Timing is Everything: How and When to Reduce Financial Risk

8.2.24: Audio automatically transcribed by Sonix

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

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

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

Speaker3:
And welcome to retirement results. Result. Drivers. My name is Ford Stokes. I'm your chief financial advisor. And I'm here with Matt McClure, who is one of our senior financial advisors. And he's also our roving reporter and contributor to retirement results. But we got lucky this next two weeks. Sam Davis is in Paris, France, and Marseille. He's in Marseille and Paris, and he's there for the Olympics. And Matt is filling in as my co-host. So welcome to retirement results as a co-host. Mr. Matt McClure. Well, thank.

Speaker1:
You for I appreciate it. Welcome to the weekend to you and to everybody. I appreciate it. I'm glad to be able to fill in for Sam. You know, I, I have to say I am jealous of the fact that he is like the instead of our sort of weekend ambassador here. He is our literal like international ambassador traveling the world. Um, but, you know, I get I get a great consolation prize in that I get to sit in with you.

Speaker3:
I appreciate that a lot. So, uh, it's also great that he took his wife and they went out with two other sets of friends, and they're going to see the tennis. They're going to go see track and field. They're going to I think he's going to try to get out to LA golf. That the place where they played the 2018 Ryder Cup for a day to go check out the golf and um, and just lots of other events and they're going to go to the Louvre and then Charlemagne's castle and all that stuff.

Speaker1:
So I think they're coming back through London too, aren't they?

Speaker3:
They I think so. I think you're right. So it's, um, it's pretty impressive little two week trip. So he's not going to be on with us for the next two weeks. I do appreciate the homage to the weekend ambassador stuff, Matt. Sam will appreciate that too. So a lot of things have happened since Matt, since you co-hosted the show, because Matt usually co-hosts the show about 2 or 4 weeks every year. And, um, when Sam's out or I'm out or whatever. And, uh, we have joined the John Fredericks radio network. We are now syndicated in eight states across 20 different radio stations. And it's also great to have you on here as a co-host, Matt, because you're also licensed financial advisor with Active Wealth Management, and we appreciate you and doing a great job taking care of your clients. And it's been amazing to hear, you know, how people will just meet you. And then all of a sudden they're ready to do business with you. Uh, you had a guy at your church that that, um, decided he was going to do business with with you, Matt. Because, you know, he just know, liked and trusted you enough to with his finances. And and I do want to kind of share a little bit about that. Maybe in our problem solver will come up with a couple of different problem solvers today. But again, just thanks for being on and, um, thanks for being a great financial advisor, fiduciary as well.

Speaker1:
No problem at all. The honor is mine.

Speaker3:
It's good stuff. So today's show we're going to talk about are you ready to retire? How to safely make the leap to your golden years again? We want to just say how much we appreciate our result drivers. All the people that listen to retirement results here in the John Fredericks Radio Network and on Am 920. The answer in Atlanta. That's where we got our start. We've been on Am 920. The answer for over five years now. Uh, Sam and I first met when he was working at Am 920. The answer? And he's become a financial advisor and doing a great job, Matt, is you've been, uh, an anchor, a news anchor and a reporter, uh, for New York one on the floor of the New York Stock Exchange for a year plus. And you also have an incredible singing voice. So that's ridiculously awesome. And I'm jealous. Um, the other thing you don't know about Matt, it's the craziest thing I've ever seen. He takes the best professional headshots you've ever seen in your life, and he does it like, every six months. And it's just they keep getting better. I'm not sure how that works. I thought you're supposed to get. You're supposed to look worse as you get older. But Matt just, you know, he just crushes. So that's pretty.

Speaker1:
I'm just aging like a fine wine. You know. That's really it's.

Speaker3:
I think I think you're like Benjamin Button. I think you're going in reverse order. Right? It's pretty impressive, I'll tell you. So. But anyway, I to on today's show we're going to talk about how are you ready to retire. We also sincerely appreciate all of you folks that listen to our show, and the reason why these folks listen to our show. And if you're new to retirement results this week, or you're new to listening to us on the podcast, wherever you get podcasts, or if you like to watch our episodes on YouTube or on retirement results.com at the on the episode tab, you're you're probably somebody that wants to build a tax efficient, fee efficient, and market efficient portfolio so you can have a more successful retirement. You probably want more peace of mind during retirement. You also want to have somebody possibly take care of investing in managing your money to protect your money first, and then grow your money second, and then also generate that income that will outpace your expenses that you need in retirement. We're going to offer a free, complete and comprehensive financial plan today. All you've got to do is reach out to us at retirement results. Com forward slash plan. That's retirement results.com/plan.

Speaker3:
And we'll get started right away in calling you and trying to get your statements. And then also get your monthly expenses and your social security statements from Tsa.gov. We like to get the XML files so we can get your top 35 earning years. And we'll go from there. But we'll we'll give you a free portfolio analysis, a free financial plan to 95th birthday with your current plan. That has nothing to do with us. That's number two. Number three is we'll give you a retirement income gap analysis. Number four is we'll give you a financial plan to your 95th birthday with our recommended portfolios. And number five is we'll give you a financial plan to your 95th birthday with our recommended portfolios. That also includes a Roth Ladder conversion plan to delete the IRS from being your partner in retirement. If you're interested in that, I would encourage you to go ahead and reach out to us at (888) 814-0304 or visit retirement results.com/plan that phone number again. That toll free number across all of our network would be 888814030488888140304. Okay. So here are the things we're going to talk about today. Number one is your investment strategy might need to change. And we want to try to help you make smart adjustments as a pre-retiree.

Speaker3:
Number two is is your level of risk age appropriate. While the rule of 100 matters as you near retirement and Matt and I are going to go into depth on that, we're actually going to play our favorite game, right or wrong. Usually Sam is the emcee for Right or Wrong on our television show, where Matt also hosts that television show. But today, Matt and I are going to do that, and we're both going to answer questions. We test your financial knowledge and clear up common misconceptions in our right or wrong segment. Matt's also got a great inflation demonstration. Um, and, uh, here's a little hint. Do you want fries with that? If so, it's going to cost you a little bit more. And then what we used to say when we were in school, hey, you want fries with that shake, things like that. So then, um, in the last is we're going to help you prepare for health care costs and retirement and help you understand just how expensive medical bills are when you retire. But but now first, Matt, can you go ahead and share this great financial wisdom? Quote of the week from a childhood hero of so many Americans.

Speaker4:
And now for some financial wisdom, it's time for the quote of the week.

Speaker1:
Yeah, let's do it. It's from actually Fred Rogers. Um, who, you know, won't you be my neighbor? Uh, Mr. Rogers?

Speaker3:
Exactly.

Speaker1:
Mr. Rogers, I mean, I grew up watching Mr. Rogers. Loved the show. The land of Make Believe was, like, my favorite thing because I always loved trolleys. And I don't know why as a kid, I think because we used to vacation in Gatlinburg a lot, and there were trolleys everywhere, and I thought they were so cool. So, you know, going to the land of make believe in a trolley was just my thing. Um, so our quote of the week does come from Mr. Mister Rogers, and it is this often when you think you're at the end of something, you're at the beginning of something else. Boy, I love that.

Speaker3:
It's exactly true. And it's so apropos and and just spot on with people that are pre-retirees and retirees. In Webster's Dictionary, one of the definitions for the word retire is to withdraw. And a lot of people don't really want to withdraw. They want to relaunch, they might relaunch into a different career, or they might relaunch into a business or relaunch into, you know, an era or a period of time where they, they and their spouse are are traveling a lot or they're spending more time with friends and family, um, or they're supporting kids and grandkids or they're or they're supporting caring for aging parents. Uh, my wife and I are in the process of kind of helping out quite a bit with her parents. Um, her parents are amazing people. Her dad just broke his hip. Luckily, he didn't have to have a total hip, but he they had to put a rod in his hip. And he's going through physical rehab at the rehab facility. And coming. Georgia, shout out to the great, nice folks over at Encompass Rehab facility. Um, they've done a great job taking care of my father in law, but she's been staying with us while we're also sending our girls to their first day of high school as a senior, as seniors in high school, because we've got twin girls or 17 years old, and it is a lot.

Speaker3:
It's a lot to deal with. And we're also super excited to be able to support them because they supported us for so long and, um, always took great care of us. And my mother in law loves her son in law, which is always a great thing. Um, but, you know, it is different. I mean, they're 80 and 82 years old, and, um, they're not spring chickens anymore, and we're here to support them. But you really need to have a plan for that. And you don't want to just withdraw in retirement. You want to make sure you've got a plan for retirement. So I'm going to ask you to do three things. You only got like 30 or 45 seconds left in this segment. I want you to ask yourself, what are you doing in retirement? Number two is who are you with in retirement? Number three is where are you living in retirement? And I would say the fourth one I'll add a fourth one is how are you going to fund that retirement. We're going to talk about that and a whole lot more when we come back from the break. You're listening to retirement Results right here on the John Fredericks Radio Network and Am 920 the answer retirement results.

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

Speaker5:
If you're blue and you don't know where to go to, why don't you go where you're.

Speaker2:
Listening to retirement results? And now back to the show.

Speaker3:
And welcome back result drivers I'm Ford Stokes, your chief financial advisor. And I've got Matt McClure here with us, who's our senior financial advisor with active wealth management. And also he's our roving reporter week in and week out on retirement results. But what's interesting is Matt is now co-hosting just for two weeks while Sam Davis is in Paris with his wife and some friends and family over in Paris to go see the Olympics for two weeks. By the way, Matt, I, I, I cannot believe he can work it out where he can go to all these sporting events when he travels with his wife on these big trips. They went to Europe last year and went to Rome and everything. But guess what? They went to the Ryder Cup. Most wives would be like, no, no, no, we're just going. I'm gonna go eat and we're gonna do wine. We're gonna go to the beach and we're going to do this stuff. And, you know, he's. He got her where she's going to the Ryder Cup and wearing all the USA gear. And then. And he's got her going to the Olympics and doing the same thing. It's impressive what he's pulling off as a young husband.

Speaker1:
It really is. You know, I mean, he, um, he found himself a keeper. We both know her well and she is very, uh, very easygoing and just she's I think she's she's just kind of the kind of person who's sort of up for anything. And, uh, Sam really, really lucked out with. Yeah. That's awesome.

Speaker3:
They're a great couple. Can't wait for them to have kids. And so I can be less jealous of his life.

Speaker1:
There you go. You got a little. Sam's running around.

Speaker3:
That's exactly right. All right, so here we go. We're going to talk about your investment strategy and how it might need to change. Matt, why don't you go ahead and lead us off here. And we've got three big important factors for folks to consider. So we're going to go through all three of those. Yeah.

Speaker1:
Sure thing. So yeah if you are approaching retirement some things for you to consider. Um, you know, because as you do approach what should be your golden years, right. That that's the plan. That's the goal is for those years to actually be golden and not, you know, like a lump of coal in your stocking on Christmas morning. Um, it's really super important that you understand that the strategies that helped you get to your retirement years to get you to the point where you are now, are not always the best to get you through your retirement years. So some important things to consider here. And we'll go through these as, as you said for point by point. Um, number one, and this is so important, the closer you get to retirement is how important it is to scale back your risk.

Speaker3:
No question. As you near retirement particularly, you know, within ten years, it's crucial to transition your investment strategy from growth focused to preservation focus. Also, this strategic shift, you know, sometimes can involve, you know, reducing exposure to high risk investments, which are more volatile, like you may want to you may not want to do a Reg D investment in things that aren't as regulated. You may want to be careful about investing in physical gold and silver. They're so high in fees. You want to be careful about investing in a business that your neighbor might have come up with, that you know, would 90% of all businesses that are started fail? You want to be careful about that, and you also can lead to significant financial losses close to retirement. We don't want to do that. And then you also want to make sure you have a goal to minimize the risk of large scale financial setbacks that could jeopardize your retirement plans, but specifically equal a lifestyle change during retirement. What we want you to do is we kind of want you to prioritize protection over growth. And so we want to protect it first and grow it second. And the last thing I'm going to say back on scaling risk is you really want to get your your spending in line, because that's another form of risk. If you're having to over withdraw money, you're risking your overall principle. You're going to be really careful with that. So you want to make sure you're starting out with a positive retirement income surplus and not a negative retirement income gap. So that's a lot for number one on the importance of scaling back risk, which is number one. Uh go ahead and share number two there for us Matt.

Speaker1:
Sure thing. So as long as you um, are kind of on this topic, you know, number two kind of goes hand in hand with it. And that is what is the goal of preservation. You know, you want to preserve as much of your principal as you were saying as you can. So lead us through kind of that part of it, the goal of actually changing strategies the closer you get to.

Speaker3:
The primary goal. Matt, during this pre-retirement phase is to protect your accumulated savings and ensure really a stable income stream to replace your salary upon retirement. A lot of people also don't realize that when you start taking out money from your IRA or generating a pension or a personal pension, we'll talk about later. Or you're generating Social Security as well. You're going to end up equaling, I don't know, 50 to 70 5 to 85, almost over 100% of what you were making before. And people have this misnomer thinking, well, I'm going to pay a lot less in taxes. Believe it or not, they may not. It may be about the same, especially if a majority of the assets you have for retirement are in your IRA, in your individual retirement account, or for one K or for three B, or for 57, or simple IRA or Sep IRA. All those qualified accounts are qualified for tax deferred growth. At some point the government's going to want their money. So you need to be careful about that. We need to make sure your income needs will be met after you retire. Protecting your hard earned and hard saved money from significant market downturns, In my opinion, is also essential to maintain financial security as you transition out of the workforce. We're not saying you're going to withdraw from the workforce. We're saying you're going to transition. Whether you're transitioning from working for somebody and being a W-2 employee or a 1099 employee, or you're maybe going into a business or you're going to manage rental properties and get income, things like that. Losses suffered within ten years of retirement and within the first ten years after you retire, have a significant financial impact on the success of your retirement. It also can dramatically affect your lifestyle.

Speaker1:
Yeah, definitely. So and then so we've talked about, you know, kind of the the overall goal here of preservation. We've talked about why it's so important to do that. What are some strategies that people can actually put into practice to make this happen as they get closer to retirement age?

Speaker3:
You here are some strategies Matt, for kind of risk reduction. Number one is you want to try to diversify your investment portfolio. That's a key strategy to mitigate risk. And you may have really liked a couple of mutual funds or a couple of stocks when with your 41K or when you were doing some investments. But be very careful. I give you an idea. The average lifespan of an S&P 500 company is actually 54 years. So if you're inheriting money from your parents or grandparents, chances are that fortune 500 company could have some risk at at default or going away or going bankrupt, things like that. You want to be really careful about what we're doing. So when you diversify your investment portfolio, here's what that means. It means spreading your investments across various asset classes, whether it's securities or in US based securities or foreign uh, securities or real estate or bonds or other asset classes like fixed index annuities and life insurance and truly diversify things outside of just the US financial markets. And you want to also consider replacing the bonds in your portfolio with protected and guaranteed income products.

Speaker3:
That's a really good idea. Then number two is it is essential to see a professional who can provide you a detailed analysis of your own current portfolio and help you make decisions to better protect and grow your hard earned and hard saved wealth for retirement. And we talked about at the beginning, right at the beginning of of segment one, Matt, we're offering a $1,500 value, a complete total portfolio analysis and financial plan for our listeners. We're also going to give you an RSA roadmap that is a Social Security maximization report. Absolutely no cost to you so you can maximize your Social Security income and hopefully maximize that monthly income to make sure you outpace your expenses while also hopefully growing your portfolio as well. So those are really some of those key strategies, Matt, to really reduce the risk that you're facing in retirement. I know we've only got a couple minutes left, but can you just at least introduce this next topic which we're talking about, you know, is the level of risk age appropriate?

Speaker1:
Yeah. And that goes right hand in hand with, with this whole topic. Right. Because it's, you know, you want to be reducing that risk. As we've been saying, as you get closer to your retirement years, it's so important that you protect what you have. And one good guideline for that is known as the rule of 100. Um, it's called, you know, the name of it obviously is called a rule. It's the rule of 100. But as I say, it's more of a guideline because based on your specific situation, it may be a little bit different anyway, but it really does help people determine the appropriate asset allocation based on their risk tolerance and their age. So the rule of 100 says you take the number 100 and then subtract your age and then that is the percentage that what's left over is the percentage that should be allocated to the more aggressive investments. Right. Like stocks like equity investments. So that is kind of just the the Reader's Digest version, the CliffsNotes version of what the rule of 100 is here. Um, and we can, you know, dive more into it when we come back from the break here in about a half a minute.

Speaker3:
Cool. Yeah. So if you if you're 60 years old, you just subtract 60 from 100. That means 40% of your assets should actually be at risk. I'd imagine most of the people that are listening to us, Matt, they've got about 80, 60 to 80% of their portfolio is actually invested into stocks. And they don't realize that their bonds, investment, their bond investments also represents a significant risk as well, as bonds have had the worst run they've had over the last four years. In the last 41 years, the 6040 portfolio were 60% stocks, 40% bonds have really suffered over the last four years and had their worst year in 2022. In the last 41 years, we come back to the break. We'll have more retirement results.

Speaker2:
Learn more at retirement results. Com or by calling us today at (770) 685-1777.

New York, New York is everything they say. And no place that I'd rather be. Where else can you do a half a minute?

Speaker2:
Are you concerned about rising taxes and how they could affect you and your family during retirement? If you have an IRA balance over $400,000, you could save six figures in retirement taxes that you would be paying during a 35 year retirement. Find out how much you could save today by scheduling your no obligation Roth conversion consultation with Ford Stokes of retirement results. Learn more and schedule an appointment at retirement results. Com investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Visit retirement results.com for more information.

Speaker1:
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.

Speaker2:
While Washington's spending keeps growing, your retirement doesn't have to shrink, protect and grow your hard earned money today by calling us at (770) 685-1777. That's (770) 685-1777 to connect with a qualified advisor.

Speaker3:
And welcome back result drivers I'm Ford Stokes your chief financial advisor. Got Matt McClure here with us today. He's our fill in co-host. He's always been our roving reporter for retirement results. But he's also a licensed financial advisor and fiduciary. He's also a life and health licensed agent in multiple states here in the United States based out of Atlanta, Georgia. Number seven on the field. Number one in your heart, Matt McClure. Ladies and gentlemen, is going to give us his problem solver for one of his clients that he solved some problems for his client this past week. And, um, it goes to his church. So I just. Matt, I just really wanted you to share this story. I thought it was really important for the listeners to, to better understand, because they might be going through the same thing.

Speaker2:
It's time for this week's Problem Solver.

Speaker1:
And it really does drive home kind of what we've been talking about, you know, reducing risk and kind of the rule of 100 being, you know, making sure that you are properly allocated. The closer you get to retirement, you have less risk in your portfolio. And so I had this client come in, we'll call him Jack from a guy that I had.

Speaker3:
To change the name to protect the innocent.

Speaker1:
Exactly. I was kind of like an episode of Dragnet in here, but, um. Yeah, I'm an I'm just an old person. Uh, but I'm pulling out the dragnet reference.

Speaker3:
No, you're pulling out some really great trivia, I got to tell you, because I'm. I'm. I've got the same experience, too. But some of the Dragnet stuff was reruns for both of us.

Speaker1:
But it was. It was, although I loved it. And and, uh, you know, just just the facts, ma'am, but, uh, so just the facts about Jack here and his, uh, particular situation, so. Yeah. No, he came, came in and said, look, I, I know that I need some help because I'm getting closer to retirement. He just turned 60 not that long ago. As a matter of fact, the week that I met with him was his 60th birthday was that week. And so he's like, I'm turning 60, I'm getting close to retirement, he says. You know, within the next, say, 5 to 7 years, I want to kind of at least scale back, not necessarily as we were talking about before, withdraw, but maybe reinvent myself, do something. But I want to have the flexibility to do that, he says. Take a look at what I have now, and he's somebody who has actually done a good job over the years with putting money inside. Um, you know, his 401 K his I've got a couple of IRAs, got a even has a Roth all of this stuff. Right. So he's done a really good job putting the money aside for his retirement and investing it. But it was way too heavily involved with stocks, right? So I mean, you know, we looked at his, um, uh, portfolio and he was over 80% in stocks and didn't have any of the guaranteed income streams set up for himself, like we talk about here with fixed indexed annuities and that kind of thing, and had less than 20% in bonds, be they corporate bonds, government bonds and, and the like.

Speaker1:
So what we were able to do to solve that problem, because obviously that's a problem as we've been talking about, you want to protect what you have. The closer you get to retirement, you don't want to throw it, throw it all away. If, you know, in case of a market downturn, that's that sequence of returns risk you might hear us talk about quite a bit. Um, we were able to do is get a good portion of his portfolio transferred over into the nationwide peak ten fixed indexed annuity that you'll hear us, uh, reference. So we got him that with a 20% bonus on the income, uh, portion of that. So, like the account that the, the portion of the account that the income is going to be based on 20%. So immediately is, let's say, if it's $500,000 turned into $600,000 with that bonus, and then that 8% simple interest roll up until he turns on income on that income benefit base as well. So great benefits there. That's a guaranteed income stream that he can turn on in retirement. And he will never outlive that income. Um yeah, that's a deal.

Speaker3:
And it's it represents, I'd say, about 30% of of what his total assets are. He's got like a 1.5 million portfolio, I think. But what else is interesting about what you did for Jack was that you got on the incoming needed during retirement because he's going to keep working. He wanted to keep working at least till 64, 65 years old. So he's going to delay. He's not going to turn on income till year four, year five of that nationwide peak ten. And that that product is a fixed index annuity from an A-plus rated carrier. Yes. There are those folks. The Nationwide's on your side folks, but he's going to get over 50 plus thousand dollars. So over 10% of his original premium just four years later each year. And it's going to grow over time. And the goal is to always that we always try to do, Matt, is we try to put our clients in fixed index annuity products that are efficient in fees, but also offer significant participation rates in these underlying index because they are index linked. And what's really neat is you talked about with Jack's situation is he's going to for four years. He's getting 8% guaranteed simple interest on that 500 grand. But his income value, the income account value is going to be at 600,000 plus and continue to grow.

Speaker3:
And that's going to allow him to get that ten plus percent versus just a 4% typical withdrawal rate. And that plus his Social Security is going to go a long way to satisfying his expense needs. And he's now able to start figuring out when I'm going to slow down. And all those things that you talked about because of you and because you've got him this income solution, and he only had to carve off like 30% of what he had to be able to do that. And just your thoughts on that? I just I just wanted to kind of report this. I just want to report the specifics. Um, easy for me to say the word specifics, but, um, but I wanted to just at least go into a few specifics here about what you really did for him and how it's, you know, he's now going to get over 80 grand in income when he's ready to turn on Social Security, and he's ready to turn on income from that fixed index annuity. And he's not risking any of his the income portion of his portfolio, his principal's protected. He's growing with market like gains without any market risk. It seems like a no brainer to me.

Speaker1:
Yeah, well, and in the end and and knowing Jack, the way that I know him, he's a, he's a very analytical, very like, careful person when it comes to making any sort of change. Because, you know, he had been doing what he was doing for years and years and years. And so letting go a little bit of that was kind of a difficult thing. But in the end, for him, he was like, you know, I don't I don't know why I wouldn't do this. It was, you know, it's like this is a wonderful opportunity, especially for him in his particular situation because, as you said, the illustrations that we were able to do for him on this particular product and that guaranteed income stream shows $80,000 plus and that that continues to grow every other year based on the growth inside the annuity, which of course is linked to that, that particular index with a very large participation rate. So that means more growth than you see in a lot of other similar type products. But the thing that I like for about doing what we do is in Jack's situation particularly, is it gives him so much peace of mind, and that's really something that you can't put a price on.

Speaker3:
Yeah, it makes it it makes life easier for us as advisors, too, when we know the client's retirement income is taken care of. And so we're not just nervous when we're getting those calls for withdrawals from the overall account. We're also, you know, you also employ tactical asset allocation and put him in, um, some of our great portfolios we've got available, um, for the rest of his assets. And, um, I just super proud of the job you did and planning for for Jack and making sure everything goes right for him. But he's starting out on bedrock. He's not starting out on sand. Um, with his retirement, I think that is remarkable. Now, he can kind of do what he wants to do when he wants to do it. And it's also interesting that he was doing a lot of his own investing, and he came back to you and he was like, you know what? I don't know why I wouldn't do this. It does make sense. You and I have access, Matt, to hundreds and hundreds of financial products and hundreds and hundreds of fixed index annuities, multi year guaranteed annuities, fixed annuities, um, all kinds of different annuities.

Speaker3:
We do not market or sell variable annuities because they're too expensive and they're securities. They're at risk in the market. So stay away from variable annuities folks for sure. But you know, only 1% of financial advisors have access to the nationwide peak ten. We do talk about a lot on this show, but North American is a big carrier of ours. Security Sentinel life is a big carrier of ours. Cl life on the Omega side is a big carrier of ours. Uh, we've we've marketed and sold, um, Athene and and Allianz and other products as well. But right now that nationwide peak ten, when we put it up side by side with a lot of carriers, there's only a couple of products that actually can compete with the nationwide peak ten. And a lot of people are like, I want to get that product and I want to get that peace of mind. But congrats to you for what you did for Jack. And, um, uh, I know he's excited. And again, you've got another great, happy client.

Speaker1:
And that is the goal always is to set people up for success in their retirement years. And I'm just glad to be able to do it. It's it's a, you know, helping people has always been a passion, and I'm just glad that I'm able to do it in this way.

Speaker3:
Yeah, it's neat stuff for sure. Um, when we come back for this last segment, we're going to play right or wrong. I think that's going to be an awesome segment, I think.

Speaker1:
I think so too. I'm looking forward to volleying on on right or wrong a little bit with you here and, uh, taking turns on it. I know that, you know, I hopefully I'm doing an adequate job filling in for Sam. I'm no right or wrong MC with the experience of him, but, uh, we'll do it. We'll. And we'll have fun with everybody's favorite, uh, financial game show.

Speaker3:
Exactly. We'll come right back. We're going to play right or wrong. Everybody loves loves it when we play right or wrong. You're listening to Retirement Results on the John Fredericks Radio Network and Am 920 the answer?

Speaker2:
Thanks for listening to retirement results. Schedule your complimentary financial consultation now at retirement Results.com. At Active Wealth Management. We know you've worked hard for your money and you've worked even harder to save it. When it comes to wealth management and planning for retirement, Ford Stokes of Retirement Results is passionate about helping people protect and grow their wealth while educating them on all their options so they can choose what's right for them. Visit retirement Results.com to schedule your no obligation consultation today. It's a $1,500 value provided at no cost to you. Book yours now at retirement Results.com. Miss. Part of today's show retirement results is available wherever you listen to podcasts and online at retirement results.com.

Speaker1:
Welcome back to retirement results. If you are a regular listener to the show and you're just tuning in today, you're probably like, what in the world voice am I hearing? I'm Matt McClure and I am a senior financial advisor with Active Wealth Management, working alongside Ford Stokes, who is our chief financial advisor. And the regular voice that you are used to hearing. Ford. I am, I'm having fun and we've got this one more segment to go here. So what do you say we play some right or wrong, huh?

Speaker3:
Let's do that. You do a great job filling in for Sam, I appreciate it. And, um, just shout out to all the result drivers and thanks for hanging with us here on this week's show and next week's show. But, um, I got to tell you, it's always nice to to pull in the closer. Who who can throw it 100 miles an hour and you're you're that guy. So let's go.

Speaker1:
There you go. Just the John Smoltz of it all here. Um. All right.

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

Speaker1:
And if you are just, you know, if this is your first time listening, I don't want you to be caught off guard here. So this is basically how it works. I'm going to present a statement, and then Ford is going to tell us if that statement is right or wrong. It'll have something to do with what we've been talking about on the show today. And then he'll present a statement next and I'll say if that one is right or wrong, we're just going to kind of go back and forth with it today. All right. So here we go. Number one in right or wrong is you should keep working and stop contributing to your retirement accounts to maximize your Social Security benefit. For does that one right or wrong.

Speaker3:
That is wrong. You want your money working as hard as you do. It's important to get a Social Security maximization plan. You could be getting $0.15 on the dollar versus controlling 100% of the dollars you're investing in with your future retirement. Here's what I mean by that. If you make over $7,078 in in a given month on an salary, you're just going to get 15% of that back of what you're contributing in Social Security. That is a problem. We need to do a much better job at investing, where we can get 100% of our money back, plus the growth on the money. So let's do everything we can to invest in our own plans, and we can always max the Social Security benefit with our salaries. But let's try to save 15 to 20%, especially when we're over 50in those catch up years. Let's try to do everything we can to save 15 to 20% and pay ourselves 15 to 20%. The first 15 to 20% of every dollar we earn. Now, Matt, the rule of 100 is a simple calculation to help one determine how much risk they should be taking inside their portfolio of assets. Is that right or wrong?

Speaker1:
Well, for our listeners who have been paying close attention today, that one is right. So all you do to to recap, we talked about a little earlier in the show. You know, you just take the number 100 and then you subtract your age from that. And then the number that's left over is the percentage of your assets that you should have at risk in the market. So the idea there, of course, is that the younger you are, the more time you have to make up for any significant losses. Then as you get older, you want to have more of your savings and your investments in those safe products, like a fixed indexed annuity we talked about in the last segment or something, you know, of the similar effect. Right. So you want to have less risk as you get closer to retirement. And yeah, the rule of 100 is a pretty easy calculation that you can do, even if you're not the best at math. You know, if you can subtract your age from 100, then you got, uh, you're in business. It sounds very well. All right. Forward. So our next one here is, um, this. There is no way to grow your money tax free in an IRA.

Speaker3:
Thankfully that's wrong. Roth IRAs allow you to pay taxes up front and take tax free distributions in retirement, and allow you to delete the IRS from being your partner in retirement with no RMDs. That's a big deal. One quick hint here for all of our listeners, the best way to do a Roth conversion is to convert a little bit at a time and rethink. Call it a Roth ladder conversion is because you're going to do a little bit each each year. And it's just each year is a step in the ladder to move money. You want to move money from your IRA to your Roth IRA. But here's the cool hint. The best hint is use a taxable account, an investment account, or your savings account or a checking account. Money the taxable dollars to pay the taxes on the money moving from your tax deferred bucket, your IRA to your Roth IRA, which is your tax free bucket. That way, every dollar you reduce your IRA, your Roth IRA grows by that same amount. So we want to make sure we're we're moving dollar for dollar from our IRA, our Roth IRA, and paying the taxes with other accounts like our investment account or our checking and savings account. And here's the last one. Here's the last. Right or wrong, Mr. Matt. A 60 over 40 portfolio with 60% stocks and 40% bonds. They tried and true method and is still the best way to construct a portfolio for retirement.

Speaker1:
Well, these days, Ford, that could not be more wrong. Um, you know, modern portfolio theory is a strategy that was actually, uh, sort of invented, I guess you could say, or come up with in 1952. And so that's more than 70 years ago, right? So do you really want to rely on a 70 plus year old strategy for your retirement? Um, I don't think so. Because, you know, we know these days we know better, right? So we believe in using new asset classes to properly balance smart risk and smart safe investments. I mean, you just you got to be then the key word there, of course, is smart. You got to be smart about it. You got to know what you are doing. And the way to know what you're doing is to be working with a fiduciary financial advisor who has your best interests at heart and on their mind and can really, you know, take and do a deep dive into your situation and make that situation the best that it possibly could be for your retirement years.

Speaker2:
Want to know where your hard earned money is going? It's time for an inflation demonstration.

Speaker3:
Matt, why don't you go ahead and share this week's inflation demonstration?

Speaker1:
Yeah, let's do it. The inflation demonstration for this week is something that's going to hit home for a lot of us who like to, you know, maybe hit the drive through every now and then because rising menu prices taking a bite out of McDonald's sales this year. The golden arches losing. They're losing their shine a little bit here. Um the impact of inflation on their pricing has been significant here. They've faced inflationary cost increases ranging from 20% to 40% on their, you know, the buy side. Right? So the supplies and all the different items that they buy to be able to make their food products and their other products, the packaging and the, you know, all of the other things. Um, so that means, of course, higher menu prices, the increase in prices disrupted McDonald's long standing value programs. You know, the old, uh, super value meals and all that stuff and that, uh, really led consumers to reconsider their purchasing decisions. Um, and so, I mean, it's really had an effect on consumer behavior here that the rise in prices at McDonald's as a result of this inflation directly impacted habits, particularly among people who are sensitive to price changes, such as, you know, people, anybody living on a fixed income, of course, pre-retirees and retirees, especially falling into that category and this demographic often has a fixed income, so that makes them more vulnerable to price increases in essential goods and services.

Speaker1:
And you know, yeah, you might think McDonald's essential. Well, you know, yeah you got to eat. So that's an important kind of a thing. Um, and then the business side of things for McDonald's, uh, as far as not only regionally but around the globe, their sales were affected by slower than expected recovery in China and ongoing conflicts in the Middle East as well. So in the US, comparable store sales declined. Notable weaknesses in France and other international markets as well. That illustrates the global impact of economic pressures on the company. And I mean, you just look at it from, say, ten years ago, a medium order of fries at McDonald's was $1.59. The price now 379. That's just one particular example there. I mean, you look at the ten piece McNugget meal 5.99 back in 2014, nowadays 10.99 so it's, uh, things are getting expensive even at the old McDonald's.

Speaker3:
That's crazy. Absolutely crazy. Well, Matt, thanks so much for being our co-host on this week's show. Now we want to give you a quick final countdown. It's the final.

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

Speaker3:
Countdown. So on this week's show, we talked about your investment strategy needs to change and how to make smart adjustments as a pre-retiree. We also share the rule of 100 and asked. We kind of answer the question is your level of risk age appropriate? And Matt and I had a lot of fun playing right or wrong in this last segment. And of course, Matt did a great job giving us inflation demonstration about what's going on with fast food. And the prices have gone up dramatically, and there's been less people going through the drive through because of it. Listen, if you're seeking information about retirement, if you're going to be a bear, be a grizzly. Be as aggressive as you can and get as much knowledge as you can, because knowledge is power. And next we're going to talk more about how to build a smart financial plan or a smart retirement plan right here on retirement results on the John Fredericks Radio Network and Am 920 the answer? Have a great week, everybody.

Speaker2:
Thanks for listening to retirement results. You deserve to work with an independent team of fiduciary advisors that will strategically work to protect and grow your hard earned assets. To schedule your complimentary financial consultation, call us now at (770) 685-1777. That's (770) 685-1777. To connect with a qualified advisor. To learn more about our mission and our team, visit retirement Results.com. Investment advisory services offered through Brookstone Capital Management, LLC. Bcm, a registered investment advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, if any exists, please refer to our firm brochure, the ADV Two-a, page four for additional information.

Speaker1:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered, or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature.

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