This week on Make It Last Victor will be discussing what the client experience is like and the role of our Director of Business & Client Strategy.
He’ll also be talking about Social Security and how most Americans don’t understand it.
Victor will also discuss why it’s important to prepare for the worst, and how our clients benefited from a Make It Last Plan during the pandemic.
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.
Full Transcription Below
Mark Elliot: Welcome to “Make It Last” with Victor Medina. I’m Mark Elliott. Victor’s got two companies. We’re going to talk about both of those companies today on the program, Medina Law Group and Palante Wealth.
Victor focuses on traditional estate planning, Medina Law Group. He works with Palante Wealth, asset protection, retirement distribution, proactive income tax planning. Now, Victor has been featured on national television, “The Wall Street Journal,” “The Huffington Post,” “US News,” and “World Report.”
We’re going to go into depth today. What is the client experience like? If you want to have your estate plan? You don’t have an estate, but you feel like your estate needs a plan. Really, it’s not just for the wealthy. We’ll talk about that today as well.
You want to go into sit down with Victor and the team at the Medina Law Group. What’s that like? What’s that experience like? Maybe you want to find out, “Hey, can I retire? Do I have enough? Will my money last? Will my loved ones be OK if something happens to me?”
Maybe that’s a Palante Wealth side the holistic planning for your retirement side. What happens if you go in and sit down with them? What’s it like? What is the experience like? Now, Victor right out of the gate, I’m going to guess this isn’t like going to the dentist and having a root canal.
Victor Medina: No, not at all.
Victor: The thing about it is that most people don’t think about contacting their lawyer, contacting their financial advisors side of like the thing that they want to do for fun and enjoyment. In understanding that we’re focused on the client experience of shifting that around, thinking about scripting that client experience so that people feel welcomed.
They’re put at ease from the moment they contact us to the moment they walk into the office, the moment that their plan is completed. Then every moment of that is seen their eyes to make sure that they’re feeling comfortable, welcomed, understood, and cared for all along the way.
The biggest source of pride that we get when clients reflect back on what their experience is just how they were treated like family all the way through. They would think, “Hey, this is what I would hope that my child would have done for me if they were an estate planner or a financial advisor for what they were doing.”
The very beginning part of that reaching out to us and making sure that you know about us and schedule appointment, those types of things. The first source of contact is somebody who spends their time talking to people just like you, our clients, all the time, hears their stories, understands what their needs are.
We’ve had a director of business and client strategy and her role is to make sure that she’s talking to clients and understand what their needs are making sure it’s an appropriate fit for the planning that we do.
She spends as much time as is necessary to make sure that we’ve got the right people in front of us, in front of the right planners on our side. We want to make sure that we’ve got that great marriage along the way.
Your point about not visiting the dentist, we want to demystify everything around there. The moment that you make an appointment, and whether you going to visit with us virtually because we can definitely accommodate people that want to do that or you want to come into the office. We’ll talk a little bit about what that experience is like too.
The moment that you do that, we’re going to send you a lot of information and opportunities to learn more about us. We’re going to send you a video series introducing you to the firm and to our planning, and to the people that are on the team. We’re going to send you some copies of our books if you’d like them so you can read through that.
We even have a nutshell guide, so say you don’t want to sit through 100‑page book. You just want to get a flavor for what we are doing. You got a nutshell guide that’s about 35 pages or so that just explains our biggest philosophies in and around planning.
What are those principles that we think are most important? Every one of our clients gets that as part of a welcome package before they even sit down for their first appointment. The only thing that we’re going to do is we’re going to let you know what the process is going to be like, even before you settle in.
There’s no mystery about what to expect. There’s no pressure. There’s no sales process. There’s no meeting where you’re going to be asked for any form of commitment afterwards.
We really want to spend the time when we finally get together talking with you, getting an understanding about who you are, how you arrived here, what your goals are, what’s your biggest concerns, how we can help address them, and start to put together the framework of how to put a plan in place.
We’re going to talk a little bit about what that first meeting is like, but walking up to that or ramping up to that is this process to get you to be welcomed in by our firm. Again, those videos that we send out are great opportunities to see some of the personalities that are involved. Make sure this is a great fit for you.
Here’s the thing. We’re not the best fit for everybody that’s out there because sometimes we hug a little too much virtually. Sometimes we welcome people too much, and that’s not what they want. They want people that are hands‑off. They want people that are cold and transactional.
For people that that’s their mindset, we’re not a great fit, but if you’re somebody that wants to be embraced and enveloped in an environment of culture, client family that is caring, and welcoming, and it’s holistic and thinks through every day. If that’s what you’re looking for, you’re going to get a sense of that right from the first step.
Victor: With all that being said, I’m going to give you the number. You might want to write it down. You might want to call right now and make an appointment.
You might want to just write this number down and go, “All right, I’m going to hear what Victor has to say about his company. I don’t have an estate plan yet. I think I need one, but I don’t have it. I want to maybe a Medina Law group, who I should talk to.” Or “I’d love to retire in the next five years. Not sure I have enough, and if my money will last as long as I do.”
The number with no cost, no‑obligation, no pressure. No judgment, either. 856‑506‑8300. Victor, you think about it. A few years ago, I had a car loan and I decided to get a different car. I went back to the bank where I had my loan, and I didn’t like the odds. I didn’t like percentages.
I said, “Well, I don’t think that’s very good.” I went to one of their rivals, and I got a better deal. They say, “Why don’t you move all of your $10, $20 you have [laughs] over to us?” They’re like, “It’s painless. It’s really easy.”
That was not easy, because now that I have so many things that most of us do today, where we just pay online, have an app, or whatever. Our banking’s done through the phone, and all that. It was not as easy as they said it was.
I think people, when they change, sometimes they just do nothing, because they don’t want changing doctors. Your kids are 17, 14, and 8. Dylan probably goes to a different doctor than Aiden. We change doctors as we age.
We probably should be changing financial advisors as we age, because our needs change. How do you maybe get people to get past the overanalyzing area ‑‑ the analysis paralysis stage?
Victor: There’s a couple of strategies that I think are important because I feel an overriding sense of an obligation to help a client, and make sure that a plan that they want to put forward is actually implemented.
How that relates to making a change is in the following. Let’s say you came to us. You say, “Listen, we want to talk about putting an estate plan together. We need to update a trust and put some documents in place.” When you move forward with this and say this is something I want to do.
We’re going to set up all of the appointments so that you’ll know exactly from the moment you say, “This is something I want to do.” When is it you’re going to have your design meeting? When are you going to be able to choose the people that are going to be involved in your plan? When are you going to sign the documents? When is it going to be completed?
We’ll help you know all of those dates from the beginning. That setting out that schedule, where we understand how we get from step one to step two? What are the dates for that, what are the things that we’re going to accomplish in each one of those meetings? Helps us get a sense of momentum propelling us forward.
I know that people left to their own devices would do nothing. There’ no real pressure to it. You can abandon it at any point and time.
The idea is that we don’t want to have a failure from a plan that a client wants to implement simply because we don’t know what the next step is. Even when we sign an estate plan, for example, because all of our planning is revocable.
What we do is say, “Look, we’re going to give you unlimited changes for the first six months. You’re going to be able to go in and make any swaps, whatever you want.” “That way, if you don’t like something that’s in there, you don’t feel like you’re so committed to it that it’s going to be the worst decision.”
I say, “Sleep on it.” Comes out of there, and you’re up at the middle of the night. Maybe it wasn’t a great choice for you. You can shift it. If it doesn’t bother you after a couple of months, probably was an OK decision.
In the financial side, you mentioned something going in there where people are making a shift. It’s often that the person that they’re coming away from never did anything wrong. I don’t like taking the position that the financial advisor that you’re moving from is some horrible person and that has somehow done something wrong.
OK, wrong, Mark. Sometimes there are some horrible [laughs] people that do some wrong things. I feel I have to point it out when it happens. The majority of the time, they were decent on what they did. They did some great accumulation. They got them in that great position, and we should say thank you.
The shift that we’re making, because we need a different strategist for a different phase in our lives. We’ve decided to focus our planning efforts, expertise, skills, strategies on helping people in retirement. Post‑retirement, pre‑retirement, getting to that different phase where they have to now take this nest egg that they’ve accumulated, and make that thing last.
Have them generate a paycheck for themselves in retirement. Make sure that they’re leaving a legacy behind. Make sure that they plan for long‑term care. All of those elements, we are shifting the goals and the needs. For that reason, often we have to shift the strategist.
My experience is that when we couch it in those terms when we understand what we’re doing, we’re just making a shift to a different need and somebody who can fulfill that need. Then we don’t actually encounter a lot of friction making that happen.
Yes, there’s some work that needs to get done, but we always link it back to the “Were you better served with the strategies you came from, or the one that we’re going to now. Are your needs any different?” If we’re still at the same point and time, then we should still be moving forward on the plan that we put together.
It is difficult to make a change. Change is difficult for people, generally. They get very comfortable where they’re at. The best thing that we do is to show them that their experience is going to be fantastic off of it. They’re going to feel as stable as they were when they didn’t move anywhere, and they were caught up by inertia.
They’re going to feel that same level of stability moving over here, because we’ve done this so many times before, and it’s all that we do, in terms of helping people in retirement.
Mark: If we go back to 2006, that’s when Victor started the Medina Law Group. Victor’s a practicing estate planning and elder law attorney. Then those clients who’re saying, “Why can’t you help us with the rest of our retirement planning?” Victor analyzed, and goes, “Well, I don’t know why I can’t. I bet I can.”
He then started Palante Wealth, which is about holistic planning for your retirement. Victor is now a certified financial planner professional, a registered investment advisor. That company started in 2014.
Here’s the question, when I walk in the front door, to the left is Medina Law Group, to the right, is Palante Wealth, or I walk into the building I’m at Medina Law Group and I have to go across town to Palante Wealth. Where are we?
Victor: It’s actually neither of those. More like the first one in terms of it’s better. One of the things that I love is the building that we’re in is actually a building that I bought which is an old home. It was built in 1781. It was the home of the first Mayor of Pennington, which is where we’re located. It’s a great old house.
The reason why I love that is that I love the sense that people are coming into our home and we’re helping them in that way. It’s not a big corporate park, it’s not this kind of antiseptic feeling. The moment that you walked in, you are walking into essentially what would be our living room.
You going to walk in and you walk in through…We have an entrance in the rear so we are coming from the back. When you do that, all of those companies, both of those companies will fall in the same building. They are on the same place, they co‑exist everywhere.
The person that helps with our events and our marketing is the event and marketing coordinator for both of our companies which is the same for all our clients. We really think of them as one large client family.
It could be that some people only want us to do legal work and it could be some people only want us to help us in the financial world. I will tell you that the biggest percentage of people see the value in having us help them in both. Then, it becomes very comforting to know that the people that they talk to all know them throughout their continuum.
In other words, you talk to the paralegal, they know that you’re a financial client and what’s going on in that world. It’s one part of one overall plan that’s working synergistically. It’s working with its part together.
They don’t have to explain. Whoever they call, talk to, whoever they call knows everything about them as one client family. In fact, it’s even on the sign when you walk in. We are a total retirement planning firm. You are going to see the logos of both companies on the sign when you pull into the driveway.
Both places are here under one roof. We handle everything in‑house, with that same high level, high touch for what we’re doing. Whether you be a client one, both, it doesn’t really matter. We think about you as part of our client family.
Mark: We’re going to come back. We’re going to talk about what do you expect when you come in to sit down with the teams that Victor have created to help you on your journey in retirement. Whether it’s an estate plan, it’s a holistic retirement plan, what should you expect when you come in and sit down with the team?
You walk into that old home, what’s it going to be like? We’re going to talk about that. Victor is going to talk about the companies, the key people. The people that make it feel like a family. Something you’re very comfortable coming in to chat with Medina Law Group and Palante Wealth.
Here’s the number, 856‑506‑8300. If you’d like to maybe start this process because it’s not a one meeting your client now. There’s a lot of moving parts. We’re going to get into that.
Mark: How does this whole process work as well? Because, “Hey Victor, when can I retire? Do I have enough? Will my money to last as long as I do? Will my loved ones be OK if something happens to me?” We get a lot of questions.
We really just want to know if we pull the plug on working and we head off into retirement, and we got a purpose, “What’s going to get us up out of bed every day? What do we need to do? Are we going to be OK?” That’s what we will want to know, 856‑506‑8300. Stay with us. This is Make It Last with Victor Medina.
Mark: Welcome back to Make It Last with Victor Medina of Medina Law Group and Palante Wealth. If you’d like to find out more about Medina Law Group, go to the website, medinalawgroup.com, M‑E‑D‑I‑N‑A, medinalawgroup.com, palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com.
There’s a lot of moving parts here, but the teams are here to serve you. They serve the Pennington, Greater Mercer County areas as well as Bucks County, clients in New Jersey and Pennsylvania. If you’d like to find out more, you can go to medinalawgroup.com, palantewealth.com. You have questions? 856‑506‑8300.
I’m Mark Elliot. Glad you are with us today. We’re going to spend some time talking about a topic that there’s a lot of moving parts in the decision‑making of using this tool for retirement. There’s a lot of numbers out there that maybe we’re not as efficient as making these decisions as we should be. It’s back to the old saying of, “You know what? You don’t know what you don’t know.”
I bring this up because it is amazing. This is a study and it was a Social Security quiz from Mass Mutual for those that were 55 to 65. They said a third of pre‑retirees failed the basic Social Security quiz. 20 percent got a D on the quiz. Many more than half of Americans don’t understand the basics of Social Security in a rule.
Here’s a challenge, Victor, I think, is that the rules change a little bit. Remember, 1935, FDR put Social Security in play. You had to be 65 to get it, but the average age back then was 62. They didn’t think you were to get there, but if you got there, “Hey, we’ll try to help you out for a few years because you’re not going to last that much longer.”
Now, it’s so much different. There is so much pressure on Social Security because there’s more and more people today hitting the age of 100 than ever before. There’s centenarians out there. Instead of your average age of 62, now it’s 80, 85, 90. Not unusual, not unheard of, but with all that being said, is Social Security still a cornerstone of our retirement plan?
Victor: It has to be. By the way, we should stop making people live so long, maybe [laughs] that’s the right decision. We are getting better and better, and keeping people around for a longer period of time. Their quality of life, of course, is increasing with that too. There are 80‑year‑olds who probably doing as much as the 60‑year‑olds were doing.
Probably even more which is fantastic. It’s absolutely a cornerstone, Mark, because one of the things that the study often doesn’t discuss that we as planners understand is that the world around where you’re going to get your retirement income has shifted as well. Over that period of time, most companies did away with pensions.
They did away with a guaranteed income source when you retire and so that places more emphasis and there’s more weight on getting a guaranteed income source like Social Security because it’s one of the few that is left out there. People managing that and making smart decisions about it is crucial that they do that.
When you get into retirement, you want to make sure that you’ve maximized the benefit that you’ve been paying into for 30, 35 years as a benefit that comes out of it. It’s crucially important.
Mark: Here’s a challenge is that there is no Victor Medina, there is no Mike Elliot Social Security bucket. Our Social Security that we’ve been paying in goes to our family, our relatives, our friends, and people across the country. You don’t have a Social Security bucket. That’s a little bit of a challenge there.
What do you think is the biggest misconception, if any, that people have about social security?
Victor: I think that one of the biggest misconceptions that people have is that there’s no good planning to do around it. What you’ll just do is you take it whenever it’s offered to you.
I can’t tell you how many times clients have come in, essentially having already made a Social Security election to take it at age 62, at their earliest opportunity because they thought to themselves, “Well, I’m going to try to get as much money from the government as I possibly can.”
We forget about the other half of the deal, which is the longer we delay, the bigger that number goes. In fact, you can delay until age 70. Every year you delay, your benefit increases by eight percent. That’s a very respectable return on investment. There’s no other guaranteed investment that will increase by eight percent and will last for the rest of your life.
Most people have this misconception that the best thing to do is just take it as early as possible and that there’s no good planning to do. What compounds that misconception and mistake is when we have a married couple when there’s more sophisticated planning you can do because being married to somebody for 10 years gives you the right to take a portion of their social security.
You can take up to half of that value which might be bigger than your number for a period of time, while you let your number increase. There’s a lot of these moving parts were getting a good set of eyes on it ‑‑ somebody who’s experienced in helping you plan around Social Security the way that we are ‑‑ might get you a better benefit going forward and maximize what you can do with the planning.
There’s always an opportunity to get a better result as long as you haven’t already declared Social Security. Now, there are some really fine wrinkles that if you just started declaring Social Security you can change your mind about that, pay back the benefits and then get the benefit of waiting and doing some other planning but it’s a rare thing.
It’s a very limited period of time so if you’ve been collecting for more than a year it’s going to be impossible for you to do that. If you just recently made the election, you’re like, “Did I do the right thing? Was that the right thing for me to do?” It just happened within the last year, we can certainly look at that before you make any decisions and help you understand whether or not that was the best thing for you.
The biggest misconception, that there’s nothing to do to curate that. Talk to somebody that can help you do that like us.
Mark: Let me follow that up with this because certainly Palante Wealth in the planning process you have an income plan, investment strategies, tax planning, being tax efficient moving forward, the estate planning as well with Medina Law Group. You have a lot of moving parts in retirement. Social Security is certainly going to fall into the income planning part.
If somebody calls you and says, “Hey, I would like some guidance on when and how to start Social Security?” A lot of us, as you said, we look at it as in a vacuum. “Hey, I am going to get it as soon as I get it at 62. I know I’m going to get less, but I’m going to get it now while I can.
I know if I wait until 70, I get more. When I just look at the math part of Social Security waiting makes sense, math‑wise.” But you’re not just looking at Social Security when you have somebody comes in. You’re looking at the rest of the portfolio where and how does it make sense, I’m thinking?
Victor: That’s right. It isn’t in a vacuum in any case. It’s not in a vacuum when you look at it so you should take it immediately and it’s not in a vacuum that you should absolutely wait to the end because you can get eight percent. You really have to see it in the totality of everything else that’s involved because you have to create a paycheck in retirement to live off of.
No matter what election you make, when you take Social Security earlier or take Social Security at the very end. You still have bills that you have to pay. You have to create this paycheck and there’s this other tax component of it, that factor into it. Where you get your other money from affects how much your Social Security is taxed. If you’re working at the same time.
As you were hinting at putting all of these things into one analysis, to look at each of the areas of income and investments. Investments as they relate to income. Taxes as they relates to investments and income and estate planning is one of the three. Once you starts to bundle all that stuff together, it gets you some ideas about the best way to do that.
Of course, the client is in charge the entire time. We’re coming up with these ideas and then you as a client decide which of these things were going to be doing. If it’s an area that you don’t know about, we teach you about it. We make sure that you’re making informed decisions along the way.
Getting a set of eyes like ours, on your retirement picture will help you sometimes see options that you may not have known about before, or see the impact of making planning decisions that may cause you to have higher taxes or something like that along the way.
I’ll tell you a quick story about, one I always think is sneaky and most people overlook, which is the amount of income that is taxable ends up impacting how much of your Social Security is taken for Medicare Part B premiums. Not in this year, but based on your taxable income from almost two years ago.
When people look at doing their planning, it’s sometimes misconception or too simplistic to look at the top‑line number. I know that for my Social Security, I’m going to get $2,500 a month and I’ll always get $2,500 a month and I’ll always pay Medicare at $135, or something similar to that.
When in fact that number can change and it can change based on the fact that you didn’t do planning on where you were going to be taking your income from and other sources that cause more taxes and so you can see the spool out of it.
This Medicare tax, this Medicare Part B premium that you are contributing as part of your healthcare, if you’re taking Medicare, it’s one of these things can sneak up and erode how much purchasing power you have.
Now, we see the importance of looking at the total picture. If we can take somebody and make their tax picture look better, then as they get further into retirement, we extrapolate out what the value is of saving on the Medicare Part B premiums that they otherwise would have been paying.
The savings that they get every year that doesn’t get taken from the Social Security gets added up over the course of 20 or 30 years’ worth of retirement as a total benefit of what we’re doing. Sometimes you don’t not even focusing on that element of it.
We also have the perspective of looking at things on a 30‑year horizon for you, and understanding what you might take and what it might take for you to get all the way through that.
Those things come together in helping you put together a plan because we can see turns in the road before they get there, and we can help you understand how to jumble all this stuff together. It isn’t a straight‑line decision. It’s just take it immediately or take it at the end. It is informed by a lot of different things from lots of different places.
Mark: There’s a lot of moving parts in Social Security. What are those eligible at 60, early retirement is 62. That has been around for a long time. Women were allowed to take it at 62 in 1956. Men were allowed to take it to 62 in 1961. Then they changed the laws on taxes.
FDR put this into place and said, “This will never be taxed.” Well, that lasted almost 50 years. He made it to 1983. Then he said, “Hey, we can tax your Social Security up to 50 percent.” Then 10 years later, 1993, “Hey, we can tax your Social Security up to 85 percent.”
If you have questions about all of this, sit down with a team that understands because Social Security is a part of retirement planning, there’s no question about it. It’s part of your income strategy, when and how to take it. 856‑506‑8300 is the number again, no cost for this. This is just a chat and a conversation and doesn’t make sense for us to move forward.
856‑506‑8300 is the number to talk to the team about Social Security. It’s a confusing part of this, because, Victor, I think it’s crazy to think and get taxed on it. Those have been around for a while, and they adjust those as we go.
One of the areas gets confusing are spousal benefits. That change in 2014, where you guys could do some hocus pocus and make some things way better for people Social Security…
Victor: There was a big magic act. Absolutely, Mark, what we could do is make it look like one person was claiming, and then their spouse wasn’t going to claim for a while, then we could switch it around later. Finally, it was called a restricted application, swap it out. They did away with that as one of our planning options.
It doesn’t mean that there isn’t something that we can do to maximize what you’re getting, but we lost the ability to get as creative as we were before the law change.
Mark: Most people come in, do they understand that when a spouse passes away, that the lower of the two Social Security’s goes away? You don’t keep getting both. Are most people aware of that today, you think?
Victor: I’m seeing more and more people understand that. I think because we’ve spread that message out. We as financial advisors, we as retirement planners have let people know there is going to be an impact to what happens when one person dies. We want you to know about that as often informed how we do tax planning.
What often is not discussed in which should be discussed as like the second sentence to that is what the tax impact of that is. When you lose one portion of that Social Security, you are simultaneously shifting your filing status from married to single.
What that means is, even though you’re getting less income, you might be paying more in taxes, because the tax bucket size for single people is about half the size of the amount for married people. There’s fact is a penalty to what happens when one of the spouses die and you change the filing status.
It could be for exactly the same or similar income. You’re going to end up paying a lot more in taxes. That’s one of those second sentences that should follow the one that lets you know that you’re going to lower Social Security. You have to say and you also might be paying more in taxes because the more that your number goes up, the more that your Social Security gets taxed.
If all of a sudden you went from having two Social Security’s down to one and before it might only have been taxed at 0 or 50 percent. Now it’s taxed at 85 percent just because of the filing status change.
I see a lot more people not understanding the tax impact. I do see more people understanding that they are going to be losing one of the Social Securities. They know it might be one, they may not always know that it’s the lower of them that’d be good for us let us know it’s the bigger number, but they start to understand that they are not going to be able to keep both of those checks.
Mark: Social Security falls under the income planning part of this process that Victor and the team will walk you through. The income, investment strategies, tax‑efficient strategies, legacy, estate planning.
Social Security is in the income part. If you would like a report about income in retirement, because you probably don’t want to just go, “You know what? I’m going to get Social Security, so I think I’m good to go. I don’t have anything else, but Social Security, I’m good to go.” [laughs] Well, you’re probably not. Social Security is a big part of this.
Victor says it’s still a cornerstone of retirement planning, but it’s not the be‑all. It’s not going to be the one thing to save you. There really is no silver bullet anymore. You’ve got to put a lot of things together to create the picture that you want for your retirement.
Victor has a report on income and it’s 920income.com. 920income.com. You go there and you get the report. It’s fantastic because retirement planning starts with income. We’re going to come back. We’re going to talk more about Social Security because there’s some surprising numbers that are out about Social Security.
Already said that third of retirees or 55 to 65‑year‑olds fail their Social Security quiz. It’s amazing how many claim at the wrong time. We’re going to touch on that as well.
Again, if you have questions, you want to sit down with the team, talk more about Social Security and where you are on your road to retirement, 856‑506‑8300. No cost, no obligation, no pressure.
Mark: Welcome back to Make It Last, with Victor Medina. Victor has Medina Law Group. He has Palante Wealth. He’s the author of five books on retirement planning under his acclaimed, Make It Last series. Here’s the deal, the team is here to help you. If you have questions like, “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?”
At the end of the day, we just want to know, “If I retire, if my wife and I retire, if it just me, just I retire. Will I be OK? Will my family be OK?” That’s really the deal. Victor and the teams at Medina Law Group, and Palante Wealth are here to help you figure that out.
There’s a lot of moving parts. A lot of people go, “Boy, I don’t know. I don’t want to talk to Victor because he’s just going to tell me I have to work five more years.” Victor, that probably could happen. It also could be, “I don’t know why you didn’t come in. You could have retired five years ago.” You do get both ends of that spectrum I would think.
Victor: We do. I don’t like to have that tone of voice in either of those discussions. Say, “You need to work longer,” or “You should have seen me five years.” I’m nobody’s paired off of that. I think that we take the right attitude, Mark, in anybody that comes in and sees us.
If you’re to reach out and you come in and say, “Hey, I want to have a conversation with you.” Our job is not to look backwards. Where our job is to take a look at where we are right now and give you the best plan going forward.
Sometimes that means if you’re not willing to work, here’s the impact of what’s going on here, or because you’ve made past decisions, this is what we’re limited on what we’re doing. We’ll be very objective. We’ll be honest about what we’re doing.
We’re not going to spend a lot of time looking backwards about what you failed to do or decisions that you made that could have been made better. We’re really going to take a look at where people are right now and give them the best decision that we can on how to spend the rest of time that they have to, I guess, Make It Last.
Mark: Absolutely. 856‑506‑8300, no‑cost, no pressure, no obligation, and no judgment. We’re going forward. 856‑506‑8300. We’re talking about Social Security. We said that there was a quiz by Mass Mutual of 55 to 65‑year‑old Americans, and a third of them failed to social quiz.
Here’s astounding thing, because Social Security administration had said a few years back Victor that 70 to 80 percent of Americans took Social Security the wrong way for their situation.
Now, it’s being reported that up to ‑‑ and this is a study from United Income ‑‑ 96 percent of retirees are claiming their benefits at the wrong time. That means four percent of us are getting this right. It doesn’t mean you’re wrong at 62, or you’re wrong at 70, or you’re right at 62, and right at 70, and vice versa. Whatever you decide, you’re wrong. That’s what’s crazy.
Are you seeing this? When people come in, do you have to say, “I’m not sure this is the best time for you to do it?” Are you surprised by that number 96 percent of retirees claim Social Security at the wrong time?
Victor: I have to be honest. I am very surprised by that number. I would’ve been comfortable with a number that looked like anywhere between half to three quarters because I do see that people are making the mistakes with the fact that it’s basically everybody that is doing it.
I want to be clear, by the way, that study is not on the basis of longevity that they died too early or lived too long. It is on the total benefit that they could have gotten for the time that they were there, taking exactly where they were, they could have made a better decision. I am totally surprised by that number.
Here’s the reason why it’s so important. This benefit that we have is essentially, I don’t want to call them free dollars, because we’ve paid into the system. They are dollars that are going to be generated to us, and we don’t have to do anything else to have earned them. We’ve already paid into the system. You’ve aged out. You’ve earned your benefit.
Whatever that number is, it’s a function of your working history, how much you’ve contributed for how long. It’s a very clear line discussion on what your benefit is, and what it potentially could be based on planning.
We have that in there. It’s an earned benefit that you have. By making a mistake around this, you could be losing between tens to hundreds of thousands of dollars of money that is already been paid into the system that you’re entitled to simply because we didn’t get great counseling, or you didn’t get great counseling when you made the decision.
We’re talking about real free money that is something that is essential to you having a successful retirement. A mistake here literally can be very costly. We’re talking about real money that could potentially be gone because we didn’t really think this through or get the best advice for it.
Mark: I have a lot of friends retiring right now. Most of them had pensions at their job. I don’t have a pension, so I don’t have that luxury. Social Security is going to be a big decision for me. I can’t do it and work, it gets too confusing. Do you find that most people, when they retire go, “I might as well start Social Security with it.”
Victor: I do. Most people do elect it. I would consider to be with the label of too early. Now, of course, we don’t know everybody’s situation. Sometimes when they’ve made the election, we’re stuck with it. It’s nothing that we can ‑‑ that’s been more than a year ‑‑ do to change it.
I would say, “If I’m placing chips on red or black roulette table off of it,” most people tend to take it too early. They tend to take it at age 62 when it’s immediately available. By the way, I think that the reason for that is, that Social Security is a sense of security.
What’s going on in there is that, they know that they can count on that income. They want to start a paycheck as soon as possible.
What they’re missing in the calculation, of course, is not just what that benefit could grow to, but what the tax impact of doing that is, how you add money into the bucket. What the impact to your overall retirement picture looks like.
In other words, if you’re looking at longevity, if you want to live to 95 or later if you think you’re going to live to even longer than that, how it affects the entire picture for something like that, and what we’re doing with anything about what we’re leaving behind for legacy?
Generally speaking, people take it too early. What I mean by too early is that they can get a better benefit, take a look at everything. By the way, sometimes generating income is something that you can do with the investments that you have by reallocating some of that as a part of an overall plan. It’s not like you’re missing out on the fact of getting a guarantee for income.
You can figure out a way to get a paycheck that is a guaranteed amount on the way that you do your retirement planning. It’s just not we’re taking it from the Social Security bucket, we might be taking it from a different bucket to get there.
That’s part of what you would get in getting the entire plan made up is that you would understand this is exactly where we’re going to get which dollar from at what time and see that projection out for the entirety of your retirement.
Mark: Maybe people take that decision where they just go. “What I’m going to start, I’m going to retire at 62. I’m going to start Social Security at 62. I’m going to retire at 65.”
I’m going to start Social Security at 65 because they know the only person that they can leave Social Security as a spouse, and the lower Social Security is going away, but the higher of the two stays, can’t leave it to the kids. Why pull from my retirement accounts, which I’m planning on leaving to my…Is that a factor in that decision to do you think?
Victor: I think it’s a factor. I think you probably said a little bit more sophisticated than the clients that I meet with, are capable of saying it’s not an amount they can leave behind, they tend to see it more about the idea that they can leave the other account behind, they don’t want to touch it.
There’s a lot of people that look at their IRAs is a forbidden bucket because they understand the touch of this to cause taxes. Sometimes this right smart planning is the cause of taxes to be paid sooner. The IRS is essentially your business partner in retirement, they’re taking a portion of all of your quote‑unquote winnings.
What you get out of your IRA, they’re going to take a portion of that, but more importantly, they can change the rules about how much they take from that amount. They can change the tax rates because they change the tax rate, they’re changing how much they’re going to take from it.
Sometimes what we can do is buy out the IRS, we can say, “OK, listen, we understand that your taxes are at these rates, right now.” We’re going to take your word, we’re going to cause there to be taxed to be owed. That way we pay off the taxes, and we never owe you again, because we put into a Roth IRA, or perhaps we use some specially designed life insurance to get some income tax‑free benefits.
The idea is that we don’t have to pay taxes on this again. The reason why we might do that is because in fact, allows us to take our Social Security tax‑free in the future, potentially, because it allows our Medicare premiums to stay low. If we’re taking it from other than tax two sources going forward.
Now, we start to understand how and why getting that “guaranteed money” from social security early, may not be the smartest overall strategy because while you took from the Federal government by essentially claiming your social security early, you also gave back to the government, because you decided to pay higher taxes over a longer period of time.
In fact, if you’re planning on leaving IRAs behind to kids, they’re essentially going to have to pay those IRAs out as income tax over 10 years at their rates.
You and your retirement probably will pay lower tax rates then they do as working individuals. Again, we don’t want to miss the forest for the trees, understanding that it’s about making sure you keep overall the most amount of money.
For you just to take it early, because it’s something that’s guaranteed from the government, and you can’t leave it behind to anybody else, but then yet agree to pay the Federal government a whole much more in taxes based on the fact that you didn’t do smart planning on the IRA. We missed the boat off of that and that’s reason why we need to look at everything when we create a plan.
Mark: They aren’t just going to look at social security, but that’s a big decision. Why not get some guidance on how to make the right decision for you, when 96 percent of us take it [laughs] the wrong way because we don’t look at all the other factors.
We’re just pretty much looking at social security in a vacuum. 856‑506‑8300 is the number. There’s no cost, no‑obligation for this. Again, no judgment either, 856‑506‑8300.
We know that social security started in 1935. FDR started it. The average age was 62. You had to be 65 to get it. They didn’t think very many people would get it, and if they did, they wouldn’t be there very long.
Then, they changed it from 1943 to 1954, born during that time. Your forward retirement age was 66. Then, they changed it again in 1955. Then it went 66 and two months. 1956, 66 and four months, 66 and six months was ’57. 1958, 66, and eight months.
I’m born in 1959, so everybody who was born in 1959, this year is turning 62, but our forward retirement age is not 66. It’s 66 and 10 months. Then, those that were born in 1960 or later, which means those born in 1960, next year are going to be eligible for social security at the age of 62, but they are non‑eligible for full benefits until the age of 67.
Full retirement age, that’s got some connotation and meaning, doesn’t it?
Victor: It does. It really for, folks, it is that period of time where a couple things happen. First, they get that earned benefit that they’re seeing at the top of their statements. You log into the Social Security, you see what your benefit is going to be, that’s actually your full retirement benefit. Then, you have to wait to that age to do that.
The other thing about that, that happens is that if you happen to be still working at the time, it means that’s finally the age that if you claimed it at your full retirement age, you wouldn’t have to pay back anything or lose anything.
Based on the fact that you had earnings from somewhere else, if you kept working on your job. There’s a lot of impact to understanding that full retirement age and what it means.
You’re right Mark, what they’ve done, essentially the federal government done, is tried to go to shrink the pool of people that get money for the smaller period of time by delaying when you can start, and taking a look at how it’s going to be taxed and increasing the taxes on it.
Kind of funny. You pay taxes in to get Social Security, and then you pay some of it back because you owe taxes on it. You returning some of that money in there. By changing the variables on that, what they’re hoping to do is make sure that this benefit is something that they can continue to offer even though the pool of people that are receiving it is increasing.
The length of time that they’re receiving it is also increasing. By the way, we haven’t even introduced the topic about how they’re funding it. The whole idea that the Social Security trust fund continues to get raided with different legislation that is passed and that threatens the viability of that going forward.
There’s all of these things jumbled together that makes Social Security for retirement age, what you’re going to be receiving, how long. Such a murky area to be waiting around in.
Mark: A murky area, Social Security. There’s no question. A few years back, it was Social Security administration saying, “Hey. I think we’re only going to be able to give about 77 cents on the dollar in 1934, 1935.”
Then, the pandemic hit. Now they say, “Well, maybe it’s 1931, 1932.” We’re talking 10 years away, 2031, 2032, not ’19, I said ’19, but 2034, 2035, 77 cents on the dollar. As pandemic hits, maybe it’s 2031. We’re 10 years away from that happening.
Here’s my take on this. Then, we’re going to move on to another topic. Is that elected officials want to get elected. For my baby boomer age, we’re not going to let you mess with our Social Security. If you want to get re‑elected, don’t mess with us. That’s all I’m saying.
Mark: They might have to raise the age. 1983 was when they changed that full retirement age of those born in 1960. They were 23 when they changed that age. They might change it to a full retirement age of 70. Maybe that’s what they’ll do, start bouncing everything up.
I could see that happening, but it’s not going to be happening overnight. They’re going to take a little time with that. We’ll talk more about this, I’m sure at some point. 856‑506‑8300, if you’d like to talk to Victor.
This is a big decision. They’re saying 96 percent of us get it wrong. You can take it anywhere from 62 to 70. There’s a right time for you and your spouse if that’s the case, to make the right decision. The team is here to help. 856‑506‑8300. Headed to our final segment right after this. This is Make It Last with Victor Medina.
Mark: Glad you are with us today for Make It Last with Victor Medina of Medina Law Group and Palante Wealth. You can find out more about the estate planning, the certified elder law attorney, Victor Medina, on the website, medinalawgroup.com, M‑E‑D‑I‑N‑A, medinalawgroup.com.
You want to find out more? About retirement plan, income. How am I going to replace my paychecks are no longer coming in? What should I be doing investment‑wise? Should I be tweaking a little bit? Am I going to invest at 65 like I did at 35? Maybe, maybe not.
Everybody’s situation is different. How am I going to handle taxes? We know taxes. We at least think taxes are going up. There’s a lot of changes coming, it sounds. We know of nothing if the Biden administration does nothing.
We know that taxes are going to revert back to 2017 rates ‑‑ January 1st of 2026. There’s tax raises coming our way. How do we handle all of that? Victor and the team, they’re here to help. 856‑506‑8300.
Victor, if I asked you, how many years is an average retirement in today, in today’s world?
Victor: I think because we’ve seen all these advances in medical care and people are living longer. Even though some of them retire longer, we plan somewhere between 25 and 30 years. That’s an average length of a retirement. It’s almost of full quarter or fourth of their entire life span.
Mark: If you retired at 65, it’s not unusual at all that you’re going to hit the age of 95. Ages keep going up. Certainly, the pandemic would have an impact on that probably, but typically or used to be, I think it was…What was it? Let me give you some ages. In 1900 life expectancy was 49, in 1960 it was 69, in ’04 it was 80. Now it’s mid‑80s.
It’s not unusual to be retired for 20 or 30 or even over 30 years because the largest group that’s growing is the group that is hitting the age of 100. You’ve got to think about that when it comes to retirement.
Think about it, we’re in 2021. What is 30 years from now? That would be 2051. If you’re retiring right now, it’s not unlikely that you will be here probably in 2050. We’re going to go back in time today. We’re going to go back to 1990.
What was going on in 1990? It was the Gulf War, Nelson Mandela released from prison, NASA launching the Hubble Telescope into space or maybe you go to things like the TV show, “The Simpsons” and it’s still on today. I don’t watch The Simpsons, but I know a lot of people like it.
I do remember the movies. I’m more of a movie guy. “Ghost,” did you see Ghost, Victor?
Victor: I did, yeah.
Mark: Patrick Swayze, Demi, Ghost.
Victor: Whoopi Goldberg, yeah. I remember that one.
Mark: No, Ghost was Patrick Swayze and Demi Moore, wasn’t it? I think it was.
Victor: But Whoopi Goldberg was the ghost.
Mark: Oh yeah, you’re exactly right. Yes, you are right. That is right. I forgot about it, Whoopi. “Dances with Wolves” with Kevin Costner, “Pretty Woman” Richard Gere, Julia Roberts. “Home Alone,” the classic. Whenever you think back to 1990, it’s interesting.
What were you? In 1990, Victor, we go back 30 years. You weren’t in business yet, were you? You didn’t start Medina Law until ’06.
Victor: I wasn’t in business, I was still in college…No, no, no, I was about to graduate college two years later. Oh geez, 1990, I was 15 years old, Mark. I was about to graduate high school. Yeah, 1993 that I graduated. I was 15 years old.
Mark: You were about like Lucas’ age at that point.
Victor: Exactly. Probably a sophomore in high school.
Mark: You think back…For those of us that are 60, I’m 61, we can certainly remember 1990. The crazy thing is when you look back in time, the median home value, $79,100. What does that buy you in Bucks County today or in Mercer County?
Victor: Oh my goodness. Oh man, not a chance. I don’t think you can get your kitchen done in this town for that kind of money [laughs] these days.
Mark: The Dow ended the year in 1990 at 2,633. That’s different. You could get a CD at the bank with an interest rate of around eight percent. We would love to see that again. Here’s the deal, it would cost you around $12 to $15 for a CD.
They don’t even put CD players in cars anymore. The new cars don’t even have CDs because you can just play your phone through your car. It’s totally different. You were in high school, so certainly you remember this, don’t you Victor?
Victor: It’s probably the first time that that’s been played on this radio station since 1990, although I probably guessed.
Mark: “Ice Ice Baby,” Vanilla Ice. This was August 22nd, 1990, number one on the US Billboard Hot 100 Chart. It is fun to go back and I think it’s one of the things that radio does. It sticks in your mind. You can remember the songs from your high school days, your college days.
It’s really interesting to go back in time, but what we’re thinking about here is that we can go back 30 years, but are you ready to go forward 30 years for your retirement and see your entire life in front of your eyes?
You think about 1990, Victor, as well, there was a recession in 1990. It wasn’t long. It lasted just eight months. Then it was a little sluggish recovery from job losses. There were some challenges then. There were a few things that were cited as factors to that short‑lived recession.
There was restrictive monetary policy by the Federal Reserve to lower the rate of inflation, poor consumer confidence, real estate collapse, jumping oil prices. This kind of things, we see them come back when we have bumps in the road, anything from…
Because 1990, after that little recession, it was a great decade on Wall Street. It was a phenomenal decade on Wall Street, followed by the loss decade on Wall Street.
One of the challenges if you retire with all of your money sitting in the market and you’re just going to live on that four percent withdrawal, boy, I hope the markets are good for you than when you retire because it’s a different retirement today.
People aren’t coming in with you most anyway, probably not 90 percent of your people coming in, they don’t have pensions. It’s a different retirement time and we can’t have everything at risk, can we?
Victor: It’s totally a different retirement time. Everybody has these little windows and there’s a great difference between starting a few years in between these different recessions that have happened or these different bull markets that have happened.
Clearly, I wasn’t an advisor in 1990 and clearly, I didn’t advise people how to get through that depression or recession the way that it happened for that period of time. I will tell you that there’s a lot of information to glean from the concept that these things do happen. They happen at times when people least expect that they’re going to happen.
Coming into 1990, one of the reasons why there was a recession is there’s this restrictive monetary policy trying to hedge inflation at a time where interest rates were relatively high and you’d think, “There’s a lot of room in this for us to be able to do things and keep it going.” There’s actually some…
By most accounts of mismanagement when that occurred. Here’s where we go from there, going forward is that, we expect that these things are going to happen. We just can’t predict exactly when because we can’t predict when, the best thing that we can do is be in a position that if it happens tomorrow, that you will be OK with your retirement. We need to plan for that.
What does that mean for people that are entering retirement in terms of having all of their money in the market or having all of their money at risk? It means that there’s a tremendous risk that if it does happen tomorrow, you’re going to have one of the less good retirements than the people that have completely upmarket for the beginning portion of their retirement.
Especially over that 30 years. If you look back 30 years, we just went through two different setbacks in the market, two different sets of recessions. In fact, there’s even within that kind of, not quite 30 years, but coming into the COVID response, almost a third for that period of time.
If you don’t get in a position where you’ve taken some of these winnings off the table, protected some of this money, make it available for you, regardless of what’s going on in the market, and that the market changes, the downside of the market, don’t impact how good your retirement’s going to be.
If you don’t do that, you’re going to be at risk, that if it happens to you, if you cut that wrong calendar period, that wrong frame, you’re just not going to have as good of retirement if you caught the other one.
What do we do for clients? In creating a Make It Last plan, where we’re looking at four elements of their overall planning life, we’re looking at their income, their investments, their taxes, their estate planning. When we create a plan like that, what we put in there, what we bake into every one of them, even though all of them are a little bit different.
What we do bake into all of them is the flexibility to withstand a market correction the next day, the next period of time, because it could happen that quickly. If it doesn’t happen, that’s OK with the plants still is successful.
But if it does happen, then you’re not on the phone worrying about it, and you’re not. Up late at night, you’re not losing sleep, because your plan already contemplated the idea that there might be a recession. That’s really what’s important about putting a plan in place.
That’s why it when we did have a market correction, and of course of COVID, we didn’t have any clients calling us concerned that their plan wasn’t going to work because they knew when we put this plan together for them in the first place, that it was going to constantly from the beginning it was going to happen. Maybe a little earlier than we thought if we had just done it the year before.
They’re going to be OK. If you want to get to that point in time, where you’re not losing sleep about what’s going on or that you have a plan that can withstand these little different things that happened in this time machine in the last 30 years going 30 years forward.
If it’s going to happen to you tomorrow, if you want that plan, you’ve got to reach out to us to be able to take the next step. We want to work with people that are good people that can be fun to work with, and then to have something that probably we can solve.
We don’t know anything about you unless you give us a call. We can meet with you and learn a little bit about you. The way you do that is you contact the team at 856‑506‑8300. We’ve got openings. Have you come in, and we’ll have a conversation,
You’ll initially speak with Susan, who’s our Director of Business and Client Strategy. She’s going to talk to you a little bit about what is it we do, make sure you’re a great fit for us and move you along onto the path.
We got this great team in place that can help you put a Make It Last plan in place for you so that you don’t have to worry about where your income is coming from, or how your income investments are positioned, whether or not you’ve made too much in taxes, and how your estate plan is set up.
You get that all done under one umbrella. We love doing that for clients. I’d love having a chance to talk to you about that.
Mark: 856‑506‑8300, again there’s no cost. There is no obligation. There is no pressure for this. The team is here to help. 856‑506‑8300, be proactive, not reactive. Let’s get started today, 856‑506‑8300.
Final thing quickly here, one of the things that helped the economy recover from the ’90 recession was emerging technology like the desktop computer. November 12, 1990, the concept of the world‑wide web was formally proposed by Tim Berners‑Lee. I always thought it was Al Gore…
Mark: …so I was mistaken. A lot of things have happened since 1990. Think about your retirement. If you retired today, what all will transpire by the time we hit 2050? It’s more than likely you’re going to be around. If you’re retiring today, you’re 55 today, you’re going to be around in 2050. You’re 65.
You’re probably going to be around in 2050, a lot of moving parts.
Mark: Victor’s teams, Medina Law Group and Palante Wealth, are here to help you plan for your retirement. What if this happens? What if that happens? How do we deal with it? What if the markets go backwards? We don’t want that to happen, but they certainly do. We’ve all lived through that.
The “Make It Last” plan is all about you. Again, that number is 856‑506‑8300. 856‑506‑8300. Victor, enjoyed it as always, enjoy the rest of the weekend, have a great week. We’re going to do it again next week.
Announcer: 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 9‑2‑0‑taxes.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, a 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 ability of the issuing carrier.
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Transcription by CastingWords