On this week’s show, Ford explains why there has never been a better time to invest in a fixed-indexed annuity and strengthen your income plan for retirement. You will learn how interest rates affect you and how working with a financial advisor can save you significant money on fees.
Do you have an income plan for your retirement?
Call Ford Stokes today at 770-685-1777
Book your complimentary consultation here.
11.3.22: Audio automatically transcribed by Sonix
11.3.22: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Producer:
Welcome to The Active Wealth Show with your host, Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs First. You’ll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax-efficient investing. And now your host Ford Stokes.
Ford Stokes:
And welcome The Active Wealth Show Activators. I’m Ford Stokes your chief Financial advisor. I’m joined by Sam Davis, our executive producer. And the theme for today’s show is we’re going to talk about how much more are you willing to lose pre-retirees and retirees are feeling the effects of inflation, interest rates and market volatility. And my question is, how much more are you willing to lose? Should you really be doing something different, should be doing something different than a traditional 6040 portfolio, 60% stocks and 40% bonds. How much more are you willing to lose with your 40% bonds in your portfolio? I would say you should not be willing to lose anymore. You should do something different now. And you can invest in fixed-indexed annuities and replace the bonds in your portfolio with fixed-index annuities and leave the rest of it 100% invested into US securities with ETFs and individual securities. We just want to we just want to make sure everybody understands. We appreciate you. We appreciate our activators out there. And you’re wondering who in activator is it somebody who wants a tax efficient fee, efficient and market efficient portfolio, who wants to build for a successful retirement? They want to protect and grow their hard-earned and hard-saved wealth? I mean, let’s face it, folks, it’s hard to earn it, but it’s even harder to save it. It just is. There’s so many folks pulling at our purse strings these days, whether it’s the US government, whether it’s retailers or whether it’s, you know, mortgage people or with higher interest rates on mortgages for people that are trying to buy a home for the first time ever, things like that.
Ford Stokes:
You know, we’ve got so many reasons. I mean, look at the cost of even used vehicles these days, not even new vehicles, but use vehicles. There’s so many different things that are doing a greater pull on our purse strings than ever before. And that means you’ve got to protect your assets that much more and you really have to have a plan. And we sponsored the airing at Northpoint Mall at AMC Theater 12 over there at Northpoint Mall. The Baby Boomer Dilemma movie. And Sam and I are going to talk about that and what our impressions were from the Baby Boomer Dilemma movie that’s kind of really sweeping the nation. And we’re going to be able to give you guys and gals exclusive online screenings if you want them. More information on that in Segment two. But if you’re looking to understand how do I make sense of all this forward, what what’s going on? I I’ve been doing this myself. I’ve been you know, I’ve been trying to be a do it yourself or and I’m trying to protect and grow the assets for my wife and me. Or let’s say you’re a widow and you’ve been trying to just kind of stick with what your your former spouse had before or you’re a pre retiree about to retire and you’ve just left your money in a401k and you’ve seen it erode this year.
Ford Stokes:
All three of those scenarios, you’ve probably seen some significant losses in the market this year. I would encourage you to visit active wealth dot com and click that schedule a consultation button in the upper right corner. You’ll get to meet directly with me and let me just tell you what you’re going to get. You’re going to get number one is you’re going to get a Social Security maximization report. Even if you’ve turned on Social Security already, we can probably at least give you a better understanding of the impact that your spouse is going to feel and all that kind of stuff. And when they might turn on on Social Security, we’re going to help you maximize the income from your Social Security benefit check. And I will just tell you that decision is one of the most important decisions you can make for retirement, because likely you’re going to be you’re going to live to be over 30 plus years during retirement, which is almost as long as you worked. The second thing we’re going to give you is a portfolio analysis. We’re going give you a portfolio analysis so you understand the risk you’re taking, the fees you’re paying, and the correlation of your assets as measured by an expense ratio for your expenses as measured by standard deviation for your risk.
Ford Stokes:
And we’ll actually show you a correlation matrix to show you how much your different assets move with each other when the market moves. And we’re going to help you do all of that through our portfolio analysis. The third thing we’re going to give you is a financial planner, your 95th birthday with your current assets. The number four is we’re going to give you a financial plan to your 95th birthday with our recommended portfolios. And number five is we’re going to give you a recommended plan or plan with all the way to your 95th birthday with our recommended portfolios. That also includes a Roth ladder conversion. And if you haven’t considered moving money from your IRA to a Roth IRA so you can kick the IRS out of being your partner in retirement through a systematic year over year, over a 5 to 7 year period Roth ladder conversion that we can help you with. And we do it every every day here. We deal with those types of situations with Roth ladder conversions on a daily basis here at the active wealth. Manage an office on the 29th floor of the King and Queen Building in the King Building overlooking Perimeter Mall and my commute home on Georgia 400 all the way to Cumming, Georgia.
Ford Stokes:
But. We’ll help you do that. We’ll help you figure out how you can kick the IRS out of being your partner in retirement. At no additional cost. All you’ve got to do is visit ActiveWealth.com And click that schedule a consultation button, or you can call Deborah and our team. They’re standing by this weekend. You can call us at 770 685 1777 again 770 685 1777. We’re happy to help you. Get you scheduled and get you booked onto my calendar. You’re in a deal directly with me, the host of the Active Wealth show. Also, we’re a huge shout out to Charlie Kirk. We’re super excited that he’s chosen to really work with us and read some commercials for us. And we’re happy to be part of a little bit part of his show with some of our spots running in his show. And we appreciate his contributions here on the AM 920 the Answer radio station and our entire show format. He’s been great on our station and everybody here at the AM 920 Answer family we just really appreciate our listeners and we just sincerely appreciate Charlie Kirk thinking so great of us that he was willing to be the endorser for us and we’re the only financial firm that he is endorsing on this radio station, and we’re super excited for him to do that. And thank you again, Charlie, for your partnership.
Producer:
Your Active Wealth market update.
Ford Stokes:
The market update this week is really just one big thing. Jerome Powell went up 75 basis points, the Fed went up 75 basis points despite the pleadings of folks in the market, despite the pleadings from people both from the right and the left on different sides of the aisle. The market is getting fatigued. With these increases. And. He’s increasing interest rates till it hurts. And it’s also creating. A downturn in the market for bonds, because with bonds you have interest rate risk. And guess what? When interest rates go up 75 basis points almost every month, the back half of this month bad back half of this year excuse me, back half of this year. Guess what? You’re going to see the bonds you currently hold or the bonds you held at the beginning of the year be worth less than the new bonds that are paying out a higher interest rate now. And let me ask you, why are you dealing with that type of bond volatility? Because you’re not in bonds for growth. I mean, stocks are going to do a better job at growing your money over time. It’s been proven. So why wouldn’t you look for a different efficient frontier like Harry Markowitz? 1952 is the founder of Modern Portfolio Theory. And the bottom line was, as he was trying to give you an efficient frontier where you had a linear line that went up from the bottom left to the upper right. So you had consistent growth year over year where bonds, when money would rush out of stocks and in an economic downturn, money would rush into bonds, unfortunately, when we’re also increasing interest rates.
Ford Stokes:
The bonds we currently hold are not going up in value. They’re going down in value because we have to discount our bonds to make them worth the same amount as the new bonds that have a higher interest rate. And what I would encourage you to do is something different. I would encourage you to invest in a fixed indexed annuity. And just avoid that interest rate risk and that reinvestment risk that are associated with bonds. And get market like gains without the stock market risk. I mean, where they fixed an X annuity, your money is invested into the ten year US Treasury and now it’s never been a better time to invest in a fixed indexed annuity because now annuity companies have more money to deal with and more interest coming off of the ten year Treasury. Throughout my career, it’s really been between 1.4% and 2% in the ten year US Treasury note. Today, the ten year US Treasury note is climbing up over 3.63.7. So in $100,000, you’re going to make $3,700 or $3,600. Off of the money. The 100,000 is invest in the ten year US Treasury, and guess what it’s going to do? They’re going to take that that 30 $600 they used to be able to take 1400 and $2,000 and invest it into options in the Credit Suisse Raven Pack or the Credit Suisse Momentum or the Jp morgan Cycle Index or, you know, or the S&P 500 index or the NASDAQ 100 or the Russell 2000 or Wilshire 5000, that all kinds of there’s hundreds of different indexes out there that fixed indexed annuity companies use to link the assets that you give them to be able to give you growth their equity index linked.
Ford Stokes:
Insurance products. Annuities are products that insure against you living too long. Life insurance is insurance against you living to short. So I would encourage you to try to consider replacing. You know, the 40% of your portfolio that’s in bonds. Also, why are you paying advisory fees? You really shouldn’t on bonds because they’re just giving you income anyway, right? So when we come back from the break, we’re going to talk about this baby boomer dilemma movie that we sponsored, the airing two airings of this past week, and also how you can get your own free. Online viewing at home from us, from active wealth. And all you’ve got to do is reach out to us at 770 685 1777 and say, Hey, you know what, I’d like to get a link to that. You can also just send me an email at Ford@activewealth.com And we’re going to talk more about this baby boomer dilemma movie and what you should be doing with your assets and how much more are you willing to lose On this week’s Active Wealth show, We say don’t lose any more. Let’s try to do a really good job at protecting and growing your assets from here. Thanks for listening. Active Wealth show this week. We’ll be right back. And segment two of the Active Wealth Show.
Producer:
Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit ActiveWealth.com to learn more and schedule an appointment. Thanks for listening to the Active Wealth Show and subscribing wherever you listen to podcasts.
Ford Stokes:
And welcome back Activators. The Active Wealth Show and Ford Stokes chief financial adviser. I’ve got Sam Davis with me here as our executive producer, and we’re talking about the Baby Boomer Dilemma movie that we paid to air on the AMC 12 theatres and Northpoint Mall this past week. And we I mean, the theaters were just packed out. And Sam, I want you to go ahead and play this clip from the trailer from the movie. I think it’s a movie that everybody should see. We’re going to make 100 airings of the show online available. All you’ve got to do is send me an email Ford@ActiveWealth.com, or call us and give us your name, email and phone, and we will email a link to you where you can watch it. We pay per viewing of the screening of the show, and we think this is a great way to help educate you on bond replacement and what you should be doing and how you can plan for a successful retirement and how you can have more peace of mind during your retirement as well. Sam, go ahead and play that clip from the Baby Boomer Dilemma movie that we aired and paid for the airing of at AMC 12 at Northpoint Mall this past week.
Baby Boomer Movie:
If you’re counting on a pension being there when you retire, you should be aware that there are consultants. Corporations are busy hiring to figure out how to screw you out of your pension benefit. And that’s what’s happening across the world right now. And it’s scandalous and it’s it’s creepy.
Baby Boomer Movie:
Everybody seems to like a pension. If you doubt that, try taking it away from them and you see how people react.
Baby Boomer Movie:
Those are a risky type of retirement plan to operate because you don’t have a lot of certainty today about what your obligations will be in the future.
Ford Stokes:
Yeah, hopefully enjoy that brief clip. Again, we’re going to make that online viewing available. It’s about an hour and 20 minute movie. It’s not a long movie. It’s not a huge over-investment of time, but it is a it’s well worth you investing your time and we encourage you to go and reach out to us. Go ahead and send me an email at Ford@ActiveWealth.com Or you can click that schedule a consultation button in the upper right corner of active wealth dot com and we’re happy to help you. You can also just call Deborah and our team and they’ll get your name, email and phone and get that link out to you so you can actually view the movie. It’s called The Baby Boomer Dilemma and it talks about what you really should be doing during retirement and also the dilemma between defined benefits and defined contributions and the different types of plans out there. And all you’ve got to do is reach out to us at 770 685 1777 again 770 685 1777. Sam, just kind of get your thoughts here on the movie because you were in attendance and I know a lot of the listeners like to be able to come up and say hi to you as well because they love listening to our show, but we also just really appreciate a lot of our activators just happened to attend and they said really nice things to us. Really appreciate you guys listening to the show and just really thank you for the kind words about what we’ve tried to do over the last three plus years here on Teh Active Wealth Show. just Sam, your thoughts on the Baby Boomer dilemma movie.
Producer:
Yeah, well, it was great to be out there on Tuesday and it’s always nice to see the activators in person talking to a lot of people there about the active wealth show, as well as what we all saw in the movie. And you know, it’s an incredible exposé. It tells you a little bit about the history of pensions in the United States and talks a little bit about why people love pensions so much. You know, that guaranteed income for life is incredibly attractive to people entering retirement. It’s part of what we talk about almost every week on the active wealth show and helping people set up their own personal pensions. But, you know, you’re going to learn maybe about some of the risks with some of the both public and privately funded pensions that are out there and really just stresses the importance of why you need to have a plan and the importance of working with an advisor to make sure you’re going to have that income plan in place. We stress income over assets. It’s not about the size of your nest egg. The lifestyle that you live in. Retirement is really going to be determined by the amount of income that you consistently generate during retirement. So, you know, what good is it to have a big nest egg that’s at risk in the stock market where every day when the bell goes off, you stand to lose more and more when you can expect that check every month. That is a good retirement lifestyle and that’s what we try to help the activators with.
Ford Stokes:
It was pretty amazing to hear, like all the experts like Olivia Mitchell out there, who’s with the Wharton Business School, who’s sat on countless, you know, Social Security committees for the Senate and Congress. She’s saying that right now Social Security is funded as it stands with the benefits. That we’re getting now through 2034. And then after that, everybody’s staring at least a third of your benefits being cut overnight if they don’t do something about it. That was interesting. So it also drove me to think, okay, we all need to be thinking about getting a better option to build our own personal pension and do a better job of that. Also, you know, the people that have the option because you either take us a lump sum pension or continue with your pension with, you know, a government entity or even, you know, a private company’s pension. A lot of them have been mismanaged. They talked about how they’ve been there’s been 1 to 2 plus percent that have come out extra beyond what they were supposed to, because the people that are managing those pensions or are taking too big of a cut and what that ends up resulting in over a 30 year period is 50% less. That’s actually in the pension itself. Whereas when you deal with a fixed indexed annuity with a private insurance company or even a public insurance company, they’re both required to reserve 100 pennies or the 100 pennies you give them in the ten year US Treasury bond.
Ford Stokes:
And so and those fees are right there for you. Also, we try to make sure on the active wealth show and with active wealth management, we try to do everything we can to minimize the fees we we invest our clients money into fixed indexed annuity products that have low or even free income rider fees. You’re not paying money for people, for annuity companies to distribute your money back to you. We also, if you’re going to defer and wait five years where you turn on income, there’s no reason why you should be paying them 1% a year or one and a half percent a year every year just for them not to give you income for them, not to deliver the service that you’re paying them for. And so we try to be more fee efficient with the annuities that we invest for our clients. I thought that was interesting. What else is interesting to me is they had several experts on there, whereas Tom, who’s trained over 300,000 financial advisors on how to properly implement income strategies with clients, or you also had Eric who was a former insurance commissioner from the state of Maine. It was interesting to hear him talk. He was saying, look, you know, insurance is actually regulated by the states and not regulated federally.
Ford Stokes:
And he was head of the National Insurance National Association of Insurance Commissioners in 2019. And it was just interesting to hear him talk about how we want to make sure that our company is solvent. We’re part of investigating all the time. And all we ever do is make sure that. We’re looking at companies and what can happen with companies to make sure at least the policyholders get paid back their money. And there was other things that he talked about as an insurance commissioner that he can do that or other safeguards that are available to you within each state. And that was really interesting. I think you’d want to see the movie just to learn more about those. And then, you know, we had guys like Edward SIEGEL who’s, you know, you had also people that had. He had won Nobel Prizes in finance and all that kind of stuff. It was just unbelievable how many experts they had in that movie. And you’re just going to learn so much over, you know, an hour and 20 minute movie. It’s definitely worth seeing because kind of understand why you really need to be careful about the risks you’re taking both from the public and private sector and other. Just final thoughts. We’ve got like 3 minutes left in this segment. Sam, I just want to get your thoughts on this.
Producer:
Yeah, well, you know, people really need that one check to to last the rest of their lives. And and another thing that really became apparent to me watching that movie is the amount of people in the American workforce today that feel tethered to that one job that they’ve had. And they feel like, oh, I’ve got to cross this finish line so that I can be guaranteed my pension and they’ll stay in one place and they’ll keep their family in one place. And they they won’t give themselves flexibility in their lifestyle during their working years just so that they can have a chance at this pension. I mean, I know people who are police officers, public school teachers who feel the same way, who are working right now and and just to be able to come on the air every week and educate people about the different options that you can build your own personal pension. You know, that’s one of the things that gets me up and out of bed every day. So I think it’s an important thing for whether you’re a baby boomer or even in the generation before, you know, and you’re getting ready for retirement. You know, check out this documentary and learn for yourself what’s going on out there with regards to pensions and retirement.
Ford Stokes:
Yeah. So, again, activators, I want to be clear. If you want to get a copy of your own online viewing of the Baby Boomer Dilemma movie, all you’ve got to do is reach out to us at 770 685 1777 again 770 685 1777. Debra and her team are standing by to take your call. And you can also just send me an email your name, email and phone. We’re going to set up a landing page in the next week for people to be able to do this, but we felt like it was so important and we’re just going to go ahead and share it now and and say, hey, if you we just want to do everything we can to better educate the activators out there. And it’s also good for you guys to listen to national and international experts, but specifically national experts for American retirees that are just you know, you’ve got folks that have been state insurance commissioners in this movie. You’ve got folks like Olivia Mitchell, who is the Wharton Business School, who’s who’s really consulted and given advice to presidents all the way from Clinton through Trump.
Ford Stokes:
It’s pretty amazing to me, all the experts that they have on there. And also the neatest thing to me was all of those experts, every one of them owned annuities. And they didn’t have to. Every one of them made sure they did that. When we come right back, we’re going to talk. We’re going to play our game. Right or wrong, Everybody loves to hear. And we’ve also got the financial quote of the week as well. But again, if you want to get your free online viewing at home of the Baby Boomer Dilemma movie, I would encourage you to just reach out to us by send me an email at Ford at Active Wealth dot com That’s Ford at Active wealth dot com or go ahead and visit ActiveWealth.com Click that, schedule a consultation button and we’ll get that going for you. You can also call us at 770 685 1777 again 770 685 1777. To get your free viewing of the Baby Boomer Dilemma movie. Absolutely. At no cost to you. We’ll be right back. With right or wrong and the financial quote of the week as you take every move you make everyone you.
Producer:
Thanks so much for listening to the Active Wealth Show. Make sure to rate us every you listen to podcasts, including Spotify.
Producer:
Welcome back to the Active Wealth Show. I’m Sam Davis, joined by Ford Stokes, the founder and chief investment officer at Active Wealth Management. And it is time once again for one of our favorite segments. It’s right or wrong.
Producer:
Come on down as we test your financial knowledge in right or wrong.
Producer:
All right, Ford, first item on right or wrong, the game is very simple. I’ll read a statement and then you will help the listeners understand if that statement is right or wrong and help educate a little a little bit about different topics here. So here’s the first one. Right or wrong, it’s too expensive to work with a financial adviser and you would be better off managing your money on your own. What do you think, Ford? Is that right or wrong?
Ford Stokes:
Well, that is actually wrong. Financial advisors and professionals like us can help you save and keep more of your hard earned money. It’s important to work with a licensed professional that can help your spouse and family in case something happens to you. If you’re a do it yourself or investor. We work with a lot of do it yourself. Investors who are married, who come to us in their late sixties, early seventies and say, you know what, Ford In case something happens to me, I need I need my money managed. I need to do do this the right way. I’m just really concerned about what’s going on here. And so they pass money over. They also in a year of incredible market volatility and also where the Fed’s going up 75 basis points consistently, they’re really concerned because it’s beyond their power of understanding of what what assets they should be invested in, things like that. We offer complimentary consultations on the front end, which is a $4,500 value, where you get to understand the risk you’re taking, the fees you’re paying, the correlation of your assets. And also we’ll give you a financial plan, your 95th birthday with your current assets, then one with our recommended portfolios. But we’ll also give you a Roth Ladder conversion plan to help you delete the IRS out of being your partner in retirement because they’re the kind of partner you don’t want to have during retirement.
Producer:
All right. Next item on right or wrong, if your employer doesn’t offer a pension plan, there is no other way for you to create a personal income stream you can never outlive.
Ford Stokes:
Fortunately, that’s wrong. Annuities allow anyone to protect and grow their wealth, establish an income stream that they can never outlive fixed. The next annuities are tied to a stock market index. Your money is actually not invested in the stock market. Your money is invested in the ten year US Treasury and they take the interest generated each year off of that and they invest into options and they give you a participation rate. You get to participate in the lion’s share or growth of the index, and then the annuity company takes a portion of the assets as well. Example, we’ve got products that have 95% participation rate in the Credit Suisse Raven Pack and they take 5%. They give you 95% of the growth of those options and then they take 5% and they’re making money off of your money. But if if the market if the market goes down and a year like this year where the index doesn’t do as well, guess what? Your money in principal is still protected. Zero’s your hero with a fixed indexed annuity. And so you can really create your own personal pension in your own personal income stream that you can never outlive and get market like gains.
Ford Stokes:
I would also encourage you to avoid investing into a CPA, which is a single premium immediate annuity that’s not market linked. There’s kind of a, you know, the mama bear, the baby bear, you know, the three bears deal, the porridge that’s just right is is a fixed indexed annuity. That’s the fixed indexed annuity is one that’s indexed linked where your money is protected. It’s invested in a ten year US Treasury, which is widely been considered one of the safest investments on the planet for years and years and years, decades and decades and decades. And they also lock in your gains through protection periods, whether a one, two or three year protection periods with these different annuity contracts. And just remember that an annuity is a contract between you and the annuity company and make sure you’re making a decision with your eyes wide open and having a licensed financial advisor. And it’s even better to have a fiduciary who’s a serious 65 licensed adviser who’s also life and health license, who can help you sift through all these hundreds of different annuity products out there to help you make the right decision for you and your retirement.
Producer:
All right. Next item on right or wrong, here it is. You won’t learn much in a first appointment with a financial advisor. What do you think.
Ford Stokes:
For Actually, that’s wrong as well. It’s fortunate that that’s wrong. Once we have your financial statements, we can show you the risks you’re taking, the fees you’re paying, and the correlation of your assets. We’ll also show you how we can protect and grow your money without investing in the stock market. Just as I just said, in the last right or wrong answer here, we feel like all of you listening to the active wealth show deserve to know how much you’re paying in fees. You deserve a retirement that you’ve worked so hard for and you’ve worked so hard to save for.
Producer:
And last item on this week’s Right or wrong, from a fee perspective, ETFs, otherwise known as exchange traded funds, are far superior products compared to mutual funds. Is that right or wrong?
Ford Stokes:
That is right from a fee perspective. Etfs are superior to mutual funds because they’re lower cost. Bottom line, they give you diversification, but also they’re also traded inside the trading day. Whereas. Funds. They come up with a net asset value of a share of a mutual fund each at the end of each day. And then you can sell, buy or sell those. But ETFs are much more efficient. There are no 1281 fees with a with an exchange traded fund which 1281 fees allow for mutual funds to charge marketing dollars and other than the. Q. Q. Q When is the last time you saw any mutual fund company advertise? Like I haven’t seen television commercials for mutual funds out there. You know, there’s Lord Abbott funds that one of the big broker wire houses has, and they utilize that to implement their portfolios. They also use utilize that to make money off the using expense ratios and the 1281 fees. I haven’t seen any Lord Abbott advertising on television. I don’t see commercials. I don’t see billboards out there. Etfs can be traded within a trading day, while mutual funds must be traded between trading days.
Producer:
All right, Ford, that is the end of this week’s right or wrong. And that brings us to the financial Wisdom quote of the week.
Producer:
And now of wholesome financial wisdom. It’s time for the quote of the Week.
Producer:
All right. This week’s Financial Wisdom quote of the week comes to us from a philosopher, a writer by the name of Alice O’Connor, who said Money is only a tool. It will take you wherever you wish, but it will not replace you as a driver. Your thoughts on that, Ford?
Ford Stokes:
Well, you know, money is a tool, but you are the driver. You’re the control. You’re in control of your own destiny. You’re the driver of your own destiny. You’re in not the passenger seat. You’re in the driver’s seat. And Alice O’Connor is actually better known by her pen name, Ayn Rand. And she was a Russian born American writer and philosopher. She’s also known for developing a philosophical system named Objectivism, which basically means you’re basically going to do whatever you need to do for yourself. And that’s a great way to look at it. And she’s got Atlas Shrugged and other books out there that a lot of people really live by. They live their lives by and they’ve grown their their lives and they’re grown their nest eggs because of it. I would encourage you to be in control and also try to seek out ways to be more efficient and more effective with your investing. Also, don’t spend too much because you’re in control of that too, and that’s probably the thing you control the most. Also, be careful about how much money you’re going to risk in the market. Do you really want to risk 100% of the money you’ve got in the market? I would encourage you to not do that. I would encourage you to try to consider a fixed indexed annuity to replace some of the risks that you’re taking in the stock market and really just implement a bond replacement strategy. Just that simple. But that’s what I get out of that financial wisdom quote of the week. It’s just you’re in control. And if it is to be, it’s up to me.
Ford Stokes:
And you need to do everything you can to take care of yourself and take care of the retirements you can provide for your spouse. And also make sure you don’t become a burden on your children. We just want to reach out to the folks out there that if you don’t have an income plan. So for those of you pre-retirees and retirees and activate our listeners to the active wealth show, if you do not have an income plan in place for your retirement, we think you could really use our help. We’d really like to be able to help you. We can build you and your family a plan that has your money working as hard as you work for during all your entire career. Give us a call today at 770 685 1777 again 770 685 1777. Or reach out to us at active wealth dot com. You can also just send me an email forward at active wealth and say Ford I really want to help with a retirement income plan. I’m not embarrassed by it. I’m happy to. I’m happy to to sit down and meet with you for I know we don’t have a retirement income plan. We need one. Go ahead and reach out to us and you can send me an email at forward at active, or just reach out to us at active. Welcome. When we come back from the break, we’re going to talk about our this week’s problem solver. I think you’re really going to like this one. And we’ve got more in store in segment four of the active wealth show.
Producer:
A new payroll tax could be coming to your state. I’m Matt McClure with a Retirement Dot Radio Network powered by Amerilife.
Allison Hoffman:
We have seen a failure as a country to provide comprehensive insurance for long-term care.
Producer:
America has a long term care problem, KNPR reports. 70% of people who turn 65 will need some type of long term care, ranging from in-home care to a full time nursing home facility. And the costs can be astronomical. A Genworth study in 2021 found the median cost for home health was more than $61,000 a year. If you want a private room in a nursing home, the median cost there more than $108,000 annually. And Medicare won’t cover the costs.
Allison Hoffman:
Medicare pays for short term post-acute care if somebody’s been hospitalized or has other kind of short term medical needs, it doesn’t pay for the kinds of things that we think about as long term care.
Producer:
Alison Hoffman is a professor of law and Deputy Dean at the University of Pennsylvania Kerry School of Law. She tells me relatively few people in this country have long term care insurance. Washington State was the first in the nation to try to bridge that gap.
Allison Hoffman:
And what Washington state has done is it’s done a payroll tax point five, 8%, that is for all W-2 workers or full time workers that comes out of their payroll. And then so long as they pay in for a certain number of years, when they have a benefit that they can use for long term care up to a certain amount.
Producer:
But it’s not a cure all for the problem.
Allison Hoffman:
It is a little patch. I think the total benefits in Washington state are 36,000 and they increase with inflation over time. But the cost of a nursing home in most states is three times that over the course of a year. What it is, is the states trying to come up with a tool to fill in some of some of the gaps.
Producer:
Now, states like Pennsylvania, New York and California are looking to Washington’s plan to implement their own solutions. Professor Hoffman says taxpayers can opt out of the payroll tax in some cases, such as those who have their own private long term care insurance.
Producer:
So why would somebody want to opt out? Well, somebody might want to opt out because they’re already contributing dollars towards towards long term care. And they think that that’s sufficient. That’s enough. But people also might opt out because they don’t value it as a form of insurance.
Producer:
So could a program like this be coming to your state? If so, how could it affect your wallet? And what about your own long term care plans for your later years? Those are all important questions to consider as time continues to tick on by. With the Retirement Dot Radio Network powered by a AmeriLife, I’m Matt McClure.
Ford Stokes:
And welcome back. Activators the Active Wealth Show. I’ve got Sam Davis with me on the board as our executive producer. And I’m Ford Stokes, your chief financial adviser. And we’re going to share our this week in history before we go into our problem solver.
Producer:
It’s this week in history.
Producer:
All right, Ford This week in History. We’re going to hop in a time machine and go back to 1984. This week, in 1984, US President Ronald Reagan won his re-election bid in a landslide victory over Walter Mondale. He won 525 electoral votes carrying every state except Minnesota, and he also won 59% of the popular vote. No other candidate in US history has matched Reagan’s electoral vote in a single election, and I think that’s inappropriate this week in history because we have an election coming up in just a few days.
Ford Stokes:
Yep, absolutely. And for all of you conservatives out there, make sure you get out to the polls now or before November 8th, Tuesday, November 8th. And again, for all of you liberal Democrats who still feel like Joe Biden’s way is the right way to go, I don’t share and I don’t share your thoughts on that, but I would encourage you to show up to the polls on Wednesday, November 9th. And these are jokes, folks, that’s we got to have a little bit of fun on this show. Right. And so but I remember that election vividly as a kid, and it was a big deal. I felt more patriotism. I felt more confident in the direction because remember, four years earlier, Reagan had won. But we were dealing with the Iran hostage crisis. Gas lines were long. You know, Saudi Arabia was holding us hostage. It was a problem. And we inflation was just run away. And guess what? We’re in a similar situation and we’ve got to do our part and make sure you vote with your wallets and your retirement in mind this week and vote for the, you know, the Republican candidates. Please, I’m just begging you because we have got to do everything we can to stop this crazy spending of money we don’t have.
Ford Stokes:
And also all the people that say, oh, you know what? The corporate people and the rich people, they need to pay their fair share. No, we all need to get out and work. You know, if we all showed up to Plymouth Rock and we’re working in a settlement like Jamestown or or whatever, I don’t think we would have more than half the people not working, especially the people that are able to work, obviously. We need do a great job taking care of the people who cannot work. We need to give everybody an equal opportunity to be able to make money and do well in this life. But if you’re born in the United States, it may not be. It’s not your fault if you were born poor, but it is absolutely your fault if you do not die rich. And we’ve got to do everything we can to help protect and grow the assets that we have for our listeners. We want to do everything we can to help you. So you’ve got to do is visit active wealth dot com and we’ll absolutely get ready to help you. Now, let’s talk about the problem solver.
Producer:
It’s time for this week’s Problem Solver.
Ford Stokes:
This week. We’ve got some hard working savers who were not necessarily effective investors, and I’m going to change the names to protect the innocent here. So Mark and Linda have about 1.15 million in retirement savings. They’re business owners that operate. And, you know, at Athletic Training Center, they work with a lot of different athletes with different types of sports, and they’ve been doing it for 20 plus years. They’ve saved very well and they’ve made a good living. But as they get older, it’s more difficult to run the business. Mark actually needs hip surgery this year and Linda needs knee surgery. She’s more of a bookkeeper and he’s one who actually works with the athletes and has to stay active and on his feet. And it’s a great example where human capital, he’s actually 70 years old now. So the human capital is depleted, but their actual wealth capital is as continued to increase throughout their working years. They’ve saved consistently, but they really didn’t have a consistent investment plan in mind. They’ve been risk averse and their portfolio has lost too much value this year. They didn’t know that there were not in the market options like fixed indexed annuities to protect and grow their money. They have expenses of about 5000 a month. Their combined Social Security benefit will pay them about 4000 a month because they have worked very hard and they pay their taxes and they’re paid in their fika and all that stuff. But if Mark or Linda passed away, the other will lose 50% of that Social Security income because they both made the same amount of money when they worked in their business.
Ford Stokes:
So they want to enjoy retirement and travel while they’re still young and enjoy a higher lifestyle as well. They want to retire here in the next couple of years. And they’ve been kind of tied to this athletic facility. For 20 plus years. And the solution is they want to implement a smart retirement plan that includes a bond replacement strategy that eliminates the fees on their bonds and establishes an income they can never outlive. It also includes some smart risk and smart, safe solutions out there with smart tax as well, because they have IRAs, too. We’re trying to do 50% fixed indexed annuities as a bond replacement. Keep in mind, as fiduciaries, we don’t make money on rebalancing, but brokers can charge high fees, like up to like five and a half percent when they’re rebalancing your portfolio. So be careful when it comes to rebalancing your investments and know what the fees are involved in rebalancing your investments as well. So we need to do everything we can to. Take care of our clients, but also we all of you need to do a great job at not spending too much money. And also. Protect for when the rain comes, when bad things happen, when there’s a downturn in the market. Mark and Linda have about $150,000 sitting in their savings account. So it’s there as a nest egg for a 6 to 12 month fund.
Ford Stokes:
Obviously, that gets them, you know, after tax. If you looked at it before tax, it would give them right at what they need. For two years because it’s cost them 60,000 after tax a year. So that’s 120 grand. And they’ve got a little extra buffer with 150,000. That’s great news. But they they need to do everything they can to protect and grow that 1.15 million. That’s sitting in, you know, IRAs and and Roth a little bit in Roth IRAs and and other investment and just investment accounts and so taxable investment accounts. So we’re going to implement a Roth ladder conversion for them. We’re do everything we can to help them. And we’re also going to put them into 50% of their assets are going to go into a fixed indexed annuity that’s going to earn them. Greater payment than if they were just taking 4% from their assets. And so they’re going to get a higher payout ratio and it goes up 0.1% a year because the mortality credits that they get through the fixed indexed annuity and. They’re going to be happier. They’ll be able to generate more income, and they’re also going to eliminate the interest rate risk and the reinvestment risk that they’re facing right now with the bonds that they currently hold. We’ve only got a few minutes left in the show, so let’s hit them with the final countdown. Sam. It’s the final.
Producer:
Countdown. So let’s recap what you may have missed. It’s the final countdown.
Ford Stokes:
So on this week’s show, we talked about, you know, Jerome Powell going up 75 basis points like he does, like he’s been doing almost on a monthly basis, the back half of this year we went through in detail. How much more money are you willing to lose and different strategies to avoid that? We gave you a ways to get in touch with us. Make sure you reach out to us at activewealth.com And also call us at 770 685 1777 to get your free financial consultation and you’re going to get a chance to meet with just me. We also gave you a neat and new offer of being able to download the Baby Boomer Dilemma movie for an in-house viewing. And if you’re one of our clients, you’re going to get that opportunity as well. It’s not just for listeners who aren’t working with us. So, you know, if if you’re like Mark and Linda and other people that are listening to this show and also are clients of active wealth management, go ahead and just give Deborah a call and we’ll get you the link out. Absolutely no cost to you. And we’ve bought a bunch of these viewings, these online home viewings of the show of the movie Baby Boomer Dilemma. And you’re going to learn a whole lot from a lot of different experts from Wharton Business school leaders to leaders on Wall Street, to also former insurance commissioners for for the state of Maine with Eric Chapa. You’re going to learn from Olivia mitchell from the Wharton Business School, Tom Heckman, who’s trained over 300,000 financial advisors on how to plan retirement income for your clients, things like that.
Ford Stokes:
I mean, different experts like that. You’re going to love to hear from them. And we went through our problem, problem solver, this segment regarding Mark and Linda and how we’re doing a better job at trying to generate income from them so they can live that retirement lifestyle of $5,000 a month and not run out of money. And also have a plan for when eventually one of the two of them passes away and they lose 50% of their social your income, Social Security income overnight. I hope you found this show very educational. We wanted to make sure we’re doing everything we can to make sure you’re not losing any more money. We want to do everything we can to help protect and grow your wealth. And one of the ways to do that is to implement a bond replacement strategy with fixed indexed annuities. And I would encourage you to reach out to us at active wealth. Also, if you want to get a free viewing of that Baby Boomer Dilemma movie, go ahead and send me an email at Ford at Active Wealth dot com. And if you want to get a copy of my book Annuity 360, go ahead and reach out to us at annuity 360 dot net. Remember when you’re planning for retirement, if you’re going to be a bear, be a grizzly, do everything you can. To seek as much knowledge as you can so you can better protect and grow your own wealth because you’re the one in charge. 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 dot com.
Producer:
Investment Advisory Services offered 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 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. Are you concerned about US 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 advisor, to learn how you can reduce the taxes you pay before and during retirement. The Active Wealth Show Saturdays at noon and Sundays at 11AM.
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