This week on Make It Last Victor and Mark discuss different factors to consider when mapping out your road to retirement.
Potholes in retirement- what are the things you can’t see coming/can’t avoid and how do you plan around them?
Utilizing the right navigation system- how an experienced attorney acts like a personal GPS.
What are some guardrails that you can put on your retirement plan to make sure you feel safe and confident?
Find all of this and more on this week’s episode of Make It Last.
To access additional information, please visit: Are You Paying Too Much In Taxes In Retirement?’ Free Guide
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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 Elliot. Now, Victor has two companies, the Medina Law Group and Palante Wealth. Medina Law Group started back in 2006. You can find out more on our website, medinalawgroup.com.
Palante Wealth came from the clients of Medina Law Group, going, “How can Make It can help us with all of our retirement stuff?” Hence, Palante Wealth came to be in 2014 palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com. Victor also is the author of three books on retirement planning under his acclaimed Make It Last series.
He’s been featured on national television, “The Wall Street Journal,” “The Huffington Post,” “US News & World Report.” Look, Victor’s probably going to say some things today that you’re like, “Wow, I didn’t know that. I’d like to learn more.” Or, “Wait, I don’t have a retirement plan. I don’t know how to build my financial house. What do I do? How do I come up with some help in this area?”
It’s easy. You just call the team, 856‑506‑8300. There’s no cost, there’s no obligation. There’s no pressure, there’s no judgement, 856‑506‑8300. Glad you’re with us today.
Victor, there’s a lot of moving parts when it comes to retirement. Most of us think about our investments, that’s our retirement world. One of the things is a cool kind of analogy, is to compare our retirement planning with building our home.
We’re going to build a financial house today on the program. I know you told your kids the story. “The Fairy Tale,” “The Three Little Pigs,” and “The Big Bad Wolf,” right?
Victor Medina: Yeah. I bet they knew it.
Mark: Back in the day. The wolf would huff and puff and blow every house down, except for the last one. It was made of…What was it made of?
Mark: We had a straw.
Victor: What else did we have? We had sticks. Then, we had brick.
Mark: Then, we had the red brick. Exactly. The brick house, the wolf couldn’t blow it down, because it was strong. That’s what we’re talking about today. How do you build a financial house to get you to, and even more importantly, through retirement?
Let’s get into this Victor. It’s an easy way for us to understand what you do, how you help people when it comes to retirement planning, does it really start with building that strong, sturdy financial house, doesn’t it?
Victor: It does. It’s interesting too, because those people that know me and our clients have heard me talk about the story that was me rebuilding the house that we live in because the house that we live in is an old home built in 1878. We took the thing down to the studs.
We actually found brick in between the studs. That was part of the reason why it was so quiet and stable. The people that were building the house, they said, the reason why this thing doesn’t move left or right is because they put bricks in between it read before they had any kind of plywood.
It is important to have a sturdy house for retirement because unlike opportunities to rebuild things, when you’re facing retirement it’s super important to make sure that the plan that you have in place is one that can withstand time because you can’t go back to work. You can’t go in and add to the pile.
This decision is a crucial decision, and one that needs to factor in all these things about what happens if the stock market takes a tumble in the future. What happens if your care costs increase?
All of these elements that they’re factoring into their planning that everybody needs to be thinking about, they need to build it to withstand the threat of the Big Bad Wolf of retirement. It’s important to make sure that they’ve got a sturdy house.
Mark: All right. You think about it, we want to build a strong fiscal financial house for our retirement. Where do we start?
Victor: First of all, I think that the idea that someone is thinking about this as something that you should do, rather than going into it blindly, or assume that they’re going to pull money from some account when they need living money, that needs to be congratulated, and needs to be rewarded and heralded.
The idea that you want to put a plan in place, or want to build a house around it, doesn’t land for everybody. Not everybody recognizes the need for a way of creating the retirement that is stable and can withstand the rest of time that they need to live.
It first begins with making the decision that they care more about creating a plan than they care about the specific products that are involved in there. We have a way of approaching it with our practice that supports that because for everybody that comes through the process, we create a plan for them.
Now, the plan is a page document that goes through income investments, taxes, and estate planning, each of those four elements. I think that they are all of equal value. I want to make sure that you have great income. I want to make sure that your investments are supporting the income. I want you to avoid paying taxes. You have to have your state plan in place. Each one of them has a role.
It is the idea that they are all in one place for you to look at. The plan is this eight‑page document that reviews all these areas. What it does is help you understand how you can gain a successful retirement. What that means for you is that you have the opportunity to rest easy knowing that you have a great plan in place.
Where do you start? You start by making an assessment of where you currently are, identifying where you want to get to ‑‑ which by the way isn’t as simple as saying, “Well, I don’t want to be poor, or I want a vacation.” ‑‑ but it is about outlining your goals for retirement, and then being able to determine the way that you’re going to get there, which probably dovetails into another concept around building homes. You need a blueprint.
You need some way of building this, so that you know how to create it competently, in a way that it will stand up. You’re going to have the inspectors of life come in and give you your approvals or not. You definitely need that plan to be able to know how to put these things together, because that’s the way that you create and make all of these elements work together.
Mark: You don’t start with a roof when you’re building a house. You better start with the foundation. We’re going to talk about what goes in the foundation, what goes in the walls, what goes in the roof, and all those things, when you’re building that sturdy, fiscal, financial house for your retirement.
Here’s the deal. If you want to talk more about your retirement, income plan, investment strategies, tax‑efficient strategies, healthcare, legacy, estate planning, social securities in the income part, Medicares in the healthcare part.
A lot of moving parts and you’re like, “I’ve never done planning like that. I’ve just looked at my investments and tried to figure out ‘Hey, could I do what Victor said to start with? Pull out that 30, 40, 50, 60 thousand dollars out of my accounts every year and I should be good.'” That is not a plan.
Palante Wealth is about holistic planning for your retirement. If you’d like to call the team and say, “Hey, I’d love to get started. I’d like to hear where you think I am and am I on the right track? Do I need to make a tweak here or there? I like the idea of having a written plan for my retirement.” Call the team. They’re here to help.
It’s 856‑506‑8300. 856‑506‑8300. Again, no cost for this at all because the team…They’re here to help. They just don’t know if they can help till they hear your situation. Why not call?
Find out. Let’s get started. 856‑506‑8300. We’re building your strong, sturdy financial house for your retirement, and as you said, it starts with a blueprint. The retirement plan that you create for your clients at Palante Wealth starts with a blueprint probably, doesn’t it? You don’t come in and say, “In 10 minutes, you’re done. Here’s your plan. Good luck to you and hope everything works out.”
Victor: Not at all, Mark, because it’ll be like showing up with lumber and a hammer, and just start swinging things, and say, “I think that there should be a room over here. Why do we just start building a square?” Nobody would go about doing that.
It’s this idea that a lot of people start with that element of, “I want to go pull money out,” or, “I just want to start moving forward,” or whatever else, without really taking an opportunity to assess, but you’re right.
What we do in our practice is we help people create their blueprint. These blueprints are not uniform, they’re not cookie‑cutter. They are built to the specifics of the clients that we have in mind, because they’re each going to have different goals, they’re each going to have starting resources that are different.
They’re going to have different obstacles that they’ve got to overcome. For that reason, each blueprint is custom‑tailored for them. Each plan that we create is something that is specific to the client that we are working with at that time.
While there are some general principles that needs to be followed, in order to have a successful plan, you have to understand physics, and you have to understand that it needs plumbing, and here’s how heating works.
All of those are uniform in the way that you would build a house. The way that they get implemented is going to change from client to client. We want to follow some principles. We want to make sure, for example, that people have enough income to get through all of their days, that they may able to afford the lifestyle that they have, or recognize that they’ve got to make some adjustments in those areas.
The blueprints always consist of the HVAC, and the plumbing, and the electrical, and the framing off of it. This is similar in the way that we would do our plan. We’ve got the income, and the investments, and we’ve got the tax planning, and the estate planning. None of these can be ignored. None of them can be overlooked.
None of them can just be passed aside. You can’t just look at a house and say, “That house doesn’t need electricity. I don’t want any. Put that in a part of the blueprint.” It’s an essential part of making all these things work together. We do that for all of our clients. It’s the base part of how we create a plan, but it’s also important to know that things change.
When I was rebuilding my home, because it was an older home, as you starts to do a little bit of the demolition, you figure out that there are some areas that weren’t what you expected when you start to peel away the onion. We had a window that was missing underneath the patio, that all of a sudden, it was going to rain that evening.
We had to patch that thing quickly, but we need to be able to have some flexibility built into that. The idea of the plan isn’t that you just follow it, without regard to what you find, but it is a guiding principle to making sure that you create something that is structurally sound, is stable and study, and gets you through retirement
Mark: You were mentioning the HVAC. I have a friend of a friend, and this is a true story. They’re building their second home and they thought, “It’s not going to be as nice as our full‑time home but we want a nice place we can go get away.”
They said, “We’re not going to hire anybody to do it. We’re just going to get the contractor to do this and the HVAC people to do…We’re just going to separate it. We’re going to be in charge.”
They get it done ‑‑ because nobody was talking to anybody ‑‑ and they found out, “Oops, we did forget heating and air.” They had to go in and do it on the outside of the house because it would’ve cost a fortune to go back in and tear through and build it in.
When it comes to retirement planning, all those areas we’ve talked about ‑‑ the income, investments, taxes, the legacy planning and all of that, the estate planning ‑‑ if we overlook any of these areas, there could be major problems, couldn’t there?
Victor: They really can’t. I’ll relay my true story as well, which is when we had the plumber coming in and looking at what was going in. I talked to my general contractor, whose name is Eric. I said, “Eric, your guy Theo…” because it was his plumber “…comes in, and he stares for about an hour, and then he walks out of the house.”
I said, “I don’t know if he’s doing any work, and he comes back in, and he looks up, and he looks left, he looks right, and he walks out.” Eric says, “You do realize the medium that he’s working in, right? He’s creating the stuff that’s going to handle your toilets and your shower. There can’t be any detail that he overlooks.”
“He needs to understand where all of this is going to be flowing, and the direction are going.” It’s a good jumping‑off point to underscore this idea that no, details can’t be overlooked and part of the planning that you do, and it’s one of the reasons why you really need an expert in that area to help. Is the reason why the general contractor brought in his own demolition team to do that stuff.
He brought in a master plumber to do the plumbing and a master electrician to do the electrical work that didn’t try to handle on their own because he recognized the risks involved. If there had been a detail overlooked, that would have been identified by somebody that was an expert in the area and just to anchor it back into the way that I built my home.
The experts that this contractor brought in were experts in dealing with older homes because I already said that our homes built in 1878. They were people who were accustomed to dealing with construction in that time. Similarly, you need somebody who’s an expert in retirement if you want retirement planning.
In other words, the kind of home that you’re building isn’t the vacation home, or isn’t the second home that’s going to be on the shore or someplace else that’s completely different. You have a very specific home that you’re trying to build in retirement, and it makes sense that you bring in people who are really versed in those areas.
You want to be in a situation where you’re like, “I know exactly what this looks like,” and we can help guide you the way but you can need somebody who does that in your financial work, specifically to retirement.
Mark: The Medina Law Group and Palante Wealth serve the Pennington Greater Mercer County, as well as Bucks County. Victor has clients in New Jersey and in Pennsylvania as well. If you would like to learn how the team might be able to help you. Don’t know if they can because they don’t know your situation. They’d love to find out.
They’re here to help, the Medina Law Group, Palante Wealth. They’re here to help you. Give them a call. Let’s get started. There’s no cost for this. 856‑506‑8300 is the number. Again 856‑506‑8300. We’re talking about building your fiscal financial house, comparing it to building your house that you live in, and that’s what we’re talking about today.
One of the most important pieces of the house is the foundation. Not the most exciting to think about when it comes to retirement, but it might be the most important piece. That’s where we’re headed next. Stay with us. This is Make It Last, with Victor Medina of the Medina Law Group and Palante Wealth. We’re back in one minute.
Mark: Glad you’re with us today for Make It Last, with Victor Medina of the Medina Law Group and Palante Wealth. You can find out more on their respective websites, medinalawgroup.com, M‑E‑D‑I‑N‑A, medinalawgroup.com, elder law, estate planning.
Then there’s Palante Wealth, that’s about holistic planning for your retirement, income strategies, investment strategies, tax‑efficient planning. Palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com
I’m Mark Elliot. Glad you’re with us today. Every year we go through those of us that live where it gets cold, and it snows, and then, all of a sudden it gets spring time, and we’re all excited. One thing that always happens are now the orange cones come out because it’s time for the road repair and all of that, the construction zones that we have to deal with.
We always think, how long is this going to last? Why didn’t they plan a little better? What’s the Department of Transportation thinking about?
You think about retirement. There are actually potholes in our retirement. We’d love for everything to be, our roads to be paved with gold and no potholes ever again once we hit retirement, but that’s not how life works. Victor, what are maybe some of these potholes that might be lurking out there and posing a risk to our retirement?
Victor: I know, right? When you come across them, it’s always a pothole that you miss. You are driving around the ones that you can see, but it’s always the potholes that you miss or can’t avoid that end up doing the most damage or hurt the worst off of it.
I think that the way that I would envision or talk about potholes with respects to retirement is looking at what risks there are to your retirement that you can identify. They probably go into some of them in each of the four areas of the plan that we create or see on a regular basis.
For example, one of the things that we see as a risk towards income that is a pothole that people tend to miss from time to time is if there’s a married couple. What happens to their income if one of the spouses dies? How do we make that up? Because most people spend nearly the same amount when there’s two spouses as they are when there’s one spouse.
It sounds counterintuitive, but all the research suggests that’s exactly the case that happens. We think about retirement, some of the potholes that people miss is thinking about their earlier investments as being one bucket of money that they withdraw from.
Not taking into account the risks that are in those investments that could affect the success of their retirement if there is a decline in the stock market in the first few years when they retire, or when they think about income taxes.
Again, thinking about a married couple and factoring in the change in tax filing from married to single, another one of these potholes. Potholes, I would really define as being these things that we can’t see coming or that we can’t avoid and haven’t had a plan around that. That’s how I would think about.
Mark: Now you think when you sit down with your clients, or you do the what if. What if she goes, “Oh right now I’ve got to kill the husband?” [laughs] Because once social security goes away, the lower of the two, if you have a pension, maybe you said, “I’m going to take the whole thing because we’re going to enjoy our retirement,” out of the gate.
If you pass away, that pension could go away. Some or part of it, or all of it could go away. Then you think…
The one thing we don’t think about is taxes. I’ve lost a spouse, and we’ve been married for 50 years, let’s say. What a glorious marriage we had. Now, a spouse has passed.
Now, the government says, “Congratulations on your great marriage, but now, we’re going to tax you as an individual,” so your taxes go up. We get bombarded with a lot of different areas, and that’s part of what you do, and it go through some of the what‑ifs. “What if you have bad health?” “What if this happens?”
“What if you both lived to 100, have you planned for that?” There’s a lot of what‑ifs.
Victor: Yeah, exactly right, Mark. What you’re doing is looking at these potential outcomes, and being able to help devise a plan that helps navigate them. What I often think about is kind of walking through a landmine field and having a guide, identify, “You got to be careful over these, did you explore that area, because you don’t want to step into that area, that could be a problem?” or at least we can see that coming.
That’s part of the value of a guide is having been through that terrain before and can help guide you through success. If we’re thinking about taxes, specifically, those are one of the ones that is a really sneaky negative impacts to your planning.
Those are the ones that we can’t control in the future here, we can’t control what the tax rates going to be, because they can change the rules on us. We can’t control the fact there might be a penalty filing single versus filing married, having the same amount of income, and what the impact of that is.
What we found is that most people end up paying more in taxes in retirement than they need to. We created a guide, maybe what we’ll do here is we’ll give this away. We created a guide that will help people figure out if they’re paying too much in taxes in retirement. What they can do is they can go to the website 920taxes.com.
We’re on 9:20AM. You go 920taxes.com. You’ll be able to download a guide that help you analyze whether or not you are paying too much in taxes and what you can do about it. It’s a great guide that…Nothing comes with it. By the way, we’re not going to hound you, we’re not going to bother you.
It’s purely information that you can use to help assess where you are in retirement. Because I have found in my experience, the taxes are that one area that is often overlooked. You can find any broker is going to talk to you about investments.
You might even get somebody that’s in retirement that will help you about income, but it’s very rare that you have somebody who’s focused in the taxes as well. Then, what we see when we visit with people is that is often an overlooked area.
I want to help in that area. I want to help them realize what they should be focusing on, what planning that they can do.
I want to give them the resource for that, and really encourage them to think about taxes proactively rather than reactively. I think they’re going to have a better retirement for it.
Mark: That’s 920taxes.com for the guide that Victor just talked about, 920taxes.com. Glad you’re with us today for Make It Last, with Victor Medina, I’m Mark Elliot. There’s a lot of moving parts in retirement as we’re talking about.
There are potholes along the way. Victor, when you and Jennifer take the boys, go on a trip. I’m assuming every once in a while you do go on a vacation. You don’t work all the time, do you?
Victor: No, they like to go on vacation. The family does. I like to be on vacation with them, so yes we do go on vacation.
Mark: You think about it, when your grandparents went on a trip, they had a map. Your parents maybe even had a map. Now you, you’re using your phone, using the car’s navigational system, it’s different.
Typically when you’re going somewhere, and you’re going to drive, you come up with a strategy of where you’re going, how you’re going to get there, what’s the route we want to take, whether it’s the fastest or the prettiest or whatever it is.
We come up with a plan by looking at the map, whether it’s an old type [laughs] of map through your Atlas that I still have today. When we think about going into retirement, because we’ve talked about it.
People that will spend more time planning their two‑week vacation than they do planning for that 15‑, 20‑, 30‑year retirement. How many people come in thinking, “Hey, Victor, I’m finally…I’m done with my job. I’m tired of working. I’m ready to retire.”
Yet, they don’t have a roadmap for their retirement. They’re just done, now they’re going to stop and go into retirement, but they do so without an actual plan.
Victor: I mean it’s 100 percent one of the multiple choice options for, it’s probably close to that number.
Mark: When you think about that, that’s what the Palante Wealth team is doing. Putting that holistic plan together, the retirement plan, income investments and taxes, “Hey, what do you need? How much do you need? Will it last as long as you do? What about if this happens? What if that happens?”
I guess not, because we’re a live‑in‑the moment type of a country. That vacation right now is really important. I want to make sure I have a plan for it. Our retirement’s down the road, I can just keep putting it off.
The idea is, the sooner we start on this, that gives your companies a little bit more time to put a plan together. Doesn’t it?
Victor: It does, Mark. When you go through retirement, and you’re going through your working years, but you’re approaching retirement, you’re not really focused on what you’re going to do to change in order to get into retirement.
You’ve essentially created this habit of working, and saving, and getting to that point in time, but you haven’t taken the time to really think through that part of your planning. You’re uncomfortable where your life is. More important to that is that it’s not something that you’ve done before or have a lot of practice in.
When you’re thinking about how to be successful in retirement, you can’t go back on prior activities and be like, “I can do that again and be successful.”
That’s where the value of working with somebody who focuses on retirement and has been there before with tons and tons of clients creating successful planning. That’s where that can be beneficial because what it gives you the opportunity to do is, it gives you the opportunity to work with somebody that can work as a guide, that can be your personal GPS through retirement.
It can be your Waze app. It can be your Google Maps that says, “Hey, there is actually some construction over there. You may want to take a right.” “Oh, did you want to take a mass transit. There’s a train coming and it’s the number six train.” You just go over here, you pick it up and you get where you need to be.
That guide works alongside you, helping you be successful in retirement because you are the one that’s living this retirement life. You are the hero of that story. The guide is there to help you make sure that you’ve got the greatest plan to be successful.
The way that our firm does that for clients is that we use our Make It Last Checkup Plan which is a way of helping you look at your income, your investments, your tax planning, your estate and legacy planning.
Make those things all work together so that as you chart your course through retirement, as you start out on your journey, your road trip, it’s vacations you’re going to take with your family, we’re taking tons of road trips with our family, as you go through that, you have a great map to help guide along the way.
One of the things about these…back in the day when you used to print out the map quest off of it and used to rely on that print out. If you had to take a turn that wasn’t on there, there was no way to get a new map quest, because you didn’t have the printer there. There was no way to get that back.
This is a dynamic planning tool that will give you the opportunity to make some course corrections. If there’s traffic ahead, it will help you reroute and get you to where you need to be.
Mark: Recalculating, recalculating.
Mark: If you go to Victor’s website palantewealth.com, P‑A‑L‑A‑N‑T‑E. Victor says this, “Palante wealth is about holistic planning for your retirement.” What does holistic planning entail?
Victor: Doesn’t it sound like I got paid by the $10 word for whatever it was? It was like a SAT exam that’s coming up. Holistic planning or the reason why we phrase things as a holistic opportunities. I would want to have people understand that when you work with us, we’re actually going to take a look at everything that you have.
Holistic being that we’re going to look at the entire spectrum of your situations. One of the reasons why both the Medina Law Group and Palante Wealth are under the same umbrella, in one building serving you at the same time, because you are best served by having one back phone that you pick up if there’s something wrong and having one area, one phone call that you can make, or one team that you can reach out to help you be successful.
That only works if that one team actually understands everything that you need to be successful in retirement. That includes thinking about your healthcare, your long‑term care planning, making sure your estate plan is in place, how about asset protection if one of you needs to go into a nursing home, making sure your income is right where it needs to be.
Making sure your investments are properly allocated, helping you plan for taxes, not at the end of the year when you’re filing your taxes, but before the year begins.
All of those things together is a part of a necessary ingredients for the recipe for success, where you’re going to be working with somebody who’s holistic but also a fiduciary advisor, somebody who’s working in your best interest and helping you understand what best choices you have.
Those parts, independence, fiduciary, holistic, all of that together is how you are best served in retirement. It means that what you’re going to get at the end is a plan that will help you successfully navigate, and have a partner in retirement. It will help you rest easy.
Everything about what you’re doing is to enjoy the symphony of retirement. Sit back and listen to music and not necessarily be the conductor that’s out there waving their hands all the entire time. Sit back and enjoy the music of it. If you’re working with somebody that looks at everything that would be part of a successful retirement plan.
Mark: Let’s finish the segment up with a couple keywords that you just talked about with your companies. Independent and fiduciary, can you explain that?
Victor: Yeah, I can. If people think about traditional financial advisors or people who call themselves financial advisors, most of the time they are hired by a company that controls what they do. This would be for the largest broker chassis that are out there.
The common household names that you would look at, all the bulls in the mountains and the mountain lions and everything that’s out there, you look at those big entities. The “financial advisors,” which I use air quotes around that, that work for them, are told by those companies, what they can do.
They are not independent. They’re told what investments they can recommend. They’re told what investments are in the menu. They’re told how much advice they can give them, what they can help them with. They constrain their activities. That lack of independence means that you’re not given options from the entire world of options that are available.
It’s going, they’re saying, “Well, listen, I want a car.” When you walk into the Honda dealership, and you say, “Well, what kind of car should I buy?” The Honda salesperson says, “You should buy a Honda,” because they’re told what they have to sell. It’s just what’s on that lot.
Whereas if you work with somebody that might be an independent, they might say to you, “Well, what kind of car do you need?” They say, “Well, besides it having four wheels, I’d like to tow my boats.” They’ll say, “OK, great. So now we can look at different kinds of trucks that have good towing ratings.”
It helps you arrive at the right answer for you because that independence allows you to choose from the best things that are out there, and not necessarily the things that are on a prescribed menu, or told that you have to do. That’s the independence component of it.
Fiduciary component, it’s this weird world where I, as starting out as a lawyer, only know one way that I have to be with clients because I have to work in their best interest. It never occurred to me that there would be any other way to work with clients except to work in their best interest.
In the financial world, as I started getting into that, I learned that the vast majority of people who work in there don’t have to work in their clients’ best interest. They don’t have to recommend the things that is best for them. They have to recommend something that is good enough. It has to not hurt them.
It doesn’t have to be the best thing for them. When you are bound to recommend the thing that is best for somebody, that is called a fiduciary obligations. You have to put their interests ahead of your own. It’s strange to me that I had to choose to do that. I could have chosen something else.
It’s strange to me, because I know that I have to do that as a lawyer, and why wouldn’t I do that as a financial advisor? When you work with us, you work with us under the umbrella of being a fiduciary for our clients, which we think is the only way to do work with somebody is to put their best interests above your own, make the best recommendations.
Then, because we’re completely independent, meaning that we can choose from anything out there, that means that the recommendations we’re making not only are the best and affordable, but we can give them to you because we’re not restricted in what we can offer you.
We can offer you everything and it’s out there. Then we recommend the best thing for you. That’s the way it all works together. It’s crazy that I have to explain this, Mark. But yes, there we are.
Mark: I’m glad you did, because those are important terms. When you think about your retirement, because there’s a third layer to this, independent, certainly important, now it’s shopping the market or the insurance world or whatever tools you need for your retirement tool belt.
They’re not limited to a company. They have a ton of companies at their disposal to find the right tool for you. Then the fiduciary standard, morally, legally, ethically obligated to do what’s in the client’s best interest. Makes perfect sense, but most advisors don’t work under that standard.
They work under the suitability. It’s just got to make sense, it can’t hurt you, as Victor said. The third level of this though is you work with that financial person, and you want to talk retirement, shouldn’t they specialize in the retirement world?
Independent fiduciary and retirement planning, that is Palante Wealth. That is the Medina Law Group. They’re here to help you and your wishes and needs and desires come first. How can they help you? That’s what they’re here to do. If you’d like to talk more about your situation with the team, 856‑506‑8300.
856‑506‑8300. Again, there’s no cost or obligation for this at all, 856‑506‑8300. We started talking about construction zones. Those come about in the spring. They go forever through the summer into the fall, it seems like.
But, we’re always having to dodge and dart and try to get around them and how do we figure out a better way to get to work because there’s construction on this road and that road. The other part of this, when we’re on that trip, we go over a little creek for example, and it’s a one‑foot drop off. We don’t really care if there’s a guardrail or not.
Mark: When we go over the Golden Gate Bridge, we’re glad that there’s [laughs] rails in place, so we don’t go over the side. How do we put guardrails on our retirement? That’s we’re going to talk about next. With Victor Medina, this is, Make It Last.
Mark: Glad you are here with us today for Make It Last, with Victor Medina. Victor has got Medina Law Group, medinalawgroup.com, M‑E‑D‑I‑N‑A, Medina Law Group, estate planning, certified elder‑law attorney. They can help you with all of the estate planning, legacy planning. Then there’s Palante Wealth, which is about holistic planning for your retirement.
Victor’s a certified financial planner professionally, a registered investment advisor, operates under the fiduciary standard. He’s independent. We’d just explained that at the end of the last segment, palantewealth.com, P‑A‑L‑A‑N‑T‑E.
Now, easy thing to do is if you want to find out more about your estate planning or your retirement plan, you can call the team and say, “Hey, I’d like you to look at this. Am I on the right track? Do I need to make a tweak here or there? Can I retire? When can I retire? While my money lasts? As long as I do?”
Those are big questions. “Will my loved ones be OK if something happens to me. How do I want to leave things?” The teams can certainly help you. 856‑506‑8300 is the number, 856‑506‑8300.
We started talking about construction zones. We always know once you get through the winter, here they come, those orange cones, we’ve got to dodge and dive. I hate being on the interstate, Victor, where you’ve got five miles of cones, and you’ve got 20 yards of work being done.
Mark: It seems a little overkill, but I get it, they’re doing it for the safety of the worker. I’m on board with that. There are times we get a little maybe we don’t like what we’re seeing in the construction world. What’s the Department of Transportation thinking about?
When we were on that trip, and you said, you, Jennifer, and the kids, and you go on trips, and you’ll drive to go places and all of that, the guardrails are there, and you feel a little more comfortable going over a pie bridge, for example.
If we’re on the Golden Gate Bridge, it’d be a little nerve racking if there’s no guardrails in place. If it’s just, there’s the edge of the road and then there’s the fall off [laughs] all the way down, we don’t like that.
Guardrails on a bridge are there for a reason, they keep you from tumbling over the edge, obviously. You feel better, more comfortable driving over that bridge because the guardrails are there. How do we get that confidence with our retirement plan? Are there guardrails we can put in place?
Victor: Yeah. You definitely want guardrails in elements of your planning, because they are things that are going to visit you that you can’t control. Maybe they’re not going to visit you for certain, but if they do, they would really, like a gust of wind, brush you across the bridge and you have a risk of falling out.
Because I don’t think that anybody crossing the bridge decides that they’re going to drive off the edge. I don’t think anybody thinks that there’s going to be something that’s going to takeover the wheel and have them not try to drive straight. Everyone’s going try to drive straight.
There are things that can change, that we can’t control. The guard rails help us gain that confidence by protecting us against those situations. There are three things that I look at as potentially gusts of wind that can push you over the edge, where you want guard rails in each one of those areas.
You want a guardrail to help you protect against living too long. We are going to call it longevity.
This idea that your money has to last a long time in retirement, you want a guardrail against that. One of the ways that you do that is you rely on some guarantees from an insurance company to pay you an income stream for the rest of your life.
Now, this may or may not bring you up to your full‑spending level, but it will help protect you against getting blown off the edge where if you keep living longer and longer and longer, there’s no more money because it was all in investments, and somehow you lost it.
These guarantees, which are all backed by the financial strength of the insurance companies, will allow you to have a check for as long as you live. More importantly, it will help you have a check for a spouse as well. They have a way for there to handle longevity for both of you.
That way, you’ve got enough money through that. That’s one area where you’re going to need a guardrail where we’ve got one gust of wind. Another area that you want to have control for is healthcare, and specifically, the need potentially for long‑term care.
They’re actually two sides of the same coin, as everyone is aware, the costs of healthcare are increasing almost in double‑digit figures on an annual basis. It’s getting more and more expensive to provide healthcare for people, which is one of the reasons why everyone has had to start to contribute to their healthcare costs, and the company doesn’t bear that all on their own.
When we think about healthcare, we want to make sure that you’ve got a great way to supplement the healthcare that you’re getting in retirement. For example, if you’re on Medicare, you want to make sure you have a great Medicare supplement that helps you cover some of the extraordinary costs that are going to happen from time to time.
Then similarly, as you get older, you want to make sure that you have a great long‑term care plan in place.
I’m not just talking about long‑term care insurance because that may not be appropriate for everybody. You want in your plan to make sure that you are accounting for whether or not you need long‑term care, like what are you going to do? Can you safeguard assets with some trust‑based planning?
On the legal side, can you use a long‑term care insurance policy and maybe one where you’re not just throwing money into a pit forever and ever, but maybe something where you have limited payment, and then you can get that money back when you die because there are products that are like that.
That way, you’re not throwing that money away. You want to think about healthcare as a gust of wind that could blow you over, and put some guardrails in place to help protect that. Again, you’re driving over the bridge with confidence.
Then, the last area that is important is in taxes, and specifically wanting to make sure that the change in tax rates in the future, or the change in tax filing status, if you go from married to single doesn’t impact your retirement in a way that is catastrophic, negative or will cause you to have some failure in your entire plan.
We want some guardrails in that. Sometimes the guardrails are about eliminating tax liability by paying all of the taxes that you might be doing account and then getting into tax‑free investments to make sure that you don’t have that risk going forward. It’s almost like a permanent guard rail against one of those gusts of wind.
Actually, in that vein, Mark, what we’re going to do is why don’t we go ahead and offer a download that I’ve created called, “Are You Paying Too Much Taxes In Retirement?” There’s a website dedicated for that. It’s called 920taxes.com.
It’s a five‑minute read, but it will help you perform in retirement‑income analysis that will help blunt the tax bite in retirement. That’s absolutely free, no commitment. We won’t hound you afterwards.
It will give you an opportunity to download and start the conversation on how to create a guardrail in your plan again specifically in taxes and again, that’s at 920taxes.com. Simple download, it’ll help start the conversation around that.
Mark: There’s no cost. There’s no obligation for this, either. It’s Victor and the team wanting you to start doing your own due diligence when it comes to your retirement, some of the areas, those gusts of winds that you need to be prepared for 920taxes.com Glad you’re with us today for Mae It Last, with Victor Medina.
I’m Mark Elliot. There’s a lot of moving parts in retirement. One of the things I always think is interesting is we go from our working years, where it’s all about growth, to retirement, where it’s now about income. Can we replace those paychecks that are no longer coming in, and we need more money?
Inflation is certainly a factor. If you needed $5,000 a month right now to retire, that’s 60 grand a year. In 15 years, you might need 7,500 a month. Now we’re over 90,000 a year.
You need income that grows with you because of inflation. Is inflation something…It’s really low. Jerome Powell said, “Hey, we’re going to try to get inflation up to around two percent.” The 100‑year average is three percent when you look at inflation.
We know late ’70s, early ’80s, it was the hyperinflation of 15 double‑digit interest for interest rates and inflation. Is inflation, something we need to pay attention to now?
Victor: It is something that you need to pay attention to now, Mark, because even if it’s not affecting your retirement plan immediately, it will affect your retirement needs on a compounded basis over time, meaning these slight increases in one, one and a half percent per year are going to add up.
If you have a retirement, that’s 20 years plus, by the time that you get to the end of that your need for income is going to look very different at that point in time than it was when you first retired. One of the ways that you do that is by taking the investments that you’d have and having different purposes or needs for them that they are serving.
You’ve got some need for money that helps you pay for money right now. You also have a need for money in the future, which is there to help make up the increase in the cost of living, that is going to happen over that time. You need a strategy around that.
It is important for you to take into account with a way that inflation is going to affect your purchasing power. It’s not something that you don’t have to fix the problem right now, but you have to take into account how you’re going to fix the problem today. Because what you want is a result that you can count on in the future.
It’s definitely an element of the planning. Most people overlook that until it’s too late. They’ll do a calculation and say, “I just have to take four percent of my income and my investments earn out my income for the rest of my life.” Hold on a second, four percent today is worth a lot more than what four percent is going to be in the future, especially in terms of the purchasing power.
How are you going to make up that difference? It’s a necessary thing to take into account in the planning, and most people do overlook it. I would definitely recommend that people take a look at that and do some planning around it.
Mark: You think about the three areas that Victor talked about that you need a guardrail. You need to have some safety and protection involved, longevity. Now, all of us would love to live to whatever age, and we’re in good health.
Then, when we’re not, that we go to sleep, and we don’t wake up. That would be the perfect scenario. We don’t really control that. Longevity is an issue, how do we plan for that? What if you do both live to 100? Will your money lasts that long?
Longevity is a factor, healthcare, we don’t know if we’re going to have a health issue or our loved ones are going to have a health issue. Those things can pop up out of nowhere. What if you need a plan? What about taxes? We’re pretty confident taxes are going up.
If taxes are much higher 10 years into your retirement than they were when you got into retirement, how will that affect your money lasting as long as you need it to?
There’s a lot of moving parts in retirement. Victor and the team at Medina Law Group and Palante Wealth are here to help. All you have to do is pick up the phone, there’s no cost, there’s no obligation. It’s 856‑506‑8300. Again, there’s no cost. Why wouldn’t you pick up the phone and find out where you are and your road to retirement? 856‑506‑8300 is the number, give him a call.
Mark: Let’s get started. The best time to start is right now, 856‑506‑8300. Glad you’re with us today for Make It Last, with Victor Medina of Medina Law Group and Palante Wealth. We are headed to our final segment right after this. Stay with us.
Mark: Welcome back to Make It Last, with Victor Medina, the Medina Law Group, and, of course, the Palante Wealth. The Medina Law Group is here to help with your estate planning, certified elder‑law attorney. Victor is, as well. They can help you in all those areas.
Palante Wealth is here to help you with your retirement planning, your holistic retirement planning, longevity, taxes, healthcare, whatever, investments, income. How do you handle that? How much income do you need? How much can you replace with guaranteed stuff like Social Security and pensions.
Most of us don’t have a pension, so where’s our income going to come so we can retire, and retire the way we want to? What about our investments? Do our investment strategies need to change when we get into retirement? Maybe. Maybe not.
Everybody’s situation is different, but that’s a big part of it. Then, taxes, of course. We think taxes are going up. We need a plan for that. Not looking back like we do every April or May or June. [laughs] We have pandemics.
Typically, every April 15th, we do our taxes. We haven’t done it by then, and we’re looking back. Our CPA’s looking back a year. We’re historians.
When it comes to retirement planning, they’re looking forward. What about taxes? Where are you going to be in 5 years, 10 years, 15 years? That’s using the knowledge that Victor and the teams have put together, the team he’s created. Because they don’t know exactly where the tax codes are going. They’re not setting those brackets.
They’re not setting those laws, but they know we need a plan in place. If you have any questions about this, you want to sit down and chat with the team, you certainly can. 856‑506‑8300. If you’d like to find out more about the Medina Law Group, M‑E‑D‑I‑N‑A, medinalawgroup.com. About the planning side of retirement, that’s Palante Wealth, palantewealth.com. P‑A‑L‑A‑N‑T‑E, palantewealth.com.
We’ve been doing this show now for a while. Victor, we’ve got some mailbag questions. These could come from anywhere. Back in the day, we’re getting back to the point where Victor and the team could do seminars. Go out and have people come into their business. They’d go out and have a dinner.
There are website. We can go to the website and ask them a question. You can call the team and ask them a question.
We’ve taken some questions that we’ve picked up here in the last month or two. I’m going to give you a question and then you answer it if you can. Because this is what happens every week when people come in and sit down with you. They’ve got questions, right?
Mark: Good luck. Good luck to you.
Mark: All right, our first question comes from Roger in Yardley, PA. “Victor, I’ve had a steady corporate job for 35 years. My wife has taught piano lessons since we were married in the early ’80s. Her job helped us pay for groceries, gave us some extra money to put away for the future. But she does not have a job with the 401(k) or insurance benefits.
“How can I make sure she will be OK if something happens to me?”
Victor: That’s a good question. Roger, thanks so much for listening. My heart is where your wife is, because I love playing the piano and I love receiving piano lessons. I had probably, I think, some form of your wife when I was growing up. The biggest risk that Roger is facing…
Roger, if you’re listening, the biggest risk you’re facing is that you don’t have any contributions in your wife’s name towards Social Security. She hasn’t been accumulating a Social Security record that she could claim on her own, which makes it hard to count on the number.
We’ve got some good news for you in that world, which is one of the benefits that is included in the Social Security claim is that if you are married, you can claim up to half of what your spouse is getting as your own benefit.
Roger, if your benefit looks like it might be $3,000 a month when you retire, your wife can get $1,500 a month just because she’s married to you. So that’s a very helpful benefit. The two of you, together, can be bringing in $4,500 per month in Social Security. This is just hypothetical figures, but you understand where I’m going with that.
There is a benefit for Social Security even though she hasn’t been contributing towards it, and having a Social Security claim record of her own. That said, there’s also have a risk that you have to help manage. One of them is that when one of you dies, specifically when you die, you’re going to lose some of the Social Security.
We have a slightly good answer here, which is that your wife can actually take your Social Security number as her own number. Meaning, that she can bring in $3,000 per month. She can claim that as a survivor’s benefit in Social Security, but she did lose her $1,500. She’s going to have her money go down, and this is where we need to create a plan for you.
You need to have a plan of how to make up that extra money if you were relying on that extra $1,500. We need to have a plan for how we’re going to make that up. That could include the use of life insurance that pays out at your death, that makes up for that money.
It can be about segmenting your investments so that we have some part of your investments that are meant to turn on as an income stream after you die, that we’re not using right now, but it’s a way of making that up. In some form, we have to make that up.
Also, taking into account taxes because once you die and your wife is left, she’s going to file single, there’s going to be higher tax rate. It is a problem that you have, but it’s not a problem that’s insurmountable.
There are elements that can be helpful about this ability to claim half of the Social Security. There elements that you need to put a plan in place in order to help protect against a future that we can see coming, which is that you might die before she does, and how will that affect your planning?
How will that affect her ability to have a good quality of life? It’s a good question. There is a solution, but you do have to get planning started in order to be able to do that.
Mark: Roger, all you have to do is call the team. Victor and the team are here to help. 856‑506‑8300. No cost for this again. No obligation, no pressure. 856‑506‑8300. Next question, Victor, comes from Sharon in Flemington.
“Victor, my husband and I just started getting serious about preparing for retirement. We started going through all of our monthly expenses, and it was really eye‑opening. I had no idea where it was all going each month. What should we do now?”
Victor: Well, thanks also, Sharon, for being a listener. It’s funny, we never know what’s kind of going out the door? I feel like this is the time in history where we are going to get monthly billed to death? There’s always some service. Everyone always wants to charge us. Some monthly amount. I think, there’s actually an app that helps you go through and eliminate some of these.
Let’s just say for a moment, Sharon, most of these expenses are valid ones. You are going to want to first, make an assessment of which of these do you need in retirement or do you want to continue, and which of these can we let go? Because sometimes we have this bloat happen, where because we can afford it, we’re spending it.
It’s not really something that’s necessary. One of the most telling signals to successful retirement is your savings rate. No matter what you’re making…It’s not about the balance that you have in retirement, by the way. There’s been lots of research in this area. It’s not about the balance that you have, how much you have saved in retirement. It is about your savings rate.
If you are a family that is actually saving at least 15 percent of what it is you’re making, your odds of being successful in retirement go way up. Just because you’re used to living on less.
As you and your husband starts to think about how you’re going to navigate retirement, one of the things you can do is move to a higher savings rate by getting rid of some of these. And making some decisions about what needs to be there in retirement, what can stay. When I say needs, there are also some parts of your retirement that is about you enjoying it.
We want to break down these expenses into two different buckets ‑‑ this necessary and it would be nice to have or what we’ll call discretionary expenses. The necessary expenses are going to be ones that we have to meet come hell or high water, which means that we’re going to have to create a plan where we have some guarantees around bringing that money in.
That might be using a form of Social Security, that might be using a pension if you got one, it might be allocating some of your investments towards a guarantee of income and allocating it towards that necessary bucket.
The reason why we want to do that is we want your necessary expenses to be things that are absolutely rock solid in retirement. It won’t matter how long you live or what happens to you, you will be able to meet those necessary expenses with guarantees.
Now, when it comes to the discretionary bucket, one of the things that we can do is look at your investments and look at how much you have saved, and try to figure out how we can meet those discretion. We want you to have a great retirement, you want to have a great retirement.
We’ve got to do an analysis to try to figure out, can you meet those discretionary expanses and for how long and how safely from then? We’re lucky, we mostly work with people that have got really reasonable expectations for their budgeting in retirement, and Sharon, you might fall into that bucket.
We don’t know what numbers you’re working with right now. It may turn out that your situation looks like one where it would be successful. Here’s where we have to dive into the specifics of your planning to get that answer.
This is one of those areas where you have to come in. We have to look at your investments. We have to look at what you have. We have to look at your expectations and start some performance analysis around whether or not you’re going to be successful.
Now, we call that the Make It Last Checkup Plan, which is where we look at your income investments, taxes and estate planning, and give you an assessment of what’s in good order. Look at what needs addressing, some of the areas where it might not be in such good order, and then give you our recommendations about how to fix that.
We do that for people at no cost. What happens is if you want us to implement that, then we become your advisors, we can go and do that. We take that next step afterwards. The evaluation comes at no cost and no obligation whatsoever.
If you’re interested in doing that, Sharon, it would be a good time to start that conversation because you’ve done some of the work already by looking at your budgeting. Now, you just need the other half of where our expertise can come in by telling you the answers about whether or not you can be successful.
Mark: 856‑506‑8300. Sharon, an easy thing to do, just pick up the phone, no cost for this, 856‑506‑8300. I’m going to give you another question. You’ve got less than a minute. Good luck, all right?
Mark: This comes from John in Newton, PA. “Victor, I’m single, and I’m planning a relatively simple, quiet retirement. I’ve done most of the traveling that I wanted to do. I only have one or two places I’d like to see someday. If I don’t have anything big planned, is there really that much I should do for a retirement plan?”
I gave you a easy one because he said there’s not much to do.
Victor: Of course, everybody thinks that their situations easy as you give me the one that looks like the easiest for lightning round, but it’s not. Look, John, there are a couple of things that you have to take into consideration in your planning even as a single person, and this really falls into the estate planning world that is related to the retirement.
Here’s what I mean by it. You need to create a plan that helps you in case you become disabled, or if you get sick in the future. No one’s planning on that, but because it’s just you, and because you’re just relying on yourself, you need to think about who’s going to be your power of attorney agent, who’s going to help you make healthcare decisions.
If you need an assisted‑living facility, because you can’t stay home with a spouse that’s going to be providing care for you, how are you going to get that care and how are you going to afford that care?
As you can see, in just about 30 seconds, we outline at least three major reasons why you still need a plan, John, even though you’ve got a very simple situation of just being a single individual and not looking to do too much.
There are a few things that might be coming in the future that could knock you off of your intended plan. We need to have a way to navigate that if we have these situations come up, and that’s where their planning comes in. It’s still important, even for single people that don’t want to travel. How I do?
Mark: You did good. John, number 856‑506‑8300. We appreciate the questions. We appreciate you listening to Make It Last, with Victor Medina, the Medina Law Group and Palante Wealth. Again, if you need some help, you’re not sure where you stand when it comes to your retirement or your estate planning, the teams are here to help.
The number, 856‑506‑8300. Appreciate you being with us today for Make It Last, with Victor, we’ll be back next week so have a great week, everybody. We’re back with more next week right here on Make It Last, with Victor Medina.
Advertiser: Taxes are just a fact of life. You can’t avoid it, even in retirement. But what if I told you there are ways to minimize what you pay in taxes? Victor Medina and his team can help. To learn more, visit 920taxes.com to get your free copy of Victor Medina’s tax guide. 920taxes.com. That’s the numbers, 9‑2‑0‑taxes.com.
Mark: Palante Wealth Advisors are an independent financial services firm that utilizes a variety of investment and insurance products. Medina Law Group is an independent estate planning and elder‑law firm. Investment advisory services offered through Palante Wealth Advisors LLC in New Jersey and Pennsylvania registered investment advisor.
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Transcription by CastingWords