12.2.22: Audio automatically transcribed by Sonix

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

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

Producer:
Welcome to your 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:
Hey, this is Merrit Strunk. Welcome to the Retirement Unbroken show. I am the host and the president of Momentum Financial. And you are listening to the Retirement UnBroken Show. And because of that, you are a member of the Unbroken Nation. Isn't that nice? You want to be part of the Unbroken Nation. And, you know, folks, why are we showing up week after week, recording a show, doing a podcast, putting together information? Well, our goal to in doing this on the Retirement Unbroken Radio Show is to transform our listeners into more educated and more equipped and financially savvy individuals so that you can make better financial decisions for you and your family and unlock what is possible and your financial future. Isn't that nice? So our premise, premise is that the truth is for many people their retirement is already broken and they just don't know it yet. Kind of a bummer. You know, we're joined here today by our producer, Matt McClure. Matt, what do you say, my friend?

Producer:
I am doing well. Merrit, how are you? I hope you had a great holiday. You know, we just went through Thanksgiving. I think I've just about recovered from all of the turkey and the other things, and I'm just about to come out of hibernation after all that food.

Merrit Strunk:
Yeah, we had a great time. Thank you for asking. And, you know, it always is a great time to slow down and reflect on what you're grateful for. And gratefulness is one of the most incredible feelings a human can tap into truthfully. So tapping into that gratefulness Thanksgiving. We had a wonderful time with family. Thank you so much. I'm glad you had a good time, too. So, Matt, bringing you into this conversation I had just a second ago. Right. Just this comment, which is for most people, I mean, not most people. For a lot of people, their retirements are already broken. They just don't know it yet. And they may be a long way off from retirement. Right. But they have hopefully what we call a retirement. And for many, they're just not doing what they need to be doing. So, Matt, let me ask you something. Let's pretend you're the average person. We all know you're above average, But, you know, so if you are like putting yourself in that average person, person on the street that is aspiring one day to have a choice to stop working. Right, the stop working golden years, American stereotypical retirement, do what you want to do and have a good time and you want to enjoy your life. You, your spouse, your family, you want to travel. You want to see your grandkids, enjoy hobbies like whatever they may be golfing, woodworking, whatever it is, you know, that typical retirement thing and lifestyle. So if you aspire to do things, these things, Matt, you're putting yourself in the place of our listeners here. But what you don't know is that your retirement, your future wealth, your future financial future is actually broken, but you don't know it. If that's the case. Matt, when would you want to know that it's in danger?

Producer:
Oh, as soon as humanly possible. I don't want to wait until I'm going into retirement and then it's too late. That's just. That's not a good situation.

Merrit Strunk:
Are you sure? Are you sure that. That. That if it's broken and you don't know it, that as soon as possible is when you would want to find out?

Producer:
I am 100% sure about that. Absolutely.

Merrit Strunk:
And here's here's another way of phrasing that question, which is if you if you had that situation, how long would you want to go on not knowing that situation? I think that that's another way of asking it. Right. So so so again, being the foil here, what's the single most important thing that you think you can do this week so that you can find out if there is some simple things, tweaks, fixes to the situation so that you could have a future retirement, a a positive financial future? What are some of these things that you could do this week to to take action?

Producer:
I mean, I think for me, like the number one thing, the easiest and simplest thing would be to ask for advice and ask for some help from from an expert. And I mean, hey, I know a guy so, you know, that would that would be an easy thing for for me to do.

Merrit Strunk:
Right. Right. And I think that is now that is such an obvious setup, an answer. Right? It may be broken. And if it is broken, then. What would you do this week? And, you know, it's a great, you know, obvious answer to that question. And I think people driving in their car or listening at home and listening at work or whatever, again, could certainly agree. Oh, that's a gimme. Yeah, what a set up that was merit. So but but people don't. Right. So there's that situation you may be one of those if you're listening and you don't that would fall under the headline of procrastination potentially right. You know you should but you don't that's that's the definition. Right. So what what are some of those reasons why people don't take action? They don't call somebody like me to to ask simple questions like, how do I know? Right? How do I assess my situation? What are the what are what are the things I need to do? What can how can you help me sort of thing? You know, why don't people do that? What? What is it? What's keeping them from taking action?

Producer:
Well, a couple of things. I think one of them is living in blissful ignorance and the the power of that, the you know, the comfortability of that, I think, is a is a big thing. It's kind of the same reason that people don't go to the doctor a lot of the time if they think that something might be wrong, they're like, Well, if I go to the doctor and I find out something's wrong, then I'm going to know that something's wrong and that's going to be added stress and all of this and like, Yeah, but you can get help if you know something's wrong. Like, like the same thing kind of applies.

Merrit Strunk:
Like most men. Like what I say about when the people don't go to the doctor. Most men don't go to the doctor unless something falls off of them, you know, so. Right. Something. Exactly. Oh, something just fell off. I have to go to the doctor.

Producer:
You know, my arm is not supposed to be lying on the floor, you know? What is that? I got to get this fixed.

Merrit Strunk:
Absolutely. And I would say I would throw some things in there. When you're thinking about the list of those things, which is the fear of the unknown, maybe this isn't right for me. It's uncomfortable for me. I don't want to face that. How about perfection? Which is the opposite, because there are certain people who have a mindset in their personality, which is I must know everything about this before I go and talk about it. And that is is a great excuse for you need to achieve perfection before you take action on it. And that is a perfect reason to procrastinate. I'm not ready. I can't go there. I can't go and have a conversation with a fiduciary financial advisor until I know the answers to this. Right? How are you supposed to know the answers to this? Did you go to school to study financial investing? Did you read many, many books about it? Have you done all the internet searches and research that you ever want to do? Because it could just gag you and full of bad advice as well. Don't do that. Here's what I would say about this, and I'm going to encourage everybody to think about this thing, you know, because any it's like I tell my kids, you know, you don't have to tell me all the reasons why you can't do something. You just need one. You just need one excuse.

Merrit Strunk:
That's all you need, right? So don't don't, don't give me ten, you know, So you're going to pay the piper on this if you don't take action with money. Time is everything, right? Acting early. I'll make the case for you. You cost you dollar cost average, put away money when you're 24 years old. When you're our ages, you can choose not to work. If you compound interest, you know, systematic contribution, all those things statistically with market, the markets, the way they've gone over time, you'll be in a good place to do it. But there are many reasons why you cannot do that, and they are the reasons why you will possibly not have the retirement of your dreams. So don't let perfection or the or the analysis paralysis or I must know everything about this before I go and talk to somebody because I look like a bozo. That's not it. There's no shame or embarrassment in having that conversation. Whether you're in a good place or a bad place. It just is. So don't feel like it's lack of knowledge, you know, or I'm ashamed because I don't know these things you didn't go to school for do it. You don't do this every single day. You don't do this every single minute. I got it. Talk to somebody who can help like us. You don't need all the answers before you talk to someone.

Merrit Strunk:
So if you are somebody who's listening to this and you're like, I want to take what I call imperfect action and move forward, create momentum, one step leads to another. I pick up the phone. I have the conversation, I have the conversation. I fix the problem. I fix the problem. I have a good future financial future. You know, it's wonderful. That's the way momentum works. Take the very next action and it doesn't have to be perfect. It can be imperfect action. So here's what you can do. You can go to our website. If you've never been there. You can go to RetirementUnbroken.com RetirementUnbroken.com and press the complimentary consultation button at the top right and get your retirement unbroken analysis custom for you your situation right there is no cost to that it's complimentary there is no judgment you know get the and sometimes when you said ignorance is bliss isn't it wonderful sometimes somebody doesn't have all this fear or reasons or anything. They don't know enough to not know or to even be ashamed or be worrying about it. And they're just going to call and ask, Hey, how do I get out of debt? You know, what's the best way to do that? How do I how do I invest my 401k right now? Be the market so wonky. You know what? What's right for me? Okay.

Merrit Strunk:
Great conversations. Those are great questions to start the ball rolling. So if you have one of these complimentary consultations, let me let me tell you what it could be. It could be the cause set in motion, right. That ends up bringing you to a place you want to be. 20 years, 30 years, five years in the future. Och, I'm in a much better place because I started asking questions and I talked to somebody who could help me. I hope I got that point through. That uncomfortableness you're feeling right now, if you're listening. Right. That uncomfortableness right now you may be feeling is your future. You telling you to act, for goodness sake. Act, call, ask the question so that they the future you can achieve everything that they want to achieve. That's that uncomfortable voice in your head. The feeling like, Oh, I know I have to do that. Right? And when you have these conversations about planning, financial planning, and this is a great time to do it, this is what this whole show is about. You want to check the boxes? Will I have enough money for my expenses in the future? Will I have a lifestyle that I want to achieve? If one of us gets sick, are we going to be okay If one of us predisposes the other? Are we going to be okay? Will I be a victim of having too many taxes because I didn't plan my tax diversification or drawdown order or my assets that I invest in? What if I have medical expenses later on? Will I be able to afford those? What if the economy crashes? Am I going to be okay? What are the stock market crashes? Those are all the checkboxes we're going to check off in comprehensive planning fashion.

Merrit Strunk:
Right. So enough of that. Where we are right now, here we are coming up to December. Wow. Last month of the year. And we have a few days left here of the Medicare annual enrollment period. It ends on December the seventh. So that's important for seniors who no longer work, who who use Medicare for their health insurance. And if you need some help, you give us a call on that one. There's a lot of people who are doing their annual enrollment. And for goodness sake, if you watch television at any time at all, you're going to be slaughtered with Medicare Advantage advertising on it. We've talked about that in the past. Be careful. There's a reason why they're on television. Somebody is making money. Bright. So it's not always the best choice and it pays off to do your due diligence. So what's coming up in the show here, I want to hit that real quick is we're going to talk about New Year, New Year, New Year's resolutions have to use to Mr.

Merrit Strunk:
Lips and Mr. Tongue all together that you can keep some easy ones related to your financial well being. And we're going to talk about some of those things that retirees fear the most. They fear the most. And there's good reasons for that. They weren't talking about the cost cutter idea of the week. And possibly if we have time, we're going to stop. We're going to start talking about how to stop the bleeding in your bonds and some important updates for 2023. So let's let's first touch on the stock market today. So if you tuned in to the stock market today, again, at the time of we're recording the show, it was all abuzz today about Jerome Powell making comments about the upcoming Fed meeting, because when there's a Fed meeting, they declare a Fed lending rate hike. And we all know if you've been listening to Show on the Unbroken Nation, you know, rate hikes and how they affect the markets and so on related to the economy and why are they doing it? They're trying to slow down the economy. Right? So the market started out low, basically in emotional fear of what might come out of this upcoming meeting. And then Jerome Powell, the head of the Fed, then came out with pretty, pretty tame comments. Right? Pretty tame comments.

Merrit Strunk:
And he said something like, okay, we may reduce the amount of severity over the hawkishness of the rate increases and then the stock markets bounce right back up. I mean, we were down 200 points on some of the indexes and now we're back up. So some thoughts here related to inflation, inflation, the GDP, the United States gross domestic product production grew 2.9 in the third quarter. That's interesting. So inflation is supposed to be coming down a little bit. The Fed, the hikes have been going up to do that. And now we see a GDP that's actually somewhat strong, 2.9. So it's a bit of a mixed signals. That said, we're starting to see some decline in employment numbers. They came in way under what was expected. And we're also starting to see some layoffs. There's a whole slew of tech companies that have announced layoffs here, not significant, but still they're there. In contrast to this, we're reducing the amount of hikes and we see maybe the the inflation coming down a little bit. The what we call the yield curve, the inverted yield curve is still inverted significantly. We haven't seen this levels of inversion of the yield curve since 1982. Okay. What does that mean? I mean, you hear, hear. You hear people talking about the inverted yield curve. What is it and why is it important? Basically, is the difference between the the short term bond and the long term bond.

Merrit Strunk:
So it's like for now, the ten year US government Treasury bond is 3.8%, you know, so that's the long term ten year. That's a longer term. They have 30 years as well. And then the yield for the two year bond, a short term is 4.24. We just haven't seen that inversion in a very long time, 40 years or so. So that is typically a bellwether indicator of recession. When's it coming? Some people think it's going to be recession time later, latter half of 2023. We don't know. So this represents invert inverting yield curve is whereby the longer maturities of bonds provide lower yield and the shorter maturity treasury bonds. Why would you ever give the government money for a longer period of time, get back less money? No bueno does not make sense. Non sequitur makes you makes your brain kind of. That doesn't make sense. And that's what we're dealing with here. So if you had bonds as a retiree and you're in your 6040 portfolio, then you know, you know, you're just not getting the yield on the bonds you would already purchase that are longer term bonds in your in your bond ladder. Well, that, folks, brings us to a little bit fun here. Matt, would you please do as the honor of giving us the financial wisdom quote of the week.

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

Producer:
It is my pleasure to read the quote of the week this time around. It comes from a guy named Dave Ramsey who talks a little bit about money himself on a daily basis here. And he said this, quote, You must gain control over your money or the lack of it will forever control you. Boy, when I read that, I immediately thought of like me and my financial situation, like in my twenties and early thirties especially.

Merrit Strunk:
Yeah. I love Dave Ramsey's down home wisdom, especially as little Tennessee twang that he brings to it, you know. And I've said this time before, one of my favorite quotes of Dave Ramsey says, You've got to live like nobody else so that later you can live like nobody else. And what he's trying to say is, look, you're going to get rid of that debt. You got to live on beans and rice and you'll be living like nobody else later on. You know, that was more southern than it was Tennessee. But, you know, you get the idea. So and then another one related that, too, is you either let taxes control you or you control taxes. And you can't do that without talking about it, Thinking about planning about it now. Right. You can't reduce your taxes in the future if you don't take care of the situation. How you disposition your assets. Now, right. Your secret partner and your retirement on the taxes there. So are you in the retirement red zone? You maybe don't know what I mean. So the retirement red zone is that you plan to retire in the next five years or you have just retired within five years. And if that's your case, you've got to figure out if you're in what we call the sequence of returns risk. This is what can kill your retirement if you don't have things set up correctly.

Merrit Strunk:
You can't afford to lose too much during these years, which means protection and growth is key. It's like I say many times before, which is you can hope for the best but prepare for the worst. Recently we've talked to folks who had the 6040 portfolio in retirement. They've been retired for a few years and they have lost significant value in their assets because they were investing as if they were in their accumulation years. And the same kind of setup on the 6040. In somewhat passive portfolios that are programmatic, in percentages, in certain assets. And that's just not evolved. It's not evolved investing anymore, especially for people who are looking to retire and managing their wealth over long term. So if you are in that that retirement red zone, talk to somebody. If you've lost a lot of value in your portfolio. Call a financial fiduciary financial advisor that has your best interest at heart and you can call us, right? Our phone number is 8585219700. And it doesn't matter where in the country you are, we can help you. You can also go to RetirementUnbroken.com and reach out to us. So if you're in that situation you're in the red zone. You wonder why you've lost so much. You can't figure out what's going on. You want to talk about taxes, income, long term care, those kind of situations.

Merrit Strunk:
Get a comprehensive financial plan. Don't wait. Take imperfect action and move forward. Okay. So the new year is coming up. Wow. Wow. Here we are. And frankly, I'm going to be happy to see 2022 go by the wayside and move on to 2023. I think I said the same thing about 2021. I think I said the same thing about that. It's like who that one was. That one was quite the ride. It feels like you got on the bull and rode for less than 8 seconds and got told Got toward up is what you got. Yeah. You got tore it up. What you got cowboy. Right. So we're going to go through a couple of these New Year's resolutions that you may want to do, and I hesitate to even call them resolutions, just good actions here coming about in the New year. Okay, You're ready for the first one. All right. So calculate your net worth. I love it when we do this for people because they just, like, have no clue. And all of a sudden they see this number and they're like, Wow, I had no clue. Yeah, don't get carried away here, buddy. Right. So the whole chat task is not losing it. Getting is one thing, not losing, it's the other. You know how the metaphor is.

Merrit Strunk:
Climbing to the top of Mount Everest is a skill set. That's the accumulation years of your life. But most mountain climbers will tell you it's just as important and a different skill set, different mentality of how to get down the other side of the mountain. Right. That's the D accumulation. That's retirement years. It's a different paradigm in mindset. And if you don't change that, by the time you hit the peak, you've got some things in store for you got to be careful, right? Especially right now. So any changes that you need to make become more obvious. When you're doing this net worth calculation, You start by totaling your assets, which is account balances, real estate equity, anything of value, and then you subtract your liabilities like the mortgage loan or the debts or anything you owe. So to create a clear picture of your net worth, that in itself. Great, great exercise. Pretty easy for you to do. Next one, check up on your retirement accounts. And what you want to do is be sure to take advantage of any contributions if you're not retired yet offered within your employer's retirement plan. There are people who are leaving free money, free match money on the table. And they also you ask them, well, what's the match? Is there a Roth and is it available to you? And are you getting all the free money? And when you're in that stage of you're just working, dealing with the world busy, busy, busy kids and work and family.

Merrit Strunk:
You may not have the opportunity to stop the world from turning and ask those questions. When we when we talk to you and meet with clients, we provide that opportunity for you to go, okay, here's what I have to do, action plan, because we're going to talk about it next week, right? So if you're 50 or older, you can contribute up to an additional 7000 a year in your 401. K, So that's $583 a month towards contributions. So it's changing into 2023. You can put that in your IRA, right? So you can contribute an additional 7000 a year or $583 a month to an IRA. Obviously, if you're under 50, that that that figure is different. If you're self employed, get in touch with us about setting up something like a Sep Sep IRA. Boy, there's some great advantages to that. So if you're self employed, you've got to know about those. Tell you what, we're going to take a break right here and then going to come back with a rest of those things that you can do. They're pretty easy. If you haven't been to our website RetirementUnbroken.com or call us at 858 521 9100. We'll see you after the break.

Producer:
Miss part of today's show, Retirement Unbroken is available wherever you listen to podcasts and online at 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. You're listening to your retirement unbroken. To schedule your free no obligation consultation with Merrit, visit RetirementUnbroken.com.

Merrit Strunk:
All right. Welcome back to the Retirement Unbroken show. This is your host, Merrit Strunk. And we were talking about the things that you can easily do. Coming up here in the next the new year about finances write really important so one of you in the marriage or if you're single is you can do these things pretty easily. I hope you're taking notes. So we just got through talking about check up on your retirement accounts because there were some changes in one of our previous shows. We talked about those changes that are coming up. You can actually save more. So talk to your HR department. Make sure you're contributing up to the limit, that if that's possible for you, make sure you're getting all the match there. If you're not sure, then call us and we can help you out with that. And by the way, do you know what you're invested in your 401. K. A lot of people just said no. A lot of people just said, oh, it's the it's the 2050 or the 2055 or the 2060 fund. Well, if you're in that, you know, right away you're in a Target fund. Target funds have gotten beat up this year. Target funds are really gotten beat up. Very programmatic because. Why? Well, the stock market's down and bonds are down. Right. That may not necessarily be the best thing for you when you're younger. Hey, let caution fly the win. It's high risk. You could do it if you're not and you're in the red zone.

Merrit Strunk:
That's something you've got to take a look at. Please call us. We can walk you through each and every one of those investments in your 401. K. Know what you're invested in. Make sure you're getting all that free money and up your contribution, if you can, to the new limits. So update your savings goals. Determine how much you plan to set aside each month in your future. Warren Buffett said Don't save what is left after spending, but spend what is left after saving. Hmm. Another another wise quote there. I think we've covered that one before or just said that, you know what wealthy people do? They make sure they invest first and then they have the expenses afterwards. The rest of us do expenses first and invest what's left, right? Nope. They've got a plan, right? They they know with intention how they're going to grow their wealth. So number four here is make a plan to pay off debts. You may not have a clue on how to do that, because if you have multiple debts, it's kind of daunting. It could be overwhelming and you may have never done something like that. So we can easily help you figure that out. Which one to pay first? Which one to pay second? How much you need to do. How are you going to do that? So you could decide how much you pay towards any loans, debts, mortgages, accounts and so on.

Merrit Strunk:
Consider paying extra principal and your mortgage payment each month. You possibly you can say, I'm just going to pay one extra payment each year. If you do that, make sure it goes to principle. If you don't tell the mortgage company, they may apply it towards the interest. You would definitely want that to go to the principal. You got to write those words on the payment. So by doing so, you'll earn a risk free return on that money equal to your mortgage interest rate and cut down on the number of years it takes to pay off your mortgage. I believe that each extra payment that you make can take two years off your mortgage. We've done the calculation before on a mortgage, interest payoffs or a situation. I believe you every extra payment you make knocks off two years off your mortgage so you can quickly pay off that mortgage. And half the time, if you if you get that done. Okay. Number five, rebalance your portfolio. Wow. How important is that? The stock market always has its its ups and its downs. And some sectors overperform Right. Right now energy is performing. Praise the Lord. That's great Something's performing and some sectors underperform. Well, that would be everything that is tech pretty much of course it goes up and down right depending on the time. So 2022 has been pretty grim for most of the sectors. Right. And by rebalancing your portfolio to its original updated asset allocation, you take steps to lock in the gains.

Merrit Strunk:
The Thank you zone, take the thank you. This is profit from different sectors and then with the best returns and then purchase shares in sectors that have lagged behind. But now you're buying low and you're rebalancing your rebalancing your risk as well. Your original risk. People who don't do that rebalancing end up having more risk many times in the sector that overperformed. Right. So here's a tip. If you rebalance your portfolio with a broker. Broker. Right. Stock jockey. They are likely charging you 5.5% to do this. This is not an efficient strategy. Right. We recommend you work with someone who has your best interests in mind and looks to save you money, not to lose more of it. So these are commissions on trades and transactional costs and things like that. They can add up. No bueno, not in your best interests. Number six, pay down your credit cards. Durr right there. That was everybody's goal. Hey, I have this much and sometimes you have it and you're you're leaving it kind of rotating to build up some credit. I get that part. I get it. And that means you're in the situation where you could have, but you're choosing not to just to have this this history. Right. So we're talking about the big balance credit cards with high APRs, right? No one is ever become rich off airline miles and hotel points. So don't let that fool you. Make it a goal to pay off your balance each month if you can.

Merrit Strunk:
Debt is bad, Dave Ramsey tell you that, right? Don't buy it if you don't have the cash for it. Right. Also, a credit card should not be your emergency fund. I realize life. Sometimes that's the situation. You've got to put it on a credit card. I got it. But if you had a choice, you would not choose credit card to be your emergency fund. Be sure also to have 3 to 6 months of expenses set aside for unseen emergencies. Some people, folks literally have a second savings account that says emergency fund, and they keep that money in there. It's separate from their other savings account. Right. So most people in general I said some people do that. Most people say, oh, it's in the savings account. Easy way to separate. That is to say this is emergency fund 3 to 6 months. Why? Well, people in COVID can answer you on that is they lost their jobs. They couldn't go to work, and then they didn't have the backstop to say, all right, we're going to be okay. Right. One of our clients left to work because she didn't like the situation and she could because she had an emergency fund, says, I will not tolerate that and I am going over here and I don't have to rush out and take the wrong job. How wonderful psychological air is what we call that. Right. I'm not stressed about it.

Merrit Strunk:
I've made the right decision for us. And I have a backstop. A wonderful emergency fund in general is for emergencies. The. Air conditioner went out, the refrigerator went out, went out, got a car wreck. One of those things you also want to this is number seven, guys. If you're tracking, review your credit card report. Ah, your credit report. Sorry. So make sure you check that regularly. Take steps to repair any negative aspects that show up on that. There is not an excuse for not reviewing this important information because there are errors that happen. There's a ding on your credit and it can hurt you and you and people go, Well, why is that? There they go and pursue repairing that and get it off. Number eight, review your life insurance needs over and over and over again. We see people are under-insured. And in many cases it's easily fixed. So as you move through your career or your life, right, your life insurance and your disability insurance will need to continue to change. I know that sounds crazy, right? But if you're working off your 30 year old self term life insurance and you're now 50 years old and you still have that limited amount of life insurance, that's problematic depending on your situation. Right. So it may need to continue to change. So give some thought on how much protection you will need and consider your options. Pros and Cons to Other things. When we do our planning, we do two perfect storms.

Merrit Strunk:
What's the first perfect storm? You get promoted from the planet today. And then we take a look at what happens to Mama. And the kids. And the house and the expenses. Is that going to put your spouse in a terrible situation? Why would you let that happen? Why would you let that happen to them? Right. So the easiest first stop off the bus would be a term term life insurance. Biggest bang for the buck, really, really cheap. And you're just renting coverage. So there's pros and cons to that one. That may be the right thing for you, maybe the wrong thing for you. An ideal would be another option with incredible flexibility of its living benefits plus death benefit. Those are great. So if you're forties or fifties, these type of policies are one of the only ways to generate tax-free retirement income. If you've not listened to this show before and you just heard me say tax free retirement income. How often do you talk about tax-free retirement income? So if you don't know what I'm talking about and a lot of people don't when you mention ULS, there's pros and cons to that, too. Talk to us. Find out if it's right for you if you do not have long-term care, if your parents, grandparents, grandma, grandpa lived a long time, you probably ought to be asking these questions. So the bottom line here is get in touch with someone who can help you build and navigate your financial plan.

Merrit Strunk:
You're checking all those boxes I mentioned earlier in the show. So when it comes to something so important as your money and by the way, the Bible mentions money and possessions over 2000 times. More than prayer and love. Does that blow your mind? So clearly the creator knows that money is going to be important for you and you're going to need it as long as you're on the planet. So why not reach out to somebody who can help you with that? So it is important. Time and money is important. Do not wait. If you're 62 and you're retiring at 64, please immediately talk to somebody. Call us up. You know, or you and your spouse can have a one-on-one opportunity to ask us questions. It doesn't cost you anything. It's complimentary. So give your money the attention it deserves and needs in order to grow for your future and provide it in the right fashion. Things have changed. If you're not using evolved financial planning and vehicles, then you're missing out on the bus. If you've got a passive programmatic 6040 portfolio out there, then you have felt the pain, haven't you? It's time to ask questions. So that's all complimentary for you. Think. Think of it this. We'd like to think of that meeting that that complimentary consultation that lasts about an hour doesn't cost you anything. Is that even though it's a simple conversation, it's relaxed.

Merrit Strunk:
That conversation is like a cause set in motion. It could change your financial future, your family's financial future, and perhaps even generations after that. So we love that. We love it when we see somebody that when we go through and say, well, if you keep doing what you're doing, you're not going to end up in the right place. And here's why. Boom, boom, boom, boom, boom. Oh. But here is how easy we can change that. We can change it by doing this. This isn't this. Oh, my gosh. And you should see that picture illustrated how much better that is with as much mathematical support as you can get to it. And it then becomes that conversation that changed your entire life. You spent one hour and it had changed your entire financial future. You know, obviously there's there's things that can happen in life, but we want to try to mitigate those and we'll discover how much you're paying. And fees will cut unnecessary costs, eliminate unnecessary risk. Talk about your 401. K, your IRA, and your plans for the future and goals. We can even help you with Social Security, budgeting, debt reduction, etc.. So that brings us to what retirees fear the most. Well, running out of money is a big one. More so than death, right? I'd prefer to die rather than run out of money and be a ward of the state. So how could this happen to hardworking Americans? Well, Social Security cutbacks. So in the 1940, there were 40 workers per retiree.

Merrit Strunk:
Today, there are only three workers per retiree. The ratio is expected to become a 2 to 1 by the year 2050. So lesson to the system. So what will potentially. Government do? Well, they go in there and decrease the richness of the Social Security program. Maybe they'll push back retirement dates. Maybe they'll eliminate the 8% delay retirement credits. You know, who knows, maybe they could do any of those things. How about tax increases? A lot of people in retirement think they're going to have the lowest tax base they're ever going to have in retirement because they're not making W-2. Well, wait a second. What if the taxes go up? Right. So historically, tax rates are lower than they used to be right now. Their taxes are on sell with increasing national debt and government spending. Many experts believe that taxes will have to go up right in order to meet the nation's budget requirements. So series one Medicare is another, right? Next is inflation. Well, the cost of living adjustments reflect a 14.6% inflation over the last two years, and some experts believe true inflation has been much higher. I happen to be one of those who think that because they keep changing the calculation over time. So whatever they tell you, the inflation is, it's probably worse, according to an old calculation. Number four here, portfolio balances going down too quickly. Yes. If you're in drawdown, your balance is going down because of the stock.

Merrit Strunk:
The stock market's down and you're in withdrawal. That means you're withdrawing of a smaller bucket. The bucket is getting smaller. This is the negative sequence of returns risk that people in retirement have. What if that happens? Stock market is down two or three years in a row. You're drawing down your money for income and taxes go up. That's not a fun party I want to be in. Right? So preservation of assets is key in order to fund a long-term retirement, Are you exposed to large losses due to market volatility? There are ways around that with proper planning and evolved planning that most people really just don't have a clue of because they're not asking the questions. Market crashes. Well, we're living in one, right? I wouldn't call it a crash and more like a correction. So you may want to consider reducing the risk you're taking with your current portfolio. It depends on you and who you are and your risk tolerance and your all of your assets and your time horizon. Right. So all these things are important here, but why take unnecessary risk? Could you achieve your goals with less risk? Well, for a lot of people, the answer is yes, but they don't know it because they're not asking. Maybe it's pride. Maybe it's perfectionism. Who knows? Did you know that from 2000 to 2002, the market say S&P saw three straight years of declines. That was -9.1 in 2000, -11.9 in 2000, one in 2002 was -22.1%.

Merrit Strunk:
In 2008, it was -37. That's the Great Recession right there, folks. And 2018 down 4.4% and in 2022, 16.9% year to date. Right. That could have changed even today. Right. Health care expenses for a lot of people who are retired. Health care expenses are going to be huge over their lifetime. So between prescriptions, common procedures, potential long term care expenses, a couple of retiring at 2022 may need to spend upwards of 315,000 on health care during their retirement years. Where's the money going to come from and can your current situation provide for that? That's why we talk about asset dedication. What bucket's going to pay for that? No, the purpose of your money. Having to care for a loved one. That's a huge one, folks. And we're going to have a show that's just specifically dedicated to that related to those things. So retirees who have to care for a dependent or a parent like parent or a child will have to deal with additional monthly expenses to look forward after their family. If you're in the sandwich generation where you have elderly parents and you're trying to care for them and they don't have provisions to do that, you know the pain. And it takes people who have seen this up front, Alzheimer's, dementia, some other sort of decline that they need to care for. And maybe they're remote. Maybe you maybe you as the children, live in another other state. That's very real. I see it up close.

Producer:
Here's the cost cutter of the week.

Merrit Strunk:
The happiest people who meet with us or people during their annual revers are the ones who have paid off their home. It does something. It gives you psychological comfort, Right? We no longer have that expense. Now we have more money, right? So if you have to pay if you have to pay a monthly mortgage during your retirement, it can be absorbed entirely of one of the two Social Security incomes that you've got if you're a married couple or take up almost the entire single person's monthly Social Security benefit, it goes towards paying off the mortgage a place to live. The biggest expense you're probably going to have. So we strongly encourage all of our prospects and clients to consider looking at exploring how they might pay off their mortgages in a smart way. That said, try to pay off a family home with your IRA money. Ouch. Right. It's going to be an ouch because it's a double whammy because you get you will owe taxes on the money you withdraw to pay off that house. Right. You'll you'll pay income tax rate on that. So remember, you wouldn't pay off 20% of your real estate commission. So you don't want to have to pay 20% or plus in taxes when you pay off the mortgage for your family's primary residence either.

Merrit Strunk:
So again, we encourage clients to use their money in their investment accounts, withdraw cash value from their life insurance plans or savings accounts. So you can also consider selling. Are you one of those people that have collectible art, an extra vehicle or a separate piece of real estate to raise funds necessary to pay off the family home? Those are choices, right? People who have choices. The tax burden on the sale of these typical investments is minimal or zero. Housing is is one of the biggest costs retirees face. So eliminating that mortgage removes a sizable monthly bill from your retirement expenses. So you'll still need to pay some taxes and maintenance costs on your home. But got it. Like property tax. But that should significantly less than your outlay, right. And your mortgage payments. So we do a little bit more time here. Bonds are going to hit it ever so quickly. And then we're going to wrap up here. So consider a bond replacement. Although some things are perking up here with the short term yields. There are benefits to bond alternatives. You can get 100% principal protection, meaning you can never do worse than zero, which is great.

Merrit Strunk:
Market like gains without market risk. Wow. Participate in the gains of the index and income you can never outlive. On top of that, if that's what we want to do. If it's right for you, no fees, liquidity if you need it. So people who are often concerned about tying up their money, you know, they want liquidity. It's built in these days. You can grow your money tax deferred. Right. And some have bonuses and benefits to it. So there are things like that. If you do not know what that is as a bond alternative, give us a call. Give us a call at 858 521 9100 or go to RetirementUnbroken.com and press a button for your complimentary consultation. Hey this has been Merrit Strunk. I might be the only Merrit that you ever talk to you. I am president at Momentum Financial and we love helping people. I talk to every single person that responds. It's an easy conversation. I encourage you to get equipped, find out the answers to your questions, and we'll join you next time for Retirement Unbroken Show. Have a great one.

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 complimentary no-obligation consultation with merit, visit RetirementUnbroken.com or pick up the phone and call 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 Strunk an independent agent. California License number 07510. Certified Financial Fiduciary as a FINRA recognized Professional Certification.

Producer:
As the song says, it's the most wonderful time of the year.

Producer:
But don't let holiday spending wreck your retirement plan. I'm Matt McClure with the Retirement dot Radio Network. Powered by AmeriLife just over $832. That's how much the National Retail Federation says the average American plans to spend on holiday gifts, food and decorations this year. Many of us will spend much more than that. So how do you keep from overdoing it? Financial website Investopedia has some tips on keeping holiday spending under control. Number one is perhaps the most important set spending limits for yourself. Tyler Ferguson with Jax Federal Credit Union agrees.

Tyler Ferguson:
Some can even go old school like myself and use a cash spending plan to ensure that you're staying inside of your budget. You're actually using cash to mitigate those swiping of the cards. It's also an effective plan if you have kids wanting to shop as well.

Producer:
That from Jax. The number two tip from Investopedia is to make your own naughty or nice list. In other words, if you're shopping list includes more than five people outside your immediate family. Start cutting it. Then bake cookies or other treats to give to those who didn't make the cut. That way you spread holiday cheer without breaking the budget and you don't seem like Scrooge.

Producer:
Other bits of advice from Investopedia include being realistic about your budget. Collecting coupons or discount codes and organizing group volunteering instead of holiday parties. Ferguson says one thing you should not overlook is getting the kids involved.

Tyler Ferguson:
For the younger kids, you want to give them a smaller dollar amount, maybe a $10 cash transaction to kind of help provide them a visual observation of what they're using the funds for. And then for your older kids who have either been saving themselves already or they have a lump sum to kind of go shopping with can open up an account for them. Go over how to budget and how to spend.

Producer:
So how can you give this holiday season without busting your budget? That's a key question to consider. As Santa starts warming up the sleigh with a Retirement dot Radio Network powered by Amerilife. I'm Matt McClure.

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