Government Expectations

Episode Transcript

Speaker 1 (00:00):
Good afternoon friends. You're joining the Greg Hicks Show with
Bo and Wanda today. We hope you're enjoying spring coming
soon because it can feel it. It's wavering back and forth,
but I feel like it's coming, and we've seen snippets
of it. So I'm really excited about the weather getting warmer,
and I hope you are too. We are with a
firm called Financial Resource Management located in Raleigh and at

(00:22):
the Crystal Coast. You have two opportunities to listen in
every Saturday and Sunday at two pm, so call your
friends and let them know to tune in as well.
You can also reach us by calling nine to one
nine A five six, nineteen sixty eight. We'd love to
meet with you complimentary. Not much free in this life,
but that is again nine one nine A five six,

(00:44):
nineteen sixty eight. You also can check us out on
the web f rm NC dot com. That's f r
M like Frank Roger mary NC dot com. But if
you do want to meet, calling the office and leaving
a message is the best way. Today we're going to
talk government and all that they do to make our
life miserable.

Speaker 2 (01:05):
I thought they made our lives better.

Speaker 1 (01:07):
Oh yeah, well maybe yours. I didn't mean to say
that the government.

Speaker 2 (01:14):
Is a good thing, but they can't watch it. They
can't make your life, they can make you disappear one.

Speaker 1 (01:19):
But government regulations do affect all of us in some way.
So we're going to spend some time today when we
get back on our next segment, starting that hoorah about
what the government does for us and doesn't do for us.
But first let's talk about news that's out there. Is
there any news out there?

Speaker 2 (01:38):
Well, you mentioned you can feel the spring, and there's
a famous saying in March it comes in like a lion,
goes out like a lamb, and hopefully the market will
follow a suit and history indicates that might actually happen.
So last month or last week, we talked about the
two big teas with hall Edens who joined our show
that are hanging over the market right now. That's Trump

(02:00):
and tariffs, and they certainly shaped to T and T. Yeah, dynamite.
They certainly shaped the market's recent behavior and it's been
a total whirlwind. The Nasdaq, which is the tech heavy index,
had its worst decline since summer twenty twenty two. And
if our listeners are investors. They remember that twenty twenty
two was a really ugly year for the markets. So

(02:21):
I want to try to put some things into perspective
pretty quick, really quick. The Nasdaq took a thirteen percent
hit over the last five weeks. It slid from its
December sixteenth peak of seventeen thousand and four to sixty
eight on March tenth, and it was ugly. But the
good news. The good news is we've been here before,
and stocks behaved similarly three years ago. Back then, the

(02:44):
NASDAK dropped seventeen percent from its high before bouncing back
in mid June, and that bounce back in June shot
the Nasdaq up twenty percent. Then it faded again, and
then it dipped in October, and then it went up
about forty five more percent. So the recent pullback stings,
but we need to look at it more as an

(03:05):
opportunity in my opinion, And as we mentioned last week,
every single time the market goes down, it always feels different.
You're always convincing yourself, well, this time is different. I
know the market goes up and down. You forget the past,
but if you zoom out, you need to understand that
this is normal. Market is cyclical. Everything in life is cyclical,
and the market had to let some steam out. It
was pretty overvalued. The pe ratio, the price to earnings ratio,

(03:28):
which is one way to value the market, was very high.
Warren Buffett has his highest cash reserves in Berkshire Hathaway ever,
and so something is going on. A lot of the
people that are very in tune with this are kind
of moving money to cash. And now that we've pulled
back over ten percent, it's starting to feel a little
more normal. And of course, with Trump and the tariffs

(03:49):
and everything going on, there's gonna be volatility. It's likely
not to be a quiet summer. And so it's a
good time to get your finances in order. And so
if you're a listener, if it's out there who has
been listening for a long time on the sidelines and
not picked up the phone and taking the opportunity to
get in touch with Greg Wander myself, now would be
a great time to do it. Just to make sure
that your portfolio is allocated in a way that you're

(04:11):
not going to fall victim to a market crash if
that's what happens. Put some protections in place, make sure
that you have what you need with your family needs
as you go into your retirement, for your legacy plan,
for your kids, college savings, whatever it is that you're
working on right now, and that your money is intended for.
Let's make sure that it's set up in a proper way,
and yet your risk level is not a little too

(04:33):
far on the on the aggressive side, because that's really
when you get hurt. Our number nine one nine eight
five six one nine six eight is the number to call.
You can leave a message right now when we'll get
back in touch with you on Monday. And we meet
so many fascinating people off this radio show. And it's
interesting here in everybody's story because no one is the same,
and it it it's like a puzzle with every single client.

(04:56):
And we've been doing this for long enough that we
understand how to navigate the different nuances that everybody comes
in the door with. And it's fun to sit down
and pull apart somebody's financial picture and understand where they
are and how they got there and where they're trying
to go and identify the areas that we can maybe
help them kind of restructure to get them where they

(05:17):
need to go without taking on the risk that they're
taking right now.

Speaker 1 (05:20):
It's funny you should say that that we kind of
help people navigate their story. Because I have met with
two older widow ladies mid seventies, and I won't call
any names, but they met with the same radio person

(05:40):
on US radio for this on the radio, and they
had the very same thing.

Speaker 2 (05:46):
And all these two different clients.

Speaker 1 (05:49):
These different radio listeners that came for second Opinion, they
felt something was off. And one was like, Wanda, I
just don't have any money. And I said, what do
you mean you don't have any money? Because I could
see her net worth and she said, I have no
liquid money in my bank account to get to and bo.

(06:11):
When I looked at what they had implemented for this
particular one and the next one as well, they had
her she's seventy eight. They had her in a ten
year surrender annuity with two of them, with every bit
of her money, every bit.

Speaker 2 (06:32):
We I know exactly who that was.

Speaker 1 (06:33):
Well anyway, so what I did was I started I
started unwinding the smaller one. And I met with her
yesterday and she brought a friend in with her as well,
and she said, I cannot thank you enough she said,
I actually have cash in my bank account because you know,
the way I looked at it, we were going to
unwind it. It would take ten years to unwind. Okay, she's

(06:56):
in a ten year surrender, so she couldn't get to
it in ten years anyway. So we're unwinding it over
the next ten years, and she's happy. She's very happy.
And the other one we're just going to leave in place.
She doesn't need the money right now to potentially use
for long term care.

Speaker 2 (07:13):
So two rules age old rules jump out at me there.
One of them is if it sounds too good to
be true, it is, which is I'm sure what they
were sold on. And the other one is don't put
all your eggs in one basket. Absolutely, And we find
that is too common for some of the quote financial
planners that are maybe on the radio that some of
our listeners might go listen to and go sit down

(07:34):
for an opinion and just understand that there are a
lot of semantics when it comes to annuities and sales
tactics that a dishonest financial planner or financial professional might
not cut you in on. And what I mean is,
I'm just going to give you a lesson real quick
on how these annuities work. So there are two different

(07:56):
values and annuities. There's the contract value, I mean, there's
the benefit base. The benefit base is a completely nebulous number,
it doesn't matter, but it's also the number of it
has all the guarantees associated with it. Okay, you're gonna
put your money in here, You're gonna get an immediate
thirty percent bonus, and then your money's gonna grow guaranteed
eight percent every single year compounded, and then you're gonna

(08:18):
get income for the rest of your life. Well, that
thirty percent bonus and that eight percent guaranteed growth, that's
not on your contract value. That's not on the actual
cash that you have in the policy that you just
invested in. Instead, it's on the benefit base. The benefit
base is the number on which your lifetime income is based.

(08:38):
They could simplify these annuities and just say, hey, if
you need lifetime income, well five years down the road,
here's what it is. But instead they make them with
these provisions so that, in my opinion, some of these
dishonest financial professionals can use that as the carrot to
get people in the door and say, hey, man, where
else can you get thirty percent guarantee? Where else can
you get eight percent anualized guarance? Understand, that's not what

(09:01):
is happening that is on this other number of it
really doesn't matter. It's the number on which your fee
is charged. And so your fee is going to grow
at that percent every year. But your actual cash value, no,
your actual cash value is going to have a hard
time growing when your fees growing at that rate. So
this is why a second opinion from an honest financial
planning group financial resource management, Greg Wan and myself. We

(09:23):
can break it down and show you if you've already
gone to get a proposal and solution delivered to you
from one of these other people, we can give you
and I've done this before, we can give you the
nitty gritty on Okay, here's how it actually works, here's
how it WI was sold to you. But here's the facts.
So just don't sign on the dotted line before you

(09:44):
understand what you're doing, because we don't want you to
get hoodwinked. And unfortunately it happens to too many people
out there. Are number again nine one nine eight five
six one nine six eight and I would love to say,
onto bigger and brighter things now. But we're going to
spend this show griping about the government, really.

Speaker 1 (10:00):
And one of those things covers some of these things
like annuities and long term care and things like that,
because the government's not going to take care of you.
I mean, you have to realize it's not going to happen.
And speaking of the government, you have to also realize
when you change regimes or trains or whatever you want
to call them, there's going to be pain. I mean
there was pain in the last administration. For four years,

(10:23):
there was pain. So you know, there was all these
free checks that went out and there has to be
there was bound to be some pain that came with that.
And we knew it was going to be down the road,
and you heard it on our radio show. Be careful
of all this free money because there will be rubber
meets the road at some point. And that's the thing.
When people say all these tax breaks are only helping
the wealthy, well guess what. The wealthy doesn't get those

(10:46):
free checks right that are passed out. They don't qualify
for them. So you know, if you make more money,
you've got to have some kind of tax break. If
you make less money, you get tax break. Of course,
it's not going to be the dollars, of course is not.

Speaker 2 (11:02):
Yeah, that's a good point. There's what's called the M
two money supply, and the M two money supply is
the actual the amount of dollars that are out there
that were maybe not generated by you know, by labor,
and a lot of this money that was sent out
created inflation in that M two money supply. And you're right,
there had to be a day of reckoning at some point,
and I think the current administration is not afraid of

(11:27):
pulling things back to the mean where they need to go.
And you look at what happened in nineteen eighty with
with Reagan. There was a year and a half of
pain with he and Volker as they kind of reset
the economy after Jimmy Carter, and then you look at it,
it was great. Yeah, I mean it was tough for
about a year and a half. But then you look
at what happened in nineteen eighty one to nineteen ninety nine.
The market went up, up, up, up up. Hopefully we

(11:48):
repeat that, but again it's going to be probably a
rocky summer. Our number nine one nine eighty five six
one nine six eight is the place to call. And
you know, we've got so much to talk about about
government regulations and dealing with government expectations. Stick with us.

Speaker 1 (11:59):
We'll be welcome back to the second segment of the
Greg Hicks Show. Good afternoon friends. You're joining us the
Greg Kicks Show with Bo and Wanda, and we certainly
hope that you got something out of the first segment
because we sure were slamming the government and various things there.
But there are good things that are happening as well,
and we want to talk about some of that today.
But you can call us at nine one nine eight

(12:21):
five six nineteen sixty eight to schedule your complimentary appointment.
And it really is complimentary. There is no paperwork. And sometimes,
you know, my radio listener friends will come and they'll go,
I'm ready to do you know something, and I'm like,
I don't. I don't have any paperwork. I mean, we
don't do that. We meet with you, get to know you,

(12:42):
then we talk about the next steps.

Speaker 2 (12:43):
It's a slow process.

Speaker 1 (12:45):
Sometimes people are ready, sometimes they're not. But if you
meet with a radio professional that is ready to tell
you to sign the dotted line, don't do that. Don't
do that. Think pray ever, hoow you make your decisions,
visit with someone else and get all of the knowledge
that you can before you make any decisions.

Speaker 2 (13:05):
Yeah, they're praying on your emotions. You know. They're showing
you all the fancy charts and graphs and saying, all right,
here's how we're going to get you to where you
need to go. Sound good, okay, sign here. What we
always do is we show people. Okay, here's what I
heard from you in the first meeting. And now we're
having the second meeting, and I'm doing a lot of
a talking. You know, I went back to the drawing board.
I talked to people in our insurance department, and I
talk to people in our trust department, whatever whoever I

(13:27):
needed to pull in I did. I've got this proposal
we're going over. But we understand for you. We're taking
forty years of your savings, fifty years of your savings
and condensing it into an hour two hour meeting and
explaining to you, Okay, here's what we would do. Here
are the shifts that we would make. That's a lot
for you to take in and digest in one meeting.

(13:47):
It's like drinking from a fire hose. We're sensitive to that.
So we say you take that information, go home with it,
Let the questions bubble to the surface, get in touch
with us. When you're lying in bed tonight you're thinking,
oh shoot, what was he talking about with this thing.
We don't want you to have that thought when you've
already signed on the dotted line, because then you know
it's a daunting thing. You're like, oh gosh, what have
I done? And then you know you're like one of

(14:07):
the people that we mentioned in the first segment that
comes into our office. I've signed my life away to
these four different annuities that I can't get my money
out of for fifteen years. That's not who we are,
if it's not what we like. We want things to
go you at your pace, so that you're comfortable and
that you fully understand everything. It's a relationship based business,
and this is a long term commitment. We're going to

(14:28):
be working with you throughout your retirement and leaving your
legacy and all that kind of stuff, and we want
you to feel that the first day you meet with us,
not that we're rushing you along. And so this is
going to go at your pace and it's comfortable, and
so we would love it if you would reach out
so that we could meet you here. Your story our
number again nine one nine eighty five six one nine
six eight. All right, Wanda, let's gripe.

Speaker 1 (14:48):
Oh yeah, well we're talking about it. Let's start off
with ras and for one ks and the like, because
the biggest wealth accumulator for people out there is is
there for k and their iras. That's what they've saved in,
that's what they've done. And what does the government say, Well,
you can't get to your money till at least you're

(15:10):
fifty nine and a half without a penalty, but you
have to start taking it at seventy three. I mean,
it's moved the you know, the chess pieces moved from
seventy and a half to seventy two and now seventy three.
So unfortunately, the people that had to start at seventy
and a half, they didn't get the benefit of seventy three.
So they tell you have to start taking it, and

(15:33):
you can delay it, you know, till April of the
next year, but you're gonna have to take two. So
I never tell people to do that, and the penalty
for missing that required distribution on any level. Like if
you have a good number of iras with one firm,
but you have this one loan IRA at another firm
or four to one k, you still have to take it,

(15:54):
you know, don't forget it, because you would pay a
twenty five percent penalty, and if you explain yourself way,
they'll reduce the penalty to ten percent. How nice.

Speaker 2 (16:05):
Yeah, you know. I am in full support actually of
the fifty nine and a half rule because what that
does is it discourages you from taking your retirement assets
too early. And so it says, hey, mister forty year old,
if you touch this IRA or four to oh one
k outside of you know, some qualifications for you to
get it exempted, well, then we're going to slap you
with a ten percent penalty. Plus obviously tax is on there,

(16:27):
and there's some there's some disadvantages in rawth iras too.
They'll hit you with taxes on those as well, when
traditionally those aren't tax Well. I like that. I like
the fact that they've put a number in they said,
this money is for you, but not for you right now,
it's for future you down the road. We don't want
you to be mad at yourself now for spending all
your retirement dollars, and so I think that's great. So

(16:47):
fifty nine and a half is for you, seventy three
that's for them. That's them wanting to collect their tax revenue.
Because what's happened is you've spent your working career getting
a tax break for putting all this money in four
oh one K plan. You know, you make one hundred
thousand dollars a year and you put fifteen thousand and
a four to one K. You're only paying taxes on
eighty five thousand.

Speaker 1 (17:06):
That's right.

Speaker 2 (17:07):
That fifteen you put in the four to one K
grows and compounds. Now you get to retirement and you
got two million bucks in a four oh one K.
That's great, But when you hit seventy three, it's typically
around four percent. That first year you got to take RMDS.
So that's eighty thousand bucks in that example, which you
have to take out of your four to one K
fully taxable. It stacks on top of everything else. You

(17:29):
got any rental income, social Security, pension income, all the
other stuff, and so you're going to be taxed at it.
But how about some loopholes. There's some strategies for making
that non taxable, like giving it to charity. It's a QCD.

Speaker 1 (17:43):
One okay, quality, I'm sorry. You can transfer your RMD
or require minimum distribution to a charity, don't have to
pay any taxes. I have people that do that. I
have people that do part to charity and they keep part.

Speaker 2 (18:00):
Yeah. So if you tie it to church with a
lot of people do, or you're passionate about Saint Jude's
or Children's Flight of Hope, whatever five oh one C
three organization, nonprofit you want, like wanna say, you can
give your RMD required a minimum distribution directly to a charity.
And what that does is it makes the charity receive
all that money in that previous example, eighty thousand dollars

(18:22):
goes to your church, or you can spread it out
between multiple charities. And who's standing on the street corner
in the rain with their handout, Uncle Sam, he ain't
getting anything. The taxman gets none.

Speaker 1 (18:33):
With a black hat, a black suit, can't see his eyes.

Speaker 2 (18:37):
Yeah, his mascar is all over.

Speaker 1 (18:38):
He's got his basket out there. But you know, not
only can they do charitable contributions, but and bo. You
do this a lot more than I've done in my career.
But you can do a Wroth conversion because that doesn't
have an income limit right right if you are let's say,
and where this might make make sense is if you
have a gap in employment. Let's say you're not gonna

(18:59):
be employed, you've been laid off, you're not gonna be
employed for a year or whatever. That would be the
time to do a Roth conversion. Is your income's low,
Because your income is low, so I think you take
advantage of that a lot. But a Roth conversion makes
a lot of sense. And I think you've done unless
they've changed the rules, a backdoor wroth.

Speaker 2 (19:16):
I have, and so you can do Roth conversions at
any age. I have a buddy of mine in Atlanta
who I work with, and he and I'll loop this
into the to the back door Roth strategy. But he
had I don't know, like fifty thousand dollars in an
old four oh one K and he'd rolled over to
an IRA and I said, hey, man, why don't we

(19:37):
just convert this full fifty thousand dollars to a roth?
And he was like, that sounds good. What does that mean?
I was like, well, you know, fifty thousand is going
to be added to your earned income next year, and
so you're gonna taxes on that. You. I don't want
that to catch you by surprise. You'll probably have to
pay whatever it is, fifteen thousand dollars out of your
you know, out of your bank account to pay this
tax bill. But now you're going to have fifty thousand

(19:59):
dollars in a wroth. What's the benefit of that. Well,
he's about my age, he's thirty seven years old, and
so he's got at least twenty plus years till he
can touch this money. My philosophy is, why don't we
get the growth post tax? Yeah, that fifty thousand dollars,
let's go ahead and pay taxes on it now. While
it's fifty thousand dollars. We'll put it in an account

(20:19):
that's never going to be taxed again. That fifty thousand
grows to one hundred, goes to two hundred, goes to
four hundred thousand, and then when he's the time to
take it out, he's got all that four hundred thousand dollars.
That's one hundred percent his and his family is he's
not having to split it with Uncle Sam. Uncle Sam
is at the front door with a wroth as opposed
to the back door. Well, what's a backdoor wroth? The

(20:39):
backdoor wroth is when you make too much money to
do a traditional wroth, and that's for married couple filing jointly.

Speaker 1 (20:45):
It's about the thing. I don't know why they have
these income limits.

Speaker 2 (20:47):
I think that I don't either. I don't either. You know,
it's about two hundred and twenty thousand dollars two hundred
and thirty thousand dollars. If you make over that as
a couple and then you cannot do a wroth, you
can do what's called a backdoor wroth, where you'd make
a non deductible IRA contribution and then you immediately convert
that over to roth. The caveat is you cannot have
any IRA assets to do that, So you cannot be

(21:10):
holding any money in any other iras to do the
back door roth strategy, or it gets really messy down
the road. And that's one reason we converted my buddies
pre tax IRA over a to a wroth. And so
this is probably making some clients had spend an easier
way to figure all this stuff out, and as it
relates to you. Is just to give us a call
and we'll sit down with you and talk about how

(21:31):
some of these strategies could work into your plan. Nine
one nine eight five six one nine six eight And
holy smokes, we have only covered one of our bullet
points in the first segment of our show to cover yeah,
and our producer just got in the window, so we
got to take a break. We're gonna come back and
we're going to try to run through the rest of
these y'all, please stick with us. We'll be right back.

Speaker 1 (21:51):
Welcome back to the third segment of The Great Hicks
Show with Bo and Wanda today. So we hope you're
hearing some information that pertains to you is good for you,
So give us a call. Nine one nine a five
six nineteen sixty eight. Is the best way to find
out what that one little piece of information that was said.
It's complimentary. We'd love to get to know you. We

(22:12):
have listeners that come in and say I feel like
I know you. I've listened to you for ten years
or fifteen years, So don't be that person. Just come
on in. Nine to one nine A five six, nineteen
sixty eight. And today we are talking about how to
deal with government regulations or expectations, and one of those
things that is government, you know, big time government. Social Security.

(22:36):
That's been around a while. And I've got some ideas
on Social Security and how they can make it last,
but you know, I don't know how to get it across.
I'm going to end up writing a letter to the government.
But anyway, social Security, they say, is running out of money,
so it does need an overhaul for sure. But Trump

(22:56):
has not said he's going to cut social Security out.
I don't know how that rumor meal got going.

Speaker 2 (23:02):
But you said he was gonna make it tax free.

Speaker 1 (23:05):
Yeah, I mean, I don't know what people think. But
social Security is dwindling, so there has to be some
things that that changes.

Speaker 2 (23:16):
Now.

Speaker 1 (23:16):
One of the things I think should change is at
one sixty eight one hundred and sixty eight thousand, they
don't withhold social Security anymore. So I don't I think
social Security should be withheld on all money.

Speaker 2 (23:29):
Totally agree. What make if somebody makes one million, one
hundred and sixty eight thousand dollars and then their brother
makes one hundred and sixty eight thousand dollars, both of
them are paying into the Social Security Administration at the
same rate, the same amount of dollars. One of them
makes a million dollars more than the other one. But

(23:50):
like Wanda said, any any income above one hundred and
sixty eight thousand does not go into Social Security, and
it should and it totally should.

Speaker 1 (23:57):
Yep, and nobody would miss it. I mean, we all
know those withholdings come out of our check. I can't
even look at it because it's so depressing, so I
don't so I just look at the bottom line, and
I honestly don't think they should stop Social Security withholdings
on anybody.

Speaker 2 (24:13):
No, I agree, And then you think about it. They
give you the Social Security back and social Security is
effectively there as a government sponsored program for retirement savings. Okay, great, Yeah,
the benefit or the intention behind it is good. But
then when you get your Social Security it's taxed again.
Why is it tax that's my money? You're double dipping.

Speaker 1 (24:34):
Yeah. Well, another thing that doesn't make sense is some
of us who are full Social Security agent chose to
go ahead and turn it on. We're penalized because of
the income level. So our Medicare Part B is through
the roof and we have to sign up for it.
If we work for a company with less than twenty employees,
we're forced to. So there's just things like that that

(24:57):
doesn't make any sense. And I think and do away
with the with the if you take social Security early
you can only make such so much money. Why do that?
Because if somebody makes fifty thousand a year, they're paying
Social Security on it, So why limited to twenty three?

Speaker 2 (25:14):
Yeah, they're paying back into the system exactly.

Speaker 1 (25:16):
And those of us said are taking social Security and
paying in, we're paying in what we're taking out, So
why penalties. It just doesn't make sense. It really doesn't.

Speaker 2 (25:26):
Here's an unpopular take, but for a young guy, I'm
in full support of sliding the start date on Social
Security back from sixty two to maybe sixty four or
even sixty five. At sixty five, it would line up
with medicare. A lot of people out there will hear
that and say, oh, how dare you? But here's the thing.

(25:46):
The last time they made major changes to the Social
Security system was Ronald Reagan, and those changes are still
taking place today forty years later. And so it's not
a cut and dry Okay, we're gonna do this, and
it takes effect tomorrow. It's okay, here's our plan, and
we're going to roll this plan out over the next
twenty thirty years, so it's gradual. For me, I'm fine

(26:06):
taking social security at age sixty five because it would
preserve the system a little bit. Social Security came out
in the thirties. Back then, the average life expectancy for
men was fifty nine point nine, not even sixty years old,
so men were not even expected to live to social
security age women sixty four, and so women were expected

(26:28):
to you know, the average woman two years of social security. Well,
now the average life expectancy is seventy seven and rising
because of advancements in healthcare. It's great, but don't you
think the social security system should reflect that that has
not been changed since the thirties. Other things have changed,
and so I think they need to get with the program.

(26:48):
You know, France rolled back their start date for their
pension system from sixty two to sixty four, and they
I think they did that immediately, but there was a
huge revolt in the street because there were people that were,
you know, sixty two sixty three looking to take that money.
And then all of a sudden, France said Nope, you're
gonna have to wait a couple of years. And so
I think it needs to be done, but I think

(27:09):
it needs to be gradual. And there's several other things.
We've got a whole show on social security, and in
a way, that show, at least part of it, is
also a gripe sessh because there are so many things
wrong with the system and there's some clear reasons that
it is going broke, and they say it's going to
go broke by twenty thirty three. Don't think that that
means you're not going to get social security. Social Security

(27:30):
will always be there. It'll just have to come from
somewhere else, and it'll make our national debt problem a
little worse. So we do need to address these things.

Speaker 1 (27:37):
Yeah, but if they do some of these changes that
the people on the street realize they need to do,
it could salvage it. So that's just that's my feeling.
But anyway, how does social security play into your plan? Well,
what I do when I meet with clients or radio listeners,
we talk about what is the fixed income that you're
going to get in your retirement income journey. Social Security

(28:01):
is one of those pieces because it is fixed and
then if that amount cannot cover the fixed expenses, then
we look for other avenues to implement to get another
fixed source, especially if they don't have pension, or maybe
sometimes they have social Security and pension and it's still
not enough to cover the fixed Sure, So you heard
us talk about annuities, and annuities are a good way

(28:23):
of covering fixed expenses. So I look for a way
to back my way into what does that dollar amount
need to be? And then between the annuity, the pension,
the social security, I want all of their fixed expenses
covered right then after that it's discretionary.

Speaker 2 (28:39):
And that would be carving off, you know, for the annuity,
maybe ten to fifteen twenty percent of a client's total
liquid investment portfolio. And so what we do is we
take all, right, you know, you got two million bucks,
maybe we take three hundred thousand dollars, and we buy
this private pension effectively, and this is going to be
guaranteed income for the rest of your life. Why are
we doing that because now with your social security, your pension,

(29:02):
your rental income, and this new private pension, we're more
than covering your fixed expenses. Like Wanda said, the money
it takes to keep the lights on and keep your family,
keep food on the table, all that, and then that
leaves the remainder, the other eighty percent of your portfolio
to kind of grow and be there as a rainy
day fund, as a travel fund, gives for the grandkids.

(29:24):
Takes a lot of stress out of your financial life,
you know, So when you turn on CNBC and Cramer's
yelling at you about how the world is falling apart
and the market's never going to come back, You're like, oh, well, bo,
Wanda and Greg put that plan in place so that
I've got income guaranteed so that even if the worst
thing out there happens, I know that I'm going to
be covered. From a must have perspective, that's a great

(29:47):
way to do it. Just build yourself kind of a
baseline of guaranteed income and our number nine one nine
eighty five six one nine six eight that's a good
place to call if you want to come in and
sit down with us and see how that could work
for your plan. Other thing I tell clients about these
types of investments because annuities is a four letter word,
and in some ways, long term care can be a

(30:07):
four letter word. For clients too, and so I'll tell them, Look,
my job is to educate you, and so I want
you to fully understand how this solution works before you
sign it off, and after we sit down, we talk
about it for an hour and you can ask the
questions and everything. If you still say after understanding it,
that's not for me. I don't ever want to do that.
You're never going to hear me bring it up to

(30:28):
you again. But I think it's doing you a disservice
not at least putting a strategy or an idea in
front of you that could really help benefit your situation.
So again, we're not pushing a relationship base. We love
to sit down with you and hear your story. Nine
one nine eighty five six one nine six eight.

Speaker 1 (30:44):
Yeah. I met with a client recently that we did
that very strategy and he's going to retire in about
five years. And he said, you know, what went over
his market performance and things like that, and what was
happening lately in the market. He said, you know, because
I did that annuity, I'm not He said, you put
a safety net around me, and I'm not worried. So

(31:04):
he's okay with taking a little risk because he's got
all of his fixed expenses covered or we'll have So
you know, there's a peace of mind that goes with
working with a good advisor and a peace of mind
in retirement when you're working with a good advisor. So
just want to encourage that. Give us a call nine
one nine eight five six nineteen sixty eight.

Speaker 2 (31:25):
And there's so much more to factor into, whether it's
your retirement plan, your kids education plan, your legacy plan. Again,
we look at it from all aspects, and we are
planning based, and so we've learned about taxes, and we've
learned about insurance, and we've studied all of these ancillary
pieces that can fit into your financial plan outside of

(31:48):
just the investment management piece. And I hope you're gathering
that from what we're saying today and what we say
on previous shows. We're so much more than just investment managers.
We want to kind of hold your hand and help
you with all the different strategies at your different points
in life and on your financial journey. So our number
nine one nine eight five six one nine six eight
is the place to call, y'all. We've got one more segments,
so please stick with us. And we'll be right back.

Speaker 1 (32:09):
Welcome back to the last and final segment of The
Great Kicks Show. But again, if you didn't hear it all,
or maybe you want to listen to it again, you
can go on one o six one FM Talk and
they have all of our shows archive. We also have
them on our website f rm NC dot com. That's
Frank Roger Mary nc is in North Carolina dot com

(32:29):
and you can pull up any show and listen to
it again. But anyway, we're talking today about how to
deal with government expectations and regulations. And we've we've talked
about iras and requirementium distributions and social security. But let's
talk about taxes. You know, the taxes. We're coming up
on tax season, of course, and it was extended to

(32:52):
May first, but a lot of the CPA firms are
still treating April fifteenth, so they can get most of
these out, but May first is the deadline. And none
of us like paying taxes. I always get a tax
bill no matter what I do. It's like I can't win,
you know, so I'm gonna get that tax bill. So
but there are things you can do to reduce taxes.
You can do charitable giving, you can set up a

(33:15):
way to withhold more taxes in your plans or your
retirement plans when you're taking required distributions. That's all kind
of ways to minimize that bite that you get every
April fifteenth or this year May first. But you know,
the bottom line is these job taxing job cuts are
due to expire, I think the end of twenty twenty five,

(33:36):
but Trump is trying to push them forward now. As
a financial person that's been in the industry a long
long time, and I've worked my way from the bottom
up both so I can speak from being low salary
and paying taxes to being you know, a little more
moderate that kind of thing. And I can't stand it
when people say the tax cuts only hell the rich.

(34:01):
That's not true. Now, if the rich make a million dollars,
their tax cut is going to be larger. If you
make fifty thousand year old at yours is not going
to be as much. I'm not sure why people don't
get that. I mean, it's not that anybody's trying to
make it unequal, but if somebody makes more money for
various reasons, they work their way up the ladder or

(34:22):
whatever their tax cut will be more impactful because there's
more money to get the break on.

Speaker 2 (34:28):
That's a good point. Another way to look at it
is tax cuts are for the people who actually pay
the taxes. Yes, that makes sense, doesn't it. Yes, you
cut taxes. Who does that impact? You know, it impacts
the people that pay taxes? What do you mean by that?
All right, let's pull that apart. The top one percent
of earners paid forty two point three percent of all taxes.

(34:50):
The top one percent, so that's one percent of people
out there paid almost half the taxes. The top fifty
percent of earners out there. So you just take half
of the American popularation that earns money. It paid ninety
eight percent of the taxes. Effectively, it's like ninety seven
point seven or something. And so that means the bottom

(35:11):
fifty percent pays only two to three percent of the
overall taxes. And sure they're still getting a tax cut,
but you hit the nail on the headwind. That's not
as dramatic and a dollar value, it's going to be
less because we want to we want to help us
and effectively think the people who are out there paying
into this government and this system. And we do that

(35:35):
by cutting taxes. Well, when you cut taxes, it only
impacts the people who are actually paying those taxes.

Speaker 1 (35:40):
Oh come on, yeah, exactly, That's that's my point. And
also when there's tax increases, the people that make more
money pay more taxes. The people that make less money
pay less taxes. Right, So we just I don't know,
it's just the you know, plumb line has gotten off
kelter here where we the expectations. I think all this
free money that was doled out, well, the government needs

(36:03):
to keep helping me. The government needs to make it
better for me. I mean, you know, the government is
the government, and you can only be so middleman. I mean,
if you're making more money, you're going to pay more taxes.
If you're making more money, the tax breaks are going
to help you more. If you're making less money, you
pay less taxes.

Speaker 2 (36:20):
And I'm all in favor of a flat tax.

Speaker 1 (36:22):
I am totally in favor of that.

Speaker 2 (36:24):
I've seen the math on it, and it makes sense
for everybody everywhere. We're not doing that.

Speaker 1 (36:29):
I just don't understand it.

Speaker 2 (36:30):
And to me, because CPAs need a job, well.

Speaker 1 (36:34):
If anybody could get that done would be Trump because
he's a bulldog on stuff like that. But and then
we call it would be some pain initially as well.
But if everybody pays ten percent, if you're low in
you pay ten percent, if you're high end, you pay
ten percent. So it stands to reason the high end's
going to pay more on their ten percent than the
low end, right, So what are people going to gripe

(36:54):
about at that point? I'm just I don't know that
people can be happy.

Speaker 2 (36:58):
No. I agree, when you pay taxes and what happens
to that money, well, it goes to the government and
they spend it. However, the heck they they disclosed lately.

Speaker 1 (37:05):
I'm absolutely mad about here right right.

Speaker 2 (37:08):
And so you see these organizations or you see I
guess Elon Musk and the Doze Department of Government Efficiency
going in and pulling apart all the wack of doodle
stuff that our tax dollars have gone to fund. I mean,
so many vacant buildings in DC and elsewhere that are
government buildings that we're paying like inordinate amounts of rent

(37:30):
on for no reason at all. People that are collecting
Social Security checks who are one hundred and seventy eight
years old, like we either need to stop that payment
or send the Guinness Book of World Records to that
person's house because that's the oldest person in the world
by fifty sixty years.

Speaker 1 (37:44):
Well, my thing is for all those people that got
it that shouldn't have, we're never going to get it back.
We're not going to even.

Speaker 2 (37:51):
Ask for it all like the PPP lines, we're not
gonna get.

Speaker 1 (37:53):
That and we're not going to get it back. So
that that's frustrating in and of itself, because I can
assure you if the government has sent me more money
then they needed to, they'd be going to my bank
account right now retrieving it. That's just the bottom line.
So I just it's really frustrating because I hear people saying, oh,
they didn't really send money to those people, that's just

(38:14):
database problems. Well, okay, all right, to your point, if
you want to believe that, then why there is the
database buying? We had all these government employees working. Why
didn't somebody clean up the database?

Speaker 2 (38:28):
Why don't you care what's happening to your money? You know,
you make whatever it is, Okay, you make maybe five
hundred thousand dollars a year, and I mean that means
you're paying probably two hundred and forty thousand dollars in taxes.
That's a heck of a lot of money. It feels
normal because it's what.

Speaker 1 (38:43):
You've always done, a Ukrainian rapper.

Speaker 2 (38:45):
But what happened, right, What happens to that money once
it gets into the government's hands. Don't you care about that?
I mean, sure, Elon Musk might be a polarizing individual,
but I think what he's doing is good. And we
won't get too deep into politics. But it's easy to
gripe about, isn't it.

Speaker 1 (38:59):
It is well and in the bottom line is I
think if you know, I've always thought that there should
be a task force of regular citizens, tax paying citizens,
to put an arm some arms around the White House
to do checks and balances. I've always thought.

Speaker 2 (39:16):
That it's so easy to corrupt politicians.

Speaker 1 (39:18):
I know, and I see that's what Elon Musk is doing.
Like him or love him, that's what he's doing. So
I'm in favor of it, you know. And if he
wants to take a break and put me in there,
I'm happy to do that.

Speaker 2 (39:31):
I would love to see you in there.

Speaker 1 (39:34):
I would love to be in there. So again, with
taxes and everything, when there's a change. There's always pain,
so we have to be ready for that. It's just
like in your own budget. Somebody gets laid off. There's
pain in the budget.

Speaker 2 (39:48):
But how do we help you from a tax perspective
to the listener? And you know, I remind people all
the time it's not what you make, but it's what
you keep. And so are you making money in the
right way. I'll tell people about, you know, high yield
money markets. I've got clients with several hundred thousand dollars
sitting in banks, you know, various banks. I got, you know,
two hundred and fifty at this bank, for five hundred

(40:09):
at this bank for my husband and I just so
we can get the FDIC insurance. Because the money market
rate is great. Okay, let's talk about some weaknesses there.
All right, you're getting four point two percent four point
three percent on your say, million dollars. That's forty two
thousand dollars a year risk free. That's pretty dang good. Well,
one weakness with a money market is that rate can
change at any point. Well, I got CDs, so I'm

(40:31):
locked in for a year. Okay. Well, a weakness with
CDs and money market is it's taxed at regular income rates,
and so that for forty two thousand dollars that you're
getting in that million dollar example, you're paying full taxes
on that. You know, whatever your income is. If it's
twenty five percent plus state taxes, you're losing a third
of that money. So you're really only taking home, you know,

(40:52):
whatever that math is, twenty eight hundred bucks or twenty
eight thousand dollars. Instead, why not look at some US
treasure US treasuries. First of all, you're not state taxed
on it. Second of all, if we buy what's called
a treasury zero, which is a treasury that is one
hundred percent, the gain the yield to maturity is one
hundred percent from the growth you get. Well, then it's

(41:14):
long term capital gain. If that treasury is over a year.
Capital gains are taxed at zero percent if you make
up to eighty thousand dollars in their tax I think
it's around eighty thousand dollars. And then it's tax at
fifteen percent if you make up close to five hundred
thousand dollars. And so now fifteen percent is what you
have to pay on that growth that you get, as
opposed to the full income rate. So I know a

(41:36):
lot of people are sitting on cash right now, and
that's fine because cash is paying. But there are better ways.
And if you want to, if you want help navigating
your uh your total retirement plan from a tax perspective,
to make sure that you're doing everything you need to
do and that you're aware of all these little tricks
and nuances, give us a call. We'd love to help
guide you through that. Nine one nine eighty five six

(41:57):
one nine six eight. Y'all, We've got so many other
points to cover, but we are getting the cutthroat sign
from our producers, so we've got to wrap this up.
We so appreciate you listening this week and every week.
We'd love to hear from you and sit down and
hear your story. Nine one nine eight five six one
nine six eight. Have a great weekend, and remember this,
it's your money, it's your future, don't blow it. Advisory

(42:18):
services through Capital Investment Advisory Services LLC. Security is offered
through Capital Investment Group Bank Remember FINRA and SIPIC one thousand,
et six Forks Road, Raleigh, North Carolina nine one nine
eight three one twenty three seventy Past performance is not
indicative of future results.