Will Social Security Be Around When You Retire?

3.24.23: Audio automatically transcribed by Sonix

3.24.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

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

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

Randy Sams:
Hey, good morning, central Arkansas. Want to welcome you to today's show. My name is Randy Sams. I'll be your host for today's show, Your American Retirement on 101.1 FM. The Answer, We're Little Rock comes to talk, folks. You know, those of you who have been faithful listeners just want to give you a shout out. Thank you so much. We've gotten some really good feedback from folks that have been with us from, you know, we're going on close to about a year now, and we've got some faithful listeners telling some of their friends and family members about the show and tell you a little funny story. I was at the doctor about a week ago and had my annual checkup and had to give blood. And one of the young ladies that was going to take my blood basically said, You have a voice. Sounds like you should be on the radio. And I said, Hey, guess what? I am on the radio. She got really bug eyed and said, Really? So she had to go tell her friends. I said, Yeah, you can join me every Saturday morning at 10:00 on 101.1 FM. The Answer Your American Retirement.

Randy Sams:
It's what our show is about. So, hey, again, I want to thank you for listening. It's Saturday morning. By the time you listen to this show this Saturday, the Razorbacks will have already played. I believe it's Connecticut. Hopefully we'll have some some good news where that is concerned. If you look at the YouTube podcast, you'll see that I have on my Razorback shirt today just kind of supporting the Razorbacks. They looked really good. But anyway, hey, look, let's get let's get down to business, folks. Look again, my name is Randy Sams. I am president CEO of SMMG Financial. I've been in this business for 36 years. I've been as an independent agent, agency manager, and also have been on the corporate side, the insurance company side. I've been in 2 or 3 executive positions, running senior division for one of the largest companies in the in the nation, helping them develop products, helping them develop distribution. So I know a lot about the market, about the senior market. And you know what we do at SMMG Financial, folks? We want to make sure you understand we're focused on addressing the major financial issues facing retirees and pre-retirees in America today. We help people understand and prepare for a secure retirement, not a risky retirement. So, folks, if you're listening to this, I've got several people that have given me great comments, giving me great feedback, giving me great suggestions on future shows, and we're taking those to heart. We will have future shows. We'll be based on the subject matter that you guys are leaving for us.

Randy Sams:
But hey, you can go to the website YourAmericanRetirement.com. Leave me your information, leave me your comments. I'll be glad to reach out and just touch base with you. Have a have a have a conversation about how life is. You know, some of the things that concern you in your retirement and then from there, if you want to meet face to face, then we can set up a consultation or you can go to our you can call our toll free number (866) 990-7664. That's (866) 990-7664. Or direct 501 249 2343. So please reach out. Leave us a message. We'd love to just talk to you. There's no obligation, folks. So again, listen to our podcast. Wherever you get your wherever you listen to podcasts, go to our YouTube channel, check out the YouTube channel and subscribe to our weekly video highlight. So, folks, if you go to the YouTube channel, you're not going to see the full one hour show or 45 minute show like what you're listening to here on the radio. We take little segments about anywhere from 2 minutes to 5 minutes of the show, some of the highlights of the program, and we put that on our YouTube channel. So please search the name YourAmericanRetirement.com. You'll see my smiling face. Give us a thumbs up. Subscribe to the channel, tell all your friends and family because we want to be able to reach as many people as we can and remember. Reach out to us because we absolutely love reading and hearing from you, our listeners.

Randy Sams:
We want to listen to your and read your messages. Be Be happy to Answer any of your questions on the show. If you leave suggestions or during a complimentary consultation with you or you and. Your spouse. So, hey, listen, this is a free offer to our listeners. If you're listening to today's show, if you'll get in contact with me and remember, go to the website YourAmericanRetirement.com or toll free (866) 990-7664. If you'll get in touch with me you will receive we'll send you a free copy of 23 retirement cost cutters for 2023. This is a free report and it's yours today when you get in touch with again YourAmericanRetirement.com. That's YourAmericanRetirement.com or toll free (866) 990-7664. So what about today's show folks we're going to start with the quote of the week. I like this one. Then we're going to look at I think some of you people have probably been listening last week kind of covered what happens to the banks. We're going to kind of do a follow up on that and then we're going to look at a couple of problem solvers as far as clients that we've worked with. And then we're going to look at Social Security. Will Social Security I get asked this all the time. Will Social Security be around when you retire? Okay. So some of the subjects we're going to talk about today on today's show. So thank you for listening. But hey, listen to this. The financial wisdom, the quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the quote of the week.

Randy Sams:
We should remember that good fortune often happens when opportunity meets with preparation. Is that perfect practice? So kind of the same thing we should remember that good fortune often happens when opportunity meets with preparation. That quote is from Mr. Thomas Edison. Thomas Edison was an American inventor and businessman. His inventions had a widespread impact on the modern industrialized world and include the phonograph. Motion picture camera and the electric light bulb. When asked about creating the light bulb, Edison said, I have not failed 10,000 times. I've successfully found 10,000 ways to not make a light bulb. And folks heard this the other day. You know, if it wasn't for Thomas Edison and him creating the light bulb, we'd have to watch TV in the dark. Think about that for a while. All right. So anyway, that's the financial wisdom, the quote of the week. So, hey, let's give a little update on what's going on. Some people are really concerned. You do not know how many phone calls I've received over the past couple of weeks about people concerned with the banking situation and what they have. Did you know that there were people. I was not aware of this. I've known this for a while, but guess that's just because of the industry that I'm in. There are people that actually didn't understand the FDIC. The FDIC does not cover 100% of the funds that you have in your checking account savings account or CDs, over 250,000.

Randy Sams:
So if you have a checking account that had $500,000 in it, FDIC will cover you up to, what, 250,000? But listen, I'm going to give you this update on the bank crisis. So if you missed last week's show, check out our podcast. Here's a recap. Silicon Valley Bank failed on March the 10th and was the 16th largest bank in the United States at the time of its failure. It also was the largest bank by deposits in Silicon Valley. Signature Bank also failed. On March 10th, it was a New York based full service commercial bank, which failed when customers spooked by the sudden collapse of Silicon Valley Bank withdrew more than 10 billion in deposits. That's billion with a B. Okay. So the collapse it the collapses at SVB Bank, the signature bank were the second and third largest bank failures in the US history. Let me say that again. The collapses at SVB and Signature Bank were the second and third largest bank failures in US history. Historically, if you look at 20 largest bank failures in US history, ten of them happened between 2008 and 2010. So let's give an update. Um. Tell you what, folks, we have a little clip. We have a clip from there. We're going to listen to now.

News Clip:
There's no guarantee that something will happen. We don't know exactly what the results will be. So I've got an ask and it's a completely unfair ask. My unfair ask is this can you guys just hang around, try to support each other, try to support our clients work together, which may be a again, a slightly better outcome than where we are right now. I know it's an ask, but I know you guys, if anybody are the right people to ask to be with each other, to be with our clients, to try to come with the best outcome we could think of in this situation. Thank you. And my heart is with you, and it's really hard for me to deliver this message, but I so appreciate all the thing you've done for me and for SVB over so many years. Thank you.

Randy Sams:
Update On March 16th, 11 of the biggest banks in the country announced a $30 Billion bailout package for First Republic Bank in an effort to prevent. The California based bank from becoming the third bank to fail in less than a week. All right. Did you hear that? So other banks, 11 of the biggest banks in the country, did a $30 Billion bailout package for First Republic Bank to hopefully help them. Not become the third bank to fail in less than a week. So first Republic serves a similar clientele as Silicon Valley Bank, which failed earlier this month. After depositors withdrew about 40 billion in deposits. So it appears that first republic, which had deposits totaling 176.4 billion as of December 31st, was facing similar crisis. So here's what you got to remember, folks. Please be sure and verify that your bank is FDIC insured. The Federal Deposit Insurance Corporation insures deposits up to 250,000 per depositor, per insured bank do not hold more than 250,000 in deposits at one bank at any time. So folks, get in contact with us, visit our website. We help our clients and listeners make informed financial decisions and make choices that leave them and their money safe and secure. Hey, folks, you're listening to Your American Retirement on 101.1 FM. The Answer. We'll be right back.

Producer:
Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.

Randy Sams:
Hey, welcome back, folks. I'm glad you're joining us this Saturday morning. And my name is Randy Sams. You're listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk, folks, we're going to do a little problem solving. This is a kind of an example of a client that we worked with a couple of clients.

Producer:
It's time for this week's Problem Solver.

Randy Sams:
We recently had a woman call us after listening to the show and again, you'll hear me say this several times. We love hearing from our listeners and helping them with their financial and retirement goals. So I'm not going to mention any names, but this young lady said we were welcome to share her story on this week's show. So the caller was 37 years old and her husband 39 years old. The wife works at a major bank and the husband has a blue collar job working with his hands in the manufacturing industry. So a couple of years ago, they received a sizable inheritance from a deceased family member, allowing them to get a nice head start on saving for their own retirement. Unfortunately, the person managing their inheritance was churning. The account funds excessively trading assets to generate more commission dollars that they put in their own pockets. All right. Do you hear that? So the person that they left in charge of those funds. Was basically churning. So they were doing excessive trading of the assets in their account. Under their management, to generate more commission dollars to put in their own pocket. So while fees piled up from excessive trading activity, they had also experienced a 20% loss. So you can tell this is just recently. So while the fees were piling up because of the excessive commission trading or the excessive trading activity, they had a 20% loss on top of that of the money that they inherited.

Randy Sams:
So here's what you got to be careful with. You want to be careful about who you're working with. So this individual had no licensure or adequate certifications to be doing those investments. So in hindsight, they simply trusted the wrong individual without verifying that their money was being managed in a safe way. All right, folks, you got to have communication with whoever you have your money with, all right. If you're not having communication with them on a at least an annual basis, hopefully more often than that, to find out how are my investments doing, how's my retirement fund doing with you? All right. So you got to stay in contact. If they're not reaching out to you, you reach out to me YourAmericanRetirement.com or 866990764. And we'll be glad to meet with you. So here's the deal solution. When we met with them, they were blown away at our structure compared to what they had been experiencing before. So they think it makes sense that we don't condone unethical practices or unnecessary fees. My focus is on fees, folks. The first thing I'm going to do when I meet with clients, number one is I'm going to ask questions that I'm going to be quiet and I'm going to listen. I want to know what your objectives are at SMMG Financial.

Randy Sams:
We don't have a cookie cutter that, you know, puts you in a box that the last person we just met with. You're going to fit in that same box? No, it ain't one size fits all, folks. When it comes to retirement, your objectives are going to be totally different. You and your spouse's objectives are going to be totally different than the last few people that I've met with. That's why we have a questionnaire. We have something for you to fill out and that gives us the information that at least points us in the right direction, that we're doing the right thing together. That's us and you, you and us doing this together, putting together a plan that is going to be beneficial for you now and for a long, long time. Okay. Through retirement. So they were excited. They were we were able to delete the fees they were paying on sizable bond portion of their portfolio. We did this by replacing the bond portion of their portfolio with fixed indexed annuity. So this annuity also paid them a 10% bonus that helped them make up some of the 20% they had lost in the market over the last couple of years. So, folks, listen, sometime. These are not a bad thing, okay? When we're dealing with an annuity, if I'm dealing with a fee, I may have a guaranteed income annuity that we're talking about and there may be a fee associated with that income.

Randy Sams:
Writer. Okay. But what that fee does is it gives you a guaranteed interest rate. Give you an example. I have a carrier. I'm going to not mention the name of the carrier, but I have a carrier that they charge a 1.1% fee. But that fee gives you a 20% bonus up front and it guarantees you an 8% compound interest for the first ten years. That's what the guarantee. Now, what does that guarantee also pay for? It also covers when you turn on the income, you are guaranteed that income for the rest of your life. And if we set it up for joint life, it's guaranteed for your life and your spouse's life. That's what the fee is about. But when we're talking about excessive fees, no, the first thing I'm going to look for, depending on what your objectives are, is we're going to look at annuities that have no fees. All right. So don't get paid a fee, folks. I get paid a commission. My commission does not come out of your fund. My commissions are paid by the insurance annuity company that we do business with. So if we have 100,000 that we're going to invest in into an annuity, I should not use the word invest. Forgive me, we're going to take 100,000 and we're going to use that as the premium for your annuity contract.

Randy Sams:
And let's say my commission was 2%. You do the math. You're still going to start out with 100,000. It's not going to be decreased by by the 2% commission. My commission would be paid by the insurance company, by the annuity company, not coming out of your funds. All right. And there's no fees associated with that going forward. If we use a, say, a growth annuity, the income annuity, yes, it does have a fee, but you got to see that fee is getting you those guarantees. So is it worth the 1% or the 1.1% to get a 20% bonus up front, to get an 8% guaranteed compound interest for ten years and to get guaranteed income for the rest of your life and your spouse's life. To me, that Answer is yes. So here's the challenge, folks. So it disappoints me when I see hardworking families being taken advantage of because they don't know any better. They don't understand. So we want our listeners and clients to know that there's no amount of money that's too little for us to offer you some help. Simply put, if your money is important to you, then it's important to us. Guys, let me give you an example of this. So this week over the past over the past week. And this is an example of who I've met with. So I've met with clients that we're looking at $50,000 as their premium for their to start their annuity.

Randy Sams:
And I also met with a client that we're looking at $1 million to start their annuity. All right. So two different types of annuity. The $50,000 annuity, they're looking to protect their money and they're looking for growth. The million dollar annuity, they're looking to let it grow in the annuity that I mentioned earlier with the 20% bonus and the 8% guaranteed interest for ten years. And then when they're ten years older, 11 years older, they're going to turn on that guaranteed income stream. So total two different annuities, two different clients. So the amount of money doesn't matter to me. If it's important to you, it's important to me. All right. So this situation that this couple is not uncommon. We find too often that people's savings are being dragged, being dragged down by unnecessary fees and improper risk management. So, folks, that's I just don't understand. And don't take this wrong. But for me, being in this business for as long as I am and I'm on the safe money side, okay, I'm a big believer in safe money. You've worked too hard for too long. To get to a point and you lose money. And when you've got a fee involved, when you've got assets under management and they're charging you a fee if your account goes down.

Randy Sams:
Why?

Randy Sams:
My account just went down. And you're still charging me a fee? The account goes up. They're charging you a fee. So there's a commercial out there right now that says, you know, when you do well, we do well. Or when you do better, we do better. Well, that makes sense, folks. Do the math. If I'm getting charged, a 2% fee in my account goes from 100,000 to 110,000. It makes sense that they're going to make more off of that 2%. Right. But if my account goes from 100,000 down to 90,000, it makes sense that 2% is going to be less. So they're playing a game with the way they word their statement where if you do better, we do better. Yeah. If we do, if you do bad, we do bad. Okay. So in other words, I'm going to charge you that 2% fee, whether it goes up or goes down. That's kind of concerning to me. So that's what we're going to look at. We want to try to eliminate fees. So folks contact me today. Go to my website YourAmericanRetirement.com. Leave me your contact information or go and give me a call. (866) 990-7664. And let's set up a free consultation. I want to tell you a little bit about what we do for you. Okay? Here's what we can do for you.

Randy Sams:
So we're going to provide. The comprehensive consultation. At no cost to you, our listeners. And there is no obligation. You only work with us if it's best for you. So we will help you analyze your financial situation. We'll closely examine any annuities that you may currently have and check out the fees that you may be incurring for those annuities, especially if you have variable annuities. We'll discover exactly how much you are paying in fees and help you cut unnecessary costs in your IRAs, your 401. S or any other retirement savings accounts. We can also help you with Social Security planning and your Medicare. Had a young lady I met with this this week, or she really walked up to me and she recognized me. And she's turning 65 in a couple of months. And that's what we're going to be doing, is sitting down talking about her Social Security and her Medicare options. So we're going to compare your current situation to what's possible if you work with us. So remember, it's your money. And if it matters to you, it matters to us. Hey, folks, again, my name is Randy Sams, president, CEO, SMMG Financial. You are listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. We will be right back.

Producer:
Miss part of today's show. Your American Retirement is available wherever you listen to podcasts and online at YourAmericanRetirement.com.

Ford Stokes:
Chapter 13, The Annuity That is just right. The fixed indexed annuity. Big idea. A fixed indexed annuity gives you a portion of market like gains without market risk. Your investment is tied to an index but not directly invested in it. How does it work? An FIA gives the owners or annuitants the chance to earn higher yields than fixed annuities when the index they are tied to performs well. They typically will also provide some protection against market declines. The rate on an FIA is calculated based on the year over year gain in the index or the average monthly gain over a 12 month period. Fia often have limits on the potential gain at a certain percentage. This is known as the participation rate. The participation rate can be 100%, which means the account would be credited with all the gains. Or it could be as low as 25%. Most fiAs have a participation rate between 80 and 90%. Benefits. Guaranteed income stream with Americans living longer and spending more time in retirement, many retirees are concerned about outliving their savings. In turn, they are searching for a product that can help ensure a steady income stream. Phas are designed with guaranteed lifetime income so you can never outlive your earnings. Diversification of portfolio. A balanced portfolio is essential for managing risk and reward in the financial markets. Designed for the long term, PHAs are a great retirement vehicle to ensure you are not putting all your eggs in one basket. Phas offer the ability to make some money without the risk of losing it. Secure principal. Even with market volatility, investors will not lose value on their fixed indexed annuities. Your savings aren't exposed to market fluctuations, so even in a negative market return, you will not fall below zero.

Ford Stokes:
You can never lose your interest once it is credited to your principal. Tax deferred growth fees offer long term tax deferred savings. As long as your money stays in the annuity, you will not be taxed on the interest earnings once you receive a payout. The annuity will be taxed just like ordinary income predictable earnings because PHAs offer predictable income. Americans feel more comfortable when withdrawing funds from these retirement vehicles as opposed to an IRA or 401. K. Choosing an FIA is an efficient way to plan for your future as your interest. Earnings rate always remains somewhere between the interest rate floor and the cap. No matter what happens to the market, you can still count on payments throughout your golden years. Potential drawbacks of fixed indexed Annuities Surrender charges. A surrender charge is a type of sales charge you must pay if you sell or withdraw money from a fixed indexed and even a variable annuity. During the surrender period, a set period of time that typically lasts 6 to 8 years after you purchase the annuity. Surrender charges will reduce the value and the return of your investment. Withdrawal limits. Almost all fixed indexed annuities play surrender free withdrawal limits within the annuity contract that generally range from 5 to 10% of the principal. While all annuities must be RMD friendly and provide for a penalty free withdrawal from a qualified annuity account equal to the RMD requirement for the client's age carriers limit the amount of withdrawal to enable them to grow the money invested for themselves and the client. Not suitable for short term investing if you want to grow your money, but you also need access to 100% of your money, then a fixed indexed annuity may not be right for you.

Producer:
Welcome back to Your American Retirement. Here's Randy Sams.

Randy Sams:
Hey, welcome back to the show, folks. My name is Randy Sams. You're listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. Hey, thanks for joining us today, folks. Just a little hint or a little plug, I guess. Over the past three weeks, I've been doing retirement seminars in in Benton. Got a really good response, really overwhelmed by the response that I got people that joined me for those for the retirement seminar, kind of an educational seminar. No products were sold during the seminar. Just education, like what you hear me say, You know, we want to educate our listeners. We want to educate our clients and get them prepared for a safe retirement, a secure retirement, a risky retirement. So we had some really good feedback. But one of the things that I had a lot of questions on, and I'm just going to spend a little bit of time on today's show going over this with Social Security. So one of the most asked questions during our consultations and during the seminars I did this past three weeks was, will Social Security be around when I retire? A lot of questions on Social Security. So kind of a background, folks. So Social Security was signed into law in 1935. But you got to realize this, folks. Social Security, when it was signed in the law, was never meant to be 100% of your retirement. All right. But it wasn't because if you remember, way back then, 1935, my dad was born in 1926.

Randy Sams:
My mom was born. Well, I better not tell that because she'll get mad at me anyway. But. You had a lot of folks when they went to work. What did they do? They stayed at the same company for 30 years. 35 years. 40 years. Okay. They started when they were 20 years old and they worked till they were 60. All right. Or 65. So they had a lot of time with that one company. You just don't see that in today's environment, in today's atmosphere. People are jumping around from job to job. But one of the things that kept them at that position was because. The majority of employers. Offered what was known as a pension, a defined benefit. So you worked at this company for a certain period of time and you knew the longer you worked there, but you knew what your benefit was going to be when you retired. It's called a pension, a defined benefit. It's a defined benefit plan. All right. So. Social Security was created because when you retire, you understand that you're not going to be making as much money in retirement as you did while you were working. All right. So Social Security was created was established to supplement that pension, that defined benefit plan. It wasn't going to get you from let's say you were making 50,000 a year, and when you retired, your pension was going to be 30,000 a year. And then then Social Security would kick in and might have gotten gotten you up to, say, 40,000 or 42,000.

Randy Sams:
It depends on what all you know, how long you worked and all of that and how much you paid into it. But Social Security was to was created to supplement your pension plan. Let's switch to today. What happens? Only about 15% of employers in today's market offer their employees a pension plan. Majority of those are going to be like federal jobs, county jobs, state jobs, union jobs. All right. So the majority of the folks, what happened was it switched from a defined benefit to a defined contribution, basically a 401. K, a 403 B, something that the employee would have to be concerned about their retirement plan at that time. Okay. So what happens is now the majority of the employers out there do not offer a pension plan. So now it's 100% burden on you, the employees shoulders, to build that retirement plan via a 401. K or 403 B, whatever vehicle they offer or an IRA. So that's a little background on Social Security, why it was created. Now, today, no matter where lawmakers stand in the future of Social Security, there's almost universal agreement that the program faces funding challenges that need to be addressed. So sometime by the middle of the next decade, one of the trust funds that helps pay for Social Security will run out of money. Did you hear that? So within the next decade, maybe in the middle of the next decade, one of the trust funds that helps pay for Social Security will run out of money, leaving more than 20% of the program unfunded.

Randy Sams:
So a report released by Congressional Budget Office, CBO warned the Social Security trust fund could run out of money by 2032. Folks, that's nine years from now, so a year earlier than previously thought. So if Congress doesn't make changes to bring in more revenue or reduce benefit payments, you're going to see that it could run out of money by 2032. So the cost of the program's outgoing benefits surpassed the amount of funds going into the accounts in 2021. In other words, there's more money going out than there is going in, which means there's more people retiring, turning on Social Security than there are people that are working, paying into Social Security. Does that make sense? So which is the Associated Press reported was the first time such a happening occurred since the early 1980s. So again, outgoing benefits surpassed the amount of funds going into the accounts in 2021. So more people were taking money out than there were people paying into the account. So Congress passed in 1981 a stopgap funding bill that allowed for borrowing between the Medicare trust fund and Social Security. Two accounts. So the old Age and Survivors Insurance Trust funds, the larger of the two funds that cover retirement benefits and the Disability Insurance Trust fund. So so we got funding bill in 1981 passed that allowed for borrowing between the Medicare trust fund. So you want to know where all those funds went? Do you hear that word borrowing? So borrowing between the Medicare trust fund and the Social Security to accounts.

Randy Sams:
All right. So that's where all your funds have gone through. They borrowed they have an IOU. Will they ever pay that back? I don't know. Good question. All right. So listen to this. So beneficiaries of Social Security are expected to face steep reductions in payments if the program becomes insolvent, with some projecting declines of up to 20%. Folks, I've heard all kinds of solutions, so. They're going to have to increase, you know, the the amount of deductions that they're charging, they're going to have to increase your Social Security. Uh, you know, deductions from your paycheck. Will they ever decrease the amount that someone's getting from Social Security on a monthly basis right now? I don't know. I, I think if I was a politician and I realized that the number of people that are getting Social Security today and and I was the one that passed the bill or voted for a bill to reduce your current Social Security benefits down would probably be looking for another job. Now, you can agree with that or not. But, you know, I'm not a politician. I don't play one on TV. And I didn't spend the night at a Holiday Inn Express last night either. So that's just my personal opinion that it's going to be difficult for them to make changes to to those who already have Social Security. Now, those of you who are younger, um, and are still paying into it, then you may be either working longer, your full retirement age may increase or those payments may be decreased.

Randy Sams:
So here's the solution. Let's strengthen your retirement income plan. Okay? Remember that retirement is less about the size of your portfolio and more about your ability to generate consistent income during retirement. Folks, listen to me. You've heard me say this on many, many shows, and I'll say it continually. You do not retire on assets. You retire on income. Assets can be lost. A market crash, a fire, a divorce, whatever it might be, folks, you retire on income. That's what we do at SMMG Financial, Your American Retirement. We sit down and we're going to work out a plan for you and your spouse that's going to give you peace of mind, knowing that you have a guaranteed lifetime income coming in for as long as you live and as long as your spouse lives. In other words, we want to see your blood pressure go to zero before your retirement account does. Does that make sense? That's what we do. All right. Many people are relying too heavily on just Social Security to be their retirement plan. Folks, it never was created to be your retirement plan. Listen to this. In 2022, the average Social Security check was $1,550. All right. So Social Security was never meant to be 100% of your retirement. And folks. I know there are many, many people. Hundreds, if not thousands of people listening to the show today.

Randy Sams:
Uh, that you're Social Security check may not be $1,550. It may be less than that. I know several people whose social Security check is less than $1,000. I know several people whose Social Security check is way over that amount. But as an average in 2022, the Social Security check on average was $1,550. Folks, you can't retire on that. I don't care if you don't have any debt. $1,550 is not going to get you very far in today's environment. Milk, gas, food, utilities, whatever. Okay. So you can establish your own personal pension by investing in a fixed indexed annuity, a guaranteed income annuity that provides you with the paychecks you need to cover expenses and the paychecks you want to live, the retirement you deserve. So let's go. We're going to look at your needs and we're going to look at your wants. All right. So. Folks. This is what I this is what I always say. Okay, An annuity is not an investment. So if you ever hear anybody say invest in an annuity, it's they're using the bad, bad terminology. An annuity is not an investment. An annuity is a risk transfer vehicle. All right. I'm transferring the risk of me running out of money before I pass away or my wife running out of money before she passes away. I'm transferring that risk from off of me and on to the annuity company that we do business with via a guaranteed lifetime income annuity.

Randy Sams:
All right, so an annuity is a risk transfer vehicle. Let's transfer the risk from off of your shoulders. And let's now put it on the annuity company shoulders. All right. So. Let's give that risk to the company so annuities can provide you with an income that you cannot outlive. Folks. It's called longevity. You know what longevity is. Longevity basically means that you're going to live a lot longer today. Longevity is how long am I going to live? What's your life expectancy? If you're going into retirement and you have not had any consultations with an advisor who understands longevity, you need to give me a call. (866) 990-7664. Or go to the website. Leave me your information YourAmericanRetirement.com. Folks. Believe me, if your advisor does not take longevity into consideration, they're not fulfilling their fiduciary role to you as a client. It's my role as an advisor to you as a client to make sure that I put you in a vehicle that we know we have a guaranteed stream of lifetime income. All right. A guaranteed lifetime stream of income. And that's what we do with the guaranteed annuity. So. So remember. So the annuities can provide you with an income you can't outlive, even if you live to be 90 or 100 or 110. So checks keep coming and are backed by the insurance companies and they are required to hold at least 100% of their deposits in reserve. So you know what a reserve is. Insurance companies have to have reserves.

Randy Sams:
It's called the solvency ratio. All right. Unfortunately, why you saw some of the banks or why you're seeing some of the banks that are in trouble, folks, because the banks don't have to. The banks don't have to have a solvency ratio of 100 or above. Okay. They get by with a solvency ratio of below 100. But with an insurance company, you have to have a solvency ratio. You have to have reserves, guaranteed reserves to cover your liabilities or your debts. So that's why I like working with an annuity company. Okay, so. Let's transfer that risk. And let's get those paychecks coming to you for as long as you and your spouse live. Let's take the the highest risk that's available. Longevity risk is the risk multipliers, folks, because the longer you live, guess what happens? You're going to see a market crash. You're going to have some kind of health concern. So you see if you retire at age 65 and you pass away at age 68, those risks don't really matter to you. But if you retire at age 65 and you live to age 95, then you're going to incur some of those risks. So give me a call. (866) 990-7664. Or go to the website YourAmericanRetirement.com. Leave your information. I'll get in contact with you and let's address that longevity risk and let's take it away from you and your spouse. Hey again, Your American Retirement on one on 1.1 FM, The Answer. We'll be right back. Oh, no.

Producer:
Are you anxious about retirement? Concerned that you could outlive your money? Randy Sams is a Little Rock native who has nearly four decades of experience helping hundreds of Arkansans retire with confidence. If you want to get the most out of what you've worked so hard for, or if you're interested in learning how to maximize your Social Security, call Randy Today at (501) 249-2343. That's (501) 249-2343. Or visit YourAmericanRetirement.com 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.

Randy Sams:
Hey welcome back. I want to welcome you to the show. Thank you for joining us this Saturday morning. My name is Randy Sams. You're listening to Your American Retirement on 101.1 FM. The Answer where Little Rock comes to talk. Folks, We want to close out the show today on this last segment. We want to talk about this thing called a widow's tax. A lot of folks are not aware of it. During my seminars over the past three weeks that I've been holding, I've gotten a few folks that have lost their spouses and they've had some questions. So just kind of briefly want to cover some of this information. Again, if we can go in more detail with you. Love to set up a free consultation. You know the phone number (866) 990-7664. Or go to the website YourAmericanRetirement.com. Leaving your information I'll be glad to reach out and touch base with you your no obligation under no obligation whatsoever. But I'd love to talk with you and kind of find out what your concerns are and if you've just recently lost a spouse. First of all, my I'm sorry for that. My apologies for that. But. There are things that we need to address. And one of the things we look at is called the widow's tax, the Unfortunate reality of widow's tax. So we recently helped a 70 year old woman who who lost her husband. He passed away too quickly and too soon, losing his battle with cancer at the age of 76.

Randy Sams:
She was 70. He was 76. So here are some challenges that she and many widows face when the spouse passes away. She will immediately lose approximately 33% of her Social Security income because while she keeps the larger benefit, which was his the smaller benefit, which was hers, goes away. So, folks, a lot of people are not aware of the fact that you have two spouses drawing Social Security when one of the spouses passes away, whether it be the husband first or the wife first, you can't keep both of them. Social Security will allow you to keep the higher of the two. So you're going to lose a significant portion of your retirement income. So in her example, she lost approximately 33% of their Social Security income because she was only able to keep his Social Security and not hers. So now she faces a higher income bracket tax, income tax bracket as a single filer versus joint. All right. She faces a higher income tax bracket because she's now filing as a single. She loses a tax deduction because she is no longer married. Her Social Security will now be taxed at a higher rate. New tax bracket. Her Medicare surcharges will go up because she's now in a higher tax bracket. You see, she's going from being married, filing jointly to single filing individually, So the tax situation completely changes. So listen, widows who meet with us, widowers and widows who meet with us will never have to face these challenges alone.

Randy Sams:
If you or someone you know recently lost their spouse and is experiencing the burden of the widows tax, please call us or share our information. You know the website YourAmericanRetirement.com or toll free (866) 990-7664. We'd love to sit down and kind of have a discussion and see where you're at, see if you had any plans in place. But let's let's get together and kind of figure out what we've got. So here we want to do with you, prepare you for the widows tax. So if you don't have a solid retirement income plan as the 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 you, your spouse and family, safe after you are gone. So when you pass away, folks, the plan is not for you any longer. It's now for your spouse and your family. So it's important to be working with an advisor slash financial professional before you pass away and ideally before your health ever begins to decline. So the more time you have to work with and more options you have and the better off you will are likely to be. So listen to this. The earlier we can attack this, the earlier we can address this, the more options we're going to have. You and your spouse, you and your family are going to have.

Randy Sams:
And the better off you're likely to be. Time is on your side, folks. The quicker and the faster and the earlier we can address these problems. All right. We need to set up a retirement plan that addresses what happens when one of you pass away. I have an income report that I can run for any and everybody. This is something I do for all my clients. We put in your current income. We put in your Social Security, we put in target retirement dates. And then you know what we do? We give you different scenarios based on the husband passing away first or the wife passing away first, because it's really eye opening to know that, you know, I've been working, now I'm retired. So how do I fit that income? How do I bridge that gap between what I used to make and now what I've got coming in, be it Social Security or a pension or just Social Security and, you know, whatever we can put together for you. If you've got four one balance, let's look at what we can do for you within guaranteed income. Annuity, something we can put together for you folks, but we want to work with you. So our plan to help people in advance, here's how we can help. We're going to create a smart vision for retirement. With you and your spouse. And we want to take into consideration, like I said, that income report that I put together.

Randy Sams:
It's going to give you different scenarios of the husband passing away. What it means to the spouse, to the wife, and then we're going to let the wife or the spouse pass away first and what it means to the husband. You'd be surprised. It it really paints a good picture as to what your target needs to be now and in the future. All right. So how do you plan to spend time with the family and friends? Something we want to talk about. How do you plan to fund your retirement with less income coming into the household, especially if you lose, you know, 30% of your retirement funds because of one of your Social Security going away? We want to create a solid retirement income plan, understand your expenses in retirement, and establish income sources that you can count on and never outlive. We want your blood pressure to hit zero before your retirement account does. A great way to do this is replace the bonds you have in your portfolio with fixed indexed annuities, guaranteed lifetime income annuity. So let's measure your retirement income gap. Is it bad or retirement surplus good? So if you have a surplus, that's great. Before you retire. Let's do that now before you retire. Remember, we want to educate and prepare you for a secure retirement, a safe retirement, not a risky retirement. So it's got to involve calculating your expenses, your expected expenses and balancing your budget today. So if you're still in your 40s and 50s, I can help you build a plan to receive a tax free death benefit when your spouse passes away to help ease the income pressure.

Randy Sams:
Folks, that's called a life insurance plan. I just had a conversation with a couple this past week. And that was one of the questions that I asked. So what are you going to do if the husband passes away and the wife loses that Social Security that comes in every, every month? All right. How can we fill that gap? We do it with a life insurance policy. All right. So when you pass away. We take that life insurance death benefit, which is tax free, that goes to the spouse and that can be utilized to take care of that 20%, 30% that they're giving up now. Used to see coming in every month. That's going away now because they're losing one of their Social Security checks on a monthly basis. So. With your in your 40s or your 50s. We can help build a plan to receive a tax free death benefit for you and your spouse passes away. And to help ease that income pressure again, we're going to utilize life insurance to do that for you. Delete the IRS from your retirement account by implementing a Roth ladder conversion as soon as possible. So, folks, what we do by that is this. I'm dealing with folks right now that have that are younger. They're 59.5 or older. They're still working.

Randy Sams:
They have a 401. K, but they are interested in tax free retirement. So what we do is we take that 401. K balance, We put that into an annuity that allows us to take out 10% free withdrawals without any penalties over the next ten years. So let's take 200,000, put it into that annuity. It's a growth annuity and over the next ten years, we're going to take out 10% or 20,010% of the account value. And at the end of ten years, we've paid the taxes that were due on that 200,000. But instead of paying it all at one time, we spread that over a ten year period. All right. So how do you eat an elephant? One bite at a time. All right. So now at the end of ten years, you've got all that money that's been transferred from the 401. K that is taxable into now the Roth conversion, which is tax free, and it's still growing. And when you begin to take funds out of that Roth conversion, guess what? It's tax free. You don't pay any taxes. And another feature is that Roth conversion. You don't have to worry about RMDs. So give us a call and we'd love to work with you folks because immediately we're going to utilize some of what you have today and we're going to look at how can we put you and your spouse into a tax free. Situation using that Roth conversion. Okay. So we want to immediately review and reset your financial plan upon the death of your spouse.

Randy Sams:
So we're going to look at it now and in the future you need to consult with a CPA or a tax professional annually to verify that you're on track. Folks, I'm not a CPA. And I'm not a tax professional. I don't give tax advice. I don't give accounting advice. I'm on the financial side. I give you safe money options. So looking, let's keep in mind, losing a spouse often causes a great deal of emotional stress. The National Council on Aging. Aging recognizes the widowhood effect as a real factor in increased mortality risk of a surviving spouse. A 2013 study appeared in the Journal of Public Health showed that people had a 66%. Higher risk of dying within the first 90 days of losing their spouse. Did you get that? This is the 2013 study from the Journal of Public Health showed that people had a 66% chance, higher risk of dying within the first 90 days of losing their spouse. So this discovery held true for both men and women. So dealing with the emotional burden of losing a spouse often takes time and support from family members as well as professional counselors. So folks, call me. Let's schedule a free consultation. Go to YourAmericanRetirement.com, leave me your contact information or give me a call. (866) 990-7664. Folks, I want to thank you for joining today's show. Randy Sams, Your American Retirement 101.1 FM where Little Rock comes to talk.

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. A merry 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 of the results obtained from the use of this information.

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