Randy explains the statistical likelihood of living until age 90 or greater, and the financial ramifications that come along with such a milestone. Plus, he breaks down eight ways baby boomers could potentially run out of money in retirement.
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12.8.23: Audio automatically transcribed by Sonix
12.8.23: 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. Well, hello again, Central Arkansas. I want to welcome you to your American retirement, 101.1 FM. The answer. I want to thank you for joining me this Saturday morning. I hope your Saturday started off well. You've had your cup of coffee or however many cups of coffee you might have by this time. Uh, again, we've got a jam packed show for you today. Got a lot of things. We want to go over some, uh, personal stories. Kind of like some, uh, information that we like to give out. And don't forget to check us out, folks on our show you your American retirement. You know, we have a podcast, podcast form on Apple, Google, Spotify, or wherever you get your podcast. You can also visit us on YouTube page, our YouTube page as well. Of course, you know, you go to youtube.com and look for your American retirement and you're going to see my smiling face there. You're going to know you're at the right spot. So our podcast folks, you get to listen to previous episodes. You can go to our website, Your American retirement.com, and check for any of our previous shows we've had over the past couple of years.
Speaker2:
Again, on your favorite podcast app, our YouTube channel. Are just short videos, little snippets, uh, highlights of the program. Youtube.com. Search for your American retirement and again, you're going to see us. But folks, please. If you hear something on the show that you've got questions about, uh, something that you've been thinking about, that's a concern, something that we can help you with or something that you think, hey, might help other people. If we're able to use that as one of our topics during the show, please get in contact with us. Don't hesitate to call us or visit us. Leave us a message. You know the number (866) 990-7664 again (866) 990-7664. Or you can go to the website your American retirement.com. Leave us your contact information. Just give us some good critique. Give us some good comments and let us know. So hey Randy, I've been thinking about this. I'm getting close to retirement and I have concerns about this. Could you maybe hit this as a as one of your topics, or have a segment in one of your shows about this? Because I'm, I'm getting kind of stressed out about long term care or about longevity or about whatever it might be. We'd be glad to get in contact with you if you need. We'd be more than happy to set up a free consultation with you. But again, we love hearing from and helping our listeners. So again, our phone number (866) 990-7664 or our website, Your American retirement.com.
Speaker2:
So folks I want to start off today's show kind of. But again, you've heard me say this and we usually start the show this way, kind of giving you an idea. People ask me now, folks, I've been in this business since 1986, so you do the math. Okay. What is that, 37 years about to be 38 years in 2024? A few weeks from now, 2024 will be 38 years in this wonderful business. Now, if you'd have asked me or told me when I was, uh, going to school, I went to Fayetteville. Uh, was an architecture school. If you'd have told me then that I was going to be in the insurance business, that I would be an insurance executive at a couple of the largest insurance companies in the nation, I would have probably told you that you were smoking too much or whatever. You were smoking okay, or drinking too much or whatever you were drinking, but I've enjoyed it. Again, I must be a reason why I've been in it for 38 years. Uh, I love doing what I'm doing. Uh, we love working with folks that are getting close to retirement, folks that are in retirement. Because, again, you know what we do at a small financial, we want to educate our clients, our customers and get you prepared for a safe retirement, a safe and happy retirement, not a risky retirement. So what I want to kind of tell you about to to start off the show is sometimes when we meet with people or we have conversations with people, uh, they don't always end up the way that you think that they're going to or you'd like for them to.
Speaker2:
Okay. So this is kind of a, uh, a personal story. What? I mean, personal, because it kind of hit me. And it's not the first time that this happened, but this is just recent and and I'll try to keep it short, but some of you may be in this position. Some of you may be listening. And I want you to pay attention to what I'm about to talk about, because I don't want you to be in this position. Okay. Uh, we want to be able to have that consultation, hopefully years before you plan on retirement. I don't want you to be 67 and say you want to retire at 68. And we try to put something together as far as retirement plan for the first time. All right. I'd rather see you be. 58, 59, 60, 61 somewhere in that age. And then let's get together and say, Randy, I plan on retiring in five years or eight years or nine years, whatever that length of period might be. And let's see what we have to work with. And let's put together that plan, because what I'm trying to get you to understand, I don't want you to be in the position of the gentleman that I'm about to speak with. I'm not going to name any names.
Speaker2:
I'm just going to tell you his story. Alright. And why it hit me and it impacted me. Because, folks, again, you realize what we do. I want you to have a happy retirement. I want you to be able to be as less stress as possible. Okay? We understand that things are going to happen. Stress might be inevitable, but one of the things that we want you to focus on is the financial side of retirement. We can't do anything about the unexpected. We really can't do anything. As far as health issues go. Alright, now we can help you pay for those health issues. Long term care, Medicare, Medicaid, Medicare, you know, whatever it happens to be, we can address those during our visit with you, our retirement planning with you. But what we don't want you to have to happen is to you be able to retire on a very, very limited income. And that's what happened when when this gentleman and I had a conversation. He was upset. Um. Because he had worked all his life. Uh, he had some disability and, and basically hadn't really focused on retirement until it was what I'm going to say a little bit too late. Okay. And so he's retired. He had a small 401 K. And he took that money and basically has, you know, kind of supplemented his Social Security. But, folks, the only thing that he really has coming in, he has no pension. He didn't have a huge, I mean, a very large 401 K whatsoever.
Speaker2:
So what he's doing right now is he's living on Social Security. And what really hit me was that he wants to be able to move into a certain, let's say, like what a, um, an adult living center, say, not a long term care, not a nursing home. He doesn't need that. He's he's okay, but he but he wanted to be around more people. So, uh, that's what he wanted to do. But but really, what got him was the fact that. When he learned how much it was going to cost on a monthly basis for him to be able to move into a situation like that or a facility like that. Uh. He realized that it was going to cost him more on a monthly basis. Just to be able to live in a place like that than he was actually making right now. So all he has is basically Social Security coming in. And again, he's been utilizing his 401 K funds, which again, weren't very much to start with, to kind of supplement that Social Security. So again, so folks, what really hit me was the fact that, you know, this is what I do on a day to day basis. We we work with our clients to try to put you in a situation to where if at some point in time, you want to be able to move into one of those facilities, not because you have to because of physical or mental. Issues, but because you want to be around other people.
Speaker2:
Now this gentleman is single, not married, no children. So that's what he wanted to be able to do. But unfortunately, because of the fact that there hadn't been a lot of planning, basically no planning whatsoever until he contacted me, uh, there wasn't a really a lot that we could do for him. Okay, so, folks, we don't want you to be in that position. Now, I understand that things happen. Uh, we pray a lot with our clients, but we want to be able to sit down with you, give yourself enough time to be able to put together a plan and be able to put yourself and maybe your spouse if you're married, put you guys in a situation to where the one thing that you're not going to have to worry about is income, all right? You don't retire on assets, you retire on income. And that's what we do at your American retirement Smg4 financial is, again, we work with you, we work with our clients. We're going to put together a retirement plan that fits your needs, fits your objectives, and put you and your spouse in a position to where you're going to have a safe and a happy retirement, not a risky retirement. So folks, we're going to start segment two here in just a second. I want to thank you for joining us again. You're listening to your American Retirement 101.1 FM. The answer. We'll be right back. Are you interested in ways to protect.
Speaker3:
And grow your hard earned money? Your American retirement is here to help.
Remember when Rock was young? Me and Susie had so much fun.
Speaker3:
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. 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. Visit your American retirement.com to schedule a free consultation with Randy today. And now back to the show.
Speaker2:
Hey, welcome back to your American retirement on 101.1 FM. The answer where little Rock comes to talk. Folks, don't forget to check out our YouTube page, visit youtube.com and again, search for your American retirement and you'll see my smiling face and you'll know you hit the right spot. So, folks, we want to give you a kind of a feel good story to, uh, start this next segment. Um, I hope you all understand in that first segment, I didn't want to be Debbie Downer, but I want you guys to realize why it's so important, uh, to plan. And that's what we do at Qmg financial is we want you again to have a safe and a happy, stress free retirement, not a risky retirement. So, folks, a little background. Some of y'all don't know, some of y'all that know me know my personal story. But my youngest son, when I say youngest, he's now 30 years old. He just celebrated his 30th birthday in October. He has had two heart transplants and a kidney transplant. Uh, he had his first heart transplant in 1993 when he was born, at the age of 14 days. So at that time, he was the youngest recipient of a heart transplant here in the state of Arkansas. And he did, uh, excellent. Uh, played uh, baseball, played flag football, played basketball. So he was involved in, you know, he couldn't do the tackle sports or the real aggressive sports, but, uh, he still enjoyed some of the same things that his older brother did.
Speaker2:
But anyway, for some reason, folks, he has, um, he over his lifetime became a, a huge Duke fan, the Duke Blue Devils, you know, the team that Arkansas just played last week we beat. Okay. But he is a a huge Duke, uh, Blue Devil fan. Uh, you know, I went to school at Fayetteville. My oldest son went to school at Fayetteville. Uh, I guess Creighton, uh, which is his name, I guess he chose the Duke Blue Devils because, of course, they've won. How many national championships? 5 or 6. They had coach K, who just recently retired. Well, anyway, when we knew that, uh, they had the NCAA had planned the SEC, ACC Tournament Challenge, as they call it. Duke was going to play Arkansas in Fayetteville. And my son has always wanted to go to a Duke game, and it's a little difficult for us to be able to pack up and head to, you know, Durham, North Carolina or Raleigh, North Carolina. Plus, the tickets are quite expensive, but we wanted to make sure that that we were in attendance and we could take Creighton to that Duke game in Fayetteville, which was last week, November the 29th. And so we made hotel reservations about five months ago. And made a long story short, we got there on Tuesday evening, had just got through eating, uh, dinner and was walking out. We were going to go, uh, look at the lights, which were fantastic there at the Fayetteville Square, uh, downtown Fayetteville.
Speaker2:
And uh, as we were walking outside, two huge buses pull up in front of the hotel hotel that we were staying at, and guess who they were? It was the Duke Blue Devils and who was the first person that walked off the bus, coach Jon Scheyer. Okay, he was he been the coach, I guess, for a couple of years now since coach K retired. And so as he was getting his luggage and he turned around and headed to the hotel, I basically had my camera ready, my cell phone with the camera and asked him. I said, hey, Coach Scheyer, how would you like to take your picture with the with the biggest Duke fan that there is in the state of Arkansas? And he kind of looked at me and he looked over at Creighton. Creighton, of course, had his Duke Blue Devil hat on, had his Duke hoodie on, had his Duke basketball shoes on. So he was all decked out ready for the Duke Blue Devils to play the Arkansas Razorback. Coach Scheyer gives us a big smile and said, love to. So here's a coach. Didn't have to take the time out of his life. You know he had things to do. They just had been on a probably a long flight. White from North Carolina to Fayetteville, Arkansas on the buses to get to the hotel.
Speaker2:
Probably had some planning to do, but he took time out of his life to take a picture with my son, who I will continue to say he's probably the biggest Duke Blue Devil fan there is in the state of Arkansas. Unfortunately, they lost, but go hogs were good. But I just wanted to kind of give you that. Good, feel good story about my son and about Coach Scheyer, and about how God put us in that position. Because, folks, if we would have walked out of that hotel room or that hotel five minutes earlier, or five minutes later, those buses would have pulled up and we probably never would have known it until it was too late. And the chances are, the opportunity for my son to get a picture made with the head coach would probably been slim to none. But anyway, my thanks go out to Coach Scheyer for making my son's trip. That was the whole that made his whole trip worth it, just because he was able to get his picture made with Coach Scheyer and some of the Duke Blue Devil players. Alright, hope you all enjoyed that little story. Let's get into the show today. The show today. Build a smart retirement plan for 2024 and beyond. So folks, I want to give a little message, a little public, I guess public service announcement. You know that when you listen to this show, this is going to be December the 9th.
Speaker2:
Aep is over. It ended on December the 7th. What do you have? Hopefully you've made your changes in your Medicare Advantage or your prescription drug plan, or any of your Medicare changes that you needed to. But if something occurs starting January 1st, 2024 through March 31st, 2024, the first quarter of next year, you have what's called the open enrollment period, which means that if you've made a change during AEP this last quarter between October 15th to December 7th this year, if you've made a change and during that period, the first quarter of next year, if you realize that you are not happy with the plan you changed to, you can make a change then, okay, you can't. If you didn't make a change during AEP this year, you can't just decide you want another plan next year unless something happens. And that would put you into a special enrollment period. Okay. But when you listen to this, AEP is over. It ended on December the 7th. Oep begins on January 1st. If you need to make changes based on what you did during AEP, hopefully you understand that. All right. Let's talk about RMDs. End of the year reminder required minimum distributions. Again, as we approach the end of the year, it's important to remember that the deadline for taking your required minimum distributions or RMDs is quickly approaching. It's December the 31st. So we do this proactively with all our clients to help them plan any annual distributions in an efficient manner.
Speaker2:
Because missing this deadline, folks could result in significant penalties. So please be sure to mark your calendars and prioritize this important financial task before it's too late. We do not want to see any of our clients or any of you that are listening right now have any penalties because you forgot or you overlooked to take your 2023 RMD. Okay, RMDs had to be taken from any qualified plan, any tax deferred plan, such as employer based retirement plans, traditional IRAs, retirement accounts. They have to be due and paid by December 31st for most people. Some of you have already been paying them. Those of you who turned 73 this year, on January 1st, 2023, the RMD age increased from 72 to 73. So if you turn 73 this year, if you want to take that first RMD this year, you need to do it by December 31st. You can let that roll over to April next year, but then you're going to have to take two RMDs next year. All right. So we don't want that to happen to you. So that gets the public service announcements out of the way. The AEP is over. Hopefully you've got your RMDs already taken care of. But if you don't you've got a couple of weeks to get those taken care of. All right. How about a little quote of the week music, please? Mr. Jim, my producer.
Speaker4:
And now Folsom Financial Wisdom. It's time for the quote of the week.
Speaker2:
And we're going to give the financial wisdom quote of the week that's coming from Mr. Warren Buffett. You've heard several quotes that we've had with him over the year. The most important thing to do if you find yourself in a hole is to stop digging. Makes sense, doesn't it? Okay, you've heard a lot of people say that, especially if you're married and you say, you know, man, you're digging yourself a hole. You just need to shut up and be quiet. All right, well, you can do the same thing financially in retirement. You got to remember that if you're digging yourself a hole, the most important thing you can do to get yourself out of that hole is to stop digging. All right, again, that's for Mr. Warren Buffett. You all know who Warren Buffett is CEO of Berkshire Hathaway, Berkshire Hathaway, one of the world's most successful investment firms, and he's widely regarded as one of the most successful investors in history. Okay, so folks, we're going to talk about planning, smart retirement planning. And why is it that we always talk about smart? Okay. Because folks, what we do again is we educate. I want to educate people. If I spend a couple of hours with you and don't let that scare you, I don't spend two hours with everybody.
Speaker2:
But it depends on how much information that we've got to go over and what your objectives might be. But I want my clients, whether we're talking about retirement planning, annuities, guaranteed lifetime income or Medicare, I want my clients to be educated and to understand what their options are. Okay. And unless we spend some time together, sometimes you go into it not knowing what I didn't realize that was going to happen or that could happen. So this is something that we look at. Most Americans don't know how long an average retirement lasts. Did you hear that? Most Americans. So some of y'all, maybe many of y'all that are listening to the show today don't know how long an average retirement lasts. So if we're talking about retirement planning, we got to talk about one of the basics. And that is longevity. That means living a long time. So when clients talk to their advisor about retirement, they would like to be assured that they're not going to run out of money. But it's likely they do not have any idea. They don't know how long it's going to last. So that's because a significant lack of knowledge about life expectancy of a retiree in the United States today.
Speaker2:
And some people, some of y'all, might be shocked to know the number of years that your investments and savings will be expected to stretch. How long does that money need to last? Okay, as I like to put it, we want to make sure that your retirement account does not hit zero before your blood pressure does. That makes sense. So there was a study by TIAA Institute and Global Financial Literacy Excellence Center, and at the George Washington University School of Business. This was in 2023 spoke about personal Finance Index survey access, the how to assess the longevity literacy of American adults. Does that make sense? Basically, what they were asking the they were kind of asking questions. How much do you know about longevity as far as American adults go? So respondents were asked to identify the likelihood among 65 year olds of living to 90 and the likelihood of dying early by age 70, and only 12% got both correct. So if you want to know. How they responded. You need to come right back because we're about to take a break. You're listening to your American retirement on 101.1 FM. The answer? Come back and we're going to talk about why it matters to understand longevity.
Speaker1:
Do you have a vision for what you want your retirement to look like? I'm Matt McClure with the Retirement Radio Network, powered by Amira Life. Planning for retirement can be overwhelming. A survey from Gobankingrates shows that one third of Americans don't think they know enough about retirement, and they're probably right. So if you fall into that category, how do you know where to begin? Well, you've got to know where you want to go before you start planning how to get there. That's where having a smart vision for your retirement comes in. Whether you want to be a jet setter during your retirement years. Want to take it easy in a quiet cabin in the woods, or start a new adventure by opening your own business, you should set that goal and keep it in mind throughout your working years, retirement expert Dean Waguespack said during a recent Ted talk. I want to.
Speaker5:
Challenge all of us to redefine retirement away from depart, remove withdrawal to a new definition a blending of pay, passion and purpose.
Speaker1:
Until retirement looks different for everyone. Sit down with your spouse and talk about your retirement goals. That will make it easier to determine how fiscally responsible you need to be now, and how much income you'll need to make it happen after you retire. That's right, I said. Income. More and more retirees are finding that cash flow is more important than one big nest egg number.
Speaker6:
That's when you want to say, hey, listen, I want to start thinking about all of this accumulation that I've done through these decades of working. How do I begin to think about turning what I've saved and what I've accumulated into paychecks after I retire?
Speaker1:
That's Lee Baker, president of Apex Financial Services. Speaking to CNBC. He says annuities are a great option for most retirees to generate an income you can never outlive. That's especially important since life expectancy has grown over the years, so you'll need to plan for a longer period of time than you may think. So do you have a smart vision for your retirement years? That's a key question to consider as you start planning how to get there. With the Retirement Radio Network, powered by Amera life. I'm Matt McClure.
Speaker3:
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.
Speaker2:
Hey, thanks for joining us this week on this week's edition of Your American Retirement, so please be sure to check out our podcast version of the show on Apple, Google, Spotify, or wherever you get your podcasts. Again, you can also go to the website, Your American Retirement, and you can see and listen to any and every show that we've done over the last couple of years. All right. So let's jump right back into longevity literacy of American adults okay. So they were asked among 65 year olds living to age 90, what was the likelihood the people that responded to this survey? What was the likelihood of someone who's 65 year old living to 90 and the likelihood of dying early, let's say, by age 70, and only 12% got both correct. So for men, there is a 30% chance of living to age 90. So if you're 65 right now, you've got a 30% chance of living to 90 and a 10% chance that they will not live beyond 70. That's kind of hits home, doesn't it? For women, there's a 40% chance of living to age 90, and less than a 5% chance of dying by age 70. So you women looks like y'all going to most of y'all are going to make it past age 70. Us men I would say the same thing 10% chance. But still, folks, that's where they come up with with averages when they say an average age.
Speaker2:
So look at this. Speaking of average age, they were also asked how long they think a 65 year old is likely to live and just 35% answered correctly. And that is, the average age for a male is 84. The average age for a female is 87. Again, that's average. So you got to realize some folks are going to pass away before they hit those ages. Some folks are going to live past that. Okay, my lovely mom is let's just say she's past that age for women already. And my dad passed away a couple of years ago at age 94. So he's going to skew that average up where somebody who passes away early will skew it down. That's where they come up with the average. So why does it matter folks? Good question. So we found this research found that having strong longevity literacy helps with retirement readiness. In other words, if you are getting close to retirement and you understand there's the possibility that you might live to age 90 or 95 or 100 or 105, and you might be shaking your head going, no way. Well, as someone who's 100 years old right now, if they thought they'd live to see 100, they're going to probably have the same answer you do right now, okay? Because folks are living longer. So you have to make the right plan. And if you have an understanding of longevity and that risk, then it helps you with retirement readiness.
Speaker2:
Why 50% of people who understand they've determined how much they need to save for retirement, compared to 32% of those with weak longevity literacy. Okay. Remember the story I told the beginning, the beginning of the show? If there had been a little bit more planning, planning early. That gentleman we spoke of or that I spoke of might be in a different situation today. Okay. But you got to understand, doing today, you're going to reap the fruit of the benefits of when you retire. So remember that 72% are saving for retirement on a regular basis. If you understand longevity, compared to only 58% of those with weak longevity literacy, I think you're starting to put these together and understand that folks who have an understanding, or at least have been thinking about it, that, hey, I might live to be 85, 90, 95, 100. I need to plan for that. I need to start planning for that today. So 69% of those who understand are confident about having enough money to live comfortably. You hear that word comfortably throughout retirement, compared to 53% of those with weak literacy. So longevity literacy is particularly important since retirement income security involves planning, saving and preparing for a period that is uncertain in length. That's why when you see those headstones in the graveyard that has the date of birth and it has that little dash in between.
Speaker2:
So if I'm talking to someone and I ask them, here's your date of birth. And I put that dash out beside it and I give them a pen and say, now put the year you're going to pass away over here, and they're going to look at you like they do me. And they say, well, I don't know that exactly. So you got a plan, folks? You have to plan. Because research clearly demonstrates that a lack of planning where longevity is concerned among a vast majority of US adults, improving this understanding can promote better retirement security and mitigate longevity risk. So, folks, longevity risk, the longer you live, the higher the chance that you're going to experience. Maybe running out of money, you're going to have a concern or you're spending too much money. Did we not save enough? You're going to probably experience a market crash. You're going to experience inflation. That's that's a given. And depending on your health as we get older. 72% of people who are 65 right now are going to have some type of long term care need. All right. Have you planned for all of that? That's where longevity planning and longevity understanding literacy comes into play. And that's why we want you guys to be prepared a plan. So why is it important? 75 million Americans, mostly baby boomers, are expected to retire by when 2030. That's next year's 2024. So six years starting next year, six, seven years away.
Speaker2:
It's actually being called the great retirement. As so many of you listening today, prepared to leave the workplace and start the next chapter of your lives. Okay. The State of Retirement Planning study from Fidelity Investments 1 in 4 Americans are less confident about retirement now than they were before the events of Covid 19 pandemic. You fall in that category. 71% of Americans are very concerned about the impact of inflation on their retirement preparedness. Make sense? What you can buy today for a $100. What's it going to cost in two years, five years, ten years, 20 years down the road, 31% of Americans don't know how to make sure their retirement savings keep up. You want us to help you? (866) 990-7664 or go to your American retirement.com. Leave us your contact information. Be glad to have a phone conversation with you or have a free consultation. And let's put together a plan, a smart plan for you and your spouse to get you set up for that safe and a happy retirement. So again, do you have a smart vision for your retirement smart vision? Some questions to ponder to ask yourself before you start planning for the future. What are you planning on doing? What's your objectives during your retirement years? Are you just going to sit on the front porch in a, you know, in the rocking chair or the porch swing and drink iced tea and wave at the neighbors? Are you going to want to do traveling? Do you want to join the country club? Do you want to play pickleball? What? What is it? You got to ask yourself that question.
Speaker2:
So what are you doing during your retirement years? Who are you with? Are you single? Are you married? Are you making plans for one? For two? Or maybe for single now? What happens if you meet someone and you get married? When you're in retirement. So who are you taking care of? Do you have children that you're still responsible for? Grandchildren that you're still taking care of? Okay. Or you might be close to retirement. And your parents? You're taking care of your parents right now. Maybe both. Or maybe one something you got to think about. Do you have any specific goals? What are your goals during retirement? Again, you want to travel. So let's talk about travel. Do you want to travel to Hot Springs? Do you want to travel to Fayetteville? Do you want to travel to Dallas, Texas? Do you want to go to the beach in Florida? Or maybe, you know, Mississippi or Alabama, Gulf Shores, wherever or when your travel plans? Do you want to travel and see the world? Do you want to fly to Europe? Do you want to go to Tahiti? Do you want to take cruises? You see, there's a different level of planning that we have to implement based on what your travel plans are and what you want to do.
Speaker2:
I know people that have basically what they've done is they went out and bought them a motorhome, and they want to travel around the United States, and that's what they're doing is they've got that motorhome and they travel from state to state and see the sights that they want to see in those states, and that, and they're enjoying their retirement right now. I call those the go go gears. That's when you're going and going and going and doing everything that you want to do. Every hour is happy hour. Every day is a Saturday. And that's how we want to set you up now. Do you want to retire or do you want to relaunch? In other words, there are people that I speak with that have to go back and get a job because of their financial situation. They didn't do enough planning, or their income levels are not high enough right now to take care of their basic needs. Or is it that you just want to go back to work because you want to be active? And I've told you this story, my mom, am I going to give you her age? But she still works three days a week? Not because she has to, but because she enjoys the being, the the having, the interaction with the people that she works with. Alright, that's what keeps her active and that's what keeps her going and that.
Speaker2:
But that's her decision and we want that to be your decision. So if you want to go back to work, it's because you chose to, not because you had to. Alright. And how are you going to fund all of it and something that you got to think about folks, we talked about it. The biggest fear that most people have when they enter into retirement is what, running out of money. When I talk to people, they tell me this all the time, Randy, we want to set up a plan where we know that we have a guaranteed income. We have some concerns about the plan that we have. We have some concerns about leaving all our money in the stock market. We have some concerns about a plan that someone put together for five years ago, when situations were totally different. Five years ago, markets were going up. Since 2021, markets have been going down okay. We had that slight dip in 2019 because of Covid, but it quickly came back up. But because of the situation politically and the people that are in charge right now, things are going down. Inflation is going up. So folks, when we come back, we're going to talk about eight ways that baby boomers run out of money in retirement. So again, come back. You're listening to your American retirement on 101.1 FM will be right back.
I was sitting all alone watching people get it on with each other. They would dance and cross the floor turning.
Speaker7:
The holiday season has morphed into crunch time for companies in the sports apparel space. I'm Jim Tarabukin. With the Retirement Radio Network powered by Emeril Live. Tis the season for shopping. It's that time of year when Americans flock to stores and websites to complete their holiday gift to do list. But as Gerald Storch of CNBC explains, the American consumer may have a bit of a shopping hangover from 2022.
Speaker8:
What happened is during the pandemic, consumer had a lot of money and they spent it, so sales were really high. Now, as things normalize somewhat, the comparisons aren't very good for many.
Speaker7:
Sporting goods brands like Nike, Under Armour and Adidas. This time of year is very critical to get the customer engaged and ultimately to buy. All three of those. Industry giants have suffered revenue and double digit earnings declines in recent months. Companies in the sports apparel space like Dick's Sporting Goods have had to weather a downtrend recently in 2023, but Dick's president and CEO Lauren Hobart, has taken a more optimistic approach, saying, quote, we are very excited about what we have within our control for quarter for a sediment, Wells Fargo equity research analyst Will Gartner echoes. Look, I.
Speaker9:
Mean, they clearly have momentum going into the holiday. Interestingly, you know, we had cut numbers going into the print credit card and traffic data. So, you know, they kind of bucked that trend.
Speaker7:
Sports retailers and apparel companies still remain positive about holiday sales and look to deliver a wonderful holiday shopping experience on behalf of the entire Retirement Radio Network crew. I'm Jim Tabarka. Wishing you a wonderful holiday season.
Speaker1:
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.
Speaker3:
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 Comm. Welcome back to your American retirement. Here's Randy Sams.
Speaker2:
Hey, you're listening to your American retirement. Join us every Saturday at 10 a.m. right here on 101.1 FM. The answer where little Rock comes to talk. So, folks, again, I want to thank you for joining us on this Saturday. I hope you've gotten some good information as to why we do what we do. Uh, what our motivation is. Again, you know, at Qmg Financial, we want to educate our listeners, educate our clients to where you understand what options you have, what plans you can put together to make sure that you have a safe and a happy retirement, not a risky retirement. So we're going to get right into eight ways. Baby boomers run out of money in retirement. So why is that important? Again, it's one of the questions that I get asked the most. One of the concerns, I guess it's probably the number one concern. Again, it goes back to longevity that we just got talk, got through talking about about being concerned about running out of money. Okay. Well, there's one way that you can alleviate that concern, take that stress point away from you, and that is to make sure that you have sources of guaranteed income, lifetime income. That's one of the questions that I'm going to ask you. How many sources of guaranteed lifetime income do you currently have? You have a pension that's a guaranteed lifetime income. Social security, that's a guaranteed lifetime income.
Speaker2:
Do you have a guaranteed income annuity if you don't have a pension and all you have is Social Security, what do you have to supplement? If you're still working, you have a 401 K, you have an IRA. Whatever investment program you may have had. Again, you do not retire on assets, folks. You retire on income. I have yet to meet with an with a retiree, someone who's retired today, or someone who is getting close or thinking about retirement, that they're not concerned about income. So let's talk about the eight ways baby boomers run out of money in retirement. Take notes. Hopefully you can avoid these. Number one carrying a balance on credit cards. Whew. That's a big one. So those balances on credit credit cards can quickly and easily get you further into debt. It means paying interest and therefore more money than you should. Alright, you're paying more money folks. You know what the interest rates are today? I mean, I feel sorry for young folks trying to start their what, their marriage out or their life out together and they're trying to buy a house. And mortgage rates are what, up over 6%, maybe over 7% depending on where you're at in the country. Credit cards are charging, what, 20, 25, 30% interest? Folks, it it's almost impossible if you're just paying the minimum payment every month, the minimum required payment every month, and you got a credit card that's charging you 20, 25, 30% interest, you're not ever going to pay that off.
Speaker2:
So carrying a balance on a credit card, so many as many baby boomers transition from a steady paycheck to a fixed income, paying off those high interest credit cards may become more difficult. So the interest accrued can snowball and quickly deplete your savings during retirement. So try to get those taken care of before you jump into retirement and try. If you're using a credit card. I use my business credit card for everything I do for my business, but I don't have a debt at the end of the month. What? I mean a balance. At the end of the month. I pay that balance off every month. Now, why do I do that? Because the card that I'm using and many of you have cards just like that, they have rewards program I can buy. I get different things that I can utilize, kind of like they give me credits that I can, that I can buy different things. Okay, you have the same thing. Some of them are travel cards, some of them you can build up credits for airlines or hotels or whatever. But if you want to use a credit card to pay all your bills with just because you accumulate those reward points, that's great. But remember the number one objective is at the end of the month, you pay that balance off and you start the next month with a zero balance.
Speaker2:
That way you're not carrying that debt. Number two, collecting Social Security too early, folks. That's something that we address, especially for those of you who are listening that are age 59, 60, 61 and you're thinking about, should I turn Social Security on at 62? Should I wait till 65? Should I wait till 67, which is going to be most of y'all's full retirement age? Or can I even wait to age 70? Because when you when you start collecting Social Security benefits as early as age 62, collecting too early can significantly reduce your monthly payout. Baby boomers may be eager to enjoy that retirement and think they should take that Social Security payment as soon as possible. I don't agree, however. Waiting until full retirement age, or even later, will actually result in a higher monthly payment. As an example, if you filed at age 62, you will lose 30% of the full Social Security benefit you would have received at age 67. If you file at age 64, you only lose 20% of those full benefits, and this continues until age 67, which would be your full retirement benefit age. Okay, so that at age 67 is when you receive the full benefits you are entitled to based on your lifetime earnings history.
Speaker2:
They take the top 35 years of your earnings history. So if you're making more money this year than you did early on in your 35 years, over the past 35 years, it's going to replace that low one and start keeping with that higher one. So every month you wait between age 67 and 70. Now listen to this every month that you wait between ages 67 and 70, your benefit amount will increase. So if you wait to age 6068, you will receive 108%, which is mean 8% bump of your Social Security benefit. So this that increases 8% each year until age 70. So if I wait from age 67 to age 70, basically my retirement benefit is going to end up being about 30% higher than it would be if I took it at age 67. Okay. Now where does that play an important part in your retirement? Well, it plays an important part because of the fact this little thing called inflation. All right. And if you're getting a 30%. Higher payment every month. That 30% is going to come into play five years from now, ten years from now, 20 years from now plus. For those of you who are going to be the the higher wage earner. In other words, your Social Security payment is going to be higher than your spouse. The longer that you can wait and turn on your Social Security, it could potentially help your spouse out.
Speaker2:
Because remember, when you pass away. When either a husband or wife pass away, you don't get to keep both. So Social Security payments, you get to keep the higher of the two. So if you are the higher wage earner and your Social Security benefit is going to be higher than your spouse, the longer you wait and allow your Social Security payment to also increase when you pass away, then your spouse will also enjoy having that higher payout. Okay, so number three selling investments when the market drops. So fluctuations in the market market volatility are inevitable. It's inevitable folks you're if you longer you live you're going to see a market crash or you're going to see the volatility in the market. And that's just part of investing. So however some people may panic during a downturn. And sell their investments. I know a lot of people, you know, what gets me is, uh, their investment advisor or financial advisor. Whatever you label, you want to put their money manager, uh, when their account drops because of the volatility, the stock market dropping, what do they tell you? Well, it's only a paper loss. I, you know, see that? That's what gets me. Because if I had an account that had a half $1 million in there and it dropped by 25%, you may call that a paper loss.
Speaker2:
I call that, and that hurts. Okay. That's a big loss. You got to remember, don't overreact. Don't panic. But you need to reach out and talk to folks that can give you some good advice. Paying too much for housing costs is number four. Housing is significant expense, no matter what stage you are in your life. So it can easily, especially during the retirement age, it can become burdensome during retirement. And this is why when some baby boomers own homes, they may find themselves house rich but cash poor. So is it smart to maybe downsize in retirement? That's something we got to talk about again maintaining a large house with high property taxes, utility bills and maintenance costs can strain limited retirement sources. Downsizing or exploring cost efficient housing options can free up funds for you during your retirement. Okay, having an unrealistic budget. What is what do they call that? You got a champagne, uh, mindset, but you're living on a beer budget. I think that's something like that. Some baby boomers entire, you know, they they enter retirement with unrealistic expectations about your spending habits, failing to create a budget, a detailed budget that aligns with your fixed income can lead to overspending and financial stress. And folks, we want to avoid that if we possibly can. Okay, so we got to have a good budget and you got to base that budget on what you have to work with.
Speaker2:
Number six, not having a plan. So not having a clear plan for managing expenses, investments and unexpected costs can lead to a poor decision making and financial instability. So seeking advice from financial professionals like Qmg Financial and helping allowing them to help you create a comprehensive retirement plan can help you navigate the complexity of retirement. Number seven waiting too long to adjust a plan. So folks, some of y'all that are listening have had a plan in place. You may have met with somebody ten years ago five years ago. If you have a retirement plan, you need to have someone review that plan with you every year and make adjustments as necessary. Okay, baby boomers must be proactive in regularly reviewing and adjusting your financial plans to ensure. And number eight, not planning for the unexpected, folks. That's what's going to get you. You got to make those plans. That's part of having a plan together. So, folks, I want to thank you for joining me on today's show. Thanks for listening to your American Retirement again. If you've missed any part of today's program, today's show, go back in the podcast, our archives on Apple, Google, Spotify, or wherever or whichever platform you get your podcasts. Hey, I want you to go out and have a great the rest of your remaining Saturday. Have a great week. We'll see you next week. God bless and 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.
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