How to Keep Your Money Safe from Your Own Emotions

9.15.23: Audio automatically transcribed by Sonix

9.15.23: 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 Castle.

Greg Castle:
Hello and welcome to Safe Money Masters, where our main goal is to help you, our listeners, become masters of your money and teach you how to keep it safe. You know, we hope you're having another terrific Tuesday. Uh, and of course, here in Tampa, where I'm located, when you're actually just north of Tampa, where most of you are located, uh, it's not only a terrific Tuesday, it's also a a toasty Tuesday. So. So I understand, Matt, that where you are, it's a stormy Tuesday.

Producer:
Yeah, we've had storms off and on. It's like, you know, Atlanta can be sort of like Florida sometimes If you don't like the weather, wait about five minutes and it'll change. And that's we've had those storms off and on here for a while. Oof!

Greg Castle:
Well, anyway, I am Greg Castle. I'll be your host, along with my co-host and executive producer, Matt McClure. You know, Matt, here we are again on another terrific Tuesday lineup. And as usual, why don't you tell our listeners what they can expect to hear on today's show?

Producer:
Yeah, absolutely. Greg. I will not hesitate one second longer to do that because it is it's a great lineup for today as per usual. We keep raising the bar here, but some of the things we're going to discuss on today's show, of course, we'll start things off with our quote of the week, as we always do. It's always a great way to start our conversations with some some words of wisdom from some others that we can be inspired by. We'll play a little game as well called right or Wrong, and we'll put your knowledge to the test out there so you can play right along with us. And this time around, on right or wrong, it's going to be a special Social Security edition of that game. Also, emotional investing. We're going to talk about it and explain how it pays to keep your emotions under control. And I will say, you know, not just in life in general sometimes, but especially when it comes to investing, You don't want to do that on an emotional basis, like your emotions get the better of you, right? Also, we'll have our cost Cutter of the Week some bad banking habits that are costing more than you think.

Producer:
And a little bit more about Life Insurance Awareness Month. We'll also do this Week in History. Boy, we've got a lot coming up here on the show over this next hour, Greg. And wanted to mention, too, to our listeners, you know, if you've been listening to the show because you're interested in improving your particular financial situation and your ability to retire someday, as we say, that is the goal around here. Let Castle Financial Solutions help you with some one on one attention. All you have to do is give them a call. 813 430 7100. You can also visit the website SafeMoneyMasters.com. They'd be happy to meet with you personally and provide some customized guidance and solutions based on your specific financial needs. That is what it is all about your specific situation. Because hey, there's only one you. There could only be one, you know, proper plan for you as well. Well, Greg, I think it's time for us to get to the aforementioned and ever popular quote of the week.

Producer:
And now wholesome financial wisdom. It's time for the quote of the Week.

Greg Castle:
This week's quote comes from that most famous quote, master of all time author unknown, who once said retirement is wonderful if you have to essentials much to live on and much to live for.

Producer:
I love that.

Greg Castle:
The I see so many quotes that are attributed to authors, so I figured he must be pretty popular.

Producer:
Yeah, that's right. And I wonder if he's if his, you know, cousin or brother or sister or something is anonymous. I've seen that one a bit, too.

Greg Castle:
Oh, that's. That's highly possible. I don't know. Anyway, so but going back to the quote, you know, there's a there's really a lot in this thing. You know, first of all, having much to live on is really essential if you want to be able to see yourself through retirement. You want to make sure most people don't want to really lower their their lifestyle or their standard of living when they retire. And the only way to make sure that that doesn't happen is to make sure you have enough guaranteed lifetime income to make that happen. And also you have low debt. So your you don't have an income gap between your income and your expenses. And much to live for. You know, everyone needs a purpose. I've seen so many people that retire and they've got nothing to do. They've got, you know, they've moved out of the area, don't have a lot of friends in the area. So they become, you know, just very stagnant in their lifestyle and they don't get involved with anything and they're dead within five years from retirement. So you find people that actually you take a look at all the folks who really had a purpose. I mean, you've got, you know, not all the folks, but a lot of folks do. You know, for example, you know, George Burns, Betty White, you know, they never intended to retire.

Greg Castle:
Queen Elizabeth, You know, she was never going to give the monarchy until she passed away. So they had a purpose. And for me, you know, as long as I'm physically, mentally and emotionally able to continue what I'm doing, I'll be here for you. So just remember that retirement is wonderful. If you got those two essentials, much to live on and much to live for. Hey, Matt, before we get into today's topics, you know, I want to take time one more time to remind our listeners what the show is all about. You know, the whole premise of this show is to bring you topics and tools and information that's going to help protect you, protect you, grow your wealth and your retirement income. So as always, we hope you keep tuning in so you can catch us every Tuesday evening at 6 p.m. on Monday, talk 1010, and on your local stations, 92.1 and 103.1. If you happen to miss an episode, you know, just go to SafeMoneyMasters.com or wherever you listen to your favorite podcast and catch us there. Also, you can check out our YouTube channel and subscribe to see weekly video highlights. And if you have any questions or comments, we would love to hear from you. Feel free to email me personally at Greg at SafeMoneyMasters.com or you can give me a call at 813430 7100.

Producer:
And doing that, I think Greg is a very important thing for folks to do. If they have any questions about any of the topics we talk about today or on any of the episodes here. And it's a great thing because there's really by doing that, nothing to lose really mean, you know, except maybe a minute of your time. If that is even you feel like that's a waste, which it's not going to be, but it's the only thing that you're putting on the line here is just a minute of your time because, Greg, you and the team there at Castle Financial Solutions Group do offer something that is of great value for no cost out of pocket at all. And that's a full retirement plan consultation for the listeners here. Talk about what that entails, if you will.

Greg Castle:
Sure. As you said, you know, we provide comprehensive consultations at no cost to our listeners. Never any obligation. You know, you only work with us if it's a if it's a mutual fit. In other words, you know, we want to make sure that you feel comfortable that we can help you and we want to make sure that, you know, you're someone that we want to work with. And we're not talking about, you know, the size of your nest egg or the size of your portfolio. We're talking about somebody that's a nice person because we don't like to deal with people that aren't nice because they'll be problems down the road anyway. You know, we'll also help you analyze your financial situation and we'll closely examine any assets that you may currently have, make any recommendations we possibly can to help you maximize your retirement income and also minimize your tax burden. If you've got a 401. K or 403, B or IRA, we can take a look at how many how much you're paying in fees and help you and cut any unnecessary cost. We can also help you with your Social Security planning. No, Social Security seems so simple. You know, you turn 62, you file for Social Security, or you wait the full retirement age at 66 to 67, depending on when you were born. And so you just you got a number there. But the reality is Social Security planning is very strategic. Depending on your situation, whether you're married, whether you're single, what your expenses are, how much income you have coming in. So let us help you out with a plan for that. It's also, you know, part of the retirement roadmap. And, you know, we can help you explore strategies that are going to help you, you know, have a more stable and secure retirement. Because remember, you know, it's your money. If it matters to you, I can guarantee you it matters to us. Let us help you.

Producer:
Come on down as we test your financial knowledge. In right or wrong.

Producer:
A little bit of a game. You know, we like to have fun around here on on occasion, actually, more than on occasion. We like to laugh and have a have a good time, but we also like to learn something at the same time. And that's what right or wrong is all about. Greg, you'll kind of present the statement here. It works like a like a true or false kind of a thing. And then you at home in the car, wherever you might be, guess along with us if these statements are right or if they are wrong.

Greg Castle:
You know, we get questions from our our listeners all the time that ask us about different topics. Social Security is one of the biggies. Um, you know, in this week's right or wrong, we're going to sort of test your knowledge and share information on some of the most important details and features of Social Security benefits. So, you know, Matt, you got the list of of what the what the questions were actually set in. So why don't you give us our first right or wrong question here?

Producer:
All right, let's do it. Statement. Yeah, statement question. You know, sometimes they can be the same thing in this particular scenario. Guess there are more statements here. And the number one statement in right or wrong, this time is under current Social Security law, full retirement age is 65, no matter when you were born. Is that right or is that wrong, Greg?

Greg Castle:
You know, that's going to be wrong. You know, the full retirement age for Social Security benefits in the US is 67 for people born in 1960 or later and 66 for those born from 43 to 54 and 66. In two, four, six, eight, ten months or whatever for people born from 55 to 59. So the retirement age increases by two months per birth year.

Producer:
Wow. Gotcha. So, you know, could make it easy. Gotta keep it a little complicated there. And that's exactly what it is. And I bet. Do you find a lot of confusion about that particular question there, Greg, about what your full retirement age is?

Greg Castle:
I do. You know, there's so, so many people just to think about, okay, I'm going to retire at 62. They don't think beyond that. Other folks, you know, realize that that especially folks that are older, you know, 65 are stuck in their mind because it was 65 for so many years. And in some cases, 65 is the right number. But in most cases, you know, it's going to be at least age 66. And if you happen to be, you know, born after 1960, it's going to be 67 for full retirement age. Yeah, But what I'd encourage you to do is all our listeners do is, if nothing else, you need to go to ssa.gov like social security administration.gov tsa.gov. And if you haven't already done it, sign up for an account there for a couple of reasons. Number one, not only to tell you what your benefit is likely to be as time goes on, but also you want to check and make sure that someone else has a Social Security. Your numbers, a lot of fraud that goes on. So it gives you a chance to check things out. So remember ssa.gov.

Producer:
Yeah, it's a good thing to do and very interesting to to see, you know, you can see a lot of information on there projected, you know, Social Security income and all of that based on your current you know, like where you stand now and how much income you've had over your life sort of the average. So it's it's a good, good thing to to go and do. It can be really eye opening there. All right. So that one was wrong. Number two, let's see if we can redeem ourselves here. Number two, in right or wrong, in most cases, if I take benefits before my full retirement age, they will be reduced for early filing. Is that right or is that wrong? Correct.

Greg Castle:
That is right. You know, you can start receiving benefits as early as age 62. But, you know, of course, if you choose that option, your benefit amount is going to be permanently reduced. The reduction is based on the number of months you receive benefits before reaching your full retirement age. The exact reduction is going to vary depending on your specific full retirement age, which is based on your birth date. It will be reduced as other other complications as well. If you if you if you take your benefits before your full retirement age and you continue working, you'll be subject to the Social Security earnings test, which means that for every $2 you make above the limit, which this year is $21,240 for every $2 you make above that amount, you got to give $1 back. So if you're going to continue working at a you know, this is just a little bit of money coming in and you're going to make above that amount, above that limit, 21,240 is better to hold off. Just just wait on Social Security until you decide you don't want to work anymore. And again, it depends on your particular situation. And let us help you figure out what the right answer is.

Producer:
Yeah, a lot of people think, Oh yeah, I'm just going to reach the age of 62 and take the money and run, as the song says, but not always the best for your individual situation. Well, number three, so we're batting 500 about right now. So number three, in right or wrong, the Social Security edition is if I have a spouse and he or she passes away, I will receive both my full benefit and my deceased spouse's full benefit. Is that one right? Or is that one wrong, Greg?

Greg Castle:
You know, there's so many people that wishes that was right. But unfortunately, it is wrong. You know, Social Security is going to continue to pay benefits to a surviving spouse after one of them passes away. But it's only going to pay the larger of the two benefits. So payments that, you know, for the smaller benefit of the two will cease immediately after the death of the first spouse. I get that question a lot. You know, can I get both of the benefits? No, you can't. And again, the fact that, for example, there was an age gap, especially if the male tends to be older than the female, there's a high probability based on statistics that the male will pass away before. And if the male also happens to be the highest breadwinner in the family, it behooves them to hold off as long as possible, even up to age 70, before they take benefits. That way they will continue to increase the benefit and their spouse will be able to collect that once they pass away. So it's just, again, part of the strategies that most people don't know. They would be happy to help you with, make sure you maximize your Social Security benefits.

Producer:
Yeah, timing is super, super important there. All right. So number four, in right or wrong, if I delay taking Social Security benefits past the age of 70, I will continue to get delayed retirement credit increases each year that I wait beyond the age of 70. Is that right or is that wrong, Greg?

Greg Castle:
It's wrong. Get the I get this question a lot. You know, it's kind of like, okay, I really don't need the money. I'm age 70 or approaching age 70. Do I need to take Social Security now? I'm not going to take it. I'm 70 to 74. You can take it whenever you want to take it past age 70. Unfortunately, you're not going to get any credit. You won't get any more at age 72 than you would have at age 70. And on top of that, you will have lost two years of benefits if you wait that long to retire, because your benefits don't start until you actually sign up for the benefit. Age 70. Your birthday at age 70 is the last time that your Social Security amount actually gets credit for your account. So anything beyond that doesn't really count if you're age 70. Talk to Social Security. Start getting your money.

Producer:
Yeah, that's when you get your money.

Greg Castle:
It's your money. If you're matters to you, it matters.

Producer:
That's right. That's right. Or as I was going to say, that that's the time to take the money and run there, no matter no matter who you are at that point. Well, all right. So we'll see one more statement almost a question again, one more statement left in right or wrong, and we'll see how we end up if we can end on a positive note. And here it is. Based on the government's most recent calculations, Social Security benefits could be reduced by 20% or more for everyone by the year 2035. Is that right or is that wrong, Greg?

Greg Castle:
Right and wrong. Mostly right.

Producer:
This is like we need we need the the Truth-O-Meter or whatever, you know, it's like mostly mostly.

Greg Castle:
The the right the right part is that, you know, basically it's going to be it's going to be reduced. The wrong part of that would be that, you know, it's going to happen faster than 2035. So, you know, it's actually going to be 20, 33 is when they look, the cuts are most likely going to happen anyway. So a little more explanation here. You know, the winner of the 2024 presidential election is going to face Social Security trust fund rapidly approaching insolvency. Everybody, I think, is aware of that. The program's trustees are projecting that the old age and survivor insurance or the oh, a C trust fund is going to deplete its reserves by 2033. So when today's 57 year olds, you know, reached a normal retirement age and today's youngest retirees turn 72, you know, for a typical dual income couple retiring in 2033, you know, we estimate that this is going to represent an immediate $17,400 cut, incur a $1 annual benefits and an immediate $13,100 cut for a typical single income couple. So you're looking at a pretty drastic reduction by 2033. So even if you're not politically active, it's a good time to start contacting congressmen and senators and get them off their best intentions to to go actually do something that's worthwhile for for the taxpayers out there, regardless of which side of the aisle you sit on. It's a problem that faces. All political affiliations, not just Republicans and Democrats. So. So if you want to retire someday and you want to be able to retire, you know, based on what you were promised all those years. Contact somebody who can do something about it.

Producer:
Yeah, that's absolutely true. And, you know, don't just go like the think there's a meme online. I believe it was from The Simpsons. The Simpsons. And it's the, you know, the the granddad yelling at a cloud, you know, just, oh, this fist in the air. Just don't just yell at the clouds. Don't just yell at the sky. Go to the people who can actually do something about it and and get it done because, yeah, I mean, just think about all of the different the ripple effect, you know, of this, the hit that the economy would take because there would be millions and millions of retirees who would not have this income that they were promised. And so that means less money being injected into the economy on a daily basis. You know, less, you know, coffees being sold, less meals being purchased, less gas being put in the car. All of those things would would happen. And and actually, as we continue our Social Security discussion here, Greg TSA.gov actually recently put out a new report. And so we should probably, you know, share with our listeners exactly what that report had to say. So it goes a little bit more into kind of some numbers and some good info here, Greg. So share that with us, if you will.

Greg Castle:
All right. Um, you know, based on their best estimates this year, reports show that, number one, the the hospital insurance trust fund or the he will be able to pay 100% of the total scheduled benefits until 2031, which is three years later than reported last year. At that point, you know, the fund reserves will become depleted and continuing program income will be sufficient to pay 89% of the total scheduled benefits. Now, the one that most people are are really concerned about is the old Age and Survivors Insurance Trust fund that's going to be able to pay 100% of the total scheduled benefits until 2033, which is one year earlier than reported last year. You know, which is a bad news. It means that basically it's running out of money sooner than what was originally expected. You know, at that time, the funds reserves will become depleted until continuing program income will be sufficient to pay 77% of scheduled benefits of 77%. Basically, you know, it's a pretty significant cut. And 23, almost a quarter, almost 25% cut. 23%. Almost a quarter of your benefit would be wiped out. So correctly choosing when to start taking Social Security is perhaps the most important decision you can make when when planning for retirement. You've only got one chance to get it right. So, you know, let us help you consider all of your options with our free Social Security maximization report. You know, we believe you deserve to get back what you paid in. So you give us a call at 813. A430 7100 and schedule your complimentary retirement consultation. Let us help you design a retirement roadmap that's going to take into account possible reductions in the future to make sure that you have the income you need to survive. If those cuts actually were to happen.

Producer:
Yeah. And that would not be a fun scenario, of course, for anybody. But, you know, you got to be prepared. You got to plan for these things. And as the numbers are currently showing, as as you just said there, Greg, it's not the prettiest of pictures. So you just got to be ready for that and ready for whatever comes. Because you know what? If you're prepared and it does happen, then you are prepared. You're you're great, You're set. You're good to go. If you are prepared and it doesn't happen, then chances are you will be even better off in retirement than you would have been otherwise. So either way, it's a win win for for you and that scenario, as we all get closer and closer to retirement, hopefully that is the goal of the show is to help you prepare for retirement to be able to to do that and actually call it quits one day when you want to. Well, you know, speaking of of retirement and investing and trying to plan for it, you know, Greg, there's it's not really the biggest of secrets in the world that there are a lot of people out there who I would say are not the savviest investors in the world. They might tend to be emotional investors, as it were. They kind of go with their gut. Oh, you know, I feel I like the I like this company's logo, you know, or something like that, just to go with the gut. Or they say, oh, well so and such company fell 10% today. I'm just going to sell everything of that company and just every but kind of acting on a whim like that. Not really the best plan for investing, to say the least. There are a number of strategies, though, that can help you manage your emotions, get on the right track and become a wiser investor. And we've actually got five of them here that we're going to share with the listeners. Greg. Um, emotional investing, not great, but here are those five sort of tips and strategies. Number one is to set realistic expectations.

Greg Castle:
Yeah. I mean, you got to understand that the stock market goes through ups and downs. You got to be prepared for both gains and losses. Avoiding, you know, you have to avoid, you know, setting unrealistic short term expectations that may lead to impulsive decisions based on sudden emotions. You know, again, when the stock market. Everybody's thrilled when it's going up. But as I've said time and time again, you know, if I have a quotable quote, it's probably going to be that. Uh, you know, having been both an air traffic controller and a stockbroker over the years. Uh, you know, one thing I've learned from those two is basically what goes up will come down. You hope the lending is soft, but you got to be prepared for the crash. And your retirement plan needs to be prepared for that crash.

Producer:
Yeah. Need And you know what, Greg? In that particular analogy, you need a flight attendant to come around and give you that safety briefing before you take off. And that is kind of what you do, you know, when it comes to retirement, when it comes to, you know, getting your plan in place, making sure that you're prepared, because that is why they do the safety briefing at the beginning of your flight. I know you're reading them, the in-flight magazine. You're looking at your phone, you're doing whatever. But they do it for a reason, and that is to keep you safe. And that's why Greg Castle is here, is to keep your money safe as well. So just to continue the analogy.

Greg Castle:
Yeah, there's actually there's, you know, sometimes the hardest they get to do sometimes doing a retirement plan is tell people. You're not ready for retirement, you're going to have to work longer because, you know, you just don't have the you don't have the money to carry you through. And they don't like to hear that. But, you know. As a consultant for a lot of years to CEOs over the years, it was always tough to go into him or her and say, you know, hey, look, I can tell you what you want to hear. But you need. You need for me to tell you what you need to know. You got a lot of people telling you what you want to hear, but somebody's got to tell you what you need to know. And that's that's my role as an adviser. And I'll tell you as tactfully and as sweetly as possible. But, you know, hopefully you're all set, you're ready to go, and we can find a way in most cases to be able to help you get what you need to retire. But those expectations have got to be, you know, realistic and sometimes, you know. You may have not have prepared as much as you need to. And it's our job to tell you what you need to know, not what you want to hear all the time.

Producer:
Exactly. That's the best kind of advice that you can get is it might not be the sweetest thing to your ears in a particular moment, but it's the the thing that you need to hear. Well, the number two way to help you manage your emotions get back on the right track and not emotionally invest is to establish a solid financial plan.

Greg Castle:
Yeah. And this again, this is what we've been talking about on each of these shows. You got to start by creating a well thought out financial plan that aligns with your goals and your risk tolerance. You know, I've seen so many times where people are invested, heavily invested in at risk equities, and yet when I do the analysis on their risk assessment, they come out very, very conservative. And it just it's a mismatch there. So you need to make sure that your goals are aligned with your risk tolerance. You also got to have a clear roadmap that can help you make rational decisions instead of reacting emotionally to market fluctuations. And again, as we said time and time again, the good news is we can help you with this.

Producer:
That's right. If you need help with this and chances are, you know, a lot of people do. I know a guy. His name is Greg Castle. And you can go to save money masters.com to reach out to him. Once again, save money, Masters.com. Well, obviously, we have three more of these little tips here for people to be able to manage emotions when it comes to investing. Number three is to diversify your portfolio. We've talked a lot about diversification here in recent weeks, and it's an important discussion to have because you don't want to be all in with all of your money at risk in the financial markets.

Greg Castle:
You're right. You have to spread your investments across different asset classes like stocks, annuities, alternative assets. You know, those things. Diversification can help cushion the impact of the market volatility and minimize emotional reactions to individual investment performance. And you know, again, when you go back to the, you know, your diversification. Your your diversification in your portfolio needs to align with something similar to like the rule of 100, which means basically that if you take your age, whatever your age is, that percentage of your portfolio needs to be conservative and in safe investments. So, for example, if you're 57, let's say, for example, that you're 50, you can have 40% of your portfolio in something that could go like gangbusters. The market goes up. The other 50% needs to be something conservative. If you happen to be, you know, 65, then you've got 35%. That can be in volatility, you know, prone investments. But the other 65% needs to be in something that's safe. And so we can help you with that as time goes on.

Producer:
Yeah. And that's a good thing to know as well as just, you know, your, your risk tolerance has something to do with also, you know, your, your level of diversification can change over time as well and should change over time also. Number four, stay informed and educated. Hey, you're doing that right now by listening to the show. But obviously, there's more to that than than just listening to us. But we're glad you're doing that.

Greg Castle:
Yeah. You know, knowledge is a powerful tool and avoiding emotional investing. You know, we come on the air every week till our local listeners stay informed and we try to give them the latest facts and information that we possibly can. And, you know, simply learning more about your future retirement can help build confidence and reduce the fear and uncertainty, which often leads to emotional decisions. And that's the last thing you want.

Producer:
Yeah, the fear of the uncertainty, those irrational decisions that can be made as a result, not a good thing when it comes to your financial future. And then number five here, implement automatic investing and rebalancing. You know what I love is to be able to just flip a switch, turn something on, and then don't have to take action on it. Don't have to think about it. It is automatic. It happens without me having to do a thing. That fits right in line with my level of laziness.

Greg Castle:
I'm learning more about you, man, all the time. Um, so anyway, yeah, you need to set up automated investment contributions such as regular monthly deposits, which basically reduce the need for frequent decisions. You know, also, you know, you implement a rebalancing strategy to ensure that your portfolio stays in line with your long term goals without emotional interference. And this can help maintain discipline approach to investing and keep you on track, which is really what you need to do.

Producer:
Yeah. And if you want help folks staying on track, go to the website SafeMoneyMasters.com. You can reach out to Greg there and request that free consultation that we told you about a little earlier. You can also give him a call. 813430 7100. (813) 430-7100. For Castle Financial Solutions Group Greg Castle and the team there will be glad to help you out, give you some some advice, some analysis and hopefully work with you to make your retirement the best that it could possibly be.

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

Producer:
We like helping you save. Save money. Save the pennies and the dimes and the the quarters and all of the other things so that you can save the dollars. They'll they'll add up to that. And there are some bad banking habits that you can be doing and might very well be doing on just kind of a daily basis, as a matter of course, in your life. But those things are eating away at your hard earned money. And boy, the little thing you might hear about one of these things and think, oh, well, that's not too much. That's not bad as a couple of dollars here, a couple of dollars there. But that stuff can really, really add up and, you know, doing sort of irresponsible things or things that you just kind of don't think about can cost you money. And as a matter of fact, the Consumer Financial Protection Bureau says that from 2019 to 2020, Americans spent almost $28 billion in banking fees alone, 28 billion with a B in banking fees alone. So here are some common banking practices to ditch, and you can save yourself some money in the process. Number one, think Greg is is the one that I probably hate the most. Anytime I go to get cash out, it's those darn ATM fees.

Greg Castle:
You should travel a lot. So when you travel, you know, especially using an outside network in some cases, and your fees really become exorbitant. If you have to go to the ATM, you know, taking cash out of an ATM is a weekly event for a lot of people. But if you use a bank other than your own, you know, you could end up incurring an ATM fee. You know, on average, 18ft ATM fees are about $3 per transaction. So if you withdraw once per week, you could cost you $150 or more per year. So according to Consumer Financial Protection Bureau, you know, the best way to avoid these fees is to use ATMs owned by your banks. Any other option can actually cost you money.

Producer:
Yeah, and that's true. There are certain banks, too, that will reimburse for certain ATM fees. I know my particular bank, which shall remain nameless, does that, but which is a very good thing if it's like a, you know, someone that they have, you know, a relationship with in, in a network of banks or ATM machines, that kind of thing. That can be kind of complicated, though. And you never know if, oh, does this is this part of the network or is that But the the best thing to do is just use your bank's ATMs, if at all possible. Number two, paying overdraft and non-sufficient funds fees never a good thing and really can hit you even harder in the wallet. You already don't have money in that account. And then it's just going to be, you know, compounding fees on top of fees.

Greg Castle:
You know, if you've opted into your bank's overdraft protection, you know, most people know that you're going to be able to continue to make purchases with your debit card without sufficient funds. But you got to know this. You know, even if you do have overdraft protection, your bank may not allow it to be used when writing checks or using automatic bill pay. So if you don't have overdraft protection, your bank may decline your purchase and all of these other scenarios, you can be charged a fee, either an overdraft fee or a or a NSF fee or Non-sufficient funds fee. So both overdraft and NSF fees are going to run you about $34 a day. And the best way to avoid these fees is to budget properly. Don't allow your accounts to drop below a safe threshold and make sure you got money in your account to pay the bills that you're having to pay.

Producer:
Yeah, that's very, very true. That's the most logical way, obviously, to to do that and avoid those fees. Keeping too much cash in your checking account. This is another one that could be a bad banking habit.

Greg Castle:
Yeah, I mean, it's natural to want to hold on to money in your checking account, you know? But the truth is, you're selling yourself short financially. Money in your checking account isn't accruing interest over time, or if it's accruing interest is created very, very little. Checking accounts in most cases don't pay very much at all. It's best only to keep the money that you need for monthly expenses in your checking account. You know, feel free to add a little extra if you're worried about a surprise expense causing an overdraft charge. But other than that, you know, you need to find better alternatives for for the money you got in basic checking accounts.

Producer:
Yeah, absolutely right. Not tracking your spending is the next one here on this list. And that's a way, you know, if you don't track your spending, that is one way to really find yourself in a hole, number one. But also paying too much in all of these fees and all of that as well, in addition to just, you know, running running out of money because you don't know where it's all going.

Greg Castle:
Right. The quickest way to to incur overdraft and NSF visa spending more than you can afford. The easiest way to prevent these unwanted fees is to track your spending. Have a budget. You know, gone are the days when you you need to balance your checkbook by hand. I don't think I've done that in years because I can go into my online banking and check the account every day to see what happened and see any surprise charges that are there. Um, you know, but, but now you can use a finance tracking app. Even you track your spending or your your bank app for that matter. So look out for those automatically renewing subscriptions and other services you may have forgotten about because they will add up how many times? I mean, a lot of folks have got either cable for their TV or they've cut the cord and they're using, you know, online streaming service, but they'll end up adding services. For example, you've got YouTube TV, then you'll add Netflix and you'll add Prime, then you'll add Hulu, they add Disney Plus or whatever, because you got shows you want to watch and all of a sudden you're through watching that show. But you forget to cancel the subscription. You're still paying for it. So it's not only dealing with stuff, it's actually anything. You just want to make sure that, you know, you have a good track of what you're spending money on. And I bet that you could probably find a way to cut 10% out of your spending if you went through and just took a look and see what you're actually spending stuff on. And 10% of whatever it is you're spending, the month can be a whole lot of money.

Producer:
That's right. And then that's money that you can take and put away that can earn money on top of that money. That can then be money that you get to spend in your retirement. It can be your retirement income after it goes into an account or another vehicle and grows and really can can be instead of just going to waste something that's actually going to work for you because you've worked hard enough for it. Right. So we want you to have money that works hard for for you as well. So not tracking your spending, was that one Now staying with the wrong bank is another issue here. That is a bad banking habit. Now, what do we mean by a bank That's that's the wrong bank for you, Greg.

Greg Castle:
Well, you know, everybody's got different scenarios or different qualifications for this answer guess. But, you know, basically there's no reason to stay with a bank that isn't working for you. You know, there aren't enough branches in your vicinity or you're being charged maintenance fees or things like that. Staying loyal just isn't worth your time or money. Another thing that for me is if I go to a bank and I've got a significant amount of money in that bank and I go for something and they tell me know, we you know, we can't do that for whatever reason. If you're not working with you, then there's no reason you should stay with them. And. Uh, I've had. I mean, things are fine now, but I've had times over the years where having a bank told me no, just did not make sense to me at all. So, um, but those days, those days are long gone because I keep track of my spending and I'm with the right bank at this point. Right?

Producer:
You do. You do those things that we're telling people to to do here and that's that, you know, perfect testimonial for these things that we're telling you to do, folks, is that, hey, it works. And, you know, certain we always talk about, you know, individual advice and and all of that and planning being so crucial to everybody for their, you know, when it comes to planning for retirement and all of that. And all of that is true. There are some truths that are universal. And a lot of these things that we have just mentioned are some of those universal things, like you don't want to be with a bank that's not working for you. You don't want to, you know, be paying too much in in fees. You don't want to be paying overdraft fees at all. So there you go. That's just another example of some of the things that are kind of those universal things here. Well, Greg, let's take a minute. Or few minutes and talk about life insurance. You know, this is and continues to be the month of September. Of course, as I as I look at my calendar and the month of September is Life Insurance Awareness Month. So it's important to know the different types of life insurance policies, what they are and and those that are available kind of out in the marketplace right now, which policy type is right for you? Because, you know, life insurance is one of those things. It can help support your family when you pass away and can help cover the costs of final expenses depending on what type of life insurance you choose. It can also generate income for you during retirement as well. So life insurance, Greg, at the at the basic level, let's go back here to life insurance 101 for our listeners one more time and tell them, hey, what is life insurance after all?

Greg Castle:
In life insurance is in simplest terms. Basically it's a contract between you and an insurer. You know, typically the insurer is going to be a company or a carrier and you'll be the policyholder. So this contract solidifies a promise to pay a death benefit to your designated beneficiary when you pass away and may have other contractual, you know, agreements as well. So basically, it's a contract that that pays in the extent of in the event of your death.

Producer:
Now, often here on the show we will talk about life insurance and maybe a couple of the different types, the most common ones that people are probably familiar with. I know we recently discussed here term life insurance and permanent life insurance go through those two types of life insurance and, you know, talk about kind of the main differences there, if you will.

Greg Castle:
You know, last week on last week's show, you catch it on the podcast, last week's show, we talked about, you know, term life and whole life. Term life is basically what it says. It's designed to cover for a specific term. That term could be, you know, ten years, 20 years, 30 years, depending on your age. If you're, you know, 70 years old, you're not likely to get a 20, 20 year term. They're not going to cover you that long. Um, but, you know, whole life insurance or permanent insurance comes in various different types. We'll talk about one of those today briefly. A whole life is one that's basically you're going to build some cash value, which is an asset, and you're going to have life insurance that's going to pay out your debt. The bulk of the money goes toward life insurance, but there is also an investment account there to an investment account, but a cash value accumulation account there. Uh, so it's a it's a good type of insurance term, has its place as well. You got level term, you got, uh, declining term, you got some term is basically a most term is guaranteed renewal, but some term is return of premium, which you get less insurance, but you get your money back. You know if, if the term is over before you pass away, which something you might want to look at if you need term.

Producer:
Yeah, that would be definitely something for for folks to to explore there. Another type of permanent life insurance, aside from whole life which we've talked about and as you mentioned, discussed on last week's show is universal life. Um, that's a flexible form of permanent life insurance that. Really combines the death benefit portion with the cash value component. But unlike the traditional whole life, which you mentioned there, you or your universal life allows policyholders to adjust the premium amounts and the death benefit as their needs change. It's, you know, flexible in that way. Over the years, though, a newer version of this really viable asset has become even more popular than your regular universal life, and that is indexed universal life. So give our listeners a little bit of an overview about what indexed universal life is. Greg and how it works.

Greg Castle:
Index. Universal life, which is normally called an Ial, is a type of permanent life insurance policy that offers a death benefit, has cash value accumulation, and also the potential growth linked to a performance of a stock market index.

Producer:
You know, and some advantages then of an IUL. What would the kind of the top advantages here be?

Greg Castle:
Well, first and foremost, you get a death benefit. So, you know, the IUL basically provides a death benefit to your beneficiaries upon your passing. Um, it's also got, you know, cash value. Another benefit is basically, you know, cash value growth potential because you have the opportunity for cash value accumulation over time. Cash value grows based on the performance of the specific stock market index, such as the S&P 500 or some proprietary indexes, and you get downside protection. Unlike variable life insurance indexed, universal life policies typically include a floor which basically guarantees you that you won't lose money in your cash value accumulation. I mean, gain anything if the market's down that year, the index is down. But, you know, it's a good way to go. The you got flexibility because unlike some other types of insurance with an IUL, in most cases, they have a flexible premium options. Uh, it also tax advantages similar to other permanent life insurance policies you offered. You know, tax advantages and cash value growth is tax deferred. Just just to sum up the advantages quickly. There's a book by James L. Stoddard called The Financial Pocketknife, and it's all about the IUL. It's got a cool name here. Uh, so in this book there's a challenge, and I use this all the time, but I'm going to read this challenge to you.

Greg Castle:
So this is an this is an actual excerpt from the book. I'm going to read it. It says, basically, you know, index universal life is not suitable for everyone. But let me state unequivocally, 100%, without a doubt. It's one of the most powerful financial tools ever designed to help families build a strong financial foundation. If you don't believe me, I have a challenge for you. And this is James Stoddard's challenge. He says, I double dog dare you to go into your local bank or traditional brokerage house and have this conversation. I would like you to show me a financial instrument that provides a hedge against inflation. 100% guarantees that I will not lose my money as tax free growth and distributions. The ability to take an interest free loan avoids probate, provides creditor protection, guarantees my family that my income will be replaced should I die, helps me protect myself financially against chronic critical or terminal illness and of course allows me to take money out any time for any reason at any age without a tax penalty. Oh, and by the way, I only have $200 per month to invest. You know, that pretty well sums up the advantages of an IUL.

Producer:
I love that because, you know, I mean, people if you walk into your local bank and have that conversation, ask that question or make that demand, they'll probably look at you like you have three heads.

Greg Castle:
Well, actually, you know, chances are they don't even talk to you because brokerage firms, for example, some brokerage firms won't talk to you unless you're $250,000 to invest. The Fisher Investments, for example, most of their solicitations say if you have $500,000, then they're going to whatever, over here. So they're looking for a minimum of $500,000 in most cases before you do anything. But yeah, I mean, this has got a lot of potential and probably those are some advantages we probably ought to talk about some disadvantages just real briefly. You know, they got a complex policy structure. They're a little bit harder to understand. Uh, you got potentially lower returns. Not always, But, you know, if you had a stock market that was going gangbusters, you might have a ceiling on some of your returns you're going to get from the IUL. It could be capped a little bit, but in most cases, it'll do very, very well. Cost considerations, you know, tends to have higher premiums compared to term life insurance. They do have some fees and you've got potential for policy lapses if you don't have enough cash value to cover the cost of insurance and you don't pay the premium. And then finally, you know, just limited control over investments. Well, even though the policy basically an EU policy basically offers the potential for growth based on stock market performance. No policyholders typically have limited control over those investments.

Producer:
So it's this week in history. Some big things happened this week in history. Monday, the 18th, of course. Yesterday on this date in 1947, President Truman officially created the CIA, the Central Intelligence Agency, of course, based in Langley, Virginia. It's, you know, tasked with gathering, processing, analyzing national security information all over the world. It prepares the president's daily brief. They do a lot. And we are thankful for all of the dedicated men and women who staff the CIA as well. Greg, also something a couple of things actually happened today on the 19th of September. Tell us about those.

Greg Castle:
Yeah, first of all, from an entertainment standpoint in 1994. The medical drama E.R. debuted on NBC and became one of the highest rated programs on television. As a matter of fact, it's still going on. Lots of careers of several actors, most notably George Clooney and Julianna margulies. Margulies. Um, remember when that show actually debuted and it was, uh, you know, I watched it for several years, then I was traveling a lot and sort of lost track of it. I haven't gone back to the circle back and watch it, but a year later in 1995 and I remember this too, I can't believe it's that long ago. The Unabomber's manifesto. 35,000 word anti-technology document written by Ted Kaczynski, who had launched a bombing campaign that killed three and wounded 23, was published in both The New York Times and The Washington Post. Then we got some birthdays today as well. Trisha Yearwood, country singer, wife of Garth Brooks. She turns 58 today, and one of her best songs was, you know, she's in love with the boy. She's in love with the boy.

Producer:
I'm gonna say I'm singing it in my head right now. Yeah.

Greg Castle:
And then Jimmy Fallon, who was the late night host of late night TV and former SNL alum on Saturday Night Live alum turns 48 today. Then a couple of departed, you know, folks that we will all remember, Mama Cass Elliot from the Mamas and Papas. They're one of their big songs was California Dream. And she she would have turned 82 today. And then Adam West. Who would is TV actor best known. He acted in several things, but he's best known for Batman, which seems like it ran forever, but it only ran from 1966 to 1968. And then today is national. A number of national things we'll choose for. You know, first of all, it's national talk, like a Pirate Day radio. Um, it's National Professionals Day. It's National Butterscotch Pudding Day and it's also National Woman Road Warrior Day. So hope all the professionals out there have a wonderful day. I think that I'm going to find some butterscotch pudding somewhere and have all of that. And with all that said, going back to Adam's West birthday today, I think we should probably say that we will see you next week on the same bat time, same bat channel. Goodbye, everybody. Have a wonderful week. We'll talk to you next 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.

Producer:
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. America Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness or the results obtained from the use of this information.

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