PP 7-8-22 FULL SHOW.mp3: Audio automatically transcribed by Sonix

PP 7-8-22 FULL SHOW.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, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Prosperity Principles with your host, Ed Cruz. Each week, Ed and his company seek to educate Americans like you by providing real strategies for protecting and growing their hard earned money. Get set for a full hour of financial information and economic news affecting your bottom line. Ed wants you to reach the financial freedom you've worked so hard for. So now let's start the show. Here's Ed Crews.

Ed Cruz:
Well, thank you for joining me this week. I'm Ed when Cruz, host of the Prosperity Principles radio show. I specialize in asset and retirement protection, providing our clients with safe money solutions here in central Florida for over 24 years. And with me is my co-host, Matt McClure. Matt, how are you doing?

Producer:
Great. Ed, how are you doing?

Ed Cruz:
Wonderful.

Producer:
It's a great weekend to be in in sunny Florida. And, you know, I mean, we've had the heat and humidity working against us over the last several weeks. I know. But hey, Floridians are used to it this time of the year.

Ed Cruz:
Well, you know, you can say we're used to it, but it's not something that we look forward to for for the next two months of the year.

Producer:
That's very true.

Ed Cruz:
So for as much as we're used to it, it's just not something that we that we want to endure.

Producer:
Let's say. That's right. Right. And we're we're all feeling the heat outside. We've been feeling the heat from inflation. And and this, you know, stock markets being very volatile as well. So we're feeling the heat and a lot of ways we'll talk a lot about sort of all of that volatility and you know, more about inflation and stuff as the show goes along. Of course, it is Prosperity Principles, the name of the show. Let's connect folks with our website first here. As we start off, my prosperity team, that is my prosperity team, dotcom and the phone number, if you'd like to give us a call. 3862285769. Of course, you can subscribe to the show as a podcast wherever you listen to podcasts. Leave us a rating there. Really appreciate that as well. Always have some great, great feedback. But you know, as I as I said, Ed, the markets have been really volatile here lately this particular week. No real exception to that as people are really watching inflation, gas prices still really high. They've come down some, but they're still really historically high. What are things that that maybe some of your clients have been been really concerned about over this past week?

Ed Cruz:
Well, I'll tell you in the news, the most recent thing that I that I saw here was the inverted yield curve. And a lot of people don't really understand what that means. But, you know, when we when we start hearing these these certain key indicators in our in our markets and our economy, we have to start thinking that these are all signals of a possible recession that's on the on the horizon here. And for those that don't understand, it just simply means that current interest rates or shorter term interest rates are looking far more positive than the than the long term interest rates. So that's never a good sign. And, you know, another thing that's been a big question to a lot of my clients, the pension troubles that they keep hearing of on the news. And if we just think back just a decade ago, we could think of certain companies that that had to restructure their finances. And I have clients that have had reductions in their pensions. So when people think of pensions, they think that it's guaranteed. It's never going to change. It's there. And, you know, I've seen up to already up to 35% in pension reductions from some of my clients and others that are worried because their company has had to have cash infusion. And of course, when we when again, when we talk about this yield curve, that's going to have a strong effect on pensions long term. So these are these are current events that are going on. And they do really mean a lot for anyone that is at or near retirement. This this could be a troubling sign if you are a someone that depends on your pension to be one of those three legs of income.

Producer:
Yeah, absolutely. And that's, you know, one of the things that we always, you know, sort of think about right now is just the sheer number of people who are at or near retirement age, because the baby boomer generation is this huge generation of people who are now reaching that age and have been for a little while, but are really kind of right in the middle of that generation right now as far as those who are retiring. So this is really stuff that is affecting a lot, a lot of people out there. And I know that you hear about it every day and talk to folks about it every day.

Ed Cruz:
It's just one part of our natural conversations that come up. And what I would say to people is if you want to know more about protecting that and getting that guaranteed income, there's a book that I will be offering and that is the annuity 360 Learn All You Need to Know About Annuities. That book will will definitely help you in the protection of your of your income stream and the guaranteed side of your income stream. So it would be smart to to call 3862285769 to get a copy of this book, The Annuity 360. Learn All You Need to Know About Annuities.

Producer:
Yeah, absolutely. And we're going to actually hear a little snippet of that book coming up a little bit later on in the show as a as a bit of a teaser for folks there and here, just at least a little bit of all the great information that is in that book about annuities. Again, that title of the book is Annuity 360. It's by Ford Stokes and who's just a great guy and very, very knowledgeable about those. And that's absolutely free of charge. Now, we always like to share kind of toward the start of the show and of course, a financial wisdom quote of the week. And this week it comes from Jim Rohn. And it's an ad, one that I love, actually. It says, Formal education will make you a living self. Education will make you a fortune. So formal education will make you a living. And it's very, very important to get a formal education, obviously. But self education will make you a fortune. And I know that we are always encouraging people to learn more and more and more about their finances.

Ed Cruz:
You know, just because you went to a four year, six years, eight years of college, does that really mean you're done learning for for your lifetime? I always say that's just the beginning. Life will continue to teach you lessons and it's what you take away from those that are going to make you successful or not. And it truly is. The decisions you make or you don't make will lead to your success or your demise. Right. And following up on that quote from Jim Rohn, there is a there's a gentleman out there. His name is Darren Hardy. I don't know if you've ever heard of him or not, but he is basically a follower of Jim Rohn. And I listen to him every morning. He does about 5 to 6 minute snippets every morning. And it's a good way to jumpstart your day. And for anyone out there, if you're looking for some positive mentorship, you might want to listen to Darren Daily. Just describe listen to him. I think you'll find it quite fascinating, and especially if you're a small business owner, the tips you'll get to to become more successful, keep a journal or write it down. There's a lot of ideas. You're never going to do everything that he says. We're all individuals, but there's always going to be takeaways to make you more successful. And again, it's always nice to have some type of positive information going into your brain first thing and not all the negatives that we see as soon as we jump on the TV or or get on the computer.

Producer:
Yeah, that's right. It's it's definitely a good thing to have some good positive news or or some good positivity in any shape, form or fashion to start your day. It's a great way to do it there. And, you know, we're talking about that, that quote from Jim Rohn and the importance of education. There are a few things that we kind of wanted to highlight this week about just some simple things that you can do that are that, you know, that you can learn to to help improve your finances and fix. You know, we did that quote last week and our quote of the week was from Benjamin Franklin about small leaks sinking a great ship, you know, and paying attention to the small things because they really do add up and this kind of falls in line with that as well. Go let's go through these and we can maybe chat about each one of them as we go through this list here at Yeah.

Ed Cruz:
You know, when we think about things to consider to make our retirement better, the best thing that we can always do is keep our expenses down, right? If you if you can just chunk it down and get rid of that mortgage and be mortgage free before you reach retirement, what better way is there to to live in retirement than than to not have that number one expense? It's your it's your biggest asset, they say. But it could also be your your biggest issue that you have in retirement. So that's definitely one of the biggest things that I think about when going into retirement. You definitely don't want to have a mortgage. And obviously, you know, credit cards would follow that. Credit cards can can definitely sink. Shipp Those are two big things that I say credit card debt and having a mortgage. You definitely want to get rid of those.

Producer:
Yeah. And, you know, and even just the little things to that that can add up. I mean, I know one thing that I have been really guilty of has been all of these subscriptions and streaming services and all that. It's like everybody's got a streaming service these days and I am probably subscribed to all of them at this point, so. Well, maybe not all, but most. And and they really do add up. And the thing with those is, you know, you sign up for them, right? And they go on auto pay automatically. They come out of you're speaking of a credit card, they come off of your credit card or out of your bank account once a month and then out of sight, out of mind. You forget about it. And and, you know, pretty soon you're like, wait a minute, where all my money go? It's only 7.99 here, 899 there each month. But all of those those costs add up and you could be spending a couple of hundred bucks a month on streaming services alone.

Ed Cruz:
That's right. I mean, just I'm a big baseball fan. Anyone that knows me knows that. And I'd love to be subscribe to the MLB network on my phone. That's $25 a month. And I say, what can I do with that $25 a month? So, you know, I choose not to do that. I choose to stay away from all those subscriptions. Do I have one or two? Absolutely. But definitely that could be a way where you could be spending 50, 75, $100 a month. And when you wake up and notice that you'll start making changes and those things add up. And, you know, if we if we keep going down the list and we're being we have a financial show here, we start thinking of ETFs, mutual funds. And I'm a big believer in indexes. So I, I'm one to to instead of instead of buying a bunch of mutual funds, I do buy more of the ETFs. And I would say just because that's more in my wheelhouse. But when you compare the two and you're and you're conscious of it, you start looking at cost. You look at ETFs, they could have from 0.05% of of cost to to let's say, under half percent. Whereas mutual funds, if you look at all the all the cost inside and as they're constantly churning those, if they're not in a qualified account, it's costing you more and more. You could be talking anywhere from half percent to one and one half, 2% in fees in your mutual fund. So just because you don't see it coming out of your out of a subscription into your credit card, you know, these other costs that are involved in in in finances, that could be a way of dragging down your your portfolio, which in turn is going to have a devastating effect on your retirement plan.

Producer:
Yeah, it's those things that, you know, almost like with the subscription things out of sight, out of mind, you don't if you don't really see it, you don't necessarily really feel it as it's happening. But then you say all of a sudden, okay, well, this has snowballed. This has added up over the months and years. And so it really can make a big difference.

Ed Cruz:
Yeah. And sticking to that theme, you know, again, Bonds, we hear about how they've underperformed for not just a decade, probably every bit of two decades, getting a half percent to a 2% return. Obviously, that's not doing your retirement plan any favors. But but replacing your bonds with fixed indexed annuities have been shown to be far more effective for a for a plan that you plan on having four or five, ten, 15, 20 years. The compound effect, the long term effect of having such a such a plan. That is when you get away from the the fees that the bonds are going to cost you and you get into the fixed indexed annuities, which, again, they may have some of them do have fees. Let me not mislead you in that way. But your your fire is going to have the performance to to support that 1% fee, let's say, for example, whereas if you have a bond that's giving you a 2% yield annually and your money manager is hitting you for, let's say, 1% in fees, well, I think it makes all the sense in the world that you need to make a change somewhere in that planning.

Producer:
Yeah, absolutely. That's one of the things that, you know, we often talk about here, fixed indexed annuities as a way of potentially eliminating a bunch of those fees and the advantage, of course, of fixed indexed annuity in addition to that. Is that you've got that guaranteed income stream later on in retirement that you cannot outlive, and you also have gains that are based on market gains, but you are protected from losses in fire. So that is another positive thing that some people, if it's right for you, you could experience there.

Ed Cruz:
You know, a lot of people do this in order to they'll self manage in order to save. Let's say for example, if you don't have that broker and and you're just following a plan, you might be costing yourself money instead of trying to make yourself money in the long run. If you don't set up your plan properly just because you're trying to save on fees, you could be you could be hurting yourself for, you know, 20, 30, 50,000 in the long run. And again, that's going to have a devastating effect on your income when you retire.

Producer:
Yeah, that's thing like I am no expert at, at managing all of my, you know, nickels and dimes and and hopefully $100 bills and on up. But, you know, no matter my age, you know, I'm in my I'm in my forties right now, but I will be in my sixties, God willing, one day seventies, eighties, nineties and hundreds, I would hope. And at no time I don't think do I feel comfortable at managing my own expenses. So I think there does come a time if even if people are good at it, at managing their own expenses, I think there does come a time when when it's may get too complicated for for folks. But I think for me personally, I need help right now.

Ed Cruz:
You know, I have clients that are doctors, lawyers, CPAs, and even though they have all their spreadsheets in the world, they just don't have the time to manage their finances. So, you know, they they they have the the ability to handle these issues, but they don't have the time to handle these issues. You know, and if you're one of those and you're not doing a good job at handling your finances because you're just too busy doing your your everyday life things, that's what we're here to do. We're here to help you manage those finances at the lowest possible fee structure that's available in the marketplace. I feel and and we're here to give you safety guarantees, retirement income. And so, you know, the other thing that we want to make sure and do, and this has just recently happened to one of my families that I that I work with and that's have a plan in place. So when you pass away that it's that it's easy to to manage, you know, when you self manage your finances, there are some things that your family have no clue about. And, and if you're self managing, you don't have this written out. If you don't have a will and place a trust in place to, to, to organize these things and have someone there to help guide your beneficiaries, you know, that's not going to be helpful to your family if they have to sit there and and go through probate. These these are not things this is not the way you want to plan your your your your financial outcome at the end. So, you know, these are all things that that are that are important to to the beneficiaries. Every time I speak to one, you know, they'll ask me, do you know everything that they had? Did you keep a good list of that? Because they didn't tell me anything. So we want to make sure that we can make it as easy for you. And we want to make sure that we can make it as easy for your beneficiaries when you're gone.

Producer:
Yeah, and that is the goal. And of course, that is we just about up on our first break here. But of course, one of the things that we always like to do is offer up your services for a free full retirement plan consultation. And this is something that has no cost, no obligation to our listeners and exclusively to our listeners of prosperity principles here. And you can go to my prosperity team to schedule that free consultation, and you can also call the number 3862285769. And I know, Ed, you would encourage our listeners to do that.

Ed Cruz:
Absolutely. Because, you know, when we speak about finances, you know, there are some complex issues out there. And I just mentioned one, do you have a will or a trust? You may or may not, but if you need that person, I can help guide you that way. You know, are you over or underinsured when it comes to life insurance? We can evaluate that and help you that way. And if you haven't heard the changes of law that have occurred with inherited IRAs. That's a little a little bit more complex and less companies are offering that service today. So we want to make sure that if there's if there's some changes that go on in Congress, in our laws, in the IRS, we want to make sure that we can relay those to you so that you can properly plan. So when that time comes, you won't have to worry about having a headache. And and of course, we handle anything like direct transfers, custodial transfers, 1035 exchanges. And again, the the inherited part, which is the more complex one. So if you need any of those services, that's what we're here to help you with.

Producer:
Yeah. And we, of course, will direct our listeners to my prosperity team once again. And that phone number 3862285769. We're going to talk more about planning for retirement and how you can do it in a safe and secure way. Coming up right after we hear this and hear a little bit more about the best places to retire at one, I think the number one actually on the list is somewhere that is very familiar with and all of our listeners are as well. So we'll we'll hear that and we'll come back and talk about it. On the other side, you're listening to Prosperity Principles. Stay with us.

Producer:
My name must be funny. If you're listening to Prosperity Principles, visit my prosperity team dot com.

Producer:
Where's the best place to hang your hat when you retire? I'm Matt McClure with a retirement radio network powered by a merry life. Whether retirement is just around the corner or several years away, time is ticking on planning not only your finances for your later years, but where you want to live out your post-retirement life. Personal Finance Website Wallethub recently released its list of best states to retire in 2022.

Jill Gonzalez:
Florida, unsurprisingly ranked number one, followed by Virginia, Colorado, Delaware and Minnesota, while.

Producer:
At job analyst Jill Gonzales.

Jill Gonzalez:
The top ten continues with North Dakota, Montana, Utah, Arizona and New Hampshire.

Producer:
So what makes a state one of the best to retire in?

Jill Gonzalez:
The study was based on 47 metrics, including tax friendliness, the elderly, population, golf courses per capita and shoreline mileage.

Producer:
As for Florida, which landed the top spot this year.

Jill Gonzalez:
Florida excelled in tax friendliness, fellow retirees and things to do, but could use improvement with home health aides per capita, even.

Producer:
Though the Sunshine State is number one overall, if finances are your primary concern, you might want to consider a move to Mississippi. It ranked as the state with the lowest overall cost of living. As for tax friendliness, Alaska jumps to the top of the list. But what if you want some culture in your retirement years, New York ranks as the number one state when it comes to the number of museums per capita. The tradeoff there is naturally the Empire State is one of the most expensive in the country. So where do you want to spend most of your time in retirement and what factors are most important to you when considering a potential move? Those are key questions to consider as you plan for the future with the Retirement Radio Network powered by O'Mara Life, I'm Matt McClure. 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. Welcome back. This is Prosperity Principles. I'm Matt McClure here alongside the host of Prosperity Principles, Ed Crews. Of course, you know, we just heard there and I don't know if you were surprised. I was not surprised to learn that Florida is listed by Wallethub as the number one state to retire. It makes sense because so many people do that. And and, you know, it's traditionally been known as that number one state to retire.

Ed Cruz:
I still am quite surprised. And I'll tell you why. Know Florida, when I think back 20, 30 years ago, you know, I think about the affordability, you know, not just the weather. And when we look at Florida today, it's it's become quite expensive to live here. You know, housing has, I would say, over the past 20 years has easily gone up 100%. And just all of the everyday things that you do out here and with inflation today, it's just become quite expensive. So I am surprised that we are number one.

Producer:
It's must be if it's if it's that kind of situation in Florida, I guess maybe that just means it's worse everywhere else so that relatively things have moved around kind of the same, you know, if that makes sense.

Ed Cruz:
Well, you know, the issue here is that we have so many people moving to Florida that it's created certain shortages of materials in our own state. And I don't think that's happening everywhere else. You know, I go let's say I cross the border and jump into Georgia, a house that I could get there for, 250,000. Over here, it's going to be 400 to 450. So there's definitely quite the shift that has gone on.

Producer:
Yeah, yeah, definitely so. And as you know, I live in Georgia and I can attest the housing prices are have gone up here, but maybe not quite that much as as you're talking about in Florida. And, you know, no matter where people are looking to retire to Florida, if they're looking to retire to Georgia or any any of the other states that were on that list, I know Alaska was one of the states on the list as well. The thing that's happening right now that's having the biggest impact on a lot of retirees is, at least according to this survey, inflation. You know, about a quarter of Americans actually delaying retirement because of inflation. This is from a survey from Bank of Montreal. Fox Business had this article about it, and I thought it was really interesting that that it's really impacting a lot of people.

Ed Cruz:
You know, it is. And I can think back to 2007 when we had the again, the housing crisis and obviously working with with clients day in, day out. You know, I would tell people, you know, it's we're getting to that point where we're we're going to see that recession or at the beginning of recession. And I kept telling people to, you know, it's time to make an adjustment here because it's going to affect the way you retire. And today you can couple the market along with inflation and you can see why people are delaying their their retirement. In fact, I just met with someone that that just told me they're are more than likely going to have to work another year or two to get past this the unknowns and and then make a decision later on. So wanted to retire at 62. Now they're looking more at 6465. And of course, inflation is just not what we're purchasing out there. The goodies are wants, but health care cost health care cost is a huge unknown for for someone that's just about to retire, especially when they have to have a gap plan pre Medicare. And so it's taken a toll on on all of us. Right. About 60% of people, even if they're not retiring, are saying that this is having an adverse effect. And you can see that I just went to the movie theaters this past weekend, and, you know, it was it was half empty when we first came out of the of the pandemic. The movie theaters were full. And all of a sudden they see that the seats are only half taken. Obviously, that says a lot.

Ed Cruz:
And in this study, it also showed that 36% of respondents said that their savings had been reduced because of rising costs. 21% specifically lowered their retirement savings. So, again, this is going to have a long term impact on retirees. You know, younger, younger families are also feeling this impact with more than 60% of those 18 to 34, again, reducing their savings contributions. So it's not just what goes into your retirement plan, but what do you have for emergency money that's being reduced as well. And so all this leads to, you know, to to the issues that we've seen before, where if you're not saving as much, if you're if your wages are. Rising fast enough. Well, what's going to happen? You're going to see credit card debt go up. We may see foreclosures on the rise again. It just leads to to a slew of issues. And then and then when we hear just recently we had a conversation about Social Security. And now because of the pandemic, those numbers have just been revised. And instead of being 2036, where they're saying Social Security must face a mandatory change that's been cut by two years, now we're talking 2034. And the more I think about it, this is more in my wheelhouse of when I'm supposed to retire. So this is this is going to have an effect on me, although I don't plan on hanging it up for quite some time. But but I start thinking about these things. You know, it's we're talking just 12 years away from now. We're in 2022, we're talking 2034. And we all know how fast a decade goes by.

Producer:
Yes, we do. And they go by faster and faster as time goes on here. And yeah, I mean, you know, that as a result is what they're saying. And as you said of this lost tax revenue during the during the pandemic. Right. Especially during 2020, unemployment way up, we had fewer people paying those payroll taxes that that that fund things like Social Security and Medicare and all of those. And so that's why there was that lack of funding in that year. And that's why they say that there's going to have to be a change before 2034 to in some way to Social Security, make sure it's solvent, make sure that that the program can can continue in some semblance of the direction that it has been over the past several decades.

Ed Cruz:
You know, when prices go up faster than any period since 1980, something's something's got to give, right? We go to the grocery store and we see these these large increases dining out. I mean, my goodness, you go out. And I remember I used to take my family of four out for a dinner and it would it would be about $80. And for my wife and I now easily spending that and sometimes and then some more. I took a trip to Tennessee and noticed how much more it took me to to to fill up my vehicle. Again, it's just the the the inflation is really hurting the everyday family right now.

Producer:
It really, really is. And it's hurting retirees as well. As we've been saying, there was another article, this one from CNBC. They had a financial advisor summit here recently. And inflation risk, they say, is the most acute for retirees and near retirees who live on fixed incomes. So if you're talking about people who have substantial, substantial wealth, obviously it will be affecting them. But they won't necessarily feel that as much as the people who are living on a fixed income to begin with. Right. So that is going to be an even larger effect on people who are living maybe paycheck to paycheck and people who might be trying to make it in retirement, relying mainly on Social Security. So looking forward for people who are at pre-retirement age, it's really, really important to plan ahead, especially if you fall into that fixed income category.

Ed Cruz:
Yeah, that's right. And, you know, retirees, when speaking of them and again speaking to them on a daily basis, I just I just sat down with a couple. They told me just just a year ago how, you know, their Social Security's and their their two smaller pensions were more than enough to cover their expenses. They were out enjoying activities with their community. And, you know, this this inflation has hurt them so bad, they're actually talking about possibly pulling a small mortgage. Imagine that. Pulling a small mortgage just to just to make it through these times. And so, you know, these are the stories that, you know, that most of of our wealthy population well, they won't have to deal with it. But, you know, for for the other 95% of America, we're going to have to deal with making a some tough cuts, some choices that we that we don't want to make. You may have to cut your cable. You may have to cut a lot of things out just to just to make it through these times so that you can make it to the to the other side of the road.

Producer:
Yeah, absolutely. And there are a lot of different options for you to respond to what's going on right now in the markets, in the economy in general. You just have to know what those options are. And of course, we've been offering this free, full retirement plan consultation, absolutely no obligation consultation for you. My Prosperity Team dot com is the website to go to and the phone number once again 386. 2285769. You know, another thing that a lot of people really worry about as they're approaching retirement or health care costs, you know, and a lot of people get confused, I think, when it comes to their options for health care and retirement. One of the things that I think people might want some clarity on. And as a matter of fact, I was just recently well, last month out at the Medicare conference in Las Vegas. And I know from talking to a lot of people that they get questions all the time about what exactly is a medicare supplement plan and what does that do? What sort of gap does that fill, in other words?

Ed Cruz:
Yeah, absolutely. In fact, my uncle, they're they're reaching that age of 65. They're talking retirement. They're talking health care. And this was one of the subjects that we covered was this Medicare supplement plan. And, you know, they thought just because they got Medicare that all of their expenses would be covered. But I told them, well, it will it will cover a large majority, 80%, but it won't cover the the 20% part, which the simple way of looking at it is 80% covers your hospital, 20% coverage, your doctors. But when we think about health care, there's much more to that, right? Because we still have prescription drugs to worry about if if you need some some sort of medication. So when we when we talk about this subject, we talk about the the variety of plans that you can get. There are advantage plans that allow you to keep some of the some of the extra part B payment. We have HMOs that are out there that will allow you to keep that money in your pocket, not have to pay for such a such an expensive Medicare supplement plan, which which it could be. And so we have to look at every possible option that's out there. And and again, should you should you need that type of guidance. We're here to help you through the Medicare supplement or HMO plan. And again, if you need if you need to know more about A, B, C and D as its so called said then, then give us a call and we'll help you with that.

Producer:
Yeah, absolutely. And of course, before we go to our break here in just a moment, we will share the number and the website once again. But, you know, even outside of Medicare expenses, which are a huge part of what we've just been talking about and a lot of people, at least this is according to the Fidelity retiree health care cost estimate. An average retired couple age 65 this year may need about $315,000 saved after tax to cover their health care costs and expenses in retirement. That is a huge chunk of change. I mean, you know, I would imagine there are a lot of people who don't even have that much saved up for retirement period.

Ed Cruz:
That's correct. And that's why you can't leave retirement planning for the last five, ten years of your of your life before you retire, I should say. And so you want to start that that plan so that you can save X amount of dollars and say, I'm going to offset this income with my with my medical cost. And so, again, planning ahead of time, knowing what your guaranteed income bucket is going to look like, it's going to be key to making sure that you can afford such such health care costs and and furthermore, protect your your retirement assets from some of these from some of these tragedies that happen when you retire.

Producer:
Yeah. And, you know, I kind of teed this up a little bit earlier in the show, but we're going to in just a minute, hear a little bit from that book Annuity 360 that that you had discussed a little bit earlier on as we just started the show. And that's the book, folks, that you can get for free. And again, no obligation to you at all. Send it to you for free, courtesy of Edwin Cruz and the good folks at my Prosperity Team dot com is the website here for the show. 3862285769 is the phone number that's area code 3862285769. If you would like a copy of the book, once again, it's Annuity 360. Learn all you need to know about annuities and a very important tool to have kind of at least some knowledge about and in your arsenal as you. Here for the retirement years that are upcoming for us all, as I say, God willing. But right now, what we're going to do, Ed, is play a chapter from the book by Ford Stokes Annuity 360. And this is one that talks about a Roth IRA and the chapter is chapter 17 of the book. You can buy an annuity with your Roth IRA account. Let's listen to that and we'll we'll chat about it here on the other side.

Producer:
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 advantaged retirement plans, like IRAs for one case, for three B's, for 57 Cyprus, etc. is that contributions into the Roth IRA are invested with after tax dollars and qualified 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 easily accept a full Roth IRA conversion from your IRA. 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.

Producer:
The largest annuity carrier 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 the product minimum premium between 10,020 thousand each. Therefore, you cannot implement a Roth conversion that is less than 10 to 20000, 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 a strategic Roth ladder 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.

Producer:
And that was a chapter from the book Annuity 360 by Ford Stokes. You can buy an annuity with a Roth IRA account and very interesting information there that is very, very helpful, I think, to a lot of folks. Just to clear up maybe a little bit about what an annuity is and how it can kind of can relate to your Roth IRA and how you can use a Roth IRA to buy an annuity.

Ed Cruz:
Yeah, absolutely. And. A Roth IRA. People will will ask, why do I really want a Roth IRA? And one good one good question asks everyone out there is do you want the IRS as part of your beneficiary plan? Do you want the government to be involved in every decision that you make in your IRA? This is a good reason to have a Roth IRA. No required minimum distributions. You know, it was until recently you had to start taking out of your IRA at 70 and a half. And a lot of my clients would say, well, I really don't want to take that. Why do I have to take it? And I said, that's the deal you made with the IRS back when you when you invested in an IRA. But had you done the planning prior to reaching the stage, you could have you could have eliminated that. And so when people ask, well, how, again, it comes down to a Roth IRA, you know, it allows you to to take the money when you need it because you've already taken the taxes. So now the IRS or the government is not going to dictate when you take anything out of that plan. Now, I have a lot of families that will say I want to leave that money to my to my grandkids.

Ed Cruz:
Well, that's that's great. A Roth IRA would be far greater to leave behind than a than a traditional IRA. Again, taxes have been paid. Leave it tax free. Why not? Why what? What possible objection could you have to leaving that money tax free to your heirs? It wouldn't make any sense. And in most cases, you will pay less in taxes than your beneficiaries will. Because most of the time those those kids that they're leaving it to or the grandkids, they're at a higher tax bracket. So why not pay less of the government now than pay more later? So and again, we talked about the change of law. You know, nowadays, if you leave behind to your children a traditional IRA. Well, there is a there's a plan that the government has in place now. And it's not the it's not that friendly plan that we used to have where they could take it based on their life expectancy. You know, today it's based on on a ten year plan to where it will cause the beneficiaries of those of those traditional IRAs to pay more in taxes. And do you think for one second that the government didn't plan it that way? There's a reason that they did that. So do yourself a favor and start thinking about Roth conversions. Roth IRAs.

Producer:
Yeah, nobody likes the IRS, so getting them out of the equation is a good thing. And as we say often to, you know, if you're if you're ever going to pay taxes on anything, taxes are on sale right now as opposed to in the future. Right. The taxes are right now, generally speaking, the lowest that they're probably ever going to be, because in the future, the assumption is that taxes are going to be more. So you'll be paying more now or more later rather than in the future. So so if you're ever going to pay taxes on anything, now would be the time to do that, right?

Ed Cruz:
I would definitely agree. Again, going back to the point of the beneficiaries are going to be in a higher tax bracket than you are while you're in a in fixed income. So that that alone tells you that that's going to happen. Then when we think about our current country's debt, we're going to have to we're going to have to make some type of changes somewhere along the line to our tax code, and which means it's going to further affect a retirement plans, be your income and income taxes and who knows where else and how creative our government will get to tax you more in the future.

Producer:
Yeah, right. It seemed to always find some way. Even if they don't call it a tax necessarily, they'll always find some way somehow to do it. And you know, one thing I think as we as we talk about the different types of retirement accounts or retirement vehicles, I guess I could say, do you find that a lot of people might think that retirement is about building this big nest egg and just having this big, you know, lump sum of money rather than about income? What what would you say about that and about the importance of income in retirement?

Ed Cruz:
I would definitely say that people have been conditioned to think that the more money you can make in the stock market, the better off you'll be in retirement. You know, but no one ever. And we've. We've had the discussion of risk in the past. No one ever takes in consideration that that one big nest egg that you have could be cut in half, you know, and that could be happening right now. You know, we see a lot of I just spoke to to a to a gentleman and looked at his plan. And his plan is down about 22%, 22 to 22 and one half percent. And so when we think about that that condition, that people have been been led down the road to believe that you just need to you need to have those seven, eight, 9% returns. And unfortunately, some people think that the market can constantly return them 12 to 15%, which is a big mistake to think that way. But the mistake of of just looking at it one way again could be devastating down the road, because if you're not looking at and you're depending on that income in retirement, then you just can't look at a lump sum. A lump sum means nothing to the conversion of of of of an income. And we think back to the 4% rule that's been that's been in order, as they say, for for for decades, if not a century. And no one ever thinks about, well, am I going to. Am I going to stick to that 4% rule when when my when my half a million dollars drops to 300,000? Am I going to shave my income down? No one ever does that.

Ed Cruz:
You know, they keep taking at the same rate, thinking that everything's going to be just fine. And then what do you get? You get those clients that will call you when they're in their seventies and they say, you know, once upon a time this was growing just fine. And I was receiving this income, this level of income. And but now what I'm noticing is that as I take this income, my retirement account is dwindling. Why is that happening to me? And and I tell him, because you never made an adjustment to to the to the amount of income that you were taking percentage wise. And, you know, people look at money just as a number, but when you start applying percentages to your dollars, it has a totally different meaning. And I think that's important for people to realize that you just can't look at your income versus that pot of money the same when it when it decreases. You have to make adjustments, but most won't. But how can we avoid that issue? You get yourself a fixed indexed annuity or some type of a fixed annuity that will provide you with that guaranteed income. So regardless of what happens to the market, you don't have to worry about your income needing to be adjusted, your income disappearing. Because let me tell you, when that retirement account disappears in the stock market, so does your income. And that's the last thing you want. And we see people running out of money in their eighties, and that's the one promise we can make to you, and that is that you will have a guaranteed income that you'll never have to worry about outliving.

Producer:
And that is has got to be for folks such peace of mind. I think especially in a time like this when you're right, you know, the market has been so volatile here this year so far that you kind of never know. You're almost afraid to look at any of the business channels or the turn on the news and see what the stock market has done or is doing on a particular day. And this sort of takes that worry out of the equation, right? Because you can the market's up. You can reap the gains of those to reap the benefit of those gains, I should say. But if the if the market is down and you're you're not going to be losing that money, that is your initial investment. That initial investment is safe and secure. But when the market goes up because it's indexed to a particular market, then you can reap the benefits of those gains.

Ed Cruz:
You know, we we talk about retirement income gaps, right. And we plan for those things. But we don't think that that that retirement income is subject to change if you don't have it guaranteed. And so when we take a look at what's going on today in the market and we've talked about risk in the past and sometimes we just place too much weight on the odds that the past events will repeat when when unrepeatable chance is probably a better way of explaining it. You know, markets never factor in the risk because they're truly not measurable. How do we know what the market is going to do over the next six months, nine months, five years? We don't know how much trouble the markets are in at any given point. Things just happen. And, of course, we've we've all heard the term of of Blackstone. What events and how can how can you predict when when one of those events are going to happen? And we've we've heard of these events. Right. And when they and when they happen, they usually have a significant effect on your on your market based accounts. Of course, black swan events are events that are rare and unpredictable.

Ed Cruz:
911 If anyone needs a reminder, we saw what happened there, right? You went to bed. Your your money looked great inside of the market. And then, boom, we just got hit by the biggest terrorist event in our country's history, which changed everything. I look at that the the housing market crash as another black swan event. Everyone talks about how how real estate only goes up, never comes down. It's steady. You can you have your income. You know, I know people that overleveraged themselves back in in the early 2000s leading up to this event and pretty much bankrupted themselves and their families. And what a tragic event. So I don't know when the next black swan event is coming. Your broker doesn't know. You don't know. So how can we plan for retirement if half of our investment could be gone in in the blink of an eye, just waking up one morning? So again, there's a better way. And our safe money programs ensure our clients that they won't have to go to sleep at night worrying about this. And and we can promise you that we can continue to grow those those income accounts never suffer any type of market losses.

Producer:
Which is just got to be music to the ears of anybody who is thinking about retirement, thinking about retirement planning as well. Once again, folks, you can also get that free copy of the book, which is called Annuity 360. We heard a snippet from it, one of the chapters from it just a little bit ago. A lot of great information there. And we will send, of course, a free copy of the book to you so you can get all of the great information that's in it. You can go to my prosperity team. That's my prosperity team. Time.com. Com 3862285769 is the phone number if you want to give a call for that as well. And also that free full retirement plan consultation. Now, it is completely obligation free. It is completely free of charge. And Ed's been telling you about the kinds of things that you can discuss and talk about and get some clarity and some security when it comes to your financial future. So just a little bit of time here, left around 30 seconds or so. But any sort of final thoughts for the show today?

Ed Cruz:
You know, I'll share two important points. And number one is avoiding losses are much more important than achieving large gains. Like I said, you can achieve all the gains you want. If you can't secure it, what good is it? And number two, you know, just making a steady average gain is much better than hitting a home run. Right. As a baseball fan, I rather see a high average overweight and for that home run for my team to have success. So I'll leave you with those two points.

Producer:
Yeah, I was going to say, if you're if you're batting 200, but you've got, you know, 50 home runs on a on a season or something like that. Okay. Well, that gets the crowd excited when you finally do hit a home run. But I'd rather have somebody with a with a 350 average who hits singles and doubles all the time. But that, you know. Okay, so enough baseball will we'll leave you with our a couple of baseball analogies there. Well, Ed, it's been great once again to share this weekend with you. Prosperity Principles is the name of the show, of course, folks. My Prosperity Time.com editor. Make it a great weekend. Enjoy yourself and we'll talk again next week.

Ed Cruz:
You take care. Stay healthy.

Producer:
Thanks for listening to Prosperity Principles. You deserve to work with a financial and insurance expert who can offer strategies for protecting and growing your hard earned money to schedule your free no obligation consultation. Visit my Prosperity Team dot com or pick up the phone and call 3862285769. That's 38862285769.

Producer:
It's not affiliated with the United States government. Edwin Cruz does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. A married life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information.

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