1.20.23: Audio automatically transcribed by Sonix

1.20.23: 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 Retire 360 with your host, Dwight Mejan. Dwight is a licensed fiduciary and financial advisor who always places your needs first. Dwight works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Dwight Mi. Jan.

Dwight Mejan:
Welcome to Retire 360 show. My name is Dwight. Jan, I am your host, and alongside me is Mitchell Keiser and also Sam Davis, our executive producer. How you guys doing today?

Mitchell Keiser:
Hey, everybody. I'm doing. Doing well. Happy to be here. Good.

Producer:
Thanks for having me on the show.And yet.Yet again.e're going to come on the air and.Bring some important information to the people. So stay tuned. And if you miss part of the show, be sure to check us out.Wherever you listen to podcast, just search.

Dwight Mejan:
Retire 360. You got it. Well, always appreciate having you guys here and being my my sidekick, so to speak. But I also want to acknowledge our audience. I want to thank those of you who are tuning in as regulars, but we also, I know, have some first time listeners listening to our show. So we're glad to have you with us. This is always what we like to say is, is your show. It's not ours. Our goal is always to empower you and help you not just to receive information, but to have that information lead to transformation in your portfolio and in your retirement plan. So that is our goal. And I just want to give you just a couple of quick updates here. We've been talking about some of the live seminars that we do, and we always love to interact with our listeners and we want to let you know of an important date that is coming up on the calendar and that is February 7th. At 6:00, we are going to be live at Cannon Park Community Center, and we're going to be doing one of our most popular seminars, taxes in retirement. And this is a it's always a popular topic for our listeners. We always explain to people that taxes get more complicated in retirement because now is the year where you if you are retired and you're near that magical age of 73 New Age this year for required minimum distributions, money's got to come out of that portfolio and it gets somewhat complicated on the tax return because there's a lot going on there.

Dwight Mejan:
We won't go into that. That's what you can expect to get at our live event. But we would love to have you there. It's at 6:00, so reach out to us. We'd love to hear from you. We do have limited seating capacity, so if you want to come to that, you call us at 9102350812. Our office is in downtown Southern Pines. Or you can go to our website at Retire 360 show. Again, that's Retire 360 show and you can click on a link there and just let us know that you're interested in attending that. Again, those seats do fill up. We do end up having to unfortunately postpone that for many people who call in. So I'll call in early and book your reservation. We would love to see you there. But getting into this week's show, we are going to talk about how to delete fees, taxes and expenses. That's one of the things we're going to get into this year. Talking a lot about fees and taxes again. So love to have you learn a little bit about that. And we're going to talk about that today. So Mitchell is going to start us out with the quote of the week. And Mitchell, why don't you tell the listeners a little bit what's happening with the financial quote this week.

Mitchell Keiser:
All right. So our first quote is coming from Nathan W Morris. He was a financial expert and financial coach. And this is every time you borrow money, you're robbing your future self. Now, that probably is going to hit everybody just a little different. But I know the way I kind of took that for myself is every time you borrow money, if anybody out there is looking to purchase a home or is looking at borrowing any kind of money, the interest rates are way higher than they were two years ago. Because, you know, if you bought a house two years ago, you probably were getting an interest rate in two, 3% or now I know they're pushing seven, 8%. So, yeah, by taking out that loan now, I mean, I think about that, that all that money that we're going to be paying to a bank over time, it really is robbing yourself, your retirement. You have anything to add to that?

Dwight Mejan:
No, I think I think that's a great a great point, Mitchell. You know, borrowing money, you know, the rates are a lot different than they are or than they were the end of last year, of course. And yeah, they're just continue to. You've got to watch the rate, the interest rate that you're paying for. Sure.

Mitchell Keiser:
So. Yep. Then I got one more here for you from the famous Dave Ramsey. A budget is telling your money where to go instead of wondering where it went.

Dwight Mejan:
Dave Ramsey, of course, American personal finance personality and the host of The Dave Ramsey Show. So great advice coming from Dave. And just another message to our listeners here. If you lost more money than you're comfortable with in your portfolio last year and you're looking for answers, we'd love to provide that complimentary free consultation. So you can call us at 9102350812 or visit our website at Retire 360 show. Com to get started on your retirement income plan today. So what we get asked quite a bit Mitchell what it's like to work with us and we just like our listeners to know that we provide a comprehensive consultation and it's at no cost to our listeners. And there's absolutely no obligation. If you had a diagnosis from a doctor and you questioned it, you'd want to get that second opinion. So for a lot of folks that come through our office, they're just looking for that second opinion to make sure they're on the right track. And taxes, as I mentioned at the beginning of the show, that's a big topic right now. Many people are kind of don't know where to go with taxes. It's a very confusing topic for many of our listeners. So we'll help you cut unnecessary costs in your IRA and your 401 K and any other retirement savings account. And we can also help you in the area of Medicare and maximizing your Social Security. That's the.

Mitchell Keiser:
Idea. Absolutely.

Dwight Mejan:
Mitchell You do a lot of work in that for clients here in the office. And I know you can certainly help people get expenses down. And that's something right now, a lot of people got raises in their Social Security checks at 8.7%. But another way to add income into your budget every month is to trim those expenses. So we'd love to help see where we can help you do that.

Mitchell Keiser:
Absolutely. I know I hear a lot of times people will say they'll use the old quote, Why fix what's broken? Or if it's working, don't don't go messing with anything or people will say, well, I can afford it. So I don't I don't mind paying it where I think that's a pretty bad mindset to have just for people with Medicare, because you can get a lot of times you can get the same thing cheaper. You just need to be working with somebody that you trust first and foremost. That's going to give you advice for your best interests. But I just wanted to throw that plug out there. Next, we'll move on to deleting fees from your retirement. So we've deleted these up to 40% on your portfolio with just a couple of these changes if you want to jump into that.

Dwight Mejan:
Yeah, fees are an area that we should be sensitive to, all of us because it does come out of your account. And one of the ways that we look at with people who come to our office to reduce the fees that they're paying is in the area of their bonds and looking at bond replacement strategies, these and bond prices move in the opposite direction of interest rates. So when interest rates rise, bond prices will fall and interest rates fall, bond prices will rise. So there's an inverse relationship between interest rates and bond prices. So when interest rates rise in bond prices fall, there's no guarantee when you'll be able to get your money back. So one of the things that we talk with folks about is to take advantage of this interest rate environment and replace bonds you currently hold in your portfolio and consider fixed indexed annuities. There's an interesting study that came out. I just want to share this with our listeners. There's a financial researcher by the name of Jack Marion, and he looked at a time frame from January 1st, 1960 to January 1st, 2010. It was a 50 year time frame. And what he did is he compared what the S&P 500, how it would have performed in three different scenarios with no dividends, with dividends and with dividends, I'm sorry, without dividends and without any losses. So those were the three scenarios. So the first two scenarios followed the ups and downs of the market.

Dwight Mejan:
The third, however, followed a pattern of an indexed annuity which is not invested in the markets. It doesn't include dividends and credits, interest based on how the market index performs. So the results were were amazing. In the first scenario, with no dividends, a $1,000 investment resulted in an ending balance of $18,650. In the second example, this was with dividends included in the S&P 500. The ending balance was 84000 to 60. But this is where it gets really shocking in the third scenario, with no dividends, but with. Losses. That's key. The first two followed losses up and down. One included dividends, the other didn't. But in this third example, no dividends, no losses. So you protected your gains. The ending balance over that 50 year period, ending balance was $179,624. So more than doubled the second one there with dividends included. So the point there is just the sensitivity to making sure, especially when you get in your retirement years, that you don't have losses and bonds. You know, we just talked about that when interest rates go up, the value of those bonds go down. So with the indexed annuity, you have exposure to the market, you've got equity upside in the market with no risk of losing principal like we had last year, with markets down 20% on the S&P 500. While someone may have not made any gains, but there's a lot of people listening that would have loved to hold on to the money that they lost.

Dwight Mejan:
And that's an opportunity to look at for 40% of that portfolio. And then with that, you're not getting fees build on that 40% of your portfolio. The new 6040 portfolio is 60% stocks and 40% fixed indexed annuities, replacing those bonds. They're an efficient way to generate a lifetime income stream that you will need to cover expenses throughout possibly a 30 year retirement. And that's one of the things that will always look at with folks who take us up on that offer to to get that complimentary review. We're going to look out to age 95 at a minimum, and we're going to stress test your portfolio and we're going to let you know, can your portfolio sustain your lifestyle with the income that you need with the retirement that you envision? So if you'd like to know a little bit more about that. Check us out on the website, Retire 360 show or contact our office at 9102350812. And when you do call in, just remember to if you want to learn a little bit more about the tax structure in your retirement with our seminar taxes in retirement, just let us know that you would like to attend that and we'll call you back and hopefully answer the phone to confirm your attendance at that event. That's going to be on February 7th at 6:00 in Pinehurst. And we're going to talk about how to delete taxes from your retirement.

Producer:
Strangers in the Night Exchanging glances.

Producer:
Wondering in the night what? At 360 Capital Management. We know you've worked hard to earn your money and you've worked even harder to save it. When it comes to wealth management and planning for retirement, Dwight Major is passionate about helping people protect and grow their wealth. Visit Retire 360 Showcase to schedule your free consultation. Today it's a $1,500 value provided at no cost to you. Book yours now at Retire360Show.com.

Dwight Mejan:
All right. Well, we're back here at the Retire 360 show. I'm here with Mitchell and Sam, and my name is Dwight Marjan. I am your host of the Retire 360 show. I want to welcome you back. Just prior to our break there, we were talking about a bond replacement strategy and the alternative asset class that we recommend clients consider, and that is fixed indexed annuities where you get exposure to the equity market but don't have any losses when markets go down. But interesting, I went to the Social Security website just to look at something with my own projected Social Security and something interesting popped up there that I hadn't seen in previous years. And you can go there and probably find this same thing at say, dot gov. And if you haven't created an account there, I encourage you to do that. You can see all your contributions and estimates. There's a heading that says Social Security will be there when you retire and it goes on to say Social Security taxes you pay go into the Social Security trust funds that are used to pay benefits to current beneficiaries. The Social Security Board of Trustees estimates that based on current law, the trust funds will be able to pay benefits in full and on time until 2034. That's the magic year. And then it goes on to say, and I highlight this in 2034, Social Security will still be able to pay about $780 for every 1000 in benefits scheduled.

Dwight Mejan:
And I found that interesting that for the first time that I've seen, Social Security is now telling recipients that, hey, we may not be able to pay your benefit in full. They're letting us know. I think they're putting us all on notice. And this is just Dwight's opinion that what I think is going to start happening is we're going to start seeing means testing for Social Security, meaning they're going to look at other sources of income that come on the tax return. And what that means is if you have a lot of money in pre tax accounts, tax deferred saving and savings instruments like your 401. K and you roll it to a traditional IRA when you have to start pulling that money out of your accounts, especially when you're forced to do that. Now at age 73, four required minimum distributions. You're going to be forced into taking money out based on the formula for the RMD tables. But if you have that money in a Roth account, that money isn't going to hit your tax return as taxable money, and therefore you may be likely to keep more of that Social Security benefit that you were entitled to. But if your income is showing as a higher amount of income, that could be a place where you get cut benefits with your Social Security.

Dwight Mejan:
So if that's something that you're concerned about, certainly should be something we're all concerned about. And you don't work with an advisor that does tax planning. You've got three buckets of money, you've got the tax deferred money you've got taxable, and then you've got tax free money. And the goal when you get to retirement is to start moving more and more of the money into that tax free bucket so that as taxes go up, you're not going to have to be concerned with the IRS involved in your retirement plan. And I know a lot of our listeners would love to disinherit the IRS from their retirement. So it's not that you're going to get away from paying taxes, but over your lifetime, that's what we help people with is coming up with a strategy that diminishes the amount of taxes that you pay and also enables you to receive your full benefits from Social Security. And also, I want to tell you, going back to that fixed indexed annuity solution, there are actually providers right now we know of one that actually is planning in their indexed annuity product that has what's called a plan gap benefit. And what that benefit will do is it grows with the market, with your account, but it grows at a little bit higher level than the actual account value. That bucket of money could be used in the event that your Social Security is cut, that money could be used from that plan gap benefit, which is a feature built into certain indexed annuities, one that we know of and could be used to supplement that Social Security portion of your payment that gets cut.

Dwight Mejan:
So if that's something you'd like to learn a little bit more about, do reach out to us. You can contact our office at 9102350812. Again, that's 9102350812. And just let us know. Hey, you'd like to learn a little bit more about the plan gap feature and you'd also like to learn a little bit more about the tax strategy for your portfolio to really develop what we call a tax map, which is a personalized map that shows you where you're at. That currently on the tax return and a strategy that we will give you complimentary on how you can begin to do conversions to start minimizing some of the taxes that you'll all and making sure that you have the right investments in the right buckets within your portfolio. So but just some other statistics here I want to go through with you. The national debt right now is nearing an astronomical number of $31.5 trillion. And we believe, like many others, that taxes are likely to go up in the future. And with a Roth IRA, you're taxed when you contribute your money. So your money is protected from increased tax rates that are likely going to happen and that are basically out of your control.

Dwight Mejan:
And the government spending continues to increase as years go on. So there's a great website, if you want to check it out. It's got some startling statistics on there called the US debt clock. And you can go to US debt clock dot org and you can actually see the US national debt number and you can actually watch it tick up. It's actually quite a number here. The debt per citizen right now in the United States is just under $95,000. And if we take those of us who are paying taxes still, if you file a tax return and have to pay tax the debt per taxpayer, to put that in perspective, is just slightly under a quarter of $1,000,000 per taxpayer just to pay off the national debt. And I encourage you to go there just to to look at that. We also we have five reasons why you should consider implementing a Roth conversion. And the first one here is number one is tax free growth. And the contributions, of course, to a Roth IRA are made with after tax dollars. So all the future growth in the account is completely tax free and it's also not subject to required minimum distributions. So when you turn 73, that money that's building up in your Roth account, it's not subject to have to come out and pay taxes on it.

Dwight Mejan:
And furthermore, that money when it goes to the next generation is tax free. Many of you listening have children and your kids might still be working at the time that you get your wings and fly out of here. And if they're the beneficiary of your account, that could throw them into an unnecessary tax bracket. So the tax free growth feature, they would love to inherit that money on a tax free basis. So Roth IRA contributions or conversions are the way to go. Tax free withdrawals, qualified withdrawals from an IRA account mentioned that are 100% tax free. The third thing is flexibility. Roth IRAs have more flexibility than traditional IRAs when it comes to withdrawals. So Roth IRAs don't have that required minimum distribution, like I said. And you can leave money in the account as long as you would like. So you're not forced into pulling money out of there. The fourth thing there is, there's no age limit. Traditional IRAs have an age limit for contributions, but there is no age limit for contributions to a Roth IRA account. So that's a great feature. And that might apply to somebody here that's listening. And also, as I mentioned, the tax free inheritance. Just to mention that, again, Roth IRAs can be passed to your heirs without having them worry about paying taxes on that account. So keep keep that in mind as well.

Producer:
Here's the cost cutter of the week.

Dwight Mejan:
And the last thing we want to talk about here as far as deleting expenses from your retirement is the other area we want to talk about. And that's basically the cost cutter that we would have, which is paying off your mortgage and or downsizing from the family home. You know, the happiest people who we meet for their annual reviews are the ones who've paid off their primary mortgage. If you continue to pay a monthly mortgage, it can absorb the entirety of your Social Security income for a married couple. Or it could take up almost an entire single person's monthly Social Security benefit. So I strongly encourage all of my prospects and clients to pay off their mortgages in a smart way. And that said, try to avoid paying off the family home with an IRA account with IRA money because you'll owe taxes on the money that's withdrawn. Remember, you won't pay a 20% real estate commission. You don't want to have to pay 20% in taxes when you pay off the mortgage on your family's primary residence either. So consider using money in investment accounts, withdraw cash possibly from life insurance plan. That may be an option. We come across a lot of folks who come to our office. And in fact, I've got somebody coming in tomorrow with a sizable amount of money. In life insurance and they're still carrying the mortgage.

Dwight Mejan:
So one of the conversations that we're going to have is why they still need the life insurance. I don't particularly see the need for it at this point, but that money in that life insurance policy could use be used to pay off the family residence. So just keep in mind, if you have cash value policies, that might be an alternative place to look. Also in savings accounts, if you have savings, maybe liquidating some collectibles, if you have collectibles or selling a separate piece of real estate to raise the funds to pay off that family home, that may be an option if you own more than one piece of property. The tax burden on the sale of these types of investments is minimal or zero. And housing is among the the biggest cost that retirees face right now. So eliminating your mortgage removes a sizable monthly bill from your retirement expenses. So again, hopefully that's a goal that you have if you still carry that mortgage to get it paid down. But we'd love to help you come up with a strategy for that. If you'd like to talk with us, we can be reached by phone. 9102350812 Or you can go to our website at Retire360Show.com and we'll be back here and take a break and we'll pick it back up with our next topic. When we return.

Producer:
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Producer:
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Dwight Mejan:
All right. Well, we're back. Thanks for taking some of your time today to be with us. We want to bring you relevant information for your money and for your retirement. I am your host, Dwight Meagan. And with me is Mitchell Keiser and Sam Davis, our executive producer. We want to talk a little bit here now on smart retirement planning. And retirement is one of the most important times of our lives. It marks the end of one area and really the beginning of the next. So while retirement can be a time of great joy and relaxation, it can also be a time of great financial strain, especially if you haven't thought much about it. Unfortunately, studies have shown that many Americans are not as prepared for retirement as they would like to be. Factors such as lack of savings, high levels of debt, uncertain Social Security benefits, as we talked about earlier, that can contribute to these feelings of unpreparedness. But additionally, the ongoing effects of COVID 19 pandemic that is greatly impacted the economy and the financial stability of many pre-retirees and retirees. Mitchell I'm going to have you share with our listeners here just some data from Fidelity Investments 2022. They did a state of retirement planning study, and you've got some great interesting facts here to share with our listeners. So why don't you take us through some of those numbers?

Mitchell Keiser:
Yes. So we got a whopping 71%, which is more than two thirds of Americans that are still very concerned about the impact of inflation on their retirement preparedness. Where So that's 71% and only 31% of people or 31% of people do not know how to make sure their retirement savings can even keep up. So you've got about 31% of people not not even sure where to begin, what to do. So that's pretty crazy.

Dwight Mejan:
Yeah, that is that's a that's a big number. Mitchell And we see that a lot that people sometimes it's so daunting, sometimes of where to begin. They don't really have a clue where to go. They feel confused by it. And one of the things that we like to help them do is just develop a plan, you know, is help them to see the big picture and then put it together. It's like a puzzle, but it's not as the hardest part sometimes for people is getting started, isn't it?

Mitchell Keiser:
Yep, absolutely. Got to stay informed and stay educated. Yeah. My next piece of advice is from Angie Chen. She is a research economist at the Center for Retirement Research at Boston College, and she says approximately half of Americans are at risk of not being able to maintain their pre retirement standard of living after they've stopped working. I know just from personal experience, you know, we get people coming in here with their retirement plans and what they think, how they think they're going to live or how they think they're going to maintain their plan. It's just it's not possible. So if you had anything to add to that.

Dwight Mejan:
Yeah. No, I mean, I think people some people don't even know, like the percentage of their salary where they want to be as far as being able to if you have the mortgage paid off, you want to get to roughly this is a rough estimate of about two thirds of your working salary to enjoy that same lifestyle, because assuming that you get to retirement and the mortgage is paid off, the kids are out of the house, some of those expenses fall off. But you want to try to get to that two thirds of that income and many people don't know beyond Social Security, hey, can I generate enough income from this portfolio to get to that two thirds number? And will I when will it run out? And some of that has to do with how aggressive you're invested. I like what Will Rogers said. Will Rogers says, At my age, I'm not so concerned about the rate of return on my money as I am the return of my money. And he's right. You can't be taking too much risk because if you lose a lot of money, it's not going to matter how much you have. You won't be able to have enough income to live off of it. But I would just add that, Mitchell, that people need to be aware of what that retirement income is going to look like and what that number is and how they're going to harvest income from their savings and retirement. And that's one of the basic things that we do for people, is we lay out that income plan and and show them what investments to put their money in so that they've got some smart, safe money and they've got some smart risk money on the table.

Mitchell Keiser:
Right. And I would just also add, if you're wondering when to start, start now, don't wait until you're at a point or wait until you're out of this debt or that debt or until the kids are out of the house. I think one of the biggest things, too, is just making sure that you start early so that way you don't have this huge hole that you're trying to fix in your last 5 to 10 working years.

Dwight Mejan:
So absolutely.

Mitchell Keiser:
A 2020 survey from Charles Schwab. Schwab of currently employed 401 K plan. Participants found that a savings for retirement is the leading source of significant financial stress for all generations. Participants believe that COVID 19 pandemic will impact their retirement savings. And of that, 41% had to make changes to their 401 K because of the pandemic. And about 25% of respondents said that they have consulted a financial advisor about their financial professional. Mitchell or other financial professional.

Dwight Mejan:
I just spoke with a client of ours who she teaches at a university, and she just told me yesterday that someone who is in their final stretch literally getting ready to retire in the next 12 to 18 months because of the losses in their portfolio in 2020, said that they are now going to wait until they earn back the approximate 25% that they lost. And it made me wonder is, is that person getting the right counsel from? Do they have an advisor or are they just making some of those decisions their own as far as how they invested in that 401. K? And that's something that we do with our existing clients is many of them we manage assets for them, but we also guide them with the 401 K plan that they currently fund and make sure that their risk profile, that they're investing in alignment with their tolerance for risk. And that's something that we see quite often. And unfortunately in this down market that we had last year, it is causing more people to rethink when they're able to retire. And there's just a lot of fear built around that. You find the same thing, I think, don't you?

Mitchell Keiser:
Mitchell Yeah, I'll say. I just find it interesting, though. The statistics surrounded around the COVID pandemic, because initially the markets were booming and everything took off. Everybody's portfolio was doing incredible and then right before it did this huge like dip back down. And it's kind of crazy, you know, you think all those people, they just rode the high of how great their portfolio did. And then nobody or not many people from what we've experienced, switched into safer stuff in those periods. But now they're paying for it because it just dipped right back down as quick as it went up. So, I mean, that's it's kind of an importance of what you were talking about a little bit earlier, The rule of 100. I know we use a lot with our clients and your age. So if you're 65 having 65% of your investable assets and something that's principle protected or at least very, very conservative and then only using the other 35% to invest in the stocks, mutual funds, other types of securities strategies. And reason for that is kind of like your client that you said was in here the other day where they lost all that money. Well, they were that close to retirement and they were invested so risky, which is really just a lack of they're understanding, which is in return is a lack of good advice. So I hope people take us up on our our offer to meet with them or just talk to them a little bit more about maybe their situation or how they can better plan for their retirement, how risky their portfolios invested, or how they can just take advantage of taxes in the coming years. And again, our phone number, if you want to reach out to us, is 9102350812 or you can see us at Retire360Show.com.

Dwight Mejan:
Yeah thanks Mitchell Yeah there's there's five pillars I would add to that that we build our practice on aiding our clients and one is developing that income plan. Many people that come into our office who've been investing for 40 years. One of the questions early on that I'll ask them is, you know, Sue or Bob, tell me a little bit about your income plan. And all too often, unfortunately, I get the deer in the headlights look of what do you mean my income plan? And I simply tell them, how are you going to plan to take income out of that portfolio? Which bucket is going to supply the income and how much are you going to withdraw and what's the strategy of how you're going to harvest that money out of there? And they just don't know. No one's talking to them about that. We're going to help people understand in advance. If you're ten years away from income, we can show you income planning that provides some guarantees attached to it where you'll know at a minimum basis. And when I use the word guarantee, we mean guaranteed. We can show you what guaranteed income could look like through certain investment holdings that you could put in the portfolio. And we'll tell you, worst case scenario, what that income plan is. We'll also look at the investment plan to make sure that you have the right holdings, the right positions and assets in the right bucket of money, whether it's in the tax free bucket, whether it's in the tax deferred bucket or whether it's in the taxable bucket, you need to make sure you have the right investment in that right bucket.

Dwight Mejan:
We'll also develop that tax plan. That's the third pillar. That's really the one that we like to build everything around is that tax map. And then we'll look at health care and insurance. That's the area that Mitchell specializes in and he'll run that for you. Look at your life insurance policies if you own them. And then we'll also do an estate and legacy analysis and do a plan for that as well. So we're going to talk just a little bit here about the basics of a smart plan. You might have been listening to us and wondering, you mentioned the word smart plan. What is a smart plan? What does that mean? Well, the first thing is, is creating a budget and you need to tell your money where to go instead of wondering where it went. I think we opened with a Dave Ramsey quote and you need to be in control of your money and labeling it. You need to tell your dollars where they're going instead of your dollars telling you where they need to go. So we calculate your income and we go over all your monthly and yearly expenses, and you're going to likely discover some areas where you can cut back or eliminate some costs entirely. So that's the first item is to create a budget. Mitchell You want to take them through the second item there on the basics of a smart plan. Yep.

Mitchell Keiser:
So second second thing we're going to go over is saving regularly retirement planning, like I said a little earlier, starting as soon as possible to continue after your golden years. So we talked to a lot of time. We talked to people a lot of times that they make X amount per month. And then our second question is second. And third question is how much of that are you using for expenses and how much are you saving? You should still be continuing to save for what sometimes people think, Well, all my income's fixed, I've got my pension, I've got my Social Security. Well, as Dwight mentioned earlier, it is something that is very real that they could adjust the Social Security benefits. So if you have if you are reliant on Social Security, that could go down. Also, in addition to that, who knows what Medicare is going to look like in the years to come? How much you're going to have to pay for that and what the other rising costs of inflation are. So we should always be saving. Never. You're never at a place where you've, quote unquote, arrived. Consider setting up an automatic savings plan to ensure that you're saving consistently. That could be something that you do manually transferring money at your bank per month, or it could be something that you have manually just deducted. I know places like Vanguard, places like TD Ameritrade, we use those. They can have something deducted every month, whatever amount that you would allow just to put that into different accounts just so that way you're not you're not seeing it there and it's not as hard for you to detach from it.

Dwight Mejan:
Yeah, that's a great point, Mitchell, that those that are in the 401 K realm and have been contributing, you don't miss that money when it's out of your check. And if you can just get on that auto deposit out of a checking account perhaps into one of those custodian accounts like you just mentioned. Mitchell you'll start to get excited when you start to see those balances start to rise. We've been talking about debt. That's the third item here of the basics of a smart plan is to avoid debt. Debt can be a huge burden in retirement and can significantly reduce the amount of money that you're able to save, try to pay off any existing debt before you retire. We talked about the mortgage earlier here on the show. Avoid taking on any new debt in retirement. All the thing here is to prioritize your high interest debt By paying off high interest debt. First, you're taking care of the debt that's costing you the most money to carry. The longer you leave your high interest debt sitting, the more money you're going to end up paying in the long run. So the borrower, as the Good Book says, is the slave to the lender. So we are not we are opponents of debt and when possible, we know many people have to have a mortgage. But again, try to get that paid off and have a strategy to do that. Make that extra mortgage payment. If you haven't called your mortgage company, just call and ask them, say, hey, if I pay biweekly, that will trim a lot off your mortgage. They have calculators you can look at or you can call your banker and ask them that if I pay an extra mortgage payment a month or a year, what would what would that do to my final debt balance? So how about the next one there? Mitchell The basics.

Mitchell Keiser:
So the next thing we're going to touch on is investing wisely. Investing can be an effective way to grow your retirement savings, but it's important to understand the risks associated with your investment. Consider consulting with an advisor to help you make informed decisions that help you reach your goals. If you're still working, that could be somebody that you work with. We always recommend to have somebody doesn't have to be us, but somebody else that's giving you other advice. So you're not just getting advice from one person, but it's important when you're investing, especially as you get in closer to your retirement years, that you're not just investing in risky stock. Or things that have the potential to go down, especially if you're going to rely on that money. I know we have some clients that like to play around with the stock market and they like to gamble, so to speak, with it on their own. Like they open up these accounts and they have just what they call their play money. We would never recommend that you do that with something that you're going to potentially rely on. It's important to make sure that you're strategically investing and not just putting it there and hoping for the best.

Dwight Mejan:
Yeah. Great point. And also the next item here is to stay insured. It's very important to have adequate insurance. You hear us talk a lot about that. But in retirement, you've got to have health insurance, You've got to have your Medicare. You got to have some type of secondary coverage. Life insurance and long term care insurance. You know, long term care insurance is probably the most forgotten part of a retirement plan or people just maybe looked at it a long time, years ago. But the industry has come out with some very creative solutions in the area of long term care insurance where you don't have to use, per se, your income to fund premiums, you can actually carve out a piece of your portfolio. We like a product called asset based care, where you're using a part of your portfolio and you can use the pretax portion. This is where it gets really creative, is you can use pretax money to fund and finance long term care needs and long term care. That hits home with me. I have a family member, a mother in law that's in a facility, and the cost of that care, folks, is astronomical. Many of you listening have either had a parent there or someone you know is there. Now, the cost in this geographic area where we live is between nine and ten grand a month in a skilled care facility.

Dwight Mejan:
And I don't care how good of planning you do unless you have millions upon millions saved for retirement, it can wipe out 40 years worth of savings very, very quick. And with the statistics of you know better than one in two, people are going to have a need for long term care, that would be something worth planning for because it is very costly. And we we believe that taking a look at long term care insurance is very important and we can run illustrations for you and show you how you can use a pretax account that you're going to have to start pulling money out of anyway and leverage those dollars to have money sitting when you need it for you or your spouse for long term care. And think about it. Without that, the solution is you're going to be raising money or liquidating money out of the market when the market is down to pay for that care. And that is not the right way to do it. So make sure you have adequate insurance coverage. You might be at risk of financial hardship, hardship if you face an unexpected illness or an injury. Mitchell take the last one here and then we'll take a break.

Mitchell Keiser:
Yep. I always say failing to plan is planning to fail, right? Especially especially with things like your like you just said, like long term care. And I just side note on the long term care, I worked in long term care for about three years and I remember the people that would come through like some of the dementia units and stuff. They weren't people that wasn't like what I think most people would think like, oh, they didn't take care of themselves or Oh, that was to be expected for them. I do this. I remember a lot of the people that came through the facility that I worked at. They were the professors, there were doctors, there were lawyers. I mean, there were, you know, and they were in shape like at one point in time, like good shape, like working out all the time. I mean, it's not something that I think it's it's not a formula. You know, everybody's kind of subject to the cursed aging, so to speak. But anyhow, the last point to touch on here is staying informed. One of the goals of this show is to help educate you on the latest developments of the financial world. Retirement is a consistently changing landscape and it's important to stay up to date with the changing laws, regulations and financial products to help everybody reach their financial goals. Once you've retired, you have arrived at retirement. Congratulations. But unfortunately you haven't arrived at a fixed situation that's going to last you for the rest of your life. Things are changing. They'll always be changing and that's why it's important to stay informed. You can contact us if you have questions or would just like to chat at 9102350812. Or you could reach us at our website which is Retire360Show.com. And we'll be right back after this break.

Producer:
Thanks for listening to Retire 360 with Dwight me Jan if you like what you're hearing. Subscribe to the podcast and leave us a review wherever you listen to podcasts.

Producer:
Do you have a vision for what you want your retirement to look like? I'm Matt McClure with a retirement radio network powered by a life planning for retirement can be overwhelming. A survey from Gobankingrates shows that one third of Americans don't think they know enough about retirement. And they're probably right. So if you fall into that category, how do you know where to begin? Well, you've got to know where you want to go before you start planning how to get there. That's where having a smart vision for your retirement comes in. Whether you want to be a jet setter during your retirement years. Want to take it easy in a quiet cabin in the woods or start a new adventure by opening your own business, you should set that goal and keep it in mind throughout your working years, retirement expert Dean Waguespack said during a recent TEDx talk. I want to challenge all of us to redefine retirement.

Dwight Mejan:
Away from.

Producer:
Depart, remove.

Dwight Mejan:
Withdrawal to a new definition.

Mitchell Keiser:
A blending of.

Dwight Mejan:
Pay, passion and.

Producer:
Purpose. Still, retirement looks different for everyone. Sit down with your spouse and talk about your retirement goals. That will make it easier to determine how fiscally responsible you need to be now and how much income you'll need to make it happen after you retire. That's right, I said. Income. More and more retirees are finding that cash flow is more important than one big nest egg number.

Dwight Mejan:
That's when you want to say, Hey, listen, I want to start thinking about all of this accumulation that I've done through these decades of working. How do I begin to think about turning what I've saved and what I've accumulated into paychecks after I retire?

Producer:
That's Leigh Baker, president of Apex Financial Services, speaking to CNBC. He says annuities are a great option for most retirees to generate an income you can never outlive. That's especially important since life expectancy has grown over the years. So you'll need to plan for a longer period of time than you may think. So do you have a smart vision for your retirement years? That's a key question to consider as you start planning how to get there with the retirement radio network powered by a married life. I'm Matt McClure.

Dwight Mejan:
We are back at your show, the Retire 360 Show. And good to have you. My name is Dwight Midge and I am your host. Alongside of me, my right hand is Mitchell Keiser and our executive producer, Sam Davis. Well, in the time that we have left remaining, we want to talk about vision. I think of the Good Book says that without vision, people perish and it's no different with your retirement is you've got to have a vision for your future of what that's going to look like. Great athletes envision what their sport is going to look like and what they're going to do. Very important to to have a vision for your retirement. What are you doing during your retirement years? Who are you doing it with? Who are you taking care of? What are your goals? How do you plan to fund these final decades of your life? And you know, people today, they are enjoying not just years of retirement. People are looking forward to decades in retirement. And that's the good news. The good news is you hopefully get to spend two, three, maybe even four decades in retirement. The challenge with that is what's going to support your habits and your hobbies, and that's going to be your portfolio. But you've got to have a vision to get there. So if you don't start with a clear vision and a set of goals for your retirement, you could experience a lot of unknowns down the road.

Dwight Mejan:
So just a couple of statistics here for you. 37% of American kids feel like they need more education on retirement planning and 52% of Americans wish they had more education on how to invest. And that is our specialty. That is what we do. That is why we do this show. But we also want to help you win with your retirement money. So we recommend that you sit down with your spouse, with your family, and consider some important factors that will affect your golden years. And here's just a few areas for you. Number one, Social Security. Many seniors assume that Social Security will cover the bulk of their retirement financial needs. Unfortunately, this is not the case. Social Security will generally only cover about one third of your expenses. While people commonly assume that they are stuck with a predetermined benefit, you can increase your payout by delaying when you take this benefit. So one of the strategies that we look at when we develop an income plan is if you want to retire before your full retirement age, let's say for a lot of our listeners perhaps listening, you're somewhere around age 67, maybe some of you will slightly before then because you're getting ready to retire shortly.

Dwight Mejan:
But if you delay that Social Security, that's one of the things that we talk about with the taxes and retirement seminar. And we're going to be doing that in February here, February 7th at the Cannon Park Center in Pinehurst. And we just encourage you, if you want to learn a little bit more about Social Security and about taxation and how it might be to your advantage to delay Social Security, because it really does lower your taxes when you delay that. And we show people how there's a bunch of formulas that we won't get into on the radio show. But we do cover that in detail in our live events, and we'll be doing a lot of those this coming year. But we're bringing you news on the first one coming up. It's going to be at 6:00 in the evening on February 7th. So. If you would like to learn a little bit more about that, you can call our office at 9102350812. Or you can go to our website at Retire 360 show and just hit the complimentary button there for an appointment. But you can just tell us, hey, I'm interested in the live event coming up on February 7th and we will call to confirm your seat for that. But Social Security, you've got to be looking at that and knowing when is the best time to do that.

Dwight Mejan:
My question to you, for those of you listening, is when is the best time for you to take your Social Security? Is it going to be better for you to delay it or is it going to be better for you to take it? Right now, taxes is another topic. A common tax misconception is that your tax rate will be lower once you stop working. You cannot count on your tax rate decreasing. Did you know that from 1960 to 1963, that was when Kennedy President Kennedy was in office. The current 24% tax rate was actually 56%. We cover that in our some of the tax rate history in that live event. But you have to plan for taxes changing during your retirement so that you get to keep more of your hard earned money. So taxes is an area that you have to consider and have a vision for that Medicare. Some retirees assume that Medicare covers everything from hospital stays to regular doctor visits to long term care, basic Medicare plans, cover hospital stays and physician visits. You can also add prescription drug coverage. That's something that we can run here for you. Mitchell does that for a lot of our clients and people who come into our office. But there is no long term care ad for Medicare that's not added on for Medicare.

Dwight Mejan:
There's a small benefit for recovery for that. But as you get older, it's likely that you're going to have more health care needs than when you were younger. Health care costs folks are going up four times the rate of inflation. I was just talking with my wife about that. She said eggs. I think there's some kind of bird flu or something going on right now, but eggs are going up. I think they're five, six bucks for a dozen eggs right now. So it's just crazy how much things are going up. But health care is going up four times the rate of inflation. And then life expectancy is another area. Life expectancy rates in the US have more than doubled over the last 200 years. So that's something we have to look forward to. People are living longer, but with that longer life expectancy becomes becomes a need for determining how are we going to enjoy that lifestyle if we're healthy enough to enjoy it? Where is that income going to come from? So you've got to plan for longer life expectancy and we will run our retirement planning out to at least age 95. For people who want to do a retirement review, it's becoming much more likely that you and your spouse are going to live to 90 or older. We've got advances in medical technology and people are just living longer.

Dwight Mejan:
So if your finances aren't going to last your entire life, you may need to sit down with an advisor and a professional and consider your options. So with that, I just want to encourage everybody, if you would like to meet with us, go to our website at Retire360Show.com or you can call our office at 9102350812. We are located in downtown Southern Pines and I just want to take this last moment to just put a plug in, if you would like to attend that taxes and retirement event, which is happening on February 7th at 6:00. It's in Pinehurst and Park Center. Call our office and let us know that you're interested in attending that we do have limited space available and we would love to meet you in person, especially if you're a listener of the show. We'd love to people face to face and we'd love to hear from you on some topics that you would like us to cover. We've got a lot of great stuff planned for the coming year, but we also love to hear from our listeners on what you would like to hear more about as well, and we'd love to incorporate those topics in Mitchell. Do you have any parting words for our listeners that you'd like to add to the set?

Mitchell Keiser:
Yeah, my parting words would would be just talking about life expectancy, talking about planning. It's important to have that smart plan and that smart vision with your finances. I also just wouldn't just discard insurance if you plan to live 90 and beyond, but you also need to plan if you're going to live less, live less than you anticipated. And if you have a spouse or children or anybody else that's reliant on your income, just making sure that you're insured appropriately is important. So we can check that out as well.

Dwight Mejan:
Awesome. Well, thanks. Well, thank you, listeners, for being with us today. I'm your host, Dwight. And I want to thank Sam Davis, our executive producer, as always, for being with us. And thank you, Mitchell, for being here today as well. And we will see you all again next week. I hope you have a great week. And until then, be wise with your money, save a lot and pay off that debt. We'll see you next week.

Producer:
Thanks for listening to Retire 360. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard earned assets to schedule your free no obligation consultation with Dwight visit Retire360Show.com or pick up the phone and call 9102350812. That's 9102350812. Investment Advisory services offered through Brookstone Capital Management LLC BCM a Registered Investment advisor BCM and 360 Capital 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:
Information provided is not intended as tax or legal advice and should not be relied on As such. You're encouraged to seek tax or legal advice from an independent professional. Dwight Marjan and Door 360 Capital Management are not affiliated with or endorsed by the Social Security Administration or any other government agency. Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity. Contract guarantees are backed by the financial strength and claims paying ability of the issuer. You may already know what you want your retirement to look like, but do you know how to start planning to get there? I'm Matt McClure with the retirement radio Network Powered by AmeriLife.

Producer:
Where am I? I don't know.

Producer:
That's a question you must ask yourself before you start plotting out your retirement planning journey. After all, if you don't know where you are, it's pretty much impossible to get to your destination. Step one is keeping track of money that's coming in and what's going out. Otherwise known as a personal budget, It's an important thing to have. But a Gallup poll from 2016 found only 32% of couples keep a written budget of any kind.

Angie Stephenson:
A lot of people tend to think of budgeting as prediction, estimating what you'll make in future months and how you'll want to spend it. But the most effective budgets work exclusively with present dollars. After all, you can't give orders to soldiers that don't exist, so the size of your army is only how much money you currently have in your bank accounts. And as general, your role is to give every last one of those soldiers a job to do.

Producer:
That from PBS's $0.02. Now, once you have a basic idea of what you're dealing with, reach out to a financial advisor, a professional who can go more in depth. We want you to do a financial checkbook checkup. It's just like getting a checkup at the at the doctor's office. Ford Stokes is founder and president of Active Wealth Management. He says getting a smart inspection of your finances is essential.

Ford Stokes:
You want to review your accounts, you want to look at your IRAs, your four one. Anywhere you hold assets, including cash, you want to check your balances, you want to review rates of return over the last 12 months, three years and five yearsYou want to answer this.

Ford Stokes:
Question, Do you have an income gap or do you have an income surplus? Understanding where you are now will help you plan for the retirement you want, leaving your future in your hands instead of the hands of the market or the IRS? So are you ready to reach out to a financial advisor for a smart inspection of your current situation? That's a key question to consider before you start your retirement journey With a Retirement.Radio Network Powered by AmeriLife I'm Matt McClure.

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