Mattson Financial Services - April 2022

Mattson Financial Services - April 2022

F I N A N C I A L S E R V I C E S , L L C

616-514-3831

www.MattsonFinancial.com

APRIL 2022

THE INFLATION MYTH HOW HIGHER COSTS WILL AFFECT YOUR RETIREMENT

You may have heard a common retirement myth that says if you have $1 million invested and it grows at a 5% rate, you can pull out $50,000 a year and be fine for the rest of your life. Unfortunately, there are two problems with this scenario. First, you’re setting yourself up for the worst possible taxable situation. Second, you need to consider inflation. If inflation is at 3% and you’re withdrawing 5%, your portfolio must make 8% just to keep up with your current standard of living. At Mattson Financial, we aim to earn our clients 3% above their withdrawal rate. If a client starts with $1 million, a 3% net return after withdrawals over 24 years will turn their initial portfolio of $1 million into $2 million. It sounds great, but the reality is that we’ve only kept up with inflation. What $1 million would have bought us today will cost $2 million 24 years from now. In 1974, my grandparents came to me on my graduation day, which was also my 18th birthday and handed me a set of keys to a brand-new Cadillac Eldorado convertible, white with red leather interior. It was at this point I knew I was their favorite. I went out to see my car, but I couldn’t find it. I went back inside, and all of the adults were snickering. I said, “Where’s the car?” They responded, “We bought you the keys; you get to buy the car.” Cute to them at the time, but not so much to me. Back in 1974, that Cadillac was $4,373. Today, an average-priced car (not as fancy as the Eldorado) costs more than $43,000. Twenty-four years from now, vehicles will probably cost $80,000–$120,000. The question is this: Can you afford it? Whether it’s traveling, going to restaurants, or just eating food you bought at the grocery store, everything will cost more. Currently, inflation rates are over 7%. So, if you’re withdrawing 5% from your portfolio, it has to earn 12% just to maintain your current living standard. Once you add in fees, you’ll need 15%–20% returns, and no portfolio can sustain that type of risk or growth. So, what is the answer? To manage inflation, we first have to create a diversified portfolio. That means including investments that do well during inflationary times, like real estate or commodities. Some people are looking into cryptocurrency,

but avoid overexposing yourself with speculative investments. Structured notes or treasury inflation-protected securities (TIPs) are other options. While these won’t make you rich, they will help your money keep pace with inflation. Secondly, you want to limit your cash savings. Having an emergency fund for up to six months is a good idea. But with more than that, you’re losing out by only getting a 0.5%–0.75% return. You want to invest those dollars elsewhere. With high-yield bonds or structured notes, you’ll receive better returns while still having access to money in an emergency. The key is to consider your increasing income needs. With all our clients, we project higher-income withdrawals later in life. We’ve talked many times about the three stages of retirement: Go-Go, Slow-Go, and No-Go. Even in your No-Go years, your 80s and 90s, you’ll need more money than you did in the beginning Go-Go years. Older people have higher health expenses and everyday expenditures like utilities and food costs keep rising. If your income is not increasing to meet that need, you will run out of money, and you don’t want to have to look for ways to economize (like moving in with family) or end up on subsistence programs. Usually, we don’t even notice inflation as it’s happening — only when we look at a gallon of milk that used to cost $4 and realize it’s suddenly $50 does it become a reality. Recently, I had the privilege of taking my four grandchildren, two daughters, and my wife Nancy to the movies. After paying for tickets for seven, popcorn, pop, and a pizza, I was out $135. In 1972, if I had $20, I could watch two movies over the weekend, buy two tanks of gas, and afford a dinner out with my friends. I guess I’m entering the old folks’ road where we say, “I can remember when $1 used to be worth $1.” Just remember, at Mattson Financial Services, we’re keeping an eye on your investments and returns to help you build wealth that takes inflationary times into account. That way, you can have the stress-free retirement you planned on.

–Gary Mattson

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TAKE YOUR INTERNAL PEP TALK

With Tips From ‘Chatter’

You probably know about the benefits of positive self-talk, but have you mastered it? If not — or if you’ve never heard that phrase — “Chatter: The Voice in Our Head, Why It Matters, and How to Harness It” by Ethan Kross may be the most important book you read in 2022. Positive self-talk is something most of us engage in daily. It’s the “you can do this” nudge you give yourself to combat dark thoughts like “I don’t know what I’m doing” and “no one will take me seriously”

“Chatter” is an exception to the rule, perhaps because it was written by an actual psychologist! Leaning heavily on scientific research and engaging case studies, Kross offers concrete tips for reducing negative thoughts (what he calls “chatter”) and giving your self-confidence a boost. One of his biggest tips, which drives a big chunk of the book, is the importance of creating “mental distance” during your internal pep talks. Mental distance is exactly what it sounds like — stepping back mentally from your worries and problems so you can gain a new perspective.

before a big presentation. But few resources give you precise strategies for how to engage in positive self-talk effectively so you can make those negative impulses go away.

TOUGH WINTER? CHECK OUT THESE SNOWBIRD SPOTS

Charleston, South Carolina If you want an ocean lifestyle, why not find one with some Southern hospitality? Charleston, South Carolina, enjoys pleasant year-round temperatures, is just a short drive from the beach, and is known for its welcoming community! History buffs will love Charleston’s rich preservation, and there is an outdoor activity for pretty much anyone. Temecula, California This option may not be on everyone’s budget, but it’s definitely worth exploring. Temecula is a great spot for those who want to be by the action — it’s just 90 minutes away from Los Angeles — but prefer scenic views and a quiet lifestyle. Enjoy locally made wine, hot air balloon rides, and a little gambling. Plus, you could bring the camper and tour the California coast, making Temecula your little home base away from the RV. Friendswood, Texas Don’t recognize the name? That’s the point! Friendswood, Texas, is a small-town destination worth adding to your list. Enjoy the warmth and wonderful Tex-Mex cuisine found in Texas without living in busy, expensive places like Austin or Dallas. Plus, Texas is a big state, so imagine all the places and experiences you can have if you lived in Friendswood all winter!

With record levels of snow along the East Coast and crushing, subzero temperatures in the Midwest, you may be considering moving away from your northern home. “Snowbirding,” the act of leaving your home residence during the cold months, is a popular alternative to permanently moving, so you can escape winter, travel, and stay connected to the community you have up north.

If you’re considering the snowbird lifestyle, don’t choose just any city. Check out four of the “hottest” spots for migrating! Phoenix, Arizona If you want a naturally warm winter without humidity, look no further than Phoenix! It’s one of the fastest- growing cities in the U.S., but it certainly doesn’t feel like it. Residents appreciate the small-city feel of Phoenix while enjoying large-city amenities. Bask in the beautiful weather and spy the scenic, red-orange

mountains that surround the city, knowing that you don’t have to shovel snow or deal with beachgoers. It’s a win-win

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KS UP A NOTCH

Visit MattsonFinancial.com for events TAKE A BREAK!

Kross goes over several ways to do this, including trying to “look back” at your current situation from one, five, or 10 years later; comparing this hurdle to tougher ones in your life; and shifting your internal monologue to third person so you can try talking to yourself as if you were your own friend. With these strategies, we can transform our thoughts, rather than avoid them. Of course, those suggestions just scratch the surface of what’s offered in the book. Kross also goes over how to help your friends, colleagues, and employees eliminate chatter, and how mastering your inner voice will help you thrive under pressure. The magazine Inc. named “Chatter” one of the “4 Business Books That Will Accelerate Your Success In 2022” — don’t miss it.

RACHAEL’S

HEALTHIER, LIGHTER DEVILED EGGS

Inspired by LiveEatLearn.com

Ingredients

• • • •

6 large eggs

• •

Optional: Hot sauce, to taste Optional: Paprika and chives, chopped, for garnish

3 tbsp Greek yogurt 1 tsp Dijon mustard 1 tsp lemon juice

Directions

1. In a large pot, add eggs and cover with water. Put on high heat, and then boil eggs for 10 minutes. 2. Once boiled, peel eggs by gently tapping and removing the shell. (Adding the eggs to an ice bath after boiling can make this task easier.) 3. Cut eggs lengthwise and place yolks into a medium mixing bowl. Set egg white halves open side up on a plate. 4. In a bowl, combine yolks, yogurt, mustard, lemon juice, and hot sauce (if desired) until smooth. 5. Transfer the yolk mixture into the egg white halves. Garnish with paprika and chives if desired.

Solution

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PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

106.9 FM and 1300 AM Saturdays from 7–8 a.m. Sundays from 11 a.m.—12 p.m.

F I N A N C I A L S E R V I C E S , L L C

3226 28th Street SE Kentwood, MI 49512

INSIDE THIS ISSUE 1

Understanding the Inflation Myth

‘Chatter’: Your Guide to Thriving Under Pressure Snowbirds Are Loving These Locations!

2

3

Healthier, Lighter Deviled Eggs Mark Your Calendar!

4

Welcome Spring With Open Arms

**Reminder: If you have any changes to your financial situation, please notify us as soon as possible.

Investment advisory services offered through Mattson Financial Services, LLC, an SEC-Registered Investment Advisor. Insurance and annuities offered through Lakeview Financial Group, LLC. Mattson Financial Services, LLC and Lakeview Financial Group, LLC are affiliated companies.

Have you ever noticed that springtime just feels lighter and brighter? That’s because, believe it or not, the seasons affect us. When spring rolls around, the energy shifts, and it’s up to us to maximize those positive vibes. Get Sprung

4 WAYS TO HARVEST POSITIVE VIBES IN SPRING

just enjoy the fresh air. Also, many areas observe daylight saving time, which extends sunlight into the evening, so no matter how you choose to spend your extra daylight, make it an adventure.

Let’s examine how we can make the most of spring and inject some color and vibrancy into our lives again after a long winter.

Welcome spring-cleaning. It isn’t called spring-cleaning for nothing! Decluttering, dusting, reorganizing, and tidying up feels great! It’s empowering and refreshing. There is something special about creating more space in your living space that gets the positivity flowing.

Rely on color. Colors have the ability to elicit certain

emotions and feelings. Tropical tones and pastels are everywhere in spring — the clear sky, grass, and flowers — so allow them to fill your space and take them with you as constant reminders to smile. If you’re up for it, wear some new colors to brighten up your wardrobe, and don’t forget to take in a sunset when you’re able!

Eat fresh, colorful foods. During spring, many delicious fruits and vegetables come into season. Berries, oranges, apples, carrots, avocados, cherries, spinach, and kale are all at their peak. Your local farmers market is a great place to get the freshest

Enjoy more hours of daylight. Spring brings more hours of sunlight and warming temperatures that can give you more time to enjoy your morning cup of coffee outside. You can take an early stroll around the block, get in a workout outdoors, or

produce to fuel your body!

Spring is a time for new beginnings and positivity. Make the most of this spring season by welcoming a fresh abundance of love and life.

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