Four Habits That Can Wreck Your Retirement (and How LGBTQ+ Retirees Can Avoid Them)

Episode 67: Audio automatically transcribed by Sonix

Episode 67: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
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.

Speaker2:
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.

Speaker1:
Hello and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal, and your confidant. Thanks so much for being a part of things this time around. Really do appreciate it so much. Great stuff to get to hear on the show. Um, didn't do a show last week just because of some craziness going on, so I got a lot to cram in this time, and it's going to be a good one, full of a lot of information, focused mainly on four big habits that can really wreck your retirement dreams. And I'm going to going to hone in on what these mean for the LGBTQ plus community, and how you can avoid those things going wrong in your retirement. First of all, uh, again, thank you for being a part of the show. Whether this is your first time joining me, or if you've been doing this for a while and you've been with the show since the beginning, I really do appreciate that. If that's the case, um, and spread the good word, you know, I mean, this is something that I do as a labor of love. It's something that I love to do, and I am spreading the word all about the, you know, finances of LGBTQ plus folks and how you can prepare for retirement, and one that you can live with pride, one that you can live with authenticity and, um, you know, one just as yourself and as, you know, someone who is just living life on your own terms.

Speaker1:
Um, I think that is like the most important thing. Everybody deserves that, right? And so you definitely deserve a retirement you can take pride in. Um, so as a reminder, always, you can listen to past episodes of the podcast on any of your favorite podcast apps. Really? Apple, Spotify, iHeart, uh, Pandora, like audible, um, any of the others that are out there that you may be listening right now, you can get them on those. So say, if you're spreading the word about the show to your friend and they say, well, you know, I don't subscribe on Apple Podcasts. I have, you know, the iHeart app. And I listen there. Um, great. You can also get get us there as well. So yeah, it's a great thing to do. Check out the Take Pride in Retirement YouTube channel. Also, a lot of great content there and more and more content every week. Um, spread the word there. Also, I'm on blue Sky. Just search for take Pride in retirement. Same deal on Facebook, Instagram and on threads. And you know, I would absolutely love to sit with you for an initial, absolutely free complimentary consultation. There is no obligation for that just to look at your finances and see how things are going. If you're on the right track, I'll tell you. If you're not, I'll show you how you can improve, right? It's pretty much that simple.

Speaker1:
And again, no cost, no obligation. A couple of different ways you can get in touch with me to do that. Go to take pride in retirement. Com that's the first way. Click the Schedule a consultation button there at the top of the screen. Or you can give me a call 85524692 11 (855) 246-9211. One is that number. Okay. So we're going to talk about those four habits to avoid when planning for retirement. Talk about some health care costs in retirement as well. A little bit about Medicare of course as part of that larger healthcare discussion. And then we'll talk about one of my favorite topics. As if you're watching the video version of the show. You can see if you're watching it on YouTube. The full episodes all go up on the YouTube channel now, by the way. And you can see there by my name a couple of acronyms. One is RSA, which is registered Social Security Analyst, the other is Certified Annuity Specialist or CAS. So we're going to talk a little bit about annuities today. One of my favorite topics. That's why I've studied it so much. And I will explain to you kind of the different types and what they can do for you, kind of calling it like the Swiss Army Knife of retirement here. Um, first though, let's get some inspiration for our conversation, shall we? We'll do that with our quote of the week.

Speaker3:
And now for some financial wisdom. It's time for the quote of the week.

Speaker1:
And this week's quote comes from the former long time chair of the Federal Reserve, Alan Greenspan, who said this. The number one problem in today's generation and economy is the lack of financial literacy. That is just as true now as when he said it. The number one problem in today's generation and economy is the lack of financial literacy. So so true. Um, and that's it really boils down to one of the reasons why I do the show. You know, I mean, looking back on my life, I wish that I had had more financial literacy, more financial education earlier in life. Then I would have made better decisions financially in my life. And so, you know, I think that's true for so many people today. One of the reasons that, you know, we have sky high credit card debt in this country, one of the reasons that people have, um, you know, all all different kinds of debt, um, bad debt and beyond is that very thing you just don't know until you find out the hard way. For myself, that's what I had to do. I had to find out the hard way, you know? I had to make the bad decisions in order to learn and then be able to, on the other side of that, get educated and use that knowledge, both from the bad decision making, the consequences of that and from the education to be able to help other people.

Speaker1:
You know, I mean, I was, um, you know, somebody who I, you know, I lost a home at one point, um, in my life when I was in my 20s. I think I've shared that on the show yet. Um, but I did. I mean, it was I, I, um, went through a very difficult financial period and partially due to the loss of one job and, you know, all that, that kind of thing. I had two jobs at the time, and it was also during that time where they were just kind of giving mortgages away, You know, I really, looking back on it, had no business being able to obtain a mortgage, first of all, at that point in my life. But I'm glad that I did, because I'm in the place where I am now. Had I not made that mistake, I wouldn't be where I am now with the knowledge that I have. And so that's one of the reasons that I do what I do. Uh, on top of, you know, being part of the LGBTQ plus community and spreading the word about the different, um, risks, the different, um, you know, things that you need to take into account that are unique to the LGBTQ plus community. And we do that on a regular basis, um, here on the show. Now, I want to talk about some things. These are actually four, um, habits that can wreck your retirement dreams.

Speaker1:
And, you know, this is actually saw this article in, um, Yahoo Finance. And, uh, it really stuck out to me. And so I wanted to go over it this week because, you know, for a lot of Americans, middle class, middle upper class, even, you know, uh, the, the poorer and the richer, um, and for, you know, a lot of folks in the LGBTQ plus community as well, you know, retirement is really supposed to be that time where you can relax and enjoy life and you finally get to do it all on your own terms. Right? Kind of like I was talking about at the beginning of the show. But there are certain habits that really can sabotage those dreams, especially if you don't catch them early. And I want to go through the kind of the four biggest offenders here, according to this, uh, article that I found, um, one is carrying high interest debt into retirement. You don't want to carry high interest debt anytime. Ideally. Um, you know, I mean, I, again, one of those lessons that I've had to learn because it all has to do really with compounding interest. What is Einstein called? Compounding interest. The eighth wonder of the world. And it's true that that it very much is the eighth wonder of the world, that it can work for you if you understand it. But if you don't understand it, boy, it can work against you. You really can pay the price for that.

Speaker1:
And, you know, credit card balances, personal loans, high interest car loans. They don't just disappear when you retire. Right. You can carry that debt into retirement. And speaking of that compounding interest, it really can wreak havoc. Because if you don't pay off that full credit card bill every month, then of course the balance carries over to the next month. So what happens then? You get an interest rate charge onto that account. Then if you don't pay off that bill in full, so you just make the minimum payment that next month. You've got a higher balance because you've just made the minimum payment, right? You've got a higher balance. You get more interest compounded on top of the other interest that's already been piled on to your account, and so on and so forth. It's like a snowball if you just let it sit there. That's why, you know, they, um, will will show you now on, uh, credit card agreements and things like that. Here's how long it would take to pay off this balance if you just make the minimum payments. And so it's not something that you want to do, especially in your retirement years. I mean, if you are on a fixed income, let's say if you are and everybody is kind of on a fixed income, it's just how big that number is, especially in retirement, right? Interest payments do stand the threat of draining your savings, reducing the money that you have available for living your life on a daily basis.

Speaker1:
And so how do you fix it? Well, focus on paying down high interest debt before you retire. And if you have that done, more of your income can go to support your lifestyle. All right. So pay down that high interest debt before that date where you plan to call it quits from the old workplace there. Number two lacking attack strategy for withdrawals. This is a biggie here. Um, you know, without a plan for how you're going to withdraw money from things like your IRA or 401 K, any Roth accounts that you may have? Uh, for zero threeb a tsp. If you're a federal employee or, you know any other savings or investments that you might have, you could end up paying far more in taxes than you really should. And that shortens the life of the overall nest egg that you have. So the risk here is paying more in taxes than necessary. And so the fix is to develop a withdrawal strategy that minimizes your tax liability. You got to consider those Roth accounts. You got to consider the rmd's. Anything that's not a Roth account. If it's a qualified account like a 401 K or an IRA, then the government, you haven't paid taxes on that, right? So right now you reach age 73. Eventually it'll go up to 75. But right now it's 73.

Speaker1:
The government says, I've given you this tax break all these years. Now it's time to pay up essentially. And so that's what you will have to do is pay up if you haven't already, which you haven't in those type of accounts. And so you'll have that that bill that's due at that point in time. And so you've got to take those RMDs into account. You've got to time your Social Security benefits accordingly as well. And so all of that, all those different pieces of the puzzle that fit together to make your retirement income plan really work, and especially from a tax standpoint, it's super important. General rule of thumb is you want to let those Roth accounts grow for as long as possible in order to maximize the tax free money that you have available. So maybe, you know, taxable tax deferred will, you know, be withdrawn first and then the Roth accounts, uh, last because then those have the most opportunity to grow and they will have larger balances than they would have otherwise. And you can minimize your tax risk that way. Ignoring longevity risk is number three. You know, I'm telling you, people don't plan to live as long as they do many times. And it's not a, um, it's not a good thing, uh, to, to sort of underestimate you need to overestimate, if anything, your life expectancy. Many of us are living longer than we expect these days.

Speaker1:
And it's really is. You know, that's great news, especially if you're in good health. Right? Uh, but it also means that your money has to last longer. Um, just, you know, it's just the way that the math works. You live longer, you got to have more money. And if you spend too much early on, you know you're gonna risk running out of funds in your 80s or your 90s. So you got to treat longevity like it's a financial liability a bit, and build a plan that creates guaranteed income streams so you don't outlive your money. I can help you do that. Go to take pride in retirement. It's really one of the things that I specialize in is creating guaranteed income streams for people growing that money while you're still working, so you have a big pot of money to then grab to, to then get that guaranteed income from, generate that guaranteed income in your retirement years, and it's guaranteed to last as long as you do. We'll talk more about that during our annuity discussion later on in the show. Take pride in retirement. Com once again is the website. And number four bad habit that can really wreck your retirement. You know it's treating your your home as a retirement plan. That's the way that they put it here. You know, I mean a lot of folks may think, oh, I've got my house. I'll be fine.

Speaker1:
You know, uh, being house rich and cash poor, though, is not a way to retire. Um, yeah. You may have a house. Your home is an asset, but it doesn't produce income. You can't live off your home unless you are living somewhere else and maybe renting that home. And then that becomes a rental property. And that's a different kind of a ball game here. But what you need to do is balance your mortgage paydowns with investing and prioritize retirement accounts, especially if there's an employer match before pouring money into renovations. Right. So don't be house rich and cash poor. So focus on that and maybe even focus on downsizing when you're in retirement. Um, if you can pay off your house. I mean, the happiest retirees that we work with are those who have paid off their house. They don't have that big house payment, that big mortgage payment hanging over their heads in their retirement years. So, you know, I mean, retirement success is not just about how much money you save, but it's about avoiding those traps. And to recap, those bad habits are carrying high interest debt into retirement, lacking a tax strategy for withdrawals, ignoring longevity risk. That's how long you're going to live. And you know, the fact that you need money to make it there and treating a home as a retirement plan. So by tackling debt, planning your taxes, preparing for longevity, balancing homeownership with investing, you can protect your dreams and you can enjoy the retirement you deserve.

Speaker1:
Schedule that no cost consultation at take pride in retirement. Com or call me 85524692178552469211. And we'll get you that plan in place. That brings peace of mind. All right. So um, a little bit about healthcare now. Uh, because, you know, we're talking about costs in retirement a lot. And, you know, it's sort of bad money habits. I guess I can sort of tack this on to the end of that and say, a bad money habit in retirement is not counting health care as a big cost. It's going to be one of the biggest costs that you have in retirement, actually. And, you know, I mean, it's it's one that people really underestimate a lot. There was a study done by fidelity that said a 65 year old individual retiring in 2025 can expect to spend about $172,500, so over $172,000 on healthcare for a couple, roughly 683,000 over a lifetime. And that doesn't even include long term healthcare costs. So that's over half $1 million. About three, uh, about two thirds, I should say, of $1 million over a lifetime for a couple retiring in 2025, not even including long term care. And for LGBTQ+ retirees, I mean, that can hit even harder, right? I mean, many of you have probably had gaps in employer coverage. Maybe, especially if you're someone like me who years ago, um, lost a job because of my, uh, my sexuality.

Speaker1:
And that was not a fun thing. And so maybe you are one who has experienced that in the past as well. You've had those healthcare, uh, gaps. You've had maybe delayed healthcare due to discrimination or lack of inclusive providers. And that means that those costs can, can really stack up even faster later on in your life. And sure, Medicare is going to help, right? You know, you're eligible for Medicare at age 65. But here's the reality of the situation. It's only going to cover in practice about two thirds Of your healthcare expenses, you know, and that leaves premiums, deductibles, copays. Dental, vision, hearing and more all on you. I mean, it just leaves it all up to you and coming out of pocket. So what should you do? Well, a couple of things that that you can do. One is a health savings account or an HSA. Use one of those if you're still working because it's triple tax advantaged, right. You don't pay taxes on any of that as long as you use it on qualified expenses. Consider a Roth like a Roth 401 K if you're still working and you've got an opportunity to to contribute there. I actually, um, not all that long ago I started contributing to my, um, because I have a couple, a couple of gigs here, gigs here and there, and, um, at my sort of corporate job, I put a Roth 401 K in place and started making contributions there.

Speaker1:
You could also do Roth IRA contributions, open up your own work with a financial advisor like myself to open up your own Roth 401 Roth IRA rather so you have tax free withdrawals in your retirement years. Explore long term care insurance or the potential for annuities, which I'll talk about again later on in the show that have, um, a rider attached to them that will double your income. For example, if you were to need long term care in retirement, say, if you're confined to a long term care facility like a nursing home or assisted living for a certain number of days, um, then the rider would kick in and would double your income. Some of them even have a thing where it'll triple your income, or at least, you know, get it above that, that, uh, stage where it's doubled. And there are life insurance policies that have living benefits now as well. So it's it's really something that you need to take into account because most people will need long term care and not enough people are going to plan for that. Um, at least they don't now. I'm hoping that that changes in the future. But you've got to realize also, that's something that Medicare does not cover. I said Medicare will help out, but it's not going to cover long term care, any of it. So there you go.

Speaker1:
Speaking of Medicare, I want to I want to just touch kind of quickly here and we'll go more into the long term care discussion in just a minute. But cover some Medicare basics here really quick. So Medicare can be confusing, but it's essential to really understand what it does and doesn't cover. I mean, I was kind of refer to Medicare as the alphabet soup, right? Because it's part A, part B, part C, part D, and then it's, you know, all of the other Medicare supplement plans which are under their own letters, you know, d e f g h I j. You know, all the way to Z or whatever, however many there are now. I mean, it's hard to keep track of because some of them come and go and people still have old ones that are in effect, and they don't, but they don't offer those anymore. Here's what they do though. Just kind of the basics of Medicare. Number one, part A of Medicare. It's essentially hospital insurance, right. So it's usually premium free but deductibles and coinsurance apply. So you can think about part A of Medicare as your hospital stays right. Inpatient hospital stays. Also things like skilled nursing facility care uh, even hospice care. Some home health care that's limited though some home healthcare gets covered through Medicare. And, um, you know, again, you don't pay a premium for that, but you could pay the price as far as coinsurance and and things like that and deductibles.

Speaker1:
Part B is you think about going to the doctor, right? You say one of my one of my friends in this business says the way to, um, think about part B is you're going to see doctor Bob. Part B is your doctor visits your medical insurance. So hospital insurance is part A, part B is medical meaning doctor visits. Essentially there's more than that. But it covers those outpatient services. So part A is inpatient. Part B is outpatient. If that's the way you kind of want to think about it. Doctor visits, preventative services, medical equipment that kind of stuff is part B. There is a monthly premium for part B. It does vary based on your income. Um, 2023 the standard premium was um about 165 bucks and it's gone. Obviously it's gone up a bit since then, but higher income individuals will pay more because it is on a graded scale there. And part B also has an annual deductible and coinsurance, um, as well. So you got to think about that. Part C Is Medicare Advantage. So it's really offered by private insurance companies that are, you know, contracted with Medicare, approved by Medicare. And those plans will provide the same sort of coverage as original Medicare Parts A and B, but also include other, um, you know, coverages. On top of that, additional benefits would include maybe vision, dental, prescription drug coverage, all of that stuff.

Speaker1:
The thing is, you have to be enrolled in A and B to be eligible for a Medicare Advantage plan. Now those plans are going to cover different costs. Um, are going to have different costs rather than going to have different networks, um, and different rules that go in with each plan. So it's really important to work with a licensed agent to review those options and really find the plan that's best for you. You may say, oh, well, I have a great plan right now. If you're already receiving Medicare and you're on a Medicare Advantage plan. But those things change every year. So there could be a plan this coming year. An AEP is not that far away the annual enrollment period. So we'll talk a lot more about Medicare then. But you got to determine what's best for you now, not what's best for you. 2 or 3 years ago when you signed up for said plan, right. There could be something better out there on the market right now. Part D is, I think, the easiest to remember. Part D of Medicare stands for drugs. Um, not the kind that you would buy on a street corner. No absolutely not. Prescription drugs. So part D is prescription drug coverage. Um, and it's offered by Medicare approved private companies. And you can choose a standalone prescription drug plan if you have original Medicare or a Medicare Advantage plan with drug coverage.

Speaker1:
So there are two different types of ways that that can work. The cost of part D, it varies by the type of plan that you have. You know, you can have a standalone plan if you just have parts A and B, or if you've got a med advantage plan, it's kind of all, you know, sort of rolled in. It just depends on the plan. But there's a penalty for late enrollment if you don't sign up when you're first eligible and you don't have other creditable coverage. So keep that in mind as well. And for LGBTQ plus retirees here when talking about Medicare, there is an added wrinkle, you know, making sure that both partners are properly covered, avoiding penalties, coordinating benefits, especially if you're not married. Um, it really enrollment timing matters. And it matters especially for LGBTQ plus folks who may just be in like a partnership type situation without, uh, you know, having put a ring on it, so to speak. So enrollment timing really matters. You know, you miss that deadline. You could, as I say, face penalties. And those are penalties that could follow you around. So if you want to learn more about how to really time these things and make sure that you are covered, give me a call (855) 246-9211. You can also go to take pride in retirement. Com. Again the initial consultation is free of cost or obligation. All right a little bit more.

Speaker1:
You know I mentioned briefly long term care a minute ago a little bit more about that. Um and I said that most of us will need long term care at some point in our lives. It's actually it's a big number, 70%, seven zero. 70% of us are going to need some form of long term care. And that could mean in home care, you know, where you've got someone who comes to to help you with those activities of daily living, right? Those ADLs, as they call them, the things like, uh, bathing, um, you know, going to the bathroom, all those type of things, feeding yourself and all that, that stuff. Um, or, you know, assisted living or nursing homes where all of that stuff is, is taken or most of it, especially if assisted living, you know, some of that stuff will be taken care of, but nursing homes will be mostly taken care of for you, and the costs for long term care can really, really vary. And it ain't cheap. It is not cheap. On the low end, costs can range from about $64,000 a year for assisted living to over $116,000, $116,000 a year for a private room in a nursing home. And the reality is, too, that LGBTQ+ folks are going to rely more, at least are likely to rely more on partners, friends or community that chosen family structure instead of children. Because, you know, obviously we're less likely to have kids than we are to have other chosen family, maybe nieces and nephews and all of that.

Speaker1:
But that particular dynamic makes planning for long term care even more important. And so you got to have a plan to pay for your long term care. It's better. It's one of those things that's it's better to have a plan in place. It's better to have coverage in place if you if you need that coverage, it's better to do that and not need it than to need it and not have it. Right. And so this is so important. The options to do this I think this is going to be stark for you, because the options to to be able to pay for your long term care in retirement would be option A self-funding pay for it yourself out of pocket. Okay. Um, how many? You know, millions. Can you can you set aside for that? That's the most difficult one. Now, if you're doing well and you have got a big pot of money and you can take and rope some of that off, put that in another account so that you are taking care of that. You say that. Okay. This is my long term care fund. Fine. If that works for you, you can do that. It can really drain that savings very fast, though. And you've got to be, you know, another one of those things I talked about, longevity risk that you have to overfund that account.

Speaker1:
Make sure that you take into account what are the average costs now? How much is inflation likely to average over the next however many years? Um, and then what are the costs going to be then when I may or may not need that, you know, that money to go toward my long term care. It's a complicated way to do it. Uh, you know, it is possible. It's an expensive way to do it, but it is a way to do it. Long term care insurance is another possibility. Those are policies that are designed just to cover those expenses. Um, now, one of the things is those policies kind of are few and far between the standalone policies these days, and they can be pretty expensive. Um, but again, better to have it and not need it than need it and not have it. If that's an option for you, you know, we can look and see. Okay, is there a long term care plan that's out there that could fit the bill for you? And yes, I'm a licensed life and health agent as well in, uh, in the state of Georgia, which is where I live, and in Washington state, kind of semi-randomly but in Washington state, I worked with clients there before. Um, and so I've gotten licensed there. I will gladly, uh, get licensed in any state. If you live somewhere else, I can get licensed as a non resident, uh, agent in that state and then help you find a policy that's good for you.

Speaker1:
So long term care insurance is a possibility, but again, it's becoming more rare and it's becoming more expensive. Then there are hybrid policies, life insurance plus long term care or annuities with long term care riders. Those are things where, you know, with like a life insurance plan. It's not just about the death benefit anymore. There are living benefits there. Long term care, um, policy or long term care coverage, I should say, could be one of those things that is a living benefit. So if you're confined, as I said, to a long term care facility for a certain number of days, or if you were unable to perform certain activities of daily living, the things like feeding yourself and, um, transferring yourself from one place to another, uh, going to the bathroom, bathing all of those things. Um, then that coverage could kick in and cover expenses for either in-home health care or you going to a healthcare facility. And so that could be something that would be very advantageous for you if it's right for you, if it's the right option for you. Bottom line, though, is for long term care, I mean. Planning ahead means that you will not leave your partner or your loved ones. In a financial bind. That is the bottom line here. All right.

Speaker1:
So if you want to explore those options I want you to give me a call once again. 85524692178552469211. Go to take pride in retirement. Com that's take pride in retirement. Com to connect with me there. You can actually schedule a consultation directly in the old uh the old website. You can click on schedule a consultation. It'll take you directly into my calendar, shows you my real time availability, and just set an appointment with me. I would be glad to talk to you via zoom or in person if you are in the Atlanta metro area. Um, we can even, you know, talk over the phone. We can do, you know, kind of any of those options. Um, I'd be glad to do it. All right. So quickly here, um, just the last few minutes of the show, I want to mention, and I've mentioned them in passing in a couple of different ways, and that when I was kind of putting the show together this week, it made me realize, oh, yeah, I can mention annuities here, and I can mention annuities there, and I can mention annuities in this other place. And so it just sort of highlights how versatile annuities can be. And so I sort of like to refer to annuities as the Swiss Army Knife of Retirement, because they do a lot in one package. And so, um, you know, there's sort of the basics of annuities and how they work.

Speaker1:
And I'll go over that briefly here in just a second. But they can do a lot more than just those, those basics. And you've got options when it comes to annuities as well. Sometimes annuities get a bad rap. That's because either people don't understand them or they're thinking about the way annuities used to be many years ago. Annuities are not that way anymore. Where it used to be, you would give an insurance company money, and then they would start giving you that money back in the form of regular payments, but they would charge you a fee for the privilege of getting your own money back. And then if you died before all that money was paid back to you, the insurance company would just keep the money that was left over in the account. Does not work that way at all anymore. So what happens now is you make payment. Usually it's a lump sum. Sometimes you know, you've got an option to to make several payments into an annuity. Usually it's a lump sum. And what you do is you make that payment to the annuity. It's either got a guaranteed interest rate in something like a fixed annuity, um, or it's a fixed indexed annuity, which is, uh, tied to a market index tied to the performance of a market index without being directly invested in the market. And so you've got the upside potential of market growth without the risk of being invested in the market without that downside risk.

Speaker1:
Right. And or it could be, um, a vehicle that I don't really like to use called a variable annuity. And the reason I don't like to use variable annuities is because I like guarantees. Right. Like as many guarantees as possible. Control the things you can control. Right. And with a variable annuity, so many of the things you can't really control um because variable annuities are like fixed indexed annuities tied to a market index, but they're actually invested directly in the market. And so that means, yes, your money has the upside potential and potentially a greater upside potential than a fixed indexed annuity. But you've also got the downside risk if the market goes down. You know, think about people who may have had a variable annuity circa 2008. And they were just in a very bad way right after that because of the losses in the market, maybe they weren't able to retire when they wanted to or had planned on because of the losses in the market, and they thought they were going to have this guaranteed income stream from this annuity. But wait, there's more. And by there's more, I mean, there's less. There's less money for that guaranteed income stream. So if it's not going to be enough for you to live on, then you got to wait. So yeah, you take that risk as well. I like to work with fixed indexed annuities or a fixed annuity, pretty much in the form of a midget, which is a multi year guaranteed annuity because there are some of those that have really high interest rates right now, even though the signals are coming from the Federal Reserve that interest rates are going to come down.

Speaker1:
We've still got some pretty darn high interest rates in the mygas, which kind of sort of operate like bank CDs. You get a guaranteed interest rate credited to that account over a certain number of years. Um, but one of the things that an annuity is really good for is. Being a personal pension, essentially. It becomes a personal pension. You make that payment. Like I was saying, that growth is then, you know, tied to a market index or gets that guaranteed growth or is actually in the market. Um, and then over time that number will grow that that base will, uh, will grow the income base, the contract value, uh, and the income base, however you want to look at it, there are different terms and all that stuff. But basically your money's going to grow over time with a with a variable annuity. It's not guaranteed, obviously. And with a with a fixed indexed annuity, growth isn't you know, like growth period isn't guaranteed, but you're not going to lose your money because you're not tied to a market index. Your principal is protected. And so it offers that protection of principle tax deferred growth.

Speaker1:
Because you can do it. You can you can, you know, put money in via a rollover from an IRA or a 401 K into an annuity. And then you get tax deferred growth. There's no taxable event there. You get tax deferred growth for however many years. And then you can take that money at a certain time whenever you elect to take it, turn it into an income stream. And then that is guaranteed lifetime income income that you are never going to outlive. And so you can think of them like a personal pension, a private pension that you fund and create for yourself. You know, Social Security's future is uncertain these days. Um, they're going to have to do something within the next decade or less to make sure that, uh, the, um, you know, benefits are shored up, that they don't have to be cut as a result of the trust fund being, um, you know, drained, essentially. And so, you know, and then recent events, especially this latest budget bill and spending bill in Washington, did not do anything to shore up Social Security at all. And so, you know, In volatile markets as well. And obviously the markets are up um, over time. But they are have been very volatile this year. They've been you've seen wild swings in the market. And so when you've got a guarantee like a guaranteed stream of lifetime income and that that knowledge that your principal is not going to go anywhere, that that is protected, it can really give you a lot of peace of mind.

Speaker1:
And a lot of people are investing in annuities these days. I mean, sales hit a record high last year. And it's no wonder because people are in a place where they want some assurances and some guarantees and stability. Here's the thing, though, that I will say about everything that I've talked about on the show today, it's not one size fits all, annuities included. You know, one annuity that's great for somebody in in their situation may not be great for somebody in another situation. You know, I mean, I think the youngest client that I have right now is, is 31 years old, you know, and then I've got clients in their 70s. Well, what's right for that person at the age of 31? And yeah, I do have that person in an annuity. But it's also, you know, in the most aggressive, uh, investment allocation, asset allocation under the hood that's possible with that particular annuity. And you know, he's made a made a smaller investment into it so that that can really take off and grow over time. He's just planning on letting that sit and grow for the next couple of decades, and then seeing where things stand and maybe making some adjustments there. But that type of investing, that particular annuity I would not recommend for a client in their 70s, I would recommend maybe something else that is going to still get them growth and maybe get them, you know, that guaranteed income that's going to be the goal is to get guaranteed income, income that you can't outlive.

Speaker1:
But it's going to be different than what I recommend for the person in their 30s. So it all depends on you and your individual situation. No matter how far you are from retirement, how close you are to retirement, no matter who you are, where you come from, who you love, how you identify, or how much money you have. This is a situation where I just want to help you. I want to help you achieve that retirement that you can take pride in and get to a point where you really feel like, yeah, I can, I can retire, I can do this, I can do this and do it in a way that I'm proud of, that others are proud of me for, and that I have taken all these things into account. I know my my risks that I face financially, and I've planned for all of those different risks that I face. And I've worked with someone who is also a member of the LGBTQ+ community, who understands it, who gets me, who gets the unique challenges that I face as an LGBTQ+ plus person. So I would encourage you to reach out.

Speaker1:
Take pride in retirement. Com is the website take pride in retirement. Com or call (855) 246-9217. It's (855) 246-9211. It's free. That initial consultation absolutely free of any cost or any obligation. I cannot wait to talk to you. Um, I really hope that you will reach out. And I also hope that you'll spread the word. Like I said at the beginning, um, spread the word about the show. You know, tell your friends if you if you loved it, tell your friends if you didn't love it, tell your enemies. And, uh, just, you know, be a part of what's a growing community of folks who are looking to make their lives better and looking to achieve that retirement that they can take pride in. And and you can do it, too, and you deserve it. You deserve a retirement you take pride in no matter who you are. Well, that's going to do it for this particular edition of the show. Thank you so much for being a part of things once again. This time around, I really, really do appreciate it. Um, you know, I cannot wait for, uh, the next episode. I think it's going to be a great one. I've already got ideas flowing and in the works, so make sure that you are subscribed. Like the videos on YouTube. Um, leave us a great review wherever you listen or watch to the show and follow me on all the socials. I would really appreciate all of the above. Until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker2:
Thanks for listening to Take Pride in Retirement. Members of the LGBTQ+ 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 investment advisory services offered through Brookstone Capital Management LLC. 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 and 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.

Speaker1:
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 to item four for additional information. 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. Information provided is not intended as tax or legal advice and should not be relied on as such. You are encouraged to seek tax or legal advice from an independent professional.

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