12.2.22: Audio automatically transcribed by Sonix

12.2.22: 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 another edition of Financial Freedom with Safe Money Bob post-Thanksgiving. As we go headlong into the holiday season, let's give a nice, warm welcome to the man of the hour, literally and figuratively. Safe Money Bob.

Bob Loss:
Hi everyone, I hope you had a great Thanksgiving holiday weekend. Got to enjoy your family. Had had your hopefully your turkey was moist and delicious versus dry, which I've experienced a lot.

Producer:
All right, Bob. Well, we're steamrolling towards the end of the year, and it's that time where we take inventory, at least I do, of the things in our lives in the financial side that can't be swept under the rug. So how to improve your financial plan in 2023? That's the title of this weekend's show. And Bob and I mostly Bob were nice enough to compile eight New Year's resolutions as it pertains to your financial planning.

Bob Loss:
Yes. So actually, it's basically New Year's resolutions that can help help you keep. That we can help you keep and that you'll be able to keep hopefully throughout the year. I actually just did this literally in the last 24 hours. I revisited and calculated my net worth. So any changes that you need to make become more obvious after doing this calculation. You basically start by totaling your assets account balances like bank account, real estate, anything of value and subtract liabilities such as mortgages, credit card debt, car debt loans, student loans, what have you do? Get a clear picture of your net worth. Here we go. One step further. Now, do we get a clear picture of it? But the tools that I've mentioned over the last couple of months that we use, I use it myself. So I went and reviewed my life cycle model, which basically gives me a snapshot of what we have, where we have it and how much we have. So I just did this exercise myself just because I'm working on some other things and it's a great tool for you guys to use. You could always get it from me by booking a call, either by calling 908 359 2861 and please leave a clear message with your name Phone number if you'd like me to mail you a book. 8360. I could do so if you leave a clear message with your address. So that's just that's number one. Number two, you want to do a check up on your retirement accounts. So obviously, this year has been tough, but you want to make sure your any contributions are being matched or offered by your employer, especially if they say if you put in 4% and then they'll give you 4%, try to do the 4% because it's like double on your money off the bat without even growing it.

Bob Loss:
If you're 50 or older, you can contribute extra 7000 a year into an IRA. If you don't have a4403b or 457. And if you're self employed, get in touch with us about contributing or setting up a Sep IRA. There's different rules for that. Higher limits just depends on how much money you're making. If you want to be deferring taxes now for this tax year versus paying them and then having a tax free income later, but you also want to do item three, you're going to want to update your savings goal. So what does that mean? Well, it could mean looking at how much your money is growing. It could basically determine how much you plan to set aside each month for your future. I do this. I did that today, too, or actually yesterday and today. Just confirming what I've been putting away. What what amount of my mortgage payments. You're going into equity to get a clear picture without substantial growth, just growth and contributions to some payoffs here for real estate, where we would be at, as Warren Buffett says, don't save what is left after spending, but spend what is left after saving. Again, I live this. I have no choice. I have premiums for high cash value, life insurance being deducted every pretty much almost every week into some policy, whether it be on me and my wife, my kids, which I own them.

Bob Loss:
So very important if you can set a goal and try to increase it by, say, 10% a year. So if you're putting away 400 bucks, try to do for 40, you're doing for 40, try to do for 84 instead of etc., that'd be great. And you want to make a plan to pay off debt. You want to decide how much you can pay towards any loans, debts or mortgage accounts. Consider paying some extra principal toward your mortgage payment each month. Now, keep in mind, if you do so, make sure you still have plenty of liquidity for any unforeseen expenses. By doing so, you'll earn you'll earn a risk free return on that money equal to what your mortgage interest is. And you cut down on your number of years that will take to pay your mortgage off. So for those with of liquidity, it's not a bad idea to do that. You also have item five. You want to rebalance your portfolio. Does the stock market has its ups and downs? We all know that some sectors overperform and some underperform. 2022 has been pretty grim for most of the sectors. But by rebalancing your portfolio to its original update asset allocation, you take steps to lock in gains from the sectors which did the best returns and you're purchasing shares at a discount in the sectors that have lagged behind. Here's a tip. So if you rebalance your portfolio with a broker, assuming this isn't in your 41k for say it's a brokerage account, they are likely charging you potentially up to 5.5% to do this.

Bob Loss:
This is not efficient. It's a nonefficient strategy. You recommend you work with someone who has your best interest in mind and looks to save you money, not lose more of it by rebalancing it and taking fees to do so. Item six Pay down those credit cards. That's the biggest albatross you can have around your neck. Don't carry a big balance on your credit cards with high fees. No one has ever become rich off airline miles or hotel points. Another great perks, but they're great perks if you're paying your balance off pretty much every month. Make it a goal to pay off your balance each month. Also, a credit card should not be your emergency fund. That's an absolute last resort. You want to try to have 3 to 6 months of expenses set aside for unforeseen emergencies. And again, it doesn't have to be in a bank account. It could be in a CD. Who cares if you break it? I lose some interest, but don't lose my principal. Better yet, like myself, a cash for life insurance where a loan under 5000. I can get that over the phone and have it in my account within like two business days. Three business days. So that works out really well. So that's something else we could help you with by calling. Going to save money. Bobkoff Book chat with me. I can tell you all about how I'm set up and how I can help you.

Bob Loss:
Hopefully, you want to review your credit report. Nobody does this. Make sure you check your credit report regularly and take advantage of repair any negative aspects. There's no excuse for not reviewing it. It's very important. And errors are not uncommon. And they cost you a lot of money in higher interest rates depending on what kind of loans you're actually getting. You're still obtaining loans. And lastly, you want to review your life insurance needs as you move through your career, your life, your life insurance and disability insurance needs will continue to change. Give some thought as to how much protection you need. Consider investing in either indexed universal life or whole life. Of course, properly designed, overfunded. We can help you with that. Call the office. 908 359 2861. Leave a message. Clearly. Name, phone number and one of my staff will get back to you. A simple call. Also, if you're and you're still in your forties or fifties, I guess give me 56 on those types of policies or only ways you can truly generate tax free income. That's my plan. That's how I do it. So the bottom line is get in touch with us so we can help you build and navigate your financial plan. It comes something as important as your money. We want to provide you and or you and your spouse a one on one opportunity to ask us any questions. You're just based on a specific situation you might give your money and attention it deserves and needs in order to grow for your future.

Producer:
All right. Great job, Bob. And once again, the number to call Safe Money Bob 908 359 2861. But do me a favor. Don't call Bob and bag on him about the Green Bay Packers and how they just can't seem to get things in line.

Producer:
2022. Please don't do that. I'm telling the listeners not to do that. Call Bob with your financial needs. Right, Bob? Once again, I had to do it, Bob. I'm sorry. 908i love you. You know that. 90835 That's well, you know what then I guess really that's that's the most important thing. 908 359 2861. or you can log on to SafeMoneyBob.com. Coming up, things retirees fear the most. We'll discuss that on the other side. We're back after this.

Producer:
Social Security will get a big cost of living adjustment next year, but there could be some consequences you might not have considered. I'm Matt McClure with the Retirement dot Radio Network Powered by AmeriLife. A new report by the Senior Citizens League says Social Security beneficiaries could see a cost of living adjustment or COLA as high as 10.1% next year. The reason? Inflation running at a 40 year high.

Mary Johnson:
This is a very, very unusual and unprecedented pattern of inflation that we're experiencing.

Producer:
Mary Johnson with the nonprofit group told WFTS TV that surveys show inflation has caused about half of Americans to spend their emergency savings, and people are carrying more debt on their credit cards. So the highest jump in Social Security payments since 1981 would be a good thing, right? Well, Johnson says it's better than no increase, but there are some things to be aware of.

Mary Johnson:
In fact, you can get penalized if you think your tax liability is going to be 10% more next year than you're paying now. You can be penalized if you don't send in estimated payments or have more money withheld.

Producer:
She told the TV station. The increase would not be enough to cover a jump in Medicare Part B premiums, which are taken directly out of Social Security checks. And she says higher incomes mean some seniors could no longer be eligible for some other government benefits.

Bob Loss:
And then a whole 15% were made ineligible because they were their incomes increased over the income limit for food stamps or rental subsidies or the programs in their area.

Producer:
So what should you do? Johnson says Prepare now. Talk to a financial advisor to help you get ready ahead of time and contact local nonprofits if you need help paying bills. So are you prepared for the unintended consequences of a larger Social Security check? That's a key question to consider as inflation impacts all our lives. With the Retirement dot Radio Network powered by AmeriLife, I'm Matt McClure.

Producer:
Great information there from Matt McClure discussing the cost of living adjustment. A quick reminder, Social Security upcoming cost of living adjustment for 2023. The increase will be 8.7%. This is up from last year's 5.9% COLA, bringing the two year increase to 14.6%. That, of course according to SSA dot gov. Hey listen, Bob provides comprehensive consultations at no cost to our listeners and there is absolutely no obligation. You only work with Bob if he can do better for you and I assure you he can and will. So again, to schedule a consultation, log on to SafeMoneyBob.com or call 908 391 8500. Financial Freedom with Safe Money Bob. And before the break, Bob, we were discussing some financial New Year's resolutions. And one thing that stuck out to me was talking about paying down that credit card debt, making it a goal to pay off your balance each month on that credit card. It should not be an emergency fund. The credit card. You can't use it for emergencies. You have to have 3 to 6 months of expenses set aside for unforeseen emergencies. And we hear about it so often, people, they get into an avalanche of issues when it comes to their finances and their debt because of that credit card debt.

Bob Loss:
Absolutely, Jim, great point. Yeah. So I have a strategy. I learned this through various groups that I've been associated with over the years and myself. So if you have credit card debt, unfortunately you got it and you have it, you don't want it to be your emergency fund for sure, a credit card. But if you have no other recourse immediately, that is your your safe haven for now. However, if you you do have somewhat of a steady income and you do have various credit cards, we give you a tip on how to pay them off efficiently and maybe on another show a different day, I'll go into a way to pay them off while funding your retirement at the same time. So I'll leave that little tidbit in your psyche here. But generally speaking, let's say I have five credit cards. Let's say 1000, one 2000, the other 3000, the other 4000, 5000. So five for three, 12, 14, 15 grand. So. The strategy I would use. I've used it in the past when I was much younger is I will pay the minimum on the larger ones. Pay off the small one first.

Bob Loss:
Then pay the minimum on the three larger ones. Pay off the second one. Call it the second smallest one. Next. Meanwhile, you're taking the payments you were making on the first one or the second one, and now you're going to pay the minimum on the largest balance, the second largest balance, and you're going to take the payments you are making on your smaller cards and pay off along with the payment on the third card. Pay that card off. And from there you're going to take those payments and also pay the minimum on the larger balance and pay off Card four. And then ultimately, you take the payments you were making on the previous four with smaller balances and pay down the rest remaining balance on your largest debt. So that's a way to do it just from cash flow. Now. For certain people and certain situations. There's other ways to do it. It's too much for me to go through now. I might have to make a segment on it, maybe an upcoming show, just to show you how it can be done differently.

Producer:
All right. Well, talking about paying down debt, how about paying off your mortgage completely. That's the title of this week's cost cutter.

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

Bob Loss:
Imagine being retired and not having a mortgage payment. Yeah. You still got to pay taxes. Yeah. Maybe you have HOA. If you're a townhouse, you don't have maintenance. The happiest people who meet with us. There's 2 to 2 sets of them that you will meet with us for. Our annual review are the ones who have paid off their house and if retired, those who happen to have guaranteed income. Those who have guaranteed income are happy people, especially if they have no mortgage. If you have to pay a monthly mortgage payment during retirement can absorb pretty much it can absorb one or both of your Social Security. Incomes for a married couple or the entire income, depending on how large the Social Security check is for a single person. So we strongly encourage all of our prospects and clients to pay off their mortgage in a smart way. That said, we want to try to try to avoid paying off the family home with your IRA money because you will be paying tax on the money, withdraw. So remember, just think of this. You wouldn't pay a 20% real estate commission. So you don't want to have to pay 20% in taxes. When you pay off your mortgage on your family's primary residence either. Now, there can be exceptions. Let's say someone personally no has a mortgage and it's modest. It's at 2.1%. He locked in probably a year plus ago.

Bob Loss:
Now that person in that situation, you know, he has the payment. They both he has a pension. We have got a large one K for him instead of paying off the mortgage with other money. At this point, he could get over 5% if you so choose to put put it into a four or five year guaranteed fixed interest annuity. When an insurance company, when no fees, charges their costs. We encourage our clients to use money in their investment account. If that's what you want to do, draw cash value from your life insurance or savings accounts. Now, if you borrow it from your life insurance and pay yourself back, you basically recoup the money that you just paid off on your home. And I had a client do that when they bought their retirement home 12 years ago. And she's now recouped the whole down payment. And the policy looks as if she never borrowed it. So it actually grew once she paid it all back. So pretty good stuff. And you can also consider selling art if you have this collectibles, extra cars. So you have another piece of real estate. Some people I know have land that they're never going to use, and it's in Tennessee or South Carolina or whatever, sell it off to try to get some decent money for it to help pay off the family home. You know, the tax burden on the sale of these types of investments.

Bob Loss:
It could be minimum to zero. It just depends. And again, if you do it the way I just described, there is no tax. Housing is one of the biggest costs retirees face. Eliminating your mortgage, if it makes sense. There's still a lot of parameters. Removes a sizable monthly bill from your retirement expenses. Obviously, as I mentioned earlier, you need to pay taxes and maintenance for your home. That should be part of a budget. When do I have to redo my landscaping? Once the house needs to be painted. When I need new appliances? A lot of people don't think of these things and all of a sudden wham! 2500 for a refrigerator or 1000 bucks for a dishwasher or 1800 for a washer and dryer. So it's not just taxes and insurance. Even if you have no mortgage, you have to plan for the unexpected. So that kind of sums up what I would say is the reasons why you would or would not pay off your mortgage. Again, for a lot of people, it makes a lot of sense. It's just nice knowing, again, you don't have that debt hanging over your head again based on interest rate. If it's tax deductible based on your cash flow, do you have a pension or Social Security and one of the higher or higher scale of payments? Then you can take all that into effect and say, Hey, you know what? I don't want to necessarily take the money I have on hand because of where it is, especially if it's an IRA or for one K, because then you're getting whacked big time.

Bob Loss:
So that may not be the right move. But in general, again, call me 908 359 2861. Leave a message. Clearly a message. One of the messages I got this weekend, Saturday, I believe I the person couldn't get their name. I got their phone number off of the caller ID and they were asking about me sending them information on chapter 15 and Annuity 360. So it's just much easier for my staff to accommodate you. Whether you want to have a meeting with me, you want me to send you information or both. So just again, call 908 359 2861 and leave a clear, concise message so we can help you out. Or again, you can always go to SafeMoneyBob.com and just book a call with me. And then once we speak and I get a better feel for your situation, you ask me some questions, I'll give you some answers and we'll see what kind of resource are they going to supply for you? Free of charge, of course. But that's pretty much that's the deal with the mortgage payoff. Don't pay off. Each situation is different. So that's why you want to work with Advisor. And we'd love to be that person.

Producer:
Bob I do have a question for people who have a couple of different properties and they're trying to pay off their main mortgage, but the housing market may not be all that great depending on where they live. How do they go about trying to maximize that profit of selling that second home while also trying to pay off that mortgage of their main home?

Bob Loss:
Well, I just thought again, we have a lot of clients, you have a lot of examples. And I have one just just like this. So married couple, they had a place, you know, the primary residence locally. They had an investment property in a different town. They just sold that investment property and they are going to pay tax. I believe they made $250,000 profit and they're going to pay about 50,000 in taxes or net around 200,000. Now their mortgage is around 3.3%. So the question is, are we going to pay it off with those proceeds and other proceeds? Savings, cash, Right, insurance loans, what have you. In their case, they can pay it down and it will re amortize and re recalculate to a small payment. So in your situation, it may make sense to just pay down the loan to a certain level, probably under 100,000 in this situation. And you still have your taxes and insurance, but the rate being at 3.3, I believe it is. It's crazy how I memorize all the stuff for everybody. Their rate. It could make sense not to pay the whole thing off. It just depends. It depends on a lot of things you have to have. If you have other investments that aren't going to be a big tax burden, like not qualified money, not IRAs that you can use and you can save that cash flow that you were paying into the mortgage and start putting it away against your you're building or refilling your coffers and that's the way you can do it.

Bob Loss:
I sold property recently. I guess that was a recent. My gosh, it's been two years already, but same thing, you know, shore up the finances, especially with a second one going to college in my case. So. But you're paying off your first. You can utilize other properties. And the other thing, too, and I kind of been bouncing back and forth with this myself is the responsibility of the other property. You know, in the case of a single home, I still got to worry about the outside, the inside the roof, my case, the parking lot, not just a driveway. So it also can take some stress out of your life as well. And there's still it's still becoming more of a seller's market. However, there's still the lights still on. All right. To do that, you're not we're not in a code red situation at this point. But if it's some option that you have and it could definitely make sense for you.

Producer:
All right. Well, great job, Bob. Don't forget to subscribe everybody to the show in podcast form, Apple, Google, Spotify, or wherever you get your podcasts to listen to our catalog of episodes. Previous episodes of this show, again, Apple, Google, Spotify for the podcast. Coming up next, things retirees fear the most. 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.

Producer:
As the song says. It's the most wonderful time.

Producer:
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 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 a 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 a Retirement dot Radio Network powered by Amerilife. I'm Matt McClure.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all can 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. AM1490 and 107.3 FM. Protect your hard-earned money today and schedule a free consultation now at SafeMoneyBob.com. Thanks for listening to Financial Freedom with safe money Bob. To schedule a free consultation call Bob at 908 359 2861.

Producer:
Bcb Financial freedom with Safe Money Bob you mentioned Bob Ford Stokes' book Annuity 360 will play a snippet of that coming right up. And as per usual, we're glad you're joining us and we're happy to be educating you every weekend both Saturday and Sunday at 8 a.m. Hey, listen, if you're in the retirement red zone, meaning you plan on retiring in the next five years or you've just retired in the last five, please give us a call so we can help you strengthen your financial plan. We want to help retirees in the red zone to manage their sequence of returns risk. You can't afford to lose too much during these years, which means protection and growth is key. Bob, we know that there are things that retirees really fear.

Bob Loss:
Yeah, everybody. I guess what number one will be what retirees fear the most running out of money. I know it's shocking, but that can happen, especially what Jim just mentioned with the sequence of returns. So there's a lot of people who retire either. During 20 right before the pandemic hit and everything got shut down and the markets got whacked. So for those first 6 to 8 months, they were pulling their money. Those that had money in the market, not with me. So if my clients don't lose money in the market. And then so they had less of their money sitting there, they're pulling it out. It's going down. Now, fortunately, it did bounce back up until the past ten months, 11 months now. But yeah, sequence of returns can be a huge effect, have a huge effect on whether or not you run out of money. We don't run out of money. And the reason I mentioned all that is because the number one fear would be running out of money. It can happen to anybody. Hardworking Americans. It's sad, but it happens. So it's so. With Social Security cutbacks. Pardon me? You know, in 1940, there were 40 workers per every retiree. Today, there's only three workers for every retiree. Which is scary. And by 2050, there'll be two workers for every retiree. So that's just going to be what we call eroding factor. Potential. Potential eroding factors. Tax increases. What do you think's going to happen? Historically, tax rates are lower than they used to be. They have been. But with increasing national debt and government spending, many experts, I agree with them believe that taxes will have to go up.

Bob Loss:
In order to meet the nation's budget requirements. They never seem to take any programs away or cut the fat or whatever out of them. Even if they're not needed, they just keep that threshold. On inflation, which we're all suffering from badly right now. Cost of living adjustments, of course, was 14.6% for the inflation over the last two years. But it's the true inflation. They're not calculating it like they used to 50 years ago, I guess. Eighties, it's higher. I mean, you can't tell me. I mean, I'm paying probably, what, 35 to 40% more for gasoline? Not that I drive very much heating oil. My God. Went up for me on my other property. Probably 30% at least. Taxes, property taxes have gone up. So those things are all eroding factors. You know, portfolio balances going down too quickly, like sharp declines, you know, sequence of returns. As we as Jim mentioned earlier, it can be devastating for people in retirement red zone. You want to preserve preservation of assets while hopefully funding a long-term retirement but still have any ability to grow your money. So, again, reach out to me at 908 359 2861. Leave a clear message with name, date time and phone number and one of my staff will get back with you to set up a call for us to. See how you're doing and how I can help you. You can also go to SafeMoneyBob.com And book a call at me. I'll give you an hour just to go over your situation and answer any questions you have.

Bob Loss:
Kind of share how we operate, how I'm set up myself and go from there and see how I could be of service to you. So here we go. Another thing that retirees fear is our market crashes. What a surprise, right? You may want to consider reducing the risk you are taking with your current portfolio. Did you know that from 2000 and 2002, the S&P saw three straight years of declines? Let me go over some of them with you. So 2,009.1% down, 2001, almost 12% down. 2000 to 22% down. Then we got a little hiatus, and then all of us, I'm sure, remember 2008, three, 2008, and that was 37% down in one year. One year. So in 2018 was, oh, wasn't this horrible? It was 4.4%. But then 22, 20, 22 year to date. Down, S&P down almost 17%. So imagine your pull money out during these times. Some of you may have been retired back then and are still retired now and you're going through this again. So you definitely want to take some off the table if you can, and that's your desire. I have a client that just emailed me and was like, I don't want he retired. So we have access to his 401 K and his cash balance on his pension. And he's like, I don't want anything at risk. So I'm figuring out what we can do and how much liquidity we we want to keep outside of any investments that we would do. Annuities probably fixed index for growth and or income and multi year guarantee annuities with a fixed interest rate, which I just checked are ranging on a three year or around 4.8.

Bob Loss:
To a five year old around 5.5, 5.6, a solid carrier. So it's just there's things you can do with your money and it doesn't have all the stock market. You can still grow it and not worry about it. And I can even create guaranteed income for you to depending on your situation. So again SafeMoneyBob.com Call me 908 359 2861 and someone will get back to you so we can have a chat. So I want to go over health care expenses. Another thing that retirees worry about in between prescriptions, common procedures and potential long term care expenses. Gosh, don't only think that a couple retiring this year may need to spend upwards of over 300,000 on health care in their retirement. So just imagine how that could ding somebodies financial security. I mean, imagine you have $700,000 sitting in your 41k or your old IRA or whatever, and then you're going to know, oh, my gosh, I have to spend almost 40, 45% of that in retirement just for health care. It's rough. So it's important to have Medicare A, B, proper Medicare settlement policy. Open enrollment is still going until December 7th. So you have, I believe, until next Wednesday and again, having to care for a loved one. I've watched this happen with my own family, with my grandparents, my mother having to care for them. She lives closer, her brother lives farther, I guess. Who takes care of them? Oversees them.

Bob Loss:
My mother. Guess who's home alone while she's doing that? My dad. So that went on for. Probably four or five years. But retirees have to care for a dependent parent or child will have to deal with additional monthly expenses. You have to look after the family member. Not only that, but the emotional stress like you want to visit and not be taken care of. And it gets to a point where some people not resentful but just disappointed in the last parts of their life, being at their caring for their parent, potentially. And I have like I said, I have clients that have special needs child or children, special needs child, and they've got to plan, well, what's going to happen? We're not around to take care of her because she's never going to take care of herself, unfortunately. So those are seven points I wanted to make regarding what worries retirees the most. So heed them all. If you want help with all those, give me a call at 908 359 2861 and have a clear message. When I'm going to staff, we'll get back to you. Set up a convenient time, 15, 30 or 60 minutes, whichever you prefer. And then also you can always go for the Internet savvy people out there. Listeners, again, thanks for listening. W w w dot safe money rom-com. Look a call again 1530 or 60 minutes free of charge. We'll have a chat and tell me what's going on. I'll ask you some questions. You ask me some questions, I'll answer them and we'll see if we want to have another chat.

Producer:
All right. Well, hey, quick reminder, Medicare's annual enrollment period ends on December 7th, less than one week remaining in this year's enrollment period. Let us know how we can help you with your Medicare needs. Don't hesitate to give us a call today and to ask your questions. We're back after this.

Ford Stokes:
Chapter 15. Bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed indexed 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 1900s 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. Early investors in these new asset classes were compensated for taking on the challenge.

Ford Stokes:
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 bond 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 24, 2020. The ten year Treasury note was yielding 0.64%, and the 30 year Treasury bond was at 1.27%. Reinvestment risk of Bonds. This is the likelihood that an investment's cash flows will earn less in a new security.

Producer:
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 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.

Ford Stokes:
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 were actually paying. Standard 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. And that was chapter 15 from Ford Stoke's book Annuity 360. Get your own copy today by reaching out to Bob at Again that number 908 391 8500. Or you can visit his website SafeMoneyBob.com and of course Bob, big news for you. Coming up here, you're hosting a seminar.

Bob Loss:
Yes. So I was able to work with in the past with Tom. He is. Don't worry. Retire happy. We're basically going to share steps to retirement security as a guide to a straightforward retirement plan and uncertain times. Tom will simplify your retirement journey in the seven Steps to Retirement Security. You'll learn how to make a trouble free plan for retirement with my assistance, of course, if you want it. With a sound financial foundation to build up for future generations, you won't spend all your money, but you want to have a comfortable retirement while you're doing it right. You want to avoid just in case, retirement and enjoy the fruits of your labors. You work so many years, so hard, save money. So he helps providing strategies, some of which I've touched upon during the past few months. Know whether you're a late starter in your retirement planning or your significant savings. The presentation outlines many things I've spoke about how to make the most from the least with the smartest amount, smallest amount of risk. So I will get that link up to you hopefully on next day or so. There too. On Save Money Bob, You can click on it register.

Bob Loss:
It's free of charge. You know, it's going to ask who advise you just find my name down the list there and I hope you enjoy it. I'll probably be under an hour. And once you hear that, if there's anything I can help you with that you were interested in, reach out again and save money. Bob, book a call with me or call 908 359 2861 and leave a clear message. Again, the date is actually Tuesday, December 6th, and it's at noon, 12:00 Eastern time, noon. So I'll get that link up. And if you want, you can always call me. You'll get 908 359 2861. Leave a clear message with an email address and I can have one of my staff email you if that's what you prefer the link so you can register and then hopefully enjoy the material. It's kind of like training for you and what's cool, I could get this set up with him, so I'm trying to bring value to everybody, all my listeners as well, not just for myself. I always say I have an army behind me. Well, he's one of my he's one of my peeps, so I just want to let you guys know about that.

Producer:
I'm most impressed by the fact that you said peeps.

Bob Loss:
Ha ha. Hey, you know, got to lighten it up sometimes. That's right.

Producer:
So it's this week in history.

Producer:
All right, Bob, on This Week in History, December 3rd, a famous birthday today. In 1948, English singer songwriter and television personality Ozzy Osborne was born. Ozzy Osborne was born. He served as the lead vocalist for the heavy metal band Black Sabbath in the 1970s. And of course, he went on to become a very successful solo artist as well, releasing 12 studio albums, the first seven receiving multiplatinum certifications. Let me ask you this. I don't know if you were much of a heavy metal guy, but was he better known for his time with Black Sabbath or as a successful solo artist? Now, people my age, my generation, we know him as what was that show keeping up with the Osbornes? We know him as a reality television personality, right?

Bob Loss:
Right. Yeah. It's more I was more. Let's see. Yeah, Black Sabbath was around when I was kind of getting into what kind of music I was going to listen to, but I was more of a hair band guy. So like his shot in the dark, I guess it was a cassette. Dare I say, not a CD I would play even today in my playlist, like I like it on my Pandora for free playlists, you know? And I am a subscriber. I have Hair Nation on my Sirius subscription. So yeah I was the guy could be blasted heavy metal one song and then I go around the corner and you'll hear like club music. So you just think, know what?

Producer:
I play wide range one on each end of the spectrum. Certainly also this week in History, December 4th on the business side, 1954, the first ever Burger King opened in Miami, Florida. The company originally founded as Insta Burger King is headquartered in Miami Dade County, Florida, and has over 18,000 stores in 100 different countries. Fun fact about me, Bob, I may have told you this off the air. I haven't eaten fast food in nearly now three years. I haven't had Burger King in probably about seven years. But again, this date in history, December 4th, if you're listening to the show on a Sunday, 1954, the first ever Burger King was founded.

Bob Loss:
Right. It's funny. I don't I never go there. I mean, I have went to the Blue Moon McDonald's just because I'm jonesing for it. And it's very far in between because I want to live. But but the fries. You just can't beat the fries for McDonald's fries. I like that. But yeah, my fast food, my son loves Chick fil A. We all like five guys and can't argue with Jersey Mike's subs. But hey, sometimes you got to get that food quick. Can't make.

Producer:
It. Well, I'll tell you what. Your son going on to play a collegiate sport That fast food kick that'll be they'll get that out of him very quickly.

Bob Loss:
Yeah. Know he'll be dining hall or whatever is right there.

Producer:
All right. Well, Bob, great job this week and one more time. How can people reach out to you?

Bob Loss:
All right. So, again, for the Internet savvy listeners, go to SafeMoneyBob.com. Click on the link to book a call with me again 15 minutes, 30 minutes, 60 minutes, whatever you prefer. That's one way. And then again, thanks for listening. Financial Freedom with Safe Money Bob.

Producer:
And of course, if you missed any part of today's show, subscribe to the podcast. Apple, Google, Spotify, or wherever you get your podcast for a back catalogue of previous episodes. And you can join us every Saturday and Sunday. Don't forget about that on the radio side at 8 a.m. right here on 107.3 WBCB. Have a great week everybody.

Producer:
Thanks for listening to Financial Freedom with SafeMoneyBob. 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 the results obtained in the use of this information.

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

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

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

Andrew Pelosi:
Some people will see a savings of perhaps 1000 per year.During tax time on their tax.Return. Others might see a little bit more. Certainly the brackets have changed. So the those who are in higher brackets will probably see more savings than those who are in lower brackets. But across the board, everyone's going to see some kind of savings.

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

Bob Loss:
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.

Producer:
Every little bit helps. 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 a Retirement dot Radio Network powered by AmeriLife. 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 a.m. 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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