RETIREMENT MADE EASY

There are two types of people that fail miserably at retirement. One person is the type that loved their job because it gave them a sense of purpose. The other type is the spender—they struggle to stick to a budget and want an extravagant retirement. What should these two people do to have a successful retirement? Learn more in this episode of the Retirement Made Easy Podcast. You will want to hear this episode if you are interested in...

• [0:21] Check out RetirementMadeEasyPodcast.com for FREE Resources
• [4:37] A HUGE congratulations to George and Mary on their retirement!
• [6:15] Type #1: Those who struggle with a lack of purpose
• [9:36] Type #2: Those who spend more than they should
• [13:07] Your paycheck HAS to be replaced with other income

Type #1: Those who struggle with a lack of purpose

Do you get up and head to work and feel a sense of purpose every single day? Is your career meaningful? When this type of person retires and they no longer have that purpose, they don't know what to do with their time. They might relax for about a week of retirement. Then they get bored. They miss their coworkers, interaction, and sense of purpose.

How do you combat this? You can volunteer at organizations a few days a week. Or you can help babysit your grandkids. There are plenty of purposeful things you can do to fill your time that doesn't include working full-time. But if you're this type, before you retire, think about how you want to spend your time so you're not left twiddling your thumbs.

You can also download and fill out my "Blueprint To a Dream Retirement" to help you navigate how you'll spend your retirement.

Type #2: Those who spend more than they should

I don't see this often—but I see it enough. I've parted ways with two clients during my career because they were overspending and jeopardizing the success of their retirement. When you retire, you have to live at or below your means. You're on a fixed income. Your pension, social security, and retirement nest egg make up the cash flow that you have to spend. If you stay within those parameters, you'll be fine. Those that fail have a habit of spending above and beyond their monthly budget. If you spend more than you had planned, you can't just call social security and ask for more.

So what do you do? How do you avoid overspending in retirement? You need to set a realistic budget. Secondly, you need to think about what you want from your retirement in advance. Do you want a boat? Do you want to vacation in the Bahamas? Whatever you want, share it with your financial planner ahead of time so it can become part of your retirement plan.

Your paycheck HAS to be replaced with other income

The money for your monthly expenses can come from IRA withdrawals, a brokerage account, social security, and pensions. When you were working, you likely got paid every two weeks. People can struggle to budget when they're getting only one check a month from social security. So we try to distribute money from an IRA on the 16th if the social security check comes in on the 1st, so you get paid twice a month like you're used to.

My final tip? A retirement plan is key to helping you determine what you'll do—and how much you'll spend—for the rest of your life. Work with an experienced financial planner to help you build the retirement plan that will fund your dreams.

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

These are 5 things that you might forget about that can make a HUGE impact on your retirement. These five issues are things that you need to consider when you create a retirement plan—or they could derail your retirement. Listen to this episode of the Retirement Made Easy podcast to find out what they are (and what you can do about it).

You will want to hear this episode if you are interested in...

• [1:26] Check out our FREE resources at RetirementMadeEasyPodcast.com
• [4:46] Issue #1: Do you want to leave an inheritance?
• [76:30] Issue #2: Do you plan to downsize or relocate when you retire?
• [8:49] Issue #3: What is a 62-year-old couple facing in their life?
• [11:00] Issue #4: What is your plan to pay for your own care?
• [12:03] Issue #5: What big expenses do you have on the horizon?
• [17:08] Listener Question: Would I work with a stockbroker?

Issue #1: Do you want to leave an inheritance?

Do you want to leave an inheritance for your kids or grandkids? Do you want to leave a gift to your church or charity? What does that look like to you? To what extent do you want to make a financial impact in their lives?

Many couples don't agree on this topic. More often than not, the wife—with a more maternal instinct—wants to take care of her kids and grandkids. The husband usually wants to make sure they're cared for first. If you're married, you want to be on the same page with your spouse. If it's important to one of you to leave an inheritance, that has to be planned for.

Issue #2: Do you plan to downsize or relocate when you retire?

Have you thought about moving closer to family? Or are you going to be a snowbird and retire to Florida? If you're going to relocate or downsize, maybe it doesn't make sense to pay off your mortgage. If you move to a state like Florida, that plays into the decisions you make as well. If you do a Roth conversion in Florida, you won't have to pay state income tax. So it makes sense to wait until you live there to do the Roth conversion. How will the move impact your budget and cashflow? Will you have HOAs? Higher property taxes? Will utilities increase or decrease? These are all questions you need to consider, if not answer.

Issue #3: What is a 62-year-old couple facing in their life?

Are your parents still living? How is their health? How far away do they live from you? Who will care for them if you retire out of state? Do you have siblings to help care for them? My mom was the oldest of three. Her parents and siblings were local. But her siblings were younger and both working. When my mother retired, instead of traveling and living out her retirement dreams, she ended up caring for her parents. She did all of their shopping, took them to doctor appointments, etc. The first years of her retirement were focused on caring for them.

Issue #4: What is your plan to pay for your own care?

When the time comes, will you get a long-term care policy? Will you self-insure? What will the costs be when you need the care? It may cost less if you live in a rural area. Quality care costs around $8,000 a month in St. Louis, MO—and that's the price today. What will it be in 20–30 years? This is a question you must consider even if you are in the best of health.

Issue #5: What big expenses do you have on the horizon?

Large expenses need to be accounted for in your retirement plan. What do I mean by large expenses? Maybe you need a new vehicle. Maybe your home needs a new deck or a kitchen remodel. Maybe you want to pay off your mortgage. Maybe you want to purchase a camper. Do you have a future wedding to keep in mind? What about a child or grandchild's student loans? You have to plan for these big expenses, goals, dreams, and visions.

If you wake up one day and decide "I want to buy a $45,000 pontoon boat" it can seriously mess up your retirement plan. But if you planned two years ahead of time, your retirement plan can be adjusted. Listen to the whole episode to hear a story about someone who didn't plan for these types of expenses. Plus, I answer a listener question I've never been asked before.

Resources & People Mentioned

• Check out our FREE resources at RetirementMadeEasyPodcast.com

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

In this special retirement replay, we listen to one of the most popular episodes: "The Retirement Story Everyone NEEDS to Hear." Why is it so popular? I outline some things you need to know when you're planning for retirement. Things like the life expectancy of the average 62-year-old, what we can learn from history about inflation, the optimal time to start withdrawing from social security—and how to apply it all to your retirement. Don't miss this one.

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You will want to hear this episode if you are interested in...

• [1:36] The retirement tale everyone needs to hear
• [4:25] How to plan for your retirement
• [5:06] What is the life expectancy for our retirees?
• [7:26] What average healthcare might look like
• [8:33] What the past shows us about inflation
• [16:05] What interest rates looked like 20+ years ago
• [16:51] Takeaways you can learn from our hypothetical couple

Resources & People Mentioned

• Social Security Administration

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Did you know that some months are better than others when it comes to retiring? What month YOU should retire depends on numerous factors, like what you do for a living, health insurance, your retirement portfolio, and even the weather. We'll cover it all in this episode of the Retirement Made Easy podcast. You will want to hear this episode if you are interested in...

• [0:26] The top 5 episodes of the podcast you need to listen to
• [3:26] Check out FREE resources at RetirementMadeEasyPodcast.com!
• [5:05] The best month to retire by profession
• [9:03] Factor in when you can jump on Medicare/health insurance
• [9:40] What to do when life throws a wrench in your plan
• [11:56] The two months I would choose to retire
• [14:08] Why the weather should be taken into consideration
• [16:41] Consider all of the factors that will steer your decision

What is your profession?

What do you do for a living? If you own a business, you'll want to sell your business and retire in January. Why? It's a clean slate for your taxes. You won't be taxed on earned income PLUS whatever is due on the sale of the business.

Many teachers retire in July when they get full credit for the previous fiscal year. Teacher's pensions are based on your best three working years. Typically, that's your last three working years because you've gotten raises along the way. Some teachers will work in Summer school, which is included in the pension calculation.

Does your profession impact when you can retire?

Do you have a bonus to factor in?

I encourage those who work in the corporate world and get a yearly bonus to wait to retire until that happens, which is usually in March. For example, bonuses from 2021 are typically paid out in March 2022. I don't see it as an ethical dilemma. That bonus was earned the previous year. It's the same with company stock options. Once they're issued, they're yours.

Loko at your 401k. When are you fully vested? If you're only 80% vested, can you wait an additional year? Then the match dollars that your employer contributed are yours once you retire. Don't leave money on the table. Don't walk away from a bonus you earned by retiring early. Keep listening as I talk through how health insurance options impact the month you retire in.

The month I would choose to retire

I would choose to retire in March but preferably in April. Why? Many people in the corporate world have sick/vacation days paid out in some capacity when they retire. I've seen anywhere from $5,000 to $30,000 payouts, depending on how long someone worked for their employer.

You will most likely be taxed on the vacation and sick days built up. If so, you don't want to retire at the end of the year and have to pay taxes on a full year of earned income PLUS that payout. It may even move you into a higher tax bracket. It makes more sense from a tax standpoint to wait to retire until April. Then you have 3 months of earned income, can still contribute to an HSA, and the tax rate will be lower. What else makes April great? Better weather!

When life doesn't give you a choice

Even if you have a great plan in place for retirement, sometimes things happen. Maybe you're unable to keep performing the same work you were doing and have to retire early due to health reasons. Or perhaps your employer is making layoffs. Someone approaching retirement is in their peak earning years with a plethora of experience right? But employers look at them and see dollar signs. To cut costs, they'll try and offer "early retirement" packages to people 55 and older. The truth is that sometimes when you retire is out of your hands. But if you have a choice, give this episode a listen to help you decide what month you'll retire.

Resources & People Mentioned

• Check out FREE resources at RetirementMadeEasyPodcast.com!

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

What can you do to help you achieve your goal of retiring at age 70? When you write goals down, you increase your odds of completing them by 10x. So the first thing you can do to increase your odds of retiring at 70 is to write down: "My goal is to retire at age 70." Now, you need to write down other things you can do to maximize your chances of reaching your goal.

You might write down, "I will delay my social security benefit until age 70." That would maximize your social security. However, I've run retirement plans where it makes the most sense to collect social security at full retirement age instead. Then you can invest those dollars in things like growth mutual funds.

What other things can you add to your lease to achieve your goal of retiring at 70? Listen to this episode of The Retirement Made Easy podcast to learn more!

You will want to hear this episode if you are interested in...

• [0:22] A BIG thank you to my listeners
• [5:56] The importance of writing down your goals
• [8:40] Claim social security at age 70
• [10:02] #1: Pay off your house or downsize
• [10:53] #2: Consider taking on a part-time job
• [13:58] #3: Find ways to save more for retirement
• [16:08] #4: Review how your retirement accounts are invested
• [18:44] #5: Sit down with a retirement planner

#1: Pay off your house or downsize

You might want to pay off your mortgage before you retire. Or, you can downsize into a smaller home prior to retirement to save more money leading to retirement. I had one client who still lived in a 4,000-square-foot house after his kids grew up and moved out. He never used the second level or the basement. But he had a hard time selling it because it was where he raised his kids. But the best strategy for him was to downsize.

#2: Consider taking on a part-time job

Retirement doesn't have to be all or nothing. I know multiple clients who work part-time in retirement because it keeps them busy. Secondly, it brings in extra income, which means you don't have to tap into your retirement accounts as much. Ask your boss if you can still work 15–20 hours a week. Many pre-retirees are surprised to find that their boss is completely on board with keeping them on part-time. I don't know what you're good at or what you're passionate about but there will be a part-time venture out there for you.

#3: Find ways to save more for retirement

You can save more money for retirement by cutting your expenses. I always recommend setting a budget. You can use resources like EveryDollar, Mint.com, or even my free budgeting tool. One area where many people should consider trimming their budget is life insurance. I'm not saying to go out and cancel your plan. However, it's probably a good time to review it. If you're in your 60s, your kids are raised, and your home is paid off—do you really need life insurance? Don't throw your money away on life insurance premiums for coverage you don't need. Take that money and invest it for your future. I'm certain if you look at your budget you'll find something you can trim to save more money.

#4: Review how your retirement accounts are invested

You need to review your retirement accounts and make sure that they are working for you. Are they helping you get closer to your goal of retiring at 70? I spoke with someone who decided to take an IRA and purchase a CD. The CD paid an interest rate that was less than 1%. If you're already behind funding your retirement accounts, a 1% return per year isn't going to cut it. Inflation is north of 8% (averaging 3% per year). If your retirement is chugging along by 3.75%, you're falling behind. You have to pick up the pace. You can't drive in the slow lane and expect 1% to get you to where you need to be.

#5: Sit down with a retirement planner

A retirement planner can help you determine how realistic your plan is. They can also help you:

• Determine how much money you need to save
• Calculate the rate of return you need on your investments
• Choose the debt to pay off between now and 70
• What holes do they see in your retirement plan?
• How much part-time income do you need to supplement social security, pensions, and your retirement nest egg?

A retirement planner can help you make your checklist as realistic as possible and bring you ever closer to your goal of retiring at age 70. Whatever you do—write down your goals.

Resources & People Mentioned

• My FREE budgeting tool
• Mint
• EveryDollar

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Yes, you read the title right—there are some questions that I can't answer. In this episode of the Retirement Made Easy podcast, I dissect questions submitted by Jerry, Dean, and Jean. All three asked great questions that I just can't answer. So in this episode, I'll explain why I can't answer them, the information I would need to give an informed answer, and things each listener needs to question for themselves.

You will want to hear this episode if you are interested in...

• [4:28] Speculative investments are never the answer
• [10:40] Retirement decisions must be made with your significant other
• [15:50] How age differences impact retirement planning
• [16:57] Why joint ownership can be dangerous

Speculative investments are never the answer

Jerry expects the price of a barrel of oil to soon be over $200. He's wondering if he should shift part of his portfolio to energy stocks and mutual funds to take advantage of the opportunity. It's a great question that I can't answer. Why? I need to know more about Jerry's situation.

• What is a portion of your portfolio?
• What is your risk tolerance?
• What is your overall goal?

I don't like speculating on things that might happen. I design a portfolio based on each person's unique situation and what they're trying to accomplish. How is your portfolio designed to get you to your retirement goals? If you can't answer that, you need to rethink things.

I met with a potential client who wanted to take half of his portfolio and invest it in GM and invest the other half in Ford. It was his entire life savings from working for 40 years. I told him that I couldn't work with him. GM went bankrupt and the stock went to zero. Half of his portfolio was gone. Fortunately, Ford stock rebounded. But that was a risk he should NOT have taken. His decisions were based on speculation.

Retirement decisions must be made with your significant other

Dean, a listener from Indiana, is 63-years-old and his wife is 53. He's retiring in December of 2022. He's wondering when he should claim his social security, which choice makes the most sense for a pension election, and if he should pay off his house if he has the cash to do so.

There's so much more I'd need to know to answer these questions. When I look at a husband and a wife, they are a team. Decisions must be made that benefit both of them. If Dean's wife has great genes and will live far longer than him, he should consider taking the joint survivor option for his pension. Dean didn't provide lump-sum details (if they exist). Does his wife have a pension? Does he have life insurance? But the key is that a couple needs to make decisions together. So many factors must be discussed with a fiduciary to make the best decision possible.

If you have the cash available and paid off your house, what does it leave in an emergency fund? Generally speaking, I like to see people retiring without a mortgage. Retiring debt-free can be a huge weight off of your shoulders. Then you can spend money on things that will enhance your life in retirement.

How do age differences between spouses impact retirement planning? Listen to hear my thoughts!

Why joint ownership can be dangerous

Jean has recently experienced some sad changes in her life. To make sure that her son is her sole beneficiary, she put his name on her house and all checking and savings accounts. She also changed her will to name him as the sole beneficiary of everything. She's wondering if she made the right choice.

My answer? I don't know. You've made your son the legal owner of half of everything you own. If he was a rotten person, he could write checks and spend through your accounts. Whenever you name someone as a joint owner of any account, you run that risk. Secondly, if he has debts, someone could come after all of your assets. While hypothetical, these are risks you must be aware of.

What else do you need to be mindful of? Listen to the whole episode for some more thoughts you should consider!

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Roth conversions are a useful tool that you should consider taking advantage of as you approach retirement. If you have a Roth IRA, it would grow tax-free for life. When you take withdrawals in retirement, they will be tax-free. With a traditional IRA, you pay taxes whenever you take withdrawals. So if you take a $5,000 withdrawal, you have to pay Federal and State income taxes. But when should you start doing Roth conversions? Listen to this episode of Retirement Made Easy to hear my thoughts.

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You will want to hear this episode if you are interested in...

• [3:20] How to get a FREE retirement assessment
• [5:26] Why I don't talk about cryptocurrency
• [8:52] What you need to know about the Secure Act 2.0
• [15:12] The basics of Roth conversions

What you need to know about the Secure Act 2.0

The Secure Act 2.0 will likely pass in the senate with minor changes. Here's what you need to know.

If a student is paying toward student loan debt, their company can "match" that payment and contribute it to the student's 401k—even if the student isn't directly contributing any money to the 401k. Employers are being incentivized to help students pay off loans.

If you contribute to a 401k and you're over 50, the most you can currently contribute is up to $27,000 per year. Part of it is the $6,5000 catch-up allowed when you turn 50 (If you're under 50, you can contribute $20,500) The catch-up allowance will be increased from $6,500 to $10,000 for anyone 60 or older.

Currently, once you turn 72, you must start taking required minimum distributions from your IRA and pay taxes on the money. This bill will change the age requirement gradually. By 2032, the RMD age will be 75. This gives people three more years where they aren't forced to pay taxes on RMDs.

This bill is huge. It will allow you more time for your money to grow tax-deferred. Who wouldn't want an extra three years? You can also use those three extra years to do Roth conversions in a lower tax bracket.

The basics of Roth conversions

Kathy is in her early 50s and her husband is in his mid-fifties. They're trying to figure out if they should wait until later in life to start doing Roth conversions. Kathy's husband will likely retire in five years, but she wants to work a few more years. When does it make sense to do Roth conversions?

The first question I'd ask is, what will your income bracket be now, next year, or in five years? If you're moving to states like FL, TN, or TX that don't have state income tax, you will not have to pay income tax on those Roth conversions. It may make sense to wait to do Roth conversions until you're an official resident of one of those states.

Keep in mind that in 2026, the 2017 Tax Cuts and Jobs Act will end. This means that tax rates will become higher. The 12% tax rate will increase to 15%. The 22% bracket will jump to 25%. The 24% will jump to 28%. When you look at doing Roth conversions, you want to maximize how much you can convert but still stay within your current tax bracket. It's a calculated and precise process that is best executed when done by a professional.

Roth IRAs allow you the ability to have control over your lifetime tax liability. You're never forced to take distributions and when you do, they're tax-free. This gives you a say over how your income is taxed in the future. The Roth IRA is a powerful tool. Listen to the whole episode to learn more!

Resources & People Mentioned

• Get a FREE retirement assessment
• Check out the resources on our website
• The National Study of Millionaires

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

This episode of the Retirement Made Easy podcast is a mix of the old and the new. I revisit some listener questions that are currently relevant as well as answer a NEW question that's debunking a once-popular social security disbursement method. What is it? You'll have to give this episode a listen to learn more.

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You will want to hear this episode if you are interested in...

• [1:40] Get your FREE pre-retirement assessment
• [2:15] Question #1: Debunking the "file and suspend" disbursement method
• [6:07] Question #2: Required minimum distributions and Roth conversions
• [7:18] Question #3: Do you take the lump-sum pension or monthly checks?
• [10:16] Question #4: What's the best way to pay for Medicare part B?
• [13:45] Question #5: Should you invest in Series I Savings Bonds?
• [16:03] Question #6: What an inheritance means for your retirement

Debunking the "file and suspend" disbursement method

After doing some research, Paul concluded that filing and suspending his benefit at his full retirement age would be the best scenario for him. Why? At any point after full retirement, he could go back to social security and say he messed up and wanted to claim his benefit at his full retirement age. What would happen? They'd write him a check for a lump sum for the difference of those years.

Here's the problem with the file and suspend method: The Bipartisan Act of 2015 eliminated the lump sum option. Now, if you file and suspend, they will NOT write you a lump sum. While this idea doesn't work anymore, we've certainly used this method in the past.

Another popular loophole was to file a restricted application for your spouse. If Paul's benefit was $3,000 and his wife's was $2,000 a month, Paul could file a restricted application. His wife would still get the $2,000 but he'd get half of her benefit—$1,000. Then, he'd let his own benefit defer until age 70 and collect it when it's higher. Unfortunately, this strategy was also done away with because of the 2015 Bipartisan Act.

Do you take a lump-sum pension or monthly checks?

This particular listener is worried her husband's pension won't be there down the road because her uncle's pension went bankrupt. She thinks he should take the lump sum because they don't need the monthly income. Why? They can live comfortably on social security. What should she do?

Firstly, I'd like to point out that I need more information. I'd want to see how well-funded the pension is and whether or not it offers a partial lump-sum option. If so, you could still get the monthly check and then roll the lump sum into a Roth IRA.

Secondly, what other retirement resources do you have? If you don't have enough saved for retirement and are relying on social security and this pension, then you've got liquidity concerns and it makes sense to take the lump sum. You have to invest the money to make sure it lasts as long as you do.

Listen to hear what else I think you need to consider when it comes to pensions.

How to pay for Medicare part B if you delay social security

This listener wants to delay their social security until age 70. He's currently 63 and wants to retire at 65 and jump on Medicare. What's the best way for him to pay for medicare part B if he's delaying social security disbursements? The Medicare part B premium is income-abased. For most people, it will start at $148.50 per month. It comes out of your social security benefit.

The cost of Medicare Part B is increasing to $170.10 in 2022 (increasing 14.5%). What do I recommend? Take advantage of an HSA. Build that up prior to retirement and use it to pay for Medicare part B premiums, dental and vision expenses, deductibles, copays and coinsurance, medicine, and more. I understand that not everyone has access to HSAs but if you do, take advantage of it. Should you choose a medicare supplement or advantage plan? Listen to hear my thoughts.

Question #5: Series I Savings Bonds

We talked about using Series I Savings Bonds to be a hedge against inflation in episode #91. Through April 2022, the interest rate is set at 7.12%. Should you consider it for an emergency fund? That's completely up to you. The interest rate is based on inflation (which is through the roof this year) and is paid every 6 months. Sometime in April, they'll announce the next interest rate. Series I Savings Bonds are limited to $10,000 per person, so a couple could invest up to $20,000. Check out the treasury website to learn more! Listen to the whole episode to hear all of the questions!

Resources & People Mentioned

• Get your FREE pre-retirement assessment
• Series I Savings Bonds

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Mcdonald's has over 38,000 restaurants across the world. They've closed all of their locations in Russia, which equates to about 2% of McDonald's restaurants. Other companies—such as Apple—are following suit. How will those companies' actions impact your portfolio? Before sanctions, Russia's stock market represented about 2% of the Emerging Market Index (MSCI). With the sanctions, the MSCI is kicking out Russian companies. This means that you'd no longer be susceptible to the Russian market.

What do you need to remember? US markets are emotional. With the war ensuing, it will stir the market, which tends to make the market go down—or even up—temporarily. The Russian/Ukraine conflict coupled with rising inflation has investors on edge. What could you do with your investments to fight the rising inflation? Learn more in this episode of Retirement Made Easy.

You will want to hear this episode if you are interested in...

• [3:04] Check out our free resources at RetirementMadeEasy.com
• [4:40] What's happening in Russia and Ukraine
• [7:30] How the conflict impacts your investments
• [10:29] How raising interest rates impacts the market
• [13:24] Idea #1 to fight rising inflation: buy bonds
• [15:00] Idea #2 to fight rising inflation: dividends
• [17:56] The potential suspension of state gas tax
• [19:38] Diversify your portfolio across industries

What's happening in Russia and Ukraine

The gross national income per person per capita in Ukraine makes it the poorest country in Europe. It's a large grain and natural gas exporter. The country also has a large aerospace presence. Putin doesn't want Ukraine to join NATO, the world's most powerful military alliance, created in 1949. NATO consists of 30 member nations (including the United States). If you're a member of NATO and are attacked, the other nations will come to your aid.

NATO made an agreement in 1991 that stated they would not expand further east. Putin believes that NATO has breached that agreement. He doesn't want Ukraine to join NATO. He wants a say in the country's future. Ukraine is attractive to Putin because it borders Russia and its southern border backs up to the Black Sea (a huge advantage for the export/import industry). Is all of this upheaval impacting your investments? There are likely other factors at play—the talk of inflation, the FED raising interest rates, etc

How rising interest rates impact the market

According to Forbes, five out of nine times the Federal Reserve raised interest rates, one month later the S&P 500 was up. In four out of nine cases, the S&P 500 was down. It's pretty close to a 50/50 split.

During the past five consistent interest rate hikes by the FED, 4 out of 5 times, the S&P 500, Dow Jones, and NASDAQ were positive. If you're looking for a strong correlation that shows rising interest rates coincide with falling stock markets, you'll be disappointed. We do NOT see a strong correlation.

While rising interest rates mean it will be more expensive for you to borrow money (i.e. get a loan to buy a house) it's great for the banks and the financial industry. It's good for the "Savers" out there because those who have money in CDs, money markets, and savings accounts will see their earned interest trend upward. How can you fight the rising inflation and come out stronger? There are two ways.

Idea #1 to fight rising inflation: buy bonds

Series I savings bonds saw a 7.12% interest rate in November. You can purchase $10,000 worth of Series I savings bonds per person per year from the government. Every six months, the interest rate they pay is adjusted based on inflation. Why are they paying 7.12%? Because inflation is out of control.

As inflation is brought under control, interest rates begin to drop off. That's one opportunity to look at to take advantage of higher interest. But you have to consider keeping them for five years. If you sell them early, you have to pay back some of the interest you would have earned.

Idea #2 to fight rising inflation: dividends

Many publicly traded companies had fantastic years in 2021. Because of this, many companies increase the dividends they pay their shareholders. The Dow Jones contains 30 of the largest US companies (companies like Disney, Coca-Cola, Microsoft, etc.). Of those 30 companies, 27 of them pay dividends to their shareholders.

All of these companies are also included in the S&P 500 (the largest 500 publicly-traded companies in the US). They make up 25-30% of the value of the S&P 500. The median dividend increase in the S&P 500 in the 4th quarter of 2021 was 8.46%.

Many retirees are dependent on the income they get from their investments. It's good to know these companies are increasing their dividends significantly. A portfolio that's focused on dividends can help you counter rising inflation.

Resources & People Mentioned

• How Does The Stock Market Perform When Interest Rates Rise?
• Can You Believe the Price of Gas?

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Years ago, a gal I'm going to call "Robin" came to us and asked about our pre-retirement assessment. She wanted to retire at the end of the year and wanted to make sure she was on track. She brought us 401k, IRA, social security, and pension statements. She was curious how much she had to live on in retirement. We could NEVER have predicted what happened next. Listen to this episode of Retirement Made Easy to learn from her story.

You will want to hear this episode if you are interested in...

• [0:21] Michael Jordan still needed a basketball coach
• [2:05] Check out FREE resources at RetirementMadeEasyPodcast.com
• [3:35] The unexpected outcome of Robin's pre-retirement assessment
• [9:27] The importance of diversifying your portfolio
• [12:48] What we did to get Robin back on track

The unexpected outcome of Robin's pre-retirement assessment

Robin still had a hefty mortgage and a car loan. However, she had three different old 401ks in addition to a new plan. She also had a couple of small pensions. But there were missing pieces in her statements. Specifically, we couldn't find the balance of her 401k from when she had worked with JCPenney. When she left Penney's, her 401k was around $300,000, so she estimated that it was at $800,000. But I didn't want to guess—I wanted to be sure.

So we found the custodian of the 401k, verified Robin's identity, and found out the balance. Her 401k had dwindled to a measly $18,273. Robin laughed, thinking it was a joke—but it wasn't. What happened? The majority of the retirement plan was invested in JCPenney stock. Which, at the time, was close to $1 a share. Now, they've filed bankruptcy and are practically out of business.

After hearing this, Robin broke down in tears. She was relying on that money to fund her retirement years. We set another meeting to reconvene next week. Sadly, we did have to push her retirement date. But we knew where she stood and made a plan to move forward—starting with diversifying her portfolio.

The importance of portfolio diversification

The first thing we did was diversify her 401k—and got out of the JC Penney stock, which eventually went to zero. What happened that caused their stock to tank? In 2011, JC Penney hired a new CEO, Ron Johnson. He was the pioneer of Apple's retail outlets and was expected to transform the JCPenney brand.

When I was young, my mother would get coupons in the mail from JCPenney. She'd wait for a large sale, take the coupons, and purchase clothes for me and my brother. If she didn't have the coupons, she wouldn't shop there. Their entire customer base did the same thing.

But the new CEO eliminated coupons and switched to seasonal sales. He put their money into store renovations to make them more upscale. What happened? Those two ideas were part of JCPenney's downfall. Customers were unhappy and sales plummeted. The stock price tanked and they filed for bankruptcy.

Meanwhile, Robin had moved on to other stores. She wasn't looking in the rearview mirror and keeping track of JCPenney. She assumed her 401k was diversified and continuing to grow like her other retirement accounts. That's why it's important to know that your retirement portfolio is diversified.

What we did to get Robin back on track for retirement

We got to work and put together a retirement plan for Robin. It included:

• Downsizing Robin's house and paying off her mortgage
• Pay off her car loan so she's debt-free
• Cutting unnecessary life insurance policies
• Increasing the amount Robin was saving for retirement
• Consolidated her pensions into a single account
• Incorporating tax planning into her retirement plan
• Pushing her social security benefits

Robin had only been saving 10% for retirement (with a company match). We told her she'd have to save 29% of her earnings for retirement. We looked at her social security and decided she had to wait and claim her benefit until age 70 when her social security benefit will be completely optimized.

These were the biggest changes we made. It's been several years now and Robin is on track to retire in 2024. Every time we meet, she brings up the pre-retirement assessment meeting. It was a huge wake-up call for her. The years leading up to retirement are the perfect time to get an opinion on your retirement plan.

While Robin's example doesn't happen to everyone, there may be some gaps you need to fill. If you need help filling those gaps and want to be prepared for retirement, connect with me to get your pre-retirement assessment today.

Resources & People Mentioned

• Get a FREE pre-retirement assessment

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts