Building a Smart Financial Plan During Inflation AWR SHOW: Audio automatically transcribed by Sonix

Building a Smart Financial Plan During Inflation AWR SHOW: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
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Producer:
Welcome to the Active Wealth show with your host! Ford Stokes Ford is a fiduciary and licensed financial advisor who places your needs first. He'll help you protect and grow your wealth. The Active Wealth Show has grown because activators like you want to activate their retirement planning with sound tax, efficient investing and now your host Ford Stokes

Ford Stokes:
And welcome the Active Wealth Show activators I'm Ford Stokes, your Chief Financial Advisor. I'm joined by Sam Davis, our executive producer. And Sam, you've got a very special welcome to the weekend edition since it's the last weekend before Thanksgiving, so hit them with a great weekend. Welcome.

Producer:
Welcome to the weekend activators. Dare I say, is this the first weekend of the holiday season? Everyone's out there starting to get some of their Christmas shopping done. I know I'm trying to pick up a few things every time I'm out and at the store, stocking stuffers and the like. You know, it's about to get hectic in the Atlanta area for the holiday season, but welcome to the weekend and enjoy it.

Ford Stokes:
Yeah, make sure everybody gets out there and gets their turkey a little bit earlier this year. I don't want to create a panic here for turkeys, but I've heard there's a little bit of a shortage on production and we want to take care of the activators on the show, right, Sam. So let's make sure activators you get out there and get your turkey now. Also, this is the last weekend before Black Friday. You might as well just go ahead and knock out a lot of your stuff and not try to wait on deals because I think the deal this year is going to be the actual product is there for you to buy.

Producer:
Yeah, that's that's a good point. You know, in the past, we're trying to get flat screen TVs half off, but now we're just happy if something is is on the shelves and that's part of this new pandemic world that we live in. But yeah, got to get out there and get your turkey. I mean, what is your Thanksgiving dinner if you don't have your turkey there?

Ford Stokes:
So you've got to make sure you

Producer:
Got to have it covered, but a lot to be grateful for on this Thanksgiving holiday and make sure that you get your loved ones around you next week and have a good holiday.

Ford Stokes:
Also, and shout out to honey baked ham because we always get a honey baked ham for Thanksgiving in addition to the turkey, and just want to give a big shout out to them for making something that's just incredibly delicious. Great job honey baked ham and we're pulling for you. Also, we're extremely thankful for our activators. And if you're wondering who an activator is it somebody who listens to the show, It's somebody who wants a tax efficient fee, efficient and market efficient portfolio. It's also somebody who inspects what they expect. They want a successful retirement. They understand that with any situation, knowledge is power. And you know, when you deal with planning your retirement, it's kind of like going to the dentist. You don't want to go very often. You don't have to deal with it, sometimes less painful, sometimes more painful. And I would just encourage you to meet with your advisor at least once a year. We're we do that. We try to meet or talk to our folks on a quarterly basis. We also send them a monthly performance report account performance report so they can understand the performance of their account. So we're not just surprising them with, Hey, here's how your account did for the year at the end of the year during an interview. So that's a big thing. I also wanted to say I'm thankful for the opportunity to work with Sam Davis and just really appreciate it. We're thankful that you are our executive producer. We're thankful that you've helped build the Active Wealth Show to being the number one listen to radio show on the weekends on AM nine 20 answer and we just really appreciate you.

Producer:
Well, I'm very grateful to be a part of it as well. Thank you. Over a hundred episodes of the Active Wealth show to go back and listen to, and we don't have any plans to stop anytime soon. We're going to keep helping people out there and spreading the word.

Ford Stokes:
Well, we're super excited to work with you and just wish you and Bailey and your family all the best during this Christmas season. And congratulations to the Kansas Jayhawks for beating the Texas Longhorns. I think all of us are really excited to see that,

Producer:
Yes, that is an early holiday gift and and a very big one have only beat Texas four times. I believe in the history of Kansas playing football and the first first win in Austin and Kansas and Texas. Ladies and gentlemen, they've been playing football for over a hundred years. So this is this is quite an accomplishment.

Ford Stokes:
So this is top four % of the wins. Hey, nice job. All right. And so on today's show, let's talk about what we're going to talk about on this stage today show we're going to talk about how to build a smart financial plan. We're getting lots of requests on this because people just with runaway inflation, we're going to talk more about our the inflation here after we do kind of our market update and our inflation demonstration. And it's pretty remarkable for the for the city of Atlanta, by the way, the inflation we're number one by. The way folks in inflation and will back that up with a nice story here, but we're going to talk about a smart financial plan and let me give you the formula for a smart financial plan. A smart financial plan equals smart, safe investments. Plus smart risk investing plus smart income planning plus smart health decisions, plus smart tax planning as well. And so you've got smart, safe plus smart risk plus smart income plus smart health plus smart tax equals a smart financial plan if you don't have a solid plan in all those areas in a safe, secure environment for some of your investments. So you know that you're going to be able to generate income from a portion of your investments that typically is your bond replacement or your bond portion or portfolio that you want to do a better job with that.

Ford Stokes:
And that's an opportunity for you to improve. And also, if you don't have if you're just doing a buy and hold and just hang in there approach with your investments, you may want to think about investing in a tactical asset allocation and an actively managed portfolio model. That's probably a smarter way to do things. And then the other is, you know, if you've got smart income, you want to figure out what your income is going to be during retirement. We we also call some of the smart financial planning results in advance planning. So we want to make sure that you see your retirement results in advance over your next 30, five plus years that you're going to be retired. I mean, let's face it, folks, we're all living longer. By the way, the CDC says that if if two spouses make it to age age sixty five, it's like 60 plus % chance that at least one of them's is to be age 90. And so we've got a plan for that longevity risk, but we've got to build a smart financial plan and we're going to talk about each one of those components on today's show. We're also going to give you a market update right now, and then we're going to talk about what's going on with inflation here in Atlanta. So let's hit with our market update.

Producer:
Sam, your Active Wealth market update.

Ford Stokes:
The number of Americans filing for unemployment benefits dropped to a new pandemic low last week as a job market continues to recover from the coronavirus pandemic. Figures released Thursday by the Labor Department showed that applications for the week ended November 13 fell to two hundred and sixty eight thousand from a revised two hundred sixty nine thousand a week earlier. The analysts surveyed by Refinitiv had projected the number of first time filings to decline to two hundred and sixty thousand. It marked the best level of jobless claims since March 14 20 20, when there were two hundred and fifty six thousand applicants, just as the COVID 19 pandemic began to shut down the nation's economy. Still, the number of Americans collecting unemployment benefits remained slightly above the 20 19 weekly average of two hundred eighteen thousand. The continuing claims, or the number of Americans who are consecutively receiving unemployment, fell to two point zero eight million, a decrease from one hundred and twenty nine thousand four the previous week. It marked another pandemic low from March 14 20 20 and when it was one point seventy seven million. The report shows that roughly three point one eight million Americans were collecting jobless benefits for the week ending October 30th and an increase of six hundred eighteen thousand eight hundred four from the previous week by comparison, just a little over one year ago.

Ford Stokes:
An estimated get this, folks an estimated twenty point eighty two million Americans were receiving benefits, and we wonder why we've got labor shortages and problems. People haven't gotten back out to work as much. They are getting back out there. It is improving. And now we kind of understand why we've got shortages, both in supply shortages and also in hiring shortages. It's unbelievable what's going on with the labor market. It's just literally incredible. The Labor Department reported last week there were ten point four million open jobs at the end of September. The little change from the end of August, it's still it's still a staggeringly high figure. There are about three million more open jobs than unemployed Americans looking for work, so there's plenty of opportunities to go find work out there. The number was also exacerbated by a record four point four million people who quit their jobs in September, representing about two point seven % of the country's workforce, according to Job Openings and Labor Turnover Survey. And now, Sam, let's go ahead and play the inflation demonstration for this week.

Producer:
It's time for an Active Wealth inflation demonstration.

Ford Stokes:
U.s. inflation last month rose at its fastest rate since 1990. It grew faster in Atlanta, more than any other major metropolitan area, propelled by increases in gas prices, apartment rents and the cost for goods. The Consumer Pricing Index for Metro Atlanta climbed seven point nine % in October from a year earlier, compared to the national average of six point two %, according to the Bureau of Labor Statistics. Let me tell you, folks, we have got to get a smart financial plan and deal with this inflation because you've got to make sure you stay invested and you grow with the economy because you don't want your money that you've worked so hard to earn and so hard to save. And it's harder to save it than it was to earn it going to get an amen on that one. We've got to do a much better job at planning our retirement and make sure that our money grows alongside this runaway inflation. And Sam, you know, we love Thanksgiving so much that we created a happy Thanksgiving guide. And you anybody can download it. It's absolutely free. You don't have to put your information in. Just visit Active Wealth Thanksgiving again ActiveWealth.com/Thanksgiving. It's got great recipes. It's got great stats on Thanksgiving and metrics about Thanksgiving. A little bit of history on Thanksgiving, but it's also got really neat coloring pages for the kids at the kids table. So if you want a free coloring book with coloring pages that you can just download and print in black and white and hand out to the kids at the kids table, just visit ActiveWealth.com/Thanksgiving. That's Active Wealth.com/Thanksgiving.

Producer:
That's awesome. So you got something for the whole family, something for the kiddos, and then something for the grandparents out there as well. That's cool.

Ford Stokes:
Yeah, we just want to do something where we get to deliver it digitally. There's no like I said, we don't we're not looking for anybody to put their information in all they've got to do. It's a free download. Just visit Active Wealth Thanksgiving.

Late December, back in 63. Very special time for me, as I remember.

Producer:
Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune in to the Active Wealth Show with Ford Stokes, your chief financial adviser, to learn how you can reduce the taxes you pay before and during retirement. The Active Wealth Show Saturdays at noon and Sundays at 11:00 a.m..

Ford Stokes:
And welcome back activators, the Active Wealth Show, and we like to start off a lot of our segments with neat little mini segments, and what we're going to do is share our Beating the Bank CD segment this week.

Producer:
Need a higher rate of return from your safe money? Listen up. It's time to beat the bank.

Ford Stokes:
Cd rates bank CDs are offering between zero point zero five % at your traditional bricks and mortar bank. If you walk into a Bank of America, Truist, SunTrust, now Truist or any other in Wells Fargo, any of the other banks that here in the local Atlanta market, you're going to find that they're going to offer a zero point zero five % annual rate of return for one year bank CD, which is incredibly low to the point where you're in, especially in an environment where inflation is running away, you're just literally in a melting ice cube situation, losing money. So listen, if you can go to Ally Bank and other banks and get between zero point six and zero point six five % on a one year bank CD or a little bit higher with a to your bank CD. But those are internet banks. They're not bricks and mortar. You just don't know. The trust level is not as great with those. They're still have FDIC protection, but you just don't know. And also with if you're dealing with FDIC banking rules that there's a 10 % reserve, three to 10 %. But most banks that are over $100 million of deposits have to keep three to 10 %. But all that are over 100 million have to keep 10 % on hand of financial reserves. What we find is that because of the regulations with fixed indexed annuities and insurance products, the financial reserve requirement is 100 %.

Ford Stokes:
And for me, I would rather keep my money invested with a 100 % financial reserve product, then with a 10 % financial reserve product during the Great Depression. Zero hundred %. Financial reserve and insurance companies and annuity companies went out of business, whereas 60 % of banks closed their doors during the Great Depression and only 40 % of those banks actually reopened. So we want to do everything we can to protect our assets, and that's how to beat bank CDs is to find a shorter period, shorter term length, fixed indexed annuity. And we have those here at Active Wealth and you can feel free to visit us at Active Wealth and book an appointment with us by just clicking that set an appointment button in the upper right corner. Or you can call us at (77) 685-1777again seven seven zero six eight five one seven seven seven. We're happy to help you. We're trying to be smart, safe with our money here on this first part of our smart financial plan and investing in a shorter term fix. The next new, he's a really good idea. And so that's another example of smart safe. Another way to implement smart safe is to invest in a fixed indexed annuity that doesn't have an income rider. Because why are you going to pay in an annuity company to allow you to withdraw the money you gave them? There's no it makes no sense you want to invest in.

Ford Stokes:
A fixed index annuity that doesn't come with an income rider because you can still generate a five % penalty free withdrawal. Also, we've talked about on the show with withdrawal rates. If you can stay at that four % withdrawal rate, you're likely not going to run out of money. So if you've got a million dollar portfolio when you're taking $40000 or four % out of your portfolio each year, plus your Social Security is earning, let's say, thirty six thousand. You're living on seventy six thousand dollars a year. You're fitting within the four % rule and you're likely not going to run out of money. And you likely don't have to have a lifestyle change. And it's a really good idea to kind of implement a program and a plan like that. Well, if you invest with fixed indexed annuities, you can take up to like five, sometimes upwards of six and seven % of your money. And the money continues to grow with market like gains without market risk. And we like to also another really smart idea with smart safe is to invest in. Products that are illustrating with an index that is generating a higher rate of return than what your withdrawal rate will be, so therefore your money won't go to zero after 20 years. It's one of the the secrets about annuity.

Ford Stokes:
Sometimes it will go to zero after 20 years. Now let's also talk about how to build a personal pension. Only 16 % of all Fortune 500 companies still offer a personal pension, according to Yahoo Finance. So I'd encourage you to listen to this chapter from my new book, Annuity 360, on how to build a personal pension. Sam, let's go ahead and roll that chapter. Chapter nine. You can create your own personal pension. Big idea Using an annuity to create a personal pension helps you create a lifetime income stream, but it also helps you leave a legacy for your beneficiaries. All annuities can create annuity income to supplement the income you need before or during retirement. Those who are approaching retirement are afraid that they will run out of money, but an annuity can help make sure you have an income you can never outlive. An annuity can be a great investment for your portfolio, but encourage you to be careful that you don't overpay for your annuity. When you put your money into an annuity, the annuity company will pay you your money back at a date you specify. You don't want an annuity company to charge you too much to simply pay your money back to you. I'm confident that leaving a remarkable family legacy is important to you. You likely want to have money left over when you pass away to leave your beneficiaries. The goal of a personal pension is to generate lifetime income with no risk that grows your money and allows penalty free withdrawals.

Ford Stokes:
An annuity can create a lifetime income with market like gains and no market risk, while also allowing you to build enough wealth to leave for your beneficiaries when you pass away. Don't give the annuity company fees for doing nothing. We prefer fixed indexed annuities for our clients that do not have an income rider fee, but you can still create a personal pension without an income rider on your annuity. If you get an annuity with an income rider but don't utilize the features of that income rider, then you are not getting what you paid for. You are literally just paying the annuity company one to two % each year. You defer annuities using your annuity without receiving a single benefit for that annual fee. This income rider fee will also draw down your account value or principle. Depending on how that index is performing. The growth on your entire account value could be significantly and negatively impacted. Some accumulation focused annuities are built to deliver increasing payments without an income rider. You should consider the features your income rider is providing you before deciding to purchase it as an add on. Make sure you utilize the features you are paying for more ways to get the most out of your annuity. The longer you wait to turn on the annuity, the more you'll receive an annual payments. This is because your annuity will spend a longer time in the accumulation phase, meaning it will spend more time building up your account value.

Ford Stokes:
Your annual payments will grow as your account value grows. Believe it or not, you can generate your own personal pension by distributing no more than five % a year with penalty free withdrawals from your accumulation based annuity policy. Many accumulation annuities are set up to be armed friendly, so you won't suffer a penalty when you have to take your RMD. It would be silly for you to be penalized for something you are required to do. Annuity companies take this into account by creating products that make taking your RMDs easier. Inspect what you expect with any annuity. Don't just go with what the annuity agent or adviser tells you. Read it for yourself specifically, you should read the annuity illustration guaranteed and non-guaranteed tables included within the annuity illustration. Also, please remember that annuity policy is a contract between you and the annuity company, so caveat emptor or buyer beware applies here. Be aware of the annuity you are buying and choose an annuity that works best for you. They will help you build a successful retirement and they'll offer you peace of mind whether you choose to generate income through penalty free withdrawals or invest annually in an income rider. Know the consequences of both. This is a decision you will make at the beginning of the investment process.

Ford Stokes:
One poor decision here can cost you one to one and a half % of annual growth over a 30 year retirement. This could come out to be a significant loss. Educate yourself on your options and the specifics of each option you are considering. Making the right decision up front will save you a lot of frustration in the long run. Also, please remember that if you withdraw too much annually, say 10 %, you will run out of money in 10 to 12 years. Make sure that you're working with an advisor who can help you choose the appropriate withdrawal amount so that your money lasts for your entire lifetime. As discussed above, we recommend no more than five % be withdrawn each year from your account. And so we just heard a. How to build your personal pension from my new book, Annuity 360 and also listen, let me just recap what smart safe means smart safe means to get market like games without market risk. And we'll talk about smart income here and a little bit as well. We want to just take risk off the table. Harry Markowitz in Nineteen Fifty Two was given credit for the discoverer and the founder of Modern Portfolio Theory, and he just said, Hey, we take two non correlated assets that are on the same market. That means stocks and bonds traded on American markets like the New York Stock Exchange, and we take 60 % in stocks and 40 % in bonds.

Ford Stokes:
And when the markets go down, money should rush into bonds, and that should also give us income that we need. And that's great. Well, that's an almost next year. It will be a 70 year old strategy, and I would encourage you to consider a new 60 40. The new 60 40 would be 60 % equities, implementing it with ETFs, and we'll talk about that in the next segment and then 40 % kind of a combination between fixed index annuities and structured notes and try to avoid bonds almost altogether. Most people don't understand the types of bonds they hold in their portfolio. They don't understand what's the rate of return, what are the interest rates are getting? They don't understand the systematic and unsystematic market risk they're facing. They also don't understand that bonds are going with a go forward price to earnings ratio of over one hundred and fifty right now, whereas U.S. equities are right around twenty two to twenty three. So just take that risk off the table. That's my job as a fiduciary is to put your needs ahead of my own. Let's go ahead and do a bond replacement with a fixed indexed annuity. And also, maybe if we want to get slightly higher rate of return, we can we can sprinkle in some structured notes as well. But we'll talk about during smart risk on the next segment and we're so glad you're with us. Come right back.

If I had a

Producer:
Million dollars, if I had a million dollars, well, I'd buy you a house. I would buy you a house.

You saved my. I don't know why you say goodbye, I say hello

Ford Stokes:
And welcome back activators, the Active Wealth Show this is Ford Stokes your chief financial adviser and we're talking about how to build a smart financial plan right now. We've just finished talking about smart safe with investing in fixed index annuities and how to build your own personal pension as well. Next, we're going to talk about smart risk and what we implement here at Active Wealth and with our REA Brookstone Capital Management, we implement tactical asset allocation. We also do strategic investing, which is where we're not rebalancing quite as much, but we're strategically structuring the portfolios where we don't have to rebalance quite a bit, anticipating how things are going to go over the next 12 months, things like that. And another way to do that is to invest in to a structured note, which is a security it. It has a combination of derivatives and also an underlying index on how the performance of the index does. But we offered buffer. We offer buffered structured notes as part of our smart risk strategy as well. They can also be another alternative to bonds. The structured notes are this and basically there's a 30 % buffer as long as the S&P five hundred, the Russell 2000 and the Nasdaq 100 do not lose 30 % of their value. For the time that you purchase the structured notes and you can buy these structured notes in increments of a thousand dollars, is you literally your principle is protected and they're going to pay you a higher rate of return? And these these are offered by banks like Bank of America, Goldman Sachs, JP Morgan, Wells Fargo, Bank of Montreal, Citibank.

Ford Stokes:
These are some of the ones that we've invested with in the past, and because we don't charge a brokerage commission on the front end, we only charge our annual advisory and portfolio fee together. And usually for anybody who's listening, that's a zero nine five % here with Active Wealth to everybody who listens to the Active Wealth Show, which we think is incredibly great. Our normal fee is right around two % and we want to do everything we can to help you invest in a smarter financial plan that gets you a higher rate of return than what a bank CD is going to give you at zero point zero five %. As we talked about in the last segment, a structured note is a really good idea to consider. Also, you want to consider a structured note ladder where you ladder five of them in a row. And here's how that works. You take one hundred thousand dollars, you take twenty thousand a month for five consecutive months, investing in five different structured notes with five different issuing banks with five different starting points of the indices with five different interest rates. And therefore you diversify your risk between the actual banks who offer these structured notes of one bank were to fail, the other four would be fine and which we are only working with AAA rated banks that are, you know, I'm doing air quotes of what people would consider too big to fail.

Ford Stokes:
And then also, we're doing it with five different starting points of the indices. So if there was a significant drop, what would happen in March of twenty twenty when the pandemic hit and the lockdown happened? We would do everything we can to make sure that we're invested in four other notes, and therefore it's more than likely that the markets wouldn't go down another 30 % from where that notes prices were if the trigger was hit, but also if it goes down below the thirty thirty point threshold you're looking at. You know, your your money right in the market for the next 12 months. Now they're also these notes cannot be called before the end of month six, so they have to be there for six months, so they have to give you that rate of return. And by the way, our November note that just closed is now offering nine point seventy five % from Bank of America over the next 12 months. And we think that's a really good smart risk way of moving about it. But also investing in ETFs to accomplish your diversification goals is a really good idea as well. We try to avoid mutual funds because we want to be more fee efficient and you want to do everything you can to reduce your expense ratio within your portfolio. Also, you want to reduce your standard deviation. Standard deviation is a measurement of risk, and if you don't know what standard deviation is, you don't know what the definition of a standard deviation is.

Ford Stokes:
Then you probably should reach out to us at Active Wealth and schedule a free financial consultation. We've got to set an appointment button in the upper right corner, and you can just click that and we're happy to talk to you and you can get booked directly into my calendar. You'll talk directly with me, not with a down line advisor. We do have other advisors, but you'll be working with me and we look forward to talking to you. You can also just pick up the phone and give us a call. At (77) 685-1777again (77) 685-1777And we're going to help you. You're going to get a $500 value with free financial planning, including a free portfolio analysis and a free financial plan to your ninety fifth birthday, which we think is a really good idea. And we'll also include that with a Roth Ladder Conversion plan. If you have not implemented a Roth Ladder Conversion plan as part of a smart tax plan, then you should also call us as well. Now, the next element of a smart financial plan that we're going to talk about is smart income, smart income. We just we played our you can generate a personal pension, which is great, but it's great to generate income from a fixed indexed annuity or to generate income from a Roth Ladder Conversion where there's no tax coming out of it.

Ford Stokes:
On the Roth Ladder Conversion, when you withdraw money from a fixed indexed annuity that pays you out it. If it's especially if it's qualified money, you're going to get taxed on that money at your ordinary income tax rate. Now, let's go ahead and play a chapter from my new book Annuity 360 with reduced risk with annuities. This chapter, I think you're going to find a great way to generate smart income while also reducing risk. It's the same go ahead and play how to reduce risk within your portfolio with fixed indexed annuities. Chapter 16 Reduce risk in your portfolio with annuities. Big idea and annuity can protect against several risks that can affect retirees and pre-retirees and offer a better financial safety net than other investment types. One of the biggest benefits of investing in annuities is reducing risk in your portfolio. With current market volatility, pre-retirees and retirees are more concerned than ever about their retirement funds and protecting their hard earned wealth. We believe that annuities can be the answer to risks in your portfolio. Longevity risk retirees and pre-retirees are concerned about outliving their wealth. We have offered some strategies in this book that will stretch your retirement funds, such as following the four % rule, but annuities can offer even more protection against this fear. We are living longer, so it is important to plan for at least three decades of retirement. An annuity can help create an income you can never outlive.

Ford Stokes:
Your money will last for your entire retirement by utilizing monthly, quarterly or yearly distributions from your annuity account after your money grows during the accumulation phase. Market risk fixed index annuities can protect you from market risk. These annuities are not actually invested in the market. They are only tied to a specific market index. This means that you enjoy all the benefits of your market index when it performs well, but you are not exposed to any of the market risks should your index perform poorly. You will either make money or remain flat. Inflation risk annuities can offer riders that can help you adjust for inflation, even though a rider might reduce your payout. Protecting yourself from inflation will ensure that your money lasts and is not exposed to any unnecessary risk. It is important to have an annuity with a payout linked to the Consumer Price Index, or CPI, instead of one that increases at a fixed rate each year to ensure you are protected against inflation risk in annuity, the increases at a flat rate each year does not offer sufficient protection against inflation. Sequence of return risk and annuity with a lifetime withdrawal benefit can counteract the effects of a down market at the start of your retirement. Research conducted by retired one has shown that you can flip 15 years of returns from retiring during a recession to retiring during a market that is up and completely changed your retirement outlook. The positive returns would offset your withdrawals and grow your assets before your account felt the effects of a negative return.

Ford Stokes:
Consider a smart safe plan with a smart safe plan. Your money is invested, not in the market. The characteristics of investing not in the market include growth was safety market upside limited to no downside principal and gains protection. Low cost zero to one % annual fee time horizon of seven to 14 years can earn five to seven % annually. Options are available for guaranteed income. Here are some examples of not in the market investing bank CDs. The annual %age yield API is about one to two %. Your time horizon is typically one to three years, and you cannot access the funds until the contract is up. Treasurys the API is about three %. Your time horizon is 10 years, and you cannot access the funds until the 10 years is up. Fixed annuities The annual %age yield is between three and four %. Your time horizon is typically four to seven years. You are able to access the funds during the contract period. Multiyear guaranteed annuities, or Midas, you get between two and four % growth on your principal, depending on the duration of your policy. This is less growth than a fixed indexed annuity, but it is guaranteed the annuity company is required to pay you the rate they promised for the duration of your policy. Fixed indexed annuities you receive between five and seven % growth on your principal. The time horizon is seven to 14 years and you do have access to the funds in your account if you need them.

Ford Stokes:
A smart, safe plan does not invest your money directly in the market. Your investment is tied to an index without being invested directly in it. This means that you get a portion of the market gains without the market risk. You may want to consider investing in a fixed indexed annuity over other not in the market options if you invest in Treasuries or CDs. You will lose ground in your investment due to inflation. Investing in a fixed index annuity will likely cut down on your inflation risk. We prefer accumulation annuities because they minimize your risk in several areas, and they lock in your gains through the use of point to point protection periods, meaning you won't lose money. So you just heard from our chapter on how to reduce risk with annuities. We want to help you reduce that longevity risk, that market risk, the systematic and unsystematic market risk. We also want to help you generate that important income that you and your spouse are going to need so you can lock that income up. And we come back from the break. We're going to talk more about smart health and smart tax decisions as part of our smart financial plan. And we're so glad you're with us here on the Active Wealth Show come back for segment four. Also got this week in history and a few other great things on the Active Wealth Show. And don't forget, we've always got our really fun final countdown with you.

Producer:
Just the two of us. We can make it if we try to do the. Looking.

But to make me. Taking and no giving.

Ford Stokes:
And welcome back to the Active Wealth Show activators, and we've got this week in history and we've got our first sounder that Sam put together for this week in history. Go ahead and roll that sound or Sam

Producer:
This week in history.

Ford Stokes:
And on 11 18, 1928, Mickey Mouse made his first appearance on screens when Steamboat Willie, the first animated and talking Motion Picture Show, actually debuted. So that's pretty good stuff. Ready to go, Mickey Mouse or girls love Disney and love Mickey Mouse, even though they're 15 now and too cool. But let's get straight into this smart risk and smart, safe and smart health and all the smart financial plan we're talking about. So smart health. Number one is you've got to make great decisions after you turn age like sixty one, not age sixty five on smart health care decisions. Number one is try not to retire too early, where it's going to be too long and too expensive for you to afford health insurance before you become Medicare eligible at the age of sixty five, you're going to you become eligible for Medicare at to sign up for it at sixty four and three quarters with three months before you turn sixty five and then you actually start can start receiving benefits at age sixty five. You also should invest. But the reason we say start planning at age sixty one is because they've have a two year look back for Medicare surcharges. So you want to try to get all of your money into assets and get it out of income as best you can. And you know, if you're doing an early Roth ladder, you want to try to get rid of all that stuff before the age of sixty two. You also want to have a really good plan on what you're doing about converting all of your funds to get that smart tax side of it.

Ford Stokes:
And when you're trying to convert from your IRA to your Roth IRA, that's a big deal. And then also with smart health, you want to cap your cost. You want to take risk off the table so you either want to invest in a Medigap supplement insurance plan or you want to invest in a Medicare Advantage plan. Medigap supplement insurance plan is going to take care of your co-pays and deductibles, and it's going to cost you between. Probably 140 to $200 a month, depending on the plan. And you should also reevaluate that plan every year, and we work with Bonnie Dobbs, who is our licensed partner on the Medicare side, and she's with Medicare and other red tape. And if you get in touch with us, you can just send me an email at Ford and ActiveWealth.com. That's Ford at Active Wealth.com, and we'll put you in touch with Bonnie. And with Medicare Advantage, it's a little bit like working with an HMO. It's not as costly and and you don't have to spend as much money. But if you do go into the hospital, you could be looking at a six thousand seven hundred dollars co-pay for any hospital stay. And that's not something we like. So we prefer the Medigap. We prefer the Medigap supplement insurance plan to Medicare. And also, if you want a free consultation, all you've got to do is visit ActiveWealth.com. Next, let's talk about smart tax, so there's only two types of tax free investments out there. Number one is Roth IRA.

Ford Stokes:
And number two is life insurance. Life insurance. Let me take the second one first. You can invest in life insurance. We've got a fifty five year old male who's married, who works with us. He's an executive with a major manufacturing firm here in Atlanta. And there are Fortune 50 company, and he's putting $2000 away for 10 years and it's called a 10 pay. He's putting in two hundred and forty grand total, and he's going to generate twenty six thousand five hundred two dollars with the illustration says a year when he turns sixty seven years old. We think that's a really good idea because that money is completely tax free. So he's almost like generating a full next Social Security income payment. Without any taxes, it's his own personal income payment, so that's pretty good stuff. Next is a Roth Ladder Conversion what you do in a Roth ladder, you convert a little bit of your IRA to your Roth IRA dollar for dollar over time. And here's what I mean by that. What you do is you want to try to take an investment account and pay the taxes on your conversion that moves from your Roth IRA. I mean, if your IRA to your Roth IRA. So if you take one hundred grand a year and you're doing a Roth conversion? And you've got you're in the 20 % bracket or even twenty two % bracket, you take twenty two grand out of the taxable investment account and you pay the taxes and you move one hundred grand over from your IRA to your Roth IRA. So your Roth IRA goes up as much as your IRA goes down.

Ford Stokes:
And so you're taking taxable dollars to pay the taxes on tax deferred money that is converting to tax free money. It is a no brainer you're going to save six figures plus by implementing your Roth Ladder Conversion in reduced taxes that you're going to pay over your thirty five plus year retirement. We want to do everything we can to make sure that you are reducing the taxes and the fees that you're dealing with during retirement, because those are guarantees. You can talk about market return all you want. You can be as concerned about how much money I'm making off of my money and how much pressure you want to put on your financial advisor and all those kinds of things. You can take as much risk profile as you want in your allocation. You can do all kinds of things, but the guarantees out there are to reduce your tax liability. No brainer that is smart tax decision making. And the other is you want to reduce the fees, our normal fee when we're working with somebody that comes off the street is like right between one and a half and two %. But if you're an activator and you call our office, we're going to do it at zero point nine five %. So you literally you're reducing your the fees you're paying by one point zero five or, you know, more than half a point. That's every year compounded interest that you're not having to pay to somebody else that is going into your account. It's the.

Producer:
So let's recap what you may have missed. It's the final countdown.

Ford Stokes:
So on today's show, we talked about how thankful we were to have each and every one of you as an activator and a listener to this show. And we're also thankful for Sam being our executive producer. He's awesome. We've talked about a smart financial plan today. We we have talked about the runaway inflation. We talked about how the city of Atlanta has actually got the the highest at seven point nine % inflation rate. We've also talked about how to implement a smart financial plan that includes smart income decisions and smart health decisions with fixed index annuities and why it's a good idea to try to generate your own personal pension so you can count on the income that you need and lock that up. In this segment, we've talked about smart tax decisions, whether it's investing in life insurance or in implementing a Roth Ladder Conversion, Roth IRA and life insurance, and we tax free investments out there. We're so glad you've been with us. We're so glad you're an activator. We're thankful for you, and we hope everybody enjoys the start of this holiday season. Hope everybody out there gets a turkey, so they've got turkey for Thanksgiving, and that the shortage out there doesn't affect you. And we want to make sure all the activators get their turkey and honey baked ham and all the fixings and all the stuffing and all that stuff. All the sides out there from Sam and I both we wish you and your family a happy Thanksgiving.

Producer:
Thanks for listening to the Active Wealth Show. You deserve to work with a private wealth management firm that will strategically work to protect your hard earned assets. To schedule your free consultation, call your Chief Financial Advisor Ford Stokes at (77) 685-1777or visit Active Wealth. Investment Advisory Services offered through Brookstone Capital Management LLC become a registered investment advisor. Bcm and Active Wealth Management are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance cannot be used as an indicator to determine future results.

Producer:
Fixed annuities, including multiyear guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges, as described in the annuity contract guarantees are backed by the financial strength and claims paying ability of the issuer. 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 project the performance of any specific investment and is not a solicitation or recommendation of any investment strategy. A purchaser should evaluate and understand all of the risks and costs of an investment in structured notes Essenes. Prior to making any investment decision, a purchase of an SDN entails other risks not associated with an investment in conventional bank deposits. A purchaser may not have a right to withdraw his or her investment prior to maturity or could incur substantial penalties for an early withdrawal if permitted. A purchaser should carefully read the disclosure statement and any other disclosure statements for a S.N. before investing. An investment, in essence, is not FDIC insured and is subject to credit risk. The actual or perceived creditworthiness of the no issuer may affect the market value of SNS. Essence will not be listed on any securities exchange. Even if there is a secondary market, it may not provide enough liquidity to allow purchasers to trade or sell Essenes.

Producer:
As a holder of SNS, purchasers will not have voting rights or rights to receive cash, dividends or other distributions or other rights in the underlying assets or components of the underlying assets. Certain built in costs are likely to adversely affect the value of Essenes prior to maturity. The price, if any, at which the notes can be purchased in secondary market transactions, if at all, will likely be lower than the original issue. Price in any sale prior to the maturity date could result in a substantial loss. Essenes are not designed to be short term trading instruments. Purchasers should be willing to hold any notes to maturity. The tax consequences of Essenes may be uncertain. Purchasers should consult their tax advisor regarding the U.S. federal income tax consequences of an investment. In essence, if a person is callable at the option of the issuer, in the essence is called, the holder will receive only the applicable redemption amount and will not receive any coupon payments that would have been payable for the remainder of the term of the S.N.. As ins are not, FDIC insured may lose principal value and are not bank guaranteed. This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. All data believed to be reliable but not guaranteed or responsible for reliance on this data.

Producer:
Past performance is not indicative of future results, which may vary the value of investments and the income derived from investments can go down as well as up. Future returns are not guaranteed and a loss of principal may occur. Brookstone does not provide accounting, tax or legal advice. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively. And investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. Historical performance results for market indices generally do not reflect the deduction of transaction and or custodial charges or the deduction of an investment management fee. The occurrence of which would have the effect of decreasing historical performance results, economic factors, market conditions and investment strategies will affect the performance of any portfolio, and there are no assurances that it will match or outperform any particular benchmark. The investment strategy and types of securities held by the comparison indices may be substantially different from the investment strategy and the types of securities held by the strategy, not FDIC. Insured may lose principal value. No bank guarantee.

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