Halloween has arrived, but don’t let that scare you into putting-off your financial planning for 2023. This week, Erick discusses some strategies to eliminate your income gap, looks at the new IRS tax brackets and much more!

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Got Questions? Call Erick today at 352-616-0511

10.28.22: Audio automatically transcribed by Sonix

10.28.22: 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 Take Point on Retirement with your host, Erick Arnett. Erick is a fiduciary and licensed financial advisor who always places your needs first. The experienced team at Take Point Wealth Management takes pride in knowing they've helped so many pursue the financial future of their dreams. And they can help you too. And now let's start the show. Here's Erick Arnett.

Erick Arnett:
Hey, welcome, everybody, to Take Point on Retirement radio. So happy to be here today and got Mr. Sam Davis with us. How are you doing today, Sam?

Producer:
Erick I'm doing well. Thanks for having me on the show. We're so happy to be bringing important information to the people of Tampa, Springhill, and all over the Gulf Coast of Florida.

Erick Arnett:
Yeah. So it's great to be back. I know we had to It's been a while since we taped a new show. And unfortunately, folks, yes, we have to tape. These are not coming at you live. And that's for our friendly compliance officers that need to review every single word we say on the air. So that's all good. But yeah, you been traveling, been going to conferences and constantly, you know, one thing that we do at take Point Wealth is we constantly stay engaged and constantly educate ourselves and, you know, always looking for new ideas and ways to be tactical, tactical with our clients. And and so I spent some time this past week with a large carrier in the annuity universe. And so really great things going on there. I want to I want to talk about that on today's show. So we're going to talk a lot about annuities today. We're going to give you out a free book today, folks, too. So stay tuned and listen for that. But, you know, when we talk about annuities and we talk about volatility and markets and obviously we've had a lot of that this year, what's most important for our retirees is not to run out of income. And so I don't think we talk about that enough and the impacts that volatile markets can have on folks. So we're really going to drill into that today.

Erick Arnett:
And I just thank everybody for listening up and down the Nature coast. Thanks so much. Locations in Brooksville, Springhill, Citrus County we're, of course, we're also willing to come right to you. But more importantly, you know, if there's something on today's show that makes sense to you or you have you have a concern, you have some questions, just feel free to pick up the phone and give us a call today. It's 352 616 0511. I promise you a real friendly we'll just talk on the phone a little bit. Maybe we can get your question answered for you right on the phone. And but you can also go to our website take point wealth dot com. TakePointWealth.com. There's also Take Point on Retirement dot com TakePointonRetirement.com Which is our podcast site you can go right there set up an appointment on the upper right-hand corner you just boom book a complimentary chat session with me and we get that right on my calendar. And if you miss portions of today's show, something happens. You got to jump up. You got to go on any of your podcast channels or podcast apps that you listen to. You can just put Take Point Wealth right in there or Take Point on Retirement right in there and pull up our show and feel free to reach out to us. We love hearing from you guys. We love hearing from our listeners.

Erick Arnett:
And more importantly, if we can make an impact and educate you and hopefully you too will become a retirement warrior. But so much going on, so much to talk about. And Sam, of course, big topic right now for our retirees is is Medicare open enrollment period. So, of course, open annual open enrollment going on right now, October 15th through December 7th. Let us know if you have any questions with your Medicare needs. We do have staff on call. We do have folks that can meet with you, chat with you, Medicare experts, and we're happy to help you out with that. So please visit our website or give us a call today. And if you do call folks, leave me your name and your number. Unfortunately, a lot of folks sometimes call. They don't catch me. I'm on the phone with somebody else and they they say, hey, give me a call back. But they don't leave their phone number. So leave us your phone number and leave us your name and we'll be happy to get right back to you. And then, of course, Sam, we got a big, big election coming up here in a couple of weeks, November 8th. So I urge people, please, please, please get out there and vote. Everybody needs to vote and make your voice heard and visit ballot PDA dot org. To learn what candidates and issues are on your ballot this year.

Erick Arnett:
I think it's important to know and it's a big year and big time and lots going on. So get out there and vote. Vote, folks, for sure. And so but anyways, on This Week, on this week's show, we're going to get into a little market update. We're going to talk about the quote of the week. We're going to talk about inflation. Yeah, unfortunately, inflation is still around and wreaking some havoc on us. But how to eliminate your income gap? That's the big part of the show today that we want to talk about and we want to provide you solutions, ideas and and what's income, right? What's the income gap? I mean, it's quite simply you need to have enough income coming in to support your needs to and through retirement. And most often we may find that when we retire or we're getting close to retirement, we might have a gap in income that we between our expenses that we need to fill. And we've got solutions and ideas for that. So stay tuned, folks, And we've got a great show for you this week. We're going to talk about the markets solution, some solutions, why you have to be tactical. But we've got a couple of cool quotes of the week. They're saying you want to you want to help us out with those.

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

Producer:
Absolutely. Erick, first quote of the week comes from Arthur Godfrey, Arthur Godfrey, former American radio and television broadcaster and entertainer. And Arthur Godfrey said, I'm proud to pay taxes in the United States. The only thing is I could be just as proud for half the money.

Erick Arnett:
Yeah, I mean, that's the thing, right? That's the political thing, right? We don't mind paying taxes, but some of us have different priorities with our money. So some folks might not pay not mind paying for some things, while others it makes them quite upset. But, you know, one of the big things and one of the most important things that we always talk about here take point wealth. When one and one of our planners sits down with you to build out your retirement plan to and through retirement is it is taxes. So the three things that we really focus on. If your current adviser or broker or whomever you're working with isn't focusing on these things three things and constantly reviewing them with you, you potentially have some drag on your long-term retirement plan. And so we have to focus on risk. And I think this year, more than ever, we've realized, hey, there's there's a lot of risk out there and whether you're in bonds or stocks. And so, you know, the bond market has always been that place where supposedly we could park our money to hedge the stock market, to create income and to create some safety and to lower volatility in our portfolio. And we've seen that this year, the 6040 portfolio or that portfolio with 40 50% in bonds has really hurt has really hurt folks. Not only your stock portion is down 20, 25%, but your bond portion is also down ten, 15%. So it's been a truly difficult year. And if you're taking income at the same time, then that's been a double whammy to your long-term plan.

Erick Arnett:
So. And then we're going to talk about taxes today a little bit. You know, you've got to have a constant vigilant look and microscope on the taxes and, you know, what kind of taxes are being created. What kind of buckets do you have to pay those taxes? Are you do you have a Roth IRA? Do you have a whole life? Do you have annuities? Do you have pensions, Social Security and all those are taxed differently and at different rates. And so, you know, you have capital gains, you have losses. You know, real important that your advisor is looking at your portfolios this year and taking losses where they can and harvesting those to offset capital gains taxes and to pull even the pull losses into the future next year to help you with your taxes potentially next year. But also real important that we do here at take point is we do our best to lower your fees and expenses and sometimes we can actually eliminate those perfect example. If you're in a portfolio right now, that traditional portfolio and you might have 30, 40, 50% fixed income or bonds, you know, get that statement out of yours. And most all statements have a little pie chart. And I'll tell you what you're allocated to. And typically it'll say, you know, you've got X amount of stocks, you got X amount of fixed income, cash, international stocks, whatever your asset allocation.

Erick Arnett:
And if you've got 20, 30, 40, 50% in fixed income, then you're paying. Not only are you in an asset class that has been getting hit really hard over the last year and a half, two years, and potentially depending on where the Fed heads the rest of this year and into next year, could continue to see a lot of stress on negative and negative declines. So as rates go up, bond values tend to go down and we're certainly in a rising interest rate environment still. So not only that portion of the portfolio really getting hammered, Sam, it's it's also paying fees. You're paying fees on this large macro asset class that is getting hammered and not doing any any help this year, last year or even potentially into next year. So it's there's there's still time to make changes. We urge you to never just kind of sit there with that in a lack of better terms, you know kind of that just fearful mode or deer in the headlights like I don't know what to do. I don't know where to turn because nothing's working and don't feel bad about that. It's, you know, that's for the for the most part, you know, most of America, nothing's working. I think the only sector in the stock market that's doing halfway decent is energy. So all your stocks or bonds are down. But if you're also paying fees for that underperforming asset class bond replacement tools that we've talked about on this show, and we love to educate you more on them and how they work and how they can reduce your volatility, which is your risk that can reduce your fees.

Erick Arnett:
They can also help you with taxes. So, you know, these things are great, great strategies, but and it's not too late. You can make changes and adjustments right now. Just give us a call. It's completely complimentary, folks. There's no pressure. We're just a laid back group here and we're happy to talk to you. But, you know, it doesn't hurt to get a second opinion and look at what you're doing. Sam, I talked to a guy the other day and I'm not going to mention any names, but he's with a large investment management firm here in the Tampa Bay area and he's got a sizable amount of assets. And we're in one of the most volatile markets we've been in in years. And it hasn't even heard from his investment advisor. You know, hey, we need to be reaching out to our clients and saying, hey, you know, this is a completely different market right now. This a different time. There's different things going on. The next ten years aren't going to be like the past ten years. So we've got to make changes, we've got to make adjustments. We've got to constantly look at your plan and and it's time to think outside the box a bit that traditional, you know, just conventional portfolio that everybody out there is being prescribed is not going to work.

Erick Arnett:
You know, unfortunately, the industry is pretty much this, hey, you know, you sit down with an investment advisor, a broker is going to do you're going to sit there and do a little form. It's called a questionnaire based on psychology. And then based on your age, you're going to fill it out. And they say, okay, you know, based on your questions that you've answered here and based on your age, you should be a moderate advisor. So we're going to stick you in a portfolio of 50% bonds, 50% stocks. And and that should work out just fine. You know, that's that's not the answer. There's just much, much more to that. You deserve better. And there's you've got to bring alternative strategies in currently that haven't been that because those traditional strategies just aren't working. So you got to think outside the box. That's why we talk about indexed annuities. You owe it to yourself to learn more about those. I want to talk a little bit about that later on and kind of dive into some details there. But you've got to look at structured notes. You know, here's another option, Buffer buffer ETF strategies. You know, I can name a bunch that we have solutions and and now's the time to be kind of still making those changes so. Just real, real important focus on risk taxes and fees. And then, of course, how are we going to create income? How are we going to sustain income and how are we going to create income in an inflationary environment? You know, hopefully your income is going to continue to increase because one thing I know for sure, if you're working with a CPA or you're working with an accountant, make sure you're sitting down with them right now and doing projections and talking about how things might be different for you in 2022.

Erick Arnett:
So one thing that we do at Take Point Wealth is we sit our clients, we sit down with all our clients, do an annual review, a year-end review. We talk about taxes. You know, we have a CPA on staff. We have. So we'll sit there and say, okay, what's changing next year for you? Is your income different? You know, are you going to be spending more, spending less? How's your portfolios done? Have you taken capital gains losses? Know all these things that you've constantly got to be reviewing. You've got to make sure that you're a tax advisor and your financial planner or your investment advisor or whatever you're calling them these days are on the same page. And so that's something that we also do and is real important here at Take point. But those tax brackets are going up, folks. So, you know, take a look at that for 2023. You can Google it. Just go right to just Google tax brackets for 2023. But those are definitely increasing. So we're looking at higher taxes potentially next year for you. So and you got to know how your different income is categorized and whether it's taxable or not and you know, whether it's the right time to take Social Security, maybe hold off on that a bit.

Erick Arnett:
Maybe your spouse takes it and you don't. So a lot of different strategies there, too. But keeping mindful of all any decision that you make is going to have some type of tax ramifications. So tax brackets are going up, increase taxes in 2023. So not good news there. But Sam, there is some good news. We've got an increase in Social Security this year. I think by now everybody's probably heard or or no, no. Know. Typically Uncle Sam will gauge the increases in Social Security based on the inflationary environment. So we have been in a pretty high inflationary environment. So this year, Social Security is looking at a tax increase of or I'm sorry, a rate increase of 8.7%. So that should help out a little bit. Hopefully, you know, Social Security going up, unfortunately. You know what? What we know is that they're raising Social Security, but at the same time, they're raising Medicare costs. So so there could be give it to you in one hand and taken it with the other. And then also, I've got inflation at record highs. So, you know, that extra money that you're making might not be making that much of a difference in 2023. So we've got to talk about ways that we can beat inflation. Ways we can get your money invested to outpace inflation and also create a good, stable, strong income. And no matter what environment you're in, whether it's a good market, bad market, volatile market, higher rates, low rates, what it is, we've got to get a solid and solid income plan in place for you.

Erick Arnett:
And then hopefully we can also look at ways that that increases with inflation because that's the most important thing is to to really maintain that pace of inflation. So this year that increases up from last year's 5.9% COLA that we got. So bringing two-year increase to 14.6%. So that's pretty powerful, you know, and hopefully that helps folks out and that that adjustment is built right in and should see that increase in your in your paycheck from Uncle Sam here. But like I said, the bad news is inflation is still kind of hammered away at that. So, you know, this is why we want all our listeners to have a solid and tested stress that tested plan for protecting and growing their hard earned money. So, you know, you've got to have a plan in place, but you've also got to test that plan. You've got to constantly challenge that plan and constantly test it on an annual basis to make sure that it's holding up, to make sure that's still on pace. You've got to make adjustments because the economy has changed, because the markets have changed. Heck, a year ago, Sam, if we wanted to put money in a Treasury bond, we would get next to nothing. You can actually buy a one and two year Treasury right now and make almost 4%.

Erick Arnett:
So that's how much things have changed. So if you're not making changes to your portfolio and being tactical, then you really need to owe it to yourself. To give us a call. 352 616 0511. That's 352 616 0511. Or you can just go to take point wealth. You can Google that right on your phone. And in the upper right-hand corner, there's a little box. Just click on it and it's going to go right to my calendar and set up about a 15 minute chat session where we're just going to talk on the phone. Let's just get on the phone and chat a little bit and see if there's ways in which we can help you or optimize your retirement plan. Maybe you have a plan already in place. Let's test that plan. You know, we we take our all into retirement plans and we stress test them. You know, we throw good rates at them, bad rates, good markets, bad markets, combinations thereof. We can look at different tax rates. We can look at different Social Security strategies. We can run multiple plans. And then we stress test them with what's called the Monte Carlo simulation. It throws 1000 scenarios at the plan and it'll bring back a probability of success. And that at least helps us know if we're on the right pace or we're headed in the right direction. So we're goals based planners first you first and foremost, you've got to know what your goals are like. You know, you've got to know what the destination is.

Erick Arnett:
The journey there isn't always as important as you've got to at least make sure you have a destination in mind. Right? And so let's get you from point A to point B safely, but let's first at least know what our goals are and what our destination is. When are we going to retire? You know, how much money do we need in retirement? Do we have an income gap and how are we going to fill that gap or what are our expenses going to be? We know that Medicare medical costs are going to go up exponentially for our retirees. So we've got to plan for high medical costs, long term care. You know, do you have life insurance in place to protect your partner? You know, all these questions need to be answered. When do I take Social Security? And there's different combinations and strategies, maybe because Medicare is getting so expensive in that Medigap plan is getting so expensive, maybe you sit down with us and we find ways to create income in order to pay for that. You know, something that smart retirees are doing these days is they're investing some money into an annuity that annuities spitting out an income stream and that's covering their Medicare gap insurance. So just a little strategy there. But let's talk about all that. Give us a call. 352 616 0511. We're here at Take Point on Retirement radio Ready to answer your call and happy to answer your questions. So give us a call. We'd love to hear from you.

Producer:
All right, Erick, So let's talk a little bit about inflation. You know, one of the figures that you pointed out that really catches my attention is the two year increase of the cost of living adjustment, almost 15%. So if you're a worker today, you know, you're still in the workforce and you haven't found a way to increase your wages by 15% over the last couple of years, you've just lost buying power. You know, inflation is really one of the silent killers. And as you enter retirement, we've talked a lot about having an income plan. You need to have a plan for making sure that your income is going to be able to keep up with that rate of inflation.

Erick Arnett:
Yeah, I mean, thanks, Sam, for bringing that up. It's so important. Right. And this is obviously been the topic of discussion for quite some time and it doesn't so far. Inflation is definitely hasn't been transitory, which we were told last year. It's it's here and it's been pretty sticky and we haven't seen a decrease in inflation yet. And that's what we're really need to see. And hopefully, you know, the Fed increasing rates the way they have, we'll start to see that kind of filter in. But so far, we're still hovering near the highest levels since the early 1980s for inflation. And so that's the big concern. I mean, that's what everybody's focused on. All the markets are focused on that, you know, everybody across the board. And it's not just here in our country, it's global. Global inflation is hitting everywhere. That rising cost of living has been hitting folks pretty hard. And that's you know, that's bad news for workers. It's also bad news for retirees. You know, the and when we have when you have the Fed out there aggressively trying to slow down the economy, you know, we've we've seen start to see a little uptick uptick in jobless claims. We're seeing corporations come out this quarter and earnings and saying they're kind of putting during earnings season here, they're putting a hiring freeze in place or they're going to be letting folks go and reducing costs.

Erick Arnett:
So, you know that that is starting the Fed's rapid and. Accretion rates to just try to put the brakes on things seems to be slowly filtering in. However, we haven't seen any real, real impactful decrease in inflation so far. So we've got to pay real close attention to that and how it impacts our retirees and how it impacts our portfolios and our income plans. And, you know, unfortunately, more and more Americans today are living paycheck to paycheck. And so that's that's a concern. It says that now that 32% of adults said they regularly, regularly run out of money between pay periods according to salary finance. So that's concerning. That's something that we haven't talked about or seen for a while. And so that's that's a big concern. And more than half of the working US adults feel as though they are behind on retirement savings, underscoring the hardships of the inflated economy, according to a recent report from Bankrate. So of these adults, over a third say they feel significantly behind. According to consumer financial services companies recent report. So this is the inflation and the the slowing of the economy. It's having a big impact on us. And and and this is exactly what the Fed wanted to do. I just we just hope that they don't overdo it. And that's why we've seen a little bit of a bounce here in the market recently.

Erick Arnett:
The markets recovered off the bottom a bit and the volatility and the bond market has slowed down a bit in hopes that we're starting to see signs that the economy is slowing and therefore the Fed may be a little bit more what we call dovish and be a little bit less harsh. Maybe they only increase rates 50 basis points instead of 75 basis points. Maybe they only have rate increases instead of three more or so. We have to really keep an eye on that because until we see those and those numbers coming down, the Fed is not going to pivot. And if they're going to continue to raise rates aggressively, that's not going to be good for stocks. It's not going to be good for bonds. And so that's why we've got to be ever vigilant and constantly looking for different strategies to implement. And we've got to be tactical. And that's why we're active, active, active retirement planners. We're always focused on your goal and making sure that we're still getting to that goal. So if all of a sudden we look and we reevaluate things and we may be starting to fall short of those goals, we've got to make adjustments and we've got to be aggressive and we've got to be tactful and we've got to be ever changing.

Erick Arnett:
We just can't sit there like a deer in the headlights and not make any changes. It's you've got to make some changes and you've got to get to make them now. So so just encourage folks to give us a call. We're happy to sit down with you. Everything's complimentary, folks. No one's going to hold a gun to your head and say, Oh, you've got to do business with us. You know, take advantage of this free plan that's over a $5,500 plan. A lot of time goes into it. And so we're going to do this completely free for you. It's totally comprehensive. And then you can take that plan and do whatever you like with it. And so reach out. Give us a call. 352 616 0511. That's 352 616 0511. Or just Google us Take Point Wealth and in the upper right hand corner you can set up an appointment and we can chat with you over the phone and just real easy laid back conversation for about 15 minutes to see how we can make an impact or how we can help you. But I think we're going to really it's important, Sam, because of the inflation, it kind of keeps me up at night. Let's really get into that income gap in 2023 and what that's going to look like for folks and how we can help folks eliminate that income gap.

Producer:
All right. We'll do just that when we come back. Be sure to get in touch with Erick and the team over at Take Point Wealth Management. Just visit, take point wealth dot com, and Take Point on Retirement. We'll be right back.

Producer:
You're listening to Take Point on Retirement. To schedule your free no obligation consultation visit Take Point on Retirement dot com. TakePointOnRetirement.com.

Producer:
at Take Point Wealth Management. We know you've worked hard to earn your money and you've worked even harder to save it when it comes to planning for your financial future. Trust Erick Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom at their veteran-owned firm for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule a free no obligation consultation now at TakePointWealth.com

Producer:
Could a recent IRS change actually save you money on next year's taxes? I'm Matt 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 $1,000 per 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 bucks for married couples filing jointly.

Andrew Pelosi:
I mean, look, it's beneficial for everyone, right? At the end of the day, we're all looking to save money and keep more money in our pockets. In a time like this where groceries are more expensive, fuel prices are at record prices. Every little bit helps.

Andrew Pelosi:
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:
Welcome back to Take point on Retirement. Schedule your free financial consultation now at Take Point on Retirement dot com. TakePointonRetirement.com

Erick Arnett:
So hey everybody welcome back to the second segment of take part on retirement radio. So happy you're listening to us today up and down the nature coast and reach out 352 616 0511, 352 616 0511. You'd like to get the book Annuity 360. We think that that's a super impactful book. It's an easy read and makes a big, big, big difference to educate yourself folks. Don't take your neighbor's word for it. If you have an annuity currently and you're not quite sure if it's achieving your goals or the right one for you, we'll do what we call an annuity stress test. We'll do a completely free annuity evaluation for you because it's important to do that right now because of the such a rapid increase in interest rates that we've had. These annuity companies, these insurance companies are constantly raising their rates, which is better for you and it's good news for you. But you could be stuck in an old one, that the rates are really kind of low and dismal. So we've got some new product out there that are coming out because of the increase in interest rates and they're phenomenal. And so you owe it to yourself to do that review. So reach out to us today. 352 616 0511 so we can help you evaluate what your income gap is. So we talked a little bit, Sam, earlier about what keeps me up at night, particularly in years like this, like we've had in 2022. And quite frankly, you know, 2023 might not be much, 2024 might not be much different.

Erick Arnett:
You know, early on in my career, I saw markets where we had three consecutive double-digit negative years in a row. But what I do know is it can have a massive impact based on your age. So if you're in that 50 zone and that 60 zone and you're getting close to retirement or you're even in retirement currently, we've got to talk about protecting your income. What is your income going to look like? So we want to help you make sure you don't have an income gap during this important time. And so what is income gap? It's quite simple. We're going to take a look at what all your guaranteed income sources will be in retirement and when you retire. So that might be Social Security, that might be a pension. And so we want to look at those guaranteed sources. Perhaps you already have an annuity, perhaps you have a life insurance policy. So we want to look at what you have currently for guaranteed income, and that's income that we know is going to be there no matter what. Right. When you have a kind of just this traditional portfolio of stocks and bonds and we're just kind of and you're just kind of winging it based on historical returns. You see why this year could really hurt folks because if you're taking money from a portfolio that's down 20%, you know that's going to be much harder to get your principal back and dig out and to maintain that income stream long term.

Erick Arnett:
There's I love to do a little report for folks. It's super enlightening. And it was impactful for me as an advisor years ago. Another advisor showed me this and I thought to myself, Wow, this is so impactful. I never looked at it like this. But if you lose money in your portfolio in the first five years of retirement, it's super impactful. It's, you know, it really reduces the ability for you to reach a long term goal, which is getting all the way through retirement and not running out of money. So it can be very stressful. How do you determine your expenses in retirement? So pretty simple. And then I know that nobody likes out there, likes to talk about expenses, but if you're sitting there listening, talk to your spouse, talk to your partner and say, hey, you know, what are we spending right now? And then ask yourself, what are we spending in retirement? What are we doing in retirement? What are our goals? Do we need do we need an extra 2000 a month? Do we need 3000 a month? Now, that's so important to Too often we talk about the stock market and market returns and picking the right stocks and all this kind of stuff. That's not important. What's important for our listeners is to not run out of income and we don't talk about income enough. And there are some tremendous I'm super excited to say that there are some tremendous solutions out there now to provide that income, that stable, guaranteed income, and for it to also be able to increase during inflation and when we have inflationary times.

Erick Arnett:
So you can lock in a paycheck for life for you and your spouse that will cover that income gap and you'll never have had to worry about that. And it can increase with inflation. So, you know, we have years like this where maybe you needed 20,000 a year to live to cover our expenses, but all of a sudden you realize, man, I need 25,000 a year now to cover all my expenses. So we've got to have that flexibility. We've got to have a solution in place that's also going to increase your income through retirement. So I tell folks and don't beat yourself up there, folks. Nobody likes to talk about budget. You know, 95% of the folks that I sit down with and these are mature adults, you know, And I asked them, what is your budget? And it's kind of funny, Sam, because the if it's a couple, they'll look over at each other and they kind of have a little smirk on their face and say, I don't know, we don't really have one. We don't really keep a budget. And that's okay. I get that when you're working and you're both still bringing in income and, you know, you're just you're really not worried about it, right? You think, well, I've got enough money coming in. I kind of know what we're spending, but we have a year like we had this year or having this year in 2022, and you're having to draw money off of your portfolio.

Erick Arnett:
If you're down 20%, 30% plus, you're taking four or 5% to live on. You know, you're down 35 to 40% in your portfolio. How long is it going to take me to get that back to maintain my principle? You know, what kind of markets are we going to have to have to get that back and bounce back? So it's so important to not dig that hole in years like this and particularly in the beginning years of retirement. And that's why we have this report. It's called the Sequence of Returns. And I'd love to build out that report for you folks and just email it to you. So if you want to see that, I think it's super impactful. We'll take we'll take what your current assets are, what your income needs are, and we populate it into this spreadsheet. And it's going to show you what things would look like in a down market versus versus and up versus up markets and when do we get those returns. And so if you have if we go back to the lost decade, even in the 2000 where the S&P, if you purchased the S&P 500 and you held it for ten years, you didn't make a dime. And so we can take a period like that, for instance, and look at and say, hey, what if this happens again over the next ten years? What's how is that going to impact your retirement? And we show folks this and illustrate it form.

Erick Arnett:
Sometimes a picture paints a thousand words, right? So we can illustrate this for you and show you that how important it is not to have those big declines in the beginning of your retirement. You get those negative markets, negative returns in the market, in the beginning of your retirement plan. It's devastating and we can show you the numbers. So that's why it's so important to get it right and to prepare for those first five years of retirement to make sure you get it right. As an example, this year in 2022, I mean, our retirees retirement plans and portfolios have have had a very low impact. The bond market and stock market has had a very low impact on our retirees plans because we were prepared for this ahead of time. So you have to prepare for these bad markets, right, these jolts to the system, because they're going to happen. And traditionally, before we really started meddling in in the economy and in the markets, you know, back during the mortgage crisis, you know, we reduced rates so low and we pump so much money, we kind of artificially inflated the system. And stock markets were doing fantastic because there was no place else for money to go. I mean, interest rates were zero. What were you going to invest in? You know, so everything got inflated, asset classes got inflated. So we had a big boost.

Erick Arnett:
We had a lot of help the previous 12 years and the previous bull market. And typically what we see in normal conditions that every 3 to 5 years you're going to have a bear market folks, you're going to have a bear market where stocks are getting hammered, bonds can get hammered. How are you going to net income gap and create that income that you need even during those difficult times? And so that's what we prepare for. We we prepare for the risk. Folks. Talk about what your budget is and just take some time this weekend, sit down with your loved one and hammer it out. You know, just look back over the last, say, 3 to 6 months, pull your bank statements. And if you have some other goals in mind, like traveling or buying that new RV or buying that second vacation home or whatever it is that you're thinking about doing, hey, I love to fish. And man, that's an expensive hobby. You know, I spend a lot of money on that boat and those fishing poles in that boat every year. So if you're fishing, if you're gardening or, you know, I don't know what you're doing, but hopefully you've got an idea and you're doing something other than working. Sitting around. You know, we've got to factor that in as well. So really, really talk about your expenses, folks, because once you get that narrowed down, that's really that's a really a big, big part of getting this right long term.

Erick Arnett:
And then we can figure out, okay, are your guaranteed income sources covering your expenses to and through retirement? Quite simple. So if you have a gap there where you need to fill it, then let's get that filled with a guaranteed income source and we have the solutions in place to do that. So you want to you want to build a plan that can pay you income even during a bad market. And you don't have to worry like, oh my gosh, I just dug myself this massive hole. So, you know, replace your bonds with fixed indexed annuities to eliminate those fees and to eliminate fees and get the guarantee. So guarantee yourself that income you can never outlive, regardless of future market conditions. Prioritize the income. This is what I'm trying to really stress here. Prioritize the income over assets for a better retirement. You know, you can have all these assets, but if they're not producing income for you, you can't afford big hits to your portfolio, your retirement. You know, so perhaps if we look back over the last few years, we got a little bit too greedy or we got lulled to sleep with good markets. But now we're in an environment where it's much more challenging and it's going to continue to be that way. We're going to we're going back to probably a more normalized interest rate environment. And you know what that's going to mean is that, yeah, the Fed is going to lower rates, increase rates, and try to really control the pace of the economy.

Erick Arnett:
And therefore we get contractions and expansions, contractions and expansions. And so contractions and expansions in the markets and the economy. And you've got to be prepared for those folks. You know, it wasn't so important when you were young and you're working and you're making good income and you just putting money away. But right now, if you're five years out or you're in retirement, it's very important to start really prioritizing this income over asset philosophy. And so the great news is, is that there are some awesome, awesome products out there that can help fill that gap. And the great news is, is those weren't even available a year ago because interest rates were so low. Now the increase in interest rates, it's actually much, much better for these type of guaranteed income producing products. And we're really excited about it because it's been a while, Sam, since we've been able to offer something that could be this impactful to retirement plans. So you folks really owe it to themselves to give us a call given out that book annuity. 360 is super, super important. Can you offer that up to our listeners? And then and then even so, let them know how they can get that. And maybe I don't know if we want to even play a chapter about creating that guaranteed pension out of the annuity. 360 book. But I urge you to I urge you to to really educate yourself on that.

Producer:
Yeah. Erick, Let's go ahead and give them the information they need. First off, the book is called Annuity 360. Pretty sure it's 100 pages or less. Very easy to read once or twice in a day or less, honestly. So and we've got an audio version of that book as well. You can get the book by giving Erick a call at 352 616 0511 or just visit the website take point wealth dot com. Send Erick and the team a message. Let them know you'd like a copy of the book and they'll send that out to you. But yeah. Erick Let's go ahead and play a chapter from Annuity 360 on how to create your own personal pension.

Ford Stokes:
You can create your own personal pension. Big idea Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money, but an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don't overpay for your annuity When you put your money into an annuity, the annuity company will pay you your money back at a date you specify you don't want an annuity company to charge you too much to simply pay your money back to you.

Producer:
I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk. It grows your money and allows penalty-free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries. When you pass away, don't give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee, but you can still create a personal pension without an income rider on your annuity. If you get an annuity with an income rider but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company 1 to 2% each year. You defer annuities in your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle, depending on how that index is performing.

Producer:
The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add-on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than 5% a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be RMD friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier. Inspect what you expect with any annuity. Don't just go with what the annuity agent or advisor tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non-guaranteed tables included within the annuity illustration.

Producer:
Also, please remember that annuity policy is a contract between you and the annuity company. So caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they'll offer you peace of mind whether you choose to generate income through penalty-free withdrawals or invest annually in an income rider. Know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 1 to 1 and one half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10%, you will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than 5% be withdrawn each year from your account.

Erick Arnett:
Sam, thanks for playing that super impactful. Listen, folks, you you need to understand we are all living longer, and I know what you're thinking. I'm not going to Erick. I'm not going to live to be 95. I get it. I get it because almost every one of my clients says that. But wouldn't you like to know just in case, if you do live to your 95th birthday, we have a plan in place that's going to get you there. And you might even have some money left over to leave your friends and family. So wouldn't that be awesome? So we're living longer and that's why it's so important. I can't stress this enough that we've got to focus on that income plan and the income planning. And guess what has to also be increasing because what happened this past year, we got hammered with inflation, we got hammered with rising medical costs. So we've got to have that incorporated in our plan. And that's why we offer that completely complimentary, complimentary 30-year plan. Folks. Kind of wrapping up the show here. I urge you, just give us a call 352 616 0511 or just go to our website. You can go take point wealth TakePointWealth.com In the upper right hand corner. You can click and set up a complimentary consult with me. You'll get right on my calendar. We offer this completely complimentary free for our listeners, a full retirement plan consultation. We're going to provide consultations at no cost to our listeners, and there's absolutely no obligation. You only work with us. If we can do better for you, we will help you. Analyze your specific and unique financial situation, we'll discover exactly how much you're paying and fees help you cut unnecessary costs in your IRA, your four, one K, or any other retirement savings account. We're going to closely examine any annuities you may currently have. We can also help you with your Social Security planning in your Medicare planning, if you feel like you have already maybe learned something today, then we're super excited. And I look forward to chatting with all of you real soon.

Producer:
Thanks for listening To Take Point on Retirement, you deserve to work with a private wealth management firm that will strategically work to protect your hard-earned assets to schedule your free no-obligation consultation visit, Take Point on Retirement dot come TakePointOnRetirement.com Or pick up the phone and call 352 616 0511. That's 352 616 0511.

Producer:
Investment Advisory Services offered through Brookstone Capital Management LLC BCM a Registered investment advisor, BCM and Tech Point Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated or not, guaranteed past performance cannot be used as an indicator to determine future results. Please refer to our firm brochure the ADV to a page four for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by BWA.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges as described in the annuity. Contract guarantees are backed by the financial strength and claims paying ability of the issuer.

Producer:
At Take Point Wealth management. We know you've worked hard to earn your money and you've worked even harder to save it when it comes to planning for your financial future. Trust Erick Arnett and his team of experts who have been helping individuals, families and business owners find financial freedom at their veteran-owned firm for more than 20 years. Let us help you protect and grow what you've worked so hard for. Schedule a free no obligation consultation now at take point wealth dot com TakePointWealth.com.

Producer:
The Federal Reserve keeps raising interest rates to combat inflation, but how could it affect your retirement? I'm Matt McClure with the Retirement dot Radio Network Powered by AmeriLife. Supply chain issues. The pandemic, energy prices and Russia's invasion of Ukraine have all been contributing factors to runaway inflation. To fight rising prices, the Federal Reserve has been using one of its most powerful tools, raising interest rates.

Tibor Besedes:
So they started increasing the interest rates about, I guess, two meetings ago. So about three months ago when when they had the first increase of three quarters of a point percentage points to 75 basis points, which at that point was the largest increase in about 30 years.

Producer:
Tibor, Besedes is an economics professor at Georgia Tech. He says it's surprising that the August reading for inflation did not see a decrease, especially given gas prices have been plummeting from recent astronomical highs.

Tibor Besedes:
Inflation is not going to a sudden, but what one would want hoping for is that the increases start to decrease so that we start getting to levels that are sort of more manageable and more pleasing to the eye. If nothing else. It was very surprising.

Producer:
That's why, Besedes says many analysts now expect the Fed to be even more aggressive with interest rate hikes in coming months. So what does this mean for you? Potentially higher payments on mortgages, other loans and credit cards.

Tibor Besedes:
Securing any sort of balance on any loan that doesn't have a fixed interest rate? Is it going to become more expensive?

Producer:
Besedes says it's important for consumers to cut back where they can to lessen the blow of inflation and interest rate hikes. And if you're in the market for a new home, it could be good to delay the purchase until rates or home prices come back down. So how do the Fed's actions on interest rates affect your wallet? That's a key question to consider as higher costs. Eat away at your hard earned money.

Producer:
Where's the best place to hang your hat when you retire? Whether retirement is just around the corner or several years away, time is ticking on planning not only your finances for your later years, but where you want to live out your post-retirement life. Personal finance website wallethub recently released its list of best states to retire in 2022.

Jill Gonzalez:
Florida, unsurprisingly ranked number one, followed by Virginia, Colorado, Delaware and Minnesota, while.

Producer:
analyst Jill Gonzalez.

Jill Gonzalez:
The top ten continues with North Dakota, Montana, Utah, Arizona and New Hampshire.

Producer:
So what makes a state one of the best to retire in?

Jill Gonzalez:
The study was based on 47 metrics, including tax friendliness, the elderly population, golf courses per capita and shoreline mileage.

Producer:
As for Florida, which landed the top spot this year.

Jill Gonzalez:
Florida excelled in tax friendliness, fellow retirees and things to do, but could use improvement with home health aides per capita, even.

Producer:
Though the Sunshine State is number one overall, If finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years? New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is naturally, the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement? And what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future. With the Retirement dot Radio network powered by AmeriLife, I'm Matt McClure.