Are Roth Conversions Going Away? Transcript Producer: [00:00:00] Registered investment advisors and investment adviser representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, if any exist. Please refer to our firm brochure. The ADV to a Page four for additional information. 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. 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 project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer: [00:00:51] Welcome to the Active Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial adviser who places your needs first. He’ll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax efficient investigate and now your host Ford Stokes

Ford Stokes: [00:01:13] And welcome the Active Wealth Show activators. Ford Stokes, chief financial advisor and I am joined by our esteemed executive producer, Mr. Sam Davis. Sam, say hello to folks.

Producer: [00:01:24] Welcome to the weekend activators. It’s an October weekend follows here and I’m glad you’re here with us.

Ford Stokes: [00:01:30] Yeah, it’s you know, Georgia has got a big game this weekend and congratulations to Georgia Tech that won a big game over North Carolina last week. Hope they continue to build on it. Really like Georgia Tech’s quarterback. Obviously, Georgia is a juggernaut and they beat the poor Vanderbilt Commodores and sorry for all you, Vanderbilt Commodore fans and alumni and most Vanderbilt fans are alumni, by the way. But, you know, Big 62 to nothing win over the Vanderbilt Commodores over the weekend and last weekend. And you know, Georgia does have a big game against the Arkansas Razorbacks this weekend. We wish them well. And Sam, thanks so much for being that great weekend ambassador that we know that you are. We’ve got quite the market update and inflation demonstration today. In this first segment. Today, you and I are going to talk about what to do in this new retirement environment. And you were kind of remarking like, Man, it’s just incredible what they’re doing, they’re changing the backdoor Roth rules. We’re going to get into that and just kind of what you’re seeing out there, kind of what your parents are going through, but also you and your wife just trying to figure out what you’re doing. As you know, young urban professionals without kids, you guys are kind of double income, no kids DINKs. Just your thoughts about what we’re seeing with huge spending bill on the rise and everything else. Just want to kind of get your take.

Producer: [00:02:48] Yeah. Well, the market update and what’s in the news this week is especially important for those who are in retirement or coming up on retirement the next few years. But it is some big news and it’s going to have an impact on people who are still in just the first few years of their professional life, starting to make a real income, starting to save. So we’re going to talk about some important things that you need to know as you consider your retirement savings.

Ford Stokes: [00:03:12] Yeah. Well, again, thanks for welcoming us to the weekend, Mr. Weekend Ambassador. Great job, Sam. All right. Here’s our market update

Producer: [00:03:19] Your active wealth market update.

Ford Stokes: [00:03:22] The number of Americans filing for first time unemployment benefits rose by 11000 to three hundred sixty two thousand, according to the Labor Department this past week. Analysts surveyed by Refinitiv were expecting the number of first time filings to decline to three hundred and thirty five thousand. Obviously, three hundred sixty two thousand is much more. New jobless claims have now risen for a third straight week. It appears to have been spurred, at least in part by rising claims in the states of California and Michigan. And by the way, both of those states are run by Democrats. Stocks are mixed this week as bond yields steady. Inflation concerns on Tuesday sent the 10 year yield to one point five four percent, its highest level since June. Boeing 737 MAX test flight for returned service in China went off without any problem, said company president. The plane maker hopes the jet will return to service in the country later this year. This is a big one. This is interesting because a lot of people do enjoy dollars freight here in the southeast. Dollar Tree announced plans to add price points above $1 in some Dollar Tree stores, yet another sign of inflation. In commodities, West Texas Intermediate crude oil fell forty six cents to seventy four point eighty three cents a barrel and gold tumbled forty nine dollars and 30 cents to seventeen hundred and twenty one dollars and fifty cents an ounce. And overseas markets were mixed this week, and let’s kind of talk through our inflation demonstration for the week here.

Producer: [00:04:53] It’s time for an Active wealth inflation demonstration.

Ford Stokes: [00:04:59] A slew of factors, including rising shipping costs and supply chain bottlenecks, are persisting and should last through the upcoming holiday season, one issue is that the cost to ship containers overseas has soared in recent months. Shipping a 40 foot container from Shanghai to New York cost about $2000 just a year and a half ago before the pandemic. Now it costs about $16000, according to Bank of America. Federal Reserve officials this week conceded that inflation in 2020 will be more than they had anticipated. However, they still see prices settling in to a more normal range just above two percent in the coming years, places where inflation has spiked the most in 2020, per a Yahoo. Story that we read. Get this, folks! The highest spike in inflation has been right where our office, where we’re broadcasting this show from in the king and queen building, it’s in Atlanta, the Sandy Springs, Roswell North Atlanta area. The inflation was 6.7 percent year over year growth on inflation. That’s crazy. It’s even more nuts compared to Dallas, which is number eight on the list at five point six percent. We are one point one percent higher in inflation than Dallas, Texas, which, you know, with oil money, everything else. I’ve never would have thought that. So now, more than ever in this, this retirement environment, you’ve got to stay invested. You’ve got to do everything you can to manage your assets to protect against loss, but also to grow your assets.

Ford Stokes: [00:06:29] I mean, the name of the game here is to kind of build a smart financial plan. You want to build a smart, safe side of your investments, you want to build a smart risk side of your investments and also smart tax side of your investments. And if you’re looking at an entire smart retirement plan and you want to do a great job with smart health, with the right Medicare Supplement Insurance Plan or the right Medicare Advantage plan, and our partner Bonnie Dobbs with Medicare and other red tape can help you do that, and we can put you in touch with Bonnie, and she can take care of all of your Medicare needs and listen for the rest of this segment. I’m going to set up the rest of the show. Our goal here is to set you up for kind of succeeding in this new retirement environment. It’s kind of a new normal, and we’re looking at three point five trillion dollars worth of a spend, which is crazy from the Congress, and there’s really not much the Republicans can do to stop it. They may be able to stop it in the Senate with any filibuster and with a filibuster because they haven’t gotten rid of that rule yet. But this is really an issue, and we’ve got to make sure that your money is not decreasing in its buying power. We want to make sure that your retirement nest egg lasts for the long haul because many of you are going to be retired as long as you worked.

Ford Stokes: [00:07:50] So I mean, you could be looking at a thirty five to 40 plus year retirement. And if that’s the case, we’ve got to make sure this money lasts. I mean, we work primarily with business owners, pre-retirees and retirees. That’s who we work with. And they all have one thing in common they’ve got one check to last on the rest of their lives. And if you come in to work with us, what we’re going to do is we’re going to give you $1500 worth of free financial planning value, absolutely at no cost to you. But just because you’re smart enough to listen to the Active Wealth Show and you’re smart enough to seek information because you understand that knowledge is power and you want more knowledge and more power with your own retirement. And we’re going to help you do that. So all you have to do is visit active wealth that’s just active wealth. And in the upper right corner there is a set an appointment button and all you have to do is press that and you get you can get placed directly into my calendar. You won’t get passed off to another one of our advisors. You’re going to talk directly to me. So we’re happy to help you do that again.

Ford Stokes: [00:08:52] All you do. All you have to do is visit active wealth and click that set an appointment button the upper right corner. Also, if you want the phone number, our phone number is (770) 685-1777. And today we’re going to talk about what to do in this new retirement environment with what is likely rising taxes, what is likely rising inflation and what is likely decreased buying power if we don’t stay invested. Also slightly rising interest rate environment. So what does that mean to the bonds that we hold within our portfolio? What can we do? But our goal is always here in the active well show. We’re trying to help you build a tax efficient fee, efficient and market efficient portfolio. When I say that in the office, usually people write that down like, OK, I need to be tax efficient, fee efficient and market efficient so that I can build a smart financial plan for my retirement future. And listen, we don’t want you to have to. Go back to Wal-Mart and sit there and ask people, Hey, do you want a basket or a buggy? We want you to actually be able to enjoy your retirement, enjoy your grandkids and spend more time with your kids and your grandkids and your family and be around for high school graduations and weddings and people going to college and graduating from college and all that kind of stuff.

Ford Stokes: [00:10:25] We want you to be around for those things. You’re really important to your family and we want you to your money to be around as well. We want to help your money last through this. So again, we come back from the break. We’re going to talk about how to build a smart financial retirement plan. Within this new retirement environment, we’re seeing with rising taxes and rising inflation and rising interest rates. And this is really one of those shows you don’t want to miss. So I’m glad you’re listening to us here on the Active Wealth Show. We’re on Stitcher or Spotify or Google Play or iTunes. And it also an active wealth showcase where we post all of our podcasts. But we encourage you to go ahead and call Deborah and her team right now. At (770) 685-1777. And when we come back from the break, we’re going to talk about what happened on this date in history. And we’re going to get straight into how Congress is going after the backdoor Roth and what you need to take action between now and December 31st. It was the actor well, show right here on a.m. nine to the answer.

Ford Stokes: [00:12:32] And welcome back activators the actor will show on Ford’s for chief financial adviser and on this date in history, we had Walt Disney World opened in Orlando. It’s pretty amazing. They welcome thousand guests on opening day. I wonder how many guests there are now crazy. The longest the parks were ever closed was four months during the pandemic, from March through July of 2020 and happy opening anniversary and birthday to Walt Disney World. We’ve taken our girls to Walt Disney World. Well, twenty five plus times, mainly because they do competition cheer. And so they’re there. They are quite a bit and they were in elementary school. We lived in Florida for a brief time. And so, Sam, your thoughts, you actually have a lot of fun down there at Walt Disney World as well because you used to live in Orlando.

Producer: [00:13:24] Yeah. So I lived down there a couple of years, and my wife was involved at both the big parks down there in Orlando Universal and, of course, Walt Disney World Resorts there in Orlando. So she was able to get us in for free whenever we had some free time and go, enjoy the parks, enjoy the rides. I had actually never gone as a kid, so my first experience was being grown up in my 20s and I still had a great time. I’ve got family I know down there at Disney World right now, so it’s it’s one of the best places to take a vacation, especially if you’ve got younger kids. And it’s awesome. They’re celebrating their 50th birthday down there at the Magic Kingdom in Orlando. Very cool.

Ford Stokes: [00:14:03] Yeah, that’s right. They do a great job even catering to pre-retirees and retirees too, like with Epcot and wine tastings and culinary stuff. When you eat around the world and drink around the world and do all kinds of stuff there. They may not be getting on the rock and roll roller coaster or anything, but to the background of Aerosmith music. But they can also have a great time. So if you’re considering, you know, kind of a U.S. based vacation where you don’t have to get on an airplane and you just want to drive somewhere, Orlando and going down there to Walt Disney World, it’s a good idea. So let’s get into this kind of big news that’s going on about what Congress is doing.

Producer: [00:14:49] It’s time for an Active Wealth Roth converter.

Ford Stokes: [00:14:54] They are trying to for lack of a better term acts or delete or cut the backdoor Roth individual retirement account strategy. And to help fund their multitrillion dollar budget plan, House Democrats have called on ending the back door and mega backdoor Roth individual retirement account strategies. And many of our. In finance, many financial advisers across the country are weighing plans with clients as the after-tax back door maneuver may disappear as early as December 31st of this year. However, proposals to counter are still in flux as Democrats wrestle over the final package, but if you’ve got a sizable amount of money that you want to, you know, let’s say you want to do some contributions and you want to then go ahead and do a backdoor. Roth conversion is still going to be able to do the traditional Roth latter conversion. That’s fine. But this is, you know, a couple of popular retirement saving techniques may soon be disappearing here as Democrats hash out ways to pay for their multitrillion dollar spending package. Advisers are exploring these solutions, and we have as well. Currently, investors with a modified adjusted gross income for 2021 above one hundred and forty thousand or two hundred and eight thousand for couples filing jointly can’t contribute to a Roth individual retirement account. But wealthier investors can skirt the limits with a so-called backdoor maneuver by making what’s known as nondeductible contributions to their traditional IRA and then quickly converting the money to their Roth IRA. The mega backdoor Roth strategy can become even more powerful, allowing someone to convert more funds with after tax 401K contributions.

Ford Stokes: [00:16:54] House Democrats, however, want to crack down on both, regardless of income level after December 31st, according to a summary released by the House Ways and Means Committee. Pre-tax conversions using funds that levies haven’t paid on or still allowed in the proposed legislation, but those with taxable income of more than four hundred thousand or four hundred fifty thousand for married couples filing together wouldn’t be able to use a strategy just over a decade from now after December 31st, 2031. As the debate heats up in Congress, financial advisers like myself, you know we’re still watching for the final details. In the meantime, here are some possible solutions for you. You know, we’re all still kind of recommending backdoor Roth IRA contributions and making mega backdoor Roth 401K for 2021. That’s what we’re doing. Summarizing these moves that should start weighing the pros and cons with a financial adviser, you really should be kind of reaching out to us. Just visit Active Welcome and click that set an appointment button in the upper right corner, and we can help you with dealing with backdoor Roth IRA contributions or a mega Roth 401K, especially obviously if you’re still working. While the Democrats proposal applies to conversions after 2021 employees still have the option to transfer after tax 401K contributions to a Roth IRA when they retire and rollover their funds, it appears the proposal would not impact the current ability to take your after tax bill on 401K contributions and move them to a Roth IRA when you separate from service.

Ford Stokes: [00:18:30] Additionally, more employers may add Roth on 401K options to company plans, which all investors, regardless of income, may still use. Also, health savings accounts. If Democrats pull the plug on the back door and mega backdoor Roth IRA strategies, eligible investors may prioritize health savings account contributions. Higher people are still going to look for ways to grow money. Tax free investors with eligible high deductible health insurance may write off 2021 contributions up to three thousand six hundred dollars for an individual or seven thousand two hundred dollars for family plans. They can grow the their money tax free and withdraw funds penalty free any time for qualified medical expenses. However, many people don’t realize they can use the money once they’re sixty five. Well, there’s no penalty on the withdrawal after sixty five investors will still pay income taxes. Once you have assets in there, there isn’t a required minimum distribution like a traditional IRA either, so that’s good to know as well. So you may want to consider health savings plans as well, but I want to be clear yes, people are still going to look for ways to grow their money tax free and HSA is probably a great way to do that. We have gone over this example before, but we stayed at the Gastonia when I got engaged 20 plus years ago and I was like 20 years and six months ago, and when we walked in, there were only. People going in and out of windows instead of doors onto the main porch for an afternoon tea and.

Ford Stokes: [00:20:04] I couldn’t believe it, I was like, why do you only have windows instead of doors? It’s because and Oglethorpe time during Savannah, when Savannah was just getting started, they were taxing the property taxes based on the number of doors that houses had. So tax limit limiting tax is something that is universal and ubiquitous, and it is something that people are always going to look and look to do. And it all goes all the way back to the colonial times here in Georgia. And what I would encourage each of you to do. Is make the first move. You’ve been listening our show for a while, you know that we do everything we can to minimize your taxes and to protect and grow your wealth. Go ahead and visit Active Wealth.com and click that set an appointment button in the upper right corner and we’ll get you a free Roth ladder conversion plan. If you have not gotten a Roth Ladder conversion plan, you haven’t seen that with your current investments. Then you definitely should just visit ActiveWealth.com and click that set an appointment button and you’ll get booked directly in our calendar and we’ll give you a Roth ladder conversion plan absolutely for free. Again, our total financial plan is like $1500 worth of value, but we give it away free to Activators. One of the answer listeners and also, you know, obviously to listeners to the Active Wealth Show. And the reason we do it is want to help you make an informed financial decision.

Ford Stokes: [00:21:30] I’m a fiduciary that means I’ve got to put your needs ahead of my own. And what you can expect when you work with us is one you’re going to get a Morningstar report that’s got an idea of kind of the risk you’re paying, the fees you’re paying, the risk you’re taking, the allocation of your assets, the correlation of your assets. And we’re going to do everything we can to help you understand what where you currently are. The next thing we’re going to do is we’re going to give you a free financial plan to your ninety fifth birthday with your current plan. We’ll give you one with our recommended portfolio. And then the last thing we’re going to give you is a financial plan with a Roth ladder conversion included. So it’s kind of a no brainer. So if I were you, I would just go ahead and pick the phone up and call Deborah and our team. At (770) 685-1777 or visit Active Wealth.com. And we come back from the break. We’re going to talk about really how to build that smart financial plan. With smart, safe smart risk and smart tax investment solutions. You’ll see active, well, shit right here on Amazon 20. The answer and we look forward to talking to you more about how to build out smart financial plan and come back from the break in this brand new rising interest rate, rising tax and rising inflation environment.

Producer: [00:23:12] Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune into the Active Wealth Show with Ford Stokes, your chief financial adviser, to learn how you can reduce the taxes you pay before and during retirement. The Active Wealth show Saturdays at noon and Sundays at 11:00 a.m.

Ford Stokes: [00:23:45] And welcome back activators. The actor we’ll show here is segment three of the show this week, and on this date in history, Henry Ford introduced the Model T. The cost of it was $825 back then, if you can believe it. The Model T became popular because of its affordability. Its popularity led to the numbered highway system and help connect rural America, which is pretty remarkable stuff. Your thoughts on Henry Ford coming out in 1988 with 825 Model T.

Producer: [00:24:21] Yeah. Well, first, it’s kind of crazy to me to think that we’ve been riding around in automobiles for over a hundred years now and to think how far we’ve come. My dad’s a big fan of cars, a classic car collector, so I grew up going to car shows pretty regularly and it was always incredible to see those old Model T’s. A lot of them had wooden components on them. Most of the time they were black. I think even at one point, Henry Ford said, You can get whatever color you want as long as you want black.

Ford Stokes: [00:24:52] That’s right.

Producer: [00:24:52] He did so incredible to see how far we’ve come, and Ford still, for the most part, stands by that brand of affordability and reliability in their vehicles. It’s cool.

Ford Stokes: [00:25:06] Yeah, that’s one reason why the Ford F-150 is the number one selling vehicle in the world. Pretty remarkable stuff there, although I do think they are way too proud of their Ford trucks and I drive one and it is not inexpensive these days. We wish them all the best, but goodness. Do we have to start getting 50 and 60 thousand trucks, is that is that what we’re supposed to have now? We want to keep going off of this smart financial plan and what to do in this new retirement environment. And we just talked about what Congress is trying to do to the backdoor Roth. We talked about also that we’ll help you build a Roth ladder conversion. And in our smart financial plan side of this thing, what we’re looking at is that’s the smart tax side because we want to kick the IRS out of being your partner in retirement permanently. And the best way to do that is to convert a little bit of your IRA. Over time ever, a five to seven to 10 year period, if you need to. Worked a lot of people who have like a little over a million dollars in their IRAs and. In their married filing jointly, and a lot of them are moving $200000 a year each year until. All the money that’s in there, IRA is actually sitting in their Roth IRA. And here’s a really great smart tax little hint here. What a lot of our clients do is they use money from their investment account or their savings accounts, and specifically some of them are using money that would be sitting in bank CD money, but basically investment account money that gets taxed each year on the growth.

Ford Stokes: [00:26:48] What they’re doing is they’re taking that taxable account, the taxable account money. And they’re paying the taxes on the money that moves from the IRA to the Roth IRA. So therefore, the money that leaves the IRA and goes into the Roth IRA moves dollar for dollar. And one of the thing that Sam wanted to make sure that I mentioned is like, Look, when you pull a dollar out of a Roth 401K, you get to put that entire dollar in your pocket. That is remarkable. But if you pull money out of your IRA or a Roth IRA. You may be in a twenty 22-24% tax bracket and the government’s going to take $0.24 of that dollar and you’re going to get $0.76 of that dollar if you’re in that 24% bracket. And so it’s something that I would encourage you to consider trying to kick the IRS out of your retirement life because gosh, knows what’s going to happen between now and the next thirty five plus years. And when we were when we run financial plans, we run them to your ninety fifth birthday on purpose because we’re all living longer. And the CDC came out last year and said. Or actually two years ago, pre-COVID, and they said if a married couple both reached the age of 65, there is literally over a 60 percent chance that one of the two spouses are going to live to be over 90 years old.

Ford Stokes: [00:28:19] So even if. You know, even if gentlemen are. Feel like, well, I’m not going to be around forever or my money needs only last like 15, 20 years. Well, that’s fine, but you’re your bride may live well into her nineties and even into her hundreds. And we need to make sure that money lasts for the family, but therefore. You know, you and your spouse don’t become a financial burden on your children. Believe or not that that’s the baby boomers. The number one fear is not death, it’s running out of money. They don’t want to become financial burdens on their kids. They just don’t. And who can blame them? I mean, you don’t want to just have to live off of. Of of Social Security only, right? And believe or not, Social Security is either the number one or number two source of income for retirees. In the U.S., it just is. And that is something we really need to do a much better job. At maximizing our Social Security income and also. Doing everything we can to minimize our expenses during retirement and maximize our growth and our wealth. And if you want to copy my new free book. Annuity 360, where you can learn all you need to know about annuities, which ones to avoid and which one to buy for successful retirement, all you have to do is visit Annuity360.net, that’s annuity360.net and we’re happy to help you.

Ford Stokes: [00:29:53] No problem, and we’ll get that free book out to you. So just again, visit Annuity 360.net, and what I want to do now is listen, retirement is more about income. That it is about getting one big nest egg. Is a smart financial plan equals smart, safe investments, plus smart risk investing and smart tax investing and many other people are saying, Hey, also smart health with Medicare, and we can help with that as well. But we need to do everything we can to build a smart financial plan. And best way to do that is to kind of get to a smart, safe side of it. And did you know you can actually build your own personal pension and we can help you do that? All you have to do is visit active welcome and we’re happy to help you build a retirement income plan that you can never outlive. We’ll do also our retirement income gap analysis, but let’s go ahead and play. Chapter nine for my new book and how to build a personal pension from my new book Annuity 360. Go ahead and play that sound. Chapter nine. You can create your own personal pension. Big idea Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement.

Ford Stokes: [00:31:21] Those who are approaching retirement are afraid that they will run out of money, but an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don’t overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date you specify. You don’t want an annuity company to charge you too much to simply pay your money back to you. I’m confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals. An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don’t give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee, but you can still create a personal pension without an income rider on your annuity. If you get an annuity with an income rider but don’t utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company one to two percent each year. You defer annuities in your annuity without receiving a single benefit for that annual fee.

Ford Stokes: [00:32:46] This income rider fee will also draw down your account value or principle. Depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you’ll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value. Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than five percent a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be armed friendly, so you won’t suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier. Inspect what you expect with any annuity. Don’t just go with what the annuity agent or adviser tells you. Read it for yourself. Specifically, you should read the annuity illustration guaranteed and non-guaranteed tables included within the annuity illustration.

Ford Stokes: [00:34:12] Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They’ll help you build a successful retirement and they’ll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. Know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you one to one and a half percent of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10 percent, you will run out of money in 10 to 12 years. Make sure that you’re working with an. Advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime, as discussed above, we recommend no more than five percent be withdrawn each year from your account and activators. I hope you enjoy that chapter in my new book, Annuity 360 60, about how to build your own personal pension. We’re so glad you’re with us here on a.m. nine 20. The answer and the Active Wealth Show, and I strongly encourage you to come back for this important segment for.

Ford Stokes: [00:35:56] And welcome back to actor Ball Show activators, I’m Ford Stokes, your chief financial adviser, and Sam gave me a really great this week in history thing. This week in history, Yosemite National Park was established and I’ve been to both Yosemite and Yellowstone, and it’s incredible and I can’t wait to take my kids, even though they’re probably going to be bored by it. I’ve got 14 year old twin daughters who turned 15 next month, and hopefully we didn’t wait too long. We were going to try to take them at like 12 years old and in 13 and obviously COVID hit and we kind of messed that up. But Yosemite National Park is known for its towering granite cliffs, all inspiring waterfalls and scenic views of the valley floor. Yosemite Falls is one of the tallest waterfalls in the western hemisphere, and it reaches more than two thousand four hundred feet. Teddy Roosevelt went camping there in nineteen oh three and subsequently expanded the national parks in the United States because of it. And in 1890, this week in history in 1890 is when the Yosemite National Park was established. I want to make sure I said that right. And. Pretty good stuff, Sam, you’re a big camper, you wouldn’t mind during retirement having an RV running around, even though you’re way young right now. Just your thoughts on the national parks and giving access to the great outdoors to all American citizens.

Producer: [00:37:22] Yes, absolutely. We were talking before the show today about my one of my retirement dreams of having a camper and my wife and we roll around and see the most beautiful parts of this great country. And I haven’t been to Yosemite yet, but it is close to the top of my list of places I want to see. One of the premier destinations for camping, hiking, climbing and yeah, it’s so important, especially for kids, like you were saying, to get the kids out there outside and enjoy the great outdoors. I’m not just saying this, there’s not a weekend like a weekend spent outdoors. My wife and I love to go outdoors. I proposed to her at a national park, Great Smoky Mountains National Park, just on Georgia, right there on the Appalachian Trail. So it’s something that’s important to us, and I hope it’s important to other people well into the future. And thanks to Teddy Roosevelt for making it possible.

Ford Stokes: [00:38:16] Yeah, it’s great stuff. Big Teddy Roosevelt fan. All right. So let’s get back into this. We’re going to talk through smart risk smart, safe and smart tax as well. But we talked about income and building your own personal pension earlier. You kind of need to get a retirement income gap as part of that smart safe part of the plan. And the retirement income gap is simply the difference between your budget and your guaranteed income sources. So, for example, if you have a budget that requires $5000 a month in income in today’s dollars, you have guaranteed income from Social Security and pensions of three thousand a month. Then your gap is two thousand a month. You’ve got to take out of your retirement nest egg, so we want to see everybody do a much better job at planning just on the income and the expense side. And so what I ask my clients to do is I say, Hey, look, take the last two months. Don’t do it during November, December, but go ahead and, you know, take like September, October or August and September and add those two months up and then divide by two. And that way, it will get a good idea of what your average monthly spend is, and it’s probably going to shock you. And we’ve got to do everything we can to make sure we don’t have a negative retirement income gap. And that’s part of the planning we do here at Active Wealth Management.

Ford Stokes: [00:39:38] We will do a retirement income gap analysis for you. And if you’re concerned about. Listen, I’m paying too much in taxes, worried about what’s going to happen to retirement with taxes because we believe that tax rates are going to go up in the future. The current twenty four percent bracket from nineteen sixty to nineteen sixty three during the Kennedy years was actually fifty six percent and that’s where the Democrats want to get back to. And if you’ve got an IRA account and you’re taking money out of your IRA, what that means to you is that you get four thousand four hundred of your dollars when you distribute from your IRA and the U.S. government gets fifty six hundred of it. If we go back to those times right now, if you’re in the 24% bracket, the U.S. government gets two thousand four hundred out of ten grand taken out and you get seven thousand six hundred, which still isn’t great, right? But it’s a much better idea to try to kick the IRS out of being your partner in retirement with a smart tax strategy, and that is implementing the right type of Roth latter conversion. And with all these changes that are coming down the pike with this three point five trillion dollar budget that the Democrats are trying to push forward their agenda. And you know, AOC’s Green New Deal and everything else, they’re trying to come after your retirement dollars and you’ve got to do everything you can to minimize taxes and we will help you with that with the right type of.

Ford Stokes: [00:41:02] Raw, flatter conversion plan, we can also get you retirement income you can never outlive, we can even get you tax free retirement income with a different type of product than a fixed indexed annuity with an indexed universal life policy as an example. But those are all examples of smart, safe and smart tax solutions. And your money is not invested in the market. It can get you market like gains without market like risk. There also contracts between you and the insurance company or the annuity company. And you also have the ability to delete. Any advisory fees or portfolio fees on that portion of your portfolio, I mean, why? Let me ask you, why would you invest in bonds when it’s and take the market risk on bonds, when you can invest in fixed index annuity, get a higher rate of return, like all the illustrations show that fixed indexed annuities illustrate better. Then bond portfolios do. Historically, there’s I’ve never seen one where the bond portfolio did better than select. Fixed index annuities doesn’t mean it doesn’t happen, but that’s been my experience, and I will just tell you ought to consider deleting the advisory fees because with a fixed indexed annuity, the annuity company pays us as the advisers. And there’s no advisory fee, there’s no portfolio fees, there might be an income rider fee that we try to stay clean on our annuities that we recommend and try to do them without income riders because we believe you can generate your own income and make it more fee efficient.

Ford Stokes: [00:42:43] So those are all examples of kind of smart risk and smart safe strategies as part of our Smart Financial Plan because we’re trying to minimize the taxes we’re going to pay. And I just encourage you to visit active welcome and we’ll get you a smart financial plan. It’s a fifteen hundred dollar value, absolutely no cost to you. And we’ll try to build a successful retirement for you. That’s really our goal. Hope you can hear the humanity in my voice here. We’re really on this radio station doing this radio show every week just to make sure that. We’re staying topical, but we’re educating each one of you and we’re keeping up with the times for you. We’re the ones that are doing the research on what’s going on in the House and Ways and Means Committee. Like, what are we doing about trying to do everything we can to help? Minimize the taxes you’re going to pay in retirement, what are we doing to protect and grow your wealth and we’re going to do everything it can to help you? Then we can also talk about smart risk. So smart risk would be like tactical asset allocation, where the goal is to only capture 40 percent of the market losses, but only.

Ford Stokes: [00:43:51] But you’re also only going to capture about 70 percent of the market gains. Kind of as an example, during the 2008, you know, mortgage crisis and the market downturn, you’ve got a million dollar portfolios that you know. They lost fifty point one percent of their value. Whereas people that were invested in a tactical asset allocation strategy lost a significantly less amount than that. Because we’re only trying to capture about 40 percent of the market losses, and we’re not going to ride the highs, the highs, but we’re not going to ride the lowest the lows either. And we’re trying to do a really good job through bond replacement Roth latter conversion and also tactical asset allocation, which is a smart risk investment strategy. And we’ve got portfolios that are performing very well, but they’re also designed to protect against significant downside risk that we’ve seen in the market the last couple of weeks in a row. And if you’ve got concerns, if you’ve been concerned about what’s going on with the markets in the last couple of weeks, then I would encourage you to go ahead and visit active walmart.com and click that set an appointment button. And we’re happy to talk to you. Or you can just give us a call at (770) 685-1777. And now it’s time for the final countdown. It’s the final

Producer: [00:45:12] Countdown. So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:45:23] So on today’s show, we gave you a market update. We talked about we also gave you an inflation demonstration, we talked about what’s going on with the House Ways and Means Committee talking about getting rid of the backdoor Roth and the mega backdoor Roth conversion. We also talked about how to build a smart financial plan that included smart, safe smart risk and smart tax investments, and also the importance of getting a smart health plan with, you know, during retirement with Medicare and Medicare Supplement Insurance Plan or Medicare Advantage plan. And we’re happy to introduce you to Bonnie Dobbs, who’s our partner on the Medicare side, and she’s with Medicare and other red tape. We also talked about how to build your own personal pension because retirement is more about income than it is about building one big number for your nest egg. And again, we revisited kind of smart, safe smart risk and smart tax solutions here on the Wall Show kind of packed a lot of in as we always do during this time, and we’re running out of time here. But we’re so glad you’re with us here on Amazon to give the answer on the Active Wall Show. Thank you to the activators for making us the number one listen to radio show on AM to the answer on the weekends. And we’re so glad you’ve been with us and we listened with retirement. If you’re going to be a bear, be a grizzly. Really, do everything you can to be focused on getting as much knowledge as you can to make an informed financial decision about your retirement future. And we’re going to talk about how to build that successful retirement even more next week. We really are start digging into the smart tax solutions. I think you’re really going to like next week’s show. Be sure to come back and listen to us next week right here on the Active Wealth Show right here on a.m. nine 10. The answer?

Producer: [00:47:13] Thanks for listening to the Active Wealth Show you deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at (770) 685-1777 or visit Active Wealth Investment Advisory Services Offer through Brookstone Capital Management LLC. Become a Registered Investment Advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCMA are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.