On this week’s show, we open up the listener mailbag and answer your questions! Inflation, Social Security, retirement income – no topic is off limits! Plus, how are rising prices affecting your travel plans this summer? We take a look at the numbers and give you some tips to minimize the impact on your budgets.
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6.16.23: Audio automatically transcribed by Sonix
6.16.23: 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 Safe Money Masters with Greg Castle. Get ready for a full hour of financial information and economic news you can't afford to miss. Greg works hard each and every day to help hard working Americans like you navigate challenges and reach the financial freedom they desire and deserve. So now let's start the show. Here's Greg Castle.
Greg Castle:
Hello and welcome to Safe Money Masters, where our main goal is to help you become masters of your money and teach you how to keep it safe. We hope you're having a terrific Tuesday. Are you having a terrific Tuesday?
Producer:
I am. I am. Greg, I hope you are as well.
Greg Castle:
I am. I am. I am. I'm Greg Castle. I'll be your host, along with my co-host and producer, Matt McClure. Matt, I think we have another great show lined up for our listeners today. Why don't you tell us about what to expect?
Producer:
Yeah, absolutely. Another great, you know, sort of jam packed show here with a lot of information and a lot of a lot of fun, too. You know, we like to have fun on the show while also giving our listeners the information that they need to make their financial lives better and give them some resources, aka Mr. Greg Castle himself, as the number one resource around here. But yeah, some of the things we'll talk about, we'll get to our quote of the week here in just a few minutes. Some words of wisdom to sort of springboard us into our conversations today. We'll talk about inflation with an inflation demonstration this time around just because we like things that rhyme. But we'll talk about how it's affecting people's vacations this summer. And I know that, you know, a lot of people are either doing like a staycation or a vacation, as we'll talk about in a little bit. And I might know a guy who just did a vacation so we can we can bring that up here in just a little while. Yeah. We also have some questions from our listeners. You know, each week here on the show, we try to do like a mailbag segment with like an Ask Greg sort of a segment toward the end. Well, this time we're moving it to the middle of the show because we have several questions here this time around from some listeners that we are going to pose to you, Mr. Greg Castle, and see exactly what those answers are. Hopefully we can clear some things up for some of the listeners here. We'll talk about Social Security, maybe bust some myths there about Social Security and educate the listeners on that also. And then what about your employer's retirement plan and do you have any options outside of it to plan for your retirement? So, you know, it's going to be a great, great show, as we say, a lot of stuff to get to. So it's it's a good one. We've got today as we as we like to do. You know, we don't like to disappoint the audience here.
Greg Castle:
Greg Never. Hey, Matt, before we get started, I'd like to take a minute to just remind our listeners what the show is all about. You know, the whole premise of this show is to bring you topics and tools that will help you grow and protect your wealth and retirement income. So we hope you'll keep tuning in. You can catch us every Tuesday evening at 6:00 pm on Moneytalk 1010 and on your local FM stations, 92.1 in the South and 103.1 up north in Newport. Richie If you happen to miss an episode, you can catch the replay at SafeMoneyMasters.com or wherever you listen to your favorite podcast. You can also check us out on YouTube and subscribe to see weekly video highlights and special content that we provide for you. And if you have any questions at all about anything we say or anything that you have an interest in about what we talked about, you know, we'd love to hear from you, so feel free to email me at Greg at savemoney masters.com or call me at (813) 430-7100. Okay, Matt, why don't we get things started off with our quote of the week.
Producer:
And now wholesome financial wisdom. It's time for the quote of the Week.
Producer:
This time around. The quote comes from James W Frick, who spoke these words of wisdom. He said, Don't tell me where your priorities are. Show me where you spend your money and I'll tell you what they are.
Greg Castle:
You know, that's so true. As a matter of fact, years ago when I was a stockbroker, you know, one of our big mantras was basically, you know, if you want to push a stock, see what everyone else is spending their money on, and that would be the stock people should get. And back at the time it was things like Nike, Apple, there was a lot of things back then that was really, really pertinent. And Mr. Frick hit it right on the head.
Producer:
Yeah, absolutely. Absolutely did. And you know, some listeners may not be familiar with Mr. Frick. James Frick He developed the Notre Dame Foundation into one of the most successful fundraising operations in the nation. He was active in a lot of community endeavors as well, things like the United Way, National Urban Coalition, American Heart Association. So, you know, a very. Philanthropic guy as well, so knew a thing or two about setting priorities when it comes to where money is going. And so I think very appropriate to have that quote here today.
Greg Castle:
Hey, man, I think we were talking a little bit ago before the show started about vacation I recently took. And we'll talk more about that topic in just a minute. Vacation went down to Key West with the family and had a great time, great resort, stayed right on Duval Street. We had our own private beach. Everything was absolutely wonderful, which is a great segway into our very first topic, you know. Matt, do you know the reason why more Americans are opting for staycations or near occasions this year?
Producer:
Well, you know, just an educated guess here. I would say it probably would have something to do with inflation.
Greg Castle:
Want to know where your hard earned money is going. It's time for an inflation demonstration. You know, I know we're not doing our right or wrong segment today, but you're exactly right. You know, according to one recent survey, even though it's not hot outside or even though it's hot outside, 88% of people say that inflation has cooled their summer plans. 41% of Americans say they won't travel at all this summer. And 1 in 5 Americans say that they're limiting trips to to those within driving distance, which makes a lot of sense. As a matter of fact, our vacation was basically a vacation. And we drove down to Key West from Tampa and took a little while. But, you know, it was a good drive back. Anyway, here's a hot tip for our listeners. You know, flexibility can be a real cost cutter. I know this from traveling years ago when I was a consultant and I was on at least four planes every week. But, you know, when you're budgeting, budgeting for a vacation, you know, popular tourist destinations tend to be more expensive. Take a look at, you know, Disney World here from Tampa. And also for those of you in on the East Coast.
Greg Castle:
So look for the off the beaten path destinations. If you're traveling abroad, make sure to look for places where the US dollar is strong relative to local currency. Right now, the dollar is has been better, has been worse. You know, ultimately the more flexible you are with your plans, you know, the easier it's going to be to to vacation on a budget. So traveling during the off season and booking your flights midweek, you know, usually Wendy's is a Wednesdays are a great day to to book your flights for will help bring out some of your costs and you can find dramatically different prices just by tweaking your arrival and departure days. You know check your airlines always book early. You don't want to wait till the last minute to book because you'll pay a premium for for not doing good planning, just like in your retirement. You know, if you put off planning and you wait until the last minute to do it, you're going to pay for it. So we hope that you will take advantage of some of the things that we happen to offer at Castle Financial Solutions.
Producer:
Yeah, absolutely. Well, and you know, too, you mentioned there travel to places where the US dollar goes goes farther than maybe some other countries. And I would venture to say just having been a couple of times, at least to Toronto, that Canada would be a great place to go this time of the year, especially because, you know, temperatures are getting a lot a lot warmer or a lot hotter. And it's getting more humid, as we all know here around this this time of the year down south. So maybe going up north would be a good thing for a little bit cooler temperatures and the dollar will take it pretty far up in Canada.
Greg Castle:
Yeah, I think you're exactly right. I mean, the northern areas this time of year are a great place to be to beat the summer heat here in Tampa area.
Producer:
Yeah, that's absolutely right. And here, you know, I'm always joining you from Atlanta, from my home. And we are also famous for our summer heat. So so there we go. And of course, what we want to talk about here, too, though, is, of course, going back to inflation and kind of the numbers where we're looking at these numbers from the from the Harris poll, talk about that and kind of what Americans are feeling right now when it comes to inflation. And guess just really, you know, overall sentiment about where people think things are headed.
Greg Castle:
Yeah, you know, I've got the poll right here. And according to the Harris poll from this week, 75% of Americans, according to what it says, believe that the worst of inflation is still ahead of us, which is kind of frightening considering last year we were up to 8.8., almost 9% inflation. Here's some of the survey respondents. And the way they're feeling the sting of inflation in key areas. First of all, when it comes to gas, 78% of the people in the poll said that gas was their number one issue with inflation. 76% said groceries were, you know, hit hard by inflation, 49% eating out, and 49% said their utility bills went up and 33% said that health care was an issue when it came to inflation. In the respondents to the survey also report common lifestyle changes because of inflation, which is kind of interesting that, you know, 48% of sought out new sources of additional income, you know, basically second jobs or new careers. In some cases, 46% have cut back on savings or stopped saving altogether, which is never a good thing. 38% of accumulated more debt than usual, which is also not a good thing. 35% have started providing financial support to a family member. A lot of boomerang kids, sometime boomerang parents coming back and 30% have missed or will soon miss a bill payment, which is really, really frightening.
Producer:
Yeah, that's that's not a good situation to be in. And then when you find yourself in that particular boat, you know, cutting back on savings, accumulating more debt. Either have missed or will miss a bill payment. You're just you're getting yourself in a hole and it's a hole that's that can be difficult to dig yourself out of, right. I mean, it's not especially when you're looking at things like maybe credit card bills, if you get behind on those and you've got late fees on top of compounding interest and all of that every month. So it just builds and builds. And if you fall behind, it is it is tough to get back on track.
Greg Castle:
Yeah, it is. And it's that it's that snowballing debt. You know, people credit cards go up in periods of high interest rates like we have now. Credit card rates have gone up in a lot of situations. People that have bought mortgages recently suffering some of the same things they are. You know, they're having to pay more for their mortgage than they had to pay before. And hopefully. Hopefully inflation will go down. Hopefully interest rates will go down for those borrowers.
Producer:
Yeah, that's right. That is the hope and hopefully we will get there sooner than later. But if any of you listening to the show today would like to learn how you can get a retirement plan that can help provide an additional stream of income to help keep up with inflation so, so important these days. Then give Greg a call, if you will. You can do that at 813430 7100. You can also email Greg at SafeMoneyMasters.com. Good thing for you to do.
Greg Castle:
Yeah, we'd love to hear from you. Hey, you know, Matt, you know, we normally save questions from our listeners for the end of our show, and if we run out, you know, we have more time at the end. We'll hit a couple of more questions. But we've had so many good questions that we've decided to open our mailbag early and sort of address them up front. So why don't you read the first one for me?
Producer:
Yeah, absolutely. Will So this one comes from one of our listeners to the show and they ask, where will my retirement income come from? I've been saving decades for retirement, but now that I'm close, I'm wondering the best ways to turn our savings into the income that we need to live on during retirement. I think that's a great question and a great way to look at it. You know, actually talking about income.
Greg Castle:
Yeah, I mean, retirement is really all about income. I mean, you know, we build a big nest egg until we get ready to retire. And the purpose of that egg basically is to provide income. Unfortunately, if we don't have enough, that income can run out and there are ways to get guaranteed lifetime income. And, you know, we're happy to talk to you about that. If you give us a call. You know, most retirees receive income from from four main sources. They got personal savings and investments such as IRAs, Roth IRAs, Tsp's, 403 B's. And that's what they need to pull from in order to get that income to live on. Also, once you reach a certain age, some of you who are much older, 70.5, is still it for you and then 72 for some others. And then more recently, you know, it's age. 70 what 73 meant for 73, four for others, and then eventually and thinking 20, 33, it becomes 75 for Roth. I mean, correction for required minimum distributions. So anyway, RMDs basically require you to pull a portion of your qualified assets that money that you've not paid taxes on yet. And when you do that, you know that's money that you can if you don't need it, you can always reinvest it. Or however, a lot of folks find that they need those RMDs for income and the RMDs, basically you'll end up paying taxes on the money you have to pull out, which is basically the required minimum minimum distributions and whatever you have left over after paying tax on that money is yours to spend or do what you want to preferably invest if you have a chance.
Greg Castle:
Another way, too is a company pension benefits. If you're fortunate enough to have a company benefit. I know a lot of most federal employees, state employees, many firefighters, police force, police, police officers and some other folks have pensions. But pensions have gone away from the private sector, you know, quite a bit. So there are folks out there and a lot of our clients basically have personal pension income from annuities. Annuities is the best way to basically create your own pension. And if you've already got a pension, it's a great way to to basically fund a second pension for yourself with money that you cannot live just like your pension from another company. Another source of income that you need for retirement is going to be Social Security income. You know, currently Social Security is is paying well and it's funded okay through 2033, at which point, unless our elected officials actually take some action to do something about it, that amount for all Social Security recipients, even those currently drawing it is projected to be cut anywhere between, you know, a fourth and a third. So for that to happen and again, hopefully our elected officials will get their act together and do something to shore up the Social Security trust fund. And another source of income could be, you know, any additional earned income during retirement. Basically, either through it could be dividends, it could be a second job, it could be a number of different things that could give you additional income. So another question, Matt.
Producer:
Yeah, absolutely. This one has to do with the kind of recurring theme already here on the show today, inflation. And it also relates to this previous question as well. So it's about income. They ask how much will my income need to increase to keep up with inflation?
Greg Castle:
It depends on the year. The cost of living is measured by the CPI or the consumer price Index is fluctuated, but it's averaged between 4 and 5% per year over the last 20 years, which means basically, you know, you need to be able to to have something that's going to keep pace with inflation. You know, we strongly recommend that retirees consider inflation when when planning for retirement and preparing for retirement. Most people don't consider that into their plan. They take a look and they say, this is what things are costing now. And and this is how much money we're going to need to retire on. And if you don't have increasing income in some way, you're going to be really devastated. Because I always tell my clients, you know, look, if if if high blood pressure is considered to be the health, basically the silent killer for health, then inflation is basically the silent killer for your retirement. We saw again, you know, a year or so ago, inflation went up around 9% and had it gone higher and it's gone higher in the past. Had it gone higher or had it maintained that level, there'd be a lot of folks, especially in retirement, that would be hurting right now. So, you know, runaway inflation over the last three years has made this even more important to take to take inflation into account when your retirement or, of course, when you're planning for retirement. So hopefully that answers your question.
Producer:
Yeah, we've got another one here about Social Security and also related to inflation. So they say, will Social Security keep up with that cost of living?
Greg Castle:
You know, Social Security does have cost of living adjustments most years. Last year we actually this year, it was a great adjustment. I think it was 8.7% for Social Security this year, which is awesome. But, you know, many retirees really don't know that this doesn't make up for true inflation that's affecting the products and services they use the most. Most years, I mean, this year was a good year, but most year, you know, Social Security just does not keep up with inflation. That's really a bad thing. But also, you know, we we don't recommend relying on cost of living adjustments to keep up with inflation. You know, again, this is a recurring theme in every one of our shows. You know, consider guaranteed income strategies that can that can experience market like gains with the principal principal protection. So you really can't lose any of your principal. And many of the products that offer guaranteed income, some of those strategies actually have inflation adjustments where basically you can get you can get increase in income over the course of your life. This is a great option to take a look at. And of course we're talking about fixed indexed annuities and they grow like stairsteps. You know, the worst you can do is not have any gains at all in a year. If the market were to decline or the indexes were to decline. That's because you're not actually invested in the index. You're actually tied to the index but not invested in it. And you get to enjoy the point to point protection of capturing the gains without any of the losses. Typically most of the indexes that are offered in fixed indexed annuities.
Greg Castle:
And a lot of the normal indexes, S&P 500, Nasdaq, some have the Dow. A lot of proprietary indexes that have volatility controls in them. Anyway, most of these actually are annual point to point, which means at the end of each year, each contract year for your annuity, your gains are locked in. But if over that period of time the index had gone down, you just don't gain anything. But you don't lose anything. So you can't lose a penny of your principal or protected interest. So it's a great way to to team up with the money you get from Social Security and protect yourself and make sure you've got a guaranteed lifetime income. Now, if you want to learn more about how to maximize Social Security, you know, we'd love for you to give us a call at (813) 430-7100. Of course, you can always give me a call or send me an email at Greg at SafeMoneyMasters.com. Hey, I'm talking about it, Matt. All my listeners on this show. If you'd like to hear me and meet me in person. Castle Financial Solutions Group is going to be hosting a Safe Money Strategy seminar on Thursday, July 20th, and also on Tuesday, July 25th at Carrollwood Country Club here in the Tampa area. You know, again, that's a month from now. That's Thursday, July 20th, and also on Tuesday, July 25th at the Carrollwood Country Club. If you send me an email or give me a phone call, I'll tell you how you can register for that. Registration is limited. We have a limited size room and we would love to be able to see you and meet you.
Producer:
Absolutely would. And you can, of course, email. Once again, Greg at SafeMoneyMasters.com to find out more, get those details and get get your name on the list there or give Greg a call. 813430 7100. All right, Greg, one more question here in this segment of the show. It's it's a doozy. And I know that people are going to be excited to hear your reply. So here we go. When is the best time to make withdrawals from my retirement accounts? When the market goes down. I'm afraid to make matters worse by pulling out money. But when the market goes up, I feel like we're getting in the way of potential gains. So, I mean, that's a that's sort of the the conundrum, I think, for anybody who has investments in the market is when do you get in, When do you get out? I mean, the old adage is, you know, buy low, sell high, but trying to time the market is not always an easy thing.
Greg Castle:
I'm still trying to find the crystal ball that works that that lets me know when that's actually going to happen, when the market's going to go down, when the market's going to go up. I have not been able to find one yet. So to all the listeners out there, you can't time the market attempting to time the market and and make systemic investments or withdrawals is something that we get questions about all the time. Those of you that have retirement plans at work again you know, 401 seconds, 403 B's, Tsp's and so forth. Typically if you're making you're making deposits or making a allocations. And contributions to that and your employer is matching it. You're basically doing what's known as dollar cost averaging. In other words, every month you're buying not every month, whatever your pay period is going to be, every week, every two weeks, every month, whatever you're buying, as the market goes up and you're buying, as the market goes down, you're buying at the bottom. As it goes back up, you're buying it as it goes to the top, you buy more at the top.
Greg Castle:
So basically it averages out, but you can't really time the market. That's why we that's why we spend so much time talking about the importance of a strong income plan and taking advantage of guaranteed income solutions, again, like fixed indexed annuities, safe money strategies. You know, do you really want to spend all your time? In your retirement years, looking at your looking at the Internet or looking at at your phone or whatever, and and watching the stock ticker and stressing out about managing your money and how much you're losing day to day. Most people really don't, but a lot of people do. They don't want to. They just are stuck doing it because they're so afraid that their money is going to run out before they do or their money's going to expire before they do, I should say. So if you want to learn more about how you can take the stock market ticker shock out of your life, you know, again, give us a call at (813) 430-7100. Again, you can shoot me an email directly at Greg at SafeMoneyMasters.com.
Producer:
We'll definitely a great thing to do there and get some of those answers to your questions as well. And speaking of of answers to questions, Greg, you know, we talk a lot about the importance of understanding Social Security and how it works. You just explained a few minutes ago some things about Social Security and how it, you know, at least tries to keep up with inflation each and every year. But still a lot of common misconceptions out there that that kind of brought it to mind here. So maybe let's try and clear up some of those. I kind of compare us in this part, or at least you in this part to the MythBusters, you know, I mean, I used to love that show. We're just we're kind of like the MythBusters, but with less explosions. So we'll try and keep it with fewer explosions here. Let's go. All right. So number one, common misconception or myth, everyone's Social Security amount is the same.
Greg Castle:
Again, if we do an hour right and wrong segment, that would be wrong. Your Social Security is is based on your income over the last 35 years. They're basically going to take, you know, 35 years worth of your income producing. They're going to come up with a calculation or they have a calculation that's going to determine what your amount is going to be. So, again, the longer you happen to work, especially in most cases, most people's income is higher as they get older toward the end of their career. So that's going to basically knock off one of those low things you got way back in your teens and your 20s or later, depending on when you actually retire. But the longer you end up working again, the higher that calculation is going to be because you're 35 years of earnings are going to be higher because the low numbers have been knocked off because you're working longer. So again, everyone's income is not going to be the same. It's going to depend on your personal income history. You have to have at least four quarters of basically, you know, ten years worth of of. Income in order to be eligible for Social Security.
Producer:
Well, very good. Well, that clears that one up. So the second one here, common myth about Social Security. Your benefit amount is fixed forever.
Greg Castle:
Again, this would be false. You have COLAs, for example, we talked about earlier cost of living allowances. This year was a great cost of living allowance, 8.7%. Most years it's never been that high. The Social Security can also reduce your benefits. So we talked about earlier, you know, they expect that they may need to reduce everyone's benefit if the Social Security trust fund depletes as early as 2033. And again, that can be devastating. It can be as much as 25 to 33% could be more. But that's the projection right now, 25 to 33%. So, again, you know, your amount is not fixed. Hopefully it goes up. Hopefully you get good cost of living increases and hopefully our elected officials get their act together and stop arguing so much and actually take time to try and get this resolved, because right now they're spending a lot of time, you know, beating each other with baseball bats. And and they're really not focusing on the things that are really important to the taxpayers and to the country, especially our seniors. Yeah.
Producer:
You know, God forbid we elect people who want to get something done. You know, that's actually.
Greg Castle:
That actually happened. Come on now.
Producer:
That's crazy talk these days. It's crazy talk. Yeah. All right. So number three here is you are stuck with the benefit that is offered to you.
Greg Castle:
Not true. This is one of those that's kind of hard to answer. I say not true. But once you once you elect to take Social Security, the answer to that is going to be yes. Also, go back to the question we just answered where you will get adjustments for Cola and Social Security can reduce it. But the not true part of this would be is that you have options. In other words, if you delay taking Social Security, Social Security is going to pay you more. Typically, Social Security increases on an average of 7 to 8% per year. So it's like having money in an 8% bond, for example, that's going to, you know, going to increase year by year by year. The longer you wait, typically in most cases, the folks that will listen to this, your retirement age is going to be somewhere. Correction Your full retirement age is going to be somewhere between 66 and 67. If you work before full retirement age, you're going to be subject to the Social Security earnings test. Most people don't don't realize this, but Social Security earnings test is basically for 2023, you can earn $21,240. Everything above that. If you if you're working, if you've still got a job, that's one thing.
Greg Castle:
But you take Social Security, I should say, if you take Social Security, for example, it's 62 and you have not yet reached your full retirement age, but you decide to keep working for it. Maybe you take a part time job or take a consulting job or whatever at that point, which you've already elected to take Social Security, you'll be subject to the Social Security earnings test. So if you make over $21,240 in 2023, you're going to have to give $2 back for every correction, $1 back for every $2 you make over that 21,000 and change. So it pays you, in other words, to wait till full retirement age, at least if you plan to keep working at a at a second job. Once you take Social Security and preferably depending on your situation, you know, you can wait till age 70, you can take it at any point after age 62, but once you take it, you take it. If you take it prior to full retirement age, you're going to be subject to that Social Security earnings test I just mentioned to you. So that's enough about that question. Hopefully it answered. So what else have we got?
Producer:
Well, that so the next one, basically we were going to go over. You basically pretty much just answered it as part of that. Wait, if you wait until your full retirement age or if you wait until, you know, as long as you possibly can, you give yourself that essentially 8% raise every year. So that was our next one, is you should draw from Social Security as soon as possible, kind of, you know, take the money and run, as the old song says. But that is, again, not an advisable thing in a lot of cases.
Greg Castle:
There are times there are times whenever that you should take it. You know, for example, if you have health issues, if you have, you know, previous health issues that may shorten your life, it may make sense in some cases to take it at 62 when you're eligible. In most cases, you know, we advise you to wait, you know, until you actually need the money or until you can't work anymore. And also situations everybody's situation is different. You know, if you're married, there's an age difference between you and your spouse. You have to be the highest wage earner. You know, it's recommended that you wait until age 70. That way, your spouse, who in this case would be the younger and the the the lesser earner, would be able to draw the higher of the two Social Security amounts. So, again, everybody's situation is different. We'd be happy to help you learn how to do that. But what else have we got?
Producer:
Matt So yeah, one last myth or misconception about Social Security to clear up here is that your benefit will increase every year.
Greg Castle:
Uh. Unfortunately, that would be no. You know, cost of living allowances or colas, you know, they don't necessarily happen each year. It depends on the economy. It depends on the CPI. It depends on a number of things. So it's nothing that you can count on. There have been years when Cola was not granted, so there are some years where your Social Security payment, your Social Security check basically remains stagnant for the next year. Um, but, you know, there's no guarantees to answer your question. But I'll tell you this. If you want to learn more about how to maximize your Social Security and have strategies to do that and how to fit in your how to fit those strategies into your retirement plan and give us a call at (813) 430-7100. Again, that's (813) 430-7100. Or shoot me an email at Greg at SafeMoneyMasters.com. You know, Matt, you know, we talk a lot about annuities and how annuities can fit into your retirement plan. And since June's officially Annuity Awareness Month, I think it might be fitting to share the results of a recent survey by the American Council of Life Insurers. Basically, they found that Americans who have annuities. Surprise, they want more annuities. The survey found that, you know, folks who already own annuities or other products that provide guaranteed source of lifetime income, they actually love the idea of buying more annuities for additional lifetime income. Um, the survey said that roughly 2,526% of the participants said they already owned annuities and 86% of the survey participants who owned annuities said they were somewhat or very interested in investing in additional annuities. And then 76% of the participants were with pension plans and 67% of the participants without annuities said they wanted to invest in annuities. So annuities are. Basically a hot product. And those folks who actually have done some research on them and basically already have them have found out how beneficial they actually are. And it's no surprise to me that annuity owners want more annuities.
Producer:
Yeah. You know, it's it's especially these days, Greg, when there's been so much uncertainty in the markets, there's been a lot of ups and downs, more downs than UPS. It seems like over the last couple of years. There are, you know, a lot of people out there who value that safety. And and also, you know, with a chance to get that market like growth without losing a penny of their principal and any interest that's credited to that account either year to year or whatever your crediting period is, you're not going to lose that principal or that that growth every year. It's going to be locked in if that's, you know, you're on that yearly point to point. So it is, you know, something that I don't find surprising either, that you bring it up and I hear those numbers. I think that a lot of people are getting even more and more interested in annuities. And and maybe you're listening today and you haven't really, you know, considered annuities before or you're, you know, you want to find out more about them and and the different types and maybe what it could do for you, what an annuity could do for you. So if you want to learn why all of these people who we've been talking about love, annuities or if you just want to, you know, find out more, you've got some questions that you want answered, you can give Greg a call. 813430 7100 or send him an email. It's Greg at SafeMoneyMasters.com that once again, Greg at SafeMoneyMasters.com. Well, you know, a lot of our shows each time around here, Greg, are spent talking about the importance of planning for your future, specifically planning for retirement. Maybe, though, we should talk for a minute about what happens if you find yourself having not planned for retirement and you get there and it's one big surprise and not the good kind.
Greg Castle:
No, you're exactly right. What's that old saying? If you planned a correction, if you fail to plan, then you plan to fail?
Producer:
Yep, absolutely.
Greg Castle:
I've heard that time and time again. And it's so right in every aspect of your life, you know? But many of our viewers may not realize this thing, but my PhD is actually in psychology, organizational psychology. And there's this weird psychology that can cause a retiree to drag their feet on developing a personal financial strategy. Know they might worry that, you know, if they know too much about their finances or how their finances are going to play out over time, it'll either scare them to death or at least disappoint them as a financial reality begins to set in. You know, you can think of it as a distorted version of the old saying, you know what? You don't know can't hurt you. But, you know, retirees spend away and figuring that they'll worry about what they have later, which is a big mistake because, you know, later comes sooner than you actually actually plan for it. Now, however, in the case of retirement, what you don't know can hurt you, especially when when time isn't on your side and big financial mistakes are much harder to recover from since you aren't working, or at least you're not working as much as you were in earlier in your career. And the lifespan clock is ticking on you as well. So at some point we all, you know, expire and the clock stops running around, the running around the dial. Hopefully it comes later for all of us then. Then. Then the average just put it that way. So should you find yourself procrastinating and not developing a long term retirement plan? You need to take heed because this could get you into serious trouble over the long run with your post-work lifestyle, possibly taking a hit in one of two ways, either by spending or actually overspending, actually either by overspending or underspending.
Producer:
Yeah, you know, you want to have it just really brings home again, the importance of having a plan. Because if you don't have a plan in place, then you are just really kind of going into it blind. You know, you may have money put away in your whatever retirement account you have. 401. K IRA, you may have been putting that in. You might have even be putting enough in if it's an employer sponsored plan to get that employer match, you know, of money, which is free money. So you should be doing that. You know, I like free money. That's my favorite kind. But, you know, if you have all of that, but then you don't have a plan when you get to retirement of how you're going to draw that down or how you're going to, you know, turn on some kind of income stream that is really, you know, not it's not good because then you have a good chance of that greatest fear that we talked about a couple of weeks ago. But, you know, where retirees fear running out of money in retirement, even more than death itself, you have put that in in place where that could come true for you. You could run out of money before you graduate off of the planet. Well, you're exactly right.
Greg Castle:
We'll talk about overspending a little bit. First, on the overspending side, you know, the greatest risk is quite obvious. You know, you can run out of your retirement funds too soon. This can put you in a very compromised situation, which might lead to a number of scenarios. It could possibly force you into prematurely selling assets that you don't want to sell. Selling that boat, selling that camper, selling the house, selling collections, whether it be gold coins or coins in general, or stamps or whatever that you really cherished all your life anyway, It can also lead to significantly downsizing your lifestyle. Again, you have a house that you've lived in all your life. You love your neighbors, you love for the kids to come, you got rooms for them to stay in and all of a sudden you find yourself having to sell that house. Not by choice, but because of necessity and moving to a smaller domicile in some cases. It's not just a matter of, you know, moving, moving to a smaller house. It's a matter of moving to a lower cost area. Because you can't afford to live where you are anymore. And here in Florida, South Florida and Tampa. Of course, you know, we don't have a state income tax, but we have property taxes that more than make up for it. And, you know, taxes aren't exactly cheap around here, especially when it comes to property. And there are much cheaper areas to live in. We're not trying to get you to move. Don't get me wrong. We're just trying to make you aware that if you don't plan for things and if you have a overspending type lifestyle, that at some point it's going to catch up with you and you may have to do things like downsizing your lifestyle or your worst nightmare.
Greg Castle:
And that would be basically being the adult in the family, but having to ask your kids for help. And I've got clients that have to do that, not have to, but have had to do that in some cases because they didn't plan. They started planning way too late. And you just want to do that. So now then, in the aftermath of whatever happens, you know, you've got to deal with all the headaches and the stress that come from the tense situation of when your financial resources are strained. Um, you know, one of the biggest reasons for divorce in our country and probably in the world is because of finances. One side don't know what's happening. You know, years ago when I was investing in real estate, I had a guy come to me at one point their house. This was back before the housing bubble. Actually, it was close to when the housing bubble actually started. But the guy was the the wife liked to overspend. She had an addiction to to QVC on TV. And they had packages showing up every day like a lot of people I know have Amazon packages come in every day. Um, anyway, the. The guy answered. We went to went to my website and sent me a notice that he wanted to talk.
Greg Castle:
So I went over and and they were literally four days from the courthouse steps to sell their house. The wife knew nothing about it. He was kind of a shy, meek kind of guy. And I told him, I said, Look, I'll be happy to take the house, but, you know, we need to talk to your wife first, make sure she's on board. And so what I'll offer them to do is basically take over the mortgage and help them, you know, give them some money to move. And the wife thought I was the devil. Because I was trying to help him do that. She knew nothing about this happening, but it was her fault, actually. So anyway, finances can create. They ended up getting divorced because he didn't tell her about all this stuff and he was angry at her because she kept spending all the money that created the situation. So financing can catch up with you. Just be careful. So these outcomes basically are something that no one should have to deal with in retirement. If you plan properly, you control your spending, your overspending, especially then, you know there's a possibility that you might actually be able to enjoy retirement and and look like those couples and all those pictures on the brochures you see that are walking on the beach somewhere hand in hand with the sunset or the sun coming up on the water like the waves crashing all over the place. It's a great picture. And hopefully it's a type of picture that you can actually live and enjoy.
Producer:
Watch this. It's a lot. It's a lot better than than winding up in divorce court. You know, it's.
Greg Castle:
It sure is. It's true. So true. So true.
Producer:
So we got overspending there, you know? I mean, and that one is is fairly obvious. I mean, you know, you're going to if you spend too much, you're going to eventually run out of money. If you don't have if you don't have that income stream. Right. So what about under spending? What's what's the problem with that? I mean, I think a lot of people might be listening and saying, oh, well, I guess I'd rather underspend than overspend in in retirement or really any time because then I'm not going to run out of money. Yeah.
Greg Castle:
You know, when it comes to underspending, you know, in some ways underspending might not seem all that serious. You know, after all, it may mean you're basically saving more money for an emergency or, you know, for passing on an end of life surplus to a inheritors, which is great and honorable. While true, you know, you're also shortchanging your partner and yourself, you know, in those precious and finite moment years, you want to be able to make some memories and enjoy each other and enjoy your time together. That you have left under spending creates a problem in a lot of ways. Number one is that you want to make sure that you're able to to make memories. You every trip we make, you know, you should always try and make memories. I mean, over a half century ago, we talked about vacations and new occasions and staycations before. But, you know, I come from a family that didn't have a lot of money. Dad didn't make much money. Mom had menial jobs whenever she worked. She didn't work all the time. A lot of times she was a housewife. But I can never remember a year when I was a kid all the way through, you know, teenager when I left home that we didn't take a vacation. It was always the Florida, you know, for the first few years, it was a week to ten days in Daytona Beach.
Greg Castle:
Mom left to walk on the beach. Dad loved the beach. You know, later on in my teen years, we switched over to Panama City. It was closer and and it was building up and everything was great. But, you know, half century later, I mean, some of my best memories of childhood, you know, other than sports, are those weeks we spent on the beach for vacation and they save for it. I mean, they, they they didn't make a lot of money, but every year we had that vacation. So you want to be able to make memories. You don't want to shortchange yourself or your kids. And and I'm not one of those guys and one of those advisors that say, look, you know, I heard a I was listening to a radio show not long ago and one of the one of the gurus who will go unnamed was basically telling someone who called in that, you know, you need to sell your your nice car and get $1,000, you know, piece of crap to get around over there. And in my mind, I'm thinking, you know, he's going to spend more money fixing and repairing that $1,000 piece of crap than anything else. So, I mean, you don't want to go out and overspend like we had in the last segment here.
Greg Castle:
You want to be able to to to balance out, which that's really the key. But, you know, now is the time to do things you've always wanted to do. You know, you can travel to destinations or far flung getaways that you've long dreamed about. So you look like those couples in the pictures we just talked about a second ago. You know, finally remodeling that kitchen that you've waited for so long. Going back to that topic, you know, go back to, you know, after my mom had to put her in a nursing home, she had dementia. And the house that I grew up in, I was there since I was in the first grade, had to refinance the house in order to make all this stuff happen. But we never had a dishwasher. The dishwasher in the kitchen was always me and my brother. We didn't have a dishwasher. So I was determined that when I remodeled this house that, you know, I put a dishwasher in for whoever's going to rent it so I could help pay for mom's care. And after I got finished with this thing, it looked really great. And I wondered, you know, why did it not do this for her before? You know, why didn't it do it while she was still alive and not alive and when she was still, you know, functional and living in the house alone? You know, don't wait till the last minute to do things you've always wanted to do.
Greg Castle:
So treating your grandkids or other loved ones is a marvelous trips and new opportunities. You know, those of us that have grandkids, there's nothing like them, you know, just. Um, and it's important to share things with them. Again, you don't have to spend every penny you got on them. You know, it's buying gifts for every time you go out shopping, every time you take a trip, you have to do it. But you know, it's good to make memories with the grandkids, too, because someday, you know, you you will be gone like your grandparents were. And you want to be sure they got memories of you. So that lives on well beyond well beyond your lifetime. In any other life, any other lifelong goals that you've got or dreams that you might have been putting off until later? It's a good time to take care of those right now and make some memories again. Don't overspend, but put aside enough money each year that you can afford to do some things that make memories with the family and the loved ones that you happen to have.
Producer:
Yeah. You know, I mean, it's important to not miss out on life. You know, I mean, you know, you're talking just a minute ago about that, you know, other sort of financial guru who says, I think this is. He's also famous for saying things like, you know, eat rice and beans and and don't have any fun and don't, you know, do anything that, you know, get 14 jobs or whatever. You know, I'm exaggerating there. But but do all of these things have zero fun in life and then you'll be fine? Well, you know, that's going to last about as long as the average diet lasts where you're depriving yourself of food that you might want. So then you might go on your diet, but then eventually you're going to have those cravings. You'll be right back off the diet and then you'll put on the weight that you lost and then some, you know.
Greg Castle:
So, yeah, don't get me wrong, that particular guru has got some great points. He's got some great ideas and he offers some great advice in most cases. I don't agree with all of it, but you know, most people probably won't agree with all that I have to say either. So everybody's entitled to their opinion. I joke around and say, it's my opinion ought to be yours. But the. You know, just a lot of folks that I'm sure that listen to a show are very successful. They do what I have to do and they're able to to move on and get out of debt and keep their debt minimal and come out great, which is great for them. But there are a lot of folks that I'm sure that are miserable. Because you know they're basically depriving themselves of. Of some comforts that are reasonable that they could probably afford and. And still be able to pay off their debt and be able to, you know, to have a lifestyle they want down the road somewhere. The key in this whole thing is basically balance. Their stress and anxiety are the last thing you need in retirement. So far too often they lead to poor health. Poor health can lead to increased medical costs, which puts even more pressure on your retirement and financial resources. So it can become a vicious cycle, you know, caused by the fact that you don't have a plan that gives you confidence. And again, the key is balance. So if you want help developing a plan for retirement that gives you balance and confidence, then give us a call at (813) 430-7100 or email me at Greg at SafeMoneyMasters.com. And again, you can use those same contact things too, to let me know that you'd like to attend the Safe Money seminar that we're going to have at Carrollwood Country Club on July 20th. That's the Thursday at 630 and July 25th, which is the following Tuesday also at 630 at Carrollwood Country Club. So I'd love to meet you. Come by and say Hi.
Producer:
It's this week in history.
Producer:
Well, very good, Greg. So just in our last couple of minutes here, let's get to a little this week in history or this day in history, really for June 20th. Some some big birthdays, huh?
Greg Castle:
Yeah, normally we do this week in history. But as I was looking for things, I found out that there's a lot of things happening today, you know, June 20th. So we'll just get into it. So June 20th, we have the birthdays of Brian Wilson of the Beach Boys. He turns 81 today. And good thing that he says summer birthdays since they have all the beach music coming out from the Beach Boys. So it's appropriate. Lionel Richie of the Commodores and Judge on American Idol turns 74 today. Actor John Goodman, a number of movies he played into it. There was a there was a series he starred in with Roseanne Barr. I can't think of it off the top of my hand. But he turned 71 today. Then actress Nicole Kidman turns 56. We take a look at events in history on this day in 1975. The first summer blockbuster film in history premieres. You know what the name of that was? Matt.
Producer:
I want to go. Duh, duh duh duh duh duh dun dun dun dun dun, duh.
Greg Castle:
It was Jaws. Steven Spielberg, first blockbuster in film history. That surprised me when I saw that. 1893. Court case in New Bedford, Massachusetts. Lizzie Borden was found innocent, which surprised me. I thought she was guilty. Lizzie Borden was found innocent of the axe murders of her mother and father. And also today is a gruesome events scheduled with it is basically today is National American Eagle Day is it is the ugliest dog day. It's National Ice Cream Soda day and it's National Vanilla Milkshake Day. I got the cutest dog around, so that doesn't really apply. But I'm going to toss a coin and see if I'm going to go for the ice cream soda or I'm going to go for the vanilla milkshake. I can get a vanilla milkshake with some coke in it and make an ice cream soda out of it. So that works, too.
Producer:
Yeah. There you go. I love that too. Two for the price of one. That's great. Well, that is going to just about wrap it up as I look at the clock here. Greg, looks like our show has come and gone for another week, But I've learned a lot. I know I've had some fun here with you as well as I always do. And I appreciate you bringing your knowledge to our listeners. We'll just look forward to doing it again next week.
Greg Castle:
Yeah, man, same here. Always enjoy these shows and I guess we'll see you again next week. Same bat time.
Producer:
Same bat channel.
Greg Castle:
So long, folks. Have a great week.
Producer:
Thanks for listening to Safe Money Masters with Greg Castle. You deserve to work with a financial expert who has a track record of helping clients exceed their financial goals by implementing safe and proven strategies to schedule your free No obligation consultation with Greg. Visit SafeMoneyMasters.com not affiliated with the United States government. Greg Castle does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness or the results obtained from the use of this information.
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.
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