Why the Small Things Matter When Planning for Retirement

9.13.24: Audio automatically transcribed by Sonix

9.13.24: 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. 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 people? Happy Saturday, it's Mike Zeno coming to you from Fort Mill, South Carolina. Welcome to Money Matters with Mike, a show that is designed to give you plenty of meat on the bone to chew on as far as financial information that you can use each and every single week to help you prepare for a much better retirement. As always, I do have my one and only co-host, Mr. Matt McClure. Matt, how are you doing today, brother?

Speaker1:
I'm doing great. Mike. You know what? It's football season and I know you're you're in the spirit of things this past couple of weeks, here I am.

Speaker3:
My dogs are two and oh, we're soon to be three and oh after today's game. So I am excited. Sorry to all you Clemson fans out there.

Speaker1:
Yeah there we go a nice, nice apology to soften the blow of that that loss. Um I was happy to.

Speaker3:
See them bounce back. I really was happy to see them bounce back.

Speaker1:
There you go. There you go. Absolutely right. You know, unless they're unless they're on the field taking on the dogs there.

Speaker3:
That's it. You know I root for Clemson in the ACC. Um and I root for South Carolina when they're not playing the dogs. Right. So I think that that SEC allegiance is is there no matter who they play. But I have nothing against Clemson except when we play them.

Speaker1:
That's right. That's an important caveat. Yeah, just friendly competition. It's 100%. Absolutely. Right. Well, a lot of great stuff to get to here on the show as far as financial info goes this time around preparing for retirement, it is time to do that in 2024. No matter what your your situation is in life, no matter where you are in life. And that's going to be kind of the big main focus of the show here today. Mike. And, you know, I think that it's important to for us to just say right off the top, if people feel like they're behind, if people feel like they need some help along the way in doing that and preparing for their retirement, you know, there is help that is available. Mike Zeno, this guy right here who is the host of this show, is the one that you can turn to for that help.

Speaker3:
Yes, there is no doubt. I love talking with people about what their dreams are and what their goals are. And if there's any way that I can help you make your dreams become a reality, then all you have to do is pick up a phone and call (700) 456-0157 three. And folks, that rings my cell phone. My personal cell phone. This is the only telephone number that I've had since 1997. So if you call me and I don't answer, which is rare, but if I don't answer, leave me a voicemail and I'll get back to you as soon as I'm able.

Speaker1:
And that number once again. (704) 560-1573. You can also go to Money Matters with mike.com. That's the website for the show. You can sign yourself up for a free consultation there. We'll have more about that as the show moves along. The podcast is available wherever you get your podcasts as well, and you can check us out on YouTube. Just search. Money matters with Mike there. Same thing on Facebook as well. All right. So let's continue on now and actually get revved up here with our discussions about preparing for retirement this week, and we'll do that with our financial wisdom. Quote of the week.

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

Speaker1:
And this week's quote comes from one of the most famous founders of the country, Benjamin Franklin, who said this. Beware of little expenses. A small leak will sink a great ship. Yeah. That's right. I mean, you know, it's if you have that small leak, you know, chances are it may go unnoticed at first, but then as time goes on, that's going to that's going to sink that ship. Matt, I.

Speaker3:
See so many people that I meet with that have so many small leaks. And Ben Franklin was absolutely correct in saying that small leaks can sink even a mighty ship. Okay. It highlights the idea that seemingly minor, insignificant expenses can accumulate over time and cause significant financial harm.

Speaker2:
Hungry for something to chew on? Here's some meat on the bone.

Speaker3:
So when we talk about retirement planning, this means that, you know, small, unnecessary costs can gradually erode your savings, which can potentially jeopardize your financial security when you're going to need that money the most in retirement. So if we talk about in terms of retirement planning, let's look at the compound impact. Those small reoccurring expenses can add up over the years. And if those leaks aren't addressed, they can reduce the amount of money that you have available to invest or save for retirement. And over time, the impact of those expenses can compound, which leads to a much smaller retirement nest egg than you originally had anticipated. There's also this thing that's called opportunity cost. Money spent on unnecessary small expenses could have been invested into retirement accounts, where it could grow over time, and even a small amount saved and invested regularly can accumulate because of the power of compound interest. So then there's another thing that's called budget disciplined. And being mindful of small expenses helps instill really good financial habits, ensuring that you maintain the discipline in your retirement planning. Okay. It encourages regular review and adjustments of your budget in order to prevent financial leakage. And so there are some common types of leaks in retirement. And I want to give you probably the three most common. All right. The first one folks is are subscription services. So if you're paying for multiple streaming services, you're paying for gym memberships or other subscription based services that are underutilized.

Speaker3:
Then you need to regularly review those subscriptions and cancel those that you don't use often enough, or could possibly do without. Even saving 10 to $20 a month on a subscription can make a difference. When you're talking about carrying that monthly savings over decades in retirement. So that's the first one that's pretty easy to fix. The second one is credit card interest. Okay. Carrying a balance on your credit card and paying those high interest rates, which can be a significant drag on your finances. Well, the fix there is just focus on paying off credit card debt as quickly as possible to avoid the high interest payments that could otherwise be saved or invested for the future, and obviously by paying the statement balance each and every single month that will eradicate any unnecessary interest payments. Okay. And the third, and this one I'm guilty of even still today, and I think almost everybody is are those impulse purchases regularly buying items just on a whim, like daily coffee runs or unnecessary gadgets, or going out to eat really frequently. That's mine. Okay. Um, the fix there is to create and stick to a spending plan that does account for discretionary spending, and then consider redirecting some of those funds into your retirement savings. So by plugging all of those leaks, you can ensure that most of your money is working towards securing a comfortable retirement as opposed to being lost to small, avoidable leaks or expenses.

Speaker1:
Yeah. That really hits home, especially a couple of those points there for me, Mike. You know, the whole the the the eating out thing, um, that is, you know, just kind of a guilty pleasure and it's and it's easier, you know, a lot of times to just, oh, let's go down the street to whatever restaurant then, then try to cook at home. Um, but, you know, cooking at home, a lot more cost effective. Um, and then the other thing are those subscriptions. I mean, you know, you can sign up for something and then just literally forget that that's automatically coming out of your checking account or God forbid, going on the credit card. And then that's, you know, sitting there as part of that balance that's being carried over month to month. And the interest is compounding. Like it's just very, uh, can be a very dangerous thing.

Speaker3:
It can, you know, one of my guilty pleasures, the wife and I, uh, my wife's a, uh, she's the director of music at a at a local Christian school. And so she goes to bed much earlier than I do because she gets up much earlier than I do. So one of our things that we like to do is after dinner, we'll watch an hour or two of television together. It's kind of our thing, right? Then she goes to bed and I either go back into the office or I flip it to something else that I want to watch. But as I'm scrolling through all of our options, you know, we've got, um, what? Max? We've got, uh, Netflix, we've got, um, Amazon Video, we've got Hulu, we've got Apple TV. And I started looking at all these stuff. I'm like, how much is all this costing me on a monthly basis? So, you know, besides eating out, those subscriptions hit home for me as well.

Speaker1:
Yeah. And it's easy to just have several of them that that just really add up. Um, and they're, they're month to month. So. Yeah. Great. Um, you know, great to call attention to that because as you say, those small leaks, they can sink even the greatest of ships out there. And your financial ship needs to have all those holes plugged. Um, and then, you know, that's a great thing to do and to kind of lead us into our discussion about preparing for retirement. And one of the things that you wanted to emphasize today as we talk about preparations for retirement is that you really can't do it the same way that your parents did, or certainly the same way that your grandparents did, right?

Speaker3:
You can't. Right. First off, they didn't have subscription services back then. Okay. So you can take that out of the water that your grandparents most likely didn't have credit cards at the time. They might have had a bank card, but not credit cards at the time. So yeah. Times have definitely changed. And, you know, especially back in, you know, the depression era when my grandparents were were alive, you didn't go out to eat because there wasn't enough money to go out to eat. Heck, when I was a child, if I got to go out to McDonald's, you know, every once in a while, that was like, oh my gosh, look at us. We're going to McDonald's. And now people are, you know, driving, uh, you know, to a fast food or quick serve restaurant every single day for lunch kind of thing. Right. And going out 2 to 7 nights a week for dinner when it is just. Absolutely. Um, you know, much more cost effective to prepare meals at home and then either take them to work or just cook them, you know, for dinner. So that, I think, highlights the reasons that you cannot save and prepare for retirement the same way that past generations have done.

Speaker1:
Yeah, absolutely. And, you know, that's one of those things you mentioned a couple of them there actually, that have changed over the years. Another thing that's changed is the retirement age too.

Speaker3:
Yeah, I mean, in the past, many retirees expected to stop working at a fixed age, often somewhere between 55. Okay. Which is almost laughable now. Uh, and 65. Well, nowadays, retirement age I think is much more flexible with some people working longer while others may choose to retire much earlier. And so I think the question for our listeners is, you know, when do you want to retire? That's the most important question. And so that we can build a plan around your goals and your aspirations, and you have to determine that date.

Speaker1:
Yeah. And that's part of, you know, as we like to say here often, you know, coming up with that smart vision, right, for your retirement. And that's part of it, you know, that that sort of that date that's circled on the calendar. What is that date going to be? And, you know, I mean, another important, you know, sort of time based consideration that goes kind of hand in hand with this is the fact that people are living longer these days as well.

Speaker3:
Yeah. So people are definitely living longer, which means that their retirement savings must last even longer. So that puts a strain. It increases the need for more significant savings and potentially more predictable investment strategies. So one of those strategies is, you know, multiple sources of guaranteed income, folks, do you have guaranteed income as part of your retirement plan? If not, we can definitely help you with that. The problem is, is that most people just concentrate on accumulating their nest egg building, building, building with very little thought for how to preserve and distribute those savings across the entirety of their retirement. So if you don't have a guaranteed income plan, then we need to talk 704 5601573 or reach out on the web at Money Matters with mike.com.

Speaker1:
Yeah, the guaranteed income part is so important to talk about for the reasons that you just mentioned, and also for the fact that, you know, a lot of people in the past had a guaranteed income for life as part of a pension. You know, you work for a company for 40 years. You get the gold watch and the pension when you retire. Right. And you and you knew that was going to be there. Those have pretty much gone the way of the dinosaur.

Speaker3:
Yeah, they have the dinosaur, the dodo, whatever you want, whatever you want to call it. Right. Only 13.5% of all American companies are offering a pension. So if you are one of the fortunate people that has a pension, for an example, if you work for local, state or federal government, consider yourself lucky because those plans have become much less prevalent and that shifts the responsibility for retirement savings away from the companies and onto the individuals. And so many of our clients actually enjoy personal pensions that we have helped them to establish. It is something that interests so many of the people that we talk to. And if it interests you, we encourage you again to pick up a phone and give us a call.

Speaker1:
Yep. And that number once again, (704) 560-1573. And you know, when we're talking also about income, we can't, you know, talk about retirement income without mentioning Social Security. But there are a lot of challenges that go along with that of course, as well there are.

Speaker3:
And so concerns about the program's long term sustainability. Um. They've increased. Okay. A new report finds that Social Security recipients are going to face a 21% cut. Okay, cut in benefits when a crucial trust fund that's on pace to be depleted in the year 2033. Folks, that's only about eight years. And what, three months away when that trust fund runs dry. And so neither presidential candidate we saw the uh, the debate this this past week. Neither presidential candidate has articulated a plan to stabilize the Social Security program. And that, folks, is a problem. Okay, so Social Security is currently paying more in benefits than it receives in payroll taxes. And therefore, that's why the old Age and Survivors Insurance Trust fund. Or if you look at the Osodi um, that right there is running dry. And that's the reason.

Speaker1:
Yeah. That's right. I mean, you can't be, you know, just as we talk about, you know, your personal budget, as we mentioned earlier, as you mentioned earlier, Mike, in getting that in check. Um, you know, you can't survive if you've got more going out than is coming in. Same thing with this, uh, you know, Social Security trust fund, the old age survivors Insurance trust fund, uh, dealing with that same sort of a thing. And then, you know, also in retirement, you've got to deal with health care costs. Those are huge. Yeah, they.

Speaker3:
Are especially, um, you know, if people are living longer, the longer people live, the greater propensity to have health care issues and the longer people live, the more health care costs are going to go up. And so all of these things, if you don't have part of your overall retirement financial plan put in place to address health care costs, then you guys are missing a Significant portion of the planning puzzle, and we can help you with that.

Speaker1:
Yeah, and you need all the pieces of the puzzle to be able to put it together. And not only can Mike Zeno help you pick those pieces up off the floor, maybe he can help you put them all together and make that picture nice and pretty for your retirement. No matter what happens. And here's the thing. You know, there's so much in life that we can control. One of the things that we really can't is what happens in the greater overall economy, right? I mean, control the things. You can you can prepare for whatever, you know, you put contingency plans in place and that sort of a thing as part of your retirement plan. And that's something that's great that Mike Zeno is wonderful at. But say, one of the things that we haven't been able to control is inflation. You know, I mean, I can't magically go to the grocery store and make eggs cost $0.99 again by snapping my fingers, you know, so so you've got to have a plan for that as well.

Speaker3:
It amazes me how the government takes, you know, a very, very long time to be able to. And I'm using air quotes control inflation, right. It is definitely come down from its peak of over 9%. And that's the 9%. If you look at the CPI, if you look at the way that, um, inflation is really calculated, the shadow stats behind the number that the government likes to wrap up in a nice little gift and put a bow on it, uh, if you believe that that's the actual inflation, um, then I've got a, uh, you know, a bridge and an oceanfront property in Arizona that I'd like to sell you. Okay. Ongoing inflation has eroded purchasing power of money over time, which makes it necessary to save even more and invest more wisely to help combat its effects on your retirement savings. So you mentioned, you know, something that I say all the time control the controllables, right? If you can plan for inflation and have that built into your plan so that no matter what life throws at you or the economy throws at you. At least you are somewhat prepared. If not totally prepared, then that is a much better situation than not.

Speaker1:
Yeah. Absolutely. Right. And, you know, I mean, one of the things that I want to encourage our listeners to do, if you have concerns, of course, about inflation, which we all do, if you have concerns about rising health care costs, which I'm sure most of us do, if you have concerns about Social Security, any of those things is to get in touch with Mike Zeno and and come up with that plan, have him work with you, not not against you, not just, you know, working kind of in the background without your input, but working together on coming up with a plan that's best for you in your particular situation, and customizing a retirement plan for the people you work with. Mike, that is really the bread and butter of what you do every day.

Speaker3:
It is. And again, if you, you know, have not had a review of your plan or God forbid you don't have a plan, or you would just like to get a second set of professional eyes viewing your plan. Any of those instances right there, we can provide a complimentary consultation, and all you have to do is pick up a phone and call (700) 456-0157 three or visit. Money matters with mike.com to book your consultation. So, you know, so many of our clients have questions about Social Security when they first meet with me. And here's how we help people navigate one of the most important decisions regarding their retirement folks, you guys are likely asking yourself some of these questions. Okay, number one, can I count on Social Security to be there throughout my entire retirement? When should I take Social Security? Why would I wait to take Social Security? And what happens to our benefits when my husband or wife or spouse passes away. Well, here are the facts. Okay. In 1950. Let's go back in time. Some there were more than 16 workers for every one Social Security recipient.

Speaker3:
And that's direct from the Social Security Administration. Today, there are almost three workers per recipient, and it's headed in the wrong direction. Okay. Meanwhile, the national debt sits at 35 plus trillion with a capital T dollars. Okay. And the bottom line is that you cannot and you should not count on Social Security as your only source of income in retirement. And you also need a plan for when one spouse passes away and you lose one of those two benefit checks, which could account for anywhere from 30 to 50% of your money coming in each and every single month. So if you are tired about worrying about your future and you're ready to work with somebody who sits on the same side of the table as you, then pick up a phone and give us a call or go to the website. I genuinely love meeting our listeners and helping them on the road to their retirement. And so all you got to do, like I said, 704 5601573 or go to Money Matters with mike.com and let me help you stabilize and then strengthen your retirement plan today.

Speaker1:
You mentioned something there, Mike, that I think that in the last few minutes of the show here, I'd like to sort of focus in on for a few. And it's something that I don't think people, um, want to consider because it's a difficult thing to to talk about or to think about, and that is the loss of a spouse. But you mentioned that, you know, that one. Uh, check. Social Security check. Going away. There are some other considerations as well, though, when it comes to preparing for the loss of a spouse. Um, talk about that. And just just the importance of being prepared, no matter the fact that it's a difficult thing to even think about, let alone actually discuss.

Speaker3:
Yeah, nobody wants to think about that. But, you know, it's important to understand that the large majority of married couples are going to go through this at some point in their lives, because it is not common for couples to pass away at the same time. So, you know, besides losing anywhere from a third to a half of your Social Security, uh, income benefits because the smaller of the two benefit checks goes away as soon as the Social Security Administration and the bank receive the death certificate, those additional deposits that you were receiving are going to stop. And then the year after the spouse passes away, you're going to face a higher income tax bracket as a single filer, which means that you're going to need to also file taxes for their spouse in the year of their death. Um, which means that they're going to lose a tax deduction because they're no longer married. And the Social Security, as a result, will be taxed at a higher rate. Their Medicare surcharges will go up because they are now in a higher tax bracket, potentially. And they must face all of these new financial challenges right after losing their partner in life. So widows or widowers who meet with me will never have to face these challenges alone, because our clients know that we are there for them during the good times as well as the bad. So if you or anyone you know has recently lost their spouse or is experiencing the burden of the widow's tax, then please have them call us or share our information. Or you call us and provide their contact number and we'll get in contact with them.

Speaker1:
Yeah. It's so important. And that number once again folks, by the way (704) 560-1573. (704) 560-1573. It's so important to do that. And it might just mention here. Um, just just briefly got a couple of minutes left, but just talk a little bit more, if you will, just about what you mean when you say widow's tax because people are like, wait, my I'm going to get a tax for being a widow. My spouse is going to die and I'm going to get taxed for it. You know, I mean, yeah, kind of yeah, that's that's really sort of what happens.

Speaker3:
Yeah. I mean, bottom line is if you don't have a solid retirement income plan as the provider and breadwinner for the family, then we strongly encourage you to get in contact with us as well. Right. But it is important for you to know that working with a financial professional before you pass away and ideally before your health ever begins to decline, is in your best interest. Because the more time that you have to work with me and that we have to work with you, the more options that you will have and the better off both you and your spouse will be, both in retirement and upon your passing.

Speaker1:
Yeah that's right. 704 56015737045601573. You can also go online to schedule that complimentary consultation. There is no cost and no obligation for that conversation that you'll have with Mike. You will only work together if you decide that it's best for you, and that that is mutually agreed upon there. So once again, money matters with mike.com is the website. Well Mike, it's time has come and gone here just about for this week's show. But I thank you as always sir for everything that you bring to the table. And let's do it again next time, shall we?

Speaker3:
We shall. Matt, thank you for everything you bring to the table. But most importantly, thank you to each and every single one of our listeners. Without you folks, we don't have a show. So if anything resonated with you on today's show, please do me a favor and get in contact with us. Please do me a favor and share the information with those that you love and whatever you're doing this weekend, I hope you enjoy it to its fullest extent and 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 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.

Speaker1:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees, and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Speaker2:
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