Five Dangerous Money Myths (Especially for LGBTQ+ Retirees)

TPIR Ep 116 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 116 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
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.

Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the Lgbtq+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom, so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in. No matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Well, hello there and welcome. Fancy meeting you here. Uh, this is Take pride in retirement. I'm Matt McClure, your host, your advisor, your friend, your pal, and your confidant. Thanks so much for being a part of things, as always.

Speaker 2:
And I am Josh noble, the.

Speaker 1:
Attache.

Speaker 2:
To the advisor, aka co-host aka husband of Matthew.

Speaker 1:
Thank thank you for that. Uh, the hubby, the co-host, the all the things. Um, and today on the show, yeah, we're talking about something that feels a little bit scary. The things that we don't know about money can actually cost us in retirement. Um, there's new research from the t I, a institute and global financial Literacy excellence Center that show a lot of Americans are making decisions based on outdated information or just plain like incorrect financial assumptions. And for LGBTQ plus folks, I mean, that can be even more impactful because a lot of us don't have those same safety nets that the general population does, whether it's family support, whether it may be pensions from from a job, whether it's, you know, historically equal access to benefits that we didn't have for a long time. So that's what we're going to talk about.

Speaker 2:
Yeah. So we're going to be busting some of the biggest myths out there. By the way, Myth Busters was one of Matt's favorite shows.

Speaker 1:
You used to watch MythBusters religiously when I, when I was staying, um, with, uh, our friend in Connecticut one time, um, for about six months, I think we were like sort of trying to decide where we were going to live and all this stuff. And there was just a lot going on. But when I was living with our friend who, you know, and whose name I won't mention, um, but I would, I would literally come home and put on MythBusters and sit there and watch it. And he'd be like, he'd come in and he'd be like, what are you watching? Oh, MythBusters again. So it was like just constant because it's such a good show. So yeah, today we get to play the part of the MythBusters here. Uh, before we get into all of that, though, let's go into this, I want you if you are watching or listening and hello, if you're watching on the YouTube to like and subscribe, please subscribe. We get the sultry subscribe again this time. Um, but yes, that is what I want you to do because it really helps the algorithm. It helps us spread the word about take pride in retirement, about LGBTQ plus retirement issues of all shapes and sizes. Um, and yeah, so just do that, if you will. It really would help subscribe to the podcast as well. Wherever you get your podcast would really appreciate that. You can also follow on pretty much all the socials. So just search for, take pride in retirement there. Um, and two other ways you can get in touch with me. Basically if you are, uh, can't get in touch with me or you're not looking for a way to do so. Um, 8552, four, 69211 is the phone number (855) 246-9211? You can also go to take pride in retirement.com. Schedule a free consultation. I will talk about that throughout the show and how it's a free consultation and all those things. All right. So we'll continue on with that. But okay, let's get into it here. Five big misconceptions and what you can do instead.

Speaker 2:
Yes. Myth number one, employer matching doesn't matter. Okay, so this one surprises me. Are people really just leaving free money on the table?

Speaker 1:
Yeah, that's absolutely right. I mean, if you tell me that you're not contributing enough to your employer based plan, your employer sponsored plan, your 401 K or 403 B or whatever to get the employer match to max that out. You're telling me you don't like free money. And that is, I'm gonna say not true. Probably because I love free money is my favorite kind of money. So it's one of the biggest missed opportunities out there that I see. The employer match is essentially that free money that you don't want to leave on the table. It's added to your retirement savings. So for example, let's say you contribute $1,000 a month, right? So your employer matches, let's say 50%. That's a big match. But I'm just doing that for kind of like math purposes here that are easy. So your employer matches half of that. That's an extra $6,000 a year going into your retirement account. And over time, that can compound into tens or even hundreds of thousands of dollars. So it's a really, really powerful tool.

Speaker 2:
So this isn't just a nice to have. This is a must do.

Speaker 1:
Yeah. Yeah. That's right. I mean, last show we were talking about like things that are must haves because we're talking about inflation, right? And so the things that are your must haves were, um, you know, the things that are rising in price and that concern people the most. But these are, this is kind of a must do, I guess I should say it's a foundational thing. If you're not getting the full match, you are not maximizing your plan. So take advantage of that, especially if you're younger and you have time on your side. Um, you know, if you've got a couple of decades or even a decade until you plan to retire, take advantage of the employer match. Max that out. And for LGBTQ plus folks, especially those without any sort of inherited wealth or family support, it becomes even more critical. So the ways, ways that you can actually do something about this, now that we've busted that myth that the employer match doesn't matter because it does. You can do this, contribute at least enough to get that full employer match. You can contribute above that, right within the limits that are set by the IRS every year. But you can contribute more than that. Chances are, and review that plan on an annual basis. Don't just set it and forget it, right.

Speaker 1:
Just at least go in and check on things once a year. If you've got an advisor, have them go in with you and check out, you know, check in with whatever your asset allocation is and all that kind of thing and your contributions, and then increase those contributions when possible. When the contribution limits go up, you know, in a in a particular year, most years they do. So that is just a list of a couple of things that you can do. And if you're not sure if you're maximizing that retirement plan at work, it's actually a great time right now to find out. No time like the present, right? Give me a call and I can help you with it. 8552469211. (855) 246-9211. You can also visit the website. Take pride in retirement.com, give it to you again. Take pride in retirement.com. It's it's just the name of the show, you know, and then a and then a.com. Uh, you can schedule a complimentary consultation. And when I say complimentary, it is, it doesn't mean you're going to walk in the door and I'm going to say, boy, you are amazing and fantastic and all. That's not those kind of compliments. It the meeting is free of any cost is basically what I'm saying. So there we go.

Speaker 2:
I mean, you might still give them a compliment if you know they deserve it.

Speaker 1:
Yeah, absolutely. I'll give you compliments all day long. And not only is it free, but you're also a beautiful person. Exactly. Inside. Outside. All the things. Yes. All right, so. Myth number two. All annuities are bad. Okay. This is one I've heard multiple times, endless times honestly. So people hear annuity and they immediately think, run away, get away. Yeah. And that sort of makes me think of Monty Python and the Holy Grail, which I am going to make you sit down with me and watch. Um, because I know you've seen it, but we haven't seen it together and I want to watch it. Um, but it's the part where they're attacking a castle and then they go, the stuff's being hurled at them from over the castle wall and they go run away. And so that just makes me feel like, oh, people are throwing annuities at you and you say, run away. But now the myth is busted because not all annuities are bad. This is one of my favorite ones to bust. The reputation comes from a couple of things. Number one is a misunderstanding of what annuities actually are, and frankly, some bad products that were out there in the past that that sort of reputation clings on to annuities, even though they've changed quite a bit over the years. Today's annuities, though, especially the fixed indexed variety F I, as we call them in the biz, they can play a really important role.

Speaker 1:
They can provide guaranteed income for life. They can act like a personal pension. So, you know, remember back in the day, people used to work for, you know, for decades at a job, they'd retire, they'd get a gold watch and a pension, meaning an income for life, and then they'd be sent along their merry little way. Well, this is a personal pension. So you use those funds that are maybe in your 401 K, your IRA, your 403 B, whatever type of retirement account you have. It keeps the same tax advantages that it's always had. But you can roll that directly into an annuity and create a pension for yourself. And then of course it offers tax deferred growth as a result of that. Um it can can include survivor benefits. A lot of them have like a death benefit, for example. That's huge for couples, particularly Lgbtq+ couples as well. You want to make sure that those beneficiary designations are up to date. Yeah. Because that survivor piece, that's especially important important for our community. Oh yeah. It absolutely is. You know, I was talking to a friend of yours actually who had, uh, reached out to me not long after we met him who happened to be in town. And we got talking about retirement stuff. He was going through a difficult time. And, um, you know, it was, uh, he was talking about all the different things that needed to be done and the beneficiary designations and all these things that needed to change.

Speaker 1:
And it's huge. Like, and, and LGBTQ plus couples did not have historically access to spousal benefits or pensions. So you, you layer that on top of it and then creating your own pension as a response to that and one that protects you and your partner, your, your, whether you're married or not, quite frankly, your partner, your spouse, that can be super, super powerful. Um, so don't dismiss all annuities. That's the takeaway from this. Don't just say, oh, annuity by, you know, evaluate how they fit into your income plan. They could be a really great tool for you. Work with somebody. I happen to know a guy who can explain the pros and the cons. Clearly, not every annuity is right for every person. Uh, an annuity is not right for every person. I'm not going to recommend something that I think is wrong for you just because it's got a, you know, the name annuity. And I want to prove something that it's not a bad thing. Know if it's not great for your situation, in my opinion, in my, my educated opinion, and as part of my fiduciary duty to do my best for my clients, then I'm not going to recommend that. So that's that. And I'll get off my, my soapbox about annuities. Now.

Speaker 3:
As I've always said, Matt is the advisor who cares. And a lot of people honestly can take advantage of you. And Matt's not one of those people. So if it's not right for you, he's not going.

Speaker 1:
To push it for you. And that's what is great about how you approach what you do. Well thank you, I appreciate it. And that's that's the goal really. It is it's it's, I was, um, I was brought up to care about people and, uh, that's just a concept. It's kind of crazy, right? Especially in today's world, it seems like it's what? Yeah, it's kind of crazy. Um, but yeah, I mean, it's just, it's, it's literally, it's empathy and it really is, um, a concern for people and wanting the best for them. I do this because I want to help people, especially in our community. So that's, that's the reason why. All right.

Speaker 4:
Myth number three, Social Security won't be there for me. All right. So I also hear this one all the time. So people think Social Security is just going away.

Speaker 1:
Yeah. It's a big myth out there that's going away. That's the thing. Like it's I obviously I don't have a crystal ball. Um, but one of the biggest misconceptions out there is that Social Security is just going to poof, disappear now. Yeah, the system does face challenges, but the benefits themselves are not expected to poof in a cloud of smoke, right? More importantly, once you claim those benefits are designed to last for your entire life. And so, you know, you've got to optimize your strategy when it comes to claiming Social Security. You know, don't just if you're 62 and and you're first eligible and you're claiming early, then you don't want to just go on and take the money and run necessarily, unless you need that money, unless you need that, that check every month, um, then it could be advantageous for you because if you do that at 62, that's a smaller monthly benefit for your entire life, delaying until age 70. That is a significantly larger benefit for you on a monthly basis. Does that make sense for you? Depends. It depends on your financial situation. Again, whether you need that money right then. And it also depends on your prospect of longevity. You know, if your people die in their late 60s, for example, maybe you don't want to hang on and try to hang on until 70, because that's not a situation where you're never going to break, where you're ever going to break even with your benefit, right? But if your people live to be 100, sure.

Speaker 1:
Wait until age 70, depending on the other things that go into it, the other considerations we take. And so for couples, huge decisions to be made as well, when one spouse passes, the surviving spouse keeps the larger benefit. Um, so, you know, you've got those two checks. One spouse dies no matter who it is. It's the larger check of the two that remains. So a lot of big things to take into consideration there. And back to kind of the core of the myth, though, is that Social Security is going to go away. You know, you hear about the Social Security trust fund. It's the old age survivors and disability insurance OASDI old age survivors and disability Insurance trust fund, uh, that funds this part of social security and yeah, the trust fund itself is running out of money. That does not mean, though, that benefits will go away. That just means they may get smaller if Congress doesn't act to shore that up. My view is that Congress will have to act to shore up benefits because cuts to Social Security benefits that's going to go over like a lead balloon or like a fart in a spacesuit or something.

Speaker 1:
You know, it's not a good thing. A fart in a spacesuit. Welcome to the show, ladies and gentlemen. All in between. Nothing. But I hope that. I hope the word fart doesn't, like, qualify us for an explicit. Oh, I wonder if they're like, you can bleep it out and they'll be like, what did he say exactly? Call to find out. With all of this though. Basically you're saying and what I get from it is that timing really matters. Timing matters huge. I mean, it can be tens of thousands, even hundreds of thousands of dollars over your lifetime. I have seen that play out really as I run Social Security optimization reports for people. Um, the difference between waiting and can really make a huge, huge difference to the tune of hundreds of thousands of dollars. And, you know, like timing of each individual spouses when they take their benefits can have a huge impact on each other as well. So, and, you know, a lot of Lgbtq+ folks only gain full spousal benefits relatively recently, you know, about ten years ago or so. And so that makes proper claiming strategies even more important. The big thing here, kind of the takeaway from this part, don't guess, just build a claiming strategy that actually makes sense for you.

Speaker 1:
Also consider a Social Security analysis. I happen to know a guy myself who is an RSA. If you're watching on YouTube, that's what those letters are right there right after my name RSSA. And that means registered social Security analyst. Who else would you want to go to to get Social Security analyzed for you? Basically what we do is we take your earnings history. We plug it into our software take different considerations for you, your individual situation with your spouse. If you're married, all the things we take all the things into consideration and then we tell you, here are your options and here's what your situation could look like. So you go into it informed. And so if you want a Social Security strategy that actually maximizes your benefits, or I should rather say optimizes your benefits because the maximum, again, waiting until 70 isn't always the best thing for everybody in every situation. Give me a call. The complimentary the consultation is complimentary, uh, meaning absolutely free of any cost, any obligation. The number to call (855) 246-9217. Or you can go to to the website, take pride in retirement.com and get that very personalized plan for you.

Speaker 5:
Yes. Myth number four. Yeah, I won't live that long anyway.

Speaker 1:
So this one feels more emotional than financial to me. So people just assume they won't live into their 80s or 90s, or they don't think they'll be alive long into that time period. So yeah. What do you think about that assumption? It's it can be dangerous, financially speaking. Um, you know, I always say it's better to overestimate than underestimate because if you underestimate, let's say you make a plan to live until 80 and then on your 81st birthday, you got no money. Um, that's not a good, not a good plan. So you want to, you know, overestimate really the average 65 year old today, for example, according to statistics, lives nearly 19 more years on average. And a lot of people live much longer than that. So it's it's a huge, huge misconception about people's lives. So under. So if you're underestimating how long your lifespan. Basically, that means you could be running out of money 100%. I mean, you can, you can literally run out of money. It's in the, in the biz, we call that longevity risk. It's one of the risks that we, you know, learn about kind of early on when we're looking at all the different kinds of risks that people face. There's legislative risk, there's market risk, there's all these other risks, and then there's longevity risk. And that's the risk of outliving your money. And for LGBTQ plus folks as well, you know, you may be planning solo, you may be supporting a partner.

Speaker 1:
You may face higher health care costs. Um, all of those things can really come in to complicate the situation. And so you want a plan that's built for you and you want a plan that, you know, we, we run every plan to at least your 95th birthday, at least your 95th birthday. So because I mean, people are living longer these days, even with, um, you know, the Covid pandemic just happening, a lot of people are even living longer and into their 90s and one hundreds and all that stuff. And the averages are even getting to a higher age, a longer lifespan. So what can you do about this? You can plan for that longer retirement. You can create those lifetime income streams that I've been talking about when I talked about annuities. You know, if you want to hear a little bit more about that, there's one way to create income in retirement. If you want to hear more about it, rewind a little bit. Um, and then consider tools like those annuities or even like, you know, some different financial tools to hedge your risk, right? To hedge that longevity risk. So, you know, don't plan for the average plan for the possibility that you're going to live a lot longer in your life. Because if you don't, you know, you could face some pretty dire consequences. And you want to build income that lasts as long as you do.

Speaker 6:
Right? Myth number five Medicare covers everything. Okay, this sounds like a trap.

Speaker 1:
It is. Oh, it's. And I have another movie reference. Um, this one reminds me of return of the Jedi. Uh, believe it or not, Admiral Ackbar, his famous line. It's a trap. And so, uh, it is kind of a trap. Um. Medicare is incredibly important, but it doesn't cover everything. It does not cover everything at all. Um, it does not fully cover things like your deductibles, your copays, all that kind of stuff. The thing that people really can be surprised by and bitten in the, you know, where by is that it doesn't cover long term care. Medicare does not cover long term care. So if you need to go into a nursing home or another, you know, assisted living or another type of long term care facility, then you are going to have to pay out of pocket for that, or you're going to have to have some kind of long term care plan inside your overall plan. Um, Medicare also doesn't cover some prescriptions. Depends on what it is. Right. Uh, it also doesn't cover things like dental or vision or hearing. You got to go out elsewhere for those types of plans as well. Bridge those gaps. So yeah, there's a lot there that is not covered by Medicare. Again, an extremely important part of the puzzle, but not the whole puzzle. It always is so interesting to me that your eyeballs and your ears and you know, your teeth are all separate from the rest of your health, how everything's broken down into that different category. I would love to study the history of like, when and why that happened, but you know, you know, it's about money.

Speaker 1:
It's gotta be, it's gotta be, isn't everything. Yeah. So people, even with the Medicare, they could still have pretty big out of pocket costs. Absolutely. And that can really derail a retirement plan if you're not prepared for it. Right. I mean, LGBTQ plus retirees may be more likely to rely on paid care versus family caregiving because of those, you know, sort of strained family dynamics that we often talk about. And that makes planning for healthcare even more essential in our community. So some solutions here. Um, so I don't leave you to doom and gloom on this part. Um, Medigap, which would be like a Medicare supplement plan or a Medicare Advantage plan. Look into those because those can fill those gaps. And I think having one or the other is pretty much essential if you're eligible for a health savings account, meaning you have a high deductible plan during your working years. You're eligible for a health savings account there that can offer a lot of different tax advantages for your savings. You can take that with you for, you know, no matter what job you have and for the rest of your life essentially as well. Um, and then long term care planning have some sort of long term care plan. I know I've mentioned annuities a few times. That's, uh, one of the great things about them these days too, is a lot of them can come with long term care riders, which can say, oh, we're going to either double your income or give you a lump sum of money if you have to go into a long term care facility.

Speaker 1:
So there are some benefits that could be had there. Um, biggest way to take action, review your health care coverage, not just every, you know, few years now, do it every year and then build health care costs into your retirement plan. Don't view that as a separate thing. It's money that's going to have to be spent. So make sure that you plan for it. All right. So with these myths, myth buster, Matt McClure. So if someone's listening and they're realizing they've believed one or maybe a few of these myths, what should they do next? Well, okay, don't don't panic. Don't feel bad about yourself and say, oh, I've been, you know, they've pulled one over on me or anything like this. These are common misconceptions, right? It's nothing bad about you. Um, it's just kind of what happens in life. Sometimes we hear things, we believe them. It turns out they're not true in the end. Right? We've all been there. That's the first thing. Second, just get a plan in place, right? That is the difference between guessing and knowing. If you have a plan that's actually built for you, you can know instead of just guess what your future is going to look like, for example. So, you know, take charge of your financial future. I want to implore you to reach out, schedule a free consultation with me. I'll have a conversation with you about your goals, your expectations, your concerns, what retirement looks like for you.

Speaker 1:
I'll review your current portfolio, whether it be a big portfolio or a small portfolio. Little teeny, tiny, minuscule portfolio. I don't care if you've got, you know. Yeah. Thank you, thank you Rachel. Um, we got, you know, if you've got, uh, furniture that you own and you're like, this is my portfolio. Fine. Let's get you into a better place. Certainly. But I do not judge people or prejudge people at all based on what you have right now. I want to get you to a better place. And so I want to get you to a place where you can have a retirement you can take pride in, and we'll look at your income strategies. We'll build Social security strategies for you. All of the things. So just go to take pride in retirement.com. It's take pride in retirement.com. Or give me a call at (855) 246-9211. Again, the consultation is 100% free. All right. Well, I guess that I guess that's going to do it. That's all I have anyway. Um, Mr. Noble, Mr. noble. Host. Noble, thank you so much for busting these myths. And as Matt said earlier, please subscribe. It really helps helps us get the word out. Subscribe. Okay. Uh, I had to do a little, like semi wicked thing there. Um, but thank you, I appreciate that. I appreciate you, of course, joining me now, uh, each and every time here on the show, I really enjoy talking to more than just myself. So, uh, I feel a little less crazy. Uh, but no, I thank you and I thank you out there listening and or watching the show really do appreciate it each and every time we're able to get together.

Speaker 1:
And until next time, take pride in yourselves and take care of each other. We'll see you then. Thanks for listening. To Take Pride in Retirement, members of the LGBTQ plus community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement.com investment advisory services offered through Brookstone Capital Management, LLC. Bcm, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM but are offered in sold through individually licensed and appointed agents. Matt McClure and Active Wealth Management are not affiliated with or endorsed by the Social Security Administration or any other government agency. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC. 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 interest of our clients and to make full disclosures of any conflicts of interest, please refer to our firm brochure, the ADV two item four, for additional information.

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