How to Maximize Your Spending Power in Retirement

6.7.24: Audio automatically transcribed by Sonix

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

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

Speaker2:
Welcome to your American Retirement with your host, Randy Sams. Get set for a full hour of financial information and economic news affecting your bottom line. Randy works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here is your host, Randy Sams.

Speaker3:
Well, hello again, Central Arkansas. I want to welcome you to your American retirement. I want to thank you for joining me on today's show. Again, as usual, we have a jam packed show on tap for you all. And hey, don't forget to check us out. Check out the show on podcasts form. From where, uh, you, you know, Apple Goggle where Google Goggle can't even read Google, Spotify or wherever you may get your podcast. And yes, we also have a YouTube channel. So a YouTube page, you know, where to go to youtube.com and look for your American retirement. You know you hit the right spot when. What? You see my smiling face? See I'm smiling. Can you see it? All right, look, I want to thank everybody for joining me. Just like I said, I get a big, um, I guess a big. It lifts me up a lot to hear from, from our listeners, people like yourselves that are listening to the show. Uh, I get a chance to have a phone conversations and chances to meet, uh, you guys face to face whenever you all, you know, something that we've spoken about or you're getting close to retirement, or maybe retirement is 10 to 15 years out, but you realize that the best time to start is win now. And, uh, we get together and we're able to set up a plan for yourself, your family, you and your spouse to make sure that your retirement is what a safe and a secure retirement, not a risky retirement.

Speaker3:
So folks, a little bit about what we do. Again, my name is Randy Sams. This is your American retirement. My company is SMG financial. We've been in business for 38 years. I'm a big believer in guaranteed lifetime income. If you've listened to the show over the last couple of years, you know that at some point in time in the show, we are going to talk about guaranteed lifetime income, and we make that happen for you and your spouse, you and your family. Via. Annuities. I love annuities. That may be a bad word for folks that are making money off of your investment. All right, whether it goes up or down, they're still going to make money off of your investments. I don't believe in a lot of that. Risk is risk. If you're willing to take it, that's fine. But what I believe in, I believe in safe money investment, safe money products, and the safest out there that I can consider as far as you being able to not lose any money and still make money and draw a guaranteed lifetime income is an annuity. So guess what June is? You're listening to this show on June the 8th.

Speaker3:
June is annuity awareness month. And like we say, you know what my what our objective is at Qmg Financial, we want to educate and prepare our listeners, our clients for what a safe and a secure retirement. I've already said it, and not a risky retirement, but June is designated as Annuity Awareness Month, encouraging education on how annuities can fit into your retirement planning. This month, we're going to share a variety of resources and information to help you, our listeners, better understand annuities and explore how the right kind of annuity can be a great asset to your retirement portfolio. Folks, you need to diversify. An annuity is the only product out there that can give you a guaranteed lifetime income. Paycheck. That's what I call it. It's an income stream. It is a guaranteed paycheck. All right. An annuity is an insurance product that provides steady and predictable income for life or a chosen period for ten years, 15 years, 20 years. And it gives you a guaranteed interest rate and protection from stock market volatility and crashes. Zero is your hero. You get to participate in the upside, and you don't have to worry about when it goes negative. An annuity. Folks I don't refer to annuities as investments. An annuity is a risk transfer product. We're transferring the risk of running out of money.

Speaker3:
Longevity risk sequence of returns risk market volatility risk. We're transferring that risk from off of our shoulders and putting that risk now it's on the insurance company. And believe me folks I've looked at my resources, my checking accounts, my savings accounts, my retirement accounts and the insurance companies that I work with. They have a whole lot more zeros behind their numbers than I do. Okay. Very safe insurance companies that we deal with financially sound insurance companies. So we transfer that risk of running out of money off of us and put that onto the insurance company via the income annuity. All right. Uh, USAA survey survey finds that on the went through, retirees, uh, did a little survey for retirees on retirement and annuities. And this is what they found. 58% of adults recognize an annuity as a retirement savings and income strategy, while 42% are unclear about what an annuity is. And I'll be honest with you, I've had a lot of people that have started off the conversation and they'll say, Randy, we listen to your show. We kind of like the sound of that annuity, but we don't really know what it's all about. So we have to spend a little bit of time doing what talking about annuities and explaining how they work. I'm going to be the first one to tell you folks, if an annuity is not the best product for you, it might not be.

Speaker3:
I've had to get up and walk away. Of course I've made friends and they've helped me out with referrals. But sometimes an annuity is not the best product. It really depends upon your objective. Because you remember what I've told you before, we do not have a one size fits all retirement plan. We don't have a cookie cutter retirement plan. What I did for Mrs. Smith or Mrs. Jones or Mr. Johnson last week or yesterday is not going to be the same plan that I do for you today or tomorrow. Why? Because your objectives may be totally different than theirs. So that's what we have to do. We have to get together. We have to sit down. We have to do a portfolio review and analysis and take a look at what you have, listen to what your objectives are, and then we'll be able to put together a and design a product, a, a plan, a retirement plan based on your objectives, not, hey, let me pull one out of my suitcase or my briefcase that I did last week and do the same thing for you. It doesn't work that way. It's based on what you want and what you need and what your objectives are for that annuity to do for you.

Speaker3:
So anyway, 40% are, uh, of adults that were surveyed are concerned about retirement savings. So folks, that's what I do. So nearly half of generation X and millennials, those are ages 35 to 54 believe they will never be able to afford retirement. That's safe. That's sad okay. That's why you need to give us a call (866) 990-7664 or go to the website Your American retirement.com. Leave us your contact information and let us help you reduce the risk in your portfolio and establish a personal pension that. Creates a lifetime income stream with one simple strategy through the via the income annuity. So be sure to listen to our show this month. Tell your friends and your family to learn all about how annuities can power your retirement. So folks, that's a little bit about what we do. Again June is Annuity Awareness Month. So you know that any show you listen to pretty much over the last couple of years, we always talk about annuities, guaranteed lifetime income. But we're going to put a little bit more emphasis on it in June because it is Annuity Awareness Month. All right Mister Producer Jim, you guys know that we cannot start the show off without what the financial wisdom quote of the week. So, Jim, if you will cue up the music, we'll get the quote of the week started.

Speaker4:
And now for some financial wisdom, it's time for the quote of the week.

Speaker3:
All right. Thank you, Mr. Producer. Jim. I appreciate everything you do to make me sound better. I wish you could help me look better on the podcast or the YouTube, but you do a great job, Mr. Jim. Producer. Mr. Jim is my producer. He's been with me for two years now. He does a fantastic job, like I said, makes me sound a whole lot better than I probably do. Out again. I wish he could make me look a little bit better, but that's what it is. My mom has always told me that I have a face made perfect for radio, so thus I'm on the radio. All right. Financial quote, financial wisdom quote of the week I don't make jokes. I just watch the government and report the facts. As you know, there's a lot of comedians. If you used to watch Johnny Carson, all the rest of them, even some today, I don't I don't watch any of them, uh, on today's TV. But, uh, I know that Johnny Carson and a lot of them used to they used a government, whether it be the president or, you know, whoever it might be. They make a lot of jokes about it. But this is given to us by Mr. Will Rogers. And again, I don't make jokes.

Speaker3:
I just watch the government and report the facts. A lot of things are going on today. Uh, I don't know if you don't laugh at them. It might make you cry. Right? Because a lot of things that are happening in Washington, D.C., and actually locally. Here in the state of Arkansas. Uh, kind of makes you concerned, doesn't it? But, folks, again, that's why we do this show because we're in this business to be able to educate and to be able to prepare you as a listener to do what? Have a safe and a secure retirement, not a risky retirement. I think I've already said that 4 or 5 times in the day. Show may say it 4 or 5 more, because that's something that we believe in, folks. That's our foundation. We believe in this. So what the government does, if you remember last week's show, I believe we spoke about 2024 is what an election year. And remember, elections have consequences. And how you vote can and will affect your retirement years. So folks listen talking about the government and how they can affect your retirement years, you come right back because we're going to talk about Social Security and Medicare funding challenges. You're listening to your American retirement.

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

The poor girl like me.

Speaker2:
Visit your American retirement.com to schedule a free consultation with Randy today. And now back to the show.

Speaker3:
Hey, welcome back to your American retirement on 101.1 FM. The answer where little Rock comes to talk. Please don't forget to check out our YouTube page again, visit youtube.com and search for your American retirement. And as always, you know you get the right spot when you see my smiling face. All right. Social Security and Medicare funding challenges. Now, folks, those of you who are in retirement, those of you who may still be working and paying into Social Security, Medicare, I know you have some concerns. I meet with you and I speak with you every day. So I know we all have concerns about what the future may hold. So we're going to spend a little bit of time on today's program, and we're going to talk about Social Security and then a little bit about Medicare, because the funding of those two programs affects how the future is for your retirement and for my retirement and for anybody else listening to this show, you see, the timeline to replenish Social Security is being extended. That sounds like good news, but listen, the federal retirement program said Monday. It may not need to cut benefits until 2035. That gives one extra year. So it's good news, but yet it's, you know, I've got good news and bad news. The good news is we're extending it one more year. But the bad news is it's only one more year that we're extending it. All right, so that's one year later than previously forecast because of stronger performance by the US.

Speaker3:
Probably a little bit more being paid in taxes, whatever the new projection from the Social Security Board of Trustees annual report. It's good news for the program. 70 million beneficiaries. The commissioner of Social Security, which is Martin O'Malley. Told us that. And in a statement, he also said. Even so, he urged Congress to take steps to shore up the program to ensure it can pay full benefits into the foreseeable future. All right, so if they extend it now to 2035, this is 2024. So that gives us 11 years. So even if Social Security trust funds are depleted, the program will still have revenue from payroll taxes. Benefits still go out though they may be reduced. So we'll talk a little bit about that just a little bit. But just think folks, those of you who are on Social Security right now, especially if you turned on your Social Security before your full retirement age. Would you be able to take a reduction? I know a lot of people that I meet with. Social security is their main source of income. They don't have a pension. They may have a small 401 K, but they don't have a lot of money or a small IRA. They may even doing some part time work. But if you're Social Security is let's say $1,200 and they reduce it by 20%, that's going to put you down below $1,000 a month.

Speaker3:
That's inflation's not going down folks. Inflation is going up. So Congress could fix the problem by raising taxes that support Social Security reducing retirement benefits or some combination of the two. Now listen 75% of adults ages 50 and up believe Social Security will run out in their lifetime. And that is according to a 2023 Nationwide Retirement Institute survey. So, folks, I want to spend just a little bit of time I pulled an article because a lot of y'all have questions. I know this because when I get phone calls or when we meet and we spend a little bit of time, when I said a little bit, we spend time on Social Security, we spend time on Medicare, we spend time on your guaranteed income. So it's kind of like segmented. But we're going to talk about Social Security if we have that face to face, if you haven't already turned it on and when might be the best time for you. But the concerns are from that I hear from people. He is. Are we going to have Social Security in ten years? 11 years? What about 15 years? What I just read from you or to you, it says what? We got good news that they extended it from 2030 for being depleted one year to 2035. That's good news. But still, 2035 is only, what, 11 years from now.

Speaker3:
So listen to this. This is one of the main reasons that I tell people why you're seeing Social Security benefits. In in trouble should say okay with the with a, I guess down the horizon 2035 with the possibility of the funds being depleted. And this is one of the main reasons why the ratio of workers to Social Security beneficiaries is at a low and projected to decline further. Now, folks, this article I pulled is from August 4th, 2022. So it's almost two years old right now. Alright, we're in June, so only a couple of months. So listen, Social security has been a cornerstone of economic security for almost 90 years, but the program is on unsound footing. Social Security's combined trust funds are projected to be depleted by 2035. Now, that was 13 years from 2022. So now it's 2024. Now let's say 11 years from now. So a major contributor to the unattainability of the current social Security program is that the number of workers contributing to the program is growing more slowly than the number of beneficiaries receiving monthly payments. In 1960, folks, listen to this. In 1960, there were 5.1 workers per beneficiary. That ratio has dropped to 2.8 workers today for per beneficiary. Now, folks, 2024 is what I refer to in any of any of those folks that you may talk to that are in the financial planning retirement planning industry, 2024 is peak 65.

Speaker3:
And what I mean by that is there are over 12,000 baby boomers turning 65 every day now for about the next couple of years. Up until 2024, it had been around 10,000 per day. So all of the baby boomers. Over the next couple of years that just jumped from 10,000 to over 12,000 per day, turning 65. So if we use 65 as the magic number to turn over Social Security, you can see that you got 12,000 people a day flipping that switch. Now, in reality, you and I both know that we've got people that when they hit 62, they're flipping that Social Security switch on. They're not going to wait to 65, and they're definitely not going to wait to age 67. And we also know that we do have people that wait until their full retirement age. And their full retirement age could be anywhere from 66 to 67. All right. But the main contributor to the issues that we're having, again, in 1960, there were 5.1 workers per beneficiary today, and that was in 2022. That is down to 2.8 workers per beneficiary. So it says by 2034. The last year before funds are expected to become depleted again. We got good news. It's going to last through 2035. The Social Security trustees expect the cost will exceed income. In other words, what they're paying out versus what they're taking in will exceed income by $437 billion. That's billion B okay.

Speaker3:
As in boy billion. So when the trust funds are depleted, benefits will be limited by the income assigned to the program. And absent changes to law, benefits would reduce by 20%. So if they don't make any changes, folks benefits will be limited by the income assigned to the program and absent any changes to the law. So if they don't do anything between now and then, benefits could be reduced by 20%. So those of you who are on Social Security right now, especially if you turned on that Social Security at age 62, which is the lowest that it can be, it's 30% lower than your full retirement age benefit. Could you extend a 20% reduction or 25% reduction in your benefits? Most people can't. So listen. How can we sustain Social Security? So there are some variations as to what researchers believe the minimum ratio of workers to beneficiaries should be. Ranging from 2.8 to 3.3, but all analysis warned that its current decline signals an unstable source of funding for Social Security. Because it's more difficult to change the components of the ratio itself, the program could be reformed to ensure a sustainable future. So here's the good news there are many available solutions to ensure Social Security solvency. Raising the retirement age could be an option, decreasing the program's benefits that's an option, or increasing revenues dedicated to the program. Or pursuing all in a combination would likely provide the most lasting and least painful adjustment for the future.

Speaker3:
So if we did a combination of all those, for example, if the federal retirement age was raised to age 70, it would decrease federal outlays by 72 billion over the next several years. So if they raise it from your full retirement age of being 67 to age 70, they say that they would save over 72 billion. An example of a way to reduce benefits would be to link payments. To average prices rather than lifetime earnings. Big difference. You what you've paid in is based right now is based on your earnings over the highest 35 years of your earnings. Now they're saying if they make that adjustment and and base the payments on average prices rather than lifetime earnings, it would reduce the outlays by 69 billion over a ten year period. Lawmakers could also raise the tax rate or adjust the cap on income subject to payroll taxes. As an example, the current maximum taxable amount for Social Security on your income is 147,000. So your Social Security is your your income is taxed for Social Security benefits up to 147,000. So if you make over that anything above 147,000, those Social Security taxes are taken out. But the CBO estimates that subjecting earnings above 250,000 to payroll tax could raise more than. Listen to this $1 trillion in revenues over a ten year period. So if they continued to withhold Social Security taxes out of your paycheck right now, it stops at 147,000.

Speaker3:
But if they raise that up to 250,000, all of those folks that are making above 147,000, maybe make it well over 250,000 a year. They say that it would raise more than $1 trillion over in revenues over the next ten year period. Okay, so Social Security is the largest single line item in the budget of our United States budget and a key driver of the national debt. It's also an essential component of our economy and society, regardless of what policies lawmakers choose. If reforms are not enacted soon, recipients could see a large decrease in their benefits because millions of people depend on Social Security. I'll meet with them and speak with them every day. Lawmakers need to ensure that benefit payments are adequate for individual financial security and also, but also sustainable to ensure the program's solvency. So folks, retirement experts agree. So it makes a difference for when you turn on that Social Security. Okay. So retirement experts agree on the value of delaying Social Security benefits unless a personal reason, such as lack of income or poor health condition, prompts a need to start benefits early. So folks, listen, y'all come right back because we're going to talk a little bit more about Social Security full retirement age examples. And then we're going to talk about Medicare's go broke date. You're listening to your American retirement. We'll be right back.

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

You go again, you say. We want your freedom.

Speaker2:
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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.

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

Speaker3:
Hey, thanks for joining me today on this week's edition of Your American Retirement. Be sure to check out the podcast version of the show on Google, Apple, Spotify, or wherever you may get your podcast. Okay, folks. Again, we've been talking about Social Security. Uh, the good news is that they're now telling us that Social Security funds will not be depleted in 2034. They've given us one extra year to 2035. That's the good news. What's the bad news? It's going to be depleted in 2035. So there's going to have to be some changes. We spent the last segment of the show talking about why and how Social Security has gotten into this point. Folks, the biggest reason that I see is, number one, it's been misused up in Washington, D.C. they've used it as their own personal kitty. Now, look, I'm going to be honest with you, and you can take this as being political. I'm not. I I'm in the financial side. Okay? I'm in the financial business. I look at this and I say, they're telling us that Social Security and Medicare may be depleted in the 2030s, 2034, 2035, whatever that date may be. But listen, they don't have any issues with cutting a check, $1 billion check, $100 billion check, and sending that overseas to countries that probably hate us. So here's my deal. If we come up with all these ideas that we spoke about in the last segment, that will save us $400 billion or, you know, a $100 billion or even $1 trillion over a ten year period.

Speaker3:
If you can cut a check for 100 billion and send that overseas to a country, that that money's probably never going to be seen by the people that we really want to help, but it's going to be taken advantage of by the powers to be. And most of those people, you hear them and you see them on TV chanting, Death to America! There's a lot of things that could happen right now without any changes being made as to the sending of that money overseas. Put that deposit into the Social Security account. All right. That's just Randy Sams being as honest as I possibly can. Not trying to be political, but guys, we can fix it without inflicting a lot of pain on those of you and those of us who may be taking Social Security later on. But anyway. I digress. So let's talk about what is your full retirement age? A lot of people that I meet with are not aware. They think when they hit 62, the first thing they need to do is just turn on Social Security, and that might be the best situation for you folks. But you got to realize, the longer that you wait, the more Social Security benefit that you're going to receive. Someone who was eligible for $2,000 a month at age 67. Let's just call that their Fra for retirement age may instead only get $1,400 per month if they claim at age 62.

Speaker3:
So you see the drop? Excuse me? You see the drop? And that is according to Bipartisan Policy Center analysis. But listen, waiting until age 70 would instead provide instead of $2,000 a month at age 67. If you can wait to age 70, your Social Security benefit for the rest of your life, every month will be $2,480 per month. Why is that? Because at age 67, if that's being if that is your full retirement age. From age 67 to age 70. They increase your benefits by 8%. That you can't go down to the bank and get them to give you 8% guaranteed interest. With the Social Security plan, if you wait every year that you wait to age 70, that benefit increases by 8%. So that's $480 more a month, almost $6,000 a year more annually. If you can wait to age 70 versus taking it at age 67. But it's all it's over $1,000 a month. If you wait to age 70 versus taking it at age 62, now that's $12,000 a year plus. Do you see why it's important for you to get together with me? And let's put together a social Security plan. I can run programs for you guys to show you exactly how the Social Security, when you turn it on, is going to affect your retirement. Affect it today, but especially how it's going to affect you in ten years or 12 years or 15 years from now.

Speaker3:
So when you decide to turn on Social Security. Has a big impact on how your retirement is going to look five years from now, ten years from now. Because I don't know about you, but when you turn 78 or 85 or whatever, I bet you that additional $12,000 a year, if you'd have waited to age 70 versus turning it on at 62, would make a big difference. It would make a huge difference. I guarantee you that the $6,000 a year if you waited from 67 to age 70. In 15, 20 years from now, we'll make a big difference also just because of inflation. But here's kind of an example of what your full retirement age this is, Social Security I refer to this as Fra. This is full retirement age. So listen, if you were born between 1943 and 1954, your full retirement age is 66. Guess what? The majority of you guys have already hit that full retirement age. If you haven't taken social Security, congratulations, because that's growing at 8% every year that you passed up to age 70, okay. Which would be what, probably this year. So let's look at 1957. So if you were born in 1957. Your full retirement age is 66 and six months, folks. Here's what happens. Beginning with 1955. Through 1959 will actually till 1960 or later it your full retirement age goes up too much.

Speaker3:
So an example, if you were born in 1954, your full retirement age is 66, 1955 66 and two months 1956 66 and four months. That's right. I think you got it now 1957, 66 and six months. Add two months every time. So a 1959. If you were born in 1959, your full retirement age is 66 and ten months 1960 or later, your full retirement age is 67. So that's what you have to look at. So again, full retirement age varies by your birth year. Uh, your full retirement age also affects how much you can earn from work without temporarily forfeiting part of your Social Security benefit. So if you turn it on early and you're still working, you may not get your full Social Security benefit. It's going to be reduced by a certain calculation. Now, you don't ever you don't lose it when you hit full retirement age, it's put back in there, but your Social Security benefits could be reduced. And guess what? When you hit your full retirement age, let's say 67, you can work and make as much money as you want to, but your Social Security is still going to be taxed. As a matter of fact, the gentleman that's in the white House right now, he was the one that voted. First of all, they voted to tax 50% of it. And then it was Mr. Joe Biden's vote that says now they can tax up to 85% of your Social Security, depending on what your income might be, even after full retirement age.

Speaker3:
So I meet with people and go, well, yeah, but when I hit 67, I can make as much money as I want to. Yeah you can. It's not going to reduce your Social Security benefit, but your Social Security could be taxed up to 85%. All right. And that's credited to the gentleman that's in the white House right now. All right. So are you concerned about Social Security at Psmg? We understand your American retirement. We understand that many of you are worried about the future cuts to Social Security affecting your retirement, whether you're in retirement or getting close to retirement or it's 10 to 15 years out. We want to provide you with a Social Security maximization plan customized with you and your spouse's benefit information. Folks, let me tell you what this does. We put together a report because I meet with too many folks that they don't realize that spouse's taking Social Security, the husband's taking Social Security, the wife is taking Social Security, and everything's great. You got two Social Security checks coming in every month. But did you know, are you aware of the fact that if one of the spouses passes away. So if the husband passes away first? The wife doesn't get to keep both of those Social Security checks. One of those checks is going to go away.

Speaker3:
Which one do you get to keep? You get to keep the larger of the two. So if the husband's Social Security check was $1,500 a month, but the wife's Social Security check was $2,000 a month, she's going to keep hers, but she's going to lose that $1,500 a month. So I have to ask the question. I asked the husband, and I asked the wife. So if the husband passes away and that $1,500 per month is taken away and the spouse is now. Having to operate on $1,500 less per month. How are we going to overcome that? I asked the husband and then I asked the wife, because the wife is the one that's going to be impacted because she just had $1,500 taken away a month, $18,000 a year, because you can't keep both those Social Security checks. That's what we do when we meet and put together a Social Security maximization plan. We put together a Social Security report for you and your spouse to show you different scenarios. What happens if this person passes away at this age or whatever, and how we can overcome that. All right, so that's the Social Security. Let's talk a little bit about Medicare. Medicare's go broke date. Alright. Hey, Medicare's go broke date for its hospital insurance trust fund was pushed back five years to 2036 in the latest report. That's good news. It's it now. It's also going back, thanks in part to a higher payroll tax income.

Speaker3:
See, there's your deal. It's pushed back. But why? Because they raised the payroll tax income and lower than expected expenses. Medicare is the federal government's health insurance program that covers people age 65 and older, and those with severe disabilities or illnesses. It covered more than 66 million people last year, with most being 65 and older. Once the fund's reserves become depleted, Medicare would be able to cover only 89% of the cost for patients hospital visits. All right. Hospice care and nursing home stays, or home health care that follow hospital visits, so only 89% of those costs. That's 89% of less of what they cover today. And Medicare doesn't cover everything, folks. It's more like an 80 over 20 plan. But here's a little caveat that I'll throw this in. You know, you heard all these, uh, all the big debate going on about the millions, 10 million, 12 million. However, it might be 15 million illegal aliens. They didn't come in the right way. They crossed the border illegally. All right. What are they getting? How are they getting their health insurance taken care of? It's right. They haven't paid into it. They haven't been working in the United States for any period of time. But when they get there, the government is giving them. And those benefits are coming. From what? Medicare. Now, do you think that's going to accelerate the depletion of the Medicare fund? Everybody should be nodding their head yes, like I am.

Speaker3:
Okay. But that's just another little caveat that I said before elections have consequences if you continue to elect the people that are in there right now in the white House, in Congress, in the Senate, whatever. And you continue to allow them to operate the way they're operating. You may see Social Security depleted quicker and you may see Medicare depleted. I'm not trying to be scary. I'm not trying to be doom and gloom. I'm just trying to let you see. Open your eyes. That how you vote? Is going to affect your retirement. It's going to affect my retirement and is going to affect the retirement of people that are younger than us. Okay, so Social Security and Medicare, there's some changes that have to take place. They may be unpleasant, but there are some things that need to take place. And again, like I said before. They're going to either have to raise the retirement age from 67 to 70. They're going to have to increase the Social Security payroll taxes, and they could increase the amount of income that those taxes stop at instead of 147,000, raise that up to 250,000. Okay. Now I want y'all to come right back because we're going to talk in the next segment. Maximizing retirements U shaped spending curve. You want to know what the U shaped spending curve is. Y'all got to come right back. You're listening to your American retirement.

Speaker2:
Miss. Part of today's show, Your American Retirement, is available wherever you listen to podcasts and online at your American retirement.com. See. 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. Like what you're hearing? You can watch the show to visit youtube.com and search your American Retirement to watch clips from this program.

Speaker3:
Hey, you're listening to your American retirement. Please join me every Saturday at 10 a.m. and Sunday at 2 p.m., right here on 101.1 FM. The answer where little Rock comes to talk. Again, thank you for joining today's show, Maximizing Retirements U-shaped Spending curve. Now you'll understand what that U-shaped is. All right. Most of you all think it's like a V. It goes up really, and then it goes down sharp. All right. So contrary to common belief that retirement spending is constant, retirees tend to have initially higher rates of spending, a dip in the middle years and an increased cost again towards the end of retirement, forming that U-shaped. So very quickly there are three phases to your retirement anybody's retirement. You're in retirement, you're getting close to retirement, you're 15 years. Y'all take notes. Here are the three phases of retirement. You got the go go years. You got the slow go years. And then you have the no go years. Everybody loves the go go years. Go go years is a there's high spending due to activity to an active lifestyle and big trips you see in the go go years folks, every day is Saturday. When do you spend more money? Usually if you're working right now, but on the weekends you spend more money. You go to Walmart or Target or you go shopping, whatever it might be, go to the grocery store. But every day in the go go years, every day is Saturday, every hour is happy hour.

Speaker3:
Okay, you're going on cruises, you're playing pickleball, you're playing golf, you're having a great time. You're enjoying your retirement. That's what you worked for. We wish every, every day and every year of retirement could be just your go go years. But we also understand that at some point in time from the go go years, we're going to go into the slow go years. Slow go years basically decrease spending as lifestyle becomes less active. I put it this way in the slow go years, you can still do everything you did in the go go years. You just don't want to. You don't want to go after 530 because some of you can't see very well after dark. You know, I'm talking to and talking about slow go years. You still are going to do things, but you just don't want to do them as often and you don't want to go as much. And then from the slow go years, we go into the no go years, spending increases due to health care, and long term care needs. The no go years basically mean you're probably not leaving the building until you're leaving the building, if you know what I mean. That's what we look at. So those are the three phases of retirement. How can you maximize your retirement spending potential? Number one, you need to have a smart vision for your retirement. Do you have a plan? You got to understand personal retirement goals and ensure alignment, especially if part of a couple folks.

Speaker3:
What did I say when we meet at SMC financial, your retirement, your American retirement, we don't have a one size fits all. We don't have a cookie cutter plan. We're going to sit down and we're going to put together a retirement plan based on your and your spouse's objectives. What are your expenses look like? That's what we do putting together that retirement plan based on your vision, your wants, your needs and your objectives. You got to manage your expenses as reducing fixed expenses like mortgages and other debts can provide financial flexibility. Which is especially important during market downturns. You see, folks, that's called sequence of returns. You know what I speak about the retirement of red zone. When is that retirement? Red zone is any is 5 to 10 years before retirement 5 to 10 years after retirement. When you hit those dates, 5 to 10 years of within retirement, your objective should switch from accumulation to what? Not lose. But I'm not saying you got to take the money and put it in a can and buried it in the yard. No, not at all. It's just that you have to reduce the risk. We can take a certain portion of your IRA or your 401 K. I'm working with 2 or 3 people right now that have just turned 60 years old. So that puts them over that 59.5 a year old threshold to where we can do what's known as an in-service distribution.

Speaker3:
What's an in-service distribution? Randy? Great question. In-service distribution allows you, while you're still working and you're still contributing to the 401 K, and your employer is still making their matching contributions. We can take because of the in-service distribution feature, we can take a portion 50%, 75%, whatever that you feel comfortable with. We can take that out of a 401 K or an IRA. Move that over into a guaranteed lifetime income annuity. Why would I do that, Randy? Well, because we can guarantee you 8% compound interest for the next ten years. Well, I'm not going to I'm not going to retire until I'm age 68. That's great. So take the certain amount of money from your 401 K or IRA. Let's roll that over. No tax penalties. No, you don't have to pay taxes on it. We're just doing a rollover or a transfer from your 401 K IRA into a lifetime annuity. Another qualified program. And we're going to let it grow for the next eight years at what guaranteed 8% compound interest. Can your money manager or your financial advisor guarantee you, in writing an 8% compound growth over the next 8 to 10 years? No, they can't. And can they guarantee you that zero is your hero? That you won't lose a dime? No they can't. That's why I love annuities. What is June Annuity Awareness Month? So we have to be able to manage your expenses. And we do that by looking at getting you some guaranteed income.

Speaker3:
Because if you have your money in the stock market and you're taking money out at the same time and that market drops, that's called sequence of returns risk, where you put yourself in a position to where you could run out of money. As I put it, you could see your retirement account hit zero before your blood pressure dies. We don't want that. All right. So you got to have an income plan. Just spend a little bit of time talking about that. Be careful about withdrawing your assets. Sequence of returns risk too quickly as this can affect your tax rates and Medicare surcharges. I have a lot of people that they say, well, I want to take the lump sum out of my out of my pension. Well, we can do that. You can take the lump sum out of your pension and put it into an annuity, and then make smaller withdrawals or put that into a guaranteed income annuity. If we do a comparison, the income annuity might pay you a a greater income for the rest of your life and your spouse's life versus what your pension might be offering. Because if you take a big chunk of money and you pay that big tax all at one time, it's going to put you in or you take that as income all at one time, it's going to put you in a much higher tax bracket. That's why we're saying it can affect your tax rates and your Medicare surcharges.

Speaker3:
And we can help you establish an income plan that includes guaranteed income, lifetime income I call them guaranteed lifetime paychecks, delays Social Security. Did we talk about that earlier? Yes we did. So waiting to claim Social Security can significantly increase your monthly payments, providing more income later in retirement. So, folks, here's what I have to do when we talk about Social Security. I have to take off those glasses to where people look at today. They're worried about today. And I understand that sometimes we have where there's nothing we can do about it, we have to turn it on early. But if there's ways that we can do a Social Security breach, if we can stretch that out from 62 to 67 or from 67 to age 70, believe me, you're going to love me when you five years down the road, ten years down the road, 15 years down the road, when you realize that because you waited from turning on that income stream, from Social Security, from age 62 to 60 7 or 67 to age 70, the amount of additional income you're making every month slash every year. Remember the example if you waited from 62 to age 70, it was over $1,000 a month difference. That's a big impact, especially when you add inflation increases over a ten year period. So that's why we talk about delaying Social Security. Sometimes it's not the best option for you, but we gotta talk about it.

Speaker3:
So. So if you can delay Social Security, you get in contact with us. We can talk to you about a Social Security breach and show you how you can wait from age 62 to 67, or 67 to 70 through a social security bridge, is what I call it. All right. Plan for long term care. If I were to ask a show of hands right now, I know if you're driving down the road or whatever, don't raise your hand. Don't take your hand off the steering wheel. But I know that 72% of the people that are turning age 65, that are 65 or older right now, listen to this. 72% of you will have some type of a long term care need between now and when you pass away. But did you know that very few of you? Again, if I ask for a raise of a show of hands, very few of you would raise your hand and say, Randy, I have a long term care plan. You don't. You got automobile insurance. But yet the the likelihood of you having an automobile claim is low. You have homeowner's insurance, but the likelihood of you having a homeowner's claim is low. And I'm not telling you you shouldn't. I'm just using those as examples. The majority of you listening today have automobile insurance and you have homeowner's insurance, even though the likelihood of you having a claim is very low. But the majority of you do not have long term care plan, even though the majority of you 72% at age 65 or older, will have some type of a long term care need between now and the time you pass away.

Speaker3:
So without insurance, saving a significant amount of money is recommended to cover potential long term care needs. So if you don't have a long term care plan, are you going to make that happen? That's why you have to give us a call (866) 990-7664 or go to the website Your American retirement.com. Leave me your contact information. Let us get together. Let us talk about Social Security benefits. Let us talk about your Medicare benefits, your Medicare options. And let's talk about what we can do to cover long term care and take that stress off of you. Again, remember, we want to transfer that risk from away from you over to an insurance company. So folks, I want to thank you for listening to your American retirement. If you missed any part of today's show, please go back in the podcast archives on Apple, Google, Spotify, or wherever you whichever platform you may get your podcast, you can go to your American Retirement Comm. We have every show on there in a previous show, so please go out of your listening on Saturday. Please go out and make it a great Saturday if you're listening. Sunday afternoon. God bless you. Have a great rest of your Sunday. Go out and have a great week. Go hogs! God bless. We'll talk to you next week.

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. 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.

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