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3.3.23: 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 Retirement Unbroken with your host, Merrit Strunk. Merrit is a licensed fiduciary and financial advisor who always places your needs first. Merrit 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 Merrit Strunk.

Merrit Strunk:
Welcome again to the Retirement Unbroken show. This is Merrit Strunk. I am the president and lead financial advisor at Momentum Financial here in San Diego. But we do business all throughout the country. And I just want to welcome you. And also while I'm at it, I want to welcome Matt McClure, our senior producer here with us today. Matt, how you doing, man?

Producer:
I am doing great, Merrit. It has been a productive week and I am ready and raring to go into the weekend here.

Merrit Strunk:
All right. All right. Fantastic. So, you know, as we get started here, I want to encourage you to drop by our website that's RetirementUnbroken.com. And you can always reach out to us, ask any questions you like, or you just give us a call. You can call us at (858) 521-9700. And like I say, reach out and make it a policy to talk to everyone personally that reaches out through the radio show and podcast. So don't bite and we can talk about anything under the sun relative to what's going on with planning your retirement, planning your financial well-being for you and your family. Um, like I say, knowledge is power. I always say that knowledge is power. There's a big difference between people who stop the world from turning and ask questions because knowledge is power and put it off and put it off and put it off. And boy, I'll tell you from experience, talking to tons of individuals and families, many times they say, I wish I should have gotten to this earlier. Right. Time's a ticking. And when it comes to money, time has got everything to do with it. So, like I say, stop by that website, and while you're there, let us know if you'd like this offer, which is it's a complimentary offer. It's 23 retirement cost cutters for 2023. It's packed with ideas how to cut the cost out of your retirement. Um, very valuable. Some of those you're going to go, Oh, yeah. You know, I intuitively know that, but had forgotten it. You know, it's all in our gray matter. You just got to knock on the right door and get it out of there. But having it in your hand is going to make a big difference. And also, the second package is a kind of a culmination of what we call a central reports, things you got to know, critical information related to your retirement, financial planning.

Merrit Strunk:
And we take a look at all the things and it's a great value for you. So make sure to ask about those two things. This is something that you would really, really like and really, really need for in most people's cases. Okay. Before we get going, here's what's coming up in the show. Are you going to unretire yourself? I know that sounds crazy, but some people retire and then they go, well, I want to do something else for work. I don't have to work, you know, 9 to 540 a week. But I wouldn't mind doing something that keeps me vital. Make a little money on the side. So are you Unretiring then? Are you a business owner? We're going to be talking about some financial help for business owners. So if you're you're self-employed, you want to stick around diffusing the retirement tax bomb. What's a retirement tax bomb? It's also called the retirement tax torpedo. And we're going to be talking about how to defuse that torpedo and prevent taxation in your retirement from kelaniya. That's just kelaniya. Right. And then we're going to talk about a couple of key numbers here, the the national debt and what is an unfunded liability or an unfunded obligation by the government and how is that affecting you? And then are you one of those lucky folks that work for a company or maybe the state city, you know, something like that, where you get a pension and you have options and we'd love to help you with that. We're going to be talking about some of those options might be okay, we're going to dive right into that. But first, hey, Matt.

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

Producer:
This one, I have to admit, is probably one of my favorites that we've done, and it comes from someone I know that that we all know and love. Someone very wise named Unknown related, I think, to Anonymous. But anyway, so this famous quote from Unknown is be decisive. The road of life is paved with flat squirrels who couldn't make a decision. Oh, dear.

Merrit Strunk:
You know, I feel so bad when I'm going through the the road or driving and I see this squirrel making up his mind. Do I cross? Do I not cross? Wait a minute. I crossed and I'm halfway through. Never mind. Let me go back. Right. What's. What's going on with those squirrels? Um, you know, it's from unknown, you know? And I remember getting a you know how you get a call and it it's. It says unavailable. You know, the caller. The caller ID is unavailable. You know what I you know what I say to my wife? It's like, oh, I knew her in college.

Producer:
Good ol unknown or unavailable.

Merrit Strunk:
But yeah, that's right.

Merrit Strunk:
Unavailable. Right. Okay. So, you know, that is so funny because, you know, making a being being decisive. The the road in life is paved with flat squirrels being indecisive. In this case, what does that mean? Related to all the stuff we're talking about, you're here trying to get educated on our purposes to help you be more financially savvy so you can unlock the potential, the financial potential in your life. So what does that mean? Are you going to be a flat squirrel because you're indecisive about your financial well-being? Are you going to be that squirrel that made it to the other side and lived another day? Right. Or maybe you lived a ripe retirement in Boca Raton where all the other squirrels are, Right? Okay. So. So, yeah, it does pay off. Make the decision and am so proud when people call and they said, you know, I listened to your show or I saw something and I knew I had to reach out. And it can make that call. That conversation can make all the difference in the world. And sometimes it is so true and so evident that they that they walk away going, you know, this conversation, this meeting we just had. I'm going to look back on this in the future and go, That was the conversation that changed our financial future forever. It can be that way for many people.

Merrit Strunk:
It can be that way where they all of a sudden understood, we can do something about this situation and end up in a better place. In order to do that, you can call us and you can get that package. That package is complimentary, which is clarity. We will look at statements. We will look at rates of return fees, past history of performance. We'll look at IRAs, 401. K, we'll talk about Social Security and Medicare, all those things where if you don't do this every single day, it's the kind of information that's critical. It's absolutely critical. How would you like to say, oh, now I know how to not pay, you know, so many taxes over my lifetime now, rather than I didn't know it. And how am I supposed to know what I don't know? How are how are people supposed to know that? Okay, so there are these people that as they get ready for retirement, they ask themselves a couple of questions like, okay, retirement is coming up and this is real. I just went through this just the other day. Somebody is getting ready to retire and they go do one. Do I need to get a part time job? Not that job that I worked for, you know, 30 plus years. But this job that maybe will part time not as stressful, you know, not the weekends that I have to put in all these things.

Merrit Strunk:
One, do I need to do it? And two, maybe I want to do it. We've got a client that works in the in the nursery business because they want to, not because they have to. They really enjoy. It's their hobby as well as what they get paid to do. They get to work in, you know, growing stuff and helping other people create beauty and get their hands dirty. It's therapy at the same time. So it's like getting paid for therapy. They really love it and it's their choice. They don't have to do it. They could do it. So for some people, even though this is called the Retirement Unbroken show and you listeners are part of the unbroken nation because you're getting smarter and wiser, this is about unretiring yourself and doing something. So this is this is is not just a money thing. It could be for another thing. So so folks who are heading back to work has actually emerged as kind of an aspiration. So roughly 1 in 6 retired Americans are saying that they're mulling over whether or not to get a job. According to a recent study that Paychex did, Paychex, one of the big, you know, employee benefits and paychecks, sort of services, third party administrators.

Merrit Strunk:
So some of the reasons, the top reasons for doing something like this is an undisclosed personal reason. Okay, let's just throw that one away. Let's put it on the side there so some people are not going to want to want to say why, you know, personal reasons. The other one, 53% said they need more money. Yeah, I get that. I got, you know, got to go back to work and get a little money and better to do it earlier rather than later. Yeah. You know, you know, 80 years old having to go back to work that's going to bite rather than your 60 something retired. And now I realize I got to have a little subsidizing money to sustain livelihood for expenses. How about getting bored? You know, one of the main challenges in people in retirement is they went from a 9 to 540 a week. Work, work, work, work, work. Always had a mission, always had a job to do. They knew they were going to get up and what they were going to do throughout the day. Now, every day is Friday. Every day is Friday, you know, and you can't golf every single day. So what are you going to do? They're bored. You've got to stay vital. So I've often said to folks is when you're when you're older and you're in retirement, movement is life.

Merrit Strunk:
Stay active. The last show we talked about, you know, playing bridge or having outings or getting an interest. Another one very, very real in this study is loneliness, especially if you're a widower or divorced and you don't have that that mate and you're feeling lonely. And I know this from the fact that if you're a divorcee or widower, male man, it's it's a feeling of loneliness and isolation. So you've got to stay vital. You've got to belong to something. You've got to find, you know, hobbies, join a group, get get some social engagement, those kind of things. Even if it's just lunch bunch, you know, or breakfast brunch, something like that in your church would be a great one. And then another one and it's directly related to the needing more money is inflation. I find it interesting that that the Answer is in this survey where some of those reasons were needing more money. But then there's another section that says inflation. How are they similar? Well, if inflation is high, you need more money to pay for those goods and services that you already are using. And you didn't used to cost so much. Oh, yeah, inflation, right? Inflation needing more money kind of together. Why is inflation an issue? Because it takes more money to pay for stuff. Right? Um, so now let's talk about some tips, tips, tips related to that if you're going to retire.

Merrit Strunk:
So if you don't need the income, that's interesting for a lot of people. I know that sounds really strange. You're retired, you quit your job and you don't need the income. Bless you. God bless you that you don't need the income. So consider a low stress job. Okay. So if your reasons for working are not, you know, financial, you're not alone. There's many people like that. And maybe you're seeking fulfillment. You know, it's worth considering a job that's low stress and provide some flexibility. Like I talked about one of our clients who who enjoys a nursery business and gardening. Okay? Creating stuff, watching things grow. So whether you need that income or not, it's important that you know the impact that can have to other parts of your financial picture. What what are those? Well, number tip, tip number two here coming up is extra pay that you're getting now that you're unretiring. In retirement can shrink your Social Security. For folks who claimed already. So you retire, you claimed now you're going back to work, Now you're getting income. So if you've tapped into Social Security, early air quotes early. Right. And are not yet at your FRA class A class. What's the what's FRA? Matt you know this one. What's FRA.

Producer:
Your full retirement age.

Merrit Strunk:
Thing, right? It reminds me of our right or wrong we did in our last session. Yes. Full retirement age as defined by the social security Administration. Full retirement age. For most people listening here is really either 66 or 67 and plus or minus some months. Right? So wage income, you're working, you're getting W-2, wage income could temporarily reduce your benefits. And so of Social Security, at least until you reach, you know, the 66 or 67. So depending on your birth year. Right. So while delaying your Social Security for as long as possible. Uh, means a higher monthly check, right? If you delay that so you get that 8% delay delayed retirement credits that you have per year as you delay. Um, and before you take your benefits, so many people can take. Many people do actually take it as early as they can. And again, I'm going to ask this question kind of rhetorically. So as you're listening to the show, what's the earliest age that we're talking about that you can elect Social Security? Under current law, that is 62. 62 is the earliest. And another little quiz is how many people in America to actually do that the first time they can actually possibly get their hands on that money. You know, they've been paying into the majority of Americans that are that are do that, you know, somewhere and don't quote me on this somewhere 80 or above 80% or above. And if you've been listening to the show, you know that they do that without consulting an advisor of some sort where they don't know what their other options are.

Merrit Strunk:
They don't know they could get more money. They don't know that if you elect at 62, you're only getting 75% of what you're entitled to. And that's okay. The IRS will keep it. The government will keep it. They need the money. They do. They need the money. So they'll keep it and you'll only get 75% and you'll lock in that baseline for any cola, cola, cola, cola, cost of living adjustments, they would lock in that baseline. So every year when there's inflation, you get the cost of living adjustment. So if you take it at 60 to 75% of what you're getting and you lock in that baseline. So if you do start getting those monthly checks earlier than your FRA, your full retirement age, which is either 66 or 67, there's a limit on how much you can earn without having your benefits penalized, right? Affected. Okay, Merrit. I can imagine. If you're listening. What do you mean? I'm going to take my Social Security benefits early. They're coming in to me and I'm working. What on earth are you talking about? That if I'm making certain amount of money that I'm going to get penalized on my benefits? Well, if that's news to you, then I hate to be the bearer of bad news in 2023. The cap is $21,240.

Merrit Strunk:
So you can make that. But everything over that. Okay, Everything over that 21,000 is for every $2 that you make, you get $1 withheld. Woo hoo! Let me translate that for you. Every dollar over the limit of that cap of 21,000 is going to have a 50% penalty. You get two bucks, they take a buck out of your Social Security benefits. That just sounds wrong. It just sounds un-American, doesn't it? Well, that's the law. And that's what they've got going in Social Security. And, you know, there's even higher limits. And even if you make higher amount of money, they'll start taking $1 out of every three. Wow, that hurts too. So just know. The point being, if you elect early and you go to go back to work, if you make over the cap, there's a penalty and you're not going to get all that Social Security that you thought you were going to get because you may be going, okay, I got this much coming in from a job, part time job. That'll be cool because I have all this Social Security. Yeah, not really. Not really until you reach fra. Right. Okay, then the other little. Gotcha. And the tip number three here is that Medicare. What's Medicare? If you stop working, you know, your your private sector job and you have health benefits and you retire, where are you going to get the health care insurance? That's Medicare. But if you're making money and you're taking Social Security as well, like we talked about now, you could be pushed into another tax bracket.

Merrit Strunk:
And if you're pushed into another bracket, it could also trigger additional cost for Medicare premiums. Right. So that's tough. People who make a lot of money and income in retirement know the pain of high Medicare premiums. Right. So the higher earners pay premium surcharge, a premium surcharge. The Medicare Part B, which is we've covered Medicare numerous times on this show. Medicare Part B is outpatient coverage and Part D is the prescription coverage. So the extra charges start at an income above $97,000 for individuals and $194,000 for married couples who file joint returns. Okay, So if that's you and you're bringing in 97,000 as a individual or put together with your spouse's income, maybe they're still working your old or they're not, or they're also doing part time and it's working out well. Or maybe you got the side gig and it's 194,000 combined. Okay. You might be expecting a little higher Medicare premiums now that you're unretiring yourself. Okay. So I mean, this is interesting information for folks who don't know it, who don't get to see this side of it. And again, it comes back down to, okay, retiring, do I need more money? Do I need more engagement? Do I unretire myself for some reason? And all of a sudden and you had elected Social Security, then all of a sudden you've got some some whammies, some whammies you didn't even know about.

Merrit Strunk:
Okay. So if that is you, if you've got questions about that, give us a call and I'll say the phone number again. 858521 9700 or go to the Retirement and Broken website and you can reach out to us there. Okay. Like we said at the beginning of the show here, we're going to come into a section here for if you're a business owner or self-employed, um, what are some of the the things you need to know about? Okay, Now, when you're the psychology of being an entrepreneur or a business owner and so on, guess what? You're focused on the business and many times very stereotypical, right, is that you're not focused on your own retirement plan or your own financial situation. Wouldn't it be wonderful if you had a business that just ran itself and you had the time to think about these things? Or if you had an advisor who was who was ringing your bell going, Hey, man, we got to talk about these things, make sure you're on track. If you don't, you may find yourself in a situation where you might be asset rich. I own a commercial building or I've got a revenue stream on the billings and things like that. When it comes time to say I'm no longer going to work, you're looking around going, I have no tax free accounts. I don't have a lot here or there and I don't know what my income stream would be.

Merrit Strunk:
I hope I can sell this thing right. Um, I would encourage you take a moment, step out from your business and think about your planning for you, your spouse, your children, your family. Think about these things. So if you're self-employed and you've got a stack of 1099, maybe you have accounts, right? And other tax documents this time of the year don't look past the importance of working with a certified financial fiduciary financial advisor. Okay. Don't look past that point. Advisors and financial advisors can help you navigate those unique challenges of being a business owner and take advantage of some retirement savings strategies that are specifically for you. Okay. If it sounds like you, we recommend that you think about if you don't have an LLC, right? You might think about forming an LLC and paying yourself first each month. I know for some business owners you're going to go, Well, of course, and then other business owners are going to go, That's a good idea. So it could be you know, there's a split down, down the middle going, okay, it depends on what kind of business you got. There's another tip I'm going to share with you right after the break. And if you're a business owner, you want to hear this. Okay. You want to hear it. So we'll meet you right back here at Retirement and Broken show right after the break. And while we're breaking, you can stop by our website.

Speaker5:
RetirementUnbroken.com and a stumble to the kitchen. Pour myself a cup of ambition and yawn and stretch and try.

Merrit Strunk:
To come to life. Is your house too big for your current needs?

Producer:
What about your current budget?

Merrit Strunk:
I'm Matt McClure with the.

Producer:
Retirement.Radio Network. Powered by a life.

Merrit Strunk:
As our circumstances change.

Producer:
So do our.

Merrit Strunk:
Needs In retirement, it's likely you'll no longer need the five story, two bedroom home you've lived in since your kids were all in school. But it's not just the size of the home that can be a consideration.

Producer:
In deciding whether to downsize.

Sandra Rinomato:
Some people are living in a situation where the house needs a lot of work. It's time to renovate the kitchen. It's time to put on a new roof. And they they think, do I spend that money? Do I have the energy to do that? Maybe I should just move instead.

Merrit Strunk:
Real estate expert.

Producer:
Sandra Rinomato told.

Merrit Strunk:
Cbc News that selling your home and moving into something smaller can be a good way to free up cash in retirement.

Sandra Rinomato:
By selling the house that liquidates gives you the money to live a lifestyle that you've dreamt of your whole life.

Merrit Strunk:
A smaller place is also cheaper to heat, cool and maintain. Moving into an apartment or living with family members is another way to potentially save money on housing.

Producer:
Expenses such as.

Merrit Strunk:
Lawn care and maintenance, experts say. To maximize your profits.

Producer:
On the sale of your old home.

Merrit Strunk:
Keep your real.

Producer:
Estate agent's commission as low as.

Merrit Strunk:
Possible. And there are.

Producer:
Companies out there that can help.

Merrit Strunk:
If you decide downsizing is right for you. So could cutting the size of your home help keep your retirement budget in check? That's a key question to consider.

Producer:
And it's one of.

Merrit Strunk:
23 retirement cost.

Producer:
Cutters for 2023.

Merrit Strunk:
With the Retirement.Radio Network powered by AmeriLife. I'm Matt McClure.

Producer:
To get your free copy of 23 retirement cost cutters for 2023, give Merrit a call at (858) 521-9700 or go online to RetirementUnbroken.com.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? Then tune in to Retirement Unbroken with your host Merrit Strunk, to learn how you can protect and grow your hard earned money. Retirement Unbroken every Saturday at 1 p.m. right here on FM 96.1 and AM 1170. The Answer protect your hard earned money today and schedule a free no obligation consultation now at RetirementUnbroken.com. Missed part of today's show. Retirement Unbroken is available wherever you listen to podcasts and online at RetirementUnbroken.com.

Merrit Strunk:
All right. Welcome back to the show.

Merrit Strunk:
The Retirement Unbroken show. And we're just talking about if you are a business owner, entrepreneur, what have you, in that area. You know, we talked about it's important that you step out and think about your planning it. And like I said, it's so stereotypical that you're just going business, business, business the whole time thinking about the business. But all of a sudden, you know, you realize I don't have my planning done on my own personal situation. So you also want to be thinking about what's the ultimate exit of this business, you know? And a lot of times people who have a building, they kind of, you know, regard that building as their retirement. You know, they can always sell the building situation. But there's also some ideas about that. But here's a simple tip. You know, make your retirement savings contributions and pay yourself first monthly rather than all at once. And some of those things you can reduce the risk and manage your risk well. Matt, you know, you're on this show every week, and so you know what that's called. What happens when you. You pay yourself into your retirement accounts every month. What's that called?

Producer:
We're talking about dollar cost averaging there.

Merrit Strunk:
Bing Yep, you got that one right. Dollar cost averaging. And what does that do for you?

Producer:
Well, you know, I mean, it really is a fairly simple concept when you look at it, because if you pay yourself that same dollar amount every month or a dollar amount every month and you you have that to invest, you can enter the market. When the market is low, you can enter the market when it's kind of somewhere in the middle. You can enter the market when it's.

Merrit Strunk:
High.

Producer:
But over time you will come out ahead. You will have spent, say, less per share than you would have otherwise if you had bought a certain number of fixed number of shares each month. You you invest that same dollar amount each month. And you really do. And we've seen it time and time and time again. History has proven that you come out ahead and so your your price per share is a lot less. You get into that lower entry level and you just do better in the end.

Merrit Strunk:
I am so proud. I am so proud. Matt, you nailed that one. You killed it. That was so awesome. So, folks, if you if you attend the show every week, then you you get this kind of knowledge and we throw out the term dollar cost averaging. You can Answer like Matt and you've got it nailed. You know why you're doing what you're doing right on that dollar cost averaging. Matt Thank you that you just killed it. That's fantastic.

Merrit Strunk:
Thank you. I learned from the best.

Merrit Strunk:
Yeah, right on. So the bottom line is if you're a business owner, you know, Yeah, I would say take the time to talk to a financial advisor or a certified financial Financial fiduciary. And who's going to talk to you about that planning? Ask you the tough questions, make sure that your future planning is done for you, your business, your partners or whatever. Make sure that it's set up as best as you can. So and operating a business is challenging enough. Okay, So let us help you chart that course to retirement. And you know, I said earlier, too, that many times people who own a building, you know, is their retirement related to their business if they don't sell the business altogether, you know, did you know you could. 1031 exchange that into a tax free retirement income source? And not lose the the principle. And that principle, when you finally take it back, may appreciate and that you can continue to to take tax free income. There are also 1031 passive income strategies. So we've never talked about 1031 exchange as far as my memory on on the show here yet, but we probably ought to do that. Matt we probably talking about 1031 exchange strategies for appreciated property and there's all kinds of ways to do that. If you're a very successful business owner and you're say, younger, you know, maybe you're 50 and good health, wow, There's some great strategies for you.

Merrit Strunk:
Reduce taxes, um, transfer wealth efficiently in your business. So get more money, pay less tax. Do you not know these? They are so important. So if you're very successful, you're healthy still, you're 50 or something. There's a there's options for you. Um, really nice advanced strategies. Okay. Do you have a tax time bomb? And we're going to talk about how you diffuse that tax time bomb. And you also heard me refer to it as a tax torpedo. So where with retirement accounts throughout America, where is the majority of the money sitting? Is it sitting in a tax free position or is it sitting in a taxable forever position? Folks. It is sitting trillions of dollars sitting in a taxable forever position in your tax time bomb. So because the standard IRA traditional or the traditional 401. K, these are these are going in the gross form. They've never been taxed before. And yet in retirement, you may start tapping these accounts for your lifestyle and your expenses. But every time you tap that pre-tax retirement account, it is now taxable at your current retirement bracket. Okay. At your current income tax rate. Okay. You may be going. No big deal. My income will be lower in retirement. Yeah. Merit? Yeah, right. No. Um. You may be right, but the odds are just as equal or stronger that you are going to be at your highest income tax bracket in retirement.

Merrit Strunk:
Why? Well, let's consider the factors that are driving this. First of all, United States is at a $31.6 trillion deficit. $31.6 trillion deaths. Even today, the Supreme Court is hearing about something like 300 billions of dollars or I don't know what the figure is. It's pretty high, which is student loan forgiveness, basically just a big gimme from the government to try to ingratiate young voters to vote one way or another. A big gimme. Right. And you hear I heard this guy on the television talking about, hey, man, it's tough out there. And there's no guarantee that if you go to school and get a degree that you'll get a high paying job. Yeah, that's right. Welcome to the world. Nobody owes you a living. Nobody owes you a living. Are you in crazy? You're crazy. Who sold you on that plan? That is not a good plan. So, look, you go to school to get the degree so your odds are better that you can get a job by having the degree of which your employer may require for hiring you. To try to make that argument that the world owes you a living and there's no guarantee and you're basically it becomes too hard for you. And now you've got to pay the the loan that you took. Right. Bad news. Tough. You have to pay the loan you took. Let me try it another way.

Merrit Strunk:
If you're turning red in the car listening to me and you don't totally get this. Okay. So the low income worker who never got to go to school, who couldn't afford to go to school, who did not take out loans, but is working their butts off. We're going to use that person's low income bracket person. We're going to use their tax dollars to forgive the loans of the people who may. It may end up making much more money than them over their lifetime. It doesn't make sense. And if you think that the national debt of $31.6 trillion is going to somehow have to be paid right. The government spending more money just in that example in the loan forgiveness totally blows your mind. So folks, tax is more than likely will increase over your lifetime. And when you retire, there is no guarantee that you won't be at the highest tax bracket of your lifetime. Right now, we are in the lowest brackets of our history, Right. The lowest brackets in our history. Right. So odds are, okay, so you have this tax time bomb. Is there a way that you can get out from under this? Right. By the way, an unfunded obligate versions of the government, Social Security and Medicare, $182 trillion. Yikes. Go look at the US debt clock.org. You'll find that information. So what might you consider what might be an option for you? Well, the first window could be a Roth conversion and that that first opportunity is a Roth conversion in the years before enrolling in Medicare.

Merrit Strunk:
But recall that Medicare has a means testing. It has a two year look back. So your income at 63. Right when do when do people stereotypical go on Medicare 65 so two years prior 63 that determines your Medicare Part B and D premiums when you turn 65. A prime window for a Roth conversion. What's that? You have a traditional pre-tax IRA. You pay the taxes on the amount that you convert into a tax free forever pocket. You've got to pay that with outside sources. That's a Roth conversion. Okay? It's called a backdoor conversion is between that window. There is between retirement in 62. So it better to think about those. Roth And do I have an opportunity to that before you hit 62? If you do end up triggering the Medicare means test for a two year, right, or two like a year or two, while you do your Roth conversion, you may find that it's still worthwhile and you may be able to appeal. Medicare means testing surcharges through the IRS form. Are you ready to have pencil and paper? Ssa 44. Stroke, niner, niner, niner. Know that that last part is not right. It is a dash 44. All right. So that's the appeal of the means testing to the surcharges.

Merrit Strunk:
Okay. So the point of that, your first window is Roth conversions before 63, because by that time you've got that means testing for these premiums of B and D for Medicare. The second window for Roth conversions is between retirement and when you start taking your Social Security. So if you retire, but you have an elected Social Security or maybe even your pension income, if you have a pension, you're lucky enough to have that. So at which point your income will be significantly higher, right? So you're retired? I'm waiting on Social Security and my pension. Your income is lower. So because your income is lower, that might be your your conversion, your Roth conversion opportunity. Therefore, that amount that you convert is taxed at a lower amount because your income is lower. You got it. So that is also the argument for can I defer Social Security longer if I wasn't planning doing that because I want to do the Roth conversion. Is that an option for you? Just give us a call. Stop by retirement. Broken. We'll do the calculation for you. The third window lasts until RMDs begin at age 73. Right. It used to be 70.5. It was 72. The law of the land now is 73. So if you're sitting on your retirement tax bomb. There's got to be a song that ends up being somebody has to do a song that's called the Retirement Tax Bomb song, you know? Um, at that point, then the conversion window is probably closed, right? So if you're sitting on that tax bomb and you've reached RMDs.

Merrit Strunk:
More than likely the window to do that Roth conversion, have it make sense for you is probably closed out there. So listen. If you're one of those lucky folks you worked for, one of the large companies that had a tradition of doing pensions. It's more than likely that pension got less sweet and less sweet and less sweet. Depends on how long you worked for that organization. You might be coming to a time to coming up to retirement where you've got to elect what do you want to start taking your pension and we can help you think through that. Not every pension is equal, by the way. Um, and you may take it. It may be more than what you need. And then at that point, you can reinvest that money that you don't need its excess income and reinvest that in a tax efficient manner. Okay, that's an easy one. But you have more options than you think. And we you know, you need to make the most of those things. Um, if this sounds like you reach out to us, let's talk about it. There may be other options for you. They might offer a lump sum. Sometimes when you have a large balance in your pension account, but the payments are, you know, maybe they're good payments, some may be small, some may be larger.

Merrit Strunk:
And you think about it and you take a look at that, a large balance, and you go, if I took that amount of money every month and this is the large balance of my pension, how long do I have to live to get my own money out of that? Right. And then it becomes a question of do I take the lump sum as an IRA? Right? And then use time value of money. Maybe you can grow to 6%, 8%. We talked about the rule of 72. You want to double that money in ten years, you have to make 7%. So if you had 100,000 pension balance, you could take it as a lump sum if your plan allows it. Some plans do not allow lump sum. And if you think you can get 7% all that, you can double it in ten years. That'll give you an idea of, you know, time value of money sort of thing. We talked about the rule of 72 last couple of shows. You want to find out what that is, You can go back and basically it'll Answer you how what rate of return do I need in order to double my money and how many years? Okay, How long will it take to double? Okay. You can also think about doing something that maybe fills a gap in your plan that you don't currently have.

Merrit Strunk:
Okay. What about tax free retirement income? That's right. I said it. Tax free retirement income. Beats the heck out of taxable retirement income, doesn't it, folks? Yeah, it does. Or how about chronic care slash long term care? You don't have it. 70% of us will need it according to a Genworth study. And it can actually end your estate depending on how long you stay and how expensive it is and what state you're in. Those are some of the variables there. But could you get something in place where you've got maybe. The option to take tax free retirement income with your pension dollars that you reposition or chronic care for long term care in a tax free manner or and or if you just didn't get sick and you had enough money that if you died that your heirs were in a good place and they got tax free wealth transfer. Yay, that's fantastic. That's a lot of flexibility. I threw a lot of a lot of pitches there. That is some great flexibility, great benefits. And if your female and you don't have long term care, you probably ought to talk about it. If you're married and your wife doesn't have long term care, you probably ought to talk about it. Right? If grandma and grandpa and your mom or dad lived a long time, what am I going to say then? You probably ought to talk about it.

Merrit Strunk:
You probably ought to explore that, because knowledge is power in these situations, and you don't want to be this person that procrastinated, didn't didn't explore that. Right. Didn't know that. Okay, we want our clients and we want our listeners to have more get this term mailbox money. Ooh, mailbox money. I don't. You know, even if you didn't know what that was, you can say, I don't know what it is, but I want some of that. You know, we've got clients who who make money by walking to the mailbox and back again. The ones I'm thinking of thinking of have oil revenue, gas revenue from there, from royalties, however. If if you're in the situation I just talked about related to your pension. And you want to make sure you have mailbox money. You two possibly could be in that situation where you make money by going to the mailbox. Or how about this term play checks. We've got pay checks and we've got play checks. You want to make sure you've got the got the paychecks and the guaranteed stuff. But how about the play checks in retirement? That means fun. You can do stuff. So play checks, mailbox money. You can count on each month as if you were still working. In retirement to enjoy your retirement lifestyle. Those are some things that I just covered there that I will I will put money down.

Merrit Strunk:
Make a bet. The majority of people who are listening right now did not know these things. And they do not know how it's created. Let's talk about that. Okay. So what, if ever so popular we had we had an interview with Ford Stokes, who wrote the Annuity 360 book, and we did a session here where I interviewed him say, what? Why are they so popular and what are the benefits? What's the pros and cons? What's the upside, the downside, the sideways of these vehicles? There have been record sales of income annuities where people are fleeing to safety and guaranteeing their retirement income. Recently, higher record sales of these things if you've got an annuity. My personal opinion you might have heard me say it before, there are a lot of them out there that are just not big fans of. Right. And there are some for the right person, the right people, the right situation that it does exactly what they're supposed to do. But some people have those annuities that aren't the best. If you're not sure what you have or how it works or if there's a better solution that can be replaced with that, give us a call. We'll do what's called an annuity x ray. Okay, so we can do an annuity or x ray. We'll point out anything you need to know, the pros and cons, the upsides and downsides.

Merrit Strunk:
And this part of the financial planning space has experienced a lot of innovation. All the innovation in went into the fixed indexed income annuity at some point, and there are some great things about them on specific products, not all of them specific ones. And the cool thing is with these rates that have gone up through the Fed and the lending rate and the floating rate and all these things, Treasury, Treasury bonds and everything. So that has actually benefited and made the annuities actually more and more attractive. And we also talked about them as a bond alternative as well. So that has a lot of areas that you may want to explore and see if that's right for you. Okay. We covered a lot of stuff there and that feel good when we do this. Matt I feel really good when we give people some, some, some knowledge, some some bones to gnaw on going like, I didn't know that. Now I know that I need to find out more about that. How do you do that? Well go to RetirementUnbroken.com Reach out to us by phone at (858) 521-9700. Okay. 9708 58521 9700. And ask questions. It cost you nothing. Knowledge is power. Why wouldn't you do it? And don't procrastinate. All right. This is Merrit Strunk. I am the lead financial advisor at Momentum Financial and host of the Retirement Unbroken Radio Show and podcast. We'll catch you back here next time.

Producer:
Thanks for listening to 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 complimentary no obligation consultation with Merrit visit RetirementUnbroken.com or pick up the phone and call 858 521 9700. That's 858 521 9700.

Producer:
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 Merrit struck and Independent agent. California License number 07510 Certified Financial fiduciary is a FINRA recognized professional certification.

Producer:
With soaring inflation.

Producer:
Continuing to wreak havoc on everyday budgets, there's never been a more important time to cut costs. But do you know where to begin? I'm Matt McClure with the Retirement.Radio Network. Powered by a life. There is no question costs have been soaring. About one third.

Sharon Epperson:
34%, say they are worse off financially this year than a year ago. Almost half, 46%, say they've had to cut household spending due to inflation.

Producer:
Cnbc correspondent Sharon Epperson recently reported on a survey that sheds more light on how inflation has been impacting us all. Even those who earn six figures a year.

Sharon Epperson:
These high earners say the first expenses to go are dining out at restaurants, entertainment outside the home and travel and vacations. More than half also say they'll delay big household purchases.

Producer:
That high inflation has led the Federal Reserve to respond with interest rate hikes. The goal is to increase costs to tamp down demand. Esther George is president of the Kansas City Fed.

Esther George:
Already we've seen the committee's policy actions lead to a very sharp tightening of financial conditions.

Producer:
But it.

Producer:
Hasn't done enough yet and costs still keep rising. So what should you do? Well, we have a free resource called 23 retirement cost cutters for 2023. It's full of ideas to help you make the most of every penny. Things like take advantage of senior discounts, eliminate unnecessary subscriptions, and cut back on clothing expenses, look.

Sharon Epperson:
At your needs and wants, Figure out what's optional and what you can cut.

Producer:
Out. The last one on the list of 23 retirement cost cutters for 2023 is perhaps the most important. Seek advice from a trusted financial professional. That's the best way to get in-depth financial advice in retirement planning that's customized to you and your goals. Just make sure whoever you consult for financial advice has years of experience and credibility you can verify. So do you know the best way to cut costs in 2023? That's a key question to consider as our budgets get stretched to the max with the Retirement.Radio Network Powered by a Life, I'm Matt McClure. With age comes Wisdom and senior discounts. I'm Matt McClure with the Retirement.Radio Network powered by Amira Life.

Producer:
As the old saying.

Producer:
Goes, everything gets better with age. It's true of a fine wine, a happy marriage and opportunities to save money. People of a certain age can get discounts ranging from 5 or 10% to 25% or more at restaurants, shops and other businesses. Many times they'll promote those extra savings. But Jim Miller, senior editor of Savvy, told Oklahoma's News Four, Sometimes you have to be proactive.

Merrit Strunk:
So the first thing is.

Jim Miller:
Is you always need to ask because a lot of businesses and organizations offer senior discounts, but they don't advertise them. So don't be shy about asking to save time.

Producer:
You can search online for lists of up to date senior deals at large retailers like Amazon, Kohl's and more. If you're willing to dive a little deeper, you can find more discounts in a variety of other places. And if you're looking to stay healthy, Silver Sneakers is a program that provides fitness classes for those on Medicare at no cost. That's right. You don't get a bigger discount than free. So are you taking advantage of the big senior discounts you're eligible for? That's a key question to consider. And it's one of the 23 retirement cost cutters for 2023.

Merrit Strunk:
With the.

Producer:
Retirement.Radio Network powered by a.

Producer:
AmeriLife. I'm Matt McClure.

Producer:
To get your free copy of 23 Retirement cost cutters for 2023, give Merrit a call at (858) 521-9700 or go online to RetirementUnbroken.com.

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 Merrit Strunk at RetirementUnbroken.com.

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