What You Need to Learn During Annuity Awareness Month

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

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

Randy Sams:
Hey, good morning, central Arkansas.Want to welcome you to Your American Retirement on 101.1 FM. The Answer My name is Randy Sams. I am your host for today's show and all the previous shows that you've listened to. Hey, I want to give a shout out to all our listeners. Again, thank you for joining us. You've it's been great having all the comments, all the thumbs up on our podcast. I'll talk about that in just a little bit. But it really it really does my heart good to to read some of the comments that we've received on the website and also voicemail on the toll free number. And you know, people are listening. People are taking good notes. We've had some good consultations with some families, husband and wives, and have put together some really good what feel like retirement plans because you know, what we feel like and what we press and what we believe in at SMG Financial is you don't retire on assets, you retire on income. I'm a believer have yet to meet anybody that's in retirement or someone who's getting close to retirement that is not concerned about having enough income.

Randy Sams:
And that's what we do at SMG Financial. You got to realize that we're focused on addressing the major issues facing retirees and pre-retirees in America today. We want to help people understand, educate and be prepared for a secure retirement, not a risky retirement. So that's what we do, folks. And I want to thank you for joining us again, Your American Retirement. And if you want to join us on the podcast, you can go to YouTube, Spotify, wherever you enjoy your, you know, watching the podcast, go to YourAmericanRetirement.com, you'll see my smiling face. We don't put the whole show on the podcast, folks, so we're not going to make you eat the whole bale of hay. Well, we believe in is, hey, we're going to look at the show, watch it, and we're going to pick a few of the spots that we feel like are most important. And from there, then we're going to put that on our podcast and that's what you're going to see. So you're not going to see one hour, okay, You're going to see about two minutes, maybe three minutes, depending on how long the segment might be. Just to kind of give you an idea of what the show is about and then what we want you to do. First of all, give us a thumbs up. Tell your friends and family about it, because we love all the comments, like I've said before, that we're getting from all our listeners and all the appointments that we've had, the free consultations, love meeting you, the clients, our listeners face to face.

Randy Sams:
But hey, I want to give a little public service announcement, PSA, I think that's what you call it, right? Psa Public Service announcement. I will be doing a retirement planning seminar. Dinner seminar, folks, do you hear that dinner seminar on June 13th and June 15th. So when you hear this show, if you're listening and you would like to attend, we still have spots available for both the 13th and the 15th. So take this number down. It's 1-800-767-2157. Again, 1-800-767-2157. And tell the person that you speak with that you want to attend the retirement seminar with Randy Sams and you pick the date. It's going to be at 6:00 both days and it's going to be at the Saltgrass Steakhouse, which is behind the Bass Pro Shop just off the interstate. Just, you know, we're 430 and guess 30 intersect right there. All right. Is right where the outlet malls are. You'll see the Bass Pro shop and right behind the Bass pro shop, you will see Saltgrass Steakhouse. And we'll be having two dinner seminars starting at 6:00 on June 13th and the 15th. We'd love to have some of my listeners there. You're just going to hear a little bit more in detail of what we talk about when we meet face to face about some of the other products and subjects. Again, we're not there to sell. We're there to educate. All right. It's an educational seminar from there. The people that want to have a consultation after the seminar.

Randy Sams:
Then we have a form that you can fill out and we'll set up a time to come meet you face to face. But hey, again, June 13th and 15th, 6:00 Saltgrass Steakhouse in Little Rock. (800) 767-2157. Get your spot reserved for either the 13th or the 15th. Also, folks, I live in Saline County, and there's a lot of issues going on with the public libraries. Okay. Saline County Library, for example. So I want you to go to a website, Saline Library.com. That's saline. S a l i n e library. Library.com Saline Library.com. Take a look at just some of the books that they have in the public library, the Saline County Library that's in Benton and Bryant. Okay, That's all I'm going to say about it. You be the judge. Do you think your children should have access to the types of materials that we have posted on Saline Library.com Anyway, on with the show, folks, we're going to talk about retirement planning. Hopefully you go to the website YourAmericanRetirement.com. Leave me your information, leave us some good comments, bad comments, critique something that you might want us to talk about later on in some of the upcoming shows. Or you can leave me a voicemail at 86699076648669907664. Love to hear from it. And hey for today for our listeners, if you get in touch with me, you're going to receive a free report on the widow's tax. Most people don't understand the hardships that surviving spouses must endure, so this report will help you ask the right questions and take proactive steps towards protecting your loved ones after you are gone.

Randy Sams:
The report is yours today, absolutely free if you give me a call again. (866) 990-7664 and I'll get that free widow's tax report in the mail to you. Hey. Let's jump right into it, folks. You know, we're going to do the the financial wisdom quote of the week, but we're going to probably put that off till the second segment and also kind of a hint. So you don't leave me standing here all alone. June is Annuity Awareness Month. What people need to Know. About this valuable tool. So we're going to spend a little time probably in segment two and maybe segment three of the show talking about annuities and annuity awareness. All right. So. Let's look at five keys to a debt free retirement. This is something that everybody should be listening to and writing down. So if you're getting close to retirement, if you're in your 50s, you're in your 60s and you're getting close to retirement. Take notes because we want to help you avoid the headaches during your golden year. So five keys to a debt free retirement. Number one. First things first. Start with financial planning. So like many other things in life, a little planning can go a long way when it comes to retirement. So you're going to want to avoid building new debt. Once you retired. Debt is not a good word in retirement, is it? So it's it's crucial. To have a good understanding of what your essential expenses are and the sources of guaranteed income.

Randy Sams:
There's that word again. Guaranteed income. That you can tap into for your day to day cost of living. Folks, you know how we do about we go about that Hey, what is June Annuity Awareness month? We're going to put together a guaranteed lifetime income annuity for you and your spouse to where we can make sure you have guaranteed income to take care of those basic expenses. Okay. So we want you to meet with us to talk about annuities. And attacking the income gap, if there is is one. All right. Now, number two, let's consider downsizing. If your kids. Are now out of the family home. What's that called? Empty nesters say now might be the great time to sell your house and move somewhere You can enjoy your retirement better. And I'll leave whether or not if you move, whether or not you're going to notify your children where you actually moved to. Okay, now I'm just kidding. All right. But many of our clients enjoy living at the lake near the Beach Country club, living there closer to their children, grandchildren. And they can't plan, you know, they can't wait to plan their next visit. Number three plan for future health care expenses. Folks, that's very expensive. Very important, I should say. Health care expenses with the cost of health care services on the rise, it's important to take time to plan your future medical expenses during retirement. Folks, that's something that we talk about. We're going to talk about Medicare, Medicare, Medicare Advantage, prescription drug plans, and we're going to talk about long term care.

Randy Sams:
Do you have it? Do you need it? We got to we have to take into future health care expenses into consideration. Number four, make plan to be debt free. We just spoke about that. Start off paying off your high credit cards. Take them. So the happiest retirees that we know of have paid off their mortgage. They don't have any credit card debt. Now, folks, I'm not against credit card debt as long as you utilize it wisely. In other words, if you want to put all your expenses, your monthly expenses, your utilities on a credit card, but you pay them off at the end of the month just to be able to accumulate those reward points, that's fine. But make a plan to be debt free. And number five, consider a side hustle. And smart investments. Don't just retire relaunch. Many happy retirees keep themselves busy while generating extra income in the process. So whether it's turning your hobby into a side job or meeting with your advisor to discuss smart risk investments, you can make the most of your retirement by trading your extra time or money for future gains. So folks, that five tips going into retirement How to be debt free. Hey, I want you to come back. We're going to jump right into June is Annuity Awareness Month and we're going to talk about annuities. Again, you're listening to Your American Retirement 101.1 FM. The Answer will be right back.

Producer:
Visit YourAmericanRetirement.com to schedule a free consultation with Randi today. And now back to the show. Hey, welcome.

Randy Sams:
Back, everybody. I missed you. Hopefully you missed me. Also, again, you're joining Randi Sams, Your American Retirement on 101.1 FM. The Answer. Let's get right into it. Hey.

Producer:
And now wholesome financial wisdom. It's time for the Quote of the Week.

Randy Sams:
Don't want to miss giving you the financial wisdom quote of the week. We're going to start this segment off with the quote of the week. You ready? Here it is. The time to repair the roof is when the sun is shining. That makes sense. The time to repair the roof is when the sun is shining. That is given to us by John F Kennedy. America's 35th president, spoke these words during his State of the Union address in 1962. The message still rings true today that those who plan in advance for rainy days. We'll be more prepared to endure any storm that comes their way. So the time to repair the roof is when the sun is shining. Okay, Prepare now for those rainy days. All right. June is Annuity Awareness Month. I've got a couple of articles that I want to just kind of run by you very quickly. We're going to talk about the importance of annuities. All right. Again, Annuity Awareness Month is an observance that takes place in June each year. It aims to educate people about annuities and their potential benefits as part of a retirement plan. Now, what I've got here is article. It's from Thinkadvisor. From May 30th, 2023. Americans with annuities want more. Annuities. This is a survey. The survey was conducted by the American Council of Life, Insurers and Americans who already own annuities or other products that provide a guaranteed source of guaranteed source of lifetime income. Love the idea of buying more annuities.

Randy Sams:
Folks, I've met with people that have had 4 or 5 annuities. I think Tom Hegna says he has 11 annuities. All right. There's not a limit. That you had that you can and cannot have. As far as the number of annuities, it's based on your financial situation. All right. So, listen, the American Council of Life insurers came up with data on how familiarity with annuities breeds love for annuities when it sponsored a recent survey of 1003 US retirement savers between the ages of 45 and 65. About 26% of the survey participants. That was easy for me to say, wasn't it? About 26% of the survey participants said they already owned annuities and 86% of the survey participants who owned annuities said they were somewhat or very interested in buying more. So roughly 73% of all the participants 7,076% of the participants with pension plans and 67% of the participants without annuities said they wanted annuities. So you had folks that already had a pension plan, a guaranteed stream of income. 76% of those people said they wanted annuities. And then you had 67% of the participants that did not have annuities said they wanted annuities. So what does it mean? Consumers who already have a guaranteed source of retirement income might be better annuity prospects than consumers who have no guaranteed source of retirement income other than Social Security. Okay. So. The American Council of Life Insurers is a Washington based group. When they conducted the survey. They avoided triggering any hostility towards the term.

Randy Sams:
They're about to use that a word annuity by referring to an annuity as a guaranteed lifetime income product that pays out like a pension by providing periodic. Payments during retirement. So what is an annuity? Guaranteed lifetime income product that pays out like a pension by providing periodic payments during retirement. All right. So make sense. So people who already have annuities, they see how the annuities have worked for them, either a guaranteed income or protection from market volatility. And they said that they would want additional annuities. They would add to what they already have. I like that. Okay. Most retirees want a retirement planning do over. More than 60% of retirees would like to go back and plan differently from their retirement if they could. According to a recent study from Lincoln Financial Group, with the vast majority saying they wish they'd started saving earlier and saved more for retirement. I hear that quite often, folks. A lot of folks I meet with wish they'd started saving for their retirement a lot earlier and they wish they'd saved more. So other would have, could have, should have. Reflections include choosing investments that provide a steady stream of income. 63% reporting. They'd like to receive an automatic paycheck from their retirement assets and planning better for the unexpected. Like inflation and market volatility. 85% were interested in investing in solutions that protect them from losses during market volatility. Guess what that is, folks? That's an annuity.

Randy Sams:
All right. Safe money, investments, a safe money product. So the Lincoln Financial Group released new data just ahead of Annuity Awareness Month. So this came out six days ago to reinforce the roles that annuity can play in holistic financial planning as tools to help provide lifetime income and protect and grow retirement savings no matter how the market performs. So there aren't many opportunities for a do over when it comes to retirement planning. Yet two of the major concerns that retirees voiced in this study were guaranteed income and protection from loss. Are you listening? Guaranteed income and protection from loss. And both of those concerns can be addressed with annuities. All right. So jumping into Annuity Awareness Month, it's a good time for investors to work with a financial professional to understand how and why Incorporating annuities into your financial strategy can help them retire confidently without regret. Hey folks, give us a call. (866) 990-7664. (866) 990-7664. Or go to the website YourAmericanRetirement.com. Leave us your contact information and we'd be glad to sit down with you and talk to you in more detail about guaranteed lifetime income annuities, how to protect your funds from loss and give you a guaranteed stream of income. All right. What is an annuity? This is my simple explanation. When I speak to folks in my terms, an annuity is a risk transfer product. Okay, so annuities are financial products typically offered by insurance companies that provide a steady stream of income that cannot be outlived.

Randy Sams:
So that's the risk we're transferring. It's called longevity risk. We're going to transfer that risk of us outliving our funds, our retirement funds from being on our shoulders. We're going to transfer that risk to the annuity company, to the insurance company, and have them give us a guaranteed lifetime stream of income for yourself and for your spouse. Okay. So when used correctly as recommended by financial advisors or financial professionals. These personal pensions can play a critical role for retirees. All right. So if you don't if you're not one of the lucky few who have a an employer that is going to offer you a pension plan, and that's more than probably 85% of the folks that are listening today. You can set up your own personal pension via if you have funds in an IRA or a 401. K, you can transfer those funds into an income annuity and you can set yourself up with your own guaranteed stream of lifetime income. All right. Can never outlive it. That's what's great. So similar to Social Security, annuities pay an income that you can never outlive. What makes annuities different from Social Security is that annuities are required to maintain at least 100% financial reserves. So that means, folks, it's called solvency ratio. That means that an insurance company has to have the cash on hand to pay all their annuity owners. All right. Remember, solvency ratio. If you go to your local bank, ask them what their solvency ratio is.

Randy Sams:
Did you know, folks, that banks do not have to have a solvency ratio of 100 or above, which means that if they have a solvency ratio of 85, guess what? For every $100 worth of liabilities, they only have $85 in assets. I don't like that. Okay. With an insurance company slash annuity company. It has to be 100% in reserve. So we're going to look at financial companies, annuity companies that have reserves, solvency ratios of 104, 106, 109. It may be higher than that. I'm just using that as an example. But it gives you the peace of mind knowing that the companies that we're going to be dealing with, they have the funds in reserve where you don't have to worry about it. All right. Social Security is also subject to government volatility. Don't we all know that? The Social Security Administration has projected that its trust fund reserves could be depleted by 2034, which will likely lead to a partial cut of benefits. Okay, now, folks. Those of you who are on Social Security, I know this is a I mean, this is a pain point. Some people are worried, concerned about, you know, Randy, what happens if at 2034 or 2035 or whatever that point in time may be in the future that they decide that they're going to lower my Social Security by 30%? Okay. Folks. The average Social Security for 2022, I believe, was just over $1,500. All right. So 30% of that would be 450.

Randy Sams:
So you're going to take someone if they have to make that decision about ten years from now. You're going to take someone that has been living off the $1,500 been maybe that took care of their expenses. I don't know. But you're going to knock them down to now just a little over $1,000 a month. That's. That's crazy. Okay, But we can avoid that with a guaranteed lifetime income annuity where you don't have to worry about it. It never decreases and it's never going to stop until you pass away. And if we set it up correctly, your spouse is going to get the same exact amount that you've been getting month to month to month for the rest of their lives also. All right. So let's look at some myths. All annuities are bad. There are many different annuities out there, and here are some of the most common types offered in the marketplace today, Folks. I'm going to talk about them and then we're going to come back in the next segment and we're going to go into more detail. You have immediate annuities, you have fixed annuities, you have indexed annuities, and you have variable annuities. We're going to spend some time. And go into a little bit more detail on each one of these and kind of give some examples on how they're going to work for you. Hey, you're listening to Your American Retirement. My name is Randy Sams 101.1 FM. The Answer. We'll be right back.

Producer:
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Producer:
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.

Producer:
Any bonuses mentioned may be subject to additional restrictions and regulations based on the offering annuity company. You may not receive the bonus if the contract is fully surrendered or if traditional annuitization payments are taken and if the policy is partially surrendered, it could result in a partial loss of bonuses because these are bonus annuities. They may include higher surrender charges, longer surrender charge periods, lower caps, higher spreads, and other restrictions that are not included in similar annuities that don't offer a bonus feature.

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

Randy Sams:
All right. Welcome back. Your American Retirement on 101.1 FM. The Answer. We're Little Rock comes to talk. I am your host, Randy Sams. I want to thank you for joining us today, folks, We've had some good information given out. We're going to go a little bit more into detail. And again, we're speaking about Annuity Awareness Month. The month of June is Annuity Awareness Month. So it's hopefully going to educate people about annuities and the potential benefits as part of a retirement plan. Folks, I'm a big believer in annuities. All right. So I know how many annuities I have. It's more than one. Okay. It's less than ten, but it's more than one. So. I know. I believe in protection. You see, for me, I went through 2008. And I saw the big four one decrease by 4,045%. But luckily I was young enough at that point in time was not you know, I was far away from retirement at that time. That I could ride that out. But it took six years for my 401. Balance. To basically get back to the level it was in 2008. Folks, you can't afford that when you're in retirement. If you have money in an IRA or a 401. That you're removing on a monthly basis and you lose 25, 30%, 40%, folks, it's almost impossible to get that money back. That's why people are stressed out. And that's what we at SMG Financial, Your American Retirement, are focused on, is educating you on the products that we can put you in, set you up for a happy retirement, not a risky retirement.

Randy Sams:
So, hey, if you joined us the last segment, we talked about different types of annuities. We're going to spend a little bit more time on that in this segment, kind of educate you on some of the different aspects of the annuities and how they can be, you know, how they can work for you. So we're going to start off with immediate annuities, sometimes called single premium, immediate annuities. That's called a sPIa, sPIa, Single premium, Immediate annuities. A sPIa will provide an income stream after a lump sum payment. So many corporate and public pensions are actually funded using Spias, which is why we sometimes recommend taking a lump sum a lump sum payment considering more lucrative annuity options offered by top carriers in the marketplace. All right. So so how can we use a sPIa? All right. So let me give you an example. I use a spear the most often that I've used a spear is what I call a Social Security bridge. All right. As an example. So if you're getting close to age 62 and you know that 62 is when you can turn on Social Security. But your full retirement age is 67. What I mean by full retirement age, that's when your full retirement benefit kicks in is at age 67. That's five years. So, folks, if you turn on your Social Security at age 62 versus age 67, you're going to receive almost 30% less on a month to month basis for the rest of your life because you turned it on five years early.

Randy Sams:
So here's how we can use a spear. We can take a portion of your 401. K and we can put that into a five year period certain sPIa, which means that we're going to have a guaranteed payout for the next five years. That's going to carry you. It's going to bridge you from age 62 to age 67. When at that time, at age 67, you can turn on your full retirement benefit. All right. Because folks, like I said, if you turn it on at age 62, you're stuck at that amount for the rest of your life. All right. That's 30% less. For the rest of your life. So, you know, let's say the average Social Security was 1500. If you turn it on at age 62, your Social Security benefits are going to be just a little bit over $1,000 a month. You're giving up $450 a month for the rest of your life. So when you hit age 67. That five year spear was set for five years. It's gone away. Those payments stopped. But guess what you do then? Then you turn on your Social Security full retirement benefit, age 67. Social Security benefit. And then, boom, you're you're ready to go. So that's how we can use a spear. As a Social Security bridge. All right. I can also use it in different ways, but that's the majority of the time when I use a sPIa, is talking to folks that want to go from age 62 to 67 or they want to bridge the gap from 67 to 70.

Randy Sams:
Because as many of you know, at age 70, that is when you can receive your maximum Social Security payout. All right. Now let's go on to the next one. Fixed annuities. Fixed annuities offer a fixed rate of return like a CD. Folks, it's now it's not a CD, but I use that as an analogy, as an example where most people understand what a CD is. All right. So you're receiving a fixed rate of return for a specified period. Three years, five years, seven years, ten years. All right. So I refer to a fixed annuity as a Miga. Miga that stands for multi year guarantee annuity. All right. So let me tell you how I can provide income using a Miga. So we can do a mega, a five year, a seven year, a ten year mega. And we can take let's say we take 200,000. Let's say you've got. You've got 400,000 in your 401. K. You've got a pension plan. You're pretty well set up. Your Social Security is good, but you would like to have a little bit additional income on a monthly basis. And I call those a play check. A play check. Play check. So we'll take 200,000 of that 401. K money and let's put it into a mega. Let's do a five year, seven year, ten year mega.

Randy Sams:
Okay, so let's take a seven year mega. Just go right in between. Right now, they're paying about 5%. So we can take your 200,000, put that into a seven year mega, and then we would choose a mega that gives us the ability to withdraw the interest payments. All right. So for the next seven years. Own your $200,000 investment. You're going to receive $10,000 a year guaranteed for the next seven years. All right. And at the end of seven years, guess what's waiting for you. Your 200,000. Your initial investment of 200,000. Your initial premium. All right. So we can use a manga as to give you a guaranteed income stream. All right. And the good thing is, is that at the end of that seven year or ten year period, you still have your initial investment waiting for you. And at that time, we make a decision, do we want to do that again or do we want to put that 200,000 into a different type of product? All right. So. Indexed annuities. Offer lifetime income with returns based on the performance of an underlying stock market index. All right. So your money is not invested in the stock market. Till people who own indexed annuities enjoy market like gains without the risk of losing their principal in the stock market. So zero is your hero when you're dealing with an indexed annuity. Now, folks. Probably 90% of the annuities that that I work with my clients and we put in place for our clients, our indexed annuities.

Randy Sams:
All right. Again, your money is not invested directly in the index. You're buying a participation rate or you're buying into a cap. All right. So if that index goes up 10%, so it starts out at 100 and at the end of one year, it's up to 110. Just as an example, that's a 10% increase. You may have a 70% participation rate. So 70% of 10% is what, 7%? So you get a 7% increase on what amount you had. In that strategy. All right. I'm not going to go too deep into that. But also with the indexed annuities, what we can do, we can use an indexed annuity for growth and protection, or we can use an indexed annuity for income. So with those, if we're looking for income, we would attach an income rider. All right, now an income rider has a fee. Some fees are less than 1%. Some fees are one, 1.1, 1.3. Some are higher. All right. But with the fee, what you're buying is guaranteed. So you got to consider is my 1% fee that I'm paying on an annual basis, Is it worth the guarantees that I'm receiving in return? Giving an example. If I have an annuity that has a 1.1% annual fee, but we're guaranteeing you 7% compound interest. For ten years. And then years 11 through 15, we're guaranteeing you a minimum of 4% compound interest. So that 1.1% is buying you a guaranteed 7% for the first ten years and a guaranteed minimum of 4% years, 11 through 15.

Randy Sams:
All right. I also have another annuity not going to mention companies, but their fee is 1.3%, a little bit higher, but they are guaranteeing you 8% compound interest growth for the first ten years. All right. Plus, that 1.1, that 1.3% is guaranteeing you what it's guaranteeing you your lifetime income. So that's what we want to look at. All right. Variable annuities, folks, I do not do variable annuities. I don't have my license to do variable annuity, so I can't talk about that type of product very much other than the fact what it is and what it does, it offers returns based on the performance of an index. Where your money is invested directly into that index. However, the value and the income can fluctuate greatly based on market participation or market performance. Folks, these are the annuities. When you hear investment advisors, money managers, when they say we don't like annuities because they have high fees, they're talking about variable annuities. Variable annuities have high fees. The indexes that you're invested in, they charge fees. You're buying. Guarantee payout. You buy a guaranteed death benefit. They have fees. All right. I'm working with a young lady right now. I'm not going to mention the company. I will just tell you that in 2014, she invested $400,000. That's what, nine years ago. And at the end of 2022, her account value was $492,000. It had only gained 92,000 over that nine year period.

Randy Sams:
But guess what, folks? She'd paid almost $50,000 in fees for that variable annuity. So, folks, that's why I stay away from them. I can't sell them, first of all, but I don't believe in them. Because you remember at SMG Financial, I'm a big believer we want to eliminate risk. And market volatility is one of the risks we want to eliminate. Remember, you've worked too hard to get where you're at today. We want to get you to a point where you don't want to lose. Okay? So if you currently hold or you think you hold a variable annuity or any other type of annuity, call me for your free annuity x ray where I can help you understand your annuity and present different alternatives that could improve your future income potential. All right, give us a call. (866) 990-7664. (866) 990-7664. Or go to the website. YourAmericanRetirement.com leave us your contact information so hey Randy I'd love to sit down and have you review the annuities that I have currently because folks guess what the annuities that I market today. Are different than the annuities that I market that I had two years ago, five years ago. All right. They're evolving. They're getting more customer friendly. All right. I love the annuities, especially today. So give us a call again. (866) 990-7664. Go to the website Your American Retirement and let us set up a annuity x ray. Let's evaluate. We're going to be right back again. You're listening to Your American Retirement 101.1 FM. The Answer.

Randy Sams:
Hey, welcome back, everybody. I want to thank you for joining me today. Hope your Saturday has been great so far. Thank you for listening. Remember, June is Annuity Awareness Month. I love it because I am a big believer in guaranteed income. So you give us a call. (866) 990-7664. We talk about retirees. We talk about pre-retirees. So here we're going to talk about avoid this common mistake that pre-retirees make. It's much more important to improve your annual income potential during retirement. It's much more important to improve your annual income potential during retirement rather than grow your nest egg to one big magic number. So most people focus too much on maximizing your 401. K's and your IRAs, forgetting that these tax deferred retirement accounts are subject to income tax and required minimum distributions. A lot of y'all know what an RMD is because you are in retirement and you are at that magic age. Some of you had to start taking RMDs at age 70.5 and this year they raised it to 73. So if you turn 73 this year, guess what? You have to start taking those RMDs. So this means that your nest egg isn't as big as you thought it was. Uncle Sam will force you to take withdrawals as you age. That's what is called the required minimum distribution, whether you want to take it or not. Uncle Sam says, Hey, Randy, once you hit this age, you have to start taking out this amount of your any type of qualified plan.

Randy Sams:
401 K 403 B, IRA, anything that's been taxed, deferring over a number of years. So keep in mind that the more money that you have at risk in the market as you get older, the more you stand to lose when it comes to your future retirement lifestyle. And folks, we like to use the rule of 100. What is the rule of 100? Basically, the rule of 100 is a tool that has been used by financial professionals such as myself, to provide our clients with general guidelines for proper allocation of your retirement and investment assets. So the rule of 100 takes into consideration your age and the investment time horizon to better define your risk tolerance. So the results of this analysis can be used to determine how much of retirement and investment assets should be exposed to risk and loss. All right. What are we focused on at IMG Financial? We want to remove as much risk as we possibly can. Okay. So the rule of 100 uses your age as a baseline in the calculation to appropriately allocate assets. So the calculation begins with the number 100. You then subtract your age from 100 and it gives you a snapshot of what percentage of your retirement assets should be in the market at risk and what percentage of your retirement assets should be in safe money. No risk. So adjustments can be can be applied, you know, through the analysis as you get older.

Randy Sams:
This strategy, the rule of 100 using this strategy will reduce your exposure to undesirable market risk and volatile market swings that most people experienced, like I mentioned earlier in 2008, resulting in significant loss. So here's an example. I have a 65 year old client has $100,000 saved for retirement. So we're going to apply the rule of 100. We're going to start with 100. We're going to subtract 65, which is their age. And that's going to leave a remaining value of 35. So in this particular example, the client should have no more than 35% of their funds or $35,000 of their assets at risk in stocks or equities. So that means they should have 65% or 65,000 of that retirement, their retirement assets to be allocated to save money alternatives. So this is why it's important. If the client within this example had 100% of their assets invested in the stock market, if the stock market declined 40%, a significant portion of their nest egg would have experienced a loss. It will take 66.6% return on investments, in other words, increase to regain their original principal. So by applying the rule of 100 to asset allocation, we could have dramatically reduced the client's losses in their portfolio. So, folks, that's the rule of 100. So you just take your age, take that away from 100, and that should be what you have. In other words, if you're 70, that tells me you should only have 30% of your retirement assets at risk.

Randy Sams:
The other 70% should be. In safe money alternatives. No risk. Does that make sense? Being prepared for the loss of a spouse. Folks, deal with this quite a bit. I deal with it. It gets tough from time to time when I'm dealing with with couples where one of the couples has been diagnosed with an illness that they know they're probably more than likely not going to recover from and they know the inevitable. So what our focus is when we meet is to make sure that the surviving spouse, when that happens, that surviving spouse has been taken care of. So I think it's very noble that folks will will face that fact. And I think it's great that they want to make sure that the surviving spouse is taken care of. I'm dealing with a couple of I'm dealing with a client right now, a couple right now that that's the husband's objective is to make sure that when that time comes that his wife is going to be taken care of. All right. So preparing for the loss of a spouse. So it's important to understand that the large majority of married couples are going to go through this particular event at some point in time in their life. It's not it's not common for couples to pass away at the same time. So usually, you know what the statistics, the mortality tables always state that females are going to outlive males. Okay. It doesn't always work that way, but the majority of the time you're going to see if the average age if you look at the average age of a 65 year old male versus the average age of a 65 year old female, as far as when they're going to die, how far out they can live, you can be looking at maybe 82 for the male, maybe 85 for the female.

Randy Sams:
Some of them may go 85 for the male and 88 for the female. All right. And just a little hint, married couples live longer than those of us or those who are single. I shouldn't say those of us. I've been married for 40 years to my beautiful wife. Okay. So if you're married, it's going to help you out. You should live longer. Hopefully you have a happy, happy marriage. Meet with us. We'll set you up with a happy, happy retirement. All right. So here are some of the challenges that surviving spouses face upon one of the spouses death. They will immediately lose approximately 33% of their Social Security income because the smaller of the two benefits go away. Now, folks, I've been surprised at several consultations that I've had with clients couples when I let them know that if the husband passes away first, the wife doesn't get to keep her Social Security and the husband's Social Security. If the husband's is the highest, okay, you're going to keep the highest. So if the husband has a higher Social Security benefit than the than the wife, then when the husband passes away, the wife is going to have to let her go, but she'll be able to keep the husbands and vice versa.

Randy Sams:
If the wife has the higher of the two Social Security benefits and the wife passes away first, then the husband will not be able to keep his and take hers. Also, he'll have to drop his, but he can take his wife's. Okay. So you're going to lose approximately 33% of your Social Security income, 33% of your monthly income because one of those Social Security checks is going away. So as soon as the Social Security Administration and the bank received the death certificate, those additional deposits that you were receiving will stop the year after the spouse passes away, you will face a higher income tax bracket as a single filer. You will also need to file taxes for your spouse the year of their death. Okay, so you will lose a tax deduction because you are no longer married. You will now have to file single. Your Social Security will be taxed at a higher rate. Why? Because you're not married, you're single. Your Medicare surcharges will go up because you are in a higher tax bracket. And you must face all of these new financial challenges right after losing your spouse, your partner for life. Okay, so widows or widowers who meet with us will never have to face these challenges alone. Our clients know that we are there for them during the good times and the bad times.

Randy Sams:
I've had several annuity clients where the husband has passed away and that annuity is now passed on to the spouse and I've helped them work that out to make sure their their income remains for the rest of their life also. So the husband did a great job. They both did a great job making sure that they had income that they would never outlive. So if you or someone that, you know, recently lost their spouse and is experiencing the burden of the widows tax, please give me a call (866) 990-7664 and let us share some of the information or go to the website YourAmericanRetirement.com. We'd love to be able to sit down so how to prepare for the widows tax? It's one of the things that we will talk about if we meet. If you don't have a solid retirement income plan as a provider and breadwinner for the family, then we strongly encourage you to get in touch with us as well so we can help you build a plan that will keep your spouse and your family safe after you are gone. So again. If you you're listening right now and you don't have a solid retirement income plan as a provider and the breadwinner for your family, then we strongly encourage you to get in touch with me as well. Get in touch with me so we can help you set set up a plan that will keep your spouse and your family safe after you're gone.

Randy Sams:
So it's important to be working with an advisor or a financial professional before you pass away. And ideally before your health ever begins declining. That's why we can talk about that's when we can talk about long term care. Now, there's other assets that we can we can use. We can use a long term care annuity where it still takes into consideration some of your health situations, but it's not like a traditional long term care plan. So before you pass away and ideally before your health ever begins to decline, give us a call. So the more time that we have to work with you, the more options we will have and the better off you and your family are likely to be. So, folks, again, I want to thank you for listening to today's show. And you know, when I began the show, what did we speak about? I want to just make this one plug again. I'll be giving a retirement planning seminar, an educational seminar on June 13th and the 15th starting at 6:00 at Saltgrass Steakhouse. (800) 767-2157 807 672157. Call that number if you'd like to join us. Pick what date? 13th or the 15th. I'd love to see you there. Hey, thank you for joining again. My name is Randy Sams. You've been listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. Have a great day.

Producer:
Thanks for listening to Your American Retirement. You deserve to work with licensed financial insurance experts who can offer sound strategies for protecting and growing your hard earned money. To schedule your free no obligation consultation, visit YourAmericanRetirement.com today. That's YourAmericanRetirement.com.

Producer:
Not affiliated with the United States government. Randy Sams does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amerilife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness or of the results obtained from the use of this information.

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