On this week’s show, Dwight explains how you can make the most of your 401k savings and take advantage of additional investment options that are outside of your current or former workplace plan. Then, he and Mitchell discuss how you can get more proactive about your retirement.
In 2023, we want you to be prepared, not scared!
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Questions? Call Dwight Mejan today at (910) 235-0812
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5.5.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Producer:
Welcome to Retire 360 with your host, Dwight Mejan. Dwight is a licensed fiduciary and financial advisor who always places your needs first. Dwight works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here's Dwight Mejan.
Dwight Mejan:
Welcome. My name is Dwight. I want to welcome everybody back to the Retire 360 show. And we are glad to be back with you, our regular listeners. And I'm sure we maybe have some first time listeners. This is brought to you by 360 Capital Management and we broadcast in the western part of the state up in the Boone and Banner Elk Blowing Rock Sugar Mountain Area. So welcome to listeners there. We're rather new in this particular area, but then we have our listeners long time down in low country as we say it. So we want to welcome all of you back to the show and we got a great show today planned for you talking about being proactive and not reactive. This is a show about your money choices that you need to be making and should be making regardless of where you're at on this thing we call a retirement journey. But we're your we're your guides. And much of what we do on this show is put together, believe it or not, by you, the listeners, you let us know what is impacting you and what you want to know about. So we'll be getting to some great things on today's show that is driven by calls and emails and things that we get. So on that note, if you want to contact us, you can reach out to Retire360Show.com you can type some messages into us there and also feel free to call us at (910) 235-0812. That is the same number for our listeners in the western part of the state. We have an office that we meet with clients there and people who listen to this show in Banner Elk. And then we are located here in Southern Pines, North Carolina as well. Alongside me is Mitchell Keiser. He is my son in law. And then we have our faithful executive producer with us today, Sam Davis. Of course, we appreciate all he does behind the scenes. Mitchell, how's the week been? It's been a busy week. It's been a busy month, actually. I can't believe we're already in the month of May.
Mitchell Keiser:
Oh, yeah. It's been pretty busy for those that are just now tuning in or have just been listening to us for a couple of weeks. We are educators at the heart of what we do, and we've been doing a bunch of educational events in our community. So yeah, it's been pretty busy for sure. So we just finished up one here in Pinehurst and Sanford and we're getting ready to head up to the High country. So yeah, we're looking forward to that and making our presence a little larger out that way.
Dwight Mejan:
The Traveling roadshow, isn't it? Lately.
Mitchell Keiser:
Literally, it seems like it.
Dwight Mejan:
But no, you know, it's great. Mitchell For that, we can get out and meet the listeners. I know we had an opportunity to do that this week. Many people who've been listening to us on the radio just decide, Hey, this is a topic that's near and dear to me, at least based on the stage. They are in this thing we call retirement or the retirement journey. And we got to talk about Social Security and why that's all important. As far as the timing of that decision, there's so many factors that weigh into that. It can boggle us our mind sometimes when we start to think about it. But, you know, we've been doing it for a while, and it's a great way for us to connect with the community and also provide a value to an ever changing landscape for retirement. So that and then we did the taxes and retirement that always brings a big crowd out. And hey, let's face it, people today want to know how to, you know, pay their tax that's due, but they don't want to leave Uncle Sam. A tip, right?
Mitchell Keiser:
Absolutely. And for those of you that are up in the high country, we have been doing quite a few events there. We like to do them primarily at the Watauga County Library. If that is something that you guys would be interested in. We do have two classes coming up and we are going to be teaching taxes and retirement. So if that's of interest to you or you want to know how to better utilize your taxes and retirement, I think everybody wants to learn how they can pay less, get updated on some laws, some things that have changed just within this past year. If that's of interest to you, we are going to be at the Watauga County County Library May, Monday, May 15th at 11 a.m. and Tuesday, May 16th at 11 a.m. Be sure that if that's of interest to you, that you give us a call because our seats do fill up and our office number is (910) 235-0812. Again, our office number is 9102350. 812. And if you're interested and you feel like coming out, that would be great. We'd be happy to see you. Just give us a call so that way we can make sure that we'll have room for you.
Dwight Mejan:
Yeah, appreciate that, Mitchell, sharing that with our listeners. You know, the the tax return is, as we call it, often is the you know, it gets more complex in retirement. I think people think they're entering into the simpler years because they're starting to do things on their timetable, you know, on their schedule. And I think it just kind of, you know, people just think, hey, the tax situation should get simpler. But unfortunately, it doesn't because we're working with different buckets of money, not just income, ordinary income. If that was all it was, as we teach in that class, it'd be fairly intuitive and pretty easy to do tax planning. But it does get more complex in retirement and we cover all those strategies and ways that people can prepare in advance for the tax time bomb. And we've got a little bit on today's show, just a little touch, I should say, of what we cover in that class and we'll be talking about that on today's show. But with that, again, just want to welcome all of our listeners today. Welcome to all of you. First time listeners, if you're new to the show or you want to catch up, maybe you haven't listened to us in a while. We do have a podcast, so anywhere where you download podcasts, you can go there just in the search screen, just type Retire 360.
Dwight Mejan:
You can catch up on some of the previous episodes of our show. If you want to get caught up a little bit and hear some more, you can find topics there that are relevant to your situation. Also, we have a YouTube channel. You can go there as well and just type Retire 360 and don't hesitate ever to reach out to us. Retire360Show.com and again our number here, if you have questions on anything we touch on today or anything for that matter that is plaguing you right now, you reach out to us at (910) 235-0812. We look forward to talking with you. Also just want to remind our listeners periodically put out some material free reports that we hand out this month. We have 23 cost cutters for 2023. Just some great ideas to help curb the expenses a little bit in those budgets. It's filled with great ideas for hanging on to more of your hard earned money. And it's yours today. If you want to reach out to us and get that, we'll be glad to send that to you. We can get it to you in a PDF file. If you book an appointment with us, we'll be sure to get that to you as well. But just a brief overview of today's show. We're going to have our Quote of the week here in just a minute by Mitchell.
Dwight Mejan:
One of the things we're going to talk about we didn't get to in last week's episode, I'm going to talk just briefly about if you are recently changing jobs or maybe you recently changed and you left some retirement money there and a 401. K or 403 B or 457. I just want to provide some tips and ideas for you there as well as those who are still working funding those same plans that'll pertain to you possibly as well. Something I'm going to talk about. We're going to talk about the bad money habits that could impact your retirement. Just things to watch out for. We kind of did the flip side of that last week. So we're going to get into the bad money habits this week. And what's it like to work with us? We'd love to turn happy listeners into happy clients, so we'll talk about that and then how to be proactive about retirement. These are seven strategies for success we want to get to on the show today. And then also, if we have time today, we're going to talk about preventing the retirement tax bomb that could affect you and your retirement, how to take advantage of some tax free options. So, Mitchell, why don't you kick us off here with the quote of the week this week?
Producer:
And now for some financial wisdom, it's time for the quote of the Week.
Mitchell Keiser:
Yep. So this week's quote of the week is brought by Stephen Covey. I might have butchered that pronunciation a little bit. Covey All right. That was right. You could tell. So he was.
Dwight Mejan:
Not Mitchell's generation, but good guy.
Mitchell Keiser:
Now he he deceased in 2012, but he was most known as an author. His biggest book was Seven Habits of Highly Effective People. I've heard of that one. I don't know. Have you ever read that, Dwight?
Dwight Mejan:
Yes, I have. Very good book. It was a classic. Still is.
Mitchell Keiser:
So the quote of the week this week is I am not a product of my circumstances. I'm a product of my decisions.
Dwight Mejan:
Good stuff.
Mitchell Keiser:
So yeah, he not playing the victim card there. And I like that because, you know, we we don't always get to choose our circumstances, but we get to choose how we respond to them. So that's good.
Dwight Mejan:
Absolutely. You know, we when I saw the quote for this week, Mitchell, I was just talking about with somebody before the show about just how much I think we underestimate the importance of decision making. I think of a line I think it was Roy Disney of Walt Disney World that said this. He said, once we know what our values are, it's very easy to make decisions. And, you know, I've had the privilege of working now for almost three decades. This August will be 30 years working as a fiduciary. I've had the privilege of working with some very, very successful people from a worldly standpoint, have done very well in life. And I can tell you just through observation as well as conversation with these people, a lot of them are very, very crystal clear with their goals. They're clear with their objectives. And they know what their values are. And on the on the flip side of that, you know, we've come across a lot of people in the time that I've been in business and guiding clients. A lot of people struggle in the decision making process, especially some of the big decisions.
Dwight Mejan:
You know, when you're dealing with big amounts of money or, you know, just bigger decisions that are at stake for the retirement plan, you know, it gets hard to make those decisions when it's when you're unclear of what the goals are and also what the values are. And one of the things I love about the work that we do is we help people identify what they value just through the the searching process, through the questions that we ask. And I think it does help isolate what the core issues are for people. And then we just present the options to people. And, you know, if there is a decision that needs to be made, a lot of times they can make it easier. So it's not just about understanding what your finances are and what your where your money is at. It's understanding what do you connect that to in terms of what's important to you. And I think that quote of the week just lays that out very well out there.
Mitchell Keiser:
So, yeah, absolutely.
Dwight Mejan:
Appreciate you sharing that. So want to jump to last week's show. We didn't get to this, but want to just briefly touch on if you've recently changed jobs. We get calls periodically here at the office of people who have questions about retirement plans. We cover this in some of our events. If you leave a company or you know you're planning to leave a company and you've got some retirement there, you know, by all means it's good to, in most cases, get those funds out of there. And want to just address listeners for this week's show who are listening right now that are in that situation. Perhaps you've left a job recently, you've moved to another job, perhaps you've retired and you just don't know what to do with that money. You know, a lot of HR departments, they're not following you around and advising you on what to do with this money that you have in the 401. K or the 403 B or 457. So we just want to cover that, that, you know, before you leave that position or if you've already left, it's very important that you read the 401. K plan summary. It's called the SPD. It's the acronyms for the summary plan description. And in that it gives you what you can and can't do. And some of these guidelines are dependent upon how old an individual is.
Dwight Mejan:
So if you've left, you've been terminated or you've left voluntarily, that gives you rights to take all of that money, of course, and take it out of that plan. And you can roll it to an IRA. That's a tax free rollover if you have pre-tax money in that account, if you have Roth monies in there as well, that can be rolled to an individual Roth account. And why is that so important that we are even bringing this up? Well, number one, you know, 401 K's are great places. And I think one of the things that makes them great to invest in is most people have some level of match today on that plan where the employer is matching some percentage of your contribution. So you want to take advantage of that because, you know, we call it free money, but it's really not free. It's it's free in the sense that you've earned it because you've worked there. But nonetheless, they're giving you money based on how much you put in. So for that part, we love the 401. K, but when you leave or have the opportunity to get it out of there, it's a great idea because there's more investment choices outside of that plan than there are inside the plan. Right? You have only so many choices inside the 401. K if you get it to an IRA, a plethora of investment choices open up and many of which you don't even have available in your plan.
Dwight Mejan:
For example, if you want to you know, this comes on the heels of our Social Security class this week. Social Security makes up about 40% of a retirement income, and most people who retire need somewhere between 70 to 90% of their pre-retirement earnings when they get to retirement. That's a lot of money. And Social Security only covers about 40. Percent of let's say that 70 to 80% that you need. So where is that other guaranteed income? And I emphasize the word here guaranteed. Where is that other guaranteed portion of income coming from? It's great that you worked hard. You saved a lump sum of money, but you can't count on that being guaranteed if it's in the stock market because that moves up and down. So there are instruments and vehicles that could be used. We won't get into those in this segment, but you can roll that 401. K into instruments that help grow that money, but also give you an off ramp down the road to start turning that money into consistent guaranteed income while you also control that lump sum of money where it's parked. You can't get that in traditional 401. K and other retirement plans. So we just want our listeners to know that summary plan description will tell you what you can do with it, and you've got to decide what to do with that money.
Dwight Mejan:
We wouldn't advise that you leave it there. If your investments are performing well, you could keep the funds in the account, in the account. They're not required to go out in most cases. You might want to leave it where it's at. But if you roll those funds potentially to a new employer's 401. K, that is another option that you have as well. Again, you probably won't have as many investment choices in that, but that is an option that you have. But particularly older workers, if you're listening and you're you know, you've already left the company and you don't know if you're going back to work, you will have more options and may want to consider more of a defensive strategy as you begin to plan for your retirement. Okay. And one last thing on this I want to mention. If you're looking at an in-service distribution, just this may be a new phrase for people. You might still be working. And there's a key age here, 59.5. So if you're nearing 59.5 or you're still working and you're 59.5 or older, particularly if you haven't been real happy with the investment choices in your 401. K You know, we hear this all the time. People say, well, I don't want to put it real aggressive and I don't really like the rate of return that I'm making inside the the fixed bucket.
Dwight Mejan:
I just don't have anywhere else to put it. Well, if you're still employed, you might be able to do an in-service distribution that's also in that document called the Summary Summary Plan Description. Your employer may allow you along with that custodian to roll that money out into an IRA while you're still employed and continue to receive that employer match on your contributions. And that would offer you a lot more opportunity. So maybe you don't get into reading that stuff. But if if I've talked about something here that we've touched on and you want to reach out to us, we welcome your call. Just reach out to us at (910) 235-0812. And also you can go to Retire360Show.com and just reach out to us there, get on our calendar and we'll be happy to explore those opportunities with you. But with that, we're going to jump right into our next segment here and we're going to talk about how to become more proactive and less reactive about your retirement. So, Mitchell, you got to kick us off here. We got about a few things here we want to go over, but maybe you could start out sharing with the listeners some ideas here about being proactive rather than reactive.
Mitchell Keiser:
Yeah. So our first tip is living paycheck to paycheck. I know if you guys have been listening to us, one of our big sayings is live, live within your means and save for a rainy day. I know that's something we here at our office quite often. And just a fun statistic for you guys. About 60% of us adults are living paycheck to paycheck. Too many people spend every dollar they make right after they are paid. And I will tell you, we've had the opportunity in what we do to help people that are very fortunate that are probably in that upper 1%. And I think it's also pretty fair to say that we've also helped people that are in the lowest percentile of income as well. So yeah, it's it's pretty accurate to say that at least 60% of people are living paycheck to paycheck. I know something else we say here is, you know, a lot of people are broke just at different standards of living. And that is true also. People just you know, they may make more, but they may have a bigger house or a nicer car. So those monthly payments are just higher. Now, if you guys guess, our first tip to that is to budget pay for things in cash. Kind of a little bit of the Dave Ramsey method to get yourself started out. But in the long run, we don't advise people to be living paycheck to paycheck, get out of that cycle as quick as you can.
Dwight Mejan:
Yeah, absolutely. You know, we're talking here, Mitchell, about bad money habits. I may have phrased that a little wrong, but, you know, last week's show, we highlighted some of the we highlighted some of the most productive habits that wealthy people use to protect and responsibly grow their money. What we're talking about here is we're shining a spotlight on some habits to watch out for because developing one of these bad habits, it could put your future and your retirement at serious risk. So definitely don't want to be living paycheck to paycheck. But number two here is carrying credit card debt month to month. Credit cards generally, as most of us know, hopefully they have really high interest rates. Annual percentage rates are typically between 20 and 30%. In addition, paying high interest and fees carrying a balance will have a negative impact on your credit score, which could prevent you from borrowing money or receiving receiving more favorable rates. When you have to purchase a home or you're buying a car or or just to invest if you own a business. So credit card debt is a major, major source of financial stress in the United States. As we just mentioned, living paycheck to paycheck is no way anybody wants to live. So if you're carrying credit card debt. Work on paying those off as soon as possible. Start with that highest interest debt first and then work your way down towards being debt free.
Mitchell Keiser:
Yep, those are some good tips. Number three that we're going to go over is having no emergency fund. That is a very bad habit. We recommend here that you guys have six months of your income set aside in the case of an emergency. According to a study by the Federal Reserve, only 40% of adults said that they would have difficulty covering an expense of $400. So 40% of people say they would have trouble coming up with an unexpected expense of only $400. And 12% of people said they would have to borrow or sell something to cover that expense. If you're listening to this show and you're young or you're old, the same thing applies if you're in your you know, if you're a teenager and you're listening to this, you need to start building that emergency fund now because a rainy day is coming. And if you are older in this show, if you're farther along in years, you know, 30 plus, you know that that day is going to come and it'd be wise to do that. Now, you know, if you're listening to this and you're over 50 or 60 years old and you've never set aside something for an emergency fund, it's never too late to start again. We just recommend that you have six months in a liquid emergency fund, that you can cover those unexpected costs because unfortunately, it does happen. And we see it all the time here at our office.
Dwight Mejan:
Absolutely. You know, we had a Lady Mitchell that came up to me several people did. But a lady specifically that stood out to me this past week, she came up after the event was done. And she she was at both of our classes that we held on Social Security and in taxes. And she she was not quite in tears, but she said, you know, I wish I would have had somebody, you know, a couple decades ago like you. And it wasn't making that about me. But she just said the information that you guys provided today would have helped me and my husband tremendously. Her husband had passed away and she was a widow and, you know, not left destitute, but just not left in a great situation. And, you know, that road to someday, I think it was Tony Robbins said this The road to someday leads to a town called Nowhere. And the sooner you start, the better off you're going to be. And that leads us into number four is knowing where you spend your money. You know, there's there's so many places today. If we're not careful where we don't we don't know where the money went, you know, and that's why it's so important to have clear financial goals and to have a have a have a budget and have a plan in place. You know, people don't plan to fail. They fail to plan. And, you know, at a minimum, you know, we like people to have a budget of monthly needs and wants so they can effectively tell every dollar where to go.
Dwight Mejan:
You know, we talk about that a lot. Every dollar has a place. It has an assignment. You know, I like to use buckets even in my own, you know, financial planning and my own finances. You know, I have money in buckets, figuratively, of course, but I know what each bucket is doing and what it's supposed to do. You know, there's long term money. We talk about buckets all the time and some of the courses that we do. But once you get if you're not a person who's listening, that's been in the habit of setting goals and having it, I can tell you, you know, just like anything, after about 60 days, you know, once you have goals and you start seeing the accomplishment of some of those goals, that starts to form habits. And those habits will determine ultimately your future. And the. Outcome of whether or not you live the retirement that you envision or whether you look back and have regrets. And certainly one of our goals on this show is to help people look back and be able to identify, hey, you know, I made some important decisions back then and was able to stick to them. I built a plan and got ahead. And that's one of the, you know, the outcomes we certainly are hoping from from doing this show. But be on the lookout for recurring charges, of course, from monthly subscriptions and services. You know, that's the one thing it's great today to have the convenience of bank drafts and credit cards.
Dwight Mejan:
But I can tell you I look less and less on that, partly because my wife kind of handles that. But I don't look at those statements as frequently as I used to. And it's very easy sometimes to have something on there. And I look at it and I go, Man, I don't need that anymore. What's what's that doing there? So just be aware of those types of charges. Make sure you review the credit card statements, review your bank statement. You know, you could have unnecessary charges on there that you're not aware of unnecessary costs. So just be on the lookout for that. Part of having a a budget is having a plan for any extra money that you bring in. Okay. If you receive a a bonus from work, it's really easy to spend that money without any consideration for some of the larger goals that you might have. A better idea is to have a plan for that extra income. So, you know, for example, if 25% goes to savings for your retirement and 25% goes towards a family vacation fund, the remaining 50% goes toward paying down the mortgage. So it's good to have that set in place so that when that extra money comes in, you already know where it's going because it's already been decided upon. The decision was already made. I think it was John Maxwell that said successful people make important decisions early in life and then they manage those decisions the rest of their lives. I think that's just great advice.
Mitchell Keiser:
Yeah, no, that is good advice. Number five, a big mistake that we see from people is not wanting more out of their careers. I do think everybody at some point in their career, you do outgrow a position. And that's not to say that you can't be happy where you're at, but a lot of times people will hit an income gap where they can no longer make any more and they don't seek to do more outside of their career. Just some tips that we would recommend for people that are in that type of situation. There are some employers that will offer a four day workweek where maybe you can work four, ten hour days to get your hours in. That could free up some time for a side hustle. And then that leads me into another tip that we have is coming up with a side hustle. If there's plenty of things that you could do on the side just to make money, they're not all entrepreneurial. There's some things that you could just, you know, work part time. If you'd like to go to the gym, maybe you could work part time at the gym. If you like to garden, maybe you could get a job gardening at Lowe's or something like that to use your interest to help generate you more money.
Mitchell Keiser:
Now, if you're in your if you're in your retired years, your golden years, and you could use a little bit more income, maybe pick up a part time job in one of those areas of interest. There's lots of ways to make money out there. I know it's pretty popular to volunteer once you're retired, which is awesome. We definitely encourage you to do that if you're able. But you know, you could almost do a very similar type of work but also get paid for it. So if you need the money, just get a job, get on the payroll and you'll start making money. But if you are somebody that is interested in career growth, you know, make sure that you're asking yourself, what am I doing? Could I be doing more? Or maybe it's time to switch companies, Maybe, you know, you've outgrown a position there or they're no longer going to help you and your income keep up with the cost of everything. So all just things to keep in mind. But yeah, don't don't become complacent with your income.
Dwight Mejan:
Except Mitchell. He can't change jobs. I won't let him. So you got to stay right there.
Mitchell Keiser:
So you better pay me more then.
Dwight Mejan:
Right. We'll have that discussion at the break. We'll have a break here. Just a minute. So, hey, number six, not knowing how to minimize taxes, this is a this is a hot button. It's a passion of mine because, you know, the Good Book says we got to render to Caesar what Caesar's we believe in paying what we owe. But as I say, many a time people who listen to this show or know me, you don't have to leave Caesar a tip. And many people unknowingly, some are partnering with the IRS in a huge tax bill that's that's coming down the road. It's just lurking. They just don't see it yet. But we're talking here about minimizing taxes. Don't just if you e-file next year, just don't check the box and e-file again. Consider working with a tax professional who can consider your unique situation. Answer your questions to help save on taxes. You know, I always say this If there was an opportunity, let's say just as a as a low number, let's just say you paid $1,000 in taxes last year. You you're going. Yeah, I wish, but I'm just using a round number here. If you paid 1000, what if you had a CPA tell you, hey, I could eliminate, you know, the taxes that you're paying.
Dwight Mejan:
But, you know, my work to do that is, you know, 400 bucks. Okay, well, you'd still net a pretty good savings there, so why wouldn't you do it? Right. So maybe time, if you haven't consulted with a tax professional and you're paying income taxes to get some tax advice. You know, one of the things that we do, we're not tax advisors, but we do work with tax mapping, which is taking your investments and looking at your income streams and seeing if there's more efficient ways to harvest that income through your portfolio to save and minimize some of the taxes that you are paying. And we do that for listeners of this show complimentary, We will schedule a time with you. We can do it by Zoom. We can meet you in one of our offices if we're if you're out in the western part of the state near the Boone Banner Elk area, we can schedule a time with you there. We can do a zoom call, meet with you here in Southern Pines. We'll lay out that tax map for you. And you know what? Here's the good news. You'll get a free consultation telling you that we don't see anything from an investment strategy that you could use or we'll tell you there is something you can do.
Dwight Mejan:
And the good thing is you're not going to pay anything for that. It's the investment of your time. That's the opportunity. Cost is just meeting to find that out. If there's opportunities, a tax pro can help. You also legally claim all the available tax deductions and the credits that you may not be aware of. So just trust the experts when it comes to something as important as your money, and then also make sure you're utilizing the two types of tax free investments. Roth IRAs and life insurance. We talk about those quite a bit on the show. Just know this about Roth IRA accounts. That Roth account has to be in existence for five years before you begin to pull money out of it. So if you're planning to do any kind of conversions, that's an area that we can also guide you on. So anything we've said up until now, we're going to go to a break, but contact us if there's something we've touched on, Retire360Show.com or contact us by phone. (910) 235-0812. We'll be glad to schedule a time with you at one of our offices. We'll be right back after this break.
Producer:
When it comes to saving money this year, why not do it the old fashioned way? Clipping coupons? I'm Matt McClure with the Retirement.Radio Network Powered by AmeriLife. Coupons are still a great way to save money in the digital age with a lot less paper cuts. You can still find coupons and sales promotions in newspapers and magazines, but things have changed over the years. These days, there are a lot more opportunities to save money by searching online.
Jason Test:
The tools that are available now online make that really easy for shoppers to find the very best offer.
Producer:
That's Jason Test with the coupon website. Honey Speaking with NBC's Today show, the shift away from traditional paper coupons coupled with inflation does make it harder for some people to save. Take Kirsty Tureck, an extreme couponer, for example. She recently told the Today Show.
Kirsty Tureck:
I'm saving about 15% less than I was last year, but I'm also seeing probably 50% less sales and less moneymaker items.
Producer:
Still, she says, there are plenty of ways to save if you know where to look. Websites like RetailMeNot have been around for a while, but there are also newer apps dedicated to couponing helping you keep the savings at your fingertips.
Kirsty Tureck:
Do not pay for toothpaste. Don't pay for shampoo and conditioner, laundry detergent, personal care items and household essentials. Always, always, always. Have a.
Producer:
Coupon. So do you know where to go to find coupons that could save you a pretty penny? It's a key question to consider, and it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network powered by Amara Life. I'm Matt McClure to get your.
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Free copy of 23 cost cutters for 2023. Call Dwight today at (910) 235-0812 or visit retired 360.com
Producer:
you're listening to Retire 360 with Dwight Midgen. Now back to the show.
Mitchell Keiser:
Hey guys and welcome back this is Mitchell Keiser and you guys are listening to the Retire 360 show brought to you by 360 Capital Management here in the high country down in Banner Elk. And we are also located in downtown Southern Pines. We're going to jump back in here on bad money habits that could ruin your retirement. And I'm going to start us off here with number seven being unwilling to take normal risks with your money. Now, some people are untrusting of the stock market or even safer kinds of investments. More often than not, when we come across somebody that is totally adverse to the stock market, it's often because they don't understand it. And no matter what your situation is or what you're investing in, even if that's the bank, you should always understand what your investment is fully. So if you're not working with somebody that's educating you and teaching you on what you're doing, how you're doing it, and what the risk is associated with your investment, that's a problem. And you need to be working with somebody that can help you with that. And if that's not us and you don't want help from us or you can't get help from us, at least get help somewhere. If you need a recommendation from us as well, we'd be happy to point you in the right direction. You need to be informed. But being unwilling to take risk could cost you a lot in the long run.
Mitchell Keiser:
Taking a risk is just a part of investing in general. When you keep your money in cash, you are at risk. Because if your money was in cash these past couple of years, you did not keep up with inflation. Inflation shot through the roof, so your dollar became less valuable. So you you in turn faced risk in that capacity. If you are totally against putting your money in the stock market, look at other different strategies other than a bank. Banks are very limited in their channels. There are some private companies that will offer you guarantees. I know today they're north of 5%. That is, it's still higher than anything you're going to get at any bank. I think the highest we've seen in the money market is I believe it's around four and a quarter. I think that's the highest I've seen. But yeah, so risk is in everything. If you have a low risk tolerance, we can help you put together a plan that prioritizes your assets while giving your savings the opportunity to grow with market like returns. So if that's you and you need help understanding that, let us know or check us out online. We have some really great resources as well. If you just need to read more into it and you don't feel like talking to us, we have some really awesome literature as well on our website to help with that.
Dwight Mejan:
Yeah, right on. So we're talking about here, if you just tuned in Bad money habits that could ruin your retirement. And we've got the top ten ones that we see. Number eight I'm going to bring here is waiting too long to invest in your retirement. Einstein once said that compound interest is the eighth wonder of the world. So it's just important to take advantage of the benefits of compound interest by developing a good saving habit as soon as possible. You know, we talked, Mitchell about just having the right risk adjusted portfolio and we we talk to people, meet them all the time that, you know, they're in the market, they're out of the market. They're not letting their money sit and do what it really needs to do. And probably one of the most startling research items that I've seen in the world of finance just take the last 20 years. I've shared this on the radio before $100,000 investment. If you stayed invested every day, didn't pull the money out, kept with the same plan in a pretty much S&P 500 portfolio. If you stayed invested for the last 20 years, that 100 grand grew to 636,000. If you missed just five of the best days instead of 636,000, you had $392,000.
Dwight Mejan:
If you missed 15 of the best days, it was 220,000. If you missed 25 of the best days, your 100,000 in 20 years only grew $42,000. That's just amazing to me. I know that's not exactly compounding. It's just missing opportunities. But as we say all the time, it's not timing the market that will make you successful. It's time in the market. Most people just don't that are in and out. They just don't have the right risk adjusted portfolio. They get scared because no one's professionally helping them assess their tolerance for risk and then getting in a plan that they're comfortable with. And doesn't matter what your risk tolerance is, you're going to miss things when you're in and out. You got to be in it to win it. You got to be in it for the long haul so you don't need a lot of money to get started. You can begin investing in your own IRA or Roth IRA. Ira today by setting up automatic monthly contributions. But start and stay disciplined and hang in there. Don't get nervous when markets start to to teeter.
Mitchell Keiser:
Yep. And another habit here we're going to go over is the general belief that money is bad for a lot of people and families. Money can be a bit taboo and can be not discussed very well or in a healthy format. I know there's a lot of people that, you know, they grow up being told, you know, we don't have money or you can't spend money on this or, you know, you just save have to save everything and you can't spend anything on yourself. You need to have a healthy relationship with money as well when managing it properly. Money can provide stability and security for you and your family and can also allow you to achieve your wants, such as buying a second home or taking the family on a nice vacation or, you know, just doing something for yourself. We're not a self-help show, but you got to love yourself, too.
Dwight Mejan:
You know, I think sometimes we we look at people who are bad people that do bad things with money. Not that good. People can't do bad things with money either, but it's often tied to the individual. And think back to my first internship when I was a finance major at Purdue. I had a I was tasked with my first job. I remember the first day like it wasn't that long ago, even though it was. And we I was handed the I'm going to age myself here. I was given the a dot matrix printer with the little holes in it, their ear tabs. You don't even remember what those are, do you, Mitchell?
Mitchell Keiser:
Don't have a clue what you're talking about.
Dwight Mejan:
Okay? Sam. Sam doesn't either, I don't think. But anyway, so it had these little tabs on it and I was doing a ledger balancing the checkbook of this company. It was a private it was at the time, it was the largest privately held bus company that bused kids for school. They contracted with school districts, and then they had a bus charter, a private charter company. And I remember it took me 2.5 hours to reconcile this checkbook. And I brought it to the CFO and he said I showed him the number and he says, That's what I got. Do it again. I'm thinking, okay, well, if you got it and you're the CFO, why am I doing this again? So I didn't say anything. It was, okay, I'll go back, did it again another approximate 2.5 hours and came back and he said, Just go do it one more time. Want to make sure we got this right? He hadn't been there that long. I found this out later. So the third time I did it, which was pretty much my whole day, first day on the job, and I came back three times with the same reconciled number off this checkbook. And I just thought it was the company checkbook. Big checks coming out of there. I think the smallest one I think I reconcile was maybe 7500 to $10,000 somewhere in that range.
Dwight Mejan:
And he said, close the door. And I came and closed the door. And he says, you know what that checkbook is? You just reconciled. I said, No, I have no clue. I said, I figured it's the company's checkbook. He says, We have like eight checkbooks here, Dwight. And he said that was one of two checkbooks the company has. That's all in philanthropic endeavors. They give money away here like it's going out. A style and it was just absolutely awesome. So I'm getting the dot matrix Epson printer up here on my screen. So that's Sam in the background. Show me that, reminding me what the dot matrix looks like. He probably had to look that one up. But anyway, this company taught me some great principles and some great values of what it meant to be generous. And I had the privilege over the 30 years doing this of seeing some individuals as well as some companies that we work with, very, very generous people. And I'll tell you, they're not only some of the happiest people that I see and are a pleasure to work with, but they're some of the most prosperous people that I've worked with. So there is a principle there. And giving I know that's not one of the things that was there, but it just made me think about it.
Dwight Mejan:
Mitchell So that's my sidebar for the show today. But number ten, not saving enough money into an investment account. All I want to say here is, you know, IRA contribution limits, just so you know what they are for 2023, $6,500 for those under age 50. So that's either to a Roth or a traditional IRA. We would always encourage our listeners to go the Roth route if it's possible. There are some phase outs when you get up into the certain ranges of that right around the 200,000 mark, give or take a little bit where you can't fund that anymore. But if you're over 50, it's 7500. If you're 50 or over. So by all means, please, please, please take advantage of that. That's going to help that compounding and it's going to help you grow your money. But before you buy that next big want, consider paying yourself first and investing in your future. You know, it's just great to get in that habit. So just for our listeners, we do full retirement plan consultations. We run reports for you and go over those and lay it out for you. Morningstar reports on your portfolio. If you would like to have any of that done, if you want to have a second opinion, maybe on your income plan, anything we've talked about on today's show or anything else you have on your mind? I know some of you have been listening to us for a while and you're saying, you know, I need to write their number down, I need to pick up the phone and just get that complimentary session.
Dwight Mejan:
I promise you, we don't bite. We are here to serve you. We're here to educate you. As Mitchell said at the beginning of the show, reach out to us. Our consultations are no cost to you, our listeners, and there's absolutely no obligation. You would only work with us if it's best for you. Okay. We discover exactly what you're paying for fees and will help you cut unnecessary costs from your retirement plan, your 401. Ira or other savings accounts. And we'll also help you with Social Security planning and your Medicare. Lots of decisions to be made in that area. We'll compare your current situation in your portfolio that you're in with what's possible if you were to consider working with someone else. Okay with us. So just remember, this is your money, folks, and if it matters to you, it matters to us. So we're going to take a quick break. And when we come back, we'll finish up our last segment of today's show about you.
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. You're listening to Retire 360.
Mitchell Keiser:
And we are back. This is Mitchell and you guys are listening to the Retire 360 show, brought to you by 360 Capital Management. We are going to jump into a new segment here called How to Be More Proactive and Less Reactive about Your Retirement. So we're going to start off with a couple of tips here. Number one, don't keep more than $250,000 in a single bank. If you guys had listened to our most previous show, we talk about how banks have certain reserve limits. So a bank has to have 10% of the money that it loans out in reserves where there are other types of places to park your money that's backed up, up to 100%. Just keep that kind of in mind. Now, that being said, your money that you keep at those banks is backed up by the FDIC up to $250,000. Now, if you're a part of a smaller bank and that bank doesn't have I believe it's $10 million in deposits, it does not have to have a 10% reserve requirement. Therefore, your money could be at more of a risk. We're not telling you not to invest there. We're just telling you to make sure. We'd highly recommend that If you're at a smaller bank to make sure that they're FDIC insured. And yeah, if you have more than $250,000, even a little less than that, because you're going to earn interest if you have $200,000, anything beyond that amount, we'd recommend you open up a new bank and diversify your funds so that way you can make sure that as much of your liquid funds are as insured as possible. Keep in mind with that, as I we had talked before that there are other places to park your money that are backed up by the Guaranty Association up to $300,000 and there is a 100% reserve requirement. So by book standards, it would be a little bit safer. So if you just got a ton of money sitting in cash, that's something for you to think about and chew on a little bit.
Dwight Mejan:
Yeah, good stuff. Also establish a retirement income plan. Today we talked about this quite a bit with the bond portion of a person's portfolio. Terrible year last year, of course, in the bond market worst year actually on record replace that consider replacing that bond portion of your portfolio which for the classic portfolio of 60 over 40. Consider much of that bond portfolio, if not all of it, into an alternative income producing investment that would offer market like gains without the market risk that many people took last year. Being in bonds because we had that anomaly doesn't happen often when both equities and bonds didn't perform well. And that's why many people lost and still trying to recover those losses. So there are alternative strategies today. There's alternative asset classes that people could consider. We talk a lot about structured notes. There's defensive product instruments that could be used in portfolio that would help buffer against some of the losses that somebody might occur buffer to ETFs, which were big fans of. But those are options for maybe considering that that bond portion of your portfolio.
Dwight Mejan:
So and the other thing is regarding an income plan, it's amazing to me still how many people that we ask, tell us about your income plan. These would be folks, of course, that have income coming out of the portfolio to supplement Social Security. And they're just, you know, pulling a certain amount out every month. But they really don't know the strategy behind what they're doing. That's just somebody told them to do that, an advisor told them. But they can't really explain what the income plan is. And we just encourage people to understand this is the income plan and we'll give you examples of what you could do and give you ideas that you might be able to do differently that could save on taxes possibly and maybe be a more efficient means for you to get income and could potentially show you ways to increase the yield that you are getting. So understand an income plan and just know there's alternative places today besides bonds that you could put money in. And we'd love to talk to you about those as well.
Mitchell Keiser:
Yep. And how to be proactive with your taxes. If you are still contributing money to 401 seconds and IRAs to things to make sure that you're thinking about is the two types of two types of only instruments that you can grow your money with a tax free advantage. And that is, number one, a life insurance policy and number two, a Roth IRA. So life insurance, if you're even thinking about using that strategy, you need to hop on it right away. You don't know. What's going to happen in your life? You don't know. Next time you go to the doctor, if they're going to say, Hey, you have X, Y, Z medical condition, it's very easy to no longer be eligible for this type of life insurance. So if that's something that you've been considering, you don't really have an option. You can't kick that down the road. The sooner the better. And that is also an instrument that the longer you wait for that, that will cost you. But it is a great way, a great place to open a policy and to fund money in up to the limits that that policy allows. And you can grow that money tax free so you can use that in your lifetime or it will pass free to your beneficiaries.
Mitchell Keiser:
The other way to grow your money with a tax free advantage is in a Roth IRA. Most types of most types of brokerages offer systematic payments where they can automatically draft money out of your account. So if you have something in mind, you want to start putting $100, $500, $1,000, $5,000, whatever your situation is a month most companies will set up that They will just deduct that from your account. And you can even have that invested into certain types of securities ETFs, mutual funds. Some of these platforms are pretty cool. If you have any questions on that, we'd be happy to help you set that up. But if you are listening to this and you're over 60 years old with a Roth IRA, they actually give you additional funds that you're able to contribute to that. So if you're under that age, you can contribute $6,500 a year. And I believe they give you an extra 1000 if you're over that. So if you haven't started looking into that, we definitely recommend that you start because those are the only two types of tax free investments.
Dwight Mejan:
Yeah, absolutely. Well, the other thing we want to look at is working with a legal expert. You know, we're going to work to get a legal expert on our show here, hopefully not too far down the road and just give you all some advice from a from a legal expert. But, you know, by all means, make sure you put a will in place for your final wishes and estate. And if you do have a legally binding will, your family could be in court for years while your financial affairs are settled by the state. And, you know, a state probate costs in North Carolina, you know, range anywhere from 5 to 7% annually. So very, very important to make sure that you've got the estate matters settled. We work with clients in the area of estate and legacy planning, but make sure you have all those other documents in place, you know, health care, power of attorney, a bunch of stuff there. It's important for our listeners to be aware of there, but also have a plan for when you or your spouse passes away. You know, if you work with a financial advisor or professional, you can feel confident that your retirement, it's not at risk. Should you or your spouse pass away sooner than expected? You know, oftentimes the spouse who was the do it yourself retirement planning passes away. They leave that surviving spouse with a lot of questions. We're working with somebody in that very boat right now.
Dwight Mejan:
It was he was typically the one that handled everything, didn't show her much. And she's just at a loss, didn't know where stuff was at. And it's a mess. So just important to make sure both people know what's going on and at least know where important papers are that they can take to somebody and have a direction where they could go. Even if there is a do it yourself or household out there. That may not be the the style typically of one of the spouses. And they're going to need some professional guidance. So, you know, according to the statistics from the the Who, the World Health Organization globally, men have a lower life expectancy than women. There's no surprise there. This suggests that men are more likely to pass away before their female partners in marriages, although it's important to note that life expectancy, it's just an estimate and it's influenced by a lot of factors. So lastly, I just want people to be aware of one other thing called the the widows tax. We don't have time to dive into that today. But if you meet with us, we'll give you a free report on that. And this is available as information available to you today. If you reach out to us and want to book a complimentary consultation, we'll be happy to give you some information on that as well.
Mitchell Keiser:
Yep. And then another tip here is understand how your Social Security benefit is calculated. So whether you this pertains to people that are close to retirement, make sure that you know the benefits of. Taking your Social Security now versus delaying it a couple years and versus delaying it all the way up to age 70. There is instruments that exist out there that you can kind of do a projection based off of life expectancy and how that would benefit you to take it earlier versus later. Also, an important bit of information that we just want people to be aware of when it comes to the topic of Social Security is that it is projected that the trust fund that backs up Social Security is expected to be depleted between 2032 and 2033. So what does that mean? What that means is that they could means test and that they could essentially lower your Social Security amount. So think of retired people and the people that we were just discussing earlier about how 60% of people live paycheck to paycheck, What are they going to do? Folks, you need to have a plan in place and not just rely on Social Security if that's your plan and that's the only plan you have, you need to come up with another one, because unfortunately, if we're still around in 2032 and 2033, you're going to need to have another plan because things are changing. And, you know, we're not here to scare you, but we are here to inform you and to help you plan for a better future for yourself, for your family and for your beneficiaries.
Dwight Mejan:
Absolutely. And I echo what Mitchell says. We are here to help. And then finally here, determine your big budget items before you retire. You know, if you have plans that you want to help pay for family weddings, a grandchild's education or whatever it is, that it's a big ticket item that you want to plan for, make sure you plan for that in advance. In addition to that, if you know you want to travel a lot and let's say you're in your 60s, you want to budget for a vacation, you know, that suits your needs. So make sure those big ticket items are laid out in advance. You don't want to be, you know, pulling large sums of money out that are unaccounted for in that portfolio. And then finally, I just want to call out to our listeners here. If you're in the retirement red zone, which just basically means that within the next five years, you plan to retire or you just retired in the last five years, either one of those give us a call. We can help strengthen that financial plan. You can't afford to lose too much during these years. These are critical years, which means, you know, protection and growth is key and I would say responsible growth at that. So, Mitchell, can you remind our listeners here one more time as we wrap up today's show, particularly those up in high country, we've got some event dates coming up. If people joined us here midway through the show, we're going to be talking about taxes and retirement. Maybe you can give location and dates and times for that. Yep.
Mitchell Keiser:
So we are going to be teaching a class on taxes and retirement and how to take better advantage of your situation with those on May 15th at 11 a.m. in the Watauga County Library there in Boone Mitchell. Again, that is May 15th, which is a Monday. We are going to be at the Watauga County Library at 11 at 11 a.m. And we are also going to be there on the Tuesday following that at May, which is May 16th, also at 11 a.m. If that is of interest to you, make sure that you guys reach out, give us a call so we can reserve a seat. The last class that we had did fill up and we did have to turn some people away because they won't let us have too many people in there. So give us a call if that's something that you're interested in. Our office number is (910) 235-0812. Again, our office number is (910) 235-0812. And we'd be happy to get you on the calendar.
Dwight Mejan:
And you know that class, we didn't have time on today's show, so we'll pick it up next week where we left off. We're going to talk about taking steps to prevent a retirement tax bomb. And there is a tax bomb looming. Some of it has to do with the RMDs, which continue to change for people. Many people think that's good because it gives them more time, but it is creating another huge problem. I just want to thank all of our listeners. Again, thank you for being with us and sharing your time with us. And we look forward to returning next week. If you have any questions that we talked about on today's show, contact us at Retire360Show.com or reach out to us by phone at (910) 235-0812. Thanks and have a great week.
Producer:
Thanks for listening to Retire 360. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard earned assets. To schedule your free no obligation consultation with Dwight, visit Retire360Show.com or pick up the phone and call nine one. 2350812. 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:
Registered Investment Advisors and Investment Advisor representatives act as fiduciaries for all of our investment management clients, we have an obligation to act in the best interests of our clients and to make full disclosures of any conflicts of interest. If any exist. Refer to our firm brochure the ADV to a page four for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by BWA.
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