Understanding Inflation’s Impact on Your Retirement

5.17.24: Audio automatically transcribed by Sonix

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

Speaker1:
Welcome to Nationwide's Peak ten fixed indexed annuity, designed to help provide guaranteed income for life. Peak ten offers protection against market losses, plus protection for a spouse through a joint option and an immediate 10% penalty free withdrawal. Call us now at (704) 560-1573. That's (700) 456-0157 three. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio.

Speaker2:
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.

Speaker1:
Welcome to Money Matters with Mike, with your host, Mike Zeno. Get set for a full hour of financial information and economic news affecting your bottom line. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here's Mike Zeno.

Speaker3:
What's up, what's up, what's up? It's Mike Zeno coming to you from Fort Mill, South Carolina. Happy Saturday people. What a great time to be alive in these United States of America. Money matters with Mike is a show designed to arm you with information and give you plenty of meat on the bone to chew on each and every week. And today we are absolutely bringing the heat again. On today's show we're going to talk about understanding inflation's impact on your retirement and how you can safeguard your savings for a secure financial future. As always, I have the distinct honor and privilege of being joined by the one the only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how you doing today, sir? I am.

Speaker2:
Doing great. Mike. I hope you have had a great and very successful week and and been busy in a good way.

Speaker3:
Busy in a good way. Is uh, is is an understatement. I am looking at a list of, uh, 15 people so far, uh, this week that, uh, we have added to the fold as clients and various stages of the pipeline. And so, you know, figuring out the pieces of the puzzle for each of them has been, uh, challenging but fun. And this is what I absolutely love doing is helping all of our listeners.

Speaker2:
Yeah, that that is 100% what, uh, Mike Zeno is all about. Uh, folks, I can attest to that. Absolutely. So and of course, you out there listening are the reason, as Mike just said, that we are here. So thank you so much for listening and being a part of the show, whether it's listening, whether it's reaching out at Money Matters with mike.com requesting a free consultation from Mike Zeno or you can also call him 70456015737045601573. You can subscribe wherever you listen to podcasts. You can find us on the YouTube. You can find us on the Facebook. You can find us all over the internets, uh, wherever you want to listen and find us, you absolutely can, because that you're the reason that we're here. So, hey, that's, um, you know, that's good enough for us. If you want to find us, find us because you're able. Yeah.

Speaker3:
No doubt. Please do not hesitate to contact me with any questions. Um, bottom line is I want to help you. And I love to meet with folks and discuss how I can help you reach those financial goals, whether that is, uh, with retirement planning, with risk management, with estate planning, and a whole lot more because building sound financial plans for our listeners is absolutely what I do best.

Speaker2:
Absolutely. And once again, the website is Money Matters with mike.com or the phone number 704 5601573. Well, a lot to get to on today's show. And we've got a lot of talk about inflation. Uh, Americans expecting that to stick around. We'll have a little bit later on in the show some results from a New York Fed survey showing that a lot of people do expect for prices to keep rising more than normal, uh, in the future for the, for the time being. So we'll talk about that. We'll also have an inflation demonstration coming up about how prices going up are making life harder for pre-retirees and retirees today. Also, some questions from our listeners. You have written in, and we are going to have some answers for you from the man himself, Mike Zeno. Uh, and if you, of course, would like to submit your own question, do that. Money matters with Mike comm is the website as well. We'll give you that info again, uh, when we get to that particular segment. Um, some investments to avoid during retirement, some kind of some landmines to avoid there. Uh, if you are. Investing and you are either close to retirement or in your retirement years. And how to inflation proof your retirement. You can do that with multiple income streams and and income streams that you cannot outlive as well. So that is good news. And we'll share it coming up here on the show in just a bit. Right now though, let's get things started off with a little inspiration for our conversation. It's the quote of the week.

Speaker4:
And now wholesome financial wisdom. It's time for the quote of the.

Speaker2:
Week, and this week's quote comes from Henry Hazlitt. He was an American journalist who wrote about business and economics for publications that you may have heard of once, once, or twice, like The Wall Street Journal and The New York Times and Newsweek, or The Nation or the American Mercury. Like all over the place, he wrote about business and finance. And here is what he said once he said this inflation is a form of tax, a tax that we all collectively must pay. And boy, we're feeling the impact of that tax here lately, aren't we, Mike?

Speaker3:
We are absolutely feeling the impact. And we have since Covid. I mean, we've called it the silent tax. But I don't know that it's really that silent, you know, when when groceries have risen 343% just since, uh, Covid started in 2020. Um, I read earlier today that the average family needs an extra $11,000 a year just to pay for the increase in their grocery bill. I mean, that's huge, but pre-retirees and retirees both need to factor inflation into their retirement planning process because it can absolutely erode the purchasing power of their savings as well as their income over time.

Speaker1:
Hungry for something to chew on? Here's some meat on the bone.

Speaker3:
Here is why inflation matters. I would assume that most of you want to maintain your standard of living into retirement. The sad reality is, is that inflation causes the cost of goods and services to increase over time. And if your income remains static while the prices of goods and services rise, you might find it increasingly challenging to be able to afford that same standard of living. And so therefore, factoring in inflation helps ensure that you can sustain your lifestyle throughout retirement. That's one way. Another way is the risk of longevity. Now people are like what? The risk of longevity? I want to live as long as I possibly can, as long as my mind and my body and my money will last. Well, the fact of the matter is, is that retirees are living longer than ever before, which means that their retirement savings needs to last longer than ever before. And over the course of a 30 to 40 year plus retirement, inflation can absolutely diminish the value of your savings if they're not growing at a rate that outpaces inflation. So that's another way, um, yet another way. And we've talked about this a lot on our show. Is health care right. Health care expenses tend to rise faster than general inflation does. And so retirees are often facing increasing medical costs as your body starts to break down, which makes it essential to account for health care inflation in your retirement planning process.

Speaker3:
And failing to do so can leave you vulnerable to unexpected health care expenses. Well, then we have this thing called Social Security benefits, right? And while Social Security provides a valuable source of retirement income, the Colas or cost of living adjustments may not fully keep pace with inflation. And as a result, retirees that rely on Social Security alone may see a reduction again in purchasing power over time if they don't account for inflation in their planning, and then those smart folks who are not just saving, but investing for the future inflation can absolutely have an impact on investment returns as well. And so if you're relying on that investment income, you might find that your returns are also diminished by inflation, particularly if you've invested in assets that have low returns or fail to adjust their investment strategy to account for that silent tax known as inflation. So overall, failing to consider inflation in retirement planning can lead to a gradual erosion of your purchasing power and making it essential for both pre-retirees as well as retirees to factor in inflation into your financial plan.

Speaker2:
Yeah, and this is why I think we talk about having a comprehensive plan where you are going to be set no matter what. Like like a few years ago, um, inflation had been just super low for a super long time. I mean, since, you know, we came out of the 2008 financial crisis, inflation had been down, you know, at or below the Fed's 2% target, which is what they want to see on an annual basis. It had been at or below that level for the entire time leading up to Covid, pretty much. So you know, it's we were we. You were spoiled in a lot of ways, and so a lot of people might not have even been thinking about inflation when they were planning for their future. But now, wake up call, folks. You got to have a plan that's comprehensive.

Speaker3:
You do. And by implementing strategies to mitigate inflation's impact, people can better ensure a much more financially secure retirement.

Speaker2:
Yeah, absolutely. And if you want to get started on along that road folks, money matters with Mike comm is the website that's Money Matters with mike.com. Or you can call him at 70456015737045601573.

Speaker1:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Speaker2:
So let's let's put our nose to the grindstone here, Mike. As our talk to inflation about inflation rather continues, as you know, there are a lot of challenges out there that people are going to face because of inflation. And as we've been highlighting already, one of the big challenges that we want to highlight for the audience is the impact of inflation on your retirement plan. Walk us through some of the details about exactly which parts of your retirement can really, really be affected by inflation. And then we'll kind of go into some potential solutions to to protect folks.

Speaker3:
Yeah. No doubt. I mean, obviously, as we just talked about, inflation poses significant challenges for both pre-retirees and retirees. Why? Because it affects your overall financial security in retirement. But by understanding the impact that it has and taking proactive steps, you can help build a much more secure financial future. And so, you know, when I talk about the concerns, there was a survey by Schroders that found that almost 70%, almost 70% of US retirees are worried about outliving their assets, not because of age, but because of inflation eroding their purchasing power. Rising prices are definitely taking a toll on those retired Americans, with almost nine out of ten, 89% of respondents were concerned about inflation reducing the value of their portfolio, okay, their assets. And so there are definitely some strategies that you can implement to help protect your financial future.

Speaker2:
Yeah, definitely. So I mean, with concerns that big, you know, nine out of ten people just about saying that they're worried about inflation reducing the value of their assets. Any time you get anybody in that big of a number to agree on anything, it's a big deal, especially in this day and age. So let's go through some of those strategies. Mike, what would you say to folks, um, who are are sitting there and they fall into that, uh, vast majority of the American public?

Speaker3:
Yeah. If you're counting on one income source in retirement, you are in trouble. Okay. You're in trouble. So diversify your income sources. Relying on Social Security alone will not likely be sufficient. So you might want to explore additional income streams like personal pensions from annuities, maybe doing some part time work, uh, and safe withdrawal strategies from retirement investment accounts. Uh, that's one way. Okay. Another way would be to actually delay taking your Social Security benefits. Delaying the start of your payments can increase your monthly benefits, which will ultimately provide a higher income stream to help combat that inflation. And then, you know, we talk about shopping. Everybody loves to shop. Well, you might want to shop the market for the right type of annuity. Um, that will complement what you're trying to accomplish okay. Annuities offer a guaranteed income stream. They offer protection against inflation as well as protection from market volatility. And folks need to research the different types, as well as all the different payout options that will help determine the best fit for your needs. You know, there's over 100 types of annuities, some I love and some I wouldn't even put my my worst enemy in.

Speaker3:
So if if you want some help on that, I'm more than happy to help. And then that leads me into the last part, which would be, you know, make sure you're consulting with a financial professional who specializes in retirement planning. There are different types of financial professionals. Some specialize in the growth in the accumulation phase. While I specialize in the preservation and distribution phase, I give my clients peace of mind knowing that they're never going to run out of money. And ultimately, we can help assess your financial situation and create a personalized retirement plan, as well as provide guidance on inflation protection strategies. So, you know, if you're serious and you're you're thinking about really getting serious, this is an election year, okay? And there's already so much uncertainty in the world that affects both retirees as well as those planning to retire in the next five or so years. Please don't wait until you're ready to retire to start your planning process. Give us a call today and let's get a head start on the rest of your life.

Speaker2:
Yeah, I mean, you know, the best time to plant a tree was, what, 20 years ago? The best time to start planning for for your retirement is as soon as humanly possible. Uh, 20 years ago would have been great. If you are not that far along, give Mike Zeno a call. Even if you are that far along, give Mike Zeno a call because. Cause chances are you could be doing better than you're doing right now. If not Michael Talia. And he'll be like, oh no, you're doing fine. It's not. It's not a high pressure situation. You have to work with him or else. But if he can help you, he's going to help you. Absolutely. 7045601573704560 1573. You can also go online to Money Matters with mike.com. Now, one of the big reasons that we've been really feeling it in the pocketbook or in the wallet here, Mike lately has been rising gas prices. I mean, gas prices have really gone up quite a bit over the past several weeks and months. Um, a little bit of of a silver lining on that large cloud, though, that we'll get to momentarily. Um, but bring us through a little bit of an update about what gas prices have been doing here.

Speaker3:
Yeah. So the national average right now, just for a gallon of unleaded, we're talking about regular unleaded. The national average is $3.61 right here in the Charlotte area. We're hovering right around 330. Um, and in South Carolina I have seen it as low as 2.99. But you got to really hunt for those. And it's not like every single place has that. But you know, as school begins to let out for the summer and family vacations begin, gas prices are going to become, uh, much more of a concern for those families who are going to consume a lot of it.

Speaker2:
Yeah, absolutely. And, you know, I mean, the places with the highest prices are kind of the usual suspects here. You know, we've got California with the highest price in the nation, 528 a gallon for regular on average. Um, and, you know, you couple that with sitting in traffic, especially like in the, in the LA area, um, which is just notorious I that just sounds kind of like torture to me.

Speaker3:
Yeah, yeah. If you live love Cal. I love visiting California. Ain't no way I'd live out there. Not with those prices.

Speaker2:
Right, right. It's just kind of, you know, to take out a second mortgage to be able to afford a tank of gas. Um, Hawaii is, uh, coming in second place and and fairly significantly behind California, actually. And believe it or not, 480 a gallon still way up there.

Speaker3:
Cents or $0.48. Yeah, yeah.

Speaker2:
It's a little kind of a little crazy there. Uh, Washington and this is Washington state, uh, 464 gallon. Uh, Nevada is at 444 and Oregon at 442. So those are the five most expensive states. Now, the five least expensive states also kind of the ones you might expect. Although I used to see I feel like South Carolina be on this list more often than I do here lately, um, as well as new.

Speaker3:
Jersey and Delaware. And neither of those are in there either. So I was actually shocked at this too.

Speaker2:
Yeah, well, Mississippi is usually on, you know, one of the least, if not the least expensive in the country. And that's the case right now, 307, uh, 307 a gallon. Um, at least as of a little bit earlier this week, Oklahoma. 311. Uh, Arkansas paying 312 Louisiana. 316 Kansas 316 as well, but yes, South Carolina, uh, nowhere on that that list, even though it usually is. Georgia used to be on the list as well, back when we had the, uh, gas tax suspension in the state. But of course, that ended several months back, and we've been not enjoying the higher prices ever since.

Speaker3:
Yeah, you guys, I think we're like 340 when I was there. Oh yeah.

Speaker2:
It's not not fun. I luckily I can I can walk to my office from home. So I've been doing a lot of that here lately. Okay. So let's do something a little bit different here. Something that I am very excited about because you have asked out there, you've asked questions to us as listeners to the show, and now Mike is going to have answers. It's kind of like a listener mailbag segment we're going to do here. And um, I've got what is it, five questions here. We've pulled out of the old mailbag. And number one is this Mike. It's from David in Rock Hill who asks, I'm the guy who never opens his investment account statements because I'm scared to look and because I really don't know what I'm looking at anyway. How do you help a guy like me? What do you say?

Speaker3:
Oh, my. David. David. David, David, I need to shake you a little bit. I need to rattle your cage. I need to get you to wake up. Folks, start looking at your statements. You have to inspect what you expect. What if you're not earning anything? Or worse, what if you're losing stuff because you know you're you're not invested the way you should be for both your time horizon as well as your, um, you know, appetite for risk. I mean, you have to look at your statements. How else are you going to know how to get from point A to point B? So that's I, that's what I got to do for you is, is get you to actually open up the envelope and take a peek.

Speaker2:
Got to take a peek. And then, you know what? If you don't understand what you're looking at, like you said, he's like I. I just don't understand looking at. Anyway, you can ask Mike Zeno a question about it. Ask ask all the questions you want because that's, you know, another part of working with a financial pro is having someone to be able to demystify all of the things that are confusing or, you know, maybe a little bit over your head at this point. Right.

Speaker3:
That's absolutely correct. Yeah. There's nothing that, uh, I haven't seen before. Um, I won't say nothing, but you know that, because that's an absolute. And I tend not to talk in terms of absolutes, but there is very little that I have not yet seen when it comes to the world of finance. So if you have your questions and concerns, you know, I'm happy to help you address those.

Speaker2:
Absolutely. And you can reach out. Once again, money matters with Mic.com is the website. Um, Richard? Nope. Let's go get to Richard next. This is Nancy in in Fort Mill who asks. Um, I'm recently divorced and retired. My ex-husband previously handled our finances well in early 2017 after my divorce, so she's been divorced for a couple of years now, at least. Sounds like more than a couple. Uh, I hired an investment manager to handle my investments. Well, since my personal experience spans just a couple of years. She says I'm new to this. I'm wondering how to evaluate my portfolio's performance compared to averages. So how in the world can she actually make sure, Mike, that she is doing well compared to maybe, you know, some some others, her, her friends and neighbors down the street?

Speaker3:
So, Nancy, first off, uh, congratulations on your retirement. Okay, it is not out of the norm that I see recent retirees or widow or widowers, um, change their financial professional because their spouse used to handle everything. So you're not alone in that. Okay. And it's great that you actually hired a financial professional to handle those investments. But like you said, you are new to this. And so the first thing that I would suggest is that try to get that baseline education on just basic one on one finance like finance 101. Right. Um, that will help you understand some of the terminology. And with regard to, you know, wondering how do we evaluate your portfolio's performance, you know, compared to averages? I would challenge you and say, you know, what average is? I mean, because there's lots of things you can compare it to the overall performance of the S&P 500, the overall performance of the Nasdaq. I mean, there's lots of different index choices. Or are you talking about comparing it to, you know, Joe, uh, or Joe Jones. Right. Trying to keep up with the Joneses, which I would I would urge you to not do. Okay. You never want to look at yourself in comparison to other people, because ultimately your individual portfolio is going to be, you know, designed and developed around your individual situation. So I'm happy to have a second set of eyes on that plan to make sure that you're doing everything in your power possible. And if I see any areas for improvement, I'll make suggestions. And whether you take me up on those, that's ultimately up to you. But like Matt, uh, mentioned earlier, uh, there's definitely no pressure when folks down with me, so I'd be happy to do that for you.

Speaker2:
Yeah, 100%. And of course, again, reach out. Money matters with Mike comm is an easy way to do that. Uh, Richard in Pineville asks. Uh, I've always had fun researching and then buying and selling stocks as a hobby. However, my wife is not so thrilled about me continuing this hobby as we get into retirement, which is just a couple of years away now, any advice on a way for us to find some middle ground here?

Speaker3:
Um, Richard, seek, uh, seek a marriage counselor? No, I'm just teasing, brother. Uh, you know, if if you have a hobby. And as long as that hobby is not, uh, taking too much of your retirement money, ultimately, I think that is what your wife is concerned about. Um, in my experience dealing with most folks I know, I'm making a blanket statement. Obviously, there's always the exception to the rule. Women like certainty. They like security. They like safety, especially leading into retirement. They know like to know that they can count on things each and every single month. And if your hobby is jeopardy, losing the ability for her to count on a certain amount of income, then yeah, you may want to curtail that a little bit. Um, but then as well, you may want to put some money into vehicles that only go up with the market but never go down. And if you want to discuss any of those options, I'm more than happy to discuss those with you as well.

Speaker2:
Yeah. Great. Uh, great note there, uh, for Richard in Pineville. Thanks for sending in that question. Uh, Mary in Charlotte. Now, she says, I've done a pretty good job saving for retirement as I worked as a nurse for more than 30 years. Great. Uh, great on you there, Mary. Um, I'm ready to retire, she says, but I don't have a pension from all of my years of working in the local hospital network. How can I be sure that I have the income I need in retirement? She said. But she's been scared of the stock market a long time since. Since 2008, even. Uh. So how can she make sure that she's going to have the. Income that she needs in retirement.

Speaker3:
Well, I picked up a couple things that you said there, Mary. Number one is that you've been pretty good at saving for retirement. What I would love to know is what vehicles you are using to save for retirement, because there's a huge difference, Mary, between saving and investing. Okay. If you were taking advantage of your hospital network's 401 K or some have 403 B's, then good on you. But even within those employer sponsored plans, you could be, um, way too conservative throughout your career and not actually have your nest egg amount to much. Uh, comparatively speaking, to somebody who allowed compound interest to work over the entirety of their career. So if you are concerned about income, okay, one of the things that we specialize in is actually doing some rollovers into IRAs. Those are individual retirement technically agreements, but a lot of people call them individual retirement accounts. Um, and again, just like I talked to Richard, um, we have ability to have your money participate in vehicles that only go up when the market goes up and never go down, but on top of that will guarantee an additional lifetime stream of income. And because you do not have a pension, you can create a personal pension with the money that you have saved over that 30 plus year career as a nurse.

Speaker2:
Yeah. And that is something that a lot of people might even be surprised about, that you can create your own personal pension. Um, and Mike Zeno can help you do it. Reach out. Money matters with mike.com or call (704) 560-1573. All right. And one final question here in our listener mailbag, John in Matthews says, uh, is there a way for me to accurately estimate my Social Security benefits? He says, I've been working as a driver for a national freight company for 27 years. I'm starting to think about retirement now. I've also heard that Social Security is in trouble, and I may not see all of the money that I've paid in. Is that true?

Speaker3:
Wow, John. So so you have a multiple pronged question that is going to demand a multiple pronged answer. So, you know, the best way for you to accurately estimate what your benefits are is to actually go to the Social Security Administration's website, which is ssa.gov. And on the website you can create a my Social security account. And once you have that account and they verified that you are who you say you are and trust me, they you're going to make it difficult. But don't let that discourage you from doing it, okay? You can actually see what your benefits will be based on your highest 35 years of contributions into the social Security system. So that's how you can tell what your benefit will be. It'll also show you, you know, if you take it at 62, here's what it is. If you take it at 63, 64 all the way up to age 70, it'll show you each and every single year what those delayed retirement credits will add to your monthly payment. Okay. And so with regard to hearing that Social Security is in trouble, I don't think that's news. Okay. We talk about it. If you're a long term listener on this show. Yes, Social Security is in trouble. Why? Well, when it first came out, you were supposed to have been dead already for four years because you couldn't draw Social Security until 62. But, you know, the average life expectancy was 58. Now, all these many years later, you can start drawing at 62. And people are living to be 90 to over 100 years old. We've talked about the centenarian group, uh, being the fastest growing segment of our population.

Speaker3:
So because of all that, and because instead of having three people paying in for every one person taking out, those have significantly flipped in the opposite direction. Yes, Social Security is in trouble. And unless things change, the trustees for the Old Age and Survivors Disability Insurance Trust Fund have said that. Yep, it's going to go bankrupt by the year 2033. Do I think that's going to happen? I don't okay, I don't think that, uh, our government will allow that to happen. They may take it up and push it to the very, very last second and have some fights between the left and the right trying to each trying to get, you know, their way. But ultimately, the failure of Social Security would cause a global financial catastrophe, one like we've never seen before. And I don't just don't think that they are going to allow that to happen. So, you know, with regard to you may not be seeing all of the money that you've paid in, um, nobody sees all the money that they've paid in ever, uh, unless they live to be, you know, 120, which I don't think anybody has done as of yet. So, um, don't worry about that. Just continue trucking on literally. Okay. Uh, like that pun. Uh, and, and and concentrate on what you can control. Okay. Control the controllables. So go on to Social Security, find out how much you're going to make, decide when you think it might fit your need the best, and then ultimately work up until that point.

Speaker2:
Yeah, a great advice there. And of course, it all depends, as you just said on your individual situation, uh, exactly what you know, what's what's right for John in Matthews. And John, thank you for that question. Uh, what's right for him may be a completely different scenario for Susie, who lives, you know, a couple towns away, like that sort of thing. So, you know, it's it all depends on you and your individual situation. And that is why Mike Zeno is here to provide you with a complimentary consultation and retirement plan. And again, Mike, it is all based on the person's specific needs.

Speaker3:
It absolutely is. So we look forward to helping you, John. Or you, you know, Richard or you Mary or you Nancy and even you David. Okay. We can help each and every single one of you and all of our listeners who haven't yet called in or gone to, uh, Money Matters with mike.com to submit your questions. We can help each and every single one of you with a plan that is tailored to fit your unique circumstance.

Speaker2:
And the website. Once again, money matters with mike.com and the phone number 704 5601573. Well now okay Mike. So let's talk a little bit about, you know, some things to avoid kind of some some landmines to avoid for folks in what we like to call the retirement red zone. Right. So that's the years just preceding retirement, about five years before retirement. And those first five years in retirement especially. Here are some things to avoid investment wise. If you are in that particular group, especially number one here on this list. And we'll give you five of them. Number one though, high cost mutual funds and ETFs.

Speaker3:
Yeah. So people need to beware when they invest in mutual funds. Period. Etfs typically have a lower cost, but not always right. Mutual funds are laden with hidden fees, and if you don't know what your expense ratio is, how much you're paying in fees for your investments, um. Buyer beware. All right. These investments do come with much higher fees that can eat into your retirement savings. And believe it or not, they often underperform lower cost alternatives, which ultimately will result in lower returns for you. Yeah.

Speaker2:
And that is not a place you want to be in, especially if you're in that retirement red zone, which is why that leads off the list. Uh, number two here is crypto. Good old cryptocurrency Mike.

Speaker3:
So crypto is is still the wild West. Do I believe ultimately that it will become, you know, digital currency and that everybody is going to use it. Yeah eventually it will. But we are in such a volatile time. It is so unpredictable. What that does is make it extremely risky for retirees. And so crypto lacks intrinsic value and can experience extreme price fluctuations. I mean, we saw that earlier this year when Bitcoin was, you know, 20,000, then jumped all the way up to like 70, 80 grand. And then all of a sudden it came right back down again. So, you know, the uncertain future of cryptocurrency makes it difficult to assess its long term stability, because there are still no real regulatory bodies that surround it. Yeah.

Speaker2:
And I remember I did a story not all that long ago about that with, you know, some hearings that they had been having in, in DC about trying to determine some sort of regulation for the the crypto market and all of that. And it's going to be a while before we before we get there. Um, so right now, as we say, best avoided if you are in that retirement red zone, um, high beta stocks, that's next on the list. And I can just see some of the listeners. Mike, um, through my my magical third eye here, I can see some of the listeners out there kind of tilting their head, being like, what high beta stocks? What in the world are those?

Speaker3:
Heck, is that right? Well, you know, beta measures the volatility of a stock versus the overall market, um, or index that the stock tracks. Okay. So examples of some high beta stocks may be LendingTree or Carvana or any of the multiple cruise lines. Right. They are much more volatile than the overall market, which poses a higher risk for retirees. And when we're looking at a much, uh, shorter or condensed timeline, retirees may not have enough time to recover from significant losses in those stocks, much like the people who retired right before the 2008 financial crisis.

Speaker2:
Yeah. And that was, you know, one of our listeners earlier had mentioned that very thing in the question. It was Mary who had asked about, you know, what she needed to do to make sure that she had some good income for, for retirement. Um, and talked about just being freaked out by the 2008 financial crisis. And, yeah, you know, that an entire generation, essentially, of retirees, um, are still freaked out by that and really, you know, just got, um, that's that's what we call sequence of returns risk, right? You know, when when somebody, um, if you are in retirement, just right as something like that is happening, you do not have the, the wherewithal to make up for all those huge losses. And that's just money you're never going to see again. So yeah. Absolutely. Right.

Speaker3:
And so just think about this folks. If you lose 30% in the market, you actually have to gain 43% just to get back to even. And you know, when's the last time the market returned? 43%. Um, never. Okay. If you lose 40%, that jumps all the way up to 67% and God forbid you lose 50%, you gotta double your money. You gotta get 100% return just to get back to even. So, just exercise prudence, uh, in retirement and don't risk, uh, have, you know, placing your money in, in areas that just have big, huge fluctuations.

Speaker2:
Yeah. Those high volatility stocks and, and those high beta stocks as it were. And if you you know, if the the way to determine which ones those might be to folks you can just do a simple Google search for it. Uh examples of high beta stocks for example. And you'll you'll see a list there. Um, so number four low yield traditional savings accounts. Why would we say you want to avoid those if you are nearing or in retirement? Mike.

Speaker3:
I'm cracking up with low yield, because even the high yield traditional savings accounts are pretty low returning. Right. So traditional bank savings account, they offer very low interest rates, which results in extremely low minimal returns. And so beyond any cash on hand that you might need for emergencies, consider investing extra safe money into products like multi year guaranteed annuities or investing that money in markets, especially if you have a much longer time horizon. Nobody, nobody ever became wealthy by investing or saving in savings accounts. Yeah.

Speaker2:
I mean, and even with interest rates rising here over the past couple of years, you know, we've seen those rates in the the savings accounts go up, but it's not enough to keep up with inflation. It's not enough to give you a reasonable rate of return. You want to look at some of the alternatives which, you know, for like you mentioned multi year guaranteed annuities for example. Those have also seen rates go up and pretty significantly. And so that is as you say a good alternative.

Speaker3:
Yeah I mean if you have intermediate money that you don't need for 357 years uh migas or multi year guaranteed annuities are going to blow CDs out of the water and still offer you some liquidity if liquidity happens to be a concern for you. And if that's you, if you have some intermediate money, some money that you're going to need and, you know, maybe 5 to 7 years. Um, but you don't need it now, give me a call and I'll, I'll happily show you the different options that we have that will absolutely outpace any CDs that are on the market.

Speaker2:
And that number is 704 5601573704560 1573, and the last one on the list to avoid if you're in that retirement red zone here Mike. Physical gold and silver.

Speaker3:
You know I see the infomercials, the late night infomercials all the time using fear tactics to get people to purchase gold and silver. And, you know, even lately I've seen copper. Uh, and when it comes to precious metals, I do believe that they have a place in a portfolio, but I don't think that it should ever exceed more than 5% of your overall portfolio. And here's my reasoning why, when you go to buy gold or buy silver, what are you buying it with? Matt?

Speaker2:
Well, you're buying that when you're buying it with money.

Speaker5:
With money.

Speaker3:
Right. With cash. And then and then if you ever need to sell the physical asset, what are they going to give you in return?

Speaker2:
Well, that would be cash.

Speaker3:
That would be money, right? So why not just keep your money and invest it into something? Okay. Because physical gold and silver can be illiquid, all right. Which means it's difficult to convert into cash uh, on a quick basis. Okay. And then on top of that, you have storage. You have security costs associated with physical metals that can eat into your returns. And storing precious metals in your home doesn't really help folks with peace of mind. Right? So, you know, there are places that, uh, that you can invest in gold and silver and you don't actually ever touch a physical piece of gold or silver, which makes no sense to me whatsoever. Right? I would never do that. Um, but that's just me. Again, I do think that there is a place in your portfolio, but I would never have it go more than 5%.

Speaker2:
Yeah. And talking about, you know, storage and security and keeping it in your home and all of that, it just actually reminded me of an old episode. This is I've always been and I've always been an old person. Uh, basically because I grew up, I would watch the old black and white TV shows and, and all of the things, you know, and there was it was, uh, The Lucy Show. So it was the show after I Love Lucy, uh, where Lucy is plays a different character, also named Lucy, but she works at a bank, and Jack Benny is one of the clients that the bank is trying to to, you know, woo and and, uh, get him to keep his money there instead of keeping it at his home. So she goes over to tour the vault at his home and, like, has to go deep down underground and, and, you know, get over the alligator pit and the, you know, dis, uh, disengage the bombs that were going to set to be set to go off all of this protection that he had in there, that just I just got that picture in my mind. If somebody's keeping the physical gold or silver in their home, that they have this big, expensive vault like that, that they're going to keep it in.

Speaker3:
Yeah. No, I mean, not only that, but I mean, what if your house gets broken into, right? And somebody actually steals your physical gold or steals the safe? I mean, I've seen people literally on T.V.. Um, not literally, but on T.V. fictionally, I guess, you know, break into people's houses and steal the safe. So there you go.

Speaker2:
Yeah. People will do just about anything if they are bound and determined to take it from your home, they can do that. So yeah. Want to avoid those five things. Physical gold and silver being the fifth one on that list. Once again, if you are someone who needs some some advice on exactly what to do instead of what not to do and maybe what not to do as well, you can get in touch with Mike Zaino at Money Matters with mike.com, or call him 704 5601573. Well, you know, Mike, we've been spending a lot of our time today talking about inflation. And a new survey is out now talking about how Americans really do expect inflation to stick around. This is from the Federal Reserve Bank of New York. They published a study this week showing that, yeah, a lot of people really do expect us to stick around, not for just a few months, but for the next few years.

Speaker3:
Yeah. I mean, the median expectation is that the inflation rate will be up 3.3% in one year from now, according to the New York Fed's uh, survey of consumer expectations, which is an increase from the 3% recorded the previous month. Okay. And while you may think that point three is not that much in comparison to three, well, guess what, folks? That's 10%. Okay. And that still remains above the Fed's 2% target, which indicates that sticky inflation could be here to stay. And Fed Chair Jerome Powell has repeatedly stressed that policymakers are committed to wrangling inflation back to that 2% target goal before they start to reduce interest rates. So I mean, that's where the stickiness comes from. It's not from you. And I wishing it away, right? It's from the fed and from the rising cost of goods and services. So they have to determine when they can ease a little bit and start cutting rates, which will in turn, you know, just influx all the cash into the economy at that point in time.

Speaker2:
Yeah. Yeah, it's absolutely right. And so this is the thing and this is one of the reasons that we say, as you said earlier in the show, might control the things that you can control, right? That's why it's important that you do have a plan that takes inflation into account. That's why it's important that you control all of the aspects of your life that you can control. Because you know what you and I, at least as individuals on a on a day to day basis, we can't really have an effect on the global economy. We can't have an effect on what the fed decides to do with interest rates. We're kind of at the mercy of all of these larger sort of forces out there. But we can control the things that we can control.

Speaker3:
And one of those is taking charge of your retirement and your financial future and not waiting till tomorrow, uh, what you can accomplish today. So as loyal listeners, we're offering you a chance, an opportunity to schedule a complimentary retirement and financial consultation with our expert team. And that's all you have to do is give us a call (704) 560-1573 or go to Money Matters with Mike comm to schedule that complimentary consultation and what we'll do. Well, we'll get started answering your questions, and we'll create and craft a retirement plan that is based on your specific situation.

Speaker2:
And if people are sitting there, Mike, maybe listening to the show today and they say, well, how do I know if I am someone who needs to reach out, if I need to reach out for, you know, to to have you do an x ray of my 401 K, for example, and analyze my financial situation.

Speaker3:
Yeah. I mean, if you're somebody that is consistently saving for retirement, but you are not happy with the rate of return that you keep receiving, then you may want to speak with a financial professional. If you feel that your money is not working as hard for you as you do for it, uh, and you'd like to learn how to delete, remove, you know, eradicate future fees and taxes from your retirement. Then you may need to speak with a financial professional. And then, you know, I love this one because if if you aren't receiving much help, if any help from your human resources department, okay, um, then you definitely need a financial professional looking at your situation and suggesting ways that you can improve your income potential in retirement with multiple streams of income. So again, 704. 5601573, or just reach out on the web at Money Matters with Mike comm.

Speaker2:
And speaking of multiple income streams, Mike, that's a great, uh, segue here because let's actually dive into that and talk about how people can establish multiple income streams. I know it's something that you are are very passionate about. Um, so let's talk about, of course, the, the one that, that pretty much everybody is going to have, uh, you know, especially based on what happens in the future with hopefully getting the system shored up. And all of that is Social Security.

Speaker3:
Right. So Social Security provides a monthly income to all eligible retirees in the United States and US territories. Those benefits are based on your highest 35 years of earnings history and the age at which you start taking and receiving those benefits. So delaying Social Security, um, can absolutely increase your monthly payments and according to the Social Security Administration, the Social Security benefits, they make up about 33% of the income for the elderly population in the United States of America, 33%. That is huge, Matt. That is.

Speaker2:
Absolutely huge. And that's why earlier you said, you know, they're not going to just let it fail, because that would be such an economic disaster for the country and the world. Really. Yeah.

Speaker3:
No. No doubt. And and it's 33% if you're a single, you know, uh, recipient. But if you're in a married situation or a spousal situation, right. You got two folks claiming Social Security. When one of those spouses passes away, so too does one of those Social Security payments. And that could be up to half of your Social Security or half rather of your income in retirement just disappearing with, uh, you know, when you're going to need it the most.

Speaker2:
Yeah, that's absolutely right. And, you know, you want to make sure that you have a plan to make sure that that doesn't have as big of an impact as it would otherwise. Um, the other stream of income that we'll talk about here, as we are looking at multiple streams of income in retirement, is a pension. And of course, those have largely gone the way of the dinosaur, but not completely.

Speaker3:
Yeah, they are definitely becoming less common. Right. And many employers are shifting from that defined benefit plan. That's a pension to a defined contribution plan like a 401 K or a 403 B, or if you're a federal employee, the Thrift Savings Plan. And so if you have a pension, understanding the terms and understanding the different options that you have for receiving the payments is crucial to your overall, uh, retirement success. And according to the Bureau of Labor Statistics, only 16% of private industry workers had access to a traditional pension plan. And that's only right before Covid, because that's the last that we had the statistics through for, for those types of, of, uh, traditional pension plans. So, you know, if you're one of the 84% of folks that don't, um, you might need to put in a plan of your own.

Speaker2:
Yeah, that's absolutely right. And that's where annuities come in. And we refer to those as personal pensions. Uh, quite a bit. And that really is what it, what it is. I mean, you know, you defined pensions in general a minute ago as an employer sponsored retirement tool. Well, this is you know, you're sponsoring your own retirement tool here.

Speaker3:
And some of you may be doing the hard eye roll right now because you've heard that annuities are bad. Um, and when I hear that annuities are bad, it kind of just makes me chuckle because, you know, that's like me hearing food is bad or vehicles are bad. Well, I know I need to eat, and I know that I need to get from point A to point B, I don't want to do so in a Yugo. Right. And I'm not a big fan of of mushrooms. Um, but I like to eat and I like to drive. So there are annuities now that unlike the annuities of old where you paid an insurance company, uh, a sum of money and then they charged you to pay you your money back, and then when you died, they kept the money. Well, those there are still a few of those, uh, around. So you have to be very, very careful and make sure that you're talking with somebody who is extremely well versed in the different types of annuities that are out there, but there are annuities that now can offer you income. They can offer you reasonable growth as well as protection and a guaranteed income stream for the rest of your life. And so annuities are basically contracts with life insurance companies, all right. And offer various payout options. And they can provide a steady income stream. But it is obviously very critical to carefully consider all of the ins and outs of the annuity that you. Are looking at or considering. And according to the entire The Insured Retirement Institute, the Erie retirees invested almost $242 billion in annuities back in 2020 alone, and that figure has grown since then.

Speaker2:
Yeah, absolutely. I mean, it's like peak time for annuities, really, when it comes down to it. And there's a reason so many people are looking at that as a, as a retirement vehicle for them.

Speaker3:
I wanted to say too, that, you know, a lot of the folks who talk trash about annuities, um, they don't offer them. Right. And so, of course, if they don't have that in their arsenal, they're going to, you know, try to convince you to not do them. But education is key. And just because somebody says it's not a good idea does not mean it's not a good idea for you and your individual situation. They are not right for every person as a blanket statement. Okay, I will tell you that, but they are absolutely critical for a lot of folks financial success in retirement. Yeah.

Speaker2:
And that's, um, you know, a lot of the people who badmouth and say all of those things make blanket statements in talking in absolute terms, saying that all annuities are bad and that kind of thing. And that is absolutely not what we do around here. It's all about what is best for each listener and each of your clients as well. Mike. Well, um, okay, a couple more things to cover here in our last couple of minutes. And that is another income stream here. Earned income from continued employment.

Speaker3:
Yeah. I mean, if you're working a part time job or maybe you start a small business during retirement to supplement your income, I know a lot of retirees who choose to continue working to stay active. It keeps them engaged mentally, socially, physically, as well as boosting their income in part time work can help bridge the gap between when you are working full time and when you want to do absolutely nothing, and be on that. It can help augment your retirement savings, uh, to help combat those expenses.

Speaker2:
Yeah. Absolutely can. And then, of course, we often talk about these in not so fun terms, but, you know, that can be a stream of income from your retirement accounts, uh, required minimum distributions and any other withdrawals that you make from those accounts.

Speaker3:
Yeah. So, I mean, understanding the rules and tax implications of withdrawals is crucial for you to maximize your retirement income. And those RMDs must be taken from traditional retirement accounts. Okay. Starting now at age 73, eventually that'll be phased out to the age of 75. And so, you know, by diversifying your income sources and understanding the options that you have available, you can enhance your income potential in retirement and build a very solid retirement plan.

Speaker2:
Absolutely can. And you can contact Mike Zaino to get started along that route. And, um, you know, if you want to get yourself in on those multiple income streams and give yourself that peace of mind that goes along with it, it's a great thing to do. Money matters with mike.com is the website that's Money Matters with mike.com and you can call him (704) 560-1573. And uh, before we are just out of time, Mike, talk to people. Just mention quickly here what it's like when they do reach out and and you know, we mentioned earlier not a high pressure situation. Right. Um, so tell them what kind of a situation it is.

Speaker3:
No, it's not, you know, so so, you know, with our national debt, uh, increasing by like $10 billion every single week, it's at 34.7 trillion this week. You know, folks need to take control. They need to wake up. And a lot of folks don't know that they can absolutely reduce the risk in their portfolio, as well as establish a personal pension that does create a lifetime income stream. And they can do that with one simple strategy. So the first time we talk, we're just going to have a discovery call, uh, get to know each other a little bit after that. If we say, you know what, we're going to move forward into a full, uh, deep dive into your financial situation. I'm going to ask you to do some to do some homework and bring me some statements so that I can figure out where your priorities lie. And then we'll develop a spending plan that makes sense for you, and we'll make all the tweaks necessary so that you can have peace of mind and confidence that your money will last at least as long as you do in retirement.

Speaker2:
That is absolutely right. And you can give Mike a call to get started at 7045601573704560 1573. You can also reach out via the website Money Matters with mike.com, or you can send them an email at Mike at Money Matters with mike.com. Well, that's going to just about do it here for the time that we have to spend together for this week Mike. But thank you as always sir, for the expertise that you bring to, uh, not only me. I mean, I learn something each and every week we get together. Uh, but our listeners, I'm sure, do exactly that. As well. So thank you for all that you do and we'll do it again next time, sir.

Speaker3:
Man, I appreciate everything you bring to the quality and the production of this, uh, this radio show and national podcast. International podcast, actually, because we're global at this point. But, uh, most importantly, without our listeners, we don't have a show. So, you know, thank you from the bottom of our hearts and whatever you're doing this weekend, I hope you enjoy it to its fullest extent. And as always, make it a great day.

Speaker1:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with Mike comm or pick up the phone and call 704 560 1573. That's 704 5601573 not affiliated with the United States government. Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

Speaker2:
Fixed annuities, including multiyear. Guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including upload many different filetypes, collaboration tools, world-class support, automatic transcription software, and easily transcribe your Zoom meetings. Try Sonix for free today.