Ford Stokes discusses the first three components of a smart retirement plan. Tune-in over the next few weeks to hear the complete smart retirement plan series.
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AWS Full Show 8.11.mp3: Audio automatically transcribed by Sonix
AWS Full Show 8.11.mp3: 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. You’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:
Welcome to weekend, everybody. I’m Ford Stokes, your chief financial advisor. And I’m joined by Sam Davis, our executive producer. Sam, say hi to everybody.
Sam Davis:
Hey, everybody. Welcome to the Active Wealth Show. I hope you’re having a good weekend. Appreciate you listening. Wherever you’re at, whether you’re in the Atlanta area or you’re listening to the podcast, wherever podcasts are found. Appreciate you being with us here on the Active Wealth Show.
Ford Stokes:
It’s really good to be with everybody. It’s also great to have our weekend ambassador with Sam Davis. Welcome us to the weekend. By the way, Sam, I took my brother, he’s my half brother. He’s 25 years younger than I am and we’re pretty close. And my dad, who is 82 years young and he’s going to have a birthday coming up in October, I took them to the the new The Top Gun movie. I realized it’s been out a little while. We went over to Park Waypoint. We had we had dinner at Houston’s first and luckily we had a reservation. I couldn’t believe how packed Houston’s was on Wednesday at 530, but it was an hour and a half wait if you didn’t have a reservation. So I was really glad to have that. But the new Top Gun movie, I got to tell you, Sam, I liked it better than the first one.
Sam Davis:
Yeah. I’ve been telling people if you liked the first one, the sequel is just as good. I really think it’s kind of like a love letter to our American military, and it’s really just such a thrill ride to watch that movie, what they’re able to do with those planes. Incredible. If you haven’t seen it, I would recommend go see the new Top Gun.
Ford Stokes:
No question. I’ll tell you what a what a naval recruiting and Air Force recruiting, just commercial that is. It’s unbelievable. I mean, they flew real F-18s. It was it was really neat. It was they did a great job with it all. And it was just cool to see Tom Cruise and in a cockpit. It was also neat to see he and Jennifer Connelly actually flying an old Mustang, you know, fighter. Jet fighter prop that that actually was part of the one of the planes, the planes that won World War Two. That was neat to see because he he’s a licensed pilot and can do all that. And they had all the pictures around and taken video of he and Jennifer Connelly fly. That was just super neat. That was just impressive. So shout out to the those folks that made that movie, my brother in law who flew the F-18 growler for the U.S. Navy, which is an F-18, but it’s got a lot of technology on it. And he did Top Gun School for that type of plane as well. He loves that movie and and said it was very realistic. So it was great to hear from my brother in law on that. All right. So here’s what we’re going to do for the next four or five weeks. You’re going to want to tune in every single week, whether you’re you’re catching us on Saturdays or Sundays or you’re catching us on active, well showed. You’re going to want to be a part of the active.
Ford Stokes:
Well, sure. You’re going to want to listen to the active wealth show over the next four or five weeks. Let’s call it five weeks, because we’ll wrap it up. We’re going to do a series called The Smart Retirement Plan, and we’re going to walk you step by step through how to build a smart retirement plan. We’ve done it a little bit in the past. I’m in the process of writing the Smart Retirement Plan book. That is my will be my third book. I’m in the process of writing it. Shout out to Ciara Wilson, who’s my researcher, and we’re working diligently and hard at it. So we’re going to share a little bit of the excerpts from that book, but not really an audio book. We’re just going to give you some tips and and data and everything based on that. And we’re going to walk you step by step through how to build a smart retirement plan for your own retirement. Because we want to build a tax efficient, fee efficient and market efficient portfolio for you so you can have a successful retirement so you can protect and grow your hard earned money. But it’s also your hard save money. It’s harder to save. So that’s what we’re going to do over the next four or five weeks. We’re also I want to give a shout out to Gerri. I’m not going to share his last name, but he called in to my office this week and said, Hey, you haven’t talked about structured notes in a while.
Ford Stokes:
I’d like to know what structured note you have available for this month. If you’re interested in buying a structured note or starting a structured note ladder, because we recommend you implement a structured note ladder of five consecutive notes over five consecutive months with five different banks that also have five different starting points to the indexes. And also, I want to remind everybody that. Your principal is 100% protected. If from the time you purchase a structured note, you’re the indexes that are the underlying indexes that it is tied to, which would be the S&P 500, the NASDAQ 100, and the Russell 2000. As long as all three of those do not lose any of those three, as long as any of those three do not lose 30% of their value, your principal is 100% protected as long as they don’t hit that trigger level, which we would call a trigger event. If you hit the trigger event, then your structured note rides the market on the lowest performing index of the three. That’s why we ladder them over five consecutive months. A structure note is a security. It is at risk in the marketplace, but I would also share that. They’re a great way to get a disproportionate interest rate and coupon rate of interest on your money. But we recommend it. Let’s say you want to invest $100,000 in a structured note. You’re like, Hey, I want to try these one. You just need to call our office at 7706851777 and 7706851777.
Ford Stokes:
And we’ll get you started into an account and we’ll get get you invested in that first note. But you would invest 20,000 in this month, 20,000 in September, 20,000 in October, 20,000 in November and 20,000 in December for five consecutive months. And they would all have different coupon rates because they’re not all going to be consistent, but they’re going to be close. They’re going to be within a point or two of that 14% minimum for this month that’s being offered by Bank of America. We also only work with highly rated carriers. That’s a rated highly rated banks that are a rated and above banks, because we want to make sure that these banks will make good on their guarantee to give you that coupon rate. Also, they need to make good on giving your principal back, your full principal if your structured note has not hit the trigger level. This is also a great bond replacement strategy in addition to fixed index annuities and you can really make a disproportionate share. Of interest for you and your retirement plan by implementing. A structured note ladder with five structured notes together. Now normally we’d start with Market Update, but I was fresh off a call with my good friend Gerry, who listens to the show. He’s also a client and he’s probably listening to the show right now while he’s working on his houses. And I give him credit. He works for a major employer here in Atlanta as well.
Ford Stokes:
And he’s successful both in working on houses and and renting them out or flipping them, as well as his core job as an executive. And we want to make sure that we were sharing all the information about our August structured note with you guys and gals and also wanted to just give a shout out to Gerry. So Gerry, thanks for making sure that we do speak about structured notes on this week’s show. Now the rest of the show we’re going to we’re going to basically. Go through what is a smart retirement plan. We’re also going to share a market update as soon as we come back from the break. But. Listen. What you want to do is if you really want a smart financial plan or a smart retirement plan, you’re going to want to come in and see us. And I want to kind of give you an idea of what it looks like to get your free, full, smart retirement plan consultation. We provide comprehensive consults at no cost to our listeners. There’s no obligation. You only work with us if it’s best for you. We we will tell you if you’re better off staying where you’re at. It’s a good idea to kind of analyze your current financial situation. It’s also a really good idea to understand the risk you’re taking, the fees you’re paying, and the correlation of your assets. We do all of those. So here’s what you get when you meet with us. You get one.
Ford Stokes:
A portfolio analysis of your current portfolio has nothing to do with us. We’re just going to give you an institutional level analysis. Three A third party with Morningstar of your current portfolio, you’re going to understand the expense ratio in your portfolio. You’re going to understand the duration of your bonds, you’re understand the correlation of your assets. You’re going to understand also what is an actual number of risk, which is standard deviation. You’re going to see a measurement of risk within your portfolio, so therefore you can understand what you’re facing in retirement. We call this results in advanced planning. So you’re going to get the portfolio analysis that’s one. Two, you’re going to get a Social Security maximization report. If you haven’t started taking Social Security, we’ll do that. Absolutely. For free for you. We’ll take your top 35 earning years and we will put those into our system and it will spit out a great report that gives you some what if scenarios on when you should take Social Security income and when you shouldn’t. Then the third is we’ll give you a retirement income gap analysis. Absolutely. At no cost to you, whether it’s a positive or negative. And then number four is we’re going to give you a financial plan to your 95th birthday. With your current assets and your current portfolio has nothing to do with us, with your current expenses and income. And when you plan to retire and all that great stuff with your Social Security income factored in as well.
Ford Stokes:
And then fifth, we’re going to give you a. Full retirement plan with our recommended portfolios. And number six is we’re going to give you one with a Roth ladder conversion using our recommended portfolios as well. So I think. It’s a really great value. It’s usually like a $100 value. I think you’re really going to like what comes out of that free, smart retirement consultation. All you got to do is visit active, welcome, click that, schedule a consultation button in the upper right corner. And we’re happy to work with you now for the rest of the show we’re going to talk about. What a smart retirement plan is. What are the elements of a smart retirement plan? We’re going to continue this in a series over the next five weeks. You’re going to want to tune in, take notes, and we’ll also give you a full report on how to build a smart retirement plan. Absolutely no cost to you. All you have to do is send me an email at Forward at Active. Well, that’s free and active. Welcome or just give us a call. 7706851777. Again, 7706851777. You’re going to hear this market update because there’s been a lot that’s happened this week politically and also what’s going on with inflation and what could be the largest cost of living adjustment that Social Security Administration has given out in over 40 years. You’re going to want to come back and hear all of this on the active well show right here on AM 928.
Sam Davis:
Faith is good to me. You know, she’s happy as can be, you know. She said so.
I’m in love.
Producer:
Structured notes involved risks not associated with an investment in ordinary debt securities. The securities are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. Nor are the obligations of or guaranteed by a bank. The securities will not be listed on any securities exchange and the secondary trading may be limited. Therefore, there may be little or no secondary market for the securities. Accordingly, you should be willing to hold your securities to maturity. The securities are subject to the credit risk of the issuing bank, and any actual or anticipated changes to its credit rating or credit spreads may adversely affect the market value of the securities. Remember, all of Ford’s listeners receive a free financial consultation just for listening to the show. Visit active health.com to learn more and schedule an appointment. Thanks for listening to the active well show and subscribing wherever you listen to podcasts.
Ford Stokes:
All right. Welcome back to the active well show activators. I’m Ford Stokes, your chief financial advisor. And I’m joined by Sam Davis, our executive producer. And Sam wanted me to make sure that I shared a detailed market update this week. And so I’m going to go ahead and do that now.
Producer:
Your active wealth market update.
Ford Stokes:
A lot of people didn’t know with the Inflation Reduction Act that the Democrats added a stock buyback tax to inflation to the Inflation Reduction Act. And here’s what to know. The Inflation Reduction Act imposed a 1% excise tax on corporate stock buybacks. The sweeping climate health care and tax bill that the Senate and Democrats passed Sunday includes one of the biggest tax hikes in decades, including a new levy for corporations that repurchased their own stock. The Inflation Reduction Act, which passed along party lines with Democrats employing the budget reconciliation process, would raise an estimated 739 billion over the next decade, with the revenues going towards initiatives designed to combat climate change and curb pharmaceutical prices, as well as reduce efforts to reduce the nation’s $30 trillion debt. They also guys employed, they greenlighted 87,000 new IRS agents that that wouldn’t fit in some college football stadiums in the southeast, by the way, it includes $433 Billion in new spending, while roughly 300 billion of the new revenue raised would go toward paying down the nation’s deficit, which isn’t very much of 300 billion on all the trillions of dollars that we owe is something else. Some of the main revenue raisers stem from new levies on wealthy businesses, including a 1% excise tax like we talked about, that is poised to take effect in 2023. Who estimated this new levy will raise 74 billion over the next decade? Companies have been allowed to buy their own shares since 1982, and the practice has since become commonplace on Wall Street.
Ford Stokes:
In 2019, stock buybacks hit a record $1 trillion, according to the SEC. Buybacks already hit a record 281 billion in the first three months of 2022, according to S&P analyst Howard. Howard Silverblatt Tough for me to say his name. Howard Silverblatt There we go, Sam. Although they were down 17.4% in the second quarter, I don’t even want to read this quote from Senator Chuck Schumer because I’m not a fan of his. But also the bill also imposed a 15% minimum tax on corporations based on profits. They publicly report on their financial statements to shareholders. The minimum tax would only apply to companies that reported more than $1,000,000,000 in income. Democrats say the levy would affect around 200 of the country’s largest corporations, with profits exceeding 1 billion that pay less than the current 21% rate for businesses. So there’s all that stuff. Ubs strategists, led by Selena Marcelle, meanwhile, projected the new taxes would have a very minimal 1% drag on the S&P 500 earnings per share, although some companies will be more affected than others. So it is interesting to note that that tax will be a drag on the S&P 500 and also the Goldman Sachs for forecasting a 1.5% decline per share of the S&P 500 from the the two taxes that that were proposed or actually were voted on and approved by the Senate for the Inflation Reduction Act that got passed with Kamala Harris, the vice president, casting the deciding vote on Sunday night.
Ford Stokes:
They did it late in the hours and tried to hide some of it. And also, by the way, not a single Republican voted for that act, by the way, just so you know. So that’s basically a good amount of we’ve had a good rebound in the market in the markets this week. That’s been very helpful. We’re super excited to see that. I’m not excited to see the jobless claims rise to the highest level in 2022. And number of Americans applying for unemployment hit its highest level in eight months. And the figures released Thursday by the Labor Department show that applications for the week ended August 6th rose to 262,000 from the downwardly revised 248,000 recorded a week earlier. It’s like they missed this mark every single week now with their estimates because the administration is trying to be too optimistic that is above the 2019 pre. Pandemic average of 218,000 claims and marked the highest level since mid November. That’s interesting. But now let me give you the update that you really want to hear. Next year. Social Security cost of living adjustment increase or COLA increase is on track to be the highest since 1981, when Social Security benefits rose 11.2% to keep pace with inflation, the highest cost of living increase on record was 14.3% in 1980, according to the Wall Street Journal.
Ford Stokes:
So get ready for a large cola. Also, I wanted to remind everybody that the Congressional Budget Office at CBO is estimating that the Social Security trust will be out of money by 2034. That’s 12 years away. Now, folks. And. So I would encourage you to have an income plan, make sure you have a retirement income plan and get started in building a smart retirement plan that you can count on you not necessarily counting on Social Security. So as you came out in 1935. And when it did, there were over 43 workers for every Social Security, every Social Security benefit recipient. Today, there’s like 2.6 or 2.7 workers for every Social Security recipient because of the bulge of the baby boomers out there. It is a big deal. Also were people are having less kids, fewer and fewer kids these days. And that that hurts us as well. And I saw Elon Musk actually said, you know, one of the biggest threats to American society and also humankind is the decline the decline in population and is the birth rate. The birth rate decline is a big deal. So, Sam, now let’s go ahead and share our news sounder for our financial quote of the week.
Producer:
And now for some financial wisdom, it’s time for the Quote of the Week.
Ford Stokes:
It comes from Warren Buffett. He says if you don’t find a way to make money while you sleep, you will work until you die. Again, I want to read that one more time. If you don’t find a way to make money while you sleep, you will work until you die. So that is absolutely the case. So you really need to stay invested. We’re up about 15.5% from the bottom in middle of June. I think since June 16th. That’s 15.5% of your money that you didn’t get if you were all in cash. So you missed part of the rallies back and also the rallies this week. And I would encourage you to do everything you can to consider staying invested and also get some market like gains without market risk with replacing your bonds as bond. As interest rates continue to rise and bond interest rates continue to rise. The bonds you currently hold that have a lower interest rate are less attractive to investors. And so therefore you’re going to lose market value on your bonds. You have interest rate risk with bonds. And so what I would encourage you to do is to replace the bonds with fixed indexed annuities or structured notes or a combination of the two. There are two different types of products. A structured note is at risk. It is it is at risk in the market is a security, whereas a fixed indexed annuity is not at risk in the market.
Ford Stokes:
Your money is not invested in the stock market and it is a contract between you and the annuity company. And we like to work with highly rated carriers or triple B rated and above to make sure that we know that they can pay your money back. And also they come with a 100% financial reserve on the money you give them. They have to invest 100% of the money you give them into the ten year US Treasury bond and then they take the interest off of that at the end of year one and invest it into options in indexes like the S&P 500, the NASDAQ 100, the Credit Suisse Momentum, the Credit Suisse Raven Pack and other indices out there. So we’ve only got just a few seconds left. And in this segment, when we come back, we’re going to really kick off the Smart Retirement Plan series, and we’re going to go through what it means and then also start talking about the first elements of building a smart retirement plan so that you can protect and grow your wealth for a successful retirement. It is the active wealth show right here on AM 920. The answer, come right back so you can start engaging in this Smart Retirement Plan series.
Speaker5:
Someday more than ever and someday passing by. I’ll be working here forever. At least until I die. Damn the. Damn. It’s good. Don’t I supposed to get a rest this week and know that when I won’t?
Producer:
They say you don’t know what you don’t know, but a growing number of states are trying to fix that when it comes to finances. I’m Matt McClure with the Retirement Radio Network. Powered by a married life. In high school, students are often required to take advanced math courses like algebra and trigonometry. But for years, the basics of budgeting, bank accounts and savings have been neglected in the classroom. But that seems to be quickly changing. 21 states now require at least some form of financial education before students graduate high school. One of those states is Nevada Governor Steve Sisolak recently told CNBC a great percentage.
Sam Davis:
I think 50 some odd percent of Americans can’t cover 1000 emergency costs if it comes up without borrowing the money. So it tells us that we need to invest more. We have invested $2.5 Million from the state into these programs and to make sure that it gets out, we address access and equity so that everybody gets this education. It’s not just reserved for the upper class.
Producer:
Mississippi Governor Tate Reeves also told CNBC he knows firsthand how valuable a financial education can be. He graduated with a degree in economics and worked in the financial arena before running for office, which is.
Sam Davis:
One of the reasons that I’m so passionate about trying to encourage my fellow Mississippians and really my fellow Americans to to to make sure that financial literacy is available to as many people as possible. Because I really do think it can help Americans have a better life.
Producer:
In New Jersey, Governor Phil Murphy says programs there start as early as middle school.
Sam Davis:
There’s a temptation that comes with a lot of different things that you all of a sudden think you can afford and you don’t realize the consequences on the back end, whether it’s physical items, whether it’s meme stocks or whatever it might be, it’s so getting kids at the earliest ages possible, we think is critical.
Producer:
How well are the programs working? Well, it could be too early to tell. Money rates found mixed results in a recent survey, but its authors note that financial education itself is not a quick fix. So with more time, results could improve. So how educated are you when it comes to your personal finances and planning for retirement, and are you going to pass down that knowledge to future generations? Those are key questions to consider as our financial lives become more complicated with the retirement radio network powered by a married life, I’m Matt McClure. Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Thanks so much for listening to the active wealth show. Make sure to rate us everywhere you listen to podcasts, including Spotify.
Ford Stokes:
All right. Welcome back to the active wealth show Activators on Ford Stocks, your chief financial advisor. I’m joined by Sam Davis, our executive producer. So, Sam, we just heard that vignette about states like Florida with Ron DeSantis talking about financial education, how important it is. But what I wanted to do as part of this Smart Retirement Plan series and why people really need to better understand and seek information and seek financial education and why they need a plan. But also what I wanted to do is share some facts about where people are currently getting their financial education. Obviously, you as an activator, if you’re listening to this show, you want a tax efficient, fee efficient and market efficient portfolio. You want to protect and grow your wealth. You want to build a smart retirement plan so you can build for a successful future. Right. And and so but let me just share where people are actually getting their financial education. 26% are getting it from high school classes. 22% are getting it from parents and family. 21% are getting it from college classes and 18% are getting it from social media and websites. And only 7% say they’re educated by a financial advisor. That is frightening. Like you’re going to go back to your old high school classes and that’s how you’re going to build your financial future.
Ford Stokes:
Back to what Warren Buffett said. If you don’t find a way to make money while you sleep, you’re going to work until you die. So we need to do everything we can to figure out a way to make money while we’re sleeping. And specifically, we talk about this human capital versus actual capital. So when you’re young, you have a lot of human capital, you’ve got a lot of left, a lot of room left, a lot of capital left in your career. Right, Sam? You’re a young guy. You’ve got a lot of human capital left. You’ve also done a good job at saving. But at the same time, a lot of people that are older, let’s say you’re 65, 70 years old, you don’t have a lot of human capital left, but you should have a lot of capital that is making money while you sleep. And if you don’t, then you didn’t make the right decisions. And you need to look yourself in the mirror and you need to hustle up and save up. Right. So, Sam, just kind of your thoughts on what you’re trying to do as a as a young person who’s in his twenties trying to save and work and save and all that kind of stuff. Yeah.
Sam Davis:
So obviously if you’re younger, like you said, you’ve got time on your side. It’s going to be expected that throughout your life the market’s going to have a certain amount of fluctuations, it’s ups and downs, but generally we like that the market generally goes up, right? And so that’s why it’s good to get started while you’re younger and let compound interest work for you rather than against you. But on the other hand, you know, that’s why it’s so important to have a plan in place really before you’re ready to retire. You know, think of it as the retirement red zone, if you will, that few years before, in that few years after retirement, once you start taking distributions and stuff like that, it’s important to have that plan shirt up so that once you enter retirement that you’re going to be able to make sure that money lasts throughout your entire lifetime.
Ford Stokes:
Yeah, no question. And then also Fidelity Investments came out with their 2022 State of Retirement Planning study, and they are one of our custodians. We work with TD mostly TD Ameritrade, but also Fidelity is one of our custodians. And just to remind everybody that our custodians we work with high level custodians like Fidelity, Charles Schwab and TD Ameritrade, TD’s, our number one people seem to like that platform better. It’s also slightly less expensive for us in our clients. And what’s interesting is they came out with Fidelity Investments, their 2022 State of retirement planning study. As I said, one in four Americans are less confident about retirement now than they were before the events of the last two years. Not a shock there at all. I mean, we’ve got a COVID 19 pandemic and all the trillions of dollars that the US has taken on in debt, it’s it’s not a shock. Next is 71% of Americans are very concerned about the impact of inflation on retirement preparedness. Inflation really hurts the folks that have done a great job at saving, but who also are too conservative and secure with their money and they’re staying in bank CDs or they’re doing other things. You need to stay invested. You need to also consider a different way of going about a 6040 portfolio. As an example, you need to be careful about putting money in bonds right now while interest rates continue to rise because that is interest rate risk on the bonds that you’re currently buying are the ones that you have previously held because they’re going to be worth less.
Ford Stokes:
If somebody got a higher interest rate bond, that bond is going to be more attractive than your bond if you’ve got a lower interest rate. And then number three, they came out with on this Fidelity Investments 2022 state of retirement planning study was 31% do not know how to make sure their retirement savings keep up. They really have no idea. They don’t know how to build a personal pension. They don’t know how to protect and grow their wealth. They don’t know how to invest with smart risk strategies like tactical asset allocation and and also even some strategic allocation. They also don’t understand what a standard deviation is as as it is a measurement of risk. They don’t understand what an expense ratio is within their portfolio because they don’t understand the fees that are coming out of their portfolio each and every month or each and every year that don’t show up on their statements but do affect the bottom line value of their overall investments. And those are problems and we have to solve those problems. And one of the ways we’re going to try to solve it here over the next four or five weeks for you, our listener is we are going to share this full, smart retirement plan series and help you build a tax efficient, fee efficient and market efficient portfolio. Approximately half of Americans are at risk of not being able to maintain their pre-retirement standard of living after they stop working, said Angie Chen, a research economist at the Center for Retirement Research at Boston College.
Ford Stokes:
That’s remarkable. Approximately half of Americans are at risk of not being able to maintain their pre-retirement standard of living after they stop working. And one of the jokes I tell all the time is, you know. Wire farmers have been in on the sides. And a rice farmer told me this in Arkansas when I was duck hunting on his land, he said. It’s when they’re looking in the mailbox for the subsidy check. That’s why their their hats are bending on the sides, because they’re always looking for that mailbox money. Well, what are you going to do when the mailbox money stops? What are you going to do when you stop getting a check every two weeks? Or do you have a plan for that? Or is it just one big nest egg or do you have an actual retirement income plan? Because we can help you do that. And also, I want to just kind of share, hey, here’s what it’s like to work with us. We like to help folks like you every single day. It all starts with understanding what you want to do in retirement. What are your goals? Who are you with? How are you going to fund it? What are you doing? And also we want to try to help provide stability for you and your family. We organize a custom financial plan to fund your goals and expenses through a combination of guaranteed income strategies, social, social security maximization, and a whole lot more.
Ford Stokes:
So this this first part is we’re going to go to. It basically starts with a smart retirement plan. Starts with. Smart inspection. We want you. To do. A financial checkup. Checkup. It’s just like getting a checkup at the at the doctor’s office. You want to review your accounts, you want to look at your IRAs, your four one KS anywhere you hold assets, including cash. You want to check your balances. You want to review rates of return over the last 12, 13 months to 12 months, three years and five years. You want to answer this question? Do you have a positive or a negative income gap? Do you have an income gap or do you have an income surplus? Do you know what that is? If you don’t, then I would encourage you to pick the phone up and give us a call at 7706851777. Again, 7706851777. Or you can reach out to us at active Ofcom. Also you want to get an annuity x ray on any of your annuities or pension plans that you currently have. Are you considering a lump sum pension? Chances are I can do better for you. I can get you a 10%. Guaranteed immediate bonus. So if you’re facing an immediate lump sum kind of situation or taking your pension, we’ll actually do the analysis for you and show you where you’re better off likely taking the lump sum, getting a 10% bonus on your money, and also tying your money back to a market like index or market linked index, if you will.
Ford Stokes:
Because a lot of pensions are they use a product, an insurance product called S.p.a. A single premium immediate annuity. Those are really good at paying your money back. They’re not really good at growing your money. So you want to have the right kind of. Annuity to build your own pension. And also how much are you paying in fees alone? Like what are you paying in advisory fees? What are you paying in portfolio fees? What are you paying? An expense ratio? This is all part of that smart inspection that we feel like is really kind of the start of it. And also want to help you with tax planning. Do you have a tax problem? Do you have all of your money sitting in an IRA? Or for O and K or A four or three B or Sep IRA or simple IRA. If you do, guess what? The IRS is your partner in retirement. We can help you delete the IRS out of being your partner with your retirement account through a Roth ladder conversion plan and or life insurance to build up cash flow and life insurance. You can build tax free income during your retirement years. Does that sound like a good thing? Would you like to use. Life insurance to build tax free income. And beat the tax man out of taking more money out of out of your account.
Ford Stokes:
Would you like to implement a consistent and strategic Roth ladder conversion over a 5 to 7 year period before you turn 872 to minimize the taxes you’re going to pay during your 35 plus retirement years? I think that makes sense to me. So. Let us help you. Also review any life insurance coverage you have, if you’ve got cash value of whole life insurance that you’ve had for years and years, and it’s not growing very much and you see it declining because the cost of health and death benefit and the cost of life insurance. Then we’re going to help you figure out what to do about analyzing your policies. We can even consider a 1035 tax free exchange and moving the cash value over to an index universal life policy that can help protect and grow your money and also generate tax free income during your 35 plus retirement years. We’ll help you do that. And we’re going to go to this next segment here. We’ve run out of time on this segment. But when we come back from the break, we’re going to talk about smart vision and smart planning. And we’re talking about the Smart Retirement Plan series. Then we’re kicking off this week and it’s going over the next five weeks. You want to come back to this last segment. We’re going to talk about smart vision and smart planning as part of your smart retirement plan. So stay active. Well, show right here on at 920. The answer.
And I. Can I come in? I go to bed? The same way.
Producer:
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 annuity 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.
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. That’s the host of the active wealth show Saturdays at 12 noon and Sundays at 11 a.m..
Sitting in the morning sun.
Ford Stokes:
I’ll be sitting and welcome back activators to the act of well show I’m Ford Stokes your chief financial advisor joined by Sam Davis our executive producer. And Sam, let’s go ahead and play the problem solver.
Producer:
It’s time for this week’s Problem Solver.
Ford Stokes:
The problem for the week is I had a man who just turned 70 and still works. His wife does not work and is ready for him to retire. The wife wants to travel, but the husband is concerned that they don’t have enough money saved up to retire the way they want. The man has $900,000 saved in a41k. The couple would receive 4800 a month in combined Social Security and their expenses are at around 5500 a month. By replacing the bonds and investing into an annuity, they will generate an additional 2000 a month of income for life. They also found ways to cut their monthly expenses to fill their retirement income gap so that they end up having an income surplus, not an income gap. They will save money by also deleting the portfolio and advisory fees that are associated with the bond portion of the income portion of their portfolio. So they’re taking plus the the old IRA that he’s got. He’s got like $1,000,000 total. So he’s taking 400,000 and investing into an annuity and he’s getting a significant rate of return. From an income perspective, but also it’s illustrating at a significant rate of return by the annuity carrier. So they’re getting market like gains without market risk and because their annuity is tied to an index. It just so happened to be the Credit Suisse Raven Pack is the is the index that this one’s tied to.
Ford Stokes:
And they’re getting 95% participation in how that index performs. And what that’s also doing is helping taking care of the annual cost of living adjustments that will help them outpace inflation. Their big strategy was their biggest wealth generator was his personal income. And now they’re also looking at trying to replace that income, and they’re concerned about investing in bonds. And so they’re going to replace the bonds in their portfolio and they’re going to be more aggressive with the 60% of their portfolio going forward. So because they’ve got 40% of it locked up into an annuity, that’s going to be paying them income starting in year two. And they also got 10% immediate bonus on their money and they’ve got a significant rate of return as well, which we think is really good stuff. So if you want to look at how an annuity could help you, all you’ve got to do is reach out to us at 7706851777. How a Bond Replacement Strategy Could Really Help You. You can also visit Active Wealth dot com and click that schedule a consultation button in the upper right corner. You’ll meet directly with me. You won’t meet with a down line advisor and we’re happy to help you. So let’s go back to this smart retirement series, if we can. Again, our goal here is to help you build a smart overall retirement plan. And hopefully you’re taking notes.
Ford Stokes:
So the first one really is. So we’re talking about three big things this week. We’re talking about. Smart vision, smart inspection, and then smart planning. So those are the first three. So the vision is, what are you doing during your retirement years? Who are you with? Who are you taking care of? What are your goals specifically on who you taking care of? Did you know there’s 41 million unpaid caregivers in the United States and most of those are female spouses taking care of their husbands. So you need to have a plan for that. And also. How do you plan to fund your your plans? I mean, if you want to travel, do you want to help out the church? Do you want to help out other charities? You want to volunteer? Do you want to relaunch? And do you want to learn how to play the drums? You know, what do you want to do? Do you want to build a second business and and do something? I, I met a great guy in coming Georgia who started his own. Golf cart repair business about a year before COVID hit. And then he just was crazy inundated with business. And he did it for his son. He did it to create it for his son. And they just keep expanding and keep expanding. And the guy was retired. He just used a portion of his assets to start this golf cart repair business and golf cart sales business and and golf cart parts business.
Ford Stokes:
And he’s just exploding. He just relaunched. So you need to have a smart vision for your retirement. For him, it was, hey, you know what I need to do? I need to make sure my son has a business that he can build and grow in and have safety on that. So that was that was his vision for it. So you need to do you definitely need to have a smart vision for your retirement. We just talked about smart inspection in the last segment. But again, you want to do a financial checkbook check up to understand what’s going on with any annuities you have. Also, any life insurance policies you have. And also get an understanding of of your current portfolio and your IRA or four on K and or your four or three B and say, hey, what am I paying in fees? You know, what’s the risk I’m taking? What’s my expense ratio, what’s my standard deviation, which is a measurement risk, all that stuff. And then smart planning is really the last one that we’re going to talk about. And. You know, you need to plan like an example, like if you’re somebody who’s in your sixties and and you’re like, you know what? I can manage all of our money myself, and that’ll be my new job.
Ford Stokes:
Okay, great. But what happens when you’re 75 and you don’t have the same cognitive ability you had at age 60? For age 65. And also what happens to your spouse when you pass away? Where does that how is she going to manage that money if she’s if she is focused on investments, as you are? And also, are you any good at it? It’s kind of been proven that. That individual investors basically underperformed the market indexes because of emotionality and they get in and get out of things too quick. They underperform by 3 to 5% a year on average. Are you better off trusting a fiduciary that is going to place your needs ahead of their own? I’m a fiduciary and I’m here to take care of my clients. Period. End of sentence. I put their needs ahead of my own. That’s why I’m held to that legal standard by the SEC and FINRA. And I’m also held to that moral standard just the way I was raised. My parents did a great job raising me. They’re both entrepreneurs. And, you know, it’s your money. It’s your hard earned money. It’s your hard saved money. We care about you. But when you’re doing smart planning, you need to look at what are you doing with Medicare? Are you going to get Medicare Advantage or Medicare supplement? We will introduce you to Bonnie Dobbs and Medicare and other red tape and she’ll take care of all that.
Ford Stokes:
We don’t do that at Active Wealth, but she does long term care. Do you have long term care insurance? Are you one of the 6.9 people out of ten? That are going to need long term care at some point in your life. By the way, guys, we basically live about 18 months in long term care facilities and women live to over three years in long term care facilities. So you want to make sure you have a plan for that. Also, do you need to do home renovations to make sure that you can stay in your home? Or do you need home renovations so you can sell your house and and and downsize and take that take that cash. Also, what are you doing with taxes? Do you have a tax plan? Do you have an income plan? All this. All this stuff is part of smart planning. And you need to have a smart financial plan to your 95th birthday so you have an understanding of what’s going on. So we call this results in advance planning. If you don’t have that, if you don’t understand all these factors that go into smart planning, then I would encourage you to visit Active Wealth dot com and click that schedule a consultation button in the upper right corner. And now let’s go to 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:
Again, we encourage people to invest in structured note ladders to diversify their risk. Typically, we like five consecutive notes over five consecutive months. We also kind of launched and we did a market update where we launched into our Smart Retirement Plan series. We gave you an overview and also talked about where people are actually getting their financial education, with only 7% saying that they are educated by a financial advisor. We think that’s shocking and we think it’s great that you guys and gals are listening to us as Activators on the Active Wealth Show. And we appreciate you and also want to say thank you for making us the number one listen to radio show on the weekends on AM 920. The answer, that’s a big deal. And then we talked about smart vision, smart inspection and smart planning as really important and essential elements to a smart retirement plan. And next week, we’re going to talk more about. How to how to invest properly for a smart retirement plan. We’re going to talk about smart, safe, smart risk. Smart taxes and also smart income. On next week’s show, it’s actually really if you’re looking for where’s the beef, that is a big part of the smart retirement plan and it’s probably the meatiest of all of it. So you’re going to want to come back and talk to us or listen to us next week for sure.
Ford Stokes:
But also the way to skip all this is just schedule an appointment. Just schedule our appointment. Now, just by giving us a call, you can call Deborah and her team at 7706851777. Again, 7706851777. We’re here. We’re here on your side. We’re here to take care of you. We care about you. And we want to help you make an informed financial decision about your retirement future by building that tax efficient, fee efficient and market efficient portfolio. And also remember always to listen to us on Saturdays from 12 to 1 and Sundays from 11 to 12. And don’t forget to check us out and subscribe to wherever you listen to podcasts, whether it’s Stitcher, Spotify, Google Play or iTunes or iHeart. We’re on all of those platforms and we have hundreds of downloads a month of our show, but we need more subscribers, so please go and subscribe. We appreciate you and you can visit Active Wealth Show to listen to any of our episodes and also watch any of our episodes. Again, that’s Active Wealth Show. Thanks for us to listen to Sam and me on the show. We appreciate you. And listen, if you’re going to if you’re going to learn about retirement, if you’re going to be a bear, be a grizzly, be aggressive about seeking financial education so you can make informed financial decisions for your financial future. Have a great week, 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 Forward Stokes at 7706851777 or visit Active Wealth Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor BCM An active wealth management or 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 cannot be used as an indicator to determine future results.
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