12.17.22: Audio automatically transcribed by Sonix

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

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

Producer:
Welcome to the Active Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs first. He’ll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax-efficient investing. And now your host, Ford Stokes.

Ford Stokes:
And welcome to The Active Wealth Show Activators I’m Ford Stokes your chief financial Advisor. I’ve got Sam Davis with us here as our executive producer. And welcome to The Active Wealth Show. We’re so glad you’re with us. We’re so glad to have all the activators out there. If you’re wondering who an activator is, it’s somebody who wants to build a tax-efficient, fee-efficient and market-efficient portfolio so they can have a successful retirement, so they can protect and grow their wealth in a consistent way. Also, somebody that wants to generate retirement income, even tax-efficient retirement income, and that, believe it or not, is actually possible. And some of them want to kick the IRS out of being their partner with their retirement accounts. And we can help show you how to do that, too. On this week’s show, we’re going to have a quote of the week. You’re going to love it. By the way, important updates for the end of 2022. We’ll have a market update here in this first segment. Also, what are RMDs and how you can avoid them? Also, how a Roth ladder conversion can become the secret weapon in your retirement plan. We’ve also got our financial checklist to jumpstart your new year. I think you’re really going to want to stick around and listen to that one. Also, you can always reach out to us to you can send me an email at Ford at ActiveWealth.com, and we’ll get that checklist to you. And we’re going to have an inflation demonstration talking about how inflation is affected the 12 days of Christmas. That’s a that’s going to be awesome. I love this one. And then how much Americans are spending on Christmas trees this year and also this week in history. We got a lot to cover. But first, let’s go over the financial wisdom quote of the week.

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

Ford Stokes:
So, Sam, why don’t you read this quote? I want I want you to I want the listeners to hear a better reader talk about this quote of the week. It’s pretty amazing.

Producer:
Yeah. This quote of the week comes to us from a native Oklahoman. I’m from Kansas. Oklahoma’s not too far. I’ve got some family down there. So this is a good one. The difference between death and taxes is that death doesn’t get worse every time Congress meets. And that comes to you from Will Rogers.

Ford Stokes:
Amen. He’s exactly right. And pass the turnips. could not be more right. Will Rogers was an American performer, actor and social commentator. He’s known as Oklahoma’s favorite son. As an entertainer and humorous. He traveled around the world three times, made 71 films, and wrote more than 4000 nationally syndicated newspaper columns. By the mid 1930s, Rogers was hugely popular in the United States for his leading political wit. It was the highest paid of all Hollywood film stars. It’s also interesting. He was highly critical of the government and taxes and everything else. And then, Sam, you told me I didn’t realize he passed away in a car in an airplane crash.

Producer:
Yeah. You know, he did travel the world quite a bit. And in the 1930s, 1935, I believe, he passed away in a plane crash.

Ford Stokes:
That’s awful. I mean, everybody can surmise what they want from that. But goodness, I mean, what a great quote. It’s so true. Every time Congress meets taxes and everything else gets worse because they figure out how to make more money off the taxes. And now, Sam, let’s go ahead and give everybody a market update.

Producer:
Your active wealth market update.

Ford Stokes:
So the Fed slows interest rate increases with a 50 basis point hike. They went up 70 basis points last month, but signals that more could could be on the way. Fed policymakers project higher peak interest rate as high inflation persists. The Federal Reserve on this month raised its benchmark interest rate by 50 basis points, or 0.5%, slowing its campaign to cool the economy amid early signs that stubbornly high inflation is finally starting to ease. The widely expected move puts the key benchmark federal funds rates at a range of 4.25% to 4.5%, the highest since 20. At 27. So 22,007. From near zero in March. It marks the seventh consecutive rate increase this year. And places interest rates in firmly restricted territory. While the rate hike is slightly smaller than the 75 basis point increases. As I said before, they’re approved the last four meetings it is. Still large by historical standards in addition to the large rate hike fed. Officials laid out an aggressive path of rate increases for the next year. New economic projections released after the two day meeting show that policymakers expect rates to rise to 5.1% in 2023. Which was far higher level than the 4.6% rate officials last projected in September, according to the Federal Open Market Committee Committee’s dot plot of individual members expectations. So that’s the FOMC. If you’re if you’re an acronym LOVER, the committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time, the FOMC said in its statement.

Ford Stokes:
So again, they went up and of course the markets went down when they went up. And because the cost of capital continues to rise and that will affect corporations and also when they’re trying to refinance bonds again, guys, I want to make sure everybody understands the go-forward price-to-earnings ratio on US stocks is right around between 22 and 23 times earnings. The go-forward price-to-earnings ratio of US bonds. Is over 150 times earnings and a go forward p e ratio. I would encourage you strongly to do everything you can to try to limit the exposure that you have to bonds. Try to get better at that. Don’t just be like, oh, thank goodness I’m in bonds because that’s like a melting ice cube strategy, because the bonds you currently hold are going to be worth less when interest rates go up. You really should try to get aligned with a financial product that would allow you to protect and grow your assets and also get market like gains and then also give you income. And a fixed indexed annuity can do that.

Ford Stokes:
I would encourage you to avoid investing in any variable annuity because those come with 3 to 6%. In fees and on an annual basis, it’s a pretty big drag on how your assets do and how that how your principal performs. But also with a variable annuity, it’s your account value is at risk because it is a mutual fund wrapped into a an annuity chassis. I would tell you that a fixed indexed annuity is just right. It allows you to get market like gains because the ten year US Treasury is going to throw off interest rates and interest each year. And right now the, you know, the ten year US treasuries over 4.2% right now. That’s remarkable. Because that allows them to say, invest 100 grand into a fixed indexed annuity. You’ve got $4,200 to work with for them to buy options in something like the Credit Suisse Raven Pack or the Credit Suisse Momentum or the S&P 500 or the Russell 2000 or the Wilshire 5000 or the NASDAQ 100. All those different indices, there’s hundreds of indices that are tied to different annuity products. And you usually have a lot of choices, and we can help you with those choices. If you want an annuity x ray, I would encourage you to do is go ahead and reach out to us at ActiveWealth.com that’s ActiveWealth.com and you can click that schedule a consultation button the upper right corner you’ll meet directly with me I’ll walk you through all of your different options or you can give us a call.

Ford Stokes:
Deborah and her team are standing by. All you’ve got to do is give us a call at 770 685 1777 again 770 685 1777. And we look forward to talking to you and helping you. And speaking of income, you know, the Social Security Administration came out with their cost of living adjustment for 2023, which was 8.7%. Again, reminder, this combined with the 5.9% from last year’s cost of living adjustment or COLA, the two year increase on total inflation that they say is going on is 14.6. Obviously, it’s going to be higher than that. So you’ve got to have a plan, you’ve got to have a plan for income. You also got to have a plan to grow your retirement income over time so you can keep pace with inflation. Also, if you can hear the sound of my voice and you’re considering whether you should take a lump sum or just turn on your pension, please do me a favor and feel free to give us a call at 770 685 1777. We’re happy to help you with that analysis. We can help you whether you should take your lump sum or take the annuity payment, but and your pension payment.

Ford Stokes:
But most pensions are funded by a product called a single premium immediate annuity because you want to get immediately paid, you know, the next month after you retire. I will tell you, those products are really good at doing one thing, which is paying your money back. They’re not great at growing your money, so be very careful about taking your pension. You may want to consider reinvesting and taking that lump sum and getting a 10 to 20% immediate bonus on your money within the income account on some annuities and get a higher payout as well. Also, you get mortality credits towards that so you can get more than you would get if you were just taking 4% out of your IRA. As an example, we want to help you have a better lifestyle during retirement. All you’ve got to do is pick up the phone and give us a call at 770 685 1777 or visit ActiveWealth.com. We come back from the break we’ve got a lot to cover here we’re going to talk about RMDs and how you can eliminate those and also how you can delete the IRS from your retirement accounts. We’re so glad you’re with us. You’re listening to Active Wealth Show right here on AM 920. The Answer.

Charlie Kirk :
Charlie Kirk here. If you’re concerned about your investments, rising taxes from the Biden administration, then I encourage you to listen to The Active Wealth Show hosted by my good friend Ford Stokes right here on AM. 920 The Answer. Listen to The Active Wealth Show Saturdays at noon and Sundays at 11:00 AM. The Active Wealth Show right here on AM 920 The Answer.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of Active Wealth Management. Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit ActiveWealth.com to learn more and schedule an appointment. Thanks for listening to the Active Wealth show and subscribing wherever you listen to podcasts.

Ford Stokes:
And welcome back Activators the Active Wealth show. Ford Stokes, our Chief Financial advisor, and we’ve got Sam Davis, our executive producer, with us. And now let’s talk about the new tax brackets for 2023. Let’s give you a quick reminder. So the tax bracket, that is the 24% bracket, which is a pretty popular bracket, is 190750 to $364200. That is the top end of the of the 24% bracket. When you go over $364,200 for married filing jointly. Guess what? Then you’re paying 32% in our progressive tax system. The four married filing jointly. The 22% bracket is actually 89,450, but not over 190,007 50. So that’s interesting as well. So if you if you’re over 190,007 50, you’re going to pay 24% instead of 22. And those are the brackets that we tried to bump up against for folks that are trying to do Roth ladder conversions, also for the individual filer. The 24% bracket goes from 95,003 75, but not over 182,100. So let’s say you’re making $100,000 in retirement. When you include the money, you’re withdrawing pensions, Social Security, all that stuff. You’ve still got $82,100 that you could do a conversion. You could convert from your IRA to your Roth IRA. So that’s important to know. Also, go back to the married filing jointly if if you’re want to convert it 24% taxes are lower. What you can do is let’s say you’re making $200,000, but you still want to and you’re still working as a married couple filing jointly.

Ford Stokes:
What you want to do is you want to take the $164,200 that goes up to the 364 200, and you want to take that money and take it from your IRA and put it into your Roth IRA. And delete the IRS out of being your partner without $164,200. The best way to implement these, and we’ll talk about it even more. But the best way to implement these is use taxable dollars from an investment account or a savings account or checking account. Pay the taxes using taxable dollars and move money from your IRA to your Roth IRA. Dollar for dollar. So as your let’s say your IRA goes down $164,200, when you convert, it goes up $164,200 in your Roth IRA. Another hint here is, especially when you see market downturn quickly and sharply after a 50 basis point increase in the Fed rate from the Federal Reserve Bank that was announced this week. What I would encourage you to do. Is to try to move some of those assets over in kind and let those grow back in your Roth IRA. If they’re depressed now, keep those same, the same, keep those investments the same and don’t. You know, liquidate those assets and turn them into cash and then put it in your Roth IRA. Just move those assets over and I think you’ll be in a better spot. All right. We get a lot of questions about what are RMDs Well, RMDs stand for required minimum distributions.

Ford Stokes:
That’s the acronym RMDS or the acronym for required minimum distributions, required minimum distributions from employer based retirement plans and traditional individual retirement accounts. Iras will be due by December 31st for most people who are 72 and older. These distributions are taxable. Rmds are for tax deferred accounts, like for one case or traditional IRAs. You don’t pay taxes on your account contributions or earnings until you take withdrawals. When you start when you turn 72 years old, because the US government, they want to start getting their taxes, you must start taking RMDs every year, starting at age 72, with one exception. You must take your RMD by December 31st. The exception is when you turn 72. You have until April one of the following year to take your RMD and pay taxes on it. Years ago, Congress determined that it would give people a three month grace period on their first RMD, but you’ll also have to make another RMD by December 31st of the same year, in effect making two RMDs in one year and possibly pushing you into a higher tax bracket. We can help you manage your distributions in an efficient way. All you’ve got to do is visit ActiveWealth.com and click that schedule a consultation button in the upper right corner. If you have questions about RMDs and you have questions about how you can manage your accounts, I would encourage you to pick the phone up and give us a call.

Ford Stokes:
770 685 1777. We’re happy to help you also. Rmds are based on the IRS life expectancy tables. For example, at age 72, the average person is expected to live another 27.4 years. If you don’t take any distributions or if the distributions are not large enough, you may have to pay a 50% excise tax on the amount not distributed as required. The largest penalty in the IRS tax code, I want to repeat that is the largest penalty in the tax code for missing your RMDs and paying the taxes on your RMDs. And again, if you’ve got questions about RMDs and all that stuff, I would just encourage you to reach out to us at ActiveWealth.com. Also, if you want to know how to say goodbye to RMDs and kick the IRS out of your retirement plan, it’s just like I just said earlier in this segment. It’s literally trying to implement a Roth ladder conversion plan. A lot of people well, I don’t know if it works for me. Am I too old or, you know, I just now retired. Is it is it a good time? Absolutely. It is a good time. If you just retire to start implementing a Roth ladder conversion plan for sure. Well, I’m still working. Should I still do it? Believe it or not, it is a great time to bump up against that top of the 24% bracket at $364,200 that we talked about in this segment.

Ford Stokes:
It is a great time to do that because it would be great if you can just whittle it down little by little. A lot of the clients that we have and we have a lot of them, the number one thing they say is, Hey, you know, the best thing about meeting you forward is we started our Roth Ladder conversion plan earlier and we got it done, or at least we started it and implemented it. That is something to really consider. And the best way to get started is just visit ActiveWealth.com. We’ll help you do that. But here’s what you can do. You could literally save six figures during retirement by implementing a Roth ladder conversion plan. If you have over $400,000 in your IRA or for one K or for two, three, B or Sep IRA. Let me ask you a question. Do you think taxes are going to go up or down in the future? More than likely, you think they’re going to go up like the rest of us. Most people believe that taxes will be higher in the future. So you may want to consider a strategy that kicks the IRS out of being your partner in retirement. Like we said a couple of times on the show already. You want to reduce your future tax rate hike risk by implementing a growth ladder conversion. Also, smart retirees diversify their money into different tax buckets, tax deferred, taxable and tax free.

Ford Stokes:
Believe it or not, you can get to tax free out there. Also, there’s only two types of tax free investments available to Americans today truly tax free. And it is life insurance and it is Roth IRAs. A lot of people say, well, hey, wait a second, Ford, what about muni bonds? Yeah, muni bonds are tax free, up to a point. But but interest generated off of municipal bonds contribute to Medicare surcharges and additional taxation on your Social Security income benefit. So, by definition, muni bonds, municipal bonds are not considered truly tax free. They may be federal income tax free, state income tax free, but they are going to contribute to more taxes and more fees for you with Social Security and Medicare. During your retirement. So that’s something we want to avoid, right? And also, would you be interested in generating tax free income during your 30 plus year retirement? If you are interested in that, we’d love to talk to you. We have proven and legal strategies to help you do just that. Bottom line, it’s a growth ladder conversion or it’s investing in an index universal life policy. Those are our top two. The market is down this year, so it’s an opportune time to convert your tax deferred IRA funds into a Roth IRA. Again, trying to move those assets over from your IRA into your Roth IRA in kind. Don’t liquidate them.

Ford Stokes:
And hopefully you’ve got an extra account, whether it’s checking account or investment account or savings account, or you’ve liquidated a rental property and it’s just sitting in your checking account or you’ve or you’ve downsized and you have extra money left over from the house. And we have a lot of clients that are like that. You ought to use the taxes, you have, the money, you have to pay the taxes on the money that’s going to move from your tax deferred bucket into your tax free bucket. So you’re going to take taxable dollars in the taxable bucket of money that you have and you’re going to end up paying the taxes on your tax deferred money as it moves over into your tax free bucket. And you’re going to wait five years from the time you implement that Roth ladder conversion and you’re going to get access to the principal and the gains tax free at no cost to you. So we think that’s a really big deal. And let me ask you, why would you continue to pay ordinary income taxes decades after you stopped working? I don’t think that’s a really good idea. I think there’s a better idea out there. Also, when we come back from the break, we’re going to help you jumpstart your new year with a financial checklist that is absolutely great to follow and to implement. Thanks so much for listening to us on The Active Wealth Show. We’ll be right back.

Charlie Kirk :
Charlie Kirk here. If you’re concerned about your investments, rising taxes from the Biden administration, then I encourage you to listen to The Active Wealth Show hosted by my good friend Ford Stokes right here on AM 920. The Answer. Listen to The Active Wealth Show Saturdays at noon and Sundays at 11 a.m. The Active Wealth Show right here on AM 920 The Answer.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of Active Wealth Management.

Producer:
We have Ford Stokes, author of two important personal finance books, Annuity 360 and Taxes are on sale here on AM 920 The Answer As the host of the Active Wealth Joe Saturdays at 12 noon and Sundays at 11 a.m.

Ford Stokes:
And welcome back activators The Active Wealth Show. I’m Ford Stokes chief financial advisor. Got Sam Davis here with me our executive producer. And we’re talking about how to jumpstart your new year with this financial checklist. And Sam, I’m going to ask you to go through each one and I’m going to talk about the impact and how that can benefit our listeners.

Producer:
Yeah, absolutely. So this is a financial checklist that we can get in your hands. All you got to do is visit ActiveWealth.com, send us a message there or give us a call at 770 685 1777. We can get you a list once you just give us a call or you can send forward an email at Ford@ActiveWealth.com. Just get in touch with us. We’ll get this list in your hands. And the first item on this list for to jumpstart your new year is simple. It’s pay off your credit card balances.

Ford Stokes:
Yeah. I mean, you may want to minimize all debts starting with the highest interest rates first. I mean Dave Ramsey talks about this. I think he he talks about, you know, the credit card waterfall, if you will. And so what you do is you pay off the highest interest credit cards first and then you go to the next highest interest rate cards. But what you do is you you pay the most you can you pay the minimums on the other. And as you pay off each one, you check the box and then you go to the next lowest interest rates so you can pay them off faster. Most credit cards have APRs of 20% and up, and I think that’s highway robbery because it’s difficult to make 20% in the market. It just is. And I would just encourage everybody to try to pay their credit card balances off. That’s one of the big keys. If you think you’re ready for retirement or not, you really shouldn’t be carrying credit card debt if you’re in that retirement red zone, which is five years before you retire in five years after.

Producer:
Yeah. For I think that’s a great idea. My recommendation is always whenever you get a paycheck, first thing you should do is go over to your credit card statements and make sure that those are at zero or as close as you can get to zero. Because you’re right, with those high percentage rates that can you can rack up some debt pretty quick.

Ford Stokes:
Absolutely.

Producer:
Number two on our list to jumpstart your new year, maximize your tax bracket with a Roth conversion forward. We talked about this a little bit already, but how can the activators maximize their tax bracket?

Ford Stokes:
Yeah, you’ve kind of been the guy that kind of brought that to the forefront. You’re like, everybody really needs to maximize their tax bracket when you’re doing Roth conversion. So here’s what Sam was talking about. So if you’ve got $364,200 or 190,007 50, that’s I mean, that’s the top end of the 24% bracket. So let’s say you’re making 100 grand for a single filer or 200 grand for a married filing married couple filing jointly. That’s probably on average. Right. Obviously, 200,000 is a lot for a family household. But you’ve got let’s say you’re making 200,000 married filing jointly. You can go up to $164,200 to maximize your tax bracket. In other words, do the conversion, maximize the benefit of that by deleting the IRS from 164,200 in all the way up to that 24% bracket? That’s how you maximize it. There are no RMDs with a Roth IRA if you already. I paid the taxes, Uncle Sam. Already has received his cut. He’s already gotten the money that he was due. You will want to complete your Roth conversion before age 72 when RMDs kick in, because here’s the deal, folks. You know, when you turn 72 years old and you’ve got to start taking 4.14% out of your IRA. Guess what? That your RMD conversion, I mean, your Roth conversion from your IRA to your Roth IRA does not count as your RMD. That is separate. So what that does is that adds to your ordinary income and could push you into a higher tax bracket. At age 72 and beyond. So do everything he can to try to implement and complete that Roth conversion by the time you turn 72.

Producer:
Yeah. Ford I love this idea. So whether you’re doing that this December or looking ahead to next December, you know, at that point in the year, you already know kind of what bracket you’re going to be in. See how much upper room you have before it kicks into a higher one and then do a partial Roth conversion with some of that. And we’re happy to help you do that. Just visit ActiveWealth.com

Ford Stokes:
Also real quick to jump in there before you go to the next one, Sam. I’ve got clients that are moving 39,000 a year like clockwork. Every single year and their their fifties and their Roth is continues to grow. I mean, they’ve got four or $500,000 in their Roth now. They’ve been doing it. For like the last six, seven years. And their wrath has grown as well over time. That’s a remarkable thing. I mean, when you can come in to retirement and all of a sudden you’ve got half a million dollars worth of. A Roth IRA and the. And you’re already through most of your conversion. Waiting period. And. And you’ve you’ve opened the Roth a long time ago. And you can also continue to do contributions depending on your income. That’s a great thing. And I would just encourage everybody to try to maximize that tax bracket and and take advantage of the conversions you can do and still stay at 24% or lower as you do the conversions.

Producer:
Yeah. We really feel like the Roth can be a secret weapon in your retirement plan because the gains are tax free and any withdrawals that you make in retirement are going to be taxed free as well. And then looking ahead even further, it will pass to your beneficiaries. Tax free. So all around a good way. To implement a smart tax plan. Next item on our financial checklist is set a monthly budget for your retirement.

Ford Stokes:
Yeah. I mean, you really do need to set a month of budget. Here’s a couple of hints. One is. Go look at two months in a row. Look at like September or October or August, September, and. Add both those months all the way together and then divide by two, and that’ll give you a good idea of what you’re spending on average throughout the 12 months. Obviously, you don’t want to do November, December because that includes holiday gifts, things like that. You’ve got to have an understanding of what you’re spending. And I think it would blow your mind how much you really spend every single month, especially if you’re using credit cards to help supplement your expenses and fund your expenses. Make sure those credit cards are paid off every month if you’re doing that. I also want to remind everybody, nobody ever got rich off of credit card points. Nobody got rich off of frequent flyer miles. They may have had some conveniences where they were able to, like, pay for a flight and things like that. But those those frequent flyer points and all those things are getting harder and harder to earn a lot. I mean, last time I checked, it’s it’s 50,000 miles to get a free flight on Delta almost anywhere you go. And there are times where you can do 25 to 40000, but you’re traveling at, you know, on the red eye or whatever you’re doing.

Ford Stokes:
And you’re also probably not going as far as the West Coast either. So be careful about utilizing credit cards. Also, be careful about just using your check card all the time, too. You got to just have a budget. How much income is required to meet your needs and wants during retirement? And also, what is it now? And if you’re in that red zone of retirement, that’s five years before you retire. In five years after retirement, you really need to get a real understanding of the expenses you have, whether they’re discretionary or non discretionary expenses. Discretionary being, hey, kids holiday gifts or kid’s birthday gifts or grandkids birthday gifts, going out to eat gifts, you buy other people travel, things like that. But non discretionary would be like rent, mortgage, power, water, gas, food, trash, whatever. And those nondiscretionary expenses, you really need to get a handle on them and then also see if there’s a way you can delete a really big non discretionary expense. How can we how can we delete a mortgage? How can we delete a rent payment? That’s a really good idea. Also, most people don’t really want a lifestyle change during retirement, so we need to plan for inflation and future tax increases as well.

Producer:
Yeah, and you let us right into the next item on our checklist. For the next item is develop a plan to pay your house off.

Ford Stokes:
Yeah. My favorite one is make 13 mortgage payments every single year no matter what. And some way some people will do that by paying biweekly. So they end up instead of on 48 weeks, they’re doing it off 52. So they’re paying that extra payment. If you do that, I think you cut by like something like 13 to 17 years, depending on your mortgage. If you’re doing a 30 year, that’s a big deal. And so I would encourage you to pay 13 mortgage payments a year if you can, and also tell your kids that to the happiest retirees we work with. Have no mortgage payment. It also takes the pressure off. It also does not eat up one of the Social Security payments that comes into the household, whether you’re a married couple or a single filer. Same deal. The easiest way to increase your net worth is to eliminate your debts.

Producer:
Yeah, absolutely. And you’re right for it. You can do that a couple of different ways. You can just make an extra payment. Maybe there’s a certain time of year that you get a bonus at work, make an extra mortgage payment at that time, or you can just take one month, divide it by 12, and then overpay by that much each month.

Ford Stokes:
Yeah, great.

Producer:
Next item on our list is maximize your Social Security income Benefit. Ford How can they do that?

Ford Stokes:
Did you know that you could increase your Social Security income benefit by 8% each year? You defer after you reach your full retirement age to age 70. So let’s say your full retirement age was 67 if you’re born after 1960. By the way, congratulations, folks. If you’re born after 1960, guess what? Your full retirement age, according to the Social Security Administration and the Center for Medicare Services. But specifically, the Social Security Administration, guess what? They say that your full retirement age is 67. If you’re born before 1960, it’s somewhere in that 19, maybe somewhere in that 66 and a few months, that kind of thing. We’re going to finish our list when we come back here from the break. But. You really can make more money off your Social Security income benefit. And it’s almost like a roll up on an annuity of 8% a year. If you can just figure out how to wait and hold on to age 70. We’ll come right back. And we’re continuing on this financial checklist for the new year to help you get in great financial shape.

Charlie Kirk :
Are you concerned about the Biden administration, how rising taxes could negatively impact your retirement? Then I encourage you to talk to Ford Stokes and his team at Active Wealth Management. Ford and his team of experienced financial advisors will help you understand the fees and risks involved with your current portfolio. Simply visit active Wealth to book your free financial consultation and tell them Charlie Kirk sent you.

Producer:
Investment Advisory Services offered through Brookstone Capital Management, LLC BCM a registered investment advisor, not an actual client of active wealth Management.

Producer:
Welcome back to The Active Wealth Show Activators. If you were with us before the break, we were going over our important financial checklist to jumpstart your New Year. And I just want to recap what we’ve covered so far. Number one was pay off your credit card balances. Number two was maximize your tax bracket with a Roth conversion. Number three was set a monthly budget for your retirement. Four, develop a plan to pay your house off and eliminate that mortgage payment. Number five was maximize your Social Security income benefit. And if you have questions about that, get in touch with us at ActiveWealth.com. And the next item on our list, Ford is implement a bond replacement to delete fees and stop the bleeding in your safe money.

Ford Stokes:
Yeah. Also we talked about at the beginning of the show bonds are trading at 150 times earnings and a go forward price to earnings ratio and stocks are trading at 22 to 23 times earnings and a go forward price to earnings ratio. Question Would you have more confidence you’re going to get paid back your money if it only takes 22 to 23 times earnings or 150? And for me, it’s the stocks would be the way to go. Investing in a bond replacement with a fixed index annuity and replacing the income portion of your portfolio. That’s 60 over 40 portfolio, 60% stocks, 40% bonds. What I recommend you do is delete the bonds out of your portfolio, take 40% of your portfolio and invest that 40%. Let’s say you got a million bucks. Take 400,000, which 40% of $1,000,000, and invest it into a fixed indexed annuity or a series of those. You can stagger them as well and generate market like gains and income that you can never outlive with a fixed indexed annuity. And also delete the advisory and portfolio fees. Because with a fixed indexed annuity, advisors can’t double dip. They get paid in a commission from the annuity company. So that’s a really good idea to delete 40% of the fees that you’re paying to a financial advisor. And we’d love the opportunity to help you figure that out.

Producer:
The next item on our list tax loss harvesting Something to consider this time of year for. Do you want to explain to the activators a little bit about how tax loss harvesting works?

Ford Stokes:
Yeah, this works for a lot of people that have got investment accounts have done really well over the last ten years and they’ve got a low cost basis and a high account value. It’s kind of a ticking time bomb with their from a tax perspective and they’re going to owe capital gains tax. Now granted, it’ll be long term capital gains, but it’s still capital gains and also will contribute to your total income as well. Your your Magi. And I would encourage everybody to try to take some of the loss tax holdings you have that are underwater and then have a negative account value versus what you put in an original principle. And then couple those also with large gainers so you can harvest those tax losses to reduce your tax burden, your tax benefit. And if you want, if you really like a stock and you want to reinvest in it, you can go reinvest in it. 30 days later, I would encourage you to wait 60 days. Also, you want to be careful on washing. You know what the heck and better to think you’re washing your account. But I will tell you, tax loss harvest are a really good idea and it’s great to do it after a year where the S&P I mean, the NASDAQ 100 is lost 29%.

Producer:
All right, Ford And we’ve made it to the final item on our list. And if the activators want help, checking off all of the items on this list for their own personal situations, it’s the most important thing. It’s schedule a retirement consultation with Ford at ActiveWealth.com

Ford Stokes:
Yeah, we hope you everybody does that. If you’ve been listening to our show for 6 to 12 months or even three years because Sam and I’ve been doing this a long time, we will show you the fees you’re paying and the risks you’re taking with your current investments. We’ll give you a free portfolio analysis at no cost to you. We’ll also create a retirement income plan that will fit into your budget. We’ll give you a financial plan for your 95th birthday With your current plan that has nothing to do with us. Then we’ll also give you one to your 95th birthday with our recommended portfolios. And lastly, we’ll give you a financial plan, your 95th birthday with our recommended portfolio’s recommended allocation mix. That also includes a Roth ladder conversion plan. We believe in it that much and we give that to you absolutely for free at no cost to you. That’s a $1,500 value that we’re going to give you absolutely for free. We do it on the front end for a reason. We could charge for it, but we don’t because we want to make sure everybody makes an informed financial decision. We’ve got our entire planning team. Sam, you and I get a whole lot of calls on Saturday, Sundays and Mondays, and I would love the opportunity to help more Atlantans out there, invest successfully and hopefully get prepared for a successful retirement.

Producer:
Yeah, and you can get this list just by getting in touch with us at ActiveWealth.com or by sending Ford an email at Ford@ActiveWealth.com. And that brings us to our inflation demonstration.

Producer:
It’s time for an active wealth inflation demonstration.

Producer:
All right. For this week, we have a really cool one. It is the PNC Christmas Price Index. So PNC Bank for 39 years has been calculating the prices of the 12 gifts from the classic song The 12 Days of Christmas. So, for example, I think everyone remembers what the true love gave on the first day of Christmas, and that is a partridge in a pear tree. So a partridge in a pear tree this year would cost you $280.18. That is a 26% increase from last year due to the cost of higher fertilizer and bird feed as well.

Ford Stokes:
What will our researchers think of next? You guys do a great job coming up with some really great stuff. I can’t wait to hear the rest of it, or at least a few of these I want to hear. Maybe not all 12 here, Sam, but let’s hear let’s hear what you think are the most interesting.

Producer:
Yeah, for sure. So, you know, of course, there’s a lot of birds in this song. Two turtle doves will cost you $600. That’s a 33% increase from last year due to inflation. That is the cost of rising fee of feed is rising for sure for calling birds is also in there on the rise. Five golden rings, a 39% increase from last year due to the price of gold will go down to eight maids of milking. We haven’t seen a federal minimum wage increase since 2009, so there’s actually no increase for the eight maids and milking. And you can visit PNC Christmas price index dot com. If you’d like to look at all of these items what I like for it if you would like to purchase for for someone you love all of the gifts in the 12 days of Christmas, it would cost you a little over 197,000, which is a ten, which is a 10% increase from last year.

Ford Stokes:
That is a big deal. Goodness gracious.

Producer:
Yeah. But if you if you want to show someone that you care, the 12 days of Christmas would be a great gift for the low price of 197 grand.

Ford Stokes:
That’s thank you so much for sharing. That’s really interesting. I’m sure everybody got a lot out of that.

Producer:
It’s this week in history.

Producer:
So this week in History in 1903, the first ever airplane took flight here in the south on the Outer Banks of North Carolina and Kitty Hawk Orville and Wilbur Wright Ford.

Ford Stokes:
Yeah, they were the pilots behind the first successful flight in history. Orville piloted the gasoline powered, propeller driven biplane, which stayed a law for 12 whole seconds and covered 120 feet in its first foray into the sky. That must have been something else. That must have been something awfully exciting to see. I don’t know what we would do without being able to fly everywhere. I’m flying out to Albuquerque, New Mexico, to go elk hunting this week. And, you know, I just I just appreciate the opportunity to be in the great outdoors, and I’ll get that from being able to fly. Thanks, Orville and Wilbur, and giving us a chance versus me getting in a Model T Ford and trying to drive cross-country for a couple of weeks to get there. It’s the final.

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

Ford Stokes:
We’ve obviously talked about the final the financial checklist for 2023. That took up a whole lot of what we’re talking about. We talked about RMDs as well. Listen, RMDs are confusing. If you got questions about them, just reach out to us. All you got to do is just reach out to us at ActiveWealth.com. We’re happy to help you. Also, we talked about bond replacement and I would just ask you, do you know what the percentage of your portfolio is in bonds? We found that too many people don’t know the percentage of their portfolio that that is in bonds. They also don’t know what bonds they currently hold. And did you know that 2022 is the worst year in the history of bonds? According to The New York Times, you could have been invested in a fixed indexed annuity instead. And I guess what? I can get you a 10 to 20% bonus on that for just for the bond portion of your portfolio. To put that into a fixed indexed annuity into an income account can pay you the rest of your life. And also we can do it as a joint survivor as well. Bonds can take up to 40% or more of a portfolio for many retirees and pre retirees. We’re very glad you’ve been listening to us this week. Obviously, we had this Week in history talked about Orville Wilbur Wright. And the first flight took took place in 1903 on this date. And then also, it was great to get the additional cost from Sam on the 12 days of Christmas and how much it would cost 187 grand.

Ford Stokes:
It’s crazy that it would cost that much money to get everything in the 12 days of Christmas. That was a neat one to listen. You you probably still have questions about how to protect and grow your assets, how to build a retirement income plan, how to build a tax efficient plan for retirement. We can help you do that. I would just ask you to go ahead and reach out to us at ActiveWealth.com. We’re happy to help you. Next week we’re going to continue to talk about how to build that smart retirement plan for retirement. We really appreciate you guys and gals listening to us. The Active Wealth Show. Thanks so much for making us the number one listen to radio show on AM 920 The Answer on the weekends. We’ve built quite a following thanks to each and every one of you. Also, if you want to get access to any of our older shows and you want to continue to learn, I would encourage you to visit ActiveWealthShow.com. Also, anywhere you get podcasts you can get our podcast and listen to it in the car anytime on Stitcher, Spotify, Google Play, iTunes and iHeart and others. And we just really appreciate our partners at AM 920 the Answer and Salem Media and have a great week everybody.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard-earned assets, To schedule your free consultation, call your Chief Financial Advisor Forward Stokes at 770 685 1777 or visit ActiveWealth.com.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC become a Registered Investment Advisor. BCM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including multi year 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.

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