In this week’s episode of Your American Retirement, Randy goes through the five financial rules Warren Buffett follows for a solid financial life. Plus, why are 1 in 5 baby boomers delaying retirement, and are American’s doubting retirement plans?
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6.30.23: Audio automatically transcribed by Sonix
6.30.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
Producer:
Welcome to Your American Retirement with your host, Randy Sams. Get set for a full hour of financial information and economic news affecting your bottom line. Randy works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here is your host, Randy Sams.
Randy Sams:
Hey, good morning, central Arkansas. My name is Randy Sams. I want to welcome you to today's show. You're listening to 101.1 FM. The Answer and the show is Your American Retirement. Again. My name is Randy Sams. I want to welcome you to today's show. Folks. If you've been listening to us, we've been on the air for over a year now. We've got a lot of good folks that are listening, a lot of good comments. We help people win with their money. People ask me, well, Randy, what do you guys do at SMMG Financial And I just ask you two questions and how you Answer them is basically going to tell you exactly what we do. Number one. Question How much guaranteed income do you currently have? Number two, have you eliminated the number one retirement risk from your retirement plan? You know what that number one retirement risk is It's called longevity risk. That's the risk of you outliving your retirement funds. Okay. At SMMG Financial, we want to educate pre-retirees and folks that are in retirement right now on your options on how not to outlive your retirement funds. All right. We want to go over the product so we're invest a lot of time in education. We believe in educating our folks, educating our clients or potential clients.
Randy Sams:
So we want to set you up for a safe and a happy retirement. A secure retirement, not a risky retirement. So, folks, again, we help people win with your money. So shout out to our local listeners. Hey, folks in Conway, I'm getting calls and folks that are leaving their information on the website from Conway. Uh, glad to know that the signal is going out that way. Beebe To folks in Beebe, Benton Bryant, as usual, and Little Rock. So anybody else say, if I didn't mention you, I'm not trying to skip over you. It's just that I know that I've gotten some reports, I've gotten some contact information from folks in those cities. So go to YourAmericanRetirement.com. Leave me your information. Just let me know that you're listening to the show again on 101.1 FM. The Answer we're Little Rock comes to talk. Or you can call me toll free. (866) 990-7664. Leave me that information and say, Hey Randy, I'm in Haskell or I'm in wherever hot springs and I'm listening to your show and we enjoy it every morning. Hey, we also have a podcast so you can listen to a little episodes. It's not the whole show, but we do have the whole show on the website, but the podcast YouTube channel, wherever you listen to your podcast, could be YouTube, Spotify, wherever.
Randy Sams:
So. Recent shows we've talked about annuities again, the month of June was annuity appreciation or Annuity Awareness Month. We'll talk a little bit about annuities today, but we've got some other subjects to talk about. So again, you can go to the website, Your American Retirement. Or you can see us on your favorite podcast station, Bender, YouTube, whatever it happens to be. But you'll see video highlights and special content. You can go again to your American. That's all you got to search YourAmericanRetirement.com and you'll see my smiling face. So hey, folks, don't hesitate to call us. So we love helping our listeners retire better. I've gotten several phone calls, especially over the past few weeks. Over the past years. Many, many, many phone calls, many good comments, many critiques, which I love, people giving me ideas. You know, what I'm concerned about is what? What you're concerned about. What is it that worries you when you put your head down on the pillow at night if you're thinking about retirement. All right. If you're getting close to retirement, what are your concerns? If you're in retirement, what are your concerns? Write them down. Shoot them to me, YourAmericanRetirement.com.
Randy Sams:
Because what we do, folks you see if you've been listening to the show. Because you're interested in improving your financial situation in retirement. Let me help you with some one on one attention. Simply give me a call or visit the website again. (866) 990-7664. Or Your American Retirement and I'd be happy to set. And meet with you personally. And provide a customized guidance and solutions based on your specific financial needs. Remember, folks, you've heard me say this before. I don't believe in cookie cutter retirement plans. One size does not fit all. So we've got a questionnaire that we're going to go through and I'm going to ask you questions, and then I'm going to be quiet and I'm going to listen to your Answers, to your responses. And we want to build a retirement plan based on what your objectives are. All right. You want to join the country club, you want to travel, you. Whatever it happens to be, you want to stay, spend time with the grandkids. That's what we have to do. We have to ask question and then we have to listen to your responses and then together. With your input, we can put together a retirement plan based on your objectives. A secure retirement, not a risky retirement.
Producer:
It's this week in history.
Randy Sams:
That's what we do. Hey, folks, you're listening to the show today. It is July 1st. Can you believe it? Man, is it hot here in Arkansas? Anyway, July 1st, I want to give you some little pointers here. July in history. Listen to this. Historic moment July 1st on this date in 1963, the postal. Us Postal Service instituted. The zone improvement plan code, better known as zip code. All right. That other is a mouthful, isn't it? Zone improvement plan. Code like zip code. I'll stick with that. It was created to make the mail more efficient in its delivery. About history and technology. Technology. On this date in 1979, some of y'all are going to remember this. The Walkman. I believe that was the Sony Walkman was created and released. Yeah. By Sony. See, right. There it is. At the time when production on the product stopped, Sony had built 200 million cassette based Walkmans. You remember those? All the guess the exercise videos that you would see. Folks would always have what they'd have that Walkman strapped to their waist and those ear plugs in their ears listening to the Bee Gees or whatever it happens to be, you know, whatever your favorite music was. All right. So that was on July 1st, July 2nd. A little bit of history. Listen to this. Folks in Arkansas can relate to this. On this date in 1962, American businessman Sam Walton opened the first Walmart store in Rogers, Arkansas. It's pretty neat, isn't it? July 2nd, 1962, The first Walmart store was opened by Mr. Sam Walton in Rogers, Arkansas.
Randy Sams:
The store would go on to become the largest retail chain store in the United States. And that's pretty, pretty cool. So y'all listen to this. Today is July the 1st. A little history on July, starting out the year starting out the month. Also, you know what? 4th of July is right around the corner, right? Hope you guys have your 4th of July plans. Just a little news and statistics for 2023. On 4th of July, little travel. More than 60% of surveyed Americans plan to travel for Independence Day this weekend, 60% of those surveyed. That's 155 million people, folks. The 155 million people plan on traveling. For Independence Day this weekend. So if you're traveling, hit the road and or arrive at the airport with plenty of time. So hit the road early. Arrive at the airport with plenty of time on Friday. The Friday of Memorial Day weekend, the Transportation Security Administration, better known as TSA, screened roughly 2.7 million people at US airports, the highest checkpoint volume in 2023. So, folks, again, we have 155 million people that said they're going to be traveling this weekend. So y'all be safe. We want you to have a happy and enjoyable 4th of July celebration. But we also want you to be able to come back to listen to the show next week. All right. So, hey, how about let's get the show started? Enough of the the history. We know it's July. You know, you can give us a call. We love you, listeners. How about a little financial wisdom? The quote of the week.
Producer:
And now wholesome financial wisdom. It's time for the quote of the week.
Randy Sams:
Drumroll, please. Never lose money. That's rule number one is never lose money. Rule number two. Never forget rule number one that was given to us by Mr. Warren Buffett. So Mr. Buffett was born on August 30th, 1930. He is chairman and CEO of Berkshire Hathaway, legendary value investors known as the Oracle of Omaha from Omaha, Nebraska, and is one of the world's most successful and closely followed investors. Mr. Buffett has amassed a personal fortune in excess of 100 billion. That's where the B billion dollars he's donated the vast majority of his wealth to the Bill and Melinda Gates Foundation. So again. Mr. Buffett gives us this week's Wisdom financial Quote of the Week. Rule number one never lose money. Rule number two, never forget rule number one. And I'm going to throw in rule number three. You know what? Rule number three is y'all better come right back because we're going to come right back and we're going to go into the rules that Warren Buffett rules by. So, again, you're listening to Your American Retirement on 101.1 FM. The Answer.
Producer:
Ms.. Part of today's show, Your American Retirement is available wherever you listen to podcasts and online at YourAmericanRetirement.com.
Producer:
Welcome back to Your American Retirement. Here's Randy Sams.
Randy Sams:
All right. Welcome back, folks. Thank you for joining us today on today's show. Again, it is July the 1st, early Saturday morning. It's probably going to be a hot one today. So make sure you take care of yourself. Make sure you hydrate, make sure you got your favorite adult beverage, iced tea, ice water. Stay cool out there. But anyway, let's let's heat up this show. You heard the financial quote, rule number one. Never lose money. Rule number two, never forget rule number one that was given to us by Warren Buffett. A lot of good wisdom from Mr. Buffett. We may not agree on a lot of the investment strategies, but I can't argue with his success. So it's a very, very smart man. So people listen to him. And again, you know, whenever we meet, my clients will tell you this. I never tell you to take all your money and put it into one egg. Okay. Into one basket. Don't do it. Diversify it. All right. I believe in eliminating as much risk as we possibly can. But that doesn't mean you have to take everything out of a stock market or an IRA and put it into like, an income annuity. That's your decision. That's something that we would work out together when we put together a retirement plan. But Mr. Buffett is a very, very, very smart man, very successful. Okay. But he's given us some rules, rules that Warren Buffett lives by and how to apply them to your own life and retirement plan.
Randy Sams:
So hope you've got your pens and paper ready. Take a little note. Five rules. All right. And how to apply them to your own life and retirement plan. Rule number one. You know what we just said? Never lose money. Protect a sensible portion of your assets from bank failures and stock market volatility. Now, folks, I agree 100% with Mr. Warren on that one. All right. Never lose money. I tell people all the time. You've worked too hard for too long to get where you're at today to lose. All right. From this point forward, your objective is not to lose. I agree with Mr. Buffett. Never lose money if you can help it. All right. So how can we put together a plan? That's what we're going to talk about. That's what we always talk about, right? We want to eliminate longevity. We want to eliminate as much stock market risk or volatility as we possibly can. That's what we do with our income annuities, our guaranteed lifetime income annuities. Okay. Use rule of 100 folks. We talk about we talked about rule of 100 a couple of weeks ago. So the rule of 100 basically is you take 100 and subtract your current age to determine the percentage of your assets that you could strategically invest in smart risk strategies. All right. In other words, a lot of you have probably heard a 60 over 40 investment portfolio or 5050. That's 50% in an equity in equities and 50% in bonds or 60% in equities and 40% in bonds.
Randy Sams:
Well, what we look at is that the rule of 100 if you're 60 years old. 60 -100 is 40 or 100 -60 is 40. So 40% should be, if you want to put it up to there, 40% should be in stock. The rest of it should be in safe money investments. Okay. If you're 70 years old, pretty simple math, 100 -70 is 30. You should have no more than 30% of your monies, your retirement funds in stock market investments or what I call riskier investments. All right. So, again, you can call me (866) 990-7664. I'd love to sit down with you and kind of go over the rule of 100 for you. Look at what your portfolio looks like and let's see if we can do some rearranging for you. So ask yourself, how much of my savings and am I willing to lose? That's a big one. That's one of the questions that we always ask. How much of your savings are you willing to lose? The majority of you are going to say zero. Okay. Rule number two. We just went over it. Never forget rule number one be informed. Do your homework. Trust but verify. So, Buffett Invest only in strategies he thoroughly researches and understands. He doesn't go into an investment prepared to lose, and neither should you. Here we go. Rule number three. If the business does well, the stock eventually follows. When Buffett searches for a stock to invest.
Randy Sams:
He he seeks out businesses that exhibit favorable long term prospects. Does the company have a consistent operating history? Does it have a dominant business franchise? Is the business generating high and sustainable profit margins? If the company's share price is trading below expectations for its future growth, then it's a stock he may want to own. So he does his research. Okay. We can help educate you on different smart risk strategies for growing your hard earned wealth. So don't be an emotional investor. Let us help you plan your work and work your plan. Rule number four. Given to us by Mr. Warren Buffett. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Like that one. So when the markets tanked during the 2007 through 2009 financial crisis, Buffett was stockpiling great long term investments by spending billions in names like General Electric and Goldman Sachs. Savvy investors seek companies that offer a durable product or service. And also have solid operating earnings in the ongoing potential of future profits. So finding the right investments at the right price with a margin for safety against unknown risk is the ultimate goal. So it's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. Rule number five. So our favorite holding period is forever. Forever. Guess that means you don't ever get rid of it, huh? How long should you hold a stock or other investment? Buffett says if you don't feel comfortable owning a stock for ten years, you shouldn't own it for ten minutes.
Randy Sams:
Even during times of volatility, Buffett has loyally held on to the bulk of his portfolio because he believes in the long term viability of his investments. Again, do not be an emotional investor. Being overly fearful or too greedy can cause investors to sell stocks at the bottom or buy at the peak and destroy portfolio appreciation for the long run. It's important to keep in mind why you are investing to protect and grow your wealth. We want to help preserve and increase the value of your assets so that you can thrive in retirement and leave a legacy to your loved ones. So those are Warren Buffett's. Five Rules to Live By. So, folks, let's kind of talk about this and see if we can weave those into what we do at SMC Financial. So stock market volatility up and down. When you're younger, you got plenty of time. Time is on your side. Remember that old Rolling Stones song, Think Time? I am not going to sing it because you guys would turn off the radio anyway. When you're younger, you have time for the stock market to to correct itself and to continue to go up, hopefully. All right. I know in 2008, when I was still employed in my 401. K, lost about 40% of its value. It took about 4 or 5, almost five years for it to just.
Randy Sams:
Get back to where it was in 2008. All right now. I was younger and I had that 4 or 5 year period that I could guess. I can work my way through it. I can allow it to. To work its way back up. All right. But when you're in retirement, folks, we don't have that luxury. Like I said, time is not on your side. If you're in retirement right now and you lose 30 or 40% of your retirement plan, be it a 401. K or an IRA or your stock portfolio, folks. That's going to hurt because we're not as young as we used to be and we don't have as much time to allow it to build itself back up. And God forbid, if you're taking an income. If you're making withdrawals from that 401. K or IRA. And you lose 20, 30, 40% of your value. Folks, you may never recover. That's called sequence of returns. When you're taking money out at the same time your value is decreasing. That's a double whammy, so to say. That's what we try to. Take advantage of. We try to get you out of that risk of the stock market volatility. Okay. A secure retirement, not a risky retirement. Should you take everything out of the stock market? Of course not. That's your decision, not mine. Remember, my focus is to set you up with the guaranteed lifetime income. And let's remove longevity risk. I want to be able to sit down with you.
Randy Sams:
And when we put the plan together, we both can put our heads on the pillow at night and sleep well because we know that we've addressed. Your most guess your your your highest expectations, your most concerns, what concerns you the most. And we want to take care of your basic expenses. And how do we do that? Guaranteed a lifetime income. Okay. That's what we want to do. So I agree with Mr. Warren Buffett on on a lot of the things that he has. Very smart man. Obviously he's worth $100 billion. He's done something right. But folks, I don't have an opportunity to meet with a lot of folks that have $100 Million. I'll be honest with you, I've never met with a client that has $100 billion. All right. But we want to sit down with you and we want to put together a retirement plan. Let's use that rule of 100 and let's. Set you up with a plan that is going to eliminate that risk, the volatility, stock market risk, inflation risk, longevity risk. And we can do that by calling (866) 990-7664 or going to the website YourAmericanRetirement.com. Leave me your contact information and let's set up a one on one consultation. Hey come right back folks. We're going to jump right into 1 in 5. Baby boomers are delaying retirement. Want to know why? That's what we're about to go over. 1 in 5 baby boomers will be right back.
Producer:
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. 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 (501) 249-2343. Or visit YourAmericanRetirement.com.
Producer:
With soaring inflation continuing to wreak havoc on everyday budgets, there's never been a more important time to cut costs. But do you know where to begin? I'm Matt McClure with the Retirement.Radio Network. Powered by a life. There is no question costs have been soaring.
Sharon Epperson:
About one third, 34%, say they are worse off financially this year than a year ago. Almost half, 46%, say they've had to cut household spending due to inflation.
Producer:
Cnbc correspondent Sharon Epperson recently reported on a survey that sheds more light on how inflation has been impacting us all. Even those who earn six figures a year.
Sharon Epperson:
These high earners say the first expenses to go are dining out at restaurants, entertainment outside the home and travel and vacations. More than half also say they'll delay big household purchases.
Producer:
That high inflation has led the Federal Reserve to respond with interest rate hikes. The goal is to increase costs to tamp down demand. Esther George is president of the Kansas City Fed.
Esther George:
Already we've seen the committee's policy actions lead to a very sharp tightening of financial conditions, but.
Producer:
It hasn't done enough yet and costs still keep rising. So what should you do? Well, we have a free resource called 23 retirement cost cutters for 2023. It's full of ideas to help you make the most of every penny. Things like take advantage of senior discounts, eliminate unnecessary subscriptions, and cut back on clothing expenses.
Sharon Epperson:
Look at your needs and wants, Figure out what's optional and what you can cut out.
Producer:
The last one on the list of 23 retirement cost cutters for 2023 is perhaps the most important. Seek advice from a trusted financial professional. That's the best way to get in-depth financial advice in retirement planning that's customized to you and your goals. Just make sure whoever you consult for financial advice has years of experience and credibility you can verify. So do you know the best way to cut costs in 2023? That's a key question to consider as our budgets get stretched to the max with the Retirement.Radio Network Powered by Life. I'm Matt McClure.
Producer:
Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.
Randy Sams:
Hey, welcome back, everybody. Thank you for joining us today. Again, it's July 1st. It is Saturday morning. It's going to be a beautiful day here in central Arkansas. Thank you for joining me. My name is Randy Sams. You are listening to Your American Retirement on 101.1 FM. The Answer, folks, let's jump right into it. This is something that I that I do deal with when I meet with clients. They're concerned about how much money they have to work with, how much money they actually need. Okay. So sometimes what happens when you get into retirement, you may still be working. Sometimes it's part time, sometimes it's full time. It just depends on what you've taken care of or prepared for before you hit that retirement age. All right. So we're going to go over 1 in 5 baby boomers are delaying retirement, and here's why. So amid uncertain economic condition, baby boomers. Aren't feeling confident in their retirement plans. In fact, folks, 70% of baby boomers expressed uncertainty over whether their retirement savings were healthy enough to carry them through retirement. And that's according to a study from retirement living. So, listen, 70% of baby boomers expressed uncertainty over whether their retirement savings were healthy enough to carry them through retirement. So retirement living also found that 69% of baby boomers are worried about potential recession. And that because of this, 22% of baby boomers plan on delaying their retirement. Okay. Most are planning to stay in the workforce for another five years or more.
Randy Sams:
Do you hear that? 22% of baby boomers plan on delaying their retirement and they plan on staying in the workforce for another five years or more. Americans are already working longer to save for retirement than they once were. Remember the old retirement age? Guess people always looked at as 65. Okay. I know a lot of people that retired a lot earlier than that, but that was just what your target was at age 65. I'm going to retire. So. A Gallup poll from last year, 2022, found that the age individuals expect to retire has risen. Aged 60in 1995 to age 66in 22, 2022. All right. So I guess in 1995, folks wanted to retire at age 60. Then guess Social Security didn't kick in to age 65. So guess they just enjoyed five years before they hopefully they had a good retirement plan put together. But last year, in 2022, that retirement age has jumped up, expected retirement age has jumped up to age 66. Okay. According to the study from retirement, living here is what respondents plan to do in order to better their retirement. Number one, decreasing spending 47%. Number to increase savings was 30%. Number three, investing safe assets. 26% continuing to work full time. 26%. Diversifying investments. 25%. Building up an emergency fund. 23%. Applying to part time jobs. 20%. So, folks. If you're out there and you're getting close to retirement or you've got a specific age that you want to retire.
Randy Sams:
What are your objectives? Do you want to have to continue to work? And I'm not slamming those who do. Folks, my mom is in her 80s and she still works three days a week. She wants to go to work because it keeps her active and she loves the people that she works with. All right. But that's her choice. She doesn't need to financially. It just keeps her going. It keeps her motivated, keeps her mind working. But three days a week, she loves going to work, talking and meeting with the folks that she works with. And then she comes back home. She doesn't do it five days a week, but those three days a week, she's having a good time. She's meeting with other folks. It keeps her mind active. So I understand there are folks that go back to work because they've run out of just being able to sit on the couch and watch whatever show you want to watch. The Price is Right or, I don't know, Oprah Winfrey. I don't know if she's still on any longer because I don't watch a lot of TV. All right. But getting a part time job sometimes is what you want to do, not because you need it financially, but because you need it mentally. It just keeps me active. And that's great. Okay. But if you have to have a job because of finances, then that puts us in a different situation.
Randy Sams:
So don't you think we ought to sit down and address that before retirement? And let's see where you're at today and where we want to be. What's our target? What's our target age for retirement and what's our target income? Remember, folks, you do not retire on assets. You retire on income. I've yet to sit down with a retiree or a pre retiree that is not concerned about income. You got to have that guaranteed paycheck coming in, whether it's through Social Security or whether it's through a pension or whether it's through a guaranteed lifetime income annuity. So, folks, what we do, we can take the monies that you have in your 401. K and we can set you up with a guaranteed lifetime income, basically a personal pension for yourself and your spouse for as long as you live. And when you pass away, your spouse will get exactly the same amount every month, every year for the rest of their life. All right, guys, that's called security. That's not called risk. That's called security. And that's what we do. So but I've met a lot of people because of inflation. You know, you have retired on a certain dollar amount. You have an income gap. Now, when you retired four years, five years, ten years ago, maybe everything was fine. But now the amount of money that you've got coming in, you're on a limited income. You know exactly what you've got coming in every month, slash every year, and you know what you have going out and there may be an income gap.
Randy Sams:
How do we address that? We don't want you going into retirement or in retirement with an income gap. We need to address that and that's what we do. So having to work, there's nothing wrong with it wanting to work. Fantastic. All right. But wouldn't it be great to know, you know, your plans when you're working, your plans while you're accumulating, you're in the accumulation phase of your retirement. In other words, you're building that nest egg or that retirement fund. You know what your goals are, man. You want to take trips, you want to take cruises, you want to join the country club, you want to play golf, you want to play tennis, you want to play pickleball. Every day is Saturday. Every hour is happy hour. But what happens is, is when you get to retirement, all those plans are set aside. Because of what? You're stressed out because you're concerned about running out of money. That's what we want to eliminate. Let's take that stress away from you. All right? Here at SMMG Financial, Your American Retirement. Folks, we want to set you up with a plan where. Your blood pressure hits a zero before your retirement account does. You think about that? Okay. We don't want you to outlive your retirement. So, please, if you're tired of worrying about your future and you're ready to chart a course for a tax efficient retirement, simply pick up the phone or go to the website.
Randy Sams:
Give us a call. (866) 990-7664. Or the website Your American Retirement. We help pre-retirees and folks that are in retirement today all the time. So remember give us a call or go to the website. All right. Next, reports say financial jargon. Financial jargon. Guess that means the lingo that financial advisors or retirement planners use has 34% of Americans doubting retirement plans. All right. So financial jargon is so confusing that 34% of Americans say they don't know where to start. So when it comes to retirement planning, they don't know where to start. So that's according to a new survey from unbiased.com. In fact, the analysis found that the majority of adults. Say they have no confidence when it comes to dealing with retirement planning options. Okay. Most people can't do it themselves. Folks, when I meet with folks, talk to them about a 401. K, sometimes they don't even know what their 401. K balances are, Much less know what they're invested in in their 401 seconds. So. What the survey found was 25% of respondents. To the unbiased retirement confidence survey said they did feel confident. 25% said they felt confident. Those who said they felt confident about choosing retirement options said their confidence was the result of working with a financial professional retirement planner such as SMMG Financial. Okay, so other retirement related areas where respondents felt shaky was with the two largest, most unpredictable expenses.
Randy Sams:
What is that? Health care and inflation. Health care was cited as a primary concern by 56% of respondents who have good reason to worry. Why so? There's a fidelity study out there that found the average retired 65 year old couple in 2020 3rd May need approximately. $315,000 saved to cover medical costs during retirement, folks. 65 year old couple in 2020 3rd May need approximately $315,000 saved to cover medical costs during retirement. So, yes, health care and inflation is something that we are going to talk about when we meet and sit down together and go over your objectives, how we're going to take care of those health care needs. Do you just have Medicare? We need to put a Medicare supplement, Medicare Advantage. What do you have? What about long term care? A lot of things we could talk about don't have all that time on the show. But again, you know, you can call us (866) 990-7664 or go to the website YourAmericanRetirement.com. Leave us your contact information. We'd love to sit down with you and put together a plan where we don't have to worry about the health care or inflation or running out of funds. Listen, what are we going to do? You know what we do. At SMMG Financial. We want to set you up for a secure retirement, not a risky retirement. And how do I do that, folks? It's that a word? Annuities. I love annuities.
Randy Sams:
Some people wrinkle their nose. It's like I'm doing right now. If you see me on the podcast, they wrinkle their nose when you say that a word. Why do they not like annuities? Well, a lot of the folks that you work with in the investment industry, they get paid a fee. They charge a fee whether your account goes up or whether your account goes down. All right. So to you, as far as you're concerned, to them, you are an annuity. Now, listen, an annuity is simple. Definition is a guaranteed stream of revenue. So as long as an investment advisor has your money under its AUM assets, under management, as long as they're managing your account, your retirement fund, whether it goes up or it goes down and they're charging you a fee, they generate a revenue, guess what you are to that person. You are an annuity. So the next time someone tells you, your investment advisor tells you, Oh, don't like annuities. Ask them why they don't like you. Because as long as they're receiving a fee, a revenue stream off of your money, you are an annuity. Hey, speaking of annuities, this June is Annuity Awareness Month. So when we come back, we're going to talk about annuities. We're going to talk about Americans are more afraid of running out of money than dying and how we can address that. So you come right back. You're listening to Your American Retirement on 101.1 FM. The Answer?
Producer:
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Speaker8:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonus if the contract is fully surrendered or if traditional annuitization payments are taken and if the policy is partially surrendered, it could result in a partial loss of bonuses because these are bonus annuities. They may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, and other restrictions that are not included in similar annuities that don't offer a bonus feature.
Producer:
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 (501) 249-2343. Or visit YourAmericanRetirement.com. Welcome back to Your American Retirement. Here's Randy Sams.
Randy Sams:
Hey, welcome back, everybody. I want to thank you again for joining us. Today is July 1st, Saturday morning. You're listening to Your American Retirement on 101.1 FM. The Answer. My name is Randy Sams. I have been your host. I will always be your host on this show. So thank you for joining us. Hey, let's get right back into it. Americans are more afraid of running out of money than dying retirement, folks. That's what it's all about. Remember what I said earlier in the show? You're more concerned about your retirement fund hitting zero balance than you are. Your blood pressure hitting zero. We want to flip that around. A majority of investors now consider regular financial crisis to be an integral part of their retirement plan. Folks, that should be that shouldn't be. They're expecting a financial crisis. That to me tells tells me if I hear that, it tells me that somebody hasn't done their planning or they haven't met with the right person to set them up with the right plan. I want to be able to meet with my clients and set them up with a plan that no matter what the stock market does, no matter what financial crisis might be out there, you've got the peace of mind knowing that you have a guaranteed paycheck coming in every month for the rest of your life and for the rest of your spouse's life. That gives you peace of mind. That takes a portion of the stress of retirement away from you. We're going to remove longevity risk.
Randy Sams:
We're going to remove stock market volatility risk. This was from June 5th, 2023, so a little over a month ago. Americans are more afraid of running out of money than dying. So a new survey finds that 61% of us are more afraid of running out of money in our old age than we are of dying itself. So life insurance giant Allianz, which conducted the survey, found the result remarkable. But actually it sort of makes sense. Death is inevitable. Running out of money isn't so when you're dead, you're dead. Maybe it sucks, but you don't know about it. So being old and broke, not to say being old and broke is not the same. The findings emerge from a survey of a representative sample of 1000 middle class Americans aged 25 and over. Did you hear that? So they surveyed 1000 middle class Americans aged 25 and over. So those surveyed either had $150,000 or more of investable, investable assets. Or incomes of 50,000 a year if single and 75,000 a year if married. So the danger of outliving your money and ending up poor and old is why Social Security is so important to everyone but the very rich. So even to those who have saved wisely all their lives, it's an inflation adjusted lifetime income annuity that never runs out. Now, folks, you've heard me do many segments over the past year. About Social Security. Social Security was never created. It was created in the 1930. It never was created or developed to be your retirement plan.
Randy Sams:
It was never created to be your retirement fund, remember? And when it was created and established in the 1930, it was to supplement a pension because almost 100% of the companies, your larger companies offered their employees what was known as a defined benefit plan, better known as a pension plan. So you went to work for a company? And you work for 25 years. 30 years, 35 years, 40 years. And when you hit that magic retirement age, be it 60 or 65, what do they do? They give you a retirement party. They gave you the gold watch. Maybe not solid gold, maybe gold plated, but it was still a gold watch. And then you went off on the horizon into retirement land. But you had a pension. But that pension never was going to pay you 100% of what you were making when you were employed, maybe 60% if you were lucky. So Social Security was created and developed the established to supplement that. So with the Social Security guaranteed payments coming in, hopefully your retirement added to your pension plan, your Social Security added to your pension plan payments, got you up to close to 75 to 80% of what you were making while you were still employed. All right. That's what Social Security was created. It never was created to be your retirement fund. All right. So. Most financial experts encourage us to purchase single premium immediate annuities, better known as a sPIa when we retire, if not before.
Randy Sams:
So these convert a sPIa converts a lump sum single premium up front into a regular monthly income that will last the rest of your life, whether you live for one month or 40 years. So the main problem with most single premium immediate annuities is they don't include cost of living adjustments. So over time, your monthly income buys less and less. So, folks, we know that inflation happens, right? We know that if you've got a payment coming in of $1,000 a month today. That's not going to be the same. That $1,000 is not going to have the same buying power in six months or a year or three years or five years from now. Okay. So how do we overcome that, Randy? Good question. What we like to do is we like to do an annuity ladder or stagger the annuities. Okay. So we put a certain dollar amount into an annuity. It can be a sPIa or it can be an income annuity, an indexed annuity with an income rider. And we turn on that income. But we also have taken a portion of your funds and we've invested that or put that into another annuity. We let that annuity continue to grow. And when the current income that we have from our current income annuity doesn't have the same buying power, then what do we do? Five years from now or ten years from now, that's when we turn on that second annuity or third annuity. Okay, folks, we've got people out there that have ten annuities, 11 annuities, 14 annuities.
Randy Sams:
All right. So we can use an annuity to take care of your needs today and we can take care of your needs in the future by doing an annuity ladder or stagger those annuities. Okay. So lots of ways we can use an annuity to take care and address your concerns. So. So single premium annuity should not be confused with other insurance products called annuities, most of which are just tax shelters with very high fees. That's where I disagree with this article. All right, folks, the annuities that I work with do not have high fees. As a matter of fact, a lot of the annuities that I work with have zero fees. Now, I don't know about you, but zero is not a very high number as far as I'm concerned. So obviously, the folks who put this survey together, they may not have been a big fan of annuities. I am. All right. So are there annuities out there that have high fees? Yes, they do. There are. All right. Are there bad annuities? Yes, there are. Not all annuities are made to fit your particular objectives. That's why we have to meet. And sit down and find out exactly what you're looking for. But we have annuities that have zero fees, and we also have annuities that have the income riders. Guaranteed income riders. And they may charge a 1% fee. But what are you buying with that 1% fee? You're buying the guarantees so that 1% fee may buy you an 8% guaranteed compound interest for the next ten years.
Randy Sams:
That worth paying 1%. But it also that 1% fee that you're paying. Guarantees that lifetime income for you and your spouse, even if the account value goes to zero. All right. Again, you want more information on what I just said? You can call me (866) 990-7664. Or you can go to the website YourAmericanRetirement.com. Leave me your information. So hey Randy I want more information about that guaranteed income annuity and how those fees work. All right. And those guarantees. So. To me, an annuity is a risk transfer product, guys. You're transferring the risk of running out of funds from off of your shoulders, having to make all those decisions to transfer that risk over to the annuity company where they are going to be the ones that give you the guaranteed lifetime income. To me, that reduces the stress. All right. So. 56% of those surveyed told Allianz they now consider regular financial crisis to be an integral part of their retirement planning. That's that's crazy. 40%, 46% say the retirement planning has been derailed by the most recent crisis. Which has been rolling since March 2020. Folks, I just call that poor planning. All right. So most of the people that are getting hit the hardest right now, it seems our Generation X, which might also be called the forgotten generation or the overlooked generation, sandwiched as they are between the high profile baby boomers and millennials. Well, folks. Most generation X folks there joined.
Randy Sams:
They were born between the mid 60s and the late 70s. They're the lowest have the lowest overall financial confidence of the among the three generations. All right. Baby boomers, millennials and Gen X, So it's not it's that's not surprising. They're walloped with not one, but three major crises in the first 20 years of their working lives. Number one, the recession of the early 1990s. Number two, the dotcom crash of 20 of 2000 to 2003 and the global financial crisis 2007 to 2009. So their generation now on deck for retirement. The oldest, are turning 59 this year. The youngest entering their mid 40s. Some 25% tell Allianz they still have time to save, which is down from 43% just two years ago. But across the generations, 40% tell Allianz. The people that did the survey, they don't have a retirement plan and 56% say they don't know where to start planning beyond having basic accounts like 401 K and an IRA. Folks, give us a call. I don't want to see you in this position. I don't want you to be concerned about running out of money. More than dying. Give us a call. (866) 990-7664. Or go to the website YourAmericanRetirement.com. Leave us your information. Let us get in contact with you. Let's set up that one on one, one on one consultation free of charge. So folks, hey again, I want to thank you for listening. My name is Randy Sams, Your American Retirement on 101.1 FM. The Answer. We'll see you next week.
Producer:
Thanks for listening to Your American Retirement. You deserve to work with licensed financial insurance experts who can offer sound strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation, visit YourAmericanRetirement.com today that's YourAmericanRetirement.com.
Producer:
Not affiliated with the United States government. Randy Sams does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.
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