MMWM 6-24-22.mp3: Audio automatically transcribed by Sonix
MMWM 6-24-22.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Matt McClure:
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.
Matt McClure:
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.
Mike Zaino:
What's up? What's up? What's up? How's everybody doing today? Happy Saturday. It is a great day to be alive. My name is Mike Zeno, coming to you from Fort Mills, South Carolina. And I just wanted to take some time to tell people a little bit about who I am and what I do. But today, before I even get started, I just wanted to introduce my co-host for today, the one and the only, Mr. Matt McClure.
Matt McClure:
Hi there, Mike. How's it going? It's going yeah, it's. It is a beautiful weekend, you know, it's it's it's been hot, but we're surviving the heat. And, like you say, great day to be alive.
Mike Zaino:
It beats the alternative. We're staring at branches and not roots.
Matt McClure:
That's absolutely that is the that is definitely the way to look at it, for sure. But a lot a lot of great ground to cover this weekend, too, you know, with the kind of the topic of the show, Mike, being what to do with your money right now. And we'll get into a lot of that. But you sort of teased it. You teed it up here a second ago. Remind the folks who you are. Introduce yourself and tell them what you do and really kind of what the what the purpose of money matters with Mike is.
Mike Zaino:
So I am a veteran owned business that doesn't try to sell you anything, which is which is a change I found from a lot of different shows that are out there and platforms that are out there. My goal is to be a difference maker and help you maximize your retirement. As far as what it's like to work with us, I describe it as comfortable. We like to have couch meetings, if you will, like you're sitting down with company and enjoying a beverage with friends. So the best way to reach out to me is to contact me via telephone at 7045601573 or visit this site. Money matters with Mike. This money matters with Mike.
Matt McClure:
Awesome. And when people do reach out, what what is that first conversation like? You know, it's very you're very personable, obviously, and you want to make a connection with people. But how do you go about that sort of first initial contact when somebody reaches out?
Mike Zaino:
So our first initial contact is nothing more than just finding out some information. I always tell people just to breathe. I want to find out a little bit more about you and what your goals and your objectives are and what retirement looks like and means to you. It's kind of like when you go to a doctor and they have you fill out the intake form and they're going to ask you a lot of different questions about your medical history and where you feel you are health wise. At least my doctor does that, and I implore those same tactics when I meet with folks on a one on one situation to where I just want to get to know you and what your goals and objectives are and see if we're fit for each other.
Matt McClure:
Yeah, which is a great way to go about it. And so you of course, giving, you know, giving that advice to folks, learning more about people helps them determine, you know, some things that they can do with their money right now, no matter what the conditions are, economically speaking or their their particular conditions are from an economic standpoint as well. But this is obviously a very unique time that we find ourselves in with inflation and all of that happening right now. And we've just been through the past couple of years with with COVID and everything and the economy trying to recover and then the inflation just really running rampant at the moment. So what are some things that folks can do with their money right now in this, like I say, kind of weird environment to really make the most of their retirement planning for the future?
Mike Zaino:
You know, any time that you are in a period of uncertainty with a lot of volatility, the market has been extremely brutal so far this year. I mean, everything is down for the most part, doesn't matter. And we have people freaking out going are what do I do? So I like to have people take advantage of the only two types of tax free in. Investments, the first one being a Roth IRA. And then the second one being life insurance. Because if people will move some of their money, not right for all of their portfolio, but some of their money into these types of products, it can serve as a hedge during inflationary and volatile times. So the whole idea is to be able to protect and grow your hard earned money. Because I know that you guys work hard for your money. How do I know? I work hard for my money. And I think Donna Summer wrote a song back in, I don't know, 1978. She works hard for her money. So we all work hard for our money. And the last thing we want to do is see it evaporate due to market volatility. So I mentioned two things, the Roth IRAs and then life insurance. So I'm going to I'm going to start off by just talking a little bit about Roth IRAs, because a lot of people hear the word Roth, but they don't understand what it is. And a Roth IRA is just simply a tax advantaged individual retirement account that you can contribute after tax dollars.
Mike Zaino:
And so this is this is money that you've already paid taxes on. The primary benefit of the Roth is that your contributions and all of the earnings that those contributions make can grow tax free and then be withdrawn tax free after the age of 59 and a half, assuming that the account has been open for at least five years, that's the IRS's time table. In order for you to get the protections of the Roth, there are several different benefits because, number one, there are no required minimum distributions. A lot of the audience that's listening to me right now is approaching 72, may even be over age 72. And if you have your money in traditional tax deferred investments like a traditional IRA or still in a 401 K or 403 B or T, traditional TSP, all of that money, whether you need it or not, Uncle Sam is going to come knocking on your door for some taxes in the way they collect. Those taxes out of those investment accounts is by these things that are called required minimum distributions. And so the advantage again, one of the advantages is that a Roth does not have those RMDs. And so I get people that ask me all the time, well, how can I contribute to a Roth IRA? And it's simple. If you have earned income, anybody that has earned income can contribute to a Roth IRA. And what that means is if you have a job, whether it's W-2 job, whether it's 1099 job, but you have a job and it is paying you earned income, you can contribute.
Mike Zaino:
The IRS does place some stipulations as far as how much you can earn before you're you're not allowed to contribute to those. And so if you are single, you can contribute. To a Roth IRA if you earn less than $144,000 in 2022. So if that's you, you can contribute to a Roth IRA. If you're married and you file jointly, then that limit goes all the way up to $214,000 for 2022. Those those limits do change. The IRS tends to increase them over time. But here's another thing. If your employer offers you a Roth 401. K option or Roth 403 B or a Roth TSP option, you might consider taking advantage of that because the contribution limits are much, much higher as far as how much you can place into the 401 K 403 B TSP type accounts as opposed to just a standard IRA. But your Roths can be established any time, but the contributions for that particular tax year have to be made by your particular tax filing deadlines. And so when you talk about Roth IRAs, there are a lot of moving parts associated with setting them up. So if you're interested, you absolutely should speak with an expert. And the good news is, is that you can reach one right here on Money Matters with Mike by going to our website, money matters with Mike dot com or just picking up a phone and giving me a call at 704 5601573 11.
Matt McClure:
Love how that worked out. That was it. This was perfect segue right there, Mike. I was going to say, actually, it's so important to talk to somebody who actually knows what they're talking about. And obviously, you are that person when it comes to to to these things that we're talking about today, especially these two types of tax free investments. Now, you mention a lot of detail there about Roth IRAs, which I think really helps, because sometimes when you do even mention Roth IRAs or, you know, a traditional IRA or a, you know, 401 K, 403 B and all of that, people's eyes can sort of glaze over. But I think it did a great job there of like sort of breaking it down and saying, okay, here are the different types of those retirement accounts and here are the advantages of a Roth type account as well. Now, the other type of insurance or the other type of insurance, the other type of tax free investment is an insurance policy. It will be life insurance. Talk about that because because really the goal there with life insurance is is a bit different than with something like a Roth.
Mike Zaino:
Yeah. So so life insurance has as many different uses, right? And today's life insurance is completely different than life insurance of the past. So if you have a life insurance policy that's older than ten years old, you should probably get a second set of eyes on it because not all policies are created equally when it comes to tax free money in retirement. We happen to love a product called an indexed universal life insurance because the biggest thing it provides you with is flexibility, but it also gives you protection for that peace of mind. So some of the benefits just write off the rip. It'll give you permanent death benefit that is provides protection for your loved ones. It has flexible coverage as well as flexible premiums. It builds cash value that you can borrow against and potentially even set up a guaranteed lifetime income stream. Here's the big one, especially in today's market environments. It provides protection from market losses, and then there are optional riders that can provide protection or potential for guaranteed income for life. Then on top of that, you have living benefits that can provide resources for you in the event that you have a qualifying terminal illness or you get a chronic illness or you have a critical illness or critical injury. And there are multiple index strategies that offer diversified choices when it comes to your cash value.
Mike Zaino:
So. If I boil down this particular type of product, I know a lot of times when people talk about life insurance, they're like, Oh, it's just life insurance. That's not for me. I don't care, but it is for you. Because did you know that six in ten Americans live with at least one chronic disease? I just looked up these statistics right before the show. 40 seconds, every 40 seconds, a stroke occurs in the United States, 38.4% of men and women will develop some type of cancer in their lives. And the number one reason that households file for bankruptcy is due to medical debt. So this type of product can protect and hedge you from all of those potential dangers that people have a strong propensity to experience in life. Given these numbers. I mean, six and ten, that's what 60% every stroke, every 40 seconds. That's that's ridiculous to me. So indexed universal life can be a financial solution in case you live too long, because it's that lifetime protection so that you can make the most of your retirement with that income for life guaranteed if you die too soon, assuming protecting who and what you love is a top priority or in case you get sick or become ill in the middle, it has those living benefits that help you and your budget survive those qualifying illness or injuries.
Matt McClure:
Do you often get. Comments maybe from clients or potential clients who say, I didn't even know that there were all of these options. Like, I mean, because, you know, honestly, before I started, you know, doing some work myself in this sort of space, I my impression of life insurance, for example, was that you have a whole life policy or you have a term life policy. And the term life policy is good for, say, maybe ten years, whatever the term is. And then if you die within that time period, then the death benefit is paid to to your loved ones, whoever the beneficiary is, whoever you name. The beneficiary kind of the same with whole life, although it builds cash value and you have a cash value account, etc., etc. and that was kind of the only thing that popped into my mind. And then you start looking into it, you're like, Oh no, there's actually a lot more to it than that.
Mike Zaino:
There's a lot more to it in that. In the old life insurance. This is why I say this over and over again. Wasn't life insurance. It was death insurance. Yeah. It wasn't for you as as the policyholder. It was for the people that you loved and cared about. You had no benefit from it. Today's life insurance is much, much different. It's life insurance that you don't have to die in order to use. I have a good buddy of mine who unfortunately about 75 days ago was diagnosed with colon cancer at only age 45. He happened to go in for a colonoscopy and they found a mass and it turned out to be colon cancer. And so he had one of these types of policies and now he is able to access the death benefit to offset all of these costs that he's incurring due to his diagnosis. So I'm going to put a plug here. If you're 45, if you're 50, if you're a guy, if you've been afraid to go to the doctor to schedule a colonoscopy, I had one last year. It is nothing. It is no big deal. But it can absolutely save your life. So please go get one.
Matt McClure:
Yeah, I had a friend of mine. Same. Same thing, like, not luckily his his scans and all came back fine, but. But he was sort of hesitant to go in and get this, you know, that particular exam done, a colonoscopy. And, you know, he was thankful in the end that he did. He was like, oh, yeah, it was fine. He said, I don't know what in the world I was so worried about or what I was so scared about before. So do it. Yeah, because it can be absolutely life saving. And you know, again.
Mike Zaino:
In fact, in fact, this this gentleman has told me that since his event occurred, he has been kind of preaching from the from the mountaintops, so to speak, about going to get colonoscopies in several people. You actually think he said five different people have come back to him and have shared with him and thanked him for urging them to go get the colonoscopy because in two cases they remove polyps that were precancerous. In another couple of instances, they they saw some stuff that just didn't look good. So they took it out. I mean, and just by going and having these tests done has the power to save not only your lives, but the lives of the people that you love. So not not going to just preach on the medical front, but it's just smart business. And when you look at the business of you to go take care of yourself and people say, you know, why do I need life insurance? Well, if your funeral is already paid for and nobody will suffer from your demise, the answer is you don't need life insurance. But again, what happens if you get sick and you don't have the financial nest egg to pay for all of that illness if you don't die right away? Right. What happens if you do have a situation that puts you in an assisted living facility for two, three years? What happens? Is that going to wipe out your entire nest egg? Because if you don't have life insurance, I would take a leap and say that you probably don't have long term care insurance either.
Mike Zaino:
Right. So if you have these types of tools in your shed, so to speak, you're not going to risk wiping out everything that you've worked so hard for if you are the breadwinner in a family and all of a sudden you're not winning bread, right? The money is not flowing, how is that going to impact your your life, your family's life, your children's life? Some would say it would and it would a lot. And I heard another statistic that if I forget what the percentage was, but it was a strong percentage, like over 70% of America, if they just missed one paycheck, one paycheck, they would be forced into declaring bankruptcy. And that's pretty scary because I don't know if anybody got. Diagnosed with cancer or had a stroke or had any type of debilitating thing happen to them where they were not able to win that bread. How would your family survive? And so you don't want to be the person whose tombstone reads, Hey, I was too cheap to buy life insurance.
Matt McClure:
Yeah.
Mike Zaino:
At least I wouldn't want to be that. I mean. I mean. And my wife, my wife's a teacher. She's a public servant. She loves what she does. We have life insurance on her. Why? Because we want to make sure that things are taken care of. Button up and pay for. Now we have a lot more on me as the breadwinner. Right. If I were to pass away without life insurance, she'd be up the creek without a paddle. There is no ifs, no ands or buts about that. If she passed away, I would be wrought with grief. But financially I would be okay. But you know what? I still have life insurance on her, mostly to protect her from, again, living too long or getting sick in between.
Matt McClure:
Yeah, and there you go. And that's why it's important to really consider all of your options and learn about all of your options. If you don't know, you're kind of going back to if you don't know they exist. Kind of like I didn't going into all of this, it's really interesting and potentially helpful and potentially really can can save you so much grief can can be lifesaving in a lot of different ways when you are thinking about things from a financial standpoint. Well, Mike, why don't we do this? Let's let's take a quick time out here. Money matters with Mike, of course, is the show. Money Matters with Mike. Com is the website. And if you want to reach out 704 5601573. We're going to take a quick break right here. We're going to hear a little bit about, oh, those those lovely gas prices that we're all paying right now. And maybe a little bit about how you can save a little. We'll do that. We'll come back chat about that a little bit on the other side of the break and get into some discussion more about volatility and how you can sort of reduce your risk during these volatile times. This is money matters with Mike. Stick around. We'll be back with more right after this.
Matt McClure:
This part of today's show, Money Matters with Mike is available wherever you listen to podcasts and online at Money Matters with Mike Dotcom.
Matt McClure:
Just in time for summer travel season, gas prices are at or near record highs across the country. I'm Matt McClure with the Retirement Radio Network Powered by a Life. Now that we're hopefully seeing the light at the end of the pandemic, tunnel travel numbers are expected to get back close to pre-COVID levels. No doubt it feels good to get out of town, but that increase in travel means a big jump in demand for gas.
Mike Zaino:
Gas demand typically starts to increase because as the weather breaks, you have drivers who take to the roads.
Matt McClure:
That's Triple A spokesperson, Devin Gladden. He says the price surge is not holding people back from their travel plans.
Mike Zaino:
Given travel demand has been a lot lower over the past two years due to the pandemic. Travelers are expected to travel more this summer just to make up for lost travel time. So that is going to likely cause prices to increase further as demand increases this summer.
Matt McClure:
And it looks like the high prices will stick around for a while.
Mike Zaino:
Crude prices will still lead the day, and as long as they remain volatile, gas prices will remain elevated. It really will depend on where oil prices land this this fall. And there certainly has been an increase in domestic production. And we'll see how that factors into global crude supply and demand.
Matt McClure:
But what can you do to save money when traveling by car? Well, Devin has these suggestions.
Mike Zaino:
If folks are on the highways for trips, it certainly helps to remain within the speed limit. Slowing down can certainly help to save gas and making sure that your vehicle is in tip top performance as a result of recent maintenance, which can help to make sure that your tires are properly inflated as you go down highways to maintain and increase fuel efficiency.
Matt McClure:
So how can historically high gas prices impact your travel plans and your long term financial goals? That's a key question to consider as you pinch pennies this summer with the Retirement Radio Network powered by Emera Life. I'm Matt McClure. Fixed annuities, including multi year 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. Welcome back. This is Money Matters with Mike. I'm Matt McClure here alongside the man of the hour himself, Mike Zaino. And Mike, we were just hearing there about how gas prices, every time you pull up to the pump, it's just it seems like more and more shock these days.
Mike Zaino:
It is absolute pain. I know it is for me in my wallet. I pulled up to the pump the day before yesterday to fill up my truck and I spent $128 to fill up my truck, $128. The sad thing is, is two days later, I'm already down to a half a tank.
Matt McClure:
Oh, goodness. That's that's crazy. That's just money. Money out the window right there. And it's yeah, it's frustrating. And I, you know, I drive I drive a small car. I live in the city, so I drive I drive a smaller car myself. And even with with my car. And it's only a four cylinder, turbocharged four cylinder, though. I have got to put that out there because because I'm a guy, it's turbocharged. I, I, you know, I'm spending much more than I sort of ever anticipated spending and filling up that car as well. It's just been crazy and hopefully we'll get some relief here. But it was good to hear some tips there from from our guy with AJ about. Yes. Just how to save a little bit.
Mike Zaino:
It's tough to to budget for because I mean it's one thing when gas was a buck 50, then a buck 80, then to 20, then to 30, and we're like, all right, this is kind of getting a little ridiculous. Well, then the next thing you know, it's 280 and then $3, and we're like, whoa, like, you can stop any time you want now. And I don't know about you guys, but I'm paying $5.09 a gallon and it stinks. It stinks. It's very, very tough to to budget for the unexpected rise of of a commodity like that.
Matt McClure:
Right. And it's very true. And especially during times of like high volatility like we're seeing right now, it's almost it's almost impossible for for a layperson to kind of just look and be like, okay, how much of a cushion do I need to have here? Like, it's it can just you just want to sort of tear your hair out and, you know, I mean, any time, though, that you're looking at a time of volatility like, say, we're talking about volatility, particularly in the in the energy sector right now. But there's volatility in the stock market. There's there's volatility everywhere. You're dealing with an increase in risk among your investments, particularly, you know, let's see if you're invested in the stock market. Obviously, there's a lot of volatility. There's an increase in risk there because you could, you know, put a lot of money in and the market could tank and you could lose that investment. So the question then becomes, how do you reduce that risk as you're trying to plan for retirement in a volatile period like this?
Mike Zaino:
So I heard some client of mine say and this has been a minute ago, but she she looked at me and she said, Mike, you know, at this point in my life, I am much more concerned with the return of my money than a return on my money. And that has always stuck with me, especially when we're looking at how inflation is just eroding the US dollar right now. And so when we are trying to hedge against all of that market volatility and inflation and where do we put our money, another really, really good option for folks is a product called a fixed indexed annuity. And when you look at different types of investment vehicles and plans that are available, you can put them into two basic groups, right? Those that are going to risk your principal and then safe money options that protect it, lock it down, and traditional investments most of us are very, very familiar with. They fall into this group that put all of your principal at risk. So we're talking about stocks, we're talking about mutual funds, we're talking about commodities, real estate and so on and so on. These, with the exception of real estate this year, have absolutely taken a beating. Right. So I think the market is down 20 plus percent as of today, which we are officially in what they call bear territory.
Mike Zaino:
And on the other side of the equation, if you're not trying to lose what you have worked your hard earned life for, to to to put that money and squirrel it away every single paycheck, week in, week out, month in, month out, year in, year out, decade in, decade out. Right. You have worked on this for your entire. Life. And so on the other side of the equation, we have what we call those safe money type of plans where your principal is 100% guaranteed from loss in those safe money options that most of us are familiar with are at banks. You can put your money into CDs, you can put your money into money market accounts, into savings accounts or into bonds. All of these have principle that's guaranteed by a federal agency or by federal insurance, the FDIC. But one safe money option you may not know about or much about is called that fixed indexed annuity. And they're commonly referred to as F I as the acronym for fixed indexed annuity. So with a fixed indexed annuity, you are able to have your money participate in the growth of stock market indexes or plural indices. Both are correct while having a minimum guaranteed growth rate and your principal is 100% protected. So if I look at like seven key features, if I were just to pull out seven key features of a fixed indexed annuity, first, as I just told you, your principle is 100% guaranteed by the insurance company.
Mike Zaino:
So people take out insurance, if you think of this, on their house, on their boat, on their car, on their home, on their life. Right. They insure this. This is a way of ensuring your income will be there for you when you need it. Number two, you have the ability to participate in stock market gains, but you'll never lose money if the market drops because of number one, your principal is guaranteed. I actually received a letter this week in the mail from one of my clients that says, I'm just going to read a little excerpt. We were so grateful to hear from you, letting us know how things are going. Wow. Can you believe with this market we haven't lost a single penny? Don't worry about sending new or us sending new people to you. We tell them you are the best. Thank you so much for guiding us in this direction. It made us feel so grateful knowing somebody was looking out for us. That type of correspondence from my clients is something that I live for, right? There are things that I enjoy and there are things that give me joy. I enjoy wetting a line and going fishing, although I don't do it nearly as much as I should.
Mike Zaino:
Getting somebody to understand that the preservation and distribution of their life's income is of utmost importance in retirement. That actually gives me joy. And when I get letters like that from clients, it just it just serves as a reinforcement that I am in my mission field and helping people do what they need to do. And because of that, I haven't worked a day in the last 11 years. So I went through the first two key features of fixed indexed annuity. I'm going to go into the third one now and this is probably one of the most important features is that all of your gains, anything that the fixed annuity, fixed indexed annuity gains, those are credited to your account and are locked in and guaranteed just like your principal. So if you think about how the market has done this year, you wouldn't have lost a penny. And then once it turns around and you start participating in those gains, that actually becomes part of your principal on your contract anniversary. So that's pretty cool right there. Number four, all of the money inside of the fixed indexed annuity is going to grow tax deferred. So you're not going to be taxed on any of those gains until you withdraw them.
Mike Zaino:
And I will say that if you already have significant funds set up inside of a Roth, we can set them up as well inside of a fixed annuity and structure it for guaranteed income for life that you don't have to pay taxes on. Number five, there are typically no fees involved. I'll say that again, zero fees unless you choose to add in any enhancement to your annuity, which is called a rider. The sixth feature is income. We like to refer to it as liquidity. Every company is different, but with most of the fixed indexed annuities, you can actually start taking income after one year. So during the first couple months, first 12 months, they are going to get a jump start on in. Investing your money. So after one year, you can start taking withdrawals. During the first year, there are going to be limits to how much you can take without penalty. And this is because, like I just said, the insurance company has made investments to protect its lifelong commitment to you and liquidating those positions ahead of schedule cost that insurance company money. And so these, you have to remember, are long term retirement savings vehicles. When you purchase a fixed indexed annuity, you're going to know up front what percentage of your contract will be available and you will be provided with a schedule of early withdrawal fees that will decrease to zero over time, usually between 5 to 10 years, all depending on the type of annuity that you choose.
Mike Zaino:
And lastly, number seven, there are a lot of fixed indexed annuities that offer some form of bonus. So when you place your money into one of them, we will determine by looking at your current financial situation whether a fixed indexed annuity with a bonus is appropriate for you and your situation. Because sometimes when you get a bonus, there may be a little bit less of a participation rate. Some some pros and cons with that, but we can determine that on an individual basis. But let's just say we do choose one with the bonus. I've seen them that average or say range between five and 20% depending on the length of the contract. And that is credited to your account on day one. But you just can't turn around and take out the money. They're definitely going to be rules on on how long it's going to take for that bonus to vest. But as an added incentive, you can know that if you've lost X number of percent during this market right now and you're trying to make up for that, you know that that could be a very, very good alternative way for you to do so.
Matt McClure:
Yeah. And you said, you know, something that's very important. They're speaking specifically about fixed indexed annuities. But in general, the the thing that I have kind of want to drive home, at least right in this moment, is that it's important for each person to understand that what works for their neighbor, for retirement planning or what worked for their parents for retirement planning, their aunt, uncle, cousin, whomever, they're their best friend they've known their whole life may not necessarily be the best thing for them. Everybody's situation is different, and that is why it's so important to go through all of these things with someone like you, Mike, who is an expert in these areas and can help guide people through this process.
Mike Zaino:
Yeah, there is absolutely no one size fits all. If you think about this for a second, right? It's kind of like why doctors don't prescribe medication in a group setting. Could you imagine if you go to a basketball game or you go to watch the Carolina Panthers play football the next football season and a physician comes on at halftime and just says they're going to prescribe, you know, X number of different type of medications to every attendee there that might mess some people up. Right. So that's why it's important that we sit down and I get to know you and your goals and your objectives and what you've been through and where you want to go. And my job is, is I see it. My mission is to help you get to that point, because if I can't do that, then what's the use in sitting down? But I mean, I can do that as evidenced by the letter that I just received and read to you.
Matt McClure:
It's very it's very, very true. Obviously, that is the case. This is money matters with Mike. Folks, we're going to take another quick timeout here and talk a little bit more about these increasing costs that we've been seeing. And because we've got a little bit of a segment coming up, we're going to talk about some cost cutting ideas for you and hopefully help you kind of save some money in that way. But right now, we want to hear about all the other all the how the money is going out the window at the moment with these rising costs, particularly this hot, hot summer when we've got the air conditioning all running full blast. You'll hear what I'm talking about coming up here in just a sec. Money matters with Mint.com is the website. Again, the phone number is 7045601573 to talk with Mike Zeno. We'll be right back. Money matters with Mike will continue in just a moment.
Mike Zaino:
Fly me to the. Let me play among the stars.
Matt McClure:
The heat is likely not the only thing making you sweat this summer. I'm Matt McClure with the Retirement Radio Network powered by a mirror life. With energy prices soaring and record breaking heat waves across the country, the cost of cooling your home could set you back a pretty penny this year. The Wall Street Journal reports the average American household will pay $540 in electricity bills during the summer months, up $90 from a year ago. An air conditioning can make up a big chunk of that total, especially in hotter and more humid areas of the country. Sarah Baldwin is with the think tank Energy Innovation.
Sarah Baldwin:
Because we have a confluence of factors, the increased price for both gas and oil, as well as natural gas in homes and buildings and a an extremely hot summer and likely to be record heat all over the country as well as the world, largely due to climate change. We're feeling the pressures on both sides, but if.
Matt McClure:
You think there's nothing you can do to ease the pain, you'd be wrong. Baldwin says there are some things you can do that will cost you only a little, if anything at all.
Sarah Baldwin:
Paying attention to when you're turning on appliances, when you're turning on the AC. If you have a thermostat that you can program setting that thermostat to a modest temperature instead of going straight to really, really cold, looking at what kind of window coverings you have.
Matt McClure:
Other improvements may be a bit more costly.
Sarah Baldwin:
Update your air conditioner to the most efficient unit. A heat pump. Air conditioner is going to be your best bet. You can also look at replacing windows and doors. Those can be a bit more costly but can have huge benefits in the long term.
Matt McClure:
And don't overlook your power company. It could have some programs or incentives to help you cut back on energy use and save yourself some money in the long term. Baldwin says renewable energy is the way to go since prices are much less volatile than things like oil and gas.
Sarah Baldwin:
The sun, the wind, geothermal, hydroelectric, other carbon free sources like nuclear are all generally very cost stable relative to their more volatile and spiking fossil fuel counterparts.
Matt McClure:
So how will you survive the summer heat and its impact on your wallet as you plan for retirement? That's a key question to consider as the mercury and inflation keep going up with the retirement radio network powered by a marine life. I'm Matt McClure.
Matt McClure:
You're listening to Money Matters With Mike. To schedule your free no obligation consultation, visit money matters with Mike Dotcom.
Matt McClure:
Welcome back to Money Matters with Mike. I'm Matt McClure here alongside the man of the hour himself, Mike Zaino. And Mike, you know, we were just hearing there about how we're all paying we're all paying more for energy right now, especially during these hot summer months, you know, with the AC having to run full blast while you've got energy prices already really sky high and you've got these record high, not only prices, but you've got the record high temperatures out there at all. It's sort of a perfect storm.
Mike Zaino:
It is. And I can speak from personal experience about feeling that pain, literally. Yesterday evening, ah, we noticed that it was getting a little warmer in the house and our air conditioning was no able to keep up with the 100 plus degrees that it was outside. And one of our units bit the dust, so we all slept in downstairs on couches just to be able to have some degree of cool. And by that I mean it was 76 degrees and we're used to keeping it a little bit lower. But so I've got my air conditioning man coming to visit me tomorrow.
Matt McClure:
Boy, what timing? Let me tell you, it always happens, right, when you least expect it and right when you don't need it to happen. And that's, you know, that goes back to the planning for your future and having some, you know, set aside for those types of things to happen. Because if you if you don't if you're not prepared for that, you know, it can just be a very detrimental thing to the old pocketbook.
Mike Zaino:
It can. It can. And so there are a few things that you can do. We would call them cost cutters of the week, so to speak.
Matt McClure:
We need a we need, like a big sound effect for that. I've got to work on that.
Mike Zaino:
Okay. So, you know, I heard the question asked one time, how do you boil a frog? And I kind of looked puzzled at the question, and the answer was one degree at a time. And so one of the things that you can do, if you think of that in reverse, if you can get used to living in your house when it is 100 degrees outside, say you keep your your thermostat on 68, raise it to. 69 and then in a week raise it to 70 and then in another week raise it to 71, one degree at a time. And ultimately, the goal would be to get used to living in a little bit warmer environment so that you don't have to pay those exhausting electric bills and or like me have to replace. Hopefully it's just like a condenser and I don't have to spend 5000 plus dollars to replace the entire unit. But there are several things that you can do to kind of cut your costs. And I would be a prime example of considering changing the vehicle that you drive. I said before it took it took $128 to fill up my truck. I also have a motorcycle, but it's too hot to ride that motorcycle right now. So you might consider purchasing a used hybrid or used electric vehicle because the cost of new vehicles is astronomical.
Mike Zaino:
Right now, you might consider taking advantage of the current real estate environment and putting a few dollars into your house and then listing it and getting absolute top dollar. Now a lot of people will say, Well, where am I going to go, Mike? I can't buy anything. But if your goal is to downsize and place yourself into a home, say you went from a 2500 square foot home into a 15 or 1800 square foot home that's 700 square feet to 1000 square feet less that you're having to heat and cool. Right. So there are advantages in doing that. Maybe you have to move out a little bit five, 10 minutes further from town, so to speak, to find something that fits within your price range. But in downsizing, it could accomplish saving some money. You would be able to put some money away in the bank because again, you're taking advantage of today's current real estate markets, which is bananas. And then you would save on theoretically on your energy costs to heat and cool that house. You can also go down to one vehicle to save on insurance, to save on taxes, to save on gas and more, and consolidate trips. And if you're used to going to the grocery store every day to pick up what you're going to eat for that day, maybe you go every other day or every three days or once a week and go ahead and meal prep for that week.
Mike Zaino:
I have a two of them. In fact, two of my longest tenured clients, I think they are 80 and 81 right now. They literally went down to one vehicle and it's so sweet because they're both retired, but that's what they do to spend time together as they take each other to the grocery store and they take each other to doctor's visits. And the cutest couple. I always enjoy spending time with them when I get to. And then if you're somebody who on your way to work stops off every morning to grab a Mountain Dew or stops off to grab a caramel skinny macchiato with six shots of this and that. And you're spending X number of dollars at Starbucks. Just think about what that adds up to. If you're spending $6 a glass for a cup of coffee every single morning times, five more, that's 30 bucks a week that you're spending right there. I mean, 30 bucks a week is not insignificant over a 50 week, assuming you get two weeks worth of vacation, that's $5,500 a year. Yeah. That you could save just by skipping that expensive cup of Joe and buying some Folgers, right?
Matt McClure:
I mean, just make it at home. Get yourself one of those mugs that you can put in the car to take with you on the way to on the way to work.
Mike Zaino:
And.
Matt McClure:
Service. There you go. Right. There you go. And you're done. And you've saved yourself hundreds, if not thousands of dollars over the course of the year. I mean, that's that really the the price of the price of coffee, the latte effect is, as we call it here, is a very, very real thing.
Mike Zaino:
I was guilty of it until I recognized the fact that I was guilty of it. You know what? That stopped really quickly.
Matt McClure:
Oh, yeah, absolutely. That that will make you do it. And once you have that realization, you're like, wait a minute, if I do this math in my head and if I'm doing it right, this is not good.
Mike Zaino:
So you can say that too. And you just need to really, really take a strong look at where your money is going. In fact, one of the exercises that I have, my newer clients, especially my younger clients do, but all clients is to write down every penny they spend for 30 days. I don't care where they spend it. Write down every single penny, whether it's for gas, whether it's for groceries, whether it's for bills. Whether it's for subscriptions. There are a lot of people out there that are paying for subscriptions that they don't use. One of my clients was paying $300 cable bill and I said, Do you even watch TV? He goes, I watch TV for maybe 2 hours a month and I'm like, or 2 hours a week, rather. I said the why are you paying $300 a month? He switched to YouTube TV. Cut the cord, cut the cord. You know, I had Netflix, Amazon or some other subscriptions that are out there. I mean, there's a Spotify, right? I mean.
Matt McClure:
Hulu. But we got the yeah, yeah.
Mike Zaino:
There's just so many of them out there. And if you really drill down to how much time you're spending using them, I think you'll find that it might be more important to you to actually have that cash in your pocket or in some form of investment vehicle that is going to make you money and be protected from downside volatility.
Matt McClure:
So, Mike, you know, we've been talking about ways to kind of cut costs and and all of that. But sort of, you know, as we're looking at the big picture here, what are some ways that people can, no matter how much money they've set aside and no matter if they've been dealing with inflation, they have maybe been able to put aside as much as they've wanted to or that kind of thing. But no matter how much you've saved, what are some ways that people can live comfortably during retirement?
Mike Zaino:
Great question. I'd say one of the biggest ways that they can live comfortably is to minimize their debt load. So number one would be to pay off your house if you have the ability to make extra payments and get that house paid off before you go into retirement and you're living off of a fixed income, that's going to just absolutely bode well for you as far as not having to pay your monthly mortgage payment every single month. If you don't pay it off, maybe you downsize and you take the money in this ridiculous market that you're able to get for your home today and you pay cash for your new house, so you buy a less expensive house and then you're able to turn around and invest the difference. That would be one big way. Another way would be to establish your own personal pension, a pension that you can absolutely never outlive. And you would do that through a vehicle like a fixed indexed annuity or an indexed universal life insurance policy that allows you to grow your principal with market linked gains but zero market risk. You could also replace underperforming bonds if you own bonds and bonds are not doing well right now, you can replace those with fixed indexed annuities and eliminate all of those fees that you're paying on the bonds. I mean, why overpay for an underperforming asset? Right.
Mike Zaino:
We already discussed about accurately calculating every single expense that leaves your wallet on a monthly basis. Imagine going into retirement with a little bit of extra money because you've identified those places that you can cut costs. Now you're taking that extra money into retirement. Another way would be to diversify your accounts between tax deferred accounts, taxable accounts and tax free accounts. Well, how do you do that? We've talked about several of them on today's show. And then if you need to work until your Social Security full retirement age and then start taking Social Security, you're capitalizing on 100% of the benefit. You can take Social Security as early as 62, but when you do that, you are taking pennies on the dollar, roughly 75% of your full benefit. And then if you're somebody like me, who as long as the Lord sees fit to give me breath, I don't ever plan on retiring because again, I haven't worked a day in my life in the last 11 years. I'm going to I'm planning personally to push my Social Security until the maximum Social Security age, which is a 70. Is that right for everybody? Probably not, because, again, no one size fits all. But the biggest thing is, is that you don't want to settle for less by taking it to early.
Matt McClure:
Yeah. And the other part I think too, about all of this that we talk about here on the show is you don't want to settle for less by not knowing all of your options. You don't want to settle for less by not real, by not having guidance, rather, for retirement and for your planning for the future. So in our last few minutes here, Mike, who should be someone who should consider working with a financial or insurance professional as their. Looking toward planning for their retirement years.
Mike Zaino:
I think everybody should. But I mean, everybody is not right for me and I'm not right for everybody. But if you look in the athletic world, even Michael Jordan, who is widely considered one of the greatest basketball players of all time, arguably the best of all time, he still had a coach look at Tiger Woods, arguably one of the best golfers of all time. He still had a coach. So people who are retired, they should definitely work with a financial professional, people who are looking to retire. If you ever want to retire comfortably, you need to have a plan. If you don't have a plan, then you plan to fail people. If you've been recently laid off or downsized, or you're changing jobs or you're looking to protect and grow your hard earned savings. If you have an old 401. K, for an example, from a previous employer who's not looking out for it, I can promise you that if you're no longer there, you need to work with a financial professional. If you are somebody who is looking to maximize your Social Security benefits and coordinate those with other income sources as far as which ones start, when and when it makes the most sense to start each of them, then you need to work with a financial professional who is an expert and can guide you in these matters and provide clarity for you people who are retired of the roller coaster ride of the stock market.
Mike Zaino:
I mean, it's been brutal this year and you want to safeguard a portion of your money if you want to take what you have worked so hard for and don't want to risk just giving it all back, you should speak with a professional people who are looking to purchase life insurance. All right. One of the only types of tax free investments should definitely talk with an insurance professional and then people who want a second opinion on their current retirement plans. It is never a bad idea to plan for retirement, and part of that plan is to get multiple sets of eyes on your plan, if for nothing more than to validate that you're on the right path. And so I have people that come to me all the time and they've got a plan. And you know what? That plan makes sense for them. And if nothing else, I have given them the confidence in that plan that they might have been second guessing. Then I meet with people who bring me a plan that really isn't a plan at all. It's just some ideas that they've had and they've taken no action steps to implement it. And I'm able to take, again, their goals and objectives and put that into a step by step guide, a path to help them get to their destination. So those are if you're if you fall into any one of those categories, you should absolutely get in contact with me.
Matt McClure:
Money matters with Mike dot com is the website the phone number for you to call 704560 1573. And when people call or they reach out via the website Mike remind them in in our last couple of minutes here what that conversation is.
Mike Zaino:
Like, the first conversation that we have, again, it's just going to be a fact finding mission. My goal is to not sell you anything. My goal is to listen to you, to ask you a lot of probing questions so that I can figure out what it is that you have, where you want to go, and the best path to take in order to help you reach your destination. So very, very unassuming. I don't talk over people. I am extremely approachable. And again, my goal is to help you. So if I can help you, if I can help just one more person, one more family, not make mistakes and fall into certain traps and pitfalls that I see plenty of people making who do not seek advice, then I will continue to sleep very, very well at night.
Matt McClure:
Well, Mike, just about time for us to wrap things up here, but share with the folks once again how they can reach out to you for that consultation.
Mike Zaino:
So people out there in radio land, I really appreciate you guys. Without you, this show does not exist. I recognize that you could be doing a lot of other things during this hour on your Saturday afternoon, so I am extremely grateful for each and every single one of you. If you want to reach me, call me. 7045601573. Again 7045601573. Or if you prefer to check me out, you can go to money matters with Mike. Money matters with Mike again. Thank you. I appreciate you. And as always, make it a. Great day.
Matt McClure:
Thanks for listening to. Money Matters With Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation, visit money matters with Mike or pick up the phone and call 704560 1573 that's 7045601573. Not affiliated with the United States Government, Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature. It does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness. Are the results obtained from the use of this information?
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