12.2.22: Audio automatically transcribed by Sonix

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

Producer:
Are you interested in protecting your assets from market volatility, rising taxes and economic uncertainty? Then tune into Retirement 360 with Dwight Mejan to learn how you can protect and grow your hard-earned money. Retirement 360 Sundays at 3 p.m. right here on talk 97.3 and 104.1 FM WEEB. Schedule a free no obligation consultation now at Retirement360Show.com.

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 Retirement 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 Mejan.

Dwight Mejan:
Welcome everybody to the Retirement 360 show. My name is Dwight Mejan and I am your host and I'm looking forward to getting started. Geting launched here on radio. I've been in this business for 29 years. I've been helping people, pre-retirees and retirees just kind of find their roadmap for retirement insurance planning. I want to also welcome to the show this morning or this afternoon, I should say, Mitchell Keiser. He is my son-in-law. Mitchell You want to say hey there

Mitchell Keiser:
Hi, guys.

Dwight Mejan:
And I want to also welcome Sam Davis, who's our producer. So you're going to be hearing from both of them. Hey, Sam.

Producer:
Hey, Dwight. Hey, Mitchell. Thanks for having me on the show. I'm excited to bring just such important information to the people up there in North Carolina. I live most of the time here in the Atlanta area, but man, I love visiting the mountains of North Carolina. You're in a beautiful.Part of the country up there.

Dwight Mejan:
Yeah, well, thank you. Well, we have two locations where we have an office in the mountains in Banner Elk, and we also have our main office here in Southern Pines, North Carolina. And I've been encouraged by many of my clients who I know are listening today to we should be we should have a radio show. So we're checking the item off the list today and we have begun. So this is our first radio program and this is the first of many to come. So looking forward to building our audience and getting our name out there. You can come to our website. It's Retirement360Show.com And also want to encourage you throughout the program to check us out there but also feel free to call in our number there is 910 235 0812. Mitchell I want to have you just kind of introduce yourself a minute. Tell me how tell the listeners how you connected with us and when you started working here.

Mitchell Keiser:
Sure. So I've been working with Dwight in our firm for going on three years, maybe a little over three years. I'm originally from Pennsylvania. I went to college in Pittsburgh, studied business after college. I worked in ministry for about three years, and then the last ministry I worked at, I actually met Dwight and my beautiful bride, who is Dwight's daughter.

Dwight Mejan:
I agree with that. I totally agree.

Mitchell Keiser:
And yeah, so Dwight was looking for help around the time I was looking to get back into what I went to college for. And yeah, needless to say, it's been a good fit and a good three years and good one year of marriage.

Dwight Mejan:
Good.

Mitchell Keiser:
So. Well, good. Yeah. Happy to be here. Yeah.

Dwight Mejan:
Looking forward to sharing the show here with with Mitchell and Sam. But just a little quick on my background here. I always tell people I'm from the South, I'm from the south part of Chicago, but moved here shortly after graduating from Purdue University. I met my lovely bride there of 30 years. We've been married. Her name is Dawn. Many of you will have called in and you'll speak with her as well. She handles a lot of the administrative tasks and service work in our office, and we couldn't do it without her. So I appreciate her and she's the best choice I ever made, I can tell you that. So but anyway, we are we are glad that you're here. This podcast is going to air every Sunday afternoon. So I just want to encourage you to, as you listen to the show, to just get our name out there, tell your friends about it. If you're in that red zone stretch, as we say, five years from retirement or five years past retirement, that's a critical area. We'll be talking more about that in our show. But yeah, I've made home here. Other than two years of my time in North Carolina, I spent some time up in actually up in Apex, a little bit of my background. I started in the insurance side of the business.

Dwight Mejan:
I call it the defensive side. We call that Mitchell. We use a football analogy quite a bit. We got offense, which is the Financial planning side, which is really where I specialize today. And Mitchell handles the defensive side of our strategy and that's the insurance piece. And then we always bring on special guests. Sometimes we'll bring on a lawyer or a CPA. We call that your special teams unit. So we'll have some people coming on the show that we can talk a little bit, maybe about some legal things and some tax stuff. But anyway, I just want to a fair question I get asked quite a bit is, Dwight, what differentiates you from all the different financial planning firms that are out there? And I like to say three things is one independent number two, holistic. And number three were fiduciaries. And many of you probably work with an advisor. That's one of those and perhaps two of those three things, but we're all three. And just a brief moment about what those I want to focus on. Those is independent. We have entirely virtually the entire investment universe available for our clients. That's not always true when you work with a broker-dealer firm because the assets that are on that platform are basically there. There's a decision made by somebody higher up in terms of what assets go on that platform to offer to clients.

Dwight Mejan:
So being independent, we can go out and find those assets that are best fit for our client's needs and we're not restricted by that platform. Holistic. We like to tell people this. Our firm is built on three pillars income planning. Number one. Our second pillar is investment planning. The third pillar is tax planning, and the fourth one is health care, and the fifth one is legacy and estate planning. And the reason I say that's holistic and that's important, there's a lot of firms out there and they do a good job at managing a portfolio of assets. We've had people come in here and we see some portfolios that are designed very, very well and we compliment the advisor that's doing that. However, not a lot of advisory firms take a tax strategy approach and taxes as we do a lot of seminars, make sure we have one of those coming up next week, don't we? Yep. We're doing one up in Sanford on taxes and retirement and we like to share with people Taxes get more complex in retirement. It's actually more confusing when you retire because you have different sources of income. People often don't realize that Social Security is subject to taxation based on other forms and other sources of income.

Dwight Mejan:
So at the center of the plans that we build for our clients, we take into consideration their personal tax map. And if you don't work with someone who understands the tax map and building a portfolio strategy around taxes and retirement, that is the place that we begin and everything is built around that. So enough on those pillars. We're going to talk more of those throughout our show. But we just want you to know that that is what we do. And I also want to just direct you to that website, Retirement360Show.com. I believe it's real important that people understand who we are and that you can learn a little bit more about us and our beliefs. You can learn about our mission, our vision and our core values. And we find a lot of times that people struggle in the financial planning part of making decisions because they're not real clear on what their values are in retirement when it comes to their financial plan. So we like to help people understand that. So but with that, again, I want to welcome everybody and we're going to jump right in here to something. Mitchell, I want to engage you a little bit here with the audience. Tell us a little bit. You handle Medicare for the office, correct?

Mitchell Keiser:
Yeah. So I handle the insurance side of what we do, and that includes Medicare.

Dwight Mejan:
Yep. So pretty important date coming up here for folks who are listening who are on Medicare.

Mitchell Keiser:
Oh, yes, a little bit about that. So December 7th ends the annual enrollment season. So we're getting slammed with calls, people asking, you know, what is this? What are my options once I get on Medicare? And, you know, people are getting blasted with calls, scammers, all sorts of things. So we kind of, you know, just speak the truth to people. We don't really have a bias. I guess one thing I just tell people that are listening and that might be getting a lot of calls, not every advantage plan. You hear a lot about that right now. Not every advantage plan is bad. There are some very good ones. The key thing to know if you're going to do that route of insurance is that you need to have somebody that's going to look at the entire plan. All of your medications, all of your doctors are going to ask you all the right questions and make sure you thoroughly understand it. I think the biggest mistake somebody could make is to just pick up the phone and to call a commercial number or to answer somebody that's calling them, trying to sell them just one thing. And we've got softwares. I mean, if somebody has a question, I'd be happy to answer it for you. But we've got software, you know, with Medicare, and we have. Some companies that will kind of shop stuff out for us that will try to match a person with a company. Like I said, we don't really have a bias, but if you want to, those that are listening, if you have any more questions on that, I know we're not going to talk a whole lot about that, but our office number is 910 235 0812.

Dwight Mejan:
Mitchell maybe share one thing. I heard you talking to somebody this week. When I happen to step towards your office, there were some of you were helping on the prescription side and you were telling me a little story about somebody who was paying. I can't remember how much it was a year, but there was a lot of money that they were paying out on drugs. And you actually help them through running that proposal for them. Tell them what happened. What happened?

Mitchell Keiser:
Sure. Yeah. So if you didn't know, if you don't really go to the doctor that much and you know, you have a lot of prescriptions or something, typically the Advantage plans do have a heftier drug plan. The story you were referring to, somebody paying like $700 a year in drugs and the advantage plan actually took them down to zero. They have no more co-pays, no more premiums, anything like that. So for somebody in that situation, it's a no brainer for them to do for them to do an advantage plan. I would have you know, there are some advantage plans that have you know, I help somebody with a $3,000 maximum out of pocket. I mean, that's that's crazy. It's pretty good, especially if somebody got a premium. Usually premiums are more than that per year.

Dwight Mejan:
So. Well, one of the things I love about what you do when your clients come to the office or you meet with people and this is just something. Mitchell, you and I have talked about this a lot as far as the approach that we take with a prospective client or somebody who comes in here and inquires about insurance or whatever their need is, is you take the time because I hear you do it and you've heard me do it. As you teach people the differences between what they have and an alternative plan. And I think a lot of our audience appreciates that about us as well. Take the time. And I've heard you've been told that. I've been told that as we take the time to educate the client about the differences and the benefits of what's sure.

Mitchell Keiser:
And like you just said, there is a lot of times that people ask me questions and say, you know, what is this? I want to better understand it and I explain it all to them. I've spent hours with people and they're like, you know, I'm good where I'm at, and that's fine. And that's like you just said, That's kind of our whole M.O. of our practice, even on the financial side, is just giving somebody that review, looking at all the little details, looking at their taxes, making sure that somebody is in a place that they like and it's working for them and we can't help them, that's fine, you know, but. More often than not, I do feel like we can add value.

Dwight Mejan:
So. Awesome. Well, December 7th, that is the deadline. So if you're one of those that kind of waits until the end, the end is coming near. So give us a call. Pick up the phone. 910 235 0812 or visit Retirement 360 show dot com and you can book a complimentary consultation with us and we'll get back in touch with you.

Producer:
You're listening to Retirement 360. To schedule your free no obligation consultation with Dwight visit Retirement360Show.com.

Producer:
Are you interested in protecting your assets from market volatility, rising taxes and economic uncertainty? Then tune into Retirement 360 with Dwight Mejan To learn how you can protect and grow your hard-earned money. Retirement 360 Sundays at 3 p.m. right here on Talk 97.3 and 104.1 FM WEEB. Schedule a free no obligation consultation now at Retirement 360 show dot com. You're listening to Retirement 360 with Dwight Mejan. Visit Retirement360Show.com

Producer:
All right guys. And I just want to remind all of the listeners that Retirement 360 can be found wherever you listen to podcasts. So if you're listening on WEEB on the radio we're happy that you're with us. And if you have to miss part of the show, we understand and you can go ahead and find Retirement 360 wherever you listen to podcasts. And we're going to be adding the show to as many platforms as possible over the next few weeks so that you'll be easy to find. And remember, you can always visit Retirement 360 show dot com to learn more. And that brings us to the quote of the week. So, Dwight, why don't you read that for us?

Dwight Mejan:
Well, Sam, I want to first of all say not only am I glad the listeners are with us, but I'm glad you're with us, because I'd be very limited in my ability on the technical side of the radio. So I just want to call a big shout out to our buddy Sam Davis here. And thanks for being with us. And thank you, Mitchell.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Dwight Mejan:
But our quote of the week this week comes from none other than Dave Ramsey. You must gain control over your money or the lack of it will forever control you. So what are your thoughts on that quote there, young man, you're young and saving. What are you, 25? 26, 26. All right. So what are you learning about that quote?

Mitchell Keiser:
Good words to live by. If you don't live within your means, I mean, you're you'll be tied to payments the rest of your life.

Dwight Mejan:
You know, my my dad, I always credit how I landed in the financial services industry to my. My late father passed away about ten years ago, but he taught me two of the best things about money that I'll always remember. I remember him sitting down on Saturday mornings and doing his budget, and he said to me, Dwight, he says, If you want to build wealth, two things I'm going to tell you live within your means and save for a rainy day. And I think that's great advice. And I think Dave Ramsey sums it up very well. There, too, is, you know, habits, folks. We all know this Habits form futures and those futures are going to be a good future. It'll be a struggling future. So I was just talking with a client of mine actually yesterday who had to set up a trust. And the main reason she did that was a 50 year old. Some child of hers makes a six figure income and doesn't have any money saved for retirement. So it's it's just tragic, but got to gain control over the money like Dave Ramsey says or it'll forever control you. So but hey, we just want to mention we're going to focus here a little bit on the retirement red zone. You'll hear us refer to that quite often on our show. And what that basically that red zone means is that you plan to retire in the next five years or you've just retired in the last five years and we want to help you if that fits your situation.

Dwight Mejan:
We want to help you strengthen your financial plan. Many of you in this market that we're experiencing this year are seeing your portfolios go down and you're realizing that we've had a good bull run in this market for at least ten years. Other than a couple of little glitches on the radar during COVID, we had a pretty quick rebound. But S&P is down this year about 17%. And many of you are starting to say, hey, wait a minute here, I'm getting ready to retire and I'm in that distribution phase and I'm no longer focusing as much on accumulation. And we just want to speak very personally to all of you as you can't afford to lose too much if that fits your situation right now. And we'll talk more about this as well. But sequence a return risk, that is a big risk that you have to try to avoid, and that is basically defined as the possibility that you run out of money early on in your retirement. Because when you retire, if you if the market's going down, which it is now and you're pulling money out for income purposes, you could run out of money. And we just want to make sure that you have a tax map for your future. And we also want to make sure that you have the right defense in place within your portfolio.

Mitchell Keiser:
So those that fail to plan, plan to fail.

Dwight Mejan:
That's correct. Spoken from the young man to my right over here. So I love it. So we want to hop into some New Year's resolutions that we at Retirement 360 show. We want to help you keep some of these resolutions. I know I'm at the gym along with this young man. We're not at the same gym, but I'm at my gym every morning at 5:00 and I have the faithful other three that are out there. So a big shout out to Mike and Mark and Agnes, if you're listening, we're the faithful ones in there every morning at 5:00. But we we want to help you keep those resolutions, not be like the crowd that signs up for the gym membership. And two weeks later, it's. It's back to sleeping in. Right? So anyway, number one is, we want to help you calculate your net worth. So, Mitchell, you want to speak to that one a second? What is what are we talking about there?

Mitchell Keiser:
Sure. So calculating your net worth. So that's your changes become more obvious before doing that calculation sets your total assets, your liquid assets, your obviously minus any outstanding debts that you'd have mortgages, car payments, things like that.

Dwight Mejan:
So we definitely want to help you get that net worth. You need to understand what you're worth so you can understand what you have to invest and what you have to spend. So like we always say, you want to pay yourself first as well. So the second thing here is we want to help you check up on your retirement accounts. And we want to just remind people that we're at year-end here coming into December and the final month of the year. And if you're 50 or older, just a reminder here that you can contribute an additional 7000 a year or to an IRA. And we're big fans of the Roth IRA account, the Roth. Basically being money that you're taxed on in the year that you contribute those dollars. But those dollars grow tax-free and you pull them out tax-free and retirement when you want to pull it out. So that's that's a huge benefit. And they're not also they're not subject to the required minimum distributions. So that's a significant benefit if you're able to contribute. There are some income limits on there. We'll just encourage you to get a hold of us and we can help you with that. But also if you're self-employed and we have a lot of self-employed folks that are listening to the show right now, you have an even larger opportunity to contribute into a SEP IRA account, much more higher balances that you can contribute there. So if you want to take advantage of some tax savings and you have some cash set aside, we would love to talk with you about a Sep IRA plan. So how about the third one there?

Mitchell Keiser:
Mitchell Update your savings goals. So here's a quote from Warren Buffett. Don't save what is left after spending, but spend what is left after savings. So just setting aside how much you plan to spend each month, better practices would say do your investing first and then have your exponential spending after that.

Dwight Mejan:
Awesome. Good advice from a man we all know. Number four, make a plan to pay off debts. We think this is important for a lot of people here, especially if your, you know, you're young or you're in that middle stretch between your retirement years and working, you're in that middle, middle category. But when you want to pay off any loans, debts, mortgage accounts, consider paying some extra principal toward your mortgage payment each month. By doing so, you're going to earn the risk-free rate or return on money equal to your mortgage interest. And you're going to cut down on the number of years that it'll take to pay off your mortgage. So if you're if you're working towards that mortgage debt, kudos to you. That's that's very important. It's going to help you accelerate some of those savings that you can do before you do hang it up and finally retire. How about the fifth one There?

Mitchell Keiser:
Sure is rebalancing your portfolio. Typically, the way that that would work is that they'll charge you somewhere, say an average fees around five and one half percent for them to basically rebalance your entire portfolio. If you work with a trader that's not a fee efficient strategy. Best practice would probably be to work with a fiduciary or work with somebody that does fee based planning. So you have a management fee that those fees are typically a small fraction of what it costs when you work with somebody that just places trades for you. And a lot of times I'll tell you, we meet with people that don't even know the difference. They don't know. Like I just said, a fee could be five and one half percent or more, and people don't even know that. It usually just comes out internally. So I guess when rebalancing or when reallocating or now that things are starting to go more on the downtick, just knowing what's going on with your money, what fees are coming out, it's always, always.

Dwight Mejan:
Important, you know, on that same topic there, Mitchell, not just the advisory fee, but the expense ratio, which is another fee. That's an internal charge to the funds that you're in within your portfolio. And that's one of the things that we will run when we do an analysis is we help them understand what the expense ratio is. And that expense ratio is a charge for, for example, in your mutual funds, there's fund management costs internally for those funds. And I looked at a portfolio this past week actually that had an expense ratio of 1.18%. And on a for example, on $1,000,000 portfolio, that is over 11,000 being charged just for the fund management costs inside of it. That's not to even mention the advisory fees. So we believe a more in line expense ratio should be somewhere in the neighborhood of a 10th of 1% to maybe no more than about a third of 1% maximum. So that's another opportunity to save on your expenses and your portfolio. You don't even see those folks because it's coming out of the assets before it reflects what's called your net asset value, which is the price of the funds that you're in. Sure.

Mitchell Keiser:
So let me ask you, if those that are listening, if they're like, well, how do I know which of which of those two options is within my portfolio? How do they find that out?

Dwight Mejan:
How do they find out what's the expense ratio is? Yeah, well, the best way to do that is to reach out to us and we can run an analysis of your holdings. It's complimentary. It doesn't cost anything, but we will let you know if you don't know that everyone listening to this should know what their fund expense ratio is, so you can get a hold of us on that and your advisory fee. We find a lot of people that don't know exactly what the fee is for the advisor. Pfizer that they're working with. And we believe that should be fully disclosed up front. And if you don't know what that is, you should call and check with your advisor and say, hey, what is the percentage If I'm paying advisory fees, what is the fee that I'm being charged annually? So, yeah, very good. Well, how about the next one there?

Mitchell Keiser:
Mitchell Sure. So paying down your credit cards? We never, ever recommend credit card debt. So, I mean, you've got good returns in the stock market. You know, you've got good some good CD rates migrates going on right now, but nothing is going to be as high as credit card debt, interest rates. We recommend paying that off as quickly as possible. I guess there's not really any any tips or tricks other than kind of going back that quote with Warren Buffett, making sure that you save before you spend. But if you have any outstanding credit card debts, especially, we recommend paying those off as soon as possible.

Dwight Mejan:
You know, it's interesting on that topic, we see people who have money in cash, a sizable amount that they're not earning any interest on and they're carrying credit card balances. Crazy. It's just it's not a wise thing to do if you want to build a map towards wealth. So if you're sitting on cash and you have credit card debt and we do believe, by the way, that you should have 3 to 6 months of expenses in savings. So it's not to say you empty your cash to pay your credit cards completely, but if you have that 3 to 6 months and then some, you need to be looking to pay those credit cards down for sure.

Mitchell Keiser:
Right. Sometimes you got to do what you've got to do. People get in situations, but to get out of that hole as quickly as you can and those that debt will double pretty quick.

Dwight Mejan:
Yeah, exactly. So the last item that we came up with for the New Year's resolution that we want to help you keep this year is to review your life insurance needs. And I'll ask Mitchell a question on this in a minute. But as you move through your career, your life insurance and your disability needs are going to continue to change. So you need to give some thought as to how much protection you need and consider if you need to invest in different types of insurance. A lot of people are in term insurance and that's the right spot for them to be. And other people might need to consider for a tax saving strategy a product called an IUL, an indexed universal life insurance policy. Those are pretty attractive if you're in your forties or fifties. And these types of policies are one of the ways to generate truly tax-free income. So we'll dive deeper on that topic in a future show. But Mitchell, you want to add anything? I know you do a lot of reviews of insurance. What are you seeing out there these days as you do those types of reviews for clients?

Mitchell Keiser:
Sure. So I think especially with life insurance. Each person has different needs, different financial situations, different plans for their burial. I mean, different types of life insurance is not isn't a fit for everybody. What some people might be a better fit for a whole life. Somebody might be a better fit for term life, universal life. Somebody might not be a fit for any kind of insurance. It really depends on the person, the situation, and their budget. I would say the number one thing we would tell somebody, especially with insurance, is don't become insurance poor. That's kind of a silly way to silly way to spend your retirement pain. I met somebody once. They're paying like $2,000 a month in premiums. I mean, that's that's a lot unless you're making, you know, 50,000 a month.

Dwight Mejan:
That's a lot, Right? Exactly. Well, good advice there. And, hey, the bottom line is get in touch with us. We want to help you build and navigate a financial plan that's fit for you. And when it comes to something as important, as important as your money, we want to provide you or you and your spouse a one-on-one opportunity to meet with us, ask questions about your specific situation, and really just give your money the attention it deserves and it needs in order to grow for your future. So we're going to take a short break and we'll be right back.

Producer:
Helping bring you one step closer to financial freedom. You're listening to Retirement 360.

Producer:
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 Mejan is passionate about helping people protect and grow their wealth while educating them on all their options so they can choose what's right for them. Visit Retirement360Show.com To schedule your free consultation today. It's a 1500 dollars value provided at no cost to you. Book yours now at Retirement360Show.com. You're listening to Retirement 360 with Dwight Mejan. Now back to the show.

Dwight Mejan:
I want to jump right back in here on our next topic, which is what retirees fear the most. Mitchell I heard a saying growing up that do what you fear most and you control fear. That's a little different, though, when it comes to money because you can't go back and get more money. We don't have a Kate robbing banks and doing that kind of stuff to get your fund, your retirement plan. But many people are fearing what retirement looks like for them and they're fearing running out of money. There's a lot going on here. So we're going to we're going to jump into a few of these and talk about them. And I think the first big one that we've been hearing a lot of talk about is Social Security. And we're talking we're hearing a lot of talk about cutbacks. We're hearing about means testing. Mitchell, to explain a minute for what means testing even is if we come to that.

Mitchell Keiser:
Sure. So means testing would be if the government has or the Social Security Administration has the right to look at somebody's full financial situation and if necessary, they fit certain criteria or they're making so much, they can actually reduce your Social Security check by. Is it 30%? Correct. Up to 30%. So a lot of people don't know that. But I guess I'll ask you, what can somebody do about that to prevent that? Or are they just doomed if something like that happens?

Dwight Mejan:
Many of you that are listening that haven't yet started Social Security, many of you are listening to this going, hey, I'm planning to start in March of next year or whatever the time frame is coming around the corner. And that might be the right choice for you, but it might not. We advise people to consult with a professional and look at the big picture. It's really important that you understand what other buckets of money you have to draw from. And when we do a lot of our workshops, we actually show a couple of slides about a person who delays Social Security with a certain sized portfolio versus one who takes it even at their full retirement age. But Social Security, you know, there's a raise of 8% each year past your full retirement age. I don't know too many places right now in the market where you can get a guaranteed 8% increase boost on your income. But again, we don't like to make a blanket statement to everybody. Everybody's situation is unique. Some people are looking at health situations. Some people just absolutely don't like what they're doing anymore. They want to get out and they need that income. We don't subscribe to a one size fits all approach at all through Social Security.

Mitchell Keiser:
Sure. But with that, I guess your best bet in retirement. Don't put all your eggs in one basket, correct?

Dwight Mejan:
100%.

Mitchell Keiser:
So don't just rely on Social Security.

Dwight Mejan:
That's correct. And just a little fact in 1940, little fact for you here, there were 40 workers per retiree, and today there's only three workers per retiree. It's just an astounding difference. This ratio is expected to actually drop to 2 to 1 by the year 2050. And one of the reasons for that is longevity. People are living longer and the family size is shrinking. And families. The days of my parents are from a family of nine and a family of 11. Not too many family sizes today that size. It's much smaller than that. So we have a smaller tax base. The tax base is shrinking and we're caring for an aging population.

Mitchell Keiser:
So I think they say, isn't it like 12,500 people a day are turning 65?

Dwight Mejan:
Yep, exactly like that.

Mitchell Keiser:
That baby boomer generation is just.

Dwight Mejan:
Well, it's interesting what's coming out there by design right now in the product space in terms of innovation. That's one of the cool things that I'm seeing right now. Having been in this industry for 29 years, is the products that are being created to address these concerns. They're very cutting edge. We came across a product here in the last four months or so ago that has something called plan gap coverage built into the product. And what that basically is in a nutshell is if your Social Security check personally is is in jeopardy of being cut, let's say they do means test it and you have other pension income and you just you're going to take a cut in your Social Security if that should happen. This product solution says that if you're if you're cut 3%, once that 3% or more cut happens, you have an opportunity built into that investment selection that you made to choose this particular product. You will get payments over a 12 year period paid out to you of the of the not only the gap of what you lost, but on certain increased factors that happen within this product. So really cool design out there and just cutting edge so if that's something that you're concerned about happening. Give us a call, Look at it and we'll give you a little look at that. But what's the next one there? Mitchell We got.

Mitchell Keiser:
Yeah. So tax increases, I don't think it's a secret to anybody. I guess we don't know this for certain, but I don't. Think anybody disagree with me that taxes are probably going up? Historically, tax rates are they're lower than they used to be. But with our national debt and our government spending all sorts of money, I don't think anybody foresees taxes going down in the near future. So.

Dwight Mejan:
Correct. Yeah. There's a we put some slides up in some of the workshops we talk about and we ask for audience participation. And if you're driving. Keep your hands on the wheel. You don't have to raise your hand on this one, but you can give us a neck up if you're in agreement with this. If we ask people, Do you think taxes are going up, raise your hand. When we do that in a room, what percentage of the room raises their hand?

Mitchell Keiser:
Everybody. Everybody, Anybody that.

Dwight Mejan:
Can everybody that can raises their hand. So if you're driving in your car and you're not and you're like most people that we pull on that question, taxes are going up. And yet when we ask people, what's the tax plan that you have in place within your portfolio to mitigate the taxes that you pay, raise your hand. Very few people have a tax plan and we're not CPAs. We don't claim to do that. We're not tax advisors, but we do use tax mapping in how we build portfolios for our clients and we work with their tax professional in the construction of that portfolio. And that's one of the things that's important to take into account what those taxes are.

Mitchell Keiser:
Right? And you can do that once you're retired, but it's better to probably better, if you can, to do that before you're retired so you have a better plan in place.

Dwight Mejan:
Hey, one of the best books ever written says, Render to Caesar what Caesar's. And I believe in doing that. You've got to pay your way. But we find out that way. Too many people are leaving Caesar a tip, and you're partnering, many of you, with the IRS in retirement. And that's just tragic. And we don't want to see you overpaying taxes in retiremenatt. A lot of people exclude the tax plan in the retirement piece, and we don't do that 360 Capital Management. That is central to how we build out the portfolio is looking at it from a tax perspective, because if we know taxes are going up and we're agreeing that taxes are going up, then we need to make sure that our portfolio and the different types of accounts we have, some people have Roth money, some have tax deferred money, some have taxable accounts. The investments you hold in each of those accounts, it's imperative that we make sure that the asset structure that you have is in the proper investments within those accounts, because otherwise you could be just needlessly paying taxes that you don't need to be paying. So we want to take a look at that.

Dwight Mejan:
So the third thing that retirees fear most is inflation, and that's cost of living. Adjustments reflect a 14.6 inflation over the past two years. And this is probably the biggest area right now that we are seeing big concerns in and really should be a concern to everybody, all of us is inflation right now. And if you have money, for example, sitting in the bank, you basically, as we like to say, you're in the safest place to lose money right now, because if you're making, let's say one, maybe 2%, if you're fortunate on a money market account, we have inflation that's running about eight and one half percent. Last figure I looked at that is eating away at a lot of people's retirement accounts. And especially if you're in the market and you see assets going down, it's working the wrong direction. So inflation is that scary beast that's rearing its head right now and it's affecting a lot of retirements. So we want to help you address that and make sure that you have inflation-adjusted portfolio as best as it can be designed. So how about the next one there?

Mitchell Keiser:
Sure. So portfolio balances going down too quickly. So that's your sequence of return risk. So basically we're talking about the retirement red zone that you mentioned earlier, preserving your assets, kind of keeping your we kind of mentioned keeping your eggs in different baskets. So you've got some people that have their money in the stock market. We recommend not having all your money in the stock market, especially if you're retired. If you're 20 years old, you might be able to afford to have all your money in the stock market. You've got 40, 50 years to recover from any kind of loss we could be experiencing now. But what I'll ask you, what's what percent do you think people should have in the stock market versus what percent in either safer or principal-protected type accounts?

Dwight Mejan:
Sure, Mitchell. What we like to see people do and we follow an age rule, it's kind of a primary rule that we like for people to understand. And that is this If you are 70 years old, approximately that same percentage, 70% of your assets should be in principle protected instruments, not aggressive, not heavy in the market, 30%. Of that money. If you subtract 100 from your age, that's the percentage that you could have strategically in the market where you're responsibly trying to grow that money. We talk a lot about responsible growth here at 360 Capital, and that's using what's called some smart, safe money that's tactically managed and then having some money that's in the market, but responsibly invested to where you're not taking too much risk. So just follow that age rule. On the other side, like you said, Mitchell, somebody like Mitchell, who's 25, he could have about 20 to 25% of his money should be in principle protected accounts. But the bulk of his money, 80%, roughly 75 to 80. He should be taking some aggressive positions in the market because he's got time to recover from those losses. But if you're nearing retirement, you don't have that kind of luxury and that kind of time. So you need to make sure you're taking more calculated risk and protecting that principle. The next thing that retirees fear most, as far as our list goes here, is market crashes. And you may want to consider reducing the risk, as we've been talking about on your current portfolio. But here's a little did you know that in 2000 to 2002, the market we're going to reference here, the S&P 500, it saw three straight years of declines.

Dwight Mejan:
So in 2000, the S&P went down 9.1%. It followed that same 2001 was down 11.9%. In 2000, two was down 22.1%. So these are this you hear us talking a little bit today about sequence or return risk. This is what's dangerous is when you retire and you're aggressive and you're heavy in the market and you're not investing in principal protection for your portfolio, if you have three bad years in a row like that and you're taking out money because you either have to. And what's one of the reasons? Mitchell Someone would have to take money out of their portfolio? Rmds So if you're 72 or older and you're forced into taking money out due to required minimum distributions, you can't avoid that because it's the biggest penalty in the in the tax code, 50% of what you are supposed to take out. If you don't take it, it's huge. But that can start to cannibalize your principal and you can run out of money very quick. We show that to people on some slides and they're astonished to see that sometimes half their portfolio can be wiped out in three years, and especially if they're pulling money out. So definitely want to help you avoid those big market crashes with the big losses that go with it. So number six, Mitchell, you're in this area in our practice. I want you to speak to the sixth one.

Mitchell Keiser:
Yeah. So health care expenses. So that's your medications, your potential long term care. That's your health care. It says a couple retiring in 2022 may need to spend upwards of 315,000 on health care in their retirement. So what does that mean? What does that look like? That's a huge number. So that's talking about your monthly premiums, like I said, your drugs. And I think it's one and one and two. It used to be one in three. I think it's like one in two people statistically may end up in some type of long term care assisted living, at least for a short period of time. But that could quickly eat up a portfolio if you're not properly planned for it. If you don't have something set aside for long term care that what if fund or how do you even if somebody has a larger portfolio, how do you protect that from a nursing home? What are strategies to do that? So yeah, I would say depending on somebody's income, it's also important to know what kind of things that they have because somebody that doesn't have a huge portfolio or somebody that doesn't have a huge income, they may not need to spend money on.

Mitchell Keiser:
Asset based, long term care or things like that. So again, just good to know what you have and to make sure you have somebody that's helping you out that that doesn't have a have an angle.

Dwight Mejan:
Great, great point. Mitchell And health care. I read this an article this past week. Health care is the largest expense that retirees are going to face in their retirement. It is the single biggest expense and is rising at a rate of four times the rate of inflation. So it's huge. And the last one kind of ties in with that is having to care for a loved one. And whether that's done in a person's home or whether it's done in a facility somewhere, I know I have a family member. It's actually my wife's mother who is locally at a facility and she is being cared for there. But it's very, very costly. She ended up spending down and went to on Medicaid. But the cost of the care there, we see the bill every month. It's about 90 $200. So I always tell people, if you want to know how long your nest egg would last, that those expenses, imagine all of your assets, if you will, inside of an hourglass and turn that hourglass upside down. And just imagine it being drained at around 9000 a month.

Mitchell Keiser:
I'll even. I'll even top that. So I used to work in long-term care administration and I remember people that came in for physical therapy, so which is pretty common. An older person, if they go into a facility for physical therapy, they receive nursing care as well. Private room, not uncommon. That was about 16,000 a month.

Dwight Mejan:
Wow.

Mitchell Keiser:
So, I mean, if you don't plan for that, think about how quickly that could diminish years and years and years of savings or your legacy that you were going to leave your kids. That's an.

Dwight Mejan:
Adjustment. And hey, on that note, I just want to say a special thank you to those of you listening that are in the healthcare field. We've weathered a very, very difficult time in this country, and I'm hoping we're out of this COVID mess. That certainly seems to come down a little bit. But those of you that were brave to show up for duty every day and take care of those people that depend on you for care, we just want to tell you at 360 Capital Management, as a person who has a loved one in a caregiving situation, a sincere and warm thank you to you and God bless you for the work that you do. So with that, we're going to take another break and we'll be back to finish up.

Producer:
Are you concerned about retirement in today's economy? Find your financial solution on Retirement 360 with Dwight Mejan Sundays at 3 p.m. on talk 97.3 FM 104.1 FM and 990 AM WEEB

Dwight Mejan:
All right. Well, welcome back, everyone. Thank you for taking part of your afternoon to to listen to us. We wouldn't have a show if it wasn't for you. My, my, my wife might tell you I'd sit in a room and talk to myself, but it's much, much better having an audience. So welcome back. Mitchell, good to have you back. And Sam, thanks for being with us and and guiding us here. So we're going to jump into this week's cost-cutter segment.

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

Dwight Mejan:
We find Mitchell and I and the people that come to our office, that the happiest people that we meet with us for their reviews or people who come in or people that have paid off their home. So I know on David Ramsey, we mentioned his quote for the for the week. We mentioned him earlier, but they have their debt scream. I think we might have to come up with something maybe our own version of being debt free. We can't do the debt free screen, but maybe we can do. I don't know. What do you think all you got? I'm just talking off the cuff here. We've got to have something that we have for the debt free. The mortgage that's paid off, right?

Mitchell Keiser:
Yeah, I agree. I mean, I don't think many people like to enter into retirement with having more debts over their head. Typically, that's when people like to have as little payments as possible, save for that rainy day.

Dwight Mejan:
Yeah, but, you know, with a husband and wife and we see this quite a bit, there's different reasons people in retirement carry a mortgage, some by necessity. Other people just haven't really looked at the idea of paying that off or where the money would come from. But for a married couple, you know, easily one of those Social Security checks could be going towards paying that mortgage. And certainly huge opportunity there if that mortgage can get paid off to do some creative things with investing that those dollars. And, you know, especially right now, I know a lot of people took advantage. Hopefully you did when rates were down and refired, but now we're seeing rates creep back up. I have seen have you seen what the 30 year mortgage is up to now? The last I saw, it was over six and one half percent.

Mitchell Keiser:
We're going to say we speaking with a loan officer. And he said there could be up to 8% starting the beginning of next year. So it's crazy.

Dwight Mejan:
Yeah. Wow. Well, just remember, we strongly encourage our prospective clients and clients to pay off those mortgages in a smart way. That said, you know, try to avoid paying off the family home with your IRA money because you will owe taxes on that money that's withdrawn. And Sam, just put up here, I saw 7.5% is that 30 year fixed rate right now. So big difference from what it was a year ago. I know clients and people that were secure in two and one half, 2.4. I think I heard the lowest. But certainly money's when it's cheap like that. Not as big a concern. But today, again, it's just there's freedom in that of just being released from having that kind of debt. But just be careful with the money that you would pull out. Give us a call, Go to our website if you have money and you're wondering, hey, should I be paying this off or should I leave it invested? We'll be happy to give you our opinion on that. So go to our website Retirement 360 show dot com or you can give us a call here at the office 910 235 0812. All calls are meetings are complimentary. We'd love to meet you and we'd love to understand your concerns and where we can guide you and point you in the right direction. Remember this You wouldn't pay a real estate commission of 20%, would you? So you don't want to have to pay 20% in taxes when you pay off your mortgage on your family's primary residence. So just be careful where that money comes from. Anything else you want to say on that topic or we're going to finish out here with, I think, our last topic today, which is a bond replacement. Anything else you want to add to the mortgage side?

Mitchell Keiser:
No, I would just repeat what you said kind of with having that mortgage with the low interest rate, which may not be as big of a deal, but especially people that are married, you know, once I mean, it's not a secret. Nobody makes it out of life alive off the earth anyhow. But once you lose that second Social Security, that second income, typically that's a lifestyle adjustment and you don't want to have a lifestyle adjustment that's going to potentially make you move or sell your house or do something like that. I mean, that could a loss is hard enough, let alone having to worry about something like that. So I would just reiterate that.

Dwight Mejan:
Absolutely. Yeah. Eliminating that mortgage removes the most sizable bill for most, most people from their retirement expenses. So just just be aware of that. And if you want to analysis on that and you're just wondering, hey, should I be doing this based on how much I have left? We'll look at your mortgage rate. We'll look at your portfolio and we'll give you some ideas if there are some that we can give you. And I'm sure there will be if you have assets of what you might do and where you might best pull that money from. And also, I would. Direct you to the tax map that we do. Very important. We will run a tax map for you. Complementary. And we will basically map out some suggestions for you, not only for this year as we bring it to a close, but also for 2023 of some things that you might want to consider doing different, particularly if you're harvesting money out of your portfolio. Maybe there's a better way to do that and lower the taxes that you are paying, not just the mortgage and paying that off. Last topic here. We want to talk in the last segment here a little bit about stopping the bleeding on your bonds. And this is on record, 2022 is the worst year in the history of bonds. And we have been talking to all of our clients about bond replacement strategies.

Dwight Mejan:
And one of those in Mitchell, you're familiar with these. I know you work with these with our clients as well, is we talk about bond replacements using fixed indexed annuities for a portion of that portfolio, and there's many benefits of fixed indexed annuities. And one of them includes this is the most significant is a 100% principal protection, meaning you can never do worse than 0%. So we talked about that earlier. As far as investing according to your age, using that age rule. A lot of our clients who are saying 65, part of that 65% of the money, not all of it, but a percentage of that, we recommend them looking at fixed indexed annuities. And there are some short term products out there right now. People think, you know, annuity is a bad word. We don't shy away from annuities. We use them strategically within portfolios. But there are some short term products out there that are in the five year realm where you can index your growth, which is linking your growth to what the market is doing. So if the market goes up, you can capture a percentage of that growth in protection for the downside. So that's a great benefit. Mitchell What's another benefit to the fixed indexed annuity for people listening?

Mitchell Keiser:
Yeah, another benefit. You know, you can still access your money that's in the fixed-indexed annuities. So most of those that we deal with offer nursing home protection. So I mean, you have to get past that five-year lookback. But once you're past that, I mean, you can actually shield your money if used correctly. You can shield your money from potentially losing that to a nursing home.

Dwight Mejan:
Also, you can get some of these products that don't have any fees. We're very cautious. And our office with variable products, particularly variable annuities, because we see a lot of those that can at times get very excessive and fees. So we're sensitive to that for our clients. But there are indexed products where you can get with no fees in the product at all. So that's a that's a huge benefit because when the market's not growing, you're not paying anything out in terms of a fee.

Mitchell Keiser:
I don't know how familiar our audience is with annuities, but I'd say kind of like I was saying, with insurance or even with securities products, it's important to know what you have because there's three different types of annuities. You've got your fixed annuities. That's a like a fixed rate for a certain length of time. You've got indexed annuities. That's what we're talking about. You've got variable annuities. We've had people come in and they say, Oh, those annuities, they're terrible. I've lost 30% of my portfolio. That would be a variable annuity because what we're talking about, you can't lose your money. Variable annuities, our practice, I mean, we don't we don't really deal with those. That's just not if somebody wants to take risk with their portfolio, we don't recommend variable annuities. That's just not saying that people are crooks that put people in them. But that's just not what we do as a standard practice. There are some fixed rates. We've had people come in with horrible fixed rates. They've earned not even 2%. They're locked into these things for I've seen contracts up to 16 years that people are locked into these to these low interest bearing accounts. We've seen people with indexed products that their cap is like 90, even 3%. So that means you can't even earn more than 3%. I think somebody that's listening could oh, my friend Sam said that he's not earned any money and his or you know, my friend Sally, she's losing money in hers. I mean, that's we're not talking about any of that stuff. We're not talking about caps, We're not talking about fees. We're not talking about losing your principal. We're talking about fixed indexed annuities and utilize right. And utilize what the right company can be pretty beneficial. And we've seen it. We've seen a lot of success with those.

Dwight Mejan:
When you bring up another point, Mitchell, I heard you say with the market being down where it's at, it might be the ideal time if you're on the sidelines with cash or you're in an investment you want to get out of to consider transferring some of that money to a fixed index annuity because your gain is calculated at the point you enter into the index, right? So you're not actually investing money in the market. You're linking those gains to what the market is doing. And with the market being beat down pretty good right now, it could be ideal time to get in and take advantage of the uptick when that happens. So and not have the risk if it goes down. Further of losing more money. So we'll take a look at that. The other last thing I just want to mention briefly is if you're considering another place for bonds, Bonds, the feds are looking to raise rates two more times this year. And when that happens, the bonds in your portfolio will go down. As interest rates rise, the bond portfolio values will drop. So not a great place to be sitting and knowing that that's going to happen. So anything else, Mitchell, as we wrap it up that you want to close on?

Mitchell Keiser:
Yeah, I would just say for our conservative investors, you've got lots of options. You don't just have to be in the stock market. You don't just have to be, you know, doing what you've always done. I mean, it's always good to just have a review, have somebody else look at it, have somebody in your benefit, your favor. Just give you a different perspective.

Dwight Mejan:
Hey, we're out of time here today. But I wanted to just thank everybody for being with us today and bearing with us on our first show, but the first of many to come. We're glad that you tuned in and we hope you'll find us in this same space, which you will this time next week. So thanks for being with us. I want to thank Sam for being with us today here and guiding us and taking care of our production. Thanks to Mitchell for being here and thank you for all of you. And as we like to tell everybody, don't keep us a secret, pass us around and we'll look forward to providing you with more great information in weeks to come. Have a great afternoon, everybody.

Producer:
Thanks for listening to Retirement 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 Retirement360Show.com Or pick up the phone and call 910 235 0812.

Producer:
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 offer through BCC, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including 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. Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries. For all of our investment management clients, we have an obligation to act in the best interests of our clients and to make full disclosures of any conflicts of interest, if any exist. Refer to our firm brochure the ADV two A page four for additional information, any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims-paying ability of the issuing company and are not offered by BWA.

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