How to Build a Smart Financial Plan in 2022

February 07, 2022 00:47:48
How to Build a Smart Financial Plan in 2022
Retirement Results
How to Build a Smart Financial Plan in 2022

Feb 07 2022 | 00:47:48

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Show Notes

On this week’s Active Wealth Show, Ford gives the listeners some important updates regarding the markets and the U.S. economy, before breaking down all the elements of a smart financial plan. Active Wealth offers a completely free portfolio and retirement analysis to all listeners; you can schedule a time to talk at ActiveWealth.com. We’ll see you next week!

Watch more episodes: www.ActiveWealthShow.com/podcast

Request your free copy of Annuity 360: www.Annuity360.net

AWR 020422.mp3: Audio automatically transcribed by Sonix

AWR 020422.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer Sam Davis:
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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 to The Active Wealth Show Activators I'm Ford Stokes your Chief Financial Advisor. And I'm joined by our executive radio producer Sam Davis. Sam, say hi to folks.

Producer Sam Davis:
Welcome to the weekend activators. So glad you're here. So glad you're listening to the Active Wealth show and Ford. We've been hearing a lot from activators the past few weeks. They've been visiting Active Wealth. They've been calling you up (770) 685-1777 and what have you been hearing from the activators lately, Ford?

Ford Stokes:
So I've got five key things that have kind of come up the last in the last week, really the last two weeks, probably number one is a lot of people are calling, Hey, Ford, I need to get a better tax plan with my financials. You know, in my financial plan, I need to incorporate what's going on with tax planning because, you know, tax preparations. One thing each year, we're all trying to get our taxes done by April 15th, but that's not tax planning. They want to do a better job at tax planning. So they want to get going on the two types of tax free investments. They want to no. One, they want to consider a Roth Ladder Conversion and converting their IRA into a Roth IRA. And what does that involve? And should they do a little bit at a time and do it Roth Ladder Conversion to minimize taxes? And the answer is probably, probably yes. It would be the the answer to that. And then folks that are in their thirties, forties and fifties and even early 60s are looking to do also some life insurance so they can get tax planning with the life insurance as well. And and so because the only two types of tax free investments out there are Roth IRAs and life insurance. And specifically, we like to invest in indexed universal life policies where you get death benefit protection, but you also are able to generate a tax advantage or even tax free retirement income during your retirement years.

Ford Stokes:
If you plan it properly and you make sure that it doesn't become a modified endowment contract and things like that. So no one was just the need to tax plan. The number two was they want a 401K review. A lot of folks during COVID have changed jobs. They've left their old 401K back their old employer. And what I would recommend is saying, Hey, look, get control of your assets. Don't just leave that money sitting there, especially when you have limited like 12 to 18 different investment options. It's tough to really kind of stick and move and bob and weave and do the different things and reallocate your portfolio with all this, you know, market volatility that we're seeing in January and to some extent, early February. And what we saw some economic, you know, violence and market volatility. And in Q4 as well, in twenty twenty one, you need to have more investment options. You need to be able to reallocate and also implement maybe some strategic buy and hold type of strategies, but also implement what we like to do, which is tactical asset allocation and rebalance your portfolio on a monthly basis. We like to do that. We don't like to just hang in there because we don't think that just hang in there, approach works.

Ford Stokes:
And then also you want to reduce your fees. A lot of people are being really surprised. When I talked to him saying that, wait a second, my 401k has an expense ratio of over one percent. I didn't even know that was the case. And whereas our the expense ratio to implement our portfolios with exchange traded funds instead of using what foreign cars do, which is they use mutual funds to implement their their portfolios. We're using ETFs and our our ETF expense ratios are between point one five and point one seven. It's a whole lot different. I mean, you're it's just a hole in the bucket. There's just leaking water out in your retirement plan. So it's not a really good idea. Number three was we're getting a lot of rollovers with job change and IRA rollovers from 401ks to, you know, to a rollover IRA. What does that entail? And actually, it's really simple and easy. All we do is we open up. Td Ameritrade accounts for you, and we roll over the money from your current financial institution into your New IRA with us and we have limited trading authority within those accounts. We do not have the ability or the authority to ever withdraw any money from your account. We only have ability to liquidate securities and bonds and things like that and then send the money to your checking account or your savings account, whatever you prefer, via something called a move money form.

Ford Stokes:
We don't ever withdraw all anybody's money. We never take possession of anyone's money. We just have limited trading authority to protect and grow your wealth. And so that's a lot of people just say, How does this work? What do we need to do? It's really easy and we can all do it via Zoom. And you can show I can show you everything that I'm typing into the application form so you can see and make sure that all the information is accurate. And then we send you the DocuSign to your email so that we know we got the right email address and then all of your information is only going to you and not be going to somebody else. The number four was, you know, hey, they're getting close to retirement. They're in that red zone of retirement within two to five years of retiring, and they want to get a plan together. And a lot of folks, they've had a for one k forever, but they haven't done a good job at it, really planning they haven't gotten their money working as hard as they did. And now they really want to do that because they're about to stop getting that, that paycheck every single two weeks. And so. We're just here to help those folks, and if you're if you've got a 401K or IRA and you've never had a financial adviser, we'd love to be your first one.

Ford Stokes:
We'd love to be the folks who can help you protect and grow your wealth. We want to build a tax efficient fee, efficient and market efficient portfolio for you, so you can build for the long haul so you can build a successful retirement that's got peace of mind in it. And it's multifaceted, and we also want to reduce the taxes you're going to pay. We want to reduce those tax fees that you're going to pay over your thirty five plus year retirement because we're all living longer. And by the way, if your grandparents smoked and they passed away in their late sixties, early seventies and you don't smoke and you're. 30, 40 years younger, right, than your grandparents are, right, but if not 50 years or 60 years younger than your grandparents, chances are you're going to live longer than they did. Your life expectancy is going to be beyond what their life expectancy was, so you need to plan for the long haul you have. You believe or not. You have longevity risk and we help folks deal with living longer and making sure that we can. Make sure the money lasts and so that people don't outlive their money, then they're their money outlives them and they leave a great legacy, and one of the greatest legacies you can leave is one a Roth IRA.

Ford Stokes:
There's no IRS partner in that account for your heirs or to a tax free death benefit where the IRS is not your their partner in that death benefit payout either. And the number five was we got a lot of calls, Sam, about structured notes and we'll take we're going to take that on here in either segment three or segment four. We're going to talk more about structured debt or structured note from four February is offered by Bank of Montreal. And that structured note is an american-style structured note and is paying thirteen point three five percent over the next 12 months. The note can't be called in the first six months, and your principal is one hundred percent protected as long as the the S&P 500, the Nasdaq 100 and the Russell two thousand don't lose 30 percent of their value. It's called a buffer note as another way of describing it, and so your principal is buffer of that 30 percent. If it does, if any of those indices do go below 30 percent less than when you the strike price of of when you bought the structured note on those indices at the price level, then your principal just ride out the market through that through the 12 months. And that can't be called where you're in a negative position. And we spread risk across the money that's invested in structured notes by doing five separate structured notes in a structured note ladder in five consecutive months of five different banks and five different starting points to the indices in five different interest rates.

Ford Stokes:
So we're able to diversify risk for our clients. So those are the top five. So the five things were one, they need to get going on tax planning, too. They wanted to get a 401K review. Three, they had questions about what they were going to do on rollovers because they've all had job changes for was they were getting close to retirement and five and what do they need to do and how can they get a financial advisor? And we're happy to help and serve that, that need and fill that void for them. And then number five was just structured notes and and getting access to structured notes that are paying out higher than what you can get if you walk into a bank today. It's a pretty nice situation where we can do structured notes. This month is offering thirteen point three five percent with a 30 percent principal buffer. And that's the answer to your question, Sam. I know it was a very long winded answer, but I wanted at least make sure you knew that's what's been on the minds of activators. You were called in or visited ActiveWealth.com and then gotten the phone number off of there.

Producer Sam Davis:
Yeah. And I think it's a fantastic time for any of our activators driving around, you know, take a note Active Wealth. It's Active Wealth Show or the phone number (770) 685-1777. And if you miss part of the show, if you're headed somewhere and you know you're going to miss part of this show or if you missed a show from a week or two ago, the Active Wealth Show is available wherever you listen to podcast. So whether you listen on Apple Podcasts or on Google Play, on the on your Android phone or on Spotify, wherever you can go and find the Active Wealth Show, download all our past episodes and start learning more about planning for retirement.

Ford Stokes:
Yeah, no way to serve the rest of the show we promised last week. We're going to talk all the elements of building a smart financial plan, and we're going to do that. We'll do that here in segment two, three and four. But we're also in the next segment. We're going to give you kind of a market update, what's going on with national debt and jobless claims. And then we're also going to give you our inflation demonstration, which is unbelievable. Also, the national debt tidbit is unbelievable as well, and we'll keep things moving. But we're going to talk about how to build a smart financial plan so you can plan for successful retirement. And we're still glad you've been with us. You're listening to Active Wealth Show right here on a.m. nine 20. The answer when we come back, we're going be talking about how to build all the elements of a very involved and comprehensive smart financial plan.

Producer:
Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune into 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.

Producer Sam Davis:
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.

Ford Stokes:
And welcome back activators to the Active Wealth Show on Ford Stokes for chief financial adviser, and I'm joined by Sam Davis, our executive producer. And he did welcome to the weekend. Also, Sam. We kind of knew this is coming, but Punxsutawney Phil, he got scared of his shadow, went back into his little house thing there. And so we got six more weeks of winter. And so don't throw. Don't put away your heavy coach yet, right?

Producer Sam Davis:
Yeah, I'm not sure if we needed a groundhog to tell us that this year, although I love our our groundhog friend up there in Pennsylvania, for sure. But I just got back from Kansas City and we got snow and I was only there forty eight hours or less and it was snowing. And I know that many parts of the country right now are getting dumped on lots of fresh snow. So stay safe out there. I think we'll avoid the the flurries down here in the south, but it might be cold for a few more weeks.

Ford Stokes:
Yeah, my wife and my kids, I really want the snow days, so they're just not getting them yet this year, but they're getting plenty of cold, that's for sure. So let's kind of talk about some market update things

Producer:
Your Active Wealth market update.

Ford Stokes:
So U.S. national data is now. Get this, folks. Thirty trillion dollars. That's up eight trillion since the start of the pandemic, and there's been a growing number for years and will affect every taxpayer for years to come. And my concern is. That it's going to affect the future generations that we're all going to have to tax are going to go up in the future, and it's also going to affect. This generation and the next in their own retirement. And, you know, Willie Sutton in Nineteen Seventy Two was asked, Hey, why do you rob banks, Willie? Because like I go where the money is? Well. There. What do you think the U.S. government is going to go? They're going to go. To where the money is, and that's to the trillions of dollars that are in retirement accounts, and we've got to do a better job at planning our retirement, we've got to do a better job at getting money out of our IRA and getting into a Roth IRA and doing the conversions and realizing we've got historically low tax rates and we need to go ahead and bite the bullet and start converting up to that three hundred and forty one thousand level for married filing jointly. We've got to start doing that. And so I would encourage you to visit ActiveWealth.com and click that set an appointment button in the upper right corner, and we're happy to help you get going on a free Roth Ladder Conversion.

Ford Stokes:
Also, Sam Loomis, tell them. Here's what you can expect when they come into our office. So you're going to get a free portfolio analysis, you're going to get a free financial plan with your current plan. You get a free financial plan, your 90th birthday with our recommended portfolios, you also get a free financial plan with our recommended portfolios that also includes a Roth Ladder Conversion and five is we'll do a Social Security maximization report for you. Absolutely for free, too. And we'll also, you know, as a bonus, we'll give you a retirement income gap analysis to make sure you're starting with a positive income gap versus your expenses, not a negative income gap. When you start out retirement or while you're dealing with retirement, all you have to do is reach out and call us. At (770) 685-1777 again (770) 685-1777 or visit ActiveWealth.com and also jobless claims. The number of Americans filing for unemployment claims decline last week, the latest sign that the business demand for workers remains elevated amid ongoing labor shortage. Figures released Thursday by the Labor Department show that applications for the week ended Jan. 29 fell to two hundred thirty eight thousand from a revised two hundred sixty one thousand a week earlier, beating the two hundred and forty five thousand forecast by Refinitiv.

Ford Stokes:
Analysts continuing claims, or the number of Americans who are consecutively receiving unemployment aid, fell to one point six to eight million, a decrease of forty four thousand from the previous week. The Omicron bump in unemployment claims is dropping, and we should see levels revert to the pre-pandemic average this month, said Robert Frick, corporate economist at Navy Federal Credit Union. But the country was at a peak omicron when surveys were taken for January jobs numbers so we can expect weak employment numbers figures in tomorrow's release, possibly a net loss in jobs. Hiring should rebound quickly if previous pandemic waves are any guide. An estimated four point three million Americans, or about two point nine percent of the workforce, quit their jobs in December. That is a while. I mean, we got another. Two point nine percent of folks just quit their jobs, it's unbelievable. Also more just quick market up stuff. Market update stuff stocks fall as Facebook dense, large cap tech. Half of the S&P five hundred companies reporting earnings have exceeded their results, so that's good. And their forecasts? US stocks tanked on Thursday after Facebook's disappointing quarter and ahead of results from Amazon. The Nasdaq Composite was off two percent as Facebook dropped 20 percent. Shares in social networking giant fell over 20 percent after the net income fell to ten point two billion from eleven point two billion during the same period a year ago, or three point sixty seven versus three point.

Ford Stokes:
88 cents per share. Revenue rose thirty three point six billion from 28 billion a year ago. The company warned that inflation is hurting customers ad budgets. The weakness in tech spilled over into the broader market, with the S&P 500 off over one percent and the Dow Jones Industrial Average fell over 200 points, or 0.7 percent. Other social media stocks fell in sympathy, including Twitter, Snapchat and Pinterest. Spotify shares were also weaker after the streaming giant said subscribers now at one hundred and eighty three million will be little changed in the current quarter. Ceo Daniel Ek also addressed the Joe Rogan controversy. I think the important part here is that we don't change our policies based on one creator, nor do we change it based on any media cycle or policies have been carefully written with input from the numbers of internal and external experts in this space, and I do believe they're right for our platform. T-mobile bucked the downward trend in the market after reporting higher than expected profits. Other carriers in focus as well in other earnings, Honeywell's revenue of eight point six billion fell short of Wall Street estimates, sending shares down and after the closing bell, the focus will turn on.

Ford Stokes:
Online retail giant Amazon.com investors will also parse results from the Wall Street Journal Parent News Corp. investors are reviewing the latest round of corporate earnings to gauge the damage that rising costs have had on different industries and how companies will deal with inflation moving forward. Most of the companies that have reported results for the last three months of twenty twenty one have delivered earnings and revenue that topped forecasts, which is really good news for all of us investors out there. And despite the higher cost they face during the rising inflation and that's your market update, we promised we would talk about how to build a smart financial plan. And number one is we want to build smart inspection. That includes a portfolio analysis, income gap analysis, Social Security maximization report, a tax plan and a Medicare review of what you're dealing with with potential Medicare surcharges. Whether you wanted to use Medicare supplement or whether you want to choose Medicare Advantage planning. And number two was a part of an element of a smart financial plan with smart safe investing. That's not in the market investing, that's investing in a bond replacement where you're investing in things like a fixed index annuity or even in life insurance. But life insurance a little bit more about smart income in tax advantaged income. Number two is smart risk, where we've got tactical asset allocation, strategic allocation. We want to reduce the fees we're paying and we want to include potentially some structured notes as a bond replacement.

Ford Stokes:
Those structured notes are at risk in the market, but they do give us a much higher rate of return that should net us a net positive result year every year and month over month. Then we also have smart income. Retirement is more about income than it is about building one big nest egg. So you want to have smart income planning, you want to maximize your Social Security because that's another source of your income. Believe it or not, with Social Security, Social Security now the number one or number two income source for a vast majority of. Americans out there, and it started out as a low wage earner retirement plan, and you also want to make sure that you're following the rules you want to you want to be a rule follower during your retirement. You don't want to take out more than four percent of your portfolio in a given year and you want to actually plan your work and work your plan if you do not take action. You actually haven't made a decision. So we want to take action and implement our smart financial plan, you know, include smart inspection includes smart, safe, smart risk and smart income planning. And then also we mentioned earlier the Medicare planning, but you want to have a smart health plan.

Ford Stokes:
You want to make sure you know what you're doing, whether you've got HSA accounts or at least your. You're starting to plan for your Medicare at age sixty one years old because of that, you know, two year look back and listen and segment three, we're going to go even more in depth into how to build a smart financial plan for your retirement future. And we're going to try to help you reduce the fees you're paying. We're going to try to reduce. You know, the market risk out there by also making sure we've got some negative correlation on our assets, negative correlation on assets is actually a good thing, not a bad thing. And then also we're going to have a good tax plan for it. And I think you're really going to like what you have to hear on the Active Wealth Show over the next two segments. I think they're really important. Building a smart financial plan makes sense and with information, there is power and we want to give you that power. We want to give you that knowledge here over the next two segments, so be sure to come back and listen to us talk about how to build a smart financial plan with all of the elements all in one digestible segment, starting with the next segment in segment three right here on the Active Wealth Show on a.m. 9:20 a.m.

Producer:
Are you concerned about U.S. tax rates being raised by the Biden administration and how that will affect your retirement? Tune into 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, Active Wealth Show, I'm Ford Stokes, the chief financial adviser, I've got Sam Davis on the soundboard, there is our executive producer, so we're talking about how to build a smart financial plan, and I'm going to do it all in this segment. I'm going to go all the way through every single element. So it's very clear and you could even take all of these down. Ok. So when we started talking about this in the last segment, but I'm going to go ahead and go all the way through these. Number one is you want to have smart inspection, you want to inspect your do you expect about your current situation so you make an informed financial decision about what to do with your assets and how to plan for your health care and how to plan for your taxes during retirement. Number two is smart safe. We want to have some investments that are bond replacement investments because we're in a slightly rising interest rate environment right now. We've also seen the Fed is reducing liquidity in the market with U.S. equities trading at a go forward p e ratio of twenty two to twenty three times earnings. But bonds, U.S. corporate bonds are paying out one hundred and fifty plus times earnings in a go forward p e ratio. We think that's a big while and we think you need to really consider some smart, safe solutions and at least take 20 percent of your portfolio and invest it into some sort of bond replacement strategy.

Ford Stokes:
And the best way to do that, in my opinion, is either fixed indexed annuities to make sure it's completely safe and sound or invest in structured notes that have market risk. But they also bring a high interest rate, and liquidity is only you're only tying your money up for six months to a year versus the fixed index annuity. You're tying it up to five to 14 years. Then you need to have a smart risk part of your portfolio with class allocation and strategic allocation, and you want to reduce your fees. Many people that I have for one case, we talked about the first segment. If you've got an old phone on K that's sitting there, guess what? You're probably paying point seven to over one percent with all the internal fees that are with the mutual funds that are within your portfolio, and we need to do a better job at investing the efficiently we just do. And so that's smart risk. You know, you're trying to take fee risk off the table, you're trying to take some market risk off the table. You're trying to rebalance and rebalance four types of investments that are going to be in a better spot. That may be a sector that's going to do outpace and do better than other sectors, because then all stay static. I mean, it's not all tech stocks are not the only thing to invest in these days, right? I mean, you've got other stocks that still make money and companies that make money and employ people and do well.

Ford Stokes:
And so you need to kind of rebalance and reallocate, you know, a monthly basis to make sure that you're not just hanging in there and you're not just doing buy and hold and you can do some of that, but we don't get paid on trades. We're not here to to try to turn anyone's account. We want to do everything we can to just rebalance and we don't get paid on trades. So it does. We're just trying to make sure that we're protecting our clients wealth because they've worked really hard for that money and they deserve to not just hang in there all the way to the bottom of the valley of when we see market volatility or market downturn, then you want to have smart income. So like we talked about last segment. Retirement is more about income than it is about anything else, and you also want to follow the rules, you don't want to take out more than four percent of your portfolio on a given year because you're starting taking on 10 percent, you're going to run out of money in 12 years. With us, you might run out of money in 14 or 16 years, but if we can get your higher rate of return, things like that.

Ford Stokes:
But I mean, it is a big deal. You've got to not over withdraw money from all of your assets, then smart health your number one costs. Believe it or not, during retirement, it's going to be your health care costs. You need to have a good plan for Medicare A, which is the hospital side, Medicare B, which is the physician side, and Medicare D, which is Medicare Part D, which is, you know, your drugs, that your pharmaceuticals, that you're going to be ingesting and taking because of the doctor recommends it's going to help you live longer and live a happier and healthier retirement. Then smart tax, we want to get tax diversified. We want to have some taxable accounts with an investment account or join an investment account. We also want to have some tax deferred accounts with fixed indexed annuities or IRAs or 457s, or four or three b's or for one case, things like that. And then we want to have tax free with either Roth IRA planning and and life insurance. Again, folks, the only two truly tax free investments out there are Roth IRAs and life insurance. We think that's important. And so we've got one two three four five six. We've already covered six of the elements of a smart financial plan. Now number seven is just smart planning. You want to have a comprehensive retirement plan that's written down. It's actually typed up for you and we'll do that for you.

Ford Stokes:
And we call this results in advance planning and you want to get and see what your retirement is going to look like, how much income you're going to be able to use on a monthly and even annual basis, but mainly a monthly basis. And what that looks like and we put all that into like two or three pages for you. It's pretty cool. And if you want a free smart financial plan, I encourage you to schedule your free financial consult with us just by visiting ActiveWealth.com. So I mean, smart financial planning and getting that results in advance plan is really important. Then number eight is smart launch. You actually need to take informed action. You need to make sure that you are taking action and you move forward with whatever plan you've set for yourself. Kind of plan your work and work your plan a little bit. Because your retirement success depends on it. If you just are hanging in there and I'm like, Oh, I can't do anything, it's fine. You're not going to thrive in retirement. We want to make sure you thrive. You've worked really hard for the money. That was hard earned, but also hard saved money, and we feel like you deserve to make sure that money works as hard as you do, and that's why we give you a free financial consultation and free portfolio analysis with a free Social Security maximization report and a free retirement income gap analysis.

Ford Stokes:
All that together with a Roth Ladder Conversion plan. We give all that to you at no cost, but it's a fifteen hundred dollar value. We do that because we want to help you make an informed financial decision. After you've got your plan and you're implementing your plan, you want to have smart legacy. We want to plan to tax efficiently, pass your assets off to your loved ones, to your heirs and how what better way to do that and say, Hey, you know what? I'm giving you all of my wealth in two ways. Number one is I'm giving it to you in a tax free death benefit when I die, and we can do that through, you know, five pay a 10 pay or 15 or 20 pay. Indexed universal life policy, or we do it through implementing a consistent and really smart Roth Ladder Conversion. Where we're converting a little bit each year, where we're trying to stay within that twenty two to twenty four percent tax bracket when we're doing the conversions. How fantastic is it to pay your taxes one time and kick the U.S. government of being your partner in retirement? I mean, it's enormous. It is a big difference. And so that is what feeds into a smart legacy. Also, you do need a will or a trust. We like to recommend that people do whatever is their preference. And we have ways in attorneys you can work with.

Ford Stokes:
It's not going to break the bank and we're happy to do that recommendation. All you've got to do is give us a call. At (770) 685-1777 again (770) 685-1777. If you haven't completed a will, please don't let this state make a decision on where your assets go. Let us help you and get you in touch with a licensed attorney and a state attorney that can help you do that. So we're happy to do that as part of a smart legacy and then smart review. You want to review every year where you're at and make sure that you're rebalancing, reallocating and and taking a look at the plan and see how we're doing on the plan. Are we following the plan or are we doing well? Are we over withdrawing or not? Or are the assets still growing at the rate we thought they were going to grow? And also, are we building for a proper tax plan? And then the last one is just smart adjust. We need to adjust the plan every year based on our review. And so. We basically have given you. You know, like literally. Eleven. Elements of a smart financial plan. No one is smart inspection. These are all the elements of smart financial planning, no one is smart inspection. No two is smart safe, no. Three is smart risk, No.

Ford Stokes:
Four is smart income. Number five is smart health. Number six is smart tax. And then number seven is smart planning. Or Smart Plan number eight is smart launch, you actually need to launch your plan. Number nine is Smart Legacy. You want to build that family legacy, and no. Ten is smart review you want to review every single year or at least quarterly or at least yearly, what's going on with the plan and is it performing like we said it was going to? And you want to adjust your plan with smart adjust and that's number 11 at the end. Those are the 11 elements of a smart financial plan. We think that's. A really good deal, I think it's a comprehensive way to look at how you can plan for retirement, and we try to be pretty straightforward with you to. And when we come back with a break, we're talking more about our structured note that we're offering for February. And we'll also talk about a little bit more information on how to generate tax advantage or even tax free retirement income. And we're so glad you're with us here on AM, not one the answer on the Active Wealth Show. We come right back. We're going to talk more about how to plan for smart tax planning and more. We come back from the break. You'll see Active Wealth Show right here on a.m. nine 20. The answer?

Producer:
We have Ford Stokes author of two important personal finance books. Annuity 360 and Taxes are on sale here on a.m. nine 20. The answer as the host of the Active Wealth Show Saturdays at 12 noon and Sundays at 11 a.m.

Ford Stokes:
Hey, and welcome to Active Wealth Show, I'm Ford Stokes, the chief financial adviser. I'm joined by Sam Davis, our executive producer, and this is our last segment of this show, and I wanted to kind of quickly review again the structured note for February. We offered different structure note every single month. It's called a flash note that comes up every single month, and we invest in American style notes. Generally, we have European style as well, but these are kind of looked at on a daily basis and they do pay a higher rate of return. The one we have for February is a flash note. It's a structured note that is also got a 30 percent buffer to buffer your principal. It is a security. It is a bond with a derivative. That equation bond plus a derivative equals a structured note, and the structured note is paying out thirteen point three five percent over the next 12 months. It cannot be called in the first six months, and as long as the Nasdaq 100, the Russell 2000 and the S&P 500 don't lose 30 percent of their value. From the time you buy the structure note, you can buy them in $1000 increments if you want. Most people are buying them and, you know, let's say they're taking $100000 and they want to spread it over five different structured notes.

Ford Stokes:
They do twenty thousand and five different notes in five consecutive months, with five different banks, with five different starting points on the indices and five different interest rates. The thought behind that is we're got, you know, if if our first structured note the market goes down 20 or 30 percent, chances are the market's not going to go down another 20 or 30 percent over the subsequent months in each month, right? Mathematically, chances are that the markets are not going to go down. You know, one hundred and fifty percent, which is five months times 30, right? And so that way we can help protect your money and your principal. The other part of this protection is if you're getting thirteen point three five percent. That's a whole lot of protection because you're going to get paid out one point one, one to five percent a month. And then when they call the note or when the note matures, they give you back, you know, your principal and one hundred percent of your principal. As long as those markets didn't go below 70 percent of what the original strike price value was when you bought the structured note. So we feel like structured notes are a great way to kind of beat back what's going on with this market volatility and get a greater rate of return.

Ford Stokes:
It's also a great bond replacement strategy, and we get our free understanding, structured notes, white paper out to you. All you've got to do is just send me an email at Ford, at ActiveWealth.com or just give us a call at (770) 685-1777. Or you can just visit ActiveWealth.com and click that set an appointment button in the upper right corner. We're happy to help you. All right. Now let me go ahead and give you. We've got a lot of questions, too, about Ford. How do I get tax free retirement income? And the best way to do that is within indexed universal life policy. And you want to take advantage of the rule seventy seven oh two plan. So let me just kind of go through this. So an indexed universal life policy, a type of universal life insurance that offers a death benefit, plus a cash account that can be used to pay your premiums or take withdrawals or end loans. These types of policies offer the flexibility of adjustable life insurance premiums and the opportunity to increase cash value. And IU L is, like we said, it's kind of a type of permanent life insurance that pays the policyholder interest based on the stock market.

Ford Stokes:
Your policy is connected to a stock index such as the S&P 500 or the Dow Jones, but it is not invested directly into this index. The value of your index is recorded at the beginning of each month at the end of the month. If the index has increased, interest is added to your cash value. If your selected index decreases, your cash value receives no interest. Your gains are based on the participation rate of your policy. Here's the deal they take the money that you give the life insurance company and then they invest. They take the money that pays for the death benefit protection, the life insurance portion of it. And then they take the rest of that money and they invested into 10 year U.S. treasuries at the end of year one. Then they start investing into indices that you're tied to, and that gives you the index linked growth. That's what they call it indexed universal life insurance. So that index, as the index grows, you get a majority or a large portion of the gains and the company takes on a portion of those gains from the options they purchase. As the policyholder, you bear all risk, but this helps keep your premiums low. By the way, cash value accumulation any amount credited to your account that will grow tax deferred any value accumulated in your account can be used to pay the premiums on your policy.

Ford Stokes:
You can reduce or completely cease making any out-of-pocket payments. We work with a lot of people that do five paise or 10 pays. I work with a lot of 50 year olds that do 10 pays. And then when they retire at age sixty five or sixty seven, they turn on income. We just implemented one for a 50 year old female, and she's putting in $2000 a month. And when she retires at age sixty seven, she's going to generate forty one thousand eight hundred and ninety eight dollars a year. That's the illustrative rate of of withdrawal that she's able to generate. And there's also a death benefit protection. It's a permanent death benefit. It keeps going and there's no right or necessary for that. And it also allows you to have lower risk because your money is not at risk in the market and there's no withdrawal penalties and there's no contribution limits as well. So we think that's really a good idea to try to consider implementing and indexed universal life policy to generate retirement income. If you're in your fifties, that's a really good way to do it or even early sixties. Listen now for our final countdown. It's the.

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

Ford Stokes:
Listen, we talked about the U.S. is now gone to 30 trillion dollars in year's national debt. The job numbers still look a little bit better. You know, I'm still not a fan of the Biden administration, for sure. And then also, we talked about the 11 elements of a smart financial plan. And if you want a copy of our smart financial plan, all you've got to do is visit us at ActiveWealth.com. We kind of went into a lot of detail about what people are asking me right now. They're asking about the need to tax plan. They're asking them out for on K reviews, rollovers after a job change, they're getting close to retirement. They've never worked with a financial advisor before and they want to start working with one, and we're happy to help and fill that void. All they've got to do is visit Active Wealth and they had questions about structured notes and our structure. Note for February is paying out thirteen point three five percent and I would encourage you to give us a call and we'll give you a free prospectus on that structure note as well.

Ford Stokes:
I want you to take action and listen to our show for a long time. Please do me a favor and visit ActiveWealth.com and click that set an appointment button. Let's go ahead and get started on your plan. And I want you guys to have a fantastic week. Stay warm. Stay dry out there. Unfortunately, Punxsutawney Phil said. We're going to have another long six weeks in winter, but it will. Spring will come and we'll look beautiful. And here in the south, and we'll be able to enjoy the Masters in April and things like that, it'll be great. Everybody get out and play golf, play tennis, run, walk all the things that you do, but hopefully it'll get a little bit warmer. We're so glad you been with us. And remember, when you're planning for retirement, you kind of want to. If you're going to be a bear, be a grizzly. Be aggressive about the knowledge you're seeking with retirement. And remember, knowledge is power, and we want to help you plan for successful retirement. Have a great week, everybody.

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 (770) 685-1777 or 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 the 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 Sam Davis:
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 S.N. 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 credit worthiness of the note 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. 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.

Producer Sam Davis:
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 S.N. is callable at the option of the issuer in the S and 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 as Essenes 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. 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.

Producer Sam Davis:
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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