Avoid These Financial Pitfalls for a Better Retirement

4.19.24: Audio automatically transcribed by Sonix

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

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Retirement Results, the national radio show and podcast for listeners like you who want to protect and grow their hard earned money. In a world filled with so much uncertainty and financial risk, we seek to cut through the noise and build successful plans for hard working Americans on their road to financial freedom. Retirement results is powered by Active Wealth Management, a team of fiduciary advisors who always place your needs first and now your host. He's a registered social security analyst, member of the Forbes Finance Council, an author of multiple books on retirement planning. Here's your chief financial advisor, Ford Stokes.

Speaker3:
And welcome to our time results. I'm Ford Stoker, chief financial advisor. I've got Sam Davis here with us. He's our co-host and senior financial advisor. Sam, say hello to everybody.

Speaker4:
Welcome to the weekend result drivers. And welcome back to Retirement Results. So happy to have you tuning in. As we bring important information you need to know so you can win with your money and build that successful retirement that you've always thought about. And Ford, we're growing throughout the United States in the southeast, and you've got some exciting news to share with the listeners this weekend.

Speaker3:
Yeah, we're super excited about it. Uh, I went to school in the state of Alabama. I got my graduate degree in the state of Alabama. We've owned property in Alabama, and now we've expanded to Huntsville, Alabama with retirement results radio show. And we are launching the very first retirement results television show. And you can see those episodes and watch our radio show as well, because we record video of the radio show each and every week at retirement results. Com if you want to get in touch with us, you can go ahead and reach out to us also by calling 1-888-814-0304. That's (888) 814-0304. That's the toll free number so you can call from anywhere. I also just want to say super excited to be able to serve more of our Alabama customers by being closer to them. We've got customers in the state of Alabama, and we're super excited to actually be in the state of Alabama at the Cummins Research Park in Huntsville, not too far from highway 565. So pretty excited about that. Not too far from the Redstone Arsenal, and really excited to serve those Huntsville, Alabama area clients as Decatur, Alabama area clients that new twin Cities of Huntsville, Decatur. Uh, it's pretty exciting. Obviously, we're our primary headquarters is in Atlanta. Uh, we're in Alpharetta right off exit 12. And, um, super excited to kind of work with clients in Atlanta and Huntsville.

Speaker3:
And we're also launching a television show in Columbus, Georgia, um, this weekend as well. So super excited about everything we're doing. We're just trying to educate more folks. It's working and it's helping. Also, Sam, having folks like yourself and also Matt McClure, who's our primary host on the television show just as you are on the radio show, the Three of us, plus Jacob Tompkins, who's our new Medicare license professional. He's also series 65 license as well. So the four of us total can really help protect and grow the wealth of our clients. I mean, listen, for those of you who drive around in Atlanta or Huntsville right now, you've worked really hard to save your wealth and worked really hard to earn it. It was probably harder to save it than it was to earn it. And we want to do a great job of protecting your wealth. We take it very seriously. Um, we work with pre-retirees retirees and business owners, and all of them say, um, you know, they have one thing in common, and that is they've got one check to last the rest of their lives. And we want to do a great job at protecting that check and protecting that money. Also, they can help build an incredible and successful retirement.

Speaker4:
And Ford, it's fantastic to be working with all of those clients and prospects in the state of Alabama. More and more are giving us a call from the Columbus, Georgia area as well. And people can visit. Retirement results.com/plan. Now if you're interested in that complimentary consultation. It's what we do. It's not a bother to us at all. We love working with people, answering as many questions as they have. And Ford, when people give us a call or go to that website, what do they get when they start working with us?

Speaker3:
So when we meet with folks, we really try to seek to understand before we seek to be understood. And what we'll do is we'll ask you kind of, what are your dates of birth? What's your income level? When do you. Plan to retire. What are your monthly expenses running now and what do you think your monthly expenses are going to be during retirement? Are you planning to pay your house off or not? We'll ask a lot of questions on the front end. Number one is we're also going to give you a free and full portfolio analysis that comes from a third party. We run an institutional level Morningstar report of your portfolio. So you understand the risk you're taking and the fees you're paying. So you'll understand your expense ratio. You'll understand your level of risk as measured by standard deviation. You'll also understand the correlation of your assets. So that's just number one. You get a portfolio analysis absolutely no cost to you. All of this that I'm going to go through Sam is a $1,500 value. We give this to all of our radio listeners and our television viewers. Absolutely no cost to them because we're fiduciaries.

Speaker3:
We've got to put their needs ahead of our own. So number one is a portfolio analysis. Number two is we're going to give them a Social Security maximization report. If people have not turned on Social Security or they've turned on Social Security within the last year, we can really help them maximize that Social Security income benefit. And all I've got to do is reach out to us by dialing 1-888-814-0304 again, (888) 814-0304. And then number three is we're going to give them a retirement income plan from now until they turn 95 years young. So we're going to do everything we can to help them understand year over year what they're facing in retirement, what their income level is going to be each year of retirement, also what their effective tax rate is within a specific year of retirement. It's pretty remarkable. We put their entire retirement, Sam, in about two pages. Um, it's almost like an Excel spreadsheet, but it's it's using a monte Carlo simulation, and we run some really fantastic analysis, and it comes in a really nice, colorful report. People really like it.

Speaker4:
Yeah, well, what I think is fantastic is everybody we work with, we get their questions answered. And a lot of people tell us they feel like they understand their money for the very first time because your workplace, HR department, wherever you're, you know, employer's 401 K plan is through. Most of them are not really helping you plan for retirement. They're doing a good job of helping you save on a consistent basis, especially if your employer is giving you that sort of match. But they're not really giving you any guidance when it comes to actually investing your money and setting yourself up and your family up for success long term in retirement. That's really where we come in. We're educators first, and that's why we'd like to do all of this on the front end so people can make the best decisions for them.

Speaker3:
Totally agree. In the last two things we've gone through, one, two, three are.

Speaker1:
Backed by, they're backed by, they're backed by.

Speaker3:
This is number one. Number two is the Social Security maximization report. And I happen to be a registered Social security analyst. And I'm one of 15 in the state of Georgia, and only one of seven in the state of Alabama. We're going to give them a retirement income plan so they can understand if they start with a positive retirement income surplus or a negative retirement income gap. And also one hint, folks, if you're hearing the sound of my voice and Atlanta or Huntsville or Columbus or wherever you're driving around, or if you're listening to us on anywhere, you can get podcasts at Stitcher, Spotify, Google Play, iTunes, etc.. I want to make sure you understand. We've got to do everything we can to make sure you start with a positive retirement income surplus. Because with inflation, as we've seen over the last several years, has reared its ugly head. You're looking at that gap widening. If you start with a retirement income gap that is negative. So we want to do a really good job there. Number four is we'll give you a retirement plan, a complete financial plan to your 95th birthday with your current plan. That has nothing to do with us. Just, hey, here's what your current plan looks like, and here's what your expense ratio is. Here's what your standard deviation is. Here's what your the correlation your assets. Here's your average annual rate of return. And then here's how much you're risking on an annual basis. Number five is we're going to give you a financial plan to your 95th birthday at no cost to you. That has everything to do with our recommended portfolios that also include Sam, a strategic Roth ladder conversion, so that our listeners and viewers and our clients can actually delete the IRS from being their partner in retirement. And it's usually a remarkable result. When people see it, they're like, wow, I didn't know I could save six figures in retirement just by implementing a Roth IRA conversion over a 5 to 7, maybe even ten year period.

Speaker4:
And it's absolutely true if you've got at least $400,000 invested, if you can convert that from that tax deferred account into a Roth account, you're going to save at least six figures in future taxes. So a lot of people are interested in that. Most of the people who come and start working with us don't have a lot of money in that tax free bucket. So that's one thing that we like to do is get that built up early.

Speaker3:
Yeah, absolutely. So those are the five things we're going to recap real quick on those Sam for everybody. Number one is you're going to get an institutional level third party portfolio analysis of your current portfolio. Number two is you're going to get a Social Security maximization report from one of the few registered Social Security analysts in the state of Georgia and the state of Alabama here to help you do that. Number three is you're going to get a retirement income gap plan and analysis. Absolutely no cost to you. Number four is you're going to get a financial plan on your 95th birthday with your current plan. And number five, you're going to get a financial plan to your 95th birthday with our recommended portfolios and also a strategic Roth ladder conversion. When we come back from the break, we're going to talk all about. The financial pitfalls you want to avoid during retirement. And also planning for retirement will help you break those bad habits to help you build a better retirement right here on retirement results.

Speaker2:
Thanks for listening to retirement results. Schedule your complimentary financial consultation now at retirement results. Com or by calling toll free at (888) 814-0304. That's (888) 814-0304. At Active Wealth Management. We know you've worked hard for your money and you've worked even harder to save it. When it comes to wealth management and planning for retirement, Ford Stokes of Retirement Results is passionate about helping people protect and grow their wealth while educating them on all their options so they can choose what's right for them. Visit retirement Results.com to schedule your no obligation consultation today. It's a $1,500 value provided at no cost to you. Book yours now at retirement Results.com. You're listening to retirement results. And now back to the show.

Speaker3:
And welcome back result drivers I'm Ford Socha chief financial advisor and I've got Sam Davis here with us, who's our senior financial advisor and co host. And Sam, each and every week brings us the financial wisdom quote of the week. Usually they're pretty telling and they're kind of aha moments for us and also for our listeners. And Sam, why don't you share this week's financial wisdom quote of the week?

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker4:
This week's quote of the week comes to us from the Oracle of Omaha. That's right. Warren Buffett himself and Warren Buffett once said, the chains of habit are too light to be felt until they're too heavy to be broken. And I think this is a fantastic piece of financial wisdom and a great way to kick off our conversation today forward, because we want to help our listeners understand that there's a lot of financial pitfalls out there, things that aren't pointed out to you when you're growing up and you're learning how to have good financial habits. And so there's a lot of bad habits developed from that. And we want to help people really just make those smart adjustments early before they get too deep into retirement. Someone explained it to me like this once for it, and it made sense ever since it was explained to me. If you're taking a boat and you're going on a journey and that boat gets off course, even just 1 or 2 degrees, you may not notice it right away. But in a few years, that boat is going to be way off course compared to what it would have been if it had been dialed in the right way. So as you're planning for retirement, if you're 510 years away, it's important to make sure that your ship is pointed in that right direction so that you make it to your destination.

Speaker3:
Absolutely. And we're going to go through some of these bad money habits and decisions, um, so that you don't damage your financial future. So, uh, bad decision number one is selling investments when the market drops. Historically, the stock market has always gone through phases of contraction, recovery and expansion. Avoid making impulsive decisions during market downturns. You really do need to stay invested, folks, when emotions can be heightened and lead you away from your previous plan and investing strategy. Selling investments when the market drops can lock in losses and hinder long term growth. Instead, consult with a licensed financial advisor. That's us. We're here to help you. We do a lot of managed portfolios. We don't really make money on trading your accounts and your portfolios are no churning with your portfolios with us. We make money. When you make money, market contractions can actually be used as opportunities to invest. When prices are lower and there are more sellers than buyers.

Speaker4:
The number two bad decision that we want people to avoid making is claiming their Social Security benefits too early. If you claim those benefits before your full retirement age, that will result in a reduced monthly payment for the rest of your life. And for many people have been working 20, 30, maybe even 40 years paying into Social Security. We want to make sure they get as much as they possibly can, knowing that the future of Social Security is so uncertain as it is. And and we're lucky to have you leading our team forward. You're a registered social security analyst. You mentioned in segment one, there's only, you know, a handful of y'all in the state of Alabama and only about a dozen in the state of Georgia. And you're able to put together these Social Security roadmaps for our prospects so they can really understand what that benefit is going to look like for the first time.

Speaker3:
What I would ask back to this, this number two, bad decision. All the people that are listening to us as they're driving around. Let me ask you, do you think you deserve more than $0.70 on the dollar of what you put into Social Security? Well, the chances of that answer is yes. Yes. Ford and Sam, I do deserve more than $0.70 on the dollar. Well, that's exactly what you're going to get if you claim Social Security at age 62.5. Now, you do need. It's a customized decision. It's a personal decision of when you're going to take Social Security. You need to be very careful about taking it too early, but also you may want to be careful about taking it too late. You don't want to, um, put too much downward pressure and withdrawal pressure on your portfolio. You also want to try to stay within that 4% withdrawal rate and what we call the 4% rule, which basically states, hey, if you don't take out more than 4% of your assets in a given year, it's likely you're not going to run out of money in retirement. Therefore, your money will outlive you, not you outliving your money. We don't want you to just have to depend on Social Security later in life. We want to make sure you've got also got a nest egg to go with that.

Speaker3:
But you really should just give us a call at 1-888-814-0304. That's (888) 814-0304. If you want to get your free RSA roadmap, it is a Social Security maximization report. It is an entire organization. It was started by a CPA. It's amazing. You have to do all kinds of continuing education to be a registered Social Security analyst. You really should know what's going on. And also, I would not necessarily depend on somebody that works with Social Security Administration to give you advice because that's not their job, they're not fiduciaries. Their job is to make sure that they're just taking care of the people that come in front of them, and they're just order taking. You really need to get a little bit strategic and look at your Social Security options, especially if you're a married couple filing jointly in your taxes. And you also want to try to make it to Medicare eligible age as well, uh, to minimize your cost in health care, if you're thinking about retiring at age 60 or 60 1 or 62. I would beg you to try to work a year or two longer so you can save and really get in that habit of saving. And Sam, go ahead. Why don't you share again the next one, which is the bad decision. Number three.

Speaker4:
Yeah, the number three bad decision we want to highlight is not having a savings first mindset. And I know we shared a Warren Buffett quote earlier on in this segment, but I'm going to give you one more forward because Warren Buffett once said did not save what is left after spending, but spend what is left after saving. And what Warren Buffett means here is that you should budget your savings into your monthly expenses. Make sure that it is a priority, not something that's just left over with. Whatever you maybe have after the weekend, make sure that saving is the first thing that comes to mind whenever you get that paycheck.

Speaker3:
Amen. Uh, also, we talk on this show quite a bit. We want to make sure that we're saving money when we have it. And the best way to do that is to pay yourself, especially if you're over 50 years old and you're trying to. Play that catch up and and really save more money. You really should be putting aside 15 to 20% of what you earn. But it's the first 15 to 20%, not the last. To to Warren's point, you really do not want to save what is left after spending, but you want to spend what is left after saving. It is brilliant. The fact is that 40% of Americans don't have enough savings to cover a $400 emergency expense. That is frightening. We want our listeners to prioritize saving to build a financial safety net. Those are the kinds of people we feel like we can really help listen. We can help out all kinds of folks. We're really good at working with people that have saved up at least $250,000 in their 41K, their IRA, their 403 B, 457 their TSB. We work with a lot of federal government employees as well, and you want to maximize those thrift savings plans dollars. And we want to help you do that. And Sam, you've got some more here on this bad decision. Number three, not having a savings first mindset.

Speaker4:
Yeah. It's something that we like to say is pay yourself first. It may feel like those dollars that you're saving are just going right out the window, but that's paying yourself first. And if you're investing that money, you could be paying yourself more than you originally received, which is what we like to see people do. You can automate your savings. This is a great idea. Just like you would have your bi monthly contributions into your workplace plan. Do that outside of your workplace plan. Do that with an IRA. We would suggest doing that with a Roth IRA, and if you're eligible, maximize those Roth IRA contributions each year. This will build a tax free nest egg for you and reduce the future taxes you'll be paying in retirement. Because for the beauty of a Roth IRA, the money goes in after tax. So that means the principal and gains come out tax free. So whenever you decide to take that money, the government is not involved with that transaction any longer. And whenever you pass on a Roth IRA to your loved ones and beneficiaries, they also receive that money tax free. It's one of the only two types of tax free investments available to Americans, and we think that's a great way to save and just encourage you to go online. Contact us if you'd like us to show you how you can just take a look at a compound interest calculator. It's a really cool tool to show you the power of consistent saving through dollar cost averaging. You can do some really awesome things and invest money for the long term. And and so just be sure you're having that savings first mindset. Absolutely.

Speaker3:
And I you know, we love the Roth IRA. Uh, we love deleting the IRS out of being the partner of retirement for our clients with their retirement accounts. Um, and also those folks are really happy that they've got that. Also, Sam, when we come back from the break, you're going to have our bad decision. Number four. And these are just pitfalls that you want to avoid. Sam, can you quickly recap the first three?

Speaker4:
Yeah. So the first three things that we've covered so far and our main topic today, bad decision. Number one, selling investments. When the market drops, don't let your emotions get involved with your overall investing plan. Bad decision. Number two is claiming those Social Security benefits too early. We don't want you to get pennies on the dollar for what you've put in. We want you to maximize your benefit, if possible, and get the most you possibly can by waiting till at least your full retirement age, if at all possible. And bad decision number three is not having that savings first mindset. Let's do what Warren Buffett said and save what is. Let's do what Warren Buffett said and spend what is left after saving, not saving what is left after spending and Ford. When we come back, we are going to get into we've got seven of these bad decisions, so we've got a few more to get through. You are listening to retirement results.

Speaker2:
Retirement results. We'll be right back to learn more and schedule your complimentary retirement consultation, visit retirement Results.com.

I was born in a small town. In a small town.

Speaker2:
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Speaker3:
And welcome back result drivers I'm Ford Stokes your chief financial advisor. I've got Sam Davis here with us who are our senior financial advisor and co-host on retirement results. And Sam, you've got bad decision number four. It's another pitfall we want to avoid in planning for that successful retirement.

Speaker4:
That's right. We've been talking about some financial pitfalls to avoid. And bad decision. Number four is not having a realistic budget or possibly having no budget at all. That would be a bad decision for sure. In fact, only 41% of Americans follow a budget. That's a bit concerning for that. The majority of people out there are really just kind of flying by the seat of their pants there, because a budget is such a crucial tool for managing your finances, achieving your financial goals, you really need to be the CEO of your own household. I mean, appoint yourself CEO of your own household because it's your money and no matter how much you have, you really want to make the most of it. And without a budget, it becomes way too easy to overspend and lose track of your priorities. Make sure you have that detailed budget that includes all your sources of income and your expenses. As well. You'll want to regularly review and adjust your budget to accommodate any changes in your financial situation. Now's actually a great time of year to do that in the spring. Before you get busy with all those extra activities in the summer, the days are longer. You should have just filed your taxes if you didn't file an extension. So it's a great time to kind of reset that budget.

Speaker3:
Absolutely. You know, one of the things that we like everybody to do is try to take two months and add the expenses together, then divide by two. And that'll give you a really good idea of how much you're spending. It's amazing how much you can save and how much money you can make. I mean, you know, Ben Franklin said, Penny saved is a penny earned. It's a big deal. And you really do need to try to start saving while you have money. Because when you're living on fixed income, you don't want to be in a situation where you would have gone back and yelled at your previous self 15, 20 years ago, right? And yes, I mean, we could all have made more money, been more successful, but you can at least save more on the money you're making. And in bad decision. Number five is paying too much in housing costs. Housing is often one of the largest expenses for retirees, so overspending on housing can strain your retirement budget. Carefully consider your housing expenses to ensure a comfortable retirement budget. If possible, think about downsizing or relocating to a more affordable and desirable area for retirees.

Speaker3:
There's another one. Sam, you and I get this question a lot. Hey, Ford, should I pay my house off? I've got a low mortgage. You know, we did a mortgage ten years ago, 20 years ago, and we're paying like 3%. And we did a great job. Should I pay my house off or not? And the goal is try to get my monthly expenses down. We're a little different than most financial advisors. We like to see people have their houses paid off in retirement, at least in that first five years of retirement, like the five years before retirement, the five years after that retirement red zone. We like to see that because if you don't pay off a mortgage, it's likely that that mortgage payment is going to eat up one of the two Social Security incomes that come into the household. So that's a big deal, Sam. Go ahead and share bad decision. Number six. That pitfall we're trying to avoid to help build a successful retirement.

Speaker4:
Yeah bad decision. Number six I would call this the uh the Dave Ramsey bad decision because he's preaching this all the time on his show. And we agree do not carry a balance on your credit cards. In fact, the average credit card debt for Americans 65 and older is $4,700. I'll say that again. The average credit card debt for American seniors is $4,700. If you can't pay it off each month, don't believe you can afford it. You know they offer some great airline miles hotel points, but for we like to say, you can't take those to the bank.

Speaker3:
You really can. And you know, you don't include those on your tax return right, as income that you received. Let's do everything we can to minimize or just absolutely delete the credit card balances. Pay it off every month. Be disciplined. Also want to make sure that everybody understands to money is not for just paying bills. What you should be doing is figuring out how you can make money. So then that money will make money and that money will work as hard as you do. Not having your money work hard against you. So let's make sure we avoid carrying credit card debt. Let's do that for sure. And then Sam, why don't you go ahead and share bad decision number seven, which I think is our final one that we're going to share in this list. And also if you want to this report, if you want to get this report with all seven of these pitfalls to avoid, all you got to do is reach out to us at (888) 814-0304, or you can visit retirement results.com/plan retirement results comm slash plan. Put your information in and we will email this report to you absolutely at no cost to you. Yeah.

Speaker4:
And bad decision number seven. This is our last pitfall to avoid. And it's not having a formal retirement plan. So many people when they come in and start talking about their plans for retirement, they immediately go to, well, I've got my Social Security and I've got this nest egg saved up, and I'm just going to take withdrawals when I need some money from that. But that alone does not constitute a retirement plan. You need regular streams of income to cover your expenses, including health care. A formal retirement plan will help you make informed decisions about your savings, your investing, and your spending. And like I said before, many people feel like they understand their money for the first time after they meet with us in that complimentary consultation and take a look at the formal plan that we've put together and and Ford, we just encourage all the listeners to consult with licensed advisors like us, because that plan is where it all begins.

Speaker3:
Yeah, we're here to help, and we've got to put your needs ahead of our own as fiduciaries and. You really want to try to do three big things? Number one is you want to get more tax efficient. You want to delete the IRS from being your partner in those retirement accounts that IRA, the 401 K, the 403 B, the 457, the Sep IRA, or the simple IRA. Next you want to get more market efficient, right? So market efficient. We want to try to avoid some of the reinvestment risk and the interest rate risk that is inherent with bonds. So you want to be very careful there. And then number three is we want to get more fee efficient. You want to work with a fiduciary and a financial advisor like ourselves that are going to minimize the fees that are going to be charged in advisory and portfolio fees, but also minimize what's usually considered hidden fees, which are. Expense ratios. So you've got an expense ratio within your portfolio. That's those are things like 12 B1 fees that are inherent with mutual funds, that are marketing fees, that the mutual fund companies are allowed to charge, but they don't really market, they don't really advertise. So you can see there's a real opportunity. To minimize the fees within your portfolio and not pay those exorbitant 12 b one fees or a share fees or C share fees with mutual funds. We use exchange traded funds to implement our portfolios, and those are far superior products from a lower fee perspective.

Speaker3:
Also with exchange traded funds or ETFs. Those are traded within the trading day. Whereas with mutual funds you've got shares with net asset value if you trade after the trading day is done. And so. There's just a lot of advantages to dealing with a portfolio that's got. Exchange traded funds. Um, you know, our expense ratio within our portfolio is, is right around 0.15 to 0.17. We have people that walk in our office with 41K plans and SBS and others that have got expense ratios at 0.7 to over 1%, which is remarkably high. And we want to do everything we can to help reduce those fees. So the other cool thing that we do, Sam, is that we will also look at the investment options that are available to somebody who's still working within their 41K, and we'll help them optimize. We'll give them recommendations they can implement within their own portfolio. And it's another $1,500 value. We do that absolutely at no cost. If they place other monies with us for us to manage, because we only make money when we manage money or when we sell them an insurance product like a fixed indexed annuity or life insurance or an indexed universal life policy. And we're here to help. We're here to help maximize that retirement nest egg, for sure.

Speaker4:
All right. Ford, and when we come back on retirement results, we're going to play right or wrong and help dispel some common financial misconceptions. You're listening to retirement results.

Speaker2:
Thanks for listening to retirement results. Schedule your complimentary financial consultation now at retirement results. Com or by calling toll free at (888) 814-0304. That's (888) 814-0304.

Mom and. Dad.

Speaker1:
Do you have a vision for what you want your retirement to look like? I'm Matt McClure with the Retirement Radio Network. Powered by Amira life. Planning for retirement can be overwhelming. A survey from Gobankingrates shows that one third of Americans don't think they know enough about retirement, and they're probably right. So if you fall into that category, how do you know where to begin? Well, you've got to know where you want to go before you start planning how to get there. That's where having a smart vision for your retirement comes in. Whether you want to be a jet setter during your retirement years. Want to take it easy in a quiet cabin in the woods, or start a new adventure by opening your own business, you should set that goal and keep it in mind throughout your working years, retirement expert Dean Waguespack said during a recent Ted talk. I want to.

Speaker6:
Challenge all of us to redefine retirement away from depart, remove withdrawal to a new definition a blending of pay, passion and purpose.

Speaker1:
Until retirement looks different for everyone. Sit down with your spouse and talk about your retirement goals. That will make it easier to determine how fiscally responsible you need to be now, and how much income you'll need to make it happen after you retire. That's right, I said. Income. More and more retirees are finding that cash flow is more important than one big nest egg number.

Speaker7:
That's when you want to say, hey, listen, I want to start thinking about all of this accumulation that I've done through these decades of working. How do I begin to think about turning what I've saved and what I've accumulated into paychecks after I retire?

Speaker1:
That's Lee Baker, president of Apex Financial Services. Speaking to CNBC. He says annuities are a great option for most retirees to generate an income you can never outlive. That's especially important since life expectancy has grown over the years, so you'll need to plan for a longer period of time than you may think. So do you have a smart vision for your retirement years? That's a key question to consider as you start planning how to get there. With the Retirement Radio Network, powered by Amera life. I'm Matt McClure.

Speaker2:
Are you concerned about rising taxes and how they could affect you and your family during retirement? If you have an IRA balance over $400,000, you could save six figures in retirement taxes that you would be paying during a 35 year retirement. Find out how much you could save today by scheduling your no obligation Roth conversion consultation with Ford Stokes of retirement results. Learn more and schedule an appointment at retirement results. Com Investment Advisory Services offered through Brookstone Capital Management LLC, a registered investment advisor. Visit retirement.com for more information.

Speaker1:
When it comes to retirement planning, focus more on income than building a big nest egg. I'm Matt McClure with the Retirement Radio Network powered by Amara Life. It may sound counterintuitive, but that big nest egg number you probably have in your head means a lot less than the income you'll have each month in retirement.

Speaker8:
The math has all changed here, but the bottom line is time is your superpower. Save as much as you can.

Speaker1:
Nbc news senior business correspondent Christine Romans recently said on The Today Show that you should not just rely on Social Security in your retirement years.

Speaker8:
Social security alone is not likely to support you in the manner to which you're accustomed, right? You want to wait as long as possible to get that maybe 70. If you wait till you're 70 to collect Social Security, you'll get the biggest check.

Speaker1:
And she says, contribute to your retirement accounts early and often.

Speaker8:
So this is from fidelity. They say at age 30 you should have one time your salary in a retirement account when you're 30. So think about what your salary is at age 30, and that's how much you should have in your entire retirement account. By 50 it should be six. This is where I start to freak out, because I know a lot of people can't and don't do this by age 67, it should be ten times a personal pension.

Speaker1:
Using a fixed indexed annuity is also a great option for many pre-retirees and retirees to consider. It offers protection from market volatility and a guaranteed stream of income that will last the rest of your life, no matter how long you live. Having a big nest egg may sound nice, but focusing more on income will set you up for success in your golden years. So, do you know where your paychecks and play checks will come from each month when you leave the workforce? That's a key question to consider as you plan for what's ahead with the Retirement Radio Network. Powered by Amira Life. I'm Matt McClure.

Speaker2:
Money questions? Money answers. You're listening. To retirement results.

Speaker3:
And welcome back result drivers. I'm George Stokes, your chief financial advisor. I've got Sam Davis, our senior financial advisor and co-host here on retirement results. And now it's time to play everybody's financial game show. Right or wrong, it's by far the most popular segment we ever do, and we try to do it at least once every couple of weeks. But since this week was our first week airing in Huntsville, Alabama, we wanted to make sure that we welcomed those good folks with a great right or wrong segment. And Sam, you've got a really educational right or wrong segment for us this week, and I look forward to playing along and giving you the right or wrong answers here. And let's see how we do.

Speaker2:
Come on down as we test your financial knowledge in right or wrong.

Speaker4:
All right for the first one on right or wrong, in 1975, almost 30% of the workforce had pension benefits. But today that number has decreased to 13.5%. Is that right or wrong?

Speaker3:
Well, that is right. And fortunately for Pre-retirees and retirees today, there are multiple options to establish your own personal pension with fixed indexed annuities and also replace the bonds in your portfolio with a fixed indexed annuity. And let me ask you a question. Why are you paying advisory and portfolio fees on the portion of your portfolio that is generating income? If bonds aren't there to really drive a lot of market growth? They're just there to pay an income after you buy them. There's not really a lot of ongoing financial advising going on with just that income portion. Let's say 40% of your portfolio, right? Also may surprise a lot of people to know, Sam, that the 6040 portfolio, which called modern portfolio theory, was actually born in 1952, Harry Markowitz was given credit for being the founder of modern portfolio theory, which basically stated that if you take 60% stocks and 40% bonds all traded on the same financial markets, it should build an efficient investment frontier. You know, the old adage is, is money rushes out of stocks in a down economy. They'll rush into bonds. That really hasn't happened very much over the last three years. In 2022, the 60 over 40 portfolio had its worst year in 41 years, which is remarkably awful. So a lot of people have replaced the bonds in their portfolio with fixed indexed annuities. And if you have not done that, and if you have not done that or have not considered doing that, and you want help on how to do that, all you got to do is reach out to us at retirement results.com/plan. That's retirement results.com/plan.

Speaker4:
All right. And here is the next one. Is this right or wrong. If your portfolio experiences a 20% downturn and then recovers 20% the following year, the portfolio will return to its original value before the loss.

Speaker3:
Well, that is wrong. Uh, is called sequence of return risk. To recover from a 20% loss, you'll actually need a 25% gain to get back to even should you lose 50%. As what happened between March oh eight and March oh nine, when the S&P 500 lost 50.1% of its value, you would need a 100% return on that lower principal that is now lower because you lost 50% of your assets. So you want to make sure that you're doing everything you can to protect and grow your wealth. Warren Buffett has got two rules of investing. Number one is just don't lose the money. And his number two rule of investing is don't forget rule number one. All right.

Speaker4:
And our third and final item on this week's right or wrong target date funds should be avoided when selecting funds for your IRA or 401 K because of their lack of customization, hidden fees, and unpredictable returns.

Speaker3:
That is absolutely right. These cookie cutter mutual funds are made to be a one size fits all, and are likely not going to reflect your actual risk tolerance and performance needs. Also, as the stock markets do worse, more and more of your portfolio goes into bonds. And if the bonds are not going up in value because of interest rate risk where you've got rising interest rates, then that is a double whammy problem. And yes, that's really technical double whammy problem. But I'm I'm serious here folks. We do not want to be invested in target date funds at all. Let's do everything we can to build our own portfolios and not just do the cookie cutter version. It's the final.

Speaker2:
Countdown. So let's recap what you may have missed. It's the final countdown.

The final count.

Speaker3:
So on today's show, we welcomed all of our listeners in the Huntsville, Decatur, Alabama area. We also wanted to give a shout out to our great and very loyal listeners in Atlanta, where our headquarters is based. Our office in Huntsville is located in the Cummings Research Park. We're happy to help you, and all you've got to do is reach out to us at (888) 814-0304. That's (888) 814-0304. We look forward to meeting with you and giving you a free financial consultation. It's a $1,500 value and we went through all the things you get when you meet with us. You get a free portfolio analysis, a free Social Security maximization report, a free retirement income gap analysis. You also get number four would be a financial plan to your 95th birthday at no cost to you using your current plan. And then number five is a financial plan, your 95th birthday with our recommended portfolios. That also includes a Roth ladder conversion. And Sam, can you quickly recap those seven pitfalls we want to avoid in building for a successful retirement?

Speaker4:
Yes, of course, number one was selling investments. When the market drops, you don't want to let your emotions affect your overall plan and lock in those losses. That would be a bad decision. Bad decision number two is claiming your Social Security benefits too early. Please don't settle for pennies on the dollar. Work with a registered Social Security analyst like our host, Ford Stokes, who can really help you, maximize you and your spouse's benefit for the long term. Bad decision. Number three is not having that savings first mindset. Bad decision number four is not having a budget or not having a realistic budget because some people think they have a budget in place, but it's really not giving them enough wiggle room to save for their retirement. Bad decision. Number five of seven five was paying too much in housing costs. Maybe considered downsizing. When you get into retirement, pay that mortgage off before you retire so that you can really work with a full, wide retirement income source in retirement because Ford mentioned earlier in the show that could eat up one of your two Social Security payments coming into the household. So make sure you have those housing costs in order. Bad decision. Number six, we gave a shout out to Dave Ramsey. We don't want you to carry a balance on your credit cards. We don't agree with him on everything, but we absolutely agree with him on that. Pay off those credit cards every month and make sure that you're not carrying a balance, because those interest rates are very high. And our seventh and final bad decision is not having that formal retirement plan. And Ford, how exactly can we help everybody out there listening get that formal retirement plan in place? Yeah.

Speaker3:
All I've got to do is visit retirement results.com/plan. That's retirement results. Dot com slash plan. We built a page for you so you can input your information. And we'll get in touch with you. We'll gather all of your expenses, your income uh, your Social Security statements, your financial statements. We'll do a full analysis for you and a financial plan to your 95th birthday. We're so glad you've been with us here on retirement results. We really like educating people on how to successful retire. And we want to help you. All you've got to do is reach out to us at (888) 814-0304. That's (888) 814-0304. Remember, when you're seeking information about retirement, your planning, your retirement, if you're going to be a bear, be a grizzly, be as aggressive as possible. Get as much information as you can. And we look forward to helping you right here with active wealth management and our retirement results. Financial radio show and now retirement results television show airing in Huntsville and Columbus. Have a great week everybody.

Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777 to connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.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. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, if any exist, please refer to our firm brochure, the ADV Two.a, page four. For additional information.

Speaker1:
Not affiliated with or endorsed by the Social Security Administration or any other government agency, fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to. Fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

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