10.28.22: Audio automatically transcribed by Sonix

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

Producer:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs, and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.

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

Ed Cruz:
Welcome back to another week of Prosperity Principles. Ahmed When Cruz And here with me today is Matt McClure, and we're going to be exploring some important issues that you may want to take note of. And so with all that said, welcome Matt.

Producer:
Hi there, Ed, How's it going? This, this lovely, lovely week?

Ed Cruz:
It's going well. The weather is great. You know, 24 years in the business treating me better than ever. But, you know, there's a lot of people out there to help, so we just want to keep moving forward.

Producer:
That's right. People are looking for that help these days, especially with, you know, sort of the upheaval in the markets and the economy in general. The very sort of weird times that we live in. I think that's the technical term for it, weird that we're living in right now. But yeah, and that's the goal of the show really is to educate folks about, you know, their options, about, you know, that there are options out there beyond the things that they might be familiar with. Right. So so there's a lot of great stuff coming up. Yeah.

Ed Cruz:
People are just constantly calling me with their what they see as a big problem. And the one thing we want to educate people on before they even really feel the problem, we want to talk some strategy solutions so that they know that there's there's hope out there for them. And that's one of the big purposes. There is hope out there for you.

Producer:
Yeah, there really is. That is the bottom line that there is hope. There are options no matter your situation and everybody's situation is unique. So we'll get into a lot about that as the show goes on here. Of course, this is Prosperity principles, folks. I'm Matt McClure here alongside Edwin Cruz, the host, and the real and true expert around here to talk all things, you know, retirement planning and and financial and everything over the next hour. So we've got a lot to to cover in the show here. We've got our quote of the week, of course, coming up in a minute. Later on in the show, though, a little bit of a market update with some some some good information. I think actually maybe some some good news for taxpayers. That's kind of weird because we never get that. But we've got some inflation demonstration to give. You talk about how to eliminate your income gap in 2023. We'll play a little right or wrong. We've got a lot that that is a long list of stuff that we have to get to and we are looking forward to getting to. But here's something for you to get to, and that is the website for Prosperity Principles. It's my prosperity team dot com. MyProsperityTeam.com. My prosperity team dot com is the website and the phone number 386 228 5769. And if you stick around for the rest of the show, folks, we'll tell you how to get a free consultation by calling the number or going to the website editor and some important, I think, reminders for folks as we continue on here with, of course, annual enrollment. We're right in the middle of it. A busy, busy time for Medicare.

Ed Cruz:
That's right. And, you know, that's another one of the things we get a lot of calls on. And we have the specialists to to help you with that annual enrollment period, October 15 through December 7th. Let us know how we can help you with those Medicare needs. You know, visit our website, give us a call, and we'd love to help you with that.

Producer:
And of course, kind of right in the middle of the annual enrollment period, another very important date. That's Election Day. It's coming up here, of course, a lot of places with early voting and all of that happening. I, as you know, am the neighbor to your north here in Georgia. And we have had early voting. We've had record numbers of people showing up in early voting as well. So it's been great so far. But actual Election Day coming up on Tuesday, November 8th.

Ed Cruz:
Yeah, and over here in Florida, we just got it off a week ago. And so if you don't like what's going on, get out and vote.

Producer:
Yeah. Or, you know, it's always a good thing to get out and make your voice heard. Like, that's the thing. It's our right. It's our privilege and honor to be able to cast a ballot in this country. So do it. That's just that's the bottom line. Do it. And if you do and if you don't, you can't complain about how things are going, right. That's absolutely, absolutely. The bottom line.

Producer:
Now of wholesome financial wisdom. It's time for the Quote of the week.

Producer:
So we've got a. Bit of a two for one special in our Quote of the week this week. And it's it's like we're running a sale. We got the signs up and you know, come on in, everybody. Two for the price of one. So we've got our first quote of the week. Actually, both of these kind of come from a little bit of an unexpected source, the first one from Arthur Godfrey, and that's a name that goes way on back in American Entertainment. He was an American radio and TV broadcaster, host, entertainer. He was sometimes introduced by the nickname the old redhead. And the old redhead said this one time, he said, quote, I'm proud to pay taxes in the United States. The only thing is I could be just as proud for half the money. We've all felt that.

Ed Cruz:
Absolutely. And, you know, many times I've had these conversations with people, you know, we don't mind paying our taxes. We're just not happy about how it's being spent, where it's going to. And so, absolutely, we would like to see a little more prudence by our government when spending our tax dollars.

Producer:
Yeah, no, absolutely true. I think everybody is in in on that. That's that's one thing in these times where it seems very polarized. I think a lot of people are like, yeah, that is something that we can pretty much all agree on here. Okay. So a bonus quote of the week comes from somebody who you might be familiar with if you liked hip hop in the 1980s, for example, Run DMC. Yeah, he was the deejay for Run-DMC. I'm talking about Jam Master Jay. He's no longer with us, unfortunately, but he did have some wise words about money. He said this, quote, Make sure to save for the future and keep making money. And that's that's short, sweet to the point. I just love.

Ed Cruz:
It. Well, absolutely. And isn't that kind of what we teach all the time, Right? You you're doing well. You know, some people get comfortable, you know, but you've got to set money aside for those rainy days, for retirement, for those for those future needs. So, yeah, save save for the future. But keep on making that money.

Producer:
Yeah, that's right. And put your money to work for you. You know, you work hard for your money all throughout your life and career and the years that you work and, you know, really work hard for it. So then put it to work hard for you in retirement. That's that's the goal there. So we got some good, good news, maybe possibly perhaps for folks out there and about our tax brackets this year. Run this down for us. The IRS is now out with new tax brackets for 2023.

Ed Cruz:
Yeah, absolutely. And you know, this is something where a lot of people don't look at us as having any type of true insight in regards to this. But I actually love to go over this. And we will say that we're not tax professionals. We want you to seek a tax professional, someone near you, someone that you that you can trust and work with. But it's interesting to see that because of what's going on in our economy with inflation, we see these brackets being expanded. And and it's important because this should have a positive effect for for a good number of people out there. And I'm not going to get too deep into this. Most people fall into the first categories here. And so I'm going to touch on that for 2022. If you made between $20,551 and $83,550, your tax bracket was 12%, your marginal tax bracket. But now that's been expanded from 83,005 50 up towards 89,450. And so if you got a raise and you fall within that margin, it's nice to know that you're not going from the 12% tax bracket to the 24% tax bracket because you would have given away more than just your raise. So it's very nice to know. And the next tax bracket, the 22% tax bracket, if you made between 83,005, 51 and $178,150, again, you'd be in the 22% tax bracket. But now that's been expanded to 190,750, and this is for married couples. So if you're filing a joint return, these are these are some nice expansions to to to help you from from jumping up into the next tax bracket. So it's a win for for the working class. And, you know, hopefully if if you fall into other tax brackets, give us a call and let us talk to you about how this may impact you.

Producer:
Yeah, it's it's a very important thing to keep. Keep in mind that you could be keeping some more money in your pocket next year because of falling into a lower tax bracket. You know, kind of on the surface when I when I heard about this, it's like, oh, the tax brackets are going up by like each one of them increase by roughly like 7%. And so, like some people might hear that and think, wait, my taxes are going up 7%. What in the world is this? No, no, no, no. That's not what it is. The income actually income brackets, too. The percentages are staying the same. Right. But the income brackets for each of those percentages, that's what is changing. And so you could make a little bit more. Money and stay in your current tax bracket, make the same and be in a lower tax bracket, especially if you're on that the cusp of one or the other. It could be very, very helpful for a lot of American taxpayers. So, yeah, potentially good news.

Ed Cruz:
And if you're if you're self employed, you may be able to keep an eye on where you are and defer some income so that you don't go into that next tax bracket. So there are ideas that we can share with you. Give us a call. Let us help you with these now.

Producer:
386 228 5769. That's 386 228 5769. Or you can go to the website. It's My Prosperity Team .com, MyProsperityTeam.com And you can reach out there as well. Well, a little bit of Social Security news that has come down here in just recent days and weeks. The cost of living adjustment in Social Security, people say that's that's known as the COLA folks. And no, we're not talking about, you know, like Coca Cola, Pepsi Cola. We're talking about the cost of living adjustment. This is better than a glass or a bottle of cola. This is a good kind of a cola. That's that's not going to make your teeth right out of your head, basically. This is good. Explain it to us, Ed.

Ed Cruz:
You know, and like my parents, you know, they told me I remember last year when they got a raise and they were excited about that. I said, well, mom, dad, you know, the increase for 2023 is actually larger than what you received last year. And that number this year will be 8.7% or starting next year, I should say. And so we you know, they were saying, well, what does that mean for us? So, you know, we kind of did the numbers for them and and brought a little excitement. And I said, now just because you receive that extra two, three, $400 doesn't mean you just go out and blow it. You know, use it wisely, mom and dad. So I'm saying that to everyone out there, use it wisely. You know, if there's something special you want to do for someone, there's your chance and it's going to stick with you. So with with the COLA being up 5.9% this year and 22 and now 8.7%, that brings the two year increase to 14.6%. You know, that's one sixth of of of the total of Social Security. That's a bigger number when you think of it that way, bigger than you would ever think. The good news is that your Social Security income benefit has a built in adjustment to help protect your buying power. Because think about it, that $1,000.10 years ago is is only worth about $800 today. And we know that to be true in a big way. The bad news is that inflation is still wreaking havoc on on American families, particularly particularly in these areas. Right. Food costs, we just continue to see those prices jump, energy costs.

Ed Cruz:
I'm just waiting to see what the winter brings for, you know, for energy costs. I don't think it's going to be a good thing. New and used cars. I saw my son buy this pickup truck and couldn't believe the price of of of a used pickup truck and traveling cost. I recently went to get airline tickets and kind of shocked me because I go to the Caribbean all the time. And so I generally see the same price year in, year out. And, you know, now I see per person increases of 150, $200 per person. So, you know, that's that's a little shocking sometimes. But this is part of why we want all of our listeners to have a solid and tested plan for protecting and growing their hard earned money. You know, there's a reason for what we do. If you have a lump sum of money and I ask you, what does that mean? How does that convert into income for you? You should have an answer for that. If you don't, you really need to come and speak to us because we'll show you how that translates into a lifetime of income. Because if you run out of money, what's the alternative? So give us a call. Let us help you that way. And any time, any time that you create an income, you want to have, just like Social Security has a cola you want or you need to outpace inflation in order to protect your buying power. And we can help you do just that.

Producer:
Absolutely. Give yourself that cost of living adjustment there. And there are ways, as you say, strategies and plans that you can put in place that will do that. And for more information, folks, you can go to the Web site My Prosperity Team Dot com.

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

Producer:
Yes. So, you know, Ed, we had hoped by now that inflation would kind of be working its way out of our economy and out of our system, especially with these rate increases that we've seen from the Federal Reserve. We had hoped that those would be effective sooner in kind of slowing things down and tamping down tamping down inflation, I should say. It hasn't really been hasn't really been the case, especially according to this latest consumer price index. Right.

Ed Cruz:
Absolutely not. The the latest here, the Consumer Price Index, which measures the average change in prices for consumer goods and services, rose more than expected again in September, still hovering near the highest levels since the early 1980s. And the rising cost of living is bad news for workers whose whose average hourly earnings are down 3% from a year ago, leaving more Americans living paycheck to paycheck. And that's the one thing that we all hate to hear, Right. And now 32% of adults say that they regularly run out of money between pay periods, according to salary finance. And, you know, that kind of brings me back to my to my beginning days, you know, working, going to school, living paycheck to paycheck. You know, that's a long time back, but it doesn't bring back any any good memories when I think back of living paycheck to paycheck. And that's why when we receive and I stress this to a lot of the young folks that I go out and speak to, you know, when we get these these raises, what we need to do is take that raise and start investing into our future. You don't have to invest 100% of it into your future, but start investing some into your future. It's a habit and I'll say this over and over. Over when whenever you save money, it's habitual.

Ed Cruz:
And if you don't get used to it early on, it's difficult as you get older because it just becomes more of a hassle, more of what you have to invest into yourself just to make up for what you didn't do back in your twenties and thirties. So you have to get into the into the habit of doing this. And more than more than half of of working us adults feel as though they are behind on retirement savings and that's because they they haven't had anyone speak to them and make a little sense of this you know, underscoring the hardships of the inflated economy, according to a recent report from Bankrate, of these adults, over one third say they feel significantly behind. According to consumer financial services companies recent report. So, again, folks, you have to get out there and research what's available to you. How am I going to start putting this away? You know, are you going to risk it or are you going to are you going to sit more on the safety side? There are options out there for you. You just have to go out and explore. But we're we're we can form a great resource or we can be a great resource for you and and help you reach these goals for your future.

Producer:
Yeah. And you know that those numbers there, according to that salary finance survey that 32%, almost a third of Americans living paycheck to paycheck and then those numbers from bank rate about half or more than that of U.S. adults who are working and feel like they're behind in their retirement savings. Yeah, they're probably right. That's the case because if you feel that way, chances are you haven't done a whole lot of planning. You haven't done a whole lot of, you know, taking a whole lot of consideration about your your own upcoming retirement. And we're all, God willing yet I got there right. So you got to prepare for it. You've got to be in on that. And it's not a thing where a situation where it can be too early. I don't think it can ever be too early to start planning, but it can definitely be too late and you can have to play a lot of catch up.

Ed Cruz:
And that's why I like to ask my clients. If we were to sit down three years from now, what would have to happen to make you feel happy with your success or progress? You have to start thinking ahead because if you don't, you're just not going to make any changes.

Producer:
Yeah, and you know that that three years from now will be here before you know it, because it seems like time just goes by faster and faster and faster each and every year. And this next sort of segment here really hones in on that because we're talking already about 2023. Now, it's not even of course, it's not even Thanksgiving yet. It's we're just past Halloween now. It's not not necessarily into the the depths of the holiday season, but we are getting there. And so it's time to really start thinking about the new Year, setting yourself up for financial success in 2023. And so let's go through some steps here, Ed, that folks can take to, first of all, recognize if they have an income gap, which a lot of folks do, they have more month than money, right. Instead of the other way around. So let's talk about that and maybe some things that they can do to reverse that trend.

Ed Cruz:
Well, we'll start off with retiring during a down market as we are in today is challenging, but it's not an impossible task. And we want you or we want to help you make sure that you don't have an income gap during this important time. You need to determine your expenses during retirement. And you know, a lot of people, you know, they'll sit down, they'll write down what their expenses are. But when I go in there, you know, and start questioning certain insurances, certain things, they don't write it all down. So you might think that you're writing that you're you're preparing this for yourself, but you're not covering all the bases. You tend to overlook things. We get comfortable and we start thinking in certain ways, and we just don't think it all the way through sometimes. But we have to really get down to every expense that we have so that we know what we can change for our future. Right? So again, determine your expenses during retirement. Subtracting your expected income from your expenses will give you your retirement income gap or surplus. If your expenses are less than what your total income sources are. We want everyone to have an income surplus so that they can enjoy the life they work hard to build and smart reinvest for a successful retirement. If you're not using it, why just set it aside into a a money market or a savings account that's earning you 1/10 of 1%? Why not reinvest it and make yourself five, seven, ten, 10%? I see that far too often where people are just receiving this surplus and it's just going into a money market which is really not doing anything for you in case of an emergency.

Ed Cruz:
And that's what some people call emergency money. But what's that emergency? Long term care. There are better ways to take care of that emergency money if you want it for long term care, which is the number one answer that I receive. If it's for, let's say, a new roof in the future, a new AC. Well, you know, you don't need $70,000 sitting in an account for something like that. So again, it's good to talk to someone so that you can make sense of why you have that type of surplus just hanging around, not doing anything for you. Number two, let's build a plan that can pay you an income. So so that even during a bad market, you can succeed, right? Let's replace your bonds with fixed indexed annuities or that money market that I just mentioned or a savings account. You know, those things aren't doing anything to provide you with with a with a true guarantee, income guarantee And some of these things that you're that you're holding on to, you know, why pay the fees when you're not getting getting the return. So these are ways that we want to help you. So let's let's let's guarantee yourself an income that you can never outlive, regardless of of market conditions, whether it's current or future.

Ed Cruz:
And let's prioritize the income over the assets for a better retirement. Again, what good is it having $1,000,000 without a plan on how you're going to spend that? Because if you start overspending, which I've seen in the past, then people want that rescue and they want to maintain that same income. Well, you know, you needed that help from the get go so you wouldn't create the mistake. Now you force yourself. You've conditioned yourself to live a certain way, and now you want to create that same income, which is impossible. And and we've had to tame some of that back on on some of our clients. And it's not a good feeling. I wish I could maintain that for you, but let's get it right. Right from the get go. So number three, understand that you will need your money to last over 30 years in most cases today. Now, if you're retiring at 60, 65, chances of living to 9095 today are better than you think with advanced medicine and all. So we're all living longer. And that's why we provide our listeners with a complimentary financial plan that will carry them through their 95th birthday. It's very important to plan longer than it is shorter, right? Because if we plan up to the age of 85 and you outlive that, now, what are you going to do again? Plan, right? So you don't face these consequences later on in life.

Producer:
Yeah. And you know, you talked about building yourself a personal pension, basically, and guaranteeing yourself income that you can never outlive, you know, later on in life. That's why you need to plan out that far, because people are living longer. And, you know, even during the age of COVID, people are still living longer overall. And so that's something that we continue to see. You know, the 100th birthday, even not such a rare thing anymore, like like it used to be. I remember when I was a kid, there was a 100th birthday for a relative of mine. And if I try to remember which relative, I will forget because I was like, I don't know, seven or eight at the time. And I thought and he was turning 100 and he was in he was in the nursing home and all of that. And we went to this big party that they threw for him. And so that was like the only experience, I think probably in the first time 20 years of my life where I saw someone turn 100. Well, now it's like pretty like every other day you see somebody who's turning 100 now or at least hear about it, and it's just becoming more and more common. So you've got to have that long term in mind, right, Ed?

Ed Cruz:
Absolutely. Listen, my my great grandparents both lived into their hundreds or great great grandparents, I should say. And so as far as living long, I expect it hopefully the quality of life is there. But the bottom line is, even though we say we plan up to the age of 95, realize that the incomes that we put together will go through as long as you live. So we will plan for above and beyond that. But let's at least plan to get to to at least about that age 95.

Producer:
Yeah. And folks, if you want to get started down that road to planning until the age of 95 and beyond for your financial future, you can do that by going to My Prosperity Team .com or calling at at 386 228 5769. That is 386 228 5769. The other thing that you can get by calling that number or going to the website. A couple of things actually. One of them is a copy of the book Annuity 360. It's an absolutely free copy. You can learn so much about annuities. As a matter of fact, pretty much everything you need to know about annuities, the different types of them that are out there maybe get an idea of which type might be might be right for you. They have different uses and different circumstances. So that's one thing. We got that book. It's a great, great resource and it's not a terribly long read at all. We're not asking you to read, you know, the entire encyclopedia cover to cover or, you know, War and Peace or something like that. This is a good, nice, easy read for you, but a lot of great info. So that's one thing you can get by going to the website.

Ed Cruz:
Yeah. You know, I just gave that book several weeks ago to a 77-year-old client. She read the book or I should say prospect. She read the book. And made her choices rather quickly now that she had a much better understanding. And before I went and saw her, she read the book a second time and was telling me more about the book than I even remembered. And I read the book a couple of times. But it's been a little while now, right? So it's fresh on her mind. But she told me how easy it was and how educational it was. And then she asked me, Why is it that my broker has never asked me? If I wanted one of these, why haven't they ever told me about this? And there are simple reasons why we won't get into that here. But reading the book, getting through it, educating yourself is what we want to do. So give us a call so that we can help you. Or at least get that book in your hands.

Producer:
Yeah, that's right. And you can also give the number a call. And once again, it's 386 228 5769. You can call that number also for a free full retirement plan consultation. It's complimentary to listeners of prosperity principles. Talk about that when somebody calls the number and or goes to my prosperity team dot com MyProsperityTeam.com And they want that free full consultation. What is that interaction like?

Ed Cruz:
I always like to say it's like the ABCs. We want to keep it simple, but we want to. But we want to be systematic about what we what we cover, what we get to write. I need to know what you have, What's your income? What are you looking for in retirement? You know, and we provide this at no cost. So even better for you, you know, it's like I say, if if charging you a fee would help you in retirement. I charge you a fee, but it's better that I do it complimentary. No obligation only work with us if it makes sense to you. Just like I mentioned with this client, she thought it made all the sense in the world. I brought her the literature. Once we sit down, I understand what you're looking for. I will bring you more. More for you to read so that you can understand a little more specific. Write the book just kind of gives you a great general idea, and then we get into specifics. So the process is not. I see you today and and you have to worry about feeling pressured. I don't want you to feel pressured. We want to do this in stages, education, education. Then we can start talking about solutions. And so that's that's what we that's what we like to do.

Ed Cruz:
Let us analyze any anything specific or unique that you have in your portfolio. Let's discover what you're paying in fees. Let us let us cut out some of the unnecessary costs that you're taking inside of of your retirement plans. You know, you saved all these years instead of a41k or an I.R.A. or a 457 plan or whatever type of qualified plan, you saved it. It took you a lot of years to save. And then in one year, like this year or so far, people are losing 20, 25%. Think about how many years it took you to save that money that you're just losing in months. Right? When you put it into perspective, it makes all the sense in the world to protect what you have, and that's what we want to show you how to protect what you have while enjoying market like returns. So and if you already have any type of annuity or life insurance plan, let us examine it. A lot of these older plans, they just overcharge you internally or they show you upfront what they're charging you, especially with these variable annuities. I see these variable annuities two and one half to 4% in fees. You know, why do that? Why not cut your fees down to zero to, let's say, one and one half percent? That'll help to to greatly increase your savings.

Ed Cruz:
So, you know, let's get into this life insurance plans. Mortality tables have changed. And so by that happening, it makes life insurance cheaper. So if you're using a whole life plan or a or an index plan to accumulate assets, to accumulate a cash value, well, why not pay less for your for your expense charges, for your for your mortality rates? You know, we can reduce those fees, making your accumulation much better. And by by just examining it, every one of these little areas, you know, that gap that you may have, we may we may be able to close it just with some simple solutions or we may be able to do a little extra to create that surplus that you want to travel, whatever it might be. Give us a call. Let us examine it. I'm sure you'll come out of winter one way or the other. Either we solidify what you have or you find out that you can do better and we can make these little tweaks and and I'm sure you'll be much happier for it. So if you feel like you've learned something just by what I just said, give us a call. Let us answer your questions. We'd love to help. And that's that's our simple process. That's our that's our consultation.

Producer:
Yeah. And it really is. It's simple. It is comprehensive. And you don't you don't have to have a, you know, a degree in rocket science or anything like that to, to, you know, have everything looked at and to look at look through everything that's in your plans or in your particular portfolio or whatever with Ed Cruz, because he's going to help you wade through it all. I know it can be confusing and overwhelming, Right. But you can see if you can do better. And if you can, you work with them. And that's the whole process there. My Prosperity Team dot com is the website once again. That's my prosperity team dot com MyProsperityTeam.com Or you can give a call 386 228 5769

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

Producer:
Yes, folks, it is that time once again where I present a couple of statements, actually three statements here. And Ed Cruz tells me if they are right or if they are wrong. So that's pretty much how the game works. And here it is. The first statement is, oh, there will be no changes to the tax brackets from 2022 to 2023. I have a feeling I know. But Ed, tell me, is that one right or is that one wrong?

Ed Cruz:
Yeah, we just kind of gave a little summary about that. So obviously that's wrong. We are going to have some changes in seven of the tax brackets and should have a positive effect for for a lot of people out there. And so that what it does is includes or increases the income thresholds within each bracket. And these changes are being done due to inflation. So it's important to have a tax plan during your retirement years, which is why we encourage all of our listeners and existing clients to have an annual financial checkup to ensure that they are on the right track to meet their goals and save as much as their hard earned money as possible. And trust me, when I sit down with people and we go over their income, we go over these scenarios and when they want more income, we'll tack that on and we'll see what that does and what tax bracket they may end up in. And it's rare, but I have had my my chats with certain people saying, okay, we could increase this income to this level, but now here's where you're going to end up.

Ed Cruz:
Here's how much more you're going to pay in taxes. So therefore you've defeated the purpose and you wouldn't believe how much they appreciate that. I've gone over that with them because they say, well, you know, we've we also brought this up to, let's say, our other advisor, and they didn't even bring this up to us. And then I tell them, well, of course, you know, they don't want to get in the mix of what a CPA should do, right? Neither do Y, But this is what it looks like. And I suggest that you take this to your CPA and now confirm what I've just said to you. And if you have a team that's working for you, you will have a very successful retirement. Remember, retirement is just not dealing with me. It's dealing with a team, right? Your CPA, if you have a financial another financial advisor out there dealing with your stocks, bonds and mutual funds, if everyone is in the on the same team, we should all be able to work together so that we could do what's best for you.

Producer:
And that's really what it is all about when you're thinking about, you know, planning for the future, doing what is best for you and your unique situation. Because as we say all the time, everybody's situation is different. All right, Ed, so that's number one. Here's number two as we play right or wrong, here's the statement. The only ways to reduce your taxable income and get into a lower tax bracket are deducting your mortgage interest and taking advantage of tax credits. Is that right or is that wrong?

Ed Cruz:
Yeah, well, that's wrong.

Producer:
I love the dramatic pause there. That's nice.

Ed Cruz:
Yeah, I had to do that. Sorry. But anyone can reduce their taxable income during retirement by taking tax free withdrawals. But that's only available in two types of tax free investments. And that would be Roth IRAs and life insurance. And, you know, there are many people that say to me, well, I have these IRAs and I know I was told I should have done Roth IRAs, and but now it's it's time for me to take income or I'm taking income and it's having these consequences, you know, and I tell them, talk to a CPA. It may it could make sense still, while you're in retirement to do some of these Roth conversions, especially if you're an early, early retiree with with an expected longer than expected life expectancy. You know, in the long run, this is going to make a big difference. So you might want to take advantage of it because even though we see these tax brackets being expanded the next time around, it could be not just reducing these tax brackets, but also taxing you more per tax bracket. Right. That 12 could go to 14, the 22 could go to 25 and so on. So, you know, take advantage of it now while you can, because this won't stick around forever. It won't be long. I don't feel before we see our taxes go back up, revenue is always needed or at least wanted by government. So, you know, we have to we have to be ready for that. And so I'm going back to these two forms of tax free investments. You know, if you're interested in generating tax free income during retirement, then I'd encourage you to schedule a consultation with us today. It'll cost you nothing to find out how much you may be able to save in your future taxes.

Producer:
Yeah, and that really is, I think, music to the ears of pretty much everybody. You know, you can actually have tax free income. It is a thing. So find out about it folks my prosperity team dot com is that website that you should go to there well okay all right number three in right or wrong we've had we've had two wrongs. Let's see if they make it right here. Here we go With number three. Medicare pays for long-term care needs. Oh, is that one right or is that one wrong?

Ed Cruz:
Well, it's very people misunderstand this one all the time. It's wrong. You know, Medicare does not cover long term care needs for people who cannot perform their everyday activities on their own. And I hear it all the time. You know, they're that they're in and they're out in six, eight, ten days. I mean, the hospitals don't want to hold on to you. You need to move on. You need to improve if you don't improve. It's a complicated issue. And that's why we want everyone to have a smart health plan for a successful retirement. Health care expenses are very costly and on the rise. And we've spoken about this before. You know, by 2030, we expect one out of every five people to be over the age of 65. There's a lot of seniors on the horizon, and that's going to put even more pressure on the on health care and the cost of health care. So you really need to be ready for this. And the health care expenses are already very costly. They're on the rise. It doesn't go down. And now's a great time to review your Medicare and any long term care insurance needs that you may have. And just to let you know out there, there are savings plans that are hybrid that will help you for long term care. That's what most people are doing today because they don't want to see continued rise in cost. So, again, if you need help in this area, let us know. But yeah, Medicare is not going to take care of your long term care needs. They will only take care of your short term care needs.

Producer:
Right. And that's absolutely something that people don't understand a lot of the time. And you spoke a lot there about long term care and about the long term care insurance needs in this country. And there really is a big gap there between the people who have long term care insurance or some type of plan to be able to pay for their long term care in later years and those who don't. And so let's actually listen. I did a story that you actually brought to my attention, and I wasn't even really aware that this was a thing until you brought it up to me. And so I thank you for inspiring this. I spoke with a professor of law at the University of Pennsylvania about the law that is not only working its way through the Pennsylvania legislature, but also the laws that are in effect in Washington State and then other laws in other states that are proposed as well. And what they're doing is trying to build a long term care system in each state to try and help fill that gap. Right. Of people who don't have coverage and and will likely need it. And so that could mean extra payroll taxes coming out of your paycheck unless you you take certain steps. Let's listen to it here and we'll talk about it in just a couple of minutes on the other side.

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

Allison 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. Again, 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.

Allison 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.

Allison 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 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.

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

Allison 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 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.

Allison 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 Ameriife. I'm Matt McClure. There you go. And I think it's something that we can all agree, I think is a a noble goal, right, to to fill that gap of people who need long term care in later on in life and need a way to pay for that. But two things that I took away from that conversation, though, were, number one, it's it's really kind of a Band-Aid on a on a much larger issue. And number two, those payroll taxes are something that can be opted out if you have your own long term care policy.

Ed Cruz:
Right. And, you know, people people are confusing that because there are life plans that have these these these type of long term care riders on them. And a lot of those are not going to be acceptable. And people must understand if you have a life policy out there and you have a long term care rider attached to it, you need to know what the wording says in there, because a lot of these are just like a little supplementary type of plan and it's not going to do much for you. So the state is not even going to look at that now. The laws are going to be different in different states. Right. But what they accept and what they don't accept, you're going to have to understand. And if you don't have it done ahead of time, you'll just be forced right. Into having to pay that tax. And I will say, being that we're in Florida and we have a lot of these snowbirds, as we call them, they call themselves. You know, it's important for us to broadcast this out because for the most part, these people aren't even hearing about this problem until it's presented to them as it's passing legislation. And once it does that, it's really almost too late. But like I said earlier, we do have solutions to where you don't even have to pay a monthly premium. You just basically you invest your money.

Ed Cruz:
It's there for you, it's there for your for your heirs. But should you need it for long term care, let's let's take let's make an example. 50,050 thousand will convert into 2 to 3 times depending on your health. And it's pretty much automatic issue and it'll cover for for your long term care for if that 50,100 250,000. And I got to tell you, these plans that are being put together by the states, not they're taxing you, but if you take a look at what they're actually giving you, the coverage is minimal. Minimal. So you're not only going to have this coverage that's provided by the state, but you're going to have to pull out of pocket as well. I'm telling you right now that what they're providing you is not going to cover a whole heck of a lot. So you better prepare if you don't take care of it yourself and just grab the bull by the horns and run with it. You're going to be stuck with a plan that is going to cover maybe two thirds and you're still going to be on the hook to cover it one third. And I don't know what that's going to do to your financial plan, but I'm not even going to wait for four for that to come up in my life. We'll take care of that once and for. All right. Up front.

Producer:
That's right. That's the thing to do. And as the professor that I spoke with in that piece there, she said and I'm paraphrasing here, but essentially she said, you know, this is sort of a Band-Aid type solution when you really need a tourniquet. You know, it's like it's it's that kind of a thing. It's like, okay, well, this is going to help a little bit. But, yeah, you know, once you get past maybe a year or two of needing long term care or even shorter term than that, you're going to really run out of money because it's expensive and folks don't realize necessarily how expensive it can be.

Ed Cruz:
And another thing that's going to happen, you know, as as the pressure increases because this is going to build up a reserve fund. Right. That the taxes that you pay into it as soon as as soon as a lot of people end up needing this this long term care and that fund starts getting strained. What do you think is going to happen? They're going to raise that tax, right? It's a continuous vicious cycle. And if you're entrapped in it, it's going to be never ending. So you might as well just start planning and take care of this thing ahead of time because that tax starts in one place and we all know what happens to taxes. They just continue to go up.

Producer:
Right? Yeah. In fact, now, you know, and they're starting out in Washington State anyway. And I believe Pennsylvania's law is written the same way or the bill the proposal is written the same way of payroll tax if point five, 8%. But it's written in these bills, at least in Pennsylvania, because I read the text of the bill. And unless it's changed, you know, in committee or something since then and this was just a couple of weeks ago where I started looking into this, that they start out at 0.58%. But, you know, that can be increased, as you just said, by an amount to to keep it to keep the program solvent. Yeah. So so yeah, that's absolutely true. You can definitely run into a situation where you're paying more in taxes and and potentially, you know, with inflation getting less for your for your money when you do need those funds. So it's just all kind of a big a big mess there. But that's a look at the long term care payroll tax that is affecting perhaps your state if you're somebody who is from up north and spends this time of the year down here in the Sunshine State, that could affect you. So definitely something to be mindful of.

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

Producer:
Well, you you sort of meant. Shouldn't this a little bit earlier in the show, add this this cost cutter we're talking about today has to do with travel. You mentioned that you travel to the Caribbean quite a bit. You've seen these prices really go up. And that's really not you're not alone, I should say, in that everybody is seeing these airfare prices go up. And that's what our cost cutter has to do with this week.

Ed Cruz:
Let's let's talk about how we can save a little money, right, Especially during this holiday season, where we have all this extra inflation. We have the markets losing some money. So what are we going to do now? Of course, we'll have special occasions. And that's where that's where I notice the price difference for for my anniversary. I couldn't cut that one out or I might get cut out of the picture. But so let's skip on some of the holiday air travel this year and opt to stay home for the holidays, which I'm definitely doing. Thanksgiving is is is here with us. And airfare prices are averaging an additional 25% from last year. And I can definitely when I think back on my airline tickets that's about what it is. So they were right and putting this down and then for Christmas travel prices were were averaging $435. That's within the US. I would have to think up from up 55% from last year and in 19% higher than 2019. I was looking into a trip up in the in the Midwest here. I wanted to go look at some buffalo. I've never done that in my life. But looking at that travel and the multiple airplanes, I had to hop around on it kind of. My wife and I looked at each other and said, You know what? That's going to have to wait a little longer. And that's just because I want to be prudent in the way if I'm telling people to do certain things, you know, I've got to follow that model as well. So we've done that just just so everyone understands. So anyway, those are the highest levels that we've seen in at least five years, according to the website and which is travel booking group Hopper, I believe. And so meanwhile, the cost of jet fuel remains elevated, thanks in part to the war in Ukraine and decreased crude oil refining capacity. And a couple other things that we can mention there, but we won't. But yes, let's let's let's think about how we can save money today so that we have a little more for tomorrow.

Producer:
Yeah, that's right. And that's what our cost cutter segment is all about, giving you some simple ideas to really help you save the pennies and let the dollars take care of themselves later on, I guess, because you're going to want to have that money hold on to it. Those pennies add up to dollars and then, you know, in your future, you can have a brighter one, financially speaking. That is so that's a good, good cost. Cutter I was looking at and we're actually I was planning a trip here in a couple of weeks going out to Las Vegas. It is speaking of anniversary trips. That's they'll will be the reason for my trip out west here coming up in a couple of weeks And yeah. And so we're going to have a lot of fun and I actually got it's crazy not only the the increased cost but then also some of the quote unquote, low cost carriers are more expensive than the big carriers. There's there's one I won't mention the name, but they fly south and they fly west. And it was it was just a little bit astronomical. The price on the particular week that I was looking at. And then, you know, then there are the other lower even lower cost carriers than that, and they just sort of nickel and dime you for everything. You know, it's like, okay, if you want to walk on to the plane, it's this price. If you want to be able to breathe, it's this price, you know. So, yeah, you just you have to be careful with a lot of that when you're trying to plan to travel. If you are going somewhere, look as far in advance as possible. And of course, as you said, the holidays are getting here, so it might not be a whole heck of a lot of time to do that. Right now. It's this week in history. Well, a big moment, a historical moment this week in history, in U.S. history. And this has to do with a big monument that we all identify with a certain city in the Midwest. I'll let you take this one at.

Ed Cruz:
Absolutely. This week, in 1965, the historical Saint Louis Gateway Arch is completed. And, you know, I'm a big baseball fan. Most people know that about me. And, you know, just watching Saint Louis baseball team and and I've actually driven through the city, so I've actually seen it. It is it is quite the quite the monument. So very neat that we're talking about this. And I had no idea that it was erected back in 1965. The 630 foot High Gateway Arch, designed by American educated architect Eero Eero Saarinen. Saarinen was lifted to commemorate President Thomas Jefferson's Louisiana purchase of 1803, and the structure costs less than $15 million to build and is designed to withstand both earthquakes and high winds. And I got to tell you, man, $15 dollars seems like a bargain nowadays to to do any type of structure of of sort.

Producer:
That's right. Especially one that big. And then, of course, that's in 19 $65. We know what inflation has been like since since then, especially the early eighties and right now. So yeah, you would never build that for 15 million today. But that's great. Yeah, I've flown into and out of Saint Louis before and, and you kind of, you know, the flight path sort of takes you over the arch and it's just, just a beautiful structure there and one in music before we have to run here. Ed is on This Week. In 1968, musician Marvin Gaye released his hit single I Heard It Through the Grapevine. The song was released eight months prior to his album. It shot to number one on the US singles charts, and it was Gaye's first number one single. I love that song. And, you know, it's just it's a classic. And it came out this week in 1968 from the wonderful Marvin Gaye. All right. Well, that is a look at This Week in History. And now this week's show is history. I have enjoyed it. Ed, as always, I appreciate you and all of the knowledge and education that you bring to the show and to our listeners. And I will be right back here with you next time.

Ed Cruz:
Thank you, everyone.

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. That's 386 228 5769.

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

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