Are You in the Retirement Redzone? How to Protect What You Have Saved

11.3.23: Audio automatically transcribed by Sonix

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

Producer:
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.

Producer:
Welcome to Your American Retirement with your host, Randy Sams. Get set for a full hour of financial information and economic news affecting your bottom line. Randy works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here is your host, Randy Sams.

Randy Sams:
Hey, good morning, Central Arkansas. I want to welcome you to Your American Retirement. I want to thank you for joining me on this. Well, it's a little bit warmer Saturday morning than it has been earlier in the week. We've got a jam packed show for you today. I want to give a shout out to all my listeners that are listening to me this morning. All right. There in Conway, of course. Always Little Rock, Benton and Bryant, listeners, clients. Hope you're having a fantastic Saturday morning. But folks, listen, don't forget to check out our show. In podcast form on Apple, Google, Spotify or wherever you may get your podcast. All right, listen to previous episodes on our website or your favorite podcast app. Now our website YourAmericanRetirement.com. Also, visit our YouTube page as well. Go to youtube.com and search Your American Retirement. You can check out videos, our YouTube channels a little bit different because it has a short little segment, a short clip of something that we feel like is important during the show today, and any previous shows kind of gets you interested. And then you go to where you go. You go to the podcast, or you can go to Your American Retirement and watch the entire show. All right. But hey. Please don't hesitate to call us with your questions. We've got a question that was sent in from last week, a listener concerning RMDs, and we're going to talk a little bit about RMDs on today's show. But you know that we love hearing from and helping our listeners.

Randy Sams:
Again, you can call me at (866) 990-7664 or go to the website YourAmericanRetirement.com. Leave us your contact information if you've got questions, concerns, what's stressing you out? What's keeping you awake at night? You're getting close to retirement, you're in retirement and you've got some concerns. Give us a call. I'd love to talk to you. Doesn't cost you a thing. Doesn't cost you a dime. Free consultation. Take advantage of the experience that that we have. So, hey, also get a lot of questions. Randy, why did you choose to do this show? That's that's good question. You know, I could be out doing whatever we want to do on Saturday. You know, a lot of people are out playing golf. Now. If it gets too cold, you won't find me out on the golf course. I love playing golf, but there are limits as far as how cold the temperature can be before. You will not see my smiling face out on the golf course. I can wear clothes, but you know, if I have to wear two sets of gloves and four long pairs of underwear, that's too cold. But anyway, I enjoyed doing this show, folks. I've been in this business for 37 years, since 1986, soon to be 38 years. I've been executive, corporate level executive for two of probably the largest companies in the United States. I led one of the largest distributions for Trans America for 18 years. And I've got a lot of knowledge and I enjoy working with folks.

Randy Sams:
So when I retired, I started Senior Markets Management Group or SMMG financial, and that's what we do. So why do I host a show? So if this is your first time listening to Your American Retirement, I want to take a minute and let you know why I'm here broadcasting in Central Arkansas. Number one, I want to educate retirees and pre-retirees by providing valuable information, insights, helping them make informed decisions about their financial future. So we understand that knowledge is power, and we don't want our listeners or clients to ever feel powerless in retirement. The financial world keeps moving and we don't want our listeners left behind. So that's why when you listen to the show, you'll notice that we give out a lot of information. Product information, economic information, retirement information as to what you're facing. So that's what we're all about. And then we give you examples from time to time as far as some of the things that we've done, some of the planning that we've put together for some of our clients. But our main focus is to prepare you for retirement. Okay. Number two, we want to address retirement challenges that retirees and pre-retirees often encounter while offering smart strategies and solutions to help navigate those obstacles. Folks, you're going to run into longevity risk, market risk, inflation risk, withdrawal risk. What are those, Randy. Well, those are risks that you are going to face in your retirement. We can't cover them all right now. But that's why we say give us a call, leave us your information and we'll get in contact with you.

Randy Sams:
Be glad to talk to you about any of those risks, and let's see how we can address it in your retirement. Whether you're in retirement now or getting close to number three, we want to empower smart financial decision making by sharing our knowledge and expertise, as well as examples of how we are helping other listeners and clients every week. Number four, we want to promote financial literacy because so many people feel like financial freedom is simply out of reach. We are here to Answer your questions and help you understand what you need to do in order to reach your own retirement goals. And finally, number five, folks, we want to serve as your trusted guide. We want to earn your business. We want to earn your trust. So we want to be your research resource for any questions and help you manage the complexities of preparing for and thriving in retirement. You've heard me say this in the past. We want to prepare you for a safe retirement, not a risky retirement, folks. That's why we love doing this show every week. And we appreciate all our listeners and those of you who have called and left messages about how much you enjoy the show. Thank you so much. So, folks, let's kick this show off right now with what you know, what's coming next. The financial quote of the week. How about that financial quote wisdom music please. Here you go.

Producer:
And now, wholesome financial wisdom. It's time for the quote of the week.

Randy Sams:
All right. Financial quote of the week is given to us by Stephen Covey. The. The key is not prioritizing what's on your schedule, but to schedule your priorities. Got that? The key is not prioritizing what's on your schedule, but to schedule your priorities one, two three, four. Which one's the most important and get that schedule. Mr. Colby was born in 1932, passed away in 2012, was a renowned American author, educator, and motivational speaker known for his influential work in the field of personal development and leadership folks. He's best known for his widely acclaimed book, The Seven Habits of Highly Effective People, which has sold over 25 million copies and has been a cornerstone of leadership and self-improvement literature. All right, financial quote of the week given to us by Mr. Steven Covey. All right. Public service announcements. Here's what we're going to do. As you know, this is October. Excuse me when you were listening to this. It's going to be November the 4th. All right. We are. But say what? Well, maybe one third of the way into what's known as AEP. So let's talk about a little bit about AEP. Just for those of you who may be thinking about making changes, what can I do? What is what is oep? I'm going to spend a lot of time, but I am going to cover it. So that way if you have questions, you know what to do.

Randy Sams:
You can call us or go to the website. Leave us your information. All right. Aep Medicare's annual enrollment period. It started on October 15th and will end on December 7th. So it's very important that you reevaluate your plan each year. This is your Medicare plan, your Medicare Advantage plan, your prescription drug plan, original Medicare, whatever you might have, whatever you might have, you can likely you might likely find you can save money on some of your Medicare expenses. Savvy retirees do a Medicare coverage check every year just in case they have an opportunity to save extra money. So, folks, again, what is it? A EP annual enrollment period from October 15 to 2020, 2023 to December 7th. And then after that, beginning January 1st, 2024 to March 31st, 2024, you have what's known as oep or open enrollment period. All right. So what's the difference? What can I cannot what can I do to EAP and EAP what I cannot do. All right EAP annual enrollment period. You can switch from a Medicare Advantage plan to original Medicare. Then you can consider enrolling in a medigap or a Medicare supplement plan as well. Switch from original Medicare to a Medicare Advantage plan. So if you have a original Medicare only part A and part B, and you want to improve that, or you want to take out a Medicare Advantage plan, you can do that between October 15th and December 7th.

Randy Sams:
Switch from one one Medicare Advantage plan to a different Medicare Advantage plan. And or you can switch your standalone prescription drug plan to a different standalone prescription drug plan. All right. Those are just some examples of what you can do during. Now let's look at oop oop. You can only make changes during the open enrollment period which is from January 4th. The March 31st 24, 2024. Only if you make changes during AEP. So during Oep, you can switch from a Medicare Advantage plan back to original Medicare. So if you made a change on your Medicare Advantage plan during AEP and you want to change back, you can do that during Oep, but only if you made a change during AEP switch from one Medicare Advantage plan to a different Medicare Advantage plan. And what you cannot do again, if you did not make any changes during AEP, you cannot make any changes, you cannot join or you cannot switch unless of course, you qualify as chronic or dual eligible. So folks, listen, we're going to come right back and we're going to talk about RMDs required minimum distributions, what they are and are you required to take them in 2023. You're listening to Your American Retirement. We'll be right back.

Producer:
Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.

Randy Sams:
Hey, welcome back to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. Don't forget to check out your YouTube or our YouTube page, visit youtube.com and search for Your American Retirement and you'll see my smile and face. My mama always told me, Randy, you have a face that's perfect for radio. Hahaha, that's a little guess. Radio comedy? Maybe very little. Okay. Anyway, hey, I want to. I want to kind of finish up the. Just to make sure you understand. We talked about what you can and cannot do during what you can and cannot do during. Again, open enrollment period, which is January 1st, 2024 to March 31st, 2024. But listen, I want you to be aware, those of you who are getting all these cards and letters in the mail and phone calls, you know that you didn't ask for, or you're seeing all the commercials on the television about Medicare, Medicare Advantage, all these different carriers about this and about that kind of confusing. But I want you to be aware, avoid scams during this year's Medicare AEP. All right. Be aware of unsolicited contacts, folks. That's not allowed. Be cautious of unsolicited phone calls, emails or door to door visits offering Medicare related services. Folks, if you didn't ask me to call you, if you didn't ask me to come to your house. And talk about Medicare. Product Medicare advantage, prescription drug plan, Medicare supplement, whatever it may be. If you did not invite me. If we didn't already have an appointment and I'd show up at your front door, that's an unsolicited call or unsolicited contact, and that is not allowed to take that person's name.

Randy Sams:
Take a picture of them if you can, and turn them in. All right. That shouldn't be happening, but unfortunately it does. And also very important protect your Medicare card, keep your Medicare card secure, and avoid sharing your Medicare number. I just don't understand why folks would give someone that they've never seen in their life their Medicare number over the telephone. All right. And I can go deep into that little rabbit hole, but we don't have enough time. Maybe on another show we'll talk about that. Why feel like you should be doing business only with a local agent, so you can look them in the eyeball? If something that you need help with, they're there to help you with it. You got a 800 number that you called, and you bought your Medicare Advantage plan from someone that you don't even know where they're at. If you have issues with that Medicare Advantage plan, who are you going to call? That's like Ghostbusters, right? Who are you going to call? You don't have anybody local. You probably are never going to be able to talk to that person who you took the plan out with over the telephone, right? So anyway, I'm get off that soapbox. All right. Let's talk about RMDs. All right. This is my public service announcement for those of you who. Are Ian and taking RMDs. Or this might be your first year at 2023 of taking an RMD.

Randy Sams:
Or maybe next year. 2024 is going to be your first year of taking an RMD. And some people are asking right now, Randy, what is an RMD? Good question. Rmd or RMD required minimum distribution okay as we approach the end of the year. This is November. 2023 is important to remember that the deadline for taking your required minimum distributions, or as I'll refer to them from this point on, RMDs, is fast approaching, which is December 31st. Missing this deadline could result in significant penalties. Be sure to mark your calendars and prioritize this important financial task before it's too late. So RMDs from employer based retirement plans and traditional individual retirement accounts IRAs will be due December 31st for most people 73 and older. So don't forget those distributions are taxable. So let's spend just a little bit of time on what an RMD is and how they work. All right. So again an RMD is the smallest amount you must withdraw from your tax deferred retirement account every year after a certain age. At some point in your life you may have put money into a tax deferred or as I refer to them, as a qualified plan, a retirement plan, such as an individual retirement account, a 401 K, whatever it might be. Okay? Through the workplace or maybe on your own. The key word here is tax deferred. You have postponed taxes on your contributions and earnings. So it's been growing tax deferred. You didn't eliminate them so you didn't pay taxes on it.

Randy Sams:
Eventually you must pay tax on your contributions and earnings and the RMDs required minimum distributions. Make sure that you do that. All right. When do I have to take RMDs. Great question. As of January 1st, 2023, the RMD start age is now 73. Folks it's changed. It went from 70.5. It went to 72 and beginning January 1st, 2023, the new RMD start age is age 73. If you were turning 73, in 2320, 23, you must start taking your first RMD by April 1st of next year. Okay. In other words, the year after you turn 73. But so let's say you celebrated your 73rd birthday on July 4th, 2023. You must take the RMD by April 1st, 2024. But. Ali on the. But you'll also have to take another RMD by December 31st, 2024. Which would mean that would be you'd have to take. Two RMDs in 2024. You could delay taking your 2023 RMD up to April 1st, 2024, but you would then have to take your second RMD, which would be the RMD that's due for 2024 by December 31st. All right. So. Again. As of January 1st, 2023, the RMD start age is now 73. For tax year 2022. It was 72, but it got changed to 73. All right. So how much do you have to withdraw each year. So the amount changes your RMD percentage changes. So you can start by calculating how much you had in your tax deferred accounts as of December 31st the previous year.

Randy Sams:
Okay. And then you got to find out what that minimum amount is. As an example, if you turn 73 this year. Your distribution period is 24.7 years, because it basically says the distribution period is an estimate of how many years you'll be taking R&D. So they're estimating that your distribution period right now at age 73 will be 24.7 years based on your life expectancy. So then you got to divide. So there's a there's a big formula that you have to do. But basically as an example, if you're 73 this year you have $100,000 in a tax deferred plan. And that was your balance at the end of 2022 or 2023, your RMD divided by 24.7 would be $4,049, $4,049. All right, so that's the amount that you must withdraw. And if you're in a 25% combined state and local tax bracket, you are going to owe a little over $1,000 in taxes. All right. Again, what types of of accounts require RMDs? Folks, that would be traditional IRAs, SEPs, simplified employee pensions IRAs Sep IRAs. Simple IRAs 401 seconds. Nonprofit 403 plans. Profit sharing plans. So folks, that those are just a few examples, but anything that you have been accumulating. Tax deferred. When you hit that age right now at 73, you have to start taking those RMDs. What if you don't take those RMDs? Good question. If you do not take any distributions when you're supposed to. Or if your distribution is not large enough, you may have to pay a 50% excise tax on the amount not distributed as required.

Randy Sams:
Okay, so that kind of gives you an idea. And as folks, we spoke about RMDs last week and I had a caller, basically a listener that called in and left me a question. All right. So I'm going to Answer that question. This gentleman's name is Mike. Mike's question is this. I will be turning 72 in October 2023. When am I allowed to take my first RMD? I want to take an RMD the earliest I'm able to. I don't want to take it too early, and I don't wish to make two withdrawals in one year. Do I use my year ending statement total balance for the year 2022? I am very confused. All right Mike great question. So again Mike's asking. He's turning 72. He turned 72 in 2023. When does he have to take his R&D, and is his R&D going to be based on his balance at the end of 2022? So good question. First of all, your RMD age now starts at 73 as of January 1st, 2023. Your RMD start age is now 73, so since you will be turning 73 Mike in 2024. 2024 will be the year in which you will be required to start taking your initial RMD. Since RMD withdrawals are based on specific calendar year, any distributions or withdrawals you take in the calendar year of 2024 can count towards your 2024 RMD. Okay. Yeah. So for the first initial RMD year, Mike, you have until April 1st 2024 to take the RMD.

Randy Sams:
I mean you have April 1st, 2025 to take that RMD if you so choose. Okay. But for 2025 and each year following, you have to take the entire year's RMD amount by December 31st of that year. So to Answer your question, Mike, you can start taking RMD in January 2024 even before you turn 73. As 2024 is the calendar year, you turn 73, so you can take withdrawals that satisfy the requirement in as many withdrawals as you like or. One lump sum or two withdraws, whatever. Okay, that's up to you as to how many withdrawals you take and when you take them during the calendar year of 2024, as long as you take the entire 2024 RMD amount by April 1st, 2025, there will be no penalties. Okay, so to Answer the second part of your question, Mike, no, you'd be you won't be using the 2022 ending balance. You'll be using December 31st, 2023 ballots to calculate your 2024. Okay. Remember, RMDs are based on your previous year ending balance December 31st. So, Mike. In 2024, you're going to use what your account balance is December 31st, 2023. So I hope that kind of clears up some things about RMDs. But folks, we wanted to remind you that RMDs are due. If you're paying RMDs right now and you haven't taken it for 2023, and you should be, you have until December 31st to take that RMD. Hey, you're listening to Your American Retirement on 101.1 FM. The Answer We'll be right back.

Producer:
Retirement landing spots for retirees has become more diverse. I'm Jim Tarabukin with the Retirement Radio Network powered by AmeriLife. While many cities in Florida still serve as retirement destinations, retirees are looking beyond the sunshine and warm weather for factors that contribute to their quality of life. Cnbc's Sharon Epperson explains the.

Sharon Epperson:
Bottom line living near the beach may sound great, but it won't be the haven you expected. If you don't have the support and services you need to get there and enjoy it. Take your time to consider a variety of factors before deciding where to live.

Producer:
According to a recent US News and World Report, the six key factors of housing affordability, desirability, happiness, health care quality, retiree taxes and the local job market all play pivotal roles in where retirees might relocate. The same study shows five of the top ten US cities best suited for retirees are located in Pennsylvania. Lancaster, PA checks in at number one, followed by Harrisburg at number two. York, Allentown and Redding also represent the Keystone State. Tampa, Naples, and Daytona Beach sit in the fourth, sixth, and seventh spots, respectively, on that list. Representing Florida, Pennsylvania, and Florida are the two clear cut retirement destinations. Retirees benefit from tax breaks in both states, while Pennsylvania doesn't tax retirement pensions and distributions from 401 seconds, IRAs and Social Security. Pennsylvania and Florida, the two states uniquely fit for different retirement priorities for the retirement radio network powered by Emperor Life. I'm Jim Tabaka.

Producer:
Are you interested in ways to protect and grow your hard earned money? Your American Retirement is here to help. Here's Randy Sams.

Randy Sams:
Hey, thanks for joining us on this week's edition of Your American Retirement. Be sure to check out our podcast version of the show on Apple, Google, Spotify, or wherever you might get your podcasts. Whatever your favorite podcast provider is, look for us and we're on there, folks. All right. Now we're going to talk a little bit about retirement. Are you in? The retirement red zone. How safe are you in the retirement red zone, folks? What is the retirement red zone, Randy? I'm glad you asked. All right, here we go. I've talked about this on several shows leading up to it, but we're going to talk about retirement, some of the things we're going to be facing, some of the crisis that we see. On the remainder of the show. But are you in retirement or red zone? Folks, I call the retirement red zone. Anybody individuals who are within five years of retirement, or those who have retired within the last five years, are said to be in the retirement red zone. That's what I call it. If any of you are football fans, you know for a fact that when a team gets inside the 20 yard line, they call that the red zone, all right. And they get they have statistics that show how often a team, when they get inside the red zone, whether they score, whether it's a touchdown, whether it's a field goal, whatever it happens to be or if they don't score at all. All right. But the retirement red zone, when I speak to my clients or we're giving a consultation with clients, I want you to focus on the five years before you retire.

Randy Sams:
And five years after you retire or five years into retirement. Okay. Because. If you come close or fall within this range, you have a special need to protect your hard earned retirement savings. As you shift into what we know, what we refer to as the decumulation phase. In other words, you're now taking money out. You're no longer putting money in. So portfolio losses that occur within this ten year window will have a significant impact on your future lifestyle in retirement. This is because you stand to lose more than you ever did during your working years, which is called accumulation phase. Okay. So folks, it you have to look at sequence of returns. Okay. I've had too many folks that I've had conversations with that unfortunately something has happened. The stock they had, they had they had their money invested in stock market. They had their money in the 401 K's, and they had it heavily invested in stocks and their 2 or 3 years or four years away from retirement. And what happened? If the stock market. Drops. What happens to the value of your IRA, your 401 K, your retirement plan? It also drops, doesn't it? Okay. And I give the example of myself when I was still employed as a corporate executive. In 2008. You guys know what happened in 2008. I lost probably 40 to 45% of my 401 K value.

Randy Sams:
And that hurt. When I got those quarterly statements, I didn't even open them up. I put them in the drawer. All right. But see, folks, I was young enough where I felt like I could ride that out. You know that rolling Stone song Time Is on Your Side? Okay, well, when you get in, retirement, time is no longer on your side. You can't you can't see a big drop in your retirement fund in your 401 K while you're taking money out at the same time and hope that it's going to recoup, okay. It's going to rebuild itself. That's where you have the I guess you have the consequence of running out of retirement funds. In other words, your money runs out. And you're still alive. You're still in retirement. So what we look at is too many people have seen that happen to them. It took me between 2000 and 8. It took about five years for my 401 balance to recover. All right. But I was young enough. I was still putting money in. My employer was putting money in. The market was starting to turn around, but that was five years later. Folks can't do that right now and neither can you. So unfortunately for people who are still working. But they are close enough to retirement. When you see a drop in your retirement fund, that's that. Five years before retirement, what's what's you've got to make some decisions. What decisions are you going to have to make, Randy? I'm either going to have to work longer and wait that out until my 401 K or my IRA or whatever it happens to be recovers and it gets back to level instead of being way ahead, but it gets back to level and then think about retirement or I'm going to retire on less money, which means I may have to go get a part time job.

Randy Sams:
May not be something that you want to do, but it's something that you have to do. Okay. So that's why it's very important that we look at the five years before and the five years into retirement. So a down year resulting in a 10% loss will have a much larger effect. If you are in the retirement red zone, then a 10% loss happened in the early decades of your career. In other words, you're taking money out. At the same time that your retirement fund, your 401, your IRA, whatever your managed account is going down and you're taking money out that 10% loss for it to recover. Oh, how much is it going to take? If you have 100,000 and you lose 20%? Now your account value is 80,000. A lot of folks think, well, if it goes up 20%, I'm back to level no. 20% of 80,000 is what, 16,000. So now you're at 96,000. You started at 100,000. So if you lose 20% of your account value. You're going to have to see about a 2,425% increase for you just to get back level.

Randy Sams:
Now. Let's let's do the perfect storm. You see a 20% drop in your account value and you're taking out money at the same time. That 2,425% now just jumped up to probably around 30% increase. Okay. That's why it's important for us to look at that retirement red zone the five years before and five years after you retire. Remember, we want to set you up, folks, for a safe retirement, not a risky retirement. So what is the retirement crisis and how to avoid outliving your money? Perfect segway right from the retirement red zone into this. How to avoid outliving your money as generations of Americans figure out who and what to blame for the faltering US economy, millions of Pre-retirees are facing dire financial challenges of their own. So the the US is about to reach what we refer to as peak 65. Peak. Peak. Peak 65. In 2024, when more Americans reach the age of 65 in the same year than ever before, and majority of them are not fully prepared for retirement. That's what's sad. Okay, in addition to the Social Security crisis, we could see benefits slashed by 2035 or even earlier if budget stability is not achieved. So if they don't make some changes in Washington DC. Our Social Security benefits that you're receiving right now could be slashed. All right. Older Americans today face several other obstacles in the way of a comfortable retirement, folks. Baby boomers represent the first retiring generation, where more than half don't have a pension to provide a portion of retirement income.

Randy Sams:
That makes this the first generation where the majority must rely on their own savings and financial efforts to prepare for retirement. Okay, so folks, what happened was a long, long time ago, people used to work forever. They'd go to work for a corporation and they'd work 30, 35, 40 years and they retire. But they had the peace of mind knowing that they retired. With what? A pinch in. And then they had Social Security to help supplement that pension. Now we do not have that. We don't have a defined benefit plan any longer. The majority, only about 10 to 13% of employers today offer their employees a pension plan. For the majority of the responsibility for retirement plans is now on you, the employee. Okay. So that's why you see 401 K. That's why you see for any kind of investment yourself. But how many people are educated on where they should be investing their money in folks. Not too many. Okay, so more than 10,000 people per day. Baby boomers, more than 10,000 baby boomers. Per day are turning 65 in 2023. Now, by 2024, that number is going to rise to 12,000 people a day. That's why they call that peak 65. Okay. So right now we're seeing 10,000 baby boomers every day turning 65. And we will for the rest of this year, beginning in 2024, that number is going to jump up to 12,000.

Randy Sams:
Baby boomers every day. So a new study from the Alliance for Lifetime Income, which is an organization, a nonprofit organization devoted to educating Americans on retirement savings, found that 93% of consumers who diversified their portfolio with an annuity in 2022 were satisfied with the choice to establish a personal pension. Did you hear that 93% of consumers who diversified their portfolio with an annuity in 2022 were satisfied with the choice to establish a personal pension? So, folks, if you're working right now and your employer does not provide you with a pension. I need to give us a call (866) 990-7664 or go to the website Your American Retirement. If you would like to see how a personal pension could fit into your retirement plan, just pick up the phone and give me a call. Or go to the website and learn more. And then please schedule a free consultation. Schedule an appointment because we'd love to be able to assist you and your spouse and let you see how you yourself can utilize your 401 K benefits if you're 59.5 or older, even if you're still working, we can set you and your wife up with a personal pension plan right now. Okay, that's what's so great about what we do. And yes, we use annuities. Folks. I've been doing annual reviews with all my clients. Every year we have. If we have an indexed annuity, we do what's known as annual reviews. And we look at the performance of those annuities. And you know how many times I've had conversations with clients.

Randy Sams:
Who give me the same satisfaction that what I just read to you about why they're so glad that they made the decision to choose the. Guaranteed lifetime income annuity because too many of their friends, too many of their family members, too many of the folks down at the donut shop or the coffee shop where they solve all the world's problems. Too many of those people, friends and family have been crying about losing money in their 401 seconds or their investment programs, whether it be a managed account or whether it be a 401 K or an IRA or whatever. People. The stock market has dropped, what, 7% just since July. It's still not it still didn't catch up in July with where it was at the January 2022. So too many of my clients are very happy when we have those annual reviews. Why? Because unlike all their friends and family that don't have an annuity still have their funds in the stock market, they haven't lost money. The majority of them are gaining money because they have a guaranteed lead interest amount that they're getting every year, no matter what the stock market does. So you need to give us a call again (866) 990-7664 or go to YourAmericanRetirement.com. Please leave me your information. It's free. Take advantage of this. And let's sit down and let's look and see where you're at. They were going to be right back. You're listening to Your American Retirement.

Producer:
It's that time of year again. Medicare's annual enrollment period is here for decades, Randy Sams, the host of Your American Retirement, has helped the people of Arkansas navigate the complexities of their choices in retirement. Stop guessing when it comes to something as important as your health and your wealth. Get the Answers you need by calling Randy now at (866) 990-7664. That's (866) 990-7664. Learn more at YourAmericanRetirement.com. Welcome back to Your American Retirement. Here's Randy Sams.

Randy Sams:
You're listening to Your American Retirement. Please join me every Saturday at 10 a.m. right here on 101.1 FM. The Answer where Little Rock comes to talk. Folks, thank you for joining me on this Saturday morning. I hope you've been taking some good notes. I feel like we've given some great information for those of you who are, you know, questioning what I'm supposed to do with my Medicare Advantage or my Medicare sub or my prescription drug plan during AEP. And also for those of you who may have just turned 73 this year and you have questions about RMDs, retirement, red zone, folks, we want to get you prepared for a safe and a happy retirement, not a risky retirement. So we want to be able to make sure that we make touchdowns when we hit that retirement red zone and not lose the ball or fumble or throw an interception. Let's finish this out. Why you cannot prepare for retirement the same way your parents and grandparents did. Why are you today getting ready to retire or you're in retirement? Why you cannot prepare for retirement the same way your parents and grandparents did. Changing retirement age in the past, many retirees expected to stop working at a fixed age, often around 65. Nowadays, retirement age is more flexible, with some people working longer while others may retire much earlier. So folks, when everybody you ask someone, well, what's your retirement date? What age do you want to retire? Folks, I get all kinds of Answers.

Randy Sams:
I've got folks that want to retire at age 62. That's great if you've done the right planning. If you've put a retirement plan in place, that is going to guarantee you an income for the rest of your life and you're happy with that amount, then by all means, if 62 is your age to retire, go for it. But don't meet a lot of people who, at age 62 can retire. Most of the folks that I'm talking with right now, and I'm being honest with you, they're looking at age 67 or after, folks. I'm working with people right now that are in their 70s, not late 70s, but early 70s that are still working. Some may just be getting ready to retire at age 74, but because of the financial situations that they found themselves in, and some of it is because they really enjoyed doing the work that they were doing, but the majority of it is because they haven't they didn't start making their retirement planning. They didn't put a plan together until later on, when they were more close, while they were closer to retirement versus starting it early. I always say, give yourself ten years. If you're 58 years old right now, 59 or 60 somewhere in that age, you should be putting together a retirement plan today and utilizing the safe money products that we have to put in place for you and your spouse or your family.

Randy Sams:
And let's take advantage of that for seven, eight, nine, ten years. And then when you retire, you've got the peace of mind knowing that, hey, I met with Randy eight years ago and we put together this plan, and now I know and my wife knows that we have a guaranteed lifetime income coming in that we can never outlive folks. That's called peace of mind. Okay? We no longer look at age 65. That's. You can do that just based on what? Social security, what is your full retirement age right now for Social Security? Many of you, it's 66, 66.5, 66 and eight months, 67. And because of what we know, that could happen. And they're saying will happen in 2034 with Social Security, that could be increased also. So changing retirement age is different today than what it was when our parents or grandparents were younger or when they retired longer. Life expectancy. This is called longevity risk. People are living longer which means retirement savings much last even longer. Retirement savings must last even longer. You can no longer plan for your retirement to last till age 80. Because folks, we have people that are living in their 90s. We have people that are living into their age 100. This increases the need for more significant savings and potentially more predictable investment strategies I'd like.

Randy Sams:
To see you use the rule of 100. So if your age 60 right now, you should not have more than 40% of your retirement funds in risky products stock market, whatever it happens to be equities, you should have 60% in what I call safe money investments, safe money products, annuities, pensions are declining. Pensions have gone away. In the past, defined benefit pension plans were more common, providing retirees with a guaranteed income in retirement. We talked about that these plans have become less prevalent, shifting the responsibility for retirement savings onto individuals. Folks, last year you might be able to find it, but I hosted a a movie here in Benton. It was called the baby Boomer dilemma, baby Boomer dilemma. And it focused on this because of the fact that the majority of baby boomers today do not have a pension that they can look forward to retiring with. It's been placed on their shoulders. And the majority of the time when I spoke, speak to people about their 401 K or their IRAs or whatever, what do you have an invested in? Majority of the time they do not know. They haven't been following it. They just get that statement and they look to see if it's going up or going down. It's got a positive or a negative. That's not the way we should be operating. Okay. Pensions today, if you're one of the few lucky ones that actually have a pension, congratulations.

Randy Sams:
But we can set you up. Like we said earlier, with your personal pension, utilizing the funds that you have right now, social security challenges, folks. Concerns about the program's long term sustainability have increased. Social Security Administration has stated that the Social Security Board of Trustees projects program costs to rise by the year 2035, so that taxes will be enough to pay only 75% of scheduled benefits. Now, folks, did you see that? See, we used they used a little 75% and that's 2035. So we're getting close to 2024. So let's say 10 to 11 years from now, do you want to see your Social Security benefit that you're receiving today? Do you want to see that decreased by 25%? Because what do you think is going to be happening over the next 10 to 11 years as far as inflation is concerned? You think inflation is going to stay level. You think inflation is going to decrease, or do you think inflation is going to continue at three, 4 or 5 or like we had last year, what almost double digits probably was double digits. To tell the truth, if inflation continues to go the way it's going right now, and all of a sudden ten years from now, your Social Security benefits are cut by 25%. I don't think a lot of y'all are going to be happy.

Randy Sams:
I'm not trying to be doom and gloom. I'm just trying to prepare you. This is what they're talking about. So hopefully they'll be able to get together and make some changes. And maybe those who are on Social Security at that time or getting close to Social Security and you paid into it, they're not going to cut your benefits, but they need to make changes to those younger folks. Folks, what's happening is we have fewer people working today than we did ten years ago or 20 years ago, or 30 years ago or 40 years ago. Why? You can ask yourself that question, but you have fewer people. Working means you have fewer people paying into Social Security, but you have more people taking out. That's where the challenge comes in. Health care costs, rising health care cost and increased life expectancy mean that health care expenses in retirement have become a significant financial concern. And folks, I ask everybody, tell me what you have for long term care. How many of you out there right now, today have a long term care plan? Do you have automobile insurance? The majority of you are going to say yes. Do you have homeowner's insurance? The majority of you are going to say yes. If you looked at the stats on how many of you would actually. And we don't ever want you to ever have to utilize it, but you have homeowner's insurance, what's the likelihood of you ever making a claim if you have automobile insurance, what's the likelihood of you ever making a claim? But the majority of you out there, if I asked you how many of you have a long term care plan or some type of a long term care plan, the majority of you are not going to raise your hand, but 72% of everyone who is 65 or older right now, today, again, 72% of those of us who are 65 or older will have to utilize some type of long term care nursing home, home health facility, whatever.

Randy Sams:
But the majority of people do not have long term care. We can take care of that. You've just got to give us a call (866) 990-7664 or go. Go to YourAmericanRetirement.com release your information. Say, Randy, I'd like to have some information on long term care. Folks, I've got a long term care annuity. It's designed specifically for long term care that if you qualify, which the majority of the people that I deal with qualify for health wise, if you put in 100,000, you get a $300,000 benefit for long term care. Now, why do I like that plan? Because a lot of people say, well, Randy, I don't like long term care because the premiums keep going up and I pay on it forever and ever. And if I don't have to have if I don't ever utilize it, what happens to that money? It's gone away.

Randy Sams:
Okay, I understand that. But guess what? If you utilize the annuity for the long term care, if your investment is 100,000 and praise God later on, you don't ever have to utilize the long term care benefit. It's an annuity. So that 100,000 has been growing. And if you pass away, your family still gets the benefit of that $100,000 plus whatever it's grown to the annuity, the death benefit. Okay. So again we got inflation. We know that inflation is has taken a big bite out of your purchasing power on the money over time is going to continue to to grow like that. Economic uncertainty in a more globalized economy. Economic and market conditions are influenced by events around the world. And this can lead to more economic uncertainty, making it challenging to predict investment returns and folks changing employment landscape. The gig economy and increased job mobility have changed the nature of work. Job stability and employer provided benefits may not be as reliable, requiring individuals to be more proactive in their retirement planning. So folks, I want to thank you for listening to Your American Retirement. If you missed any part of today's show, go back in the podcast archives on Apple, Google, Spotify platform wherever you get your podcasts, you guys go have a great week. We'll talk again next week. God bless. Go, Hawks.

Producer:
Thanks for listening to Your American Retirement. You deserve to work with licensed financial insurance experts who can offer sound strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit YourAmericanRetirement.com today. That's YourAmericanRetirement.com, not affiliated with the United States government. Randy Sams does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. A merry life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

Producer:
Fixed annuities, including multiyear 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.

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