Bob discusses the most important financial change to make in 2023. Plus, he shares a detailed list of his biggest financial takeaways from 2022 that includes all the good and bad points from the last twelve months.
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1.6.22: 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:
Happy New Year. Welcome to a brand new edition of Financial Freedom with Safe Money. Bob, Jim here and on behalf of Bob, myself and our entire retirement radio network crew, we hope that you had a wonderful holiday season and a fulfilling New Year's holiday. All right. Let's get down to business. Coming up on today's program, the important change to make to your retirement plan in 2023. Plus, a recap of the 2022 financial year with a look at the good, the bad, a little bit of the ugly, and Bob's biggest takeaways from 2022 as well. Speaking of which, let me bring in Bob. Save money. Bob, how are you doing?
Bob Loss:
How are we doing, Jim? Happy New Year.
Producer:
All right. Hey, don't forget complimentary for listeners to our show, a full retirement consultation. Bob provides comprehensive consultations at no cost to our listeners, and there's absolutely no obligation. Bob will also help you cut unnecessary costs in your IRA 401 K or any other retirement savings account. Bob can also help you with Medicare and maximizing your Social Security. So again, contact Bob today at SafeMoneyBob.com Robert Alan is one of the most influential investment advisors of all time and has authored several best selling personal finance books. Alan is the centerpiece of this week's Quote of the Week.
Producer:
And now for some financial wisdom, it's time for the Quote of the Week.
Producer:
And our first quote comes again from Robert G. Allen. He says, quote, How many millionaires do you know who will become wealthy by investing in savings account? I rest my case. He's right. He is very much right. I mean, again, there is not much risk with investing in savings account. But really, at the end of the day, there's. And it's good to save. Don't get me wrong. But there's not much in the returns either.
Bob Loss:
Correct. You're basically his point, Robert. Alan's point is that you can't you're not going to grow wealth into the million millions or however much your goal is by having it not working hard for you. And it doesn't mean you have to risk. It just means you have to get your money working harder for you, not necessarily for the bank.
Producer:
All right, Bob, our second quote of the week comes from Venus Williams. Venus Williams, of course, an American professional tennis player, former world number one in both singles and doubles, has had a phenomenal career. In fact, she's won seven Grand Slam singles titles, five at Wimbledon and two at the US Open and is widely regarded as one of the best of all time. Well, she says, quote, Venus Williams, I don't focus on what I'm up against. I focus on my goals and try to just ignore the rest.
Bob Loss:
That's right. So I think the theme there is block out the noise. You know, have a plan, execute your plan to get to where you want to go.
Producer:
All right. Again, our quotes of the week this week. And hey, don't forget important reminders in the early portion of 2023 upcoming Cost of Living Adjustment Cola for 2023. This according to Cessé dot gov. The increase for 2023 will be 8.7%. This is up from last year's 5.9% COLA, bringing the two year increase to 14.6%. This is the government recognizing that there has been significant inflation and we want to help protect our listeners from that inflation as best we could by protecting and growing their portfolios. So again, log on to save money BBC.com and find a time to meet with Bob to go over everything when it comes to your portfolio.
Bob Loss:
Absolutely. We don't you don't plan to fail. We fail to plan sometimes. So yeah, you can always call me at 908 359 2861. Leave a message. One of our associates will get back with you to set up a convenient time for us to have a short chat again. 15, 30 or 60 minutes whenever you choose or go to SafeMoneyBob.com and book a meeting with me and we'll go through your situation. And again, free of charge, always free of charge. For all my listeners, I generally do not charge anyone any money to figure out where they're at, where they've been and where they want to go. And then if I can assist you in getting you where you want to go, then I'm more than happy to help you.
Producer:
All right, Bob. Well, the last few weeks, we've detailed some reminders of what one could do to prepare financially for 2023. In case you missed any of those episodes, they're available in podcast form via Apple, Google, Spotify, or of course, wherever you get your podcasts. This week, Bob, we're going to decipher some of your takeaways from 2022 as it pertains to the financial arena and how to be ready for 2023. But let's discuss what you thought was the good and the bad from the 2022 financial year.
Bob Loss:
Let's see. Shall we go good or bad? First, let's go with the bad first. I think we'd rather end on a good note, at least with this little segment. So what was bad about last year? Inflation. Well, the war in Ukraine, obviously on a lot of people's minds. It's a sad thing to see. But how it's affected global supply of different resources we've experienced last year, the bad we'll go with rampant inflation. However, I can see that going into 23, the sledgehammer that the Fed has been utilizing on the economy is going to start to take effect of the bad again from 22 and to 23 is going to be probably higher unemployment. So some of us out there may not be employed going into the second quarter this year. You're going to see earnings forecasts because of what went down last year, probably reduced by companies as demand for their goods and services has gone down due to the inflation and the higher interest rates. I can tell you the other more bad was the cost. To just food. And we went through it probably last month at the end of 22. You know, the cost of everything is up. I mean, it's amazing. I don't know what food we get. I look at the bill and I'm like, my gosh, I. What do we get? Here's the list. I want to see it. So, inflation. Bad market performance. Very poor. And again, my clients didn't lose a dime because of stock market declines. So for many, hopefully this year you get a reset with some of that money and you can. Hopefully get the grow again where it is. But again, if you want my help, call 908 359 2861.
Producer:
Yeah and Bob message. One thing I do want to say and again you can leave a message and visit Safe Money Bob but you talk about just something simple as food prices and the food list. And when you're checking out, I can't tell you how many times and it feels like now every week that I go food shopping at the grocery store, I'm in line. And as I'm checking out, I'm looking at the screen or I look at the screen when the person behind the counter is finished checking everything out. And I can't believe the total, the price total. It's incredible. And I always think, you know what? I didn't even think I bought that much. So to your point, you're exactly right. It's the little things like the food price.
Bob Loss:
Yeah. Again, the market drop in cost of goods, cost of services, cost to heat your home, cost the cool your home cost to feed yourself. Gasoline, which finally has backed off a little bit because. People aren't going anywhere. They're not driving as much. They're purposely going out and trying to do three or four errands instead of one. Remember, I used to just run out and get a gallon of milk and a loaf of bread. That doesn't happen anymore. It's you run out, you're getting five, ten, 15, 20 items and probably hitting two or three different spots. So let's go to some good news. All right. Like I mentioned just before, there are some buying opportunities, especially in certain sectors you have confidence in. It could be tech. It could be health care. With the assets you currently hold, you may want to start a Roth again. Again, potentially, if you didn't do it last year, Roth conversion could be on the table. Those are things we can help you with. But again, even the safer type investments, fixed annuities. Multi year guarantee annuities. Single premium. Immediate annuities. All the terms and rates in these different options are so much better than they were this time last year. You know, with the mortgage rates being higher, that means other rates are higher. So it may cost you more to borrow money. But you're also able to get more money or interest earned and growth. On your money that you may consider safe. I can tell you probably between two and one half, maybe three years or less.
Bob Loss:
Cd rates. A really good anything. Three years enough. You want to look at a fixed a fixed interest multi year guarantee annuity. Those rates are still in the fives and I can tell you. Companies are actually starting to lower those rates. O'hair What does that mean? What that means is and again, this is still good for you because they're still near the. Many years high. I can't remember the last time somebody raced or where they were and put the growth potential. So you have an opportunity not only to get into different equities if that's what you want to do, or shifting some of your sectors that did well into the ones that didn't fix index annuities, multi year guarantee annuities and single premium annuities right now, or looking the best they have in years. So it's a great time to give me a call. 9083592861. Leave a message. One of my associates will get back to you so we can discuss your situation further in more detail. You can also go to SafeMoneyBob.com Look at call with me. There's a lot of opportunity out there right now, and there's going to be a lot of opportunity probably the next, I think within the next 3 to 6, even 12 months to really get back on track with some of your goals financially. And that's pretty much what my take is on last year and going into this year. Just I think there's a lot of opportunity right now to improve your situation.
Producer:
So some good and some bad. And I guess what some really ugly, right? Take the good, the bad and of course the ugly as well.
Bob Loss:
Yeah. Yeah. It's it's it's I do an exercise where I go back and I went through all the good things I went through with my two kids, my wife and myself, and I said, okay, what was good? What was bad health wise, you know, academically, professionally. I got my first hole in one last year, so that was pretty cool. Good at my own my own charity golf outing that I found. And I'm the only one that ever did it. So I have that distinction, whatever it is. But but yeah, just reflect what you learn, learn from what you've gone through on all facets of life and try to utilize that knowledge and experience to make things better moving forward for yourself, your loved ones, friends, clients, anyone you can help.
Producer:
All right. A reminder, if you missed anything from the first portion of today's show and want to catch up on previous episodes, subscribe to the podcast Apple, Google, Spotify, or wherever you get your podcasts. And you can listen to our show on the radio side every Saturday and Sunday. If you missed it Saturday, you can catch the replay on Sunday at 8:00 AM on WBCB. Coming up, the important change to make to your financial plan in 2023 107.3. WBCB financial freedom with Safe Money Bob 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. Ebony.
Bob Loss:
He took.
Producer:
You're listening to Financial Freedom with Safe Money Bob.
Producer:
107.3 WB KB Financial Freedom with Safe Money Bob. Coming up, changes to your 2023 financial plan. You don't want to miss that. Plus the one worry adult children of retirees have this year. We'll discuss that as well. And if you haven't done so already, reach out to Bob at 9083592861 or go to the website SafeMoneyBob.com And see how Bob can help you reach your financial freedom. Right now, though, it's time to take inventory, if you will, of 2022. We talked last segment, Bob, about the good and the bad from last year. Let's expand a little bit and discuss your biggest takeaways financially from 2022.
Bob Loss:
It's kind of ugly, so everybody prepare themselves. Hopefully you didn't get hit this bad, but it's a 22 is definitely a reminder that down years do happen. Everyone got very complacent. It's crazy like I saw complacency up until 2006 or seven between the housing market. You know, my house will never go backwards. And then also the market's going down as hard as they did zero eight into early oh nine before we started to rebound. So 22, you know, obviously moving forward, I want to be managing your risk effectively. You know, try to protect your principal in gains the best you can. I mean, just think about this. The S&P. Well, I think the Dow was down about nine. The S&P 500, which is a really good broad measure of what went down, literally, not figuratively last year, was lost about 20% in Nasdaq. Nasdaq, which is tech. Right. Biotech. It's not just tech, but it's a lot of things now, Nasdaq, NASDAQ 100, sometimes it overlaps with the S&P. You know, it was down almost 35%, like over 30 for sure, 30, 35. I mean, the thing is, during all this, so people are losing wealth, right? Losing wealth just going down. Meanwhile, inflation was going ballistic. Now, you know, they think it slowed sort of last year, but I see it kind of slow and more so this year.
Bob Loss:
And it truly will not stop or really slow down and then regress until most likely a lot of people don't have work. So if I go to a little chart here, I'm just looking at source Consumer Price Index, US Bureau of Labor Statistics. So, you know, price increases those, they're elevated, but they were beginning to sort of come down. So now instead of being well over 8 to 9% and more different areas, the overall as of October, according to this source, somewhere just above north of 7%. So some Americans are finally beginning to feel relief after months of rapidly rising prices. So food we just spoke about food, food, fuel, rent, interest rates. If you had adjustable rate mortgage, God forbid, you know, overall inflation has fallen four or five straight months going towards the end of 22. It should hopefully continue to soften. But we've come up so much so fast because it was you know, rates were kept low way too long and now they had to be very aggressive, being raised really fast. You know, just the rising energy costs, clean fuel prices, as we just mentioned, it's a global effect as well. It's not just here. It's not just Europe. It's not just one place or the other. It's everywhere. Gas, electric, I should say gasoline, electric, nat gas, natural gas all skyrocketed when Russia invasion of Ukraine ruptured the global energy supply chains, not to mention when we shut off our pipelines as well.
Bob Loss:
That didn't help. There's a lot of uncertainty surrounding a war looms large. Obviously, it's pretty scary stuff. You know, we had that winter storm I don't know about you, but here in the mid-Atlantic, northeast for Christmas and going into holiday like Christmas, Hanukkah, I think end of Hanukkah, early the Christmas weekend, it was Christmas week, I should say, or holiday week. We had a storm come through here. I mean, we had negative, negative temperatures. You know, I mean, how much lower can you put the heat? I mean, I got I'll put my heat on the high fifties, low 60 range during the day when no one's here other than myself because I work in home office, just sort of secular, separate from the rest of the house. You know, my kids are at school per se, and my wife's at work. So, you know, there's things you can do just wear, wear a sweatshirt, wear sweater, you know, put the heat down during the day. You don't need to have it that that high. Again, back to gas pricing. We were we were I mean, I know in PA, PNC, there had to be I think it was diesel hit six at one point. So what the heck is that doing for the for the transportation industry, the truckers? Oh, my goodness.
Bob Loss:
I mean it's backed off some like the regular gas. It as high as five. I think we are in a high fours here in New Jersey where I'm at, and I think now we're somewhere down around 360, 380, which looking at where we were, everybody feels, oh, this is we're lower, we're lower. It was less than two years ago in the twos. So it's still probably 50% above what I was paying. And thankfully I don't have a premium car with premium unleaded required anymore and when it has double the gas mileage. But, you know, again, the average gas prices, they peaked. They're coming back again when the driving season starts again, probably towards warmer weather. We'll probably spike up again, unfortunately. You know, and when we go back to food costs, you know, they continue to rise at the regular supermarkets, restaurants. I mean, Costco is supposed to be the deal. Aldi shop, right? Stop and shop wherever you go. There's no relief. There's no relief. I mean, I honestly don't know what we're at. And when I see a bill come out of the bank account, I have to really go look at the list to see what we actually got, what we bought, what we have here. So food at home.
Bob Loss:
Just give you an example. Increased 12% since a year ago, November. So we'll just assume it's a year ago, over the last year. So in contrast, food away from home restaurants increased eight and one half since last November 21st. So the year plus a month or so with interest rates on the rise, like I said, I feel like I got this gut feeling that we may have peaked on interest rates possibly. I mean, I don't know if they want to keep raising them, then we're really going into a recession for, in my opinion, just my opinion. I just don't think they can keep going up and they keep going up. It's just going to shut everything down. So when you when you you have adjustments in these major changes, interest rates, inflation, your investments are down and so forth, like borrowing costs we just talked on or touched upon before your I don't know if you all know this. I'll give you a little, little lesson here. So you get the Fed funds rate, which is how banks borrow overnight from each other. They raise them up seven times the past year. So they went from practically zero to around four, 4 to 4%. So the central bank controls that interest rate, but it affects other interest rates. So we're talking about the average 30 year fixed mortgage.
Bob Loss:
The average 30 year fixed mortgage is almost 7%. And I can tell you I also handle mortgages for my clients in some cases. I've had some people closing loans at eight eight and change depending on credit, loan to value purchase or cash out, all that stuff. Again, it's something else I can help you with too. Along with the whole financial picture, I 60 month car loan. It's about six just over 6% in credit cards. I hope you're sitting down for this, which is why we always talk about not having much or any little or any credit card debt. It's easily in the 19 to 20% range. So all these things have immediate impacts on people commerce, commerce in general, people borrowing money to make money, people borrowing money to get a new car, trying to paint on their credit cards. And the rates went from 12 to 20. So it's tough. So, you know, the bottom line is we have found that too many pre retirees and retirees already in that segment of their life. They're afraid to spend their money down because they don't want to run out. And if you're pulling money from a down market and things cost you more than they did before, it's kind of like a double whammy. So what we want to do is help you solidify a plan that will empower you to live the retirement lifestyle you work so hard for not only, you know, plan for it before retirement, but then while you're doing during retirement, you want to make sure that you stay on track because you don't want to come out where you're sitting here saying, Oh my God, I can't afford to live the lifestyle I want because I'll run out of money.
Bob Loss:
So you want to always stay ahead of those things, whether it be budgeting. Maybe be surprised when people ask if they have a budget. They're like, No. I'm like, So? So what do you do? You just get your income comes in and you then spend whatever it is you want to spend. And I'm like, That's not going to work. It's like a recipe for disaster. So again, we can help you with all these things. Just call call me at 9083592861. Leave a message someone we'll get back to you. Set up a call or go to w w save money. Bobkoff Book a call 1530 or an hour. And if I don't have another one right up against you, I'll give you that extra time if you want whatever it takes to make sure that you know where you're at, you know where you've been, and you want to figure out where you want to be. And we can help you do that.
Producer:
Yeah. Bob, I'm amazed at the amount of people. I mean, my parents talked to people about this, too, and I don't want to say it's all younger people because it isn't. It's also older folks as well. But there's a big portion of people, a percentage of people in America now that just don't have a real financial plan, even a weekly budget. And I think for me personally, Bob, I've always believed I don't care how much money you actually have. I do think, though, that you should have I don't care if you're a millionaire or even a multimillionaire, you should still have some sort of budget. No?
Bob Loss:
Correct. Yeah. Yeah, Yes. Even I know some wealthy people, clients and otherwise. And you know, you still have to know what's coming in and where it's going and what's happening with the rest of your money. Again, we talk about mitigating risk, mitigating taxes, mitigating fees, I mean, even bank accounts. My goodness, the banks, they charge your fees just to have a bank account like we're paying them so we can put our money in the bank, which that was not the case not so long ago. But some of that I don't think you could really avoid. You've got to have a bank account. You have an operating account, I like to call it, so you can pay bills and so forth. But yeah, you want to have a budget. I don't care if you're making 100,000 a month, you're making 2000 a month. You want to have a budget. You want to know that you're solvent. You know, forget the government because they just print money. But like the rest of us, companies, individuals, families, businesses, small businesses, retirees, pre retirees, working class people, younger people who are just getting started. You want to know what you bring it in.
Bob Loss:
You want to know what you have to have, go out and then you want to be able to pay yourself first, pay yourself first. I mean, every day, Oh, look, I got something coming out of something and going into something to pay myself first. So the first things that come out before I pay the mortgage, before I pay anything else is money going into in my situation, my high, high cash value, specifically designed life insurance policies so that I can be my own bank, so that I can find it. I can pay for my daughter's tuition and pay myself back and still use that money in retirement. I can I can buy that car or pay off that car and then pay myself back and still use that money over and over and over, and it'll look like I never touched it. So these are things we can help you with. Just call nine, eight, 83592861. Someone will get back to you. Book a call or go to save money. Bobkoff Book a call that way as well. And we'll we'll try to help you out.
Producer:
All right, Bob. And again, if anyone has any questions about this, what we just discussed here or anything previously that we discussed in this show, anything we've talked about today and we'd like to work with Bob visit SafeMoneyBob.com This is financial freedom with save money Bob We'll be right back.
Producer:
You're listening to Financial freedom with safe money. Bob to schedule your free no obligation consultation visit SafeMoneyBob.com.
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 Guide Questions Safe Money. Bob is here to help visit Safe Money Bob Dotcom today.
Producer:
107.3 WBCB welcome back to financial freedom with Safe Money Bob our first show of 2023. And if you missed any part of today's program, check out our podcast catalog on Apple, Google, Spotify, or wherever you get your shows. All right, Bob, I don't know if you've heard about this, but according to Fox Business, adult children of retirees are worried about how inflation affects and will affect their parents. That's the headline 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:
Oh, yeah. So, yeah, I'm seeing it. I'm watching it. I'm living it in a way. So, you know, there's adult children, retirees, you know, you worry about the impact of inflation on your parents, Right. Because a lot of them, if they've been retired for a while, they they haven't seen the cost of living to be in this type of area. This is, again, as a survey by Fox Business, just like Jim had mentioned, you know, there are 60% of respondents that expressed concern that inflation was hurting their parents. I'm surprised not even higher, you know, hurting their parents financial situation. And many, many have said they are afraid their parents won't be able to afford retirement later years. And that's a big thing because you figure we're all well, hopefully all of us or most of us, but a lot of us are living longer. And again, that was from a survey from American Advisors Group AG. A lot of us are living longer. If you look at your parents on one side versus the other side, you know, one of them's living into the nineties at least sometimes even both. You know, some are even approaching 100, which is probably a little crazy, but it's not like it's happening. I mean, our, our system of medicine keeps you may not cure a lot of things, but it keeps you going. It's a lot of maintenance stuff, you know? So there is a real retirement savings crisis.
Bob Loss:
You know, it's not fake. And the Gen-X adult children, they're telling us that their caring for their parents will be it will be difficult for them and potentially unattainable. Again, that's from Eddie Herta, age vice president of Brand Strategy. It's one of his he said that in a statement. So yeah, it's inflation only affects what we're trying to figure out retirement and we're trying to take care of ourselves, take care of our kids, get them through school, get them through trade school, get them through college, hopefully not with a ton of debt, you know, but then when you figure in, you know, you're probably going to see a lot more mother daughter or could be mother daughter is the term. But where you have maybe one parent passes before the other and they're moving in, they're moving in with their one of their adult children. If they have more than one who maybe is more financially stable than the others. You know, it's also looks like a little bit of a lifestyle change, too, for the for the adult children, because now you have a parent sitting here that you've got to kind of keep an eye on. You know, they're not hopefully at the point where they need health aides, home health care workers, people helping them day to day.
Bob Loss:
So, again, these are the things we're discussing here. You know, it's part we could do a full retirement consultation for our listeners as we've offered every week. We provide comprehensive consultations at no cost. It's not going to cost you anything. And there's absolutely no obligation. You don't have to work with me if you don't want to. Most people do. I have to say, once we do a review for them and see what we can bring to the table and how we can help them, you know, it will help you cut unnecessary costs. We talk about one of our running factors, I guess, from your IRA or from K or any other retirement savings account that you may have. Again, we talk about risk, mitigate risk fees, taxes, big, big, big eroding factors there. You know, we can also help with Medicare, maximizing your Social Security if you have not taken that yet per se. Sometimes it makes sense for people to wait, utilize more of their qualified money. There have been changes, I believe, recently in the RMDs moving forward required minimum distribution ages. An excise tax penalty has been muted somewhat. You know, these bills that they passed, which I don't know how nobody probably reads them because there are thousands of pages long, but I fortunately get a lot of industry news that cuts out some of the pieces that pertain to my what do I do in my field and how I help my clients.
Bob Loss:
So always you can always contact us at w w w dot SafeMoneyBob.com You can give us a call if you want. 908 359 2861. And again, this is how it works. Basically you call the office or you book a call online 1530 an hour, whatever you want. I don't charge anything. I kind of ask you what's on your mind? What was your most important reason or major motivation for actually wanting to speak with me? And then I'll ask you some questions to see if I can get a better feel for what your actual financial pain is. And then from there, if you're comfortable enough, what we do is we'll get you a document. Usually I think it's three or four or five pages. I forget which one, depends which one we use, but you know where you can kind of just put your base numbers. Income, Social Security. Is there a pension? Do we have a mortgage on the house? Do we have savings accounts, checking accounts, CD's? Do I have any annuity? I have an old four week old. Ira Roth. Ira. All that information. And then also a spot where you can. We asked for your thoughts. What is it that you're thinking about? What is it you want to accomplish? It's not just numbers.
Bob Loss:
So after we gather all that, we put your information into a lifecycle model, which is one page is just for you. And when we're done with our call, whether it's most likely to be on our second chat or second discussion or section virtual meeting, we'll give that to you. We don't keep I just did this yesterday. My, my old couple. I keep bringing them up. My old couple. I figured out a way to guarantee them enough money while still growing some of their money and keeping plenty of the money liquid through thorough financial inventory, taking I mean, literally gathering information painstakingly with the help in this situation of an advocate who's helping them organize with their health aid and their cutting, their writing, their bills out and things like that. So basically, we're able to confirm exactly what they had, what we had to work with, make sure it works for them, make sure I'm satisfying the income, the guaranteeing the income, not risking their money and protecting more of their assets to grow them while taking a ton of risk off the table and fees it costs. I'm even controlling some of their tax dollars. How we're doing it, moving it in a way where there's no tax until we start utilizing that money. And fortunately for them, a lot of it's not qualified, it's not retirement money, so there's not a lot of tax to be involved with their income.
Bob Loss:
So they will most likely, I believe, based on the numbers I'm remembering now, hopefully avoid taxation under Social Security while taking care of the heavy expense of 24 seven health care aide living with them, literally cleaning. Cooking in some fashion. Going to the grocery store, helping care for the elderly gentleman. Fortunately, his wife is still pretty much able to do a lot of things herself. So these are just things that all the years of working with people, the experiences, the knowledge, I probably have seen everything that there is to see good, great, bad, salvageable, not so much making it better. So just again, don't hesitate. Go to WW save money. Bobkoff Book a call with me and we'll give you all that value. All that value. And we can walk away friends or like most people. And once we get through those first few steps, we end up working together in some fashion so I can help them get where they want to go. You can always call the office if you're old school and don't want to deal with clicking buttons and all that. 9083592861. Leave a message. One of my staff will get back to you and set up a convenient time for us to talk and we'll help you in any way we can. And that's what we're here to do.
Producer:
All right. Hey, don't forget complimentary for listeners to our show, a full retirement consultation. Bob provides comprehensive consultations at no cost to our listeners, and there's absolutely no obligation. Bob will also help you cut unnecessary costs in your IRA 401 K or any other retirement savings account. Bob can also help you with Medicare and maximizing your Social Security. So again, contact Bob today at SafeMoneyBob.com All right. Great job. Great information there, Bob. Coming up, the important change to make to your portfolio in 2023. That's next. This is financial freedom with safe money. Bob, we're back after this.
Producer:
Thanks for listening to financial freedom with Safe Money Bob. If you like what you're hearing, subscribe to the podcast and leave us a review wherever you listen to podcast.
Ford Stokes:
Chapter one Why you should consider investing some of your hard earned wealth into a fixed indexed annuity. Big idea Protect your hard earned wealth with annual point to point protection periods that lock in your gains each year. A fixed indexed annuity can help you do the following with your wealth. Number one, Protect your money from market loss. Fixed index annuities offered by highly rated annuity carriers did not lose a dime in account value in 2008 or 2009 during the worldwide recession caused by the mortgage loan crisis that resulted in the S&P 500 losing 50.1% of its value from March one, 2008 to March 31st, 2009. Number two, grow your money with market like gains, typical annual growth of 5 to 7%. Number three generate a lifetime income. Your retirement will likely last 30 plus years. It might be a good idea to play some of your assets into a fixed indexed annuity to set a safety net around a portion of the retirement income that you wish to generate. Number four, eliminate market risk associated with bonds by replacing the fixed income bonds in your portfolio with a fixed indexed annuity. Number five, eliminate the advisory fees you're currently paying to generate fixed income with bonds in your portfolio by replacing them with fixed index annuities. The annuity companies pay the advisor you don't. This is called a bond replacement. If the above fixed index annuity benefits sound appealing to you, then I invite you to listen to the rest of this book and ultimately invest a portion of your hard earned wealth into a fixed indexed annuity to build a successful retirement.
Ford Stokes:
For more important information on annuities. Beyond this book, I also invite you to visit our website Annuity 360 dot net. Let's consider a 100,000 investment in the S&P 500 versus a 100,000 investment in a fixed index annuity with a 50% participation rate in the S&P 500 from 2000 to 2013. Here's a hint, folks. The annuity wins from January one, 2000 to December 31st, 2012. The S&P 500 experienced -2.943% growth over those 13 total years. People who retired prior to 2000 experienced zero growth over 43% of their estimated 30 year retirement. Question Do you want to live your life during retirement without any growth over 43% of your retirement years? I didn't think so. Conversely, if you had invested into a fixed index annuity with a 50% participation rate in the S&P 500 in January 2000, you would have seen a growth of 65.53%. That's a significant total account growth difference of 68.473%. Do I have your attention now? The account value growth chart below shows the $100,000 invested into an S&P 500 spider in January of 2000 versus 100,000 invested into a fixed index annuity with a 50% participation rate in the S&P 500. Also, in January of 2000, the fixed indexed annuity achieved a total growth of 90.038% versus just 25.786% growth in the S&P spider by December 31st, 2013. This chart shows the power of one year protection periods called annual point to point features. The gains from each year were locked in on each anniversary of the annuity policy effective date.
Ford Stokes:
When the S&P had negative years, the S&P Spider 500 spy experienced losses. In those same years, the fixed index annuity experienced zero losses. This proves that you don't need double or triple digit gains if you don't experience losses. In this author's opinion, every sound portfolio with a smart financial plan includes fixed indexed annuity investments with tactically managed portfolios in hopes to minimize market risk, reduce advisory fees and deliver a reasonable rate of return. The annuity can also deliver consistent income with or without the added feature of an income rider that also charges fees within the policy. I recommend avoiding income riders. I strongly recommend investing a portion of your hard earned wealth into a fee efficient, accumulation based, fixed indexed annuity with no more than 5% annual penalty free withdrawals. To allow your money to grow and to generate important income during retirement. Refer to your audio book companion PDF that comes free with a purchase of this audio book. See Chart 1.1 for annuity account growth Examples. Green line, a $100,000 investment into a fixed index annuity, showing the net growth of the annuity with a 50% participation rate with zero withdrawals from January one, 2000 to December 31st, 2013. The resulting account value is $190,038 by the end of December 31st, 2013. Redline, $100,000 investment into the S&P 500 Spider ticker symbol SPY. This investment carried 100% market risk with 100% opportunity for market gains on the performance of the SPY. From January one, 2000 to December 31st, 2013. The resulting balance of the account is $125,786. Your human capital versus your wealth capital.
Ford Stokes:
Human capital is an intangible asset or quality not listed on a company's balance sheet. You can think of this as an economic value of your work. Your human capital will decrease over the course of your career. Your peak amount of human capital is at the start of your earning years, whether that be right out of college at 22 years old or at age 30 after completing your advanced degrees. This is the time where your productivity levels are high and you are contributing to your company's wealth. You have all of your earning years ahead of you. During this time, you have to protect your hard earned wealth capital. This is not something you can recoup. You can't go back and relive your prime earning years or the years where your human capital was the highest. There are many barriers to going back to work at retirement age. Unfortunately, age bias is a real issue, especially in certain industries. Those who might have been an engineer during their younger years might be forced to take a retail job to make some extra cash because companies in their field won't invest in older employees. Many employers focus on what you can't do when you're older. Instead of thinking about the experience and the expertise you could bring to a project, you will most likely have to rely on your wealth capital during retirement. The idea of losing capital as you go farther in your career sounds a little scary, but you can rest easy knowing that this new form of capital will kick in as your human capital dwindles.
Ford Stokes:
As you earn and invest throughout your career, your wealth capital will grow exponentially. You'll need this wealth capital for your retirement. So it is important to choose investments that will protect and grow your wealth. Annuities, specifically fixed index annuities, can offer you market like gains without the market risk. Your money never goes below zero. By investing in a fixed index annuity, you are taking money out of the Wall Street casino and we think that's a good thing. Annuity guarantees like guaranteed lifetime income and the guaranteed growth of your principal are based on the claims paying ability of the issuing annuity company. It's a good idea to buy annuities from highly rated annuity carriers that are rated by Standard Poor's and AM best. We consider a highly rated annuity carrier to be rated at least a triple B rating by S&P or with a B plus rating by AM best. The impact of loss on your portfolio specifically, it can be devastating to your retirement. When we look at market volatility risks, the risk of loss and the potential impact on your retirement income is an important thing to understand. This chart shows the impact of losses on your retirement accounts. If we take a look at an example, let's say you have an account that is at risk. If you start with 100,000 and lose 20%, you lose 20,000 and you are left with 80,000. If you gain back the same 20%, are you back to even as you can see in the graphic below, the answer is no.
Ford Stokes:
In order to get back to your original 100,000 investment, you would have to gain back 25%. If we add an additional 5% for RMDs, we would now have to gain back 33.3% to get back to even. Understanding this concept is one of the keys to a successful retirement income distribution plan because you no longer have time on your side. The last thing we want to do is run out of money when we are 90 or 100 years old. How much do you have to gain to make up for a market loss? See Chart 1.2. After reviewing the above chart, I'm reminded of Warren Buffett's two rules of investing. Number one, never lose money. Number two, never forget rule number one, when you invest in a fixed index annuity with a highly rated annuity carrier that has a high financial solvency ratio, then it is likely that you will be able to follow Warren Buffett's two rules of investing. Exactly. You'll likely not lose any money with the amount you invest in a fixed index annuity offered by a highly rated annuity carrier with a high solvency ratio, a good financial solvency ratio is any solvency ratio over 104%. The solvency ratio expresses financial soundness and a company's ability to meet policy obligations as they come due. Assets divided by each $100 in liabilities result in a financial solvency ratio expressed in a dollar figure. Assets are bond stocks, cash and short term investments. Liabilities exclude separate accounts. The higher the amount, the stronger the company's position to cover unforeseen emergency cash requirements.
Producer:
Welcome back to financial Freedom with Safe Money Bob, if you missed any part of today's show, a quick reminder, subscribe to the program in podcast form Apple, Google, Spotify, or wherever you get your podcasts and be sure to listen to the show on both Saturdays and Sundays at 8:00 AM right here on 107.3 WBCB. All right, Bob, let's get into this Week in History.
Bob Loss:
It's this Week in History.
Producer:
This Week in History. On this day, January six, the 1920, in the sports arena, one of the most impactful transactions in Major League Baseball history occurred when Babe Ruth was bought from the Boston Red Sox.
Bob Loss:
A Yankee, right? What's the Yankees? Yankees bought them from the Red Sox. Boy, I'm sure they loved that thinking of that deal. Oh, man.
Producer:
I do wonder what it would be. $100,000, what that money would be today. What a transaction in 2022 and 2023.
Bob Loss:
Now 100 million, baby. Wow. Everybody, I'll never forget. I know we mentioned it probably months ago, but Babe Ruth, one of his deals was he bought an annuity because he didn't want to risk his money. That's why he bought an annuity.
Producer:
I didn't know that. Yeah. Ford stocks, although in his book Annuity 360 may have mentioned that before.
Bob Loss:
I think so, yes. If you want a copy, just let us know. We can get one, too. He's got to call my office. 908 359 2861. Leave a message. Leave clearly. Name, address. Obviously, we'll have your phone number because it's on the caller ID, but name an address and then we'll free of charge. I'll send one out to you because I have a supply of those for my listeners.
Producer:
All right. Well, we've talked today about the good and the bad from 2022, and Bob listed his biggest financial takeaways from last year as well. Earlier in the show, we heard an excerpt from Ford Stoke's book Annuity 360 discussing fixed indexed annuities. And they could, Bob, play a big role in a person's retirement plan for 2023.
Bob Loss:
Absolutely. So we talked about how to take advantage of and I mentioned it earlier today. You want to take advantage of the interest rate environment. Let's look at a positive. Let's look at the positive. You can replace bonds. You get a bond portion of your portfolio with fixed index annuities. So the new 6040 portfolio is actually 60% stocks or mutual funds or growth stuff that investments that can be at risk perhaps. But the other 40%, instead of being in bond funds, I looked at a statement yesterday, they were actually muni bond funds and the people went from I think they lost about somewhere around 17% on the actual asset. The income is good. But again, in that situation, in their case or anyone else's case, the bond portfolio which got shellacked, it could be totally fixed moving forward or corrected by going with taking that portion of your money and putting into a fixed index annuity with or without a fee, with or without guaranteed income rider. If you just want to go for growth, maybe you want to know no matter what. In ten years you have X amount of income, even if it made nothing, which is crazy. And honestly, these offers or opportunities blow away the old pensions that are offered from employers who have your lump sum. So if you happen to have one of those people that has a cash balance on a pension through a former employer and it's mobile, you'd be well suited to consider a fixed index annuity with a guaranteed income rider now and annuities again, just to remind you, or safe or a safe and a fee efficient way to generate income, generate growth or both for your future. So again, visit me at w w w dot SafeMoneyBob.com look a call. We go through all these different options and how they would affect or pertain to you and how they can improve your situation or simply give me a call at 9083592861. Secure your retirement. Like I said, my website, my personal website for my practice. People don't plan to fail. They fail to plan.
Producer:
All right, very good. Hey, one more time, Bob. How can people get in touch with you?
Bob Loss:
All right, so if you love to leave messages and have people call you back the next day, you can give a call at 9083592861 24 seven. One of my staff will get back any time for us to review your situation and see how we can help you. Or you can simply go to w w w dot safe money bob and book. I call it me again. 15 minutes, 30 minutes, 60 minutes, whatever you pick. If I don't have something bumping up against it, I'll give you a little more time as it makes sense. And we feel like we're we're adding value and we're we're figuring some things out for you that we may want to look further into and kind of give you a call. Like to call what if it's like, Well, here's where we are now? Well, what if we consider this and then go through the why? It may be better for you. Make sure you understand things. You know, the keys are you need to. I won't move forward with anything with anybody until I know you truly understand what we're doing. We agree. Makes sense. We go over the reasons why it makes sense to you, Why you think it makes sense. Not me. I'm just. I'm just the provider of information and solutions and also the educator. It's really cool stuff when you get to people, other people see the value in what you provide. How it's not mainstream per se, but doesn't make it a very integral part of someone's plan. You know, we're all going to help help you show you what we can do for you along those lines as well. So but that's how you get a hold of me knowSafeMoneyBob.com or call 9083592861 and leave a message and we'll someone will get back with you to set up a call with me.
Producer:
All right great show this week Bob thank you very much. And don't forget, if you missed any part of today's show, please subscribe to the podcast on Apple, Google, Spotify, and listen at any time and you can reach out to Bob as well. Visit SafeMoneyBob.com Have a great day and we will talk to you next weekend.
Producer:
Thanks for listening to financial freedom with SafeMoneyBob.com 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 9083592861.
Producer:
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