12.17.22: Audio automatically transcribed by Sonix

12.17.22: 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 Financial Freedom with your host Safe Money Bob. Get set for a full hour of financial information and economic news you can't afford to miss. Bob 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 Safe Money Bob.

Producer:
Hello and welcome to this week's edition of Financial Freedom with Safe Money Bob, thanks for making us a part of your weekend, however, you may be listening to today's show. All right. Coming up on today's program, as we inch closer to the holidays, we'll give you a financial checklist for 2023. Plus, what are RMDs and how can you avoid them? We'll break it all down. Let's give a warm welcome to the man of the hour himself. Safe Money Bob.

Bob Loss:
So what are you doing? How are you doing, Jim?

Producer:
All right. Well, Bob, Will Rogers was an American performer, actor and social commentator. You may remember him. He's known as Oklahoma's favorite son. Maybe it's ringing a bell now as an entertainer and humorist. He traveled around the world three times, made 71 films, and wrote more than 4000 nationally syndicated newspaper columns. By the mid 1930s, Rogers was hugely popular in the United States for his leading political wit and was the highest paid of Hollywood film stars. Go figure. Right? Will Rogers Quite a resume. And he is the centerpiece of this week's Quote of the Week. And now.

Producer:
For some financial wisdom, it's time for the Quote of the week.

Producer:
And get our quote of the week from Will Rogers. He said, quote, The difference between death and taxes doesn't get worse every time Congress meets. Go figure. We had to somehow shoehorn in some politics into this edition of Financial Freedom with Safe Money Bob.

Bob Loss:
Of course. Yeah. I mean, with the you know, the amount of money that's being spent and now you're talking about raising the debt ceiling so that the government doesn't shut down for another year. Know most likely taxes are going to go up, which we've been talking about over the last few months probably. So, yeah, it doesn't that doesn't get worse, but the taxes go up.

Producer:
All right. Well, hey, do you know what percentage of your portfolio is bonds? We have found that too many people don't know the percentage of their portfolio that is bonds, and they don't know what bonds they currently hold. Did you know that in 2022 this year happened to be the worst in history of bonds, according to The New York Times? Did you know that bonds can take up 40% or more of a portfolio for many retirees and pre retirees? So please get in touch and talk with us about bond replacement, where we use fixed indexed annuities again, using fixed indexed annuities to delete fees, protect your money and guarantee you an additional income stream that you will never outlive. So again contact Bob today at SafeMoneyBob.com. 2022 is winding down and Bob has some important financial reminders as we reach the end of this year.

Bob Loss:
Sure Jim. So we're getting close to the end here. We got about two weeks. You know, everybody realizes that Social Security is going up again, a total of 14.6 the last two years. Percentage wise, we had a 5.9% just under six increase last year, and we're getting 8.7 for next year. So that's about 14.6% as the number states. It's also going to be some new tax brackets. You can find those IRS.gov. Just check it out. If your income has changed substantially up or down, you could be in a different situation. It's not a lot of change, but it's just because of the money, the inflation and so forth. Having brackets changed in particularly the amounts where you start paying a higher rate. Let's see here. Yes. So basically, you're looking at the usual the bottom. The bottom, obviously is married, filing joint just because I'm married and I file jointly. But now you're looking at 10% tax on the first 22 grand. Then after that, you pay your 10,200 bucks, hence 10% on the 22,000, and you're going to pay 12% on any income between 22,008, 89,004 50. Then from there, you're paying your. 10,204 plus 22%. As you see, the bracket percentage goes up as you go up the brackets and that reaches up to one 9750. I believe the top last year was one 8180 and change maybe 181 will say and so on. So you'll see that the amount you have to hit for the bracket to then go up to a different tax rate, which would be higher, has been increased slightly. That's sort of the gist of some of the things to think about going to next year. You know, maybe this year is a good time to take care of some taxes that you might owe next year, such as like Roth conversions like we talked about. But I'm working on myself. I. I pretty much on that. That's what I've got on that front. As far as Social Security, as well as the increased tax brackets. Jim.

Producer:
All right. Great job, Bob. Coming up, saying goodbyes to RMDs and kicking the IRS out of your retirement plan. That's up ahead. And if you haven't done so already, please go ahead and subscribe to Financial Freedom, the podcast, to listen to Bob and myself anytime, anywhere, Apple, Google, Spotify, or of course, wherever you get your podcasts. 107.3 WBCB Financial Freedom with Safe Money Bob we'll be right back.

Ford Stokes:
Chapter 15. Bond replacement with fixed indexed Annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed index annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. And my firm, Active Wealth Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We'll talk about some reasons why you should consider replacing your bonds with annuities. First, here's some information on the history of bonds in the United States. Historical bond volatility. The 1900 saw two secular bear and bull markets in US. Fixed income inflation peaked at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The US government kept bond yields artificially low until 1951. The long term bond yields were at 1.9% in 1951. They climbed to nearly 15% in 1981. In the 1970s. Globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created.

Ford Stokes:
Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15% to 7% by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold. See Chart 15.1 To see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate, risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows. As of May 24th, 2020, the ten year Treasury note was yielding 0.64%, and the 30 year Treasury bond was at 1.27%.

Ford Stokes:
Reinvestment risk of Bonds. This is the likelihood that an investment's cash flows will earn less in a new security. For example, an investor buys a ten year, 100,000 Treasury note with an interest rate of 6%. They expect it to earn 6000 a year. At the end of the term, interest rates are 4%. If the investor buys another ten year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market Risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue. But the correct asset allocation strategy can make a big difference. Unsystematic Market risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business.

Ford Stokes:
This risk. There are two types of risk, internal and external. Internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you are actually paying. Standard and Poor's estimates of bond markups is 0.85% of the value for corporate bonds and 1.21% for municipal bonds. However, markups can be as high as 5%, up to $50 per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss, as we discussed above. Annuities will provide you with an income you can never outlive.

Producer:
107.3 WBCB Financial Freedom with Safe Money Bob Coming up, don't forget our financial checklist to start the new year. We'll explain a little bit. And hey, if you haven't done so already, reach out to Bob. I keep saying that over and over again, but again, he can really help you Safe Money Bob, one of the most genuine guys that I know. 908 359 2861. Or go to the website SafeMoneyBob.com And see how Bob can help you reach your Financial Freedom. Okay Bob, let's discuss RDMs required minimum distributions, very pertinent information as we close out. 2022.

Bob Loss:
Absolutely. Jim. So for those, I believe everybody's aware of this. So the government requires you to take money at some point from your qualified plans. They obviously give you a tax break when you're depositing the money into the plans, whether it be IRA 401k403b4 50 7a7 37 300 max, whatever, whatever they want to call it. So RMDs as they're known from employer based retirement plans and traditional IRA investment accounts, we're generally due on the 31st of the year. However, when you're 72 or older, which is the new age, because of the Secure Act to take RMDs versus 70 and one half or the following April, when you do turn 72, you're able to pay take that distribution in the following year. So if I turn 72 this year, I could take it coming into April. But my tax time by tax day of 23, you know, like I said, there's the exception for the end of the year. The only time in your life that you cannot you do not have to take your RMD is the first one you take, you get to you get to take it the following April of the year you turn 72. And that's really the only exception. Congress basically decided they determined it would give people a three month grace period on their first RMD. But you have to take another one the same year. So you'd have to once you start your RMDs and we can help you with your distributions in an efficient way.

Bob Loss:
You've just got to call me at 983592861 and leave a message and someone will set up call up for us or go to save money Bob and click on a calendar and pick a time to talk with me. This is a key to and I've spoken about this in previous shows. If you can take your qualified money and use that money while deferring your Social Security, assuming you're healthy and it makes sense based on your situation, your Social Security benefits are going to grow once you hit full retirement age, generally around 66 to 67 years old at this point for most of us, And it's guaranteed to grow your benefits going to grow. And what you're doing is you're you're lowering your potential RMD that you'd have to take when you get older and you're basically living off of the money that you're going to pay tax on anyway. But by doing so, you will potentially get your Social Security benefit to be almost, if not totally a tax free benefit because you're required. Minimum distribution would be low enough while still having your bills in order and your budget in order and living the way you want and potentially leaving a legacy and covering for any kind of long term care situation. Here's an interesting tidbit, and I kind of was shocked at this, but RMDs are based on life expectancy.

Bob Loss:
That's total knowledge. No, about that. But example, for age 72, someone lives to age 72 or 72. Right now, the average person is expected to live another 27.4 years, which is pretty staggering. So think about it like that means your money has to last until you're 99 years old under the study. Again, that's not everybody is going to live to 99. Some people might live to 80, 80 to 84, 78. But this is why you want to have a plan so that you don't run out of money. You mitigate taxes, you mitigate risk, you mitigate fees because your money's got to last as long as you do. And hopefully there's more than that. So when you when it outlasts you potentially so that you can leave a legacy and we can work on that as well. So if you don't take here's a big power tip, but this is pretty important. People don't realize. So if you don't take any distributions, you just say, heck with it, I don't want to do it, or you don't take one that's large enough. What happens is you may pay tax at 50% penalty or excise tax on top of the regular tax on distributions as required that you either didn't take enough of in that particular year or you didn't take any. Ideally, what you want to do is say it's part of our segment and segment two here, another portion of it six.

Bob Loss:
You want to try to say goodbye to require minimum distributions or RMDs and try to kick the IRS out of your retirement plan as I've spoken over the last few months. And again, thanks for listening everyone. You know Mike my. I plan, I guess we'll say my plan, my goal, my strategy for my family and my clients, where I can do this has been to make as much of their money tax free when they get older. Having access to the money, protecting their money, growing their money, keeping the fees down, or eliminate them trying to control the taxes now and later. Cpas tend to want to mitigate tax now on the on the seed and you pay tax later on the flower with this hole the tax brackets will be lower. Your income will be lower. Obviously, what we've seen is that's not necessarily going to be the case. And I believe that most of you would think most of you probably believe that the taxes will be higher in the future. I know I do. So what you want to do is take as much of your retirement money and become more of the owner of it and not the minority owner of it. Try to be the majority owner of it and make your partner own less of that or eliminate that partner.

Bob Loss:
So potential future rate hikes. What you want to do is wash your money, you want to wash it through distributions and maybe you pay tax on and put into high cash value, properly designed life insurance for a future tax free income while creating a legacy and an emergency fund outside of your bank money. You can always just do a regular Roth conversion. Still pay tax on it. If you're over 59 and one half, your tax would be the same. Whether you do a Roth conversion or start funding and properly design overfunded life insurance policy for retirement income that would be tax free as a supplement also provides the living benefits potentially for long term care expenses and also potentially leaves a legacy if in force when you pass. And you also have different buckets like if you can't get there, if we can't get you there, we have no qualified money. Your 41k isn't zero. It isn't all being converted to a Roth IRA. You want to have different buckets. So maybe you have the the the money sitting in the market, a percentage of it in growth that's still in the IRA or for one K that's qualified. And then maybe you have a Roth, maybe you have a Roth as well. Maybe you have life insurance like me as well. And your savings, your CD's, maybe your real estate, maybe you have an income property, you can have multiple buckets.

Bob Loss:
It's great to have multiple, multiple buckets. You want to just have one thing and one thing only. So what if what happens to that one thing? Something, something negative occurs, Then you're kind of stuck between a rock and a hard place. Um, so basically you probably want to invest or be interested in investing in tax free income. Instruments. Again, we talked about the Roth. There are so many annuities out there that can provide guaranteed income. You can ladder them, You can have some that grow, some that pay your money over a certain period of time. With the interest rates being as high as they are now, those options look very attractive. So again, if you can avoid paying ordinary income taxes when you get older and when you're taking income when you're on a fixed income, why not try to do that? So that would be something that we can truly help you with. Again, I do it for myself. I've been doing it for 30 some years, this type of concept for myself and my clients. So please don't hesitate. You have nothing to lose. You have. It doesn't cost you anything. Call 908 359 2861 and set up a call with one of my associates when they call you back or go to SafeMoneyBob.com, set up a time and let's see if we can get you tax free versus taxable.

Producer:
All right, Bob, great information there. That was a lot in abundance of information. And again, if you have any questions about what Bob just disseminated or just any questions in general about how to reach your Financial Freedom or you want to work with Bob, visit SafeMoneyBob.com your financial checklist for 2023 that's coming up 107.3 BCB. We'll be right back.

Producer:
Helping bring you one step closer to Financial Freedom. You're listening to Financial Freedom with Safe Money Bob.

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

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

Producer:
That from news four Jax. The number two tip from Investopedia is to make your own naughty or nice list. In other words, if you're shopping list includes more than five people outside your immediate family, start cutting it, then bake cookies or other treats to give to those who didn't make the cut. That way you spread holiday cheer without breaking the budget and you don't seem like Scrooge Humbug. Other bits of advice from Investopedia include being realistic about your budget, collecting coupons or discount codes and organizing group volunteering instead of holiday parties, Ferguson says. One thing you should not overlook is getting the kids involved.

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

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

Ford Stokes:
Chapter four Financial Reserve Requirements. Annuity has a 100% reserve requirement and is greater than the FDIC insured bank reserve requirement of 3 to 10%. Big idea Annuities are required to reserve 100% of your investment. Banks are only required to reserve 3 to 10%. Having a 100% reserve on your money will help you sleep more soundly at night knowing that your money is protected. Did you know that the Federal and state financial reserve requirement for annuity products is 100%? Did you also know that the FDIC banking regulation requirements are just 3 to 10% of deposits? I prefer investing in financial products that have a 100% financial reserve myself. Quite literally, the requirement for annuity companies to reserve money on the policy premiums paid are at least ten x the banking deposit reserve required by the FDIC. In the six years after the stock market crash in 1929, 60% of all US banks closed their doors and only 40% of those banks ever reopened. 100% of reserve life insurance and annuity companies didn't fail or close. That is a remarkable historical fact. That's a wow. Also, in every US state, there is some form of Annuity Guaranty Association where the licensed annuity companies operating within the state will cover the payout of annuity policies as a collective for any failed annuity company within the state.

Ford Stokes:
State annuity guarantee associations prohibit advertising them. Here's how annuity guarantee associations work. Guarantee associations are funded by assessments levied against member insurance companies that help pay claims. When a member company fails, the funds are combined with the failed company's assets to pay claims up to statutory limits. However, the coverage may not be necessary because often when an insurance company becomes insolvent, the company's contracts are purchased by other insurance companies, so customers still have the same insurance and annuity contracts worth the same amount of money only from different companies to insure you receive all of your annuity benefits. It's a good idea to investigate the ratings of the issuing insurance company before making an annuity purchase. If you plan on purchasing annuities worth more than your state guarantee association limits, you may want to purchase multi level annuities from different companies without exceeding the guarantee limits on a single annuity. Most annuity state guarantee association limits per annuity policy are equal to the 250,000 per bank account or bank CD or money market account that the FDIC insurance coverage delivers to the account holder. I see the Annuity Guaranty Associations as a great extra stopgap insurance for my client's annuity policies.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty, and how it all could affect your future in retirement? Then tune in to Financial Freedom with Safe Money Bob, to learn how you can protect and grow your hard-earned money. Financial Freedom Weekends at 8 a.m. right here on WBCB. I AM 1490 and 107.3 FM. Protect your hard earned money today and schedule a free consultation now at SafeMoneyBob.com. You're listening to Financial freedom with safe money Bob to schedule your free no obligation consultation visit SafeMoneyBob.com.

Producer:
Welcome back to Financial Freedom with safe money Bob 107.3 WBCB And a reminder to listen to our show of course every Saturday and Sunday at 8:00 AM right here on 107.3 WB BC and to listen to the show any time in podcast form via Apple, Google, Spotify or wherever you get your podcasts. The 12 Days of Christmas the subject of today's inflation demonstration.

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

Bob Loss:
Thanks, Jim. So the PNC Christmas Price Index is an annual tradition which shows the current cost for one set of each of gifts given in the song The 12 Days of Christmas. Is similar to the Consumer Price Index, which measures the changing prices of goods and services like housing. We talked about housing, food, clothing, transportation and reflect spending habits of the average American now. Obviously, this is going to be tiered towards holiday spending. So it's a fun way to measure consumer spending and trends in the economy. So even if the pipers pipe or the piece of land didn't make your gift list this year, you can still learn a lot by checking out why their prices have increased or decreased over the years. So interesting fact. And again, while these facts are pretty interesting to me, too, when I'm seeing them and we're gathering them before the show. So almost 34% of American households will buy a real or fake Christmas tree. Collectively, that is $4.19 billion with an average of 8564. Real tree rounded up a penny. In $122.60 per artificial tree. That's incredible. I mean, think about that. It's a lot of money spent on Christmas trees, whether it be let's think about the live ones. You got to get rid of them. You got to burn them, the town takes them. And all the money that people are spending on the artificial trees as well. Fortunately for us, ours is hung in there for a while and we're all allergic to you know, I grew up on a farm growing up, you know, when I was young.

Bob Loss:
We all have allergies, so we've been able to somehow keep our artificial tree working for us and. We've been lucky that way we are going to keep buying them and so forth. So on top of the fact you've got the Christmas tree cost right, whether it be live or artificial, we went over last week. I'll recap a little bit just to elaborate. So everything we're buying, whether it be our holiday meal, going out for a holiday meal, even if you're cooking your holiday meal, you can save money by buying things at a discount on sale, what have you. From the meal standpoint, you could have bought. Other ways to save on some of the inflation, on even the holiday spending, buying gifts when the shipping is free. The Black Friday. The Cyber Monday. Even buying things during the year. My wife Beverly, does a great job of this. She will buy gifts and she did this all while the kids were growing up. She would buy gifts steadily, sporadically here and there from winter, spring, summer fall. You know, when things are on sale, things we knew we were going to they would like or need, because even though it's something they need, it could still be a holiday gift, right? Because they don't have it. So that's some of the things we did while we were raising our kids and they were growing up to save on some of our expenses when it came to the holidays and definitely bringing dishes, bring in something if you're great at pies, making pies, if you're great at cookies, making cookies, because some of these things that you're going to eat while you're all gathered together with your family and friends, sometimes you can you can definitely save a good chunk of change when it comes to baking.

Bob Loss:
Baking for sure saves a lot of money. And then when you go out, as you can see, I don't know if you've been out dining out. I have on occasion. And I can see that the the meals that we're buying now. When we go out, especially if it's for an impromptu holiday dinner, say with my siblings or even take out is higher in delivery, It's higher than it was. So if you can make things, gifts, the food, still enjoy that you're doing it and enjoying the fact that people like what you made and what you made to eat. What you made is a gift and a gift of your time. Spending time with people that doesn't that doesn't have a cost to it. There's no inflation on time. So think of those things when you're trying to give something something give somebody something to do. You know, they're going to appreciate, you know, if they came from the heart.

Producer:
All right, Bob, great information there. Your financial checklist for 2023. That's next. This is Financial Freedom. .

Ford Stokes:
Chapter three. Famous people who invested a significant amount of their hard earned wealth in annuities. Big idea. Annuities are for everyone. Even if you're not worried about outliving your wealth. Annuities are safer for your money than investing in stocks or bonds or simply not investing at all. Babe Ruth, known as the Sultan of SWAT. Babe Ruth came into his glory days during the Roaring Twenties, and his manager was worried that he was blowing through all of his money without putting any of it away. He introduced Babe to an insurance agent from the Equitable Insurance Company, now equitable from 1923 to 1929. The slugger contributed more than half of his salary annually, purchasing between 35,050 thousand worth of annuities each year. The Great Depression hit the country hard. In October of 1929, Babe Ruth was forced to retire from baseball in 1935 due to health reasons. He was unemployed during the worst time in history. But Babe Ruth had his income annuity. It's been reported that he received an income of $17,500 a year, which would translate into an annual salary of more than 290,000 in today's dollars. His famous quote still resonates today. He said, I may take risks in life, but I will never risk my money. I use annuities and I never have to worry about my money. Steve Young. Steve Young was signed out of Brigham Young University into a $40 million contract with the USFL. That was the headline, at least in reality. Young was given an annuity that would pay out something like $40 Million over the 50 years that followed.

Ford Stokes:
Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either young or his agent. The annuity payments have lasted longer than the league, and it's safe to say that he's made more money than probably anyone else involved with the league. To be fair, it couldn't have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic. In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company with a staggering number of pro athletes going broke after they retire. It's refreshing to read stories about players who made smart financial choices. Shaquille O'Neal. One player who's used annuities to his advantage is retired star Shaquille O'Neal, or his 19 year career. He generated $292 million in total compensation. In retirement, he is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward. Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending errors. Allen Iverson. Nba player Allen Iverson earned $200 Million during his.

Ford Stokes:
$155 Million in salary and 40 to $50 Million in endorsement deals. Iverson ended up going bankrupt because of his overly lavish lifestyle. In a December 2012 court filing. Iverson told the court that his monthly income was $62,500, but his expenses were 360,000. Luckily for Iverson, Reebok saved him from becoming destitute by paying him an annuity worth $2.3 million in 2001. Iverson made a very smart decision that would ultimately save him. He signed a unique endorsement deal with Reebok. Not only will Reebok pay Iverson 800,000 a year for life, they set aside a $32 Million trust fund that he can begin accessing when he turns 55 years old in 2030. Since he divorced his wife in 2013, he will receive half of the trust. Another way that Iverson will be able to protect himself against future bankruptcy is his access to the NBA pension. He is eligible for another 8000 a month. The lump sum of this pension is between 1.5 and $1.8 million. Most pensions are set up with single premium immediate annuities. Benjamin Franklin. When Benjamin Franklin died, he requested that the 2000 sterling he earned as the governor of Pennsylvania from 1785 to 1788 be divided equally between Boston and Pennsylvania. He wanted the money to be dispersed as a legacy 200 years later in the spring of 1990. The balance in the Philadelphia account was valued at approximately $2 million, and the balance in the Boston Trust was about $4.5 million.

Ford Stokes:
This was sometimes called Franklin's IRA. The money in the Boston Trust was invested using a new take on an old idea the annuity using a tax deferred index variety. The money was able to benefit from exposure to stock market growth without stock market loss. This allowed the trustees of the Franklin Institute in Boston to turn an estimated $4,400 into 4.5 million, even while it was paying out an income for 200 years. Beethoven. The social luminaries of Vienna, wanted to keep Ludwig van Beethoven from leaving their country. And so in 1809, two princes and an archduke guarantee the musician a generous annuity. All he had to do was stay in Vienna and compose and perform his music. His benefactors have supposedly been quoted as saying something along the lines of only a man free of worries can create with such genius. Interestingly enough, Vienna also saw its time of economic downturn, and one of the annuities guarantors tried to stop paying Beethoven, claiming financial hardship. Beethoven sued, won and continued to receive his annuity payments. Perhaps this is what inspired the literary genius of Jane Austen, whose character Fanny observes in Sense and Sensibility. People always live forever when there is an annuity to be paid. An annuity is serious business. It comes over and over every year and there is no getting rid of it.

Producer:
Welcome back to Financial Freedom with Safe Money Bob. And if you missed any part of today's show, subscribe to the program in podcast form Apple, Google, Spotify, or wherever you get your podcasts. And hey, be sure to listen to the show on both Saturdays and Sundays at 8:00 AM right here on 107.3 WB CB. It's this Week in History. This Week in History. December 16th. On this date in 1962, American football defensive tackle William Perry was born. He was nicknamed the Refrigerator. Because of his imposing size. Perry stood at 6 to £335 and went on to win the Super Bowl. Super Bowl 20 as a member of the 1985 Chicago Bears and recorded 29 and one half sacks in his career. Bob, I know you as a Packers fan, certainly know a lot about William Perry.

Bob Loss:
Oh, my goodness. Yes. So back when he played and he won the Super Bowl, Green Bay was terrible. They were terrible. So. Here's a tidbit. I don't know if anybody remembers this, but Walter Payton, I believe, did not score a touchdown in that Super Bowl, but the fridge did. He actually had them both, I think, in the backfield. I think they were together and they hand it off to the fridge and everybody figured the fridge would just plough through and let Walter score behind him. But I believe they hung, they handed it to the fridge and he went in and if memory serves, I was in college at that point freshman year I think it was, yeah, freshman year, watching my little black and white TV. He, he scored in Walter didn't it, if memory serves, which is kind of a it was bittersweet because I mean he has a Packer fan. I'm not a fan of the Bears, but I was a fan of sweetness.

Producer:
Well, also on this date in history, December 17th, this week, 1903, the first ever airplane takes flight. Orville and Wilbur Wright are the pilots behind the first successful flight in history. Orville piloted the gasoline powered, propeller driven biplane, which stayed afloat for 12 seconds and covered 120 feet on its first foray into the sky. On the pop culture side of things. On this date in 1989, television and pop culture hit The Simpsons made its television debut, and since its debut, the show has aired 738 new episodes and is the longest running American animated series, longest running American sitcom, and the longest running American scripted primetime television series. December 18th, on this date in history in 1966, Dr. Seuss How the Grinch Stole Christmas is made into an animated television show and shown on CBS for the first time. In fact, I was just watching the cartoon version last weekend, an oldie but a goodie. The book was later made into a movie in 2000 starring Jim Carrey as the Grinch. All right, Bob, it's time to explain your 2023 financial checklist.

Bob Loss:
All right. So here's how we're going to jumpstart your new year with this financial checklist. Some of it will be from past shows, but some of it may not be. So I can't stress this enough. Paying off your credit card balances. Now, you don't want you want to minimize all debts and potentially have no debts. Hopefully, you're able to just get your points and pay off your Christmas gifts, your holiday gifts, what have you. Some of these APRs are like 20% up now. So you want to pay off your credit cards, pay off the highest interest credit card first and go on to the next one. And like we've explained probably the last few shows, you want to take the money. Most credit card pay it off as aggressively as you can, pay the minimum on the other ones. If you have other ones, then take that next one, pay that off and so on. So you want to knock them out one at a time. Like I said, have a reward for each time you do that. I don't care if it's a bottle of wine and having a pizza at your favorite pizza joint, whatever it is, whatever it is, taking the kids for ice cream, going out for coffee and cake, what have you. You also want to maximize your tax bracket with a Roth conversion. So what does that mean? So there's no RMDs. When you have a Roth IRA, you don't have to take the money out of a Roth IRA. You already paid the taxes.

Bob Loss:
They've got they got the blood out of your Uncle Sam has already received his cut. So you basically will be taking your partner out of your business. And especially we don't know what that partner share is going to be down the road. When you start taking income from your business, you want to complete your Roth conversions prior to age 72 when your RMDs kick in. So of course if you have all, all or most of your qualified money for one KS, et cetera. Iras, traditional converted before then, then the RMDs don't apply, but it has to be Roth IRA or it has to be money that was taken and pay tax on from a qualified plan such as traditional IRAs and example, and put into specifically specific, specifically funded high cash value life insurance. That's how the Roth IRAs tax chassis became something. It's basically like life insurance. It just has limitations as to what you can do with it when you can do it, how you can do it, and there's limits as to what you can put into it while you're funding it. But there's no limits as to converting. When you're willing to pay tax on the money, the government will gladly take it while you convert into a Roth. You want to set a monthly budget, right? We talked about this. How much income is going to be required to meet my needs and wants. It's not just need. You want to just basically pay the mortgage, pay the insurance, pay the utilities and have to sit and watch TV.

Bob Loss:
Now you want to be able to do something, so you want to plan for that. Now, people don't want to change their lifestyle during retirement. So you want to plan for inflation. You want to plan for future tax increases. If you got all that taxable income, you want to plan for new refrigerator, updating the carpeting, painting, landscape roof. In siding or painting of the outside of the house your driveway repairs. Uh, you know, increases in insurance on the car, the house, potentially gasoline, oil, natural gas, electric. So for the most part, major purchases like your appliances, nobody figures that in. We help our clients figure that in. That's why you want to call 908 359 2861 and schedule a call at one of my associates who will call and set you up with a time that works for both of us and again, Safe Money Bob dot com. We can review your situation and go from there. You want to develop a plan if you haven't already done so, to pay off your house, are you going to pay it off before you retire, or are you going to pay it off when you retire, or are you going to have a small mortgage? Well, what will the terms look like? Do I have a mortgage that's really effective with the comes to the interest rate, my payments, not a lot. I like where I live. I don't plan on downsizing. You know, am I going to downsize? That means I'm not going to have a mortgage because I'm buying is, say, half the worth of value of the house that you live in now.

Bob Loss:
Or maybe you're moving to a warmer climate if that's what you choose. So these are just things that you can do. You know, the easiest way to increase your net worth is getting rid of your debts, hence paying off the credit cards, paying off the mortgage if it makes sense. Just to just. Ideas and tips and advice that I'm trying to provide you value so you can make some of these changes on your own. And with my help, if you so choose, you want to maximize your Social Security benefits. We touched on this earlier. You know, if you can increase your benefit by 8% with no risk and wait till age 70, wouldn't that be a good idea? I think it is, especially if you can Roth convert some of your qualified money and use some of your qualified money to live comfortably up until that point and all of a sudden you turn on that spigot and you're that Social Security spigot, whether it be for one or both of you, if you're married at that time, if it makes sense that you both defer, then you've got that much more income and hopefully it's tax free with the proper planning. And again, you want to implement. Our tip implement a bond replacement to delete the fees and stop the bleeding. I mean, the bond is very unique. This is one of the rare years, not one of the only years in history where the bond market and the stock market both get demolished.

Bob Loss:
So the whole 6040 blend of stocks and bonds take the 40. Want to keep the 60 rocking and rolling? Go ahead, have at it. I even have people that help you do that piece that work closely with me when I handle the other piece And you want to replace those bonds, you want to get into a fixed index annuity or a fixed annuity, you want guarantees. Want to guarantee your principal, mitigate fees, potentially mitigate taxes, and absolutely mitigate risk, whether it be interest rate risk, real estate downturn, stock market risk. On a piece of your portfolio, you will sleep better at night. Consider what I was mentioning here. Income for life. You could have various contracts, whether they be paying you income at a set year for so many years. You can do that with without fees. You can choose to pay a fee depending on the situation and have a higher income guaranteed. No matter what. You can't lose your principal. So you can go no fee, you can have a fee. But we have strategies. We have tools that we can help you with to do this. So please don't hesitate to call. 908 359 2861. Set up an appointment with me. SafeMoneyBob.com. And like I said, someone will get back to you within 24 hours to set up a time for us to talk. And you can always go to SafeMoneyBob.com And book a call with me on your own on the website.

Producer:
All right. Well, great show this week, Bob. Thank you very much. And don't forget, if you missed any part of today's program, please subscribe to the podcast Apple, Google, Spotify, and listen at any time. Take care, everybody. Have a great rest of your weekend.

Producer:
Thanks for listening to Financial Freedom with Safe Money Bob. You deserve to work with a financial and insurance expert who can offer proven strategies for protecting and growing your hard earned money to schedule your free no obligation consultation. Visit SafeMoneyBob.com or pick up the phone and call 908 359 2861.

Producer:
Not affiliated with the United States government. The agency does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

Producer:
Could a recent IRS change actually save you money on next year's taxes? I'm Matt McClure with the 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 tax man is making for 2023 that could actually mean you'll owe less in taxes next year. How much you save will be relative to your personal situation. So it's not.

Andrew Pelosi:
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 1000 for 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.

Andrew Pelosi:
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 dollars for married couples filing jointly.

Andrew Pelosi:
I mean, 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 amerilife life. I'm Matt McClure.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? Then tune in to Financial Freedom with Safe Money Bob, to learn how you can protect and grow your hard-earned money. Financial Freedom Weekends at 8:00 AM right here on WBCB AM 1490 and 107.3 FM. Protect your hard-earned money today and schedule a free consultation now at SafeMoneyBob.com.

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