Episode Transcript
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Good Saturday morning to all on thismid October Saturday. Dick Chilli, heare
and this is safe money. Weare here every Saturday to talk with you,
our listeners, regarding strategies we usewith our clients to manage and protect
and to manage and protect assets safelyin today's very unsafe world. We are
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continuing to host our monthly community meetingsfor persons who are either aging into Medicare
or currently on Medicare and wishing tochange their plan choice for twenty twenty four.
Remember, listeners, there are tenMedicare supplements. We get to choose
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one of these ten plans. Further, there are eighteen prescription drug plans,
and we get to choose one ofthose eighteen plans. There are eight Medicare
Advantage plans, and we get tochoose one of those eight plans. So
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our next virtual community meeting is scheduledfor Tuesday August twenty fourth, Thursday August
twenty sixth, and Monday. Ithink I said that wrong. Our community
meetings are scheduled for Tuesday October twentyfourth, Thursday October twenty sixth, and
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Monday, October thirtieth. The meetingsare at ten a m. At one
time, we held those meetings atlocal meeting center. Since COVID, we
are no longer having in person meetings, but provide these meetings virtually. You
get to choose one of those plansthat I've mentioned, So there are lots
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of plans to choose from. Howdo you make sense of all those choices?
Attendees at our prior meetings have said, now I understand and the choices
I have with medicare We provided theseinformation meetings live by having eligible persons come
to a meeting room, and wehave now discontinued our live meetings and changed
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to a virtual meeting, and weare finding these virtual meetings to be friendly
and more popular than the in personmeetings. Craig from our office conducts these
meetings. He does a good jobat presenting the information. Call him prior
to the meeting date to be included. Creig will give you instructions on how
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to participate. You stay in yourown home using your own home computer equipment
to participate in these meetings. Thesemeetings again are scheduled for Tuesday, October
twenty fourth, for Thursday October twentysixth, and Monday, October thirtieth.
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They are at ten o'clock in themorning and we will be continuing these meetings
in November November one, third andsixteenth, So call Craig at five sixty
three three three two twenty two hundredto get instructions on how to participate in
these meetings, or email me bygoing to my website Wwwdickshelley dot com,
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scroll over to the contact icon formy email address and drop me a note
if you'd like to correspond in thatmanner. Remember, we are now in
the annual enrollment period for Medicare.It began on October fifteenth and it runs
until December seventh. So if youare now on Medicare and wish to look
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at different plans in order to changeyour plan, this annual enrollment period is
the opportunity to do so. Whywould you want to change your choice of
plans for Medicare Well, there areseveral reasons for wanting to change plan.
The biggest reason is if your doctorno longer accepts your Medicare plan, then
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you want to change these plans.Further, if your prescriptions are no longer
covered, or if your co paymentfor your prescriptions have increased, substantially.
Then you may want to look atan alternative plan. Remember there is a
website, and that website is www. Medicare dot gov that allows you to
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access and to input your prescription medications. This website is operated by the federal
government and it provides you with justa wealth of information when clients come to
us to review their choice of Medicare. And remember this choice is one of
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two general options. You choose eitherof original Medicare or you choose a Medicare
advantage plan. Original Medicare is whatwe call a three card system. If
Original Medicare is your choice, thenyou have your Medicare card issued by the
government, and then you have yourMedicare Supplement card issued by a private by
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a private insurance company, and youhave a prescription drug card issued by a
private insurance company. This is whatwe call the three card system. The
alternative choice is the Medicare Advantage plan. We call this choice the one card
system, the advantage plan. Theone card system is issued by a private
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insurance company. Remember, there areeight Medicare advantage plans available for these Medicare
regions. We get to pick one. We are independent agents and represent the
various advantage plans. As as wellas as an independent agent, we provide
assistance with helping you decide the appropriatechoice for you the three card system or
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the one card system. Our virtualour monthly virtual community meetings provide just the
wealth of information designed to help youdecide which plan is best for your situation.
Call us at five sixty three threethree two twenty two hundred or email
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meet at www dickshillig dot com andscroll over to the contact icon for my
email and drop me an email notewith your questions, or to arrange a
personal meeting to help you decide choicesbest for your situation. Again my email.
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To acquire my email, go tomy website. Go to www.
Dickshillig dot com and then screw overto the contact icon for my email address.
I am receiving tons as an agent. I am receiving tons of information
on Medicare choices. Even now,after I have been on Medicare for a
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number of years, I still receivetons of information on Medicare choices. I
continue to receive solicitations by different companiesor different entities offering Medicare and choices for
Medicare. Even now this week,I received an email from one of the
hospital health systems announcing a partnership witheHealth, which is a licensed independent Medicare
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insurance advisors. I'm bringing this toyour attention this morning because we are now
in this annual enrollment period for Medicare, and if you are now on Medicare
or if you are becoming eligible forMedicare, there are tons of solicitations you
may be receiving. Just be carefulwith what choices are thrown at you.
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We invite you to participate in ourmonthly virtual community meeting to educate yourself on
what choices you have with Medicare.If you are eligible yourself, or if
you are helping another person or parentswith their choice for Medicare, call us
at five six three three three twotwenty two hundred or email me at www.
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Dickshillig dot com. Open my websiteand scroll over to the contact icon
for my email address. We remainin this annual enrollment period until December seventh.
You will be hearing lots from mehere on Safe Money about this enrollment
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period and the choices that you have, so keep that in mind. Plans
change, your home situation changes,your living situation changes, that's why the
government has set up this annual enrollmentperiod. This annual enrollment period is for
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persons who are already on Medicare primarilyand wish to make a change to their
Medicare choice for twenty twenty four.Why do you want to make that change?
Well, if your prescriptions, ifyour co payment on your prescriptions are
higher than they have been, thenthat would be a reason to consider changing
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your Medicare choice. If you're adoctor, if your providers are no longer
in the Medicare network, then youmay want to consider your changes as well.
So if we can help you withthat again, my phone number is
five sixty three three three two twentytwo hundred, or go to my website
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tick www ticshilling dot com and scrollover to the contact icon for my email
address. On another topic here onSafe Money is the stock and mutual fund
markets. I am not sure thesehappenings are all good, but lots of
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stuff are going on in the stockand mutual fund markets as of this right.
As of this recording, I amrecording this program on Thursday, October
nineteenth, and the markets this morningwere down considerably. The doll was young
was down as well, as theNasdaq was down and the SMP was down
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as well. So as of thisdownward trend, it's continue here. On
Thursday morning, the head of theFederal Reserve, the Chairman Jerome Powell,
made some comments on interest rates,and his comments on interest rates were that
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interest rates would remain or they wouldincrease. Now, as a result of
those comments, the market is.The market is down s and P was
down about forty points as of thisrecording. The Boy the Dial was down
a couple hundred points, the Nasdaqwas down about one hundred and thirty points,
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and the Nasdaq one down about fortypoints as well. So what can
we say about the market. Forsure, we can say that the market
remains volatile. That's why we encourageyou to share in the safety and the
security of the index annuity. Rightnow, this index annuity is paying a
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thirty five percent bonus on money invested. Now. That money can be qualified
or it can be non qualified.Remember the difference between qualified non qualified.
Uncle SAM classifies all of our moneyin one of two ways. Money is
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either qualified or non qualified. Qualifiedmoney basically refers to money in retirement accounts
such as iras such as four ohone k's, four O three b's four
fifty seven plans. Any money that'sin a retirement count is normally considered qualified.
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ARISAM or the Employee Retirement Income SecurityAct invented qualified money. Before nineteen
seventy four, the only retirement accountsthat existed were really just pensians. Now,
after nineteen teen seventy four, ARISAcreated iras. They created four one
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k's, four O three b's forfifty seven plans and other retirement accounts.
With these, they also created thatthe rules that qualified money in these accounts,
which is where the term qualified moneyor qualified accounts come from. Qualified
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accounts get tax advantages, get moretax advantages than non qualified money. So
the big advantage on qualified accounts isyou get to use pre tax money to
fund these accounts. You also donot have to pay taxes on the gains
in these accounts until you start withdrawingthe money. And boy, that's a
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big advantage. You do not haveto pay taxes on the gains on these
accounts until you start withdrawing the money. With the advantages that qualified money receives,
there are many rules and regulations thatsurround it. Now, non qualified
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money is money that you have alreadypaid taxes on. For this reason,
non qualified accounts, such as asavings account or a brokerage account do not
receive this preferential tax treatment. Forthis reason, this money has less rules
of regulations than qualified money. Youcan put in as much or as little
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money as you want. You canalso withdraw non qualified money at any time.
When you withdraw non qualified money,you only have to pay taxes on
the gains, since you have alreadypaid taxes on the money you put into
this qualified account. This special indexannuity that we are talking about is available
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for both qualified money and non qualifiedmoney. The thirty five percent bonus will
be paid for both qualified money andnon qualified money. So if you invest
five thousand dollars in this annuity,it will be bonused by one thousand,
seven hundred and fifty dollars immediately.If you invest twenty five thousand dollars in
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this annuity, it will be bonusby eighty seven hundred dollars. One hundred
thousand dollars invested will be bonus bythirty five thousand dollars. Five thousand dollars
invested will be bonus by one hundredand seventy five thousand dollars. So listeners
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take advantage of that very attractive bonus. That bonus is available for both qualified
money and non qualified money. Now, there are pros and cons to any
investment that you get into, justas there are pros and cons to this
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special index annuity. I am talkingabout the biggest pro The biggest advantage of
the indexinuity, of course, isthat thirty five percent bonus. Tremendous bonus,
and boy, that bonus is veryvery is very very attractive. Now,
there are disadvantages to this special indexinuity. One of the disadvantage is that
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there is a holding period, andthat holding period is a lengthy holding period.
The holding period is ten years.Ten years is a decade. Ten
years is a long time, butthe indexinuity has a ten year holding period.
Now there are exceptions to that holdingperiod, so you can make withdrawals
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from that ten year special indexinuity.You can take up to a ten percent
withdrawal every year with no pendaling.So ten years is a long time.
It's a long holding period, butthere are exceptions to that ten year period
of time. So I encourage youto give us a call, but a
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thirty five percent bonus is just that. Where can you receive an immediate thirty
five percent bonus? Now, thekungans on that indexinuity is that the holding
period is a ten year holding period. Ten years is a long time,
but there are exceptions where you cantake a withdrawal without penalty of up to
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ten percent of your account value everyyear without penalty. So I use this
thirty five percent bonus annuity. Iuse this thirty five percent index annuity to
create oftentimes those split annuities that you'veheard me talk about often here on Safe
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Money. Now, there's no there'sno company that issues a split annuity.
No life insurance company issues a splitannuity. But there is a concept in
which you can take a sum ofmoney and divide it between two or more
annuities. You can split that moneybetween two or more annuities. Let me
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give you an example of that.If I have one hundred thousand dollars and
this is an IR money, andI put this into the index annuity especial
index annuity, and then out ofthat one hundred thousand dollars, I would
put twenty thousand, five hundred ina meter annuity that is if the investor
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wishes to take income right away fromthat annuity, then I would put twenty
thousand, five hundred dollars in thatspecial index in that special immediate annuity.
And so that twenty thousand, fivehundred dollars in that annuity would pay three
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hundred and fifty four dollars a monthevery month for sixty months. And of
course that money is taxable. It'sir money, so it's one hundred percent
taxable. So at the end ofthat five year period, at the end
of the sixty months, and whenthat sixtieth payment is made, the account
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value in that annuity is zero.Now, over sixty months, it paid
out twenty one thousand, two hundredand thirty three dollars. Remember we started
with twenty thousand, five hundred dollars, and so the end of five years
is paid out a little more thanthat, but not much more. And
that's indicative of today's low interest rates. It paid out twenty one thousand,
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two hundred and thirty three dollars.That's three hundred and fifty four dollars per
month times twelve. Now, whilethat is going on, while we are
spending down that immediate annuity, thenremember we put one hundred thousand dollars up
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as an example for this split,we only put twenty thousand, five hundred
into this immediate annuity. Remember thisimmedia annuity pays three hundred and fifty four
dollars a month. Now, thebalance of that one hundred thousand dollars,
which is seventy nine thousand, fivehundred dollars we put into a tax deferred
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fixed index annuity. Now that's seventynine thousand and five one hundred would gain
thirty five percent immediately, and ofcourse that would be attached to the value
of that deferred annuity. And soat the end of a five year period
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of time, if that deferred annuityearns at least three percent interest every year.
By linking the index annuity to thestock market, now it's not invested
in the stock market. It's merelylinked to the performance of the market.
So if the market does well,will share in the growth of the market.
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If the market loses money, whichis doing now, your account value
does not share in stock market losses. The account value remains the same as
it did for the prior for theprior year, So if that seventy nine
hundred dollars, earns that thirty fivepercent bonus immediately, then earns at least
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a three percent rate of return bybeing linked to the performance of the stock
market. Then at the end ofthat five year period, when we're down
to our sixtieth payment, when theimmediate annuity has spent down to zero,
then the deferred annuity, which hasgained back that one hundred thousand dollars,
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actually is game back a little morethan the hundred is actually one hundred one
thousand, four hundred and sixty fourdollars at the end of that five year
period. Now, folks, wecan do that type of split annuity with
qualified money, or we can doit with non qualified money. Now,
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if we have one hundred thousand dollarsof non qualified money, then the numbers
are the same. We put twentyof that one hundred thousand, We put
twenty twenty thousand, five hundred dollarsinto a five year immediate annuity that pays
three hundred and fifty four dollars amonth, four sixty months. Now,
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the beauty of that non qualified moneyis that the law has the tax laws
have created the exclusion ratio, andthe exclusion ratio applied to this immediate annuity
states that any money that represents yourprinciple that you received is excluded from taxation.
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So if I put that exclusion ratioto this annuity, then listeners,
ninety six percent of that three hundredand fifty four dollars is non taxable.
Ninety six percent is not subject totax, so only four percent of it
is subject to tax. The samewould occur is that at the end of
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the sixtieth payment, the value ofthat annuity would be zero dollars. But
still this is non qualified money andthe exclusion ratio on non qualified money is
simply tremendous. So I encourage yourlisteners boy to take a look at that.
That is a fantastic way to investmoney. And if you don't need
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to take income from your money,then we invest the entire amount into the
fixed indexinuity, the entire amount,which is paying a thirty five percent bonus,
and that bonus is just just tremendousbonus. So I encourage you to
take advantage of that. If youhave questions on that, if you'd like
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to have additional information, please callme call me at five sixty three three
three two twenty two hundred and I'llbe happy to talk with you via email
if you wish, or going talkwith you in person in the phone.
But encourage you to take advantage ofthat very attractive bonus interest rate. Encourage
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you to take advantage of the exclusionratio if you are requiring to have money
from those investments and having money ona monthly basis immediately. That exclusion racio
applies only to annuities, and itis something that is very workable for persons
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who are wanting to take income fromtheir investments. We use the split annuity
arrangement, and especially for non qualifiedfunds because of the very fantastic exclusion racio
that's available there. On qualified money, there is no exclusion ratio, so
any money that you take from thatqualified account would be taxable, and it
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would be taxable at at what yourrate of tax is. So I encourage
you to look into that. Itis a fantastic opportunity, fantastic opportunity to
conserve money. And you know,I always talk about having money available for
your lifetime, and one way ofpreserving funds that you have as you move
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into retirement is to use these splitannuity ratios. I want to remind you
again our virtual community meetings coming upthis month October. In this month of
October are scheduled for Tuesday, Octobertwenty fourth and Thursday October twenty sixth,
then the following Monday, October thirtieth. These meetings provide just a wealth of
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information on your choices for medicare.So I know you're getting a lot of
litch, a lot of literature,and a lot of solicitations on medicare.
So take advantage of these community meetingsand they are are done. They are
conducted in the privacy of your homeusing your own computer equipment. So call
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me call Craig at five six threethree three two twenty two hundred to receive
instructions on how to participate in thesevirtual meetings. That's about all a half
for you this morning. Have agreat, great weekend, good day,