11.5.22: Audio automatically transcribed by Sonix

11.5.22: 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. Happy Saturday, people. What a great day to be alive in these United States of America. The whole goal of our show is to arm you with information that you can actually use and give you plenty of meat on the bone to chew on each and every single week. And today we are absolutely bringing the heat again. I am super excited on today's show about weathering the economic storm. And once again, I have the distinct honor and privilege of being joined by the one and only Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. Just just weathering the storm here, you know, as we all kind of have to these days. But I'm doing great.

Mike Zaino:
It's been brutal, that's for sure.

Producer:
Yeah, absolutely. So. And so we're going to share a lot of great info, I think, today. Really a lot of good. As we often say here, meaty stuff, you know, meat on the bone for folks to chew on. And especially in our Meat on the Bones segment I know, which you always look forward to and I always look forward to because I learn something each and every week when we do it as well. And we're going to just we're going to talk about a lot of different things in the show with going on with inflation. Talk a little bit about Social Security and maybe some benefits that people didn't know existed there. So there's a lot there's a lot coming up. And folks get get get those listening. Get your what was it that get your get your thinking cap on but get your listening ears on or something like that? I don't know. I'm just I'm trying to come up with a new phrase. I don't know how well it's working, but you know what is working? That would be Mike Zino. And he's going to be giving us a lot of great info today and can give you a free, full financial consultation as well. Money Matters with Mike dot com is the website for you to check out. That's MoneyMatterswithMike.com or you can give him a call. 704 560 1573. That is 704 560 1573. So as we start off the show once again this week, Mike, we've got some important reminders for folks. We are still in AEP. Now, if people aren't familiar with those three letters squished together there. Tell them what AEP is.

Mike Zaino:
So AEP stands for the annual enrollment period for Medicare, which started three weeks ago, back on October the 15th and will continue through December 7th. So if you have any questions on plans, whether you're just new to Medicare or whether you're considering changing plans, let us know how we can help you with your Medicare needs. You can either visit our website at Money Matters with Mike dot com or give me a call directly at 704 560 1573.

Producer:
Yeah, and it's very, very important and very busy time in the Medicare world. Also, we are just a few days away now from a couple of days away from Election Day. It's a big one. I know a lot of people have already cast their ballots through things like early voting and in person and all that. It's an important one. This is it. This is a biggie on November the eighth. So we're wanting you to get out and exercise your right and your your privilege, Your Honor, that it is to be able to go and cast a ballot in this country.

Mike Zaino:
Yeah, that's that's for sure, folks. I mean, a lot of people out there think, okay, you know what? My vote doesn't matter. And I'm going to argue with you that it absolutely does matter. And what I'll challenge you to do, instead of just going out and voting and not knowing anything about the candidates for whom you cast a vote, make sure that you you research them, find out what they stand for and align them. You know, your vote with who you believe will do the best job. So that's my challenge to all America. If you don't like the way things are currently happening in America and in the local area that you live here in the Carolinas, then then your voice has the absolute power to make a change. And that change happens Tuesday, November 8th, next Tuesday. Get out and vote.

Producer:
And it's one of those things where, you know, sometimes it can become too much of a, you know, popularity contest or a you know, I want my team to win treat, you know, politics too much like team sports, you know, that kind of thing. But it really is important and very much. So on the local level as well, you know, the national and statewide elections obviously often get the most coverage and the most, you know, hubbub about them. But local politics is what and that's really the place where your vote really, really matters. Because, you know, we've seen a lot of these local races, whether it be city council or county commission or, you know, some other local office, the mayor, you know, a mayoral election, that kind of thing.

Mike Zaino:
At school board.

Producer:
School board elections, all decided by just a handful of votes in a lot of places. So, yeah, you can really make a difference. Your family, your friends, your loved ones can as well. So that is it. If you haven't cast your ballot already, do it on November 8th.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
So as always, we like to inject a little wisdom, some great financial knowledge here with our Quote of the week. And this time around, it comes from you know, we had a couple of quotes last week. We only have one this week. You know, we had we had our sales sales over. We had our two for one special. But this week we just have the one. But it's a good one from an unexpected source, I think kind of like one of ours from last week. But this week comes from Arthur Godfrey and that's a name that goes way back, you know, I mean, he was he was a showman. He really was a radio TV broadcaster, an entertainer who went by the nickname the old redhead. And so the old redhead once said, quote, I am proud to pay taxes in the United States. The only thing is I could be just as proud for half the money.

Mike Zaino:
Oh, that's a that's kind of comedic, right? No, nobody likes paying taxes, but it is one of those things that isn't necessary. Call it evil, if you will. And on each of the past four shows, we've discussed the first four steps of building a solid financial plan. The first one was setting financial goals. The second one was being able to create and stick to a budget. The third one was was mitigating risk. Last week we talked about building wealth. And so today's Meat on the Bone segment, I'm going to talk about the fifth step to building a solid financial plan, which is understanding how taxes affect your retirement dollars.

Producer:
Hungry for something that you won. Here's some meat on the bone.

Mike Zaino:
And before I go any further, the first thing that I want to make crystal clear is that I am not a CPA. I am not a tax attorney, nor should any of what I'm about to say be considered as giving any form of tax advice. But you are going to have to pay income tax on certain retirement dollars. So, number one, your pension, if you're fortunate enough to receive one and on other withdrawals from any tax deferred investment, whether that's a traditional IRA or a 401 K, a 403. B, a thrift savings plan, or any of those similar type retirement plans, as well as on tax deferred annuities, all in the year that you take the money, those taxes that are due not only reduce the amount that you have to spend, but those withdrawals can also bump you into a higher marginal tax bracket. You want more bad news? Even your Social Security is taxed. The good news is that while up to 85% of your Social Security benefits may be taxed at ordinary income rates. It will never be 100% above your Social Security. And so the tax bracket that you fall into is going to be determined by your filing status and your taxable income, which is your income minus your deductions. So many of our listeners out there have extra room in their current tax bracket before they are stepped up to the next level. And some may anticipate having more income in retirement than you are currently earning for listeners in those situations. All right. Converting either a part or all of your retirement account over to a Roth IRA or some other form of tax advantage plan that may be the best option for you to protect yourself from a higher tax burden in the future.

Mike Zaino:
And a lot of our listeners may be wondering if they really even require a professional's input. Well, I'll challenge you. Do you really know more than your doctor, your lawyer, or your home contractor? Right. When you have something wrong medically, you go to a professional, a doctor. When you have some kind of legal need, you go to a professional, a lawyer. If you wanted to add an addition onto your house, unless you're a contractor yourself, you're probably going to hire a contractor. So you probably don't know more than those folks. Well, just as you seek all of those professionals for their knowledge, their training and their expertise. Nothing replaces a capable financial professional, and yearly visits should be given, especially in periods of market volatility. Your financial professional can identify spending problems, can assist with your bucket list items, and help you shoot for the retirement lifestyle of your dreams. Many also specialize in creating detailed three dimensional views of your current situation. The only caveat here is that some charge frequent fees for frequent unnecessary trades. Or they might try to sell you financial products that you don't need. And it's extremely important to find a financial professional who takes their responsibility seriously, meaning that they'll always put your best interests first. And I happen to know a pretty good one that.

Producer:
Yeah, I know a guy as well, and his name is Mike Zaino. That's he's the host of this show. As a matter of fact, money matters with Mike Money matters with Mike.Com is the website and you can give him a call at 7045601573. And as I always say because it's true that rings right on the phone in his very pocket and or sitting on his desk which is the case at the moment. But there we go. That that is my pitch, which you will hear a couple more times, I'm sure, over the course of the next, oh, I don't know, 45 minutes or so. So, you know, we called you know, the title of the show today is like Weathering the Financial Storm and this sort of next topic that we want to cover here. It really goes into that on a very personal level for for folks, right. Because things don't always go according to plan. Things don't always work out the way that you had hoped. And one of those things, you know, can be a relationship or a marriage not lasting for the rest of your life. And that means it ending in divorce, which presents all kinds of problems and difficulties. Right. But talk about there there are some actual, you know, Social Security benefits that may be available to folks out there that they might not even know about.

Mike Zaino:
So divorce is hard. The process is difficult for many, many reasons. And one of the most talked about is the division of assets separating everything that the couple owned together. And the way that those assets are split up could have a great effect on retirement plans. But a lot of folks don't know that if you're divorced, you still have the opportunity to claim spousal Social Security benefits and claiming that benefit could offer a greater supplementary income for somebody who's divorced during retirement. So Social Security benefits themselves are not divided when a couple divorces, but an ex spouse can claim spousal benefits through the Social Security Administration. And most couples are not comprised of two equal wage earners. One spouse may have opted out or reduced their time in the workforce during their marriage, whether it was taking time off to raise children or to to start a business. And that would result in that spouse having a lower earnings record, meaning lower benefits through Social Security. So the divorce, the divorced spousal benefit works if a few things are in place. Number one, your marriage had to have lasted for at least ten years. Okay. Number two, you as a couple have to have been divorced for at least two years. Number three, the person claiming the benefits is not currently married at the time of application. And number four is also at least age eligible, meaning they're 62 or older. So the Social Security benefit for the claiming spouse is less than the benefit from their ex spouses earnings history because you're only going to be able to get the greater of the two. So if yours is going to be greater, then you're going to take yours. But the last caveat is that the ex spouse has to also be age eligible, but they do not need to be collecting benefits in order for the former spouse to be eligible to receive a spousal benefit. Does that make sense, Matt?

Producer:
Yeah, totally. And so and I can see how this would be, you know, something that could really be beneficial to a lot of folks. If you had one spouse, as you said, that was a higher wage earner, which most of the time there is. And if you are the lower wage earner in that particular situation, you could really benefit from this as long as you meet those particular requirements there. And all those caveats are met. As you said, it could be more money in your pocket in retirement.

Mike Zaino:
It could. And so just to kind of recap, an ex spouse who files for divorced spousal benefits would receive benefits based on either their own work record or their ex spouse's work record. And so you whichever benefit is greater, right? You can't claim both. And the good thing about that is that claiming benefits on your ex spouse won't diminish your ex spouse's benefits when he or she decides to claim it. In fact, your claim on their benefits is totally confidential. Your ex won't even know that you filed a claim. So that's great right there.

Producer:
Yeah. And I can imagine a lot of a lot of people. I'm going to stick it to them, you know, and take their benefit instead of mine. And they get mine. And it's lower now. Not how it works, but that's what that's good though. We get you get to get a higher benefit yourself and then they still get to get theirs. And so that's that's how it works. I like that. I see. This is one of those things I learn. I'm learning something as we speak here because I didn't even know that this was a thing.

Mike Zaino:
It is a thing. Now you're going to need to prove certain criteria, right? You're going to need your ex spouse's Social Security number. You're going to have to have a proof of your marriage. You're going to have to provide a final divorce decree to make that claim. And they may even require some additional information. And by no means is this a comprehensive list of all the rules involving Social Security benefits for divorced spouses. So so if there is anything that we can help you with on that front, we would be absolutely happy to take care of you, especially if you're coming out of a divorce. A divorce can have a profound effect on a person's finances long after they sign those divorce papers. So, you know, a financial professional can help you assess your options and how to fund your retirement.

Producer:
Yeah, Talk about a lot of upheaval in your personal life. You know, there are a lot of emotions that go along with something like that. I kind of look at it like, you know, I mentioned this before back probably a few months ago now on the show. But like when my when my dad passed away was the last thing that we as a family needed to be thinking about was how are we going to pay for the funeral? How is all this going to happen? How is my mom going to be able to make it without my dad's benefits from the VA and from, you know, Social Security and all that? And a lot of those same things are true when, you know, the other person might not be deceased, but they are no longer with you. You got the you got a lot of emotions. You're mourning the loss of that relationship. You're you're mourning the loss of that income. So so, yeah, this is, you know, one of those things that is very difficult to wade through. And so the advice of a financial professional really, really needed during this time. And as I say, I know a guy it's it's Mike Zaino. Money matters with Mike Dotcom once again is the website, folks.

Producer:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Producer:
Well, yeah. Inflation still with us. It is still around. Unfortunately, you know, we had some inflation numbers come out for the month of September not too long ago, and it showed still the number higher than expected, higher than anybody wants to see it, quite frankly, because nobody enjoys paying more for for goods and services. And that's what we are We are suffering through it right now. And in order to combat inflation, the Federal Reserve usually will do the thing that they have been doing this year. They're raising interest rates to combat inflation. The most recent increase not all that long ago it was you'll hear this term a lot, folks, and it sounds very, you know, sort of wonkish to say it this way, but 75 basis points, that was the most recent increase that I think three quarters of a percent write, 0.75% to the base interest rate, that benchmark interest rate that then other rates are kind of based on. So talk more about this, Mike. What's led us to where we are right now with inflation?

Mike Zaino:
Well, Matt, during the pandemic, we had massive I mean, massive amounts of stimulus that included $2 trillion that our government just printed and placed into our economy. And so we had all of these dollars chasing goods and services while at the same time supply chains were all but shut down. Hence, the lead of supply and demand have taken the effect and the goods and services are still not being replenished, and so prices have skyrocketed as a result.

Producer:
Yeah, I mean, and that's really the bottom line. It does go back to, you know, the laws of supply and demand. When you when you look at the economy over these last couple of years, it's been that right the the beginning of the pandemic, there was like no demand. There was everybody was at home. You know, there was there was literally literally zero demand except for shut down.

Mike Zaino:
Yeah.

Producer:
Except for things like, you know, Amazon Prime and and Amazon Prime video, Netflix and things like that. People really got into that. Remember Tiger King back at the beginning of the pandemic? Oh, my gosh. That was that was what we were doing. You know, where we were sitting at home. We were we were binge watching shows and we were working from there. But times, of course, have changed now as as things have picked back up in the economy. So demand is way up, but supply has not been able to at all keep up with the booming demand. So that is the reason we are where we are at its most basic sort of level. And the Fed is doing this is raising interest rates to to try and cool the economy down to, in theory at least, get us to a soft landing. Right. And they mean this is where we want to things to equalize once again and help make sure that people won't borrow as much money, companies won't expand as much with less access to capital because it's more expensive to get it right if interest rates are higher. And we could see the Fed raise interest rates at least another time this calendar year and then in the months ahead, they say that there could be more interest rate hikes coming.

Mike Zaino:
Yeah, it's I mean, and people talk about the coming recession. I'd argue that we're already in a recession. I mean, also the left's attack on oil and gasoline in hopes of reducing carbon emissions is a huge factor. Raising the price of gas affects every single part of our economy. And there are rumors that the Democrats have a goal of $12 per gallon for diesel fuel to discourage the use of that type of fuel. And that's going to dramatically impact how our truckers are able to deliver goods for sale. And then those goods are going to end up having higher prices placed on them. And, you know, we're all in for a clean environment. We all want lower emissions. But there are just simply not enough lithium mines and lithium mining production to produce enough batteries that will be able to replace all of the combustion engine cars and trucks in the world at this point in time.

Producer:
Yeah. You know, if you are a human being, I feel like you want the planet to be clean, right? You know, you want things to be. Yeah. I mean, that's a place where we can all agree. The disagreement, of course, comes in how you get there. And that's, you know, whether you want, you know, the market to sort of dictate how we get there or you want to force it to in that direction is is sort of the thing. And so the question becomes then as we look at inflation in a wider scope, you know, can the US government properly slow down the economy? That's what they've been trying to do through the through regulations, through the Federal Reserve, you know, can that be done?

Mike Zaino:
I don't know. Well, you will. On the same token, will supply chains recover? Will the left's attack on oil and gas reverse through the elections or a mid-term reversal on their mindset occur? Are they going to reopen gas pipelines? Come next Tuesday? Are the Republicans going to retake the House and the Senate in those midterm elections? And will that change current policy? Bottom line? Only time will tell.

Producer:
Yeah, that's right. Only only time will tell. And that, you know, folks, if you get out and vote, you're going to be part of the answer to a lot of those questions there. As we've as you've been saying here in the show. And another question here, Mike, is, you know, will the rate hikes by the Fed actually help with supply chain issues? Probably not. No, As a matter of fact, they're not going to improve improved supply chain capacity now. Here's the thing. I do feel like in an ideal world to combat inflation, that's how we would do it on the supply side, You know, if we all had a magic wand and we could we could just wave it and supply chain issues not be a thing anymore. That's the better way that you want to, you know, settle this, right, That you want you want to have that demand stay up, but then have the supply come up to really kind of meet it so that you can meet that demand and then keep things humming along in the economy. But that's that's not really the tool that the Fed has in its tool belt. Right?

Mike Zaino:
It's not all right. The supply chain is not fixed with so much supply still needing to ramp up in both the United States and China. All right. For an example, computer chips that help the US car maker trucks that they sell to us, consumers are still not back up to the previous levels of production in China. So what we have is a significant labor shortage in the United States. And if the United States government and other international governments like China can improve the supply chain issues, then we could fight this inflationary and market downturn in the economy with two hammers instead of one supply and helping the economy not overheat.

Producer:
Yeah, and then of course, on a very, you know, individual level, what's the impact on consumers? Well, you know, we're seeing this already. Of course, we just had a few days ago the average long term interest rate on a mortgage was over 7% for the first time in a couple of decades. And yeah, so it was it used to be dirt cheap to get a not not to buy a house because home prices have been so high. But to get the the interest was dirt cheap on your loan. Now it's upwards of 7%. So that's one of the ways that we've really been seeing it impact consumers people who are saving, you know, might need to shop around, seek different ways to invest. Mortgage rates, of course, as I just mentioned, are going up, continued wild swings in the market. Because one thing that I learned during my time covering Wall Street full time, I actually did work on the floor of the New York Stock Exchange for a while. Covering the daily ups and downs of the market is so much of what goes on on Wall Street depends on the expectations of analysts, like what analysts expect and what they speculate is going to happen and what they can, you know, put in their calculator or in their algorithm and all that fancy stuff.

Producer:
And they can say, okay, we think this is going to happen. Whether it meets that or whether it exceeds that or goes not quite there, if it does not meet, those falls below expectations, That has so much to do with what the markets do each and every day. And, you know, it's it's kind of a wild way that the economy happens. But keep in mind, too, a couple of things here. The stock market is not the economy. The stock market is a thing, but it's not the economy overall. Right. So you can use it kind of as a bit of a barometer. But don't don't let it freak you out because there will be wild swings. And and, you know, the other thing is that, you know, it's it's going to be a difficult time here probably for a while as the Fed keeps raising interest rates. But don't let that scare you out of your financial plan. I think if you have a solid one, you can stick with that, right?

Mike Zaino:
Yeah. And I do believe that it's going to get worse before it gets better. I'm looking at it probably into the second quarter of next year before things really kind of turn around. So the question then becomes, what can you do as a saver, as an investor, as a pre retiree or somebody who's already retired? The number one thing you should do is talk with a licensed financial professional to properly allocate your dollars so that you are protected and even have the ability to grow your money during this difficult time. The last thing that you want to do is go to straight cash in your investment accounts because that could result in what we call a melting ice cube situation where your money won't only not keep up with inflation and you lose that buying power. And now is not the time to put your hard earned money and your hard saved money under the mattress. So we in our industry, we can help you reduce that volatility of your portfolio and we can talk about different allocation strategies and ways to rebalance your portfolio so that, you know, we actually have a strategy. We're not just just trying to hang in there as as part of the strategy. Right. Because hang in. There is not a.

Producer:
Strategy right at all. Reminds me of that old what was the poster with the kitten hanging on to the end of the rope or something? You know, it's like, hang in there. But yeah, that's not that's absolutely not a good financial strategy at all. You know, probably 30 years ago, it was a cute poster to have on your wall, but that's about it. When it comes to your your finances. But yeah, I mean, you know, we're going to continue to see these interest rates increase and a lower supply of capital in the marketplace. You talk about supply and demand. The supply of capital in the marketplace is one way that they can really affect the supply side of anything there. And that's what what they're doing. What are some things here, though, Mike, that people who are saving or investing or, you know, putting putting aside funds for their retirement, what are some things that they can do to combat inflation? You know, we've talked about how how the Fed is trying to combat combat inflation with the tools that they have. What can people on a very, you know, again, personal and individual level do to help them selves.

Mike Zaino:
Yeah, I think the number one thing to do would be to try to pay down debt. Right? Number two, you want to reallocate your investments not just for a market bounce back recovery, but but also for income and then smart risk growth. You could get more tax efficient so that you're able to avoid potential future tax rate hikes by moving some of your money over into Roth IRAs. You can make Roth IRA contributions and investments into cash value. Life insurance plans. I mean, if you're looking to pay down debt, the one way in method that I would recommend is a snowball method where you're tackling the highest interest rate cards first and then pay down the next highest interest rate after the first card is paid off. And so on and so on. You can take advantage of 0% interest rates that a lot of credit card companies offer and pay the ones with the higher interest rates down much faster by transferring those balances because you're not having interest for the set amount of time, whether it's 12 months or 18 months. A lot of credit card companies offer that 0% interest. You'll have to pay probably a 3% transfer fee, but that's far and away above having to pay the interest for all those months on your balance. So get a plan. Now, reallocate with a licensed financial professional who is going to place your needs above his or her own. That's that's what I can tell you to do right now, because, again, you talked about being a lower supply of capital in the marketplace. And that's just simply because the Fed is going to buy back fewer of those US Treasury bonds. And many folks don't realize that one of the largest purchasers of US government debt is the US government itself as they finance US government deficits and ongoing debt service. Right? So I mean, where do you turn? You must have a plan and if you're not capable of generating one yourself again, I happen to know a pretty good licensed professional who is.

Producer:
Yeah. If you're if you're kind of doing like that and I want to even say robbing Peter to pay Paul, but robbing Peter to pay Peter, you need to talk to Mike Zaino and do do this. Go to Money Matters with Mike MoneyMatterswithmike.com. That's the website for the show you can reach out to contact us pages there with all the information and you can just fill out a simple form and he'll get back to you once again. It's money matters with Mike. Com MoneyMatterswithmike.com Or give him a call 7045601573. That's 704 560 1573. Now, Mike, we just talked about a lot about inflation. We talked a lot about, you know, what different people might experience due to inflation. People's financial situations are all different though, you know, and so it's not nothing that we ever talk about here on the show is a one size fits all solution. There's no one size fits all problem for people. There are things that have an effect on all of us, but may be more or less depending on our own personal situation. So who is a person who might need to pick up that phone to take action to give you a call or to go to the website and reach out who who might be or what might be some examples of people or situations where they would need to do that.

Mike Zaino:
Well, I mean, that's a great question, Matt. So you out there in listener land, if you're somebody who needs a higher return on your money than what is currently offered by your bank, you should pick up the phone and call me. People who are considering moving an existing IRA and existing 401 K 403 B Thrift Savings Plan, Lump Sum Pension Plan or Roth IRA. If you have one of those and you're considering moving it, you should definitely pick up the phone and call me. All right. Because we have lots of different options for you. And then people who have received inheritance proceeds, money from the sale of a property or any other lump sum payment, maybe you got some death benefit from a life insurance plan and you want to invest that money. You should definitely pick up the phone and call me because it's not good enough today just to be a good earner and a good saver. You absolutely have to have a plan. For an example, if you have $1,000,000 sitting in an IRA, you could have a tax problem in retirement. Well, guess what? We have different solutions and strategies that will help you solve those issues completely. So pick up the phone, give me a call. I promise we'll get down to something that you have 100% confidence in. And without it, I. I won't tell you to do it. I tell people, in fact, if you have 1% doubt in the plan that I put forward, don't do it because I don't want you waking up at 2:00 in the morning going, Oh my God, what do I do with my life savings? You don't need that headache. And guess what? I sleep very well at night because my goal is just to put you in a better situation than when I found you. So if that sounds like something that you might be interested in. 704 5601573 is my direct line.

Producer:
Yeah, absolutely. And it is his direct line. I will say, you know, it's the best thing in the world to, you know, hear some someone say, Oh, what I want to do is help you, you know, And that's not only the goal of what you do each and every day. It's also the goal of this show every week. We want to help educate the listeners and and help make them help, you know, help make them feel like they understand their financial situation a little bit better. Help them understand the financial world a little bit better. Leave them better than we found them. Right. So that's that's the goal, as I say, not only of what you do every day in your line of work, but here on on the air on the podcast as well. That's a that's what we like to do each and every time here on Money Matters with Mike. So we've talked a lot, Mike, about taxes and about inflation. And of course the two things many times will go hand in hand because, you know, inflation, things cost more. Wages have been going up too. They haven't been keeping up with inflation, of course, but they have been going up as well. So a lot of people might say, oh, my gosh, is my increase in my income, is that going to throw me into a higher tax bracket? Well, there could be some good news coming your way.

Producer:
So let's I'm just going to sort of leave it there. I'm going to play this piece that I have worked on for the show, talking about that very thing and about what the IRS has now done for 2023. That could be a help to you as far as that goes. It's an inflation adjustment of sorts and we'll talk about it coming up on the other side. Could a recent IRS change actually save you money on next year's taxes? I'm Matt McClure with a Retirement Dot Radio Network powered by Amerilife. When you think of the Internal Revenue Service, your mind may very well recall the sting of forking over your money to Uncle Sam or the hassle of preparing your taxes. A recent study by the American Action Forum estimated Americans spent more than $190 billion. That's billion with a B on tax preparation in 2021. Plus, many economists predict the federal government will have to raise taxes in the future to pay off the national debt. But there's one change the tax man is making for 2023 that could actually mean you'll owe less in taxes next year.

Andrew Pelosi:
How much you save will be relative to your personal situation. So it's not going to be the same for every household, but certainly.It could have a nice.Little savings come tax time.

Producer:
Andrew Pelosi, with Pelosi Accounting and Consulting, recently told Atlanta News. First, the IRS typically makes annual adjustments to income tax brackets, but this year they're bigger than usual due to, you guessed it, inflation.

Andrew Pelosi:
Some people will see a savings of perhaps $1,000 per during tax time on their tax return. Others might see a little bit more. Certainly the brackets have changed, so the those who are in higher brackets will probably see more savings than those who are in lower brackets. But across the board, everyone is going to see some kind of savings.

Producer:
In short, all tax brackets are going up by about 7% for 2023. That means you can make more money and be in a lower tax bracket than you would be this year. The standard deduction is also going up to the tune of a $900 increase for single filers and 1800 bucks for married couples filing jointly. I mean, look, it's.

Andrew Pelosi:
Beneficial for everyone, right? At the end of the day, we're all looking to save money and keep more money in our pockets. In a time like this where groceries are more expensive, fuel prices are at record prices. Every little bit helps.

Producer:
Keep in mind, though, that these adjustments are for money you earn next year in 2023, so you won't actually see the results until you file your taxes in early 2024. So could you benefit from the IRS's new tax brackets? That's a key question to consider as you plan your financial future with the Retirement Dot Radio Network powered by a married Amerilife. I'm Matt McClure.

Producer:
So overall, Mike, about a 7% increase there in the different income thresholds for the different tax brackets. Of course, as as we mentioned, those percentages are staying the same, the 10%, 12%, 22 to 24 and so on and so forth are all saying the same. But the good news there is you could make a little bit more money and not find yourself in a higher tax bracket.

Mike Zaino:
Yeah, and I think if you refer back to last week's show, so if you missed that show, definitely go back and listen to it because we talked it about this topic a lot last week, but you can actually capitalize on that, especially if you have money that are in traditional IRAs tax. Deferred retirement type plans by converting some of that money over now into a Roth. Go ahead and pay the taxes at a known rate without risking that those rates are increased in future. And in fact, I talked about it earlier. This show just just going up to the threshold to where you're not going to be elevated into the next highest tax bracket. But I think that would just be a smart plan for those of you who have the ability to do so with funds in tax deferred accounts.

Producer:
Yeah, definitely so. Well, that is a look at the IRS tax brackets for 2023 now. And I should mention here that one caveat there, the 2023 tax brackets. So when tax season comes at the beginning of 2023, you're doing your taxes for 2022. So it won't really be until you do your taxes for 2023, which is when. Yep, the beginning of 2024 that you'll feel the impact of that in a very real way. So yeah, but just for awareness sake know that that is coming.

Producer:
It's time for this week's problem solver.

Producer:
And as part of our discussion on inflation and weathering the economic storm on this week's show, Money Matters with Mike we are talking about in our problem solver, how can I minimize the impact of inflation on my retirement? It's affecting us all. People who have a plan in place hopefully have had a plan just in case, you know, inflation rears its ugly head, which it now has. But let's talk about that, Mike. How can folks minimize the impact of inflation on their retirement?

Mike Zaino:
The first thing I would tell folks to do if as long as they still have at least ten years or so before retirement is to stay invested, what is the right amount of risk for you? Is there a certain thing as as smart risk? Well, stocks in general have historically performed well during times of inflation. Not to say they're doing so this year, but even though the markets have touched near bear market territory this year, I mean, they have touched bear market territory this year, it can be seen as an opportunity for a longer term investor. So cutting off your retirement and savings contributions for any period of time is likely to have an extremely negative catastrophic effect decades from now. And so a lot of people have been going to cash. And while those cash piles can provide a psychological comfort for you during those down markets, runaway inflation will quickly, very quickly erode your long term purchasing power. If you're only earning less than 1% interest in a bank account or, God forbid, you actually do stick money under the mattress or in a safe in your in your in your closet. So once you have a solid emergency fund, you should definitely consider maximizing contributions in what we call a smart risk strategy. The next thing that you could do would be to reduce the risk, the market risk, whether it's systematic risk or unsystematic risk that is associated with investing in bonds. Bonds have had their worst year this year in decades. Well, we happen to have a product that is replacing bonds almost as an asset class of its own called a fixed indexed annuity, whereby from a safe money strategy standpoint, you can place your money into this type of product and only participate in market linked gains without any of the downside risk of actually being invested in the market. And so in retirement, you have to think income over assets. You have to have a plan that focuses on generating the income you need to live comfortably during retirement and to be able to enjoy the life that you worked so hard to build for yourselves.

Producer:
Yeah. And you know, you were talking about, you know, those different strategies to help sort of weather this weather this storm. And as you were talking there, I was actually it made me curious to look up because a lot of people are in, you know, bank bank CDs. A lot of people have a bank CD as an investment vehicle. Right. These days. And historically, those have been very, very popular. Well, interest rates on those bank CDs. So the the annual percentage yield, the RPI, as they call it, it's been has been kind of pitiful. And so a lot of folks have been taking maybe what was in a in a bank CD and doing something else with that. Maybe like what we call a MIGA is a good alternative for it and and.

Mike Zaino:
Those multi year guaranteed annuity.

Producer:
Yeah and and so like the bank CD rates you know looking at the average right now at least according to bankrate.com between like two and 3% something like that on an annual basis. But we've seen these meager rates, several, several percentage points higher than that recently. And they've been going up and up and up as the Fed raises the benchmark interest rate.

Mike Zaino:
Yeah, So that's that's the good news that when the Fed raises their benchmark interest rate. All right. Which does try to quell the the inflationary atmosphere that we have in the United States. Well, one of the benefits of that is that these insurance companies are also raising the rates of return on their multi year guaranteed annuity. So whether you have money that's set aside for three years or five years from now, heck, you can you can guarantee over a 5% return for that money. Way better than sticking your money in a bank CD for sure.

Producer:
Yeah, definitely so. So that's that's a way you can you can beat the bank CD rates there as we as we like to say here on the show. So of course, if that is something that sounds like you might. Want to learn more. Folks again money matters with Mike. Com is the website reach out and you can get a free full financial consultation. And now you know we talked a little bit earlier in the show Mike about who might want to reach out to you. So if they decide that that is something that they want to do, talk about the full consultation. What's the sort of initial contact like and then what is the full consultation itself entail?

Mike Zaino:
Yeah, So the initial conversation that we're going to have is going to be maybe a 15 minute introductory call. I'll ask you some generic questions, I'll tell you a little bit about myself, my philosophies and the fact that I am a safe money strategist. I exist to help protect people's money and make sure that they don't run out of it when they're going to need it the most. And that's in retirement. So during our comprehensive consultation, by the way, at no cost for our listeners and no obligation either. In other words, you're only going to work with me if if it makes sense for you and if I can do better for you. But I'll help you analyze your specific situation because everybody is unique and there is no one size fits all. And I'm going to help you discover things like how much you're paying in fees, help you cut unnecessary costs that you may be paying inside of your IRAs, your 401. Case, or any of your other savings retirement accounts if you currently have annuities. Last week we had a phenomenal story about a couple in their eighties that we were able to double their income that they were receiving from an existing annuity.

Mike Zaino:
So if you already have an annuity that's several years old, we absolutely can do better for you in most situations if you're somebody who is divorced. We talked about the spousal benefits for Social Security and you want some guidance through that. We can help you if you're married or if you're single or if you're widowed and you have questions about Social Security. We can help you if you have Medicare questions, because we're in the annual enrollment period right now and you're thinking about joining Medicare or switching plans, it can be extremely confusing. Guess what? We can help you. So bottom line is, is that we're going to compare your current situation, whatever that might be, to what's possible if you come and work with Mike Zaino. And if you haven't heard from your advisor lately, if you have one, please reach out to me, Get a second opinion. I want to help you reach your financial freedom goals. And if you feel today like you have learned anything, anything whatsoever, please give me a call. I would love to help answer any of the questions about your unique situation.

Producer:
And that number folks. 7045601573. That's 7045601573. Or go to the website Money matters with Mike Dotcom. MoneyMattersWithMike.com So I've got to say, you know, the one person who you do want to be a partner in your retirement plan, as I just said, is Mike Zaino and just gave you the contact information there so you can get in touch with him. The another another party that you do not want to be a party to your retirement is the IRS. Yes. And so we're going to give you some advice on how to how to kick them out, right, Mike?

Mike Zaino:
Yeah, we want to we want to absolutely kick the IRS out of your retirement plan. And we've talked a lot about taxes today and understanding how they can affect your retirement dollar. Bottom line. Well, my simple question to our listeners is, do you think taxes are going up or going down in the future? And Matt, I have never not one time have I heard anybody say, Mike, I think that taxes are going down in the future. Most people believe that taxes are going to be higher, infinitely higher. So you may want to consider a strategy that completely eradicates the IRS from being a partner in your retirement. So reducing future tax rate hike risk by implementing Roth conversions that we've already talked about so far on today's show. Because bottom line is smart retirees are going to diversify their money into different tax buckets. And there are three types of investment accounts. Obviously, you have your taxable accounts like brokerage accounts. If you have an investment account with Edward Jones, Raymond James or any of those folks, if you have a bank CD, all of that is taxable, then you have your tax deferred type accounts.

Mike Zaino:
Those are your employer sponsored plans, your 401 KS, 403 B's, thrift savings plans. If you're self employed, you can have a SEP if you have annuities that you've. Old other old IRAs or 401 ks into those are going to also be tax deferred. And then the third bucket would be the tax free bucket, the best kind of bucket in retirement, tax free. Those are your Roth IRAs. Those are life insurance policies. And believe it or not, those are the only tax free investments, the only two that are available in America today. So my question to our audience is, you know, are you somebody that is interested in generating tax free income during what could be a 30 to 40 year plus retirement? If so, we have proven legal strategies to help you do just that. Bottom line is here, the market is down this year. So now is an absolutely opportune time to convert tax deferred IRA funds over into a Roth IRA, because why would you continue rather why would you continue to pay ordinary income taxes decades after you've stopped working? That doesn't make much sense to me, does it? Do you meant.

Producer:
Not a whole heck of a lot? No. You know, you work all those all those years, you get your taxes taken out. You think, okay, well, I've I've paid my fair share. And you know what? Yeah, that that can actually be the case because there are ways to generate tax free income and retirement, as you said. And in the last got about 5 minutes or so here left Mike. But I just wanted to ask, in the last few minutes, we've talked about Roth IRAs and life insurance. You mentioned those two things there and life insurance as a potential source of tax free income in in retirement. Talk about indexed universal life for a second and what that particular type of life policy is, because I think this is I think we've talked about this in a while on the show, but I think people think that I think people think that life insurance is their dad's or granddad's or great granddad's life insurance policy. That was you know, they paid however much a month in the premium. And then when the parent or grandparent or great grandparent died, then it paid out a lump sum in a in a death benefit. And that was it. But there's a lot more to something like indexed universal life.

Mike Zaino:
That's sitting your grandparents life insurance policy. Okay. And unfortunately, a lot of people think of life insurance as a necessary evil, right? It's a bill that they have to pay. But there is a specific type. It's a more advanced type of life insurance that's called the indexed universal life. And if you go back, in fact, I challenge you to go to YouTube, go to Our Money Matters with Mike YouTube channel. Two weeks ago, we actually compared the Roth IRA to what Forbes called the rich person's Roth. And what they were referring to was the IUL or indexed universal life insurance policy. And the reason that they called it that is because it basically eliminates all of the restrictions and the age 59 and one half rule and the market risk that you take and what you can spend your money on. And when you can spend your money, it takes all of those rules and restrictions and throws them out the window and gives you complete autonomy on how much you want to generate from a tax free income standpoint by how much you're willing to put into the plan on the upfront side. And guess what? You're able to become your own bank and you're borrowing from yourself. Meanwhile, the growth is never interrupted. So again, if you did not see the visual, which is on our YouTube channel, that Money atters with Mike dot com, just click the little YouTube link at the top of the page. I challenge you because that's a great, great segment. And when you have a magazine like Forbes calling it the rich person's Roth, and you don't have to be rich to participate in one of these, that's one of the biggest misnomers out there. Then you might want to take heed and take a much, much closer look at the IUL as a potential to generate tax free income in retirement.

Producer:
Yeah, and I would encourage folks to go and take a look at the website and the YouTube page as well and Money matters with Mike dot com, click on the YouTube icon and it'll take you there because then you can, you can see the visual. There's a great chart that you have there that gives you the visual representation, comparing the two things. And so it's yeah, absolutely a great thing for folks to do. Learn more about that because it could be a good option for you. And then of course, what you want to do after you do that. Learn more about it as you want to contact Mike Zaino. Money matters with Mike Dot com once again is the website. Or you can call them at 704 560 1573. That is 704 560 1573. Well, Mike, our our time is just about come and gone here, but I've enjoyed it once again, sir. We got a lot of great stuff in on the show this week and a lot of great information, really covering many, many different topics and scenarios for people that they might find themselves in. So hopefully out there in listener land, we have helped you and given you some some ideas maybe sparked something in your mind that will help you, you know, take that next step in your planning for the future. So I've had a great time. I've learned a lot and I thank you for for teaching me a lot. Mike.

Mike Zaino:
Matt, I always enjoy you co hosting this. I mean, you are the producer extraordinaire. You're the guy that makes me look good on these things, right? I try folks out there in listener land. If you don't have a formal retirement plan, pick up the phone and give me a call. If you don't understand the risk that you're taking with your investments, pick up the phone and give me a call. If you don't understand how you know health care and whether or not you should pay your house off or what an expense ratio is. If you don't understand those things, pick up the phone and give me a call. Let me walk you through each and every one of those situations. I appreciate you out there. Without you, we don't have a show. I hope you have a phenomenal Saturday and rest of the weekend. And as always, make it a great day.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation visit money matters with Mike dot com MoneyMatterswithMike.com Or pick up the phone and call 704 560 1573 That's 704 560 1573.

Producer:
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. It does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness. Timeliness are the results obtained from the use of this information.

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