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Ford Stokes welcomes Sam Davis back to the show as they discuss Team USA’s success at the Paris 2024 Olympics. Then, they get into multiple segments including an all-new Problem Solver, Right or Wrong, and “Just Don’t Do It!”

Does your risk tolerance align with your actual financial plan for retirement? We can help you find out today!

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About Retirement Results:

Welcome to Retirement Results! Each week, Ford Stokes and his team of fiduciary advisors help educate pre-retirees, retirees and business owners on ways to better protect and grow their hard-earned money.

With $34 Trillion in national debt and counting, Ford and many other economists believe that taxes are likely to increase in the future, affecting retirees for decades to come. Ford and his team will help you build a smart plan that is TAX-efficient, FEE-efficient and MARKET-efficient.

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On this week’s show, Ford and guest co-host Matt McClure discuss Wall Street’s wild ride in recent days. Why did the latest jobs data contribute to the biggest one day sell-off in two years? They will break it down for you. Plus, putting together a solid retirement plan means you need to be tax efficient in your golden years. We’ll tell you how to kick the IRS out of your retirement.

Schedule your Complimentary Consultation now: RetirementResults.com/plan

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This week, Ford welcomes guest co-host Matt McClure to talk about the different risks you face when planning for retirement. They’ll also discuss how important it is to know when to reduce risk – and how to keep your investments safe as you approach your golden years.

Schedule your Complimentary Consultation now: RetirementResults.com/plan

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In this episode, Ford welcomes Josh Lumme to discuss the best alternatives available today for the bonds and bank CDs you may currently have in your retirement portfolio. Is your money working as hard as you do?

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Special episode today with guest, Ryan Burgos, U.S. Air Force and Army Veteran, Director of National Employment at DAV.

Marking its 10th year in 2024, DAV’s National Employment Program has a decade of first-hand experience and testimony from veterans being connected to lifechanging, meaningful employment opportunities. DAV’s nationwide job fairs are one way that veterans and their spouses are connected to employment opportunities. Since 2014, over 180,000 job offers have been extended to fair attendees across more than 1,000 events.

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On this episode, Ford discusses the biggest news of the past week with the assassination attempt of Donald Trump. Plus, how can you protect your financial future from ongoing inflation? Ford and Sam share some strategies that you won’t want to miss.

Schedule your Complimentary Consultation now: RetirementResults.com/plan

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Are you concerned about taxes eating away at your hard-earned retirement savings? Ford Stokes and Sam Davis discuss how you can convert your 401(k) and IRA savings into a Roth account so you can generate taxfree income for your future retirement.

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Ford Stokes and Sam Davis discuss the first presidential debate of 2024 and explain how the government plays a role in your retirement plan.

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Ford Stokes and Sam Davis discuss how you can include pension-like income in your retirement plan and beat the current bank CD rates with MYGA alternatives.

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Ford Stokes and Sam Davis explain how you can prepare for retirement by establishing an income plan that includes a personal pension from fixed indexed annuities. June is Annuity Awareness Month – please reach out to us with your questions and to look at the best options for including guaranteed income in your retirement plan.

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On this week's show, Ford and Sam share some tips to help you protect your buying power from inflation as you navigate retirement. In this episode, you will also hear an example of how we recently helped a listener in our Problem Solver of the week. Plus, we debut an all-new segment to celebrate special retirees.

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This week, Ford and Sam offer valuable tips and strategies to help you improve your financial outlook this summer. Plus, we share a problem solver of the week and some important things you will want to do once your nest egg reaches $500,000 to better protect and grow your hard-earned money.

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On this week's episode, Ford shares some key inflation data that was recently released before welcoming Vertical Vision's Josh Lumme to discuss the best bank cd alternatives and personal pension solutions for your retirement plan.

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Ford Stokes and Sam Davis discuss how the right kinds of annuities can give you both cashflow and cash value throughout your retirement. They address common questions from pre-retirees and retirees and explain how you can get started with a complimentary financial plan today.

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Ford Stokes and Sam Davis discuss what a “retirement tax bomb” is and how you can prevent one from damaging your golden years. Plus, we share an example of how we helped some listeners in our Problem Solver segment.

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In this bonus interview from Retirement.Radio's Matt McClure, we talk with Robin Growley - Head of Consumer Deposits at Bank of America. The two discuss some new online budgeting trends Robin has been tracking and offer advice on how listeners can navigate them.

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Ford Stokes and Sam Davis share some of the most common financial mistakes they encounter when helping people prepare for a successful retirement. We also highlight some common misconceptions in a new edition of “right or wrong”.

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Ford Stokes and Sam Davis share a checklist of six essential steps investors should be taking as they prepare for retirement. Have you met with a fiduciary advisor who can help you reduce risk, taxes and fees?

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On this episode, Ford Stokes and Sam Davis share some important reminders and valuable insights ahead of Tax Day 2024. Plus, what are America’s seniors loving (and regretting) about their retirement? We share the results of a recent survey and think you'll find it inciteful.

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For More Information & to Check Out Previous Episodes: RetirementResults.com

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Ford Stokes and Sam Davis share seven tips to help you take action today and start “spring cleaning” your financial life. Also on this show, pensions are a valuable tool for retirement planning – but do you know what to do if your job doesn’t offer a pension plan? Let us help you establish your own personal pension plan today!

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Ford Stokes and Sam Davis share some fascinating statistics that will likely motivate you to start planning for retirement, or checking-in on your plan if you already have one. Contact us today for your complimentary Social Security roadmap!

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Ford Stokes and Sam Davis help listeners avoid some of the most common mistakes people make while planning for retirement. Plus, we share a clip from a recent Senate hearing on Social Security and discuss the future of this income program for retirees.

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The Department of Veterans Affairs is announcing that all Veterans who were exposed to toxins and other hazards while serving in the military will be eligible to enroll directly in VA health care on March 5, 2024.

This means that Veterans who were exposed to burn pits, Agent Orange, herbicides, chemicals, nuclear weapons, or other toxins while serving in the military – at home or abroad – will be able to enroll directly in VA health care without first applying for VA benefits.

Retirement.Radio’s Matt McClure speaks with Dr. Shereef Elnahal, Undersecretary for Health at the VA, to find out more about how these veterans can get the help they need.

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On this episode, Ford Stokes and Sam Davis walk listeners through the ten essential steps you should be taking if you expect to retire in the next ten years.

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Ford Stokes and Sam Davis highlight the seven biggest financial headwinds that you will face in retirement, and offer solutions for navigating these common challenges.

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Ford Stokes and Sam Davis explain how you can build a plan that allows you to see your “results in advance” for retirement. In this episode, we share important tips to help you delete taxes and unnecessary fees from your retirement accounts.

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Ford Stokes and Sam Davis share tips and strategies for building a more tax-efficient retirement. Tune-in to learn how you can delete the IRS from being your partner in retirement.

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Ford Stokes and Sam Davis explain why a bond replacement is one move you can make to eliminate a significant amount of risk and fees from your retirement plan.

Plus, millions of Americans are making mistakes with their 401(k) accounts. In this episode, we point out those landmines so you don’t make any missteps when it comes to planning for your retirement.

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We are your resource for all things retirement and financial planning

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Ford Stokes and Sam Davis share a quote of the week from Thomas Edison before diving-in to how you can better prepare for retirement in 2024. How will the election affect the economy, retirees and those preparing for retirement? Tune-in and discover some statistics that will surprise you.

Plus, you know it’s important to diversify your investments, but it's time to really start focusing on why you need to diversify your income streams to build a solid retirement foundation.

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Contact Ford Stokes Here and Retirement Results at (770) 685-1777

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Ford Stokes and Sam Davis share the quote of the week and some thoughts about “The Financial American Dream” before interviewing Josh Lumme about the latest and greatest news inside the world of Fixed Indexed Annuities.

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Listen to Ford's interview with John Fredericks as they discuss the projected cuts to Social Security in 2033.

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Ford Stokes and Sam Davis are back this week to discuss what’s really happening with the Social Security Administration and its funding challenges.

They also share a list of eight things you don’t want to overlook when it comes to taxes in retirement. In our final segment, Ford will walk listeners through a problem solver to demonstrate how Active Wealth Management helped a listener build a retirement plan that includes TAX-FREE income.

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Ford Stokes and Sam Davis are your hosts for Retirement Results! On this week’s show, the guys make an exciting announcement about the show becoming nationally syndicated.

Next, Ford interviews Erik Sussman with the Institute of Financial Wellness to help listeners understand how a bond replacement could help them delete fees and significantly improve their portfolios for retirement.

Finally, Ford & Sam walk you through a problem solver to explain how they are helping some listeners with their retirement tax bombs.

We are your resource for all things retirement and financial planning!

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Contact Ford Stokes and Retirement Results at (888) 814-0304 - or - Dial #250 on Your Cell Phone and Use the Keyword "Retirement Results"

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Listen to Ford's interview with John Fredericks as they announce the launch of Retirement Results on the John Fredericks Radio Network.

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Ford and Sam kick off the Smart Retirement Plan series by explaining the importance of having a smart vision for your retirement. Then, they break down the smart inspection process to help listeners uncover what’s really happening inside their current portfolios.

As you near your retirement, protecting your assets becomes critically important. Contact us today to receive a free consultation and personal pension plan for both you and your spouse.

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On this episode, Ford and Sam are back to help listeners outpace inflation with their retirement plans. Plus, what is “sequence of returns risk” and why does it matter? Listen-in to learn how Active Wealth Management can protect you from market volatility and other risks that could put your retirement in jeopardy.

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On this episode, Ford and Sam explain how important it is to have a smart vision for your retirement. What are you doing? Who are you with? How are you going to fund it?

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On this week’s Active Wealth Show, Ford and Sam explain how Americans 65 and older are largely unprepared for retirement in this volatile economy. Savings are vital. Are you sure that your savings will last throughout your entire lifetime?

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On this week’s Active Wealth Show, Ford and Sam discuss why they have been educating pre-retirees and retirees since 2019 – to help you make smart decisions and win with your money!

Plus, what are target date funds really doing inside your portfolio? We uncover how these funds have drained pre-retiree’s assets through high fees and lack of performance.

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On this episode, Ford and Sam discuss the future of Social Security and the funding issues the program faces in the coming years. Plus, we welcome economist John Williams to the show to talk about the real rate of inflation and what happened in the 1980s that continues to reduce the buying power of retirees everywhere.

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On this episode, Ford and Sam discuss Social Security’s new cost of living adjustment (COLA) that was just announced for 2024. Is your retirement plan built to withstand ongoing inflation?

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On this episode, Ford and Sam detail defensive strategies that can help protect your retirement from stock market volatility and other economic challenges. Plus, what are Structured Notes and how do they work? Ford shares valuable information on this smart-risk investment in this episode.

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This week, Ford welcomes special guests John and Bev Martin, also known as the Retirement Travelers. They retired and started traveling three years ago... and haven't stopped! They travel around the world documenting their journey on YouTube. From state to state, country to country showcasing local hotspots and offering budget saving travel tips from each stop along the way. It's hard to listen to their story and not get hungry to go take off and see more of the world.

Also on this episode, it’s all about being prepared for future tax increases. Most people believe they are going up in the future, and we probably already know when it will happen. Plus, we play a fresh game of "Right or Wrong" to test your financial knowledge on several topics. And we talk about how Mike was able to help some recent clients in our Problem Solver segment.

To Follow Along on John & Bev's Journey, Check Out Their YouTube Channel

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In this week’s episode of the Active Wealth Show, Ford dives deep into the topic of inflation and explore effective strategies to combat its impact on your financial well-being. Ford examines how inflation affects various aspects of our lives, from the cost of groceries to housing and beyond, and lists the six ways to combat inflation starting today!

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On this week’s show, Ford and Sam share a list of mistakes to avoid when preparing for retirement. Plus, if you don’t think you will ever retire, we explain all the reasons why you still need a plan for your financial future.

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On this week’s show, Ford and Sam discuss the recent news about Wells Fargo overcharging investment accounts. Plus, banks are pushing certificates of deposit (CDs) on their customers – we present some alternatives for protecting and growing your safe money.

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On this week’s show, Ford and Sam define and explain two important financial terms – beta and standard deviation. Balancing risk and reward is a fundamental aspect of investing, so on this week’s show we discuss strategies that savvy investors are using to better prepare for their retirements.

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On this week’s show, Ford and Sam highlight seven reasons why having a tactical, actively-managed portfolio is a good idea for your retirement. They also discuss the looming concerns regarding Social Security and the importance of having a plan for income and taxes.

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Explore energy-saving tips for every budget, and learn solutions that go beyond the basics. Tune-in for ways to reduce your electric bill beyond switching off lights and taking shorter showers.

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On this week’s show, Ford welcomes back VP of Annuity Sales Josh Lumme to discuss why Fixed Indexed Annuities are being used by more pre-retirees and retirees than ever before.

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On this week’s show, Ford discusses different types of investing and suggests using certain strategies to better manage risk within your retirement portfolio. Plus, Generation X is largely unprepared to enter retirement. We share key figures and discuss how you can catch-up if you are feeling left behind.

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On this week’s episode, Ford shares how he helps people cut costs by building fee-efficient retirement plans and making sure that a proper will and estate plan is in order. We also discuss a recent story about Aretha Franklin and a will found in her couch.

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Ford explains what you need to be doing if you are in the retirement redzone. People within 5 years of retirement, or those who have just retired in the last 5 years should be considering these key strategies to maximize income during their golden years – listen-in to learn more!

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Ford and Sam open the listener mailbag to answer more questions from Activators who have written to us here at Active Wealth Management. Listen-in to hear strategies for eliminating a significant portion of taxes and fees from your retirement plan.

Let us help you take control of your financial future!

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This week, Ford takes some financial tips from the Oracle of Omaha himself, Warren Buffet. He will share five rules of investing that can help make your retirement live up to your expectations. Plus, we will talk all about annuities and how one particular type can help you protect and grow your wealth.

Let us help you take control of your financial future!

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On this week’s show, Ford and Sam open up the listener mailbag and answer your questions. Inflation, Social Security, retirement income – no topic is off limits!

Plus, how are rising prices affecting your travel plans this summer? We take a look at the numbers and share some tips to minimize the impact on your budgets.

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On this week’s show, Ford and Sam explain how you can take steps to increase your retirement income potential and protect your hard-saved money from market volatility. Plus, when one spouse passes away, they often leave behind financial burdens for their loved ones. Ford explains how you can plan in advance to avoid these troubles that widows and widowers frequently face.

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In recent years, appliance manufacturers have put more emphasis on creating products that use
less water and energy than older appliances. These energy-efficient appliances can save you
money on your utility bills, so consider replacing old appliances with newer models.

Alternatively, you can look for lower-cost ways to reduce your utility expenses, such as taking
shorter showers or washing your clothes in cold water. You can also lower energy costs by
covering outlets and regularly replacing your air filter. This will put less stress on your heating and
cooling systems and potentially lower your energy bills.

Produced by Matt McClure

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On this week’s show, Ford and Sam share two quotes of the week before providing a travel update for Memorial Day Weekend. Plus, we dispel common retirement myths and give some important information on Social Security for 2024 and beyond.

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Produced by Matt McClure

In rare situations, refinancing could be a good idea for people to save on their monthly payments… even in today’s high interest rate environment. That’s the topic of this week’s Cost Cutter vignette

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Ford and Sam share a wise quote of the week before detailing the latest market update including new information about rising interest rates and the national debt. Plus, do you want to master your cash flow in retirement? Ford outlines how you can take control of your finances and win with your money.

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On this week’s show, Ford and Sam go over some bad financial habits that could put your retirement at risk. Then, Ford details some lucrative alternatives to bank CDs before reviewing a list of proactive steps you should be taking to improve your retirement plan.

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Ford has a one-on-one conversation with Josh Lumme, Vice President of Annuity Sales and Marketing with Vertical Vision Financial. Josh helps explain why insurance companies are able to deliver such attractive investment options in 2023.

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Ford interviews Gus Morris, who spent more than three decades officiating college football in the SEC. Check out his new book at: www.TheFootballBook.com

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Ford interviews an annuity expert to help explain why insurance companies are able to deliver such attractive investment options in 2023. We also share our quote of the week and explain why now could be the best time to get more defensive with your retirement savings.

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Ford Stokes lists the top concerns that retirees and pre-retirees are worried about, and offers solutions to these obstacles we all face. It’s time to work with an advisory team who has your family’s best interests in mind.

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On this episode, Ford and Sam help answer one of the questions they get the most – will Social Security be around when I retire? They also explain what “The Widow’s Tax” is and why the solution is a having a strong income plan that is established in advance.

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An interview with Rohan Ganduri, Assistant Professor of Finance at Goizueta Business School at Emory University. Conducted by Retirement.Radio Network Producer Matt McGlure.

Rohan outlines the recent bank failure at Silicon Valley Bank while explaining what you can do to protect your hard-earned money from a potential banking crisis.

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Ford and Sam outline the recent bank failures at Silicon Valley Bank and Signature Bank while explaining what you can do to protect your hard-earned money from a potential crisis. Also, your retirement nest egg may be smaller than you think – Ford explains how to kick the IRS out of being your partner in retirement.

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On this week’s show, Ford explains how you should navigate one of the most important retirement decisions – when to take Social Security. He also breaks down what you need to be doing to minimize fees inside your retirement portfolio.

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Ford and Sam share the quote of the week and discuss the importance of taking action with regards to your financial future. Then, they explain how to defuse the retirement tax bomb inside your portfolio and detail how to convert money into tax-free accounts.

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On this week’s show, we help listeners get started on improving their retirement plans with simple and practical adjustments. You will also learn how to delete the fees you could be currently paying on a significant portion of your portfolio. We also share a list of top U.S. travel destinations for retirees.

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Even if you already have a retirement plan in place, it’s important to have it reviewed and checked for necessary adjustments on an annual basis. Visit our website to schedule your free, no-obligation consultation, and find out how much you could save today.

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On this week’s show, Ford and Sam share important updates regarding the new Secure Act 2.0 and explain how it could impact your retirement plans moving forward.

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On this week’s show, Ford explains how he can help people manage risk in retirement. Did you know that working with a financial advisor could actually save you money in fees – what are you waiting for?

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On this week’s show, Ford explains how you can delete taxes you would be paying during retirement. He also discusses reducing fees with a bond replacement and what else you can do to delete unnecessary expenses that are affecting your monthly budget.

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Ford takes a look back at 2022 and discusses how to move forward from the inflation and market volatility that affected pre-retirees and retirees over the last twelve months.

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On this week’s show, Ford shares some important updates about social security and your retirement accounts. Then, we get into our financial checklist that will help you make 2023 your best year yet.

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Ford explains how you can take better control of your retirement savings and stop the bleeding in your accounts. We also go over a list of cost-cutters for the holiday season.

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On this week’s show, Ford goes over a list of financial new year’s resolutions that he can help you keep. He also highlights a list of fears that people have about retirement. In 2023, Active Wealth Management wants you to be prepared, not scared!

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Ford Stokes welcomes the GOP candidate for senate in the state of Georgia, Herschel Walker, as he prepares for a runoff election on December 6th. Ford also explains some important strategies for saving money and eliminating fees you could already be paying as you prepare for and enter retirement.

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Ford discusses the midterm elections and an upcoming runoff in Georgia for the U.S. Senate. Then, he explains one of the most overlooked parts of retirement planning – the decumulation phase. Do you have an income plan in place for your retirement?

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On this week’s show, Ford explains why there has never been a better time to invest in a fixed-indexed annuity and strengthen your income plan for retirement. You will learn how interest rates affect you and how working with a financial advisor can save you significant money on fees.

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The year is flying by and it’s time to start planning for financial success in 2023. This week, Ford discusses some strategies to eliminate your income gap, looks at the new IRS tax brackets and much more!

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On this week’s show, Ford welcomes Bonnie Dobbs as a guest to discuss Medicare changes and updates for 2023. He also shares the 2023 cost-of-living-adjustment (COLA) and explains what this level of inflation means for retirees.

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Ford explains how you can get to the guarantees during volatile periods in the market. You will also hear audiobook chapters from Annuity 360 to help you understand how to create your own personal pension.

It’s important to have your finances reviewed by a professional to ensure you are on track to meet your financial goals – so get in touch with Ford today!

Are your retirement savings safe and protected from loss? Are fees holding-back your portfolio?

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Ford explains nine strategies that will help you live comfortably during retirement. He will also answer some of your biggest questions about annuities. It’s important to have your finances reviewed by a professional to ensure you are on track to meet your financial goals – so get in touch with Ford today!

Are your retirement savings safe and protected from loss? Are fees holding-back your portfolio?

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Ford details a list of five important things to own during retirement. We also explain some important Medicare information in this week’s right or wrong segment, and review some important rules of thumb for managing money during your golden years.

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On this week’s show, Ford talks about some of the most common retirement misconceptions and dispels some major myths about planning for your financial future. He also details some financial risks you should consider heading into retirement.

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The Smart Retirement Plan series continues with a discussion of Smart Review and Smart Income Streams. Have you heard from your advisor lately? It’s important to have your finances reviewed at least once a year to ensure you are on track to reach your goals.

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This week we continue our smart retirement plan discussion by explaining some tax strategies to consider when building your financial plan. Listen to this episode to learn about the 4% Rule, the Rule of 100 and the Rule of 72.

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Ford Stokes continues his discussion of The Smart Retirement plan by diving into Smart Safe, Smart Risk and Smart Tax Strategies.

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Ford Stokes discusses the first three components of a smart retirement plan. Tune-in over the next few weeks to hear the complete smart retirement plan series.

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Ford explains why you should have your personal finances reviewed annually to ensure you are on the right path. Consider replacing your bonds with annuities to delete portfolio fees and guarantee yourself an income for life.

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AWS Full Show 7.28.mp3: Audio automatically transcribed by Sonix AWS Full Show 7.28.mp3: 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, […]

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Do you have a smart plan in place for your future in retirement? With volatility on the rise, Ford offers solutions and strategies for reducing what you will owe the IRS, and generating enough income to last throughout your entire retirement. Book a free consultation now at ActiveWealthShow.com Call Ford today at 770-685-1777 APPROVED_AWS_FullShow_061722.mp3: Audio […]

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On this week’s show, Ford shares his thoughts about Memorial Day and plays clips from his conversation with Laura Ingraham of Fox News. Listen in live on AM920 The Answer Saturdays at noon; or listen to the podcast on iTunes, Google Podcasts, Spotify, or wherever you listen to podcasts. If you are interested in getting […]

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Are you prepared to enter and endure retirement in a volatile market? On this week’s show, Ford talks about a big investing mistake to avoid and offers some good strategies for building wealth during a down market. If you are interested in getting a complimentary portfolio review, you can reach The Active Wealth Team and […]

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It’s essential not to make emotional decisions during a time of economic volatility. The key to a successful retirement is sticking to a tested plan that includes tactical management strategies. This week on the Active Wealth Show, Ford breaks down how to fight inflation and volatile markets. If you are interested in getting a complimentary […]

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On this week’s show, Ford responds to a story about the current state of affairs with housing and mortgage costs. He also discusses some key strategies for building a successful retirement during volatile times. If you are interested in getting a complimentary portfolio review, you can reach The Active Wealth Team and Ford at ActiveWealth.com […]

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On this week’s show, Ford reacts to a couple of news stories related to inflation and retirees traveling. He also explains how Active Wealth Management implements structured notes as part of a Smart Financial Plan. If you are interested in getting a complimentary portfolio review, you can reach The Active Wealth Team and Ford at […]

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There are a lot of misconceptions about annuities. On this week’s show, Ford debunks some common myths, discusses a market outlook for Q2, and makes two exciting announcements. If you’ve ever had any questions about annuities, this episode is a must-listen! You can catch the Active Wealth Show every Saturday from 12:00 – 1:00 PM […]

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On this week’s Active Wealth Show, Ford explains exactly how and why annuities work. If you have bonds dragging down your portfolio, or an annuity that isn’t meeting your expectations, reach out now and schedule your free consultation. You can catch the Active Wealth Show every Saturday from 12:00 – 1:00 PM on AM920TheAnswer (WGKA […]

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On this week's Active Wealth Show, we play select chapters from Ford's book, Annuity 360. You can request a free copy of Annuity 360 at www.Annuity360.net or by calling Ford at (770) 685-1777. The Active Wealth team is here to help you grow and protect your wealth. You can catch the Active Wealth Show every [...]

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On this week’s Active Wealth Show, we play select chapters from Ford’s book, Annuity 360. You can request a free copy of Annuity 360 at www.Annuity360.net or by calling Ford at (770) 685-1777. The Active Wealth team is here to help you grow and protect your wealth. You can catch the Active Wealth Show every […]

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https://vimeo.com/695915257 On this week's Active Wealth Show, Ford lists several concerning things that other financial advisors won't often tell you. You can schedule a free consultation with Ford now at ActiveWealth.com. Or call Ford at 770-685-1777. Schedule a conversation with Ford now: ActiveWealth.comWatch more episodes: www.ActiveWealthShow.com/podcastRequest your free copy of Annuity 360: www.Annuity360.net Important Things Most Advisors Won't [...]

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On this week’s Active Wealth Show, Ford lists several concerning things that other financial advisors won’t often tell you. You can schedule a free consultation with Ford now at ActiveWealth.com. Or call Ford at 770-685-1777. Schedule a conversation with Ford now: ActiveWealth.comWatch more episodes: www.ActiveWealthShow.com/podcastRequest your free copy of Annuity 360: www.Annuity360.net Important Things Most Advisors Won't Tell […]

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On this week’s show, Ford gives a market update and highlights some positive indicators in the economy. We also debut a new segment, “The Rate is Right”, and give details on the latest structured note offerings. The latest structured note comes from UBS for the month of April and is offering a minimum of 12.75%! […]

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On this episode of the Active Wealth Show, Ford explains how annuities work and why a Fixed Indexed Annuity may be right for you. Call Ford now at 770-685-1777 or book your free consultation at ActiveWealth.com. We will give you a free portfolio analysis and a free financial plan to your 95th birthday. We’ll see you […]

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On this episode of the Active Wealth Show, Ford introduces a new structured note investment available in March. He also covers the markets reacting to what is happening in Ukraine, and how to prepare your portfolio for uncertain times. Got questions about structured notes? Call Ford now at 770-685-1777 or book your free consultation at […]

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On this week’s show, Ford answers some questions from Activators before detailing how you can get started on your retirement plan today. Activators, if you’d like to get more information you can call us at (770) 685-1777 or go to www.ActiveWealthShow.com and set an appointment. We will give you a free portfolio analysis and a […]

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On this episode of the Active Wealth Show, Ford gives a market update and discusses how geopolitical events have affected the markets historically. You will also learn how a Roth IRA can be an investor's most valuable tool in their portfolio.Activators, if you’d like to get more information you can call us at (770) 685-1777 [...]

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On this episode of the Active Wealth Show, Ford and Sam discuss how inflation has impacted every part of our lives, including Super Bowl Sunday!Then, Ford explains the importance of having a plan for retirement, and what working with private wealth management looks like.Activators, if you’d like to get more information you can call us [...]

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https://vimeo.com/673903276 On this week's Active Wealth Show, Ford gives the listeners some important updates regarding the markets and the U.S. economy, before breaking down all the elements of a smart financial plan. Active Wealth offers a completely free portfolio and retirement analysis to all listeners; you can schedule a time to talk at ActiveWealth.com. We'll [...]

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https://vimeo.com/671463160 This week on the Active Wealth Show, Ford discusses a new structured note offering for investors, answers more questions from listeners and highlights the importance of the 4% rule and the rule of 100. Activators, if you’d like to get more information you can call us at (770) 685-1777 or go to www.ActiveWealthShow.com and [...]

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https://vimeo.com/669646665 This week, Ford answers questions sent in from Activators that are pre-retirees and retirees. He also outlines all the elements of a smart financial plan for 2022 and beyond. Activators, if you’d like to get more information you can call us at (770) 685-1777 or go to www.ActiveWealthShow.com and set an appointment. We will [...]

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https://vimeo.com/666298418 On this week's episode of the Active Wealth Show, Ford explains how you can implement different tax-advantaged strategies to build more wealth and ensure a successful retirement. As always, Activators can get a retirement plan mapped out until their 95th birthday absolutely for FREE; just schedule a time to talk below or call ( [...]

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https://vimeo.com/663990175/08302d9843 This week on the Active Wealth Show, Ford interviews Dr. Chip Houston and Ryan Moore of North Cobb Christian School about their remarkable business program for young students. Then, Ford reviews the 2022 retirement resolution to help all you activators start 2022 on the right foot. As always, Activators can get a retirement plan [...]

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dfgsd This week on the Active Wealth Show, Ford discusses a great alternative to bonds, before diving into structured notes and how you can experience market-like gains while protecting your investments at the same time.Book your free no-obligation consultation: ActiveWealth.comWatch more episodes: ActiveWealthShow.com/podcastRequest your free copy of Annuity 360: Annuity360.net New Year's Resolutions for a [...]

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https://vimeo.com/655848169 This week on the Active Wealth Show, Ford explains why inflation has reached record levels, gives the latest market update, and discusses what to expect with gas prices in the months ahead. Then, he breaks down retirement of the past versus retirement today. As always, Activators can get a retirement plan mapped out until [...]

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https://vimeo.com/653749798 On this week's Active Wealth Show Ford discusses the most common misconceptions about retirement as well as: the latest market and economic newsthe post-pandemic economic recoverythe seven financial headwinds that retirees can expect to faceinvesting with structured notesrunaway inflation and Dollar Tree raising prices to $1.25supply chain issues affecting the 2021 holiday shopping season [...]

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https://vimeo.com/649543105 In this week's episode, Ford plays some chapters from his book Annuity 360, and explains how to eliminate unnecessary risk from your portfolio while also setting yourself up with an income for life. You can download Annuity 360 for free at www.Annuity360.net. As always if you'd like to get more information you can call [...]

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https://vimeo.com/647798936 To get more information on how to build a Smart Financial Plan during this period of rampant inflation, go to www.ActiveWealth.com or call (770) 685-1777). We're here to help #Activators during this difficult time in our economy. Building a Smart Financial Plan During Inflation AWR SHOW: Audio automatically transcribed by SonixBuilding a Smart Financial [...]

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Active Wealth Show Growing Your Net Worth with Structured Notes

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Today’s show is all about maximizing your social security and using it to your best advantage, so let’s begin by clearing up some of the most common misconceptions we hear regarding social security. As a reminder, my radio and podcast listeners get a free financial plan to their 95th birthday and a free portfolio analysis. You will receive a Social Security Maximization Report at no cost to you when you book an appointment with us. Just visit www.activewealth.com or call (770) 685-1777.

Common Misconceptions Regarding Social Security:

Everyone’s social security benefit is the same amount
Your benefit amount is fixed forever
You are stuck with the benefit offered to you
You should draw from social security as soon as possible
Your benefit will increase every year

Everything You Need to Know About Social Security AWR SHOW 110521_x.mp3: Audio automatically transcribed by SonixEverything You Need to Know About Social Security AWR SHOW 110521_x.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Active Wealth management is not affiliated with or endorsed by the Social Security Administration or any other government agency, registered investment advisors and Investment Advisor 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.

Producer:
Welcome to the Active Wealth show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor 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, invest

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This week on the Active Wealth Show we welcome Bonnie Dobbs from Medicare and Other Red Tape as we discuss Medicare and open enrollment. We also cover what components make up a Smart Financial Plan, and how you can implement them into your retirement.

You can reach us at www.ActiveWealth.com or give us a call at (770) 685-1777 to set an appointment.
To get in touch with Bonnie Dobbs you can go to www.MedicareandOtherRedTape.com or call (770) 373-7541.

AWR SHOW 102921.mp3: Audio automatically transcribed by SonixAWR SHOW 102921.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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.

Producer:
Welcome to the Active Wealth show with your host! Ford Stokes Ford is a fiduciary and licensed financial advisor 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 investing and now your host Ford Stokes

Ford Stokes:
And welcome activators to the Active Wealth Show. I'm Ford Stokes, your chief financial advisor and I am joined by a very special guest who I absolutely adore. I think she's amazing. Her name is Bonnie Dobbs and she's with Medicare and other red tape, and she helps all of our clients with how to plan for Medicare, how to get either Medicare supplement insurance and Medigap insurance or Medicare Advantage. Bonnie Dobbs, welcome to the Active Wealth Show.

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AWR SHOW 102321 Transcript: Audio automatically transcribed by SonixAWR SHOW 102321 Transcript: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

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Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to 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..

Producer:
Welcome to the Active Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor 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 investing and now your host Ford Stokes

Ford Stokes:
And welcome the Active Wealth Show activators on Ford Stokes for Chief Financial Advisor, and I'm joined by our executive radio producer Sam Davis. Sam, welcome everybody the weekend for us, will you?

Producer:
Welcome to the weekend activators. It's a beautiful autumn weekend in Georgia and I hope you all get outside like I will be outside and enjoy that good weather.

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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.

Producer: [00:00:20] Welcome to the Active Wealth Show with your host! Ford Stokes Ford is a fiduciary and licensed financial advisor 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 investing and now your host Ford Stokes

Ford Stokes: [00:00:42] And welcome to the Active Wealth Show activators. I’m Ford Stokes your chief financial advisor and I’ve got Sam Davis, our esteemed executive radio producer, here with us, and he’s also the ambassador of the weekend. So Sam, do your thing.

Producer: [00:00:56] Welcome to the weekend activators. Lovely weather in the Atlanta area this weekend, so make sure you get outside. That’s where I’ll be for sure.

Ford Stokes: [00:01:03] Absolutely. And it’s, you know, you can stay inside and watch Georgia and Georgia Tech football and the Atlanta Braves in the National Championship League Series, right? So NLCS, that’s a pretty good stuff.

Producer: [00:01:16] Yeah, absolutely. I’ll be watching a little bit of baseball, be playing a little bit of golf, enjoying the great outdoors and having a good weekend. I hope our activators do the same.

Ford Stokes: [00:01:25] Absolutely. So we’ve got a really big show today. We’re going to talk about the Social Security Administration came out with a cost of living adjustment. We’re going to talk about an incredible market update and we’ve got something important that happened with this market update. And then we’ve got an inflation demonstration and I think is very detailed that you’re going to like to understand and and listen to what we’re talking about this week in history. We’ve also got we’re going to talk about the three really three big rules to help guide you to a successful retirement, three rules you should follow for a successful retirement. And then we’re also going to, of course, have our final countdown and recap it all right now as an homage to my radio hero, Rush Limbaugh. I’m going to I’ve got information hot off the presses and I am rustling my papers just to make sure that, you know, this is a big deal. So the Social Security Administration cost of living adjustment will be five point nine % in 2022. The Social Security Administration announced it on Wednesday. The five point nine % cola, or cost of living adjustment, will be the biggest boost to Social Security beneficiaries checks in about 40 years. That’s almost four decades in 2021. The Social Security cola was one point three % as an example, and now it’s five point nine %. The last time the annual adjustment came close to the 2022 figure was twenty nine, when the beneficiary saw a 5.8 % increase.

Ford Stokes: [00:02:53] More than 64 million Social Security beneficiaries will see boosts in their monthly checks starting in January. Also, I want to be clear about something to this is pretty interesting. Nine in 10 people age 65 and older are receiving a Social Security benefit as of the end of last year, so that was pretty remarkable. So let’s dive into this a little bit more. The adjustment is a response to consumer prices in the United States that have jumped at their fastest pace in years. It is tied to the Labor Department’s Consumer Price Index. Specifically, it’s tied to consumer pricing index CPI, which is five % higher than CPI. That’s–you CPI. Basu is basically what we call an I’m doing air quotes here, folks. They call it the headline CPI, which is what all of the news organizations use. Cpi DC is five % higher, so if the if the CPI was three % as an example, CPI was three %, the CPI e would be three point one five %, it’s five % higher and the consumer price index get this rose five point four % in September from a year earlier. Inflation is accelerated this year as the global economy recovers from pandemic driven lockdowns. Early on, the price gains were fueled by rebounding airfares, restaurant meals and other items whose demand collapsed in 2020.

Ford Stokes: [00:04:18] More recently, the shortages of products and supply chain challenges have added to the gains. Consumer price index data released on Wednesday showed that prices jumped more than expected last month. Housing prices firmed in food, especially meat and eggs, cost consumers more. The maximum amount of workers earnings subject to the Social Security tax will also increase to one hundred and forty seven thousand from one hundred and forty two thousand eight hundred. The administration set for many people who receive Social Security, the monthly check represents a significant portion of their annual income. In fact, a majority of Americans say their Social Security income benefit is either the number one or number two source of income during their retirement years. Among the beneficiaries, 37 % of men and forty two % of women receive at least half of their income from Social Security, according to an administration fact sheet, and 12% of men and 15 % of women rely on the checks for at least 90% of their income. We don’t want that to happen to you. We want to make sure that you don’t outlive your money where all you’re having to do is live on Social Security. We want you to not make big mistakes as you’re planning for retirement, want to do everything we can to protect and grow your wealth, and also help you generate a retirement income you can never outlive. Did you know also that you can generate your own pension with a product called a fixed indexed annuity? We can help you do that.

Ford Stokes: [00:05:38] It’s also a great bond replacement strategy, and we’ll talk about more of that today. We’re also going to talk about the three financial rules you need to follow to build a successful retirement and then also further on this cost of living adjustment of 5.9% that is being offered that starts in January of 2020 to older Americans. People with disabilities and children and spouses of deceased recipients depend on benefits to afford essentials, including food, housing, utility utilities, et cetera. Although some said they welcome the increased benefit, they also worry that it might not be enough to offset inflation and the rising cost of Medicare premiums for Medicare Part B, which covers doctor’s visits and outpatient care, are deducted from Social Security checks. I want to be clear about that. Many folks think that, hey, I’m going to make $3000 a month amongst the security benefit. I’m gonna be fine. They don’t understand that the Social Security, Medicare Part A and Part B are deducted from the Social Security checks directly. Nearly nine out of 10 people age 65 and older, as I talked about before receiving a Social Security benefit as of the end of last year. What that means is that most people are not waiting till full retirement age for retirement age either 66 and a few months or sixty seven years old.

Ford Stokes: [00:06:50] If you were born in 1960 or later, that is a huge concern, and almost nobody’s making it age 70 on Social Security, on their Social Security benefits. So what we’d encourage you to do is try to wait a little bit longer. You get eight % a year in additional Social Security benefit a year for every year you wait past your full retirement age. The longer you wait with Social Security, the more you’re going to make over time. Also, the CDC that’s based here in Atlanta came out with a study that said that if both spouses live to be age sixty five, there is literally over a 50 % chance that one of them is going to live to be at least be aged 90. And guys, let’s just face it, it’s going to be the ladies, right? We need a plan for that eventual deal. Also, you need a plan. Have a plan for your retirement income gap that is created when one spouse passes away. When one spouse passes away, you’ve got a loss of thirty three % of your Social Security benefit, at least. So imagine this you’ve got a husband who worked his whole life outside the home and you’ve got the wife who worked inside the home, raising kids and worked harder than the husband did. Right? Kind of get an amen, ladies, and you’re driving around Atlanta or listen to us on Active Wealth Show or on Spotify or Stitcher or Google Play or iTunes.

Ford Stokes: [00:08:08] There’s no doubt about that. The women work incredibly hard, and let’s say that the gentleman is making $30000 a year in a Social Security income benefit and the spouse his wife is making fifteen thousand dollars a year, which is 50 % of his. So that’s forty five thousand of the household. If the gentleman dies, let’s say he dies at age 90, but the wife is still living well on the day he passes away. She stops getting her Social Security benefit check, and she gets his. So in other words, they lose fifteen thousand. Therefore, fifteen thousand is thirty three % of forty five thousand, and she’s getting thirty thousand. But she’s not making the same kind of Social Security income she was making, and you have a plan for that. And if you don’t have a plan for that, I would encourage you to go ahead and pick the phone up and give us a call. At (770) 685-1777 that’s (770) 685-1777. Also, we’re happy to help you. All you have to do is schedule an appointment by visiting Active Wealth Show. Click the set an appointment button in the upper right corner and you can just click that and we’re happy to help you if you’re looking to get a Social Security maximization report and a retirement income gap analysis, in addition to a portfolio analysis and a financial plan, your ninety fifth birthday that also includes a Roth latter conversion plan.

Ford Stokes: [00:09:33] All that was a mouthful. All you have to do is visit Active Wealth Show. Com And we’ll give that to you. That is literally a fifteen hundred dollar value that we’re offering to our activators. Absolutely at no cost to you. Completely free. And we do that on the front end because we’re fiduciaries even before we start working with you. That means we have to put your needs ahead of our own and we want to do everything we can to make sure that we’re protecting your interest and helping you. Build a successful retirement, we want to build a fee efficient market, efficient and tax efficient portfolio for you so you can enjoy that retirement and you don’t have to look at the stock ticker every day. We want to do everything we can to help you. And again, we just encourage you to reach out to us at active welcome and we’ll get going. So the rest of the show today, we’re going to talk about our inflation demonstration. We’ll also do a market update. We just felt like it was way too important. We had to go ahead and share that incredible news on a five point nine % cost of living adjustment.

Ford Stokes: [00:10:32] It’s going to add to the Social Security income benefit for everybody. You’re going to get a five point nine % uplift. I would argue that it’s not the same. It’s not keeping pace with inflation because inflation is going nuts. I mean, if you try to buy milk or eggs or bacon or beef in the grocery store, you’ve seen runaway prices. If you’re trying to buy gas, you know what? We had one. We had a dollar seventy nine a gallon when Trump was president, and now we’re over $3. It’s just literally ridiculous. Part of it is, too, is we’ve got a huge labor shortage because everybody was living off the stimulus checks. We don’t need to get into this living wage stuff. We need to get back to what America does, which is America goes to work and America dreams, dreams big and we work hard. That’s what America is built on. We weren’t built on people staying at home and cashing a check from the government. That’s just not the way it works. We want to help you build a successful retirement. We come back from the break. We’re going to talk about, we’re going to get a market update. We’ve also got a very detailed inflation demonstration. We’re going to talk through and we’re talking about the three financial rules you need to follow for successful retirement right here on AM 920 The Answer, you are listening to Active Wealth Show.

Ford Stokes: [00:12:05] And welcome back activators, the Active Wealth Show on Ford Stokes for chief financial adviser of Got, our executive producer Sam Davis with us, and we’re going to give you a quick market update and an inflation demonstration on this segment, and this is a really important one.

Producer: [00:12:27] Your Active Wealth Show market update.

Ford Stokes: [00:12:30] So jobless claims fall below 300000 for the first time since the pandemic began. In another sign that the jobs market is getting closer to its old sell, first time claims for unemployment insurance totaled two hundred and 93,000, the best level since March 14 2020, which saw two hundred fifty six thousand jobless claims. Just as the COVID 19 spread intensified, the continued reopening of the world economy has led to a big demand on energy. One of the reasons for the rising cost of oil, which rose to a seven year high this week, now priced at more than $80 a barrel. Also, I would say that our buddy Joe Biden closing down different pipelines didn’t help the Keystone Pipeline killing that. That didn’t help either. The U.S. national average for a price of gasoline also rose to a seven year high this week, with the national average being three dollars and twenty seven cents a gallon. We were net positive under President Trump and we are net negative under whatever our president is right now. Energy demands have led to rising costs not only in the U.S. but also around the world. Prices for natural gas and coal have increased significantly in labor news. US workers are trickling back into offices at the highest rate since the pandemic began. Office building use has gone up after many buildings and office parks were sitting mostly empty during the pandemic in 2020. And now for our inflation demonstration.

Producer: [00:13:59] It’s time for an Active Wealth inflation demonstration.

Ford Stokes: [00:14:06] And Sam, let me bring you in here. Let’s talk about this a little bit. So when low supplies met with high demand that spells high costs for consumers on this week’s inflation demonstration, you know, you and I are going to talk about how we’re going to share a list of goods that are expected to have low and possibly no inventory as we work our way into the holiday season. You’ve got a special outlook on this holiday season as well. You think this holiday season will be much more robust than last year?

Producer: [00:14:30] Yeah, I mean, how could it not be last year? Still, so many people with concerns of the pandemic were not traveling for the holidays. That gives a hit to the economy. They were not buying as much because there was so much unemployment, a lot of jobless claims as we continue to update the activators every week. Those were some tough months that we were going through, and I think this holiday season is going to be one of the biggest of the last few years. You know, it’s just like, think about how big, you know, football season has felt this year compared to last year, just because the world is open again and everyone sort of feels like they were robbed of those experiences during 2020. Not a good holiday season for a lot of folks. Well, it’s going to be big.

Ford Stokes: [00:15:13] Also, college football season, especially the state of Georgia. I know all the Georgia fans are very hopeful and you know, Georgia Tech’s had some good wins as well. And so I think there’s a lot of positivity in our state. And it’s not just because of the performance of football teams, obviously are. We’re in a right to work state. There’s a lot of momentum with companies and it is good to see. I mean, even in the King Queen building, we’re seeing more people moving in to the buildings, which is great. Here in our office, we’re on the twenty ninth floor of the King building right there on perimeter near Perimeter Mall, and we overlook Georgia four hundred and get to see our commute home. But let’s kind of get back into this inflation demonstration stuff. So. Supply issues have been made worse by the energy crises in Mainland China and Europe as well. Continued increases in shipping costs. Capital Economics noted that the number of ships waiting outside Chinese ports has jumped again in recent weeks. Additionally, factory shutdowns in Vietnam, where many firms moved manufacturing to amid the U.S. China trade dispute, have also affected the production of many goods.

Ford Stokes: [00:16:22] And here’s the list of goods have been affected in the lead up to the holiday shopping season. This is per a CNBC business report in food expected food costs both in restaurants and grocery stores should arise as supply shortages continue. This will especially be noticeable in Europe due to rising energy prices. Also, fertilizer shortages have caused a cascade effect in exasperated this issue. The number two carbonated beverages, dry ice and packaged goods. Fertilizer shortages have also led to a carbon dioxide shortage. Isn’t that interesting? Co2 is used to give certain drinks their bubbles, but is also used in packaged and frozen goods to keep products fresher for longer. And number three, and this one affects me because I get to get a new iPhone because my old one’s cracked. I’m going to get the 13 here, I think. But iPhones, electronics and toys. Several Apple manufacturer suppliers have suspended operations at their factories in China. The entire electronics industry is suffering from a chip shortage that has been ongoing since 20 20, and there are a lot of people that like to get new iPhones, don’t you think, Sam during the Christmas holidays?

Producer: [00:17:33] Yeah, absolutely. It’s got to be one of the premier Christmas presents that you could find under your tree, I would think.

Ford Stokes: [00:17:40] Yeah, especially for all you millennials out there. So I would just do everything we can to make sure you get your iPhones early and often and get and plan for Christmas earlier. This is October. Don’t wait till the last minute. The number three is and number four is holiday decorations, huge demand for decorations is expected this holiday season. The prices will be higher due to low supply and rising shipping costs. And you also get a head start on your holiday shopping to avoid paying too much for the decor. My wife is literally ready November 1st. She’s skipping Thanksgiving altogether and just loading up on Christmas already. And I think there’s more wives doing. I think it’s like a huge movement. What do you think about that?

Producer: [00:18:23] There have been pumpkin decorations for the last two weeks at my house. The moment October hit pumpkins were everywhere, just in my house.

Ford Stokes: [00:18:34] How to get your pumpkin on? Yeah, if I like don’t you dare admit that you don’t like pumpkin spice. Anything like I’m not a big pumpkin spice. Anything, guy. No, don’t dare admit it.

Producer: [00:18:44] My wife says during October, if pumpkin spice is an option, pumpkin spice is the way we’re going, right?

Ford Stokes: [00:18:50] So activators do me a favor. Don’t tell anybody that I’m not a big pumpkin spice guy. All right. The number five is sports shoes and sportswear, and I’ve kind of run into this too, because I play Alta Tennis and I play a little bit of golf. And they were out of some of my favorite shoes from Swiss and ASICs on the tennis side, and I’ve been dragging my toe a little bit and when I’m serving and worn a hole in my shoes and it took a while for me to get in the new Swiss stuff, so I think it was the case. Was legends what I got?

Producer: [00:19:26] Yeah, the footwear. One’s really interesting. We’ve actually had that footwear shortage for quite a while. Early on in the pandemic, so many people wanted to get outside, start running, start hiking because it was some of the only activities they could do that caused a shortage. Plus everything else that’s been going on with the economy the last couple of years, and that’s just a lot of shoes to not have.

Ford Stokes: [00:19:45] Yeah. In this report that you researched, it’s pretty amazing. Factory shutdowns in Vietnam have led to a production loss of one hundred and fifty million pairs of shoes, according to Bank of America estimates. Are you kidding? One hundred and fifty million pairs of shoes, that’s unbelievable.

Producer: [00:20:02] That’s a pair of shoes for about half the country.

Ford Stokes: [00:20:05] Yeah, it’s unreal. And then automobiles, obviously, we know about, you know, the automobile shortage. Shortages have been ongoing since 2020 due to the chip shortage, and consumers opted for used cars driving up use vehicles. Factory shutdowns in Asia have made this even worse. And so that’s kind of your inflation demonstration for the week. What we’re going to do is we’re going to cover some week in history stuff when we come back. We’re also going to talk about the three rules, and I’ll just give you what those three rules are. I mean, number one is the four % rule number two is the rule of 72. And number three is the rule of one hundred. And we’re going to talk through those three rules in these last two segments. We’re going to give you some really cool this week in history. We’re going to have our final countdown as well. What we’re going to talk a little bit more about how to build a successful retirement, how to build that smart financial plan as well. That you know, that smart financial plan includes smart, safe investments with fixed indexed annuities. It includes smart risk investments with tactical asset allocation. It includes smart health decisions with Medicare supplement and or Medicare Advantage plans. And we we work with Bonnie Dobbs with Medicare and other red tape. She’s a fantastic human being. We love her, we love her whole team and we love partnering with her on anything Medicare. And if you’ve got a question about Medicare, we’ll get you in touch with Bonnie. All you have to do is reach out to us at Active Wealth Show and set an appointment with us and we’re happy to talk to you and introduce you to Bonnie.

Ford Stokes: [00:21:44] And the number four would be smart tax solutions you want to build, you know, a smart tax plan. So you want to have like Roth ladder conversions potentially invest in life insurance because Roth IRAs and life insurance are only to truly tax free investments out there. Many folks think that municipal bonds are tax free. They actually are not truly tax free because they interest from municipal bonds. Do you contribute to things like Social Security, income benefit, taxation and then also additional Medicare surcharges? So we want to be careful about what we’re saying is truly tax free. There’s only two types of investments out there. Again, to recap, it’s Roth IRAs and life insurance. I’ve got a gentleman. We’ll talk about him right when we come back from the break that is invested in a indexed universal life policy that’s going to generate a significant amount of tax free income for he and his family. And we’ll talk through that when we come back from the break. We’re so glad you’re with us this week. We’re going to we’re talking about the three financial rules you need to follow, at least these three financial rules to follow to build a successful retirement. We’re also talking about how to build a smart financial plan. With smart rest, smart, safe smart health and smart tax investment decisions. We’re going to talk even more about how to build that successful retirement. It’s tax efficient fee efficient and market efficient moving forward. And we’re going to have some really cool stuff on this week in history. I think you’re going to love it. Come right back to the Active Wealth Show right here on AM 920 The Answer.

[00:23:33] 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: [00:24:11] And welcome back, folks, to the Active Wealth Show, we’re so glad you’re with us this week, and we’ve got a couple really cool this week in history stuff for this segment. And Sam, I’m going to bring you in and let you share the information about Dwight D. Eisenhower being born on October 14th, 1890.

Producer: [00:24:29] Yeah. So Dwight D. Eisenhower, former U.S. president, former five star general, the supreme allied commander in World War Two. I mean, these are some pretty great resume items also raised. It was a big deal raised in Kansas, which I must say probably contributed to his success later in life. Although I will say he was born in Texas,

Ford Stokes: [00:24:52] But he was raised in Kansas where you were raised.

Producer: [00:24:54] That’s right, and I do remember going on a class field trip, maybe like 12 years old, we went up to Abilene, Kansas, and saw the Presidential Library his childhood home. Eisenhower is buried there. So it’s a great place. It’s a great place to visit. Cool small town in Kansas. So Dwight Eisenhower born this week in history 1890.

Ford Stokes: [00:25:20] That’s good stuff. Also this week in history? Well, first of all, let me just say this. Dwight Eisenhower was a bad man. He was awesome. Have you seen the memes, Sam, where you’ve got just Dwight Eisenhower? There’s five stars, and he didn’t have all these other medals, and then they show the general that that let Afghanistan go without any planning and all that stuff. Have you seen the comparisons? Because the general today has got like nine million medals all over his jacket? Yeah. And Eisenhower was like, I could care less because I’m just here to do a job.

Producer: [00:25:53] I haven’t seen those memes. You’ll have to you’ll have to send me a meme email.

Ford Stokes: [00:25:56] Yeah, pretty interesting. Pretty good stuff. All right. And this one is really important for my girls. So October 16, 1923 The Disney Brothers cartoon studio was founded eventually became Walt Disney Animation Studios from Oswald the Lucky Rabbit to Mickey Mouse to Snow White to the Seven Dwarves. Disney studios have brought life to hundreds of world renowned stories, and they continue to make movies almost one hundred years later. And, you know, stories are really important. I want to tell you a story about a gentleman who works here in Atlanta. He works for a major manufacturer, and he used to work at Goodyear and he and his wife, he’s an executive, and he and his wife made the decision that they were going to put $2000 away because they’re trying to limit the taxes that they’re paying and they’re putting $2000 away a month into an index universal life policy. I’ve got a four hundred seventeen thousand dollars death benefit to protect the family. But what’s interesting is when he retires that in 10 years later, at age 65, there’s going to be a significant amount of cash value that’s built up. But what’s even more interesting is he’s on pace to generate twenty six thousand five hundred and two dollars in tax free retirement income a year, starting at age sixty five. Just ten years later, he’s doing a ten pay. He pays two grand a month for 10 years. It’s two hundred and forty thousand bucks, but he’s able to generate twenty six thousand five hundred and two dollars a month, absolutely tax free, and it is absolutely one hundred % completely legal.

Ford Stokes: [00:27:35] It is part of the IRS tax code of Rule of seven and seven seventy seven oh two. These are called like Rule Seventy seven oh two plans because of the IRS code, and you’re able to generate that tax free income by taking loans against the policy that you don’t have to pay back. And also, there’s always a permanent death benefit as well, and we think that’s a big deal. And it’s also this isn’t some life insurance policy that’s going to expire. This is not a term policy. This is not something where you’re only going to do it for 10 years. And if you live beyond long, beyond the 10 years, you don’t get paid out of any money. And if you got an interest in this and you want to learn a little bit more about how to generate tax free retirement income starting the year you retire, then I would encourage you to reach out to us. At (770) 685-1777 that’s (770) 685-1777 and Deborah and her team are standing by to take her call. The other thing that I would encourage you to do is if you can’t remember the phone number, just remember Active Wealth Show and just check out Active Wealth Show. Com And we’re happy to work with you and at least get you a free retirement income plan.

Ford Stokes: [00:28:47] Absolutely no cost to you. We’re going to do it absolutely for free on the front end because we want you to make an informed financial decision. That’s really important. That’s getting in these rules. And so the first rule we’re going to talk about is the rule of one hundred, which basically helps you understand the risks you should be taking during retirement and try not to exceed it. And Sam, go ahead and put. Way, Chapter six, from my new book that talks about the rule of one hundred, and we’ll talk more about it right after this chapter is over. You’ve got an audio book chapter that’s available. My audio book is available on Amazon, and I would encourage you to go ahead and reach out to Amazon and go get that downloaded. It’s only like six bucks. And if you want a free copy of my book Annuity 360, all you have to do is go to annuity three sixty donut. That’s Annuity three 60k net. Go ahead and say I’m in Chapter six about the rule of one hundred. Chapter six The rule of one hundred big idea. You want to risk less as you get older because you have less time to make up any big losses as you get closer to your golden years, many financial professionals advise gradually reducing your risk. Retirees and pre-retirees don’t have the luxury of waiting for the market to bounce back after a dip.

Ford Stokes: [00:30:04] The dilemma is figuring out how safe you should be in certain stages of your life. For years, a commonly cited rule of thumb has helped simplify asset allocation. This rule states that individuals should hold a %age of their stocks that is equal to one hundred minus your age. For example, a six year old would have 40 % of their holdings in stocks and 60 % in fixed income products like bonds or fixed indexed annuities. Why you should follow the rule of one hundred Take our current example of a 60 year old at age 40. Your risk capacity is higher. You have more time to rebuild your wealth should you experience a dip in the market. However, at age 60, you can’t afford to risk as much of your portfolio in the market because the time horizon to rebuild your wealth is much shorter. Rule of one 20. Many financial advisors now advocate the rule of one 20 so they can get a significant rate of return for their clients and maintain management of the portfolio. I disagree with today’s market volatility. A retiree does not want to go back to work in a job making less than what they made before. They must consider following the rule of 100 or at least a 50 50 smart financial plan that is built equally with smart risk and smart safe investments. So if you guys enjoyed that chapter in Chapter six from my new book Annuity 360 and listen, Rule one basically states, that’s it.

Ford Stokes: [00:31:31] You just take one hundred, you subtract your age from one hundred, and whatever’s left over is the %age of your assets of your portfolio that should be at risk in the market. So if you’re 60 years old, you subtract, like we talked about in the chapter, you’re 60 years old and you subtract it from one hundred. That means only 40 % of your assets should be at risk. And many of you driving around or listen to us on the Active Wealth Show tax on ActiveWealthShow.com or on Stitcher or Spotify or iHeart Radio or Salem or Google Play or iTunes. I would just tell you this you need to not take 80 % risk in your portfolio. It is too risky for you. We don’t want you to have to go back to work at Wal-Mart and say, Hey, would you like a basket or a cart? We want to make sure that you’re able to enjoy your retirement, spend time with your family, spend time with your kids and your grandkids, enjoy playing golf or spending time outdoors or traveling or whatever you want to do. We’ve got to do a better job at delivering and taking risk out of our portfolio, and one of the best ways to do that is do a bond replacement. And if you’ve got questions about what is a bond replacement, how do I implement one? How do I implement a bond replacement strategy? Then I would encourage you to visit bond replacement.

Ford Stokes: [00:32:49] I’ve written a detailed report that is several pages, but it’s a quick read and we got a really great graphic designer to design it. So it makes it look really cool. But it really describes what a bond replacement is, and it’s a great way to eliminate any advisory fees. It’s a great way to do so much more with your money and grow your money beyond what a typical bond portfolio is with low interest rates. Even though we’re in a slightly rising interest rate environment, that also means that your bonds that you hold today are going to be worth less in the future if bond interest rates go up. So you need to be very careful. I would encourage you to check out bond replacement. That’s bond replacement. Submit your information. You’ll get a free download of my absolutely free report that is incredibly detailed about how to implement a bond replacement strategy. And I don’t just say this for my health folks. I want to make sure you understand replacing the bonds. Your portfolio is a good thing for you, and you’re going to see in that report that on a million dollar portfolio, just the bond portion of the 40 % portion that should be in bonds on a modern portfolio theory, 60 % stocks and 40 % bonds, just the bond portfolio portion would be worth two point eighty four million dollars more if you invest in a fixed index annuity versus investing in.

Ford Stokes: [00:34:10] A bond portfolio like the Moody’s BA that only did three % to two % last year. You get between five and 10 plus % and a fixed index annuity because you can get market like gains without market like risk. And so I would encourage you to consider that check out bond replacing income. You’ll enjoy it also. Annuity360.Net is the place to go if you want to get my free book and then also if you want to download the entire audio book, I would encourage you to go ahead and visit Amazon and get that downloaded. It’s only like six bucks and really appreciate everybody’s help on. Getting that audio book recorded as well when we come back from the break, we’re going to talk more about these other two rules, which is, you know, the four % rule in rule of seventy two. I think you’re going to like hearing about those two rules if you don’t know about them. Most activators do. But we’re going to make sure that you know about them today and we’re going to have our final countdown and we’re going to talk more about what happened in this date, in history, this week in history, if you will. And we’re so glad you’ve been with us. You’re listening to Active Wealth Show right here on a.m. 9:20 answer. Are you going to want to come back for those other two rules you should follow for successful retirement?

Producer: [00:35:35] We have Ford Stokes, author of two important personal finance books Annuity 360 and Taxes are on sale here on a.m. nine 20. The answer as the host of the Active Wealth Show Saturdays at 12:00 noon and Sundays at 11 a.m.. Working.

Ford Stokes: [00:35:58] Living. No. All right, and welcome back activators on Ford Stokes to chief financial adviser and I’ve got Sam Davis, our executive producer, with us, and we’ve got a couple really good ones, really good. This week in history on October 17th, 1931 Al Capone went to prison prohibition, which outlawed the brewing and distribution of alcohol and lasted from nineteen. Twenty nineteen thirty three proved extremely lucrative for bootleggers and gangsters like Capone, who raked in millions from his underworld activities while awaiting the results of the appeals. Capone was confined to the Cook County Jail upon denials of the appeals, he entered the U.S. penitentiary in Atlanta, serving his sentence there and at Alcatraz, which is amazing that he didn’t realize that he had spent time in the U.S. penitentiary in Atlanta. And then the other one that was really cool, and my dad would love to hear this one. And also my brother in law who flies the F-18 Growler for the U.S. Navy on October 14th, 1947, Chuck Yeager broke the sound barrier. That’s a lot of people thought that your plane would get crushed when you broke the sound barrier, and Chuck Yeager just, you know, was braver than anybody else and broke the sound barrier, which I thought was great. So saying, we’ve got Chapter seven and Chapter eight from our new book Annuity 360, and this next one is really important. It really speaks to budgeting. It’s the four % rule basically states.

Ford Stokes: [00:37:29] If you don’t spend more than your four % of your principal, you likely won’t run out of money. Chapter seven The four % rule big idea withdrawing four % or less annually from your portfolio will ensure that you will not draw down your account too quickly and that your income lasts for your entire retirement. What is it? The four % rule is a rule of thumb used by investors to determine how much retirees should withdraw from their retirement account each year. This rule should ideally help provide a steady income stream for the retiree, while also maintaining an account balance that keeps their income flowing throughout retirement by withdrawing only four % from your account. Many financial professionals believe this will help your wealth last through your retirement and that you will be able to live comfortably with this withdrawal rate. This rule helps financial planners and retirees set the withdrawal rate for their portfolios. Life expectancy also plays an important role in this process by determining if the selected rate will be sustainable. Retirees that live longer will need portfolios to last longer, and medical costs and other expenses could increase as retirees age. Where did this rule come from? The four % rule was created using historical data on stock and bond returns over a 50 year period from nineteen twenty six to nineteen seventy six before the early nineteen nineties. Experts generally considered five % to be the safe amount for retirees to withdraw from their portfolio each year.

Ford Stokes: [00:39:03] In nineteen ninety four, William Bingen, a financial advisor, conducted a study of historical returns. He focused heavily on the severe market downturns in the nineteen thirties and the nineteen seventies. Benjen concluded that even during those markets, there was no historical basis that a withdrawal rate based on the four % rule would exhaust a retirement portfolio in less than thirty three years. Some retirees will choose to stick to the four % rule all the time and never adjust for inflation. However, the rule allows retirees to increase the withdrawal rate to keep up with inflation. There are two options to do this. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Option one Setting a flat annual increase of two %, which is the Federal Reserve’s target inflation rate. Option two Adjusting withdrawals based on actual inflation rates. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Two scenarios where you should avoid using the four % rule. Scenario one A severe or protracted market downturn can erode the value of a high risk investment vehicle much faster than it can in a typical retirement portfolio. Be cognizant of the health of the market and talk with a professional if you have any questions or want to make changes to your portfolio.

Ford Stokes: [00:40:28] Scenario two The four % rule does not work unless you commit to it year in and year out. Violating the rule for one year to splurge on major purchases can have severe consequences down the road. It will reduce the principal, which directly impacts the compound interest that the retiree depends on for sustainability. A lot of people like Why can’t live on just four % forward? Well, here’s the deal you probably can. You’ve got to be very careful on your withdrawal rates. You can’t over claw back on those withdrawals. Try to stick to that four % rule. And I think you’ll. Find that your money is going to last, and also you’ll have a lasting legacy for your kids as well. Well, Sam, go ahead and play. Chapter eight about the rule of seventy two. It’s actually a really fun rule, and it’s great to kind of do some math to understand how quick your money will really double during retirement. Chapter eight Rule of seventy two. Big idea Knowing how long it will take your investments to double is a good planning tool. This will help you track your investments and calculate future earnings. What is it? The rule is a simple way for you to calculate how long your investments will take to double with a fixed annual rate of interest. If you divide seventy two by the annual rate of return, you can get an estimate of how many years it will take for the initial investment to duplicate.

Ford Stokes: [00:41:47] The rule of seventy two is relatively accurate when it comes to low rates of return, but becomes less accurate as rates of return increase. Example an investment of one dollar annual fixed interest rate equals 10 %. Seventy two, divided by 10 equals seven point to an investment of ten dollars with an annual fixed interest rate of 10 % would approximately take seven point two years to grow to twenty dollars. Rule of seventy two adjustment The most realistic simulation for the rule of seventy two is an eight % interest rate. However, you can make a small adjustment to the rule in order to make the calculation even more accurate for every three points than an interest rate strays from eight %. You either add or subtract one from 70 to the adjustment is not necessary, but some people prefer to make this adjustment because the time frame of this version of the rule is more accurate. Example one. If your rate is five %, you would just adjust the rule to be the rule of 71. This is because five % is three points lower than 8 %, which means you subtract one from 72. Example two If your rate is 11 %, you would adjust the rule to be the rule of 73. This is because 11% is three points higher than eight %, which means you would add one to 72 other ways to use the rule of seventy two things with compounded rates.

Ford Stokes: [00:43:13] You don’t have to use a rule of 70 to just for invested or loan money. It can be used for anything that grows at a compounded rate, such as population macroeconomic numbers, charges or loans. Example the gross domestic product GDP grows at four % annually. You could expect the economy to double in 18 years because 72 divided by 4equals 18. Estimating the effects of investment fees, the rule of 72 can also be used to estimate the long term effects of fees that eat into your investment. Example one A mutual fund charges 6 % in annual expense fees. It will reduce your investment principal by half in about 12 years because 72 divided by 6 equals 12. Example to a borrower pays 8% interest on a credit card. They will double the amount they owe in nine years because 72 divided by 8 equals 9. Estimating the effects of inflation, the rule can also be used to find out how long it will take for your money’s value to have due to inflation. Example inflation is at 4%. The purchasing power of your money will have in 18 years because 72 divided by four equals 18. All right, we’re almost out of time here now. It’s time for the final countdown. It’s the.

Producer: [00:44:36] So let’s recap what you may have missed. It’s the final countdown leader.

Ford Stokes: [00:44:45] On this week’s show, we gave you a market update, we talked about that 5.9% cost of living adjustment that just got announced on Wednesday from the Social Security Administration, and it’s probably also not keeping pace with the runaway inflation we’re having. We also highlighted rising energy costs and increasing supply issues. We gave you our weekly inflation demonstration list of the top items that are expected to have low and possibly no inventory during this holiday season, including food, carbonated beverages, dry ice, packaged goods, Apple iPhones, electronics, toys, holiday decorations, sports shoes, sportswear and automobiles. We hope you’ve enjoyed this week’s Active Wealth Show. We love working with you. We love educating you and helping you build a strong retirement. Because again, our goal is to help you build a smart financial plan that includes smart risk, smart, safe smart health and smart tax investment decisions that will equal a smart financial plan that hopefully will deliver a market efficient fee, efficient and tax efficient portfolio for you, and hopefully give you a great retirement where you’ve got peace of mind and you’re enjoying your family, enjoying time, you’re spending with your spouse and your kids and your grandkids, and also helping you leave a fantastic and significant family legacy. And listen, remember with your retirement, make sure you are inspecting what you expect. If you’re going to be a bear, be a grizzly about your retirement. Be aggressive about trying to seek information about your retirement. It is your money. Don’t pay the government too much in taxes. We can help you with the Roth latter conversion plan. We can help you build tax free retirement income. All you have to do is reach out to us at Active Wealth Show. Com. We’re happy to help you, and we’ll be right back with you next week on our brand new show of the Active Wealth Show right here on AM 920. The Answer.

Producer: [00:46:36] 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 ActiveWealthShow.com. Investment Advisory Services offered 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 BCM that 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.

Producer: [00:47:17] 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.

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How to Build a Smart Financial Plan 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 advisor 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 investing. And now your host Ford Stokes

Ford Stokes: [00:01:13] And welcome to the Active Wealth Show activators I’m Ford Stokes your Chief Financial Advisor and welcome to the weekend. And really, the person that welcomes you the weekend is our executive radio producer, Mr. Sam Davis. Sam, you’re going to welcome to the weekend.

Producer: [00:01:28] Of course, I’m going to welcome them to the weekend. Welcome to the weekend activators. Hope it’s a good one, and I’m glad that you’re spending part of your weekend with us here today because we’ve got something really important to talk about.

Ford Stokes: [00:01:40] Yeah, we do. Today, we’re going to talk about the misconceptions about retirement. The first couple of segments and we’ve gotten a lot of tweets and a lot of questions and a lot of emails and a lot of phone calls asking for us to really go through the full financial plan. We’re going to try to come up with a we’re going to try to share all the major aspects of creating a smart financial plan that includes smart, safe, smart risk, smart health and smart tax decisions that we think can make a really big difference. And so, we’re going to go through that in segments two and three and four. And so, let’s go ahead and get straight into this. So, we’ve got 10 misconceptions that are out there about retirement, and we felt like it was important to share with everybody. Number one is that a lot of people feel like their effective tax rate will dramatically decrease when they stop working. So, if you’re an individual filing, you know, between twenty five and thirty four thousand dollars a year, up to 50 percent of your benefits are going to be taxable more than thirty five more than thirty four thousand. Guess what? Congratulations. Eighty five percent of your benefits may be taxable. To me, that doesn’t seem like somebody is wealthy, but that’s what the IRS thinks. They think if you’re an individual filer and you make more than thirty-four thousand dollars a year, they think you’re actually wealthy.

Ford Stokes: [00:03:11] And for a married couple, it’s actually above forty-four thousand a year, so they don’t even double that to sixty eight thousand. And so, I promise you, your effective tax rate may not dramatically decrease, and that is a common misconception about retirement. And you want to be careful about that and have a plan. You want to have a tax plan. You want to make sure you’re making smart tax decisions with your retirement future and with your retirement plan. And what I would encourage you to do is visit active welcome and you can click that set an appointment button in the upper right corner. Or you can give us a call at (770) 685-1777 or just visit ActiveWealth.com and get in touch with us. Most people have a tough time remembering phone number so you can easily remember active wealth.com. It’s spelled exactly the way it sounds, and we don’t believe in just hanging in there. We want to take an active approach or proactive approach, if you will, about your retirement future. And you know, knowledge is power and some of these misconceptions you want to be careful about. So, no one is your effective tax rate will dramatically increase.

Ford Stokes: [00:04:27] That’s the number one misconception about retirement. And honestly, that’s not the case when you go to replace your income out of an IRA account. If you haven’t embarked on an aggressive Roth ladder conversion plan that I would encourage you strongly encourage you to consider implementing a Roth ladder conversion plan so that you can dramatically decrease your effective tax rate. And the effective tax rate basically is the average tax rate you pay, whereas the marginal tax rate is actually the top tax rate that you pay. Then the number two misconception about retirement, we have 10 of these that we’re going to share today is that Medicare covers long term care costs. Medicare does not cover long term care costs and you’ve got questions about long term care. We do some long-term care insurance. We do work with our clients on protecting their assets and also helping them not become a financial burden on their children late in their retirement years. On average, a male lives about 18 months in long term care and a long-term care or assisted living facility. Once they have, they can no longer meet two of their six activities of daily living what they call ADL’s, which would be like feeding yourself or transporting yourself or bathing yourself or things like that. And it was a major misconception around there that Medicare covers all the long term care costs. You’re fine. The government’s going to take care of you.

Ford Stokes: [00:05:54] That is not the case. Medicare does not cover almost any money with long term care whatsoever. And it’s really there for health care. It’s there for Medicare Part A, which is your hospital costs and Medicare Part B, which is your physician cost and Medicare Part D, which is your drug costs. Guess what? You have co-pays and you have co-insurance and deductibles with those Medicare costs, and most people get either Medigap supplement insurance plans or they get a Medicare Advantage plan. And we would encourage you to reach out to Bonnie Dobbs, who’s our partner in Medicare. She’s the president, owner of Medicare and other red tape. Her website is Medicare and other red tape, but you can also just reach out to us and we’ll put you in touch with Bonnie. No problem. You can even send me an email. Hey, Ford, can you introduce me to Bonnie Dobbs, please, for Medicare and just send me an email at Ford at Active Welcome. That’s Ford at Active Welcome. And we’re happy to help you there. And the number three is. You just need to get to one big magic number. Actually, that’s a huge misconception with your retirement portfolio. It’d be great to get to a million dollars, $2 million, $3 million. But honestly, retirement is more about income than it is about getting one big nest egg number. And you need to make sure that you’re generating retirement income through different tax buckets.

Ford Stokes: [00:07:26] And so one would be in generating tax free income via from your Roth, which would be a great idea if you’ve got a Roth IRA and you’ve gone to the trouble of doing the Roth latter conversion. Number two would be if you’ve got income tax free income coming from your indexed universal life policy. And if you’re in your 40s or 50s or 60s and you want to figure out how you can get tax free income. Completely tax free income, we’re happy to help you do that. All you have to do is visit us at active welcome and get in touch with us, and we’re happy to give you a free Rothblatt or conversion consultation, but we give you a full financial plan. It’s about fifteen hundred dollars worth of free planning. And we do it for all of our activators, all of our active wealth show listeners on purpose because we want you to make an informed financial decision about your retirement future. It’s crazy to not have the knowledge you need to retire successfully. And listen, I realize too many people talking to financial planners about like going to the dentist, but I promise you, I don’t inject as much pain as the dentist does. And we’re happy to help you throughout your entire retirement years. Also, all seniors, the next one is number four is all seniors receive the same Social Security benefit that is not true.

Ford Stokes: [00:08:50] So security benefit is basically generated based on your top thirty five earning years. And the more average income you have made during your top thirty five earning years, the higher your Social Security income benefit will be. So it absolutely is not true. All seniors do not receive the same Social Security benefit. Number five, the you’re stuck with the same security benefit that you would have had. View lock in at sixty two years old. That’s absolutely not true. You know, actually it actually goes up, especially after a full retirement age, it goes up eight percent a year. The longer you wait, the more you’re going to make with Medicare, but I want something to be very clear about something. If you take your Social Security income benefit at age 60 to. You are getting seventy five cents on the dollar. Let me ask you, as you’re driving around Atlanta right now, you’re listening to us on active Welsh dot com, you’re listening to us on. You know, iTunes or Spotify or Stitcher or Google Play or even iHeart Radio and Salem, their podcast site. Let me ask you, do you feel like you deserve more than seventy five cents in the dollar of what you’ve paid in to Social Security? I think you would say yes. So you want, if you can, we’d like to see you try to make it to full retirement age if as long as you’re not putting too much downward pressure on your retirement nest egg.

Ford Stokes: [00:10:20] We’ve gotten through five of the 10 in this first segment. We’re talking about the misconceptions about retirement out there and what to do about them. And on segments three and four, we are going to do everything we can. To share important details about how to build a smart financial plan for your retirement future. And again, we would encourage you to visit active welcome if you want to finally get in touch with us. You listen to us for the last couple of years. Now’s the time. Now’s the time to go ahead and pull the trigger. If you’ve been listening to us for a couple of weeks. Go ahead and visit Active Welcome or pick up the phone and give us a call at (770) 685-1777 and we’re happy to help you. And when we come back, we’re going to talk about the next five misconceptions about retirement. And also we’re going to get going on how to build a smart financial plan so we can have a successful retirement as we’re doing everything we can to protect and grow your wealth. It was an Active Wealth show right here on AM920 The answer you’re going to come right back.

Ford Stokes: [00:12:16] And welcome back to the active, well, show activators, I’m Ford Stokes, the chief financial adviser. I’m joined by Sam Davis, our esteemed executive producer, and we’re talking about the misconceptions about retirement and we’ve gone through the first five. We’ve got 10 of them today for you, and we’re also going to do everything we can to share important details about how to build a smart financial plan between now and when you turn 90, five years old, something we call results in advance planning, but we want to walk you through also the formula here. So a smart financial plan equals smart, safe, smart risk. Smart tax and smart health investment decisions to build a smart financial plan. And to protect and grow your wealth and hopefully generate a successful retirement for you. That’s our goal that we’re here talking about you. We’re not here talking about me. We’re doing everything we can to build your retirement successfully. So let’s get back into this to the misconceptions about retirement. One through five was one. Your effective tax rate will dramatically decrease if you are replacing your income with income from your IRA, guests and your Social Security. Guess what? If you replace the full income, you’re still going to be pretty close to the same effective tax rate. Number two is Medicare covers all long term care cost. That is not true. Medicare does not cover long term care costs.

Ford Stokes: [00:13:38] Number three was one magic number. You just need one big magic number to retire successfully. It’s a lot more than that, and you need to do a great job at planning at least four smart tax planning and smart tax investing. Well, that’s the Roth latter conversion or generating retirement income you can never outlive with the right financial product as well, and we can help you with that. All you have to do is visit Active Welcome. Click that set an appointment button in the upper right corner, and we’re happy to help you. Number four was all seniors received the same Social Security benefit? No, it’s based on your income and based on AIME, which is your average income, monthly earnings, and that’s what AIME stands for. I am e average income, monthly earnings and basically they’re looking your top thirty five earning years. They’ll get an average of that of what your income was over the top thirty five earning years. And then we’ll also come back and they’ll divide that by 12, and that gives you your aim bend points. And so that’s a pretty good stuff there to understand that not everybody gets the same Social Security benefit. And number five was stuck. You’re stuck with the same Social Security benefit that you would have locked in at age sixty two and a half. That is not true. The longer you wait, the more you’re going to make.

Ford Stokes: [00:14:57] Specifically after your retirement age, you reach your full retirement age, which everybody who’s born after 1960. Congratulations, your full retirement age is sixty seven people who are born before them, or something like sixty six and two months, sixty six and four months, et cetera. You definitely need to do everything you can to wait as long as you can without putting too much downward pressure on your portfolio for withdrawals. And then starting out, this segment, number six taxes will remain flat during retirement. I think it’s a big misconception. Did you know that between nineteen sixty and nineteen sixty three, the current twenty four percent tax bracket was actually fifty six percent and that is two x plus eight percent higher. So it’s eight percent higher than two times what our current tax rate is. If we return to those same years which the Democrats were in power, then that was the Kennedy years. Imagine if you’re sitting there looking at taking out a $10000 to go on a cruise with your spouse and you’re literally looking at giving fifty thousand six hundred of that 10 grand to the U.S. government and then you get $4,400 of your money. That’s brutal, right? And also the average if we look at the highest federal marginal income tax rate from nineteen thirteen all the way through till today, the average top marginal tax rate was actually fifty eight point one percent.

Ford Stokes: [00:16:27] Right now, we’re at thirty seven point one percent and it’s obviously it looks like it’s going up. You hear it in the near future if you listen to what the Democrats are threatening and that is a significant amount higher than where we are right now. So you need to plan for it. You need to do everything you can to tackle that misconception that taxes will remain flat during retirement. Also, State of Georgia, you’re basically between five point seventy five percent and six percent state income tax rate. So congratulations on that. You’ve got to pay money above what the federal the federal government is charging. Then number seven. Number seven is Medicare covers, all costs, all health care costs. Medicare doesn’t cover all health care costs. There are. Co-payments and also deductibles that you must pay, and that’s why almost all of our clients, we strongly recommend they talked with Bonnie Dobbs with Medicare and other red tape, and we ask her to help them with either a Medigap supplement insurance plan or a Medicare Advantage plan. But a misconception is that Medicare covers all health care costs. It covers 80 percent of them, and I would encourage you to consider getting a Medigap supplement insurance plan or. Or a Medicare Advantage plan, Medicare Advantage is a little bit more like an HMO and Medigap someone plan is kind of a little like a little bit more like a PPO.

Ford Stokes: [00:18:01] And when you deal with Medicare Advantage, you’re kind of it’s almost like dealing with the government. And when you’re dealing with a Medigap supplement insurance plan, it’s like dealing with a private insurer. Also, one big thing make sure that you’re doing everything you can to get a Medicare supplement insurance comparison schedule done every two or three years and try to start comparing costs of Medicare plans because they’re all basically identical. The only difference is price and sometimes network coverage. But I would encourage you strongly to consider. Yeah, getting a Medicare comparison scheduled run on your current Medicare because you might be paying 50 to $100 too much a month. And one of the reasons that is like, let’s say, one of the hot products, it might have been a hot Medicare supplement insurance Medigap supplement insurance plan three years ago. Well, they ratcheted up and they keep growing and increasing the monthly cost to you for Medicare Part A and Medicare Part B and also Medicare Part D. And, you know, Medicare Part A. again is for the hospitals, Medicare Part B is for the physicians and then Medicare Part D is for your drugs and you want to do everything you can to minimize those monthly costs because that stuff adds up. Over thirty five plus year retirement ID number eight is, Hey, I’m going to die before my 90th birthday, so I’ll just use that as my target date for retirement.

Ford Stokes: [00:19:33] Because you know that the human life expectancy over the last 200 years in the United States of America has more than doubled. Did you also know that CDC says that? If both spouses lived to be lived to age sixty five, it is. Highly likely, at least one of them is going to live to be over 90 years old, so we need to plan for our retirement to last. We need to make sure that our money lasts and one of the ways to do that is to invest in a smart financial plan that is strategic, that looks at a lot of different factors and helps you minimize the taxes you’re going to pay, minimizes the market downturn and helps generate a retirement income you can never outlive as well. And those are all things that we can do for you. Number nine is, hey, I can set my allocation for my retirement, just forget about it and not worry about it. Please don’t do that, please. Inspectors, you expect about your retirement future. If you’re going to be a bear, be a grizzly about it, be aggressive, about seeking knowledge about your retirement future. Please do that. Please don’t just forget about it. I mean, buy and hold is a is a decent strategy at times, but the folks have been holding a lot of Dow stocks over the last two years have not performed nearly as well as those who are in the Nasdaq 100 stocks.

Ford Stokes: [00:20:54] So you really need to have kind of the right plan and you need to have it managed actively. Your advisor should be earning it and we absolutely earn it with our clients. We’ll do everything we can to help you. Next is the last one is I can handle retirement planning by myself. Well, let me ask you, especially for your male driving around, listening to us right now and you’ve got a wife and you want to take great care of her. And maybe her parents are no longer around and you want to make sure that you’re taking is great care of her, as they did. Well, if you pass away and you’ve been handling all of your own investments and she gets that and she’s got nowhere to go, no frame of reference, she might make decisions that you wouldn’t recommend. And we need to do everything we can to set both spouses, not just one spouse, but both spouses, up for success during retirement. And we think the right way to do that is to have a financial adviser in place while you’re both still very there and very lucid and in with it mentally and ready to go. And therefore we can continue to kind of grow with you.

Ford Stokes: [00:22:04] That’s kind of our thoughts. We feel like those are the things that are most important for us to do is to do everything we can to help you retire successfully. And we want to be there for you, and let’s face it, guys, women live longer than we do. So we need to do everything we can to help protect and grow our wealth for their stuff as well. In the next segment, we’re going to start talking about the Smart Financial Plan and also how to address each one of these misconceptions about retirement. I hope you enjoy these 10 misconceptions that we made sure that we shared, and hopefully that helps you guys understand that there that those are myths and we can disprove them. We need to do everything we can to prepare. For anything that comes our way during retirement and listen, you’ve been listening active, well, show right here on AM nine to one, the answer when we come back, we’re going to talk about how to build a truly smart financial plan that includes smart, safe, smart risk, smart health and smart tax investment decisions. Thanks so much for being with us, and we’re so glad you’re with us this week and you’re going to want to come right back to hear about how we’re going to build a smart financial plan for you.

Ford Stokes: [00:24:11] And welcome back activators, the Active Wealth show I’m Ford Stokes, the chief financial adviser, and I’m joined by our esteemed executive producer, Sam Davis. And listen, if you’re wondering who an activator is, it’s somebody who listens to this show. It’s somebody who wants a successful retirement and they want to protect and grow their wealth, and they want to do it in an efficient manner. They want to have a tax efficient, fair, efficient and market efficient portfolio. And quite honestly, in that order, because the first two tax efficient and fee efficient, you can do that and you can control it the market, you can’t necessarily control the market and nobody can. You’ve got a lot of institutional investors that do have a great deal of influence on the market. But we need to do a great job at least the first two and minimize the tax we’re going to pay during retirement and also minimize the fees we’re going to pay with smart tax solutions. You can implement a Roth ladder conversion or you can invest in indexed universal life policies or any types of life insurance to generate a retirement income you can never outlive if it’s the right type of insurance product on the fee efficient side. If you invest in things like a bond replacement strategy with a fixed indexed annuity that’s also an insurance product, you can grow your money tax deferred, but there’s no advisory fees associated with it because no portfolio or advisory management fees because the insurance company pays me as the advisor on the front end and it doesn’t come out of your number, which is great and allows your money to grow more efficiently.

Ford Stokes: [00:25:46] So let’s kind of talk through a smart financial plan. The first one for me is smart. Safe bonds are generating an income currently. Why are you paying advisory fees for it? Because, you know, bonds are not going to go up, up and down nearly as much as, say, individual stocks or ETFs or mutual funds and things like that. So I would encourage you to really, really think long and hard about continuing to invest in bonds and also allows you to be more aggressive with the cash that’s left in your portfolio. So you you’ve got enough money kind of set aside to help you generate an income from safe money that’s not at risk in the market. So, Sam, go ahead and play Chapter 15 for my new book, Annuity 360. You can also get my new book folks at Annuity 360 Dot Net. That’s Annuity 360 Dot Net. And I think you’re going to find this really interesting because you’re going to learn a lot about the risks that are associated with bonds. And also, there is a real numeric outcome on how much more money you’re going to make with the right type of bond replacement. Chapter 15 bond replacement with fixed indexed annuities. Big idea Historically, bonds have seen volatility when the market is volatile.

Ford Stokes: [00:27:02] Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. Am I firm active wealth management? We believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States. Historical bond volatility The nineteen hundred saw two secular bear and bull markets in U.S. fixed income. Inflation peaked at the end of World War one and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until nineteen fifty one. The long term bond yields were at one point nine percent in nineteen fifty one. They climbed to nearly 15 percent in nineteen eighty one. In the nineteen seventies, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market, coming into the twenty first century long term bond yields decline from a high of 15 percent to seven percent by the end of the century.

Ford Stokes: [00:28:40] The bull market in bonds showed continued strength in the early twenty first century, but there is no guarantee with our current market volatility that this will hold. See Chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history of loan, you can see how uncertain the future of. Bonds is inflation and fluctuating interest rates play a big role in bond yields? Interest rate risk of bonds, bonds and interest rates have an inverse relationship when interest rates fall. Bond prices rise due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May twenty four point twenty. The 10 year Treasury note was yielding zero point six four percent, and the 30 year Treasury bond was at one point twenty seven percent. Reinvestment risk of bonds This is the likelihood that an investment’s cash flows will earn less in a new security.

Ford Stokes: [00:29:52] For example, an investor buys a 10-Year Year one hundred thousand Treasury note with an interest rate of six percent. They expect it to earn $6000 a year at the end of the term. Interest rates are four percent. If the investor buys another 10 year note, they will earn four thousand instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market risk This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic market risk This type of risk is unique to a specific company or industry, similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk. There are two types of risk internal and external internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company.

Ford Stokes: [00:31:24] A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard & Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point twenty one percent for municipal bonds. However, markups can be as high as five percent, up to 50 dollars per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time. Unlike an annuity, which provides income for life, you must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive if you invest and lock up some of your money into a fixed indexed annuity. With a highly rated carrier that’s got a financial solvency rate of, say, one hundred and three to one hundred and seven plus percent, which is what we invest with folks. Then you’ve got an opportunity to literally go very aggressive with the rest of your of your portfolio, so you can consider going one hundred percent.

Ford Stokes: [00:32:58] If you’ve got 40 percent of your portfolio locked up into a fixed indexed annuity that’s giving you income, you can go 100 percent aggressive, 100 percent stocks or ETFs and mutual funds. We invest in in stocks and ETFs. We try to avoid the expense ratio and everything with mutual funds. But that is what I would do is try to invest in aggressively into an all ETF or stock portfolio and then take between 20 and 40 percent of your money and put that away into a fixed index annuity so you can get market like gains without market like risk. Also, real quick, we just got a couple of minutes left in this segment. I want to talk about retirement income gap. Retirement income gap is simply the difference between your budget and your guaranteed income sources. For example, if you have a budget that requires five thousand a month of income in today’s dollars, then you have and you also have a guaranteed income for Social Security and pensions of three thousand dollars total. Then your gap is two thousand a month. We always encourage our folks to kind of add up to different months and then divide by two, and that’ll give you a good idea of how much you’re spending each month, which is usually a pretty shocking number for people. And you need to kind of add up what your non-discretionary and your discretionary expenses are non-discretionary be like rent, mortgage, power, water, trash, that kind of thing.

Ford Stokes: [00:34:21] Discretionary expenses would be like going out to eat or buying gifts for the grandkids, things like that. So we need to figure out, so let’s say if you had. You know, total discretionary and non-discretionary expenses at sixty one thousand five hundred dollars, you got a ten thousand dollar pension a year and you got Social Security of thirty six thousand. You would end up having a total retirement income gap of negative fifteen thousand five hundred dollars in a way to fill that is by withdrawing out no more than four percent of your retirement nest. So that’s another thing to consider. When we come back, we’re going to turn. We’re going to talk about ways to close your retirement income gap or keep talking about smart financial plan with smart, safe, smart risk, smart health and smart tax. And we did talk about smart safe with a bond replacement just now, and we’re going to get more into kind of smart risk, smart health and smart tax here next. And you’re going to want to come back for this segment because you really want to hear everything we have to say about how to build a smart financial plan for your retirement future. This is considered, you know, results in advanced planning. We want to give you your positive successful results in advance and give you more peace of mind during retirement.

Ford Stokes: [00:36:06] And welcome back activators to segment four of The Active Wealth Show, and we’re Sam and I are so glad you’re with us. Sam’s our esteemed executive producer. We’re huge fans of his. Plus, he also welcomes us to the weekend. I wanted to just share. Sam, let’s hit them with the Roth converter sounder.

Producer: [00:36:26] It’s time for an Active Wealth Roth converter.

Ford Stokes: [00:36:32] So I wanted to share, if you’ve got a U.S. debt clock, Gheorghe, in May shock, you probably haven’t been there in a couple of years. It may shock you didn’t realize that it is literally rolling through as the airing of this show. It’s a twenty eight point eight to five trillion dollars right now. We are pushing 30 trillion dollars, folks, and we are spending money like a drunken sailor and we need to do a better job and not spending that kind of money. And so if you think taxes are not going to go up in the future, as one of those misconceptions was that we talked about in the first two segments, I would strongly urge you to reconsider. We need to get a better plan for that, and that includes a Roth conversion where you’re moving some money from your IRA each year. Over the next five to 10 years, you’re going to pay the taxes when you do the conversion. It’s taxes, ordinary income. But we’re going to move money from the tax deferred bucket into a tax free bucket where there’s also no RMDs. And you can you’re going to keep every single penny from every dollar that you withdraw from your Roth IRA. So all we’re going to say today is the Roth converter for the day is basically letting you know that we’re at twenty eight point eight to five trillion as of the recording of this of this actual show.

Ford Stokes: [00:37:54] And we need to do everything we can to minimize the taxes we’re going to pay and minimize the exposure to tax risk. I mean, part of my job as a fiduciary is to take risk off the table for my clients. And that is a great way to do it is to minimize the tax risk. So please, please, please do everything you can to implement a Roth ladder conversion. And the best way to do that is to get started with us by visiting active welcome. It is a smart tax investment way to going about it, and we’re happy to help you and we’ll give you a free $1500 value for a full financial plan that includes a Roth ladder conversion that allows us to save money and save you over six figures during retirement. As you convert your IRA to your Roth IRA versus paying money year over year to the IRS, you know decades after you’ve stopped working. Also, one really great benefit from a family legacy perspective is that you’re giving if you can convert everything to a Roth IRA, guess what you’re going to do? You’re going to end up giving your loved ones a Roth IRA, not an inherited IRA. And there’s a huge difference because yes, they do have to take the income within the first 10 years after your death. But here’s the other cool thing there are no taxes on that money, so you’ve saved the money for yourself and taxes during retirement.

Ford Stokes: [00:39:16] You’re also saving taxes for your children and for your heirs in retirement. And I think that’s a really big deal and that’s something that you really should consider. So again, we’re talking about smart financial planning here, and so smart tax is a really big part of it. You want to try to consider a Roth latter conversion as we just talked about or investing into an index universal life policy so you can generate retirement income from that indexed universal life policy absolutely tax free. That also gives you an incredible. Exposure to market like gains through index linking and how that your underlying index performs is how much growth on the principle that you pay in less obviously the. The cost of life insurance, but you also get a great death benefit as well, but those are the two smart tax ways of investing is either investing in. A Roth latter conversion or investing into indexed universal life policy, there’s only two types of tax free investments out there. Now, some people say, well, what about municipal bonds, Ford? Well, actually, did you know that municipal bonds contribute? To. You know, taxation on Social Security income benefits and also add to Medicare surcharges. And that means that they’re not truly tax free. The only truly tax free investment classes out there are Roth IRAs and Roth Warren KS, obviously, and then the other would be life insurance.

Ford Stokes: [00:40:48] And let’s talk more about. Smart risk as well, so we like to invest tactically, we rebalance our portfolios on a monthly basis. We also can provide a structured note ladder of investing in five different structured notes in five different months with five different starting points. And we’re not going to get into a lot of detail today because I don’t want you guys and gals to have to suffer through the. The three to five minute disclosure that Sam has to read about structured notes, but if you’ve got to if you got a question about structured notes, which is kind of a smart risk way of investing, that gives you a nice little buffer. On your principle, your principle is protected, I would encourage you to give us a call at (770) 685-1777 and we’ll answer all of your questions about structured notes. As an example today. The October structure note is offering a ten point seventy five percent. Average annual rate of return over the next 12 months with a 30 percent buffer. So as long as the Nasdaq one hundred the s&p 500 and the Russell 2000 don’t lose 30 percent of their value from the time you buy this structured note. Your principle is one hundred percent protected. Now, it’s a security, and it is a structured note, and it is an asset that is at risk in the market.

Ford Stokes: [00:42:29] It does it, it does involve market risk. So, you’ve got to be careful. But one of the ways we diversify the market risk that our clients have to deal with is we invest in a structured note latter of five consecutive months with five different banks and these banks are huge. Banks are like JPMorgan, Bank of America, Wells Fargo, Bank of Montreal, Goldman Sachs. I mean, all these different huge banks, and we’re able to get you a significantly higher average annual rate of return. It’s also a great way to beat bank CDs as well. And I would just strongly encourage you to visit active welcome and get in contact with us if you’ve got questions about structured notes for more of a smart risk way of investing. So, it’s a great bond replacement strategy along with fixed index annuities as well. And listen, we’ve talked a lot about smart risk and smart safe today, also smart health with getting the right type of Medicare supplement insurance or Medicare Advantage plan and also having a good plan for you to reduce your drug costs and your co-pays and your deductibles. And all of that adds up into one thing, which is a smart financial plan, and next week we’re going to go all the way through. We’re going to dedicate the entire show to this concept of smart financial planning. It’s the final

Producer: [00:43:56] Countdown. So, let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:44:07] It’s listed on today’s show with our final countdown, we went through the 10 misconceptions about retirement, and we talked about, you know, your effective tax rate will dramatically decrease. We talked about your Medicare covers all long-term care costs. It does not. These are all the top 10 misconceptions about retirement. Hey, you just need one big magic number to retire successfully. That’s not the truth. Retirements more about income than it is about just investing for one big nest egg. Number four was all seniors receive the same Social Security benefit. That’s not true. Number five is you’re stuck with the same security benefit you that you’ve locked in at eight, six, two and a half. That’s not true. The longer you wait, the more you’re going to make. Number six was taxes are going to likely remain flat during retirement. We think we’ve shown, especially with the U.S. debt clock saying we’ve got twenty eight point eight to five trillion dollars worth of U.S. national debt. That is likely not going to be the case as taxes will likely go up in the future. Number seven is Medicare covers all, all health care costs. It does not. You’re going to have to have a Medicare supplement insurance plan or a Medicare Advantage plan to cover your co-pays and deductibles. Number eight is, you know, the if you think you’re both spouses are going to die before 90 years old and you need to use that like age eighty-five as your target date for retirement for the end of your retirement, I promise you, that’s not the case. And number nine is, hey, you can just set your allocation and forget it and just leave it there.

Ford Stokes: [00:45:38] I promise you. You don’t want to do that. You want to rebalance. You want to stay invested correctly and rebalance to what is growing and what is what is contracting. And have a plan, and then number 10 is, hey, I can handle all of my retirement planning by myself. That is another big misconception, especially if you’re married and your spouse doesn’t have the same interest or experience in investing for the future. You kind of need a financial adviser involved to help you out. And we’re so glad you’ve been with us here on The Active Wealth Show this week, and we trust that all of you, we’re going to have a great week. Remember when you’re investing? Knowledge is power. If you’re going to be a bear, be a grizzly. Be aggressive about getting information about your current portfolio, get your portfolio and analyzed by active wealth. We’re happy to help you. All you’ve got to do is visit active welcome and we’ll take care of that for you. And let’s do everything we can to build for a smart financial plan and a successful retirement future with smart, safe, smart risk, smart tax and smart health investment decisions. And we trust you. All of you’re going to have a great week this week, and we’re going to go through incredible detail about how to build the right type of smart financial plans. You can build a tax efficient fee, efficient and market efficient portfolio that’s going to last and generate the kind of results you’re looking for your successful retirement. Have a great week, everybody.

Producer: [00:47:11] 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 ActiveWealth.com Investment Advisory Services offered 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 BCM, but 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.

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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.

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What To Do In A Market Downturn 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 advisor 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 investing. And now your host, Ford Stokes

Ford Stokes: [00:01:13] And welcome to Active Wealth Show activators I’m Ford Stokes, your chief financial advisor. So glad you’re with us here this weekend. And you know, a lot of investors got a little nervous this week with a 2.5% downturn in the Dow and the S&P 500 on Monday. And then stocks recovered, and let’s go ahead and share our market update with you.

Producer: [00:01:36] Your ActiveWealth.com market update

Ford Stokes: [00:01:41] U.S. stock indexes continued higher on Thursday as investors digested the Federal Reserve’s plans for tapering its asset purchase and raising interest rates. Also, by the way. There were three hundred and fifty one thousand new filings for unemployment, and that was up sixteen thousand on initial filings from last week. So a little bit of a concern there on the unemployment side, and we’ve seen the market recover this week after the downturn. But many of you may have kind of a, you know, an uneasiness about what’s going on in the market. You’re trying to figure out what to do when you see a market downturn in the in the market. You’re nervous and we’re here on this show today. We’re going to share what to do and I’m just going to go straight into it. Number one is I would encourage you to talk to a fiduciary like us. Go ahead and reach out to us at ActiveWealth.com or you can call us at (770) 685-1777. You want to talk to Fiduciary who’s going to put your needs ahead of their own. So example when there was a significant downturn in the market on Monday and we sent out a market update on Monday from our chief investment officer, Mark DiOrio. And this is the update that we shared.

Mark DiOrio: [00:03:05] Hi, this is Mark DiOrio Chief Investment Officer, Mr. MarketWatch. For the week of September 20th, a pullback has developed led by fears that Evergrande Group, a large Chinese real estate developer, is defaulting on its loans. As we pointed out, as a risk in the third quarter market outlook, China is experiencing a rapid credit contraction, and that’s often when negative surprises happen. As markets stalled on the upside last week, we rolled the smart option put as a recap. Earlier this year, we sold the Spy or Spy three 50 put and moved it up to the four hundred put as prices rose and as the price of Spy moved near four 50. Recently, we rolled the put up to the four point fifty put to more fully hedged those nice gains. We are also taking advantage of today’s rise in market volatility to negotiate October’s flash notes. Volatility is one of the inputs to pricing the yield, and when volatility increases, there’s often a little more premium or yield to harvest. The final terms of the October flash note will be out shortly. This has been the market watch for the week of September 20th,

Ford Stokes: [00:04:10] And so it’s good to know the reason why the downturn. It’s good to know that a major Chinese real estate company was defaulting on their loans, and they were raised wondering if the Chinese government is going to bail them out. And then the Fed came out and said, Hey, we’re going to taper our asset purchases and we’re going to raise interest rates a little bit. And but we’re going to continue to buy bonds. And so that kind of settled things down in the market and didn’t make the market even more nervous, which is great. But it’s good to know and good to hear from your advisor. Hey, here’s what’s going on in the market. This is why you saw the downturn. This is why it’s likely not a sustained thing. It was a it was a significant blip and it was a concern that, you know, a major Chinese real estate company defaults on loans. And that was the reason for the major downturn. That was the catalyst for it. The next thing you ought to do is consider a bond replacement strategy. Third would be to consider a Roth latter conversion and minimize the taxes you’re going to pay during retirement. Try to get into a smart financial plan that includes smart risk investing with tactical asset allocation that doesn’t just hang in there. As Rick Page said in his business sales book Hope is not a Strategy. Hope really isn’t a strategy. And let me ask you guys and gals if you’re driving around Atlanta right now or are you thinking I just need to hang in there and it’s OK that my broker or my advisor didn’t get in touch with me on Monday or Tuesday.

Ford Stokes: [00:05:43] But if it’s not OK with you and you want better communication and you want to receive update emails or you want to see receive a phone call, then I would encourage you to give us a call at (770) 685-1777. You can also schedule your free consultation at ActiveWealth.com. There’s just a little set an appointment button in the upper right corner. Then you just visit ActiveWealth.com and you’ll get booked directly into my calendar and you’ll speak directly with me. So we’re going to give you access, we’re going to help you. And we’re also going to help you feel a little bit better about what’s going on with things and why things are happening. Then we’re also going to try to implement a bond replacement strategy so that you’re not exposed to systematic and unsystematic risk with bonds, interest rate risk with bonds and reinvestment risk with bonds. And at the beginning of the next segment, we’re going to go ahead and play a chapter of my new book, Annuity 360, and you can get that book if you just visit Annuity three six net, that’s annuity360.net, and you can download that book right there right then, and it’s absolutely free for you. And we do that on the front end because we want you to be able to make informed decisions when you’re trying to plan for your retirement. And we don’t want you to make hasty financial decisions, we just don’t. And now we also want to share our inflation demonstration because this one’s an important deal.

Producer: [00:07:10] It’s time for an active wealth inflation demonstration.

Ford Stokes: [00:07:18] The cost of vehicles and manufacture of these vehicles is stalled due to a chip shortage and other supply chain disruptions, forcing many to opt for used cars, driving the price of used cars and trucks up by more than 40% over the last 12 months. We like to suggest downsizing to one car and making, you know, an electric vehicle your car of choice if that suits your lifestyle and weekly routine or invest in a hybrid because we’re just trying to reduce the fuel costs. The cost of operating the vehicle, et cetera. I think Tesla came out and said that driving one of their vehicles is literally like the same equivalent of driving a Honda Pilot. Over time, it’s the same cost of the vehicle because there’s no oil changes. There’s no fuel cost. You have electric charging costs, but there’s a significant difference in the fuel cost versus the electric charge. If you’re in retirement and you can get away with it, try to go down to one vehicle or make sure one of your vehicles is a hybrid or an electric vehicle because you can dramatically reduce your fuel costs. Listen, we’ve got a couple of minutes left in this segment, and what I want to do is I want to kind of just recap what a smart financial plan looks like and what you need to do during this time of uncertainty. And you’ve got real concerns about what’s going on with the Biden administration or you’ve got real concerns about what’s going on in the market and market opportunities out there. So number one is you ought to consider scheduling a financial consultation. You ought to inspect what you expect about your current portfolio and how it’s reacting.

Ford Stokes: [00:08:54] If you saw a significant downturn and market loss on Monday at the end of trading Monday, then you probably ought to give us a call and you can call us at (770) 685-1777. Most people have a tough time remembering phone numbers. All you got to do is remember one website. It’s just ActiveWealth.com. But if you’re being asked to just hang in there with your investments, then I would encourage you to do more than that. Plan your work and work your plan and go ahead and do everything you can to understand the risks you’re taking with your current portfolio. Understand the fees you’re paying the expense ratio of your portfolio. If you don’t know what an expense ratio is within your portfolio, then you should visit ActiveWealth.com and book an appointment with me and understand what your risk level is measured by standard deviation. If you don’t know what standard deviation is within your portfolio or you don’t know the definition of it, then I would encourage you to go ahead and visit ActiveWealth.com and book an appointment with me. And we’re it’s an absolutely free consultation and it’s a $500 value, but we’re doing it and we’re offering it for free for listeners to the active, well, show on purpose because we want you to make an informed financial decision about your retirement future. We just do, and we’re fiduciary. We’ve got to put your needs ahead of our own even before you start working with us. And so that’s our goal today is to make sure that we help you understand what’s going on in the market and what to do about it.

Ford Stokes: [00:10:26] And we come right back, we’re going to hear about a bond replacement strategy that can reduce the risks and get you likely a higher rate of return and generate a consistent income that you can never outlive. Just something to consider. Or we’re going to talk about bond replacement right after the break, and we’re going to talk more about how to build a smart financial plan again. Smart financial plan equals smart risk plus smart, safe plus smart tax strategies. All of that added together is a smart plan, and we’re talk more about that during today’s show. And if you’re just doing the hang in there and the buy and hold approach, hope is not a strategy. As Rick Page said in his business sales book, We need to do more than that. And I would encourage you to take that first step, that next step and go ahead and visit ActiveWealth.com and book a consult with us. And we’re happy to help you build a customized retirement plan for you. And we’ll talk about what you can expect when you come into our office in the next segment as well. You’re listening Active Wealth Show right here on AM 920 the answer We’re so glad you’re with us on this important active wealth show. After a significant downturn early on Monday, where the where we saw also the market’s rebound, but Monday was a pretty big scare for a lot of folks and we’re here to help you and the sector well, show right here on AM 920 the answer.

Ford Stokes: [00:12:15] And welcome back to the Active Ball Show activators, I’m Ford Stokes, the chief financial adviser, I’m joined by our esteemed executive producer, Sam Davis. He’s also the ambassador of the weekend, so let’s hear it.

Producer: [00:12:27] Oh man, welcome to the weekend activators. And this is a weekend that’s going to start a little bit later for me because I’ve got something big coming up on Saturday morning, a big obligation that I’ve got to take care of. Don’t you hate that when you’ve got a big obligation on Saturday morning? But once it gets over, man, the weekend is going to be right out in front of me. I’m going to be watching the Ryder Cup. The weather is going to be fantastic here in Georgia. Highs in the 70s. Are you kidding me? Leaves are on the ground. It’s fall. I’m excited.

Ford Stokes: [00:12:56] Yeah, it’s going to be amazing. So I forgot to share some news about the show in the first segment because I’m so focused on taking care of the activators out there. Sam, what did I forget?

Producer: [00:13:10] Well, we forgot to mention that this right here, folks. You’re listening to the 100th episode of the Active Wealth Show, which is awesome. I’m so excited for you for that. You’ve been able to do this for one hundred episodes, and I’m so excited for the activators that have stuck with us through a hundred episodes. And man, we went all through the pandemic didn’t stop the act. Well, show kept it going, racked up fifty two fresh episodes for the activators out there and we continue to help them today. So congratulations Ford, and we’re going to go for one hundred more and then some.

Ford Stokes: [00:13:42] Well, I appreciate that Sam and I am holding up my water bottle, toasting you and the activators for all of your help. And thank you so much to all the activators for sticking with us and listening to us for 100 plus episodes. There’s a lot of folks that have listened to every single one of them and we just really appreciate. All of you, we want to help you build a successful retirement that is fee efficient, market efficient and tax efficient. And yes, I do repeat that every single show. But it is really important, and Sam, you have been such. A help and. And thank you so much for everything you do for us to make sure that we get the message out to the folks because listen, with anything knowledge is power, but it is more important than ever to be fully educated on what to do because, you know, things have changed in the retirement game it used to be. You could do a 60 40 portfolio and you could put 40 percent bonds and you’d be fine. And but right now, it’s really not. I mean, we’re in a slightly rising interest rate environment. Bonds are losing some market value, even though they might still get you the income that they promise. And you’ve got a significant amount of bonds out there, and it’s just a little bit scary, and we’ve got to do a much better job at educating folks on the right way to properly structure your portfolio. And that’s what the show is all about. It’s about doing things a little bit differently and saying, you know, I’d love to hear from you. Your thoughts on being on this journey with us and all the feedback you get from activators as well.

Producer: [00:15:31] Yeah. And we love to take that feedback from activators. As the weeks go by and as the episodes air, we like to hear what the activators have to say. We take that into account because really why we’re here is to help others. And that’s really what it’s all about. So we continue to take steps and make the show better as the weeks go by and we’re going to do that well into the future.

Ford Stokes: [00:15:53] Yeah. And if you want to give us some feedback and you want to send us any congratulations or kudos or any of that stuff, I would just encourage you to follow us on Twitter at and our Twitter handle is at ActiveWealth.com for management. It’s at ActiveWealth.com in the letter M and also Active Wealth Management on Facebook as well. And so we’re super excited to help everybody, and it’s really a cool thing that we were now on our 100th show that is really neat. So we promise we’re going to play the bond replacement chapter for my new book, Annuity 360, and you can get that new book at Annuity360.net. Sam, go ahead and play our bond replacement chapter so people can understand the risk they are taking by continuing to invest in and bonds and what they could do to replace those bonds and how they could get a higher average annual rate of return. Chapter 15 Bond replacement

Ford Stokes: [00:16:48] With fixed indexed annuities Big idea Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. Am I firm active wealth management? We believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States historical bond volatility. The nineteen hundred saw two secular bear and bull markets in U.S. fixed income. Inflation peaked at the end of World War one and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until nineteen fifty one. The long term bond yields were at one point nine percent in nineteen fifty one. They climbed to nearly 15 percent in nineteen eighty one in the 1970s. Globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created.

Ford Stokes: [00:18:16] Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market, coming into the twenty first century long term bond yields decline from a high of 15 percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early twenty first century, but there is no guarantee with our current market volatility that this will hold. See Chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history of loan, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rate to have an inverse relationship when interest rates fall. Bond prices rise due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May 24th, 2020. The ten year Treasury note was yielding 0.64% and the 30 year Treasury bond was at 1.27%.

Ford Stokes: [00:19:38] Reinvestment risk of bonds This is the likelihood that an investment’s cash flows will earn less in a new security. For example, an investor buys a ten year, one hundred thousand Treasury note with an interest rate of six percent. They expect it to earn $6000 a year at the end of the term. Interest rates are four percent. If the investor buys another. Ten year note, they will earn 4000 instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market risk This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic market risk This type of risk is unique to a specific company or industry, similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk.

Ford Stokes: [00:21:01] There are two types of risk internal and external internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard & Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point twenty one percent for municipal bonds. However, markups can be as high as five percent, up to 50 dollars per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity, which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive.

Ford Stokes: [00:22:24] Hope you enjoyed that chapter in your book Annuity 360 on bond replacement. Think you understand a little bit of the different types of risks associated with investing in bonds? And also, you can literally delete the advisory and portfolio fees that you pay on the bonds in your portfolio and still get an income. Because there are zero, there’s zero advisory fees when you’re dealing with a fixed indexed annuity and investing in a fixed indexed annuity because the annuity company pays the advisor. They pay me, and I would encourage you to consider a bond replacement strategy, for sure. Now this next segment, we’ve got Ray Martinez, who is the mayor of Loganville. He is running for state representative in his district. It’s kind of in that Loganville Gwinnett area and raise a great American. He’s a Hispanic American. We’re in Hispanic Heritage Month here in the month of September. Ray is a friend of the show, and I think you’re going to like what he has to say, especially for those of you who felt like you didn’t really enjoy the 2020 election, you didn’t enjoy what happened. You’re concerned about some of the things that happen around the elections in Georgia. We’ll have Ray Martinez with us right when we come back on the Active Wealth Show right here on AM 920 The answer.

Ford Stokes: [00:24:16] And welcome back activators, the well show, I’m Ford Stokes your chief financial adviser. And we’ve got a very special guest with us today. He’s a frequent guest of the Active Wealth Show great friend of mine Mr. Ray Martinez, who is the mayor of Loganville and someone who’s protected our country and again, thank you for your service. I think it’s kind of been almost your whole life, your service for our country and service for our community, Ray and just welcome the Active Wealth show

Ray Martinez: [00:24:46] Thank you. Thank you so much, my friend. It’s been I think we talked a few months ago back during COVID. During the time I was telling you what was going on, I was telling you all the great things that we’re doing in Loganville despite this pandemic. But anyway, it’s an honor for me to be here and share what’s going on in our great town with you or with your listeners.

Ford Stokes: [00:25:09] Absolutely. And also, I understand you’re running for state senator too. Is that correct?

Ray Martinez: [00:25:14] Man, I am running. I am running and I’m not looking back, even though I love me. And there’s nothing, you know, and I tell people this, there’s no better job and I know being doing what you’re doing, I know it’s a good job, but there’s no other better job than being mayor of a mid-sized city. It is just amazing. Just this morning, I spoke to a great group of folks at the rotary, and I’m here are my favorite guy, Mr. Ford Stokes. That’s right, after Ford Stokes. You guys know that’s Hispanic Heritage Month this month, and I got to go talk to a Hispanic group and at a school. And so this is the job of a mayor. Man, I mean, we don’t get paid that much for it, but we love it. Just like you said, because I’m being called to service, whether it’s our country, whether it’s our state, whether it’s our community. I love serving in the. And that’s what that’s what I want to be known for.

Ford Stokes: [00:26:10] And I’m sorry, I kind of messed up. You’re running for state representative. Is that correct?

Ray Martinez: [00:26:14] I’m running for state representative, which is one 14 District one 14. Ok. The current representative? Real quick, he’s retiring. So I’m not running against an incumbent. I’m actually running against an open seat District 14. If you recall, it’s mostly Walton County, Loganville, a little bit of Gwinnett and sure, a bit of wind there. So right now, everybody’s staying away from running from Ray Martinez. And I wonder why, right?

Ford Stokes: [00:26:39] Yeah, I bet. So because they know you’re going to win. Ray, do you have a way for people to donate your campaign? Because I’m a huge fan and I’ll send you some money? Absolutely.

Ray Martinez: [00:26:49] You know, the campaigns cost money. They’re not cheap. But yeah. Ray R e y. For number four. So it’s pretty simple.

Ford Stokes: [00:27:01] Ray6GA.com OK.

Ray Martinez: [00:27:04] And there’s a link. There’s a link there. Click on the button or what have you, or you could just mail a check. And now and you know, I could give you that information, too.

Ford Stokes: [00:27:14] But yeah, we’ve got it on the screen here. Also, if you want to see you know this, this interview, you can actually see it at ActiveWealth.com as well. But we’ve got Ray4GA.com up on the screen right here. So for those of you driving around, just visit Ray for.

Ray Martinez: [00:27:33] And a real quick Ford, this is what you’re getting. Ok. This is because I don’t play around. This is what you’re getting.

Ford Stokes: [00:27:41] Yeah, we know that about you for sure.

Ray Martinez: [00:27:44] You’re getting a retired military guy. You’re getting a freedom loving conservative. Ok? I don’t. I don’t. I don’t shy away from my values. And this is what you’re investing in. Somebody to represent you. You and the gold dome.

Ford Stokes: [00:27:59] So we need that. Goodness gracious. We need that. Can we talk specifically about what’s going on in the gold dumb and what’s going on in with elections? I mean, there’s you’ve been on this show several times. You’re a Trump supporter. I’m a Trump supporter. We’ve many, many of us feel like our vote was disenfranchised or some people even feel like their vote was stolen. And it’s also made them less enthusiastic about voting the next time. And I wanted to get your thoughts specifically about being a Hispanic-American and your experience in voting. And then also. What do you say to people that feel like, you know what their state government let them down in the last election, specifically, the governor let them down in the last election? And I’m not putting words in your mouth, but what do you say to those people and how do you get them back out to the polls?

Ray Martinez: [00:28:59] Well, you have to energize, and that’s what I’m trying to do. You try to you’re trying to energize, you know, what happened in 2020? Yeah, it’s terrible. It really is. I really believe that our vote was stolen. I really believe that. Now, can I prove it? No, I can’t prove it. I can’t prove it. But I but I can tell you one thing I was I was downtown at that Tuesday night, and you’re and you know, it was it was about 11:00 or so. And I remember and I took a picture of it. I remember seeing the street, the television screen and it said, Georgia, Georgia, OK. It had Donald Trump. They had Joe Biden. Donald Trump was up by four points, with one percent of the precinct remaining one percent. Ninety nine percent of the precincts were already called. There was one percent. They did not call that election when ninety nine percent and Donald Trump was leading by three or four points. So you’re trying to tell me with one precinct left, Donald Trump dropped four points and Joe Biden, Joe Biden gained three or four points. That’s hard to believe, but you know what? You could. You could make assumptions like that. You could talk about that. But you know what, 2020 happened. What we need to do now is concentrate on 2022. We need to have leaders in the state legislature that are for voter integrity, and I am for that as a Hispanic-American.

Ray Martinez: [00:30:23] I have never been disenfranchised. Never, never. I have voted since 1988. My first election was the George Herbert Walker Bush for president. Sure, being a Republican and I’ve never been disenfranchised. So when you hear people telling you that the minority, you know, we’re being disenfranchised because some of these bills that are coming out with don’t, that’s just talking points. They’re lying to you because a Hispanic American, I’ve never been disenfranchised. I’ve gone to the voting booth. I’ve had my ID that you need it and you know, you need you need an I.D. for just about everything. If you want to go get a drink. You need an I.D. to show, you know, to show proof of your age. What’s wrong with showing it, you know, at the at the voting booth just to see that you are who you are that you’re going to vote for. But hey, man, we need to go out there and energize our folks. This is the reason why I believe that we lost two Senate seats by short by. So a short margin back in January because people were tired and they and they said, You know what? My vote’s not going to count, and they did not go out. And right now we’re suffering in the Senate right now because we don’t have that leadership like we should have had. But guys go out there, please vote and let’s get energized.

Ford Stokes: [00:31:44] Amen. Amen. So also, you know, we need people like you in the Golden Dome to make sure that our election laws are enforced and upheld and even made a little bit more, giving it a little bit more strength, in my opinion. Because right now, you know, none of us feel like, you know, one vote counts and you know, our one vote counts and you know, one man, one vote, one woman, one vote. We feel like there’s been things that have happened where the liberal elite have made the decision that we’re not smart enough to make our own decisions. And listen, I mean, I believe you’ve got to stand for something. You’ll fall for anything. And I’m to the point where I’m putting people like you back on my show because I want to really share the good news. I mean, most financial advisers, they’d be like, Oh, you know, ride the fence, walk the fence. It’s fine. You know, that way you can work with Democrats and Republicans. I’ll be very frank. I really only want to work with Republicans to help protect and grow their money. I really do, because they complain less than anybody else does.

Ford Stokes: [00:32:52] They work hard. They save more money and they will listen. And those are, you know, the best marketing and the best PR. Anything else out there is marketing that will attract to you on a track and want to repel who you want to repel. And that’s why we’re on a conservative talk radio station. I’m an unabashed and unapologetic conservative. I just am, and I believe that, you know, you get what you earn and an honest day’s pay for an honest day’s work. And that’s who you are. I mean, you have not asked for more than what you’re willing to work hard, you know, working in the U.S. military, protecting our country, working as a as a mayor of a small town here in Georgia. I mean, you’re just you just give back to community. I mean, I think you’re a remarkable human being. I just we need more people like you. You’ve got a couple of minutes left in this segment, right? Just share a little bit about what you feel like we need in the Georgia capital.

Ray Martinez: [00:33:51] I’ll tell you what, what, what we need. We need people that’s been there, done for that’s been there. They have the scars to prove it, basically. I’ve got the scars from serving in the military for 25 years, I’ve got the scars from working on the local level for 11 years. After that, I’ve got the scars from being mayor. I’ve got the scars from being for Donald Trump in 2016 when it wasn’t popular. It wasn’t cool to be Hispanic after Trump in 2016. And guess what? Yours, truly. Ray Martinez was the chairman for Hispanics for Trump in Georgia, and it wasn’t popular. So I’ve got the you need somebody out there that that just that says what he believes and that does what he believes. And basically, that’s got a backbone and a spine that’s going to stand up for principle. Now you may disagree and I told people this in the city of Lawrenceville. You may disagree on some of my issues and I’m going to hear you out and we’re going to get along at the end of the day. But you know what? You’re not going to bend me. I’m very I’m not. I don’t bend very easy, and you could tell some of the folks in Bougainville that try to sway me for certain things, whether it’s development, whether it’s mass mandates, whether it’s COVID. Let me tell you one thing about Bougainville. It wasn’t popular. I kept my city open. Believe it or not, I was one of the few cities, and I think we talked about this.

Ford Stokes: [00:35:09] You really saved the city. I mean, you kept you helped business owners like crazy.

Ray Martinez: [00:35:13] That’s right. I helped that. We only lost one business, and I’m very proud of taking this to the gold dome. Ok. We only lost one business in Loganville, and that business was struggling before COVID. Most of the business, all of our business has stayed afloat during COVID.

Ford Stokes: [00:35:28] Everybody, I want you to support. Ray Martinez for State Representative Visit Ray4GA.com. Ray, thank you so much for everything you do for our communities. We really appreciate you. And welcome back activators, the ActiveWealth.com show, I hope you enjoyed that interview with Ray Martinez. And Sam, we’ve got some pretty cool stuff. I’m a big fan on this week in history. In 1969, the Beatles rolled out Abbey Road.

Ford Stokes: [00:36:38] And then we got another great one this day in history, Jim Henson was born in 1936, actually.

Producer: [00:36:51] Why are there so many songs about rainbows and what’s on the other side

Ford Stokes: [00:37:01] And saying, I know that The Muppets are kind of a big part of your family, I think your dad really likes the Muppets. I think it’s just because you enjoyed them when you were a kid. Just give us your thoughts on Jim Henson.

Producer: [00:37:13] Yeah, man, just we were watching a video before this segment of him on Johnny Carson, you know, operating the Kermit the Frog Muppet. So just the way he was able to make those puppets come to life is incredible. He created a, you know, all these different characters for kids and adults to enjoy alike. Honestly, I mean, I don’t I’ve never met anyone who didn’t like the Muppets. So, big fan.

Ford Stokes: [00:37:36] Yeah, me too. It was just good to share that. So. Happy birthday to Jim Henson up in heaven. We appreciate you. And then we talked about expense ratio and standard deviation as two important things you kind of need to know about for your portfolio and know what the definitions of those are. And so I want to go ahead and just at least read what the definition is of the expense ratio and expense ratio. Also sometimes known as management, expense ratio measures how much of a fund’s assets are used for administrative and other operating expenses, and expense ratio is determined by dividing a fund’s operating expenses by the average dollar value of its assets under management, or AOM. Operating expenses reduced the fund’s assets, thereby reducing the return to investors. So. Our expense ratio within our raised star and raise smart beta portfolios that are really a majority of our advisor portfolios that we share with our clients. Now through our through our Ray Brookstone Capital Management. They have an expense ratio that kind of ranges between zero point one five and point one seven. Now most for one K plans that I see that come in when people are getting ready to retire their expense ratios between like point seven and one point zero or even higher. For anybody listening to the Active Wealth Show we do it at zero point nine, five percent? And so we’re usually at much lower than what our competitors are at because we want to make sure that your portfolio is fee efficient.

Ford Stokes: [00:39:20] But what else is interesting is. Our. Expense ratio is crazy lower than most that we see out there. And it almost pays for our fee, because if you’re if you’re operating with like a one point one, five percent expense ratio and ours is only zero point one five. You know, that’s a whole point difference, and that is something to really consider. So you ought to consider reducing your fees. Within your portfolio, because if you do that, you’re going to get a higher rate of return that that stays within your portfolio and it’s going to be more fee efficient for you. And the next definition I want you to make sure you understand is standard deviation, standard deviation is determined as a measurement of risk. The standard deviation is often used by investors to measure the risk of a stock or a stock portfolio. The basic idea is that the standard deviation is a measurement of volatility. The more a stock’s returns vary from the stock’s average return. The more volatile the stock. It is a measurement of portfolio risk, and it’s usually a is a measure of a portfolio’s systematic portfolio risk unsystematic would be an individual stock or an individual ETF you may hold.

Ford Stokes: [00:40:41] But systematic would be systematic to the entire portfolio overall. And if you don’t understand that and you’ve heard those two definitions for the first time and your broker or adviser is not, share that with you, then I would strongly urge you to consider visiting ActiveWealth.com and click that set an important button in the upper right corner. And we’re happy to help you. You can schedule a free consult is a $1500 value, and we want to kind of walk you through what you expect. So when you meet with me, this is what you expect. Number one is I’m going to ask you a lot of questions. What’s going on with your monthly expenses? What kind of income sources you have, whether it’s Social Security or a pension or rental income or just what you’re drawing from your portfolio currently? We’re going to try to understand all of your assets. We’re going to understand what’s going on with your home and add up your discretionary and non-discretionary expenses to try to get to a complete plan on your retirement income. We’re going to give you a retirement income gap analysis. We’ll also give you a portfolio analysis so you can understand the risk you’re taking, the fees you’re paying and all the stuff that doesn’t even show up in your monthly statement like an expense ratio.

Ford Stokes: [00:42:02] And if you don’t know what your standard deviation is, you don’t know what your expense ratio is within your portfolio then. And you’ve listened to our show for a long time that I would strongly urge you to do the right thing for yourself and for your retirement. And Inspector, do you expect and get the knowledge you need and just book an appointment with me by visiting ActiveWealth.com? And you can click that set an appointment button, the upper right corner, and also my Calendly link is just Calendly.com/FordStokes. You’ll get booked directly into my calendar and we’re happy to help you and meet with you and. And there’s a lot of folks that listen to our shows, I mean, many folks have listened to all 100 episodes of our show because they also go to ActiveWealthShow.com. Check that out. And they’ve never called in, and I would encourage you to go ahead and just pick the phone up and call me. And we’re happy to help you and you give us a call at (770) 685-1777. Well, we’ve talked about a lot today. And now it’s time for the final countdown.

Producer: [00:43:15] It’s the final Countdown. So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:43:26] So on today’s show, we talked about the market downturn on earlier on Monday. We talked about what to do and if you’re if you’re concerned about the market and you’re doing just to just hang in there approach, she should consider meeting with a licensed financial adviser who’s a fiduciary. Put your needs ahead of your of our own. And that would be us. We’re happy to help you. You can visit ActiveWealth.com to do that. And we talked about considering a bond replacement strategy and also considering a Roth latter conversion. We didn’t. We ran out of time, so I wasn’t able to share a lot about Roth latter conversion, and we talked to the mayor of Loganville, Ray Martinez, who’s running for state representative in his district over there. And I would encourage you to check out Ray4GA.com. We also played a chapter in my new book, Annuity 360, and you can get that free book at Annuity360.net. And that was on bond replacement. And that was the way we gave you a good idea of what unsystematic and systematic market risk is with bonds and then also reinvestment risk and interest rate risk. All those risks that you face when you invest in bonds and how you can get a potentially higher average annual rate of return just by investing in a fixed indexed annuity instead of investing in bonds. And you can absolutely delete your portfolio and your advisory fees that you pay on the bond portion of your portfolio, and we can help you do that as well. To do is visit ActiveWealth.com and we talked about what you can expect when you meet with us here in our office at the 29th floor of the King and Queen Building.

Ford Stokes: [00:45:06] We also follow all the COVID protocols and you can also meet with you via Zoom. And all you got to do is visit ActiveWealth.com and click that’s set an appointment button. That’s it too you’re literally going to get fifteen hundred dollars vs. worth of free financial services and planning services. Absolutely at no cost to you just by booking an appointment with me. We’re happy to help you. And we have to do this during these uncertain times. With pandemics and social unrest and election uncertainty and all those kinds of things, we’ve got to protect and grow our wealth, and we’ve got to work hard to do that and we will work hard for you. Thanks so much for listening to us on the Active Wealth Show this week. We’re so glad you’ve been with us here on this one 100th episode of the Active Wealth Show. And we just absolutely love you activators. We care about you. Remember with retirement. If you’re going to be a bear, be a grizzly. Be aggressive about your retirement. Seek as much information as knowledge as possible. Good luck to the U.S. and the Ryder Cup. Good luck to the dogs and jackets. This week in college football. Good luck to the Falcons. Obviously, we really hope into the Braves, pull it out and win the NL East Division so they’ll be in the playoffs again. And obviously, good luck to the Atlanta United as well, it’s pretty exciting to go to games there, down there at the bends, and we hope everybody has a great week. And thanks so much for being part of our one hundredth episode of the actual show.

Producer: [00:46:42] Thanks for listening to the ActiveWealth.com. 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 ActiveWealth.com. Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment adviser. Become an Active Wealth management, are independent of each other. Insurance products and services are not offered through BCM that 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. Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to 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..

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What Does Retirement Safety Mean To You? Transcript

Producer: [00:00:00] 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. Registered Investment Advisers and Investment Advisor 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 for for additional information.

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 Act of Wealth Show has grown because activators like you want to activate their retirement planning with sound tax, efficient investing and now your host Ford Stokes

Ford Stokes: [00:01:14] And welcome activators to this special edition of the Act of Wealth Show on the 20th anniversary of 911. And we all remember what happened 20 years ago on 911. For me personally, I’m going to go into all this stuff and just share my own personal experience. Also, we’re going to bring Sam in to talk about it. Our executive producer, Sam Davis, is going to join us as well, but I want to just kind of. Share, so I was at work and. I was at work early, and all of a sudden we had CNN playing on a television in our lobby area and I just run to the restroom, came back and saw. Actual CNN and then the Today show on showing where a plane had flown into one of the World Trade Centers and my sister. He was eight and a half months pregnant. Was living twenty four streets north of the World Trade Center, her husband was an investment banker for Bear Stearns then. And. It was just a shocking deal. And then I was on the phone with her calling her, making sure she was OK and that she felt OK with the baby and her husband was already at work. Down on Wall Street, but he did not work in the World Trade Center towers and. We were on the phone together and. The second plane went into. The second tower and. Literally, my. My sister’s windows shook. She watched it all happen, she was screaming, and I was trying to do everything I could to calm her down, but also try to get her out and off the island and get her to safety.

Ford Stokes: [00:03:14] I had friends there and we were trying to see if we were going to move or not. They she decided to stay put. And obviously the second plane, we all knew it was a terrorist attack, we knew it was on purpose, we knew we were under attack. From radical Islamic terrorists, and that was just a shocking, shocking deal and something I hope that never happens on U.S. soil or anywhere in the United States or on this Earth ever again. But more people died. But right around the same number during 911 that died during the Pearl Harbor surprise attack by the Japanese on December 7th 1941. And that’s when we officially joined the war for World War Two. And it’s just unbelievable. Twenty years later, and we can never forget, I don’t want people to normalize what’s going on with 911. And also what’s happened in Afghanistan is incredibly concerning to me and troubling to me because we don’t want to give the Taliban and al Qaida a place to live and breathe and grow to where they can come back even stronger and figure out ways to attack us on U.S. soil and also to attack the Middle East and to attack Europe in Africa and Asia and even Australia. I just don’t want it. I just don’t want it to happen.

Ford Stokes: [00:04:41] And I don’t think this current administration is doing all they can to keep us safe on this planet, but specifically to keep Americans safe. Also, our thoughts and prayers go out to every American who is stuck behind the borders of Afghanistan right now. And whatever we can do on this show to get the word out, to get donations sent to help out folks like the Pineapple Express to get people out of Afghanistan, we’re going to do that here on the show. We are just you’re just humbled by the work that ex-military have done to try to get Americans out of Afghanistan safely and to get Afghani people out of Afghanistan safely. The people that had actually decided to work with Americans and work with the American military. But today is really more about remembering 911, and it’s just one of those things. I mean, I can remember like it was yesterday, also my niece was born. She’s now at the University of Georgia. She was born at Lenox Hill Hospital the same day that they had the anthrax outbreak and problems where they were treating patients that dealt with anthrax. And we knew we were in the right place because that’s where all the TV cameras were going to Lenox Hill Hospital, which was just incredible. I just had to talk to my sister. I was like, Y’all have got to do everything you can to get out of this city. It’s just not safe enough for a brand new family.

Ford Stokes: [00:06:13] And they moved out to New York and my brother in law did the commute in and luckily they’ve thankfully moved down to Atlanta and I kind of in the northwest Atlanta in the Canton area. So all’s well that ends well. They’ve got two great kids and one is on the Moorehead Scholarship at the University of North Carolina and the other one is at the University of Georgia on a hope scholarships so. All’s well that ends well with the Stokes family, but I will tell you it is. I mean, my heart just breaks and weeps for the people who lost loved ones, and if you haven’t been to the 911 memorial, I would encourage you to do so, and I hope that folks are able to tune in to what’s going on with 911 Memorial.org. I would encourage you to visit 911 Memorial Morgue. The heart of their mission is to basically make sure that everyone remembers and commemorates what happened on September 11th and 2001, and their family members of the 9-11 victims today, are going to gather at the Memorial Plaza to read aloud the names of those killed in the 9-11 attacks and the 1993 World Trade Center bombing. And I just think those folks are just doing great work. So Sam, let me bring you in here. Your thoughts on 9-11 20 years later, share your thoughts as an American as we commemorate the 20th anniversary of the 9-11 bombings?

Producer: [00:07:50] No, I certainly remember it. I was young. I was in elementary school, small town Augusta, Kansas. It was early in the morning and all of a sudden everybody was getting up and we were all escorted over to the church. And that wasn’t unusual. But for that day, it was; and the way the adults were acting, you know, people say that it had an impact on the generation of kids that experience that. And that was one of their first memories. And I don’t know how much of an impact it had on my mind and my development, but I do certainly remember that day. I remember going home and seeing the images on the TV screen and the kitchen. Both my parents were home. That was unusual for the middle of the day. What a terrible tragedy. And just appreciate all of the first responders that continue to Serve us today,

Producer: [00:08:42] because when you need help, you need help. And those people don’t even think they just they just step and there and they’re there. So definitely heart goes out to everyone who was affected.

Ford Stokes: [00:08:54] Yeah, I’m glad to get your perspective. What else is? There’s two things that I remember one, and we went up to the 911 to 911, literally within less than two weeks of when it happened because my niece was born right after that and we went down to the site and obviously two planes crashed into the twin towers and it’s just so awful. But we were down there and we were looking at all the pictures. We were looking at folks that were they were looking still searching for family members and it was just so heartbreaking. But I can tell you the first responder perspective. I remember having to grab a mask and get something that was like an N95 mask because I could barely breathe. It was there was so much particulate in the air. There was still burning jet fuel. There were still stuff and I cannot imagine what those people went through and everything that you know. I don’t necessarily agree with Jon Stewart’s politics, but I can tell you his support of the 911 first responders is spot on correct. And you know, our tax dollars need to go to help those people because so many of them have respiratory issues because of what they breathe in while they were looking for people that didn’t care. And I mean, I was coughing for a week when I came back and I wasn’t and I was just walking around down there.

Ford Stokes: [00:10:07] I wasn’t in the middle of the crash site, but we were within a block of one of the trade centers foundations. It was pretty, pretty scary, but that was that one. And then the other one is just one that kind of brings us all together. We always want to kind of uplift when you when you talk about something like this and we’re going to talk about what your definition on this show of retirement safety is today because all of us want to feel safe. We do, and we’ve got some really great stuff today, but I wanted to go ahead and share this one uplifting part of it. I remember all the dust and everybody was the same color. Everybody was just this chalky gray walking over the different bridges, trying to escape New York, if you will. And we’re all Americans. It doesn’t matter your skin color. All I care is, you know, the strength of your character and how can we help you? Retire. With peace of mind, how can we help you enjoy your retirement? How can we help you invest properly? That’s what we’re focused on. We’re here to help you build a retirement. You’re going to be proud of and also retirement you can enjoy and a retirement that your family can enjoy spending time with you and less time worrying about looking at stock ticker or watching the news and being so worried about what.

Ford Stokes: [00:11:30] You know, different things are happening in the world are going to affect your retirement, how is that going to affect your retirement? We want to help you. Build to retirement safety, and we were kind of inspired, we saw a really neat survey and it talked about the things that people are most concerned with regarding retirement safety and what made up their number one definition of retirement safety. We’re going to go over those right when we come back from the break on this show today, we’re going to talk about the definition of retirement safety, what it means to you. And also, we’re going to continue to commemorate and recognize. What happened in nine eleven, all the victims and all their families, and we love you all and we’re praying for you. And when we come back, we’re going to get your definition of retirement safety and what we can do about each part of that to hopefully make sure that you have and build a successful retirement using the act of, well, show right here on AM 920 the answer on this special edition of the Active Wealth show on the 20th anniversary of 911.

Ford Stokes: [00:13:17] And welcome back activators to the Active Wealth Show I’m Ford Stokes, your chief financial advisor, I’m joined by Sam Davis, our executive producer, and we’re recognizing and commemorating all those who died and all those who supported and all the first responders who supported and did everything they could help. During those 911 attacks, where they flew two planes into the World Trade Center towers, and the second thing we’re talking about is what is your definition of retirement safety? And we saw a survey online and we wanted to talk about it. So there were seven things that came up and there was different percentages and stuff, but it really matters what it means to you. So the one that came up the most was a paid off house. That was retirement safety. They’ve got a house that’s paid off, that’s safe where they can live safely and family can come visit them. That was the number one element of retirement safety. Number two on the list was having a million dollars in your IRA and investment accounts in total. When that would make sense that, hey, if I can get a million bucks, I’ve I feel like I’ve safe in retirement, we should be OK. I should be able to live on, you know, the proceeds, the interest from the million dollars and I should be OK. I should be safe during retirement. That makes sense. Number three is a lot of people said, Hey, you know what? I really need a reasonable pension because retirement is really more about income than it is about having one big nest egg and a reasonable pension would be enough to pay their bills.

Ford Stokes: [00:14:56] Less what? You know, Social Security was going to pay for. So whatever the whatever their bills are needed to pay for, in addition to what their retirement income benefit was from Social Security net of Medicare surcharges. They had a reasonable pension to cover that shortfall, and that was, you know, a reasonable. Observation and hey, that’s what retirement safety means to them. And the number four was having $750,000 in a Roth IRA, where they’ve fully done all the conversions and they’ve kicked the IRS out of being their partner in retirement, which I thought was a pretty intelligent. Observation. And a lot of people felt like they were in a good spot because they felt like they were at least protected against rising taxes, where they were going to have to pay too much to the federal government during their retirement, and they wouldn’t be able to travel as much. They wouldn’t be able to buy kids granted by grandkids presents. They wouldn’t be able to. Help with college and rehearsal dinners and weddings and things like that for grandkids. And. You know, if you’re concerned about the safety of your retirement, you feel like you, you really need to do more and you need to inspect what you expect about retirement, and you feel like you need to do more about getting educated on your own personal financial situation.

Ford Stokes: [00:16:27] Then I would encourage you to. Go ahead and reach out to us and schedule your free consultation at ActiveWealth.com, that’s ActiveWealth.com. We have a set an appointment button in the upper right corner and you can just click that set an appointment button and get booked directly into my calendar for your free financial consult. And then number five was. The ability to fund medical bills. So. A lot of people have concerns about their health, but what’s going on? They want to be able to live long enough to. See their kid, their grandkids graduated from college and see them get married and potentially even get great grandkids from the grandkids. And when they get married and have kids. And so the ability to fund medical bills, especially with people that deal with diseases during their 60s and 70s. That was one of the one of the big things about having a safe retirement, and the number six was to fund a great legacy. They felt like if they had enough money to fund a great legacy, that means they had enough money to fund their own retirement and then pass on additional dollars to their kids and grandkids and build a great legacy. And number seven. Which was an interesting one, it was a little bit more icing on top of the sun, maybe even the cherry on top of the Sun was to fund a second home.

Ford Stokes: [00:18:02] To entertain family members and have family members come back to them. And so they could spend quality time with their family members, and they felt like if they had a second home or that was their primary home and they were at the lake or at the beach or in the mountains, and people wanted to come see them on holidays beyond just Thanksgiving and Christmas, they felt like there were more safety in retirement by having that. And I thought that was a really interesting. Observation, so that was kind of a cool thing, but those are the seven things that the top seven things I don’t know if you’ve got. Input that you want to share about what retirement safety means to you and what your top element that you need to have to feel safe in retirement. Then I would encourage you to reach out to us at ActiveWealth.com as in management ActiveWealth.com on Twitter. We’re going to build in some surveys here in the coming weeks. We just decided to talk about this today during this special edition of The Active Wall Show on the 20th anniversary of 911 and. I wanted to at least share those seven things with him, but we’re going to dove into each one of them. And. Again, if you want to give us some of the things that you feel like make you feel safe in retirement, then I would encourage you to send us a tweet @ActiveWealthShow on Twitter.

Ford Stokes: [00:19:29] Our Twitter handle is. The outside active wealth and then the letter M. And with that, I kind of want to get into the first one, which is and we’ve got all five minutes left in this segment. So the number one thing that made people feel safe is they had a. Then a paid off house, they had zero mortgage. Well, that’s great. You also have to remember that you have taxes, you have to pay in retirement. And so if you got a $400,000 house and you’ve got to you’re paying one percent millage, rate and taxes, you’re, you know, you’re able to potentially reduce those down. I want to make sure it’s clear to one of the ways to reduce your property taxes when you’re over sixty five is go back to the courthouse and say, Hey, I’m over sixty five. I don’t feel like I need to be paying for, you know, the school portion of the property taxes because I no longer have school age kids and they will take that portion off your tax bill and you’ll reduce taxes. So it is something definitely to consider. But a paid off house is you’re going to have property taxes, so a portion of your Social Security income benefit is going to go towards paying.

Ford Stokes: [00:20:40] Property taxes on your home. And each year, and you can do it on a basically an annual basis, a lot of times it comes up and. October, November, December of each year in a lot of counties here in the state of Georgia. And listen, a lot of other financial advisers are like, don’t ever pay your house off, I can get you more money. Get that money working for you. I can do better than a three, three and a half four percent mortgage. Well, that’s fine, but we want people to feel safe and they want to feel protected, and I will just share a secret with you and you can lean into the radio here if you want. The people that are happiest, that sit in my office for annual reviews. They’re the ones that have their house paid off. And I’m a little bit different than a typical financial adviser, I would say. Listen, we need to take care of paying the house off. We need to not give too much interest. Back to the mortgage company, and we don’t want to eat up one of the two Social Security income benefit payments that come into the household between the husband and the wife. If you’re married, we don’t want to eat up one of those just paying off more. Just paying a mortgage. So. Also, the House, remember you’re going to have insurance, so you’re going to have an insurance payment and that’s going to be money that’s going to come out of.

Ford Stokes: [00:22:07] Your income, whether you’re using Social Security income benefit to pay for that or you’re using your own personal pension or you’re using withdrawals from your IRA or your Roth IRA or your investment accounts to fund your lifestyle. So again. Our recommendation is go ahead and pay your house off, if you can, if you can afford to do so. Also, downsizing is a great idea. We’ve had Jan Brownfield on here, and we’ll try to get her back on to talk about downsizing. Now’s a great time to consider selling, according to her. I’m not a real estate agent, I’m don’t play one on TV, but there’s no secret that there’s definitely been a run up in real estate values, and it might be a good time to go ahead and sell and downsize and get to a 55 plus community or to sell now and get to a lake that you like and shop around and have fun shopping around with your family. For a lake house or a beach house, that’s a reasonable beach to consider. And obviously, we’ve got St. Simons and Sea Island and Brunswick and St. Mary’s and all that stuff down on the coast of Georgia. But you can also look at in Florida and Alabama and in other states to consider getting on the beach if you want to or get on the lake.

Ford Stokes: [00:23:23] And if you don’t care really how close you are to city, you can really do a great job in getting the right kind of house for you. That’s going to allow you to spend more time with family where they’re going to come to you. So that’s something definitely consider when we come back from the break, we’re going to talk more about what does retirement safety mean to you? We’re also going to continue to commemorate and recognize and remember the folks who died during 9-11 and. We’re so glad you’re with us here on this special edition of the Active Whale Show right here on AM 920 the answer when we come back, we’re going to talk about. One of those elements of retirement safety is having a million dollars in your IRA or investment account and potentially a reasonable pension, and also what it means to have $750000 in a Roth IRA that’s fully converted and where you can. What happens when you do withdrawals from that account? And we’ll talk more about how to fund your medical bills and how to fund a great legacy and build a retirement? You can be proud of that. You’re going to really enjoy because we’re trying to build towards successful retirement right here on AM 920 the answer you’re listening to the active wealth show we’ll be right back.

Ford Stokes: [00:25:22] And welcome back activators to the Active Wealth Show, if you wondered who an activator is, it’s somebody who wants a successful retirement. They want to have a safe retirement, they want to enjoy their retirement, they want a tax efficient fee, efficient and market efficient portfolio that hopefully will deliver a successful retirement. They want to keep growing their money. They don’t want to keep cannibalizing their assets where they’re somehow some way going to run out of money and whether all the left are left with Social Security and family supporting them. That’s actually the number one fear of retirees even more than death because they know that death is going to happen at some point because we don’t. How many immortals these days think we ever have? And it’ll be really neat to talk to an immortal, but I think we have them. It. People are just much more concerned about running out of money during retirement. So let’s just do a quick market update just to kind of get you guys updated. What’s going on this past week? Your ActiveWealth.com market update? So stocks were kind of little changed this week as investors continue to assess the strength of the U.S. economy in an economic data. Initial jobless claims last week fell to a pandemic era low of three hundred and ten thousand. New filings for jobless claims. And listen, the market’s kind of been up and down a little bit this week, but what it means to you is you really need to stay invested.

Ford Stokes: [00:26:56] My concern is if you put all of your money underneath your mattress or you bear it in the backyard, in coffee cans and you get a metal detector so you can find them later, you’re literally just going to lose buying power. And I would encourage you not to just stick money in a checking account. And also, we don’t want to stick money in. Bank CDs are paying. Point six of one percent or less. And if you go to the bricks and mortar banks, you’re going to be walking out of there with zero point zero five of one percent a year, which is never going to allow you to keep pace with inflation. Inflation is estimated to be three plus percent. In fact, there’s a rumor out there that the Social Security Administration is going to give a cost of living adjustment to seniors of six point two percent starting in in October for next year. They’re going to announce that cost of living adjustment, and the estimate is six point two percent. That is remarkable. It’s the highest since like nineteen eighty three, folks. So you’ve got to do more than just putting your money in bank CDs or putting it underneath your mattress or just leaving your checking account. What I would encourage you to do is to consider investing in a fixed indexed annuity that’s only a five year fixed indexed annuity. Most of the fixed indexed annuities you hear about are seven to 14 years. We have one that is five years that folks have just gotten thirty six percent over the last three years in a three year protection period, which called a three year annual point to point.

Ford Stokes: [00:28:33] And they got 12 percent growth each of the three years, which added up to thirty six percent, which is a remarkable number over a three year period. Especially for a product that is safe, where there’s 100 percent financial reserve in that product. That means that the annuity company must invest 100 percent of the money you give them into a 10 year U.S. Treasury bond, so they must invest in the safe investment like the US 10 year Treasury bond. And they take the interest off of that each year and they invest it into options and they take a portion of those gains and they give you a portion of those gains. They’re making money off your money, but your money is growing the market like gains without market risk. Do you consider that for a bond replacement? As well. And here’s the definition of a bond replacement. You’re going to invest in a fixed index annuity. You can get market like gains without market risk. You can protect your hard earned assets. You can delete any portfolio and advisory fees from your portfolio for the portion that you invest in the bond replacement with a fixed indexed annuity. Because there are no portfolio fees or advisory fees with a fixed index annuity, the annuity company pays the adviser like me on the front end and then we’re responsible for servicing that annuity throughout the life of the annuity.

Ford Stokes: [00:29:53] You can also grow your money tax deferred and you can generate consistent income for retirement. The number three thing that built a definition of retirement safety for retirees out there who responded to this survey. Was a reasonable pension, so did you know you can actually create your own personal pension? Well, you can, and we’ve even talked about it in my new book, Annuity 360. So, Sam, go ahead and play. Chapter nine for my new book, A New 360, which is you can create your own personal pension with a fixed indexed annuity. 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. 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.

Ford Stokes: [00:31:19] 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. 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.

Ford Stokes: [00:32:46] 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. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they’ll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. Know the consequences of both.

Ford Stokes: [00:34:10] 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 adviser 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. Hope you enjoyed that chapter of my new book, Annuity 360, where you can learn all you need to know about annuities, which ones to avoid, and which one to buy for a successful retirement. And if you want a free copy of my book Annuity 360, all you’ve got to do is visit Annuity 360 Dot Net. That’s Annuity 360 Dot Net, and we’re happy to help you get that free copy. We can give you a free hard copy or an e-book copy absolutely no cost to you. We do that to try to help educate folks on all the aspects of annuities. This isn’t your grandfather’s annuities, folks, you’re going to be able to get market like gains without market risk.

Ford Stokes: [00:35:27] Male delete any advisory fees and portfolio fees on the bond portion of your portfolio. It’s going to allow you to also more aggressively invest in. To a 100 percent equity portfolio in the rest of your. Portfolio and then also. You able to generate an income as you can never outlive? That’s the true definition of a personal pension. So we’re happy to help you do that. And we’re going to talk about when we come back from the break, we’re going to talk about that other big thing that people were wanting for retirement safety, just having a million dollar nest egg or $750000 in a Roth IRA. And also, how to fund a great legacy. And we’re talking even more about the three main types of investing out there. And then you get to pick which ones are your top two favorites? List the Active Wealth Show right here on AIM nine 10. The answer? I hope you come back with us to learn about the three main types of investing and how to build a safe retirement by your own definition. So we can build that successful retirement for you and your family, and hopefully you can build that lasting family legacy as well. You’re listening to watch it right here on AM 920 The answer will be right back talking about the three types of investing and how to build a successful retirement.

Ford Stokes: [00:37:30] And welcome back activators to the actual show, that’s a special edition of the Act of War show, we’re recognizing and commemorating the people who lost their lives in the first responders who did everything they could to help folks during the nine 11 attacks on nine 11, 2001. I wanted to read a couple of statistics because we like stats here on the Active Well show. These are tough, sobering statistics, though a total of two thousand nine hundred ninety six people were killed on the 9-11 attacks, including 19 terrorist hijackers aboard the four planes. Citizens of seventy eight countries died in New York, Washington, D.C. and Pennsylvania. At the World Trade Center, two thousand seven hundred sixty three people died after the two planes slammed into the twin towers. That figure includes three hundred and forty three firefighters and paramedics. Twenty three New York City police officers and 37 Port Authority police officers who are struggling to complete an evacuation of the buildings and save the office workers trapped on higher floors at the Pentagon. One hundred and eighty nine people were killed, including sixty four on American Airlines Flight 77, the airliner that struck the building on Flight 93. Forty four people died when the plane crashed landed in Pennsylvania. Those are some sobering stats as well. But now and again, our thoughts and prayers go out to every family member who lost loved ones during 911. One of the things that was just incredible on the 911 memorial morgue, the first picture is. A picture of.

Ford Stokes: [00:39:15] So many grandchildren who’d put a sign. On their grandfather’s name. At the 911 Memorial, which is just with an American flag, and it was just it’s just an incredibly sobering image. It’s unbelievable. All right now, let’s go and talk about how we’re going to build retirement safety again because everybody kind of wants to feel safe. These days, and they want to feel safe with their retirement, they don’t want to have to go back to work where they’re going to be making less money. And we want to do everything we can to help people invest successfully, and there’s really three types of investments out there the main three types of investments, and we want to kind of talk through those three and then have you pick the top two for yourself? Also, if you’ve got questions about this and how to build. A safe and sound retirement future. Where we can hopefully reduce risk and also deliver a reasonable rate of return, then I encourage you to give our office a call. At (770) 685-1777 or you can visit ActiveWealthshow.com or ActiveWealth.com and click that set an appointment button in the upper right corner and you get put directly into my calendar. So. We’re talking about what is the definition of retirement safety out there to you? And we heard all kinds of different things, but one of them is, hey, if you have a million dollars in your IRA, your investment account.

Ford Stokes: [00:40:51] You should feel safe, well, there’s three types of ways to invest that account. Number one would be not in the market investing, which is investing in a fixed index annuity. Everything we kind of talked about with building a personal pension where you get growth with safety market upside limited to no downside, your principles and gains are protected contractually with a contract between you and the annuity company. And there’s usually a low cost zero to one percent annual fee. The time horizon these products are usually five to 14 years. We have five year products that you can get that liquidity and get all the way out of that fixed indexed annuity and go to the next one or take the cash and enjoy your retirement lifestyle with the proceeds and the principle that you originally invested and you can potentially earn up to, you know, five to. Twelve plus percent a year, depending on the participation rates with the underlying indexes and the performance of those indexes. And there’s also options for even guaranteed income if you’d like it, but that’s not in the market investing. So that’s the first of the three types. The second of three types is in the market passive. Here’s where you can get one hundred percent of market gains, but you capture one hundred percent of the market losses. And in 2008, let’s say that those types of. Investment portfolios, which were a lot of a lot like the foreign cars out there at the time, they lost 38 percent with the S&P 500, lost thirty seven point one percent from March 08 to March 09 as an example.

Ford Stokes: [00:42:27] And then in 2009, it all came back. But not all the way to twenty six percent. So if that in that case, that’s an area you would have lost if you had a million dollars in your portfolio, you felt like you felt safe. You lost two hundred and thirty seven thousand five hundred dollars, including fees and losses. And that would have left you with seven hundred sixty two thousand five hundred dollars, which for some people is a lifestyle change, something we need to really consider. The number three type of investing, which is there’s really three main types like we talked about. It’s not in the market, is number one in the market. Passive investing is number two, which is kind of a buy and hold and just hang in there approach where a lot of stock brokers were asking their clients to just hang in there during twenty eight and two thousand nine. And then. The third option is in the market tactical. And these are the three main types, but in the market tactically, number three, where the goal is to get 70 percent of the market gains, but only capturing 40 percent of the market losses because you’re rebalancing and you’re not just hanging in there. There’s usually a higher cost of between one and one and a half percent annual fee. So you’ve got the same million dollars time horizons kind of six to eight years.

Ford Stokes: [00:43:45] You don’t want to invest in tactical investment. You don’t want to. You don’t invest in a tactically managed portfolio for just six to eight weeks as an example. And in 2008, you would have only captured by this by these goals, you would only captured about. Forty percent of the market lost, people only lost 16 percent, and in two thousand nine you would have come back 18 percent. You would have you would not have come back the full twenty six percent, though, but you would only lost thirty seven to twenty five as opposed to losing 237 five hundred in Option two. And for most people, only losing thirty seven grand is not. A lifestyle change, but losing two hundred thirty seven thousand five hundred dollars is a lifestyle change with option to most people like option one and three, or option three and one and different orders. Most women like Option one first because they like the safety, because they’re security minded and a lot of the gentlemen really like in the market tactical. And if you want a combination portfolio to see what that looks like with a smart financial plan, then I would encourage you to give our office to call it (770) 685-1777 or visit ActiveWealth.com and just select that. Set an appointment button in the upper right corner, and we’re happy to help you. Are now saying, let’s give them our wrath converter.

Producer: [00:45:12] It’s time for an Active Wealth Roth converter.

Ford Stokes: [00:45:18] So one of the options was seven hundred fifty thousand dollars in a Roth IRA. So I just want to talk about converting to a Roth IRA. Real quick before we did the final countdown, the conversion rules, there’s no income limits or phase out. Taxes paid in in the tax year for the conversion, you’ve got to pay the taxes on the year you convert it, it counts as ordinary income and also may increase your effective taxes for that year. There’s no age limit to convert and no income limit to convert. And the potential tax advantages are no income tax due on future earnings or withdrawals, and it doesn’t count towards Social Security or Medicare surcharges, which is really remarkable because the only two types of tax free investments are Roth IRAs and life insurance. In a Roth ladder, conversion is a method of getting your money out of your traditional qualified accounts, like 401k or 403b, 457 IRA, Sep IRA, or Simple IRA using a little bit of a workaround. You can dramatically reduce the tax you will pay over your thirty five plus year retirement, and this is completely legal to do. But the method involves a little planning. Tax savvy investors want to pay as little income tax as possible, and a Roth ladder conversion allows you to make smart moves that will save money in the long run. There’s no RMDs and no future taxes, if properly planned. Converting to a Roth IRA will guarantee you that you will owe no more additional income tax on the converted funds than any money those funds will earn before you withdraw them during your retirement. The balance in your portfolio will be what you can tap into during retirement, and you won’t have to calculate an after tax balance, which is pretty great stuff. And now for the final countdown, it’s the final countdown.

Producer: [00:47:09] So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:47:18] So on today’s show, we commemorated and remembered the two thousand nine hundred ninety six people who lost their lives on 9-11 2001 in our thoughts and prayers go out to the families and to all of our first responders. Thank you so much for keeping us safe. Thank you to our policemen, our firemen, our emergency workers and our health care workers. Thank you. Thank you. Thank you. And we also talked about retirement safety. We talked about what is your definition of retirement safety? Coming off of a survey that we saw and we talked about the seven things that really make people feel safe during retirement. Number one is they have a paid off house. Number two is they have a million dollars in their IRA. We talked about the three different types of investing between not in the market, investing in the market, passive investing with buy and hold, and then in the market active and in the market tactical in those three different options. And you got chance to select which one you were top to and your favorite, too. We talked about quickly Roth ladder conversion and some definitions of that, and we’re going to talk more about how to build a smart financial plan on next week’s show. We’re going to go into detail on all those areas. We’re so glad you’ve been with us on the Act of Wealth Show right here on a.m. nine 20. The answer Remember regarding your investments, you must inspectors you expect if you’re going to be a bear, be a grizzly with your investments. Do everything you can to take control of your retirement future because we want you to have a safe and sound and successful retirement with a tax efficient market. Efficient and fee efficient portfolio. And I hope everybody has a great week. Everybody signing off from the act of wealth share right on and on to answer on behalf of Sam Davis and myself. We remember all of those who died during 911 and we wish you a happy and successful retirement.

Producer: [00:49:07] Thanks for listening to the Act of 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 ActiveWealth.com. 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.

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What Private Wealth Management Looks Like Transcript:

Producer: [00:01:01] Welcome to the Act of Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs first. He’ll help you protect and grow your wealth. The Act of Wealth Show has grown because activators like you want to activate their retirement planning with sound tax, efficient investing and now your host Ford Stokes

Ford Stokes: [00:01:24] And welcome the active well show activators on Ford Stokes and Chief Financial Advisor. I’m joined by our esteemed executive producer Sam Davis, and Sam’s always been dubbed over the last probably couple of months now, the ambassador to the weekend. We’ve got a big weekend set up, Sam. We’ve got the Georgia Bulldogs playing the Clemson Tigers this weekend. We’ve got the Georgia Tech Yellow Jackets taking on northern Illinois at home on the flats. They’re playing the Huskies and we have got a full on week one of football. We’re pretty excited about that. You got the tour championship here and it’s a little bit fall like it’s starting to crisp up a little bit. So your thoughts, Sam, on this Labor Day weekend?

Producer: [00:02:13] I love how summers cooling off only temps in the mid 80s, not as humid. And man, if you’re a sports fan in the Atlanta area, you have a lot to look forward to this weekend with the top 30 golfers in the world and all the college football going on across the country. So enjoy it.

Ford Stokes: [00:02:29] Yeah. And plus we’re going to try to get our Atlanta Braves back on the right track. The Dodgers took three from us. That was pretty tough, but hopefully they’ll get back on their winning ways and continue to stay in first there and first now. So pretty excited about how the Atlanta Braves have really come on since the All-Star break. All right, so Sam, let’s go ahead and hit them with a market update.

Producer: [00:02:51] You’re ActiveWealth.com market update.

Ford Stokes: [00:02:54] So U.S. stock indexes rose to record highs Thursday as weekly jobless claims dipped to a pandemic era low ahead of the August jobs report. The Dow Jones Industrial Average added one hundred thirty five points, or 0.3 percent, while the S&P 500 Index and Nasdaq Composite Index advanced 0.39 percent and 0.14 percent, respectively. The early gains ran both the S&P and the Nasdaq two intraday all time highs. Initial jobless claims for the week ended August 28th fell to 340000, the lowest since March 2020. Continuing claims also touched their lowest levels since before the coronavirus outbreak. The improvement in claims data sets the stage for Friday’s nonfarm payroll report, which is expected to show the addition of 720000 jobs in August as the unemployment rate fell to 5.8 percent in stocks. The mega-cap technology companies Facebook Inc and Alphabet Inc. Look to extend the record highs one on Wednesday. Apple Inc was also flirting with its own record high in earnings. Chewy Inc shares were sharply lower after the online pet products retailer reported sales for its latest quarter and current quarter guidance missed Wall Street estimates, which is surprising Sam, considering everybody got, you know, a COVID puppy, right? The company predicts its growth rate will moderate as the economy normalizes amid the easing of COVID 19 restrictions. Smith and Wesson Brands Inc reported record quarterly sales that were shy of analysts expectations.

Ford Stokes: [00:04:30] Cost-cutting helped the gun manufacturer achieve record gross margin. Broadcom, DocuSign and Hewlett Packard Enterprise Co. are among the companies set to report following the closing bell. Elsewhere, Virgin Galactic Holdings is facing a Federal Aviation Administration investigation after the flight. The carrier, Richard Branson, the company’s billionaire founder into space, reportedly veered off course. Tesla Inc CEO Elon Musk announced the redesigned Roadster likely wouldn’t be available until 2023. Three years later than initially expected. And in commodities, West Texas Intermediate crude oil climbed a dollar and 67 cents to $70 and 30 cents a barrel, and gold slipped $2 to $18 in 14 cents an ounce. Listen, also the Colonial Pipeline. Everyone, I want you to know that the Colonial Gas Pipeline actually closed down for a couple of days. So because of Hurricane Ida, so be careful and make sure at least you chop off your gas tanks and you’re in your vehicles. And obviously, if you can do everything you can to get an EV to get an electronic B electric vehicle, that’s a good idea and something that would be a really good retirement cost cutting that we’ve talked about on last week’s show. But now let’s get into what we’re going to talk about on this week’s show. So this week’s show, we’re going to talk about what private wealth management looks like.

Ford Stokes: [00:05:59] We have gotten so many questions about, Hey, you’re really different. How does it work? We don’t know. Do I have enough money or not? I feel like I don’t have enough money. And let me just say, say this. Whatever money you do have is incredibly important to you, right? Well, guess what that means, it’s incredibly important to us. We are going to be fiduciaries. We’re going to put your needs ahead of our own. We’re going to work hard to protect and grow your wealth. We’re going to do everything we can to deliver a very efficient market, efficient and tax efficient portfolio. So you can build a successful retirement. We also want you to help build a retirement income you can never outlive. We want to help you build a. Remarkable family legacy, where you can deliver a tax efficient or even tax free portfolio to your loved ones. When you pass away and go to heaven. And if you’re a immortal great, we’d really love to interview on this show if you’re actually immortal. That would be an amazing interview. But most folks are, or everybody we know is going to likely pass away and go to heaven at some point in their lives in the future. And we hope you all live long and prosper, as Spock said on Star Trek. But we’re going to talk today about what are we going to do while you’re here on this Earth? How are we going to inspect what we expect with your retirement portfolio? Knowledge is power.

Ford Stokes: [00:07:27] Our goal here on the ActiveWealth.com was always to educate you. And today we’re going to educate you on what private wealth management looks like. So no one is. You’re going to get a financial plan on the front end. You’re going to get a Social Security maximization report where you understand how you can maximize the Social Security that you’re going to receive during retirement and when’s the best time for you to go ahead and turn on Social Security income. And number two is we’re going to give you your retirement in advance all the way to your 90th birthday. We call this results in advance planning. We want to deliver results for you in advance so you can plan your work and work your plan regarding. Your retirement planning. All the way through your entire retirement, all the way through age 95. And if you want to go to buy as one lady who is. A former British Navy veteran, or she is a current British Navy veteran, she’s a former member of the British Navy. She’s fluent in Russian. We met her, she’s remarkable. She’s going to sail around the world during her retirement and

Ford Stokes: [00:08:39] She’s recently divorced, and she is really excited about the future, but she wants to see her retirement in advance because she needs to know what she’s going to do when she buys that $300,000 catamaran sailboat, she’s going to get a Leopard 39, she knows exactly what she’s going to do. She’s planning what she’s going to do in advance and where she’s going to sail around the world. And then number three, we’re going to really do everything we can to try to fix any retirement income gap that you’ve got because we’re going to deliver a retirement income gap plan for you. Number four is we’re going to. Give you the full retirement income planning where you we can backfill and fix any of your income gaps during retirement, and then we’re also going to try to deliver a smart financial plan now. Smart Financial Plan includes three big areas. Number one is Smart risk, that’s tactical asset allocation will go into that in today’s show. Also, smart safe; smart safe investments with things like bond replacement. Also, you can consider, you know, structured notes if you’d like. It’s a little bit better on the income side and has some buffering up to as long as the market doesn’t lose 30%. Your principles are protected and, you know, we’ve got our August. It was paying 9.54% over the next 12 months as an example.

Ford Stokes: [00:10:14] Then. It’s also going to include smart tax, so smart financial plan equals smart risk, plus smart save plus smart tax equals a smart financial plan. We’re going to help you understand what an expense ratio is. We’re going to help you reduce your expenses within your portfolio. We’re going to help you kick the IRAs out of your retirement account. Believe it or not, you can do that. And if you want to know how to do that, if you don’t know how we can kick the Arabs out of. Being your partner in retirement, and I would encourage you to schedule your free consultation at ActiveWealth.com, that’s ActiveWealth.com, it’s exactly the way it sounds. Activewealth.com and you can click that set an appointment button in the upper right corner and we are happy to help you. Plan for your retirement future. We come back, we’re going to talk more about what private wealth management looks like, we’re going to dove into all of these topics in detail so you can understand how you can inspect what you expect regarding your retirement. And plan for a truly successful retirement. Those are the Active Wealth Show right here on AM920 the answer. Come right back to get started on your own smart financial plan from a successful retirement experts.

Producer: [00:11:43] 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. But, you know,

Ford Stokes: [00:12:15] Welcome back to the Active Wealth Show activators! I’m Ford Stokes, the chief financial advisor, and we’ve got Sam Davis on the board being our executive producer. And we’re talking about what private wealth management looks like. Number one is, we’re going to do everything we can to save you fees and to reduce your fees, the fees you pay during retirement. Also, we’re trying to give you a fair exchange between risk and reward. So risk is measured by standard deviation, and we’ll talk more about standard deviation here in a little bit. But if we can get you a higher rate of return with a lower standard deviation. Then that’s a win that also makes life a little less bumpy during retirement, a little less Ekg type looking line on your portfolio growth line over time. And one of the ways we get started on that is we deliver a financial plan upfront and I want to kind of detail what we give you. So when you come in to meet with us and you visit ActiveWealth.com and click that set an appointment button in the upper right corner, or you can send me an email at Ford@ActiveWealth.com. It’s Ford@ActiveWealth.com. Just like the truck. And yes, I do drive a Ford F-150 truck, so I’m going to stay with the namesake. I guess, even though I’m not related to Henry Ford. Anyway, I wish I was.

Ford Stokes: [00:13:41] But we’re going to give you a financial plan on the front end. That includes the following: it’s going to include number one and portfolio analysis with a Morningstar report and a KWANTI report. So those two third party software companies are going to do the analysis of your portfolio and the assets you currently hold in your portfolio, and they’re going to give us what your standard deviation is. That’s a measurement of risk. And they’re also going to give you what your average rate of returns been over the last 10 years in the last 20 years of the assets you currently hold. We’re not even able to do the archeological dig to see what was in your portfolio in 2008 or 2009 as an example. But when the S&P 500 lost 50.1% of its value from March 08 to March 09. But what we can do is tell you how the assets you currently hold performed over the last 20 years. That includes 08. That includes a pandemic downturn that includes twenty eighteen, where some people lost some value. And I’ll give you a really good picture of what it’s going to look like over the next 20 to 30 years if you stick with your current portfolio. And then we’ll also give you a financial plan to your 95th birthday with your current plan doesn’t have anything to do with us.

Ford Stokes: [00:15:03] We’ll give you eight. This is what your retirement looks like in advance. If you stick with the way you’re currently invested and you stick with your current plan, you stick with what you’re paying in fees, your expense ratio, all our stuff. And the correlation your assets and then will also give you a financial plans, your 90th birthday with our recommended portfolios. And. We’ll let you know if we feel like you’re better off staying where you currently are at. If you want to stay Pat, stand pat, stay exactly where you’re at. We’re happy to tell you that because we’re fiduciary and we’ve got to tell you that. And then the last thing we’re going to give you is a financial plan, your 95th birthday with our recommended portfolios. That also includes a Roth latter conversion plan to get you that smart tax investment strategy. And we think that’s the right way to go. We think that’s the right thing to do. We do all of that upfront is a $1500 plan. I some adviser charging $5000 for those plans. We don’t do that because we’ve got confidence in our plans and their performance. So we don’t charge money upfront because we know that. Our airport floors are likely going to perform well in the future, and therefore you’re going to stay with us. And if you want to get a free financial plan to your 95th birthday and a free portfolio analysis and you want to schedule an appointment right now or you’ve got his call, Deborah and our team at (770) 685-1777 or you can just visit ActiveWealth.com and click that set an appointment button in the upper right corner.

Ford Stokes: [00:16:49] Now another part of. Private wealth management is. Kind of establishing some rules. We can all follow, right? And the first rule that we really we’re going to talk about three rules here on today’s show. The first rule is the rule of 100. The rule of 100 is a way for you to kind of allocate your risk within your portfolio. It basically gives you how much you have at risk in the market, so if you take one hundred and subtract your age, let’s say you’re 60 years old. You’ve got a remainder of 40. That means 40 percent of your portfolio should be invested in securities. How many of you may have almost just driven off the road when that happen? When I just shared that because you’re like, Oh my gosh, I’ve got 80 percent of my portfolios in stocks I can’t afford to take. A fifty point one percent hit like what happened between 2008 and 2009, I’ve got to do a much better job of protecting my assets because I don’t want to go back and work at Wal-Mart as an example.

Ford Stokes: [00:17:55] Because also, many retirees, they find that there’s age discrimination in the marketplace, they find that they can’t make as much money as they were able to in the marketplace. And we need to do a better job, a much better job at protecting the retirement nest egg. And we’re going to do everything we can to do that we’re going to work hard to do that, and part of that is reducing your risk within your portfolio. And so if you’re not following the rule of 100, then I would encourage you to start the rule of 100. And one of the ways to do that is to replace the bonds in your portfolio. And at the beginning of the next segment, we’re going to play Chapter 15 for my new book Annuity 360, that you can get at Annuity360.net. That’s Annuity360.Net, it’s annuity and the number three six zero dot net. And you get a free copy of my book and read up all about it. It’s also on Amazon and Audible, and you can listen to it as well, if you don’t want have to read it. It’s only like 90 pages. It’s quick read. But we’re going to talk about Bond replacement, but the one of the things to do is replace the bonds in your portfolio with. Fixed index annuities instead of bonds, and that would also. Debt that would also reduce your risk level within your portfolio, so Harry Markowitz was given credit for being the founder of Modern Portfolio Theory in 1952, and that stays basically a 60 40 portfolio, 60 percent stocks and 40 percent bonds is a sound portfolio for just about anybody because bonds give you income and also help protect your assets and then 60 percent from the stocks, they’re both negatively correlated assets on the market.

Ford Stokes: [00:19:44] I mean, they’re traded on the same market in the New York Stock Exchange or the American and the U.S. markets in international markets as well. And if you can, you know, keep growing the stock side in the bonds, come along with it and slow and steady wins the race. Even though they’re negatively correlated, you’re likely going to generate, you know, four to six percent over time. And you make enough money to outpace inflation and your nest egg will grow and you’ll be able enjoy, you know, your lifestyle and your retirement and things like that. Well, what I recommend you do is replace the bonds in your portfolio, and we’ll talk about that next segment, but. I’ve got a hint for you to lean in to the radio on this one. You remember nothing else from this show. Remember this? When you invest in a fixed index annuity and you replace the bonds, you pay zero advisory fees, zero portfolio fees if you invest in a fixed indexed annuity as an example.

Ford Stokes: [00:20:49] And you’re going to save that money. Let me ask you, I mean, why are you investing? In bonds. And paying. Advisory fee you is just going to give you in come anyway, and they don’t your bonds don’t get traded very often within your portfolio more than likely. There’s no reason to if you can get market like gains without market risk and without reinvestment risk or interest rate risk or systematic or on systematic market risk. Then if you can avoid all of that and you can get market like gains without market risk, why wouldn’t you do that? And so we’d love the opportunity to give you a full blown replacement strategy as well. Absolutely a no cost to you. And I’ve got to give our obstacle at (770) 685-1777 and we’re happy to help you with that. But rule of 100 is basically you take 100, subtract your age, and whatever’s left over is how much money should be invested in the market. But maybe you don’t want to put only 40 percent in stocks, maybe you want to put 60 or you want to put whatever that is. But I would encourage you to take 20 to 40 percent of your portfolio and invest it in fixed index annuities instead of investing in bonds.

Ford Stokes: [00:22:03] That’s just what I would recommend. And that’s kind of what private wealth means, it looks like it’s a little bit different way of looking at things and it is truly customized constructed portfolios. And so you’re not necessarily paying portfolio fees and advisory fees on every single dollar that’s managed by our firm because we can’t and we’re not allowed to, and we never would anyway. We would never double dip and charge a management fee on top of. The annuities, the annuity money that we end up selling because the insurance company pays us a commission when we sell them, but that’s factored in and it doesn’t cost you any more, any less. So we come back, we’re going to talk more about bond replacement could talking about how to beat the bank CDs with this five and six year product. We just talked about and we’re going to talk more about smart financial planning with smart save, smart risk and smart tax strategies to stay active while show right here on AM nine. When the answer we’re talking about what private wealth management looks like and what you can expect when you call our office and we invite you to give her office a call at (770) 685-1777 and visit ActiveWealth.com to set an appointment button in the upper right corner. We’ll be right back.

Ford Stokes: [00:23:51] Welcome back, activators, the ActiveWealth.com Ford Stokes chief financial advisor, and we’re talking about what private wealth management looks like on today’s show and I want to go ahead and share are beating the bank CD segment

Producer: [00:24:06] Need a higher rate of return from your safe money? Listen up. It’s time to beat the banks CD rates.

Ford Stokes: [00:24:13] So in this week’s beating bank CDs segment, we’ve got one product we want to talk about in most bank CDs or one to three year bank CDs, sometimes five years. But a one year bank city right now offered by Sallie Mae Bank is offering only 0.6%. So it’s like 0.6 of one percent on a one year banks in. And I would beg you to consider an alternative because a fixed index annuity, they must reserve 100 percent of your assets versus a bank. Cd is only required by the FDIC to reserve between three and 10 percent. If they’ve got over $100 million in deposits, a bank must reserve up to 10 percent of their deposits in cash. Well, that’s a remarkable thing that you’ve got 100 percent financial reserve product available to you as required by law. They must invest in US sound safe financial product like the 10 year U.S. Treasury bond. And then at the end of the first year, they invest, that interest is invested into indexes or indices like the S&P 500, the Nasdaq 100, the Barclays Atlas five, the Credit Suisse Raven, Credit Suisse Momentum, the JPMorgan Cycle Index. There’s all kinds of different indices that these financial products are tied to. That’s what’s called index linked investing, and that allows you to get market like gains without market risk. But they must reserve 100 percent of the money you give them. Into the 10 year U.S. Treasury bond at the 100 percent financial reserve. Personally, I feel much more comfortable investing with a 100 percent financial reserve product versus a 10 percent reserve product.

Ford Stokes: [00:26:05] And so that is the way to beat banks. It is point blank. And if you want to beat bank CDs, go ahead and visit ActiveWealth.com. Click the set an appointment button in the upper right corner. We’re happy to help you now. We’re going to play Chapter 15, which is all about bond replacement strategy for my new book, Annuity 360, and you can get my new book absolutely for free and Annuity 360 Dot Net. That’s Annuity360.net. But our goal here is to replace the bonds within your portfolio and allow you to protect and grow your wealth. Delete any advisory fees and get a higher rate of return and also generate an income you can never live. So we’re going to try to do all those things with one strategy. And that’s our bond replacement strategy. Sam, go ahead and play Chapter 15, replacing your bonds with fixed index annuities for my new book Annuity 360, and you can get that free ebook at Annuity360.Net. And when we come back, we’re going to talk about some results, some actual results on bond replacement. Chapter 15 bond replacement with fixed indexed annuities. Big idea Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. Am I firm active wealth management? We believe this is a smart way to protect your future.

Ford Stokes: [00:27:36] Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States historical bond volatility. The 1980s saw two secular bear and bull markets in U.S. fixed income. Inflation peaked at the end of World War one and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until 1951. The long term bond yields were at one point nine percent in 1951. They climbed to nearly 15 percent in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15 percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold. See Chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds.

Ford Stokes: [00:29:12] Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history of loan, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall. Bond prices rise due to the COVID 19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this is because bond yields to fall to all time lows as of May 24th, 2020. The 10 year Treasury note was yielding zero point six four percent, and the 30 year Treasury bond was at one point twenty seven percent. Reinvestment risk of bonds This is the likelihood that investments cash flows will earn less and a new security. For example, an investor buys a 10-Year $100000 Treasury note with an interest rate of six percent. They expect it to earn $6000 a year at the end of the term. Interest rates are four percent. If the investor buys another 10 year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds. Systematic market risk This refers to the risk that is inherent to the market as a whole.

Ford Stokes: [00:30:40] It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue. But the correct asset? Allocation strategy can make a big difference on systematic market risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when on systematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk. Business risk There are two types of risk Internal and external internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker. But individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard & Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point two one percent for municipal bonds.

Ford Stokes: [00:32:20] However, markups can be as high as five percent, up to $50 per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time. Unlike an annuity, which provides income for life, you must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive. I hope you enjoyed Chapter 15 for my new book, Annuity 360. Talking about bond replacement and replacing bonds with fixed indexed annuities. When we come back to the break, we’re going to talk about the actual real metrics because we’ve run out of time here in this segment. But we’re going to talk about the real metrics of what it means to replace bonds, but also to delete the advisory fees and portfolio fees within your portfolio that are associated with income. And then the next thing we’re going to do is to talk about deleting the IRAs from your IRA completely by doing it the right way and implementing a sound. And effective and consistent wrath ladder conversion strategy, you will stay active while show right here on AM not in the answer. You’re going to want to come back to hear about real metrics on bond replacement and also how much money you can really save by implementing the right type of Roth latter conversion. We’ll be right back.

Producer: [00:34:03] 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.

Ford Stokes: [00:34:28] And welcome back activators, the ActiveWealth.com show here. Segment four of our show this week. And Sam, let’s go ahead and share with our listening audience. The retirement cost cutter of the week

Producer: [00:34:39] Ready to save some money. Here’s our retirement cost cutter of the week.

Ford Stokes: [00:34:44] So retirement cost cover this week is to go ahead and sign up and get a membership for Triple A. I’m not being paid by Triple AAA. I’m just telling you if you want peace of mind on the road and you want savings wherever you go on the road, especially when you’re traveling during retirement and you’re getting in your car, especially October 19, you might be getting in an airplane less and less. I would encourage you to go ahead and sign up for triple AAA, a triple AAA membership. I think the base membership, the classic membership is enough, but that is going to reduce the amount of money you pay for rental cars, the amount of money you pay for, obviously for hotels. But also if you get that flat tire or your car breaks down, they’ll come out and help you out and triple. AAA stands for the American Automobile Association. And Sam, you had a nice little story about Chevrolet, didn’t you?

Producer: [00:35:35] Yeah, I actually remember that my mom got me started with AAA when I graduated from college. I accepted a job down in Florida, so I was going to be on the road, hauling my life down there and traveling around in the south. And so my mom got me hooked up with the triple AAA membership, and they send you a big packet that you can read through all of the different benefits and savings. I didn’t get close to using even a fraction of all the savings they offer. The best part to me is just that peace of mind that if my car broke down or if I ran out of gas, that I was going to be able to call that number and they’re going to come help me out. They’ve been doing it for years.

Ford Stokes: [00:36:13] That’s great. So that’s our retirement cost cutter for the week. Go ahead and make sure you sign up for Triple-A. Just a good idea there. A promise we came back after the break that we would talk about real metrics on bond replacement. So let’s say you have a million dollar portfolio and you’re you’ve got 60 percent in stocks and 40 percent in bonds, you’ve got $600,000 in securities and $400,000 in bonds. The typical average yearly advisory fee is one and a half percent, if you’re working with a financial adviser or about $6000 a year just off of your bonds alone, that you’re paying that financial adviser. We advocate doing something differently. First of all, if you work with us, your fee is going to be way lower than one and a half percent, in fact, any radio listeners. We will likely help manage your portfolio at a point ninety five percent rate. So I would encourage you to take advantage of that offer and give us give our office a call at (770) 685-1777. Also, if you want to get a bond replacement strategy, you want to get a free financial plan that includes a bond replacement strategy. Then I would encourage you to give our offers a call at (770) 685-1777 or visit ActiveWealth.com.

Ford Stokes: [00:37:39] Now we also promised that we were going to talk about. Two other rules we said we were unsure about three rules. So we’ve already share with you the rule of 100, now we’re going to share the four percent rule. The four percent rule refers to your withdrawal rate. It’s the amount of money you might withdraw each year from the starting value of your portfolio of stocks and bonds during retirement. Experts considered the four percent withdrawal rate to be safe as withdrawals should consist of interest and dividends and out as much as consisting of principal. So if you can stay below four percent, if you can withdraw four percent or less from your portfolio, it is likely that you’re not going to run out of money during retirement, regardless of how long you live. And the CDC says that if a married couple both live to be over 65 years old, they both make it to their 65th birthday. It is more than likely they’ve got a 60 plus percent chance that at least one of them and likely the female because guys, let’s face it, women do live longer than we do. They’re going to make it at 90 years old. So you’ve got a plan for at least one of you living to be 90 years old. So you’ve got to make sure that your money and your portfolio is built to last.

Ford Stokes: [00:38:52] It’s structured properly, and the best way to do that is work with a private wealth firm like our firm Active Wealth Management. We’re here to help you get results in advance planning so you can see what your 35 plus year retirement looks like. All you’ve got to do is just visit ActiveWealth.com and book an appointment with us that we’ve got to set an appointment button the upper right corner and just click that and you’ll get put directly into my calendar. You will not be passed off to another financial advisor. You will talk with me directly and we’re happy to help you. So that’s the four percent rule, that’s rule number two that we’re going to share today. And Rule 72 is a really fun rule, something to kind of consider. The rule is simply a way for you to calculate how long your investments will take to double with a fixed annual rate of interest. So example if you. Got a 10 percent interest rate. We are growing your money at 10 percent. You just divide 72 by 10, and that means your money is going to double in seven point two years. An easier way might be to consider if you’ve got a nine percent interest rate. Your money’s going to double every eight years. That same is true if you’re dealing with debt and credit card debt and credit card interest.

Ford Stokes: [00:40:05] Don’t encourage you to get rid of that credit card debt and pay stuff down because you want to make sure that you’re doing everything you can. To get your money working for you and not have debt work against you. And then the last thing we wanted to talk about today is you want to talk about Roth latter conversion. And one of the big things with Roth latter conversion is that. You’ve got a way to kick the IRS out of being your partner in retirement. Did you know, from 1960 to 1963, the current 24 percent tax bracket was actually 56 percent. That is eight percent higher. Then two acts of our current tax rates. So if you don’t think taxes could go up in the future, I would beg you to consider. The current maximum tax rate is 37 percent, plus your state income tax rate of 5.7, five percent here in Georgia. But the average maximum tax rate was 58.4% in the U.S. from 1913 to 2016. And the average minimum tax rate is eleven point seven. Currently, our current minimum tax rate is 10 percent. So if you don’t think taxes are going to go up in the future, I would beg you to reconsider. So let me give you are Roth convertor of the week?

Producer: [00:41:33] It’s time for an act of wealth. Roth converter.

Ford Stokes: [00:41:39] So, John and Maria, they’re new clients of ours. They’ve got two point one million dollars total in total liquid assets, 1.3 million of it is in tax deferred money that’s in IRAs. And they’re going to convert $200,000 a year for nine years to eat up the principal and the growth on their principal within their IRAs. And they can be able to live on one hundred and twenty nine thousand or less and stay within the 24 percent tax bracket. They’re going to save an estimated. This is estimated and this is what they possibly could save $582,000 and reduce taxes over their 35 plus year retirement. They’re just now heading towards retirement age 60 and 61. That’s saving six figures in retirement, also their kids are going to inherit a Roth IRA, not an inherited IRA, and they’re going to save another $250,000 to $400,000 plus in eliminating taxation, they would pay on the inherited IRA versus inheriting a Roth IRA. If you want to leave a remarkable legacy, I would encourage you to consider. Implementing a Roth ladder conversion and the best time to start is as soon as possible, especially right after you retire. Now, let’s do the final countdown is the final countdown.

Producer: [00:43:07] So let’s recap what you may have missed. It’s the final countdown, the final countdown.

Ford Stokes: [00:43:16] Today, we’ve talked about what private wealth management looks like, we talked about the power of getting results in advance planning with a financial plan up front. It’s a $1500 value at no cost to you. We talked about that. We’ll give you a Social Security income maximization report. We’re also going to talk about retirement income planning and also how to build a smart financial plan. We’re so glad you’ve been with us today. Next, we’re going to talk more about how to build a smart financial plan and how to kick the IRS out of being your partner in retirement. Was The Active Wealth Show right here on AM 920 the answer.

Producer: [00:43:50] Thanks for listening to the Act of 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 ActiveWealth.com. Investment Advisory Services offered through Brookstone Capital Management LLC, a registered investment advisor, become an act of wealth management are independent of each other insurance, product and services. You’re not afraid to be seen, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

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Saving and Growing Your Money During Retirement Transcript

Producer: [00:01:01] Welcome to the Active Wealth Show with your host Ford Stokes. Ford is a fiduciary and licensed financial advisor who places your needs first. He’ll help you protect and grow your wealth. The act of wealth show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host, Ford Stokes

Ford Stokes: [00:01:24] And welcome activators, the ActiveWealth.com Ford Stokes, your chief financial advisor. And I’m joined by Sam Davis, our esteemed executive producer and also ambassador to the weekend. But this weekend is a very special weekend for all of us religious zealots of college football, because it is week zero. Ladies and gentlemen of college football, we’ve got UCLA and Hawaii playing college football on television today or this weekend, which pretty dang awesome. Sam, what are your thoughts?

Producer: [00:01:59] Well, people who know me know I’m a huge sports fan. I’ve worked in college and professional sports in my past. I’m so excited that football is back, even though my beloved Kansas Jayhawks tend to disappoint me every year. But man, that’s so good.

Ford Stokes: [00:02:13] They’re not so swift at football. They’re very swift in basketball, though.

Producer: [00:02:19] Yes. But it is amazing how excited I can get every year, even though I know what the results at the end of the year give up. But what an exciting time football is coming back. Golf is in the middle of the PGA playoffs. It’s going to be here next weekend in Atlanta, Georgia. Good times. Good times.

Ford Stokes: [00:02:40] Yeah. Pure championship presented by Coca-Cola. That’s great stuff over at East Lake Country Club, which is pretty dang awesome and pretty fantastic stuff. So anyway, welcome to the weekend, everybody. Sam, let’s get on with the market update your ActiveWealth.com market update. So this week, the Jackson Hole symposium kicked off and US stocks were mixed Thursday morning as the Federal Reserve kicked off that two day event in Jackson Hole that could lay the foundation for tapering and rate hikes. Dow Jones Industrial Average futures ticked up 11 points or point zero three percent, while the S&P 500 futures and the NASDAQ 100 futures declined point zero seven point one seven percent, respectively. Both the S&P 500 Index and the Nasdaq Composite Index closed at all time highs on Wednesday. The Feds Virgil Jackson Hole symposium begins Thursday, but the key event will be Chairman Jerome Powell speech on Friday that could signal when the central bank could begin to scale back its asset purchases and eventually raise interest rates in an effort to rein in inflation in stocks. Financials were in focus as investors looked ahead to Powell speech and clues win rate hikes might begin elsewhere. Western Digital Corp. and Japan’s Chioggia Holdings Corp. are in talks to merge in a more than 10, in more than 20 in a more than 20 billion dollar deal that would create a giant chip maker, according to The Wall Street Journal, citing people familiar with the matter in earnings. Salesforce.com INX quarterly results topped analysts expectations, and the company raised its full year earnings forecast after closing its acquisition of workplace messenger slack. So Salesforce.com did buy Slack dollar. General Corp’s full year profit forecast missed estimates as the company worried higher costs would hurt margins.

Ford Stokes: [00:04:46] Rival Dollar Tree slashed its annual profit forecast amid similar concerns and noted supply chain issues. Again, folks, we just got issues on getting supply out there and workers and labor shortage and all that kind of stuff. Kitchenware and home goods retailer Williams-Sonoma Inc raised its quarterly dividend by twenty point three percent to seventy one cents per share and announced a new one point two five billion dollar share buyback program. The company’s earnings and sales exceeded Wall Street estimates cosmetics maker Cotting Inc reported better than expected top and bottom line results and forecast annual sales growth for the first time in at least three years. Beauty products retailer Ulta Beauty Inc also issued a strong full year sales forecast. In commodities, West Texas Intermediate crude oil slid sixty eight cents to sixty seven dollars and sixty eight cents a barrel and gold fell a dollar forty to seventeen hundred and eighty nine dollars and sixty cents an ounce. Now, let’s go ahead and get straight into what we want to talk about this week, what we’re going to talk about this week. We’re going to talk about Medicare surcharges, what you can do to minimize those. Also, what to do about planning early and trying to get out in front of it. And the best way to get started planning is to start now. That’s the best time to start. It’s not regretting that you didn’t start planning your 40s and 50s for retirement. It’s go ahead and start planning now. And specifically for those of you who’ve done a great job at saving. We can get you a complete full retirement plan, your ninety fifth birthday.

Ford Stokes: [00:06:29] It’s a fifteen hundred dollar value absolutely for free. And all you’ve got to do is visit ActiveWealth.com. That’s ActiveWealth.com and click that set an appointment button the upper right corner. You can also reach out to us at (770) 685-1777. And what you’re going to get is you’re going to get a Social Security maximization report, you get a retirement income gap analysis, you get a portfolio analysis of your existing portfolio, you’ll get a retirement plan, your ninety fifth birthday, something we call results in advance planning with your current path you’re on in the current portfolio that you with the current assets you currently hold in your portfolio. And then you’re going to see more really great things. You’re going to get a financial plan to your ninety fifth birthday with our recommended portfolios. And then lastly, you’re going to get a retirement plan, your ninety fifth birthday with a Roth Ladder conversion included in that. And if you haven’t embarked on a Roth ladder conversion, I would encourage you to consider doing that. And the best way to do that and the best way to get started is to help us do it for you. So go ahead and visit ActiveWealth.com and click that set an appointment button the upper right corner, and you will get placed into our calendar, or you can just simply call us at (770) 685-1777. So let’s go straight into. So are Medicare costs, and this is our retirement cost cutter for the week,

Producer: [00:08:09] Ready to save some money. Here’s our retirement cost cutter of the week.

Ford Stokes: [00:08:15] So one of the ways to reduce your costs during retirement is to make sure that you kind of minimize your ordinary income for Medicare, so therefore you can reduce your Medicare surcharges. And the question that a lot of people ask is, how does income affect Medicare? Well, the answer is it can. If you’re what Social Security considers a high income beneficiary, you may pay more for Medicare part B, the health insurance portion of Medicare for the physician side. Most enrollees don’t pay for Medicare Part A, which covers the hospitalization. As an example, Medicare premiums are based on your modified adjusted gross income or MAGI that your total adjusted gross income plus tax exempt interest as gleaned from the most recent tax data. Social Security has for the IRS to set your Medicare costs for 2021. Social Security likely relied on the tax return you filed in 2020. The details, your 2019 earnings. If you’re MAG. Or your modified adjusted gross income for 2019 was less than or equal to the higher income threshold. Eighty eight thousand for an individual taxpayer, one hundred and seventy six thousand for a married couple filing jointly. You pay the standard Medicare Part B rate for 2021, which is one hundred and forty eight dollars and fifty cents a month, and higher incomes. Premiums rise to a maximum of five hundred and four dollars and 90 cents a month. If your MAGI exceeded five hundred thousand for an individual or seven hundred fifty thousand for a couple.

Ford Stokes: [00:10:00] You can ask Social Security to adjust your premium if a life changing event caused significant income reduction or financial disruption in the intervening tax year. For example, if your marital status change or you started getting pension or you had an income producing property sell, also, keep in mind, if you pay a higher premium, you’re not covered by hold harmless. The rule that prevents most Social Security recipients from seeing their benefit payment go down at Medicare rates go up, hold harmless. Only applies to people who pay the standard part B premium and have it deducted from their Social Security income benefit premiums for Medicare, Part D, which is the prescription drug coverage, if you have it. Also rise with higher incomes. And when we talk when we come back from the break, we’re going to talk about how you can start planning earlier to reduce your Medicare surcharges and to try to beat back what a lot of people call it. And Irma and she’s the one who actually charges you more money. Irma is IRMAA and that’s where your Medicare surcharges go up if your income goes up. Also, a lot of people think “Hey I’m going to do my Roth conversion when I retire so I can do it at a lower tax rate and it’s going to be great.” Well, that’s great. But just know this.

Ford Stokes: [00:11:28] You’re going to end up generating a higher Medicare surcharge if you see that hundred and seventy six thousand dollars for a married couple filing jointly or a single filer. But we’re going to talk more about what to deal with Medicare and how to properly plan for the right type of income during retirement. Right. We come back to the break and also remember, if you want a free financial plan to your ninety fifth birthday, something we call results in advanced planning, if you want to get your retirement results in it in advance. Then I would encourage you to visit ActiveWealth.com and click that set an appointment button the upper right corner, and we’re happy to help you and give you that free retirement consultation. Absolutely no cost. That’s a $1500 value. It the active also right here on AM 920 the answer will be right back. Talking about how to properly plan to minimize your Medicare surcharges during retirement. And welcome back, activators, to the active wall show on Ford Stokes chief financial advisor. Got Sam Davis on the board with us as our executive producer. And I wanted to. Just finish on our conversation about Medicare, so if you go up above eighty eight thousand dollars filing individually or one hundred and seventy six thousand as a married couple filing jointly. You’re getting up cause yourself. A thousand twenty dollars more. A year. Ninety dollars more a month if you just go to that next level.

Ford Stokes: [00:13:23] And the best way to do that is to avoid that two year look back that Medicare does, that looks back at let’s say you’re about to turn 65. Well, they’re going to look back two years, basically, at your tax return for age 63 to determine your income level. For Medicare surcharges. And the best way to minimize Medicare surcharge is going forward in retirement. Is to consider. Doing Roth conversions way earlier than retirement. So let’s say you’re making $200,000 a year as a married couple filing jointly. Well did you know that the married couple filing jointly, the actual 2021 tax bracket, the twenty four percent bracket ends at three hundred twenty nine thousand eight hundred and fifty dollars? So you’re making $200,000. You could actually move $129,850. Each year when you’re in your 50s. So you might want to consider doing a little bit of Rothblatt or conversion. And keep it that 20 to 24 percent level. You might find that to be more effective for you over time. So let’s say you started at age 50 and you just started you kept doing the conversions of what you can do as you can take money from your IRA. They can withhold the tax dollars. They say they can hold to 22 percent or 24 percent that they’re going to withhold for your tax dollars on the conversion and pay the IRS with it and then move 78 percent or 76 percent of your IRA money into a Roth IRA.

Ford Stokes: [00:15:21] You also are going to start your five year delay clock on that conversion right then. So let’s say you started age 55. You would have access to that, those conversion dollars in your Roth account at age 60. But here’s the deal if you go ahead and convert all of your IRA by the time you retire, let’s say a hundred and something thousand dollars a year for 10 years. And that clause back your 600 to a million dollar for one K or IRA. Also, there’s no 10 percent penalty when you do a rollover from an IRA to a Roth IRA. When you do the conversion, there’s no 10 percent penalty even at age 59 and a half, because you’re not taking income, you’re rolling it over. But it does count as ordinary income. So it will raise your modified adjusted gross income. But what it will do is eventually move the IRS out of your retirement account. And you won’t have that partner sitting there during your 35 plus year retirement with its hand out saying, hey, I want my money. Also, you’re able to eliminate future tax rate hikes, the risk of that. And because also there’s no Ahmadi’s with Roth IRAs either because the government can’t get there any more tax money out of it.

Ford Stokes: [00:16:44] You’re paying them on the front end when you can convert. Also, if you’re sitting on a large investment account that you’re really proud of, that’s grown a lot of money. One of the great ways here’s a great trick. When you’re doing a Roth conversion, convert one hundred percent of the money that you’re. Let’s say you’re moving one hundred thousand dollars over a year for 10 years, you’re going to move a million bucks out of your $800,000 401k and IRA. Because get this, folks, just to you know, there’s growth on those accounts. So if you’re starting a 10 year Roth ladder with 600 or eight hundred thousand, you’re likely going to have to move one point to one point four million, whatever that is, because you’re going to have growth on those accounts. But the best way to do these, to implement a Roth ladder conversion is this. You take money from your IRA and you move it over a dollar for dollar. So you get a hundred grand. You move it from your IRA to your Roth IRA, put a hundred grand in your Roth IRA. So when your IRA goes down, your Roth IRA goes up the one hundred grand that your IRA went down. Right. So it’s dollar for dollar. But then you pay the taxes with taxable money that’s out of your investment account. And we think that is a really smart way to go.

Ford Stokes: [00:18:01] But the other deal is you’re able to eliminate the Medicare surcharges that is generated by withdrawing money eventually after age 65 from your IRA, when you remove money from your IRA. It is classified as ordinary income. It’s not classified as capital gains, and therefore, it counts for Medicare surcharges. What else is interesting is you can’t they won’t let you use that those withdrawal moneys to go put money into a Roth IRA at seven thousand dollars a year. They won’t let you do that, because that’s not ordinary income in their mind. But it does count as ordinary income for Social Security benefit income, taxation or taxation on your Social Security income benefits. And also, it factors in with Medicare and can raise your Medicare surcharges. I have a lot of people who’ve worked in the military who feel like they’ve given all they need to give at the office. They’ve done everything they can for the U.S. government, and they are passionate about minimizing their Medicare surcharges. Also, if you’re if you’re on fixed income. You know, monthly budgets matter and ninety dollars a month can buy some groceries for sure, I can buy some gas, I can pay for a trash bill and a water bill. It can do a lot of different things or a gas bill and. You want to try to keep those costs down so that also there’s huge additional benefits.

Ford Stokes: [00:19:34] By minimizing your ordinary income or what is rated as or classified by the Rs in ordinary income during retirement, by doing a Roth Ladder conversion or investing into life insurance, you can get tax free income. We think that’s a no brainer, and we think you absolutely should do that. So. Here’s the moral of the story, here’s the bottom line what we’re asking you to do is to implement a Wrathall at our conversion earlier. And get to planning also, if you’re planning in your 50s, you can actually start a affording a 10 pay indexed universal life policy. I’ll give you an example, I’ve got a client who. Has a 10 page man, two thousand dollars a month for 10 years. So it’s twenty four grand a year for 10 years. It’s two hundred forty thousand total. That’s a lot of money. But get this, 10 years later, he’s able to withdraw. The illustration shows he’s able to draw withdraw if the indexes do what they’ve done in the past. Again, this is not guaranteed. These are hypotheticals, illustrations, but it’s based on the last 10 years performance of the indexes that the index that he’s linked to within his index, universal life policy. He’s looking to getting twenty five thousand six hundred and two dollars. A year tax free. It’s like generating another Social Security income payment. Absolutely tax free. As a loan against the policy. Because there’s no taxes on loans, right? And.

Ford Stokes: [00:21:17] It’s just next level planning. So if you’re listening to Sound My Voice and you’re in your 50s or early 60s. Or even your 40s. But specifically, if you’re in your 50s and early 60s, you should consider. Getting a plan for minimizing what will be your ordinary income during retirement. And we can help you do that. By helping you implement and a smart financial plan with smart, safe, smart risk and smart tax investment strategies, I mean, folks, this is what private wealth management looks like. And the number one thing I do as a fiduciary is. Reduce risk and put the needs of my clients ahead of my own. And one of those risks is a future tax risk. Also, if you’re driving around right now. Raise your hand and keep one hand on the wheel, if you would, do you think? Raise your hand if you think taxes are going to go up in the future. Sam and I both have got our hands raised in the studio right now. The current president sitting in the White House, not a fan, but. He’s saying he’s raising our taxes, he said that during the campaign trail. They just haven’t hit us with it yet. And they’re trying really hard. So taxes are on sale right now. Consider trying to plan properly, plan for a tax effective or tax efficient retirement, and get a tax advantage portfolio. That’s a mix between a lot of different assets, whether it’s Roth IRAs or life insurance or tax deferred vehicles like fixed indexed annuities.

Ford Stokes: [00:22:58] I got news for you. A taxable investment account and bank CDs is not. Those are not great strategies from a tax perspective. Also, from a growth perspective right now, with the ridiculously low interest rate that banks are, that bricks and mortar banks are paying for banks CDs right now, that’s not a strategy at all. That is a melting ice cube strategy, in my opinion. So the moral story of this segment is I want to make sure you understand that you really should start planning early and earlier than you think for retirement to just reduce some of the automatic costs are going to hit you when you start taking ordinary income from your IRA, which would be your fall on K rolled over into an IRA or your for three B or 457 or any of those rolling into your IRA or even a Sep IRA. There’s going to be consequences for that. And we come back for the break. We’re going to talk about how to calculate your retirement income gap. We’re going to talk about what to do with an investment account that could be a ticking time bomb with capital gains and how to fix that. And we’re going to help you calculate that retirement income gap and help you have a positive retirement income that’s greater than your monthly expenses during retirement.

Ford Stokes: [00:24:17] It was the active wall show right here on AM920 where the answer and come right back to hear about how you can generate a positive retirement income month over month beyond what your retirement expenses are going to be. Welcome back, Activators, the ActiveWealth.com Ford Stokes chief financial advisor here is Sam Davis, our executive producer. And Sam, we were talking at the break about how many folks are listening to the active wealth show on the weekends here on Amnion to hear the answer. And one, how humbled we are that we’re the number one lesson to show on AM not why the answer on the weekends, which is really a credit to all the activators out there. Obviously, you and I both sincerely appreciate that listenership. But also we’ve got a lot of folks have been listening for six, 12 plus months, and they haven’t taken advantage of the free financial plan they can get haven’t visited ActiveWealth.com. They haven’t clicked that set an appointment, but in the upper right corner or they haven’t called us at (770) 685-1777. And I just wanted you to share kind of what you were sharing and during the break about what people should really be doing right now on how they how what your thoughts were about our fifteen hundred dollar offer of getting a free financial plan. That’s a 500 dollar value, absolute no cost to them and no obligation as well.

Producer: [00:25:58] Yeah, absolutely. First off, yes. Thank you to the activators out there. And yet how often is it in in any thing where if you ignore something, it gets better, whether it’s the leaky faucet or that, you know, you need to go see the dentist or your personal finances and what could be more important than your personal finances and your retirement and to have the opportunity to sit across the table from you directly. I know you personally from working with you. You’re a straight shooter and you’re a kind man. You’re going to tell people what they need to make their situation and their retirement the best it can possibly be. So if you visit ActiveWealth.com, you can schedule that free financial retirement consultation today and make this the week that you do that.

Ford Stokes: [00:26:43] Yeah, I appreciate that, Sam. It’s just really important for folks to kind of get the information they need. I think you really nailed it when you talked about a few things. Don’t get any better, like a leaky faucet or going to the dentist and all that stuff. No, no, that’s fine. You don’t want to call the plumber. You don’t want to go to the dentist. But. And yes, we’re passionate about financial management and retirement planning, but we’re also passionate about your lifestyle. We want to make sure that you’ve got the right lifestyle that you’re looking for during retirement and fortunately or unfortunately, the income you can generate from your retirement nest egg. However you do that is really what drives that lifestyle. A retirement is really more about income than it is about one big number. And getting your income tax advantage or tax efficient is really a big deal. And so we want to help folks. So, again, I would encourage our to visit ActiveWealth.com. You can also send me an email at Ford at ActiveWealth.com. But we’re here to help you however we can. And what we want to do next is we really want to talk about calculating your retirement income, calculating your expenses. What we call the retirement income gap analysis. And let’s start first with the most important part of retirement income and see the number one or number two source of income during retirement. For a vast majority of retirees in the United States, which is Social Security. So let’s say you made an average of one hundred thousand dollars a year throughout your top thirty five earning years.

Ford Stokes: [00:28:30] What they’re going to do is they’re going to look at your income and let’s say you’re going to make it all the way to full retirement age at either 66 and four months or 67. If you’re born after 1960 as an example, and you’re going to get if you get Mega ahead of your full retirement age, if you’re if you made an average of one hundred thousand dollars of your top thirty five earning years, you’re getting at twenty seven hundred and thirty six dollars a month. That’s more than likely. Obviously, numbers are hypothetical and individual benefit amounts will vary, but that’s generally where you’re at. But if you if you were to take it at age 62 and a half, like, hey, I just want to take it now, I’m I don’t know if Social Security went around for me later. I just want to get my income now. Then you’re only going to be making two thousand fifty two dollars as an example per month, which is almost seven hundred dollars less and seven hundred dollars a month can buy a whole lot of groceries. And so we would encourage you to try to stick it out and make it your full retirement age. Also, if you wait and take it at age 70, you get eight percent more, eight percent more every single year that you wait until age 70 and you would get up to thirty six hundred eleven dollars per month in a Social Security benefit.

Ford Stokes: [00:29:52] Also, remember, we’re all living longer. The CDC says that if two spouses make it to age 65, it is there’s a 60 plus percent chance that at least one of them is going to live to be age 90. And we need to plan for that. We need a plan for at least one of our one of the spouses living to age 90. The next is just make sure, you know, that the longer you wait, the more you’re going to make the Social Security, but in a monthly benefit. But every situation is different. And it may be better for you to take it at age 62 and a half, because that would put less pressure on your portfolio. We just need to do the analysis again. You’re going to get a free fifteen hundred dollar value and absolutely free financial plan that includes a Social Security maximization report, a portfolio analysis, a retirement income gap analysis, and a full financial plan. Your ninety fifth birthday with your current assets and our recommended portfolios. And then also a Roth later conversion. You’re going to get all of that. Absolutely. At no cost to you. All you have to do is visit ActiveWealth.com or give us a call at (770) 685-1777. We’re happy to help you. So let’s also go through what happens with your retirement income gap analysis here.

Ford Stokes: [00:31:17] So we want to make sure we wait as long as we can to make as much money here. But here’s how you figure out your retirement income, whether you’ve got a positive or a negative gap. So, one, you want to take your monthly expenses. That’s discretionary and nondiscretionary. Right? Discretionary are is things like going out to eat, buying grandkid’s gifts, travel, things like that. Nondiscretionary would be like your mortgage or your rent, your power bill, your Medicare supplement, insurance, things like that, where you just literally can’t reduce those costs. And it’s something that happens every single month. So you add all the discretionary and nondiscretionary expenses up. You add them up together. And then you then look at your income, you take your Social Security income, do you have any pension income? Do you have any other guaranteed income sources? You have rental house income. You add all that up and you subtract. You take your income and subtract your monthly expenses from it. And if that’s a positive or negative number, it shows you whether you have a retirement income gap or retirement income surplus. Also, if you start your retirement with a retirement income gap and or something that is a negative number or your expenses are outstripping your income sources, you’re going to draw down your retirement nest egg. And the way to backfill all that, those expenses and pay for those expenses is to just withdraw money from your retirement nest egg, from your portfolio, from your IRA or your Roth IRA or your investment accounts.

Ford Stokes: [00:33:02] And I would encourage you. To not spend more than four percent of your portfolio every single year, and therefore you likely will not run out of money if you follow that four percent rule. But many of us in the first year of retirement were trying to get, you know, our real estate corrected. We’re trying to get all these stuff, all the stuff corrected and we’re looking at. Serious issues. And we’re spending almost 10 percent of our nest egg the first year just settling out retirement getting used to not getting an income. We’re overspending. We’ve got to be careful about that, because if you spend 10 percent of your assets each year, you’re going to run out of money in basically 12 years, maybe with us. If we’re getting you a higher rate of return, you might last 14 or six years. No, that’s guaranteed. But your time is going to last a lot longer than that regardless. And so I’d encourage you to consider. Make sure you’re spending no more than. Four percent of your assets in a given year. And also sometimes market drawdown can affect that as well. And we’ve only got like a minute left in this segment. And when we come back from the break, we’re going to talk more about building that smart financial plan, building on our strong foundational footprint and making sure that we are building something that is market efficient, be efficient and tax efficient for our future. And we’re going to try to plan for it or we’re going to have a plan.

Ford Stokes: [00:34:41] We’re going to plan our work and we’re going to work out a plan. Right. When we come back after the break, we’re going to talk about what it means to be an activator as well. They’re looking for retirement, delivers peace of mind. And they want to enjoy their retirement, they don’t want to just watch the stock ticker and hope that they can get an exorbitant rate of return to make up for their mistakes that they made in their 40s, 50s and 60s. And so we want to do everything we can to properly plan for your future. And the best time to get started is right now. We’ll be talking about smart financial plan with smart tax, smart risk and smart, safe investment strategies and segment four, right? We come back from the break. You’ll see ActiveWealth.com show right here on Amnion. Join the Aspen. And welcome back to the actual show Activators on Ford Stokes, the chief financial advisor, and we’ve got Sam Davis on the board, our executive producer. And listen, let me just tell you, an activator is, again, it’s someone who wants a successful retirement, somebody who wants a market efficient, be efficient and tax efficient portfolio, and someone who’s inspecting what they expect and someone who understands. Listen, if you’re going to be a bear, be a grizzly about retirement, be aggressive about your knowledge seeking. And let’s go ahead and share our inflation demonstration for this week with them, Sam.

Producer: [00:36:42] It’s time for an act of wealth inflation demonstration now.

Ford Stokes: [00:36:50] So the most recent report from Case Shiller Home Price Index for April showed that home prices were up fourteen point six percent nationally year over year, which marked the highest increase in more than 30 years. The S&P CoreLogic case Shiller data. So here’s the deal. What that means is it’s going to be more expensive for you to live during retirement. And just the housing and the cost of housing is going to go up and we need to do everything we can to minimize our housing costs. Part of that is debt really doesn’t need to factor into it. So people always ask me, hey Ford should I pay my house off or should I keep investing? And listen, as a selfish financial adviser, most financial advisers are going to say, no, invest that money with me. I get your high rate of return, the low mortgage costs. All that’s true. But at the end of the day, the happiest people that I know that are retired are ones who have their house paid off and they can better plan with their monthly budget and they don’t have a mortgage eating up. One of their two Social Security payments. And so I’d encourage you to try to pay your house off. I really would. That’s the right thing to do is a fiduciary, and that’s what I’m going to share. That’s not what you’re going to hear from most financial advisors. But I am going to make sure that my folks don’t have to spend tons of time looking at their accounts, see how they did every single day and stressing over their money.

Ford Stokes: [00:38:24] We need to make sure that you don’t have to stress over your money and that you can generate. The proper amount of retirement income that outpaces your expenses, you never go into the negative and you’re not overdrawing down your nest egg. Also part of that is efficient tax advantaged income, part of that smart tax planning we talk about with smart financial plans. You could do. I mean, you can invest in investments like you can invest in one of the two, only two tax free investments out there, which is Roth IRAs and life insurance. And we help folks with both of those. If you’re in your 50s, that’s literally the best time ever would be to invest. In one of those two products or both, and we can help you, we can run illustrations, we can run a Rothblatt or conversion plan for you, we can help you with the right type of index, universal life policy that fits your needs. We can get you quick free medical review as well as part of that. And you can generate tax free income during retirement. Where the IRS is not involved. We think that’s the right thing to do. That’s what’s called smart tax planning, where you’re building tax advantage or even tax free retirement income. And then also your building, Roth IRAs and not building IRAs, you’re kicking the IRS out of. Your life and also the inheritance for your kids with them inheriting Roth IRAs instead of inheriting an inherited IRA.

Ford Stokes: [00:40:12] And the difference between smart risk and. And is that buy and hold strategy is just having a tactically actively managed portfolio or it doesn’t just hang in there. And we would encourage you to invest smartly, we’re not just doing a buy and hold and hoping and praying that you’re that your portfolio doesn’t ride the market. We would encourage you to really consider doing something different. We’ve talked about this on the show. And we can show you some really great annuities out there. Some are illustrating at nine point eight four percent. On a 14 year product, we also got some. That are illustrating on a five or six year product where we have clients. They have done 12 percent over the last three years, each of the last three years, so they got to accrediting. Amount of 36 percent over the last three years. And they roll their money into. The next annuity where they can either get a bonus, like a 10 percent bonus or they can keep things moving with that same annuity with another three year. Protection period, or what they call in the industry, and a three year point to point. You’ve got one year to year and three year. Point to points that we see out there. We call them protection periods, but not to confuse you. The deal is, is that all you’re doing is replacing the bonds in your portfolio.

Ford Stokes: [00:41:48] Let me ask you a question. Why are you. Investing in bonds and paying. A. Literally, why are you paying advisory fees when you can actually delete the advisory fees of the bond you’re paying? Bonds just pay income, right? Well, if bonds are just paying income and a fixed indexed annuity pays income or indexed universal life insurance, pay you tax advantage or tax free income. Let me ask you, why aren’t you considering that part of the equation? And I would encourage you to give our office a call at (770) 685-1777 and we can get going on tax smart investing. We can help you with that. Again, just give our office a call at (770) 685-1777. Many of us have a tough time remembering phone numbers. I would just encourage you to remember one website. Just remember. Activewealth.com. And there’s a set, an appointment button, the upper right corner, all you got to do is click that and you get put directly into my calendar. You don’t go to any of our other advisors. You go directly to me and I will help you regardless of your financial situation, because I’m a fiduciary. And listen, your money’s important to you, so therefore it’s important to me. We’re here to help you. And now for the final Countdown’s part that everybody looks forward to. It’s the final

Producer: [00:43:19] Countdown. So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:43:30] So we talked about how to reduce your Medicare surcharges. We talked about planning earlier, like in your 50s for retirement, kind of plan your work and work your plan. We talked about how to determine your retirement income gap or surplus. We talked about how you can build a smart financial plan with smart risk, smart, safe and smart tax solutions. We talk more about smart tax solutions than anything else today. But the Medicare surcharge stuff is something you really need to do to consider reducing your costs. But you also get so many more benefits when you implement a Roth ladder conversion and get your eventual income during retirement, more tax advantaged or even tax free. Also, we were covered, really the two tax free investments out there are number one is Roth IRAs, and number two is life insurance. And if you’re in your 40s or 50s and early 60s, even, we can help you with both of those to generate retirement income that is truly tax advantage or tax free. And we’re also so glad you’ve been with us here on the Active Wall Show. We’re here to help you plan for your future. We love talking to the activators out there. Have you been listening to this show for six or 12 months? You haven’t called in. We would encourage you to go ahead and call in. We’d love the opportunity to help you. You can give our office a call at (770) 685-1777 and we’ll give you that free. $1500 plan absolutely for free will give you a retirement plan, it’s a fifteen hundred dollar value at no cost and no obligation to you, and you can just visit ActiveWealth.com if that’s all you can remember after you lost the active wealth show.

Ford Stokes: [00:45:20] Just visit ActiveWealth.com. And there’s a set, an appointment button, the upper right corner. And we’re happy to talk to you. And I would encourage you to, actually. Take action. You haven’t really made a decision unless you’ve taken an action, and go ahead and visit ActiveWealth.com. And let’s get started on your successful retirement today. We’re so glad you been with us here on the Active Wall Show. Hope you enjoyed this week’s show on how to get started with planning earlier, how to reduce your Medicare surcharges, how to maximize your Social Security income. And we’ll give you a free society maximization report, as well as part of those financial plans. Again, thank you so much for being with us here on the Active Wealth Show. And next week, we’re going to talk more about smart financial planning and how we can reduce your risks that you’re facing during retirement and help you really enjoy that retirement lifestyle. Remember, with retirement, it’s more about income. That is about one big number. And also with retirement, if you’re going to be a bear, be a grizzly, be aggressive with your retirement future. Knowledge is power. Seek out knowledge, seek out information and inspect. Would you expect with your retirement future even less the actual show right here on Amnion toward the answer? We’ll be right back. Next week, talking about smart financial planning with smart risk, smart, safe and smart tax investment solutions. All the best. And have a great weekend, everybody.

Producer: [00:46:47] Thanks for listening to the ActiveWealth.com. 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 ActiveWealth.com. Investment Advisory Services offered through Brookstone Capital Management LLC by a registered investment advisor. Become an active wealth management are independent of each other. Insurance products and services are not offered to be Covid 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.

Producer: [00:47:31] 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.

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401k/IRA Review Transcript

Producer: [00:00:31] 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 act of wealth show has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host Ford Stokes

Ford Stokes: [00:00:54] I’m Ford Stokes, your chief financial advisor. Welcome to the Active Wealth Show right here on AM 920 the answer. We’re so glad you’re with us this weekend. And we’ve got an extremely special guest. It’s James Holland with Millennium Investments. And James, you guys have over a billion and a half dollars in foreign assets. And it was great to host you guys over at Chatillon for the first ever, George 401K Summit this week. Literally, it was just this past Thursday. James, can you talk a little bit about the issues you see in furrowing K management out there and what’s going on with foreign case?

James Holland: [00:01:34] Sure. And again, for thank you. What a great event. You guys did a terrific job putting that together. The turnout was terrific. The interaction with the plan sponsors and fiduciary was great, which obviously makes one of those events worthwhile. We could spend all weekend. Create some issues with regards to forward days. But from a from a plan sponsor employer, the people who are running the plan, what we’re starting to see more, obviously, in this day and age, everyone has access to information. But the problem is, is that information accurate and do they fully understand it? So when our industry talks about basis points and expense ratios and fifty five hundreds and parties and interests, that’s not what regular people talk about. So they want to know how much money is in the plan. Are they paying too much? And as you know, because you deal with on a daily basis, are they going to be able to retire in some fashion that they’re looking for? So we feel, again, this might come across not in the politest fashion, but not everyone should be allowed to be working in the 401k space. Just because you’re a financial advisor doesn’t mean you’re a 401k a risk expert. We don’t do any wealth management. We don’t do any tax, you know, strategy type of stuff here. Our focus is 401k plans, because, I mean, you and I have joked about it before. I still have to read your book on annuities because we don’t do it. So you know, besides the fact I know what’s the difference between a fixed and a variable is other than that, that’s about it. So the idea that just because someone’s if there are a lot of people who are saying, oh, my person’s a financial adviser, so they must be in a risk expert, and it’s just not the case. You know, again, I use the same example over and over. You break your arm severely. You’re not going to the Internet. You go into the orthopedist. Why? Because that’s the person who specializes in bones and breaks. And so when you’re working with a four on K plan, it’s very difficult. A lot of. And a lot of our plan sponsors, you know, employers don’t fully understand it and they believe they’re getting sound advice and that advice that they’re getting might not be so sound because the person they’re dealing with is not an expert in that area.

Ford Stokes: [00:04:04] When you guys first of all, it was incredible to have you there at the Georgia 401k Summit. And you guys led all of it. And we were just happy to play a small part. I would also say that it was pretty remarkable that we had over 15,000 employees represented. We’re just so glad that so many foreign key plan sponsors care about their participants. And we’re there, especially in a post Covid pandemic year and all that stuff. It’s just fantastic to see the dedication of the H.R. folks. But what was interesting that came out of that meeting and a lot of stats that we heard during the meeting, I thought it was remarkable that only twenty five percent of all. For K plan, participants actually retire with enough money to adequately retire where they’re not going to just depend on Social Security and Medicare. I thought that was like a really scary stat. And part of that reason was there were just weren’t enough dedicated savers. We weren’t doing automatic enrollment. Some of the things that are coming up with the Secure Act 2.0, which I think they’re calling, you know, securing a strong retirement act of 2021 that did pass in May the House Ways and Means Committee for, you know, by 100 percent. All the Republicans, all the Democrats voted to move it forward. And I just I just wanted you to share what are some of the problems that you see, though, with following Kate plans? Whether it’s excessive fees or poor active or tactical management, that they should have been more strategic and follow the indices and using mutual funds instead of ETFs and revenue sharing that ends up coming out of participants pockets in their accounts within their form. Just if you could just elaborate on some of that.

James Holland: [00:05:53] Sure. And again, that’s the biggest concern. Again, expenses are the are what’s going to eat away most from a participant account. So even if you have good savers and this is the argument, you know, I hear people talk about what we have to get them to save more. And we do we clearly do not save enough. On average, I get that. But going from four percent to eight percent into a bad plan, it’s not helping anybody. OK, because now I would argue more money is being wasted than being say so. And a lot of it is because they don’t understand. So when you when you’re mortgages do every month or you get a bill that says we want this amount of money, that never happens in a fall, nobody gets a bill. No one says, OK, the well, I shouldn’t say that. Sometimes you can see what the admin costs are. But most of the time is why you mentioned revenue sharing, which is basically a way for brokers and record keepers to get paid via the mutual funds without anyone seeing a bill. So it gets taken out of the return, which most people don’t understand anyway. So it’s not like it’s not like even if they saw it, they would know what it means.

James Holland: [00:07:00] But that is a constant drip in terms of. So it’s one half of one percent being taken out every time that fee never stops. OK, so if you’re using that to pay for administration or to pay a broker or an advisor, you know, they’re going to constantly get a raise, even though they might not be bringing any more value or doing any more services. If your accountant came in and said, hey, for it, I’m not going to charge you four hundred dollars an hour anymore, I’m going to charge you 20 percent of the revenue that ActiveWealth.com management makes every year. You’re going to find. I know that’s not how the process works. Well, sadly, that’s how it’s worked in this space for a long time. So we are trying to bring light to that via obviously advisors like yourself who are willing to have these type of conferences and speak to people and say, OK, we know there’s a lot of language. You don’t understand that. Maybe a lot of people understand that. Let’s take the time to break it down so that you can see what the true costs are. And that’s what’s preventing your people from making it to retirement.

Ford Stokes: [00:08:05] Right. And also, I mean, our listeners don’t really have to take our word for litigation about poor management of on K plans. It’s just exponentially exploded.

James Holland: [00:08:19] I mean, there’s hundreds. I mean, literally, I’m not sure. I don’t think a day passed this week where we didn’t see goal of a new lawsuit being filed. Yeah. And I mean,

Ford Stokes: [00:08:31] The whale got Shamu the whale. I’ve got to. I mean, Sea World got sued by their employees for excess fees and money being put in. Also, I believe it was Wells Fargo that’s sitting on a significant lawsuit because of their management of 401k’s

James Holland: [00:08:53] Xerox was just recent. There’s a whole host of colleges for four or three years. And not that we want to use that as the organizations.

Ford Stokes: [00:09:03] We’re just saying these are lawsuits that have been filed against them. And obviously those lawsuits need to go through. We’re not presuming the outcome of those lawsuits,

James Holland: [00:09:14] But it’s not. But to what? To the point there is next large organizations who have the resources and the people to defend themselves. What happens when you get down to the small the mid-sized market who don’t have an in-house Oreste counsel, who don’t have hundreds of thousands of dollars in defense budgets, who have the same problems as these plans? Well, the really one

Ford Stokes: [00:09:37] Thing that you shared with me, I mean, there was a there was an auto repair shop that got sued,

James Holland: [00:09:42] You know, nine million dollar plan. Or something, yeah.

Ford Stokes: [00:09:45] Yeah. And you’re just trying like crazy to fix cars. You’re not you’re just, hey, can we just take care of our employees and do the right thing? So what I’m saying is, listen, if you are a small business owner, let’s say you own an auto repair shop or a body shop or an AC, you’re an AC contractor or a plumbing or electrical contractor. And you’re listening to James and we talk today. I would encourage you to visit ActiveWealth.com and click that set an appointment button, the upper right corner. Again, that’s ActiveWealth.com. And we’ll be happy to conduct a full analysis of your four on K plan. And James will talk about this after the break. But you know, James, you guys created the plan analyze or you own a US patent with the US Patent and Trademark Office, with USPTO on the plan analyzer that shows four K plans, the issues that they’re facing, the potential litigation they face, their excessive fees that are being charged, their plan participants, and also what happens with poor performance and poor investment selection.

James Holland: [00:10:58] And all that information comes from the information they give the federal government. So this is not something that, again, this is you’ve already put it out there. Have you had the opportunity to review it again? We’re just talking about getting a second opinion, no different than the medical diagnosis. And if you’re not interested, great. Then you can continue down the path you’re on. But if you’re really concerned about your participants, but also your own liability, you know, in protecting yourself all, it is the review that Ford just made mention his 401k insurance. That’s all it is.

Ford Stokes: [00:11:31] Yeah. So we’ll talk more about that. And also, what does this mean for your own retirement as an individual, as a four one K plan participant or a recent retiree? Your list, the active well show right here on AM, where the answer will be right back with James Holland with Millennium Investments. When we come back from the break. All right, and welcome back, activators on Ford Stokes, chief financial adviser, And if you’re wondering who and activator is it someone who

Ford Stokes: [00:12:13] Wants to retire successfully? It’s someone who is religiously and consistently listens to the active wealth show here on the weekends on AM nights when the answer also we want to thank you as activators that you are listening to our show on a weekly basis because you have turned the active wall show into the number one listened to radio show on Amnion, Twitter, the answer of the entire weekend. And most of the time the 12 to one time slot and the 11 to 12 time slot on Sundays doesn’t equal the most listeners. But you guys found the right content. You found the right show. You found the right education for retirement, because, again, retirement knowledge is power because we want to help you retire successfully. We’re also going to help you get a fee efficient, market efficient and tax efficient portfolio. And we’re going to work really hard to protect and grow your wealth. And we’ve got James Hall with Millennium Investments here on the Active Wealth Show with us. And James, first of all, thanks for being on the show again. And thanks for coming back after the break. I know you’re busy. Second is, can you just talk about kind of the biggest piece of the pie of these business owners own with this for on K and also if they sign the fifty five hundred form, what are they signing on for as fiduciary for their plan participants and the kind of exposure they have, but also how much more money they could be growing within their own following case if they do some of the right things.

James Holland: [00:13:42] Sure. And for this is a little bit of what we talked about at the 401K summit as well, is, again, we understand the relationship aspect of financial services and wanting to be comfortable with the person that you work with. But again, Ford made mention again the words, whether it’s the HVAC guy, the auto guy, the pizza guy. I personally don’t care what you do in the small business owner in your 401k plan. In most cases, you have the biggest balance. Right? Right. If you’re paying on the percentage of those assets, then you’re subsidizing the retirement plan for everybody else, but you’re not getting any tax break for it. It’s just coming out of your return. So horded. And I work together for the business owner. I’m the employee. He has one hundred thousand dollars. I have a thousand dollars. When you use that ratio for paying 100 times more than me for the same exact investments, the same exact website, the same exact advice. So not that we don’t want to take care of the participants. The participants are absolutely the only thing of the focus.

James Holland: [00:14:43] But business owners forget that, in fact, you are a participant in a lot of these cases as well. From the liability standpoint. You know, again, we argue and I’m sure I can get some pushback, but it’s your greatest personal liability. There is no there’s no corporate veil for making mistake in in the retirement plan space. So, again, we don’t want to scare people into thinking they’re going to get sued. OK, this is not the point. The point is you have a liability, just like when you when you buy general liability insurance, you buy health insurance, you buy a homeowner’s insurance, you buy car insurance, why don’t you get some 401k insurance, make sure the plan is protected so you don’t have these liabilities? Because, again, those lawsuits that Ford made mention, you know, again, they have to be within reason. You can’t you know, obviously, you can’t just sue for any random number. It’s your money. You should you want to make sure that you’re protecting it. And it’s growing at the at the rate and in the manner in which you wanted to.

Ford Stokes: [00:15:41] Right. And so, listen, if you’re driving around right now or you’re listen to us on iTunes or Google Play or Stitcher or Spotify on active well show dot com. I would encourage you to just visit ActiveWealth.com and click that, set an appointment button and book an appointment with myself, and we’ll get James on and the Millennium Investments folks on as well. They’ve got over a billion and a half dollars of foreign assets under management. They know what they’re doing. They’ve also created the plan analyzer to analyze everything that goes on with a four one K plan that is patented by the US Patent and Trademark Office. And again, just visit ActiveWealth.com and click that set an appointment button in the upper right corner. Also, if you want, you can send me an email at Ford at ActiveWealth.com. That’s Everhard at ActiveWealth.com. And just put four on K review in the upper. I mean, in the subject line. We’ll take care of it for you.

James Holland: [00:16:39] Yeah. Again, I mean that I’m sure the folks at Geico might be a little upset with us, but, you know, 15 minutes on the phone and you know, we can have a conversation and we can probably get pretty deep into and you know, and understand this, if the plan is in good shape, you’re going to be told the plan is in good shape and you’re fine. And now you have an independent source telling you now that you’re on the right track. So this is not about trying to. I’m problems this is trying to help folks who have the problems, see them in a different light so that they can get them addressed before they grow into something bigger and causing more.

Ford Stokes: [00:17:14] Well, we also did. You did. Your team did some analysis of the people who actually attended the forum, Kate Plans, who attended the Georgia Fallen K Summit. And you found significant opportunities for improvement. Would you say that’s true?

James Holland: [00:17:27] Yeah, there were there were four a few. Again, remember, this is all public information. So this is stuff that is filed where anyone can see it’s on a free government website. So there’s not some grand conspiracy that Ford and James have put together this nugget. All you have to do is go on every website and you can dig it out. And again, it’s not it’s not that there is not that we’re trying to say, oh, somebody’s doing something bad or somebody. It could simply be a misunderstanding. I mean, that people make mistakes in life. We understand that. All we’re saying is now that has been brought to light. You know, address it. And then therefore and the beauty behind correcting this stuff from a 401k standpoint is when you fix the vast majority of things and you change the process you put in place, it never comes back. So you literally don’t ever have to worry about having these issues ever again after you’ve corrected. I mean, there’s not very many things in life that affords you the opportunity to fix it once and then, you know, go from there.

Ford Stokes: [00:18:26] You know what else is remarkable, Rick, your partner. He actually is an enrolled IRS agent and he’s the good guys. I mean, he’s the one that represents folks and is an advocate for for and care plan sponsors and individuals and corporations when they’re when they’re in trouble with the IRS and trying to work out solutions for them. That was a remarkable thing. But James, can you also just kind of go in to what is a IRS fifty five hundred form, what gets put on it? And also what can an employee do? Who’s got concerns that maybe their foreign plan hasn’t performed as well? What can they do to try to get their own plan? Analyze, review?

James Holland: [00:19:09] Yeah. So I and let’s start with the last part there. We always encourage folks go to human resources or the business owner first. OK. Fix it internally. While there are governmental agencies that can get involved, that becomes, you know, very TVIs. And then, you know, some people get very defensive that way. But walk into H.R. and say, hey, you know, I this is what I’m looking at, you know, show me that I’m wrong or I have some more information or when was the last time we’ve had somebody look at it? So we always encourage folks to do it internally first or say, hey, listen, I was listening to the ActiveWealth.com report this weekend. And, you know, Ford and his group look at retirement plans. Can you at least give them a call? You know, try that approach first and see what they, you know, see what the response is. Again, a lot of it has to do with. Friendships and loyalty and you know, H.R. might not be the final decision maker, they might have to answer to the business owner or the CFO who has that relationship. But at least they can start the conversation. The 5500 itself is a report. I mean, it basically it’s that, you know, the number of participants, how much money is in there, whether any gains and losses, what the expenses are on larger plans, they have to list what the actual investments are.

James Holland: [00:20:26] So it’s just the reporting that the government requires in order to keep the tax qualified status for the plane. But a lot of that is done. Again, I would hate to say in the dark, but at least in the shadows in terms of the information gets provided by a TPA or a record keeper needs to be checked by that fiduciary that, you know, that that person we talked about internally or the business owner, most of them don’t know how to check it or have the time to or just assume it’s right because those people did it. And that’s where that’s where the real trouble comes from. As far as. You know, for the Ronald Reagan fans on the radio show, you know, trust but verify again, it just assumes that everything is right because and if you don’t understand. Hey, raise your head. I don’t understand who can help me, you know, better interpret what this is. The check that it’s right. I mean, we talked about it at the at the summit. The doctor comes in and says, hey, Ford, you know, X happened. You’re going to get a second opinion. So just get a second opinion. That’s all you know. Doesn’t mean you have to follow the second opinion, but now at least you have some more information. And then you can go about and make a more informed decision.

Ford Stokes: [00:21:42] Yeah. James, thanks so much for being with us here on the Active Wealth Show. We had to have you on post the Georgia 401k Summit. We’re going to do it every single year. Also, you’ve been able to provide some continuing education course hours for CPAs and HR members of SHRM, which is their association. And I thought that was incredibly helpful. Also, if you’re an H.R. person or if you want to make sure that HRs and CPAs can get continuing education hours to do is just visit ActiveWealth.com and click that set an appointment button the upper right corner, or you can visit GA401kSummit.com and we’ll get you the link to the three and a half hours that were spent and recorded of all the presentations. And we’ll get you a for our continuing education credit course hours certification. And as long as you’ve watched all that and possibly take a short, easy quiz. But we’re here to make sure that we’re taking care of all the business owners out there, taking care of all the plan participants. And for one case, because that’s where most of the money is. And we want to do everything we can here within the state of Georgia to protect people’s assets because we are fiduciaries. We care about you. We want to make sure that your retirement as the nest egg is growing so you can retire comfortably and successfully. James, thanks again for being with us on the active also for.

James Holland: [00:23:10] Appreciate it. Have a good one. Thanks, guys.

Ford Stokes: [00:23:12] Right after the break, we are going to talk about what this means to an individual investor. And I’m going to share a couple stories that happened this week that are real opportunities for people to continue to improve their financial situation just because they left money in their four one K and what the impact was for that. It was the act of also right here, and I am not sure the answer will be right back. And welcome back, activators of the ActiveWealth.com Ford Stokes, the chief financial adviser, and we just listen to James Holland with Millennium Investments, they manage one and a half billion dollars worth of 401k assets. And we’re kind of the leaders of the content for the Georgia Foreign Summit that we planned here with ActiveWealth.com. And we were over at the Chateau Elan and wanted to thank all the great folks at Chateau Alan Resort for taking great care of us this week. It was Wednesday and Thursday were just an awesome time. And thank you, ladies and gentlemen, for all the things you did to take great care of us at Chatelain. And if you got if you want to do a great kind of staycation that’s local in Atlanta, they’re not paying me to say this, but I would recommend you go ahead and check out Chatillon if you haven’t. It is a pretty place for sure. Next, I kind of want to talk about what came about this week. So we had two people that called in from the active wealth show from listening to active.

Ford Stokes: [00:24:59] Wealth, show two activators called in this week, and both of them bless the show for over six months. And they both had just left their retirement plans at their respective employers. One of them was a federal employee who worked for the CDC and just but he retired literally a year ago and had left his money just within his GSB. And when he looked at the performance, comparatively, he just felt like he would have been better off having been invested elsewhere and possibly invested in our portfolios. And he was just like, I don’t know why I left it in. I was just kind of lazy and I shouldn’t have done that. And then the other is there was an executive with a company who is getting a pension. He turned on his SPIA, single premium, immediate annuity, but he left his 401k there as well. And he’s got limited investment options. He couldn’t continue to invest even though he has a surplus for his pension. And he felt like he’d made a mistake over the last two years. He’d gone two years just leaving his money in his 401k and he was also trying to figure out how I would do withdrawals from up basically a Fortune 500 company. And he’d formerly been in sales, never had a financial advisor and was like really thrilled to talk with us. And he learned quite a bit. At least that’s what he shared. And I just want to make sure you understand that you shouldn’t be leaving your money in your old 401k when you leave, even if you go to work for a new employer.

Ford Stokes: [00:26:28] Is your roll that over into an IRA and control on your own, whether you’re getting it managed by us or you’re trying to manage it on your own? You should be investing in an individual retirement account and you can roll that over. There’s no tax of that. Draw the money for me or for on K to your IRA, just through a traditional rollover process. And you’ve got 60 days from the time you withdraw the money from your fiancé to get it into an individual retirement account. So there’s no taxable event. We make sure that doesn’t happen to you. And if you want to if you want us to take a look at it and analyze your old in case, all you have to do is visit ActiveWealth.com. That’s ActiveWealth.com and click that set an appointment button in the upper right corner. And we’re happy to work with you. You’ll get booked directly into my calendar or we’re happy to help you. And with that, we’re going to play a couple of chapters about what to do, where you can actually create your own personal pension, and also the type of annuity that is just right for you. Go ahead, Sam, and play two chapters from my new book, Annuity 360. You can also get a copy of my free book at Annuity 360 dot net. That’s annuity 360 dot net.

Ford Stokes: [00:27:43] 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. 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 I 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 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.

Ford Stokes: [00:29:13] 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 and your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle. Depending on how that index is performing, 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 arm d.

Ford Stokes: [00:30:31] 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 Ahmadi’s easier. Inspect what you expect with any annuity. Don’t just go with what the annuity agent or advisor tells you. Read it for yourself specifically. You should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. 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. That will help you build a successful retirement and they’ll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income writer. 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.

Ford Stokes: [00:31:58] As discussed above, we recommend no more than five percent be withdrawn each year from your account. Chapter 13, the annuity. That is just right. The fixed indexed annuity, big idea, a fixed indexed annuity gives you a portion of market like gains without market risk. How does it work? An FIA gives the owners or annuitants the chance to earn higher yields than fixed annuities when the index they are tied to perform as well. They typically will also provide some protection against market declines. The rate on an FIA is calculated based on the year over year gain in the index or the average monthly gain over a 12 month period. Fees often have limits on the potential gain at a certain percentage. This is known as the participation rate. The participation rate can be 100 percent, which means the account would be credited with all the gains, or it could be as low as 25 percent. Most FIA’s have a participation rate between 80 and 90 percent benefits. Guaranteed income stream with Americans living longer and spending more time in retirement. Many retirees are concerned about outliving their savings. In turn, they are searching for a product that can help ensure a steady income stream FIAs are designed with guaranteed lifetime income. So you can never outlive your earnings. Diversification of portfolio, a balanced portfolio is essential for managing risk and reward in the financial markets.

Ford Stokes: [00:33:22] Designed for the long term phase are a great retirement vehicle to ensure you’re not putting all your eggs in one basket. eBay’s offer the ability to make some money without the risk of losing it. Secure principal. Even with market volatility, investors will not lose value on their fixed indexed annuities. Your savings aren’t exposed to market fluctuations. So even in a negative market return, you will not fall below zero. You can never lose your interest once it is credited to your principal. Cafes offer long term tax deferred savings. As long as your money stays in the annuity, you will not be taxed on the interest earnings once you receive a payout. The annuity will be taxed just like ordinary income, predictable earnings, because FIA’s offer predictable income. Americans feel more comfortable when withdrawing funds from these retirement vehicles as opposed to an IRA or 401K. Choosing an FIA is an efficient way to plan for your future as your interest earnings rate always remain somewhere between the interest rate floor and the cap. No matter what happens to the market, you can still count on payments throughout your golden years. Potential drawbacks of fixed indexed annuities surrender charges. A surrender charge is a type of sales charge you must pay if you sell or withdraw money from a fixed, indexed and even a variable annuity during the surrender period. A set period of time that typically lasts six to eight years after you purchase the annuity. Surrender charges will reduce the value and the return of your investment.

Ford Stokes: [00:34:56] Withdrawal limits almost all fixed indexed annuities play surrender free withdrawal limits within the annuity contract that generally range from five to 10 percent of the principal. While all annuities must be R&D friendly and provide for a penalty free withdrawal from a qualified annuity account equal to the RMD requirement for the client’s age, carriers’ limit the amount of withdrawal to enable them to grow the money invested for themselves and the client not suitable for short term investing. If you want to grow your money, but you also need access to 100 percent of your money, then a fixed indexed annuity may not be right for you. Chapter 15. Bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed indexed annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial advisor talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. And my firm, active wealth management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money. But there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States. The nineteen hundred saw two secular bear and bull markets in U.S.

Ford Stokes: [00:36:40] fixed income. Inflation peaked at the end of World War One and World War Two. Due to increased government spending, the first bull market started after World War One and lasted through World War Two. The US government kept bond yields artificially low until 1951. The long term bond yields were at one point nine percent in 1951. They climbed to nearly 15 percent in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation, protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created. Early investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of 15 percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold. See chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this Why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields.

Ford Stokes: [00:38:13] Interest rate risk of bonds, bonds and interest rates have an inverse relationship when interest rates fall. Bond prices rise due to the COVID 19 pandemic. Investors have moved their money to bonds because they believe it is a safer investment option. However, this is caused bond yields to fall to all time lows. As of May 24th, 2020, the 10 year Treasury note was yielding point six. Four percent, and the 30 year Treasury bond was at one point to seven percent. Reinvestment risk of bonds. This is the likelihood that investments, cash flows will earn less in a new security. For example, an investor buys a 10 year one hundred thousand dollar Treasury note with an interest rate of six percent. They expect it to earn six thousand dollars a year. At the end of the term, interest rates are four percent. If the investor buys another 10 year note, they will earn 4000 instead of 6000 annually. Consider the possibility that interest rates change over time when deciding to invest in bonds systematic market risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid. Diversification cannot fix this issue. But the correct asset allocation strategy can make a big difference. Unsystematic market risk, this type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur.

Ford Stokes: [00:39:49] For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk, business risk. There are two types of risk, internal and external. Internal refers to operational efficiency, and external would be similar to the FDA banning a specific drug that the company sells. Financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow. They can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker. But individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were. Actually paying. Standard and Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point to one percent for municipal bonds. However, markups can be as high as five percent, up to fifty dollars per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time, unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds.

Ford Stokes: [00:41:20] However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive. Chapter 16 Reduced risk in your portfolio with annuities. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned wealth. We believe that annuities can be the answer to risks in your portfolio. Retirees and pre retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four percent rule. But annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement. An annuity can help create an income you can never outlive. Fixed indexed annuities can protect you from market risk. These annuities are not actually invested in the market. They’re only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks should your index perform poorly. You will either make money or remain flat. Annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout. Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk.

Ford Stokes: [00:42:50] It is important to have an annuity with a payout linked to the consumer price index or CPI instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk. An annuity that increases at a flat rate each year does not offer sufficient protection against inflation. An annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by retire one has shown that you can flip 15 years of returns from retiring during a recession to retiring during a market that is up and completely change your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return. Consider a smart, safe plan with a smart, safe plan. Your money is invested, not in the market. The characteristics of investing, not in the market include growth with safety. Market upside limited to no downside principle and gains protection. Low cost zero to one percent. Annual fee time horizon of seven to 14 years can earn five to seven percent annually. Options are available for guaranteed income. Here are some examples of not in the market investing bank CDs. The annual percentage yield is about one to two percent. Your time horizon is typically one to three years, and you cannot access the funds until the contract is up. Treasuries. The AP is about three percent.

Ford Stokes: [00:44:22] Your time horizon is 10 years. And you cannot access the funds until the 10 years is up. Fixed annuities, the annual percentage yield is between three and four percent. Your time horizon is typically four to seven years. You are able to access the funds during the contract period, multiyear, guaranteed annuities or MYGAs. You get between two and four percent growth on your principal, depending on the duration of your policy. This is less growth than a fixed indexed annuity, but it is guaranteed the annuity company is required to pay you the rate they promise for the duration of your policy. Fixed indexed annuities you receive between five and seven percent growth on your principal. The time horizon is seven to 14 years, and you do have access to the funds in your account if you need them. A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed indexed annuity over other not in the market options. If you invest in Treasuries or CDs, you will lose ground in your investment due to inflation. Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation annuities because they minimize your risk in several areas and they lock in your gains for the use of point to point protection periods, meaning you won’t lose money. It’s the.

Producer: [00:45:53] So let’s recap what you may have missed. It’s the final

Ford Stokes: [00:45:57] Countdown to the final. So we just had a great show, we had James Holland with Millennium Investments, who specializes in 401k plan management. They’ve got a billion and a half dollars of 401k plan money under management. We also talked about all the things that people can do to reduce their fees within 401k’s and to try to get their 401k investment options are optimized if they get a new plan manager and all they’ve got to do is visit ActiveWealth.com and click that set an appointment button, the upper right corner. And we talked about what is the best type of annuity out there, which is the fixed indexed annuity and how to reduce risk within your portfolio with annuities. We’re so glad you’ve been with us here on the actable show this week. And when we come back next week, we’re going to talk more about how to create a smart financial plan with smart, safe, smart risk and smart tax investment strategies. And we hope everybody has a great week. Remember, with retirement, if you’re going to be a bear, be a grizzly, be really focused on your retirement inspectors. You expect about your retirement. Knowledge is power. And we’re happy to help you. Just visit ActiveWealth.com. And we’re more than happy to give you a free consultation of fifteen hundred dollar value. Thanks for listening to well show. And we’ll be right back next week with more ways to build a smart financial plan.

Producer: [00:47:28] 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 ActiveWealth.com. Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor, become an active wealth management are independent of each other. Insurance products and services are not offered to become, but are offered and sold through individual licensed to the point of agents. Investments involve risk, and unless otherwise stated or not guaranteed past performance going to be used as an indicator to determine future results.

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Take Control on Your Retirement Transcript

Take Control on Your Retirement Transcript Producer: [00:00:00] 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 in 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.

Ford Stokes: [00:00:54] Welcome to the active wealth show activators I’m Ford Stokes your chief financial advisor. I’m joined by Sam Davis, our esteemed executive producer, but he loves his new job title of ambassador to the weekends. So go ahead, Sam, and welcome everybody to the weekend here. Welcome to the weekend, activators. It’s a good day. Good weekend to be in Atlanta, Georgia. Absolutely. You’re just back to from going up and seeing the Windy City and and going to Wrigley Field. Was that the first trip for you to Wrigley Field with your dad? It was my first trip to Wrigley Field when I left home for after college. We decided that we’d meet up every year and eventually try to see all the ballparks. So we went to the Windy City this week and it was a great time. It’s pretty awesome. It’s great stuff. Good family thing. So we want to go today on today’s show. We’re going to talk about. We’re going first to a market update here in a second. We’re going to also talk about how the jobless claims went down again this week, which is good, and what’s going on with inflation. And this news is crazy, so I can’t wait to share that. But then also we’re going to talk about. How do you determine your retirement income and expenses and do an actual retirement income gap analysis? And we’re also going to talk through some pretty neat stuff continuing on our series on smart financial plan, and that’ll be kind of in segments three and four. But first, let’s get straight into a market update

Producer: [00:02:35] Your ActiveWealth.com market update.

Ford Stokes: [00:02:38] Stocks slide as producer prices surge by the most on record. Walt Disney Company will report quarterly results this week. U.S. stock indexes were lower Thursday as investors weighed the biggest annual increase for producer prices on record against an improving labor market. The Dow Jones Industrial Average fell 66 points or zero point one eight percent, while the S&P 500 Index and the Nasdaq Composite Index slipped point one seven percent and point to nine percent, respectively. Both the Dow and the S&P 500 have over the past few sessions closed at all time highs. The producer price index for July increase. Get this, folks, at a seven point eight percent annual pace, the fastest since record keeping began in 2010. Prices were up one percent month over month, matching the increase in June. Elsewhere in the economy, initial jobless claims last week fell to three hundred seventy five thousand matching estimates. Continuing claims, meanwhile, slid to pandemic era, low of two point eight six six million. Also, job openings surged to over 10 million job openings for the first time ever in the history of the United States in stocks. Caterpillar and Nucor. We’re among the companies looking to build on recent momentum gained from the Senate, passing the one trillion dollar infrastructure bill that would provide funding for roads, bridges and other things. Drug makers Pfizer Inc, McDermitt, Johnson & Johnson and Biogen Tech, SC were in focus after The Wall Street Journal reported that U.S. Food and Drug Administration was considering authorization of a COVID 19 booster shot for people with weakened immune systems. eBay reported mixed quarterly results as a reopening of brick and mortar stores contributed to a two percent year over year decline in the number of active buyers on its platform.

Ford Stokes: [00:04:34] The e-commerce marketplace forecast current quarter revenue below analysts expectations bumble ink missed on earnings, but beat on revenue. The dating app maker forecast current quarter revenue above expectations. Big data provider Palantir Technologies, Inc. Top sales estimates as revenue surged. Forty nine percent year over year adjusted earnings matched Wall Street estimates. And Walt Disney Co. and Airbnb are among the companies set to report their quarterly results. In commodities, West Texas Intermediate crude oil slipped 16 cents to sixty eight and ninety nine cents a barrel and gold slumped three dollars and fifty cents to seventeen hundred and forty nine dollars and eighty cents an ounce. Voter concern over inflation remains sky high, as most voters blame higher prices on the pandemic rather than the government. At the same time, over half. Rate their family finances positively and far fewer are looking for more help from Uncle Sam last year and far fewer are looking for more help from Uncle Sam than last year. Approval of Joe Biden’s handling of the economy dipped four percent since June and now splits forty seven at forty nine percent. His approval is also down six points on immigration to thirty five to fifty seven percent and down 10 points on what is still his best issue coronavirus 54 to 42 percent. And now, Sam, go ahead and hit them with our inflation demonstration sounder because it’s a doozy.

Producer: [00:06:12] It’s time for an act of wealth inflation demonstration now.

Ford Stokes: [00:06:20] So this is really important, folks, I want you to kind of lean in on this one for all of you. Social Security beneficiaries are folks who are going to be receiving Social Security soon. You might be in for the highest cost of living adjustment in nearly four decades, according to new projections. The latest estimate from nonpartisan senior Abbassi Group, the Senior Citizens League. Puts the 2022 cola or cost of living adjustment, which will be announced in October around get this six point two percent in a single year. As previously reported by Fox Business, a spike in inflation has squeezed seniors who receive a modest cost of living increase in 2021. That situation, however, is expected to ease. And so I want to be clear here. You’ve got to stay invested. You just absolutely, positively must stay invested if you’re going. To keep pace with inflation and keep the same retirement lifestyle and keep your same buying power, you’ve got to do everything. You can’t come back from our break. What we’re going to do is we’re talk about expenses and income and how to calculate your retirement income gap and also what happens when. Inflation hits and how that gap can widen if you start out with a small retirement income gap between your total expenses and your total income. On a monthly basis and I’ve got a hint for you folks to. Lean in on this one. Retirement is actually more about income that you can generate than it is about growing your nest egg. Now, obviously, the larger nest egg, the larger you can, the larger amount of income you can generate on a monthly or an annual basis.

Ford Stokes: [00:08:12] But we’ve got to do everything we can to make sure that we’ve got the right amount of income and our assets are continuing to grow so that we don’t become burdens on our children. And that means, you know, a tax efficient, fee efficient and market efficient portfolio. That’s what activators like you were looking for. Also, if you got questions on who an activator is, an acrobat or somebody who listen to the show. So congratulations. You’re listening to the show. You are an activator. You’re someone who wants a successful retirement. You’re someone who believes if you’re going to be a bear, be a grizzly, you’re going to win, especially with your retirement. You’re going to do everything you can. You’re going to be focused on your retirement. You’re going to try to seek as much knowledge as you possibly can. And knowledge is power, especially with retirement. Don’t just be like all the drones out there and just leave your money. I mean, I had a call yesterday with a gentleman who worked for the federal government for 27 years and. He’s got a bunch of money in his TSP, and he just left it there. And I’ve talked to another gentleman who recently retired from 3M, and he just left his money in. His foreign cane was still having like a right out of one percent expense ratio. Coming out of his portfolio and he couldn’t figure out how he’s going to generate income from his 401k.

Ford Stokes: [00:09:37] He’d been in sales and he was like, what am I going to do? He gets a pension, too, which is great. But when he goes to start taking our business and how it’s going to work with the 401k, so what he should do is move money from his four one K to an IRA that he takes control of and hopefully that we can help manage. And manage the money within the portfolio. And we never have authority to take possession of anyone’s assets and we never have authority to withdraw any money from anyone’s account. We only have limited trading authority within our primary custodian, our high quality custodian, TD Ameritrade. And so, therefore, there’s no Madoff with your money situation. We’re here to make sure that your money is protected and you can inspect what you expect about your retirement and see your money growing on a daily basis or any time you want from a TD Ameritrade app. We also send Orion performance reports on a monthly basis. You can see how you’re doing each and every month. That’s what we do. So the rest of the show, we’re going to talk about figuring out a retirement income plan that includes calculating our nondiscretionary and discretionary expenses when I talk about what those are. And then we’re also going to talk about how to build a smart financial plan with smart, safe, smart risk and smart tax investment strategies. And if you want to book an appointment with us, all you got to do is visit ActiveWealth.com. That’s ActiveWealth.com. Chubby. Welcome back, Activators, the ActiveWealth.com show on Ford Stokes chief financial advisor I’ve got Sam Davis on the board is our executive producer.

Ford Stokes: [00:11:42] And you can also give us a call at (770) 685-1777. Deborah and her team are standing by to take your call, and we look forward to working with you. I want to be clear about some of what you expect when you meet with us. You can meet with us via zoom or in person or just on the phone, whatever’s convenient for you. But we’re going to seek to understand what’s going on with your current financial situation. We’ll ask you a lot of questions. We’ll also ask you to share your financial statements through our financial workbook, SEC section on our website at the bottom, navigation on ActiveWealth.com. We kind of hide it down there at the bottom to make sure that we don’t get a bunch of bots trying to crawl it. And it’s a 256 bit encrypted site. And so you can upload your all of your information, your statements. We don’t want you emailing us financial statements. You can always bring them by and we can scan them and give them right back to you, because we don’t keep paper on site at our office because we’re trying to protect your information. And that’s part of my job and part of the requirement for me is a fiduciary. And I want to at all times are always putting your needs ahead of our own. But if you go to ActiveWealth.com slash workbook, you can upload your information, your Social Security income, your current income, when you plan to retire, all that stuff, plus your fall and Kay and IRA statements or for three or four fifty seven statements and even your investment accounts and savings account statements and even bank CDs.

Ford Stokes: [00:13:17] And we will do a thorough analysis for you. You can also check out a new 360 dot net to get a free copy of my book, Annuity 360 to learn all you need to know about annuities, which ones to avoid and which one to buy for a successful retirement. And here’s a hint. I think you should consider an accumulation based annuity that we can present to you, because we work with one of the top annuity wholesalers in the country that wholesales over seven billion dollars of annuities every year. And we’re able to find the very best products out there. And also in next in the next segment, we’re going to talk about what to do about how to create your own personal pension and also what to do if you’re about to retire and you’ve actually got a pension, what you know, you don’t know what to do. If you take the lump sum, you take the income. And we’re going to give you actually a definitive answer and a recommendation in the next segment. But we promised in this segment that we would talk about retirement income or retirement expenses. But on the front end of this, let’s go ahead and play our retirement costs, cut our sounder. Because we want to get started on reducing our expenses.

Producer: [00:14:29] Ready to save some money. Here’s our retirement cost cutter of the week.

Ford Stokes: [00:14:35] So the retirement cost cutter for this week is going down to one car. And that’s a little bit more of an inconvenience, especially in Atlanta, especially if you got if the if you’re married filing jointly and the husband plays a lot of golf, chances are you really need two cars. But if you don’t do that, you feel like you can survive on one car, especially if you’re going to 80 plus years old. And maybe the wife is driving more than a husband, probably because usually wives last longer than we do on driving and in life. Right. Girls do live longer than us. Sam, also, did you know what the definition of a girl is? Oh, man, I’m not an expert in this. No, this is really good, because actually one of my clients who owns who owns a bridge club told me this. She said, For the definition of a girl is what women over 70 call each other when they get together. So I thought that was pretty good. So we want you to consider maybe going out of one car because you can save on any car payment, you can save on any gas maintenance on the car, changing your oil and also save on insurance with going to one car. But also, you might want to consider one of your two cars that might be your daily driver to go to the grocery store and stop trying to go get. You know, an electric car or go get a Prius.

Ford Stokes: [00:15:59] So it’s a hybrid so you can reduce the amount of money you’re spending at the pump, because if you haven’t noticed, gas these days is not getting any cheaper. And we’re up over three dollars a gallon now and. You can consider an electric vehicle only fits your lifestyle, but that’s our retirement costs that are either going to one car or one of your cheap cars becoming an electric vehicle or a hybrid vehicle to try to reduce the amount of money you’re paying in gas. So that’s our retirement cost cutter. So let’s talk about. How to calculate your retirement income gap. First of all, let’s define fund a retirement income gap is simply the difference between your budget and your guaranteed income sources. For example, if you have a budget that requires five thousand dollars a month of income in today’s dollars, you have guaranteed income for Social Security and pensions of three thousand dollars per month, then your income gap is two thousand dollars a month. So let’s walk through a scenario. So the annual nondiscretionary expenses of a couple were actually thirty one thousand five hundred dollars and their annual discretionary expenses we’re thirty thousand, so it’s sixty one thousand five hundred dollars in total expenses drained discretionary, nondiscretionary. So discretionary expenses are things like going out to eat entertainment, go to the movies, travel. Choosing to buy your grandkids gifts, things like that, nondiscretionary expenses or things like. Your Medicare supplement insurance payment every month, your power bill, your rent, your or your mortgage or your trash bill or any utility and things that absolutely are positively necessary for you to live your life, car insurance, things like that.

Ford Stokes: [00:17:58] Now you can fill this income gap back with Social Security income. And we’ve gone over this scenario before, but I want to make sure it’s clear. Let’s just take the scenario where. There’s a gentleman who’s making. Thirty thousand dollars a year in Social Security income and his wife, who never worked but worked harder than he did, stayed home with the kids. She gets fifteen thousand because she gets 50 percent of his. So that’s forty five thousand dollars for the family. So that’s a pretty good source, right? Well, if you’ve got that. And you take 61 five from 40, from 45. You’ve got to fill. Sixteen five back with withdrawals from your IRA. And that helps fill up the income gap. But where we run into problems is when that retirement income gap widens because of inflation and we have to start taking more out and tax rates increase and raise your hand and keep one hand on the wheel, please. But if you think taxes are going to go up in the future. While you’re driving around here in Atlanta or listen to us on the active wall show on Stitcher, Spotify or. Or iTunes. And also Salem Media and I Heart Radio and Google Play and the iTunes store there. But it’s likely that taxes are going to go up in the future.

Ford Stokes: [00:19:34] All they have to do is listen to the president’s currently in the White House. And take him at his word that we’re likely going to see tax increases, and when we come back from the break, we’re going to talk about what to do about closing your retirement income gap and how and there’s a lot of strategies and what you need to do to make sure you’re hitting things like on the expense side, on the cost side, and you’re also doing a great job on the income side. We’re also going to talk about what to do if you’re faced with the choice of taking a lump sum pension payment or turning on income. And also talk to you about what type of product. Actually enables pensions to be administered. What’s the product behind pensions, bottom line? And we’re going to also tell you how to create your own pension right after the break. You’re listening to well show. We’re so glad you’re with us. And make sure you come back to learn how you can close your retirement income gap and create your own pension. And welcome back, Activators, the ActiveWealth.com show Ford Stokes, your chief financial adviser, we got Sam Davis with us on the board, and we were talking about how to close your retirement income gap. And I want to go ahead and give you in detail how to plan for that. Number one is you want to determine your Social Security income that is available to you during retirement at various ages and also at various starting points, whether you’re going to turn on income at age 62 and a half or thrown on income at 65, or make it all the way to your full retirement age at either 66 and a few months or 67 years old.

Ford Stokes: [00:21:40] By the way, congratulations if you were born after 1960. That means that your full retirement age is sixty seven and it is likely pretty soon that they’re going to go up again. If you’re born after 1970 and they’re going to make it tougher and tougher, they’ll probably move folks retirement age up to 19 to 68, like 1970 and other things. But you really need to determine what works best for you. And we can give you a Social Security maximization report as part of this retirement income gap analysis. And let me ask you, do you feel like you deserve more than 75 cents on the dollar of the money you put in in Social Security? Well, guess what? If you start taking Social Security income at age 62 and a half, that’s exactly what you’re going to get, which is 75 cents on the dollar. If you make it a full retirement age, you get 100 percent of your Social Security income benefit. But if you make it all the way to age 70, you get one hundred and thirty two percent for every year.

Ford Stokes: [00:22:41] You wait after age 66 or 67, your full retirement age, you get eight percent more in your Social Security check. So the bottom line here is the longer you wait, the more you’re going to make than the number two thing you want to do is you want to estimate your monthly expenses. And the best way we help people do that is say take. July and August and add the two months together and divide by two, and that gives you an idea of how much you’re really spending. If you’ve got a lot of travel in July as an example, you might want to take August and September or September. October, we don’t recommend you include December, obviously, or November, because those are Christmas shopping months and usually your budget’s out of whack during those months. Number three is you want to research and estimate inflation as measured by CPI-e, not CPI-U. So CPI-U is the Urban Consumer Price Index, and that’s what’s called the I’m doing air quotes here, Sam. Save me to air quotes. Is basically the headline consumer price index that measures inflation. Did you know, though, that CPI-Eactually, which stands for elderly, is actually five percent higher because the cost of what? Retirees have to face specifically in health care. And so if if CPI, DASHO is three percent. CPI e would be. Three point one, five percent. And then. You want to reduce your future tax risk with Roth IRA conversion or life insurance? You do everything you can.

Ford Stokes: [00:24:27] To reduce your future tax risk by investing in one of the only two tax free investments out there, which is Roth IRA conversion or life insurance. You also want to plan for the eventual loss, and it is a guaranteed loss of 33 percent in some security income in the household with the death of a spouse. So in my example, where the husband was making thirty thousand dollars a year and the wife was getting 50 percent of his fifteen thousand, let’s face it, guys, women live longer. And so what that means is when he passes away on the day he passes away, she loses her Social Security income benefit and she gets his. So you want to plan for that. You need to have a plan to fill back. Thirty three percent of such great income. Now you’re going to be spending less money on food and things like that when you’re by yourself. But you might spend more money and travel to go see family to make up the difference. So you really need to somehow, someway figure out an income source to backfill that. Thirty three percent and lost Social Security income. Also, you want to follow the four percent rule and stay invested. In smart risk and smart, safe investment vehicles to outpace inflation. You don’t want to just go and bury it and put it under the mattress or buried in coffee cans in the backyard and go get a metal detector.

Ford Stokes: [00:25:50] You want to avoid that? Next, you want to consider the rule 100, the rule 100 states that if you subtract your age from 100, the remainder that’s left over is the percentage of your portfolio that should actually be invested in at risk equities. A lot of you probably almost just drove off the road, you’re like, oh, my gosh, I’m six years old, that means I should only have 40 percent invested in stocks, and I’ve got over 80 percent of my portfolio invested in the market right now. Well, then you should consider a bond replacement strategy. We’ve talked about that quite a bit here, and we’ll talk more about it in segment four. The next you want to generate a personal pension, and we will show you how we’re going to Sam is going to play Chapter nine for my new book, Annuity 360 to help you understand that. And also, you want to recalibrate your financial plan each year. So that’s a lot. There’s a lot of planning right there to backfill your retirement income gap and make sure it doesn’t widen over time with increases in taxes that therefore require you to take more money out of your IRA and also increases in inflation, where food cost more gas costs, more home appliances, costs more and all that kind of stuff. And now go ahead and play Sam Chapter nine for my new book. You can create your own personal pension.

Ford Stokes: [00:27:11] 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. 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 I 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 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.

Ford Stokes: [00:28:36] 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 and your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle. Depending on how that index is performing, 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 arm.

Ford Stokes: [00:29:59] 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 Ahmadi’s easier. Inspect what you expect with any annuity. Don’t just go with what the annuity agent or advisor tells you. Read it for yourself specifically. You should read the annuity illustration guaranteed and non guaranteed tables included within the annuity illustration. 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 will help you build a successful retirement and they’ll offer you peace of mind. Whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. Know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 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.

Ford Stokes: [00:31:19] 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. We also said we would talk about what to do if you’re facing retirement and you’ve got to your face the choice of taking a lump sum in your pension or turning on income for your pension. And we’ll talk about that solution, right. We come back from the break. It was the act of welsher right here on Amdocs when the answer. We’ll also recap how to create your own personal pension. And welcome back, everyone, to the ActiveWealth.com Ford Stokes, the chief financial advisor. Sam’s on the board with us. Here is our executive producer. And I promise you, we would talk about for all of you people driving around, that you might be considering, you know, taking your pension. Only about 16 percent of all corporations still offer a pension. But that’s OK. If you if you’ve got a potential pension with Georgia-Pacific or Georgia Power or other corporations here in Atlanta and you’re faced with. Should I take the pension or not? Let me give you some advice. Did you know if you were to take the lump sum that we could get you a 10 percent immediate bonus on that money so we can take care of that and get that done for you? So would it be great if you had your pension was 10 percent higher? Now, obviously, there’s factors and payout factors and all kinds of things, but there’s a lot of annuity companies we work with that are very efficient.

Ford Stokes: [00:33:13] Some even offer accumulation based annuities that have zero income rider fees and no subaccount fees, because we’re not talking about variable annuity. You’re talking about a fixed indexed annuity. Also, if you’re considering a variable annuity, please don’t please consider avoiding what we call a scorable. Don’t do annuity. Make sure you consider a fixed indexed annuity and avoid variable annuities. But I just looked at a recent illustration from one of our annuity partners, and they’re offering a 10 percent bonus and they illustrate at seven point three, four percent. And they’ve got the 10 percent bonus on it, which is incredible. If you don’t want to take the bonus option. I ran one for a fifty three year old who left Goodyear and took a lump sum on his pension and he invested. The lump sum four hundred fifty thousand dollars from his pension into this fixed index annuity, and it’s illustrating at nine point eight four percent. And he’s turning on income at age 65. He’s 53. Analogy’s deferring for 12 years, and he’s looking at sixty four thousand one hundred and ten dollars a year in income. Now, granted, that’s an estimate. That’s a non guaranteed rate of nine point eighty four percent and the non guaranteed withdrawal rate.

Ford Stokes: [00:34:32] Of sixty four thousand two hundred ten dollars, but. It’s Index-linked, and that’s based on the last 10 years of historical performance of his index, which happens to be the Credit Suisse Raven Pack Index, and so. Yes, you really should consider taking the lump sum and taking control of your assets. Also, don’t leave the money with a company that could potentially fail or a government entity that could, you know, municipal or state government could have bankruptcy problems we’ve seen. Different municipalities and different states have financial trouble, and we want to take control and make sure that we put the boundaries around our hard earned and hard save money. And so if you got one of those, really be careful about turning on income from a pension. If you turn on income, a pension, the product that they use to do that is called a spear. It’s a single premium, immediate annuity. Again, a single premium, immediate annuity. And those annuities are really good at paying your money back. They’re not really good at growing your money. They’re not as linked to indices. A fixed indexed annuity is a better growth product. And wouldn’t you rather have money left over that your kids get inherit and also generate income with the same product? Also, your money grows tax deferred and you’re only paying ordinary income tax on the money you withdraw from the annuity each year. We can also implement a Roth ladder conversion before you do an annuity or even inside of an annuity product.

Ford Stokes: [00:36:07] There’s a few companies allow you to do some accounts where you can do a ladder conversion, where each conversion is classified each year. And so we can show you how to do that if you’re curious on how to do that. Go ahead and visit ActiveWealth.com and click that. Set an appointment button the upper right corner. Again, that’s ActiveWealth.com. Just visit ActiveWealth.com. We’re happy to help you with your pension decision. And also, if you’re like, you know, I never got an opportunity to get a pension, but I want one because I want mailbox money. I want to make sure that my retirement delivers peace of mind to me and I can generate real income. So why don’t we do that? Let’s go ahead and build your own personal pension. And I’ve got a secret for you also. There are no advisory fees with these personal pension type products. And we work with the absolute best products in the industry that are the most fee efficient possible. That also have done a great job of being market efficient or market linked, efficient and working with great indices. Also, if you’re offered an annuity with an S&P 500 index, but it’s only giving you thirty two percent participation rate and that index. I would strongly urge you to not invest in that annuity. I think it’s not good practice to only get thirty two percent of how the index performs.

Ford Stokes: [00:37:26] I think it’s very good practice to get 90 to one hundred and ten plus percent of how an index performs, and you will do better over time. Also, I’ve never seen an illustration or any estimate out there where corporate bonds are outperforming the growth over time of a fixed indexed annuity that gives you market gains without market risk. Obviously, we implement our portfolios and do a great job implementing tactical asset allocation. We’ve got a team of 45 folks that work on all of our portfolios. And so it’s great to have the smart risk part of our smart financial plan. But it’s even better to get that smart, safe path that also grows at market like rates. And if you’re following the rule of one hundred, it’s a great idea to kind of do a 50 50 plan, if you will, 50 percent in smart risk and 50 percent in smart, safe, smart risk would be tactical asset allocation and rebalancing every month within the market with securities and also minimizing your bond exposure. And smart savers doing a bond replacement invest in an income product like a fixed indexed annuity that can also generate market gains through. The market linking to these indices with a high participation rate in those indexes, like we talked about. And then the last piece is just smart tax and trying to do a really good job with Roth Ladder conversion or life insurance. And let’s talk about Roth conversion real quick. Sam hit them with a Roth converter sounder.

Producer: [00:39:02] It’s time for an act of wealth Roth converter.

Ford Stokes: [00:39:07] Hope you guys like that rock and verse sound or we love that. So it was a gentleman who called me this week and he called off of a webinar that he attended that I gave. We provide a retire well, reduce taxes and grow assets webinar on a monthly basis. And if you ever want to get scheduled for those, all you got to do is visit ActiveWealth.com and reach out to us or send me an email at Ford@ActiveWealth.com. That’s at FORD@ActiveWealth.com. And we’ll get you put into the next webinar. But he’s a former federal employee. He worked in the private sector for quite a while, but he is now 68 years old. And he just retired last year at the age of 67 for the federal government. His last job was in Homeland Security and worked at FEMA. He’s got nine hundred and six thousand dollars in total. He’s got one hundred eighty eight thousand dollars in a private sector, Roth IRA, because he was smart to invest in Roth money, not IRA or foreign money back in the day. And he’s got a TSP, which is a thrift savings plan. It’s the 401k version for federal employees. And by the way, Atlanta, Georgia is like the number seven market for federal employees because the CDC is here and department in tears got a lot of jobs here and there’s a lot of federal jobs here.

Ford Stokes: [00:40:26] And so we work with several federal employee families and it’s great stuff. But he’s got seven hundred and twenty thousand dollars in his TSP total. He’s got two hundred eighty eight thousand or Roth classified funds. And he’s got another four and fifty four thousand that are basically TSP or IRA type. Classified funds would be like a foreign CCAC. They’re qualified for tax deferral, but also qualified for ordinary income taxation, taxations, withdrawals. And he’s going to implement he’s trying to stay underneath one hundred and sixty four thousand four hundred twenty five dollars. Twenty four percent bracket. That’s the top end of the twenty four percent bracket for people that are, you know, single filing jointly. And he’s moving one hundred plus thousand dollars a year over a five year period, because he’s got growth on that money and he’s going to save hundreds of thousand dollars by implementing this Roth conversion. And so I would encourage you to consider saving six figures during retirement and implementing Roth ladder conversion. We can help you do that. And we give you a free 5400 dollar financial plan and portfolio analysis with a Roth ladder conversion plan. Absolutely. At no cost to you. And now the final countdown is the final countdown.

Producer: [00:41:41] So let’s recap what you may have missed. It’s the final countdown, the final.

Ford Stokes: [00:41:51] Today’s show, we gave you a market update with seven point eight percent inflation over the last 12 months. We talked about how to calculate a retirement income gap and how to deal with the eventual loss of a spouse and what happens when you lose thirty three percent of your Social Security income. And then we talked about what to do with your pension if you want to take a lump sum or not. And also how to create your own personal pension. We gave you our first official Roth convertor example with our Roth convert, our new segment. And we continue to talk about a smart financial plan. We talked about smart risk with tactical asset allocation, smart, safe with doing Bond Replacements with fixed indexed annuities and even life insurance to generate tax free income. And then also smart tax with a Roth ladder conversion so that you can get to one of the only two truly tax free investments out there, which is Roth, IRAs, and life insurance. So next week, we’re going to talk about how to calculate your Social Security income. Also, how to really make sure that you’re going to build a successful retirement that is market efficient, be efficient and tax efficient. Remember, regarding your retirement, if you’re going to be a bear, be a grizzly, be focused because knowledge is power. Do everything you can to inspect what you expect about your retirement future. It was the Active Wealth, show on AM 920 the answer. We’ll be right back next week.

Producer: [00:43:16] Thanks for listening to the ActiveWealth.com. 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 ActiveWealth.com. Investment Advisory Services offered through Brookstone Capital Management LLC by a registered investment advisor become an act of wealth management or independent of each other. Insurance products and services are not offered to be Covid or offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

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Smart Risk Investing Transcript Producer: [00:00:30] 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: [00:01:01] Welcome to the ActiveWealth.com 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 ActiveWealth.com has grown because activities like you want to activate their retirement planning with sound tax efficient investing and now your host Ford Stokes.

Ford Stokes: [00:01:24] Welcome Activators to the ActiveWealth.com Ford Stokes, your chief financial advisor. I’m joined by our esteemed executive radio producer Sam Davis, who also has got its not so new. It’s about three weeks and now he’s the ambassador to the weekend welcoming us to the weekend. So Sam, say a lot of folks,

Producer: [00:01:44] Welcome to the weekend activators. Look at this. It’s August. It’s back to school time. Football practice has started and the summer will soon be behind us. So enjoy the weekend.

Ford Stokes: [00:01:54] The congregation is about to be in the church for college football. The interesting thing is, as an OPSEC fan, for me, it it’s really interesting to see that, you know, Texas and Oklahoma saw to join the as you see. But your Kansas Jayhawks, the rumor is they’re about to join the Big Ten. Is that correct?

Producer: [00:02:18] We’re going to have to find a new nest, that’s for sure. I’m not sure where it’s going to be. I’ve seen some talks about a little big twelve pack, 12 merger. Who knows at this point. But football will be played.

Ford Stokes: [00:02:29] But it seems like the Kansas joined the Big Ten is actually imminent based on the reports that came out this week. Would you say

Producer: [00:02:37] It looks like that would be the most likely situation and probably the most ideal situation financially. So, yeah,

Ford Stokes: [00:02:44] It’s good stuff. All right. Well, I know a lot of us are college football fans here, whether Georgia fans or Auburn Tiger fans or the hated Alabama Crimson Tide fans or whatever. Just kidding. But there’s a lot of Georgia fans. A lot of our fans are not big fans of the Alabama Crimson Tide, but that was big happenings in the last few weeks. Incredible stuff. And that’s just part of the weekend and part of the religion that is college football here in. The Southeast, so, you know, you get all kinds of stuff here on the act of, well, shall we want to make sure that we were talking about your Kansas Rock Chalk Jayhawks there, Mr. Sam?

Producer: [00:03:26] Yeah, and I know that the football program usually doesn’t impress at Kansas, but I’m just glad that football will be played and fans will be back in the stadiums this year.

Ford Stokes: [00:03:37] Well, I know a lot of Georgia fans here in Atlanta are really excited about the coming football season. And they’re and also I think Georgia Tech fans are really excited about their quarterback, too. So I think I think we were well represented this year in the Atlanta area, which is great stuff. So let’s get straight into a market update. Your ActiveWealth.com market update. Jobless claims dip ahead of benefit expiration. Continuing claims fall to pandemic era lows. The number of Americans filing for unemployment benefits last week as the expiration of supplemental benefits drew nearer. The Labor Department said Thursday that three hundred and eighty five thousand Americans filed for initial jobless claims benefits in the week ending July 30, first below the prior week’s downwardly revised three hundred ninety nine thousand. Analysts surveyed by repetitive. We’re expecting three hundred and eighty four thousand filings. Initial jobless claims slipped below the mark of 400000 for the first time since the pandemic began around Memorial Day and have essentially hovered there since, said Mark Hamrick, senior economic analyst at Bankrate. Continuing claims, meanwhile, fell to two point nine three million filings, a pandemic era low in the week ending July twenty Fourth, down from the prior week’s upwardly revised three point two nine six million analysts had anticipated three point to six million filings. So that’s a real improvement there. Historically elevated twelve point nine million Americans are still receiving some form of jobless assistance.

Ford Stokes: [00:05:14] The three hundred dollars per week in supplemental unemployment benefits are set to expire in September. About half of US states ended or announced plans to end the benefits ahead of their expirations. Concerns over the health of the jobs market surfaced on Wednesday after the ADP report showed private sector payrolls slowed sharply in July. The private sector added three hundred thirty thousand jobs last month, down from the six hundred eighty thousand jobs gained in June. Analysts were expecting the addition of six hundred ninety five thousand jobs. Investors will get a deeper look into the health of the labor market when the July jobs report is released this upcoming Friday. Analysts are expecting the US economy added one hundred and forty five thousand jobs last month as the unemployment rate fell to five point seven percent. The economy gained eight hundred and fifty thousand jobs in June, while the unemployment rate ticked up to five point nine percent. With schools opening vaccinations still in the rise of the forthcoming expiration of the elevated unemployment benefits, the way should be cleared for more employment gains in the coming months. Hamrick said that’s barring the truly unforeseen. And obviously we’ve seen a lot of unforeseen, which is pretty interesting stuff. Also, stocks climbed with weekly jobless claims and earnings were in focus. Robin Hood Market said existing stockholders would sell up to ninety seven point nine million shares.

Ford Stokes: [00:06:45] US stock indexes rose Thursday as investors balance the latest jobs data and mixed corporate earnings. The Dow Jones Industrial Average gained ninety two points, or point to seven percent, while the S&P 500 index, the Nasdaq composite index rose points to seven percent and point one seven percent, respectively. The Labor Department said Thursday that initial jobless claims fell, like we said earlier, to three hundred eighty five thousand in a week, ending in July 31st, in line with analysts expectations. And again, I want to remind everybody, continuing claims, meanwhile, declined to a pandemic low of two point nine three million filings and stocks. Robin Hood markets was sharply lower and said in a filing that existing stockholders will sell it to ninety seven point nine million shares over time. Shares of the trading platform had surged eighty seven percent over the prior two sessions in earnings. Uber ANCs quarterly loss widened as the ride hailing giant boosted incentives to lure drivers back to work. The company said quarterly gross bookings hit an all time high and food delivery orders also increased by Darina reported earnings and revenue that exceeded Wall Street estimates and said its covid-19 vaccine was ninety three percent effective. Through the six months following the administration of a second dose, Electronic Arts led product launches and its live services fueled it stronger than a.

Ford Stokes: [00:08:14] Expected quarterly results, the videogame maker raised its full year outlook and said its new battlefield twenty forty two game will be released before the holidays. And in commodities, West Texas Intermediate crude oil ticked up 15 cents to sixty eight dollars and thirty cents a barrel and gold lost 40 cents to eighteen hundred and fourteen dollars and ten cents an ounce. And that’s your market update for this week. So last week we talked about smart, safe, smart risk and smart tax feeding into a smart financial plan. Mainly, we talked a lot about smart safe last week. We’re going to talk a lot more about smart risk this week. We’ll talk a little bit about smart safe. But after the break, we’re going to talk about a specific strategy that is a pretty awesome, smart risk strategy called a structured note or a flash note, and this one’s offered by Citibank. And we’ll talk through that right after the break. But I wanted to recap smart, safe, real quick. So smart, safe would be things like investing in a fixed indexed annuity and replacing the bonds in your portfolio. So what let me ask you a question. Why are you investing in bonds when you can invest in a fixed index annuity, eliminate your advisory fees, completely, delete your advisory fees, your portfolio fees, get into a fee efficient, fixed indexed annuity that is paying, you know, between five and nine point eighty four percent.

Ford Stokes: [00:09:43] Those are historical, not back tested. That’s historical. What’s actually happening now. And you’re paying no advisory fees and you’re getting market gains without market risk. Let me ask you, I mean, why wouldn’t you do that? So we’re also going to play a little bit about bond replacement here, we’re going to talk a little bit about bond replacement on today’s show, but it’s about risk. We come back from the break. We’re going to talk about how to invest in a structured note, how to get the greatest return from structured note, what the Bufford principle protection is on a structure note. And I think you’re really going to enjoy learning about a structure note or a flash note and what we offer through our R.A. Brookstone Capital Management here at ActiveWealth.com Management right after the break. And we’re going to talk more about smart risk strategies and also smart tax strategies here on the ActiveWealth.com show. If you think taxes are going to go up in the future, if you want to reduce the advisory fees, the portfolio fees you’re paying now, I would encourage you to come right back after the break. It was the ActiveWealth.com right here on AM 91. The answer. We’re so glad you’re with us.

Producer: [00:11:13] 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.

Ford Stokes: [00:11:41] And welcome back to the ActiveWealth.com show Activators and Ford Stokes, your chief financial adviser. And if you’re wondering who an activator is, an activator is someone who listens to this show. They want to build a successful retirement. They want a fee efficient, market efficient and tax efficient. Retirement or portfolio, and they’re also somebody who doesn’t spend more than four percent of their assets in a given year, there are someone who understands the rule of 70 to which is how fast their money is going to double. And there’s somebody that really is focused on their retirement and they’re inspecting what they expect to make sure that they have a great successful retirement. And if you’re wanting to inspect what you expect on your current financial plan and you’re unhappy with the returns you’re getting or unhappy with what happened to your portfolio in March of 2020 or what happened even in 2008, 2009 with the S&P 500 lost fifty point one percent of its value. And you’re also unhappy with the amount of money that’s being taken out. Of your IRA distributions that are being withheld and paid to the government and you’re getting a lesser amount of your IRA than you thought you were going to get. Then I would encourage you to give us a call at (770) 658-1777. Or you can visit ActiveWealth.com and click.

Ford Stokes: [00:13:12] That set an appointment, but in the upper right corner and you’ll get put directly into my calendar. We just look forward to working with you if you want to get a copy of my new book, Annuity Three Sixty. Absolutely for free, all you have to do is visit annuity three sixty dot net. That’s annuity three sixty. Now let’s get straight into these structured notes. So structured notes are financial instruments, which consists of two main parts combined to generate a specific risk return profile in their most basic form, structured notes. Or they’re basically investments that combine a low risk, low return component of bonds with a higher risk, higher return derivative of a selected assets, often equities or equity indexes. For us, we use equity indexes or a lot of a lot of the structure notes that we end up placing into our client portfolios as at their request is highly flexible. Basic model makes it possible for investors to benefit from practically any price move, any specific underlying asset. As a result, structured products are commonly used as a portfolio enhancement tool to augment returns while limiting the risk of loss of capital. Due to the highly customizable nature of structured products, the individual risk return profile of each note can be calibrated so that the individual requirements of each investor are met. Structured nodes are not about owning the underlying security or index, but rather about customizing an investor’s exposure to that underlying asset.

Ford Stokes: [00:14:53] Some of the situational uses of structured notes are listed here. Some of the situational uses of structured notes are an investor once exposed to an equity index but wants to reduce some of the volatility of owning that equity index. And investor wants the potential to earn a higher yield or coupon while limiting or eliminating interest rate risk. An investor wants to find investment strategies for different market expectations, whether bullish, bearish or sideways. An investor also wants to fine tune their portfolio in line with their risk profile, conservative, moderate or aggressive. A lot of folks are moderate these days. They’d like to be conservative, but they can’t get the right of return. So you’re looking for a moderate to moderate aggressive these days and they want to do bond replacements. And this is one strategy. You can replace your bonds with a structure. No matter what we do is we actually invest in five different notes, over five different consecutive months from five different banks that have five different coupon rates and have five different strike price points on the NASDAQ. One hundred, the S&P 500 and the Russell two thousand are really the big three indexes that all of these banks are using now as the underlying index that they’re working with. And I wanted to share with you the flash that we’re offering for the month of August, so and you probably would need to give us a call pretty quick for us to be able to trade this in and get this to you, but.

Ford Stokes: [00:16:30] Citibank is offering a minimum coupon rate is nine point to seven percent, and if you’re getting, you know, a paltry eight point six percent of one percent. On a Bankside offer by Ally Bank, or if you’re going to wear the bricks and mortar banks like Bank of America or Wells Fargo or truest, and they’re all offering zero point zero five percent interest, a nine point seven nine point two seven percent interest rate is better for you. The fixed coupon rate is paid monthly at point seven seven to five percent, which is higher than the bank CD rate on when your bank said that alive Thanksgiving just in a single month. It’s crazy your principal is protected as long as the S&P 500, the Russell 2000 and the Nasdaq 100 index don’t lose 30 percent of their value. Any of those three can lose 30 percent of their value. And your principal would then just ride the market. And this is what’s called an American style flashed up, and if you’re not familiar with flagstones or structured notes and they’re the same right, I would encourage you to consider the American style because the American style pays higher. Also, we’re able to offer a higher rate of return on these structured notes because I’m not taking commissions on the structure does themselves.

Ford Stokes: [00:17:55] They’re just getting input into your portfolio the way we would normally do it. We’re trying to help replace your bonds, get you a higher rate of return, but we’re really trying to protect and grow your wealth and sometimes in protecting your wealth is also getting you a higher coupon rate on income type product and income type products could be fixed index annuities that are not invested in the market and they are not at risk in the market. They don’t involve stock market risk. And their contracts with you in the annuity company and with the other would be flash notes that are offered by banks that are offered by Brookstone Capital Management are registered investment advisory firm and we are not taking any additional commission on those. We just offer those as a potential allocation within our portfolios that we’re structuring for our clients. And that would be a really good idea. I mean, nine point to seven percent on a fixed coupon would be great with you as long as the S&P 500, the Russell two thousand and Nasdaq one hundred don’t lose 30 percent of their value. That that’s very attractive for many investors out there. And if you’ve got questions about structured notes, you can get our free report understanding structured notes just by send me an email at Ford@ActiveWealth.com. That’s Ford@ActiveWealth.com. And I’ll just send you.

Ford Stokes: [00:19:21] The understanding structure, Dennett’s report that we have absolutely to you for free, and so I think you’ll enjoy that. You can also give our office a call at (770) 658-1777. Or visit ActiveWealth.com and click the set an appointment button in the upper right corner. This this structured note is paying nine point to seven percent. It’s offered by Citibank and a rated bank. It also has FDIC protection on their own, but this this investment does not. This investment is a structure that has a. 30 percent buffer, as long as, you know, when you purchase the structured note, as long as the S&P 500, the Russell two thousand and the Nasdaq one hundred do not lose 30 percent of their value from the point you purchased the structured note. So as those indices don’t lose 30 percent, your principal is protected throughout the 12 months. Also, this note cannot be called until the first day of month seven. Also share that most of these notes are called in month seven. The banks have made their money. You’ve made your money and then we roll it into a new structure. Note for you or we put it into one of our managed portfolios or whatever you decide to do with the money. But basically it works like this. You’re getting paid point seven, seven to five percent of the principal you put in, which is pretty great stuff each month for six months.

Ford Stokes: [00:20:52] And they call it and they give you your principal back. So that’s how it works. As an example, if you invest one hundred thousand dollars in many of our clients, do invest in a five month structured don’t ladder at one hundred thousand a piece for five hundred thousand over it. But you if you let’s say you did one hundred thousand dollars in a Citibank structure that was offered in August, that’s paying nine point to seven percent, you would get seven hundred and seventy two dollars and fifty cents a month times 12 months, which would be nine thousand two hundred seventy dollars. And if the notes called in six months you get seven seventy to fifty times six and you get your principal back all in like the first day of the seventh month after you invested it. So it’s a really good idea to consider replacing your bonds because bonds are paying, what, three, four percent tops right now. And you’ve got a chance to earn twice as much as that, at least, if not three times. And you take, you know, a smart risk play with a portion of your game, with a portion of your portfolio, not all of your portfolio. So consider a structure now. I mean, listen it way. A lot of work says, let’s say of one hundred thousand to invest, we would just invest twenty thousand dollars in in five different structured notes in five different consecutive months with five different banks at five different coupon rates.

Ford Stokes: [00:22:20] That’s what we would do. And so all you have to do is give our office a call. If you’re interested in the structured note strategy, just give us a call at (770) 658-1777. And that is a smart risk play to consider investing in structured notes or class notes. And this one for August is paying nine point twenty seven percent with a thirty percent buffer. As long as the S&P 500, the Russell two thousand and Nasdaq one hundred index, any of those three do not lose thirty percent of their value from the point you invested in that structure. Note congratulations. Your principal is protected throughout that time period. We come back from the break. We’re going to talk about more bond replacement strategies. This one’s a little bit more of a smart, safe play, but we’re trying to talk about a smart financial plan that includes smart, safe, smart risk and smart tax strategies. The active wealth show right here on AM920. OK, welcome back, Activators, the ActiveWealth.com show, and we’re talking about building a smart financial plan, we’ve talked about smart safe with replacing bonds and fixed index annuities last week and a little bit this week.

Ford Stokes: [00:23:48] We’ve also talked about smart risk strategies. One of them is replacing your bonds with a smart risk play that your money is at risk in the market with a structured note, but it can pay nine point to seven percent. And you’ve got a principal protection buffer as long as the Nasdaq one hundred, the Russell 2000 and the S&P 500 don’t lose 30 percent of their values. Any one of them, your principal is still protected. So and most of those notes get called in at the beginning of month seven, but they cannot be called before six months. So that’s good news. And then we want to talk about another smart strategy that, again, this is more back to the smart safe. But we’re all talking about trying to trade out our bonds, replace our bonds, eliminate the advisory fees we’re paying and with bonds, and get a higher rate of return with market like gains without market risk by doing a bond replacement into a fixed indexed annuity. And I, I would strongly recommend you consider this bond replacement strategy. And Sam, go ahead and play chapters 15 and 16 for my new book, Annuity 360, and you can get my free book at Annuity 360. Gotten that. That’s Annuity 360 dot net. We look forward to getting that book out you and you can really study up on this bond replacement strategy.

Ford Stokes: [00:25:07] Chapter 15, bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed index annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial adviser talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. At my firm ActiveWealth.com Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money, but there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States. Historical bond volatility. The 1900 saw to secular bear and bull markets in U.S. fixed income inflation peak at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until fifty one. The long term bond yields were at one point nine percent. In nineteen fifty one, they climbed to nearly 15 percent in nineteen eighty one. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation, protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created early. Investors in these new asset classes were compensated for taking on the challenge.

Ford Stokes: [00:26:43] The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of fifteen percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold see chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the covid-19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May 24th. 2020, the ten year Treasury note was yielding point six four percent and the 30 year Treasury bond was at one point to seven percent. Reinvestment risk of bonds. This is the likelihood that investments cash flows will earn less and a new security.

Ford Stokes: [00:28:07] For example, an investor buys a ten year one hundred thousand dollar Treasury note with an interest rate of six percent. They expect it to earn six thousand dollars a year. At the end of the term, interest rates are four percent. If the investor buys another 10 year note, they will earn four thousand instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds systematic market risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid diversification, cannot fix this issue. But the correct asset allocation strategy can make a big difference. Unsystematic market risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes coming to the industry. However, there is no way they can know how those changes will affect the market. There are two factors that contribute to company specific risk business risk. There are two types of risk internal and external. Internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells financial risk. This relates to the capital structure of a company.

Ford Stokes: [00:29:38] A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you were actually paying. Standard and Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point two one percent for municipal bonds. However, markups can be as high as five percent, up to fifty dollars per bond. Bonds have finite duration. Bonds only provide income for a finite amount of time. Unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive. Chapter sixteen reduced risk in your portfolio with annuities. Big idea. An annuity can protect against several risks that can affect retirees and pre retirees and offer a better financial safety net than other investment types. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned well.

Ford Stokes: [00:31:16] We believe that annuities can be the answer to risks in your portfolio. Longevity risk. Retirees and pre retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four percent rule. But annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement. An annuity can help create an income you can never outlive. Your money will last for your entire retirement by utilizing monthly, quarterly or yearly distributions from your annuity account. After your money grows during the accumulation phase, market risk fixed indexed annuities can protect you from market risk. These annuities are not actually invested in the market. They’re only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks. Should your index perform poorly, you will either make money or remain flat. You will never lose any money. Zero is your hero. Inflation risk annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout. Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk. It is important to have an annuity with a payout linked to the Consumer Price Index, or CPI, instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk an annuity.

Ford Stokes: [00:32:49] The increases at a flat rate each year does not offer sufficient protection against inflation sequence of return risk. An annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by Retire one has shown that you can flip fifteen years of returns from retiring during a recession to retiring during a market that is up and completely change your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return. Consider a smart, safe plan with a smart, safe plan. Your money is invested not in the market. The characteristics of investing, not in the market, include growth with safety. Market upside limited to no downside principal and gains protection, low cost, zero to one percent annual fee time horizon of seven to 14 years can earn five to seven percent annually. Options are available for guaranteed income. Here are some examples of not in the market investing banks CDs. The annual percentage yield API is about one to two percent. Your time horizon is typically one to three years and you cannot access the funds until the contract is up. Treasuries, the API is about three percent. Your time horizon is 10 years and you cannot access the funds until the 10 years is up.

Ford Stokes: [00:34:15] Fixed annuities, the annual percentage yield is between three and four percent. Your time horizon is typically four to seven years. You are able to access the funds during the contract period, multi-year guaranteed annuities or MYGAs. You get between two and four percent growth on your principal depending on the duration of your policy. This is less growth than a fixed indexed annuity, but it is guaranteed the annuity company is required to pay you the rate they promised for the duration of your policy. Fixed indexed annuities you receive between five and seven percent growth on your principal. The time horizon is seven to 14 years and you do have access to the funds in your account if you need them. A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed indexed annuity over other not in the market options. If you invest in treasuries or CDs, you will lose ground in your investment due to inflation. Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation annuities because they minimize your risk in several areas and they lock in your gains through the use of point to point protection periods, meaning you won’t lose money.

Ford Stokes: [00:35:37] We’re going to come back from the break. We’re going to talk about smart risk, smart, safe and smart tax strategies. Use the ActiveWealth.com right here on Am I to the answer.

Producer: [00:35:55] 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.

Ford Stokes: [00:36:22] Welcome back, Activators. The ActiveWealth.com show, we’re talking about how to build a smart financial plan with smart, say, smart risk, smart tax strategies, all combined equaling a smart financial plan. And we want you to be smart. We want to be successful. We want you to have a great retirement where you’re not constantly worrying because we want you to have a great long retirement. Won’t you live a long time? Enjoy time with your family. What you see are your grandkids, you know, go to college, get married, have kids so you can have great grandkids and all that kind of stuff and enjoy those parts of your life. And, you know, in our family, we spell love, Timmy, and we want you to make sure that you get the chance to literally spend a great amount of time with your loved ones. And Sam, let’s go ahead and hit him with our inflation demonstration. It’s a shocker today.

Producer: [00:37:16] It’s time for an ActiveWealth.com inflation demonstration now.

Ford Stokes: [00:37:23] Ok, so current US inflation rates, the inflation rate for the United States right now is five point four percent for the 12 months ended June 2021, according to US inflation calculator dotcom after rising five percent previously, according the US Labor Department data published July 13. The next inflation update is scheduled for release on August 11th at eight thirty a.m. and will go ahead and make sure that we can display that so. I wanted to be clear here, we’re looking at a inflation rate of the last 12 months, a five point four percent, if you look at from twenty sixteen through July of 2021, you’re looking at thirteen point two percent growth rate on inflation and the consumer price index increasing as well. Sam, you’ve got even some data on just what the meat costs are, right?

Producer: [00:38:20] Yeah, for just this year, meat costs, poultry costs especially. They’re up more than 20 percent of the year. So if you’re doing the grocery shopping at all, that reflected on your grocery bill and when you’re going out to eat, you’re going to see that reflected on the bill that you’re way to bring to you at the end of your meal, because the margins in restaurant as it is, they have to raise prices to keep up.

Ford Stokes: [00:38:40] Amen. And so what we’ve got to do is be smart about our investments. And one of those is we’ve got to eliminate underperforming assets. And we’ve also got to invest in smart tax strategies, like with a raw gladder conversion or life insurance or both. Visit ActiveWealth.com and reach out to a book, an appointment you can click that set an appointment button in the upper right corner. We’re happy to help you with a free financial plan. That’s a fifteen hundred dollar value at no cost to you. And you’ve been listening to us for months. I would encourage you to say, you know what? Today I’m going to go ahead and call for it. As Deborah and our team are standing by at (770) 658-1777. And we’re happy to get you on my calendar. You’re going to talk directly to me. You won’t talk to any of our other advisors. You’ll talk directly with me. We’re happy to help you. So we’ve talked about a lot today. We talked about smart risk. We talked about smart, safe. We’re also talking about smart tax with Rothblatt or conversion. And again, Rothblatt conversion is when you’re moving money from your IRA to your Roth IRA. Dollar for dollar is the best way to do it. Or you can take money from a taxable account or a savings account, pay the 15 20 percent taxes, which is whatever your top marginal effective tax rate is, and go ahead and apply that and pay the taxes on it.

Ford Stokes: [00:40:08] So therefore, you’re moving money from your tax deferred account in your IRA to your tax free account. In your Roth IRA and you’re using taxable money to pay the taxes on it, that’s the ideal way of doing it. Hope you’ve learned a lot today on how to build a smart financial plan that includes smart, safe, would like a bond replacement with fixed index annuities or smart risk with an actively managed, tactically managed portfolio that also includes a structured note ladder of five months in a row to diversify risk and get you a higher rate of return than you’re getting on your bonds. Now, that would be a really smart risk way to go. That’s something to consider. And then also you want to make sure that you’re reaching out to us to get that free $1,500 value of a free financial plan that includes a portfolio analysis financial plan to your ninety fifth birthday and then also one with your current plan and also one with our recommended portfolios and our recommended plan. And you get all that for free. And it’s a $1,500 value at no cost to you because we want to help you make an informed financial decision about your retirement future. Now for the final countdown. It’s the third.

Producer: [00:41:28] So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:41:37] Our final countdown, we talked about smart risk, smart say we gave you a great market update, we also did an inflation demonstration that talked about five point four percent inflation rate over the last 12 months, thirteen point two cents, twenty sixteen. And we want to make sure that your lifestyle is not eroding and your buying power is not eroding. We want to keep pace with inflation and outpace it. And we’ll talk about outpacing inflation and more information on how to build a really smart financial plan on the ActiveWealth.com next week. Remember your retirement. If you’re going to be a bear, be a grizzly, be aggressive, inspect what you expect about your retirement future. We’re so glad you’ve been with us. And we’ll be right back. Next week, I’m Ford Stokes, the chief financial advisor of Everybody Has a great week.

Producer: [00:42:28] Thanks for listening to the ActiveWealth.com. 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) 658-1777 or visit ActiveWealth.com Investment Advisory Services offered through Brookstone Capital Management LLC. Become a registered investment advisor, become an active wealth management, are independent of each other. Insurance products and services do not offer the BCA, but are offered and sold through individually licensed appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

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Producer: [00:44:46] This material is provided for informational purposes only. It should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data. Past performance is not indicative of future results, which may vary the value of investments and the income derived from investments can go down as well as the future. Returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involved varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for market indices generally do not reflect the reduction of transaction and or custodial charges or the deduction of an investment management fee, the occurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy, not FDIC insured may lose principal value. No bank guarantee.

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Smart Safe Investing Transcript

Producer: [00:00:00] 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. It is not a solicitation or recommendation of any investment strategy. Welcome to the ActiveWealth.com show with your host Ford Stokes, for it is a fiduciary and licensed financial adviser who places your needs first. He’ll help you protect and grow your wealth. The ActiveWealth.com has grown because activators like you want to activate their retirement planning with sound tax efficient investing. And now your host Ford Stokes

Ford Stokes: [00:01:24] And welcome the ActiveWealth.com activators on Ford Stokes the chief financial advisor. I’m joined by our esteemed executive producer Sam Davis, who also has got the new moniker of the new title of Weekend Ambassador. He’s the one that welcomes us to the weekend here on the active. Well, show. Sam, say hello to the folks.

Producer: [00:01:46] Yeah, I got to welcome all of our activators to the weekend. It’s a hot one here in Atlanta, Georgia. Atlanta is living up to its second name, Hot Lanta, for sure. So stay cool, put on the sunscreen if you need to and enjoy the weekend.

Ford Stokes: [00:02:00] It’s even hotter for a guy that’s originally from Kansas. So I’m sure that it’s even the heat’s even getting to you a little bit more than some of the rest of us who were born and raised here. Sam, for

Producer: [00:02:11] Sure. You know, Kansas,

Ford Stokes: [00:02:12] We’d get up to the triple digits in July, but really

Producer: [00:02:15] One hundred degrees in Kansas. It doesn’t feel as hot as ninety degrees in Atlanta, Georgia.

Ford Stokes: [00:02:20] It’s just tough here. That’s a wet heat here. It’s on you. It’s like it’s like an electric blanket that you don’t and a cooler of hot water and then just put on just go out and play tennis. Yeah.

Producer: [00:02:34] If you need to do yard work, be done by 10 a.m..

Ford Stokes: [00:02:37] That’s right. I get up early, bird gets the worm there. All right. So let’s get straight into the market. Update your ActiveWealth.com market update us. GDP falls short as supply chain disruptions and labor shortages thought the comeback. The US economy grows at six point five percent annual pace in the second quarter. The US economy grew less than expected in the three months through June as supply chain disruptions and labor shortages slowed the pace of economic activity while the country reopened from its covid-19 Lockout’s Gross Domestic Product. The broadest measure of economic performance grew at six point five percent annual rate during the second quarter, according to an advanced estimate released Thursday by the Commerce Department, analysts survey. By repetitive, we’re expecting eight point five percent gross who are literally two points lower than what the expectations were. First quarter GDP was revised down from six point three percent from its previous reading of six point four percent. The above trend growth in the second quarter reflected the continued reopening of the US economy and government support via a business loan, stimulus checks and extended unemployment benefits. Thursday’s report offers more evidence that the stimulus provided surprisingly little bang for its buck, with the economy quickly pushing against unexpected supply constraints instead, which have driven inflation higher, said Paul Ashworth, chief U.S. economist at Capital Economics. Businesses have since the economy reopened, navigated supply chain issues caused by factories shutting down to help slow the spread of covid-19. They’ve also struggled to find workers as extended unemployment benefits have encouraged many to stay home.

Ford Stokes: [00:04:24] The issues have combined to lift core personal consumption expenditures. The Federal Reserve’s preferred inflation measure to three point four percent annual growth, the fastest in nineteen ninety two. Looking ahead, economists worry that headwinds to the economy remain. Supply chains are far from getting back to normal, and the story of the covid-19 pandemic, including variants, is far from being finalized, said Mark Hamrick, senior economic analyst at Bankrate Dotcom. And stocks rallied as GDP continued to fall short of expectations and the Robin Hood IPO was on tap. US stock indexes were higher Thursday as traders assess the disappointing gross domestic product report ahead of Robinhood markets. Ink’s initial public offering, the Dow Jones Industrial Average rose to around twenty two point four point six four percent, while the S&P five hundred advance point three six percent, both hitting fresh records. This as the Nasdaq composite ticked up point zero five percent. The gains come a day after markets closed mixed following the Federal Reserve’s decision to keep policy on hold with emergency measures in place while reiterating its belief that the inflation remains transitory. US GDP, like we said, grew at six point five percent, seasonally adjusted annualized rate in the second quarter, according to Census Department. The rating, which was below the eight point five percent pace that the analysts surveyed by Repetitive had expected. As we’ve mentioned before, and stocks Robinhood Markets Inc priced fifty five million shares sold in its initial public offering at thirty eight dollars apiece, the lower end of its market range.

Ford Stokes: [00:06:02] The IPO, will raise two point one billion dollars, giving the trading app company, which trades under the ticker hood Odie’s, a market value of nearly thirty two billion dollars. Facebook Inc reported earnings and sales that exceeded Wall Street estimates but warned revenue growth would slow due to tough comparisons on the company’s quarterly earnings call. CEO Mark Zuckerberg said Facebook will in the coming years transition from a social media company into a metaverse company. Ford Motor Company posted a surprise quarterly profit and raised its earnings guidance as the chip shortage has caused the automaker to focus on higher margin vehicles. Amazon Inc will release its quarterly results after Thursday’s closing bell. Elsewhere, Softbank Group is selling forty five million Bubar technology shares in order to cover its losses in its global and Alibaba. According to CNBC, Deti Global surged after a seven report said that the ride hailing company was considering going private to appease Chinese authorities, which called the report. A rumor went public on the New York Stock Exchange on June 30th. In commodities, West Texas Intermediate crude oil rose fifty seven cents to seventy two dollars and ninety six cents a barrel, and gold jumped twenty four dollars and 30 cents to eighteen hundred and twenty four dollars an ounce. And the overseas markets were in rally mode, so what does all this mean? There’s been a lot of market volatility, especially since Monday, a week ago, where we saw the S&P 500 lose one point eighty nine percent of its value, only to see a rally far exceed that.

Ford Stokes: [00:07:46] It’s really volatile for people that are pre retirees and retirees, they’re looking to plan for their future. They don’t really have an idea of what to do next. And they’re really looking for just a smart sound way to move forward. And what I would encourage you to do is consider a smart financial plan. We’ve got a lot of requests for this. And again, we’ve talked about the last couple of weeks. We’re going to talk about it again today, but we’re going to go into more detail and I’m going to give you a great bank CD alternative starting right at the break, right after the break in segment two. But again, a smart financial plan equals smart, safe plus smart risk plus smart tax. That’s what a smart financial plan is. You’ve got to have smart, safe strategies, smart risk strategies and smart tax strategies when you’re investing. And if you don’t have those or you don’t know what those are, I would encourage you to visit ActiveWealth.com. That’s ActiveWealth.com. And you can click that, set an appointment button in the upper right corner and we’re happy to help you. We’re here to protect your hard earned and hard saved dollars. It matters to us. We care a lot.

Ford Stokes: [00:08:59] And we want to deliver for all of our activators. If you’re want to do an activator, is an activators somebody to listen to show who wants a tax efficient vision and market efficient retirement. They want a successful retirement. And we’re going to help you figure it out right here on the ActiveWealth.com, right here on AM to one of the answer today. We’re going to try to educate you on how to invest in a smart, safe way, how to invest in a smart tax way, and how to invest in a smart risk way. And you’re going to really like this show. It is an important show. I’m glad you’re with us here on AM. Not to of the answer this weekend. We’ve got the weekend ambassador with Sam Davis. He’s already welcome to the weekend. Even though it’s a hot one. We’re we’re ready to go today. I’m kind of pumped up and ready to go. And I cannot wait to share this incredible sound strategy, this smart, safe strategy. Right after the break. It was the ActiveWealth.com right here. And I am not sure the answer. New activators, come right back to here. This brand new and different sound, smart, safe investment strategy.

Producer: [00:10:43] 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.

Ford Stokes: [00:11:14] And welcome back, Activators, the ActiveWealth.com show, so glad you’re with us, Sammy Davis, our esteemed executive producer and ambassador. The weekend is with us. He’s already welcomed us to the weekend. And we’re talking about building a smart financial plan again today. But we’re talking specifically on Smart Safe right now and. Sam, go ahead and roll that sound of her beating the bank seeds

Producer: [00:11:39] Need a higher rate of return from your safe money. There’s enough. It’s time to beat the bank CD rates.

Ford Stokes: [00:11:46] So are beating the bank. CD segment is special today. So most folks, the next annuities are basically seven, 10 and 14 years long. They tie up our money for seven, 10 and 14 years, but they can also. Give us important income for retirement, and they can also give us market like gains without market risk. Now you can have shorter annuities called multiyear guaranteed annuities or MYGAs. Multi year guaranteed annuities, just NYG A what a multiyear guaranteed annuity is an Amiga is the nickname for it. So a two year MYGA is paying two point one five percent that we can offer today. A three year MYGA is paying two point four percent and a five year mortgage paying three point zero five percent. Well, that’s not awesome, but it’s a lot better than point six of one percent, point six of one percent. So less than one percent from like an ally bank. And if you go to, you know, Bank of America or truest or any of the other banks, you’re going to be shocked at how low their rates are. I mean, it’s less than I mean, it’s like point zero, five percent in a one year banks. And right now it’s crazy if you walk into those bricks and mortar banks right now, it’s just you’re losing buying power by doing that. So I would encourage you to not do that because you’re you’re going to end up it’s a melting ice cube strategy. So let me give you a better strategy.

Ford Stokes: [00:13:23] This strategy is amazing. There’s a product out there and we’re not going to name the carrier. All you’ve got to do is call our office at (770) 685-1777 in this carrier. He’s got an incredible product that’s a five year product we just saw they’ve got a three year protection period where the interest grew over three years and it locks in the gains at the end of the three. Well, we’ve seen clients lock in their gains at thirty six percent over the three year period. That’s 12 percent a year. Compounded interest, not simple interest rate, compounded interest. And all you have to do is tire your money out for five years. That is remarkable. You can also take some income like a five percent penalty free withdrawal, each of those three years or five years, if you want. Starting at the end of year one or two, the beginning of your two, but I don’t want to confuse you. I want to make sure you understand this is a five year fixed index annuity. It is tied to a Credit Suisse index. And it’s delivered thirty six percent even including the pandemic. Thirty six percent over the last three years. Without any risk of being in the market and the only tied your money up for five years. And if you want to get a free illustration in a free retirement income plan on this product as a Bankside alternative or a save money alternative or a bond replacement alternative.

Ford Stokes: [00:15:00] It’s part of a smarter financial plan, I got to tell you. All right, let me ask you, as you drive around today, heading Home Depot, you’re heading to Lowe’s, you’re heading to Publix or Kroger, or you’re going to a youth sports event and you got some travel baseball going or soccer still and. And you’re or you’re headed to take your child to cheer practice, like we take our twin 14 year old girls at your practice. You know, let me just ask you. If you got thirty six percent. Growth. Over a three year period in a product that could not lose money in the market because your money was originally invested in a 10 year US Treasury bond, and they took the interest from that at the end of year one and invested into options in this Credit Suisse index. And that index grew thirty six percent or more. And your participation rate in it netted you thirty six percent growth over that three year period. And then they can lock in your gains where you can never move back. You can only move forward and you’re able to cash your money out two years from now depending on how the index does after that. But your original gains and everything, let’s say you put one hundred grand in this strategy. Three years ago, you’d have one hundred and thirty six thousand dollars in that product today.

Ford Stokes: [00:16:22] And two years from now you could take out one hundred and thirty six thousand no matter what. And you had no risk in the market and there were no portfolio fees eroding or advisory fees eroding that money. Would you be interested? I bet you would. So what I would encourage you to do is visit ActiveWealth.com, go ahead and visit ActiveWealth.com, click that set an appointment button in the upper right corner or just send me an email to Ford@ActiveWealth.com. That’s Ford@ActiveWealth.com. And we’ll get you my free book. Annuity 360, and we’ll also get you a free illustration of this five year strategy. Next, we’re going to play Chapter six and Chapter seven for my new book, Annuity three sixty one. The first one talks about the rule of one hundred and the second one talks about the four percent rule. Both are very important rules to understand and risk management and also expense management so that you can make sure your money lasts. And you’re not just depending on your kids and Social Security in the future and you can really see your nest egg grow. Sam, go ahead and play Chapter six and Chapter seven for my new book, Annuity 360, detailing the rule of one hundred and the four percent rule. And we’ll talk about both of them when we come back from the break, right after these two important chapters,

Ford Stokes: [00:17:49] Chapter six, the rule of one hundred. Big idea. You want to risk less as you get older because you have less time to make up any big losses as you get closer to your golden years. Many financial professionals advise gradually reducing your risk. Retirees and retirees don’t have the luxury of waiting for the market to bounce back after a dip. The dilemma is figuring out how safe you should be in certain stages of your life. For years, a commonly cited rule of thumb has helped simplify asset allocation. This rule states that individuals should hold a percentage of their stocks. That is equal to one hundred minus your age. For example, a six year old would have 40 percent of their holdings in stocks and 60 percent in fixed income products like bonds or fixed indexed annuities. Why you should follow the rule of one hundred. Take our current example of a 60 year old at age 40. Your risk capacity is higher. You have more time to rebuild your wealth should you experience a dip in the market. However, at age 60, you can’t afford to risk as much of your portfolio in the market because the time horizon to rebuild your wealth is much shorter. Rule of one. Twenty many financial advisers now advocate the rule of 120 so they can get a significant rate of return for their clients and maintain management of the portfolio. I disagree with today’s market volatility. A retiree does not want to go back to work in a job making less than what they made before. They must consider following the rule of one hundred or at least a fifty-fifty smart financial plan that is built equally with smart risk and smart, safe investments.

Ford Stokes: [00:19:33] Chapter seven, the four percent rule, big idea, withdrawing four percent or less annually from your portfolio will ensure that you will not draw down your account too quickly and that your income lasts for your entire retirement. What is it, the four percent rule is a rule of thumb used by investors to determine how much retirees should withdraw from their retirement account each year. This rule should ideally help provide a steady income stream for the retiree, while also maintaining an account balance that keeps their income flowing throughout retirement by withdrawing only four percent from your account. Many financial professionals believe this will help your wealth last through your retirement and that you will be able to live comfortably with this withdrawal rate. This rule helps financial planners and retirees set the withdrawal rate for their portfolios. Life expectancy also plays an important role in this process by determining if the selected rate will be sustainable. Retirees that live longer will need portfolios to last longer, and medical costs and other expenses could increase as retirees age. Where did this rule come from? The four percent rule was created using historical data on stock and bond returns over a 50 year period from 1926 to 1976, before the early 1990s. Experts generally considered five percent to be the safe amount for retirees to withdraw from their portfolio each year. In 1994, William Bangin a financial adviser, conducted a study of historical returns. He focused heavily on the severe market downturns in the 1930s and the 1970s bank and concluded that even during those markets, there was no historical basis that a withdrawal rate based on the four percent rule would exhaust our retirement portfolio in less than thirty three years.

Ford Stokes: [00:21:25] What about inflation? Some retirees will choose to stick to the four percent rule all the time and never adjust for inflation. However, the rule allows retirees to increase the withdrawal rate to keep up with inflation. There are two options to do this. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes. Option one setting a flat annual increase of two percent, which is the Federal Reserve’s target inflation rate option to adjusting withdrawals based on actual inflation rates. The first option provides steady and predictable increase, while the second option will more effectively match your income to cost of living changes to scenarios where you should avoid using the four percent rule scenario. One A severe or protracted market downturn can erode the value of a high risk investment vehicle much faster than it can in a typical retirement portfolio. Be cognizant of the health of the market and talk with a professional. If you have any questions or want to make changes to your portfolio scenario to the four percent rule does not work unless you commit to it year in and year out. Violating the rule for one year to splurge on major purchases can have severe consequences down the road. It will reduce the principal, which directly impacts the compound interest that the retiree depends on for sustainability.

Ford Stokes: [00:22:50] Hope you enjoy those two chapters. My new book, Annuity 360. When we come back from the break, I’m going to go in a little bit more detail about the rule of one hundred and the four percent rule as part of our smart, safe portion of our smart financial plan. You’re the ActiveWealth.com right here on AM Next with the answer. We’ll be right back.

Producer: [00:23:12] But this time.

Ford Stokes: [00:23:25] Welcome back, Activators, the ActiveWealth.com Ford Stokes chief financial adviser gets Sam Davis, our esteemed executive producer, with us. And we just heard Chapter six in Chapter seven from our new book, A.C. 360. And if you want a copy of my new book, A.C. 360, all you’ve got to do is visit Annuity 360 dot net. I want to talk a little bit about the rule one hundred. I want to be clear. You subtract, you take one hundred, you subtract your age. Let’s say you’re 60 years old for easy math here. That means you got 40 left over. Right. One hundred minus 60 equals 40 or 40 percent of your portfolio. Then according to the rule, one hundred should be invested into securities. Many of you are probably gasping right now as you’re driving around. Don’t drive off the road because you probably have 80 plus percent invested in the stock market right now. Let me ask you, if we have another downturn like we did in 2008 or the in 2009 with the S&P 500 lost from March one, 2008 to March 30th, 2009, the S&P 500 lost fifty point one percent of its value. Could you afford to lose fifty point one percent of your retirement nest egg? And the chances are that the answer to that is no. So we want to make sure that you don’t have a change in lifestyle during retirement.

Ford Stokes: [00:24:50] So far, the rule of one hundred is really important. You want to be safe with your money, but also you want to get income and bonds can generate income, but also as part of a smart, safe strategy, you could replace your bonds with fixed index annuities and you could replace your bonds with that five year strategy that gave you the just generated 12 percent a year for the last three years in a row and compounded interest with a fixed indexed annuity product. That’s a five year fixed indexed annuity product. Also, we’ve already had a beating bank CD segment today. If you’re still invested in bank CDs, I would ask you why? Why are you doing that to yourself and your lifestyle? Go ahead and consider investing in this five year income strategy, the safe investment strategy, the sound investment strategy with this five year fixed indexed annuity. All you’ve got to do is visit ActiveWealth.com and click that set an appointment. But in the upper right corner, also my county link is Kalanithi. It’s c l e n d l y dotcom. Com Ford Stokes. And you can book an appointment directly into my calendar. You can also just send me an email forwarded ActiveWealth.com. I want to get a physical copy of your book Annuity three sixty. Happy to Deborah and her team are happy to send that all to you and you’ll learn about the rule of one hundred.

Ford Stokes: [00:26:13] Your learn about the four percent rule about what you should do. But again, the rule of one hundred is about getting more balanced. But if you can get income, you can generate income. We’re going to play another chapter of my book here in this segment about how you can generate your own personal pension here in just a second. If you follow the rule one hundred and you balance your portfolio, just take 40 or 50 percent of your portfolio invested into a fixed indexed annuity. That’s going to get you growth, but you can generate income off of it. And I’ve got another hint for you. Listening to the radio, I’ll tell you, you can actually invest Roth IRA money into a fixed indexed annuity, too, and you can even implement a Roth later conversion with a fixed indexed annuity as well, that you didn’t know that. But if you’re an activator you’ve been listening to show, you probably did. But this first time you’ve been listening to show or even listening for six months, you didn’t know that you can implement a Roth IRA conversion within a fixed indexed annuity structure. We’re happy to help you do that. And again, all you have to do is visit ActiveWealth.com and click that set an appointment.

Ford Stokes: [00:27:14] But in the upper right corner, we look forward to talking to you. Now, let’s talk about the four percent rule. The four percent rule basically states you’re going to spend no more than four percent of your portfolio each year. And so therefore, you won’t run out of money if you’re spending 10 to 12 percent of your retirement nest egg in the first year or two of your retirement, you’re going to run out of money in 10 or 12 years. But we don’t want you to do that. We want you to only spend four percent of your money each year. So therefore you can count on your money lasting. So therefore you don’t become a financial burden on your kids and you don’t become completely dependent on your Social Security income benefit. Also want to remind you, your Medicare surcharge comes out of your Social Security benefit. They withdraw it from your Social Security income benefit. Many of you are not. Sixty five years old yet. Don’t know that. And we want to make sure that we’re managing. Our cash flow, we want to minimize. All the expenses we have and we want to make sure we don’t have a retirement income gap. We’ll talk about the retirement income gap on next week’s show. But we’ve just talked about the rule one hundred, which basically states, if you subtract your age from one hundred and that gives you the percentage of your portfolio that should be at risk.

Ford Stokes: [00:28:33] And again, if you’re 60 years old, you’ve got 40 percent left over. That means you should only have 40 percent invested into securities. And when the four percent rule, again, that’s the amount of money you might withdraw each year from the starting value of your portfolio of stocks and bonds in retirement, experts consider a four percent withdrawal rate to be safe, as withdrawals should consist of interest and dividends. As we’ve got to do a much better job at managing the risks we’re taking and also managing the withdrawals that we take from our retirement nest egg. And we’re here to help protect and grow your assets because remember, you worked hard to earn that money. It was probably even harder for you to save it. You’ve got so many demands on your money and your income and your time, and we want to do everything we can to help you. I mean, talk about capital for a second. You’ve got a lot of. Human capital and working capital when you’re young, but you don’t have a lot of financial capital. Well, as you get older, you should be able to save and your forehead and your IRA and your capital, your actual money capital will increase, but your human capital will go down because you’re not going to have 40 or 50 years to continue to work.

Ford Stokes: [00:29:47] We’ve got to make sure that you’re not heading back to Wal-Mart, working and stocking shelves later in life and making less money than you did when you worked in the real workforce. We don’t want you to have to go back to work 10 years after you retire as an example. And so we’re trying to do everything we can with the rule. One hundred in the four percent rule to help you. Now, next, Sam is going to talk about he’s going to play the rule of 72, which is Chapter eight and of my new book, Annuity Three. And again, you can get my book, Annuity 360. All you have to do is visit Annuity 360 dot net. And we’re happy to help you with that. All you gotta do is visit Annuity three sixty to get my brand new book, Annuity Three Sixty. Learn all you need to know about annuities, which ones to avoid and which one to buy for a successful retirement. And we’re happy to help you right there. But go ahead, Sam, and play Chapter eight of my new book, Annuity 360, which talks about the rule of 72, which talks about how fast your money is going to double. And we’ll talk about that right after you hear this chapter,

Ford Stokes: [00:30:51] Chapter eight, rule of 72. Big idea. Knowing how long it will take your investments to double is a good planning tool. This will help you track your investments and calculate future earnings. What is it? The rule is a simple way for you to calculate how long your investments will take to double with a fixed annual rate of interest. If you divide 72 by the annual rate of return, you can get an estimate of how many years it will take for the initial investment to duplicate. The rule of 72 is relatively accurate when it comes to low rates of return, but becomes less accurate as rates of return increase. Example, an investment of one dollar annual fixed interest rate equals 10 percent 72 divided by ten equals seven point to an investment of ten dollars with an annual fixed interest rate of 10 percent would approximately take seven point two years to grow to twenty dollars a rule of 72 adjustment. The most realistic simulation for the rule of 72 is an eight percent interest rate. However, you can make a small adjustment to the rule in order to make the calculation even more accurate. For every three points than an interest rate strays from eight percent, you either add or subtract one from seventy two. The adjustment is not necessary. But some people prefer to make this adjustment because the time frame of this version of the rule is more accurate. Example one if your rate is five percent, you would just adjust the rule to be the rule of seventy one. This is because five percent is three points lower than eight percent, which means you subtract one from seventy two.

Ford Stokes: [00:32:27] Example two, if your rate is 11 percent, you would adjust the rule to be the rule of seventy three. This is because eleven percent is three points higher than eight percent, which means you would add one to seventy two other ways to use the rule of seventy two things. With compounded rates, you don’t have to use the rule of seventy two just for invested or loaned money. It can be used for anything that grows at a compounded rate such as population, macroeconomic numbers, charges or loans. For example, the gross domestic product GDP grows at four percent annually. You could expect the economy to double in eight years because seventy two divided by four equals eighteen estimating the effects of investment fees. The rule of seventy two can also be used to estimate the long term effects of fees that eat into your investment. Example one a mutual fund charges six percent in annual expense fees. It will reduce your investment principle by half in about twelve years because seventy two divided by six equals twelve. Example to a borrower pays eight percent interest on a credit card. They will double the amount they owe in nine years because seventy two divided by eight equals nine estimating the effects of inflation. The rule can also be used to find out how long it will take for your money’s value to have due to inflation. Example, inflation is at four percent. The purchasing power of your money will have in eight years because seventy two divided by four equals eighteen.

Ford Stokes: [00:34:02] So if you enjoyed that chapter on rule of seventy two, want to give you a quick hint here. That five year strategy that’s earned twelve percent. If you use the rule of seventy two, your money will double in that strategy in six years if you invest it into a five year strategy and then also roll over into another five year strategy but at twelve percent a year. It will literally double in six years without any market risk. That’s remarkable. If it does what it’s done previously and obviously, you know, past performance, no indicator of future results. But it is remarkable that a safe product with that time to an index that’s linked to an index like a Credit Suisse index has generated 36 percent over the last three years. And those gains and the principle is completely locked in to be withdrawn two years from now and a five year strategy that is remarkable. We come back from the break. We’re going to talk about more safe strategies. We’re going to have time for the smart, safe part of our smart financial plan. This week, we’re going to talk about how you can create your own personal pension. We’re going to have a retirement cost cutter. We’re also going to have an inflation demonstration segment in segment four. You don’t want to miss segment four.

Ford Stokes: [00:35:42] Welcome back to ActiveWealth.com. We’re talking about smart, safe strategies today, we’re talking about how to reduce the volatility within your own portfolio. And we also really focused in on a five year strategy that recently paid out thirty six percent to clients. That’s 12 percent a year. And they were able to lock in their gains after the end of that three year protection period. They locked in their principal and their gains. So if you got one hundred thousand dollars invested, that five year strategy, the first three years, that hundred thousand dollars is worth one hundred and thirty six thousand. And it’s incredible because your money was not at risk in the market whatsoever and didn’t face the downturn during the pandemic. And also what happened a couple of Mondays ago as well. Usually that five year strategy earning 12 percent a year using the rule of 70 to our money is going to double every six years using that strategy. So if you’ve got questions about that, you’d like to double your money every six years and keep it safe with market like gains without your money, be invested in the stock market. I would encourage you to visit ActiveWealth.com click that set an appointment but in the upper right corner and set an appointment directly in my calendar. We’re happy to help you. Next, I want to talk about inflation. Let’s go ahead, Sam, and roll the inflation demonstration sounder.

Producer: [00:37:02] It’s time for an ActiveWealth.com inflation demonstration now.

Ford Stokes: [00:37:10] Treasury Secretary Janet Yellen earlier this month cautioned that prices could continue to rise for several more months, though she expects the recent startling inflation run to ease over time. In a CNBC interview, the cabinet official added that she worries about the problems inflation could pose for lower income families looking to buy homes at a time when real estate values are surging. Consumer Price Index, which measures costs for a wide range of items, increased five point four percent in June, the fastest pace in nearly 13 years. Prices that goods and services producers receive for their products jumped seven point three percent, a record for data going back to 2010. Also, housing prices in the nation’s largest cities climbed nearly 15 percent in most recent measurements from S&P, CoreLogic, Case Shiller. All of that has added up to concern that inflationary pressures could stall the aggressive US economic recovery, with the housing escalation raising fears of a bubble. So I don’t think we’re seeing the same kinds of dangers in this that we saw in the run up to the financial crisis in 2008, Yellen said. It’s a very different phenomenon, but I do worry about affordability and the pressures that higher housing prices will create for families that are first time homebuyers or have less income. What that tells you is you need to stay invested. And one of the best ways to stay invested is to consider a bond replacement and invest in a fixed indexed annuity and also delete the advisory fees and portfolio fees for that portion of your portfolio, because the insurance company, the annuity company, pays us as the advisor. And so as a as a one time commission that we have to monitor and manage that annuity with that client for the life of that annuity. We can also roll that annuity into other products, other financial products and sound financial products or into other annuities and get you a bonus on that money, which we think is a remarkable way to go. Now, let’s give you a retirement cost cutter

Producer: [00:39:14] Ready to save some money. Here’s our retirement cost cutter of the week.

Ford Stokes: [00:39:20] So the retirement cost Cutter don’t want to share with you today is downsizing. Consider downsizing the family home, get the mortgage paid off, make your extra 10, 15 percent. You’ve seen the run up this past year in the Atlanta housing market. Wouldn’t it be great to take your six hundred thousand to a million dollar house, sell that and then move into a smaller home and a 55 plus community where you can hang out with the same type of folks? Wouldn’t it be great if you had the equity that’s in your the old family home generating significant income for you? We can help you do that. And so the cost cutter tip for this week is downsizing. I would encourage you to visit twenty one cost cutters, dotcom, that’s twenty one cost cutters, dot com, and you’ll get my free report right there. Now, the last thing we’re going to do in this smart safe show, we’re talking about smart, safe and sound strategies for investments that kind of coupled with our tactical asset allocation management models with our portfolios is you can create your own personal pension and save. Go ahead and play Chapter nine from my new book, Annuity three Sixty. And if you want my new book, Annuity three sixty two, we have to learn all you need to know about annuities, which ones to avoid and which one to buy for successful retirement. I’d encourage you to visit annuity three sixty dot net. That’s annuity three sixty, not net. Go ahead and say I’m in chapter nine. You can create your own personal pension.

Ford Stokes: [00:40:50] 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. Those who are approaching retirement are afraid that they will run out of money. But an annuity can help make sure you have income you can never outlive. An annuity can be a great investment for your portfolio, but I 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. Duties 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.

Ford Stokes: [00:42:26] 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. 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 in 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 armed. 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 R&D easier, inspect what you expect with any annuity.

Ford Stokes: [00:43:49] 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. 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 that will help you build a successful retirement and they’ll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider, know the consequences of both. This is a decision you will make at the beginning of the investment process. One poor decision here can cost you 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 ten to twelve 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.

Ford Stokes: [00:45:11] And now for the final countdown. It’s the third down. So let’s recap what you may have missed. It’s the final countdown.

Ford Stokes: [00:45:25] Today show, we thought we gave you a market update where we had GDP was two full points lower than expectations, although the market is up this week we talked about the rule of one hundred and how how much money should be at risk in the market of your retirement nest egg. We talked about the four percent rule. Try not to spend more than four percent of your portfolio each year. We gave you an incredible beating. The bank CDS strategy with a five year strategy only tie your money up for five years. That actually has generated thirty six percent over the last three years or 12 percent a year. Compounded interest growth rate. And all you have to do is visit ActiveWealth.com to get that strategy. Just click that set an appointment, but in the upper right corner and we’re happy to give you a free consult on that. We heard from chapters from my new book, Annuity 360, and you can get that new book, An Annuity 360 Dot Net. We gave you our inflation demonstration with Yellen giving us what she sees on the horizon. And then we gave you the retirement cost cutter with downsizing all this or smart save strategies as part of our smart financial plan. Again, a smart financial plan equals smart save smart risk and smart tax investment strategies, even less the ActiveWealth.com right here on AM 920. The answer. We come back next week. We’re going to talk about retirement income gap and smart risk and smart tax strategies because we’ve handled the smart safe this week. And listen, remember, with your retirement, if you’re going to be a bear, be a grizzly, be aggressive with your hard earned and hard save money. We can’t wait to talk to you next week right here on the active well show on AM Nonintuitive. The answer.

Producer: [00:47:05] Thanks for listening to the ActiveWealth.com. 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 ActiveWealth.com Investment Advisory Services offer to Brookstone Capital Management LLC. Become a registered investment advisor, become an active wealth management, are independent of each other. Insurance products and services are not offered to BCA but are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

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Get Smart after Market Volatility Transcript

t after Market Volatility Transcript

Producer: [00:00:30] 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. It is not a solicitation or recommendation of any investment strategy. Welcome to the ActiveWealth.com show with your host Ford Stokes, for it is a fiduciary and licensed financial adviser who places your needs first. He’ll help you protect and grow your wealth. The ActiveWealth.com has grown because activities like you want to activate their retirement planning with sound tax efficient investing. And now your host Ford Stokes

Ford Stokes: [00:01:24] Welcome the ActiveWealth.com activators I’m Ford Stokes, your chief financial advisor. And we’ve got our esteemed radio show executive producer. But he’s also what we’ve now dubbed the ambassador to the weekend. Mr. Sam Davis is with us as well. Welcome to the show, Activators. And yes, it is the weekend and it’s not raining finally for once in a while here in Atlanta. And we’re going to enjoy the last bits of summer. That’s it. So I’m all I’m always really enlightened and heartened by. You’re welcoming us to the weekend and thanks for the weather update. We appreciate that. Hey, I know everybody’s got those T times for Saturday and Sunday. I just want to let you know you’re going to be good to go. That’s good stuff. Also, what people not a lot of people realize is that Santa actually does voices for national ads across the country, even for the US Army and and other advertisers. So we’re very fortunate to have you on our show, Sam, and thanks for supporting us. Yeah, happy to be here. That’s it. So on today’s show, we’re going to talk more about a smart financial plan with smart, safe, smart risk and smart tax strategies. And we’re going to go over some really important factors right now and things that you need to be watching, because it’s my goal as a fiduciary to try to take as much risk off the table for you. We want to do everything we can to take care of our activators out there.

Ford Stokes: [00:02:52] And if you’re wondering how an activator is, it’s somebody who is somebody who listens to the show on a weekly basis. It’s someone who wants a successful retirement. It’s somebody who wants a fee efficient, market efficient and even, dare I say, tax efficient retirement is tough to get those these days. On today’s show, we’re going to talk about all the different strategies that make up a smart financial plan. We’re going to do a quick market update. We’ll also have our final countdown, recapping everything today. But I want to kind of start just by giving you a quick market update, and then we’re going to go straight into smart, safe strategies. And we’ll also play a little bit from my new book, Annuity 360. Also, if you’re interested in getting my book, Annuity 360, so you can learn all you need to know about annuities, which ones to avoid, which one to buy for a successful retirement, all you have to do is visit Annuity 360 dot net. That’s Annuity 360 dot net and you’ll get the free download of that. You can also visit bond replacement dotcom. That’s bond replacement dotcom. If you want to get my free report on why it makes sense to replace your bonds with a safe and sound, secure financial product. Listen, we’re fiduciaries, financial advisors. We kind of believe in tactical asset allocation and active wealth management. That’s why the name of my company is active wealth management.

Ford Stokes: [00:04:20] And we also want to do everything that we can to try to take risk off the table and help you maximize the growth of your assets, because always, you know, it’s our goal to protect and grow your money. I always say that, listen, it’s hard to earn the money, but it’s even harder to save it when you’re earning money and you kind of live up to the lifestyle and you’ve got the next thing you want to buy or whether it’s a boat or a renovation on a basement or a trip or paying for kids college or whatever that is. We’ve just got a lot of things going on and a lot of things that require our time and our money. And we take it very seriously. When people come to us and they bring their hard earned wealth, but mainly they’re hard saved wealth, we want to do everything we can to protect and grow that wealth. And so let’s go straight into this market update and then we’re going to talk more about smart, safe investments first and smart risk. And then also the two truly tax free strategies for a smart tax investment strategy as well. You ActiveWealth.com market update. US stock futures were pointing higher Friday, putting the major averages on track for four straight days of gains on a collision course with all time highs. After an incredible tough day on Wall Street on Monday, where we saw, like the S&P 500 lose one point eight, nine percent of its value and then only to see it recover.

Ford Stokes: [00:05:52] And then some of these this rally of four straight days, the Dow Jones Industrial Average futures gained one hundred fifty seven points or point four or five percent, while the S&P futures and NASDAQ 100 futures advanced point for one point three, six percent, respectively. All three of the major averages ended Thursday session with zero point five percent of their respective highs. They were right there. They were just within point five percent of their highs. So in stocks, you know, Intel CEO Pat Guesclin here told The Wall Street Journal that the global chip shortage could stretch into twenty, twenty three. The shortage, which was a result of lockdown’s, aimed at slowing the spread of covid-19. It snarled auto production and caused supply chain dislocations in other industries, including cell phones and consumer electronics in earnings, Dow component American Express Co. reported revenue jumped thirty three percent from a year ago as consumer spending topped PREE pandemic levels. The credit card giant released eight hundred and sixty six million dollars of reserves that had been built up to protect against losses during the pandemic. Twitter exceeded Wall Street estimates on both the top and bottom lines as revenue surged over 74 percent year over year, the fastest since 2014. The number of its monetized daily active users grew eleven percent, snapping beat on earnings and revenue as the number of global daily active users rose to twenty two hundred and ninety three million, up almost five percent for the previous quarter.

Ford Stokes: [00:07:23] The social media company guided for revenue growth of fifty eight to 60 percent in the current quarter, down from the one hundred and sixteen percent annualized growth in the last quarter. The strong results boosted other tech names, including Amazon, Apple Ink and Microsoft Corp.. Next week, Boeing, Facebook, Tesla, UPS, MasterCard and McDonald’s are all among the companies scheduled to report their quarterly earnings results. And in commodities, West Texas Intermediate crude oil fell twenty two cents to seventy one dollars and sixty nine cents a barrel and gold slipped seven dollars and fifty cents to seventeen hundred and ninety seven dollars and 90 cents an ounce. And the overseas markets were mixed with strength in Europe and weakness in Asia. So that’s basically your market update. And we want to talk through kind of what all this means. So if you if you are just growing tired of watching the volatility and seeing your your portfolio lose like almost two percent in a single day, I would encourage you to consider at least replacing a portion of your assets and primarily the bond portion of your assets with a sound financial product that’s got one hundred percent financial reserve requirement. That would be a bond replacement strategy that would replace basically the the bonds your portfolio with fixed index annuities and. Let’s just take and again, this is part of our Smart Financial Plan segment here in which we’re trying for this whole show, we’re trying to talk about a smart financial plan and how to truly build a smart financial plan.

Ford Stokes: [00:09:05] And in our examples, we’re going to use basically a million dollar portfolio. So if you’ve got a million dollar portfolio, the typical million dollar portfolio, it kind of started in, you know, with a 60 40 structure started in nineteen fifty two with Harry Markowitz getting credit for being the founder of Modern Portfolio Theory, although other people used it before he was using to non correlated assets on the same market exchange, which is basically stocks and bonds. And if you got 60 percent stocks and 40 percent bonds, that’s a good portfolio that’s going to protect against some downside risk. But there’s been a lot more volatility with bonds, especially in our slightly rising interest rate environment. And you’re also likely paying between one and one and a half percent on an advisory fees on the bonds that you have. So you’re paying like six thousand dollars a year just on the bonds portion. If you replace those bonds, the fixed index annuities, you would literally delete or eliminate two hundred ten thousand dollars of advisory fees over thirty five year retirements that you’re 60 years old between now. If you’re six years old, between now and when you turn ninety five, you’re going to save at least two hundred ten thousand dollars just in simple math. And the average rate of return of the fixed index annuity is especially if you were invested in some of the ones that we represent, you’re looking at an average rate of return of about six point nine four percent based on 20 20 levels.

Ford Stokes: [00:10:32] And the average rate of return of the bond of the Moodies via bond index was just three point two percent in twenty twenty. If you look at that over a thirty five year period, the performance growth difference is two point eight five four percent. That is a significant difference. And there’s never been I’ve never seen any type of model out there that says that the bonds outperform fixed index annuities. Now, obviously, we’ve seen lots where the stock portfolios, 100 percent stock portfolios can outperform fixed index annuities. But you have risk associated. But why would you take one hundred percent financial reserve product where the US government, the state requires that the annuity companies preserve one hundred percent of the money, give them into safe financial products like the 10 year US Treasury, and then they take the interest off of those and invest those into options. And in indexes like the S&P five hundred, the Barclays Atlas five or the Credit Suisse Raven Pack. And those are actively managed strategies. The S&P is a passive strategy, but it follows the top Standard Poor’s 500 companies. You’re just doing a much better spot and you’re going to end up having two point eight five four million dollars more. If you if you started with a million dollar portfolio of four hundred thousand dollar, portion of that portfolio was in bonds and you put those into a fixed index instead.

Ford Stokes: [00:11:55] That’s a remarkable result. And when we come back from the break, we’re going to play a chart for my new book about bond replacement. You can learn more about bond replacement and specifically some of the risks you’re going to avoid. And we’re going hear more about that right when we come back. We’re talking about smart financial plan with smart, safe, smart risk and smart tax strategies to build a successful retirement. You’ll stay active. Well, show right here on AM 920. The answer. And welcome back, Activators, the ActiveWealth.com show, and we’re talking about how to build a smart financial plan that includes smart, safe, smart risk and smart tax strategies, that equally smart financial plan and hopefully a less volatile, more peace of mind and more successful retirement because we want to help protect and greater wealth. So Sam’s right to play Chapter 15 for my new book, Annuity 360. And if you want a free copy of my book, go ahead and visit a annuity 360 dot net. That’s Annuity 360 dot net and save. Go ahead and play Chapter 15 about bond replacement. We’ll talk about that and we’ll start talking about what it means to start implementing smart risk strategies as well. In this segment, right after Sam plays Chapter 15 about bond replacement and how that can benefit your portfolio.

Producer: [00:13:30] Chapter 15, bond replacement with fixed indexed annuities. Big idea. Historically, bonds have seen volatility when the market is volatile. Fixed index annuities are not subject to the same volatility, which makes them a much safer investment. You might have heard a financial adviser talk about replacing your bonds with annuities to protect your wealth and grow your retirement funds. At my firm ActiveWealth.com Management, we believe this is a smart way to protect your future. Many people have learned that bonds are a safe way to invest your money. But there are some downsides to bonds that should make you think twice. We’ll talk about some reasons why you should consider replacing your bonds with annuities. First, here’s some information on the history of bonds in the United States. Historical bond volatility. The 1900 saw two secular bear and bull markets in U.S. fixed income inflation peaked at the end of World War One and World War Two due to increased government spending. The first bull market started after World War One and lasted through World War Two. The U.S. government kept bond yields artificially low until 1951. The long term bond yields were at one point nine percent. In nineteen fifty one, they climbed to nearly 15 percent in 1981. In the 1970s, globalization had a huge impact on bond markets. New asset classes such as inflation, protected securities, asset backed securities, mortgage backed securities, high yield securities and catastrophe bonds were created early.

Producer: [00:15:00] Investors in these new asset classes were compensated for taking on the challenge. The bond market was coming off its greatest bull market coming into the 21st century. Long term bond yields declined from a high of fifteen percent to seven percent by the end of the century. The bull market in bonds showed continued strength in the early 21st century. But there is no guarantee with our current market volatility that this will hold see chart fifteen point one to see the incredible difference of investing in a fixed index annuity versus investing in bonds. Why you should consider replacing your bonds with annuities. The first question you should ask yourself is this why would you take market risk with your bonds when your bonds can lose their value? If you just look at the history alone, you can see how uncertain the future of bonds is. Inflation and fluctuating interest rates play a big role in bond yields. Interest rate risk of bonds, bonds and interest rates have an inverse relationship. When interest rates fall, bond prices rise. Due to the covid-19 pandemic, investors have moved their money to bonds because they believe it is a safer investment option. However, this has caused bond yields to fall to all time lows as of May 24th. 2020, the ten year Treasury note was yielding point six four percent and the 30 year Treasury bond was at one point to seven percent.

Producer: [00:16:22] Reinvestment risk of bonds. This is the likelihood that investments cash flows will earn less and a new security. For example, an investor buys a ten year one hundred thousand dollar Treasury note with an interest rate of six percent. They expect it to earn six thousand dollars a year. At the end of the term, interest rates are four percent. If the investor buys another 10 year note, they will earn four thousand instead of six thousand annually. Consider the possibility that interest rates change over time when deciding to invest in bonds systematic market risk. This refers to the risk that is inherent to the market as a whole. It will affect the overall market, not just a particular stock or industry. This can be unpredictable and it is impossible to avoid diversification cannot fix this issue, but the correct asset allocation strategy can make a big difference. Unsystematic market risk. This type of risk is unique to a specific company or industry similar to systematic market risk. It is impossible to know when unsystematic risk will occur. For example, if someone is investing in health care stocks, they may be aware of some major changes. Coming to the industry, however, there is no way they can know how those changes will affect the market, there are two factors that contribute to company specific risk business risk.

Producer: [00:17:45] There are two types of risk, internal and external. Internal refers to operational efficiency and external would be similar to the FDA banning a specific drug that the company sells financial risk. This relates to the capital structure of a company. A weak capital structure can lead to inconsistent earnings and cash flow that can prevent a company from trading reduced advisory fees. Investors who trade individual stocks may know how much commission they are paying their broker, but individuals who buy bonds often have no idea what type of commission they are paying. Bond dealers collect commission on bonds they sell called markups, but they bundle them into the price that is quoted to the investors. This means you are unaware of how much commission you are actually paying. Standard and Poor’s estimates of bond markups is zero point eight five percent of the value for corporate bonds and one point two one percent for municipal bonds. However, markups can be as high as five percent, up to fifty dollars per bond. Bonds have finite durations. Bonds only provide income for a finite amount of time. Unlike an annuity which provides income for life. You must reinvest your money if you want to continue generating interest with bonds. However, reinvesting with a bond can sometimes come at a loss. As we discussed above, annuities will provide you with an income you can never outlive.

Ford Stokes: [00:19:08] I’ve enjoyed listening to Chapter 15. Bond, replaced with fixed indexed annuities fixed in exchanges are not subject to the same volatility, which makes them a much safer investment. And we learned about the different types of bond risk out there with reinvestment risk and interest rate risk and systematic and unsystematic market risk and how to reduce advisory fees, and also how bonds have finite durations as well, whereas a fixed indexed annuity doesn’t. Why are you paying advisory fees and why are you continuing to invest in bonds? Why don’t you just invest in stocks and fix the sexuality’s instead and also eliminate any bank CDs as well? By investing in a fixed index annuity with the money, the safe sound money that you would have invested, so I would encourage you to consider investing in a bond replacement strategy. And if you want more information about that, you can just visit bond replacement dotcom. Again, bond replacement dotcom is my pre-report. You can get the immediate download just by putting your information in. Just visit bond replacement. Also, if you want to book a free financial consultation with me directly with me, you won’t talk to a downline adviser. All you have to do is pick up the phone to give us a call at (770) 685-1777. And Miss Deborah will be ready to take your call.

Ford Stokes: [00:20:36] And all you’ve got to do is just call (770) 685-1777 or visit ActiveWealth.com and click. That set an appointment, but in the upper right corner, that’s ActiveWealth.com. We’ve been talking about building a smart financial plan. We just talked about smart, safe and smart savers. There’s really three investment options out there, primarily investment options out there. No one is not in the market. We’ve got growth, the safety market upside, limited downside. Your principal and gains are protected. There’s a low cost, you know, zero to one percent annual fee. Generally, we’re the ones we deal with the fixed index, we deal with it. It’s zero percent the time horizon, these products that we deal with between seven and 14 years and you can potentially earn between five and seven, even as high as nine point eight four percent per year. And if you want to know which fixed index annuity that is, all you have to do is give us a call at (770) 685-1777. We’re happy to give you a free retirement income plan at no cost to you. And then you’ve also got options for guaranteed income. That’s a fixed index. And that’s the number one option is not in the market. Number two option is in the market passive, which is a lot like your phone.

Ford Stokes: [00:21:52] It’s with passive investing. You’re going to capture one hundred percent of the market gains and one hundred percent of the market losses because you’re just going to hang in there. Right. And you’re going to be asked to just hang in there by your broker or your advisor. And we think that hope is not a strategy. You need to take more of an active role with your investments and inspect what you expect and get an idea and rebalance things on a monthly basis, at least the time horizon. In the marketplace, investing is like 10 to 30 years. And in twenty eight, passive investors would have lost about thirty eight percent and in 2009 they would have come back twenty six percent. But if you had a million dollar portfolio, again, we’re talking about that same example of a million dollar portfolio sitting in your IRA, you would have lost two hundred thirty seven thousand five hundred dollars. That’s a significant loss. And you will add seven or sixty two thousand five hundred dollars left over. For many people, that’s a lifestyle change. And then option three of the primary. Three ways that people invest is in the market tactical, where our goal is to capture 70 percent of the market gains for only, but only 40 percent of the market losses.

Ford Stokes: [00:23:02] That’s our goal. It’s usually an advisory fee between one and one and a half percent. The time horizon is six to eight years. You go in and implement tactical asset allocation for just six to eight weeks as an example. And in twenty eight you would have only lost sixteen percent in twenty eight, but you would only come back eighteen point two percent, but you would have only lost over that two year period. You and I lost over just right around thirty seven thousand two hundred twenty five dollars versus losing two hundred thirty seven thousand. So you would have, you’d have nine hundred sixty two thousand seven seventy five left over versus having seven sixty two five. That’s the number three investment option, the primary investment option, which is in the market tactical. So we feel like a best combination is between smart, safe, with not in the market investing and smart risk, which is in the market tactical. That’s what we like to do. And when we come back from the break, we’re going to talk more about how to invest with tactical asset allocation. We’re also going to talk about smart tax strategies, the only two types of tax free investments out there, which is Roth IRAs and life insurance, where I talk about how to implement both of those strategies in segment three and four, it was the ActiveWealth.com writer and I am not sure of the answer.

Ford Stokes: [00:24:23] And we look forward to talking more about how to build a smart financial plan with next Smart Risk and Smart Tax Act. Well, show right here on AM. Not the answer. Welcome back, Activators A.M. Show, and we’re talking about how to build a smart financial plan that includes smart, safe, smart risk and smart tax strategies, we’ve kind of gone through a lot of the smart, safe strategies with doing a bond replacement, with investing in fixed index annuities. And then we’ve also talked about smart risk with implementing a tactical asset allocation management strategy to manage your wealth with something that rebalances at least on a monthly basis and not just hanging in there. And then I want to talk about beating banks CDs, because with the with the volatility that we saw on Monday, earlier this week, where the S&P 500 lost like one point eight, nine percent in a single day, I want to make sure and obviously we’ve had a rally the next of the last four days this week to come back even harder and stronger. But I want to make sure. Are many of you are thinking about well, maybe I just need to put my park my money in bank CDs, I want you to consider two options

Producer: [00:25:54] Need a higher rate of return from your safe. Money is

Ford Stokes: [00:25:58] Enough.

Producer: [00:25:58] It’s time to beat the bank CD rates.

Ford Stokes: [00:26:01] Number one is we want to consider a multiyear guaranteed annuity, which would be a MYGA. And we’ve got a three year MYGA that’s paying three point one five percent. We’ve got a two year MYGA that’s paying two point four percent, and we have a one year MYGA that’s paying two point one five percent compared to basically at MYGA thing is offering a point six percent, two point six of one percent interest a year on a one year Bankside and that’s way below inflation. You’re going to lose buying power. It’s a melting ice cube situation, but also one of the ways to beat bank CDs is hold back the money you’re going to need for the next year and then invest the rest of it into a fixed index annuity where you’ve got to defer your money for a year and then you can start taking up to five plus percent penalty free withdrawals and it goes up point one or point two percent a year. And the percentage payouts. And also, they can get you. Interest rates between five and nine point eighty four percent, and if you want to learn how you could get an annuity that based on recent history, has generated that type of interest growth for our clients, I would encourage you to just go ahead and pick the phone up and call us at (770) 685-1777.

Ford Stokes: [00:27:34] Or visit ActiveWealth.com and click. That set an appointment, but in the upper right corner, here’s a couple of numbers for you. The total U.S. population is right around three hundred thirty one million, according to the census. Obviously, we’ve got also illegal folks who live here beyond that number, the workforce right around one hundred and fifty million people and the full time workers are one hundred and twenty six million folks. We’ll have one hundred twenty six million people who are working full time to paying taxes and trying to pay down all this debt and pay for Social Security and pay for Medicare, because that’s who’s paying for the folks who need Medicare and paying for the baby boomers. We’re at twenty eight point five five four trillion dollars of US national debt. We’re truly a debtor nation. If you go to us, Decalogue, don’t just take my word for it. Check out US debt clock, dawg, and it will show you the problems that we have. And let me just ask you, do you think taxes are going to go up in the future? Well, if you listen to the Biden administration, they’re going to go up in the very near future. Not a fan of the Biden administration. I am a fan of our former president and I also am a fan of conservative fiscal management of our tax dollars.

Ford Stokes: [00:28:52] And we’re not getting any of that right now. And I just think is a huge opportunity to reduce the tax risk in your portfolio. And as a fiduciary, it’s my responsibility to help you reduce all risk, whether it’s market risk or reinvestment risk or tax risk, et cetera. And we’ve got to do everything we can to reduce tax risk and also market risk in your portfolio. And there’s two types of tax free investments out there. There’s life insurance and Roth IRAs. And I would encourage you to consider implementing a raw Vlada conversion to save six figures on your retirement. We’ve talked about several of my clients. We don’t name names here, but I’ve got one client. We have his name is Chris, and he’s got about one point one million dollars. And he’s single. He’s got one child. He’s divorced, actually. He’s got one one one million almost always in, it’s for OK, he’s got he’s been working with the same company for 40 years and he’s six years old and he’s going to retire at the end of this year. But he’s going to take basically. One hundred thousand dollars a year. And convert his Roth conversion over the next 12 years, going to do everything you can to convert as much as you can, but because his money is growing at a significant clip, it’s tough for him to eat into all the principle.

Ford Stokes: [00:30:26] But he will at least place, you know, one point two million dollars into his into his Roth anyway. At one point, one million is in his for OK right now. But if you’re talking growth over the next 10 years and the average is around close to 10 percent, you’re looking at one hundred and twenty or a hundred and twelve or one hundred and ten grand a year in growth. And so he’s not he’s not able to convert as much, but he is able to at least implement a Roth conversion where he’s got money that can go to his child. But he’s going to end up saving $487,000 over his 35 year retirement, 6 years old, and say we’re having him live at least the age ninety five. And that’s a remarkable tax savings. But also his child is going to inherit a Roth IRA where the IRS is not a partner in that account. And he’s still going to have an IRA that’s going to have that kind of money in it. But at least he’s converted a lot of it. It would be easier if he was married. We’ve talked about that and he’s kind of set in his ways.

Ford Stokes: [00:31:35] He likes to hunt and fish and all that stuff. But married filing jointly, he could be moving two hundred two hundred fifty thousand over because the married filing jointly tax bracket at twenty four percent bracket ends at three. Twenty eight. Nine hundred. Right. So I would encourage you to consider a Roth ladder conversion as a means of getting more tax efficient and to try to kick the IRS out of being your partner in retirement. The other is the other only time a truly tax free investment is life insurance. I’ve got a client who works for a major manufacturer here in Atlanta, and he’s putting in he’s doing a temp. He’s putting in two thousand dollars a month for ten years. Well, after he does that, he’s 55. When he retires at age sixty five, he’s going to be able to take out, according the illustration, twenty five thousand six hundred two dollars based on previous performance of the indexes that he’s tied to because he’s invested in index universal life policy. And the income he’s generating are loans against the policy later that are tax free because there’s no taxes on loans, no income taxes on loans. And it is completely legal and it’s part of the IRS code. Seventy seven or two, it’s called a rule seven. Seventy seven to plan. And if you want an example of how you can generate tax free retirement income that you can never outlive, all you got to do is just visit ActiveWealth.com and click that set an appointment button in the upper right corner.

Ford Stokes: [00:33:10] That’s ActiveWealth.com. And we’re happy to help you. You can also send an email to Ford, I would really like to get a tax free income plan, if I could, tax free retirement income plan if I could. All you got to do is just send me an email to Ford@ActiveWealth.com. It’s Ford, like the truck, @ActiveWealth.com. And this has kind of been that smart tax part of it. We want to make sure we. Convert over time using a Rothblatt or conversion a little bit each year so we can stay at that twenty four percent. Tax bracket, also, one of the hints that I’m going to give you right now is. You want to use your taxable account, let’s say you’ve got an investment account of a couple hundred grand or one hundred grand and you’re converting money from your IRA into your Roth IRA. Why don’t you use them the taxable investment money that’s in your investment or your brokerage account? And use that money to liquidate that money. Withdraw that money and use that money to pay the taxes on the conversion so that one hundred percent of your money that moves from your IRA into your Roth IRA is from tax deferred to completely tax free dollars.

Ford Stokes: [00:34:24] And all you have to do is wait five years from the time you open the Roth IRA account to access the principal and the gains. Absolutely tax free or you’ve got to wait five years on any Roth conversion. And when people fill out a Roth conversion form, for me, they classify that one hundred or two hundred grand or one hundred fifty thousand. They’re moving. With our custodian, TD Ameritrade, and there’s a five year clock put on each one of those conversions, but once that’s done, you can access that money tax free. The IRS is no longer part of retirement. And you’re also there’s no R&D. When we come back, we’re going to play two important chapters from my book, Annuity three sixty one point Chapter 16, reducing risk in your portfolio with annuities. And we’re also going to let you know that you can’t actually buy an annuity with your Roth IRA account with Chapter 17 for my new book, Annuity three Sixty. Come right back and we’re going to talk about how you can reduce risk with fixed index annuities within your portfolio. And then also, we’re going to talk about how you can actually reduce tax risk by buying an annuity and still implementing a Roth IRA conversion within that annuity.

Ford Stokes: [00:35:36] Believe it or not, you really can do it. Does the ActiveWealth.com show right here on AM nine 20. The answer? And. Biden on today’s show, we’ve been talking about how to build a smart financial plan that includes smart, safe, smart risk and smart tax strategies, and if you want to know how you can get your free financial plan, your free, smart financial plan from us here at ActiveWealth.com and all you’ve got to do is visit ActiveWealth.com and click that set an appointment. But in the upper right corner, that’s ActiveWealth.com. And we’re going to play two chapters here from our new book, A.C. 360. And you can visit Annuity 360 Dot Net to get my free book. But Chapter 16 talks about how you can reduce risk in your portfolio with annuities. And Chapter 17 talks about how you can implement a Roth later conversion within an annuity or how you can buy a fixed next annuity with Roth IRA dollars. More and more annuity companies are accommodating this. So I would encourage you to consider investing just a portion of your portfolio into a fixed indexed annuity just to replace the bonds in your portfolio, delayed part of the advisory fees you’re paying and get greater growth and greater protection on your money. So let’s go ahead and play those two chapters, Sam. And we come back, we’re going to have a final countdown.

Producer: [00:37:23] Chapter 16, reduce risk in your portfolio with annuities. Big idea. An annuity can protect against several risks that can affect retirees and pre-retirees and offer a better financial safety net than other investment types. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre-retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned well. We believe that annuities can be the answer to risks in your portfolio. Longevity risk. Retirees and retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four percent rule. But annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement. An annuity can help create an income you can never outlive. Your money will last for your entire retirement by utilizing monthly, quarterly or yearly distributions from your annuity account. After your money grows during the accumulation phase, market risk fixed indexed annuities can protect you from market risk. These annuities are not actually invested in the market. They’re only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks. Should your index perform poorly, you will either make money or remain flat. You will never lose any money.

Producer: [00:38:58] Zero is your hero. Inflation risk annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout. Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk. It is important to have an annuity with a payout linked to the Consumer Price Index, or CPI, instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk an annuity. The increases at a flat rate each year does not offer sufficient protection against inflation sequence of return risk. An annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by Retire one has shown that you can flip fifteen years of returns from retiring during a recession to retiring during a market that is up and completely change your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return. Consider a smart, safe plan with a smart, safe plan. Your money is invested not in the market. The characteristics of investing, not in the market, include growth with safety market upside limited to no downside principal and gains protection. Low cost zero to one percent annual fee time horizon of seven to 14 years can earn five to seven percent annually. Options are available for guaranteed income. Here’s some examples of not in the market investing bank CDs.

Producer: [00:40:33] The annual percentage yield API is about one to two percent. Your time horizon is typically one to three years and you cannot access the funds until the contract is up. Treasuries, the API is about three percent. Your time horizon is ten years and you cannot access the funds until the ten years is up. Fixed annuities, the annual percentage yield is between three and four percent. Your time horizon is typically four to seven years. You are able to access the funds during the contract period multi-year. Guaranteed annuities or MYGAs, you get between two and four percent growth on your principal, depending on the duration of your policy. This is less growth than a fixed indexed annuity, but it is guaranteed the annuity company is required to pay you the rate they promised for the duration of your policy. Fixed indexed annuities, you receive between five and seven percent growth on your principal. The time horizon is seven to 14 years and you do have access to the funds in your account if you need them. A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed index annuity over other not in the market options. If you invest in treasuries or CDs, you will lose ground in your investment due to inflation.

Producer: [00:41:59] Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation of annuities because they minimize your risk in several areas and they lock in your gains for the use of point to point protection periods, meaning you won’t lose money. Chapter 17, you can buy an annuity with your Roth IRA account, big idea. Many people don’t know this, but there are at least five annuity carriers who allow you to invest your Roth IRA account into a fixed indexed annuity. And many others are beginning to follow suit. A Roth IRA is an individual retirement account IRA under United States law that is generally not taxed upon distribution, provided certain conditions are met. The principal difference between Roth IRAs and most other tax advantage retirement plans like IRAs, four one KS for three B’s, 450 CEPA, etc. is that contributions into the Roth IRA are invested with after tax dollars and qualify withdrawals from the Roth IRA plan are tax free and growth within the account is also tax free. The Roth IRA was introduced as part of the Taxpayer Relief Act of 1997 and is named for Senator William Roth, who introduced and sponsored the legislation. This may surprise you, but you can actually invest your Roth IRA account into a fixed indexed annuity as of the printing of this book. There are five annuity carriers that will eagerly accept a full Roth IRA conversion from your IRA.

Producer: [00:43:30] There are only three annuity carriers that can handle partial conversions, but more carriers are adjusting their business operations and illustration software to accommodate Roth IRA investments into their annuity products. The largest annuity care in the United States allows for Roth IRA investment into their annuities. They allow Roth IRAs in all of their current fixed indexed annuities, full and partial, with some parameters, including number one. Roth conversions will create new policy numbers so they will show in separate accounts. But this does not change any product feature or the surrender schedule. With the annuity product number two, conversions must be at least some product minimum premium between 10000 and 20000 each. Therefore, you cannot implement a Roth conversion that is less than 10 to 20 thousand dollars depending on the annuity product. The title of my next book is Taxes are on Sale. I will cover all the aspects of Roth IRAs, Roth IRA conversions and why now may be the best time to kick the IRS out of your retirement account with a Roth IRA conversion. I believe that taxes will likely increase in the future. So strategic Roth latter conversion will help reduce your future tax risk and save you six figures in taxes paid during your 30 plus year retirement. Please do not let your current Roth IRA account or your desire to convert your IRA to a Roth IRA impede you from investing into a fixed indexed annuity

Ford Stokes: [00:45:01] And now have the final countdown. It’s the first. Down, down. So let’s recap what you may have missed. It’s the final

Ford Stokes: [00:45:11] Countdown. Well, I look forward to the final countdown and we talk about building a smart financial plan with smart, safe strategies, with a bond replacement by replacing our bonds within our portfolio and investing in a one hundred percent financial reserve product in a fixed index annuity. And we’ve got some fixed notes that are paying between five and nine point eighty four percent. And if you want to know how to get a potential nine point eight four percent growth on your money, average annual rate of return on your money, all you’ve got to do is reach out to us at ActiveWealth.com. Click that set an appointment, but in the upper right corner and we’re happy to get scheduled with you. And then also, you can call our office at (770) 685-1777. We also talked about smart risk strategies with tactical asset allocation and not just hanging in there with our investments and rebalancing every month and not riding the lowest, the lows. We talked about what happened in 2008 and 2009, difference between in the market, passive investors and in the market tactical investors and which one did better.

Ford Stokes: [00:46:18] And here is in the market, tactical investors did much better. And then we’re also talking about smart tax strategies with Roth IRA conversions investing in a Roth IRAs, contribute to a Roth IRAs and also potentially investing into an index universal life policy. And that would allow for tax free retirement income or also for college planning. And we also talked about how to beat bank CDs on this week’s show. And we play three chapters of my new book, Annuity 360, and you can get a free copy of that at Annuity 360 Dot Net. We look forward to talk to you more next week about tax smart investing activators. We hope you all have a great week. Remember, if you’re going to be a bear, be a grizzly about your retirement future. Be aggressive about managing your portfolio. Be aggressive about inspecting what you expect because it is your money. It is your hard earned wealth. It is also your hard save wealth. And we want to work hard to protect and grow your hard earned and hard to save wealth. And we hope you all have a great week.

Producer: [00:47:30] Thanks for listening to the ActiveWealth.com. 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 ActiveWealth.com Investment Advisory Services Offer through Brookstone Capital Management LLC.Com, a registered investment advisor. Bcm, an act of wealth management, are independent of each other. Insurance products and services do not offer to speak of it, are offered and sold through individually licensed and appointed agents. Investments involve risk and unless otherwise stated, are not guaranteed past performance going to be used as an indicator to determine future results.

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