How to Keep Your Retirement Savings Protected from Volatility

4.21.23: Audio automatically transcribed by Sonix

4.21.23: 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, hey, good afternoon. Let's start the show. Here's Dwight me Mejan 360 show.

Dwight Mejan:
Thank you for being with us and sharing part of your afternoon to be with us. My name is Dwight Mejan. I am your host and alongside me is Mitchell Keiser and Sam Davis, our executive producer. But we're glad to jump in here this afternoon with you and talk about the things that impact you, impact your retirement, impact your income. And we want to make this show relevant. So we're going to jump right in here. But want to introduce myself. I just want to shout out to our local listeners that are in the surrounding Moore County area. We are expanding. We'll talk about that here in the next couple of weeks and some other areas here within North Carolina. So we are excited about that. Also, just want to share our website with you. We are retired 360. Show.com if there's anything that we talk about on today's show, you can go there, you can click a link and you can reach us there or you can go to (910) 235-0812. Contact us here at our downtown Southern Pines office. But hey, we're glad you're here. If you're a new listener to the show and you want to catch up a little bit to where we've been and the topics that we discuss, Anywhere that you download podcasts, you can go to Retire 360, find some of our previous shows there.

Dwight Mejan:
We also have a YouTube channel, so you can check that out. It's Retire 360 and you can check us out there as well. Don't hesitate reaching out to us. We love reading our listeners messages and hearing what you have to say. That's a lot of what shapes this show and a lot of how we design topics that we'll talk about. But get in touch with us. We have a free report on the banking crisis that's gone on here in the recent month or so. What you need to know, how you can protect your hard earned money from the volatility that's infecting the banking sector. We have a little update on that here today as well. This free report is yours today when you schedule a consultation. So today's show, we're going to talk about growing your retirement savings in volatile times. We're going to discuss some strategies to make the most with your hard earned money. Just a little overview, briefly. We're going to get to the quote of the week here with Mitchell. We're going to talk about banking market update, the latest on the volatility in that banking sector.

Dwight Mejan:
We're going to then talk about why retirees love 100% reserve requirement. Talking about smart, safe planning. We talk about smart risk planning on this show, but we also talk about smart, safe planning, whether you're, you know, early in your retirement and looking for safe places to put money or you're deep into retirement and need to be taking less risk. We're going to talk about some of those factors. Also going to talk about beating bank CDs, some better options for protecting your hard earned money. And then we have a segment we're going to get into the the Lost decade, What we can learn from a recent period in our nation's history, more specifically in the financial sector. We'll talk a little bit about that lost decade. And then Mitchell's going to talk a little bit about some health care expenses and some things that you need to be prepared for in that arena. I didn't finish last week. We didn't get into how you can retire and some things you can do when you have less than 750,000. So we're going to pick that up as soon as Mitchell gets done. Updating us on this week's Quote of the week. But Mitchell, how does how's your week been doing?

Mitchell Keiser:
Hey, Dwight, it's been pretty good. Always good to experience a new zip code. I know. You know, But for our listeners, I was able to we were able to go to Vermont this past weekend, which I don't know if you guys have ever been to the New England states, but highly recommend. It's gorgeous up there. And that's that was my first. Was that your first time to.

Dwight Mejan:
It was that was my first time up there and we caught some unseasonably warm weather but we'll take it didn't we. Shorts and t shirt weather. Oh oh.

Mitchell Keiser:
Yeah. We we went up there and it was I think it was usually in the 50s and rainy, but it was like 75 and sunny. It was, it was an awesome weekend but yeah, thanks for asking. Yeah it was so the, the quote of the week this week we're getting back on the Warren Buffett train and he says risk comes from not knowing what you're doing. So risk comes from not knowing what you are doing. We say at the heart of everything we do and at the heart of everything a good financial advisor would do is being an educator. You need to work with somebody. Not saying it has to be us, but you need to work with somebody that's educating you constantly, teaching you. I can't speak for everybody else. I can speak for us and I could tell our listeners that we do belong to the nonprofit. It's a 400 and 13B, it's called Coffee, which stands for Council of Financial Educators. Because at the heart of what we do, we like to educate. So make sure that you guys are understanding what you're doing. Make sure you understand your financial situation, where you're at, where you're going, and how your insurance needs play a component in that. Everybody always asks us, you know, Am I too old now that I need life insurance? Do you does this make sense for my situation? Should I get rid of this? Make sure you have somebody that's educating you on all that stuff because it is important.

Dwight Mejan:
Well, and the other thing with that, too, Mitchell, is, you know, we see a lot of times when people come in and want us to do a complimentary analysis, we talk with them about their goals and their their future. You know, we get a lot of folks that have been doing it on their own and been doing a great job, you know, self-directing assets. But, you know, we see a lot of things that sometimes can be improved upon. We see a lot of buckets of money that sometimes end up holding a lot of the same assets. We call that a portfolio that's highly correlated with assets, and that can be good when markets are performing the right direction. But when they're going down or they're losing that momentum, if it's too highly correlated of a portfolio, it tends to drop rather precipitously as well. So you got to know what you're doing and sometimes people know what they're doing. They just don't know or realize that they have a lot of the same assets there. So that's just one other point to mention. And, you know, hey, that's one of the things that we do here. We'd love to run a portfolio comparison and show you what we would be using based on your tolerance for risk. So reach out to us at the show at Retire360Show.com and we'll be happy to meet with you and run that analysis as well.

Dwight Mejan:
But we're going to jump in here. I didn't get to at the end of last week's show. We ran out of time. How to retire today on less than 750,000 of investable assets. So I just want to talk just for a brief segment here about that. You know, no matter how much money you have, the money you do have, it's important to you. And that means it's important to us. And if your savings have fallen short of your vision for retirement, we need to come up with a plan that will protect what you do have saved while still providing you with paychecks to fund your expenses and give you what we call those paychecks to enjoy your lifestyle and retirement. So first thing here is if you're in your 30s, your 40s or your 50s and you're a listener of this show, or perhaps you're tuning in for the first time, you should consider after you've invested in your current retirement plan. We always want our listeners, if you're working for an employer and they sponsor a retirement plan, our advice to you is definitely participate in that plan. But we always say to do it up to the match. So if your employer, for example, matches 6% of your salary, we'd recommend funding your retirement up to that same level, but then invest outside of that in your own Roth account.

Dwight Mejan:
If you're able to fund a Roth based on household income maximums fund that Roth fund that traditional IRA, but get that money because we we say it's free, but you've earned it. Your employer is matching a certain percentage of that. You're going to have more options outside of that employer plan where you might be able to find some better funds. That's one of the things that we do here. We have clients who they have their own retirement account, but they have funds with us that they fund separately. And we like to show people funds that might have better track records. And that's one of the reasons we recommend just fund up to that maximum. But if you've done both of those, you're maximizing your the full amount that you can contribute to a traditional or Roth accounts. Then especially if you're younger, 30s, 40s or 50s, you should consider a product like an indexed universal life. You know, we talk a lot about what products are tax free and it's a Roth account and it's life insurance. Those are the only two instruments that in retirement you could pull money out of and have tax free income. So we recommend our listeners to to look at that. And you could do it if you're in your 60s as well. But those are good areas to fund and we can run illustrations for you here to do that.

Dwight Mejan:
But that that tax free income in retirement is huge that we talk a lot about that on this show. But also that death benefit is important as well. Many of you at that age are carrying life insurance and you should be carrying it. But having that death benefit built inside of that same savings plan is a great opportunity for you to explore as well. The next thing we want to have you just look at and consider is start implementing a Roth conversion to delete future taxes, a big topic that we discuss on this show. And while you're in those, you know, good earning years and while you can many of you can still fund those Roth accounts if you have money that you have saved in those pre-tax accounts, those Roth conversions can take care of deleting future expenses for you. So when you get to retirement, you can have that tax free income and that's going to be important. Because none of us know exactly where taxes are going. We discussed that on this show a lot. We believe taxes are going up. We just don't know yet exactly how much those tax rates are going to increase. And then finally, we talk about protecting your savings by following the rule of 100. Mitchell's going to actually get into that a little bit more on today's show. So don't want to steal his thunder there, but also consider investing in in an income product.

Dwight Mejan:
We talk a little bit about fixed indexed annuities on this program. You can use those for deferred retirement accounts or you can also use them for income purposes. This will provide you with that personal pension and have that income for life. So if this is something that you want to talk about further, I just encourage you to go to Retire360Show.com or reach out to us at (910) 235-0812. But want to give you a shift gears here now and just go to a banking and a market update via the Wall Street Journal. You know, depositors fled to the perceived safety of what we call the titans of finance following a pair of bank failures last month. And a raft of earnings this week will show just how costly the run was for everyone else. Small to mid sized US banks lost hundreds of billions of dollars in recent weeks to their bigger peers and to money market funds offering higher yields. That spooked a lot of investors. That is likely to force many of them to increase interest rates they are paying to avoid losing more customers. That's a good thing. So if you are looking to to park money somewhere and you have short term needs, we just encourage our listeners to call, you know, some of these banks, some of these small to medium sized banks and find out what are their rates, because many of them have upped the yields that they're offering right now.

Dwight Mejan:
And just make sure you don't go past that 250,000 minimum. You know that we are maximum that we require that they're required to insure and protect you for. We even go a little bit under that knowing that, you know, you're going to be earning fixed rates on these deposits, but call around and shop those rates. You know, last week, some of the biggest US banks, JP Morgan Chase, Wells Fargo, Citigroup, they announced that they had raked in billions of dollars in deposits from customers fleeing smaller lenders following VBS collapse. And many of our listeners we've heard from many of you have been doing have done the same thing. So the Fed has raised interest rates at the fastest pace since the 1980s to curb inflation, driving some customers with big account balances to ditch banks in search of some better yields. So that shift picked up steam after signature bank failed and SVB. So just be on the on the lookout for some of those higher rates. And we're going to take a quick break here. When we come back, Mitchell is going to start talking about a little bit about why people keep their money in 100% reserve required accounts. And we'll kick off with that right after this.

Producer:
Good cutting back on cable television. Lower your monthly expenses. I'm Jim Trabka with the Retirement.Radio Network Powered by Amara Life, an April 2023 survey done by CNBC shows 70% of Americans are feeling financially anxious. Cnbc's senior personal finance correspondent Sharon Epperson explains.

Sharon Epperson:
A vast majority of respondents, 70%, say they are stressed about their personal finances, and that includes 57% of people earning $100,000 or more. 58% say they're living paycheck to paycheck.

Producer:
And while a large majority of Americans are looking for ways to cut back on their expenses, doing away with high cable bills could provide some additional relief. Generation Z and millennials know all about that, having ushered in the streaming era. But with streaming services expanding their menu of options, thus pushing up their monthly prices, streaming may actually do more financial harm than good. In fact, in Mejanuary of last year, streaming giant Netflix added a $1.50 to their monthly rate, while Hulu is now charging 14.99 a month for their ad free streaming platform up from the previous 12.99 price point. With streaming becoming inevitably more expensive, is it possible to keep traditional cable while lowering the monthly bill? Some cable companies now offer a channel a la carte option. Maybe try cutting back on premium channels, pare down cable boxes, or downsize your plan to eliminate channels you don't watch and save 15 to $25 a month. Cutting back on cable television, part of our 23 cost cutters for 2023 for the retirement debt radio network Powered by Amara Life. I'm Jim Terebovlia to get your free copy of 23 cost cutters for 2023 call Dwight today at (910) 235-0812 Or visit retired 360.Show.com you're listening to Retire 360 with Dwight Mejan. Now back to the show.

Mitchell Keiser:
Hey guys and we are back this is Mitchell and you guys are listening to the Retire 360 show brought to you by 360 Capital Management here in downtown Southern Pines. And if you guys are listening from the western part of the state, we are in downtown Tynecastle. So next we are going to be going over why people keep their money protected by a 100% reserve requirement for their retirement. So first of all, what does that mean? What does it mean to have your money in a 100% reserve requirement institution? So as if you guys have been listening to us for any amount of time, you know that banks are only required to have a 10% reserve. So the money that they're lending out, they're only required to keep 10% of that in house. And many people don't know, which is why we're bringing light to this, that there are institutions that have 100% reserve requirements. And the relevance of us talking to you guys about this now is coming on the heels of banks collapsing. And if you guys had been listening to us, we had talked about how there's about 186 banks right now being held up by federal funding. So why would you do this? To increase your security? So a 100% reserve requirement ensures that all deposits are fully backed up by liquid reserves at the issuing company or a bank providing the highest level of security for your money. So if you're listening to that and you're heavy in banks and the stock market, you may just want to consider placing this as a piece of your portfolio. We never tell everybody to, you know, put all your eggs in one basket or, you know, go all in here or all in there. But it's definitely something that you should consider if you are sitting heavy in cash. So.

Dwight Mejan:
Yeah, Well, we've also seen a lot of people, Mitchell haven't we, that have that are in the sidelines or on the sidelines, I should say, with cash. And they're sitting in banks and that's one of the reasons, you know, we talk about having 100% reserve requirement. The second reason is protection against bank failures. You know, a lot of people are concerned about the money deposited in their bank accounts right now. We've been receiving a lot of questions about how to keep money protected from bank runs and bank failures. And we just want to emphasize to be careful about who you bank with. Check out our previous episode on the banks and fractional lending. We've got some more specific things that we talked about there. But you definitely want to protect against the possibility that banks could continue to fail. And we're not out of the woods yet by any means. Some of this stuff can take months to to shake out. And we just saw some of the early warning signs with some of these other banks. So that's the second reason. Mitchell, You've got another reason there that we need to be aware of.

Mitchell Keiser:
Yeah. So by participating in these 100% reserve requirement investments, you're also. Promoting a more stable monetary system by eliminating the possibility of bank runs or failures affecting your retirement plans. Now, you were just talking about, you know, watching what banks you invest in. I remember last week we had discussed that if you belong to a smaller bank with less than 10 million in deposits, they're not even required to have the 10% in reserve that most big banks are, which there again, you're just subjecting yourself to more volatility. So just another reason, another couple of reasons that you do want to consider being mindful of those things.

Dwight Mejan:
Yeah. Good stuff. Number four, you know, when you own a product like a fixed indexed annuity or other 100% reserve requirement investment, you maintain more control over what is being done with your money. It's invested in that particular product is invested in us Treasury bonds. That's the underlying security behind that instrument. It's tied to an underlying stock market index. So you don't have the volatility with your principal as well compared to banks that lend out deposits in the form of loans without the input of the customer. So that's just one example. We like fixed index annuities and we talk about that a lot in this show to consider that alternative for a portion of your bond portfolio. That way you get it out from under the fee structure. If you have an advisory account, it doesn't fall under the fee structure there. And the other benefit there is it's not controlled or affected, I should say, by interest rate movement. So not just having that 100% reserve requirement, you pick up some savings there as well, both in fees and that's a huge benefit to our listeners. So keep that point in mind as well.

Mitchell Keiser:
Yep. And then lastly, I would say probably the most important reason that you guys should be mindful on this subject is the most important real estate out there, which is your mental real estate. You want to give yourself a peace of mind. People value stability and security as you get older. I would venture to say that I even value this now being in the first quarter of my career. People get concerned about the many factors going on, especially now with inflation, rising taxes and global supply chain concerns. Many smart retirees want to get to be able to enjoy their retirement without the concern of what could happen with the market with fluctuations or if something happens with the our financial system, you know, with bank shutting down, with stocks going all over the place, I mean, people want to make sure that they're diversified. And this is I would say one area that we do see that gets the most overlooked because you can have more stability in your portfolio and continue to see the gains that you have been seeing, but just keeping yourself a little bit more protected. So this is a new concept to you or if you want to learn more about it.

Mitchell Keiser:
We have a lot of literature as well that our office puts out. So if you just want general knowledge of that, we'd be happy to share and we could share what that could look like in many different instruments that are backed up by these institutions. You guys could give us a call at (910) 235-0812. Or you could go to our radio show website, which is the Retire360Show.com or check us out at our office. We are in downtown Southern Pines and we are in downtown Tynecastle. We'd always recommend if you guys are going to visit that, you just give us a call, give us a heads up that you're coming so that way we can be able to steward that time well. But we're going to move on here to how you can beat bank CDs. But again, just want to put that out there that if you guys have been thinking about some of the things that we've been talking about or Yeah, probably should be looking at moving more of my portfolio into something that's more stable, more risk averse, give us a call. We'd be happy to help out.

Dwight Mejan:
Yeah. Mitchell On that topic, we had a listener of our show who's a client of ours that we managed a piece of his portfolio, about half of it, and he turned the other half over and recently called me in the last couple of weeks. And it was interesting. He had stated to me in getting off the phone something that he had a question about. He said, You know, Dwight, I've been sleeping a whole lot better since we made some of the changes that we made to the portfolio, he says. I don't nearly seeing it go down as much. And this was in a period not too long back where he knew based on what the market was doing, he checked on his portfolio every day. And. And he saw that segment of his portfolio that was dropping pretty, pretty fast and in the past. And he said, now I see it holding a lot better. And it was just some some tweaks that we had made to some of the positions that he had. And it's rewarding just to know that he's got that peace of mind that you were talking about. So I just wanted to remind our listeners of that. But yeah, going to beating the bank CDs, you know, we talk about two, two pools of money. A lot of times on this show, we talk about your your safe money, your smart, safe money. And then there's that smart risk money, which is money that you take some risk with. But it's calculated risk based on your comfort level with the amount of risk that you can stomach.

Dwight Mejan:
So we're going to talk about the safe money portion of it and beating bank CDs. Where do you go to do that nowadays? Well, with inflation, that's continuing to rise and recent bank failures, do you really want to count on the banks for your safe money? That's a question we talk about considering. Place a floor on the portion of your assets. If you're concerned about volatility so that you can count on money being there when you need it. And that's an important factor is when you need to take that money out. You don't want to have it beat up by declining markets. That's a that's terrible, especially when you're in retirement years and you don't have any more years to make up income if you're getting ready to retire. And last year, let's say you retire at the beginning of Mejanuary of 2022, that was a rough year. If you didn't rebalance or if you didn't adjust your portfolio and you were heavy in the market. So there are instruments out there where you can get a floor on the on the level of money that you lose. And some of them are securities products and some of them are are non securities products. So we just want to encourage you to talk to take a look at that. Mitchell is going to talk about the rule of 100 here. So maybe you can share that with our listeners.

Mitchell Keiser:
Mitchell Yeah. So you guys have heard us talk about the rule of 100 before, and that is not something that our office has developed, though we are big proponents in using that as a measure of risk for our clients. So the rule of 100 is this. So you take 100, you subtract your age and your age signifies how much risk you should be taking with your overall portfolio. So if you are 75 years old and you're applying the rule of 100, your situation, 75% of your assets should be in either principal protected products or it should be in strategies that are very risk averse. Why would you do that? Why is that important? Because as you're approaching the age of 100, you need to make sure that your income is not going to run out on you. Now, if you are 26 years old like I am and you're listening to this, you can afford to take a little bit more risk. You can have be tilted more heavy in the stocks and bonds because, you know, realistically, I have 40, 50 years until I need to make that more conservative. So be thinking of the rule of 100 and how that applies to your portfolio. Now, I will also just say with the rule of 100, it's also important to know how you're invested. So if you started investing when you were 26 and you know you've just been investing, investing and you've been working with an advisor and you guys haven't made any risk adjustments, it's also probably time that you want to be looking at that as well, because as you're, again, as you're continuing on an age and into your retirement, you want to make sure that you're taking a more risk sensitive approach.

Dwight Mejan:
Absolutely. You know, the bottom line, Mitchell, is this instead of putting your money in a bank CD, we suggest consider saving savings vehicles with 100% cash reserve requirements such as multi year guaranteed annuity products, fixed indexed annuities and indexed universal life insurance. Now multi year guarantee annuities. A lot of our listeners don't know this. We're not talking about ten year products here. We've got products that are two years, three years where you can get a fixed set rate and you'll know exactly how much money is going to be there at the end of that term. So if you bought a three year term product, you'll know exactly what the rate of return is. But we can tell our listeners that there are certainly higher than most CD rates out there for the same term that you would look to match. So just, you know, be aware of that. We want to help educate you on what your options are that would help you reach your goals and we'll help you determine the appropriate amount of risk to take with your savings. And we're ultimately going to let you make the final decision because. Bottom line, it's your money. It's not our money. So if you want to learn a little bit more about some options for that safe money that you have, it's a great time right now to get into some of these instruments and to at least take a look at them to see if they're a good fit. Reach out to us. You can go to our website at Retire360Show.com or call us here at (910) 235-0812 and just ask for Dwight or Mitchell and we'll be happy to schedule a consultation. You know, we meet with listeners on Zoom. We could do a Zoom call or you can come here to our office or if you'd rather us come your way, we will be happy to arrange a time for that as well. But we're going to take a brief break here. And when we come back, we're going to talk about the lost decade and how that has affected retirees. So we'll be right back.

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. Visit Retire360Show.com to schedule your free consultation today it's a 1000 hundred dollars value provided at no cost to you. Book yours now at Retire360Show.com. Helping bring you one step closer to financial freedom. You're listening. To Retire 360, here's Dwight

Dwight Mejan:
All right. Well, I'm Dwight Mejan welcome back to the retired 360 show. We are glad that you're with us. If you're new to our show, we just want to welcome our our new listeners here with us this afternoon. We're going into a segment here called The Lost Decade and how it affected retirees. Many of you have heard of that before the lost decade, but maybe you don't know exactly when it was referring to or what it even means. Some of you have never heard about it. So let me just take a moment to just define what we're talking about here. This is often used to refer to the period of time between Mejanuary 1st of 2000 through December 31st of 2009, during which the stock market experienced a significant downturn. Here's just a few statistics about that period. The S&P 500, which is an index of the 500 large cap stocks, had a negative return of 9.1% over the course of that decade. The Nasdaq, which is more technology, heavy tech, heavy related stocks, it had a negative return of 44.2% over the course of that same period of time. And inflation, the average annual inflation rate during the lost decade was 2.5%. So the lost decade had a significant impact on retirees, particularly those who had invested heavily in the stock market and retired at the beginning of that decade. And there are some challenges that they faced.

Dwight Mejan:
And I want to talk about some of these challenges because, you know, we don't know where, you know, where this year's going to land. We don't know where the next five years is going to land. But we do want to make sure that our listeners are prepared and not tilted too heavy in equities. If you're in that category of retirement, and especially if you're a retiree right now who's living on systematic withdrawals from your portfolio, from the money that you've saved, it's very dangerous to be too heavy in in the security market right now because what happened during this decade, portfolio values dropped significantly. So retirees who had a significant portion of their portfolio invested in the stock market during that period of time, they saw the value of their portfolios decrease significantly during the lost decade. Remember, I just gave you averages of what those markets did in those broad based indexes. But many of our listeners and many people during that same time lost more than that. And remember, if you're pulling money out of your portfolio, the losses were compounded even further. So the decline in value in the portfolio has significant impact on retirement income and on your standard of living. So these people that were in this lost decade period period, they had difficulty generating income retirees who were basically relying on systematic month to month withdrawals from their investments to support their retirement, that many of them had to make significant adjustments to their spending and their lifestyle during that lost decade period, particularly if they were heavily invested in the stock market.

Dwight Mejan:
So we don't want you as a listener to this show, even if this is your first time listening to it. We don't want you to have to make those painful decisions. And we've talked with many listeners of this show who have had to postpone their retirement plan because they were too heavy in the market and they don't feel like they could afford to enjoy the lifestyle, that they lifestyle that they envisioned because of their portfolio. Their 401. K something took a big hit last year and they want to make that loss up before they retire. So there's another risk that's involved here, and that's called longevity risk. Mitchell is going to get into that a little bit towards the end of the show. We're going to talk about health care costs. And that's another huge risk that's involved here is longevity risk. Retirees who live longer than expected faced a greater risk of running out of money during that lost decade period, particularly if they had no backup plan for a prolonged market downturn. And here again, we want to make sure that you as a listener of this show are prepared for longevity risk. What is that? It's just the chance that you might live longer than the average life expectancy.

Dwight Mejan:
You know, an average I think mail today is is in the late 70s and female probably 3 or 4 more years longer than that. So we have to make those assumptions when we're working with a prospective client or looking at their portfolio and running some analysis is we're going to assume you're going to live a long time. And that's an assumption. That is a good assumption to make, because without it, you're going to find yourself in a retirement having to make painful cutbacks and changing the way that you live. And that's never fun to do. So just keep in mind, we don't know that the other lost decade is going to happen again, but we know markets go up and we know they go down and we don't want to get caught on that way down having not done some things that we should have been doing or considering if we're entering one of those periods again. So but hey, for our listeners, we do full retirement plan consultations. We provide these comprehensive at no cost to you a listener of this show, and there's absolutely no obligation. You work with us only if it's a best fit for you. We're going to help you analyze your financial situation. Maybe you've never been to a financial advisor. You don't know if you can afford one.

Dwight Mejan:
We're very transparent here at 360 Capital Management. We will let you know. First off, if we think we're a fit, if we don't think we could provide the help that you need or we're going to provide the value that you're looking for, we won't even take another step with a future meeting. We'll part ways as friends and hopefully give you some free advice to guide you better on the path that you're on. But if there is an opportunity to help you, we're going to lay that out for you. We'll lay out the expenses that it costs to work with us. Many people tell us they're surprised when they hear the value of what they get working with us. If they were to employ us to work with their retirement plan, and we'll let you make that call. But we want to be as transparent as we can with you as a listener of the show, and we'll discover exactly how much you're paying in fees, help you cut unnecessary costs that are in your IRA that you may not even know about your 401. K or any other retirement savings account. We can help you with Social Security planning and your Medicare. In fact, before we end today's show, I've got some exciting news to share with our listeners about some upcoming Social Security workshops. These are we haven't done these yet this this past year, but we've got some events coming up.

Dwight Mejan:
So if you're wondering about when should I take Social Security? Well, Social Security be there when I need it, you know, what's the best timing to start pulling money out of my retirement account? Should I do that and delay Social Security till I'm 70? We'll have answers to those questions. And you can come to a live event. And we're hosting those on some dates coming up. So I'll go over those with you before we end today's show, but we definitely will help you with that with your Medicare, We'll compare your current situation to what's possible for you and you may be able to potentially get some more out of your portfolio without taking more risk. That's one of the things that we'll look at. But just remember, it's your money. It's not our money. If it matters to you, it matters to us. And one of our values here is we don't make decisions for you as a listener. We merely as Mitchell said earlier, we lay it out there for you as far as what's what options you do have, and you'll get to make that decision on your own. So but with that, Mitchell, you've got some the next thing you want to talk about here is health care expenses. So, Mitchell, what do you have to share with our listeners regarding that?

Mitchell Keiser:
Yeah, I do. I just wanted to just confirm everything you said there. You unpacked a lot of good stuff. I did want to add, though, if somebody is concerned about outliving their money or they're concerned with, you know, maybe not having enough money, it doesn't really matter what stage of life you're in or if you have kids. I would say the easiest way to offset that is to make sure that your insurance is properly allocated to your situation. Now, might saying, Hey, go out there and buy a whole bunch of insurance. No, I'm just saying that you need to make sure that if you have a debt and you don't want to leave that to a family member, make sure that you have a, you know, a term insurance that's set to last the duration of your house or if you have car payments or if you paid for your kids college, something like that, or if there's a certain amount you need to live on. And if you pass away, your spouse is going to have to make a lifestyle adjustment. Those are the situations where insurance is appropriate. And, you know, we say that we are independent fiduciaries, but that is on the side of investments and that is on the side of insurance. If you guys do book one of those consultations with us, just know that we will be looking to make sure that your insurance is where it should be as well.

Dwight Mejan:
Maybe you can share with our listeners because I don't know, this is something you were going to talk about, but it reminds me of somebody who came in and surprisingly to you and me, was paying quite a bit for their life insurance premiums. And because we came out of a period really for the last 15. Teen years where interest rates were beat down pretty hard. That's a bad thing for life insurance policies that are universal in nature, meaning universal life. And you did something for this listener that came in and ran one of those illustrations. It's called an in-force illustration. And much to that person's surprise, that policy was going to run out sooner than expected, and you were able to give them some advice. So maybe you can just remind I know I've said a lot here about that, but maybe just stress the importance of people who are paying for life insurance. We're all for life insurance when there's a need, you know, to fulfill it. But a lot of people don't even realize they could pay up a policy. So maybe you can just tell the listeners a couple of things about that.

Mitchell Keiser:
Yeah, absolutely. I think it's important from what you just said to I hope you hear me when I say I'm not telling you that you need to go buy life insurance and I'm not talking here selling it to you. I'm telling you that you need to make sure that you understand what you have. And a lot of people just don't understand the game of insurance. And you need to be with somebody that you can trust. An example that I can give just to best display this would be my parents. They purchased universal life insurance when they were young and it was sold to them as whole life insurance. But I will tell you that universal life insurance or if you have something that says flexible, universal life insurance, that is not whole life, that is not something that's going to be guaranteed to last you for the remainder of your life. It could. I'm not saying that it won't. It could. But there is a chance that it will run out. They carry what's called a cost of insurance expense charge that does raise as you age. So that's just something that you need to continue to be mindful of. Something that we do on the on the side of insurance that Dwight was just talking about, we make sure that you understand what you have.

Mitchell Keiser:
We make sure that it's still a fit for what you need. We had people come in also that they had a pretty nice portfolio and they were still paying a ton of money for like five different insurance policies. And to be honest, they didn't need any of them. So we helped them cancel all of them. And that is part of the service that I'm talking about, is that if you're paying for something that you don't even need, I mean, why throw out your money if it's realistically and statistically not even going to be there for you? I'll just share one last statistic and then I'm going to get off that topic. If you guys have term insurance, statistically only 2% of term insurance pays out. Why is that? Where do they get that from? Because insurance companies bet on you outliving that insurance. So in term insurance is something that's necessary if you need it. If you don't need it, get rid of it. So I'm going to leave you guys with that. If you need an analysis on that, reach out to us. Be happy to help. (910) 235-0812. The last topic we're going to talk about today is are you ready for health expenses during your retirement? According to a study by Fidelity Investments, a 65 year old couple retiring this decade will need an average of $300,000 to cover expenses through their retirement.

Mitchell Keiser:
So this includes premiums for Part B and Part D, as well as out-of-pocket expenses for things like deductibles and prescription drugs. Now, again, that $300,000, that is an average. That's not saying, oh, that's the number that you should bank on. I mean, you know, your health, you know your situation, it could be a lot more. It could be a lot less. I know part B right now, if you're in the lower brackets, is about $165 a month. Part D could be a range of things. Now, if you're subject to Irma, your Part B could be much higher. That's not what we're really talking about today. But if you guys are doing Roth conversions, you need to be sensitive to Irma. Or if you are high income earners, you need to make sure that you understand what Irma is. But yeah, that is definitely something that most people do not consider when approaching retirement is how are you going to put in your health care as a factor? Households by the age of 65 or older are spending an average of $7,000 on health care per year, and that is according to the Bureau of Labor Statistics. That number is expected to rise due to inflation and pressure on the health care systems for millions of soon to be retirees.

Mitchell Keiser:
I will tell you that $7,000 a year is not a that's a pretty accurate statistic. We've got a couple hundred, maybe even a couple thousand people that we've helped with their health care and prices do go up on premiums. If you are on the supplement side of things, if you are on the advantage side of health care, you definitely need to make sure that you have some money set aside for that because it could get quite costly if you guys have anything like diabetes or any kind of pre-existing medical condition, those things could get very costly with prescriptions and inhalers and EpiPens. These are all just things that you don't think about when you're 26 years old and you're planning for your retirement. You're not accounting for all the what ifs. But that is something that you guys need to make sure that you have a rainy day set aside for. I'm going to break that down. The $7,000 that people are spending on average per year. So 5000 of that would come from your health insurance, such as the supplemental Medicare plans. 1000 of that is going to come from medical services such as eye and dental care. Most of these plans do not cover eye or dental, and even the plans that do. I would caution you that the benefits on them are not astronomical and 700 of that comes from prescriptions and the remainder comes from medical supplies.

Mitchell Keiser:
And again, that is an average. I would just tell you, if you guys are spending a lot of money on health care or if you haven't had somebody look at your plan. We look at our clients plans about every 2 to 3 years. Reason being. About every 2 to 3 years, you get price increases and there are just changes with your health, changes with your prescriptions. It needs to be constantly tweaked just to adjust to your situation. You can keep those premiums down, but it's not going to go down on its own. You do need help. And unless you're a licensed agent in the state of North Carolina, you're going to need somebody to help you out with that. So if that's something that you'd like to have us take a look at, I would recommend somebody does that sooner than later. I know by the time open enrollment season comes around, we usually get booked as soon as it opens until it's until it's over. So if you're kind of you've been pushing that off, I'd recommend doing that sooner than later just so we can make sure that you're getting the time that you need for us to look at that with you.

Dwight Mejan:
For Mitchell there that him and his team, they come up for air a little bit the fourth quarter of the year, at least between October 15th and December 7th. I know those dates. Those are the enrollment dates. But Mitchell, it really is true. Something you said that I want the listeners to be aware of, especially if they're coming in new to this whole thing with Medicare, is it's not a one stop shop one and done meaning it's not like you pick this plan and it's the one you're going to be with until the day you get your wings and fly out of here. You know, if you live and enjoy a 25 year plus retirement, there's there's multiple moves that you're going to make with regard to this Medicare because it's evolved a lot in the 30 years I've been in the business. It was a lot simpler, you know, back in the 90s, early 90s when I got into the business, it was if you if you didn't have an employer sponsored plan, you picked the Medicare supplement. That was it. Today you've got to decide are you going down the traditional Medicare path and getting that Medicare supplement or are you going down that competing Medicare pathway, which we call Medicare Advantage? Are you going to go down that path? And which one's better? You know, we don't say there's one better than the other.

Dwight Mejan:
What's better is what's best for the listener. You know, what's important to them with the health care. But one of the reasons why I will just say Mitchell and his team have value here at our company is because we don't have one carrier. We have all of the competitive carriers here in the state of North Carolina that you could choose from. And he'll be your guide and his team will be your guide throughout that retirement journey so that when you're faced with making a new decision, you'll be able to have the questions asked of you and then you'll get unbiased opinion as far as which way to go. And I know that's what listeners. Mitchell I get a lot of our clients are mutual that you help on the insurance side and they tell me that's one of the things that they appreciate about you and the team here that works with them is they're going to get that unbiased advice because we're not tied to any one carrier. We have lots of different ones that you can help our listeners with. So I just wanted to throw that plug in there for those who are listening that might have some angst of wondering, Hey, am I going to get the right advice here? Because I don't know the questions to ask, Right. But you do. Mitchell And your team knows the questions, too.

Mitchell Keiser:
No, I appreciate you saying that. And I will not to brag. I have no reason to brag. But I will say that is why we stay. Why I stay so busy with my team of people that help me is because we do give unbiased advice and I can put my hand on a Bible and swear to that. Do you guys, I could tell you I worked with a lady last year. How many times do I probably met with this lady? Four times that she had all these questions and all these things, and she just wanted me to move her more than anything. And I wouldn't do it because she it wasn't what was right for her. She wanted me to move her mother's health care as well. And it was I mean, it just wasn't right. And that cost me actually, that cost me three clients that I just told them that they were best off where they were and I couldn't help them. But I will say the the biggest benefit to people listening that we could add is just unbiased advice. You can go to a senior center and they will do the about the same exact thing. However, I will say the volunteers at senior centers do not work with those companies and they can't place you with a company. They can just give you advice I can offer you. We can offer you advice, and we can offer you ongoing management. So there is there is a big benefit in that. So if you guys feel like you're getting hosed on your Medicare, you probably are. If you feel that way, I'll tell you, you probably are getting hosed because most people that we don't work with, they're just unfamiliar with the way things are and they're spending way more than they need to.

Mitchell Keiser:
So give us a call and I will just ask you guys one last question to leave you with on this topic. On the topic of health care being that it's the biggest expense for retirees, what are you doing currently to. On that. I will tell you, if you're not retired yet, you need to either do your research, contact us, attend one of our events. Dwight's going to talk to you guys about here, just learning about the different types of Medicare to learn which one is going to be right for you. After you do that, you need to see how much it's going to cost. You need to see how much it's going to cost with yearly increases. If you do a premium base plan, if you do a zero premium plan, you need to make sure we tell all of our clients, make sure that you take the money you're saving, you put it into an investment account, you put it into an annuity, a savings account somewhere where it can continue to grow. And if you ever have a rainy day, you ever do have to have a procedure or a medical misfortune. You've got that money to cover it. So we never say, Oh, yippee ki yay, you just saved all this money. Go blow it on a vacation or a new car. You want to make sure that you are saving it because there is a good chance that you're going to need it. And if you don't, all the power to your beneficiaries. So make sure you're prepared. But anyhow, that's all we're going to talk about on that. We do have a couple of events coming up. Dwight, if you wanted to talk about that.

Dwight Mejan:
Just mention this before we close out today's show. We are members 360 Capital Management, myself specifically of coffee. Okay. That's not the kind you drink much to Mitchell's. He would love it to be the kind.

Mitchell Keiser:
I highly recommend coffee as well.

Dwight Mejan:
He totally recommends coffee. I don't drink coffee. Mitchell not only.

Dwight Mejan:
Mitchell not only drinks my portion of coffee. Mitchell, What did you order in Vermont this past week? And you ordered something? I didn't even know what it was a red. Something red I.

Mitchell Keiser:
Ordered about everything in Vermont. Well, I ordered a red. I So I introduced. What? I introduced you guys to the red. I the pour over.

Dwight Mejan:
Many coffee shops and I don't drink coffee. I went to these places. I like the smell of coffee. That's about it. But Mitchell, he knows what all this stuff is. And he ordered a red eye, which is like the maximum amount of caffeine you can drink. Because. Am I saying that right? Mitchell? It's like the max, Pretty much. Okay, Well, it's a drug for sure. Mitchell's. Mitchell's addicted to it. There's no doubt guilty, but he loves coffee. But the coffee I'm talking about here is it's coffee and it stands for Council of Financial Educators. We are members of that organization. It's an IRS approved 500 and 1C3, a nonprofit, and they are committed to teaching the community. We're advisors serve, and we are obviously financial advisors that do this show. But we teach for this organization and we teach various topics and coming up and you want to get your pen available here because I know some of our listeners are going to want to write this down some some dates we're going to be talking about Social Security. So if you want to understand your options, you've got lots of questions. Maybe you're in your late 50s kind of planning your retirement right now or you're already there and you're going, Hey, I'm just kind of wondering, should I pull the plug here? Should I retire this program that we do this workshop, It's about an hour, hour and a half in length that we do.

Dwight Mejan:
We're going to be teaching it several times here, so I'm going to give you some dates. The first one coming up is Tuesday, May 2nd. And just hang tight because we know that a lot of you still work. So we gave some Saturday options here as well. But the next class that we're going to be teaching for those that may be closer to Pinehurst, you know, we have listeners up in Lee County that will hear this and some of the surrounding counties. But Tuesday, May 2nd, we have two times. We have 11 a.m. to 1230. We're going to be giving that course. It is free to the listeners. So we'd love to have you as a listener if you've heard us or you're maybe you're just tuning in, you want to learn a little bit more about that. Tuesday, May 2nd, 11 a.m. to 1230 at the Dennis Wicker Civic and Conference Center. That's over off of Rattlesnake Trail in Pinehurst. Or there's a 6 p.m. course that same day, May 2nd, 6 p.m. to 730. So take note of that. I'm going to have you reach out to us here. (910) 235-0812.

Dwight Mejan:
I'm going to tell you these classes will fill up. If you are listening, I encourage you to call it may be another two months before we do it again. But do pick up the phone and call us or go to retire. 360 show.com we also have one at Sandhills Community college. That'll be for those of you that can attend a Saturday session. We have 11 a.m. to 1230 planned on that same day, Tuesday, May 2nd. I'm sorry, that is apologize. Saturday, May 6th at 11 a.m. to 1230 different day there May 6th. And then we are also doing another popular topic for our listeners here, tax planning for retirement. Many of you have questions about taxes. What are they going to look like for me when I retire? Which income should I take first? What stream of income should I take? Should I delay a pension? Should I take from my portfolio? There's so many questions around taxes and which buckets to money to draw from. We've got your answers to that. And we're going to be giving a live event as well on Tuesday, May 2nd on that topic. That's going to be at Sandhills Community College Tuesday, May 2nd. I'm sorry, I'm getting my dates wrong here. Mitchell That's going to be at the Dennis Wicker. That's the Pinehurst Conference Center Tuesday, May 2nd, from 2 to 330.

Dwight Mejan:
So that's going to be taxes in retirement Tuesday, May 2nd, 2 to 330. And then May 6th, we're going to do Sandhills community college as well for that taxes in retirement event. We'll have two options there, 9 a.m. to 1030 or 1 p.m. to 230. So all of these are. Classes are free. You do not pay anything. We'll have workbooks that we hand out. You'll be able to take notes there. But believe me, folks, when I say these will fill up. They will fill up. And we have to shut people down because we do get lots of calls on both of these. So please call in that number go to Retire360Show.com and we'll be glad to get you signed up and confirm your attendance. So, hey, I just want to thank you for tuning in to today's show. My name is Dwight Mejan alongside me, Mitchell Keiser. We're glad that you took part of your day to tune in and be with us. And we'll be back this same time next week with answers to more of your questions and topics that are of interest to you. So thanks again for tuning in with us today. Hope you have a great week, everybody.

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 (910) 235-0812. That's (910) 235-0812. 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:
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.

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