Tariffs, Taxes & Tough Markets: LGBTQ+ Retirement Strategies for Uncertain Times

Episode 49: Audio automatically transcribed by Sonix

Episode 49: 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 once again, and welcome to another edition of Take Pride in Retirement. I'm Matt McClure, your host, your advisor, your friend, your pal, and your confidants. I really appreciate you joining me as a licensed financial advisor and fiduciary here to help the LGBTQ plus community folks just like you, take control of your financial future. You know, retirement planning, I always say, can feel overwhelming, but you don't have to figure it out alone. And on this show, I break things down step by step so that you can retire with confidence, security, and pride. And I really appreciate you being a part of things. We've got so much to cover. Today. We're going to talk about tariffs, taxes and tough markets, what LGBTQ plus retirees need to know now about all of those things. And um, yeah, you know, it's it's a tough time to be invested in the market. Obviously we've had a lot of volatility recently. We've had a lot of it, you know, especially this week because of the tariff announcement and all of that. And, um, you know, I will share a lot on that as we go throughout the show. Um, the one thing that I will say now, though, is twofold. You should stay calm in the face of market volatility like this. I know it's easier said than done, but try your very best to do it. Because if you were to panic sell right now, you lock in your losses. And when the market does recover and history has showed us that it will, then you won't be reaping the benefits of that growth when it happens, and you'll just lock in those losses.

Speaker1:
You'll miss out on a lot down the road. So don't try to time the market. Especially don't try to time the market when emotions are involved. So take the emotions out of it. And then secondly, as part of that, seek the advice of a financial professional, a financial advisor, a fiduciary, Someone who has to act in your best interests and not their own. That's what I do on a daily basis, is I act in the best interests of my clients by analyzing their situation. I, um, you know, take everything into account that they have in their portfolio. Now, if they don't have much of a portfolio to speak of to begin with, we start working on that and we get them invested in things that make sense for them with the right mixture of safety and risk. And we make sure that we mitigate as much risk as we can while still getting some good growth in that, um, in that investment. And then so they can have a retirement, they can take pride in. That's the goal for each and every person who reaches out, and each and every person who even just listens to this show. I really appreciate you listening. Um, honestly, I do, and I would appreciate it as well if you would reach out.

Speaker1:
If you have any questions, um, about any of the topics we're going to talk about today, please feel free to reach out. Uh, take pride in retirement. Com is the website. You can use the contact page there to just reach out with general questions or anything like that. You can also at the top of the page there is a schedule a consultation button. Use that if you would like to schedule a consultation. Um, it's it's pretty much that simple. Uh, makes sense, doesn't it? Uh, schedule that consultation there. Uh, because that really, literally just takes you directly into my calendar. You can see my real time availability book, a zoom meeting with me or in person. If you happen to be in Atlanta, we can meet in the midtown Atlanta office. Um, so, yeah, it's it's that simple to get a meeting scheduled. And you can also email me if you would like. Matt at take Pride in retirement. Com that's Matt take pride in retirement. Com or if you would prefer you can call me 855246 9211 (855) 246-9211 is the number. The initial meeting, by the way, is free of any cost and any obligation. Um, kind of like what you hear on the show and what you see on the show. If you're watching our highlights on YouTube, is what you get with me. Right? You know, I'm just this guy who's not here to pressure you into anything. Um, I'm here to help, and I'm here to analyze your situation and, um, put your mind at ease.

Speaker1:
Hopefully get some of the stress off your back so that you can plan for retirement effectively. And you can know that you have that confidence going into it. Um, all right. So, you know, if you are an LGBTQ plus individual or couple who's planning for retirement, or if you've been wondering how some of these new market shifts that we've been seeing affect your strategy, I do want to hear from you, and I want you to stay with the show throughout this episode, because we're going to talk a lot about that. We've got, um, some information about Social Security and the next cost of living adjustment that Social Security recipients are likely to see, and why it matters kind of more than ever right now, there's a particular milestone that we're about to cross. Talk about that, um, how new tariffs could shake the market. And we've already seen that happen and how it could shake your retirement plan as well. Uh, we're going to talk about four risks that LGBTQ plus retirees face and how to protect your future. We'll discuss some smart tax strategies for today and tomorrow and play a little bit of a game called Right or Wrong as I bust some money myths. A lot to get to. But first, let's get some inspiration for our conversations here, and 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, um, comes from someone I just love and respect. And it's a person called unknown. Um, brother to or sister or sibling or someone to anonymous. Um, now this is a quote that no one really knows the origin of the quote, of course, and I believe I may have used it before on the show, but I feel like it's a good quote for this week. Regardless, because of everything that's going on and because of, you know, the fact that it's sort of a positive quote, right? And it's this retirement is not the end of the road. It's the beginning of the open highway. Retirement is not the end of the road. It's the beginning of the open highway. You want to approach your retirement with that in mind, and you want to approach your planning with that in mind, regardless of what's going on in the market. And you want to make sure that you have protection from market volatility in a good portion of your portfolio so that, you know, you've got some some guarantees in there. So that is really what happens when you work with a fiduciary financial and a financial advisor like myself who can, you know, go through and analyze your situation with a fine tooth comb and get you to a place where you need to be, so that when you get to the beginning of that open highway, you're not trying to hitchhike.

Speaker1:
You know, you've got you've got a car and it is full of gas and you are just ready to go. And so that's the goal. Really, really and truly is. So retirement. It's not the end of the road. It's the beginning of the open highway. All right. So I mentioned this a moment ago. And we're going to tackle it now. It's the Social Security cost of living adjustment otherwise known as the Cola. And you say well Matt I love cola. You know, Coke Pepsi something like that. No it's it's not that kind of cola. It's the cost of living adjustment, which is a good thing usually for retirees. Um, Yahoo finance is reporting that, um, there is a cost of living adjustment now that is projected to be at 2.2% in 2026, and that would possibly push average monthly checks above $2,000 for the very first time. Right now, the, the average monthly check is kind of sitting just below that $2,000 mark. And so if we get a 2.2% increase, that would push it the average check above that. So that would be kind of a big milestone, a historic milestone for Social Security to cross. Not necessarily the best news though, because it means that obviously inflation is is a thing. And it um, you know, it always has been a thing. Most of the time it is a thing anyway. And, you know, a couple of things, a couple of key points to consider here for LGBTQ plus folks.

Speaker1:
One, you know, spousal benefits may still be confusing for you or inaccessible due to delayed recognition of same sex marriages. If you are, you know, partnered but not married, then you won't get to sort of reap those spousal benefits that Social Security has to offer. So there are a couple of different, you know, things that go into that. One of I feel like the most important is the fact that when your spouse passes away or you pass away, whoever is left behind will receive the larger of the two Social Security checks. So if one spouse has a higher paying job now than the other does, then you know, obviously you're going to have differing size Social Security benefits paid out each month. Whoever the surviving spouse is keeps the larger of those two. Good news and bad news, of course. Kind of like the cost of living adjustment. Kind of like the cola, because it's a good thing in that you are, you know, getting more money as an, as an individual person. It's a bad thing, of course, because obviously your spouse has has passed at that point. But aside from that, the smaller check also goes away. So so some income goes away as well. But you do get to keep the larger of the two checks. So that is, you know, it's a trade off. There is so many things are in life.

Speaker1:
And then, you know, solo retirees, um, you know, may be even more dependent on Social Security. So if you're not married, you may be more dependent on the program as a primary source of income. So that is concerning because the old Age and Survivors Insurance Trust Fund, the trust fund, as it's called, is expected to be depleted completely. So, so gone by 2033 at this point. So eight years away, potentially resulting in a 21% cut in benefits across the board immediately. If that happens now, hopefully lawmakers will get their act together and, you know, do something about this shore up the program. But my message to you, when we anytime we talk about Social Security and and especially right now sort of in this context. Right. So like talking about perhaps Social Security benefits being cut at some point in the future. Talking about how the cost of living adjustment may mean that the benefits are going to be above $2,000 for the very first time, meaning that inflation is still around. And so that is why you're getting that increase and the increases. A lot of times, don't keep up with sort of the real cost of living and the real cost of inflation and the real rate of inflation, I should say. So my message to anybody and everybody, including you listening to the sound of my voice right now, is that you need to have not even a backup plan.

Speaker1:
You need to have a primary plan for Social Security, right? So you need to have something besides Social Security that you know you can count on, and you need to have something that is going to be your primary source of retirement income. So that Social Security is the cherry on top. That's the extra money you can. Bet that can be your play money. That can be your vacation money, or your money that you use to go out to eat all the time. Whatever you want to use that money for. Great, grand and wonderful because you have planned and you have streams of income that are coming in streams of income that you can't outlive, by the way, and you don't have to worry about living paycheck to paycheck on Social Security, right? Because you have planned. And that's the thing, no matter how much money you have. I always say this no matter who you are, no matter where you come from, who you love, how you identify, or how much money you have, you deserve a retirement you can take pride in. And that's my goal, is to get you there. And if you want to explore that, if you want to explore, um, you know, the options that are out there, go to the website. Take pride in retirement. Com click on schedule a consultation. I'll be glad to run through some of the options that are out there for you.

Speaker1:
Um, you know initial consultation. We'll get to know each other a little bit. I'll get to know some about your situation and then I'll come up with a plan. You know, after you sort of let me in on all the details of your financial situation, I'll come up with a plan that I believe works for you. And if we can improve upon your current plan and your current situation, I'll absolutely do that for you. And I would love to. I'd love the chance to be able to do that. Take pride in retirement. Com is the website and you can also give me a call if you'd like. 85524692 11. That's (855) 246-9211. I know, it's funny. I was just a little bit ago, I had a meeting with a client. Um, who? Of course, you know, I've had several people, uh, reach out to me this week because of all of the market volatility and the things going on with the tariffs and all of that. And we'll talk about that momentarily. Um, but I had a meeting with a client earlier, and he had mentioned to me, he said, you know, um, you always say on your show, sort of like, you know, it's, you know, when you, uh, have people in and they meet with you or they meet with you via zoom or whatever for that initial consultation. You know, it sort of seems like, oh, it's not going to be such a big deal.

Speaker1:
And he's like, because you're, you know, you're such a nice guy and all of that. And I and I said, thank you. Um, but, you know, he also said that for, for him. And I'm sure for a lot of people, it's it's a big deal. Um, especially if you have been the one if you haven't had an advisor before, if you're someone who has been controlling your own finances and your own retirement accounts and investments and all that, then yeah, it can be a it can be a big, big deal to let somebody else in on that. And there there are fears that go along with it. There's fear of of judgment. You know, this is a no judgment zone. Um, I'd much rather you reach out and find out that you are in good shape and don't need anything else than not reach out and not be in good shape, and I could have helped you along the way. Make better decisions. Make changes to your current plan so that it is more effective that your money is working just as hard for you as you've worked for it. And so yeah, it's I do you know, I say things the way that I say them when I talk about the initial consultation for a reason. Because, you know, I want you to feel comfortable reaching out to me because like I said earlier, what you see and what you hear is what you get with me.

Speaker1:
I'm not some high pressure person. I'm not going to pressure you into doing x, Y, or Z. We're going to, you know, we're going to talk it out. We're going to work together to make your plan the best it can possibly be. That's the goal. And that's why I say things the way that I say them when I talk about, um, you know, the initial consultation, right, is I want you to feel confident that you can reach out to me, that I have, you know, the education and the certifications and all of those things to be able to say to you with confidence that this is what you need to do XYZ based on your current situation and where you could be going. And so that's why I say things the way that I say them, but I understand. Yeah, it absolutely can be a big deal for a lot of people to sort of let people in on that side of their lives. This client, um, sort of compared it to and he's used this analogy before the first time going to a doctor or something and having to sit there on the table and, uh, you know, take off all your clothes and sort of be like, you know, fully exposed to, uh, someone for the first time was to sort of fully financially exposed.

Speaker1:
I get it like that. That can be a big deal for you. So I want to make it not as big of a deal and make it where you are in a situation that you feel more confident in your finances. And that's, that's what I, I do, uh, every day for folks is try to just put your mind at ease and, you know, let you know that we're on the same team here. And again, take pride in retirement. Com is the website. Okay. So that's my spiel on that. Now the tariffs. Um, there's been a lot of market volatility. Obviously it's been a big um roller coaster week here recently on Wall Street. The tariff policy announcements have, you know, really triggered that instability. And it directly affects your retirement portfolios. There. You know, and there are studies on this. So I'm not just sort of speaking out of out of turn here, but LGBTQ plus retirees and pre-retirees not always of course, but often are more likely to track or more likely to lack. Rather, I should say lack and not have pensions or intergenerational wealth because of family situations, because of dynamics and and that sort of thing. They're a lot more we are a lot more reliant on self-funded accounts like IRAs and 401 s. I do know that just just, you know, from my own personal experience and working with folks at that tends to be the case.

Speaker1:
And, and really, you know, only I think the latest and don't quote me on this, but it's somewhere in this neighborhood, the latest data that I have seen is somewhere around 14% of private sector workers have access to a pension. So that's that guaranteed income stream for the rest of your life after you retire. That's paid out by the company that you've worked for for decades. Um, so only like about 14% or so of private sector workers have access to them. Now in the public sector, it's a bit different. And a lot of federal employees have unfortunately been finding out a lot about their retirements, um, here recently because of things going on in the slash and burn in Washington and all that, that's caused a lot of confusion. I know I'm based out of Atlanta. I know that it's caused a lot of confusion for folks at the CDC. It's based here in Atlanta. And so it's been, um. It's been a time. I will say that. But, you know, if you're one of those people who doesn't have a pension, if you're somebody who doesn't have intergenerational wealth that you can count on. If you're somebody, no matter where in the, you know, big, beautiful rainbow you fit, if you're somebody who's more reliant on self-funded accounts like a 401 K or an IRA, then you need to do a couple of things. Number one is to diversify and create a personal pension plan.

Speaker1:
A personal pension strategy to provide guaranteed income in retirement, while right now protecting against these wild market swings that we're seeing. And, you know, there's been a lot of talk and analysis done about the tariffs, right. Obviously, the world is reacting the way that it's reacting for a reason. Um, you know, foreign countries are adversaries and our allies alike are reciprocating with with tariffs on us and on goods that are exported from the United States. But how tariffs work. Tariffs are a tax. That's let's let's call a spade a spade here. Tariffs are a tax. And they are a tax that is not paid by the foreign country. The tax is paid by the company or, you know individual or whomever. But usually the company that imports goods from another country. So let's say, you know, there's I believe right now this according to the new policies and everything that have been unveiled, a 34% tariff total on Chinese goods, on most Chinese goods. Anyway, I think, um, you know, from, from the nation of China. So anything that is imported from China, tariffed at 34%, China is not paying that 34%. China is going to, um, not be, you know, charged at that 34% or anything like that. It's not something that that they are going to foot the bill for. The bill is footed by American companies, the ones doing the importing, the ones bringing those goods into the United States.

Speaker1:
And so that causes costs to go up significantly. If the import itself, the the act of importing itself is more, um, expensive than that makes the trickle down effect happen. Most of the time. And that is that whatever good that is or whatever part that is, that then goes into goods that are manufactured here, put together here, assembled here, and then sold those. It's kind of this sort of, you know, yeah, trickle down effect really where they're going to pass those increased costs along to the consumer at least eventually, you know, companies can absorb some of those costs, especially kind of in the beginning when we're trying to see exactly how long this is going to last, if it's just a fly by night sort of a thing, or if their tariffs are going to go away soon. But companies can absorb a certain amount of those costs, but certainly not all of them. And so that's what you got to keep in mind. Number one is that tariffs are a tax. And tariffs are a tax on the companies that do the importing. Number two is that those companies will pass the bill along to you by increasing the cost of the goods that they then sell here in the United States. That's what happens by and large. The question is, of course, how long is this going to last, as I said, and how big of an impact is it going to have on your wallet? We don't really know because it's still early days, right? We don't know if, you know, given the activity in the market and all of that.

Speaker1:
If, um, you know, the folks in Washington are going to say, to say, wait a minute, we've made a mistake here, and we're going to go back to the drawing board and we're doing away with the tariffs, especially the tariffs on the penguins of a remote island where no humans live. Um, that's that's how smartly some of this was done anyway. Um, that these uninhabited islands are getting tariffed. It's very strange, but the, um, point being, how long is this going to last? I don't know, because I don't, as I always say, my crystal ball is broken, right? I can't predict the future, I don't know. It is early days in this process. How is it going to affect us? We know it will. But to what extent? It remains to be seen. Then, you know, if the folks in Washington don't do that, don't don't say, okay, boy, we've made a mistake. We're going to go back to the drawing board here. Then what happens? Do these continue? Are there negotiations that take place between trading partners? There are a lot of moving parts with the tariff situation. As I said at the top of the show, one of the things that you do not need to do, you do not need to do is panic sell, especially after a couple of big down days on Wall Street.

Speaker1:
Do not panic sell because then you've lost value in your investments already. And then on top of that, you're going to sell. So that locks in those losses. And when the market does recover because and I can say when with, with, you know, 99.999% confidence when the market recovers because it always has before it has grown over time substantially. So again, crystal ball is broken, but the chances are the market will recover again. You're going to miss out on all of that growth. So you need to protect what you have obviously. But you also need to not lock in losses. If you're invested in the market in a way that you're going to miss out on the growth down the road, because the growth could be significant just to even get back to even where we were, um, a couple of days ago. Um, but yeah, it's it's a tough time. It's a time where it's difficult to not be emotional about your finances, especially if you are one of those people who opens up your 401 K or your investment portfolio and looks at that every day. Um, say, save yourself a couple of, uh, you know, I don't know, save save yourself some new ulcers and save yourself a couple of grey hairs. I guess that's what I'll say.

Speaker1:
Do that by not looking at your portfolio and its performance every day right now. That's some other good advice at the moment, I believe, because, you know, it's not going to do you any good. I believe that for most people you should you should stay the course, stay calm, keep calm and carry on, in other words, and make sure that you know you remain invested for the long term. You have the long term view of what the markets are going to do. And over the long term, things do recover over the long term. Things do go up. The trend line is up in the markets over the long term. You know, I'm not talking about short term trends or even medium term trends. I'm talking about the long term trends. When the markets have gone up over time, compare where we were. Um, even if you just look at the Dow Jones Industrial Average, um, where we were, you know, ten years ago versus where we are right now, it's a different world, really. And so, um, just keep that in mind, um, when you're thinking about your investments and when you're thinking about your retirement plan, and don't obsess over the day to day or minute to minute changes inside your accounts. It's the long term that matters. And making sure that you're set up with some guarantees in your plan that you have principal protection for a portion of your portfolio, that you know, that you can set up an income stream that you are not going to be able to outlive in retirement.

Speaker1:
Make sure that's the case. Those are all the important things to make sure that you have right now and otherwise. Keep calm, carry on and do not panic. Sell whatever you do. Not a good thing. And if you want someone who is going to work in your best interest to work with, then I would suggest that you go online to take pride in retirement comm. Reach out to little old me. You can email me through the contact page there at Take Pride in retirement.com, or just send me a direct email Matt at take pride in retirement. Com um or you can go ahead and set up that initial consultation. Just go to take pride in retirement comm. Click on the schedule a consultation button. We can do it over zoom. There's it's a no pressure situation. It's just kind of a getting to know you sort of a thing. And then we'll start taking that deep dive and I'll come up with a plan that I believe works for you based on your situation, based on what you have right now, and then we can go forward from there or we cannot go forward from there. If you decide you don't want to work with me for whatever reason, you know, that's that's fine.

Speaker1:
Um, it's, you know, nothing personal. Uh, as far as I'm concerned. Right. Also, you can give me a call if you would like. 85524692 11 (855) 246-9211. All right. So it is that time of the year again. If you have not filed your taxes boy you are up against the deadline. It's April 15th. Are you prepared for it? Oh, boy. Um, I hope that you are. Because, you know. Yeah, you can file an extension. A common misconception about extensions. Um, with your your taxes, you can file an extension by April 15th, and then you don't have to file the paperwork essentially, until October. You can delay that long, but you still have to pay your tax bill by April 15th. Otherwise the IRS, you know, they could come looking for you and they know where you live. So. So don't. It's like, you know, it's a mafia movie or anything like that, but they they do know where you are. And you will owe money to the IRS and you'll be penalized for not having paid on time. So yeah, you can file that extension, but it's just an extension as far as being able to pay or being able to, uh, file that paperwork, not pay the government what it has coming to it. So make sure that that anything that is owed is paid by that point in time on April 15th. Um, and also, you know, for future tax planning purposes, think about a couple of things.

Speaker1:
Roth IRAs, those are tax free life insurance. Permanent life insurance, um, particularly is what we're talking about. Um, and a particular kind of life insurance policy can result in tax free income in retirement. I can take you through and kind of walk you through that process as well. If you reach out, take pride in retirement. Com is the website once again. But Roth IRAs and permanent life insurance Those are tax free investments, and you can receive tax free income in retirement from those. Really, the only two, uh, tax free investments available to Americans today. People say sometimes, you know, what about municipal bonds? Well, there a lot of times tax free, but not necessarily always tax free because, you know, they um, it may be subject to some federal tax, some state tax, some local tax, things like that. And they may for high income LGBTQ plus and other individuals impact Medicare surcharges. They may, you know, cause the cost of Medicare to go up because your your income goes up, in other words, from those um, especially if you're a high income person. So, you know, work with someone like me who is a financial advisor who understands LGBTQ plus issues, who understands LGBTQ plus people, And who cares? And that's me. Matt McClure. Matt at Take Pride in Retirement is the email address. (855) 246-9217 is the number. All right. Going to go through some risks.

Speaker1:
You know we've talked about one of these already. This is from an article we found in Kiplinger. And it's four risks that retirement. Um well that pre-retirees I guess and retirees especially early on in retirement face and they hit LGBTQ plus folks especially hard. Um, and these four risks, one of them, as I said, we've already talked about and that's stock market volatility. And the risk really increases as you near retirement. There's a thing called the retirement red zone. And that's essentially the first few years before you retire. So or the last few years before you retire I guess I should say. And the first few years in retirement Environment and the kind of timeline sort of varies. You'll hear some people say, oh, it's ten years before retirement, ten years during retirement. Some will say five either side of retirement. You know, bottom line is it's the time shortly before you retire and the time shortly after you retire. And so that's the retirement red zone. And you don't want to be taking nearly as much risk during that time as you had earlier on in life, in your career and your, you know, investment portfolio and all that decades before you want to cut down on risk as you get closer to retirement, specifically market risk, you know, all the other risks as well. But you want to take market risk off the table as much as possible when you get closer to retirement.

Speaker1:
Because think about this. This is something called sequence of returns risk. It's if you I always use this as an example, but it's it's probably the one that will hit home the most I think for a lot of people. Let's say you retired in late 2007 or early 2008. Remember what happened to the markets in 2008 and 2009. Retirees who called it quits then? Not only were they experiencing these big losses in their investment portfolios and in their retirement plans and all of that, because the market just crashed for, you know, markets were down two years in a row, 2008 and 2009. Then they are also making withdrawals from what's left inside their portfolio. So it's a double whammy really. You are making those withdrawals so you have less money in the account that's already getting hammered by losses in the market. So that's what's called sequence of returns. Risk is like, you know, you don't want as you're making those withdrawals in retirement to then have a down market because it's just not going to be a good situation. So one of the ways that you can combat that is by moving more to safer investments as you get closer to retirement, so that if that were to happen to you, you're not in the poorhouse and it doesn't have as much of an impact, right? So building a personal pension. We can walk you through that process and how that works.

Speaker1:
That would be a great way to protect against market volatility, um, especially with something called a fixed indexed annuity. That is a really good possibility to take a lot of that risk off the table and then still get growth inside that, um, portfolio that that particular account potentially not, you know, guaranteed growth unless you do a guaranteed fixed interest rate, um, growth for at least part of that investment, then you'll see guaranteed growth over a certain amount of time. Um, but then, you know, if the market goes up, you reap those benefits. If the market goes down, zero is your hero. You do not go below that. Um, in your investment, your principal is protected. And then once the growth gets credited to your account, Then that growth becomes part of the principle essentially, and it's protected going forward as well. So that's a great thing to do for a lot of people. It doesn't make sense for everybody, but it's a great thing to at least have as an option on the table. Um, number two, retirement risk that, uh, hits LGBTQ plus folks especially hard here. Taxes. You know, a lot of retirees, especially in the LGBTQ plus community, I have found not maximizing their tax free bucket of money. And, you know, a lot of people either don't understand, don't quite understand a Roth type account and what it can do and what it is and how you can invest in one, and how you can maybe convert what is a traditional IRA into a Roth IRA.

Speaker1:
That's why I'm here, right? To sort of help you through that process. Um, and you know that that Roth conversion is a great thing. You know, you have a larger tax bill now, but down the road you get tax free income. There's tax free growth inside the Roth. And you never have to pay taxes on that money again. You don't even pay taxes on the growth when you withdraw it in retirement. So that's the advantage of a Roth type account, right. So you want to maximize your tax free bucket of money. Roths can help. Life insurance can help I can help you with both of those things. Another another, um, risk that retirees face here and LGBTQ plus folks really face just because of different family dynamics. And, um, you know, things that especially if you're, um, unpartnered or you don't have kids and things like that, number three on this list of of risks is long term care. And LGBTQ. Plus seniors are more likely to age alone than the general population. You know, long term care insurance can help manage rising costs of long term care and health care in general. You know, that that really that cost has been outpacing inflation for some time. And with the increase in cost there, it just makes it more difficult.

Speaker1:
So you want to make sure you're prepared. There are different ways to do that. Standalone long term care insurance is an example. Those can kind of be pretty hefty as far as the price tag goes these days. But there are other options available as well inside products like, um, annuities or certain insurance policies and things like that that have as ancillary coverage. They can, you know, if you've turned on an income stream, for example, certain ones can double that income stream if you are confined to a long term care facility. So you have more money, twice the money actually, to then be able to pay for the long term care costs. So there you go. Um, and then of course, going right hand in hand with that is longevity. Your retirement could last three decades or more. So you want to focus on income planning to avoid outliving your savings. Saving up a big nest egg is a great goal if you want to have a certain. If you've had your eyes on the prize all your working life and you want to have a certain amount of money saved up this big pot of money, you know, there's commercials for some investment for I don't even know who it is off the top of my head. But what's your number? You know that that thing, um. That's all well and good, having a one big number saved up the bread and butter of your retirement, though, is your retirement income.

Speaker1:
What are your retirement income sources? Social security, which of course, we've talked about already. Yeah. You know, that's that's going to be around in some form I imagine. Um, there could be some changes, of course, coming to it. And Lord knows if Congress fails to act, then who knows what could happen. Um, but in some form it'll probably be around. Do you have a 401 K? Do you have a pension from your job, or are you fortunate enough to have a pension from your job? If so, great, that's another source of income. Then if you've got a 401 K or if you've got an IRA or something like that, you retire and then you've got this pot of money and they're like, okay, live on this, turn this into income somehow. Um, that can be, you know, not necessarily the easiest thing to do for the, the layperson. So my suggestion is get a personal pension so that you can not outlive your money. And that really could be whether you have a pension from your job or not. It could fit into your plan wonderfully by setting up a separate stream of income that is apart and aside from your pension through work. So yeah, I mean, there are lots of opportunities and and possibilities out there because there are so many different options. And anybody who sits in front of a radio microphone and tells you, you know, gives you advice like, well, and I use air quotes for advice because it's not really advice because they don't know you in your situation.

Speaker1:
They make sort of blanket statements like, oh, this is a bad investment or that's a bad investment. This is a great investment. That's a great investment. Never get an annuity, never get, you know, never invest in bonds. Never do this. Never do that. Anybody who uses absolutes like that, they're not acting in a fiduciary capacity. They're not someone who really ever acts in a fiduciary capacity. Because in order to act in a fiduciary capacity, you have to know the individual's financial situation. And so anybody who says, you know, never do this, never do that. You got to take with a grain of salt a lot of what they might say. Now, there are certain things that are universally true and that I might, you know, don't never jump off a cliff. You know, that sort of a thing. Um, that's just kind of, you know, uh, a thing that I'm not, you know, not acting in a fiduciary capacity there, but I'm acting in a human being. Capacity that I don't want you to jump off a cliff. And, um, you know, get hurt or worse. Right? So there's that. So there are certain things that you can make blanket statements about. But I'm talking about things like, oh, never buy an annuity because they're all awful.

Speaker1:
No they're not. They may be awful for you in your situation. Or there may be one out there that works well for you. So anybody who sits behind a radio microphone or in front of a camera or whatever and says stuff like that, they either a don't know what they're talking about or b trying to pull the wool over your eyes and sell you something else. I'm not trying to sell you anything. I just want to do what is best for you in your situation. That is my job. It's what I do. It's what I love to do. I love seeing the relief and the smiles on people's faces when they see, oh my God, I actually have a plan. It was like when I. That's my favorite thing, is when I'm going through a plan with someone and they see the potential of where they could go, you know, based on projections that we've made and the changes that we've made inside their portfolio to make those adjustments, to say, like, hey, this is where you could be in X number of years. Um, there, you know, the face just lights up. And I love that. It's my favorite, favorite thing. And so, hey, could do that for you to reach out to me, take pride in retirement. All right, so, um, Morningstar is out with six key tasks, and I'm just going to run through these quickly for, um, retire or people who are planning for retirement.

Speaker1:
Right. And these are things that you really do need to do, no matter who you are, where you come from, who you love, how you identify, or how much money you have. Do these things. I thought this was a great list. Number one is build your human capital. Yeah. Upskill. Get new skills to boost your income in your final working years. Because if you have more income in your final working years, then that boosts things like your savings for retirement, your investments for retirement. Um, it boosts the Social Security check that you're going to get because they take your 35 highest earning years and use that as the baseline to then determine how much Social Security income you get. So do that. Number two, have a game plan for Social Security. Strategize with your spouse or with your partner to optimize your benefits. I'm going to start drawing Social Security at this age because this I'm going to start drawing Social Security at this age. Because of that, you know, you can wait up until age 70 and get raises each year, essentially, like, you know, if you wait beyond your full retirement age, you essentially get an 8% raise each and every year up until age 70. No reason to delay past age 70 at all, because then you don't get a raise beyond that.

Speaker1:
Right? So that's that. Have a game plan for Social Security. And that's something that I can help you with as well. Again take pride in retirement. Com maintain your safety net is number three. Yes. Always have that emergency fund. Keep at least six months of living expenses on hand. I love working with people to get that set up as well. I'll have at least that much liquid so you can get your hands on it. Number four is to schedule a portfolio checkup. This one means a lot to me because you may want to be rebalancing to more stable assets as retirement nears. Kind of what I was talking about earlier, taking some of that risk off the table as you get closer to retirement. Number five is sprint to the finish. Yes. Start saving up more and more. You know, a kind of aggressively saving and investing. Um, with that, you know, mix of safety and risk in mind that I've been talking about as you get closer to retirement. Use catch up contributions that you can contribute extra to things like your IRA if you're over a certain age. And then protect against sequence of returns risk. This is that thing I was talking about earlier when I said, you need to move toward safer investments to avoid major losses early in retirement. You don't want to be like those retirees who called it quits late 2007, early 2008, and then the bottom fell out of the market. Once again, take pride in retirement. Retirement.com is the website.

Speaker4:
Come on down as we test your financial knowledge. In right or wrong?

Speaker1:
Ah, yes. Before we go, a quick edition of everybody's favorite financial game show. It is called Right or Wrong. I want you to play along and test your financial knowledge here. Um, I've got four statements, and I'm going to run through these quickly one by one. And I want you to tell me whether they are right or whether they're wrong. Scream it through your your podcast speakers or whatever. Um, and I'll, I'll hear you, I promise. But anyway, so yeah. So this is right or wrong, I'm going to say a statement. You have to sort of guess whether it's right or wrong. And then I will tell you I will reveal the correct answer. So number one is this from a fee perspective, ETFs exchange traded funds are far superior products compared to mutual funds from a fee perspective. Do you know if that is right or if that's wrong? That is absolutely right. Yeah. From a fee perspective, when we're talking about fees, ETFs are much more fee efficient. There are no 12 B1 fees and they offer the same several same level I should say, of diversification as well. Another benefit of ETFs is that they can be traded within the trading day. So you got more control over those mutual funds have to be traded between trading days. So if the market's open mutual funds can't trade them. But really within the trading day you can trade those ETFs. So yeah you've got more control over the buy and sell prices with ETFs. So that one was right. Number two, if your employer does not offer a pension plan, there is no other way for you to create a personal income stream that you can never outlive.

Speaker1:
Do you know if that one's right or if that one's wrong? Well, I hope to goodness you've been listening to the show and you know that that one is wrong. Annuities can allow anybody to protect and grow their wealth. You can also establish an income stream that you can never outlive. Fixed indexed annuities are tied to a stock market index, but they're not directly invested in it. So they allow you to get the market like gains without the market risk. Your principal is protected. The worst you can do in a year is zero growth. So that's news to the ears of a lot of people, or music to the ears of a lot of people, I should say, especially after the week that the markets have been having here. And number three, the only ways to reduce your taxable income and get into a lower tax bracket are deducting your mortgage interest and taking advantage of tax credits. Right or wrong? Well, I also hope you know that that one is wrong. We've been talking about the tax free investments that you can take advantage of, and those are ways that you can reduce your taxable income during retirement. You take tax free withdrawals from the only two types of tax free investments. Those are Roth IRAs and life insurance. If you are interested in doing that, generating tax free income, I would love to encourage you to schedule a free consultation with myself today.

Speaker1:
It's going to cost you absolutely nothing, but it could save you a lot on future taxes. Once again, take pride in retirement. Com is the website and okay. Finally here in right or wrong number four, if you choose to take a lump sum on your pension when you retire, you can receive up to a 20% bonus on your money. Is that one right or wrong? That one is a good one to to guess because I haven't mentioned that so far in the show today. It is absolutely right. You can, if you take a lump sum on your pension when you retire, you can receive up to a 20% bonus on your money and it will help generate a better return on your money. When you invest the lump sum into a fixed indexed annuity, it can generate higher income payouts during your 30 plus year retirement. So you take that lump sum, you invest it in a particular fixed index annuity that has a bonus attached to it. And then that bonus is applied to the income base. So the number that they use to determine how much you're going to get paid out on a monthly or yearly basis, whatever the case may be. And then that's going to boost that number. So you've got more income in your retirement years thanks to that bonus. So yeah you can absolutely do that. All right. Hopefully that's cleared away the fog. And maybe you had a little fun talking about some things there making maybe making some guesses in right or wrong.

Speaker1:
You know what if you're not sure how the changes in the market recently and, um, you know, any long term impacts that these tariffs might have if you're not sure how to still what to make of all of this and how it impacts you or, you know, if you're not sure if you're working with an advisor right now and you're not sure if they understand your unique needs as an LGBTQ plus person or an ally or anything. No matter who you are, where you come from, who you love, how you identify, or how much money you have, reach out to me. Take pride in your plan for retirement so that you can then take pride in your retirement years. I'm here for you with no judgment. No, um, you know, snake oil sales or anything like that. Just real strategies and guidance that I believe you can trust because I want to. I want to earn your trust and your respect and want to make sure that you are set up for a retirement you can take pride in. So call the number 85524692118552469211. Or go to take pride in retirement. Com you can schedule that complimentary consultation either of those ways. Well that's going to do it for this edition of the show folks. Thank you so much once again for joining me. I really do appreciate your time. I say it every week, but I really do mean it. And 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 plus community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor 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:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonuses if the contract is fully surrendered or if traditional annuitization payments are taken, and if the policy is partially surrendered, it could result in a partial loss of bonuses. Because these are bonus annuities, they may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, or other restrictions that are not included in similar annuities that don't offer a bonus feature. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the ADV to item four for additional information. 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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