1.27.23: Audio automatically transcribed by Sonix

1.27.23: 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 the Active Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs first. He’ll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax-efficient investing. And now your host, Ford Stokes.

Ford Stokes:
And welcome to the Active Wealth Show Activators I’m Ford Stokes for chief financial advisor. I’m joined by Sam Davis, our executive producer. And we’ve got a very important show for you this week. Last week, you heard me kind of introduce the Smart Retirement Plan. We’re almost I’m almost done with that Smart Retirement Plan book and. This week. We’re going to it’s probably the most important one in the series for Smart Retirement Plan. This this episode, this show, because we’re going to talk about how to build a Smart Retirement Plan. Specifically, we’re going to focus in on how to invest in smart risk, smart, safe and smart tax investments. If you can do a great job with smart risks, smart, safe and smart tax, you’re going to be in a really good spot throughout your 35 plus year retirement. And I hope your retirement is 40, 50, 60, 70 plus years, trust me. But you probably need to plan on a 35 plus year retirement because we’re all living longer and you’ve got to do a really good job with smart risk investments to be more market efficient and with smart, safe investments, kind of be more market efficient and and to some extent, income efficient. Right. And then smart tax, you want to be more tax efficient. Also, with smart, safe, you’ve got the ability to be fee efficient with your money as well. So we’re going to go through all that today.

Ford Stokes:
We just want to welcome all the activators out there listening to our show. Again, if you’re wondering who an activator is, it somebody who listens to this show, it’s somebody listens to the Active Wealth Show. It’s somebody who’s looking to build for a successful retirement. It’s somebody looking to protect and grow their hard earned and hard saved wealth, because it is really important to do both. Right? I mean, you’ve worked really hard to earn your money. And to be quite honest, it’s probably harder to save your money, that is, to earn your money throughout your career. And you really need your money working as hard as you have. And you don’t want to waste those dollars in big down market years. We had a couple call us this past week from the Smart Retirement Plan show last week. They called us on Monday. We talked to them on Monday and we sat down with them and they basically just said, hey, look, you know, I’ve lost money in one. I lost money in zero eight. I lost money in 18. I lost money in 22. And if I just had done a better job at planning for those and I didn’t have the 14% loss in the bonds last year because last year was the worst year for the 6040 portfolio, we’d be in a lot better spot. And he was a do it yourself or he he had invested on his own and he was like, I’m done.

Ford Stokes:
I’m done trying to guess this market, I’m done trying to do anything. We’ve got to have a good retirement income plan. He’s been retired a year and he just said, Hey, I want to try to figure out myself for a while. And now he and his wife are like, No, we’re done with this. And she’s still working and still works in the Georgia school system as a teacher. And and so they’ve still got income coming in, and he’s also got passive income on the side. And he’s been with one of the largest companies in Atlanta. And. Um. And I’ve just I’m super proud of him to say, Hey, you know what? I need help. This is what I should be doing. And I think you all should consider that as well. So on this week’s show we’re going to talk about. Yeah. We’re going to do the quote of the week, the financial quote of the week. We’re also going to. Give you our inflation demonstration and we’re going to dive right into why you need a Smart Retirement Plan with smart risk, smart, safe and smart tax solutions. And also this week in history. And Sam, you’ve got a message for our long term listeners as well, right. You wanted to share today on the front of the show?

Producer:
Yeah, absolutely. First off, thanks to everybody who contacted us after last week’s show. We always love hearing from the activators because, you know, we’ve been doing this show for over three years forward. And, you know, sometimes it just feels like you and me in a room. But it is good to hear that there’s so many activators out there listening. And we get messages on our voicemail, email inbox, social media and everything else. So if you’ve been a long time listener of the show, please don’t wait until the market goes down another ten, 15, 20% and make yourself a first time caller this weekend. And we’d love to get in touch with you and talk on Monday.

Ford Stokes:
Yeah, all you got to do is reach out to us at ActiveWealth.com That’s ActiveWealth.com and you can click that schedule a consultation button the upper right corner. We also have a phone number right there right there on the screen. If you’re watching on Active Wealth Show you can reach out to us at 770 685 1777 again 770 685 1777. Diana and her team are standing by, ready to take your calls over the weekend. So we’re happy to do that. Also, we just want to thank you for making us the number one listen to radio show. On AM 920 The answer on the weekends. It’s a big deal to us and we take it seriously. That’s why we do new shows every week. That’s what we’re trying to help people out. We’re going to this show so packed, we’re not going to be able to take up time doing a market update. We would encourage everybody to always check out Fox Business and kind of see what’s going on with the markets as well. But right now, let’s get straight into that financial wisdom quote of the week.

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

Producer:
All right. This week’s Financial Wisdom quote of the week comes to us from author and humorist Evan Azar. His quotes are commonly found in crossword puzzles. So if you like doing crossword puzzles, you may have read some of his stuff before. He also wrote 20,000 quips and quotes and Azar’s Comic Dictionary, and he lived a good long life for it, 1899 to 1995.

Ford Stokes:
Yeah, I almost made it to 100 years. I almost made it the century mark. And you know what? It’s a good lesson to learn. He was a humorist. He was pretty funny. If you keep your sense of humor and you don’t take life too seriously, you don’t take yourself too seriously, you’re going to live a long time. I’m not a doctor. I don’t play one on TV. But I will tell you, I have a lot of people that will sit in front of us and and they’ll sit in front of us for a long time in their annual reviews and things like that. And it seems like the ones that are the funniest, that are the most laid back, they kind of take what comes with life and aren’t as high strung. They tend to live longer. Also, we’re going to talk through on the smart, safe side. We’re going to try to message a couple of things that I learned I was on. I was very fortunate to be in a speakers panel with Tom Hagner, who is one of my retirement heroes. He’s a former 22 year veteran as a lieutenant colonel in the US Army. He he also was an economist, and he’s got some really insightful things to say about retirement income and and also how to get more efficient with retirement income, whether it’s tax efficient or fee efficient or even market efficient with those with that deal.

Ford Stokes:
And also how important the accumulation is during retirement, it’s also the most complex. And so he shared a couple of things that we learned we’ll share in segment two and three that is really going to surprise you. I mean, there are actual studies out there that we’re going to cite that that shows what happens when you’ve got a consistent paycheck coming in and what he calls a play. Paychecks and paychecks. And also, he kind of broke down the three different phases of retirement. You’ve got the go go years when you’re traveling and doing all the things and having all kinds of fun. Then the slow go years where you’re kind of slowing down and you’re kind of more of a homebody and then know go years when you’re not going anywhere and you’re making sure you’re staying close to health care and you’ve got to make sure you’ve got enough money to fund those phases and also got a plan for that, not just having one big nest egg and I’ll just take money out when I feel like it. And also trying to follow a 4% rule or also different strategies and ways to get more than that 4%, while not impacting your overall principle. And we’ll talk through that during the smart, safe segment of this deal. But go ahead and hit him with the with a quote there, Sam.

Producer:
Yeah, So Mr. Azar said some taxpayers closed their eyes, some stop their ears, some shut their mouths, but all pay through the nose.

Ford Stokes:
Yes, that’s right on right. I think I’ve told this story to a lot of people, but I don’t know if I’ve said it on this show before. So Diane and I got engaged 21 years ago down in Savannah, Georgia, and we were staying at the Gastonia and shout out to the Gastonia. And I’m not being paid for this endorsement, but you ought to try to stay there. It’s an amazing property and and it’s kind of like an Italian villa with two different houses combined to make up the hotel. And it’s a bed and breakfast. And we were there and all of a sudden we watched this lady come in for afternoon tea through a window from the porch. And I said, Wow, you’re coming in through the window. And she said, Yeah, there’s no doors to the porch because in Savannah, during Oglethorpe time, they were charged. Houses were taxed based on the number of doors that they had. And so people had large windows and led weighted windows to be able to go in and out of to get on their porch so they could avoid tax.

Ford Stokes:
So it’s universal and it goes all the way throughout all of history. But it is interesting. People are looking to avoid their taxes. But you know what? Death and taxes are real. And yes, if you don’t have a plan to a smart tax plan, you will pay through the nose for sure. And Amanda was absolutely correct on that one. And listen, when we come back from the break, we’re going to talk about. Reasons why you should meet with a financial advisor, why you should meet with us. We’ll also share our inflation demonstration. We’ve got some shocking electricity prices to share with you, and we’re going to dive into our smart risk, part of our Smart Retirement Plan. Right. We come back from the break. We’re so glad you’re here with us this weekend. Listen to the Active Wealth show. You’re listening to Active Well Show right here on AM 920. The answer and come right back where we talk about smart risk and how you can get a little bit smarter and more market efficient with your investments.

Charlie Kirk:
Charlie Kirk here. If you’re concerned about your investments, rising taxes from the Biden administration, then I encourage. You to listen to the Active Wealth Show hosted by my good friend Ford Stokes. Right here on AM 920 The Answer. Listen to the. Active Wealth Show Saturdays at.Noon and Sundays at 11. The Active Wealth Show right here on AM 920 The Answer

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of active wealth Management. Thanks so much for listening to the Active Wealth show. Make sure to rate us everywhere you listen to podcasts, including Spotify.

Ford Stokes:
And welcome to the Active Wealth show. I’m for Social Chief Financial Advisor and I’ve got Sam Davis on the board. With us is our executive producer and we’re talking about how to build a Smart Retirement Plan with smart risk, smart, safe and smart tax solutions this week. It’s one of the it’s really the most important episode or show within our Smart Retirement Plan series. We introduced it last week and we’re going to dive into deep detail here about smart risk, smart, safe and smart tax solutions. So let’s go ahead and talk about really the reasons why you should meet with an advisor and what kind of what happens when you come in and meet with us again, if you’re interested. And you’ve been a long time listener and and you haven’t called in, but you want to be a first time caller, I would encourage you to pick up the phone and give us a call at 770 685 1777 again 770 685 1777. And we’ll book a consultation with you directly with me. You won’t meet with any other advisor. You’ll meet just with me. I’m happy to help you protect and grow your wealth. Also you can visit ActiveWealth.com that’s ActiveWealth.com and click that set an appointment button in the upper right corner. And if you’re listening to us on Stitcher or Spotify or iTunes or Google Play or any of the other places where you can get podcasts, I would encourage you to visit Active Wealth Show dotcom that’s Active Wealth Show.

Ford Stokes:
And you can watch any of our episodes, especially when we’re doing this Smart Retirement Plan deal here. I think that’s a big deal. Also, I want to give a shout out to all the DECA. Contestants here in the state of Georgia. They were kind of competing on some marketing contest for high school. My my twin girls are sophomores at North Forsyth High School, and I am wearing the North Forsyth High School. Truckers had today shout out to the north. Forsyth Raiders also shout out to the high school competition team at North Forsyth who are who finished number two in the state at at the state competition. They lost a house in County, but they beat out a whole bunch of other great teams earlier in like in November. And go North Forsyth Raiders. We’re super proud of everybody over at North Forsyth and and it’s a great community to live in. We appreciate you letting us be in your community. I work and in Dunwoody and our our offices. We’ve got Dunwoody office in a midtown office and also a Kennesaw office. And we’re happy to help anybody in any part of Atlanta. We do work with some folks that make the drive up from Stockbridge and Peachtree City and get out of their golf carts and get in their cars to drive up to see us. And we always appreciate that. I love hearing about the lifestyle and Peachtree City, too, and also in Newnan as well.

Ford Stokes:
And so we’ve got a lot of folks that come to us also from Buford and Gwinnett and in Suwanee as well. And just shout out to everybody in all parts of of Atlanta, including Buckhead and Alpharetta and Roswell as well. And obviously, we can’t forget about Marietta and all everybody over there in Cobb County. So thanks so much for making us the number one listen to radio show. Like we said on the first segment and let’s talk about what happens when you come to meet with us, but also the reasons why you should meet with an advisor. So number one is. If you don’t have a formal retirement plan, you really should pick up the phone and call us or visit active dot com. Number two is if you don’t understand the risks you taking with your investments, then I would encourage you to do everything you can. To try to get a portfolio analysis, you need to understand the risk you’re taking, the fees you’re paying, and. Also the correlation of your assets. Number three is if you don’t understand how to manage risk in your portfolio as you get older. Also, if you don’t understand what’s a measurement of risk, a measurement of risk is standard deviation. And if you don’t know what standard deviation is or you don’t understand how risk is measured in the financial industry, I would encourage you to pick up the phone and give us a call at 770 685 1777 or you just visit ActiveWealth.com and click that schedule a console button in the upper right corner.

Ford Stokes:
Number four is if you don’t understand or you don’t know if you should pay your house off or not, we can help you make that decision. Chances are you probably should. But you also don’t want to overstress the portfolio. The happiest people we work with are one or folks who have their house paid off. They don’t have that that mortgage payment that’s that’s eating at them and draining away. One of the two Social Security payments that’s coming into the household. Number five is if you don’t have a health care plan in place for you and your family’s future. In April of last year, and I’m sure it’s gone up from here, Fidelity came out with a retirement survey and they determined that for married couple, a retired married couple, freshly retired over their 30 plus year retirement, they’re going to spend over $325,000, more than likely in health care throughout their 30 plus year retirement. That includes their Medicare Part A, Part B and Part D premiums. Also, if they’ve got a medicare supplement plan or also if they’re they’re paying for other visits and co pays and also if they don’t have a hospital indemnity plan. When they’re admitted to the hospital, they’ve got at least a $6,700 deductible. And you’ve got to have a plan for that, too. And we can help you with all of that.

Ford Stokes:
So make sure you have a health care plan in place for you and your family, especially as you try to get to Medicare and get to age 65 and beyond. Also, we see a lot of people that are retiring in their late fifties or early sixties that are still trying to get them Medicare and they’re paying way too much money for their health insurance. So if you’ve got questions about your health insurance, I’d encourage you to reach out to us and we’ll help you get into the right one that’s going to work best for you. And then number six is if you don’t understand what an expense ratio is, you need to you really do need to meet with an adviser. If you don’t know what the expense ratio is within your portfolio, then you ought to reach out to us at ActiveWealth.com or you can call us at 770 685 1777. Again, that number 770 685 1777. Now, an expense ratio is basically the internal fees that don’t show up in your statement, but they do drain the account and also show up in the overall total value of your account. An example of expense ratio that fees that contribute to an expense ratio would be mutual fund fees like 12 B one fees, which are marketing fees that, according to the Investment Act of 1940, allowed mutual fund companies to charge for marketing fees so they can fund their company as well. And when’s the last time you really saw a mutual fund advertise on television? The only one I’ve seen in the last five years is Q.

Ford Stokes:
Q. Q. And they advertise sometimes during the during March Madness. Everybody else, just all the other mutual funds. They just take their money and they they take those marketing fees and they put it in their pocket. Example would be a lot of mutual funds are in for one K plans, a lot of a lot of foreign K plans and 4 to 3 B plans have a lot of mutual funds that are stacked in Iraq in those funds, and they only have a certain number of funds available to you. And a lot of people have high expense ratios because of it, because they have 12 B one fees or they have a share fees or C share fees, a share fees or fees you pay on the front end with your mutual fund. And C, share fees are fees you pay on every year and you don’t have to pay on the front end. You’ve either got a shares with mutual funds or you have C shares of mutual funds. You really want to try to minimize the fees that are the internal fees that are in your portfolio? You may not know that there’s something called an exchange traded fund that is far superior and more fee efficient than a mutual fund. That still gives you the same diversification, if you will. The same diversification, if you will.

Ford Stokes:
Of a mutual fund. And you can also trade those ETFs within intraday. Whereas you have to wait to get the net asset value of shares and then trade at the after the trading day is done with mutual funds. So I would encourage you to get into exchange traded funds for sure and try to avoid mutual funds for sure and really get an understanding of how to reduce your expense ratio for one K plans. I’ve seen for one K plans come in with anywhere from like 0.68 all the way up to over 1% that are coming out every year that are just draining. On the actual. Four and K plan overall. And. That’s not right, because people need to know. Also, so many people that are getting ready to retire or covid’s affected them to retire early or their this economy is they’re getting a layoff with a layoff package and they’re looking to retire. We want to talk to you. We want to help you protect and grow your wealth and also reduce your expense ratio immediately. One other thing. We want to help you do everything you can. To avoid reinvesting those old orphaned for one case into the next for one K When you go in to work with a new job, we we work with a lot of professionals because obviously Atlanta is kind of a service economy and a lot of professionals here. In fact, within I think within ten miles of my office here at the King and Queen building on the 29th floor.

Ford Stokes:
There are over 150,000 jobs that make over 100,000 a year. In this Dunwoody, Sandy Springs, Buckhead, Roswell, Alpharetta area. And that’s remarkable. And so we’re here to help folks that are getting their nearing retirement. You’ve done a great job of saving. Now help us. Let us help you kind of protect and grow that money. We’ve only got a minute left. We’ll talk about the inflation demonstration. Right after the break. And we’ll get we’ll dive into smart risk. I did want to take a little bit of extra time on what you why you should really consider meeting with an advisor. There are so many people that really have no idea what’s going on with their retirement plan and they don’t want to spend any time on it. They’re spending more time planning their travel plans than they are planning for their retirement, and that’s not the right priority set, I think. And we’re happy to help you do that. So when we come right back from the break, we’re going to talk about our inflation demonstration, talking about shocking electricity prices. We’re going to talk about smart risk in detail. And we may get into some structured note talk and trying to talk about how that could be a good bond replacement for five or 10% of your portfolio. You’re listening to Active Wealth Show right here on AM 920. The answer, Come right back. Learn more about smart risk investing.

Producer:
Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit ActiveWealth.com to learn more and schedule an appointment. Thanks for listening to the Active wealth show and subscribing wherever you listen to podcasts.

Ford Stokes:
And welcome back Activators the Active Wealth Show on Ford Stokes for Chief Financial Advisor. I’ve got Sam Davis on the board with me as our executive producer. Sam, why don’t you go ahead and share our inflation demonstration for the week where you’ve got some shocking electricity prices?

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

Producer:
On this week’s inflation demonstration. We are looking at energy costs, specifically electricity. And here it is. Consumers paid 14.3% more for electricity last year on average compared to 2021. And this is according to the consumer price increase data released by the US Bureau of Labor Statistics. The price of residential electricity is projected to rise slowly in the coming years in it’s going to jump to 15.0 $0.07 a kilowatt hour, or it did jump to 15.7 cents a kilowatt hour last year and it’s projected to rise to 15.4 $0.05 a kilowatt hour and by a penny more in 2024. Another note electricity to heat homes is expected to cost 10.2% more this winter over last winter. I know the northeast and the northern part of the United States has had some tough winter storms this year. Lots of snow up in the Buffalo and upstate New York area. So energy costs 10.2% more just because of the winter storms this year. And that’s according to the National Energy Assistance Directors Association. So I know I’ve been taking a look forward at our natural gas and electricity bills at the house, and we’ve seen some of the most expensive and costly bills over the last few months than we have before.

Ford Stokes:
Again, and why we’re sharing this, everybody. So as you’re listening, driving around Atlanta right now, heading Home Depot or Lowe’s or or Publix or Kroger or going to a kids athletic event, I got to tell you, this is a problem because this is a non discretionary expense. Are you going to heat your home or not? When it’s ten degrees outside, you’re going to heat your home. And I mean, granted, we don’t have a lot of ten degree days, but we’ve had some cold days this winter already. And and at 10%, 10.2% growth on electricity prices to heat your home. The cost of living adjustment from Social Security ministration was 8.9%, 10.2% more than that. So that’s impacting. The budgets of retirees. And it is not right. It’s not fair. And so you’ve got to have a retirement income plan for this where your money is growing with the market or growing with inflation and then also is protected against loss. And we’ll talk through that on Smart Safe here in the next segment. So glad you shared that. And that’s great information, Sam. All right. So now let’s dive into smart risk investing. So what we encourage you to do is build your Smart Retirement Plan by considering the risks you will face during retirement and learn how to best handle them and how to minimize those risks.

Ford Stokes:
Smart risk investing is an investment strategy designed to maximize returns while minimizing risk. Smart risk investing is based on the concept that all investments carry out some amount of risk and then only. And that the only way to reduce that risk is to diversify. Diversifying means investing in a variety of different asset classes, such as stocks, bonds, real estate, commodities and other financial instruments. We like bond replacements with fixed indexed annuities. That kind of fits to that smart, safe type of investing. But also investors need to consider their individual needs and goals as well as their own personal risk tolerance as well. So here are some of the risks that retirees and pre-retirees are facing and things that you really need to consider. So number one would be market risk. Your portfolio will be affected by changes in the market. That’s either systematic and unsystematic risks could cause drastic changes in your investments. Be prepared for volatility and uncertainty in the market by practicing tactical asset allocation. Tactical tactical asset allocation is basically rebalancing, at least on a monthly basis, to asset classes. So you don’t ride the the negative downturn curve all the way to the bottom. Number two would be interest rate risk. So you’ve got interest rates change when there is a dip or a rise in the overall economy, changes in the interest rates can have significant effect on American families and they can affect the economy as a whole.

Ford Stokes:
Example would be what Jerome Powell and the US Fed did last year because we printed a bunch of money ever since COVID and now they’re just going up on interest rates, trying to fix it through monetary policy. And that’s not that’s only one leg of the stool to fix it. I mean, I think we need to have. Better fiscal stewardship and responsibility in the US government and not just keep writing checks that don’t have backing. It’s crazy. We need to do a much better job with that. Interest rates can definitely affect it. That’s why we saw the 6040 portfolio have one of the worst years it’s had since Harry Markowitz was given credit for being the founder of Modern Portfolio theory in that 6040 portfolio in 1952. That’s a 70 year old strategy and that the 6040 portfolio, it was the worst year in 40 years for 60% stocks and 40% bonds. That’s 60% stocks and 40% bonds. Because bonds lost over 14% last year. It’s just a fact and that US corporate bonds lost that kind of value. And let me ask you, why are you doing that? You need to get smarter. Why are you facing interest rate risk in your portfolio? You really shouldn’t other than with securities.

Ford Stokes:
You should take the income portion of your portfolio, which is likely 40% of your portfolio, and you ought to invest in fixed indexed annuities, invest in more smart, safe investments. That’s something to consider because bonds are giving you income anyway, right? Well, guess what? Fixed indexed annuities give you income. Also, you don’t invest in bonds to get real market like gains, right? Because you’re just trying to get income from the bonds. You’re not it’s not traded like a common stock. They’re traded, but they’re don’t have the same upward mobility for earnings and things like that. Earnings reports and things like that can that can really affect how the common stock is viewed and the multiple on that you’re getting paid out by the company. If you’re buying a US corporate bond, you’re getting paid out by the company, you know, a coupon rate and then you get paid your principal at the end of of that duration on the bond. I got to tell you. I don’t know why anybody is investing in US corporate bonds right now, and I don’t know why they shouldn’t be investing in fixed index newbies instead, especially with the US Treasury rate being at one of the higher levels it’s been literally throughout my career. It’s not like 3.5, 3.6% and it was as high as 4.2 in December. You’ve also got inflation risk.

Ford Stokes:
Are we all facing that right now? Yes. You’re facing inflation risk right in the face. You’re dealing with double digit runaway inflation right now. And that really hurts the savers. So you’ve got to make sure that your money is growing and you’re invested, whether you’re invested in fixed indexed annuities to get market like gains or whether you’re also invested in US equities and things like that. Public policy. We’re seeing a dramatic difference between a Republican in the White House and a Republican Senate and a Democratic Senate and a Democratic president. It’s a dramatic difference. And they’re trying to go up on taxes there. They’re deeply impacting our energy independence by attacking US oil. It’s just a problem. Also. Timing. You’ve got sequence of return risk, you know. Anybody have any losses last year? Well, guess what? Those losses last year, you’re going to have to come back even more off of a lower base this year and next year to make up for the losses from last year. So you need to tie up some of your money into some smart, safe investments as well. Also liquidity. You’ve got liquidity risk, the ease at which you can an asset can be bought or sold in the market without affecting the asset’s price. You want to have a plan that allows sufficient access to your savings and funds.

Ford Stokes:
Sequence of return. We just talked about. Those sequence of return risk can be a real problem. It’s kind of timing and sequence return to risk, kind of kind of feed into each other. But the timing also affects when you plan to retire. Folks who who retired in 2008 was a big deal because they saw a 38% loss and they didn’t have income. That’s a bad time to retire. If you have things like that, you might want to consider lengthening your you’re working for another year or two. The greatest wealth generator is your income. It’s not what your portfolio can do for you. It’s your income. That’s first. That’s how you got the the nest egg in the first place. You may want to hang out and work a little longer. Also, longevity risk because you are going to live longer than your grandparents, especially if they smoked and you don’t. I would strongly encourage you to consider living, to plan and work a little bit longer to fund those extra years that you’re going to live. And also you want to spend more time with your family and also can make those go go years when you’re traveling in the first ten years of your retirement. Really great. Go. Go. Yours. Imagine how much more travel you could do if you’re making another 200 grand and adding that on top of the pile.

Ford Stokes:
Also to let you get acclimated with getting into a budget because there’s tons of people that don’t think they’ve really been budgeting and all of a sudden they really need to budget because they’re living on fixed income. It does change in retirement. Also, we want to define that red zone of retirement. It’s the five years before and the five years after retiring. You need to not. Take out more than 4% of your assets. In the first few years of your retired and you need to really over save and do catch up revisions all kinds of stuff in the five years before you retire. The other is just excess withdrawal is another risk. You’ve got too many people that are taking out more than 4% if you take out 10% a year. You’re going to run out of money. In 12 years. I’m telling you, you’re going to have some growth, but you’ve got to be very careful. All right. We come back from the break. We’re going to dive into more risks and we’re going to dive into what you can do with smart risk investing and smart safe. We’re so glad you’re with us here on this important special edition of the Active Wealth show, where we’re talking about Smart Retirement Plan with smart risk, smart, safe and Smart tax investing.

Ford Stokes:
And welcome back activators I’m Ford Stokes, your chief financial advisor got Sam Davis our executive producer with me. This is segment four and this this show is flying by. We have kind of gotten through a lot of the smart risk side. We’ve got to get to the smart safe here. And we’re probably going to run out of time and not be able to do the smart tax side. So we’ll do the smart tax side next week. So let me finish up on smart risk. These are some of the risks that people are facing. We’ve already gone through a long list. We’ve also got health expenses. Again, we talked about know you’ve got health expenses of of what’s likely going to be 325,000 for a married couple over their 30 plus year retirement. You’ve also got the loss of spouse. So when the loss of a spouse, when a spouse passes away, they get the largest of the two Social Security payments that are coming into the household. But they’re losing the the lowest one. And so they’re going to lose up to 33% or more of the secretary income that’s coming into the household. And you better have a retirement income gap plan for that and we can help you. All you’ve got to do is visit us at ActiveWealth.com and click that schedule a consultation button in the upper right corner and you’ll get booked in an appointment directly with me.

Ford Stokes:
Also, re-employment risk you’ve got. While some retirees may enjoy going back to work, many don’t want to go back to work. You’ve got to make sure your savings are enough to cover your living expenses and give you the quality of life that you want in retirement, because you don’t want to have to say, Hey, welcome to Walmart or stock shelves or go work at McDonald’s. You might want to go back to work over at Chick fil A. We’re big fans of those folks, but you may not. And so and also you’re likely going to find it if you’re out of the workforce for 2 to 4 or five years, you may find it more difficult to make the same kind of money you were making before if you do need to go back to work. Also, let’s one big tip here. Let’s watch out for fees because that’s something we can control. I mean, the markets, we don’t necessarily we’re not able to control, but we can worry about fees and we can also reduce our taxes that we pay. And so with proper planning, let’s worry about the things we can control for sure. Now let’s go straight into smart, safe investing, mainly with smart risk. By the way, it’s doing a better job at managing risk, doing some bond replacement and putting stuff into smart, safe investing. So it’s a good segway into smart safe investing, but also with smart risk investing, implementing tactical asset allocation and rebalancing.

Ford Stokes:
Having diversity and diversifying your portfolio is a good idea as well. Also, watch the correlation of your assets. Try to reduce that and also reduce some of the fees you’re paying and the risk you’re taking with that smart, safe, that smart risk part of investing. Now let’s go into smart, safe, smart, safe investing is an investment strategy designed to generate the highest possible return while keeping risk to a minimum, not reducing risk, but keeping risk to a minimum. Here, fixed indexed annuities are insurance contracts that provide a guaranteed income stream for your retirement. They’re seen as an alternative to traditional bonds and provide a way for investors to protect their retirement savings from market volatility. Fix the next Annuities are designed to provide protection from market downturns while providing potential for growth. Did you know investors in fixed indexed annuities? It’s been proven they actually live longer. Wall Street Journal and Time Magazine both had studies in the last decade that detail that that is remarkable. Also Jane Austen in sense and sensibilities. She mentioned it in the 1800s in chapter two of her book and it talked about how people on annuities live a long time and they are no joke and you need to count on people living a long time also gives incentive for people to live to that next paycheck When you have a fixed indexed annuity versus just having money in your account, it’s I mean, it’s real and you will you will live longer.

Ford Stokes:
It is statistically proven that if you have an annuity versus if you don’t and also if you have a fixed indexed annuity, it’s a really good idea because that way you get market like gains without market risk. I’m not a doctor, I’m not promising the case, but statistically that’s that’s what’s shown out over time. Benefits of fixed indexed annuity include protection from market volatility. Fixed indexed annuities provide protection from market volatility. Since the annuity is linked to the performance of an underlying stock index, the income is not directly affected by short term market fluctuations. This makes them an attractive option for investors who are looking for a steady and reliable income stream. Is that you or are you looking for a reasonable rate of return and a steady and reliable income stream? What We can help you do that. Also, if you want to reduce and delete a portion of your advisory and portfolio fees, guess what you can do. All you got to do is reach out to us, invest in a fixed indexed annuity because there are no portfolio and advisory fees from. The advisor and the management company because they can’t double dip in that. So we don’t do that. So it’s a nice way to delete 40% of your portfolio fees overnight and keep them that way for the next 35 plus years during your retirement.

Ford Stokes:
Also, tax deferred growth. This means that any earnings on the annuity are not subject to taxes until the annuity income is withdrawn. So tax deferred growth is attractive. It makes it more tax efficient. Next is a lifetime income stream. Don’t worry about breaking your budget. Enjoy your discretionary money with an income you can count on and never outlive. I mean, it’s mailbox money. People love mailbox money. One of the big jokes that I tell that a rice farmer told me was, Hey, you know why farmers hats are bean in on the sides is when they’re looking in their mailbox for the government subsidy check. And a lot of people are probably laughing at that one. I did, but it was nice to have a rice farmer tell me that when I was duck hunting with him one one day. And it was pretty neat stuff. I mean, I would imagine you would like mailbox money, too. And by the way, that’s what a pension is. A pension is an annuity. And if you’re thinking about taking a pension and starting your pension, if you got the ability to take a lump sum, we’d love the opportunity to help you make a decision whether you should take the lump sum or not.

Ford Stokes:
Chances are we can get you between a ten and 20% bonus on your money and also get you market like gains. A lot of pensions are spears. They’re single premium immediate annuities. That’s a single premium immediate annuity spy A and they’re really good at paying your money back but they’re not really good at at growing your money because they’re not tied to a market index like a fixed indexed annuity is. And I want to make sure you understand that a fixed indexed annuity is there as a contract between you and the insurance company. And they have to reserve 100% of the money you give them into the ten year US Treasury, and then they take the interest from that and they invest it into options, into indexes like the S&P 500 or the BNP Paribas Global Factor Index, which is an index that follows the health care market or the Credit Suisse Raven Pack or other indices out there. And I want to make sure you understand that getting a retirement income is really important, and understanding what to do during a de accumulation phase is really important as well. It’s also the most complex, you know, when you’re going to sell assets, what is the tax implication of your selling assets? What are the tax implications of you taking money from your IRA? Have you considered doing a Roth ladder conversion? All these factors factor in.

Ford Stokes:
And did you know also that you can invest in a fixed indexed annuity and still implement a Roth ladder conversion within that annuity? We work with companies that do that. We’ve got annuity companies that set up subaccounts that allow you to do that. We’re happy to help you do that. Next week we’re going to talk in depth and we’ll probably spend most of the time talking about smart tax. But let me give you a couple of quick introductions before we go to the final countdown. Did you know that different investment accounts are taxed differently? By understanding how different accounts are taxed, you can ensure that your money is working and how you need it to work and when you need it to be able to withdraw and to be able to enjoy that money and be able to spend it with smart, safe, you’ve got paychecks and paychecks. We want to help you get paychecks. We want to help you understand where you can go play golf and have a great time and travel and do all those things. We don’t want you to live just a just in case retirement. And people are like, well, I can’t really spend that money just in case. Well, guess what happens when you die and you pass away and the money moves to your kids? Guess what they do? They go and join the country club. They go travel, they play golf, they do all the things on the money that you save that you didn’t live with.

Ford Stokes:
And I want you to live a robust and fun retirement because guess what? Your kids are going to spend more time with you if you do. So we’re all about you doing a great job today. We really dove into smart risk investing and smart safe investing, and we ran out of time for smart tax. But we’re going to come back talking about growth ladder conversions on next week’s show in depth. And we’re going to talk about the top two, the only two tax free investments out there that are truly tax free, that don’t contribute to Social Security, income, taxation and also Medicare surcharges. And that’s Roth IRAs and life insurance. That’s it. And I think you’re really going to like next week’s show. We’re going to dive into how you can divest the IRS from your retirement accounts with those two strategies with Roth IRAs and life insurance. And by the way, one of the largest groups of group buyers of life insurance are actually folks in their sixties. It’s not too late to do that. If you want to do that, we can help you generate tax free income with a five pay or a ten pay index, universal life policy, or how to generate tax free withdrawals from your Roth IRAs. We’re going to dive into all that next week and I hope you definitely listen to us next week on the Act of Wall Show.

Ford Stokes:
Hope you found this week helpful. This week’s show helpful about what to do when you expect when you meet with a financial advisor and why you should meet with a financial advisor. Also, we encourage you to reach out to us at 770 685 1777 again 770 685 1777. And Sam talked about have you been a long time listener but you’ve never been a first time caller. Maybe this week is the time to be your first time caller. Go ahead and reach out to us. We’d love to talk to you. We’d love to help you. And also, it’s a $500 value. We give you a full portfolio analysis and full retirement plan between now and your 95th birthday with a Roth ladder conversion plan at no cost to you for $5,500. We do that absolutely free. No cost to you. It’s a one $500 value. So again reach out to us at ActiveWealth.com that’s ActiveWealth.com. We’re so glad you’ve been with us and again thanks for making us number one listen to show on the weekends on AM 920 answer it’s a big deal we appreciate you and remember if you’re going to be a bear be a grizzly. Seek out as much information you can to protect and grow your wealth so you can retire successfully. And have a great week, everybody.

Producer:
Thanks for listening to the Active wealth show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets, To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at 770 685 1777 or visit ActiveWealth.com.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC become a Registered Investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

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

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