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2.17.23: 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:
All right. Welcome to the Retirement Unbroken Show and podcast. This is Merrit Strunk, lead advisor for Momentum Financial here in San Diego. And, um, you know, I am joined today by our senior producer, Matt McClure, ever trusty Matt McClure. How are you doing, buddy? I am doing very well. Merrit Thank you. I am glad to be joining you as always. Right on, brother. Great to have you here. I just want to say a thank you to our listeners who are among the great Retirement Unbroken Nation here. You've got plenty of other options to spend your time and what you listen to. And you instead of easy listening music or or hard rock, you are right here to educate yourself and be better at, you know, getting more savvy about your financial well-being. So thanks for coming here. And today we've got a lot of meat and potatoes on the plate for you. You're going to enjoy it. Got a lot of good stuff for you. So if you've never been to our website, please, you know, give it a give it a visit It's RetirementUnbroken.com. Or you could just give us a call at 858 521 9700 and we'd be happy to take your questions and address those questions on the air because a lot of people have questions, especially during this time in the market of uncertainty.

Merrit Strunk:
A lot of stuff going on Today on the show, we're going to be talking about a smart lifestyle, living within your means and enjoying your retirement. Smart adjustments. How can you stay on track year after year and your retirement? Sometimes it makes sense to step back, readjust. And this is what we call smart inflation. We're going to talk about inflation a little bit more, give you a nice demonstration of what's going on with that and how to understand it. And then can you beat the rates at the at the bank or the credit union on CDs these days? I mean, they're pretty good. They've gotten better given the Fed's rate increases. So can you beat those? And what's a safer, safer type of investment? Smart legacy. Look, you've got kids, you've got heirs. You want to make sure you're doing right by them and you're planning. So we're going to talk about Smart legacy. And then 1010 tips for a Happy retirement. But first, Matt, would you please bless us with the financial wisdom quote of the Week?

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

Producer:
I will definitely do that.

Producer:
I will try to be a blessing as we give our quote of the week here this time around. It comes from Dave Ramsey, who you might have heard of, and this quote is Financial peace isn't the acquisition of stuff. It's learning to live on less than you make so you can give money back and have money to invest. You can't win until you do.

Merrit Strunk:
This mean Dave delivered it there? I'm a big fan of Dave Ramsey, for sure. The first words of that quote was financial peace. In fact, I've I've taught the Financial Peace University twice before to folks, and it's a great course to get control of your finances and think through it and get out of debt. Who wants that, right? It's true. Don't store up your treasure here on planet Earth. You know, it's not about the acquisition of stuff. And we tend to get all, you know, crazy about that. We forget we make stuff and money are idle. That is not what it's about. So if you can learn to live within your means, put money to work. That's what we're talking about, systematic wealth growth. And I'll tell you, I'll tell you right here, you know, I said, you know, store up your treasure in heaven, not on the planet. Planet. The Bible says and mentions money and belonging over 2000 times. Did you know that over 2000 times more than prayer or love? And what to make of this? I would say that your creator knows that money is going to be important for your time here on planet Earth. So we may live a long time, longer than we think think that we're going to do. And it's probably going to take more money than we think. So we've got to be good stewards of our blessings, the money, right, that we're blessed with, be good stewards of it.

Merrit Strunk:
And you notice that Dave in his quote said, So you can give money back and big and there and have money to invest and you can't win until you do this. There's a little bit of a magic thing that people don't get and I completely understand it. Do you know that if you're blessed with money, it's an obligation to give back? To bless those that are needy and the least of these. Right. To give back. And when you do give back. He says, Test me on this. Your cup will runneth over. Right. Fantastic. Let's all test that. Let's go out there and help somebody give money back if you've got blessings and to see how you can also bless others, right? Isn't that what it's about? If you've got if you've got enough and you've been blessed and you can give some bless others. Okay. I want to let you know that we are more than happy to talk to folks who call us from the show, Reach out. I personally have committed that. I will talk to everyone that reaches out from the radio show at the Retirement and Broken show and podcast. You reach out, we can answer questions, we can talk to you. And we're also offering two things.

Producer:
One is this is no obligation and no cost to you. And this is such a value. And the way to think about it is the Retirement Unbroken custom report. And in that are sub reports maximizing Social Security taxation over your lifetime and income plan in retirement. Those are some major, major things there, including expense plans and things like that. But those are like the critical, essential type of reports that you need to get the critical information so that you end up unlocking what your financial future is. That's free, folks. Why wouldn't you get that? And that's going to create clarity for you, right? No cost for that. The other one is the top ten cost cutters report. So in retirement, if you can cut some costs, what are some good ideas? And you may know these intuitively. You may. Oh, I know I may. Yeah I got those a totally get it. But isn't it nice to have a reminder so just you know email us reach out to the website retirement unbroken.com and say I want those things how do I get them And we'll be happy to lead you to a place so you can get those. Okay. So stress for retirement lifestyle that you deserve. What is a smart lifestyle in retirement? Our goal is to help you get there and the retirement that you've worked so hard for, right? Well, here we are.

Merrit Strunk:
Work, work, work, work, work, work. The accumulation time of our lives. They call it work for a purpose. For a reason is it's work. So we can get together, have a conversation about you, what you want in retirement. What do you want retirement to look like, and build a smart plan to fund it. I think that's an interesting take on it. When you realize if you've got plans and goals and things that you want to do in your life, where's the money coming from? Did you think it through? How will you specifically fund that specific amount that goes to a specific need in your life and kind of during different times of your life? Remember, in the go go years of your retirement, I said go, go, years of your retirement, What's the go go years of your retirement? Well, when you first retire, it's kind of an adjustment. And you'd say, well, what if our what if our plans? Honey, what are our plans, sweetie? Where are we going to go? What are we going to do? Things we're going to participate in? And those are go, go. You can go and fly and travel and do get an RV, travel to country, hop on a plane, go to Tuscany. Ooh, yeah, I like that. Go to Tuscany. Oh, Trip to the Holy Land.

Merrit Strunk:
Go to Israel. Walk on those streets on my bucket list, man, for sure. So those are the go go years and visiting grandkids. If you're not that ambitious, you know, visiting grandkids, blessing them with your time and memories as well as financially. So you'll travel more and those go go years, right when you retire. And so expenses will be higher. Where's that money coming from? Then you go into, say, your 80s, you go into the slow go years, right? Slow go. We can still get there, but it might take us a bit of time and we might be a bit uncomfortable while we're traveling to get there. Right? We're doing the wheels are kind of shaky. The hips, you know, may need a little help. And then, folks, you get into the no go years. Okay, Go, go slow. Go. No, go, no go. You're home, right? You're home. And it's a bit more difficult to to move around potentially. And, you know, you might need some help. And those are we call that the retirement smile, by the way, in terms of expenses, smile up high on one side, the expenses go down in the middle of that retirement. And as you get older, medical expenses may go up. So there is the other side of that smile. So the retirement smile expense picture look. So if you if you want to travel abroad and do those things with retirement, you want to make sure you have a plan that considers those goals.

Merrit Strunk:
Hey, maybe you want to go to music concerts frequently, something like that. So you don't want to outlive what during that whole picture that I just laid out, you don't want to outlive your retirement funds. You're not working anymore. Some of you may. Some of you may have to, unfortunately. But it'd be better to have a choice. I call that a work optional lifestyle because I have income, because I have assets, because I've done the plan that I don't have to work. But I may choose to because I want to, not because I have to. Right? So I work optional lifestyle in retirement. So if you don't want to live, outlive your retirement funds, you know, you need to put those plans in place. The happiest people in retirement are those who are living within their means and have income they can count on. That makes sense, doesn't it, Matt, that, hey, if you're in retirement and you had money coming into the bank account, just like when you were working, do you think that. Matt you'd be mentally much better off and happy and stress less stressed in your life if you knew those checks were just going to keep coming?

Producer:
Oh, yeah. I mean, you know, talk about a weight off your shoulders knowing that you had that and it was, you know, something that you couldn't outlive having that income. Oh, my gosh. I would just be oh, I'd be, you know, sipping a mai tai on the beach as much as I could at that point, just sitting back and saying, hey, this is my retirement, that you can tell what I want to do in retirement now. Right.

Merrit Strunk:
Right. Because is there some servce and some corn chips nearby? And so, yeah, think about this, folks, that if you mentally picture that on the left hand side of this, you know, blank piece of paper, you had the, you know, the little smiley face, except the face is not a smile. It's just a straight line with a question mark on it, which says, you know, I'm unsure that I'll have a. Enough money for the rest of my life or income that I can outlive. And I'll be able to do what I want with options and choices and quality I'm unsure of. That little question mark on that, that little face over there. Then draw a straight line over to the right. And you see that smiley face actually does have a smile on it with an exclamation mark. And that is the difference between I'm not sure and I don't know if I have the plan or if my plan is good enough and that I've considered all my options all the way over to I know I have a plan. I know I've got income. I know I'm going to have assets. I can, you know, they're going to be there in the future. I know how. If I need help or one of us needs help, that's going to all happen. And that's the smiley face. That's confidence. And what's absent from that? The stress.

Producer:
The stress and the worry. Oh, my goodness. And the, you know, compromises that you have to go into. I can't go there. I can't do that. I can't have that yuck. All that is no bueno. Right. So we can help you navigate things like Social Security. What's the best way to take that Social Security between you and your spouse? Pensions from your employer? What's the best way to elect that? You know, there's there's various options that exist when and how or what about creating your own pension? If you didn't work for a pension company or the state or the Fed or the military or the police or the firemen or teachers union, you don't have those pensions. How do you as a citizen, you know, private sector, create that own your own pension for yourself and that any other retirement you have, Take a look at that and understand it. You know, it's hard when you don't do this every day. And then to make sense of it, we can make it very easy and make that picture come together. Whole cloth. So we did say we were going to talk about smart adjustments. Smart adjustments are something you should have a portfolio and your retirement plan reviewed. You know, I've referred to it as a smart inspection, right. Reviewed to ensure you're on track to meet your goals and not outlive your money.

Producer:
It should happen every year. You should you should have that conversation every year, check the tires, kick it around, take a look under the hood. Is this is this car still running, you know, or it's still running? Do we need to tune it up? That's a great metaphor. Let's tune up that retirement car. All right. If you haven't heard from your advisor lately, folks, or they're telling you to, what's that quote? Just hang in there, right. Despite negative returns, then you owe it to yourself to sit down with us and see what your plan might be missing. We provide these kinds of reviews at no cost to our listeners of show and podcast. Just reach out to us at the RetirementUnbroken.com website or call us at 858 521 9700. So reviewing those assets regularly you know here you know financial advisors big assets you know sorry money investments your IRA your 401. K your Roth, your pension reviewing these things on a regular basis because portfolios in and concentrations of assets and money can drift one way or another. What what I mean by is if you've got something that's a growth allocation, say, you know, S&P 500 or Russell Index type of things, then they may have grown others faster and larger than some other buckets of your money, but that puts you out of risk. So you need to relook at that and rebalance to your desired level of diversification.

Producer:
I said diversification. That means not just one or 2 or 3 and your risk exposure. Risk to what? Market loss, Right. Additionally, rebalancing can help manage your emotions, which, you know, it's a muddy. People tend to be very, very emotional about it and also your your investment decisions. So that requires some some periodic buying of assets that have decreased in value and then selling assets that may have increased in value. Okay. There's also great ways to do it. I'm going to give you a little peek behind the curtain. Most average investors who have 401. K IRAs and so on. Most folks are familiar with the old index funds. You know, do the Vanguard Fidelity index funds, low cost, and they're not managed. So they go up and down. Boy, did people learn that lesson. And I would say that that along with, say, a target allocation strategy where there's quarterly rebalancing in there was also those two. I'm going to say that's quite typical of the average Joe. They might have these index funds, they might have in a 401. K, they may have an ACORN account. They may have speculated on a few individual stocks and gotten stung. Very common. Okay. Here's a couple of strategies and more than a couple that I just want to put out there. Not with any great definition or things, but the kinds of things you may not be aware of because you're just operating in that stereotypical mode.

Merrit Strunk:
How about tax free income strategies? Take a look at that 1099 form. You just got that 1099 form that is reporting upon your interest and dividends realized gains for long term capital gains taxation. And take a look at that. You've got money in there. If you've got ordinary dividends, interest or capital gains, you're paying taxes on those. If you're in retirement and you're using those your your assets for income and you've got taxation on these, but you're unaware of tax free income strategies, then you probably need to call us. You probably need to do that. Okay. Tax efficiency strategy. How about offsetting your taxes with a tax efficiency strategy in your portfolio that provides you more return because you're getting what's called a tax alpha because of the way we handle the taxes in their tax, daily tax harvesting, tax loss, harvesting, daily tax loss harvesting. Do you have that in your account? Go ahead. The most of you just said no. Okay. Or the other one said, I don't know. Now, it'd be really cool if you said, Yes, I have that and I know exactly what it is. Then bingo. Good job you've had the conversation that we're talking about. How about Bull Bear Strategies? You know what a bear market is.

Merrit Strunk:
That's the one that goes up, right? That's the one. If you were investing after 2009 until 2020, you thought money just always grew. Hey, money always goes up. Nope. You're learning that now. Then there's bear strategies. Can you have an investment portfolio strategy that adjusts to bull markets and bear markets to grow wealth and also protect wealth when those times are coming? Can it go to cash if it needs to? If something catastrophic, a fatal fluctuation in the market happens? Most of you just said no. All right. How about another one? You're unaware of Buywrite strategies. Buywrite strategies are where an investor buys a security and usually a stock and then has available with options on it and then simultaneously puts a call option on that security. And the purpose is that you can make money with this strategy even when the market goes down. Let me just set that on your cranium for a little bit. Can you say with that strategy, I can make money even when the market goes down? You can on a buy write strategy. How about alternative investment strategies, multi-asset strategies, thematic portfolios where we would target primarily things like biotech, real estate, cybersecurity, digital currency and more, depending on what those themes are that we pick out and that you have an interest in if it's appropriate for you tactically managed portfolios. Boy, I've hit that over the head so many times.

Merrit Strunk:
Talked about that. What does that mean every day adjusting your portfolio to what's happening in the market in the world. And if something bad happens according to your risk exposure that goes into wealth protection? Do you need to have all your money there? No, we wouldn't do that. But more likely in a risk tiered portfolio strategy that is custom to you and your goals, we would have a portion of that in there as appropriate. And we call that break in the car metaphor. That's break. Okay. Custom indexing, custom indexing portfolios. This is where investors can directly own a custom mix of individual stocks and bonds rather than a you know, rather than indirectly owning those positions through a collection of funds and ETFs. Pretty cool. That is a real nice innovation recently. And then if you're accredited or a qualified client where you're a high net worth individual, I don't even want to go into all those strategies because it for most people you cannot you cannot make access that. However, some people could, um, you know, tax free income, you can have depreciation through real assets. You can invest in oil wells, working shadows of oil wells you can own and invest in 1031 exchange right into self storage. I mean, the list goes on and on. Private credit, you know, via articles, you know, life settlements.

Producer:
I mean, the list goes on and on. You just don't see these. You have to be an accredited or qualified investor to do that. So those are some of the things I'm giving you a peek behind the curtain that if you're an average Joe, then you're not seeing these things. If if you'd like to and see if they are applicable to you. There's pros and cons to all those things. Remember, everything has to be in your best interest, every recommendation and every plan. Then go ahead and reach out to us and we'd be happy to have that conversation. Um, wanted to expose our listeners to those kind of things. We talk about a lot of stuff in terms of education. This is a peek behind the curtain on all kinds of strategies they never see or never hear about because you're not either asking the question or your advisor is not really talking to you about them. Okay. Maybe some are, maybe some aren't. Okay. We're going to take a break here. I want to encourage you to go ahead and reach out, get those reports. I talked about the essential critical information you need to make sure you're going to be okay, no cost or obligation. Just go to retirement. Unbroken.com or call us at 858521 9700. Hey, we'll see you right back here after the break. This is Merrit Strunk on the Retirement Unbroken Nation.

Producer:
With soaring inflation 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 AmeriLife. There is no question costs have been soaring.

Sharon Epperson:
About one third, 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, but.

Producer:
It 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.

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

Producer:
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 and 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 mirror life, I'm Matt McClure to get your free copy of the 23 Retirement cost Cutters for 2023, contact Merrit at retirement unbroken.com or call 805 8521 9700.

Producer:
Missed part of today's show Retirement Unbroken is available wherever you listen to podcasts and online at retirement. Unbroken.com.

Merrit Strunk:
All right. Welcome back to the Retirement Unbroken radio show and podcast. This is Merrit Strunk. And if you were tuned in and listening to us, we talked about some alternative strategies here, how to do safe review and smart adjustment along the way. And you should be revisiting your financial plan, at least, you know, annually to take a look at things and how they've changed, maybe rebalance, reassess things. Now we know, you know, I call this, you know, if you're a member of this show and you listen to us on a regular basis, you are part of the Retirement Unbroken Nation. Right. However, we're now talking about the inflation nation.

Producer:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

Producer:
And one that hits everybody is egg prices. I say mostly everybody. You could be a strict vegan and not eat eggs, right? So egg prices are impacting other food prices. So eggs are frequently a component of other food, right? Just think about eggs and cake, right? Mix an egg in there. Okay. According to an article on CNBC about high egg prices, consumers are paying record prices for eggs. But beyond the inflated sticker for a dozen eggs and you may have gone shopping and found there aren't any is pretty common now. There's also some hidden expense in the soaring cost, and those are elevated egg prices and they're trickling into food items across the grocery store, namely, anything that has an egg as a type of ingredient that might be mayonnaise, you know, mayonnaise, a condiment, right. That that goes into, you know, or baked goods or a salad dressings. So there's a long list of foods that have an egg in it. Egg noodles. Certain kinds of breads, custards, puddings, bread, breaded or battered meat or chicken vegetables. If they're, you know, used in a kind of a mix, um, marshmallows and some soup broths. So eggs are inflating the cost of dining out at restaurants as well. You probably felt that if they're using eggs as any sort of ingredient. So, you know, year over year, you know, even eating at home and 2022, the prices of kitchen staples like eggs eggs have gone up 59%. Actually 59.9. So that's 60% is 60% from that CNBC article, a 60% increase in eggs. Oh, my goodness. That's probably why there was a rise corresponding in the sales of egg laying hens. You know, the hens have gone up. You know, honey, it's a good idea to have hens. What are you talking about? Yeah, Little Johnny and little Susie are going to go out there and get the eggs every morning, Right?

Producer:
Need a higher rate of return from your safe money? Listen up. It's time to beat the bank CD rates.

Producer:
One of the, I guess a side effects of the Fed's lending rate hike is now you're you're getting some decent fixed rate interest on things through the banks and credit unions. However so that raises the question, can you beat it? So if I'm going to get three and a half, you know, floating rate return, floating rate means it could change depending on the rates from the bank on a one year CD or something like that, then can I beat it? And one of the things to look at is what's called a MIGA or an MIGA. And this is an insurance contract. It's a multi year guaranteed annuity. It functions much like a CD where there are guarantees and you have a certain declared rate. It is a contract and then you get the compound compound interest rate over the matter of years that you have. So as those rates continue to rise and so do the bank CDs, but we encourage you to look at this alternative as an option if you're interested in protecting and growing your safe money, right? So money on the side. We have money in my savings account. Can we get something better? Can it be guaranteed? So yeah, CDs are pretty good, but many omegas are actually more favorable. Well, this can be particularly beneficial if you're looking for higher returns without too much risk. You know, like I said, very CD like and micas allow for tax deferred growth. So the money's in there and you're not taxed on it until you actually, you know, take it out and spend that on the profit so stays in there.

Producer:
Crock-pots it's compound interest and the earnings and gains the earnings and gains from investing in Omega are not subject to taxes again until you take it out. This allows for greater potential return. So. Okay. Is that an option for you? Do I go to a, you know, the credit union or do I do I go to the bank and do I put my money on the side? The problem is with CDs, many times you can't access it. It's illiquid. Many times in this mega contract, after the first year, you can take a withdrawal, but it's nice. Some do, some don't. You know, it just depends what's right for you. So it's interesting to observe with this that most bank CDs have a financial reserve requirement of somewhere between 3 and 10%. Well, micas have a reserve requirement of 100%. That means when one is sold, there's 100% reserve that needs to be put aside for that. But not so in banks. See, that's not what people understand at all. They think that keep on hearing this FDIC thing right in their heads. Would you feel safer knowing that there's a 100% principal backed up by reserves and by law versus only a 3 to 10% backed up bank CD? Yeah, and you may. It's not a problem. Right? And maybe not a problem for you and some people.

Producer:
I'd prefer to have that 100% withdrawal. So is a manga a good, safe investment as an alternative to a standard CD where you've got illiquidity and the reserves are not as strong? That's for you to decide. Okay, that's just a question. So and we talked about kind of the smart investment, smart adjustments. And that brings us to smart legacy. There are many people that we work with are legacy minded for their children and they're concerned about how to do this right. And there's all kinds of options here. Planning for the end of life can often be difficult to discuss. You may have older parents and you're listening to the show right now and go, I don't know how to even go into that conversation. And that might be because mom and dads or grandma or Grandpa's perspective on things like, That's my stuff. And you pay attention to your stuff, paddle your canoe, tend to your own garden. As my third grade teacher would say, and I'll I'll tend to my own garden. Right? So. Uh, it can be depending on your family construct. So if the family doesn't want to think about, you know, life without you and may may choose not to make the plan, it can be really hard to have that conversation. The reality is that making a plan for the end of your life and what happens afterwards actually protects your family. It keeps them from going. Difficulties with siblings and other errors.

Producer:
It can difficulty with the courts and probate where probate court can actually decrease your your legacy because it goes in front of a judge and there's a lawyer and he wants, you know, a certain percentage of the total assets in some places. That includes your your real estate. How would you like little Johnny or Little Debbie to to miss out on, you know, $100,000 because we didn't do it efficiently When they a little extra planning they could have had it, you know or much less in taxes. So to ensure that your assets are passed on to your loved ones in a tax efficient manner, manner is a gift of love. You can do that by setting up trusts and wills. Retirees can avoid hefty taxes associated with distributing assets after death. Ensure that your assets are distributed according to your wishes. You know, this goes here or that goes there. This is who that gets that and so on. This eliminates the possibility of, like I said, how'd you like to disrupt the relationship between a brother and a sister or a brother and a brother and a sister and sister? It does happen. And we see it for people who do not complete their their planning, um, because they feel like they've been done wrong. Oh, they said I get that. I should get that. You got that? Put that down. Get it in a will. Get it in a trust. Avoid taxes that don't need to be there.

Producer:
So providing that kind of level of thinking for your loved ones and the event of your death is, again, it's a gift. You can provide peace of mind knowing that your family will be taken care of even after you're gone. So you may be confused. Wills versus trusts. By the way, if you've got minors and you don't have a will. Wills determine guardianship, and that is a reason to get one, even a simple one. You can get it offline, right? You get it online, on the Internet. Okay. So trust will bypass probate, right? They'll bypass probate. The trust is an entity and the entity didn't die. And it continues to hold those assets in the name. You need to make sure you title your assets in the name of the trust. That is a huge mistake having a trust and it just sits there in a big old stack of paper doesn't really do anything. You need to title, you know, savings account mortgage or, you know, the deed to the house, your investment accounts, things like that. And if they're, you know, individual retirement accounts that cannot be owned by a trust, but you'll need to put the beneficiary as the trust that can work. You could do that. So so have a will. Don't leave your legacy in the hands of the courts or a judge or the state. Make sure your last will is clear so your family doesn't have to bear any additional burdens as you pass away and get promoted off the planet.

Producer:
Praise Lord. Right. Or have a Roth IRA. That's also a nice thing. So funds within a Roth IRA will pass to your heirs tax free. And any growth inside that Roth is tax free as well forever. So don't let your family inherit a tax bomb. Tax bombs like this, you may have $1 million IRA and you go, Oh, little Johnny and Little Debbie. I'm going to pass along that IRA. They're going to be great. Actually, every time they touch it, they're going to have to pay income tax on their tax rate. So it's not what you were planning, not what you thought, actually, much less way over time, especially if their tax rate goes up. If you have a traditional IRA, you may want to look at a Roth conversion. You know, take a look at a Roth conversion analysis and see if it's great for you. You may be in that position where you can move from the left pocket, taxed Forever IRA into the right pocket, which is tax free forever. That's a much better loving gift to your errors. Sometimes for generations. That you can do. Uh, Ross, you have tax free withdrawals. There's no age limit for contributions, right? Unlike the traditional IRA, right? No minimum distributions that RMD required minimum distributions. You don't have that on your Roth. You've got compound growth. So you can grow tax free flexibility. You know, you can withdraw your contributions from a Roth any time after 59.5 without any penalty or tax.

Producer:
If you do it before 59.5, there's a rule that says this is a retirement account. You make an early withdrawal, you're going to get a 10% penalty. So there's that rule. They're both on a traditional and a Roth, but after 59.5 tax free. So I guess the question again is, is a Roth conversion in your best interest? Can that happen? And it's a bit of a calculation. We'd be happy to help you with that. Okay. So speaking of that, you know, for our listeners that reach out to us there, there is a full retirement plan, consultation at no cost to you. So if you've got all those questions, we'll help you with things like social. Social Security and Medicare. We'll examine. If you have an annuity, we'll examine that 401. K rate of return fees you're paying. And if it's appropriate for your risk tolerance as you go through these different stages of life, where's the money coming from for your go go years and your slow go years? And when you know, go and you've got medical expenses. So those are some of the things that, you know, are important. Right? You heard me talk about the potential for annual rebalancing. You heard me talk about the other potential strategies that exist out there, like tax free income. Tax free income. Do you think taxes are going up, folks? I'm just wondering.

Producer:
I wish we had like a like a text poll right now. We have the technology to do that. We can just text you like please respond to one, two, three. You know, and write the word inflation. Then it comes back to you say either 1 or 2. One, No. Two. Yes. And you know the results are going to pour back in. Consensus is time and time and time again whenever we are. Asking that question. The answer is, yeah, taxes are going to go up. Just look at the news coverage of Social Security. Um, you know, you've got President Biden. First thing he does, he's. He's kind of planting the seeds for his, uh, you know, election. This next election, by the way, I'm not in favor of an 80 year old president out there. I think this is the hardest job in the on the planet. And you need somebody who is somebody who's mentally capable of doing that. It doesn't matter what party. Just get somebody who's mentally capable of handling the stress and the ability to recall things at a split second. I mean, I, I want I want that person female or male doesn't matter. Party doesn't matter. Just somebody who's mentally competent. It's a tough job. Do you ever see those pictures, Matt, where you see the president at the beginning of their term? And if they serve two terms, especially, then you'll look at them again and it's very consistent. President The President they have aged. Oh, yes.

Producer:
It's so true. I remember looking at that with like and you don't necessarily realize it in real time, but you look at like say in in 2000, 2001 with Bill Clinton and then you were to look back, you know, eight years earlier and how much younger he looked. Same thing with George W Bush. Remember that? Like it was yesterday. You look at like 2008 and 2009 and look at how much younger. I mean, he was a baby when he was first inaugurated. And the same way even Obama like like the gray hair. I'm telling you, it'll do a number on you.

Producer:
He's aging well, but the gray hair and like the thousand yard stare. Right. I'm kind of joking about this. Like, you know, I've seen things, man. You know, it's true, though. I know things. I've seen things. Um, so the point being, you know, the first thing that, you know, the president is talking about is Social Security. And of course, he wants to talk about Social Security and Medicare because you have so many people in the United States who are dependent on those things for medical care and the cost of that, it's a big deal. And the Social Security, that's where your money is coming from as a hopefully, you know, it's covering only 30% of your expenses in retirement somewhere around that 37 to 30. And any every president knows this, every politician knows this. Just start talking how the other person or the other party is going to cut this thing. The fact of the matter is, politicians do kick the can down the road because nobody wants to talk about it. And then you end up with this, you know, $31 trillion deficit. There needs to be responsible people out there and know that certain things are going to have to adjust. And in order to do that, taxes will have to go up. Doesn't matter who you are sitting in there. And I know that the State of the Union the other day the president talked about, you know, the taxes on billionaires.

Producer:
And the interesting thing about that, folks think of think of it as if in your own situation what he was talking about taxing and billionaires is unrealized profit. So if Elon Musk has profit that he hasn't realized yet by, let's say, his stock holdings and assets are up. Then what he was talking about is taxing them on that unrealized growth. Therefore, Ellen's got to pay. Let's just say a bajillion dollars. But then but then shortly thereafter, he paid that those assets and stock that he has went down, he paid a bajillion dollars on assets and profit that he no longer has. So in your case, you have $1 million, 500,000, $100,000, 401 K. And if you were in that situation, my stock is up and say 2021 and you pay taxes on that unrealized profit because you didn't sell it, it's just potential profit. But then it goes into 2022 and we have had a terrible year. And you will say your market value went down 20, you know, 19.7%. That's what the S&P did. And now you paid money on taxes of the assets you no longer have. That is just a frankly unconstitutional, as my understanding of it, that all across the globe nobody has that. It's all on earned income and income realized because it just seems to be unfair. So you need to do your Social Security, right? We're probably going to see some sort of Social Security changes, some sort of Medicare changes somewhere in the future, and taxes are probably going to go up.

Producer:
So if you don't have those strategies for tax free income, if you didn't do a Roth conversion, essentially you're sitting there and it's going to happen. It's just a ticking time bomb. And that reminds me, a tax time bomb is the traditional IRA. And the required minimum distributions, which is the linchpin to making happen a tax time bomb. So just like. The majority of retirement assets are sitting in a traditional IRA in America, you know, billions and billions and billions of dollars. And every time somebody has to take that money out to fund their lifestyle, they have to pay their current tax bracket on it right there. Their federal and state, they have to pay that on that. So every year you have to pay and the value goes up and you have to pull a percentage out and pay for it. And then you've got to pull out another one to pay taxes and another one to pay taxes on that tax withdrawal that you did. If taxes go up and you've got $1 million and and you have to keep doing this thing, it could be a potential reality where you're out of $1 million over ten years. Most people don't get it. That's a tough one because you think I got $1 million and for the next 30 years, if I get a 6% rate of return on that, that should be good enough, right? Plus, you might throw in another 2 or 3% in dividends, which are all taxable if you depending on what kind of dividends they are.

Producer:
So you could see how complex this is getting. And one of the common pitfalls of do it yourself or investors that are doing it like an average Joe, I've got a vanguard, I've got fidelity and they are set up and they're an index fund. I'm paying 0.03 and the market went down. They lost, you know, hundreds of thousands of dollars worth of value. Then they have to pray it goes up. They're playing the average game without asking the right questions and reaching out to somebody and say, I need a serious plan because Mat, for your family, let's just say you're your family's CFO. Okay? Mcclure Family CFO. And if you're the McClure family CFO, Chief Financial Officer, then you owe it to yourself and your spouse and your children to make sure that you've done your planning and did it right. So again, folks, I want to ask you this question in the future, ten, 20 years from now. And you're in your you're in your future financial situation. And let's just say, for example, here, it's not a good one.

Producer:
Then you go right and fill out this this sentence here. Rather than spend. Several days or weeks and intermittently having a conversation about my financial well-being, making sure that we end up where we want to be. I was too busy. Doing what? What was that? Was that working? I think that's an easy one. I was too busy working to step out from my work and make sure that my family and I are going to be okay in the future. How does that feel? It's probably not good enough, right? Nobody else to point to. All right. Maybe said, well, I was at the gym. I was playing golf. None of those things are working to put in that space. I was rather than doing my planning, I was too busy doing X. Okay. There's nobody around in 20 to 30 years to point out, if you're 80 years old and you run out of money. That is that is not a good situation. So let's have that conversation. Do that conversation. Ask the right questions. And if you don't ask the right questions, we'll ask them for you. So if I said it's no cost or no obligation so that we can look through your current situation, if you change nothing at all, where would you be? That's clarity. Clarity. That's priceless because you may still have time to do a few very easy things. And I say this from experience.

Merrit Strunk:
Very easy tweaks and changes in your situation where it can completely change your future and you don't run out of money. Don't do those things. And frequently we see you can run out of money. Okay. It just depends on your situation. So, folks, I hit you with some tough love there. A lot of good information, a lot of meat and potatoes on your plate there in terms of some things you may not be aware of. And that is our intention. We want you to be more financially savvy and more financially equipped than people who did not listen to this today. So give us a call or stop by our website. Retirement unbroken.com. Get your complimentary report. It costs nothing and it gives you clarity. Or you can give us a call at 858 521 9700. Hey, if you've got a friend or a family member that needs to hear this kind of stuff, lead them to our podcast, get on our website, get the podcast or anywhere you take in your podcast. Could be Apple, could be Spotify, send it to them, send it to them like it, subscribe so that you get an update when we do this. My name is Merrit Strunk. I'm the lead advisor at Momentum Financial and also the host of the Retirement Unbroken podcast and author of the Retirement Unbroken. And we'll see you 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 merit. Visit retirement unbroken.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 merit, stock and independent agent. California License number 07510. Certified Financial Fiduciary is a FINRA recognized professional certification.

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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