Financial Headwinds You Should Expect in Retirement

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

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

Producer:
Welcome to 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.

Ford Stokes:
Welcome to Retirement Results, Result drivers. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis, our senior financial advisor and co host here with you on this week's show. We've had quite the week already Mr. Sam Davis. Yeah very.

Sam Davis:
Interesting. Welcome to the weekend result drivers. And welcome back to Retirement Results I'm Sam Davis Ford. So happy to be here with you I believe this is our eighth straight week here on the John Fredericks Radio Network. And we're excited to bring some more essential information for all the Americans out there, all the Patriots that are looking for information right now. And Ford, earlier this week, people were looking for information when it comes to the connection on their phones. I woke up on Thursday and there was no cell phone connection. And I think there's still some issues out there and just definitely a concern whenever you see those sort of issues arise.

Ford Stokes:
Yeah, we're going to be talking about the financial headwinds that American retirees are facing. And I would say one of those things is a chaotic world. Um, and I would kind of lump in with the war in Ukraine and also what could happen between China and Taiwan as well. And those are things that are just chaotic that that retirees, American pre-retirees or retirees cannot control. And on Thursday, they could control whether they could use their phone when they're in their cars or not. Also, so many people get their podcasting. So many people listen to Retirement Results as a podcast in their car, whether they're getting off of Stitcher, Spotify, you know, Google Play, iTunes, and also if you want to listen to Retirement Results, you can always visit Retirement Results. Com and you can watch any of our episodes, but also listen to any of our episodes as well. But so many people are using like Spotify as an example, Sam to listen to Retirement Results and they can't listen to it. When there is no cell coverage. And I'll tell you, seeing that SOS on my AT&T. Apple iPhone. Um, I think I've got like, I don't know, one of the later ones. And, uh, it is crazy how different it is and for so many.

Ford Stokes:
You know, kids and grandkids of pre-retirees and retirees that those millennials and the Gen Z out there. A lot of you haven't really even lived in a world without a cell phone or without coverage. There's just so many different things for us, Sam, our twin girls who are, you know, juniors in high school. And all of a sudden I'm, you know, we're used to having like 360 and be able to see where they are. And also there used to be able to plug in directions and use our Apple CarPlay and their cars. And now all of a sudden that stuff can't happen. And we had to like coach them on, hey, you need to go into a store and use Wi-Fi if you're in trouble or if you're if you break down or whatever. That was just a really interesting, you know, thing that I never thought I'd have to coach my girls on. Um, but I was just I was spending definitely different week and, um, especially at the end of the week. And, you know, it's going to be really apropos here as we're going to be talking about these financial headwinds, um, for American retirees.

Sam Davis:
Absolutely. We're living in an increasingly connected world. And when that connection is all of a sudden broken in some way, it actually gave me a little bit of a flashback Thursday morning, forward to the early days of the Covid 19 pandemic, and nobody knew what was going on. But everything was different and off in some way. And, um, thank goodness it seems like they're going to be able to get this resolved, but, um, quite, quite an issue there. And yes, some chaos in our world. We're definitely going to be talking about that in the headwinds today.

Ford Stokes:
Yeah. Okay. So this entire show is about financial headwinds that are facing you as an American pre-retiree or retiree. And what we're trying to do is trying to help you better plan for retirement and try to get more prepared, become more tax efficient, fee efficient and market efficient with your portfolio so you can plan to protect and grow your hard earned and hard saved assets, and also generate the retirement income you need to have a successful retirement. That that's a mouthful. And we're going to talk all about that today on the Today show. And we're not trying to fear monger here today. But we do want to make sure that all of you are aware of some of the headwinds. And and I'm going to venture to guess a few of these headwinds you've never even heard about and you didn't even know. And we're just trying to educate our listeners. We love everybody that's listening to us, to the Retirement Results financial radio show here on the John Fredericks Radio Network. We feel privileged to be syndicated across, you know, 18 stations. We're about to add a 19th in Pittsburgh. Um, that's not even part of the John Fredericks radio network that they reached out to John Fredericks himself and said, hey, we're interested in getting Retirement Results as a show on our network, and we just really appreciate that. I just big shout out again to John Fredericks and all the things he and his team are trying to do to help educate, uh, American pre-retirees and retirees on how to invest efficiently and also how to get prepared for retirement.

Ford Stokes:
But here's we're going to talk about, in today's show all these financial headwinds that you're facing, uh, especially for you folks that are in that retirement red zone, that five years before retirement, in the five years after retirement, this show's really going to be for you. If you're in your 40s or 50s and you're trying to get prepared and you're really trying to take advantage of that catch up provision with your 401 K and also IRAs, you're trying to get money moved over into Roth IRAs or Roth 401. And with your additional contributions, this shows for you. If you are a retiree and you're 80 years old and you watched your portfolio lose 20 plus percent of its value in 2022, only to see it come back about 10% or a little bit more in 2023. This show is for you. So on today's show, we're going to talk about those financial headwinds that American Pre-retirees and retirees are facing. We're also going to have a national debt update. We're also going to talk about the cost of health care in retirement, and we're going to give you some retirement red flags, where we point out common landmines that you can avoid for your retirement. But first, Sam, go ahead and share this week's financial wisdom quote of the week.

Producer:
And now Folsom Financial Wisdom. It's time for the quote of the week.

Sam Davis:
This week's quote of the week comes to us from Joe Moore and Ford. We mentioned this quote around the office all the time, and this quote goes like this. A simple fact that is hard to learn is that the time to save money is when you have some.

Ford Stokes:
That's right. It really we want to make sure we're doing a great job at saving, especially if we're in our 50s and nearing retirement. Really want to do a great job at making sure that we are saving for that rainy day? And remember what Dave Ramsey says as well, is that your greatest wealth generator is your personal income. So I want to make sure we're doing everything we can to save that money. The best way to do that is to pay yourself first. Take 1,520% of what you make and put it away. Pay yourself because it doesn't matter how much you make, it matters how much you keep. And I want to make sure you're doing everything you can to save first, and then protect and grow that money so you can generate a retirement income for you, whether you're doing a 4% withdrawal rate and trying to follow that 4% rule, or whether you're taking advantage of other financial products, um, to generate even in a higher rate of withdrawal rate and, and a higher income rate, I would encourage you to go ahead and reach out to us at Retirement Results.com, especially if you're driving around and and your cell phone's still not working, want to make sure that you're visiting us at Retirement Results comm.

Ford Stokes:
We own the website. We own the brand. We've got it all together on purpose to make it easier for you to find us. And you can book that financial consultation just by clicking that schedule. A consultation in the upper right corner of Retirement Results.com. We've made that available to you. Our financial workbook is there for people to fill out and get going there. Um, we wanted to give several shout outs to people that have been listening to our show for a long time. Linda in Atlanta. We are so pleased to work with you and we're so great. Grateful to be able to meet with you a second time in our office. And thank you so much for listening to Retirement Results and the active wealth show that preceded Retirement Results for rebranded the show. She's been listening to us, Sam, for over three and a half years. And just shout out to Linda, um, Mark and his wife out of Virginia. I just want to say thank you so much for reaching out to us about your Social Security income and planning for Social Security. Uh, you guys are in a really good spot, but it was really good to see that.

Ford Stokes:
You also wanted to make sure you're maximizing your monthly Social Security income, not just trying to maximize the overall amount that you're going to get paid from Social Security. I thought that was really astute. Sam, when Mark called us earlier this week, uh, because so many people were like, well, I want to make sure that I'm getting as much of the money I put into Social Security. Well, that's a great way to look at it, but a better way to look at it in our opinion, Sam, is is that hey, want to make sure that you Social security helps you meet all of your monthly obligations so you don't put too much downward pressure with withdrawals from your overall portfolio, and also lets you have more money left over to be able to pass on to your heirs. When you do pass away and go to heaven, we want to make sure that we're having a better plan for that month to month. Income and expenses plan. Make sure you don't have a negative retirement income gap and your starting retirement or in retirement, and you've got that positive income surplus.

Sam Davis:
Absolutely. So go ahead and go over to Retirement Results.com. You'll find our phone number there on the website as well. You can book a consultation with us online. You can give us a call. You can meet with us right here in our office in Atlanta. Or we can meet with you virtually online, via video chat, or even just over the phone. We look forward to working with you. Don't forget to visit Retirement Results.com.

Producer:
Retirement Results. We'll be right back to learn more and schedule your free retirement consultation. Dial pound 250 from your cell phone and use the keyword Retirement Results. That's pound 250. Key word Retirement Results. You're listening to Retirement Results. And now back to the show.

Ford Stokes:
And welcome back to Retirement Results. Result drivers I'm Ford Stokes, your chief financial advisor. I've got Sam Davis our senior financial advisor and co host here on Retirement Results here with us. And Sam and I are talking about the seven financial headwinds. We're going to take each one of these. But the number one financial headwind that I want to share because I don't think a lot of people realize this. So baby boomers withdrawing required minimum distributions or RMDs. And it's creating downward pressure on US financial markets, especially at periods of time when those RMDs generally happen. A lot of those RMDs happen at the beginning of the year and the end of the year each year. And let me just tell you a little bit about why this is happening and what's going on in the US financial markets. I want to give you a little bit of a history lesson. Prior to 1980, 92% of retirement savings plan contributions were to company managed pension plans. The introduction of the 401 K from the 1974 ERISA act, first four links actually came online in 1978, but in 1980 is when there was a large expansion of 401 K plans being offered, and it gave us the greatest expansion in the history of the US stock market. Now, the first generation of regular contributors to the 4k are now retiring and reaching the age for required minimum distributions, where they are forced to actually take a portion of their overall assets, distribute that to themselves, and then also pay taxes on those distributions based on their effective tax rate or their marginal tax rate, which is their top highest tax rate.

Ford Stokes:
Oftentimes to these, RMDs are not reinvested into an investment account they're used to live on. And so that reinvestment doesn't continue. And so the market actually loses assets from the market forever. Those those monies usually don't go back in there. Also, some of those monies are then paid to the US government. And this is creating a trading environment where frequently there are more sellers than buyers as assets are sold off to meet the RMD requirement from the US government. Let me just give you a little history lesson from and we're looking at this in like almost 20 year periods, but from 1900 to 1919 through that to the end of 1919, the US stock market went up 60%. Then from 1920 to 1939, the stock market only grew 39% because obviously we had, um, the stock market crash of 1929, then from 1940 to 19. 59 through 1959, leading right up just to January of 1960. We had the greatest expansion was post-war expansion with 348% growth. And then from 1960 to 1979, leading up to 1980, when the ERISA act was just getting going, was only 23%. But then from 1980. Through December 31st of 1999, the US financial markets grew 1,270%, and then all of a sudden we were growing like crazy because every two weeks Americans were saving and companies were matching those savings. So that is a big, big difference. And then from 2000 to 2018, there was a reversion back to the mean of just 113% growth over an 18 year period. So when I tell you that the baby boomers spiked the overall incredible, expansive growth of US financial markets in the two decades between 1980 and 2000, I promise you that I'm absolutely 100% correct.

Ford Stokes:
Here's the issue. The issue is those same people that drove a 1,270% growth and gain in the overall US markets. That's New York Stock Exchange, that's, you know, Amex, Nasdaq, all that stuff. They're the same people that are also now being forced to take RMDs and sell a portion of their assets every single year. And when they start taking. Money out they've got to take out. And when they turn 73 years old, they have to take 4.14% out. Listen, the the US government has a uniform application. Across the board to people, and they think you're going to live 27.5 more years by the time you turn 72 years old, RMDs now have been pushed back where you do not have to start taking RMDs. Until age 73. And also it used to be 70.5. It was very confusing. There was also the highest penalty in the tax code comes from if you miss taking your RMDs, and in the half year was messing people up. They didn't know which year to take it, things like that. So they finally fixed all that with Securex 2.0. They fixed it first of all with with 1.0. And you know, our our 45th president of the United States, President Trump fixed that. Shout out to President Trump. And sure hope you win this time around for sure. And and I hope they absolutely you win on appeal with that crazy $360 million farce of a verdict against you.

Ford Stokes:
Um, in the past week. That was awful. Um, and there's been a lot of fallout and shout out to all you truckers out there that are listening who are refused to deliver to New York City because of that verdict. We we support you. And, um, thank you for everything you do for us on the road. And if you want help with your retirement, uh, we're going to give you absolutely free financial planning, absolutely no cost to you. All you've got to do is reach us at Retirement Results. Com, or call us at 1-888-814-0304. Now you may need Wi-Fi to do that. But if you call (888) 814-0304, or you dial pound 250 and give the keyword Retirement Results, we will help any of our listeners to Retirement Results. Absolutely at no cost to you on the front end. We only make money when we manage money, and we're fiduciaries and we want to do everything we can. To help you better protect and grow your hard earned and hard saved assets. We also, you know we will get paid commissions if we sell a life insurance product or an annuity product, but we do not charge for our financial planning services. And this is about a $1,500 value. But we figured as fiduciaries, it's better to help people say I'm on the front end rather than the back end, and we've got confidence in our plans. And, um, we want to make sure that everybody's got all the information they need to make an informed financial decision about who they want to work with regarding their retirement planning.

Sam Davis:
Absolutely. And if you'd like to get that consultation, just like Ford said, visit Retirement Results.com or give us a call by dialing pound 250 and using the keyword Retirement Results. But I think that first headwind is really important for people to understand. Ford. We were taking a look at the stock market history from basically 1970 to today. So a glimpse at the last 50 years, and you can see that through the 70s, the stock market was not expanding. It was actually contracting and going down. But once that 401 K entered the American culture and like you said, Ford, every two weeks people were making those deposits into those accounts. It really fed the system. And now all of the baby boomers who are retiring, they don't need those assets anymore. They don't need those securities. What they need is income, but they need his cash to meet their expenses. And so that's why you're seeing more sellers than buyers in many situations in that downward pressure. So we put that as our first headwind because we think that fundamentally that's an important thing to understand that's happening.

Ford Stokes:
Yeah I mean these other headwinds are going to go faster, folks. We're getting through seven of these. Um, but I want to make sure you understand. It's a supply and demand market. And when you have more sellers than buyers, that can be an issue. Now granted, we've got the millennials are coming online and they're starting to do lots of saving and all that stuff because they're in their 30s and some are even in their 40s, early 40s. And and then you've also got Gen Z coming on and they're kind of in high school and college and things like that. And there's a real, you know, that that helps counteract it. But I'll tell you, the baby boomers have been able to save and invest for a lot longer. And so they have a lot more money. And when they have to sell off to fund their retirement lifestyle, or if they have to sell off to pay taxes on required minimum distributions, because it's required by law by the IRS for them to do that, it can create downward pressure on the market. So that is a financial headwind that you are dealing with as an American retiree or pre-retiree or just as an American investor. So I want to make sure kind of get through that. So we got one minute left here on the next headwind we're going to talk about right after the break is about just chaos in the world.

Ford Stokes:
What we've talked about a little bit in the first in the first segment, which was, you know, no cell phone coverage, social unrest, uh, ongoing wars and global instability, just all kinds of things that have been difficult to deal with a pandemic in 2020 with Covid 19. It's just ongoing wars and global instability and what we would just call chaos at times that are beyond a retiree's ability to plan. And when you're investing and you're like, wait a second, I I've done everything I can and all of a sudden something happens in the market or in the world, and it affects the financial markets. That's a real problem. And we're going to talk more about that and what you can do to kind of act some of these or all of these financial headwinds for yourself and for your family members. We're so glad you're with us here. And you've been listening to us on the John Fredericks Radio Network. This is Retirement Results. We are a financial radio show here to help you better plan for your own successful retirement. Right after the break. We're talking about more of these financial headwinds that you face as an American retiree right after the break.

Producer:
Thanks for listening to Retirement Results. Schedule your free financial consultation now at Retirement Results. Com or by calling toll free at (888) 814-0304. That's (888) 814-0304. Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal applied to your income benefit base. Dial pound 250 and use the keyword Retirement Results to connect with a qualified adviser. Now, indexed or fixed annuities are not designed for short terme investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. They may include higher surrender charges, longer surrender charge periods or lower caps. Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Guarantees and protections referenced within are subject to the claims paying ability of Nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio. Neither nationwide nor its other entities are associated or affiliated with Brookstone Capital Management, LLC. While Washington's spending keeps growing, your retirement doesn't have to shrink, protect, and grow your hard earned money today by dialing pound 250 from your cell phone and using the keyword Retirement Results, that's pound 250. Key word Retirement Results.

Ford Stokes:
And welcome back result drivers I'm Ford Stokes, your chief financial advisor I've got Sam Davis here with me, our senior financial advisor and radio co-host in Sam. We're talking about these financial headwinds. The first headwind that we talked about for everybody was the baby boomers are withdrawing RMDs. And that could create and is creating at certain times of the year, downward pressure on US financial markets, because they have a majority of the assets, and they are likely not reinvesting those dollars because they're using those dollars to live off of. So I just letting you know that does put downward pressure. The next one we just talked about at the end of last segment, which was ongoing wars, global instability, chaos with pandemics. And we saw some of that this week with, you know, all the cell coverage going away. Um, also wars that increase government spending often lead to economic instability. This can lead to large fluctuations in the stock market, devaluation of currency and inflation. Retirees who depend on fixed incomes, pensions or investment returns may find it challenging to maintain their standard of living, as the cost of goods and services rises during times of war and heightened government spending on military efforts, resources may be diverted away from social welfare programs that support retirees, such as health care, social security and other forms of assistance.

Ford Stokes:
This could lead to reduced benefits or increase costs for retirees who rely on these programs for support. I want you to make sure you kind of repeat this one after me, folks. If it is to be, it is up to me. You're in charge of your retirement. You're the captain of your ship. It's no longer the company. And the gold watch and the pension that's going to take care of you. By the way, did you know you can actually generate your own personal pension? And we can help you do that? All you've got to do is visit us at Retirement Results. Com and we can give you A41K review. Absolutely no cost to you. You you've worked so hard to save it in that 401 K or that 403 B with that 457 or that Sep IRA, we're here to help you get things done. For sure. All you've got to do is reach out to us by dialing pound 250 and give that keyword Retirement Results.

Sam Davis:
Global uncertainty, certainly a concern for all of the retirees and pre-retirees out there. And we've seen that events that happen thousands and thousands of miles away can have a real impact on us right here at home in the United States. I mean, the Covid 19 pandemic did not originate here in the United States. And we saw at the beginning of the Russia and Ukraine conflict what that did to oil and gas prices right off the jump. So that's definitely a concern of people. And you want to be sure that you're doing what you can to be protected from all of that uncertainty out there. The next headwind sort of related is the national debt clock update. The clock.

Producer:
Is ticking. The debt is growing. It's time for your Retirement Results. Debt clock update.

Sam Davis:
This headwind is really just the fact that we are currently at $34.2 trillion in US national debt and climbing. We've mentioned this before, but to address this national debt, the US may and will likely have to increase taxes. Keep in mind, we're currently living in historically low tax times. Relatively speaking, excessive government borrowing can lead to inflation. We've seen a lot of that happening over the last few years, and high levels of national debt can affect the markets at large as well.

Ford Stokes:
Yeah. I mean, Milton Friedman said that inflation only comes from one place, and that's Washington DC in this country, and that is the their social programs and this their ability to print money. And we've got to do everything we can to get the balance, I mean, to get the budget balanced. And that means voting for President Donald J. Trump for this time around. Uh, just please vote with your retirement in mind. We're just begging you to make sure you do that. But $34.2 trillion in US national debt is no joke that the debt service on our US national debt is actually higher than $1 trillion a year. So that is a significant problem. Um, and I just hope they get that under. Wraps and start figuring it out. I don't know when or how, but the only way that they're going to do that is they put a Republican in the white House. That's not just a rhino. That's actually a real Republican. And I just Godspeed President Trump. I hope you win. Then. Headwind number four is rising taxes. Understand that national debt could lead to higher taxes in the future, as government looks for ways to manage tens of trillions of dollars in national debt.

Ford Stokes:
It's important to note that historically, taxes are on the lower end right now, so there's plenty of room and historic precedent for taxes to go up. I mean, did you know from 1960 to 1963, the current 24% bracket was actually 56%? That is 8% higher. Then two acts of where we are right now. And, you know, the, the the top marginal tax rate, a marginal tax rate is actually the highest tax rate that you would pay or that is paid out there in the marketplace was actually 91% during World War two. Made sense because all of us had to pitch in to make sure that we weren't speaking. Adolf Hitler's German language in in the United States. So that's a big deal. And Sam. You've got many retirees that are living on fixed incomes and tight budgets, so a significant change in tax rates would dramatically affect their lifestyle in retirement. And you've got one more. Edwin, you got the next headwind. Headwind number five to share with us as well.

Sam Davis:
Yeah. Headwind number five is the lack of pensions that are offered in the workplace today. Did you know only 15% of private industry workers have access to a pension? Of course, those who are working in the US armed forces and many offices of the government or even state governments have access to certain types of pensions and defined benefit plans. But only 15% of all of us working in the private industry have access to that pension. And this coincides with the trend of more employers shifting to that defined contribution plan, like a 401 K. We talked a little bit about the history of the 401 K earlier in the show. Already 401 K actually started around 1980, but without a pension, individuals may rely solely on their personal savings, social security and other retirement accounts for their income in retirement, which means that if you don't have a pension, you bear the responsibility of managing your own investments and savings for retirement, which can be challenging. And that's why for fiduciary advisors like ourselves, fight for people, work for them to delete fees, delete taxes where we can. And when it comes to personal pension options, we set them up with the best options available in the marketplace today to give them that protected and steady stream of income in retirement.

Ford Stokes:
Yeah. I mean, we had a widow came in our office last week, and. She's got about $3 million. Worth of assets. Her husband worked for a big company and he had a lot of stock and and he cashed out of that stock, but he passed away and. She was with a large wirehouse, and they had loaded her up with all of their mutual funds that the company makes money on because the company requires them to, you know, sell the products that make the company the most money. Whereas we as independent financial advisors, we can. To place anything within your portfolio and allocate where it makes sense because we're fiduciaries. Got to put your needs first. And the expense ratio difference was remarkable. I mean, her expense ratio was 0.87%. So that's 0.87, almost a 1% coming out of her portfolio. She had another. She's paying another 1.5% in advisory fees, which is not anywhere near what our advisory fees are. I mean, our advisory fees are much, much lower. And our expense ratio actually averages on our managed portfolios between 0.15 and 0.17, because 50% of our our portfolios are strategically managed and 50% of our portfolios are tactically managed, we don't load them up with mutual funds. We utilize ETFs and individual stocks to implement our portfolios versus these people. Loading up with 12 be one fees and a share fees and see share fees within mutual funds.

Ford Stokes:
If you have no idea what your expense ratio is within your portfolio, then I would encourage you to go ahead and reach out to us by dialing pound 250. If you're on Wi-Fi, if you can get get a call out from your cell phone and give the keyword Retirement Results, you'll get patched directly into our main line here at the Active Wealth Management Headquarters. Or you can also just reach out to us at Retirement Results. Com and click that schedule a consultation button. You'll get booked directly into my calendar. Absolutely. At no cost to you is a $1,500 value. We give you a Social Security maximization report. We give you a retirement income gap analysis. We give you a free 41K review. We give you a free portfolio view of your current portfolio. That's nothing to do with us all the way planning out to your 95th birthday. We also give you a recommended financial plan to your 95th birthday with our recommended portfolios with a Roth Ladder conversion plan absolutely at no cost to you. When we come back, we will share the last two headwinds that retirees are facing in America today, and also talk more about how we can help you become more tax efficient, fee efficient, and market efficient with your retirement nest egg, your Retirement Results right here on the John Fredericks Radio Network.

Producer:
Don't let the national debt weigh down your own financial future. Take charge of your retirement planning now. Learn more at Retirement Results. Com or dial pound 250 from your cell phone and use the keyword Retirement Results. That's pound 250 key word Retirement Results. Nationwide's peak ten fixed indexed annuity is designed to help protect and grow your savings to generate income you can never outlive. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal. Apply to your income benefit base. Dial pound 250 and use the keyword Retirement Results to connect with a qualified adviser. Now, indexed or fixed annuities are not designed for short terme investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. They may include higher surrender charges, longer surrender charge periods or lower caps. Investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Guarantees and protections referenced within are subject to the claims paying ability of Nationwide Life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company, Columbus, Ohio. Neither nationwide nor its other entities are associated or affiliated with Brookstone Capital Management, LLC. This part of today's show Retirment results is available wherever you listen to podcasts and online at Retirement Results. Com.

Sam Davis:
And welcome back to Retirement Results result drivers I'm Sam Davis, your senior financial advisor and co-host of joined of course, by our chief financial advisor and member of the Forbes Finance Council, Ford Stokes Ford. We've been sharing some of the biggest headwinds that retirees are facing in America today and the headwinds that if you're a pre-retiree, if you're 5 or 10 years away from retirement, or even if you're further than that and you're just starting to think about retirement, these are a lot of the things that you'll be up against when you actually do step away from the office or the job site, or you stop working as a trucker or whatever you're doing to serve your country out there. Number six is rising health care costs, and this is actually our inflation demonstration for the week.

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

Sam Davis:
Now, let me ask all of you listening. What would you or if you're married, you and your spouse do with $351,000 when you retire. That's a lot of money. And it may sound like a great nest egg, but you might actually need every penny of that just to cover health care costs in retirement. That's including Medicare premiums and drugs after insurance pays its part. And that's according to recent research, which the researchers state this is a conservative estimate, $351,000. And taking a look at the details, this is what they found. And this is for assuming retirees have Medicare Part A, which covers your hospital, your part B, which covers medical charges, part D, which is any drug costs, and part G, which is all other expenses. And the report says that these estimates will give you a 90% chance of meeting your health care expenses in retirement. A 65 year old man retiring will need $184,000 in savings just to cover health care for the remainder of his life. A 65 year old woman is expected to need more about $217,000 in savings. We know that women typically live a bit longer, so that is attributable to that higher cost there. So if you're a couple, you may need $351,000 just to cover the health care expenses in retirement. They also noted that if you have to use particularly expensive prescription drugs, it could be as high as $413,000.

Ford Stokes:
So for a lot of money, that's a lot of money for people. And it's going to be one of the larger expenses, Sam, that people have to deal with during retirement. And you got to have a plan for it, whether it's a Medicare Advantage plan or a medigap Medicare supplement plan. I would encourage you to reach out to us. We can get you in touch with, um, Bonnie Dobbs, who's a certified and all that stuff. And she's fantastic at what, what she does. Um, and her website is Medicare and other red tape, and we can introduce you to her. Um, no problem. And she's licensed in all the states that we're licensed in and that, that also that get covered by this radio show. Um, because we blanket 8 to 9 states every single week here on the John Fredericks Radio Network. So I just, I don't know, people have got to have a plan for it. One of the ways to do that is to plan for the eventual loss of Social Security income from the household. When you know when one of the spouses dies, you're going to lose at least 33%, and then you've got to backfill that income, plus the additional Medicare surcharges that you just invariably get year over year as your income goes up, when you have to start taking RMDs and all those things, you need income to do that. And we can help people get on the right retirement income plan. They can also help take care of those rising health care costs that you're mentioning.

Sam Davis:
Absolutely. Bottom line is you absolutely need to have a plan. And if you have any questions, you can visit our website. Retirement Results. Com you'll find our phone number there and give us a call. You can always reach us toll free at (888) 814-0304. That's (888) 814-0304 and four. Do you want to go ahead and give our last hour headwind number seven for all the retirees out there.

Ford Stokes:
Yeah this last one is probably the biggest. Um it's just the absolute biggest. And we've all seen this the last 2 to 3 years is rising inflation. Inflation diminishes the real value of savings and investments, potentially reducing retirees ability to generate sufficient income to cover expenses throughout retirement. That's just a fact. Health care expenses tend to increase faster than general inflation rates, which Sam just talked about in financial headwind number six, placing additional financial pressure on retirees, particularly those with limited resources, whether it's limited assets or limited income sources, Social Security benefits typically receive cost of living adjustments or Colas to account for inflation, but these adjustments may not fully offset the impact of rising expenses, especially for retirees with higher health care costs. With longer life expectancies, retirees may spend more years in retirement, increasing their exposure to the effects of inflation and highlighting the importance of inflation resistant income sources and investment strategies. You want to stay invested. So what does all this mean for? How can we solve all these problems? What's the deal? Well, first of all, you got to know there's a problem. So let me give you all of these problems in one shot really quickly.

Ford Stokes:
We got just a few minutes left in the show, but the first financial headwind was baby boomers withdrawing RMDs. That gives downward pressure on the market. So you've got more buyers and sellers in times at times during the during the year headwind. Number two was ongoing wars, global instability and chaos with pandemics and social unrest and things like that. Headwind number three was $34.2 trillion in US national debt. They're going to have to pay for it somehow. It could be with rising taxes, which was headwind number four. The current 24% bracket from 1960 to 1963 during the Kennedy years, which is many folks that have lived during that time, they've been very young, but they lived during that time. And that's it was actually 56%, which is 8% higher than two x of where we are now. Headwind number five was a lack of pensions in the offered in the workforce. There are only there's less than 16% of S&P 500 companies that offer um pensions these days. Headwind number six that Sam shared was rising health care costs. And I just talked about rising inflation as headwind number seven. So here's what you can do. It's the final.

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

The final countdown.

Ford Stokes:
Number one is you need to get an income plan. You understand where you're at, what kind of income you really can generate to make sure that you don't have a problem. Number two is you got to implement a Roth ladder conversion to delete the IRS out of being your partner within your retirement accounts, and do that over 5 to 7 year period. Number three is you want to reduce the fees you're paying. To the financial companies and also through your financial adviser. Did you know if you replace the bonds in your portfolio with fixed indexed annuities, let's say 40% that give you the income you need in retirement? You have no advisory and portfolio fees with the investment in that 40%. We can help you deal with that, and we will reduce the amount of money you're paying your financial advisor by 40%, just by moving money into a safer situation with a bond replacement strategy. Number four is you really got to have a full budget and expense plan knowing what's going on, to make sure you start with a positive income surplus and not start out with a negative retirement income gap, because that's a real problem. And number five is we would encourage you, and we're one of the few advisors that will tell you that we're one of the few advisors that will tell you, hey, let's do everything we can to pay off the house. You can be happier and you can really reach that level of the American dream where you've paid for your house and you own your house. Those five things are a great place to start.

Ford Stokes:
I hope you really learned a lot on in this week's show. If you have, I would encourage you to go back and listen to us at Retirement Results.com or wherever you get podcasts, Stitcher, Spotify, you know, Google Play, iTunes, etc. and. Listen. Life's a journey. The greatest asset we have is time. We spell love time. And my family. And we want to make sure you have enough money to be able to spend more time with your family and friends in retirement. And also you can pay less money to the US government out of your hard earned and hard saved retirement dollars by implementing a Roth ladder conversion. We do that all the time. And we do manage portfolios to help you protect and grow your assets. And also we have other strategies to generate the income you need that also will help you continue to grow your assets at a reasonable pace. Just visit Retirement Results.com click that schedule consultation button in the upper right corner and let's get started today. You can also call us at by dialing pound 250 and just giving the keyword Retirement Results. You dial pound the pound sign and 250 and use the keyword Retirement Results. Or you can just call us at (888) 814-0304. Remember, when you're seeking information about retirement, you're going to be a bear. Be a grizzly. Be as aggressive as you can to get as much information as you can. Good luck out there, Americans. We're here for you and here for your American retirement. Have a great week, everybody.

Producer:
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 free financial consultation, dial pound 250 on your cell phone now and use the keyword Retirement Results to connect with a qualified advisor. That's pound 250 key word Retirement Results. 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 Inactive 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 exists, please refer to our firm brochure, the ADV Two-a, page four for additional information. 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.

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