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Mark: Welcome to the Mach 1 Market Moment Podcast with the team at Mach 1 Financial Group. The Mach 1 Market Moment Podcast starts now. Well, hello and welcome to another edition of the Mach 1 market moment. I’m Mark alongside Mike Frost from the team at Mach 1 Financial Group. He is a retirement income planning specialists, alongside David Lee & Matt Walters. Mach 1 Financial Group is serving Northwest Arkansas, the river valley as well as Grove, OK. Mike, welcome to the show. How are we doing?
Mike: Doing fantastic, Mark. Good to be with you today.
Mark: Oh, good to be with you as well. I love hopping on this show with you guys and getting into the nitty gritty of finances. This week, I want to kick it off with some questions from the mailbag. We’d love taking your questions. We love hearing from folks here in and around the area. Let’s kick it off with a question from Lou. He is over in Centerton, and Lou says, “I’ve always assumed that I’ll be in a lower tax bracket in retirement. But now I’m questioning whether or not that’s true. What do you normally see, Mike?”
Mike: Well, Mark, as usual, it really depends. For Lou, it depends on when you’re ready to retire, not as most people know in 2026 the tax rates actually go up unless Congress does something between now and then. So if you’re retiring sometime after 2026 and you have about the same income in retirement, then your taxes will go up. And if we look at the national debt, what we see all going on and hear the congressman or talking about, they want to raise some of our taxes to 70%. We feel very strongly that we’re probably in the lowest tax rates right now, then we’ll see in our lifetime. So we fully believe that you’ll end up being in a higher tax bracket when you get into retirement there, Lou.
Mark:Well, thanks for writing in Lou. Let’s take another question now. Let’s hop over to Mary Mary’s and Gravette. And Mary says, “I’m really worried about rolling over my 401 K because I’m afraid that I’m going to do something wrong and create a tax bill for myself. How difficult is this process?”
Mike: Mary? That’s a great question. And we see a lot of folks here in Northwest Arkansas that have been in several different jobs. You know, with Walmart and all the vendors here, they kind of jump around in different positions, and there’s a lot of what we call “left behind for 401k”. So the process for rolling over a 401 K takes about 10 to 20 minutes max. And people like us here at Mach 1, we handle all the paperwork. We handled the phone call your own. There, you verify your identification. They talk to us a few minutes and that’s it. It’s rolled over and there are no tax consequences whatsoever. It was done by professional. So great question, Mary, but nothing to worry about.
Mark: All right, let’s take another one. Mike, keep going down our list of questions here, out of the mail bag. This one comes to us from Murray. He’s in Bella Vista and he says “The market has to crash soon. It just has too, am I wrong about that?”
Mike: Murray, you may not be completely wrong, but if you look at the stock market back over, say, 70 plus years, this average anywhere between 10 and 12%. And that includes 2008. When it went down almost 40%. And then in 2018, when we had that declined at the end of the year. So is it going to crash? We don’t see. It’s going to crash. Our economy is strong. Jobs were strong. Things are strong in the US. Crash? No, we don’t see that. But what? It can’t go down? Absolutely none of us have a crystal ball. But the way we manage that here at Mach 1, we have strategies that we have a built-in called it a “floor”. So the market were to go down 10% 20% 30%. We have strategies that say, “Okay, we might go down, but we’re going to go down defined amount”.
Mark: Well, thanks for writing in again. Let’s move on now to the main topic of the show today. Let’s talk about this idea. This is a question that we get all of the time. Mike, I hear this a lot from folks. They want to know when they can retire when it’ll be safe for them to retire. And today we want to talk about, well, that idea of when will it be safe for you to retire? How can we assess those key factors that go into that conversation? And how can we figure out when it is safe and what is safe, even mean? As far as that goes, do you find that most people are aiming for a certain age timeframe or more of a dollar amount when their accounts, when they’re looking for that safe, time to retire?
Mike: Well, Mark first all, I appreciate the topic because I was just reading here just this week, only 17% of Americans have even talked to a financial advisor or someone about retirement. So these topics, when people are asking the questions, they’re starting the right topic. So what do we see normally? You know, some people come in and say “Hey, you know what? I want to retire at 60, 62, 65.” Others come in & want this dollar amount before I retire. And all those are okay. They’re really a matter of three functions. 1). How much do you spend a month? If you don’t have a budget, you really can’t go much further. So you need to have that monthly budget. So now we know how much you’re spending. 2). And how much do you currently have? Okay, now we got those, too. All right, then what do you want to live on? And once we kind of figure that out, then the other one, which most people don’t know, is 3). when you’re going to die. If you had all those, then we know exactly what to do. But it varies by person. We do see some people to come in, and you know what, they want to retire in two years, and they’re not there. And we had this nice piece of software we use. We can run all types of scenarios, retiring at 62 taking social security at 67, cutting your spending, increasing your spending, working, you know, all these things we can do at the stroke of a key punch. And really tell that client this would be what would be best for you in retirement.
Mark: Now you talk about having folks come in and being able to punch in that information. How does your process help folks figure out when they can retire comfortably?
Mike: Mark, we have about a three step process. Your first process. First step, you come in, we get to know you. We need to figure out what are your goals. What is it you want? And then we find out, OK, where are you? So between points a where you are and point b where you want to go. Once we have those two pieces, then it’s our job as advisors to kind of figure out a path to get you to where you want to go. So that’s step one. Step two. We take all that information that you provide us and we created analysis and then we had to come back in and we go over that analysis and then you get to pick to set. You know, I don’t like that part. Let’s do this and you kind of massage it to make it yours. And once we’ve got that nailed down and then we can talk about third step and that’s deciding. Okay, how do we want to invest your money, to get to your goals and achieve what you want to do? So it’s about a three step process.
Mark: We want you to be able to achieve your goals in retirement, and sometimes that means working longer. Sometimes that means, hey, after you dive into that process, you go through that process. Maybe sometimes you realize we’re good to go. We’re really, we’re ready to go ahead and pull that proverbial trigger toward a safe retirement. Can you tell us the story of someone after going through this process realized they needed to work a little bit longer than maybe they’d anticipated?
Mike: Absolutely had someone like this just last week. They thought that, you know, here we go. We need to do this, and if their spending had been less, they could have retired. But when they said, you know what? No, I want to keep this particular lifestyle, so that means I’ve gotta work another two or three years and I’ll take social security a little bit later because every year you delay social security, it goes up 8% a year, then they said “it makes more sense for me to go ahead and work those two or three extra years”.
Mark: And now let’s go the other way. As I said, sometimes folks go through your process and realize, Hey, we’re good to go. Let’s step on out into retirement. Give us an example of somebody who maybe walked to your process and realized that.
Mike: Well, Mark, the good news is most of our clients are in this category. They come in, they may have never worked with an adviser, and they’ve got assets, but they just really don’t have a good sense, a good feel like it’s enough. That’s the big question. Do I have enough? And once we take him through the whole process, do retirement analysis, show it to them in black and white, on paper, this is what you can expect. They get up out of the chair with a smile on their face. You can you see, like “I can do this” and they walk out feeling very good. “Yes, I can retire and not have to worry about things.”
Mark:Well, we certainly don’t want you to worry about things in retirement. We want you to be able to attain peace of mind in retirement. What does it look like to go ahead and start that process with you and your team?
Mike: Well, Mark, that’s a great question. Like I mentioned earlier, only 17% of Americans are doing it. So there’s 80 plus percent of Americans out there that have never talked to an adviser, and they need to. So how does it work? What is it like? Make a phone call to Mach 1 at 479-876-2100. Get on our calendars, come in and we sit in to talk about you and what your goals are. And then we start working on a plan. All of this is complimentary.
Mark: That number to call is 479-876-2100. Come in for a complimentary visit with the team at Mach 1 Financial Group. Mike as always thanks for joining us on the show.
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