This week on Make It Last Victor explains the importance of utilizing your financial advisor (in hand with your Accountant) to proactively do your tax planning.
Let’s get familiar with healthcare. Most people are unfamiliar with the ins and outs of healthcare in retirement. Not to worry! Victor will give you the full breakdown so you can get cozy with your healthcare strategy!
Speaking of strategy, Victor will explain the importance of building a relationship with an investment advisor early in retirement…despite managing your investments on your own. Don’t leave your family hanging!
To access additional information, please visit: Don’t Let a Health Crisis Threaten Your Retirement
Don’t let Retirement Taxes derail your retirement! Please visit Are You Paying Too Much In Taxes In Retirement? to download your FREE Guide
Also available on Spotify, Apple Podcasts, & Google Podcasts
Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and Certified Elder Law Attorney (CELA) and Certified Financial Planner professional (CFP). Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.
For more information, visit Medina Law Group or Palante Wealth Advisors.
Full Transcription Below
Mark Elliot: Welcome to “Make It Last.” I’m Mark Elliot alongside Victor Medina, the CEO of Medina Law Group and Palante Wealth. Victor focuses on traditional estate planning, asset protection, retirement distribution, proactive income tax planning. Victor has been featured on national television, “The Wall Street Journal,” “The Huffington Post,” “US News & World Report.”
If you have any questions about anything you hear on the show today, just give the team a call. They’re here to help. It’s 856‑506‑8300. No cost, no‑obligation, no pressure, no judgment. Victor’s team is here to help. They just don’t know if they can, until they hear your situation. 856‑506‑8300.
Victor, welcome to the program. Here’s one for you. We’re going to talk about some of the headlines going on, certainly, about cost of living adjustment for Social Security and Medicare premium Part B goes up as well. There’s just a lot of challenges today. How about this little stat for you? 1913. You don’t remember 1913 that clearly, I would guess.
Victor Medina: No, no. Little foggy.
Mark: American citizens receive information over the new national income tax for the very first time. That’s when we got national income tax, 1913. A married man living with his wife, who was in receipt of an income of $5,000, pays $10 a year. But if the income was actually $10,000, it is not paid $20 per year. Sorry, you’re paying $60 per year. How about that? They went from 10…
Mark: They double your income, and they went up by six times. [laughs] Sure. Taxes on that. This time of the year when we’re in November and December and the year is wrapping up. Taxes are a big part of how you’re trying to help people.
I’m sure whether it’s required minimum distributions, making sure they sign up for those of you over the age of 72, but also Roth conversions all those kinds of things. A lot of tax things going on right now. Aren’t there?
Victor: There’s a ton of tax things. I’ll tell you what’s interesting, Mark is that the longer I do this, the more I recognize that managing taxes for clients is one of the most important things that we do. Unfortunately, a lot of people think about taxes after the fact, or they think about them as things that they can’t necessarily control. The taxes are going to be what they’re going to be.
They may even think about their accountant by the way, as being the primary tax planner in their life because of the way that they can use deductions or fill out the forms.
But the longer I’ve been doing this, the more I recognized that we as financial advisors and to a certain extent when I have my legal hat on thinking forward are the primary tax planners for clients because we’re trying to do the tax planning proactively.
In a time like now, where we’re coming into the last quarter of the season, last opportunity to do tax planning for folks. We’re actually pretty busy on this front. We’re looking at the amount of taxes that are potentially going to be due because of the way interest in dividends have caused people to have to realize taxation in a particular year.
We’re thinking about how their tax number this year is going to set Medicare premiums two years from now. We’re also thinking about how to use current tax rules to help people avoid income taxes on their IRAs, in 2026.
It’s a really complicated area with lots of moving parts, where we’re really thinking about this role of government in a retiree’s life, and focusing on how can we limit the impact of that partner. I’m using air quotes with that, in our clients’ lives.
It’s a very effective strategy to be thinking about this, because the more we can keep in people’s pockets, the more that they will have to spend on their own and the more that they’ll have to leave behind the beneficiaries when they go.
Mark: We’re going to talk about social security. Got a 5.9 percent cost of living adjustment, but then Medicare premiums Part B went up $11. You got 90‑some dollars for your cost of living, for social security, they take $11 back for Medicare. That’s a good thing though, I would think to a degree, or is it a bad thing?
I’ve seen people say, “Well, it’s a bad thing.” Cost of living means inflation’s way up that means everything’s going to cost you more, so you’re not winning. At least they’re trying to help, I think. Are they?
Victor: I don’t think that it’s probably a uniform answer for everyone. We have to take people’s scenarios and understand how they’re going to enter retirement.
There’s some people that when they’re creating their paycheck in retirement, have to generate almost the entirety of that from an account that is in the market and maybe going up and down which means that…This is, of course, that they haven’t worked with this yet and we can fix that. They’re in that situation where the next paycheck is very much dependent on what the market is doing.
For a client like that, if the social security goes up by six percent and that bucket of guaranteed income increases and it reduces the pressure on their account, it might be a good thing for them, to have that number increase.
Regardless of the inflationary effects of it, regardless of the way that the Medicare Part B premiums might increase because of this higher amount that’s being paid out, just getting certainty over a greater number that gets delivered every week, maybe a benefit for clients like that.
The largest percentage of our clients have some amount of social security, usually, in the high $2,000 per month number or so, that’s already been set. Really what we’re doing is creating the rest of their plan, to fill their day‑to‑day bucket of money, their guaranteed paycheck as they retire.
For those clients, the increase in social security is more complicated set of effects. Not always positive because of what you mentioned, Mark, that it’s going to have an increase in Medicare Part B premiums.
It’s going to increase a bucket of taxable money, which means that we have less flexibility overdoing things like Roth conversions or taking advantage of tax brackets that are underutilized in any one particular year.
It’s not a uniform answer. This is where the value of an advisor comes in because some people work with their retirement advisor like us and they will say, “If I already have my investment plan, then I don’t need an advisor on an ongoing basis.”
Our clients are very comfortable knowing that the role that we play in their lives is to help them respond and guide them through the dynamic and changing elements that they encounter retirement like this one right now.
Like the fact that social security is going to go up by nearly six percent. Like the fact that the inflation numbers are pegged four, five percent depending on the month that is being reported. Like the fact that there is a series of upcoming changes to the income tax laws that may affect how much money they have to live on in retirement.
That’s where the value of an advisor comes in who can help you guide yourself through that process and feel great deal of confidence and peace of mind, that you’ll be OK at the end.
Mark: The number one fear of most retirees today is still the fear of outliving their money. They need the money to last as long as they do. That is why Victor and the team at Medina Law Group and Palante Wealth have created the “Make It Last” plan.
If you’d like to learn more about this, how do we make all these decisions? At least with the information we have. How do we make the best decisions for our livelihood and maintaining our lifestyle, and doing the things we want to in retirement?
Give Victor and the team a call. It’s 856‑506‑8300. Again, there is no cost for this. 856‑506‑8300. Victor, this is interesting. There was a quote from Jack Brennan, the former CEO of Vanguard. He says this, “You need to separate your serious money from your play money.”
Your serious money is your retirement plan. He’s got three keys here. Make a plan and stick to it. Separate your money into buckets, one little tidbit under there says, treat your serious money differently from your play money.
Your buckets are emergency fund, intermediate‑term goals, and long‑term goals. The third one is, take advantage of investing innovations but be careful. How do you feel about these three tried‑and‑true tips from the former CEO of Vanguard?
Victor: I was going to ask, am I allowed to disagree with the CEO of Vanguard and still have any out of respect by listeners? I disagree. I am going to tell you the reason why I am disagree from it. First of all, I agree with the statement that you need to make a plan. I think that’s important. You need to think about this more deliberately and not just go at it haphazardly.
I don’t necessarily agree that you need to always stick with it. The whole thing about life is that life is ever‑changing. There is not a lot of predictability. We do our best to plan. There’s saying is man plans and God laughs.
It’s something we can always rely on is the point. We need to be open to being flexible and not just bullheaded about following something simply because we made it up in the past. This is the same thing that I have to overcome when I first meet clients. This is the investment strategy that made me this entire nest egg that you are talking about helping me make last during my retirement.
I said that’s great. You made a plan then, for what you needed then but we may need a different plan now, in order for the different things that you need. In that way I have a 50‑50 with Jack Brennan, the former CEO of Vanguard is sharing with us.
The other statement in terms of separating money into buckets, the buckets that he is proposing in terms of emergency fund, intermediate‑term, and long‑term, I think I have a slightly different approach. I do like the concept of time horizons. Money that you need in the next two to seven years is different than the money that you need immediately.
You probably need a different investment strategy for them, but I don’t think that there is a distinction between serious money and play money in the way that those buckets go. In other words, where does the play money go in this scenario? To the long‑term goal?
It’s not really clear about this suggestion. Everybody envisions their retirement as a combination of the things that they need for their serious activities and their play activities. People go through retirement saying, “I only consider retirement a success if I am able to meet my serious money needs.” But people are more complicated than that.
They think about their retirement as the opportunity to enjoy the thing they may have put off during their working years or with a time that they have enjoyed family. That is a combination, I think, of both serious and play money to the extent that you’re going to include travel costs or hotel costs, or taking the family to a Disney vacation, or something like that.
I don’t know that I would separate out buckets between serious and play money, but I would separate them out in terms of time horizons, because there is definitely a different set of investment strategies that you should take on for things that are going to be used in the near term, versus things that can go in the long term.
That’s actually what we do for clients all the time as we think about separating these things out by time horizon. Now, the last one Jack Brennan, and I get to agree on which is to take advantage of investing innovations. By innovations, I’m going to translate that to be…You may have gone through life thinking certain things about certain investment products. That X are always bad, that “Y” are always good.
You categorize them that way, maybe by experience having them with them or maybe your parents told you that this is what you should be doing or God forbid, you’re watching financial TV shows, and there are loud people shouting to the screen about what you should and shouldn’t like, and you’ve adopted that as your MO going through your retirement planning.
I think that we need to be open to new ideas. New ideas can be things that aren’t necessarily innovations like they were created yesterday, but they may be innovations to you. They may be things that you do not have familiarity with. We just need to be open‑minded about using those solutions.
That brings into focus one of the benefits of working with a firm like ours because we are fiduciaries and independent. We’re not pulling from the same drawer of products over and over and over again, we are custom producing or tailoring out for clients what it is that they need in their situation to be successful.
Sometimes for them, that’s going to look like an innovation, it’s going to look like something new. We need to be open‑minded about adopting that strategy, especially since we’re taking the information from prior successes. In other words, we’re not relying on this and saying, “Hey, there’s something new over there. Let’s go try it for you.”
It’s “There’s something you haven’t heard about before, but we’re going to recommend it for you because we’ve had success using that with clients in a similar situation. Since you present with the same goals and challenges, we’re going to give you the solution that’s worked before for someone else.”
In that way, I totally agree that we need to be open‑minded to those kinds of new ideas, especially because those things tend to be the things that help you get a greater degree of confidence to know that you’ll be OK, that you won’t outlive your money, that you will have a smart strategy in case long‑term‑care issues come up in the future or what you need to leave behind for your beneficiaries.
The whole point of this is for you to sleep well at night and knowing that you’ve got a great strategy in place and one that is flexible to changing circumstances and that’s where we can come in and help.
Mark: If you think about it, there’s some big question, “Hey, Victor, when can I retire? Do I have enough? Will my money last as long as I do? Will my loved ones be OK if something happens to me?” Really at the end of the day you just want to know, “Hey, if I pull the plug on my working years, will me or my family, will we be OK?” That’s where we all want to know.
That’s where Palante Wealth coming in to create that holistic plan for your retirement and Medina Law Group to help you with the elder law stuff, the transfer on death, the trust, the wills, just the legacy planning where you need all of that. It’s about income, investments, taxes, and estate planning.
If you’d like to learn more, 856‑506‑8300 is the number. 856‑506‑8300. Again, no cost for this whatsoever. We’re just getting started on the program today. Make It Last with Victor Medina of Medina Law Group and Palante Wealth. We’ve got a lot to get to. Stay with us. We’re back right…
Mark: Glad you’re with us today for Make it Last with Victor Medina of Medina Law Group and Palante Wealth. Medina Law Group that’s estate planning. Victor is a certified elder law attorney. It’s really about the clients.
What do you need moving forward? Trust, wills, and powers of attorney and all those things that are in the elder law world. Medina Law Group can help you with and they also figure into the Palante Wealth world. Palante Wealth is about holistic planning.
Victor is a certified financial planner professional, a registered investment advisor. Palante Wealth helps create that Make It Last plan, income investments, taxes. Medina Law Group pops in to help with the estate side of it. Both these companies work together to help you make some decisions that are right for you and your situation moving forward.
The question is, do you know the answers to some of the questions. 856‑506‑8300 is the number if you have questions. 856‑506‑8300. There’s no cost to chat with the team. It’s medinalawgroup.com to find out more about that side of the business, M‑E‑D‑I‑N‑A, medinalawgroup.com, Palante Wealth, P‑A‑L‑A‑N‑T‑E, palantewealth.com.
Victor, I know you’ve done this a long time. I think you understand this. This is crazy to me. I’ve had a stent put in my heart a year ago. My daughter, of course, had a tragic car wreck almost three years ago now…No, almost four years ago, because it was 2018, her senior year of high school, paralyzed from the waist down.
I’ve seen obviously healthcare costs and all the craziness. I think my heart thing I was walking on the golf course and my chest was getting really tight and they do whatever tests they do. They said, “It looks like you need stent.” OK, fine. It was an easy procedure, no big deal, but the surgery itself was like an hour and it was 55 grand. Good thing. I have insurance, right?
Here’s the stat though. Every year, Victor, more than a half a million Americans file for bankruptcy due to medical bills, health care emergency, catastrophic, illness, accident. Certainly, they can knock you over physically but, boy, they can really knock your feet off financially, can’t they?
Victor: It’s one of the sad things that happens. I’m really not one to get into the politics of what we should be doing, but it’s certainly to me as a Christian seems wrong that we’ve got people getting financially ruined for taking care of them.
I’ve had my own encounter with that not directly, but through my mom who’s suffering from lung cancer, who a lot of our clients know about, and they were kind enough to ask me how she’s doing. She takes a pill once a day that keeps her in pretty good shape. It’s not really a form of chemotherapies. Her quality of life is super high.
It almost wouldn’t appear to the outside world that she has stage four lung cancer, but that pill costs $15,000 a month. If she didn’t have the insurance that she has, it wouldn’t be covered if she’d have to apply for some form of forgiveness plan or some leniency with the company and the manufacturer.
There was one month in the transition of the formulary from her former employer. She’s worked for the state of Connecticut as a teacher, where they move from what they had to some form.
It was under CVS and for one‑month in the transition, the wires got crossed and she actually received a bill for that. Of course, what is she going to do with a terminal illness with this pill being the only thing between her and dying much sooner than could otherwise be prevented?
She’s ready to sell it all to keep making these $15,000 payments. I had to calm her down. I said, probably a clerical error, “Don’t send them $15,000 yet. You’ve got 30 days’ supply. We’ll send you some more we’ll square this away.”
You could see how quickly someone’s life turns around when the cost of healthcare becomes something like cutting a check for $15,000 a month or in your case, having a one‑hour event that looks like its own sort of six, five‑figure transaction where people may probably don’t have the savings to just cover that and probably shouldn’t need to have the savings for it.
To me, it’s really staggering that this occurs at all, and I’m very familiar, as I know you are about how quickly life can change or of these things might actually visit on somebody’s head.
Mark: You know when you think about it. You remember our little games of, would you rather. This is an interesting, would you rather? Would you rather be wealthy or would you rather be healthy? If you had to choose one or the other, most everybody would choose health, wouldn’t they?
Victor: I think they would. I just…
Mark: It’s terrible. I’m a baby. If I get don’t feel good. I don’t get sick hardly ever, which is probably the reason why I don’t like it. I prefer to feel good.
Victor: I was going to say the same thing as funny. I just turned 46 in June and in doing that, everything started to break. It just was falling one thing after another, another pill having to follow another one and the interactions between them.
I thought to myself, this is miserable, I can’t imagine. For people, I now understand if you’ve got chronic pain, why you probably so grumpy all the time and looking for a way a bit out, because this is a horrible place to be in.
I’m with you, Mark. Probably health overwhelmed. Probably sages to say that as a financial advisor that I wouldn’t be wealthy, but I would much rather be healthy. Haven’t been unhealthy just for two or three months…
Victor: …as they were figuring things out and being miserable that way.
Mark: My daughter with her car wreck obviously messed up her vertebrae and her back and all of that, why she’s paralyzed. She’ll have days, and the doctor said, you’re just going to have them sometimes where she just can’t get out bed. There’s just too much pain. I feel for her, but she’s a trooper, I appreciate that.
That’s really our only option. We just have to keep going, gotta keep my moving forward. Healthcare is one of those things that can get really dicey and you need to have a plan, you need to have the coverage. Don’t forget, Palante Wealth can help you in the investment world, but they can also help you in the insurance world, the world of life insurance, the world of annuities.
They have no idea if any of this makes sense for you. We all have tools in our retirement toolbelt. Do we need the banking world? I would think so. Do we need the insurance world? I would think so. The investment world? Absolutely.
We really need a blending of all three worlds. The team at Palante Wealth and Medina Law Group can help walk you through all of this because there’s new tools all the time being created in the insurance world, in the investment world.
We think about the old tried and true, I mean, my Blockbuster stock, I’m going to hold on to it because I know it’s going to come back, but it’s probably not the best idea. Things change, we got to change with it.
856‑506‑8300 is the number. Victor and the team would love to help. 856‑506‑8300. It’s about having that plan. Now when you think about it, the annual election period for Medicare Advantage Part D and all that is every year, October 15 through December 7. If you have Medicare Supplements/Medigap, you can move into the Medicare Advantage world.
Medicare Supplements, if your health is good you can change it anytime during the calendar year because you need to have the doctor’s approval that you can do that, you’re healthy enough to do all of that.
I think a lot of people think, Victor, “Once I hit 65 and I’m Medicare‑eligible and I sign up for Medicare, I don’t have to worry much about any healthcare issues anymore?” Do you think are people more abdicated?
Victor: I think it’s probably common. No, don’t think…Oh, help, jeez, you get to put me in that position where I’m going to have to say the words, “No, they’re not that educated.” [laughs] That’s not where I want to go with this. I do think that people are unfamiliar with what healthcare looks like in retirement.
Unless you work for an employer that’s going to grant you the same healthcare that you had while you were working in retirement, which happens for some public school employees, like my parents just continued on with the same kind of healthcare that they had, nothing really changed. You’re going to have to make a switch.
When you make a switch, things aren’t going to change because it’s not going to be exactly the same care that you had from before. Now when you’re on Medicare, there are a host of things that aren’t going to get covered that you would probably think are going to get covered as just part of your normal healthcare, especially if you had a more robust plan working for an employer that granted you that.
For example, if you needed something like hearing aids, or you need to visit an eye doctor and get an exam for there, those things aren’t going to necessarily be covered by Medicare. If you had some issue overseas, you certainly need of something catastrophic over there likely not to get covered, unless we add a supplement for what you’re doing.
It’s one of those things where people need to go in with their eyes open. One of the things that we do for clients is walk them through that transition when they turn age 65 and they’re making their election to get onto Medicare Part A at the minimum, even if they’re still working.
Then when they eventually retire and thinking about what care that they need, either helping them in‑house or making sure that they’re in the right hands to get a supplement in place so that they can enter retirement with a complete peace of mind around their healthcare, their routine day‑to‑day healthcare that their needs are going to be covered and there aren’t going to be any surprises.
Another thing that happens when you’re in retirement that most people don’t have to do or can’t do while they’re working is, you get to shop for your prescription plan. You don’t necessarily shop for something other than something called Part D, but you get to shop on a formulary based on your specific medications that you’re taking and where you get those filled.
When you go on to the government site and you log in and you put in your prescriptions, the dosage that you get whether you get them by mail order or you’re getting them from one of a multiple different places that you might pick up your prescriptions, you may change pharmacies based on the cost in there.
It will get you the opportunity to shop for that and that is a change for people too, to know that they can go on a little shopping on the cost of their plan to make sure that they’re paying less for their prescription plan overall.
When those things come together and you’re entering this retirement phase, it is something that I find that most clients are super prepared for. They know something’s coming and they aren’t often prepared for the changes because they tend to be definitely different than what people were getting when they were working.
Mark: All right. I’m going to use your experience in sitting down with thousands of individuals and families talking retirement. What do you think most people overlook when it comes to healthcare costs in retirement? Do you think that’s part of it that Medicare covers both or everything or is already a typical thing do you think?
Victor: I probably breaks down into three areas if I’m of drawing on experience and thinking about these meetings that I’ve had we’re encountering questions around healthcare. One of them is one that we talked about already, that there is some form of coverage that is not in place unless you go and elect it like a form of a Medicare supplement.
Now navigating through, making sure that you’ve covered all of the circumstances and that’s the first one and that’s probably pretty common.
The next area that I think is one of these things people don’t plan for or they overlook when it comes to healthcare is in the area of their catastrophic healthcare needs like if they needed something on a long‑term basis because they get diagnosed with Alzheimer’s or they get diagnosed with Parkinson’s or MS.
What they’re going to need is persistent and regular care and they don’t know how to fund that or they haven’t done things to fund it.
Then the bad thing that happens that people don’t recognize until it’s too late, is that the longer that you wait to do that planning the fewer options that you have because as you’re getting older and potentially getting sicker, the less attractive you are for companies and for how you’re going to fund this like a long‑term care insurance policy or something similar.
Also, we do legal planning for people where we use legal tools to help them protect their assets and those have a time horizon that are associated with them. We need five good years of health before the plan that we can put in place from the legal side will help you protect the assets and help you fund for your care, and so that also is something that’s time‑dependent.
The third one that I see happen from time to time in terms of overlooking their healthcare, and this is I’m going to fudge the definition on this, but the cost of not discussing this with your family ahead of time.
With the ability to work as both a lawyer and a financial advisor for our retiree clients, we get to not only put the great retirement plan in place around their finances for their dollars, their money, and what they’re doing but also help them put a great plan in place for their family in the kind of care that they’re going to receive.
What happens is people will sign a healthcare directive or financial power of attorney as one document that they know that they need to have in place, but they won’t have a conversation with their family and the cost that comes up is this issue where there is something that’s written on the document but not communicated to the family.
There’s family squabbling and you’re incapacitated, so thankfully you’re not around for that, but you didn’t understand or appreciate the impact that you’ve had on your family members and the fighting that they were having. I know people don’t want to engage with their mortality.
I know that it’s difficult to have a conversation about what would happen if I got struck by a car and I’m in a comatose state, or if I get diagnosed with an illness where I’ve lost my mind, and here’s the things that I would want to do. That’s an uncomfortable place to be.
I think we’d be foolish not to recognize that that’s a difficult place to be, but it’s an essential conversation to have. One of the things that I would encourage is look for a major holiday like a Thanksgiving, or a Christmas, or some gathering where families going to be around and you’ve had a good time so far.
If you are the matriarch and patriarch of that family, and you have yet to have a conversation with the rest of your family about the kind of care that you would expect to get or who you put in charge, and what instructions you’ve given to them, you don’t want to miss that opportunity.
Many things in life, by the time it’s irrelevant, it’s too late. You can’t go back and have that discussion with them. I would absolutely encourage people to really have conversations with people and avoid the cost of all of these negative effects, of not having communicated this stuff ahead of time.
What we can do to help you address some of these issues is that we’ve created a website where you can download information that is relevant to this. It’s at 920elder law.com.
If you go to that website, what you’ll actually get is you’re going to get a white paper that’s going to help you understand how to avoid letting your health destroy your family’s wealth when it comes to healthcare costs and long‑term care costs.
It’s a great resource to use because if you’re not ready to have that conversation with people, because you don’t know how to discuss it, you can download.
That information on there as a guide to having those conversations. If you go to 920elderlaw.com and just put in your name and email, you’ll get that automatically delivered to you. It’ll set you on the path to being able to have that kind of conversation.
Mark: There you go. 920elder law.com. Medina Law Group and Palante Wealth serve the Pennington, the greater Mercer County area as well as Bucks County. Victor’s got clients in New Jersey and Pennsylvania. They’re here to help you.
If you have any questions or concerns, you can certainly pick up the white paper that would be great. Just to do your own due diligence. You can go to the website, medinalawgroup.com, palantewealth.com, but you can always give a call too, no cost, no‑obligation, no pressure.
Why wouldn’t you really when you think about it? Half an hour to an hour of your time to really get some big questions answered. It’s super important. It’s a great opportunity that we’re giving you. 856‑506‑8300. You just have to take advantage of it. The door is open. Walk‑in. 856‑506‑8300.
All right, one of the challenges for really all of us, hopefully, we never have this but they say 70 percent of us will need it at some time. That’s long‑term care. Medicare doesn’t cover it. We’re going there next. Stay with us. This is Make It Last with Victor Medina.
Mark: Welcome back to Make It Last with Victor Medina. Victor has got two companies that are here to help you. Medina Law Group, that’s estate planning, certified elder law attorney, Victor. Palante Wealth, holistic planning for your retirement. They really work together because the Make It Last plan that Victor creates along with you.
If you want a retirement plan, you got to have a lot of say, because it’s your retirement. Victor and the teams have done this before. They understand some of the missteps that people make, some of the mistakes that people make, some of the expectations…”Whoa, I didn’t expect that to happen.”
That’s pretty common that can happen. Just to open your eyes a little bit about some of the challenges of retirement because we want you to enjoy your retirement. The Make it Last Plan, income planning, investment strategies, tax‑efficient strategies, estate planning, super important taxes. You got to understand all this stuff.
If you really don’t, I’m going to go play golf. Victor’s said tell me, “Mark, you can’t play golf this week, you’re running out of money, let’s start it again next month.” That could happen, but I don’t want to worry about all the X and O stuffs. That’s where Victor and the teams come in.
But there are a lot of people that really like doing that. Do you have that, Victor? Do you have a lot of people that really enjoy the do‑it‑yourself stuff? Then maybe the spouse says, “What if something happens to you? I need to have somebody that’s kind of knows what we’re doing here.” Do you have that kind?
Victor: I do and I have where people…I don’t know necessarily that always it’s the spouse that’s saying something, although that probably is an unspoken concern of theirs. We get that opportunity. We’re blessed to work with financially savvy spouse that wants to do it themselves.
I’m sorry, that they are concerned about what happens to their spouse if something happens to them, but they’re driving that conversation. It’s not where we have to go in and say, “Hey, don’t forget, I know that you like doing this, but you ought to consider giving this up because if you die early, this other spouse is really not going to be in a great position.”
Really, we’re blessed that the clients are working. They’re thinking about that on their own. They’re the ones often driving that decision. You might be at home saying, “Well, I’ve been managing myself and probably very successfully for a period of time, but I’m going to start the relationship earlier than necessarily a need for that.”
As if you’re doing anything wrong with the investment management, but you want to create a relationship between, let’s say, a firm like ours and the entire family. You, your spouse, the kids might be inheriting this, because when you’re gone, if you leave before you have no time to do that, then they would be left in the lurch.
Our clients often drive that on their own, as being something that they’re concerned about is making sure that they’ve done the right thing for the people that they love and care about by establishing a relationship with a trusted advisor.
That’s where our value of having both legal and financial under one umbrella makes it’s easy for a family just to have one phone that they can pick up, no matter what comes up in life, something happens on the legal side, something happens on the financial side, they’ve got one relationship that they can turn to, and one that knows their entire family to help them through that.
As I said, we’re just in an incredibly lucky position to be meeting families where the savvy spouse that may have been managing it on their own the entire time, is leading the charge and saying, “I need to do this, I need to establish this relationship with you because I’m concerned about what happens if something happens to me.”
“I don’t want to leave this person feeling like they are uncovered in any way or scrambling if I check out sooner than I have an opportunity to control.”
Mark: I like that. That’s good. That’s great. Because we talked about it before, if you hate your family, do no planning. But if you love your planning, do some planning, estate planning, legacy planning, retirement planning, all of that, the better off you’re going to be. Again, that number is 856‑506‑8300.
One thing that people don’t really like to talk about, as well as estate planning, because that’s my demise. If I have talked about it, then I’m going to die sooner rather than later. Some people do think that. The other challenge that we don’t really want to talk about is long‑term care.
Long‑term care is not covered by Medicare. It covers certain aspects, hospice, for example, but if you’re going to a nursing home for the final five years of your life, or whatever, there are certain challenges when it comes to long‑term care.
How do you broach that? Or, I would imagine, you bring it up probably. If the couple’s gone through that with their own family, holy cow, grandma was in this situation, and we get to pay $8,000 a month for her care for three years. They’re going to be more aware of the challenges of long‑term care, I would imagine.
Victor: It’s interesting, Mark because you think about the families that you see most often. One of the ones that we see most often that come on full on board and having this work is retirement planners, both in the financial and legal sense. End up being the children of the parents for whom we do crisis, elder law planning.
Their mom or their dad needed to go into a facility, and they start writing a check. We help them manage that crisis. We help them get to a point where they had saved as much as possible even though their parent didn’t necessarily do planning ahead of time.
Then the next very logical conversation that flows from that is, “How can I avoid this becoming a problem from my own kids?” We will begin a plan that will help them cover all of those circumstances but proactively, preemptively.
Where what we’re doing is we’re setting up a condition since we have the time, the health in our favor to avoid having a problem like the one that we cared for with their mom.
Good or bad, for what’s going on with the grandkids, is often not nearly, “This is what’s happened to grandma, and know what happened to my grandma” is most often, “This would happen to my mom, where they’re actually dealing with the child that is principally responsible for caring for that parent.” Then they take the next step and they say, “Well, how can I avoid this becoming a problem for my own kids?” We’re able to do that.
With the nice thing is that in a couple of cases was while it is tragic that our client ended up getting sick, it was very fortunate that they did the planning because we get to have a conversation with their kids and say, “When we met your mom or dad, we were caring for grandma and it was a problem.
Now that this is happening to them” ‑‑ often happens with an Alzheimer’s situation which is hereditary ‑‑ “You’re actually going to be OK.” They’re going to be OK. They’ve got greater options and you have more flexibility. That’s a really great conversation to get to have with a family in a set of really tragic circumstances that you’d otherwise want to avoid.
Mark: That’s really well said because I think it’s so important that we handle some of these things that we don’t really want to talk about, but we really need to talk about. The number again to chat with the team at Medina Law Group & Palante Wealth is 856‑506‑8300.
Might be one of the more important phone calls you’ll ever make. 856‑506‑8300, and there’s no cost. How can you beat that?
Victor, one of the things I think a lot of people when they get ready for retirement, they’re nervous. Do I have enough? Can we really retire the way we want to retire? We need a retirement plan, the income, the investment, taxes, those types of things.
Then I think we think of long‑term care or estate planning, those types of things. We tend to think we could put those off a little bit farther down the road. Maybe when we hit 70 or 75, or if our health starts to take a turn, and maybe we need to start thinking about that.
When do we start thinking of estate and legacy planning? Do you put all that together when it’s retirement planning time?
Victor: It depends when somebody comes and does retirement planning time. Some people are thinking about retirement in their early 50s. That’s probably a little too early to think about long‑term care planning, although there are some solutions that may be better utilize when you are younger.
I would say, for the most part, we really start thinking about that kind of planning in their early 60s and then there’s different options the older that you get, meaning to say that there’s fewer options the longer you wait, but for people that are in their mid‑70s, there are still plans we can put together. They just look different than the ones we put together for their early 60s.
It never too early to have the conversation and I will tell you that, depending on someone’s experience with this, having our parent or grandparent gone through a long‑term care crisis, they’re going to be more concerned about it.
For example, if you got a situation where you knew that your grandmother or your parent had already had Alzheimer’s, you’re going to come in and you’re going to have a conversation with us, really trying to avoid that circumstance because it going to be present on your mind. It’s something that you lived through.
But if you didn’t have that in your family then it’s really our responsibility as we go through Make It Last plan for you where we are looking at income, investments, and taxes. When we get to that at last section about estate and legacy planning that we bring up as a consideration.
What we’re going to do is we’re going to put a pin on it. If you’re in your early 50s saying, “Listen, this is something you want to consider. Here are your options that are available now.” If you don’t do it, then as we continue in our relationship, we going to kind of remind you of that, so it becomes a to‑do that you may take on little bit later.
Having lived the majority of my career as an estate and elder law attorney, that was the first part of what we did, then we added financial services. What ending up happening is that’s the thing I turn back to, that’s a little battle scar to help so many families through that.
When you’re in that situation, it’s like you never forget about the impact that long‑term care crisis can land on you someone’s head and on a family’s head, and so I never fail to bring that up in conversation with our clients.
Mark: Let me give this scenario.
Victor: Go ahead.
Mark: Let me give you this scenario then. Three‑minute left in our segment before we get to our final segment. We’re going to play a little trivia game. This one is, give me two scenarios and I’ll give you the two scenarios, you tell me how it differs.
First is you’re dealing with a married couple, and then second, you’re dealing with a single. It could be a single man, it could be a widow, a widower, it could be divorced, but single. You got one.
Victor: The married couple, the big focus on there is maintaining quality life of the non‑sick spouse. While we couldn’t place something that will help the sick spouse manage their own care, really what we’re thinking about when we do planning there is that how do we make sure that the terrible thing that visited your spouse doesn’t have a secondary effect of limiting your quality of life?
Limiting the money that you have available, somehow really just impoverishing you by having done nothing else wrong but being married to this poor sucker that something happened to. We think about the married couple as a planning for both of them. Where the focus on that healthy spouse and making sure that they’re going to be OK.
The single individual has an important plan to do as well. For them, there are two elements that they can’t necessarily get like in a situation where they are married.
The first is a built‑in support system to make sure that there’s somebody there to help them manage that care crisis. They might have a child. Does that child live nearby? Who’s the backup for it? They don’t have that built‑in caregiver like they do when they’re married. We want to think about putting in the normal support.
The second thing that we’re doing from a financial planning perspective or an asset protection planning perspective is we’re building in flexibility in their options. They just don’t pay out of pocket, watching doors close along the way.
A single individual wants to make sure that they’re maintaining their dignity. That they’re getting care in their home. That they’re getting care in a facility. That they chart their own course of care. It’s not dictated by what’s in their wallet at that time. That’s our focus for a single individual.
Mark: You think about it. You could have a major illness. We all know people that have gotten sick, certainly. A car accident something that happens suddenly and those kind of things if you don’t have a plan in place, you don’t have coverage setup. It can cause you to have a lot of angst about moving forward.
How in the world do we go forward after that happened? It could sink our ship financially and cause us so many difficult scenarios. Could be ahead. The idea is about being proactive. Are you a fan of proactive planning, or do you want reactive planning?
Victor: I definitely believe in proactive planning. Look we’re here for people that have to react to what’s going on. They didn’t get the opportunity to do proactive planning. It’s always the better option. You always get better options. More flexibility. More control on what you can do.
If you take the bull by the horns and you’re on top of it than if you wait for something to happen. We can still help you there, but it’s just not going to be as great of an outcome as if we can control it from the beginning.
Mark: Absolutely. We all understand that none of us are promised tomorrow. The idea is, let’s get a plan in place. Victor and the team at Medina Law Group & Palante Wealth will sit down with you for no cost to talk about all of this. I would think that it would ease a little bit of stress that you may have, as well when you know, “OK, I’ve got a plan.”
Victor can’t guarantee you perfect health for the rest of your life. That’s not how this works. It’s about having a plan just in case. What if, right?
856‑506‑8300, again, is the number. 856‑506‑8300. No cost for this. I still think it’s one of the more important phone calls you can make. 856‑506‑8300. Back with our final segment of Make It Last with Victor Medina right after this.
Mark: Do you actually read your financial statements, or do they get tossed in a drawer and forgotten about? Unfortunately, you could be making an expensive mistake by not taking the time to look at them. If you’re paying high fees in your retirement portfolio, it could be costing you tens of thousands of dollars or more over your lifetime.
Imagine how different your retirement could be with an extra $100,000. Palante Wealth Advisors can help you uncover any hidden fees in your retirement accounts. Call today to schedule a time to talk about your situation, 856‑506‑8300. That’s 856‑506‑8300. When you’re close to retirement, every dollar matters.
Would you like to know where your money’s going? Find out what kind of fees you’re really paying Palante Wealth Advisors can help. 856‑506‑8300. Firm provides insurance services, investment advisory services offered through Palante Wealth Advisors, LLC, a New Jersey and Pennsylvania registered investment advisor.
Mark: Glad you’re here with us for Make It Last with Victor Medina of Medina Law Group & Palante Wealth. Victor is a practicing estate planning and certified elder law attorney. He’s also a certified financial planner professional, a registered investment advisor.
Victor started the Medina Law Group back in 2006. Then the clients were like, “Well, Victor, how come you can’t help us with our retirement planning? I mean that would make sense.” He goes, “Well, I guess I could.” He had to go back. Do a little more study. A little more education. Now, he can help you with all that.
That company, Palante Wealth, started in 2014. They really tie together very nicely because Medina is a lawyer and he’s very smart ‑‑ he’s smarter than me, he might be smarter than you ‑‑ here’s the question. We’re going to put him on the spot. We’re going to play a little trivia game.
We’ve just been talking health care. We’re going to play a little trivia for health care. You think you’re ready for this? Do you think you’ll get more of these?
Victor: Or what?
Victor: Oh, goodness.
Mark: Or the buzzer.
Victor: It’s terrible. Let me tell you something, you’ve set me up, Mark, so that I’m going to get ridiculed at the conclusion of the show. People are going to listen and they’re going to be like, “I can’t believe you botched the one about X.” Thank you for setting me up. Thank you for putting me in this position. We’ll see exactly how well I do.
Mark: Yes, we are. We’re going to test Victor Medina’s knowledge of healthcare because that’s part of estate planning, I suppose. It’s certainly going to be a part of a retirement plan because healthcare is a big part of that. Here you go, some of these, I think, you’ll have no problem with. Others might be a challenge. Are you ready?
Victor: Yep. Let’s go.
Mark: All right, here you go. I think you’re going to be good on this one because we talk about this a lot. How much is the average 65‑year‑old couple estimated to spend on healthcare in retirement? Average 65‑year‑old couple for the remaining 20, 30 plus years of their life so we’re not talking that year. We’re talking for the rest of their life.
How much will they spend on healthcare? $150,000, $225,000, $300,000 or $500,000?
Victor: It’s not the ones on the end. I know for sure. 150’s too low, 500’s too high. For a couple, I’m going with the higher of the two. Would you say 300? I would go with $300,000.
Mark: One for one.
Mark: Fidelity has been doing this Retiree Healthcare Cost Estimate for quite some time. Back in 2014, the average 65‑year‑old couple needed about $220,000 for healthcare moving forward. Now that number’s up to $300,000. The medical cost, the healthcare world, everything just keeps going up and up and up and price.
When you break that down, if you’re retired for 30 years, I mean that’s 10 grand a year. We could all go, “Well, yeah, that makes sense.” You do have to have a plan for all of that. That’s a study by Fidelity and those numbers keep going up it seems every single year. All right, Victor Medina, one for one in our healthcare trivia question.
Victor: We can’t quit. We’ve got a whole segment to fill.
Mark: We got to fill the whole thing so we got to get people on.
Mark: All right. Now this one and I don’t know much about health savings account. I’m sure you’re well‑adjusted to all of this, but I’m not. Here’s a question, I look forward to your answer. How much are you allowed to save in a Health Savings Account, HSA each year? Is it $1,500 per year, $3,600 per year, $7,200 per year or there is no cap? You can save as much as you want to in a Health Savings Account.
Victor: You didn’t know this, but I just got quoted in an article, on Health Savings Accounts in novel ways to use it. I’m actually going to give you a little bit more once I give you the answer. I know this because I was actually used as a source for an article on it.
The actual answer is you didn’t define you very well. The answer is either $3,600 or $7,200 if you’re married. Both of those are acceptable answers.
Victor: Give me a ding, Mark. Thank you very much.
Mark: You nailed that one.
Victor: Thank you very much. Here’s the thing about it, because it’s interesting. I wish it was no cap because these Health Savings Accounts are actually really powerful, savings tools.
Let me give you the one suggestion that I was quoted, when I was quoted in the article by the reporter, as a novel way of using Health Savings Accounts is that these savings accounts are essentially for you to set aside money that were put in place with high deductible health insurance plan.
The idea is that you could put of money into there, it becomes tax‑deferred. You don’t get taxed on that money when you end up filing your taxes in that year, but you can use that money to pay for related health costs. Most people think about using that money in the same year or relatively soon after making the contributions.
There’s no law that requires and in fact, you can accumulate money in a Health Savings Account and have that money grow tax‑deferred, and then use it to pay, applicable health expenses anytime in the future. As long as the money was put in before the health expense occurred. As long as the money’s there, the health expense can come at any time after that.
Look at this, we could contribute $3,600, $7,200 for a number of years and then leave it there, let it grow, it’s grown now. It’s all‑grown tax‑deferred. We’ve invested, it’s working out great. But then when you’re retired, you use those bank of dollars to pay for things like Medicare supplement or any other health‑related costs in retirement.
You’ve saved it now, let it grow, and you used it sometime in the future. It’s actually allowable to do that, which is really cool way to use Health Savings Accounts. If you have them in your employer’s plan.
Mark: I like that. If you’d like to learn more about it, give Victor and the team of the call. It’s 856‑506‑8300. All right. The trivia continues. Number three, the cost of prescription drugs will likely make up blank percent of your total healthcare cost? 17 percent, 22 percent, 27 percent or 36 percent?
Victor: This one’s tough. I’m going to go with 22 percent.
Mark: Sorry, that was a good guess, I think, because remember our $300,000, we talked about Fidelity estimating the average 65‑year‑old couple will spend out‑of‑pocket expenses through the rest of their life for healthcare.
Its 17 percent would go to prescription drugs, 39 percent would go towards medicare premiums and 44 percent of that would go to other medical expenses, including copays, co‑insurance, and deductibles. 22 percent was not a bad guess at all. 17 percent though is the average for folks today.
Victor: Good to know, OK.
Mark: All right. Now here’s another one. This certainly depends on where you are in the country. Because we know that nursing facilities cost more in certain parts of the country and they cost less in other parts of the country.
Here’s your question. What is the national average median cost for a private room and a nursing facility per month? $1,785, sadly, that’s the low number in this question. The next number $5,674, $8,821, or $10,031 so average median cost private room nursing facility per month.
Victor: I’m going get this one. I’m going tell you why because as an elder law attorney, we deal with it all the time. I’ll tell you the Northeast, it’s a $10,000 number, but that won’t be ‑‑ don’t do anything yet ‑‑ the answer because we’re higher in the Northeast.
By the way, I have a trivia for you and you didn’t get prepared for this, but the Northeast is the second most expensive area, the New York, New Jersey area for healthcare costs. Do you know what the number one area is?
Mark: I’m going to go California.
Victor: That’s what I would’ve gone to, but that also you can give yourself the ding for that.
Victor: It’s actually Alaska. Thank you. Thank you very much. I just appreciate sharing the love on that. It’s actually Alaska.
Victor: Alaska has the highest one. The cost to get somebody to work there as well as everything else in the transport is so remote that it actually has the highest average healthcare cost. I thought it was crazy. I thought for sure it was New York and California’s being the most expensive.
Mark: Anyway, give me the answer.
Victor: Back to this one. It’s not going be $1,700. I’m going to rationalize my way to say that probably it’s going to be the $8,000‑ish number. I even forgot the figure, but I’m going to guess it’s the $8,000 number.
Mark: $8,821. A national monthly median cost for a home health aid is $4,576. These are just averages. That’s pretty surprising to me. That’s $8,821 per month, obviously as Victor said, a little higher in the Northeast and then even higher yet if you’re in Alaska. All right, someone turning 65 today, Victor has a blank percent chance of needing long‑term care? 25 percent, 37 percent, 55 percent, 70 percent?
Victor: I’m also going to get this one mark because I do seminars and I talk about this number. Unfortunately, it is a 70 percent chance of needing long‑term care.
Mark: Now do you think that is a little bit because if you go to hospice for one day, they count that, right?
Victor: Yeah. They don’t talk about the length of time, Mark. They don’t talk about the average length of stay, anything that’s going to qualify in there. More importantly, even lower‑level things like needing a home healthcare aide. Who doesn’t need that if they’re 95 years old to make sure that they can wash themselves, they can get dressed in the morning, and their food is prepped?
It isn’t like 70 percent of the people are paying $10,000 a month. That’s not the way the numbers work out. I do know that it is the higher number. By the way, one of the things that’s probably often unsung about what’s driving this cost of care need at such a high level is that this generation has had their kids move further away from them.
So much of the past story of people staying in the same community, parents being down the street from their kids or in the same town and nobody really going anywhere but now, with this generation going on where it is, I call this generation like it’s the earliest one, but I’m talking the baby boomers having redistributed and not being around their parents.
The same thing for the generation below that, the Gen X. It’s got to the point where the parents and people that are older are without as much in resources, so they’re going to need to bring outside help.
It’s sad to think about it this way, but if you look at the franchise magazines, the number one franchises to start right now, the ones that are always on the covers are home healthcare agencies. That’s why there are so many of them and there’s so many of their advertising is because there’s such a demand for people getting that.
That would qualify for needing long‑term care, which is why that number is so high. It’s 70 percent.
Mark: Interesting. Because you’ve done such a nice job, I’m going to give you an extra credit question. We’ve got about a minute.
Victor: Oh, boy. This is where I’m going to pooch this one. Here we go.
Mark: This question is, what is the zoom boom? A, it’s the continued uptake in remote online work, forcing more baby boomers to retire early. B, an increased number of baby boomers using Zoom for telemedicine, C, more people, including baby boomers, having health issues because of more virtual work and more sedentary lifestyles.
Or is it D, more people, including baby boomers, having plastic surgery because they don’t like how they look on Zoom meetings.
Victor: I’m going with the second one, more baby boomers using Zoom for telehealth appointments.
Mark: I think that is a very reasonable answer but…
Mark: Sorry. How about this? The zoom boom refers to a surge of people getting plastic surgery in 2020 and 2021 because people did not like how they looked on screen during Zoom sessions and virtual meetings.
Victor: That’s awful.
Victor: I’ve got to introduce them to my kids who know how to use TikTok and Snapchat with filters that can smooth them out. I think it would switch everything from Zoom to TikTok or Snapchat. They would be able to get the filters that they need, that would smooth everything out and we could avoid needless plastic surgery. That’s terrible. I can’t believe that was the right answer.
Mark: [laughs] The actual zoom boom, cosmetic surgery. Now, here’s the deal because we’re baby boomers…like me, holy cow, I’m 62. It’s amazing, social security eligible. Not starting it yet because I’m still working.
There’s so many moving parts in all of this that you really need to sit down with somebody like the team of Medina Law Group to help you with your elder law and your legacy planning and estate planning and all of that. Sit down with a team like Palante Wealth to create your retirement plan, create the income.
Where’s it going to come from? What are your sources? Do you have guaranteed income? What if income, certainly, from the investments you have in the Wall Street world. That’s what if, but the guaranteed will be social security, pension if you’re lucky enough and there’s other ways to create your own pension.
That’s super important. Investments. How you’re going to do it? You’re taking too much risk. Not enough risk. The right amount of risk. The taxes, the estate planning. All of that to make the last plan and it’s all about you when you come in and chat with the team at Medina Law Group & Palante Wealth.
Again, the number, 8565‑0680‑300. There’s no cost for this. There’s no obligation. 856‑506‑80‑300. Victor enjoyed it, covered a lot of ground today. I appreciate your time. Enjoy the rest of the week and have a great week. We’ll do it again next year.
Victor: Thank you. See you, Mark. See you later.
Woman: Taxes are just a fact of life. You can’t avoid it even in retirement, but what if I told you there are ways to minimize what you pay in taxes.
Victor Medina and his team can help. To learn more visit, 920taxes.com to get your free copy of Victor Medina’s tax guide. 920taxes.com that’s the numbers 920taxes.com.
Mark: Palante Wealth Advisors are an independent financial services firm that utilizes a variety of investment and insurance products. Medina Law Group is an independent estate planning and elder law firm.
Investment advisory services, offered through Palante Wealth Advisors, LLC in New Jersey and Pennsylvania, registered investment advisor. Registration does not imply a certain level of skill or training.
Investing involves risk, including the potential loss of principal. Any references to protection safety or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims‑paying abilities of the issuing carrier.
This radio show is intended for informational purposes only. It is not intended to be used as a sole basis for financial decisions nor should it be construed as a advice designed to meet the particular need of an individual situation.
Medina Law Group and Palante Wealth Advisors are not permitted to offer and no statement made during the show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the US government or any governmental agency.
The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Medina Law Group and Palante Wealth Advisors.
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