This week on Make It Last Victor and Mark discuss how the Biden Administration’s plans to make tax changes within the estate planning world, and how it could affect you if you fail to make your own plan.
Then, Victor talks about the importance of maintaining your mental health in retirement, and finding your purpose outside of your career.
Finally, buckle-up for a trip back to 1990! Victor and Mark will make some significant financial/retirement comparisons between then and now.
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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 has two companies to help you and whatever needs you may have. Medina Law Group, which obviously can help you with estate planning, legacy planning, the elder law attorney type stuff, the powers of attorney, healthcare, finances, they’re just a lot of moving parts.
Certainly with the Biden administration talking about maybe changing taxes in the estate planning world, the legacy world, it’s important to have your own plan so that it’s not dictated what you can leave to your family and how you do it and not letting Washington dictate all of that, but you’d certainly have to follow the laws, that’s for sure.
Medina Law Group is here to help you with all of that. The estate planning, legacy planning. Then, there’s Palante Wealth. Palante Wealth is about holistic planning for your retirement. Victor is a certified financial planner as well as a certified elder law attorney, registered investment advisor. Palante Wealth is here to help you come up with that plan for your retirement, the income strategies, investment strategies, taxes, estate, all of that.
If you have any questions about where you are on your road to retirement, you’d like to chat with the team there’s no cost it’s 856‑506‑8300, no cost, no obligation for this. The team’s here to help, just don’t know if they can until they hear your situation. 856‑506‑8300.
You can find out more about Medina Law Group by going to the medinalawgroup.com, M‑E‑D‑I‑N‑A, medinalawgroup.com. On the retirement planning side, it’s palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com. I do want to tell you and your wife, Jennifer, the school psychologist, happy anniversary, 20 years, congratulations.
Victor Medina: Thank you very much. We got a chance to get away. We were in ‑‑ I know that people are going to feel bad for me ‑‑ but we were in Hawaii. I will tell you this’ my first time there. It was everything everyone said it was supposed to be. We had a great time. We visited three islands.
We got the opportunity to say, “Well listen, if this is where we are after 20 years, where are we going to be 20 years from now?” Then we did the math. We said, “Well, let’s make sure we’re still mobile at that point in time that we can go and visit and walk around, and we’re not invalids 20 years from now.” It was great. Thank you so much for their well‑wishes.
Mark: Yeah, I know it was a tough trip though. Your three kids, you had to leave at home. It probably worked out nice. It’s probably a nice break. [laughs]
Victor: We had to leave them at home. We were clear, but everyone said, “You’re taking the kids with you to Hawaii.” I said, “Not for the 20th anniversary. They can stay home.”
Listen, I got to shout out to them, my dad, who’s 74 and was watching two teenagers and an eight‑year‑old and made it the entire time. Looked at the kids, were healthy and alive when we came back. Look like he was healthy and alive when we came back, but we wouldn’t been able to make the trip, if he wasn’t willing to stay with them those two weeks, and make sure they got where they needed to. Fed, driven around, healthy, social interactions.
He was fantastic. When he came back, spent a little time with us then he just drove home.
Mark: Let’s hope the school year is a little easier than last year’s school year. We’re still having challenges, certainly this year as well because we’re not emerging from the pandemic as quickly as we’d hope. People are more worried. Maybe there’s going to be more shutdowns. We certainly hope that’s not the case.
We know the taxes are going to go up soon because the Trump tax law ends December 31st of 2025. We revert back to 2017 tax rates, brackets and all of that in 2026, if the Biden administration does nothing. They’re certainly been talking about doing some things. Then we’re seeing inflation increasing. In a way, Victor, retirees are caught in that perfect storm, aren’t they?
Victor: They are, absolutely. This is only stuff that’s going in there. We see the value, of course, of having an advisor in your life. This is the value that we bring to clients is because if everything was predictable and nothing ever changed, then you really would only need one plan. Stick to the plan and everything would be OK.
That’s absent. Any changes that might happen in your own person life, your health, those things would definitely knock off any plan that you had when you set it up.
Now, if the ground underneath you is shifting because the inflation numbers that everyone did planning on, were like, “One percent, one and a half, two percent.” Nobody was really planning around what four percent inflation might look like. That’s a change.
If you look at the tax rates and the fact that those things are shifting, that’s a change. When Uncle Sam ends up taking more of your pay check just because on a stroke of a pen or a number of pens that were in there, then that’s going to affect how your plan needs to work.
The value that we’re bringing to clients especially in these tumultuous times, is how are we doing with the plan we set up? What changes do we need to make or still on course? Are your goals still the same? Will you still be OK?
That’s probably the most important question that we answer on a regular basis is, are you going to be OK? Is it all going to be OK? We have to make a change. What do we have to change so that you will be OK? I would say that any of our clients are super worried about it.
We’re regularly in front of them, we’re regularly reviewing these things. We’re fairly conservative in the way that we think about a plan so that what we’re doing is, we’re ending up expecting there to be changes in the future. The planet we create is already accommodating some of the stuff in there, but we still have to check in.
We still have to have regular meetings. We still have to see what’s going on, and now as we come out with these new potential roles like Biden’s plan.
Some of the elements in there greatly change the estate tax exemptions, that was a forgotten item in people’s planning, because it was $11 million. People were like, “Look, it’s $11 million times two that’s $22 million. That’s not me. I don’t even have to think about it any longer.”
When they propose changes or $3.5 million and automatically necessarily get the spouse’s one that might be a change that’s coming in there, all of a sudden, there’s some people that by the time that they pass away that might be an issue for them. Similarly, if there’s an adjustment to the step‑up in basis, that’s going to be something that’s going to end up being a shift in the way they were doing their planning.
A lot of people plan on using their death to erase any tax problem, but that might shift it as well. That’s nothing. Nobody ever considered that that would be the case. Everyone started their planning like, of course, there’s going to be a basis adjustment when you die.
Now that element of it changes then we have to reevaluate what we were doing and how we’re going to get there. I will tell you that for people that are trying to make sure that they’ve got their ducks in a row, and then they’ve got the elements that they need in place.
We’ve created a resource around that. It is a retirement checklist. This checklist challenge allows people to go through a list of things that you should be considering as you’re evaluating your retirement picture.
This would be the case if you’re about to enter retirement, or if you’re already there. If you’re already retired, it’s worth going through the checklist to see how you match up.
Certainly, if you’re on the road to retirement, if it’s coming up in the future, you want to see where you are on that. We created a website that is for downloading this piece of information. It’s at 920checklist.com.
If you go to 920checklist.com will ask for your name, your email address. What we’ll do is we’re going to send you by email this checklist that you can download. Then you can compare your situation.
I’ve never seen a better tool for gauging how well you are on the road to retirement. It goes through 30‑plus points for you to be comparing where you’re at to what an ideal or an optimal retirement looks like. If you go to 920checklist.com, put your name and your email in there.
We’ll send you the checklist that you can start the process of comparing where you stand, whether you’re in retirement, or you’re approaching retirement, and see how you measure up to this picture. That’s at the base level. As these changes come up, you got to be able to react to these changes as well.
Mark: I like that. 920checklist.com is where you can find all that information out, and the checklist is phenomenal to go through. You’re going to find out who…I can’t check that one. I guess I need a little help there.
Anyway, if that’s the case, when you get this checklist, you’re like, “Boy, there’s some areas that I think I’m lacking.” Call the team. They’re here to help. It’s 856‑506‑8300. There’s no cost for this. The team is here to help.
Don’t know if they can till they hear your situation, but they’d love to help. 856‑506‑8300. Victor, CNBC recently featured an op‑ed on some ways to help protect your portfolio in the second half of 2021. I am not very good in the financial world. I love doing the show with you because it’s gaining me knowledge. At the age of 61, retirement is somewhere down the road, I hope.
I was in the sports world for 25, 30 years. This is new for me. This is good. It always seems to me, that’s always something that happens in the markets in November.
What are some money moves we might think about for this year? The second half of the year, especially if we’re getting closer to retirement?
Victor: There’s probably a couple of things that you should automatically be thinking about that would happen, regardless of the economic climate, or what’s going on in any proposals. It’s the way these things…
Divorced from the idea of it being 2021, but normal things that you’re doing on a regular basis. One of the things you’re going to want to take a look at, your portfolio and rebalance it. What can happen over a course of time, especially a year like this year, things have been going up as you can be overvalued in certain positions that can put more risk in it.
The way you want to think about is that if you’ve got some winnings on the table. If you think about the stock market, it’s being a little bit of a casino. You can’t always predict what’s going to happen. If you’ve got some winnings on the table, you want to scrape those off.
You want to take those winnings and go home, and what you want to be able to do with that rebalance a portfolio. Sometimes the phrase that we use is, “We’re going to keep the powder dry in the keg.” We don’t want it to explode. We might take some things that are at risk and position things that are safer.
We’re rebalancing that so that your overall risk is in line with the way that you set it up. Is something that you want to do towards the second half of the year.
Second thing you want to do is you want to review all of your required minimum distributions. If you’re over the age of getting it…I didn’t name an age because there’s people that are still in the between. We had a tax law change that delayed the beginning of RMDs to age 72.
We’ve got people that are 71 now that get caught up in the old law that still have to take an RMD. They still have to take a Required Minimum Distribution. We want to do that towards the second in the year, because if you pass December 31st and you haven’t taken your RMD, the IRS has got a big fat penalty waiting for you, which is 50 percent of the amount that you’re supposed to be taking.
That’s going to be a charge to you. You’re going to have to pay that amount. You want to make sure that before the year‑end closes, that you have done that.
I don’t want you to do that in December by the way. I don’t want you doing that around the holidays. I don’t want you putting stress on what’s going on with the custodian that’s got the money to ship it out to you in time.
You want to do that, coming into this last quarter. September, October is when we start auditing all of our client’s files to make sure that everyone has taken their RMDs. We’ve got a hard deadline, it happen before Thanksgiving, so that’s definitely something you want to take a look towards the second half of the year.
The other thing that you wanted to be looking at, in terms of where things are with different investments.
Generally speaking, everyone understands you should buy low and sell high. Well, one of the reasons you buy low is to take a look at what we consider to be underperforming markets and as you rebalance some of that money, get into the things that are not performing as well. That’s counter intuitive.
It was funny because my mother‑in‑law falls into this category, where she was always chasing the winners of whatever was happening. She would get a statement here of the funds that have been most best performing and then she would go buy those funds. We’re already buying high in that situation.
The first thing we did when we take over management for her was to say “OK, look. We’re no longer going to do that. We’re not going to chase the trend off of it. We’re going to look for the things that could have been put up on sale. Be those things that are underperforming and get into those situations where we have the potential for growth, because we’re buying on the cheap.”
“We’re buying things that are on sale.” The last thing that I want people to look at is, I want them to do tax planning proactively. A lot of people wait for the year to end, get their statements in January and their “tax planning” is to take those forms, bring them to their tax proprietor and then just file the taxes and hope that their deductions helped up.
What we wanted to do is make sure when you think about tax plan before the year ends. We wanted to take this last period of times to take a look, because there are some stuffs that you can’t automatically predict. If there’s going to be dividends that are declared, that’s going to add to your taxable income and you didn’t know which companies are going to declare dividends or not.
If we’re thinking about coming into this last quarter, we want to take those last elements of tax planning in this last quarter and then really optimize, for example, our tax brackets. If you’re in a bracket where you’re consistently paying in a 22 percent bracket pay, there’s probably some space in that bracket.
Knowing that tax laws is going to change in a few years, you may want to eat up the rest of that space and actually take out some more money and do that to the top of that 22 percent bracket because if you look and project that ‑‑ that’s what we do for clients all the time.
We project out what taxes is going to look like, you might determine, “Hey, 22 percent is probably the best tax rate that I’m going to see for the foreseeable future. Let me go ahead and pay that, get the government out of my life for that amount.” That way, you will have locked in or guaranteed the taxes that you’re going to pay on that money.
You can do that not only this year, but every year when you’re looking at what your tax picture looks like. Those are the areas that we’re going to look at. We balance your portfolio. Definitely, take some of the winnings and try to get them into some more conservative items.
Check your RMDs before the end of the year. Make sure you’ve done that and do some proactive tax planning before the year ends to maximize your tax brackets.
Mark: Yeah, well said. That was a lot of ground that Victor just covered there and if you are following along, you’re going, “Hmm, I don’t know if I’ve done that one.” Because if you think about it, inflation, they’re skyrocketing prices on goods and services.
We’re still dealing with COVID, the unrest in the Middle East, increase market volatility, looming tax increases. There’s a lot of moving parts to our world right now. That makes perfect sense to have an actual plan in place when it comes to your retirement. That is so important to have an actual plan when it comes to your retirement.
You like to learn more? It’s 856‑506‑8300. Again, no cost, no obligation, no pressure for this chat. For the team at Medina Law Group, and Palante Wealth, they’re here to help. 856‑506‑8300.
We’re just getting started today on “Make It Last” with Victor Medina. Back with Victor and more in one minute. Stay with me.
Mark: Welcome back to Make it Last with Victor Medina of Medina Law Group, and Palante Wealth. The team is here to help you with any of your estate planning, legacy planning, your powers of attorney, healthcare, financials, all those kind of things.
Palante Wealth is all about planning for your retirement, income, investment, taxes. The two companies work together. Sometimes if people just want estate planning, legacy planning, information, they go to Medina Law Group. Sometimes they just want a retirement plan, “Hey, do I have enough?” “Can I retire?” “Will my money last as long as I do?” That’s Palante Wealth.
The companies really work together when it comes to your entire retirement plan. If you have questions and you want to learn more, it’s 856‑506‑8300.
Victor’s team is focused on traditional estate planning, asset protection, retirement distribution, proactive income‑tax planning. 856‑506‑8300.
Now, in these next two segments, we’re going to talk about something that we really don’t talk about on this program very often. The national conversation really starting to shift when it comes to mental health and how well you take care of yourself.
Here is Simone Biles. Simone had a ton of pressure on her, there’s no question, as the face of the Tokyo Olympics for United States. An incredible gymnast, incredible athlete. So many gold medals, it’s amazing, but when you watch her in those first couple of nights of gymnastics, you’re like, “Wow, she’s taking an extra step.”
“She’s not really in sync.” All of a sudden she’s going, “I don’t think I can do it anymore.” Here’s what she said back in the Olympics.
Simone Biles: I say put mental health first because if you don’t then you’re not going to enjoy your sport and you’re not going to succeed as much as you want to, so it’s OK sometimes to even seat out the big competitions to focus on yourself because it shows how strong of a competitor and person that you really are.
Mark: This is an interesting thing for people that you help with retirement, Victor. I played football and my coaches probably back then could care less about my mental health. You just shut up and do it, right? It’s a different mindset for somebody like me at 61 years of age, because I’m like, “Holy cow, Simone, you’re going to win more gold, you’re going to fight through it and do it.”
When you’re whirling all around in the air and you’re not really sure where you are, you could see it in her face. I don’t know. It’s a different time and I get it that I’m old now, you’ve got three kids that are 17, 14, 8, senior in high school, freshman in high school, fourth grader or third grader. It’s a different mentality.
How do you deal with that with kids but also with retirees who are going through some mental challenges as well?
Victor: It’s the same thing, whether you’re a kid or you’re a retiree. I have a side hustle work. I coach other lawyers and there’s people that really put a lot of pressure on themselves. I agree with you. I think that, historically, it’s always been suck it up and do it.
There’s never really been anything that’s been talked about in terms in the area of mental health or whether or not you’ve respect it or there’s too much pressure or what that means. There’s a false dichotomy in that examination, which is you are either strong or you need help with mental health. It’s very difficult for people to see it, that the strength happens in both of those areas.
It’s like a trade‑off. Most people see it as, and when I got started a long time ago. I’m big into meditation and mindfulness and that’s been a practice that I’ve had probably for the last six to eight years, I would say, when I started in that there were any lawyers that did it.
When I went and spoke on it, most of the lawyers that were out there dismissed it because what they believed is that by doing it, you lose your edge. That’s the idea around focusing on mental health means that you’re going to lose whatever edge you need in order to be the best at whatever you’re doing, whether it’s in sports or in your chosen profession.
Then we were able to find some studies around it and some studies, for example, on Marines, in combat situations, and they would teach them mindfulness exercises. They had the four‑square breathing method which is a mindfulness activity.
What they found is that they were so much better at their job, making sure that they took care of their mental health. Their reaction time was better, their judgment was better, their overall mental health was better.
You’re going to go and tell a bunch of marines in the Middle East that they’re not tough? Good luck. I’m going to step away while you go and do that.
If you think about the distinction and this is a concept in mindfulness between attachment and commitment, it starts to clarify some of the decisions that people make. A lot of people, I think that when they were reviewing Simone Biles’ situation, what they were thinking about is they were very attached to the result and that she should be similarly attached to result.
She wasn’t so much about the attachment because when you’re attached to something, especially something in the outcome that you can’t control, it ends up meeting that there is this great loss. A risk of loss is a very binary evaluation, either it’s going to work or it’s not going to work. Attachment’s a very dangerous place to be.
Instead, what she was, was very committed. She was committed to being her best. When she was participating, she was committed to her own mental health. When she’s committed there’s a lot of outcomes that can be successful for that, as long as you remain committed.
How do we bring this over to retirees? We do this old dance and end up talking about retirees, we talk about the same thing. You can’t necessarily be attached, for example, to a set of results from market performance. You can’t be attached to having your plan work out exactly the same way as when you first set it up, but you can be committed to having a great plan.
You can be committed to being flexible around this and there. The commitment gives us lots of results that are potentially successful. The attachment has a lot of risks that’s in there.
If you went into your retirement with an attachment that’s saying, “I have to generate X dollars out of my portfolio every year and there can be no changes to this for how I define success,” then it’s going to impact your mental health very greatly.
When that gets knocked off, invariably, you’re not going to be successful and just getting in the world of results and then their life is going to life you. At some point in time, you’re going to have to deal with the ramifications of that. You’re going to have to deal with, for example, the situation where you’re like, “Well, I wasn’t capable of getting successful retirement.”
Hold on a second. You had such a narrow definition of that, that if that’s your only metric, probably is not going to work out so great. If instead you’re like, “Listen, we’re committed to controlling the things that we can control,” we can control how we navigate tax rates.
We control our diversification, how much risk that we’re taking. We control our legal documents to make sure that we’re protecting against a risk in the future. We can control for things with insurance to control catastrophic risk of what would happen. If you’re committed to controlling the things that you can control, now you’re in the best position or retirement for mental health‑wise.
You’re in the best position going forward. It doesn’t matter what’s going on in the news, because that’s not going to affect the way that you would set up your original plan.
When we deal with clients, we’re very clear that we’re not attached to particular results. It’s no longer necessary for what your plan needs. We are extremely committed to controlling for the things that we can control, for one. If we can get their mindset on that same evaluation be like thinking about it the same way, the same approach. We can get them committed in there.
We’ve got very mentally secure clients in retirement. When the pandemic first hit, there’s great market correction, about 20 percent correction, even as much as closer to 30 percent for one particular period of time.
That drove a lot of people crazy, and it drove a lot of people to sell off things, a lot of people to wonder what’s going to happen in their retirement. The number calls we got, Mark, in that period of time concerned about the portfolio? Zero.
Now, we did a bunch of outgoing calls. We went in. We touched base with them. We wanted to make sure they’re OK. Most of our discussions were, “How’s your toilet paper situation, because we got a lot in the office? Do you need anything? I’ll go and deliver it for you.”
We were there concerned about them. Wanted to make sure that they were healthy, that they’re OK, did they need anything? The plan component of it was not impacted by something, because there wasn’t anything that we knew they were going to be able to control.
Going into their retirement plan, we knew we weren’t going to be able to control when there was a market correction or if there was going to be one that happened. We couldn’t control for that.
What we could control for though was making sure that we had some safe money aside, so that when that happened, if that happened, it wouldn’t affect whether or not they’re going to be successful in retirement.
It’s great way to their mental health, because then they showed up perfectly fine. They only had to deal with the part of the COVID that was the COVID. They didn’t have to deal with the other components of that. That’s one small example. It’s a pretty illustrative one for how people can be using concepts around mental health on their retirement general.
Mark: That’s well said. It comes down to having a plan to ease some of the stress that we all have in our lives. It’s about the plan. Having a plan in place for the what‑ifs. What if this happens? What if that happens?
They’re bad things that happen. You could lose a spouse. What do you do? You don’t wait till that happens to have a plan. You put all the stuff in place. With Victor and the teams, you do it.
First, you’re proactive, which Victor loves to talk about, being proactive, not reactive. You put the plan in place. Then when those things happen, it doesn’t mean the plan is written in stone. Things happen in our lives.
We always have to adjust as we move along. It’s about being proactive, and being able to live your life and not worry about every single thing. 856‑506‑8300, to sit down and chat about where you are, maybe to ease some of your stress that you may have. 856‑506‑8300.
This is so important. Stress is a health issue, too. Right? Victor. Those things where you’re worrying about things that you cannot control.
My daughter’s 20. We’ve talked about it before. At 17, senior in high school, a car wreck paralyzed from the waist down. Incredible, I don’t know how she’s made it. I don’t think I would be alive if that had happened to me at that age.
Now, she has panic attacks, because of the things flashing in her mind or whatever. There’s so many things on the middle side of things that we don’t understand.
You do as a meditator. You probably have peace and calmness in your life at all times. You think about it. People are worried. “Do I have enough? Will my money lasts as long as I do? What happens if I lose a spouse? How will I do it?”
There’s a lot of stressors that we don’t have total control over. The plan is what helps get us through it, I would think.
Victor: Absolutely. The plan allows us to have some grounding on what were there. If we’re going to focus on mental health, then we can spend all day in one, the value of a plan. We want to focus on this concept of mental health.
You’re right. What happens with stress is that it has these collateral effects. It’s been well‑documented. It’s going to impact your health and other areas. What we do is we have a way of finding a safe space.
I know that’s like a little woke thing that we’re going in there. If we have a place that has a grounding, a touchstone, a way of gaining comfort from it, then it’s going to allow us to respond rather than react. By the way, to dispel any rumors or myths about that. Just because I meditate does not mean I’m super Zen all of the time.
The meditation is what allows people to get into a situation. This is what it does for me. I don’t walk around on lithium all the time because of my meditation, but it allows you to respond rather than react. Because you’ve got the plan, you can use that to respond adequately to the inputs. The stimuli that’s out there and not react.
I’m so sorry that’s going on with you on terms of the panic attacks. That’s a reaction. That has an impact. It reacts to what’s going on in there.
If people in retirement are doing the same thing like, “Oh, this is what’s going on the news.” I have to react to that. It’s like hold on a second, that’s not good for you at all. You need to be in a situation where you are properly responding.
By the way, that’s where the value of an attorney, an advisor comes in. That allows them to…We’ve trained them. They pick up the phone. They talk to us when they’ve got concerns.
What is that? That’s responding to as we’ve got that reacting that they call us. Then we help them respond to what’s going on to there…Then we give them the piece that they need to move forward and know that it’s going to be OK.
That’s the purpose of having that plan. Is to know that you do have a mechanism to respond rather than to react. Especially when we’ve got all of these overwhelming things, which we been tested in the COVID in the recent years.
Mark: When you think about all these things that go on in the world, certainly you think about retirement and you think about, “Boy, I had a great job. This wonderful job and I identify myself with my job, but now I’m retiring. Now what?” That’s a middle issue.
That’s some things that you have to work through. For some, it’s harder than others. “I hate my job and I can’t wait to retire.” You don’t have that issue. People love their job. Love their co‑workers enjoyed and identified with their job.
There’s a middle transition to sliding into retirement. We’re going to talk about some of that when we come back. If you would like to create your own “Make It Last” plan with Victor and the team at Medina Law Group and Palante Wealth, you can certainly do so.
Questions like, “Hey Victor, when can I retire? Do I have enough? Will my money last as long as I do?” That’s still the number one fear of retirees. Is the fear of outliving their money.
“What about if something happens to me, will my loved ones be OK?” Those are big, big questions. The Make It Last plan covers all of that, income, investments, taxes, estate planning. If you would like to sit down with the team and get started, maybe you’ve got the investment side but all the other parts you don’t really have, because they all go together, 856‑506‑8300. 856‑506‑8300.
Again, there’s no cost, there’s no pressure, there’s no obligation to chat with Victor and the team. 856‑506‑8300.
Do you realize that more than two million Americans, at the age of 65 or older, suffer from some form of depression? Believe it or not, working on a financial plan can help reduce your chances of struggling mentally later in life. That’s where we’re headed next, stay with us. This is Make It Last with Victor Medina.
Mark: Welcome back to Make It Last with Victor Medina, Medina Law Group, and Palante Wealth. They can help you with all of your estate planning, legacy planning, your powers of attorney, healthcare directives, financial directives. A lot of moving parts there.
Palante Wealth is about holistic retirement planning. It’s about you, your income, where is your checks going to come from? How are you going to replace those paychecks that are no longer coming in?
Your investments, where’s your risk level? Are you taking too much risk? Not enough risk? Are you losing money safely because you’re scared and you put it in the bank? We’re not keeping up with inflation, so you’re losing money safely, about investments, on taxes, and estate. All of that is a part of retirement planning.
The Make It Last plan puts it all together for you and nobody has the same plan because Victor and the teams build the plans around you and what you want to do, your bucket list items. What are you going to do in retirement? How are you going to spend your time? Everybody’s situation is unique to them.
The Make It Last plan is about you and your family. 856‑506‑8300 is the number. No cost, 856‑506‑8300. We’re talking about mental health today, on the program. In the year of the pandemic and 2021 with the Olympics and Simone Biles, it’s been more to the forefront where even young athletes are bailing because they’ve got some mental issues.
We got to get our mental health in order. Online therapy resource, betterhelp.com says, “In many cases depression happens during retirement when there is a lack of preparation.” If you don’t have a plan for how you’re going to spend your time, you’re more likely to feel depressed in retirement. Is this something, Victor, that you spend much time on when you’re helping people retire?
How they will actually fill their days?
Victor: It’s one of the benefits of having a wife who’s a school psychologist. She, from time‑to‑time, will offer some services for people that are in transition in our client base because of these tremendous pressures that have come in.
We do spend time on it. Educate people that are on the verge of retirement to do a few things. One of them is to find purpose outside of what was their job before. So much of our identity is wrapped up in the job that we did for decades. Decades of what was going in there.
You think about your career, your career likely didn’t have five‑year things and then you get something completely different. You might have ascended in what you were doing.
You were identified by the success that you had and probably by the end of it you were earning the most amount of money, you were at the highest level of responsibility. Skill set, you were at closest thing to mastery for whatever it is you did right before retirement.
When you separate from that, this loss of identity, the switch in there, especially if you enjoy what you were doing, can really impact. I see it often too, by the way, in people who are in retirement who lose a spouse. What will happen there is that a lot of their identity was wrapped up in this marriage that were together and it will impact the depression and send in that loss, as well.
What we’re thinking about there, in terms of finding purpose, is to find a way of identifying yourself and what it is that you’re doing that is greater than just you, by yourself. What I mean by that is that once you start looking outside of you, a lot of people will volunteer, just like my mom.
When she retired, she spent her entire career as a school psychologist, by the way that’s an interesting story for later because if you’re paying attention at home, yes my wife and my mom are both school psychologists and yes, my mom introduced me to my wife.
We’ll talk about that some time later in the future. By the way, the punch line to that is I get to tell my mom, “You can’t complain about her, she’s your choice.” Of course, she never has in 20 years.
The idea is that when she left, she was so much just wrapped up in her being great administrator and great school psychologist. She found purpose in holding babies in the NICU. In retirement, that’s how she filled some of her time and it was outside of herself. That makes sense? She was out there, externally focused, she was in service of others, she was contributing.
My dad did the same thing at the same hospital. He didn’t hold the babies, but what he did is he would talk to families about what was going on, for people that were waiting for reports for surgery.
The doctor will come out later. He’s sort of a liaison between the two. When people discover a purpose or can define a purpose around their retirement, what it is that they are going to be defined by and if they can do it outside of themselves, in contribution, in service of others, it completely changes the potential and the incidence of depression.
It’s really difficult to be depressed when we’re serving others. It’s very difficult to be depressed when we have a good identity for who we are. I spend a lot of time with people who are on that verge of retirement making sure that we’ve got a plan for what they’re going to do tomorrow, that next day.
How are we going to fill that time? Because if you’re thinking that you’re just going to sit on the porch and do nothing, that retirement is the reward where you stop doing stuff, that’s really where we start to see the depression come in.
This has something to do with the financial plan because often people will fill that void with buying things. They’ll blow their budget out for it and especially the initial years because they’re trying to fill the void with something else.
I’m trying to help them avoid the risk to that, the pressures on that, by finding identity, reason, and purpose in something else. I know that sounds really hippy for financial advice to be talking about that, but I will tell you that most of financial guidance is about behavioral finance and not about the math.
There are strategies that we’re using that are good strategies, but you can Google half of these things that are out there and probably get a pretty decent way of putting it together.
When we think about the habits and the behaviors that are going to lead us to success, I’ll give you another one that’s a behavior‑related one and that’s that in the pre‑retirement years, you’re all about accumulation and accomplishment.
You’re looking at returns, you’re looking at numbers and you’re measuring your success by that. I need a behavioral shift, I need a mindset shift that in retirement it’s about staying rich. You got rich, now you’re going to stay rich or keeping what it is that you’ve accumulated. Getting that nest egg in place.
That’s a behavioral item where I get to shift. The thing is, that’s no longer the rules of that winning game. To go back to depression, we do spend a lot of time with people. It is an important thing for people to spend time on.
I found that the secret source to that is finding ways that you can serve others. If you can be in a position where you’re contributing, a local foundation. Maybe you’re somebody that was into the Lions Club, and you can help collect classes off of it.
Maybe you love sustainability, and you’re out there planting community gardens off of it. Whatever it’s going to be is that jazzes you, if you can be in service. Maybe you’re a jazz musician, and you can train and go to high school and teach some kids about whatever that is.
If you find purpose outside yourself, it is really difficult to be depressed in those situations, especially not depressed critical in retirement from that.
Mark: If you’d like to be part of the acapella group in the area, you can certainly talk to the local director that would be Victor Medina, 856‑506‑8300, 856‑506‑8300. As I told you before, I coached quarterbacks in college for three years. I coached college golfers for seven years. I coached men’s and women’s team.
There’s different mentalities when it comes to men versus women. That was interesting. It’s the same thing when you sit down with couples. You’re helping them come up with this plan and this strategy, the Make It Last plan, the income, investment, taxes, estate planning, all of that goes into retirement planning, social security, Medicare, all those kinds of things.
Sometimes you have a couple, one might be a spender, one might be a saver. Maybe they’re both spenders, maybe they’re both savers. “Hey, I want to go on a trip.” “I don’t think we can afford it.” “Well, I think we can.” You put the numbers together. It is a lot of the behavioral finances that you’re talking about. It’s our mindset.
It seems to me that it’s important to have an open mind when delving into an area that you’ve never done before. You’ve never retired. Victor has never retired. You’ve certainly helped a lot of people retire. You have a different insight into retirement because you’ve helped people do it. There’s a middle side of this. It’s really fascinating.
Victor: Totally agree. It is fascinating because a lot of people’s expectations on retirement are set by their prior experiences approaching it, to what she said like you don’t retire twice kind of thing. Very few people do this. This is a new retirement where people have partial retirements, people retire once at 25 and again at 35 and 45, really rare thing.
Most people will work their entire lives, and they retire once. Because they’ve never done it before, how they think about retirement is completely informed about what they did before they retired and like how they approached everything. When we think about having an open mindset and trusting in someone that has guided other people through their before, it allows us to be introduced to new ideas, in new concepts.
If all we do is go by the old metric and do the measurement on the thing that we had before without being open to new ideas, we are going to miss some great opportunities. You know that we spend so many times in this show talking about…is this concept about proactive income taxes.
Voluntarily paying more income taxes than you would if you just took your rmds and you just skated by on the minimum that was in there because it helps you in the end. If you are somebody that was straining your entire life and you pay the minimum taxes and don’t pay anything more off of that. If that was your entire thinking and I come to you and I’ve got this great idea and be like, “Listen, this is what you’re supposed to be doing.”
“This is how you’re going to make more money. Overall, have more flexibility to buy the government out.” Now, if you’re not open to that idea, you’re going to miss opportunities, where you could have saved a bunch of money on taxes, being a little bit more forward thinking, open thinking, turning into the skit a bit. That will open up greater planning opportunities.
If you’re not open to that concept, you’re going to miss out. I’m not going to tie each one of these things is going to, somehow, make you catastrophically poor and end up in the gutter with your friends pointing and laughing, but enough of this will significantly impact your retirement.
When it comes time for you to either live a retirement that you dreamed of or over a time that you’re forced to, it might be on the second one a little bit closer, because we didn’t maximize what it is we’re doing there. That would be the same thing if we’re talking about leaving an inheritance behind for people or anything like that.
The idea is that, you’ve got to be open to new ideas because if you’re not, then you will be limited in the outcomes that you can have by the things that you come into that situation, what those foretell, what these conclusions are. It’s important for that.
By the way, this is one of the reasons why we do the show, one of the reasons why we end up putting out a bunch of information out on YouTube and with books that I’ve written.
We know that I have to give people lots of ways to come into the open to be thinking about new ideas. Share these ideas ahead of time, not just coming in the first meeting like, “We’re going to change your entire life, just be open to what we’re doing.”
It’s paving it out for people a little bit more, so they can contemplate it, get comfortable with it, because we are coming with new ideas and they’re going to change what they’re…How your things work. I want them to have enough time to be thinking about this, adopt to be OK with it, so that we can continue to guide them to successful retirement.
Mark: Victor is the author of five books on retirement planning, under its acclaimed “Make It Last” series, so you can certainly search for those, Amazon and the like. Make It Last series by Victor Medina. Let’s finish this up with this before we head to our final segment.
I do think it’s interesting that a lot of people today because of the 401(k) world, they’re putting their money in the 401(k)s because that’s what we’re supposed to do. We’re taking advantage of company matches. We’ve seen the markets go well so our 401(k)s should be doing pretty well when we retire.
Though typically you don’t leave it in the 401(k). You move it into an IRA and it gets a little bit more directed. When is the right time to get a second opinion on what we’re doing and where we are heading into retirement?
I would think for a lot of people it would be a first opinion because they’ve had their job handling their retirement basically through the 401(k). Maybe you’ve never sat down with anybody to talk about retirement. When do we start looking into a second opinion or even a first opinion?
Victor: I wish that there was an easy answer for everybody. I always find that the best way to think about this is that there is a moment in which you have a question. That’s typically the right time to have a conversation.
Let’s pull that out a little bit. When you separate from service and you’ve got money inside of 401(k). You’ve got a question about whether you should leave it there or roll it over to your new company or roll it over to an IRA.
That question is the right time to ask for an opinion because as soon as you recognize there might be some information out there that I don’t know. It’s great to be able to get that information from somebody that might know that. We are having conversations for people at different stages, but they all have these little intersections of when they have questions.
Let me give you another example. We did planning for a client. He is a physician and he’s at the tail end of his career. He’s got questions about how is he going to have a successful retirement. We’re helping him with that. We put a plan in place.
We’re talking to his daughter because his daughter is in a position where she’s got a question about what 401(k) options in her company she should be electing. We can give her some ideas on that and how to position those things.
It’s about training people to say, ”Look, if there’s something that I have a question about, it’s a good time to reach out to somebody that has an expertise in that area and we can get good answers from that.” Now, they’re some very common things where that happens.
As you hit for example age 59 and a half, and you can do an in‑service rollover from your 401(k) while you’re still working, and maybe get better investment options from that, that’s a good time, 59 and a half.
When you hit your Social Security eligibility ages beginning at 62 through age 70, that’s a good time. When you’re at 65 and you’re about to enroll for Medicare and you’re eligible for Medicare, that’s a great time to do that.
As you start to approach your RMDs, hopefully, a couple of years before that, but you’re either 70 and a half or age 72, that’s another good time to do that. It’s looking at those ages or the intersection of when questions come up.
There’s a great time to reach out to our firm, give us a call 856‑506‑8300. Get on the calendar. Have a conversation with us. We can help guide you in the direction that you need.
Mark: This is a team situation. Victor and the teams are here to help you ‑‑ your team ‑‑ to live the retirement you’ve always dreamed of if that’s possible. Look at yourself because it’s your retirement. You’re the CEO. It’s your retirement. It’s your hopes and dreams. It’s your bucket list items.
Victor in the Palante Wealth and Medina Law Group firms are here to help you in those areas that you don’t understand maybe, or you want to have something written down. You want a plan in place so you feel less stress heading into retirement.
“I’m going to be OK.” It looks like, “Hey, that’s fantastic.” Enjoy your retirement. It’s about you. Victor and the teams are here to help. 856‑506‑8300. Am glad you’re with us today. We’re headed to our final segment right after this. This is Make It Last with Victor Medina of Medina Law Group and Palante Wealth.
Mark: Glad you’re 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, or how am I going to replace my paycheck who 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, real‑estate taxes are going up. There’s a lot of changes coming, it sounds like. We know of nothing if the Biden administration does nothing. We know that taxes are going to revert back to 2017 rates in brackets. 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 ask you, what do you think the average retiree, how many years is an average retirement today? In today’s world?
Victor: I think because we’ve seen all these advances in medical care, and people living longer, some of them may retire longer, we plan somewhere between 25 and 30 years. That’s an average length of retirement. It’s almost a full quarter or fourth of their entire lifespan.
Mark: Yeah. If you retired 65, it’s not unusual at all that you’re going to hit the age of 95. The average ages keep going up. Certainly, the pandemic would have an impact in that probably. Typically, where it used to be, what was it, 19…Let me give you some ages.
In 1900, life expectancy is 49. In 1960, it was 69. In ’04, it was 80. Now, it’s mid‑80s, so it’s not unusual if we retire 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 in the space, or maybe you go to things like the TV show, “The Simpsons.” It’s still on today. I don’t watch The Simpsons, but I know a lot of people like it. I do remember the movie, I’m more of a movie guy. “Ghost.” Did you see Ghost, Victor?
Victor: I did. Yeah, that’s the one with clay, with Whoopi Goldberg. Yeah, I remember that one.
Mark: No. Ghost was Patrick Swayze and Demi Moore. Or, ain’t it? I think it was.
Victor: Whoopi Goldberg was the ghost. She was the medium.
Mark: Yes. You’re exactly right. You are right. That is right. I forgot about it. Whoopi, yeah. “Dances with Wolves” with Kevin Kostner, “Pretty Woman,” Richard Gere, Julia Roberts. “Home Alone,” now a classic. Whatever 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?
Mark: You didn’t start Medina Law till ’06.
Victor: …college. No, no, no. I was about to graduate college two years later. 1990, oh jeez, I was 15 years old, Mark. I was about to graduate high school. Yes, 1993 that I graduated. Yeah, I was 15 years old.
Mark: You were Lucas’ age at that point.
Victor: Exactly. Probably a sophomore in high school.
Mark: Yeah, so you think back. For those of us that are 60. I’m 61. We can start to remember 1990. The crazy thing is when you look back in time, the median home value $79,100. What is that value in Bucks County today or Marshall County?
Victor: Oh, man. Not a chance. I don’t think it can get your kitchen done in this town, for that kind of money these days. [laughs]
Mark: The DOW end of the year in 1990 at $26.33. That’s different. You could get a CD at the bank with an interest rate of around eight percent. We would live 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, so it’s totally different. You’re 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. I would probably guess.
Mark: “Ice, Ice Baby.” Vanilla Ice. This was August 22nd, 1990. Number one on the US Billboard Hot 100 Charts. It is fun to go back. It’s one of the things that radio does. It sticks in your mind. You could remember the songs from you high school days, your college days.
It’s really interesting to go back in time. 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 you entire life in front of your eyes?
You think about 1990, Victor, as well, there was a recession in 1990. Wasn’t long. It lasted eight months and then it was sluggish recovery from job losses. There were some challenges then. There were few things that were sided as factors to that short‑lived recession.
There was restricted monetary policy by the Federal Reserve to lower the rate of inflation. Poor consumer confidence, real‑estate collapse, jumping oil prices. These things, we see them come back when we have bumps in the road.
In 1990, after that little recession, it was a great decade on Wall Street. It was a phenomenal decade on Wall Street followed by lost decade on Wall Street.
What are the challenges if you retire with all your money sitting in the market and you’re 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 this little windows and there’s a great difference between starting a few years in between these different recession centers. It have happened or it is different hallmark that it have happened.
Clearly, I wouldn’t advise in 1990 and I didn’t advise people how to get through that depression or recession that way that it happened at that period of time. I would tell you that there’s a lot of information to glean from the concept that these things do happen. It happens at time that people least expect that they’re going to happen.
Then coming into 1990 when one the reasons why there’s a recession is there’s this restricted monetary policy trying to hedge inflation. At the time where interest rates are relatively high. 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 mismanagement when that occurred.
Here’s where we go from there going forward, we expect this things are going to happen. We 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 their money in the market, or having all their money at risk?
It means that there’s a tremendous risk that if it does happen tomorrow, you’re going to have less good retirements than the people that have completely up market for a 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 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 retirements going to be.
If you don’t do that, you’re going to be at risk that if it happens to you, if you caught that wrong calendar period, that wrong frame, you’re 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 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 that could happen that quickly. Look, if it doesn’t happen, that’s OK. The plan still is successful.
If it doesn’t happen, then you’re not on the phone worrying about it. 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 what’s important about putting a plan in place.
That’s why, when we did have a market correction, of course with COVID, we didn’t have any clients calling us concerned that their playing wasn’t going to work. 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, just have to happen 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 know 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 ain’t 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 are going to be fun to work with. Then, have something that probably to consult. We don’t know anything about you unless you give us a call.
We can meet 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. We’ll have a conversation.
You’ll initially speak with Susan, who’s our director of client and business and client strategy. She’s going to talk to you a little bit about what it is we do, make sure you’re a great fit for us, and move you along onto the path.
We’ve 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, how your income investments are positioned, whether or not you’re paying too much in taxes and how your estate plan is set up. You get that all done under one umbrella.
We’d love to do that for clients. Love to have a chance to talk to you about that.
Mark: 856‑506‑8300. Again, there’s no cost, there’s no obligation, there’s no pressure for this. The team’s here to help. 856‑506‑8300. Be proactive, not reactive. Let’s get started today. 856‑506‑8300.
Final thing, just 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 Burners‑Lee. I always thought it was Al Gore. I was mistaken, right?
A lot of things have happened since 1990. Think about your retirement. If you’re retired today, what’ll 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.
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’s 856‑506‑8300. 856‑506‑8300. Victor, enjoy the rest of the week and have a great week. We’re going to do it again next week.
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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 advisor services are offered through Palante Wealth Advisors, LLC in New Jersey and Pennsylvania registered investment advisor.
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