10.7.22: Audio automatically transcribed by Sonix

10.7.22: 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 it 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 Cruz.

Ed Cruz:
Well, thank you for joining me this week on Prosperity Principles I'm Edwin Cruz, your retirement and income specialist located right here in central Florida for over 24 years. And we're going to be discussing a number of topics here today. But before we get too far, I just want to reach out to our listeners and and ask them, are you concerned about all the market volatility? And if you are, I believe you should be. Why not have a portion of your returns linked to the market without any sort of risk? So let me pose that out to you. And with that said, I want to welcome in Matt McClure.

Producer:
Hey there, Ed, I hope you've had a great week. And I have, of course, been thinking about everyone there. I know you sort of missed out on the brunt of the storm here a couple of weeks back, but everybody in Florida has been in our thoughts and prayers up north here in Atlanta as well.

Ed Cruz:
We definitely appreciate that. And it's amazing how these events happen and it definitely changes lives for everyone that's down there in the southwest part of Florida. We definitely continue to think about them and it's going to be a long road, but we are resilient. We're going to make it.

Producer:
That's right. Absolutely are. And we've got a lot of great things actually coming up. As you alluded to a moment ago on the show this week here, Ed, we've got our financial Wisdom quote of the week we're going to share in just a moment, which I think it's going to come from a source people aren't expecting. So that'll be something to look forward to in a moment. And also, you know, you mentioned the uncertainty of the markets. The bulk of our show today is going to focus on getting to the guarantees in in life. And there are some guarantees out there with all that uncertainty in the markets and in the economy in general, people are looking for those guarantees and they do exist. So so we're going to run them down and give you some real life examples of how to achieve that. Right.

Ed Cruz:
It's all about getting educated. And, you know, there are just things that we don't know exist out there. And I've heard plenty of times people say it's too good to be true. But when you understand it, you realize why it does exist and how it does work and why it is something that is just not too good to be true. It actually exists. And that's the bottom line. If you haven't heard your retirement specialist or your financial advisor speak about these things, there may be a hidden agenda behind that. And we're here to clarify these issues and to help you have a better retirement in the future.

Producer:
Or they could also have their head buried in the sand, the little ostrich syndrome these days because of all the upheaval in the market, too. That's that's a very human thing that happens quite a bit with with some financial advisors out there. But of course, the website for this particular show is MyProsperityTeam.com. That's my prosperity team dot com. And you can give at a call 386 228 5769 - 386 228 5769. And you can do that for one of a couple of reasons. One would be for that free full financial consultation that that you offer to all the listeners of the show. Absolutely free of any charge in any obligation. So great deal there. Also you can get a free copy of the book Annuity 360 and we're actually going to share some of that book a little bit later on in the show. Ed, But I know that you know that that's a really good resource for people if they want to learn about annuities, which are one of the topics we'll we'll discuss today.

Ed Cruz:
Absolutely. It's it's like I tell my clients it's it's you don't have to have your attorney present there with you. It's an easy to understand and easy to read book. It's not too big. It's not too small. It's just right, as we say. And you'll understand all the benefits of what this type of planning could do for your future and for your retirement.

Producer:
Yeah, it's the it's the Goldilocks book. And if you want a copy of it, absolutely for free, you can do that by calling once again. 386 228 5769. That's 386 228 5769. And of course, you can go to MyProsperityTeam.com folks, and subscribe to the podcast version of the show also. We do have that. We would love for you to subscribe. You can check out past episodes, leave us a rating, send us a message because we absolutely love hearing from the listeners here in Central Florida or hey, wherever you are across the globe, if you are listening to us via podcast.

Producer:
And now for some financial wisdom, it's time for the Quote of the Week.

Producer:
Well, I said it a moment ago here, added that our financial wisdom quote of the week is going to come from potentially an unlikely source for people or an unexpected source for for our listeners. And it comes from Michelangelo that yes, that one, the one who painted the ceiling of the Sistine Chapel and Michelangelo's quote is the greater danger for most of us lies not in setting our aim too high or falling too short, but setting our aim too low and achieving our mark. I think that's very profound and shows you tells you a lot about goal setting, right?

Ed Cruz:
Well, absolutely. And you know, you have to have a vision and obviously someone that uses a paintbrush has a vision before he actually starts his strokes. And you're right. You know, for many of us, we just think we can't achieve these certain things. And, you know, if you think back, there are things that you probably said in life in your lifetime, Oh, I can't achieve this or I'll never get to do that. Or I just all that, all the negativity. But, you know, our mind is a powerful tool. And if we actually set our mind to that task, to that goal, we'll level up and we'll achieve it.

Producer:
Yeah, absolutely can. And yeah, set, set your goals, set lofty goals for yourself and, and then achieve them. You know, it's kind of like the other saying that kind of became popular I think again a few years ago that was you know if you aim for the stars, even if you aim for the moon is it and even if you miss, you'll land among the stars. Right? So, you know, set those those goals high. And even if you don't quite achieve what you want in the end, that big end goal that you set for yourself, you will have achieved a whole heck of a lot. So that's.

Ed Cruz:
Even more by doing it that.

Producer:
Yeah, exactly. There you go. Well, you know, we mentioned as we started off the show, all of the market volatility that has been running rampant here on Wall Street and really affecting Main Street as well over the past weeks and months, really. But we really have seen it lately with the, you know, persistent inflation numbers as they come out. You know, it seems like every time we get a new report on inflation, it either hasn't gone down at all. It's just kind of stayed at the same level or it hasn't gone down nearly as much as was expected and all of that. So that's really been one thing that's led to market volatility. The other thing that's led to market volatility here lately are interest rates, because interest rates, of course, the Federal Reserve raises interest rates to try to fight inflation, to try to tamp down demand, right cool off the economy on the demand side of things. And so both of those things have really led to a lot of uncertainty in the market. And they've really gotten people looking for guarantees in life.

Ed Cruz:
Absolutely. You know, when you think about mortgage rates jumping up by, oh, I don't know, well over 50%, probably 60 to 70%. You know, we see that the housing market's cooling down. When that happens, people become unemployed. Everyone in that sector, we see our food prices where they are. You know, we could keep throwing in. It's inflation, obviously tied in with with fuel. Fuel is adding a big part to it. And although we've had a little slow down in the in the uptick in prices of fuel, I believe that they're going to be jumping back up because recently we had Saudi Arabia or OPEC in general say that they were going to cut back 2 million barrels per day. So as we head into the winter months, obviously, we can expect to see fuel prices jump again. And it's not just gasoline at this point, it's oil that's heating homes and that's actually more expensive than just gasoline. So there's going to be there's a lot more that we need to get through ahead here. And, you know, gosh, I always say, you know, our our government still hasn't even told us that we're in a recession. When they do, along with everything else that we're seeing, it's just going to compound the the issue of inflation and just how expensive everything is. I believe that we're far from over.

Producer:
Yeah, you know, it's a tough thing to come back from. Obviously, we will we will do it, but it will be painful in the meantime. And people are, you know, as I say, looking for those things that are that are guaranteed. And they look at the thing that's happening, that all the different things that are happening in the markets and the financial markets, the equity markets, and they say there are no guarantees here. This is not something that makes me feel, you know, safe, like my money is safe. I could lose everything potentially. There's always that kind of market risk. So actually, we wanted to spend a big chunk of the show today on this, you know, sort of section called Get to the Guarantees, because we have actually and I'm sure you have Ed and a lot of the other. Agents and and advisors that I speak with on a on a daily and weekly basis have really been flooded with calls for people who want guaranteed ways to invest and also generate income for their retirement, because that's what they're scared about, especially if you're if you're seeing all this going on and you're getting close to retirement. It's got to be such a scary thing for you to because because you don't want to have a 2008 situation all over again, because God help the poor people who retired and right around 2008, 2009, you know, their investments were just really, really suffering.

Ed Cruz:
Right. And here we are talking about inflation and the cost of everything. And and the one thing that we never think about or hardly ever think about are black swan events. You know what? If we had currently another terrorist attack or just another unforeseen bad mix of things that just comes into our economy, these black swan events, coupled with the weak state of our economy right now as I see it, would really lead to to these four one K's IRAs. We would just see a tremendous loss in the trillions of dollars in these retirement accounts. And would you be able to retire if that happened? Maybe, maybe not. We don't know your full situation, but that's why we meet with you. That's why we sit down with you, go over what it could look like, what it could be, how we could set these guarantees. And that's that's what it comes down to. You know, when we talk about guarantees, you know, how can how can we achieve this? There are multiple ways. And one one thing I would always say is, you know, you have to start as we say it. You have to start paying yourself. And that's saving, right? You have to start saving. And if you're able, if you're lucky enough, fortunate enough to be able to save up to 25% of your income each year so that you don't have to work so long in the period that you should be retired, let's say, instead of retiring at 70, you could retire at 67 or instead of 67, 64. If you're looking for that earlier retirement, you have to start saving sooner than later.

Ed Cruz:
So, you know, the one thing I say is and you hear this from a lot of advisors that you need to have saved for emergencies about six months of what your of what your expenses would be. Well, how about instead of just putting that in a checking account where it's really not doing anything for you, why not put it into short term CDs and and start and start making some money on those savings? You know, I find a lot of people when I ask them, okay, you've had the six month saved just in case. How long have you had that money in there for? They'll tell me. Oh, gosh, I've had that in there for five, seven, ten years. And I asked them, And what type of rate of return have you gotten? And of course, they look at me funny. They're like, well, you know, it's just a checking account or a savings account. I don't earn any interest on that. And I say, Well, what, what, what if you had it somewhere like a short term CD, whether it's six months or 18 months, two years, whatever it may be, you you may have been earning, you know, at least an extra. Oh, interest rates were low, so let's say half percent, 1%, whatever it may be, something is better than nothing I always say. But what if we took that a step further and we looked at multi year guaranteed rate annuities you could have been earning back then, you still would have been earning somewhere around 2%.

Ed Cruz:
Today. You could earn around three and one half percent. Or if we look at a five year rate, we're looking close to 5% for five years. You know, why wouldn't you do that for your short term money? So there are there are interesting ways that we can that we can put our money aside and should we need it. There are there are products out there that have a return on principal guarantees so that you don't take any sort of loss. So we can protect that in multiple ways. So, you know, that's that's one of the ways that that I would say it's a quick starter, it's a quick thought and it won't take a lot out of you. And so if if if that's something that that you can do, I would say go for it. The other thing is when looking at our our portfolios, when we look at bonds, bonds in portfolios, I mean, I see these once in a while, you know, they're kind of going away. I think a lot of advisors have straight away from bonds, but it still does exist and I've seen them. And, you know, if you do have bonds in your in your portfolio, why not implement a replacement strategy that's tax free or tax deferred for investing and for your own retirement, you know, doing doing bond replacement? Not only have bonds been under serving to the to retirement plans by by doing a smart bond replacement. You know you could actually be getting three, four or five times the return on your money depending on that bond so.

Ed Cruz:
You know, again, let's look at the guarantees. You know, a bond, even though you have a let's say, a set rate of return on that bond, a yield, as they call it, in today's day and age, while while we have these interest rates rising, you know, that bond value may have gone from from 100,000 to 80 to 85000. So while you were accumulating all these years at 2%, two and one half percent, you may have just lost it all. You know, during just the past six months, just because your bond is now worth that, much less. And so you really need to think about bonds if if you're holding on to those. And of course, if you invest into a fixed indexed annuity, that will help you protect any of the growth, not just your principal. We call that the step up effect. And it's nice to know that if you earn in the past six, seven, 8%, nine, 10%, that when the market does come around to to resetting, that those gains are completely locked in and guaranteed. Isn't that why you're saving? Are you really saving one year to lose it down the road on other years? And in fact, you might you may have been saving for ten years at this point. And, you know, a market event like this happens and all of a sudden you have less than when you originally started. That's ten years lost of investing. Or if you've lost half of it, well, that's that's five years lost of investing.

Ed Cruz:
So why would you want to do it that way? You know, there is a better way and and we could show you that. Life insurance. Life insurance is one of the only two ways of tax free investments available to Americans that are pre-retirees and retirees. We prefer indexed universal life or IUL to get you market like gains without market risk. There's a low cost of life insurance. But once that's satisfied each year, you will build cash values within the life insurance policy, and it will grow over time as the money is linked to a market index. Your principal and your annual gains are locked in each year, and one great benefit of indexed universal life insurance policies is that the withdrawals you make from the policy are done so in the form of loans against your policy and therefore tax free. This is called a Rule 7702 plan, which ties back to the IRS tax rules. 7702. Society benefits from life insurance and tax savvy investors use this strategy to generate tax free income. And it's a it's great for folks that are in their in their younger years, thirties, forties and fifties as obviously the cost of life insurance is is lower at those ages. And then we'll switch over to the other form of of guarantees that can offer you a tax free income and that's Roth IRAs and we can accomplish that through through investing into IRAs or doing Roth conversions. And Roth conversions are just simply done using any type of retirement plan that you have right now, taking portions of that, converting it over to an IRA.

Ed Cruz:
Then we do a Roth conversion. So Roth IRAs, again, will provide you with tax free income and and and they are available to to retirees and pre retirees. And and I have an example to share in regards to to to a couple or to a to an individual here and we'll just call them Rob for the sake of it. He is married 63 years old, has a 760,000 lump sum in his IRA and his income sits at 166,000 a year and he plans on working for the next four years and retire at the full age of 67. And. And we'll do Roth conversions. And by doing that, we'll drop his estimated retirement tax bill from $834,000 down to $356,000 for a tax savings of 478,000. And for as good as that sounds, it goes further. Because, you know, taxes today we still feel are somewhat low. And when we think about. How deep we are in debt in this country, which is we're over $31 trillion. If you haven't checked the number lately, we do expect taxes to go up from here. So if you if you're implementing these strategies today, this is only going to save you more in the future. But in this situation here, this, this, this couple, your total retirement and inheritance tax savings were 718,000, which is pretty darn close to the to the total amount of IRA that he has. So these are these are great strategies to use. And it's a great way to to guarantee your future.

Producer:
Yeah. And to do it in a way that is going to save you a whole lot on on taxes. And as you say, not only, you know, the the taxable income each year, you know, being kind of heavier on the front end, lighter on the back end. So you're not paying as as much in taxes later on in the Roth conversion process. But also that inheritance tax savings is really, really huge and very real in this particular scenario for for our mythical client named Rob here who who started that Roth conversion. But yeah, I mean, you know, people hear that 478,000 in tax savings of just income tax savings and then total retirement and inheritance tax savings, 718,000, that that is just a wild amount of money. And if you can keep that in your pocket and not have Uncle Sam because he's you know, there's the old the old painting of Uncle Sam, you know, the very the very famous painting where he's saying, I want you. And, you know, a lot of times it seems like he's pointing at you saying, I want your money, you know, So keep keep Uncle Sam out of your out of your wallet in your retirement as much as you can. I think a lot of people would go for that and.

Ed Cruz:
Yeah. You know, and we're just talking about, again, the current situation. We have another army of IRS agents about to be hired on possibly. And we really need to sharpen that pencil because, you know, over, over ten, 15, 20 years, if you sat there and actually added up how much you've paid in taxes, it might shock you.

Producer:
Yeah, exactly. And so if you are interested in hearing more about this, if you've got questions about that Roth conversion process or a fixed indexed annuity that we've been talking about, or MIGA, that's that multi year guaranteed annuity or any of the other things IUL that Ed has mentioned here in the show so far. Give give them a call 386 228 5769 That's 386 228 5769. And the website once again folks is my prosperity team dot com. Well, I mentioned a little bit earlier that we were going to share some about or some from the book rather called Annuity 360 by our friend Ford Stokes. And let's do go ahead and do that now, because I think this is a good spot where we're talking about getting to the guarantees. There's one chapter in his book in particular that talks about getting about that, really about something that can be guaranteed and that's guaranteed income, creating your own personal pension for your retirement years, that that guaranteed income that you will have in your retirement years. Let's take a listen to this. That chapter from Annuity 360 on building your own personal pension. We'll listen to it and we'll chat about it a bit and a lot of other great stuff coming up here on the other side.

Ford Stokes:
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. 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:
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 1 to 2% 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 5% a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be RMD 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.

Ford Stokes:
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 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 1 to 1 and one 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%, 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 5% be withdrawn each year from your account.

Producer:
And that was a chapter from the book by Ford Stokes called Annuity 360. And you can get a free copy of that, by the way, by giving Ed Cruz a call at 386 228 5769. That's 386 228 5769. A lot of great info in the book there. Go to MyProsperityTeam.com And you'll find the contact form to get in touch with Edwin Cruz and get a free copy of Annuity 360. Well, we've been talking a lot about the uncertainty in the markets. And, you know, it strikes me that not only in times that are sort of crazy like like we have right now with all of the. Volatility that's out there in the markets and and in the economy in general. Ed But even during normal times, there are reasons for people to reach out and speak to a financial professional such as yourself, somebody who does this every day, somebody who helps people with their planning for retirement and and really helping them meet their goals. Go through here and tell folks some reasons why and even reasons why they might not have thought of really, but some reasons why they they might want to speak with a financial professional like you.

Ed Cruz:
Well, absolutely. You know, especially with all the variable products that are out there or security products that are out there, you know, I'll sit down with people and, you know, let's say they have a variable annuity. They pull it out and and they'll ask me about certain fees, you know, yet I don't understand what an expense ratio is. And if you've never been told you have something like that involved in your variable annuity in your securities, then you need to speak to someone. If you don't understand the risk that you're taking with your investments, especially today, because, you know, they say the market will come back. That's not really providing you with an answer. You should speak to someone if you don't have a formal retirement plan, if no one's showing you, you know, once you get to to to the end of the road here and you retire what your income is going to look like when you retire, then you need to sit down with someone. If you don't understand how you should manage risk in your portfolio as you get older, such as the rule of 100 that we talk about, then you need to speak to an advisor, someone that will help you understand why you need to minimize that risk. If you're unsure whether you should pay your house off or not, or or is your vehicle paid for? Are you looking to get another vehicle soon in retirement? How can you afford another vehicle if you don't have a plan for those things? You should you should speak to someone about it.

Ed Cruz:
And health care, I mean, one of the most costliest things in retirement. If no one's talked to you about how you can set aside and make sure that you have the funds for health care, then you really need to talk to someone. And you know, Matt, we were we were speaking about this earlier. You know, there are some new long term care mandates that are coming out. And and I think we're going to cover more of that in the in the coming weeks. But if you live up in the Northeast and it's already being implemented in the West, if you don't have a long term care plan, any type of health care plan, you need to sit down and speak to someone because there are some big changes coming down the road and you need to be prepared. If not, it's an additional tax that's going to be levied onto you. And wouldn't you rather have coverage than just be taxed because of your tax? Fine, you pay that. But then if you need long term care, you're going to pay for that too. So why not cover it before you? You just shell out the money to the IRS.

Producer:
Yeah. And that that cost of the long term care, if you have to pay for that out of pocket. Boy that is that is no small amount of money so that is definitely something to to think about and to plan for. And as you say, it's a huge chunk of the expenses in retirement. And folks, if you want to learn more once again, go to my prosperity team dot com or call. Ed 386 228 5769. And one of the things that you do and when people give you a call is take a look, of course, at their current portfolio, kind of like you were just saying. It's looking through and examining everything that they currently have. Right. And I know you had an example of of someone who you kind of wanted to share a little bit about their portfolio and maybe some ways that they've been been helped by, you know, talking to you and your services.

Ed Cruz:
Yeah, absolutely. And again, you know, what we will add to that is that if you haven't heard from your advisor lately, because you know, when this type of market situation happens, a lot of advisors will avoid their clients. You haven't heard from anyone. Call us, get a second opinion. Let us help you in this example. You know, I just took I took $1,000,000 portfolio and but that size, does it matter whether it's half a million, whether it's 100,000, 2 million really doesn't matter. I was I was sitting down with with a client that has a variable annuity. I know that she's had it for many years. And so we did a little comparison now that the market's going down. And again, she hasn't heard from her advisor, which wasn't shocking when when when I sat down with her here a couple of days ago and her variable annuity, now that this market has taken a downturn, when we did the nine year average, she came out just a little over 2.7%, 2.7%. Had we been sitting in a multiple year guaranteed annuity for five years, we could have beat that rate. And this person has taken all the risk and that's just not the way it should be. We compared that to the fixed indexed annuity that I have with her, and over the last seven years she's made 56%. That's an 8% average per year. It's locked in. It locks in every two years. It's 24 month point to point.

Ed Cruz:
And so there's part of this right now is not completely locked in. But what I can say to that is that the rate actually was higher. It's actually come down some. But we have multiple strategies in there. So we've been able to protect some gains even at this point. So that was just one quick little overview of of a client there. Again, regardless of the amount of money, would you rather be average? Would you rather average 8% or would you want to take on the risk? And after losses currently now, and who knows what happens in the future, You know, be like this person at 2.7%, right. So when we take a look at total client portfolios and we do these type of reviews, it really opens up their their eyes to to what they're doing and why they shouldn't be doing it that way. And of course, it's needless to say, this person will not be keeping that variable annuity. They no longer want it. And but that's the whole point to this, is to educate you, right. If we look at total portfolios and again, we'll go back to this million dollar portfolio, if you have 600,000 in securities, because that's what's at risk and they say the 400,000, we're going to put it there because that will provide you safety. Bonds are not 100% safe. And that's something that people really need to understand because they say, well, you know, I have X amount of bonds in that safe.

Ed Cruz:
Well, it truly is it. And sometimes we get into that and we start looking at all the numbers down down the line and they say, oh, well, you know, I had put $200,000 in here. Why is it only at 170 now? And I tell them, because that bond is depreciating and it's going to continue to depreciate. Every time you hear the Federal Reserve say we're going to raise interest rates again, you're just going to take another hit time and time again. And therefore, that's why you just can't say that a bond is is a safe asset, it's a safer asset, it's a lower risk asset, but it's not 100% safe. And so if we look at this 6040 blend in this portfolio and we look at the advisory fees of one and a half percent, which are 6000 a year, and we cut part of that out, we could save a lot in fees. But furthermore, those fees over over a long period amount to a lot of money. If we look at 35 years, that's 210,000. Now, conversely, had you kept that there's compounding interest on that money that you didn't pay out in fees. So you would have actually more than that in your account saved up because of the compound effect. And when we look at these these these portfolios, as I said, this variable annuity averaged 2.7%. Well, imagine if I told you that $1 million account only averaged three and a third percent because now you're taking losses and that's what your overall gains are.

Ed Cruz:
You know, if we look at the indices today, on average, they're down 20, 20 plus percent. And I don't know about you, but, you know, I don't like taking losses on the on the money that I've earned. But I really don't like taking losses on my principal. And that's what everyone out there is doing today, conversely. If you turn back the clock and you insert an idea into that with no fees. Imagine saving that 210,000. Imagine having a return of about 7% per year. And those are those are factual numbers. You know, we can achieve these things. So in this example, again, the bond portfolio value after 30, 35 years, 1.3 million, the fixed indexed annuity after a 35 year rate of return would have had $4.187 Million. You know, I don't know about you, but I know which one I would prefer. And it is over a long period of time. And if we cut that in half, well, we can we can always just rerun the numbers. But even if we did, I would take the, the, the, the 700,000 over or I wouldn't take 700,000 over $2 Million. So again, the numbers don't matter. It's about the rate of return. And again, this is all about guarantees setting up your future. And that's what we can do for you.

Producer:
That's right. And once again, folks, if you would love to hear more about how you can do something like that and add some safety and security to your portfolio, just go to MyProsperityTeam.com . That's my prosperity team dot com or call Ed at 386 228 5769. That's 386 228 5769. And talk to Edwin Cruz today.

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

Producer:
And so of course at in these times where people are thinking about you know seeing their money go bye bye some sometimes unfortunately, whether they have much say over it or not, they feel like we would like to give people some ideas on how to save as much as they can or not spend as much as possible. And so that's where this cost cutter comes in. And it's all about this time around reducing your phone costs and also evaluating how you consume media, which has changed a lot here lately.

Ed Cruz:
You know, and before I actually go over that, I have a personal story to say about cost Cutter here, because, you know, during the the storm that we just went through the hurricane, my daughter came over and, you know, she uses XYZ company and she was able to to have to have service. And here I was with one of the big names out there and I didn't have service. And furthermore, I was paying about double. So I actually changed my my my cell phone company and actually saved on my on my own. So here I am implementing this. And it's funny that we're talking about this, but yeah, so how we use phones and how we consume media at home is dramatically changing and you may find some opportunities for reducing these these expenses, just as I did. And if you still have a traditional phone line at your home, you can explore eliminating it and just relying on your cell phone. And I will say that I think 80% of people today are there already. And have you shopped around for a better cell phone rate lately? Again, I just did.

Ed Cruz:
And I found out I was I was overpaying by 100%. So do you have cable? Would you be better Would you be better off watching shows via services like Netflix, Amazon, Amazon Prime or Hulu? Are you getting the newspaper delivered? That's that's a rare thing in the past, but it still happens. Magazines, we still see plenty of those going out. Could reading these subscriptions online reduce your monthly spending? And sometimes we don't think about that. Now I know for some it's hard to to read online all the time. It's it could be a little hard on the eyes but you know there are there are different ways that we can that we can change our habits. And sometimes we just don't think about it. So again, I was a creature of habit for my wife and I spoke about this, I think it was 26 years with the same cell phone carrier. And I just changed it and found out, gosh, I could I could have done this a long time ago and been far better off.

Producer:
It's funny how that happens and you don't even realize it sometimes. And that's the whole point I think of this discussion about this particular cost cutter is that if you don't know, if you don't, if you don't check, if you don't go over your options, you don't know because you don't know what you don't know, right? So so there you go. And yeah, I mean, I've been sort of thinking about that also with the cell phone bill and bringing that down, maybe going to one of those that's not one of the big three carriers here because they are the ones who tend to overcharge, not going to name names. But, you know, I'm talking about and then yeah, I mean, you know, those talk about those subscription services, too. That's one thing where you do have to be careful, though, because let's say you have a couple of them, a couple of different subscription services, Netflix, Amazon, Hulu, whatever other ones you might have, just make sure that you're using what you're actually paying for. And it's not just automatically coming off your checking account or your debit card or your your credit card every month and you're not using it. So if you're not using it, you can get rid of that and save yourself some money. So, you know, just just pay attention to the stuff that's going on in your in your entertainment life.

Ed Cruz:
And pay attention to these subscription prices going up on an annual basis, because that happens.

Producer:
All the time. Absolutely does. And it's something you got to be careful for as well. Make sure you're getting your money's worth there. Well, a few minutes here left in the show, just about it's just about ten, ten ish minutes here. And and we wanted to share something with our listeners here because we've been talking a lot, of course, about the uncertainty of things today. And we spoke about taxes earlier as well, and reducing your tax burden through that Roth IRA conversion. Let's take a look here and give our listeners one last kind of wrapping it all up in a nice little pretty bow of a checklist for a way to reduce taxes and grow your assets during retirement.

Ed Cruz:
Well, one thing we want to do is analyze your portfolio for risk expenses, fees and anything else that's correlated to that. We also want to assess your income needs, your monthly expenses and retirement income. And we want to include Social Security income and determine the future of retirement income gap. And it's amazing to me how many times I speak to to. Retirees or upcoming retirees, I should say. And they have no idea that their Social Security can be maybe taxed in retirement. They don't understand that until I actually go over the numbers and show them that in some cases up to 85% of their of their Social Security may be taxed. So these are things that you should be aware of. It's not how much income you receive, but smartly receiving just the right amount of income so you don't get into that next tax bracket. So those are things that I go into into depth when when, when going over their plan. Let's see, We want to invest in a smart financial plan by following, as I said earlier, let's say the rule of 100, right? Smart risk and smart safe with fixed index annuities. We want to be in a position to where we can defer some of the taxation if we're not using it, why are we paying taxes on it? Right. If if if we have 100,000 portfolio in securities versus 100,000 inside of of an annuity and you're not using the growth, then why pay the taxes now? Why not minimize your tax exposure? So again, these are all little, little tidbits that add up to a lot throughout five, ten, 15. Some of my clients have been with me for over 20 years.

Ed Cruz:
So these are things that make an actual difference. Let's invest in tax free accounts again. We could do those Roth IRAs. And if you're if you haven't done them yet, you can still benefit over the next ten, 15, 20 years by doing Roth conversions. As we spoke about earlier, indexed universal life plans that when done properly and they are done improperly time and time again, I see all the types of promises that are made by certain advisors and these are these are tools that can be quite helpful if you give it the right amount of time. Time is the only thing that that that you need for this to properly work. You just can't get into it. Five years later, expect an income. It just doesn't work that way. So again, just having someone that is going to be honest with you and tell you, listen, this will work for this reason or this is not going to work because your timeline is too short. You need to understand these things. And again, following the 4% rule so that you never outlive your money. If you're if you're if you have securities, you need to follow this rule that way, that part of your plan doesn't collapse, because if you have your securities collapse on you, then you're going to put a lot of strain on your on your fixed accounts. And we don't want to do that. So by properly balancing these things out, we can make sure that you have a good future, a successful future, and one that you'll be able to smile throughout the years.

Producer:
And this is one of the reasons why I think, you know, I say to people all the time, you don't. Don't think that you have to go it alone. You know, when when you're retiring, when you're planning for retirement, rather don't think that you are in it by yourself because you don't have to be in it by yourself. Right? I mean, it's there's a lot that goes into it. There's a lot that you that you might not know that could go into it. There's strategies. There are ideas out there that could be beneficial to you, but you got to know about them. And someone like you could could really help folks. And I know you do on a daily basis, sort of, you know, navigate through some of these things that can be more difficult, either difficult to understand and boil it down for them to be like, okay, here's what this means, here's what this is, or give them those ideas and strategies that they might not even know exist but could be really beneficial to them in the long run.

Ed Cruz:
You know, there are reasons that we attend all these webinars, webinars, webinars, whatever you want to call them, whether it's live or or by video. And you know, we speak to one another in our industry. We learn from one another. These are just things that not just prep us, but it preps us to speak to our audience. And, you know, this is a constantly evolving industry and we're constantly learning, We're constantly testing. We're there's a lot that we go through to do this job. And, you know, the one thing I want to tell people is I don't go at it alone. I have an army of people that I can talk to, and you shouldn't think that you need to go at it alone. You should have someone that you can speak to regularly, freely, without any worries. And, you know, if, if, when done right, it should lead you to to a prosperous future.

Producer:
And that is what it's all about, of course, here on Prosperity Principles, we do want you to prosper. And I know that Ed Cruz is the man to help you out with that. If you have enjoyed the show today and you've heard something that you didn't know before or that maybe you have questions about going into your financial future. There are a couple of ways that you can reach out and get in touch with Edwin Cruz. The first one is by going to the website. It is my prosperity team dot com that is once again all one word, MyProsperityTeam.com . Or you can give them a call at 386 228 5769. That's 386 228 5769. To reach Edwin Cruz and get that free full retirement plan consultation that is comprehensive and can really shed a lot of light on what your current situation is and really compare that to what it could be if you work with a financial professional like Edwin Cruz. Well, Ed, just just about another minute or so here to go in the show, but I have really enjoyed it. I can't believe it's come and gone this fast. Once again, I'm glad to be back here. You know, we had a had a repeat episode last week, of course, because of the storm. But I'm glad to be back here with you and sharing this information with folks. It's all about education. That's really what we're trying to do here and share this information with people to to really help them make their lives better. And I enjoy doing that with you every week. And I look forward to doing it again next time around.

Ed Cruz:
Absolutely. That's what we're here for. And if any of you out there have questions about where's my retirement income going to come from? How much income will I need if inflation continues to go up? What will I need to have an income in the future? You know, we could help answer any of these questions and a whole lot more. Reach out to us and we'll help you get there.

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 MyProsperityTeam.com Or pick up the phone and call 386 228 5769. That's 386 228 5769.

Producer:
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. Amerilife 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. Have you experienced age discrimination in the workplace? I'm Matt McClure with the Retirement dot Radio Network. Powered by Amerilife.

Producer:
If you're 50 or older, chances are you've either seen or personally suffered from age discrimination at work. That's true for nearly two thirds of workers in that age group, according to research from AARP.

Bill Rivera:
And the pandemic certainly contributes to that persistence, with one in four people who have been let go or otherwise left the workplace during the pandemic, having trouble finding a job if they're 50 or older.

Producer:
Bill Rivera is senior vice president for litigation at the AARP Foundation. He says spotting age discrimination is not always easy, but there are signs to watch out for.

Bill Rivera:
For example, our promotions or training opportunities or key assignments given to younger workers routinely over older workers. Do you hear around the office? And does the company tolerate jokes about age and ageism, Like referring to the idea that you can't teach old dogs new tricks?

Producer:
Rivera says if you see possible age discrimination, it's important to document it.

Bill Rivera:
And you want to do that as close in time to when it happens. So note the date, what you saw, what you heard, who else was there? Talk to your supervisor. A lot of times you can resolve these things informally, but if you can't, you may need to go up the chain.

Producer:
And he says the AARP Foundation has several resources available to help older workers.

Bill Rivera:
For example, Back to Work 50 plus, which has free workshops, tools and career coaches to help you as well as AARP Resume Advisor, where we will for free. Review your resume and provide advice and tips to make your resume stand out, as well as AARP's job board to connect you with employers who've indicated they are interested in an age diverse workforce.

Producer:
So what would you do if you see or experience age discrimination at work? That's a key question to consider. As Americans are living and working longer with the retirement radio network powered by a married life. I'm Matt McClure. Where's the best place to hang your hat when you retire? I'm Matt McClure with the retirement radio Network. Powered by a marriage 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.

Producer:
While 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.

Producer:
Even 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 dot Radio Network powered by Amerilife. I'm Matt McClure.

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