What Retirement Looks Like for Americans Today

4.26.24: Audio automatically transcribed by Sonix

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

Speaker1:
Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal applied to your income benefit base. Call us now at (704) 560-1573. That's (704) 560-1573. 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 what retirement planning looks like in 2024 and how you can take proactive steps today to improve your financial and future retirement. Okay, as always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today, buddy? I'm doing great.

Speaker2:
Mike I hope you are as well on this beautiful weekend.

Speaker3:
I am, I am, I had a chance. I came back from the International Association of Registered Financial Consultants 40th anniversary meeting at the Biltmore Estate in Asheville. Uh, we were, uh, we were up there for four days, had a chance to have our board meetings. I served on the board of directors there. And and it was great because we kind of got a glimpse of the future generation of financial professionals. We hold a collegiate competition amongst several colleges throughout the United States of America. And congratulation goes to the University of North Texas, who came away with the overall best financial plan in that financial plan competition. So it was a good time.

Speaker2:
That's amazing. Congratulations to UNT there. I actually had a my best friend uh, for since like middle school age, uh, went to UNT and his birthday is actually this weekend. So happy birthday Brian and congratulations to UNT. Absolutely love it. Love it when the world is small, uh, smaller than it seems a lot of times, but, uh, yeah. No. So that sounds like a great time. And speaking of great things, we've got a lot of great stuff to get to here on the show before we kind of dive in, though, we want to say a big, huge thank you to each and every person listening right now. Yes, you. I am talking to you personally. Thank you, thank you, thank you. Because without you we would not be here. This show would not exist one single minute longer. So thanks for doing it. Thanks for spreading the word as well. Uh, tell folks to go to Money Matters with mike.com, and they can listen to all of the great episodes of this show dating back going on two years now, which is kind of hard to believe that we've been going at it for that long. But, uh, it is, uh, you know, time is flying here and we have a lot of great information that's out there. You can also subscribe every time you get, uh, every time we get a new episode out there. You will get it if you subscribe wherever you listen to podcasts. You can also check us out on YouTube. Just search Money Matters with Mike there and same thing on Facebook where Mike, I know you love interacting with our listeners.

Speaker3:
I do. I absolutely love getting questions from the listeners. A lot of the listeners will DM me on Facebook, and that's where we get a lot of our, um, future topic discussions for, you know, for shows. And so I'm able to answer questions, I'm able to get a lot of, you know, reciprocity, some back and forth. And I just think that, you know, with technology these days, uh, if you can't find me, you're really not looking because, I mean, like Matt just said, Facebook, we've got YouTube, we've got Money Matters with Mike comm and of course, the good old fashioned telephone 704 5601573. So I would love to, you know, get every single one of our listeners a complimentary consultation so that you can have peace of mind and confidence that your retirement will be everything that you hoped and dreamed it would. Yeah.

Speaker2:
704 5601573 again, is that number. And today as Mike said at the very top, we're going to talk to you about what retirement planning looks like right now here in 2024. And we're going to do that by sharing some little known facts about retirement and what things are like for a lot of retirees today. Some good, some kind of scary. Uh, we'll go through all of those here momentarily. Uh, we could be, by the way, as well, in the best time period ever, potentially, for you to set up your own personal pension. What do we mean by that? And why is now the best time potentially for that to happen? And we'll talk about that as well. And how a 400 1KX ray and a bond analysis can improve your retirement plan as part of all of that. And of course, as we always want you to do, we'll talk about being proactive rather than reactive here on the show today when it comes to your financial plan. All right. Let's get some inspiration though, as we kick things off here with our ever popular quote of the week.

Speaker4:
And now Folsom Financial Wisdom. It's time for the quote of the week.

Speaker2:
And this week's quote comes from the Oracle of Omaha. Once again, we had a quote from Warren last week, so we got another one this week. He's always got some great words of wisdom for us, and this time around he said this someone sitting in the shade today because someone planted a tree a long time ago. That's right. You know, that tree didn't just appear out of nowhere.

Speaker3:
You know, it's funny. I bought a farm not too far from here about, uh, about 30 minutes away, about 33.5 acres. And it's a lot of rolling pasture. And I would love to be able to transplant some of the trees that I saw on the Biltmore Estate that have been there for literally hundreds of years, and just strategically place them on my farm. Um, unfortunately, uh, I don't think they're going to allow that. And so, you know, we always joke about, hey, when is the best time to plant a tree? And, well, it was 20, 25 years ago. So that you can be sitting under that shade that the Oracle has so eloquently described.

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

Speaker3:
When I look at that in terms of retirement planning and planning for your financial future, it's all about this little thing that we've discussed ad nauseam before on our on our show called Compound Interest. And compound interest is a powerful concept in retirement planning, and it refers to earning interest on both the initial principal as well as the accumulated interest over time. And that compounding effect can significantly boost your retirement savings, especially if you start early and consistently contribute over time. So you know, the earlier you start investing, the more time your money has to grow and even small contributions that are made early on can grow substantially over time just due to the power of compounding and beyond. You know, starting early, you want to have consistent, regular contributions to your retirement savings, because when you combine that consistency with the compounding effect, that can really help build a sizable nest egg over time. And I kind of wanted to give you guys a couple examples. And so if we take a fictitious person that we're going to call John, and let's just say that John starts investing for retirement at age 25. And in some of our younger listeners are may say like, yeah, right. I can't even think about retirement. I'm just trying to, you know, put food on the table and pay all my bills.

Speaker3:
But we're not asking you, John, all right. To invest a lot of money. We're talking about $1,000 at the beginning of every single year. Right. So just $1,000 a year. If John invests that and gets an average annual return of 7% and continues to invest that $1,000 a year until he reaches age 65 using a compound interest calculator, his investment would grow to approximately 393,000 and change, so just under $400,000 by only contributing $1,000 a year. Now let's contrast that and say Sarah starts investing for retirement ten years later, okay, at age 35. And like John, she invests the same $1,000 each and every single year at the beginning of the year. And like John, gets that 7% return and continues until age 65. Well, using that same compound interest calculator by 65, Sarah's nest egg is only 192,000 and change. So we're talking about literally almost half. Okay, so comparing the two examples, even though John and Sarah invested the same amount of money each and every single year and got the same interest rate, John's investment grew significantly larger just due to having started ten years earlier. And I think that really showcases and demonstrates the power of compound interest and the importance of starting early in retirement planning. Matt, you think about that.

Speaker2:
That's absolutely right. You know, it really does paint a powerful picture there about how much compound interest can work for you because, you know, both in both cases, you know, you end up with due to the power of compound interest, a lot more money than, you know, just, you know, if you put, say, $1,000 under your mattress each year, you know, if you did that for 40 years, you'd have $40,000. So it's like, you know, you you make that grow exponentially with the. Power of compounding interest. But time is key, and the more time you allow that compounding interest to be your friend, the better off you are. So great, great example there.

Speaker3:
You know, and just to kind of pick up on what you, you know, just said using Albert Einstein's rule of 72, if somebody did that okay and got that would have gotten the same 7% return had they invested it. That $40,000 in cash would only have the spending power of $10,000. Okay. Because of the fact of what? Inflation and the rising cost of living. But now I want to look at it a little bit different way. Let's just say that John starts investing at the same age of 25, and that first year he does $1,000. But now since, you know, traditionally we make more money as we get older, let's just say that he then increases his contribution by only $100 per year each and every single year. So at 25, he's doing 1000. At 26, he's doing 1100, at 27, he's doing 1200, so on and so forth. Okay. Using that same compound interest calculator, we find that by age 65, his investment is now approaching $871,000. So that's almost a million bucks, folks. And if we consider that the S&P 500 index, which is widely used as the benchmark for the US stock market, the average annual return of the S&P has actually been somewhere between 9 and 10% over the long term when adjusted for inflation, and that figure takes into account the market's performance all the way back from the Great Depression until today. You know, compound interest folks, it is a force multiplier.

Speaker2:
It really and truly is. And that is just shows to shows to go. Ya, as Daffy Duck would say, it just shows to Goya that, you know, compound interest can be a friend. It can also be your enemy, as we often say as well. You know, while we're on the topic, uh, carrying high interest debt like, say, credit card debt, that revolving interest on top of interest, on top of interest that you're not earning. You're paying each and every month, boy, that or you're not paying if you're carrying a balance on it, that is that's why it builds up and and it can just bury you. It really, really can. So you want to be earning compound interest, not having it, uh, charged to you.

Speaker3:
Absolutely. That's why Albert Einstein called it the eighth wonder of the world and said that those who understand it will earn it. And those who don't, unfortunately, Matt, they're going to pay it.

Speaker2:
Yeah, absolutely. And it is a big, big bill to pay when it comes due 100%. All right. So that's, uh, great, great insight there, Mike. And let's move on here to kind of the main topic of discussion today, which are these ten little known facts about retirement in America today. Um, number one, and this one really kind of surprised me and made me start kind of feeling old. Um, number one here, a little known fact is that generation X, generation X is retiring in droves. Um, that was that was surprising to me.

Speaker3:
Yeah. So so for those of you who are not familiar with, uh, Gen X, okay, that's the generation in between the millennials and the baby boomers, and the age group is those that are born between 1965 and 1980. And, you know, there's some some sites that'll say, you know, 1981, because I have my youngest brother was born in 1981, and I keep calling him a millennial just to mess with them. And he's like, I'm not a millennial. So if this sounds like you, all right, particularly if you're in your 50s now, is the fantastic, like the perfect time to start meeting with a financial, uh, professional and start putting a formal retirement plan into place if you don't already have one. And if you do already have one, at least get a second set of eyes because you still have time on your side. And there is a lot that you can do to improve your financial future. And so many Gen Xers are starting to reach that age of retirement. Which leads to what a significant increase in the number of retirees and those retirees are. Unique challenges, as well as unique consideration, like balancing financial responsibilities that they've never had to do before. Maybe you're caring for an aging parent, and while still having kids that may be in college and trying to plan for your own financial future as far as retirement. So this is very, very important. And if that's you, we can help.

Speaker2:
Yeah, it's a lot to add into the mix there that really. Can lead to a lot of confusion, frustration and all the above. And that is why Mike Zeno is here to help you, our listeners, to really make your financial future better than you thought it could be. Money matters with Mike comm is the website that's Money Matters with Mike comm. Or you can call Mike at (704) 560-1573. The number one more time 704560 1573. All right. Here a little known fact about retirement today. Number two is family responsibilities don't end in retirement. You know Mike you just mentioned there a lot of those responsibilities. Things like aging parents caring for them, having to care for kids and all of that. Um, yeah, that that doesn't end when you call it quits.

Speaker3:
It doesn't end. It's just like, okay, once the kids are out of the house, it's just me or it's just me and my spouse, all right? And so having to support adult children or grandchildren or aging parents financially, or maybe through caregiving responsibilities that can have a significant financial drag, a big impact, huge impact on your own financial future. And so balancing those family obligations with your personal financial goals can be challenging for retirees. And what that does, you know, does, is it requires very careful planning. And then beyond that, more and more and more communication. Why do you want communication? Because as things change within your life circumstance, that can have significant impact on your financial plan, and if that's not communicated with your financial professional, you can find yourself, uh, in a detrimental position based off of a plan that hasn't changed while your family circumstances have changed. And so retirees might need to set boundaries and establish some clear expectations in order to ensure that their own financial stability is intact while still having the ability to provide support for their loved ones.

Speaker2:
Yeah, that's great advice there because, you know, I mean, things do change. Circumstances change. People get older, as you said there. You know, people, uh, like your parents, uh, or even aunts, uncles, depending on your particular family situation, may need your help, your assistance. Uh, and that is going to take some, you know, some financial burden on your part. So, yeah, I mean, all of these different circumstances call into attention the need for a plan. And that's the big thing here is make sure you have that plan. But as you said, increase that communication as time goes on because you want to make sure that the plan grows and changes as your life grows and changes as well. All right. So little known fact about retirement number three here. One third of retirees live on Social Security alone. This was the one that was we were kind of, you know, going over things just before the show here, Mike, I was running through and I was like, boy, this is scary. A third of retirees living just on Social Security.

Speaker3:
Yeah, it is scary. It makes me scratch my head. It makes me feel sad. Um, because had those people been proactive, um, they could find themselves in an entirely different situation. But just because life got in the way, or they intended to do something like life is full of good intentions. But unless you actually take action, um, you might find yourself as one of that 33% of Americans who are living on Social Security alone. And I pray that that is not your case. Social security plays a significant role in the financial well-being of many retirees, with a substantial portion relying on it as their primary source of income. But it does not have to be that way, because living on Social Security alone can it not? Can it will present, you know, some serious financial challenges as as those Social Security benefits will likely not nearly be enough to cover all of your expenses. And so, therefore, it is crucial for retirees to explore additional sources of income like pension plans, like personal pension plans, like investments, or maybe even part time work just to be able to supplement their Social Security benefits. So, you know, if you're looking for another reliable source of income in retirement, pick up a phone. Please get in contact with me today so that I can show you. I can discuss with you how to develop a personal pension while you still may have some time. I mentioned earlier on, if you're in your 50s, now is a perfect time because you still have time where a personal pension that you can establish can become that critical key portion. Of your retirement income plan because, you know, again, having multiple streams of income is better than relying on Social Security alone. So stay tuned because later in this episode, we're definitely going to discuss why now may be the best time ever. All right in history to invest in a solution that can provide you with a personal pension.

Speaker2:
Yeah, that is right. And so definitely want to stay tuned for that because great useful information for each and every listener out there. Because there are a lot of people, Mike, who are concerned obviously about Social Security, potential future cuts affecting their retirement. And so what we love to do, I know what you love to do for people who reach out to you at 704 5601573 is take a look at their Social Security. Come up with a maximization plan that's customized not only for them for for the particular retiree who might reach out, but for them and their spouse if they have one as well. Using that benefit information is really key because it can lead to a much better outcome in retirement. When you understand, okay, here's how much income one spouse is going to have, here's how much income the other is going to have. And there are a lot of other things to take into consideration with that as well.

Speaker3:
Uh, 100%, because, I mean, if you don't know where you're going, it's going to be hard to get there. And when you have a plan that is, you know, you have buy in and you understand why I'm recommending what I'm recommending, then it just all clicks and it kind of makes sense. And now you're moving toward taking actionable steps that will yield the desired result.

Speaker2:
Yeah. And once again, that number is 704 5601573. Little known fact about retirement number four here Mike is also another kind of scary one. Most retirees have not budgeted for retirement. There's that word again budget.

Speaker3:
You know we talked about the single biggest, uh, regret a few episodes ago on the show. And if you didn't listen to that, please go back and find that episode. The single biggest regret of most retirees is not having saved enough for retirement. So a lack of budgeting and financial planning can lead to financial stress, all right, and uncertainty during retirement. So instead, you want to be able to tell your money where it should go instead of wondering where did it go? Right where it went. Um, retirees need to create a comprehensive spending plan that accounts for all expenses, including healthcare, housing, leisure activities, because we want to enjoy our golden years and as well as those unexpected expenses, the emergency expenses. So having that spending plan allows retirees to have a clear understanding of their financial situation, and they're able to just make much more informed decisions as far as managing their retirement funds effectively.

Speaker2:
Yeah, that, you know, you talked about if you don't know where you're going and can't really get there, if you don't know what your situation is like, you know, the a budget, a spending plan, uh, whatever you want to call it is kind of your roadmap to where you're going to be, you know, and it's like where you are and where you want to go. Uh, that can be such a great roadmap to help you assess where you are and help get you to a place that you want to be in the future. Really?

Speaker3:
Yeah. I mean, and that kind of leads us into our next, um, our next topic. The fact of the standard of living of most retirees will probably change in retirement. And so, you know, when you're used to making this and I'm holding my hand above my head, for those of you who aren't watching us on YouTube, um, and then all of a sudden, in retirement, you're, you're depending on Social Security, God forbid, alone, or maybe a little bit of Social Security and a 401 K, especially if you don't have a personal pension or a company or government sponsored pension, then your standard of living will change. Okay. You're going to go from making a lot of money to taking a significant hit in retirement. And so, you know, it's that means that brings on changes in lifestyle and changes in spending habits, as you just won't have the money to be able to spend, because now you're living on what, a fixed income. And so all of a sudden your priorities must change at that point just for you to get by and to exist. And if that is your goal for retirement, just to get by and exist.

Speaker3:
Um, we I need to shake you a little bit, rattle your cage a little bit, and get you to wake up, because it can be so much more. And by making adjustments to spending in retirement, whether that's downsizing your home, whether that's cutting back on discretionary expenses or finding cost effective, uh, alternatives, you know, planning for a change in that standard of living can help retirees maintain some. Ability and enjoy a little bit more fulfilling retirement that is within their means. But why wait until you get there and have to adjust? Wouldn't you like to not experience a lifestyle drop at all? And if you're answering, yeah, Mike, I'd love to keep my current standard of living in retirement. But you don't have a formal financial plan. Wake up. All right, pick up a phone and give me a call. Reach out at Money Matters with Mike comm. Just get in contact with me and let's get a plan in place so that you can start taking those actionable steps and that you don't have to have that significant reduction in income in retirement.

Speaker2:
Yeah. That's right. Once again, the number is money. The number is 704 5601573 704 560 1573. And the website is Money Matters with Mike comm. You would think I speak for a living or something here, I don't know. All right. So number six, in our little known facts about retirement, we've got ten of them. So we're on the the downside of the Hill. Now as we have crossed the the peak of our mountain that we've been climbing, uh, poverty getting worse for retirees. It's 10.3% as the as of the latest numbers we have, those are from 2021. Um, so poverty really getting worse for retirees. And with inflation, you can you can bet that's almost certainly gotten worse here over the last couple of years.

Speaker3:
Yeah. I mean, if people are living off of Social Security alone, um, they're probably living in poverty. And despite the social safety net, like Social Security, a significant portion. Uh, excuse me. As you said, words were hard, right? First day with our new tongues, apparently. But, you know, a significant portion of retirees still face financial hardship and live below that poverty line. And that breaks my heart, because if you're listening to the sound of my voice right now, that doesn't have to be you. We want our listeners to not become a statistic, right? We want them to take advantage of 100% complimentary consultations for all of our podcast and radio listeners who actually take action and contact us. Many people are looking for a solid plan that helps to avoid the number one fear of retirees, which is running out of money. So please, it's like I shouldn't have to beg you, but I do want to get you to wake up. Give me a call (704) 560-1573 or just go to our website, Money Matters with Mike comm and take advantage of that complimentary offer because I love helping our listeners.

Speaker2:
That is what it is all about around these parts. Number seven, in our list of little known facts about retirement that we're sharing this week, is that 80% of American retirees never leave their state. Um, it kind of makes sense a little bit. But, you know, we think about, okay, people are going to retire, they're going to move to Boca or something, you know, but the expensive this is true. Um, but you know, or, you know, somewhere else if you're going to move to Florida or they're going to move to somewhere in the mountains or whatever, but really, that's not the case. By and large, for most people, 80% of them never leaving their home state.

Speaker3:
Yeah, I think the biggest driver of of the decision to stay at home is probably due to, you know, number one familiarity. Number two family that's still in, you can't just pick up your entire family and and, you know, move them. I'm talking about extended family and move them to a different state. And then, you know, what about all the rest of your friends and your golf buddies or your bridge, you know, partners or your poker players, you know, just I mean, you have established social networks and so, you know, they don't want to have to leave all of that behind. I know my wife, you know, we've talked about, you know, where we might want to retire, um, or at least go spend significant portions of time that maybe not. We don't like move there, but we spend a couple months at a time, and that's probably going to end up what we do instead of spending, you know, lots and lots and lots of money on another house. Maybe we'll spend a lot less money and just, you know, do it an Airbnb for a month or two at a time. So, yeah.

Speaker2:
Now that's, uh, that's a good idea there. I think, you know, you have that, um, stability of still having the home, but then also have that escape that you go to I love it.

Speaker3:
Yeah. No. And then plus two retirees who stay in state, you know, they may benefit from existing health care relationships with their providers, uh, their community resources, again, that they're familiar with. And then they're also familiar with local laws. And of course, we're talking about there maybe moving to a different country because the laws don't typically change from state to state. And just being, you know, having that that well worn but comfort factor. And a lot of people just like that, that comfortability. Yeah.

Speaker2:
It'd be kind of like, you know, getting my, my mom, she's in her, um, 70s getting to be into her late 70s now. And she is very comfortable living. Where she has always lived, not in the same house, but she's, you know, grown up in the same general area of Georgia, and she just loves it. So I can't imagine trying to get her to move to a different state. Now she you'd have to drag her kicking and screaming. So it makes a ton of sense. Um, number eight on our list here of the little known facts about retirement, most people have a retirement portfolio, but that retirement portfolio is not keeping up.

Speaker3:
Mm. And what that means is that it's not generating sufficient enough returns in order to sustain their desired lifestyle throughout retirement. And so there are a lot of pre-retirees, as well as retirees who need to reassess their investment strategies. They might need to take advantage of what we offer those things like complimentary 401 K X-rays, and explore different investment options to ensure that their plan will be able to generate the desired income that they're ultimately going to need in retirement. So if you are planning for retirement, or if you've recently just retired, you likely saw your asset balance drop over the last 3 to 5 years. And, you know, due to the effects of Covid, due to the, you know, catastrophic year in the market was 2022. And so therefore, we encourage you to reach out to us because you could be at risk of running out of money, which just happens, like we've said it before, to be the number one fear of retirees.

Speaker2:
Yeah, that's right. And there are some signs here that, Mike, that people who are listening might actually need uh, 400 1KX ray, for example, a portfolio analysis. What are some things that people might want to look for in their own lives that says, hey, okay, I really do need to take advantage of this.

Speaker3:
Yeah. So, I mean, I see people all the time that come to me with whatever target date mutual fund that their plan administrator has stuck them in in a 401 K or other type of employer sponsored plan, like a 403 B or a TSP. If you're a federal employee and you see that you're consistently saving for retirement, like money is coming out of your paycheck each and every single pay period, but you don't really see the balance growing. That rate of return that you're receiving is not making you real warm and fuzzy. Right? And so if you feel that your money is not working nearly as hard as you do and you aren't receiving much, if any, help from your work based employer sponsored plan or your HR department, then you may be a perfect candidate for somebody that should reach out and figure out a plan to get your money working a lot harder for you than you work for it. Yeah, and.

Speaker2:
God love him. The HR department, they've got a they've got tough jobs. They really, really do. And they're not generally investment experts. So likely what you're going to hear from them is here, call this 800 number and talk to somebody else. Because, you know, that's just the way that it goes. And I can't really blame the HR person for that. But it's like, somebody help me for, for crying out loud. And, you know, it's tough to get help, but it's not tough to get help if you reach out to Mike Zeno. Once again, money matters with Mike comm is the website to be able to do that. And you can also call, by the way 704 5601573.

Speaker3:
We love our people, right? We do, but their job is not to provide you with guidance so much as it is to help you process some paperwork. And so therefore, like Matt alluded to, they are not financial professionals and then most of the time don't know the answers to your questions and will have to refer you to somebody else. So instead of, you know, having to jump through that hoop, just contact me directly and let's get you on the right plan. That is.

Speaker2:
Absolutely right. And as we get into the home stretch now of our little known facts about retirement, we are at number nine. And it is that over 35% of retirees still have a mortgage at the age of 65.

Speaker3:
Yeah, this actually did not surprise me, Matt. You know, carrying a mortgage into retirement used to be, you know, something that nobody would ever consider doing. Um, when interest rates were in the 80s, you know, back in at that 12 to 15% rate. Can you imagine that? Uh, I mean, they're high today, a lot higher than they were, say, five years ago. But I couldn't even imagine that. And if you are, if you do have a relatively high interest rate on your mortgage, that can impact your cash flow and your financial flexibility, um, and will likely consume at least one of your Social Security payments coming into the household if you are in a spousal situation. So, you know, retirees should consider strategies that will. Enable them to pay off their mortgage before retirement, or maybe explore refinancing options that could potentially reduce the monthly payments. Now, in today's interest rate environment, I don't know that that is very likely. But should they fall back into that under 3% or around, heck, anything under 5%? Honestly, I consider to be free money. And so if you can earn more than what you're paying on your mortgage, then I would argue you probably shouldn't pay it off. But you know, a lot of people just like to have that relief and that monkey off their back of knowing that they no longer have that mortgage payment. And so when you enter retirement, you're beginning the what's called the decumulation phase. That's where you need to be concentrated on preservation and the distribution of your assets. And as you withdraw those assets to live on, to meet your expenses, you know, letting debt become an additional drain on your portfolio is not optimal. So that's why, you know, a lot of folks would, would say, hey, I really want to go into retirement without a mortgage. Yeah.

Speaker2:
And, you know, I can see kind of both ways there, Mike. But yeah, as you said, the interest rate environment today does sort of, you know, make you kind of think twice unless you are, as you said, kind of at the, um, in a situation where you have, um, a mortgage that you've gotten maybe just in the past couple of years since interest rates have been so high. Um, and then you, you know, happen to find one coming up in a year or two when interest rates hopefully fall, then you could potentially refinance and have yourself a better deal on your hands, at least as far as that monthly payment goes. All right. So now number ten I wish I had a drum roll here. But number ten, in the little known facts about retirement today, this one surprised me. It's early retirement could actually be bad for your health.

Speaker3:
Mm. Okay. Think about that for a second. While early retirement might seem pretty appealing to most folks, it can actually have unintended consequences on your physical as well as mental well-being. In retirees who retire early can experience something that's known as a loss of purpose. Right? They're going to lose social connections that they may have had while working, and mental stimulation, because a lot of times when you're doing your job, it requires you to think, it requires you to act, and that lack of mental stimulation can negatively affect your overall health. So it is extremely important for individuals considering early retirement to carefully, very carefully evaluate the potential effects on their health and well-being before making that decision. And so again, we can provide you with all the guidance and clarity that you may need through a complimentary consultation and retirement plan. Simply pick up a phone and call 704 5601573 or visit the website at Money Matters with Mike all spelled out.com, and that'll help you book that consultation. And I do look forward to helping each and every single one of you reach those retirement goals.

Speaker2:
Well, Mike, if we've got some first time listeners to the show, which I imagine that we do on this, uh, on this beautiful day, um, talk about exactly what they will experience when they do that, when they go to the website or pick up the phone and give you a call.

Speaker5:
Yeah. So, I mean, the first phone call.

Speaker3:
Is more of a of we call it a discovery call. It just kind of gives us a chance to introduce each other and, and you tell me about what you're going through and what your current situation is. I tell you a little bit about me, and then we decide, all right, does that make sense for us to go into a comprehensive analysis and thoroughly assess your financial situation and help you build a personalized plan that actually aligns with your retirement goals and dreams? And so in that process, we're going to look at things like your 401 s, like your investment accounts, and we'll try to discover exactly how much you're paying in fees, unnecessary fees. That might be a drain on your retirement savings. Okay. And we can help you identify those and find ways to optimize your investments. Then we can talk about things like, you know, developing and setting up a personal pension plan that will enable you to secure a reliable source of guaranteed lifetime income. And by lifetime, I mean an income source like Social Security that you can never outlive. But because it's personal pension, you've created it. It's not going to be subjected to any changes in law by the government. And then, of course, social Security maximization planning. If you're unsure about the best time to start taking your benefits, we'll guide. You through that process will, you know, help you make informed decisions that are based on your unique situation, your unique circumstances. And then again, if you're of Medicare age, Medicare can be extremely comprehensive. So we can help you navigate the alphabet soup that is Medicare. Yeah. All of those things are, you know, uh, come into play when we're talking about a comprehensive consultation.

Speaker2:
And you can get that comprehensive consultation at Money Matters with mike.com. Just fill out the form there. And it's easy, easy, easy to do just that money matters with mike.com once again. And you can also call 704 5601573 to speak directly with Mike Zeno 704 5601573. And Mike, you talked momentarily there about personal pensions, and this is kind of what we were teeing up earlier in the show when we said, this is the part you really want to stay tuned for, because, you know, if you are concerned about Social Security, for example, like we were discussing earlier, this is the part of the show for you because it could very well be a solution to that income problem that you may be setting yourself up for in retirement. It's a personal pension and it's using something called a fixed indexed annuity. Now, Mike, we think that this could be a very, very good time, potentially the best ever to invest in a fixed indexed annuity. Tell us why.

Speaker3:
So you know, I mentioned earlier that I was in Asheville at the Biltmore Estate for the Ierfc 40th anniversary conference. And during that conference, we actually had some people, some economists come in and and discuss at an extremely high level what is, you know, forthcoming in in the next few years, what they see and what all the data and the metrics. And this is using technical and fundamental analysis that leads them to believe these are all the leading indicators of what does all that mean to you guys? Well, there's a lot of fear and talk about recession okay. And so we receive regular calls from both clients and listeners who are concerned about the possible impact that another recession could have on their retirement dollars. And so if you think back to just two years ago, okay, in 2022, many Americans lost more than 20%. I mean, one of the one of the major market index, uh, choices was down almost 30% in 2022. And, and everybody should still remember the economic collapse. All right. That crisis that was 2008 where many people's portfolios lost 50% or more. However, guess what, folks? Many of the Pre-retirees, as well as retirees who are clients of mine, they didn't lose a single red penny because they were invested at least partially in this product that Matt talked about, called that fixed indexed annuity.

Speaker3:
And because it participates in the gains of the market but is 100% protected and backed up by cash reserves. Uh, it makes it a great alternative to bank CDs. So if you're somebody who is a little bit more conservative, if you're risk averse, but you're still looking to protect and grow your money for retirement, one of the best things that we believe you can do for your retirement is replace the bond portion, uh, in your in your portfolio with the right fixed indexed annuity. Because when you invest, invest in the FIA, you're effectively putting a floor on that portion of your portfolio. I ask people all the time, you know, what number would you be comfortable losing in, in exposing to the volatility of the market? And what is your come hell or high water number that you just do not want to go below? Whatever that number is the come hell or high water number, that portion of your portfolio should be put into the fixed indexed annuity. Because guess what? You can't lose that money. That value can only go up and never go down. Yeah.

Speaker2:
When the worst you can do is zero. You never have negative numbers that you see on that, uh, you know, statement when you look at it, when it comes around. Boy, that is a lot of peace of mind. And there are also people who I'm sure Mike are very concerned about, um, you know, things like the, the safety of banks as well.

Speaker3:
Yeah. I mean, when we look at, you know, people flocking to CDs right now, while on the surface that may seem like a really good idea because they're paying four and a half to maybe even five, 5.5%. Um, banks have fractional reserve requirements, which means that they are only required to keep 10% of all of their account holders money, um, in cash reserves. While in contrast, the insurance company, they have a minimum 100% requirement and many insurance companies keep more than 100% like 5 to 10% in surplus, just in case people need their money. So if I were you, I would not be keeping my money in any bank that has less than $100 million in total deposits, as they're not even required to keep 10% cash reserves, those institutions have even less strict requirements. So again, the the advantage of the FIA is that your money only goes up, it never goes down. You still maintain liquidity, which you cannot do inside of a bank CD. If you need access to the bank money that's in a CD before its expiration or maturity date, they're going to penalize you. But with an FIA, most of them will give you access to up to 10% of your deposit if an emergency arises. And the fact that you're able to name beneficiaries so that the money stays in the family forever, um, all of those things just lead it to be so much far superior than a bank CD, and especially more superior than the bond portion of your portfolio.

Speaker2:
Yeah, and speaking of which, I mean, interest rates, um, you know, can really have a big impact on the value of the bonds that you might already currently be holding. Right?

Speaker3:
Absolutely. Because a rising interest rate environment reduces the value of your bonds. And with bonds taking up, you know, somewhere between 30 and even I've seen, you know, portfolios that are 60%, uh, of made up of bonds, uh, those folks should definitely consider what that fixed indexed annuity could do to help protect that hard earned money each and every single year as you age.

Speaker2:
Yeah. So call 704 5601573704560 1573 or go to Money Matters with mike.com. And Mike can talk you through it. You know kind of discover the latest rates there, the features, the bonuses offered by highly rated annuity companies that he works with each and every day. Um, and Mike, there are also here some tax benefits that people need to know about when it comes to fixed indexed annuities and annuities in general, really. But since we're specifically talking about fees here, there are some tax benefits that go along with that.

Speaker3:
Yeah, absolutely. I mean, FIA's offer, tax deferred growth, like just like your 401 K or your 403 B or your thrift savings plan does. And what that means is you don't have to pay taxes on any interest earned until you withdraw funds. And a lot of people think, hey, well, I've got this 401 K, but I can't move it to a fixed indexed annuity because I'm going to be taxed. Well guess what folks? That's false. Moving money from institution A wherever your 401 K or 403 B or other employer sponsored plan is housed over to an IRA that is fueled by a fixed indexed annuity. Guess what? It creates no taxable event. So you can invest in an annuity with that tax. Deferred funds, whether it's in a 401 K or even an IRA, and roll over those funds without any taxable event being created.

Speaker2:
Yeah. Which is great. Great news there. And then also, you know, people are living longer these days right. So that it creates longevity risk. It's it's the the risk of living too long outliving your money. And efya's are one of those types of products that we talk about that can really reduce that or eliminate that longevity risk to a great extent.

Speaker3:
So according to the CDC or the center for Disease Control, the life expectancy back in 1900 was under 50 years of age. Well, by 1950 it had risen to 68 years old. And then today, life expectancy, they're saying, is around 77. But more than 6300 US citizens are turning 90 every single day. And the fastest growing segment of our population are centenarians. And that's people that are turning over 100 each and every single year.

Speaker2:
Yeah. And that's kind of amazing that that's like the fastest growing portion of society there really is. Uh, thank you, medical science, for for helping us live longer. Absolutely. And then also. That really brings into focus, then that answer to longevity risk, which is that lifetime income. And that is no matter how long you live, if you find yourself a centenarian among that fast growing group, then you don't have to worry about that income going away.

Speaker3:
That's one of the biggest rules. General guidelines that most advisors love to tout is this thing called the 4% rule. And if you just think for a second, 4% will last 25 years, right. Four times 25 is 100. So therefore 4% of your retirement dollars over 25 years would equal 100% of your money. So what if you retire at 60? Well, that means you're out of money by age 85. And we just discussed how many people are turning 90 and even 100 every single day. And I think that that rule assumes and makes two bold assumptions. Number one, you're not making any money, but number two, and more importantly, you're not losing any money. And so with a fixed indexed annuity, we take that part of the that variable off and out of the equation. You can't lose money. So while assets are in the stock market you can lose value due to market volatility or drawdown. It can actually go to zero as you age. The fixed indexed annuity, in contrast, provides you with a guaranteed stream of income that even if you do become 100, 105, heck 120, you can't outlive it. So why would you try? Think about this for a second. Why would you try to systematically withdraw your assets when there is a safer option that will provide that personal pension for life?

Speaker2:
Yeah, safer option, and also a much less frustrating option as you get on up there in your in your years as well. And then another big thing here Mike, we're seeing this more and more. And there's actually a particular, um, product that we that advertises on the show and that we have, uh, worked with before. I know you have uh, as well, many times, uh, that we often talk about is bonuses on your principal, uh, of that annuity. Explain that and kind of how that works.

Speaker3:
Yeah. So many annuity carriers that we work with, they actually offer a bonus of anywhere from ten. I've seen 20% of your initial investment. So in other words, if you have a $500,000 portfolio and invest the 40% of that you have in the bond. So let's call it $200,000 into your fixed indexed annuity, you could receive up to $40,000 as a bonus on your principal. And what that does the bonus increases the value of the annuity, which will increase the monthly payouts once you turn on your income. All right. And again, the bonus obviously is going to be determined by your age, by your amount that you're investing and the time horizon for when you are going to need that income stream to start.

Speaker2:
Talk about those different income streams that you'll want to have in retirement. And also, I love that that your kind of plan is to set up multiple income streams of fixed indexed annuities as well. Kind of a laddering scenario there.

Speaker3:
Yeah. So I mean, obviously, unless the government changes the rules, we're going to have Social Security, right? And we're going to have it in some form, no matter if they change the rules. Social security is not going away. That's Mike Zeno's personal opinion. Uh, that would cause a global economic meltdown if it did. Those of you who are fortunate enough to have either company or government sponsored pension plans. Okay, unless those pensions go bankrupt, um, then that would be another income potential in retirement. Okay. And then we talk about the fixed indexed annuities or personal pensions that you can create. And Matt alluded to the fact that I have a plan to purchase one of these each and every single year at the time that I start, um, at maybe 55, which is in two years for me. You're in what? You're in seven months for me now. Wow. Time is flying. Okay. So what that's going to enable me to do is that once I reach my full retirement age or even before, if I want to, I can each and every single year turn on an additional income stream like clockwork so that I'm having more money come in in retirement, not less money. And then obviously, if you choose to continue to work, you're going to have earned income and then other withdrawals from retirement accounts, uh, especially those things called retire, excuse me, required minimum distributions that the IRS forces you to take. If you don't need the money in those tax deferred accounts, all of those things can improve your potential. Essential, um, lifestyle in retirement because you have taken the steps to create more than just the normal Social Security and maybe 401 K type of income stream. And, you.

Speaker2:
Know, Mike, I mean, some people, they might listen to us and say, okay, well, you know, investing in a fixed indexed annuity. How exciting. Um, they they think it's boring. They'd rather try their hand at something like, I don't know, real estate investing or, um, doing something else that's might get their, their blood going a little bit more during retirement.

Speaker3:
You know, when we're talking about retirement income, I think things that generate safe and consistent income that you can never outlive. Boring is better if you if you're talking about that with me. Right. Um, it's not so bad. And when we find that a lot of security minded spouses like the idea of consistent income that they can never outlive, and they can count on month after month, year after year. And so with a fixed indexed annuity, think about this. You don't have to deal with tenants, okay. You don't have to deal with people who are trashing your rental property or just refusing to pay and squatting in your, on your, uh, in your property, um, to generate a monthly return. And so, you know, all of those things lead me to believe that, you know, if, if you want to do real estate, hey, great. Do real estate, I do myself. But I also have a plan for fixed index annuities to make sure that if the time comes or when the time comes, that I don't want to deal with tenants anymore. I have a reliable multiple streams of income.

Speaker2:
704 5601573 is the number to get in touch with Mike Zeno and talk about all of the things that we've been discussing today. Explore those for you and see if they fit into your particular situation. Money matters with Mike comm is the website. Well, Mike, that's going to do it for this edition of the show. But as always, sir, I thank you for all of your insights that you share each and every week. Sir. We'll do it again next time.

Speaker3:
We will do it again. And thank you, Matt, for everything that you contribute to the show as well. But most importantly, thank you to each and every single one of our listeners. Whether you're listening to us live on the radio or anywhere globally on podcast, without you guys, we don't have a show. So thank you for your continued support. I look forward to continuing to answer all of your questions on social media and discuss different topics as we go, but 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.com 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:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

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