Summertime Money Moves to Make Now

Episode 18: Audio automatically transcribed by Sonix

Episode 18: 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 plus 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 once again to take pride in retirement. I'm Matt McClure, your host, your advisor, your good friend, your pal, your buddy. All of the above. At least I hope so. Uh, these days. Appreciate you taking some time to join me. I really, really do. You know, I, I know a lot of people might just say that, um, that they really appreciate you joining them and taking time out of your busy day to to do things that involve them. But I absolutely mean it. Um, it means a lot to me because I, I put a lot into the show. And just knowing that there are people out there, um, who are getting something from it really means a lot. And so I encourage you go to take pride in retirement.com. Um, and then send me a message. Let me know that you get something from this show that I do, uh, on a regular basis here. All rights, take pride in retirement.com. That is the website. You can also email me directly just Matt at Take Pride in retirement.com. You can also give me a call no matter where you are 855246 9211 (855) 246-9211. You can comment on the show. You can say, you know, you can ask questions. You can say, hey, answer this question on the show. You can, you know, talk about, you know, your cute dog, like whatever you want to do. Or you can also, most importantly, schedule a free consultation.

Speaker1:
And when I say free, I mean free of any cost, also free of any obligation. It is a no obligation consultation of your particular financial situation. I will analyze what you've got going on right now, and I'll give you a plan to make it better. Financial plan all the way out to your 95th birthday with your current portfolio and with your portfolio that we recommend. So all of that is, uh, can can be yours if the price is right. And it is because, as I said a minute ago, it's free. So there there we have it. Um, got a great, great show for you today. And I mean you, because no matter who you are, no matter where you are, no matter who you love, no matter how you identify any of the things, any of the divisions that we like to put in ourselves between ourselves, I should say you deserve a retirement you can take pride in. And so some great, um, content for you today, and hopefully you'll get something out of what we have. Um, also, by the way, subscribe to the podcast if you haven't already. We'd love to see subscriber numbers go up across all of the platforms. Uh, really appreciate you doing it. If you have done it already, leave us a rating. Big thumbs up. Whatever the particular rating system is on your podcast platform of choice, I would love that.

Speaker1:
Check out our YouTube channel as well. It's take Pride in Retirement. Uh, search for that on YouTube and you'll find us immediately. All right. And don't hesitate once again to reach out with any questions, because I want to help you. That is what the show is all about. And that is what I am all about each and every day. Well, today I'm going to ask a question how much has your nest egg grown? And I've got some to dos. Once you get to a certain milestone, I'll talk about the milestone in a minute and and talk about some caveats that I'm going to put on that because it's really good advice for everybody and not. And when I say advice, I mean general information. I don't mean advice that's specific to you and your situation. That would be fiduciary financial advice. I am a fiduciary advisor. So when I give you individualized information, it has to be in your best interest. Well, now on the podcast, I can't really be doing that because I don't know your particular situation. So this is general information and education and all of that. And it's, you know, for for mass consumption. Right. But when we meet and we do the whole, uh, consultation thing, I can give you information about your particular financial situation and how to make it better. Okay. So that's that that's what we're going to start off with here in a few minutes.

Speaker1:
Also going to talk about an inflation demonstration. We've got um target lowering some prices and also some information on how much inflation has gone up over the past couple of years according to some new numbers here. Um, I don't know if you've ever seen the show, the TV show MythBusters, I you can ask my husband. You can ask my best friend. Um, I love that show. And I used to watch it just. Really. Religiously, like any time I was just, you know, kind of bored or or had a lazy day at home or even, like, after getting home from work at night, like I would just I would watch MythBusters kind of nonstop. And so I loved that show. I am sad that, you know, of course, the original cast left, and then I don't even know if it comes on anymore with the new cast. But anyway, I'm going to bust some myths of my own. It's going to not involve blowing things up, but I will bust some myths of my own here. Also, have a couple of listener questions to get to and talk about how retirees are feeling today about their retirement in the old US of a. Well, speaking of the old US of a, a bit of a patriotic twist on the quote of the week here to get us started. So let's do that to start off our conversation.

Speaker3:
And now Folsom Financial Wisdom. It's time for the quote of the week.

Speaker1:
And this week's quote comes from a great president of these United States, John F Kennedy. Yeah, JFK, who sadly, was of course, assassinated in 1963 but was president from 61 to 63. And he said this the time to repair the roof is when the sun is shining. I love that. It's a simple quote, but it says a lot. The time to repair the roof is when the sun is shining. Because if you wait until it's raining. Then it's too late. You're already getting wet and you're just trying to play catch up. And then you've got you've got wet furniture in the house and all of that. So when you apply that to finances. Let's say the time that it's going to be raining is your retirement years. If we just sort of extrapolate from the the analogy here. And so the time that it's going to be raining is in your retirement years, while you want the protection of that roof then. Right. So you've got to work on it, make any repairs that you need, make sure that you do the little things along the way to make sure that you are ready. For your retirement years, and that you are not going to be caught off guard, that you are going to be prepared with a plan in place, with a plan that is built for you specifically. And it's just great. I love that quote because as I said, it's simple and it says a whole lot.

Speaker1:
So thank you, JFK for getting us started with some inspiration for our conversation today. Um, and so some of the things that you can do to repair your roof or what we're going to talk about now, I mean, this came from a Yahoo Finance article that I found and, um, six things that you should do. They had an article that had some longer, uh, more things. But what I did is sort of pared it down and took some of the top ones. And so I've got six things that you should do when your nest egg reaches $250,000 now. Do not let that scare you if you're not quite there yet. If you're not to that $250,000 mark in your retirement nest egg, if you're well above that, don't make that, uh, make you want to tune out, you know, let it inspire you and give you some encouragement of things that you can do before you get there. If you've already gotten there and surpassed that $250,000 mark, maybe, perhaps these are some things that you have not done quite yet. So no matter what the size of your nest egg, this is for you potentially. So everybody should be able to get something out of this. And um, let's just tackle it, shall we? Six things to do when your nest egg reaches 250 K or above or below.

Speaker1:
So almost any amount. Here we go. Number one, use the proper accounts to save for your retirement. I mean, of course you want to be. You don't just want to be putting money away in random, you know, low yield savings account or even high yield savings account because, yeah, I mean, your money will be making money. If it's in a savings account, but it's not ever going to keep pace with inflation. And you're not going to see growth that is going to be meaningful to the point where, oh, I can actually go and use this for my retirement because there are other vehicles that are going to give you so much more growth over the long term job related programs. For example, consider, you know, building assets outside of the traditional job related programs like your 401 K. Because those are going to be something that will saddle you with the future tax burden. You're not paying taxes on it now, but you will pay taxes on it later when you make the withdrawals in retirement. Right. It's pre-tax money now. But I'm not saying don't contribute to your 401 K. Absolutely do contribute to it. Make sure you do enough to get your employer match, but diversify beyond that. Right. Consider a Roth IRA that is, um, a tax advantaged account, much like, you know, a 401 K as a tax advantaged, tax advantaged account.

Speaker1:
They're just tax advantaged in different ways. So where the with the 401 K, you don't pay taxes on it. Now that money is taken out pre-tax. Right. And put into your 401 K account and then it grows, you know, with the market, whatever funds you're invested in and all of that stuff. And if you want to see that, you know, of course you can go to your 401 K provider. And go to the website, log in there and you should be able to see all of that information. So you've got that. Then, on the other hand, you have a Roth IRA, which you contribute to with after tax dollars. But once you're in retirement, there's no tax when you make those withdrawals. There are some caveats there. Of course. It's got to have been in place for five years. And, um, all of that, like the account has to have been in existence for over five years, or at least five years, I should say, and some other things. But when you make those withdrawals in retirement, they're not going to be taxed. So tax free income in retirement. Boy that's great. You know the best kind of money. Free money. The second best kind of money. Tax free money. Music to my ears. Uh, number two here on the list of things you should do when your nest egg reaches 250 K or thereabouts, be mindful of taxes.

Speaker1:
Speaking of which, and how they're going to affect your future. Now, as I was just saying, you know, we often think about taxes. Now, of course we go you go shopping, you pay sales tax and it differs county by county. Um, at least here in the metro Atlanta area, it differs county by county. It can be a big swing. I, you know, used to live in, um, in new Jersey. And then there wasn't a sales tax there in Florida. There was no, you know, income tax on the state level. So it's like there are different rules and regulations in different places. But when you're planning for your future. The big thing that you want to be looking out for, of course, is income tax. Is this going to be taxable as income in retirement? And understand how the withdrawals from those retirement accounts could place you in a higher tax bracket during retirement? So if you have a higher income you'll be in a higher tax bracket. And then therefore whatever is taxable you can be taxed at a higher rate as a result. So don't get yourself into sort of a false sense of security by saying, oh, I have $100,000 in this account, this maybe this 401 K. Like, no, not really. You got maybe $80,000 because the rest of it will belong to the government because that's the amount that's going to be taxed thereabouts.

Speaker1:
Right. And those are just example amounts that don't really mean anything other than an illustration. Right. I'm not trying to say this is you. This is, you know, for your particular situation or anything like that, but. What you want to do is balance your tax buckets. Right. And so let's imagine you've got three buckets. Well I find and here are their here are their labels on those buckets. Right. You've got tax deferred. You've got taxable and you've got tax free. So many people have too much money. They're mostly invested in tax deferred retirement accounts. So that's like your 401 K. As I mentioned a minute ago. Other examples would be a traditional IRA, a 403 B, a 457 a Sep or a simple IRA. Those are some of these accounts that are made with pre-tax contributions. So they don't get taxed now, but it gets taxed later. You get taxed on the harvest rather than on the seed in the beginning. Now taxable buckets the taxable accounts rather are investment accounts that are outside your traditional retirement accounts. So that's maybe a brokerage account something something along those lines which is you invest in that with after tax dollars. And then in the future it's also going to be taxed right after the the growth happens. So it's taxed on the beginning and in the end. Then there is my favorite of these three buckets the tax free bucket investments like the Roth IRA.

Speaker1:
As I was mentioning a few minutes ago, an indexed universal life policy. Yeah, I said life insurance. It's tax free. And not only a tax free death benefit, but this particular type of life insurance policy that I'm talking about, indexed universal life, is something that you can use to create a stream of income in your retirement years. And. Basically, it's by making taking loans periodically from the life insurance policy. And those are loans that you never intend to pay back and and never have to. I can explain how all of that works. Of course. Just go to take pride in retirement.com contact me and I'll let you know all about it. All right. And of course we'll talk about it on future shows as well in a little bit more depth. But I mean, Roth IRAs and life insurance are the only two truly tax free investments available today. And it's important really to get your 401 K or whatever investment accounts or retirement accounts you have working as hard as you do. You want to be having your money work as hard for you as you work for it, right? And so I really want to invite you to give me a call or go to the website and get a free 401 K review so that I can put it through an analysis, analyze any fees that you're paying, the risk you're taking, the overall performance of your portfolio.

Speaker1:
Just give me a call 855246 9211 (855) 246-9211. You can also reach out at the website. Take pride in retirement.com. All right. Number three is to diversify whenever possible. Mentioned this a little bit earlier being diversified in different types of accounts. You also want to be diversified in different sectors. Of course in your in your stock portfolio you don't want to be all in tech or all in, you know, healthcare stocks or all, you know, whatever. You want to diversify across everything, but you also want to be invested in different types of accounts to diversify things. So you want to be invested in things like stocks, fixed indexed annuities, migas, which is a multi year guaranteed annuity, um, brokerage CDs, for example, uh structured notes, maybe real estate also, which is another great investment of course. And that would be to manage and the risks that you might otherwise be facing, because the more diversified you are, the less risk you are taking that when if one of those accounts goes south or one of those sectors goes south and the bottom just falls out, you're protected because you are diversified. You don't have all your eggs in one basket, right? You want to enhance your overall growth potential by diversifying. And, you know, I said, don't put all your eggs in one basket.

Speaker1:
Well, the same is true when investing for retirement, not just when you're at the grocery store. So when you diversify your investments, you reduce that overall risk of loss. Number four here is to incorporate steady income sources. And. And here's the thing. Some people who I won't name names because they're, um, more well known than me, but some people out there have been have spent years badmouthing annuities. And after listening to the way that they badmouthed annuities, um, it's because they don't understand the way that annuities work. And or it's because they focus on one particular type of annuity called a variable annuity, which I generally refer to as a variable annuity because it's not something that I would recommend ever at all. But because of that, because of the fact that variable annuities, they have high fees and, and other different things that really don't make it the don't make the juice worth the squeeze in a lot of cases. Right. Um, and your money is at risk. All of that money is at risk in the market anyway. So it's it's different than a traditional fixed annuity or a fixed indexed annuity, which I'll talk about momentarily. But because of the. Reputation that variable annuities have, and some of that is justified, of course. That means that these big name people have been badmouthing all annuities. They don't just say, oh, stay away from variable annuities.

Speaker1:
They say stay away from all annuities. And that's just wrong. That's just absolutely wrong. And that goes to show you, these people are making those types of blanket statements like that are not fiduciary financial advisors. They are acting like they are fiduciary financial advisors by telling you and everybody else to avoid this. Entire category of retirement planning. But. They are not. Because it is not. Fiduciary financial advice would be based on your particular situation, and that is not it. An annuity of any type might be great for some body's particular portfolio, but not great for somebody else. And the reason for that is because everybody's different. That's the reason for all of this. It's got to be personalized financial advice. So people who issue these blanket statements, oh, all annuities are bad. No, do not listen to them. They do not know what they're talking about. And or they don't offer them and or they don't, um, that they have skin in the game with some other type of investment or something else. And, and they, uh, don't like it for that reason because they're paid not to like it, for example. Anyway, enough about that. That's my little soapbox on the anti annuity crowd out there. Uh, but all annuities are not bad in my experience. Take for example, a fixed indexed annuity, which I just mentioned. They're pretty sophisticated investments.

Speaker1:
That can provide a stable income and reduce a percentage of your portfolio's risk to market fluctuations. So reducing that market risk by investing in fixed indexed annuities is something that I help people do all the time. And you can also, with a fixed indexed annuity, create an income stream, a personal pension for example from your fixed indexed annuity. In retirement, you couple that with Social Security if you're lucky enough to have pension income. Part time work. Maybe if that's what you want to do. Rental property, income and more. Then you've got multiple income streams in retirement. That gives you a lot of peace of mind, and that's something that you cannot put a price on. Number five is to protect yourself against inflation. See why I told you that this is something that not only if you're you're, uh, portfolio has reached $250,000 that you need to pay attention to. And pretty much everybody, as we've all learned, uh, needs to be looking out for this. Inflation is, uh, you know, has reared its ugly head for a couple of years now. And we want it to not do that, all of us. But the fact of the matter is, we can't really control it. These macroeconomic, um, issues are not something that you or I can control. But what we can do, what we can control, is having a plan in place to deal with inflation.

Speaker1:
And one way to do that is to regularly look and adjust your portfolio. Rebalance things. Do that periodically to maintain your alignment with your inflation protection strategy. Stay invested as well, because some people like to get emotional about investments. And look, don't don't invest with emotion. That's probably the worst thing that you could do. A lot of people fear the markets, they fear market fluctuations and and either resort to ultra conservative strategies like converting just all to cash. I'm going to put it in the savings account and be done with it, or worse, under the mattress so it doesn't gain anything, or they put it in a bank CD or something like that. You really should stay invested. Don't invest with emotion. Invest with your your brain and invest with your financial advisors brain. Right. Use use them. Which hopefully it's me. And if it's not go to take pride in retirement.com and and make it me okay. But you really should stay invested and that's to protect your future buying power because over time. The markets go up. You know, they've gone way, way up over the years and over the decades. So you're looking at long term investing is long term. This is not the Wall Street casino. This is not the the Las Vegas casino relocated to Wall Street. This is. Investing for the long term. And so you want to give yourself time to grow and doing that.

Speaker1:
You want to stay invested. You don't want to take funds out of a retirement account that could see a lot of growth and just make it, you know, I don't know, take away the potential future growth by getting out of the markets and getting into something that's not going to grow nearly as much. That's the bottom line. And when you protect a portion of your hard earned savings for your retirement with a fixed indexed annuity like I was talking about, you can let the rest of your portfolio stay invested so that it has the potential to grow over time with the market. And then the fixed indexed annuity itself can experience market like growth as a portion of the market's growth. Whatever index it's tied to, it's not actually invested in a particular index, but the growth in that account is tied to a particular index, say the S&P 500. And so when that index goes up, you get a good portion of that growth. When that index goes down you see zero loss. You've got that um protection the downside protection with the upside potential as well. So that's one of the advantages of something like a fixed indexed annuity. Um, and number six, this this one is my favorite. It is number six, and it's to meet with the financial adviser or a professional who can help. Um, I like that one, not just because it's what I do, but because I think it's really important.

Speaker1:
Right? If you have a financial advisor. Are they regularly reviewing your investment strategy, and are they involving you in that process? Because it's a two way street, it's not a one way thing. It's not your advisor just telling you what to do and you saying, okay, it's you know, when I work with somebody, it's I, they got to be comfortable with what we're doing. It's a two way street in that way. So what I like to do is at the very least annually review portfolios. I like to do it every six months, but review your investment strategy and your retirement budget and do that with a professional like myself to ensure proper diversification and risk management. Also set clear goals. And again, I'll say it work with your advisor to set specific, measurable goals for your retirement savings and your investment returns, specific goals and measurable goals that you need to reach along the way. And then, of course, if you miss one of those goals, or if something happens in the market or whatever you can, you can make adjustments as you go along because it's not a set it and forget it type situation. It is very much a set it. Let it do its thing, make adjustments along the way if needed, kind of a thing. And that's what happens when you work with a fiduciary financial advisor who works on your behalf, not anybody else's.

Speaker1:
And again, just call the number. It is 855246 9211 (855) 246-9211. You can also go to take pride in retirement.com that number again take pride in retirement.com. Or just email me at Matt at take pride in retirement.com. That's the email address of course. My first name is Matt. The domain is take pride in retirement.com. So mad at take pride in retirement.com. It makes sense right. Uh my goodness. But I mean. What I want you to do, though, seriously, is is take charge of your retirement and financial future and do it today. Don't hesitate because as a listener to the show, I'm really offering you a big opportunity to schedule that complimentary consultation. And get ahead of the game if you feel like you're behind. We can help you get ahead. If you and and you know, if you're struggling to get caught up, you feel like and planning for retirement, we can help you get ahead, make you feel better, give you that peace of mind which again, you can't put a price on. And again, that complimentary consultation is just that complimentary. It's free of charge and it's free of any obligation to work with us. You only work with me if it's right with you, if it's right for you, and if we agree to work together. So that's it. It's a no pressure type situation.

Speaker4:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Speaker1:
So target is lowering its prices. Imagine that. When's the last time that happened? And it's due to, of course, inflation. There was this story not long ago, just a few days back, about target reducing prices on about 5000 basic items like food, beverages, household essentials. And those reductions are going to apply to both national brands and the in-house brands. So the target brand. Uh, the Archer Farms and all of those other in-house brands that you see there, um, about 1500 items as of the writing of the story had already seen the price reductions. And over the next weeks and months, the total of 5000 products will get those price reductions. And they're in addition to what target says is its commitment to competitive everyday low prices. Right. So the prices they say are already low. They're just coming down even more. Um, and they're in response to inflation impacting household budgets. I mean, you know, consumers have been really more cautious with their spending. We're starting to see and target reported a 1.7% decline in annual sales that was blamed on inflation and on high credit card costs. And that was the first decline in target sales in seven years. So you can see why they're doing this, trying to attract more customers into the doors and also trying to give people some relief from inflation. And inflation is up. Um, according to some new numbers, nearly 20% since 2021. Grocery prices surging even more by 21%.

Speaker1:
Um, and this is a this is the thing. I mean, you know, people a lot of people like to get overly political when it comes to the inflation talk. I don't like to do that. Um, because people say, oh, it's all Biden's fault or it's all somebody else's fault, you know, whatever. It's all Congress's fault. It's all Biden's fault, whoever you want to blame. But. At the same time. It is a global issue. The. The United States is not on an economic island. We live on the planet Earth and on the planet Earth. Everywhere has seen inflation. We've actually done better than most when it comes to inflation. We've done better than most when it comes to pretty much all aspects of our economy. Our economy has proved resilient and strong. Does that mean that it's a great situation for anybody? No. Not really. I mean, when inflation has gone up nearly 20% overall over the past, you know, nearly four years. It's not great. But does that mean I'm going to point the finger at this particular politician or that particular? No. What it means is put a plan in place, no matter what inflation is, you can deal with it. And let the chips fall from there, right? Let the chips fall where they may. But when they do fall, you've got an answer. And that answer is your plan that you've worked up. And this is this is an election year, guys.

Speaker1:
It's a time to get serious. In 2024. There's already a lot of uncertainty in the world and that is affecting retirees and pre-retirees. So don't wait until you're ready to retire to start planning. Start doing it now. Go to take Pride in retirement.com and get started on that road. All right. So here is I think going to be my favorite part. I want like some some mystery music or something playing in the background I don't know I was the MythBusters theme song is probably um, copyright copyrighted and uh, maybe cost too much to to be able to play. Anyway, the this would be our sort of myth busting segment here debunking five common financial misconceptions. So I'm not blowing up a dump truck in the middle of the desert or anything like that, like the crew did on MythBusters. But accurate financial knowledge for retirees and pre-retirees is so important. There's a lot of misinformation and or misunderstanding about some different concepts out there. This is from a survey by the TIAA Institute and the Global Financial Literacy Excellence Center, and it found these widespread misconceptions going to go through five of them. And I'm going to debunk the myths here. Okay. So number one misconception is that employer matching doesn't matter. Employer matching doesn't matter now, I don't know. Who first had this misconception. But if you're telling me that you're not contributing enough to get the employer match the full employer match to your 401 K.

Speaker1:
You're telling me you don't like free money? And I don't believe that. So, you know, a lot of people just don't really utilize or even understand employer matching in retirement plans, but that can significantly increase your retirement savings. So let's say if you contribute $1,000 a month to your 401 K and your employer matches half of that up to 6%. Then that could mean an additional. $6,000 a year. An additional $6,000 each and every year. And that really adds up when you talk about the compounding effect of the growth over time, that really does add up. And so what you want to do is maximize your contributions to take full advantage of employer matching, and also review your plan details and adjust your contributions to meet the maximum match. Misconception number two I'm not going to spend too much time on this one because I sort of stole my own thunder earlier. But misconception number two annuities are bad. I knew it, he's bad. No, annuities are not bad. As I said, annuities are misunderstood by a lot of people. They can provide guaranteed income for life and tax deferred growth. Some annuities, though, like variable annuities, are not ideal. They've given annuities a bad name, all annuities a bad name. But all annuities are not created equal. So no, all annuities are not bad. You invest in an annuity that guarantees an income for life, and that essentially creates a personal pension.

Speaker1:
Some of the best options that are currently available include immediate bonuses, survivor benefits as well, um, and a lot of other things. So consider an annuity if it fits with your retirement strategy. For a steady income. We find a lot of the time, most of the time, the vast majority of the time, that retirement is a lot more about income than it is about one big nest egg number. So consult with a financial professional who can show you different annuity options, and then you can create a personal pension to serve as an additional income stream for your retirement years. Go to take pride in retirement.com, and I'll help you reduce that risk in your portfolio and establish a personal pension that creates that lifetime income stream with one simple strategy. And we'll go over it when you call or go to take pride in retirement.com. Misconception number three, Social Security benefits are just going to go away. They're just going to disappear, uh, before we all exit the planet. Um, so I get this because there's a lot of confusion about the longevity of Social Security benefits. They're they're designed to last a lifetime. Right. But, you know, the program is facing some funding challenges, has been for a few years. It's like nine years away now. It's supposed to be, uh, running out of money. The trust fund for Social Security.

Speaker1:
And so. Even with that, though, Social Security recipients should expect the monthly checks to keep coming as long as they live. Benefits can be claimed as early as age 62, but delaying benefits increases the size of the monthly income up to age 70. So don't wait beyond age 70. No point in that. But what you want to do is plan your Social Security claim strategy to optimize your benefits. So that timing that I just spoke about is very important. And remember, if you're married when the first spouse passes away, you're going to lose the smaller of the two Social Security checks coming into the household each month. And that is something that you want to plan for as well. But even with Social Security facing funding challenges, it's not going to go away. I think it could go away for a lot of different reasons, the two most prominent being it would be political suicide for anybody who wants to just say, oh, let's just kill Social Security. And also it would cause a major economic meltdown. So yeah, it is not just going to go away. Misconception number four here that I'm going to bust is I'm not going to live into my 80s or 90s and forget 100. I think a lot of people actually underestimate, I should say, their life expectancy. And that can impact retirement savings planning, you know, I mean. If you have family members who have not lived a long time, you may assume that you are not going to live into your 80s or 90s or, you know, above the age of 100.

Speaker1:
Either. But that can of course be wrong because nobody has a crystal ball. And if you live to age 65, the average life expectancy after that is about 18.5. Well, almost 19 years, with variations between those who were born female, those who were born male. But what you need to do is actually save more and invest in retirement plans that account for a longer life. You'd rather have it than not, and a fixed indexed annuity can provide an income for life, no matter how long that life is. So then that gives you. Of course, as I said earlier, a lot of peace of mind. Misconception number five Medicare covers all my health care needs in retirement. This is a big one. There's a lot of misunderstanding when it comes to Medicare coverage, and that can lead to unexpected out-of-pocket costs when you get to retirement. A lot of people say, oh, you know, if I have to go into a nursing home, Medicare will cover that. No, Medicare does not cover long term. Nursing care, long term health care of any kind, where you have to go and stay in a facility, um, for months on end or even years on end. Right? Medicare Part A is generally free, but it does not cover all those expenses.

Speaker1:
That I said, average out-of-pocket costs can be significant for anything like, you know, tens and tens of thousands of dollars a year to be in a nursing home. That is not a fun spot to be in if you have to pay out of pocket. So plan for additional health care expenses not covered by Medicare. Evaluate the need for maybe Medicare Advantage plan or Medigap or a health savings account. To cover future costs. It's a great time right now to meet with the financial advisor and start putting a formal retirement plan in place, because with time on your side, there's a lot that you can do to improve your financial future. All right. Couple of questions from listeners here. And I want to get to at least at least two of these before I have to call it quits before the time runs out on the clock today. So David says, what are the most common mistakes that you see people making when planning for retirement, and how can I avoid them? I have worked for the past 30 years to build our nest egg. Now I'm worried about potentially making a mistake. Well, David, we all make mistakes first of all. So, you know, don't think that you'll be, like, different than any other person if you make a mistake. But some of the most common mistakes, I guess the biggest one I'll just do do the biggest one here that I see people make when not um, or when planning for retirement is not planning for retirement soon enough, you know, I mean, and this is something that, you know, I wish I had started earlier.

Speaker1:
I wish I had realized when I was in my 20s or even 30s, the importance of planning for retirement. But it wasn't until a few years later, and now I'm in my 40s, that I really got my nose to the grindstone. Right? I was really, you know, really got to be on top of it and realized the importance of it and tried to make up for lost time and hopefully, you know, I am making a big dent in that. But learn from that mistake. Because if you don't invest as soon as possible, as early as possible, then you miss out on a lot of compounding interest over time. That's interest on top of interest on top of interest. And that's a lot of growth, right. So you miss out on all of that growth potential. So invest as early as possible. Make sure you're diversified. Right? People a lot, a lot of times will, as I said earlier, put all their eggs in one basket and, you know, don't invest with emotion. Get the emotion out of the picture. And then, of course, I think the biggest one for me is that people don't. People try to go it alone.

Speaker1:
They try to DIY the thing. They don't work with a financial professional or advisor when they need to. I am a licensed fiduciary financial advisor and I would love to help you out, David, with your particular situation or anybody else, um, with your situation as well. If you are listening to the show today, just go to take Pride in retirement.com take pride in retirement.com. And Nancy asked this question. She says, what are some strategies for minimizing taxes on my retirement income? I mentioned a couple of the ways a little bit earlier. Um, Nancy, invest in two things. One, a Roth IRA. There's some income limits. There are some things, other restrictions that you need to know with that. But you don't pay the taxes when you make the withdrawals in retirement. You you pay the taxes on the seed and then the seed gets planted in that Roth IRA, right? Then it grows and you don't pay the taxes on the harvest. You pay the taxes in the beginning on the smaller amount. Right. And then a lot of people believe a lot of economists believe taxes are very likely to go up in the future. So you're paying taxes on a lower amount and at a lower rate because you're paying them now and not in the future when taxes are likely to be higher. So Roth IRA, great idea. Um, and seek advice from me or another financial advisor to be able to to get you there.

Speaker1:
And also life insurance. I mentioned an indexed universal life policy a little bit ago, and that is something that you can create a lifetime income stream and it will be a tax free lifetime income stream because it is from a life insurance policy. All right. And those are a couple of the strategies to minimize the taxes on your retirement income. Pay the taxes now instead of later when the taxes are supposed to be higher. Um, according to a lot of, of economists out there. And, you know, just make sure that you have things diversified into those different tax buckets that we talked about earlier. Nancy and David, thank you both so much for your questions. I really do appreciate it. Um, I, I thank you both for listening, and I thank you out there for listening as well. No matter who you are, no matter where you come from, no matter who you love, no matter how you identify, you deserve a retirement you can take pride in. So go to take pride in retirement.com and reach out there. It's take pride in retirement.com or give me a call directly 855246 9211 (855) 246-9211. I'll be glad to meet with you for a complimentary consultation. Well, that's going to do it for this time around folks. I will see you next time. And until then, take pride in yourself and take care of each other. We'll see you next time.

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. Dot 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 disclosure of any conflicts of interest, if any, exist. Fixed annuities, including multi year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. 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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