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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 retirement Unbroken with your host. Merritt Strunk Merritt is a licensed fiduciary and financial advisor who always places your needs first. Merritt 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's Merritt Strunk.

Merritt Strunk:
Welcome to the Retirement Unbroken show. I am your host, Merritt Strunk, founder and president of Momentum Financial and Insurance Services here in San Diego. And I'm joined today by our executive producer, Sam Davis. How you doing, Sam?

Sam Davis:
Thanks for having me on the show. I'm so glad to be a part of it and bring some important information to the people of Southern California today.

Merritt Strunk:
Awesome. Good to have you here. Thank you for listening to the show. Look, if you're joining us, just let me let you know what our mission is here for. The retirement and broken show. It is to transform our listeners into more educated, more equipped and financially savvy individuals so they can make better decisions in their future. So each episode will awaken your mind and your spirit and give you tools and information so that you can act with intention, so that you may unlock what is possible in your financial future. If you need to get ahold of us, you can reach us at WW W Retirement Unbroken. Dot com retirement unbroken dot com. And if you need to get a hold of us and talk to us a little bit, you can always go to our website and click the free consultation button at the top, right? You can always also call us at 858521 9700. That's 858521. 9700 OC And also do us a favor. Click the button if you're listening to this on a podcast. You can also just hit subscribe so that folks know that you love listening to the Retirement Unbroken podcast and radio show. All right. So today we're going to hit on a couple of things. We're going to talk about what's happening in the economy. We're going to discuss the unbroken retirement plan. This includes smart vision, smart inspection. And lastly. Smart planning. So a bunch of smarts there and we're going to get into that so.

Merritt Strunk:
When people work with us, it's important to know you can get a full retirement plan consultation. We provide consultations at no cost and no obligation to our listeners. And our only hope is that we would work with you if it's best for you. When we do this, it's all about clarity and education, right? So we spend a lot of time educating people on their financial situations and we'll help you analyze your financial situation. We'll look at your accounts, account statements. We'll discover exactly what you're paying in fees or what your rate of returns are. Help you cut unnecessary cost and risk in your investments, your IRAs, your 401. Ks, anything like that. We can also help you with Social Security planning and Medicare. We will compare your current situation to what's possible if you choose to work with us, if you haven't actually heard from your financial advisor. It's so funny, Sam. We talked to a lady just the other day and we were reviewing her situation and believe it or not, she said, I've had this account with this guy for three years and I've heard from him once. And the biggest complaint with financial advisors is that they never hear from them. We make it a goal to try to contact our clients with frequency throughout the year, not just once but many times. So please talk to us, get a second opinion, and we'll help you reach financial freedom and clarity for you.

Merritt Strunk:
So the way to look at this and your financial situation and your retirement. Imagine if you're buying a house. So if you're buying a house. Right. Many of us listening here is bought a house. One of the most important things you must do before buying a house is what? Well, you've got to have a home inspection. Is that right? Sure. Why is that a good idea to get a home inspection? Well, you're heading off issues. You want to feel confident in your purchase, so you're heading up problems down the road. So because it's a huge investment and it means a lot to your family. So think about a retirement plan consultation or a financial plan consultation as it's just a house inspection for your very important financial situation in retirement. Doesn't that make sense? I think it does. You know, my sister is an author and speaker, and she had this dream of living in the forest in Colorado and she found a house that would be perfect. She's like, oh, I could write. I could, you know, fantastic place to do it. And then the force is surrounding and it's wonderful. She looked at it and it's great she got the home inspection. The inspector came back to her and says, You know, you've got this PVC pipe in here and this is the same PVC pipe that degrades faster.

Merritt Strunk:
It's a flaw in the manufacturing, but it degrades faster. So by getting that inspection, she had saved herself some time along her ownership, where she'd have to open up her slab and and pry out these PVC pipes and replace it. Can you imagine the thousands and thousands and thousands of dollars plus the inconvenience that would happen? So get your home inspection for your financial situation, head off some of those things that you do not want to wake up at 80 years old and go, huh, look at that. We're out of money. What a terrible situation. So let's quickly talk about the market update. We just finished up some of the earnings reporting that were happening. We all know about the gas prices at the pumps. That's making the average Joe. Whenever they pull up, they're go, oh, my gosh, that hurts. And yet it's reduced a little bit just recently, but it still hurts. And it's just like that with inflation. So and the market has been bumping up and down from a little bit higher, a little bit lower, a little bit higher, a little bit lower. Yesterday went down. Today it's up, you know. And so the S&P ran into some key resistance here recently at the 4,175% region. And so far, the pause looks like it could be a bull, what we call a bull flag. The index has come a long way, so it will give the bulls the benefit of the doubt in the shorter term, of course.

Merritt Strunk:
But the break of the flag to the upside would bring the next piece of resistance. That would be the view into 4225, which is a 50% retracement of the bear market. I think everybody knows, you know, I guess the government can say whatever it wants. We do fit the technical terminology for a recession and the markets are dealing with that. So the 50 week. Average, which is one of those key indicators that we take a look at as well, was a 38.2 retracement of the bear market. So now. That's at 13,000, while a 50% take back of the 200 day average sits up around 13,600. Lots of stuff going on there. And we hope that, of course, that at some point soon we'll see some sort of exit from. The recession, right. That we we think that we are already in and that you can talk to the pundits on the television. Half of them will say that we're in recession. The other half will say that we're not. But it doesn't matter. Consumers are feeling like garbage. So in effect, we are because we feel like it. Everything costs more. And if you're here in San Diego, you certainly know what that feels like. So that's the market update that brings us to the financial wisdom quote of the week. Sam, do you got that?

Sam Davis:
Yeah. Thanks, Mara. And this week's Quote of the Week comes from perhaps one of the most successful investors in history, Warren Buffett. And Warren Buffett once said, if you don't find a way to make money while you sleep. You will work until you die. And I think this is a great quote because, you know, a lot of people don't realize that it is possible to get your money working as hard for you as you worked for it, right?

Merritt Strunk:
That's right. You know, there was a conversation I was listening to about Kobe Bryant. Kobe Bryant, you know, the famous basketball player and the reason why he was so good. Same thing would apply towards Jordan where what were they doing? And the unseen hours. And this whole thing about finding a way to make your money work for you while you're asleep is the same sort of thing that I put as an analogy to the to the successful athlete athletes that we we look up to. And what were they doing? And the Unseen Hours 3 a.m. showing up at 3 a.m. getting ready for that basic warmup. They handle the basics over and over and over again. They do it while nobody is watching. Make sure that your basics of your financial plan are in place. And we're going to talk about some of those. So some time ago, you know, COVID, you've got time on your hand covered, shut down here. And what do we do? Well, we wrote a book. It's called Your Retirement Unbroken. And it's interesting when you talk about retirement's being broken. How on earth did that happen in America and why do we think that? Well, some information here is that it starts with education. And if you don't have that financial education, you're heading down the wrong path if you don't get the financial literacy and critical information that you need.

Merritt Strunk:
So where are people getting their their financial education? Well, 26%. In a research study here says 26% is from high school classes where we can imagine what kind of financial education you're getting. There is probably the basic, basic, basic. Right. 22% for parents and family. Well, did mom or dad, did they have a good financial education to pass it along to you? I've always said that in inside our book, it says that financial education starts at the dinner table. Isn't that true? And guess what my family didn't do? We didn't talk about financial stuff at the dinner table. 21% from college classes. Well, maybe that's a little bit better. 18% from social and media websites. Oh, no. And then 7%, they are educated. Say they're educated from a licensed financial adviser. Only 7% say them. That's not a big number. How are you supposed to keep up? What's happened from high school, from college, from when you sat with your parents all the way to now? Right. It's such a big gap. There's only 7% saying they actually sought out fiduciary financial advice. Well, the world's changing a lot. How are you supposed to keep control or get education on all the different financial vehicles that you have access to?

Sam Davis:
Just not having the conversations that we need to have. I mean, for a lot of families, for a lot of people, money is a taboo subject that's not supposed to be discussed. And I think one of the results of that is that people are afraid to ask questions. And even if they do ask a question, they're they're not asking the right questions. And that's why it's so important to work with someone like yourself that has people's best interests in mind because they have to.

Merritt Strunk:
Yeah, the right questions. I'm glad you said that, because when it comes to financial literacy and information, knowledge is power. And how do you get that? Ask the right questions. Whenever we meet people and we're we're going through a beginning of a relationship, we ask really great questions and we encourage our clients to ask the ones that pop in their head, even ones that they don't know they should ask. We'll prompt them for that. Another another support here. Fidelity Investments in 2022 did a study which is called the State of Retirement Planning Study, and it says one in four Americans are less confident about retirement now than they were before the events in the last two years. I could totally understand that. I totally feel that 71% of Americans are concerned about the impact of inflation on retirement preparedness. 71%, I'd say that's a low compared to how how concerned they should be about inflation, because inflation is your secret partner and your retirement that erodes the purchasing power of your dollar. And it is one of the biggest detriments and impacts and destructive powers to our retirement, successful retirement. And then the last point here, 31% don't know how to make sure their retirement savings keeps up. That's understandable, too. If you're lacking literacy, don't have a criteria, don't have a checklist for your investments. And then lastly here at Anthony Chen, who is a researcher for an economist for the Center of Retirement Research for Boston College. Boston College is one of those colleges that have the Center for Retirement Studies. She said approximately half of Americans are at risk of not being able to maintain their retirement standard of living after they stop working. Wow. Why is America's retirement broken? And they may not even realize it. It's because something like this, approximately half Americans are at risk, whether they know it or not, of not being able to maintain their pre-retirement standard of living. So so let me ask you, Sam, if you're going to retire, do you want a lesser standard of living than what you had prior to retirement?

Sam Davis:
Absolutely not. And I would say that most people aren't ready to make a lifestyle change if they've been working hard and saving harder. They've likely been experiencing a steadily better and better standard of living throughout their lives. And just because they're retiring doesn't mean that they're ready for that to stop.

Merritt Strunk:
Well said. Well said. And I would suspect that a lot of people are in retirement right now, especially when inflation is so high that they may not completely understand that they need to tighten their belt on their spending, their drawdown of their retirement assets so that those assets can sustain them for the rest of their life. You know, we're living longer, and as long as we're living, it's going to take what, money? Right. But if you're drawing down the same amount that you always have, yet inflation is making you spend more money than you had planned on it. How do you know? How do you know your assets now are going to last that lifelong need when all of a sudden you're having to spend more and you're not aware of it or they're not asking the question, or is it really just not in their mind? And at that point, hope is not the strategy you need to be relying upon. So when people work with us, you know, how does how does that work? Well, it all starts with understanding what you want to do in retirement. You know, you want to know where you're going to be, who you're going to be with, what your goals are. And then we want to help them understand how to provide the stability for themselves and their family.

Merritt Strunk:
We organize custom financial plans to fund those goals vacations, expenses, purchases of a car, replacement of a car through a combination of guaranteed income strategies, Social Security maximization, and more. So when working with clients, each family or individual we meet can be in a different situation. That makes sense, right? You've got some people who are just starting. You've got some people who are intermediate, right? They've been investing. You know, they want to grow some wealth. They want to stop losing value. They want to get serious about how to invest the right way for them and their situation. And in a sense, they need confirmation that they've done everything the best possible way. Sometimes people just want confirm and we're doing the best we can do. Are we doing it the right way? Well, how do you know right then? You've got the pre-retirees, right? Or the what we would call here on the Retirement Unbroken show. We call them the unretired. See what I did there? Saying unretired, where they may be planning on a retirement, say, maybe coming up in the next five years. So unretired plus here's another UN nomenclature here on vocabulary it's they're unsure so unretired and unsure well that needs clarity a.s.a.p does that and then retirees or maybe high net worth individuals but there's a consistency there's a commonality across all these clients.

Merritt Strunk:
They want and need tax efficiency, market efficiency, cost efficiency and risk acceptable ness. Right. They have to have all that a risk of or at an exposure to market volatility that's acceptable to them. All right. So that brings us up to the other section here, which is Smart Vision. And this is the what many times when people set goals is just setting the what they want, not necessarily the how right now. So to set up that smart vision, what are you going to do in retirement? Who are you with? Who are you taking care of? What are your goals? How do you plan to fund those goals, each and every one of them? Where is that money coming from? You know, we talk about asset dedication. You know, what's the purpose of this bucket of money? What's the purpose of this bucket of money? And then how do you want to do you want to retire or do you want to what we call relaunch or relaunching recently talked to a person here that's talking about relaunching instead of just plain old basic definition of retirement. And I call it a lot of times a work optional lifestyle. A work optional lifestyle as a new definition of retirement could be, I really like what I'm doing.

Merritt Strunk:
You know, I could work and do this thing for the rest of my life. So I don't want to sit on my my recliner and just, you know, spend money and. Just do nothing. That's an old definition. You know, the sunset years, the new definition is I work optional where I can choose to to work as much or as little as I want. Because guess what? I've got guaranteed income. I have enough guaranteed income. Well, I know I'm going to have the bills paid so I can continue to work part time, full time, whatever time I want. Right. So when you retire, your income will not be the same as it was when you were working, right? All of a sudden that W-2 or 1099 can go away and you have to be ready for a reduced income flow by preparing before you retire. Preparing before your retire. One of the most frustrating things to me is to meet a family. A couple comes in and they've done all the right things. They've got. They've changed jobs, they bring houses, they put kids through college. They've got a 401. K. They may have an IRA. They've got the ETrade account that the husband is trading on the side just for fun. And they meet with me and want to get serious about their plan right now.

Merritt Strunk:
And then they go, hey, when do you what do you plan on retiring? They're like, Oh, in a couple of months. When it comes to money and financial and retirement and planning, I would I would submit to you that time has everything to do with it. Money requires time. And if there are certain strategies, we would have paid off for you ahead of time. But you waited until two months before retirement. You've just removed the possibility of that strategy being used for you. So the sooner the better. And by the way, waiting has a huge cost. So there is a mathematical equation. So when you talk to somebody young who who's waited until they're 40 to start investing or dollar cost averaging or getting that compound interest, you can actually calculate, well, if we had started this and contributed this much per per month or year at this assumed rate of return, guess what? You probably don't want to hear it. Hundreds of thousands of dollars is the cost of waiting. This means you've got to sit down with your spouse and think about your goals for retirement and get busy, have a conversation, knowledge is power. Ask those questions. So retirement looks different for a lot of different people, like we said. Whether you want to travel or spend time with family or start a new business, you're going to need cash flow.

Merritt Strunk:
You know, we may not be all of this world, but we're in this world. And as long as we're in this world, we're going to need money. You ever heard that statement? So a new survey from Gobankingrates shows that one third of Americans don't think they know enough about a retirement. 37% of Americans feel that they need more education information on retirement planning. Durr And then 52% of Americans wish they had more education on how to invest. This is a this is more research in support of our premise that for many, many, many, many Americans, retirement is broken. And the sad thing of it, Sam. They may not even know it. The subhead on our book and you can get it on Amazon, by the way, you know, the title is Your Retirement Unbroken. The subhead says Your retirement may already be broken. You just don't know it yet. And for the young folks out there and baby listening, you're thinking retirement. I can't even think about retirement. Look, you have a retirement or you may not have retire. Whether you know it or not, it's coming. So the sooner you get started on saving and investing and so on and so forth, you can be assured of having some kind of.

Sam Davis:
Retirement, you know, merit. It always surprises me that, you know, planning it sounds so simple, but it's something that so many people look over. But if you think about it, people spend years planning, you know, what college are they going to go to? They spend years planning for that big vacation to Europe where they'll spend over a year planning for a big wedding. But when it comes to their retirement, you hear too often that just not enough planning.

Merritt Strunk:
Happens, right? Sam, you couldn't be more right. You're absolutely right. People spend more time planning their vacation than they do talking about finances. We're going to take a break here and we're going to come back and talk about smart inspection and then smart planning. And like I said, folks, check us out. Retirement unbroken dot com. If you need more information. Get a free consultation with a button that's top right and then come on back after the break.

Producer:
Big changes could be coming and they may affect your retirement. I'm Matt McClure with the Retirement Radio Network powered by Emera Life. Increases in costs, market volatility and fears of a possible recession. All have people who are close to retirement worried about the future. Some people who were considering early retirement are staying in the workforce, while others who had already called it quits are going back to work. Marketwatch recently published a list of eight big things retirees and pre-retirees should keep an eye on. Some of them are pretty obvious, like number one inflation, as the prices of goods and services continue to go up at rates not seen in four decades, just paying for everyday things could eat through your retirement savings more quickly than you thought. Another concern, Social Security. The trust fund is set to be exhausted by the year 2034. Potential changes to save the program could have a big impact on your retirement years. Two items on the list have to do with savings how much money to set aside for retirement and how to address a growing gap in that amount versus what most of us have actually saved. Yahoo! Finance contributor Vera Gibbons recently reported that the savings gap has been exacerbated by the pandemic, with a lot of folks dipping into their retirement accounts just to get by.

Sam Davis:
We are in an inflationary environment here, and some of the experts I spoke to said given the fact that costs are going up for just about everything, they expect more people to actually tap into their retirement accounts or contribute less this year. Also, keep in mind that people are still quitting their jobs at a record rate and that group may also be tapping into their retirement accounts to to cover their costs.

Producer:
Health care spending and drug prices are two more things on the MarketWatch list of retiree concerns and they could be impacted by the last two items on the list diabetes which continues to affect more Americans each year and uses up a good portion of the nation's health care resources and exercise, which could actually bring costs down by helping you stay healthier longer. So which of these items is your biggest cause for concern heading into retirement? That's a key question to consider as economic uncertainty continues to cause headaches for us all. With the retirement radio network powered by a merrill life. I'm Matt McClure.

Merritt Strunk:
Welcome back to your Retirement Unbroken podcast or radio show here with our executive producer Kim Davis. And we're getting ready to talk about we just we just finished up with Smart Vision. What do you want to accomplish? The who, what, when, where or why of your retirement and looking forward. It's always nice to know your destination if you're going to go some somewhere and there are certain things you have to do when you take a trip. The journey, right? You've got to air up the tires, you got to check the oil. You're going to take that road trip. You have to know where you're going to go. You have to know where you're going to stop. You want to know the things you're going to do when you get there and how long it'll take and how much it will cost. Right. Using that great American road trip metaphor. Part of that is what we call a smart inspection, and this is what we do for clients that come in during a financial checkup situation. Part of that is we get statements and we look through the accounts with the clients. We'll look through IRAs 401 KS By the way, you know, any advisors that go through for one case, do they look at the funds only? What about the underlying investments? Let me give you an example. We looked at one of our clients for one case to try to match their risk tolerance to their overall investments. They were in that situation where loss is going to hurt you more than gains can help you.

Merritt Strunk:
If you've never heard that mantra before, there are certain people that fit into that. They don't need to chase 30% returns. They just need to get reasonable returns and avoid any large losses. And that was the situation here for for this this story here with a41k. We looked through it. And as we look through that, I notice where the international fund inside of the 401. K had a 50% less performance than the other international fund. It costs ten basis points less and it had no that the cheaper one with the better performance had no China exposure. And I asked him, I said, Is there a reason why you're still investing in China, where we've gotten all of our clients out of China? You can understand the reasons why. All you have to do is watch the evening news. And he's like, No, I'm surprised. I'm so, yeah. So you can get 50% better performance or ten basis points less and have less China exposure. He's like, This is literally a quote. He goes, Why doesn't anybody tell anybody that? And my point to him was I want a401k Fund's going to call you up and say there's some there's some tension in Asia with China, and we should probably get you out of that. That's probably never going to happen. And that's not the way those funds are done. They're basically index funds, by the way, that market goes down those those funds. And therefore, they're never going to call you and say, hey, by the way, everybody knows that so-and-so has a nuclear weapon now and they're talking about firing it off.

Merritt Strunk:
And we're we're just calling you to adjust that exposure. No, it's not going to happen like that. It's not going to happen. And a lot of those index funds, whether it's in a 401. K or not. Right. So any where clients hold assets, including cash, we take a deep look at we look at rates of returns over 12 months, three months, five years, ten years. We look at fees, we look at performance, we look at concentration. By the way, when we look at this, sometimes we look at what is the correlation of all your accounts and what I mean by correlation, you could also think of it as the stock investment intersection. So an intersection or a correlation is if you own a bunch of stocks in one account that are let's say they're large cap stocks and you own them, you have another account over here that is some some other large caps or a large fund, the S&P 500 fund or something like that. By the way, if one of those goes down, the rest of them goes down when you're highly correlated. Very interesting. A lot of people think that they're diversifying. They're actually not. So when one thing goes down, it's essentially you're you're having one consolidated position. Even though you think you are diversified, you're not. Can't tell you the number of times the eyebrow goes up with clients as we're looking through these things and they go, what? I thought I didn't have that much risk exposure, much less being a solid, consolidated position in something.

Merritt Strunk:
So we're checking those kind of things. Have you ever had anybody do that? Probably no. Probably not. Right. We also take a look at looking way in the future for retirement conversations. We look at income gap or income surplus surplus. What does that mean? If you've never if you're that person that's looking at retirement coming up or you're already in retirement and you've never had an analysis that identifies a income gap or income surplus, then you really need to know that. Give us a call. We'll take a look at that. We'll let you know if you got one of those if you are one of these people that have an income gap. And by the way, that's fairly common, you then have to know inside of your retirement plan, you're your financial security plan for your lifetime. Maybe both your life times, plural, is how to solve that income gap. That's what we do. We can solve that income gap and make sure that you have money for the rest of your life and many times in a guaranteed fashion. Right. If you've got annuities or you've got pension plans, we also take a look at those. Right? Not all annuities are equal and certainly not all pensions are equal. Many people don't know when they're getting ready to retire and they've got a pension plan.

Merritt Strunk:
When you look at that, you've got to say, well, I'm getting paid out this much and it's a smaller amount, but I've got the big principal amount here and I'm going to get it over the rest of my lifetime. Does it make sense to get $200 a month for the rest of your life? And the only the calculation you have to look at it is like of that large amount of the of the principal amount, how long will it take me to get my money back out? Well, if it's going to take you 20, 30 years just to get your own money out, you might be needing an analysis there to say, does it make sense to do that or do I think I can get a higher percentage growth on that? And I don't have to wait so long to get my own money back because that makes sense for you. It's just math, right? It's just math. That's what we say. It's just math, you know, no opinion, no emotion. It's just math. So we also take a look at how many fees you're paying. A lot of times people, especially with mutual funds, have no clue, none about fees. You know, as Americans, we're all conditioned to look at these fees, cost fees, and can we negotiate those down? Sometimes when they've got the low cost mutual funds in their portfolio, they're thinking, oh, look at that sales expense ratio. And that's how you can see that's the one that's published, right? The sales expense ratio.

Merritt Strunk:
Look how tiny that is. It's true. If you're in an index fund on a mutual fund, it's not being managed. And that's another thing. Not that it's just not being managed. What if things change? Well, right now, this time in history, the stock market, the way it is, you know exactly what that feels like because you took the trip down the elevator. Did you know that mutual funds cannot be intraday traded if you called your broker and say, sell, sell, sell. Do you know they are not sold in the. Dairy market. They are redeemed to the issuer at the end of the day. The person on the other side of the phone may go, Och, we'll do that. They have to wait till the end of the day and then they're redeemed. You're stuck taking the elevator down. That's not necessary. You don't have to. You don't have to do that if it's not right for you. Right. So that's unnecessary risk exposure in my opinion. Of course, that just depends on what your situation is. We also help with tax efficiency. Do you have a tax problem? A lot of people don't know they have a tax problem. Are using a Roth to reduce your future tax or using life insurance to reduce your tax exposure related to your retirement income. A lot of people just scratch their head and say, What on earth are you talking about? Well, at America, there's very few sacred cows, right to to coin a phrase, there is that's life insurance, that's certain trusts and Ross and that's about it for tax free retirement income.

Merritt Strunk:
So those things can be used to take a look at tax free retirement income. So by the way, whereas all of America have the majority of their money, it's in tax deferred accounts, the old 401. K, and when you left your job, you roll it out into an IRA. For some people, that is 100% where they have their money. You ever heard of the IRA tax trap? Well, it's the definition of insanity, in my opinion. So if you have money in retirement, it's all in that, Ira. Well, RMDs are coming. Required minimum distributions of 70 and a half. Used to be, and now it's pushed out even further. So now, say 72, you're forced to take money out whether you need it or not. But when you do and that's where your your entire nut of your nest egg is, guess what you have to do? I have to take out my money to supply money for my retirement lifestyle. But because I took that money out and nobody's ever paid taxes on it, I have to take money back out of that tax deferred bucket and pay the taxes with it. But wait, guys, did you see the problem? You did. I took another withdrawal out of that IRA so I could pay the taxes. But now I need to take another withdrawal out to pay the taxes on the money I took out to pay the taxes.

Merritt Strunk:
Do you get the problem? You see why it is the tax trap of of your traditional IRA. By the way, IRA is retirement arrangement. Individual retirement arrangement, by the way. It's not individual retirement account. Isn't that strange? It should be account, but it's arrangement. Somebody named that pretty funky. Okay, so then let us review any life insurance policies we're talking about. It's these it's the smart inspection. Remember the home inspection situation? We're kicking the tires or taking that little tool. We're seeing if there's termites in here and we're taking a look at things. We're take a look at life insurance policies. If you've got a cash value life insurance policy, is there a possibility that 1035 that move it over to something that could provide you tax free income for the rest of your life, possibly by an IUL? And when I say IUL, that's another head scratcher for even the most experienced folks. They've never even heard of it. That's indexed universal life policy, highly flexible. What about chronic care? If you don't have any long term care, can you can you leverage that term 1035 into an IUL, get tax free retirement income and get chronic care if you needed it for your spouse? Mercy, get complicated here, aren't we? But it's huge, very flexible. So. And then how much money do you have available for tax free withdrawals? What about looking at real estate assets, family homes, rental property? Can you turn the sale of investment property into a real boon? If you know how to use trust, if you know how to use certain vehicles, you can being a little bit vague here, but there are some advanced tax strategies for people who have really appreciated investment, property, Social Security maximization.

Merritt Strunk:
It's true. We look at that. People who are the majority of people in America, let's just say it's the majority of people who take Social Security early. They take that at the earliest time they can. Did you know what that date is? It's 62. 62 is the earliest you could take your Social Security. It may be right for you. It may be not if you're married. It almost never is the right choice to do it. The the age of which you're going to get your full retirement benefits is 67 under current law. And if you wait till 70, you get a higher amount. By the way, each year you delay from 67, you get 8% delayed retirement credits. That means if you if you delay to 70, you could get a 24%, right. Eight, 24% greater retirement income that you've started off with. And then you get COLA increases, cost of living adjustments based off CPI, which is inflation. Drinking from a water hose here, aren't we? I know that's a lot of information. There are certain strategies for married couples that you can increase the amount of money coming from Social Security coming into your household over your lifetime. And you need to know what those strategies are, because if you miss the train on that, you're giving up hundreds of thousands of dollars I've sat down with.

Merritt Strunk:
With a couple and they can yield maybe $2 million over their lifetime if they do Social Security. Right. But there are just about to make a hundreds a couple of hundred thousand mistake by electing their benefits incorrectly, and they didn't maximize those. Interesting stuff, Sam. Lots of stuff we go through in terms of making sure that we've we've picked up the rocks. We've looked behind them. Do you does what you have make sense? And, Sam, I don't know about you, but a lot of times people have their closet, you know, the closet that you don't go into and you had over your lifetime and you put stuff in and stuff in and stuff in. And sometimes you don't even know what's in there, and sometimes you don't even know why you have it. For some people, they've accumulated investments over time, over their lifetime. It's here, it's here, it's here, it's here. And you can say, well, the smart inspection, what that does, it gets it out in the open and unpacks the closet and you can see it full cloth with transparency and clarity. And then you can ask those questions like, what's the purpose of that money? Is it exposed to too much risk or the right amount of risk? Is there unnecessary risk in these things? So we're unpacking this cluttered closet, getting it out in the open and taking a look at it.

Sam Davis:
Yeah. And I think that really touches on one of the mistakes that we see people making the most right. It's they think they have more saved for their retirement than they actually do. They've they've done what they've been told. They've worked hard. They've saved hard. They've contributed to that. 401 K But kind of like you explained earlier, they don't realize that the IRS is their partner in retirement. If you've got $1,000,000 in your 401. K, well, that's a that's a tax deferred account. And Uncle Sam hasn't gotten his cut yet.

Merritt Strunk:
That's right. Never paid taxes on that. And that's hiding in your closet or it's hiding in that region of your brain that you just don't think about every day because you're not a financial adviser and you haven't stopped because you're too busy, I don't know, golfing, working, living your life or whatever to stop and talk about planning ahead and making sure you've got that box checked. Right. So if you haven't had that time, you haven't had your cluttered closet unpacked, you haven't had an analysis and smart inspection. Like I said, think of it as a home inspection. Why wouldn't you do that for your financial future? It's too important to not have one of those and a detailed one by a fiduciary financial advisor. Get that. Now go to our website that's retirement unbroken and dot com and just go at the top and get that free consultation there. And when we come back from the break here, we're going in our next segment here and we're going to be talking about smart planning. This is where the rubber hits the road. So join us for that next section here and we'll see you when you get back.

Sam Davis:
We will try to put us down much later. Just because we get around.

Producer:
Are you concerned about inflation, political uncertainty, rising taxes, and how it could all affect you and your family during retirement? If you have an IRA balance over 400,000, you could save six figures in retirement taxes that you would be paying over a 35 plus year retirement. Find out how much you could save today by scheduling your free Roth conversion consultation with Merritt Strunk at Retirement on Broken.

Merritt Strunk:
Welcome back again to The Retirement Unbroken, the show, the podcast and the radio show. So if you're listening, boy, we've gone through a lot there. You're probably been drinking through a fire hose here. If you don't do this day to day, it can be a bit overwhelming. And that's why we say, look, give us a call, go to our website. You can call us at 8585219 700 85852193 700. Or go to our website which is retirement unbroken dot com. So if you want to be unbroken if you want to be an overcomer of the challenges for your financial life. This next stage we've talked about the smart vision, the smart inspection. Now we're going to talk about smart planning. Here's what I, I profess when we're talking about retirement plan and financial planning for the rest of your lives, it's a lot about security and income. Think about this, Mr. Producer. Sam, here, when you're planning your your financial life, we're trying to build a moat. Remember the the castle, right? The imagery of the old castle. Here's that castle. It's probably close to some water, but they build a moat around this castle. Why are they doing that? They're doing it to protect, right? To defend. And that's what we're doing, because there are so many things that can attack and try to derail your financial life as you live throughout your lifetime.

Merritt Strunk:
Right. For both you and your spouse and so on your family. So think about this. If we do our jobs correctly and this can't be done for everyone, but if we do our jobs correctly and they have the right, right situation, so when those things, the gotchas in life come, let's say the economy goes down. Ooh, what's that like? Well, you just have to open up your window and look outside. So if the economy crashes, what if the market crashes? The stock market crashes, we're going to be okay. Right. What if one of us Priuses is the other? We're going to be okay. The survivor is going to be okay. What if one of us gets sick? Right. It's like I say, we're okay until we're not. We're here until we're not. And the last one is we know who we are until we don't. Alzheimer's dementia epidemic in this country and across the globe. Right. So we have to plan for that now. Right. So as these things, Pune, Pune, Pune come in that mode is defending it, you know. Wonder Woman, ping pong, ping. You know how it used to be. All right. So we're fighting off these things as they come in here, attack and try to derail this. So should you be or are you one of those people who enjoy managing your investments yourself? Do you have the time, the education, the awareness of investments? You know, I'm thinking about buying an electric powered vehicle.

Merritt Strunk:
I don't know all the models. I don't know all the features. And it's coming at me kind of fast here. Same thing with investments. My gosh, the world of investing has changed so fast and artificial intelligence has come in. And can you possibly handle that as a DIY or what? If you're getting up in age, you're talking about needing simplicity, not complexity. Right? So do you have a plan for your if your your spouse does pass away, do you know that you lose the smaller Social Security, in effect, you actually lose the the lesser of the two? That's not the way the administration does it, but effectively, that's what ends up happening. Well, there goes some of the income that you were used to having because you have some costs and expenses that you need to continue to have for your lifestyle. Do you know how it will affect you? Right. What if you've got that pension and that pension has no continuation for the survivor? There goes. So if it's a private pension, you've got the loss of Social Security and you've got the loss of pension. That's money out the door. Have you mathematically tested and stress test you're playing? You know, our financial plans.

Merritt Strunk:
When we do our smart planning, our financial plans are mathematically tested. They stressed it. We do a monte Carlo now. So that means we take 1000 market iterations. That means wars, depressions, recessions, corrections, all those things and say, okay, does our plan hold up to that and will it succeed? And what's what's the probability of success in terms of income to keep your life going? Wow. This tends to remove emotion and opinion out of the picture. It's not my opinion. It's not emotion how we feel about it. It is mathematically tested. Have you ever had your written financial plan? A lot of people are investing money like they were in the accumulation years of their life, not the distribution years of their life. Completely different thinking. And they don't have a written financial plan. Why not? They may even have an advisor. Why not? You just don't. Why? Because it takes time. It takes work. Do you know the how? You will fund those critical events and goals, purchases? Things you want to do, things you want to see. Travel. Do you know how you're going to fund them? Again, the purpose of the bucket of the money. So some of these things that you may not be thinking about is increased health care costs later on in your life. We call it the retirement smile.

Merritt Strunk:
It's the go go years. The expenses are higher, it goes down and you end up in the no go years and your expenses are higher because of medical expenses. Medicare doesn't take care of some of those things like long term care. Long term care is what I call it's an emotional event, but it's also a financial event, and it could be the ending of your state and your legacy. So it's an estate ending event in many cases. Not for everybody, but for some. Did you plan for inflation? We've already talked about that. What about home renovations or repairs? Right. You've got to have that inspection of that house. What if you need a $20,000 plumbing renovation or a $40,000 roof replacement? Huh? Got to have money for that. Didn't plan on that. It was out of mind. Out of sight. We talked about income taxes. When you do your planning, if you're a do it yourself or are you looking at, oh, man, are you looking at how to minimize your your income tax? Real quick here. So we had a gentleman and we came in to chat with us and he is just retired and he's got a lot of money. He's got some some assets. It's relative, right? A lot is relative. Some to some people wouldn't be a lot. To others, it's a lot.

Merritt Strunk:
And I looked at it and said, oh, my gosh, all your all your assets are a tax deferred. They're all in tax deferred. That means then nothing. Nothing's been paid on income tax. Right? So every time you take any of any money out, it's going to be taxable. I said, How do you feel? I mean, how is retirement going for you? Goes out. Frankly, I'm bored. I think I may get a part time job. I said, Look, if you get a part time job, let's talk, let's do some Roth. Let's open a Roth immediately. You can fund it with W-2. There's a five year rule on that. Money's got to come out after five years after it's been funded. However, that opens the account. You never had that tax diversity. You never had that. Let's open it up and you can convert money that from that tax deferment at your incredibly low tax rate that you have right now. Let's do that. Let's convert. Let's save that money and then pass that money along to the next generation. Oh, my gosh. And he was so happy. He's got two daughters. He was very happy about that. But those are all the things that you need to plan for in that smart planning and test it and stress test it. And it may need tweaking over time.

Merritt Strunk:
Those those plans are not just sitting there in the back of somebody's trunk. Right. It's dying. Your life is dynamic. So what are we talking about? We talked about smart vision, smart inspection and smart planning and the things you have to plan for, for financial success in your life. If you haven't had one of those, please become one of the retirement unbroken community. Go to our website. Retirement Unbroken, go to go to Amazon and get our book, Your Retirement Unbroken. You can do that or you can call us at 858521 9700. But if you go to our website and click and just book right on our calendar and then we can have that conversation, knowledge is power. You can ask a good questions, we'll ask good questions and you'll get clarity. Right? And that will be the basis for making any future decisions about your financial life. We love our clients. We take it very seriously. We are fiduciary financial advisors and we'd love to put together a plan for you that will help you succeed for the rest of your life. That does it for the show, for retirement. Unbroken, check us out like us on the podcast. Tune in to our radio show at 1170 on Saturdays at 1:00 PM, and we'd love to talk to you further and tune in for our next show next Saturday.

Producer:
Thanks for listening to your retirement, Unbroken. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard earned assets to schedule your free no obligation consultation with merit. Visit retirement unbroken or pick up the phone and call 858521 9700 That's 858521 9700 Advisory services are offered through Momentum, Financial and Insurance Services LLC. An investment advisor in the State of California. Insurance products and services are offered through merit, strong and independent agent. California License number 07510. Certified Financial Fiduciary as a FINRA Recognized Professional Certification.

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.

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