Examining Risk and How It Can Impact Your Retirement

1.5.24: Audio automatically transcribed by Sonix

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

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to 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.

Speaker3:
Hey, well, good morning, Central Arkansas. Hello. Hello again. I want to welcome you to your American retirement. First of all, happy New Year 2024. I want to thank you for allowing me some time. This is the first Saturday of 2024. I want to thank you again for joining me and giving me a little bit of your time. This Saturday morning we got a jam packed show to kick off the year with. Um. And hey, don't forget to check out our podcast. You know, we have a show on podcast form. It's on Apple, Google, Spotify or wherever you get your podcast from and also visit YouTube, our YouTube channel. You know, youtube.com. You've heard of them. You can search for your American retirement. And just like I say all the time, you will know you're hitting the right spot. When you see my smiling face looking back at you again. A little bit of difference. On our YouTube channel. We do not have the full program. All right. We take little snippets. My fantastic producer, Mr. Jim, will take segments of the show that, uh, that he feels like kind of give you a little bit of interest as to what the show was about, what it pertains to. Uh, so it may be a two minute, three minute, four minute snippet. And then from there you can go to our website, Your American retirement.com, and you can check out any previous show that we've had over the past two years.

Speaker3:
Okay. Uh, or you can go to your podcast, your favorite podcast provider, and look up your American retirement. And you can listen to the whole show on the podcast form. Okay. But again, I want to thank you for listening. Again. This is the first Saturday of 2024. We are excited going into this new year. We hope you are as excited about it as we are. Folks. You know what we do at Qmg financial slash your American retirement. All right. We want to educate. Our listeners, our clients about what's going to happen to you in retirement. Okay, this is not Debbie Downer. It's called education. That's what we do. We like to make you aware of what can happen and more than likely what will happen, such as inflation. I don't think it's going to go away, but we want to get you prepared and educated. So that way you're going to go into retirement looking for a happy retirement, a safe and secure retirement versus a risky retirement. Okay. So people ask me, so Randy at Psmg kind of what what do you do? What do you do? So folks, if you listen to the show in 2023 and you continue to listen in 2024, which I hope you will. Okay. We are going to talk about. Three different distinct phases in retirement.

Speaker3:
Okay. We want to prepare you for the three distinct phases in retirement, okay. We help baby boomers never run out of money. We want you to be able to enjoy your latter years. Meaning a happy retirement, because a lot of folks think that retirement is just 30 or 40 years of golf, tennis, travel, line dancing, going on cruises. That's not true. See, there's three phases of retirement. First phase is the go go years. Go go years is when you're going and doing everything that you want to do. You're going on cruises. You're playing pickleball. Every day is Saturday and every hour is happy hour. Okay. Then you fall into the slow go years, the slow go years, or you can still do everything you did in the go go years. You just don't want to. All right. So you don't go after five. You don't go out after 530 because you can't see as well in the dark as you used to. Some of y'all will understand that. And then you have the third phase, which is the no go years. The no go year is when you're probably not leaving the building. Until you're leaving the building, if you know what I mean. Okay, but go, go years. Let's just say your go go years are from 60 to 80. You you you pick that. Okay. Whenever your retirement age is could be 65 to 85, whatever, 65 to 80.

Speaker3:
But you see retirement. Is all about guaranteed income, not assets. We don't want you stressed out about running out of money. We want you to spend your time and your go go years enjoying your retirement, preparing yourself for a happy retirement. So. You know, there's no need to have a bunch of money when you're 105 years old. You want to have that money while you can enjoy it. Those are the go go years. Okay, so again, like I said, if you listen to the show, you're going to see that our show pertains to these three phases. We may not talk about them all on every show, but if you listen to it, you'll figure out that this show is pertaining to either the go go years, the slow go years, or the no go years. We want to prepare you for all of those. Okay? The slow go years again is basically about long term care. Folks. We're going to talk about long term care a little bit today. We want to get you prepared because what's your plan for long term care? Do you have a plan for long term care? Are you just going to let it sneak up on you? Like, sometimes I talk to people. Their retirement. Well, I didn't realize I was going to retire so quickly. Okay.

Speaker3:
Because if you don't have a plan, here's what's going to happen. Somewhere between the slow go years and the no go years, you're going to get wiped out. What I mean by that is if you have a long term care need, then what happens is this. You say, why am I going to get wiped out, Randy? Well, because the rules say you have to spend all your money until you become destitute and then go on welfare or Medicaid. So when that happens, you lose all control of your decisions. Folks, that's not my idea of a successful retirement. So if you don't have a long term care plan, that's what could possibly happen to you. Okay. And then the no go years, folks, is when I consider this to be all about life insurance. Why? Because, folks, you need to understand it's life insurance that you bring into retirement that allows you to spend your money. You see, one of the reasons I see why retirees are not enjoying their retirement is because they think they have to leave the kids some money. So they deny themselves in retirement to provide for their kids. Now, you all know whenever we work during our working years, whether it be 25 or 30 or 40 years, you're working, you have an idea of what you want to do in retirement. Remember, you want to go on cruises, you want to play pickleball, you want to play tennis, you want to golf, you want to travel.

Speaker3:
All right. But what happens is when we get into retirement, all those. Ideas and all those fantasies, so to say, of what you wanted to do and enjoy during retirement. People start kicking back, they start pulling back because they say, well, Randy, we want to be able to leave something to our children. That's why we use life insurance, folks. Okay? Life insurance, figure out what you need to leave for your children. I did it for myself. My wife and I did it for my kids. Okay, so we know that whenever we hit that retirement and we want to be able to spend the money that we've saved for retirement, I don't have to worry about it because I know my two boys and my grandchildren are taken care of because we have utilized a life insurance plan. Okay. So life insurance is a double whammy. Number one, it gives you the peace of mind knowing that when you pass away or your spouse passes away, depending on how you have it set up, then that life insurance, that death benefit is being paid to your children and a death benefit, a life insurance death benefit is tax free. Man. That's a that's fantastic. Okay, so if you know you've got the inheritance for your children taken care of, what can you and your spouse focus on? We can focus on going out and taking those cruises, traveling, playing pickleball, playing tennis, playing golf.

Speaker3:
Every hour is happy hour because you don't have to worry about spending all your money and not leaving an inheritance to your children because you've used life insurance. So I always tell my clients, use a life insurance policy to provide the inheritance for your kids, and you go out and enjoy your retirement years to the fullest, i.e. a happy retirement. So folks, that's what you're going to hear. When you tune in to your American retirement is we're going to be talking about one of those three phases. Maybe we'll talk about all three of them during the show. But some of the products and the ideas and the concepts that we utilize will fall into one of those three phases. Go. Go years. Slow go years and the no go years. Okay, so that's why I enjoy doing what I do every day and what I enjoy doing this show, because we want to educate you, and we want to prepare you for a safe and a secure retirement, not a risky retirement. So, folks, again, I want to thank you for joining me this first Saturday. Happy New Year. We're going to be right back. Thanks for joining us. Your American retirement on 101.1 FM. The answer.

Speaker2:
Thanks for listening to your American Retirement. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

The precious sweetheart. She's so faithful.

Speaker4:
She's so.

True. Oh, yeah. A Dream by Tomlin.

Speaker2:
Are you anxious about retirement? Concerned that you could outlive your money? Randy Samms is a little Rock native who has nearly four decades of experience helping hundreds of Arkansans retire with confidence. If you want to get the most out of what you've worked so hard for, or if you're interested in learning how to maximize your Social Security, call Randy today at (501) 249-2343. That's (501) 249-2343. Or visit your American retirement.com. Visit your American retirement.com to schedule a free consultation with Randy today. And now back to the show.

Speaker3:
Hey, welcome back to your American retirement on 101.1 FM. The answer where little Rock comes to talk again folks, don't forget to check out our YouTube page, visit youtube.com and search your American retirement and look for my smile and face. And you'll know you hit the right spot. Okay. Hey, Mr. Jim, I think it's time to start off 2024 with the first 2024 financial wisdom quote of the week. So cue up that financial wisdom. Quote of the week music, Mr.. Jim, and let's get this show started.

Speaker5:
And now for some financial wisdom, it's time for the quote of the week.

Speaker3:
All right. The quote of the week. Is given to us by Franklin D Roosevelt. I've heard of that name before. Have you? Franklin D Roosevelt quote of the week. The only limit to our realization of tomorrow is our doubts of today. Ooh, that's pretty deep. The only limit to our realization of tomorrow is our doubts of today. Uh, folks, you all know who FDR, Franklin D Roosevelt from from 1882 to 19 4445. He was the 32nd president of the United States, serving from 1933 until his death in 1945. He was renowned for his leadership during the Great Depression and World War Two. Fdr implemented the New Deal policies, transforming the role of federal government and supporting the economy and society. Okay, so I think if you look back, I believe social Security started the Social Security benefits, started under FDR. Do a little homework and find that out yourself. All right. Here's a little message, folks. And do you really know more than your doctor? How about your lawyer or your home contractor? So just as you trust the experts in these important situations, we at Smog Financial your American retirement, we believe nothing replaces a capable financial adviser slash retirement planner. So to start a new year, the start of a new year is a great time to reevaluate your retirement plans, whether retirement is still a few years away, or if you've already been retired for a number of years. So again, this show is going to be how to start 2024 on the right foot financially. Let's get 2024 rolling.

Speaker3:
All right. Let's talk about a. A little bit what retirees fear the most. Pretty easy question. When I talk to people, one of the things that they always say. One of the first questions I see what's your number one objective? And they say not to run out of money. Very good. Okay. So some of the things that we have to talk about folks are risk. So when we talk about retirees fears we have to look at the risk. These are risks that will or could occur during your retirement as we get older. Again the number one risk in retirement is longevity risk. And that is the risk of you living too long. Okay. You said, well, Randy, why is that a risk? Well, because a lot of folks are concerned they're going to run out of money. That's what we just said. They don't think they've got the right plan in place, and they think that their retirement account will hit zero before their blood pressure does. And that's not the right plan. That's why we put a plan together to make sure that you. Who cannot outlive your retirement plan. Okay. It's called guaranteed income. Again, you heard me say it. If you've listened to the show before, if you've continued to listen to us during 2024, you'll hear me say it over and over. You do not retire on assets. You retire on income. Assets can be lost. Market crash. Divorces. Medical expenses. Assets can be lost. Guaranteed income cannot. That's why we preach, and we believe in guaranteed income.

Speaker3:
Another risk I want to talk about is sequence of returns. Sequence of returns is when we talk about if you have heard me say this, I call it the retirement red zone. That's the five years before you retire and five years into retirement, though that ten year period is what I consider the most important. Because if you are about to retire, let's say the five years before your retirement and you've got a concept, you've got an idea, you've been accumulating a 401 K or an IRA or whatever your retirement plan might be. And all of a sudden the money starts going down. Stock market crashes and what you thought you were going to retire on is a lot less. Okay. Five years into retirement, if you're taking money out to begin with, at the same time that the market is going down or your account value is going down, that's that's not a good that's a double whammy. Okay. So sequence of returns is a risk. We have to talk about inflation. We all know that risk long term care risk 72% of the people that are listening to this show right now that are age 65 are going to incur some type of a long term care need, okay, 72%. You all have homeowner's insurance. You all have automobile insurance. I would say the majority of you have health insurance, either Medicare, Medicare Advantage or Medicare Sub or a group health plan if you're still working. But how many of you have a long term care plan in place? Okay, so that's what we want to be able to do for you can call me (866) 990-7664 and just leave me a message.

Speaker3:
Leave me your contact information. Say, hey, Randy, I'd like to have a conversation with you, and let's discuss some of the risks that I'm concerned about before I get into retirement, okay? Or I'm in retirement. And these are some of the concerns that I have. So let's talk about what retirees fear the most. We've talked about some of the risks. Number one, Social Security cutbacks okay. These are all going to add up to running out of money okay. If you haven't planned well. So in 1940, did you know that in 1940 there were 40 workers per retiree? Nobody was concerned about running out of money, folks, because for every retiree that started drawing from Social Security, you had 40 people paying into it. Today, there are only three workers per retiree. Do you see that drop? Okay, so that's over an 80 year period, 84 years now okay. So instead of having 40 workers for every one retiree, now we have three. And that ratio is expected to become two workers for every one retiree by the year 2050. So you can see why the social security system the fund is in dire straits. That's why it's a lot of it's a concern to many people. It should be a big concern to the folks up in Washington, D.C., you know, the ones that we elect and go up there, we think they have our best interest, but sometimes they don't.

Speaker3:
Do they? Okay. I know how to fix Social Security. Put those folks, men and women that are in Washington, D.C., put them on the same Social Security plan that we have versus their, you know, their golden parachute that they have for themselves. They don't have to worry about Social Security if they've been up there for a certain number of years. We do. We can change that. Okay. Number two tax increases. Historically, tax tax rates have been lower than they used to be. There are. They are lower than they used to be, but increasing national debt and government spending. Many people believe that taxes will go up in order to meet the nation's budget requirement. Folks, our deficit is going up, up, up up, up. How many is it? It's over 30 trillion. Okay. 32 trillion. That's what they let us see. It's probably way. It's probably double that if not more. It's 34 trillion right now is what they're publishing. But if you add everything together I've heard it's more like 60 to 70 million okay. Could be higher than that. Number three inflation. But let me jump back to taxes. Do you think taxes are going to stay level. Do you think taxes are going to decrease or do you think they're going to increase? I think they have to increase for us to be able to survive. Okay. Unless we're going to do some major cuts, they're going to have to cut back some of the benefits. They're going to have to cut back spending all the money overseas and start focusing on some of us here in the United States.

Speaker3:
But I digress. All right. Number three, inflation cost of living adjustments reflect 14.6% inflation over the last two years. And some experts believe true inflation has been much higher. So folks, you know I get I get people that they get excited because like last year in 2023 I believe you got like an 8.7% Cola increase. That was an increase in your Social Security benefit. Everybody was happy. But you got to realize, folks, they just don't give you that. Out of the goodness of their heart. The Cola increase that we get on an annual basis. If there is one, is based on what they see as the inflation factor for the previous year. So in 2022, inflation was way above 8.7%. Okay. It was in the double digits. That's why you saw the 8.7% Cola increase this year for 2024. I believe the Cola increase is like 3.2%. Okay. So they're trying to tell us that inflation was around what, three 4 or 5% last year. I believe it was a lot higher than that okay. So we have to take inflation into consideration. Are we prepared for going into retirement. So folks we've got a couple of more that of the retirees fear most items that we want to discuss with you. So please stay tuned. Listen to a few of these messages and come right back as you're listening to your American Retirement on 101.1 FM. The answer?

Speaker2:
You're listening to your American Retirement. To schedule your free, no obligation consultation, visit your American retirement.com.

Top. Like a silver flame.

Speaker2:
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.

Speaker1:
How much risk are you willing to take with your investments? I'm Matt McClure with the Retirement Radio Network, powered by Amara Life. Who. If you're a thrill seeker, you probably enjoy the adrenaline rush of jumping out of a plane, bungee jumping off a high cliff, or kayaking down a raging river. But when it comes to your finances, do you still find a lot of risk exciting? Or does the danger of losing your hard earned money change your perspective? Think back for a moment to the 2008 financial crisis. Thanks to market risk and some shady Wall Street deals, the S&P 500 fell more than 46% between October 2007 and March 2009.

Speaker6:
If you go back and look at the risk that we took 25, 30 years ago, and it was kind of way out there, and a lot of these firms, including some of the things that happened at Morgan Stanley, we were so mesmerized by the great traitor and the money they made that they got more and more autonomy until it was too late. We had huge losses.

Speaker1:
That's former Morgan Stanley CEO John Mack speaking with Yahoo News. So how do you protect yourself if we have another year like that or even another 2022, when the markets had their worst performance since 2008? Financial advisors will tell you that to maximize your investment growth, you need to take some risk with your money. Just be smart about it.

Speaker7:
You want to have an actively managed portfolio strategy. You just do. It involves shifting investments in your portfolio to take advantage of pricing anomalies and strong market sectors. You want to reduce the risk. You want to have smart risk as part of your portfolio. You want to increase returns and you want to truly diversify your portfolio.

Speaker1:
Active Wealth Management founder and President Ford Stokes says smart risk investing is based on the concept that all investments carry some amount of risk, and that the only way to reduce that risk is to diversify. This means investing in a variety of different asset classes such as stocks, bonds, real estate, commodities and other financial instruments. Everyone's situation is different, and that's why it's important to work with a fiduciary financial advisor to get the most out of your hard earned and hard saved money. So how much risk are you willing to take with your retirement? That's a key question to consider as you invest for the future. With the Retirement Radio Network powered by Amira Life. I'm Matt McClure.

Speaker2:
Are you interested in ways to protect and grow your hard earned money? Your American retirement is here to help. Here's Randy Sams.

Speaker3:
Hey, thanks for joining us on this week's edition of Your American Retirement. Please be sure to check out the podcast version of our show on Apple, Google, Spotify, or wherever you get your podcast. So, folks, again, thank you for joining us. So let's pick up where we left off. We are talking about what retirees fear the most. Folks, we want to get you prepared for 2024 okay, let's make 2024 a happy year a safe and secure year. So number one, we talked about Social Security cutbacks. Number two we talked about tax increases. Number three, we talked about inflation. And number four we're going to talk about portfolio balances going down too quickly. Again folks retirees fear the most is running out of money. It all adds up to longevity risk okay. And these are some of the factors that play into folks being concerned about running out of money. And number four, again, portfolio balances going down too quickly. And here's how that happens. It's called sequence of returns risk. Remember we talked about it just a little while ago. That retirement red zone the five years before you hit retirement or that retirement age that you've picked out and the five years into retirement. So that ten year period, five years before, five years into it is what we refer to as the retirement red zone. So sequence of returns risk can be devastating to people in the retirement red zone because preservation of assets is key in order to fund a long retirement.

Speaker3:
So folks here's how sequence of returns risk can affect you okay. Why it's a risk because. While you're working, you're in the accumulation mode, okay? You're adding money to your 401 K or your 403 B, or your IRA or whatever plan that you've created or your employer has for you for your retirement. Okay, because the majority of you guys that are listening do not have a pension. Employers have moved away from providing pensions. So before people would work for 30, 40 years, they'd have that retirement party, get that gold watch, and then they'd go off into retirement. And they were happy because their employer had a pension plan. Okay. That was called a defined benefit. You knew exactly what you were going to retire on. Then they added a little bit of Social Security into that. Now, the majority, about 90% of employers no longer provide a pension. It's now called a defined contribution, which means it's now up to you as the employee to provide for your retirement fund. Okay. But sequence of returns risk happens when you retire. Five years before, you don't want to see that amount go down. You don't want to see your 401 K balance go down, because that puts you in a situation where I'm either going to have to work longer, or I'm going to retire on less money.

Speaker3:
But when you retire. And you're no longer adding to your retirement fund. Now you're in the decumulation phase. That means I'm taking money out. So what happens is. If the market goes down and you're taking money out at the same time, that's when we see people that did poor planning or that didn't work with the right planner. They don't have them on guaranteed income. They've got them on the 4% rule or whatever rule they might want to use. Because folks, as an example, if you've got a retirement balance of $200,000, let's just use $200,000. It's in your 401 K, it's in your IRA, or it's in a managed account with someone that's charging you a fee, whether that account goes up or goes down. But let's use 200,000 as the mark and your account balance goes down by 20%. You said, well, that's a big drop. Well, did you know in 2022 the stock market fell almost 23%. So I'm just using 20%. So let's say your balance goes down by 20% because the market is going down 20%. So your 200,000 has just lost $40,000. Now your account balance is $160,000. So what happens? How much of an increase do you have to have just to get back even to 200,000? Some people say, well, Randy, I lost 20%. So it's got to go up 20%. No, because remember your balance is 160,000. 20% of 160,000 is 32,000.

Speaker3:
That would get you back up to 192,000. You're still $8,000 short. So in order to get from 160,000 up to 200,000 where you started out at. You're going to have to have about a 2,324% increase in the market. It's going to have to go up by that much. Okay. But now let's look at a 20% decrease in your account value and you're taking out money on top of that. So you see why sequence of returns is so important. Because that 24% increase to get you back to 200,000 is now going to be probably closer to 30% increase because you've been taking money out at the same time the market's going down. So how do we eliminate sequence of returns. Risk is we take money away from the risky investments and put it into a safe investment, safe money called a guaranteed lifetime income annuity. Okay. So we'll talk about that a little bit earlier. And we just talked about a little bit. Number five is market crashes. So you may want to consider reducing the risk you are taking with your current portfolio. Because did you know that from 2000 to 2002, the market that's the S&P 500 saw three straight years of declines. We lost 9.1% in 2000, 11.9% in 2001, 22.1% in 2002. All right. In 2008, the market fell 37%. Guys, what would that do to your retirement plan if you lost 37% of your 401 K or IRA or your managed account, what would that do to your retirement account, especially if you're taking money out? In 2018, we lost 4.1% and in 2022 we lost 16.9%.

Speaker3:
That was a year to date when this was taken out okay. Overall, in 2022, the market was down about 22%. Okay, so market crashes or something if you live too long or if you live a long time, you're probably going to see a market crash. And a lot of people might think that 2022 was a market crash, especially if you're retired and you lost 2,223% of your retirement fund. Okay, health care expenses, Medicare, medicine, med advantage, prescription drug plans. So because between prescriptions, common procedures, potential long term care expenses, a couple in 2020 2nd May need to spend upwards of $315,000 on health care during their retirement. Did you hear that? A couple retiring in 2022. So a little over a year ago. If you retired in 2022, you may need to spend during your retirement upwards of $315,000. Now that's not a couple that's per person okay. So we have to look at health care expenses. It's one of the things that we have to address in a retirement plan. Number seven having to care for a loved one. Retirees who care for a dependent parent or child will have to deal with additional monthly expenses to look after family members. So folks, long term care.

Speaker3:
Let's talk just a little bit about long term care. So. A lot of people do not understand long term care. They don't have an understanding of long term care. Now, if you've had someone in your family that you've had to deal with, you've had to take care of, or they've been put into a nursing home or a long term care facility, then you have a better understanding. But the majority. Of folks, 43% aren't sure what age to start planning for long term care. Okay, 55% of people can't estimate how much annual long term care costs could be. So. 85% people of the people out there as far as concerns for safety, as far as long term care. 85% thinks it's important. It's more important than ever to have a plan for long term care. Over 6 in 10 people agreed they would rather never go to a nursing home and instead pass away first. Okay, so folks, long term care is something that you need to discuss. It's it's something that is going to happen. Like I said, statistics show. Again. I'll repeat this. I've already said it earlier in the show. 72% of those of you that are listening today, well, 72%. Even the people that aren't listening. If you're 65 years of age right now, 72% of you. Will have some type of a long term care need. Okay, but then I come and ask when I do my educational seminars, how many of you have a long term care plan? Maybe 1 or 2 people in the in the audience will raise their hand so that just it it it fortifies it.

Speaker3:
It exemplifies the fact that there is a need for people to actually start asking questions about long term care. And there's a need for you to have a long term care plan in place before you hit your retirement years. Okay, so listen to this. What does a nursing home cost here in the state of Arkansas? So if you're considering nursing home care for someone you love. If you're struggling with the difficult decision and you live in the state of Arkansas, which I live in Benton, Arkansas, the majority of you that are listening to me today are in Arkansas. Alright, you can plan on spending about $146 per day. Now, folks, this was this information was taken. From last year 2023. Actually, it was taken in March of 2023, so this might be a little outdated. Just add some inflation factor to this. But based in 20 based on 2023 numbers, plan on spending about $146 per day. That's the average cost for the state of Arkansas for a semi semi-private room, according to a survey published by MetLife Mature Market Institute. So the projected yearly cost of $53,290 is based on an estimate of $365. Now listen to this. That's for a semi-private room.

Speaker3:
A private room has an average cost of $162 per day, or $59,130 a year. Okay. So Ian, let's just take just as an example. In the little Rock, majority of you are going to be here in Central Arkansas Conway, Benton, Bryant, little Rock, Cabot, Hot Springs. But if we look at little Rock, the daily cost for a semi-private room in little Rock is $161. Again, that was in 2023 for a private room, the daily cost is $179. So again, the average. For the state. It's $146 per day for a semi-private room and $162 per day for a private room. So, folks, you're looking at anywhere from a minimum of 53,000 up to almost $60,000 a year for a nursing home here in the state of Arkansas. So I got to ask this question before we go any further. Are you prepared? Are you ready? What type of Long-Term care plan do you have in place today? If you don't have a long term care plan and you'd like to discuss it, please go to the website Your American retirement.com or give me a call (866) 990-7664. Leave me your contact information and I will get in contact with you. So folks, listen. We're going to come back, but please come right back because we're going to talk about New Year resolutions for a financial check list. All right. Financial New Year's resolutions will be right back.

Speaker2:
Missed part of today's show. Your American retirement is available wherever you listen to podcasts and online at your American retirement.com. 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 10 a.m. right here on 101.1 FM. The answer protect your retirement and schedule a free, no obligation consultation now at your American retirement.com. Like what you're hearing? You can watch the show to visit youtube.com and search your American Retirement to watch clips from this program.

Speaker3:
All right. You're listening to your American Retirement. Please join us every Saturday during 2024 at one oh at 10:00 Am, right here on 101.1. The answer where little Rock comes to talk. So folks, thank you for again joining us. I appreciate the time that you've given me this first Saturday of 2024. So we're going to talk about in this last segment, we're going to talk about New Year's resolutions that we can help you keep. Okay. New Year's resolutions that we can help you keep. We want you to be financially sound okay going into 2024. And we're going to talk about a little bit about some of the things that we can help you with. And we want you to be prepared and that we can help you out with. Alright. So New Year's Resolutions, guys, it was kind of funny the other day or I guess it was yesterday I was out. And I was driving around, and, uh, there's a couple of gyms in the city of Benton. Uh, one of them's down by the post office. And, man, those parking lots at those gyms were packed because you know as well as I do. That everybody has that New Year's resolution that I'm going to lose weight or I'm going to start working out or I'm going to whatever it happens to be as far as your health is concerned. And those are great resolutions, but you know what happens. So that was yesterday.

Speaker3:
In about a two weeks, three weeks, four weeks, let's say next month in February, if I go by those same gymnasiums, if I go by those same athletic places where you can lift weights and ride bicycles and do the. Jog in place. Deal. Okay. The treadmills. Those are great places, but I guarantee you. Yeah. Elliptical. Mr. gym, give me a little hint there, Randy. It's called an elliptical or the treadmill. Either one, whichever one you choose to use. But I guarantee you that come February, those parking lots are not going to be as full as they were when I drove by yesterday in January. Okay, so folks, we want to give you some things to think about, some resolutions that we can help you keep. That's the key to help you keep in 2024 okay. Calculate your net worth. Number one, any changes that you need to make become more obvious after doing this calculation. Start by totaling your assets. Those are your account balances, real estate anything of value and then subtract your liabilities. Mortgages, debts, anything that you owe to create a clear picture of your net worth. Now folks. As a benefit with working with us small financial your American retirement while we are able to do I have a a form. It's a financial form that I give to my clients that it takes a little bit of time, but not, you know, an hour or two hours.

Speaker3:
It just gives us an idea of what you have, and it helps you actually understand what you have, what your 401 K balances are, what your checking account balances are, what your saving account balances are. If you have any CDs, any IRAs, any managed accounts, what your real estate value is, you have a house, you own a house. What's it worth today? What was it worth when you bought it? What's it worth today? What's it going to be worth next year? Okay. And then you have to look at those are your assets. Then you have to look at your liability. So if you have a house, do you still have a mortgage or is it mortgage free? Your automobiles. So we have to add all that together. And so what we do. Is after the clients have completed that financial information form, we put together an asset report. It's a one page report. It's fantastic to have. Okay. It lets you and me know exactly what we're working with. And that's something that we need to update on a continual basis. So on an annual basis, when we do our reviews with our clients, if there are any changes, you've paid off the mortgage now, then your asset value just went up because you got rid of one of those liabilities. You bought a car. Now you have a liability that we have to add to it because you have car payments.

Speaker3:
If you didn't pay cash for that car, okay. But we can put together an basically what your net worth is, an asset page, an asset report that you and I can look at. And with that, it shows us what we have to work with and how we can get you prepared for retirement. So number one, New Year's resolution that we can help you keep calculate your net worth. Number two, check up on your retirement accounts. Be sure to take advantage of any contribution matches offered within your employer's retirement plan. So I always tell people they ask me, should I contribute to a 401 K? And I always ask them one question does your employer have a matching contribution? And if they say yes, which is the majority of the time, then I would say, why would you leave free money sitting on the table? Because if your employer will match up to 3%, why aren't you doing at least 3%? Because if I'm doing 3% and my employer will match up to 3% of my income, then that's a total of 6%. Or if they'll match three and I do seven, then that gives me to 10% of my income that I'm putting back into my retirement plan through my employer. If you're 50 years or older. You can begin to contribute an additional 7000 per year, or $583 per month to an IRA. If you're self-employed, get in touch with us and we can help you set up and contribute.

Speaker3:
To a Sep. Ira. Okay, now we don't do anything that. Remember at SMG financial, I don't do anything that's actually tied to the stock market. But we have people that we can get you in contact with that you can work with to help set up a set a Sep IRA for your self employed people. Alright. So number two, check up on your retirement accounts. Number three, let's update your savings goals. Determine how much you plan to set aside each month for your future. Warren Buffett says don't save what is left after spending, but spend what is left after saving. All right, so folks, some people need to kind of recalculate. If you're younger and you're listening to the show, you need to pay attention to and upgrade and update your savings. Guides your goals. Okay. Make a plan to pay off your debts. Decide how much you want to pay towards any loans debts, mortgage accounts. Consider paying some extra principal towards your mortgage mortgage payment each month. So by doing so, paying that extra each month, you'll earn risk free return on that money equal to your mortgage interest rate, and cut down on the number of years that it will take you to pay off your mortgage. Rebalance your portfolio. This is where the rule of 100 comes into play, folks. Risk versus safe. The rule of 100 means that if you're 65 years of age, take 65 from 100.

Speaker3:
That leaves 35. You should not have more than 35% of your retirement portfolio invested in risky investments. Equities, okay, 65% should be in safe money investments. So rebalance your portfolio. So you got to really realize that you need to look at this every year. We need to update that for you. Okay. Number six, pay down your credit cards. I'm not against credit cards. If you use them correctly, make it a goal to pay off your balance each month. And also. A credit card should not be used as an emergency fund. Be sure to have 3 to 6 months of expenses set aside for unforeseen emergencies. And number seven, review your credit reports. Folks. This is something that I tell people you should do every year. Make sure your credit report is accurate. And then number eight. Review your life insurance needs as you move through your career. Your life insurance and disability insurance. Long term care needs will continue to change. Give some thought as to how much protection you need, and consider investing in an IUL or some type of life insurance plan while you're still in your 40s and 50s. These types of policies are one of the only ways to generate truly tax free retirement income. And if you remember what I spoke about before, I like to use life insurance plan a life insurance plan to take care of the inheritance for your children.

Speaker3:
All right. So folks, please get in contact with me. (866) 990-7664 is the toll free number. Or you can go to the website your American retirement.com. Leave us your contact information. So Randy, I'd love to talk to you about these New Year's resolutions that you can help us with. I'll be glad to get in contact with you. Consultations are free. Take advantage of my 38 years experience in this industry, folks. The bottom line is, please get in contact with us so we can help you build and navigate your financial plan for 2024. When it comes to something as important as your money, we want to provide you and your spouse with a one on one opportunity to ask us any questions about your specific situation. What are your concerns? What are your goals? Give your money the attention it deserves and needs in order to grow your future. So folks, I want to thank you again for joining me on the show. You've been listening to your American retirement. If you've missed any part of the day show, you can go back to the podcast archives on Apple, Google, Spotify, whichever platform you get your podcasts from. Or you can go to the website, Your American Retirement and listen to any previous programmes. Again, thank you for joining me on this first Saturday of 2024. Have a great week. Make it a great rest of this Saturday. God bless. Go hogs!

Speaker1:
Thanks for listening to your American retirement. You deserve to work with experienced, licensed financial insurance professionals 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 specific result. All copyrights and trademarks are the property of their respective owners. A mirror 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 the results obtained from the use of this information. 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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