11.11.22: Audio automatically transcribed by Sonix

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

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

Producer:
Welcome to your Retirement Unbroken with your host, Merrit Strunk. Merrit is a licensed fiduciary and financial advisor who always places your needs first. Merrit works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you, too. So now let's start the show. Here's Merrit Strunk.

Merrit Strunk:
Welcome again to the Retirement Unbroken show. This is a Merrit Strunk. I'm president of Momentum Financial and host of the Retirement Broken Radio show and podcast. Welcome, all. So if you've been here, you know what we're going to say. But the whole purpose of this show, the reason why our listeners tune in, is to equip them and educate and financially help them be more financially savvy and individuals so that they can unlock what's possible and their financial future. You'll just be a smarter cookie if you listen, take notes, pay attention, you get this done. You'll just be a smarter cookie about finances, retirement and so on. And that is what our aim is. And we're joined today by Matt McClure, our producer. Matt, what do you say, my friend?

Producer:
I like cookies.

Merrit Strunk:
I like cookies, especially the ones that make you better off financially.

Producer:
That's right. Yeah. Yeah. The cookie can make me in a better financial situation. The I am all for it.

Merrit Strunk:
Yeah. Yeah. Actually, I'm I'm all in favor of cookies as well. Shame on it. Shame on me. But you know, Matt, we've talked about this before, and you know what I'm going to say here? The truth is, for many, many folks in America, and when I say many, many, it's. Yeah, lots of commas and zeros there on the number of people that their retirement may already be broken. They just don't know it yet. And folks, if you're a younger listener and you go, what retirement? Well, you have a retirement is waiting for you that period of time in your future where your working status may fluctuate, you know, you may work part time, you may actually love what you do, but you have the hopefully have the option to to have a work optional lifestyle rather than no other options. Right. A successful retirement gives you options, it gives you quality, those kind of things. And for many people, even even the ones who think they've made it, they've not done the work to know that potentially in the future, at some point their retirement is already broken. So our goal here is to help equip, educate, so that our listeners can ask the good questions. Knowledge is power, and I love it when somebody contacts us and ask the questions Why? Because we've invited them to. We said, you know, we double dog dare you to call us and ask a question.

Merrit Strunk:
And you may think, Oh, it's a simple question. I can figure out, Well, look, it's just a phone call. Call us up and you'll get an unbiased opinion out of us and we'll let you know. If you've never been to our website you can go to RetirementUnbroken.com and you can also give us a call at 858 521 9700 and get from us what we're offering a complimentary retirement unbroken report this is your custom report it'll help clarify what's going on with you. So before we go on a little bit, a little bit more here, I just I got to tell you, it's if you've been watching TV at all, either in the evening or even in the morning and watching any kind of financial show, you would have seen the ads, the incessant ads on Medicare Advantage and Medicare enrollment and all the new versions of ads animated. And you see terrible depictions of seniors that they put up there. And I saw one with it was it was an older lady with giant glasses, and they just showed her more like almost frenetic, like trying to make sense of Medicare. I think I actually I thought that was rather insulting of seniors, you know, But it is the annual enrollment period for for Medicare.

Merrit Strunk:
And it runs through October 15th all the way to December 7th. So you'll see a lot of those things. So we got a less than a month that remains in the year for the enrollment period for people in Medicare. And, you know, if you've got questions about that too, then we'll be happy to give you some feedback on this. So don't hesitate to give us a call today. Okay. So on the show today, what we're going to be covering and arming you and cooking you with is, yeah, we're going to talk a little bit about inflation and what that's done right about this time here. We're coming up to a Thanksgiving and I'm going to share some things with you about that, just to let you know how inflation is impacting you during these holidays. Most importantly here, a topic we're going to talk a. About the D accumulation phase or some people call it the distribution phase of a life and why it's so different than the accumulation years, the years where you're you're building up your nest egg. Now it's time to accumulate or distribute your assets over your lifetime and why it takes a paradigm shift. So we're going to talk about that. We're also going to hit on the number one mistake we see people make when we're preparing for their retirement. And then we're going to give you a cost-cutter idea about how you can kick the IRS out of your plan when you wouldn't it be great to do that real quick here if you've been paying attention And at the time of the recording of the show, here we are in the election.

Merrit Strunk:
I mean, this is this is the election time. The election results have been coming in. And because there was not the expected one sided red wave where the Republicans took over the House as the majority and it was they were expecting a red way, very one sided. Actually, it's come down to just a number of seats, whether or not that majority is going to turn over in the House. And because of that, we've seen the market plunge. The Dow is down 646 points. Based off this, it's almost 2%. The S&P is is down 2%, NASDAQ is down two plus percent, Gold is down, oil is down. And the VIX, the fear index, is up. Why? When the red wave wasn't as one sided as what many predicted it was going to be, why when that didn't happen, would the stock market fall? So ask yourself that the I'm thinking, Matt, maybe you have a different opinion here, but my my, my understanding is the reason why Wall Street does not like this is it could mean that if the Dems do keep the majority, that it's more of the same.

Merrit Strunk:
Many of the policies, laws, taxation, anti-business, all the runaway spending, more of the pain is coming and it may not be a turnaround of these of these policies that have created the down market that we're seeing today and have been seeing this entire year. So that's that's really where it's coming from, is like, you know what? We got more of the same. This wasn't a correction or a referendum per say on those policies. Other social topics took over, evidently. So when we didn't see those results, the market's going, we don't like this because it could create more pain. I would have thought my own personal opinion and I don't like to bring politics into this. This is a financial show. My my personal opinion is, look, what America has been experiencing. There is no one who is paying attention that could say we're in a great spot. This is great. I love paying this much at the pump. I love the inflation and everything costs more everywhere. There's no one that can say that. I think from a rational standpoint and if they do, they're either incredibly financially well off or they're they're stuck under a rock somewhere. Matt, what do you what do you what's your hunch? That's my opinion. But what's what's what's your hunch?

Producer:
You know, I think a lot of it because the polls, especially in the closing days of the election, had been so, you know, showing so much GOP strength in a lot of places. I think the wave was more expected. And then, you know, it was sort of, I guess, a little bit baked in to the market indexes. And again, this is just my guess as well. This is not this is an educated guess. This is not, you know, based on anything else, aside from my own opinion here, but and experience covering these things over the years. But, you know, the markets, like a lot of the time, they like split control in in Washington because that means that nothing too radical can happen in one direction or the other markets like stability and and a sure thing you know.

Merrit Strunk:
Sometimes yeah. If it's going to say the devil you do know or that no no continued policies will go go through or no new policies will go through. Yeah you're right. Sometimes if they know that it's status quo, then they're, you know, they feel a bit of comfort, but they also have things priced in that I know that Wall Street, many of the influencers were saying that a Dem win was going to be bad for the market, and I tend to agree with that because of the policies and runaway spending and deficits and things like that. So this is I think this is what's happening to the market today, which is it's not what they expected. This is it's less of what they expected and this is why it's down and they're waiting for the results to come through. Will there be a majority? Will there not be a majority? So on.

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

Merrit Strunk:
Please go ahead. Deliver that to us.

Producer:
I will. I will. With all of the vigor that I can that I can muster to deliver the quote of the week as I try to do each and every week here. But yeah, so this time around it comes from David Bailey and his words of financial wisdom are this quote To get rich, you have to make money while you sleep.

Merrit Strunk:
I would agree. I would. I would agree. We've had a quote that similar to that I believe that came from Warren Buffett. Something about, you know, making if you want to get rich, you make money while you while you're sleeping as well. So there's a lot going on here. There's a lot going on here. And if you want to find out how you can put that situation or that wisdom there to to work, then give us a call. Please get in touch with us. I've given you the digits. I'll give them to you one more time. It's 858 521 9700 We'd love to talk to you, so please get in touch with us. We'd love to hear from our listeners.

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

Merrit Strunk:
We're getting ready to do Thanksgiving. Can you believe it already? The Jesus not that long ago is like, Can you believe it? It's November already. And now we're coming up to Thanksgiving, a time where we give thanks. Right. And here we've just got a little a little less to be thankful for because food prices are gobbling Thanksgiving budgets. And so in September, there was a research study by the American Farm Bureau, and they announced in that in that article that families can expect to pay record high prices at the grocery store for Turkey. I don't know if you're a turkey guy, Matt, what is your family like to do, turkey or something else?

Producer:
We do turkey all the time. We've kind of gone through phases. I guess we used to do two turkeys because my my brother in law loves turkey with like Cajun seasoning and but everybody else is like, okay, we'll just like the regular roast turkey. So we've done that in the past recently. We've done both like a like a turkey breast and ham as well for Thanksgiving. But yeah, we're kind of like we sort of evolve over time.

Merrit Strunk:
I guess in my family, I think I am the only one that really likes the turkey. And we've done turkey a number of different ways. There's that that's traditional, you know, roasted turkey or, you know, you put it in the oven, there's the fried turkey. We tried the fried turkey. My wife did a smash turkey where you break the backbone and you cook it flat. And actually, that was fabulous. We've done that the last two years. It was absolutely fabulous. It just cooks a better way. And then we've also done ham plenty of other times. I like turkey. I think I'm the only one here. But given Turkey prices, the retail price for fresh, boneless, skinless turkey breasts reached a record high of $6.70 per pound in September. That is 112% higher than the same time, 2021. So when prices were $3.16. So. Wow, 112% higher. So just think about the folks who just voted one way or another. And there is a large percentage of Americans that say, I like 112% higher prices for Turkey. That's what they've said. Just forget who's running or what their say or what the social issues they've said. I vote for 112% higher prices on Turkey. That's what they've said. Right. As well as higher prices at the at the gas tank. There are other things that I mean, we don't just eat turkey and nothing else, Right.

Merrit Strunk:
There's things that play into that. So 32% higher for butter or margarine. Are you kidding me? 32% higher. Flour and prepared flour mixes a whopping 24.2% increase. Wow. Frozen refrigerated bakery products, pies, tarts, turnovers, things like that. 20% increase. A 20% increase in your pie. You know, when this all adds up, people are going to say, how much, how much am I willing to to buy this? Or are we going to have to cut back on Thanksgiving canned fruits? Think about cranberry sauce, 18.6% increase, uncooked poultry, including turkey, you know, 17%. So the chicken in there as well. Uncooked versions, I guess. Frozen and then frozen vegetables, 16%, 16.6%. That's a lot of increases there in that study from the Farm Bureau. That is amazing. So Americans are paying more for everything, including food. Milk is up 15, bread is up 14. Rice is up 13. Meat, poultry, fish, eggs in general, 9%. Fresh fruits up 8.2%. That comes from the Bureau of Labor Statistics. Wow. Everything cost more. And if you live in California, you've got tax on it more. You've got income tax on top of that. That all plays into if you're retired and you've got fixed income coming in or you're just, you know, mainly on Social Security or something that's going to hurt, you're just not going to be able to do some things because at the end of the month, you've spent more for the same stuff, including fuel to drive somewhere.

Merrit Strunk:
So. Let's talk about the accumulation phase of your life, retirement. So it goes like this when you're working and you're younger, your thirties, forties, fifties and your early sixties. Think of it this way. You're walking along with a shopping cart and you're stuffing everything you can into your retirement account. Your 400 1ka403b4 57 Any retirement plan, TSP, stuff like that. You're stuffing the money in there as you go along. And you know, you can take a certain amount of risk, but what happens? You go into the new stage of your life and go. You know, this work and stuff is, you know, for the fish. I think I'm just going to it's time to retire. And some people do it earlier. They're like, I don't want to work anymore. That's a bummer. They call it work for a reason. It's kind of tough. So they go into this new phase in life that's to de accumulation. You're drawing down of your assets. You're no longer in the accumulation phase or the distribution years, as you can describe it, distribution years of your life, which means I have to now manage my assets and distribute them to myself to afford my lifestyle for the rest of my life.

Merrit Strunk:
And if you don't do it well, potentially you could run out of money. So, gosh, it's it's even an understatement for me to utter these words. It's kind of important. And it is a paradigm shift and a lot of people don't seem to get that. Now, I'm going to pay it off here in a second, but a lot of people don't seem to get that. They're doing the same thing in the same way with the same risk as if they were in the accumulation phase. Now that they're in the distribution years, they're retired and they're still using the same methodology or the thinking that brought them to that phase. It's different. It's different and it's different advice. And it could be different allocation and investments and risk exposure and so on. So. It's a process you go through during your retirement where you shift your focus from saving the accumulation to using your assets to generate income, the retirement income that's necessary. Okay, So there is a soaring number of baby boomers entering and approaching retirement, and it's leading to a major shift in focus from this accumulation and retirement savings, de accumulation and retirement income. It makes sense, doesn't it? Right. No more W-2. Right. No more W-2. You're either going to rely on the assets you saved in combination with Social Security and if you're lucky enough, a pension.

Merrit Strunk:
Right. I say lucky enough, because did you work for the military where you get a pension and your Social Security? Did you did you work for the state, the city, municipal? Were you a civil servant? Were you a teacher, firemen, policemen Or then in those situations, you you more often than not get or get a pension. Some of those folks only get a pension. You don't get a pension and Social Security. Military folks do get a pension and Social Security. It's called a covered job. Or they pay into Social Security, too. And it's wonderful when that happens. But when you're a teacher and you don't get Social Security and you've got a pension, it's kind of a big wake up call because they don't really think about it. And then it's time for retirement and they're like, I don't get Social Security. No, you weren't paying taxes into it. You don't. So the problem is most people approaching retirement today are uncertain. I would ask yourself, are you one of those uncertain? Right. How they will manage their retirement assets and generate consistent income. In retirement without without outliving their money. Did you know, Matt, the number one fear of retirees is running out of money during retirement? Yeah, I.

Producer:
Actually saw something even more than death itself. Right? That's the big fear.

Merrit Strunk:
More than death. Death. Fine. I died. Oh, my gosh. What about running out of money and assets? What happens when you run out of money? Well, drive downtown San Diego and look around. We've got a homeless problem. Those people don't have homes because they don't have income. They don't have money. And I've said it before, the happiest people in retirement are those who have a pension because they know the check the bills are going to be paid. There's a check showing up and they're checking account as if they were working still. Right. Of course. Right. It doesn't matter what's going on in the stock market. They've got a check or raving in their checking account. They know they can pay the bills, they can go to the golf course and go the stock market go down. Not really. Wasn't really paying attention. So BlackRock BlackRock is a one of the globe's largest asset manager. I think they manage well over $1,000,000,000,000 in assets. They did a survey recently and they found out that only 36%. Wow. 36% of Americans are confident that they'll have income they need in retirement. That's income, not assets. So while 55% were concerned about outliving their savings and retirement without thoughtful and trusted guidance and planning, this can have dire consequences for the next generation of retirees coming in the next the next shipment of retirees that's happening every single day that are seeking income to sustain a standard of living. Right. How many people say.

Merrit Strunk:
How many people say that, you know, I'm not going to spend the same amount of money in retirement. Right. They say that. But do they desire to do that? How many people would say like, look, if you want to compromise your current standard in living and retirement, you know, raise your hand. I just don't. Why would you want to do that? It's like, No, I want to have as good or better than as good or better than lifestyle in my retirement. So for today's retirees, we're living longer in a historically low interest rate environment that could lead into a gap between what their current savings can generate and what their retirement income needs are in order to live there, their lifestyle that they want. So before we get into an example, a very real example of of a one of our listeners called in, we're going to break here and then we're going to come back and we're going to give an example of a real life person who's in the accumulation phase, has assets and ask some really good questions that probably many of you need to ask. So you want to tune back in right after the break. This is Merrit Strunk, host of The Retirement Unbroken show. And if you've got a chance, if you're near a computer, just go to Retirement Unbroken dot com. Check us out and book some time with us so we can chat. Meet you back after the break.

Producer:
As part of today's show, Retirement Unbroken is available wherever you listen to podcasts and online at retirement unbroken dot com. RetirementUnbroken.com

Producer:
I would climb a new payroll tax could be coming to your state. I'm Matt McClure with a retirement dot radio network powered by AmeriLife.

Alison Hoffman:
We have seen a failure as a country to provide comprehensive insurance for long term care.

Producer:
America has a long term care problem, KNPR reports. 70% of people who turn 65 will need some type of long term care, ranging from in-home care to a full time nursing home facility. And the costs can be astronomical. A gen worth study in 2021 found the median cost for home health was more than $61,000 a year. If you want a private room in a nursing home, the median cost there more than $108,000 annually. And Medicare won't cover the costs.

Alison Hoffman:
Medicare pays for short term post-acute care if somebody's been hospitalized or has other kind of short term medical needs. It doesn't pay for the kinds of things that we think about as long term care.

Producer:
Alison Hoffman is a professor of law and Deputy Dean at the University of Pennsylvania Carey School of Law. She tells me relatively few people in this country have long term care insurance. Washington State was the first in the nation to try to bridge that gap.

Alison Hoffman:
And what Washington state has done is it's done a payroll tax .58 percent, that is for all W-2 workers or full time workers that comes out of the payroll. And then so long as they pay in for a certain number of years, when they have a benefit that they can use for long term care up to a certain amount.

Producer:
But it's not a cure all for the problem.

Alison Hoffman:
It is a little patch. I think the total benefits in Washington state are 36,000 and they increase with inflation over time. But the cost of a nursing home in most states is three times that four over the course of a year. What it is, is the states trying to come up with a tool to fill in some of some of the gaps.

Producer:
Now, states like Pennsylvania, New York and California are looking to Washington's plan to implement their own solutions. Professor Hoffman says taxpayers can opt out of the payroll tax in some cases, such as those who have their own private long term care insurance.

Alison Hoffman:
So why would somebody want to opt out? Well, somebody might want to opt out because they're already contributing dollars towards towards long term care. And they think that that's sufficient. That's enough. But people also might opt out because they don't value it as a form of insurance.

Producer:
So could a program like this be coming to your state? If so, how could it affect your wallet? And what about your own long term care plans for your later years? Those are all important questions to consider as time continues to tick on by With the retirement dot radio network Powered by AmeriLife, I'm Matt McClure.

Merrit Strunk:
All right, Welcome back to the Retirement Unbroken show. This is Merrit Strunk. And we just got through talking about the accumulation versus the accumulation or distribution phase of life, which is commonly known as retirement. And everybody is hopefully going to have retirement. They're going to arrive there. Are you going to be prepared? So here's a great we got a call and an appointment. We talked to one of our listeners on the podcast version of the show and they said, Hey, we'll listen to the podcast all the time. And you're right, we want to ask us some questions here. All right. Tell me a little bit about that. You know and they're in their upper sixties, been retired for a few years taking Social Security and they have a sizable nest egg. And they they said recently they lost a significant amount of money in the market. And in uncovering and unpacking why that might be and kind of understanding what they're in, they were in a 6040 portfolio, a 6040 portfolio. For some of you who may be listening going, I'm unfamiliar with that. And general, 60% equities, 40% bonds. And that's been a traditional kind of allocation approach for many, many retirees. And I want to tell you how that's done. Coming up real soon here. So the key points here, retired, lost, significant. And I want to say we're talking multiple, hundreds of thousands of dollars there in their drawdown stage of life in order to fill the income gap between Social Security and what they need.

Merrit Strunk:
So they've got to draw down a certain amount from their assets and they're in the distribution phase, like I said, and they're using a 6040. So, folks, 6040 and many folks are attracted to a low cost 6040 mutual fund, passively managed portfolio by well known advertising mutual fund companies. Right. And in many cases for younger folks, we like it. We hold the cost down. And it's great for for younger people in their accumulation phase because of the low cost. And when you're younger, you can take a hit from a recession and just brush it off your shoulder going, Hey, I know I got another 30 years, I got another 20 years, I can come out of this recession. That's just fine. I have time on my side, right? And when you're in retirement and you're using a passive portfolio, that's a mutual fund that is really low on the sales expense ratio, like 0.0 something. It's indexed. The reason why there is a very low sales expense ratio is not being managed. It's simply follows the index up and down. So when the market's doing well, hey man, it's great. I'm going to index fund and I'm as high as what the market is. S&p 500, I'm getting every bit of that, maybe even more. But when we're in a blind person, deaf, dumb and blind could make money during that time. It's not hard if you're just writing, you're writing the roller coaster up, but when the roller coaster goes down, you're taking the elevator all the way down with the index.

Merrit Strunk:
So if it goes down 35%, you're going down 35%. You're in the index. That 40% in equities is going to go down. If the 60 part if the I'm sorry, 60%, you're going to go down. If the 40% in bonds is also down, guess what? Nowhere to hide. Nowhere to hide. And you're taking all of it down with the elevator all the way down. So I would say, folks. Is it really low cost mutual fund, passive management portfolio? Is it low cost when it costs you a quarter million dollars? It's not all of a sudden. It's not low cost. It's it actually is super high cost. Right. So be careful. Don't be fooled when it comes to if you're in retirement, you're using a passively managed mutual fund portfolio where you've got a certain percentage in large cap, mid-cap, small cap, international fixed, and it doesn't change much. You know, and what if what if something happens in the world geopolitically? We're we're in a kind of a reality in this world that we're in where we're experiencing some things we haven't seen in a very long time. Right. And is one of these mutual fund companies going to come to you and go, hey, looks like there's a accumulation of tactical nukes on the border of Ukraine. Everybody knows it's been on the news. Everybody knows it. It's been talking about it in news.

Merrit Strunk:
Everybody is aware of it is that low cost mutual fund company that is just basically percentage slots. Are they going to call you and say, hey, we're thinking about you and your and your IRA here and we think that maybe it would be prudent to reduce that allocation now? They're not very likely not going to call you up and do that. That's why there's no management expenses there. Right. So according to a article in Invest Topia dot com, and they were recounting a recent analysis from Bank of America that shows that the traditional 6040 portfolio that we've been talking about. Recently had annual returns that sank 34% this year. The worst in a century. A in a 100 years. It's never done that badly. So if you're one of the retirees who have a 6040 on one of these low cost mutual fund index fund portfolios, I don't even need to tell you that. You already know that. Isn't it time to take a smart review, get a retirement unbroken analysis as custom use so that you can see? Well, is it is it time for me to take a better approach to this, a better depth? Ask the right questions. Information is power with this. So if you just ask questions and get answers, you're going to be likely better off now that you've got that in your gray matter. So. If you're in your in your distribution years, we suggest. That potentially a better way to go about this is have greater diversification by using risk tiered portfolios that have active management and tactically managed buckets of your investment, which can move to protect against wealth loss and events like that we are faced with in our world right now.

Merrit Strunk:
Can I say that again? Instead of a passively structured percentage programmatic type of asset allocation that has been in existence for over 30, 40 years. Things have evolved. And if you're in your distribution years and your retirement, listen, there's a better way to review and to put together risk adjusted portfolios that use active management and tactically manage buckets of money so that you can have some guard or some downside protection against wealth loss. Okay. And then I would also say that in a successful retirement allocation, that having guaranteed income that can increase over your lifetime, you can't argue about it. If I if I said, look, we're going to we're going to have risk adjusted bucket buckets, they're going to guard against wealth loss. You're going to get reasonable rates of return. And if you do this, we're going to be in good shape and you're going to have increased guaranteed income over your lifetime with the potential of increasing income over your lifetime. How could you argue against that? And as we go through the planning checklist and like, well, if somebody gets sick, are we okay if the economy goes down and are we going to be okay if the stock market crashes are going to be okay? If somebody dies, we're going to be okay.

Merrit Strunk:
And if we go through those things and try to do the best we can to fill in those checkboxes, isn't that the right thing to do? Doesn't that make sense? It does make sense. It's very hard to argue against that rational situation. Okay. So in preparing for the show, I found an article by Kiplinger's dot com. It's real. It's a recent article. Right. And we're putting it putting it up on screen if you're watching the the video portion of the show. The headline says, Without increasing income, there is no retirement. Kind of makes sense based on what I was just reviewing. Without increasing income, there is no retirement and this is Kiplinger's dot com and their retirement planning section and below that says your retirement security boils down to how much sustainable cash flow your retirement assets can safely and reliably produce. Make sense right. Um, cash flow is a lifeblood of financial security. Would you agree with that? Happiness and freedom. And if you run out of this or have it reduced, your world can be turned upside down. Just just ask anybody that all of a sudden had their retirement income reduced. That's a reduced lifestyle. You've got to give up on stuff. So, for example, kind of like what I was mentioning earlier in the show. The difference between homeless people and those who are not homeless to a large degree, financially speaking, is that usually a homeless person doesn't have enough cash flow to pay for housing.

Merrit Strunk:
Then then a person with a home does. I mean, it makes sense at the most basic level. So the accumulation solution. You know, was was kind of looked at by the research from the Stanford Center on Longevity. Stanford Center on Longevity. They looked at ways that investors can potentially assess. And combine a mixture of investments and insurance products against different retirement income goals. They evaluated systematic withdraw plans for investment portfolios and annuities against the following criteria. That is amount of income, access of savings, pre and post retirement protection, inflation protection and lifetime guarantee. And one of the key findings from their research, Remember the Stanford? From the research was that from a purely financial perspective, that having an annuity in place often provides a higher yearly income as compared to systematically withdrawing from investment assets. Interesting. So. So you could make an argument. Why do why is there so much badmouthing about an annuity out there? Look, I'm unapologetic about it. I have one. I have put in a private pension for myself. I did not work for the military or the state or the government or anything else. Like I didn't have one. So what makes sense for me to do? Put in a pension for increasing income for the rest of my life and for my spouses as well as as well as with buckets that are risk adjusted and can grow and outpace inflation potentially with investments. So if you're listening to this, if you're in the retirement red zone, what's the retirement red zone? The red zone is if you're either within five years of retirement or retired in the last five years, give us a call so we can test the strength of your plan.

Merrit Strunk:
And this this this is complimentary. We'll stress test it. And if it works, I'll be the first one to tell you. Good job. It works. If there's better ways to to do things and that you might consider, we'll suggest those and we'll we'll educate you on those. You will decide whether it's right for you. So in order to do this, you can request our retirement unbroken custom analysis. Just call and say, I want that retirement unbroken custom analysis report that will be just on your specific situation. It's really easy and it doesn't cost you anything. Okay, That brings us to the number one mistake people make when planning for retirement. Too many people retire, believe that their retirement is about accumulation and saving enough money to reach one big number. You know, if that number is $10 Million, I'm pretty sure you're going to be off base depending on what you spend every year. But if you're if that magic number is much more reasonable and you think you've got to go for it, let's say it's $1.5 million or $1.7 million or 2 million or 3 million. Don't be fooled about that. It depends on inflation. It depends on taxation spending levels. Things like that. And. It. A lot of people think that their taxes are going to go down and retirement.

Merrit Strunk:
Right. And in reality, if I ask you if taxes are going to go up, you might say, of course taxes are going to go up. They have to go up based on what's going on with our deficit and spending. Of our social programs, Medicare, Social Security, things like that. That money's got to come from somewhere and it's going to come from the taxpayers. So if that tax goes up in your retirement, all of a sudden you're taxed more and you're having to pay more taxes on that money that has yet to be taxed if you're in that situation. We recommend you start focusing more on the strength of your income plan. You just heard several articles of research and Stanford and Kiplinger's. And a bank. Bank of America. You just heard all these names of people studying these things. And it really does. The success of retirement for for most people comes down to. What level of guaranteed income do you have in your plan? That can withstand the test of time. Lifestyle is more about income. Then assets. Assets can be divorced. They can be stolen, swindled. They can be lost in the stock market If you've got income and you know it's coming in every day, boy. Isn't that a confident, comfortable way to go through retirement and that the stress of having the. Portfolio perform to a certain level has been reduced. Okay. So those are big, big things to take away from here.

Merrit Strunk:
So ask yourself, is there a way that you can create a better sense of confidence about income in retirement? And also, given what's going on here, you know, here we are. The stock market is is down significantly because of the political election situation. And if you've already lost year to date, 25% or you prepared for another. Another 20% potentially. Is there a recession coming? Should you be taking prudent moves? Should you be considering other vehicles? Is it prudent? Is it wise? Does it work for you? There's pros and cons to all these things and it really just you get the answer of. It depends. Let's take a look. So it's very important for your specific situation. Okay. On occasion we talk about annuities. We actually mention it today by way of a guarantee of income and increasing income. There are many, many, many people that were sold a variable annuity and I say sold. They didn't buy it. They were sold a variable annuity, in my opinion. I have looked at many variable annuity contracts over our time of serving clients, and I can only remember one time where it looked like I could say you might be well advised to keep this from the guarantee standpoint. And that was the one time I can remember doing that. Why? There's a lot of things that they're complicated, but they're the problem is I call them fee monsters. You ever heard that phrase Variable annuities are fee monsters.

Merrit Strunk:
The number of fees that add up end up having parasitic loss against the gain in the separate account. And many times that separate account is not being managed like it should be. Right. That was a lot to unpack right there. I just said a lot of things. And again, this is my opinion. There are a lot of advisors, if forever, ever, ever out there. We're selling variable annuities. The reason why they did that, they made a commission on that. And they make a fee on an ongoing basis. That's the truth, folks. According to Merrit, and I've taken a look at a lot of them, if you have a variable annuity, there may be a way that you can gracefully exit that so that you can get a better situation for you and your life. So if you're listening and you have one of those and you don't know whether that's working for you or not, let's get an unbiased opinion. Call us and we'll do our very best to give you an unbiased opinion about that. There are things like Spears. We did a very innovative thing in a repositioning an IRA that was in a variable that wasn't working, putting it into a spear so that we can pay long term care premiums for one of our clients. And praise Lord, that has been a godsend for our clients right there. Absolute godsend. And when I and I talked to many experts around the industry trying to find a solution to this exact equation, and we came up with this on our own and it was it was great.

Merrit Strunk:
Now, again, something like that depends on your situation. Spears are something that will provide income benefits to you within 30 days of your investment in that. I don't typically like those for that type of benefit because it always is pretty much always is a disappointing rate of return based off the lack of time in that in that solution. So it does work for people who cannot manage their money and they need income. It can work in a GAAP income situation, which would essentially be a trade off so that you get more income. If we were to wait longer with other vehicles we've used that. We believe that fixed indexed annuities are the right annuity. However, there are many ones that I don't care for. There are good ones and bad ones, just like cars. Right. So you got a good car and then the car that's not so good. So it's important to know which ones are right, which ones have increasing income. There are they're a bit complicated and they need to be explained. So there's pros and cons, but they can really, really help fight inflation with rising cost of living over your lifetime. So with those, it's a question of are you concerned about outliving your wealth and your income? And would a income solution over your lifetime be something that would be right for you?

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

Merrit Strunk:
Implement a Roth conversion and reduce your tax risk or your tax risk exposure, Right. We know saving on taxes is a good thing, and you can do this by deleting or removing the IRS as your partner out of your retirement years. Right. It's likely the largest saving effort you can implement for retirement. If you said all of a sudden, I don't. These aren't exposed to taxation and you're going to save it over your lifetime. Boy, that's going to be big, a big payoff. So Roth IRAs are invested with after tax dollars. You pay the tax, now invest it. And then all the interest, all the dividends, all the capital appreciation comes out free for the rest of your life under current law. So qualified withdrawals from Roth IRAs, tax free growth within the account, tax free. I always say I wish I give a Roth IRAs away as Christmas present. So, Matt. Sorry, man. I wish I could give it away. Roth IRA for Christmas. You've heard me say it before. A Roth ladder conversion, which is strategic conversions over a period of time of of funds that were in an IRA. And you move them from left pocket, traditional IRA to right pocket Roth IRA over a period of multiple years. Say you do that over five years or so, depends what the right strategy is in hopes of reducing the amount of taxes you will pay, you know, for each annual conversion. So if laddered correctly, IRA owners can keep their tax rate at or below 24% and dramatically reduce the taxes, they will pay over 30 plus years of retirement. So that could be a solution for you. You know, we talk about it. Some people take us up on it, some people don't. And, you know, taking action is is the one thing people have to do. They have to call much like the caller that that reached out, that had lost sizable amount of money. They took action. They're asking questions. So let me ask you this. Do you love the IRS? But I'm sure everybody screamed.

Merrit Strunk:
Remember that check? Remember that check you wrote? So do you love the IRS? So, so much so that you're willing to give them more of your retirement dollars than you would give? Get this to your own children. Right. So we're coming up to the end of this thing here. So please don't underestimate the importance of having a tax plan for your retirement, which is how can I pay less taxes over retirement and get in touch with us so we can start helping you with your own plan today, getting answers to these such critical questions? Well, you know, I hope that you got a lot out of this day. There was a lot on the plate today. Turkey gravy, dressing, sweet potatoes, fresh snap, green beans and my famous spicy cranberry sauce. You know, there was a lot on that plate of education and morals that you can take away from a lot of things. You can act on a lot of questions that were brought up today. And so if you are unclear, if you are currently not clear that you're in the broken retirement club and you'd like to join the retirement unbroken club, the first thing to do is take action. Go to our website Retirement Unbroken dot com RetirementUnbroken.com Or call us at 858 521 9700. My name is Merrit Strunk and I am the host of the Retirement Unbroken Show. And we're glad you joined us here today and we look forward to our next show with you and the Unbroken Nation.

Producer:
Thanks for listening to your Retirement Unbroken. You deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard-earned assets to schedule your complimentary no-obligation consultation with 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 0L7510. 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 Retirement Unbroken dot com. RetirementUnbroken.com

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

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