11.11.22: Audio automatically transcribed by Sonix

11.11.22: 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, the chief financial advisor. We’ve got Sam Davis, our executive producer here with me. So, Sam, we. Had an election. It was. An interesting election. It’s the midterms, right? And. We have our governor Brian Kemp, is going to. One, and it’s going to have another four years. I thought it was very positive. That. Stacey Abrams. Actually conceded this time. I thought that was. Positive move in the right direction for our state. Just kind of your thoughts on. On just that election and then also, obviously. It. We’re going to a runoff here on December 6th between Herschel Walker and Raphael Warnock. I will. Not be shy. And I will say I thoroughly and firmly support Herschel Walker for to become our next senator. The great state of Georgia. Obviously it didn’t go well the last time we went through a runoff. Hopefully a lot of folks, please don’t stay away. Please get out there and vote. For those of you who want to vote for Raphael Warnock, I would encourage you to show up on December 7th. Instead to the polls instead of December 6th. On Pearl Harbor Day. But I’m. I’m just super. At least. Enthused and encouraged that, you know. We’ve got the same governor for the next four years and hopeful that, you know, the runoff will go well and help us, you know, get the right people in Washington to at least we can pull out these the crazy inflationary tactics that our government is doing.

Ford Stokes:
It’s just it’s crazy how much we’re going up and up and up and interest rates. And I would just say this. We just cannot continue to sustain overspending and not paying attention to our spending. Because if any of us if you’re driving around right now in Atlanta, if you were managing your checkbook or you were managing. Your retirement income. Versus your retirement expenses and you were over-withdrawing. More than ten, 12% a year. From your IRA and you’re going to run out of money in 10 to 12 years. That wouldn’t be a good situation for you. And our government is spending way more than 10 to 12% of what they’re bringing in GDP. We are. We are literally overspending like nothing I’ve ever seen. We’re not balancing the budget and we’ve just got to stop these runaway inflationary government programs that are inefficient. And the only solution for that is the red Republican side of the aisle. But that’s just my opinion. But your thoughts on what you saw in the midterm elections this year?

Producer:
Yeah, First off, it’s hard to believe that we’re two years into this president’s term, only two more years, and we’re going to be voting for the president of the United States again. So time flies. When I turned on the TV late on Tuesday, I was hoping to catch some of the late results, but it became pretty clear pretty quick that it’s headed to a runoff there in the Georgia Senate, which means that this is going to be our third runoff election, I believe, for a senator position in the last two election cycles, which is just unbelievable. It also shows how close it is and how important it is to actually get out there on December 6th and vote one more time.

Ford Stokes:
Yeah, make sure you get out there and vote and vote for your wallet and vote for your retirement plan and. Vote your conscience for sure. So, you know, because all I can say is run, Herschel, run. And we’ll we’ll keep everybody posted on what’s going on with that election. Obviously, you’ll get a lot more news and a lot more stuff than what we’ve seen out there. Right. So on this week’s show. We’re going to kind of talk we’re going to have an inflation demonstration where we give you the food price updates ahead of Thanksgiving on this week’s show. We’re also going to tell you how to manage through your accumulation phase. It’s one of the most complex phases out there. There are so many facets to dehumanisation That’s after your accumulating wealth. What else can we do to help folks protect and grow their wealth? For sure. We’re going to walk through all of that today. That’s the accumulation phase is really the the title of this week’s show. And then also, we’re going to help you avoid the number one mistake that we see people make when preparing for retirement. We’re also going to give you the definition of the retirement red zone. We’re going to have the quote of the week. We’ll share that here in segment one. And we’ve got one of our cost cutters on how to reduce your tax risk and kick the IRS out of being your partner in your IRAs or four one K’s or 434 or three BS or 450 sevens or SEP IRAs or simple IRA accounts, and we’ll help you out there. And also, if you’re facing a decision whether you should take a lump sum payout for your pension.

Ford Stokes:
Or just continue the pension. I would encourage you to reach out to us at Active Wealth dot com. Click that schedule a consultation button in the upper right corner and I’m happy to meet with you. You’ll you’ll get booked directly into my calendar or you can just give us a call at 770 685 1777. Again that’s 770 685 1777. We we’ve had a few folks that have come in after we aired the Baby Boomer Dilemma movie over it North Point mall at the AMC 12 over at North Point mall and in Alpharetta and. They had some pensions they were facing which are. Speers Or single premium immediate annuities, that single premium immediate annuities and they’re not tied to growth of an index and they don’t really grow with market-like gains. They are really good at one thing which is doing a good job at paying your money back. They’re not good at growing your money and they’re also not good at growing your income. The income basically stays flat throughout your entire retirement also. If you didn’t know, you can actually build your own personal pension. And we can help you do that through a fixed indexed annuity. And we’ve got some annuities that are illustrating at a pretty significant clip right now because there’s really never been a better time to invest in fixed indexed annuities in the last ten, 20 years than right now because the US Treasury is higher. It continues to go up and up from a rate of return. And typically what we see is it’s between 1.4 and 2%.

Ford Stokes:
On the ten year US Treasury. That’s the interest rate, the annual compounded interest rate that the ten year US Treasury usually gives us. But right now it’s it’s kind of north of 3.6%. So you’ve got over $3,600 that you would get as interest each year off of $100,000 investment into a fixed indexed annuity. And that annuity company would then take that $3,600 or 3.6% from your principal that you invested in the ten year US Treasury at the end of year one and they would invest it into. Different indices like a BNP Paribas index or Credit Suisse Index or a Jp morgan index or the S&P 500 or the NASDAQ 100. There’s hundreds of different indices out there that the annuity companies will give you an opportunity to link to your investment in the annuity. And however that does is how well you’ll do. It’s probably never a better time to invest in fixed indexed annuities. You’ve got more interest to work with the company. The annuity companies have more interest to actually invest into options and they’re able to give you a higher participation rate that’s above 100%. That’s a big deal. And they’re still able to make money off of your money or they wouldn’t offer it to you. And again, an annuity is a contract between you and the annuity company. But it is definitely something to really, really consider. And we hope you do. And we’ll go over more of how to build your own personal pension here on this week’s show as well. But first, let’s go ahead and read the Financial Quote of the week.

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

Producer:
All right. For this week’s Financial Wisdom quote of the week comes to us from a man by the name of David Bailey. And the quote is, To get rich, you have to make money while you sleep. Simple as that. What do you think, Ford?

Ford Stokes:
I totally agree. And I think what that does is it completely describes what people deal with in retirement. When you’re no longer working, you need to have your money work as hard as you did. I mean, remember, it was very difficult to make the money when your work, when you were working. But it’s also it was also even probably even more difficult to save it. And so I would encourage you to do everything you can to get your money working hard for you. That means a new type of 6040 portfolio. That means investing in things like bond replacement, bond replacement strategy with fixed indexed annuities, and replacing the bonds that face interest rate risk and reinvestment risk, whereas you don’t face that same amount of interest rate risk with a fixed indexed annuity. It also means investing in a tactically managed portfolio that’s going to rebalance month over month and also where you’re working with a fiduciary that’s going to keep the fees down and also keep your expense ratio down because again, you want to build a tax efficient, fee efficient and market efficient portfolio. We’re so glad you’re with us here on the Active Wealth Show this week. When we come back, we’re going to talk more about how to manage your accumulation phase during retirement. And we’re also going to talk about how to avoid the number one mistake we see people make when preparing for retirement. Goes to the Active Wealth Show right here on AM 920.

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. Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit Active Wealth dot 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 to Active Wealth Show. I’m Ford Stokes, Chief Financial Advisor. We’re here in segment two. I’ve got Sam Davis with me as our executive producer. And I wanted to talk about the incredible response, Sam, that we’ve gotten from the Baby Boomer Dilemma movie and how many people have responded and have wanted to get the online viewing of the Baby Boomer Dilemma movie. And the best way to do that is for them to just send me an email at Ford at Active Wealth dot or visit Active Wealth dot com and click that schedule a consultation button. The other thing you could do is go ahead and and just call us at 770 685 1777 again 770 685 1777. Here’s what we got to get. We just need your name, email and phone. That’s all we need. We need your we need your name, email and phone number and we’ll be able to get you a code back so you can view it at home. And I think you’re really going to like it. And you’ll learn a lot. You’ll learn a lot about what you need to do during the accumulation phase during retirement. That’s what we’re talking about here. We’re also going to talk about the number one mistake that we see people make when they’re planning for their retirement. But, Sam, your thoughts on the incredible response we’ve gotten just with people calling in and also emailing us. And also, I mean, Deborah’s been really busy getting those codes out to a lot of people.

Producer:
Yeah, it was fantastic to actually bring two screenings of the movie to the Atlanta area a couple of weeks ago. And you know, we’re working on getting some more of those scheduled here in the near future. But in the meantime, it’s been awesome to hear from the activators that want to get a code so that they can watch it at home, whether they’re by themselves, with their spouse, with their family, and really educate pre-retirees and retirees on some great solutions for generating income during retirement. So get in touch with us. Whatever is easiest for you works for us so you can email, call or just go to active health.com and schedule a quick consultation. Give us that information and we’ll get you a code.

Producer:
Want to know where your hard-earned money is going? It’s time for an inflation demonstration.

Producer:
I know everybody has their mind on the holiday season as we work our way through November, and Thanksgiving is just a couple of weeks away. Taking a look at some of the inflation numbers that are going to affect you and your family as you look to put food on the table this Thanksgiving season. First thing that jumps out to me forward is 112%. That’s how much more expensive Turkey is this year compared to last September. So Turkey prices alone more than doubled. And that’s significant because that is the main event of a Thanksgiving dinner, right, for most of us.

Ford Stokes:
So it’s just unbelievable. You’ve got turkey breasts reached a record high of $6.70 per pound in September versus just $3.16 a year ago. That’s unbelievable.

Producer:
Yeah. And there’s also some ingredient inflation that kind of plays into a lot of the pies and other side dishes that we enjoy. So butter and margarine, 32.2%. That’s how much more expensive butter is this year compared to last year. Frozen refrigerated bakery products, pies, tarts and turnovers, that’s up 20%. So even if you go store bought, inflation is going to hit you there. Canned fruits for those who like cranberry sauce that’s up 19% year over year and frozen vegetables up 17% year over year. So we all know that it’s been more expensive every time we check out at the grocery store. And here comes one of the biggest eating weeks of the year here in America, and inflation is going to hit hard.

Ford Stokes:
Well, for those of you bakers out there and you know, my mother in law, my mother, who’s no longer with us, God rest her soul and God bless you, Mom, we miss you after 17 years. We really miss her. But my mother in law and my wife are both incredible cooks and they are also fantastic bakers, even though I think they enjoy baking about once or twice a year. But when they do, it’s it’s a it’s a happening around on around our households. And what’s incredible to me is that butter and margin margarine were up 32.2% and then flour and prepared flour mixes are up 24.2. So even the ones, even the folks are, okay, I’m going to keep it cheap. I don’t make it myself. We’re already up significant amounts just on those ingredients alone. It’s just I don’t know. We just cannot keep printing money and doing quantitative easement and doing all these things. We’ve got to do more than that. I mean, inflation, as Milton Friedman said, it comes from one area. It comes from Washington, D.C. It just does. It comes from spending. And whatever the monetary policy is from Jerome Powell and the Fed, it’s not enough of a tool to be able to fix inflation. All you’re doing is killing the economy, you know, 75 basis points at a time every single month. And honestly, the Fed should just stop doing it. I think the markets are fatigued by it. I think the American public is fatigued by it. And all all of us are fatigued by inflation for sure. That also. Can you talk a little bit more about the consumer pricing index and what’s changed? Just these are some remarkable numbers as well.

Producer:
Yeah. So taking a look at other key ingredients and food items that everybody’s picking up at the grocery store, here are changes from a year ago. Milk is 15% higher, bread is 14.7% higher. So there you go. Milk and bread both pretty much 15% higher. Rice, 14% higher meats, poultry, fish and eggs. You’re paying 9% more than you did last year. And fresh fruits, 8.2% increase year over year. So all of these food staples that everyone has in their grocery cart when they’re rolling around Kroger or Publix or or wherever they end up picking up their groceries, much more expensive this year.

Ford Stokes:
And also, if you’re challenging us, hey, where did you get those numbers? What do you really think Our source is? The Bureau of Labor and Statistics. That’s that’s our source. It’s from the US government. That’s what their claims are about inflation. So that’s remarkable. Now let’s kind of talk through how to manage your accumulation. Phase D accumulation is the process you go through during retirement where you shift your focus from saving, which is accumulation, to using your assets to generate necessary income. So accumulation you’ve got saving for retirement, you’ve got nest net cash contribution, you got focus on asset growth and you also got long term investment horizon. That’s also when your human capital is higher and your wealth capital is probably lower, whereas in accumulation phase, your wealth capital should be high and it’s likely that your human capital is lower and de cumulation, you’ve got spending from savings, you’ve got net cash drawdown. You also tend to focus on return certainty and you also have a shorter investment horizon because you don’t you’re not necessarily going to live forever and ever. The soaring number of baby boomers entering and approaching retirement is leading a major shift in focus from accumulation and retirement savings to D cumulation and retirement income. And account withdrawals. The problem most people approaching retirement today are uncertain how they will manage their retirement assets and generate consistent income without outliving their money. It’s also the number one fear for most retirees. A BlackRock survey found that only 36% of Americans are confident they will have the income they need in retirement, while 55% are concerned about outliving their savings in retirement.

Ford Stokes:
Without thoughtful, trusted guidance and planning, this could have dire consequences for the next generation seeking income to sustain a consistent standard of living for retirees today, living longer in a historically low interest rate environment could lead to a gap between what their current savings can generate and the retirement income that they need to live. Retirees need retirement income solutions that can provide spending confidence for both essential spending needs and discretionary. Once again, you’ve got non discretionary and discretionary expenses, right, folks? So we’ve got to do everything we can to maximize the income and to really focus on this accumulation phase so you can enjoy the lifestyle that you’ve worked so hard for all these years. And also, I mean, let’s face it, it was it’s harder to save it. It’s easier to make the money. It’s harder to save it. It’s still hard to make the money, too. And we come back for the break. We’re going to talk about this accumulation solution that you’re really going to want to hear. And how you can really get the kind of withdrawals that you need to fund your lifestyle during retirement. We’re so glad you’re with us. Listen to the active all show on this special edition of the Active Wealth Show called The Accumulation Phase. We’ll be right back. On the Active Wealth Show right here on AM 920. The answer? Hey, baby, you want to take a chance? I see that.

Producer:
A new payroll tax could be coming to your state. I’m Matt McClure with a retirement dot radio network powered by AmeriLife.

Alison Hoffman:
We have seen a failure as a country to provide comprehensive insurance for long term care.

Producer:
America has a long term care problem, KNPR reports. 70% of people who turn 65 will need some type of long term care, ranging from in-home care to a full time nursing home facility. And the costs can be astronomical. A gen worth study in 2021 found the median cost for home health was more than $61,000 a year. If you want a private room in a nursing home, the median cost there more than $108,000 annually. And Medicare won’t cover the costs.

Alison Hoffman:
Medicare pays for short term post-acute care if somebody’s been hospitalized or has other kind of short term medical needs. It doesn’t pay for the kinds of things that we think about as long term care.

Producer:
Alison Hoffman is a professor of law and Deputy Dean at the University of Pennsylvania Carey School of Law. She tells me relatively few people in this country have long term care insurance. Washington State was the first in the nation to try to bridge that gap.

Alison Hoffman:
And what Washington state has done is it’s done a payroll tax point five, 8%, that is for all W-2 workers or full time workers that comes out of the payroll. And then so long as they pay in for a certain number of years, when they have a benefit that they can use for long term care up to a certain amount.

Producer:
But it’s not a cure all for the problem.

Alison Hoffman:
It is a little patch. I think the total benefits in Washington state are 36,000 and they increase with inflation over time. But the cost of a nursing home in most states is three times that. Over the course of a year, what it is, is the states trying to come up with a tool to fill in some of some of the gaps.

Producer:
Now, states like Pennsylvania, New York and California are looking to Washington’s plan to implement their own solutions. Professor Hoffman says taxpayers can opt out of the payroll tax in some cases, such as those who have their own private long term care insurance.

Alison Hoffman:
So why would somebody want to opt out? Well, somebody might want to opt out because they’re already contributing dollars towards towards long term care. And they think that that’s sufficient. That’s enough. But people also might opt out because they don’t value it as a form of insurance.

Producer:
So could a program like this be coming to your state? If so, how could it affect your wallet? And what about your own long term care plans for your later years? Those are all important questions to consider as time continues to tick on by With the Retirement dot Radio Network Powered by AmeriLife, I’m Matt McClure. Thanks so much for listening to the Active Wealth Show. Make sure to rate us everywhere you listen to podcasts, including Spotify.

Ford Stokes:
And welcome back to Activators the Active Wealth Show. Ford Stokes, Chief Financial Advisor I’ve got Sam Davis on the board as our executive producer and we were just talking about the D accumulation solution and what came out of a research study from the Stanford Center on Longevity. They evaluated systematic withdrawal plans for investment portfolios and annuities Against the following criteria. They looked at amount of income, access of savings, pre and post-retirement protection. Inflation protection and lifetime guarantee. So number one was amount of income. Number two was access of savings. Number three was pre and post retirement protection. Number four was inflation protection, and number five was lifetime guarantee. One of the key findings from their research was that from a purely financial perspective, annuities often provided higher yearly income as compared to systematically withdrawing from investment assets. So if you’re tighter on the. Withdraw side because you’re trying to stay within that 3.2 to 4% withdrawal rate on the 4% rule and. Of your assets. And it’s making you a little bit tighter. You can get more. Withdrawals from annuities you’re going to hire. Payout percentage and higher withdrawal rate. Then even what you’ve seen in some of that because of that is mortality credits that annuity companies give you as people age and also pass away and their liabilities change they’re able to pay out a higher percentage than you can. So it’s a pretty good situation. Also, if you’re in the retirement red zone, I want to define what the retirement red zone is, because we said we would at the beginning of the show. The retirement red zone is the period of time it is five years before you retire and five years after you retire.

Ford Stokes:
It’s a ten-year period. And if you’re in that red zone, we would encourage you to pick up the phone and give us a call if you’re going to retire in the next five years or less, or if you’ve already retired, you know, at least five years ago or or more recently, you really should pick up the phone and give us a call so you can get a plan. And let me just tell you what you’re going to get. So if you come in to meet with us. Regardless of your situation, what you’re going to get is, number one is you’re going to get a portfolio analysis so you can understand the risk you’re taking, the fees you’re paying, the correlation of your assets. You can really inspect what you expect about your assets. Number two is. We’re going to give you a Social Security maximization report if you haven’t already started taking Social Security. Number three is we’re going to give you a. Financial plans your 95th birthday at no cost to you with your current investment plan. And number four is a financial plan with our recommended portfolios. The number five is a financial plan, your 95th birthday with our recommended portfolios and a Roth ladder conversion, so you can figure out how much money you can really save by kicking the IRS out of being your partner with your IRA or your 403b or your Sep IRA, your simple IRA or your 41k. The next thing we want to talk about is.

Ford Stokes:
The number one mistake that we see when people are planning for retirement. Too many people believe retirement is about accumulation, saving enough money to reach that one big magic number. We recommend you start focusing on the strength of your income plan. More so than the size of your nest egg. Lifestyle is more about income than total assets. So the biggest mistake we see is people are so focused on getting the big nest egg that they don’t understand and they’ve got. Money in an IRA. They have no money in it in an investment account or savings accounts. They don’t. They don’t have a six month fund. They don’t have a six month emergency fund. They they’re just struggling a lot of areas and. I would like to see us do a better job. I’d like to see everybody do a better job. All of us being activators out there who are listening to this show. I’d like to see them do a better job at planning for income and also planning for. Tax efficient income, whether it’s tax deferred or tax free. If you’re in your thirties, forties or fifties and you’re listening to this show one, congratulations, you’re doing the right thing because you’re you’re planning for your retirement and you’re seeking information. As we talk about if you’re going to be a bear, be a grizzly, I would encourage you to do everything you can to seek as much knowledge about retirement and also about planning for retirement and about planning for your retirement income tax efficiently, for efficiently and market efficiently, for sure. And we’re happy to help you.

Producer:
Here’s the cost cutter of the week.

Ford Stokes:
Our cost cutter is just simple. We just encourage you to implement a Roth ladder conversion and reduce your tax risk saving on taxes by deleting the IRS as your partner during retirement. Is likely the largest savings effort you can implement for retirement, but also for legacy for your kids. The nicest thing you can give your kids is a Roth IRA versus giving them an inherited IRA. So Roth IRAs are invested with after tax dollars and qualified withdrawals from the Roth IRA. Plans are tax free and growth within the account is tax free. So your principle and your gains are tax free. Your withdrawals are tax free. A Roth ladder. Conversion is a conversion of funds from your IRA to your Roth IRA. Over a period of multiple years in hopes of reducing the amount of taxes you must pay with each annual conversion. If laddered correctly, IRAs can keep their tax rate at or below 24%. And dramatically reduce the taxes that you will pay over a 30 plus year retirement. Now. I want to go ahead and I want to speak directly to some listeners. So you activators out there. Let me ask you. Do you love the IRS so much that you’re willing to give them more of your retirement dollars than you give your own children? That’s what you’re doing. If you keep your money into an IRA, But if you convert your IRA into a Roth IRA, you’re putting you and your heirs first.

Ford Stokes:
Please don’t underestimate the importance of having a tax plan for your retirement. And get in touch with us so we can start helping you. With your own plan today. We want to help you. Delete the urse out of being your partner with your retirement accounts. We can actually do it, I promise. And all you got to do is reach out to us at 770 685 1777. Again. 770 685 1777. Deb and her team are standing by to take your call. And also you can send me an email at forward at Active Wealth dot com. We’ll get you that baby boomer dilemma movie voucher code as well. Absolutely. At no cost to you. It’s like a $12 value. We’ll give it to you Absolutely. For free. And then the next thing is. I just encourage you to visit active wealth dot com and click the schedule a consultation button. The upper right corner. So you can meet with me, so you can get your own custom retirement plan. Absolutely no cost to you. We do this on the front end. Because I’m a fiduciary and I’ve got I’m required by law to put your needs ahead of my own. And I would rather do everything I can. To protect and grow your wealth. And give you. Ways. To grow your money. Without market risk where your money is not invested in the stock market. And also.

Ford Stokes:
To help you invest smartly with the risk. Part of your portfolio with. You know, the 60%. Likely or even above. Amount of money that you want to leave in the market. We’re happy to help you protect and grow your wealth, but also generate consistent retirement income, help you grow with market-like gains without market risk, and then also help you enjoy retirement. You really need to stop looking at the stock ticker every day and make sure that you’ve got 40 to 50% of your assets generating consistent income. Also, you should be deleting the bonds from your portfolio as well, not just the IRS from your IRA, but you ought to delete the bonds out of your portfolio and go ahead and invest in fixed-indexed annuities as a replacement strategy. If you want to learn how to do that, you can just all you got to do is visit bond replacement dot com that’s bond replacement dot com and you get my free report it’s like a 2000 word plus report It’s a quick read and it’ll help you better understand the power of bond replacement. So again just to let us help us provide you with a retirement income gap analysis a financial plan to you and your spouse is 95th birthdays. Also, I want you to consider your longevity risk. Like, how long do you plan to live? It’s more than likely you’re going to live ten plus years longer than your grandparents did.

Ford Stokes:
And, you know, the CDC says that. You know, if you’re a married couple and you both make it to age 65, there’s better than a 50% chance. There’s actually 60 plus percent chance that one of you is going to live to be at least age 90. And the average age of those people that are going to live in their nineties is actually 93 years old. So you want to have, you know. A check that’s going to last that long. Listen, we work with. So many folks we work with folks that are pre-retirees, retirees, widowers, widows and business owners, divorces. And all these people have one thing in common. They have one check to last for the rest of their lives. And we take protecting and growing that check. So very seriously. And also we take extreme caution and care in making sure you have a tax efficient, fee efficient and market-efficient portfolio. We come back for the break. We’re going to play the chapter from my book, Annuity 360 Why Annuity and Life Insurance Companies Are Competing for Baby Boomer Dollars. I think you’re going to enjoy that. And we’re going to have more about this accumulation phase and what you can do to generate a higher level of retirement income right here on the Active Wealth Show. Listen to 920 the answer. We’ll be right back.

Producer:
Are you concerned about US tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Active Wealth Show with Ford Stokes, your chief financial advisor, to learn how you can reduce the taxes you pay before and during retirement. The Active Wealth Show Saturdays at noon and Sundays at 11 a.m.

Ford Stokes:
And welcome back. Activators The Active Wealth Show. We’re talking about the accumulation phase of retirement. When you’re distributing money from your nest egg, part of that accumulation phase is to get a higher payout from our assets is to consider an annuity, because generally because you have mortality credits and other factors. They’re going to give you a higher payout than if you were just taking 4% from your nest egg. So that’s another good way to spike income and get a higher rate of income. Also, for a lot of people that don’t know, you can actually invest into a fixed indexed annuity with your IRA money and do a conversion within that IRA and do a ladder conversion and do and they have different subaccounts and you can do the conversion each year while you still own the the annuity and while your IRA money is in an annuity. That’s a pretty cool thing and. Also, you can take Roth IRA money and buy an annuity with it. Did you know that? And also, you can make it where? You know, your money’s not taxable coming out of it because it is Roth IRA money. That’s pretty good stuff.

Producer:
It’s this week in history.

Producer:
This week in 1918, World War One came to an end. It is the deadliest conflict in history. An estimated 9 million people were killed and the war officially came to an end at 11:00 am on the 11th hour of the 11th month, on the 11th day. So World War One came to an end. We’re about 104 years removed this week in history.

Ford Stokes:
Yeah, that’s also that was supposed to be the war to end all wars, and it wasn’t. But what’s interesting is that ended chemical warfare. They did everything they could to keep chemical warfare out because chemical warfare killed so many people.

Producer:
Also on This Week in History, 1954, Ellis Island closed its doors. It was considered by many to be the gateway to America. The island closed after processing 12 million immigrants into the United States in 1907. Ellis Island had its busiest year, processing 1 million immigrants. Close to 40% of all current US citizens can trace at least one of their ancestors to Ellis Island. A few notable people who pass through Ellis Island, Carl Jung, Sigmund Freud and Charlie Chaplin.

Ford Stokes:
Yeah, that is all. That is just remarkable. I’ve actually been to Ellis Island. I went with a friend of mine and we were able to find her original relative that came over from Germany, and that was a really neat thing. And she was able to take pictures. And also, you know, they take the piece of paper and do a crayon or whatever, so you can actually get the name and stuff. It was really cool. That was a neat moment. That was just kind of neat to be there. That was several years ago, but that was a neat thing. Ellis Island is a special place. If you’ve never been there, it’s pretty cool. Now, go ahead, Sam. Let’s go ahead and play chapter two from my book, Annuity 360. And again, as a reminder, you’re going to get a free copy of my book, Annuity 360. All you have to do is visit annuity 360 dot net That’s annuity 360 dot net. Chapter two Why Annuity and Life Insurance Companies are competing for Baby boomer dollars. Big idea annuities counter one of a retiree’s biggest fears outliving their wealth. Annuities create lifetime income streams. There are 73.4 million baby boomers in the United States that are close to or are already in their retirement years. Baby boomers put between nine and 10% of their pay towards their retirement. Only 55% of boomers have any money saved for their retirement. More than four in ten boomers inaccurately believe that Medicare will cover long-term health care costs.

Ford Stokes:
Baby boomers hold $2.6 trillion in buying power. They’ve had more time to build their wealth in comparison to other generations because some might still be in the workforce and making more money. Baby boomers control 50% of the nation’s wealth, outspend younger generations and are more likely to spend their retirement savings on themselves rather than passing them down. Total US retirement assets are about $28 trillion. More than half of those assets were either defined contribution plans or individual retirement accounts. Some other facts about baby boomers and their spending habits. 69% of baby boomers either expect to or are already working past age 65 or don’t plan to retire. Only 26% of baby boomers have a backup plan for retirement if they are forced into retirement sooner than expected. Baby boomers make up 46.8% of pet spending. Baby boomers are expected to spend 3.4% more on health related purchases than their parents did. Why are annuity companies targeting baby boomers? Boomers face many issues when planning for retirement. The three primary reasons are, number one, growing the money they have already saved. Number two, dealing with and preparing for unforeseen expenses, the largest of which are tied to health care and long term care. Number three, optimizing their financial plans when their exact lifespan is unknown. Annuities exist to help boomers with the last issue with an annuity, a retiree gives an insurance company a lump sum of money in exchange for an annual income that will last throughout their lifespan.

Ford Stokes:
Annuities have the potential to become useful tools in baby boomers portfolios when planning their retirement. They offer protection from market volatility, while also eliminating the risk of outliving one’s retirement savings, which are not guaranteed by portfolios that lean heavily on stocks and bonds. The demand for retirement income amongst baby boomers already exists, and annuities are the only products that can provide a hedge for a long life like longevity insurance reasons. Baby boomers should be interested in annuities. They are falling short of their retirement goals. Roughly 10,000 baby boomers retire every day, but a very small percentage of them believe they can retire and live comfortably throughout their golden years. Only 25% of baby boomers think they have enough money to retire comfortably. Many couples may be on the right track, but unforeseen circumstances such as health problems or staffing cuts might force them into retirement earlier than planned, leaving a much larger income gap. Baby boomers are looking for a reliable source of retirement income, and annuity companies are beginning to tap into this market because they recognize the need. Not all annuities are created equal. There are two main types of annuities immediate and deferred. The right kind of annuity depends on your financial goals, your situations and your needs. One thing that makes annuities so attractive is that there are so many options available. While it may seem overwhelming, a financial advisor can help you sort through all of your available options and make a smart choice for your money.

Ford Stokes:
So. Security for their income. Annuities can help build a secure retirement through different income strategies, while also alleviating any stress or fear they may have left over from the financial crisis of 2008 and the bear market. Annuities can play an important role in a plan, along with your Social Security, health care and other factors. Annuities can address issues such as maximizing your Social Security benefits, which help create an income that you can never outlive. How annuity and life insurance companies have responded to Baby Boomer needs interest in hybrid products. Baby boomers don’t want to pay a fortune for something that offers them only a part of what they need. With less income to be counted in their retirement years, already paying for individual products to meet each of their needs can be too expensive. Life insurance companies heard these concerns and responded with new hybrid products. Many life insurance companies now offer some kind of long term care rider on their whole life or universal life products. Generally speaking, these riders provide coverage for long term care should you need it or you receive a death benefit if you don’t. These combination products have grown from 6 million in 2008 to 2.6 billion with a B in 2013, and they are still growing need for guaranteed income. Baby boomers are also concerned with outliving their money. They want to enjoy their retirement, but they also don’t want to run out of funds.

Ford Stokes:
The industry responded to these fears by offering a variety of products with guaranteed lifetime income. These products include variable and indexed annuities with guaranteed living benefit riders and immediate or deferred annuities. The annuity industry has been transformed by these new products. According to PricewaterhouseCoopers Employee Financial Wellness Survey, since the economic downturn of 2008, 76% of retirees say that creating a guaranteed income is their top retirement planning priority. Annuity companies rose to the occasion to create products to meet the needs of baby boomers and provide them with a sense of security. The need for advisers. Annuity companies have created many products to meet the needs of their consumers. This is a good thing, but it can make for a tough decision on the part of the investor with so many options to sort through. Some pre-retirees and retirees can’t sort through all the information. Many are afraid to make the wrong decision, which leads them to make no decision at all. A large part of the planning process involves an advisor educating their clients on all of their options so they can make the right decision. I hope you enjoyed that chapter on how and why annuity and life insurance companies are competing for baby boomer dollars out there and how it’s not no longer your grandfather’s or or dad’s annuity out there. There are a lot of great products out there. It’s the.

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

Ford Stokes:
This show is all about the accumulation phase. We talked about why it’s so much more important to focus on retirement income, to get more tax efficient with the retirement income, and also to how to generate consistent retirement income. So you have a positive retirement income gap. We want to help you do that. All you’ve got to do is visit active wealth and we’re happy to help you. So glad you’ve been with us this week. Remember, if you’re seeking retirement information, if you’re going to be a bear, be a grizzly. Do everything you can to seek as much information as you can, because information is power. And we want to help you plan for a successful retirement. To work hard. We’re going to work hard to protect and grow your wealth. Thanks so much for being an activator. Thanks for listening to the show 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, Ford Stokes at 770 685 1777 or visit ActiveWealth.com.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC. BCM a Registered Investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance can not 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. 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 interests of our clients and to make full disclosures of any conflicts of interest, if any exist. Refer to our firm brochure the ADV two A page four for additional information, any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by BWA.

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