Solutions for Common Financial Risks in Retirement

1.31.25: Audio automatically transcribed by Sonix

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

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

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

Speaker3:
Welcome to retirement. Results. Result. Drivers. I'm Ford stokes, the chief financial advisor. And I've got Sam Davis here with us on the mic. He's our senior financial advisor and co-host. Sam, say hello to everybody. Welcome to the weekend result drivers.

Speaker4:
Welcome back to the show, Ford. We have already put the first month of the year behind us. The first month of 2025 is done. It's on to February. And we're going to continue to bring all the folks out there listening, some great information to help them better plan for their retirement. And if you're listening and you're already in retirement, we want to help you improve that plan and enjoy retirement just a little bit more.

Speaker3:
Yes we do. And we're so glad you're here with us. And also, thanks for making us the number one listen to radio show on the weekends here on Am 980. The answer. We really appreciate all of our listeners. Also, if you've been a long time listener, but you've never called us in the office or never wanted to get your case study done for a problem solver, or you've never actually been able to log your question in by calling our office, I would encourage you to go ahead and reach out to us at 770685177777706851777. And also, if you've got questions on who result driver is, it's somebody who listens to this show, somebody who is looking to build a tax efficient, fee efficient and market efficient portfolio for a successful retirement. They're looking to protect and grow their hard earned and hard saved wealth. Sam. And today on our show, we're going to talk about creating a financial plan you can count on. We're talking about smart risk smart, safe and smart tax strategies for your retirement. And also we kind of announced this a couple of weeks ago. But in March we're going to be publishing the Smart Retirement Plan by myself. And, um, I'm the author of the Smart Retirement Plan.

Speaker3:
There's 26 action packed chapters in there about what to do and and how to do it, to plan for successful retirement. So you're going to want to reach out to us at retirement plan. If you put your information in now, you can reserve your advance copy absolutely for free. All you've got to do is go to retirement plan and we'll get started right away for you on that. But here's an overview of this week's show. Sam's going to share our quote of the week. Uh, we're also going to he'll give us some inspiration to start our conversations today. We're going to talk about smart risk investing. You want to consider risks and making suitable investment choices. Things like are you invested in portfolios that employ tactical asset allocation? Or are you in just a strategic portfolio that's just a buy and hold portfolio or a combination of both? Um, also, we're going to talk about smart, safe investing, how to place a protective floor on your hard earned savings, but specifically on your retirement income portion of your portfolio, and then also smart tax strategies. How to delete the IRS from being your partner in retirement and helping you manage taxes in retirement with the right financial plan. And it's got to be the right financial plan for you, right? And then also how to create personal pensions.

Speaker3:
We had a shout out to John and to his wife, Barbara. I'm not going to share their last names, but John is a fantastic client of ours. They've been a client of ours for a while, and he called me and was like, you know what, Ford? I think you should call it a pension in a box or a personal pension in a box. And I don't disagree because. Because you guys just do such a great job at saying, look, here's your product, here's what the participation rate is, here's what the guaranteed interest rate is into the income account. Here's what the immediate bonus is. Here's what any writer fees are. Here's how you know you're going to be able to delete the advisory portfolio fees. So I just want to give a shout out to John and his wife, Barbara, for just being great listeners and great result drivers. And there it is. John, we are going to talk about your pension in a box today on retirement results, but we're specifically talking about how to create an overall smart financial plan. Sam, go ahead and share your financial wisdom. Quote of the week.

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

Speaker6:
This week's quote of the week.

Speaker4:
Comes to us from author and motivational speaker Brian Tracy. And this is awesome! I found this quote. We've never shared this quote before on the show. Um, and it's such a good one. Brian Tracy once said, the best way to avoid a problem is to solve it ahead of time. And I think this just really touches on what we really like to do at active wealth management and retirement results. We recognize these headwinds that all these good folks are going to face as they enter retirement and as they carry on through retirement. And the best way to avoid those problems, like Brian Tracy said, is to solve it ahead of time and make sure that you're planning for that.

Speaker3:
Yeah, it's always good to plan your work and work your plan, especially with the retirement involved. So we want to help you today, try to get going on that smart financial plan and do a great job at planning your work, um, to build for that sound foundation for great retirement. So let's talk about smart risk here. Um, first of all, smart risk involves careful planning for savvy retirees. Smart risk investing is an investment strategy designed to maximize returns while minimizing risk. Smart risk investing is based on the concept that all investments carry some amount of risk, and the only way to reduce the risk is to diversify. But also you want to get a fair exchange for the risk that you're giving and the risk that you're taking. Diversifying means investing in a variety of different asset classes, such as stocks, real estate, commodities, insurance products like fixed index annuities, and other financial instruments. You want to be truly diversified. You don't want to just have all of your money sitting in stocks and bonds on the same, on the same investment exchange or financial market exchange.

Speaker3:
You want to do a great job at saying, hey, you know what? I may have some stocks, I may have some bonds. I'm trying to minimize those bonds that are in my portfolio, because I just don't want to take unnecessary interest rate risk. And reinvestment risk would I'd rather do is replace the bonds within my portfolio and invest in fixed index annuities to get market like gains without market risk. And then also make sure I can get an income that I can never outlive. Also, investors need to consider their individual needs and goals as well as well as their risk tolerance. Before investing for various types of investments. Obviously the insurance products are going to be the lowest risk on the board. And you know, we've we present a lot of products on this show. We're going to talk about a couple of them today. We're going to talk about the one. We'll talk about the synergy choice bonus ten as well. Um but Sam go ahead and share kind of the risks that are facing retirees and pre-retirees these days.

Speaker4:
Yeah. So let's kind of bring it back to the quote of the week. The best way to avoid a problem is to solve it ahead of time. Here are some of the risks, some of the problems that you may potentially face during your retirement. And the first one is market risk. So we know, you know the market can only do two things. It can go up, it can go down or it can go sideways. It can stay the same. So your portfolio will go through all three of those changes in the market. When you're invested, you're going to have periods of time where things are going up, periods of time where things are going down, and and other periods where it's more or less staying the same. So you need to be prepared for both systematic and unsystematic unsystematic risk. Those are the risks that you can predict and the ones that you can't really control at all. Um, you want to be prepared for volatility and uncertainty by practicing tactical asset allocation. You want to make sure that you're being nimble and flexible, making sure that you're being strategic as well with your asset allocation. We really believe in both here at Active Wealth Management, and you just want to be sure that when you're invested in the market, there's a lot of great things that can come from it. It's really a really good hedge against inflation and protecting your buying power, but you want to make sure you're taking the right risks. And it's about dialing in that standard deviation to the right place.

Speaker3:
If you got questions on okay, what's tactical asset allocation? I'm a new time listener to retirement results. Or what's a strategic asset allocation. Tactical asset allocation is going to be where we're rebalancing your portfolio at least on a monthly basis. We don't just like to hang in there with our investments. Strategic asset allocation is going to be where you're investing about once a year. You're going to you're going to invest and you're going to set it and forget it a little bit. We like to install, you know, two different types of investing strategies with tactical asset allocation and strategic asset allocation within our portfolio so that your account doesn't get overturned, but also is not going to just ride the the wave all the way down to the bottom of the markets either. So that's just one way to kind of handle market risk. But you do want to get a good exchange between risk and get that reward that you deserve by taking the risk in the market.

Speaker4:
Yeah. Another risk to highlight Ford. We've got about a minute left in this first segment, but we've got enough time to talk about interest rates. Obviously, changes in interest rates have a significant effect on American families and affect the economy as a whole. It whole. It affects how much it costs to borrow money. So if you're buying a new car or a new house, it's certainly going to affect that. It's going to have a drastic effect on the bond market. It's one of the reasons why we encourage people forward to look at bond alternatives. Because you have reinvestment risk with bonds, there's no guarantee that that same interest rate is going to be available when that bond matures. The same thing goes for bank CDs. There's no guarantee that that bank CD is going to be able to offer the same rate when that actually matures. So interest rate risk is something that you will face. Rates go up and down. We've seen some cuts recently. And we'll see what the Trump administration brings over the next four years. As far as interest rates.

Speaker3:
Yeah. When we come back to the break, we're going to talk about how money is rushing out of bonds and into fixed index annuities and why that is. Come right back and learn more about how you can build your own smart, risk, smart, safe and smart retirement plan right here on retirement results on Am 920. The answer?

Speaker2:
Retirement results. We'll be right back. To learn more and schedule your complimentary retirement consultation, visit retirement Results.com.

Speaker7:
We're no strangers to love.

Speaker2:
Get started on your free portfolio analysis and financial plan right now by visiting Retirement results.com.

Speaker3:
And welcome back to Retirement results result drivers I'm chief financial advisor I've got Sam Davis here with us. He's our senior financial advisor and co-host on the show. Sam we're talking about risks that are facing retirees and pre-retirees. We've gone through market risk, interest rate risk, and now we're on inflation.

Speaker4:
Yeah. So inflation has had a significant effect on the spending power of Americans, especially over the last five years since Covid. As inflation continues to rise, your spending power will decrease. I mean, just think about it. $100 Dollars doesn't get you what, $100 you used to get you? You know, anywhere. Just think at the grocery store, $100 worth of groceries used to be a big old cart, maybe spilling over the sides, and now it's maybe 3 or 4 bags and that's $100 worth of groceries. So when planning for retirement, you need to consider and work with your advisor. That's, you know, when we're sitting down with people and doing these plans, we want to make sure that your income is going to increase throughout retirement and so that spending power can maintain.

Speaker3:
I'll say this inflation is hitting everywhere, and it's even hit our household with our 18 year old twin girls. My girls work a full internship here. Both of them do here at Active Wealth Management. And they get paid a good wage for that internship. But then they're also working at, um, flirt. Shout out to flirt. They're kind of the prom dress and and formal dress shop over there in Cumming, Georgia, right off exit 14. And so they're they're working two jobs and going to school just so they can get prepared to have enough money sitting in their bank account when they go to Auburn University next year for college, because they got in early decision in October. I don't know about you, but I didn't have two jobs when I was working and going to school. I had one job, but I didn't have two. It's, um, and they're looking to also do other jobs as well. I mean, they're also looking at babysitters. So I guess they're really working on three different jobs. And it's all because everything's so much more expensive. They want to have enough money to be able to live on and have spending money when they are at college. So that's just one thing. But the one big overarching thing I did mention in the last segment, you want to stay invested so you can keep pace with inflation. One way to stay invested is to invest in tactical asset allocation portfolios, so you don't ride the lowest of lows into the into the valleys of the market, but also consider smart, safe investments with, um, you know, fixed index annuities because you can get market like gains without market risk. And that's just two great ways to kind of handle inflation. Just stay invested.

Speaker4:
Yeah. The next risk we want to outline for folks is public policy risk. And this is not something that is in a lot of.

Speaker3:
This the last four years didn't we.

Speaker4:
Yeah it's absolutely right. I mean it's really mostly out of your control. You can go and make sure you go to the polls and vote and, you know, participate in politics as a citizen. But, you know, public policy affects everything from taxes to retirement account rules, contribution limits, you know, so retirees should really be paying attention to these sort of things that could affect their livelihood in retirement. It could affect their pensions, their social security, even their healthcare coverage. And that's one of the reasons why we've been doing the show together for five years now, to make sure that people are getting the information they need regarding their retirement, because we have a lot a lot of retirees listening to us on this station.

Speaker3:
Yeah. I mean, it's it's so important. We just appreciate everybody listening to us, and we want to do everything we can to help you, you know, kind of stay invested, help it go all the way through the markets. And and you don't want to miss the top 3 to 6 earning days a year. You just don't. So make sure you're invested in the market and also invested in fixed index annuities. So you can get those market like spikes when the index spikes that you're aligned with or linked with, with your fixed index annuity.

Speaker4:
Yeah. The next risk for this is a big one. And it's simply timing timing risk because you can choose when you retire but you can't choose what the market's going to look like when you do retire. So your retirement could look different if you retire during a recession versus a more favorable market. But if you have the right retirement plan in place, you can be prepared for whatever happens. I happens. I mean, for this is the biggest reason why we make sure that when we're doing plans for people and by the way, the complimentary planning services we provide is a $2,500 value. We make sure that people's income is going to be protected in retirement. So regardless of what that market is looking like, it doesn't matter if the stock ticker is green or red on the day you retire, you can retire with confidence knowing that you're going to have that income that you need.

Speaker3:
Yeah, it's I mean, it's a remarkable situation to make sure that you've got your income taken care of. We look at the income planning first because we want to make sure that you're happy and you've got peace of mind during retirement. Yeah. Just make sure you're reaching out to us if you've got concerns on. Hey, do I have enough money to retire? How am I going to generate the income? How do I maximize my Social Security planning? Go ahead and reach out to us at (770) 685-1777. And we'll get started right away for you.

Speaker4:
The next risk we want to highlight is liquidity. Liquidity risk. So this is the ease at which an asset can be bought or sold in the market. You want a plan that allows sufficient access to your savings and your funds, because things will come up in retirement that you'll need to access a large amount of cash for. Maybe it's finally buying that beach house or that lake house. You know, maybe it's time that you need a new truck, or you have an opportunity to take the kids and the grandkids to Disney for a vacation. It doesn't matter what it is. You want to make sure you have access and make sure you have liquidity for those funds. And for this is a problem we see sometimes with small business owners where they're putting everything they have into their business, and they don't have as much liquidity until they actually make that decision to either sell the business or sell their partnership. And, you know, you just want to make sure you have access to the cash you need.

Speaker3:
I'll give you an example. So let's just say you've got kind of a balanced plan, but you want to do more like a 60 over 40, but you want to replace the bonds in your portfolio. So let's say you had $1 million portfolio. It's $1 million IRA. We'll put $400,000 in a fixed indexed annuity and $600,000 in a tactically managed and strategically managed portfolio. So you'd have access to $600,000 liquidity. You could get within 24 to 48 hours, pay the taxes on that. But that's about it. And if you're over 59.5, you won't have any tax penalty. The next is you would get access to 10% of that 400,000. So you got access to $640,000 out of a million. And you're also generating an income that you can never outlive, that if you wait four years after investing into a product like the nationwide P10, you're going to be getting over 10% more than likely at start of year five. Like the first day of year five of owning that annuity, you're going to get over $40,000 a year in actual income. That's liquidity as well. Plus, you could take out another 10% if you wanted to.

Speaker3:
That would be like 680. Um, but bottom line is you really aren't going to write a $640,000 check to yourself at one time, unless you're going to pay cash for a house. And so what I would encourage you to do is to consider a balanced approach, whether it's a 6040 plan or a 5050 plan. Replace the bonds in the portfolio. Invest in fixed index annuities. They're giving you 20% immediate bonus, giving you 8% guaranteed interest into the income account for that annuity each and every year. And then also giving you 310% of how, you know, an index like the BNP Paribas Global Factor Index performs. I mean, we just ran the numbers for, um, some clients of ours that are approaching their two year anniversary date of that nationwide peak ten Sam. And it's remarkable. They're looking at 25.77% growth on one of their annuities, and they're closing in on 32% growth. On their other nationwide annuities. The wife started earlier than the husband, and she's seen more growth than he has. And so that's pretty good. Remarkable result there.

Speaker4:
Yeah. And we have just a few more risks that we want to highlight when we come back from the break. But before we do want to let all the listeners know that if you missed part of today's show or if you'd like to go back and catch up on last week's show or any of our recent episodes, you can find retirement results. Wherever you listen to podcast, just go online or to your favorite podcast app. It could be Spotify, it could be Apple Podcasts and just search for retirement results. You'll find us there and please subscribe. We post new episodes every weekend right as they air here on Am 920. The answer? So we want you to be able to listen, but when we come back, we'll highlight those last few risks we want you want you to be aware of so we can help you manage them better. You're listening to retirement results.

Speaker2:
You're listening to retirement results. Where we help you protect and grow your hard saved money tonight.

Speaker7:
Share the spice of life.

Speaker8:
We all know the importance of car insurance. It keeps us safe on the road, protects our wallets and gives us peace of mind. But what if you're paying too much for it? I'm Jim here for the retirement radio network powered by Emeril Live. Whether inflation, supply chain disruptions or just simple traffic violations, there have been a myriad of reasons behind the rising car insurance rates over the past year. Senior director of global insurance intelligence group Stephen Crewdson.

Speaker9:
It's fair to say in the last couple of years, the average consumer has seen over a 20% increase in their auto insurance premiums. Some have seen much more than that.

Speaker8:
According to a report from CNBC, drivers from some states experienced a 40% increase in their premiums. In fact, drivers nationwide spent an average of 3.1% of their income on car insurance premiums alone. In some states, though, it was a lot more. For example, insurance is up 4.91% in Nevada, 5.01% in Michigan, and 5.69% a whopping number in the state of Florida. So if you feel you're paying too much for car insurance, there's a simple solution that we want to share with you today. Visit coverage. Com it's a free website that will compare prices for you and deliver a menu of insurance quotes to choose from that can best suit your financial situation for the retirement radio network powered by Amira life. I'm Jim Tarabukin.

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. 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:
Learn more at Retirement results.com. Or by calling us today at (770) 685-1777. That's (770) 685-1777.

Speaker3:
And welcome back result drivers to retirement results on Fort Stokes. Your chief financial advisor got Sam Davis here with us, talking about all the risks that Pre-retirees and retirees face. And Sam, go ahead and share these last few. And let's go ahead and let's recap all the risks that we're seeing that retirees and pre-retirees are facing. We are super excited that Donald J. Trump is in the white House, and it's been a just a whirlwind couple of weeks. I'm really excited about what what he's doing for the country. Um, and I think a lot of these risks are improving. Uh, but at the same time, these are risks that people are still facing out there.

Speaker4:
Yeah. So to recap the risks that we've discussed so far on today's episode, and if you missed part of this week's show, you can find us wherever you listen to podcasts. We've discussed market risk, the risk of your assets invested in the market, interest rate risk. So how interest rates going up and down can really affect all of us and the economy as a whole. We've discussed inflation risk, you know, reducing buying power, how everything gets more and more expensive, especially these days, public policy risk. You know, you can't really control what happens in your state house. You know, in that gold dome in Atlanta or in Washington, D.C., but you can be prepared and stay informed. Uh, timing risk. You know what the market will look like when you retire is something that's out of your control. So it's important to have a plan that will make sure you're prepared for whatever happens. And then before the break, we were discussing liquidity risk and making sure that you actually have access to that money that you may need when some large expense comes up in retirement. And the next risk we want to talk about for this sequence of returns risk. And this really goes into timing risk as well because you don't know what the market's going to do in those last few years before you retire and those first few years of retirement.

Speaker4:
And the performance of your investments during that time is critical to your success and your financial success during retirement as a whole. So if your retirement funds take a big hit, or if the market experiences a downturn in that early part of your retirement, you know it will have a significant effect on your portfolio. You know, just as just as an example, if you lose 20% in any given year, you're going to need a 25% gain. A 25% recovery to even get back to even. You know. To make matters worse, let's say if it was a 50% loss, if you experienced a 50% loss on an investment, you would actually meet a 100% gain to get back to even. And that's what sequence of returns risk looks like. And it has a serious effect. I mean, just imagine anybody who retired, you know, right before things went down in 2020 or 2022 or even think back to 2008 and 2009, those retirees that retired right around then faced a serious challenge.

Speaker3:
Yeah, I mean it, you know, losing from March oh eight to March oh nine, the S&P 500 lost 50.1% of its value. So therefore they had to have 100% growth to come back. So you know let's let's follow what Warren Buffett says is, you know, two rules of investing, which is number one, is just don't lose the money. And number two is don't forget rule number one. So let's do everything we can to hold on to our money. And um, and let's understand sequence of returns risk. One of the great ways to really watch and reduce your sequence of returns risk is to invest in a fixed index annuity that never retreats. It never loses your principal and also allows you to lock in your gains every one to 2 to 3 years, depending on how long the protection period is. Most of the products that we work with clients on are fixed index annuities that have a two year protection period, and therefore they're going to lock in your principal and your gains each two year period, and you can't go back. So if you get a 20% growth on 500,000, you're at 600 grand. You're you're after the end of year two. Guess what? You're still at 600,000. If the market goes back down another 10%, percent, you're still at 600,000. So I think that's something to really consider. And also, it's a great way to make sure that you're getting a higher income rate than the typical 4% rate. Go ahead with the next one there, Sam.

Speaker4:
Yeah. And just quickly, you know what that looks like if you're driving around listening to us on the radio show or listening to the podcast this weekend, you know, instead of an investment performance that looks like an EKG with the ups and the downs. And when you're looking at that stock performance over time, how that looks, you end up seeing with the fixed indexed annuity that we put a lot of our prospects and clients into, it ends up looking like stair steps with those two year protection periods. You take your any growth credited after two years and it goes up and that's your new floor. So people enjoy seeing things move in a steady trajectory and knowing that they're placing that protective floor on their portfolio. The next risk we've got three more left is longevity risk. And this is simply boils down to we're living longer than ever before, which means we need to plan for a retirement that's longer than expected. We don't want you to outlive your money. We want your money to outlive you.

Speaker3:
Cdc says that if a married couple, both of them live to age 65, there's over a 50% chance closer to 60% chance that at least one of those two individuals are going to live to be age 90 or older. That is significantly longer than what our grandparents were living. They were usually living in their 70s. A few would get into their 80s, but we're a lot of us aren't smoking at all throughout our whole lives. A lot of us aren't drinking as much alcohol as as they used to drink. Um, they're just staying a lot healthier. Specifically, the smoking is the biggest deal. Um, I'm somebody who's never had a drink in my life, but. And my dad hasn't either. And he's 87 years young. Um, and still practices law. But, you know, the smoking thing is the biggest deal in my opinion, and so many of us are not smoking at all and they're living longer.

Speaker4:
Yeah, it's really amazing. I remember not that long ago you would walk into many restaurants and it would be smoking or non. That would be the first question that you would get. And most, most every place you go uh smoking is not an option indoors.

Speaker3:
That's very true.

Speaker4:
Certainly change.

Speaker3:
Yeah. One one last thing on longevity risk. Listen, it's a great problem to have. We want you living longer. We want you to see your grandkids grow up and go to college, get married, all those kind of things. Um, because you're going to see your kids do that, hopefully you're going to want to see your grandkids do the same. You need to stretch that extra ten, 20 years to be able to do that. Because, you know, most of my grandparents passed away right around when I was in college or shortly thereafter. And I just think if you can just hang in there and do a great job at planning and making sure that your money outlives you and you stay invested, you're not You're not going to have to live just on Social Security alone.

Speaker4:
Yeah, it's certain longevity is certainly a risk, but if you have the right plan in place, it can be a beautiful thing. You know, you maybe you don't just become a grandparent in retirement. Maybe you become a great grandparent as well. Um, I never got the chance to meet any of my great grandparents. There is one photo of my great grandmother, my father's grandmother, holding me as a baby, but that's the closest we ever came to meeting. So maybe with all of us living longer, there will be a lot more great grandparents out there.

Speaker3:
Yeah, it sounds like it sounds like she did meet you and you didn't remember it. Um, no. But my, um, my in-laws are still alive, and they have four great grandchildren, and, um, it's just a beautiful thing. I was there when, um, my niece gave them a framed thing and said how special great grandparents are to announce her pregnancy. And it was and it was, It was something. It was really cool. It was like. It was just like watching history. It was amazing.

Speaker4:
Wow. Well, the next risk we want to highlight here is health expenses. You know, medical costs are one of the largest expenses for Americans. And you want to be prepared for those because most of the medical costs that you're going to experience in your life are during retirement. So make sure you have the right Medicare plan in place, and make sure you're prepared for those health expenses that could come up.

Speaker3:
We're thinking of a Medicare Advantage plan or a Medicare Medigap supplement insurance plan. Clark Howard calls Medicare Advantage a Medicare Advantage plan because it kind of works like an HMO. And they they limit services and utilization and trying to make money off of you. But it comes with $0 as a as a monthly premium. A lot of folks prefer to pay. Hey, I'm going to pay my 120 to $150 a month and take care of the other 20% that Medicare is not covering, and a co-pay, and I'm going to go ahead and make sure I cap all my costs by paying $150 a month, you know, for each one of us. So closing in on approximately $300 for a married couple, that's a really good way to make sure you can mitigate your risk and just make sure that all of your health care costs are taken care of.

Speaker4:
And last risk we want to highlight before we head to the break is loss of spouse. You know, this is something that you want to be prepared for. When the first spouse passes away, the household is going to lose about 33% of their Social Security income. So you get to keep the larger of the two Social Security benefits, but not both. So you want to be prepared for this loss of income and really make sure that that is going to be a smooth transition. You know, losing a spouse is one of the most difficult things to go through, and you don't want to add any more challenges during that time. So that's something you want to be prepared for. And it is something we help people plan for during their retirement?

Speaker3:
Yeah, you can actually invest in a product that'll give you income, that'll backfill the loss of 33% or more of your Social Security income. I'll give you an example. So if the man works his whole life outside the home, and the woman works her whole life inside the home, and she probably worked harder because she had to raise the kids, and she couldn't take a day off, and she couldn't get fired from it. She couldn't quit from the job. All these women are saying, Amen. Go ahead, preach on. But I will say this. Let's say that the gentleman was making $30,000 a year in Social Security income benefit, and the spouse who stayed home gets 50% of his. That's 15,000. So that's 45,000 coming into the home. While both of them are still living during retirement, after they've taken their Social Security income benefit, they turned it on. They're ready to go. Let's say fast forward 20 years later, he passes away and goes to heaven. Guess what? She loses hers but keeps his. And she lost $15,000 a year in income. That's a tough deal. So we come back from the break. We're going to talk more about these risks that people are facing these pre-retirees and retirees are facing. And we're going to talk in depth about smart, safe investing for you and your successful retirement. You're listening to retirement results right here on Am 920. The answer?

Speaker2:
Visit retirement. Com to schedule your free, no obligation consultation today.

Speaker10:
New York New York is everything they say. And no place I'd I'd rather be. Where else can you do a half a million things all at a 2:45 when they play their music.

Speaker2:
Miss part of today's show retirement results is available wherever you listen to podcasts and online at retirement results.com.

Speaker3:
Welcome back. Result drivers I'm George Stokes, your chief financial advisor. I've got Sam Davis here with us, our senior financial advisor and co-host. And, Sam, can you just recap the risks that retirees face and pre-retirees are facing? And then you've got an article that we want to share.

Speaker4:
Yeah, absolutely. And if anybody wants a recap of these risks that we just highlighted, you can go back and listen to this week's radio show on our podcast feed. Or if you'd like a copy of all of these risks and the information that we shared on this week's show, just reach out to us at Active Wealth and we'd be happy to get this to you. But here's the risks. We just went over. We went over market risk, interest rate risk, inflation risk. We want to make sure that you maintain your buying power, public policy risk. So those are the things that happen in the state House in Washington DC. You can't control timing risk, liquidity risk, sequence of returns, risk making sure that you're protected because you can't control what the market's like when you choose to retire. Longevity risk. We're all living longer. We talked about that health expenses and the loss of a spouse. And Ford, you talked about a number of these risks in your most recent blog post that you made at Wealth.com. And if anybody's interested, they can just go to wealth.com. Click on the blog tab at the top of the homepage and check out Ford's latest post. And Ford. You talked about planning for a successful retirement and protecting and growing your hard earned and hard saved wealth. I mean, Protect and Grow is right on our logo here at Active Wealth. It's something we really believe in. And Ford, what inspired you to write this article, and what are some of the things that people will find in here?

Speaker3:
So I wanted to write a extensive blog post. It's like 3300 words, but it's a quick read because there's lots of headings and things like that. In advance of coming out with my book, The Smart Retirement Plan Book, I would encourage you to go ahead and check out this blog post. Just go to wealth.com and just click on the blog. It'll be the the first blog. It's the most recent blog post. It's over 3300 words, but it's. But it is a quick read. So we went over kind of why effective retirement planning matters. We also talked about how to delete the IRS from your retirement accounts through a strategic Roth ladder conversion, or a 5 to 7 year period. We want to try to get out, by the way, before you turn 73. Um, there's some hints in there about what to do, how to do it the most tax efficiently and pay the least amount of taxes and maximize your Roth IRA and let it grow and grow and grow. And then number three, we also talked about the importance of establishing guaranteed income strategies using fixed index indexed annuities as a bond replacement option there. And then number four is when to take Social Security and how to optimize it, especially for married couples or things that you guys and gals can do that single filers can't. Minimizing risk in your portfolio through true diversification and understanding. Standard deviation, which is a measurement of risk. We want to make sure that we're trying to minimize the risk as much as possible. I also want to try to build a fee efficient and tax efficient portfolio. Fees and taxes are things that we can control as investors. It's tougher to control the market because you're depending on other people to buy the same investments you have, so that you can drive up more demand for your investments and they'll eventually grow.

Speaker3:
And also, you're depending on those companies to have profits so that your company that you own in common stock or preferred stock actually can generate and deliver more market value. And and actually earnings per share. And number seven we talked about the state planning considerations to help you your loved ones avoid probate and also just protect your legacy. Our goal is to try to help. By the time you go to heaven say have your kids say, you know what? Mom and dad were really, really smart and we can help you do that. It's generally make sure you've got a will or a revocable trust, and we can help you at a much lower cost than what we're seeing out there. We had a lot of clients that were coming to us saying, hey Ford, it's so expensive to do a revocable trust. Do you know anywhere I can get it done more cheaply. We work with licensed estate attorneys in the state of Georgia through a service. We capture all the information so we can kind of minimize the time that they have to invest in it, and we can literally cut the cost by two thirds. If you work with us on your will or revocable trust or irrevocable trust, if that's the way you want to go. And then number eight is just taking the next step to get a free portfolio analysis and personal guidance. Those those eight things are the things that we explored in that post. And and I would encourage you to go ahead and check that out.

Speaker4:
All right, fjord, we've got just about five minutes left in this week's show, and we want to go through a right or wrong real quick and test our listeners knowledge. So I'm going to give you a statement, and then you're going to help the listeners understand if that statement is right or if it is wrong.

Speaker2:
Come on down as we test your financial knowledge in right or wrong.

Speaker4:
So here's the first one. If you choose to take a lump sum on your pension when you retire, you can receive up to a 20% bonus on your money.

Speaker3:
Believe it or not, that's actually right. But you wouldn't get it from your pension plan. You'll get it from a new plan with a new fixed index annuity that you can work with an A-plus rated carrier like Nationwide or North American. North American is offering a 15% bonus. A speed is offering a 50% bonus there. A minus rated, but nationwide is an A-plus rated carrier, and they're offering a 20% immediate bonus into the income account. And this will help you generate a better return on your money and also help you get a higher income withdrawal rate year in and year out when you're turning on that annual income.

Speaker4:
Yeah, it's also a good idea for folks who can roll out part of their pension and really diversify, while also getting a bonus on their percentage that they put into that new investment. All right, here's the next one. Is this right or wrong? There's no product safer than a bank CD when it comes to protecting your money.

Speaker3:
Um, that is actually wrong. A fixed index annuity can protect your wealth while also providing upside as the principal investment is tied to an index. But zeroes are a hero here with a fixed index annuity. Also, FDIC only protects up to $250,000 in deposits, and there's only a 10% financial reserve requirement at banks. Fixed index annuities are a 100% financial reserve requirement product. They have to put 100 pennies or 100 pennies. You give them into the ten year US Treasury bond, and then they invest the interest that's generated off that ten year US Treasury into options in indexes or indices that are linked to your product, to your fixed index annuity product that can get you market like gains without market risk and the market goes down. Your money is not in the market, so your principal is still protected. But if the market goes up, your principal is protected and you get to enjoy the growth on those options as well. It's a pretty big deal. There also really many great multi year guaranteed options where they can give you a guaranteed rate of return. We have one that's offered by Cliff right now that is paying out 5.3% over a three year period for multi year guaranteed annuity called a Miga. And if you want to know more about that, just reach out to us at retirement. Com forward slash plan. Put your information in. We'll give you a call and we'll get started right away.

Speaker4:
Yeah that's some great information. So if any listeners out there feel like maybe they have a bit too much money in bank CDs and could be leaving some money on the table, definitely reach out to us at active Com and look into your options. And fjord, I've got one more right or wrong for the people this week before our final countdown. Is this right or wrong? It is a waste of time to have your financial accounts reviewed on an annual This.

Speaker3:
That's wrong. You really want to inspect what you expect regarding your financial future? An annual checkup can prevent you from paying too much in taxes and fees, before those expenses can cause a lifestyle change down the road. And now the final countdown.

Speaker7:
It's the final countdown.

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

Speaker7:
The final countdown.

Speaker3:
First of all, Sam, thanks for playing the right or wrong game. We haven't done that in a long time. I love doing that. We need to do that more often. We do get a lot of requests for that. So we're we are listening to you. Um, thanks for the quote of the week. Uh, the best way to avoid a problem is to solve it ahead of time. From Brian Tracy, who's an author and motivational speaker. I thought that was a fantastic one. Let's do that and let's get a let's work our plan. Let's plan our work and work our plan. There we talked about smart risk investing, smart safe investing. And we touched on smart tax strategies. A little bit. We also gave a shout out to John and his wife, Barbara, talking about pension in a box because they love their pension in a box that we were able to get for them, but we spent a long time on the risks that are facing pre-retirees and retirees out there and what to do about each one of them. And I hope that really helped you get a better understanding of the risks you're facing in retirement. Again, a recap of those risks market risk, interest rate risk, inflation risk, public policy risk, timing of the market, and timing of when you retire.

Speaker3:
Risk. Liquidity risk when you need to have money right to be able to live and all that kind of stuff. And you've also got sequence of returns risk if you are invested upfront. And then all of a sudden the market crashes. That's a problem. It'll smooth out if you can do dollar cost averaging. And also if you can invest in a fixed index annuity. Longevity risk. We are living longer than before. We want to make sure that your money outlives you, not the other way around. Because we don't. You just living on Social Security. Listen, if you're seeking information about retirement, if you're going to be a bear, be a grizzly. Thanks for listening to this show. Seek as much information as you can. And next week we're going to talk more about how to build that smart financial plan to protect and grow for your financial future and your successful retirement. Don't forget to visit Active Wealth and Retirement Results.com and reach out to us. If you've been a long time listener, first time caller, go ahead and reach out to us at (770) 685-1777. And thanks so much for listening to retirement results this week. Have a great week, everybody.

Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.com. Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment Advisor, VCM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Speaker1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV Two-a item four for additional information.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you’d love including automated translation, generate automated summaries powered by AI, automatic transcription software, powerful integrations and APIs, and easily transcribe your Zoom meetings. Try Sonix for free today.