How to Build a Smart Retirement Plan

12.13.24: Audio automatically transcribed by Sonix

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

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

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

Speaker3:
And welcome to retirement results result drivers. I'm Ford stokes, your chief financial advisor. Got Sam Davis here with us who is our senior financial advisor and co-host. Sam, say hello to everybody.

Speaker4:
Welcome to the weekend result drivers. Welcome back to retirement results on Am 920. The answer here in Atlanta and wherever you listen to your podcasts, if you're a regular radio listener, you can actually listen to every episode of Retirement Results on demand by going to your favorite podcast app and just looking up retirement results. And for the folks out there listening, the result drivers can also watch us on YouTube just by searching retirement results on YouTube, and they can see our faces as we do the show. And your very cool background. It's glowing. It's looking great today this holiday season.

Speaker3:
Appreciate that. Love this background that came from Outspoken Signs and the great folks at Tim and Sherry over there at Outspoken signs are awesome. Thanks for doing that for us. And if you need a sign for your business, I would encourage you to reach out to those folks at Outspoken Signs. You can also just give us a call at (770) 685-1777. I'll put you in touch with Tim and Sherry, and if you want to schedule a meeting with us and you want to get more efficient, more market efficient, and most importantly, more tax efficient, I would encourage you to go ahead and reach out to us at (770) 685-1777. Again, that number is (770) 685-1777. Or you can visit active wealth.com or retirement results.com/plan. That's retirement results.com/plan. So on today's show we did this last year. We're going to do it again this year. Last year we kind of started the smart retirement plan early. I've written a book called the Smart Retirement Plan book. We're going to have that out in Q1. We wanted to kind of wait to put it out. What we're going to do on today's show is we're going to start the New Year's resolution early. We're going to start about how to build a smart retirement plan. Overall, there's 26 elements in total to generating a smart retirement plan 26 chapters, 26 things you can look at almost one every other week for the year.

Speaker3:
But we're going to go ahead and do like 3 to 4 each week, and we're going to get done right around the first of the year or the second week of the year. And so the first really four items we're going to talk about on how to build a smart retirement plan this week is going to be smart vision, smart risk, smart safe and smart income. So again it's today we're going to talk about smart vision for your retirement. Number two is we're going to talk about smart risk. That includes tactical asset allocation and diversification. Number three is we're going to talk about smart safe how you can build a retirement income. And make sure that the income portion of your portfolio is absolutely 100% safe. And then number four is we're going to talk about that smart income as well. Like what does that entail. But first Sam, go ahead and share the financial wisdom. Quote of the week. This is a good one. And it's one that a lot of people don't really focus on. And they're kind of a little scared of it, in my opinion. And I think it's something that you just don't want to live your whole life not doing this.

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

Speaker4:
This week's quote of the week comes to us from Dave Ramsey in Florida. Dave Ramsey's got a lot of great quotes. We've shared the airwaves with him in many different states and cities across the US as we've aired retirement results. And this quote is great. Dave Ramsey once said, you must gain control over your money, or the lack of it will forever control you. And I think this is a good time of year for this quote. For people should be taking a look at their finances. How did things go in 2024? What changes? What improvements do you want to make in 2025? And thinking like that's especially important for those who are about to enter retirement. That's a big financial step, or those who have just entered retirement and maybe feel like they have some things to improve.

Speaker3:
Yeah, absolutely. We're also going to try. We're going to sneak in smart inspection right after Smart Vision. So we're going to talk about five different smart retirement plan elements today. And we've got some significant problem solvers I think you're really going to hear those. Um and also how do you handle if your portfolio is kind of underperformed over the last several years. What should you do and how to get started on that? So first, Sam, why don't you go ahead and lead us off on the first one that we're gonna talk about today? We're going to be building a smart retirement plan.

Speaker4:
Yeah. So first you want to have that smart vision for your retirement. Everybody has different ideas about what retirement is going to look like for them. So here's some questions to ponder before you actually start making those planning steps for your future. Like what are you going to do during your golden years? Who are you with? Who are you taking care of? Is there anybody that you're going to be looking after when you're in retirement? Do you have any specific goals and do you want to retire? Is this time to, you know, sit back, kick the feet up on the beach, have that 5:00 somewhere retirement or do you want to relaunch? Do you have some ideas for a business or some community service, or maybe some sort of nonprofit organization? And and most importantly, and this is where we come in to help people is how are you going to fund all of it?

Speaker3:
Yeah, absolutely. So we we will really do everything we can to help people build the retirement they really want. And it's not an insignificant meeting. When people meet with us, we we take the time. And you know, as you know, I spell love t-i-m-e in our family. That's what we do in our family. And we try to spend the time with you, like, what are you going to do in retirement? Who are you with and how are you going to fund it? And we also encourage people listen, if you're concerned about getting the kids and grandkids to spend more time with you, then I would encourage you to try to get some sort of residence on the water so they'll come visit you so you can spend that time, that time with your family. Now that takes money. Um, and you can also look at lakes and try to get a little bit less expensive, obviously, that the beach is going to be pretty expensive unless you're going to go international, which I don't know if I recommend that. I'd rather people stay safe and stay in the United States of America. I'm also really excited about what's going to happen when Donald J. Trump leads us and leads our our nation, hopefully out of being a debtor nation and trying to balance the budget. And it's been pretty remarkable to see what the Prime Minister of, of Argentina has done.

Speaker3:
He's completely cut inflation. He's balanced the budget. They have a surplus for the first time from their government 123 years. It's amazing when your government actually works for you. Uh, that's pretty remarkable. So I'm excited about what happens there. But the smart vision for your retirement take 5 or 10 minutes and really kind of talk about it, especially as a married couple. You want to sit down and talk about what do we want to do in retirement, not just live day to day, but really accomplish goals. Do you want to make a difference with your church? Do you want to make a difference in the community? Do you want to, you know, start a new charity, a 501 C3. It's not that difficult to do. Do you want to, you know, take your hobby and take it commercial and have it help you make money? There's a lot of things you can do in retirement. And also you can continue your income. The other thing I would say is one of the best ways to really overfund your retirement is to work 6 or 12, 18 or 24 months longer. I would really strongly urge you to try to stay in the workforce because. Because once you exit the workforce, you're going to find it very difficult to get back into the workforce and make the same kind of money you were making before.

Speaker4:
So once we have that smart vision in place, we know you know, what the goalpost is and where it's at. You know, we can properly, you know, aim your plan in that direction. But it starts with having a smart inspection of your retirement savings. This is something that we do for every result driver, every listener who reaches out to us, you know, for Ford. It starts with that comprehensive review to help people figure out where they're at.

Speaker3:
Yeah. I mean, we want to help you understand the fees you're currently paying with your portfolio, the risks you're taking with your portfolio, the correlation of your assets, and also what are the advisory fees as well, like the total fees that you're paying. But the hidden fees, the fees you don't see on a monthly basis in your statements or things called it's a thing called expense ratio that comes from 1281 fees, a share fees and C share fees. That is significant. And we need to help you understand what the expense ratio is within your portfolio. Ours are very competitive because we use ETFs exchange traded funds to implement our portfolios. Many of you are using mutual funds. If you're coming out of 4k plans, things like that. Something to be very careful for. So we want to make sure we understand we can inspect what we expect. As Ronald Reagan used to say, we can trust but verify what what you're dealing with in your current portfolio and your current plan. A majority of the people we we talk to are people that came from 401 K plans. They didn't have an advisor, and they want to understand what's going on and how they can get more efficient and take control of their assets. We come back, we're going to get more into our first problem solver. We're going to talk about other smart retirement plan elements to help you build that successful retirement plan for the long term. You listen to retirement results right here on Am 920. The answer?

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Speaker6:
I'll be working here forever.

Speaker2:
At least until I die. Money questions, money answers. You're listening to retirement results.

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Speaker1:
Remember, all of our listeners receive a free financial consultation just for listening to the show. Visit retirement Results.com to learn more and schedule an appointment. Thanks for listening to retirement results and subscribing wherever you get your podcasts.

Speaker2:
You're listening to retirement results. Learn more at Retirement results. Com or by calling us today at (770) 685-1777. That's (770) 685-1777. And now back to the show.

Speaker3:
And welcome back to retirement results for adult drivers I'm Ford Stokes your chief financial advisor. And I got Sam Davis here with us who's our senior financial advisor and co-host on retirement results and has been for five plus years. Sam, let's go ahead and share the problem solver that deals with four KS and also really answers the question, what do you do with that stray for one K or that orphan for one k.

Speaker2:
It's time for this week's Problem Solver.

Speaker4:
Yeah, this is a great problem solver for this week, and a good one for all of the result drivers to keep in mind. Ford. We've actually helped quite a few people with this exact problem this year. Um, and here's the problem solver for this segment too. Do you have a stray 401 K? So the problem is, many people neglect to roll over the funds from a previous employer's retirement plan. Maybe you switched jobs in the past year or two, maybe longer. And that other plan has just been sitting there kind of off to the side. We'll call that a stray 401 K. Sometimes you'll hear that called an orphaned 401 K. Um, now we changed the names here to protect the innocent, the identity of those who these are about. But we worked with James recently. He's an engineer. He changed jobs a couple years ago. He's still younger in his career, so he switched to a position that would be better for him so he can work up in management. He had a sizeable IRA, but he had a straight 401 at his old job that could have been earning him more. It was just sitting in target date funds and whatever he had set it to years prior. So the solution is we worked with James to roll over that 100,000 and combine that with his assets in his IRA, and really help him take control of those assets. He now has more investment options than he had in that previous plan, and we actually helped him replace a bond portion of his portfolio with fixed indexed annuities so he can place a floor of protection on his hard earned retirement savings. And for this is a good thing for people to keep in mind if they have some old 401 K's out there, make sure you're not just leaving it, you know, collecting dust in the corner.

Speaker3:
Yeah. What's interesting for James is he had kind of multiple IRAs and multiple foreign K's. And so we were able to kind of consolidate all those into one rollover IRA. There also was no tax event to do those rollovers. So a lot of people don't know hey wait a second, is this going to cost me money? Am I going to do it? Am I have to pay taxes when I roll the money over? When you implement a traditional 41K rollover or traditional IRA rollover, there are no taxes taken out at that time. They're just rolling it over into the new account. You don't pay taxes until you actually start withdrawing money from the account and taking it into your checking account and spending it. So and then when you do that, that will be ordinary income. That's also why we help people implement Roth ladder conversions, so they can delete the IRS from being their partner in those IRA accounts. Also, if you want to implement a Roth ladder conversion, you do need to move the money from your 401 K into an IRA first. You don't do a Roth conversion for your 401 K direct to a Roth IRA. You need to go from an IRA to a Roth IRA. Let me go. Let me take a step back to Sam. I want to talk about the smart inspection. I want everybody to understand what we do for every listener. We kind of talked about it on a high level that, hey, here, we're going to understand the the risk you're taking, the fees you're paying and the correlation of your assets with your current plan.

Speaker3:
That has nothing to do with us. But let me tell you everything that what you get when you meet with us at Active Wealth Management again, also, the advisors at Active Wealth Management are the ones that power retirement results. Yet Sam and me here hosting the show, we've also got Matt McClure, who's our roving reporter, who usually gives us some really great, um, quick news vignettes each and every week. And he's based out of our Midtown office. Sam and I are based out of our Alpharetta office, and then we've also got Carroll based out of our Kennesaw office. And so we're happy. And also Brady Seats is up there as well. So let's just go through this real quick. Number one is we're going to review your accounts. We're going to review your IRAs, your four CS. And anywhere where you hold assets including cash. We're going to assess your current balances and fee structures, how much you've been able to really save for retirement. We're also going to help you understand what you're currently paying in fees and management fees, whether that's advisory fees or portfolio fees or both or all that combined. We're also going to help you understand the expense ratio within your portfolio that we talked about. We're also going to review the rates of return over the last 12 months, three years, five years, ten years and 20 years, basically because we're going to include that 2008. So you can understand how much risk you're really taking.

Speaker3:
We're also gonna help you determine the answer to this important question. Do you have a positive retirement income surplus or a negative retirement income gap with inflation that we've seen in the last four years? A negative retirement income gap is going to widen as inflation rears its ugly head and continues to erode your buying power with the assets you currently have. We've got to really try to figure out a way to start with a positive retirement income surplus, and that includes taxes. We're going to look at the tax situation too. We'll also do an annuity x ray on any annuities or pension plans that you currently have, especially if you're considering a lump sum taking a lump sum in your pension, or if you're considering creating your own personal pension if you're looking for mailbox money. As many of you have heard me talk about on the show that you know, Sam, we always ask the question, you know, hey, why are farmer's hats beating on both sides? Is because they're looking in the mailbox for the subsidy check. We're going to try to help you get that mailbox money, to make sure that you don't have to worry about your finances month over month, week over week. We're trying to make sure that you get a monthly income, and we can help you do that absolutely at no cost to you. Also, there's some really attractive annuities right now that are paying significant participation rates. They're paying what's called a roll up rate, where they're giving you like 8% every year into the income account, guaranteed, regardless of how the market performs, which is really remarkable.

Speaker3:
And if the if the market performs well and outstrips the 8%, then you'll go with the higher amount. We can help you do all of those things. We'll also determine if you have a tax problem. I'll give you an example. If you've got $1 million in your IRA and no other money, guess what? You have a tax problem. The IRS is your partner in retirement. We will also consider your real estate assets or your family home, rental property, land, etc. as part of the portfolio. Whether you want to liquidate that or keep that or buy more. We'll also review any life insurance coverage you currently have and help you take care of additional coverage needs. What is the cash value of your life insurance policies? How much value is available for tax free withdrawals, consider a 1035 exchange, which is a tax free exchange, just like a rollover and moving cash over to an indexed universal life policy so that you can both protect and grow your money and get indexed like gains, get indexed, linked gains and market like gains. Also, we're going to provide you with a Social Security maximization report that we call an RSA roadmap. I am a registered Social Security analyst. And there's only like 15 of us in the state of Georgia. If you haven't figured out how to maximize your Social Security income benefit and you haven't taken Social Security or you've taken it less than a year ago, then I would or you taking it in less than the past 12 months.

Speaker3:
I would encourage you to reach out to us at retirement Results.com click that schedule a consultation button in the upper right corner, or give us a call at (770) 685-1777. Again, that number is 7706851. 777. Now, with this RSA roadmap, the Social Security Maximization report that you're going to get, we're going to take into account the XML files from Tsa.gov for both spouses. Also, if you're divorced and you were married more than ten years, we'll also take a good hard look because you're going to be entitled to half of theirs or all of yours as Social Security income benefit. If you have disabled children and they're under 21, we can help you do that. Um, there's interesting opportunities there, especially if you're part of a second marriage that's got, you know, where the the husband may be taking Social Security, but, um, the wife isn't, and the children are younger, but they're under 18. There could be opportunities for them to take benefits as well. If you've got questions about all of this, I would encourage you to just reach out to us at (770) 685-1777. Now, all of this is part of a smart inspection. You want to inspect what you expect regarding your retirement portfolio. You want to trust but verify what's going on. You want to go back to what you know. Dave Ramsey says you want to get control over your money or be controlled, because you've got a lack of control over your money.

Speaker4:
Yeah, it's just important for people to have a budget and, you know, be as detailed as you can so that you're telling every dollar where to go instead of wondering where your dollars went at the end of each month.

Speaker3:
Yeah, that's a big deal. And, you know, some of these simple lines and simple terms and simple cliches, they're cliches for a reason because they're they have a lot of truth to them. And a lot of people experience that truth both on the, on the, on the good side and the bad side. And we would like you to be on the good side of your money. We want to make sure that it's there to protect you, to provide for your family, help you spend more time with your family. Money matters, and we're going to do everything we can to help you maximize the money, the hard earned and hard saved money that you've been able to accumulate your wealth that is your wealth. And, well, let me ask you a question is your money important to you? Well, if it is, it's important to us. And we're here to protect and grow your hard earned and hard saved wealth. When we come back, we're going to talk more about how to build a smart retirement plan, including smart risk and smart safe investing. And there's a balance between those two you listen to Am 920 answer and retirement results come right back. And again, thanks for making us the number one listened to radio show on the weekends on Am 920. The answer we appreciate you. Our result drivers.

I see the bad moon I see.

Speaker2:
While Washington's spending keeps growing, your retirement doesn't have to shrink. Protect and grow your hard earned money today by calling us at (770) 685-1777. That's (770) 685-1777 to connect with a qualified advisor.

Bad moon on the rise.

Speaker2:
Don't miss part of today's show. Retirement results is available wherever you listen to podcasts and online at retirement results.com. I can't wait till I.

Speaker3:
See you again. Welcome back. Result drivers I'm Ford Stokes with chief financial advisor at Sam Davis here with us, our financial co-host and senior financial advisor. So, Sam, we're talking about smart retirement plan building today. That's something we did last year. And we're going to do it again this year. We're going to go through all 26 elements of it. And the five we're talking about today are smart vision, smart inspection. And this next one is going to be Smart Risk. Then we'll talk about smart Safe and Smart Income all on today's show. So we've already talked about smart vision how to build that vision for your retirement. What are you doing? Who are you with and how are you going to fund it. And also we encourage people to try to get on the water somewhere so they can spend more time with their families. That'd be really good. Smart inspection. We talked about how to trust but verify and kind of inspect what you expect about your retirement plan. Understand the risks you're taking, the fees you're you're paying, and then also the correlation of your assets. And we help everybody do that by running a full financial plan to your 95th birthday at no cost to you.

Speaker3:
And now what we want to do is talk about smart risk. So there are several elements of smart risk. With risk comes reward. So that means you've got to invest. You've got to stay invested be invested in the market so you can keep pace with inflation. You have to take some financial risk with let's say 60, 70, 80% of your portfolio, but generally with the rule of 100, you want to be careful about how much risk you're really taking. And we'll talk about more of that about that during Smart Safe on the same show, in the same segment. But Smart Risk is really about investing money in the market, getting a rate of return. And you want to reduce two things. Number one is you want to reduce your expense ratio so you can be more fee efficient with the risk you're taking. You don't want to overpay for mutual funds to get a rate of return. That's going to be a leaky hole in the bucket. I mean, Sam, your thoughts on that first?

Speaker4:
Yeah. Well, it's important for people to stay invested, which means that you're going to be assuming a certain amount of risk. And just like you said, Ford, we want to make sure that people are getting properly rewarded for the amount of risk that they are taking in their portfolio. Of course, we never want anyone we're working with to be uncomfortable with the amount of risk you have. That's why it's so important to have that smart inspection. Some people will come in and say, you know, hey, I am afraid of the stock market. I'm afraid of what happened in 2008. I don't want that to happen to me. But when we do a smart inspection, we see that such a large percentage of their portfolio is actually at risk. So step one is really bringing that risk in line with what your personal tolerance is. And make sure that the risk you are taking those are some smart risks, no question.

Speaker3:
And then also how important is it to get more fee efficient with the risk portion of your portfolio and not overpay for 12 B1 fees, advisory fees, portfolio fees, all those fees that some people just don't even notice.

Speaker4:
Yeah, I mean, you can't go anywhere without paying fees these days. So when it comes to your retirement portfolio, we try to keep those to an absolute minimum. You know, when you're doing something like a bond replacement, which is a strategy a lot of our clients like to enforce in their retirement plan. You're effectively deleting fees from a percentage of your portfolio, sometimes 20, 30, 40%, sometimes even more of their portfolio. They're able to actually eliminate those fees. And that's just more dollars for you to stay invested, protect yourself from inflation. And it's all about, you know, living that smart vision. To go back to where we were at in the first part of the show, you know, more money in your pocket is more money that you can put towards living that smart vision.

Speaker3:
No question. It's I couldn't have said it better myself. Now, let me also talk about the difference between tactical asset allocation. And let me also talk about the difference between strategic asset allocation and tactical asset allocation. So strategic allocation is hey, we're just going to buy it and we're going to hold it for a year. And then we're going to look at it strategically and see what asset classes we think are going to perform better over the next 12 months. Also, when people invest with us at Active Wealth Management and with our registered investment advisory firm Brookstone Capital Management, they actually get managed portfolios. And a lot of our portfolios are kind of built with 50% strategic, which means you're going to rebalance once a year and 50% tactical. We also have some portfolios that are completely, 100% tactically managed where we're rebalancing at least once a month. Tactical asset allocation is rebalancing much more often, and we're looking at every time we rebalance, let's say we do it on a monthly basis. That's the frequency will look at which asset classes we think are going to perform the very best over the next six months, each time that we do it. That allows you to not go follow the the downturn in the market all the way down to the bottom of the valley of the market.

Speaker3:
With each asset class, we rebalance and we try to get into higher performing asset classes after that. So we think that's the right way to go. We like tactical asset allocation, but we also implement strategic asset allocation as well. And we also try to reduce your expense ratio. Let me just say this. If you don't know what your expense ratio is within your portfolio currently and that hasn't been shared with you by your advisor, I'd encourage you to reach out to us at retirement results.com/plan. That's retirement results.com/plan. Sam what are your thoughts on how detrimental expense ratio can be. And also a lack of knowledge on what a standard deviation is, which is a measurement of risk to people. We see so many people that come in to speak with us that just don't know what any of these things are. And when they leave, especially after the second appointment, then they've decided to move and move their money over to us and move forward with working with us. They walk out so much with a sense of relief and feel a lot better.

Speaker4:
Yeah, well, first off, you know, you don't want to be like the the ostrich with your head in the sand. First off, you want to know what you have and what it's doing for you. That's why that smart inspection is so important. But once you get in there and you're working with fiduciaries like ourselves that are taking a look at an analysis of your portfolio, you know, multiple third party analysis of your portfolio, you know, we can take a look at those things like those fees. And Ford, if you can track it, you can change it. We've had people come to us this year and their expense ratio was in a really good spot. It was actually lower in some places than Then we could have done for them. And we we absolutely tell them that that you're better off staying right here. But when somebody comes to us and their expense ratio is way out of line with what's reasonable, and they're paying way too much in fees, it's not difficult for us to make some adjustment adjustments so that they can keep more of those dollars in their pocket.

Speaker3:
Yeah, it's just the right way to do it. So again, we've got Smart vision and we're going to do smart inspection when you come in to get all of your portfolio analyzed for the fees and the expenses and then and also the correlation. And then we're going to look at smart risk and how much you're taking in risk. And and also how do we get your risk more efficient just from a fee perspective. How do we delete the fees and and keep it much more efficient so that your money is working harder for you, and hopefully your money is working as hard as you did to earn and save it. Listen, we know it was hard to earn the money and it's even harder to save it, right? Um, the next thing is we're going to talk about is smart safe and smart. Safe is taking 20, 30, 40%. But let's just say it's between 20 and 40% of your portfolio. And that's your smart income portion of your portfolio. That's the portion of your portfolio that's going to generate the income that is the smart, safe side of your portfolio.

Speaker3:
That's the smart, safe bucket, if you will, of your portfolio. Let me ask you a question. Why are you paying advisory and portfolio fees and even expense ratio for the bonds in your portfolio if they're there to generate income, when you can do a bond replacement and put it into another product that doesn't have advisory fees, doesn't have portfolio fees, it's a really important question to ask you as you're driving around heading to Publix or Kroger or to a kid's basketball game or whatever this this year and or heading to a holiday party, it is something you really need to ask yourself if I want to generate income. Why am I doing it with risk like interest rate risk and reinvestment risk that's associated with bonds? Why do I have bonds in my portfolio at all? I mean, Sam, we asked that question quite a bit of people, and most of the time they come back because they don't even try to defend it. They're like, yeah, you're right. I need to do I need to make a change today.

Speaker4:
Yeah. And, you know, it's something that you just want to take a look at. That's why that smart inspection is so important. A lot of people out there don't know what percentage of their portfolio is in bonds. And that's an answer that you would be. It'd be very beneficial for you to figure that out. And then also, what are you paying on fees in your overall portfolio, not just the bond portion, but the overall portfolio. And it's important to have that smart, safe element. And, you know, bonds at times, you know, over the last 50 years have been great tools to do that. We just take a look at all the best options that are available today and help our clients choose which tools are best for them when it comes to generating that retirement income. And also placing a protective floor on your portfolio is so important. I mean, it's important for people to answer the question for how would my portfolio handle a market drop? What if we had another 2008 or another 2022? How is my portfolio set up to weather that storm if that should come?

Speaker3:
Yeah, I think it's really easy for us to be able to help you replace the bonds in your portfolio with a more effective and more efficient product. We come back from the break. We're going to talk about how to generate a higher percentage withdrawal rate than the typical 4%, by replacing the bonds in your portfolio. You're going to be really surprised at how great and how effective this really can be. So come right back. You're listening to retirement Results right here on Am 920. Answer. And we're talking more about how to build that smart retirement plan, specifically by building a smart safe part of your portfolio. Thanks for listening to us. Come right back.

Speaker2:
The national debt is out of control, but your financial future doesn't have to be. Our listeners can schedule a complimentary consultation now by dialing (770) 685-1777. That's (770) 685-1777 to connect with a qualified advisor.

Speaker1:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

Speaker3:
And welcome back result drivers to retirement results I'm Ford Stokes got Sam Davis here with us. Okay so we're talking about smart safe investing. And we're kind of.

Speaker7:
Moving.

Speaker3:
Forward towards smart income. Let me just be really clear about the smart income part of it. You want to be able to generate more income from your assets, and you want to make sure that your assets can still stick around and be there and not draw your assets down to zero, where you're going to actually only be living off Social Security and the equity in your home. We don't want you to have to move forward with a reverse mortgage or things like that. We want to make sure that you are successful in retirement and you've got, um, you know, a real nice nest egg that you can provide to your heirs, to your children. So here's what we're going to do. We're going to generate a higher income off of a smaller portion of your portfolio. So let's just say you got a typical 60 over 40 portfolio, 60% stocks, 40% bonds. We're going to replace that 40%. That's bonds with fixed indexed annuities. Then we're going to delete the advisory fees and portfolio fees because they're not there are no advisory and portfolio fees with a fixed index annuity. That's great news because the insurance company pays us a one time commission, and we're responsible for servicing that annuity for the life of the annuity. Next, we're going to get you higher than the typical 4% withdrawal rate. So let's say you got $1 million in your IRA and you're getting $40,000 into the household for Social Security. Okay. So that's 40,000 is 4% of a million. So you guys are going to be living on 80 grand, less the taxes on your Social Security income benefit. Hopefully Donald J. Trump will eliminate the taxes on Social Security because you already paid money in I don't know why you need to pay taxes on the money coming out.

Speaker3:
And oh, by the way, taxation on Social Security didn't start until 1983. Holy cow. That is an that's an eye opener. Tip O'Neill forced Ronald Reagan to do it too, to get his budget through for that year. And they never went back. They've they've taxed you ever since on your Social Security. Now, if you want to get more than 80,000 bucks, which you ought to do is take 400,000 of that million, and then you're going to end up generating, if you wait like three years, you defer three years. With the nationwide peak ten, you could be generating 42, 43, $44,000 a year in annual income in starting in year three, year starting in year four, as an estimate, just off of 400,000. So then instead of instead of a 4% withdrawal on that 400,000, which would be 16,000, you're generating $44,000. And then the other 4% would be another 24,000. So that would get you to 68,000 plus the 40 on your Social Security. You're looking at $108,000 in income to you versus just getting 80,000 just by implementing a bond replacement strategy. And you reduce your risk and you shored up to make sure that your income portion is completely safe. I don't know why you wouldn't do that. I mean, Sam, you've helped so many clients implement this type of bond replacement strategy. You've got a lot of clients that are looking to do this right now during this Christmas holiday season and also going into. And we've got, you know, some folks, um, that are doing it right as they turn 45 years old, starting in February with you. Just your thoughts on this bond replacement and getting to that smart, safe and smart income portion of the portfolio?

Speaker4:
Yeah, I mean, there's just so many good reasons to, you know, take the time and see if this is a good fit for your retirement plan and your overall portfolio. I mean, number one, deleting those fees, becoming up more fee efficient investor and having a more fee efficient portfolio. That's a big win for our clients, placing that protective floor on their hard earned retirement savings. You know, we don't know what the future's going to bring. So let's place a floor and protect that income portion of our portfolio. That's a big win for our clients here at Retirement Results. And your income is really going to determine your lifestyle in retirement. The more income that you have to count on in retirement, that's Social security, that's pensions, that's income from annuities, that's withdrawals on your accounts. The more predictable income you have that's going to set the pace for your lifestyle. I mean, are you taking that one trip a year or are you taking 3 or 4 trips a year? Um, you know, it's it's just it's going to help you determine so much and give you so much more flexibility if you have a strong income plan in place.

Speaker3:
Amen. I couldn't have said it better myself. I'm just really excited about these elements that we've talked about today on today's show with a building a smart retirement plan. Sam, I also want you to share regarding smart, safe and smart income as building that overall smart retirement plan. Talk a little bit about sequence of return risk and how you can really eliminate that sequence of return risk with a bond replacement strategy.

Speaker4:
Yeah, it's really about not giving up too much ground with your overall portfolio, not retreating as you're looking to grow your wealth, you want to place that protective floor. I mean, just to give you an example of how market losses can affect your portfolio. I mean, if we go back to 2008, we look at a loss of about 50%. You know, if we had a 50% bounce back the following year, you wouldn't be back to even, you know, to recover from a 50% loss you actually need a 100% gain. Or let's go back just a couple years ago to 2022, you know, to recover from a 20% loss, you're going to need a 25% gain just to get back to even that's even on your previous portfolio value. That doesn't even account for the amount of time it took you to recover those lost assets that lost value. Meanwhile, inflation has been withering away your buying power. So especially as you get close to retirement when you have more saved up than ever before, that means you stand to lose more than you have ever before. So place that protective floor. Make sure that the income is locked up for you in retirement. Make sure that you know that regardless of what happens, you'll be able to count on that that income total, you know, Social security, annuity income, pensions. And that's going to give you a lot more peace of mind. And it makes it so much easier to plan, you know, how you want to live out that smart vision?

Speaker3:
Yeah. I mean, just reducing sequence of return risk where you literally can protect your principal and lock in the principal and gains every protection period. Usually those protection periods with fixed indexed annuities are 1 to 2 years. Also, let's say you're 56 years old and you're planning on retiring in ten years. At 66, you can invest in a fixed indexed annuity. Let that money sit there and grow and have the deferred growth. And then after ten years, day one of year 11, you can actually take all of your money out and invest it into a new fixed indexed annuity and get another 1,520% bonus if that's what they offer at the time. And or you can put it back in the market, whatever you want to do. It's the final.

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

Speaker3:
The final countdown on today's show. We kicked off our early New Year's resolution almost a month, you know, just a few weeks early on purpose to get people started, to get more efficient, market efficient and more tax efficient with their portfolio, to get to build that smart retirement plan so they can build a successful retirement plan. We want you to have success during retirement. So on today's show, we talked about smart vision, basically building a vision for your retirement. What are you doing, who are you with and how are you going to fund it? Number two is we we talked about smart inspection is how to inspect what you expect about your portfolio, understand your expense ratio, understand your standard deviation which is a measurement of risk. Understand the advisory and portfolio fees you're paying. And how can we get more fee efficient, more market efficient, and more tax efficient with the portfolio we have? And how do we improve on that plan? The next. We talked about smart risk. We talked about the difference between tactical asset allocation and strategic asset allocation. And we don't just hang in there with our assets and we try to reduce the risk that way. We also talked about reducing the fees within your risk bucket of your portfolio, so you can be more effective in growing your money overall.

Speaker3:
And then we talked about smart safe and smart income. So we talked about five things today on today's show. Smart vision smart inspection smart risk smart safe and smart income investing. Listen, if you got questions about all this, I want to encourage you to reach out to us at retirement results.com/plan. That's retirement results.com/plan. You can also call us and schedule a meeting with us at (770) 685-1777. Again (770) 685-1777. 77. Remember, if you're looking for information about retirement and investing and how to build a successful retirement, if you're going to be a bear, be a grizzly. Be aggressive about it. Get more information. Do that smart inspection with us here at Active Wealth Management. Again, the advisors at Active Wealth Management are the ones who power retirement results this radio show. We appreciate you guys and gals making us the number one listened to show on the weekends here on Am 920 answer. And also, thanks so much for the 20,000 plus downloads of our podcast in 2024. And we're still going and we really appreciate you listening. If you've been a long time listener, you feel like you've got a relationship with Sam and me. We'd love to hear from you. Just give us a call at (770) 685-1777 and have a great week everybody.

Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.com. Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment advisor 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.

Speaker1:
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 disclosures of any conflicts of interest. Please refer to our firm brochure, the Adv2 to item four for additional information.

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