Make It Last – Ep 176 – How to Install Retirement Guardrails

Listen here!

This week on Make It Last, Victor and Mark discuss financial literacy and share the top topics people are struggling with so you can understand!

It’s springtime, which means highway construction is on the rise! Just like it’s important that construction workers install guardrails on the highway, how can you install guardrails on your retirement? Victor and Mark will give you all of the answers you need!

Are You Paying Too Much In Taxes In Retirement? Click here to find out.

We help you take control of your financial future, visit www.palantewealth.com to learn more!

Also available on SpotifyApple Podcasts, & Google Podcasts

Make It Last is hosted by Victor J. Medina, a Certified Elder Law Attorney (CELA®) and a Certified Financial Planner (CFP™). Founder of Medina Law Group & Palante Wealth Advisors, Victor and his companies are dedicated to empowering people through education about estate planning and their finances.

Full Transcription Below

Mark Elliot:  Welcome to “Make It Last” with Victor Medina. I’m Mark Elliot. Victor of course has two companies, the Medina Law Group and Palante Wealth. Victor focuses on traditional estate planning, asset protection, retirement distribution, proactive income tax planning.

Here’s the deal, it’s about the Make It Last plan. You need an income plan. Your paychecks are going to stop when you get into retirement. Where’s your income coming from? Your investment strategies, super important as well.

Taxes. We know taxes are getting ready to change at least by 2026, if the Biden Administration does nothing, so tax efficient strategies are super important. The estate planning, all of that is a part of the Make It Last plan.

Again, if you want to talk with Victor and the teams, they’re here to help 856‑506‑8300. There’s no cost. There’s no obligation. 856‑506‑8300.

Victor, we’re going to talk financial literacy. I am 62, which means I should be financially literate.

[laughter]

Mark:  The problem is I am not. I think a lot of it is that in high school, it was maybe a general business class. The algebras and calculus and all that kind of stuff, geometry, I wasn’t into that. I was a sports guy, loved to play sports, didn’t really see the point of these two letters equal this letter. I didn’t see the point in that.

The actual stocks and bonds and mutual funds and the insurance world and all those things, I never really was taught that. My dad was a long‑time coach, so I didn’t really get that kind of information. I guess I’m behind the eight ball.

The numbers are out from the American College of Financial Services. 89 percent of female participants flunked a 38‑question quiz.

Victor Medina:  Wow.

Mark:  72 percent of men failed the quiz. I have no doubt I would fail the quiz.

Victor:  [laughs]

Mark:  I have no doubt you would pass the quiz. What’s your thoughts on this?

Victor:  I think I would’ve failed the quiz before I was a financial advisor as well. It should be mandatory in the classrooms, that we should have some form of an education requirement that you have some basic level of financial literacy.

Actually, my oldest…Well, the school where my oldest and my middle go to, but my oldest is a senior now this year, he has a Horizons project.

It’s interesting. At the end of the year, what they try to do is give them some life skills along the way, and say, “This is how you’re going to cook an egg and how you do laundry.” They have a component of that that is about financial literacy, and I volunteered to come teach some aspects of it.

Even in the world of financial literacy, there is what I would consider to be good thoughts and good ideas, and ones that are popular but may not help, as part of your overall planning and what people should be doing.

We have these more advanced strategies that we work with people in retirement about, embracing where taxes are so that we pay the lowest amount off of it and not following the conventional wisdom to delay it as long as possible.

There’s a lot of things that go wrapped into that. The basic financial literacy does become a function of what your life status is and what you’re exposed to. You talk a little bit about your dad and what is it he did.

I got to be honest, my parents did well. They weren’t people that spoke to me about financial literacy. I kind of absorbed it watching them. They would never sit down and have those conversations.

I suppose there’s an occupational hazard for what I do because my boys do get them. I took a road trip recently with the older two. We spent some of the dinners and the drives in between the cities. We did a tour of Texas. It was about 3 hours between the cities that we went. We went to Houston, Austin, and then Dallas.

We took some of that time to be talking about some of these concepts because I find it’s important. It’s important to share that information with them. I’d love to give them this test, by the way, to see how far along the path they are. How good of a teacher I am, let’s say, and how much I have left to go.

I would love for them to see how they are on that. It doesn’t surprise me that the majority of people don’t pass it because this is not something that we stress as an education point in our community.

Mark:  Are there any topics, maybe, or areas of the financial world that you find most people struggle with when you’re helping them come up with that Make it Last plan for their retirement?

Victor:  I would split this up into two different answers, Mark. The first answer that I would have is that as we create a Make it Last plan, there are concepts about advanced tax planning and embracing, let’s say, conversions out of an IRA, that run counter to the conventional wisdom because they’ve delayed this. They deferred it. They hate taxes. They don’t want to pay any portion of it.

Then we can illustrate for them why they might want to pay some today because they’re at lower rates. That’s something that we have to educate people on that are already financially literate. They know how to save. They know compounding. They understand diversification. They get all of those concepts.

When I start to introduce things like proactive income tax planning where we’re going to proactively move money out of the IRA before you’re required to do so and why that’s beneficial. When I talk about tax allocation strategies, we take assets and we locate them in the right account so that they’re being taxed the right way. That’s an advanced topic that I got to spend some time on.

I find that’s pretty consistent because we do things at a high level. If we were going to back up to that and we were thinking about concepts that…Like, if I’m talking to my kids or I’m talking to other people. I had a nice enough friend of my oldest give me a call because she was concerned about financial literacy.

This is a great example of it because she was raised in a community that was not stressed. She came from a lower socioeconomic status. She’d been the first person to go to College. Bless her heart because she was wanting to learn. She knew this is what I did. She asked Hayden. She said, “Hey, Can I talk to your dad?” Because she wanted to have the right ideas in place.

I think that in today’s world, some of the things that gets overlooked is living below your means and well below your means so that you have excess in your cash flow. We’ve got income, we’ve got expenses. We want the excess there. Then how we save and invest that so that it grows to something in the future.

There is a book called “A Psychology of Money'” by Morgan Housel. One of the lessons in there is how the rewards that come from really great discipline around finances are actually the things that are seen as a function of time down in the future. Staying with that for a long period of time, it can be very difficult for people that are making these short term sacrifices for a long term benefit.

To answer your question, I think that those are the two things that I would see as being relatively consistent. It’s that people of preretirement need some of this basic level of their understanding and people postretirement and the plans that we create are learning about these advanced topics along the way.

By the way, if this is you, if you’re listening now and you’re like, “Well, what advanced topics is he talking about? Is there anything that I’m missing?” I have an opportunity for you learn more about that. We can help you create a plan and see if there’s something that we can introduce as part of your planning, that can help you with your retirement, that can enhance your picture.

We just need you to reach out to do that. If you give us a call at 856‑506‑8300. That’s 856‑ 506‑8300. Just reach out to us and say, “I’d like to learn more about these advanced planning strategies.” We can make an introduction and see if we can help and see what your plan is for you. What could we fix and how we can help you.

Mark:  Absolutely. I like that idea to maybe help us make better decisions. We can’t do anything about what we’ve done already, but we certainly can make some adjustments maybe to put ourselves in a better position going forward. Victor, when you were growing up, did your mom and dad drive you on vacations? No, you said you had a single mom.

Victor:  Well, she did get remarried when I was five. I was with an intact family, with my stepdad. We did do a few road trips. There was a period of time where we were out camping and we made that a regular thing that we do. We weren’t a big flying family except when we went to Puerto Rico to visit family there. We did some driving.

Mark:  That’s perfect then. I remember my mom getting mad at my dad because he would not stop and ask for directions. “I know where I’m going. We’re going to get there.”

[laughter]

Mark:  That’s how men are. We we’re going to get there. That was before, obviously, we could put our maps on our phone. We actually had an actual map. Men and women think differently. There’s no question.

Researchers in this study from The American College of Financial Services said men often claim to have higher levels of knowledge and then test poorly. Women’s self‑reported knowledge is more aligned to their actual literacy scores. Women are being more honest about what they don’t know when it comes to finance. What’s your take on that?

Victor:  Yeah, pretty consistent with my experience.

[laughter]

Victor:  [indecipherable 8:09] the people that become our clients, but I will find every once in a while I’ve got a particularly boastful husband that comes in and absolutely knows everything. I have to be quite delicate about the way I reintroduce him to facts as opposed to what his opinions are.

There’s overvaluing, this bravado that comes in. I think my wife would be the first person to tell you that I probably exhibit some of that in the home repair area. I really know my stuff around replacing outlets or something along those lines. I’m probably as guilty as anybody else.

I really do appreciate the folks that are honest about what they don’t know, because it does give us an opportunity to focus on those areas. We are a big believer, both in the legal and the financial world of our planning for people, of investing in education so they can get empowered to take action and that part of it.

So much of it is strange. If we’re talking about legal documents, they’re not lawyers, they don’t write them, but if we’re talking about retirement planning, they haven’t gone through retirement before. They don’t know those strategies at all.

If we can get some heads up about what they know already or where they feel real honest assessment, Mark, about where they are, then we can focus on those areas that we can build up in their knowledge base. As we start to move forward with this plan, that they understand what’s going on and they can grab, hold with it and say, “Yes, this is the direction that I want to go.”

That’s the big part about what we do with our planning is we really focus on those areas that they need. It’s always customized to them and spending that time, educating people so that they understand why we’re making the recommendations of what they need to be doing.

They’re in charge, we’re just helping them. It’s their retirement, they’re the conductors, and we’re just there helping them play that music. The more that we can do that, the better off the clients tend to be. I really do enjoy that candid, transparency and honesty when it comes to that.

Mark:  I would think that when your team sit down with a couple, for example, or you sit down with an individual, maybe single, widowed, widower, divorced, because you deal with couples and you deal with individuals as well. Again, it’s 856‑506‑8300. I would imagine there’s a different planning process when you’re dealing with a couple compared to an individual.

Victor:  There’s two things that factor into that. The first is the real practical nuts and bolts, meat‑and‑potatoes things that we need to deal with because they file taxes differently. When it comes to long‑term care planning, it’s likely that they’re going to have a caregiver and their spouse available, and so we have to think about things very differently.

There’s also the softer side of what is it we do. Part of the reason why so many couples do enjoy working with us is that we’re able to speak the language of the person that we’re across from. Sometimes that means that we’re focusing on some elements for one for the pair and then other elements for the other.

It’s not always breaking down around gender lines, but I know that there’s a lot of comfort that our clients get if the person who’s been the financially savvy spouse comes in and does planning with us, because then they know that we’re going to be able to take care of the non‑financial savvy spouse as we go on.

It’s the same thing on the legal planning. They’re comforted by the idea that they’ve had this relationship with us and that they’re going to be OK.

The most heart‑warming of memories that I have on this is I’ve had a relationship with a client. We were dealing with them. There’s actually a sudden death by the husband. He has some health issues when we met but not anything that would have thought that we were going to have pass away early. We just put that plan in place maybe about two years, and he unexpectedly dies.

When that happens, the wife picks up the phone and said, “You know, one of the things that we always walked away from is just that he spent the time in the meetings. You were explaining things. I said I understood. I was just happy to go forward.

“But every time I would ask my husband about it, he said, ‘Listen, no matter what happens, the first thing that you do is you call Victor. He’s going to be able to take care of you.'” She said, “So, that’s what I’m doing.”

I got the phone call before some of the members of the family, to be quite honest with you. That, for me, is always a cherished memory because it meant that in their mind, the man of that family, I was an essential part to their peace, to their ability to survive going forward.

It’s an honored position that I’m in. It’s an obligation that we treat with reverence because of the way that we’re factoring in.

With the idea of how you talk to different people and different married couples, I will tell you that being able to navigate discussions with husbands and wives differently, and making sure that they both feel validated in what they have to share, and that their goals are equally heard and attended to as part of the planning is definitely a difference in the way that we deal with them.

Something that we absolutely make sure that we get done, because both people do need to be heard in that process and a plan needs to be created for both of them.

Mark:  That’s fantastic when you have clients that believe that you’re there to help them, because that’s what you are. You created Medina Law Group and Palante Wealth to help people to come up with that plan so they would have a little more confidence and clarity moving forward.

You can’t guarantee that we’re all going to live to a hundred with perfect health, and you just go sleep one night and pass away. Everybody’s situation is unique to them.

The idea is you need to make a last plan. It’s about income, investments, taxes, estate planning. It’s all so important. Quit putting it off. We don’t know what tomorrow brings. Call the teams. They’re here to help. There’s no cost for this. It’s 856‑506‑8300, 856‑506‑8300.

Why would you not take advantage of this? It’s maybe an hour of your time or a 15‑minute phone call to see if you should go forward. 856‑506‑8300.

[background music]

Mark:  We’re just getting started today with Make It Last with Victor Medina. Medina Law Group and Palante Wealth. A lot to get to. Stay with us. We’re back right after this.

Mark:  Thanks for being 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. Then, all of a sudden, it gets springtime. We’re all excited. Well, one thing that always happens are now all the orange cones come out because it’s time for the road repair and all of that, the construction sounds that we have to deal with.

We always think, “Well, how long is this going to last? Why didn’t they plan a little better? What’s the Department of Transportation thinking about?” Well, you think about retirement. There are actually potholes in our retirement. We’d love for our roads to be paved with gold and no potholes ever again once we’re at 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, and 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.

The way that I would envision or talk about potholes with respects to retirement is you’re 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 and 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?

Most people spend very nearly the same amount when there’s two spouses as there are when there’s one spouse. It sounds counterintuitive, but all the research suggests that that’s exactly the case that happens.

When we think about retirement, some of the potholes that people miss is thinking about their investments as being one bucket of money that they withdraw from and not taking into account the risks that are in those investments that could affect the success of the 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 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:  When you sit down with your clients, you do the what‑if. What if she goes, “Oh, right now, I’ve got to kill the husband.” 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 right out of the gate.”

Well, if you passed away, that pension could go away. Some, or part of it, or all of it could go away. Then the one that we don’t think about is taxes. We’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, “You know what? Congratulations on your great wedding or your great marriage, but now we’re going to tax you as an individual.” Your taxes go up.

We get bombarded with a lot of different areas. That’s part of what you do, isn’t it, go through some of the what‑ifs? What if you have bad health? What if this happens? What if you both live to a hundred? 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. I often think about it’s walking through a landmine field and having a guide identify, “You got to be careful over there. Did you explore that area? 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, because those are the ones that we can’t control in the future here.

We can’t control what the tax rate’s 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’ve found is that most people end up paying more in taxes in retirement than they need to. We actually 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 actually go to the website 920taxes.com.

We’re on 9:20 AM, so you go 920taxes.com and you’ll be able to download a guide that help you analyze whether or not you were paying too much in taxes and what you can do about it. It’s a great guide.

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.

I have found in my experience, the taxes of that one area that is often overlooked. You can find any broker that’s going to talk to you about investments. You might even get somebody that’s in retirement, that’ll help you about income, but it’s very rare that you have somebody that’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 or 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 because 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 portholes along the way. Now, Victor, when you and Jennifer take the boys to 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 time map that you had, at least, that I still have today. When we think about going into retirement ‑‑ because we 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, finally, I’m done with my job. I’m tired of working. I’m ready to retire,” yet they don’t have a road map 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:  It’s 100 percent one of the multiple choice options [indecipherable 21:44] . It’s probably close to that number.

Mark:  When you think about that, that’s really 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 lasts as long as you do? What about if this happens? What if that happens?”

I guess not, because we’re kind of 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. Retirement’s down the road. I can just keep putting it off.

The idea is the sooner we start on this, I think that gives your companies a little bit more time to put a plan together. Don’t it?

Victor:  It does. 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 need 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 it through that part of your plan and you’re really comfortable 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 in retirement and has been there before with tons and tons of clients, creating successful planning, that’s where that can be beneficial.

What it gives you the opportunity to do is it gives you an opportunity to work with somebody that 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 mass transit, there’s a train coming. It’s the number of six train and you just go over here and 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.

As you chart your course to retirement, as you start out on your journey, and 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 used to print out the MapQuest off of it and used to rely on that printout, if you had to take a turn that wasn’t on there, there was no way to get a new MapQuest because you didn’t have the printer there. There was just 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.

[laughter]

Mark:  If you go to Victor’s website, palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com, Victor, it 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.

The reason why we phrase things as a holistic opportunity is I really 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 situation.

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 bat phone that you pick up if there’s something wrong and having one area, the 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 health care, 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 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 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 adviser, 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, because 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. It really works if you’re working with something that looks at everything that would be part of a successful retirement plan.

Mark:  Let’s finish this segment up with a couple key words that you just talked about with your companies. Independent and fiduciary. Can you explain that?

Victor:  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 brokerage houses that are out there, the common household names that you would look at, all the bulls and the mountains and the mountain lions and everything that’s out there. You look at those big entities, the financial advisors, which use air quotes around, that work for them, are actually 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 on the menu. They’re told how much advice they could 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 kind of going with saying, I want a car. You walk into the Honda dealership, and you say, “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 who might be an independent, they might say to you, “What kind of car do you need?” Then you say, “Besides it having four wheels, I like to tow my boat.” They will say, “OK, great. Now we can look at different kinds of trucks that have good tow ratings.”

It helps you arrive at the right answer for you. 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 starting out as a lawyer, I only know one way that I have to be with clients which is 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 actually, the vast majority of people who work in there don’t have to work in their client’s best interests. They don’t have to recommend the things that is best for them. They just 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 obligation. 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. 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. Put their best interests above your own, make the best recommendations.

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 in for you, but we can actually give them to you.

We’re not restricted in what we can offer you. We can offer you everything that’s out there, and we just 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 I think 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 toolbelt.

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 as in the client’s best interest.

It makes perfect sense, but most advisors don’t work under that standard. They work under the suitability. It’s just got to make sense, 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?

Well, independent fiduciary and retirement planning, that is Palante Wealth, that is a Medina Law Group. They’re here to help you. 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, no obligation for this at all. 856‑506‑8300.

We started talking about construction zones, right? Those come about in the spring. They kind of 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. 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 is 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 guard rail or not, but when we go over the Golden Gate Bridge, we’re glad that there’s rails in place so we don’t go over the side.

[background music]

Mark:  How do we put guard rails on our retirement? That’s what we’re going to talk about next with Victor Medina. This is “Make it last”.

Mark:  Glad you are 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 and legacy planning.

Then there’s Palante Wealth, which is about holistic planning for your retirement. Victor is a certified financial planner professional, a registered investment advisor operates under the fiduciary standard. He’s independent. We’ve just explained that at the end of the last segment. palantewealth.com, P‑A‑L‑A‑N‑T‑E.

Now, the easy thing to do is just if you want to find out more about your estate planning or your retirement plan, you can just 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? Will my money last as long as I do?”

Those are big questions. Will my loved ones be OK if something happens to me? How do I leave things? Well, 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.

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 little…Maybe we don’t like what we’re seeing in the construction world. What’s the Department of Transportation thinking about?

But when we’re on that trip, and you said you, Jennifer, and the kids do you go on trips. You’ll drive to go places, all of that. The guard rails are there and you feel a little more comfortable going over a high bridge, for example.

If we’re on the Golden Gate Bridge, it’d be a little nerve‑wracking if there’s no guard rails in place, if it’s just there’s the edge of the road, and then there’s the fall off all the way down. We don’t like that.

Guard rails are on a bridge, they’re there for a reason. They keep you from tumbling over the edge, obviously, and you feel better, more comfortable driving over that bridge because the guard rails are there.

How do we get that kind of confidence with our retirement plan? Are there guard rails we can put in place?

Victor:  Yeah, you definitely want guard rails in elements of your planning because there 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, like a gust of wind, brush you across the bridge, and you have a risk of falling off.

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 take over the wheel and have them not try to drive straight. We’re always going to try to drive straight.

There are things that can change that we can’t control. The guardrails 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 guardrails in each one of those areas.

You want a guardrail to help you protect against living too long, what we call longevity. This idea that your money has to last a long time in retirement. You want to 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.

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, be a helpful way 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 help control for is health care 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 health care are increasing almost in double‑digit figures on an annual basis.

It’s getting more and more expensive to provide health care for people, which is one of the reasons why everyone has had to start to contribute to their healthcare cost, and the company doesn’t bear that all on their own.

When we think about health care, we want to make sure that you’ve got a great way to supplement the health care that you’re getting in retirement. For example, if you’re on Medicare, you want to make sure that you have a great Medicare supplement that helps you cover some of the extraordinary costs that are going to happen from time to time.

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. 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.

What are you going to do? Can you safeguard assets with some trust‑based planning on the legal side? Can you use your 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?

There are products that are like that. That way, you’re not throwing money away. You want to think about health care as a gust of wind that could blow you over and put some guardrails in place to help protect that so you’re driving over the bridge with confidence.

Then, the last area that I think 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, 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 in an 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 guardrail against one of those gusts of wind.

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 just a five minute read, but it’ll 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 actually start the conversation on how to create a guardrail in your plan against specifically in taxes. 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 really start doing your own due diligence when it comes to your retirement, some of the areas, those gust of winds that you need to be prepared for, 920taxes.com.

Glad you’re with us today for Make It Last with Victor Medina. I’m Mark Elliott. There’s a lot of moving parts in retirement. One of the things I always think is interesting as we go from our working years where it’s all about growth, to retirement where it’s now really 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 month right now to retire, that’s 60 grand a year, but in 15 years, you might need $7500 a month. Now, we’re over $90,000 a year. You need income that grows with you because of inflation. It’s really low, Jerome Powell said, “Hey, we’re going to try to get inflation up to around 2 percent.” The 100 year average is 3 percent when you look at inflation.

We know late ’70s, early ’80s, it was the hyperinflation of 15 double digit 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 the slight increases of 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 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, but you also have a need for money in the future, which is 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 the way that inflation is going to affect your purchasing power. 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, and most people overlook that until it’s too late. They’ll do a calculation, say, “I just have to take four percent of my investments out for my income for the rest of my life.”

Hold on a second, four percent today is worth a lot more than what four percent’s 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 to guardrail. You need to have some safety and protection involved, longevity. All of us would love to live to whatever age that we’re in good health. When we’re not, that we go to sleep and we don’t wake up. That would be the perfect scenario, but 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 last that long? Longevity is a factor. Health care, we don’t know if we’re going to have a health issue, or loved ones are going to have a health issue. Those kind of 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.

[background music]

Mark:  Again, there’s no cost. Why wouldn’t you pick up the phone and find out where you are on your road to retirement? 856‑506‑8300 is the number. Give them a call. 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’re headed to our final segment right after this. Stay with us.

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 world with Medina Law Group and, of course, Victor’s also a certified elder law attorney.

Got to get our ducks in a row. The estate plan, the legacy plan, how are we going to leave things? What about the transfer on death? What’s it called when we’re doing the provision for somebody that can make the decisions for us when it comes to health care or our finances because we can’t do it anymore? I’m missing the term. What is it Victor?

Victor:  The provision, like you name an agent to help you make decisions?

Mark:  I’m thinking of we need somebody that we can say, “Hey, when I have a medical issue, I was in a car wreck, I can’t make a decision.” There are a lot of moving parts in this. We need the guidance, and Medina Law Group can certainly help you in that area.

Palante Wealth is about holistic planning for your retirement. Victor’s a certified financial planner, professional registered investment advisor. That is the income, investment, tax world, estate world, obviously, at the Medina Law Group.

Both of these companies are really geared to help you moving forward into retirement to feel a little bit more confident about things. 856‑506‑8300. If you’d like to learn more, how can the teams help you? Give you a little bit more confidence and maybe a little bit less stress in your life. That would be nice. 856‑506‑8300.

Now here’s the deal. Victor and the teams of Palante Wealth and Medina Law Group, they get a lot of questions. People come in because they have questions. “Hey, what should I do here? What should I do there?” This is going to lead us right into the mailbag segment.

This is fun. Victor and the teams go out and do things in the community. They might put on a seminar here, there, they got people come in. They got people that email them questions or call with questions. We just steal some of these questions. We’re going to use them right here on the radio show. Are you ready to handle some questions from some different people from the area?

Victor:  I am limbered up and ready to go, Mark. Let’s do this.

Mark:  That’s why I wait till the last segment, so your voice is well limbered by the time we get here.

[laughter]

Mark:  First question comes from Donna in Princeton. “Victor, will social security be there for me in the future? If I listen to the news, I’m not sure if I should count on it for my retirement or not. What do you think?”

Victor:  Well, that’s a good question. Thanks for sending it over, Donna.

I will tell you that there’s a lot of people who have a similar concern where just like you, they’re worried about social security, because what they hear about in the news that’s out there is how social security is being rated. The way that we are increasing the debts that the government is running up and how we’re going to pay for those.

They’re concerned about where that money is going to come from when they need to get through retirement. I’ll tell you historically, when they’ve made changes to social security, what they’ve essentially done is stretched out the time period or made it later when you could go ahead and start to claim that amount.

They’ve adjusted the timing of it, so they didn’t have to pay for as many people for as long. There’s this compounding effect not only are there’s less money in the trust fund for paying the social security, but we have people who are living longer and longer.

While my crystal ball is broken and I can’t tell you exactly whether or not social security will be there, or what it will look like in the future, I will say it is a valid concern, whether or not it can make good on its original promise to help you fund your retirement and protect you against being poor when you are retired.

What can you do about that is, first of all, you can plan around needing it exclusively, which I think is a lot of people are already doing. They’re already saving for their retirement because they know that social security will not cover 100 percent of it.

The other thing that you can do is to start to think about how much you are going to need for your retirement and include having that portion of the social security for a shorter period of time. I think that what we’ll see is that the true impacts of social security might be coming up on the next generation, the next kids, that’s where we’re going to see the significant impact.

If you are on the verge of retirement, you may see a one‑ or two‑year delay before you can claim it. It may go longer than that, depending…Donna, you don’t say how old you are, and I’m not going to ask you because my wife and my mom have raised me the right way.

You may need it for a longer period, in which case it actually might be delayed even longer than the one or two years that we’re talking about. What you need to do is plan on needing it for a shorter period of time so that you can make sure that you’re not overly reliant on that social security. I think that’s where the fault comes.

We start thinking about it too much as too strong or important of a leg in the way that we design our income plan for retirement.

Mark:  The other part of this, Donna, social security administration says 70 to 80 percent of Americans take social security the wrong way for their situation. It doesn’t mean you’re wrong at 62 or 70 or anywhere in between just means you took it wrong.

That’s why Palante Wealth looks at the holistic plan. That means you’re looking at the entire picture. It’s not just a social security question because we know if we wait, we get more, but if we take it early, we get less. You might need to take it at 62. You might. Maybe you should wait till 66 or 67, or maybe wait till 70. Everybody’s situation is different.

The team at Palante Wealth can help walk you through this decision and give you some educated reasons for why you should do this or why you should do that. Just give them a call Donna 856‑506‑8300. Appreciate the question. Again it’s 856‑506‑8300.

Next question, Victor, comes from Roger in Feasterville, PA. He says, “Victor, I was just reviewing my pension plan. The option I chose when I was a new employee might not provide much for my wife if I die before her. Is there anything I can do to make this right? Or is there anything I can set up so she can still have income if I pass away before her?”

Victor:  Oh, that’s a good question, Roger. Thanks for sharing it. It’s great, by the way, that you’ve got a pension option because so few people, so few companies really have that as a defined benefit of employment.

It’s great that it’s there, but your question is valid because if you made an election and one that was irrevocable, when you set it up, that doesn’t provide as much for your wife when you retire, there’s this concern that your death will leave her with less income to spend in retirement.

That is a really serious concern and is one of the things that you should be worried about going forward. I’m going to give you some good news about ways that you can think about this, to help you with your planning retirement and your comfort level. That it’ll be OK no matter what election you made, whether it’s irrevocable or not.

Just to set the context for this, both of my parents are teachers. When they retired, they each had a pension. It’s super unusual. Talk about a double unicorn. They each had pensions and they had to come up with a plan about what would happen when one of them died.

What they did was start to equalize the number so that when one of them died, didn’t matter who it was, there was the same amount of income coming afterwards. The way that we would do that for somebody that doesn’t have a pension, we’re going to assume Roger, that your wife doesn’t have a pension of her own. You didn’t say that in your question. I’m going to assume that that’s the case.

The way that we think about doing that is making a pension out of your savings, using an insurance product to do that. That is called an annuity.

What you would do is you would take a portion of your investments that you’ve been saving for retirement, and you would purchase an annuity that would give a guaranteed lifetime income stream, that would be pegged to a date. Your wife would be able to trigger that after you’ve passed away.

Now, when we talk about guarantees, it’s really based on the financial strength of the underlying insurance company, which is one of the reasons why you want to get great recommendations for great companies and not just pick anything that’s out there that might be blaring on a commercial.

We really want something that’s tailor made. We’ve been working with the best products that we can find for this solution. What you’re essentially doing is you are creating the missing part of the pension that you missed out on by not selecting the money that stayed constant when you die.

That’s the whole idea is that we’ve made up for that decision by using some really smart strategies to [indecipherable 52:40] , and it’s absolutely something that you can do, assuming all the rest of the circumstances are in place.

You’ve got a big enough nest egg and it all works out. It’s a problem that we can correct, Roger, if we have the chance to do that before you die, which is where we’re looking for.

Mark:  We would like you to come in, Roger, before you pass away, [laughs] to make these decisions. It’s about planning. It’s about being proactive, not reactive. 856‑506‑8300 is the number. 856‑506‑8300.

Roger, there’s no cost to chat with the teams. They’re here to help. Just don’t know if they can until they hear your situation. I think in this situation, they probably can give you some options. 856‑506‑8300.

Glad you’re with us today for Make It Last with Victor Medina of Medina Law Group and Palante Wealth. I’m Mark Elliott.

We’re going through some mailbag questions. Might come from people that have called in and ask a question or people sent an email or around town or what have you. These are always interesting. They’re always all over the place.

The next one, Victor, comes from Alison. Alison is in Skillman. Alison says this, “Victor, I found a box of statements when I was cleaning out our closet, and I realized I have no idea how much money is in our accounts. I just manage a checking account because I pay the bills, but I don’t know much about what else my husband is managing. What should I do?”

Victor:  Alison, you sound a lot like my mom after she ended up getting divorced from my dad and not understanding all the financial implications that was out there.

In fact, it’s the whole reason why I wrote my most recent book, “Make It Last, Empowering Women in Retirement.” I’m going to do this free to you, Allison. I’m going to do the same thing for anybody else that’s listening.

If you are a woman and you would like a copy of the Empowering Women in Retirement book, go to the website, ask for it, reference the radio show, and we’ll make sure that we’ll send that out to you.

To answer your question, Allison, I will tell you this. First of all, it is super important for you to be as involved in the financial planning and picture as your husband is in terms of what’s going on. I’m going to assume for a moment that there’s nothing bad going on. You have a great relationship with your husband and things are going well. He’s not hiding anything.

You do have to have a discussion and say, “Listen, if you love me, if you care for me, what you have to do is make sure that you don’t leave me scrambling if you die before I do.” There’s always these divisions of labors in marriages where, “You’re going to handle this, and I’m going to handle that.”

There are areas of expertise. Don’t ask me to do laundry, not because I think it’s a woman’s job, but because my wife has taken that over, and probably to make sure that I don’t run the reds with the whites, and everything has worked out. We’ve had this division of labor, and it’s probably OK.

She has taught me how to use our sophisticated washing machine. In case she dies, I can take that over and I can continue to do it. Same thing would be in the finances.

If your husband loves you ‑‑ you need to tell him this ‑‑ he need to make sure that he is providing you with the same level of information and education, so that if he passes before you do, you don’t have to take over that work. Maybe you’re not even interested in taking over that work.

In case something happens, you are on equal footing. I’ve seen too many widows come through my doors, scrambling for all kinds of things, how to make the next payment on their bills that they’re owed, trying to figure out where the investments are, scrambling to figure out what goes into the box and collecting all the things together.

That’s just not a fair way to leave somebody behind. It is super important that we put everybody on [indecipherable 56:01] specifically around finances because we can cause a lot of damage if we don’t have them on equal footing going in.

Mark:  Great question, Alison. We appreciate it, Donna and Roger as well. Again, the numbers, 856‑506‑8300. There’s no cost. There’s no obligation. There’s no pressure. The teams at Medina Law Group and Palante Wealth certainly here to help 856‑506‑8300.

Allison or whomever would like a copy of the book that Victor gave to you, available at no cost, no charge, no nothing. No obligation, no nothing.

He’ll send it right to you. He said you go to the website. Medina Law Group, M‑E‑D‑I‑N‑A, medinalawgroup.com, palantewealth.com. I would say that’s an easier place probably for the book. palantewealth.com, P‑A‑L‑A‑N‑T‑E. It’s part of the three books, right? In the Make it Last series.

Victor I’m up to five now, Mark.

Mark:  Oh, five now.

Victor:  Yeah. Five published books, all available on Amazon, all available in our office if you came in. I know, I’m a little surprised myself that I’m that high.

Mark:  Pretty impressive. Pretty impressive. When you got a lot of knowledge, you want to share it with people. That’s Victor Medina of the Medina Law group and Palante Wealth. Again, the website palantewealth.com. If you’d like a copy of the book, palantewealth.com.

[background music]

Mark:  Again, the number, 856‑506‑8300. Appreciate you being with us today for Make it Last with Victor Medina. Victor enjoyed it. Enjoy the rest of the weekend. Have a great week. We’ll do it again next week.

Recorded Voice:  Taxes are just a fact of life. You can’t avoid it even in retirement. 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, 920taxes.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 are offered through Palante Wealth Advisors, LLC, a New Jersey and Pennsylvania registered investment advisor.

Registration does not imply a certain level of skill or training. Investing involves risk, including the potential loss of principal.

Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

This radio show is intended for informational purposes only. It is not intended to be used as a sole basis for financial decisions, nor should it be construed as advice designed to meet to particular needs of an individual situation.

Medina Law Group and Palante Wealth Advisors are not permitted to offer, and no statement made during the show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the US Government or any governmental agency.

The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Medina Law Group and Palante Wealth Advisors.

Transcription by CastingWords