How Strong is Your Retirement Plan?

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7.21.23: 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. Hope you're doing well this Saturday morning. Want to welcome you to today's show. You are joining Randy Sams on 101.1 FM. The Answer where Little Rock comes to talk. This is Your American Retirement. Thank you for joining us. We want to always give a shout out. To our listeners. Hey, listeners in Benton, listeners in Bryant, all of those you listening in Little Rock, Conway, Cabot, Beebe. Hey, could go on and on. We've gotten some really great feedback. From folks who have enjoyed the show over the past year. We're into our second year now, folks, So thank you so much for all the said positive feedback, for all the great comments and great ideas for upcoming shows. I mean, we love it when our listeners, you know, either give me a phone call or go to the website and give us your information, Give us some you know, give us some ideas as far as what are your concerns in retirement, Some of you are just getting close to retirement. You can see the light in the at the end of the proverbial retirement tunnel. Right. You can see it. It's that close. But you still got concerns, you know, am I going to do I have enough money to retire on? Am I going to have to go back to work? Whatever concerns you, whatever. Put you into any kind of a stress mode thinking about retirement. That's what we want to address. That's what we hope to get ideas from folks, and that's what we do at SMMG Financial folks. I've been in the business personally for 37 years. I'd like to tell you, I started when I was a teenager, but that wouldn't be true. But hey, I've had several positions.

Randy Sams:
Um.

Randy Sams:
High executive. I guess you say corporate level positions with one of the largest insurance companies, I guess, in the in the world. I led their senior division for 18 years, was involved in distribution, product, you know, design. So that's where I got into if I say the word senior, that's where I got more focused on the senior market type products, and that's why I love annuities. Of course we do all kinds of stuff. So don't, don't, don't just put me in the annuity box. But that's mainly what we do. But hey, again. SMMG Financial. We are focused on addressing the major financial concerns, major issues facing. Retirees and pre-retirees in America today. By helping people understand and prepare for a secure retirement, not a risky retirement. So, folks, when people ask me what I do, that's just the Answer that I give them. Okay, I help you save money and we help you make money safely. We don't want you to lose money. And that's what we're all about. So again, shout out to all of you who are listening this Saturday morning. We want to thank you for joining the show. As you know, always you can get a free consultation with myself and one of my advisors if you so choose. There's no obligation whatsoever. All you have to do is give us a call. (866) 990-7664. Or go to the website Your American Retirement. Leave us your information. Say, Hey, Randy, heard you on the radio. I like your concepts as far as retirement, safe money, not losing money. I'd love to sit down with you again.

Randy Sams:
There's no obligation whatsoever. Hey, we don't want you to do business with us unless, number one, we earn your trust and we earn your confidence that we are going to put together a great safe, secure retirement plan for you. All right. Hey, podcast. Those of you who listen to a podcast, you can listen to YourAmericanRetirement.com on your favorite podcast provider, YouTube channel. Yeah, that's right. We have a YouTube channel again YourAmericanRetirement.com. So all you have to do is look look for us on YouTube folks we don't have the whole entire show. We choose what we feel like are the most significant or some important tidbits of the entire show. Put them on YouTube and then hopefully that will generate enough interest for those who go to and watch the YouTube channel to go to either podcast or go to the website. YourAmericanRetirement.com where you can listen to any one of the shows that we have had over the past year and a half. All right. All you have to do again is go to your favorite podcast or go to YouTube and look for Your American Retirement and you'll see my smiling face. So again, don't hesitate to call us with your financial questions because we love helping our listeners. So today we have a free, informative report called Bond Replacement on Bond Replacement folks to all our listeners. So if you'll get in contact with us, just reach out and touch base with us. You'll learn how we can delete. These. We don't like the word fees on 50% or more of your portfolio today.

Randy Sams:
It's part of the free, efficient and market efficient strategy to help our listeners and clients with their money. Remember, folks, it's not my money. It's your money. Always will be your money. So give us a call. Go to the website. We'd love to get that free report. Informal informational report, Bond replacement. So folks, again. What do we do? Very quickly, we at SMMG Financial, we prepare our clients, retirees and pre-retirees for the three phases of retirement could go into this in more detail and probably will in a future show. But the three phases and three phases of retirement. Number one is the go go years. That's when you just retire. Every day is Saturday. Every hour is happy hour. You want to go places, see, see friends, travel, see the world, play pickleball, play golf, play tennis, whatever You have to do, whatever you want to do, whatever your desires have been, whatever your vision is for retirement have been. That's the first phase. The go go years. Second phase, the slow go years. That's where you still are physically able to do all the things you did in the go go years. You just don't want to. Okay. Maybe, you know, Dad can't see as well at night or Mom can't see as well as night when she used to. When they used to. As far as driving. Anyway, that's the slow go years. You still have the ability to do all the things you did in the go go years.

Randy Sams:
You just don't want to do them as often. And then the last phase is the no go years. That's where you sit in the front porch with your iced tea or whatever your favorite adult beverage might be. And in the rocking chair, you know, you don't get to go very many places in a rocking chair. You do a lot of back and forth movement, but you don't get a lot of you don't get to go a lot of places. So again, the no go years are usually when you don't leave the building. Until you leave the building, if you know what what I mean. So that's what we do at SMMG financials. We want to prepare you for a safe and a secure retirement, get you prepared for the three phases of retirement. Go, go years slow, go years and the no go years. Hey, let's take a look at today's show. What are we going to talk about? Good question. We're going to start with the quote of the week. We're going to do a little market update, give you some updates, some sharing, some good news with our listeners. And then we've got an interesting story. About a whale that was found in a couch. And then we're going to talk about how much how strong is your income play and talk about the 4% rule. And we've got a couple of other things we're going to talk about, talk about. But let's get started. How about some of that music, please, Mr. Producer? Mr. Jim for the financial wisdom quote of the Week.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Randy Sams:
Financial quote of the week again is brought to you by SMMG Financial. That's us. But here it goes. The more I learn, the more I realize. I don't know who said that. Albert Einstein. I don't think anybody here, any of my listeners need to for me to give you an explanation of who Albert Einstein was. But he lived from 1879 to 1955. Matter of fact, in one of the what we're going to talk about today is we're going to I've got some information on famous people who use utilized annuities in their life. And I believe Albert Einstein is in there. But again, our financial quote for the week. Financial wisdom quote for the week. The more I learn, the more I realize I don't know. That's great. Thank you so much for that. A lot of people like that. That's why you go to school, right? When you go to school, you learn you weren't as smart as you thought you were. All right. How about some good news, folks? Let's get this day started with some good news. Wages are finally rising faster than prices. Is that good news? Yes, it is. Thank you very much. Americans growing paychecks surpassed inflation for the first time in two years, providing some financial relief to workers while complicating the Federal Reserve's efforts.

Randy Sams:
The tame.

Randy Sams:
Price increases. That's good. Anything we can do to complicate it, make it more complicated for the Federal Reserve. I'm all for it. So if the trend continues, it bodes well for the US economy to avoid a deeper recession. Thank you. Inflation is slowing down due to a recovering supply chain, so folks, in the early days of the pandemic, Americans stuck at home ordering lots of TVs, computers, furniture and other goods. Meanwhile, many truck drivers, along with port and warehouse workers, left the workforce for Covid relief related reasons. That led to a severe product shortage. Okay. And price spikes as shipping containers stacked up at the West Coast, West Coast ports. Don't know if you all saw the photos, but during that time, man, you saw the ports where all the products, goods and goods came in on the shipping containers still sitting there. So hopefully the supply chain is is being stocked up. That's why you're seeing some of the changes. Stocks are riding a positive way through first half of 2023. Following a significant dip in major stock market indices in 2022. Most have rebounded well through the first half of 2023, So the S&P 500 is up 16.4%. The Dow is up 3.84. Good news. Come right back. We're going to talk about that folder that was found in someone's couch concerning their estate. You're listening to Your American Retirement 101.1 FM. 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, everybody. Again, I want to thank you for joining me today. My name is Randy Sams. You're listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. Hope you're having a great day. Again, thank you for joining us. We love all our listeners. Please continue to give us those good comments, good suggestions. Leave them on our. Toll free number or go to the website and leave us now. Listen to this. I find this very interesting. We'll found in Aretha Franklin's couch receives respect. R-e-s-p-e-c-t and think that's a song that she sang. Yeah, that's right. From the jury. All right. So that's that's the only singing I'm going to do on today's show, folks. And I hope y'all didn't turn me off just because of that. But the will found in Aretha Franklin's couch receives respect from the jury. Listen to this. A handwritten will in a spiral notebook found wedged between cushions in a couch. Months after Aretha Franklin's 2018 death is valid, a jury in Pontiac, Michigan, has decided. The July 11th, 2023, verdict ended a years long legal dispute among three of Aretha's four sons over which of the three informal wills filed in her home should take precedence over the others. So as a result, the four page document drafted in 2014 will now guide how the singer's multi-million dollar estate and royalties will be distributed among her heirs. Now, folks. That raises a question. How many of you listening to today's program have a will? Okay, I get this all the time.

Randy Sams:
This is one of the things that we do when you give us a call and we sit down with our clients or potential clients and we try to set up and we work with you listening to what your objectives are, one of the things we're going to talk about, what are the questions we're going to ask you is do you have a will, a formal will? Okay. Have you worked with an attorney to set up a will? So let's spend a little bit of time in this segment and let's talk about the importance of having a will and some of the maybe three reasons to to think about. All right. Let me give you some food for thought. So this is concerning. Again, Aretha Franklin's, that little notebook that was found in the cushions of her couch. So. The long, expensive court fight over the will of soul. Singer Aretha Franklin provides a cautionary tale for people who want to make sure their wishes are carried out after their death and for their families. All right. Legal experts say the fight over Aretha Franklin's estate with her between her four sons. Could have been avoided if Ms.. Franklin had a formal will drafted by an experienced attorney who could have ensured that it specified what should become of her money, property and other possessions, and that it would hold up in court. So see that legal will would hold up in court. And they say that lesson applies to other families, too.

Randy Sams:
Here's a look at some of the issues involved. Number one, do I need a will? Not necessarily. A lot of people have passed away without wills, but we're going to cover that in just a little bit. So estate lawyers strongly recommend wills for most people to ensure that their wishes are carried out and to avoid causing. Listen to this. Kids fighting after mom and dad pass is the oldest thing in the world. You know, you've had it. You may have had it in your family. Someone passes away, they may have a lot of money. They may not have very much money at all. But what are the kids fighting about? Who gets what piece of furniture, who gets what ring, who gets what, Watch? Who gets the golf clubs? Who gets this? Okay, folks, families can become enemies when it comes to a death of a of a family, family member, a mom or a dad. And there's no will directing how or what their wishes were as far as how to distribute the estate. So it makes it difficult. So. The last thing that mom and dad ever want is to basically know or to even suspect that their kids are fighting over their estate. So what's the take away? Prepare your estate plan so the kids won't fight after you pass away. So estate attorneys often recommend their clients establish a revocable trust. Which can keep the estate out of probate. That can make the process much less expensive.

Randy Sams:
But the laws vary from state to state. So, folks. I believe you should have a will. Okay. I believe in setting up a trust just like this Point says a revocable trust. That means that you can go in and you can change it. If you want to. Irrevocable trust basically means exactly what it sounds like. Irrevocable. Once you put anything into an irrevocable trust, whether it be property, houses, whatever it might be, that means that it is no longer under your control. You don't. You can't change it. Revocable trust means you can change it, but at least your wishes are going to be in that trust. And that way, if one of the kids act some way that you don't like them too or want them to, you have a revocable trust. You can take their name out, put it back in, take their name out. Anyway, you've heard that before. Number two point. Can I do it myself? Yes, you can. But Ms.. Franklin put her family through five years of expensive litigation that could have been avoided. So Franklin was working with an attorney. Listen to this now. She was working with an attorney about a formal will from 2016 to 2018, but nothing was finalized at the time of her death. Okay. So there were a lot of open questions. And never were able to resolve those open questions that the lawyer, Henry Grex, testified during the long running litigation. So she was quite ill and perhaps unable really to reach vital intentions.

Randy Sams:
So, folks. Now, I don't know exactly what the number is, but I know a couple of weeks ago. When this was actually was when this was actually the jury actually made their decision. I believe I saw an article. I wish I would have printed it off. Exactly. What? When Miss Aretha Franklin passed away, what her estate was valued at, and because of the litigations over the years, from her passing away to what was just finalized here this year in Guess it was in July. Uh, the actual cost to her estate, the the value of her estate dropped by tens of millions of dollars because of the litigations that have been taking place between the family members, between the four sons. Okay. So do it yourself. Software such as Quicken Willmaker can cost as little as $99, but those programs can't customize a will to a family's unique circumstances and foresee all the potential pitfalls the way a good attorney could. So people are sometimes penny wise and pound foolish, including people with decent amounts of money. So a New York attorney named Josh Rubenstein, who heads the private wealth department at a nationwide law firm, said, But. Penny wise and pound foolish. So if you have enough money to leave to somebody, you have enough money to hire a lawyer and do it and not do it yourself. Folks, make it a formal get you an attorney. They don't charge that much. And believe me, when you pass away, you're not going to have to worry.

Randy Sams:
Well, you're not going to worry about anything anyway. But once you know that formal will has been set in stone with the attorney, it's going to give you the peace of mind knowing that when you pass away, when that time comes, that hopefully your kids aren't going to be able to fight or fighting like Miss Aretha Franklin's or other other families have fought over estate. Number three. What happen when someone dies without a will? Most states have laws covering how an estate should be divided when a person dies intestate. That means without a will. So as the vast majority of Americans do so more people pass away without a will than pass away and have a will. So you can imagine what the family turmoil is once they pass away. But those laws just provide default formulas for who gets what, and they vary from state to state. That's why, you know, you have a will. It basically helps everybody. So those formulas made out ensure that money, property and possessions get divided the way you want. As a parent between your children or grandkids. Among your surviving relatives. Nor do they guarantee who will be named the executor. Are. Who's going to be in charge of dividing those funds, going to be an attorney? It's going to be a court. Can cost a lot of money. So listen. Case in point. Another superstar that you guys are going to know. When I mentioned his name, the rock superstar Prince died without a will in 2016.

Randy Sams:
Folks, that was seven years ago. His estate had to be divided. So this is under Minnesota law because he died intestate without a will. Under Minnesota law, his estate had to be divided equally among his six surviving siblings, siblings who have had plenty of disagreements since then. Since then, the court had to appoint an executor. Lawyers and the trust firm appointed by the court to manage the estate collected millions of dollars that otherwise could have gone to their heirs. So, folks, the executors don't do this for free. If you have an attorney that jumps in, they're going to charge. And like I said. The attorneys and the trust firm appointed by the court cost the family millions of dollars that otherwise could have gone to the heirs. So more than seven years after Prince's death, the case is only now finally winding down. It took until last year for all parties, including the IRS, to agree that Prince's estate was worth 156.4 million $156.4 million. All the assets have been distributed except for around 1.4 million in tax refunds that are still coming. Court filings show. So, folks, did you have a will? I say yes, you should. All right. We believe that having a formal will is something that every pre-retiree and retiree should strongly consider, even if you're younger. Having a proper will can prevent legal disputes and ensure that your assets are passed along to your loved ones in a timely manner. So if you have questions about how to properly create a will or establish a trust, you can give us a call.

Randy Sams:
(866) 990-7664. Or visit our website. YourAmericanRetirement.com. We'd be happy to help make those arrangements for you and give you the opportunity to take advantage of any of our complimentary services for listeners to our show. So. We can show you exactly how much you're paying in fees and cut your unnecessary cost in your IRA and your 401. We can build a custom retirement plan based on what your objectives are. We'll have questions about your benefits and what you can expect in an annual income. Get you that guaranteed income and we can present you with a Social Security maximization report at no cost to you. So schedule a complimentary financial and retirement consultation to receive your Social Security maximization report today free of charge when you meet with us. So folks, give us a call. (866) 990-7664. Or again go to the website YourAmericanRetirement.com. Leave us your contact information. So hey, Randy, we don't have a will we'd love to talk to you about how do we get one set up now folks, I'm not an attorney so I won't be doing the will. But we have attorneys that we work with that we can get you in contact with. Hey, listen, you come right back because we're going to talk about what is the 4% rule and how it's used today in retirement planning. You're listening to Your American Retirement on 101.1 FM. The Answer will be right back.

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Are you interested in ways to protect and grow your hard earned money? Your American Retirement is here to help.

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

Randy Sams:
Hey, welcome back, everybody. Again, I hope you're having a fantastically wonderful Saturday morning here in the great state of Arkansas. Shout out to all our friends in Little Rock, all our friends in Benton, all our friends in Haskell, all our friends in Beebe. I could go down the list. But listen, thank you for all the great comments we've had. Let's jump right into this segment. We're going to talk about the 4% rule. How strong is your retirement income plan, folks, if you've listened to this show over the last year and so many, so many months, think it's about, what, 13, 14 months now? If you've listened to our show, you know where my heart is. I believe in guaranteed income. Folks. I was with some people last night. And basically told them again and again and again. You do not retire own assets. You retire on income, folks, while you're working, your objective is what? Accumulation. Accumulation. You have a retirement age that you have. You have a target retirement age that that's when you want to retire and then you may have a target. Accumulation amount 500,000. A million? Don't know. 2 million. 3 million. Whatever that might be. Might be 200,000. Peoples are different. That's what I'm saying. We don't do cookie cutter retirement plans here at SMMG Financial. We're going to sit down with you, ask you some questions, listen to what your objectives are, what your wants and what your needs are in retirement. And we'll put together a plan based on what you have to work with and based on what your objectives are.

Randy Sams:
So how strong is your retirement income plan? What is the 4% rule? The 4% rule suggests that retirees can withdraw 4% of their investment portfolio each year without running out of money, assuming they have moderate investments and a 30 year retirement. So if you follow the 4% rule, how much will you be withdrawing to live on each year of your retirement? Folks, it's a pretty simple formula. 4%. All right. Let's give a an example. 4% of a $1 million portfolio is what, $40,000? So remember, they're saying the 4% rule, what used to be and I'm going to give a little background history on the 4% rule, but they say the 4% rule cannot and will not work today. That the actual safe withdrawal amount on retirement plans because, folks, we're living longer. All right. Remember that 4% rule was for a 30 year? So but a lot of times it doesn't last 30 years because so you have to take into account sequence of returns. You have to take into account market volatility. So, listen, if you're taking out money at the same time, your account value is dropping. That's where you run the risk of your retirement account balance reaching zero before your blood pressure does. All right. That basically sets you up for running out of money before you pass away. And that's not what we're all about at SMMG Financial. We want to set you up with a guaranteed lifetime income.

Randy Sams:
A guaranteed pension. Self-made pension. For you and your spouse for as long as you live and as long as she he may live after you pass away. That's what we're all about. So listen. So you got to remember the 4% rule. If you're withdrawing money from a tax deferred account, you will owe taxes on any withdrawals, Remember? So if it's a 401. K. 403 B, IRAs, whatever it might be. See, it's great when I see I've got $1 million to retire on. See if I use that 4% rule. And I'm taking out $40,000 a year just from that retirement plan. I'm having to pay taxes on that because that money has accumulated over that number of years, whatever number of years that might be 20, 25, 30, 35, 40 years in your retirement. Its accumulated tax deferred. But when you start taking the money out. You start paying taxes on it now, hopefully you're in a lower tax bracket. But ask yourself this question Do I think taxes are going to go down or tax is going to go up in the future? You Answer that question. I think I know what the Answer is, and I think you do, too. All right. Let's let's look at the 4% rule a little bit deeper. All right. 4% rule. So most financial planning professionals are able to articulate the basic premise of a 4% safe withdrawal rule. But that doesn't mean they fully appreciate either the real power of the retirement spending framework or its significant real world limitations, folks.

Randy Sams:
So they may also be unaware. A lot of folks that I deal with and a lot of advisors that I have conversations with, they're unaware of where the 4% figure came from, that it just somebody just made it up. So the popular guideline, the 4% rule is how much money is safe to spend annually in retirement was calculated based on a retirement beginning in 1966. So, folks, you do the math. How many years ago was that? Almost 60 years ago. 57 years ago. All right. So in the original analysis. That was the basic that was basically the toughest 30 year period on record for a new retiree. That's what the 4% rule was set up on. Okay. They looked at that 30 year period from. What was it? 1966 to 1995. So anyway, you may not expect it, but we could actually still learn a lot by going back and looking at the study that was first brought about by the 4% withdrawal rule. So that work was was done by Mr. Bill Bingen. Ben, in Bingen, though he was a researcher and retired advisor credited with inventing the spending framework. So he came up with the 4% rule, for example. It's really interesting to look back and see that the 4% safe withdrawal figure itself comes from what would have been saved to spend during the 30 years from 1966 to 1995. So the period in the late 60s and the early 70s was a tough time to retire.

Randy Sams:
Inflation ran rampant. The S&P 500 scored several significant negative years. During that period, the returns were particularly poor in 1966, 1969, 1973 and 1974. So notably after 1982, or about half way through the 30 year retirement that started in 1966, the markets actually did really well. So the key takeaway here is that even though the average return to a portfolio was decent between 1966 and 1995, the sequence of returns was really difficult for retirees to deal with. In other words, by the time a retiree hit 1982, their portfolio essentially had been decimated from the need to sell assets to generate income, while prices were significantly depressed only by limiting their spending to 4% per year from the start of retirement period could the 1966 retiree reliably avoid running short of funds. So, folks, that's where the 4% rule came from. That's what it was established about. So. 84%. A lot of you may have a retirement account or 401. K account and what are you doing? You're looking at it and you're thinking, well, I've got 200,000. I'm going to retire on that $200,000. I'm going to kick in Social Security. Okay. So if you stick with that 4% rule at 200,000, what does that mean? That means $8,000 a year. That may be a lot less than some of you thought you were going to retire on, including on top of your Social Security, if that's all you have. Okay. But here's what happens.

Randy Sams:
Sequence of returns, risk we just talked about. If you're taking money out and you have your money in. A vehicle that still has the volatility of the stock market. So it's in equities. All right. Could be. It's still in your 401. K. It could be in an IRA. It could be with a money manager. Okay. Whatever you want to call them. But you're taking money out and your account drops. That's where sequence of returns risk comes into play. So just think last year, 2022, a lot of you can Answer this question. Go back and look at your 401. Statements or your IRA statements or your account values. Look and see what your account value was on January 1st, 2022. And then look at your account value today. Is it at the same level? Or is it ahead of where it was in 2022? January 1st, 2022, or is it still below? The majority of the folks that I deal with today, there are 401. Values, even though they're up. From January 1st, 2023 to today. They're still down when compared to January 1st, 2022 value. So even though the S&P 500 may be up 16% for 2023, the S&P 500 lost, what, 25% last year. So it's still below. So that's why we address sequence of returns risk. That's why we address market volatility at SMMG Financial. And we want to remove that risk. We want to remove those risks and we want to address longevity risk. Okay. People are living longer.

Randy Sams:
The only way you are going to have the peace of mind knowing that you can never outlive your retirement income or your retirement funds is if you allow us to set you up with a guaranteed lifetime income annuity. Now, I say allow us because it's my radio show and we're talking about retirement planning. All right? And that's what we do. And we focus on guaranteed lifetime income. I believe in it. You've heard me say it and I'll continue to say it today, tomorrow, next year. It's not going to change. I want you to retire. And know that you're going to go into retirement with a safe retirement plan, not a risky retirement plan. So no matter what the market does, no matter what your income level is, it's not going to change because it's guaranteed. That's what we do. So, folks, please go to the website YourAmericanRetirement.com or give us a call. (866) 990-7664. Leave us your contact information. Folks, there's it's no obligation. It's a free consultation. Take advantage of the experience that we have in this market and at least let us put together a retirement plan that you and your spouse can take a look at and see if it fits, what your objectives are, see if it makes sense. I believe it will. Hey, listen, we're going to be right back and we're going to talk about pensions and personal pensions and setting up your on your own pension plan so you come right back. Your America retirement 101.1 FM. The Answer.

Producer:
Ms.. Part of today's show, Your American Retirement is available wherever you listen to podcasts and online at YourAmericanRetirement.com.

Producer:
Even with today's high interest rates, refinancing your home loan could save you money. Depending on your situation. I'm Matt McClure with the retirement radio Network. Powered by a mirror life. Inflation has been hitting us all in the wallet for more than a year now. To combat rising prices, the Federal Reserve has hiked interest rates several times. The idea is to decrease demand so that it comes back in line with supply levels, with interest rates on everything from homes and cars to credit cards higher than they have been in a long time. You might think it would be impossible to save money each month by refinancing your mortgage. Think again. We are in a.

Mike Frantantoni:
Very different situation than we were last year at this time.

Producer:
Mike Fratantoni is chief economist at the Mortgage Bankers Association. He recently told CBS News the vast majority of homeowners have rates well below those currently available in the market. But depending on your situation, you may be able to take advantage of a dip in rates from their recent highs.

Mike Frantantoni:
So 6.3 is not going to be attractive for a lot of folks that refinance over the last couple of years. But for someone that might have bought a home earlier this year, it could be a good opportunity.

Producer:
Saving on your monthly mortgage can be a huge boon for retirees since a single payment can quickly eat up an entire Social Security check. If you're still paying off your home, consider refinancing to a lower rate to save money on those monthly payments. So could now be the right time for you to refinance your mortgage. It's a key question to consider, and it's one of the 23 retirement cost cutters for 2023 with the Retirement.Radio Network powered by AmeriLife. I'm Matt McClure.

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 10 a.m. right here on 101.1 FM. The Answer. Protect your retirement and schedule a free no obligation consultation now at YourAmericanRetirement.com.

Randy Sams:
Well, hello. Welcome back folks. I'm sure glad that you've stuck around and you've listened. Hopefully you've gotten a lot of good notes. We've had some great information given out today. We're going to close out today's show. We're going to talk about pensions and hopefully we'll have enough time to talk about annuities. There's that word again. I love it. Annuities and the notable figures who have leveraged them in their lifetime. Folks that you are going to recognize, names that you're going to recognize that understood the value of having an annuity in their retirement plan. But first of all, let's look at pensions and personal pensions. All right. Let's discover your options. So pension options, when you leave a job, you can choose to take the money as a lump sum. Now, a lot of times folks do that. If you have a pension and you may not have the highest confidence in the folks that are running your pension, I'm not throwing stones at anyone. But this is a this is a suggestion and this is what we've done a lot of times with our clients is if you have a pension, they will give you the option to take a lump sum payment. People say, Well, ready as if take a lump sum payment. What are the taxes going to be on that payment? Well, guess what? We're not going to pay any taxes because we're going to do a transfer, a rollover.

Randy Sams:
So we're going to take those pensions funds, the pension fund in a lump sum, and we're going to roll that over into a guaranteed lifetime income annuity. And we're going to start that income based on what your age and your spouse's age might be. If you're doing a joint lifetime income payment. We're going to look at your age only if it's if you're single and you just want it based on your life. Okay. But we can compare apples to apples. Let's take a look at what the pension that you're being offered. Let's look and see because one of the options are you can take you can take a promise of regular payment. So you can take an income just like an annuity from them if you want to. But here's what I always do. All right. Well, let's take the bus to both worlds. Let's look and see what they offer you as a lump sum. And then let's look and see if we put that lump sum into a guaranteed lifetime income annuity and let's see what those payments are going to be. And then let's compare what the annuity payments are going to be based on what the pension payments say they're going to be. Again, with the pension, you have the ability to do it just based on your life. But unfortunately, if you set it up that way and you're married, that's going to be the highest payout you're going to get from a pension.

Randy Sams:
But if you pass away, your spouse is not is going to be left with zero. So you should have an option in many of your pensions out there, you have the option to take a lower monthly payout and that way you have the peace of mind knowing you can set it up where your spouse receives 50% of that payment, 75% of that payment or 100% of that payment. Just like on the annuity side, we can set the annuity up based on a. Joint live payment plan, which is joint income based on your life. And when you pass away your spouse, he or she will receive the exact same amount. So folks, it's always good to to do a comparison while your pension income might be versus what we can put that money into and a guaranteed income annuity and see what those payments are. So here's some facts. In the mid 1980s, around 60% of private sector workers in the United States had access to a pension plan through their employees or their employers during this period and in the decades prior, pensions were very common form of retirement benefit. That was a defined benefit plan. But in 2020, number of US workers covered by traditional pension plans significantly decreased, according to the data from the Bureau of Labor Statistics. In 2020, only 16% of private sector workers had access to defined benefit pension plans.

Randy Sams:
So government employees at federal, state and local levels are more likely to have pensions, sometimes called a defined benefit plan. So, folks. That's what happened. Our parents and grandparents when they were working. You know, they went to work when they were young and they worked at the same job for 20 years, 30 years, 40 years. And then they retired. They had that great retirement party. They got the gold watch. And then they got to go walk off into the retirement land and then they got that nice pension. Then they could kick in that Social Security, which was to supplement that pension. But what happened? Now the burden for retirement income has switched from the employer to the employee. So you can see about 84% of the people that are working today that are employed do not have a pension plan. So there's now the burden is shifted to our shoulders via the 401. Ks. The 403 B's IRAs. But it's up to us to decide where those investments are going to be. And a lot of folks don't have that knowledge. Okay. So the pension, your retirement fund is now on your shoulders. That's what we do. We want to take those monies and we want to set you up with a guaranteed plan. So is it possible to create your own personal pension? The Answer is yes.

Randy Sams:
You can establish your own pension, a guaranteed lifetime income using a similar strategy that compasses and that companies and governments use to guarantee benefits to former employees. So here's how you start your personal pension plan. You call SMMG Financial at (866) 990-7664. Or you go to the website YourAmericanRetirement.com. You leave us your information and we're going to set up that free consultation and we're going to come put together a plan for you and we're going to look at a guaranteed lifetime income annuity. Fixed indexed annuities are what we utilize the majority of the time for as as I refer to them or. Their insurance contracts that provide a guaranteed income stream, folks. Guaranteed income stream for your retirement. They are seen as an alternative to traditional bonds and provide a way for investors to protect their retirement savings from market volatility. Abayas are designed to provide protection from market downturns while providing potential for growth. So let's look at some of the benefits. Utilizing a fixed indexed annuity. Protection from market volatility. The indexed annuities provide protection from market volatility since the annuity is not linked to the performance of an underlying stock market index. The income is not directly affected by short term market fluctuations. So in other words, zero is your hero. You're not investing your funds into the index. You are getting a participation rate or you're getting a percentage, a set percentage of the increase of that index.

Randy Sams:
If the index were to go negative, you don't lose money. You only make money when it goes up. So in other words, the index is going up and so is your account value. If the index goes down, your account value stays right where it's at. You don't lose money. So remember this zero is your hero when it comes to indexed annuities. So this is why it makes an attractive option for investors who are looking for steady, reliable income. Okay. Tax deferred growth. This means that any earnings on the annuity are not subject to taxes until the annuity is withdrawn, until you start taking payments. Lifetime income streams. Don't worry about breaking your budget and enjoy your discretionary money with an income that you can count on and never outlive. Folks, that's what we do. All right. We want to set you up with a guaranteed lifetime income stream that you and your spouse. Have the peace of mind knowing that no matter what the market is doing. That you're going to at least have the income coming in to fulfill and to cover your basic needs. Okay. So we have a plans to set your set you up for your basic needs are taken care of, and then we can also do some of your wants. I call that a paycheck and a paycheck. So we've got folks who utilize the annuity to make sure that they know that they have this amount of income coming in every month to where their bills, their needs are met groceries, gas, utilities, whatever payments you may have.

Randy Sams:
Okay. Mortgage payments, uh, whatever you have. Then I have clients who utilize the annuity for play checks. They may have a good Social Security coming in. They may have a pension coming in. Okay. And they want the annuity to be able to write them a check every year or every so often. And they call it a paycheck. That's what they use for their trips, their vacations, their cruises. That's what they use to pay for their country club dues, whatever it might be. So we can use the annuity as a paycheck. We can use the annuity as a paycheck. So that's why I love the guaranteed income annuities because it's guaranteed. It gives you the peace of mind knowing that no matter how long you live or how long your spouse may live, neither one of you are going to outlive that income stream. It's guaranteed even if the account value goes to zero. Guess what? That income is still guaranteed for as long as you live. So remember. We want to set you up with a for a safe retirement, not a risky retirement. We want to put you we want to put together a retirement plan to make sure that your blood pressure hits a zero.

Randy Sams:
Before you retire retirement account does. Okay. So that's what we look at at SMMG Financial. So do you have money sitting in a cash or checking account? If this is you, we encourage you to meet with us to discuss safe, smart options for your money. We can help you see a better return than what you are likely losing as inflation erodes the value of your money that isn't invested or tied to the performance of a stock market index. Okay, so if you have your money in a money market or you have it invested in the stock and you're losing your frustrated when it comes to planning your retirement, folks, let us help you with a no obligation consultation. So many people that choose to meet with us simply were not receiving any guidance from their work based retirement plans or they were too busy running their own business to put a plan in place for their financial futures. So whether you need help setting up your personal pension or you have questions about Social Security, we are always happy to help our listeners. So call us today. (866) 990-7664. Or you can learn more and schedule an appointment online at YourAmericanRetirement.com. Folks, thank you for joining me today. I hope you have a fantastic rest of your Saturday. God bless you. Thank you for listening. We'll see you next week. Your American Retirement 101.1 FM The Answer.

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.

Producer:
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. Amerilife 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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