Mike Zaino:
Pension without an income rider on your annuity. If you get an annuity with an income rider but don't utilize the features of that.

Sam Davis:
Income rider, then.

Mike Zaino:
You are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuities in your annuity without receiving a single benefit for that annual fee. This income.

Sam Davis:
Rider fee.

Mike Zaino:
Will also draw down your account value or principle, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals. From your accumulation based annuity policy, many accumulation annuities are set up to be RMD friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier. Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor.

Sam Davis:
Or buyer beware applies here.

Mike Zaino:
Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they'll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income rider, know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics.

Sam Davis:
Of each.

Mike Zaino:
Option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts.

Producer:
For your entire lifetime.

Mike Zaino:
As discussed above, we recommend no more than 5% be withdrawn each year.

Sam Davis:
From your account, you can learn more online at Money Matters with Mike or give him a call on his phone. 704560 1573 So we just listened to that chapter about building your own personal pension. We know that pensions aren't offered quite as much in the workplace these days. So how do you turn that, that those assets that you've worked so hard to earn and save? Hopefully they've grown a little bit and turn that into an income that you can never outlive. And Mike, one of the products that you guys recommend for this is a fixed indexed annuity. So explain to the folks a little bit how that. Works, how they can be protected, but also grow their wealth a little bit.

Mike Zaino:
Yeah. So a fixed indexed annuity is one of the types of annuities that I absolutely love for those who are approaching retirement or who have already retired. Because with this, if we break down each of those words, your principle is fixed. You can't lose any of the original investment. Again, that's contractually guaranteed. Your money is not directly put into the market, but instead it's in an index that mirrors the market. So when the market rises, your money will rise, you'll get a reasonable gain. But when the market turns around and goes down because we all know what goes up must come down. Right? When that happens, what you do, your money will just flatline. You actually won't lose a single dollar zero at that point because that's what you'll get. Zero becomes your hero while everyone else who is in the market is losing, right? You don't lose a single penny. And then once the market turns around and rebounds, instead of you picking back up from where the loss occurred, you'll pick up from that zero line and increase from then. And here's here's a visualization, right? If everybody has $100 and loses 50%, what do you have 50 bucks and then you get that 50% back.

Mike Zaino:
Most people think they have $100 again, but they only get 50% of the $50, which is 75 total. So in order for a person that loses 50% to come back to $100 or 100% of their investment, they would actually have to earn over 100% just to get back to even. And that's the beauty of the fixed indexed annuity, because you don't ever lose a single penny, you just flatline when the market goes down and pick back up. Once the market picks back up. Right. And you can set these up for growth. You can if you don't need the money, you want to leave it for legacy. You can set them up for income. If you want that guaranteed lifetime income, heck, you can set it up for growth for a few years and then turn on income when you want to turn on income and then decide that, Hey, it's time for me to turn on that personal pension. And again, that income, once it's turned on, is guaranteed for the rest of your life, no matter how long you live.

Sam Davis:
So if you are tired and you're hearing this of of market volatility and you would much rather give yourself, at least for a portion of your assets, an income for life, a bit more stability, protect and grow your money. Give Mike a call 704560 1573 or visit him online at Money Matters with Mike Dotcom. It's the name of the show Money Matters with Mike and Money Matters with Mike. This episode is coming to an end. So Mike, I'll give you the last word and say goodbye to the folks and wish them a good weekend.

Mike Zaino:
Absolutely. You know, we just came out of Memorial Day weekend, which is near and dear to my heart. And my dad served. My grandfather served. I served service in our in our family. Is is just been huge. And this is my battlefield, right where I can go out there. If I can just help one more person not enter financial turmoil in retirement, then that's why I'm here. So I appreciate each and every single listener out there. And I just want to say thank you so much and as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation. Visit money matters with Mike 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 educational in nature. It does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness. Are the results obtained from the use of this information?

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not to. 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.

Producer:
Are you concerned about market volatility, rising taxes from the Biden administration and how it could affect your future in retirement? Then tune in to Money Matters with Mike to learn how you can protect and grow your hard earned wealth. Money matters with Mike every Saturday at noon right here on FM 100.1 and AM 1340.

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