YAR Full Show 7.20.mp3: Audio automatically transcribed by Sonix

YAR Full Show 7.20.mp3: 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 hosts. Randy Sams and Kale Simpson get set for a full hour of financial information and economic news affecting your bottom line. Randy and Kale work hard each day to educate Americans like you on how to reach the financial freedom they worked so hard for by protecting and growing their hard earned money. And they can help you, too. So now let's start the show. Here are your hosts, Randy Sams and Kale Simpson.

Kale Simpson:
Hey, folks, welcome back to your American retirement on 101.1 FM. The answer. Happy Saturday to all of our listeners. Remember, go to go to your American retirement. Wherever you listen to your podcasts, click that subscribe button. Make sure that you get notifications on new broadcasts coming out from me and my esteemed colleague, Mr. Randy Sams. Randy, can you hear me, sir?

Randy Sams:
I got you, Kale. Welcome, everybody. It's hot out there. Y'all stay.

Kale Simpson:
Cool. That's exactly right. It is. It is scorching out here in Arkansas like a brisk 103 degrees, I think I think this morning. So hopefully you got your grass mowed early this morning or late this evening. Try to stay out, stay hydrated, stay safe, you guys out there. But hey, welcome back to the broadcast again. This is Kale Simpson, your co host here, your American Retirement guys. This week we are this episode we are going to talk about replacing your bonds for a better retirement this week. Last week, we we talked a lot about Warren Buffett. We had had a quote from Warren Buffett this week. We actually have another quote. Randy, I wanted to throw the financial wisdom quote of the week out early in the broadcast. We come back and talk about the quote later on in the broadcast. But it is from your buddy Benjamin Franklin we talked about a couple of weeks ago. An investment in knowledge pays the best interest. I think that's a great quote from Ben Franklin. We'll talk about that. We'll expound on that in just a little bit, guys. But hey, just a quick rundown on the outline for our broadcast this morning.

Kale Simpson:
We'll be talking about, obviously, the market. I'll go over a market update here in a moment. Randy, probably talk about gas prices. We're going to play another game of of right or wrong. You guys can play along with us. We'll have some different questions. Randy, myself and our producer, Sam, we'll be talking about right or wrong. You guys can play along with us. It's a fun game. We played it last week. We got some some good feedback and some laughs on right or wrong last week. And then we'll we'll we'll dive right on into it. Randy, we'll talk about inflation. We'll talk about what's going on with people and some of the things and some of the questions that we've had over over the past couple of weeks with respect to our broadcasts. And we'll jump right in. But but hey, if if you want, Randy, I'll go ahead and give us a breakdown on on what's going on in the markets. And then I'll I'll hand it over to you for gas prices and inflation and some of the other things, if that's all right.

Randy Sams:
Yes, sir. Go right ahead.

Kale Simpson:
So, guys, market recap. Market's been choppy, market's been up, market's been down, market's been up. The market has reversed. Earlier this week on news about Apple and not hiring bonds have come down a little bit, but interest rates on the short end are still high. We still have an inverted yield curve which doesn't doesn't really mean a whole lot of good things on the horizon. But we do have a lot of negative sentiment which which might give us give us a little bit of of a rally. I don't I don't necessarily think that it's anything to to hold with a hold a bunch of water in the rally bucket, if that makes any sense, Randy, because, you know, the the tale of the tape next week. We have we have the Fed coming out with with interest rates. Are we going to raise interest rates? And obviously we are. But by how much? So it's either 75 basis points or 100 points think's on the table for next week, but we shall see. But in regards to inflation, we've got to do something, Randy. And raising interest rates is is is the number one item on the table for the Federal Reserve. We've got to combat this inflation. And inflation is just screaming along with the temperatures. So, I mean, we have not not only high energy costs at the pump, but at the supermarket. But thank goodness we've got some gas prices coming down. So, Randy, tell us a little bit about what's going on with gas prices and tell us a little bit about what's going on with inflation that you've seen.

Randy Sams:
Thank you, Gail. I appreciate that. Throwing it to me. Hey, I've got an article that I printed out. It's from Wolf Street. The Stories Behind Business, Finance and Money. The headline is this It gets ugly. Inflation shifts to services, food, fuel, spike to dollars, purchasing power swoons. It says the Fed is going to meet in late July and it's going to talk about services, inflation. You know what that means, Gail? If the Fed gets together, what they do, they're going to increase. So one of the things that's in. That thing affecting us today is what they came out with the CPI last week, didn't they? July 13th, I believe it says the Consumer Price Index released today, which was July 13, 2022, by the Bureau of Labor Statistics, spiked by 1.3% in June from May and by 9.1% year over year, the worst since 1981. Those aren't my words. Those are words that they put together through the Consumer Price Index, Bureau of Labor Statistics, now the Consumer Price Index for all urban wage earners and clerical workers. It says that the third quarter average is used to adjust the COLAs for Social Security next year. It spiked by 9.8% in June. Services, inflation, it gets its ugly kale services. You know, people are getting ready to go on vacation, airfare, hotels, food, restaurants. When you travel gasoline. It says the CPI for services spiked by 1% in June from May and by 6.2% from a year ago, the worst since 1991. And it says it's not going to turn around anytime soon. And that is why the Fed is going to dish out some salty rate hikes to get this under control. So I'll just some examples on what we're talking about as far as the services, food, housing.

Randy Sams:
Listen to this. Housing cost housing is up 5.7%. Hotels, motels up 11.5%. Health insurance plus 17%. Medical care services almost 5%. Increase airfares plus 34.1%. That's a big one. Kale, if you're getting ready to go on, go on a vacation, you're going to if you haven't already got your flights book, that's a huge cost factor. Personal services such as laundry, dry cleaning, 10.1 haircut, something I don't have to worry about since I cut my own hair. And if y'all ever see me, you'll know that. But his haircut, Price Is, has gone up almost 7% from last year. Video and audio services up 4.9%. So almost 5% pet services, all you pet lovers out there, including veterinary, almost up 8% for services. So the CPI is affecting everything. The inflation is affecting everything. Food bought in stores and markets spiked by 1% in June from May and by 12.2% year over year, the ugliest spike since 1979. So it's affecting everything. We're looking at kale. You know, we could go on food. And if you all have been listening to one of our earlier shows, we've kind of gone over some of the increases in food, but cereals up over 15% meat. So beef and veal up almost 5%, pork all over 9%. Poultry 17.3. Fish and seafood, 11%. Eggs plus 33%. So I could go on and on and on. Juices and non-alcoholic drinks, 11.6%. Coffee, 15.8%. So we know you've got services, you've got food, you've got housing. Costs are going up. Everything's going up. What's it going to do to people who are getting ready to retire? Kale?

Kale Simpson:
It makes it tough, Randi. It certainly makes it tough.

Randy Sams:
It makes it tough. And and here at at your American retirement, we want you to go and schedule a consultation, free consultation with kale or not, because one of the things that we take pride in at your American retirement is we're focused on addressing the major financial issues facing retirees and pre-retirees in America today by helping people understand and prepare for a secure retirement, not a risky retirement, folks. The people that are retiring right now are getting close to retirement. We've talked about for one case and we'll talk about those a little bit later in the show. But the 41k balances, your IRA balances are down. What? Kayla then we talk about almost 28% year to date.

Kale Simpson:
A lot of them depending on how much is allocated in, in, in equity position. Randy. Yeah, absolutely. Somewhere a gentleman I spoke to yesterday got his statement, his statements down 15%. But when we called the when we called the company to check balances, it was even lower than that. So it was it was north of a 20% reduction since since January one, the beginning of the year. Absolutely brutal.

Randy Sams:
And that's tough. And that's something that when when we schedule a consultation with our clients. Gail You know, one of the things that we look at is where is their money invested in how secure are their investments, how much risk are they willing to take? What's their risk tolerance? So again, we want to make sure that we're able to prepare our clients and they understand the for a secure retirement and not a risky retirement. So housing, you know, one of the things we're going to talk about later on today in today's show, we're going to talk about mortgages and what you should do with mortgages. But one of the costs that we're looking at now is the cost of housing as far as renters are concerned, you know, a lot of retirees tell when they get ready to retire, what they'll do is they make sale their primary residence and they put that money in the bank and then they just rent. They don't have yard. Somehow they don't have to worry about painting. They don't have to worry about if something happens, you know, as far as maintenance goes, but they rent. So what we're looking at right now, according to a Zillow rent index, it went up almost 1% in June from May to a record of $2,007.

Randy Sams:
That's the average monthly for Zillow for renting houses. So it's it's getting tough out there on a year over year basis. It spiked 14.8%, which is a huge and gigantic spike. So it gets tough for the retirees or those folks who are getting close to retirement. When you're when home prices spike by over 20% this year versus last year. So, Kale, you know, one of the things that that we like to do when when we do meet with our clients is we're going to meet with you and we're going to talk about what are your objectives. There's two types of income, folks. You have income for what you want and you have income for what you need. We want to focus, first of all, when we meet with income on what you need and we can talk about that in our next segment and then income for what you want. I separate these to basically. Paychecks or paychecks. Your American retirement 101.1 FM the answer. We'll be back.

Producer:
Remember, all of Randy and Gail's listeners receive a free financial consultation just for listening to the show. Visit your American retirement to learn more and schedule an appointment. Thanks for listening to your American retirement and subscribing wherever you listen to podcasts.

I don't know. Why is. Goodbye.

Producer:
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Kale Simpson:
Happy Saturday again to you guys. Welcome back to the show. Your American retirement as don't forget to go to your American retirement dot com click that subscribe button click that light button and share our page. So your friends and your family, if they're not able to hear the broadcast, can listen in and hopefully pick up a nugget or two on some of the things that Randy Sams and and I get to talk about on a weekly basis with you guys. Thanks so much for for joining us again on our broadcast. We really appreciate it. We've got a lot of great feedback over the past few weeks on various topics and a lot of great questions. To tell you the truth, we've had callers. Asking questions regarding different, different shows that we've done and a lot of questions just in general. So, guys, that's what we do. You know, it's no cost, no obligation. We're not we're not sales guys. We're not trying to sell you solar panels on your house. That's not what we do. We try to take a holistic approach and look at it from 30,000 feet, if you will. What's going on with your retirement, like Randy mentioned before the break? You know, we try to help you plan for a safe retirement, not a risky retirement. So we want to make sure that you have those personal pensions in place.

Kale Simpson:
You've got those unnecessary risk items off of the table. If it's if it's not going to make sense getting towards retirement the five years before retirement and the five years after retirement, because that's the retirement red zone. So we try to prepare you before that period of time during retirement, look at sequence of returns, how that may affect you guys if you don't know what sequence of returns risk means. Give us a call. We'll be glad to get you some information. We've got client folders that we send out daily. We'll get you a copy of our Annuity 360 book, which outlines multiple items that clients have on the front of their mind leading up to retirement and even into retirement. Randy, I know you talk with clients on a daily basis that are in retirement. I talked with a guy yesterday. And he's got he's got four other fixed index annuities and and wants another one and asked me the question is is that too many. And you know what I had to tell him. I said, well, it's it's different for every client. It's not a cookie cutter type system, guys. We've got clients that have ten annuities, clients that have one annuity, clients that have zero annuities. It may not be suitable. We don't know until we get a chance to talk to you.

Kale Simpson:
Kind of get an outline or a blueprint is what we talk about it with clients. We've got to get a blueprint. We've got to know what you have. Where you're trying to go and what you're trying to accomplish, your financial needs and objectives. That's what we do. So give us a call. We'll give you a free consultation. Again, there's no cost, no obligation. But really, we just want to find out if we can help you. If we can. Amen. We'll be glad to. If we can't. We apologize. But you'll. You'll leave our conversation knowing a little bit more about the retirement landscape they needed coming into it. I promise you that. But anyway, Randy. So I wanted our listeners to kind of know again what we do. If they haven't called us yet. If they do what to expect when they call us. Or go online and request a sample kit and annuity 360 book. Et cetera. What to Expect When They Call Our Office. But, Randi, there's there's a couple of things if you want to add anything to that. Before we jump into one of my favorite parts of the show, feel free. If not, I'm going to hit you and Sam with with some with some good questions on right or wrong today.

Randy Sams:
Well, I think Kaleb may think you did a good job covering. You know, we just want to meet with our clients. Sit down and ask a few questions, but we want to listen mostly to find out what your objectives are, because it's not our retirement, it's your retirement and in our roles and our obligations to you as client. Cal and I both know we're going to be the first ones to tell you if if an annuity is going to be a good product for you to look at, to utilize. And we're going to tell you, if it's not going to be something that you need to look at because your objectives just might not fit. I mean. I've had a couple of calls this week kale that with clients that. Probably didn't have the resources that we would be wanting to take some of it and put it into an annuity. So we basically just told them, you know, it's best for you in case you have emergencies that come about. That that do occur. That will occur. It's best you keep that money in the bank. Hopefully the interest rates being paid at the bank will will be a little bit higher. But right now, it's just not a good fit for the annuity. But if you're looking for protected income, guaranteed lifetime income, if you're looking for a paycheck or a paycheck, then yeah, Kayla and I can definitely help you out. But yeah, Kayla, I think we got some good feedback last week about the right or wrong, so I think Sam's got his finger on the buzzer. So if you ask me a question and I get it wrong, I think we're going to hear the buzzer go off. Right.

Kale Simpson:
I think I think you are right. Well, here's here's the good news, Randi. I think I have the ball teed up for you to take question one. So guys play along with us and hopefully everyone gets gets the question correct. But we'll let Randi answer the first question. I've got three questions in my bag of questions, Randi. I'll shake up the hat and pull one out and throw it your way. So question number one, Mr. Randi Sams, I'm going to throw it your way. So right or wrong here at your American retirement coming your way. Mr.. Sam So here's the question, guys. There is no product safer than a bank C.D. when it comes to protecting your money, right or wrong?

Randy Sams:
Wrong. Where's the buzzer? Right. There you go. A fixed index annuity can protect your wealth while also providing upside for the principal invested. That's tied to an index case. But zero is your hero. Because one of the things that when you have your money in the indexed annuity. If the index were to go negative, you don't lose anything. So we've experienced that with some of the indexes that we've worked with over the past year, even though the indexes have not performed as we wanted them to. Our clients didn't lose anything. And especially those clients that were on that protected income, that lifetime income of their payments are guaranteed. So the FDIC, for those of you who we get a lot of calls nowadays because of interest rates going up, but CDs apparently at the banks aren't really matching that. But the FDIC, for those of you who are unaware, only protects up to 250,000 in deposits. And there's only about a 10% financial reserve requirement at banks. Insurance companies are the indexed annuities are 100% financial reserve requirement product. So it has to be their surplus has to be over 100% where bank only has to be ten. But another product call very quickly is what we're looking at a lot of today. They actually do get referred to sometimes as a CD annuity. It's not a CD, it's an annuity, but it works on the same principle. You and I refer to them as MCUs multi year guaranteed annuity. That is where you put your money into a an annuity for a fixed period of time could be three years, five years, seven years, ten years. And you are guaranteed a rate of return. So that works like a CD. A lot of people that do CDs are familiar with that type of product. Again, it's not a CD, it is an annuity, and it is insured by an annuity company's last insurance company. So how did I do? Did I do good?

Kale Simpson:
Yeah. You got an A-plus on that, Randy. Great. Great job. And, yeah, you read my mind. And thank you for for for bringing that up and expounding on that, because we are getting phone calls every day and we get we get emails and guys for for all of our clients, you know, we keep our clients informed of what's going on in the markets, just like we do for all of our listeners. We go over market updates. We talk about what's going on with interest rates. We talk about what's going on from a macro level. You know, we were talking earlier, you know, before the show, I mean, it was wildfires and heat and everything that's going on over in in Europe. Well, a lot of that stuff. And what's going on with with privacy and COVID and everything else in China spills over to the United States. So we're here to help, you know, not only talk about retirement, but but keep you informed on what's going on in the world. So, you know, that's just one of the one of the many things we do. But, Randy, you hit the nail on the head. Great, great job on on question number one. A-plus. In my mind, it's going to be a hard it's going to be a hard act to follow for for Sam.

Kale Simpson:
But but Sam, I've got I've got your question teed up. Question number two in the hat. Can you hear me? Okay? I got you loud and clear. Let's go for it. All right, Sam, here goes your question. Let me see if I can pull out a hard one here. All right. I think this one will be good for you, Sam. All right. Right or wrong, your American retirement. Sam, you're up. Here we go, buddy. Your question. If you choose to take a lump sum on your pension when you retire, you can you can receive up to a 10% bonus on your money, right or wrong. Kale That is right. You know, it is an important consideration, I think, for people because a pension is a really valuable tool. But if you have that lump sum as an option and there are products, certain fixed indexed annuities can offer you up to a 10% bonus on your money. So there are situations where people can take that lump sum, put it into an fire and get a bonus right off the top and start generating a higher income payout across their retirement, which could be multiple decades. So that is right. And that's something that people got to get in touch with you guys to discuss, especially if they are.

Producer:
Coming up.

Kale Simpson:
On receiving a pension and coming up on retirement or even if it's something a few years away just so that they know what they're going to do when that time comes. So that is right. Fantastic. A-plus, Sam. Well done, sir. And hey, you. You reminded me of something. I'll share this with with our listeners real fast before I go to question number three for Mr. Sams. But, Randy, I you and Sam, I didn't get a chance to share this with you guys, but I had a client of mine. She and her husband have been life insurance clients for many years, probably almost ten years. And she retired from a hospital and she had a 403 B, which guys that's very similar to a 401 k, it is a qualified retirement account. She called me and said that she had a letter from the hospital and she needed me to look at it. So I went out there and looked at it. Sam And it really goes to to right. What, what you referred to at the end of your question on right or wrong. The letter said she had she had a couple of different options. Option one, take a lump sum disbursement and do something with it. And that option did not sound appealing on the form. I'll just tell you, it said you can take a lump sum. There may be tax consequences. You need to do it.

Kale Simpson:
You'll you'll have no you'll have no direction from us. We'll send the money to you. And then you need to find someone to help you. To help you navigate your retirement for a lump sum payment. So that was option number two or option number one? Option number two. Sam was a was a pension. It was a lifetime payout. So the hospital would pay her X amount of dollars every single month for as long as she lived. So we like that option. That wasn't a bad option. But here's the deal. That was through her employer. And so we could take that same lump sum payment. Some companies that offer these bonuses, we could look at that, Sam, and offer her a larger monthly income guaranteed for the rest of her life. And so when we looked at that, it was kind of a no brainer. We were like, well, I mean, if you can have more money, why would you not choose more money? Correct. Yeah. So, so guys, I mean, that's, that's what we do. So in a nutshell, it all depends, but but very, very much on the right track. Good answer, Sam. A-plus for you. Randy Sams, I'm coming to you with question number three, right or wrong, wrapping up this segment. So question number three when you're ready, Mr. Sams, I've got it here, teed up for you. Oh, retire.

Randy Sams:
Let me let me pull up Google. So I'll be able to type in the answer to this question quickly.

Kale Simpson:
Okay. Hey, there's no cheating. You can't ask Siri. I'm sorry, I'm asking Randy Sams. Here we go. Question number three. The happiest retirees. Have paid off their home. Randy Right or wrong?

Randy Sams:
Dale I'm going to have a 5050 chance here. I'm going to say that is correct or that is right.

Kale Simpson:
That's what the data shows. That is correct.

Randy Sams:
Sam's so it says a mortgage payment can consume a lot of your monthly income. While some people recommend not paying off your home early and keeping more money in the market, I wonder who those people would be. Kail Feedbacks people, but we recommend that you delete your mortgage as quickly as possible and take a huge leap towards financial freedom. But again, we appreciate you listening in your American retirement with Randy Sams. Cal Simpson, call us 8669907664 or go to your American retirement dot com schedule a free consultation 101.1 F in the answer Randy Sam's Kale Simpson we'll be right back I'll.

Producer:
Miss part of today's show. Your American Retirement is available wherever you listen to podcasts and online at your American retirement.

Randy Sams:
Hey, welcome back. Your American retirement. I'm Randy Sams my co-host Kale Simpson 101.1 FM to answer. Hey, before the break we played a little game of right and wrong. I think I was 100% on my questions. But the last question Kale asked me concerning mortgages and I was going to tell a personal story. I was working with a client, young lady out of Texas. And a matter of fact, she she just retired July the first. So happy retirement to her. But her main objective that while she was looking at Kale again we we want to meet with our clients and I stated earlier there's two types of income income for what you need and income for what you want. And one of the needs that you need to look at is shelter. And what we try to talk to our clients is we recommend that you delete your mortgage as quickly as possible and take a huge leap towards financial freedom. Now, this young lady was in a situation where she didn't want to sell her house. She liked the deductions that she was able to take. So what we did for her, Kayla, was we looked at what her monthly mortgage payments were, what her principal and interest, her insurance payments as far as escrow goes. And we put together a CPA.

Randy Sams:
So what that is, is a fee is a single premium indexed annuity. And we did it for a ten year period because our mortgage is going to be out after ten years if she doesn't pay it off early. But right now her goal is ten years and she'll be mortgage free. So what we did is we we took a certain amount of her for one K and put that into a CPA did a ten year certain. What that means is that that CPA is going to pay someone guaranteed for ten years. So if unfortunately she passed away after five years, they were still going to pay someone for the remaining of those five years. But after ten years, we made sure that she had enough monthly income coming in to take care of a mortgage payment and any increases that she may see in her escrow insurance or taxes for her escrow. So that's what Kail and I can do for you guys. We can put together a plan again. We want you to go to a your American retirement schedule, a free consultation call. 8669907664. Again, for Randy Sams, Kale Simpson scheduled a free consultation and let us sit down and kind of see what your situation might be. Kell, any any additions to that?

Kale Simpson:
No, Randy, that's I haven't heard that story from you, but that is that is good stuff. And, you know, it's funny and I'll just I'll say this real quick to our listeners, because my son, we were actually we were on vacation last week and we had an Uber driver and a really nice guy, but the guy was 72 years old and he said he had like 8500 drives under his belt and he doesn't do it for the money. He just he loves getting out and not sitting in front of the TV and flipping through the channels all day long. But he's got a chance to meet a whole lot of people. So he was asking me. He was asking me what I do. And. It was funny. My answer to him was, I'm a problem solver. Was, was how I answered his question. He said, What do you do? I said, I'm a problem solver. And he said, What do you mean you're a problem solver? I said, Well, that's what's what I do. I try to help people. You know, I'm in the financial services business, you know. And I explained to him what we do. But in a nutshell, that was it. So now after that, if anybody asks, you know, what's your mom do? You know, my kids say, oh, she's she's a teacher. What's your dad do? Mom and dad's a problem solver and a baseball coach on the side. But yeah, he's a problem solver. But, yeah, Randy, I mean, so what you did was exactly what I told that Uber driver. You know, you help that client solve a problem, you know, so the next ten years, you have that blueprint pretty much laid out for her, right?

Randy Sams:
That's correct. And so so what you know, to add to what you're saying, a problem solver, what we do is we also provide guarantees. So that's what she was concerned about. You know, she was concerned about market volatility, the bonds, underperforming market losses, poor payouts from bonds. You know, so there was a lot of things that she was concerned about. So she didn't want to leave that money in there. She wanted a guarantee. So if you draw two circles, going to do a small circle in a big circle with a small circle being in the middle and in the middle, put your income for what you need. That's what we did for her is her target. In the middle was making sure that her mortgage was going to be taken care of, that she didn't have to worry about that payment no matter what ever happened to other investments. So one of the things that Kayla and I like to do, again, he said he's a problem solver. That's what we do. We help solve problems for our clients. Again, we get you to understand we prepare you for a secure retirement, not a risky retirement, but we want to provide guarantees for our clients.

Kale Simpson:
Randi. That is that is spot on. And, guys, I hope you're I hope you're understanding. And we do have some listeners that have called in and said that they like listening to the show, Randi. And and they they take notes, which is awesome. If you can take take notes and write things down that helps us. You know, when you when you call and you have specific questions, you've got them all written down. I mean, that's that's fantastic. But hey, real quick, I've got I've got a story I wanted to run past you, Randi. I think our listeners would probably like to hear this as well when we're talking about problem problem solving. Some clients like like the client I was telling you about, Randi, that worked at the hospital. Her main concern, she was she was married and she had just retired. She wanted a she wanted a pension, a personal pension, like we heard Sam talk about. She wanted a personal pension, paycheck for life. I also have another client that I'm working with and. You know, unfortunately, he you know, he he had lost his wife a few years ago and was about to retire as well. He's a government employee but was about to retire. And when I asked him what his goals were, you know, on the front end of the conversation, this is a few months back, actually.

Kale Simpson:
I've been working with him since. You know what he said, Randy? He said, I don't. He said, I don't I don't need any money. I'm fine. I have a pension from the government. Plus my Social Security is more than enough money than that I need on a monthly basis. So what he wanted to do was take that unnecessary market risk variable out of the equation that we talked about at the top of the broadcast. He didn't want any market risk. He didn't want to look up and all of a sudden lose 20% of his his hard earned money that he'd worked his entire life for to just be gone due to things that he has no control over. You know, if that's oil or Taiwan or China or Russia or climate change or the White House or whatever, it doesn't really matter. He didn't want that to keep him from going to sleep at night, Randi. So what he said was, I want this money to grow with no risk and I want to leave as much of it as I can for my grandkids. Great. So do you think I talked to him about an income annuity?

Randy Sams:
Probably not.

Kale Simpson:
No, no, no, I did not. Now, I gave him multiple options because that's what we do. He needs to understand what's out there. But he's looking at a growth concept, something to grow that money with no risk. But also it's on a no fee chassis. And so that when he said that, he said, so how much do I pay for that? I said, it's actually a no fee, a no fee product. He said, No way. There's nothing like that that exists. So there is multiple companies have products that have no no fees embedded in them. And he was dumbfounded when I told him that. So anyway, we got to talking about that and that's really what we are, what we're about to do. He retires at the end of August, completely retired at the end of August, and that's what he wants to do, is a no fee concept growth annuity product that takes that market risk out of the equation. Randi, I thought our listeners would some some listeners, that's going to mean a whole lot more than other listeners. Other listeners want that guaranteed paycheck every single month, but some people don't they don't need that. Randy And so if they don't need it, then there are other options that are out there. So not every not two clients are ever alike is what we like to say. It's not it's not a cookie cutter type deal. Everything is custom and customized at SMG Financial, your American retirement. That's that's what we do. So give us a call. Go to the website, your American retirement dot com. We will try to help you out.

Randy Sams:
And one thing that you that you did for that gentleman, something I'll add a little side note. You know what? We opened up the show. We talked about inflation, correct?

Kale Simpson:
Yes.

Randy Sams:
So you already said you when you were doing your financial needs analysis and you knew he had a pension, he's got Social Security and he felt like that right now. He's got all the income that he needs to cover. Well, that's today. What's what's going to be in five years or two years? We don't have to go five years or ten years. So one thing, folks, that you're going to look at that what Kale and I can put together for you, maybe your income. Yes. You're one of the lucky few that may have a pension and you've turned on your Social Security. And right now, all your your needs, specific needs, food, shelter, clothing, utilities are covered. But as we know, it's not going to be the same five years from now as it as it is today, especially what we're looking at and what we covered earlier in the show on inflation. So what we can also do is we can take that same indexed annuity with no fees involved. Your your principal is protected. You're never going to lose a dime. Remember, zero is your hero. Let that money grow in kale at a certain point in time in the future. If if what he's bringing in right now with via pension and Social Security, he may need more. Guess what he can do with that annuity? He can take withdrawals depending on how far out he can take 5%. He can take 10% or he can take more than that as long as he's out of the surrender period. But that that indexed annuity is going to allow him. Number one, his main objective was to leave a legacy for his grandkids. But number two, if the financial situation changes and inflation continues to grow at some point in time, he may need to take some of that money out. And guess what, Kale? He's not going to have to worry because he's guaranteed he's never going to lose. It's just going to grow for him, correct?

Kale Simpson:
Absolutely. That's what he that's what he found intriguing, Randy. And he didn't know that that existed. He thought that an annuity meant that you that it turns into a stream of income immediately. And then if something happened to him, you know, he was leaving less or leaving zero to his heirs. And that is that is not correct, guys. You know, that's that is not his his main objective. And so anyways, we we custom tailored something that would fit his needs and objectives gas. But, but real quick, we have a nice audio that we want to play for you. We've got to go to break, but we want to play this audio regarding energy, heat, electric bills, summertime, all of the pains that we're feeling right now in central Arkansas. I think you guys will. We'll enjoy this audio while we go to break. And then when we come back, we're going to dive into our next segment and our next topic. Got a lot to cover but again your American retirement dot com on 101.1 FM the answer. We'll be right back. We?

Producer:
The heat is likely. Not the only thing making you sweat this summer. I'm Matt McClure with the Retirement Radio Network powered by Emera Life. With energy prices soaring and record breaking heat waves across the country, the cost of cooling your home could set you back a pretty penny this year. The Wall Street Journal reports the average American household will pay $540 in electricity bills during the summer months, up $90 from a year ago. An air conditioning can make up a big chunk of that total, especially in hotter and more humid areas of the country. Sarah Baldwin is with the think tank Energy Innovation.

Sarah Baldwin:
Because we have a confluence of factors, the increased price for both gas and oil, as well as natural gas in homes and buildings and a an extremely hot summer and likely to be record heat all over the country as well as the world, largely due to climate change. We're feeling the pressures on both sides.

Producer:
But if you think there's nothing you can do to ease the pain, you'd be wrong. Baldwin says there are some things you can do that will cost you only a little, if anything at all.

Sarah Baldwin:
Paying attention to when you're turning on appliances, when you're turning on the AC. If you have a thermostat that you can program setting that thermostat to a modest temperature instead of going straight to really, really cold, looking at what kind of window coverings you have.

Producer:
Other improvements may be a bit more costly.

Sarah Baldwin:
Update your air conditioner to the most efficient unit. A heat pump. Air conditioner is going to be your best bet. You can also look at replacing windows and doors. Those can be a bit more costly but can have huge benefits in the long term.

Producer:
And don't overlook your power company. It could have some programs or incentives to help you cut back on energy use and save yourself some money in the long term, Baldwin says renewable energy is the way to go since prices are much less volatile than things like oil and gas.

Sarah Baldwin:
The sun, the wind, geothermal, hydroelectric, other carbon free sources like nuclear are all generally very cost stable relative to their more volatile and spiking fossil fuel counterparts.

Producer:
So how will you survive the summer heat and its impact on your wallet as you plan for retirement? That's a key question to consider as the mercury and inflation keep going up with the retirement radio network. Powered by Emera Life, I'm Matt McClure.

Randy Sams:
Welcome back. Your American retirement with Randy Sams and my co-host Kale Simpson 101.1 FM. The answer. We want to close out our segment. The segment for today. We're going to talk about a couple of subjects that are very important. One of the things that Kayla and I do when we meet with folks that we like to identify, potential risk for retirement income and some fundamental considerations we want to look at. So some of the risks that we talk about, folks, number one, and most important is longevity, outliving your financial assets as a result of a longer life. Number two, liquidity, limited access to assets to meet life's unexpected financial needs. Number three, inflation risk reduction in real purchasing power as a result of increasing cost of living. We've spoken about that quite a bit today. Number four, market risk, unexpected reduction in the value of financial assets at the time of withdrawal. We're going to focus on that in this segment. Number five, mortality, risk loss to financial assets as a result of a partner or spouse death. Number six, taxes, decreased income and assets or the repayment of legacy impairment of legacy assets from increasing taxes. But folks, we're going to focus on number four. Market risk, unexpected reduction in the value of financial assets at the time of withdrawal. So what we're going to talk about right now is known as the 4% rule. A lot of you all listening might be familiar with the 4% rule, but basically what the 4% rule goes back to, if you have an IRA or a41k or a403b, whatever it might be, number one, now you hit age 72, you're going to have mandatory minimum distributions.

Randy Sams:
Those are called RMDS required minimum distributions that you have to start taking at age 72. But a lot of times your advisors out there will tell people that if you have your investment with us, you can take out 4% and it should last for a lifetime. Well, that's the way it used to be, folks. What happens nowadays is if you're taking out 4% and you get hit with a market downturn, it's known as sequence of returns. But I'm going to give you a couple of examples and see if you can. I think you know these questions, but I'll listen to this. If I have a client, folks, y'all play along. Carl didn't really have to answer. I'm going to give the answers, but I want him to kind of give me a thumbs up if if I'm doing right. So if I look at a client that has $100,000 to invest or they haven't invested in a 401k or an IRA today, and let's say the market downturns 10%. So they have a loss experience of 10%. How much gain do they have to or require to get them back even though you don't have to answer? I'm going to give you that answer. I see that look on your face.

Kale Simpson:
More than ten.

Randy Sams:
More than ten. Exactly correct. Okay. You're going to have to get 11% return now if you lose 20%, so you're in a 401k and your value right now is 20% less. Your gain required is 25%. If you lose 50% sKale. A lot of people think this is well, if I lose 50%, I got to gain 50%. No. If you lose 50% of your value, you have to gain 100% to get back a level. Now, let's throw a monkey wrench in this question. Let's throw in the 4% rule. So if you're withdrawing 4% and you lose 10% of your value, how much do you think you have to have an increase? How much gain is required to get you back? Just level that answer sKale is 16%, not 11. Randy Now take a listen to this. I got this from one of our sponsors, one of our carriers that we do business with. It is with American Equity, or they are an insurance company, an annuity company that we do business with. But this is one of their client pieces. This talks about market risk and what they're giving examples here. Kale They've got a withdrawal rate of 4% and 6% and then they have 4% of loss and then they have 4% of gain required over three years.

Randy Sams:
So here's what happened, folks. So you're retiring. Give me an example. We've got we've got two Bob's, we got Mr. Bob one and Mr. Bob number two, Mr. Bob number one and Mr. Bob number two. Both have 100,000. They both retire on the same day. They both have their money invested in the market. What happens then? They're going to withdraw 5% on an annual basis. But after 15 years, Bob, number one, his account values 105,000 944, even though he started with 100,000 and he's taking out 5% annually, he still has over 100,000, almost 106,000 in year 15. Unfortunately, Bob, number two, he only has $35,899 in year 15. The reason being tale is that they were both taken out 5%. But sequence of return hit bob number two harder than Bob. Number one because sequence of returns for Bob. Number two, I hope I'm not confusing folks. You lost money starting out. What's the market done the last year and a half? Couple of years it's going up or going down.

Kale Simpson:
It has gone down since the end of last year and gone down pretty steeply.

Randy Sams:
Randy So if you're in the retirement situation and you just started your retirement and you are taking money out and you're in this environment right now, what's the likelihood of you not having a whole lot of money in the next 15, 20 years.

Kale Simpson:
With sequence of returns? Randy It's probably going to be it's going to be high given the market environment if you're taking money out.

Randy Sams:
So listen to this. So the percent of loss, if you lose 10% and you're taking out 4%, the percent of gain required to get back to level over a three year period is 26%. 4%, 20% loss at a 4% withdrawal rate. Percent gain required over three years is 42%. So you can see how sequence of returns and the market risk has affected what folks are doing. And that's what we do is we like to sit down with folks and we like to focus on the risk that we're looking at longevity risk, the market risk. We want to talk about sequence of returns, but it's pretty crazy. So I'm going to finish with this one call. This is the big one. So 50% taking out 4% and you've lost 50%. The percentage of gain required over three years. Kale at a 4% is you have to gain 133% over that three year period. That's tough. I don't know of any investments that do that, but maybe there's some out there that we can talk about. Kale, you want to finish this up? You want to wrap this thing up?

Kale Simpson:
Yes, sir, I certainly will. And Randy, thank you. Thank you for going over those numbers. The data that you just gave our listeners is eye opening, to say the least, because people don't think about things like that, Randy, when they retire, retirement is supposed to be a time where we're not working and we're enjoying retirement because we've worked our whole life. But the reality is we've talked about it before. People think they're going to spend a lot less money in retirement than when they were working. Is that always necessarily the case? Of course not. They want to go on cruises. They want to take the grandkids to the beach. So we might need more money. And guess what? All the inflation statistics that we spoke about at the top of the broadcast costs more money. And so we need more money. And like you said, Randy, it may not be 4%, it may be five. Some clients may find themselves in a situation where where they need to take out ten or 12. Well, Randy, what happens if the market goes down 15% and you're taking out 12%, maybe a short lived retirement? I tell you what. But but anyway, guys, we're not here to scare you. We're just trying to educate our clients. Education is a key component to what we do at your American retirement. So, guys, give us a call. We'll go over custom scenarios in situations where we can actually tell clients.

Kale Simpson:
We guarantee you that you will have this amount of money guaranteed, this amount of money when you retire. And Randy, that's that's really, really helpful for a lot of clients. They can take a portion of their retirement account, put it in a vehicle where they have guarantees. And guys, when I say guarantee, it's a guarantee. It's in a contract. And if you can cover all of your living expenses, then guess what? Everything else is icing on the cake. You're okay. You can sleep at night. But guys, you don't know unless you call. You won't know unless you go to the website. We can try to get you an annuity 360 book out or talk to you and give you an outline and a blueprint. 866 990 7664. That's 866, guys. 9907664. Randy, let's wrap up the show on a on a high note I want to talk about this week in history we're getting right into summertime. The dog days of summer are right around the corner. Shark Week, the whole nine yards. But guys, let's talk about July 23rd. Is that today? My goodness. Today, July 23rd. Back in 1903, Randy Ford Motor Company sold its first automobile. The model. A 750 models of the vehicle were made from 1903 through 1904. Guess what? Was $800? The car weighed about 1200 pounds and it went a whopping 28 miles an hour.

Randy Sams:
You know, the good thing about that car, you could get it in any color you wanted to as long as it was black.

Kale Simpson:
You know, I had a client tell me that actually had a client that had an old model, which was or maybe it was a Model T, I don't know. But it was it was old and a really cool collector's item. But real quick on on the music side, some you guys might know this back in 1966, Frank Sinatra, Strangers in the Night, number one on the US album chart. It was a combination of pop hits, show tunes considered to be the bridging of the gap between classical jam oriented big band music and contemporary pop is pretty neat that single randy Strangers in the Night would become number one on the pop charts. While Summer Wind has made numerous films and television appearances in the years since its release, Frank Sinatra earned two Grammys, four for the album, exchanging glances, wondering in the night, what were the chances.

Producer:
We'd be sharing love?

Kale Simpson:
Before the night, only on your American retirement will we play some Frank Sinatra while giving you the week in history, guys. But, hey, if anybody saw the if anybody saw the home run derby earlier this week, saw Juan Soto walk away with the trophy and the million bucks, he's 24 years old. But guess what? He could hit the baseball a long way. Guys, to kind of wrap up the show here in just a moment. On July the 25th, on this date, July 25th, 1961, my guy Roger Maris hit four home runs tying the American League record for a double header, hitting four dingers but also ended that season. Randy, in 1961, how many home runs did Roger Maris hit in 1961? 40? No.

Randy Sams:
61.

Kale Simpson:
61? That's correct. Throw your curveball. Now, he he had hit, I think, somewhere around 40 home runs at that point in time, which was around the all star break typically, but ended up hitting 61 in 1961. And that record stood until you know who right.

Randy Sams:
Was it the babe? No, it wasn't the babe.

Kale Simpson:
Sam, you want.

Randy Sams:
To help it? Go. Give me a hint, please.

Kale Simpson:
See, I was. I was already thinking McGwire and Sosa, so it must have been before that. Oh, no. See? See, I'm messing with you guys. It's called a curveball. It's baseball. No. Yeah, no, you're absolutely right. No, the guy that played for the Braves, that's Hank Aaron. So he's the all time homerun leader. But anyway, in a season. Yeah, 1961. That was quite a feat back in 1961. Guys, that is the show. Your American retirement. Your American retirement on 101.1 FM. The answer, guys, it's been so good talking to you this Saturday morning, Saturday afternoon. Some of you guys look forward to talking to you guys in about a week or so. Stay tuned. Go to the website, give us a call. We look forward to talking to you guys soon. Thanks so much for listening. Bye bye.

Randy Sams:
Have a great weekend.

Producer:
Thanks for listening to your American retirement. You deserve to work with licensed financial insurance experts who can offer sound strategies for protecting and growing your hard earned money to schedule your free no obligation consultation. Visit your American retirement today that's your American retirement dot com not affiliated with the United States government Randy Samson and Simpson do 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. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

Producer:
Not affiliated with the United States government. The agent does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. A merrill life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

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