12.24.22: Audio automatically transcribed by Sonix

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

Producer:
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.

Producer:
Welcome to Money Matters with Mike, with your host, Mike Zaino. Get set for a full hour on 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 Zaino.

Mike Zaino:
What's up? What's up? What's up? It's Mike Zaino coming to you from Fort Mill, South Carolina. Happy Saturday, people. What a great day to be alive in these United States of America. Money Matters with Mike is a show that's designed to arm you with information each and every single week and give you plenty of meat on the bone to chew on. This year's markets have been dismal. And on today's show, we're going to talk about starting you on that path toward financial freedom in 2023 and beyond. And as always, I have that distinct privilege and honor of being joined by the one, the only my co-host, the producer extraordinaire, Mr. Matt McClure. Matt, how are you doing today?

Producer:
I'm doing great, Mike. I think I've said this before, but one of these days I'll actually live up to the introduction that you give me each week. I appreciate it. How's it going?

Mike Zaino:
It is going. Like I said, it is a great day to be alive. Things are happening. It's almost Christmas time, so I'm excited.

Producer:
You know what? You and me both. We got presents on the way. We got old Saint Nick about ready to come down the chimney with his sack of presents over his back. And, yeah, it's a great time of the year. My favorite time of the year, probably. And I know it is a lot of people's as well with all the get togethers with family and all of that. And you know, the holidays can be a little bit stressful as well. They can bring a lot of that on. And so what we want to do is try and take some of that away. You know, that's that's kind of really the purpose of the show and the purpose of what you do each and every day, Mike, is to is to de-stress people a little bit about their financial situation and educate them, right?

Mike Zaino:
Absolutely. I mean, our whole goal, like I've always said, is just to educate, you know, America. The a rising tide lifts all boats. The financial education system in our country is broken. They're not teaching things that they used to teach. I know that certain states have enacted laws that are starting to require financial education as a requirement in high school in order to graduate, which I think is awesome. And if I'm not mistaken, it's either 19 or 20. One of our 50 states have have done that so far. The other states need to get on the bandwagon ASAP because we need to be teaching our young people, you know, good principals, good foundational steps to take as far as finance is concerned, so that by the time they get toward retirement age, they've got a much more significant account to rely upon in retirement when they're no longer earning income.

Producer:
Yeah, absolutely do. And, you know, I think it's a great thing as well that we're starting to require more of that financial education in order to graduate. I remember back to my high school days, back in the Stone Ages, now back into my high school days when I took an economics class. But I wasn't part of the core curriculum. You know, it was more of an elective that I could choose to take. I could take that or from a list of other classes. And that was the one that I chose for that particular semester. But now, you know, having it being required, being part of more of the core curriculum, like I think that's a great, great thing. And you know what? This show, as you say, is is part of the educational, you know, financial education system as it stands in this country. And we want to be a bigger and bigger part of it for each and every one of our listeners. And that is why we're not only on the radio, we are also a podcast. So if you've got friends or family who are outside of the Fort Mill or Charlotte areas, tell them about it. Tell them go to go to MoneyMattersWithMike.com. Let them listen to past episodes. If you have someone who you know can be helped by the kind of things that we talk about, do that. Because I really think that no matter where you live, no matter your geography, it'll be a good thing because we really do bring a lot of great info each week for the listeners.

Mike Zaino:
We do. And no matter where you are, like you said, everybody is on social media these days. So you can also find us on social media, especially on Facebook. Go ahead and give us a like subscribe to the page. And that way you're able to keep up with everything that we put out. We put out multiple pieces of content each and every week in an effort to just educate America.

Producer:
Yeah, and that's great, too. And of course, wherever you subscribe to podcast, you can get us there as well. A lot of great stuff. Mike coming up on the show this. Speaking of that content that we put out there, we're going to start, of course, the show. Well, the main part of the show, I guess, because we're already in the show, but we're going to start it with the Quote of the week coming up here in just a moment. We've got some important updates for the end of this year. And I can't you know, in prepping for the show, I was like, oh, my goodness, it's yeah. The year is almost over. It just seems like I said. Happy New Year to folks the other day, and now we're doing it again just about. So we got some great reminders for the end of the year. We're going to talk about RMDs, which is a thing that comes up at the end of the year for a lot of folks, and those are required minimum distributions. We'll explain them all coming to you coming up here in just a minute. We got Roth conversions to talk about. We've got a financial checklist to help you jumpstart the new year. Going to do a kind of a fun inflation demonstration, which the word fun and inflation don't usually go together, but sometimes you've got to laugh to keep from crying. You know what I'm saying?

Mike Zaino:
So that's the.

Producer:
Truth. It's so there's that. So we're going to talk about all that, maybe some more if we can if we can cram it in this next hour of our show. But first.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
And as promised, we do have words of wisdom for you this time around from Will Rogers, who was just an absolute legend. I mean, passed away back in 1935, but left a huge mark on the world. He was known as Oklahoma's favorite son. He was an actor, social commentator, performer. He traveled around the world three times. He made 71 films and made 71 films. And he died in 1935. You know, films hadn't been around that long by then. So a lot of films. Yeah. He also wrote more than 4000 nationally syndicated newspaper columns. I mean, let me tell you. He did some stuff in his lifetime. So Will Rogers said this, quote, The difference between death and taxes is death doesn't get worse every time Congress meets. I love that.

Mike Zaino:
Oh, my gosh. Preach it, brother. Will. Okay. My property tax alone just went up a ridiculous amount. And what is property tax in the first place? If you bought it and it's yours, why does the government feel that they have the right to tax your right to keep it? It makes no sense to me. But in today's Meat on the Bone segment, we're going to talk about another tax, the silent tax that nobody really plans for in retirement planning. But they need to start. And of course, we're talking about inflation.

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

Mike Zaino:
In the years between 1991 and 2020, that's 30 years. For those of you mathematicians out there, the average rate of inflation in the United States was a mere 2.2%. And those low inflation rates meant that the lifestyle a retiree could afford was greater. But as inflation rises, obviously they're going to run the risk of their savings falling faster over time. In fact, in the modest decline in purchasing power experienced by recent retirees during those 30 years, that was the lowest decline in the last 100 years. Well, in 2021 and in 2022, we've seen up to a 7% increase in inflation because we hit over 9% at the CPI earlier this year. And that marked the return of a significant risk of a rapid decline in the cost of maintaining your retirement lifestyle. And the bottom line is none of us knows when we retire how much of a lifestyle our money is going to buy us in five or ten or 20 years in the future? And while Social Security increases with the cost and the rising rate, I should say, of inflation in order to maintain and help maintain the purchasing power over time, for most Americans, the income benefit that they receive will not cover the majority of their retirement expenses. And so what does that do? Well, that exposes retirees to a risk that is just as significant as the risk of losing money from their investments. Inflation risk is is particularly important when using less volatile investments like, say, you have your money in a savings account or a CD or a bond, and you're using those funds to pay for basic expenses like food, like utilities, like property taxes, insurance or health care.

Mike Zaino:
And the reason it's more important is because those types of safe investments are the most vulnerable to losing purchasing power over time. And not only does a retiree not know what the rate of inflation will be in the future, they also don't know how long their savings are going to need to last. Right? This risk is particularly important when building that base to support your essential lifestyle expenses. Nobody wants to see their savings start to evaporate when they hit their 85th birthday. And here's the thing. Statistically, a healthy 65 year old woman has a 50% chance of living beyond age 90, a 25% chance of living to age 95. And get this, a nearly 10% chance of reaching age 100. So if she spends down her savings at a rate that would run out at age 90, she's going to face a 50% chance of either having to significantly cut back her spending in her eighties or risk completely depleting her savings. And fortunately, a retiree is able to transfer that risk to an institution that provides a lifetime income guarantee by buying an annuity through an insurance company. Retirees can pool that longevity risk, both to increase their annual spending and reduce the risk of running out of savings. And that, to me, Matt, sounds like a much better plan.

Producer:
Yeah, absolutely. I mean, you know, you want that income for your life. I mean, an income that you can never outlive because we don't have a crystal ball, right? We don't mind. Mine's been in the shop a long time. They're still working on it. It hasn't been fixed, so I can't tell. You know, I don't know how long I'm going to live. And so, you know, you might as well be prepared in the the eventuality that you do live however long, you know, 100 or older or, you know, even, you know, as the life expectancy keeps growing and maybe we'll all keep living even longer and longer than that down the road. So, yeah, I mean, it's it's definitely something to keep in mind and and really make the forefront because you want to you know, people do, as we've talked about before, focus on that one big nest egg number and then they get it and they're like, okay, what am I going to do with it? Okay, I'll just start withdrawing from it and in retirement and not really have a plan for that. But it's less about the nest egg number. It's more about having that income to fit the lifestyle that you want to have in retirement.

Mike Zaino:
It is. And anybody that meets with me or calls me to have a conversation, whether it's in person, whether it's on Zoom or FaceTime or any of the other virtual platforms that we have available to us through technology. You know, one of my goals is to help you develop a plan to where you feel confident. Your savings is going to last at least as long as you do say. Worst case scenario, we're going to plan it out to age 100. And if you have any centenarians in your family, we'll extend that even a little bit because we want to make sure that you are 100% covered and you don't have more month than money.

Producer:
Yeah, that is not a good situation there. So if you want more info, folks, go to MoneyMattersWithMike.com. That's MoneyMattersWithMike.com . Or you can call Mike Zaino directly and yep, I say directly, he's got his phone right there with him at all times. 704 560 1573 at 704 560 1573. Always love the Meat on the Bone segment there, Mike, because it really is. I learned something every week. So I always, always appreciate it. All right. Well, let's get to those reminders as promised, for the end of the year, in 2022 and heading into 2023. And the first one has to do with Social Security. Mike, It's that cola and no, not the kind you drink. It's the kind you're paid by the government.

Mike Zaino:
Yeah. So a COLA stands for Cost of Living Adjustment and most everybody knows that. Our listeners know that by now, especially if they've been listening to our show. And from time to time they institute these adjustments and they pay you a little bit more money. Well, the increase for Social Security for 2023 is going to be a whopping 8.7%. And that's a huge increase, especially even from last year where last year it was up 5.9. So the two year total between 2022 and 2023, we're talking about 14.6%, almost a 15% increase in the Social Security payments, which is awesome because that is the government recognizing that there has been a serious issue with inflation and it's their way of saying, all right, you guys paid into this system for so long, we're going to have to raise the amount that we pay you out. So I think that's a great thing for all people who are on and drawing Social Security.

Producer:
Yeah, especially in times like these, you know, when inflation has been so high that cola better be high as well to make up for those rising costs. And that's exactly why it does that. And so that's a good thing for for those who are drawing on Social Security right now. Another potentially good thing is some new tax brackets. And those are increasing as well. Now, don't hear the wrong thing that tax rates are not going up, at least not yet. Yet anyway, right? Yeah, right. Just at least not yet. But the tax brackets are going up. Explain that a little bit to our listeners, Mike.

Mike Zaino:
Yeah, So, you know, when we talk about taxes, the first thing I want to make sure perfectly and explicitly clear I'm not a tax professional. None of us here are certified public accountants. We're not tax attorneys. And we definitely encourage each of our listeners to seek counsel from a tax expert near you. But the actual brackets themselves, the limits within the brackets are going up about 7%. And that's huge because that means you got a little bit more room before you jump into the next highest tax bracket. And so if you're a married listener out there and you guys typically file a joint return for an example, you know, you've got up to $89,450 just just to be at the 12% if you're filing joint. So as long as your income is less than 89.4 50, you're going to pay the highest is 12%. And then if you make a little bit more, 190,000, so almost 200,000, 197 50 gets you into that 22% tax bracket. So, you know, having that little bit of extra room is going to allow people to keep hopefully more of that money inside of their bank accounts instead of paying it out to the IRS and Uncle Sam.

Producer:
Yeah, keeping them in that lower tax bracket and really helping them out there. And we could all use some help. As much as inflation has been rearing its ugly head over this past year or so. Well, and also coming up the end of the year, this is another one of those important reminders for folks. Rmds required minimum distributions. Tell tell us, Mike, why is that an end of the year concern for a lot of people?

Mike Zaino:
Well, you know, so first off, required minimum distributions, right? What are they? They're those, those, those pesky distributions that the government comes knocking on your door and saying gimme, gimme, gimme and forces you to take out of your tax deferred retirement accounts whether you need the money or not. And so they're from employer based retirement plans or traditional IRAs. And if you turned 72 this year, you've got to pay those required minimum distributions by the end of this year for most people, 72 and older. Now, the I guess there is a little bit of a caveat there. They give you an extra three months if you turn 72 this year. But if you do. That if you defer those three months, then you're going to have to take two RMDs in 2023. So it's always best to take the RMD in the year that you turn 2022. And again they are for tax deferred accounts like 401, KS, 403 B's thrift savings plans. If you're a government employee, they're also for traditional IRAs. You don't pay the taxes on your account contributions when you put the money in or on anything it earns until you take those withdrawals. So when you turn 72, you must start taking those required minimum distributions or RMDs every year each year by December 31st.

Mike Zaino:
And again, the exception is if you turn 72, you have until April 1st of the following year to pay your take your money in and pay your taxes on it. Bottom line is we can help you manage those distributions in a very, very efficient way. Required minimum distributions. Number one, they're based on life expectancy tables that the IRS puts out. For an example, like I had mentioned before, at 72, the average person is expected to live actually another 17.4 years, if you can believe that, based on the most recent data that we have. Here's the catch. Remember, there's always a catch with the government. If you don't take any distributions or you don't take enough, you miscalculated on your own. You might have to pay a 50%. That's five zero people, not 15, but five zero 50% excise tax on the amount that was not distributed as required. This is the largest penalty in the IRS's arsenal. And why do you think they do it? Because they can, right. So, you know, if you want to say goodbye to those RMDs and you want to kick the IRS out of your retirement plan, then you need to give me a call. Bottom line, you need to give me a call.

Producer:
Yeah, that's right. And the number once again, folks, 704 560 1573 And yeah, we definitely want to say goodbye to those RMDs and, you know, definitely get rid of the IRS being a partner in your retirement because you know, Uncle Sam, you know, I'm obviously a very patriotic person. I know you are as well, especially having served in the military. My dad was an Air Force veteran. All of that. God bless America. But Uncle Sam does not make a good retirement partner.

Mike Zaino:
Yeah, I don't want him partnered up with me. I mean, I'll keep them there as much as I have to legally required. But that's all he's getting. I'm not voluntarily paying him any more.

Producer:
Right? Exactly. Exactly. Well, and that's what we always ask that question to. Mike, do you think taxes are going up or down in the future? And I know you know the answer to that one.

Mike Zaino:
Yeah, I do. Most people believe that taxes are going to be higher in the future. You know, so, again, you might want to consider that strategy that kicks the IRS out of being that partner of yours in retirement. And so one of the ways that you can reduce your future tax rate hike risk, what does that mean? That means the risk of them raising taxes in the future is by implementing what's known as a Roth conversion. And this is where you take that extra room that you might have in your current tax bracket and you take some money out of your tax deferred accounts up to and push just to push that limit. Right. But not go across the threshold that way. You're paying the same tax on that money and then convert that over into a Roth that will grow tax free for the rest of its life. And guess what? No required minimum distribution. So that is huge right there in smart. Retirees are able to diversify their money into different tax brackets. The tax deferred bracket, the tax free bucket. Right. That's what we want, not tax deferred bracket, but tax deferred bucket and then the tax free bucket. I'd rather have my money in a tax free bucket. So if you're somebody who's interested in generating a tax free income during a retirement that's going to last ten, 20, 30 plus years, we have proven legal strategies that help you do just that. And with the market down this year, now is an opportune time to to convert some of those tax deferred IRA dollars or 401 K dollars or whatever your plans dollars is over to a Roth IRA. All right. Because one of the questions I will ask a lot of folks is why are you going to continue to pay ordinary income tax decades after you've stopped working?

Producer:
Yeah, and that's a great question. And I can imagine, you know, being a retiree and saying, you know, I'm still paying income tax, but I'm not working anymore. This is this is not a great thing. And, you know, you talk about those different tax bucks. It's to Mike. I would rather have a tax free bucket than a bucket of chicken, you know, I mean, and I and I love chicken.

Mike Zaino:
Now I, like you can ask my wife. I love a bucket of chicken. In fact, any time a Popeyes or a KFC commercial comes on, I'm like, I think I'm going to run out, you know, run out the door and I can take down some some some fried chicken. There's no doubt about it.

Producer:
It was so funny. And that makes me that just mentioned my dad a minute ago. It makes me think of a story of him when he was he was not well in the hospital. This was this was quite a while before he passed away, but he was in the hospital. He had he'd had bad infection and all that, but he was still in the ICU at this time. But he was doing he was doing much better and he said he had the T.V. on in there and a commercial for it was one of those like KFC or something comes on and he goes, You think we can we can call and order some, some chicken, have it delivered in here. And I said, Daddy, I don't think they'll let you do that in the ICU.

Mike Zaino:
But hospital food, though, is the worst.

Producer:
I could totally.

Mike Zaino:
Relate to that.

Producer:
He hated it. He he would they would bring him this tray and he would eat the cake and that was about it. So that's how good the rest of it was. That that gives you a clue there. Well, some great info about Roth IRAs and really about, you know, getting rid of those RMDs, those required minimum distributions as much as humanly possible. And because, you know, I mean, they're only required if you have an account that you withdraw from that is of the kind that requires it. But there are those Roths that you can convert to and not have to pay those, those RMDs to yourself, not have to take those out. And then that eliminates the 50% penalty that you might have to pay if you don't do it right. So just, just, you know, de-stress yourself as much as possible with all that.

Mike Zaino:
50% is no joke people. I mean, no joke whatsoever. Don't take the chance on making that huge mistake on your own. Make sure you have a financial professional that is able to handle that for you. For sure.

Producer:
Yeah, absolutely. So and go to MoneyMattersWithMike.com. Find out how to get in touch with Mike Zaino, the Contact US page right there on the site. Just fill out the quick little form. It'll take you about 30 seconds to do it and you can send a message directly to Mike. Once again, that's MoneyMattersWithMike.com. Well, we are just about just about a week away here from the new year. Not not much more than that. And so we're going to jumpstart your financial new Year with this checklist that we have in our next section of the show. And so we got several things here to go through and they're all really super helpful. And I think number one is number one for a reason, because this is something that really gets a lot of people into trouble talking about credit cards. And that's the number one thing on this checklist, is to pay off your credit card balances. Why is that so important here, Mike?

Mike Zaino:
Well, I mean, most credit cards have percentage rates, annual percentage rates that are that are nearing 20% and above. I mean, legally, they can they can charge you 29.9, 9%. I mean, let's call it what it is, 30%, right? Yeah. And why in the world would you accept credit with those kind of terms? Because in all actuality, you probably can't afford to buy what you're putting on plastic if you can't pay for it in cash. Now, if you're somebody who uses a credit card as a tool and uses it for travel points or cash back or something like that, and you're able to be disciplined enough and have enough money at the end of the month to pay off those balances each and every month. Then I'm not really talking to you because you're responsible with those credit cards. But there are a lot of people out there that, you know, life happens to them. And for one reason or another, they have a loss of income. They have a sudden unexpected expense, and they absolutely have to put it on a credit card. And thank God you have it right, because it's better to have it and not need it. Then the alternative. But you should always try to minimize all debts. And we're talking about credit card debts since we want to take out the ones with the highest interest rates first. That's where your credit card companies come in because of the outrageous interest rates that they charge you to lend you their money.

Producer:
Yeah, absolutely. And one of the things that I have done and continue to do, actually, and one of my favorite things is having a charge card instead of a credit card. And you know, those charge cards and this is not an endorsement at all. But say, for example, like certain American Express cards, kind of the basic, more basic ones, you can do that get get benefits like you talked about, use that as a tool. But you are you have to pay off that balance in full every month. And so that forces me. I just kind of use it like a debit card, you know, instead of paying with my debit card from the bank when I go out that doesn't really have any rewards or anything. I'll earn some rewards and then go make sure that I have that paid off. You've got to be very careful you don't overcharge yourself, because that entire balance for that billing period is going to be due on your due date. So it helps me really, you know, in my my budgeting and also earning some some nice rewards and perks there. Well, number. To on our financial checklist here, Mike, is to maximize your tax bracket with a Roth conversion. We won't get too much into this because we already went into so much detail on it, but it's a good one to have on that checklist. So it bears repeating.

Mike Zaino:
Yeah, absolutely. So. So since there are no required minimum distributions or RMDs in a Roth IRA, if you've already paid the taxes, Uncle Sam has already received his cut. Right. So you'll want to complete your Roth conversion before age 72 for sure when the RMDs kick in. Yeah. So again, if you have any questions on that, just contact.

Producer:
Absolutely. And yeah, Uncle Sam's not going to come double dipping, as you say, as you've already paid those taxes. He's not going to come back for more.

Mike Zaino:
They change the.

Producer:
Rules. Right, exactly. And it. Please, Roth, stick around. Please, please, please. All right. So number three on our checklist to jumpstart your new year is to set a monthly budget for your retirement. And I think a lot of times people overcomplicate a budget and just that's why they end up not doing it. You know, they sort of freak themselves out and think they're going to have to start getting out the spreadsheets and, you know, practice their long division and stuff. But it doesn't have to be like that.

Mike Zaino:
Yeah. And a lot of people think, you know, budget is a dirty word and basically it's just, All right, just take a snapshot of how much income is required to meet your needs and your wants. Most people don't want a lifestyle change during retirement, so we need to plan for both inflation. We also need to plan for future tax increases and for potentially less income. But if we pay down those debts like we just mentioned a minute ago, and we maybe convert some of our money over to a Roth that's going to free up more tax free money in retirement. And so budgeting makes it that much easier if you're not having to pay taxes. And we've accounted for inflation.

Producer:
Yeah, there you go. I mean, that's so, so helpful you actually having that plan. And you know, I said this a minute ago about distress the situation as much as you can. That seems to me like for myself, that would take a whole lot of stress off of me if I don't have to think about our taxes going to go up and how much am I going to be affected by it, how much is inflation going to go up and am I going to be, you know, in under the poverty line or something in retirement? That's not a situation that you want to be in. And so, you know, yeah, absolutely. Make a plan, contact a financial professional. And I happen to know a guy, his name is Mike Zaino, and you can get in touch with him at MoneyMattersWithMike.com. All right so number what are we at now Number four here develop a plan to pay off your house and this is an important one but and I also again, I'll say, Mike, I think it's one that people might say that seems daunting, but it can be if you can do it, boy, you can give yourself a big raise. Really?

Mike Zaino:
Yeah. And, you know, daunting tasks are just that. But how do you eat? How do you eat an elephant? Right. One bite at a time. So if something seems so huge, you just tackle it one step at a time and if you work backwards, you can just reverse engineer how much you'll need to pay extra in order to have that payment, that mortgage eliminated when you go into retirement. I'll tell you right now from personal experience, because I work in the retiree market, the happiest retirees, they have no mortgage payments whatsoever. And the easiest way to increase your net worth is to eliminate all of your debts. And when you take your net worth is your assets minus your liabilities. Well, if you have a house that's worth 300 grand and you owe, I don't know, 100 grand on it. Left, right. You can take that, get it paid off by the time you retire. And now you have a 300,000 asset that is yours with no liability. So you definitely want to have a plan to pay your house off if you can, if that's at all possible before you go into retirement.

Producer:
Yeah, absolutely. And I mean, you just think about it. Let's say, for example, your mortgage is say, $500 a month, something like that. Just throwing a number out there. You have to ask yourself the question in retirement, do you think you could use another $4,500 a month back in your pocket instead of sending it off to the mortgage company every every month? I think that sounds good.

Mike Zaino:
Cash flow. That's what it's about.

Producer:
That's right. Absolutely. So So that's paying off your house. Now, next on our list here, our checklist is to maximize your Social Security income benefit. That's a big one.

Mike Zaino:
Yeah. And people made their ears might have perked up. They're going, what I know I'm getting that that that cola the cost of living adjustment of 8.7% but how else can I maximize my Social security income benefit. Well did you know that you can increase your benefit by 8% each and every year that you defer taking your payments all the way up until age 70? Social Security used to mail us paper that would show you what you got at age 62, what you got at your full retirement age, which was either 65, if you're a little older, 66, 66 and two, four, six, eight or ten months or six. Seven, and then they would show you what it is at age 70. But a lot of people don't know that if they just wait from 62 to 63, they're getting an 8% bump. If they wait from 63 to 64. They're getting another 8% bump and so on and so forth. Each and every year you delay taking it. So when we sit down, we can strategize on what makes the most sense based on how long you plan on working, what other assets you have. If you're married, what's your spouse does, and what assets he or she has. We can look at all of that stuff and determine what's the best for you as far as taking Social Security is concerned.

Producer:
Yeah, I mean, that's, you know, giving yourself a raise. I always say control the things that you can control. Like, you know, you can't control inflation yourself. You know, you can't control the taxes. And what what the government does with that, what you can control, though, is this. That's one of the things that you can control, delay, if it's possible for you, if it fits your abilities or financial abilities to do it, give yourself an 8% raise each year. I think that's a great thing to be able to do. All right. So next on the checklist for the new year is to implement a bond replacement strategy to just get rid of those fees as much as you possibly can and to stop the bleeding in your, quote unquote, safe money. Boy, the bond market has taken a beating this year.

Mike Zaino:
Well, you just you just said a mouthful right there. Bonds are having their worst year literally in 100 years in 2022. I mean, they are taking an absolute beating. And bonds used to be your granddad's, you know, version of creating income in retirement. And the reason I phrase it like that is because it's not the case anymore. There's a whole nother asset class that is beginning to replace bonds simply because, number one, there can be zero fees. Number two, they don't participate in any of the downsides of the market. And so you have to determine what is your safe money, what is the amount of money in your retirement accounts, whether it's your 401 K, whether it's your IRA, whether you have money in CD's at the bank, What is the amount of money that come hell or high water you are not willing to drop below a certain excuse me, a certain threshold that might be a quarter of $1,000,000. It might be a half a million dollars. That might be $1,000,000. Whatever that number is, you should consider taking that. And alternatively, instead of bonds putting that over into a fixed income option that is able to provide you with a guaranteed income for life with zero fees. And yes, Matt, that is an option.

Producer:
It absolutely is. I mean, you know, the products that we're talking about here can definitely provide that income for life. And something that you can't, cannot outlive is fantastic. And then you also can can pass along benefits to beneficiaries and all of that. Like you can provide them with income for a period of time or for the rest of their lives. It all depends on your particular situation, what you want to do, what you agree on doing with a financial professional, with somebody like Mike Zaino.

Mike Zaino:
Yeah, And that's the most important thing, is to schedule a retirement consultation today. I'll show you the fees that you're paying. I'll show you the risks that you're taking with your current investments, and we can create a plan, bottom line, that's going to work for you. It's not about Mike Zaino. When we meet, it's all about you and how I'm able to help you meet your goals and objectives. So don't delay. Pick up a phone, give us a shout. Contact us on MoneyMattersWithMike.com. By now you should know my number. You should have it memorized. 704 5601573. In fact, most of my clients, they saved me in their phone as Retirement Mike, Retirement becomes my first name and then maybe they throw in Mike as my middle name and Zaino is my last. It's kind of comical, but that's that's how people save me in their phone. That way, any time they think about retirement, right, they know that my name pops up.

Producer:
That's right. That's great. And it's like they'll see you in public and go, Oh, hey, retirement. Oh, well, that's not really my first name, but hey, if you can call me whatever you want, just don't call me late for dinner, you know?

Mike Zaino:
That's it. Call me late for dinner.

Producer:
Especially if there's a bucket of chicken involved. That's a callback, folks. If you miss that. Listen, earlier in the show, you can do it on MoneyMattersWithMike.com. Rewind. Okay, So we've got plenty more time here on the show. But, you know, you mentioned the the advice, the consultation that you can provide to folks. And I want to emphasize this because it's absolutely free. I mean, it's not like you're going to get trapped into something here that you don't want to be trapped in. That's not what this is about. It's not like Mike Zaino is some big scary sales guy who's going to trick you into something that you don't want to be a part of. This is this has got to be a two way street here. And and it's something that's absolutely free to explore and see if you want to be a part of this whole thing that we're talking about. Right?

Mike Zaino:
Yeah. Not not only is is it free, right. But there's no obligation as as well, I don't I'm not my job is not to convince you that you need to prepare for retirement. If you're in retirement, my job's not to convince you that you need your money to last you for the rest of your life. Anything that we discuss stays in our room is only between us. Is 100% confidential. Okay? And I'm only going to help you If you want me to help you, that is it. I'll help you cut unnecessary costs in your IRAs, your 401. Case, other savings accounts. We can look at income planning. We can help you with Medicare, Social Security, as far as maximization is concerned. If you have a pension, we can show you how to maximize that. If you have old IRAs. I mean, there are a lot of different variables when it comes to looking at a comprehensive retirement plan. And so bottom line is that contact us at Money Matters with Mint.com or reach me on the phone. 704 5601573 We would love to meet with you to discuss your future again. It's not about Mike Zaino. It's about you. I can help you make retirement feel like it's the next starting line for you and not a finish line of your life. And that bottom line. Many retirees continue to work and volunteer some time on a weekly basis in order to stay active and involved mentally, socially, physically. But I want you to look forward to retirement and I want you to be able to enjoy retirement to its fullest extent.

Producer:
And once again, folks go to Money Matters with Mike, or you can give them a call. 704 560 1573.

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

Producer:
So this time around, Mike, our inflation demonstration is kind of fun. And as I said at the top of the show, fun and inflation don't normally go together. But this time around, they kind of do because it's PNC Bank that I know you've probably heard of because they're one of the biggies out there. They come out with this Christmas price index each and every year. Right. So this is PNC's Christmas price index. And you might think, okay, well, that is it. Like, you know, the price index of, I don't know, ham and stuff that you buy at Christmas or like electrical gadgets. No, they take the song The 12 Days of Christmas and tell you the cost of all of those different items. Right. So if you're if you're familiar with the song, you got the, you know, the pipers piping and the geese clang and the five gold rings and the partridge in a tree and all that, right. So so that's what they do. I think it's kind of fun. It's a different way to look at inflation. And like I say, you've got to laugh to keep from crying sometimes. So the total Christmas price index is what they refer to this as the cost of all of the different items in there. And this is just like one set of each of the items in the partridge, in the partridge in a pear tree and a partridge in a pear tree in the song would cost you $45,523.27, according to PNC and their annual report here. That's ten and one half percent higher than last year.

Mike Zaino:
So that is that is a lot.

Producer:
It is. Some things have gone up more than others, though. You've got a partridge in a pear tree, which is, of course, the first item, $280.18. That is up a quarter. That's up 25.8%. Wow. They say the price of the partridge is unchanged. But you've got to pay for the fertilizer for the tree. And that means higher costs. It costs more to to feed the partridge as well. The feed costs going up to turtle doves, 600 bucks, that's up 33.3%. So up a third, which is kind of crazy here. And so, you know, you go on down like some things haven't gone up like, say, for calling birds. They've been they're still expensive, of course, but they are the same price they were last year, just shy of 600 bucks. And then you've got other things that have gone way up. Let me see if I can find this one that has gone. Another one that went up Lords, a leaping ten Lords, a leaping 13,000, almost $14,000 for for Lourdes a leaping And that I'll just tell you what PNC says. If fancy gift giving is your thing, they say nothing tops these lords of the dance. The Ten Lords leaping top this year's index with a $13,908 price tag. That's the most expensive gift in this year's index. I guess you got to pay lords more than you do. Just us regular people.

Mike Zaino:
I guess you do, Matt. I mean, that is insane. Just even thinking about going up at that type of inflation. I mean, we've talked about it week in, week out. As far as this year is concerned. It is absolutely been astronomical.

Producer:
Yeah, it really has been. And and by the way, one last thing about this before we get on to some more inflation talk, the true cost of Christmas in song they say so that gave you that was at 45,000 or something number for one set of each of the things that are are sung about in the song. Well if you account for all of the repetitions because that of course is what the song is famous for, is you basically repeat each and every thing as you go through the different days. So if you count for all the repetitions, $197,071.09. So there you go. That and that's up almost 10% from last year. So it's kind of it's kind of wild how much you can could spend on those items from the 12 days of Christmas. Well, that's not the only thing that's gone up in price over the past year. The Christmas trees themselves, you know, I might not buy lords leaping or geese or laying or any of that stuff, but people buy Christmas trees. I actually bought a new one this year, kind of got rid of the old Charlie Brown tree that we had if it didn't had about two sprigs of of pine needles on it and got a new one, an artificial one. But boy, the price of Christmas trees have gone up as well so significantly.

Mike Zaino:
In fact, this year alone, Americans are spending literally get this people $4.19 billion as billion with a B, whether it's real or fake and at the average cost of $85 and change for a real tree and an artificial tree is almost $123. Those are the average costs. I know. Heck, around here, I went to look at just the six foot real tree and it was already over $100. And I'm thinking to myself, people do this each and every year. We've had a pre lit artificial tree for years, and every year the only thing I have to do is futz with the lights and figure out which ones got broken. And and I don't even figure that out. I just go to Lowe's and I buy a whole bunch more lights and I throw them on it again. And, and we've got good And you have the old lights with a new light. So it kind of kind of works.

Producer:
Yeah, well, we just we just put up the tree at my mom's house here not long ago and a few weeks back, the day after Thanksgiving. And I put it together. All the lights worked last year just fine. Nothing was. There was no problem. Get the tree up this year and about half the tree, the lights don't work. And I'm like, What is going on? So I'm fidgeting with everything and I go out to the garage and I'm like, okay, here's this other Christmas box. Oh, there are lights in here. I'm just going to string more lights around and hopefully no one notices all of the dead bulbs on the tree.

Mike Zaino:
So I'm going to give I'm going to give whatever company this is a free plug. There is a tool out there that looks like you hold it in your hand, like a like a gun. And what you do is you insert if you have a strand of lights that is out, you insert the take the light bulb out and you insert that part into this gun and you pull the trigger. And what it does is it creates a shunt and instantly all the rest of the lights in that strand come on. And it's, you know, it works for the rest of that season and it's like 20 bucks on Amazon. It's the best 20 bucks I've ever spent. Wow. Once you've shunted several lights in a strand, that strand is going to die and you have to replace the strand. But if you just have one light or two lights out, that's in a strand that'll help restore. And for I'm telling you, for 20 bucks, it's what? I turn into the Grinch When I do, I'm just I'm throwing it out there. My wife, she loves decorating for the holidays, gets our daughters involved. And she has not one, not two, but three Christmas trees. We have our main Christmas tree. And then she has her smaller memories, Christmas tree. We're all her important memories. And then on our back porch. Yes, on our back porch. She has a Christmas tree out there that she decorates in a beach theme because she loves the beach ones. Plenty enough for me. Right. And so this thing saved me so much headache and aggravation that I was just able to to it saved my marriage. If I throw it out there, it saved my marriage just by being able to fix strands of lights without expletives coming out of my mouth.

Producer:
I didn't even know such a thing existed.

Mike Zaino:
The Grinch that I am right.

Producer:
There you go. No, I didn't even know what existed. That's great. I'm. Boy, that whoever invented that should be. I don't know. They should win a Nobel Prize or something.

Mike Zaino:
If you Google Christmas light gun, it will. I'm sure it'll. It'll come up. I can't remember the name of the tool or the name of the company, otherwise I would give them a free plug. But it is absolutely amazing and a must have for your Christmas lights.

Producer:
For sure. I will. I will Google that here momentarily when when we're done in a few, because that would be something that came really in handy. Oh, and I got I just wanted to mention to you talked about your your wife having several trees, had some friends. They moved away. You know, I'm in Atlanta, but they they were here as well. But they moved away to to like the Dallas area, not well, a few years back now, but when they were here and I'm sure they still have them there, they would have several Christmas trees up in their house and it would love going over there. They would want to have a party every year. And my favorite one was the Star Wars Christmas tree, because the tree topper was the Death Star. I thought that was the coolest thing ever.

Mike Zaino:
They must have been real, real Star Wars fans.

Producer:
Yes, definitely. Definitely so. Oh, goodness. Well, that is a look at the price of Christmas trees. I bet they're glad because they really they had probably four or five Christmas trees up in their house every year. And, you know, I'm glad they don't have to buy a real one every year. Looking at those numbers, they would have to be paying for them right now. It's a one time investment if that artificial tree, it lasts for several years. But that's a look at the inflation, how it's in fact, how it's affecting your dollars and cents as far as Christmas tree purchases go. Well, talking about dollars and cents, you know, we mentioned bonds earlier on and the struggles in the bond market this year, to put it lightly, the real walloping of the bond market this year. So let's talk a little bit more about bonds here as we get close. About 10 minutes left in the show. Let's talk about bonds a little bit more and how important it is for people as they're looking toward the new year to think about as they get their financial house in order. Maybe that's their New Year's resolution. Maybe it's something that they're actually going to stick to. This year, unlike the old New Year's resolutions of losing weight or being more organized or whatever that has been over the years, if they're going to be serious about getting their finances in order, what do they need to know about bonds and and what sort of questions do they need to be asking themselves as we head into 2023?

Mike Zaino:
Well, I mean, the biggest question is, do you know what percentage of your portfolio is actually in bonds? Well, Matt, we have found that too many people don't know what percentage of their portfolio is is allocated toward bonds and they don't know which bonds they currently hold. Well, again, we said it before. We're saying it again. Did you know that 2022 has been the worst year in the history of bonds, according to The New York Times? And for a lot of folks, the old way of thinking, thinking, like I said, your granddad's, you know, investment advisor probably had him at a 6040 split. In other words, 60% in stocks and securities, but the other 40% in bonds. And why did they do that? Right. Well, it used to be that bonds were something that you would buy and those bonds would be held for a long period of time. And then at the end, when they matured, they would start to pay you an income that you could live on in retirement. But the problem with that is, is that bonds may go up in value, but they can also go down in value in the folks that were relying on that bond income this year.

Mike Zaino:
And bonds are having their worst year in literally ever. They're not getting that income. So you need to plan for that. And especially when there are better alternatives where we can guarantee an income with a product that only participates in the gains of the market, insulates and protects your money from the downsides of the market. Even bonds can lose money. Please get in touch with me so that we can talk about bond replacement, where we use fixed-indexed annuities to delete the fees, protect your money and guarantee you an additional income stream that you can never outlive. In other words, it is guaranteed for life. And oh, by the way, when you pass away, whatever's left goes to your name to beneficiaries. So these annuities are not like old annuities where the insurance company kept your money. So a lot of people are misinformed or they've heard commercials from people who either don't offer them or are trying to sell against them about how annuities are bad. And I couldn't disagree with that more of a humanly the right people and in the right situation annuities can be life saving.

Producer:
Yeah and life saving and definitely life changing because you are giving yourself that guaranteed income and retirement and and boy, that's such a great feeling. Not only are you going to have more money in your pocket, you're going to have a lot less burden and stress on yourself. I mean, it's we talk about this all the time from from a practical standpoint, but also an emotional standpoint, like you don't want to be stressed out. And I think I've said it a few times now on the show, maybe I'm stressed, who knows? But it's it's important like, you know, to to de-stress yourself as much as you possibly can. And this is one of those things that can really give you peace of mind as part of that overall financial plan.

Mike Zaino:
Earlier, we said that the happiest people in retirement are those that don't have a mortgage payment. Well, guess what? Right behind that are people that have pensions. So if you don't work for a company that offers a pension, I'm not talking about a 401. K, an employer sponsored defined contribution plan where you have to contribute. I'm talking about an old school pension, a defined benefit plan. If you don't have one of those, you know, then you can use an annuity to create your own personal pension that gives you income that you can't outlive in retirement. I mean, I just think it's a brilliant idea. And those of you who are relying on Social Security to be there when you're going to need it, especially if you're relying on it to be there in its current state. Okay. The last statement that I got said that they were going to be able to meet their obligation, only 70% of their obligation in the year 2034, which come little over a week from now, is 11 years away. Yeah. So there is absolute advantages for those who are willing to put some time, some effort, some thought, and develop a plan into creating their own personal pension and retirement.

Producer:
Yeah, and there is that vehicle to do it through something like a fixed indexed annuity and really provide you with that peace of mind and with that income and go to money matters with my folks. You can learn more information there through our past episodes. We've got a bunch of them online on the website, all of the past episodes of the show since we started several, several months back. Now you can go there and also reach out to Mike Zaino for that free consultation we talked about earlier, free not only of any charge, but of any obligation to you. You're not nobody's forcing you to to get into something, as we say, that you don't want to be a part of here. But this is more it's an exploratory thing. Hey, talk to Mike.

Mike Zaino:
At least know your options. Yeah, that's the thing. At least know your options. I'm not trying to convince you. Twist your arm, beat you over the head to do anything, but you need to know what's available to you. And then when you're provided with the right information. I do believe that most people are smart enough to make the decision that's best for them.

Producer:
Yeah, absolutely. So and you know, Mike, the the main thing, too, is we said in the beginning of the show, as you often do, and pretty much every episode you say this because it's it's true and it's kind of the mission behind the show is it's all about education. Well, that's the same kind of thing with this retirement consultation, right? Because it's it's all about learning what the options are that you have, because there are I guarantee you there are probably options out there that might fit your financial profile, your needs, your wants in retirement, the type of lifestyle you want to lead in retirement. There are options out there that you probably didn't even know about. Right.

Mike Zaino:
This is this is true. Definitely options that you didn't know about. Heck, I mean, the day you stop learning is the day you start dying. Think of it that way. Yeah. Nobody wants to start dying today.

Producer:
No, absolutely not. Absolutely not. So continue with that learning, folks, and make it a lifetime of learning and keep on living. And hey, you can you can have yourself an income in retirement that you can't outlive. So that will be around for the rest of your life. Again, money matters with Mike. Yeah, exactly. Exactly. With money matters. With Mike Dotcom being the website, you can also call 704 5601573. That's 704 560 1573. Well, Mike, our time has just about come and gone here. I've enjoyed it. Once again. I wanted to take the opportunity, though, here at the end of the show since we are right here at Christmas. To wish you and your your family, your wife, your kids all the best for this holiday season. I know it has. We talk about how how long or how short, rather, the year has seemed to be and how it's just sort of flown by here. But also the past couple of of years, past three years really have really felt like really long years. At the same time, it's one of those weird things. So I wish you all the best this holiday season.

Mike Zaino:
Man, I really appreciate that. The same as to you, Matt, and your family. I mean, without this show or excuse me, without you, this show does not get produced, right? And so without our listeners, this show doesn't exist. And it's one of those things where I want to take a few minutes or a few seconds, I should say, and just give my gratitude for everything. I mean, we do this show each and every single week without fail. We try to our best to put information that is that is packed with stuff that you can use. Yes, we get repetitive. But again, the reason that we do that is because we believe wholeheartedly that this is information that will impact you. In the more times you hear something, the more it's going to solidify in your brain. And so if you know anybody that could benefit financially from listening to this show, please share our pages with them. Whether it's our social media page, Money Matters with Mike on any of the socials, whether it is on the web at MoneyMattersWithMike.com, whether it's my telephone number that is my personal cell phone number that I give out. Right? 704 560 1573 If I can help just one more person not fall into financial pits and have mistakes that create crazy surprises down the road in retirement, that's what I'm here to do. That is my mission field. So thank you again, Matt. Listener land out there. Thank you so much for tuning in each and every single week. Make it a great day and Merry Christmas and Happy New Year.

Producer:
Thanks for listening to Money Matters with Mike. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no-obligation consultation visit MoneyMattersWithMike.com or pick up the phone and call 704 560 1573.

Producer:
Not affiliated with the United States government. Mike Zaino 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 to the property of the respective owners AmeriLife 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.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty, and how it could all affect your future in retirement? Then to tend to money matters with Mike, to learn how you can protect and grow your hard-earned money. Money Matters with Mike every Saturday at 9:00 AM right here on FM 100.1 and AM 1340. Schedule a free no obligation consultation now at MoneyMattersWithMike.com.

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