Dwight and Mitchell share a market update before encouraging listeners to think beyond bank cds when it comes to protecting your hard-earned retirement savings.
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Producer:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.
Producer:
Welcome to Retire 360 with your host, Dwight Mejan. Dwight is a licensed fiduciary and financial advisor who always places your needs first. Dwight works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you, too. So now let's start the show. Here's Dwight.
Dwight Mejan:
Well, my my my my, how quickly a week comes to another close and we begin another week. My name is Dwight Mejan and I am host alongside me Mitchell Keiser, our other host, and Sam Davis, always in the background there. But we'd like to keep them in the front ground here a little bit as well. Our executive producer of the Retire 360 show, brought to you by 360 Capital Management. We are recording this today from Southern Pines, but we have listeners also in the western part of our state out in the Boone Banner Elk blowing Rock area. And of course, our listeners down here in Moore County. But we're glad that you have taken another part of your day to be with us. And I'm always honored to have these gentlemen alongside of me. How is the week's been going for? Or I should say, the week for Mitchell and Sam? How are you guys doing this morning or today?
Mitchell Keiser:
Yeah. The week has been going well over here. Hi, folks. This is Mitchell. We have. I'm just trying to stay above water here with all of this Medicare Advantage stuff. No, we'll hop into that in just a second. But got to meet a lot of our listeners that have called in. We had the opportunity to talk to a lot of our, our listeners and some people that follow us throughout our social media platforms on or at our event that we did this past week at the Sandhills Community College in Pinehurst. That was a great opportunity. We got to come and share some tips and tricks on taxes and retirement. We talked a little bit on Medicare, but it was just a great way to meet folks. So still just meeting with them and getting ready for our next week. If you guys are in the Boone Watauga area, we're going to be coming to you guys next, and I'll give you details on that just a little bit. But yeah, let's get over here. How about you, Sam? Things are going well. I'm here in Atlanta, Georgia. Thanks again to all of our listeners for tuning in once again. We've been really happy with the response and hearing from everybody who checks in with the show and starting to see the fall colors really come through. I think we're about a week or so away from that peak foliage here, kind of in the northern part of Georgia. I'm envious of you guys up there in the mountains. I was in Gatlinburg and Pigeon Forge on the Tennessee side this time last year, and man, it was probably the best fall colors I've ever seen, so enjoy it.
Dwight Mejan:
Well, it was Italy better, Sam. Or would you rather be in the Gatlinburg side?
Mitchell Keiser:
Well, I did enjoy the hills of Tuscany quite a lot, but didn't get to see the foliage. It was still kind of a late summer early fall out there, but yeah, beautiful, beautiful parts of the world. And we've got a lot of them right here in the USA, and I think North Carolina and Vermont, the best foliage that I've seen in the United States.
Dwight Mejan:
Yeah. Well, hey, if you want that Italian food, there's a really good spot. This is not paid advertising, but one of my favorite restaurants is Lisi. Some of the folks here in Moore County that have been there, it's as close to Italy as I can find as far as food and certainly bread. The bread there at Lisi is is fabulous. So free plug for Lisi's today from 360 Capital Management. So hey.
Mitchell Keiser:
Maybe they'll maybe they'll bring us a platter next.
Dwight Mejan:
Week. There you go. Hey, we'll take it. No apologies. But hey, it's good to good to be with our listeners. As both of you have said. Glad to have some probably first time listeners. Maybe you're traveling in the car today or just laying back on Saturday or Sunday whenever you're listening to this, but we're glad you've taken some time to be with us. We got a great show planned today, and by the way, if you are listening, you're going to have some questions that we talk about on today's show. You're going to want to get a hold of us. Our contact information, if you're in the Moore County area, is 910. Area code 2350812. If you're in the western part of the state, it's (828) 278-7814. If you'd like to contact us via our website, you can go to Retire360Show.com. You can also follow us on Facebook Twitter if you can. Also look, I'm sorry, Instagram. We're on Instagram and Facebook. You can just look at Retire 360. We have a YouTube channel. You can see some of our past episodes. And folks, we're planning some great stuff for 2024 already, where we're going to be doing some more teaching. And you can tune in and get some some more information on some quick clips and some topics on some topics that might be near and dear to where you're at in the retirement journey. So stay tuned for more information about that. But we're getting lots of requests for a little bit more specific kind of whiteboard type teaching. And if it's a fit and you can decide if you want to reach out to us for some more specific help.
Dwight Mejan:
But we're committed to helping you, as always, win with your money. But we also realize as as a fiduciary firm, you, our listeners, need to be empowered to make wise decisions. And our job here isn't to make decisions for you. It's to provide you with education and resources that you can use to basically go into retirement and stay in retirement. Fearless. You know about the future, regardless of whether markets are up or whether markets are down. We want you to feel comfortable with that portfolio, with your income plan, with your tax plan, with your estate and legacy plan, with your health care plan and with the overall asset allocation that you're in. So with that, we are going to jump in. I want to just ask Mitchell. There's important period of time here for what Mitchell is dealing with at our office. Mitchell is securities licensed as well, like myself, but he also takes a unique role this time of year, from October 15th to December 7th. And Mitchell, I think I mentioned to you today at lunch when we were scarfing that down over about 15 minutes, many times during the day, I think I bump into you. Oh, maybe once or twice, and we have a quick conversation that might last more than a minute. And that's because you're kind of a busy guy right now. So maybe you can share with our, our listeners why you come up for air every once in a while.
Mitchell Keiser:
Oh yeah, our our listeners and our clients are keeping me plenty busy during annual enrollment season. For those of you that do not know, it is from October 15th to December 7th, and I've had the pleasure of helping many of our listeners and clients. Like I said, just with their health care, their advantage plans, prescription drug plans. Sometimes that turns into a separate dental plan, whatever that would be. It's everything insurance. This is the time that I've been helping our folks just get acquainted to their new plans for next year. It seems like I'll take a file and a person off, and as I do that, two more get set down. You guys saw my office. It's it's crazy, but fortunately, I do have. Awesome. Surrounding me. I've got a great team, both in our office and out of our office that have been helping me not just process the work and the plans and helping our clients and our listeners with improving their situation, but they're also helping me investigate to see what plans are out there, what's new every year that didn't exist last year. You know, everybody asks me. Uh, Mitchell, I've always heard bad things about advantage plans and never to do them ever since they came out.
Mitchell Keiser:
So why is everybody talking about them now? And that is true. Think when Advantage Plans first came out. I think you would even testify to this too, Dwight, that people were a little skeptical. I think one on this new type of insurance, but also the benefits that were in those plans were not near what they are now. I've heard stories where people had maximum out of pockets or people responsible for payments of, you know, over $20,000 where I mean, if you're there's plenty of plans now that, you know, they cap you at less than $5,000. So, I mean, things like that, things they've definitely come a long way from where they were. So I would say that if you guys have never explored an advantage plan, it definitely is worth looking into. It's not the right fit for everybody. I still do come across quite a few folks that it's best for them to be on a supplement, but I would say for the vast majority, it's definitely worth checking out. I've seen a lot of people save a lot of money.
Dwight Mejan:
Well, the other thing, Mitchell, I agree with that. I think something that I've been watching since these have been out. I think it's over 20 years now. I think they came out first in oh six, don't quote me on that. But somewhere around oh six, the first advantage plan had come out. So we're pushing 20 years since they've been in the market. It seems like the the time period that's really critical for a new platform for insurance, which is what this is for. Medicare seems like the seven year period. It's kind of like the seven year itch, you know, but it's kind of the same thing with these plans. They got to kind of prove themselves, and they've certainly done that. But one of the things I find rather impressive about them right now that's getting my attention, and I'm asking Mitchell questions about it, is the fact that these plans are now starting to offer money back, regardless of your your zip code necessarily. It's still zip code related, but they're giving money back to people, and some of them are giving some considerable amount of money back loading up like, you know, debit cards. And it's like a, like a rebate on your insurance. And what that tells me, folks, is it's been a reinforcement. We've all kind of known this. If I can just be candid here for a minute. The government absolutely stinks. And that's putting it mildly at managing something. Health care, for example. They're terrible at it and they're paying these private companies the insurance plans for these advantage companies, they're paying them so much a month per recipient.
Dwight Mejan:
It's negotiated with the big companies that are out there doing it, whether it be Humana, WellCare, United Health Care Group. They get so much money per recipient enrolled in the plan, and then they manage the plan. And what that tells me is they're profitable and, you know, they're still going to answer to shareholders, which of course, what the private sector does. But the government, there's no incentive to produce a profit. Right. So these plans have gotten very competitive. And we're seeing capitalism at work right now between competition. And that's what I'm noticing. So if you've been in a plan for a couple of years and you haven't had it reviewed, you're missing out. And I'm going to just encourage you to pick up the phone. Mitchell and his team do a great job. I heard Mitchell tell somebody today to stay in the plan that they were in. It's still the best one. But I would say and I'm guessing here Mitchell a little bit. So you can correct me if I'm wrong. Out of five people that come to you, there's a better opportunity out there for four of them. And one of them, you're going to be telling them to stay where they're at. Is that accurate? That's kind of my own. I never even asked you this before the show. Is it accurate or is it is it 2 to 1 you're telling or 2 to 5 to stay where they're at?
Mitchell Keiser:
I would probably say I tell one and maybe 15 or 20 to stay where they're at. Um, and, you know, you were talking about benefits that these plans give back, which they do between, you know, Humana and AARP. Those are the two biggest that I've seen. Give people money back to their check. However, I will say it does depend on the person and the situation because I tell people, yes, there's plans that give you up to $150 added back to your Social Security check. That's great. Right? So that plan must be for everybody. Wrong. Just because that plan works exponentially for somebody does not mean that that plan would work for everybody. Um, I've had situations where a client had a procedure done. It was a pharmaceutical company out of Arizona, and they came and they had a nurse in North Carolina come to their house to inject a prescription. And that plan was covered by a certain insurance company, but not another insurance company. So no matter how great those benefits were, it really didn't matter because they needed that prescription and it wasn't covered by that plan. Likewise, if you have a doctor and it's not covered under a certain network, or if you have to see certain things for certain frequencies, that all plays into the equation. So so that's kind of my long, drawn out reason of why I do believe that all of our folks should just be checking in. Should have somebody review their stuff. And if that is something that you guys would like us to do, I would be happy to do that. Either me or somebody from my team, we all do it the same exact way. If that's something that you guys would like on your Medicare, you can call us in our Pinehurst office at (910) 235-0812.
Mitchell Keiser:
Or you could give us a call at our Boone location at (828) 278-7814. One more thing before we hop into our next segment. I did also want to let our listeners know if you're interested in coming out to our next event that is going to be in Boone on November 27th, which is a Monday. We're going to be having that at App State University. If you guys are interested in that, we're going to have a 10:00 and a 1:00. The classroom is to be confirmed. So if you guys are interested in that, give us a call to reserve a seat. And I can't stress that enough. Do not just show up because we do typically fill a room and we will not be able to. The college won't allow us to have more people than we're allowed. So if you're interested in doing that, give us a call at (828) 278-7814. And again, that class is going to be taxes and retirement, which is our number one class where we talk about taxes, retirement strategies, a little bit of Medicare and Social Security. So if you're interested in that. Give us a call, and we'll be happy to meet you guys and teach you a little bit about those topics. But next year, Dwight, I would like to just hop into something. We have a lot of new listeners. Every week I see we get our our data come in and it says we average, you know, 30 new listeners a week. If somebody tuning in for the first time, they may be wondering why we host this show. Are we hosting it for just to talk to each other, to make people laugh? Why is it that we do what we do?
Dwight Mejan:
Well, we like to laugh, that's for sure. But money's a serious matter, as we like to say around here. Money never sleeps. So when you know what our money's doing. So the number one reason. Not necessarily in an order here, but one of the main reasons I should say that the Retire 360 show is on the air each week, is we want to educate retirees and pre-retirees by providing them basic, valuable information and insights to keep you informed on decisions and that affect your financial future. So we understand that knowledge is power. Although I would say that's part of the equation, I would probably lean to say that 51% is the actionable part of it, because I know a lot of folks that have a they're they're bright, they know a lot of things, but they don't execute. They don't either stick with the plan, they don't implement a plan. And going into retirement just blind and just doing the doing things the way you've always done it, or you've just saved a big bucket of money, but you're not doing tax planning. You're not looking at your income strategies, you're not looking at, you know, the way things come in the future, the big tax crunch that's coming, that could be a big mistake. So knowledge it is power up to a certain extent. But it's what you do with that knowledge. You know, that that really matters. Knowledge isn't you know what you know or how much you know. It's what you do with it. So but we don't want our listeners or our clients to ever feel powerless in retirement. That's number one. This includes this includes to Mitchell staying current with latest developments, with trends, best practices in retirement planning. The financial world keeps evolving and we don't want our listeners to be left behind.
Mitchell Keiser:
Yeah, absolutely. And I would just follow that up with we want everybody to be to address the retirement challenges that you are going to face, whether you're retired or whether you're about to retire. While we also offer smart strategies and solutions to help navigate those obstacles. An example what should you do with your 401 K? Should you roll it one should you roll it? If you want to do a Roth conversion, what's the best time to do that? If you guys have never heard of Irma, that is something you definitely want to make yourself aware of, especially if you are going to be doing any form of a Roth conversion close to retirement years. Or if you're like my grandparents or many other people, you guys want to also just be cautious if you're selling any type of property. And if you guys had rental income and you don't want to deal with the hassle anymore, if you're trying to just unload extra land, things like that, that will all throw off your taxes. It will increase your Medicare, things like that. We want you guys to be aware of obstacles and how you can overcome it, and how you can avoid it.
Dwight Mejan:
Yeah. And I would say number three, Mitchell, you know, why do we host this show each week? We want to empower smart financial decision making. We do that by sharing our knowledge and our expertise, as well as examples of how we're helping listeners and clients each and every week. You know, we call it kind of a roadmap to retirement. And folks just have to say this, too. To all of our listeners, I've been doing this for almost 31 years, a little over 30 years now. And I can tell you that the best classroom for me, the best teachers for me have been our listeners. And what I mean by that is I've learned a ton from some very successful people in three decades doing this show and meeting, you know, week in and week out with existing clients, with people who come, you know, in from our radio program, people who come in from our workshops. A lot of them have taught me some very good things. You know, we don't know everything. Okay. We know a lot. And as with any career, the longer you're in it, you're in it. Your knowledge should grow and your expertise should grow with time. We hope that's the case. I'd like to think that's the case with the time that I've been doing this.
Dwight Mejan:
But we do run. I do run into situations where I need to consult somebody on behalf of a client. We're not ashamed to tell somebody that if we don't have an answer, we'll tell you that and we'll get the right answer. I was just on the phone yesterday with somebody in an advanced market department, with a company that we work with, with a lot of solutions for our clients. And I was consulting with a tax attorney on a matter for an existing client, because it kind of is one of these complicated. Very large net worth and some of the things that they're trying to accomplish. We're starting to get a little bit above the scope of what had done with somebody of this caliber and brought somebody into the picture, and she is willing to get on the phone with a client next time they come in, which we're going to do and give us some direction, we're going to have to bring an attorney in on this as well. So I learned from some of these experiences as well, but it just continues to make us sharper for the next person that comes in that has a similar situation. So that's we want to empower that smart decision making.
Mitchell Keiser:
Yep. And we also want to promote financial literacy. A lot of times so many people feel like financial freedom is just out of their reach. And we're here to answer those questions and help you understand what you need to do in order to reach your retirement goals. We don't talk about this a whole lot, but we are members of coffee. And no, that is not the coffee that you drink though. I am a member of that coffee as well. Oh, he's a couple times a day.
Dwight Mejan:
He drinks. He can vouch for that. He drinks my coffee as well because I don't drink it. But he definitely has his share.
Mitchell Keiser:
Mine, yours and probably five other people. But we are members of coffee, which stands for Council of Financial Educators. And what that is, is a group of people that were a part of 500 and 1C3 that educates the public on financial topics, because that is at the heart of what we do. We like people to be informed. We like people to be aware. A lot of times that translates into us being able to help people, which we do like to do. It's been an honor to be able to meet the people in that way. But we don't talk about that a whole lot. But we are members of a 400 and 1C3 or a 500 1C3 called coffee. So if you haven't checked that out you could look us up on there as well.
Dwight Mejan:
Yep. And just to kind of wrap up little segment here why we host this show every week. For you very simply, folks, we want to serve as your trusted guide. Right? We all need guides in certain areas of our life, and we want to be a resource for you for any questions and helping you manage the complexities of preparing and thriving in retirement. You know, I think we all have a vision of what we see our retirement looking like, and we just want to be a part in that, to help guide people, to make those dreams become a reality. And that's one of the reasons that we do it. And folks, we're just a call away. If you want to reach out and talk to us about anything, get a hold of us. Our website is Retire360Show.com. I do want to direct you to our core values and Mejan statement. That is something we live by those values each and every week, and with each and every meeting that we have. And you can also call us if you're in Moore County, it's (910) 235-0812. If you're in the western part of the state listening, we're at (828) 278-7814 Mitchell we got listeners who are saying, wait a minute, Mitchell you skipped the quote of the week. I listened to your show. Hopefully not for this reason because we love Mitchell. We love his quotes of the week. But you got a quote of the week for our listeners.
Producer:
And now wholesome financial wisdom. It's time for the quote of the week.
Mitchell Keiser:
This quote of the week is brought to us by William Arthur Ward. And that is opportunities are like sunrises. If you wait too long, you'll miss them. I wanted to just tell you real quick this quote reminded me of. It's probably a morbid story, but I always tell my wife. So we live in an area called Whispering Pines in North Carolina. It's a really small village, but I swear it is home to probably 90% of the squirrels in North Carolina. There's just squirrels everywhere. There's white squirrels, black squirrels. There's squirrels that I swear they're cats sometimes they're just huge. I've never seen so many squirrels. Well, a lot of times my wife and I'll be driving. You'll see all these squirrels like, on the road, and they'll be, like, jumping back and forth, like, you know, they go this side of the road, this side of the road, this side of the road. And they jerk back and forth. And I always tell my wife that, you know, that's that's the problem with indecision is when you can't make a decision, you might end up squashed, because that is often a lot of times what happens. They get hit because they couldn't decide which side of the road they wanted to go on. But you know, I'm tying that into our quote of the week. So I think it's somewhat relevant. You need to be able to make decisions and you can't wait too long, because if you do wait too long, it will surpass you. The opportunity may be gone, or you could get run over by a car.
Dwight Mejan:
So thanks for that encouragement, Michelle. That's great. Hey, the thing out of the quote that that got me was the opportunity's word. Um, my dad who's who's passed. I think it's been 12 years now, but he had a quote. I think this was might have been Tom Edison, Thomas Edison. I think he had said this opportunity most people miss the opportunity because it's dressed in overalls and it looks like work. I think that was one that he borrowed from, and he had a lot of good sayings, but he'd take them from other famous people. But I think that was Thomas Edison. Don't quote me on that. But I think that's right. And then I thought of missing the shots you don't take. I'll ask. I'll ask you two guys. One of you, Sam, you might be more of a hockey fan than Mitchell. Who said you miss 100% of the shots that you don't take? I would think that would be.
Mitchell Keiser:
The greatest of all time. Wayne Gretzky. You are.
Dwight Mejan:
Correct. Wayne Gretzky, it's it's hockey season. I'm in full.
Mitchell Keiser:
I'm betting he googled that come calling him out. That was pretty that was pretty quick. And and that's not possible. Mitchell because I was googling to confirm, I was googling to confirm that Thomas Edison did say that quote. Dwight, you were correct.
Dwight Mejan:
Say that. Okay, I pulled.
Mitchell Keiser:
Up the Google rate as you said. That was like a of Sam doesn't know. I'm going to tell him.
Dwight Mejan:
It's funny, the stuff you remember my grandma used to say, the only difference between I don't know who said this, but she said, Dwight, the only difference between who you are today and who you're going to be five years from now are the books you read and the people that you associate with. So don't know who said that, but that was wise. I'll just put that on my grandma Dora. It was Dora Gruen, so maybe that was her famous line. I don't know. Sam will probably be in the background finding out if somebody said that so he can bring us up to date. But hey, we're going to keep diving in here. You've enjoyed where we're at so far. We're going to dive in. We get we've been getting a lot of calls from listeners who are concerned, to say the least. I wouldn't say fearful, but there's lots of things right now. I think we'd all agree in the markets. You know, one day we see it a little bit up and then we see it down 2 or 3 consecutive days. But at the end of the week we see our portfolio just kind of continuing, especially this second half of the year. We're seeing, you know, kind of the S&P is giving back a lot of their gains that took place. You know, from the first half of the year.
Dwight Mejan:
We got some updates on that. Mitchell is going to give you a stat here in a minute. But just to set up this next segment, we talk a lot on retired 360 show about your smart safe money and your smart risk money. The smart risk money is the money that you invest, you know, with an advisor, hopefully with a coach, with a with a guidance person that's understanding of your risk tolerance. And then they know how to build a good asset allocation portfolio that matches that risk. And you stay committed for the long run, making minor adjustments along the way. As time progresses and based on market conditions, we're going to focus a lot folks, on today's the rest of today's show on the smart, safe money, which we can say is the money that is principally protected. What choices do you have? Because that's where a lot of people are at now. We have somebody calling this week and said, hey, I'm loaded up on cash. Where do I go with the cash? You know, we're seeing yields coming up, you know, so we can go to money markets. We got CDs. The banks are offering some really good deals. And folks we've seen like in this last week, if you look back so far we've we've had the ten year Treasury eclipse 5%. And that's you know, without going into the the details of some other things that come off of that, the reason that the ten year Treasury is, is so closely watched, it's probably the biggest rate that people watch in all different segments and sectors is because it determines, in many respects, the 30 year mortgage.
Dwight Mejan:
It depends on, you know, car loans. If you're going to buy a car and you're going to you're going to finance the car. Everything is somehow interrelated to that, that ten year treasury. So it's being watched a lot. And when that has ticked above 5%, we're starting to see the opposite effect, you know, in the market with the equities. So people are concerned about you know about that. So it's great if you're a long term investor and you like bonds that might show some promise. But it's there's some other. Things that we need to be talking about. And that's kind of what we're dedicating the show to. So we're going to talk about smart, safe alternatives today okay. And to bank CDs. And we're going to talk about how to protect and how to grow to grow that money. So Sam you got a stat I think you might have pulled up there. Maybe you can just say something about that real quick before Mitchell chimes in here. You got a graph up there. You want to say something about that?
Mitchell Keiser:
Yeah, just taking a look at the ten year Treasury rates. And we're looking specifically at an index that simply tracks the ten year US Treasury. And like you said Dwight, very important metric for determining a number of different things that happen in the financial world, similar to how the S&P 500 isn't the end all be all in the financial world. But it's a thermometer, you could say, to determine how things are going on in other parts of the economy. So just looking at the ten year Treasury year to date, that is January 1st until the week of October 23rd. We're looking at a 28% increase. So that is going up in a hurry.
Dwight Mejan:
Something everybody's watching. Certainly those in the investment world are watching that that ten year Treasury watching it every day. There's traders that watch that thing and don't have their eyes off the screen watching that. So there's a lot riding on that. Mitchell you've got kind of a stat to start out with. Why don't you why don't we just kind of go back and forth with our listeners here and just talk to set this up a little bit? Yeah.
Mitchell Keiser:
So the markets have been fairly strong year to date, but just an interesting statistic that we wanted to share, because a lot of people are concerned about the market downturn over the past three months. So the S&P 500 has fallen about 7.5% since its most recent peak in July. So though you still see a lot of statistics that things are, you know, increasing, we have seen a significant dip in the S&P since July, which that wipes out about half the gain of the year. Right. Well yep.
Dwight Mejan:
It does. It's I'm going to have Sam maybe pull this up while I'm talking. And Sam you can maybe share with our listeners and pull it up here. Where's the Dow year to date through this week and where is the S&P. And we'll just talk about a couple of points behind that. But you know you likely received your third quarter account statements recently. And like so many others you know we know you're concerned about losing your hard earned money due to due to heavy stock market exposure, particularly if you're there. And I know, I know a stat I don't know where it's at today, but the first half of the year we saw the S&P up double digit. It was probably somewhere in the 14% range. But what a lot of our listeners are looking at is they're going, well, wait a minute. If the S&P is up that much, why is my portfolio even flat or maybe even it's down? Well, what was driving a lot of growth in the S&P 500 for the first half of the year was the Mega Caps. These big mega companies like Google, Microsoft artificial intelligence was where a lot of chips were being placed, so to speak, on companies and the S&P 500. Of those 500 companies, only five companies accounted for about 85% of the growth through the first half of the year.
Dwight Mejan:
The other 495 companies, you know, made up a very small percentage of that gain, made up the other 15%. So you got a heavy, heavy tilt and you got the S&P right. Now Sam's got it pulled up up 11%. So year to date. So that's through this week. And if you look at you know what Mitchell had just said 7.5%. The S&P has fallen in July. So when you look at the Dow Jones I think he'll get that up here in a minute. The Dow is slightly down year to date. And that Dow it's slightly up. It's a pretty flat year. So year to date it's 0.04% is what it's up. So the Dow has been flat. And again the Dow is the 30 largest companies. And that's probably more representative of the overall market of where a portfolio is. So if you're not heavy you know going after AI and some of the tech sector within the S&P 500, many of you are noticing just a portfolio that's flat or down slightly. And that's really more indicative of where the market is at overall. So Mitchell we're going to keep going on this segment here. But just just a little backdrop for where we're at so far with, you know, the two core benchmarks, I would say two, two big benchmarks that that people track or should look at.
Mitchell Keiser:
Yep. And then I would just follow that up with Dwight with it's important to protect a portion of your retirement savings as you get older, simply because as you age, you have less time to make up any significant losses. You guys have been you might have heard us say this before, or it's a theme of our office, the rule of 100. And what that signifies is your age. So it's 100 minus your age, but your age should represent the amount of money that you have invested in safe assets where your principal is protected. And then the difference between that and 100 is what you should be having in the stock market. So for example, I'm 27 years old. So that means that I should have 27% of my investable assets in principal protected products, and then I should have the remaining 73% in the stock market, whereas somebody that's 70 years old should have 70% of their money in principal protected products and 30% in the stock market. The reasoning behind that is, just as I said, because you have less time to make up for any significant losses. However, I will say with that stat, and just because of my age, because I know I'm on the younger end of the investing spectrum, that I'm probably mostly in principle protected, or I'm in fairly safe investments right now because I do believe, and just from what I've seen already happen, that there is a lot of volatility, I can't say that I know what's going to happen. I don't know what's going to happen. I just say that I personally waver on the side of caution. So, so me being 27, thinking that I have, you know, the next 40, 50, 60, 70 years at this rate to work that I would still keep, you know, most of my stuff in fairly safe products. Like you said, Dwight, there's CD equivalents. I know we're going to get into that in just a little bit here, but there are other safer ways that you can invest your money and do better than a CD. So I would I would tell our listeners to keep a special attention to that.
Dwight Mejan:
Well, on the the other obvious reason here, why, you know, we talk about smart, safe money and why it's important to protect and grow it as you move into retirement or those of you in retirement. You left the accumulation phase, which is building the portfolio. Now you're in this accumulation phase, which is made up of, you know, income, perhaps, that you are using to live on in retirement or forced income coming upon you through the required minimum distribution as you start drawing down your assets to receive that income, you know, you have to protect that money. Somebody in the office just here a day ago who said to me, you know, Dwight, I got my RMD and I hate taking it now because the market's down and he's speaking just truth that everybody should be paying attention to is his distribution requirement was calculated off of last year's balance. And now the market's done. And a lot of people wait to take their required minimum distribution at the end of the year sometime in November. Typically a lot of folks are taking it. And if the market continues to go down, you're just selling off more of those units if you're heavy in the market, which is why we recommend having a smart, safe bucket. Because if you own two IRAs, remember, if you got money in safe principal protection, where we're going here, that money, you can take it out all out of that bucket. As long as it's IRA accounts, it's a little different. If you own retirement accounts, we don't have time to get in there, but you got to take those in proportion to the money that's in that account. What's the last thing there, Mitchell you want to share? We'll dive into here what we're talking. Yeah.
Mitchell Keiser:
So lastly, I would say because of the rising interest rates, banks are able to offer more attractive CD rates. And CDs, by the way, are certificates of deposit. But you should know that the current interest rate environment has also made other safe money alternatives more attractive as well. So yes, CDs are safe and yes, there are some pretty high rates out right now. But there are other alternatives to that. You just have to know where to look and what knowledge that you need to make an educated decision. And we are going to get into that right after this break. Dwight is going to lead us through bank CDs versus other alternative assets. We'll be right back.
Producer:
You went away and left me long time ago.
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 Migeon is passionate about helping people protect and grow their wealth. Visit Retire360Show.com to schedule your free consultation today. It's a $1,300 value provided at no cost to you. Book yours now at Retire360Show.com. You're listening to Retire 360 with Dwight Mejan. Now back to the show.
Dwight Mejan:
All right. We're back here at the Retire 360 show. We've been talking about smart, safe money that that portion of your portfolio that is completely protected from risk. It's that principal safe money. Interest rates can't affect it like bonds. The market can't impact your principal. So we're talking about places for safety. And that's where we've been getting a lot of calls. Where else can I go besides the banks. We want to talk about bank CDs versus fixed indexed annuities. We want to talk about specifically the topic here is the financial reserve requirement of both. So we want to help our listeners understand what happens to their money when they place their savings in bank CDs. So when you deposit money with a bank, including in a CD, the bank is only required to keep 10% of that money in their reserves. This is the federal what's called the Federal Reserve requirement, while the remaining 90% of that money goes in to fund the bank operations, which includes loans that are made to other customers. So they have a 10% basically reserve requirement in comparison to that. When you look at an annuity, the highly rated insurance companies that issue fixed indexed annuities, this is another retirement tool for safe money protection. They're only required to they're required. I'm sorry to keep 100% of the dollars that you give them in the reserve accounts. So a question to ask our listeners, would you rather place your hard earned retirement savings with a bank that has a 10% reserve requirement, or with a highly rated insurance company with 100% reserve requirement? Okay, there's a big difference there on those two different institutions as far as what they're able to keep in their operations and what they have to set aside. So the other. Yeah, I've.
Mitchell Keiser:
Got a question for you. So that makes sense. Why would because I'm just thinking for myself, you know, as far as, like where my where my money is, the asset requirements that they're having, I think that's all good. But some of our listeners might be wondering, does a bank CD versus an insurance product, do they have different tax implications or are they the same? Yeah.
Dwight Mejan:
No, it's a good question Mitchell. Where we were going to go here next is talk about the tax implications. So when your money is in a bank CD you're required to pay taxes each year on any interest that you earn. Now of course here we're talking about funds that you would invest that have already been taxed. We're not talking about if you have an IRA and taking out a CD, you know, with the use of that IRA funds, that's still going to be ordinary income. But we're talking about money that you have just sitting in cash right now. You're going to have to pay taxes on that interest each and every, every year. In comparison, a fixed indexed annuity, your investment is tax deferred, similar to the 401 K, and you only pay taxes once you start to make withdrawals from that account. So a fixed indexed annuity could offer you some tax control. Because what a lot of people don't realize the good news right now there's kind of a good news, bad news of these higher rates that we're seeing. And the banking sector, some people today don't know how close they are to the impact on their tax return, something we talk about in our taxes class.
Dwight Mejan:
But your Medicare is taxed up to 85% of your payments are subject to taxes. Some of you that are now shifting into these bank instruments, particularly if you don't need the income that it's generating, you're just investing in something to try to stay ahead of inflation. You could be creating higher taxable Social Security income. Some of you who are on the more affluent side could be jumping into higher Medicare premiums, because all this ordinary income, which is what this interest income is going to be on money markets, on accounts that could thrust you into a higher bracket for both taxes as well as higher costs for your Medicare. So you got to be careful. Just because there's a higher rate doesn't mean you're keeping all of that money. You could be creating a problem somewhere else on the tax return, kind of a whole different subject matter we could dive into. But just be careful. Want people to understand that the annuity is tax deferred. The bank CD is taxable.
Mitchell Keiser:
Yeah that's good stuff. Well next year Dwight let's hop into our next segment which is centered around being cautious with bank CDs. Those that were listening may have thought, well, yeah, it's a 10% reserve requirement, but it's not like a bank's going to fail. Right? Well, that's actually not true. In 2023, there were quite a few bank failures. So you want to tell us about the first one.
Dwight Mejan:
Yeah I think it's just just it just fits in. Well with our segment here. You know, Silicon Valley Bank, you don't have to rewind too far. Go back about six months. March 10th. Silicon Valley bank many of you remember this was the 16th largest bank in the United States at the time of its failure. It was also the largest bank by deposits in Silicon Valley. So that's just one. You got another one match?
Dwight Mejan:
Yeah.
Mitchell Keiser:
So when the Silicon Valley bank failed on March 10th, signature Bank was a New York based full service commercial bank, which failed when customers were spooked by the sudden collapse of the Silicon Valley bank, and they withdrew more than $10 billion in deposits.
Dwight Mejan:
Yeah, for.
Dwight Mejan:
Sam's got a little chart up on the you know, for those of you that want to go back and rewind and look at the show, he's got a list of a bunch of banks and the date that they went under. There's a bunch of them listed there. And, you know, folks would just say, hey, we're not out of the woods yet. We've got a lot of particularly commercial real estate whose loans are coming due. And, you know, who knows what's around the corner for the banking sector. You know, we don't want to point out that there's a lot of volatility right now globally. You know there's there's regional wars. There's potentially wars we hope not that are escalating. So there's just lots to be cautious about. And that's our message here from our program to you our listeners is just got to be cautious. You know bailouts. March 16th 11 of the biggest banks in the country announced a $30 billion bailout package for First Republic Bank. And that was in an effort to prevent the California based bank from becoming the third bank to fail in less than a week. So we had other banks come to the rescue.
Dwight Mejan:
And you might wonder, why would banks do that? We know the government's printing more money and keeps bailing people out, but think it just speaks to the kind of the era that we're in, not just the bailout era, but we're so interconnected right now, not just globally. You know, the markets are all globally connected, but the banking sector. You know, banks hold a lot of each other's assets, you know, so if if a big bank goes out, it has a ripple effect and a tumbling effect on other banks. So that's why we're seeing more and more bailouts. That's why, you know, the collapsing we're glad it's kind of subsided a little bit. But there's a lot of analysts who would tell you that we're not out of the woods yet. So historically, if you look at the 20 largest bank failures in US history, ten of them happened between 2008 and 2010. And the collapse is at Signature Valley Bank and signature Bank were the second and third largest bank failures in US history. And think that just brings us to the warning, Mitchell, that you want to share with our listeners.
Dwight Mejan:
Well, yeah.
Mitchell Keiser:
This is your your warning. So if you guys have more than $250,000 in any bank at any time, you need to be aware and make sure that your bank, first of all, has FDIC insurance. I would never bank at a bank that does not have FDIC insurance. What that does is it covers you in the amount of $250,000 or less. If you have more than that, you are not going to be covered under the FDIC. So the Federal Deposit Insurance Corporation, which is what FDIC stands for, insures deposits of up to 250,000 per depositor per insured bank. So again, do not hold more than $250,000 of deposits at one bank at any time.
Dwight Mejan:
Bank CDs versus fixed indexed annuities. The other topic we want to address here is inflation protection. Let's talk about the differences for that for just a moment. So while bank CDs do offer some predictable returns, many retirees as they should be here, are looking for both protection and they want growth. This is because inflation has been eating away at American's buying power for the most most of the last four decades and has picked up in a bad way since 2020. So just keep in mind that certificates of deposit, their short to medium term investments, lower penalties annuities are some longer term investments. They pay higher interest, typically the longer out you go. But there are you know, there's 2 to 3 year term annuities that match many CDs. You can get five year products. There's some good ones out there as well for that. So I just encourage our listeners, if you want to know the differences right now between some of those products, you know, we'll be happy to address those with you. But the other thing is, you know, fixed indexed annuities allow investors to track the performance of a stock market index. So it's giving the investor equity exposure, tracking an equity index without subjecting their hard earned money to stock market risk. Some fixed indexed annuities even have attractive features like bonuses and guaranteed simple interest roll up rates. So we might get. If we have time, we'll get into a specific topic or a product where we can give you some ideas of how that works. Yeah, I can.
Mitchell Keiser:
I can give him a visual. Dwight, before you hop into the next segment. So for example, with the S&P that we used earlier, we had a couple clients throughout the year moved to an insurance product that has S&P. It has an S&P derivative in it which means it derives its value from the S&P. So what that looks like is their principal is protected. But they can capture up to in this case it was 13% of the gain. So let's just say you were in that in the beginning of the year the S&P went up 18% and now it went down 7%. So that's 11%. So if this would have been the person's contract you would have ended. They would have locked in at that 11% because they it didn't go above that 13 if it goes to 15 they just get 13. However, if the S&P would go down before the end of the year, let's just say everything turns upside down and it tanks where if they had their money in the market, they would have suffered a significant loss where now, because their money was in that insurance product deriving from the S&P, instead of actually being in the S&P, their principal would be protected up to $300,000, backed by the guaranty Association. Just wanted to give a visual of what that looked like before. You know, it's great.
Dwight Mejan:
It's, you know, the fact that you can take that gain and lock it in a share an article real quick with you. A Kiplinger's had an article out several years back where a researcher by the name of Jack Marion studied $1,000 investment on the S&P 500 from 1960 to 2010. And he wanted to look at three different scenarios. He wanted to look at investing and in the S&P with no losses but no dividends. I'm sorry. Tracking the S&P but with no dividends, that $1,000 in 50 years would have been worth around 18 grand. The second scenario, what he looked at is he studied the S&P with dividends fully reinvested, and it was worth about 80,000. So instead of 1000 to 18,000 and from 1000 to about 80 grand. And then in the third scenario, he took no dividends but no losses. So the year where the market went down on the S&P, you didn't suffer losses, but you didn't get dividend participation. That $1,000 became $179,000. And the point of his whole article where losses matter and they matter huge in retirement. Okay, so building a smart, safe retirement plan with fixed indexed annuities, they're fixed indexed annuities. Folks are insurance contracts. They provide a guaranteed income stream for your retirement. But let me say this about that. A lot of folks listening now are thinking annuities are are income only. Most people today who own annuities, whether they be fixed, indexed, like we're talking about here, are the smart, safe money.
Dwight Mejan:
The majority of those contracts never become income for people. They're using them as deferred savings vehicles just like they would a CD. So that money is accruing. They maintain control of the money. It's just linked to certain indexes like the S&P 500. They're seen as an alternative to bank CDs or traditional bonds, and they provide a way for investors to protect retirement savings from volatility. As we've been talking about, they're also designed to to provide protection from market downturns while providing potential for growth. So the three main benefits of fixed indexed annuities are protection from market volatility. That's number one. You know the fixed indexed annuities provide protection from market volatility. Since the annuity is linked to the performance of an underlying index like the S&P 500, for example, the income is not directly affected by short term market fluctuations. This makes them an attractive option for investors who are looking for a steady stream of reliable income. The second feature in benefit would be tax deferred growth. Tax deferred growth means earnings on the annuity are not subject to taxes until you start to make withdrawals. Okay. And then the third benefit would be the lifetime stream of income. But you have to elect to trigger that income. So don't worry about, you know, breaking your budget. Just enjoy that retirement income and you can never out outlive it.
Mitchell Keiser:
So do I have a question for you on the topic of lifetime income streams? I know you hate doing this, but I'm going to ask you to toot your own horn here. You we had somebody come in the office just this past week who elected a pension through a separate third party. They had a pension from a past employer or something. They already had it in force. They were receiving the income. And you did a pension analysis, and you just want to share with the folks what you were able to do with them and how you changed their situation even though they already started it.
Dwight Mejan:
Yep. What had happened, Mitchell. With this particular client? They'd been in. They took a lump sum option, and they still had it available through the pension stream that they had. They actually had it in a variable account and they were guaranteed an income. They were taking income. It was $10,400 per year paid out on both of their lives. That was the annual amount based on the lump sum of money that they put in seven years ago. They could surrender that lump sum today, even though they've been getting consistent income from it. I took that income amount that they could surrender, and I ran a new pension quote for them on it, and that income went up about $900 a month. We were able to take it from 10,400 to 11,300 and some change. So it went up not quite $1,000 more for their payment, but just a just a big difference. And it was just repricing the whole the whole scenario because we shopped it around through some other companies and they still maintain control moving forward with that lump sum of money.
Mitchell Keiser:
So is that so last question here. Is that always the case. Do you always maintain control of the principal and every annuity contract.
Dwight Mejan:
It's not true of every contract Mitchell. And it's important our listeners understand that. That's the the thing they need to make sure of is if they're looking to max out income, it's not always giving up control of using that lump sum of money during your lifetime. If you if you go in and take money out of it and you set it up for lifetime income, they're going to adjust your payment. If you go in to take more than what they're guaranteeing. But the the ones that we use with with clients and people who are looking for lifetime income, 100% of the ones that we use, our clients maintain complete control of that lump sum balance throughout their lifetime. And when they pass away, there's a balance that's left in there. If there is a balance left that transfers to their beneficiaries and we have a, you know, we have a free what we call an annuity x ray for listeners who have questions on this or who are wondering, you know, my pension hasn't kept up. Some of you have pensions where you you forfeit the lump sum of money. So I just want to put a word of caution out there because somebody listening to this right now, this is just for you. You're ready to retire, you're retiring from the state, and you're going to pick a pension option for income. Before you sign the line on that, pick up the phone and call us because we're going to shop it, not just with the one company your employer is using.
Dwight Mejan:
We're going to shop it with all companies. And folks, here's the biggest difference. Just pay attention to what I'm telling you. This is going to save somebody a lot of money, and somebody may be making a bad decision. If you take the option through your employer, more often times than not, you're electing a stream of income and that's it. There is no lump sum. So if you take it and you die, your spouse might get a receiving payment monthly. But there's no more lump sum money there. What we're going to show you is the opportunity to have this an income stream, but continue to remain and have control of that lump sum dollar. That's a huge distinction between the traditional pensions today that people are choosing, and the opportunity to go outside the company and take a lump sum. You've got to find out if your employer allows a lump sum. But I would tell you most of them do. Your employer may have the best option, okay. But you don't know that until you have a fiduciary like us. Run that analysis for you. And folks, this is math and science, right? This the numbers are not going to lie. We're going to show you in black and white. We're going to show you the differences and let you be the judge of whether your employer is offering the best pension or whether it can be beat out on the open market. And that's what we're going to look at.
Mitchell Keiser:
Yeah. That's good. I just want to remind our listeners one more time before the show concludes here, that if you are in the Watauga or Avery County area and you would like to attend our class on taxes and retirement, that is not going to be until November 27th, which is a Monday. We are going to be doing that at App State. We're going to do a 10 a.m. class and a 1 p.m., and that is going to be at App State University. If you'd like further information on that, or if you would like to sign up, give us a call at (828) 278-7814. If you have any questions on our show, anything we've talked about or would like further information on Medicare, you can give us a call at that number or at our Pinehurst location, which is (910) 235-0812.
Dwight Mejan:
Yep. Folks, just want to thank everybody for tuning in to this week's show. We'll be back next week. And when we do, I'm going to bring our listeners because I know we're going to get some calls on this. I'm going to bring you a solution to a specific pension solution product. Next week I'm going to give you the name of the company. I'm going to talk a little bit about the specific product. I think it's one of the the hottest products out there for someone who needs a lifetime income. So I'm just teasing you a little bit with that. So tune in next week. Same time, same channel and we'll get into that next week. But until then, I hope everybody has a great weekend. And thanks for sharing some of your weekend with us. 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 offer 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.
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 thousand hundred dollars value provided at no cost to you. Book yours now at Retire360Show.com.
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