The Smart Retirement Plan series continues with a discussion of Smart Review and Smart Income Streams. Have you heard from your advisor lately? It’s important to have your finances reviewed at least once a year to ensure you are on track to reach your goals.

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9.1.22: Audio automatically transcribed by Sonix

9.1.22: 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 Act of 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 act of 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 the act of wealth show activators I’m Ford Stokes chief financial advisor and I’m joined by Sam Davis, our executive producer. Sam, say hello to the folks on this long Labor Day weekend.

Producer:
Welcome to the Weekend Activators. So happy you’re here on the active wealth show. And I want to remind all the listeners that if you’re busy, maybe headed to a backyard cookout or something this weekend, you can catch the act of wealth show wherever you listen to podcasts and subscribe. So you’ll never miss an episode. But we’ve got another good one coming up for you today.

Ford Stokes:
Absolutely. And, you know, shout out to everybody who’s working hard. And I want a shout out to all the folks who work hard for a living to provide for their families, provide for themselves. Remember what Dave Ramsey says? He says that your personal income is your greatest wealth generator, and we think that is incredibly accurate. And for the folks that want to just sit by and collect what the government’s going to provide for them, I would just warn you that it’s going to be a shrinking violet and it won’t be as good. So you really need to get out there and earn a living and make your own money. We do live in the freest society in the world, even though our government is doing their very level best to portray us. And. And. Charge us more in taxes and give away free money for, you know, for, you know, try to deal with student loans and give away free $10,000 for no reason and forgive loans and and penalize the people who are paying the debts. It’s just not something that I’m really thrilled about that happened in the last couple of weeks. Also, the market is kind of reacted to Jerome Powell, and we’re not going to do a full market update today because we’ve got a really action packed show because we’re talking about smart income. On this week’s show, it’s part of our Smart Retirement Plan series, and this show is so packed. We’re going to talk just simply about smart income. That’s going to be the thing you’ve got to really concern yourself with during retirement, because smart income, really retirement is is more about income than it is about building one big nest egg number. Granted, you can generate income from a large nest egg, no question about it.

Ford Stokes:
But if you don’t have an income plan, you don’t have a tax efficient, fee efficient and market efficient income plan, and you don’t have a plan to have a retirement income surplus every month or every year during your retirement years. And many of you are going to have a 35 plus year retirement. And we’ve got to do everything we can to make sure that you don’t outlive your money. We want to make sure your money outlives you. So we want to say, Hey, welcome to the show. We also really appreciate all of you. Activators. Holiday weekends are a really good time for Sam and I to really thank the activators and to thank the folks who listen to the show who’ve made us the number one listen to radio show on the weekends on AM 920 Answer We sincerely appreciate you and great job activators. Also, if you’re wondering human activator is it’s somebody who listens to this show, somebody who wants that successful retirement. They want to be able to protect and grow their wealth. They want to build a tax efficient, fee efficient and market efficient portfolio like we talked about, and make sure that they don’t outlive their money. And also, if you want to get a free consultation with us, a free financial consultation, we give that to our activators, we give it to our radio listeners. All you have to do is reach out to us at Active Wealth, that’s active wealth dot.com. And in the upper right corner, we have a schedule, a consultation button that you can just click and and you’ll get booked directly into my calendar. Also, you can give us a call at 7706851777. Again, that’s 7706851777. And Sam, can you also talk to them about what they should be doing about our podcast?

Producer:
Yes. So wherever you listen to podcasts, so if you have an iPhone, you can go to the Apple Podcasts app right there on your phone. If you have an Android phone, Google has a podcast app as well, or you can listen on Spotify. Wherever you find podcasts, find the active wealth show, hit subscribe. So whenever you miss an episode or you want to go back and reference something that you heard when listening on AM 920. The Answer You can go into the podcast, feed and download it and listen however many times you like.

Ford Stokes:
Absolutely. So thanks for mentioning that. We we’ve gotten. Hundreds of downloads of our show where people have listened to our show. Over the last few months, but very few subscribers. So if you’ll do us a favor and just hit that subscribe button wherever you listen to podcasts and also go to YouTube and listen to Active All Show on YouTube and also an active wealth show that’s active wealth show dot com. You’ll see an actual video of us from our 29th floor office in the King Queen Building right here on the north part of Atlanta overlooking perimeter mall and my commute home on 400 going towards Cumming, Georgia. But now let’s dive into the show. So this week’s show, we’re going to talk about smart income. It’s, in my opinion, one of the very most important elements of a smart retirement plan. We have like a six part series, and we’re we’re hurtling towards part four here of our series, which is called The Smart Retirement Plan. And we’ve got a full report. I’m in the process of writing the Smart Retirement Plan book and pretty excited about that. Sarah Wilson, my researcher, and I are doing lots of research and we’re starting to write I’m starting to write chapters, but. We wanted to at least go through this outline with you because it’s stuff we talk about on seminars and with one on one prospect and customer meetings and client meetings. We try to do everything we can. To help put clients into a smart retirement plan. That just makes sense. That’s sound in nature. That’s not. Too risky, that doesn’t overreach. That also allows you to make sure that your money outlives you, that you don’t outlive your money. And smart retirement income. And smart income is really one of the most important things out there. We’ll go through that today. We’ll also go through a little bit of smart review at the front of it. But smart income is going to be the primary element that we’re going to talk about as part of a smart retirement plan today on today’s show.

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

Ford Stokes:
Time is more valuable than money. You can get more money, but you cannot get more time. And that was from Jim Brown. I completely agree. I absolutely agree with that statement. But from a retiree perspective like Ford, why are you sharing this? It’s probably something you should have shared with me when I was in my twenties. Well, unfortunately, I wasn’t around to share this, you know, in your twenties, but I am now. And I wanted to share this really important point, especially for your pre-retirees out there. As we start working in our twenties. You’ve got a lot of human capital left of your life. But you don’t necessarily have you don’t necessarily have a lot of wealth capital. But as you lose human capital, as your years advance and you give up your your you’re working and you’re giving up time and your career and you’re working for the man or you’re working for a corporation or some company out there. Or you’re doing your own or building your own business. Your human capital is depleting, but hopefully you’re saving 10 to 15% a year. And your wealth capital is increasing. That’s really. The way to have a successful retirement, and that’s the way to successfully plan for retirement. Also you can let’s say you’re just in the catch up period where you’ve just turned 50 years old. You’ve got plenty of time if you’re going to work age 65.

Ford Stokes:
Even if you haven’t done a good enough job at saving, you don’t have enough money in your four and K, you don’t have enough money in your retirement accounts, all of those things. And let’s say you took some risk entrepreneurially and you burn through an IRA or two. That’s okay because you can still build now. And a couple of things about that. Number one is, did you know you can put up to 26, 27,000 into a41k account a year next is in addition not instead of, but in addition you can put up to 7000 a year into your IRA. Another really great hint is you can also, if you, you and your spouse are making less than 206,000 as a married filing jointly couple. And in less than your Maggie, your modified adjusted gross income, if that is less than 206,000, you can invest and contribute to your Roth IRA. If you make less than 196, you can invest the full 7000 for you and your spouse. And even if your spouse doesn’t work and you work, there’s still ordinary income coming into the household. So guess what? You can go ahead and invest 7000 apiece into those accounts for the next 15 years. So it’s 28 grand going into IRAs and Roth IRAs and another 26, 27,000 going into 401k, that starts adding up to real money.

Ford Stokes:
A lot of people think they can only invest money into a41k and only invest money into an IRA or only invest money into a Roth IRA. That’s not the case. You can actually invest in all three. The only income limitations for contributions come with Roth IRAs, and you can’t. It’s a basically an income range of between 196 and 206,000. That phases out. It starts at 186,000 and phases out when you reach 206,000. So let’s say you you did 200 grand or 202,000, you could put like $3,500 into your Roth IRA account if you’re in that middle of that 196 to 206000 range. But. We think it’s a really good idea to put money into your IRA, put money into your Roth IRA and put money into your 41k if you’ve got that opportunity or four or three B or whatever. So. That was a lot about that financial wisdom quote. But we wanted you to understand the difference between human capital and wealth capital and what you need to be doing as your human capital depletes. You need to be investing and putting money into your wealth capital bucket. We think it’s really important. You’re also going to hear a great quote from Ronald Reagan that we’re going give credit to Ronald Reagan for that right when we come back from the break.

Little big secret of the.

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. Thanks so much for listening to the active wealth show. Make sure to rate us every rate you listen to podcasts, including Spotify.

Ford Stokes:
And Welcome Back Activators, the active wealth show on 14 stocks with Chief Financial Advisor. And I’ve got Sam Davis with us here on this Labor Day weekend and we’re so excited you’re with us. This is all part of our Smart Retirement Plan series. It’s a six part series. We’re in part number four here. And I wanted to share a little bit about Smart Review. Smart Review as another element of our Smart Retirement Plan series. And it’s also another element of building your own smart retirement plan. So smart review is basically this here’s the definition for it you to review the performance of your investments on a quarterly or semi-annual basis to ensure that you are staying on the right track to meet your goals. We all need to retire someday. That’s why we want to help people retire better. And here’s our extra quote of the week.

Producer:
And now of wholesome financial wisdom. It’s time for the Quote of the week.

Ford Stokes:
And this is what it’s all about from Ronald Reagan. He said trust but verify. When he was dealing with Gorbachev and he was trying to get rid of the Berlin Wall and he was trying to win the Cold War. He was trying to trust what Gorbachev and others were saying, mainly about foreign policy. And Ronald Reagan basically said, hey, you got to trust but verify. And I would I would add to that. It’s just inspect what you expect. And I you know, I’m a huge Ronald Reagan fan. And, you know, when I was a young kid, Ronald Reagan was the one that saved the day and kind of ended the hostage crisis and all that stuff and pulled us out of a tough economic era and just did a great job with it. Then. Here’s kind of the call to action that we want to make sure that you’re that you understand. We want to help you make a decision. Listen, if you haven’t taken action, you haven’t made a decision, so we’d ask you to go ahead and reach out to us at 7706851777 and 7706851777. To book your own free financial consultation, I mean, holiday weekends are great for that. Go ahead and make a resolution here before a New Year’s resolution a few months before New Year’s and get your portfolio analyzed by us for free. We’re going to give you a full, free workup, a complete financial consultation that includes. You know, a portfolio analysis. It includes a retirement plan to your 95th birthday with your current assets and then a retirement plan to your 95th birthday with our recommended portfolio and our recommended allocation within the portfolio.

Ford Stokes:
Also, we’re going to give you a Social Security maximization report and we’ll also give you a free retirement plan, your 95th birthday with a Roth ladder conversion. If you’ve got an IRA for K four or three, be SEP IRA or Simple IRA that you’ve got a lot of money in where the IRS is your partner in retirement. We’re going to help you with that. But we’re going to provide that comprehensive consultation at no cost to you because you’re a listener of this show. We will help you analyze your financial situation. We will closely examine any annuities you may currently have. We’ll do our annuity x ray as well for you. All you have to do, especially if you’ve got a variable annuity that are running 3 to 6% on fees with with my fees, which are mortality, expense fees and other types of fees. Variable annuities are scary. People don’t do annuities. That’s what we call them. Fixed indexed annuities are the the annuity. That’s just right. That’s where the porridge is just right when you’re talking about Goldilocks and the three bears. And we’ll also discover exactly how much you’re paying in fees, the risk you’re taking will help you cut unnecessary costs within your IRA. And for one K and any other retirement savings account that you may have. We’ll also help you with Social Security planning. We’ll help you maximize your Social Security planning and also introduce you to our partner, Bonnie Dobbs, with Medicare and other red tape to help you make the right decisions with Medicare on Medicare Part A, B and D, make sure that you’ve got all your drugs within the formulary and all that stuff.

Ford Stokes:
So that’s what she does. She does a great job with it. We’ll also compare your current situation to what’s possible. If you choose to work with us, we want to help you make an informed financial decision. If you feel like you’re in a better spot, or if we feel like you’re in a better spot where you’re currently at and it’s not worth moving to us, we’ll let you know. It generally doesn’t come out that way, but we are happy to do that also. Our fees are less than 1% in management fees. The other thing is when you do a fixed indexed annuity with us, there are no advisory fees and there are no portfolio fees because guess what? The insurance company, the annuity company, they pay us directly and we can’t and will not double dip on any client. So we’re going to do everything we can to help reduce the fees within your portfolio. If you are as part of that smart review, here’s a really good hint. If you’re paying advisory and portfolio fees on bonds within your portfolio, I would ask you to ask yourself this one question. Why? Why am I paying money for. Somebody to have a bond portfolio where it’s going to give me income, where I’ve also may have lost over 13% this year. At one point in time this year, because Jerome Powell keeps going up with interest rates and the bonds that I used to hold or that held before he started upping these interest rates.

Ford Stokes:
My bonds became less attractive because the new bonds have a higher interest rate. Why am I going through that unnecessary risk, that interest rate risk? Why am I paying an advisory fee to lose money and market value on an income product? These are all really good questions and honestly, you shouldn’t. What I would recommend you do is consider a bond replacement and get going towards smart income. And replace your bonds with a fixed indexed annuities or a latter of them, or just a single one? And did you know that we can actually get you a 10% immediate bonus on any money you put into a fixed indexed annuity? No questions asked. There’s no life insurance qualification of medical reviews or anything like that. It’s, you know, because annuities are insurance against you living too long and life insurance is insurance against you living too short or too briefly. And we want to do everything we can to help protect your assets and also build our smart retirement income plan. So we’ve got, like 5 minutes left in this segment and. Sam and I both want to get going on the smart income side, but I wanted to quickly recap. Listen, smart review. You should do a smart review of your portfolio each and every year. And are you paying too much in fees? What’s your tax situation like? How much money do you have in your tax free buckets? Do you have indexed universal life policies and you have Roth IRAs? If you don’t, you should come in and talk to us.

Ford Stokes:
You should go ahead and reach out at active wealth dot com that’s active wealth dot com and click that schedule a consultation button. If you don’t know the fees you’re paying within your portfolio in the form of an expense ratio, if you don’t know what an expense ratio is, then you need to come and talk to us and you need to give us a call at 7706851777. Or let’s say you don’t know the risk you’re taking. You don’t know the correlation of your assets. That’s another reason you should go ahead and reach out to us at active wealth dot com. Those are all good reasons to inspectors you expect and do a smart review of your current portfolio. And that was another element of a smart retirement plan. And at the end of the show, in the final countdown, I’ll go over all of the different elements of a smart retirement plan that we’ve covered so far in this series. Next is smart income. Listen, we’ve gone through some of this stuff before, but too many people think retirement is about building one big nest egg. You need to have a plan to replace your income and to fund your monthly expenses. Keep in mind, some income sources are taxable while other sources are tax free. And our definition, by the way, of tax free investment, it does not contribute to taxes on our our income from that asset.

Ford Stokes:
It also doesn’t contribute to taxes on the principal, obviously, to the. So we don’t have taxes on the growth or the principal. It also will not contribute to additional taxes on our Social Security income benefit and will also also not trigger additional Medicare surcharges in the form of Irma. If. Those four things do not happen with a with an investment, then that investment is truly tax free. Let me let me review those one more time for you. Number one, is it it won’t include taxes on the principal, your original principal. Two. It won’t include taxes on the gains from your principal and the and and the other gains you’ve had previously. Number three, it won’t contribute to additional taxes on your Social Security income benefit. And number four, it will not contribute to additional Medicare surcharges. Make sense? Okay. Now let’s kind of get into Social Security because Social Security is part of that income plan. Social Security Act was signed into law in 1935 by President Roosevelt. First payments were made available in 1940. Took them a while. Social Security is one of the largest government programs in the world. By the way, when they signed it into law in 1940, there were 43 workers for every Social Security recipient. Today, there’s 2.7 workers for every Social Security recipient. Do you think you need to build your own smart income plan for your retirement? By the way, the Congressional Budget Office came out and said that the Social Security trust fund will run out of money in 2034.

Ford Stokes:
That’s 12 years from now, folks. 12 years. Your retirement is going to last longer than that. More than likely. We’ve got to do everything we can to have a smart income plan. I do think you’re going to continue to get Social Security. It may not be the exact amount. You may not get all these cost of living adjustments and all those things. And there may be you may be getting $0.66 on the dollar compared to what you’re getting now in the future. But I do think you will end up getting Social Security. But you need to have a plan for getting less Social Security and also getting less buying power with all this inflation going on. And Social Security is one of the largest government programs in the world. 176 million people paid Social Security taxes in 2021. As of 20th April 2022, more than 65.5 million Americans are receiving Social Security benefits. That is an enormous amount of people. As the life expectancy of Americans increases, there are concerns that the program may not be able to support retirees with less people in the workforce. And when we come back from the break, we’re going to talk about ways to maximize your Social Security income and also how to build your own personal pension. It absolutely is possible we can help you do that and just come right back and listen to us for segment three of the active wealth show right here on AM 920, The Answer. The lights go down in the California town.

Producer:
People are in. Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit Activ. Welcome to learn more and schedule an appointment. Thanks for listening to the active well show and subscribing wherever you listen to podcasts.

Ford Stokes:
And welcome back Activators, the active wealth show on Ford Stokes, your chief financial advisor, got Sam Davis here on the board with us as our executive producer. So we’re talking about income, smart income, and we’re as an element of a smart retirement plan. We’re also talking about Social Security income. So you become eligible for benefits and Social Security when you reach 62 years of age and have been contributing to the program for at least ten years. However, waiting until your full retirement age or FRA gives you increased monthly benefits, let me ask you, as you’re driving around out there, do you feel like you deserve more than $0.75 in the dollar that you put in to Social Security? And I would say, yes. Yes, you do, because you’re a hardworking American and you deserve to get the benefits that America gives out. So if you take your Social Security at age 62 because you’re thinking, well, it’s not going to be around for me and I just want to start it. You’re going to be taking $0.75 on the dollar. If you get all the way to 66 or 67 years old. Depending on your age if you’re born after 1960. Congratulations. Your full retirement age is 67. If you’re born before 1960, you’re like 66 in a few months for your full retirement age. But your full retirement age is determined absolutely by the year you were born. If you’re born in 1955 as an example, you’re your FRA is 66 years and two months and it gradually it increases gradually to 67.

Ford Stokes:
But again, everybody that was born in 1967 or after, congratulations, your full retirement age is 67 years old. Spouses also get this question a lot. Spouses can collect benefits based on their own earnings or their spouses earnings. The amount of money you can receive from Social Security is determined from your average index, monthly earnings or. During our 35 highest earning years as of April 22, the average monthly benefit was $1,588.89 or 19,000 zero 66 and $0.68 annually. For every year you delay collecting your benefits starting at age 62 and ending at age 70, your benefit increases by 8%. Also, I get this question quite a bit. Your maximum monthly benefit in 2022 for people age 62 is $2,364. The max monthly benefit in 2022 for people age 70 is $4,194. There’s also an annual cost of living adjustment that ensures that your retirement funds don’t lose value due to inflation. Everybody can go to annuity 360 net, that’s annuity 360 net. If you want to get a free copy of my book, Annuity 3060. Chapter three is all the famous people who’ve invested in annuities and have built their own smart income plan. It’s a fun chapter and you may want to read that. Also, you can get the audiobook from Audible or Amazon. And we had a gentleman from Dallas, Texas that listen to the audio book and called us and we had an appointment with him and we helped him out.

Ford Stokes:
So that was a lot of fun. He was he’s a physician in Dallas, Texas. But here’s kind of the next part of smart income. You want to build an analysis of your income plan because you want to have you want to know what your retirement income is going to be in advance. You want to have those results in advance. We call this results and Advanced Planning. So we want to start calculating for you or retirement income gap whether you have a surplus or you have a negative retirement income gap. According to an NHP Foundation study, 62% of baby boomers believe Social Security will provide at least half of their income during retirement. Your Social Security benefits alone are not going to be enough to maintain your standard of living. The average monthly benefit is $542.22, or about 18,506 annually. 76% of retirees say income stability is a top concern for their retirement. That’s 76% of all retirees. And what is a retirement income gap? You’ve got core expenses like food, clothing, shelter, taxes, health care needs, and then discretionary expenses, eating out entertainment once buying gifts, Christmas gifts for the grandkids, things like that. And guaranteed income sources also help you because you’ve got core expenses plus your discretionary expenses, minus your guaranteed income sources of pensions and Social Security and 4% withdrawals from your your retirement nest egg that equals your retirement income gap. So you’re taking you’re taking your expenses, all of your expenses, discretionary and non-discretionary expenses, and then you’re subtracting your income from it.

Ford Stokes:
And and then that will give you what your income gap is. And you can also do it the other way. And you can put your income first and put your expenses second, and you can come up with whether you have a positive or negative income gap. And here’s how to fill your retirement income gap. You can make sure you’re saving money during your high earning years, trying to save 10 to 15% more than the 3 to 6%. You don’t just have to invest up to the match, right? You could do 3% with your 41k plan if that’s what the company matches. And then what you can do is drop back and do IRA and Roth IRA contributions separately that you can control that money to under review your monthly expenses for any extraneous payments. Also, one really good way to do it is go get true bill or change your check card or change your credit card number so that all those other card charges that are automatic charges will be declined because that card is no longer that card number is no longer valid. That’s a good way to make sure that you are getting control of your expenses. You want to consider delaying Social Security as well. You want to review your investment withdrawal strategy and you want to consider investing in annuities to establish an income stream you can never outlive. That’s a really good idea.

Producer:
It’s time for this week’s Problem Solver.

Ford Stokes:
A client of mine actually went to high school with her. She played tennis on the girls team when I played tennis on the boys team. Super great, neat, neat lady. She’s inheriting $2.2 million from her father. Her father was did really well. And the client, her husband, they generated about $180,000 in annual household income. They have two children. The client wants to retire early and replace her $30,000 per year income. She’s a paralegal and she works part time. She plays a lot of tennis still to stay in shape. She’s very concerned about market volatility. They’ve lost more than 24% in the market this year. They also want to reduce the fees they’re paying to manage their assets. Their father’s advisor was charging him 1.5% and the client is taking approximately a third of her assets and investing into a fixed index annuity that will protect the principal. And so therefore she can’t lose value contractually and has a free income rider that will allow her to receive an income for life starting at year two because she wants to hold back 30,000 of the investment and invest a third of her assets, 33% of our assets. So it’s actually her total assets are like 2.4 million. She’s going to invest 800,000 into this annuity.

Ford Stokes:
And she’s and she also doesn’t have any additional charges. There’s no portfolio fees and there’s no advisory fees. So she’s saving 1.5% off that 800,000 immediately, which is a lot of money to save. The value of the annuity should be expected to grow over time. And it’s tied to an index that this one happens to be. The Credit Suisse Raven Pack is the index, and she’s getting 95% of the growth and the company is taking 5% of the growth. But she’s getting market like gains even though her money is 100% financial reserved by investing into the ten year US Treasury. But again, she won’t be paying unnecessary fees anymore because the bonds in our portfolio have been replaced. They’re also saving more than literally they’re saving 100% of the 1.5 advisory fees on that bond portion because they’ve replaced the bonds with fixed index annuities, which do not have advisory and portfolio fees. These adjustments will allow the client to retire now and enjoy playing tennis while her spouse continues to work for a few more years. And he’s going to make 150,000 a year. Listen, all of our clients have one thing in common, whether it’s business owners, pre-retirees or retirees, widows or married couples filing jointly, things like that.

Ford Stokes:
They all have one thing in common. They have one check to last the rest of their lives. And we take that responsibility very seriously. And we also want to protect and make sure that we’ve locked up some of their money to generate income. If something happens with Social Security or something happens in the market, we’re taking risk off the table for our clients. We’re going to protect and grow your money by investing into an annuity with 100% financial reserve requirement fi. Fdic rules require a 3 to 10% financial reserve requirement. We think that’s a little bit riskier than having a 100% financial reserve requirement where your money is not invested in the market, but it does allow you to have market like gains without market risk. And we’re going to come back and talk about our cost cutter in our last segment will also play our chapter Chapter nine on Personal Pension from my book Annuity 360. Again, if you want that book, all you’ve got to do is visit Annuity 360 net. That’s Annuity 360 net. And we hope you come right back to learn more about the smart income element of a smart retirement plan. You watch the active wealth show right here on AM 920.

Well, it’s a lot easier to keep shine like a silent getaway for night.

Producer:
Maybe 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 annuities pension 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. Where’s the best place to hang your hat when you retire? I’m Matt McClure with a retirement radio network powered by a marriage life, whether retirement is just around the corner or several years away. Time is ticking on planning not only your finances for your later years, but where you want to live out your post-retirement life. Personal Finance Website Wallethub recently released its list of Best States to retire in 2022.

Jill Gonzalez:
Florida, unsurprisingly, ranked number one, followed by Virginia, Colorado, Delaware and Minnesota.

Producer:
While at job analyst Jill Gonzalez.

Jill Gonzalez:
The top ten continues with North Dakota, Montana, Utah, Arizona and New Hampshire.

Producer:
So what makes a state one of the best to retire in?

Jill Gonzalez:
The study was based on 47 metrics, including tax friendliness, the elderly, population, golf courses per capita and shoreline mileage.

Producer:
As for Florida, which landed the top spot this.

Jill Gonzalez:
Year, Florida excelled in tax friendliness, fellow retirees and things to do, but could use improvement with home health aides per capita.

Producer:
Even though the Sunshine State is number one overall, if finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years? New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is, naturally, the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement and what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future with the Retirement Radio Network powered by a metro life. I’m Matt McClure. Social Security will get a big cost of living adjustment next year, but there could be some consequences you might not have considered. I’m Matt McClure with the Retirement Radio Network Powered by a Mirror Life. A new report by the Senior Citizens League says Social Security beneficiaries could see a cost of living adjustment or COLA as high as 10.1% next year. The reason, inflation running at a 40 year high.

Jill Gonzalez:
This is a very, very unusual and unprecedented pattern of inflation that we’re experiencing.

Producer:
Mary Johnson with the nonprofit group, told WPTF TV that surveys show inflation has caused about half of Americans to spend their emergency savings and people are carrying more debt on their credit cards. So the highest jump in Social Security payments since 1981 would be a good thing, right? Well, Johnson says it’s better than no increase, but there are some things to be aware of.

Jill Gonzalez:
In fact, you can get penalized if you think your tax liability is going to be 10% more next year than you’re paying now. You can be penalized if you don’t send in estimated payments or have more money withheld.

Producer:
She told the TV station. The increase would not be enough to cover a jump in Medicare Part B premiums, which are taken directly out of Social Security checks. And she says higher incomes mean some seniors could no longer be eligible for some other government benefits.

Jill Gonzalez:
And then a whole 15% were made in eligible because they were their incomes increased over the income limit for food stamps or rental subsidies or the programs in their area.

Producer:
So what should you do? Johnson says Prepare now. Talk to a financial adviser to help you get ready ahead of time and contact local nonprofits if you need help paying bills. So are you prepared for the unintended consequences of a larger Social Security check? That’s a key question to consider as inflation impacts all our lives. With the Retirement Radio Network powered by AmeriLife, I’m Matt McClure.

Producer:
We have Ford Stokes, author of two important personal finance books, Annuity 360 and taxes are on sale here on AM 920. The answer, as the host of the active wealth show Saturdays at 12 noon and Sundays at 11 a.

Ford Stokes:
We just heard that important vignette from Matt McClure with the Retirement Radio Network. It’s so great to have Matt Sam as part of our network that does these reports for us and informs our listeners. I just I just think it’s great that we’ve got this level of production quality for the show and we’ve been able to grow the production quality of the show because we’ve got so many people listening to this show and so many, so many people call in and and work with us and and it’s allowed us to do this. So we really appreciate the listeners giving us this opportunity to build a better show for them.

Producer:
Yeah. And you know, there was some great information in there. The official collar adjustment will be based off of data coming out over the next month, but looking at nearly a 10% increase due to inflation, that’s just been flying high over the last year. So some relief for people who receive Social Security now, but inflation is still very much a problem.

Ford Stokes:
Well, and everybody every financial advisor and economist that I talked to and I do talk to quite a bit, they’re saying that, you know, there’s no way that COLA keeps pace with what the real rate of inflation is. And we would have to agree with them. Right. But at least it is something and it does help the folks that are living on fixed income, you know, get some relief and to buy more, you know, chicken breasts and bread and milk at the grocery store. Right. Also, don’t stop drinking milk and don’t stop ingesting calcium in your later years. You want to keep those bones going, going and grow and grow right there. My wife’s a dietitian, so she works with people on that kind of stuff. Sam, why don’t you give them this week in history?

Producer:
It’s this week in history.

Producer:
Yes. On This Week in history. We’re going to get in the time machine forward and we’re going to go back to 1972. My pants just turned into bellbottoms when we stepped out of that time machine there. And The Price Is Right began airing with Bob Barker as its host, over 9000 episodes forward. So we’ve got some catching up to do.

Ford Stokes:
Yeah, no doubt about it. It’s showcase showdown and all that stuff. It’s amazing. That was always the show that you watched when you were at home sick and it was must see TV from 11 to 12 noon. And while your your friends and classmates were at school, that part was always awesome. Now we want to play this important chapter for Annuity 360. And again, you can get my book Annuity 360 at Annuity 360 net. That’s Annuity 360 dot net. It’s the numbers 360. So it’s annuity 360. net. It’s all about how to build your own personal pension and you really can do it and we can help you do it. Visit Active Wealth dot com and click that schedule consultation button in the upper right corner. We’ll give you a free personal pension plan. We’ll also do an annuity x ray for you if you want that, if you currently have one, that you’ve got account value with it. But you’re going to want to hear this chapter on how to build your own personal pension. Chapter nine You can create your own personal pension. Big idea. Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have an income you can never outlive.

Ford Stokes:
An annuity can be a great investment for your portfolio, but I encourage you to be careful that you don’t overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date. You specify you don’t want an annuity company to charge you too much to simply pay your money back to you. I’m confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don’t give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee. But you can still create a personal pension without an income rider on your annuity. If you get an annuity with an income rider but don’t utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuities in your annuity without receiving a single benefit for that annual fee.

Ford Stokes:
This income rider fee will also draw down your account value or principle, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver in. Increasing payments without an income rider, you should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you’ll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals. From your accumulation based annuity policy, many accumulation annuities are set up to be RMD friendly, so you won’t suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier. Inspect what you expect with any annuity. Don’t just go with what the annuity agent or advisor tells you.

Ford Stokes:
Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they’ll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income rider, know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you’re working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account. And now the final countdown. It’s the final.

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

Ford Stokes:
So on today’s show, we talked about two more elements. We talked about smart review, which is very important. That allows you to inspector you expect on your retirement, you need to be looking at your retirement assets and how they’re performing every 3 to 6 months for sure. Also, you want to understand the fees you’re paying, the risk you’re taking, and the best way to do that is to visit Active Wealth dot com and click that schedule a consultation button or pick the phone up and give us a call. Even on this Labor Day weekend, Deborah and her team are standing by. All you’ve got to do is call us at 7706851777. Again, 7706851777. We’ll get you on my calendar. And today we talked about smart review and smart income and how that is all very much an important part of building a smart retirement plan. Listen, when you’re trying to seek information about your own retirement plan, I would encourage you if you’re going to be a bear, be a grizzly, be as aggressive as you possibly can to seek information so you can build a successful retirement, protect and grow your assets, build that tax efficient, fee efficient and market efficient portfolio, and we’ll do everything we can to help you. All you’ve got to do is reach out to us at active wealth dot com that’s active wealth dot com. And when we come back next week, we’re going to talk about smart health and smart care as part of a smart retirement plan with Bonnie Dobbs and the team over at Medicare and other red tape. And we’re so glad you’ve been with us here in this entire series and have a great Labor Day weekend, everybody.

Producer:
Thanks for listening to the Act of 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, Fareed Stokes, at 7706851777 or visit Active Wealth Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BC but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance can be used as an indicator to determine future results.

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