Straight Talk Radio

Prepared for Retirement? An Interview with Melody Juge: Life Income Management

By November 11, 2015 No Comments

As a 58 year old baby boomer the question and issues raised in this interview are important!  Are you prepared for retirement?  If I were asked that question, I’d have to say – NO.  Therefore listening to Melody and her advice is right on target for me.

Join me now as you read my interview with Melody Juge.

melody jugeCHUCK: Hi, this is Chuck Gallagher with Straight Talk Radio and one of the things as a baby boomer that strikes me is there’s a huge segment of the population that really needs to be thinking about and planning for retirement. Well, I happen to fall into that category and I will also say there’s this monster size of the population. They are probably as woefully unprepared and we sit here today and we think about planning for retirement and we think about income needs and we think about social security and we hear all of the politicians talking and it’s daunting.

So today our program is dedicated to really looking at how we can deal with the financial aspect of life and moving forward in the different phases of life. My guest today is the owner of Life Income Management. Her name is Melody Juge. I think I pronounced that correctly. Is that right, Melody?

MELODY: You did, Chuck. Hello.

CHUCK: Well, that’s great, okay. She is the founder and the managing director of Life Income Management, which is a firm that specializes in retirement, income, planning and education for people who are 55 years of age or older, and I fall into that category. I feel like I’m 39. I’m 57, soon to be 58 and bombarded with crap from AARP, so it’s obvious that [chuckles] I kind of fall into your category, Melody. So I’m really thrilled that you’re here and able to join us on the show.

MELODY: Well, thank you, Chuck. It is a pleasure to be with you today.

CHUCK: My background, and this is not about me, but I want put this out so it kind of sets a little bit of a stage, my background is accounting, formerly was a CPA. I sat back with a multitude of people going through the finance class and we’ve learned about value and benefit of compounding and yet it seems, and I don’t think that I’m the only one that falls into this category that is baby boomers, we also learned about the value of leverage and it would appear that we’re woefully unprepared for our future financially when it comes to retirement. In fact, it been said in many cases that most of us baby boomers, as long as we’re physically able, we’ll work in some form or fashion. Not because we want to but because, in many cases, we have to. What do you find in the work you do today, Melody, in terms of people’s preparedness?

MELODY: Well, there are two things. There is work that I do and there’s the general statistics, okay?

CHUCK: Right.

MELODY: So statistically speaking across the board, the general population isn’t prepared, but the boomers and people who are drawn to me through my column on market watch or through my speaking engagements or interviews, they don’t have quite as much as they would like, but they’re fine! It’s a manner of structuring the money in such a way that you’re preparing for the 10 to 40 years of under an income. You see, the retirement journey is an emotional one. It’s not so much economics as it is emotional.

CHUCK: Okay, that’s interesting. I haven’t heard it put that way. That’s cool.

MELODY: To my knowledge, I see only one that says it, but it’s saying enormous change in life and the boomers, because we are the leaders of everything. Remember the hula-hoop, Chuck, when we were little?

CHUCK: [laughs] Yes!

MELODY: And The Beatles and The Bell Bottoms, and all of that, and it’s the same generation. We’re energetic. We’re full of life. Our careers are very important to us and winning off from them, for some is difficult, so people enjoy so much what they do. They will continue to do it or do a variation of it. As far as not being prepared, life threw a lot of curveballs that this particular generation wasn’t prepared for, the “me” generation. We weren’t prepared for it so now the actions are obvious. You either retire with what you have or you plan a retirement, but you continue to work and you don’t draw down on your money until you enter age 70 or you’re well into your seventies.

CHUCK: Now, Melody, I’ve think, from what you said, there’s two parts to that, and I’d kind of like to explore both of them. I mean, obviously, if it is true that people who have accumulated over a certain period of time are going to seek professional who can help them truly understand the proper, I guess the word I’m looking for, maybe it’s process, the placement, I think you’ve mentioned there’s like the accumulation phase and certain phases, so you’re able to help them see what they should be doing with what they have in order to make sure that it meets their needs. Am I on target with that?

MELODY: You’re on target. I think I can help clarify this for you.

CHUCK: Great.

MELODY: Accumulating assets is what you do from the time you’re 25 or 30 years old until you get to retirement age. You are putting money in a 401k or you’re saving money or you’re buying a house, and you’re selling it, and you’re upgrading it, you’re purchasing real estate property. So you’re accumulating assets. You’re building, building, building, building, and in most cases, most cases the more aggressive and the more powerful the movement and if you take a big loss, you just keep going back and doing the same thing over again to recapture your gain.

But when you get to retirement, it’s a completely different way of handling money. Number one, your earned income will either be eliminated or be reduced. Number two, you still have to have assets that are accumulating because of inflation. You need growth in a portfolio. But it’s a different kind of growth than you were used to for 20 or 30 years. And number three, you have the preservation phase of retirement income management. The preservation phase is phase to, and it is the most treacherous phase because you’re moving from the accumulation phase into the preservation phase and that’s when you slow down. You’re preserving. Often times I have seen where people overprotect. They over-preserve what they have and they don’t have enough in accumulation and they don’t have enough in cash. So, the preservation phase is a very, very, very, delicate dam where certain amount of money has to be moved to guarantee an ongoing income to help supplement social security benefits, but you’re still holding. When you’re in the preservation phase, you’re still holding. You haven’t started to collect yet.

CHUCK: Right. Right.

MELODY: So, you’re doing that over your planning net and if you have shortfalls, you’re planning the short. You’re saying, “Oh, okay. I’m 58, I’m 62. I have a shortfall here. What am I going to do? Well, I’m going to work really hard the next four years, four to six years, and I’m going to save a lot more money so that I don’t have that shortfall.” You see what I’m saying?

CHUCK: True. True.

MELODY: You’re finished with that preservation phase and you get everything restructured. It’s most of the time, not all of the time, but most of the time the assets will need to be restructured and then you move into the distribution phase when you start taking money out.

Now, one of the biggest issues for the preservation phase is that in our generation, being the “me” generation and with the advent of the Internet in our generation and 401k’s and doing our own investing, there’s a lot of day traders that have done very, very, very, very well. This can be quite problematic because the rules of moving forward at age 66 to age 70 are very different from the [11:36] when you were in the accumulation stage.

Also, the market is different. The investment community is different because of the computerized trading now. It’s very different. It’s very, very different now. So although it can be fun for someone to be involved to still manage part of their portfolio going forwards, you really want to begin to move some of the control to a professional. Individual stock purchases I think it’s more powerful to have a managed portfolio in this day and age.

CHUCK: So, we’re moving up on a break. I want to reach out before we go to the next segment together, and that would be “what you do”. I think it’s really interesting to talk about accumulation and preservation and then distribution. I think in our next segment, one of the things that strikes me, and I see this so often, I did a lot of work in the funeral segment of the business, so therefore we see baby boomers who come into the loss of their parents and so many of them haven’t done an adequate job of accumulations, so perhaps when we get back.

This is Chuck Gallagher with Straight Talk Radio. My guest is Melody Juge. She is involved with and the managing director and founder of Life Income Management and this is a critical, critical area for those of us who are baby boomers and perhaps a little younge, so you can learn what the process is. We’ll be back in just a moment.

[Commercial break]

CHUCK: Life Income Management. Melody Juge is the founder and managing director of this firm which specializes in retirement, income, planning and education or people who are over 55 years of age. Basically, those of us who fall into category that are baby boomers and Melody laid out for us the three stages of preparing for retirement and yet, I would tend to say that while some people have done an incredible job, and that’s wonderful and I want to give them a thumbs up for that, as baby boomers we have tended to what we want, when we wanted it and we would finance it in order to get it. When this last recession hit, it was devastating for a large number of people which threw them backwards. The accumulation stage moving into the preservation stage is where we should be and yet I’m going to say there’s a substantial number of people who are just now thinking, oh, crap! I need to start accumulating again, because what I accumulated, I burned through or lived through. Kind of open, Melody, to thoughts that you might have about where you see the baby boomers.

MELODY: Well, it doesn’t affect all baby boomers, but you’re well-versed, Chuck, in your awareness that there is a substantial portion of the generation that lived beyond their means and their investment plan went south, the values of their homes went south, their credit cards continued to go north, they drained their 401k’s and now they don’t have anything left. So to ask the question of what do they do, well, they’re living beyond their means and, frankly, you’re paying the piper, for that because you’re going to be old without an earned income a lot longer than you were going to be young with a job.

Retirement goes for 10 to 40 years without an income and you like grains of sand into a glass of water are well into the aging process. Now I realize that we are a generation who’s not aging and we’re the generation of Botox and golf, okay?

[Chuck and Melody laugh]

MELODY: And cruises. Botox, golf and cruises. But the truth of the matter is that we do age and we are all going to die. Physically, the body is not going to be here. Whatever your religious believes are, are irrelevant to me. The body will not be on the planet at some point within 10 to 40 years. So, people have to adjust their lifestyle accordingly to how they want to live. It’s a personal preference. If you have two people that are working, the suggestion is always that you live off of one income. If you can’t do it because you have to have all of those extra “lifestyle perks”, that’s fine, but at some point you’re going to pay the piper. Because–

CHUCK: Yeah– go ahead, I’m sorry.

MELODY: Go ahead.

CHUCK: At some point in time–

MELODY: No because, two and two is four.

CHUCK: Right. Absolutely, two and two is four and it’s going to be four and you said something, you said, “Our bodies are ageing…” It’s kind of funny. Year and a half ago, at 56 going into 57, Melody, I’m like anybody else, baby boomer, I thought, well, Gosh, I’m really 39, maybe I’m 41 mentally. My body says this, but Gosh, the body is really, really good and then I end up with a herniated disk for no apparent reason other than I’m just aging and stuff starts to wear out. The day that I had to walk from the bed to the bathroom with a cane at 57 was that realization day that was like, apparently this age thing does have its consequences even when we don’t expect it and we have to deal with it and it does bring about an awareness that we might not be able to work forever.

MELODY: You may not be able to work forever, but if you’re going to need the income, this is the thing, you see. These are not options. These are conversations that most people have never had and although they think they had broached the subject, they really don’t know how to dissect it fully. For example, when you’re going to retire, you have to know how much money you’ll require every month. That means exactly. Exactly. I’ve never met one person in 33 years that knew exactly how much money they required every single month. Okay?

CHUCK: Right.

MELODY: [coughs] Because even though one of the people in the couple is keeping an ongoing record, there’s usually one– They’re spending money on the side. When you’re earning money and you’re getting a check every two weeks, it’s really easy to hide your sin.

[Chuck and Melody laugh]

MELODY: If you will, okay? [coughs] So it’s knowing how much money that you require a month, but that’s for your basic survival. What do you require for your survival? That’s number one. Number two, what are your lifestyle needs? What are the things that you do that are not survival, they wouldn’t go into the survival category, but you’re used to them. You’ve been doing them for 30, 40 years. You’ve been having that perk for 30, 40 years. But now you’re going into retirement and you have to adjust your viewpoint and you have to separate what you spend money on. From the basics to the lifestyle.

All right, now you have those two categories that you’re going to fund. So, now you have your social security benefit. Well, in order to do an appropriate job on your social security benefit, and I’ve been through this with an untold number of people, really the thing to do is go to, the company will charge you $39.99 and you will put in all your information and you will get a printed report right there in front of you. You print it out and it’s going to give you all the various options, because a couple between two people– Do you know that there could be as many as 600 claiming strategies? I recently had a couple that had been to Social Security Office in Greenfield, South Carolina, three times and each time they went, they were given different information. They met me. I’ve sent them to social security choices. They paid their $39.99, they filled out the form, they got the printed report. They couldn’t believe the structure was so interesting. They took it to the Social Security Office. The Social Security Office told them they couldn’t do it, but we were prepared for them. We knew that this could happen because you’re dealing with clerks in an office, so they’ve asked for a supervisor, they turned over the report. A half an hour later they gave it the approvement and then the supervisor wanted a copy of the report because they said they’re going to use it as a training tool for that office, because they’ve never seen anything like it.


MELODY: Exactly! Social Security Choices is a company. One of the partners, the cofounding partner is Doctor Jeff Miller and he’s one of the retired mentors at MarketWatch through Wall Street Journal. He’s also the professor emeritus of Economics from Delaware University and at one time he worked at the Social Security Administration. So these are very powerful tools.

Now you figure out what you’re collecting. If you’re a husband and wife, you really don’t know until you do this. Who is going to collect what when? Because you want to maximize your benefits, all right? And even people who are divorced. If you’ve spent 10 years with somebody, you can still collect off of their social security and they aren’t going to know it. That’s something that people don’t understand. Certainly if someone is deceased, it’s the same thing.

Remember we’ve created the basic income? Now we’re creating lifestyle income. It’s very, very, very important to understand that. Most people have never examined their expenditures because we live on plastic, money gets put on automatically into our account. Nobody touches and feels money anymore. We’re basically disconnected from our own cash flow. What will happen is that once you get that social security amount, you know when it’s starting. Now you have your two [24:08]: your survival as well as your lifestyle. You have to take a look at what’s mandatory to come in every month along with your social security benefits to give you the income that you’re going to need.

Now, if you’re planning on collecting social security at age 66, but you still have to work, you need to put the brakes on and be very, very, very, very careful because you’re going to have to pay one dollar for every two, beyond the $15,400 that you can earn, but anything over that, you’re going to get penalized until you’re 70 years old. So you want to be very, very careful what you’re doing.

Also, you want to plan this as soon as possible because you need to know the numbers. You have to have an emergency fund. An emergency fund is substantial. You need at least $50,000 in your emergency fund. That’s not money that you’re going to spend for a new TV, okay? This is emergency money.

These are things that you have to take a look at. Also automobiles need to be paid off. Is your home paid off? Or are you selling your home and you’re going to downsize? This is a very, very, very complicated process. It’s not easy. It’s got wrenching emotional on a lot of levels, for most people.

CHUCK: We’re coming up on our second break and you’ve hit on a whole lot of things that we need to bore down into a little bit. Social security, budgeting, our expenditures, having an emergency fund, debts paid off and so forth. I’m excited to explore the gut-wrenching [26:00], sort to speak, of having to go through this process and really prepare for it.

My guest that I here have on Straight Talk Radio is Melody Juge with Life Income Management. You can find her at She has a great section of questions and answers that you can look at, but my suggestion is talk to her because, as you have heard, she is a wealth of information. This is Chuck Gallagher with Straight Talk Radio and we will be back after these messages.

[Commercial break]

CHUCK: This is Chuck Gallagher with Straight Talk Radio and we’re talking about creating income for life through Life Income Management. The website is and we’re talking with Melody Juge who is the founder and managing director of Life Income Management.

We were talking about, it’s kind of funny, in the second segment going into the third, we were talking about what I’m going to call “the responsibility of the baby boomers to think about budget, manage and plan for a point in time in life when you no longer will be generating the income that you’ve generated from your thirties to your late fifties”. Melody, you kind of made the comment as we were on break, you can see my eyes rolling, sort to speak, although I’m on the telephone, but I can [27:52] for the radio show, I’m going to say a lot of baby boomers haven’t given the first thought to– Well, I’ll take it back, it’s not fair. They probably thought about, Gosh, I wonder what’s going to happen, as they go to the automobile dealership and either lease the car that’s promoted from the low lease rate for the Toyota Cambria or whatever it happens to be, or the Lexus. Or they’re buying their automobile on a 72-month payout, when I remember as a kid, 36 months was a long time. So, we have become so accustomed and our economy has become so accustomed to the ease of consuming that I’m not sure that a lot of folks are prepared to plan for the time when consuming isn’t going to be a vital part of the our activities.

MELODY: Well, they don’t have a choice, Chuck. You’re saying that you don’t think most will do it. Well, bottom line is you’re getting old and you’re going to die. You’re getting old and you’re going to die and no matter how healthy you are and no matter how viral you feel and no matter how many 10Ks you run or how many Pilates classes that you take, all right, in 40 years most of us will not be on the planet. It is a journey and it is a life choice. This is a choice. This isn’t anything that happened to somebody.

CHUCK: I agree with that. I don’t want to leave the impression that what you’re saying is inaccurate. It is very accurate. The question becomes–

MELODY: No, of course it’s accurate. This is a matter of fact. It’s a life fact.

CHUCK: Right.

MELODY: It’s a passage of life. Retirement is a passage of life and you’re either prepared for it or you’re not prepared for it. If you’re not prepared for it, you’re either going to get prepared for it or you’re going to forget about it.

CHUCK: So, yesterday I happened to be in Dallas, Texas, as we’re doing this interview and I was driving down the road. I flip on the radio and it was a radio talk show and a guy calls in, it was an interesting question which is kind of right down your alley, but the guy calls in and says, “Look, I have accumulated a fair amount for retirement in my 403(b). Here’s the money. It’s sitting there.” I thought it was unique how he put this. He said, “I know the money being there is invested in mutual funds. It’s fairly conservative. I mean it’s not in CDs, which draw fundamentally no interest. Fairly conservative, in a mutual fund. I’m thinking about putting it into an annuity which will create a steady stream of income for me for life. The reason I’m thinking about putting it in an annuity is if I do that, I can’t get to the principle. If I leave it in my 403(b) or if it was a 401k, my 401k, I could get to it. Therefore I might be tempted to spend it should something catastrophic take place, which would eliminate the future distribution from the annuity.” So I [31:24] out to you because you talk about accumulation. Well, this person had accumulated, he had preserved it up to a point, but he’s basically saying, “I don’t know if I have the discipline not to spend it if it’s available. Maybe I should choose some other investment vehicle that wouldn’t allow me to do that.” What are your thoughts on that?

MELODY: Well, someone’s lack of discipline for how they control their life is really not anything I can comment on. This is not kind of a situation that I would involve myself in. But I can certainly address the subject of annuities. I have taught the structure of annuity contract for years. I’ve taught it at university level to continue education for certified [32:09] accountant. For the last year I have taught from time to time public classes in South Carolina on annuity structure because there is so much misinformation out there.

Now, I am an annuity specialist. I’m a registered investment advisor and a stock broker that I have a sub-specialty in annuity and utilizing life insurance to fund estate plan. That’s a very unusual combination, so I will address the subject of annuity for you.

CHUCK: Cool!

MELODY: First of all, the biggest problem that people have when it comes to annuity is putting all their eggs in one basket. That’s number one. When you have retirement money, whether is an 4038(b) or a 401k or a regular individual IRA or you’ve been given the option of taking a lump sum on a pension, you don’t want to put all your money into an annuity. Why? Because you still have to have some growth. Although, all the annuity companies are going to tell you about these wonderful products, where, especially, the equity index annuities with all the crediting methods and the fact that people can earn double-digit returns and they’ll never lose any principle. It’s probably wise to research all of that and to realize that an annuity is not an investment product. It is an insurance product. It is governed and it is under the jurisdiction within any given state in the United States of the Insurance Commissioner within the States of jurisdiction. It’s not an investment. It’s not controlled by the NCC unless, of course, you’re looking at a variable annuity and I don’t believe in variable annuities because the fees on them are 3.5-4.5% minimum. I’m very careful with my clients when planning a retirement. They’re holding these products for decades and you don’t want your clients to be stuck paying those kinds of fees, especially if the market goes down.

So I believe in utilizing fixed or equity index annuities modestly and also having a percentage of the assets and growth in a managed portfolio that may be designed with an algorithm where in the event of a severe market crash that the portfolio can move to cash so that you won’t have the losses that you had in 2008 and 2009. I believe that annuities are very important in a portfolio, but they need to be structured properly and for the right amount. For example, my portfolios for my clients, everyone has some form of annuity, but they only have the annuities to give them the guaranteed income for life to supplement their social security benefits and the rest of their money is in managed portfolios in the market, whether it’s in growth portfolios or covered call options portfolios. This way, if the market crashes and they take a little bit of the hit into their managed money, it’s not going to affect their ongoing monthly lifestyle. I also make sure that my people have a substantial amount of money just sitting in cash because if the market does tank and you’re 83 years old, what are you going to do?

CHUCK: Right.

MELODY: I have a lots of clients that are in their eighties and they are really, really, really, really, really healthy and they’re going live at least another 15 to 20 years. Okay? So they need income, they might not be moving as fast as they used to, all right, but they’re still dealing with the full deck of cards and they have a very full life. The biggest problem we have in our generation is medical science is so advanced that we’re living so much longer. Will we out live our money? And the key is to structure your portfolio so you don’t outlive your money.

The other mistake people make with annuities, and this is the classic one, they’ll go to a seminar and they’ll see a fancy person, a salesman, doing a brilliant presentation. They stand in line, they make their appointment, they go and they turn all of their money over and they sign the transfer documents. So now they end up with one annuity that has 300,000 or it’s 500,000. It’s ridiculous. You have to go by the State Guarantee Association in your state. The State Guarantee Association is the association that governs these insurance companies in your state if one of them goes [37:27] and has an insolvency.

I don’t believe in doing insurance contracts for more than $100,000 at a pop. If you have $800,000 in your portfolio and $300,000 be needed for annuity, I would do three contracts for $100,000 a piece. I might even go so far as doing 6 contracts for $50,000 a piece. It doesn’t cost you anything extra. If you’re working with the right annuities, there are no policy fees. You’re just going to get that many different contracts. Why would I do that? What sense does that make? Because now you have further control over your money. I’m all about control. The more we can control– My clients can control their money the more windows or doors they can get money out, because, let’s say that you’re going along and that you have $300,000 one annuity and now you have some life crisis, but if you’re going to take money out of that annuity, it’s going to screw up all your life income and all the other bells and whistles that you had on a contract. But if you have three annuities and each one of them is a $100,000 and you have an issue, you can sit down and take 10% out of one contract and it doesn’t affect the life income you’re going to be getting on other two.

The other thing is, let’s say you had a part-time work over the next few years, or you got a speaking engagement, or you wrote another book, or you did something that supplemented you income for a year and you really didn’t need to turn on your annuity right away. You can delay those. You can delay obtaining those incomes. Annuities are a wonderful, wonderful, wonderful tool, but everyone needs to be reminded that number one, they are not investments. They are insurance products. Insurance products are there to protect. Number two, variable annuities, you take the risk. As the consumer you take the risk because of the subaccount. You don’t want to do that. You want to have some form of an equity index or a fixed annuity where you are not paying any ongoing fees.

CHUCK: Melody, before we go forward, I hate to say, but we’ve got to take a break. We’re going to come back with Melody Juge and talk about or finish up the conversation on annuities and explore some of the other issues with respect to investment, social security, etc. We’ll be back in just a moment. This is Chuck Gallagher with Straight Talk Radio.

[Commercial break]

CHUCK: This is Chuck Gallagher. We’re back with our last segment here on Straight Talk Radio. My guest is Melody Juge. She is a regular contributing writer to MarketWatch. You can find her column on In addition to that, you can find her at, and if there has ever been an expert that I have had on the show that can really talk about what the baby boom group needs to do to prepare for the transitions that we’re going to be facing in life from moving from active employment into retirement in whatever form that takes, Melody is that person.

Melody, we were wrapping up the last segment and I had to cut you off because of a break and I’m so sorry for that, but we were wrapping up the last segment talking about annuities and there were a few things you were talking about. In fact, I think the last you mentioned was it is not an investment. It is an insurance-related product and I didn’t want to leave that without you being able to finish up any last thoughts on annuities before we move forward.

MELODY: Okay. Well, as I said annuities are insurance products. They are extremely valuable in terms of providing life income benefit to supplement your social security. You have to be very, very, very careful not to be sold an annuity. Annuities should be placed in a portfolio for a specific purpose. Anyone providing an annuity for you that isn’t multi-licensed I believe is problematic. Now, anyone on the planet can get an insurance license and then sell you an annuity, but to be a registered investment advisor and to also be a stock broker and then be able to provide annuities, it gives you the ability to view; you’ve been trained, educated and you have the experience to view an entire portfolio to see if the annuity makes sense or what kind of annuity makes sense. Otherwise you’re at the mercy of a very select sales cycle and that can be very problematic because there are so many different kinds of annuities. We have a sheet that we show people. There’s over 78 companies on that sheet that we work with. It has to do with what are the results that are wanted from the individual, but that’s really not the way it’s done nationwide, so you have to be very careful.

CHUCK: Outside of annuities, let me ask you this question. My parents’ generation, I’m 57, so it would be my parents or my wife’s Mom and Dad, they were what I would refer to traditionalist when it came to purchasing life insurance. They would purchase whole life policies. Maybe it would be a universal life policy, but it was certainly something other than firm. It appears that while that generation, the generation that perceived the baby boomers, was more traditional in their purchases. The baby boom generation has leaned more toward purchasing large denominations of term policies that typically will be ending in their sixties to seventies. Do you recommend the conversion of those, if they’re convertible, into a whole life policy?

MELODY: Most people wouldn’t be able to afford it.

CHUCK: Okay.

MELODY: There’s nothing better than a whole life insurance products. They are absolutely extraordinary if you get them at a young age and you can afford to pay the premium. They have multiple benefits, but the thing is that the boomers, generally as a generation, they live beyond their means. They have a denial of their mortality.

[Chuck laughs]

MELODY: Everything is shortcut, so you’re going to leas your car, you’re not going to buy. You’re going to replace it every two to three years. There are all of these gimmicks that have gone on with our generation and what’s happened is we come to a close at this stage of life getting ready to embark on a retirement journey has become painfully obvious that those were not the right rules. The best rules to follow were the rules of the previous generation where you lived below your means, okay? You’ve purchased smaller increments of whole life insurance which grow larger, right?

CHUCK: Right.

MELODY: It also has a cash value component to it which can be used in retirement. They pay extraordinary dividend, 3-4% usually is what they’re paying which–

CHUCK: Right.

MELODY: So, does that help you on the life insurance [46:27]?

CHUCK: Yeah, it does. Melody, you’re a very well-versed person, incredibly intelligent and able to easily maneuver the waters and talk about what to expect. I’ve got two, what I think are simple, questions which got a short segment, but we’ve talked as we’ve woven through this process. You’ve said on many occasions, “Determine the amount that you’re going to have for social security and then your other incomes and move from there.” That presupposes social security is going to be here for the [47:03]. So, wave your magic wand. Do you think that to be the case?

MELODY: I think that everybody needs to relax and plan their retirement and count on social security. There’s nothing wrong with the social security system. I had the privilege in number of years ago of having a private afternoon and dinner with Paul O’Neil, the former Secretary of the Treasury under George Bush, and he talked to us about social security. It was very interesting what he said. Social security is an excellent system. They just raided the trust. It’s our politicians in Washington, they raided the trust. So the fact that that money isn’t going to be there, they better figure it out how they are going to put it back there because that’s our money. We put it in there. So I don’t go to the negative. It’s ridiculous to talk about what might happen 20 years from today. That’s not my market.

CHUCK: Sure.

MELODY: My market is here. It’s today. They’re over 55, we have to plan. Your social security is there. Now, if they were to take social security away tomorrow, they would have 50% or a third of the population that would be destitute and standing in the streets and [48:35] or whatever. Social security is an enormous part of it. But I have 33 years’ experience doing this and I’ve been through 4 major market crashes. I’ve seen a lot, besides which I’m second generation. My father was in the industry, so I grew up with a words and the concept, so I have a completely different viewpoint on this than the average person in my industry.

CHUCK: Melody, we are rapidly running out of time, and I want to say to the folks that are listening, we have had a good, in fact, a great interview talking about managing for retirement. The website is My guest has been, and I’m very thankful, Melody Juge who is the founder of that organization. You can find her on MarketWatch, her articles appear there. She is an expert in, what we the baby boomers need to be thinking about and taking action on. If you have questions or you would like to contact her, feel free to go The information is there and, Melody, thank you so much for being candid, honest, straightforward and helping us focus on the thing that, I guess, us baby boomers are trying to put out of our heads, which is that we do have an expectancy to life and/or death and we need to prepare for that, and you certainly are an expert in that area. Thank you for being my guest.

MELODY: Thank you very much, Chuck. Your readers can sign up for our monthly e-newsletter and they’ll get an announcement on the articles as they come out and also the book that will be published at the end of the summer.

CHUCK: Awesome. That is great. Go to the Again, Melody, has been my guest here on this show and as I end every show, every choice we make in life has a consequence. The conversation we had here clearly talks about the fact there are choices and consequences that will take place and if we want to live the lifestyle we are accustomed to or that we can afford to, we need to make the choices today to plan for that.

Thanks for sticking with us here on Straight Talk Radio. This is Chuck Gallagher and we look forward to talking to you next week.

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