Building a Smart Retirement Plan: What is Your Vision for Retirement?

12.8.23: Audio automatically transcribed by Sonix

12.8.23: 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. And welcome to the.

Ford Stokes:
Active Wealth Show Activators. I'm Ford Stokes and chief financial advisor. I've got Sam Davis, our executive producer here. Sam, say hello to everybody.

Sam Davis:
Welcome to the Weekend Activators. I do hope everybody is enjoying the holiday season. The Active Wealth Show is back once again this weekend to bring you very important information forward. Last week we started the Smart Retirement Plan series. And this week we're going to continue it once again. It was a big hit last year with all of the activators as we look to help build some good momentum into 2024 for everybody out there. So you can make 2024 the year you put that retirement plan in place, and you've got something to look forward to as you approach your golden years.

Ford Stokes:
Yeah, super excited about this show. Uh, I'm really pumped up to get already started on their. New Year's resolutions. So we're going to assume this is a New Year's resolution that you want to improve your financial standing. You want to improve your retirement plan. You want to improve the income you'll be able to generate during retirement. You want to improve your tax efficiency, your market efficiency, and your. Portfolio efficiency as well as you just make sure you're more efficient. We're pretty sure that you want to do that. And if you do, this show is the show for you. It's also a show to go to Active Wealth Show.com and go ahead and bookmark it, or make sure you watch it a second time. This one's an important one. And so today we're going to talk about how to build a smart retirement plan for 2024 and beyond. We're going to talk about five key areas. There's 26 key areas or core. Processes you need to really pay attention to for a really smart retirement plan that we put into the Smart Retirement Plan book that's going to come out in Q1 of 2024. We're going to talk about five of them today, and we're going to take them one at a time. And I think you're really going to like what you hear this week. And I think it's going to get you on the right path. So again, shout out to the activators. Really appreciate you guys and gals and the people that are listening to us. Or activators. If you're wondering who an activator is, somebody listens to this show.

Ford Stokes:
They listen to the Active Wealth Show. There's somebody who wants to build that tax efficient, fee efficient and market efficient portfolio. And they're also somebody who's just looking to build a safe and sound retirement. And. One thing that. Three of my clients told me yesterday. Sam. They're like, just really appreciate it. The ability to diversify beyond the financial markets with you. We like the ability to invest in insurance products or invest in brokerage CDs that are not necessarily, you know, bank cities or not necessarily money market funds that that still have some interest rate risk. We like the fact that we can get a, you know, a brokered CD offered by a A+ rated bank that's paying 5.6%. We like the fact that we can get structured notes that are paying much higher than that, that have some principal protection. We like the fact that we can get. Fixed indexed annuities and insurance products is a way to diversify the income portion of our portfolio. And also, we like the fact that we can delete 40 to 50% of our advisory and portfolio fees by doing that. And so I just want to give a shout out to Jimmy and Keith and Joe. I just appreciate all three of you guys. And, um, two of them used to work together at Goodyear, and they now work at a major manufacturer here in Atlanta. And, uh, it was just great to be able to spend time with them. And over lunch, and I just appreciated that opportunity, and it was just great to get those guys in the office and to have a little lunch and and kind of check in.

Ford Stokes:
So important end of year reminder. We've got required minimum distributions that you got to take this year. As we approach the end of the year, it's important to remember that the deadline for taking your RMDs is quickly approaching, which is December 31st. And for most custodians, you're gonna have to do it before the 15th of December. We do this proactively with all our clients to help them plan annual distributions in an efficient manner. Missing the deadline could result in significant penalties, so be sure to mark your calendars and prioritize this important financial task before it's too late. Required minimum distributions or RMDs from employer based retirement plans or traditional IRAs. Will be due on December 31st for most people 73 years old and older. Next we're going to talk about a smart retirement plan. We're going to start with the top three things. For a smart retirement plan in chronological order. Number one is a smart vision for your retirement. What is your smart vision for retirement? Number two is a smart inspection of your current plan. Next we're going to talk about smart safe. How to build a smart, safe portion of your portfolio. We'll talk about what it's like to work with us. Are we going to help listeners just like you to protect and grow their hard earned and hard saved assets? Sam, we're going to start with you. Go ahead and give us and share that financial wisdom. Quote of the week.

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

Sam Davis:
This week's quote of the week comes to us from one of our favorites forward Warren Buffett. The Oracle of Omaha and Warren Buffett once said, the most important thing to do if you find yourself in a hole is stop digging. And I love this quote forward, because I feel like most of us out there are able to recognize when we're not doing as well as we should in some particular area of life. And the important thing is to recognize that and stop digging, like Warren Buffett says. And what I would ask everybody out there listening, especially those who are in the retirement red zone, you know, coming up that decade before retirement, or maybe you've recently just retired, are you 100% sure you're going to have a great retirement, or do you have some doubt? Because if you have some doubt, we're here to help you. And 2024 is the year that you can get it together. And get to the things you can count on for a successful retirement.

Ford Stokes:
Yeah. Hey man, I love this quote. I think it's definitely one of the most important financial quotes ever, but it's also one of the most important quotes for your career, also for your personal life. Um, it's just one of those really important quotes. And so I would just. Remind everybody. The most important thing to do when you find yourself in a hole is to stop digging. Let's don't dig. Let's don't keep digging, let's do something different. I'll give you a perfect example that relates directly back to the financial markets the last three years. The 6040 portfolio. Harry Markowitz was given credit for being the founder of in 1952. He was an economist and what he said was. If you put 60% of stocks, 60% of your portfolio in stocks, and 40% of your portfolio in. Bonds, you'll get an efficient frontier for consistent growth over time. Of your portfolio. Well. The 6040 portfolio had its worst year in the last 41 years. In 2022. But over the last three years, bonds have taken a hit and have lost value. Market value year over year because of interest rate risk. Because the the fed has raised interest rates. Therefore, people that have held bonds three and four years ago, those bonds are worth a lot less than they are worth today. And so we've got to do more than what we're doing.

Ford Stokes:
We've got to do a better job than what we're doing. And I would encourage you to do something different. I would encourage you to consider replacing your bonds with fixed indexed annuities as an example to get to a smart, safe part of your portfolio. But that's an example of if you find yourself in a hole to stop digging. And. We're going to talk about our Smart Retirement Plan series. Um, when we come back from the break. But here's why it's important 75 million Americans, mostly baby boomers, are expected to retire by 2030. It's actually called the Great Retirement. As so many of you listening, prepare to leave the workplace and start the next chapter of your lives. Here are the results from the State of Retirement Planning study from Fidelity Investments. 1 in 4 Americans are less confident about retirement now than they were before the events of the Covid 19 pandemic. 71% of Americans are very concerned about the impact of inflation on their retirement preparedness. And lastly, 31% of Americans don't know how to make sure their retirement savings keep up. With their expenses and inflation, we come back. We'll get right into how to build a smart retirement plan for your retirement future using the Active Wealth Show right here on Am 920. The answer?

Jim:
The holiday season has morphed into crunch time for companies in the sports apparel space. I'm Jim Tarabukin. With the Retirement.Radio Network powered by AmeriLife, tis the season for shopping. It's that time of year when Americans flock to stores and websites to complete their holiday gift to do list. But as Gerald Storch of CNBC explains, the American consumer may have a bit of a shopping hangover from 2022.

Gerald Storch:
What happened is during the pandemic, consumer had a lot of money and they spent it, so sales were really high. Now, as things normalize somewhat, the comparisons aren't very.

Jim:
Good for many sporting goods brands like Nike, Under Armour and Adidas. This time of year is very critical to get the customer engaged and ultimately to buy. All three of those. Industry giants have suffered revenue and double-digit earnings declines in recent months. Companies in the sports apparel space like Dick's Sporting Goods have had to weather a downtrend recently in 2023, but Dick's president and CEO Lauren Hobart, has taken a more optimistic approach, saying, quote, we are very excited about what we have within our control for quarter for a sediment, Wells Fargo equity research analyst Will Gardner echoes. Look, I.

Will Gardner:
Mean, they clearly have momentum going into the holiday. Interestingly, you know, we had cut numbers going into the print credit card and traffic data. So, you know, they kind of bucked that trend.

Jim:
Sports retailers and apparel companies still remain positive about holiday sales. And look to deliver a wonderful holiday shopping experience on behalf of the entire Retirement.Radio Network crew. I'm Jim Tabarka. Wishing you a wonderful holiday season.

Producer:
Not affiliated with or endorsed by the Social Security Administration or any other government agency. 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 Back Activators, the Active Wealth Show here with Sam Davis, our executive producer and retirement income specialist with Active Wealth Management. So we are talking about how to build a smart retirement plan for your retirement future, how to build a a smart and safe and sound retirement plan that will keep up with inflation in. And help you meet all of your expense needs on a monthly basis, and also have money left over for legacy. Also, how to build a tax efficient. Portfolio for retirement, and also when you pass away to be able to pass on tax free items to your heirs, to your kids and grandkids. All right. We're going to start with the first element. It's chronologically the first step in retirement. And I'm going to overstep my bounds here a little bit as a financial adviser and as your radio co-host. I'm going to ask you a question. So do you have a smart vision for your retirement? I don't want you to close your eyes and think about it while you're driving. Why don't you be safe here? But I've got some questions for you to ponder before you start planning for your retirement future. First question is, what are you doing during your retirement years? Are you fishing or are you playing golf? Are you? Going on a quarterly basis to the Highlands with all of your girlfriends, are you? Spending more time at the lake with your family. Are you spending time at the beach with your family? Are you managing rental properties? Are you? Doing a great job at Christmas and Thanksgiving for your family, where everybody comes back to see you.

Ford Stokes:
Are you volunteering at church or are you volunteering with other groups? Are you? Trying to help out veterans who've done so great in keeping us free. What are you doing during your retirement years? Just. Just to ask yourself, okay, what are the things I want to do during retirement? Do you want to really? Try to reduce that handicap or or do you want to play more pickleball or do you want to play more tennis? Do you want to get that? Ever elusive and really important Alta tennis plate when you win city. I've won a few of those and it's been a big deal. All right. That's question number one is what are you doing during your retirement years. Number two is who are you with? Who are you spending your time with? Those are separate questions. Number three is who are you taking care of? There's over 40 million unpaid caregivers in the United States, and that that number is going to continue to balloon up over 50 million by 2030. According to industry estimates. Number four is do you have any specific goals for retirement? Do you want to relaunch versus retire? The definition of retire is to withdraw. You really want to withdraw from society? Do you really want to be? What? My. 78 year old uncle says, oh Ford, I'm just a has been real estate guy. He's not he's not a has been real estate guy. Uncle John Ford I love him to death. He's the greatest uncle growing up because he believed that he dies with the most toys wins. He had ATVs and waverunners and boats and and he would take, take me duck hunting and all kind of stuff.

Ford Stokes:
It was awesome. But that guy continues to relaunch his. He still owns a lot of properties and invests and still collects, rents and does all that stuff. Oh, do you want to relaunch? And then. The last question I've got for you. With his smart vision part is, and it's one of the more important ones. It's not the most important one of these questions, but it is an important one. Are you going to fund all of it? How are you going to fund taking care of the people you want to take care of? How are you going to fund what you want to be doing in retirement? I mean, do you want to go and go on a worldwide bow hunting tour where you're going to get. The Super Slam and get a bunch of North American and African animals with your bow and and taxidermy and put them all up in one room because your wife won't let him have it. Have it in any other room. Do you want to spend more time with your family? Do you? You know, and I guess so, figuring out how are you going to spend more time with your family? Warren Buffett says the definition of success is having the people that you love want to spend more time with you. Sometimes that takes dollars to do that. Also, do you want to go down to one house instead of 2 or 3? Do you want to go from one house that's sitting here in Atlanta, Georgia, and and then sell that and then go to a lake, you know, go to Lake Oconee or Lake Hartwell or.

Ford Stokes:
Or Lake Raven or Lake Burton or Lake Martin in Alabama. Do you want to go to 38? Do you want to go down to Sea Island in Saint Simons? Do you want to go to Hilton Head? Do you want to go to Kiawah? How are you going to fund all this stuff? You know, you're going to say, well, I'm going to fund it, some of it with the proceeds of my home or to fund it somewhere out of my 401 K that I'm going to roll over to an IRA Ford. Okay. Did you did you also understand that? Your 41K is not 100% yours. You've got a partner in that account, and that partner is the federal government and the IRS and also. If you stay in the state of Georgia, it's the state of Georgia government as well, at 5.75%. So. You want to get a plan for taxes as well, but how do you how do you fund it. All right. And then next is are you. You might be concerned about outliving your savings. You might want to reduce the risk and protect part of your retirement savings. And you may also want to reduce and delete fees from your portfolio as part of funding your portfolio. Those are all great things. To consider with Smart Vision, and we've spent a little extra time on this, because I want to make sure you've got a vision for your retirement. Sam, your thoughts on. Our clients are building a smart vision for their retirement and just. Your recommendations to folks? Yeah.

Sam Davis:
Well, first we encourage all listeners, anybody who gives us a call prospects to do this. First, because this is really where retirement planning begins. Before we get out the calculators and the spreadsheets and start considering investment options, we've got to know what the objective is, what the goal is. And hey, the holidays are a great time to get with your spouse. You're spending time with your family. Talk about what you want to do over the next ten, 20, 30 years, and that's going to help you determine how fiscally smart you need to be now, any action you need to take now in order to be able to do what you want for the next ten, 20, 30, 40 years. So retirement looks different for everyone. That's okay. But regardless of whether you want to travel, spend time with family, start a new business, pick up those hobbies. You're going to need that income. You're going to need that cash flow in order to fund your expenses and achieve those goals. So first step in building a smart retirement plan is form that smart vision. And then we can get started.

Ford Stokes:
Absolutely. Yeah, it definitely is a great starting point to help us get going for you. Kind of want to talk about smart inspection next. The next thing you need to do is really inspect what you expect regarding your current financial plan, your current retirement plan. You want to review your accounts, you want to review your IRAs, your 401, and anywhere where you hold assets, investment accounts, savings accounts, etc. you want to understand the risks you're taking, the fees you're paying, the correlation of your assets. And how you can generate income from them a great way. Great rule of thumb to figure out how much you can generate an income from each one of your assets is to just apply the 4% withdrawal rate. So if you've got $1 million for one K and you're about to roll it over into an IRA, and many of you listening are probably retiring in the next year, maybe the next three months. I would encourage you to reach out to us at (770) 685-1777 again (770) 685-1777. Or you can visit Active wealth.com and click that schedule a consultation button in the upper right corner. You'll get booked directly into my calendar. Um. You also want to review the rates of return that your portfolios had. The last 12 months three. Three years. Five years. You understand your internal rate of return, but that average rate of return for sure. You also want to determine this question. You want to get an answer to this question. Do you have a retirement income gap or do you have a retirement income surplus? We can help you with. An annuity x ray on any annuities or pension plans you currently have, and determine the best personal pension options currently available to protect your hard earned and hard saved wealth.

Ford Stokes:
We'll also help you determine if you have a tax problem. And we just met with a gentleman last week who's a long time listener who called us for the first time two weeks ago. And. He came in for lunch. We had. We had Longhorn. And, uh, he really enjoyed the salmon I had that I had a fillet and. He just was like, you know what? I've got 1.8 million. But I have 1.2 million sitting in. My retirement accounts and. It's the first time I've really realized. How much tax exposure I have and how much of a partner in retirement. The federal government is with my retirement and also the state of Georgia government. And I've got to figure this out because we're not moving to Florida. We're going to stay here in Georgia with so much family here. And I really need help with a Roth ladder conversion, and that's why I'm here. And that may be one of the reasons why you would want to call us at (770) 685-1777. Go ahead and reach out to us. We're happy to help you. We'll also consider your family real estate assets, whether you got your family home, rental property, etc.. We're also review any life insurance policies and coverage you may have. What is the cash value of your life insurance policies? How much money is available for tax free withdrawals? And also provide you with a Social Security maximization report. We'll dive into that in detail here. Right when we come back from the break, or when we're continuing to talk about how to build a smart retirement plan for your retirement future. You're listening to Active Wealth Show right here on Am 920. The answer?

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short terme 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. Remember, all of Ford's listeners receive a free financial consultation just for listening to the show. Visit Active wealth.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. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis here on the mic with us and also on the board as our executive producer, also our retirement income specialist, and we're talking about how to build a smart retirement plan we've just talked about. Two important parts of a smart retirement plan, which is smart vision. Getting a vision for retirement. What are you doing? Who are you with? How are you going to fund it? The number two is we talked about smart inspection. Really getting your portfolio looked at when we give a portfolio analysis and a financial plan to your 95th birthday. We do that? Absolutely for free, at no cost to you. It's a $1,500 value, but we do it on the front end because we want to make sure that you can make an informed financial decision about your retirement future. Part of that smart retirement plan involves income. But the most important part of income, really the number one or number two important sources of income for retirees in the United States of America, for Americans is Social Security income, that Social Security income benefit, and how to maximize that social security, that Social Security benefit is really important.

Sam Davis:
The Social Security maximization report is probably everybody's favorite part of the smart inspection process, because that's where you can start getting to what can be expected as far as income sources during retirement. That's the first thing we want to do, is figure out how you can get the most for what you've paid into during your whole career, and that favorite part of the smart inspection process for everybody just got so much better at active wealth management because you for this month have passed the Social Security Registered Social Security Analysts exam. You've gone through the training and now you are a registered social security analyst and are able to serve the clients, our prospects, the activators, so much better with some great information. And could you tell everybody a bit more about that?

Ford Stokes:
I was really happy to be able to do that. Um, the folks at RSA had contacted me because of the radio show, and there's only 15 registered Social Security analysts in the state of Georgia. I'm the 15th, so I am very proud of the fact that we're able to do that. I was able to get that done. And. I learned so much through the process. It's it. It's over 50 hours to go through all the materials, and there's over 2000 decision points within Social Security when you're trying to determine. Potentially when to turn on Social Security and also to the different points, whether you've got dependent children, where you've got widows or divorcees or widowers or married couples or single single folks and. There's just a lot to it. And there's a lot of ways you can maximize your Social Security benefit, especially if you're a married couple, or especially if you've been divorced, or if you are to receive a survivor's benefit. And. I would love to be able to help. Each and every one of you is listening to our show, and what I would encourage you to do is to just reach out to us and visit Active wealth.com. Click that schedule a consultation button in the upper right corner. Happy to get going. I've also got another way for you to get started. You can actually start with your own RSA roadmap with my personal link. Rsa stands for Registered Social Security Analysts. You go to KSAT.com slash sr. That's rsa.com/srhr Sams brought it up here on the screen.

Ford Stokes:
For those of you that are watching on Active Wealth Show.com, and you can really get the Social Security benefits you deserve, the average household loses over $110,000 in potential income by making the wrong Social Security claiming decisions, and we can help you get the money you earned and you're entitled to. Your situation is unique. We're happy to help you. So I would encourage you to visit RSA Comcar or just go ahead and reach out to us at Active Wealth. Com and click that Schedule Console button in the upper right corner, and you'll get to work with me directly. What we do is we take your Social Security statement, and you can get that by going to Tsa.gov and getting that XML file or getting that. That Excel spreadsheet or the PDF. Download that and we input your top 35 earning years directly into the software. That will help us determine what your aim is, which is your average income, monthly earnings, and also what your primary insurance amount is, what they call Pia. There are three bend points that change each year on Social Security for this year. The Social Security Administration gives you 90% of. The first $115 of your aim, your average income, monthly earnings that give you 90% of that in income and future income on a monthly basis for your Social Security income. Then they take the next 1115 to $6721, and they only give you 32% of how that.

Ford Stokes:
Computes. So I give you 32% of your Aime up to that if you'd earned. More than six 6721 and average income monthly earnings over your top 35 earning years. And then they only give you 15% of everything above that. So for the people who are like, well, if I just keep working. And then I, you know, and I turned on Social Security income, but I keep working. I'm going to get more income after it and all this kind of stuff. Well, that's not necessarily the case. And also you're better off putting your own money in your IRA because you're going to get more than $0.32 on the dollar and more than $0.15 on the dollar. It also more than 90% $0.90 on the dollar. So for the people that are trying to say, well, I'm just going to use. Social Security is my retirement income plan. I've got two things to share with you. Number one is. You really need to have a plan in case Social Security goes all the way away, just to make sure you're safe. The second is. You really need to inspect what you expect about your retirement income plan, and understand that the Old Age Survivors Income Trust Fund Oaci is scheduled according to the SSA, gov and the Congressional Budget Office. It is scheduled to be 100% depleted by 2033, which would mean a 23 to 24% across the board cut for everybody receiving Social Security income benefits. If Congress doesn't do anything different, the rumor is that they will at some point take the wage cap off of the taxes that you pay.

Ford Stokes:
So instead of paying part of the year at 6.2% and the employer paying 6.2%. You and the employer are going to pay 6.2% the whole year. Now, if you're making over 200 grand a year, if you make over the that amount, you literally by the time you get to like August or September, you get a 6.2% raise because you've met the upper threshold and they no longer are taking out 6.2% until the year turns over again. They're likely going to do away with that, and they're just going to keep charging you 6.2% for FICA. And then they're also going to make sure that your employer paying 6.2% for FICA. And for those of you business owners who are. Concerned about the self-employment tax. You're paying 12.4 where you're paying your part and the employer employer's part. Then I would encourage you to go ahead and reach out to us, because we can give you a Sentara plan. That's a that's a Tara plan is a great way to minimize the FICA money you're putting in, and also put that into other investment vehicles where you get 100% of the money you're investing. So. The OAS. I Trust Fund, according to Ssa.gov, can pay its full benefits until 2033, a year earlier than projected last year. So please, let's get a plan for taking care of your own retirement income. And also, let's make sure that we're maximizing the Social Security income over time.

Ford Stokes:
It's likely that Social Security is not going to go away. That's why I got the RSA designation. Um, but it's really important that we do a really good job at planning for Social Security income and also planning for the other income we're going to need, and also so we can take that tax efficiently but also withdrawal efficiently. We want to make sure we're maximizing our ability to withdraw money from our assets without depleting it. And there's a way to do that. And most of it's with bond replacement and not trying to do the withdrawal rates on our own. And we take advantage of mortality credits with fixed indexed annuities is a perfect example of that. And also getting greater rates of return that are higher than the withdrawal rates, so that your portfolio can keep pace with your withdrawal rates and also keep pace with inflation. And we're going to talk about all that when we come back from the break. We're talking about smart safe, next in our smart retirement plan here on the Active Wealth Show, where we're trying to get a jump start on your New Year's resolution to start getting on the path to a smart retirement plan here in this important special edition of the Active Wealth Show right here on Am 920. The answer? Come right back to learn more about this next element of a smart retirement plan. How to build a smart, safe portion of your portfolio.

Producer:
Do you want a steady stream of income for retirement? Then it's time to consider annuities. I'm Matt McClure with the Retirement.Radio Network powered by Amara Life. Gone are the days when most employers offered pensions with guaranteed lifetime payouts to their workers. But what if I told you that you can build your own personal pension? It's possible with an annuity. An annuity is a financial product that provides a series of regular payments to an individual over a specified period of time, often for the rest of their life.

Ford Stokes:
There are several options for you to consider when choosing an annuity. Be confident in knowing that there is an annuity out there that can meet all of your needs.

Producer:
Ford Stokes is founder and president of Active Wealth Management and author of the book annuity 360. There are several different types of annuities, including fixed, variable, and fixed indexed.

Ford Stokes:
A fixed annuity offers a specific guaranteed interest rate on their contributions to the account. A fixed indexed annuity is an accumulation based product offered by an insurance company. The growth of your fixed indexed annuity is dependent on the performance of a chosen stock market index, but your money is not actually invested in this index. This offers you great growth potential and exceptional protection for your investment.

Producer:
While each can provide tax deferred growth and a lifetime income stream, variable annuities put your principal at risk in the market.

Ford Stokes:
If you are currently investing in a variable annuity, your funds could be in serious trouble if the market experienced any downturns.

Producer:
With so many possible choices to consider, it's essential you speak to a financial advisor or professional to help you make the best decision for your future. So are you ready to consider an annuity as part of your retirement plan? It's a key question to consider as you approach what should be your golden years with the Retirement.Radio Network powered by Amira Life? I'm Matt McClure.

Producer:
Thanks for listening to the Active Wealth Show. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

Ford Stokes:
And welcome back to the Active Wealth Show Activators on Ford Stokes. Chief Financial Advisor I've got Sam Davis here. On the board with us is our executive producer and retirement income specialist, and we are talking about how to build a smart retirement plan during this show. Really the first five elements of a smart retirement plan. We're going to talk about all those. We've already talked about smart vision and smart inspection. As part of that. We've also talked about how to really get going on, how to maximize your Social Security income, and how that's one of the most important decisions you can make during retirement. In the last segment. And now we're going to talk about. Smart, safe. Do you have a smart, safe portion of your portfolio? And let me ask you a question. Do you know what bond replacement is? Well. Mazzola bonum replacement is removing bonds from her portfolio in favor of investments with less risk and higher returns that also have. A guaranteed income element. And the best example of those types of products that we've seen are fixed indexed annuities. So they can keep pace with inflation but also give you retirement income you can never outlive with market like gains without market risk. In you maybe ask yourself, you know, why should I replace the bonds in my portfolio for it? Well, first of all, bonds have lost value over the last three years consecutively. They've really had a tough time. Number one is you get to delete the fees on a portion of your portfolio. I mean, if you're generating income from bonds and they're not there to really grow all that much, let me ask you a question.

Ford Stokes:
Why are you considering paying advisory portfolio fees on bonds that are just going to sit there and pay you your income? By replacing with certain fixed indexed annuities, you may receive a bonus on your principal. Also, allow your savings to grow starting on day one that you invest. So by replacing bonds with fixed indexed annuities, you may receive a bonus on your principal, allowing savings to grow starting on day one that you invest. Also get the opportunity to participate in stock market gains without the risk of having your money invested directly into stocks. Let me tell you how that works. So life insurance products and annuities and annuity is a life insurance product. It's actually insurance against you living too long. Life insurance is insurance against you living too short. But life insurance companies issue annuities. And there are some annuity companies that only issue annuities, but they just know this, that annuities are insurance against you living too long. But life insurance and annuities are regulated by the states and not regulated by the federal government. And because the states have to balance their budgets year over year, they require insurance companies and annuity companies that operate in their state. They require them to reserve 100% of the money that you give them into safe products like the ten year US Treasury bond. They're not allowed to go invest in casino stocks and gold mines as an example. And what they do is they take the interest generated from the ten year US treasuries.

Ford Stokes:
And they invest in options like the S&P 500, the BNP Paribas Global Factor Index, the Credit Suisse Ravenpack. In other indices. There's hundreds of these indexes that are proprietary indexes that the insurance companies pay the managers for the the actual fund managers for. So they can tie the market like gains to the index. And how the index performs is kind of participation rate. They'll offer to you as the annuity policy holder. And you, you have protection periods. You've got one year, two year, three year plus protection periods. Some of the best ones that we've seen have one and two year protection periods. And what that means is they'll lock in your principal, your bonus, and your gains. During that protection period and they start over. So let's say the index goes down one year or your latest protection period. They lock in what that level was in the index and it starts over. So if if the index rebounds you get the growth on the rebound which is really helpful. You also get the opportunity to eliminate interest rate risk from that same portion of your portfolio if you do a bond replacement. And for many of you, you've lost a lot of money in interest rate risk. Over the last three years because bonds have really seen a decline. In market value, especially the bonds that were around three and four years ago. Fixed indexed annuities allow you to establish an additional retirement income stream, which could be considered a personal pension and may be a good choice for you if Social Security isn't enough for you to cover your expenses.

Ford Stokes:
And if you're concerned, you may outlive your savings. If you want to reduce risk and protect part of your retirement savings, and if you want to reduce and delete fees in. That part of your portfolio, the income portion of your portfolio. It also allows the rest of your portfolio to grow, because you can generate income that you're going to need from like 40 to 50% of your portfolio with a fixed indexed annuity, and let the rest of it grow. And you can be more aggressive with the rest of that portfolio, because you've got your principal protected and you're generating income. One of these products is called the nationwide P10. We're starting to do ads regarding this product as well during the week right here on Am 920. The answer to make sure everybody knows about it. Here at Am 920. The answer? But I got to tell you. This nationwide peak ten is one heck of a product it offers you. If you buy the bonus plus income rider you get. A 20% immediate bonus, you get an 8% annual roll up, which is 8% guaranteed annual interest on the principal that you invested what they would call the premium. Every year that you defer withdrawals, every year that you wait to start taking withdrawals. So a lot of people were seeing they're in their 50s and they're not going to retire until their 60s, their mid 60s. They're investing 100, $200,000 in this fixed indexed annuity. And. It performs crazy. I mean, one gentleman, um, who is in manufacturing in the northeast, he's invested $100,000 into the nationwide peak ten, and he's going to generate over.

Ford Stokes:
$22,000 a year, starting at age 65 from the hundred grand every year. Um, based on the illustration. And so that's really a great rate of return. That's 22% of his original investment. Now, granted, he's having to wait 15 years to take the withdrawals, but goodness gracious, that's 8% growth guaranteed. But it also offers 350% participation in the BNP Paribas Global H factor index, which is a great index. And it and it it's rebalanced on a regular basis. It's more of a tactically managed portfolio based index. And. If that portfolio does well and historically. Through backtesting. It's basically performed over 4%. You're getting three and a half times that during the protection period. So you would get if you did a two year, you got a two year protection period. You got 8% growth. So even if you round up to 10%, you're going to get 35% less of 1% spread rate, which was would be 34% on your money. I got to tell you, that's really attractive. Sam, your thoughts on the nationwide pick ten? I know you work with a lot of folks on their income, their retirement income, and that seems to be the number one selected product of the people. And we've got access to over 41 different carriers and hundreds of products. But, you know, between annuities and migas and fixed annuities and all kinds of stuff. Your thoughts on the nationwide peak ten is a fixed indexed annuity product as a solution for people's retirement. It's the final.

Producer:
Countdown. So let's recap what you may have missed. It's the final countdown. The final.

Sam Davis:
Yeah. As we go through the smart retirement plan process on this show today. And if you missed the first part of the show, go to our podcast feed. You can check out the full episode there On Demand. But we talked about Smart Vision the Inspection, which includes that Social Security maximization report. When you bring in these personal pension products like the nationwide peak ten, a fixed indexed annuity, the income picture becomes even more clear because now we're looking at two different sources of income based on your target date for retirement. And a lot of people are just very comFordable with the fact that they know what to expect. They can plan for retirement a lot better knowing what their lifestyle is going to look like. That bonus is a great way to really ramp up those savings. When you know that your retirement is about ten years away or so. And, um, yeah, I would just encourage everybody listening to to get in touch, really learn a bit more. You know, these things, it's it's more than we can explain in a just a single radio show. And everybody's situation is different. So you want to take a look at what this product could do inside your portfolio and how it fits into your overall plan.

Ford Stokes:
I just appreciate everybody paying careful attention to this show, where we're building the smart retirement plan, and you've kind of gone through the final countdown for us this week. Sam, I just really appreciate all of you as activators. And if you've never called us, I think this is the week. I think this is the week you ought to go ahead and pick up the phone and get started on your New Year's resolution to make sure that you are building that smart retirement plan for your family's future. All you gotta do is reach out to us at (770) 685-1777. Again, that number again is (770) 685-1777. Also, for those of you who are wondering. How do I get going on my Social Security maximization report? Visit our SSA comcar. That's our SSA comcar or visit Active wealth.com and click that schedule a consultation button in the upper right corner. And we come back next week. We're talking more about how to build a smart retirement plan. We've got new elements to smart retirement planning, including smart risk, smart tax and smart legacy elements of your retirement plan. Thanks for listening to us here on the Active Wealth Show. This is an important one where we're talking about how to build a smart retirement plan for your financial future. And thanks for listening to us right here on Am 920. The answer. 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 Active wealth.com investment advisory services offered through Brookstone Capital Management LLC, BCM, 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:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

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