Building a Tailor-Made Retirement Plan for 2022: Audio automatically transcribed by Sonix

Building a Tailor-Made Retirement Plan for 2022: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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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, investigate and now your host Ford Stokes

Ford Stokes:
And welcome the Active Wealth Show activators I'm Ford Stokes, your chief financial advisor, and we've got a special guest on at the beginning of the show. We've got two segments where we're going to be talking to the good folks at North Cobb Christian High School because I figured out and found out that they do an incredible job with teaching personal finance, which all of us could have learned long, long time ago during when we were in school. I just welcome the show, Dr Chip Houston. Really appreciate you joining us.

Dr Chip Houston:
Ford, thank you so much for having us. On behalf of our head of school, Mr Klieman and all the faculty and staff and students and families were really excited to be on your show.

Ford Stokes:
Oh, it's it's our pleasure. Can you tell us a little bit about North Christian High School? And then I kind of also what your focus is and trying to help people throughout their lives, not just help them graduate from high school and get to college?

Dr Chip Houston:
Absolutely. North Christian School has been around since 1983. We're an independent, interdenominational college prep Christian school. We actually serve ages three through 12, so we have a preschool lower middle and an upper high school, and we're on about fifty six acres up here in North Cobb. And we're sitting about a total of

Ford Stokes:
That's quite the campus.

Dr Chip Houston:
It's beautiful and it's really nice. Definitely encourage you to check out the the website there at NCChristian.org and come in for a tour.

Ford Stokes:
Let me stop you real quick. So let's just listen. If you're a grandparent or a parent, you're thinking about trying to take your child to the next level for their secondary education. You know where you're trying to get them anywhere from three years old all the way through 12th grade. I would encourage you to visit NCChristian.org. That's in as a Nancy season cat, Christian .org. So go ahead. Sorry. Dr. Harrison.

Dr Chip Houston:
No, I appreciate it. So, you know, getting to what you were talking about with preparing students today for for things like personal finance know schools changed a lot since we were in it, since at least since I was in

Ford Stokes:
I'm old too. So don't worry about it.

Dr Chip Houston:
But a lot of a lot of schools now are really focused on getting students more real world experiences and building the muscles now and not waiting until after college to get practical, real world experience, particularly in business and finance, in whatever field they're going to go into. So in trying to be responsive to the needs of students today, our school has created five different academies. And so it's really about helping students develop their own unique gifts and talents and calling and getting them plugged in with as many real world opportunities and real genuine experiences, not just school experiences. So we have five academies of the Academy of Business. We have a STEM academy. We have the Academy of the Arts, the Academy of Exercise and Sports Science. And finally, the Academy of Counseling Ministry and Education.

Ford Stokes:
I would have gravitated towards the business one day one, so that's where I would have been. I get to tell you it's we're also going to hear from one of your students, I think, in segment two. So it's pretty exciting stuff. And I think Ryan will be able to tell us what they're doing in the Business Academy because he actually leads that as well. With fifty six acres in the Atlanta area, that is remarkable. Can you talk about what you guys do besides just setting up the five academies to really invest in children, to get them ready to move on to the next stage in life? Hopefully it's to college or to get a vocation and really, really help provide for their own families and also help them earn and save as well.

Dr Chip Houston:
Absolutely. We're trying to be really intentional about partnering with with families. And our mission is providing a not only a biblically based education as a Christian school, but an academically excellent education. And and that's kind of the base level and then part of our mission is impacting the world or impacting the culture. You know, we want the students to find their calling, find their gifts and and do that. So we have it's it's about the whole child, right? So we not only have these great academies and these academic programs and of course, all the apps and so forth. But we have a rich athletics program. We've got 50 for athletic teams in in 20 different sports, which is pretty remarkable for for a school, our size. We have 17 performing arts or fine arts ensembles, orchestra, band, chorus, visual arts. In fact, we just had one. You might have seen this on social media. One of our teachers created a portrait of Freddie Freeman and his child and and Freddie got it on Christmas. Oh, that's super cool. Picture of that. And I would say also, our college counseling is a real value add for our families because we have three college counselors who really start with ninth grade and getting to know the kids and helping them look at the different college options scholarship options. We had one hundred percent of the class of twenty twenty one was admitted to a college or university. They had over six point five million dollars in scholarships, not including Hope or Zell Miller Scholarship. So yeah, there's a lot going on

Ford Stokes:
And that's just remarkable, especially when you consider what's going on with schools these days and also what's happened with COVID and people, you know, going to school remotely and people also, you've got students that are dropping out of Atlanta area schools. A lot of those are public schools, obviously, but it's it's just remarkable what you guys are doing to me, just teaching the practical side of it to that that 100 percent accepted into colleges is a perfect example of practical education. You don't you're not going to a school like North Cobb Christian to not continue your education and to not move on to college. That is quite a remarkable achievement on that. And I know we're going to dove into this with with Ryan in the next segment. But can you talk just a little bit about just kind of all the teachers you've got there on campus, the type of folks that are there to kind of coach, mentor, train and teach on your campus?

Dr Chip Houston:
Absolutely. Well, we we always we work to assemble the the highest performers we can to serve the students and families, you know, advanced degrees, ongoing professional learning, and we do a lot of in-house professional learning. In fact, every Wednesday, we have a late start for the students, but the teachers come in so we can have collaborative professional learning. We focus on all sorts of different trainings and initiatives as a whole school, and then we target different divisions or groups or grade levels for specific trainings, whether it's getting trained in Aughton, Gillingham for for reading and language acquisition in the lower school or whether it's project based learning and the upper school. We've been working through a new master schedule design in the middle school, trying to use time, effectively trying to look at there's a lot of stuff in neuroscience informing education. And how do you how do you allocate time in a school based on what's best for kids and how their brains work?

Ford Stokes:
One other thing you mentioned is time. A lot of people don't realize when they're saving for college, that they're running out of time and they really need to start when their kids are in in elementary school or definitely when they're in middle school. So you have time to prepare for that kind of serious investment. Obviously, you know, North Christian High School is a private school, so it does require a financial commitment as well. But we we work with with families to help that planning side, not just the 529 accounts, but also ways to invest in more of a tax advantaged way and also allow them to kind of build their wealth. And they can use some of that money for either for college or they can use it for their own retirement or even for the retirement for their children as well. And so, you know, that's one of the reasons why we jumped at the chance to kind of work with work with you guys, have you guys on our, you know, our show and also we're going to provide, I think, a free seminar on your campus whenever you guys want to do that. So in all, the materials are free. So we just appreciate that opportunity.

Dr Chip Houston:
We appreciate we appreciate that from you. You know, and it is, I think even before college, just, you know, investing in a private school education like at North Christian requires some planning and some sacrifice. And when you look at you mentioned COVID, I mean, it's it's absolutely wrought havoc on kids all over the nation. And so we've been really fortunate to be able to. Maintain being in person for the most part and having low, low numbers, but a lot of that is because we have the support of parents, grandparents, the community and you've got to plan and prepare and and sacrifice to make that happen.

Ford Stokes:
Yeah, thank you all for making sure that you're teaching was present during COVID. That's just a big thank you for me. It's such a huge deal. I've been an advocate for for kids and kind of Forsyth and Fulton Fulton County for a long time, and I'm just blown away by the impact on our youth of what Covid's had. And I just really appreciate the commitment that came from North Christian and what you guys have done. That's huge. So when we come back from the break, we're going to talk to Ryan Moore, who's in charge of one of those programs. He's in charge of the business program. He's also, I think, the pitching coach on the baseball team, which is kind of cool and we're going to talk to one of your students as well. So we're not just going to take your word for it and we're going to actually we're going to talk to one of your students, too. We did this segment, these two segments we brought you all on the radio show because we wanted to really share the good news, what's going on in our Atlanta community and specifically how you guys are taking personal finance, training and teaching earlier and earlier than what any of us ever experienced. And so we just thought it was a big deal to share with our listeners. And Dr. Harrison, thanks so much for being on the Active Wealth Show.

Dr Chip Houston:
We're grateful. Thank you.

Ford Stokes:
Absolutely. And we come back, we're going be talking to Ryan Moore with North Cobb, Christian High School and one of their students to learn a little bit about personal finance and might be able to help you with your own personal finance planning. And we'll be right back. You're listening Active Wealth Show right here on a.m. 920 The answer

Ford Stokes:
And welcome back activators, the Active Wealth Show, I'm Ford Stokes, your chief financial adviser, and I'm joined by Ryan Moore with North. Com Christian High School. He's a teacher and also a baseball coach and assistant head baseball coach over at North Christian High School. And Ryan, I used to work together, and that's how I stumbled upon this school, and I've just been so impressed with what he's done in his business academy stuff. We're also going to be speaking to his school and also giving seminars at the school for parents and for kids, and we just felt like it was a good idea to put them on the radio. Ryan, welcome to the Active Wealth Show.

Ryan Moore:
Hey, Ford, thanks for having me. Really excited to be here.

Ford Stokes:
Oh, it's my pleasure, man. It's good to see you. Can you talk a little bit about what's going on with Business Academy? I want to make sure we have enough time because that's the number one reason why I wanted you all on the show because I didn't get personal finance training. I didn't get really business training. I got to take economics when I was in high school and I went to another area, a private high school in Atlanta. But I still didn't get I mean, even in in undergrad and grad school, I didn't get personal finance, coaching and training. And it would have made a big difference early because you've got to learn to make sure you're not living above your means and you're not generating the large credit card debt because you know that's just going to steal your future away from you. Just talk a little bit about what you guys are covering in that business.

Ryan Moore:
Academy, though, apply to the academy as freshmen, the class where coursework doesn't start for them until their sophomore year and they'll take some introduction courses. We have intro to accounting and finance. Those are their two courses sophomore year junior year. They're going to transition into a marketing class spring semester, junior year. They shift into introduction to law. And then after that senior year, we've kind of shifted the curriculum from a managing and leading class to now it's like an entrepreneur, ship class entrepreneurship, one on one, if you will, which is great. And I get that everyone's not going to be an entrepreneur. But the big takeaway from that class is the ability to make decisions and to think critically, because some of the the biggest killer sometimes whether it's in the business world or a personally, is the inability to make decisions and have having a pile of indecision on your desk. So that class is kind of like the capstone course for the academy. And then as a senior in the academy, not just for academy students, but all seniors at our school must take personal finance before they can graduate. And it's awesome. It's great because we talk about how to run a budget, knowing how much money is coming in versus how much money is going out, telling every single dollar where to go. We talk about how to invest, creating IRAs, Roth IRAs in particular.

Ford Stokes:
And then we sound familiar activators. I've been telling you, you guys have got to set up your own Roth IRA. You got to be Roth Ladder Conversion and they're learning it in high school. So what's your excuse, right? So that's fantastic.

Ryan Moore:
Yeah, it's good stuff.

Ford Stokes:
Yeah, I mean, it's, you know, knowledge is power. It's tough to be aggressive when you're confused. And if and if somehow some way you're you're no longer confused when you're dealing with whether it's TurboTax or talking to an accountant starting in high school, that's a really big deal. So, Ryan, we got like a minute left in our talk with you. Can you just share a little bit about what's going on with the athletic program and and just how you're really helping and growing young people?

Ryan Moore:
Sure. From where I where we came from back in twenty six, when I graduated, the number of teams that we have, the number of offerings that we have from athletic standpoint, it's night and day from where it was to now where it is. Football team is doing great. That wasn't here when I was here. So we've added a football program which is huge for any school, but in particular with the baseball program. Our head coach Jimmy Keene, he took the helm, I think five years ago, and within that five years, 60 percent of our seniors have gone on to play at the next level in college. Whether that's division one two three in AA or the JUCO level,

Ford Stokes:
That makes it so fun to be a fan of that team.

Ryan Moore:
It's really great, man, and I think some nationwide statistics, I want to say there's fifty two thousand college baseball players from high school. About only nine percent of high schoolers go on to play at the next level of college. So the fact that we can say 60 percent of our seniors go on to play somewhere, you know, obviously making you a better player, a better person individual. But if that's one of your goals to play at the next level, we've got some, some good history and good track record to make that happen for you.

Ford Stokes:
That's great. I mean, sports teaches a lot, and I just applaud everything you guys are doing at North Christian High School. I think that's fantastic. And now I think we're going to get the chance to hear from Nicklaus, but specifically, just give me. Just your last parting thought, I want to make sure you get the last word in here. Just tell us, tell us a little bit about kind of, you know, if you're a family considering, you know, you've got you've got a student maybe struggling in public school, why should they consider North Christian High School, in your opinion,

Ryan Moore:
Just given the current climate that I think we're in right now, especially with everything COVID related, I know Doctor Dr. Houseand mentioned that we've been able to to kind of stay face to face, and we have great protocols. We have a great we have two nurses on staff here that have come up with an outstanding plan along with our administration to make sure that everyone's staying healthy and following the right protocols so we can stay face to face. Because I think virtual school, we had a period of time where we did do that and I think it's so detrimental to students at that age. You know, they flip their computer on, you take role and then they mute their mic to mute their camera and they just play some video games or whatever they do. So I think the fact that we're able to find a way to to stay here and keep the students in the classroom with us is what really has driven enrollment and our admissions office going crazy over the last couple of years, I'm sure. So I think that that's vital that to have that classroom experience and to not be virtual here and there is huge and the students don't lose so much.

Ford Stokes:
Yeah, I completely agree with Ryan. It has been great to see you. It's great to reconnect. I'm so glad that you're doing so well over there in North Christian High School and helping young people. And we can't wait to get over there and provide seminars as well for the parents and the grandparents. But now I want to talk to Nicholas a little bit about his story and his experience at North Cobb Christian as well.

Ryan Moore:
Absolutely. Thank you so much, Ford.

Ford Stokes:
And we've got Nicholas with North Cobb Christian High School. He's a student at North Cobb Christian High School, and for me, I never was actually on the radio or on a video podcast when I was in school, so Nick was already way ahead of me. So Nicholas, welcome to the Active Wealth Show.

Nicholas:
Thank you for having me. It's such an honor to be here.

Ford Stokes:
Hey, Nicholas, can you tell us a little bit about your journey within North Christian High School as you've gone through school?

Nicholas:
Yes, sir, I'd be glad to do it. So I actually started going to North Cobb Christian in fifth grade and I never looked back. And when I got into ninth grade or just a little bit before that, I applied to be in the business academy. There's an application process that you go through and you apply, whether that's STEM or one of the arts. But for me, it was business and I applied and kind of told them what I'd like to do and what my aspirations were. And that's kind of how I've ended up where I am now.

Ford Stokes:
That's great stuff. And now I understand that you have an interest in music and then you were interested in actually being a deejay and you thought you were going to actually be a DJ for one of the events, and they'd already hired a DJ, but you went to go talk to them, and I want to tell us a little bit about that and how that led to an actual job for you and also talked us a little bit about where you're headed to school and what you're going to do.

Nicholas:
Yes, sir. So a little bit of context for that coach more. We have the capstone course, which is it's an entrepreneurship class and you kind of create your own business and go from there. And I was kind of struggling up until that point kind of getting started because it's hard to go in as as an 18 year old with very little experience to get into place. So I tried to do it at my own school. And long story short, I just kind of had a door slammed in my face just didn't work out. But one of the things that Coach Moore was kind of teaching us about is if you don't have a door, find a window. And that's kind of what I try to do. So I spoke with the DJs that were there. And after some conversation and kind of talking with him, it ended up landing me a job there. And I've actually worked a couple of the events with those guys. So I was really cool opportunity for me and definitely where God opened an amazing opportunity for me.

Ford Stokes:
Well, it's also where hard work meets opportunity, right? That's pretty good stuff. So it also led to, you know, you're obviously you're you're a senior, is that correct at Northwestern High School and you're also headed to school, headed to a college to talk to us a little about what all went into you making the decision where you're going to go to school.

Nicholas:
Well, originally I didn't actually know that I wanted. I've always been passionate about music. It's something that I've gone to for kind of any way that I'm feeling. But I didn't know that I wanted to go and study music until this summer. My mother actually had a surgery that was done, and it caused. She I to spend time together that we ordinarily wouldn't and just through some conversation, really heartfelt moments, she kind of said, Well, why not try and do something that you want to do? Why not try and go and pursue something that really would make you happy? And so I kind of looked online and did my own research, and I found out that Belmont in Nashville had a really excellent music business program. Business minded and I love music. I figured, you know, that was a really good segue way to kind of go into and it was kind of a no brainer from there.

Ford Stokes:
So well, moms usually know best, so that's pretty cool. That is awesome. So what can you say to any prospective student or parent or grandparent that would consider, you know, let's say they're they're an eighth grade and they're considering where they're going to go to high school? Why should they consider North Christian High School?

Nicholas:
Yeah, I think no matter what you want to study or what you want to go into, whether it's business like me or if it's science or math or anything like that, the teachers are definitely what sets the school apart from everything. I mean, when I gave my my capstone course presentation, every single teacher that I ever had a conversation about or that poured into me was there, and there was a really cool moment for me. So definitely the teachers, they really do care and you're more than just a number to them. You're you're somebody. And I really appreciate that a lot.

Ford Stokes:
That's awesome. Now also, we've got a lot of listeners who are always focused on their retirement. They're investing for their retirement. Can you give us the the best thing you learned in the personal finance class, the course that you're taking that you could share? That's good advice for pre-retirees and retirees to get prepared for their retirement.

Nicholas:
So I'd say invest when you're young, definitely don't be afraid to take some risk and kind of invest while you're while you're young. But then also. At least for people my age. Money does not grow on trees, and that is something that I think a lot of people have a misconception of. So whatever you do with your money that will kind of follow you, so be very smart, make wise decisions and set good habits early on, you'll be thinking

Ford Stokes:
Couldn't said it better myself. So glad I had you on here. So that way I don't even have to do the rest of the show. That's perfect. Thanks so much, Nicholas, for being with us and good luck over there at Belmont in Nashville. It's a pretty fun place to go to school and congratulations on your success and thanks for being on the Active Wealth Show.

Nicholas:
Thank you for having me. It was a pleasure.

Ford Stokes:
And welcome back activators. The Active Wealth Show and I'm Ford Stokes, the chief financial adviser. And I've got Sam Davis, our executive producer on Here with with me. Sam, how impressive was that young man Nicholas, who goes to North Cobb Christian High School?

Producer Sam Davis:
Man, I was just blown away by his poise on the radio show, probably our youngest guest we've ever had on the Active Wealth show and one of the most impressive.

Ford Stokes:
Yeah, it was really neat. I think he said the best thing I've ever heard about personal finance. The decisions you make with your money will follow you throughout your life. Just so wise. No question. And so make sure listen activators make sure that you're doing everything you can to make smart decisions about your financial future. Don't just try to do it on your own. Also, make sure you understand all the things we put in the the twenty twenty to retirement resolution checklist. We're going to go through those again because we got so many requests for us to go over these again, and it took us all show last time. So we're going to try to squeeze them into these two segments. But before I get into that twenty twenty to retirement resolution checklist, I want to talk about what Micro said in an interview with Fox News and Fox Business. It was incredible that there was a record of four point five million people quitting their jobs in November of twenty twenty one, and he says this will impact every single American. And he said that this is a conversation about our workforce and the imbalanced nature of it, and the way that it's going is going to impact every single American who shares my addiction to smooth roads, indoor plumbing, affordable electricity and so forth. Sam, just kind of your thoughts on what Micro said and how we've all got to get back to a working culture and not sitting on your tail in a living wage culture.

Producer Sam Davis:
It's been a rough last couple of years for everybody in the United States. But as we flip the calendar to a new year, I think we all need to do our best to get on the right track in twenty twenty two and get things going. You know, our community only works when we all work

Ford Stokes:
Together, so let's get after it. Amen. I totally agree. All right, so let me jump straight into this twenty twenty to retirement resolution checklist. We're going to go quick. So but I also, if you want to get this checklist, can just email me at Ford at ActiveWealth.com. That's Ford at Active Wealth to receive a copy oft his twenty twenty to retirement resolution checklist. Number one is get your portfolio and analyzed. You want to understand the risk you're taking, the hidden fees you're paying. Even if you know what your advisory and portfolio fees are, you may not understand what your expense ratio is within your portfolio. And if you don't know what an expense ratio is, and you definitely should consider booking an appointment with the over at ActiveWealth.com. But you also want understand the correlation your assets, the allocation of your assets, the the geographic risk you're taking, the business sector risk you're taking, and you really just need to seek to understand what's going on with your portfolio right now. But specifically, the one thing you can control is the amount of fees you're paying. And a high expense ratio within a portfolio is usually driven by mutual funds, charging 12b one fees a share fees and C share fees. And that's something you can eliminate just by investing in exchange traded funds instead. So that's one and also making sure you work with a financial advisor that implements their portfolios, as we do with, you know, portfolios that are ETF based. They're not mutual fund based, and we can still get you the same diversification, but at a much lower expense ratio.

Ford Stokes:
Risk level example most four one ks that come in to our office when we do the analysis of a four one K there, generally between zero point seven and one point zero on an expense ratio. So zero point seven or one percent of the portfolio is losing, it is getting billed out and fees that don't show up in the statement, they just show up in the bottom line value of the account at the end of the year. Our portfolios, conversely, are only zero point one five to zero point one seven of an expense ratio, so that is much lower than point seven one plus percent. So that's something you should consider. Number two is if you have an annuity, get it analyzed, especially if you've got an annuity that you've had for over 10 years. It's out of surrender, period. You could actually move that over and get an immediate 10 percent bonus if you wanted to, especially you haven't turned on income yet, so we could really help you there. So that's number two. Number one was get your portfolio and analyzed. And number two is if you have an annuity, get it analyzed. This is all part of the twenty twenty to retirement resolution checklist. Number three is if you have a pension, you should consider taking the lump sum and changing the type of product that is being used. You want to change a lump, you know your basic pension.

Ford Stokes:
The product behind a basic pension is a CPA, a single premium immediate annuity. Those are really good products that paying you your money back. They're not really great products or growing your money because they're not index linked and you want to have that index linked with a fixed indexed annuity or an effia instead of a CPA. And therefore, you can grow your money within that annuity and hopefully get a higher payout over time from your annuity and have account value left over that you can pass on your heirs. So that's something to really consider. You want to be fee efficient with your annuities as well. You want to inspect your jokes back and try to avoid any income rider fees. Number four is get a plan for when the paycheck stop. Retirement is about replacing your income, not about building just one big nest egg number. You want to make sure that you have a retirement income plan, and we help people with establish a retirement income gap analysis. Whether you've got a positive or negative income gap will help you figure that out. And if you've never done one of those analysis, go ahead and reach out to us. At (770) 685-1777 again (770) 685-1777 and we're going to give you a free portfolio analysis of free retirement income. Gap analysis will give you a free Social Security maximization report and a free financial plan to your 90th birthday with a Roth Ladder Conversion all free at no cost to you.

Ford Stokes:
It's a fifteen hundred dollar value. We'll give it to you absolutely for free at no cost to you. Number five is get a retirement income gap analysis done. Like we just talked about, you want to maximize your Social Security. You want to get your Social Security plan in place, but you also want to get that Social Security maximization report. But you won't understand what your monthly expenses are versus what your monthly income is. And if you start, here's a hint, folks. If you start your retirement with a negative income gap, with inflation, the way it's going right now, that gap is going to widen and you're going to not be able to have as much purchasing power and you won't be able to enjoy your retirement as much as you think you will be able to. And remember, we spell love Tim here. We want to make sure that you've got the right type of portfolio, the right type of entire retirement plan with the retirement income, so you can spend more time with your family. Bottom line, then number six and this is an important one. Understand the bonds you're holding. Most folks don't. They don't understand the investment grade of their bonds. They don't understand what the interest rate is paying on their bonds. They don't understand the risks they're dealing with with bonds. Did you know that the go forward p e ratio or price to earnings ratio of U.S. stocks is twenty two to twenty three, so twenty two to twenty three times earnings? Would it surprise you to know that the go forward p e ratio for bonds for U.S.

Ford Stokes:
corporate bonds is over one hundred and fifty? And if you don't think there's a bond bubble and you don't think bonds can be affected and you don't think bonds can be a negative boat anchor on your portfolio, I would beg you to reconsider and consider some bond replacement strategies. But at least do me a favor at number six. Understand the bonds you currently hold. Understand the investment grade bonds. You know the duration of your bonds. The longer your bonds go, the more volatile they can be and the market value. And what is the average interest rate your bonds are paying? And also consider a bond replacement strategy with either fixed index annuities or structured notes, or a combination of both modern portfolio theory that was born in nineteen fifty two. Harry Markowitz was given credit for it. The economists, even though he likely wasn't the first person to come up with a concept. 60 percent stocks. 40 percent bonds. The problem is what happens when the safe leg of the stool within your portfolio. Is more volatile and generates more market loss than what your equities can do. That's a significant problem. Bank of Montreal is offering a ten point nine zero percent minimum structured note for over the next 12 months. It is a note that that does involve market risk. It is a security, but it also carries a 30 percent buffer, which we think is a big deal.

Ford Stokes:
And as long as the S&P 500, the Nasdaq 100 and the Russell 2000 will lose 30 percent of their value. Your principle is protected and you get paid out one twelfth of ten point nine zero percent each month, and the note can't be called in the first six months. So that's an example of a bond replacement strategy that's paying you more way more than what a bank CD would do. A bank CDs paying zero point zero five percent if you walk into a brick and mortar bank right now. Ten point nine zero is infinitely better and higher than zero point zero five percent, so consider either a fixed index annuity or a structured note. We've got structure. We've got fixed indexed annuities that are illustrating at nine point eighty four percent right now. That's significant. We've got some structure. We've got some fixed indexed annuities that actually offer, you know, a 10 percent immediate bonus, something to consider. So we come back from the break. We're going to talk about the last four items on our twenty twenty to retirement resolution checklist, and we're going to talk about three financial rules that you need to follow for twenty, twenty two and beyond during your retirement. You'll see Active Wealth Show right here on a.m. nine 20. Answer We're so glad you're with us! Come back for the last four items on the Twenty Twenty to retirement resolution checklist and listen to three important retirement and investment rules that you really should be following

Producer:
Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Active Wealth Show with Ford Stokes, your chief financial adviser, to learn how you can reduce the taxes you pay before and during retirement. The Active Wealth Show Saturdays at noon and Sundays at 11:00 a.m..

Ford Stokes:
And welcome back activators, the Active Wealth Show, I'm Ford Stokes, your chief financial adviser, and Sam and I are so glad you're with us. We're talking about the twenty twenty to retirement resolution checklist and we're on number seven. Number seven is, are you investing smart enough? Don't just buy and hold. Do you have an actively managed strategy? That's one reason why we called the name of our firm Active Wealth management. Also, why the name of this radio show is the Active Wealth radio show is because we are trying to do everything we can to make sure that you're not just hanging in there, you're not following the market all the way down to the deep valleys that you're rebalancing on a monthly basis and not over trading. We can still stay strategic. Our portfolios involve some strategic investments. Basically means you're you're sticking with the investments you had at the beginning of the year, but then also tactical asset allocation portion of it is more of the active management part of it, where we're rebalancing into different sectors when we feel like those are going to pay out a higher payout than other sectors. Number eight is, is your retirement income source growing or shrinking? So specifically, if you've got an income source and you're trying to generate income off of bank CDs, obviously that's actually not growing with the market and you're losing value.

Ford Stokes:
I mean, you know, the the Social Security Administration came out with a five point nine percent cost of living adjustment in November to October four this year. It's going to kick in this year. That obviously is much higher than what you get in bank CDs or other lower paying bonds that are in three percent or lower. So you need to keep pace with inflation. You make sure also that your retirement income source is growing, whether it's your portfolio or a fixed index annuity. If you're if you're just if you bought a fixed annuity and it's only paying out one or two or three percent. And it's not it's not growing enough, you need to be market linked with a fixed index annuity and get market like gains without the market risk if you're going to go that path. But just make sure that your retirement income source your principal is growing, so therefore you can get increasing income from that principal. Number nine is make sure you have a smart health plan. Listen, when you turn sixty five years old, you're eligible for Medicare and you sign up for Medicare, that's great, but you need to have a you need to have a plan for what it's going to be likely the number one or number two source of expense for you during retirement, which is your health care.

Ford Stokes:
So if you're going to do a Medigap? Insurance plan where it pays for all your co-pays and deductible on the Medigap supplemental insurance plan, that's a really good idea. If you want to go Medicare Advantage and pay no money, it's more like an HMO situation. But if you get checked into a hospital, your co-pay or your deductibles going to be like six thousand eight hundred bucks. And for some people, that's a big number into a fixed income budget, so have a smart health care plan and we would encourage to work with our partner. Bonnie Dobbs with Medicare and other red tape. She's fantastic and we'll put you in touch with her. All you have to do is visit Active Wealth, click that set an appointment button in the upper right corner, and we're happy to get you an exclusive appointment with Bonnie. And she sits on the Council for Aging for the Atlanta Journal-Constitution. And I mean, she's forgotten more about Medicare than I'll ever know. She's fantastic, and you'll love working with her. She's passionate about about Medicare. She got into it when she was dealing with Medicare issues with her father in law years ago, and now she's like the top Medicare professional in Atlanta. And so that's why we we work with only best in class.

Ford Stokes:
And then lastly, just have an overall retirement plan instead of simply chasing rates of return. You want to have a tax efficient fee, efficient and market efficient plan, and we can help you do that. All you've got to do is visit Active Wealth and click that set an appointment button in the upper right corner. We're happy to help you. Now we promised to talk about three rules. The first rule is rule of one. Basically, it states how you take one hundred, you subtract your age from it. Let's say your age 60 and the remainder is 40. That's left over. That means only 40 percent of what's left over in that equation, and that calculation should be at risk. That should be the percentage of your portfolio that is at risk in the marketplace. And many of you people just probably gulped or drove off the road right now, but many of you were invested 80 plus percent because you don't trust bonds. Rightfully so, but you're taking a lot of risk and you ought to consider bond replacement strategies to get you income and also get you growth at the same time. And we can help you with that with either fixed index annuities or structured notes. The next rule so the number one rule is rule of one hundred.

Ford Stokes:
The next rule is Rule seventy two. And basically what it means is how often your money is going to double in on the returns you're getting. So let's say you, you make 10 percent a year. Well, if you divide 72 by 10, that's seven point two. So your money is going to double every seven point two years. It's great to know the rule of seventy two. It's also works the other way. If you want to look at credit card debt and everything else, you can look at what the credit card debt will double and how fast that will double for you to goes the other way. So Rule Seventy Two is a great way to figure out how you can, how fast you can double your money. Annuity360.Net is a great place to go to go get my new book Annuity 360, and we want to play the four percent rule the chapter from my new book Annuity 360. Go ahead, Sam and play Chapter seven for my new book. It talks all about the the four percent rule. I think you're going to like our four percent rule chapter, and it really just understands how much you should be withdrawing from your portfolio each and every year. Chapter seven The four percent rule big idea

Ford Stokes:
Withdrawing four percent or less annually from your portfolio will ensure that you will not draw down your account too quickly and that your income lasts for your entire retirement. What is it? The four percent rule is a rule of thumb used by investors to determine how much retirees should withdraw from their retirement account each year. This rule should ideally help provide a steady income stream for the retiree, while also maintaining an account balance that keeps their income flowing throughout retirement by withdrawing only four percent from your account. Many financial professionals believe this will help your wealth last through your retirement and that you will be able to live comfortably with this withdrawal rate. This rule helps financial planners and retirees set the withdrawal rate for their portfolios. Life expectancy also plays an important role in this process by determining if the selected rate will be sustainable. Retirees that live longer will need portfolios to last longer, and medical costs and other expenses could increase as retirees age. Where did this rule come from? The four percent rule was created using historical data on stock and bond returns over a 50 year period from nineteen twenty six to nineteen seventy six before the early nineteen nineties. Experts generally considered five percent to be the safe amount for retirees to withdraw from their portfolio each year. In nineteen ninety four, William Bingen, a financial advisor, conducted a study of historical returns. He focused heavily on the severe market downturns in the nineteen thirties and the nineteen seventies. Bingen concluded that even during those markets, there was no historical basis that a withdrawal rate based on the four percent rule would exhaust a retirement portfolio in less than thirty three years.

Ford Stokes:
What about inflation? Some retirees will choose to stick to the four percent rule all the time and never adjust for inflation. However, the rule allows retirees to increase the withdrawal rate to keep up with inflation. There are two options to do this. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Option one Setting a flat annual increase of two percent, which is the Federal Reserve's target inflation rate. Option two Adjusting withdrawals based on actual inflation rates. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Two scenarios where you should avoid using the four percent rule. Scenario one A severe or protracted market downturn can erode the value of a high risk investment vehicle much faster than it can in a typical retirement portfolio. Be cognizant of the health of the market and talk with a professional if you have any questions or want to make changes to your portfolio. Scenario two The four percent rule does not work unless you commit to it year in and year out. Violating the rule for one year to splurge on major purchases can have severe consequences down the road. It will reduce the principal, which directly impacts the compound interest that the retiree depends on for sustainability.

Ford Stokes:
And now for our final countdown, it's the.

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

Ford Stokes:
Well, in this week's show, we heard from Dr. Chip Houston, we heard from Ryan Moore and we heard from one of their students, Nicholas, about how great and all the great things they're doing at North Cobb Christian High School. If you're interested in trying to get your grandchild or child to go to North Christian and high school, you want to learn more about what they've got going on there, which is some really great stuff. I would encourage you to visit and see Christiansborg. That's Nancy Christiansborg. Nicholas was just an incredibly impressive young man as a senior there at North Cobb Christian, and we wish him all the best and he's going to have a bright future, for sure. And then we talked a lot about our twenty twenty to retirement resolution checklist. We thought that it was really important to go ahead and reshare that. We talked about it last week. We really enjoyed sharing our story here today with you on the Active Wealth Show. Remember when you're dealing with retirement and you're dealing with any situation, knowledge is power. If you're going to be a bear, be a grizzly, do everything you can to learn as much as you can to implement a free, efficient market, efficient and tax efficient portfolio. Thanks so much for being with us. And when we come back next week, when we talk about more about smart financial planning and how to build your own smart financial plan, listen to Active Wealth Show right here on AM nine one. The answer I have a great week, everybody.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at (770) 685-1777 or visit Active Wealth. Investment Advisory Services Offer through Brookstone Capital Management LLC. Become a registered investment advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offer 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.

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