The Power of ‘Results in Advance’ Planning for Retirement

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

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

Mike Zaino:
What's up, what's up, what's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money Matters with Mike is a show designed to arm you with plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing the heat again. On today's show, we're going to talk about the power of a results in advance retirement plan. And we're also going to show you how you can get to the guarantees and actually enjoy your retirement. As always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matthew McClure. Matt, how are you doing today, brother?

Producer:
I'm doing great, Mike. My only my mom usually calls me Matthew and that's when I'm in trouble, so I don't know how I feel about that.

Mike Zaino:
It's funny, my, uh, my youngest daughter's boyfriend is his name is is Matthew. And and, uh, everybody calls him Matt, and I call him Matthew.

Mike Zaino:
For.

Producer:
Good reason. Just stay intimidating for as long as humanly possible there. Uh, but no, I, I appreciate it. I always enjoy joining you here on Money Matters with Mike and I. Of course, we appreciate our listeners, uh, more than than anything, because as you often say, Mike, without the listeners, we just, uh, do not have a show. So, uh, thank you for our existence here, both on the air.

Mike Zaino:
From the bottom of our hearts, like we don't exist without our listeners chiming in, without our listeners, you know, going on our Facebook and YouTube channel, especially subscribing and liking that channel. Uh, that way they can catch up on all the shows that they missed and share it with all their, uh, their friends and family.

Producer:
Yeah, absolutely. And just just go there to YouTube search Money Matters with Mike. You'll find us there. Also on Facebook page, just go to Facebook search for Money Matters with Mike and you can find us there as well. Um so subscribe like us. Send messages. Mike is always glad to answer your messages and and loves doing that as well. And also, you know, he loved absolutely loved to meet with you, uh, to talk about your retirement future. Um, and really, you know, whatever your particular situation is, kind of get to the bottom of it and, and see what your wants and desires are for your retirement years and go from there. Right? I mean, it's all it's all customizable. Um, and that's really what you do. That's the bread and butter of what you do.

Mike Zaino:
It is. And when we say meet with you, we can meet. And I'm using air quotes with you being in the comfort of your house and me being in my office. And we can have a zoom video conference if you want. If you have an iPhone, we can do a FaceTime if you want, or if you want to meet someplace that is very neutral, like at a Starbucks or a Panera Bread, or someplace that you would actually like to, uh, meet without having to worry about being intimidated by, you know, by a financial institution or an office, uh, stuffy type environment, then I'm willing to do that, too. So it's, uh, you know, I like to sit on the same side of the table, so to speak. And it shouldn't ever be intimidating to talk about your money and figure out how we get to where you want to go.

Producer:
Absolutely. Right. So that's great. So you have your consultation in the Dunkin Donuts or the Starbucks or the Panera wherever you want to do it. Um, that just maybe not at the hibachi place because you might stuff might catch on fire and it just wouldn't be good.

Mike Zaino:
And I might eat way too much.

Producer:
I know exactly you and me both. I could just eat them. Eat all of them out of house and home there. Um, but yeah. So you can reach Mike at, uh, the, the website. You can go there to Money Matters with Mike.com. Money Matters with Mike. All one word.com. Or you can call him at 70456015737045601573 to get started along that road. All right. So a bunch of great stuff to get to here on the show today. And you mentioned it at the very top Mike talking about results in advance planning for your retirement. We'll tell you what we mean by that. And uh, give you kind of a step by step guide as we go through the show today. And one of those steps is deleting the IRS, minimizing your taxes in retirement. Boy, that sounds like a good plan, doesn't it?

Mike Zaino:
Amen. I know we're coming up on tax time, so it's, uh, it's upon us. And I know that's, uh, the day that I press enter. To send that check is literally the worst day of the year every year.

Producer:
Not fun at all. Um, so we're going to tell you how you can minimize your taxes. You can also delete unnecessary, unnecessary portfolio fees. We'll talk about that. How to generate more retirement income. We'll do a problem solver. So just a jam packed show here. So let's actually get things started off though as we do each and every week with our quote of the week.

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

Producer:
And this week's quote comes from a very popular person named unknown. Um, occasionally we run across a quote from unknown, and this is another one. Uh, it is this retirement is not the end of the road. It is the beginning of the open highway. Boy, I love that paints such a great picture.

Mike Zaino:
Yeah. Uh, Mister Unknown or Miss Anonymous. You know, whoever said that to begin with, I think, uh, definitely had some profound words. Because, you know, instead of reviewing retirement as the end of productivity or the end of personal growth, I think the quote emphasizes the idea that retirees actually now have the opportunity to embark on new adventures, to pursue their interests, and to explore different possibilities that they might not have had the time or the freedom to do during their working years.

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

Mike Zaino:
The first thing that comes to mind is travel. Okay? Many retirees take advantage of that newfound freedom to be able to travel, whether that's in the United States, whether that's to Europe, whether that's, you know, a way across the pond to like Asia or Australia or New Zealand. Um, and you can explore different countries, different cultures, different landscapes, and you can just kind of check off all of those items from your bucket list. You know, when you travel. Matt, have you thought about where you might want to go?

Producer:
Well, you know, it's funny because just before the the world shut down, we were supposed to go to Scotland, um, in the summer of 2020, and, um, still have not gotten to make that trip. Um, it just has not happened. And I would love to go to Scotland.

Mike Zaino:
You know, it's funny that you say Scotland. Um, because that's on my bucket list. I've not made it there yet. The summer of 2020, we were actually going to two places. We were going to go to Alaska, which is the only state that I have not been to. All right. I was going to be able to check off all 50 states. And then later on that year, I actually had a, uh, a carrier trip going to Tokyo. And of course, the world shut down. So neither of those trips happened. And I still haven't been to either Alaska or Tokyo. So they are definitely still on the bucket list. But another thing that folks can do with their newfound freedom is volunteer. And it provides an excellent opportunity when we're talking about retirement, for folks to give back to their communities in the form of volunteer work. And that could involve whether you're working for a charity, whether you're mentoring some of the younger generations because they need it. Um, or if you're participating in environmental conservation efforts, whatever that means to you, just volunteer work, I think, is a is a great thing to do for for retirees. Uh, another one would be education. All right. With more time on your hands, you know, there are a lot of retirees that pursue lifelong learning opportunities. I've often said that, you know what I've even thought about going back to college and getting my Juris doctorate. You know, just being qualified to to be an attorney. Not that I would want to practice law, but I think that, uh, you know, just having that that, uh, knowledge base expanded would be huge. Have you ever thought about maybe, uh, learning something different?

Producer:
Oh, yeah. You know, I've often thought about going back to school, and I've even explored it, you know, even just, like, an online, uh, thing, because really, you know, these days we can do just about everything remotely, so you don't have to even go on to a college campus. You can just do it from the comfort of your own home. Um, and I think, you know, obviously we're all better off the more we keep learning as we go through life. I think never stop learning. And so, yeah, that would be a great thing, uh, for anybody to do, uh, during, you know, during retirement or before.

Mike Zaino:
Yeah. No, there's no doubt about it. Another thing that I think is awesome is, is, is this this whole realm of entrepreneurship? There are a lot of retirees that choose to start their own businesses or, uh, pursue other entrepreneurial ventures that they've been passionate about. And that can involve, um, anything really, from consulting, okay, to opening up a small shop or maybe launching an online store. I mean, there is a wealth of opportunity for folks who want to, you know, become an entrepreneur. Um, I guess hobbies and interest probably is those types of things. Definitely, uh, come to mind. So whether you're want to play golf or you want a garden or you want to learn painting photography, you want to learn how to play a musical instrument, well guess what? You have time now to be able to dedicate themselves to fulfill those passions. And it could be something that's entirely new that you didn't ever have the opportunity in the past to try before. Um, like, I know my mom is actually learning, uh, Spanish. She's always been, you know. At Spanish, but she's going through, you know, 20, 30 minutes every single day on this online platform. I think it's Duolingo. Uh, and she always is posting her progress. And I'm like, I'm proud of her because she's she's over there perfecting a different language.

Producer:
That's great. I love that because, you know, I mean, I living where I do and kind of in metro Atlanta, especially growing up where I did, we had a heavily, um, Hispanic population in the, in that area. And I should have when I was in high school and college, taken Spanish, I took French instead for, for some reason, I guess, you know, I very.

Mike Zaino:
Useful in business in today's day and age.

Producer:
Oh, yeah. You know, I mean, I I'll be if I travel to Montreal, maybe I'll get to use or Paris one of these days I'll get to use it. But that was so. Yeah, that's a great one too, learning a language. But I mean, even stuff like, um, you know, painting or any sort of, like, hobby around the house, that kind of woodworking. I know that I've got a cousin, uh, who's like a generation older than than I am, um, who does a lot of woodworking now in his garage. So. Yeah, it's, um, you know, those hobbies and things that maybe you've kind of done on the side a little. Fiddled with a little bit. Boy, you've got a lot of time to hone your craft now.

Mike Zaino:
You definitely do. And then, you know, another thing that comes to mind is like health and wellness, you know, especially because now guess what? You have you have a lot of time, and you might want to prioritize your health and wellness by just adopting healthier lifestyles, getting you, uh, taking out walk or taking walks, I should say, not taking out walks, taking out the dog to go on a walk is really where I was trying to go with that. Uh, but just some form of regular exercise, the ability to both cook and eat nutritious meals, practicing, you know, mindfulness or meditation type things. And just maybe you go to a wellness retreat because those things are really starting to gain popularity, uh, over the last decade or so, where you go out to like Arizona or Utah or someplace where it's just all this Zen activity going on, it just gives you a place to decompress and then get, you know, one, uh, with nature and right in your mind.

Producer:
Yeah, I love doing that by just even going to, like, a cabin in the woods and, you know, especially, like, maybe in the Smoky Mountains, which obviously not that far away. Um, just head on over, get kind of a nice secluded cabin in the like. I love the fall. So like, in, you know, fall time of the year where it's nice and crisp outside and just spend some time outdoors and just take it in, you know, it does the soul a lot of good.

Mike Zaino:
No, I that's where I get in contact and in touch with, you know myself like really if I'm stressing out about X, Y or Z, just a walk in the woods, you know, is some place that I can just get lost in nature. And I think, you know, again, for most retirees, the most obvious way that they can spend their time is with family, because now you've got much more time on your hands to be able to spend with those loved ones. And whether it's your grandchildren, whether it's your adult children or extended family members, retirees can deepen their relationships and create even more lasting memories with those that they absolutely care about. So, you know, overall, I guess unknowns, uh, quote just highlights the idea that it opens up a world of possibilities and opportunities for individuals in retirement to continue growing, to continue learning, to continue experiencing life to its fullest. And it also encourages, uh, retirees to embrace that new chapter with enthusiasm and optimism.

Producer:
Yes. Absolutely. Right. And, you know, I mean, just because you don't go into the office every day, you don't go to, um, you know, if you work in a factory, you don't go there every day, whatever your work is, if you don't do that every day, that doesn't mean, well, I'm done in life. It just means that this is, as we say, that new chapter, that next chapter for you. And it could be a very and hopefully is a very long chapter, a very good chapter for you and something that's enjoyable. You know, they say it's your golden years. We want them to be absolutely golden. Um, and for you to have the, the time because you got the time on your hands. So you got that down. But actually, you know, the resources to be able to do a lot of these things. That's really what this show is all about. And I know what you of course, help people with every day. Mike.

Mike Zaino:
Yes. I mean, my my goal is no matter what your goals are, is to figure out a way that we can at least accomplish some of them, if not all of them, and let you enjoy retirement to its fullest extent. So that's why I encourage everybody that's listening to pick up a phone, give me a call (704) 560-1573. That is my personal cell phone number, folks. Millions of people have the number and I do my best to answer the calls as I'm able. Anybody that leaves me a voicemail gets that return, typically within 48 hours. And then the fastest way to get me is just text that same number 704. 5601573. Obviously phone and or text is the easiest way to get me. You can email me at Mike at Money Matters with Mike.com. You can go to Facebook and reach out on our contact Us page. You can do the same on our YouTube channel at Money Matters with Mike on YouTube. So bottom line is, is that if you're not, um, acting, if you're just putting, you know, your, your, your dreams in that drawer of procrastination without a very, very clear path on how to accomplish and get from point A to point B and do everything that you've, uh, wanted to do, I can help you with that. All you got to do is act.

Producer:
That's right. That's take that action today and you can actually make your life better. Future. You, as I often say, will thank you for that. Um, and part of what we are spending the show on today, actually, most of what we're spending the show on today is talking about just that kind of thing, but we're framing it like this results in advance plan for your retirement. That's what we're talking about. What are what do we mean by results in advance planning for people's retirement? Because we often say like, you know, it's our crystal ball is broken. You know, we don't know what's going to happen down the road. Um, but that being said, what do we mean by results in advance?

Mike Zaino:
Results in advance, to me, means that people have a sense of confidence, knowing that their retirement plan is designed and built to last no matter what life throws their way. Okay. And so, you know, having a plan that that you set and forget is not the idea, but having a plan that you can have confidence in. Like I said, that no matter what happens to you with jobs, what happens to you with illness, no matter what happens to you with death. Okay, you're you already know the outcome based on the plan that we've designed. So I think, you know, when you have the ability to kind of see the future instead of just winging it. Unfortunately, way too many Americans just wing it and they think that they have a plan until life throws them a curve ball and they find out that their plan won't stand that test of time. So having that confidence gives folks that peace of mind, knowing that they're good no matter what, 100%.

Producer:
And yeah, you know, hope is not a strategy. Winging it is not a plan. So you got to actually have something concrete. And that's what this is all about here. And we've got some steps to go through, Mike, that, that uh, the listeners are really get something great out of. I feel like to get that results in advance and build that results in advance. Plan number one is to delete the IRS and minimize your taxes in retirement. Boy, that is something that I would where's where is that button on the keyboard? Delete the IRS.

Mike Zaino:
I think that is something that pretty much every American I know would love to do. Just just abolish the IRS. The likelihood of that happening, though, I don't think it's really going to come to fruition. That being said, you can minimize the amount of tax that you have to be, uh, paying in in retirement. It just because paying taxes is a reality of life itself. You don't have to leave the IRS a tip. And so we have two, um, different strategies that you can either take advantage of one or you can take advantage of both. But these are tax free investments that retirements have the ability to participate in. And they can start those today.

Producer:
Yeah. The first of those that we'll talk about here is is what's called a Roth. And there are a few different types of Roth accounts. But basically if it's got the word Roth in front of it, it means that it's a tax free account. You pay, you put post-tax dollars in the account, but then the growth is tax free. The withdrawals that you make in retirement also tax free. When we're talking about a Roth.

Mike Zaino:
Know 100%, and I think not enough Americans understand the power that is behind those four letters. Roth. Right. Because when you are funding your 401 K, if your employer offers a Roth version, and the only way you know whether or not they do is to ask the question, okay, um, but the power behind that tax free growth, because you're seeding it with after tax dollars and that allows for that money to grow tax free. So whatever it generates in the form of interest and return on investment, guess what. That's also tax free. So that when you go to pull it out, you don't ever have to pay the tax on it again. And the fact that, um, in addition to the tax free benefits, there are no required minimum distributions for those Roth funds, meaning the IRS cannot force you to withdraw those funds every year just so they can collect the tax base off of the growth. Because guess what? You paid the tax on the seed, not on the harvest. And that allows your money, your hard earned money to grow that much faster.

Producer:
It really does. So that is number one as far as tax free investments for your retirement. Number two is actually something you might not have thought of as far as investment goes. And that's life insurance. You can actually use life insurance, you know, during your life, which is kind of crazy.

Mike Zaino:
Yeah. And when people think of life insurance, what they really think of is death insurance. And let's face it, death insurance is not that marketable, okay? Because nobody wants to think about dying. And in fact, you know, your parents life insurance, your grandparents life insurance was, in fact, just that. It was death insurance. Nobody got a death benefit unless somebody died. But a properly structured life insurance plan in today's day and age, can actually help you to achieve tax free income as a guaranteed lifetime income stream in retirement. So we can actually help you structure your money in life insurance options that will protect your family with a death benefit. So that's money in case you do die. Okay, if you know. Because guess what? Not in case you die. But when you die, everybody is pretty much guaranteed that. And in the likely scenario that you do not die unexpectedly, money can be invested in the right types of life insurance policy that allow for those tax free withdrawals for life. So you can structure a tax free income stream, and that gives you money for living. So you got money if you die too soon, money if you live too long. And then what happens if you get sick in between? Okay. Well, today's life insurance policies also address things like chronic critical terminal illness. Alzheimer's can provide extra benefit if you have to have in-home health care, if you have to have assisted living care, or if you go into a nursing home, they'll actually allow you to access a portion of the death benefit to offset those costs. So they're kind of the Swiss Army knife of of insurance products. And if they're started early enough, they can really be an extremely powerful tool. You need about 15 plus years for these things to grow. Okay. But if you're able to do that, I've seen them throw off six figure income streams. That is guaranteed for the for the rest of the person's life, depending on how much they're able to, you know, put.

Mike Zaino:
In not.

Producer:
Your grandfather's life insurance anymore. Um, not at all. That and that, you know, death benefit is also still part of these policies, but there's so much more like you just described. And, you know, somebody might be asking like, okay, what is the advantage then of something like, you know, life insurance or a Roth doing a Roth conversion? Um, if I still like, one of the government's going to get their money one way or the other, I still have to pay taxes, even if it's, you know, I'm putting post-tax dollars in a Roth, so I got to pay taxes. I'm just paying them now instead of later. But why might they want to do that, pay the taxes now instead of later?

Mike Zaino:
Well, I mean, when we consider the marginal tax rates in the United States, um, you have to really understand because most people think that we pay a lot of taxes. In fact, I was just speaking on Capitol Hill this past week at a legislative conference, and one of my questions says, hey, you know, I asked the people there, do you think we pay? How many people think we pay high taxes? And the majority of the room raised their hand. And, you know, it might shock folks to to know that in the history of taxation in the country, we're actually in a very, very low marginal tax rate environment and understand that the current 24% tax bracket, the current tax bracket, that was actually 56% from 1960 to 1963, which is more than double. It's in fact, you could double it and add 8%. And that's where we were from 1960 to 1963. So if you don't think the government has the power to change the rules on you and raise taxes in the future, um, we're going to talk about some things that might give you some cause for concern about that. And then, you know, when we talk about life insurance, it why you would want to do that. I just think that if you want to be able to change your family tree, and I don't say that lightly because the death. Benefit from life insurance. Guess what folks? That goes to your your beneficiaries, your heirs 100% tax free. That could give them a huge head start on the rest of their lives.

Mike Zaino:
Yeah, it absolutely could.

Producer:
And I speak from personal experience as a recipient of some of that, um, that money from the death benefit from a life insurance policy. Uh, one thing that we did not get that year was a tax bill for that, uh, benefit, because it just does not happen. So, yeah, if you're concerned about that, the rising tax situation in the future, because, you know, as as Mike was just saying, we're at some of the lowest tax rates we've ever seen in this country, and it's bound to go up at some point in the near future. Uh, just go to Money Matters with Mike.com. That's Money Matters with Mike.com or call (704) 560-1573.

Mike Zaino:
Yeah folks you have to understand that the cost of taxes, the cost of taxes will significantly affect your retirement if you do not have a plan. And having a proper estate plan in place is another thing that you can do. If you're interested in minimizing your total tax burden in retirement. And we can help you get all of that set up.

Producer:
Absolutely can. And once again, you can go to the website at Money Matters with Mike.com to get that started for you and give yourself a better future, make yourself better prepared. Um, now, while we're on the subject of taxes, Mike, obviously, you know, over the past year, uh, not year over the past month, month plus probably for folks they've been getting in the mail or getting notifications that they're, uh, now available online or both those w-2s or the, you know, 1099 or whatever tax forms that you have. So tax season, it is underway. Uh, and tax day, of course, comes up on April 15th. And um, that's one of the reasons why we're reminding folks, right, of these two tax free investments, Roth IRAs and life insurance. But a lot of people will say, oh, but, Mike, I thought municipal bonds, uh, were tax free as well. They're billed that way a lot of the time. So why aren't we including those?

Mike Zaino:
Well, because they're not necessarily tax free. And we're talking about municipal bonds. Okay. There are sometimes or they are sometimes, I should say subject to both federal and state as well as local taxes. And they can also impact your Medicare costs, especially for higher income earners. Because Medicare, don't forget, has a two year lookback on on income. So, you know, there are some reasons, obviously, that you should consider a Roth conversion. The first one being tax free accumulation of wealth, okay. The second one being tax free income during your retirement, uh, a really, really important one is the protection from future tax increases and the fact that there are no required minimum distributions. So you're able to actually take what you want, when you want. And then on top of that, when you do become room temperature, as we like to say, you're able to leave a tax free benefit to all of your beneficiaries.

Producer:
And you can call 704 5601573 if that's something that you are interested in exploring because, uh, you know, if you don't are not a fan of paying taxes and paying too much in taxes and you want to minimize that burden, that's a great road to go down. All right. Um, talking about results in advance planning here on today's show. And step two in that is deleting unnecessary portfolio fees. I mean, I you know, I think that a lot of folks don't even know, don't even realize the fees they pay.

Mike Zaino:
They don't. In fact, we find that most people who call and meet with us don't understand the fee structure and how they're actually paying a lot of fees inside of both their portfolio as well as their retirement accounts. So what we want to do is quickly identify them, show you how they, you know, are eating at your returns, and then quickly eliminate any of those excess fees, especially on assets that are underperforming. So, you know, if I ask you the question, you know, it's your money, right? Do you not want to get the most that you possibly can out of it? Um, I think most of you would say absolutely, Mike. And the reason why? Well, you've worked hard to earn that money and you've worked even harder to save it. So all you got to do now is let us help you put that money to work and start paying you an income, all right? So that you and your family can count on that income during retirement. So, you know, we'll help you take advantage of, of fee efficient strategies while generating, at the same time, safe and predictable income streams that you can never outlive.

Mike Zaino:
Yeah.

Producer:
And also, you know, one thing that people might want to consider and a lot of folks do for a big portion of their retirement is actually something that we like to refer to as a personal pension. You know, the old pensions have largely gone away by employers, um, because, you know, the 401 K came along. And so that shifted the burden of retirement saving and investing from the employer to the employee to the worker. Right. So very few people these days still have that employer pension, but there is this possibility of building your own personal pension as well, right?

Mike Zaino:
Yeah, 100%. Uh, possibility. In fact, it's a probability if if you come and talk with me, I'm going to show you exactly how we can do that, because, you know, we've all heard of the 6,040% structure for, you know, your dad's and your grandpa's portfolio. Okay. And that was made up of 60% equities and 40% bonds. And then as your dad and your grandfather matured, they got a little bit older. That that ratio started to shift into 60% bonds, 40% equities. But the reality of the fact is, is that we can take the bond portion of the portfolio and we can replace those with fixed indexed annuity, while also deleting all of those fees on the bond portion of your portfolio and enable them to generate often 50% or more. Um, as far as saving them on, on fees, but we're able to generate tax, uh, efficient and sometimes tax free, depending on how they're structured and where the money came income for life, simply by replacing the underperforming bonds in their portfolio with a much more fee efficient and market efficient investment option.

Producer:
And we'll go into more detail about fixed indexed annuities coming up here in just a few minutes and talk a really in depth about how, uh, they also can help you build an income stream for life. And it's just such a great, um, option for so many folks. And, you know, if you are interested in learning about how much a bond replacement could save you in fees and how it can really, really improve your overall retirement income picture, just get in touch with Mike. 7045601573704560 1573. Also go to Money Matters with Mike.com. And by the way, as Mike said earlier in the show, you don't just have to call that that number. You can also text Mike at that same number, 704 5601573, and he'll get back to you. So when it comes to understanding how much you're paying in fees, Mike, we often will hear the the Terme expense ratio. Um, folks, folks might say might hear that and be like, oh God, that sounds like kind of a wonky kind of a terme. And something that my professor might explain in math class, and it makes me fall asleep. But it's an important thing to know what the definition is and how to find out what that is for you. Right?

Mike Zaino:
Yeah. I mean, again, if you don't know what you're paying in fees, there's a problem there. And I think one of the bigger problems is it's not just the management fees, but a lot of folks who are invested in mutual funds, although the funds themselves have their loads and their fees, sometimes on the front end, sometimes on the back end. So they make it really difficult for people to understand exactly how much they're paying in fees. But, you know, when from the, uh, concept of this expense ratio, there's a formula where you just take your management fees and you divide them by your total investment, okay, in that particular fund. And that's going to equal your, um, expense ratio. So if you don't know the answer to, you know what, you're paying in fees then and you can't quickly pull it up, uh, you owe it to yourself to find out. And I'd be more than happy to take a look and identify your current expense ratio in your retirement savings plans that you currently have.

Producer:
Yeah. And you might be shocked as to what that is. Uh, go to Money Matters with Mike.com once again folks to reach out. All right. Results in advance retirement planning. As we are continuing our discussion here today. Step number three is to generate more income from your savings. And this is so, so important because a lot of people think about that big nest egg, um, and have that goal in mind. But so often we will say it and we'll say it again, probably until we're blue in the face, is that retirement is so much more about income than it is about that big nest egg number.

Mike Zaino:
The number means absolutely nothing. It's what that number is able to throw off in cash flow. Because at the end. Of the month. If that number doesn't produce the amount of cash you need to maintain your current lifestyle, then you're going to have to sacrifice. And so many people who call our office and who meet with us, they ask, you know, how much they need to have saved in order to successfully retire? And I always say, well, it depends. And they kind of look at me. I'm like, what does your retirement look like? Okay. Because what I can tell you, and I've said this before, is that front porch sitting, watching the dogs and the grand youngins play in the yard takes a much different capital reserve than flying business class on Emirates Airlines and going to, you know, Australia or Tokyo or Europe, right? It's just it takes more money to do those types of things. So the reality is that the size of your nest egg doesn't nearly matter as much as how much retirement income you can create, you know, using those same hard saved dollars, right? You earned them. You saved them. And now let's put them to use. And so building a smart income plan, it starts with taking a look at your expected income sources during retirement. And for most folks that includes your Social Security. Um, if you're fortunate enough to have a actual pension or if you are smart enough to create a personal pension, those are often established by using a very sophisticated tool that I absolutely will simplify for you, called a fixed indexed annuity. So we love fixed indexed annuities.

Producer:
Yeah, absolutely. And talk about exactly what they are. Uh, Mike, for people who might not be familiar and how they can help you build that income that you can't outlive.

Mike Zaino:
Okay. So you know, an FIA that's the acronym for fixed indexed annuity. It's actually an insurance contract, but it's not your again, it's not the old forms of annuities back in the day the annuities. And this is how annuities in general just got a very bad rap. You had to save your own money. And then you gave it to an insurance company. And that insurance company would invest it on your behalf, but then they would charge you money for them to pay you back your own money. And then when you died, guess what? They kept your money. And so that did not seem like a great idea. It doesn't definitely doesn't sound like a great idea to me, does it to you, Matt?

Producer:
Absolutely not. I would know. Right.

Mike Zaino:
So the the new type, right. The fixed indexed annuities, they're not like that. Okay. So what they do is they provide a solution for investors that are looking to protect okay. Because it still has that protection component. You're guaranteed to never lose a penny of principal due to market volatility. So what the insurance company will do is they'll invest your money in underlying indices or indexes, okay. And so dependent upon the performance of those particular index choices that you and your insurance company have made, when the index goes up, then you get a gain credited to your account. When the index goes down, you just have an agreement that you're never going to lose a single penny. So, you know, you need to ask yourself the question, how much of your hard earned money are you willing to risk in the market? And as I've said before, the older we get, the less we can afford to risk simply because we don't have the time to make it up. And once you retire, you're no longer contributing to your IRAs, your 401 K's, your TSP, so are and so forth, because, you know, fees are going to be a safe accumulation alternative to either bank CDs or traditional bonds.

Producer:
Yeah, we all have risks in life that we have to contend with. And the goal is to minimize those risks or take some of those risks as many of them as you can off the table. And that really is what fees fixed indexed annuities do with market risk. Your money is not really at risk, even though it's it may sound like it is that you say, well, it's tied to an index, but it's just the performance of that particular index. And your money is not actually technically in it. But but it will follow the performance of said index, whatever that might be. And there are kind of a gazillion of them out there that different products use and are tied to.

Mike Zaino:
Yeah, there are. So I mean, you get the protection from market volatility, which makes them a very, very attractive option for investors who are seeking, you know, steady and reliable growth, as well as the possibility of an income stream, because they can be designed for growth. If you don't need income, they can be designed for immediate income if you do need income, or they can be designed for growth for a few years until you need income. And the growth within them. Guess what, folks, is tax deferred. Which means that any earnings on the annuity itself, they're not subject to the taxes until you're actually withdrawing them. So the lifetime income stream that can be produced from this, you don't have to worry about breaking your budget and enjoying your retirement, because the income stream that you can count on will never, ever outlive you. Okay? Even if you live to be 80 years old, 90 years old, or 120 years old, these annuity companies will continue to make payments as long as you live. And then if you, uh, pass away unexpectedly or when you eventually do pass away, the remaining account value is passed on to named beneficiaries.

Mike Zaino:
So we can help you invest in the right annuity that will provide you with lifetime income for both you and or your spouse, while still providing a death benefit for your beneficiaries. And in the opinion of this financial professional, FIA are suitable investments for up to roughly 70% of your portfolio. And typically our clients are using anywhere between, you know, 40 and 70%. Um, and I always ask the question, you know, come hell or high water, what what's the amount of money that you don't want to go below? So if you have, you know, $300,000 and you don't want to go below 250 or 200, well then that's the amount we protect. You can gamble in the market with the other. You know, that's just an example. If you have $1 million, will your pockets are a little bit deeper and you could stand to, you know, to lose a quarter of $1 million. And guess what? You still have three quarters of $1 million, which is no small sum to sneeze at. So, you know, depending on your individual situation, we can tailor make that individual, um, you know, FIA, just to suit your needs.

Producer:
That's really what it's all about. It's not a one size fits all thing. Um, and that, uh, you know, should give you some, some peace of mind that this is not just something that somebody kind of, you know, thrown together and said, oh, well, you know, this this worked for, you know, Mr. Smith down the street. So this has got to work for you. No, it's not that at all. It is customized.

Mike Zaino:
And to give you a little bit more peace of mind, folks, we only use the top echelon, the top tier companies, companies that are highly rated, multi-billion dollar companies that have been doing this since y'all have been, you know, way before y'all were even in diapers. So that again, gives you that peace of mind knowing that we're only going with long standing financial institutions. And while banks go out of business all the time, insurance companies never do.

Mike Zaino:
There you go.

Producer:
That's absolutely true. And you can go once again, folks, to Money Matters with Mike.com. If a peace of mind sounds like something that's, you know, would be good for you and I and I'm sure it does Money Matters with Mike.com. Or you can give him a call or send him a text (704) 560-1573.

Producer:
It's time for this week's Problem Solver.

Producer:
Helping out a couple of listeners today, Mike and our Problem solver segment here, Steven and Nancy. Um, they are long time listeners actually, to this show finally gave you a call. You know, you've heard the old adage or I guess, kind of cliche now these days. Uh, long time listener, first time caller. That was definitely the case here for Steven and Nancy. Uh, they've been listening almost the entire just about two years that we've been on the air here. Um, but they gave us a call. Gave you a call, I should say Mike, in January so that you could help them make 2024 the year that they actually established a good retirement plan. And they're already, you know, getting to an age where they really do need to to buckle down, right? I mean, Steven, 73, Nancy just behind him at 71 years young. Uh, they are married. Want to see their retirement results in advance, they said, so that they can enter their golden years with confidence. And the good thing is, you're able to quickly determine that their investments for retirement had drastically underperformed over the last three years. They were overly invested in bonds. Steven's 401 K from work was invested in a target date fund that was really dragging down the overall performance of the portfolio.

Producer:
And in fact, you know, they had lost market value in their retirement portfolio each of the last three years, and they needed help moving forward so that they could stop digging a hole for themselves. Um, and that really is, you know, if you're not, um, even if you do see gains, but those gains are not keeping up with inflation, for example, you're still getting yourself dug into a hole, but they were actually seeing losses in their investment portfolio. Um, so here's the needs that they have for retirement. And then we'll let you, of course, reveal the solution, Mike, because you are the problem solver after all, um, their needs for retirement. Steven and Nancy want to be or want more retirement income, rather. Uh, so they can actually count on that retirement income, right? Not just a nest egg, as you were saying, Mike, that could be affected by that volatility in the stock market. They're active, they're healthy. They plan to travel in retirement and they want to help fund a family vacation once a year with all the kids and the grandkids, which I think that's my my favorite part of what they want to do in their retirement years. So how did they build now this smart plan, uh, to solve those problems.

Mike Zaino:
You know, so.

Mike Zaino:
So one thing I wanted to highlight that you said that I think many of our listeners may be scratching their heads and wondering how they actually lost money each of the last three years, especially considering last year the S&P was up as much as it was up. Um, it's because the year before that, it was down as much as it was down. And when you lose 20%, you got to gain 25% just to get back to even. And if you lose more, then you got to gain even more. I mean, 30% necessitates a 43% return just to get back to even. And how often does the market return? 43% annually? Um, never. Okay, so what we did was performed a detailed x ray on their entire portfolio. And we also x rayed a couple annuities that they had that were actually older annuities, and they were still invested in them. We definitely helped them choose a much more fee efficient portfolio that matched their actual risk tolerance and aligned that portfolio of smart risk investments with their overall plan. And so we converted 1 to 1 of their underperforming annuities to a new fixed indexed annuity that gave them an immediate 20% income bonus on their money. I'll say that again. It gave them an immediate 20% income bonus on their money, and also included an 8% guaranteed return. That's called a roll up each year that they deferred withdrawals. And so this is a fixed indexed annuity from Nationwide Financial.

Mike Zaino:
You know, nationwide is on your side right. They have Brad Paisley and Peyton Manning doing their, their uh their commercials. But this is a very long standing A-plus rated carrier that this particular fixed indexed annuity that they offer includes a 330% what's known as a participation rate, okay, in the underlying index. So that is going to provide a significant potential for those market link gains. Okay. So whatever the 100% of their money, like if you had a dollar and it grew by $1, that's 100%. So if this one you had a dollar would grew by 300. Uh, excuse me, $3.30. So that's a 330%, um, participation rate. So we also help them turn on an income with. There are other existing annuity which doubled their current retirement income amount. Okay. And that was an amount more than the current required minimum distribution that Stephen had just begun to take because he turned 73 this year. So his income from the annuity satisfied the RMDs. We did take a portion of their, um, retirement nest egg, and we reduced the bond exposure by replacing it with a highly rated fixed indexed annuity. And then finally, we reduced the standard deviation in their portfolio, which that's a measurement of risk, folks, by decreasing the high correlation of their assets and moving a portion of their savings into lower risk investments, that still delivered both a reasonable, uh, and higher rate of return than they had been generating with their previous investments.

Producer:
Yeah. Just getting, you know, that safety there when you're also getting that, you know, good rate of return. Um, that's, as you said, either reasonable or even higher than what they were seeing before. But you've got safety from that market volatility and from the other risks that we talked about. Um, that sounds like a good plan to me.

Mike Zaino:
Absolutely. Right, Matt. In fact, we want to help all of our listeners, every single one of you prepare for a successful retirement. So do me a favor. Please do yourself a favor. Don't do it for Mike Zaino. Do it for you. Give us a call this week. Schedule a complimentary retirement and financial consultation. Because what we're going to do during that consultation, the first call is just going to be a discovery call and see if we need to actually move into getting, uh, some of your documentation and doing a deep dive into your current situation. But that's a comprehensive consultation. It's no cost whatsoever to our listeners, and there's absolutely no obligation. You are only going to work with me if I can do better for you. Um, right. That would be the the thing that makes the most sense. Um, I'll help you analyze where you are now. We'll look at where you want to go. We'll, you know, discover any unnecessary fees that you're paying and help cut those out of any of your retirement savings account. But we want to show you how to get from point A to point B in the most market efficient, fee efficient, and tax efficient ways. And if you are coming close to Social Security age, right before this call, we got off of a Social Security planning session. Um, and I was just blown away. There are over 2700 rules that govern Social Security and how you can access it. So we can help you with that social Security maximization planning and determine the appropriate time to start taking your benefits. And then I guess, above all, if you haven't heard from your advisor lately, um, please talk to us. Get a second opinion. If you don't have an advisor, please talk to us and get a first opinion. We can help set you on that path to the retirement that you've always envisioned for both you and your family.

Producer:
Absolutely. So. And you can go schedule your, uh, no obligation consultation today with Mike Zaino, a $1,500 value that is provided to you at no cost. So get in touch with him this week so he can help you build and navigate your financial plan. Just give him a call or send a text at 704560 1573 (704) 560-1573 or go online to Money Matters with Mike.com. So Mike, we've spent a lot of time today talking about tax rates, talking about, you know, how much people are paying in taxes, the tax brackets and all of that, and saving as much as you can on that not being subject to higher taxes than you need to pay. Um, we've been talking a lot about that. Why have we sort of been harping on that so much during the show today?

Mike Zaino:
I don't know if, uh, folks have been paying attention, but, you know, our national debt is is getting out of hand. It's it's over 34.2 trillion with a T dollars and counting. And the current state of the national debt, as well as the federal budget deficit, has us and many economists concerned about rising taxes as well as the future of Social Security. So when we talk about, you know, these income sources in retirement that you may or may not be able to, you know, rely on the fact that Social Security's trust funds are running dry. And, you know, there are things that you absolutely must know for retirement. I mean, Social Security itself is the largest federal program in the United States, and the vast majority of older Americans receive Social Security benefits, which either. Partially or maybe even fully fund their income in retirement. So, you know, when we look at where that is projected to go over the course of the next decade. Um, yeah, about 97% of Americans age 60 and older either are receiving or will collect Social Security, according to SSA data. And so, you know, the biggest thing is, is I want you to not enter retirement without a plan for Social Security, but I don't want you depending on Social Security, and I don't want you depending on the fact that you're going to be in a lower tax bracket when you do retire. Because while the current state of of affairs may allow for that, if the government changes the rules, that will no longer be the case. And so having that personal pension, just as a peace of mind source of income, enables social to security to be the cherry on top. You know, you don't even have to rely on it, but it is now the cherry on top that gives you even more flexibility and more freedom and more confidence in your plan, which ultimately, you know, results in that peace of mind allowing you to enjoy your retirement.

Mike Zaino:
Yeah, the.

Producer:
Average benefit of Social Security. Anyway, these days, Mike only provides an annual income of 22,800 and some odd dollars. So it's not it's not a lot. So if you are relying on that to solely be your source of income in retirement, I think you're in for probably a bit of a rude awakening when you get there and you realize, oh, wait, um, I've got a lot more expenses than I have income.

Mike Zaino:
Yeah. I mean, the last time I checked, $22,884 a year, which is the average, if that's all you're relying on, you're living in poverty. I mean, that that is no way to enjoy your retirement, your golden years. Those are more like lead years. Dragging you down, worrying about where your next meal, worrying about where your medications is, worrying about if you'll ever be able to help family or friends, worrying about, you know, forget taking vacations and traveling. If that's all you're living on. You're struggling day to day, much less month to month.

Producer:
Yeah, and that is what we want to help you avoid. And just to get started down that road, folks, all you got to do is make a phone call or send a text or go to the website. The phone number to either call or text is 704 5601573. I'll give it to you one more time. 704 560 1573. You can also go online to Money Matters with Mike.com and fill out the contact form there and get in touch with them. All right. Okay, Mike. Well, that is uh, as I look at the clock here, going to just about do it for this week's show. But I thank you, as always, for everything that you bring to the table and all the wonderful information for our listeners. And, uh, we'll talk at you again next time, sir.

Mike Zaino:
Matt, thank you for everything you bring to the show as well. I don't know if our listeners realize, but without Matt, um, you know, me being on my own, I'm really good at what I do, but I can't do the stuff that Matt does. So we complement each other very, very well. Uh, most importantly, I just, you know, we want to send out a heartfelt thank you to all of our listeners because we said it at the beginning of the show. But without you folks, this show does not exist. So whatever you're doing this weekend, I hope you enjoy it to its fullest extent. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with Mike.com or pick up the phone and call 704 560 1573. That's 704 5601573 not affiliated with the United States government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short terme investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it could all affect your future in retirement? Then tune in to Money Matters with Mike to learn how you can protect and grow your hard earned money. Money Matters with Mike every Saturday at 9 a.m., right here on FM 100.1 and Am 1340. Schedule a free, no obligation consultation now at Money Matters with Mike.com.

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