1.27.23: Audio automatically transcribed by Sonix

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

Producer:
Investment Advisory Services are offered through Foundations, Investment Advisors, LLC, Foundations an SEC Registered Investment Advisor. The content provided is intended for informational and educational purposes only. The views, statements and opinions expressed herein are those of the individual speakers and not necessarily those of foundations and its affiliates. The information contained herein does not constitute an offer to sell any securities or represent an express or implied opinion or endorsement of any specific investment opportunity offering or issuer. Any discussion of performance or returns is not indicative of future results. Each individual investor situation is different and any ideas provided may not be appropriate for your particular circumstances. Foundations only transacts business in states where it's properly registered or is excluded or exempted from registration requirements. Registration as an investment advisor is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. No legal or tax advice is provided. Always consult with a tax professional.

Producer:
Welcome to Rest Assured Retirement with your host, Jeff Holmes. Jeff is a licensed fiduciary and financial advisor who always places his client's needs first. Jeff works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Jeff Holmes.

Jeff Holmes:
Welcome up, everyone, to the Rest Assured Retirement show. This is Jeff Holmes, certified financial fiduciary and certified retirement counselor. I'm joined here with Matt McClure, our producer. And I don't know about the weather over your way, Matt, in Atlanta, but here in Phoenix, they had something called a hard freeze warning last night. You know, we're recording this on the 24th on Tuesday. So, you know, we understand heat advisory, but hard freeze warning. That's a that's a tough one for us.

Producer:
Yeah, The heat is more your language out in the out in the desert southwest. But yeah, it's it's been cold here, too. But I mean, we're at least a little bit more used to it. I feel like during the the summer, during the summer, during the winter months, you know, we get at least some a little bit of snowfall here and there. Little ice storm here and there once, twice a season. But yeah, when you're not used to that at all, it is a shock, let me tell you.

Jeff Holmes:
Yes. One client said yesterday that it was too cold here. He was thinking about moving somewhere else. So but he couldn't find the place to go to.

Producer:
Right. The equator probably would be about the only other place.

Jeff Holmes:
Yeah, that's for sure. So also, when there's a heat advisory here, that means the traffic's a lot less because most people have left.

Producer:
Yeah, There you go.

Jeff Holmes:
Yeah. So? Well, everyone, we back doing a recording here. And if any of you want to listen in on any of our past episodes or anything you might have missed today because you might be out shopping or doing whatever you do on Sundays and you can go to our website. RestAssuredRetirement.com. And that's a place where you can listen to past recordings or you can actually go to wherever you listen to podcast to do that. Also, you can also ask about a complimentary consultation with me if you have questions on something or if it's a quick question, you can call in at 480 454 9191. So that's how you get in touch with us. Today's show is going to be how to build a small, smart retirement plan. It's going to include smart risk, smart, safe and smart tax. Now, before we get into what the overview of today's show, Matt has something called the vignette that he's done on Smart Plan. And that is something and by the way, any of you that don't know what vignette is, I didn't either. So I looked it up and I did that this week. So it is a basically a brief description or episode. So that's what that means for any of you. Like myself. Didn't never heard of that before. So so be able.

Producer:
To use the fancy terms around here. Yeah.

Jeff Holmes:
Yeah, you bet. Yeah.

Producer:
And yeah and it is brief. So here it is. Is smart planning. It's kind of a bit of a review of our last episode here, just sort of laying the groundwork for the Smart retirement plan. We'll give a listen to it here just a couple of minutes, as I say. And we'll continue on the other side.

Producer:
So you know where you are now and where you want to be in retirement. So how do you plan to get there? I'm Matt McClure with the Retirement.Radio Network powered by AmeriLife.

Producer:
Do you have any other questions for me, counselor?

Producer:
There are a lot of questions to ask yourself when you start your retirement plan. Questions like When should I retire? How much money will I need? When should I claim Social Security? What about health care costs and taxes in retirement, this complicated puzzle means you're probably going to need some help coming up with a smart retirement plan.

Ford Stokes:
If you want to retire successfully, you really need to plan early. You know, inspectors you expect and get prepared. Putting a plan in place now while you're still working is a great idea.

Producer:
Ford Stokes is founder and president of Active Wealth Management. Once you find a financial professional you want to work with, they can help you answer all the questions you may have.

Ford Stokes:
Back to what Warren Buffett said. If you don't find a way to make money while you sleep, you're going to work until you die. So we need to do everything we can to figure out a way to make money while we're sleeping. We talk about this human capital versus actual capital. When you're young, you have a lot of human capital. You've got a lot of lot of room left, a lot of capital left in your career. Right? But at the same time, a lot of people that are older, let's say you're 65, 70 years old, you don't have a lot of human capital left, but you should have a lot of capital that is making money while you sleep. And if you don't, then you didn't make the right decisions.

Producer:
There are also some retirement costs you may not have considered yet. Long term care, for example. Did you know it's not covered by Medicare? What about home renovations? If you decide to stay in your home instead of moving into a facility, your home might need some updates to ensure you're safe and comfortable. And those are just the tip of the iceberg. So do you have a fiduciary financial advisor or professional to help you wade through the complicated retirement planning process? That is a key question to consider. If you want to make the most of your hard earned money with a Retirement.Radio Network powered by AmeriLife, I'm Matt McClure.

Producer:
So there you go. Jeff. You know, you have to sort of figure out where you want your retirement to go. That's the smart vision part, right? And then start on that smart planning. But have that, you know, a financial sort of analysis done in the beginning of the process as well. And you can start mapping out that journey toward that smart vision, make that vision a reality. And that's really what it's all about.

Jeff Holmes:
That's exactly right. Thank you so much for doing that. And now we're going to do a quick overview of today's show. We've got the all famous quote of the week coming up. And also inflation demonstration, which you have to some of you like to either put your hands over your eyes or your ears or your mouth or whatever the case is when you hear those for sure. And then we'll get into why you need a smart retirement plan. And again, we'll get into the new areas this week. Smart risks smart, safe and smart tax and end up with the week in history. And that's an important one there. I'm going to add to that. I mustn't forget I got a really important one that we missed last week. Very important. So, Matt, if you'd be so kind to go ahead and give us the quote of the week this week.

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

Producer:
Absolutely. I would be glad to. And this time around are sort of words of wisdom here come from I believe I'm saying his last name. Right. And forgive me if I do not. He is no longer with us, so I know he will not call and complain if I don't. Evan Azar or it's either Azar or Azar. I need to educate myself on how to say that. But he was an American humorist who wrote essays Comic dictionary in 1943, and also 20,000 quips and quotes. So we've picked one of the 20,000 quips and quotes here for our quote of the week. So only 19,999 to go. So you've got to do that many more episodes, Jeff. But here we go with Evan's quote. And he said, quote, Some taxpayers closed their eyes, some stop their ears, some shut their mouths, but all pay through the nose.

Jeff Holmes:
Yeah, very true. That is very true. Some people actually do that with a retirement plan. They close their eyes, drop their ears and shut their mouths because they just don't do anything on that. And I know, obviously. No, if you're listening to the show today, you're not one like that or because you're out here trying to learn more about something that is not the funnest thing or the most comfortable thing to do, that's for sure. First off, I'm going to start off with reasons why. And again, Matt, thank you for that quote. That was a really good one today.

Producer:
Sure thing.

Jeff Holmes:
Yeah. And the reasons why you should meet with an advisor or financial professional if you don't have a formal retirement plan, that's the first reason many of you might have an 8080 page plan. That's a financial plan that includes some retirement planning within that. As far as Social Security, those, if you like, reading 80 page financial plans, that's great. We found that if you're like most people, those are you tend to use those 80 page plans. If you have insomnia and you want to read those late at night and it puts you to sleep, if you know what I mean. You need to have a formal retirement plan, but it has to be something easy and understandable. And you know, when you do retirement planning, is it about how you spend your money or is it about how you spend your time or is it both? That's the question you have to ask yourself. And most people are going to say both, because not only is it how you spend your money, but it's really important how you spend your time. Are you going to be always on edge and always worried about your money through retirement because you didn't set up the formal retirement plan? Or are you going to be spending that time with your family and not having and being happy and not worrying about that? And that's the reason for doing a formal retirement plan that not only includes where your income is coming from, whether it's Social Security or pensions that you may or may not have.

Jeff Holmes:
As far as the pensions go, most people do not nowadays. And you you do all that, including the cost of living allowance estimates for Social Security. Then you take the assets that you're going to use in retirement and then you go on to your expenses and you add inflation to that to make sure when you project out in the future, you're you're at least getting to see a snapshot of where you may be in the future. Also, you start looking into, you know, where you're planning to do. You want to plan to age 90 or 95? Most people think that's as far as they need to go. We like to go out to age 100, give yourself a buffer. And retirement planning is a lot like learning how to drive. First off, you know, back in high school, you remember you got the book, you're all excited, you're reading about what the signs say and mean and all these wonderful things and all that good stuff. And then you jump in the car with typically a parent, typically a dad in that case. And your little you know, you're in an open space somewhere where you're miles away from anything that you could hit. Typically and.

Producer:
Thankfully.

Jeff Holmes:
Hopefully. And so what you do is and you're kind of tense and all that. Of course, whoever's saying next and the seat next to you, they're probably more tense than you are. But yes, where you start learning how to drive, whether it's your mom or dad helped you out initially, and then you maybe go on to driver's Ed. Well, this is driver's ed where you start to learn how to actually drive the car. And then we also help you getting into actually driving the car yourself. And that's what a formal retirement plan will do. It'll also include your any estate planning that may need to be done, tax planning that has to be done. And we'll continue on with adding to that as we go through this today, because we're going to be starting to talk more about more of the details than that formal retirement plan. So we're running up against the break right here. So we'll take a quick break. And we'll be back in a few.

Producer:
You're listening to Rest Assured Retirement to schedule your free no obligation consultation with Geoff visit RestAssuredRetirement.com. Guide questions. Jeff Homes is here to help visit RestAssuredRetirement.com today.

Jeff Holmes:
Welcome back everyone to the Rest Assured Retirement Show. This is Jeff Holmes, a certified financial fiduciary and certified retirement counselor. We just ended up our reasons why you should meet with an advisor or financial professionals. Just finished up on. If you don't have a formal retirement plan. We're getting now into if you don't understand the risk you are taking with your investments, that's another reason. Do you even know really how that all ties in together with all of your investments? You don't understand how to manage risk in your portfolio as you get older. Now, this is a really big one is again, if it's hard to understand now when you're just in early and retirement, is it going to be easier or harder later on as you get older? Something to think about if you don't. Know if you should pay your house off or not. You should do an analysis of that. Have you done an analysis of that before? That's really important. Maybe you don't have a health care plan in place for you and your family's future, or you don't understand what an expense ratio is. You really need to meet with an adviser to find these things out, to understand those just like driving a car. You need to know what all the buttons there behind the wheel are for and all the warning symbols and all those things that we now take for granted after you've been driving for a while. Obviously, driving becomes much easier down the road. That's the way retirement planning should be. It should become easier as you go down the road into retirement. If it's not and you're in that retirement red zone five years before retirement or five years after retirement, you really need to take a look at this, either whether you're a pre retiree or retiree. It's still there's still time to fix that. In any of those cases.

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

Jeff Holmes:
And this is from utility dive dot com. It's about electricity prices and inflation. Did you know consumers paid 14.3% more for electricity last year on average? Then in 2021, and that's according to the Consumer Price Index data released on January 12. Ouch.

Producer:
So that one might say shocking.

Jeff Holmes:
Yeah. So you came in to that shocking electric.

Producer:
Couldn't resist. Couldn't resist. Yeah.

Jeff Holmes:
Very nice. Very nice. The price of residential electricity is projected in the coming years to rise more slowly. Okay, we shall see. Hopefully that is true. But can anyone predict the future?

Producer:
My crystal ball is in the shop.

Jeff Holmes:
Yeah. Yeah. Crystal ball is definitely in the shop. Electricity to heat homes is expected to cost 10.2% more this winter over last winter, or 1350 $9 for the season, according to the National Energy Assistance Directors Association. I had to take a deep breath to go through that one there.

Producer:
There's there's an association for just about everything these days.

Jeff Holmes:
Yes, there.

Producer:
Is.

Jeff Holmes:
So there you are. Now, the next section we're going to get into is smart risk. And this is about building a smart plan. But considering the risk you face during your retirement and learning how to best handle them. Smart Risk investing is an investment strategy designed to maximize returns while minimizing your risk. Has that ever been done? Have you done that? Have you looked at that? Smart risk investing is based on a concept that all investments carries some amount of risk that the and that the only way to reduce that risk is to diversify. Very important of her to do that. Now, what does diversify mean? It means investing in a variety of different asset classes, such as stocks, bonds, real estate, commodities and other financial instruments. Investors need to consider their individual needs and goals as well as their risk tolerance. And you need to how often you need to do a risk tolerance questionnaire. Have you done one recently? Well, they tell us it should be done once a year because it will change over time. We have found. And that's where the rule of 100 comes in. And what we find many times is those risk tolerance questionnaires. Get people into the same area as what the rule of 100 would say. And if you have not heard of the Rule 100, what that means is you subtract your age from 100 and it gives you a number. So if you're 65, you subtract it from 100. That would then give you a number of 35, which is about how much risk you should have in your life at that time.

Jeff Holmes:
As far as risky assets, just a rule of thumb, obviously now risk retiree and pre-retirees should consider. There's many of those. Market risk, your portfolio will be affected by changes in the market. Systematic and unsystematic risk could cause drastic changes in your investments. Okay. I'm going to back up here a second. What systematic risk. Have you heard of that before? Well, basically, systematic risk is looking at the market as a whole. The market risk you take. And systematic risk has to do with the segment that your investments are in, let's say. It could be utilities or energy or whatever it may be. So those are a little little easier to predict. Market risk is much harder to predict. So be prepared for volatility and uncertainty in the market by practicing what they call tactical asset allocation. And what's tactical asset allocation, you're asking? Well, tactical asset allocation, you before you really need to understand that. You need to understand why strategic asset allocation is. So I'm throwing some big terms at you right there. So strategic allocation means that I'm going to make a simple example of this. Let's say you have the old 6040 where you have 60% of your assets in stocks or equities or mutual funds and 40% in bonds. Well, every so often they all notice that the stock market will go up or the bonds will go up.

Jeff Holmes:
And let's say the stock market's gone up to where all of a sudden it's 65% of your portfolio and your bonds are only 35%. So what you do at that point is they do a reallocate the money where it goes back to the 6040. That's strategic. Tactical means they will take advantage of anything that they find. Usually a manager, a money manager will do that and they'll find that though we can make more money in commodities, for instance. So maybe we should invest in some of that during this time. So they'll do that on a much regular basis than what strategic. Strategic is more periodic tactical happens within a month. It's much quicker. So that's the difference between the two interest rates. They change and they'll go up and or they'll rise in the overall economy. They've been doing that a lot lately. Changes in interest rates can have a significant effect on American families and they can affect the economy as a whole, which they're doing right now. Look what's happening with the housing industry now. Interest rates have gone, gone up. And also this is a great time to possibly get those savings accounts that you have and maybe move them to a bank that will give you a higher interest rate than less than 1% where you're at right now. So that's something to to consider. So we'll continue on with this part of the show and we'll be back here in a few.

Producer:
Helping bring you one step closer to financial freedom. You're listening to Rest Assured Retirement.

Producer:
Once again, here is Jeff Holmes.

Jeff Holmes:
Welcome back to the Rest Assured Retirement Show. This is Jeff Holmes, a certified financial fiduciary and certified retirement counselor. We were just going through the Smart Risks segment of our show and we're just finishing up on interest rates. What retirees and pre retirees should consider. The next thing they should consider, obviously, is inflation. Inflation has a significant effect on the spending power of American citizens. And as inflation continues to rise, our spending power decreases. If you've noticed, we were talking about that subject last week on what you're shelling out at the grocery store, a certain product that went up quite a bit. And when planning for retirement, it's important to consider how rising inflation may affect your retirement accounts or your future budgets. Do you put that into your plan? Well, that's a question. Have you done that? Public. Public policy. Now, this tends to affect everything from taxes to retirement account rules to contribution limits. Did you know that on December 29 of 2022, the government passed a new regulation law called Security the Secure Act 2.0. And the first question I have to ask is why do they always do this at the end of the year, in December, during the holiday on these? Never quite figured that out. Or maybe we have figured that out.

Producer:
It's sort of like in the in the news business when when we get some sort of bombshell revelation or like press release late in the afternoon on a Friday. Yes. It's kind of the same thing. Might not want anybody to notice what they're doing.

Jeff Holmes:
Yeah, that could be very much so. So the Secure Act 2.0 is you should be paying attention to that. That's changing. Many things. If you don't know much about that and want to talk about that, you can give us a call. 480 454 9191. Or just go to RestAssuredRetirement.com and we'll be glad to fill you in on that because that can take up the whole show right there just that one change as far as timing. You can choose when you retire, but you can't predict what the market will look like when you do. Your retirement may look different if you retire during a recession than it would in a more favorable market. Obviously, during the last year, many people have decided not to retire and go back to work. Did you know by having a formal retirement plan, which we talked about earlier, you can be prepared for whatever happens. So then you shouldn't, since you don't know what the future's going to hold, shouldn't you prepare for whatever the future holds? And that's why the retirement planning is all about being able to handle all situations to the best of what you can do. Liquidity refers to the ease of which asset can be brought or sold in the market without affecting the asset's price. That's a fancy way of saying you put it in the banking, pull it out the next day with no penalty. That's what they're saying there. So you want to plan. That what allows significant access to your savings and funds where you really want liquidity is and what we would call an emergency fund. And you have to decide how much you put in there. We've talked about that in previous shows. Here's one that people aren't familiar with. This is sequence of returns. That's where if you haven't heard of that, basically it's where your retirement funds could take a massive hit.

Jeff Holmes:
If market experience is a downturn in the early part of your retirement and that happening with the first five or ten years. While you cannot plan for this, you can change what you contribute to in your accounts and use guaranteed income strategies to combat this issue. There are ways to handle this risk. Longevity. We just spoke a little bit about that. We were talking about a retirement plan. You want to make sure that your money outlives you, not the other way around. It's not a good look if it's the other way around. You don't want to be worrying about your finances in retirement or becoming a financial burden on your children. Excess withdrawals. Avoid unwise withdrawals with the 4% rule. This rule will help you control your withdrawals and make sure you don't draw out draw down your account too quickly. You can adjust based on market conditions in the 4% rule. This means you really shouldn't take out more than 4% when you're invested in the market, because if you do that, you're likelihood of running out of money is much, much higher. That's why they came up with that rule. Also, health care expenses, medical costs are one of the largest expense for Americans. Are you prepared for medical cost in retirement by having a medicare plan in place that covers you and your spouse throughout your lives? Again, we have a medicare specialist and an office. That's Jesselyn. She can help you go through what she calls Medicare 101 and give you a good experience as far as learning what you should do, as far as your Medicare plan is. So we're still on this one part here. We'll come back to that in just a second.

Producer:
You're listening to Rest Assured Retirement with Jeff Homes Still.

Producer:
You're listening to Rest Assured Retirement. Here's Jeff.

Jeff Holmes:
Welcome back, everyone, to the Rest Assured Retirement Show this. Jeff Holmes, a certified financial fiduciary and certified retirement counselor. We were just going share the risk that retirees and pre retirees should consider. We had just finished up with health care expenses. We're going on to the next one, which is a tough one. That's the loss of a spouse. Have you done any planning for that potentially happening happen as far as your Social Security benefits and that means you would lose one of those benefits? Obviously, you would get the higher the benefit of the two. But are you prepared for the loss of income by ensuring your savings are enough to get through this rough time? Re employment? While some retirees may enjoy going back to work, many do not want to make sure your savings are enough to cover your living expenses and give you a quality of life you want in retirement. And the main thing you also have to do is watch out for the fees. Most investments include some fees that you have to pay. We can help you choose investments with lower fees. Fees are not paid up front. They come out of your returns. While you never see the money that's taken to cover your fees, your returns will be lower if you have a high fee investment. Something to consider. Also reduce your expense ratio. What is your expense ratio? Do you know what that is? These tend to be something that's used. They're tied to the administrative and operating costs. Operating costs reduce the overall return. You can calculate your expense ratio by dividing the total fund cost with your total fund assets. And by reducing this expense ratio, you are also doing what you're increasing your returns. So that's it. On the smart risk portion, Matt is going to give us a another vignette, our brief episode as as I said earlier.

Producer:
As Webster's Dictionary says, Yeah, that's right. Yeah. This one is just sort of an encapsulation of kind of the things that we just talked about here, Jeff, with the smart risk portion of all of this. Take a listen to this, folks, and we'll continue on with more of the Smart Retirement plan. On the other side,

Producer:
How much risk are you willing to take with your investments? I'm Matt McClure with the Retirement.Radio Network. Powered by AmeriLife. If you're a thrill seeker, you probably enjoy the adrenaline rush of jumping out of a plane, bungee jumping off a high cliff or kayaking down a raging river. But when it comes to your finances, do you still find a lot of risk exciting, or does the danger of losing your hard earned money change your perspective? Think back for a moment to the 2008 financial crisis. Thanks to market risk and some shady Wall Street deals, the S&P 500 fell more than 46% between October 2007 and March 2009.

John Mack:
If you go back and look at the risk that we took 25, 30 years ago and it was kind of way out there, and a lot of these firms, including some of the things that happened at Morgan Stanley, we were so mesmerized by the great trader and the money they made that they got more and more autonomy until it was too late. We had huge losses.

Producer:
That's former Morgan Stanley CEO John Mack speaking with Yahoo! News. So how do you protect yourself if we have another year like that or even another 2022 when the markets had their worst performance since 2008? Financial advisors will tell you that to maximize your investment growth, you need to take some risk with your money. Just be smart about it.

Ford Stokes:
You want to have an actively managed portfolio strategy. You just do. It involves shifting investments in your portfolio to take advantage of pricing anomalies and strong market sectors. You want to reduce the risk. You want to have smart risk as part of your portfolio. You want to increase returns and you want to truly diversify your portfolio.

Producer:
Active Wealth Management founder and President Ford Stokes says smart risk investing is based on the concept that all investments carry some amount of risk and that the only way to reduce that risk is to diversify. This means investing in a variety of different asset classes such as stocks, bonds, real estate, commodities and other financial instruments. Everyone's situation is different, and that's why it's important to work with a fiduciary financial advisor to get the most out of your hard earned and hard saved money. So how much risk are you willing to take with your retirement? That's a key question to consider as you invest for the future. With the Retirement.Radio Network Powered by AmeriLife, I'm Matt McClure.

Producer:
So there you go, Jeff. Just a bit of a brief overview there of the smart risk portion of the Smart retirement plan. And you've got to know what your risks are and how to sort of mitigate those. And I think the important thing and the important takeaway from all of this is seek help from a from a certified financial fiduciary like yourself who is going to be able to help you wade through all this stuff.

Jeff Holmes:
Yeah, lots of stuff, that's for sure.

Producer:
Definitely.

Jeff Holmes:
Now we're going to go on to From Smart Risk to Smart, Safe, Simple. Safe Investing is an investment strategy designed to generate the highest possible churn while helping keeping the risk to a minimum. Now we're going to get into talking about fixed indexed annuities here and fixed annuities briefly. Now, a lot of people will say, well, why are we going through that? They'll they tend to think with why do we just stay with bonds and stocks? Well, if you listen to the last show, there have been studies done by some very smart people that say if you mix these in to your portfolio, your chances of success in retirement are higher. Now, that mean that's for everyone? No, but wouldn't you like to know for sure if it would help you or if it would not? Because like every financial product out there, there are pluses and minuses. We're going to give you a brief description of these. And this is, if you don't know anything about these, I think you should. And the reason for that is you need you don't know what you don't know, and you need to at least know what's out there. Don't go into retirement without checking out all your options, not just some of those. So I won't preach on that anymore. So now indexed annuities are insurance contracts provide guaranteed income streams for your retirement. Since people don't have pensions nowadays, these have been very popular in the last couple of decades and billions of dollars have been going into them for this, for this fact. They are seen as an alternate to traditional bonds and provide a way for investors to protect their retirement savings from market volatility.

Jeff Holmes:
Fears as they go. Is the abbreviation form are designed to provide protection from downturns in the market by providing potential for growth. So that's some of the benefits there. They they also provide tax deferred growth and lifetime income streams and without breaking the budget. So that is something you have to remember. They are doing something that years ago people relied on a pension to do. So if you're needing some extra guaranteed income, a great place to go look for that. And also you need to also understand that's something that is something you might want to look at. Now, the next section is on Smart Tax. Did you know that different investment accounts are taxed differently? By understanding how different accounts are taxed, you can ensure your money is working how you need it and when you need it. Having a smart retirement plan means you plan for tax planning a little different than tax preparation where you look back at history. Tax planning is looking to the future and seeing what higher taxes would do to your retirement plan. So divest your IRAs from your retirement accounts with these two strategies. We've got a couple of them here. And the first one is Roth IRAs. This is obviously an IRA where you can contribute after tax dollars. The account grows tax free, and that means you've paid the taxes on the money already and you don't have to pay taxes on the money when you withdraw it. So it comes out future in the future, tax free.

Jeff Holmes:
No more taxes on that. This is something where you've got there's a lot of provisions within this. So you really have to understand this is not a simple thing to look at. There's a lot involved in this. Are you eligible for, for instance, maybe a Roth conversion? You have to understand the contributions of these. Also, there's no age limit to that. As long as you have earned income, you can contribute to a Roth IRA, no required minimum distributions. Now, that's something that just changed. Like we mentioned, the Secure Act. And unlike the traditional IRAs, now, they the requirement to start taking distribution has moved from age 72 to 73. Now, that is something you have to ask yourself, is it better to wait to start to wait to start taking out money from your traditional IRA? Earlier or later. Have you done tax planning for that? When the government says you can take it out later. You may want to ask yourself, is that really in my best interest? So you really may want to look into that seriously. It's a Roth IRAs provide potential for compound growth that can grow tax free. They also have liquidity. Obviously, you have to look at all the provisions, You know, make sure that you've kept it in there for at least five years or you're at least 59 and a half. And if you need you have a question on that, you need to go and give us a call on that. We'd be more than glad to go through how those provisions work.

Jeff Holmes:
Estate planning Roth IRA assets can be passed on to beneficiaries without the need to pay taxes on the inherited assets. That's really a big one. That's a big one there. Now, the next section for tax free money comes from life insurance. Now, it's important to know the different types of life insurance that's out there that will help you do that. There is something called permanent life insurance. It's an older type of life insurance that's considered whole life. And then they came up with universal life and then they came up with indexed universal life. Now cash value policies. The coverage you get from these means you pay a higher premium than term, but it develops a cash value. Whole life has many guarantees associated with it. Universal life also has more of a fixed return. Indexed universal life that's a little different than newer form of life insurance that has potential for cash value growth based on the performance of an underlying stock market index like the S&P 500. Now to take advantage of this potential for equity appreciation without directly investing in the stock market. It's a great way to go and that's a way you can potentially pull out tax free money out of these and where you need to do some planning on this. This is not something that everyone would do. Don't try this at home, for instance. You want that planning done for you. So what we do is we provide those comprehensive consultations at no cost to our listeners and absolutely no obligation. And you only work with us if it's best for you.

Producer:
It's this week in history.

Jeff Holmes:
Now, we missed something last week, and this is our final segment here today as we finish up. And last week, there's a place called White Sands in New Mexico that had its 90th birthday. And everybody from New Mexico for sure knows where White Sands is and has been there. Quite the place to go when especially when you're a kid. All the white sand dunes, it's pretty amazing. It looks like something out of one of those Star Wars movies, for sure. So now. You know, there's also something that the historical moment back in January 27th on this date is 19 and 1973. The Vietnam War came to a close with the signing of the Paris Accord. And, boy, that was a that was a long and long and tough one at the time. So that that ended then as far as, you know, the the other things we have here, there's another one that is on January 28th as far as a birthday goes. And this is something that I used to hear about quite a bit because it's on this date in 1949. Coach Gregg Popovich was born. I heard a lot about him because my brother lived in San Antonio and he's widely regarded as one of the greatest coaches in professional basketball history. He won the NBA championship five times as head coach and also was a gold medal winning coach at the Olympics in Tokyo in 2020. So that ends up our show for today and hope you have a great rest of your Sunday and a great week. This is Jeff Holmes and our producer, Matt McClure, signing off for now.

Producer:
Thanks for listening to. Rest assured retirement, you deserve to work with an experienced and licensed expert who will strategically work to protect and grow your hard-earned assets to schedule your free no obligation consultation with Jeff. Visit RestAssuredRetirement.com or pick up the phone and call 480 454 9191. That's 480 454 9191.

Producer:
Assured Financial is an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives. This material has been prepared for information on educational purposes only. It is not intended to provide and should not be relied upon for accounting, legal tax or investment advice. Advisory services are offered through Foundations, Investment Advisors and seek Registered Investment Advisor. Certified Financial Fiduciary. Cff is issued by the National Association of Certified Financial Fiduciaries. Cff is reserved for financial professionals who have successfully completed a certification and training process established by the CFF and the AFIA.

Producer:
Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC.

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