People spend so much time and effort thinking about how to save more money for retirement, but they don’t consider what happens once they actually stop working. This week, Ed offers some great tools and strategies for generating retirement income that you can never outlive.

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market update
cost cutter
inflation demonstration

11.11.22: Audio automatically transcribed by Sonix

11.11.22: 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 set for a full hour of financial information and economic news affecting your bottom line. Ed wants you to reach the financial freedom you've worked so hard for. So now let's start the show. Here's Ed Cruz.

Ed Cruz:
Welcome back to another Week of Prosperity Principles. I'm Edwin Cruz and I want to welcome all of our audience out there. It's listening. And the question of the day or I will say the topic of the day is the accumulation phase and how to manage the most overlooked part of your retirement planning. And with that, I'll tie in the Question of the day, and that is that do you think that you can really recover from major losses even when you're taking money out to live off of and pay your brokers high fees? That's a that's a dilemma that a lot of seniors face. A lot of questions come with that. We definitely have answer solutions and we're going to get to it. And with all that, I want to welcome in Matt McClure. Good day to you.

Producer:
Hey there, Ed, How are you on this great, great Florida day?

Ed Cruz:
It's you know, business has has continued to stay strong as as we see that these markets are failing, inflation is high. So, you know, I thank everyone that's out there listening and and trusting in what we do. And so with that said, we just want to continue helping people.

Producer:
Yeah. And that's the purpose of the show, too, right? I mean, it's it's all about education, letting people know what their options are and letting them know that there is help available out there. And a lot of great stuff coming up here on the show today. We're going to talk a lot about that, about about planning for the future, about the D cumulation phase, which, as you said, is it's overlooked. Right. It's one of those things that people de accumulation. It's like, okay, I know if you think about the opposite of it, right, it's accumulation. Well, D accumulation is obviously the opposite of accumulation. So we'll go through a lot of that in just a bit. We'll also have an inflation demonstration coming up with some food price updates ahead of Thanksgiving. And then we'll do our quote of the week a little bit later on in the show. We'll have a cost cutter. So a lot of stuff to get to as well. And we do so much. Thank you. Whether you're in the car, whether you're at home, wherever you might be. Thank you so, so much for joining us here for Prosperity principles. I am as Ed Set Matt McClure here alongside Edwin Cruz, who is our host, and the website is My Prosperity Team Time.com. That's my prosperity team dot com. And you can also give it a call at 386 228 5769386 228 5769. And also, you know, by the way, if you catch maybe just part of the show, if you if you're if you're on a schedule or something, you got somewhere to be and you can't catch the whole thing. Well, you can catch all of our episodes actually online and wherever you listen to your podcasts also. So once again, the website My Prosperity Team dot com. All right. So, Ed, to start off here, we've got a couple of important reminders for our listeners. The first is that Medicare annual enrollment period which continues.

Ed Cruz:
That's right. We only have weeks left in the open enrollment. So if you need some help with with your Medicare needs, please give us a call and let us guide you through that. I know it can be confusing. There's a lot of options. So trust in us to guide you in the right direction. Let us know how we can help you. Don't hesitate to give us a call. And of course, we have the the big issue, and we've brought it up a couple of times here about long term care and some of the mandates that are coming out. And so, again, if you need our help, this is especially important for people that are from out of state, the northeast, these mandates are coming. The state, what they provide is not going to be enough to cover. And so I think we have a little piece for them, right, Matt?

Producer:
We do. We do. Let's take a listen to this and we'll tell you a little bit more about what we're talking about here and we'll talk about it on the other side.

Producer:
A new payroll tax could be coming to your state. I'm Matt McClure with the Retirement Dot Radio Network. Powered by AmeriLife.

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

Producer:
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 gen worth 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.

Alison Hoffman:
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.

Producer:
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.

Alison Hoffman:
And what Washington state has done is it's done a payroll tax point, 58%, that is for all W-2 workers or full time workers that comes out of the 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.

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

Alison Hoffman:
It is a little patch. I think the total benefits in Washington state are 36,000 and they increase with inflation over time. But the cost of a nursing home in most states is three times that four 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.

Producer:
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.

Alison Hoffman:
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.

Producer:
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 dot radio network powered by AmeriLife, I'm Matt McClure.

Producer:
Money. It comes in handy now and in the future. That's why we're covering both. You're listening to Prosperity Principles with Ed Cruz.

Producer:
So yeah, that is a look at the long term care sort of issue that's going on in those. As you see the mandates in some north, northeastern and western states as well, really trying to roll those out and, you know, all for for a good purpose to to, you know, provide some long term care. But as the professor said there that I spoke to, it's really kind of just a Band-Aid on the situation. It's not something that's going because, you know, Medicare is not going to cover your long term care. These are only going to put, you know, a drop in the bucket of what you might possibly need.

Ed Cruz:
Right. And, you know, our seniors control, they say about $17 Trillion of Wealth in this country. And there are so many forces today, so many factors that just take away from from that wealth and this long term care issue. Again, we're expecting to see the population grow when it comes to seniors. And with that and longevity, we're going to see more more spending in this area of long term care. And the question is how much of that $17 trillion are seniors going to give away? And so we want to be proactive and in telling them and and thanks for all the collaboration with with the with the people that we have in our resource bucket there to to keep us abreast of all the different situations. Right. It's not happening here in Florida, but it's going to affect people that visit Florida. So we want to get out there and spread this information.

Producer:
Yeah, part the part time residents of the state, the snowbirds that come in about this time of the year and stay for several months at a time, it will affect them, especially those, you know, their residency a lot of times is up north. And so we want to just educate them about what's happening and let them know, of course, that the resources are there to be able to help out. And of course, folks, when you go a couple of things, when you go to my prosperity team, the website or when you give a call to 386285769, of course you can ask about the Medicare annual enrollment period if you need help with your Medicare needs. That's a great thing to ask about. As we've been saying, these long term care plans, that's another great thing to ask about. But also, you know, your retirement as a whole, you know, we give a free, comprehensive consultation, absolutely no cost to listeners of the show, no obligation as well. Talk about that and exactly what that entails for our listeners.

Ed Cruz:
Yeah, absolutely. You know, when when we sit there and get together with you, we want to provide you with a comprehensive, comprehensive consultation at no cost. And we want to make sure that you're comfortable, right. Only work with us if you feel that it's better for you. We want to analyze any specific and unique financial situation that you're involved in. We've seen it all from from rights to mutual. Farms and stocks and and you name it. There's all types of investments out there. And the latest craze, obviously, is is crypto. And and I've seen some clients lose some some considerable amount of assets in crypto. So let us take a look at all this. Let us discover how much you're paying and fees. Let us help you. Unnecessary costs that are inside of your IRA or any other retirement plan that you have. Just get in touch with us. You know, let's talk about what your what your goals truly are, because, again, as we said from the get go, we look at what we're accumulating. We. But we never think about when that payout time comes. What are the situations that we're going to run into. And and as I've explained in the past, if you take a look at $1,000,000 account and you can cut this in half or quarter, it doesn't matter the number for. For easy number six when we talk about the 4% rule in securities, if you have $1,000,000 and you're taking out 35 40,000 to. To live on, we never make adjustments when the when the markets go down. But if we set up the right plan, you know, the bottom line is, you know we can we can look at five 6% in income and make sure that we have cost of living increases. So, you know, when when we speak about what we do and how we do it, it is unique. It is different. And and that's what we want to show you.

Producer:
That's right. And if you are interested in finding out any of those things, you can give a call to 386 228 5769. That's 386285769. Or go online to my prosperity team dot com.

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

Producer:
Gobble, gobble. Yeah, that's the that's the sound of food prices gobbling up your Thanksgiving budget this year. And that's the subject of our inflation demonstration this week. And it's a it's a big problem. I was actually pretty staggered by some of these these numbers.

Ed Cruz:
It's a big problem. I mean, we recently talked about a Fox News poll that revealed 93% of registered voters are extremely concerned about inflation and higher prices, while 52% or just a little over half said they have changed their their travel plans because of gas prices. So this continues to be a problem. And of course, in September, the American Farm Bureau Federation announced that families can expect to pay record high prices at the grocery store for Turkey. We've already experienced high prices on everything else, Right. I just I just went to the supermarket and, you know, just when you think you're being conservative and everything that you're picking out, you get to the register. And I remember it was it was around $180. I'm saying, jeez, I was I was I was just nit picking here. And it's just incredible what's going on. You know, everything is up. You know, the retail prices for fresh, boneless, skinless breast turkey reached a record high of $6.70 a pound in September. That's 112% higher than the same time in 2021, when prices were $3.16 per pound. So when we think about that, that's quite substantial. You know, we think about all the things that we use during the holidays. Right. Plenty of butter and margarine. Well, that's up 32%. Flour and prepared flour mixes. That's up an additional 24%. Any frozen refrigerated bakery products, pies, tarts, turnovers, that's up 20%. Canned fruits, 18 and one half percent, frozen vegetables, 16 and one half percent, and uncooked poultry, including Turkey, up 17%. So, I mean, it seems like we just can't escape this at this point. It's here to stay for a little while longer and we're just going to continue to pay more for our food. You know, the consumer Price index changed from a year earlier for select food groups. We're looking at milk being up over 15%, bread being up close to 15%, rice 13 and one half percent. Fresh fruits, 8.2%. Meats, poultry, fish, eggs, 9%. So, you know, where do we go to to save when it comes to groceries? I can't give you an answer. I've tried and and I haven't been successful at it.

Producer:
Yeah, you know me either I used to or we used to see those shows on TV about the, like, extreme coupon clippers, you know, the people who would, like, basically go to the grocery store and they would they'd have all the coupons. And so they would like they would they would go and buy something, you know, like thousands of dollars worth of groceries and pay like 20 bucks or something, you know, with all the coupons and with the doubling up of the coupons and all this. And I'm like, I need to I need to find some of those people at this point because, yeah, you're you're right. Going to the grocery store, it's sticker shock.

Ed Cruz:
Absolutely is. And by the way, where are those people today? I haven't seen that show in a long time. Forgot about that. And I know my cousin used to do quite a bit of that. And it's it's it's a hard thing to do for for anyone that thinks it's just clipping coupons, it's easy to do. There's so much coordination that goes into it. You know, I never I never gave it a shot. But yeah, I mean, I'd love to see a way where I can I can cut that ticket down 20, 30, 40%.

Producer:
So, yeah, it sounds pretty good about right now. Well, and a lot of those people, you know, they buy so much at a time. A lot of the time they probably just have a pantry full of stuff that they've bought that they bought years ago. So they don't need to go back to the grocery store for probably another couple of years. They buy so much so they could probably open their own store and and, you know, make make a little money on the side there. But yeah, so that's a look our inflation demonstration paying more for your Thanksgiving meal this year and I actually it was funny Ed because I well funny and sad at the same time I heard and I don't remember the what economist it was off the top of my head, but I heard a report about an economist saying the other day that it could actually be for a lot of people cheaper to go out to eat this year for Thanksgiving than to make your meal at home, especially if you do something like a you know, like an all you can eat buffet, kind of a place, that kind of thing that could actually be cheaper for the first time ever than actually preparing your meal at home. So that just shows you how much grocery prices have been affected.

Ed Cruz:
Yeah, you know, but if I if I were to to to make that suggestion in our large family, I think I would I think they'd shoot me because this is the time where everybody says, Hey, we're going to prepare this one dish. We all get together, make a big feast out of it. And I'm telling you, there's there's 40, 50 of us. So it's a large gathering. At times we have up to 70, 80. So yeah, I'd better not bring that idea.

Producer:
Right. Yeah, that's. You would probably not fare well in that, that discussion. Well, there we go. That again. A look at inflation as far as food prices ahead of the Thanksgiving holiday. And now so we're going to move on here to the accumulation phase now. Now, this is kind of the focus of the show today. And a lot of you probably sitting there wherever you are or, you know, standing there or walking or running or whatever you're doing and saying, what in the world is the accumulation phase? Is this guy lost his mind? What's he talking about? So I'm going to let the expert Ed Cruz, tell you about the accumulation phase when it comes to retirement, what it is and how you can manage it. So, Ed, take it away.

Ed Cruz:
We'll do so. The accumulation is the process you go to or go through during retirement where you shift your focus from saving. Right. That big bucket of money that we've talked about in the past to using your assets to generate necessary income. And if you think about it, as we as we work throughout our years, we kind of spend according to to what we make. Right. And hopefully as you're receiving those races raises, part of that is going towards your savings for retirement. And but that's the way it's going to be and in retirement as well. Right. Depending on our income is the way that we can spend. So hopefully you're doing a good job of accumulating now because the accumulation is coming. Now, that may not be a concern for that one Powerball winner or the group whoever want to out in California. But but for most of us, that's that's going to be part of the issue. So let's remember that there's going to be a soaring number of baby boomers entering and approaching retirement. And it's leading to a major shift in focus from accumulation and retirement savings to cumulation and retirement income. And the problem is that that most people are approaching retirement today, are uncertain how they will manage their retirement assets and generate consistent income without outliving their money, which is the number one fear for most retirees. And just like I said a little while ago here, most people never think about this. You have this pile of money, you have it in the stock market.

Ed Cruz:
Everything you feel is going great. You know, you're taking out using that 4% rule. You're taking on X amount of dollars. But when you lose 20, 30% of your asset, you know, are you adjusting your income to to stay within that 4% rule? And the answer is that once you get used to a certain income, it's really hard to go backwards. So let's think about strategies that we can that we can consider the things that we can do so that we don't have to worry about that problem. A BlackRock survey found that only 36% of Americans are confident that they will have the income they need in retirement, while 55% are concerned about outliving their savings in retirement. Without thoughtful, trusted guidance and planning, this could have dire consequences for the next generation seeking income to sustain a consistent standard of living. And that's what it's all about, right? Making sure that we have that that income that's generated on a on a on a monthly basis once we're retired, because that's what it comes down to. You're not going to see a weekly paycheck or an every other week paycheck. For retirees today, living longer in a historically low interest rate environment could lead to a gap between what their current savings can generate and the retirement income they need to live. And, you know, in today's day, we see that these rates are jumping up. But let's remember that for the past 20 years, the interest rates were low and some of the mistakes some of the retirees were making was that they wanted that safety.

Ed Cruz:
So whether they keep their money in money markets, in CD's and they were making anywhere from 0.1% to 0.5% and that made some seniors jumpy and it got them to to risk their assets a little more. And so they, they overplayed their hand in the stock market. And now what's happening today, those those people that overextended themselves and didn't follow the rule of 100. And if you need to know what these rules are, give us a call. We'll explain these to you. But if you follow that rule of 100, you'd be in much better shape today versus those that overextended themselves and now see that they've lost 20, 25, 30% and are panicking, not knowing what to do. They don't feel that there is a good solution. So they're kind of hanging there, but they're truly panicking inside. Those are the type of calls that I'm getting now saying, hey, what can we do to correct this problem? I've tried this, I've tried that. Nothing's worked for me. And when we come up with these solutions, they just ask, how come the bank never told us about this? Or how come our broker never told us about that? And it's interesting to know that that you're not going to get the same information to with every advisor that you speak to. So. Get a couple of opinions. Right. Just like a medical need. You get multiple opinions, get different opinions from from different types of advisers that are out there.

Ed Cruz:
Retirement. Retirees need retirement income solutions that can provide spending confidence for both essential spending needs and discretionary wants. And it's important to know your needs versus your wants. And I hear people say, you know, I need this. And I tell them, well, truthfully, when you think about it, you really want that. It's not that you need it. And there is a difference. And I know I used to drive my wife batty about this whenever she'd say she needed something. And I said, Well, you really want that. But it happens to all of us, right? We all say, Yeah, you know, I need this. We get stuck in that in that sort of vocabulary. And but when you put rational thinking to it, you realize that it's more of a want than a need. So. But so we want to, we want to create or have a better understanding of the two, especially for seniors, so that they can enjoy the lifestyle they've worked so hard for all these years. So, you know, it's it can be a lengthy conversation with people. And when we're going through that, that initial phase of getting to know the client and we ask them, you know, you know, all the different questions that we ask and we get down to what they're looking forward in the future, we really discuss these wants because we need to make sure they understand if they can't actually live up to this, we want to be up front about it.

Producer:
Yeah, absolutely. And you know, you're talking about a lot of people being kind of, you know, scared and putting their their money in safe locations that don't really offer a whole heck of a lot of growth. I'm like, you know, with some of those types of accounts, you might as well put your your money under the mattress, you know, and that's that's kind of the situation there. But what what the solution can be is to put that money that you've worked so hard for, put it to work for you, just as hard as you worked for it. Right. And so you know that that's how you can make your accumulation work better for you. So what's kind of the solution for four D accumulation here?

Ed Cruz:
Yeah, well, you know, we look at a lot of different studies. We do our own income planning, right? We have these these systems that will tell us what we can do for our clients. But research from the Stanford Center on Longevity looked at ways that investors can potentially assess and combine a mixture of investments and insurance products against different retirement income goals. They evaluated systematic withdrawal plans for investment portfolios and annuities against the following criteria the amount of income, access of savings pre and post retirement protection, inflation protection, lifetime guarantee. And one of the key findings from their research was that from a purely financial perspective, annuities often provide higher yearly income as compared to systematically withdrawing from investment assets. And remember, when you're doing systematic withdrawals, there's no guarantees there, right? So what are you looking for? Are you looking for that true peace of mind, knowing that regardless of what happens economically, you can count on that income? Or are you willing to take that risk or are you willing to split that risk, whatever it is that you want to do, we'll follow along with you. We don't want to do any arm twisting, but we surely want to give you the appropriate recommendations at least, and let you make the final decision. Yeah, if you're interested in the retirement red zone, that's either within five years of retirement or or you retired in the last five years, please give us a call so that we can test the strength of your plan. And you know, all you have to do is call us 386 228 5769.

Producer:
Yeah. You know, it's football season. Of course, people think the red zone. They think oh you know, you're you're inside the 20 yard line or something. It's sort of Yeah. It's sort of the same thing. It's you know you're you're five years from retirement on either side. So that's sort of the the retirement red zone there we call it. And yeah, if you are on either side of that, that is a great time to give a call to Ed Cruz. And really, you know, it can never be too early. It can can possibly be too late for you. But but no matter what, give Edwin Cruz a call. That number once again, 386 228 5769. The website is my prosperity team dot com.

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

Producer:
Well, this week our words of wisdom come from David Bailey and David Bailey once said, quote, To get rich, you have to make money while you sleep. And that's that's pretty true. And, you know, there are actually ways to do that. People might think, oh, well, what am I if I you know, unless I sleepwalk or something? I don't know if I can make money while I sleep. But no, you can. You can do that. Absolutely.

Ed Cruz:
You know, there are fixed accounts that will provide you with a steady growth. Obviously, the market is another way. I mentioned it earlier, it's funny, but the Powerball is another way.

Producer:
There you go, folks.

Ed Cruz:
But there are different ways for us to invest our assets. Right. A lot of people run to the real estate. And I always say my father had had quite a bit of real estate growing up. And I worked hard on those properties from a young age. But, you know, real estate is another way. But there are risks and challenges to real estate. And, you know, when we see declines in markets, we see that. But absolutely, you want to figure out ways that while you are asleep, you know that you have assets that are that are continuing to grow for you and accumulate.

Producer:
Yeah. Well, there you go. And that's, you know, something that a lot of people, as I sort of alluded to a moment ago, don't even necessarily know that that you can do, but you can you can make money while you are snoozing away. And this is something. So this sort of, you know, goes back to the discussion about accumulation as we continue on with the show here and and really, you know, making money while you sleep, accumulating money while you sleep as well. What would you say, Ed, is kind of the number one mistake that people make when they're planning for retirement. It's probably got something to do with kind of their frame of mind, right.

Ed Cruz:
Yeah, absolutely. You know, too many people believe that retirement is about accumulation and saving enough money to reach that one big magic number. And we've talked about this before. And we recommend that you start focusing more on the strength of of your income plan than the size of your nest egg. Lifestyle is more about income than total assets, which I touched on just a little while ago, looking at that million dollar number. We know that we can provide you an additional easy, I would say an additional 20% in income with the same number. So basically it's a discounted retirement plan and that should make everyone excited to know that there is something out there that will give you more income with the same dollar without putting any of it at risk and and making sure that you have that asset that that will just carry you through. But another big mistake that I see out there is, you know, people get to again, we were talking about those needs and the wants and we see people they save in their four one KS and in their IRAs, and then they reach that point where they say, gosh, I need to do this. And again, it's more of a want. And they go into their retirement plans and they start and they start tinkering and saying, you know, I could use that $5,000 for this, for this need that I have. And again, I've warned a number of clients in the past it hasn't happened often. But I but I tell them the the lasting effects of of going in and messing around with your retirement plans, you know, doing excess withdrawals, that's another big mistake that people make. So it's not it's not just one thing. You know, there are multiple factors, but obviously one of them is just looking at reaching a magic number and thinking that that's going to solve all your problems.

Producer:
Yeah. And obviously, as you say, knowing the needs from the wants and, you know, the odds are the trip to Bora Bora is not necessarily a need for for many people. So unless you just need a lot of a lot of sunshine and get your vitamin D in, you know, that's that's the thing. If you have a vitamin D deficiency, I guess you could use that as your excuse. But chances are it is not a necessary thing. It is not a need. You need shelter, you need clothing, you need food, you need water, you need air to breathe. Those are those are the needs, Right. And so know those from your wants. Now, of course, we've been talking a lot about and you just mentioned that study a moment ago regarding annuities and how they can provide a greater income to folks in in retirement than others according to that that one particular study. Let's actually play a little bit of the book annuity 360 that written by Ford Stokes and that is not only written by Ford Stokes but also read by Ford Stokes here in just a moment, the audio book version of that particular book. We'll also tell you how you can get a free copy of the book coming up here in just a moment. So this is it's a great, great resource to have. We're going to give you a taste of it right now. This is chapter two from the book. It's called Why Annuity and Life Insurance Companies Are Competing for Baby Boomer Dollars.

Ford Stokes:
Chapter two Why Annuity and Life Insurance Companies Are Competing for Baby Boomer dollars. Big idea Annuities counter one of a retiree's biggest fears outliving their wealth. Annuities create lifetime income streams. There are 73.4 million baby boomers in the United States that are close to or are already in their retirement years. Baby boomers put between nine and 10% of their pay towards their retirement. Only 55% of boomers have any money saved for their retirement. More than four in ten boomers inaccurately believe that Medicare will cover long term health care costs. Baby boomers hold $2.6 trillion in buying power. They've had more time to build their wealth in comparison to other generations because some might still be in the workforce and making more money. Baby boomers control 50% of the nation's wealth, outspend younger generations and are more likely to spend their retirement savings on themselves rather than passing them down. Total US retirement assets are about $28 trillion. More than half of those assets were either defined contribution plans or individual retirement accounts. Some other facts about baby boomers and their spending habits. 69% of baby boomers either expect to or are already working past age 65 or don't plan to retire. Only 26% of baby boomers have a backup plan for retirement if they are forced into retirement sooner than expected. Baby boomers make up 46.8% of pet spending. Baby boomers are expected to spend 3.4% more on health related purchases than their parents did. Why are annuity companies targeting baby boomers? Boomers face many issues when planning for retirement.

Ford Stokes:
The three primary reasons are, number one, growing the money they have already saved. Number two, dealing with and preparing for unforeseen expenses, the largest of which are tied to health care and long term care. Number three, optimizing their financial plans when their exact lifespan is unknown. Annuities exist to help boomers with the last issue with an annuity. A retiree gives an insurance company a lump sum of money in exchange for an annual income that will last throughout their lifespan. Annuities have the potential to become useful tools in baby boomers portfolios when planning their retirement. They offer protection from market volatility, while also eliminating the risk of outliving one's retirement savings, which are not guaranteed by portfolios that lean heavily on stocks and bonds. The demand for retirement income amongst baby boomers already exists, and annuities are the only products that can provide a hedge for a long life like longevity insurance. Reasons Baby boomers should be interested in annuities, they are falling short of their retirement goals. Roughly 10,000 baby boomers retire every day, but a very small percentage of them believe they can retire and live comfortably throughout their golden years. Only 25% of baby boomers think they have enough money to retire comfortably. Many couples may be on the right track, but unforeseen circumstances such as health problems or staffing cuts might force them into retirement earlier than planned, leaving a much larger income gap. Baby boomers are looking for a reliable source of retirement income, and annuity companies are beginning to tap into this market because they recognize the need.

Ford Stokes:
Not all annuities are created equal. There are two main types of annuities immediate and deferred. The right kind of annuity depends on your financial goals, your situations and your needs. One thing that makes annuities so attractive is that there are so many options available. While it may seem overwhelming. A financial advisor can help you sort through all of your available options and make a smart choice for your money Security for their income. Annuities can help build a secure retirement through different income strategies, while also alleviating any stress or fear they may have left over from the financial crisis of 2008 and the bear market. Annuities can play an important role in a plan, along with your Social Security, health care and other factors. Annuities can address issues such as maximizing your Social Security benefits, which help create an income that you can never outlive. How annuity and life insurance companies have responded to Baby Boomer needs interest in hybrid products. Baby boomers don't want to pay a fortune for something that offers them only a part of what they need. With less income to be counted in their retirement years, already paying for individual products to meet each of their needs can be too expensive. Life insurance companies heard these concerns and responded with new hybrid products. Many life insurance companies now offer some kind of long term care rider on their whole life or universal life products. Generally speaking, these riders provide coverage for long term care should you need it or you receive a death benefit if you don't.

Ford Stokes:
These combination products have grown from 6 million in 2008 to 2.6 billion with a B in 2013, and they are still growing need for guaranteed income. Baby boomers are also concerned with outliving their money. They want to enjoy their retirement, but they also don't want to run out of funds. The industry responded to these fears by offering a variety of products with guaranteed lifetime income. These products include variable and indexed annuities with guaranteed living benefit riders and immediate or deferred annuities. The annuity industry has been transformed by these new products. According to PricewaterhouseCoopers Employee Financial Wellness Survey, since the economic downturn of 2008, 76% of retirees say that creating a guaranteed income is their top retirement planning priority. Annuity companies rose to the occasion to create products to meet the needs of baby boomers and provide them with a sense of security. The need for advisers. Annuity companies have created many products to meet the needs of their consumers. This is a good thing, but it can make for a tough decision on the part of the investor with so many options to sort through. Some pre-retirees and retirees can't sort through all the information. Many are afraid to make the wrong decision, which leads them to make no decision at all. A large part of the planning process involves an advisor educating their clients on all of their options so they can make the right decision.

Producer:
And that, of course, a look at Annuity 360. Just a little bit of a listen there to chapter two. Why Annuity and Life Insurance companies are competing for baby boomer dollars. A lot of great info there and a lot of great info in the entire book. It's not even, you know, the biggest book in the world. We're not asking you to read War and Peace here. This is it's a good read, but it's a it's an easy read with a lot of great info that you probably didn't know going in. I know that any time we listen to one of these chapters here on the show, I learn something. And that's the goal. We want you to learn something as well and you can actually get a free copy of that book sent directly to you. Absolutely free. As I said, you can go to my prosperity team dot com or call 386 228 5769. That's 386 228 5769. And talk about I mean that's a it's a really great resource, as I say for folks and a lot of information but put in in a way that you can really understand.

Ed Cruz:
Absolutely. You know, it's you know, a lot of us don't even realize how many how many wealthy people put money into annuities and the reasons why. Right. There's a lot of things that you can put money at, you know, face the risk. But why wouldn't you want part of your assets in some sort of safe area? Or if you have a lot of non qualified funds, meaning non IRA non for one K, you know, why wouldn't you want tax deferral to to help you grow your assets. Thinking about the the the different annuities that are out there especially with fixed indexed annuities. Why wouldn't you want a market like return with no with no risk and again while protecting your assets making sure that they go directly to who you want it to go to avoiding probate. There's just so many things that that annuities will do for you. And this book is, like you said, it's a great resource. It'll help you understand what we do, why we do it and and how it'll work for you. So the annuity 360 book, I can't say enough. Make the request for it. It'll be worth your time.

Producer:
And once again, folks, you can do that by going to my prosperity team or calling 386 228 5769. And you know, you sort of alluded to it there. The different types of annuities while we're on on that particular topic kind of go through for the listeners, you know a little bit about the different types of annuities that are out there. There are quite a few. I mean, it's not just, you know, sort of your your grandfather's annuity that you might think of from back in the day.

Ed Cruz:
Right. You know, the one the one that we always kind of warn against variable annuities. And I just ran into one of these a couple of weeks ago and the client was was was paying so much in fees. And, you know, she didn't realize it. She didn't have the appropriate paperwork. So we called the company and and I brought out an outline and she said, well, what is that? And I said, well, these are questions that we want to ask to make sure that we get all the proper information. And she was quite impressed that I that I came with that. But, you know, when we sit there and we start asking about mortality fees, you know, who in their right mind would think about asking about mortality fees, You don't. So now we have an outline to help protect you. And so variable annuities, I would say avoid them you know they come with like I said, mortality expense, administrative sub account, death benefit income and advisor fees. And there's possibly inside of those in the investments you have some 12 B one fees and you know, we could just keep going down the list here. But so that's one that I would say avoid single premium annuities.

Ed Cruz:
If you're just looking for an income, not worried about your beneficiaries, that's that's where that's where I would say you could put your money at. But and it will provide you with the with with the best income. But there's really no return or very little return. So immediate annuities are something that that I again I would avoid most pensions are funded with this type of annuity know they just want to give you a payment if you predeceased you know no one gets the excess funds. So again we'll educate you on these different types you know if you're concerned about. Outliving your wealth. Annuities are a great solution, and that's why we believe that fixed indexed annuities are the annuity. That's just right. If you plan to invest in a series of annuities, we recommend fixed indexed annuities to help you protect yourself from inflation and the rising cost of living. I will say that there are a lot of annuities out there that that I would not recommend. They're not all right. They're not all built the same. And so finding the right one makes all the difference in the world. And that's where my over 24 years of experience comes in, knowing what annuities to to look at which ones are worthwhile, which ones are going to give you that guaranteed income with cost of living increase because they're all going to give you income.

Ed Cruz:
But is that is that all the same? Is that all built the same? The answer is no. So know what you're getting yourself into. Experience here definitely matters. Get yourself with a well positioned company, an A-plus rated company that will give you that income stream with cost of living. And these are all things that I've taken a lot of time in researching. There's a lot of companies out there. It could it could really be confusing. Some numbers look better than others. But that first number that you look at may not be the number that you want to end up with, because if that stays constant and the other one continues to rise, well, where are you getting most out of your money from? So, again, give us a call. Let us go through this for you. Put that burden on us. This is what we look at day in, day out. We research. We run the numbers. Let us help you. Three, eight, six two, two, eight five, seven, six, nine.

Producer:
And you'll definitely want to give Ed a call and all the folks there, because, you know, that really kind of just scratches the surface as far as annuities go. You know, you've got life insurance policies that you could potentially use for a retirement income as well, something like an index, universal life. But as far as the annuities go, you've got a multi year guaranteed rate annuity. You've got others just a plain fixed annuity. So there are many, many different types of these plans and products and all these different things to kind of wade through. And as as Ed said, he's the expert on this and he, you know, has a lot of experience, a couple decades plus of experience doing this. And so that kind of expertise can really come in handy when you are trying to plan for your financial future. And again, folks, the website to go to to reach out, you can use the contact page there. Just fill out the form is my prosperity team dot com.

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

Producer:
Well of course during this time of inflation and everything else like we've been talking about here on the show today even just with food costs, as we approach the Thanksgiving holiday of the food costs getting really, really up there these days, we like to give you our listeners a little tip here and there on how to save some money and how to make your money go farther. So talk about our cost cutter today, Ed, and it's got something to do with different types of retirement accounts and how you can kind of utilize those to really save on on taxes later on.

Ed Cruz:
Absolutely. Saving on taxes by deleting the IRS as your partner during your retirement is like the largest savings effort you can implement for retirement. And I was going to I was going to bring this up prior, but I said, let me hold off because we're going to cover a little bit of this. And that's Roth IRAs. You know, Roth IRAs are invested with after tax dollars and qualified withdrawals from the Roth IRA plan are tax free and growth within the account is tax free. So, again, if you've never been explained what the consequences are up front, but what the benefits are on the back end, give us a call. We could do a little comparison on what you're on, what your tax exposure will look like in retirement. A Roth ladder conversion is a conversion of funds from your IRA to your Roth IRA over a period of multiple years in hopes of reducing the amount of taxes you must pay with each annual conversion. And, you know, this is this goes back probably 15 years. I had a client whose daughter was a or is a CPA because he's still my client and the daughter still a CPA.

Ed Cruz:
And we spoke about this. We got together and spoke about the idea, the plan. She came up with what the savings look like down the road. And again, we started doing this 15 years ago with with a large amount of assets, with this with this family. And, you know, it's really paying off when we when we think about it. You know, this gentleman and I, we speak probably about every 2 to 3 months. He's very active in. So I work with them very often. And, you know, it was it was a great learning experience for me. And so now it has shown me how the how it's a great benefit to clients. And so I thank them for for that experience. And so if latter correctly, IRA owners can keep their tax rate at or below 24%, dramatically reduce the taxes they will pay over a 30 plus year retirement. And again, in this case, we're already at over 15 years and we have definitely seen the rewards of doing this Roth laddering conversion strategy.

Producer:
Yeah. And that's that's something for to Ed that I just wanted to mention that folks really do need to seek help for because it's not the key word there that you just said, if laddered correctly, it's got to be done right. And so that's why you need to have somebody like you on on your side to really make sure that it's done correctly, because I wouldn't want to go that alone myself.

Ed Cruz:
No, absolutely not. You know, I have charts, tax charts, and I could do some basic things, but you definitely want to sit down with your with your CPA, your your tax professional, and you want to go over any idea that we present to you and make sure that we didn't miss anything? Although I tend to be very analytical and so we don't make those errors. But again, that second opinion, as we always say, is so important. But, you know, you don't want to be involved with the IRS so much that you're willing to give them more of your retirement dollars than you would give your own children. So don't underestimate the importance of having a tax plan for your retirement. Get in touch with us so that we can start helping you with your own plan today.

Producer:
Yeah. And that's so, so important to actually have a plan. Right. And we've talked about, you know, we did a series not all that long ago called the Smart Retirement Plan Series. And one of the first things that we talked about in that series was was basically you got to know where you want to go, right? You've got to know what your retirement, what you want it to look like. And that really is what is going to help you plan that path to to kind of get there. And then, you know, along those lines, once you sort of know, you have that idea in your brain of, okay, this is what I want my standard of living to be, this is who I'm going to be spending my time with, whether it's your, you know, your husband, your wife, you know, partner, kids, whomever you're going to be spending your time with. That is a very important thing to determine. And and, you know, do I have a car? Do I have a house, all this stuff. Once you got that all sort of in your brain, get a free consultation with Edwin Cruz, because I can't think of anything better because, you know, for myself anyway, I know, Ed, that I would really want somebody else to help me sit down and look at that and plot that course, because I can I can sort of envision in my head, okay, It would be great for my retirement to look like this. How in the world do I get there? Where do I even start? And that's, you know, where you come in. I mean, and there's a lot that you can provide to listeners, even just during the free consultation.

Ed Cruz:
You know, like you said, a Roth laddering conversion has to be done. Correct. Because if you if you overextend that client and you just do too much at one time, you're going to cost them so much in or you're going to put them at such tax exposure that they may not be able to recoup from that over over a decade and a half, two decades. And so that's not the way you want to do a Roth conversion. You want to do it in increments knowing that you're keeping them within a certain tax base, and so that in the future you could see the process plan out, especially when that client needs income and you're saying, okay, this is what you're going to save in taxes this year, that year, and going down the road when you turn this next Roth IRA on, here's your accumulated savings. And again, if done properly, we can show you how you're going to save over the long haul and then come out on the other side well ahead.

Producer:
And that is the goal there, folks. And, you know, don't yeah, don't try and go it alone because all of these things can be very, very complicated. And of course, you can reach out to Edwin Cruz at My Prosperity Team .com. MyProsperityTeam.com Or you can call 386 228 5769. That number once again, 386 228 5769.

Producer:
It's this week in history. So when we take a look at it this week in history, some big things happened within the past several days in our nation's history. The biggest we just, you know, kind of got through a few days ago celebrating and remembering and marking Veterans Day in this country. And it's because, you know, it's on November 11th each each and every year because of this historical moment. On November 11th, 1918, World War One came to an end. And that was a very good thing because an estimated 9 million people, it is unfathomable number were killed. That marked it as the deadliest conflict in history and the war. This I've always found this fascinating and really kind of cool that the war officially came to an end at 11 a.m. on the 11th hour, the 11th day of the 11th month in 1918. I thought that was that's really, really a cool thing and an easy way to remember when World War One came to an end and why we marked Veterans Day on that particular day.

Ed Cruz:
Wow. And when you think about you say 9 million people were killed during that war. You think about how many states in our union don't even have 9 million people. So that is a big number. Also, this week in history, in 1954, Ellis Island closed its doors. Ellis Island was considered by many to be the gateway to America. The island closed after processing 12 million immigrants into into the United States during its busiest year of operation. In 1907, Ellis Island saw 1 million people processed into America. And, you know, when I read that line, I'm thinking, how many people are coming into America today? They've already talked about well over two and one half million people. And so when you think about that, it is a it's a big number. And you're talking about 1907, you know, close to 40% of all current US citizens can trace at least one of their ancestors to Ellis Island. And when I speak to my clients, we do speak about those things. When their grandparents came or great grandparents came to America, a few notable people who passed through Ellis Island include psychologist Carl Jung and Sigmund Freud, as well as silent film star and comedian Charlie Chaplin.

Producer:
All Charlie Chaplin. I can just sort of see him going through Ellis Island with the the little mustache drawn on the hat and, you know, swinging his his cane around as he as he walked through. But yeah, just a great thing. And, you know, if that 1 million number is actually pretty staggering, especially if you've ever been to Ellis Island or you've seen it even just from because I've never actually been to Ellis Island itself. I've been to the Statue of Liberty several times, but it's right there by Liberty Island and Ellis Island right there next to each other. And you can see it and you're like a million people came through there and it's not like the biggest facility in the world.

Ed Cruz:
Yeah. Being born in New York and obviously looking over the waterways there of the Hudson, no doubt when when you think about a million people having gone through there. 19 07i mean that's that's quite some time ago. It's, it's quite the number. Yeah.

Producer:
It really, really is. Well it is just about time for us to call it a show here for Prosperity Principles for another week. But folks, remember, once again, if you would like that free consultation, absolutely free of any charge and no obligation at all. My prosperity team dot com MyProsperityTeam.com Is the place to go. Or call 386 228 5769. Well, Ed, I have enjoyed it. Once again, sir, I appreciate you and all of your knowledge and and wisdom that you bring here. And I know the listeners do as well. Have a great rest of the week, sir.

Ed Cruz:
Thank you, Matt. And thank you, all the listeners.

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 MyProsperityTeam.com Or pick up the phone and call 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.

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