AWS Full Show 7.21.mp3: Audio automatically transcribed by Sonix

AWS Full Show 7.21.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

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

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

Ford Stokes:
And welcome the act of wealth show activators. I’m Ford Stockton chief financial adviser and I’m joined by Sam Davis, our executive producer. And Sam, say hi to Bright.

Sam Davis:
Welcome to the weekend activator. So happy you are here with us on yet another episode of the Active Wealth Show.

Ford Stokes:
It’s also really good to have a weekly ambassador to welcome everybody of the weekend. So that’s in addition to your. You know, executive writer, producer title there. Sam, you also are a life and health license advisor as well. It is interesting to note that you are the weekend ambassador to.

Sam Davis:
Yes. And we’ve had a rainy day. Lots of clouds here in Atlanta this week. And it looks like that the skies are going to open up this weekend. So get outside, but stay cool because I know there’s a big heat wave rolling across the country right now. So definitely make sure that A.C. is on and stay cool.

Ford Stokes:
I didn’t know that. July showers bring August flowers. I didn’t know that. But it looks like it at least is making my lawn greener.

Sam Davis:
Yeah, the grass is is growing out there. It’s growing, like, faster than than I’ve seen it grow all year, so you’re going to have to get out there and cut the lawn, too.

Ford Stokes:
No doubt about it. So also, if you’re just kind of new to the show, we call listeners to our show. We call them Activators. So congratulations, you are now an activator. And let me just tell you who an activator is. It’s someone who listens to the show, somebody who wants a tax efficient, fee efficient and market efficient portfolio. Someone is willing to do what it takes to build a successful retirement. It’s well beyond just, hey, building one big nest egg, really risk management, especially in today’s times, plus staying invested, plus making sure that you’re not exposed to too much risk with bonds and things like that and considering bond replacement strategies. We talk through that. Also, we we employ tactical asset allocation and strategic allocation in our portfolios. And so we’d love the opportunity to help you protect and grow your wealth. We rebalance our portfolios every single month to make sure that we’re not riding the lowest of lows and we can rebalance even on a daily basis if need be. But we employ tactical asset allocation, which means that we’re rebalancing and we’re managing your money actively. That’s why the name of our show and the name of our company is Active Wealth Management, and Active Wealth Show is the name of the show. So welcome activators. And on this week’s show, we’ve got a lot going on. We’re going to have our financial wisdom quote of the week here in just a little bit.

Ford Stokes:
We’re we’re going to play right or wrong, hopefully in this segment. Then we’re also going to kind of walk through a problem solver story where we’ve been trying to help solve the problem of a of a retiree. And then. We’re going to talk about how what happens and what goes on when you get a full retirement plan consultation with us. We’ve got a great cost cutter for those of you folks who like to travel and like visiting our national parks, we’ve got some really good ideas there. And we’re also going to talk about one of the big the real core financial rules and how to restrict the withdrawals you have. To make sure that your money outlives you versus you outliving your money. We’d rather make sure that we want we’d love to have you live forever, but we want to make sure that you don’t run out of money in the meantime. And we also have an inflation demonstration. We think you’re going to like that. And we’ve got this week in history, we’ve got a couple of options here in business, music and movies. And we’re going to talk about retirees fear their number one greatest fear out there. And here’s a hint it’s not death. And also what is a retirement income gap. So we’ve got a lot to talk about on this week’s show, Sam, and we’re super excited to do it. And right now, let’s get started with the market update.

Producer:
Your active wealth market update.

Ford Stokes:
Okay. So here are the key events kind of taking place that kind of took place on this week. Tesla. Shares of the electric carmaker were up 2% in pre-market after the company announced that its second quarter profits fell 32% from the previous quarter. But overall earnings are stronger than expected, even as the manufacturer faced an uphill battle with plant closures in Shanghai and supply shortages. In an earnings call, the company said it netted $2.26 billion in profit for the quarter and stuck with a prediction of 50% annual vehicle sales growth over the next few years. And by the way, on Thursday, they were up 9.38%. United Airlines. Shares of the carrier were down 6.5% at $38.95 in extended trading after the company posted a lower than expected quarterly profit, its first without US aid. Since the pandemic began, the adjusted profit of $1.43 per share for the quarter through June was below analysts expectations for $1.95, and that was according to Refinitiv earnings and agenda. It was the busiest day of earnings on Thursday with American Airlines, AT&T, AutoNation, Blackstone, D.R. Horton and Domino’s Pizza among the companies reporting before the market open and the companies on deck for the earnings after the bell included Boston Beer, Capital One, Financial, Mattel, SNAP and Tenet Healthcare Economics reports. Investors will also digest the Conference Board’s Index of Leading Economic Indicators and the latest in continuing the initial jobless claims, which was which was higher than it’s been in the last eight months. And European rates. The European Central Bank will reportedly raise interest rates for the first time in 11 years on Thursday with a bigger than expected move, seen as increasingly likely as the policymakers fear of losing control of a runaway consumer pricing growth.

Ford Stokes:
And now let’s go ahead and share. The financial wisdom quote of the week. And this one comes from Benjamin Franklin. He said An investment in knowledge pays the best interest. And if you’re listening to this show, you’re looking for investment knowledge. And we want to make sure that we help you protect and grow your assets. We want to help protect and grow your hard earned and even hard saved money. It’s often harder to save the money than is to make it right. And a lot of a lot of us will spend up to the level of what our income is. And we need to be careful about that. We need to try to save between ten and 15% a year during our prime earning years, at least saving 6% and definitely making sure that you’re paying up to the match of what your company is matching because 100% growth is fantastic. And I don’t know a lot of advisors that can give you 100% growth and we don’t claim to be able to do that. So I would say that you do everything you can to at least invest up to the match, the matching level. So that way you can build your hard earned and hard saved wealth and just keep building that 41k plan that IRA that four or three be that for 57 or even your SEP IRA also for you business owners out there, if you’ve been struggling and you just keep putting money back in your business, I would beg you to try to consider investing directly into yourself and pay yourself first.

Ford Stokes:
I think that’s a really important thing to do, and one of the best ways to do that is to open up an. Sep IRA. So Sep IRA is a stands for simplified employee pension and that allows you to put aside 25% or up to $61,000 in assets a year into your SEP IRA. And that also will reduce your ordinary income by that same amount. So let’s say just for round numbers, let’s say you’ve got $200,000 in income from your business. As a business owner, you can invest up to 50,000 into your Sep IRA, which is 25% of the 200,000 of ordinary income. That would also reduce your ordinary income by 50,000, you would pay on 150,000. As your order income rate. And that would that would be where your effective tax rate would be placed against in our progressive tax system. So now let me just kind of share here. Here’s what you can expect when you come in for a full retirement planning consultation with us. You know, we provide comprehensive consultations at no cost to our listeners and no obligation. And you only work with us if you think that’s what’s best for you. We want to help you make an informed financial decision before you pull the trigger on moving your assets and working with us, we want to kind of analyze your financial situation. Just let us do that for you. We’re going to do that for free at no cost.

Ford Stokes:
We’re going to help you understand the risk you’re you’re taking, the fees you’re paying and the correlation of your assets so you can understand how to minimize the losses. I mean, give you an idea, you really do need to stay invested really wise man said, hey, don’t try to time the market instead measure the time that you’re invested in the market. You want to make sure that you are invested in the market. And example from June 16th to today. We’re basically up. All the major indices are up 8.34% since the bottom. That’s remarkable. And. You need to stay invested, stay the course, and markets will play out for sure. But what we try to do is we’ll we’ll also closely examine any annuity or annuities you may have or any life insurance policies you have. If you have cash value, life insurance, you have that old whole life policy. You owe it to yourself to give us a call at at active wealth at 7706851777. Again 7706851777. Or visit active wealth. We’re happy to do the analysis of your life insurance policy or your annuity policy. Also, you have a variable annuity. Definitely give us a call because we’d love the opportunity to help you get into a better financial product that is likely going to be much lower in fees. And when we come back from the break, we’re going to go ahead and play right or wrong. Sorry we couldn’t squeeze in in this first segment. And I think you’re really going to enjoy this right or wrong. It’s a lot of fun. And we’ll be right back.

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

Music:
We get it almost every night. And when that. That’s a big and bright. It’s supernatural delight. Everybody was dancing in.

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

Ford Stokes:
And welcome back activators to the active all shown force so your chief financial adviser I’ve got Sam Davis with us is our executive producer and weekend ambassador. And Sam, we’re going to play a little right or wrong and we encourage everybody to play along with us here. And Sam, I’m going to let you tee us up.

Sam Davis:
Yeah, we’ll do forward. The rules of the game are very simple. The game is right or wrong. I will read a statement and then you let me and all the activators know if that statement is right or wrong. So we’ll start with the first one. There is no product safer than a bank CD when it comes to protecting your money. Wrong?

Ford Stokes:
Yeah. I would say the sound is correct. It is wrong. A fixed indexed annuity can protect your wealth while also providing upside as a principle. Invest is tied or linked to an index, but zero is your hero because your money is not invested in the stock market. Your money is invested into the US ten year Treasury bond. The FDIC only protects up to 250,000 in deposits, and there’s only between a three and 10% financial reserve requirement at banks, according to FDIC regulations. So if you give somebody if you give a bank 100,000 for a bank CD, they’re going to put 10% in their vault or their reserves. So with ten grand in the reserves, and they’re going to loan out 90%. And so what’s interesting, though, is. Insurance and annuity companies, they are required. To reserve 100% of the money you give them. So 100 pennies of every hundred pennies you give them, they have to put it into a safe financial product. And then the next thing they do at the end of year one, they take the interest that’s generated as it’s invested into the ten year US Treasury in this case right now, the ten year US Treasuries paying about 3.31%. So $3,310 at the end of year one. They’ll take that and invest it into options into things like the S&P 500, the NASDAQ 100, the Russell 2000, Credit Suisse, Raven Park, the Barclays Atlas five, the JPMorgan Cycle Index.

Ford Stokes:
There’s all kinds of different indices out there. The different financial institutions have provided. But what’s important is to make sure that you’ve got a high participation rate and how that index performs. We sell a lot of products that have a. 90 to 95% participation rate in the indices that are linked to the products that we sell. We don’t believe in really selling a product that’s linked to the S&P 500 where they’re only giving you 32% and the company is taking 68%. We don’t think that’s right. And so that’s what we do. We also try to knock the fees out of this, but we try to avoid any income writer fees. That’s what we do as advisors. And so I would just say the answer to that is wrong because I personally and I mean, it’s a wrong on my on my personal view, but I’ll let the listeners and use them make up your own mind on this. Would you rather be invested in a product that is required to have a 10% finance reserve? Or would you rather invest in a product that has 100% financial reserve?

Sam Davis:
Absolutely. All right. Second statement in right or wrong, if you choose to take a lump sum on your pension when you retire, you can receive up to a 10% bonus on your money.

Ford Stokes:
Well, that is right. You actually can do that if you take the lump sum and then invest it into a different product. So a lot of a lot of pensions are funded by something called a CPA. It’s called a single premium immediate annuity. And that immediate word in there is really important because when you want to turn on a pension, you want to turn on the income immediately like that month. And so Spears are really good products at paying your money back. They’re an insurance product. They are an annuity. And there’s 100% financial reserves on those as well. But they are not linked to an index. They are really good at paying your money back. They’re not really great at growing your money. And also, there’s usually no value of spears at the end of a long payout and no account value at the end of a long payout because you it will have dwindled down the account value. We like to invest. We like to invest our clients money, you know, at their decisions based on our recommendations. We like them to invest in fixed index annuities that are index linked. And a lot of fixed indexed annuity companies will offer a 10% bonus, especially if you give them a seven, ten or 14 year period on a surrender period so they can make money off your money over the long haul. And at absolutely. They’ll give you a 10% immediate bonus, but that you’re not able to take out that money to the next day because they’re surrender penalties that are they’re included. But. It’s pretty neat to be able to get an account value that suddenly is up 10% immediately on something that you would have dwindled down. That also is market linked that can really grow. So I would say the answer to this one is right.

Sam Davis:
All right. And last statement here on this week’s edition of Right or Wrong, Right or Wrong, Ford, the happiest retirees have paid off their home.

Ford Stokes:
That’s been my experience. I would say it’s right. You know, it’s more of a subjective that’s a subjective one for sure. But of my clients, the happiest people who show up in my office year over year when they’re coming in for reviews or every six months. Most people would like to see my bald head about once every six months on market or market reviews and and client reviews. But, you know, a mortgage payment can consume a lot of your monthly income. It actually usually can eat up one of the two Social Security income payments that you receive into the household for a married couple. And while some people recommend or some advisors recommend not paying your house off early, keeping more money in the market, they may want you to do that, but we recommend that you delete your mortgage from your expense side of the ledger and take a huge leap towards your own financial freedom.

Sam Davis:
All right. And that’s this week’s Right or Wrong.

Ford Stokes:
It’s pretty awesome. Everybody seems to really like right or wrong. We get a lot of comments. And also, if you really if you like this right or wrong and you’ve got some questions or you’ve got your own right or wrong, you can send them into us and we’ll we’ll try to cover them here. You just send me an email at Ford at Active Wealth dot com or you can just send us a tweet at Active Wealth M And that’s our Twitter handle is Act at Active Wealth. M Or you can just send us a comment on our Facebook page and Active Wealth. But yeah, we have a lot of fun with that segment. So now let’s go in to our problem solver.

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

Ford Stokes:
Are you concerned about market volatility and bonds underperforming your own expectations? Market losses and poor payouts from bonds can drain on your individual portfolio. Rising rates may make your bonds worth even less. So if you hold a bond. And suddenly. You know, there’s a new bond that comes out that’s got a higher interest rate. Guess what? Your bond is worth less and it’s less attractive to buyers. And therefore, you have to discount your bond to make it equal to the new bond that’s paying out of higher interest rates. Here’s a solution for that. And it’s also it used to be called a 6040 portfolio, so or it still is called a 6040 portfolio. And Harry Markowitz, you’ve heard this from me a lot of times, but Harry Markowitz was given credit for being the founder of Modern Portfolio Theory, which stated basically, if you invest in a portfolio that’s got 60% stocks and 40% bonds, as money rushes out of stocks, it will rush into bonds. And also the the bond portion will give the portfolio important income. And they’re both traded on the same exchange, but they are negatively correlated or at least non correlated. And I would tell you that there’s a different solution out there. Fixed indexed annuities can help you sleep better at night and help you forget about the market volatility. You’re also not exposed to systematic and unsystematic market risk. You also take advantage of market like gains without market risk. You can also replace your bonds with fixed indexed annuities.

Ford Stokes:
That helps you become more efficient in your portfolio because with a fixed indexed annuity, folks, I want you to hear this once you listen to me as you’re driving around trying to head to Publix or Kroger or you’re heading to Home Depot or Lowe’s or going to a kids or grandkids sporting event or your or your listing as you’re traveling down to 30 A or going to Sea Island or or wherever. I would just say, hey, here’s the deal. When you invest in a fixed indexed annuity, you delete the advisory fees that are associated. With your portfolio if you replace the bonds in your portfolio. Let me ask you, why are you paying money to your financial advisor? For your bond income because you’re not investing in bonds for growth, right? You’re investing in bonds for income more than likely and also more. Diorio R Chief Investment advisor is going to share kind of what’s going on with bonds in this year. And here’s a hint it’s not good. And what we’ve tried to do is recommend to our clients, hey, now is the time to replace. The bonds in your portfolio with fixed indexed annuities and take that ten, 20, 30, 40% of your portfolio invest in a fixed indexed annuity. So you can then make sure that your money is better protected and also still gives you income without having an advisory fee. Also, we ask you to please consider a we also ask you to please consider an accumulation based annuity, which is more a really a more of be efficient option.

Ford Stokes:
There’s no income rider fee. And so we try to eliminate those that 0.95 to 2% income rider fee. And also here’s another hint on that. There’s no reason you should have an income rider fee. Let’s say you want to defer on an annuity 5 to 7 years. You just don’t want to start taking income. Why are you paying an income rider fee for 5 to 7 years when you’re not going to take income? Why are you going to pay a fee to the insurance company when they’re not providing that service? And I would say that’s not a smart move. Don’t give people money or even companies money for not providing the service that they should be providing, even if you’re the one that’s in control of starting the service or not. And so just a recap here and we’re going to go to the break. But to recap here, you’re talking fixed indexed annuities is a great way to solve this problem of market losses with bonds and also to get more fee efficient with your bonds. And there’s no reason you should be paying advisory fees on the income portion of your portfolio. We come back from the break. We’re going to be talking about our cost cutter and also a really important rule during retirement that you should follow. Come right back with us. You’re listening. Active, well show writer, 920 the answer.

Music:
Back and back. Get up, but I think you better get up off that thing and dance.

Producer:
Thanks for listening to the Active Wealth Show. If you like what you’re hearing, make sure to rate our show on Spotify or wherever you listen to podcasts.

Ford Stokes:
And welcome back activators the active I’ll show I’m Dr. Chief Financial advisor and we wanted to play a couple of audio clips for you. And the first one is from our chief investment officer, Marc Diorio, saying go ahead and tee up that clip about the performance of Bonds so far in 2022. Hi, this.

Sam Davis:
Is Marc Diorio, chief investment officer. Is the market watch for the week of july 18 bonds have had their worst intra year decline since the aggregate bond index was initiated in the 1970s, dropping 13% and down around 10% year to date. With the Fed raising interest rates and inflation running hot, can bonds make any type of a comeback? Actually, the math for bonds is not as bad as you might think. By doing a parallel rate shock on bonds, the impact of a 1% rise in interest rates would lead to a 2.7% decline in the aggregate bond index, while a 1% fall in interest rates would lead to a positive 10% return.

Ford Stokes:
So isn’t it interesting that bonds have gone down as much as 13% this year and they’re now hovering right around a 10% loss of the year? If you had been invested in a fixed indexed annuity instead of 40% of your portfolio be invested in bonds, which is likely the case. Then I think you would be performing better right now and you would be 10 to 13 plus percent better off in total value in your overall portfolio. And I would just ask, how much longer are you going to allow this to go? How much longer are you going to allow some financial adviser say you have to stick with bonds? I mean, last week I had an 81 and 82 year old couple come into my office and they’ve lost a significant portion of their assets just in the bond portion because they’re older and they’re they’re invested 80% in bonds and they’ve lost, you know, between ten and 13% for the year. And and one of the things that the gentleman told me that originally from Texas, he’s a former architect and he’s like, I’ve never been 82 years old before. I have no experience at this, but I have no I’m not going to go out and start working again. And I can’t. Command the same salary I can’t command. You know, all I’m saying, I can’t do the same rigors of the daily work.

Ford Stokes:
And I don’t we should not be having these losses. And I agree with him and he should have been better protected. And that’s why they’re considering working with us to try to move. 40% of their portfolio into an annuity because they don’t want the systematic and unsystematic market risk that’s associated with bonds, also the the interest rate risk, all that stuff. Over the last several weeks, we’ve played the bond replacement chapter, which is chapter 15 of my book, Annuity 360. And you can get that book at Annuity 360 dot net. But I mean, it’s it’s just a problem. And I just wanted you to hear from somebody else. For Mercurio talking about the performance of Bonds right now. And I really think you should make a different decision. I think you should go ahead and visit active wealth dot com click that set in a consultation button in the upper right corner and we’re happy to help you and we’ll give you a free consult at no cost to you. And and or you can always just give us a call. Deborah and her team are standing by at 7706851777. Again, 7706851777. And we really appreciate you listen to the show. We appreciate all of our activators and we want to give you a free financial consultation so you can understand what you’re going to get and what you can deal with and try to get an idea of having your retirement results in advance.

Ford Stokes:
Again, we’re going to give you a portfolio analysis. We’re going to give you a financial plan on your 95th birthday. We’re going to give you also a Roth ladder conversion plan. We’re going to give you a retirement income gap analysis plan. And if you haven’t started taking Social Security, we’ll give you a Social Security maximization plan. All five of those things, if you work them together, can be like a fist hitting against the market and also delivering you a knockout. Great retirement if and it’s just a great way to plan for it. So I would encourage you to go ahead and make sure that you give us a call at 770 685 1777. Now, we also have another clip. There’s a lot of questions about inflation and where it comes from and all that stuff. And we have got an audio clip from Milton Friedman, who is obviously one of the most well recognized economists in the history of the world. And this this clip comes from over 30 years ago. And I want you to hear what Milton Friedman has to say about inflation and where it comes from.

Producer:
Inflation is made in one place, in one place only Washington, D.C. And in Washington, D.C., the chief source is a Greek temple on Constitution Avenue, which houses the Federal Reserve Board. And a major accomplice, of course, sits in the halls of Congress in Washington. They are a major accomplice because you tell them to be. The American people have been telling Congress for many years, spend more money on us, please. It has imposed inflation as a tax. That’s one tax that you don’t have to vote for, but you have to pay.

Ford Stokes:
So isn’t it interesting that inflation comes from government? It comes from Washington, D.C., because also we’re asking them to spend more money on us, spend more money on military, spend more money on on social programs. Both sides of the aisle are to blame. You wouldn’t treat your own checkbook that way because the bank doesn’t let you. And unfortunately, we’re letting Congress do that. And. We try to get fiscally responsible and. The pandemic has come on. And, you know, and, you know, for most of my adult life. The U.S. budget hasn’t been balanced. It’s ridiculous. And and so I would tell you, you’ve got to stay invested, so your money will grow along with this inflation. And one of the ways that they invested but still, say, safe. To still just stay safe is to invest in 100% financial reserve product with a fixed indexed annuity that’s also tied to a market index. So you can get market like gains without market risk. It’s really just that simple. I just think it’s a new 6040 portfolio. I really do. I think it’s 60% stocks actively managed, tactically managed and the rest of your money put into fixed indexed annuities. That’s what I think it is. I believe strongly about it. I. I want to delete the advisory fees from my clients. I want to minimize the fees. My job is about risk mitigation for my clients. Just like Warren Buffett says, the two rules of investing number one rule number one is just don’t lose the money. And rule number two is don’t forget rule number one.

Ford Stokes:
And I’m trying to do everything I can to not lose my clients money, especially in a difficult time. And one of the best weapons we have in our arsenal is to replace bonds with fixed indexed annuities so we can avoid that 10 to 13% down this year. That’s happened, as Mark Diorio talked about at the at the start of this segment. So the two things we’re talking about here is number one is bonds have lost 10 to 13%. Number two is Milton Friedman told us that inflation comes from one place and that’s Washington, D.C. And number three is we’ve got a solution for it. And the solution is moving bonds, the money that’s invested in bonds, and moving that into a fixed indexed annuity. It’s really just that simple. And I would encourage you to visit active Ofcom, click that, set a consultation button, the upper right corner. We’re happy to deal with you. You’ll you’ll meet directly with me. We don’t pass you off to another advisor. Happy to help you. No problem. And I’d also encourage you to pick the phone and give us a call if you want to. At 7706851777. And also want to just thank the activators and our listeners out there for making us the number one listen to radio show on the weekends on AM 920. The answer, I mean, that’s kind of a big deal. I mean, Sam and I sincerely appreciate it. We work hard at this. I mean, Sam and Sam’s been doing this with me for almost three years now, and.

Ford Stokes:
I. Just really appreciate his efforts and his support of our show. But we really appreciate the support of our listeners because you guys are looking for answers right now. You really are. And one of the answers is don’t lose all this money with bonds. And if they go up on interest rates again, guess what? The bonds you currently hold, they’re going to lose value again. So we’ve got to make sure that we keep the value. And yes, the bonds will pay out the interest that they were prescribed to pay out. But also you need to reduce the duration of your bonds, at least within your portfolio. If you don’t know what the duration of your bonds is, if you don’t know what the overall expense ratio is within your portfolio, you should visit Active Wealth dot com and click that set in a set of consultation button in the upper right corner. You should call us at 7706851777. Because if you don’t know what the the internal fees are with your portfolio, if you don’t know the duration of your bonds, if you don’t know the risk level or at least the grade level of your bonds, or do you have investment grade bonds or not? Then. You really should reach out to us so we can help you. So at least you can at least get the information. We want to make sure that you get enough information to make an informed financial decision.

Ford Stokes:
Because knowledge is power in every situation. And just like we said at the beginning, you know, we had Benjamin Franklin’s quote, an investment in knowledge pays the best interest. Brilliant quote from the 1700s. It’s a long time ago. At least 246 years ago because, you know, our country is 246 years old. So I would just encourage you to to reach out to us at active wealth dot com or just give us a call. You can also just send me an email forwarded Active Wealth. And if you want my free book Annuity 360, all you have to do is visit annuity 360 dot net. When we come back from the break, we’re going to talk we are going to share that travel cost cutter. We’re also going to share how restricting your withdrawals could really help. We’re also going to. Give me give you our inflation demonstration for this week, which everybody seems to really like. And we’ve got a couple of neat things for this week in history, and I hope you’re finding this show informative. We’ve come back after a couple of weeks of of running some recordings and doing some things, and we’re coming back guns blazing and trying to make sure that we’re doing everything we can to help you protect and grow your hard earned and hard saved wealth. And you listen to Active Wealth show right on AM 920 answer come right back for that travel cost cutter and one of the three top financial rules you should follow.

Music:
During your food chewing and the way the sunlight plays upon her head. You send the picture to me on the way back through the air?

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

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

Producer:
While at job analyst Jill Gonzalez.

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

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

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

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

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

Producer:
Though the Sunshine State is number one overall, if finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years? New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is, naturally, the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement and what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future with the Retirement Radio Network powered by a metro life. I’m Matt McClure.

Ford Stokes:
And thank you, Matt McClure. In my opinion, the best place to retire is Florida because there’s no taxation. It’s extremely tax friendly. And I don’t understand how New Hampshire and some of those others are higher up there. I feel like that’s easy grading on a tax situation. I think tax friendliness, biggest states for me are Florida, Tennessee and Texas. Those are the biggest ones for me. So just something to think about there. And I wanted to go back and we’re going to talk about the cost cutter and this one financial rule as well. But I want to go back and talk about kind of that problem solver and really replacing your bonds. We also had a single woman who’s age 65 and she had $600,000 saved. And she came in and she said, you know, I don’t want to be a burden on my kids. And she chose to invest 50% of her assets into an annuity so she could balance growth with safety and also keep pace with inflation. And she wanted to really also get started on an income plan. Next year, she was going to turn on income at age 66 and six months, which is her full retirement age with Social Security. So she’ll have both the annuity paying her income and then also Social Security paying her income. And therefore, she won’t be a burden on her kids.

Ford Stokes:
And she still got half of her money growing at a good clip. And she’s got a positive income retirement income gap. She does not have a negative retirement income gap, which I think is extremely important because you don’t want to start out your retirement with a negative retirement income gap. So now let’s talk through. We’ve also if you’re wondering about a retirement income gap, let me just tell you what a retirement income gap is. An income gap is the difference between retirement living expenses and income from guaranteed sources such as pension, Social Security or annuities. You take your monthly expenses, subtract your expected monthly income, and the resulting number is your income or surplus income. It’s greater than your expenses. What else it does is it helps you understand how much money you’re going to be taking from your IRA to fill that income gap on an annual or monthly basis. And we provide you with a free retirement income gap analysis when you schedule an appointment with us just by visiting active wealth dot com that’s active welcome and you just click that set a consultation button in the upper right corner. We’re happy to help you and you get to meet directly with me. So now, Sam, let’s go ahead and share the travel cost cutter.

Producer:
Ready to save some money. Here’s our retirement cost cutter of the week.

Ford Stokes:
It’s really about national park admission on a handful of days each year, national parks that typically charge an entrance fee will allow free admission to all visitors. Upcoming days include the anniversary of the Great American Outdoors Act, August 4th, National Public Lands Day, which is September 24th, and Veterans Day on November 11th. Many other national parks have no fees or discounts for military and senior. I like going out to New Mexico and hunting on our national forest lands and I pay for tags and I bow hunt for elk. I’ve also loved going to Yellowstone and Yosemite. I hope everybody’s okay out there in Yellowstone with all the flooding and the fires and everything else that’s going on, you know, prayers sent out to them. Sam, your thoughts on on some of your favorite parks. I know your dad is steeped in this. He’s worked for the US government doing this stuff to share a little bit about that.

Sam Davis:
Yeah. Absolutely. I grew up in the great outdoors as as he does a lot of land management and caretaking type things. And still to this day, my wife and I love hiking. We got engaged on a hike in a national park, actually, Great Smoky Mountains National Park, which is just up the road from all of us here in Atlanta. Great, great weekend trip to consider taking with your spouse, grandkids, family, whoever, and Grand Canyon. How can you forget the Grand Canyon? Incredible views. Good hiking out there as well. See the Hoover Dam and not too far from Las Vegas.

Ford Stokes:
Yeah, I love the Hoover Dam thing with Clark Griswold. Like the dam guide. The Hoover Dam guide. So good. That’s hilarious. Yeah. I’m glad you shared that about the Great Smoky Mountains National Park, and that’s really good stuff about you and Bailey getting engaged there. It’s neat. Then also, let’s talk through this 4% rule that we’ve talked about before, but certain retirement accounts such as IRAs and four one K’s have mandatory minimum distributions that you must take after age 72. However, if you’re recently retired or are nearing retirement and you’re not yet at that age, nothing is forcing you to take that withdrawal. Ideally, you want to avoid distributions whenever possible during a down market. This way, you avoid realizing losses in your portfolio. If you can afford to live off other income during this time, it’s best to avoid selling securities at a loss just to withdraw the money. If you’re at 72 or older, however, you’re forced to take distributions trying to limit your withdrawals to the absolute minimum required. Over time, you can take larger withdrawals after the market recovers to cover up any shortfall you may have. But specifically, we don’t want to take we try to not take more than 4% of our assets out in any given year besides when you turn 72 years old and beyond.

Ford Stokes:
But then when you do, you really should be investing some of your money back in. Yes. You’ve got to pay taxes on your withdrawals from your IRA. That’s why we recommend a lot of Roth ladder conversions. We’ll talk about next week’s show. But I would encourage you do everything you can to not go over 4%. And if you have to, don’t go over five for sure, because if you start taking out ten, 12% a year, if you take out 10% a year, you’re going to run out of money in 12 years. And maybe with us, you might you might last till 14 or 16 years with potentially a higher rate of return, with lower risk, as measured by a lower standard deviation. But there’s no guarantees there. I would just say be very careful about taking out more than four or 5%, but specifically try to stick to that 4% rule and then say, let’s play the inflation demonstration here for everybody.

Producer:
It’s time for an active wealth inflation demonstration.

Ford Stokes:
A recent Fox News poll revealed that 93% of registered voters are extremely concerned about inflation and higher prices, while 52% over half said they have changed their summer travel plans because of gas prices as high inflation persists into the second half of the year, now the highest level in over 40 years, most Americans, ages 45 to 75, are worried about the dual risk of high inflation reducing spending power in retirement, 81% of the focus or a recession driving the economy down and impacting retirement income. That’s 79% of retirees out there. That anxiety is manifesting in real world behavior, as six out of ten consumers, 60% reported reducing their spending because of inflation, inflation over the last 12 months. And the Bureau of Labor Statistics and Sam, I want to want you to jump in here with me. Ground beef is up 9.7%. Pork is up 9%. But this is the one you always talk about. Poultry or chicken is up 17.3%.

Sam Davis:
Yeah, it’s unbelievable. And then right along those lines, eggs kind of hand in hand with poultry up 33%. We’ve only got a minute left and I don’t want to step on our final countdown, but these inflation rates, especially at the grocery store, are hitting all of us every time we go. It’s almost like it’s 40 or $50 a grocery bag when you walk out of there.

Ford Stokes:
It’s unbelievable. All right. Now the final countdown. It’s the final.

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

Ford Stokes:
So on today’s show, we gave you the financial wisdom quote of the week, which is an investment in knowledge, pays the best interest from Benjamin Franklin over 246 years ago. We also played Right or Wrong, which is a really fun segment that we did talking about bank CDs, bonds, how you could make 10% on your on your pension. And if you take a lump sum and also should you pay your house off or not? And we talk through that. We gave you a problem solver talking about how to solve the problem of bonds and also increasing fees with advisory fees with bonds and the bond portion of your portfolio. We also talked about what to expect when you come in for a full retirement consultation. We gave you the cost cutter on travel, but traveling on a budget this year with August 4th, national August 4th, September 24th and November 11th being free days for national park admission. And we gave you the 4% rule in how to restrict the withdrawals so that you can make sure that your money outlives you rather than you outliving your money. And we talked about our inflation demonstration and a whole lot more on this week’s show. Next week show, we’re going to dedicate this show, that show to being tax efficient. We’re going to be more tax efficient with our investments on next week’s show. We hope you come back and listen to us next week. And also, remember, if you’re going to be a bear, be a grizzly, be aggressive about seeking knowledge, your retirement. And the best way to do that is visit active wealth dot com and click that schedule a consultation button with us. And we’re happy to help you with a free financial plan and free portfolio analysis to your 95th birthday. Absolutely no cost to you so you can make an informed financial decision about your retirement future. We’re here to help you protect and grow your hard earned and hard saved wealth. All the best to everybody. Have a great week.

Producer:
Thanks for listening to the Act of Wealth show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Forward Stokes at 770 685 1777 or visit Active Wealth Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor. ACM and Active Wealth Management are independent of each other. Insurance products and services are not offered through BC but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance can not be used as an indicator to determine future results.

Producer:
Not affiliated with the United States government. The agent does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. A merrill life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

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