A Tactical Approach for a Successful Retirement

8.18.23: Audio automatically transcribed by Sonix

8.18.23: 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, your chief financial advisor, and I've got Sam Davis, our executive producer here on the Active Wealth Show today. Sam, say hello to everybody.

Producer:
Welcome to the weekend activators. So happy that you're listening to the Active Wealth Show as part of your weekend on Am 920. The Answer or wherever you listen to podcasts, if you're not able to listen to the show on Saturdays or Sundays here in Atlanta on Am 920, the Answer You can catch us wherever you listen to podcasts subscribe so that way you'll be notified. Whenever we put out a new episode. We usually we put those out on Friday afternoon so you can even get a sneak peek ahead of the radio.

Ford Stokes:
Listeners also be on the lookout on YouTube for our YouTube shorts. Those are showing up and getting quite a lot of views and all that stuff. So we appreciate that. As YouTube is trying to really compete with TikTok, we've done. I'm starting to do Sam, I'm starting to do a financial wisdom quote of the day on YouTube and TikTok and Twitter every single day. So everybody check that out. And I just want to say thank you to the activators out there. And if you're listening to the show for the first time and you don't know who an activator is, let me just tell you who an activator is. An activator is somebody who listens to this show, The Active Wealth Show on Am 920 The Answer And there's somebody that's looking to build a fee efficient, market efficient and tax efficient portfolio. Or successful retirement. They're trying to build a sound retirement plan. They want to protect and grow their money, but you also want to make sure they're doing a good job at generating an income for their retirement as well. That's hopefully tax efficient, fee efficient and market efficient as well. And I just want to just say thank you. Thanks for making us the number one listen to radio show on Am 920. The Answer on the weekends. And let me tell you a little bit about today's show. So today, we're going to have our financial wisdom quote of the week.

Ford Stokes:
And it's words of wisdom from a Nobel Prize winning economist. Also, did you know that a tactical approach could help your retirement portfolio? Continue to grow and to be better protected against market volatility. No guarantees out there with it, but it could help you. Also, we're going to talk about why your expense ratio matters. Or, you know, our fees eating away at your retirement savings that don't show up in your statement. They specifically don't show up in your on your 403. B. Your 457. But they do show up in the bottom line of your overall account value. Also. We're going to talk about how Social Security cuts could affect retirees and why an income plan is so important these days. It's also even more important where the Congressional Budget Office and the Social Security Administration giving us the news that the Social Security trust account could be depleted and will likely it's on pace to be depleted by 2033 or 2034 unless Congress does something about it. I think Congress hopefully will do something about it at some point. And one of the ways to fix it would be to increase taxes on your employment taxes by taking off the cap. On the 6.2% that you pay in employment tax. So the employer pays 6.2% and you pay 6.2% when you're a W-2 employee. But when you're a 1099 employee, you pay 12.4%. That's called the self employment tax. And I think eventually Congress will just wise up and say, hey, we won't put a cap on that income.

Ford Stokes:
We're just going to charge you 6.2% for the whole year. And that will hopefully help alleviate some of that. I'm not for higher taxes by any stretch of the imagination, but I am for making sure we take care of the people that have paid into the Social Security system for so long and for so many years. And also we've got some information on This Week in history, and we're going to talk about the economic impact of the Hawaiian wildfires. And to all the Hawaiians out there, specifically the folks that are in Lahaina and Maui, my family visited there last year. Our thoughts and prayers are with you guys and gals. I hope that our federal government and the state government does a better job responding than what we've seen in the news media and what we've seen in reports from, you know, just individuals taking videos with their cell phones. It just looks like incredible, just desolation and destruction. And it just makes us so sad. I mean, my family ate dinner right there in Lahaina. And I just I'm just so sad about what's going on with other Americans. And, you know, there are 50th state and they are our brothers and sisters out there. So, again, our thoughts and prayers go out to the folks at Lahaina and Maui and and the entire state of Hawaii.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Producer:
This week's chord of the week comes to us from a Nobel Prize winning economist Daniel Kahneman. And Daniel Kahneman once said, Money doesn't buy you happiness, but a lack of money certainly buys you misery.

Ford Stokes:
Yeah, and our goal here on the Act of Wealth show is to make sure you don't have a lack of money during retirement. You don't have a lack of monthly income during retirement. So you're not sitting there fretting and stressing over money when you have no real recourse to go out and generate more income during your retirement or not as much as you used to. I mean, if you stop working and you try to rejoin the workforce, it's chances are you're going to find that you're going to find a job that is paying less than what you paid before, especially if you've got a college degree or a postgraduate degree and you've been working in a certain industry for a long time and you try to reenter the workforce and join almost any industry that could affect you as well. Our goal is to try to help make sure that you actually have money during retirement. And Sam, we're going to talk about really about tactical asset allocation and also just kind of ask the question, are your retirement savings being tactically managed, so Ford?

Producer:
For our first segment here today, we want the activators to consider. We want those listening to be thinking about are you retirement savings being tactically managed? You may think you're being strategic with your retirement plan, but we're going to take a look at the difference between a strategic asset allocation and a tactical approach with tactical asset allocation. And then we're going to talk about some reasons why a tactical approach may be right for your retirement savings.

Ford Stokes:
Yeah. So with strategic asset allocation, here are some elements of that. It's more of a hand off approach. It's more of a buy and hold strategy. It's good for long term horizon investing. It's also better for emotional investors where you can make a decision and set it and forget it and also works for newer investors as well. That's really kind of strategic asset allocation. We implement strategic asset allocation within 50% of our portfolio is because we try to select the asset classes that we think are going to perform the very best over the next 12 months and then we'll reevaluate it after 12 months. But that's really the way we define strategic asset allocation and what our practice is in following a strategic asset allocation model.

Producer:
The first reason to consider a tactical approach for your retirement savings is increased protection from market declines. So tactical management allows for adjustments in asset allocation to reduce exposure to volatility as things change. This can help retirees avoid sudden and drastic declines in their portfolio value, provide stability during times when consistent income is crucial in Ford. Know when people are entering retirement, you know they're not working anymore. They don't have that income that they've been used to for the last 3 or 4 decades. So protection but also having that income is key, right?

Ford Stokes:
Absolutely. And so tactical asset allocation, the elements of that is it's really active management. That's one of the reasons why the name of our firm is active wealth management. It also involves trading more often but doesn't necessarily have to be more often We do everything we can to try to look at what the asset classes are going to perform really on a monthly basis. It's good for short term and medium term time horizon. It also requires a degree of control over impulse trading. Again, you want to kind of have a staid hand or a or be still in the moment when there's some market volatility. You want to really understand which way the market's going in certain asset classes and also demands more investing expertise. That's why we have CFAs that manage our portfolios Tactically, it's their responsibility to protect and grow our clients wealth within those portfolios. We don't necessarily consult with the the clients before those portfolios are traded, but the client can see when those trades happen and how the portfolio is rebalancing. The goal with tactical asset allocation is to capture about 70% of the gains, but only capture about 40% of the losses. That's really the goal. It doesn't mean it hits exactly that goal all the time, but that's directionally where we're trying to head, right? What we're trying to achieve with tactical asset allocation. The areas where strategic asset allocation and tactical asset allocation meet is one is on low level of risk. That's the goal of both. And then two is you want to focus on diversification. So those are areas where both of those kind of overlap. So but I do think if you don't have a tactically managed portfolio, at least for 50% of your portfolio, you may want to consider getting a portfolio analysis and a financial plan from active wealth management. And to do that, 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 we come back, more reasons to consider a tactical asset allocation approach.

Neil Diamond:
Taking it slow. Lord, don't you know?

Producer:
With the traditional 60 over 40 portfolio having its worst year in more than four decades now may be a great time to consider more than just stocks and bonds. Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to help you retire with peace of mind. Schedule your free consultation today at ActiveWealth.com. That's ActiveWealth.com.

Producer:
Investment Advisory services are offered through Brookstone Capital Management LLC a registered investment advisor. Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Thanks so much for listening to the Active Wealth Show. Make sure to rate us everywhere you listen to podcasts, including Spotify.

Ford Stokes:
I'm Ford Stokes, your chief financial advisor, and I've got Sam Davis, our executive Bruce Rohn here. And we're talking about tactical asset allocation and how that could help your retirement portfolio. And we're going to give you seven reasons to consider a tactical approach for your retirement savings. And Sam has already given us the first two. Sam, why don't you go ahead and recap the first two of the seven reasons to consider a tactical approach for retirement savings. And go ahead and read the third one, and I'll jump in on number four.

Producer:
Yeah. So the first reason is just increased protection from market declines. Tactical management is allowing for those adjustments as time goes on. So you're going to have that protection as things change. Also avoiding emotional investing, we can kind of get caught up in what's going on in the news and what may be happening in the marketplace this month or around the holiday season, which tends to be better. But with a tactical approach, you can avoid that emotional investing because there's a bigger plan and a broader strategy behind that. And the third is receiving the income that you need. So obviously when you step away from the desk or the office or wherever it is that you worked for 30 or 40 years, you no longer have that steady stream of income. So we need to set up a plan so that you're going to have that income that you can count on for all of those non-discretionary expenses, but also the fun stuff, all the discretionary expenses as well.

Ford Stokes:
Right. A number four was the ability to potentially avoid the number one fear of retirees, which is running out of money. Retirees often need their investments to last over several decades. A well managed portfolio can strike a balance between generating income and allowing for growth to ensure that the portfolio remains sustainable throughout retirement. And one of the things we've talked about on last week's show and then we talk about a lot on here, is replacing the bonds within your portfolio with fixed indexed annuities or structured notes or a combination of both or even consider investing in life insurance in your 50s so that you can generate tax free retirement income as well. Those are three sources we use to generate a greater income for our retirees and also hopefully give them market like growth without market risk. There's you know, with structured notes, there's always involves market risk because it is a security. But with life insurance and fixed indexed annuities, there isn't the market risk side. Your money is tied to an underlying index or the crediting option, but your money is 100% invested and there's a financial reserve on your money of 100% of the money you give an annuity company or life insurance company into the ten year US Treasury. Obviously with life insurance, there is, you know, cost of insurance, cost of life insurance. But with fixed indexed annuities, especially if you invest into a fixed indexed annuity without an income rider fee, that's something also to consider that you could really get much more fee efficient out there that also help you. Again, hopefully not run out of money because we don't want to really exceed more than the traditional 4% withdrawal rate. And if you're if you're just implementing a withdrawal strategy on your own without a fixed indexed, but you can get a higher rate of payout with a fixed indexed annuity and hopefully at the crediting method performs, it can actually outpace your withdrawals and therefore your principal still remain for.

Producer:
The next reason is outpacing inflation with your savings. So you know, when people see that things are going on in the market that they don't like, sometimes the instinct can be to pull that money out of the market and go into cash. And while you may feel like your money's safer in the bank, you're automatically going to be taking the hit from inflation each year. And if you're watching on our YouTube channel, I'm going to go ahead and put up a graph here. This is from the Bureau of Labor Statistics. We're looking at inflation from July 20th, 23 years ago when we were in the middle of the Covid 19 pandemic to the most recent data in July 2023. And you can see the ride that we've gone on with inflation. And even if you're not looking at the graph right now, you don't need me to tell you that things have just gotten much more expensive and all the things that we purchase in our everyday lives, from groceries to utility bills that you don't really have any say in at all. So outpacing inflation is so important. It's another reason to consider a tactical approach. A tactically managed portfolio can include assets that have historically performed well during high inflationary periods, helping to maintain the real value of your investments.

Ford Stokes:
Yeah, it's remarkable that that May June time frame at nine of 2022 with 9.1% inflation that was hitting in that month, it was like, wow, that is a big number. Inflation is just a guarantee to erode your your buying power. That's why. Pre-retirees and retirees need to stay invested, especially if you're in that retirement red zone that five years before retirement and five years after retirement. I strongly urge you to stay invested and you can stay invested in a myriad of ways. You can do strategic asset allocation where you're just buying and holding each year. You can also do tactical asset allocation where you're managing your assets tactically or your assets are being managed by a financial advisor tactically over time. Where they're rebalancing on a monthly basis. That's another great way to do it. But the other way is to stay invested is through life insurance products with fixed indexed annuities and indexed universal life policies that have crediting options on certain proprietary indexes or indices, if you will. You know, give you an example. We've talked about the nationwide peak ten fixed indexed annuity last week. They have a crediting option called the BNP Paribas Global Factor Index that follows global healthcare, follows the global healthcare market. And that's remarkable for retirees because health care is going to be one of your larger expenses.

Ford Stokes:
So if you can try to keep pace with the inflation within the health care market and you're invested that way, hopefully you'll keep pace with your withdrawal rates as well. So just something to think about there. You want to try to outpace inflation with your savings and your hard earned and hard, safe money. Number six on our list is managing risk over time. As individuals approach retirement or already retired, they often have a reduced ability to recover from significant investment losses. This is what we're talking about when we discuss the Rule 100. A tactically managed portfolio can help mitigate risk by adjusting investment allocations based on current market conditions and other potential risks. You want to really. Try to manage a risk. One of the ways to measure risk, by the way, is standard deviation is a measurement of risk from a financial markets perspective. And if you don't know what standard deviation is or you don't know what the standard deviation is within your own portfolio, I would encourage you to go ahead and reach out to us at (770) 685-1777 again (770) 685-1777. Or you can visit ActiveWealth.com click that schedule a consultation button in the upper right corner and you'll get booked directly into my calendar. And Sam, I think you've got number seven for us.

Producer:
Yeah. The last reason we want to mention why a tactical approach could be the right one for your retirement is that a tactical approach is designed with you in mind so it understands that each retiree has unique financial goals, different risk tolerance, different income needs. And so this tactical approach will allow for customization to align the portfolio of investments with that specific individual's specific circumstances. Because Ford, just like a fingerprint, No. Two, retirement plans are the same. Everybody has different needs, and a tactical approach can help you accomplish those specific goals.

Ford Stokes:
Yeah, absolutely. I just really strongly urge people to consider a portion of their portfolio to be tactically managed so you don't just hang in there and you don't just ride the the market volatility. Now, there's definitely a place for strategic asset allocation, but at the same time, if you look at what happened to your portfolio in 2022, it's more than likely that you lost a significant portion of of that portfolio like double digits, let's say ten plus percent for some. And if you were invested 100% in like the Nasdaq 100 stocks, you likely lost somewhere in the neighborhood of 24.2%, which is where the Nasdaq 100 index ended up at 24.2% less value at the end of 2022 from January of 2022. So let's also quickly talk about. All of this and how do you put it all together with a full retirement plan consultation? So I want to tell you, this is what you can expect when you come in to work with us. Number one, is going to provide these comprehensive consultations at no cost to our listeners. We really appreciate our activators. We appreciate the listeners out there. We talked to two more long term listeners. Last week. Want to give out a shout out to Jenny and give a shout out to Priscilla as well. Um, and you only work with us if it's best for you. We'll let you know if it's better off to stay where you're at. Also, we'll help you analyze your financial situation. We'll closely examine any annuities you may currently have. And we'll also discover exactly how much you're paying in fees and help you cut unnecessary costs in your 401.

Ford Stokes:
K or other retirement savings accounts for sure. Whether that's A423, B, 457 or Sep, IRA or Simple IRA. In addition to the traditional IRA rollover IRA and 401 seconds. We can also help you with Social Security planning and your Medicare planning. We'll compare your situation to what's possible if you work with us. We do refer out our Medicare planning to Bonnie Doms with Medicare and other red tape. Bonnie and I don't share fees on those cases or anything like that. We just refer because she's so experienced and sat on the Council for Aging for the Atlanta Journal Constitution, and she's got like 6 or 7 advisors that work with her and she does a great job. And they've got thousands of policies out there, thousands of clients. And we appreciate Bonnie and what she does for our clients on the Medicare side. We will compare your current situation with what's possible if you work with us, like I said. And then also remember, it's your money. If it matters to you, then it matters to us and we'll give you a financial plan to your 95th birthday and give you a financial plan on your 95th birthday with our recommended portfolios And. That same plan with a Roth ladder conversion plan. If you've never looked at a Roth ladder conversion plan, I would encourage you go ahead and reach out to us at ActiveWealth.com and click that schedule a consultation in the upper right corner. When we come back, we're going to talk about why your expense ratio matter.

Producer:
With the traditional 60 over 40 portfolio having its worst year in more than four decades now may be a great time to consider more than just stocks and bonds. Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to help you retire with peace of mind. Schedule your free consultation today at ActiveWealth.com so we can help you delete fees and establish a personal pension that you can never outlive. Visit ActiveWealth.com. Now that's ActiveWealth.com. 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:
So last segment was a very important segment for us. It's one of the more important ones we've probably done this year. I would also say that this next segment is an extremely important one, and it's more of a guarantee because if you can reduce the fees you are paying within your portfolio, you're going to be able to hold on to more of your money. So fees are not necessarily something that you're going to have to depend on market performance. This is something you can negotiate. It's something that you can also inspect what you expect and you can try to reduce the expenses within your portfolio. And you can also reduce the expenses and the fees you pay even within a fixed indexed annuity by investing in, say, an accumulation based fixed indexed annuity versus a fixed indexed annuity with an income rider that carries an income rider fee. There are definite places, though, for income riders with income rider fees, especially when income is your number one priority for sure. Here we go with what is an expense ratio and why does it matter now? An expense ratio formula. The expense ratio can be found by performing the simple calculation. You take management fees and you divide them by the total investment in the fund. A management fees, especially within mutual funds, can show up in the form of 12 v one fees. Those are marketing fees that mutual fund companies were allowed and enabled to charge marketing fees with the Investment Act of 1940 and most. Mutual fund companies. They invest into the portfolios and all that stuff, but they do not invest in advertising. So they take that money that they're charging in 1281 fees and they put it in their pocket.

Ford Stokes:
So you don't get a lot of educational value. You don't get a lot of value for the 1281 fees that are coming out of your mutual fund. Month over month. Now you're those management fees are disclosed in the prospectus, but most people don't read a prospectus. All of our listeners should ask themselves this important question How much am I paying in fees on my retirement savings and how can I reduce them? If you don't know the Answer to this question or you can't quickly pull it up, you owe it to yourself to find out. We would be more than happy to help you take a look and identify the current expense ratio within your retirement nest egg within your portfolios. Absolute no cost to you. It's about a thousand hundred dollars value where we give you a portfolio analysis, a financial plan to your 95th birthday, a financial plan with our recommended portfolios, a Roth ladder conversion plan, and a Social Security maximization report. Happy to help you do that. All of that is about a $1,500 value. We do it absolutely for free because we want to help you make an informed financial decision on the front end before you choose to work with us. And again, if you want to schedule a free consultation, all you've got to do is is an active welcome that's ActiveWealth.com and click that schedule a consultation button in the upper right corner. We meet with many people who find out, one, how much they're paying in management fees on on their retirement portfolio. Number two is they had no idea that their old advisor was overcharging them for the management of their assets and had them invested in bonds and other investments with heavy fees.

Ford Stokes:
Also one other quick question. Why are you paying fees on? Bonds when bonds are just to give you retirement income and not necessarily give you. Asset growth. Because if you're getting income. And your advisor is not going to make a huge difference in the growth on that based on the bonds they choose. That may make it a choice on on actually getting paid back your money if they're investing in A-rated bonds or lower. And also if you don't know what the ratings on your bonds are, are you invested in investment grade bonds or below investment grade bonds? I would encourage you to give us a call. Happy to help you there. Then number three is when we meet with folks, they simply have never been told the fees they were paying on assets such as target date funds, mutual funds, bonds and other similar assets. It is rare to see a morningstar report or a quant report pulled on a current portfolio and shared with clients. We do that. But it is interesting that other advisors choose not to do that and not to inform their clients. And we're not saying that makes them bad people. It's a different business model. But if you don't know what the management fees you're paying within your portfolio and the advisory fees you're paying in the portfolio, and also what is the expense ratio of your portfolio that includes the mutual funds within your portfolio. I would strongly encourage you to go ahead and give us a call at (770) 685-1777. Again (770) 685-1777.

Producer:
And if you're tired of worrying about your future and you're ready to work with someone who sits on the same side of the table as you, you have active wealth. A call or visit our website. It's ActiveWealth.com. We genuinely love meeting with listeners and helping them on the road to their retirement. All it costs is a little of your time and as always, there's no obligation. And Ford It's so important that people figure out their expense ratio. That's why we wanted to talk about it again on this week's show. There are so many different types of investment fees that you should be aware of. We talked about mutual funds that can charge operating expenses. Those 12 B1 fees can add up. Some type of funds have higher expenses than others. Investment management fees can fluctuate. You know, many brokerages will charge a transaction fee each time and orders bought, bought or sold. So, you know, just got to be aware of where all of these fees can add up because those fees can eat away at your savings in the long term.

Ford Stokes:
And no question, I just want to make sure that everybody just gets more fee efficient with their investments because with market volatility, high inflation, high interest rates, you owe it to yourself to at least take care of the fee portion of your portfolio and try to get that into a manageable situation. And to make this segment even more action packed. I want to talk about withdrawal rates. And so many folks, a lot of advisors out there because of what's going on with inflation and interest rates, they're all talking about how you really should actually do a withdrawal rate of only 3.2% versus the traditional 4%. So if you had $1 million portfolio and you're taking out 30 to $40,000 or 32,000 or $40,000 a year, it's pretty tough to live on that, especially if you haven't turned on Social Security. But let's say you have and you're making, let's say, $45,000 into the household and you're able to generate, you know, a $32,000 deal that's going to be, you know, $77,000 in the household before taxes. And so you should be able to hopefully make it on that if especially if you own your home. But with power going up and cable going up and all the things that you deal with and the groceries going up and the gas going up, there's so many people that are seeing so many things going on out there that they they just feel like they need more income.

Ford Stokes:
Well, one of the ways to achieve a higher rate of income is to take 20 to 40% of your portfolio all you know, as much as up to 60% if that's what you want. We generally kind of try to stay at 65% and down on our portfolios. But a lot of folks prefer to just replace the bonds in their 6040 portfolio, 60% stocks and 40% fixed indexed annuities. Happy to do that. And happy to talk to you about that and also show you some really great illustrations where you can get higher than a typical 3.2 to 4% withdrawal rate. A lot of people cannot live on only taking out 3.2% of their portfolio. You get things like mortality credits with fixed indexed annuities and that can allow you to where your payout factors on the principal you gave them to go up over time. Usually it's about 0.1% each year over time, and they can start it like when you hit in your 60s, they can start right around 5% and go up about 0.1% a year. So by the time you're 75 years old, you could be getting, you know, 6.5% of your principal back instead of just still getting 3.2%. So a lot of times a fixed indexed annuity because it is an income based product. Also it's market linked. So you could get potentially market like gains without market risk.

Ford Stokes:
You're going to see that it's going to be pretty remarkable. Compared to what kind of withdrawal rate you could generate on your own. And if you've got questions about this or you really want to consider getting a better and higher payout rate of the principal that you have within your portfolio, within your retirement portfolio, I would strongly urge you to go ahead and reach out to us at ActiveWealth.com. Click that schedule a consultation button, the upper right corner. We're happy to work with you. You can also call us at (770) 685-1777. Again (770) 685-1777. Again we're going to try to put you with a fixed indexed annuity that works best for you. That's fee efficient, market efficient, and hopefully at least grows tax deferred and want to try to help you get a higher rate of return during this time of inflation and higher interest rates where a lot of pre-retirees and retirees need more income than ever before. And we've come back from the break. We're going to talk about why it may not be a good idea to count on Social Security as your retirement plan. This is going to be another important segment for you to go ahead and listen to. Come right back. We're going to talk about what's going on with Social Security and what you can do about it.

Producer:
Do you find budgeting too difficult or time consuming? Let technology do the hard work. I'm Matt McClure with the Retirement.Radio Network. Powered by AmeriLife. If you let out a sound of frustration when trying to keep up with your monthly income and expenses, you're not alone.

Nikita Turk:
Up until a couple of years ago, I was very anti the idea of creating a budget because a who has the time and b I know what I'm spending.

Producer:
That's personal finance expert Nikita Turk of Nerdwallet. She says her own personal experience led her to make budgeting a priority.

Nikita Turk:
When I actually decided to sit down and evaluate my finances, I realized how inconsistent I was being with my spending and by extension, my saving.

Producer:
Budgeting apps like Mint, Ynab or Honeydew can help you track and break down your expenses into categories like health care, groceries, entertainment and dining. Turk says there are other ways technology streamlines the process.

Nikita Turk:
They can be more convenient and easier to set up than some more traditional methods. They also do a good job of giving you a clear snapshot of your finances. Typically, budgeting apps will sync with your financial accounts in order to categorize your expenses.

Producer:
Tracking your spending this way is vital to see where your money's going so you can identify areas where you may need to cut costs. So are you ready to use technology to help you track your money? That's a key question to consider, and it's one of our 23 retirement cost cutters for 2023 with the Retirement.Radio Network powered by Amira Life. I'm Matt McClure. With age comes Wisdom and Senior Discounts. I'm Matt McClure with the Retirement.Radio Network powered by Amira Life.

Producer:
As the old saying goes, everything gets better with age. It's true of a fine wine, a happy marriage and opportunities to save money. People of a certain age can get discounts ranging from 5 or 10% to 25% or more at restaurants, shops and other businesses. Many times they'll promote those extra savings. But Jim Miller, senior editor of Savvy, told Oklahoma's News Four, Sometimes you have to be proactive. So the first thing.

Jim Miller:
Is, is you always need to ask, because a lot of businesses and organizations offer senior discounts, but they don't advertise them. So don't be shy about asking to save time.

Producer:
You can search online for lists of up to date senior deals at large retailers like Amazon, Kohl's and more. If you're willing to dive a little deeper, you can find more discounts in a variety of other places. And if you're looking to stay healthy, Silver Sneakers is a program that provides fitness classes for those on Medicare at no cost. That's right. You don't get a bigger discount than free. So are you taking advantage of the big senior discounts you're eligible for? That's a key question to consider. And it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network powered by AmeriLife. I'm Matt McClure.

Charlie Kirk:
Are you concerned about the Biden administration, how rising taxes could negatively impact your retirement? Then I encourage you to talk to Ford Stokes and his team at Active Wealth Management. Ford and his team of experts and financial advisors will help you understand the fees and risks involved with your current portfolio. Simply visit ActiveWealth.com to book your free financial consultation and tell them Charlie Kirk sent you.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of active wealth management.

Ford Stokes:
And welcome back. Activators the Active Wealth Show on Ford Stokes, your chief financial advisor. I've got Sam Davis here with us as our executive producer. And Sam, you've got a lot of great information that came in from CBS News on why. I mean, it's really the first time I've seen a major news network really come out and talk about how you really don't want to count on Social Security as your retirement plan. Talk a little bit about what CBS News has shared on CBSNews.com.

Producer:
Yeah, well, first forward, I know we've been talking about this on the Active Wealth Show for at least the past year because until recently it's just been the Social Security Administration and these various government agencies and websites where we've seen this sort of information. But this is coming from CBS News this week. Social Security is on track to cut benefits to retirees in 2033 when its trust fund reserves are forecast to be depleted. The reduction could be substantial, according to a new analysis. And here's the new analysis data. Unless the program is shored up before 2033, the typical newly retired dual earner couple will see their Social Security checks reduced by $17,400 annually, or $1,450 per month. That is definitely a lifestyle change, according to the report from the nonpartisan Committee for a Responsible Federal Budget, a newly retired couple with one earner would see a cut of 13,100, the report said. The analysis, which is based on current US dollars, does not forecast the impact on newly retired single earners. But the Social Security Administration has estimated that benefits will be cut by 23% in 20. 33 unless the program is strengthened and flawed. This is definitely something that's concerning for millions of retirees, millions of people who have paid into Social Security for decades during their working years. A lot of people are counting on Social Security as a big part of their income plan. But news like this is just one of the reasons why we think that a lot of the activators need to start getting a bit more responsible and start planning on some multiple sources of income in retirement.

Ford Stokes:
Yeah, I would say you really need to make sure that when you're growing your nest egg as much as you can, you're also protecting your your nest egg. First and foremost, protect first and then grow second. The next is you ought to have a retirement income plan. And that means getting a personal pension if there's only like 14 to 16%. Of the Fordune 500 companies still offer a pension. And I would strongly urge everybody to consider building your own personal pension. And. We can help you do that. All you've got to do is reach out to us at (770) 685-1777. Again, (770) 685-1777. And we're happy to help you. You can also visit ActiveWealth.com and click that schedule a console button in the upper right corner. But where this gets exacerbated even more, let's say they cut Social Security benefits by 23% for a couple. And then. The the high wage earner passes away. The former high wage earner. The husband passed away. The wife will get his, but they will. But she will lose hers. And so let's say that the Highway Journal was making $30,000 a year in Social Security income benefit was generating that. And the wife who. Worked in the home, not outside the home, raised the kids and and likely worked harder than the husband and worked longer hours. She only gets 15,000, but when he passed away, she gets his she gets the 30,000, but she loses hers. So you loses 15,000. She loses 33% overnight. Plus if it's down another 23, that's 56% less into the household for Social Security income. That is shocking.

Producer:
Taking a look at the data from that analysis. Again, Social Security checks reduced by 17,400 annually for couples with dual earners or 13,100 annually with a single earner. You know, that type of cut could prove devastating to roughly 50 million older Americans who receive Social Security. There are plenty of proposals to fix Social Security's looming funding shortfall, either by raising taxes or increasing the retirement age, which is something that we just saw happen in parts of Europe or a combination of the two. But what concerns me for it is that as they seek to repair this program, one of the solutions is taxes. So you could end up paying for it on the other end with tax rates, which is why we talk about the importance of considering a Roth conversion all the time. Because historically, if you take a look at where taxes have been, we are kind of in the lower period of history as far as taxes in the United States. Yeah, I mean.

Ford Stokes:
This is serious stuff, folks. I mean, this is real world, real stuff. I mean it. Ten years from now, you're likely still going to be alive and you're likely still going to be retired if you're retired right now. You need a plan for this and we can help you do it. All you got to do is reach out to us at Active Wlwt.com. Click that schedule a consultation button in the upper right corner will help you. But it is serious. It was serious enough for us to spend an entire segment talking about expense ratio and talking about what's going on with Social Security. And I just I just thought it was really important to talk about also generating that. Retirement income that you really are looking for with a 3.2 or a 4% withdrawal rate. That stuff's really important as well. And we had one heck of a show this time out for sure. It's the.

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

Ford Stokes:
So as we said on this week's show, we gave Sam, gave you the financial wisdom quote of the week, which said that money doesn't buy you happiness, but a lack of money certainly buys you misery. We're going to try to do everything we can to make sure you've got enough money on a monthly basis during retirement. And then also, are your retirement savings being tactically managed? We talked about tactical asset allocation and strategic asset allocation, where both of those meet for sure, and they meet with low level of risk and focus on diversification is where they both kind of overlap. But a good combination between strategic asset allocation and tactical asset allocation is a great way to go. Also, we talked about why your expense ratio matters and what an expense ratio is. We even shared, Hey, here's the formula for an expense ratio, which is you take your management fees and divide that by the total investment in the fund and that will give you the expense ratio. So that's something you may want to go out there and calculate if you can on your own. That's for a mutual fund. But chances are the best way to do that is just to reach out to us at ActiveWealth.com and we can run a morningstar report institutional level Morningstar report for you. No problem. To be able to tell you what your expense ratio is from a third party with Morningstar. And then we'll also we also talked about how Social Security could be cut in the future by 2033 when the Social Security trust fund is actually depleted, according to the Congressional Budget Office and Social Security Administration. But it is interesting to hear that finally some of the major news outlets like CBS News are actually talking about this.

Ford Stokes:
So we really need to act and not count on it because I don't know what we're going to do when all of a sudden your benefits are cut by 23%. And we looked at a $13,100 cut for an individual filer. That's over $1,000 a month that would buy a lot of groceries and buy a power power bill, water bill, trash bill, cable bill, all of that and some groceries for sure. Something to consider there. We also, again, want to just reach out and say we're praying for you all the folks in Maui, the Americans in Maui, and we just sincerely appreciate you and hope that our federal government takes care of you like they should. And we've also talked through just that retirement income need and how more and more people with higher inflation and higher interest rates are seeing a need for higher retirement income that they didn't necessarily plan on. And one of the ways to accomplish a higher retirement income from your principal is to consider a fixed indexed annuity. And we can show you how that factors in. And all you got to do is reach out to us at ActiveWealth.com or give us a call at (770) 685-1777. We sincerely appreciate you being with us here on the Active Wealth Show today we Sam and I appreciate all of our activators and thanks for making us again the number one listened to radio show on Am 920 The Answer It's been a big deal for us. We really like educating all the radio listeners out there. We appreciate you and hope everybody has a great week.

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

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you’d love including generate automated summaries powered by AI, automated subtitles, upload many different filetypes, automatic transcription software, and easily transcribe your Zoom meetings. Try Sonix for free today.