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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Alright. Welcome everyone to the How to Retire On Time. My name is Michael Decker here with David Frantzen as always, my associate. We're gonna be diving the details, answering your questions one by one. As always, this show is all about the nitty gritty.
Mike:We wanna dive into the details. This all shows all about the nitty gritty. It's live. It's fun. We see your chats.
Mike:We see your your results here. We're gonna we're gonna dive in. When I say the nitty gritty, we get tired of the oversimplified advice that you read over and over online. This show is about context. When you might wanna do something versus when you might not want to do something and so on.
Mike:So join us. We got the next hour to answer your questions, and we're just gonna take it one step at a time. Remember, this is not financial advice. We don't know your situation. We can't talk to your situation unless we're having a one on one conversation.
Mike:These are just generalities with context. It's details. Mhmm. Because the details do matter. For those joining us live, can always put your questions in the chat.
Mike:We've got questions throughout the week. And for this group, I always like to take a little poll before we... We're gonna talk about Medicare and what's happening there. The number one fear for this group is inflation and running out of money. Yeah.
Mike:Well... Actually, healthcare cost is now tied. So these are those are very real fears. Yeah. And I feel bad for those that it's almost like you have this dream that once you retire, you're done and it gets easy.
Mike:Oh, yeah. No. It's the same hard, it's just a different hard. Mhmm. Because you can work and you get a paycheck.
Mike:The work is hard, but the paycheck comes in. It's dependable. And then you go to retirement, and you have to kind of figure out, okay, how am I gonna structure the paycheck? How am I gonna handle healthcare costs on my own now because work isn't paying for them? Like, just a lot of questions.
Mike:I have this idea that when you retire, you kind of become a mini CEO. You're running your household. Yeah. And you might be the CFO too and and so on. So these are things just to consider.
David:Yeah. That's a good way to look at it too because it's it's a... You step into this new life, but you still have a lot of the same things you have to worry about. Your Netflix subscription doesn't stop at retirement. Right?
David:So you still have to... Your your your light bill, your energy bills, your property taxes. I mean, those things are still happening even though you retired. So Yeah. Still gotta worry about that stuff.
Mike:That's right. Yeah. So let's talk about what's going on with health care. That's, I think, the number one thing or reason why people are are on today. So if you didn't know, didn't catch the news, here's what's going on, healthcare has gone up.
David:It seems like we've had that same... You could insert that headline into any year and it would be relevant or true, right?
Mike:Yeah, but there's like some subsidies that are gonna sunset, There are some that just laws changed. Some things just went away. Some things were added. And that's the confusing part because all things considered, you've got to kind of understand, okay, what am I getting and what am I leaving? You know, you see my little vote thing, you know, everyone.
David:Yes. Yes. Happy voting day. Good work.
Mike:This is why you need to vote. You need to understand what the politician is is going to try and do, and you could take the individual sense of what's right for me, what do I want. You could say what is right for the collective. You know, you're allowed to vote. You're allowed to have different opinions, but voting matters, and this is one of those ways that it manifests.
Mike:I don't see much influence when it comes to the stock market in voting, but I do see a lot of influence on tax planning, on healthcare planning, and all those other major expenses that happen throughout retirement. So... And David, please chime in on any of these things.
David:Okay.
Mike:The one that really bugs me is so part d.
David:Mhmm. So drugs. Yeah. Your prescriptions.
Mike:Drugs. Yeah. It's... If you do nothing, that that drug free plan where you get your drugs for free is gone.
David:Oh. Yes. It's going away. Okay.
Mike:And if you do nothing, you will automatically be enrolled into something or the same plan if you can do the same plan, or you'll just be opt into some other plan, or you'll just be not in on Part d anymore or something could happen.
David:Okay.
Mike:And your cost could go up and you're gonna get bills that might surprise you. And the bills might surprise you or you might think, oh, I thought like, you know, maybe your Medicare comes from social security. Oh, I thought I was gonna get a bigger raise than Like, yeah, we got a bump in social security. Oh, yeah. That's nice.
Mike:Yeah. But then healthcare costs went up, it's now going down. Then you got food prices that have gone up. I think I read somewhere that like the retiree is expected or needs like five to 8% of an increase to handle a lot of these costs.
David:An increase in their in their monthly Yeah. Yeah, benefit.
Mike:And this is why you can't go all in on one plan or the other. When I say all in one plan, the cliche plan is, I'm just gonna buy this one product, or this one strategy, and hope it all works out.
David:Uh-huh.
Mike:This is one of those you've gotta balance dependability, rigidity, structurally something versus the dynamic flexibility, the liquidity, the more growth potential, and they have to offset themselves. I don't know the background of the yin yang symbol, but I understand they're like opposites. Yeah. They're supposed to balance each other. It's like a symbol of balance.
David:Yeah. That's my understanding.
Mike:I mean, I like drawing them as a kid. Yeah. Right. But this is one of those moments where, yeah, you're you're probably glad that you have some extra money in the market for growth. Yeah.
Mike:To offset these these risks, and so on. I mean, David, you're our director of healthcare. Do have just high level, any thoughts or conversations or questions that have been happening, people have been, I don't know, asking you as you've been helping people?
David:Yeah. I mean, yeah, everybody wants to know, like, oh, are there changes? What what are the changes? You know, when do I have to enroll for this, or do I have to have that? I mean, you alluded to a little bit about part d there.
David:We we know that the the annual out of pocket cap is is increasing from $2,100 to $2,400 in 2027. So you have to pay more. That's an increase of $300. The maximum deductible, in these Part D plans will now go... And and not all of them have this kind of a deductible.
David:If you wanna pay a higher premium, you can get the deductible lowered. But, like, sort of the standard one is going from $615 up to 700. So an $85 increase. So I think that's
Mike:the Those are questions that are gonna be relevant to your plan. Yeah. Do you want a higher deductible and keep your cash flow less burdened or not? Yeah. Here's what gets my go though.
Mike:We're gonna go on a little bit of a tangent.
David:Okay. Alright. Those are always fun.
Mike:How is it that we're expected to do all this ourselves when we have, you know, our Medicare agent over here or senior healthcare benefits agent, whatever the... Their titles. Whatever the title they wanna put on themselves. Yep. And then you got your CPA over here, and your CPA is saying, you know, here's what happened over here.
Mike:Then you've got your adviser over here who's trading and trying to, you know, grow your assets, and none of them are talking. I mean, someone once asked me, hey. Can you do our tax planning that... But will I keep my same adviser. I I have no problem with you keeping your same adviser, but I can't do your tax planning.
Mike:They said, why? Because I can do your tax planning, but if he places one wrong trade, it's gonna affect over here. Yeah. And we see that with health care subsidies too, and it's with the modified adjusted gross income most of the time. Yeah.
Mike:So bringing it all up to be more comprehensive, more cohesive is kind of a big deal.
David:Mhmm. Yeah. There's IRMAA considerations. Right? Yeah.
David:So maybe that's related to what you just said. Like Mhmm. You make a trade that... And you have this big capital gain increase or something where something gets sold. Oh, and now suddenly your income's higher and
Mike:Yeah. Now you pay more for your, you know, your part b. Now I wanna ask you a question.
David:Okay.
Mike:Just your opinion.
David:Alright.
Mike:It's not right for everyone. There's innovation happening in the medical community. Where you can go to a dentist and just pay cash for it. You can go to like a holistic doctor or even a medical doctor, and you now have a membership. You can see the doctor as much as you need.
Mike:Mhmm. You have your annual check-in, but there's now these cash pays. Right. That's kind of neat. Are you seeing people more go to cash pay than you've got like these other insurers?
Mike:They're not really insurance companies actually. They're just their own thing.
David:Mhmm.
Mike:Was it ministries, healthcare ministries, which is not insurance, but it's kind of like collective. A cost sharing. A cost sharing plan. Yeah. Have you noticed any trends or patterns of, you know, people tend to like this if they are like that?
David:I mean... I I think people still, they they wish and they hope that they could just, the insurance would cover more. I think they wanna pay their premium and they wanna get a lot for that. And they're noticing, they're kind of like, they're disappointed when, no, they just see their deductibles going up, the coinsurance amounts going up, these prices of drugs going up. So I think everyone's a little bit sort of disappointed in all these things going up.
Mike:Well, insurance is not an investment. It's the transference of risk to an insurance company where the odds are against you.
David:And more people need to sort of look at it that way, I guess.
Mike:That's the correct definition.
David:Yeah. Well, yeah. Why don't why don't more people have that definition?
Mike:Because it's not fun. I mean, how if you're if you're in the business of selling insurance, which technically we are. Mhmm.
David:Yeah. We can say that.
Mike:Yeah. We're we're technically licensed insurance agents. I'm a financial adviser. I can prepare your taxes. Right?
Mike:But this is why I think people appreciate the honesty is if I use that definition, you're less excited. Yeah. If I say, hey, the average person pays this much or the... Whatever statistic is this much, I can get you right for this much. The odds are in your favor.
Mike:That's not honest.
David:Right.
Mike:And so because we choose honesty, but... And that's why I'm apparently terrible at selling long term care insurance. I have nothing against long term care insurance, but when you define it correctly, it's rather underwhelming. I mean, take any part of of life. You know?
Mike:If you wanna sell a car, you wanna, sell groceries, you know, dive into the details. It gets kinda boring at the end of the day. Yeah. But I think it kinda should be this way. Yeah.
Mike:Because there's risk involved. Right. So whether you're someone that wants more coverage, just know you're paying for more coverage and it... The odds aren't in your favor. Yeah.
Mike:Statistically speaking, that's how insurance companies work. But if an anomaly happens, see, we all have that one story about the friend or the cousin or whoever where a spouse passed and thank goodness they had term life insurance. Yeah. We all have that example of so and so that thank goodness they had good healthcare coverage, and they had disability insurance or workers' comp, whatever type of insurance that so and so had the stroke early on or got hit by the car early on or something tragic happened. Like we all hear those stories, and they're true, and that's why you buy insurance.
Mike:You don't buy insurance to make money. Yeah. You don't buy insurance to game the system. Right. And that needs to be more a part of our conversations we're having, and they're just not.
Mike:Yeah. So yeah, we need to plan that healthcare costs are going up. I'm not excited about both sides of the aisle, and how the politics have happened about healthcare, and how they're handling that. And here's just my unfiltered opinion.
David:Okay.
Mike:Okay? David, if you said you wanted to lose weight. Now you don't need to lose... You're in great shape. Oh, But let's okay.
Mike:Just say Thank you want to lose weight.
David:You're kind, yeah, would like to lose weight though, yes.
Mike:And I told you it's gonna be very difficult, it's gonna be painful, you're gonna feel hungry a lot. Not in like an inappropriate way, but like it's gonna be a rough go, but eventually when you get there it's gonna be really nice. How excited would you be to
David:handle that? No, that's not... It doesn't make me excited, because you've given me sort of the detriments upfront, this is where you wanna be, but you're gonna have to climb this mountain here.
Mike:Now what if I were to say, you know, ice cream makes people happy? So I think you should have a pint of ice cream often, and the happiness is just going to naturally help yourself be healthier. I Do just twisted one study to make a talking point? That's politics in my mind. It's...
Mike:We're not looking to become healthy. And this is both sides of the aisle. A lot of times the conversation is, what can I give now? And this isn't the healthcare side. I'm not talking anything else.
David:Okay.
Mike:How do we give someone something that they might want earlier on in healthcare, especially to seniors, the largest voting block, which then can make things worse later.
David:Mhmm.
Mike:And I know I'm overgeneralizing. Yeah. We could talk about specific policies. We could talk about specific rules. That would be an interesting conversation.
Mike:Yeah. But the reason why I'm a bit pessimistic about the healthcare side of our political realm, the ones who are basically dictating all of this, quick wins have long term consequences. And I don't see us getting to a healthier position long term. I see us putting Band Aids on festering wounds.
David:Right.
Mike:That's all I'm gonna say on it. Yeah. You can go vote if you haven't voted yet. Yeah. Whatever side of the aisle on, whatever your opinion's on, it's just...
Mike:It's a nice right to exercise. But this goes into the plan. How do you hedge against rising cost of inflation or other things? How do you hedge against that? How do you prepare for the good, the bad, the ugly?
Mike:These are things that come up. I would not be surprised if we continue to see increases on health care. Yeah. Because more and more people are retiring. I think it's like 12,000 a day now.
Mike:It used to be 10,000 a day. Now it's 12,000 a day are retiring on average.
David:That's a big wave, a tsunami of people, isn't it? Yeah. So It's more stress on on on a on an... You know, that's already very stressed. Right?
Mike:Do do you know our number one expenses?
David:So this is like a US economy, like I'll give you a hint.
Mike:It's our theme today.
David:Yeah. Yeah. Isn't it like Medicare, Medicaid, health care, just in general? Yep. Gosh.
David:Even more than all the wars and all the interest, debt payments, etcetera. Yeah. It's the biggest cost.
Mike:So that's my concern. Mhmm. I believe that we need to be prepared for rising costs of health care. Hey. I wanna just pause real quick.
Mike:If you're just joining us, my name is Mike Decker. I'm the author of the book How to Retire on Time, and this is my show, the Retire on Time q and a. Join us every week, Tuesdays at noon central time, where we answer your questions right on the spot. Go to retireontime.com for more information. I think we need to have more honest conversations about benefits and detriments of the different options.
Mike:This is the benefit and detriment of traditional healthcare, senior healthcare, or Medicare. Yeah. This is the benefit and detriment of if you wanna add a Medigap plan or a supplemental plan on top of that. Right. And this is the benefit and detriment of the Advantage Plans.
Mike:Yeah. Now, let's talk about your health. Let's talk about what your needs are. Are you traveling? Are you not traveling?
Mike:Are you a homebody? Do you want to stay in network? Do you want to have some... Mhmm. That's what needs to be had.
David:Mhmm.
Mike:It's not being had.
David:Yeah. Yeah. Those are all... That's a good way to approach it because all of those three different main avenues you can go do have some benefit for one person as a detriment for another. And so, know, what is right for the particular person?
Mike:Now of all the political comments that we've gotten in today, and I appreciate the variety
David:Okay. There is
Mike:one I wanna say. Uh-huh. And the government cannot advise you on Medicare or Social Security, etcetera. You have to figure that out on your own. That is true.
Mike:Yeah. Now I do wanna point this out. Too many people cross a line when they seek for help. And there's two sides of these lines. And then we'll get to your questions, so submit them in the chat.
Mike:One line is if you call up Social Security Administration, you're gonna get someone. They're supposed to explain what could happen. They're not supposed to tell you what to do. Mhmm. That happens a lot.
Mike:Mhmm. And what I have found is when people enter into that position where they're saying, well, what should I do? And they kind of give this casual answer because they're trying their best. They care. Yeah.
Mike:I've never heard about someone on the Social Security Administration that just didn't care. Like they're nice people. They're very kind people.
David:But
Mike:they're gonna say, well, based on what I know, like maybe you wanna do this. And they don't have your tax planning context. They don't have your longevity. They might not realize that there's a spousal benefit and or a survivorship benefit. They might not see the full picture, and so they're well intended.
Mike:It's kinda like putting your head in the sand and then giving an answer with the very small view that you have as opposed to not just lifting your head out of the sand, but climbing the tree and getting the vista. Mhmm. The view. Right? Yeah.
Mike:It's my Spanish for the day.
David:Yeah. Yeah. Yeah. That's a good one.
Mike:So now the other line that I see gets crossed. Sometimes people... I don't think people want full honesty.
David:Yeah, because the full honesty might sting a little bit, right? But we're gonna give it. Yeah, we gotta give it The
Mike:other side that I see and I don't like is that people specialize in just advantage plans or gap plans or supplemental plans.
David:Right.
Mike:And it's like what everyone should be doing, and they came to that conclusion, and though there's there's good intentions with it. Mhmm. Everyone should solve it this way. It lacks context.
David:Yes. So,
Mike:who is an agent who specializes in an oversimplified opinion that kind of tells everyone they should be doing that? That's... I see that, and that concerns me. I see people that will say, you're at a good plan, but hey, we should do a different plan. And I hear these stories.
Mike:You know, I got this one plan. Hey, let's switch you over because the current plan makes them not get a commission anymore because the commissions are gone. Yeah. So they switch you to a plan that might be the same, might be a little bit less to get the commission. Like, those are things that concern me.
David:Mhmm. Yeah. The the the the healthcare companies, the the carriers, they do every year, especially when we're talking about Advantage, they they do annually change. They might tweak a plan just a little bit, and now the previous one is now noncommissionable, and this new one is. And what what little...
David:What things did they tweak? You know, you you have to dive into those details, but you don't wanna be swayed to one just because of the agent, you know, because of their own personal incentives. Yeah. So... Just to be aware of that.
David:Not everybody's, you know...
Mike:I'm of the opinion. Get a second opinion on this. Do your research. Ask maybe AI. Put stuff in there.
Mike:Like, you've got until... Was it December 7? Yes. You've got until December 7. We're in open enrollment season.
Mike:Whether you need affordable care act insurance, whether you're on senior benefits, start now. Yeah. Start doing that research. Understand how things have changed because they have changed. A lot of people like that vitamin o.
Mike:Mhmm. Ozempic, or GLP ones, and all that. Is that still going be on your plan? Is it not on your plan? And also, should you be taking that or not?
Mike:I'm not a doctor, I'm just saying, you know, these are things to consider. Lot of evolution here, Lot of things are changing. Those are just some thoughts that I wanted to share, and David, I appreciate. I mean, if you want in the chat, you know, put it in here. We can even get you a call scheduled, but David's our director of healthcare, you don't get a commission.
Mike:Like, you have no say over it. You're you're salaried here. That's correct. But you... Any conversation, client or not, people can get on your calendar and ask these questions.
David:Absolutely. Happy to go through it, walk through, ask questions.
Mike:Would you just put that your calendar... Not about your calendar link. I'm gonna put it here in the chat for anyone who wants. You've got questions. You don't need to be a client, and doesn't cost you an appointment
David:Right.
Mike:Or a cost to to visit with you. Yeah. If you decide to sign up with us, you may or may not get a commission, but here's a little secret. We click a button that says show all of them, commission or not. I don't think you even look at the commission if there's a commission.
David:I just wanna find the... Yeah. Show me all the plans that are available, and then we'll decide which one's the best.
Mike:So we'll put that in the chat here for anyone that wants to meet with David, you can do so. Here's the link. That's all the time we've got for today's show. If you enjoyed the show, thanks for tuning the podcast. Don't forget to subscribe, leave a rating, and as always, tell your friends, the larger the subscribers are, the better the content can be that fuels your preparation for retirement.
Mike:We'll see you in the next show.