On this week’s show, Ford and Sam share some tips to help you protect your buying power from inflation as you navigate retirement. In this episode, you will also hear an example of how we recently helped a listener in our Problem Solver of the week. Plus, we debut an all-new segment to celebrate special retirees.
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6.7.24: Audio automatically transcribed by Sonix
6.7.24: 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. Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.
Speaker2:
Welcome to Retirement Results, the national radio show and podcast for listeners like you who want to protect and grow their hard earned money. In a world filled with so much uncertainty and financial risk, we seek to cut through the noise and build successful plans for hard working Americans on their road to financial freedom. Retirement results is powered by active Wealth Management, a team of fiduciary advisors who always place your needs first and now your host. He's a registered social security analyst, member of the Forbes Finance Council, an author of multiple books on retirement planning. Here's your chief financial advisor, Ford Stokes.
Speaker3:
And welcome result drivers to retirement results. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis here with us. He's our senior financial advisor and co-host. Say hello to everybody.
Speaker4:
Sam, welcome to the weekend result drivers. Welcome back to retirement results. Ford. It's always a pleasure to be on the air with all of our listeners. We've had a lot of fantastic calls so far this summer, and we want to keep helping all of the listeners out there, whether they're listening here in Atlanta, Georgia, where our home office is based, or they're listening in Huntsville, Alabama, or even to our podcast all over the country. Thank you for tuning in once again. Hope you're having a great summer. I want to shout out Suzie, who is a listener to the show who I've been talking with. She came to one of our seminars and we're getting her and her husband situated with their retirement, and you're always welcome to give us a call. And just so excited to be back for another episode.
Speaker3:
Yeah, thanks for listening. And also coming to our seminar at Cabernet. Uh, we do lunch seminars almost every month, and we're doing them at kind of up and down the 400 corridor. And also we're going to start doing them some in the 75 and 85 corridors as well. So if you want to come to one of our seminars, all you got to do is reach out to us at retirement results. Comm slash plan. That's retirement results. Dot com forward slash plan. Put your information in and we're happy to get you set up with a seminar or a one on one consultation at no cost to you. It's a $5,000 value because all the things we give you, and we'll walk through that here a little bit later in the show. But today we're going to be talking about how to maximize your spending power in retirement. It's going to be a really good show. It's an important show. Today we're talking about how Social Security, inflation and Medicare can impact retiree budgets these days. We also want to always say, thanks so much to our listeners and our result drivers for listening to retirement results. Also, thanks so much for making our retirement results. Television shows in Columbus, Georgia, Huntsville, Alabama. And now Panama City Beach, Florida, um, in Fort Walton, Panama City Beach in Santa Rosa. All the all those folks down there are 38 and 98. Just wanted to say shout out to you guys for making our first week very successful.
Speaker3:
We got lots of calls. We really appreciate everybody, um, watching and listening. And, um, you know, we look forward to helping you better protect and grow your hard earned and hard saved wealth. So here's the overview of today's show. We're going to talk about Social Security and Medicare and how they're both kind of facing financial trouble. We share the latest updates for you today that came out from the SSA gov. And also the Congressional Budget Office. And then we're going to talk about retirement spending is a U curve. We explain what that means and how you can plan better. Also we've got our retiree of the week segment, which is a brand new segment for us at Sam's going to share. We're going to highlight a recent retirement story of somebody really famous. And this is an interesting one. I look forward to Sam sharing that. It's an all new segment, and we're kind of pumped about this one. And we're going to have an inflation demonstration showing how rising costs at the grocery store are impacting us all as well. And June is Annuity Awareness Month, in case you didn't know. And we're here in early June, we share some information that can help you better plan for your income during retirement. And Sam, why don't you go ahead and share our financial wisdom. Quote of the week.
Speaker5:
And now wholesome financial wisdom. It's time for the quote of the week.
Speaker4:
Yeah, I think this is a great one, especially whenever you have an election year. I feel like this quote we're about to share is so true. This one comes from author and humorist Will Rogers. We really like sharing his quotes, and Will Rogers once said, I don't make jokes. I just watch the government and report the facts. Yeah.
Speaker3:
Can you imagine if Will Rogers was alive today reporting the facts of what's going on in the craziest world? That is the Democrat led white House and and kind of the 5050 Senate. And, I mean, I just I can't believe how many millionaires are created from being in the government. I think that's awful. I think we should they should be there to serve us. And they're just not I cannot believe the over $34.6 trillion in US national debt, according to the US debt clock. Super concerned about that. And you know, we you know, also the impact of inflation on our retirees and pre-retirees out there. That's a huge issue. Um, I just can't believe these are the things that we're seeing out there. And Will Rogers was exactly right all the time. Um, and the reason why people laughed at him and because what he said was true. Um, I can't imagine if he was analyzing today what's going on. If he was on TikTok, it'd be something else. So, Sam, let's also talk about the Social Security and Medicare funding challenges in the new updates that we've seen just come over as reported by CNBC.com.
Speaker4:
Yeah, it's actually a bit of positive news, a bit of good news, bad news. So the timeline to replenish Social Security is being extended. The federal retirement program said Monday it may not need to cut benefits until 2035. That's one year later than previously forecast because of stronger performance by the US. This new projection is from the Social Security Board of Trustees annual report. It's good news because about 70 million people actually benefit from Social Security, including a lot of you out there listening to our show right now. Um, Martin O'Malley, the commissioner of Social Security, uh, continues to urge Congress to take steps to shore up the program to ensure it can pay full benefits into the future. Uh, 75% of adults age 50 and up believe Social Security will actually run out at some point in their lifetime. It's something that we get a lot of questions about. Ford. We help people put together Social Security maximization reports to help them make the best financial decisions for their retirement. And you Ford your registered social Security analyst, and you're able to really help counsel people and make that very important decision.
Speaker3:
Yeah, I, I got a call from someone who watched our television show in the panhandle of Florida this past week. It was the first week that it aired. And this, this young lady, her name was Wanda, and she was concerned about Social Security not being there for her when she was going to turn on Social Security income in nine years. And, um, and she just wanted to get an analysis and kind of get an idea of what's going on. And, you know, a lot of people have that same sentiment. They're really concerned about Social Security not being there because they keep drawing it down. And, and, um, if you've got questions about how you can maximize your Social Security income benefit, I would encourage you to reach out to us at retirement results.com/plan. Again that's retirement results.com/plan. Just put your information in. We'll get started right away on giving you your own RSA roadmap report. That's kind of a Social Security maximization report. But I wanted to share this with you. It's likely that Social Security isn't going to go away. You could see a 2021, 23, 24% across the board cut in 2035, but you're not going to see likely 100% cut because whatever politicians completely cut out Social Security, create huge problems, huge havoc or, you know, our entire economy and also our society.
Speaker3:
And they likely won't stay in office long after that. So I don't think that Social Security is going to completely go away. It doesn't mean I'm I've got a crystal ball exactly what's going to happen. I don't think anybody thought that the Oasi trust fund was going to be scheduled to be depleted 100% by 2035, and here we are. But at the same time, we've also got about 2.6 workers for every Social Security income recipient out there. That number is going to go down by 2033 to 2.3 per workers for every Social Security income recipient. So that is, you know, cause for concern, concern there. In 1950, there were 16 workers for every Social Security recipient. But at the same time, I feel like we're going to you're going to see Social Security be around, mainly because these elected politicians want to stay in office.
Speaker4:
I completely agree, and if any of you out there listening or looking to maximize your Social Security benefit and even just get your questions answered about Social Security, here's a few things you should know. The longer you wait, the more you receive. So just a quick example, uh, from the Bipartisan Policy Center analysis. Someone who. Is eligible for $2,000 a month at age 67, would instead get $1,400 per month if they claimed at age 62. So it may not be a very good idea to claim as early as possible. If you're looking to get the most money for what you've put in, waiting until age 70 would pay that same $2,000 per month recipient 2480 per month. That's 2480 per month. So if you can take advantage of delaying that benefit, because that is how you can truly maximize your Social Security, retirement experts agree the value of delaying Social Security benefits unless there's a personal reason, like a lack of income or a poor health condition. And Ford, if any of our listeners want to get one of those Social Security maximization reports from a registered Social Security analyst such as yourself, what do they have to do?
Speaker3:
They need to visit Rvusa.com forward slash Srtr. That's RSA. Com forward slash Srtr. Or they can also just reach out to us at retirement results.com/plan. Or they can call us at 1-888-814-0304. That's (888) 814-0304. But on that quick retirement report. Website. It's a sub website of the registered Social Security analysts. Website which is RCC. Com you just go to RCC. Com forward slash q r r. The q r r stands for Quick Retirement Report. And you can just click that Get Started button. And you can build your own profile within the RCC portal for life. You'll have access to this for the rest of your life. And it's a really good idea. We give that access to you absolutely for free because your result driver you want to maximize your income during retirement, and Social Security is part of that income during retirement. And so we want to do everything we can to help you maximize your income. Retirement starts with Social Security. We come back from the break. We're going to talk about Medicare's go broke date and what you can do about it and how it's going to affect you and your retirement. You listen to retirement results.
Come right back upside down. Your turn.
Speaker2:
You're listening to retirement results. And now back to the show.
Speaker3:
And welcome back result drivers I'm Ford Stokes with chief financial advisor I've got Sam Davis our senior financial advisor here with us on the show. Sam go ahead and talk about Medicare's go broke date. We've got an update here from CBS news. And I just want to kind of share at least some of the good news, bad news regarding the Medicare's quote unquote, go broke date.
Speaker4:
Before the break, we were talking about the latest update to Social Security's funding challenges and how they're going to need to likely cut benefits sometime around 2035. On the Medicare side, which is also a government social program, it's government healthcare for those 65 and older. They have a go broke date for its hospital insurance trust fund. This was pushed back five years to 2036, thanks in part to higher payroll tax income and lower than projected expenses. So a bit of good news. Bad news. Good news is the go broke date has been pushed back. The bad news is they're still facing funding challenges. And Medicare is the federal health insurance program covers most people 65 and older and those with severe disabilities or illnesses. Medicare actually covered more than 66 million people last year. And once those funds reserves become depleted, Medicare would only be able to cover about 89% of the cost for patient hospital visits, hospice care, nursing home stays, or home health care. And those can often follow up hospital visits, which tend to increase for it as you get older.
Speaker3:
It's just something to be aware of. Healthcare is going to be one of the largest expenses you're going to have during retirement. We've seen fidelity with their retirement survey. I think it was something like $328,000 for a married couple through retirement, just for health care expenses. That is after Medicare and everything else. Just something to consider there to make sure you've got a good idea on having a plan, whether that's a medigap supplement insurance plan, or having a Medicare advantage plan, you really need to get a plan. And if you want a plan for your retirement separately of Medicare, you can call us at (888) 814-0304. We also work with Bonnie Dobbs and the good folks over at Medicare and other red tape, and they can help you with your Medicare needs. We'll put you in touch with Bonnie. So all you got to do is reach out to us at (888) 814-0304 and their licensing, I think almost all 50 US states, so they can take care of you too. Also maximizing retirements U-shape spending curve. We talked about that at the beginning of the show. Contrary to the common belief that retirement spending is constant, retirees tend to have initially high rates of spending, a dip in the middle years and increase costs towards the end of retirement, forming a U-shaped curve.
Speaker3:
So the goal here is to make sure that you're doing a really good job, at least in the first ten years, um, around retirement. So we talk about the retirement red zone quite a bit. That's the five years before you retire and the five years after you retire. So what are the three phases of this retirement? We're talking about the go go years, the high spending due to active lifestyle and big trips, lots of travel, things like that. Then the slow go years decrease spending as lifestyle becomes less active. And then the no go years spending increases due to health care and long term care needs. So how can you maximize your retirement spending potential? Number one is have a smart vision for your retirement. Understand the personal retirement goals and ensure alignment. Especially, you know, as if you're part of a couple. Number two is manage your expenses. Reducing fixed expenses like mortgages and other debts can provide financial flexibility, which is especially important during market downturns. Number three is have an income plan. Be careful about withdrawing your assets too quickly. Let's try not to exceed that 4% withdrawal rate as this can affect your tax rates and Medicare surcharges. We can help you establish an income plan that includes guaranteed lifetime income solutions. It's a good idea to also protect the income portion of your portfolio.
Speaker3:
Sam and I work with so many folks where they're risking 100% of their money. A lot of them are, and you may be one of us you're driving around right now or you're listening to us on the podcast. You may be one of the folks who are like, you know what? I worked with this wirehouse and they've got me in these dividend stocks and I'm going to be fine. But guess what? You're risking 100% of your assets, and you're taking 100% of your income from 100% of your portfolio. Let me ask you a question. Would you feel better if you were able to take the income you need from only, say, 40% of your portfolio, and also that income source and that source of the assets would not be at risk in the market. If that's more attractive to you. I would encourage you to reach out to us at retirement results.com/plan. That's retirement results.com/plan or reach out to us at (888) 814-0304. That's (888) 814-0304. Sometimes it's tough Sam. You know for people to remember a phone number. But let's just try to make sure everybody remembers retirement results.com or Active wealth.com. And we're happy to help you get started. Sam. What's that next thing that people can do to maximize their retirement spending potential?
Speaker4:
Yeah we mentioned it earlier in the show delay Social Security. So you're eligible for Social Security as early as age 62. But if you actually delay until age 70, that is going to be the biggest tip we can give you if you're looking to maximize your Social Security benefit. So whatever sort of benefit you can expect in the future, whether the government has to cut benefits or not, at some point around 2035, if you want to maximize it. The way to do that is to delay until age 70 and have another part of your income plan. You know, possibly something that we can help you with here at retirement results that can give you the income you need in the meantime until you turn on Social Security.
Speaker3:
Yeah. And then also number five is plan for long term care. If you want to look for ways that you can maximize your retirement spending potential, you want to plan for long term care. Consider long term care insurance or similar products to manage higher costs in later life. Without insurance saving, a significant amount of money is recommended to cover potential long term care needs. A lot of people self-insure on long term care used to be there was over 150 long term care insurance companies out there. Today there's 12. So it's obvious that it's been tougher for those companies to really make it. It just hasn't been as profitable. One of the ways also to self-insure on that is a lot of people just take the equity that's in their home, and they use that to kind of draw down and, and pay for, um, living in a long term care facility. But that really hurts your legacy there, too, because you don't have as much money left over to pass on to your heirs. So but let's say let's go ahead and recap these five items for how you can maximize your retirement spending potential. Number one was have a smart vision for your retirement. Number two is manage your expenses. Number three is have an income plan. Number four is delay social Security.
Speaker3:
And as a registered social security analyst, I can help you figure out the right time for you to take Social Security for you and also hopefully not put too much downward pressure and withdrawals on your portfolios as well. Sometimes you may not want to wait all the way to 70, but it's probably a better idea to get more than $0.70 on the dollar. Um, to take it at, say, 67 versus taking it 62.5. And then number five here is plan for long term care. Those are the five ways that you can maximize your retirement spending potential. And we hope this segment really helped you because I'm for one, really excited about people following these five steps. I want to make sure that one have that smart vision for retirement. Two manage your expenses. Get a good idea of your expenses. Number three is get an income plan if you don't have one already. Four is considered delaying Social Security, at least your full retirement age. And number five is have a plan for long term care. It can't just be well we'll see if I need it or not. 6 in 10 people are going to need long term care. Are you one of the six and ten? Probably. So be careful.
Speaker4:
Yep. And when we come back, we're going to give you that new segment, The retiree of the week. So stay tuned for that. If you are retired you're about to retire. We specialize in working with retirees. You can get in touch with us at retirement results. Com slash plan or give us a call at (888) 814-0304. We always love getting calls from our listeners and we look forward to helping you. Retirement results. We'll be 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.
Where were you when I needed you?
Speaker2:
Are you concerned about rising taxes and how they could affect you and your family during retirement? If you have an IRA balance over $400,000, you could save six figures in retirement taxes that you would be paying during a 35 year retirement. Find out how much you could save today by scheduling your no obligation Roth conversion consultation with Ford Stokes of retirement results. Learn more and schedule an appointment at retirement Results.com Investment Advisory Services offered through Brookstone Capital Management LLC, a registered investment advisor. Visit retirement Results.com for more information.
Speaker1:
Do you want a steady stream of income for retirement? Then it's time to consider annuities. I'm Matt McClure with the Retirement Radio Network powered by Amira Life. Gone are the days when most employers offered pensions with guaranteed lifetime payouts to their workers. But what if I told you that you can build your own personal pension? It's possible with an annuity. An annuity is a financial product that provides a series of regular payments to an individual over a specified period of time, often for the rest of their life.
Speaker3:
There are several options for you to consider when choosing an annuity. Be confident in knowing that there is an annuity out there that can meet all of your needs.
Speaker1:
Ford Stokes is founder and president of Active Wealth Management and author of the book annuity 360. There are several different types of annuities, including fixed, variable, and fixed indexed.
Speaker3:
A fixed annuity offers a specific guaranteed interest rate on their contributions to the account. A fixed indexed annuity is an accumulation based product offered by an insurance company. The growth of your fixed indexed annuity is dependent on the performance of a chosen stock market index, but your money is not actually invested in this index. This offers you great growth potential and exceptional protection for your investment.
Speaker1:
While each can provide tax deferred growth and a lifetime income stream, variable annuities put your principal at risk in the market.
Speaker3:
If you are currently investing in a variable annuity, your funds could be in serious trouble if the market experienced any downturns.
Speaker1:
With so many possible choices to consider, it's essential you speak to a financial advisor or professional to help you make the best decision for your future. So are you ready to consider an annuity as part of your retirement plan? It's a key question to consider as you approach what should be your golden years with the Retirement Radio Network powered by Amira Life? I'm Matt McClure. 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.
Speaker2:
Thanks for listening to retirement results. Schedule your complimentary financial consultation now at retirement results. Com or by calling toll free at (888) 814-0304. That's (888) 814-0304.
Speaker3:
Welcome back. Result drivers I'm Fort Stokes chief financial advisor at Sam Davis here with us our senior financial advisor. And Sam you've got our retiree of the week and it's a really interesting one. It's somebody I grew up watching. He's had a great run.
Come Hollywood. It's America's game, a show the. Enjoy.
Speaker4:
Yeah. This week's retiree of the week is Pat Sajak, the host of Wheel of Fortune or should I say, recently became the former host of Wheel of Fortune. Pat Sajak hosted his final episode of Wheel of Fortune on Friday. That's June 7th after a 40 year run. Four decades of those word puzzles and spinning the big wheel. In a recent interview, Sajak shared feelings of wistfulness about his departure. And that makes sense. A lot of people are, you know, a bit, uh, you know, they're a bit hesitant to retire because they really enjoy what they do. But he announced his retirement a year ago, and he's really had time to accept that and enjoy his last year as host. Um, he noted the show's role in pop culture and his significance in many viewers lives. I mean, Ford, I remember being a young kid watching, uh, Wheel of Fortune at 630 after dinner on many weeknights and, um, after retirement. Pat's hoping to look forward to Simple pleasures. He wants to do crossword puzzles. I thought that was funny that he said that and spending more time with his family. He also hinted at enjoying future grandchildren. I know he has a daughter and so we wish the Sajak family all the best. It sounds like there's a good possibility that Ryan Seacrest is going to be the new host, and Vanna White will continue, at least for the next few years. Um. Pretty amazing. I can't believe Vanna White was actually doing Wheel of Fortune before Pat, and she's going to continue to do it after him. Um, she's remarkable as well. Um, Pat Sajak is our retiree of the week. Um, and we want to give future retirees of the week in, uh, episodes to come. So we hope everybody likes that one.
Speaker3:
Yeah, that's a good, good, great segment. A happy retirement, Pat. And, um, God, what a great gift to get Ryan Seacrest. That's a great gift. And it just makes sense. I mean, it just just makes all the sense in the world. And also just shout out to Vanna White for having such a long run and continuing her long run. That's pretty impressive. But again, happy retirement path. That's good stuff. You can't take it with you, right? So we might as well retire and enjoy his money. So that's great.
Speaker2:
Want to know where your hard earned money is going. It's time for an inflation demonstration.
Speaker3:
Now, the next one, we've got an inflation demonstration. We're going to talk about the high cost at the grocery store. Americans paid roughly 25% more on groceries and dining out this March than they did in January of 2020, outpacing the rate of general inflation. In March 2024. Consumers spent 95% more for carton of eggs, 33% more for a pound of ground beef, and 22% more for a gallon of milk than they did before the pandemic. The Department of Agriculture calculates that the average American spent 11% of their disposable income on food in 2022, the highest amount in nearly four decades. Grocery prices rose over 10% that year alone, the largest annual increase since the 1970s. It's not just that prices are going up. Food products are getting smaller. In the phenomenon that pundits have named Shrinkflation, another report from the Groundwork Collaborative finds that changes in package size account for 10% of all price increases on key household expenses, including snack foods. It's interesting that that's what they're doing. Um, uh, it's just it's a it's amazing to me. They'll figure out ways to make their profit and squeeze the profit out. Americans who try to save money by heading to the drive thru or facing a new reality to the study of the country's biggest fast food brands by finance buzz found that all of them menu prices have outpaced general inflation rates. It's time to get serious in 2024. This is an election year.
Speaker3:
There's already so much uncertainty in the world affecting retirees and pre-retirees. Don't wait until you're ready to retire to start planning for your retirement future. I would encourage you to go ahead and reach out to us at (888) 814-0304. That's (888) 814-0304. Or reach out to us at retirement results.com/plan. That's retirement results. Com forward slash plan and we will plan for your successful retirement. We'll help you. We're going to give you five really neat things. Number one is going to be a portfolio analysis. You're going to understand the expense ratio you're paying which is the hidden fees that are in your portfolio. We're also going to help you understand the risk you're taking within your portfolio. And that portfolio analysis as measured by standard deviation. We're also going to help you understand the correlation of your assets as a whole. Then number two is we're going to give you a retirement income slash Social Security maximization report. Absolutely no cost to you. Number three is we're going to give you a financial plan Girh 95th birthday without our plan being involved at all, just with your current plan. And so that way you can understand, hey, as your plan or you're on the right path to be successful right now with just your existing plan. We take to account your expenses, your social security, your assets, and the the allocation of your assets and your expense ratio and your standard deviation and your average rate of return since 2007, let's say 20 plus years.
Speaker3:
Right. And so, um, it's you know, obviously 2007 is like 17, 18 years ago, but we're going to give you a full 20 year view of what that looks like. Then 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 do the same thing, but we're also going to include a strategic Roth ladder conversion plan. So you can delete the IRS from being your partner in retirement. If that is of interest to you. I would encourage you to reach out to us at retirement results.com/plan. And again we will give anybody a free for one K or IRA review. It's a $1,500 value to do all this. Different types of financial review plus Social security maximization reports, absolutely no cost to you and a strategic growth ladder conversion plan. We're going to do all of that free of charge. No charge to you, no cost to you. All you got to do is reach out to us at retirement Results.com. You can also click that schedule a consultation button in the upper right corner. And we're happy to get get in touch with you and you'll get booked directly into our calendar. So, Sam, you've got a, um, kind of a header that you want to talk through about, kind of who wants to be A41K millionaire.
Speaker4:
Yeah, this is some interesting news. A record number of Americans with a 401 K retirement savings plan. Many of you out there listening to this show right now may have a 401 K yourself, and a record number of Americans have saved at least $1 million inside of their 401 K at the end of the first quarter in 2024. And this is according to a recent update from fidelity. The company has first reported by Bloomberg, found that the number of 401 K millionaires reached an unprecedented 485,000 between January and March. But for this is something that we want people to understand that the IRS is your partner inside your 401 K or any other tax deferred retirement account. So it could be a traditional IRA, you know, these people for it at 485,000 people now have $1 million or more in their 401 K. The IRS and the folks in Washington DC haven't gotten their cut of that money yet. Not to mention you're going to pay whatever your state tax rate is as well. And here in the state of Georgia, we have that. And every state has their own laws pertaining to to state income tax. But um, that tax has not been taken out yet. So let's just say you've got $1 million in there. I mean, maybe only 750,000 of that is going to be yours after you pay the taxes.
Speaker3:
It's a real problem. You really need to understand that you've got a partner in your retirement accounts, and it's the IRS, the kind of partner you don't want. You really want to consider doing everything you can to get money moved from your IRA to your Roth IRA. It's a really good idea, and you want to do it a little bit at a time to try to minimize the tax rates. Because whenever you move money from your IRA to your Roth IRA that same year, that is considered ordinary income tax for that year, and you really need to make the tax payments on it within the quarter that you do it. So just something to be aware of as well. When we come back from the break, we're going to talk about, you know, June is annuity Awareness Month. We've got a really important problem solver that a lot of people need to hear and understand the differences, because not all annuities are made equal. Um, you want to avoid the variable annuities for sure, but also you want to inspect what you expect about the underlying indexes within your fixed indexed annuity. If you're if you have one of those and if you've got a fixed indexed annuity that's over five years old, you really should reach out to us to get that annuity review. We're happy to help you do that. You can get that annuity x ray absolutely at no cost. All you got to do is reach out to us at retirement results. Com come right back. We're going to have an important problem solver for you to talk more about the differences between fixed indexed annuities variable annuities and which ones to really select and what to do when you are buying an annuity. Make sure you inspect what you expect about that underlying index.
Speaker2:
Miss. Part of today's show retirement results is available wherever you listen to podcasts and online at retirement Results.com.
Too long little point and going on.
Speaker1:
When it comes to retirement planning, focus more on income than building a big nest egg. I'm Matt McClure with the Retirement Radio Network, powered by Amira Life. It may sound counterintuitive, but that big nest egg number you probably have in your head means a lot less than the income you'll have each month in retirement.
Speaker6:
The math has all changed here, but the bottom line is time is your superpower. Save as much as you can.
Speaker1:
Nbc news senior business correspondent Christine Romans recently said on The Today Show that you should not just rely on Social Security in your retirement years.
Speaker6:
Social security alone is not likely to support you in the manner to which you're accustomed, right? You want to wait as long as possible to get that maybe 70. If you wait till you're 70 to collect Social Security, you'll get the biggest check.
Speaker1:
And she says, contribute to your retirement accounts early and often.
Speaker6:
So this is from fidelity. They say at age 30 you should have one time your salary in a retirement account when you're 30. So think about what your salary is at age 30, and that's how much you should have in your entire retirement account. By 50 it should be six. This is where I start to freak out, because I know a lot of people can't and don't do this by age 67, it should be ten.
Speaker1:
Times a personal pension. Using a fixed indexed annuity is also a great option for many pre-retirees and retirees to consider. It offers protection from market volatility and a guaranteed stream of income that will last the rest of your life, no matter how long you live. Having a big nest egg may sound nice, but focusing more on income will set you up for success in your golden years. So, do you know where your paychecks and play checks will come from each month when you leave the workforce? That's a key question to consider as you plan for what's ahead with the Retirement Radio Network. Powered by Amira Life. I'm Matt McClure.
Speaker2:
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.
Speaker3:
And welcome back result drivers to retirement results I'm Ford Stoker chief financial advisor I've got Sam Davis here with us. Just want to kind of walk through this important problem solver.
Speaker2:
It's time for this week's problem solver.
Speaker3:
I had. A 68 year old female who's owned an annuity for five years. She actually owns two annuities. One was a variable annuity, and we got her out of that annuity as soon as we met her, because that was charging her 5.4% a year in all the fees that she was paying. It's usually a 3 to 6% on variable annuities. So you want to stay away from variable annuities. We call those variable don't do annuities. So we try to stay away from variable annuities. We don't sell those here at Active Wealth Management. Number two is she had, you know, a $400,000 fixed indexed annuity. And. For the for the last two years before we met her. The two year protection period actually didn't generate any income at all because she was in an index that was a volatility index that was heavy on bonds. Obviously, the 2022 market year, where the market did very poorly, was included in those last two years. And. She's had zero rate of return over the full five years because she's been in a volatility index, was heavily laden with bonds. That the proprietary index unfortunately just underperformed because bonds have underperformed. What I've encouraged you to do is inspect. You expect about the indexes you've got linked within your portfolio on your fixed indexed annuity. You could also take it where. You can split them. You can. You go 5050, you go 50% one index and 50% with the other if you want.
Speaker3:
One of the ones that I really like is the BNP Paribas Global Factor Index. It does rebalance. It does include tactical asset allocation, but it's not heavily laden with bonds. It's more dealing with equities and ETFs and things like that. That gives you a greater chance at a greater rate of return and not erosion. Um, also be very careful if you're investing into a fixed indexed annuity with a fixed rate, because that some of those contracts, contract elements can see where it will draw down to zero. The but you're guaranteed income will continue. Well, we like to do is stay invested into an annuity that's got an index that is growing and outpacing our withdrawal rate, so that our original principal and premium doesn't draw down to zero between 14 and 20 years. You want to keep the actual account value growing and the income value growing both like commensurately. You want to help them keep growing. And also therefore you're going to have a greater. Income payout as well. So the problem that I'm presenting today is you've got a young lady who has invested into a fixed indexed annuity. It's 40% of her million dollar portfolio. She's a widow. And she got zero growth in five years. From that annuity because, she adds, using the wrong index, it just didn't work. And she was heavily laden with a heavy bond type of index, thinking it was going to be safer.
Speaker3:
The problem is bonds have underperformed. Now she didn't lose principal. That's great news. But the bad news is 0% growth in five years is is a problem. The good news is the principal is protected and her income payout factors have grown 0.1% each year that she's owned the annuity. But she was ready to go ahead and move on and get a 20% bonus and invest that money into a new annuity with a better performing underlying index. One index that we really like is the nationwide peak ten. It offers a 20% immediate bonus that can help make up the hole that's been left by any surrender charge you've got from a previous annuity. And also we like invest getting that 8% guaranteed simple interest growth on the premium invested. That's really good. And then also there's a 340% participation rate in the underlying index, which in this case happens to be the BNP Paribas Global H factor index that basically averages between 4 and 6%. Last year it did 6.27% times 3.3. It starts adding up to real money. It's real growth on your money. They have two year protection periods, so they don't give you the compound interest between year one and year two, but they're giving you 3.3 times how that index performs. If you've got questions about this and you want to learn more about how can I get access to this, how can I see an illustration to understand how the income portion of my portfolio could grow like this and also generate more income, then I would encourage you to go ahead and reach out to us at retirement results.com/plan.
Speaker3:
That's retirement results. Com forward slash plan. Waiting two more years, this young lady is going to be looking at generating over $40,000 in income from her $400,000 annuity. Two years from now or starting in year three. That's. Over a 10% withdrawal rate. Over $400,000 premium. That's a lot more attractive than the 4% typical withdrawal rate that we recommend for if you're just taking money out of your overall portfolio. She's also not risking 40% of her portfolio. She's she's locked in the income portion that she needs. That plus Social Security. She is going to get her there because she's at $3,000 a month in Social Security income because she's worked her whole life. I would just tell you, do everything you can to inspect what you can expect about the fixed indexed annuities that you're investing in. Avoid variable annuities at all costs. If you want to consider a merger a multiyear guaranteed annuity for a shorter run, you can go ahead and do that. We've got a merger that's from HCL Life Insurance that's paying out 6% over the next three years. Compounded interest. You're locking up your money only for three years. So that's a good idea too. But this nationwide peak ten has got an index that's really performing.
Speaker3:
And I would encourage you to go ahead and reach out to us and get an understanding of what's going on. If you've got an annuity that's been underperforming. Go ahead and reach out to us. And we want to see what we can do to try to move money into the nationwide peak ten. Or if you want to just have an accumulation product, we can move it into the Security Sentinel Life app. We've also got some Fidelity and Guaranty annuities that are really good on the accumulation side that we've been able to help some people with. Go ahead and reach out to us at (888) 814-0304. I don't want to confuse you in this segment. We've talked a lot about annuities and, um, the allocation of the performance of the indexes. Bottom line is, if you haven't seen a lot of growth in the account value of your annuity, you owe it to yourself to reach out to us at retirement Results.com. And we'll get started in trying to give you that full annuity x ray to help you understand what's going on with your annuity, and see if we can get you in a better product. And again, please stay away from variable annuities because they come with 3 to 6% in fees. And they also your principal is at risk in the market because it is a mutual fund wrapped into an annuity chassis. It's the final.
Speaker2:
Countdown. So let's recap what you may have missed. It's the final countdown.
Speaker3:
On today's show, we talked about how to maximize your spending power in retirement. We went over Social Security and Medicare. We gave you the updates from Social Security and Medicare, looking at the Oasi Trust Fund living and lasting up till 2035, with a potential 21% across the board cut. Also, Medicare continues to go out to 2036. We also talked about the retirement spending as a u-curve. You're going to spend a lot of money, likely in the in the first five years of retirement, you're going to be traveling a lot. Then that's in the go go years and the slow go years. You're going to probably not spend as much. And then the no go years, you're going to spend a lot of money in in health care costs and things like that. So that U-shaped curve and spending, you need to be aware of that during retirement. We also gave a shout out to Pat Sajak with Wheel of Fortune and congratulating him on his retirement as our retiree of the week. We also had significant updates regarding inflation demonstration. Uh, what I couldn't believe is 95% higher for eggs. That was something else. And then also just we went through a really important problem solver this week for Annuity Awareness Month, which June is Annuity Awareness Month.
Speaker3:
And you need to be aware of the underlying indexes that you've got with your with your fixed indexed annuities. You also need to understand you need to avoid variable annuities where you can. And if you can, try to move those over with a 1035 exchange, a tax free exchange into a fixed indexed annuity from a variable annuity. Take the principles there and reduce the fees. Because you know, with fixed indexed annuities, your fees are right around between 0 and 1%, give or take, uh, where as with variable annuities, you're looking at 3 to 6% in average annual fees, which is just crazy. Um, because it is a mutual fund wrapped into an annuity chassis. So go ahead and reach out to us at (888) 814-0304 to get your annuity x ray, get your 41K review. And also just get your financial plan your 95th birthday. We're happy to help you, and we look forward to helping you next week to better plan for a smart retirement and a successful retirement right here on retirement results. Have a great week everybody.
Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.com Investment Advisory Services offered through Brookstone Capital Management, LLC, BCM, a registered Investment Advisor, BCM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, if any exist, please refer to our firm brochure, the ADV Two.a, page four for additional information.
Speaker1:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.
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