The Biggest Retirement Mistakes You Want to Avoid

4.19.24: Audio automatically transcribed by Sonix

4.19.24: 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. Well, hello again, Central Arkansas. Good morning. I hope your Saturday morning has been going well. I want to welcome you to your American retirement. My name is Randy Sams. I want to thank you for joining me on this Saturday morning again. Hope you've had your cup of coffee or two cups of coffee or whatever it takes to get your go go juices going. So, folks, listen, we got a great show online for you today. We're going to talk about avoid these financial pitfalls breaking bad habits to build a better retirement. It's going to be a great show believe me. And hey. Don't forget to check us out. Check out the show on podcasts wherever you get your podcasts. Apple, Google, Spotify, whatever your favorite vendor is, you can also, you know, look for your American retirement and you can see the entire show. If you happen to miss part of today's show or you want to listen to one of the previous shows we've recorded over the past couple of years, that's on your podcast provider, or go to youtube.com as well and visit our YouTube channel, Your American Retirement, and you'll see my smiling face on there.

Speaker2:
Now, YouTube is a little bit different from our podcast because, as you know, YouTube, we only put a couple of minutes of each each show on there just to kind of pique your interest. What we feel like are some of the most important parts for today's show, or any previous show will be on YouTube, and then that will direct you to go to the podcast providers. All right. So listen, I want to say hello, give a shout out to all my friends and family in Conway, Faulkner County. Thank you for joining us, Benton Bryant area. You know I love you. We appreciate everything you guys do. And listen, please do not hesitate to give me a call if you have any questions or concerns about you're about to go into a retirement. You may be ten years away from retirement, but now's the time to start planning. Let's put together a plan. Because, folks, we love to hear and help our listeners. That's what I do. You know what, SMG? We address the major financial issues facing retirees and pre-retirees in America, focusing in Arkansas by helping people understand, educate, and prepare for a secure retirement, not a risky retirement. So please give us a call (866) 990-7664 or go to your American retirement.com. Leave me your name, your name and information. I'd love to meet with you. Discuss how we can help you reach your financial goals and put together a nice retirement plan, risk management, estate plan, social security planning, whatever it might be.

Speaker2:
We do the whole ball of wax here. Okay, so we believe in building a sound financial plan for our listeners, for our clients. That's what we do at your American retirement slash Qmg financial. All right, a little bit about today's show. Again, bad money habits. We're going to talk about what we how we want to help you avoid making these common bad decisions. Social security update every one of y'all want to know, especially because we're going to give a little drop, a little hint what they feel like the cola might be for 2025. You may say, well, Randy, it's only April 2024. How can you already tell us? Well, they already have some projections, folk, and it'll probably be end up being pretty close to what they're projecting. We're going to talk about inflation. We're going to give you an inflation demonstration as to what things have changed over the last few years. Rising costs have led Americans to believe they need more savings. They agree with that. And if you're in your 50s and you're listening to this show, we're going to share three moves to make while you are planning for retirement. But folks, you know, if you've listened to the show in the past, we do not get started until we have our financial wisdom. Quote of the week. So, Mister Jim, if you'll cue up that music, we'll get right into it.

Speaker3:
And now for some financial wisdom. It's time for the quote of the week.

Speaker2:
All right. Thank you, Mr. GM. Financial quote of the week. Is given to us by Mr. Warren Buffett. I don't believe I need to explain who Mr. Warren Buffett is to you guys, but this is his financial wisdom. Chains of habit are too light to be felt until they are too heavy to be broken. Does that make sense? Chains of habit are too light to be felt until they are too heavy to be broken. And that can be bad, and it can also be good. You know, I've heard some people say that you have to do something ten times in a row or ten times to make it into a habit. I don't know if that's true or not. I don't have a psychology degree, but you know, you can have bad habits, you can get yourself into bad habits, and but you can also have good habits. One of those good habits is what saving for retirement. And I believe that's what Warren Buffett would agree with me on that. All right. Thank you, Mr. Buffett, for that financial wisdom. All right. Bad money habits and decisions don't damage your future retirement. Bad decision. Number one selling investments when market drops. Ooh. That's a I call that the knee jerk reaction. So that's what happens when someone has a I don't know an investment account or a 401 K or what an IRA. And all of a sudden you see the stock market drop. I've seen too many people. They panic and they and they pull their money out or they move their funds.

Speaker2:
And it's okay if you keep it in there. You move it into more of a like a savings account or a cash account or whatever. But you got to remember the stock market. If you have money in the stock market, that's called risk. It's going to go up. Everybody loves it when it does and it's going to go down. Nobody likes it when that happens. All right. But you're taking the risk with those funds but don't have that knee jerk reaction. Just because it's starting to go down. That's not the time to pull everything and change everything you're doing. Sometimes you have to be patient because just like in 2008 now, it took a long time. But after 2008, my 41K balance dropped by 4,045% and it took about 5 or 6 years for it to get back to that level. So, you know, 2013, 2014, my 401 K balance finally got back to where it was in 2008. So that took a long time. But you had to be patient. All right. And we'll give some examples. So you got to avoid making impulsive decisions during market downturns. Because what happens is you see the stock market always has gone through phases. They go it's going to decrease. It's going to increase, it's going to recover and then it's going to expand. And if you allow emotions to get in and emotions can be heightened and lead you away from your previous plan and investing strategy.

Speaker2:
So avoid making impulsive decisions during market downturns. So. Selling investment when the market drops, can lock in losses and hinder long term growth. You know, folks, I remember way many, many years back and you guys have heard this also. And if you I've heard this where people say you buy low and you sell high okay. Do you hear that? You buy low and you sell high. Now that has to do with the stock market or a stock price. You don't you don't sell low and buy high. That's defeats the purpose. So I'm going to give you an example. So selling an investment when market drops can lock in losses and hinder long term growth. I had a client and this was a few years back. But when we were going over this it just kind of came up. I remembered I had a client, she was working for a corporation, and part of her 401 K allowed her to invest in the company stock. All right. So the company stock had fallen I believe this was back during Covid. And she said, oh man, my stock has fallen. I need to get rid of it. And I said, no, because we were talking about setting her up with an income annuity. I said, no, let's ride this out. And thank God we did, because that stock at that time was priced around, had fallen to around $60 per share. Over the next year and a half, we waited patiently.

Speaker2:
That stock rose to over $200 a share. Now, folks, you do the math. She had 1000 shares of company stock. She went from having about 60,000 to retire on to over 200,000. And we were able to take that money and transfer that over into a guaranteed lifetime income annuity. So. Don't have that knee jerk reaction. Instead, consult with a licensed financial adviser or professional like myself to develop a diversified investment strategy. You guys know what? I hold on to the rule of 100, and we got to make sure that it aligns with your risk tolerance and long term goals. Goals stay invested, stay informed, diversify, market contradiction, or contractions. Market contractions can actually be used as opportunities to invest when prices are low and there are more sellers than buyers. All right. So remember some people are going to tell you that oh they're stocks. Your stock value went down. It's only a paper loss. Well it's my money. It's not yours. But is it go if it goes up is it a paper loss or a paper gain. You see what I say. If you're talking about an annuity and your stock markets or your 401 K's are doing well, now's the time to get out. And let's talk about transferring that fund. So folks, listen, that's bad decision number one. We've got a few more to go. So be sure to stay tuned. Come right back. You're listening to your American retirement. Thanks for listening.

Speaker4:
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. Welcome to Nationwide's Peak ten fixed indexed annuity, designed to help provide guaranteed income for life. Peak ten offers protection against market losses, plus protection for a spouse through a joint option and an immediate 10% penalty free withdrawal. Call us now at (501) 249-2343. That's (501) 249-2343. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio. Visit your American retirement.com to schedule a free consultation with Randy today. And now back to the show.

Speaker2:
I welcome back to your American retirement on 101.1 FM. The answer we're little Rock comes to talk folks. Don't forget to check us out. Check out our YouTube page, visit youtube.com and search for your American Retirement, and you'll get to see what we feel like are some of the most important segments of today's show, or any previous show that you may want to see. All right, bad money habits and decisions. Let's talk about bad decision number two, claiming your Social Security benefits too early. Ouch. Folks, that hurts when I talk to my clients or when I have a potential client. And, um, they're looking at, you know, they may be in their late 50s or they may have just turned 60. And I ask them, well, what's your target retirement date or something? And some of them may end up saying, 62. And I said, is that when you want to retire? But some of them will say, no. What that is, is I want to turn on my Social Security. I see a little red flag goes up. On Randy's radar because to me, the longer you can wait to turn on that Social Security, the better off you're going to be as you get into retirement years, as you go from your 60s into your 70s, from your 70s, into your 80s, believe me, you're going to be glad you waited to turn on that Social Security.

Speaker2:
But because claiming Social Security benefits before retirement age, full retirement age, that's your Fra, you know, you guys. If you're still putting in Social Security. If you don't, you can go to my tsa.gov and you can set up an account. It'll show you what your full retirement age is. Most of y'all listening are going to be probably 67. Some of them were, some of you guys might be 66 or some were in between those two ages. But remember. It's gonna result in reduced monthly payments for the rest of your life. So once you flip on that switch with Social Security and some of you may feel good because I turned it on at age 62. But when you hit age 67 or 70 or 75 and you look back what your monthly. Benefit could have been and what inflation has affected that benefit or how inflation has affected that benefit. You're going to wish you had waited. All right. So consider long term impact of this important decision for you and your spouse. So here here's an option instead. If possible, consider delaying Social Security to maximize your benefit and get the most out of this system you have that you've been paying into your entire working life. Now, folks, here's what I do. I call this a Social Security bridge. What is that, Randy? Well, I'm glad you asked.

Speaker2:
Social security bridge. Let's say that you wanted. You're thinking about turning on your Social Security at 62, but you also realize that if you wait to age 67, your monthly benefit, your annual benefit, will be anywhere from 25 to 30% more each month slash year. Well, how do I do that, Randy? Good question. Again, what we do is we can look at some of the funds that you may have in an IRA or a 401 K. And we can take a portion of those funds and put that into a five year income annuity, a CPA, a median income annuity. We can work it out to where your CPA, monthly payments or annual payments are exactly what your Social Security payments would be. So you're not losing anything. All right. So during that five year period, you let that CPA pay you those monthly that monthly income slash that annual income. You wait till your age 67 and then you turn on your Social Security. And guess what? Now you going to be able to get that additional 25 to 30% monthly slash annual benefit for the rest of your life. So that Social Security bridge is something that we can do for you guys to maximize, to help you maximize those benefits. Right. So we want you to consult with us. We can help you determine your optimal age is going to be 62 or should you wait to 67.

Speaker2:
Is it going to be 67 or should you wait to age 70? Because the timing for claiming Social Security based on your individual circumstances is based on what you feel like you need? But remember, once you turn it on, you're locked into it. So if you're concerned about Social Security, we understand that many of you are worried about the future cuts to Social Security, and we'll talk about that if we have time today. So it's going to affect your retirement. Those cuts will affect if they occur. We want to provide you with a Social Security maximization plan customized with you and your spouse's benefit information. We can put together a Social Security plan with the different ages, and why it's wise to try to wait if you can. You got to give us a call (866) 990-7664 or contact us on our website (866) 990-7664. Again is our toll free number website your American retirement.com. Take advantage of complimentary offer today. We love helping you our listeners. All right. Bad decision number three. Not having a savings first mindset. Boo! Did y'all hear that? Not having a savings first mindset. Again listen to this. This is from Mr. Warren Buffett. Do not save what is left after spending, but spend what is left after saving. Does that make sense? And we're going to talk about a budget here in just a little bit.

Speaker2:
But I like that. Spend what is left after saving. Pay yourself first. Save that money because believe me, there are too many folks. Some may be listening today, but too many folks that I have an opportunity to meet with that when they look back and I ask them, what's the one thing you would change before you got to retirement? And pretty much every one of them would say, I would do better planning. I would save more in anticipation for my retirement years. All right, listen, this is fact 40% of Americans don't have enough savings to cover a $400 emergency expense. We want our listeners to prioritize savings to build a financial safety net, an emergency fund. These are the kinds of people that we feel like we can really help. All right. Prioritize saving to build a financial safety net. We want you to be prepared. We want you to have a safe and a secure retirement, not a risky retirement. Do you have an emergency fund? I just think we should have at least a minimum of six months expenses. Your basic expenses every month. You know what they are. Multiply that times 6 or 8 or 9 or 12, but you need to have an emergency fund when things occur. But $400 is going to affect most people listening. Neglecting savings can leave you vulnerable and to unexpected expenses and hinder your future retirement plans.

Speaker2:
We always say pay yourself first, folks. I like the 70 over 30 plan. Some people do 9010 save 10%, some people do 80 over 20 save 20%. Some people like myself. I love the 70 over 30 plan, which means you save 30% for yourself and you live on the other 70%. Now, those of you who attend church and you pay your tithes and offerings, you can work that out. You can add those in there. All right. But listen, believe me, if you look back over your years and just think about if you'd have saved 30% of what you had coming in, put that into some type of an IRA account or an additional amount into your 401 K that's being matched by your employer, and you have the magic of compound interest over a certain number of years. Just think what you could have right now. In your retirement account versus what you may not have today in your retirement account. Okay, we think you should automate your savings by setting up regular contributions to a retirement account and emergency fund. If you set that retirement account up yourself with an IRA 401 K annuity income, annuity, whatever that might be, you've got to do it where it's automatic because if you're eligible, you should also consider maximizing your Roth IRA contributions each year to reduce the future taxes you will be paying in retirement.

Speaker2:
For those of you with a 401 K, and if you're over 59.5 where we avoid any penalties for taking that money out, we can consider. If you want to have a portion of your retirement funds to be tax free, we can consider a Roth conversion very quickly. What is a Roth conversion? We take your 401 K. Money doesn't have to be. All of it can be a portion of it. Remember we diversify. Take a portion of that 401 K funds. Put that into an annuity that allows us to withdraw 10% on an annual basis. We do a Roth conversion with that. With those annuity funds, take out 10%. Put that into that Roth. You pay the taxes on the ten. So if you have a 150,000, 10% of that is 15,000 a year. You pay taxes on the 15,000 by the time you hit that 10th year. All of that pre-tax or qualified money is now in a qualified plan and nonqualified plan. The Roth conversion and all of those funds in there are now tax free. You don't have to pay RMDs on them or whatsoever. You need to get in contact with us and ask me about, hey, Randy, I'm interested in the Roth conversion. You know the number. I'll give it to you in just a second.

Speaker2:
And we also encourage you to go online yourself. Contact us, your American retirement comm so we can show you where to access a compound interest calculation. By using this tool for just a few minutes, you'll begin to see the power of consistent savings and the magic of compound interest. I believe it was Mr. Warren Buffett that called compound interest. Uh, one of the eight Wonders or Ninth wonder of the world. Believe me, over a certain number of years, compound interest. It accumulates, it accumulates. All right, bad decision. Number four, not having a realistic budget or somebody all listening, no budget at all. How many of you all can raise your hand and say, I have never had that budget? Put your hands down. Okay. Good thing nobody saw you raising your hand. Hopefully you're not in the car listening to me and you raised your hand. People are going to be listening. All right? This is a fact. Only 41% of Americans follow a budget. And a budget is crucial, is a crucial tool for managing your finances and achieving your retirement goals. You need to be the CEO of your own household. So folks, listen, did you hear that? We're going to follow up with this and tell you why you need to be the CEO of your own household? Because we're going to tell you how to set up your income and expenses will be right back.

Speaker4:
You're listening to your American retirement. To schedule your free, no obligation consultation, visit your American retirement.com.

Speaker1:
Be clearer. Not affiliated with or endorsed by the Social Security Administration or any other government agency.

Speaker4:
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 your American retirement.com.

Speaker5:
It's a busy time of year across the sports calendar, and women's NCAA basketball is thriving like we've never seen. I'm Jim Tarabukin with the Retirement Radio Network powered by Amira Life. Each year, millions of sports fans fill out brackets predicting the winner of the NCAA men's basketball tournament. But in 2024, the women's tournament was the most successful yet. Nicole Auerbach, senior writer of The Athletic.

Speaker6:
I think we have crossed a threshold.

Speaker7:
I mean, I noticed it anecdotally among my friends that they are planning their weekends around these women's games, that they are making sure that they were going to be done with whatever work they had in order to be seated in time for that 7:00 game.

Speaker5:
Despite some structural inadequacies for many years, women's NCAA basketball has continued to grow. In the past couple of seasons, the NCAA has added the March Madness branding to the women's tournament and reached a $920 million media contract agreement with ESPN, valuing the event at 65 million per year. The most recent elite eight game, for example, between Iowa and LSU, featuring stars Caitlin Clark and Angela Rice, averaged 12.3 million viewers on ESPN platforms, the most watched college hoops game ESPN has ever broadcast. And while sky high ticket prices and soaring ratings haven't provided immunity to some ongoing logistical issues the sport has faced for years, this recent growth spurt has taken the game to new heights, so don't be surprised if you're filling out a bracket for the women's and men's side in the years to come. For the retirement radio network powered by Amara Life, I'm Jim Tarabukin.

Speaker4:
Are you interested in ways to protect and grow your hard earned money? Your American retirement is here to help. Here's Randy Sams.

Speaker2:
Hey, thanks for joining us on this week's edition of Your American Retirement. Be sure to check out the podcast version of the show on Apple, Google, Spotify, or wherever you get your podcast. All right, folks, we're talking about bad money habits and decisions. Decision number four. Bad decision number four is not having a budget. Folks, we want you to be the CEO of your own household. You have to run your house like a business. You got to track what's coming in revenue and you got to track what's going out expenses. And folks, if you have more going out than you got coming in and you're trying to run a business, how long is that business going to survive? Not very long, right? You got to live within your means, okay? Without a budget, it's easy to overspend and lose track of your financial priorities. We're going to help you create a detailed budget that includes all income sources, your revenue and your expenses. Okay. Those are your liabilities, let's say, ensuring that it reflects your actual spending habits, not what we want or what we think we can do. But what are you actually spending? How much do you go out to eat? How many movies do you go to? What whatever happens to be your actual spending and you have to regularly review and adjust. Your budget to accommodate changes in your financial situation. We should review that budget at least once a year, or whenever you experience a significant change to your regular expenses or income.

Speaker2:
Now, folks, I'm going to expand on that. A lot of times when people start making more money instead of looking at it, how I can save more money. You get a raise in income or revenue instead of we can spend more. You should flip that around to say, hey, I can save more. Remember that 70 over 30? All right. But what happens a lot of times when people get that raise and I'm happy you guys get raises. But they look at, oh, I can afford a more expensive car. Oh, we can buy a new house. So your income goes up. So do your expenses. What it should be. Let's keep your expenses level. Let your income goes up and you save that money. All right. Doesn't sound exciting, but for those of you who are getting close to retirement, I guarantee you, you wish you had done that many years ago. Number five paying too much in housing cost. Housing is often one of the largest expenses for retirees, so overspending on housing can strain your retirement budget. I always ask, we got to look at what you have coming in. We got to look at what your assets, what's your monthly income, annual income. And then we're going to ask this question what percentage of your retirement income goes or is allocated towards your mortgage? Is it 50% of your retirement funds going to your mortgage.

Speaker2:
That's too high. Way too high. All right. You got to consider your housing expenses to ensure a comfortable retirement budget. Think about downsizing or relocating to a more affordable and desirable area for retirees. All right, number six carrying a balance on credit cards. This is a fact. The average credit card debt for Americans aged 65 and older is $4,700. Now, some of you just said, wow, Randy, I wish my credit card debt was only $4,700. Oh, that's a red flag. All right. Carrying a balance on credit cards can lead to high interest charges and financial stress. Believe me, we all deal with that. Avoid the pitfalls of credit card debt and pay off your balances each month. Folks, I have nothing against credit cards if you use them correctly. You know as well as I do you see the commercials on television. You hear them on the radio, you see them in magazines. Credit card companies are offering you what they call reward programs. It may be airline mileage, it may be hotels, it may be cash back. I don't know, whatever it happens to be. There's nothing wrong with using a credit card to pay your bills. Even include your mortgage. Whatever you want to do, all your groceries, all your gas, all your expenses on a credit card as long as you're disciplined enough at the end of the month. Pay off that balance. All right. But if you continued to allow that balance to grow and you got 19, 20, 25% interest or higher, folks, that makes it impossible to pay off those debts.

Speaker2:
All right. Number seven, not having a formal retirement plan. Uh oh. Guess who you can call. You can call me. All right. Failing to plan. You're planning to fail, but failing to plan at all for retirement can lead to financial insecurity in your golden years. That's when you will need regular streams of income to cover your expenses. Including health care. All right, folks, we can put together an income report. This is something that we that we do, uh, quite often for our clients, we put together an income report that's going to show you different scenarios. What happens when you retire? How are you going to replace the paycheck when the paycheck ends? Where's the paycheck going to come from? When your employer paycheck ends or stops? And what happens when one spouse passes away? What happens to your Social Security benefits if the husband and wife are both getting Social Security and one of you pass away? A lot of people are not aware that you don't get to keep both of them. You get to keep one the higher of those two. But if you've got 4000 a month coming in and you lose 1500 of that. Now who? The surviving spouse doesn't have that same 4000 coming in. He or she has 2500. How do we account for that loss? If you let us put together that income report, we can show you exactly how we can make sure that's that surviving spouse has that same lifestyle even after one spouse passes away.

Speaker2:
Believe me, a formal retirement plan helps you set goals and make informed decisions about savings, about investing, and about spending. Many people feel like they understand their money for the first time. After meeting with us to develop a formal plan. Folks, we believe in education. We believe in educating our folks. I told someone just the other day, I was on the telephone with a couple out of Mississippi, and I told them this. They didn't know very much about annuities. We talked about annuities, and I guaranteed them one thing when we meet, if we spend an hour, an hour and a half or two hours together, even if we're not able to do business, if it's not the right plan for you. When I leave after our appointment, you're going to have a better understanding of your retirement situation, and you're definitely going to understand an annuity much better than you did when I first walked in the door. Okay. That's why it's important to give us a call at (866) 990-7664 or go to the website Your American retirement.com, because we can provide you with a complimentary consultation and a retirement plan. Again, just simply give us a call or visit our website and we look forward to helping you reach your retirement goals. Alright folks, now how about a little Social Security update for 2024? This is April 2024.

Speaker2:
Social security update last year's annual Social Security cost of living adjustment. The Cola for 2024 fell significantly to 3.2% from 8.7% in the previous year. If y'all want to do a study about the Colas, that's not something that they're given to us or given to you guys that are on Social Security, they're not given that to you out of the goodness of their heart. The Cola is based on the inflation amount. And believe me, the inflation amount in 2022 was much higher than 8.7 through your research. And probably the inflation amount in 2023 was higher than 3.2%. But that's what they gave you guys on Social Security. That's where the Cola comes from. If the if the inflation rate is flat you may not see a Cola. But here's what they anticipate. The Senior Citizens League initially estimated a 1.75% Cola for 2025, but it could be higher based on recent inflation data. The Senior Citizen League latest estimate for the 2025 Cola is now up to 2.6%, reflecting the potential for changes in the coming months. So, Randy, how come it went from one the same organization? How come it went from 1.75 to 2.6? Well, that's a good that's a good question. Uh, I would say that's probably because they see some things coming down the road that we don't may not be able to see. Not all of us are privy to. Maybe it's going to the inflation is going to jump up for whatever reason.

Speaker2:
We got a lot of what we got a lot of things happening right now around this world that can affect us here in the United States. If that affects inflation and that goes continues to go up. They're saying that the 2025 Cola could be 2.6%. Hey, it might be higher. We'll check next month and see and the next month and see. But we'll know soon at the end of this year what that Cola is going to be and how our cola how are the Colas calculated? That's easy for me to say. Colas calculated the consumer price index for urban wage earners and clerical workers. That's the CPI. W w is the metric used to calculate Colas, the cost of living adjustments, and it surged 3.5 higher in March 2024, a sign of ongoing inflation. So folks, if you have someone that you watch on TV in that particular person says, oh, our inflation is great, we've got everything under control and they're telling you a story. All right, that ain't true. Inflation surged by 3.5% in March 2024 folks. What's it going to be next month? This month the CPI, the metric used by the Social Security Administration, doesn't fully reflect health care costs, which have been increasing significantly. Those of you who are retired and having to go to the doctor's office or hospital stays, you know that's true. You see this impact, this is impactful on retirees and seniors because they spend a larger percentage of their monthly budgets on health care costs.

Speaker2:
Folks, a couple of weeks ago, we talked about, if you're if a couple age 65, you're getting ready to retire. We just use 65 as a target age during retirement medical expenses. This is premiums, co-pays, out of pocket expenses, medical expenses for a husband and wife aged 65 during retirement is looking at around $365,000. Okay. If you have medical conditions that you have to have a lot of medication, that 365,000 jumps to well over 400,000, about 423,000. And as we get older. That's something that we have to deal with. That's something that we have to address in our retirement planning or your medical expenses. And this is the big one, folks. If health care costs continue to rise without adequate Cola adjustments, retirees real buying power may decrease. That's what's that's what concerns me as inflation continues to go, if they don't take the health care costs into consideration for their Cola increases, your buying power is going to decrease. Do you need more income than Social Security can provide? If you'd like to explore your personal pension options for your investment and maximize your retirement income potential, give us a call (866) 990-7664 or go to our website. Visit our website. Your American retirement.com. Get in touch with us so we can help. Hey folks, we're going to be right back. We're going to jump right into segment four.

Speaker4:
Miss. Part of today's show, Your American Retirement, is available wherever you listen to podcasts and online at your American retirement.com.

The streets of a runaway American dream at night.

Speaker4:
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 1 p.m. right here on 101.1 FM. The answer protect your hard earned money today and schedule a free, no obligation consultation now at your American retirement.com. Fixed indexed annuities can help protect your retirement savings against market ups and downs. Nationwide's peak ten can help protect against market risk and provide guaranteed income for life. Peak ten also has an optional rider that offers an immediate 20% bonus based on your principal applied to your income benefit base. Call us now at (501) 249-2343. That's (501) 249-2343. Guarantees and protections referenced within are subject to the claims paying ability of nationwide life and annuity insurance company nationwide. Peak ten is issued by Nationwide Life and Annuity Insurance Company. Columbus, Ohio. Like what you're hearing, you can watch the show to visit youtube.com and search your American Retirement to watch clips from this program.

Speaker2:
Hey, you're listening to your American Retirement. Join us every Saturday at 10 a.m. right here on 101.1 FM. The answer where little Rock comes to talk with folks. My producer has said, we're going to we're going to talk about this notion. And this is what I really wanted to focus on. If you guys are in your 50s, remember earlier in the show when we started the show, I said, if you're in the 50s, you want to stay tuned. This is your segment that is good for everybody, but I'm just focusing on folks. If you're in your 50s, I'm going to give you three financial moves to make. If you are in your 50s. See, some people think that, well, Randy, I'm I'm 52 folks. I'm dealing with folks right now. Uh, I'm one particular couple just came come comes to mind. He's 56 and she's about to be 50. All right. But we're already putting together a plan for them because their target retirement age is going to be around 66 or 67. So they're putting together their retirement plan, taking care of their annuities, their guaranteed income. Right now, if you're in your 50s and you have the ability to be able to start a plan, now's the great time to take advantage of that. Because remember that compound interest is magic. The longer you can let that money ride and take advantage of compound interest, the higher that retirement account is going to be. When you decide you want to turn on that plug. But these are three financial moves to make if you are in your 50s, folks, people in their 50s often have multiple financial responsibilities.

Speaker2:
They include paying for your children, caring for a elderly parents, all the while trying to save for your retirement. If you find yourself in your 50s and thinking about retirement, here are three smart decisions that could save you a significant amount of money in retirement. Secure long term care insurance to cover expenses in your latter years. This is a big one, folks. You heard me before. 72% of those of you listening right now that are 65 years or older, 72% of you guys during retirement will have some type of long term care expense. Now, again, you don't have to raise your hand, but I'm going to ask you this question. Have you taken care of your long term care expenses? Who's going to pay those bills? Don't raise your hand. Again, I'm just asking the question because, listen, you got to secure long term care coverage now. Now is the time to do that. Planning health care is one of the largest expenses for retirees. Remember my example about the 65 year old couple, 365,000 during retirement, health care takes up more of our lives when we are in our first few years of life. And once again when we are older from the start to when we finish. The median price for a private room in an assisted living facility is $64,200 per year. That's the median price, folks. That's the average price, the median price for a private room in assisted living. So here's what I do.

Speaker2:
One of the options that you have for long term care is you can take out your traditional long term care plan. It's I call it health insurance, whatever you want to qualify it as. All right. It's like you're paying medical, you're paying premiums, and you continue to pay those premiums for certain benefits that you've chosen elimination periods, daily benefit, home health care, whatever it might be. But I've had consultations with too many clients of listeners that have said, Randy, I'm older now. In this long term care premium is getting more expensive, and it's becoming burdensome on our retirement income because it's not going to get cheaper, folks. It continues to go up as you get older. When do you need it? You need it to be in force when you are older and you have a long term care event, here's what I use. I use a long term care annuity. All right. The annuity that I use very quickly you have to answer a few health questions. And you can qualify for either two times or three times the benefit that you put in. So if you put in 100,000. And you qualify. 85% of the people that I do this plan for qualify for three times that benefit. So would you like to turn your 100,000 into a $300,000 long term care benefit? Most people are shaking their head. Yes. All right. It's a great plan, folks. It's an annuity. But here's the good thing. If you have a traditional long term care plan. And you don't ever have to use it.

Speaker2:
What happens to all the premiums that you paid over those years? You use it. If you don't use it, you lose it. Is that one of those you see with the long term care annuity? It's an annuity. You put the funds in there. You know that you've got three times that amount that you invested in the program to use for long term care. But if you're one of the lucky ones that don't have to have or ever have a long term care event, if you pass away, that annuity passes on whatever the amounts in there. Plus it's got some growth over those years. That amount goes to your spouse or to your beneficiaries. So to me it's a win win. It's a win win for everybody that's involved. All right proposition take advantage of that. But you got to secure long term care insurance to cover expenses in your latter years. Number two. Increase your 401 K contribution to boost retirement savings. If your employer offers a 401 K plan, take advantage of it. Free money folks. If your employer offers a 401 K match, again, this is free money where you receive an immediate 100% return on your own contributions. If you're employed and you have a 401 K, you can see your employer plan vesting schedule. In other words. You're going to be 100% vested from day one on your contributions. But on your employer contributions, you may have a vesting period of, say, a vesting schedule of five years. And after five years of employment, you're 100% vested on yours and the employer's contributions.

Speaker2:
Some people it's ten years. The one that I had, uh, when I worked at my previous employer a few years back. Ten years back, their 41K plan for their employees was a ten year vesting schedule. But once you made it over ten years, you were 100% vested in your 401 K balance on your contributions and your employer contributions. A 55 year old earning $80,000 per year could have an additional $16,779 in your retirement fund at age 67, with a 1% increase in contributions. So, folks, if you're putting back if you're contributions right now, are 5%, consider bumping that up to 6%. That's going to give you an additional $16,779 in retirement funds. If you're making 80,000 a year. And also take advantage of what I've spoken about several times over the past few months, catch up contributions that's catch not catch up, not a condiment. Catch up contributions. If you're over 50 and you have a 401 K or an IRA, the maximum contribution that you have right now is $23,000. But if you're over 50, you want to take advantage of the catch up contributions, that you can increase that amount by $7,500 every year. So instead of saving 23,000 a year, now you're up to 30,500. You start that at 50. Multiply that times ten plus any compound interest. And believe me, a lot of you listeners, a lot of folks that I deal with would love to have that 300, $400,000, 41K balance when they hit 60 plus. Let it grow there, okay? Because it's important folks to get your 401 K working as hard as you do, we invite you to call us and receive a free 401 K review so we can adjust and we can analyze the fees you're paying, the risk you were taking in the correlation of your assets.

Speaker2:
How much do you have at risk? How much do you have allocated for safe. All right let's look at number three. Diversify your tax buckets by adding money to a non retirement investment account. Every dollar withdrawn from an IRA is taxed as ordinary income in retirement. While earnings and brokerage accounts are taxed at lower capital gains rates. That's earnings on brokerage accounts are taxed at lower capital gains rates. Iras can only be opened by individuals, but you can own an investment account, joint with your spouse if you don't exceed the earnings limit. We believe contributing to a Roth IRA each year is a great way to build a nest egg to build your free wealth. Diversify those retirement funds, folks. Diversify your retirement income. You and your spouse can reach or can each. Excuse me, can each do this to maximize your potential for tax free retirement income? That's what you have to do. We want you to take charge of your retirement and financial future today. As loyal listeners again, we are offering you an opportunity to schedule a complimentary retirement and financial consultation with our expert team. (866) 990-7664 or go to your American Retirement comm. Leave us your contact information and we'll get in contact with you to set up your plan today. Folks, listen.

Speaker8:
Lemme drop this little.

Speaker2:
Bug in your ears very quickly. But did you know that the new magic number. This is the magic number for retirement? It's now at an all time high. That magic number has jumped up 15%. It's now $1.46 million. Do you have that much in your 401 K? Do you have that much in your retirement account right now? Folks, if you don't, you need to give us a call (866) 990-7664 or go to your American Retirement comm. Leave us your contact information. We'll be happy to get in contact with you. And folks, I want to thank you for listening to your American retirement. If you missed any part of today's show, you know you can go back in the podcast archives of Apple, Google, Spotify for today's show or wherever you get your podcast apps. And I want you to have a great rest of your Saturday. Go out and have a fantastic week. God bless. Go hogs. We'll talk to you next week.

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

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