Beware Bank CDs: Smart Safe Alternatives to Your Retirement Savings

10.27.23: Audio automatically transcribed by Sonix

10.27.23: 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:
Hello again, Central Arkansas. Want to welcome you to Your American Retirement. Want to thank you for joining me on this Saturday morning. I hope you've had your 2 or 3 cups of coffee or whatever it takes. You're going a good breakfast. You're sitting down with your notepads and pencils and pens to take some good notes, because we've got a jam packed show on tap for you this morning. And hey, don't forget to check out the show in podcast form on Apple, Google, Spotify, or wherever you get your podcasts, and also visit our YouTube page as well. Go to youtube.com and search Your American Retirement again on the podcast. You can listen to previous episodes also on the website or your favorite podcast app YouTube channel. Check out our videos and subscribe to watch weekly highlights and more special content. Again, just search Your American Retirement on YouTube and you'll see my smiling face on there. You know you've hit the right spot again. Don't hesitate to call us with your questions. We love hearing from and helping our listeners. So remember, call us at (866) 990-7664 or visit our website. Your American Retirement.com. Leave us your contact information. We'd love to have a conversation with you. Kind of figure out what it is that, hey, what is it that's keeping you awake at night? Your concerns, what your stress points are. You might be getting ready to get to go into retirement, or you might be in retirement and just want to make sure that you're playing as good for you.

Randy Sams:
So you give us a call. So folks, I get this question asked. You know, Randy, you've been in the business for a long time, and there's a lot of folks out there. That do what you do. But you know, they they don't do the extra, they don't go the extra mile or go the extra to to service their customers or clients or educate. And they ask, you know, why? Why are you doing the radio show? Why? Why did you take. Undertake that task well. That's a good question. So to Answer that, why we host this show each week is for you. Now, if this is your first time listening to Your American Retirement, I want to talk for a moment about why we are here broadcasting in Central Arkansas every week. We want to educate retirees and pre-retirees by providing valuable information and insights. Helping them make informed decisions about their financial future. We understand that knowledge is power, and we don't want our listeners or clients to ever feel powerless in retirement. This also includes staying current with the latest developments, trends and best practices in retirement planning. The financial world keeps moving and we don't want our listeners left behind. Number two, we want to address retirement challenges that retirees and pre-retirees often encounter. I'll offering smart strategies and solutions to help navigate these obstacles such as longevity risk, market risk, inflation risk, withdrawal risk. So folks, we want to get you prepared. 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 listeners and clients every week.

Randy Sams:
So folks, I've been in this business since 1986. You do the math. What is it, 37 years? Be 38 next year? I think I've learned a thing or two. I've had held corporate executive corporate positions with a with two of the largest insurance companies in the United States. So I think I have a good knowledge of what it takes to be successful in retirement. And that's what we want to help. 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 number five, we want to serve as your trusted guide. So we are your resource for any questions and helping you manage the complexity of complexities of preparing for and thriving in retirement. So at SMG financial Your American Retirement, we want to prepare you for a safe retirement, not a risky retirement folks. We are just a phone call away, so please reach out to us to get started on your own custom retirement plan today. Again, visit our website, Your American Retirement.com, or give us a call (866) 990-7664 to schedule a no obligation consultation. So folks, let's get this show started. It's time for financial wisdom. Quote of the week. So the music plays and here we go.

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

Randy Sams:
Opportunities are like sunrises. If you wait too long, you miss them. I like that. Opportunities are like sunrises. If you wait too long, you miss them. That is given to us by Mr. William Arthur Ward. Mr. Ward was born in 1921, passed away in 1994, was a renowned American writer, writer, teacher and motivational speaker. He is best known for his inspirational quotes. In writings which have left a lasting impact on people around the world. Ward's words often focused on personal development, leadership, and the importance of embracing one's full potential. So folks, once again, opportunities are like sunrises. If you wait too long, you're going to miss them. That is our financial wisdom. Quote of the week. All right, a little public service announcement. Again, a lot of you all know if you have Medicare Medicare Advantage prescription drug, you know that you are right in the middle or we are in what's known as a epi. So Medicare's annual enrollment period, better known as EPI, began October the 15th and will run through December 7th. By reevaluating your plans each year, you will likely find that you can save money on some of your Medicare expenses. So savvy retirees do a Medicare coverage check every year, just in case they have the opportunity to save some extra money. So let us know how we can help you with your Medicare. Again, visit our website or give us a call the website Your American Retirement.com or toll free (866) 990-7664. But folks, what can you do during a epi? All right. Again, it began October 15th and it will run through December 7th.

Randy Sams:
And you have an opportunity to make changes. During the Medicare Advantage. Annual. Enrollment period. All right. What can you do? You can switch from a Medicare advantage plan to original Medicare. Then consider enrolling in a medigap or a Medicare supplement plan. Or you can switch from one Medicare Advantage plan to a different Medicare Advantage plan. Okay. You can switch from original Medicare to a Medicare Advantage plan. If you have a prescription drug plan and you're it did not. Maybe it didn't do exactly what you thought it would when you took it out earlier this year, or you've had it for a couple of years. Maybe you're taking more medications now at the end of this year. So going into 2024, if you want to make that change on a prescription drug plan, you can do that. During EP. All right. So those are just a couple of examples of what you can do during a EP. So but I want to remind you folks. Avoid scams during this year's Medicare AEP. Beware of unsolicited contacts. Be cautious of unsolicited phone calls, emails, or door to door visits offering Medicare related services. Folks, if I call you out of the blue and want to talk to you about Medicare, Medicare Advantage, that's a no no. If I go into a neighborhood and just walk around and knock on doors without you asking me to come or inviting me to be there, that's a no no. All right. Do not share personal or Medicare information with anyone who contacts you first. Research the plans. Protect your Medicare card. Keep your Medicare card secure and avoid sharing your Medicare number.

Randy Sams:
Medicare cards no longer display Social Security numbers to enhance security. So, folks, if you're doing something over the telephone and they ask you for your Medicare number, you've got to think about it before you give it out. Trust but verify. Regularly review your Medicare statements for any discrepancies or changes you don't recognize. Report any potential fraud to Medicare or your state's senior Medicare. So folks, listen again. If you have someone that calls you on the telephone that you did not solicit them to call you or ask them to call you, and they begin to talk to you about Medicare Advantage. That's that's a no no. Okay. You can report them, get their information, take it down, call the insurance department, call CMS, call Medicare.gov. All right. If you have someone walking through your neighborhood knocking on doors, and you didn't invite them to come to your house to talk about Medicare Advantage, Medicare supplement, prescription drug plans, that's a no no, that's unsolicited. That's against the rules. Okay. Again, get their information and then tell them bye bye. I hope that's kind of giving giving you a little overview of what you can and cannot do during what is all about and what to look for during EAP. Make sure that you are caught up in one of the scams that we see going on during EAP. Listen, we're going to be right back. So I'm anticipating you to come and we're going to talk about banks and certificates of depression I mean CDs. We'll be right back. You're listening to Your American Retirement.

Producer:
Visit Your American Retirement.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 we're little Rock comes to talk. Don't forget to check out our YouTube page, visit youtube.com and search for Your American Retirement. And you're going to see my smiling face today. I've got my Razorback red shirt on. Of course, the Razorbacks are off today, but that's okay. I'm still going to support them. All right, let's talk about something that I get a lot of questions about banks and CDs. All right. So let me put this out first. Please be cautious with bank CDs. We'll talk about bank failures in 2023. Silicon Valley Bank failed on March 10th and was the 16th largest bank in the United States at the time of its failure. It was also the largest bank by deposits in Silicon Valley, I should say Silicon Valley. Okay, signature Bank failed on March 10th. Signature Bank was a New York based full service commercial bank, which failed when customers, spooked by the sudden collapse of Silicon Valley Bank withdrew more than 10 billion. That's that's B billion dollars in deposits. Bailout efforts. On March 16th, 11 of the biggest banks in the country announced a 30 billion bailout package for First Republic Bank in an effort to prevent the California based bank from becoming the third bank to fail in less than a week. You hear that, folks? All right, so the collapses of SBP and signature Bank were the second and third largest bank failures in US history. Historically, if you look at the 20 largest bank failure failures in US history, ten of them happened between 2008 and 2010.

Randy Sams:
Maybe a little personal warning here, folks do not hold more than $250,000 in any bank at any time. I'm going to repeat that. Do not hold more than $250,000 in any bank at any time. This is my personal warning, so please be sure and verify that any bank you use is FDIC insured. The Federal Deposit Insurance Corporation insures deposits of up to $250,000 per depositor, per insured at the bank, per insured bank. Do not hold more than $250,000 in deposits at one bank at any time. So you see, that's per depositor. So if you're lucky enough to have $1 million, you could have up to two. You could have 250,000 in a bank with your name on it, and 250,000 in the same bank with your wife's name on it, and then take the other 500,000 and do the same thing at another bank. At least you've got the 250,000 and your name 250,000, in your spouse's name. All right. So we want to look at some smart, safe alternatives. To. Bank cards. And again I call a CD a Certificate of depression. Now see, these are doing much better now than they have. But let's talk about how to protect and grow with safe, smart, safe alternatives to bank CDs. So a lot of people are concerned about the market downturn over the last three months. Y'all been paying attention. The S&P 500 has fallen about 7.5% since its most recent peak in late July.

Randy Sams:
All right. So the market was going up in the right direction. People were happy in July. Since July it's fallen 7.5%. You likely received your Q3 account statements recently, and like so many others, we know you are concerned about losing your hard earned money to heavy stock market exposure. That's called market risk. It's important to protect a portion of your retirement savings as you get older, simply because as you age, you have less time to make up any significant losses. I like to say this the old rolling Stone song Time is on My Side. Nope. When you retire. Time is not on your side. You don't have that time. That luxury of time on your side. To ride out the market to come back up. Okay, I give you a personal example. In 2008, when I was still working in my 401 K, you guys know what happened in 2008? The market crashed. I lost about 4,045% of my 401 K value. Again. I was young enough at that time. Again, time was on my side then because I could ride that out. But the sad part is, folks, it took five years. Five, almost six years for my 401 ballots to get back to the same ballots. It was in 2008 before it lost 45%. Okay, so but now when you're in retirement. You're in your late 60s or 70s or 80s. You don't have the luxury of time on your side, so if you have all your money invested in the stock market and you lose 30, 40, 45% like we did in 2008.

Randy Sams:
Or like we did a couple of years ago. You don't have the time to wait for that money, for that account value to come back up and get level. All right. Once you leave the workplace and retire, you begin what's known as your accumulation phase. As you start drawing down your assets to receive the income you need to live on in retirement. Which means that protecting what you do have saved is paramount. So folks, here's the picture. You're taking money out of your account versus putting money in so you don't want your retirement fund to hit zero before your blood pressure does, if you get what I mean, if you understand what I'm saying. All right. If you're taking money out and your account value. Begins to drop. At the same time, you're taking money out, folks. That's the first indication that there could be a high probability that you could run out of money. And I emphasize could depends on what kind of plan you have in place. Okay. That's why we put a lot of emphasis on annuities because it's safe and it's guaranteed. All right. We'll talk about all that in just a little bit. Because of rising interest rates, banks are able to offer more attractive rates for CDs. That's true. Certificates of deposit. But you should know that the current interest rate environment has also made other safe money alternatives more attractive as well.

Randy Sams:
All right. So let's take a look at bank CDs versus fixed indexed annuities. And I'm going to talk about what I feel like is the most important part. A lot of people that I've if y'all listening listen get get get close to the get close to the radio. What I'm about to say, this is one of the most important things that I think people when I meet with my clients or when I'm talking to someone that they do not understand. And that's called your financial reserve requirements. All right. You're putting your money in a bank, and people always say, well, it's FDIC insured. Folks, have you ever done a research on FDIC? See how solvent it is. That's another subject for another show, but I would hate to rely strictly on the fact that my bank is FDIC insured. Don't know what's going to happen. But listen. So I want to help our listeners understand what happens to their money when they're when they place their savings in bank CDs, or if you have your money in savings accounts. All right. When you deposit money with a bank, including bank CDs, the bank is only required to keep 10%. Did you hear that? The bank is only required to keep 10% of your money in reserves. This is a Federal Reserve requirement. Only 10%, folks, while the remaining 90% is used for other bank operations, including loans that are made to other customers.

Randy Sams:
So folks, they're only required to keep. If you put $100,000 into the bank, they're only required to keep 10% of that in reserve. The other 90,000 they can use as they see fit. What do you think happened to Silicon Valley? What do you think happened to the other banks? Bad investments. Okay. They had. The government had to come in and bail those folks out, but in comparison. So let's talk about financial reserves of the insurance industry. This is why I'm high on insurance industry, heavily regulated, more heavily regulated than the banking industry. But listen to this. In comparison, the highly rated insurance companies that issue fixed indexed annuities. This is another tool that we can use for safe money protection are required to keep 100% of the dollars you give them in reserves. All right. Did you hear that? Banks. You put money in the bank and they're only required to keep. What? 10% in reserve. An insurance company. A financially sound insurance company. You know why? Because they are required to keep 100% of the dollars you give them in reserve. So when you check out an insurance company and you can look at their reserves, and if their reserve says a $100 billion, basically what that tells you is that they could have $100 billion in liabilities, but that is reserved. All right. So let me ask you, where would you rather place your hard earned retirement savings with a bank that has a 10% reserve requirement, or with a highly rated insurance company with a 100% reserve requirement? I think that's a pretty simple Answer, at least for me.

Randy Sams:
All right. We're talking about a solvency ratio. So with an insurance company, a solvency ratio must be 100% or higher. So folks, we have insurance companies that we do business with. Their solvency ratio may be 106, maybe 108. So that means for every $100 worth of liability, they have 106 or 108. So they're way above their reserve requirement. All right. So number two bank CDs versus fixed indexed annuities. Tax implications. When your money is in a bank CD, you are required to pay taxes each year on any interest earned. Is that correct? Yeah. You get that 1098. You got to pay interest okay. You get $0.57 in interest in 2022 or 2023. You got to pay taxes on that. In comparison with a fixed indexed annuity, your investment is tax deferred and you only pay taxes once you start withdrawals. All right. So CDS versus annuities certificates of deposits short to medium term investments low penalties annuities long term investments for retirement pays a higher interest rate. So folks we have annuities that work just like CDs. They're not CDs. They are annuities. But they give you a guaranteed interest rate for a certain period of time. Okay. But folks, I want you to come right back because we're going to talk about how we can use annuities for inflation protection versus bank CDs. Again, you're listening to Your American Retirement will be right back.

Producer:
Do you want a steady stream of income for retirement? Then it's time to consider annuities. I'm Matt McClure with the Retirement Radio Network. Powered by a mirror life. Gone are the days when most employers offered pensions with guaranteed lifetime payouts to their workers. But what if I told you that you can build your own personal pension? It's possible with an annuity. An annuity is a financial product that provides a series of regular payments to an individual over a specified period of time, often for the rest of their life. There are several.

Ford Stokes:
Options for you to consider when choosing an annuity. Be confident in knowing that there is an annuity out there that can meet all of your needs.

Producer:
Ford Stokes is founder and president of Active Wealth Management and author of the book annuity 360. There are several different types of annuities, including fixed, variable, and fixed indexed.

Ford Stokes:
A fixed annuity offers a specific guaranteed interest rate on their contributions to the account. A fixed indexed annuity is an accumulation based product offered by an insurance company. The growth of your fixed indexed annuity is dependent on the performance of a chosen stock market index, but your money is not actually invested in this index. This offers you great growth potential and exceptional protection for your investment.

Producer:
While each can provide tax deferred growth and a lifetime income stream, variable annuities put your principal at risk in the market.

Ford Stokes:
If you are currently investing in a variable annuity, your funds could be in serious trouble if the market experienced any downturns.

Producer:
With so many possible choices to consider, it's essential you speak to a financial advisor or professional to help you make the best decision for your future. So are you ready to consider an annuity as part of your retirement plan? It's a key question to consider as you approach what should be your golden years with the Retirement Radio Network powered by a life. I'm Matt McClure. 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.

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 the podcast version of the show on Apple, Google, Spotify, or wherever you get your podcast. All right, folks, so we've been doing a little comparison about you need to be very cautious with bank CDs. Why? I feel it's important for you to understand this, because CDs are paying a decent amount versus where they were last year or two years ago. All right. But there's still still some things to consider. There are options out there. So we want to look at we've looked at CDs. Why a fixed indexed annuity versus a CD. Number one financial reserve requirements of a bank versus an insurance company. Number two tax implications. You have to pay taxes on any interest that you gain on a CD. Your interest is tax deferred on the indexed annuity or the annuities. Now let's look at number three bank CDs versus fixed indexed annuities. Inflation protection. While bank CDs do offer some predictable returns, many retirees are looking for both protection and growth. This is because inflation has been eating away at American's buying power for most of the last four decades, and has picked up in a bad way since 2020. Fixed indexed annuities allow investors to track the performance of a stock market index without subjecting their hard earned money to stock market risk. Some fixed indexed annuities even have attractive features like bonuses and guaranteed simple interest roll ups.

Randy Sams:
All right. I'm a big believer in guarantees, you know that I am. If you've listened to the show, I believe in guaranteed income. Why? Because I have yet to meet with a person who is about to enter into retirement, or is getting close to that retirement date. That is not concerned about income, and I have met zero clients or met with zero clients that have are in retirement right now that are not concerned about income. So folks, everybody in retirement or getting close to retirement is concerned about income. And listen to this. My opinion, several others out there feel the same way. You retire on income, not assets. Folks, assets can be lost. All right. We talked about bank failures. You've got a lot of money in the bank and it goes under. You're FDIC coverage is what, 250 K 250,000? What if you have more than that? What if you have money in the stock market and it drops like it did in 2008, like the example I gave before earlier in the show, it drops 4,045%. I believe in 2021, 2022. Did it not drop the stock market drop like 2,528%? A lot of people's 401 seconds and IRAs fell that same amount. All right. So that's why I am a big proponent, a big believer in guaranteed income. And we utilize annuities. Through a financially sound insurance company to make that happen for us to where you and your spouse will have the peace of mind knowing that as long as you live.

Randy Sams:
You're going to have that guaranteed income for your life and also for the remainder of your spouse's life. All right. So. Build a smart, safe retirement. Let's jump right into the next segment here. The next topic build a safe A smart, safe retirement plan with a fixed indexed annuities. That is fire. So if you hear me, refer to it as fire. I'm speaking of fixed indexed annuities. They are insurance contracts that provide a guaranteed income stream for your retirement. They are seen as an alternative to bank CDs or traditional bonds, and provide a way for investors to protect their retirement savings from market volatility. Feas are designed to provide protection from market downturns while providing potential for growth. All right. Folks, write this down. Zero is your hero. So the protection feature on the indexed annuity is the fact that if the index that we have any funds, that we have funds allocated to that particular index, if that index goes down, if it goes negative, you don't lose anything. So zero is your hero. Unlike if you have it in a stock market fund or a money market or any kind of you can name the investments if that account goes negative, if that index goes negative, if that fund goes negative, so does your account value. All right. So the main benefits of a fixed indexed annuities include protection from market volatility. Fixed indexed annuities provide protection from market volatility. Since the annuity is linked to the performance of an underlying stock market index, the income is not directly affected by short term market fluctuations.

Randy Sams:
This makes them an attractive option for investors who are looking for a steady and reliable income stream. Guaranteed lifetime income, so a guaranteed lifetime income annuity. Some people curl their nose up, their wrinkle, their nose up and go, don't like annuities? You're on Social Security. Well, guess what you have. You have a lifetime annuity. If you're one of the lucky few out there who actually have a pension, you say you don't like annuities. Well, guess what that pension is. Your pension is a lifetime annuity. It's going to pay you for as long as you live. And if you set it up right, it'll pay you for as long as you live. And your spouse. Okay. Tax deferred growth. This means that any earnings on the annuity are not subject to taxes until withdrawals are made. So as an example. If we have an annuity, let's say. That you have just turned 60 years old. You're still working and you still plan on working, but you would like to take some of your money out of the 401 K that is still linked to the stock market indexes or stock market funds, and you'd like to protect that. How can you do that? Good question. It's known as inservice distribution. So folks you can take a percentage of your 401 K. Again the age is starting at 59.5.

Randy Sams:
So if you're 60 years old you can take a portion of your 401 K or all of it if you want to. That's your decision, not mine. We're going to work that out and you can put that money. We can do a direct transfer, a rollover or an exchange, and we take the money from the 401 K, we roll it into a guaranteed income annuity. No tax implications. You're just going from one qualified plan to a different qualified plan. But remember your money in the annuity is protected. It's not going to go down. It can only go up. It may stay level but it can only go up. It's not ever going to be negative like it could if you keep your money in the 401 K. All right. So you take that money from the 401 K and you put it into the annuity, the lifetime income annuity. And we let it grow, let's say at 8% over the next seven eight years. Maybe your target retirement date is age 68. So we put that money at age 60 into the income annuity. It grows at 8% guaranteed for the next eight years. And when you hit 68 or 69, you can turn on that income for the rest of your life, and it's guaranteed for your lifetime. And if we set it up as joint income, it's guaranteed for the remainder of your spouse's life also for as long as you live. Remember, the annuity is something that you cannot outlive, and that's why we want to set you up with that guaranteed lifetime income.

Randy Sams:
I call it a self pension. If you don't, if you're working for a company that does not offer a pension, which is the majority of companies today, and it's on your shirt and the shoulders, the burden for retirement income is on your shoulders now. We take that money from the 401 K, we put it into that income annuity. We let it grow at whatever interest rate we're guaranteed. Then when we start taking that money out, you've just turned on your pension that you made for yourself and for your spouse. All right. And I've just got through talking about this, but lifetime income stream is another benefit of the indexed annuity. So don't worry about breaking your budget and enjoy the retirement income you can count on and never outlive. The opinion of this myself. Financial professional. Fixed indexed annuities are suitable for up to 70% of your portfolio. Typically, our clients are using indexed annuities for a 20 to 50% portion of their retirement savings, while the rest is allocated to smart risk investments that provide further opportunity for additional growth. So with the indexed annuity, I feel like you get the best of all worlds. You get safety, you get growth, and you can set yourself up with a guaranteed lifetime income annuity. And folks, let me kind of jump back just a second, because a lot of people have questions about their 401 K when they hit age 60, or you may be 61 or 62, whatever you may have never heard of what I'm about to talk about or what I mentioned earlier, known as in service distribution.

Randy Sams:
When you exercise that feature of your 401 K, you're still working. So you can continue to make your contributions into the 401 K, and your employer will continue to match those contributions into the 401 K. All right. So as an example, if you have $300,000 in your 401 K currently, and you want to take 50% of that and roll that over into a guaranteed lifetime income annuity and let it start accumulating now over the next five, seven, eight, nine years, whatever that period of time might be, you can do that. You still got 150,000in your current 401 K, and you can continue to make contributions and your employer will continue to make their matching contributions. All right. So I just want you to understand that we're not doing anything that's going to hurt you financially in going into retirement. So let's talk about an example of one of my annuities that we, that we that we utilize today. All right. I'm going to talk about the nationwide Peek ten fixed indexed annuity. The income annuity. So this annuity is currently being offered by nationwide rated A+ by three major credit agencies. That would be Moody's S&P and B-b-b. All right. The nation peak ten is offering a 20% bonus on the amount you invest.

Randy Sams:
So as an example, if you invest 300,000, your income account value would start out at 360,000 and begin to grow at that point in time. The nationwide peak ten is also offering an 8% simple interest roll up every year. You defer turning on income. So you invest 300,000. You get the 20% bonus, which means it's 360,000 and you are guaranteed 8% interest. Own that 360,000 every year. Do you defer? So if you leave it in there for eight years, it's gained 8% guaranteed over that next eight years or ten years. Nationwide, peak ten is also offering a 335% participation rate on the BNP Paribas Global Factor Index. That's a mouthful for me to say, folks. That's a stock market index that tracks the global healthcare markets. It's a good index. If the index should go up 10%, you would receive 33.5%. There have a 1% spread, which means you will be credited 32.5% on that account. Any money that you have in that particular index, if the index does not go up, the worst you can do is 8% simple interest for every year. You defer turning on the income. So folks, I hope that's that. Hope that helps. If you have any questions you're looking to reduce your investment risk, please visit the website or give us a call at (866) 990-7664. Folks, we're going to be right back, and we're going to talk about why seniors need to protect their buying power. You're listening to Your American Retirement.

I'm coming home. On my time. Now I've got to know what is and isn't mine.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? Then tune in to Your American Retirement to learn how you can protect and grow your hard earned money. Your American Retirement. Every Saturday at 1 p.m. right here on 101.1 FM. The Answer protect your hard earned money today and schedule a free, no obligation consultation now at Your American Retirement.com.

Producer:
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.

Producer:
Welcome back to Your American Retirement. Here's Randy Sams.

Randy Sams:
You're listening to Your American Retirement. Join us every Saturday at 10:00, 10:00 am, every Saturday morning at 10 a.m., right here on 101.1 FM. The Answer where little Rock comes to talk. So folks, let's talk about we're going to talk a little bit about inflation. We're going to talk about buying power. So why seniors need to protect their buying power.

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

Randy Sams:
We're going to compare the Cpi-u and the CPI okay. The CPI, you compare it to the CPI. So what is the Cpi-u. That is the consumer price index for all urban consumers. This measures inflation for the general population. The CPI is designed to track the general price changes for a basket of goods and services consumed by the typical urban population, regardless of age or income. The one I prefer that they would use would be the CPI Consumer Price Index for the elderly CPI. This focuses on senior expenses, so CPI is specifically tailored to measure inflation's impact on the spending pattern of Americans aged 62 years or older, considering the unique consumption habits of seniors. So folks, what is the earliest that you can turn on your Social Security? Mean, unless you're disabled or have some kind of medical condition, the earliest that you can turn on your Social Security is age 62. So all the increases that we're seeing go back and look what for 2023. Your cola, your cost of living adjustment was, what, 8.7? Your cost of living adjustment. Your Cola for 2024 is what, 3.2% now guys that's based on the CPI. You. So it doesn't make any difference what age your income. Again they they take a certain goods and services and that's what they base that on the inflation factor to me they should be basing your Cola your cost of living adjustments or I'll call them. Your cost of living increases from year to year should be based on the CPI Consumer Price index for the elderly, because folks, you are the ones that need that additional income.

Randy Sams:
You need that additional interest rate. You need that additional money. You know that inflation in 2022 was higher than 8.7%. If it would have been based on the CPI, it probably would have been in double digits. All right. It probably would be much higher going into 2024 increase if it was based on the CPI. All right. So here are some of the differences. Basket of goods. The CPI includes a broad range of goods and services consumed by all urban consumers. While the CPI narrows its focus to items that seniors typically spend more on, such as health care and housing weighted categories. The CPI assigns weights to categories based on general population consumption patterns, whereas CPI adjust the weighting of categories to better reflect senior spending habits, giving greater importance to health care and housing. Health care emphasis CPI places a greater emphasis on health care costs, which tend to rise disproportionately for seniors due to increased medical needs in retirement housing costs. Cpi also considers housing expenses more prominently, acknowledging that seniors may have different housing needs and cost burdens compared to younger demographics. Transportation and education. Some categories, such as transportation and education, may be less emphasized in the CPI because typically seniors spend less in these areas. So here's my summary. Inflation disproportionately affects seniors because the CPI recognizes that they have distinct consumption patterns and places more weight on areas like health care and housing, which tend to increase in cost as individuals age. The CPI, on the other hand, is a more generalized measure that may not accurately reflect the price changes experienced by seniors.

Randy Sams:
Understanding the impact of inflation on the financial well-being of retirees. So, folks, what is this? Show Your American Retirement. We focus on setting you up, educating you on the financial issues that you are going to experience in retirement. We want you educated. We want you prepared for a safe retirement, for a happy retirement, not a risky retirement. That's why I feel like all of these colas that we see from Social Security benefits, don't get me wrong, I'm glad we see an increase. But your increase on what it actually costs you to live today, going into 2024 is higher than the Cola that you're actually going to see on your Social Security check or your Social Security benefit. Okay, that's Randy Sam's opinion. So I feel like if they want to do it right and they want to do it fair, they should be using the CPI to consider or to calculate your cost of living adjustment or your cost of living increase going into 2024, because it's focused more on what you as seniors need versus what a whole population, no matter what ages they are used. All right. That's my opinion. So here's something to think about. And we're going to switch subjects on you very quickly here. All right. If you don't think having a personal pension is is important, look at what happens when you try taking it away from people and folks. These just occurred in 2023. Here are a number of recent examples from 2023 demonstrating employees demand for pensions and workplace benefits.

Randy Sams:
So folks, you just heard me earlier talk about setting up your own personal pension. Why is that important? Many, many, many years ago, folks would go to work and they would work at that job for 30 years, 40 years, 45 years, and then they would retire and they would have that retirement party, and everybody would get together, and they would give them that so-called golden watch. And you'd write off in the sunset, but you had a smile on your face, because why? You knew when you retired you had a pension, you had a defined benefit plan. You knew exactly what you were going to be able to retire on because your company provided you with a pension. And then Social Security came along and Social Security was just to kind of supplement, hopefully take, uh, you know, your pension is never designed to be 100% of what you're making currently, but let's say it's 60%. And then your Social Security kicks in and gives you another 20%, and that gets you to 80% of what you were actually making. But now you're in retirement. But the majority of folks today do not have a pension. So it's up to you that burden of your retirement funding is now on you as the employee. So we can take your IRAs and your 401 S, roll that over into an income annuity. And when you turn on that income stream for you and your spouse, you have basically set yourself up with your own personal pension.

Randy Sams:
But let's look at this. These are recent examples in 2023 demonstrating employees demand for pensions, those who may have the opportunity for their company to actually have a pension and workplace benefits. The Teamsters union is threatening a strike against trucking giant yellow after the company missed health care and pension payments. That was in Wall Street Journal in 2023. Auto workers used to have lifelong health care and pension income. They want it back. That's from in PR. That was again this year in 2023. Garbage piles up as French strike nationwide over pension change 2023. Las Vegas hospitality workers overwhelmingly permit union to call strike against hotels and casinos. Why? Because of the pension and workplace benefits. That's from the Associated Press. In 2023, an overwhelmingly overwhelming 99.47% of flight attendants represented by the labor union voted to authorize a strike. That was from Reuters 2023 again. Based on pensions and workplace benefits. And the last example, the Portland Association of Teachers Strike, would start November 1st unless an agreement with the school district is reached before then. And that comes you from ABC news 2023. So, folks. Those employees. Who are lucky enough to work at a company. That offer a pension. Majority of them might be union jobs. All right. They want it negotiated in that union contract that they still have a pension. Just gave you several examples of what happens when they try to take it away from folks. So is a pension important to people? Yes, it is very important. That's why we stress to you that if you work at a company that does not offer you a pension, when you plan on retiring, you need to give me a call (866) 990-7664 or go to the website Your American Retirement.com.

Randy Sams:
Leave me your contact information. Let's have a conversation. Let's have a sit down, a free, no obligation consultation. And let's look at what you have. And let's see if we can't take some of your 401 K or an IRA and put that into a guaranteed lifetime income and set yourself up and your spouse up for that guaranteed pension. Via the lifetime income annuity. All right. So. Hey. It's spooky out there. Here's something that you need to look at. The cost of candy is going up by a lot. Prices are up about 13% this year. So all your little goose, you know, goblins and ghosts out there. According to the US Bureau of Labor. Hey, it's going to cost you more money. A new Halloween spending trends report revealed 73% of Americans said their shopping for the holiday will be impacted by economic challenges. So folks, again, hope you all go out and have a safe Halloween if you celebrate that. But listen, I want to thank you for listening to Your American Retirement. If you've missed any part of today's show, go back in the podcast archives on Apple, Google, Spotify, or whichever platform you get your podcast. I want you to go out and have a great rest of your Saturday. Have a great week. God bless. Go hogs and we'll talk to you next weekend.

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 Your American Retirement.com today. That's Your American Retirement.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 married 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.

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