Season 4

When to Retire

Episode Notes

According to a recent MetLife survey, 19% of full-time Baby Boomers said they would need to delay retiring because of COVID-19-related financial challenges. However, in the same survey, 12% said that the pandemic had convinced them to retire earlier, citing reasons such as dissatisfaction with their job or “life is too short.”

There’s also a growing movement known as Financial Independence, Retire Early (FIRE). These workers, mostly highly paid Millennials and Generation Zers, are committed to saving and investing as much as possible and paring non-essential spending to the bone so they can retire in their mid-50s or earlier.

Whether you’re hoping to retire in your 50s or plan on working into your 70s, it’s important to evaluate whether you’ll have enough income to last potentially thirty years or more. Start by estimating your life expectancy, which is based on your family history as well as your current physical health and lifestyle habits. Next, consider whether you can delay taking Social Security until age 70, when you’ll earn the maximum benefits. Then calculate how much your 401(k) plan and IRA accounts will be worth at your desired retirement age and estimate how much of an income hit you might take if a bear market drives down the value of your retirement assets by 25% or more when you first start making withdrawals.

If there’s a strong possibility that you won’t have enough income from Social Security and your savings, consider whether it makes sense to invest some of your nest egg in an annuity that will provide guaranteed income for life or if you may need to delay retiring or take on a part-time job after you’ve stop working full-time.

These are complex issues and the cost of making the wrong choices today could threaten your future financial security. To give you greater peace of mind, consider seeking the advice of a fee-only fiduciary financial planner. These professionals can objectively analyze your current and future spending and income sources, your outstanding debts, and the size and holdings in your retirement accounts to provide a realistic assessment of how likely you are to achieve your retirement goals and what you can do to improve your chances.

For further research: 

Recent Podcasts

Season 6
Buy Now Pay Later

Show Episode Notes

Since the start of the COVID-19 pandemic, 42% of consumers have increased the amount they owe for mortgages, student loans and car loans. The one bright spot is that the average amount of credit card debt has fallen during this time period. However, 54% of consumers with credit cards don’t pay in full each month and 18% owe more than $20,000. And the growing popularity of online “Buy Now, Pay Later" (BNPL) programs offered on many online retail websites such as Amazon and Walmart may end up increasing the mountain of debt many Americans are struggling to escape. According to research from Credit Karma, 40% of American consumers have used on these programs, and it's easy to see their attraction. BNPL allows consumers to make purchases now and receive the items right away, while paying them off in four payments. For people who are good at managing and paying off debts, these programs enable them to spread out the costs of purchases without taking on additional credit card debt. However, missing any of these payments can result in stiff late fees and interest charges. Credit Karma's research reveals that 34% of BNPL users have fallen behind on payments and 55% of younger consumers have missed one or two payments. Those who consistently miss payments for BNPL or credit card purchases may also be reported to credit agencies, which could seriously damage their credit score, making it even more difficult to be approved for future loans or credit cards. That’s why it’s critically important to safeguard your credit reputation. If you can, try to pay for online purchases with a debit card. If you use a credit hard, commit to paying off the balances in full each month. If you have outstanding credit card debt, try to reduce it as fast as possible, even if this means forgoing other purchases. And if you want to use BNPL this holiday season, make sure you make each payment on time.

For further research:

Season 6
Medicare Open Enrollment

Show Episode Notes

During the annual Medicare open enrollment period, from October 15 through December 7, you can make many changes in your Medicare coverage. But it’s important to understand the potential impact of making changes—or making no changes at all. First, if you’re in a Traditional Medicare program, you should sign up for a Medicare Part D prescription drug program within six months of enrolling in Medicare to avoid paying a late-enrollment penalty even if you’re not on any prescriptions right now. If you have Part D coverage already, it’s important to review your plan every year during this time to find out how much the annual premiums are rising or whether the prescription drugs you use now are still covered by the plan at the same costs. If your current plan no longer meets your needs and budget, consider switching to another plan that does. During the open enrollment period you can also switch from Traditional Medicare to an all-inclusive Medicare Advantage plan. While Medicare Advantage plans have lower premiums than Traditional Medicare, they’ll generally only cover physicians in their network and all requests for non-emergency care must be approved before they’ll cover the expenses. And if you have a catastrophic illness, you may end up having to pay up to $7,500 per year in out-of-pocket expenses billed by in-network healthcare providers—and up to $11,000 for out-of-network providers. That’s why it’s critically important to read the fine print and understand what is and isn’t covered by any Medicare Advantage plan and compare it to the costs of your current Traditional Medicare coverage. Fortunately, there are many resources you can turn for help in this complicated decision-making process. If it still seems overwhelming, considering working with a qualified fee-only fiduciary financial planner who can help you understand your various options.

Clarification: In the discussion of the maximum out of pocket costs for Medicare Advantage plans, listeners may have had the impression that Traditional Medicare plans don't have deductibles or co-pays. In fact, Medicare Parts A, B and D do have either deductibles, copays, or both. Unless you add supplemental Medicap coverage to cover these costs, you could end up paying significantly more out-of-pocket each year for critical medical care than with a Medicare Advantage plan, since Traditional Medicare has no annual cost caps.

For further research: 

  • Terrysavage.com, Medicare Open Enrollment 
  • Medicare.gov: Visit the official Medicare website to learn more about Medicare and compare Medicare healthcare and Part D drug programs available in 2022.
  • ehealthmedicare.com: Another resources for comparison Medicare options.
  • shiphelp.org: A resource for finding unbiased, free one-on-one Medicare counseling and assistance from the State Health Insurance Assistance Program (SHIP) in your state.
  • 65incorporated.com: A team of independent consultants providing unbiased Medicare guidance.

Show Episode Notes

Podcast Hosts

Pam Krueger

Pam Krueger

Terry Savage

Terry Savage

Richard-Eisenberg

Richard Eisenberg

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