On this week’s show, Ed asks the question “how much more are you willing to lose?” He takes a look at how rising interest rates and market volatility are affecting retirement plans and explains how he recently helped one couple go from being good savers to truly effective investors.

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market update
cost cutter
inflation demonstration

11.4.22: Audio automatically transcribed by Sonix

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

MattMclure:
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.

Edwin Cruz:
Welcome back to Another Week of Prosperity Principles. Edwin Cruz and for 24 years I've been talking about what challenges seniors have out there. And obviously right now with the market volatility, the big question is how much more are you willing to lose or are you willing to lose all of your money, some of your money or none of your money? We'll be covering some ideas, solutions that will help you to for the four-year future to get us started. I'm going to walk them in our co host, Matt McClure.

MattMclure:
Well, hello there, Mr. Edwin Cruz. I hope you're having a good week so far, sir.

Edwin Cruz:
It's been a very good week. I continue to see some sad reports out there as I do my reviews. But that's what we're here for. We're here to help people move forward in the right direction.

MattMclure:
Yeah, that's right. I mean, of course, the markets have been all over the place here for the last good little bit, mostly down, of course, so far this year. When you look at the year as a whole, we've had some some good upward runs. But as we talk about a lot of the time, you know, if you lose 50%, you know, in the stock market, you don't if you if you then gain 50%, you're only back to 75%. You got to you've got to, you know, gain another 100% to be able to get back to where you were. So that's what we're what we're talking about a lot is the market volatility and how do you protect yourself from it. And that's why we're calling the show. You know, how much more are you willing to lose today, right?

Edwin Cruz:
That's right. And, you know, when we when we talk about risk, of course, the market risk is the one main factor that is on most people's minds today. But we have to remember, it's it's more than just that. Right. You know, after the pandemic, we got a real, real view of what global health concerns could be. So there are risks there that we can't control. We have the longevity risk and the risk of outliving your money. And obviously, we've talked about lifestyle risk and pension risk and what's going to happen on Social Security. So there's risk all over the place and we just want to help you manage all those risks.

MattMclure:
Yeah. And protect yourself. Protect your hard earned money and let it grow as well. And of course, that that's really what it's all about is education here. And that's what we're going to do. And we really, really thank you for joining us wherever you are, if you're joining us on the radio or maybe you're in the car, maybe you're at home, maybe you're listening to us via the podcast. We appreciate that. And if you didn't know we were a podcast, hey, yeah, that's a thing, too. It's actually available. Wherever you listen to podcasts, just go and search for prosperity principles and you'll see the logo for the show there. It'll pop right up and you can give us a listen. Subscribe. We absolutely love hearing from our listeners. Well, Ed, you know, it was a big day yesterday. We had Election Day here and across the country. And you know so much. I really hope that our listeners got out and let their voices be heard. That's the biggest thing that we can do as Americans. And, you know, is just to let our voices be heard. And that's my thing I always say is, you know, if you don't vote, you can't complain. So, hey, if you didn't get out yesterday or in early voting or anything, I don't want to hear you complaining.

Edwin Cruz:
Yeah, that's right. You know, throughout the months here, maybe even years, you know, we've heard a lot of what people don't like, what they want to see. And so, yeah, the only way to to combat that is to get out and go vote. And so hopefully we you know, we we get what we were expecting.

MattMclure:
Absolutely. Well, and we've got also another reminder here for folks. We've got just about another month left in the annual enrollment period for Medicare. Talk about how important that is because people really do need to take a look at their Medicare coverage.

Edwin Cruz:
Absolutely. You know, there are so many choices out there and it just seems like it keeps expanding year after year. And I mean, I just think back five, ten years ago and how few choices we had and how much more there is. But, you know, we've got to get out there and and explore. But you only have a certain amount of time, right? It started October 15th. It ends December 7th. So if you are still in the grey about some of your possible options or choices or. Wishes that things that you have on your wish list when it comes to Medicare. Get out there. Speak to someone. Call us. We can help you and get what you need to get out of Medicare. Right. So if you need that help. 3862285769 is the number.

MattMclure:
Yeah. And you can also go to the website which is prosperity my prosperity team dot com that is my prosperity team AECOM once again. Well a lot of great stuff as we've been saying here Ed coming up on the show we do have our quote of the week in just a sec, but also got a little bit of an update on interest rates. The increase there. Again, just last week here, we'll do an inflation demonstration. We got a problem solver, some right or wrong as we put your financial knowledge to the test and we encourage you at home or in the car or wherever you might be to play along with us there. We'll also have a cost cutter about, you know, how to save, really. One of the biggest budget items during retirement. Give you a hint what it is, what it is, and just talked about it. All right. So we'll we'll talk about that coming up a little bit later on in the show as well.

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

MattMclure:
So once again this week, Ed, we've got a couple of quotes of the week. I think we've we found them on a two for one special. And so we just keep passing the savings along to you. But we've got two quotes of the week this week. One of them comes from my guest. A bit of an unlikely source, but another comes from an unlikely name. And that's because it's a person who went by two names. Ayn Rand is how everybody knows her, and Russian born American author and philosopher as well. Alice O'Connor was her not in her birth name, but the name that she went by, I guess, legally here in the in the United States after she because she had a Russian name, obviously, she was Russian born. And, you know, I think everybody was sort of she was afraid anyway, everybody would look at it and say, I'd like to buy a vowel, please. So this is what Alice O'Connor, also known as Ayn Rand, said one time. She said this, quote, Money is only a tool. It will take you wherever you wish, but it will not replace you as a driver. And that's that's really important. You've got to control it, right?

Edwin Cruz:
Yeah, that's right. You know, we we have plenty of resources, right? It's not just money and how we steer all of this and what direction you take it is going to determine the outcome. So be a good driver.

MattMclure:
Yeah, that's right. Not only on the roads, but in your in your everyday life, financially speaking as well. Well, our next quote of the week here comes from somebody I know that our listeners have heard of and only goes by this name, Jay-Z, also known as Sean Carter. I mean, that says that's his birth name, but he goes by Jay-Z. He's, of course, the hip hop artist and mogul and the husband of Beyonce. That's how a lot of a lot of people know him these days. Beyonce, his husband, he said this, quote, I won't buy it until I can buy it twice.

Edwin Cruz:
Does a lot.

MattMclure:
Exactly. Well, it also it also says a lot. Yeah, it says a lot about how much money he has, you know, in his wallet, too.

Edwin Cruz:
Yeah. I think about he bought a sports franchise. So obviously if he stuck to this quote, then I guess he could have bought two of them.

MattMclure:
That's right. That's right.

Edwin Cruz:
But, you know, I would have teased the crowd by saying, you know, name this person. Who is Sean? Sean Carter. Oh, yeah. That would have been interesting tease. But you know, to say that you won't buy things till you buy it twice, obviously the main goal is and especially for retirees, you know, to boil it all down, you want to be out of debt because carrying debt into retirement is not helpful. So so make sure that you're not financing everything that you that you purchase or at least try to keep it down and nothing.

MattMclure:
Yeah, I'll keep people in suspense next time we have aa2 named person and see what everybody knows here. All right. Well, those are our quotes of the week this week. And on to a bit of a market update here. Of course, we're we're not going to talk about the actual markets, but we're going to talk about something that really affected the markets over the last week or so. And that was the Federal Reserve meeting last week and the decision to raise interest rates once again. It's been a handful of times this year that they've raised rates and did it again by another three quarters of a percent. That's 75 basis points for those of you keeping score at home. And so, yeah, talk about that and its impact on folks.

Edwin Cruz:
Well, you know, there's two sides of this coin here and I'll go with the bad and then I'll go with the good which which maybe most people don't think about here. But in our industry, it's actually a good thing, right? So, you know, we haven't seen these type of these type of raises by the Fed in a very long time. I mean, it dates back to 1994 since we've seen this type of aggressive pace in raising the federal interest rate. And, you know, they've they've started signaling their desire to slow down the pace of increases soon and to stop raising rates by early next year, because obviously, one thing that this will do is slow down the economy. But the one thing that our our government officials haven't been willing to do is slow down our spending. So that's that's the the ugly. Right. You know, we we we want to see this inflation settle down, but we're not getting that type of support by our leaders to do this. Now, the flip side of raising interest rates is that inside of fixed indexed annuities or annuities in general, as you raise rates, it makes it makes buying these indices it prices a better for us. Right. We have more to spend on these indices. So for as much as those those out you that are that are being hurt by this market investing inside of these annuities, what it will do for you is you'll have better pricing, which means when the markets move up, instead of just receiving dollar for dollar increase, you might be receiving $1.50 for every dollar increase that goes on inside of an index. So, for example, a participation rate of 150%, if that index moved by 5%, you'd get a seven and a half percent. Return. So I don't want to get too deep into this, but it was a good opportunity to speak about the bad side of rising interest rates and the good side in our industry of rising interest rates.

MattMclure:
Yeah, you know, that's right. And that's something that people don't necessarily consider because they're seeing interest rates are going up. That means things are going to get more expensive to buy and all of that. But it also, you're right is it's that flip side of that coin that really could be a positive, positive thing for for people. And they, as I say, don't necessarily think about the positive all the time. I guess, you know, we're kind of human and that's the way we like to do. We like to think negatively sometimes.

Edwin Cruz:
That this was a good way of looking at it. And I thought it just made sense to talk about that.

MattMclure:
Yeah, absolutely did.

Producer:
Want to know where your hard earned money is going. It's time for an inflation demonstration.

MattMclure:
So we just mentioned it. Of course, inflation. That's the whole reason that the Fed is raising interest rates to begin with is to try to combat inflation. Right. You make things more expensive to to buy that tamps down demand and then therefore, the economy slows down. That brings down inflation. It all has to do with supply and demand. Right. It goes back to those two basic principles here. And so when we're talking about inflation, we're talking about costs in retirement going up as well. And and really, there's this article out of The Wall Street Journal that says that people who are getting ready to retire, people who are saving for retirement, are saying that they have a new magic number in their head about the big number that they want to get to when they're all saved up for retirement. And that number of dollars is larger than it used to be.

Edwin Cruz:
Absolutely. And the study here, a Northwest Mutual survey found that many Americans are worried about their prospects for retirement. About four out of ten people said they don't think they will have enough money when they retire. And nearly half of the people surveyed also said that they can envision scenarios where Social Security no longer exists. And I hear that talk about Social Security and we continuously put money into it. It's not actually a government program, right? It's funded by the working people out there. And I would just say that I can see benefits being cut. I don't see Social Security just going away. And I'll tell you, whoever's whoever's in that Oval Office or the party in power that allows Social Security to go completely bankrupt, they better run for the hills because the people are coming for you. The government increased Social Security, let's remember this by 88.7%, or they're going to in 2023, raise Social Security checks by 8.7%. That's the largest cost of living adjustment to benefits in four decades. The IRS, the Internal Revenue Service, also made inflation adjustments for 41k saving accounts, increasing contribution limits by 2000. And you might say, well, that's not a whole heck of a lot. But you know, is that 20,500 now up to 22 five. And if you're a serious saver, that does make a difference over ten, 15, 20 years and the compounded interest on top of that.

Edwin Cruz:
And so that's coming up for 2023 as well. And about 60 million American workers that have 401k plans are going to benefit from this. According to the Investment Company Institute, the amount of money a household will need to retire depends on variables, right? Many variables, including where people live. Because if you live out in the Midwest or you live in one of the big cities along the oceans, it costs it just costs a whole heck of a lot more to live there. And you know, your standard living. What do you want to afford? What do you want to buy? And whether a person expects to care for parents or children in retirement are also factors to consider. And I would say that the biggest misconception about retirement is that too many people believe retirement is about saving money and reaching that one big magic number. And but I will I will say that the reality is retirement is much, much, much more about the strength of your income plan than the size of your nest egg. And to make an example out of that, I would say and I've run these numbers before, you know, we've we've we've talked about and in the in the book the annuity 360 book we talk about the 4% rule.

Edwin Cruz:
Right. If your monies are sitting in securities that 4% rule if you look at. In order to receive a $50,000 income, for example, you would need $1.25 million. If you're following the 4% rule, but no one ever seems to think about when the market goes down like now. How are you adjusting your income to meet that 4% rule? Most people never think about it. Advisors don't want to talk about it because they know that the masses would just flock. But if we look at inside of an annuity, when you don't have to worry about your your money going in that direction, going backwards and holding on to a steady income, you can actually get more than just 4%. And so for that same 1.25 million, that gets you 500,000. You can actually discount that lump sum down to about 950000 to $1000000 and get that same income of 50,000. So what you like the ease of creating that income and not strain your assets that are out there by by getting an efficient tool that's called an annuity. And so that's what we're here to talk about. We're here to give you and provide you solutions, but with real world examples. That's the only way it's going to make sense. And that's what we're here to do.

MattMclure:
Yeah, absolutely. It's all about, as I said, education and giving you the tools that you need. And look, folks, if you are someone who does not have an income plan in place for your retirement and a lot of people don't. A lot of people are still, as I just said, concerned with that big nest egg number. Right. Whatever that magic number is for you. But really, the concern should be about income in retirement. And that can help. Just just give them a call. 386285769. It's 3862285769. Or go to the Web site, which is My prosperity Time.com. And when folks do that and they get started, talk about what that full retirement plan consultation looks like. I mean, we offer that to all listeners of the show absolutely free.

Edwin Cruz:
Absolutely. And that's the one thing we want to remember, that that our people here and here is clearly we'll provide that consultation at no cost. And that's important because you're already paying all types of fees for for what you're into. And the last thing we want to do is, is just burden you anymore with with with an additional fee or cost or or consultation, whatever you want to call it. So we want you to get a clearer understanding of what we do, how we do it, how it's better for you. We want to make sure that we analyze your specific and unique situation because we're all different. You know, we're all saving for different purposes. We all have different goals. Some some of my seniors want to travel a lot. Some of them barely want to travel because they've already seen the world. Maybe they were in the military or whatever, but we're all different. So we want to help you, but we want to make sure that we're not just providing a one size fits all plan. We want to make sure that it fits your plan. How much income do you need? Do you have pensions already in Social Security and your income is covered, but you want to make sure that you shore up maybe an education for grandchildren or you want to help a disabled child Or I mean, we could keep going on with yours, but we want to make sure that when you sit down with us, that we explore every avenue, what you're trying to accomplish so that we could do that for you.

Edwin Cruz:
And if you're paying unnecessary fees in your portfolio, we want to knock those out. Why wouldn't you? Why wouldn't you want to help salvage your IRA or for one K, especially during this time? Give us a call. We'd love to again go over all this with you. Education is what I stress when I sit down with you. You're never going to have to worry about me coming to you, looking at something and right then and there saying, Here's what I think we should do. I want you to receive materials that you can read, understand, make better sense of it. There's no pressure here. We just want to do the right thing. So give us a call. 3862285769, and we'll help you get started. With no pressure, no obligation.

MattMclure:
Yeah. And the point about, you know, just wanting to do the right thing for each individual person is very, very important because everybody's situation is different. And that's why it's important to get that full retirement plan consultation once again. It's absolutely free. And as Ed just said, the number to call is 3862285769. Or you can go to the website which is my prosperity team dot com.

Producer:
It's time for this week's problem solver.

MattMclure:
Yes. The dramatic introduction, which signals it is time to give you a little bit of a story about how we've helped some recent clients here. And these are folks who were hardworking savers but not really effective investors at all. They weren't weren't really concerned with looking at at income and they were wanting to get that big nest egg number like we were talking about sort of saving up for that. And they've been doing a pretty good job. This is this is Mark and Linda. They've actually been doing a really good job at 1.15 million in total retirement savings. They're business owners. They operate a tennis training center. And here's the catch with that. Right as they get on in their years, it becomes more, more and more difficult to run a business like that. Right. Because you're dealing with a lot of athleticism and things like that. You really have to be able to keep up with, you know. And so Mark now needs hip surgery. Linda needs knee surgery. So they want to get out of running that business. They want to be able to retire. And throughout their working years, they really did save consistently.

MattMclure:
But without much of a plan going forward in mind, they've been risk averse and their portfolio has lost too much value this year. Obviously, I think a lot of people have, if they've been, you know, very sort of passive in their investing, they just sort of put put some investments in there, bought some shares and kind of let it sit. Right. They did not know that there are some not in the market options to help protect and grow their money. And so here's what it boils down to that get expensive about $5,000 a month. Their combined Social Security benefit is going to pay them 4000. But of course, they'll lose about half of that when one of them passes away. Right. And they want to enjoy retirement. They want to travel while they're still able to do that and enjoy a better lifestyle in the process. So that's the problem. They've been good savers, as we say, but they just haven't really had much of a plan in place. So what was the solution here for Mark and Linda?

Edwin Cruz:
And I will say it's a good point. You brought up that they received 4000 Social Security, and that's one of the key questions that I ask people as a couple when one of you two are gone, and that Social Security, that one part of Social Security is gone, how do you replace that? And they look at each other sometimes and they say, you know something we've never really thought about and I hear that far more than you would think. I would say 80, 85% of times. That's what I hear. So not many people think about that. But when we implement a smart risk plan that includes a bond replacement strategy that eliminates fees on their bonds and establishes an income that they can never outlive, that's really part of the strategy right now. Let's take let's take from that huge portfolio, 50% put it into fixed indexed annuities. That's the part that they had in bonds, Right? We're not we're not going to do anything else. And then let's take the other 40% and let them let them handle that with their advisor. And, you know, there are times where, you know, my clients want more protection than when I tell them, well, here's here's what I would suggest. And they said, well, why don't we do more? Because I really don't want to be that much at risk anymore.

Edwin Cruz:
And that's where we follow the rule of 100. Right. So with with this couple here and without talking about ages here, but let's say they were 65, maybe they only want to have 35% at risk and 65% more into into safety. That's that's that's the way that we're able to to manage and mitigate the risk that these these folks are taking. So also, keep in mind that we don't make money on rebalancing, but brokers will charge you fees in some cases some high fees. So be careful when it comes to rebalancing your investments. Obviously, it's you know, it's I can't advise you on that, but I will make you aware of these things and we can always look over we have additional resources that we can if you have questions on certain securities, we can go back and ask someone that is securities licensed so that they can so that they can look this over and maybe write right up a little report on on what they feel, what they see, maybe even have you speak with them. So again, we have so many resources to help you and to help people with with these types of solutions. So, again, give us a call so that we can help you get through these complicated sometimes and sometimes confusing situations.

MattMclure:
Yeah, life gets complicated and your finances can get complicated and it can be a complicated thing. To to save for retirement to. To put money in a in a vehicle like a fixed indexed annuity or some other type of, you know, maybe indexed universal life or many of the other types of solutions that we talk about here. It can be confusing for folks to try and go it alone, especially. So that's why you need an expert to really, really help you out. Folks, if you're, say, someone like a mark or Linda, if you're that couple. Right. And you and you've lost more than, say, 25% in the market this year like a lot of people have. You really do need to seek professional help. You know, if you go through another year like this, you'll be left with half of what you had before. And then it's going to take, as I said, you know, if you regain 50% of what you're left with. Well, no, you're not back to where you started from after you've lost 50%, gained 50%. Well, that's only 75% of where you were previously. So you really need to seek some professional advice and help. And that is what Edwin Cruz is here for, My Prosperity. Time.com is the website to go to. That's my prosperity team. Or you can give them a call. 3862285769.

Producer:
Come on down as we test your financial knowledge in right or wrong.

MattMclure:
Yes, it is. Once again, that time of the show where I present Edwin Cruz, who is of course our expert, because, you know, he's been doing this a long time. He knows he knows these things. I present him with some statements and he tells me if those statements are right or if they are wrong at home or in the car, wherever you happen to be listening to prosperity principles today. Play along with us. See how much you know as well. All right. So here is statement number one. It is too expensive to work with a financial professional and you will be better off managing your money on your own. I have a feeling if that one's going to be right or if that one's going to be wrong and.

Edwin Cruz:
Yeah. You know, I mean, I obviously, I disagree with that. That's wrong, you know? Financial advisors and professionals help you save and keep more of your hard earned money. You know, if you're making mistakes, you know, you could have avoided that mistake. That mistake could be a 5000, 10,000, 20,000 mistake. Obviously, you know, for the for for a small fee that some of these advisors will charge you, that you might find it to be a high fee, it would still be well worth it. Right. It's important to work with a licensed professional that can that can help the spouse and family in case the family member who is doing the financial planning passes away. And how many times do I run into the the spouses that say, well, yeah, my my husband or my wife used to do this. And, you know, I just always kept chugging along. And now that they're gone, I don't know what to do. So for that reason, we offer a complimentary consultation on the front end and we provide what's called results in advance planning. And, you know, that's that's the way you want to handle this. If you think you're better off doing it by yourself and you're never getting a second opinion, you're bound to make mistakes. And I think about it if if your money is is second to your health and when it comes to health, you get a second opinion. Why wouldn't you do that with your money?

MattMclure:
That's right. If you're going in and you know, one doctor says, oh, you've got to have this surgery done and you need this, you need that, go get a second opinion. A lot of people do. And it, you know, can turn out you can confirm that what that plan is, is the plan for you. Or they can say, no, you know, you've got these alternatives and these might actually be better for your particular situation. So, yeah, you're absolutely right. The same is true for your money as well. All right. So that one number one statement, number one is wrong In right or wrong, let's see how we do on number two. Here it is. If your employer does not offer a pension plan, there is no other way for you to create a personal income stream that you can never outlive right or wrong at.

Edwin Cruz:
Yeah, that's also wrong and just doesn't apply to individuals for small businesses. Annuities will allow you to protect and grow your wealth and establish an income stream that you can never outlive. And again, I've been able to do this for four small businesses, create these these pension plans for their employees. So if you're out there, you're a small business and and you're looking for ideas on how to retain maybe some of your employees, we can help you do that. So give us a call. Yeah, but to go further. Fixed indexed annuities are tied to the stock market, allowing you to to to get market like gains without market risk. And and your principal is 100% protected, meaning the worst that you can do in a year is 0% growth. So that's not too bad.

MattMclure:
Yeah, it's not I was going to say that, you know, finding a pension, an employer who offers a pension, I say that's often I think is like finding a unicorn these days because it just doesn't really happen that often. But yeah, but people don't know. Yeah, you can create that for yourself and you really, really can with a, you know, a fixed indexed annuity and, you know, a similar, similar vehicles, it's very, you know, it's a thing that's there and that's existed for a while that people just for some reason, I guess because the word annuity has become a bad word in some circles because of some creative marketing for people who are trying to knock them down. But yeah, I mean, it's something that's out there and as you say, the worst that you can do in a year, 0% growth. And that means that a lot of times if you were to look at a chart of the growth like a fixed indexed annuity, a lot of times it'll look like stair steps, right? It'll you'll get a jump one year and maybe it'll stay flat if the market went down. But look at the other chart, and that's the stock market and that's it's all over the place. It's all over the place. The the fixed index annuity chart would only be going up. It would never be going back down. It would either be going up or staying the same. So that's something that I think people really need to keep in mind, that they can really create their own personal pension.

Edwin Cruz:
And I'll add to that, we do have charts that show the market and fixed index annuities side by side and conservative numbers. Nothing that's crazy. And I think that would give you a very good understanding of how a fixed indexed annuity is beneficial when it comes to your savings and at times of income.

MattMclure:
Yeah, and you keep in mind too, you know, they've fixed index annuities have lost nothing this year, lost absolutely nothing while the stock market and people who have had, you know, investments in the stock market have lost 20 to 25% a lot of the time. So that is just really something to keep in mind as a safe way to invest for your future. All right. So as we continue on here with right or wrong, number three, you will not learn much in a first appointment with a financial professional. Is that one right or is that wrong? Add.

Edwin Cruz:
You know, I hate to answer this one because it could be right at times. You know, I'll sit down with people and they'll say to me, with everything that we've gone over, why have I never heard this before? So again, you could get a heck of an education if you sit down with the right person. If you don't sit down with the right person, you may not get that education. But I will say for the most part, somebody or most people pick up something from from someone. Right. So, you know, once we have your financial statements, we can show you the risk that you're taking, the fees that you're paying, the correlation of your assets. You know, I see far too many times, you know, people will have they'll use two or three different brokers because they want to be better diversified. But when we sit down and actually go over this stuff, a global most global assets or global assets, right, they're almost all into the same thing when you dig deep down inside, if you get an S&P 500 index from this company or that company, they're pretty much going to work the same. So how diversified are you? But most people wouldn't know that they they have different names, so they think it's something different. But again, the education you'll get from this, I think, is second to none. And again, we have a book that will explain a lot to you. We have other handouts, other resources that we can put get out to you. And again, the more education you get, the more you'll realize that you've been doing the same thing over and over, expecting a different result. But it really doesn't work that way. It's about education and we feel that all of you listening out there deserve to know as much as as possible. You deserve to know how much you're paying in fees. You deserve a retirement that you've worked hard for. So give us a call and let us help you with these. First of all, with this education and with these with these issues.

MattMclure:
Yeah, absolutely. So. And once again, folks, the website is my prosperity team and 3862285769 is the number. All right well one more to go here in right or wrong. Edit And this is kind of more of an informational thing because we are talking about fees here. And so the last statement is maybe this one will be right. Who knows? I haven't been doing very well and I'm over three so far. See if I can finish the day at 250 batting average here. But so here we go. From a fee perspective, ETFs, which are exchange traded funds, are far superior products compared to mutual funds, and that's from a fee perspective. Now, is that right or wrong?

Edwin Cruz:
From a B perspective, I would I would definitely agree. Know, you have no load mutual funds and things like that, but you actually have to look inside of that prepackaged mutual fund to see when they say no load, what are the fees? All financial products have fees, but some of them are just excessively fee. And I do buy ETFs personally and mutual funds in some cases. But from a fee perspective, there's no doubt that ETFs are more efficient. There's there are no 12 v one fees and and offer the same level of diversification. Etfs can be traded within a day, while mutual funds must be traded between trading days. That's why you'll you'll notice that when you go to sell something off, it's going to sell at the end of the day, right? So again, yeah, ETFs. I would say if if you don't know what they are, read up on it and and gain a little knowledge.

MattMclure:
Yeah that's right And again that's what the show is all about And we want to share knowledge with our listeners here at and we want to be able to also share a good resource with them. You mentioned it a few minutes ago, it's the book annuity 360 and talk about learning, talk about education. It's a great, great resource for people who might not know about annuities. They might have heard as as I mentioned a few minutes ago, that creative marketing that gives annuities a bad name, that that, you know, that paints them in a bad light. But it could be that they are the the just right vehicle for some people, for a lot of people to save and protect their money in their retirement and to get that income stream that you're talking about. Tell the folks a little bit about annuity 360 that book and how they can take advantage of an offer to get a copy of that book for absolutely nothing.

Edwin Cruz:
Well, the annuity 360 book is going to cover all the basics, right? How how this provides you with safety. If you're looking for some tax deferral because you'd like a little bit of a tax break before you before you settle in and retire. We can show you that if you're looking for tax free opportunities, it's in the book. You know, the the the ways that we can avoid probate. There are many things that annuities can help you with. So the annuity 360 book is, again, just going back to that theme that we have going. It will provide you the education that you need to make a great decision, I believe. And we're not here to bash securities in any way, shape or form, but we're here to tell you that you should de-risk. Number one. And number two, once you receive information, you'll see how useful it is to have a tool that provides you with guaranteed income. And that's the last great point about the annuity 360 book. You know, if you think about it, what other investment do you have that provides you with a guaranteed income? And so if you want to know this and a whole lot more, call us. We'd love to get a book in your hands. 3862285769. That's 3862285769.

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

MattMclure:
So, of course, we spend a lot of time here on the show talking about inflation because it's such a thing. And as a result, we like to give our listeners, you all listening to us right now the advice, the tools that you need to be able to to kind of make it in this world these days. And so through our cost cutter segment here is it's one of the ways that we like to do that. And this has to do with something that we talked about a little bit earlier, health care expenses. We sort of teed it up early on in the show because we are in the middle of the annual enrollment period for Medicare right now. Just about smack dab in the middle of it. Got just about a month to go here for people to look at their Medicare coverage for 2023. So talk about this and lay out the the sort of problem that is out there right now with the high cost of health care, the size and scope of it, and how people can save some money.

Edwin Cruz:
Yeah. I mean, the first thing to remember is that the the I think it's the US census or one of these or triple A, they mentioned 20% of our population in the US will be 65 or older by the year 2030. Right. And so you know do do people realize out there that there are 10,000, 10,000 baby boomers that are retiring every day and it's going to continue through 2032? When you think about that number in itself, that's staggering. And health care expenses are a major budget item for retirees in America today between prescriptions, common procedures and potential long term care expenses. A couple retiring in 2022 may need to spend upwards of 315,000 on health care in retirement. You know. They also say that beyond the year of 2030, 75% of health care spending is going to go towards chronic care. So, you know, you better have a plan in place. Or if not, this could be one of one of the big risk, you know, that may bankrupt you in retirement. So we don't want that to happen to you, but we have the information to help you. Right. So, again, give us a call if you if you don't review your Medicare plan every 2 to 3 years, you could be losing money.

Edwin Cruz:
You know, these benefits are constantly changing. The plans are evolving. So you should know, don't be afraid to speak to someone. You could even get literature sent to you and you could read it for yourself. But get the information. Educate yourself. By re-evaluating new options. Each year, you will likely find that you can save money on your Medicare expenses. You know, some people do a medicare coverage check every year just in case there's an opportunity to save some extra cash. And I do have a team member and that person reviews Medicare with my parents pretty much on an annual basis. We go over what's new, what's different from what they have, Is there a cost difference, Whatever it may be, we, we, we explore those options. So you should take advantage of that to. And so again, again, I can't stress it enough. You know, health care issues are a big deal and they do definitely make a change in retirement negatively or positively. It's up to you to make that difference.

MattMclure:
Yeah, it's absolutely right. And you know, one thing that people I don't think necessarily realize as they age and get, you know, maybe have the aches and the pains kind of start, you know, and health isn't quite what it used to be that a lot of people and I don't have the statistic off the top of my head, but a lot of people will end up needing some sort of long term care in their later years as well. And it's important to note that Medicare, yeah, it will pay for a hospital stay. Absolutely. It will pay for that kind of shorter term care. But as far as long term care, if you have to go into a nursing home or any other type of long term care facility, that is not going to be covered under Medicare. Right. Ed? I mean, I'm sure you run into that all the time where people don't necessarily realize that.

Edwin Cruz:
No. You know, some people say, well, doesn't Medicare cover long term care? And I tell them, absolutely not. Medicare will only cover short term care. And again, the more you review these these Medicare options, the more you will hear what's covered. You know, especially when it comes to the the issue of short term or long term care. It will it will get cemented in your head if you're constantly doing these reviews. And that's why they're so important, because there are so many moving parts to this that if you're not constantly being updated on them or at least go over these year after year, at least every other year, you're not going to remember all these things. And, you know, as we get older, let's just face it, we forget a little more and a little more. So it's important to get re-educated on this and it's going to be helpful, trust me, in the long run.

MattMclure:
Yeah, 100%. Well, that is, of course, a look there at some ways that you can save money in Medicare. And what we're talking about, long term care. You know, as we said, Medicare is not going to pay for that when you need it. Right. So how do you sort of solve that problem where there are some states in the country that are trying to solve that problem and we want to sort of revisit this topic and talk about it here on the show once again, because it could mean if more states start adopting, adopting this, that either, you know, if you're a full time resident here in Florida, it could happen here eventually. But if you live up north, it's something that is much more of a real thing for you. And that is a long term care payroll tax that'll be automatically deducted from from the paycheck and will go toward a state sort of long term care insurance program. And they're starting this right at in Washington state already has it. But then they have Pennsylvania is working on it and also in New York. Right. So this is something that could affect all of our snowbirds here.

Edwin Cruz:
That's right. You know, California, Oregon. And it's just going to continue. It's not going to stop. You know, once once the governments of each individual state start seeing it, there's a fund being built up for this. It's going to help against the the Medicaid fund. Why wouldn't other states continue to adopt this? So I think getting ahead of it is the right thing, because the coverage that the state provides, by the way, is only going to cover a fraction of what you truly need. So not only are they taxing you, you're not really going to get a true long term benefit from this. And then then they go after your assets. So why not jump out ahead of it? You may not need it, but if you do, you may be able to. Let's take, for example, make a make an investment that will cover you for 2 to 3 times that amount. Know why not do that? The the amount that you're going to pay towards taxes again is only going to cover a fraction of what you truly need.

MattMclure:
Yeah, and that is very true. Let's take a listen, actually to this piece that I put together on that very issue. Just to get a little bit more into the details, I actually spoke with a law professor from the University of Pennsylvania about it. So let's take a listen to that and we'll continue on with more of prosperity principles in just a sec. Right here on the other side, a new payroll tax could be coming to your state. I'm Matt McClure with a retirement radio network powered by Emera life.

Intermission:
We have seen a failure as a country to provide comprehensive insurance for long term care.

MattMclure:
America has a long term care problem, KNPR reports. 70% of people who turn 65 will need some type of long term care, ranging from in-home care to a full time nursing home facility. And the costs can be astronomical. A Genworth study in 2021 found the median cost for home health was more than $61,000 a year. If you want a private room in a nursing home, the median cost there more than $108,000 annually. And Medicare won't cover the costs.

Intermission:
Medicare pays for short term post-acute care if somebody's been hospitalized or has other kind of short term medical needs. It doesn't pay for the kinds of things that we think about as long term care.

MattMclure:
Alison Hoffman is a professor of law and deputy Dean at the University of Pennsylvania Kerry School of Law. She tells me relatively few people in this country have long term care insurance. Washington State was the first in the nation to try to bridge that gap.

Intermission:
And what Washington state has done is it's done a payroll tax point five, 8%, that is for all W-2 workers or full time workers that comes out of their payroll. And then so long as they pay in for a certain number of years, when they have a benefit that they can use for long term care up to a certain amount.

MattMclure:
But it's not a cure all for the problem.

Intermission:
It is a little patch. I think the total benefits in Washington state are 36,000 and they increase with inflation over time. The cost of a nursing home in most states is three times that over the course of a year. What it is, is the states trying to come up with a tool to fill in some of some of the gaps.

MattMclure:
Now, states like Pennsylvania, New York and California are looking to Washington's plan to implement their own solutions. Professor Hoffman says taxpayers can opt out of the payroll tax in some cases, such as those who have their own private long term care insurance.

Intermission:
So why would somebody want to opt out? Well, somebody might want to opt out because they're already contributing dollars towards towards long term care. And they think that that's sufficient. That's enough. But people also might opt out because they don't value it as a form of insurance.

MattMclure:
So could a program like this be coming to your state? If so, how could it affect your wallet? And what about your own long term care plans for your later years? Those are all important questions to consider as time continues to tick on by with the Retirement Radio Network Powered by Emera Life. I'm Matt McClure. So there you go. And you have a bit of a different or a more more of an in-depth look at what we were just talking about with long term care there. And I you say people don't really realize that, that it's something that Medicare will not even not even touch. But, you know, good to know that states are trying to take some proactive measures here to really kind of tackle the issue. But as the the legal professor there said, it's really more of a Band-Aid in a situation where we need a tourniquet, you know?

Edwin Cruz:
That's right. And when you speak about a Band-Aid and we talk about the issues of the losses of your assets, just think about this again. One out of every five is going to is going to be in the in our population that are going to be over the age of 65. It's projected that about 70% of of all Americans are going to need some type of nursing care of some sort. This could affect about 45% of the household wealth. That's a big number. And why? Because it's not just the amount of people that are getting to the the this age, but it's the number of people that are going to live all the way up into our nineties and even touch hundreds. Right. We're living longer. Like I said earlier, the the longevity risk. Well, that longevity risk doesn't just affect your personal assets. It's going to affect this part and that's your health care. And that health care can be far more expensive than actually the losses that may occur in the stock market. So again, when we look at the risk factor, we're looking at some substantial risk in America going forward. And so we better start preparing for it.

MattMclure:
That's right. Got to be prepared for each and every possible scenario is like hope for the best, prepare for the worst. Right? It's that kind of situation and you do have to be prepared for it. And it's something that affects a lot of people because, you know, every day through the year 2032, the stats show 10,000 baby boomers will be retiring each and every day, 10,000. That is a huge number.

Edwin Cruz:
And and it's not just what it costs today. Let's remember that these these cost are projected to grow by about 5.8% per year. And so, you know, for as expensive as it is today, if we think back five, ten, 15, 20 years ago, what these health care costs were and what they are today, imagine what they're going to be in another ten, 15, 20 years. So, again, it's just something that we should all be concerned about. And, you know, this is just one area that we can lose our money. Right. And then we could go back and say, you know, what do we see right now? You know, if you see that the that that this may happen to you, what are you going to do? How are you going to move your money? How are you going to position yourself to better yourself? Well, the same thing with the markets, right? A lot of people have already seen that. They've lost 15, 20, 25%. They've moved their assets into cash. And so if you've done that, you need to talk to us not just for the health care reasons, but for the market reasons. You know, there are better ways to protect and grow your wealth. And we cannot we can we can offer not in the market investing solutions where your principal is 100% protected. And again, we could do this not just for market returns, but we could also help protect your health care and the returns that you may or may not get from that. So, you know, there are many things that we need to do to prepare. Just start thinking about these things, but we're here to help you. You can always call us 386228576, nine. And we're standing by.

MattMclure:
That's right. And it's, you know, something where no matter your situation, everybody really eventually is going to need some sort of help. I mean, if you're in a scenario where maybe you're the primary breadwinner of the household and you're not terrible with money, but you don't really know where to start with a financial plan for retirement or for the future, or to leave a legacy for the next generation of your family. That's another reason to reach out to Edwin Cruz and all the folks that he works with there. My Prosperity team is the website. It's my prosperity team. And once again the number is 3862285769. It's this week in history. So it was a big day this week in history. And, you know, we just went through an election Day, as we talked about here at the top of the show. There was a big election day, though, back on November 6th, 1984. It was a big landslide.

Edwin Cruz:
Yes, it was. And on this date back in 1984 or this week, I should say, back in 84, US President Ronald Reagan won his re-election bid in a landslide victory over Democratic challenger Walter Mondale. President Reagan won 525 electoral votes and 58.8% of the popular vote. No candidate in US history has matched Reagan's electoral vote in a single election. To think that he only missed perfection by ten electoral votes is pretty amazing.

MattMclure:
It really is. I mean, that was and Mondale lost every state except for his home state of Minnesota. So that's that just shows shows to go. Yeah. As to to quote Daffy Duck, I think it was the first person who I ever heard say that chose to go you. He really only won, you know, his home state of of Minnesota there. But it shows the great strength of Reagan in 1984 and his candidacy for re-election. Of course, Mondale also did win the three electoral votes, actually from the from District of Columbia. So it was 13 that he got. But when you're you know, there were 13 electoral votes and your opponent has 525 electoral votes, I think we can officially declare that a landslide, a walloping, as we would say.

Edwin Cruz:
Yeah, he got he got hit not with a rubber mallet, but with a sledgehammer.

MattMclure:
That's right. Absolutely. A big one. All right. Well, that's a look at this Week in History and, well, Prosperity principles for this week is pretty much history as well. Folks, reach out at My Prosperity Time.com. A free consultation about your finances and your retirement planning can be yours by giving the website a visit there. Once again, it's My Prosperity Time.com editor. I've enjoyed it, sir, and I hope we'll do it again next time around.

Edwin Cruz:
Thank you very much. And for our audience out there listening, if you're losing sleep at night, please give us a call.

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 38862285769. That's 3862285769.

MattMclure:
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 merrill 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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