How to Map Out Your Road to Retirement

10.13.23: Audio automatically transcribed by Sonix

10.13.23: 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 again 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. Now, we hope you're having a terrific Tuesday. And one way to make it even more terrific is to do what we did last week, and that is to offer our listeners something for free. So I'm Greg Castle. I'll be your host, along with my co-host and executive producer Matt McClure. And, Matt, last week our program was all about estate planning. Or actually two weeks ago, it was about estate planning. And, you know, as you learn from that week's discussion, there are a number of documents that go into an estate plan. Two of those documents are powers of attorneys. One is a medical power of attorney. The other is a durable power of attorney. Medical power of attorney, of course, would give someone the authority to make decisions on your health care. The durable power of attorney is more broad, and it covers the authority for someone to make a number of decisions on your behalf. But anyway, if you would like us to prepare those two documents for you absolutely free, then shoot me an email at Greg@SafeMoneyMasters.com. There is no catch and there is no cost. Well, Matt, here we are once again with another terrific Tuesday lineup. So why don't you tell our listeners what they can expect to hear on today's show?

Producer:
I will absolutely do that, Greg. I'm sorry, folks, that I don't have anything free to give you, but, you know, I could maybe, I don't know, mail you. What have I got in my pocket? A couple of mints or something. Advice? There you go. That's right, that's right. Well, and but that's great. That's a great thing that everyone should take advantage of if they're looking at doing an estate plan. And hey, if you're not looking at doing an estate plan, maybe you should be looking at doing an estate plan no matter how much money you have. Don't think that you're too, too poor to do it because you know, it's it's all about prepping for the future. And that's really what the show is about, is planning. You know, I've sort of, you know, had in my mind when we've been going through all the content for this week's show, that old saying, you know, if you fail to plan, you plan to fail, right? So that is what we're going to talk about today. We've got some financial words of wisdom in our quote of the week to get us started off here momentarily. We'll take a look at what people are worried about these days as far as the economy goes. As a new survey shows here, in just a few minutes, we'll also do a problem solver segment and give you some real life examples of how people just like you, our listeners, built retirement wealth.

Producer:
Also, it is upon us now the Medicare annual enrollment period. We'll have some great tips there on exactly what the different parts of Medicare are and why you should check in on your Medicare coverage. We'll take some questions from our listeners as well. And we'll tackle this week in history or this day in history. Guess when we get toward the end of the show. But here's the thing, folks. If you have been listening for a while now because you're interested in improving your particular financial situation, and I say it like this all the time, the ability to retire someday, that is the goal. Let Castle Financial Solutions help you with some one on one attention. All you have to do is give them a call at 813430 7108 13430 7100 or visit the website for the show SafeMoneyMasters.com. They would be happy to meet with you in person and provide customized guidance and solutions based on your specific financial needs. And Greg, you know, we said in person you could also do it virtually. We're not scared of the technology here. As a matter of fact, I'm in Atlanta, Greg is down in Florida. And so we are doing things virtually here. So the technology, we're keeping up with it, it doesn't scare us. Not one bit.

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

Greg Castle:
This week's quote comes from the founder of the Vanguard Group, Jack Bogle, who once said, quote, the idea that a bell rings to signal when to get into or out of the stock market is simply not credible. After nearly 50 years in this business, I don't know anybody who has done it successfully and consistently. Hell, I don't even know anybody who's done. I don't even know anybody who knows anybody who has. Unquote.

Producer:
I love that. And you know what? If Jack Bogle doesn't know anybody or know anybody who knows anybody, then that's saying something. Because, you know, when it comes to success in the financial world, he's one of the the big names out there. And for good reason, as you said, founder of the Vanguard Group. But yeah, I mean, if you are thinking that there's just going to be some bright light bulb that goes off over your head or, you know, a bell is going to ring or somebody's going to jump up and down and say, this is the exact right moment to get into or out of the market. And they actually are right. Then then you probably got another thing coming. Actually, I do know you got another thing coming because it's a difficult thing to do. Time the market you don't want to try.

Greg Castle:
Yeah. For those of you that are not familiar with the Vanguard group by name, if you have a 401. 403 B or whatever, there's a strong possibility that the mutual funds you have within that group are either Vanguard or Fidelity. Vanguard and fidelity are the two of the largest groups that actually manage mutual funds for 403 B's, 401 S programs, those type of things. So it is a very, very large group. Jack Bogle is a very, very smart man. And let me assure you that if he and his folks cannot time the market, then you try to do that is all but impossible. It'd be kind of like winning the lottery one out of 292 million times. You might get lucky, but that is a I think that's the odds for the Powerball that was recently won for $1.7 billion. So it's not likely that you're actually going to be able to time the market. So. If you you know, it's hard to remember back to 2008, but if you ever go back and watch a 60 minutes YouTube video about the 2008 market crash, it just brings back to mind what's possible or even probable in the upcoming future. And if if you went through that and lived through it and had a significant loss from it and you're approaching retirement, you know how painful that was.

Greg Castle:
And so here it's safe money Masters. Our goal basically is to help you understand that that what the whole premise of the show is about. You know, first of all, the whole premise of the show is to bring you topics and tools and information that's going to help you protect and grow your wealth and retirement income. So, you know, we hope you keep tuning in. You can catch us every Tuesday evening at 6 p.m. on Moneytalk 1010, which is now think a podcast, Tampa, 1010 and on your local FM stations 92.1 and 103.1 up north. And if you happen to miss an episode, you know, we certainly hope that you'll catch the replay at SafeMoneyMasters.com you can basically just click on basically go to the website, click on the podcast tab and listen to the podcast on any particular podcast channel you want. They're all options for you. Amazon, Spotify, all different things there. Also, if you have any questions or comments, we'd love to hear from you. Feel free to email me personally at Greg and SafeMoneyMasters.com. Or give me a call at (813) 430-7100. Again, that's 813430 7100.

Producer:
And Greg, when people do that, when they give you a call at that number or go to the website or send you an email to get in touch. One of the great things, you know, we mentioned the estate planning documents at the beginning of the show that are available. Of course, those are some things that you can reach out for folks. And Greg will be happy to to provide those at no cost to you. Another thing that is of great value, but of no cost out of your pocket as a listener to the show, is a full retirement plan consultation. Greg, talk about that if you will, as we kind of get into revving things up here and get into our discussion momentarily about a lot of the worries that people have about the markets these days. You know, how can you, you know, take a look at their particular situation and maybe help alleviate some of those fears.

Greg Castle:
Well, as we say all the time, there is no one size fits all retirement, regardless of what some of the gurus will tell you. So you know, we are we are an entity that basically we help you custom tailor the retirement to suit not only your needs, but also try and accommodate your wants as well. And to do that, you know, we provide comprehensive consultations at no cost to our listeners, and there's never an obligation. You only work with us if it's a mutual fit. As we said time and time again, you do not have to be wealthy to work with us. You know, if you have a desire to to just check out and see what retirement is going to look like for you or what you can do to improve your retirement, regardless of how much money or that you do or don't have, you know, we'll be happy to work with you. The only requirement that we have is that you must be nice. We don't want to deal with angry. You know, it all kind of people. So, you know, we'll help you analyze your financial situation. We'll closely examine any assets you may currently have. You know, we'll also discover exactly how what you're paying your fees. If you happen to have a 401 K, 403 B or anything like that, and we'll help you uncut or basically cut out unnecessary cost in your IRA or other sponsored plans and any other retirement savings accounts.

Greg Castle:
You may happen to have. One of the big things we can help you do is simple as it sounds. When we're talking about Social Security, it seems so simple. You get 62 and somewhere between 62 and 67, you know, you pull the plug and you decide you're going to start taking income. That sounds so simple. You can do it. It's not a complex process to do, but. You know, if you don't plan correctly and you apply at the wrong time, it can literally cost you tens to hundreds of thousands of dollars over your lifetime. So we definitely help you out with Social Security planning. We'll also help you explore strategies to help you maximize retirement income and minimize your taxes. And taxes are something that's really on people's minds lately. And as we always say, remember, it's your money. If it matters to you, you know it matters to us because we want to help you. Be sure and be able to keep it and help it grow. So you know what? What is is like to work with us. You know, some people are nervous and intimidated by meeting a financial advisor or a professional. We don't want to come across a salesy. Basically, we take a look at your situation. We make recommendations. What you do is up to you. We do not make recommendations that are not in your best interest.

Greg Castle:
So we want to help ease the concerns that you have. And in our initial consultations, we simply help you answer certain questions. You know, one of those questions is what does a successful retirement look like to you? But everybody's picture is different. You know, some want to just enjoy being at home with a family and the pets and, you know, the grandkids and no big deal. Some want exotic travel. Some want to buy a boat. Some want to buy an RV. You know, whatever it happens to be, you know, we want to we want to know what that picture looks like for you. And are you looking? What are you looking to accomplish? Do you have any specific goals? In other words, do you have a certain dollar figure in mind you're trying to get to before you actually pull the trigger and and say, I am retired now, and we can do our best to try and help you get there. Another question would be, you know, how do you plan to fund your retirement? Or do you do you have outside assets that you're going to roll over into something to retire them, or are you going to pull from your, you know, your. Previous work programs such as the 401 four, three B or those type things. So that's difference between qualified money and non qualified money.

Greg Castle:
It depends on how you're basically going to be taxed on it. Another question is going to be you know. Yeah, I like this question a lot. I ask it a lot. And you see the the gloom of people's face when they ask this question. That is, how would a market crash of 25 to 30% affect your plans for retirement? Because no matter what you have now, you know, if you think, okay, all that money is going to be there when you retire, when you start whittling things down, number one, you take a look. Expenses. Number two, you take a look at taxes. Number three, you take a look at how inflation may put a put a damper on what you've got already. And if you bundle all of that with a market crash where 25 to 30% of what you have total, it can devastate your plans for retirement. In some cases, it may prevent you from ever being able to retire. So, you know, we can help eliminate some of those market volatility concerns that you happen to have. And then finally, this is also one of this very, very important because you can't retire on a big pile of assets. It's nice to have, but basically you retire on income. So how do you plan to create income each month? How much guaranteed income do you have coming in is not necessarily what you're pulling from your 401, K, four three or TSP, because that's not guaranteed income.

Greg Castle:
Again, market crashes can devastate devastate some of that. Guaranteed income is going to come from one of a couple of sources. Number one, a pension plan for work if you're fortunate enough to have one. And not many people are these days. Number two would be Social Security. And even that today is not totally guaranteed because starting in 2033, unless our government officials take some action, there's a strong possibility that everyone's plan, whether you're on Social Security now or not, can be cut by anywhere between 25 and 33%. So how are you going to deal with that reduction? But still. And the third thing would be annuities. Basically annuities are are another source of guaranteed lifetime income. And you can convert some of your assets into annuities. We talk about annuities a lot because it is one of the best possible, you know, things that you can do to ensure that you take some of the big risks you're going to have in retirement off the table, such as market volatility risk, such as longevity risk. In other words, you're outliving your money. And this can assure that you can't do that. And then a number of other risks to that longevity risk all bundled into it. But income is important. How much guaranteed income do you have coming in?

Producer:
Yeah, I mean, so many people focus too much on that one big nest egg number that they may have had in their mind as a goal. And if you reach that goal, you know, it's great to have goals and all of that. But how are you turning that into income? Super, super important question. And if you have one of those work based accounts, you know, like a 401 K, 403 B, Sep tsp all of these other acronyms that we know and love, then, you know, we encourage you to reach out to Greg and his team. You can schedule a no obligation, absolutely complimentary consultation, and they would be happy to meet with you in person. You can grab the phone and do it that way. Do a virtual video call as well. All of those are options and they really understand your money's important to you. So as we said earlier, as Greg said earlier, that's means that it's important to them as well. So give them a call 813430 7100. Or you can send Greg an email Greg at SafeMoneyMasters.com. Well, you know, Greg, you went into detail there about how you really are able to help people alleviate some of their fears about their retirement, about their future, about what's going to happen in the markets. And a lot of people do have concerns in this country these days. According to 2023 Financial Advisor survey conducted by the Insured Retirement Institute, or IRI, Americans financial concerns have really gone up in recent years, especially in a few different categories, right.

Greg Castle:
When it comes to different worries that people have right now. According to the report, 79% are worried about inflation. I mean, last year, inflation was over 9%. This year it's actually whittled back down to a little above three. There's a possibility that, you know, things could continue to increase and inflation could go back up again in a heartbeat. 70% are worried about a recession. And fairly so. I mean, every week a report comes back. One week we'll say that, you know, hey, look, recession looks likely. The next one will say we might be able to avoid the recession. Report came out last week that said that the the feds are actually looking to the probability of a possibility of not probability of raising interest rates again this year, which would really upset the apple cart. And a lot of folks are fear that another increase might actually, you know, tip the apple cart and put us into a recession. 65% are worried about losing a lot of money in the stock market. You know what? The best way to keep you from losing money in a stock market would be? Not to be in the stock market.

Producer:
Was going to say, that's a guarantee right there.

Greg Castle:
Yeah. Um. There's a lot of fuzzy math in Wall Street. You're talking to a former stockbroker here. So the way that the way that returns are reported and other things may think that, you know, the markets are doing outstanding. But if you take a look at this year, for example, at the beginning of the year, January 1st, the Dow Jones was 36,000 and change. And even though the markets tend to be up a little or seem to be up a little, and for a couple of months, the market now is running around 33,000 a change. So you have about a 3000 point drop over the course of this year. And. So it's a little bit different. The another worry that they have or concerned about is, you know, 50, 57% are worried about their ability to maintain their lifestyle in retirement.

Producer:
And that's a huge one.

Greg Castle:
That's a huge one. But you know, a lot of folks have not. Been able to or just haven't put money aside for retirement. They don't have any guaranteed income coming in besides Social Security. They don't have a pension. They have very limited money in their in their 401. Four three vs Tsp's or whatever. And so we. Leave the the workforce and you go into retirement, your lifestyle, you're going to get a pay cut. I mean, basically the day you retire, for all practical purposes, you are unemployed. The only trouble is you don't get an unemployment check. So. And typically whenever we have days off, like for example, Saturday, Sunday, weekends, holidays when you're retired, every day is like Saturday, Sunday and a holiday. Matter of fact, when you retired, sometimes you forget which day it actually is because there's nothing to keep you on track to make it happen. And typically you're likely to go out and you get bored. You spend money you think you shouldn't ought to do. And unfortunately for a lot of folks, it's going to be spending money that you don't have or basically money that you shouldn't spend because you haven't transitioned your spending habits yet in some cases. So that can definitely affect your lifestyle in retirement. But we'd be more than happy to help you work out a plan that would show you what you can spend and help you hopefully be able to help you, you know, get to a type of retirement that you'll have a clear picture in your mind of what you're going to be able to do and how much money you can spend, and just give you a comfort level, hopefully, that you will be able to, you know, sit back and enjoy your retirement on your terms instead of sit there worrying about, you know, where you know where the next meal is going to come from. We don't want you to sit around having to eat cat food the rest of your life.

Producer:
Yeah, not a good plan to, you know, the cat food diet. You might you might lose some weight on that one. But it's not a great thing to to be stuck with. But actually a separate survey from this same group, IRI, found that Pre-retirees are most interested in a couple of things here downside protection and guaranteed retirement income. So in other words, you know, look at that and say, oh, people want to get to the guarantees when it comes to planning for their golden years when it comes to living their golden years. So when we talk about, you know, getting to those guarantees, there are some different products in ways that you can go about that. And it's funny to even say, and, you know, as a former stockbroker as well, you know, people in the financial world guarantee is kind of like a four letter word. You know, it's like, oh, don't say that. But, you know, when when we say guarantees, they're these things are backed up by the claims paying ability of the of the issuer of the carrier here. And we'll talk about more about that here in just a moment. But you can use one of these vehicles to actually do better than the 4% rule. Now when I when I say that some people might be scratching their heads and saying, okay, well, what is the 4% rule? It seems like I might have heard about that before. And some people, I'm sure, know what it is. But even for those people, refresh our memories here as to what the 4% rule is. Greg.

Greg Castle:
I'll be glad to. You know, the 4% rule is a popular rule of thumb for retirees to follow when it comes to managing their money. It suggests, I emphasize the word suggest that retirees should be able to withdraw 4% of their retirement savings each year in order to maintain their nest egg, and this rule has been around for over two decades, still widely used in many retirees today, you know, but you may be able to do better for yourself, you know, by following a different strategy. You know, first of all, the 4% rule, you know, if you start out with the huge number in your savings, retirement savings, and you're pulling out 4% the next year, if the market does bad, you're pulling out 4% of a lesser number. So it's not a stable income. You know, basically as your income as the your nest egg begins to dwindle, that 4% is a lower amount than it was when you first got started. So inflation goes up. The amount of money you're pulling out goes down. It's not really a sustainable rule in my mind anyway. So there's a different strategy you might be able to utilize. And that is and we've talked it time and time again. Now consider investing in a fixed indexed annuity and defer taking income for 2 to 4 years. Uh, you know, that gives you the opportunity to to let the linked index grow. Meaning basically a larger account value and more income during retirement. Then once it matures a little, take consistent withdrawals by annual penalty free withdrawals and annuities in your fixed indexed annuity. In other words, most annuities have the option to to take out at least take out up to 5% or 10% of your account value per year after the first year.

Greg Castle:
So you can pull that money out or pull out a portion of it and let the money continue to grow. 4% rule pull out 4% is still going to grow. You haven't you haven't met that 5% or 10 or 10% max yet. So there's no surrender charge. And you know, at some point down the road when you actually need the money, you can say, okay, this is how much I have left right now. How much can I get in an income for the rest of my life? And the the carrier then will look at their calculations and they will give you a number. And basically that income is going to be yours for as long as you live. And some annuities actually have inflation riders to where you can actually keep pace with inflation as you begin to pull money out. So it's a it's a great opportunity. There's a lot of bells and whistles in annuities. And those bells and whistles for the most part are very, very positive. You really need to take a look at one and we'll be happy to show them. You know, again we are contracted with the majority of carriers that are out there. We only use carriers that typically been around for close to 100 years. They're at least B plus rated or better, which means they're very, very stable. And you know, you'd be surprised at some of the some of the market like returns that you will get in some cases exceed the market returns. And at the same time having zero volatility risk, which means basically you cannot lose a penny of your principal or credited interest. And interest is normally credited once a year.

Producer:
And if you want to explore that, folks get started on that journey, or at least just talk about it. Explore the possibility. Go to save money masters.com that is safe money. Masters.com.

Producer:
It's time for this week's Problem Solver.

Producer:
Well, now time for guess. Time to get real time. Time for some real life examples of how we've been able to help hardworking people like you have a better retirement. So it's an extra large edition of our Problem Solver segment this week because we have three different examples here. And so I'll give the problem. And Greg will talk about the solution that worked for these particular individuals or couples. And is this a test. This is not a test of the of the emergency alert System.

Greg Castle:
This this is a test of my knowledge.

Producer:
This this is only a this this is only a test.

Greg Castle:
I feel like I'm I feel like I'm up for it.

Producer:
Let's go. Right. Okay. Good good, good. You're probably going to do better than me when we play. Right or wrong. You know, I feel like. I feel like I sometimes it's very hit or miss for me, but. All right. So problem number one this one is a couple their names Jim and Susan. Names have been changed to protect the innocent. They have been married for 40 years. They're filing their taxes jointly. They have for a long time as a couple. They have monthly expenses of around $7,000. It's about 84,000 a year. If you multiply that by 12, his income from Social Security, 34,000 a year, hers is 18,000. So combined, that's 52,000 each, or 52,000 each year, I should say from Social Security. They have $1 million in an IRA. So they've been contributing to that IRA on a regular basis. Got a good amount in there. And according to the 4% rule, they are drawing 40,000 a year out of that. So their expenses once again, 84,000 a year. Right. So the total income with Social Security and drawing down that IRA 92,000 a year. And so that sounds like it's more than enough to meet that 84,000 in annual expenses. I mean, after all, 92,000 is greater than 84,000. But wait, there's more. They have not paid taxes on that money yet. And after they pay the piper, they're stuck with the what we call a retirement income gap. So what in the world is the solution for them, Greg.

Greg Castle:
Yeah. You got to bear in mind that when you when you take a look at your total income, most people see that big number and not thinking about the taxes they got to pay out of it. So if you were to take, you know, $92,000 and you're looking at paying roughly $20,000 in taxes, you're looking at to down to 72,000, which gives them, you know, more than a $10,000 deficit. So, you know, after meeting with us, you know, Jim and Susan are taking 40% of their assets and invested in a fixed indexed annuity. You know, they're getting 10% bonus credited to their account because some annuities actually offer an upfront bonus, either a benefit based bonus or a premium bonus. That basically is, you know, your interest is credited on us for now. They'll live on the $100,000 that they have in their checking and savings account, plus a Social Security income. They're going to defer their fire for at least two years, letting their annuity grow. And when they turn on income in year 3 or 4. Jim and Susan will end up with a significant pay raise. And actually, after taxes have an income surplus.

Producer:
And that is the goal is to have more money than month and not more month than money. That's usually the the best way to go about it.

Greg Castle:
It just goes back to say that, you know, if you have the right plan, you can take a problem like problem number one and actually take what looks like it's going to come out to be a detrimental situation and turn it into a positive. But without a plan, without knowing your options, you can really end up in the hole somewhere in retirement.

Producer:
That's right. And without, you know, some help along the way as well. Because without contacting you and the folks there at Castle Financial Solutions Group, they would not have known about that particular solution. Chances are, and would still be kind of in a not great place as far as their retirement income goes. All right. So great solution there. So problem number two here Judy is a widow. Her husband Jerry, sadly passed away last year and she began receiving his Social Security income, which was a healthy amount, 41,000 a year. So that's that's not not too shabby there, especially as far as Social Security is concerned. The thing is, though, she lost her own income, that Social Security check that she had been receiving each month. Judy does own her home, so that's good, but she has 5000 a month in expenses still, and that's about $1,500 more than Social Security pays her each month. So what's she looking at as far as a solution goes, Greg?

Greg Castle:
Yeah. You know, one thing the scenario does talk about is, you know, how she comes up with enough money to do what we actually helped her do. Um, it talks about our income. But actually, when Jerry passed away, he had a significant life insurance policy. So with that policy, she basically decided on a $600,000 fixed indexed annuity. With the product that she bought, she gets a 10% bonus. And so that's an extra $60,000 before taxes. She also has another $500,000 in an IRA that she doesn't touch. And she was sitting on $15,000 sitting in her checking account and savings account. So now she has an income surplus. At the end of each year she buys a multi year guaranteed annuity, basically a Miga or a fixed indexed annuity, an FIA to increase her income and live the retirement that she dreamed of. Unfortunately without Jerry. But you know, is a perfect example of someone who pays herself first. You know she had and by the way, the Social Security situation and the problem once once a spouse passes, the surviving spouse has the option of the higher of the two social security amounts. The Social Security Administration is usually pretty good about helping you decide which one is going to be best for you, and it's usually pretty obvious. But in this case, Jerry had the higher Social Security amount. So she gets his she does not she does not get to collect both. You can't collect both of them. You only can collect the higher of the two. So but we we're able to help her out. And she's pretty well set for life at this point.

Producer:
Yeah. Thankfully it looks like she's in a good spot thanks to that plan. Again, it's all about having a plan and, you know, getting the help along the way with that plan. All right. So glad things are sorted out there for Miss Judy. Now we move on to problem three. And Dorothy, who is not a widow, but she is a divorcee and she's in her late 60s her situation is she she does own her home, so that's good, but still has to pay nearly 5000 bucks in property taxes. Her monthly expenses right around 3000. Social security pays her about 3100 a month. But that right there is just cutting it way too close. If you're getting 3100 a month and your expenses are 3000, that's not much of a not much of a surplus there that you have to work with. So what's Dorothy looking at as a solution?

Greg Castle:
Yeah. The good news for Dorothy was that she has been a good saver. You know, she currently has about $800,000 saved up. She does some consulting work part time in retirement, which brings in some extra cash. But, you know, she's not touching her savings until she turns 70. At that time, you know, she plans to take $300,000 and invest it in a fixed indexed annuity that's going to enable her to generate more income. You know, until then, she's living off the money in her $100,000 investment account. You know, Dorothy is a great example of of keeping expenses in check and having a retirement income plan in place for the future. So she's doing fine.

Producer:
Yeah, thankfully. Thankfully so. And that you know, saving has really done her a big, big favor there as far as her income plan goes, thanks to the help that you have been able to provide. And you know, folks, we share these stories because maybe you can see yourself in one of these situations, but whether or not you can actually see yourself in those scenarios, relate to them in any way what you do need. And the point that we want to get across to you here is you do need a plan that is tailored to your specific needs. So call Greg and his team to get started on the journey towards the retirement you have always dreamed of. You can do that at 813430 7181 3430 7100. Is that number? All right. So Greg, it is that time of year again, the time that many Medicare agents spends the rest of the year preparing for. Know that for sure. As many Medicare folks as I know these days, it is the annual enrollment period for that particular program running through December 7th now. So let's take a look at Medicare and, you know, health care, of course, one of the biggest expenses that people are going to have in their retirement. So let's take a chance, while we have this moment available to us to make sense of the different parts and options available. First off, you know, Medicare is a big program. We know that. But how many people are currently enrolled? Do we know?

Greg Castle:
Yeah, we know. Before I say that though, a little trivia question for you. You mentioned that. Uh. The anyone that sells Medicare or works with Medicare, you know, looks forward to this time of year. They're preparing for it. There's another entity that's also prepares for it every year, and that's the US Postal Service. The reason for that is if you've turned 65 at any point or if you turning 65 this year, there are lists that are sold time and time again to people who turn 65. And every Medicare agent out there will end up, you know, buying that list and sending you tons of stuff so you will be up to your neck, if not higher. And until you are in in messages, letters, postcards about Medicare and your options that are going to be there. And the trivia part there is that do you realize? That there are more. Pieces of mail sent related to annual enrollment period for Medicare. Then there are Christmas cards each year.

Producer:
Oh, wow. I never would have thought that.

Greg Castle:
Yeah. If you haven't, you haven't 65 yet when you get there. Trust me. Then for every year after you get constant mailings letting you know anyway. So then go back to the question here. How many Americans are currently enrolled in Medicare? There's actually more than 61 million Americans that are covered by Medicare health plans right now. Um, that's basically 18.5% of the US population is on Medicare. Almost four out of ten Medicare consumers are also enrolled in Medicare Advantage plans. That's basically Medicare Advantage is sort of a wrap around program for basic Medicare, provides a few more bells and whistles at very low cost. There are some limitations with that, and we'll talk about those as time goes on here.

Greg Castle:
But, you know, for 2022, Medicare beneficiaries had access to 39 Medicare Advantage plans and 89% of Medicare Advantage plans offered in 2022 include prescription drug coverage, which is not covered by basic Medicare Part A and part B.

Producer:
Yeah, and that's always a big question is, okay, what do I have coverage for. So let's go through the different parts then of Medicare and explain what those are. And maybe clear up some of that confusion over what I generally refer to as the alphabet soup of of Medicare, Medicare Part A, and this information comes from Medicare.gov that we're going to share with you here. By the way, folks, Medicare Part A, so so talk about what that includes, Greg.

Greg Castle:
Yeah. Better Medicare Part A is basically known as hospital insurance. That is that basically you don't pay for what you at age 65 because that's what all those payroll deductions out of your check have been paying for all those years. So that portion comes out as free. So it it covers inpatient hospital stays, skilled nursing facility care, hospice care and some home health care. But but those coverages are very very limited. A hospital stays, it will cover. But when it comes to the skilled nursing facility, hospice care and and some at home care, there's limitations and caps on what the electric cover for that.

Producer:
Yeah, definitely are those limitations and that's something to be aware of. So then okay that's part A that's the hospital insurance. So part B is what part.

Greg Castle:
B is known as medical insurance. This is the part you have to pay for. Basically when we talk about Medicare normally you're talking about part A and part B as being basic Medicare. Part B is is known as medical insurance. It covers certain doctor services, outpatient care, medical supplies and preventive services. Some people automatically get part B, but others have to enroll. You could be subject to a late enrollment fee if you don't sign up for part B when you first become eligible. And eligibility we probably should talk about. You need to sign up for Medicare. You have a seven month window, the month you're born, in the three months prior to that month and the three months after. If you wait beyond that period and you do not have credible coverage, incredible health insurance coverage, in other words, on the job coverage, then you're going to be penalized. Your premiums will increase 10% for every year you've delayed. So signing up is very, very important.

Producer:
Yeah it is. When you do it is very important there. And that's why, you know, it helps to have an outside source and a kind of a helping hand through the process. So then let's go with Medicare Part D. That's one that of course has been around I guess maybe it's it's obviously it's one of the newer parts of Medicare. They passed it. Don't know. What was it the 2000 mid 2000 I think they passed the Medicare Part D. So people if you remember back that far, which some some days I do and some days I don't, you might remember them you know negotiating about it and all all of that stuff. It happened during the the George W Bush years. I do remember that. I remember that much.

Greg Castle:
A Medicare Part D is also known as prescription coverage. Drug coverage. The plan covers a wide variety of prescription drugs. There are some drugs that they do not cover. So just something to be aware of. But yeah, it's basically if you wanted to sort of a complete package, you know, part A, part B and part D are going to give you those components. There is an additional cost. There is an additional cost for part D with the prescription coverage. I'm not sure exactly what that cost happens to be, but it is going to cost you more than the one 6470.

Producer:
Yeah. And, you know, I mean, that would seem to cover a lot of of things. Obviously, you know, it's sort of the quote unquote full Medicare, right, with the hospital insurance, doctor's visits and drug coverage all covered by, you know, A, B, and D, but there are some gaps there. And therein lies the need for things like Medicare supplement meds, Sup or Medigap insurance and Medicare Advantage. Explain what those are and kind of the differences between them.

Greg Castle:
Medigap. These type of insurance programs are designed to fill coverage gaps in part A and part B plans. You can't have both. About 80 about 81% of beneficiaries who have parts A and B supplement their coverage with Medigap, Medicaid or employer sponsored plan. So basically, the portions that Medicare Part A and part B. Uh, don't cover. In other words, the deductibles. Medigap plans usually help to fill in those gaps and cover those things. To help, you have to pay help prevent you from having to pay out of pocket. There you go.

Producer:
Well, and so when we're talking about then, you know, sort of mentioned them both together, let's separate them out here. So let's talk about Medicare plus Medigap or the Medicare supplement plans. Talk about what that would mean if someone signed up or enrolled in a plans like that.

Greg Castle:
There are some advantages and also disadvantages. One of the disadvantages is that the combined coverage tends to be more expensive than other plans. Some of the pluses are that it covers any hospital or doctor that accepts Medicare. There are some doctors that do not accept Medicare. One of the other pluses is that there's no need for prior authorization or referral from your primary doctor, which is a big one. And also, you know, it's this is a good program for people that that have specific doctors or hospitals they want to use. They're not limited in other words. Yeah.

Producer:
And then so that's the Medicare supplement plan. What about Medicare Advantage. And I know that this is the one I think a lot of people probably recognize seeing commercials, a lot of commercials this time of year on on TV about Medicare Advantage. Talk about that and exactly what what it means.

Greg Castle:
Medicare Advantage is kind of a wrap around. For example, it's actually known as part C, you know, for example, part A is the hospitalization coverage. Part B is the medical coverage. The part D is prescription, part C is that right in the middle over there. It sort of wraps around all those places. You know, Medicare Advantage plans cover hospitals and doctors and often include prescription drug coverage and and other coverage is not included specifically in parts A and part B, Medicare Advantage operates as a basically an HMO health maintenance organization and limit people who are covered by this plan to doctors and hospitals that are in their network. So sometimes you'll find out that your doctor that you really want to go to is not in this network. In which case, if you're really, really going to be picky about that, then Medicare Advantage plan would not be for you. But in a lot of cases, in in many cases, actually most doctors that accept Medicare will be, you know, involved in this plan. It just depends on the different carrier, because the HMOs for each carrier may be different. So your doctor may be in one plan but not be in the other plan. So just bear in mind which networks you're going to be in. And if your doctor is going to be there or not. So smart retirees do a lot of things. You know, some people are going to buy an annuity that's going to cover the cost of a medigap plan, plus any co-pays or deductibles. You know, we can help you with that today. If you really want to cover those costs, not have to worry about it. You know, insuring that your health care needs are be met can give you peace of mind. That's very, very important. Take money from an old 401 K, put it into an annuity. Use the annuity income to cover medical costs once you turn 65 years old.

Producer:
Pierce the cost cutter of the week.

Greg Castle:
If you don't move your Medicare plan every 2 to 3 years, you could be losing money. The reason for that is that because sometimes plans change their pricing, there might be another plan with the same coverage that, you know, is is basically got a lower premium cost in your area. So by basically reevaluating new options each year, you're likely to find that you can save money on your Medicare expenses. And so people do a Medicare coverage check every year just in case they have the opportunity to save some extra cash. So that's something that's important for most people.

Producer:
Here's the thing, folks. If you have questions about your Medicare options when planning for your retirement because as I say, health care one of the biggest expenses of your entire life, but especially in retirement, let Greg and his team at Castle Financial Solutions Group help you navigate the often really overwhelming and confusing options that we've talked about here. Give them a call 813430 7100. That's 813430 7100. You can send an email as well to Greg directly at Greg@SafeMoneyMasters.com. And don't forget as well, you know, you can do those same contact methods. Use those to get those medical and durable powers of attorney absolutely free just for being a listener of the show. Mentioned that at the top as well. And that is a great, great thing to take advantage of, especially when it comes to estate planning and things like that. And Greg, I know that you also, before we get to this Week in history here in just a sec, that you wanted to mention something for veterans that was that you've kind of run across here that was very important and I think is going to mean the world to to some people here. Yeah.

Greg Castle:
Matt. I recently became aware of a program that be of value to any of our listeners who happen to be veterans, as I am a veteran. I'm also officially a I have a VA disability rating, so I'm a disabled veteran. So if you happen to follow that same category, then I'd like for you to listen very closely. In Florida, if you meet certain requirements, veterans age 65 or older who are partially or totally permanently disabled. May receive a discount on the assessed value of property that they own and use as homesteads. In other words, basically you can get a discount on the taxes you pay on your home. The discount is a percentage equal to the percentage of the Veteran's Permanent Service Connected disability, as determined by the Department of Veterans Affairs. So basically what that means is that if you. Have a 50% rating, for example. Then the assessed value of the property for each homestead would be reduced by 50%. So you're paying taxes on a lesser amount if it happens to be 90% or whatever. Now, we know as veterans, you know, we're familiar with the with the one truism that was been there that, you know, if you happen to be 100% disabled in the state of Florida, actually across the country, 100% disability, you do not pay any property taxes at all. So this is a program I was not aware of, but thought might be of interest to our veterans. And it also carries over to veterans surviving spouses. If the spouse holds legal or beneficial title to the homestead and permanently resides there and has not remarried. All you got to do is go online and complete form 501. Again, that form is like Delta Romeo 501. If you want more information, contact me at. Greg has saved money masters.com or you just give me a call at (813) 430-7100.

Producer:
It's this week in history. All right, well, let's get quickly here to a few of the things in this week in history before we close out our proceedings here today, Greg. And we'll start with today, October 17th. Mother Teresa in 1979 was awarded the Nobel Peace Prize. That, of course, no surprise to anybody who followed her life because, you know, she was known for for giving so much of herself.

Greg Castle:
So true, so true. And then tomorrow, October 18th, on this date in 1867, the US purchase of the Russian colony of Alaska was approved. And not to be outdone, even though Alaska made it to statehood in 1898, about 30 years later, Puerto Rico was turned over to the United States following the Spanish-American War. Birthdays today. Alan Jackson is 64. Of course, he's a country singer. It's 5:00 somewhere. Way down yonder on the Chattahoochee. Mae Jemison, whose name you probably not recognize. She is 66 today. She's an American physician and the first African-American woman to become an astronaut. Evel Knievel. I remember watching him on TV with his famous jumps over Las Vegas fountains. He would have been 85 today. And then Rita Hayworth, the pinup of the of the era. She would've been 105 today. American actress whose portrayal of Seductresses helped earn the nickname the Love Goddess. And today is national clean your virtual desktop day. National mulligan day. National payback a friend day. National pasta day. So I think that I will, after this show, clean up my virtual desktop because it definitely needs it. I'm actually going to play some golf and take my mulligans there, and while I'm there, I'll probably pay back some of my golf buddies money I owed from the golf course losses. And then I'm going to go out and enjoy some pasta for dinner tonight.

Producer:
That sounds like a good plan to me. Well, Greg, I think that's sounds like a show as well. Another great one here. And I appreciate all that you bring to the table each week. We'll talk to you again next time around. And I know have a lot more great information for our listeners.

Greg Castle:
Right back at you. So we'll see you next week. Same bat time, same bat channel. Goodbye, everybody. See you next week. 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. A mirror 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.

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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