Income Strategies During Retirement

Episode Transcript

Speaker 1 (00:00):
Hello, everybody, Welcome to the Greg Hicks Show. After a
tumultuous week.

Speaker 2 (00:05):
Of things going you have a yellow yellow.

Speaker 1 (00:07):
Yellow, that's right, including the smug from polland But anyway,
I'm Greg Hick, certified Financial Planner along one to Cooper
Financial Advisor and Bow Nicholson's certified Financial Planner. So we
have a great show today on retirement income planning. But
we have another segment, as usual we do on our

(00:28):
show early ten minute part. What's going on? And there's
a lot going on, So let me just start. I'll
do two little headlines and then I'll let Bow and
want to just run S and P. This is headline
S and P nasdaclog the worst quarter first three months
since twenty twenty two. And y'all remember twenty twenty two

(00:50):
was really bad. The S and P was down nineteen
and a half. So that was the last bad year.
So here we are. But I just for fun, right
after the Trump and pnouncement on tariffs, the opening bell,
I just wrote down a couple of things that are fascinating.
The S and P's down three point four. The Dow
was down two point eighty six, and as that down

(01:11):
almost four three point nine eight. So in addition, I
always pull up the top gainers every a couple of
times during the day, So even in the chaos, top
gainers of the day, You're ready, y'all. Goodyear. Tyron Rubber
was up two point four eight at the Bell, American
Tower Company up eleven point oh five at the opening Bell,

(01:35):
Astrasennega up four point four to six percent at the
opening of the Bell, Unilever four point one four at
the opening Mandeleez the food company, the Old Craft Company
up four and a quarter, and Kroger up three point nine.
People love food, obviously, so when things go bad, buy food.

Speaker 3 (01:57):
So I noticed Astrasenica and there's another one you said
in their Unilever. Those are not domestic companies, are they.
Those are international, international Europe. So it's interesting with the
with the tariffs, there must be some so.

Speaker 2 (02:09):
Consumer goods too, So that that's yeah, a big thing.
But yeah, good. But I was gonna say, I'm sorry.
The thing about it is the SMP. Remember we were
getting I was getting those calls. Why isn't my mom
in the SMP? You know, I'd get these joint calls
with mom and elderly and why am my mom in
the S and P. She could have been up thirty percent. Well,

(02:32):
you just read what the S and P is struggling.
That's why you're not all in the S.

Speaker 3 (02:37):
Right, And let's talk about the S and P. Other
than a little more detail. Everybody's heard about the Magnificent seven.
These are the big tech companies, the Tesla's and the
Amazons and videos that make up basically thirty five percent
of the indexes performance. That's what it was last year,
So over a third of the indexes performance was driven
by these massive companies. Because the S and P five

(02:58):
hundred is what's called a rice weighted index, So even
though there's five hundred names in it, the seven biggest
companies are such behemoths that they have that much pull
on the index, and so when they go up, the
market follows and suit when they go down, same thing.
So to Greg's point about the first quarter being the
worst in several years, the S and P five hundred,

(03:20):
this this is from Wednesday of this week, so before
the big collapse on Thursday, you're to date, the SP
five hundred was down about five percent. The Magnificent seven
was down fifteen percent. The S and P five hundred
without the magnificent seven. So let's just say you take
those seven names out and you guess this is the
what it is. It's positive other the S and P

(03:46):
four hundred and ninety three was positive on that, how
about that?

Speaker 2 (03:51):
But they hold such a big, big, big giant company.

Speaker 3 (03:55):
And that's the thing. That's the deal with the index,
and so the dal Jones works a little differently. It's
all equal weight to and so it's important to understand
these nuances when you're investing because if you go out
and you take Buffet's advice for a new investor, hey,
just go out and buy an S and P five
hundred index fund, it doesn't always make sense. Greg and
I were talking yesterday that we think the what's called

(04:17):
efficient market hypothesis, the efficient frontier is kind of dead
because of the way that the market's working now and
just the fact that anybody can get on their phone
and hop on their Robinhood account and buy this sell
that you got like twelve year old kids buying and
selling options. It is the wild West in a way
in certain corners of the market. And so it's more
important than ever right now to be working with a

(04:37):
trusted advisor team who can help you navigate those challenges
and also build some things in that are maybe not
as market dependent. Today we're talking about income strategies. A
lot of the income strategies that we might employ for
you would be just that way and not dependent on
the market, so you're not as concerned when you have
things baked into your plan like that when the market

(04:58):
does what the market did on Thursday and drops three
and a half percent at the open.

Speaker 1 (05:02):
And you know those the ones that are up big,
all of them except maybe Kroger have big dividends. Yeah.

Speaker 2 (05:08):
The other interesting thing is, and we do this in
our practice, and I've had a lot of more younger
crowd moving this direction. Those big bad boys out there
are the annuity world. I'm not saying this is what
everybody should do, but when I get the calls about,
you know, from seventy five year olds or even fifty

(05:28):
year olds that go, I want to be in the
S and P, but I don't want to lose a
whole lot. Well there's only one way to do that,
and these the annuity world does offer a way to
invest in the S and P and the indexes available
and minimize the risk you can choose a risk buffer.
I love that idea, especially if you're nervous. You know

(05:51):
you need to be invested, but you're nervous about how
much loss you might take. You can do a twenty
percent buffer, which means if the market goes down thirty
year down on ten, you can choose a ten percent buffer.
Market goes down ten tore down nothing. So it's kind
of a nie concept to allow people to take risks
and not you know, lose a whole lot in the interim.

(06:13):
So we they're called Ryla's And it was interesting that
Financial Advisor magazine did a whole article on it, and
it's said that more and more people are moving in
that direction because they're tired of the flip flopping and
that they just that's right. So I think it's something
to consider. Give us a call at nine one nine
A five six, nineteen sixty eight to see if this

(06:34):
might work for you.

Speaker 1 (06:35):
Do you all want to guess how much gold is
up this quarter?

Speaker 3 (06:38):
It's up past three thousand.

Speaker 1 (06:39):
I know, it's just run out. What is that twenty? Yeah,
so gold is living up to its old history. When
chaos rains, gold goes up when everything's fine, gold kind
of mellows. And by the way, sometimes Klein will mention
bo you mentioned our show today we're going to talk
about income and retirement. How much dividend to gold pay zero?

(07:02):
So if you want dividends, another angle would be to
buy a goal mining stock or an ETF.

Speaker 2 (07:09):
Mutual fund ETFs that has.

Speaker 1 (07:11):
A goal mining in it. They pay decent dividends when
gold is up. But anyway, it is funny how you know,
be careful of what you hear on the media. I'll
give one more example. So I had a lady call
this week and she's terrific. She's been a client for
like twenty years. Was always a little nervous, so she
did moderate risk and we have a mix of mutual
funds and ETFs and money marketing and stocks. And she said, Greg,

(07:35):
I got her not it was like the end of
the first quarter, where do we stand. I'm getting nervous.
So I'll pull it up to the first quarter. One
of her counsels up two point five percent and the
other one was up one and a half. And she
went wow, and I said, surprise again again. She missed
the twenty three percent game last year, missed also the

(07:56):
nineteen percent down in the S and P in twenty two.
So it's a compromise, right, you can't have everything, So
she compromised and she was literally amazed that she wasn't
down for the quarter. Now that was before the big
crash of Thursday.

Speaker 2 (08:10):
That's what dividends do too. I know, you buy a
lot of dividends and when I have reviews and go
through these reviews and go, yeah, you might have missed
the thirty percent S and P upside, but you also
missed the thirty percent drop. And when you look at
their risk tolerance and they're doing four and a half
or five or six, even though they might be withdrawing money,
they're happy.

Speaker 1 (08:30):
Yeah, that moderate risk works. You just have to be
comfortable with what you feel good about, you know. Yeah,
and don't listen to the news. Good grief. I had
a guy call me this morning. I bet you've been
inundated with calls, and I said, you're the first call.

Speaker 3 (08:45):
He was like relations.

Speaker 1 (08:48):
And he said, well, I am a little. I said,
you're nervous. I get it, but the first call anyway,
it's just funny. Yeah, but anyway, that reminds me of
the relationship that you should have with an advisor. Gosh,
you know, we don't want to. We don't we don't
want to be called handholders, but at times like this
and chaos, we hold hands. H we do hold a
class hands. It's okay.

Speaker 3 (09:09):
We're proactively reaching out to our clients, but we don't
want you to be the one to have to pick
up the phone and call us when you're nervous. And
so what we do is oftentimes we'll send emails and say, hey,
look everything is fine. Here's here's how we can unpack
these tariffs. Don't listen to the all caps headlines because
they'll scare the pants off of you. We got a plan.
We're gonna make it through this. We're gonna come out
the other side. Again. We've mentioned this on the show before.

(09:32):
Every time the market drops ten, fifteen to twenty percent,
it always feels different than it did the last time. Oh,
this time is different. The market's not gonna come back.
Market always comes back, always feels different, always comes back.
So hold on tight and work with a professional that
you can trust. Nine one nine eighty five six one
nine six eight is our number, and y'all stick with us.
We have a very exciting show today. On income strategies

(09:52):
and retirement, which I think is something that everybody should
tune into.

Speaker 1 (09:56):
Hey everyone, welcome back to the second half of the
Greg Kicks Show. You might this is a funny joke,
but I still use it every year. I wake up
every time, every morning this time of year to the
sound of birds coughing, coughing, coughing. Yes, you haven't seen
the green stuff floating around. But anyway, the birds.

Speaker 3 (10:18):
And they got dad jokes and then they got granddads.
That's right.

Speaker 1 (10:22):
The birds are coughing out there. So anyway, it is
a mess. But and the market got messed up a bit. Now,
one thing we're going to talk about today in detail,
great detail is income during retirement. And so when you
have a tumultuous week like this week, terrafs are still
there is a reaction. But I love Wall Street, how

(10:42):
you know, they all brag on Wall Street like we're
not emotional about anything. We plan ahead, We're always looking
six months ahead. Until Trump announced terrace, and all of
a sudden the market crashes round percent like just like
a human being. They are humans too, So the analysts
are smart until something goes wrong, and then they're may
be not as smart as they thought that were. But
the point being, if you're interested in income in retirement.

(11:05):
If you're not, raise your hand and turn turn the
radio off. Everybody needs income and retirement. So we're going
to talk the rest of the show on that, and
uh and and by the way, another another mistake is
if you have dividend stocks and the market crashes. I
have people ask me probably half a dozen times a year,
my income's going to go down the market's down. No,

(11:29):
the dividends can go down, but most companies do not
lower a dividends, So so relax on the income in
some ways when the market flip flops like it's done
this week.

Speaker 3 (11:39):
It's a fixed number. You look at what a what
a company's yield is, and that's where you could say, oh, look,
you know AT and T is paying five percent or
whatever it is. Well, if AT and T's price cuts
in half, that five percent becomes ten percent. Right, that's
just simple math because it's a fixed number. And so
before we jump into the to the income show, I
meet two different types of people pre retirees. There is

(12:04):
tight yeah, well yeah, I guess this could be defined
in several ways, but two main kinds as it relates
to retirement income. The government employee or someone who works
with an older company or an old fashioned company that
offers some sort of a pension and maybe healthcare benefits.
Oftentimes they don't have the liquid resources, you know, the

(12:25):
big four oh one K or four or three B
accounts that other clients might, Other clients who might work
for a new age corporation, more modern situation, has a
large bulk of money in their four oh one K
and retirement accounts and brokerage accounts, but no pension. And
so I'll tell the people oftentimes who come in that

(12:48):
have those pensions and health insurance covered in retirement. Oftentimes,
again they kind of apologize, and I know, I don't
have that much saved up. They might have five hundred
thousand saved in their TSP or something, And I say, look,
I have clients with two and a half million dollars
in they're four to h one K who are retiring
at age sixty, who would switch with you right now

(13:10):
in a heartbeat, because what you have is you have
solved basically the two biggest fears that clients have when
they approach retirement. What do I do about a paycheck? Well,
you got a pension, and your pension has a cost
of living adjustment on it, and it's guaranteed by the government.
Plus you're gonna get social Security and healthcare. People that
retire before Medicare age, which a lot of people are doing. Now,

(13:32):
what are they gonna do about healthcare? The healthcare landscape
is broken. We have strategies for that, but you have
to be in the right place in terms of where
your assets are diversified, whether they're taxable or wroth or
whatever else. And so it's daunting, particularly with what's happened
this week with the market dropping three percent. If you
have a two and a half million dollar portfolio, it
drops three and a half percent, that's one hundred thousand

(13:53):
dollars that is wiped out basically in one day. And
that money, if you're retiring at sixty, got to think
about it, that's going to last you until age ninety five.
People are living well into their nineties now, which is great,
but as it relates to retirement planning, that means your
dollar has to stretch that much further. Inflation is going
to be eating away at your dollar for thirty five years.
And so, mister pension if you're out there. You're doing

(14:15):
just fine. You're doing just fine. And mister, I've got
a whole lot of money in my four oh one k.
Let's talk about some ways that we can get you.
Maybe you a private pension or something like that that
can give you a little bit more sleep at night factor.
And so let's jump into it.

Speaker 2 (14:30):
It's called retirement paycheck. You're getting a paycheck from a company.
But what are you going to do about the retirement paycheck?
And you're right boo. Those folks with fixed incomes that
cover all of their expenses are much happier in retirement
because they can use their other money to travel, by

(14:50):
grandkid gifts, you know, whatever they want to do. And
I do like to look at the fixed pieces of
a puzzle to see what that's going to cover. And honestly,
sometimes on the even on these pensions, you want to
dig a little deeper because sometimes those pensions opportunities are
a lump sum or lifetime or life for joint and

(15:11):
survivor all of those things. So we take a look
at Okay, well, with a lump sum rolled over into
a guaranteed income, product make more sense financially and give
you more income than the pension would and a lot
of other things going to that play. But those are
some of the things that you need to have a
professional dig into and let you do the talking. I

(15:34):
had someone recently tell me that they met with her
financial advisor from the radio, and she said, what wasn't you? Guys?
She said, That's why I'm calling you because this person
not only didn't give me any answers, but talked about
his net worth the whole time. What he had managed
to accumulate, she said, had nothing to do with me,

(15:56):
you know. So she said, I left there and went
no way what happened. But here's the point. It is
all about you. You hear those sentences that say it's
not about you today, Well, it is about you. It
is about what is it that you need? What is
it that you need for income forever? What is it?
And that's why we let you do the talking. We

(16:17):
take the notes, and then we interject as needed. So
give us a call nine one nine A five six
nineteen sixty eight if you're out there wondering what am
I going to do for income and how do I
get my income forever?

Speaker 3 (16:29):
And Wanda, you made a good point about the pension
with the company. So if you work with like Duke Energy,
for example, I know they have a pension. You have
the option to roll over a lump sum or leave
your money with Duke Energy and collect a pension that way,
and you can put survivorship benefits on it so that
if you pass away first, your wife gets it for
the rest of her life or your husband, whatever the
deal there is, that's the only real death benefit. And

(16:52):
so if you roll it to the private side, you
can still put joint income on it, and we'll obviously
analyze and see that, Okay, we're getting you the same
amount of income over here. But if both of you
pass away at the same time tragically will then there's
gonna be a big old pot of money. If it's
left to your kids, it's not used to lose it
like it would have been if you left it with
the private company. And so there's several little nuanced details

(17:14):
to look at. And another thing, if you work for
the government, you're gonna have a cost of living more
than likely adjustment and your pension every year. The federal government,
you'll have a cost of living adjustment every year. And
if you don't, if you work for a private company,
it's unlikely you'll have that. And so that means if
you're retiring early at age sixty, what is your income
going to look like? What is that four thousand dollars

(17:36):
a month really gonna mean in twenty five years? If
inflation is two and a half percent in twenty eight years,
that four thousand dollars is going to feel like two
thousand dollars. Price of goods will increase, it will double
effectively in twenty eight years. And so you have to
think about all that with a fixed line income. Try
to find something out there which we have that'll give
you the opportunity to keep up with inflation nine one

(17:59):
nine eighty five six one.

Speaker 2 (18:00):
And don't you love those advisors that say you live
on sixty seven percent of your income and retirement.

Speaker 1 (18:06):
Really Yeah, I haven't met that client.

Speaker 2 (18:08):
I need it. But here's the deal. You know you
might some things might go down, but medical goes up.

Speaker 1 (18:15):
Yeah, and grandkids go up, and kids go up to
the beach, travel goes up. I want to just in
the first segment here, I want to put this in
to have our listeners think the question I get a
lot about when can I retire as a question I
get a lot, but also how much do I need?
Is the second question? And I used to hear it

(18:36):
a lot more. Do I need a million dollars to
retire in assets? And I go, well, that's a nice goal,
but how about this. That's backwards from what you really
need to ask, because we're going to ask you anyway,
We're going to say before we even talk about how
much you need, what is the income you need? First?
The actual target is not how big your pot is.

(18:57):
It's how much income do you need from the pot
and social security or if you have a pension. That's
really the number we want first, because then we as
advisors have a target. If you need six thousand a
month to live your normal lifestyle after tax, I look
at how can we get six grand after tax and

(19:17):
have it grow over time for inflation. That's really my target,
and that's going to determine what I say you need.
It isn't how big is it whether you have eight
hundred or one point eight million. That's great, but we
need a target. If you aim at nothing, you hit
it every time. You see all saying well.

Speaker 2 (19:36):
And be careful of meeting with someone that says you
can accomplish all the income you need by only doing
one product or one tool, or one.

Speaker 3 (19:46):
Type, one type.

Speaker 2 (19:47):
Yes, yes, I've seen that, and it's so ridiculous, and
especially i've seen it with two widows. I hate it
because I've grown up in this industry, so to speak.
I started when I was twenty years old in the
financial end industry, and I've seen a lot and done
a lot, and there's you know, to hear those kind
of stories makes me sick because you know, as a

(20:09):
financial professional, you got to have ethics. If you don't
have ethics in your character, then.

Speaker 3 (20:15):
There's a lot of people in an industry who lack
it for sure. And we run into people who come
in for a second opinion who have met with someone
who clearly has no ethics. And so, to back up
to Greg's example earlier, then we got to take a break.
Clients ask when can I retire? My answer is always
whenever you want. You can retire right now. I can
retire right now, I want. I could retire right now.

(20:37):
Our producer could retire right now. The question is what
do you want your retirement to look like? Do you
want to be on unemployment the rest of your life?
Do you want to be scraping by having to sell
your house and do that. If that's what you want
retirement to look like, sure you can go ahead and retire.
And so Greg mentioned a good point. We established that
and we understand. We pick apart the income that you
need back you into a number. Okay, here's your target number.

(20:57):
Here's how we're going to get you there. So there's
a lot lot more that goes into that process. Nine
one nine eight five six one nine six eight is
our number. And we will be right back with you
for the second third segment of the Greg Hick Show.

Speaker 1 (21:09):
Welcome to the third segment of the Greg Hicks Show.
I'm Greg Hick, certified Financial planner, along with Wwanda Cooper
Financial Advisor and bo Nicholson Financial Planner certified that is,
and we are with a company, a boutique fund company,
a boutique investment fund company, as well as a financial
planning firm called Financial Resource Management. We're headquartered here in

(21:32):
Raleigh on six Forks Road, the fastest growing city I
know of around these parts. And then we're also in
the beach area in Atlantic Beach, right on the Atlantic
Beach Causeway. So we have two offices to meet. We're
available by phone. We give our phone that we're out
several times during the show. We also have a website
FRMNC dot com and those letters stand for our business name,

(21:54):
Financial Resource Management North Carolina f rm NC dot com.
And if you missed part of the show or you
want to listen to the show we did last week
or eight weeks ago, those are archived on our website
at FRAMNC dot com. Just click on the radio tab
and you can scroll back and listen to a show
that you want to hear about a certain topic or whatever.

(22:16):
It's also available on the Rileigh Radio Shay Show one
oh six' one FM. Talk in this segment, y'all, in
four segment, we're going to talk about it actual you know,
tools to create income. But I don't want to forget
two huge items. One is taxes. You think taxes go

(22:36):
away when you retire. Oh no, now, Donald Trump saying,
let's go back to nineteen nineteen eighties when SOB security
income was not taxed and al Gore's by the way,
made the deciding vote. The Senate tied in the vote
in nineteen ninety two. Before that social security was not taxed.
Did y'all know that, right, But the vote was fifty

(22:57):
to fifty and Al Gore, the vice president, voted or taxes,
so we're trying to eliminate that. But taxes always are out.
Bow and Wine and I are not CPAs, but we
know quite a bit about taxes and we always bring
it up. And then the third the next one is
social Security. We'll hit on it today, but next week,
in the next two weeks, one of the shows is

(23:19):
the whole hour on social Security, so we'll dig in
really deep on that. But let's talk about taxes, what
to look for and what to avoid and be careful of.

Speaker 2 (23:27):
Well, you know the thing about him saying that he's
going to I'm in agreement of doing that. I think
it's hard on retirees when they got to pay taxes
on money they've already paid taxes on. So but I
don't know how it's all going to work. I'm not
in the department, you know, looking at all that. But
I hate it when I read articles on he shouldn't

(23:50):
do that because it's going to cause, you know, downfall
of social security because I don't know. I want the truth.
I'm always seeking the truth, and I've got a contact
with Social Security, and I just shoot an email to
him and go, what's the truth here? I've read this
because I hate when they say, well, it's only going
to impact the wealthy if they don't tax social Security.

(24:10):
What do you mean by that? I mean everybody can
get social Security if they worked the forty quarters, So
why is that a problem for Like, it only affects
the wealthy, they only benefit from it.

Speaker 3 (24:25):
So I think sixty two percent of Americans rely solely
on Social Security retirement, and so those are not the
wealthy exactly.

Speaker 2 (24:32):
That's my point.

Speaker 3 (24:33):
Those people will be impacted right.

Speaker 2 (24:35):
In a positive way. Absolutely, So I hate it when
the media twist it that way because that's not true because,
as both stated, a lot of people rely on it
that are not in the wealthy category. And so what
if they are, They did work, They did, you know,
contribute to society if you will, in a big way

(24:57):
by oftentimes employing people and things like that. So I
have no problem with that. So I'm just concerned about
how the media is projecting that because I don't think
that it's going to collapse. I don't think it's a
bad idea to do it. So but anyway, when you're
factoring taxes on retirement income and things like that. That's

(25:18):
what a professional does for you, is they look at
all the avenues for income and how it's going to
impact you tax wise, because we do have to consider
Medicare Part B and all of that because anything that
increases income increases that premium potentially. So we do look
at all of that and that's the benefit of working
with a financial professional in securing your retirement income. So

(25:42):
just give us a call if you'd like a second
look or first look. Nine one, nine, eight, five six,
nineteen sixty eight. I feel like today's show I was
really excited about because I feel like this is where
we're good. All three of us are really good in
this area. Not tooting our own horn, but maybe I
should because I think we are. And the other show
I like is a charitable giving which factors into retirement

(26:05):
as well.

Speaker 3 (26:06):
Yeah. Absolutely, Yeah, back to the taxes, I want to
mention it perfectly. We've got a lot of tools that
we can use and they're oftentimes tax differently, but we
want you to have flexibility in retirement and if you
go through your professional career, then you put one hundred
percent of your extra money into a pre tax four
oh one k. Okay, great, you've probably ridden the market up.

(26:29):
Now you have a couple million bucks in that pre
tax four oh one k. But if that's your only source,
or at least your primary source of retirement spending, all
that money's got to be split with Uncle Sam. All
that money is going to get stacked on top of
your earned income and affect your healthcare premiums. Like want
to mention, whether it's Medicare or it's you doing a

(26:51):
healthcare strategy before Medicare age. All of that is income driven.
They will slap your hand if you make too much money,
and oftentimes the ripple effects can last for more than
a year, and so just be conscious of that and
try to build yourself some diversification. Diversification is a very
keyword in our industry obviously, but it means so much
more than just diversifying your investments. Diversify your investment accounts

(27:15):
and the tax structure that each one of those has
a roth ira. All of that is after tax. If
you have a lot of money sitting in a roth
ira in retirement, well then you're so much better off
from a flexibility standpoint of where you draw your money
and if you get in tax trouble towards the end
of the year, just go access the wrath. Then there's
the after tax account. It's like a regular brokerage account,
which it works like a savings account, and we can

(27:37):
help you mitigate the tax impact on that as we're
managing it throughout the course of the year through some
various tax strategies. We've also got a whole show on
taxes that we did. What was that last week? Yeah,
so tune back into that. All of our archives shows
are on Spotify, Apple Music, our website FRMNC dot com.
But taxes is a huge piece of the pie because
remember this, it's not what you make, it's what you keep.

(28:00):
Half to factor in the impact of taxes nine one, nine, eight, five, six, nine,
sixty eight.

Speaker 1 (28:04):
And we'll get the social security and great detail in
a week or two. When do you take it? Between
sixty two and seventy is when you take it. But
when do you take it in those eight years? What
if you're married, what if you're single? How much does
it go up? There's all kinds. You know. Social security
sounds so simple until you really think through it, and
then you realize it's quite complicated, so we'll get into

(28:27):
great detail in that, but I will say this, social
Security is a key factor. It's a key bucket of
assets that help fund your retirement one hundred percent. You
need to know when to take it and how to
do it and strategize to get the best effect for
you and your family. So we'll go into great detail
on that. Yeah, taxes, capital gains taxes can be mitigated

(28:48):
if you have an old farm or an old condo
at the beach, or you have an old stock and
you want to sell and you're worried about, oh my gosh,
I can't get out of it without paying big cap
gains taxes. We have all kinds of strategies to mitigate that,
including charitable or matching them up with things that you
have losses in. Perhaps with this big downturn recently, there's

(29:11):
all kinds of ways to do taxes. So don't let
taxes scare you, but please make sure you understand that
it's a big time thing. You're going to live your
life on after tax dollars, not before tax dollars. Another
little wrinkle and social security. People say I'm gonna retire early,
I can get twenty four hundred a month if I

(29:32):
retire early, and I'll say, well, hold you and they'll
say sixty three. And I'll go, well, who's going to
pay your health insurance every month? And they'll go, I'll
get Medicare. Well that's two years later. So my wife
Lourie is under sixty five, so I pay her health insurance.
It's eleven hundred dollars a month. So I tell the

(29:55):
guy that said I'm going to take my twenty four
hundred sod security and run, I'm sick of my job,
and I'll go, No, your net after insurance is going
to be twelve hundred to thirteen after you pay your
eleven hundred. So again, people make snap decisions on big
time issues, so be alert on social Security. If you're
thinking and retiring early, give us a call at nine one,

(30:16):
nine eighty five six, nineteen sixty eight. Let us discuss
it before you pull any triggers.

Speaker 3 (30:20):
Another thing on that example, though, Greg and that and
that guy that's going to have to pay two years
of high high health insurance, is if he has to
go back to work, which he likely will, well, he's
already turned on Social Security. And then if you earn
before your full retirement age sixty seven, you earn more
than a basically twenty two thousand dollars a year, you're
dinged fifty cents on every dollar over that they'll take

(30:43):
it off of your Social Security, so that fella would
probably wind up with zero dollars net Social Security income
after paying his his health insurance and having to go
back to work. So these are the things that most
people don't know, and tune into our show on Social Security,
or better yet, just give us a call so that
we can help you navigate your situation and not make
some of these mistakes that can be irreversible sometimes nine

(31:06):
nine eight, five six one nine sixty eight.

Speaker 2 (31:08):
I have had clients so get a severance package at
sixty four, so to speak, and I will help them
bridge to sixty five for Medicare's see, that's what's neat
about our firm, I think, is we we we really
work hard and doing what's in the best interest of
the client, you know, and hey, we're professionals. We want

(31:31):
to get paid. But it doesn't behoove us to do
something that doesn't work for the client. But so in
that situation, it could make sense to go ahead and
retire early, maybe not turn on social Security, but bridge
yourself to Medicare, and then we look at ways to
bridge them to full social Security, because that's a once
and done thing. So at least you can look at

(31:54):
your portfolio to bridge for another year and a half
or whatever it is to get to pulling the trigger
on something that's for a lifetime. So those are all
the things that we consider when looking at your lifetime
retirement income.

Speaker 1 (32:10):
And severance is taxable, and so you say well I'm
going to one hundred fifty grand, you're going to get
it in one check and you'll probably net one hundred
and ten. So again, just alert. All right, we have one.
The last segment is great what investments do I do
to create dependable cash flow in retirement? That's going to
be our topic. Stay tuned and welcome to the last

(32:31):
segment of the Greg Hicks Show. This has been a
fun show to talk about the crazy volatility this week
and the market and the tariff news and all of that.
It'll all pan out over time, So take a deep
breath and just watch take advantages of beat up stocks
or funds or whatever. We are constantly monitoring that that's
part of our job as advisors. I'm Greg Hicks. I

(32:52):
have wand and bow with me. If you've been listening,
We're talking today about income during retirement. Want to give
you a heads up. We mentioned it a couple of times.
Next week's show is on social Security. We're going to
do the whole hour essentially on how to do social
Security and get the best advantages you can because that's
a huge bucket of income for your lifetime. And if

(33:12):
you're married, there's two buckets of income, and how does
the wife and the husband coordinate when they take it
and so forth. So that's one of my favorite shows
because when I first realized how complicated social security was,
I was stunned. But now I'm excited to be able
to share those ideas with people and go, wow, you
can be very confident when you pull that trigger. So
that's coming up. And then the following week is kind

(33:36):
of kind of a brother or sister to the show today,
but it's on planning retirement. Today we're talking about income
in retirement. This show covers a lot of other factors
in retirement and that's a fun show as well. So anyway,
today this segment, guys, let's highlight this. What are the
coolest ways to create income from investments? I'll I'll start

(34:00):
off with the first one. That's dividend stocks. I love
dividend stocks, and I always target four percent minimum income
on dividends for a retireing. And you know you can
right now. I'm not going to This is not a
run out and buy the stock. But there are stocks
like Pfizer and Dow and some of those kind of
big horse stocks that are down to multi year loads

(34:22):
that are paying very high dividends. So just be alert.
May be a buying opportunity at some point along here.
But anyway, I want to say this, when you're seventy
three now in an IRA, you have to take out
an RMD requirement of distribution. The first year it's about
three point seventy five. The next year it's about three
point nine. But if I have a portfolio and an
IRA earning say four point three percent dividends, I don't

(34:46):
have to sell anything for the next three years, regardless
of the market going up and down, up and down.
I've got the dividend in the rm D cover just
with cash flow. So think about that for you guys
that are heading right toward that retirement and that RMD requirement.
Look for some dividend paying stocks that are down high
dividend yield.

Speaker 3 (35:05):
And understand it, not all income is created equal in
terms of taxes. Going back to that, and so if
you have a big brokerage account like a lot of
our clients do, and they're wanting to produce income off
of that, dividend stocks are a great tool. Why because
we'll qualified dividends which most American companies pay, they're tax
at fifteen percent. Yeah, so remember not how much you make,

(35:26):
how much you keep. There is a prime example right there.
If you're only having to give fifteen percent to the
big guy or Uncle Sam, I shouldn't call him the
big guy. Fifteen percent to Uncle Sam. The rest of
that's going into your pocket. If you instead have a
high yield money market fund because interest rates have been up,
that's great good for you, or a CD account that's
one hundred percent taxable as earned income, and so you're

(35:47):
gonna be given up basically, depending on your situation, maybe
twice of what you would in a dividend paying stock. Also,
the dividend paying stocks they're going to be keeping up
with inflation over the long run, whereas your fixed income
investments likely or not. It's good to have a mix.

Speaker 2 (36:01):
And let's don't underestimate. One of the areas of income
is continuing to work. I have a lot of clients
that have saved well, have good buckets of money, but
they just want to work a little bit. So they
want to do the fun money type thing. And I
have them retire at sixty four and they're gonna they say, well,

(36:22):
you know, I'm good for about three or four more years.
I want to do this part time stuff. I can't
show up when I want to. I don't have to
go in if I don't want to. I can either
work remote or go to the office or whatever they
want to do. Because there have been career people and
so what we do then is as I'm like, okay, well,
why don't you do a wroth ira you've never been
able to do it before, and you can take part

(36:43):
in wroth conversions at that point because your income is down.

Speaker 3 (36:46):
So your wife can, spouse can do it too.

Speaker 2 (36:48):
Exactly. I love doing that and they like it too,
because I'm like, okay, do you think in about five
years you're gonna need another car? Oh? Yeah, Well, why
not saving the wrath while you're working, then in five
years you can pull it out to buy the car.
I mean, it's just all kind of little plans that
make people's eyes light up because I don't want to
ever quit work. I love what I do, and there's

(37:09):
a lot of us out there that don't like to
be asked, when are you going to retire? When are
you going to retire? Well, maybe I'm not. Maybe I'm
just gonna cut my hours back.

Speaker 1 (37:17):
Maybe God will retirement exactly, don't.

Speaker 2 (37:20):
There you go, And I think there's a lot of
us out there that have had good careers and we
loved what we do and we just want to work
a little bit. So if you want to work a
little bit for that income, it's okay, But still you
need a plan, So give us a call at nine
one nine A five six nineteen sixty eight.

Speaker 3 (37:36):
And a couple other income solutions include. We talked about bonds.
You know, there's corporate bonds, there's municipal bonds, there's treasury bonds.
They're all taxed at different rates. Corporate bonds typically your
tax at ordinary income. Treasury bonds you don't pay state
taxes on those, and you can buy those after market,
buy what's called it a treasury zero, and then your
your income or you're yield rather to yield to maturity

(37:59):
is made up of long term capital gains if it's
if it's over a year, more favorable taxes. And then
there's municipal bonds. And so if you're in a very
high income bracket, consider municipal bonds because sure they might
only pay three percent, but again it's what you keep
after you know, it's what you keep, not what you make,
and so that's what you keep. If they're a North

(38:20):
Carolina state specific municipal bond and they're paying three point
two percent, you get all that no federal taxes, no
state taxes. But it has to make sense because you
have to look at apples to apples. Okay, well what
about this four point five percent corporate bond after tax?
Maybe I'm netting out three and a half on that,
so that might be the winner. So again, complicated stuff,

(38:40):
but helps to have a professional team right there in
your corner who can help you analyze all these different solutions.

Speaker 2 (38:46):
And charitable giving. I mean, we have people that have iras,
they still give charitably. They don't really need all of
their required distribution, So shooting some of that to your
charity and avoiding the tax and keeping your non qualified
money sometimes can make sense as well.

Speaker 1 (39:04):
There you go. We also have REATS real Estate Investment
Trust pretty much their income reach. If you like hotels,
you can buy a hotel. Ref feel like warehouses that
we love assisted living over the years because they don't
go away too much, you know, in the agent need
the baby. Yeah, it pretty much is, so we like
we have. I mean, there's a there's a rate right

(39:26):
now that's paying almost seven percent dividends and I've owned
it for clients for five or six years. That's pretty
nice seven percent. And by the way, REACHS has too, right, Yeah,
I was going to say, reach you get the right off,
you get the depreciation and all that. So it's not
even fully taxable if it's not in an IRA, which
is kind of cool. So remember we have a whole
show on real estate too. Real estate has a lot

(39:49):
of interesting tax advantages, so don't forget the income producing reads.
And then we mentioned annuities a while ago. A lot
of people poopoo annuities. We love annuities as substitutes for
bonds sometimes because of their guarantees. But we also like
the income annuities because sometimes you get you can buy
them that gets get nice income now or income adjusted

(40:09):
up over time according to the market. So yeah, those
are amazing. The annuity world is real creative. But don't
put everything in an annuity and don't say no to
any annuity. We have clients that won't touch them because
they heard it at a cocktail party or a picnic.
And then we have clients that we thank us them. Yeah,
in times like this is when I get a call

(40:31):
thank you so much. My income never stops. The market's
all beat up, but my income's great.

Speaker 3 (40:35):
I tell clients all the time that, look, I'm in
the business of giving you information and allowing you to
make the decision. We're not pushy, We're not salesy. We
just don't want. We think it's a disservice to you
to sign something off just because you heard that it
might be a four letter word. Well, you know, Dave
Ramsey says this, or Ken Fisher says this, it's like, well,
you know, they've got alterior motives. Let me explain this

(40:58):
solution and I think fits what you need. Here's how
it works. Would you be interested in something like that. Well, yeah,
what's the catch. Well, the catch is, here's what it's called.
It's called annuity, or it's called long term care. That's
another area that we see pushback before we've even been
able to introduce how it actually works and can fit
into your plan. So just keep an open mind and
we will too, and understand that. You know, if you

(41:19):
say no, after you understand how it works, we'll just
right in your file. All right, No nudies, We're never
going to talk to them about this again. But it
is important to know what's out there and how it
could benefit you.

Speaker 1 (41:28):
That's right. One other thing we haven't hit on since
we got another minute. One time I was doing a
lot of serious planning for a client and they made
a comment and then I said, well, how much you're
gonna inherit? And they said my sister and I maybe
four million. My mom's ninety, And I went time out.
All the retirement planning I just did for your income

(41:52):
just changed because if you inherit another two million exactly,
that's a new ball game. So don't forget. Not everybody
gets a big retirement, but if you, if you're blessed
that way, be sure to tell your advisor in advance
because that's part of or maybe it's a beach property
that you're going to use as a rental, that's.

Speaker 2 (42:10):
An income place securing long term care.

Speaker 1 (42:13):
Yeah, so again, God blessed that we call them the
greatest generation. Now, the baby boomers who are now retirement age,
a lot of them were blessed with retirement or a
house or a piece of land or whatever stepped up
cost basis so you can sell it and turn it
into the cash flow. A lot of cool things. But
we didn't talk about it. I just wanted to bring
it up here at the end of the show.

Speaker 3 (42:34):
But I will say the inverse of that is sad.
It is sad when somebody forgoes proper planning because they
think mom and dad and their net worth is going
to take care of them. Because we've seen, you know,
we've seen it not work out. We've seen mom and
dad both get Alzheimer's or some sort of a memory
care and then you know, they're not going to want
to go to the cheapest place they want to go
age in, you know, in luxury, and they spin down

(42:57):
their assets and then son and daughter and who didn't
plan does not get the inheritance they once thought they did.
They're forced to work a little longer than they need to.
So you got to look out for number one when
it comes to retirement planning. We understand you have other goals.
You want to bless your children. Eventually, you want to
bless some causes, maybe the church, some children's Fly to Hope,

(43:17):
wounded warriors, some nonprofits. That's all well and good, but
the first piece of your plan and the concentration is
going to be okay, how do we get this to
work for you and your spouse because of y'all are
our clients, right.

Speaker 1 (43:30):
It is a family decision, by the way, and if
you feel uneasy, you can bring If you're older, you
could bring your adult kid to meet with us as well.
You know what next week's show is all about social security.
We're excited, but please call us and ask us your
questions and come and sit with us. We won't bite you.
We just want to help you. Remember this. The number
is eight nine one nine, eight five six nineteen sixty eight.

(43:52):
It's your money, it's your future. Don't blow it.

Speaker 4 (43:55):
Advisory Services through Capital Investment Advisory Services LLC. Security is
offered through Capital INVESTMM Group, Bink, Remember, Finra and Sipic
one thousand, East six Forks Road, Raleigh, North Carolina, nine
one nine eight three one twenty three seventy. Past performance
is not indicative of future results.