10.27.22: Audio automatically transcribed by Sonix

10.27.22: 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 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 again to the Retirement Unbroken show. This is Merrit Strunk, president of Momentum Financial and the host of the Retirement Unbroken radio show and podcast. So welcome to our listeners here and the Unbroken Nation. As always, we have our producer, Matt McClure. Good to have you here today, Matt.

Producer:
Good to be here, as always. Merrit Looking forward to sharing a lot of great info and insights with the listeners.

Merrit Strunk:
Yeah, it's so nice to have you here. If you're a regular listener to the Retirement Unbroken show, then you already know what I'm going to say. Our mission is to transform our listeners into more educated, more equipped and financially savvy individuals so that you can make better financial decisions for your future and your family and you can unlock what is possible in your financial future. The truth is and Matt, you know this. You hear me say it all the time, but the truth is, for many people, their retirement is already broken. It's already broken, and they just don't know it yet. And generally, you know, when are they going to wake up? When are they going to find out that their retirement, they just didn't pay enough attention to it. More time was spent on planning vacations and their financial future. They're going to find out much later in life. And if you are one of those folks and you are not paying attention to your financial wherewithal, do yourself a favor. Go to our website at retirement unbroken dot com RetirementUnbroken.com And get in contact with us and you can also call us at 858 521 9700.

Merrit Strunk:
And if you're wanting to listen to past episodes of the shows that we've done, you can listen to it on podcast just about anywhere. You can access podcasts and you can also get it straight from our website at retirement unbroken dot com. So let me tell you what's going up here. We're going to give you a little bit of the market update today. We're going to talk about how inflation is impacting some folks and a demonstration of that. And when you're thinking here we are, we're kind of towards the end of the year, right? I mean, the year is flown by, although lots of things have happened. I don't know about you, but I wake up and it's like, wow, it's Friday again. So we're coming up to 20, 23. Can you believe it? And we're going to talk about some things that you need to plan around for 2023. We're going to play our ever popular game, right or wrong. And that brings us to the the financial wisdom quote of the week.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Merrit Strunk:
Matt?

Producer:
Well, you know, we actually have it's like a two-for-one special this time around because we've got a bonus quote as well. So so I'm going to share two of them with you if that if that is. All right. If I have your permission, Mr. Host, ma'am.

Merrit Strunk:
Granted.

Producer:
Thank you. Thank you. I love it. That was very official sounding, too. Here we go. So the first one actually comes from Arthur Godfrey. And so if you know anything about show business and entertainment, kind of back in the day here. Arthur Godfrey was an American radio and TV host. He was an entertainer, sometimes introduced by his nickname, the Old Redhead. And one time the old redhead said this, quote, I'm proud to pay taxes in the United States. The only thing is I could be just as proud for half the money.

Merrit Strunk:
Absolutely. Everybody wants to pay their fair share, just not more than their fair share.

Producer:
That's right. That's right. They want to see Uncle Sam, you know, instead of, you know, the famous picture of Uncle Sam pointed his finger at you. They don't want to see it with his hand out. That's the thing. Well, we do have an extra quote of the week here, too. And for those of you who are cooler than I am, you might be more familiar with Jam Master Jay. He was the deejay for Run-DMC. Now, Run-DMC, I am very aware of big hip hop group back, especially during the eighties and nineties time. Yeah, I mean, just just crazy. But here we go. His quote of the week was this Make sure to save for the future and keep making money. I like that. It's simple. I love it.

Merrit Strunk:
Truly, truly and you know doing some research on this quote you know and I can't I can't say that this is factual I saw several different sources is Jam Master Jay. It looks like he's no longer with us. And at one point he had an impressive fortune of I think it was right around $175 million from one source that I saw. And then the other one said he actually died broke. So what I would say is, regardless of either one of these points I'm bringing up here about Jam Master Jay is that he was right. Make sure you're saying for the future and keep making money. I got it. However, it sounds like that potentially he might have had some troubles in his life where he didn't follow that. And that's that's just, frankly, discipline. And so, you know, discipline is kind of like a boring, yucky word for most humans discipline, because we relate that back to giving up something. We're not tapping into our pleasure sensors when we have, you know, instant gratification, you know, doing what we want to do. If you have a little discipline, you're always going to end up better as opposed to and in quotes, I don't mean to cast aspersions on anybody, but if you're lazy about money, then you're going to always suffer pain, right? Rarely ever will you. Can you be lazy about money throughout the rest of your life and be okay in the later years? This is probably just not going to happen. All right. Thank you, Matt. Those were pretty cool. I'm going to go ahead and give you a market update today. So if you woke up this morning and turned on the financial shows and looked at the market, you would have seen green.

Merrit Strunk:
Everything was looking pretty good except for the tech stocks that turned around where we were close to. You know, we're over 200 points on the major indexes. S&p and Dow, that was almost completely erased by the end of the day. So the Dow was up a 0.01 whopping percent. The Nasdaq down 2% and the S&P down 0.74% right now. You know, in terms of industries or looking pretty good here, health care, obviously defensive energy, there's big pent up energy demand going on, industrials and consumer staples. Right. These are mostly defensive positions for what's going on here. What is weak is communication services. Those would be things like Facebook, information technology, cloud based technology, consumer discretionary and real estate. The shiny spot is been energy prices. So and then so if energy prices are up, then stocks are following falling. And so that's that was kind of rough. You know, we had some nice days there. I think it was Friday and then Monday we had some nice runs, what we call that a bear market rally. And that's to be expected. But they generally are lasting a little bit short. And then back to watching what's what's going on with earnings. And speaking of earnings, Google had reported yesterday after the market closed, and that would have been. Tuesday that they had a huge miss on their earnings and that brought the tech sector down lower. And now everybody's bracing for media platforms or Facebook to announce their earnings. So Facebook was down. It continues to move lower ahead of its its announcement about earnings.

Merrit Strunk:
So maybe somebody knows something we don't or the general population. And if Google has missed and now Facebook, if it misses it, it will truly continue to bring down not only the Nasdaq potentially, but also all the tech sector. However, you know, the WTI crude futures are going up, up 3.29%. So that's to be expected. And the fear index or the VIX index is down 2.5%. So that's interesting. When you got the down market all of a sudden and VIX is down as well, when that VIX is up, that means fear is high. Vix. If you're unaware of that VIX, you might want to go home. And if you're currently at Lowe's or Home Depot or something, you're out in your car. When you go home, look up VIX VIX and it is the volatility index and many times called the fear index. So that's it for the market update. And by the way, just want to make a special mention here. We're at midterm election time. Election day is Tuesday, November the eighth. And if you're here in California and you haven't gotten in your mail in ballot, time is running out, and then you want to make a plan to get out and vote. We have a lot of crazy stuff going on in our country. Runaway crime, runaway spending. You just spend the will of whatever it is. And that's a lot of stuff that's going on. So this is your opportunity as a United States citizen. I still think they're letting citizens vote. Is that right, Matt? The citizens can vote.

Producer:
That's the word on the street.

Merrit Strunk:
Maybe you don't have to prove me. You have to show your ID, but you get out there, this is your constitutional right. Get out there and make your vote matter and vote on the things that you might want to ask yourself. I encourage you to say, are we as a country better right now or was there a better time? And what can we do to change that? So just think about that Good, good wisdom there. Interesting. So as we are, like I said, we're here. We are. We're looking at the next year and we're in October. We haven't even reached Halloween just yet. But what happens when we get towards the the the end of the year and looking towards the new year, a lot of families get together and they do what? Or just individuals they get together. I want to I want to lose weight in 2023. And of course, that's what the gym industry is hoping you'll do. Right. They want you to to to sign up knowing that you're just going to pay that fee every month. And statistically that you may not be showing up. Like you should think of this as more not not the New Year's type of goals, but big strategic goals that you want to accomplish and try to break them down into bite sized pieces. One of the things for 2023 that was announced is new tax brackets from the IRS for 2023. I got to tell you here, although we work in tax efficient strategies for wealth management, specifically tax alpha and tax loss harvesting for accounts and for our clients, we are not CPAs, we are not tax professionals, although we work with many of them.

Merrit Strunk:
So always seek your tax expert or advisor near you related to these things so taxpayers may see their tax liability cut in 2023. That statement right there, which means you translate that is you might have to pay less taxes. Yay! That's always good. As the IRS has adjusted the standard deductions and tax brackets for inflation. Each year, the IRS makes inflation adjustments to key benchmarks. And But this year, as inflation nears record highs, taxpayers may see a more significant impact thanks to the annual adjustments, I find it very hard to vocalise anything that comes close to a thank you directed at the IRS. I just I just find it very, very hard. You know, the most hated government agency in the planet. Yeah. And you know, they're they're hiring of an army that they just were approved to do about 87,000 new employees over several years. So however, I say this because it's a big it just always a depends. It depends. There are only certain items that are inflation sensitive, meaning those aren't they may not result in the taxpayer owing less or more come tax day. So meanwhile, as everything looks like, you know, oh, I got to pay less taxes, the taxpayers who got a bump in their salary during this inflation crisis that we were having that may offset any easing of taxes they have. So you may not experience the same change in tax liability if your income went up and a lot of people do.

Merrit Strunk:
We saw a lot of wage inflation or maybe they change jobs, got a new job, got more pay. So it'll just depend on the individual. So for a lot of people this will be a net tax cut. But overall, given increase inflation, I don't I don't know. I don't think it's going to be the big net increase for a lot of folks in their purchasing power from one year to the next. So if you're a married couple, you probably pay your your taxes based on a married filing jointly arrangement. Therefore, your tax bracket is is a different arrangement than, say, if you were single. So if you don't under the new settings here, if you don't make over 22,000, then you're only 10% of your income is taxable income tax. If you're over 22,000, but not over $89,450. Okay, then you'll be in the 12%. So now, if you're over the 89,450 and that there's that next bracket and I'll stop detailing these as soon as I cover this one. If you were over 89,450 in between the 190,750, now you're at the 22% tax bracket. And guys, taxes are likely going to go up. I mean, every single person in every single client we talk to, we ask them, you know, do you think the taxes are going to go up over your lifetime? And it's just very hard to justify that taxes won't go up. Social Security, we know, is going to not meet its obligations. And at some point in the future, I try and remember that the year that it is and then that where they can only meet 75% of their obligation and then Medicare with us living longer and medical costs going up.

Merrit Strunk:
You find it very hard to make a case that taxes will not go up. Of course, it just depends on policy coming from Washington and whether that happens. So if you're single, if you don't make over 11,000 and you're in it, 10% tax bracket, if you make between 11 and 44 seven, you're in the 12. And so these have adjusted downward with these new changes. Here's a simplified you know, if you're listening, those are a bunch of numbers and it's kind of hard to make sense of it. But let me try to kind of give you an example that might help. If your taxable income is $75,000 in 2022, you'll owe 12,117 in taxes. But if it stays at 75 and 2023, 75,000 in 2023, and that's the cutoff there, you'll only owe 11,807. So there's a difference of about $300 there. So I'm trying to make it simple. So what's the big deal that if you're in the, say, your taxable earning of $75,000 with this new tax bracket announcement, you'll you'll save $300 in taxes. That's federal OC If you're living in California, you know, you've got to pay state tax as well. Good for those people in Texas, California, I mean, Texas and Arizona, Right. In Florida, they don't have to pay that pesky state tax. I guess that's why they're so many people are flocking to those states rather than staying in California. The other change that we've got going here is and you heard if you listen to the show last time you heard the changes that are happening for Social Security, and when Social Security changes, they call that a COLA.

Merrit Strunk:
That's a cost of living adjustment acronym. And what they're trying to do with people who receive Social Security is adjust that income that they're getting through Social Security to compete and stay even with inflation. And you'd have to be hiding under a rock to know that inflation has not been sky high. So this was the month of October where the government then declares what will be that COLA increase for the following year, 2023? And they made that announcement and it is 8.7 and I made I made a little joke last time in our last episode where if you if you're if you're walking, say, in the Home Depot or Lowe's and you see a senior couple, you might see a little pep in their step. And and that's because they're getting one of the biggest whopping increases that they can remember probably in the last 40 years or so. So that is going up to keep pace with inflation. And that was a big increase. So that's the good news. It helps your buying power. And as we said, there's a description. Matt, I don't know if you can let me challenge you on this. I say this phrase often and it starts with and this is a tough one. It's not a yes or no right or wrong. So this is a long form essay answer in inflation is though what? That does what to your retirement dollars? Oh.

Producer:
Inflation is the elephant that sits on your retirement. I don't know. I mean, really? Kind of. I like that.

Merrit Strunk:
I like that.

Producer:
I mean, yeah, it's not correct, but it's not wrong.

Merrit Strunk:
Hey, good shot at that, man. You know, enough with these softball pitches that I've been giving you, man. So this is. This is a tough one. Inflation is the secret partner to your retirement. That erodes the purchasing power of your retirement dollar. Right? So it erodes that if you're in retirement and and you have a set income that you can rely on and also the inflation goes up, well, you have to spend more of your dollars. You know and we've talked about. Tax efficient or tax managed portfolios in retirement. And what we try to aim to do is that if you're taking a dollar out of your retirement funds, we try to make it so you don't have to take a dollar 20 or a dollar 40 out in order to do the same thing that you would do. So to through tax manage portfolios. And if inflation is rocking, well, that's a problem. If you're taking if you're taking income from your resources. Not pension, not Social Security, but you're taking income from your retirement sources. And inflation is high for a prolonged period. You may be well served to tighten your belt on your expenses. Right. So, I mean, that's just the way it goes in some cases, unless you have plenty of assets. So you need to tighten and watch your expenses. If you're in a drawdown income drawdown in retirement, you know, asset drawdown makes sense, right? So let's watch those. Maybe we tighten our belts here. Why you want that money in those resources to continue to serve you over your lifetime. So the bad news on this COLA thing is, even though that was a big increase, 8.7% increase in Social Security, the other thing that's wreaking havoc with American families is what? Well, have you been to the grocery store lately? You know what? I got this briefing from my spouse who came back from the grocery store and she said, you know, interesting.

Merrit Strunk:
I bought butter today. I bought a pack of butter. And that pack of butter has increased in cost 200%. Holy Nike's. That is very noticeable. Right. So when you're going through there and you used to seeing at this price and it's double the price now a triple the price. Oh, man. So yes, food costs, energy costs, car costs in terms of purchasing a vehicle and travel costs, all these things are sky high, frighteningly. So. Just in time for Halloween. I'll tell you what, this brings us to a point where we want to take a break. When we come back, we're going to be giving you a inflation demonstration. And we have a lot more things in store for you and you don't want to miss it. Got a good show here today. So if you haven't been to our website, you could take this break and go there Now it's retirement unbroken dot com RetirementUnbroken.com. And if you want to get the retirement unbroken report it's complimentary to every single one of our listeners so why not right Get the answers to your questions. Do a checkup, get a second opinion, find out, run the projections and we will make that easy on you. All right. We'll see you back here after the break.

Producer:
Could a recent IRS change actually save you money on next year's taxes? I'm Matt McClure with a Retirement dot Radio network powered by Amerilife. When you think of the Internal Revenue Service, your mind may very well recall the sting of forking over your money to Uncle Sam or the hassle of preparing your taxes. A recent study by the American Action Forum estimated Americans spent more than $190 billion. That's billion with a B on tax preparation in 2021. Plus, many economists predict the federal government will have to raise taxes in the future to pay off the national debt. But there's one change the taxman is making for 2023 that could actually mean you'll owe less in taxes next year.

Andrew Pelosi:
How much you save will be relative to your personal situation. So it's not going to be the same for every household, but certainly it could have a nice little savings come tax time.

Producer:
Andrew Pelosi, with Pelosi Accounting and Consulting, recently told Atlanta News First, the IRS typically makes annual adjustments to income tax brackets, but this year they're bigger than usual due to, you guessed it, inflation.

Andrew Pelosi:
Some people will see a savings of perhaps $1,000 per during tax time on their tax return. Others might see a little bit more. Certainly the brackets have changed, so the those who are in higher brackets will probably see more savings than those who are in lower brackets. But across the board, everyone's going to see some kind of savings.

Producer:
In short, all tax brackets are going up by about 7% for 2023. That means you can make more money and be in a lower tax bracket than you would be this year. The standard deduction is also going up to the tune of a $900 increase for single filers and 1800 bucks for married couples filing jointly. I mean.

Andrew Pelosi:
Look, it's beneficial for everyone, right? At the end of the day, we're all looking to save money and keep more money in our pockets. In a time like this where groceries are more expensive, fuel prices are at record prices. Every little bit helps.

Producer:
Keep in mind, though, that these adjustments are for money you earn next year in 2023, so you won't actually see the results until you file your taxes in early 2024. So could you benefit from the IRS's new tax brackets? That's a key question to consider as you plan your financial future with the Retirement dot Radio Network powered by Ameriife. I'm Matt McClure.

Producer:
You're listening to Your Retirement Unbroken. To schedule your complimentary consultation with Merrit, visit retirement unbroken dot.com. RetirementUnbroken.com

Merrit Strunk:
All right. Well, welcome back to the Retirement Unbroken show. We're glad that you came back here and here and we just got through talking about right before the break. I said go to our website, get that complimentary retirement unbroken report. Most people right now, according to some research studies that we've looked at, they're thinking that, you know, we may need a lot of money for retirement and they're not confident they're going to have it. So let me ask you, are you confident? That you will have the amount of money that you think you should have and. How do you know? That amount of money you think you should have is the proper bogey for you the target? Okay. So also, if you're still working and you are in a quandary of what would a prudent person do right now with everything going on with your 401. K, your IRA, your Roth and your investments, What? What should you do if you said that? Oh. You know, I'm going to hope for the best, but I certainly need to prepare for the worst. What would that entail and what are those strategies? What might you consider and how are you supposed to know all the separate options that exist for you if you don't do this for your living? Right.

Merrit Strunk:
Now, if you don't work and you just sit at home and got 12 different newsletters and how about this? You're speculating with your working spouses. 401k you're managing her for one day and your day trading it. Bad idea. Bad idea because you're talking about that as retirement money. And it's funny, I actually bring that up because I've seen it and it's you know, it's when the person goes, you know what, I've tried to do this and every time I'm making the worst mistakes, I think I'm doing it right. And then it turns out I'm not. I have got to stop and get some help. That's I think that's the hard school of hard knocks speaking. But we're glad you know, What did I what did I quote? I was making a joke to my sister the other day. I said, oh, well, good. You know, admitting you have a problem is the first step in recovery, you know, And of course, that's a joke there.

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

Merrit Strunk:
The consumer Price Index CPI, which is inflation. It measures the average change to prices for consumer goods and services, and it rose more than expected again in September. So we're still hovering near the highest levels that we saw in history back in the 1980s, 1980s. A time of excess, a time of excess. That's how I remember it. It was a crazy time. And then rising cost of living, right? I mean, it is it's a it's a cost. It's an increase in all of our living and all of our expenses are our lifestyle. This is bad for workers, right? So who's hourly, average? Hourly earnings are down 3% from a year ago. So if inflation is high, high, and your wages are lower on average about 3%. And by the way, that data comes from an article on Fox business dot com about lifestyle and inflation setbacks. That's the attribution of that so the if the average hourly earnings are down 3% from a year ago that leaves Americans living paycheck to paycheck. Right. It costs me more and my earnings are a little bit less now. I am living paycheck to paycheck. By the way, if you're one of those people that aren't living paycheck to paycheck and you've got a monthly discretionary income that's left over at the end of the month, and I see it a lot when we do our analysis and it's kind of a big aha to the folks we're talking to.

Merrit Strunk:
Many times I'm like, okay, it looks like you have an extra 1250 dollars left over at the end of the month. Is that right? And they're like, they look at each other like, is that right? Let's go look through those expenses again. That's why we have to look into the monthly expenses so, so hard if we're going to do our proper job for you as a fiduciary financial advisor. And if you have that discretionary, can I, can I just challenge you here? Time is a ticking. Time is moving on in. The world is spinning. I forgot how fast is like 14,000 miles an hour or something. So it time is not going to stop. And if you're if you have this money and you don't and it's a positive monthly cash flow and you don't know how you're putting that to work, that is unemployed money that you're probably going to spend and it's just going to fall through the cracks, why not take that money and do what we call systematic wealth growth with it? If you don't know how to do that, then give us a call. It's 32% of adults in this article said they're regularly running out of money during pay periods.

Merrit Strunk:
Ouch. And that is according to salary finance. So and more than half of us worker US adults feel as if they're behind on their retirement savings. I think no matter what research study you're going to find the answer to that is dir right. I mean, because there's so consistent study after study after study, they're behind on savings. And I think the government knows that. Right. They obviously know that and that's why they're trying to pass legislation and the 401 K and the IRA legislation that's coming or potentially coming that we detailed all those changes in 401 K options and things that the government is trying to make happen. So yes, the US government knows it. And when you take this this survey, it's in the data. Again, they feel like we're not saving enough. And that underscores the hardships of an inflated economy where everything costs more and that is backed up by a report coming out of bankrate.com. So of these adults, over one over a third said they feel significantly behind. So there was we feel like we're behind. We significantly feel like we're behind, according to the consumer financial services company recent report. So so here's some tough love. Are you saving enough for your retirement? Are you investing that at the right risk tolerance? Do you know what your risk tolerance is? Right.

Merrit Strunk:
And I'll put it this way psychological risk tolerance is the finite number that is scored to your psychological risk tolerance so that you can say go to sleep knowing that you only have so much risk exposure to market loss in value of your investments. So many people have no idea what they're invested in, and I can testify to that over and over and over and over again. And they don't know what mom or dad are invested in because the difficulties of having that conversation many times. So mom and dad could lose value in their investments because, frankly, they're not paying attention. They don't know what they're invested in. They don't know why they're invested in and. The end of their buckets of money that they do have. They don't know which what the purpose of that money is. Right. They may have lots of money in savings. They don't know what the purpose of that money is in their lifetime. And then if you don't know what your situation is, let me just ask you, how long are you going to wait? If not now, when? If not you, then who are you relying on? Somebody other than yourself to have responsibility for your wealth outcome. I got news for you. We cover this in our book. How would you like to get to the end of the road here? Or let's just say not the in the road, but oh 80 something and find that you are running short of money.

Merrit Strunk:
It doesn't matter where you point that finger at that point. Point pointed at your advisor or point it at the government or pointed at the hardships you endured or your upbringing or whatever. It doesn't matter, folks. It doesn't matter where you point that finger, if that's where you end up. So here, let me give you the let me give you the the juxtaposition of that. It's okay to call a financial adviser a and we encourage you to contact us or fiduciary financial adviser and say, I don't know and I want to find out. Right. Information is power. So we just ran through how inflation is impacting people right now. These are current research studies amongst a lot of people. And they say, I'm concerned and I'm very concerned or I'm behind and I'm very behind. That plan is is no bueno. That's not working for you. Right. So, Matt, play along with me for a second here. Sure. If I said. Do you know how much money it will take you to afford your lifestyle in retirement? Yes or no? No. And do you have enough guaranteed income sources so that you will have an ever-increasing income during your lifetime?

Producer:
No, definitely not.

Merrit Strunk:
And let me ask you, Matt, that those are some critical, critical things that you have to understand. Right. And do you know how taxes or inflation will impact your retirement income over your lifetime?

Producer:
No, I mean. Right. This is the thing. Like I and I'm a guy, you know, I'm in my forties. I won't I won't I won't sugarcoat my age. I won't lie about my age here. But like, you know, I'm a guy in my forties and now I am especially working in this line of business these days and really starting to think about it. And I sort of realize it's it's never too early to start planning and thinking about these things and getting advice from someone who really knows what the heck they're talking about like you. And it can be too late. It cannot be too early.

Merrit Strunk:
Yeah. Thank you, Matt, and thank you for your honesty there. I appreciate the back and forth on that because I feel so strongly about it. I really do. I have a heart for our clients and for people who want to achieve success. But, you know, let me ask you this, too. You know, the reason why some people procrastinate with even having the conversation, not not the official planning of it, but even having a conversation about it. Many times its perfectionism gets in the way, and maybe that's not the right word, but let me tell you what it is. It is, Oh, I must know this before I do anything. And I'm not ready to have that because I don't have that information or that data. Guess what? Then there will never be a good time for you to actually stop the world from spinning and getting it done. What I would encourage you to do is take imperfect action to move you forward. It ain't perfect. I may not have the information that I need, but I need to ask the questions and get the critical information, because if you don't, you will eventually have a surprise. Now, praise the Lord. If you're in a situation where you know you have enough assets and and you have $10 Million and you're never going to run out of money. Hopefully, by the way, there's our $10 Million people that run out of money. Just look at the Run-DMC example.

Merrit Strunk:
Right. So if you don't know what that means. And. Earlier in the show, we talked about one of the folks from Run-DMC had a lot of money at one point and then, according to some sources, ran out of that money. So, you know, this little diatribe I'm going through is really to encourage you to take that imperfect action, ask the questions, get information. Information is power. Talk to somebody. Call us if you'd like, and you can reach us at 858 521 9700, 858 521 9700. So as let's say we have a conversation. One of the things we'll end up figuring out is do you have an income gap as a projection in your retirement? I know what I'm receiving. I know what I think my expenses are going to be and we'll get there. Now, the big question is, is there an income gap? Well, according to Kiplinger's, which is talking about retirement and retiring in a slowing economy, retiring during a down market can be very, very challenging but not an impossible task. So we want to help you make sure that you don't have what's called an income gap during this stage that you may be going into. And by the way, it really helps. Please don't wait till two months till you retire to have this conversation. Don't wait six months even to have that. Don't wait a year. Don't wait two years. Do it now. Oh, my gosh.

Merrit Strunk:
It's so frustrating to see people. Wait, wait, wait, wait, wait, wait. You put it off. Put it off, then fix it. Okay, well, that means there's a behavioral changes, right? There isn't a magic wand for financial advisors When you get your license, they go, and here is your Harry Potter one that you can wave and fix people's financial problems. I wish there was. I could just pull that box and it's like, okay, here's this situation. Let's fix it. For a lot of people, there needs to be that. For other people, it's easy. Oh my gosh, When you've got time on your side, it's easy. Some easy, simple changes to the way that they save and invest can really fix the problem. And when I mean easy, it's easy. Okay, so the first thing you want to do in this kind of walk the path of figuring out an income gap or income surplus that would be great is to determine your expenses and your retirement. Well, that in itself can be fairly challenging. Right? Let's get a fix on that. By the way, you know, some of the phases in retirement, right when you first retire, if you're in good health, it might be the go-go years of retirement, who we're traveling, We're seeing Europe or going to the Caribbean. We're having fun. We're visiting the grandkids. We may even get an RV right and go around and pay exorbitant prices on cars everywhere.

Merrit Strunk:
I probably should be diesel, Right? So just like Merrit. What are you talking about? An RV? That's diesel, buddy. You're right. I don't know. So the go go years and then you eventually hit the What's next? Everybody in the car goes slow. Go right. And then the the other one and I see this up close to which is the no go. So go, go slow, go. No go. But you got to figure out your expenses. Relatively close in during those phases. So figure out those expenses and that income and where you're going to get it. You've got to subtract your expenses. You're expected income actually subtract your expenses from your expected income, and that will give you a retirement income gap. Okay. Do you have the wherewithal to figure in COLAs and Social Security and use the average COLA in there? Do you have the ability to factor in the inflation and the average inflation rate in that? And what happens if you get a tax increase? Right. So, sure. Okay. Got your income, subtract your expenses and retirement. Make sure you're including all those different things and you'll figure out whether or not you get a surplus or a deficit in your cash flow. Now we want everyone to have an income surplus and get this, folks, an income surplus that potentially could increase every year. So that, you know, inflation is going to increase. Boy, if I would say, look, I'm putting together my packages and my Christmas gifts and I'm going to be wrapping them and I'll be giving them out to all my family members and they're going to what? What did I.

Merrit Strunk:
What do I get? I was like, Well, you have an ever-increasing income during your lifetime. Oh, my goodness. Where? Woohoo! That'd be great. I don't know how you did it, but yeah, I'll do that. You don't even have to put it on the tree Merrit, you know. So, you know, we want that to happen for everybody and we can put those things in place as long as there is time. Right. And of course, it all depends on your situation so that you can enjoy the life you work so hard to build and you have smart reinvestment for successful retirement. I love that. Happy, happy. Joy. Joy. Right. And you could build a plan that can pay you income even during bad markets. Hmm. Even during bad markets, stock market down can still pay you income. That's a possibility to have that in your plan. Again, it all depends. These can happen with conventional strategies. It can happen with guaranteed income strategies where we could eliminate certain fees and guarantee yourself income that you could never outlive regardless of future market conditions. Wonderful. Now, short of a nuclear bomb, we're not guaranteeing that. All right, That's all Bets are off there. But but regardless of that, if that doesn't happen, fantastic.

Merrit Strunk:
We and you should. When we get this done, you should pat yourself on the back and feel really good, clear, confident, comfortable that you've done your very best job you can with everything that you know at the time. Right. Prove it with math. Right. So we'll prove it with math. So interesting. A lot of people think that retirement success is a big number. But I'll tell you, folks, people are the most happy in retirement frequently are ones who have prioritized income over assets to have a better retirement. If you know, the bills are paid, if you know, it's money's going to come in regardless of anything that happens, the bills are going to be paid. Your lifestyle is going to be funded. Right. Assets, on the other hand, they could be stolen, they could be swindled, they can be lost in the market and so on and so forth. So but if you know you have income, then the assets can build and you still have income that takes the pressure off the portfolio. Isn't that wonderful? Okay. The other one is you need to understand the money that you are planning on will need to last ready for drumroll. But how long how long will it have to last? Well, it could need to last after you retire. Maybe another 30 plus years. Wow. Do the math. So if you retire at 65, like the traditional stereotypical American, right. 65, then you've got another 30 plus years.

Merrit Strunk:
Okay. I hear you saying it might want to live that long. Don't want to live that long. I got it. I've heard it. It's funny. People will say that I don't want to live that long. Well, it may not be your choice. You may just live that long. Right. I have a very good friend who is a centenarian, and she is 103 years old. And we call her Aunt Dixie. Right. So And Dixie and Dixie is 103. Her mind is there and her physical body and health is hanging in there, surprisingly. And gosh, she says, I never thought I would live this long. I never thought I would live this long. Well, not many people do it. 0.0004 Something percent of people in the entire globe will live that long. However, if you're a fairly healthy 65-year-old and you're married, you could, you know, you guys could live till 95, you know. So the financial plan needs to support your living expenses, your medical expenses, account for inflation, account for taxes, all those things. And you know that that will be the best case. Now, what happens if the economy goes down, the stock market goes down. If one of us gets ill, one of us just gets deceased. That's the way we check off. Check off. Are we going to be okay? Check the box. Check the box, check it. Do the best job you can.

Producer:
Come on down as we test your financial knowledge in right or wrong.

Merrit Strunk:
Matt, I want to do this very quickly. All right. So to test our knowledge of the things that we cover here so there will be no changes in the tax brackets from this year, 2022 to 2023. Right or wrong?

Producer:
Okay. I was paying attention earlier, so I know that that one is wrong.

Merrit Strunk:
A bright. There have been some adjustments lowering those income amounts that you'll break into. So it's important to have a tax plan during your retirement years. That's the point, which is why we encourage all of our listeners and existing clients to have an annual financial checkup to ensure that they're on the right track related to taxes and everything else. So the only way to reduce those income taxes is to get into a lower tax bracket. Do you know how to get into a lower tax bracket where you still have assets and money? Let's talk about it next. One, the only ways to reduce your tax income and to get into a lower tax bracket is to deduct your mortgage interest and taking advantage of tax credits, right or wrong.

Producer:
You know, I don't know. I kind of want to say that one's right.

Merrit Strunk:
Well, I want to make the sound I haven't been able to make in many shows, but they're during this questioning with you, I want to make the wrong sound. Wrong. Okay. You're always getting this right. You're a good student. So in any way, anyone can reduce their taxable. And most people put it this way you can't say every single person, but with certainty. It just depends. So anyone can reduce their taxable income during retirement by taking tax free withdrawals from two types of tax free investments. One is a Roth IRA, which you're probably aware of, and the other one is certain types of life insurance where you can get tax free income in retirement. So if you're interested in generating tax free income during your retirement, then I would encourage you to schedule a call with us so we could chat about it. You can ask those questions. Information is power, right, folks? Information is power. Become part of the unbroken nation. Last question then we'll wrap it up here, Matt. Medicare does not cover long term care needs for people who cannot perform everyday activities on their own.

Producer:
I know that Medicare does not cover long-term care needs. So that one's going to be right.

Merrit Strunk:
Right. As we've talked about in past shows, you've experienced that personally with your family. This is why we want everyone to have a smart health plan for their success or retirement. Healthcare expenses are very, very, very costly. And I call long term care events or extended care events a potential estate eliminating event. Okay. So that brings us to the end of the show here. We covered a lot of information, and I think some of the takeaways is that if you're not asking the questions, you're not getting the information, the critical information you need, all you have to do is ask. Right. Most people will give you the answer or some sort of feedback. Right? If you want unbiased feedback and an analysis, you can get the retirement unbroken report from us. Go to our website retirement unbroken dot com RetirementUnbroken.com Or call us at 858 521 9700. This has been Merrit Strunk, the host of the Retirement Unbroken show and with Matt McClure as well. And we're glad you tuned in. Join us every week Saturday at 1:00 PM and we'll see you back for the next Retirement Unbroken show.

Producer:
Thanks for listening to Retirement Unbroken. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard-earned assets to schedule your complimentary no-obligation consultation with Merrit. Visit retirement unbroken dot com. RetirementUnbroken.com Or pick up the phone and call 858 521 9700. That's 858 521 9700.

Producer:
Advisory services are offered through Momentum Financial and Insurance Services LLC. An investment advisor in the state of California, Insurance products and services are offered through Merrit Strunk an independent agent. California License number 07510. Certified Financial Fiduciary is a federally recognized professional certification.

Sonix is the world’s most advanced automated transcription, translation, and subtitling platform. Fast, accurate, and affordable.

Automatically convert your mp3 files to text (txt file), Microsoft Word (docx file), and SubRip Subtitle (srt file) in minutes.

Sonix has many features that you'd love including advanced search, enterprise-grade admin tools, collaboration tools, share transcripts, and easily transcribe your Zoom meetings. Try Sonix for free today.