Proper Planning Prevents Poor Performance: Three Steps to Prepare for Retirement

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1.26.24: 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, good morning, Central Arkansas. I want to welcome you to your American retirement. My name is Randy Sams. I will be your host in today's show. Thank you for joining us on this Saturday morning. I hope you've had your cup of coffee. Your two cups of coffee, or whatever it takes to get you going. Hope your Saturday has started out fantastic. Looks like all the snow and ice has moved out of Arkansas. We've got some warmer temperatures coming in. Thank you Lord. But hey again, thank you for joining us today. We got a jam packed show on tap. And don't forget to check out the show in podcast form on Apple, Google, Spotify, or wherever you get your podcasts, whatever your favorite provider is. So you can also visit our YouTube page as well, you know, go to youtube.com and search your American retirement. As always, you'll know you're at the right spot when you see my smiling face. Alright? Hey, shout out to everyone in Central Arkansas Benton, Bryant, Haskell, Alexander, all my friends and family in Conway, Greenbrier. Thank you for joining us today. Because folks, you know. We love doing what we do. Alright. You know, you've got the podcast you can listen to. If you want to listen to a show from 2022, you can all you have to go. You can go back to your podcast provider, look up your American retirement or go to our website, Your American retirement.com.

Speaker3:
There's a section there that has all our previous shows back from 2022, 2023, all the way up to today's show. It won't be on there right now, but it will be soon. Okay, but please check us out. Tell your friends and family give us a thumbs up. Help us spread the news on your American retirement because, you know, we love speaking, talking to hearing from our listeners. Call us. Leave us a voicemail. Tell us. Give us some ideas on what you think you might want me to talk about. Is there a particular subject that you're concerned about? You're in retirement right now and there's something that has come up and say, hey, I think I'll call Mr. Randy Sams and see if he can talk about this, or you and I will have a conversation over the telephone or face to face, whichever fits your needs best. Okay. But we want to be able to hear from you and be able to help you out. Because you know what? Our mission is at your American retirement. We are focused on addressing the major financial issues facing retirees and pre-retirees in America today. By helping people, our listeners, understand and prepare for a secure retirement, not a risky retirement. Folks, you know, you've heard me say that if you've joined the show.

Speaker3:
Before you know that, we're going to ask you, when I meet with you, whether I'm talking to you over the telephone. Or whether I meet with you face to face. I'm going to ask you two questions to start the ball rolling, to kind of start the OP. You know, what are our objectives? Why are we here. Kind of get some ideas because I'm going to ask you those first two questions. Number one is how much guaranteed income do you currently have. Because folks I'm a big believer on income. I just had a conversation with a young man this morning. And he's got a ways. Before retirement. But guess what? He's already thinking about putting a plan together. Which is fantastic because. Right now, he and his wife are in that accumulation stage. They're building, they're building, they're building. But he wants to put away a set amount of money, and he wants to put it into an annuity, a guaranteed income annuity, because with that guaranteed income annuity, guess what? He's guaranteed compound interest. Alright. We have annuities out there that guarantee us an 8% compound interest for the next ten years. This young man and his spouse are young enough that that's what they want to do. They want to put a certain amount of money into an income annuity, let it grow at that, guaranteed 8% compound interest. And at the end of ten years, if that's when they want to turn on the income, they've got that guaranteed income.

Speaker3:
So he's listening to the show enough. And he understands the concept. Remember, you retire on income. I've yet to meet anybody that's getting close to retirement or someone who is in retirement that doesn't ask the question or is not concerned about income. You retire on income. Number two question we're going to ask, have you eliminated the number one retirement risk from your retirement plan? And that number one risk is longevity risk because folks people are living longer. Used to you could put together a retirement plan, meet with someone and they would look at 80, 85, maybe 90 folks. Millions upon millions of people are living past 85. Living past age 90, living to 95. Living to a hundred. So a retirement plan that gives you an 85% probability of money being there when you're 85 or 90. I don't I don't like those plans. I like to deal in guarantees 100% certainty. That's what we do. We want to, uh, we want to focus on longevity. We want to put together a plan that takes that risk off the table of you living too long. In other words, we don't want your retirement account to hit zero before your blood pressure does. Okay? So focus on what we talk about prepared.

Speaker3:
We want to prepare you. We want to educate you, and we want to prepare our clients and our listeners for a secure retirement, not a risky retirement. Okay. Prepare. Prepare means to put in proper condition or be in a state of readiness to put things or oneself in readiness. Get ready. So I have to ask, are you prepared? Are you prepared for retirement? What have you put together? What plans do you have? What have you got planned for Social Security? What have you got planned for a Medicare plan? Okay. For health insurance? Because as long as the longer you live, you're probably going to have some type of a long term care issue. If you're 65 or older right now, today, 72% of the folks that are 65 years of age today or older will have some type of long term care event. Okay, I'm not wishing bad luck. That's just what the data shows. But a majority of folks, if I were to ask you right now, what do you have in place for long term care? Are you going to put that on your kids or your spouse or whatever? But those are part of the plans that we put together. Prepare you for a safe. Retirement. Okay. Have you prepared for death? Do you have a will? Do you have any trust set up? How's the estate going to pass? What about your burial wishes, folks? I see more arguments with families between families.

Speaker3:
When a loved one has passed away without any plans, without any pre-planning, whether it be a life insurance policy, a small life insurance policy to take care of the financial burden of a burial. All right. Do you want to be cremated? Do you want to have the full service? Do you want to have a casket? All of that needs to be planned out. Don't put that burden on your loved ones. They're already going through the grieving process of losing a spouse or losing. Losing a mom or a dad or a brother or sister. Okay, put something together. So I have to ask again. That's what we do at SMC financial. We want to educate and prepare our listeners for a safe, a secure retirement, not a risky retirement. So we want to get you prepared. So I ask you the question, are you ready to retire? Are you prepared long term care? Are you prepared for death? Are you prepared questions you need to ask yourself. So guys, today's show we put together a retirement planning playbook. Got that? Strategies to help you win with your money in 2024. Retirement planning playbook. So let's get this show started, Mister Jim, I think it's time for a little financial wisdom quote of the week music. How about that?

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 is given to us today from Mr. Thomas, a Edison. And that quote is good fortune is what happens when opportunity meets with planning. Good fortune is what happens when opportunity meets with planning. You know, we're all about planning. Okay. So Thomas Edison was a prolific American inventor. You all know that. And businessman renowned for his groundbreaking contributions. To the development of the electric light bulb and the motion picture camera. So Edison held over 1000 patents, making him one of the most influential figures of the history of inner innovation. All right. So again, good fortune is what happens when opportunity meets with planning. So folks, we're going to come right back and we're going to talk about a concern that someone left. They are concerned about market volatility during this year the 2024 election cycle. So you come right back and we're going to talk about market volatility during the 2024 election cycle. You're listening to your American retirement.

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

One of these crazy old.

Speaker1:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

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

Speaker3:
Welcome back to your American retirement on 101.1 FM. The answer where little Rock comes to talk. So folks, don't forget to check out our YouTube page, visit youtube.com and search your American retirement and you'll see my smiling face. All right. Concerned about market volatility during the 2024 election cycle. Are you? So here are a few things to keep in mind this year. You should consult. Was somewhat a financial adviser. Retirement planning to properly allocate your dollars to protect and even grow your money during difficult market conditions. Don't be tempted to make sudden emotional decisions with your money. Converting to cash in your investment accounts could result in a melting ice cube situation, where your money will not keep pace with inflation and you lose buying power. Now is not the time to put your hard earned money or hard saved money under the mattress. Okay, your money working for you. If you got it under the mattress, it's not okay. A licensed financial advisor or retirement planner can help reduce the volatility in your portfolio. With a tactical asset allocation strategy. That's called planning that rebalances and rotates into desirable sectors for your investments on a monthly basis. In other words, we better check it, check it quite often to make sure it's performing like we want it to. Okay, so don't just hang in there with your investments. I hear a lot of people say, oh, well, it's just a paper loss.

Speaker3:
No, it's still a loss. Okay. If my account's going down, that's a loss is if it goes up, do they consider that to be a paper gain? Is it really a gain or not? Of course it is. Okay, so three election year myths debunked. All right. Get your pens and papers and y'all listen. Three election year myths debunked. Number one, myth stocks don't do well in election years. The reality is returns in election and Non-election years usually aren't all that different. Surprised? Um, so so we took a look at how the S&P 500 has fared in both instances. Election years, not election years. So going back to 1928. And that is as long as we have the data. Okay. Stocks returned 7.5% interest on average. They grew 7.5% on average during election years, compared with 8% during Non-election years, so slightly weaker. But nobody's going to kick a 7.5% gain out the window or throw it out the window. All right. Myth number two markets will crash if a particular candidate wins. All right. Now I've got my personal feelings on that. But listen to the actual reality. We've seen booms and busts on both sides of the aisle. The economic backdrop tends to matter more. So basically, while stocks tend to rally in election aftermath, it's true that some election years have seen bigger swings than others.

Speaker3:
But those instances have tended to do more with the underlying macroeconomic backdrop than the election itself. The folks just my my rabbit trail or going down the rabbit hole. Where I see. The effect on a particular candidate or a particular party winning an election. I see it affecting the economy more than I do. Like I said, the stock market. Okay, now you know, we sell. We saw a big drop in 2021. Okay. The market is starting to recoup. It's starting to go up. I think the S&P had its highest amount ever last week. So things are starting to turn around. But you and I both know that with certain parties in charge what happens to inflation. So you got to ask yourself with the current administration, with the current people that are in charge, is it costing me more to live today than it did three years ago? Two years ago? Okay. We know inflation is going up. We know gas is more expensive. We know homes are more expensive. So yes, to me a particular candidate or a particular party has more of an effect on the economy, inflation, cost of living than it does maybe on the stock market. But let's look at myth number three. The Federal Reserve doesn't change policy in election years. Reality. The fed hasn't shed or shy.

Speaker3:
Excuse me. My bad. The fed hasn't shied away from hiking or cutting rates during election years. So we go back to the 1950s. So going back to the 1950s, 2012 has been the only election year that the fed did not either raise or lower interest rates. Similar to myth number two. This suggests that the economy, rather than politics, is in the driver's seat when it comes to monetary policy. So we believe that this year will be no different. Okay, so you know, we're in the election year 2024. You know, if you've been listening there, uh, having well, by the time you listen to this, the Iowa caucus has already been over with. Trump won that decisively. New Hampshire is taking place on Tuesday or took place on Tuesday. This is when we're doing our recording, so I don't know what the results are of that. We'll see. Those are the three myths. So how can you plan for the year ahead? We want to get you again. Remember that word prepared. How can we get you prepared? How can you plan for the year ahead? While politics can evoke strong emotions? You know, I guess when you have your family reunions, what are the two things you're not supposed to talk about? Religion and politics. So we know for certain, politics can evoke evoke strong emotions.

Speaker3:
So we don't think anyone should lose sight of your long term investment goals. We believe the economy will remain the predominant driver of policy decisions and markets broadly. Of course, there are risks from ongoing friction points such as inflation to wild cards such as geopolitics, what's going on across the world. But we believe that as growth holds up, price pressures abate and the fed embarks on an easing path. There is ample opportunity for multi-asset investors in the year ahead. Diversified folks, don't put all your eggs in one basket. I don't believe in that. You know, whenever we talk to people, if they've got a 401 K, let's say they're 60 years old, they passed the 59.5 mark and they have a 401 K balance, and they're not going to retire for the next 8 to 10 years. We can take all of the 401 K balance at that time or take a portion of it. That's their decision depends on what their retirement goals are. What do you need to have as an income when you turn on? So when you retire, when the paychecks stop, where the paychecks going to come from, you turn on Social Security at age 67 or 60 8 or 70. That's not going to be enough to retire on. So that's why we put together the income annuity plan. You let that grow for eight years or ten years, and you turn on that income stream along with Social Security at that time.

Speaker3:
And if you have a pension, a pension, if not, hopefully you've got other accounts, savings accounts, IRAs that you can dip into. So you've got to be able to plan. So guys, it's time to get serious in 2024. This is an election year. There's already so much uncertainty in the world affecting retirees and pre-retirees you know it, I know it. I talk to folks every day, so please don't wait until you're ready to start to retire to start that planning. Remember, you've heard me talk about it and I'll talk about it in today's show. The more time you give yourself to plan, accumulate, and invest, you increase the likelihood that your retirement will be financially successful. So let us help you get started today. Give us a call (866) 990-7664 or book your free consultation at your American retirement.com. Again, give us a call. Leave us your contact information. Set up a free consultation, no obligation whatsoever (866) 990-7664 or send me a message on the website. Your American retirement.com folks. You know, we've spoken about it to get prepared depending on how what time, how far out from retirement are you? I gave the example of the young man I spoke to this morning. He and his wife are probably at least ten years away, but they're already starting that planning process.

Speaker3:
Remember, we talk about the retirement red zone. That's something that you have to be aware of because five years before retirement, five years after retirement or into retirement, those are the years that you want to take risk off the table. You've worked too hard to get where you're at today. Now you want to get to a point where you have the peace of mind, knowing that I'm not going to lose people today. If you're getting close to retirement, younger folks are trying to get where you are at right now. So your objective starting today is not to lose. And how do we do that? We put to a together a plan where we know where we're going to be sitting in five years. So five years before retirement, we want to take that financial risk of losing money, your account value going down. We want to take that financial risk off the table to where when you get ready to flip that retirement switch, everything that you had planned for is there waiting for you. So folks, listen, we're going to come back. And in this next segment we're going to talk about why you want to have multiple income streams in retirement, why you want to have multiple income streams in retirement. You're listening to your American retirement will be right back.

Speaker2:
You're listening to your American retirement. To schedule your free, no obligation consultation, visit your American retirement.com. Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? Then tune in to your American retirement to learn how you can protect and grow your hard earned money. Your American retirement. Every Saturday at 10 a.m. right here on 101.1 FM. The answer protect your retirement and schedule a free, no obligation consultation now at your American retirement.com.

Speaker1:
Do you have a vision for what you want your retirement to look like? I'm Matt McClure with the Retirement Radio Network, powered by Amira Life. Planning for retirement can be overwhelming. A survey from Gobankingrates shows that one third of Americans don't think they know enough about retirement, and they're probably right. So if you fall into that category, how do you know where to begin? Well, you've got to know where you want to go before you start planning how to get there. That's where having a smart vision for your retirement comes in. Whether you want to be a jet setter during your retirement years. Want to take it easy in a quiet cabin in the woods, or start a new adventure by opening your own business, you should set that goal and keep it in mind throughout your working years, retirement expert Dean Waguespack said during a recent Ted talk. I want to.

Speaker5:
Challenge all of us to redefine retirement away from depart, remove withdrawal to a new definition a blending of pay, passion and purpose.

Speaker1:
Until retirement looks different for everyone. Sit down with your spouse and talk about your retirement goals. That will make it easier to determine how fiscally responsible you need to be now, and how much income you'll need to make it happen after you retire. That's right, I said. Income. More and more retirees are finding that cash flow is more important than one big nest egg number.

Speaker6:
That's when you want to say, hey, listen, I want to start thinking about all of this accumulation that I've done through these decades of working. How do I begin to think about turning what I've saved and what I've accumulated into paychecks after I retire?

Speaker1:
That's Lee Baker, president of Apex Financial Services. Speaking to CNBC. He says annuities are a great option for most retirees to generate an income you can never outlive. That's especially important since life expectancy has grown over the years, so you'll need to plan for a longer period of time than you may think. So do you have a smart vision for your retirement years? That's a key question to consider as you start planning how to get there. With the Retirement Radio Network, powered by Amera life, I'm Matt McClure.

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

Speaker3:
Hey, thanks for joining us on this week's edition of Your American Retirement. Again, my name is Randy Sams. Please be sure to check out the podcast version of the show on Apple, Google, Spotify, or wherever you may get your podcast. Whatever your favorite podcast vendor is, look for us, your American retirement. All right. So. Multiple income streams. But we're going to start out with are you 50 or older? Here is our three step guide to prepare for retirement. Here is our three step guide to preparing for retirement. Number one, find and examine your company 401 K Plan Documents. Folks, this gets me every time. Let me get on my soapbox when I have someone that may get in contact with me. Or they left me a voicemail and I call them and we start talking about different things. And so I ask, you know, well, what do we have to work with as far as it a savings account? Ira? They may say, well, I'm working. I've got an employer 401 K plan. What gets me is when I ask him a simple question to start out with, how much do you have in the 401 K plan, folks, you're going to be surprised. I'm not any longer. But there are several times when I ask that question that I've been told I don't know. Okay, now they may just be putting that down though, you know, not putting that information out to start with.

Speaker3:
And I'm okay with that. All I want to know is what we have to work with, because that helps me understand what our objectives are. And do you have enough to work with to meet those objectives, or do we need to make some planning changes? All right. So and especially when I ask them, do you know what your 401 K's are and invested in mutual funds, index accounts, index funds, low risk accounts a lot of folks don't don't know that okay. But we need to make sure we got to find and examine your company. 401 K plan documents. Number one, identify your account number. And in and your vested balance. So take note. So you may not be fully vested in your account funds. If your employer offers contribution matching. Plus you should be aware that taxes are due on any distributions from tax deferred accounts like a 401 K IRA, 403 B, etc.. So what I mean by vesting folks, you're always 100% vested on any money that you have contributed to the 401 K, you understand that? But the majority of folks who have a 401 K through their employer. They have an employer matching contribution. And where the vesting table comes in is the fact that you have to work for that company for a particular number of years. Before you're fully vested.

Speaker3:
So you may start with a company today, and after 30 or 90 days, or when or whatever their grace period is. They allow you to start making contributions or join the 401 K, and they will match up to a certain percentage of what you put in into the 401 K. But the employer contribution is not 100% vested immediately. They may tell you that after three years, you're 33% vested. After six years, you're 66% vested. After ten years, you're 100% vested. Okay, I know that before I retired, the company that I worked with. The 401 K plan that I had. The vesting schedule basically was after ten years, I was fully vested on the employer contributions. Okay, so if you've been with your company for a long period of time and you have a matching contribution from your employer, the thing that you need to be concerned about is am I fully vested in the employer contribution, the majority of you, have you been there for, say, 5 to 10 years? You probably are, or you're getting close to that. So. Take advantage of our free 400 and 1KX ray today. So we will show you how your portfolio is really performing when compared to common benchmarks such as the S&P 500 and how it's projected to perform in the future. We will show you what percentage of your portfolio is in bonds.

Speaker3:
We will show you how much you are paying in fees. So please give us a call if you need some assistance. Confirming if your 401 K plan has any special provisions around retirement withdrawals, you want to make sure that you're compliant with all your plans rules to avoid any costly errors. So one of the things that we have to make sure folks with the 401 K. I've only ran into this a couple of times of instances. When you hit 59.5. You know that any withdrawals that you take out of a 401 K plan or a 403 B or whatever, IRA, you don't incur that 10% penalty any longer. All right. But you may say, well, Randy, I don't want to withdraw the plans. And plus I'm going to continue to work. So what we take advantage of for folks who want to take some of their 401 K money or IRA money and put that into a guaranteed income annuity, growing at 8% for the next ten years. Compound interest. We take advantage of the in service distribution basically, which means that in your 401 K plan they should have. That's why we need the documents. There should be a section that explains, at a certain point in time, when you hit a certain age, 59.5 or above, you can take. All of the 41K ballots, or a portion of the 41K ballots, and transfer that into some type of other program or product.

Speaker3:
Okay, that's usually in there. I've only met a couple of or been met with a couple of folks who they didn't have that provision available. If you're in the teaching business, a lot of times you have to actually retire before we have access to that TSP plan. Okay. But again, don't want to go too deep down that rabbit hole. You can give us a call (866) 990-7664. And we can have that discussion. Number two check your Social Security benefit projection. So you need to create your free account with the Social Security Administration at Tsa.gov. One of the first things I do is ask folks, do you know what your Social Security is supposed to be at 62 or 60 7 or 70? A lot of people don't. I know Social Security is supposed to be sending those forms out every six months, or at least every year. A lot of people may get that and not even open it up, not knowing what it is, or they may not remember where they're at. But if you set up your personal account at tsa.gov, all your information is on there. It's going to tell you based on your past income that's been reported on your tax returns. This is what your projected Social Security benefit will be at age 62. So it shows you every year up to age 70.

Speaker3:
And that helps you plan so so you can contact us for free Social Security maximization report. Folks, this is very important. Why does it make a difference? Randy, if I turn on my Social Security at age 62 versus 67, or why does it make a difference if I turn on my Social Security at 67 versus age 70? Because having a sense of what you'll receive in Social Security income can help us, you and I figure out how much you'll need to have saved by the time you retire. In other words, is there going to be a gap? So if you find out that you will receive $30,000 per year in Social Security benefits and your expenses are 80,000 a year, you now know that you need to come up with another $50,000 worth of income in order to cover your budget in retirement. How much time do we have to build that $50,000 additional income? So if your Social Security check at age 67, if you wait to age 67 is going to be 30,000, but we need to have an additional 50,000 to meet your basic needs of 80,000, or that's what your target amount is. What do we have to work with to put that into a guaranteed annuity, growing at 8% compound interest for the next 8 to 10 years to hopefully pick up that $50,000 gap.

Speaker3:
Okay, so additional income streams can come from personal savings, investment income, part time work income, or even personal pension products. Like what I talk about fixed indexed annuities with that income rider. So I spoke to the gentleman today and he's self-employed, doing very well for himself and his wife. Of course, they don't have a pension plan, but what he's looking at, this annuity is, in fact, that he's going to put money into the guaranteed income annuity, growing at 8% compound interest for the next ten years. And when he and his wife decide to turn on that income stream, they have created their personal pension. That income is going to be guaranteed for the rest of his life and the rest of his spouse's life. So he lives to be 100 and passes away. His wife is going to receive the exact same amount for the remainder of her life, so she lives another ten years after him. She's going to receive the exact same amount. So they've set up that pension plan to pay for him and to pay her the exact same amount for as long as they live. So knowing how much you'll receive from Social Security helps make retirement income planning a bit more clear. Because something else that we have to talk about, folks. You know, if you're a husband and wife and you're both drawing Social Security checks. That's two Social Security benefits coming in every month.

Speaker3:
What happens when one of the spouses pass away? You see, you're only able to keep the higher of the two. So security benefits. So if you're the higher wage earner during your working years, your Social security check is more than likely going to be the higher of the two when compared to your spouse's. But when you pass away, your spouse is not going to be able to keep your Social Security benefit, which is higher than his or hers. And there's two they're going to lose theirs, and they're going to keep yours, which is the higher of the two. Okay. So you got to have that planned also. Smart vision for your retirement future. Even if you're able to put together a rough sketch of how you think things might be for your retirement, putting your vision down on paper or speaking with a planner or an advisor is a great place to start. So ask yourself these questions. Who will I spend my time with in retirement? Spouse. Family? Grandkids? Friends? What do I want to do in retirement? You want to travel. You want to have a hobby. You play pickleball, golf, tennis, maybe start a business. Where do I want to live? In retirement? Stay in my family home? Downsize or relocate? To a new home. When do I want to retire? What's your target age, folks? Remember that retirement red zone.

Speaker3:
We have to take into consideration retirement red zone. Five years before retirement, five years into retirement. So all of this taken together, you have to ask yourself, finally, how am I going to fund my vision for retirement? Because the last thing you want to happen is you're within five years of your retirement target date. And something happens to your retirement account. Your 401 K, your IRA. The balance goes down. Now your option is to what? Retire on less or continue to work past your target retirement date. You got to consider what your needs are. Those are your basic expenses. And then consider your wants. Those are what I call the play checks. Okay. Remember you retire on income, not assets. So we want to be able to help you set up your guaranteed stream of income, social security pension, whether it be a personal pension and then any side accounts that you may have any rental property income that you may have savings accounts, investments, add all those together because your stress free retirement, your secure retirement is going to be based on income, not assets. Because assets can be lost. So folks come right back because in the next segment, we're going to talk about why you want to have multiple income streams in retirement. 101.1 FM. The answer you're listening to your American retirement.

Speaker2:
Miss. Part of today's show, Your American Retirement, is available wherever you listen to podcasts and online at your American retirement.com.

Term before the good term. Beat your chest.

Speaker7:
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.

Speaker2:
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Speaker3:
You're listening to your American Retirement. Join us every Saturday at 10:00 right here on 101.1 FM. The answer where little Rock comes to talk. I want to thank you guys for joining us. Uh, we appreciate all the comments that we get from our listeners from our clients who have told their friends and family about the show, about what we do at Qmg financial, your American retirement. Because, folks, when people ask me, well, what's your show about? It's a pretty simple answer. The name of the show is Your American Retirement. Again, you know, we want to educate you and we want to prepare you for a safe and a secure retirement, not a risky retirement. And we just got through talking about what? Income. I'm a big believer in income, folks. You want to remove the stress from your retirement days as far as financial stress. You do that by. Income streams. That's why you want to have multiple income streams in retirement. And there are few different ways that retirees generate that income they need to live on in retirement. Some of the most common are. Social Security. Now again, we can go down many, many different trails. Social security when we're making a plan, we need to consider. When do you want to turn on Social Security? Are you going to continue to work and you have that income coming in from your job? Do you want to retire early? Well, remember, if you turn on your Social Security benefit at age 62, which is the earliest you can turn that on for retirement? If you turn that on at age 62 versus your full retirement age of, let's say, 67, that's going to cost you, what, 30, 35%? It's going to be less.

Speaker3:
And that's every year for the rest of your life. So we have to have some planning, folks. One of the things that I've done is we've done a Social Security bridge. That's what I call it. So we can we can take a certain portion of your money. 401k IRA, whatever it might be. Even though you want to retire early at age 62, that's great. But let's look at the benefit of turning on Social Security at age 67. So here's what we do. We take a certain portion of your 401 K, and we put that into a five year certain period certain annuity. And we turn on an income for that five year period. That way you've got an income coming in from 62 to 67. At the end of five years that income stops. But guess what? Now, at age 67, you can hit the switch for your Social Security and you will now receive your full retirement benefit versus it being reduced if you would have turned it on at age 62.

Speaker3:
Does that make sense? I love doing those, okay? And people, when I tell them about that, their eyes light up and they go, I like that idea. So it's a bridge that will take us from age 62 to 67, with an income coming in during that period of time. At at age 67, you turn on the full benefit for your Social security about pensions. You know that only about 10 to 13% of those of you listening. Now, some of that may be higher for some of your older baby boomers. But you know as well as I do that today's workers, only about 10 to 13% of workers today have an employer sponsored pension plan. They've gone away from a defined benefit plan. Now they're to a defined contribution plan, i.e. 401 K, 403 B, whatever that might be. So the oldest. The burden of retirement planning, as far as accounts go, is now on your shoulders. The employee versus the employer shoulder, because they're no longer offering pensions. Majority of companies are. Personal pensions. This is what I do every day from a fixed indexed annuity with an income rider. So you may be self-employed, or the company that you're working with may not have a or offer a pension plan.

Speaker3:
So remember. At age 59.5. We can take a portion. We can take it all if you want to, depending on what your target amount is when you want to retire. But we can take a portion of your 400, one K or IRA, whatever that might be, and put that into a guaranteed lifetime income annuity guaranteed to grow at 8% compound interest. So we let that grow for the next eight years. Now you're 67 and you want to turn on your Social Security boom. You turn on your full Social Security at age 67, and then we turn on the income annuity stream. And you've just set yourself up yourself and your spouse with a personal pension plan guaranteed to pay you an income for the rest of your life and the rest of your spouse's life. I love that, I love that I love it, okay. Withdrawals and distributions from retirement accounts. That's an income stream. 401 K IRA, 403 B's. But folks, that's where we get into that situation. How much is too much? The old 4% rule. Does it still work? And remember sequence of returns. If you're taking money out at the same time your account is going down, now you've put yourself into a position to where you may run out of money. Before your retirement is actually over before you pass away.

Speaker3:
So withdrawals and distributions from retirement accounts that can be iffy. How much do I take out? Am I taking out too much? Am I taking out too little? Again. We take all that off the table when we put together an income annuity for you? Income from investments. Dividend paying stocks. Brokerage CDs. Real estate as in rental properties. Okay. Rental property income is good, but I'm dealing with a lot of folks right now who have had rental property, and it's been excellent for them. They've had a nice little steady, you know, rental money coming in from their from their rental properties. But you also have issues as far as, as your rental property going to be occupied 100%. Is it going to be maintained by the residents, by the renters? Who's going to do the repairs for those rentals? And when it comes time to where you get to a certain age, this is where my discussions have been with folks who have a lot of rental property. Can I sell that rental property and put that money into an annuity? The simple answer is yes, you can. But there's going to be tax consequences because you're going to have to pay capital gains taxes on what the value of that rental property was when you purchased it and what it is today.

Speaker3:
Of course, you get to take some deductions off of that, but you'll pay taxes on any gains. A lot of people don't want to pay those taxes, those capital gains taxes. So what happens is the only way you can get rid of the current rental property is do a 1031 exchange. And I'm not going to go too far into that. But at 1031, exchange only allows you to. Get rid of rental property and buy more rental property. Okay, so that really didn't help. So a lot of times what happens is if the clients that I'm working with have rental properties, they don't want to pay the capital gains tax, then they basically just set it up to where those rental properties are going to be passed on to their children or their grandkids. Okay. Part time work now, part time work is something that I deal with on folks that if it's something that you want to do because you want to keep active, that's great. But part time work because you have to go back to work, tells me that the planning situation was not done correctly. We got a plan, but if you want to go back to work because it's something that you want to do to keep active, that's great. Mm. So we know it's important to diversify.

Speaker8:
Uab.

Speaker3:
We know it's important to diversify your investments. But why is it important to diversify your income streams? Good question. Diversification of income sources. Relying on a single source of income in retirement can be risky. Having multiple streams provides a safety net in case one of the source diminishes.

Speaker8:
Excuse me.

Speaker3:
Having multiple streams provides a safety net in case one source diminishes or faces challenges. So diversify those income streams. We want you to have more than one long term sustainability retirement often as last several decades. So we've got to be able to make sure you have long term plan risk mitigation. Various income sources may have different risk profiles, so combining low risk with high risk streams helps mitigate overall financial risk. This is where I use the rule of 100. You may say what's the rule of 100? Randy, take your age. Subtract that from 100. Whatever you have remaining, that's the amount that you should have in equities. No more than that. So if you're 65 years old. Take that from a hundred. That leaves 35.

Speaker8:
You should have.

Speaker3:
No more than 35% of your retirement plans, your retirement funds, in what I call risky investments. Okay, could be equities, whatever it might be. 65% of your retirement funds should be in safe money. Remember not to lose. You got to be able to be adaptable to changing circumstances so life circumstances can change. Having multiple income streams allows retirees to adapt to changes in health family economic conditions more effectively. All right. So legacy planning what are you planning to do for your family. So folks listen we want you to give us a call. We want you to go to the website. We want to hear from you. Let us set up a consultation with you. So I want to thank you for listening to your American Retirement Today show. Again, if you've missed any part of the show, Today Show or any others in the past, go back into podcast archives on Apple, Google, Spotify, or whichever platform you get your podcast. You can see us go to your American retirement. All our previous shows are on there, folks. Go out and make it a great Saturday. Have a great week. God bless. Go, hogs! We'll talk next week.

Speaker1:
Thanks for listening to your American retirement. You deserve to work with experienced, licensed financial insurance professionals who can offer sound strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit your American retirement.com today. That's your American retirement.com, not affiliated with the United States government. Randy Sams does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. A pro-life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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