Results in Advance: Reducing Fees & Creating Guaranteed Retirement Income (Part 2)

Episode 88: Audio automatically transcribed by Sonix

Episode 88: 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 there, and welcome to another edition of Take Pride in retirement. How you doing? I'm Matt McClure, your host, your advisor, your friend, your pal and your confidant. Thanks so much for being a part of things this time around. I really do appreciate it. As always. You know, this is not only the podcast, but also the YouTube show. If you are unfamiliar with our YouTube channel, go search for Take Pride in Retirement on YouTube. Or if you're watching me on YouTube, hey, I'm waving for those of you who are listening and can't see. So there you go. That's the excitement that you just missed was me waving. Um, but I'd appreciate it if you would like this video, if you would subscribe to the channel, that would really, really help me, uh, subscribe to the podcast as well. No matter where you get your podcasts, you're going to find us there. Take pride in retirement. Follow us. Both places like episodes like, uh, the channel, like all of the things do all the likes and all the subscribing that you possibly can and help us spread the good word. I'd really appreciate that. Um, and this is all about the LGBTQ plus community. That's what the show is about, helping you plan for retirement you can take pride in. And so, um, I want to help you retire successfully. I want to help you retire. So you have that feeling of freedom, so you have a feeling of security.

Speaker1:
So you have that feeling that you can live life on your terms in your retirement years. We're talking about tax efficiency. We're talking about fee efficiency, market efficiency, all of those things inside your portfolio and maximizing your Social Security benefits, doing away with those outdated sort of rules and suggestions that might be, uh, things that you still here, right. If you hear that about the 4% rule, something I mentioned on occasion here, maybe a 4% rule, 4% withdrawal rate in retirement, maybe that will work for you. Uh, you know, maybe chances are it won't, because it's kind of an outdated idea. Maybe it used to work for more people decades ago, but these days, not quite so much. So that's something to keep in mind as well. And it's not just about the money here on this show. Yes, it's a financial podcast and YouTube channel, but it's more about you helping you live with authenticity, helping you live the life that you deserve and that you, you know, have have worked so hard to achieve. And helping you do that in retirement so you can do what you want to do, whether it's, you know, you and your partner, your husband, your wife or whomever going off to Bora Bora and spending a month each summer like that, great. Or if it's sitting on the porch sipping a mint julep or whatever you want to do, no matter what, you deserve to do that.

Speaker1:
And so I want to help you achieve those goals. Thing to do. Go to take pride in retirement. Com or take pride in retirement. If you go to take pride in retirement. You can actually reach out to me. Get a free copy of an ebook that was written by a colleague of mine. I wrote the afterword for that e-book as well. So you get to hear my wise words or read my wise words, I should say. Um, and then also you can, uh, you know, when you reach out, you can say, hey, get back in touch with me. I'd love to schedule a free consultation During that consultation, they'll take a look at your individual financial situation and I'll take a look at it under under a magnifying lens and give it the once over with a fine tooth comb, in other words, so that you will know where you are. I'll give you all kinds of analyses and reports and show you you know, what you have now and how that would map out to your 95th birthday. The projections for that, and then show you projections for a recommended plan out to your 95th birthday, and how that would work out for you. You can compare the two. If our recommended plan is better for you, chances are it will be, you know, uh, but if I do say so myself, chances are it will be.

Speaker1:
But, uh, not always. If it's not, you know, I'll just say, hey, you've got a good thing going. Keep going with that. Right? Or if it is better, I'll say, look, you can work with me. We can help achieve your goals together, right? So that is really what it's all about. Now on to the topic of today's show, it is all about getting to some guarantees in retirement, and especially it's kind of part two of our previous episode that we did. So that's kind of the follow up, the part two, the second half of our discussion about results in advance retirement planning taxes we talked about last time. Step one tax planning. Right. So, you know, getting uh, to as, as small of a tax burden as you possibly can, uh, in your retirement years, going ahead and planning for that in the, uh, in the future. Um, and then also, you know, taking a look at today's taxes, maybe how that will, you know, doing something like a Roth conversion or whatever today could affect your taxes today and not just in the future. So we took a look at kind of all of those different things. If you haven't listened to it or watched it on the YouTube machine, uh, then go back and do that really is kind of lays the foundation for today's discussion. Um, because you know what? We're what we're talking about over these two episodes.

Speaker1:
The through line here is retirement not being about how much you've saved, but more about how confidently you can live on the money that you have saved and how you turn that into income that you can actually live on. Right. So we talked about taxes, as I said last time, this time around, we're talking about. So that was kind of step one right. Step one is minimizing taxes. Step two eliminating unnecessary fees. Do you even know. Do you even have an inkling, an idea at all about how much you're paying in fees? I can hear the crickets now. You probably don't. You might think that you do actually as well and say, oh, well, I pay my, you know, if you have an advisor now, you might say, oh, I pay my advisor X amount of fee, a percentage or a flat fee or whatever it is. Okay, good. So how much you pay in fees? Because that is not really the answer to that question. Um, the advisory fee is usually, in a lot of cases, just one layer of the many layers of fees that you could be paying without even really knowing it. So you've got the advisory fee. If you've got a lot of mutual funds in your investments, chances are kind of under the hood, so to speak. You're paying a lot more fees because you've got, you know, fund management fees and those kind of things that are being paid underneath that you might not see, but they get shaved off the top of what you would be earning because, you know, the fund managers, they got to make a living too, right? So one of the things that we like to do is minimize your fees as much as possible.

Speaker1:
And a lot of people in the in general, but in LGBTQ plus folks to, uh, never really were taught how to know what they're paying in fees, you know, I mean, I remember when I was in school, it was like, here's how you write a check. And that's, you know, even antiquated now. But it's like, here's how you write a check. And that was sort of the extent of our economic teach teaching in class or learning. That was all the learning that we did, as far as, you know, economics and personal finance and all that stuff, how to spend, how to how to write that check. And, um, that was essentially it. So we were never really taught how to do anything else to evaluate fees. Certainly trusted institutions have not always protected us either. So there's that part of things to take into account. And so fees are something to watch out for because as I sort of alluded to a moment ago, they quickly can drain your income. They can quietly do it as well, because it's happening out of sight, out of mind, especially dangerous in retirement, right? If you're just trucking along and saying, oh, I got all this money to live on.

Speaker1:
I did such a great job saving, and I'm going to live on this for the rest of my life, and I know I have that X amount of money. And then you say, oh, well, I've got to pay this much. And as we talked about last time around, taxes, as we're talking about this time around fees, um, those are things that can really just destroy your retirement plan unless you've planned properly. And so, um, you know, if you take the amount of your investment and then you take the amount of fees that you're paying, you divide those and you come up with an expense ratio. That's the probably the simplest, um, way that I can explain quickly how to come up with an expense ratio. And you want that number to be as low as possible. So you want to make sure that your expense ratio is as low as possible. And when you work with us, actually what we'll do as part of that analysis and stuff that I was talking about earlier is that in that free consultation, we run an analysis on your expenses, and we'll tell you exactly how much you're paying right now in fees, and then we'll show you what the expense ratio would be if you would work with us. You can kind of compare and contrast the two, and then you can use that as part of the decision making process.

Speaker1:
And so, you know, expense ratios are something that can be kind of wonky sounding. They're really fairly simple. And so you want to sit down and talk with me, take pride in retirement. I can help walk through that. Right. Take pride in retirement if you want to get your plan going today. Um, also, you know, we can and we'll talk about this momentarily. But one of the things that you want to kind of think about doing, especially because things have changed in the bond market so much over the past few years, you know, they used to have a negative correlation with the equity markets, right? So stocks would go up, bonds would go down, bonds would go up, stocks would go down. That's why the whole 60 over 40 portfolio was a thing. There was an inverse relationship right. Or negative correlation where they would behave in the opposite way. Well they've started kind of moving in tandem a lot more frequently over these past few years. And so, um, you want to get rid of those underperforming bonds if that's been the case for you, because they still even though they're underperforming, they still charge fees, that portion of your portfolio. So we want to introduce a bond replacement strategy. And that kind of is a is a good segue. It's almost like I planned it this way.

Speaker1:
Um, it's a good segue to go into something called a fixed indexed annuity, which is part of this next section. So the bond replacement would happen with a fixed indexed annuity, perhaps, if that fits in your plan. I'll talk about exactly what that is in a moment. But I wanted to say this though, because I think this is a just a really powerful thing to keep in mind. It's your money, and you shouldn't have to guess how much it costs you, right? You want to minimize fees as much as possible and know what those fees are so that you're not guessing how much your own money is costing you, right? If you don't know what you're paying in fees, that's not your fault. But it is fixable. Take pride in retirement. Take pride in retirement. Com is the website. Go there. Click get your plan and get your plan. All right so step three I talked about this a second ago creating guaranteed income. A couple of things that you want to do here. First of all you kind of need to shift your mindset as you head into retirement. Because even though you've been working all these years, you've been saving up, you've been investing, you've been doing all the things right. To save up this big nest egg. That's great. Then you get to retirement and you're handed this big pot of money and they say sayonara from the workplace or from wherever.

Speaker1:
They say just. Yeah, bye bye. And then you say, okay, well, I got this big pot of money. What in the world do I do with it? Um, you know, you got to turn that into an income stream. And don't just spend it willy nilly and be like, okay, well, I got this big pot of money. I might as well go off and take all these trips to Bora Bora or wherever in the world I want to go and not, um, actually have a plan to go along with it, right? So the nest egg is not a paycheck, and income is really where it's all at in retirement. And so, you know, it used to be that you would work for a company for 40 years or however long, and then you'd retire, you'd get a pension, which is income for life, and you get the gold watch and they'd say bye bye, and you'd go off along your merry way, and you would have pension income for the rest of your life, and you could layer that on top of Social Security or whatever, you know, whatever other sources you might have, any savings, any other investments outside of that. But you had that foundation. Well, pensions have pretty much gone the way of the dinosaur. And so what can you do? Create your own personal pension and the way that you can do that? One way that we like to do that a lot is with a fixed indexed annuity.

Speaker1:
And that is a vehicle that does a few things for you. It protects the principle that you put into it from market downturns. Right. So that money. So you put in $100,000, whatever it is, more or less maybe, but $100,000 will just use for ease of illustration purposes here. It offers that $100,000 protection from any downturn in the market. Right. So you've got that downside protection, but you also have that growth inside that fixed indexed annuity that is tied to a market index. So maybe the S&P 500. And so you can reap a portion of the gains in the S&P 500 over a year over year basis or every two years, whatever the case might be. However, often it credits the growth to the annuity. Then you've got that. So that market like growth, because it's tied to an a market index, but it's not actually invested in a market index. So that's how they give you that principal protection there. So that $100,000 is safe. So you get the upside and not the downside at least a good chunk of the upside but not the downside. The growth can be tax deferred as well according to whatever tax treatment. We can treat it just like a 401 K or an IRA. We can give it that sort of tax treatment. And so you can get tax deferred growth. And then when you get to retirement you can turn that into lifetime income that you cannot outlive.

Speaker1:
That is what lifetime means the rest of your life. So you can say I want to turn, I want to flip a switch when I retire, and then I want to turn this into an income stream where I know that checks coming every single month. That's why it's a personal pension. It is income for life. So, you know, I mean, longevity risk is real. You know, the risk of outliving your money. Definitely a real thing. Solo retirees also need a lot of income certainty. If you are someone who is maybe partnered or you know you have your finances separate from your partner, though maybe you are single by choice or otherwise. Um, then that can hit you harder because you need guaranteed income sources in retirement. Social security is going to be one of them, and I believe it's going to be around no matter what happens. Because talk about political suicide. That would be it if lawmakers did away with it or let something happen to it. Otherwise could be some reductions in benefits going forward. But I just believe personally that they'll find some way to keep things pretty much as they are. Um, and shore that up. But you need guaranteed income for the rest of your life, no matter what the source is. And, you know, survivorship planning also matters a lot as well to LGBTQ plus folks.

Speaker1:
So for many retirees in our community, certainty is not a luxury. It's not just a thing that would be nice to have. It's a thing that you kind of need to have, and it can give you a lot of peace of mind. So, you know, guaranteed income stream for the rest of your life, lets you live your life and not constantly kind of monitor the market and, you know, waste all your time worrying and getting more gray hairs and more ulcers. And maybe the the hair is turning gray or turning loose, you know, go to take pride in retirement. Take pride in retirement. That is the website you can go to take retirement plan as well. Get your plan today. All right. So what have we talked about these last two episodes? A couple of things. We've talked about giving you guarantees as much as possible. It's that kind of dirty word in the financial industry. Right. Guarantee. Oh, he said that he said the G word. Yeah I did, and it's something that you can get only in certain places. I'm not talking about market based, uh, you know, completely in the market, uh, investments. I'm talking about things that come with guarantees based on the claims paying ability of an issuer. Right. So we only use a rated issuers or higher for the vast majority of our dealings in those types of investments. And we can talk you through that when you when you meet with me.

Speaker1:
Um, so, you know, that's that's kind of number one. It gives you peace of mind, it gives you that foundation. It gives you those guarantees. We also talked about minimizing your taxes, minimizing your fees in retirement, and also giving you that that guaranteed income so that you can have a retirement. You can take pride in the big three steps there. Minimize taxes, minimize fees, get guaranteed income. That is really at the crux of what a results in advance retirement plan is. And I'm glad to, over these last two episodes of the show, have been able to present that to you. And I hope that you got something from it. All right. If this sort of little mini series of episodes here really helped you and really helped you see retirement differently, you know, let's talk. My job is to help you get rid of that uncertainty, replace it with clarity so that you can leave your retirement with pride. You can be in control of the things that you can control. And there are things out there I know that we cannot control. Trust me, I know I probably have a few more ulcers these days, but control the things you can so that you can have more peace of mind than you would have otherwise. You know, maybe we can't make the world perfect, but we can try and respond to the craziness as much as we possibly can and control the things we can.

Speaker1:
That really is what it comes down to, right? Again, take pride in retirement. Take pride in retirement plan. You can get your plan. You can get a free e-book there as well. You can also call me at 5524692 11 (855) 246-9211. Is that number. Well that's going to do it for this time around here on Take Pride in Retirement. Thanks so much for being a part of things I'm Matt McClure. Thanks for joining me. Each and every time we get together. I really do appreciate it. Spread the word again. Like this video. Like this podcast. Subscribe to the YouTube channel. Subscribe to the podcast feed as well. You'll be alerted each and every time there are new episodes of the show, especially on YouTube. If you sign up for notifications, make sure you've got that notification bell clicked so that every time a new video gets uploaded, you get a notification and you don't miss a thing because you know you don't want to. Is was it Aerosmith? I don't want to miss a thing. There you go. You don't want to miss a thing. Yes, I grew up in the 80s and 90s, as you can probably tell. All right, folks, that is going to do it again for this time around. On take pride in retirement. 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. 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 and sold through individually licensed and appointed agents. Matt McClure, an 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 Advt 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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