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9.6.22: 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 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 live from Fort Mill, South Carolina

Mike Zaino:
Happy Saturday, people. What a great day to be alive in these United States of America. And once again today, we are going to bring the heat again. The whole goal of this show, folks, is to arm you with information you can actually use and give you plenty of meat on the bone to chew on each and every week that we're on the air. I'm excited this week to continue part four of our series on Smart Retirement Planning. And once again today I have the distinct honor and privilege of being joined by the one and only Mr. Matt McClure. Matt, how are you doing today?

Matt McClure:
Doing great, Mike. How's it going so far this weekend?

Mike Zaino:
Man Love it in life, you know, had had the opportunity to have a good Labor Day week this past week. It was awesome. Took a little bit of time, not too much. Because what I find is that when when federal holidays come about, there are a lot of people that are off and on their off days. They want to talk about how to not run out of income in retirement money in their golden years. So we had a lot of appointments this week as well.

Matt McClure:
There you go, keeping it busy. And it's like it's one of those, you know, those holiday weeks where the holiday is on a monday, you got to cram everything into four days and you're sort of you know, you've had the long weekend, the week, the week before, but then at the end of that four day week, you're kind of worn out. You know, that's I've been feeling that.

Mike Zaino:
Yeah, because what happens is, like you said, you're trying to condense five days into four and those four days become at least ten hour days in a lot of instances. And, you know, people ask me, Mike, how are you always such in a good mood? And I'm like, What do you mean? They're like, You're always such in a good mood. I'm like, Well, I don't watch the news, number one, and I love what I do. And I said, All you got to do is work half days. And they kind of look at me funny. And I said, It doesn't matter whether it's the first 12 hours or the second 12 hours, right? Just work half days and they get a good chuckle out of that one.

Matt McClure:
There you go. I love that. I've sort of lived by that, as a matter of fact. But I'm glad that you're having a great weekend. I'm having a great one as well, trying to, you know, rest, recoup, relax a little bit. But also, of course, the reason that you are here, Mike, is to help our listeners make their lives better, and especially when it comes to finances and preparing for retirement.

Mike Zaino:
Yes. Yes. I mean, there's nothing that I like more than seeing that light bulb go off in people's eyes when they understand and they finally get why I'm recommending what I'm recommending. And they have belief in their plan and they're excited to attack it. I mean, like I've said before, there are things that I enjoy and there are things that give me joy. I haven't worked a day in the last dozen years just because this is my passion. It's what I do. I hope that comes across on the airwaves and everybody that's out there. Like without you, we don't exist. So thank.

Matt McClure:
You. Yes, absolutely. Folks, we absolutely love hearing from our listeners as well. We we love the fact that you are listening, because, as Mike said, without you, we're not here. So that that means a lot to us that you're taking time out of your weekend to join the show. You can also, folks, if you want to go online money matters with Mike is the website it's money matters with Mike. A lot of great info there about the show about Mike Zino himself and you can also use the website to reach out to Mike for a free consultation. We'll have a lot more on that coming up a little bit later on in the show. You can also give Mike a call directly to Mike Zaino's very phone that rings right in his pocket. 704 56015737045601573. You can also subscribe to the show wherever you listen to podcasts. Folks do that if you want to just listen to us whenever you want. It's kind of an on demand sort of a thing, right? And when I say wherever you listen to podcasts, I mean it because it's Apple Podcasts, Spotify, it's iHeart, it's all the biggies. Just go there and search money matters with Mike. Subscribe. Leave us a rating. Hey, send us a message to we, as I say, love hearing from you as well. Well, Mike, a lot of great stuff happening on the show today. As you sort of previewed earlier. We continuing talking about the smart retirement plan, right?

Mike Zaino:
Absolutely. Absolutely. You know, we talked about several things in the last three episodes. So if you haven't had a chance to to listen to any of the. Go back and listen to the podcast or go to Money Matters with Mike. Com Just to kind of refresh and catch up to date as far as everything that we've talked about so far. But yeah, this is part four of the series, so definitely excited about it.

Matt McClure:
Yeah. And, and we sort of left off a little bit of a of a teaser last week when we were talking about smart income because, you know, the clock just sort of ran out for us at the end of the show. And so we didn't get to cover everything that we wanted to cover. So we're going to continue the smart income discussion this week, and then we're going to talk about Smart Review. That's, you know, taking an in-depth look at your particular situation, your your finances. And of course, we'll get more about that coming up later on in the show. And we've got some other fun stuff as well. So stick around until the very, very end, folks, because you don't want to miss one single minute.

Matt McClure:
And now for some financial wisdom, it's time for the Quote of the week.

Matt McClure:
And this week's Words of Wisdom come from Jim Rohn. And it's a it's a good one, I think. Anyway, time is more valuable than money. You can get more money, but you cannot get more time. And boy, the older I get, the more true that becomes.

Mike Zaino:
You know, it's something that you can't get more of it in. I'll share an experience, a personal experience. It was October of 2019, and I wasn't feeling well. And I'm like, Man, what is going on? And went into the doctor and it turns out I was in end stage renal failure. My kidneys were failing and they told me that I would need a kidney transplant. And you want to talk about being hit in the head with a brick? Kind of like holy cow kind of moment. Right. And so we started running a bunch of tests on I had 17 people that were willing to donate a kidney. They started testing my wife. And God was involved 31 years ago when we got together because they never had to test anybody else. And I went in for a kidney transplant with my wife as the donor on December 17th and a week later on on Christmas Eve, got to come home. And we were on the news that that night, you know, as a Christmas miracle. And I just think it's a miracle in general and wow, the power of the human body. But ask anybody that has had any type of health scare, whether it's a heart attack, a stroke, heck, whether you were in a pretty severe car accident, you know how it makes you think a little bit differently and how things could have turned out much, much differently. There's a great possibility that I wouldn't have been here talking to you today if I wasn't able to find that donor. And so you cannot get time back. And so it's very, very important.

Matt McClure:
Yeah, absolutely. Like, you know, if I was thinking about this earlier when I was, you know, just thinking on this quote a little bit and I thought, you know, if I had if I was able to get all the time back that I spent just worrying about stuff that didn't need to be worried about. All right. I'd have years, you know? Unfortunately, the world doesn't work that.

Mike Zaino:
90% of what you worry about never happened. So if you can just concentrate all your efforts on the 10% that is going to happen and hit it head on. 90% of the stuff you worry about doesn't happen. So why worry?

Matt McClure:
Yeah, exactly. It's a little bit like Alfred Newman there on Mad magazine. What me worry, you know? Yeah. That's at least, at least 90% of the time that needs to be our attitude because that's like you say, there's so much going on in in life that's not really going on. It's in our. It's in our head.

Mike Zaino:
Be happy.

Matt McClure:
Yeah. Yeah. See, that needs to be our theme song. I love it.

Matt McClure:
Hungry for something to chew on. Here is some meat on the bone.

Mike Zaino:
I always like to give people some. Something they can chew on, right? Something they can take with them that week and. And really try to see how it might improve their own financial situation. And so when we're talking about time, two things came to mind. Number one, the time value of money, and then number two, opportunity cost. And so what is the time value of money? It's the concept that the money that you have in your pocket right now is actually worth more than the same amount of money would be worth in the future, simply because it can be invested to make you more money. So if a saver deposits $100 into a savings account and that pays 5% interest, what's it going to be worth in five years from now, ten years from now, 30 years from now? Right. And so an investor buys a stock for $25 and then sells it in three years from now for $45. What was the rate of return? So another way to look at it. Let's say that you go to the convenience store and you buy a scratch off lottery ticket and you win $100,000. You'd be pretty excited, right?

Matt McClure:
That sounds like a plan to me.

Mike Zaino:
Well, then the cashier gives you an option, says, Hey, I can give you a $100,000 today. Or if you would rather meant I can give you $100 a month for the next 1000 months. Which would you take.

Matt McClure:
Oh, that.

Mike Zaino:
Excluding any any tax ramifications, which do you think is the better.

Matt McClure:
Option. Now, see, that's that's the thing. I got to, I got to thinking about the taxes, see, I mean, I would just be like, give me my $100,000. Right now.

Mike Zaino:
The time value of money tells us that, give me my money. Take that lump sum. That first option is best because you're getting that money right now. It allows you the opportunity to put that money to work and start growing it by earning interest. That and the fact that 1000 months is 83.3 years. And who wants to wait that long? On the flip side, any money that you have that is not invested is going to lose money over time. Just think about what you could buy for $20 when you were a child compared to what that same $20 would buy you today. And this is because inflation and loss of potential earnings erodes the value of your dollars if you keep your money under your mattress for ten years. All right. Yes. You're going to have that same physical paper dollar amount. Right. But it's going to be worth a lot less because of inflation. But then also, you're going to be missing out on the interest that it can earn when it's invested. And that is called opportunity cost in terms of the use of money. That is the benefit given up by using that money in any specific way.

Mike Zaino:
For an example, if I spend $100 instead of saving it in an account that pays at least 5% interest, I'm giving up the interest that I would have earned in the account by spending it instead of saving it. And if I would have saved it or invested it, then I give up the benefit of whatever it was that I spent the money on. So you have to consider which is more important to you. And then in addition to your opportunity cost, there's also inflation gradually eating away at the value and the purchasing power. And this is why longer term investment vehicles tend to have higher interest rates and shorter terms have lower interest rates. And also on the flip side of that, why you would pay a lower interest rate for a 15 year mortgage than you do for a 30 year mortgage. It all has to do with the time value of money and what that money has the potential to earn or save, depending on which way you choose to go.

Matt McClure:
Yeah, well, that's very interesting because I don't think that necessarily a lot of people might frame that that way or think about it that way. And it's a very powerful way, I think, to to think about your money and your spending habits in particular when you're when you're talking about I just like that the illustration about the scratch off ticket really is what sort of made it hit home. For me, it's like, okay, that would be like a dream come true. But between those two options, okay, you know, if you're a lot of times because we do a lot of talking about taxes, that's immediately where my brain went. But I'm like, if you're just going to give me the $100,000 and I, you know, outside of any tax ramifications at all.

Mike Zaino:
Yeah.

Matt McClure:
Give me the 100,000. Yeah. And then I can, as you say, put that money to work through whatever vehicle I want to do it and and be better off in the end. And if that's going to be my my priority. But like you said, it's all about your what your priorities are as well.

Mike Zaino:
You have to ask yourself, I think, a really good way. A good. A question to ask yourself is, is what I'm spending my money on going to matter to me in five years, in ten years, in 15 years. And if the answer is probably not, then you might be better off investing that money.

Matt McClure:
Yeah, I think that's absolutely profound to to say that and to think about that that way because oh, if I like, like I was saying earlier, you know, if I got all the time back that I spent worrying about stuff that I need to be worried about, if I got all the money back from spending it on stuff that didn't need to be spent on research, I would be like the cartoon of Scrooge McDuck when he like jumps into the pile of money and swims around in it like that. I feel like that would be me because there's just so much stuff that I didn't need to spend money on.

Mike Zaino:
All guilty of it. I mean, all of us, myself included. It wasn't until probably, I don't know, a decade ago, maybe 15 years ago, that I really started asking myself this. And the reason is an older gentleman asked me the same question. He said, you know, think about what that money could do for you if if you just got a 5% return and is what you're spending an on going to matter to you in five years, ten years, 15 years? And I thought it was absolutely profound. I was that was like a whoa moment for me. And, you know, most of the time, no, it's not. And so I find myself saving that money. Now, I'm also not saying, hey, save every single penny that you earn, right? People need to enjoy life, but enjoy life to a certain extent. Make sure you're making sure that your future is is taken care of. Because although we're never guaranteed tomorrow, it would stink to run into tomorrow and be broke and not have anything to pay for it when every day is a Saturday, how are you going to pay for what you want to do in retirement? And that's that's the whole point of the show. Mad is just to help educate people raise the the financial awareness level because in America our financial education system is broken. And I think that the more people listen to our show and share our show with other folks that could use financial education even at the most basic and fundamental level. A rising tide lifts all boats 100%.

Matt McClure:
And folks, if you want to share the show with your friends, your family, your acquaintances, anybody else that's out there, go to Money Matters with Mike. Give them that Web address. That's probably the easiest place to to find all of the episodes of the show. You find information about the show, information about Mike Zaino, and also you can get in contact with Mike as well. You can also give him a call. 700 45601573. That's 7045601573. Well, we talked about at the beginning of the show, Mike, that we are going to continue our Smart Retirement Plan series today, and that's just what we're going to do. Yeah, we were talking a little bit last week about smart income, right? And the way that we started off the discussion was, I think what a lot of people think and actually the numbers bear this out. We talked about a study that was done about what people expected from Social Security, and it was according to the NHP Foundation, 62% of people in the baby boomer generation believe that Social Security will provide at least half of their income during retirement. So that was the beginning of our discussion about income in retirement, because a lot of people just think it's going to be primarily Social Security. But really and truly, when you look at the numbers, yeah, it's it's obviously a lifeline for so many people. It helps so much, but it is just not really going to be enough for folks to maintain their standard of living most of the time.

Mike Zaino:
No, I agree with you, Matt, and. I can't say this enough. The last statement that I received said that Social Security was only going to be able to meet 70% of its obligation by 2034. That is 11 years in what form? Three months away? I mean, that is insane to me. And so many people are counting on it. And so I like to count on it as gravy on the mashed potatoes. Let's let's concentrate on the meat and potatoes. That's why we call the meat on the bone segments. And if we get Social Security, hey, great. That's the gravy. Just kind of makes everything taste a little bit better, but something's going to have to change because they can't keep on with the program in the same form that it's currently in. If they expect the largest generation in the history of our country not to deplete it.

Matt McClure:
Yeah. And that's so true because, you know, you look at the you look at the numbers and, you know, the baby boomer generation is huge and is in the process of retiring day in and day out right now. And the number of people paying into the system isn't enough to keep up with that. And so that you're right, something is going to have to change. But I guess my that leads me to sort of my question here is that what can we do as as just normal, everyday people to sort of fight that battle ourselves and plan for our own future? With that in mind, being prepared just in case, that is the thing that is going to eventually happen. And, you know, it's not going to be able to pay out all the benefits in 11, 12 years. What do we do? Like, what do we do as individuals?

Mike Zaino:
Yeah, I mean, there are lots of things we can do. It's never a bad idea to save for retirement. I don't know how many times I've said that, and but too many people think that retirement is about building this one big nest egg number. I remember years ago, I, I can't remember which financial wire house it was, may have been fidelity, I think that had everybody walking around and everybody's walking around with these big numbers over their head and changing and they thought it was about just reaching that number. Well, it's not about one big number. It is about the income. And so you need to have a plan to replace that income to be able to fund each of your monthly expenses. Now, hopefully, you have taking taken some planning and some steps so that you're minimizing your debt load from car payments, from credit card debt, from mortgages. And in a perfect world scenario, you're going into retirement with little to no debt. But once you're in retirement, you have to keep in mind some of that income that's coming in, those sources are taxable, right? If you're in a 401. Ka4 hundred three B, a 457 a thrift savings plan. If you're a federal employee, if you weren't participating on the Roth side of those types of accounts, when you go to take that money out in retirement, you have to pay Uncle Sam. And so whatever that big number is in those pre-tax accounts, that number is not all your money. And that's the aha moment that most people have. When I say, All right, great, you got $1,000,000, great, you got $2 million. Well, let's just cut that by about 40%, because that's about how much Uncle Sam is going to take on the gross amount. And that's if taxes don't go up. And I ask people, do you think taxes are going up or down in the future? Matt I've never had anyone tell me they think they're going down. So it's like, okay, we need to have a plan to combat your monthly expenses and to allow you to live comfortably. Maybe not extravagantly, but comfortably in retirement.

Matt McClure:
Yeah, and the thing that my mind sort of goes back to when you're thinking about a retirement income gap and having more, it's the illustration that you that that you brought up a few weeks back when we were having a similar discussion was talking about do you have more month than money or more money than month? And the goal in retirement and always should be to have more money than month.

Mike Zaino:
Yeah. And so what is a retirement income gap? And that's think about your core expenses. We're talking about your food, your clothing, your shelter, your health care, your taxes, and then other types of discretionary expenses. So do you want to go out to eat when you're retired? Do you want to occasionally take in a movie or a concert or a play? Those are wants, right? The first things that I mentioned were needs. The second things that I mentioned were wants. And so you've got to also look at what your guaranteed income sources are. So if you're lucky enough to have a pension, if you work for a company that offers you a pension, if you didn't have a pension and you're responsible for creating your own pension, whether that was by virtue of contributing to a 401. K or any type of employer sponsored plan plus, then you're also going to have Social Security. Well, if your cost of the wants and needs in your life are more than what you're going to bring home on a guaranteed level, the difference in there is your your retirement income gap. And so, you know, we talked about how Social Security alone is not going to be enough and that the average monthly benefit last week when we talked about this was less than $1,550. That's the average. The maximum monthly that you can get to is a little under $2,400. And if you wait and delay it all the way up until age 70, the most you can get is just under 4200. So I mean, people think, well, I could live off 40 $200. Good for you if you can. That means you've done a great job planning for retirement. But there are a lot of people that I know that once you throw in those those wants in there, like the going out to eat, like the entertainment and stuff, the playing golf and the playing tennis, those things cost money. And so you need to make sure that you have a plan in place to help you fill that retirement income gap.

Matt McClure:
Yeah. And if there's one thing I think that we've learned, of course, over the past, especially the past year plus now, is that part of the planning? You know, because and this is what got me thinking, this that same study that I talked about a minute ago, the HPP study said 76% of retirees say that income stability is a top concern of theirs during retirement. And and I got thinking, okay, well, what is what is stability? Well, that doesn't necessarily mean that it stays the same all the time. That means that there is a plan in place where when inflation goes up like it has over the past year, a year and a half, maybe a little bit more than that now. And it just skyrockets. The unknown thing happens. There's there's preparation for that so that you can adjust and you have stability because you've you've planned not necessarily because everything stays the same.

Mike Zaino:
Right. I mean, and so a few things that you can do to help kind of fill that retirement income gap if you've identified the fact that you're going to have one. Number one, make sure that you're saving money during your high earning years. So most people right before they retire, that's the most money that they've ever made in their entirety of their working lives. And so I've said it before on the show and 100 times before on other shows, if not 1000 times, it is never a bad idea to save for retirement. So maybe it's taking home 100 bucks less a pay period and putting that toward your retirement savings. Maybe it's $500 less a pay period or somewhere in between. But review your monthly expenses. Make sure that you don't have any just ridiculous payments that you don't need to be carrying with you into retirement. You might consider delaying Social Security, especially if you're still working. All right. If you're still working and you don't need to take Social Security, then every year you delay past age 62, you're going to get a roughly 8% compound return. And that definitely adds up.

Mike Zaino:
And I think that once you encounter areas or years of high inflation, like you said, and we have been experiencing over the last year, year and a half or so, you really need to review your investment and your withdrawal strategy. You might not be able to take money out if inflation is eroding at the value of your money. And so a great way to combat that is to consider just consider investing in annuities that establish an income stream, a guaranteed lifetime income stream that you can never outlive. And today's annuities are not the annuities of yesterday. They're not your grandfather's annuities. These have zero fees, zero fee income riders, and you can guarantee a lifetime of income. And even when you pass away, that money doesn't go to the insurance company like it used to. In a lot of cases, it will go to your named beneficiary. So I just think that that having a plan in place to address these types of retirement income gaps that people may potentially be facing, it's just smart, right? We're talking about smart income planning. Smart retirement planning. You got to be smart with your money.

Matt McClure:
Yeah. And that's one thing that just sort of popped into my mind when you were talking about annuities there is that you know, I think a lot of people think that when they're planning for the future, it's sort of an either or situation. They're, you know, either planning for themselves in their retirement or they're planning for what's going to happen after I'm gone. But with an annuity, you know, as part of your strategy, like you were saying, that's something where you can kind of take care of both and in one fell swoop there because you're planning for your own retirement and then that gets passed along to a beneficiary that you name. So then it's also looking after your your family, your loved ones.

Mike Zaino:
Right? It's just it's it's something to be able to leave a legacy. Yeah. Do you do you want to leave people with burden and debt or do you want to leave people with a lump sum of money because you thought and you properly planned out what was going to happen to address the what ifs in life.

Matt McClure:
Yeah. And knowing, I think. And. As someone who, you know, has a dad who recently passed away knowing that they have planned for the future, knowing that they cared enough for you to do that means a whole heck of a lot to loved ones. And so, you know, having that plan in place, I think really super, super important for everybody's peace of mind.

Mike Zaino:
Absolutely. And I'll use me again as a as a personal example, when my wife was going to be my donor and I was going to be the recipient for a major organ transplant. Do you not think we didn't meet with our attorneys and our tax people and make sure that we had every I dotted, every T crossed we knew where accounts were heck, our kids knew where our accounts were. They knew how to get into every single account, passwords, all that stuff. Right. And then we also had our will and our trust and our health care power of attorney and our medical directives. Everything was buttoned up because there was a possibility and no guarantee that we both were coming out of that on the other side. And so it just it's better to be prepared than not, right? Better to have it than not need it then need it and not have it. And that goes with just about anything in life.

Matt McClure:
Yeah, 100%. And that's the thing. I think people sometimes just as human beings in general, we don't like to necessarily think about the unthinkable. Right? We don't we don't like to think it's morbid, it's scary. It's all of these things. But it also shows your family, your loved ones, how much you care for them. It's it's a huge sign of affection that you take the opportunity and the initiative to do it.

Mike Zaino:
Yeah, I think. I think affection. I think respect. Right. You respect them enough to not have to lay that at their feet. Right. And this is something that you can take on yourself and not just just hurl on them unexpectedly. Think of the anxiety that creates. Right. If that's ever happened to you, if you've had a loved one pass away and there wasn't something in place, everything that you had to do. Wouldn't it be great if the people that you're going to leave your estate to and I'm not I don't care if your estate is 1000 or $100 million. Right. If if all the questions were already answered for them, that's a big gift that you give those people, for sure.

Matt McClure:
Yeah, absolutely. And I just did one more quick illustration here because it's just popped in my mind. A coworker of mine a couple of years ago said was like, Oh, I've got to be off work this day and I've got to be off work that day. And I'm like, Well, you got a lot of time off. Is there anything going on? You okay? And it was they they were going to to court to get try and get things in the estate of a loved one who passed away, settled and of course, passed and passed away without a will, without any pre-planning that had been done without, you know, named beneficiaries in in certain things. And so it was just a big mess.

Mike Zaino:
Everything was caught up in probate. Yeah. And not only is it caught up in probate, which takes time, energy, it also takes money. They're going to keep roughly 3% because the courts don't work for free.

Matt McClure:
You mean they don't?

Mike Zaino:
No, they don't. So again, people wake up, man, start taking charge of your financial future and your financial future beyond your financial future.

Matt McClure:
Absolutely. It's all so important. And of course, Mike Zaino can help you with it, folks. It's 740 5601573. That's his direct number. Rings right to him. 7045601573. Money Matters with Mike Dotcom is the website. Well, you know so that's pretty much covers our topics on the smart income portion of the smart retirement plan. So let's now take a look at Smart Review. We actually mentioned this a couple of minutes ago. You did, Mike, about reviewing your investment strategy, reviewing your withdrawal strategy as well. So so talk about as a as a concept smart review and what people should have in mind when reviewing their financial situation.

Mike Zaino:
Absolutely, Matt, there are a lot of people out there who I call ostriches. All right. When any sign of of what's the word that I'm looking for? Any any sign of instability or instability or volatility shows they run and they stick their head in the sand and they hope and pray that it will go away. And that's just not smart. The smart thing to do is to review the performance of your investments on a quarterly basis, on a semi-annual basis, at a minimum, on an annual basis, just to ensure that you're staying on the right track in order to meet your goals. Because just because you have a plan in place does not mean that that plan is final. If you need to adjust, if you need to adapt, improvise. Overcome, as we said in the military, then you're going to need to become more fluid. We all need to retire someday. So that's why we want to help each other retire better. And you know, my commander in chief, when I served in the United States Army, was President Ronald Reagan. And his you know, his quote that he used to say is trust but verify. Trust but verify. So you want to make sure that whatever plan you're currently on, that you're reviewing that plan.

Mike Zaino:
And so any time somebody comes in and meets with me personally, we're going to do a 15 minute discovery call at first. But once we figure out that we're a right fit for each other, we're going to really do a deep dive in a full retirement plan consultation, and that's providing comprehensive consultations at absolutely no cost to our listeners. There's also no obligation whatsoever. You're only going to work with us if it's in your best interest, if it's a good feel for you. But what we're going to do is help you analyze your current financial situation. We will look at everything that you have. We'll try to discover exactly how much that you're paying in fees will help you cut unnecessary costs in any of the IRAs that you have for one case that you have or any other retirement savings account. We'll discuss how much and closely examine any annuities that you may currently have. Right. And we can also help you with Social Security planning. With Medicare planning. Bottom line is that we compare your current situation to what's possible if you choose to work with us. So markets have been volatile this year. Haven't they met?

Matt McClure:
Oh, yes, they have.

Mike Zaino:
Yeah. I mean, we're talking about it's been up, it's touched bear market territory, more than 20% drop. If your advisor is kind of sticking his head in the sand and not reaching out to you to to make sure that there are no changes that need to happen, you need to get a second set of eyes on your plan. And if you want to do that, just call me. 7045601573. Again, 704 5601573 or go to money matters with Mike Dotcom. We want to help you reach your financial freedom.

Matt McClure:
And, you know, a lot of times we you know, we've been talking a lot about health issues and things like that because you've been talking about your own particular situation. But, you know, it's like I compare your financial health to your physical health in a lot of ways, because if you've got something major that's going on and preparing for retirement, it's something major, right? But say if you have a big health issue or health scare, a lot of times you'll want to get a second opinion. So why not do the same thing with your finances, you know? Yes.

Mike Zaino:
Well, I had a really, really good friend of mine. He went to four doctors. He was diagnosed with stage four cancer. And they all wanted to have him go immediately into chemo and radiation. And there was one doctor that he hadn't gone to see, and that was at the Moffitt Center in Tampa, Florida. And that Tampa guy, that doctor had said something, said, absolutely not. We need to start you on this special kind of immunotherapy. And he did that in 102 days later. They did some tests on him. He was absolutely 100% cancer free in remission. And it's like, wow, had he not gone and got a second, third, fourth and then fifth opinion, he would not be. He chances are he would be in a much different situation than he is currently. And again, that's why it's important. Now, am I telling you to get five different financial opinions? No, that's not necessary. But if your advisor again is sticking his head or her head in the sand and isn't reaching out to you to be proactive instead of reactive, I think that's the biggest key right there. Being proactive instead of reactive, then it might be time to get a second set of eyes on your stuff.

Matt McClure:
Yeah, absolutely. You know, you can't predict the future. You don't know necessarily what is coming around the corner. And so you've got to be prepared for whatever lies ahead.

Matt McClure:
It's time for this week's Problem Solver.

Matt McClure:
Ah, yes. The drama and the suspense has now built to our problem solver segments. It's actually my favorite time of the show because I get to present a problem and Mike Zaino gets to solve it. So there we go. My job is easy. You're the one with a hard job here, Mike. It's not hard, but. So here we go. And this is the thing. I am going to present a problem that's not one that I created, but it's one that's actually it's a real problem that someone's having. And so I'm going to sort of lay things out here, Mike, and then I will ask for the solution. So, so here's the problem. And the, the first part of this is, is a problem I'd like to have if.

Mike Zaino:
You and I.

Matt McClure:
Both right. This is a particular client, a lady who is inheriting $2.2 million. So that's the good kind of problem that you want to have.

Mike Zaino:
Not too shabby.

Matt McClure:
Figure out what to do with it. I was going to say my my solution to that problem is, hey, she can send it to me, but I doubt very seriously she will do that. So we're going to go for a real solution to her problem. So she's inheriting 2.2 million. The client and her husband actually generate about $180,000 in annual household income. They have two kids. So that's kind of the basic groundwork that we're working with here. So here is kind of the issue. She, the wife, wants to retire early. She gets part works part time and makes about 30,000 a year. Right. So of that one, 180, 30,000 is her portion that she brings in. So she wants to replace that and retire early. She's very concerned about the market volatility that we were just talking about here a minute ago that might have some some advisors out there burying their head in the sand. They actually have lost almost a quarter of their the value of their investments in the market this year, which is just just wild. And they also want to reduce the fees that they're paying to manage their assets. So they want to get a hold of the fees. They want to have some safe place to put this money and replace that 30,000 a year in income when she retires early. So what's the what's the solution there, you think.

Mike Zaino:
Matt? I think this is actually a fairly easy solution because they came into $2.2 million. Right. And the fact that I guess the husband was making $150,000 at his job, she was making 30,000 at her job. She wants to stay at home with the kids. Like I get that this client and another thing I love about our problem solver segment is that we actually use real clients. We just leave the names out to protect the innocent. And I'm teasing. This client is actually taking in about a third of her assets and she's taking those and putting them into a fixed indexed annuity that will not only protect her principal because it cannot lose value. And that's a contractual guarantee. So that addresses that safety portion with a third of her assets. This fixed indexed annuity also has a free, guaranteed lifetime income rider that will allow her to receive an income payment for life starting in the 13th month. So starting in year two, without any additional charges, the value of that annuity is expected to grow over time because it's tied to a market linked index, which means if you're in I think we had this one in the S&P 500, which is our common stock market. There are multiple other indices to choose from, but as that index grows, then you're going to get a percentage of that growth.

Mike Zaino:
And then when, if and when it goes down. There's nothing. She flatlines. Zero becomes her hero. So they're not going to be paying any unnecessary fees anymore because we've replaced the underperforming bonds in her or her portfolio with this fixed indexed annuity. And they're also saving more than a half of a percentage point. All right. A half of a percent on advisory fees. So these adjustments are going to allow her to not only retire and keep cracking the whip and making her husband work, but she's going to be able to enjoy playing tennis while her spouse continues to bring home the bacon to the tune of 150,000 a year. And so one thing that our clients absolutely need is one check, at least one check that is guaranteed for the rest of their lives. And we take that very seriously. So by being able to protect and grow your money, by investing it into an annuity that has 100% reserve requirement, a lot of people are like, Oh, what does that mean? Well, you know how when you invest money into a bank, they only have a $250,000 guarantee. It's guaranteed through the FDIC, the Federal Deposit Insurance Commission. Oh, yeah.

Matt McClure:
Yeah. They have those those signs on the bank doors and up the tellers that say that.

Mike Zaino:
You see it all the time and people think, wow, that's awesome. 250,000. Well, these annuity companies that have these products, they have a 100% reserve requirement. So if you have $1,000,000, $5 million, whatever your number is, $400,000 in these annuities, they're protected 100% of the time. So this one was actually a pretty easy one because given the fact that they have the money in the market, yes, they've lost. But by taking a third of their assets and moving it over to the fixed indexed annuity that allows them guaranteed growth with downside protection, they're actually able to stay invested in the market to allow that to rebound. And I always tell them, hey, you know what you're doing, right? You're buying shares that are on sale so that when it does come back, you're actually going to rebound that much faster. So, you know, annuities aren't right in most instances for 100% of your portfolio. And I say in most instances, in some instances, they absolutely are right for 100% of your portfolio. But in most instances, especially with those that have deeper pockets, we just want to decide how much of your assets you want to protect. And then that's the amount that we replace with a fixed indexed annuity.

Matt McClure:
Yeah. And you know that obviously this is a client who, as you say, safety of that money and protection of the principle is, is very important. It just made me think of this illustration that I think maybe several weeks ago we shared that, you know, let's say you have $100,000 in the stock market and it loses 50% while you got 50,000. And then you think, okay, then if the market goes back up 50%, you think in your brain, you might be like, Oh, good, I got my 50% back. No, you got 50% of that 50,000. So you don't have your 100,000 back, you got 75,000. And so it's having that protection of zero being your hero. It's just really, really to a client like this in particular, this particular situation I think means a whole heck of a lot.

Mike Zaino:
It does, because, again, if you lose 50%, you've got to gain 100% just to get back to even. And as a as a country, Americans have a very short memory. 2008 wasn't that long ago when the markets dropped up to, what, 50 to 53%? Yeah, we've had. And then we got lulled into la la land, as I like to call it, in the longest bull run in the history of the market. I mean, a monkey could have made money from 2010 to 2020. You don't judge a captain in calm seas. You want to see how they perform and what they do for you when the waters are tumultuous and churning and big waves that are rocking the boat, so to speak, that's the beauty of the fixed indexed annuity. You're going to get a reasonable rate of return with absolutely no downside, no downside to it whatsoever.

Matt McClure:
Well, there you go. And like you say, it's it's not just because people pay attention. I think a lot of the time to, as you mention, the S&P 500 a few minutes ago, and that's one of the indexes that is commonly tied to an annuity. But as you alluded to as well, there are several others. There's there was one that's based on like artificial intelligence and basically like looking at some algorithm that's way out of my ability to compute, but basically sort of a. Making adjustments to the investment or to the to that particular listing that have correlation to what the markets are doing and or trying to outperform what the markets are doing most ideally. And so, you know, you could end up with something that's tied to something that's going to perform better than the markets do when the markets go up. It just depends on which product you choose. And that, of course, goes down to finding the right person to work with and all of that.

Mike Zaino:
Yeah. And I don't look at the, the best ten years that that any of these products that have I like to look at the worst ten years because if you're okay with the worst ten years then if it performs any better than that, you're like, yes, that's awesome. We have products that the worst ten years are 7 to 9%. And that is really, really strong when you consider the alternative in this particular situation where they'd already lost 24% year to date. So strong right there.

Matt McClure:
Strong. Absolutely.

Mike Zaino:
And of course, I got to throw this in there. Past performance is not indicative of future results. Right. So but hey, if you're okay with the worst, it's done in the worst it can do is zero. You're going to be a golden candidate for this type of product to make sure that at least a portion of your retirement nest egg is bulletproof from a safety standpoint.

Matt McClure:
Here's the cost cutter of the week.

Matt McClure:
So this week we've got a bit of a cost cutter for you. You know, we talk about inflation a lot because it's a it's a thing that that happens and is really happening right now. But we like to share with you out there in listener land, folks, some tips on how to survive these these times. And, you know, one thing that I I've kind of always loved, even though I'm not of retirement age, at least not yet, I'm getting I'm getting there in a few years. But I give me a good early bird special. You know, I used to be a night owl, but after having to get up early and I mean long before the crack of dawn for work for several years, I've just gotten so used to going to bed early. I'm like about to pass out at like 9:00. So I love a good early bird special, but so the early bird specials that seniors love are actually one of those things that are going up in price because of inflation. They're getting more expensive. You know, restaurants obviously not in the business of giving food away. They've got to stay in business. They got to make some money here. So, you know, if there's an early bird special to be had for for like say, 12 bucks, and this is according to some information out of The Motley Fool, by the way, it costs the kitchen about $4. Chances are to whip it up so you're paying 12, but only cost them four. And so, I mean, one of the ways that people could really cut their costs is to cut back on dining out, even if it's one of those early bird specials where you think you're getting a great price. It might not necessarily be that way.

Matt McClure:
No, I agree. And I resemble the remark that you made about liking the early bird special. Heck, my wife and I, again, we've been together 31 years and we used to go out to eat. It was date night. I have dated my wife every Friday for 31 years and we're going strong that that has not and will not end any time soon, except we kind of joke about it now that it's no longer date night, it's date after noon. It's 430 on a Friday and she's ready to roll out the door so that we can be at the restaurant as soon as they open up at 5:00. But in retirement, all right. If you're retired, that means theoretically, you have more time on your hands to cook. And if you're not somebody who is great at cooking, well, then involve your spouse. Because when you're both retired, that might be something that you can do together and start experimenting with recipes and getting creative in the kitchen. It could not only save you money, but it could also give you something to do with your time and a bonding exercise for you and your spouse so that you end up spending less on leisure, break out those old family recipes and give them a try.

Matt McClure:
Yeah, absolutely. And it's it's fun. Like, I actually like cooking and I like being in the kitchen and creating things, you know, that's that's sort of what I like to do. It's one of the same reasons I strangely like doing yard work. It's because I like seeing the progress, you know, I like it gives me satisfaction when it's done.

Mike Zaino:
Some accomplishments.

Matt McClure:
Exactly.

Mike Zaino:
And Saturday's is the first real day of football. I know. So some North Carolina fans may or may disagree with me because their team started last week, but my team kicks off on on on Saturday. And so I just had a smoker delivered and I'm going to learn how to smoke meat. I've never been a smoker before. I've been a griller. You know, I've always grilled. The meat. But this Saturday, we're going to fire up the smoker and and find out what the what the yield is at the end of the day. And I'm hoping I'm really hoping and praying that it's something that I'm going to want to continue to do because I'm looking forward to this.

Matt McClure:
Oh, I love that. That sounds that sounds great. Well, and one thing I was going to say, too, is like, you know, the other part of this could be and not to get on like a health kick or anything, but it could be like a health and wellness sort of a thing for you. If you cook for yourself because somebody else is preparing the food, you don't necessarily know what's going into it. You prepare it yourself. You know exactly what you put into it. And if you are somebody just trying to stay healthier or something like that, you can control each and everything that goes into these recipes and into that pot or the pan or the whatever and really have a healthier life as you are, you know, in your retirement years, which is, of course, very it's important any time, but really important then as well.

Mike Zaino:
Yeah, we've we've mentioned that on prior episodes that it's really important to watch what you eat. And I'm actually taking my own advice. I've been very, very diligent about limiting the number of Oreos that I eat and replacing them with the mini carrots or, you know, grabbing a handful of cashews or almonds or something. And it's amazing. I've actually dropped £16 in the last two months or so just by being a little bit more aware of what is going into my body. And I'm not exercising anymore. Right? I'm walking. I'm just doing the things that I would normally do. But it's the watching what goes into your body. Because so many times, man, I just didn't care about what I ate and I throw it down. And for so long, it didn't it didn't affect me. And then I think one of several weeks ago, I thought about the first time I felt my belly jiggle, and that was just a revelatory experience for me. And I was like, Whoa, something's got to change.

Matt McClure:
Yeah, I'm, you know, I'm right there with you. I was just thinking about this. It's like, you know, if you if you go out to eat, it's going to make your your wallet shrink, right? If you go out to eat a lot, if you cook at home, your wallet's going to stay nice and fat. But you could shrink if you cook the right things. So there you go. You could shrink. It's either shrink your wallet or shrink your waistline. It's like, which one would you rather have be the shrinking thing? And I'm I would choose waistline myself.

Mike Zaino:
I would choose waistline, too, Matt. I think that's a good choice, sir.

Matt McClure:
Absolutely. Well, Mike, just about coming to the end of our time here together for another week of money matters with Mike. Folks, I wanted to remind you, money matters with Mike Dotcom is the website money matters with Mike dot com. And of course you can get a lot of great info about the show there, but also about Mike Zino and you can reach out for that free consultation that we've been talking about and sort of in-depth dive into your finances and your particular situation, find out where you want to go and how you can get there. And as you plan for retirement especially. And that website one more time money matters with Mike Dotcom, the phone number which you can use to dial Mike Zaino directly. 7045601573. That's 7045601573. Well, Mike, it has been a lot of fun. Once again, sir, I appreciate it and I look forward to doing it again.

Mike Zaino:
I look forward to doing this every week with you, Matt, people out there and listener land, thank you so much. Without you guys, we don't exist. Listen, I'm going to ask for a small commitment from you if you find any value from this whatsoever, if you would just tell to people, I'm not asking you to tell the world, tell two people that you think could benefit from listening to the show, whether it's live every single weekend or whether it is via podcast. Anywhere you listen, that would mean the world to me and it would probably mean the world to them and make a huge difference in their lives, especially if they're able to take anything that we preach about on these shows and staple it to their financial life in hopes of gaining some degree of financial freedom. People out there, I hope you enjoy the rest of your weekend. Thank you again. And as always, make it a great day.

Matt McClure:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation visit money matters with mike dot com or pick up the phone and call 704560 1573 That's 7045601573 Not affiliated with the United States Government. Mike Zaino does not offer tax, legal or investment advice. Consult with your tax advisor. Our 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. 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?

Matt McClure:
Social Security will get a big cost of living adjustment next year, but there could be some consequences you might not have considered. I'm Matt McClure with the Retirement Radio Network, powered by AmeriLife. A new report by the Senior Citizens League says Social Security beneficiaries could see a cost of living adjustment or COLA as high as 10.1% next year. The reason, inflation running at a 40 year high.

Recording:
This is a very, very unusual and unprecedented pattern of inflation that we're experiencing.

Matt McClure:
Mary Johnson with the non-profit group, told WCTV that surveys show inflation has caused about half of Americans to spend their emergency savings and people are carrying more debt on their credit cards. So the highest jump in Social Security payments since 1981 would be a good thing, right? Well, Johnson says it's better than no increase, but there are some things to be aware of.

Recording:
In fact, you can get penalized if you think your tax liability is going to be 10% more next year than you're paying now. You can be penalized if you don't send in estimated payments or have more money withheld.

Matt McClure:
She told the TV station. The increase would not be enough to cover a jump in Medicare Part B premiums, which are taken directly out of Social Security checks. And she says higher incomes mean some seniors could no longer be eligible for some other government benefits.

Recording:
And then a whole 15% were made in eligible because they were their incomes increased over the income limit for food stamps or rental subsidies or the programs in their area.

Matt McClure:
So what should you do? Johnson says Prepare now. Talk to a financial adviser to help you get ready ahead of time and contact local nonprofits if you need help paying bills. So are you prepared for the unintended consequences of a larger Social Security check? That's a key question to consider as inflation impacts all our lives. With a retirement radio network powered by a AmeriLife, I'm Matt McClure.

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