1.27.23: Audio automatically transcribed by Sonix

1.27.23: 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 weekend. Hello again, everybody. Welcome to a brand new edition of Financial Freedom with Safe Money Bob, thank you for checking us out today and making our program a part of your weekend as we attempt to guide you through the jungle of the financial world. Let me say hi to my co-host and my buddy, my friend, financial expert and advisor. Safe Money Bob.

Bob Loss:
How's it going, Jim? Happy Saturday.

Producer:
All right. And coming up on today's show, Bob and I have the secrets to building a smart retirement plan through smart risk. Smart, safe and smart tax. Plus, Bob is back with another power tip of the week. And a quick reminder, Bob provides comprehensive consultations at no cost to our listeners. And there's absolutely no obligation. Zero obligation only work with Bob. If it's best for you, Bob will help you cut unnecessary costs in your IRA for one K or any other retirement savings account. Bob will also help you maximize your Social Security benefits for you and your spouse. So contact Bob today at 908 359 2861 or visit SafeMoneyBob.com Bob The secrets to building a smart retirement plan. No matter what your goals are, maybe you want to follow the 3% or 5% rule, but either way you need to build and maintain a plan, a steady financial foundation that will last throughout your retirement years. Smart risk, Smart, safe and smart Tax. S&p. Let's begin with a breakdown first, though, of smart risk.

Bob Loss:
So smart risk, What does that mean? Well, you want to build your smart plan by considering the risks you will face during retirement and learning how to best handle them. Smart risk investing is an investment strategy designed to maximize returns while minimizing risk. Smart risk investing is based on a concept that all investments carry some risk, and that only way to reduce that risk is to diversify. We've talked about that. You want to have a diversified portfolio. What does diversify or diversification mean? Diversifying means investing in a variety of asset classes, such as stocks, bonds, real estate, commodities, other financial instruments investors need. You need to consider your individual needs and goals as well as your risk tolerance. It's all part of the package here, so you want to think about all these things so risk retirees and pre retirees should consider. So here's some things to think about. So there's market risk. We spoke about this in many of my other shows. Your portfolio will be affected by changes in the market. Many of you experienced a negative change last year, though. We did bounce a little bit from October, but we still got some rocky, some waves ahead of us in this sea of uncertainty. But, you know, you want to have systematic and or an unsystematic risk could cause drastic changes in your investments. So you have to be prepared if you are invested in things that can go up or down.

Bob Loss:
Be prepared for volatility and uncertainty in the market by having practicing tactical asset allocation. So we want to consider interest rates. Interest rates change when there's a dip or a rise in the overall economy. We've experienced this. We had inflation. So what happened? The Fed took a sledgehammer to the economy to squelch demand and raised rates drastically changes. Interest rates can have a significant effect on all of us, on American families, and it can affect all of us in the economy as a whole. You'll see, if you've noticed, there's been a lot of layoffs with various companies. I think Amazon, Microsoft, Google, to name a few, just off the top of my head. And we have to deal with inflation, which I just mentioned. Why did interest rates go up? Because they're trying to get inflation to slow down. So inflation has a significant effect on our buying power, our spending power of all of us American citizens. You know, as inflation continues to rise over spending power, our spending power decreases. So what we can buy, our dollar goes less and less farther than it used to when planning for retirement. It's important to consider how rising inflation may affect your retirement accounts and your future budgets. That's a we have a tool that we'll use on occasion where we can figure in not only rate of return assumptions, but also inflation assumptions to see, okay, do I really have enough? Am I really where I want to be? Do I really have to pay attention to this? So that's just something else that we offer.

Bob Loss:
Call me at 908 359 2861. Leave a message. Someone will get back to you to set up a time for us to speak or go to save money, Bob and look at. Call their 15, 30 or 60 minutes so we can go over your situation further. Free of charge. No obligation, of course. So back to our things to consider public policy. You may not think of this. Public policy affects everything from taxes to retirement account rules to contribution limits. Retirees should pay attention to policies related to their pension plans, Social Security benefits, and health care coverage. You want to be aware of the latest tax law changes and how to use them to your advantage. So tax laws are always changing, right? Brackets change, rates change. So you want to be aware of these things and definitely work with your tax professional or an adviser like myself to mitigate those waters as well. And then there's timing. Timing is a biggie. So you could choose when you retire, hopefully, but you can't predict what the market will look like when you do. People retired last year. Imagine they did not think their portfolios were going to go down ten, 15, 20% or more. So that that was a big shock. You know, your retirement may look a little different if you retire during a recession, which you may be going into than it would in a more favorable market.

Bob Loss:
So you want to be you want to by having a formal retirement plan, you can be prepared for whatever happens. Preparation. What alleviates stress? If you have to do a presentation, What alleviate stress? Being prepared. If you have to go over some points with someone with that stress. Be prepared. So you want to be prepared for all of these different variables that could occur. You want to talk about liquidity here. So liquidity refers to the ease with which an asset can be bought or sold in the market without affecting the asset's price. So you want to plan. It allows sufficient access to your savings and funds. So example, you want to have bank accounts, maybe money market CD's, high cash value life insurance, then you may have funds in different investments, you may have a Roth, you may have a regular IRA, you may have a for one K for three, B or 457. Just want to know your pecking order for where you will access money first. And that's a good thing to know. You have sequence of returns, which could be a great thing or a horrific thing. So if your retirement funds were to take a massive hit, if the market experiences a downturn, early part of your retirement. I've seen it, not my clients, because they can't lose with the things that we implement, but on other parts of their portfolio.

Bob Loss:
If they do have such money in the market or other people that come to me after they've gotten a little haircut, we'll call it, you know, they'll want to take money out. And then unfortunately, they're pulling money while the market's going down. So it's like a double whammy. So you while you cannot you can't plan for it in a way, but you can change what you contribute to your accounts and use guaranteed income to offset this. So guaranteed income, not not rates of return, setting up guaranteed income, knowing what assets can grow without risk. That's very important. And sequence of returns can create a horrific situation or it can work out really well. But you just want to again, stay on top of everything. Everything. And that's what we're here to help you do. Then there's longevity. We're all living longer. Hopefully we're living longer than ever before, statistically, which means your retirement savings will have to last longer, of course. So make sure when you're planning. We talked about this last week. You're planning to age 90, 95, 100. You want to make sure you're planning for your money to outlive you, not you outlive it. And you don't want to worry about finances and retirement and become a financial burden to your children. It's not a fun life when you're worried about paying bills. Want to go out and have go get a pizza or go to the movies or go to go to a play or go to a concert or go visit loved ones that happen to be farther away.

Bob Loss:
And it cost money. You know, you want to plan for all these things ahead of time or make adjustments. If you are in retirement right now, you know, we can help you do that again. Give me a call at 908 359 2861. Leave a message. One of my associates will get back to you. Set up a call or visit us at Safe Money BBC.com and click on the calendar link to set up a call at maybe 15, 30 or 60 minutes, whichever you prefer. So we're going to continue on here. So excess withdrawals, you want to avoid unwise withdrawals is above what they call the 4% rule. And it could be 3%. It could be 5%. It depends on your portfolio and your needs. This rule can help control withdrawals and make sure you don't draw down the account too quickly. You want to adjust based on market conditions. So if you're in a sequence of returns where you retire and the market's going down, you may want to try not to tap into monies that are affected by the market. Maybe you have other reserves or other funds you can use that were not affected. And you also may want to consider taking less or none at all and dip into something else if you are in the market so that you can allow your funds to recover.

Bob Loss:
Hopefully over time you want to consider health expenses. Health expenses. Medical costs are one of the largest expenses Americans have. We prepare for medical costs and retirement by having a medicare plan, possibly a supplement plan, A, B, etc.. And you want to you want to cover your cover, your spouse, both of you, for your. Lives and in loss of a spouse. If your spouse passes away, you will lose one or one of your Social Security benefits. You want to be prepared for this by ensuring you have savings enough. You obviously will keep the benefit that's higher for the surviving spouse and re-employment. While some retirees may not may going back to work, some may not. You want to make sure your savings is enough to cover your living expenses and give you the quality of life that you deserve. And again, a quick tip. Watch out for fees. Most investments include some fees that you have to pay. We can help you choose investments with lower fees, and fees are not paid upfront. They're paid based on a lot of times your assets and they come out of your returns. So while you never see the money taken out to cover your fees, your returns will be lower if you have high fee investment. And that's something we can help you with as well.

Producer:
All right. Great explanation there, Bob. An abundance of critical information in this first segment. So if you missed any part of today's show thus far, be sure to subscribe to the programs podcast, Apple, Google, Spotify, or wherever you get your podcasts. And don't forget to leave a review if you have time. We would really appreciate that. Give us a nice five star rating with that review and let's get the word out about Financial Freedom with Safe Money Bob again, airing every Saturday and Sunday right here on 107.3 WB KB. Coming up smart tax in your retirement Financial Freedom with Safe Money Bob we're back in a moment.

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

Producer:
It's Financial Freedom with Safe Money Bob welcome back to today's show and don't forget to reach out to Bob for all of your financial needs. Visit Safe Money Bob to learn more. A lot to unpack from that last segment. Bob discussing smart risk risk retiree and pre retirees should consider market risk, interest rates, inflation, just to name a few. Not in any particular order, but I was reading an article on Forbes about smart retirement, and the story really listed off some great points. But here's the conundrum. Those bullet points listed in that article don't really have as much relevance without discussing smart risk in your retirement.

Bob Loss:
Yeah, So when you're looking at your overall picture, you've got you've got to look at where can I grow my money? Where can I not lose my money? Where is it liquid? Where is it tax efficient? Where is it fee efficient? These are all things that you want to consider when you're looking at retirement. Just even going through life. You know, a lot of you out there, I'm in my mid late fifties, you know, but your kids, you know, even the kids in their twenties and thirties, these are things that they should consider, you know, putting money away, paying himself first, being tax efficient, build an emergency fund. You know, those are all important as well as looking at your your risks And smart risk is strategic risk diversification. We went we just touched upon that in the first segment. So very important, very important things to consider.

Producer:
All right. Well, a quick heads up. There are so many reasons why you should meet with an advisor, financial professional and some of those reasons, if you don't have a formal retirement plan. We're talking about that today, giving you the secrets of how to create a formal retirement plan. If you don't understand the risk you are taking with your investments. Another example, or if you don't understand how to manage risk in your portfolio as you get older, call Bob today. He can help you out with all of that. 908 359 2861 or visit SafeMoneyBob.com. Moreover, I want to bring up a 501. Nonprofit Bob that you're involved with policy versus politics.

Bob Loss:
In essence my family I'm a founder. I'm a donor. I have commentary on air briefly. It's basically an organization is a 501 C three is Jim mentioned to not for profit or nonprofit. What the goal is is to have discussions, interaction, etc. with policy, everything gets politicized, right? It's not about policy. It's always about politics, right? It's always the person, a character, this or that. It's not about the platform. Everybody ultimately wants to have a good life. They want an opportunity to have access to health care. They want to feel secure. All those things are important to all of us. You know, a lot of us just have different views as to how we could get there. So policy versus politics dot org is the website. You can simply subscribe, if you like, and just receive some emails with content. If you want to get more involved, just go into the site a little bit more. If you want to ask me about it, you can always reach out to me, give me a call, or go to my website and book a call with me about this in particular. But it's about the whole I guess the whole mission is to be able to help disseminate or get information from reliable sources.

Bob Loss:
That's just that information. We just want to get information out to people so you can make your own decision. We never tell people what they should think. We don't want any of our contributors to tell people what they should think. It's really about getting information that's accurate and verified. You can and you'll see the sources, and this way you can make your own decisions, whether it's in your daily life, you know, talking about having having a nice discussion and not an argument with family members, friends, colleagues, associates, you know, it's it's refreshing. We're just trying to get away from the whole here's not really what it is. It's here what we think we want you to think it is. And that's what the whole nonprofit's about. So again, if you want to learn more or you want to get involved, just visit w w w dot policy versus politics dot org. And if you can reach out to me if you want to learn more about it.

Producer:
Yeah. And what's interesting about what you're doing, Bob, is in the name, first of all, policy versus politics, you would think there would be politics, but that's something you're sort of, it sounds like to me straying away from and this is the first time we've brought this up on Financial Freedom with Safe Money Bob So what in the next few weeks, the next couple of months? What is going on at this nonprofit that people should know about.

Bob Loss:
So we're going to be we're actually building out our base of contributors. We're also raising even more and more capital so we can keep spreading our our, I guess, presence on the Internet and nationally and so forth. We're just trying to reach more and more people, get more and more people involved. And it doesn't matter what side of the aisle or your opinion or anything. There's people from all sides that are part of it and contributing to it so everybody can listen to everyone else's point of view. So the next few months, we're going to grow out our reach. We're going to hopefully be able to. Disseminate more information, just more and more content, keep increasing the content, quality content on many different areas, many different subjects, so that hopefully we can grow our audience, grow our audience of people who want to know what's really going on, don't want to listen to the main media. I call it the mass media, really don't want to go there. You really want to learn. We're trying to help people learn what's really going on, whether it's locally, statewide or nationally on their own. And you decide that's the thing. You decide what you think you know, not not someone else. And that's really a big part of the mission. And again, getting accurate information with accurate or verified or solid sources so that everyone who is receiving any communications from us or part of it or whether it be a donor or whether it be a contributor or both or all of that, it could be young, it can be old. Does it matter? We just want to we want to help people understand what's really going on with policy, regardless of the politics, hence policy versus politics. Dot org.

Producer:
Okay, one more time. How do you reach out about that?

Bob Loss:
So you can just go visit w w w dot policy for politics dot org. Just check out the site if you want to subscribe. It's free. We're not going to bother you or anything. You'll just get communications with different things that are going on, different milestones that may be hit, whether it be our audience or our database as far as how many people we have, things that are going to be happening moving forward, growth just kind of overall what's going on with the organization. It's it's still kind of young. It's only been probably a little over a year, probably a year and a half. I mean, it's been in the works for more than that. But really live, I think end of 21, I believe somewhere around there was where it happened. But basically that and if again, if you want to, you can always reach out to me to either make a call, even if it's a short call, I can talk to you about it. You know, go to save money Bob dot com or go to give me a call at 908 359 2861 and leave a message You know we can have a chat about it as well but you can go to the website, you can reach out to me, whichever you prefer.

Producer:
All right. Well, thanks for that, Bob. We're up against a break. Coming up, smart, safe in your retirement. Plus, Bob's power tip of the week. This is Financial Freedom with Safe Money Bob.

Producer:
You're listening to Financial Freedom with Safe Money Bob, to schedule your free no obligation consultation visit SafeMoneyBob.com.

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

Ford Stokes:
Young was given an annuity that would pay out something like $40 Million over the 50 years that followed. Given the fact that some players were not paid for playing in the final season or other seasons of the USFL, accepting the annuity appears to have been a genius move on the part of either young or his agent. The annuity payments have lasted longer than the league, and it's safe to say that he's made more money than probably anyone else involved with the league. To be fair, it couldn't have happened to a nicer guy. Even with a large signing bonus and salary, he continued to wear old jeans and drive a 19 year old Oldsmobile dynamic. In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company with a staggering number of pro athletes going broke after they retire. It's refreshing to read stories about players who made smart financial choices. Shaquille O'Neal. One player who's used annuities to his advantage is retired star Shaquille O'Neal. Over his 19 year career, he generated $292 million in total compensation. In retirement, he is projected to make as much as $1,000,000,000 from endorsements, even after his career is long over, thanks to a wise agent who made him put $1 million annually into annuities from his rookie year onward. Shaq lives off the income the annuity generates with his endorsement legacy for his children. Shaq scenario demonstrates how pro athletes and other prodigious earners can protect themselves against their own personal spending errors.

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

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

Producer:
Guide questions Safe Money Bob is here to help visit Safe Money Bob Dotcom today.

Producer:
Welcome back. Inside Financial Freedom with Safe Money Bob, we've covered a lot today, so if you missed any part of the show, go back and listen to the podcast catalog Apple, Google, Spotify or wherever you get your podcasts. And you can listen to previous shows, by the way, on those platforms as well. Let's crack open this week's Power Tip of the Week.

Producer:
It's time for Safe Money Bob's Power Tip of the Week.

Bob Loss:
All right, so here we go. Now, this may not necessarily be for all of our audience, but what I want you to do is just listen to what I'm going to tell you about is the power tip of the week and show today. And maybe this is something you can share with a kid or depending on how old you are, a grandchild. Just just give them this tip. All right? This is pretty powerful. I I'm going for memory on it, but I remember this from when I was very young in in my career. So I was probably in my late, mid, late twenties. There was an example that was brought up to us. So here it is. So let's just say you have and I might be changing it a little bit, but I think the message is clear. So you have twins. Let's just say one goes to school and goes on to get their master's, doesn't really put any money away, can't write another one, goes into a trade and is a saver and not a spender even for a kid. All right. We're going to use a 19 year old, for example. And if I'm doing this correctly, that 19 year old will put away I thought it was at the time an IRA amount of 2000 a year. I think that was the number. So the bottom line saved for 8 to 9 years.

Bob Loss:
All right. And it stopped saving based on certain parameters. You know, probably an 8 to 9% growth rate At the example I'm giving you just say 8%. And save for nine or ten years and stopped that person, that 19 year old at 65. Again, we're not talking about taxes, whether it's tax deferred or not. I'm just talking about the total number would have had around $1,000,000 I think was 955,000, somewhere around a million bucks saved. Now, his twin sister or brother who went through school and didn't save anything until age 26 or 27 and put the same amount of money away a year, had to save 39 years to get near where the other sibling was from an asset standpoint, total asset, total money. So the power tip is when saving and it's pretty evident when saving time is on your side, when you have years, when you have time for for money to not only accumulate it, but let it grow and compound and especially do it efficiently, you know, what do we talk about? Tax efficient, fee efficient, mitigate risk as much as possible if you do those things. And again, if you can share this with a younger person, I try to tell everybody I know that's their twenties or even 30, even 30. I mean, if you can start saving in your early twenties, you're so far ahead of the curve.

Bob Loss:
And I have actual clients who are that young, believe it or not. Now I'm dealing with the children of my clients who are original clients, and now they're clients that are put money away. I think I have one was 20 years old. I started him. I think I have him put in away. It's not a ton, but it's like 3000, 3000 504,000 a year. That kid's going to have well into almost a million bucks in a very safe, highly, highly funded, specifically designed. Life insurance policy that he'll access this this individual will be able to borrow his own money probably within 5 to 6 years and never have to take a car loan. He may be able to take that and borrow from himself to put a down payment on his first property, his first house for his townhouse, whatever he buys, pay himself back. So time you want to definitely you want to definitely save and just tell again your children, your grandchildren just. Have them start saving. And if they work with someone like myself again. You know, call me at 9083592861 to book a call. Someone will call you back to set it up or go to SafeMoneyBob.com and book a call there as well. So I hope that helps.

Producer:
All right. Bob's power, tip of the week. We've got about 5 minutes left in this segment, Bob. The secrets to building a smart retirement plan. We've covered smart risks. So now let's break down smart, safe.

Bob Loss:
All right, so here we go. So we had smart risks talking about all the risks out there. So now we're going to talk about smart, safe, and hence. Save money, Bob. This is his wheelhouse. My wheelhouse. So smart. Safe investing is an investment strategy designed to generate the highest possible returns while keeping risks to a minimum or none at all. We've discussed in past shows fixed index annuities. We'll call them. Fire's fire is our insurance contracts to provide a guaranteed income stream for your retirement. They are seen as an alternative to traditional bonds and provide a way for investors to protect their retirement savings from market volatility. Fire are designed to provide protection from market downturns while providing potential for growth. So you still have growth potential. You're eliminating market risk. You have options within these contracts to have guaranteed income at some point that you choose. You can choose to enhance that guaranteed income by purchasing a rider if you so choose, or you could choose to not do that. So there's benefits. Let me discuss benefits of fire. They include protection from market volatility. You just mentioned that fixed indexed annuities provide protection from the market downturns. Since the annuity is linked to the performance of an underlying stock market index or basket will say the income is not directly affected by short term market fluctuations. This makes them attractive options for investors who are looking for a steady and reliable income stream, potential growth fee mitigation, all those things in tax deferred growth. So it's not an IRA, not a Roth if it's just nonqualified money.

Bob Loss:
Money that would be sitting in a brokerage, perhaps. This means that earnings on the annuity or in the annuity are not subject to taxes until you withdraw the money. So it's tax deferred. You do not pay tax unless you pull the money out. And if you happen to be a Roth, which already is tax deferred, when you get to taking income out of the annuity, it's also going to be tax free. So again, another benefit of fire is the lifetime income stream. You don't have to worry about breaking your budget and enjoy your discretionary money with an income you can count on and never outlive. So with annuities and you set up income, if it's a lifetime income rider per say on fire or a fixed indexed annuity, you can never outlive that money. And in many cases you can have yourself and or your spouse be the recipient until either one of you two, the last one is passes on so it will not outlive you. That's very, very important. You know, it's not relying on sequence of returns. It's not reliant on stock market returns or average annual return. These are guarantees you're utilizing mortality credits when you turn on an income stream from an insurance company in the form of a lifetime income rider or immediate annuity. The longer you live, you win, right? You win, and you're not worried about what the market's doing because you know your income is guaranteed.

Producer:
All right. Once again, great information there, Bob. We step aside. Smart tax in your retirement. That's coming up. This is Financial Freedom.

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.

Producer:
She says her love for me. Can never die. You may already know what you want your retirement to look like, but do you know how to start planning to get there? I'm Matt McClure with the Retirement.Radio Network. Powered by AmeriLife.

Producer:
That's a question you must ask yourself before you start plotting out your retirement planning journey. After all, if you don't know where you are, it's pretty much impossible to get to your destination. Step one is keeping track of money that's coming in and what's going out, otherwise known as a personal budget. It's an important thing to have, but a Gallup poll from 2016 found only 32% of couples keep a written budget of any kind.

PBS:
A lot of people tend to think of budgeting as prediction, estimating what you'll make in future months and how you'll want to spend it. But the most effective budgets work exclusively with present dollars. After all, you can't give orders to soldiers that don't exist, so the size of your army is only how much money you currently have in your bank accounts. And as general, your role is to give every last one of those soldiers a job to do.

Producer:
That from PBS's $0.02. Now, once you have a basic idea of what you're dealing with, reach out to a financial advisor or professional who can go more in depth.

Ford Stokes:
We want you to do a financial checkbook checkup. It's just like getting a checkup at the at the doctor's office.

Producer:
Ford Stokes is founder and president of Active Wealth Management. He says getting a smart inspection of your finances is essential.

Ford Stokes:
You want to review your accounts, you want to look at your IRAs, your four links. Anywhere you hold assets, including cash, you want to check your balances, you want to review rates of return over the last 12 months, three years and five years. You want to answer this question, Do you have an income gap or do you have an income surplus?

Producer:
Understanding where you are now will help you plan for the retirement you want, leaving your future in your hands instead of the hands of the market or the IRS? So are you ready to reach out to a financial advisor for a smart inspection of your current situation? That's a key question to consider before you start your retirement journey with a Retirement.Radio Network powered by a life. I'm Matt McClure.

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

Ford Stokes:
Chapter 13 The Annuity. That is just right. The fixed indexed annuity. Big idea. A fixed indexed annuity gives you a portion of market like gains without market risk. Your investment is tied to an index but not directly invested in it. How does it work? And fire gives the owners or annuitants the chance to earn higher yields than fixed annuities. When the index they are tied to performs well, they typically will also provide some protection against market declines. The rate on an fire is calculated based on the year over year gain in the index or the average monthly gain over a 12 month period. Fires often have limits on the potential gain at a certain percentage. This is known as the participation rate. The participation rate can be 100%, which means the account would be credited with all the gains, or it could be as low as 25%. Most fiAs have a participation rate between 80 and 90% benefits guaranteed income stream with Americans living longer and spending more time in retirement, many retirees are concerned about outliving their savings. In turn, they are searching for a product that can help ensure a steady income stream for A IS are designed with guaranteed lifetime income so you can never outlive your earnings diversification of portfolio. A balanced portfolio is essential for managing risk and reward in the financial markets designed for the long term phase are a great retirement vehicle to ensure you are not putting all your eggs in one basket for a IS offer the ability to make some money without the risk of losing it. Secure principal. Even with market volatility, investors will not lose value on their fixed indexed annuities. Your savings aren't exposed to market fluctuations, so even in a negative market return, you will not fall below zero.

Ford Stokes:
You can never lose your interest once it is credited to your principal. Tax deferred growth fees offer long term tax deferred savings. As long as your money stays in the annuity, you will not be taxed on the interest earnings. Once you receive a payout, the annuity will be taxed just like ordinary income predictable earnings. Because fees offer predictable income, Americans feel more comfortable when withdrawing funds from these retirement vehicles as opposed to an IRA or for one K. Choosing an FIA is an efficient way to plan for your future as your interest earnings rate always remains somewhere between the interest rate floor and the cap. No matter what happens to the market, you can still count on payments throughout your golden years. Potential drawbacks of fixed indexed Annuities Surrender Charges. A surrender charge is a type of sales charge you must pay if you sell or withdraw money from a fixed, indexed and even a variable annuity during the surrender period, a set period of time that typically lasts 6 to 8 years after you purchase the annuity, surrender charges will reduce the value and the return of your investment Withdrawal limits. Almost all fixed indexed annuities play surrender free withdrawal limits within the annuity contract that generally range from 5 to 10% of the principal. While all annuities must be armed, friendly and provide for a penalty free withdrawal from a qualified annuity account equal to the RMD requirement for the client's age carriers limit the amount of withdrawal to enable them to grow the money invested for themselves and the client not suitable for short term investing. If you want to grow your money, but you also need access to 100% of your money, then a fixed indexed annuity may not be right for you.

Producer:
This part of today show Financial Freedom with Safe Money Bob is available wherever you listen to podcasts and online at SafeMoneyBob.com.

Producer:
Welcome back. Inside Financial Freedom. Great information. In today's show, we've discussed smart risk and smart safe in retirement on today's program. And between smart risk and Smart Safe. What are some of the key points, Bob, to both of those elements when it comes to creating a smart retirement plan?

Bob Loss:
So smart risk is all about diversification, right? We talked about having various asset classes that could hopefully go up or down and you can balance and have ones up, You sell ones down, you buy and definitely want auto rebalancing to that effect. Whether you you have your own retirement account that you have to control or if it's still a for one K where you could set up automatically while you're growing your retirement nest egg, or if you left it for whatever reason at your previous employer in a smart safe. Again, my wheelhouse is basically allowing your asset to still have growth potential, but you're eliminating or mitigating risk, you're eliminating or mitigating fees. And we're going to get into a little about the third, third phase of this whole deal, which is smart tax. But basically, those are some things to consider when you're talking about smart risk and smart safe.

Producer:
Yeah. And again, reach out to Bob. Call him today. 9083592861 or log on to SafeMoneyBob.com For more. The Paris Accord, the headline of This Week in History. It's this week in History. On this date in history. Bob A historical moment. On this date in 1973, the Vietnam War came to a close with the signing of the Paris Accord. The document ended America's longest war at the time, and in exchange of prisoners, the United States forces performed a unilateral withdrawal of troops from South Vietnam. The official negotiations began in 1968 with multiple starts and stops before an agreement was finally reached between all parties involved.

Bob Loss:
I remember that I actually learned that in history. I think I always loved history class, social studies. They used to call it even through high school. I took it. And you know what I mean? I like to know. I think it's important to even back to the whole policy versus politics deal. It's good to know the history, not what people want to make it look like or what they want to say. It was like what really happened. You know what I remember? I felt sad for the soldiers because the soldiers have nothing to do with policy. They just did what they were supposed to do and did what they were told, and they followed orders. But the way they were treated when they came back from there was just horrific. I mean, it was ridiculous. They just did what they're supposed to do in the best interests of our country based on a policy that was in place. And they were sent there and they went and they had to go because that was their duty. But yeah, just again, even looking at Ukraine now, I mean, it's just to think you still have war going on now, you know, you're just like, whoa, It's just, I don't know, ego, you know, trying to take over different things. It's just not good. It's just not a good thing. It's not good for the world by far. It's definitely not good for the world. So hopefully all that will work out eventually.

Producer:
Also this week in history on the pop culture side, on this date in 1976, the first episode of the sitcom Laverne and Shirley aired on ABC television. The show aired for eight seasons from 1976 to 1983 and became the most watched program on television by its third season. In total, the program received six Golden Globe nominations and one Emmy nomination. All right, Bob, let's discuss smart tax in your retirement plan.

Bob Loss:
So did you know that different investment accounts are taxed differently? I mean, hopefully, if you've been listening, I hope you do. But my understanding how different accounts are taxed, you can ensure your money is working, how you need it to and when you need it to. So you want to divest from the IRS, right? We talk about getting rid of the IRS as your partner. So you want to divest from the IRS. We want to divest them from your retirement accounts with these two strategies. The first strategy involves Roth IRA. So a Roth IRA is a type of individual retirement account or IRA that allows you to contribute after tax dollars to an account that grows tax free. This means that you pay taxes on the money or you pay taxes on like I like to call this seed money. You contribute to the account up front, but you don't have to pay taxes on the money when you withdraw it during retirement. So future tax increases should not affect this portion of your portfolio, so it should be grandfathered. Heck, I hope it would be. And basically what you're doing is you're paying tax on the seed. So let's say you contribute 100,000 over the course of your life into a Roth. So you pay tax on that 100. But as long as it's been in there, I believe over five years, you're over 59 and one half. You can take it out, take out your money tax free, and you won't pay tax on the money.

Bob Loss:
Let's just say that 100,000 grew to 400,000. So that 400,000 is tax free. So you already paid the tax on the seed. You're not paying a tax on a flower or the harvest. The garden seeds in the garden, the harvest from the garden. So the benefits of a Roth, well, we just talked about it. Tax free withdrawals, withdrawals from a Roth IRA in retirement or tax free, which means you don't have to pay tax on the money when you take it out because you're ready to pay tax on it before you put it in. You can do Roth conversions. We talked about that end of last year. If you're eligible, you can convert your traditional IRA into a Roth IRA, which can be beneficial to you, especially if you expect tax rate to be higher in retirement. And it's also beneficial because, again, you're not paying a tax on this big lump sum as you take it out during retirement when you really need to keep every dollar because you're probably on more of a fixed income, you'd rather pay tax on the smaller amount, which is what you put into it. And again, you can use strategies like bump the bracket. I can explain that again, reach out to me, save money. Popcom book a call 1530 or 60 Minutes or give me a call at 983592861.

Bob Loss:
One of my associates will reach back out to you to set up a call for us to review your situation further. So. So more benefits. No age limits. So unlike a traditional IRA, there is no age limit for contributions to a Roth IRA. As long as you have earned income, you can contribute to a Roth IRA. There's also there's a biggie. This is like a semi little baby power tip, no required minimum distributions. So why is this kind of big? Well, unlike a traditional IRA, you don't start taking distributions from your Roth at age 73 at this point because they just changed the CARES Act and did a revision to it. And basically you can now leave that asset if you don't need it, if you need it, tax free income, if you don't need it, you can leave it to your to your beneficiaries. And they're not required to withdraw money from it over a ten year period, which is what they would have to do in a traditional IRA was became an inherent IRA. There's also potential for compound growth, so the money in the Roth IRA can grow tax free. We talked about that, which means that the account has the potential to grow faster than a traditional IRA or taxable investment account by far faster than a taxable investment account, because you don't have to account for the growth. The growth is not taxed.

Bob Loss:
The money you put in was taxed. So that's a that's a biggie. And just referencing it, the tax the tax chassy of a Roth IRA was, I guess, sort of spawned by the tax favorability of a properly designed, overfunded life insurance that did not go above a certain amount of money into it. Liquidity, right. You want to have liquidity. So a Roth is liquid. You can withdraw your contributions to a Roth IRA any time, although you will owe taxes and penalties if it is withdrawn before you're 59 and one half. And then from an estate planning standpoint, a Roth IRA is great because the assets can be passed to beneficiaries without the need to pay taxes on the inherited assets. Now we're going to get into life insurance real quick. So why is that important? It's important to know what types of life insurance are available and what policy type would be best for you. Some use it for final expense, some use it to cover debts. So there's different types. You have permanent life insurance. That's what I most what I have. I have all of it. I have I have whole life. I have term life. I probably will end up having some indexed universal life as well. But basically, you pay premiums into it. It grows on a tax deferred basis. You increase your death benefit, your cash value grows, and it's a nice emergency fund. Whole life is a type of insurance that accumulates cash value over time, and it can also earn dividends.

Bob Loss:
Dividends are not guaranteed, but they are almost always paid by reputable companies every year. My experience, they've paid every single year and I've had policies since 1990 or 1989, I should say. You also have universal life, which is kind of flexible, but it is similar that it's a permanent policy that you can fund to create an emergency fund, a secondary income stream. It's potentially tax free. And during retirement then you have indexed universal life. So this type of policy is also it's definitely a permanent type policy. It gives you potential to tap into performance without actually being in the market into any particular stock market indices that's available. It could be S&P 500, it could be NASDAQ 100, just to name a few. So basically what all three that we just mentioned, you have tax deferred growth. I can specifically design them for Max. Cash growth just happens to have a death benefit. Some of them will have living benefits in case you need help with long term care expenses down the road. You know, they're a great way to leave a legacy, a great way to have emergency fund, a great way to create an income tax free stream, a stream of tax free income during retirement, help supplement to fight off inflation, which we know all too well right now is running rampant.

Producer:
Secrets to building a smart retirement plan, smart risk, smart, safe and smart tax. And if you missed any part of today's show, subscribe to the podcast version to listen back to this and previous episodes Apple, Google, Spotify, or wherever you get your podcasts one more time. Bob How can people reach out?

Bob Loss:
All right, so you can always call 908 359 2861. Leave a voicemail voicemail You have voice message, voicemail 24 seven. If you can, please leave your name, date and time. You call, say your phone number just in case something happens with the caller ID and if you have a preferred time or a day that you want us to give you a call back or even that you want to talk to me, you can leave that on there as well. And also, if you'd like to have a 15, 30 or 60 minute chat, we can accommodate you and otherwise you can go to w w w dot safe money BBC.com again, book a 15, 30 or 60 minute call with me if I'm not bumped up against somebody else. If it runs over, I'm more than happy to spend a time with you as long as we're getting value out of it and I'm helping you out and then we'll go from there.

Producer:
And of course, again. Thank you to everyone listening and providing that support for what we do each and every weekend on Financial Freedom. Thanks for listening and we'll talk to you next weekend.

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

Producer:
Not affiliated with the United States government. The amwell 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. Ameri life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as-is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

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