On this week’s show, Randy breaks down the common mistakes made by retirees that damage their financial health. Plus, he discusses the seven financial headwinds for American pre-retirees, and retirees.
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3.29.24: Audio automatically transcribed by Sonix
3.29.24: 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. Want to welcome you to your American retirement. Thank you for joining me on this Saturday morning. I hope you've had your, uh, first or second or third cup of coffee or whatever it is. Maybe it's hot tea. I don't know that you drink to get all those brain cells motivated and going on this Saturday morning. But listen, we got a jam packed show for you again today on tap. And don't forget to check me out on podcast form. You know, Apple, Google, Spotify or wherever you get your podcasts. You can also visit our YouTube page as well. You know where to go youtube.com and search for your American retirement and you'll see my smiling face. All right, so today I've got my Arkansas Razorback t shirt on. Uh, I know that, uh, you know, basketball's over, football's over. But we got baseball going on. So hopefully all you hog fans that, uh, like baseball, we've got that going. But hey, listen, shout out to all my friends, my family, and, uh, Saline County, central Arkansas. I just want to thank y'all for giving me, uh, a bunch of thumbs up on our YouTube page. We've got some great feedback from our listeners, um, around Central Arkansas again, you know, you're Faulkner County, Pulaski County, Saline County. I could go on, but we just want to thank you so much for joining the show and for telling your friends and your family about us because, you know.
Speaker3:
We love to help our listeners. We love hearing from our listeners, and we love helping our listeners. So please don't hesitate to call us. You know, the number (866) 990-7664 or go to the website, Your American Retirement, because we love meeting with you and discussing how we can help each one of you as far as your retirement goals, because. You know, our goal, our mission at Qmg Financial is we want to educate retirees and pre-retirees by providing valuable information. Education, as I call it, insights, helping you guys make informed decisions about your financial future. Because we understand that knowledge is power and we don't want you, our listeners or our clients to ever be powerless in retirement. Remember what it is a safe and secure retirement, not a risky retirement. So folks, listen, let's jump right on into the show. Today's show, we're going to talk about the financial headways of American retirees. We want to help you understand and navigate common challenges. But, you know, before we go into any of these subjects, we got to do the financial wisdom quote of the week. So, Mister Jim, if you'll cue up that financial wisdom music, we're going to jump right into it.
Speaker4:
And now for some financial wisdom. It's time for the quote of the week.
Speaker3:
All right. Financial wisdom quote of the week. A simple fact that is hard to learn. Is that the time to save money? Is when you have some. Now that makes sense, does it not? A simple fact that is hard to learn is that the time to save money is when you actually have someone that is given to us by Mr. Joe Moore. All right. Thank you so much for that, I enjoy that. If you don't have any money, it's kind of hard to save money in it. But what is it that we do at your American retirement? We want to help you save for retirement. We want to take that stress away as far as financial stress away. So let's talk about seven financial headways for American pre-retirees and retirees. All right. Number one headway. Baby boomers withdrawing required minimum distributions. That's RMDs is creating downward pressure on US financial markets. Now those of you if you're taking your RMDs, if you don't know what an RMD is, if you have a tax deferred plan, a 401 K, a 403 B, or you have an IRA. They make us when you hit a certain age. And we'll talk about that in just a little bit when you hit a certain age. The IRS. Says that you have to start taking your minimum distribution, so you have to start taking money out even if you don't want to.
Speaker3:
They make you start taking money out. At least pay taxes on what that RMD amount is. So the number one headwind I may have said that wrong. Seven financial headwinds, wind headwinds for American Pre-retirees and retirees. Okay, so why is this happening? Prior to 1980, 92% of retirement savings plan contributions were to company managed pension plans, better known as pensions or defined benefit plans. But the introduction of the 401 K in 1980 led to the largest expansion of the history of US stock market. Okay 401 K is known as a defined contribution plan. Now, the first generation of regular contributors to 400 and 1KS are retiring and reaching the age for RMDs. Now, some of you may have been taking RMDs for quite a while now. All right. Because up until I think it was 2020, the age to begin, start taking your RMDs required minimum distribution was age 70.5. It increased in 2020. There was 2021. It increased to age 72. And then again in 2022, it increased to age 73. So now if you have a 401 K plan and you're 65 years old and you're about to retire, but you want to let that those funds grow, or you want to transfer those funds over into, say, a guaranteed lifetime income annuity or a growth annuity, whatever it might be, you can delay taking your RMDs to age 73.
Speaker3:
Okay. So age 73 is your new target. And I believe in 2034, 2035, that's going to increase to age 75. But we've got some time for that. All right. So here's what's happening. This is creating a trading environment where there are frequently more sellers than buyers as assets are sold off to meet RMDs. That makes sense, doesn't it? So if you have a 401 K or if you have a tax, a qualified tax plan, you know, deferred tax plan, uh, might be an investment through an investment firm or whatever. And you have to start taking RMDs. Well, if you don't have money sitting in a bank to pay the taxes off of that RMD, then you're going to have to sell off some of your account, some of your stocks, mutual funds, whatever it might be. Thus, that's where it's talking about. There's more sellers in the days market than are buyers as assets are sold off to meet RMDs. Now, folks, to give you an example, the 20 year Dow Jones Industrial Average as far as cumulative returns, remember, what I talked about in 1980 led to the largest expansion of the history of the US stock market between 1980 and 19 9919 year period, the Dow Jones Industrial Average increased by 1,270%. That would have been a good time to be in the market, wouldn't it? Okay.
Speaker3:
But it's not doing that right now. All right. Now let's look at number two. Headwind number two ongoing wars and global instability. The folks wars and increased government spending heavily on that government spending often lead to economic instability. As you know, this can lead to large fluctuations in the stock market, devaluation of currency and inflation. So retirees who depend on fixed incomes, pensions or investment returns may find it challenging to maintain your standard of living as the cost of goods and services rises. Right. What's that called? It's called inflation. And we're going to talk about why, you know, some of the causes of inflation and what and how it affects you as a retiree or someone who will soon be retired because during times of war and heightened government spending, where we're at right now, folks, they're spending like, I don't know, what would you call it? It's not their money. So they're going to spend it as they want to, but they're spending on military efforts or resources may be diverted away from social welfare programs that support retirees, such as health care, social security and other forms of assistance. This could lead to reduced benefits or increased costs for retirees who rely on these programs for support. And many of you that are listening today, you know that you're probably on Medicare, or you soon will be and you're on Social Security, or you soon will be.
Speaker3:
Both of those are affected by government spending. How much money are they giving away to other countries? We could go on. I'm not trying to get political on this show, but we got to we got to speak about that because we've got folks up in Washington DC right now that are just spending, and at some point in time they're going to have to face the music. They're going to have to face the fact that they can't keep spending more than they have coming in. And for me, you can't keep spending and sending billions and trillions of dollars overseas when you need to help your people right here in the United States. All right. So headwind, headwind number two, ongoing wars and global instability have a large and a huge effect because. We're going to go right back into. When we come back, headwind number three, which we're going to talk about the national debt. And that has a big, big plays a big, big part on the rest of these that we're going to talk about. Hey, listen, I don't want you to go away. You need to come right back. Because again, had win number three. We're going to talk about that one and the others in the next segment. You're listening to your American Retirement on 101.1 FM. The answer will be right back.
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.
Speaker5:
To let you.
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. Don't forget to check us out on YouTube page. On our YouTube page, remember, visit youtube.com and search your American retirement and look for my smile and face. There you go. See it now. You can't see it on the radio, but check us out on YouTube. All right, let's get back to headwind number three. $34.5 trillion in US national debt. Now, folks, it's probably more than that right now. But I know I believe it was around March 18th. That's what the national debt was. So $34.5 trillion and counting. Now, I want you to pay attention as we talk about this, because this section, this headwind has an effect. It affects what we're going to talk about next. All right. But let's address the national debt. So to address the national debt the US may have to increase taxes. Oh did I say that I'm sorry. But yes, somehow at some point in time, folks, it's going to have somebody going to have to make a hard stance. All right. We're going to have to either. Again, like I said, I believe that if they would quit sending all those billions and trillions of dollars overseas and start putting that back towards the national debt, putting that back in towards Social Security accounts, I think we could get we could at least get this thing stabilized a little bit.
Speaker3:
All right. But you got to keep in mind, we are currently living in a historical historically low tax time. Now get this. Excessive government borrowing can lead to inflation which erodes the purchasing power of retirees, fixed incomes and savings. So folks, listen, if you're retired or you're getting close to retire meant retirement, if you continue to elect and support politicians that will not address the national debt. What I mean by that is make some hard decisions. We're all going to be affected by it. You are affecting your own retirement. Plus your affecting your children's and your grandchildren's future. So folks, if we keep putting people in Washington DC. Forgive me for going down this political road, but it's it's it's what we're talking about. This national debt must be addressed. And if we keep putting people in Washington DC that keep kicking, that can down the road, it's not helping you and me out. We're going to see the ramifications of this, and it's also affecting our children's and our grandchildren's future. Okay. Because. As I said before, excessive government borrowing can lead to inflation, which erodes the purchasing power of retirees. Fixed incomes and savings. High levels of national debt can undermine investor confidence and lead to market volatility, impacting retirees investment portfolios and retirement savings. Now, a large portion of government revenue now must be allocated towards servicing the interest on the national debt.
Speaker3:
Did you hear that, guys? We're not paying anything towards the principal. The government right now, the revenue is allocated toward servicing the interest only on the national debt. So diverting resources away from critical programs and services that support retirees. Now use yourself as an example. If you use a credit card, which I know a lot of folks do, and you go out and you put $1,000 on that credit card. And all you ever pay is when you get the credit card statement. All you ever pay is the minimum, which most of the time just takes care of the interest. How much are you actually going to ever pay on that thousand dollars? You're not you're not paying anything towards the principal. It takes forever to pay that off. So that's basically what's happening right now in in this country is as long as our government, with our national debt being as high as it is, all the payments are just going to pay off the interest that's owed. Okay. On the national debt, nothing is going towards the principal. All right. Headwind number four. Remember I said headwind number three affects what we're about to talk about because the headwind number four rising taxes. You have to understand that the national debt could lead to higher taxes. Any of y'all want that? Me? C raise your hands if you want higher taxes.
Speaker3:
I don't think I see any hands raised. Okay. Could lead to higher taxes in the future as the government looks for ways to manage tens of trillions of dollars in debt. All right. Now listen. Well, you have to realize a lot of folks right now we're griping about the tax rates. That we're having to pay. Right? But listen, it's important to note that historically, taxes are on the lower end. You're going to go, what? Randy, did you fall off him? Bump your head this morning? No, no, no. I'm going to give you examples. Actually, today we're paying lower taxes than we did in the in the past. And I'll give you an example. So there's plenty of room and historic precedent for taxes to go up. To give you an example. I'm looking at a chart that gives me the US income tax marginal rates from 1913 to 2011. You can't see it, but I'm just going to give you some examples. In 1943. Now, listen, if you made $100,000. In 1943, your tax rate marginal tax rate was over 90%. What is it? In 2011 it was just under 30%. So do you see the difference? And guys that was in 2011. For $100,000 in 1943 if you made 100,000. You were paying over 90% marginal rate tax rate. But some of you say, Randy, I don't make 100,000.
Speaker3:
Okay, let me give you some additional examples. If you made 60,000 in 1943, your marginal tax rate was 80%. How about 20,000? Randy I don't make 60,000. All right, well, let's take that down to look at 20,000. Okay. If all you've got is the average. Social Security check is around what, 17,000 or 17,000 $1,700 a month somewhere in there. Plus or minus a few dollars. That puts you over 20,000. But in 1943, making $20,000, your marginal tax rate was 60%. Now you have to look and see what it could be today. It may not be anything, may be zero, could be, you know, 5% or whatever. So do you see where we're at right now, today as far as what we're paying taxes, the tax rate, the marginal rate we have today versus what it was 80 years ago. Folks, they have room to raise it up, and we'd still be paying lower taxes today than they did back in 1943. So keep that in mind. Why is it important we have to address that national debt? Okay. Now headwind number five, lack of pensions offered in the workplace. Only 15% of private industry workers have access to a pension. A defined benefit plan, also known again as a defined benefit plan. According to the Bureau of Labor Statistics data, only 15%. This concludes or this coincides with a trend of more employers shifting to a defined contribution retirement plan, such as a 401 K 403 B.
Speaker3:
All right, so why does that affect us? So without a plan, without a pension, individuals may rely solely on personal savings such as your savings account, your checking account, Social security in their and other retirement accounts for income in retirement. Okay, so you've heard my story in the past before grandparents, great grandparents, your parents, maybe they used to go to work. They would stay at that particular job for 30, 40 years. They would retire and they had the peace of mind knowing at retirement they had that golden watch retirement party that they went off into the sunset. But you had a pension plan, a defined benefit plan. They knew based on a certain formula what they were going to have for the rest of their life. Only 15% can say that today. Now it's more on a defined contribution plan for one K. So individuals now bear the responsibility of managing your own investments and savings for retirement, i.e. 401 K, which can be challenging and may lead to inadequate preparation without the help of a licensed professional. Folks, when I meet with clients when I haven't, I'm having phone calls with clients and you'd be surprised. I know I am maybe not as much now as I was to begin with. When I would ask folks, do you have a 401 K? And they would say, yes, I do, Randy.
Speaker3:
And I would ask them, how much do you have in A41K? What's your 401 K balance? You'd be surprised how many times I got the response of. I'm not really sure. I haven't looked at my latest statement. I haven't set up the account online. Okay, so. You have to remember that pension plans often provide guaranteed income for life, depending on which option you may choose. Protecting retirees from the risk of outliving your savings but without a pension, individuals face the uncertainty of managing your income throughout retirement on yourself, especially as life expectancy increases, which is what longevity risk something we address when we do our retirement planning. So individuals without pensions may become overly reliant on Social Security benefits as a primary source of income in retirement, which will not be adequate to cover all expenses. Folks, social security was never created or intended to be your sole source of income. Retirees without pensions are more exposed to market fluctuations and investment risk, which can impact the value of your retirement savings and income streams. Folks, personal pensions is what we set up. Income. Annuities. Migas. Multi year guaranteed annuities. Take an interest as income. That's what we do. Hey listen we've got number six and number seven to cover. When we come back don't go away. You're listening to your American retirement.
Speaker2:
You're listening to your American retirement. To schedule your free, no obligation consultation, visit your American retirement.com.
Speaker6:
Time keeps on slipping.
Speaker7:
Technology is set to take another step forward in 2024. I'm Jim Pterobranchia for the Retirement Radio Network powered by Amara Life. There's an abundance of new gadgets that are set to make their tech debuts in 2024, and that's created a positive predicament for tech stocks. Altmeyer capital founder and CEO Brad Gerstner.
Speaker8:
I think that tech is going to continue to outperform Nontech in 2024. I think the setup is like you guys outlined this morning. We've got to see interest rates continue to roll. Those that will be dependent upon inflation continuing to roll.
Speaker7:
Companies have started rolling out new technology pieces in the virtual reality smartphones, tablets and video game sectors of the industry. The Apple Vision Pro, for example, has consumers already buzzing about its virtual reality capabilities, especially pertaining to sports viewing. A more affordable version of the Vision Pro is expected to be rolled out later this year. New smartphones will hit the market, with Samsung releasing its Galaxy S 24 and Apple debuting the iPhone 16. Both devices will have built in artificial intelligence with the capability to help users write emails, translate calls in real time, and edit photos and videos. Both phones are set to be released in the fall of this year. 2024 is shaping up to be a great year for technology, with exciting new gadgets poised to redefine the technology landscape for the retirement radio network powered by Amara Life. I'm Jim Tarabuco.
Speaker2:
Welcome to Nationwide's Peak ten fixed indexed annuity, designed to help provide guaranteed income for life. Peak ten offers protection against market losses, plus protection for a spouse through a joint option and an immediate 10% penalty free withdrawal. Call us now at (501) 249-2343. That's (501) 249-2343. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio. Are you anxious about retirement? Concerned that you could outlive your money? Randy Sams 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 (500) 124-9234 three. Or visit your American retirement.com. Are you interested in ways to protect and grow your hard earned money? Your American retirement is here to help. Here's Randy Sams.
Speaker3:
Hey, thanks for joining us on this week's edition of Your American Retirement. Be sure to check out the podcast version of our show on Apple, Google, Spotify, or wherever you get your podcast. All right folks, number six and number seven, headwind number six, rising health care costs. This is a big one. You got to realize what would you and your spouse do with 351,000 when you retire? And see folks that may sound like a nice nest egg, but you may need every penny of that 351,000 just to cover health care costs in retirement. That includes Medicare premiums and drugs after insurance pays its part. And that's according to a recent research. And that figure is conservative. And the research notes. All right, because folks listen. We're going to assume that you have Medicare Part A, which is hospital, Medicare Part B, which is medical Medicare Part D, which is your drugs, and you have a plan G, which is a Medicare supplement, which hopefully takes care of expenses not covered by Medicare A and B, such as coinsurance and co-pays. Okay. So basically what happens if you're looking at a 65 year old man, your average premiums and all that added over your retirement is $184,000. 65 year old female will need $217,000 in savings. So you add those together combined 351,000. And that's if the couple has expensive prescription medications. One of you have a illness that you kind of may cost a lot of money for that it's going to be an additional 62,000 raises that up to $413,000. You're going to need for your medical expenses during retirement.
Speaker3:
All right. So you got to look at this also a survey of senior living. Shows, monthly assisted living costs can reach over $8,000, and in-home care can total over almost 4000 $3,861. Folks, that's per month. I ask this question do you have long term care? What's your plan to cover these expenses? Why do I ask that question? Because 72% of those who are listening right now. 72% of folks that are aged 65 or older right now will need some type of long term care assistance. Okay, y'all have homeowner's insurance, you have car owner. You know, you have your car insurance. But 72% of the people that we deal with, you don't have it, but you're going to need it okay. So you got to plan. Headwind number seven. Rising inflation again. That ties back to what? Number three, which was the national debt. Inflation diminishes the real value of savings and investment, potentially reducing retirees ability to generate sufficient income to cover expenses throughout retirement. With longer life expectancies, retirees may spend more years in retirement. Longevity risk increasing your exposure to the effects of inflation, and the highlighting the importance of inflation resistance, income sources, and investment strategies i.e., what guaranteed lifetime income folks, you've heard me say it before and I'll say it many, many times after this. You do not retire on assets. You retire on income. We have to have that guaranteed lifetime income coming in to where we take that longevity risk off the table, where you know that no longer, no matter how long you live or no matter how long your spouse may live, both of y'all have that guaranteed lifetime income already set up.
Speaker3:
Okay, now, folks, that takes care of the seven headwinds that we gotta we gotta make sure that we look at during retirement because that affects us all. And again, if you're retired or you're thinking about retirement, I hope you took some good notes on those seven financial headwinds for you guys. All right. Let's look at our next deal. Hey how about some retirement red flags. Y'all like that? And again. If you've missed some of the show, you know that you can go back to our. Podcast. You know, wherever you get your podcast version of the show on Apple, Google, Spotify, or again, wherever you get your podcast, we're good. All right. Retirement red flags avoid these common mistakes made by retirees. Now y'all listen. We deal with these all the time. All right? Number one, red flag carrying a balance on credit cards. So, folks, you know, if you get to go to the ocean, there's a lot of people are going on spring break right now. And I've seen a lot of pictures on social media of people that are out there. But then when the weather's bad and the waves are bad and they got the undertow is terrible, they don't have yellow flags out. They have what red flags? When you see a red flag on the beach, are you to go in the water? No. These are retirement red flags.
Speaker3:
I want you to pay attention. Number one, carrying a balance on credit cards. So if you carry a balance on a credit card that can quickly and easily get you into further debt, it means paying high interest fees and therefore more money than you should remember earlier, we talked about right now, all the money that the government is paying towards our national debt is only taking care of the interest. If you have a credit card, and that's all you're doing right now is just taking care, making those minimum payments, taking care of the interest alone. It's going to take forever to pay those off, especially with some of the interest rates that I see. Okay, so retirees transition from a steady paycheck. Where's the paycheck come from? When the paycheck stops, you got to go from a paycheck to a fixed income. Paying off interest can become more difficult. The interest accrued can snowball quickly, depleting your savings during retirement. Number two collecting Social Security too early. While you start collecting Social Security benefits as early as 62. Collecting too early can be can significantly reduce your monthly payout. Baby boomers may be eager to enjoy retirement and think they should receive Social Security as soon as possible. However, waiting until full retirement age or even later can actually result in higher monthly payments, folks. So your Social Security, when you hit 62, you can hit that switch and you can turn it on, or you can wait till your Fra full retirement age, which for the majority of folks is either going to be 66 or somewhere in between that and 67.
Speaker3:
Okay. Or if you want to max out your Social Security, you wait to age 70. Because, folks, the benefit of waiting from 67 to age 70, your benefit increases 8% annually from 66.5 to age 70, or 67 to age 70. That's 8% guaranteed growth, folks, to age 70. And at that point in time, you've maxed it out. And optimizing when you begin collecting Social Security can make a big difference in total lifetime amount that you receive. So folks, the optimal strategy depends on your specific situation. But for some, this means waiting until age 70 to begin collecting Social Security. So folks, listen, I put together this little deal. I'm probably not going to have enough time to go over it. But here's what I'm telling you. If you take your Social Security at age 62, it's going to reduce your benefits. And I'm basing this on your retirement age of full retirement age of 67. It reduces your benefit by 30%. So as an example, if your full retirement age benefit at age 67 was $1,000 per month or 12,000 per year, if you take it now at age 62 versus waiting that five year period, it reduces that benefit down to $700 a month or $8,400 per year. But I know what you just said. But, Randy, I've got from age 62 to age 67 that I collect that benefit. That's right. And during that five year benefit period from 62 to 67, you will have been paid $42,000 based on that $700 a month or 8400 a month.
Speaker3:
Okay. But age 67 benefit is $1,000 a month or $12,000 a year, which means an additional $3,600. So how do we make that decision? Well, I look out in the future and I say we got to have a break even point. So if I take my benefit at age 62 and I take that $8,400 a year boom, boom, boom versus someone who waited to age 67 and their benefit is $12,000 a year, at what point in time does the person, at age 67 take another $12,000 a year benefit? Catch up and go ahead? Good question. At age 67, it takes 11.5 years. That basically works out to $138,000 during that 11.5 year period. And from that point on, you have now caught up. Do those people that are took their benefit at age 62, and they've been taking that benefit for 16.5 years now. Guess what happens? You're both at the same amount. You both have received $138,000. So at age 78.5, you break even or you catch up. And from that point on, you were either making $3,600 more per year because your benefit is 12,000 a year versus 8400, or you're losing that $3,600 a year because you started it at age 62. Does that make sense? So waiting to your full retirement age has a benefit. Because folks, if you live to be 8085. But you turned on your Social Security at age 62. You're losing that $3,600 every year. And that adds up.
Speaker3:
Adds up. All right. Let's look at number three selling investments when the market drops. Fluctuations in the market are inevitable part of investing. However, some people may panic during a downturn and sell their investments before they had planned. Some people have that knee jerk reaction, so this can be especially bad for retirees because you don't have the benefit of time on your side. You know that old rolling Stone song time? Okay, I'm not going to sing it anyway. When you get older, you can't wait for the market to return or to correct itself. Baby boomers who liquidate your investments when the market takes a hit, may lock in losses and miss out on potential future gains. A well-diversified portfolio and a long term investment strategy can help ensure a more stable retirement income. So, folks, you know what we use? We use the rule of 100. That's right. The rule of 100. So take your age. Subtract that take. Subtract that number from 100. And that's how much you should have in stocks and bonds or riskier investments, equities and the rest of it. So if I'm 65 years old, I should not have more than 35% of my retirement funds. In what I call risky investments, 65% should be in safe investments. So, folks, listen, we've got to cover about 3 or 4 more points. We're going to do that in the next segment. So please don't leave us. We've got some good stuff coming up. You're listening to your American retirement. My name is Randy Sams. We'll be right back.
Speaker2:
Miss, part of today's show, Your American Retirement, is available wherever you listen to podcasts and online at your American retirement.com.
Waiting in the rain as well. Wait again. You gave me your word.
Speaker1:
Do you need help understanding Social Security? Especially when it comes to spousal benefits? You're not alone. I'm Matt McClure with the Retirement Radio Network powered by Amara Life. Navigating Social Security can be confusing enough for one person as a couple. There are even more rules and regulations to remember. Here are some of the most important to help clear the fog. First of all, you can qualify for Social Security benefits as a spouse without any work history of your own. As long as you're married to someone who does qualify based on at least ten years in the workforce. Sylvia Gordon, also known as Medicare Mama, says the amount you'll receive will vary.
Speaker9:
The most you can get from your spouse's Social Security is 50%. Most people get less than that because they draw early.
Speaker1:
And she says you'll get the maximum benefit at your full retirement age. That's somewhere between 66 and 67.
Speaker9:
So your husband drew early and you're like, okay, I'm going to draw early, too. I want to draw at 62 two. Am I going to get 50% of my husband's? No. To get 50%, you have to wait till you are at your full retirement age.
Speaker1:
If you're drawing spousal benefits, you could get a big bump in your monthly payments if your spouse passes away before you do. That's because when one of you dies, one of the Social Security checks will go away each month, but the larger of the two payments will go to the surviving spouse. Do you have a plan for Social Security during your golden years? It's a key question to consider so you can get the most out of your retirement with the Retirement Radio Network powered by Amira Life. I'm Matt McClure, not affiliated with or endorsed by the Social Security Administration or any other government agency like.
Speaker2:
What you're hearing. You can watch the show to visit youtube.com and search your American Retirement to watch clips from this program.
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Folks, you're listening to your American retirement. Please join me every Saturday at 10 a.m. right here on 101.1 FM. The answer where little Rock comes to talk. And folks, I want to add this in starting, I believe on April the 7th, we're going to add another show on Sundays at 2:00 in the afternoon. So you'll be able to hear us on 101.1 FM the answer on Saturday mornings at our regular time, 10:00. And they're giving us another space on Sunday afternoon at 2:00. So just want to add that little make a little note. Tell all your friends and family were on two times on the weekend. All right, let's look at this. Paying too much in housing costs. So folks, these are effects that we have that my people we talk about this all the time. Some of the red flags that you are in retirement or you're getting close to retirement, hopefully you've taken some good notes. But right now, something that we talk about, clients say, should we downsize? That's something we got to look at. So paying too much in housing costs is a red flag. Because, you know, housing is a significant expense no matter what stage of life you may be in, especially difficult during retirement. Is your mortgage something that's going to be a burden to you? This is when some baby boomers who own homes may find themselves house rich but cash poor. That mortgage gets expensive, especially if you're on a fixed income.
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So maintaining a large house with high property taxes, utility bills, maintenance costs constrained limited retirement sources. So something to consider downsizing or exploring cost effective housing options can free up funds for other essential needs folks. I don't do these, but I know there are people that I've come across that have taken advantage of this, that little product or option called reverse mortgage. So if it's you and your spouse and you've already taken care of your kids retirement or inheritance or whatever, or you may not have children or grandchildren and it's just you and your spouse. Something to consider might be looking at a reverse mortgage, where they look at the value of your current home, and they can cut you a check, and you can live in that house, you and your spouse, as long as you live. Okay, I don't do those, so I don't talk about them because I'm not educated enough about them. But I do have I have run across folks that have utilized a reverse mortgage that has helped them out with their retirement funds. All right. So that's a little side note. Sorry I went down that rabbit trail, but I think some of y'all could at least look into that. All right. Having an unrealistic budget. Some people enter retirement with unrealistic expectations about your spending habits. Failing to create a detailed budget that aligns with your fixed income can lead to overspending and financial stress. Establish a realistic budget A budget that accounts for essential and discretionary expenses is crucial for maintaining financial stability in retirement.
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Folks, this is something that we talk about when we put together our retirement plan, because when we're looking at guaranteed lifetime income, we want to make sure that that income through that lifetime guaranteed annuity takes care of your basic expenses, living expenses, no matter what that might be, it might be 2000 a month, might be 5000 a month, but we need to set up that income stream for you and your spouse to have the peace of mind, knowing that no matter what happens in the stock market or what happens in the economy. We've got. Our basic expenses covered every month slash every year because we have a lifetime guaranteed income annuity set up. That helps with budgeting. Okay, now with that we also have to plan. Some people don't plan, but we need to plan for the unexpected in retirement. Unexpected expenses such as medical bills. Procedures or emergency care? Or what about home repairs or car repairs? Automobile repairs? You know, sometimes that transmission goes out. Sometimes we got to get a new car. Sometimes you have a hot water tank that goes out any whatever it might be, but emergency car or home repairs will occur. So taking these into account ahead of time can help you plan for them in your budget. If retirees don't have room in their budget for these unexpected expenses, or don't have an emergency fund to cover them, they could have to rely on credit cards or personal loans to pay for them, putting them into debt.
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When we do our retirement planning, when we put together all the paperwork, when we get your information down, one of the things that we always emphasize. He is. We want you to have an emergency account set aside. That emergency account should have a minimum of 6 to 9 months. Expenses. That's going to take a lot of stress away. If you guys back up to the Covid years, you know, there were several people that had to file bankruptcy. Several several people were stressed out. Why? Because they were living paycheck to paycheck. And if their business or their company shut down for two weeks or two months, or however long it might be. And they didn't have that paycheck coming in and they didn't have an emergency fund or emergency account set aside that they could continue to pay for their mortgages or their groceries or the utility bills, etc., etc.. A lot of people stressed out. A lot of people did some bad things. Okay, we want you to have an emergency account to plan for the unexpected. Not having a plan, not having a clear plan for managing expenses, investments, or unexpected costs can lead to poor decision making and financial instability. Seeking advice from financial professionals, slash advisors and creating a comprehensive retirement plan can provide the guidance needed to navigate the complexities of retirement.
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So folks, listen, we want to help you prepare for a successful retirement. Please contact me this week for a complimentary retirement and financial consultation. I'm going to provide you with a consultation. A comprehensive consultation at no cost, no obligation. You're only going to work with me if it's best for you. We're going to analyze, help you analyze your financial situation. We're going to discover exactly how much you're paying in fees and help you cut unnecessary costs in your IRA, 401 K, or any other retirement savings account. We could also help you with Social Security planning and determine the appropriate time for you to start taking those benefits. Also. Health insurance. Medicare. Medicare Advantage, Medicare supplement, prescription drug plans, and also long term care. So if you haven't heard from your advisor lately, please talk to me and get a second opinion I can help you set. I can help set you on the path, on the retirement, the right path on retirement. You've always envisioned yourself and your family. Remember, we want to prepare you for a safe retirement, not a risky retirement. So, folks, listen, thanks for listening to your American retirement on today's show. If you've missed any part of the show, go back on the podcast archives Apple, Google, Spotify, or whichever plan for playing platform you get your podcast from. Go out. Have a great rest of your Saturday. Have a great week. God bless. Go Haugs. We'll talk to you next week.
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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. Do you need to jump start your savings this year? I'm Matt McClure with the Retirement Radio Network, powered by Amara Life. Hardworking Americans like you are saving money every day, putting funds aside for things like vacations, a down payment on a new home, or building up an emergency fund. But millions of us struggle to make saving a priority. A recent survey shows just over 20% of Americans have more than $5,000 in their savings accounts. But experts say there are some things you can do to ramp up your savings and help you meet your goals. One is to refresh your budget, take a look at all of your bills and make sure you're not living beyond your means. Consider using a budgeting app to help make the process easier. Step two automate your savings social media influencer and financial author Vivian two, recently told The Today Show very few.
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Of us actually get paper checks anymore, so go into your Workplace's direct deposit form that you need to fill out and put some of it into your checking account, but put some of it into your savings account because you get to take advantage of the principle of out of sight, out of mind. You don't see the money, you don't spend it, forget it. Even makes it so, so easy.
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Step three set concrete savings goals. Spell out how much and what it's for. For instance, telling yourself save up $2,000 for a trip to London has much more of an impact than just saying save more money. So are you ready to pay yourself first? That's a key question to consider as you focus on your future with the Retirement Radio Network powered by Amara Life. I'm Matt McClure.
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Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal applied to your income benefit base. Call us now at (501) 249-2343. That's (501) 249-2343. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio.
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Fixed annuities, including multiyear. Guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.
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