Why Income Beats a Big Number: Planning Your Paycheck for Life

6.20.25: Audio automatically transcribed by Sonix

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

Speaker1:
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.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. 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 people? Welcome to the show where we dive into the strategies, the insights, and the tools you need in order to secure a confident and stress free financial future. I'm Mike Zeno, and my mission is to help you protect your nest egg, outsmart retirement risks, and live the life that you've worked so hard to achieve. Whether you're nearing retirement or already in it, we're here to guide you along every step of the way. And boy do we have a ton of great information for you today. On today's show, we are going to discuss income versus having that one big number. And we'll show you why your income strategy is the key to your retirement success. As always, I have the distinct honor and privilege of being joined by the one, the only. My co-host and producer extraordinaire, Mr. Matt McClure. Matthew, how are you today, sir? Well, you know, Mike, it's the.

Speaker1:
Weekend, so I'm doing great.

Speaker3:
That's awesome.

Speaker4:
I mean, that's that's about all I can say about that, because, you know, it's, uh, when you're working for a living, you live for the weekend, I guess.

Speaker3:
And speaking about working for a living. If you didn't listen to last week's show, go back on the Chronicles of YouTube or at Money Matters with Mike and listen to last week's show. Because, man, there was a ton of great information on that one as well.

Speaker4:
Ton of great info. And you of course, can get all of the past episodes on the website.

Speaker1:
Money matters with Mike. Com your favorite podcast app as well? Uh, that's where you can find us also. You know, as Mike said on YouTube, you can connect with him on Facebook. Just search for Money Matters with Mike there. And boy, you know, there's a lot of great information, all of those places. There are a lot of video highlights, past episodes of the show. And then of course, you can reach out to Mike via the website Money Matters with mike.com to schedule that 100% complimentary meeting with him today. Uh, listeners can meet regarding their own financial situation with their family, maybe their business. There is absolutely no obligation. Uh, it's really, you know, all about helping listeners and helping folks who, you know, need help with their retirement plans. And so, once again, the website is Money Matters with Mike. Com and you can also give him a call (700) 456-0157 3704560 1573. Well, as we've been saying Mike, a lot to come up here on the show and just a half hour to get to it. So how about we do it? So we got an income plan. That is what we are going to focus on for most of the show today. Do you actually have an income plan and if not, why not and why you need one? Uh, we got a way to protect income for life as well. We'll talk about that. We'll also go into the three bucket strategy. You know, planning for safety, income and growth, all for your future. It's like that short term, medium term long term kind of investment kind of strategy. Here. We'll talk about all of that and much more. First though, let's get some inspiration for our conversations. And we'll do that with our quote of the week.

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker1:
And this week's quote comes from Earl Nightingale, who said this. As in all successful ventures, the foundation of a good retirement is planning, huh? Boy, if you fail to plan, you plan to fail. Right?

Speaker3:
That is not just a clever turn of phrase, right? It is a universal truth. I mean, think about this. Nobody accidentally builds a thriving business. Nobody stumbles their way into a championship, and no one wakes up one day and magically finds themselves financially free in retirement. Every single successful venture starts with a solid plan. And guess what? Retirement, folks. That's no different.

Speaker2:
Hungry for something that you on? Here's some meat on the bone.

Speaker3:
I meet all people all the time who have worked for 30 years, 40 years, 50 years. I mean, pouring their heart and their soul into their families, into their jobs, raising their families, I should say, and doing everything right except for one thing. They've never actually created a real plan for what comes next. Yes, they have savings in a 401 K, maybe some Social Security coming in, but beyond that, there's no income plan. There's no tax strategy. There's no plan for inflation. There's no plan for the rising cost of health care or the possibility of outliving their money. And here is the very hard truth, folks. Hope is not a plan. Winging it is not a retirement strategy, and a pile of money without a purpose is just a source of anxiety. And that's why I love this quote by Earl Nightingale. He said, it's not the finish line. It is the next big venture. And just like starting a business, it actually takes vision. It takes intention and it takes structure. And that is what I do for my clients every single day. I sit down with real people, with teachers, with nurses, with mechanics, with federal employees, with engineers, with business owners, people who have done the hard work and just want to make sure that the next chapter of life is their best chapter.

Speaker3:
So we build personalized plans that cover every single angle predictable lifetime income, protection from market downturns, smart tax strategies, legacy and estate planning, and above all, peace of mind. Because when you know what the plan is and you know how the plan is working for you, you can financially enjoy the freedom that retirement is supposed to bring. And look, folks, I get it. Retirement planning can feel overwhelming. You're juggling a dozen moving parts. When to take Social Security, how to handle your required minimum distributions, how to make your money last, and how to navigate all of the what ifs that come with getting older, right? But that's why partnering with somebody who knows how to bring it all together, right, is so valuable. So if you are approaching retirement, or maybe you've already retired but never really put a full strategy in place, I want to invite you to reach out. Come sit down with me for a no cost, no obligation retirement planning session, and let us take a look at where you are, where you want to go, and build a roadmap that gets you there safely, confidently and securely. Because I want you to remember this the foundation of a good retirement is planning. Let's build that foundation together the right way.

Speaker1:
Absolutely right. And call Mike to get that process started. 7045601573704560 1573. You can also go online to the website its Money Matters with mike.com. Or again, as I said at the beginning of the show, go to Facebook, search for Money Matters with Mike. You can reach out to him there as well. Send a carrier pigeon pony express however you need to do it. Just get in touch with Mike for that free consultation. And yeah, absolutely free of any cost or any obligation to start coming up with your plan. And that is really what today's show is all about, planning not only for for growth or for building a big nest egg, but also planning, more importantly, in retirement for income. And, you know, Mike, really focusing on growth alone isn't the answer. That's really kind of the big takeaway from today's show.

Speaker3:
Yeah. No doubt. I mean, we're going to talk about the need for retirement income planning because, you know, retirement itself is a significant life transition. And ensuring financial security during that phase requires more than just a well-performing investment portfolio, right. While investment growth is crucial. Growth alone cannot guarantee a stable and sustainable income throughout your retirement years. So that's why a comprehensive retirement income plan is absolutely essential to help you manage and then mitigate various financial risks that you might face. It'll help you align your financial goals with your lifestyle, and then it'll be able to adapt to the unpredictable nature of life, right? Because life tends to throw curveballs inevitably so.

Speaker1:
And, you know, I mean, that really is so important to to keep in mind. To have a plan that's going to be able to account for whatever could happen, as you said, the the what ifs. You know, in life there. And let's talk about the kind of the role of a retirement income plan. I mean, it's really a structured approach to managing your finances during retirement. It's kind of what it boils down to. But what are the different kinds of, I guess, aspects or Risks that the retirement income plan should and hopefully does cover.

Speaker3:
Yeah. So I mean it's going to help you, number one, minimize those risks. Right. By identifying and addressing whatever the key financial risks are. A retirement income plan can provide a safety net that helps you protect your savings, as well as mitigate longevity risk. It'll, you know, help you determine what your expenses are going to be in retirement and then, more importantly, how you plan to fund those expenses. So when you're able to understand your income from all different sources and how that relates to what you've got coming in and what you've got going out, folks, that's called cash flow, right? A solid plan will help you identify any of those gaps and develop strategies to fill them. Okay. And then, of course, you know, when we're talking about developing those strategies not only for income but for withdrawals and then continued investing. You know, a well thought out plan ensures that all of your investments, all of your income sources and your withdrawal strategies are aligned with your financial goals and needs. And then, of course, we want to help you stay on track. So we encourage the regular review and adjusting of your plan so that you can adapt to all of your changing life circumstances and maintain your desired standard of living. Annual reviews, at a minimum with a financial professional, can ensure that your plan remains relevant as conditions change within your life.

Speaker1:
Yeah, as we often say, it's not a set it and forget it type situation. You have to be willing and and ready to make any changes that might be needed or required. And of course, working with a financial pro is the best way to do that. So you make sure you make the right changes. You sort of you take the emotion off the table. Because when life does throw you those curveballs, it's easy to get emotional about your situation. I kind of freak out and make decisions that are not rational in that given situation, right? I mean, you want to take that definitely off the table and stay focused on on the goal. Keep your eyes on the prize.

Speaker3:
Yeah. And I think this is this is really important as folks age, you know, especially in the situation where we're you have a couple, right? A married couple or a partnership situation. And one of the spouses passes away. Right. That's not the time to have to scramble and figure stuff out, right. You want to spend that time grieving. You want to spend that time not having to worry about your money and how you're going to move on through life financially. That is just one highlight of why it's important to have that plan in place prior to that event eventually happening.

Speaker1:
Yeah, absolutely. Right. And so, you know, you want to plan as well for? Because one of the things that we can't predict. You know, we're talking about the unpredictable things that happen in life. One of the things that we can't predict with any, you know, 100% accuracy in a way, is how long you're going to be around. So, you know, having a guaranteed income source that's going to be there for as long as you live. Super, super important. And, you know, I mean, one of those streams of income should be obviously Social Security. But then there's another way to get yourself some guaranteed lifetime income also.

Speaker3:
Yeah. I mean, in fact, there are multiple having as many guaranteed streams of income, you know, will will just make your financial situation that much stronger. So if you're fortunate enough to have a pension, right, that's great. If you served in the military and you have a military retirement or a, you know, God forbid, a disability VA, you know, retirement in there, those are guaranteed sources of income. But then, believe it or not, you can create your own personal pension by utilizing an annuity, right? They can provide both stable and predictable cash flow, therefore reducing the volatility of your total retirement income. And they offer a valuable longevity hedge because they ensure you have a steady income, even if your portfolio experiences losses or if you live longer than expected. Why? Because, well, the income keeps on flowing. Even if you live to be 90, 100 or even 120. So I mean, having as many guaranteed income sources, especially adding a personal pension through the use of an annuity. Um, I am a huge advocate and fan of.

Speaker1:
Yeah. Absolutely right. You know, this is a personalized strategy, as are all of the strategies that you use to work with folks. It's personalized planning that takes into account any life changes. That might be, you know, down the road that, of course, we can't predict. Crystal ball is broken still they can't fix it. And so, you know, this personalized retirement income plan has to be kind of as as flexible as the individual. And just, you know, talk about a couple of things here that it should be regularly reviewed and adjusted to do.

Speaker3:
Sure. I mean, just think about important events that happen to you. You buy a home, you have a child, you get married, you have grandkids, you get older, you have health issues, your family needs, or any changes in your living arrangements, whether you have to upsize or downsize the loss of a spouse. All of these things can significantly impact your overall financial situation. Your plan needs to be able to adapt to each and every one of those, you know, events that I just described.

Speaker1:
That's absolutely right. And it's got to, of course, align with your risk tolerance, your time horizon, all of those things. And if you need help and even just, you know, knowing what all of those things are and making sure that your plan is adjusted for you and personalized for you folks, I would encourage you to reach out to Mike Zeno, and you can do that by giving him a call 704 560 1573 (704) 560-1573 or go online to Money Matters with Mike. Com you can schedule your complimentary consultation and he can help you maximize your after tax income in retirement, and also help you come up with a plan that implements what we like to sort of refer to as like a three bucket strategy. That's one of the things that we will talk about on occasion here. And what do we mean, Mike, when we say the three bucket strategy folks are like, well, I got a couple of buckets sitting out in the garage. Do I need to go get those, you know?

Speaker3:
No, I mean, by utilizing this approach, it helps folks navigate market fluctuations while providing steady streams of income, which ultimately allows them to enjoy their retirement with peace of mind. Right. So the retirement bucket strategy, which is often referred to as a three bucket strategy, it's a financial planning method that kind of categorizes your assets into three distinct buckets, if you will, based on the time horizon for needing that money, as well as your risk tolerance. And each of those buckets serves a specific purpose and is designed to cover different stages of your retirement. So think of the short term bucket first, right? This bucket is focused on low risk assets with short maturities such as, you know, uh, cash savings accounts, CDs, money market accounts or very short term treasury bills. And the primary goal here is to ensure that you have enough funds to cover those immediate living expenses for the first 1 to 5 years in retirement, and by keeping these funds in low risk liquid assets, you can avoid the overall impact of market volatility on your immediate financial needs. That's the short term bucket. Matt, what do you think of that.

Speaker1:
Yeah. You know I mean that's going to be your of course as you say low risk uh kind of kind of bucket there. And you know, a lot of it is going to be, you know, money that you might need in the short term, especially if it's in a savings account, money market account, that type of thing. So it's going to be a lot of it, at least liquid so that you can get to it in case of things like an emergency or, you know, some big expense that you are going to have coming down the line in the short term. Um, so, yeah, I mean, that is definitely one bucket of the three. And a very important one, obviously. So then, if it's not in the short term bucket, uh, maybe it'll be in the intermediate or medium term bucket. So what is that bucket consist of.

Speaker3:
That mid term bucket is designed to cover expenses for years maybe five through ten of your retirement. And these investments here are typically a little bit more conservative maybe to a moderate risk such as, you know, maybe some fixed indexed annuities to provide an income in years to start income. I should say in years two through ten, maybe you've got longer term CDs, brokerage CDs, multiple year guaranteed annuities, um, maybe even some large cap value stocks that are able to provide dividend income, uh, other income funds, real estate investment trusts, all those things. Their aim is to, uh, is to match or to slightly outpace inflation without taking on too much risk with your portfolio.

Speaker1:
Yeah. And that's one of the kind of things that we'll see here as we go through all three of the buckets is that, you know, with that short term bucket, probably the lowest risk, the medium term bucket, kind of moderate risk in that. And then maybe the most risk because you're looking at a longer time horizon here is in the long term bucket. And that is, you know, the one that you've got the longest amount of time to make up for any losses. So that's why it's going to be the most risk. But you know, with risk obviously comes reward.

Speaker3:
Right. So I mean, you're talking about a time horizon of money that you're going to need after ten plus years. Right? So that's going to include things like growth stocks, small cap stocks, emerging market stocks, maybe some high yield investments, index funds like the Nasdaq or the S&P 500. And the growth from that bucket is used to refill the short term and intermediate term buckets, which ensures a continuous flow of income.

Speaker1:
Yeah. Absolutely. Right. And so talk about now after we've been through the the three buckets, the short term, that medium term and then the long term talk about kind of the benefits of this strategy. Because I think people might be listening and saying, okay, well that that sort of, you know, makes sense that we would you would have those three buckets. I understand the types of things that go into them. But why like what are the benefits of having a strategy like this?

Speaker3:
I think the most significant advantages to the bucket strategy is its ability to protect against this risk. That's called sequence of returns risk. And that risk occurs when the market experiences a downturn early on in your retirement, potentially causing you to lock in your losses and deplete your portfolio that much faster. So by having a buffer of low risk assets in that short term bucket, you can avoid selling investments at a loss during market downturns. I mean, just think back, you know, to 2008, somebody that retired in 2007 and then saw multiple years of market decline. Without this type of strategy, their money would never last. As somebody who retired, maybe in 2010 and then saw the longest bull run in the history of the market. So the bucket strategy also provides a very clear and predictable way to manage your retirement income. Because it is easy to track, it is easier to manage, which makes it much less stressful overall to manage your finances during retirement. Okay, this organized approach, it simplifies complex investment and income issues, which allows you to focus on enjoying your retirement.

Speaker1:
Yeah. That's right. And one of the things that we often talk about with any of the subjects that we cover here on the show is that it can be customized, right, to fit your individual retirement goals and your personal sort of preferences and risk tolerance. All of the things because it's all about you and what's best for you, not what's best for the neighbor down the street or your and or your uncle, you know?

Speaker3:
Yeah. I mean, whether you have a conservative risk tolerance, an aggressive risk tolerance, you know, the point is, is that the bucket strategy can be adjusted to suit your needs. And that's particularly useful. All right. That flexibility is is as your financial situation and the market conditions change over time.

Speaker1:
Yeah that's right. And the only thing constant is change of course. So then the question becomes all right so you know we've now we've covered the bucket strategy. We know what the benefits are. So then how do I go about implementing the retirement bucket strategy.

Speaker3:
I think the first step is the inevitability of estimating your future cost of living, which can be difficult. Right. So you might consider using an expense tracking app just to get a much clearer picture of your current spending. So what does that mean? That means track every penny you spend and don't just do it for a week. Do it for, you know, 3 to 6 months so that you know where you are spending your money. I tell people all the time, you show me your statements, whether it's your bank statements or your credit card statements, and I'll show you where your priorities lie. All right. That's going to serve as a baseline for your retirement expenses. And then based on those estimated annual expenses, you can determine how much you need to fund in each bucket. For example, let's just say you need $50,000 a year to support your standard of living. In addition to, you know, Social Security and any pensions that you may have. Right. Your immediate bucket, let's just say that's years 0 to 5. Well, five times 50 is $250,000 that you need to have in cash or cash equivalent. Then the immediate or intermediate bucket, which is year six through ten. That's a, you know, another, uh, $300,000. And that's based on 40% allocation of the remaining funds. And then your long term bucket for years 11 plus. So let's just say that, you know, $50,000 times 11 years. Well, there's $550,000 that you'll need in that long term bucket just to make sure you have enough money to, you know, live the rest of your life at the same standard of living.

Speaker1:
Yeah. That's right. And I mean, it takes planning. And that really is what it's all about, you know, making sure that you have set aside the things that you're going to need to have and that they are in the appropriate buckets. And, you know, talking about, um, you know, coming up with a plan if it seems overwhelming. Folks, the good news is you do not have to go it alone. Mike Zeno would love to help you come up with a plan, and you can go to the website Money Matters with mike.com to learn more and get started with your strategy and your plan today that's tailored just for you. Money matters with mike.com. You can also give him a call (700) 456-0157 3704560 1573. And, um, just about, uh, a couple of minutes here. We got left in the show, Mike. But let's talk about, you know, what you provide listeners when they give a call to the number or they go to the website like, what is that that process kind of like if somebody reaches out because there's a lot that goes into a retirement plan, obviously, as we've been saying, how do you how do you start tackling it all?

Speaker3:
That's a great question. Well, the first meeting we're going to have is more of a discovery meeting, right? I'm going to find out who you are, what you've got. You know, what you've all about, what your goals are, your plans are and and kind of the starting point that we enter into the GPS, right? And ultimately, we figure out where you want to go and what is the best route to get there. So again, these are no cost to our listeners. There's no obligation. But what we're going to do is compare your current situation to what's possible when you work with us. And those can do deal in everything from uncovering what you're paying in fees, unnecessary fees, cut those costs from your IRAs, from your 401 or any other type of retirement savings accounts. We can help you with Social Security maximization. We can help you with Medicare planning. We compare all of these things to what's possible when you work with us. Because we don't take your money for granted. You have busted your hump over the entirety of your working career to save and accumulate this nest egg. We just want to give you that peace of mind, knowing that your money will last at least as long as you do.

Speaker1:
Absolutely correct. And once again, folks, the website is Money matters with Mike. That's money matters with Mike. Com or calling (704) 560-1573. Well Mike that's going to do it for this edition of the show. It has come and gone quickly sir. But as always thank you so much for everything that you bring to the table. And we'll talk to you again next time.

Speaker3:
Matt, thank you for what you bring to the table. But most importantly, thank you to each and every single one of our listeners, whether you're listening live on the radio in the Carolinas or anywhere globally on podcast without you, we do not have a show. So from the bottom of our hearts, thank you, thank you, thank you. If you learned anything today, share it across the socials. Please let people know that there are alternative methods of learning and whatever you're doing this weekend, we hope you enjoy it to its fullest extent. As always, make it a great day!

Speaker2:
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 704560 1573. That's (704) 560-1573. 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 of the property of the respective owners. Amaral 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.

Speaker1:
Remember, all of Mike's listeners receive a free financial consultation just for listening to the show. Visit Money Matters with Mike. Com to learn more and schedule an appointment. Thanks for listening to Money Matters with Mike and subscribing wherever you listen to podcasts.

Speaker2:
Nationwide's peak ten fixed indexed annuity is designed to help protect and grow your savings to generate income you can never outlive. Peak ten also has an optional rider that offers an immediate 20% bonus, based on your principle applied to your income benefit base. Call us now at (700) 456-0157 three. That's (704) 560-1573. Guarantees and protections referenced within are subject to the claims. Paying a penalty of nationwide life and annuity insurance company. Nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio.

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