What to Do If You Are Unprepared for Retirement

8.4.23: Audio automatically transcribed by Sonix

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

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

Producer:
Welcome to the Active Wealth Show. With your host, Ford Stokes Ford is a fiduciary and licensed financial advisor who places your needs first. He'll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host, Ford Stokes.

Ford Stokes:
And welcome the Active Wealth Show activators. I'm Ford Stokes, your chief financial advisor. And I've got Sam Davis, our executive producer, here with us. Sam, say hi to the activators.

Producer:
Welcome to the weekend activators. So happy that you're here listening to the Active Wealth Show. Once again, we heard some great comments from our interview with Josh Lumme. And if you missed that, check it out on the Active Wealth Show podcast feed wherever you listen to podcasts. Ford Josh had some great things to say about the new product from Nationwide. I know a lot of the activators have been calling to get information about that, and a lot of the current clients with active wealth are really enjoying that personal pension.

Ford Stokes:
Yeah. And we're super excited that we can offer that type of product. And we think 3425 advisors in the nation, give or take a few, they're actually have access to present that product to their clients. So we're happy to be one of those 3000 plus advisors out there. And today we're going to talk about smart risk and smart safe. We're going to talk about tactical asset allocation and and managing risk within your portfolio. So it won't just be annuity talk today for sure, but we're also going to talk through Smart, safe as well. And in kind of detail one really cool element of that nationwide product that that Josh and I didn't cover last week. But we also want to give a shout out to the listeners of the Active Wealth Show. We call them activators. We want to thank you, activators out there for making us the number one listen to. Radio show on the weekends on Am 920 The Answer we are super happy and proud of, of what you guys have made us to be the number one listen to show here on Am 920 The Answer We appreciate each and every one of you. And we're trying like crazy to educate you on things like bond replacement and Roth ladder conversion and how to delete the IRS out of being your partner retirement. And today, in one of the segments, we're going to talk about how you can not be a workhorse for the IRS starting in.

Ford Stokes:
Your first year of retirement, how you can get started to stop being that workhorse, paying between, you know, 20 to. 42.5% or more in total taxes. During retirement, we're going to try to help you delete the IRS out of being your partner. Retirement with some smart tax solutions as well. And again, if you've got any questions about. Hey, any of this type of stuff and you want to listen to more of our shows, you can just check out active wealth. Show.com that's active. Well, show.com click that episodes button. You can watch any of one of our episodes. Also, if you want to book an appointment directly with me, all you got to do is visit ActiveWealth.com that's visit ActiveWealth.com and click that schedule a consultation button in the upper right corner and you'll get booked directly into my calendar. So we're happy to help you there. Um, today's show, we're going to have a quote of the week. We're also going to talk about how to not be that workhorse for the IRS during your retirement years. We're also going to talk about how the Gen X generation is unprepared for retirement. We're going to share some important stats. We'll do that hopefully in this segment. And we're talking about five steps to catch up on your retirement plan. And Sam. Without further ado, go ahead and share this week's financial wisdom quote of the Week.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Producer:
This week's quote of the week comes to us from Chris Brogan. And Chris Brogan once said, The goal isn't more money. The goal is living life on your terms. And Ford, what this makes me think of is that number one mistake that most people are making with regards to retirement, and that's they're focusing too much on the size of their nest egg and not enough on the income potential that they could have during their retirement.

Ford Stokes:
Yeah. I want to give you credit for something that you you share all the time with people. You talk about, hey, you really need to direct money where you want it to go. And I feel like a lot of people and they build that one big nest egg. They're not really directing where the money goes and they're not. They're also not directing where you've got a smart tax income solution or smart tax growth where you're getting tax deferred growth and they're just paying taxable money or they're paying ordinary income on the money they're withdrawing from their IRA. So therefore, they continue to pay for taxes. They continue to pay taxes from their IRA at ordinary income tax rates years and years after they've worked, which we don't think is a really good idea. We think you ought to implement a Roth ladder conversion plan over a 5 to 7 year period, as Deborah Mason, who is a client of ours and works in our office. As she says, I'd rather take the tax bite now than take it later. And I would encourage people to try to do that for sure. And Chris Brogan is an American writer, journalist and marketing consultant and speaker about social media marketing Brogan's book Trust Agents using the web to build influence, improve reputation and earn Trust. In 2009, written with Julian Smith, became a New York Times bestseller. So we're giving you financial wisdom quotes of the week from New York Times best sellers. Folks, just want to let you know that, Sam, why don't you go ahead and share a little bit of information about how Gen X is facing a harsh retirement reality right now.

Producer:
Yeah. So Generation X, that is the group of millions of Americans born between 1965 and 1980. So this is the generational group that comes right after the baby boomers. So if you were born between 1965 and 1980, you are a part of Generation X. Now, the typical Gen X household with a private retirement plan has an average of $40,000 in savings. That is even more alarming for low income Gen Xers who have managed to stash away no more than about $4,000 and many people even less so. The final, you know, call here is across all members of Gen X, Some 40% don't even have a penny saved for retirement. So in a an IRS executive director Dan Doonan said in a statement, Most Gen Xers don't even have a pension plan. They've lived through multiple economic crises. Wages aren't keeping up, inflation and costs are rising. And they don't have that pension. They don't have enough saved for retirement. Ford. So people in that Gen X group are particularly underserved when it comes to preparing for retirement. Here's some stats. Only 55% of Gen X workers participate in an employer sponsored pension or 401 K plan. Wage growth has been relatively stagnant compared to previous generations and student loan debts. That's been a hot topic this summer. Those debts are higher for Gen Xers compared to baby boomers. So for a lot of people out there between born between 1965 and 1980, they need some help right now when it comes to getting ready for retirement.

Ford Stokes:
Yeah, I would just say the best time to save money is when you have it. And a lot of Gen Xers are in their prime earning years right now. They're they're generating more income than ever before, which is also remarkable considering we just went through a Covid 19 pandemic in 2020 and and in 2021. And so it's the economy is kind of cut both ways. And I think the middle class has really gotten squeezed. I just want to say, if you're making more money than you ever have, then you need to start saving more money than you ever have. And you need to go without a few things and put that away. Put that money away that you would have put into those things, whether it's buying a boat or buying a jet ski or. Or. Being a member of the country club or buying a new car or whatever, you really need to kind of. So start saving more money in my goal for each and every Gen Xer out there, if you're not saving 15% of your income each and every year, you're missing out. And I would encourage you to save it into a Roth loan or into a an IRA. Or into a Roth IRA or into just your 401. K. Also, if you're getting any matching funds. So if they're matching up to 3 or 6% of your income, you need to make sure you're at least saving up to that match because we can do pretty well for you.

Ford Stokes:
We work really hard to try to protect and grow our clients wealth, but we're not going to be able to give you 100% growth in a single year, which is what you'll get when you get matching funds. So if you save $20,000 in your 4k and you're and your company is going to give you $20,000 in matching funds, that's 100% growth on your money. So let's make sure we're doing that. And when we come back, we're going to talk about how to not be a workhorse for the IRS during your retirement years and really the core strategy to pull that off. In segment three, we're going to talk about really three different types of money. And I'm going to ask you to pick two of the top three and send us a tweet about it or send us an email about it so we can understand which of your top three types of retirement account money that you really like. And in segment four, where Sam is going to get us on track and we're going to play some stuff about personal pension from my book Annuity 360, by the way, you can get my book annuity 360 at Annuity360.net. I've got a lot to cover here on the Active Wealth Show this week. Come right back..

Producer:
With the traditional 60 over 40 portfolio having its worst year in more than four decades now may be a great time to consider more than just stocks and bonds. Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to help you retire with peace of mind. Schedule your free consultation today at ActiveWealth.com. That's ActiveWealth.com.

Producer:
Investment Advisory services are offered through Brookstone Capital Management LLC a registered investment advisor.

Producer:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonus 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, and other restrictions that are not included in similar annuities that don't offer a bonus feature.

Producer:
Thanks for listening to the Active Wealth Show. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

Ford Stokes:
All right, and welcome back to the Active Wealth Show. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis, our executive producer here. And what we're talking about right now is not being a workhorse for the IRS during retirement. So when you work during your working years, you're paying an effective tax rate. When you include your property taxes, you include your income taxes, your state income taxes, your sales tax, everything else. You're basically paying between 45 and 55% in total taxes in your working year, especially if you're making over six figures. And if you're making, you know, in that 22 to 24% bracket plus you're paying taxes on property taxes, you're paying taxes on on sales tax and all kinds of different ways they're getting taxes like your car tag, etcetera. If you add all that up, you're about 45 to 55% of your income actually is somehow, someway taxed. Well, if you replace your income with withdrawals from your IRA and Social Security. Almost one for one, which a lot of people's goal is to do that. And you don't implement a wrath ladder conversion, you're going to be a workhorse for the IRS, just as you've been throughout all of your years. It also one of the ways to not be a workhorse for the IRS during your working years is to get to that over $2 million range so that you can put money away where you're just paying capital gains taxes on a lot of your income.

Ford Stokes:
So chances are you don't want to do that. You don't want to be a workhorse for the IRS during your retirement. So what my goal would be is to help you move money. From your IRA into your Roth IRA. So if you've got a bunch of money sitting in your 401. Or your 403 B, then what I would encourage you to do is to make sure that when you retire, move money from there over to your IRA. Then once the money's in your IRA, you're going to move money over into your Roth IRA. And I'm going to give you a hint here. The goal is to move your money dollar for dollar from your IRA to your Roth IRA so that as your IRA is depleted, you're going to increase the Roth IRA commensurately. And here's how to do that. The way to do that is take taxes. Let's say you're moving 100 grand just for easy, easy dollars and easy math for me. Let's say you take $100,000, you're in 20% effective tax rate. That's your top marginal rate. So you're going to owe 20 grand on the 100 grand that you moved. So you pay $20,000 in taxes in the year that you do that. But what you do is you take the $20,000 and you withdraw it from your taxable account.

Ford Stokes:
Deborah, who works in our office, she actually has a car fund and she builds up a car fund as she is saving money from not paying a car payment. What she does is she takes the $600 she would have in a car payment and she puts it into an account each month. And therefore, when she's ready to buy a new car, she's got that money saved in her car fund Plus the car fund actual account is continued to grow. So what she did is she took money from her car fund. She had actually over $80,000 because we had grown her account. And so she took basically 20 to $25,000 a year to pay money on her Roth IRA. And she's now in year four of a seven year Roth ladder, and she's going to save hundreds of thousands of dollars. She's going to save six figures during retirement by not paying taxes on her Roth IRA money. And a Roth IRA account will give you an example. There's a Rob and a Janice here. We're going to we changed the names to protect the innocent, but I'm going to give you a full, full fledged married couple example. So, Rob, he's married. He's 63 years old. He met his wife in high school. She's the same age as him. And she's also 63 years young.

Ford Stokes:
He has $760,000 in his IRA. He's making $166,000 in income for the next four years and is going to stop working after that. He's going to stop working at age 67. He's an engineer for a Fordune 50 company that's here in town, and he's moving money from his Roth from his taxable account. To pay for the taxes on his Roth conversion, where he's moving money from his IRA to his Roth IRA. Dollar for dollar. So here's what the actual result is. So what he's doing is he's going to do 149 right around $150,000. He's moving each year over the next four years, and he's going to move about $40,000 a year. Until it's all the way gone. But he's going to have growth on that $760,000 as well. So that's what the the 40,000 left over once he retires. What's happening there? So his estimated retirement tax bill is going to go from 834,000 total over 35 plus year retirement down to 356,000 for a tax savings of 478,000 for he and Janice, his wife. The total retirement and inheritance tax savings that he and and Janice and their kids are going to enjoy is $718,000 off of a $760,000 IRA because his kids are inheriting a Roth IRA, not inheriting an inherited IRA. So it's really great for Bob and Janice, but it's almost just as good.

Ford Stokes:
Or his two children. Because they're going to inherit 50% each of his Roth IRA. So here's how you can not be a workhorse for the IRS after you stop working. Implement a Roth ladder conversion. Try to move money. Dollar for dollar from your IRA to your Roth IRA. If you're paying less taxes on money you have now versus paying higher taxes on money you're going to have in the future. And just simple binary math paying a lower tax rate. You're going to save six figures in retirement. I would just ask you, why wouldn't you do that? It's a major part of our practice here at Active Wealth Management. What I would encourage you to do is give us a call at (770) 685-1777. Again, our number is (770) 685-1777. Or you can visit ActiveWealth.com that's ActiveWealth.com and click that schedule a consultation button in the upper right corner and you're literally going to be placed directly into my calendar. We're happy to help you. And we don't charge for this. This is a $1,300 value to give you a free portfolio analysis and a free financial plan to your 95th birthday with your current plan that has nothing to do with us. Also, we'll give you a free financial plan to your 95th birthday. With our recommended portfolios and then also with a Roth ladder conversion will also give you a Social Security maximization report and a retirement income plan.

Ford Stokes:
All of that at no cost to you. So we're happy to help you. Get a plan. We also want to help you get a plan to stop being a workhorse or the IRS during retirement. Mean, do you really want to be paying 20 years after you retire, be paying ordinary income tax on the money you withdraw from your IRA even after you stopped working? Do you want to pay higher Medicare surcharges because your ordinary income is higher, because you're taking money out of your IRA versus taking money out of a Roth IRA? Do you want to pay more taxes on the Social Security income benefit you're receiving? I would imagine the Answer to all those questions is no. So if that's the case, let us help you. All you have to do is visit ActiveWealth.com and click that schedule consultation button in the upper right corner and you'll get booked directly in my calendar. We come back, we're going to be talking about the three different types of retirement money. And I want you to be able to pick two of the top three for me right here on the Active Wealth Show on Am. 920 The Answer, come right back to hear about the three main types of retirement money. And I want you to pick the top two out of those three. Come right.

Producer:
Back. Thanks so much for listening to the Active Wealth Show. Make sure to rate us everywhere you listen to podcasts, including Spotify.

Producer:
Do you want more monthly income during retirement? Are you growing concern that you can't count on Social Security? Ford Stokes, author of Annuity 360 and host of The Active Wealth Show, wants to take this stress out of retirement planning by providing a complete portfolio analysis and retirement income plan free of charge to listeners of this station. Schedule your one on one consultation at ActiveWealth.com that's ActiveWealth.com Investment.

Producer:
Advisory services are offered through Brookstone Capital Management LLC, a registered investment advisor. They say it's better to give than to receive. But is that true when it comes to your budget? I'm Matt McClure with the Retirement.Radio Network Powered by Amira Life. Everyone loves to get and give gifts no matter the occasion. Holidays, birthdays, anniversaries, you name it. But how can you celebrate those occasions without breaking the bank? One way is to make a plan and set a budget for gift giving. But you have to stick to it. I want you to put it.

Kristin Merrick:
All in a list, put it all on wherever, whatever works for your brain, and then assign the actual dollar amounts. Okay. Susie gets a $50 gift. Yes, exactly. I'm going to only spend $100 on wrapping paper this year.

Producer:
Kristin Merrick is a CNBC contributor and recently told the Today Show.

Kristin Merrick:
And then add it all up. And if it's too much money, then guess what? We have to start cutting people.

Producer:
Another hack she recommends is using cash to do your gift shopping.

Kristin Merrick:
Have the actual transaction. So when I give you actual money, I have this. Oh god, I just gave him $40. True. That is a real transaction just taking place. Credit card swiping is dangerous. So this is something that you can use if you only want to spend cash this year or if at least you want to curtail your cash.

Producer:
At Christmastime, Ask your family if they would like to draw names and agree on a price limit. Instead of buying gifts for everyone in the family. You may be surprised at how many of your family members are also trying to save money, especially during the holidays. So do you overspend when it comes to gift giving? And are you willing to cut back? It's a key question to consider, and it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network Powered by A Life. I'm Matt McClure.

Producer:
New rules across Major League Baseball have shown their effects both on and off the field. I'm Jim Tarabukin with the Retirement.Radio Network. Powered by Amara Life. In 2022, the MLB Players Association agreed to a handful of new on field rules, with the goal to increase the pace of play. A pitch clock was introduced prior to the season, eliminating downtime between pitches. The numbers are in and game times across baseball are down an average of 31 minutes this season. But the new on field legislation has led to necessary changes off the field. President of Life Flip Media Eric Mitchell, explains the controversy further.

Eric Mitchell:
It's controversial because everybody's so used to the seventh inning. That was it, right? Beer sales are shut off, so games are shorter. Beer sales are, you know, is important. They're also major sponsors of the teams.

Producer:
Mlb teams aren't governed to a league wide alcohol sales policy on how long into the game beer can be sold, but the seventh inning has traditionally served as that cutoff point. But according to the Associated Press, the Milwaukee Brewers and the Texas Rangers are two of five teams that will now sell alcohol through the eighth inning of their home games. Milwaukee President of operations Rick Schlesinger talked to MLB.com about his team's revised policy, saying, quote, If it turns out that this is causing an issue or we feel that it might cause an issue, then we'll revert to what we've done previously per the same report, the Miami Marlins and the New York Mets will halt their sales after the conventional seventh inning timestamp, but aren't ruling out potential changes in the future for the Retirement.Radio Network powered by AmeriLife. I'm Jim

Producer:
Like what you're hearing you can watch the show too, visit YouTube.com and search the Active Wealth Show to watch clips from this program.

Ford Stokes:
And welcome back. Activators the Active Wealth Show. I'm Ford Stokes, your chief financial advisor. I've got Sam Davis here with us on the board. He's our executive producer. And what we're talking about now is we're going to talk about three different types of retirement money, specifically three core types of investment money out there. And what I want you to do is you're driving around, headed to Publix or Kroger or Home Depot or Lowe's or going to a kid's athletic event or you're going to the lake or Lake Lanier near our office, our offices now up at Exit 12 on McFarland. So not too far north is Baldridge Marina on Exit 15. If you're driving around Atlanta, I want you to be thinking about what are the three types of money you like the best out of these three core types of investing or retirement? I'm going to go through these. And what I'd like you to do is send us a tweet back to active wealth. M The M stands for management and and or you can send me an email at Ford at ActiveWealth.com or you can call us at (770) 685-1777 and give us the one 2 or 3. And what are your top two out of these three? So here's what we call kind of our active wealth modules. And this is our module two that we walk through with with clients. And so this is one of those things you'll experience when you come to meet with us here at Active Wealth.

Ford Stokes:
And we're going to walk you through three main types of money that is invested out there, the different types of accounts and different types of investing for retirement. So the number one way is not in the market. And here's what that product is like. It's you've got growth with safety. There's market upside, there's limited to no downside. The principles and gains are protected contractually. And then there's a low cost between 0 and 1% of an annual fee. There's no advisory portfolio fees with this type of of money, this type of investment you can earn really now you can earn between 7 and 10 plus percent because the interest rates have gone up. You've got options for guaranteed income where you only advance. You never take a step back. So that's not in the market. That's the number one type of investing for retirement. The number two type of investing for retirement is in the market passive. So the first one was not in the market. That's number one. Number two is in the market passive investing. So with passive investing, it's a lot like your 41K right? It's you've got passive investing, you're capturing 100% of the market gains. You're also capturing 100% of the market losses and it's a low cost kind of 1% annual fee that you usually give or take 20 or 30 basis points. That shows up in things like 12 B1 fees and mutual funds and things like that.

Ford Stokes:
The time horizon on these types of investments are. 10 to 30 years. So it's a lot like your 401. K or your 403. B or your 457. And then you've got in 2008 with the mortgage crisis and when the S&P 500 from March zero eight to March zero nine lost 50.1% of its assets. In 2008 alone, it lost right around 38%. So the folks that were invested in the market passively during 2008 would have lost 38% of their money. But in 2009, that would have come back 26%. But the problem with sequence of return risk, they lost 38% on a larger principal. So let's say you had $1 million in the in this in the market passive investment, just kind of like your 401. K, right. Well, with fees and the losses. And everything. Even after the market came back in 2009 of 26%. But since you lost 38% on a larger. Principle, you would have lost $237,500 out of that million dollars during 2008 and 2009. That's literally in two years of your retirement. So like 1/15 of a 30 year retirement. Can you imagine losing $237,500 and only having $762,500 left over for $1 million policy? I mean, $1 million investment for $1 million investment For some people, that's a lifestyle change. So that's in the market. Passive. That's number two. Number three in the third and final one in this situation. And the scenario I'm giving you three different options.

Ford Stokes:
Option one was not in the market investing. Number two is in the market passively investing, and in number three is in the market tactical investing. Our goal with tactical investing is to capture 70% of the market gains and 40% of the market losses. Doesn't always work out that way, but that's our goal. Higher cost is usually right around 1.5%, although we don't charge anywhere near that amount, we charge actually less than 1% for our clients because we feel like fees are a really important part of your planning. We want to minimize the fees for you because we're on the same side of the table as you are. The time horizon is 6 to 8 years on these on this investment. You don't want to invest in tactical asset allocation managed portfolios in 6 to 8 weeks. As an example, you want to invest in a 6 to 8 year period. In 2008, these folks would have only lost 16% of their money. But in 2009 it would have come back. Only 18.2 would have come all the way back, 26%. Well, in this scenario, if you had that same million dollars that you'd invested in the market passively, if you'd invested in the market tactically, instead you would have only lost $37,225. That's a $962,775 account left over at the end of 2009. So my question to you is this which of the three do you like the best and which of the three do you like the second best? And I'll give you some inside baseball here.

Ford Stokes:
Most people select 1 in 3. Most people, especially when they're dealing with. Being in that retirement red zone, which is the first five years before retirement and the and the first five years after retirement. They really struggle with taking risk and they don't want to take risk. And so they really like 1 in 3. And if you like 1 in 3, then you probably ought to visit active Wlwt.com to schedule a free consultation with us and we can walk you through our four modules and walk you through these three different types of investing and what you can do about it and what's best for you. Our overarching goal in sharing all of our information here in the Active Wealth Show is help you build a market efficient, tax efficient and fee efficient portfolio that can prepare you for successful retirement. That's what we're trying to do here. And we come back from the break. We've got segment four. We're going to talk about the five steps you can take to catch up on your retirement. And we're also going to play my chapter on personal pension planning. From my book Annuity 360. Again, you can get my book annuity 360 absolutely at no cost to you. All you've got to do is visit Annuity360.net. That's annuity 360. Dot net. Come right back and hear about the five steps to catch up on your retirement plan.

Producer:
So you know where you are now and where you want to be in retirement. So how do you plan to get there? I'm Matt McClure with the Retirement.Radio Network Powered by AmeriLife.

Producer:
There are a lot of questions to ask yourself when you start your retirement plan. Questions like When should I retire? How much money will I need? When should I claim Social Security? What about health care costs and taxes? In retirement, this complicated puzzle means you're probably going to need some help coming up with a smart retirement plan.

Ford Stokes:
If you want to retire successfully, you really need to plan early. You know, Inspector, you expect and get prepared. Putting a plan in place now while you're still working is a great idea.

Producer:
Ford Stokes is founder and president of Active Wealth Management. Once you find a financial professional you want to work with, they can help you Answer all the questions you may have.

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. We talk about this human capital versus actual capital. 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. 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.

Producer:
There are also some retirement costs you may not have considered yet. Long term care, for example. Did you know it's not covered by Medicare? What about home renovations? If you decide to stay in your home instead of moving into a facility? Your home might need some updates to ensure you're safe and comFordable. And those are just the tip of the iceberg. So do you have a fiduciary financial advisor or professional to help you wade through the complicated retirement planning process? That is a key question to consider. If you want to make the most of your hard earned money with a Retirement.Radio Network powered by a mirror. I'm Matt McClure.

Producer:
We have Ford Stokes, author of two important personal finance books, Annuity 360 and taxes are on sale here on Am 920. The Answer, as the host of the Active Wealth Show Saturdays at 12:00 noon and Sundays at 11 a.m..

Producer:
You may think you're stuck with your utility providers, but you could be wrong. I'm Matt McClure with the Retirement.Radio Network. Powered by AmeriLife, utility bills for things like electricity and natural gas have been climbing fast over the last year or so due largely to Russia's war in Ukraine. If that gives you sticker shock once a month, there could be hope for you and your wallet. Depending on your state regulations, you may be able to shop around between different third party energy providers instead of using the default utility provider in your area. When it comes to electricity, the federal government says 15 states and the District of Columbia allow you to shop around. More than half of all states allow you to choose between natural gas providers. That's according to the American Coalition of Competitive Energy Suppliers.

Kenneth Gillingham:
One can move to any of these other companies. And actually, right now, it's a good deal.

Producer:
Kenneth Gillingham is an energy expert and professor at Yale University. He recently told Wfsb-tv that changing providers could save you a pretty penny. But there's a catch for.

Kenneth Gillingham:
Most people right now, it's a good move. But if you're the type of person who makes a decision and then doesn't ever check your bill anymore, it might not be the best move.

Producer:
So you've got to pay attention to your bill. Each month, suppliers can raise rates after any initial contract period runs out. A good resource to find third party providers for your address is the website Choose energy.com. So could you save by shopping around for a new utility provider? That's a key question to consider and it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network Powered by AmeriLife. I'm Matt McClure.

Ford Stokes:
And welcome back. Activators to Active Wealth Show. I'm Ford Stokes, your chief financial advisor got Sam Davis here on the board with us is our executive producer. And Sam, we're talking about the five steps to catch up on your retirement plan. You know, starting retirement planning late can be challenging, but it's never too late to take action and improve your financial situation. Here are five steps to begin planning for retirement. If you feel like you've started the process too late. So, Sam, if you could, I want you to share these one by one and we can then dive into each one of these. And I've got a couple of other hints to add.

Producer:
Yeah, for sure. We shared the statistics about Generation X and their lack of retirement savings. And so step one here would just be to assess your current financial situation. And Ford That's what you were talking about earlier in the show. Active Wealth provides a $1,500 value to all of its listeners. So all of you listening today can take advantage of that just by visiting ActiveWealth.com. And that's just taking a comprehensive look at your financial status, taking a look at your net worth, your own personal household balance sheet. What are your debts? What are your assets, your savings, your investments, you know, what's your home worth? How much do you still owe on your home as well as any of your other liabilities and maybe student loan debts? Any other mortgages on second homes? So first you want to understand your income and those expenses. Then you can identify areas where you can potentially save more for retirement.

Ford Stokes:
Yeah. Mean we again, we do offer a free financial plan and a free portfolio analysis at no cost to you Just to kind of recap that for everybody, we're going to give you a portfolio analysis. You can understand the risks you're taking, the fees you're paying and the correlation of your assets. So that's number one. Number two is we're going to give you a Social Security maximization report at no cost to you. Absolutely for free. And then we're going to give you a financial plan to your 95th birthday with your current plan that has nothing to do with us. And then number four is we'll give you a financial plan with our recommended portfolios, with our recommended retirement income plan, with a little bit of a retirement income gap analysis where you've got a positive income surplus or a negative income gap, We're happy to help you with that. And then we'll also give you a financial plan to your 95th birthday at absolutely no cost to you. That also includes that retirement income plan, but also includes a Roth ladder conversion plan or a 5 to 7 year period that could also help you. So it's all of that together is about a 1000 hundred dollars value. And we want to do everything we can to help you protect and grow your assets on the front end so that way you can make an informed, that way you can make an informed financial decision if you want to work with us or not.

Producer:
And once again, you can just visit ActiveWealth.com. To learn more, you can schedule a consultation directly with Ford by clicking on that set an appointment button in the upper right hand corner. So number one is assess your current financial situation and visit ActiveWealth.com for that. Number two is setting specific retirement goals. Maybe you and your spouse want to retire at a specific age. Maybe you want to downsize and relocate so you can live closer to the water, maybe in the mountains when you retire. So. Set those specific retirement goals so that you can make sure that your plan aligns with those goals and you can achieve them. Number three would be maximize your retirement savings contributions. That means contributing as much as you can to your 401. K, your any IRAs you have your Roth IRA. We've done a lot of talking about Roth IRAs today. And you can also take advantage of catch up contributions if you're 50 and older. So if you're feeling a bit behind, don't worry, you have some room to do catch up contributions as you get closer to retirement. That's step three. Step four is a simple one. Back to fundamentals creating a budget and cutting those unnecessary expenses. So just taking a look at a couple of months expenses, combining them, dividing them by two, you know, it never hurts to go through that whole bank balance sheet and see, you know, maybe you've got some subscriptions or something that you don't need anymore and you can actually free up maybe a few hundred dollars or more a month just by cutting out those unnecessary expenses. So that's step four. Number five would be consider delaying retirement or taking on part time work. That's an if you need to. And whenever you work with active wealth, we're going to try and help you avoid that whenever possible because I know people want to get to that retirement that they've been working so hard for. And the bonus step is simply seeking professional advice and understand the active wealth management is always there to help you.

Ford Stokes:
No doubt it's a couple quick hints. One is you want to try to pay off as much stuff as you can. You want to also make sure you get your house paid off so that mortgage doesn't eat up one of your Social Security payments that you get. You also want to do everything you can to minimize the household expenses on a monthly basis. Just try to drive those monthly expenses down. And the third big hint here is remember that your income is your greatest wealth generator. So do everything you can to kind of prolong income and also relaunch, maybe instead of retiring, try to keep things going, working at your pace and directing money where you want it to go.

Producer:
Yeah. So a little bit of homework for all of the activators listening schedule your free consultation, you're a listener to the show, so take advantage of that at ActiveWealth.com and you can also get Ford's book annuity 360 just by visiting Annuity360.net or give us a call here at the office (770) 685-1777. We can get you on Ford's calendar over the phone. We can also get you that book set right out to you as well. And Ford, we want to do a little bit of annuity 360 before we wrap up the show today, let's go ahead and play this chapter on how you can build your own personal pension.

Ford Stokes:
Chapter nine, you can create your own personal pension. Big idea Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don't overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date. You specify you don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don't give the annuity company fees for doing nothing. We prefer fixed index annuities for our clients that do not have an income rider fee, but you can still create a personal pension without an income rider on your annuity.

Ford Stokes:
If you get an annuity with an income rider, but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuity using your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principal, depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments. Without an income rider, you should consider the features your income rider is providing you before deciding to purchase it. As an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be RMD friendly so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier.

Ford Stokes:
Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself Specifically, you should read the annuity illustration guaranteed and non-guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company. So caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they'll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income rider know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1.5% of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you are working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at (770) 685-1777 or visit ActiveWealth.com.

Producer:
Investment Advisory services offered through Brookstone Capital Management, LLC BCM a registered investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance cannot be used as an. Indicator to determine future results.

Producer:
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.

Producer:
With stock market volatility and political discourse becoming the norm these days, many retirees are seeking safer options to protect and grow their hard earned money. If you're ready to stop putting off retirement planning, head over to ActiveWealth.com today to schedule your free consultation and portfolio analysis. That's ActiveWealth.com.

Producer:
Investment advisory services are offered through Brookstone Capital Management LLC a registered investment advisor.

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