Elizabeth Gladden | Staying Busy In Retirement

In today’s episode, we chat with retired teacher Elizabeth Gladden. After grieving the death of her husband, Elizabeth was inspired to go back to teaching as she craved the normalcy and routine of going back to school. 

“There were some days when you think ‘I just can’t face the world.’ And I think that’s perfectly normal to have days like that,’” says Elizabeth while remembering what it was like in the months after her husband’s death while she was trying to get back to living her life.

Nevertheless, she persisted and is now able to chat with us about how to handle a grieving family member or friend, what retirement was like for her as a teacher, as well as…

  • The importance of keeping a structure

  • How keeping busy allows you to experience everything retirement has to offer

  • How she was able to securely retire

  • The 4 freedoms of retirement

  • And more

Listen now…


Transcript

John Curry: Hey folks, John Curry here and Jay Wolfe. Welcome to another episode of the Secure Retirement Podcast. Today I'm sitting across the table from this lovely lady named Beth Gladden. Beth, welcome to this podcast. 

Elizabeth Gladden: Thank you. Good afternoon. 

John: I am looking forward to this conversation because I know there's so many things that you can share and help other people out there. But would you first just tell us a bit about your background? Who is the real Beth Gladden?

The Real Beth Gladden

Beth: Well, I'll go way back. I grew up in Miami, born and raised native Floridian, and I attended Florida State University and Barry College in Miami. Got my teaching degree. I taught a couple of years in Miami, and also a few years in Broward County. And moved to Tallahassee in 1985. After a little while, found a teaching job here and loved it. 

Teaching middle school, crazy as that sounds. I then went to work for the Department of Education for almost 10 years. And then a couple of years before retirement, I returned to teaching because I missed the kids. I missed that interaction every day. I think it keeps you young, keeps you on your toes. So I, that was my career. I retired when I was 62 And I am loving being retired.

John: That's great. Let's rewind for a second. From the standpoint of some people listening to this and they hear you say you had left to education to go back to teaching. They say Are you kidding me? At that point? You're going back into that jungle dealing with those kids? 

Beth: I am going back to the craziness, yes. And I think people say that you have to be a little crazy to really enjoy teaching but I truly, truly loved it. I never wanted to be anything but a teacher. 

John: What did you love about it? 

Beth: I just love the interaction every day. And even though education is very structured in your, you know, the bell rings and, you know, things move on through the day, there's really no two days that are the same. You have differences every day. And that, just feeling that, okay, hopefully I did make a difference in somebody's life. And it's so wonderful when kids come back to see you after a few years. And usually, it's maybe the kids that you had a problem with, and they'll come back to see you and it's wonderful.

John: And now you're having a flashback to something else, something just hit me hard. I always wanted to be a school teacher because of a lady who was our biology teacher and you're not going to believe what her name was. 

Beth: What was her name?

John: Beth Gladden. I just made that connection right now. And it was just like a cold chill hit me because there were three things I wanted to be. Because of Mrs. Gladden, I wanted to be a school teacher. Then later because of the influence of a Baptist minister, I wanted to be a minister. And then I wanted to be a trial lawyer. And Mrs. Blee out of TCC had me do these aptitude tests that veterans could do. 

And she said you should go into sales. And I said no way. She said, Sure because now you're teaching, you're preaching, you're persuading. And she was right. And I went back many times and thanked her for that. But also the same thing with Mrs. Gladden over in Holmes County High School. It just hit me.

Beth: That's amazing.

John: Wow, I never made the connection. So when you moved up here, went to school and started teaching, tell us a bit more about your personal life. You got married.

Beth: I got married when I was 20 years old. I actually went to Florida State for two and a half years. During one of the summers, I met my husband down in Miami at a summer job. And we just decided we just could not be apart and we wanted to get married. So I did all this investigating into what other schools offered my degree and so forth. And so that's how I ended up at Barry College, which is now Barry University 

John: Your husband was Barry also. What did he do?

Beth: He was, at the time, working for, it was called Retail Credit Company. Now it's Equifax. And he did insurance investigations and that type of work. And he was six years older than me. So he had already you know, he had finished college. He actually went to a year of law school, decided that wasn't for him and then ended up in the position where he was. 

So when we met with me being still in school, I didn't, you know, I had a goal. I wanted to get my degree and, you know, wanted to teach. So we worked it out. And I look back now and I think I got married when I was 20 years old. And at the time, I did not think that was young. But now I think that's pretty young to get married. But we knew it was, that's what we wanted. And we went from there. 

John: And it worked. 

Beth: It worked. It worked. Absolutely.

John: Let's fast forward. We talked during lunch a little bit about his passing. Share with us what happened there and then I would like you to elaborate on some of the things we talked about earlier. Because so many people listening to this, they have lost a loved one because of cancer, heart attack something, and I just thought that what you shared with Jay in the earlier will be so helpful.

Beth: Okay. Barry had, he was 49, he had some bad family history. He had had rheumatic fever in the past. Perhaps not some good choices of smoking for part of his life. But he was rolling along. He was in a sort of a high-stress job, but he liked it. And he had a heart attack in January of 97. It was kind of what they called, at the time, a silent heart attack. Kind of not all the brutal symptoms or anything, but the damage had been caused. 

And they decided not to do stance, not to do bypass, but instead to put him on medications. And at the time, the doctors were touting the medications as just miraculous. So he was on those medications. He was doing very, very well. He had cut back a little bit on his stress. Everything was rolling along just fine. And one night, I remember the week, It was in April because it was the day, it was that week that you have Secretary's Day, Office Administrators Day. 

And we had gone out to dinner and we were both kind of on a, you know, watching weight, watching food very carefully. So we had this very nutritious dinner. And we came home. And I think I was in one room watching television. He loved to read. That was his de-stressor. He loved to read. So he would go into another room and read. And that night, he had a heart attack. Called 911. They came. By the time we got to the hospital, he was gone. At the time, my son was 17. He just happened to be home that night that that happened. So he was the one who actually called 911. 

And that began days of just truly not even remembering everything. I have people to this day who will say Do you remember this? Do you remember you said that? No, I don't. Because I guess your brain just turns certain things off. When that happened, it, I felt like half of me had been removed. So if you've ever lost a spouse, that's what it's like. Half of you, it's just gone. You don't have that person anymore. It's indescribable and I don't think anyone knows what it's like unless you've been through it.

John: Let's talk about that. We were talking earlier about things that all of us have done. We mean well, but sometimes we say some stupid stuff. So I want to spend a moment on that because this could help a lot of people. And a very dear friend Marylin helped me with this. When people come up to you and they say I understand how you feel. You just touched on it right there.

What Someone Who’s Going Through a Hard Time Might Not Want to Hear

Beth: It's, the intent is always good. I believe people, they care about you. They want to comfort you. And honestly, I think the main trouble is people don't know what to say. They just don't know. So they'll say, I know how you feel. And at the time, you're in such emotional turmoil, you're thinking to yourself, No, you don't. 

You don't know how I feel. But you also know, and I think it takes a little time and perspective, to get to the point of saying, you know what, they really cared. That's why they said that to me. But at the time, I didn't take it that way. And if you've ever been through a situation like this, people say all kinds of things to you, but with all with good intent. But you're thinking What? What?

John: So coach us on what we should consider saying, Beth.

Beth: My thought is and always have been, simply say I'm sorry. I'm so sorry. I care about you. That all. You don't need to expound upon any sort of principle that, you know, that you think is the, this is the way it's supposed to be, when it's just

John: Like he's in a better place, this kind of stuff you hear, and like, I don't want to hear. 

Beth: Right. No, because at the time, that does not help. It does not help just I'm sorry, I'm so sorry.

John: I'm gonna add to that and that is don't start telling your story about your life. The person is already having enough stress. They don't need to hear about your friend or something you've experienced unless they welcome that.

Beth: Yes. Yeah. And I think you need to take signals from the grieving individual.

John: Explain that a little more.

Beth: I think you, you know, if they want you to talk about your situation, then I think they're probably going to ask, you know, did you go through this? Did you feel this way? Like, you know, things like that. Otherwise, I think you just keep your own story to yourself. 

John: Right. I believe that you should ask. I did this last night at dinner with a lady whose husband died 14 months ago. I just asked her, I said, I can tell that's painful. Do you want to discuss that or not? She said I would love to talk about it because I don't have anyone to talk with. And I just listened. I bet she talked for 20 minutes. And she says, Oh, my, I've been dominating the conversation. I said I got two good ears. I bet I didn't say 10 words in 20 minutes. But she just all this was coming up.

Beth: Yes. But what a wonderful thing you did for her, though, because a lot of people, I've also found a lot of people don't want to hear about it. You know, it's a sad thing. A lot of people don't want to hear about it.

John: I say I haven't thought of that because of the work that Jay and I do. We're here every day helping people who have been through that. So I haven't thought about that. But I guess that's true, isn't it? Some people don't want to hear it. 

Beth: Correct. And people are thinking, well don't dwell on that. You know, you need to just move on. It's like sometimes you need to dwell on it. You need to work through it before you can move on.

John: The closest I've come to that was when my brother committed suicide in 1982. We were close. That hurt. And people would say things, Some people would say things like, Well, you know, since he took his own life, you know, that's not good from a religious standpoint, all this stuff. I just wanted to just grab them by the throat and say, Are you kidding me? I'm hurting here. Leave me be. And the next closest I came to matching was our son was in a car accident and I flew back from California. 

He was in ICU, could have died any moment. But I've never lost a spouse. And I have no clue how that would feel. I'm divorced. So I understand how it feels in the sense of not having that relationship the way it was. But I think you're right, though. I think is truly a matter of we are uncomfortable, therefore we don't know what to say. I've been doing this for 45 years. I've delivered many, many checks to men and women because their spouse has died. I still find it difficult. 

And for me, I just have to say I am so sorry. What can I do to help? I had a guy one time, this was funny. He said, Do you really mean that? I said, Yes. He said, Would you please run to the cleaners and pick up the laundry for me? And I said which cleaners? And it was at Blue Ribbon. So I did. Yeah, and I'm thinking, that's an insignificant thing. But to him, it was a big deal. 

Beth: It was a big deal. And I think sometimes when you say, call me if I can do anything, chances are people are not gonna call you. But if you say, you know what, I'm going to bring some lasagna over on Wednesday night, you know, for you, for your family, or I'm going to come pick you up and we're going to go get a cup of coffee tomorrow, it's better to do that because then, because that's human nature. You're just like I don't want to call. I don't want to impose, you know, I don't want to do that.

John: Marilyn, her name is Marilyn Stallworth in case you folks will listen to another podcast on this theme. She taught me that. She said, instead of saying Call me if I can do something, look and see if there's something you know needs to be done or could be done, and just do it. Or send a card later. She taught me a lot. She's been a friend of mine, and a client for, I don't know how long. Was probably 1980, 81, something like that. You learn a lot from people if you just listen to them. 

Beth: Yes, you do. A lot. 

John: Thank you for sharing that. I just think that that is such a story that we had two men in here three weeks, I think it was now, might have been two weeks ago. Both had lost their wives and most time it's the other way around. We see that the husband died first. In this case, both of the ladies had died first. So let's talk a little bit about the change that you had to go through, that I can't even imagine being 43 years old with a 17-year-old son, your husband dies. And you shared with us a little bit earlier about how you took some time off of work. 

But yet you went back to work. That appealed to me because that's what I did when my brother died. I worked through the grief by getting, I worked harder. Harder than ever before, because I had to work through it. So talk a little bit about what was your motivation? Why did you go back when you were going back to deal with little kids again?

Beth: Well, I think I craved normalcy. Everything had been so abnormal for so many weeks and such turmoil and everything was upside down. And I craved normalcy. And for me, that was going back and being with my kids, and my classroom and dealing with them 

John: And your teachers. 

Beth: Yes, and my teacher network. And that's what I wanted to do. Even though, you know, people said it's too soon. You don't need to go back. But I really did need to go back and it turned out to be a good decision. And that first day back, you know, that was an emotional day. Lots of hurdles. And it's just, you know, okay, but once that day was over, okay, I'm back. It's normal, you know, or as the new normal I guess you could say, but certainly normal in my profession in my working world.

John: Let's dig deeper into that. I keep that heart-shaped pillow there to remind me of my heart surgery, triple bypass, June 10, 2008. And I remember the guy in the room next to mine was angry, he was cussing at the nurses and the doctor asked me he said, the guy next door had the same procedure you had. Almost identical. Would you mind inviting him to walk with you when you go down the hall? I said I'd be happy to. I stuck my head out the door and asked him to come to join me. Why would I do that? Blank blank blank cussing. 

And it hit me just now because what you're saying so standpoint of you have a choice. You touched on this while we were having lunch, that you can be bitter. You can say, Why me? Woe is me. Or you can reach outside of yourself to other people. And that's a space that what I know about you by going back to school, helping the kids was your normal and it helped you tremendously to get back in that environment because you're around a positive influence instead of sitting at home and getting in this downward spiral. 

Give Up or Push Forward: the Choice is Yours

Beth: Yes. Because I think you can, when you go through something like that you do have a choice. You know, are you going to continue on? And yeah, life is different. But you're going to move forward in a direction, hopefully that's going to be a positive thing. Or you can become reclusive. You can just kind of spiral down and keep yourself away from the rest of the world. And I think I'm just, I'm not naturally like that. And when you think about the choice that you have, to me, there was only one choice. And that was to, you know, keep going. 

John: I wrote this down. There's a quote from earlier, you said you could curl up in a ball, or you could go out and enjoy your friends and your family.

Beth: Yeah. And I chose, I did not curl up at a ball, it would have been easy to do. And you know, there were some days when you think I just can't face the world. And I think that's perfectly normal to have days like that. But if you're constantly making progress toward this new life that you have, you know, I think that's the best outcome you can have from now.

John: Why did you retire so young? You retired at 62? 

Beth: I did 

John: You have plenty of energy still. Why did you retire?

Beth: Well, I started teaching and I was 21. And I went through Florida Retirement System and ended up in the drop program and so 62, that was it. And I was done. And I actually felt okay with that. I was, you know, they always say, you know when it's time to retire. And I wasn't, I was not one of the people who people were saying she should retire. You know, I didn't want to be one of those.

John: So you didn't want to stay too long is what you're saying.

Beth: Exactly. Didn't want to overstay my welcome. But I went out with a good feeling about my career. But I also acknowledge the need for new blood. Young, younger people, you know, come in and do your thing and be fantastic. And that's the next generation of educators. 

John: So you created your succession plan. You know, one of the things that I've always been, I admire about teachers and I go back to teachers that have made a difference in my life in high school is the thousands of people, thousands of people that you indirectly, if not directly appeal to and help. Because directly with the students, but the things the choices they make later in life is 10s of thousands of people you've had an impact on.

Beth: Yes. And the really exciting thing for me is when I left teaching when I retired, the person who took my place had actually interned with me many years ago. She had taught for a while and then stopped to have her children and then was ready to enter the profession again.

John: So you hired your replacement.

Beth: I hired my replacement, which is why my principal said I had to do.

John: That is funny.

Beth: So that just thrilled me. It's like full circle, you know? So it's great.

John: I wonder how often that actually gets to happen where you know who's taking your place with your students. That's pretty cool. 

Beth: It doesn't always happen. This was just a coincidence that just connected and, you know, I knew I was leaving and the young lady I'm talking about, she had been substituting where I'd been teaching. I didn't know she was subbing there. And she came and found me one afternoon and she said, You know, I'm thinking of getting back into teaching. And I'm like, You're kidding. Let me tell you. And it just all just worked. 

John: In the military, we call that drafting and strong-arming Beth. Okay, so take me from the time you retired 62. You're, you just turned 66. You're still full of energy. So talk about what have you been doing these four years in retirement? And what do you see going forward, say for the next 10 years?

An Optimistic Look at Retirement

Beth: Well, I am thoroughly enjoying sleeping late Because I always had to get up so early when I taught. I love not having too much structure in my day but enough structure that, you know, on two days a week I'll go to a yoga class. Or on once we call, meet friends for lunch. And just so you have enough of a schedule, but I don't want to be overloaded. I don't, I want to feel the freedom of retirement.

John: Let's expand on that. Because a lot of people listening to this are going to be people who've retired recently and some who'd been retired for a long time. So some are going to be, wow, I don't know what to do. I have nothing to do. I'm sitting here in front of the television, getting frustrated with stuff. Then you have others who are like, I'm bored. I need to go find some interest. So let's talk about that for a moment. When you say enough activity that you're not bored but not too structured, can you elaborate on that some?

Beth: I'm the type of person where I don't have the need to be running and jumping and busy every second. I can be content reading a book.

John: That's a big word, by the way, content.

Beth: Yeah. And I can be content taking a walk around my neighborhood. I can be content taking a little day trip to the beach. And you have the freedom of doing that. I love it when you go to the dentist and they say, what time can you come in? I can come in anytime because I'm retired. And I love that. But I know some people need more. 

And if you need more, there's a lot of things you can do. I mean, there's a lot of opportunities. There's volunteering, there's activities, you know, at senior centers and things like that. So it's kind of you make your own day. You make your own schedule. I'm not sure that one thing that works for one person will work for everyone. You have to sort of customize that.

John: Sure, because some people like to volunteer. Others a lot of go to the gym. They just, I'm thinking two guys right now, they love doing woodwork. They've got their little shops and they're doing all kinds of stuff. And that's fine.

Beth: So I think but you need to tailor it to yourself. You can't be like everybody else.

John: We were talking earlier, you said you like, you've done some travel, you'd like to do some more. Talk about that a little bit. Where are some of the places you'd like to go to?

Beth: I would like to go back to California, do the Napa Valley region. I'd like to see Chicago, I'd like to see Seattle, I'd like to see San Antonio Texas. Just, there's a lot of places in the United States that, or if I've been there, I went there as a kid. And I frankly probably took it for granted and didn't pay attention because I was little. But I would like to go back and just not really have a schedule. Not say okay, I have three days to see this place. You know, when you're retired, hopefully you have a little freedom there. I'm going to go here, I'm going to go there. You know, well let's extend it a day if we want. You know, it's just really nice to have that freedom.

John: Now, are you the kind of person that when you travel you like to go by yourself or you'd like to have tours? How do you do that?

Beth: I like to go with somebody and, you know, there's I do have, well, I have friends, still friends from college. I have my teacher network and, you know, going with them is fun. Sometimes a girls, you know, week to somewhere is a lot of fun. So, yeah, it's good. Friends are one of the most valuable things you can have. 

John: Absolutely. Yeah. I'd say second only to family.

Beth: Yes. Yes. 

John: Absolutely. So tell us about the story of where you were chaperone for kids in New York City. This kind of caught my ear. So tell me about that. 

Beth: Well, I chaperoned twice. It was great. We loved it. We took the kids to shows. We went to the Empire State Building. But I was chaperoning a group and my little group was four or five students and we were in Times Square in New York City, and many of them had not really traveled much. So I was like, don't talk to anybody. You stick right with me. Do not wander off. And the whole trip was a lot of counting heads on the bus to make sure we had not left anyone. So it was interesting. I'd like to go back to New York as an adult. So I don't have to count heads every second and just do that. It would be fun.

John: All right. I thought that was an interesting story because I think we've all whether it be boy scouting, Girl Scouts, doing something you've had to count heads make sure you don't lose someone's kid. You're like, whoops. If it's my kid, maybe I wouldn't want to lose them. I don't know.

Beth: Exactly.

John: So talk about the future. What do you see is your future? You're not going to sit around do nothing, I know that.

Beth: No, I would like to travel some more, as we mentioned, I like what I'm doing now. I like, you know, taking the classes and I like reading and I like getting together with friends. And I would say, going back to content, I'm pretty content with my life right now. I downsized to a smaller new house three and a half years ago. I love it. I don't have yard maintenance. I'm not a yard girl so I don't garden or anything like that. 

But there again, that's an option when you're retired. I think if life can stay sort of the way it is right now, my life, it would be great. I'm looking forward to eventually hopefully having grandchildren. I haven't experienced that yet. Looking forward to that. Hopefully, staying relatively healthy and, you know, able to enjoy things that go on and just, you know, feeling that life is good.

John: That sounds like a promising future. Do you ever feel the urge to go back into the workforce even on a part-time basis?

Beth: I don't really. Everybody says, Well, why don't you substitute teach? Well, frankly, those people that they deserve a whole lot more money than they make because substitute teaching is difficult and

John: Elaborate. Difficult, how do you mean that?

Beth: It's difficult because kids automatically challenge a substitute teacher. That's the way of the world. They do. However, if you can, and I know some people who've done this, if you can sub for one or two certain teachers when they're out at a certain school, the kids get to know you. And so that is a better kind of a deal. But I kind of, I'm not there yet. I know I'm not, I wouldn't rule it out for the future but right now, you know, I'm kind of good with where I am and what I'm doing.

John: Well, you're financially secure because you made good choices with your planning for retirement. So you have no pressure to have to work at all. So if you want to go to work, you're good because you truly want to. So we talked about earlier, put a purpose on a paycheck. So if it's something you enjoy doing go do it. 

Otherwise, for me, I get people ask me almost every day now, are you retired? Or when would you retire? Why would I retire? I love what I'm doing. But I have the ability to take time off when I want to and plan ahead for stuff. But I, my deal as long as I'm healthy, and I'm relevant, and people want me, I'm gonna keep working, but I'm not going to work as much as I have in the past. Take time out and do the things I want to do, travel and things like that.

Plan Out What You Want Retirement to Look Like For You

Beth: I think you should work. I think people should work as long as they want to work, as long as they can work. If that's important to you and that makes your life good, then that's what you should do. Whereas, you know, everybody's different. I don't think you can do a blanket thing for anybody on retirement. Everybody is different. 

John: I agree totally. I even ask people when they say I want to prepare for my retirement. Well, what does retirement look like? They struggle with that. I way well the first thing we'll do is let's talk about your vision of retirement. Because if you don't have something to retire to, you're not going to be happy in retirement. And the saddest thing I see as we'll have somebody come in, they're angry at work, can't stand to go to work and they're not really retiring to something. 

They're retiring from something. And they're miserable. And I got news for you, if you're miserable at work, you're probably gonna be miserable in retirement because that's just inside you. And you got to find a way to substitute that anger or that frustration for something that gives you joy. If not, I don't think you're going to have a good retirement.

Beth: I agree. I agree. Fortunately, for me, in the last four, almost four and a half years, my elderly mother was also ill, and in a nursing home and she had very bad dementia. And so being retired enabled me to leave and go see her for a week. You know, she was down in South Florida. Whereas if I had been working, I wouldn't have been able to do that. So that helped me during that period of time. I felt like at least I could do that. I couldn't necessarily do a lot for her because of her condition, but I could be there. And that was important to me.

John: Very important. And you had the time to do it. I like to talk about four freedoms, time, freedom, money, freedom, relationship, freedom and location freedom. And if we can get our act together in all those areas, then we can be more content and more at peace and not feeling pressured or frustrated. Good. Alright. So I'm looking at the clock there. I can't believe this has been 31 minutes here. So what advice would you leave with the people that are listening from the standpoint of from your personal experiences, things that you've learned along the way, what advice would you offer us?

Beth: I think it's, I think you have to look at the future. You have to look at reality as far as your finances and things like that. You can't leave it to chance. And I was almost forced into looking to the future when I was quite a bit younger than retirement age because of the death of my husband. And really, that's how a lot of this started almost inadvertently planning for the future, which turned out to be very beneficial.I've received great advice on that. I think you can't wait. I think everybody's concerned at this age or close to retirement is am I going to be okay? 

You know, do I have enough to get me through and so forth. And it adds a huge element of, I guess, serenity to life when you know that you're okay financially. You know, for the most part. I mean, you know, yes, things happen and so forth. But I, it sounds strange, but I almost feel fortunate that I went through some of these experiences in my early 40s because I might not be in as good of a situation as I am now had I not gone through that? That sounds a little strange.

John: I don't think it's strange at all. I think it's a situation where we learn more from the negative things if we stop and we become a good student. And it helps us redirect. It's just sad and tragic that you lost Barry the way you deal with this heart attack. But, you know, you said it earlier, and I don't think I wrote it down verbatim, but the gist of it you said, you have to be strong. You have to live life and go on.

Beth: Mm-hmm. That's it. You do.

John: And I think that all of us are going to have ups and downs in life. It's how we deal with them. 

Beth: Right And that your day, there will be many days if you experience something like this or the loss of anyone or some sort of major life event, not every day is going to be wonderful. It isn't. I mean, life is not that way. But I think if you have an outlook that alright, this is a crummy day, but I'm gonna get through it and tomorrow's a new day and, you know, I'm gonna move on. It's almost a mindset that you have to acquire after going through some of this. 

John: Yes. Your role as a teacher and loving the kids, one of the biggest things that made an impact on my life, I'm a Shriner, was going to one of the Shriner's hospitals down in Tampa. And walked in and you see these kids that have had amputations or kind of problems. And you're sitting there like oh my god, I feel so sorry for that person. And they've come right over to you and say Hey Mr. Shriner. How are you doing? 

You know, thank you. And next thing you know, I'm down on my hands and knees playing with them. I left they're not sad, but full of energy, was proud of what we did and the fundraiser did because they were grateful. Yes, they had lost an arm or a leg or whatever. But you know what? They didn't give up. And every time I see those commercials looking for fundraising on television, my heart just wells because, you know, we all have problems. 

They have big problems, but they don't let it keep them down. And then I see people when I go in honor flights, I see people in their 80s and 90s still going strong, it's just I love seeing that. So you get the two ends of the spectrum. The little kids and then there's older folk, that we can all learn from if we choose to. Or we can get angry with the world. Go suck our thumb, curl up in that ball, like you said and be angry. 

Beth: Which is really not productive, and It's not a constructive use of energy. Negative energy is just, it's just not constructive. 

John: No, it just tears us down. Beth, thank you so much for this. Beth Gladden, this has been delightful. Thank you so much. 

Beth: You're welcome. Thank you.

Voiceover: If you'd like to know more about John Curry's services, you can request a complimentary information package by visiting johnhcurry.com/podcast. Again that is johnhcurry.com/podcast. Or you can call his office at 850-562-3000. Again that is 850-562-3000. John H Curry, chartered life underwriter, chartered financial consultant, accredited estate planner, masters in science and financial services certified in long-term care, registered representative and financial advisor at Park Avenue Securities LLC. 

Securities products and services and advisory services are offered through Park Avenue Securities at registered broker-dealer and investment advisor. Park Avenue Securities is a wholly-owned subsidiary of Guardian. North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue Securities. Park Avenue Securities is a member of FINRA and SIPC. This material is intended for general public use. By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. 

Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian and subsidiaries, agents or employees do not provide legal tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. 

Not affiliated with the Florida Retirement System. The Living Balance Sheet and the Living Balance Sheet logo are registered service marks of The Guardian Life Insurance Company of America in New York, New York Copyright 2005 2020. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities or Guardian and opinions stated are their own. 

2020-96203 expiration March 2022.

A Guaranteed Income in Retirement

For something so important for our retirement, it’s a shame that there is so much confusion and misinformation about social security out there. 

As a result, many people are sabotaging their social security benefit… and receiving much less than they could… because they make bad decisions during their retirement planning process. 

When you should start taking social security is one of the most important factors here. There is a “best” time – but it’s different for everybody, and there are certain things you must keep in mind when making the decision.

We get into detail on that, as well as…

  • What you need to know about taxes

  • How Medicare and social security fit together

  • Why you might want to wait until age 70

  • Ways to maximize your benefit for steady income

  • And more

Listen now…

Mentioned in this episode:

Transcript

April Schoen:  Hi everyone, welcome. This is April Schoen. Thank you for joining us today, as we're going to be talking about social security. I'm sitting here with John Curry, author of Preparing for a Secure Retirement. Welcome, John.


John Curry: Hey, April. Good to see you


April: Good to be here. John's been helping clients with retirement planning issues, including social security, Medicare, IRA rollovers, inherited IRAs, required minimum distributions, since 1975. That's a long time, John.


John: It is.


April: I realized the other day is that in June, it'll be 10 years that I've been in financial services, almost a full decade.


John: I got you beat just a little bit. I've got four-and-a-half decades, 45 years of doing this.


April: You do have me beat just a little bit. That's good. Yeah, and in that time, we've helped thousands of people with these retirement planning issues. But what's really relevant for today are the lessons that we've learned: what works for people, what doesn't work for people. I know we're going to get into that today, specifically around social security, and talk about some planning strategies.


Before we get there, I do want to make sure that I introduce the team, because John has done a very good job over the years of building our team to make sure that our clients are taken care of. So on our team, we have Debbie Bradbury, Ed Bradbury, of course we have John Curry. We have Audie Ritter, Jay Wolfe, and myself.


What Benefits Can Do For Us


John, one of the things that I like about our team is some of the diversity that we bring to the table. I know in our seminars, we talk a lot about the difference in our ages, and how that helps us in our planning. I'm 36. I'm married. I have two small children. So my goals, my concerns, my risks, the threats that I face, are very different at this stage of my life compared to someone like you, who's 67.


John: Correct. Although those risks are similar, however. Think about the hazards we face. What are they? Dying too soon. I don't know about you, but whenever I die is too soon. So as a young woman with children, the event of your death would cause financial harm for the family. At my age, maybe not so much because of other assets. So the life insurance I bought to protect people then are important to me for different reasons, as far as leaving a legacy to children, grandchildren, and now even great-grandchildren.


April: Right.


John: Some of those risks are similar. For example, investments. As you're accumulating your money to build up money for your retirement, you want to grow the money, but you don't want to lose your money. Well now that I'm in retirement, I still want it to grow, but I'm more concerned about protecting that money than I am growing the money.


April: Right.


John: I still want both. Don't get me wrong. But I want the income guarantee. That's a good segue, because of what we're going to talk about with social security, that's another form of reliable income that will come in at retirement. We all have similar risks, no matter how old we are.


April: That's right. And really, that social security, I know we talk a lot about it being that retirement baseline, this is going to provide an income for you that you can't outlive, and that's very important as we go into retirement. For you, you're 67. You're collecting social security already. I know you'll share with us today some of your experiences that you've had with social security.


John: Absolutely.


April: Good. Before we dive in, I do want to hit one question that we get all the time, and that is, is John retiring? I just said he's 67, and he's already collecting social security. We get this question all the time. I will answer for him. The answer is no, he's not retiring, at least not yet. In fact, John and I last night, we were at a working dinner, and we were talking about his vision for the next 20 years, and even the next 33 years.


John: That's correct. Because like George Burns and Kirk Douglas, two of my heroes, I intend to live to be 100 years old. I hope I'm still, quote, performing, like George Burns was. Kirk Douglas is now 102. We have the same birthday, December 9th. But he's still a productive member of society, and published another book recently.


April: That's right. I'm sure all those things will come true, that's for sure. But, in all seriousness, though, you are taking more time off.


John: Correct.


April: We talked about this last night. Going to more conferences, taking time off, and doing the things you want to do, which is very important.


John: It's important to note that those conferences now include more things that are personal, not so much as professional. But it still want to keep that ... the saw sharp, and go to things on taxes, social security, Medicare. I'm still doing that too.


April: Good.


John: Because that's a passion.


April: That's right. Yes, it is. That's also though why you've built the team that you have, so that when you are going to do these things that you want to do, you know that your clients are well taken care of.


John: Absolutely. I am in a position of where, and have been for a number of years now, with you joining the team and helping me build the team even more, to where between you, Jay, Ed, Debbie, Audie, and whoever is going to join the team in the future, we're in a position where I know I could be gone for a month, and clients are going to be taken care of.


April: Right.


John: Client calls in, I know beyond a shadow of a doubt they'll be taken care of, because of the loving, caring people who want to do the right thing for clients.


April: That's right.


John: That's important.


April: That's important. That's why we, if you've been in a client meeting with us, then you know that we have two people in every meeting.


John: Correct.


April: We do that for a lot of reasons, but one is continuity, so that if John's at a conference and he's unavailable, well, you have the rest of the team here to help.


John: Well, there's another reason. Let's just be candid about it. I talk about living until 100, but I'm not promised even tomorrow. No one is. I keep that heart shaped pillow that I'm looking at right now to remind me of my open heart surgery, which was July 10th, 2008.


April: Right.


John: Also, it's imperative to me that in the event of my permanent disability or I should die, that clients are taken care of. I have all that in place, with legal documents, with planning documents with you as far as the business side, where I know beyond a shadow of a doubt that my clients will be taken care of.


April: That's right.


John: That is a tremendous, tremendous peace of mind. Because I worked for 45 years developing a clientele. It's like a shepherd protecting a flock. I want to make sure that my flock is taken care of.


April: Okay.


John: The people who just left us, it's like family. You see people, it's a big hug and kiss on the cheek, "Hey, how you doing? How's the family?" That's important.


April: That's very important. Yes. In a lot of those meetings that, even especially with the clients who just left, talking about social security was always part of the planning that we did with them.


John: And we talked about it today.


April: And we talked about it today. We're going to go through a lot of information today. I'll be honest, in the 45, 50 minutes for our webinar today, we just don't have the time to go through everything that there is to cover in social security. From time to time, we have full-blown seminars on both social security and Medicare. They're an hour-and-a-half long, and we go into more detail than we're going to get into today.


Our next social security seminar is scheduled for January 23rd. That's in about two weeks. There will be an email going out next week, announcing that. But for those of you on the call, you kind of get a heads-up notice that we're going to have a social security seminar on January 23rd. Then in February, February 20th, we're going to do one on Medicare. I'm glad that we're doing them separate. We've tried to do them together beforehand, and it's too much information. I'm glad we're going to do them separately. 


I would encourage you that if you're in the Tallahassee area to attend both of those sessions. But again, we can't really cover every question and nuance. But if you have some questions, feel free to put them in the chat box, and we'll get to them as we can. I also encourage you to contact us to schedule a phone appointment or a face-to-face meeting. We have clients all over the country. John is based in Tallahassee. I'm based out of Jacksonville. But I come back to Tallahassee every, about two to three weeks, for client meetings and our events. 


If you are interested in scheduling a phone appointment, you can call our office. Our phone number is (850) 562-3000. Here, I'll repeat that really quick. (850) 562-3000. That way, you can get to anybody on the team.

All right, well, let's roll up our sleeves and get to work and talk about social security. What we're going to talk about today is how social security works, what you need to know about the program, different payment scenarios and then also some issues around the program. 


Since 1935, American workers have been counting on social security as a future source of income. The Social Securities Trust Fund is primarily funded from the taxation of wages earned by the current work force. That's very important. We're going to get into why that's important later. Then, these funds are used to pay out the benefits to the program's beneficiaries. Average monthly benefits, as of January 2020, the average monthly benefit is $1,503. We're going to talk about also what the maximums are in a little bit, too.


Qualifying for Benefits


April: To qualify for social security and Medicare, you have to earn credits. You have to earn 40 credits, and then you and your spouse will qualify for social security and Medicare. You earn four credits per year. Let's just assume, if you have 10 years of working history, then both you and your spouse would qualify for both social security and for Medicare. 


The benefit amount that you'll collect once you do start your benefit is determined by averaging your highest 35 years of salary. But if you do not have 35 years of salary, they will average in zeros to fill in any gaps. That's very important. Sometimes we have people who don't, they don't quite have those 35 years, and they may either work a year or two more, just so that they don't have those zeros bringing down their averages.


One of the things we always recommend, if you haven't done so, is go to social security's website and create a login. When you go into the website, you'll be able to pull up a copy of your benefits statement. Benefits statements are no longer mailed. They used to mail them out. They don't anymore. You have to go online to get your benefits statement. You can also see online they have some different calculators that you can use. You can see a history of your earnings record. 


It's very important for you to go check that out. The other thing that's important is, social security has an issue with identity theft. They actually have people who will go in and pretend to be you and create their own user name, so that they can go in and access your benefits. So we highly encourage, if you haven't done so, head over to social security's website and create your user name.


John:  Let me jump in, April. Just the last weekend, actually Thursday of last week through Monday, I've got no less than seven phone calls, automated calls, same person's voice but a different phone number popped up from around the country. This same person's voice saying that there's an issue with my social security benefits and to call the number they gave to address it.


Social security does not call you and leave that type of message, folks. So if you get a call from anybody saying that there's something wrong with your social security benefits or an account, be very cautious. The calls I've received from social security folks and Medicare, they identify themselves right up front. It was not a recorded message. I got a live person. Just be aware that that's happening and it's just different phone numbers popping up from different parts of the country.


April: Yeah, that's good to know.


John: I noticed one in Maryland, one somewhere in Texas, and I forget the others.


April: Okay.


John: But all around. But just be aware of that. So identity theft and scams, just be careful.


April: Yes, very good to know. Now we're going to go into some of the things that you need to know about social security for your benefit. The year you were born determines your full retirement age. You can claim social security benefits early. You can actually claim them as early as 62, and you can also delay your benefit to age 70. 


We're going to get into some more details on that in just a minute. But the year you were born determines your full retirement age, when you receive your full benefits. For example, if you were born in 1960 or later, then your full retirement age is 67. Very important to know this when starting to talk about social security and when you're going to claim. 


As another example, let's pretend that you are, your full retirement age is 66. You would have been born between 1943 and 1954. Again, your full retirement age is age 66. You get 100% of your benefit. You could claim as early as 62 and you'll receive 75% of your benefit. That benefit then is reduced at that 75% mark for the entire time that you collect it. 


Very important to think that through when you're going to collect early. Also, if you delay taking social security past your full retirement age, it will increase eight percent per year. If your full retirement age is 66 and you delay to age 70, your benefit then would actually be increased to 132%.


John: Let me jump in here for a minute, April. We talk about when people should take social security. I get this question all the time. I've been hearing this for years. For me, I chose to take it at age 66. So January of last year, 2019, I started my social security benefit. I chose not to wait until 70. You and I discussed this several times-


April: We did.


John: After looking at literally hundreds of plans for clients. Time, value of money, I chose to take it now. I shared this yesterday with you, kidding around. My social security deposit was made yesterday, direct deposit, and I used that money to pay for a portable building that I wanted to have on my property up in Jefferson County.


April: Right.


John: I'm choosing to use the social security benefit today either to do things that I want to do, take care of children or grandchildren, or save or invest it. Time, value of money, I wanted it now. Not everyone should do that. Some people should defer until age 70, because they need or want the higher income later in life, or because they've not done as good a job perhaps planning a survivor benefit. 


Maybe they don't have a pension. Maybe they don't have enough life insurance. Because the longer you wait, the benefit, instead of being $2,800 a month, is $3,700. That would continue to the surviving spouse.


April: Right.


Taking Benefits Early


John: So there are a lot of reasons to consider taking it early, full retirement age, or later. Most people that I talk with decide to take it at full retirement age, because they want the money today. If you live to normal life expectancy, it's pretty much an even. If you look at it, the average is about to age 83.


April: Yes.


John: It just depends on your circumstances, how much money you've saved, how much life insurance you have, what other benefits would continue to a surviving spouse. But it's important, folks, not to just look at social security in a vacuum and say, "This is what I'm going to do." You need to look at everything you've got and treat it like any other valuable asset, because it is a huge asset.


April: Right. Right. There's no perfect age to retire. It's all individual. It's all based on your individual, personal circumstance. Just know that that is something that we can help you with as well, to help determine the appropriate choice, when to claim.


John: Let me put it in perspective. At age 66, the maximum benefit is $2,861. In order to provide that benefit, either to you as your investment account or to a survivor, it would take $858,300 earning 4% interest to give you that. How did I calculate that? $2,831 times 12 is $34,332. Let's just assume a 4% withdrawal rate. You divide it by 0.04. It would take $858,300 to provide that same benefit. Even though you can't get that money lump sum, folks, I want you to understand that the capitalized value of that retirement benefit is almost a million dollars.


April: Right.


John: If you had a million dollars sitting in a bank account or a mutual fund, you could check on it occasionally. But most people don't check on social security until a few months before they retire.


April: Right.


John: It's important to check on it now, not wait. At least learn more about it. If you're on this call, I commend you for being there. For those who come to our seminars, they learn even more.


April: That's right. Good. Talking about, again, the delayed retirement credits is what they're called when you delay taking your benefit until age 70, so that also depends on the year you were born. If your full retirement age is 66, and you delay to age 70, then your benefit could increase to 132%. But if you're like me, and full retirement age is 67, and I delayed it until age 70, then my benefit would only increase to 124%. It's 8% per year, and that's going to depend on when your full retirement age is, and how long you can let it defer.


This is why it's also important to look at your statements. Because on your statements, it's going to show you first of all what your full retirement age is, and what your benefit would be at full retirement age. It's going to show you your benefit at age 70 and at age 62 and then also, the survivor benefits. A lot of people don't realize all the survivor benefits and the disability benefits that are eligible to you for social security. So it's important to review those, as well.


John: It also talks about Medicare.


April: Yes.


John: Because what you have with social security is not just a retirement benefit. You could have a disability benefit, although it's difficult to qualify for social security disability. But it's there for many people out there. Then the survivor benefit is like having life insurance, because the government is providing a benefit that, if you didn't have that, you'd have to have more life insurance. Then of course, we're all concerned about the cost of healthcare. 


More and more people my age are concerned about, okay, in retirement my biggest expense is my health insurance and health insurance costs are higher than the inflation rate, maybe 5% to 7% I have to assume. So that's a very important issue, too. April, just think about how many times we have discussions with clients, and their biggest fear is, "How do I pay for my health insurance when I retire"


April: Right.


John: I'm worried about what it's going to cost me.


April: We just had that conversation yesterday with some clients.


John: Yes.


April: That are about to retire. Very big concern.


April: Your social security benefit does have a cost of living adjustment. It may increase, but it's not guaranteed.


John: Key word is may.


April: May. Sorry. The cost of living adjustment for social security is tied to the CPIW, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers. If there is an increase in the CPIW, then we'll see an increase in social security benefits. But the CPIW is not the inflation rate that's quoted in the media. It's a different basket of goods that is calculated for the CPIW. 


For example, in 2020, the cost of living adjustment is 1.6%. Benefits will go up this year 1.6%. But you'll see that in the last 10 years, we've had several years where there's been no cost of living adjustment: 2010, 2011 and then again in 2016.


John: Let's talk about that increase, that COLA. I'm retired on paper. I'm collecting social security and I'm on Medicare. So I get a 1.6% increase, but also my Medicare premiums went up.


April: Oh, yes.


John: Another thing that, it's not Medicare topic today, but you need to understand folks, when you retire and you take whatever retirement accounts you have, pensions, 401(k), whatever, and then you add social security to that, but then you find your income tax level, you may find that you have to pay a extra tax called IRMAA on top of your Medicare Part B premiums.


April: Right.


John: We had that conversation with those clients yesterday afternoon.


April: We did.


John: You may find that you have not only the Medicare Part B premium to pay, but you have I call it the tax on top of that, because of your earnings level. These are things that people don't know about. Frankly, I didn't really pay attention to it, April, until about three years before I became 65.


April: Right.


John: More and more clients ask about it, so as usual, you go dig and learn to help that person, now you've learned something that will help hundreds, if not thousands, of other people.


April: That's right. Yeah, and the Medicare, especially with IRMAA, we're going to talk about that in our webinar, in our seminar in February on Medicare.


John: Yes.


April: I'm going to have some more information about that. Let's talk about taxes and your social security benefit.


John: Do we have to talk about that?


April: Unfortunately, we do.


John: Yes.


April: You may owe taxes on your social security benefit. This depends on a few things. One is your filing status, so do you file individual or do you file a joint return. Then, it's also the amount of your combined income. Your combined income, this is your adjusted gross income, plus non-taxable interest, plus half of your social security benefit. You total all three of those together, and that's how you get your combined income, which you'll need that information to know if part of your benefit will be considered taxable. 


If you are filing a individual, a single return, and your combined income is between $25,000 and $34,000, then 50% of your social security benefit will be considered taxable income. Then, if your combined income is over $34,000, 85% of your benefit will be considered taxable. Now let's look at if you file a joint return. If you file a joint return, and your combined income is between $32,000 and $44,000, then 50% of your benefit will be considered taxable. If your combined income is over $44,000, then 85% of your benefit will be considered taxable.


Social Security Benefits DO Get Taxed


John: I've been doing this for a long time. I'm still amazed at the number of people who do not realize that when they retire, that their social security benefit will be taxed and we've even seen people that don't realize that their retirement accounts would be taxed. At one time, social security benefits were not taxed. 


But in the '80s, under President Reagan's administration, social security was given its first major overhaul since the '50s and '60s, and some things changed. That's where we started having the cost of living adjustments. We also had the increase on the annual earnings level, to determine how much of your income would be taxed for social security.


April: Right.


John: So a lot of things have happened that most people, unless they're doing this stuff every day, they just don't know about.


April: No, they don't. John, we just had a question come in. Is that income before or after retirement? I think we hit two things here with this question. Good question, Judy. Thanks for asking that. That is going to be considered income in that year that you're claiming. Let's say it's 2020. When you go to file your taxes for 2020, they're going to look at your combined income for this year, and then they're also going to base it off of your social security benefits for this year.


John: Correct.


April: But it's also important to know, because we've been talking a little bit about Medicare and you mentioned about the Medicare premiums, is they do a two year look back. When they're calculating what you're, if you have a, the IRMAA tax, as we call it, for 2020, they actually look at your income from 2018. So for Medicare, they do a two-year lookback.


John: You know what's going through my mind as you're covering this, is all the moving parts to retirement planning.


April: Yes.


John: That you and I take for granted, because we do this every day, four, five, sometimes six times a day on the days we see clients. There are so many pieces. Add to this, whatever you're doing within IRAs, state deferred comp, 403(b)s, SEP plans, SIMPLE plans, any retirement plan that you have. When you are forced to take money out of those because of your required minimum distributions, which the SECURE Act made some changes in


April: Yes they did.


John: Doing some educational, there are just so many moving parts. It changes all the time.


April: Yes.


John: Because it's part of tax packages and the folks in Congress, when they work, they actually find ways to collect more of our money in the form of taxation. We'll get into some of the issues later. I'll talk more about taxes and what I think's going to happen in the future. But this stuff is important. We can't just blindly assume that what we get today is going to be the same as we get in the future. It could be higher. It could be lower. It could be taxed, not taxable


April: Yeah, that's a great point. It is, it's very complicated. There's a lot of moving pieces, and it's very ... again, it's individual to everyone's situation. That's why I like the retirement rehearsals that we do for clients.


John: Yes. Take a moment, we got time. Take a moment and share with people what that means and what we actually do.


April: Yeah, so with a retirement rehearsal, what we do for clients is, we will actually project ... if you haven't retired yet, we're going to project you forward to retirement. We're going to take a look at everything you have in your financial world, and we're going to look at all of your retirement income streams. We're going to look at social security, so what will your social security benefits be at 62, at full retirement age, at age 70, both for you and your spouse, if you're married? 


We look at, do you have a pension and do you have different pension options and what will those be, and how will that impact your retirement? We look at different pension options. We also look at, how will you draw income from your other assets? As John mentioned, do you have IRAs, 401(k)s, deferred compensation? How are you going to draw income from those when you get to the distribution phase of your claiming? And then, when do you have to start taking those? 


So whether you're a requirement of distributions, and with the changes to the SECURE Act, if you are not 70-and-a-half by December 31st, 2019, you now can delay taking money out of your retirement accounts until age 72. Very important to know. We have to make sure that we follow those rules. There's some hefty penalties if you don't. So we want to make sure we follow those rules. 


But really, with a retirement rehearsal, we project you forward to retirement and look at all your retirement income streams, and we can play what if. What if this happens? What if that happens? We can build it together. We also look at the threats. What threats do you face, both now and in retirement, to your income? Very important.


John: Yes.


April: We do have another question about, would it be better to file individually? That's just going to depend on the individual situation, in my opinion.


John: I agree totally. We don't hold ourselves out to be tax experts or legal experts. But I will tell you that it comes down to income levels, what assets you own, how those assets are taxed. Is it a rental income, investment income? Things like that. We can't give a specific answer to that. But for most people, what we're seeing is they do. If they're married, they do file jointly. Rarely do we see people filing individual that are married, but we do see it occasionally.


April: Right, and you got to take into, again, we're not tax experts, but you've got to take in the full tax picture, and not just how much of your social security benefit would be taxed.


John: Correct. We all owe taxes. Let's talk about the future. We see so many people that tell us that when they retire, they'll be in a lower tax bracket.


April: Yeah.

John: And we're not seeing that. We're seeing people in the same bracket, in some cases, higher, because again, all of the money that you accumulate, if you're doing a good job of saving money or you have an employer doing it for you, the day comes when that money has to come out.


April: Right.


John: Either because you choose to do it, or the IRS says at 70-and-a-half or 72, with required minimum distributions, you have to take it out. When you were doing the introduction, you talked about my focusing in on R&Ds and inherited IRAs. There's another issue that people don't talk about, that some day, we're going to die.


John: When we die, any monies we leave behind in retirement accounts is heavily taxed. If we leave it to a spouse, spouse can take income and not have to pay tax on the amount left behind. But if we're leaving it to a non-spouse beneficiary, the rules just changed with the SECURE Act on that. It used to be that my beneficiary, son, daughter, grandkid, could spread it out over their lifetime. 


Can't do that anymore. It's got to be paid out every 10 years. People don't know about that. That's not being talked about very much. So taxes could end up being much higher than you think, either for you or your ultimate beneficiary. It's important that if you're doing any type of planning that you project into the future in thinking what the tax impact would be.


April: Right. Very good. Let's switch gears a little bit, John, and talk about if you're still working.


John: Let me say one more thing. I don't hold myself out to be a tax expert, but I will tell you this, when I was getting my Master's degree in financial services, we spent one entire course, not a class, an entire course, just on the history of the income taxes in the United States of America. It has been a very complicated system throughout. When it first started in 1913 with the passage of the Sixteenth Amendment, it was pretty simple. There were six tax brackets, okay? 


Now, it's more complicated. Congress makes it more complicated. Whoever's running for president always refers in there taxes from the standpoint of, "We're going to do this, or going to do that. I'm going to raise taxes. I'm going to lower taxes." There's no way of knowing, for sure, what your tax rate is going to be 10, 15, 20 years in the future.


April: Right.


John: All we can do is look today, look at history, and try to get some idea of what it may look like. But it's important not to ignore this. Any time we talk about social security, what I've learned from my own experience of working with people and from my own income and investments, is that I get surprised occasionally with taxes, and I know this stuff. My CPA and my tax attorney, they say, "Look, you know this stuff as well as we do." I say, "No, I don't." But I do understand the focused part that I deal in, every day.


April: Right.


John: The rest of it, I don't know and don't want to know. It's why I pay them for their coaching and their advice.


April: Their expertise. That's right. Good. Good, good, good. Okay, why don't I switch gears and talk about if you're still working and your social security benefit? Because this is very important. Some people just kind of ... can trip them up.


John: Like me.


April: Like you. You're still working.


John: I'm still working. Like I said earlier, I'll never fully retire, as long as I am relevant and people want me and I'm healthy and can do it, I don't see any reason why I would quit.


April: That's right, good. If you are still working and you're going to collect your benefit, there's a couple things that you need to know. If you collect your benefit early and you're still working, there may be a reduction in benefits. At age 62, for this year 2020, there's a number of changes, but any wages earned over $18,240, your social security benefit would be reduced one dollar for every two dollars over this limit. Very important if you're still going to be working in some capacity and collecting your benefit. You need to know if your earnings, your wages, will be more than that earnings limit.


John: That's why you'll hear some of your friends say, "Well, I can only work part-time when I retire and take another job, because I don't want to earn more than $18,000." If you hear that, what they're referring to is the reduced ... the reduction of their benefit if they earn more than that $18,248.That's what they're referring to.


April: Yes. There's some nuance here with, if you start collecting your benefit in the year that you reach full retirement age. If you start collecting your benefit in the year that you turn full retirement age, but you haven't ... it's not the month yet, then any wages that year earned over $48,600, again, that's for 2020, then your social security benefit would be reduced one dollar for every three dollars over the limit. But if you start collecting your social security benefit in the month you turn full retirement age, there is no earnings limit, 100% of the social security benefits will be paid.


April: Let's use you as an example, John. You turned full retirement age, 66, last December, December of 2018.


John: Correct.


April: If you had started taking social security earlier in the year, you could have had a reduction in your benefits, if your income, your wages, had been over this limit?


John: Correct.


April: But since you started, you actually started the January after you turned full retirement age, now there is no earnings limit and you will receive 100% of your benefit?


John: Correct.


April: The key here is to look at if you are going to be working, most times you do not want to start your benefit until the month you hit full retirement age. Someone just asked a question about spouse's earnings, do they add into this total? The answer is no.

John: Correct from that perspective. However, where it does count though, is total income. If you're looking at total income, it could impact you in different ways. But as far as your social security benefit, no. 


In the example April was just giving, maybe my income, I started early, before the month that I turned full retirement age, I can be penalized. But if she's collecting her benefit, it would not be an issue. Right, very good. Good questions. Keep them coming. Carol just asked, does it go back up if you start, say about six months early? I assume you're saying then you take your benefit and you're working maybe for six months, and then you fully stop working, is how I'm going to take that.


John: If that's the case, then yes, there is an adjustment. But you would have to get the social security folks to do the calculation for you. But yes, there is an adjustment. Once you reach full retirement age, then you would not have that problem.


Different Ways to Claim Benefits


April: Right, exactly. Yeah, good. Good question. Okay, now we're going to talk about some different payment scenarios, and different ways to claim your benefits. The first that we're going to talk about is a spousal benefit. As we talked about earlier, when you have reached 40 credits, again, that's 10 years of working history, then both you and your spouse qualify for social security and Medicare. Under a spousal benefit, your spouse qualifies for 50%, half, of whatever your benefit is under your earnings record. 


Now, they'll also have their own earnings record, and social security has now what's called deeming rules. If the two of you go to claim social security, social security now will automatically pay you and your spouse whichever is the highest of the two benefits. Let's give some examples. Let's say that John and I are married. John's benefit is, just for easy math, $1,000 a month. Let's say that I did not work much outside the home, so I have very little on my own personal record. I would qualify for a spousal benefit under John's record. In that case, my benefit would be $500 per month. 


social security would automatically pay me the higher of the two. If I had, John and I's earnings records were very similar, and we both, our benefits were both $1,000 a month, then I would just automatically get the $1,000 per month, because it's the higher of the two. Okay? Let's look at some different scenarios. There is a widow and widower's benefit. The way that the widow or widower's benefit, I'll kind of make this a little easy, is that you get the higher of the two benefits. 


Again, John and I are married. Let's say that his benefit, again, is $1,000 per month and mine is $500 per month, and John passes away. Then I do not get to collect both anymore. But I'd get to collect the higher of the two. In that situation, the $500, I would just collect $1,000 per month. Again, I get the higher of the two benefits, for the widow and widower's benefits. We did have another question. Wouldn't it be beneficial to point out then, the case of a married couple, the higher wage earner should wait until age 70 to claim their benefit. John, would you like to address this question?


John: Absolutely, and it goes back to what I was saying earlier about, do you take it at full retirement age, or wait until 70. That truly comes down to a personalized, individualized scenario. If I have very little life insurance to go to my spouse, or I have very little assets, then I would probably be more inclined to wait until 70. 


In my case, I have a lot of life insurance over the years, and I have assets that will continue income stream. So for me, I chose to take the benefit at 66. But, the answer is, yes, it does make sense for some people to do that. Back to April's example, she would collect all my benefit, but if I wait until 70, it'd be even higher.


April: Right.


John: But I might not want to wait that long. In my case, I did not do that. I'm now divorced here, I'm going to get into some things here about people who are divorced in a minute, but I'm divorced. So my ex-wife is collecting on my benefit record. She is collecting half of my benefit. Had I waited until 70, then that benefit would be higher for her. Again, if I feel like I have a deficit in planning elsewhere, then maybe I would do that.


April: Right, yeah. It depends on, again you mention it but, other assets that you have and when you're going to fully retire and step out of working and do you have assets to replace that income? Those are all the scenarios that we look at at retirement rehearsal. If you are going to delay taking social security, and you're not working, where are we going to fill in the gaps for income?


John: Correct. A lot of people don't agree with what I'm going to say, but I'm to the point in my world where I don't care so much about large the account balance is. I want to make sure that there's a steady stream of reliable, preferably guaranteed and reliable income that reappears every month.


April: Right.


John: Every month it's there. It just shows up. You can do that with a pension. You can do that with social security. You can do it with other planning tools, products. But it's important to understand that it's not just how much money we have in the account, but it's more important once we retire, because if we want to or have to, because of medical reasons, that we have streams of income that are reliable.


April: Right.


John: That's why we spend so much time talking about social security.


April: Yes, very good.


John: Because it is the base foundation that if you are a U.S. tax payer and worker, you are probably going to have social security. There's some people who will not, but the majority will.


April: That's right. Good. John, there are other survivors' benefits. For lack of time, we're not going to go in too much detail on these, but just know there are some other survivor benefits: widow/widower's, disabled, and for minor children, as well. Again, all that information can be found on your statement.


April: Okay, for divorced spouses, so if you were married for at least 10 years or longer, but are now divorced, you can still claim a benefit under your ex-spouse's record. Again, it works the same way, where it's 50% of their benefit. We get this question a lot, it does not impact their benefit in any way. If they're remarried, it doesn't impact their current spouse's benefit in any way. But if you're married 10 years or longer, then you'll have a spousal benefit available.


John: I have a question for you that we get occasionally in seminars. So I'm divorced. I get re-married and I'm married for 11 years to the second spouse.


April: Yes.


John: Then we're divorced, or I die. What happens then? Do both people get the benefit?


April: Yes, both people get the benefit.


John: Right. For me, I've never understood that. If we have a crisis with social security, how is it that we have that in place? I'm glad it's there for people who need it. We've got clients where that applied to them when somebody died, the spouse died. But I look at these things, and I wonder sometimes, is that another area where Congress some day is going to say, "Whoa wait a minute. Maybe we don't do that anymore."


April: Right.


John: There are a lot of issues that we could get into from a standpoint of, what might they do to keep the system more solvent? If there's time, we'll get into some of that 


April: Yeah, they talk about the changes quite a bit. So we'll probably get into that a little bit here. Good thought. Okay, speaking of changes-


John: Yes.


April: It's perfect timing. There were actually some changes with social security back in 2015. So I'm going to hit this matter quickly.


John: I want to make a comment before you do.


April: Yes.


John: What April is about to cover, in all of my years in business, since 1975, this is the fastest that we've ever seen Congress act on social security. When they called it the Bipartisan Budget Act, it was bipartisan. It was all the people in Congress were on board with this, because it was the first time that we saw something happen literally in weeks, weeks of being proposed. I'll turn it back to you, April.


April: Yes, no. I mean, it was within two, maybe three weeks. It was first proposed, a lot of use were scrambling to try to find, get as much information as on this as possible. A lot of us thought that it would take a while to be passed, and they passed it very quickly, and then the changes happened also very quickly. It impacted two claiming strategies: the restricted application and the file and suspend. The file and suspend is no longer available, unless you were already file and suspended prior to April 30th, 2016. I'm not going to go into too much detail on that strategy.


John: I don't think you need to spend any time on that one, actually.


April: That's something, we can talk about that offline. The restricted application, though, is still available. But you had to have been 65 as of January 1st, 2019. The restricted application says that this is, again, this is for spousal benefits, that you could claim a spousal benefit and receive your spousal benefit, but delay taking yours. Let's use, again, another example.


April: Let's say that my benefit is $1,000 per month and John is going, again, we're married in the scenario, so John is going to take a spousal benefit on my record, so he's going to get $500 per month, and then he's going to let his own earnings record grow and defer and delay it until full retirement age at age 70. So while he's delaying taking social security on his own record, he's now collecting a spousal benefit from mine.


John: That might be what the person was indicating earlier about to age 70. I'm not sure. So if that's what you were thinking, then that would be part of the strategy. I would collect, and then in this scenario, April would delay until 70, and then start collecting.


April: Correct. Okay, and again, restricted application is still available, if you were 65 as of January 1st, 2019. So if that applies to you, please get with us offline, and we can run some calculations for you.All right, let's talk about some issues around the program. The first issue we're going to talk about is that the trust fund is running out of money. This is not necessarily new news. We've been hearing about this for several years. But part of the problem is that there's a lot of people, Baby Boomers, are leaving the workforce, and are activating their benefits. So it is putting more strain on the system.


John: Yeah, about 10,000 of them per day.


April: Per day. I'll give you some examples, just to paint the picture for you. Back in 1945, there were 40 workers per each beneficiary. Now, social security estimates that by 2035, which isn't very far away by the way, there's only going to be two workers per each beneficiary. Very important. That's why the social security administration also estimates that by about, the years change a little bit, usually 2033, 2034, that the trust fund will actually be exhausted. If that happens, and no changes are made with social security, then they'll only be able to pay out 77 cents per dollar of scheduled benefits.


John: A comment here. I would encourage everyone who's listening to this, whether it be live on the webinar now or recorded later, go to the social security website, download, print out hard copy, the trustee's report, and read it. They give good, open, honest information there.


April: Yes.


John: They don't hide this. They're making it clear that there's a problem. For those of us who choose to ignore that, we should not be all upset when our benefits are lowered in the future. Because they're telling us loud and clear, this is a problem. It must be addressed. If it's not addressed, we're going to see a reduced benefit, or could see it, in the future.


April: Right.


John: We can talk about the impacts of that later, if there's time.


April:  Yes.


John: But I just wanted to jump in and share that.


April: I do believe that if things continue on this way, then they will make some changes. They'll have to. What those changes look like, there's a lot of theories around that. Different things have been proposed. But I think that they'll make some changes.


John: I want to make one comment here before we leave this section. I'm tired of people using fear to convince people to make decisions about social security. We have people come in to us, say to us, "I'm taking mine at 62, because this thing's going broke."


April: Right.


John: Folks, be careful of that. I don't think the social security system's going to go broke. It's not going away. You'll see some changes in the future. They should have already been made. People never should have been allowed to take social security at 62. It was never intended for that. There's a lot of things that we could talk about that should not have been done, but they did it. Those things will be addressed in the future. But don't let anyone use fear to try to convince you to do anything. If they can't explain it and justify it and make it make sense for you and verify it, then, get away.


April: That's right. Good. Again, we have hit some of this, but some of the other issues around the program is that it's subject to political agendas.


John: Nah.


April: Yeah, just a little bit. Then also, that cost of living adjustment being tied to the CPIW. They talked about changing that, like the CPIE, which is the Consumer Price Index for the Elderly, which makes more sense. But I'm not sure if they're going to do that, or not. But again, it does get ... how do you put it sometimes? It's the political football that gets passed back and forth.


John: That's right.


April: Yeah.


John: Passed or kicked.


April: That's right. John, before we go into recap, are there anything else that you want to add about the issues around the program?


John: I just want to talk about what I think we're going to see happen in the future, and I'll keep it brief. But it's obvious to me that taxes of all type must be increased in the future. If you look at the spending that's going on, you look at what's happening with ... just look at the candidates running for office. I don't care if you're Democrat, Republican, or Independent. 


I don't really care what your views are on politics. I look at the numbers from the standpoint of planning. If you take a look at our income tax history, our highest bracket was over 90%, then 70, then 50, then 28% under President Reagan's administration. But while tax rates dropped to 28%, they also took away tax deductions. So very few people actually paid less tax, because there was an offset of what they couldn't deduct.


John: Then, we had tax rates go back to 40%, 49.7. Then down, and now we stand at 37%, top bracket. So tell me how, with all of the spending going on and the condition of social security, Medicare and other programs, how tax rates can stay as low as they are? They're low right now, compared to history.


April: That's right.


John: I'm convinced that tax rates will go up. I was just looking at my Medicare 

stuff earlier. The IRMAA tax on that is called a surcharge. That's a tax. Not just a surcharge, it is a form of taxation. Taxes are going to go up. Just because your income today is X amount, and you think it's going to be less when you retire, that might not be accurate.


April: Correct.


John: You could have the same income as today, and be in a higher tax bracket, if they raise the tax rates. The good news, so far anyway, about taxes is, we know what's coming well in advance. So far, they've not ... they haven't done that in two weeks.


April: Right.


John: As we see things, we do webinars and seminars, get emails out, and let people know. But just understand that down the road, we're probably going to pay higher and higher social security tax. You would anyway if your income goes up, because you pay the same tax rate, but it's on a higher income each year.


April: Right.


John: Don't get lulled into this thing about, "Well, when I retire, I'll be in a lower tax bracket and it won't impact me."


April: Very good. Good. Well, let's recap quickly here. Social security is funded by the taxation of wages. It averages your highest 35 years of wages to determine your benefit. If you have 10 years of working history, then you and your spouse should qualify. Then also, make sure to go online to get a copy of your statement.


April: Your full retirement age depends on the year you were born and how old you are when you activate your benefit, also determines your benefit amount. Because you can claim it early, and have a reduced benefit. There is a cost of living adjustment, but it's not guaranteed. Again, it depends on if that CPIW goes up every year. You may owe taxes on your benefit, and if you work while you've claimed your benefits, but you're not full retirement age yet, your benefit may be reduced.


April: There are different claims scenarios. You have different spousal benefits, widow/widower's benefit, survivor benefits, divorced spouses, and then also, there is the delayed retirement credits and spousal benefits that we talked about.


April: Issues around the program, there's funding issues for future benefits. It's political agendas. Then while this is not necessarily an issue for the program, it's more of an issue for just overall retirement planning, but social security was never meant to replace all of your income in retirement. You have to have other sources.


John: For those who come to our seminar, we will get into some of the thinking that, going way back to the 1930s, about social security and what it was intended to do. I always like to talk about President Roosevelt's thinking at the time in these things. But I'm going to make one promise here. I read and study and stay on top of what people in Congress are thinking about social security and Medicare as much as I can. I read and study everything I can get on it. So as we know something, we'll make sure we get that information out to everybody that's on our email list, and we'll send it out.


April: Very good. Good, well, we thank you for joining us today, and encourage you, if you have some questions you'd like to schedule a time for a phone appointment to talk about your individual situation, maybe some of the questions that came up today or if you have some additional questions, you can contact us directly. 


Our main office number is (850) 562-3000. You can also reach me over in Jacksonville on my cell phone at (850) 544-8464. With that John, I say thank you for taking the time today for us to go through some social security, and I look forward to our next webinars and seminars on Medicare and retirement planning.


John: April, you're welcome, and I thank you for putting this together. You get all the credit for making sure these things get done, pushing me, say, "Okay, I need you sitting here." It's always fun to do it, so thank you for taking control and getting it done.


April: You're very welcome. Glad to be here. All right, thank you everyone.


2020-93687 Expires February 2022


Voiceover: If you would like to know more about John Curry’s services, you can request a complimentary information package by visiting JohnHCurry.com/podcast. Again, that is JohnHCurry.com/podcast. Or you can call his office at 850-562-3000. Again, that is 850-562-3000.

 

John H. Curry, CLU, ChFC, AEP, MSFS, CLTC, registered representative and financial advisor of Park Avenue Securities, LLC (PAS). Securities products and services and advisory services are offered through PAS, a registered broker dealer and investment advisor. Financial representative of the Guardian Life Insurance company of America, New York, New York. PAS is a wholly owned subsidiary of Guardian. North Florida Financial Corporation is not an affiliate or subsidiary of PAS. PAS is a member of FINRA and SIPC. 


This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. 


Guardian nor any of its subsidiaries offer Long Term Care Insurance andGuardian, its subsidiaries, agents or employees do not provide legal, tax, or accounting advice. Please consult with your attorney, accountant, and/or tax advisor for advice concerning your particular circumstances. Not affiliated with The Florida Retirement System. 

 

The Living Balance Sheet® (LBS) and the LBS Logo are registered service marks of The Guardian Life Insurance Company of America (Guardian), New York, NY. © Copyright 2005-2020. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by PAS or Guardian and opinions stated are their own.


The social security administration has not approved, endorsed or authorized this podcast. Contact the social security administration for complete details regarding eligibility for benefits. 









2020-93687 Expires 2/2022

Aging vs Getting Old

John Dunwoody returns for a preview of his upcoming boating adventure on the Down East Loop and shares highlights of his eight-month trip on the Great Loop, which traverses some of the country’s most iconic inland waterways.

Journeys of this length take some real planning and preparation, and John shares how he gets himself and his boat in shape for long voyages. He also talks about the places he’ll visit on the way… and how he chooses where he docks for the night.

These trips are part of his philosophy of doing things you enjoy– now– and staying active.

We get into detail on that and other thoughts on happy retirement, as well as…

  • Tips for planning long-term travel (always have a back-up is #1)

  • Places he’ll visit on the way… and why 

  • Why aging doesn’t have to mean getting old

  • The #1 element you need to enjoy your retirement

  • And more

Listen now…

Transcript

John Curry: Hi, folks, this is John Curry. Welcome to another episode of the Secure Retirement Podcast.

Today I have Jay Wolfe sitting here with me and our friend John Dunwoody. You may recall John Dunwoody when he was on a previous podcast where he talked about his trip on something called The Great Loop. In a moment, I'm going to ask John to give us an overview of that. But also today, what prompted this rather impromptu and my dad, he was telling us about his next adventure next year with The Down East Loop. So I want John to tell us a little bit about the two and we're going to pick his brain a little bit and learn some new things. So first of all, John Dunwoody, welcome, good to see you again.

The Great Loop

John Dunwoody: Nice to be here. Well, john, the great loop was an about a 6500-mile boat trip and you can go around the East go up the Eastern United States and you cut across the Erie Canal, go through Canada, Great Lakes, come down to Chicago. Get on the Illinois River, Mississippi River, Tennessee River. Eventually, you'll come out in Mobile. And just see a lot of the historic towns in America on that trip, had a great time doing it.

John C: How long did it take you to do that trip? Eight months, eight months.

John D: And that's most people take about a year. But I did eight months I rushed through Florida and Georgia didn't take the time to enjoy them.

John C: Well, you know, Florida, Georgia pretty, pretty well, so doesn't matter there. Now how much of that was like continuous days in a row?

John D: Almost. Well, every day we would I didn't travel it overnight except for once one stretch on the entire trip and that would be from basically here in the panhandle down to Tampa Bay. The rest of the trip every evening by six o'clock, five o'clock I'm anchored and done. But I would sometimes go as much as a week between stops at marinas to get fuel or water or something like that. So I could be out a week and not go to a marina. But during that time, I'd stopped and go to towns and things like that. But I would anchor out those nights and use my dingy to get to shore.

John C: Very good. Very good. So before we leave the great loop, what are some of the things that you could share with us that you got to see that were memorable for you? And tell us about some of the adventures stuff that maybe did not go quite as well?

Modern History

John D: Well, you know what, just a lot of historic stuff on the trip. Almost all the old towns along waterways, going through the Erie Canal there was poor memory, I can't remember which towns but a lot of the revolutionary War sides. They're from where the British were coming down from the north to get to New York and whatnot. Crossing there. There were quite a few forts protecting just north of Rochester, protecting the waterways there. When you got over to coming down the Illinois River, I was walking through the town and they had a statue and had the Lincoln Douglas debates there and I had remembered that from like fifth grade in high school, but there was and there were a lot of instances where things you had not thought about in years and then you'd go there and like William Clark and all those half the towns we went to seemed like those guys were there. There were Civil War sites starting in Kentucky. A couple of forts there at the beginning with the Tennessee River and the Cumberland River. And then you get Shiloh huge battle and Shiloh in Coming coming down that that's on the Tennessee River and why it happened and why the battle was there or not some other place all the way down to Mobile.

Mobile has a large industrial complex a bill a lot of the new Navy ships there, and they're pretty neat to look at. Pretty much. I had never been to New York I anchor next to the Statue of Liberty for three days. Very close to the Statue of Liberty and you could take the dingy in and then ride the subway over in New York and do all that. Fun just seeing a lot and you know, go by West Point was very memorable to me. I'd always heard about it when you go up the river and you see it it is pretty impressive.

John C: I'm just sitting there feeling like I'm reliving my history books, listening to you.

John D: It's It's It's neat and just the old old towns in In the Carolinas and all the stories about black beard and North Carolina and the towns that he went to, and just a lot of history just a lot. The canal the dismal swamp, George Washington was one of the surveyors for that canal. It's still there. It's just, it's everywhere. It's just stayed in your town where your British surrendered. And in the Revolutionary War, so big deal.

John C: Amazing. Amazing. And I'm just sitting here like, wow, I just feel like I got a tour of the history book.

Jay Wolf: Well, one thing that jumped out to me was the timeframe that it took on this trip. You said you were gone for eight months?

Eight Months Off Land

John D: Yes. So

Jay: I own a boat. I'm about under myself. Not quite as large as yours, or as many as amenities that onboard for sure. But I know that when I go out for even eight hours, let's say I'm planning on planning the night before, I'm thinking about what I need to do things like that. What goes into planning these trips by doing the great loop I doing? The other loop that you were discussing, it's what is the planning that goes into that to make sure that you have all your ducks in a row before you actually get on that boat and set sail.

John D: A lot of checklists. You know you want to make sure I carry enough oil to do two oil changes, have the oil filters and all that stuff. I got all that on board. This particular trip isn't like you're going overseas across an ocean you will be able to get groceries along the way. But you know, you still want to make sure you have all that plan. But I will have a general plan for the trip. And a lot of blank days in there because if it's foggy, you're not going to go if it's a windy, rain, whatever you're not going to go. So you start out I start out with a big calendar and have very broad timelines. very broad. I mean longest new trip I'm going to get the boat in May and the Chesapeake. And the only data I have right now is to be in New York in June in June. So I got 30 days to figure it out so that I can handle the bad weather and delays and stuff like that. And unlike, you know, I carry a lot of spare parts, but I do think about all those things that can break and all the things I'm going to do but what I'll do it in the morning when I get up or that week, never plan more than a week out. Figure out where I'm going to be where I need to also have backup places to anchor or different marinas. Because half time you'll get there your reservations won't be honored, someone else will have used them or whatever. So you always need to have a backup place to stay that evening whether it's a different anchorage or different Marina or whatever, you know, and you don't want to push you to feel like a pilot. You don't want to push your fuel limit and get there and find out that that fuel pump is down for whatever reason. So you want to have some contingency plans in place if the refrigeration or freezer on the boat breaks, I got canned food soap if I have to do that. But yeah, you have to spend a lot of time and most of that the hard part is all done well before you leave. And then like I said, the spare belts and stuff like that for the motors and the generators, you have all that done so yeah, you do I spend a lot of time trying to make sure I can handle those inconveniences and not get surprised.

John C: You said a few things. I want to go back and get a little deeper. And so this upcoming trip, the Downeast loop. That's going to take you how many months?

John D: A minimum of three, but it probably takes me five, okay,

John C: Let's just say five months. So you take a calendar out. And you’ve already told us you build a lot of flexibility in there. But just walk us through First of all what that loop is, and then talk to us about how you would go about planning for that. Okay, let's hear that from the standpoint of I got my calendar, I normally do it in may want to be done by September, thank you set or somewhere and kind of walk us through that, john. Well, it's fascinating.

John D: Well, part of the reason I'm doing this instead of the great loop, again, is the government's actually going to shut down the Illinois River for three months in 2020. And they're going to shut it down at the same time that all the people that do the great loop, we're going to want to go down the Illinois River, the locks are in such bad shape, they're going to shut the river down and fix the locks. So they'll be down for three months. So I didn't really want to stay in Chicago for three months. And in September to December and in, in sit there. So a lot of the people that do the great loop or other trips will be more of us doing this down East loops.

That's kind of how it came about. Because I had heard it was a harder trip and blah, blah, blah. But after looking at it and reading up on it, I think it'll be prettier than more senior than what the other one was. It will also won't be as crowded. So, I'm going to go it starts basically New York Harbor, you go up the Hudson River. And when you get to where the Erie Canal is, instead of turning off the Erie Canal, you to stay on the Hudson River, go through Lake Champlain. And eventually, you're going to come out on the St. Lawrence Seaway. Basically, where Quebec City in Canada is which is a circled city, like an adult in Europe. So I want to see that I'll probably stay in Quebec, at least a week. And but so if I leave the harbor in New York in June, I want to be in Quebec, I don't know late June and the goal from Quebec to Nova Scotia is going to be at Nova Scotia about the middle of August and it has it with the fog the number of fog days on the up there in Nova Scotia and was it New Brunswick? A lot of fog. If you get there too early, there's like 17 out of 30 days have so much foggy can't go and it's not like here where it burns off. I mean it's foggy, it's foggy.

John C: So how do you know all that? So yeah, so it's not just taking the trip, you had to do a lot of research, reading studying or something. So how did you learn all this?

John D: that from the previous trip. I belong to certain organizations and they always touting different things. So when you get on that, you start getting the blogs and stuff from the people that did the great loop. There are all these cruising guides. And so I sent away and got some cruising guides for the Downeast loop and started reading that and started finding out my distances from A to B which towns are more or less likely to have supplies, which ones have diesel, which ones have pump-outs, blah, blah, blah. So you can kind of plan how far you can go before you need to pull in and what towns are likely to have the stuff you need.

John C: So you in effect had a guide, several guides or coaches who've gone before you, and you simply had to plug into what they were doing?

John D: Correct. And then and then you look at the stuff that they did in their little hands and it you know, to me, because I don't speak French and some of these smaller towns, they say they truly don't have anyone who speaks English, not all if that's true, but that's what they're saying that especially on the radio is difficult to understand what they're doing. And so going into marinas could be interesting not knowing which way to go to get to your slip.

But then once you get to Nova Scotia, you're fine. Everyone speaks English. And so that's just going to be this strip from the basically the Quebec City up to the top there, the St. Lawrence Seaway in it's a should be a bit yeah, I've got all those different I've got three different cruise books with the mileage, what each town has to offer. And you take all that into consideration. Some of the cruise guides I use before in the people that wrote them were more of the yacht club type. So if you know if how pretty that the marina was, was at the top of your list, it'd be a good cruise book, whereas someone else might write and they had a much more keen interest in history and stuff. So if that was your gig, so you might pay more attention to their review of a town than the other guys would be able to town.

John C: Yeah, I don't see you caring too much about the young ones in the history

John D: So you want to go that route and you know, you look at people will say marinas, you know, it's nice when you pull on a marina that it has the things you want in it to me and I gotta have laundry and I want to have some kind of entertainment bar Music something whereas other people they just you know, they that's not what they want to have like I said the full Yacht Club type experience. But you know, you pull that out and grocery stores always a bit laundry and grocery stores and bars. That's pretty much you gotta have that is but so you can find out what's in the towns, what's there what you want to see, you know, they have any waterfalls, hiking trails, all that stuff.

John C: So you plan ahead for each city, right? And basically you become a tourist in that city.

Planning On-Land Activities

John D: Yes. So we're just saying Yeah. And then you know, because you have an interest, so much interaction with the people at the Marina, you often can, you know, you run into these people and often the boaters, you'll see the same boaters show up again and again. So you start to build a camaraderie up with the other cruisers that are doing this. So they can tell you because they've gotten a marina they've already been there they are Head they can tell you what they enjoyed or didn't enjoy, which was was good or not good to invite spurs you team up I have radar and all that stuff so maybe there'll be a boat there. It's scared about the fog or something and wants to stay close to both the hazard radar and some other things. So

John C: It'll be good and it's the closest I can come to connect with that is just hit me was my motorhome. Because I know when you travel by RV, you go to the RV camp, people look out for each other. You can open your hood and 10 people over there got a problem can I help you? Sounds like it's the same environment.

John D: If you do that, you'll see that if you're doing like national parks, you're going to run into Billy Bob again somewhere along the trip. And so it was good. I had a great time doing the great loop and the Downeast still will be should certainly be as fun like I said it's supposed to be more seen it supposed to be a lot of whales and

John C: Excellent. So let's Isn't that on the down a slope? So you'll start where I think you said,

John D: Well, I'm going to buy votes in Maryland. So I'm going to spend between two weeks in a month cruise in some parts of Chesapeake I haven't got to yet I want to go to Philadelphia and spend a week in Philadelphia. And then I'm going to come down to Delaware, Delaware Bay, go around New Jersey, go up the coast. And then the actual start would be there and in downtown New York and go up the Hudson River. And so from the Hudson from there to where the Erie Canal is, I've done that part. But once I go straight up to like champagne, it'll all be new scenery and should be very, I've heard like champagne is beautiful. So that should be great and should be an interesting boat ride. It's very low bridges By the way, so I have to take my all my antennas down let me down all I think it's 16 feet or something like that. That's a

John C: Good segue to my next question. Tell us about your bed. What type of boat is it? How big is it? Because you listen to this and you go, this must be monstrous size but it's not is it?

John D: A 36 foot Grand Banks. It's very old. It's in 1985. It's four-foot draft and 30,000 pounds but I have to two staterooms on there and I got air conditioning, refrigeration I got all the stuff you need and but I go slow top speeds maybe 10 miles an hour but I generally cruise about eight miles an hour we got a single-engine on it and I carry enough fuel to go maybe 1200 miles. So it works out works out well. It's small enough Believe it or not small enough for for me to handle by myself and then but I can carry up to five people very comfortably.

John C: Nice, nice. The persona is listened to this one says you know this guy Crazy going off on a trip like this long all by himself? What would you say to that? I know you're crazy for doing this stuff. So...

John D: Yeah, I think it's a lot. Just, you know, I think people jump out of airplanes are crazy. People that do that don't seem to have a problem with it. I don't think this is a this is not to be confused with an ocean crossing or something like that these I'm in the sight of land if there's a storm come and I just don't leave port you can get caught in a storm and you need to have be prepared for that. But essentially, you're going from one anchorage or Marina to another. You're not having six days at sea with, you know, open ocean so it's a lot safer and it shouldn't be confused. I'm not claiming to be some, you know, ocean crossing guy. So I don't think it's that bad.

John C: Well, when you put it that way, I agree because I lost sight of that too. So you're telling me you're always inside of land,

John D: The only place that for the essential you can get in the Great Lakes and get and get out of side land. And the only other place that you actually lose sight of land is a crossing from the panhandle of Florida to Tampa. And that's the only overnight trip I've done in just too far to go with a boat to those eight miles an hour. You can't get from the panhandle of Tampa, and in in in 12 hours.

John C: How long does it take?

John D: About 16 I think is what it was. It was 100. I forgot John. it's 160 miles from the points that I go to, and you just can't I just can't get there in a day in a 12 hour day just can't do it. So I have options. I could go to steam hatchery and stay a day and then down to Crystal River. But I've seen all that a lot. So having lived just north of Tampa for 16 years, I'm not no was never inside just went straight across here and I've done that in number of times

John C: So when you anchor do you stay in town sometimes or just always go back to your but

Accommodations

John D: No I stay in the bed.

John C: So you got all your living quarters and everything right, yeah you got a mobile hotel?

John D: Yeah I always stay on about it you know that's one of the things that is starting to be a problem is so many jump boats out there where people get a terrible boat anchor behind these guys with million-dollar homes. So a lot of the states are starting to pass laws and regulating where you can anchor and for how long so that's going to be interesting to see how that affects things in the future, too big deal.

John C: So you're saying that's going to limit your number of places you can anchor?

John D: Yeah. Because the marinas will be closed now. No because just so many of these people that don't want to pay rent for an apartment they'll buy a jump boat for $700 no go anchored out to her behind somebody with a million-dollar home and live on it in George's already got some laws in Florida is working on it to stop it. Here's the guy live in the St. Mark's River.

John C: Just think I know where you're talking. So So tell us a little bit of some of the things along the way with a base something breaking down or something that messed up your schedule.

John D: The first time I went on the first trip my engine had a leak in the high-pressure fuel pump. And I was leaking diesel into the block of the engine or into the world pan and got out there about almost 100 models had a chronic come back at about a mile an hour smoke coming up and I checked the oil and you could see the see it what no oil it was nice to smell and it was definitely diesel. I did not know where it was coming from at the time. But after I had to repair it, I found out that was the issue. I just kept pumping the flu Without put more oil in but you know just kind of lit back home so I did that and the only other one that happened while I was moving was I had one of the belts came off the engine and by the middle of channel so we anchored there and right in the middle and had to go down there and change the belt took about an hour and people were not happy with me but I couldn't do anything you were strangers, yeah but other net you know all the other problems we've been assured been able to get to Anchorage or to a marina and get them resolved without I mean there's there is always something little fuse will burn out or something like that. But I don't recall with outside of those two specific things that caused me a lot of hard work.

John C: That's good. That's amazing, actually to take a trip that long, especially eight months and...

John D: That's what you did all that planning ahead of time and did you do all those maintenance things? I have a little checklist in the morning I go through before I go good on Check all this stuff before I take off.

Jay: Are you checking in with local coast guard and things like that as you travel?

John D: No, um, they've got a number of things, you know, I usually was on Facebook I was telling people was good we go and also there was a there's a software program called Nebo and you can log into that and it'll track you and people on that that are members of these travel organizations were on it so everybody can see where you're going. It tracks you it's a live tracking and, and see where you are, how fast you're going the direction and then just pull you up. So I don't let the Coast Guard I do let someone know where I'm going to go.

John C: So what's next? You gotta take this adventure. Yeah, be doing more. I know when you first started. Tell me about this a few years ago. The game plan was to buy your boat. Do the trips and make yourself a boat. 

John D: Yeah. Well haven't done I want to do this trip up here. Do this trip the Downey sleep do that, and I hope to bring it back to Jacksonville next winter and then maybe do the St. Johns River. next February something like that and then come back up and see how I feel about things in

John C: How far does the St Johns River go?

John D: Almost to Orlando I forgot the name of the little town. I haven't studied that one. Yeah, but it goes it go You can go a long way in my boat. But it's a good way. It's down there good ways down here. I mean, you know, we're talking a month trip to go down there back. So I'll do that. I have friends at fished a lot on the St. John's and so they'll come and bring their bass boats so we can fish as we go. So be fun. And then I'll just see how I feel.

John C: Well on that one if you need, if you need a little help or let me know, I want to go with him that way. We could do some fishing together. So after that, what's next? I know you've got other stuff planned.

John D: well, I'm just gonna see how that that all go um, if that you know in the back of my mind if all that went well and still have a keen interest I'd like to go to do the southern Bahamas in there now that would be a trip that's getting closer to a true ocean voice. I'd have to really beef up some stuff and make sure I'm really ready to do that. But I like to go down there maybe go to the Cayman, Turks and Caicos and, well...

John C: What changes would you have to mind you said before we got to do not do

John D: You know, like a little emergency bag. Make sure you've been Got a ditch bag, they call it that you have enough supplies in there that if something happened to the boat and you want it to survive for a few days, you'd have something you could throw into the dinghy and get by and you know, have that squared away.

Probably want to you know, have my engine, go through a veteran overhaul that makes sure that just have a true mechanic come down and check it out and make sure that I'm not missing something, you know, as I said, in my trips, are basically close to shore and it's a cat Caterpillar engine, I can get parts but if you go do that, you know, you could be two weeks from the next place and be a little more isolated. So you'd have to increase your, your backup supply and your stuff have to be a little more knowledgeable on my engine. So that can handle a few more problems If they were to go bad,

John C: So that's another level.

John D: Yes. No, it's definitely it's an It's a little more remote, and you're farther and farther distances. It's not like the northern Bahamas where you got the Abacos. And there are people running around or you get down there, south of Nassau. You start it starts to thin out pretty good. There's Georgetown rather than Georgetown, there's not a whole lot down there. So but it'd be, it'd be fun to do.

John C: Also, you have to be concerned about the weather.

John D: Yeah. And then now you're farther out and you got larger distances. So you're going to want to make sure that you know, you got the right applications on you, on your radar and all that, that you can get those updates so that you don't screw up and get caught somewhere.

John C: I want to tie this into retirement for a minute. We talked earlier about the concept of aging versus getting old. What would you say to people who might be voting, it could be anything they thought about doing something? I'm getting close to retirement or maybe I'm retired. I keep saying I want to do this but they're not doing it because either they're procrastinating they're fearful. What would you say to those people? You have a microphone here, what would you say?

John D: You find something that you enjoy and do it now. You see so many people whether they're healthy they either due to health or mental issues. You can't do it nobody's health is going to get better. You've got to go out and do it while you still can function enjoy it. And stay in stay active. Doesn't matter what it is you're doing. But if you just got to find your passion, do it and stay motivated, because you don't know what's going to happen next year. If you're going to be able to do it or not do it just don't know. 

John C: I keep that heart-shaped pill there to remind me of my open heart surgery July 10, 2008, 11 years ago, because you can sit around hoping to do this do that. But if you don't get off your butt and do something, you are going to get old. And there's a difference between getting old and aging. And Art Linkletter and Mark Victor Hansen, their book, written back in 2006, talks a lot about that. And I started reading it again, last few days. And it just hit me real hard that, you know, no matter how great we think we are, I'm in pretty good health for a 67 year old, spacious voice had open-heart surgery. I look at and I go, you know what I just had done. It was some friends last week. He's 81. She's 79 or 80. And his words they were asked his advice, what advice he would give me. He said, number one, take care of your health. He said, I think you're doing that number to have enough money, and I'd have a lot of money but enough money to finance your lifestyle. And number three, pursue your passions, do the things that you really want to do. And whether they continue to work or working some and personal The things and it sounds to me like my friend that you're doing all those you're staying active. You're healthy. Yeah, no life has been good. I know you've had some health issues in the past, and you work through them and you're looking great sound great. You're mentally sharp as ever.

John D: Yeah, no, it's just got to get out and do it, like I said, is the opportunity and there's only so many mango seasons left, you got to get out and do it now.

John C: For those who might be curious, tell us what your occupation was.

John D: I was a pharmacist. And maybe that's why I have such a chip and go do things now because I saw so many folks that you could just see we're not making the most of the opportunities that they had. 

John C: As you were handing them their prescription.

John D: And worked a lot in nursing homes and haven't found one yet. I want to live in.

John C: How much of that John do you think truly motivated you to say you know, game I'm gonna do things now while I can?

John D: Well, it's certainly a lot because I go in there and I would see people that, you know, six months ago, were up walking around a town and then I'd have a stroke or they'd have some other health issue come up on them. And now you're in a nursing home, and they couldn't do it. They kept putting it off putting it off, and now it's too late. And so you know, if you've had that have the means and the desire to do something, and it's not going to affect you gotta gotta be a little cautious, but do it. You know, I just keep active until I do all the hard stuff. Now do the easy stuff later on. When you're sitting there.

John C: Well, all the time I've known you You've always been a planner, you don't spend all of your money you save money, you're frugal, you finance stuff. And you design your money road to finance the lifestyle you want to live. And I think that's what has allowed you at your age to do the things You want to do without fear of running out of money, you're doing things you want to do on your schedule, and the way you want to do I admire you for that, like, it's great.

John D: We're gonna be honest, you know, I had a lot more and have a nicer boat. Somebody wrote, I forgot who was it then and it probably mess it up. But he's basically go small, but go now. So if I keep wait and wait, and you'll never get there, and so, you know, take you, you make you can, you can have the same drive the same trip as the people in the nicer boats might not be quite as pretty or as fast but I can do the same things. And so you make little sacrifices, but I'm still accomplishing what I wanted to do. And that little bit of difference hasn't really been in it hasn't affected me.

John C: And it's your boat on your terms?

John D: Absolutely. Absolutely. I guess I could. I'd like to have a little nicer boat but they're in any place. Got I want to go that this boat is not capable of taking me.

John C: Very nice.

Jay: That's good, John. I appreciate the information in the stories.

John C: John, is there anything that you would like to close with as far as any words of wisdom ideas anything?

John D: No, I just, you know the Same as before. If If you're still healthy and can do things you just need, just can't say it enough. You need to need to go do it. Little time like the present.

John C: John Dunwoody, thank you so much for doing this kind of this wasn't planned this was doing a review and then boom, we jump right into it. So thank you for taking the time to do this. And folks, I hope you've enjoyed this as much as I have. I get the pleasure of seeing John two-three times a year and it's amazing to hear his stories about what he's doing and it motivates me. So john, thank you again,

Voiceover: 2020-92580 expires in January 2022. 

If you would like to know more about John Curry's services you can request a complimentary information package by visiting johnhcurry.com/podcast. Again, that is johnhcurry.com/podcast, or you can call his office at 850-562-3000. Again, that is 850-562-3000.

John H. Curry, chartered life underwriter Chartered Financial consultant accredited estate planner, Masters in science and financial services certified in long term care. Registered representative and financial advisor of Park Avenue securities, LLC. Securities products and services and advisory services are offered through Park Avenue securities a registered broker-dealer and investment advisor, financial representative of The Guardian Life Insurance Company of America New York, New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian, North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue securities. Park Avenue Securities is a member of FINRA SIPC. This material is intended for general public Use by providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity.

Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. Not affiliated with the Florida Retirement System. The living balance sheet and the living balance sheet logo are registered service marks the Guardian Life Insurance Company of America, New York, New York, copyright 2005 to 2018. This podcast is for informational purposes only guest speakers and their firms are not affiliated with or endorsed by Park Avenue securities or guardian and opinion stated are there.

2020-92580 Expires January 2022

The Top 7 Risks to Your Retirement

Everybody’s idea of a dream retirement is different. It could include cruises and vacations, volunteer work, more time with the grandkids…

But whatever you’re looking forward to… you have to take some precautions now to make sure your golden years are protected from things like inflation, taxes, healthcare costs, and more. We outline some solid strategies to make sure your financial and personal freedom stays secure.

We’ll even talk about how long you might live (since people today live longer than ever) might impact your financial planning. In fact, it’s one of the biggest risks to your dream retirement.

Listen in to discover…

  • The biggest factors in running out of money – and how to make sure your income increases

  • How to account for your “personal inflation rate”

  • Ways your pension or benefits plan could sabotage your spouse 

  • Why where you save money is as important as how much

  • And more

Listen now…

Transcript

April Schoen: Hi, everyone, welcome. This is April Schoen, and I'm glad you guys could join us today. I'm sitting here with John Curry the author of Preparing for a Secure Retirement.

John Curry: So I'm glad to be here. I'm looking forward to our presentations. I think there's some information that is going to help people get clarity and get some focus on how to improve their retirement, whatever it means to them. That's right.

April Schoen: That's right. And I was thinking, I'm glad we've been doing the new little series of webinars last few months. That's a different topic. So I know I'm enjoying the different topics, different topics we're doing and looking forward to the ones to the ones to come. 

John Curry: Same here. One of the things that I've discovered about doing webinars and podcasts is if no one ever listened, is beneficial to us, because it's helping us get clarity and take case studies that we've used before tap other people and for some people who listen to this and about to watch what we're doing, I can hear them saying now I will never retire. And I'm one of those people. And I think retirement is a terrible word. Because most of us are going to retire and then do something else. However, my friend with prior likes to say, she said, Don't retire. Oh, yeah, like that. Find something that gets you excited and move home. But the reality is, there are some things some we have some threat, some dangers that could impact our retirement. And today, we're going to be covering that and then we'll jump in if you'll allow me to.

April: Oh yeah, jump in wherever you'd like to. Yeah. So John, as you mentioned, we're going to walk through today some risks that people may face in retirement and talk about some solutions on how to avoid those risks. And then we've also got some questions that we're going to ask people just to kind of get them thinking about their own retirement, and what is their dream retirement look like? What do they want today because it's all as we know, it's all very unique and individual?

John: I think for the people that are participating today, you need to give them a little bit of your background. Because they don't know you the way I know you. So share with them your background, why you have a passion for this because the time you've been with me, you're just like going after all this knowledge.

April: Thank you for that. So yeah, so I joined John's team here at North Florida financial about five and a half years ago. And I worked with a previous firm before that for about four years. So all in all in financial services about nine and a half years. And when I first started it just the more information I learned especially about retirement planning, the more I wanted to learn, I just found it very intriguing and interesting. And now as you know, I tend to kind of geek out on this stuff. So I can I find it very interesting and I love what we do. Being able to sit down and help people and walk them through whether they're still in their working years, and they're starting to think about what retirement is going to look like for them, or working with someone who's about to step off into retirement, just like we were doing this morning, how can someone get clarity about when they retire, what it's going to look like, and what they're going to do this next phase,

John: And you're good at and you enjoy it. And that's the key, folks find somebody who knows what they're doing work with someone who has a passion for it. And I've been doing this for 45 years, a little bit longer than a year, almost a decade. I've got four decades. So I just thought it'd be important to share that. Well. Thank you. 

Planning & Thinking About Retirement

April: Let's dive on in today. So as I start planning, start thinking about retirement, there are some challenges that you need to be aware of issues and challenges that can work against you in retirement. So first, we're going to talk about the seven risks. That you may face in retirement. They are longevity, inflation, savings rate, loss of spouse, sequence of returns, tax drag or taxes and rising health care costs. So the first one that we're going to talk about today is longevity. People are living longer than ever, and that's a good thing. It just requires some extra planning. When it comes to retirement, men today have a 50% chance of living to age 85 women have a 50% chance of living to ADA. And as a couple, you have a 50% chance that one of you will make it to age 92. Now longevity, john is you know, it really compounds all the other risks that we're going to talk about. Because the longer you live, the more chance that you have that you're going to run out of money and you have all these other pressures is otherwise economic pressure. It's like taxes, inflation, interest rate risk that can they just get compounded with, the longer that we're living.

John: The way I like to explain that is if I am going to live just for one or two years in retirement, then I'm not worried about inflation or taxes. I'm right. My family is not worried about it. But it's not going to bother me. If I have 20 or 30 years in retirement. Now I have to be concerned about making sure that my money lives as long as I do and worried about inflation and taxation. But if I have a short life expectancy, okay, so uncomfortable. Somebody's got to pay the tax on that. But if I have an alone life expectancy, what I've done is I've magnified the problems of taxation, and inflation, and market risk and lower interest rates, the world we live in today. The volatility takes more than a toll.

April: You know, a couple of weeks ago, John, you and I were to meet And they were talking about how insurance companies today are planning for a baby being born today living to age 150 150 years old, correct? You know, for us, it's that can be a shocking number to hear, it's just hard to even fathom. wrap your head around that.

John: Well, several years ago, the National Association of insurance commissioners required that every insurance company have at least one product designed to go to age 120 because life expectancy was improving so much, and now you have a new updated mortality table that is indicating that people living on so we have to accept the fact that that's an issue. In our planning, we tell people we're going to assume that you live page 100 right that they will never live that long night. So we don't want you to run out of money on our watch. If you want to do something different, that's okay. But we will test it to make sure that it is 100 and beyond, but at least age 100 the income is there is still one.

April: So let's talk about some solutions around this risk of longevity. One of them is going to be very obvious. That would solve the problem.

John: No, thank you. I'll just take my chances of living a long time. Yes. Just so people know, I'm 66 I'll be 67 in December. And I made it very clear that I'm gonna be like George Burns. I'm a work. I'll be 100 years old, when I died, didn't know to be angry because I couldn't help them with their retirement plan or not that speech or that training session. But on a serious note, though, I share the same birthday as Kirk Douglas, he's 102 suffered a stroke, but he's still productive. He's still writing books. He's doing things and we have to assume for planning purposes of Avalon not but you're right. What good does to say.

April: One of the kinds of more obvious things too, is to make sure that you have enough money saved for retirement so that you don't run out of money so that you can combat all these other risks that you're going to have. That will probably be a reoccurring theme as we go through some of these issues today. But not just about how much you have saved, but really, john, it's about having an emphasis on making sure that you have increasing income in retirement,

John: Correct.

This might be a good time to talk about something that I love to teach and talk with advisors last week. Then at Tampa, there are really three freedoms and we're talking about folks time, freedom, money, freedom and relationship freedom. You may have all the time at work. So let's just suppose you retire 66 or 70, and you do have 20 or 30 years ahead of you. Because you have longevity, what are you gonna do with that time, and I know we'll get into some of that later, but I just want to throw that out there that those are three freedoms that we want to make sure that all Our clients. And if you have streams of income to last you for the rest of your life, if that's one year or a hundred years, now you're stronger. repeat those freedoms one more time, time, freedom, money, freedom and relationship freedom. I've had people say, Well, what about relationship mindset? Matt shared this gentleman yesterday. My agent is I never thought of it. He said I'm good. I have the money. Now have you can because I'm working so hard in my business. So that's great. He said, my relationships are suffering because I don't have time for those people. He’s like holy cow. How to fix this is really simple. Determine what you want. You're so busy helping other people get what they want. You have no clue what you want. Right? And as if you give me 15 minutes uninterrupted, I'll help you with that. And about 15 minutes he had clarity because oh my god, this is what I want. How do I get it? So you've already got it all the pieces of the puzzle, almost always the answer is in front of you. It just takes a coach or a guide to show you that you've got it and to pull it together. And that's the fun part. That's why I'm still doing this. 45 years later, I hope I open every time I hope I'm doing this right up to the day I do.

April: I definitely want you to, we want to keep going for as long as we can. And like you said on your terms, right.

John: As long as I'm relevant, man, I'm making a contribution.

April: That's right.

Inflation & Retirement

John: Okay. Inflation. Yes, that is one of the experts that we're going to get into. So most of us know our prices are going up as time goes by the cost of milk. It costs more tomorrow than it does today. So as time passes, your savings, your income will be able to buy less. So let's put some numbers on that. Let's say that you're making $100,000 today and that the inflation rate is 3%. So 20 years from now, your hundred thousand will spend as if it's like 54,000. So you're still getting 100,000 in, but the cost of goods has gone up so much that it's not that I'm by the same, you're not gonna have the same purchasing power. So that's the danger that we have with inflation.

And I think something would be important for people to know, is when we're sitting across from someone, within our planning process we use, we can demonstrate that you saw the economic factors of inflation taxation, we can we can actually let you test drive that, right, like, how will inflation impact my retirement? So it's not us making up a number. It's taking the clients number they will send for inflation because what is a 2% down 3% or 4% every person has a different inflation rate

April: Yeah and is that in the basket of goods that we're talking about. Right? We're going to talk about healthcare and a little bit and healthcare is rising much faster than the true inflation rate that's closing the media.

John: Well, let's do this a little deeper. You'd have not talked about this for today, but think about personal inflation, right? I'm thinking of a friend, an extraordinary fact when I had to place in my town and he never went anywhere. He would come to Tallahassee once every two weeks to shop and he stayed on his back porch. He actually said his rocking chair. He said, Go out there and enjoy the lake. Now a neighbor across the street. friend of ours, they were going on average, a week out of every six weeks on a cruise. About every six weeks that's I can prove that you had the higher personal inflation rate, my neighbor next door to me or the one across the street, one across the street because they were spending more money they were buying more things that were more expensive. So we say inflation, we're talking about the consumer price index that the government is saying that your personal inflation rate good is much higher. It depends on how you spend your money, as you pointed out with the basket of goods.

April: Another thing that goes along with this too, I think, which most people associate with inflation. But it's technology. It's what future goods and services are we going to want to have in our lives or need to have in our lives? They don't even exist today. Like the iPhone is a good example. You know, 1015 years ago, there wasn't no you didn't have a new smartphone coming out, as you know, every single year and doing all the things that they do. Or now that seems very commonplace for people to have the latest and greatest gadget.

John: People want it for half a mile just to get into the store to buy one.

April: That's right. So that's, you know, we have to think about those things to there's these, again, these goods or services that we may need the future that we don't even know what they are yet. Okay, the next risk that we want to talk about

John: Before you leave that I just thought it's not just technology with new things, but also planned obsolescence, things are wearing out. You may say I'm gonna keep this phone until it dies, and when it wears out on your you can't use it. So don't overlook planned obsolescence and you're about to get into savings, right? It's important to save enough money. So we have money available, that we can replace things that were out or buy the new stuff. So we're not stuck. I call it the Brady Bunch, the TV show and then leave you about the Brady's ever Second, the 50s or 60s. We don't want to be stuck there. We want to have the ability to grow and improve, especially if we have a long way. So it goes all back to longevity. If you have a long life. We don't want to be miserable. Do we want that time freedom, money, freedom, that relationship, right?

April: That's right. Yeah, you're, you know, you want the freedom to be able to go get that new gadget, to go on that trip, together. 

Retirement… Freedom?

April: Okay, good. Okay, so let's talk about savings, right, a little bit here. What we finding is that Americans, we are not saving as much as earlier generations. So I've got a couple of numbers I'm going to read out today. This is according to the retirement competence study, that 20% to 26% of Americans have less than $1,000 in savings, less than 1000. And then, according to the Federal Reserve report on the economic well being 31% of Americans have zero saved for retirement. Why is this important? You know, I would say that more of the responsibility for retirement planning is on our shoulders today than it was in previous generations. Look at the changes that we've seen the pension plans, look at potential changes to Social Security, if that doesn't get corrected. There's just a lot of changes that have happened where it's more on us. It's our responsible Ready to plan for retirement. And that's why it's so important that we save...

John: But let's talk about the two types of retirement plans. You have the old dinosaur called a defined benefit pension plan, which is going to where the dinosaur. Most companies don't have one anymore, right? People who work in the federal government, state government, county and city governments have a pension. Some corporations still do, but many of them that close them down. That's called a defined benefit plan. And then the one that most people have today are defined contributions would be a 401k for 57 deferred comps for people just like Gordon, photo three being for people who are school teachers, the university system, hospitals, things like that. Set plans for self-employed, IRAs. All of these are important, and it gives you more control over your money. However, it also gives you a false feeling of security. In the sense, you got all this money. That's great, but the game is on who is halftime when you retire Hampton. Now, what do you do? How do you make that money last year for the rest of your life? That's a big risk. And it comes right back to longevity. It comes back to inflation, savings rate, all these seven risks, dangerous threats, call them what you want. They will impact all of us, we will all have to deal with these. It's not may it is you will have to deal with, right.

April: Yeah, good. And I know in our planning, we encourage clients to say between 15 and 20% of their income, currently. And one of the things I also like to point out to people is if you're not doing that yet if you're not, you're not at the 15-year-old, a 20% level, just know that it's not something that you can do overnight. You can't just snap your most times you can't just snap your fingers and make it happen. But it's a goal. It's something we want to strive for something we want to constantly be working towards. So I encourage people just to start today and you know, start saving if you're not saving today Increase your savings by 1%. There are some things that you can do to just go ahead and get started today.

John: Absolutely. And have an emergency and opportunity funds so you're not panicked if something happens. You're not having to destroy your retirement plans, because you need more money.

April: Yes, as much as we talk about, it's important how much you say. It's equally important where you say, so that's part of what we go through in our planning process. Okay, the next rest we're going to talk about is the loss of a spouse. And we go through this with our planning as well. When a spouse passes away, you may find that some of your income stops. So you want to make sure that you have plans in place to make sure that income continues on their succession plan around income, there are wealth transfer plans. So let's talk about how can income can stop at the loss of a spouse?

John: As you were making that comment? I was thinking about a couple that Jay and I met with last week.

She has a very nice pension. She took option one with the state of Florida. Because when she retired and went to the drop program, she was not married. Now she's we're two years later, she's married. And she had totally forgotten that upon her passing, all that income dies with her. So over 60,000 a year. That's a huge amount of money.

April: Yes, it is. And it's gone.

John: And she said, how do I fix this? Can I get them to change it? We can do this too late. But fortunately, she does have other monies and retirement accounts and she has life insurance so properly coordinated, we can help her with that. But fast forward and think in terms of in your own world. If you have not made the proper choices today. And you progress me too long, you may not be able to fix it. Or if you can fix it, maybe it costs too much money to do. So, the loss of a spouse is big. from your standpoint, the pension plan, Social Security benefits are reduced for somebody dies, right? You may collect the higher you will collect the higher income, the one income is going to be lost.

April: Right. And we see that even see some accounts that have set up that way. Most time unintentionally, but we'll find accounts that someone is set up where it's just income for one spouse and not the other.

John: We see it all the time. That pensions with annuities where people were not even told about how they could have instead of just a single-life option, they can have a joint-life option. And we believe that people should be shown their options and let them make a decision. It's your money, you should be able to make a decision.

April: That's right.

You know, John, when we're doing our retirement rehearsals, the first thing that will do for a client is we projecting forward. Here's what it looks like when we retire. We pull together all of their income streams and retirement. And we play what if? What if they take so security at 62? What if they take it for retirement age delayed age 70. What do they do with their retirement accounts? There are non-retirement accounts. So we pull all that together and look at what their retirements going to look like for them. And then we'll take us a step forward and say okay if spouse a dies first what happens to the income? If spouse B dies first, what happens to the income?

John: So definitely make sure we take a look at that. And what happens when they both die, right because of their children or grandchildren, or in my case great-grandchildren.

April: The next words we're going to get into is a sequence of return. And timing, as I say, is everything. It's not just the average of returns that you may see on an investment account over time. An account that impacts your financial wealth, but it's the sequence of those returns. And most people we find they do focus on a rate of return of investment or retirement account. And they also will focus on the average, what is my accountant done? What do they know? What's the average rate that I can see? And when we're going into retirement, it's not just about the average person when you're going to receive those returns, right? Especially if you're pulling money out of your retirement accounts.

John: It's more critical than... Because if you lose $1, you can't get it back. Okay? Especially if you're taking it consistently.

April: That's right. So the sequence of return risk refers to you have now stepped into retirement, you're pulling money out of your retirement accounts. And as John mentioned, if you pull money out and you're in a down market, that dollar or the amount that you pulled out of your retirement account or your investment account, it knows Longer has a chance to work for you. So what we're looking at is an example of investor a and investor be both of these investors have had the same average rate of return, but the sequence of their returns was different. So investor a, the first six years their account was up 6% then it was up 27. And then it was down 13 investors be had a different experience. Their account was first up 7% then down 13 and then up 27. So again, they have the same average, but a different sequence of when they receive these returns.

John: So let's clarify that so in the first six years, they both had 7% growth, yes. And then the world changed for them. 2008 hit and all of a sudden you lose a bunch of your money. So for one for whatever reason they lost money, the other made money. Correct?

April: Yes. Yeah. And this could be like you said it could be timing, maybe one person retired in 2008. And someone else retired years later, when we've had this bull market, it's all comes down to timing. Again, they've had the same average return, but the sequence was different and it really impacts their ability to have income in retirement. In fact, just looking at some hypothetical sequence of returns, you're looking at a new investor that had the more positive in the earlier years. They have income for an additional six years versus investors be who experienced a downmarket earlier in their retirement. This reminds me of the retirement Red Zone we talked about, about how important and crucial it is and those first five years before retirement and then the five years after retirement, the most critical time

John: Well, we are still seeing clients who in 2008 panicked, moved all their money over to money market phones, or CDs, parked if you will. But they were so worried about this very concept about losing my money, I cannot afford to lose any more money. By definition, they lost money because I missed out on the market, right on the market growth in the last 10 years. So some people out there listen to this are like, I don't care. I'm apartment money, words, nothing the guarantees because I don't lose any money. Basically, go back to longevity and inflation. When we do that, and we do it out of fear. When we do it out of fear we lose. If some of our money is parked there to be a strategic type of savings to give us liquidity. That's one thing. But we need the ability to be in the market because we don't know when it's going to be up or down. If we knew that you and I will be multi-billionaires and we would not be living in Tallahassee doing this work day you'd have to get on a plane come to fly to see it somewhere maybe I will send the Bahamas but not the Bahamas now.

April: So sequence has returned. So it's a real risk that, again, people don't normally think of because we're we are society, we're so focused on that average rate of return. Definitely, something we want to kind of keep our eye towards. The next word for and talk about is taxes. There's really there's, there are three different types of accounts and how they're taxed. So let's kind of walk through a little bit of this first on then we'll kind of get into how this will impact their retirement. Okay, so you've got a taxable account. I call this page ago, this is going to be a nonretirement account that clients will receive 1099 from every single year because there may have been some capital gain distribution, or they may have some interest dividends that come in and it creates a taxable event for them. So they are tax as they go for these are non-retirement accounts. There are pros and cons to all three of these types of accounts. You also have tax free. So this is these are accounts that grow tax-free, and if structured properly when they pull income out are also tax-free. You do contribute though post-tax, so you pay the tax today you put the money in the account and then it grows tax-free and you can pull money out of tax-free.

Again, if as long as it's all structured properly, and then you have tax deferred. This is going to be your 401k is IRAs, four three B's any type of employer-sponsored retirement account. This is your traditional retirement account. These are accounts that you contribute with dollars today that you haven't paid tax on. It grows tax-deferred but when you go to take money out of the It's taxable. So again, there are pros and cons to all three things. And we could spend an entire webinar going through them all. But then I'll kind of condense this and saying that the people that we see that have all three of these types of accounts, it gives them greater flexibility and freedom, as you mentioned earlier, to be able to make decisions around where they pull money out of which accounts and when it comes to taxes. 

John: Absolutely. Because if you're concerned about tax rates, I suppose that tax rates are low. They've been low for quite a while now. Economically speaking, and historically speaking, and most people will be shocked to know that for well over two-thirds of our tax history in this country, the tax rates are over 50%. Right, you go back to 1913. With the passage of the 16th amendment, you look at what the tax rates have done since then, this is a big number, a big number. And if we have all of our money in taxable accounts, we're told, maximize your 401k. your IRA is great. You're saving taxes today. Well, first of all, you're not saving any taxes at all. That's a bunch of little. You are simply deferring the tax into a future date. And if the date that you take your money out, tax rates have gone up, because whoever's in office as president and congress decide we will know revenue, guess what? They're gonna wheelbarrow waiting for you at the doors over time. If you truly are in the lower tax bracket, then that was a good decision. But we don't see that class we're working with they're retiring. They're in the same bracket if not higher.

April: That's right. They're not paying less tax we do not see and that's a common misconception that I'll be in a lower tax bracket when I retire. And that is not what we see.

John: Nope. Because people forget about the fact I got my pen I got my 401k I've got all this stuff for retirement income now got to add on top of that my Social Security, I've got to add on top of that any earnings on my savings account any dividends over on top on top on top.

April: It's all tax and then when you reach 70 and a half as of today, you have to start pulling money out of your retirement accounts, whether you want to or not correct. And that just gets again added on top or taxable income. Correct. So tax is definitely something we want to pay attention to. It's a little bit of an unknown because I don't know what tax rates are going to be 20 years from now, we can only work with what we know right now. So going back to having the flexibility if you have different types of taxable accounts, you're able to make the best decision at that time were to pull money from to supplement your income. The next words we're talking about is rising health care costs. This does go in line with inflation as we talked about earlier and also longevity. I will say though, what we've Is that healthcare is rising at a much faster rate than just inflation that we hear about in the media. So for example, in 2010, it was estimated that a married couple of age 65 would need about $218,000 to pay for Medicare and other out of pocket health care expenses throughout retirement. Now, but that did not include long term care. This is just Medicare and just out of pocket expenses. So back into 2010, that number was 218,000. As of today, in 2020, we're now projecting that people will need around a married couple Monique around 365,000. So you can see the change that we've had in just 10 years.

John: And many people are predicting it'd be much higher, much higher. And that's one of the reasons that I get serious. Learn about more about Medicare Social Security because clients were coming to us asking questions, then as I got closer to 65, myself, it was important to learn. And I think I'm pretty good at it. But I'm still learning things that I did not know. And there's a lot of moving parts to that. And it also depends on where you live. If you're living in, you might live in one state where the health care costs are higher than others. It depends on where you are, right? Or, you know, rural community. Are you living in Miami, New York, Washington, DC, it depends on where you are. So it's not just a flat number across the country varies by where you live, and the type of career you want.

April: Okay, so now we've gone through the risks of return. There are some risks that you may face in retirement. And you see there are some things you want to take a look at, but now we're going to dig a little deeper and a little closer at your own retire. So Everyone's retirement is it's different, it's unique. And what's important to me or what's important to john may not be important to you. So we're going to walk through a few questions to help you start defining what retirement is going to look like for you. So relationships, one of the things you want to think about as you're getting prepared for retirement, but who are the people in your life today? Are there friendships you want to rekindle in retirement? What are some things that you will do to help with these relationships? Are you going are there college reunions? Are you going to vacation with friends? What about kids or grandkids, aging parents, other people that you're going to need to support them and how will that impact your retirement?

John: I found in my own case, I had to help my mother. My natural mother had to help my stepmother and my dad died and had I not saved money, where we teach, would have had to tap into my retirement accounts. Our son was involved in a car accident in 2012 was not able to work, so we had to take care of him. So that had an impact on my income that I was bringing in, save less because of taking care of him too. So there are a lot of things that are unknown. When it comes to helping the relationships and our world that we care about. I would even include that your charitable interests or their organizations, people you care about, that you want to help them whether it's worth your time or your money.

April: That's right.

Yeah, we talked a lot about our clients. It's not just the financial piece and Okay, what's your income going to look like? But what's retirement going to look like for you? And you really need to have some clarity about how you've got all this free time because you mentioned earlier, what are you going to do to fill that time and make sure that you're still having An act when you have things to do. Okay, we also talked about housing. So will you stay in the home you're in now? Will you downsize? Will you move to another city and state? We talked about this a lot with clients about it, when are they going to move to be closer to kids and grandkids? Or, you know, having some of that, again, that freedom and that flexibility. We had some clients who sold their house and Tallahassee bought an RV and travel the country for what almost two years?

John: As a matter of fact, one of the podcasts we produce talked about that

April: Yes. And so they went traveled it all things they want to do for two years and they said, okay, we've had enough the road now then they sold the RV and bought a home and closer to kids and grandkids, right? So it's kind of fun. So it doesn't have to be always traditional. There's a lot of fun things that you can do in retirement, especially concerning travel. housing.

John: I say be creative and do what works for you to decide what you want. And then let's build a plan to get you there. But it was a knee jerk reaction. Most people say, Well, I can't do that. I can't afford that. Just this morning, the lady came at 830. We had to help her get rid of some stuff that she had gotten hung up, right? Get all that? Let's just talk about what you want.

April: What do you want?

John: Why do you want to retire on this day? This day? Why would you prefer it? And when people start talking about what they really want, including housing, all of a sudden, it starts getting clear. As the picture gets clearer and clearer as I'm getting your eyes examined, the doctor says which is better A or B? You say hey, click-click now which is where we'll be is better now. Okay, one more time. Take sleep. Well now as better sir They're getting clarity there they're getting it clearer to sleep. So the same thing with all these things was covered right now.

April: Yeah, they're all related.

John: Now related as well and you may have well-meaning friends who say we don't need that big house on the line, you know, it doesn't matter. What you need is what you want at this point in your life. Any point in your life really, and your have well-meaning Francis said Don't do this. Don't do that. But they don't they're not wearing your shoes. They don't understand what you're trying to do. And most people, most of us are guilty of being swayed too easily about what other people think.

April: Okay, talking about goes right in line with that, let's talk about that lifestyle. So what do you see your future looking like when every day is a Saturday?

John: What do you mean by every day is a Saturday?

April: Well, once you do retire, it's now not you don't want to work Monday to Friday now every day Saturday and Sunday, so what's that look like? Are you going to golf every day? Probably not.

John: I tried that, I did it five days in a row and I had enough of it.

April: So again, it goes back to what are we doing? Are we going to travel? Are you going to volunteer are their hobbies that you've been meaning to get around to that you haven't? This is a great time to start thinking about what are you going to do in retirement? And who are you going to do those things with back to the relationships, your health, we talked about health care costs earlier? Health care? It's for a lot of people it's an unknown in retirement because you're not sure what's going to happen later on. Some of the things you can do today, though, is really just taking an inventory of where you are today, health-wise, are there any you know, are there any major surgeries that you know that are coming that you're going to want to do before you go into retirement? So there are some of those things you can walk through and talk about as well. But healthy, get healthy Care. It is one of the most common topics or questions and concerns that we get about our people who are going into retirement.

John: It is complicated. We have people who don't understand how to coordinate Medicare with group plans. And they get in trouble because they didn't enroll a Medicare soon enough never pay a penalty. So I would simply tell people listening in, just pay attention to our announcements, because we do Medicare seminars and webinars from time to time. And I would encourage you to participate in that old competency as one on one about that.

April: Right. And also make sure you have a plan for it because some people retire want to retire before age 65. So before they're on Medicare, so then they have to bridge the gap for health insurance, acknowledge their group plan, and what are they going to do about health insurance before they're 65? So again, it's all part of the big-picture planning. You want to take a look at getting into some of the financial aspects. Oh, no. How do you earn your money today? Is there anything? Do you have a supplemental income? Do you have a side business? Is there consulting that you can do in retirement? You know, a lot of our clients, though, they'll retire from their career. Maybe they take a little bit of time off, and then they'll do some sort of consulting, some sort of contract work, if you will, to supplement their income. Because while they don't, they want to work full time. They want to still have the freedom and flexibility, as you mentioned earlier. And they also want to have the income that they like to have retirement, and that's one way to do it. How much debt do you have? Will it be gone by the time you retire? Is it important for you to leave money to your loved ones? How much are you saving into your retirement accounts, money markets? Do you have any other investments outside of retirement accounts, knowing what how those are structured? And then also how much is your monthly paycheck being used? four basic living expenses like your mortgage utilities, your cell phone, and will any of those expenses change your retirement? So that's some of the financial sides of looking at retirement planning. And Robert Merton wrote an article for the Harvard Business Review on the crisis and retirement planning. We actually have a copy of that john, we can send it to anyone who's interested. Very interesting piece I do highly encourage you to read it. One of the things that he points out is that people should be focusing more on what's their monthly income going to be in retirement, not just a network, not just having some magic number in the bank, but what's the actual income? They're going to be receiving retirement?

John: Yes. And I've had the pleasure of hearing him speak in two different venues. And what's cool about it is it's all based on academic research is not trying to get you to buy a product. And he's a Nobel Prize winner in economics. It's just good stuff. And I would encourage people to read and study and learn everything they can about the importance of saving and investing for retirement. And if you don't want to take the time to do that and just come see us and will guide you and we can give you plenty of stuff to read and study, hopefully starting here with these types of webinars or seminars or podcasts. And we have a lot of people who tell us they get a lot of good valuable information from that.

April: Okay, so looking at retirement, it's really it's impossible to plan financially when you don't know if you're planning for. So by looking at some of the questions that we went through today that in the question section can help you get that clarity help you have a plan, and you can use these questions to talk about with your family. So have a sit-down and have a conversation with your significant other or your kids about what retirements going to look like for you what you want it to apply your Do you have friends and family who already retired. What can you learn from their choices? both the good and the bad? Consider the risks that we've talked about, you know, how will it impact what you want to do in retirement, such as inflation outliving your money, making sure that you've done what you can to take those risks off the table. And then also working with a trusted financial professional, who has you and your best interest in mind to help you reach your goals? And that's one of the things that I think, John, we've done, we've, we've really committed to helping people with every aspect of retirement. And with that, because the truth is, they're all connected. And we've made it our mission to provide customized holistic retirement solutions. So regardless of what happens in the stock market, the economy, how it's doing now, how it's doing the future. Our goal is to make sure that you're prepared and that you're protected as you step off into retirement.

John: Absolutely, because things are going to happen. You're going to see cycles in the market, you're going to see corrections in the stock market, you can see low-interest-rate environments as we have now. If we live long enough, we'll see high inflation again will see high-interest rates. And thinking back to 1983 when I bought a house, the mortgage interest rate was 13% 13. money market funds are paying as much as 20% 20%. So when people talk about it's gonna say this way forever. No, no, it's not gonna stay low. The markets not gonna stay high is going to drop. We might even have a crash down the road, who knows? Those who plan properly will be able to weather whatever comes their way. If we get cocky, we get arrogant byways the only way we're probably going to get hurt. will probably hurt. But if we are planning and we have strategies in place, what is the tank Price go to 70%. Again, right what they go to 90%. Like, there was one time in our country's history is all of your money in retirement plans. So when you take it out, you're going to be hurt, right? But if you have some of it in Roth IRAs or deferred annuities, or mutual funds or stock portfolios, where's tax differently? Maybe you can offset that goes back to what you said earlier about the three ways that the money is the tax. But it's first important is to determine what it is you want. And then start working toward that. Whether it be with us or someone else, or by themselves, you get a plan and then stay focused on that plan. So you're not chasing shiny objects, whether it be a new product that you hear about, or Oh, the talking heads on TV until many moves all my money out of the stock market because it's going to crash tomorrow.

April: We can all be guilty of that right chasing the shiny objects?

John: Yeah, well, but I think the key is With your money, what works for me over the years I remember way back in the early 80s, a guy john savage is his name. He said you should have two savings accounts john, you should have your Save to save account and you're safe to spend. That's why I have zero guilt when he was in my wallet, where all my personal credit cards if I wish to spend it, I can go spend it, go for it. I know I can have that money to play with my serious money, different issues. I don't invade that. And then the nice thing is this point in my life some people just want to I don't have to go to work. I get to go to work. I don't have to sit here today. I could take the rest of the day off or not and then go back to a station or go for a ride on the same more show on the bicycle. But we have to determine what it is we want. And I'll say that 1000 times. What I want is much more important. What I need. Now my need and want the same thing. But I need a pair of shoes or my case cowboy boots. I'm at what? 20 pairs, I don't need 20 pairs but is more of what I want is for you ladies, you don't need 14 handbags or 900 pair of shoes... 

April: I might need fourteen handbags.

John: If you want it, you're gonna get it right. That's right.

April: Good. Yeah so I think as you said all you know, all that comes down to have we talked about before, which is having a plan in place, you know, having some clarity about where you are they what plan, you know, having a plan in place to get you to this retirement goal one day. So I encourage you to know, those, you know, listening in to schedule a time for a phone appointment, they can do that they can schedule a 30-minute phone appointment with me they can schedule with you, john with Ed or j on our team as well. And it's just an introductory call to get the process started. So this call would be more just to learn more about them what they're trying to accomplish. We can talk a little bit about our planning process. But really it's more about what their goals and concerns are, and questions they may have we covered a lot of material today. So there may be some questions they want to do again to you as well as other topics.

John: I agree. And I think it's time well invested will say spent because, in a 30 minute 20 to 30-minute telephone Obama, we can determine whether or not we're a good fit. And I think something should be said there. We don't believe in pressuring or pushing anyone to do anything. That's why we love doing webinars. If you've listened today, and you've learned something that you think would help you but you're not sure. Give us a call. We'll have a conversation with you. If you're to the point of where you know for a fact that that you want to meet with us then give us the columns I like to schedule on the public to come in and we'll meet with you face to face. So we can Be California bone face to face, some of our live events, whatever works for you.

April: So the best number to reach us on is if you're in Tallahassee, the best number to reach us at is 850-562-3000. That's the main number for our office. And you can just let that Jay or Debbie know that you'd like to set up a time for a phone appointment. You heard us on a webinar, and you'd like to set up a time for a phone appointment with either one of us John, John Currie or April Schoen. Also my information, I can be reached at 850-544-8464. I live in Jacksonville, but I traveled to Tallahassee for client meetings. But then we have clients all over the state of Florida and about 14 or 15 different states 

John: I've lost track.

April: So the location isn't as important when working together.

John: Where you mentioned technology earlier with modern technology, we have been able to do a Skype meeting or go to a meeting or join me. It doesn't matter where the client is, we can help them. We have a class where now we've done Skype meetings for Hong Kong, London, Rome, right? It's pretty cool, actually.

April: Good. Well, thank you, everyone, for joining us on the call today and we look forward to seeing you all in one of our future events. And John, thanks for taking the time.

John: Thank you for doing this. I'm glad you put this together and April these credits because this is a topic that she thought we should do to kind of summarize because in an hour and a half or three-hour seminar, we can cover a lot of stuff but I thought this is well done. Thank you for putting it together.

April: You're very welcome. Glad to do it.

Voiceover: If you would like to know about More about John Curry’s services you can request a complimentary information package by visiting johnhcurry.com/podcast. Again that is johnhcurry.com/podcast, or you can call his office at 850-562-3000. Again, that is 850-562-3000.

John H. Curry, chartered life underwriter Chartered Financial consultant accredited estate planner, Masters in science and financial services certified in long term care. Registered representative and financial advisor of Park Avenue Securities LLC. Securities products and services and advisory services are offered through Park Avenue securities a registered broker-dealer and investment advisor, financial representative of the Guardian Life Insurance Company of America New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian, North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue securities. Park Avenue Securities is a member of FINRA and SIPC. This material is intended for general public use. By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal, tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. Not affiliated with the Florida Retirement System. The living balance sheet and the living balance sheet logo are registered service marks of The Guardian Life Insurance Company of America, New York, New York Copyright 2005 to 2018. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities or Guardian and opinions stated are their own.

2019-89916 Exp 11/21

Required Minimum Distributions FAQs

They say that there are two certain things in life: death and taxes. And when it comes to your retirement accounts, taxes definitely come into play.

You may have thought you were saving big-time on taxes with this method. But here’s the thing: required minimum distributions mean you really only deferred those taxes. And when it comes time to pay, the amount could be surprisingly high.

We talk about what you should be doing now to prepare for that certainty, the rules you must follow, and much more, including…

  • At what age you are required to withdraw money first (and how this might be changing soon)

  • The different actions you should take in the accumulation and distribution phases 

  • Why RMDs aren’t designed to set you up with lifetime income

  • How to use your RMDs to maximize the financial benefit to you

  • And more

Listen now…

Transcript

April Schoen: Hi, everyone, welcome to another episode of the Secure Retirement Podcast. I am April Schoen and I'm sitting here today with John Curry.

John Curry: Hi April.

April Schoen: I am turning the tables on John today, I've got in front of me a list of questions that we commonly get asked by our clients on required minimum distributions. So we're going to go through some of these and talk about required minimum distributions, what they are and how they're going to impact your retirement planning. All right, John, you ready to get started?

John Curry: Let's go.

April: Okay, so first of all, what is required minimum distributions, and so everybody knows we call them RMDs for short, short that it's a little bit of a tongue twister so we call them RMDs is for short.

RMDs: What Are They?

John: The financial world calls them RMDs because the financial world loves jargon. I'm going to give my answer is the smart alec cancer required minimum distributions is the government's way of forcing you to liquidate your savings so they can capture the taxes that you've been avoiding all those years. So let's break that down. The money you put into retirement accounts, you think that you're saving taxes. Most people are not saving taxes. They're simply deferring the taxes from today until the future date, which sounds good. It sounds good, feels good. But then when that future date comes, most of our clients are going "ouch," because their taxes were bigger than they thought. So I'm sure I don't know all the where you want to go here. But if not, I'll circle back and we'll talk about taxes later. But it's going to be a big issue for some people

April: It is and that's the main issue with RMD is with requirement distributions is the taxes that you have to pay, and that a lot of people in were meeting with them. They don't even want to take it out. So let's break it down. So RMDs, when you reach age 70 and a half you are required to withdraw money from your retirement accounts, and the IRS has a schedule you have to follow. So we're going to kind of walk through some of that. But that's just a very basic overview of what is an RMD.

John: I hope that while we're doing that will also talk about some of the challenges with this RMDs because folks, we have an RMD calculator so that we can actually demonstrate what happens when you're taking money. Okay to cover that now?

So let's just suppose that I'm 70 and a half and I have money in my retirement account, it's just I've got $100,000 in an IRA for 57 deferred comp, 403b, or 401k, whatever, and I'm no longer working. I'm truly retired. The first year I have to divide the account balance by 27.4. Now that works out to be 3.65%. If you're wondering how I got that you simply divide 27.4 into 100. And that equals 3.65. And people say "that's not too bad." It's not too bad unless I have my money pared somewhere and I'm only earning 2% or 3%. So now I'm having to tap into my principal, aren't I?

April: Correct.

John: So now my principal goes down, down, down. So now when I'm 75, I have to take out 4.37%, because the factor is increased to 22.9. So the key point I want to make and you can elaborate on this April is as I get older, the divisor gets higher, which means I'm having to take out... excuse me gets lower, so I'm having to take out a higher percentage of my assets. So if I suffer a downturn in the market, or the low-interest-rate environment as we have now, then my money is not going to be able to perform as well because I'm being forced to withdraw money. That's why I back in 2000-2001, Congress allowed for the divisor to change from 16 to 27.4. Now how they got 27.4? I don't know, because in the past it was based on life expectancy 70-year-old had about 16 years ahead of age 86. But they changed it because people in 2000-2001-2002, we had negative stock market returns. So, people who are being forced to take money out, we're really getting clobbered.

April: Right there, what you're referring to there is the sequence of return risk.

John: That's correct.

April: Which is going to impact all of us when we are into retirement and we're taking money out of our retirement accounts out of our investments to supplement our income or because we have to because it required minimum distributions.

John: That's correct. And if we don't plan our investments properly along the way for the accumulation phase, with equally not more important is planning for the distribution face. I tell people every day, you've done a great job of accumulating money. Now, what is your game plan in the second half of the game? Think of what?

Well, the first half of the game is working and retiring. So when you get to retirement, and the official blows the whistle, hey, you're in the second half now. Your head, two touchdowns at halftime? Who cares? Doesn't matter. The game is not over until the fourth quarter now. So your games on over to you that? Right? So you accumulate it but now you had you spend it? How do you distribute those assets? And that's my focus and your focus, especially being 66 years old. That's where I spend most of my time with lunch.

April: Exactly. Good. All right. You alluded to this already covered some of this, but why is there an RMD, John?

Why Is There An RMD?

John: The short answer is so that the government can get their tax dollars back. If you think that the RMDs are set up to provide you with a lifetime income you are sadly mistaken, is not for that... it is not guaranteeing you anything. In fact, I just described in the right market environment stock market or interest rate environment, which right now is volatile the stock market, low-interest rate the lowest we've seen in 40 years.

We're in a position where people who have their money parked in money market funds, or CDs and they're having to take required minimum distributions, they're hurting you and I've seen that dozens of times. I'm thinking of clients who came in their money market was paying what was a point one 7% time until we turned it around for but it's more important on your retirement accounts that you have guaranteed streams of income coming in, that in most cases will be much higher than our Indies, which leads to another discussion somebody will say, Well, I don't move the armies anyway. And you'll move to take out even more when Yes, because from a strategic planning approach isn't Or to do that, take it to pay the tax, then reinvest it into whatever you were doing.

April: Right, exactly. Okay.

John: So when we cover this a little bit, but when must you start taking your requirement distribution, you have to do it at 70 and a half, although right now there is a bill in Congress, the house has already passed their version of what's called the securities act. And the Senate will take it up. And then if the President signed, it would be law, this portion of it would be extending RMD is from seven and a half days, 72. That's only a year and a half. I don't understand why they're doing that. I have been preaching this for 35 years, there should not be a required minimum, they should leave you alone. If you don't want the money. It's okay. They get it when you die. But, again, is a way to get those tax dollars back that they have not gotten all those years, right. It's a great plan. By the way, if you understand what this is all about. They encourage you to maximize your IRA your 401k right so that you have the government as your partner. So Silent Partner, but they're not so solid at the end of the trip. That's right. I want my money.

April: I like the analogy of taxing on the seed or on the harvest. Yes. So the idea is if you're a farmer, do you want to be taxed on the seed? Or do you be taxed on the harvest? When you have money in your retirement accounts, you've already made the choice that you're going to be taxed on the harvest. So you put in a small amount now it's going to grow into the future. You're going to take it out in retirement and you're going to pay a larger tax later.

John: Well, but maybe not. You’re maybe like the farmer, this might be one of the few years along the way that you lose all your crops. You might lose your money, you don't have to worry about the tax. I hope that's not the case. But a lot of people in 2008 experience that they could you imagine walking into retirement in 2008 and all of a sudden you lost like some of our clients who came to us? They lost 30-40 sometimes the highest ourselves at 51%. But he was very aggressive. But our clients don't experience that they will listen to us because we say don't put all your money in that has a diversified to give you protection. Right. And this is not about investments on a bit, but it is about making sure that you can handle the distribution phase that's required on retirement accounts.

April: Okay, so, yes, you have to take required minimum distributions in the year that you turn 70 and a half. Now, the IRS will allow you to delay the first year until April 1 of the year following when you turn 70 and a half. I'm not sure why they do that, but they will allow you to do it the first year. If you do that, if you delayed the following year, just know you have to take out to RMD that year, so you gotta take out your first one and your second one. So much Is the time it doesn't make sense for people to do that. From a tax planning standpoint,

John: I don't understand why anyone would do that. I've only had a few people in my 44 years of doing this, do it that way.

April: And so how much do you have to take out? John, you talked about earlier, the number for the first year is 3.65%. That's what it equates to. The IRS does have a formula that you have to follow. There are different factors and they change every year. And we're going to get into that a little bit too. So what types of accounts are subject to required minimum distributions?

John: The short answer is pretty much every retirement account you have other than a Roth IRA. a Roth IRA does not have a required minimum distribution for the retiree. What's interesting, though, is upon your death, the beneficiary has a required minimum distribution, which is interesting. Yes, because they don't have to pay taxes on it correct. But they still are required to take money out has never made sense to me. And then what about a Roth 401k? Same thing. And the key to remember is this, we're gonna get into this in a few minutes. I know from the standpoint of how to do it. But if you have money in any type of retirement account, you've not a paid tax along the way, you can just bet that there's going to be a forced liquidation of called an RMD to make you take it out.

April: That's right. Okay, so let's say someone has a 401k. And they're still working, and they reach seventy and a half. Do they have to take an RMD?

Do You Have To Take an RMD?

John: Well, I'll let you answer that because of our friend that we had this research for her. So why don't you take that?

April: The general answer is no. If you are over the age of 70 and a half, 70 and a half, and you're still working, you do not have to take an r&d on your 401k unless you are a 5% or greater owner in the company. Now, you'll also want to pay intention to your plan document for your 401k. And in the case of any change anything that's different inside your plan. But as a general role, as long as you're on a 5% owner or more, you do not have to take your RMD and your 401k.

John: And that brings up another question because what led to this research was asking this question, should you keep all of your money in a company 401k? Or should you as soon as your plan document allows it, move some of that money to your own IRA? There's much more flexibility with IRA planning. Our friend Ed slot talks about this all the time. It is a recognize IRA expert CPA, he doesn't sell financial products doesn't care what you do. He just sells information. And he is of the opinion that getting it as much as possible into your own IRA is better. We can have that discussion another time or with people one on one if they want to have a final parameter come in here again.

April: Okay. Do you have to calculate your RMD every year?

John: You do, in fact, it's done for you by the financial institution, that the burden is on you to make sure it's done. So every now and then somebody was arriving, the company does not do that for me of the bank or credit union, Iris doesn't care. That's your responsibility. However, their institutions are now required to send you something showing you what that calculation is, right? And the reason I did that is this arbitrator, he says, we want to make sure nothing falls through the cracks. So when they send you that they're also sending it to you.

April: And so how much is your r&d is taxable, so the amount that you have to take out of your retirement accounts, how much of that is considered taxable?

John: It's all considered to be taxable with but you may not actually pay tax on so for example, most of the people who work with us and not the case but because of the standard deduction being so high now 24,000 for a couple. So if you're That's the only income you have is what you're getting from, let's say social security in your eye, right? If there's 24,000 or less, you'd pay no tax. Right? But if you start adding your IRA on top of Social Security, a pension, etc, then you may find that you're in a higher tax bracket, not lower.

April: Okay. John, we get asked this question all the time. So how do I avoid paying taxes on my RMD?

John: Well, you can't, somebody is going to pay the taxes. So you're going to accumulate money, you have to defer the tax while you're growing. And then someday, when you start enjoying the money, either you or your spouse or your kids or grandkids or in my case, great-grandkids, somebody is going to pay the piper. You're going to pay to hear the music. Now, there's an exception. There's only one exception that I know of. And that is you could use what's called a qualified charitable distribution. We've had several clients that just had one last week and he did it to give money to charity or church. And it does satisfy the RMD. So what you can do is you say, this lady, you did numbers better and I think it was 5000 was going to church and 5000 to her I think correct. 

And I remember one of my, my buddies his retired at that us professor, he had a lot of his money in his IRA go to the FSU Foundation, some to his church. And we did as a qualified charitable distribution, which means is not income to him, it goes directly to the charity. And for most people, that's the best way to get money now. Because if you are not able to have individual deductions because of the standard deduction is so high, that might be the best way to do it. So we tell everybody, let's at least look at that for you. But you have to be 70 and a half, you have to be eligible for RMD. So Do it. Because I'd people hear about it go, I want to do that. But you're 61 you can do right have to be 70 and a half or older to take advantage of that.

April: And is there a maximum amount that you can do QCD on the qualified charitable distributions?

John: Yes, sir. It is $100,000 per year. And that's now permanent and the new law for a while it was not, it was we may let you do it may not. It was pretty iffy there for a while, but now it is permanent. Nothing is permanent. Congress can go in there and change all that stuff. But as of right now, that is permanent... temporarily.

April: Temporarily, I like that. Okay, so what happens John, if you don't take your RMD?

John: Well, this is where the fun begins. Because I've had to class where this happened to the moon in my career, was an attorney who knew better. He said, I'm not going to take it... they won't ever catch me. They call it and they charged him a 50% penalty... five zero, on the amount he was supposed to take. And then let's just call 10,000. So he had to pay 5000 or pounding. The income tax on it was roughly 30%. That's $3000. So he had to pay $8,000 in taxes on the $10,000 distribution.

April: Ouch.

John: The second one was a little old lady that had been a client for a long time her husband had died. And one year she just flat forgot it. Yeah. And so, I went with her to the audit. It was cool. I wish I had a video of it, it was very good. She just said I forgot it. I didn't understand all of it. Just put it all in the drawer, my taxes. I just totally forgot it. And the lady with the IRS says, "I understand, that does happen." She waived the penalty. I'm told that now it's tougher to get that done. But that was back in were lowered in might have been like '89 or '90 somewhere in there.

April: Okay.

John: But it was interesting to see how that lit handle. I did not get to see the audit with the attorney. I wish I could have said he has since passed away too. But he was pretty cocky and arrogant about stuff. His attitude was, I'm smarter than you because I'm a lawyer. Right? Well, he wasn't smarter than they will catch up to you. That's right.

April: Okay, so this is a common question that we get is, what do you do with your required minimum distribution?

John: Well, people like me, we know that there's only one answer that you spend it on your grandkids and great-grandkids. The short answer is obviously you do whatever the heck you want with it. We have clients who will take it out and grumble and complain that happened to take it out and pay tax. And so here, this is something else for me. We have others who will use it to buy life insurance because they want to leave more money to their children and grandchildren. We have others who will donate it to other charities, which they shouldn't. They should use it QCD way, but they'll do it after the fact and tell us why you go down this. We have other people who, they'll, they'll literally just give the money away. They'll give it to their kids and grandkids.

April: I'm thinking of several clients that they take their requirement distribution every year. Thinking of one couple, they take a quarterly and they use it to go on a trip. Yes, every quarter they get their RMD payments in and they use that money to fund a quarterly trip.

John: That's a nice couple we saw last week. Yeah, there I was thinking the same folks. Very nice. But it comes down to really spend it on whatever you want. If you don't want to spend it, you want to save it, you just pay your tax on it and reinvest in something else.

April: I was thinking of the other couple, they'll take their requirement distribution and are using it to fund house projects. Yes, renovations. So it like you said, it comes down to doing what you want with it. But you can save it. You can spend it, you can reinvest it. It's up to you.

John: Absolutely. Absolutely.

April: Okay. And John, as we wind down here, one of the last questions that we go through with clients, it's probably one of the more important planning questions and conversations we have with clients. But do you have to take your RMDs from all of your accounts? So let's say you had multiple retirement accounts, do you have to take an RMD from each one?

John: The, the answer? The answer is yes. You have to aggregate all of them. So little more complicated, but let's just say you have four IRAs, you have to add up the IRAs divided by 27.4 to get the number and then once you have the number, they don't care IRS department...Treasury, they don't care if you take it pro-rata, month by month or four months... which leads to some tremendous planning opportunities if you know how to do this, I am still amazed at the number of people including tax attorneys and CPA is that I know personally because I'm past president the estate planning counsel who either didn't remember or didn't know or just flat forgot that you had that ability.

I'm thinking of a lady that I'm working with right now, in fact, a very dear friend she so went "John, totally, if I ever knew that I forgot and our gratitude just admitted that upfront, she says so there's plenty here so yeah, we can let one account keep on growing to take income from the other. She said that is fantastic because it fits perfectly with her desire. So let some of her money grow. Okay. But also, I'd like you to talk about it for bad...  because we see this every day we have clients we have money and for the three be annuities at the university system. We have clients who have 457 deferred comp plans and a high res touch on how I was gonna, I was glad you brought that up very important. It's not just all of your retirement accounts, the IRS looks at each different type of retirement account. So if you have multiple IRAs, you can take your RMD from one IRA. If you have multiple for three beats, you can aggregate those and take it from 143 B. But if you have an IRA and a 403 B, you have to take one from each, or an IRA and a 401k. You have to take one from each.

We have clients who have all that have one of each, and then there they've misunderstood the rules. They heard somebody told them about the aggregation and that they can take it from one of the others to know you have to take it from all four. And what you can do is you can move money from 401k into your IRA or have a separate IRA. Take it from one let the other one grow. As long as there are different categories you can do it.

April: Very important to pay attention to that.

John: I think I think that the key April and I say this every time we talk, you have to have a process. I plan a methodology, if you will, where you look at everything and don't overlook stuff. And that's where the retirement rehearsal that we help people with brings because we look at everything Social Security retirement accounts, your pension if you have one for one case, whatever, that it allows you to test drive this stuff before you actually have to do it.

April: That's right. Okay.

Great. All right. John, is there anything else you want to add? Thank you for taking the time today to go through some on requirement and distributions. Is there anything else you'd like to cover?

John: No, I think we covered it all appreciate you doing this. This gift gave us the ability to do this and just 20-25 minutes There's a lot more to do we could do an entire day on this and some of our seminars coming up will do it. But I would encourage people, listen, our webinars want to do them if you can come to one of our seminars come, and we cover this and more and even more topics and more detail.

April: Great. Perfect. Well, thank you so much again for your time.

John: You're welcome. Thank you for doing it.

Voiceover: If you would like to know more about John Curry’s services, you can request a complimentary information package by visiting johnhcurry.com/podcast. Again, that is johnhcurry.com/podcast, or you can call his office at 850-562-3000 again, that is 850-562-3000, John H. Curry, chartered life underwriter Chartered Financial consultant accredited estate planner, Masters in science and financial services certified in long term care, registered representative and financial advisor of Park Avenue Securities, LLC, securities products and services and advisory services are offered through Park Avenue securities a registered broker-dealer and investment advisor. Financial Representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian, North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue securities. Park Avenue Securities is a member of FINRA and SIPC, this material is intended for general public use. By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal, tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. Not affiliated with the Florida retirement system. The living balance sheet and the living balance sheet logo are registered service marks of the Guardian Life Insurance Company of America, New York, New York, copyright 2005 to 2018. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities or Guardian and opinions stated are their own.


2019-88759 Exp 10/21

Clearing Up Medicare Misinformation

Like any government program, especially one involving millions of people, Medicare is complicated. 

What’s covered? What will it cost? When should you sign up? Which “part” should you join? Where can you seek medical care? 

Those are just some of the questions those reaching eligibility age are asking. And the thing is, the answers are different for each individual. But there are some guidelines to consider as you make your decisions.

The biggest thing to remember: Medicare does not cover everything… including some services that are super-important as we get older. But there are ways to prepare for those expenses.

We talk about that, as well as...

  • The best plan(s) for those planning on international travel

  • Why it’s often a good idea to get a supplemental plan

  • The four parts of Medicare – and what each one covers

  • Medicare Advantage plans versus “Original” Medicare

  • And more

Listen now…


Transcript

April Schoen: Hi, everyone, welcome to another episode of the Secure Retirement Podcast. This is April Schoen and I'm sitting here today with John Curry.

John Curry: Hey April.

April Schoen: Glad you guys could join us today, today we're doing something a little different, instead of John's normal format of interviewing special guests, I'm going to do a little bit of interviewing him a little bit today. But we're also really going to be talking about Medicare.

So we're going to go through some of the basics around Medicare, how it works, and how it's going to impact to your retirement income planning. So you may hear a little bit of shuffling around, john, I've got some notes in front of us. Medicare, as you know, is a very complicated subject. When we have our live seminars and workshops on Medicare, they're at least an hour and a half. Sometimes we've had them as long as two hours, getting into all the nitty gritty details of Medicare.

What Is Medicare?

John Curry: Yes, and referring to that Well, we're going to do folks is just give you a overview, an overview. And we're just going to look at our seminar pages or notes that we use to do that. And some things, I'm just going to probably pop out and share some of my experiences, April, since I've been through this a lot of clients, as you know, I'm thinking about half a dozen people right now that one of our favorite favorite guys who's constantly begging about social security and medicare in a good way, but it's forced us to learn, so I will make a comment. Over the years, I've been doing for 44 years, Friday will be starting my 45th year, I've had the pleasure of helping a lot of people. And every time they come to me with a challenge or problem, and I learn it, it helps them but it helps me with my own personal planning, and it allows me to help other people. Okay, so where do you want to start here?

April: Well, first, I was gonna make a comment to John, that you're, you're 66, you'll be 67 in December. So just to get some context here, you you've already gone through this yourself, you're already on Medicare, you're collecting Social Security. So some of this that we'd go through, I think it'd be very good for you to give some of your firsthand experience about working with Medicare.

John: I'd be happy to, let me just start off with that then, and it will hit some of our notes here. So we might be able to make it even briefer. Because we could spend, like you said two hours on this, right. And we're going to try to do this in about 20 minutes. And I would encourage everyone to come either come to one of our full blown webinars, or come to one of our seminars or come in for a visit with us if they will take. But in my case, Medicare's will differ. You're supposed to enrol when you're 65 years old. But there's a provision that if you are 65, and you're covered under a group insurance plan that has 20 or more people, then you can delay it, we'll get into that later. I waited until I was 66 in a role and Medicare Part B. So we'll touch on that later. But that was the first thing for me that I I knew about it, but I didn't really understand. So when people say you have to enrol a Medicare at 65 That's true. For part A, part B it may not be true.

April: Right. Okay. Well, let's just kind of start at the top here. So John, what is Medicare?

John: Well, basically, it's a national health insurance program. I find a lot of people talk about, well, we need some type of National Health Insurance Program. Well, we have it already. And that's why some people in the running for president are saying we should have a Medicare for everybody, to care for all. It is administered by the Centers for Medicare and Medicaid Services. And as you enroll through the Social Security Administration.

April: Who is eligible for Medicare?

Who Is Eligible For Medicare?

John: The short answer is everyone over age 65. For sure, all US citizens. And if you're a legal resident for at least five continuous years in the US, then you qualify. And in certain cases, people who are under 65 can qualify, April, if they are receiving certain disability benefits from Social Security.

April: Right. Okay. Okay. So I know there are different parts of Medicare.

John: Yes. Some moving parts too.

April: Yes, exactly. So let's walk through John. And if you could talk about the four parts of Medicare,

John: Okay, well, the most common one is Part A, that's the one you have to enroll in. And when you turn 65, that code covers what we call the hospital insurance part of it. Part B is what covers the medical side of paying the doctors. So A is hospital, B covers medical doctors, then you have a part C, part see is what we call Medicare Advantage. We'll come back to that one. Part D is my Medicare prescription drug coverage. 

So the question will come down to does someone take a and b, a and d, or do they qualify or prefer to go with a Medicare Advantage plan? So let me explain the difference in those two plans. Anything you will throw in here before I do that?

April: No, you're good,

John: Perfect. So with original Medicare, which is the way I went, I chose to go with Part A and Part B, and I purchased a Medicare Supplement policy. Not wanting to do that, I actually took a look at studied CHP advantage, which is very popular in our community. But because of my desire to be able to travel and go anywhere I wanted to and not worry about a bill. And don't let the ND us now, but also foreign travel. But I wanted a plan that I walk in the door, hand over my Medicare card, my insurance card, and that's it. But for some people, some of our clients who especially work with the Florida retirement system that are covered under CHP now, they find that the CHP Advantage Plan is very good for them.


April: Now, and so CHP is for people in the Tallahassee area.

John: That is correct 

April: What about people who are under FRS but are not in Tallahassee?

John: Those people, many of those will choose the Blue Cross Blue Shield Advantage Plan. And there are others out there is so and when just full disclosure, neither April nor I are licensed to sell Medicare Supplement policies, we're not involved in that side of the business we don't want to be so that we can be clear and not have to worry about getting a conflict of interest. I tell people, if you want to meet my guy who wrote me my policy, I'd be happy to introduce you. But I'm not going to tell you to do it or not do it. That's up to you. But I'm I agree will tell you that for me. The Original Medicare approach made more sense for others as not. Now, I'd like you to share what we experience with a gentleman who had Medicare Advantage when he was traveling had an issue. And they said they've made that better. It's not quite as onerous. But would you take a minute to share that?

April: Yeah, so we have a client who lives in Tallahassee retired in Tallahassee, but they also have a second home in the mountains. And he has a Medicare Advantage plan, as John was mentioning, and so while traveling to their second home, he had a sinus infection, something along those lines and goes to the hospital, his Medicare Advantage plan, they did not cover it, they decided to deny that claim. And then he was getting bills from the hospital, you know, to cover the full cost of him going in for those services. So for him, it made more sense for him to then look at having Original Medicare with a supplement it since he's going to be doing so much travel outside of the area where he's covered under the Medicare Advantage plan.

John: And then the best way to think of this folks is think of the Advantage Plan is being outsourced to a private company. And they give you parts A, B and C in one package. That's the best way to look at it. In my case, in my wallet, I have not only my Medicare Supplement policy, that card also have something or my drug card, a different plan. And that's more interesting because each year you can change during the open enrollment. And my representative I taught just last week, we know will be changing my drug plan this year. I think it's in October. But anyway, the is complicated. But it doesn't have to be as complicated as some people make it was really two choices, Original Medicare, or Medicare Advantage,

April: Right. And I would just say to decide between these two plans, it's all going to come down to your individual situation. And so when we are having our seminars or our webinars on Medicare, I do think that's helpful. But also spending time walking through our planning process, we can walk through some of these, these issues between the two plans and talk about them. 

John: Right. And again, I'll say this, we don't claim to be experts on Medicare, or social security. But we know a lot more than most people because we read and study it. I'm reading something every week on the stuff. Sometimes daily. I want to talk just a little bit about the enrollment side to the and I mentioned this earlier that if you're in a group plan that has 20 or more people, then you don't have to automatically enrol in Part B at age 65. With Part A you do, you and I working with someone right now who delayed and they're probably going to have to pay a penalty, right. And let's talk about that just a minute. If you do not enrol in the great time frame, you may have what's called late enrollment penalties. And that means that your Medicare premiums are higher, and not just for a little while as a higher cost for the rest of your life. So this is important that when you know it's time to do it get in there. We tell people to start checking into this at least three months before you are age 65. Right. So, you know, it just we could spend a whole session just on that. But for me, it was critical that I made sure I had proper coordination of benefits. I didn't lose anything from my group plan going to Medicare Part B, right. So it's important that you enrol on time, it's important that you do it in a manner where you don't have a lapse of coverage.

April: Great. Okay, so talking about enrollment, how do you enroll in Medicare?

How Do You Enroll in Medicare?

John: Well, for me, Part A was easy. You won't believe this. I know since I love computer stuff so much, I went to the social security website. I went right into the Medicare and I walked through there, typed it in, enrolled in Part A told him that I was still under group plan, wanted to defer on Part B, and it worked. I got a phone call five days later. And the representative was very nice, very professional. Walked me through what I had done. Here's what your benefits will start, etc.

April: Okay, so you did all that online through the Social Security website? That's correct.

John: Okay. That's correct. Same thing when it came time to enroll in social security, I did same thing online.

April: Very good. Okay, so switching gears from enrollment a little bit, let's talk about what Medicare covers and what Medicare does not cover. Okay. So here's what Medicare covers. If you have a stay in a hospital, it's going to cover 100% of hospitals day for the first 60 days. Okay, for your medical services, with this is going to be your doctor visits and any sort of outpatient services. Medicare will cover 80% of Medicare, the Medicare approved amount. And it's also going to cover some preventive services like flu shot screening things along those lines.

John: And that's why you want to have backup, you know, you got to do what I did. But that's why I chose to have the Medicare Supplement policy. So that if I'm in the hospital for longer than 60 days, I've got a plan to cover that gap, right. And same thing, anything, the 20% would be covered. When I had my surgery back in February for an artery, an aneurysm repairing my rod artery, I walked in, I gave him the two cards and it was it. And then when I did it in July, for the left leg, same thing, I just I haven't gotten a bill yet. I got one. And I call them a guy, he said don't pay it, it is crossover in the mail. Don't worry about it. So the Medicare Supplement gives you additional peace and security.

April: And the Advantage plans do too, it's the Original Medicare that's covering up to that 80%. And then that's when you would have an advantage plan or you'd have a supplement to cover the gaps.

John: That's correct. That's correct. But it's also noteworthy to talk about what Medicare does not cover, you want to cover that?

April: Sure, yes, I agree. So a lot of people think that Medicare, especially when you're going into retirement, that it is now going to cover everything, anything health related, they think that Medicare is going to cover that.

John: And that's not true. And this is key what you're about to hear folks, me they will not cover even $1 of it. So when you start learning about this, you'll learn to about 20 or 25 pages of the main one, but I still got my manual over there on the shelf of all the stuff they would cover. And then this one little page about what they wouldn't cover. So they will walk them through.

April: Yes. So what Medicare does not cover it will not cover Long Term Care Services. It's not going to cover care outside of the US. It doesn't cover dental care, vision care, hearing aids, cosmetic surgery, acupuncture, other alternative care. Those are some of the things that Medicare does not cover.

John: Right. And I have people constantly saying how in the world is it they wouldn't cover dental and vision?  Those are things that make sense that should be covered.

April: And we hear I hearing aids a lot to us, especially as we get older. It's more and more common that we want to hearing aids, and they are expensive. It's not covered. You are not wrong John Curry.

John: Blame it on everybody else. Right?

April: That's right. That's right. Okay, we can now get into... John is there anything else you want to cover about overall Medicare, I know, we want to talk a little bit about planning for future costs and planning for long term care.

John: The only thing I would say April is this is not as intimidating as some people make it out to be, is truly a matter of sitting down with someone who is knowledgeable and let them look at all of your financial resources and help be coordinated, the biggest expense people are going to have in retirement is going to be health care. Right?

Repeat that the biggest expanse that you're going to have in retirement, if you retired say 65 or 66, and you live 20 or 30 years in retirement, you're going to pay a huge amount of money. $300,000, $250,000 to $300,000 is what people are projecting if you look at studies. So if it's gonna be that expensive, what the best way to structure your assets? Because the premise of the paper something and Medicare brings come out of your Social Security check, right? And if you don't collect Social Security, because some people don't, then you have to pay them directly, directly.

But I would say just be just be aware, it takes planning. And it shouldn't be something you do in isolation, it should be okay, Medicare is another type of health coverage. I need to plan for that as part of my retirement package. Because most people take it for granted while they're working and the employer is paying all their part of it. And then all of a sudden, they're blindsided. It's going to cost me how much a month? You'd have seen that? We  see people who are paying more for their health care coverage than they paid on the mortgage payment. Oh, yeah. And then we see people all the time you look at their health insurance premise plus their out of pocket costs for medications is much more than they paid on a mortgage payment.

April: I want to reiterate some of those numbers again, for those listening. So it depends on the research that you look at. But the average couple will need around $280,000 to cover health care while they're in retirement. That usually breaks down some of the research we see it breaks it down. For men and women. For men, it could be around 130,000. For women, around 150,000, again, depends on the source.

John: And let's address it-- the one you just quoted, is the Employee Benefit Research Institute, they do a great job of reporting. And they have no vested interests are not out there trying to sell financial products, mutual funds or anything. Like there's because they don't sell financial products. You'll see some conducted by insurance companies, I love my insurance companies, I love what I do love the investments better. I like the fact that you're getting it from an institute that do not directly sell my product...

April: An unbiased opinion. Three more things I want to point out about the these numbers too are those are just averages.

John: Yes.

April: So the longer you live, our life expectancy is going to have a direct impact on our cost for care.

John: Well, it's not only that, I think in terms of my dad, my dad died at age 86. So I was thinking about this over the weekend talking with a friend, as you if I live as long as my dad, and I have 20 years ahead of me. Even with having open heart surgery in 2008, and surgeries on my legs are referred to earlier, I still think that because I'll take care of myself, I have better than average life expectancy. But who knows, right? So I don't know, I don't know how long I live. But I know this if I live a long life, I better understand that I'm going to have my health insurance premiums which are going to increase because of inflation. And medical inflation is much higher rate than just what we call economic inflation.

Meaning what that the cost of health care is much more greater and faster increase then inflation is. So I have to assume and I my plan is a 5% increase at least, has been between five and seven, depending upon who you listen to the one scare people have to death. But you have to take the mindset that health insurance and retirement is important. More important than now for most of us and is going to be expensive time we have to plan for it. It's like part of your planning for your children's education.

April: That's right. That's right, good. Good. Now the numbers we were just quoting about future health care costs, I do want to point out to that that does not include costs for long term care. This is just general overall health care costs that one may see in retirement and does not include if they had a long term care need. So long term care is not covered by Medicare. It's not covered if you had a supplement policy, as well. So if you had a long term care need, you would need some sort of other assets or insurance to help cover the offset those costs.

John: Correct. And by the way, I will say I'm one who does not have long term care insurance. I took the approach that because with the life insurance I have in place other investments, so security pension plans, that if I needed a long term care situation that those resources could be used. And who knows for sure, what will be the final judge? Was that a good choice or not? I think it's good because I could use reserves from my life insurance policies to cover a lot of things even now.

April: Yes, exactly. And we always say to all of our clients, we need a plan for long term care. It may not be like you said as long term care insurance, but we need a plan. And not just for long term care, we need a plan for long term care. But we also need to plan for how we're going to pay for these health care costs and retirement.

John: Well, let's be honest about it. If we live long enough, we're going to get sick. If we get sick, we're going to need to care. Right? If we need care we gotta pay for it, then we haven't talked about caregiving. Pretty much everyone listening to my voicemail at sometime will either be a caregiver or care receiver. Right? 

Unless we're fortunate just died in our sleep. And not be a burden. I will share a personal story real quick. My mother died April this year, she was very sick, went to a nursing home on a Thursday. On Friday, good mood, sharing good laughter with some people, and died on Monday. So you don't know you may go to a nursing home and be there for 11 years like my grandmother, you may go to a nursing home will be there five days like my mom.

April: Right.

John: So we don't know. And these are things that we we don't have a crystal ball. So we can't project accurately what we can do with our retirement rehearsal that we do with clients, we can help the project. And so if you have to use this money, here's how you could apply it.

April: Well, John, thank you for taking the time today to talk about and cover some of the basics on Medicare. Is there anything else you'd like to share before we sign off?

John: I just want to share one thing that does this as part of your holistic planning, get some guidance. And again, it doesn't have to be us... April's very good at this. I'm good at it. I'm a geek about it. I love this stuff and give speeches on it. In fact, I was honoured to be part of a presentation at my Rotary Club just a few weeks ago.

And the gentleman who was presenting he says, Wait, we got an expert in the room. Let's get Curry up here. So at the end of the meeting, I was asked to go out and share my experiences. So I would emphasize don't wait to the last minute, get some guidance, get some help. And but I'd say thank you for taking the time to do it because this is way overdue to have this for part of our podcast system. So thank you.

April: Thank you. All right.

Voiceover: If you would like to know more about John Curry's services, you can request a complimentary information package by visiting johnhcurry.com/podcast. Again that is johnhcurry.com/podcast or you can call his office at 850-562-3000 again, that is 850-562-3000. John H Curry, chartered life underwriter Chartered Financial consultant, accredited estate planner, Masters in science and financial services certified in long term care. The registered representative and financial advisor of Park Avenue Securities LLC securities products and services and advisory services are offered through Park Avenue securities a registered broker dealer and investment advisor. A financial representative of the Guardian Life Insurance Company of America New York. Park Avenue securities is an indirect wholly owned subsidiary of Guardian, North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue securities. Park Avenue securities is a member of FINRA and SIPC, this material is intended for general public use. By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. not affiliated with the Florida Retirement System. But living balance sheet and the living balance sheet logo or registered service marks at The Guardian Life Insurance Company of America. New York New York Copyright 2000 thousand five to 2018. This podcast is for informational purposes only guest speakers and their firms are not affiliated with or endorsed by Park Avenue securities or guardian and opinion stated are there own.

2019-88085 Exp 10/21

Clearing Up Social Security Confusion

There is so much wrong and misguided information – not to mention confusion – out there about social security. As a result, people make bad decisions that sometimes can be very hard to recover from.

We tackled the most common questions about social security, how it affects retirement planning, and what you should be doing now to prepare for a happy and healthy future with a steady income that meets your needs.

These are decisions you can’t put off any longer because what you do now will affect your social security benefits for a lifetime. 

Tune in to find out…

  • The basic calculation that determines your monthly benefit

  • Balancing income tax with social security – before and after you start collecting

  • The biggest mistakes people make with their social security – and how to avoid them

  • The earliest – and latest – you can collect social security – and why you might wait

  • The regulations regarding working while simultaneously collecting social security – and how much you can earn before you start to incur penalties on your benefits

Listen now…

Mentioned in this episode:

Transcript

April Schoen: Hello everyone, and welcome to another episode of a Secure Retirement Podcast. This is April Schoen and I'm sitting here today with John Curry. 

John Curry: Hey April.

April: I turned the tables on John today. I've got in front of me a list of frequently asked questions that John and I go through with our clients when we're talking about social security planning. These are the most common questions that our clients have for us on how did they plan for social security in their own retirement planning. So John, are you ready to get started?

John: I am. But before we do that, I will take a moment and explain to everyone your background, because you're very knowledgeable in social security retirement planning. You've learned a lot, you've been helping a lot in our class. So just share your background, please.

April: Thank you for that. So for me, I started in financial services back in June of 2010. So a little over nine years ago, and I joined John Curry's team here in North Florida Financial about five and a half years ago. My focus has primarily been on retirement planning, especially for members of the Florida retirement system. That was my experience with the other firm. And then also continuing on working here with John. So it's one of the things that I love doing is helping our clients prepare for retirement and as they're getting ready to step off into this new adventure.

John: And obviously, for me, for those who know me, it's important to me because I grew up in a state employee family. My grandfather worked for the state of Florida Department of Transportation out of the Phoenix Springs, and my dad worked with the same office. And every morning or day, they would get up and ride together to work with a local friend too. So I grew up understanding that environment, and then later discovered, April, that people were getting either no information or misinformation of how to coordinate the Florida retirement system and social security and Medicare and how do you take money out. 

So all these issues got me to the point of where I have a passion, like you, of helping members of the Florida retirement system. We have other clients who are business owners, doctors, lawyers, Indian chiefs. So we have people across the spectrum, but our number one focus is helping people with retirement income planning. 

April: Right. Agreed. Yes, very good. Alright, so let's get started and dig into some of these questions about social security.

John: Very good. And I like it to be where we have a conversation about it, instead of just me hogging the mic. Let's just share it together. So as we're going through this, folks, April may jump in, I may jump in. And if we step on each other, we'll just back off and let everyone finish their thought.

April: Sounds good. Okay, so let's just kind of start. I want to start with some of the basics around social security. So how do you qualify for social security benefits?

Qualifications for Social Security Benefits

John: Well, the short answer is you have to work for 10 years. You have to have what they now call 40 credits. So then that's basically working four quarters out of counts for a year. So 10 full years of working and you and your spouse would qualify.

April: That's right. So if you have earned your 40 credits, or you have 10 years of working history, then you and your spouse both qualified to receive social security benefits, retirement. Correct. Okay, and how are benefits calculated?

John: Well, this came up just recently, and in fact, last week, because the guy was asking about this. And it's based on the average of your highest 35 years. And if you only have 30 years of working, then they're going to plug in zeros to make up those. And when he realized that, he said, Whoa, wait a minute. So it's going to behoove me to work another five years. I said well, based on your income level you're earning now you're making the highest income you've ever earned? 

The answer is yes. And then he wanted me to calculate for him how much of a difference it would make and I said I can't do that. Social security can do it for you but I don't know how to do that. And I would be concerned it I'd be incorrect with the numbers anyway. So if you are in a position of where you're not sure, then by all means, ask them to do an audit for you and give you an estimate of your benefits.

April: Good. Okay, and when can I start collecting so security?

John: Well, the earliest you can collect it is age 62. As far as retirement benefits. Now, if you're a widow, you can start collecting at age 60. But that's a different topic. But as far as retirement benefits, the earliest I can collect it is 62. You can delay until full retirement age. We'll get into that later. And then you can leave and farther out to age 70 if you want to, but the earliest you can get it is 62.

April; Okay, very good. And on your full retirement age, how is that determined?

John: The short answer is based on how old you are. Really is based on your birth back in the 80s, when social security went through a radical change. They changed it up. So instead of some people still think that full retirement age is 65. We see that a lot, but it's not. If you were born after 1943 through 1954. Its age 66. 

If you were born after 1954. So as an example, 1955, it would be 66 in two months. So for each year thereafter, you have two months. Why they did that, I have no idea. But at age 55 it's 66 and two months, then it goes 66 and four months, 66 and 6, 66 and 8, 66 and 10. And then voila, 1960. And later, it's 67. So what I just tell people is, if you were born, after 1954 it's going to be 66 and something if you're born after 1960 is going to be 67.

April: Age 67. Good. Yes, and that makes it a little fun from a planning standpoint. But determining when your retirement age is, I was just working with some clients last night and you know, that's and his was 66 and eight months. And then hers was age 67 was her full retirement age. So trying to work through some of those things.

John: Yeah, I never talk about social security here. But let's talk about where this fits in. See social security in and of itself as a good benefit, but if you're guilty of looking at social security as a standalone micro, and you don't incorporate it in a macro planning process of some kind, I'm afraid you might make a bad decision. 

Some people should take it at 66. We'll get into that later, full retirement age, some people should wait to 70. But unless you have a dynamic, ongoing picture of what retirement looks like to you, I know in our case, we do what we call a retirement reversal. So people can see what happens, but they get 62, 67 or 70. And our clients are able, we can toggle on and off and I can see that.

April: Exactly. The client I was working with last night, his original thought process and we're going to get into this little bit later, was who takes us good at age 70. I said, Well, can we look at the alternative? What if you take it at 68 when he plans to actually retire? It's only two years. So some people may say that's not a huge difference in either benefits or how that's going to affect your overall plan. But we were able to walk through and show Okay, well this is what happens if you were, when you retire at age 68 and you take social security versus delaying it to age 70. 

John: And that's a good point. Just because 66 or 67 or 70 doesn't mean you can't take it in between. Some people should take it at 66. I did. I took my benefit. I was 66 on December 9 of last year, I started my benefit in January, and also 2pension checks coming in. So on paper, I'm retired. But as you and I both know, I'm not retired by any stretch of the imagination. I'll be like George Burnsn still working when I'm 100 years old, but doing it on my terms. 

But I think that the correct answer for people is if you don't need the money, delay it. And we'll talk later about why that's beneficial. But if you in my case, I don't need the money. But I chose to take the money because of the time value of money. I want the money today. And I'll tell you, this is not part of our questions but I'll tell you what I'm doing with part of my money. I'm spending on my grandkids. I'm doing things now. And then somewhere in your questions. I saw that second. We'll come back to that one later.

April: Yes. Okay, well, let's get back to some of the most common questions we get about social security. What is John, what's the average monthly social security check?

John: $1461, as reported by the social security website. That's not a lot of money. But on the one hand, there are a lot of people out there in this country, that's all they get. One of the reasons I'm obsessed with helping people with retirement planning is when my grandfather retired the state of Florida, he took option one, and he had social security. That's all he had. When he died, option one died with him with the state pension plan. 

All my grandmother had for the rest of her life, another 26 years, was social security. So my dad and my uncle had to help support their mom. And just, he had no life insurance. He didn't believe in it. So he left her a fixed. Now the good news is there was no debt. But you start looking at those checks. That's why I said if you look at it from the macro standpoint versus macro, you might make some bad financial decisions.

April: Right. Yeah, definitely. Okay. And if someone wanted to look at their own earnings record, and to see how much they would receive on their own record, how would they go about doing that?

Keeping Track of Your Social Security Benefits

John: Well, the easiest way is just go to the social security website, and go in and set up your own personal account. And I'm gonna defer to you on that in a minute. Because you're more comfortable doing stuff like that than I am on the computer, although I did mine. But another way that I like to do, I've been to the social security office on two occasions. 

I thought the ladies, the two ladies who helped me were very nice, very professional. I found their knowledge was pretty good. When we got into some of the more complicated stuff, they had to get back to me. One of the things that she said, You know, this inside out, don't you? I said not inside out, but I know it pretty well because of learning and studying it. But either get on the website or go to the local office and sit down with someone and get help.

April: The website, which you go to ssa.gov to create your own login and go in. You can take a look at your statement. Social security used to mail a statement. And so now you can go online and see them. And on your statement, it's going to show you if you take so security early at 62 what your benefit would be. It's going to show you what your full retirement age is and how much your benefit will be. 

And it will also show you what your benefit will be if you delay at age 70. So very importantly, those are the three numbers that we look at when we're doing our planning with clients. And now the client I was working with last night, he was able to also go on to social security, use some of their calculators and project how much his actual benefit would be at age 68. We are pretty close in our estimates of that. But he was able to fine-tune that number on their website.

John: Yeah, let's give kudos to the social security administration. They've done a good job of updating their website from time to time. But also you go there and get the trustees report, which tells, they're very candid and frank about the threats to social security going forward. And I would encourage everyone listening to this to go in and read that report. Some of it's dry, I'll admit that. You and I are kind of geeks about this because we love it. 

But folks, there's some good information on there. If you just take time, just go in occasionally and just kind of cruise through the website and just bounce around, you'd be shocked at what you learn. And if you don't want to do that, that's okay. That's why we do webinars and full-blown seminars on social security. And every client that we work with, we go through social security, Medicare, retirement income playing, we look at all that. 

Because that's part of your plan. It's not just okay to invest in an IRA or 401k, or a deferred comp, or 403B, and think that retirement is done. It has a lot of moving parts. It's like a beautiful Swiss watch. There's a heck of a lot of wheels grinding around and got to make sure they're all working together. 

April: That's right. Yeah. And today, we really wanted to cover basics and some of those frequently asked questions that we receive. When we have our seminars there are at least an hour and a half, sometimes two hours long on the topics, going into much more detail.

John: I'm gonna pick on you for a minute here. When April got the idea of doing this, we decided it made sense to take content that we've had. But do it in a manner of where you're busy. We know that keep it short and sweet to 15 to 20 minutes to give you an overview. Hopefully, what we're doing here, April, is getting people who are fulfilling their appetite to learn more. Because we see people who waited till it's too late. We still help them. But if they had done some planning, at least thought about it and got a plan of action when they got closer to retirement, those decisions would have been easier.

April: That's right. I agree. Good. One of the most common questions, John, that we get is can you work and collect social security at the same time?

Is Working While Collecting Social Security Feasible?

John: And you know, my smart-alec answer is yes, of course you can. But you might not like the end result. But yes, there are rules around it and I think that's where you're headed with this question here. And that is what are you allowed to do income-wise. Is that what you're talking about here?

April: Yes.Yes.

John: The short answer is yes, you can. If you started at age 62, and collect social security, first of all, you're getting about 75% of the full benefit. And if you earn more than $17,640, then you're going to lose $1 for every $2 over that limit. I keep it simple and tell people if you earn over $18,000 a year, then you may not want to take social security at age 62. 

Now we know people who will continue to work and they'll collect their social security because they say I'm not going to work more than I have to hurt my benefit. But the short answer is you can do that. And in my case, because I'm 66 full retirement age, I can work as much, earn as much as I want and not have any type of penalty.

April: Yes And that was my next question. At what point can you have unlimited income and still collect so security?

John: Well, you know, at our seminars we have people will tell us that was a trick question. You want to tell them about that?

April: Yeah. So we, it really comes down, it comes back to this your full retirement age, but not just the year in which you turn your full retirement age. Social security actually calculates it based on the month that you turn your retirement age. So we do throw a trick question out there in our seminars.

John: And the answer is this, December 9th last year, I turned 66. So in the month that I turned full retirement age, I could earn a billion dollars that month and have no penalty. But if I earned that billion dollars at any other time during the year, and I took some security, that'd be penalized. So the key is full retirement age folks, you can earn all you want in the month that you reach full retirement age.

April: That's right. Good. And we've already gone through some of the earnings limits. We won't spend too much time on that. But just know, if you're under for retirement age and still working, you will have, you could see a reduction in your benefits if you earn more than as John mentioned around 18,000 per year, and you're collecting social security.

John: You know one thing we didn't cover though is, what if you're in that gap? What if you're, what if you're not in the month of your full time of day and you did it center. If you earn over $46,920 then you would lose $1 for every $3 you're earning. So someone might find themselves, I'm thinking of someone right now. 

They retired, started collecting social security, but then she was given a heck of a job for 18 months doing computer software work for the state of Florida. They wanted her so badly. This was years ago. So badly they paid her 150% of what she was earning as a salary. She said I've got to come out of retirement for that. I said I don't blame you. And back then it didn't impact her pension so she could do it. And she used that money, saved it invested it. And that's how she took a lot of travel.

April: Oh, that's good.

John: A lot of traveling right up right up until the day she died. She was still traveling.

April: That's great. And speaking of trick questions, I've got another trick question for you. Aat what age do you stop paying taxes on social security?

John :Well, I gave you another smart-alec answer. Never. Because when you collect social security, it is subject to ordinary income tax. So if you have an income that's high enough to qualify for income tax to be paid on, then you have to pay tax. Now, this is a trick question in this sense. Now with a standard deduction being double, the first 24,000 of income for a couple is not taxed. First 12,000 for an individual. So if you're like that person who is just getting the that's the average of 1400. 

Now, that means a lot of people getting less, but if you're getting $1,000 a month from social security, and that's the only income you have, and you have a $12,000 standard deduction and you pay no tax on that. But very few people we see are in that position. And then there's another issue too that people don't think about, and that is the payroll tax. You have to pay social security taxes and a wage base, which is now big. It's $132,900. Medicare has no cap on it. If you earn $2 million you have to pay tax, Medicare tax. But social security is capped at 1329. It was not that way for a long time. 

And now it's index it keeps going up. So the tax amount percentage doesn't go up, but the amount they tax goes up. I remember asking Senator Graham one time about that on a flight back from Atlanta. I said, Why do you guys keep raising the taxes on social security? And he smiled, he said, Now, you know, we've not raised the tax rate at all. I said I know that. But you're raising the limit. The income limit, therefore, I'm having to pay more tax on all of my clients. But that's the way it was set up by Congress back in the 80s. And they, by the way, most people don't know this. 

Because there was no promotion big time in the media about the changes. That's when we started having to pay taxes on social security. That's when there was the income limits imposed. A lot of things happen there. That's when the 66 and two months etc. started back in the 80s. When Ronald Reagan pushed Congress to make changes. It was way overdue. Didn't go far enough and they were probably too lax. If I hat ran social security, no one, no one would ever get benefits before 65 or 66. There'll be no 62 unless somebody is disabled, but that's a different benefit. 

April: Different topics. Right. Good. Okay. I'm on to another common question that we get, John, is how do spousal benefits work? So if you are married, and if one of you qualifies for social security benefits, then your spouse also qualifies for a spousal benefit.

Spousal Benefits

John: Okay, let's take the most simple one first. In my case, I'm divorced and I was married for years, so on paper for 41 years. So she did not work outside the home very much. So her benefit was very small. So she is collecting one half of my benefit because one half of my benefit is greater than hers. Now, the way it really works is she's still getting hers. And they just simply add to that, so that she's getting half of mine.

April: Right. So for example, if your benefit was $1,000, then her spousal benefit would be $500 per month. 

John: That's correct.

April: Okay. Following up on that, what happens when one of you passes away?

John: Now that's an interesting question because many people think that the surviving spouse only continues to get one half. Not accurate. In that case in the event of my death, instead of her collect the 500, she would get 1000.

April: She gets the higher of the two.

John: That's correct.

April: Very good. Okay. And what are, so we talked a little bit earlier, 

John: By the way, we'll keep on that, because I've heard people talk about the widow's benefit. It's not just a widow, it's the widower also. So if the roles are reversed if mine were lower and hers were higher, if she died, I would collect her benefit. So as a widow, or widower benefit, want to make sure we're clear because I've had men say, I don't qualify, and I go, Yes, you do. No I don't. I'm not a widow. And I've actually had people get who did not know they qualify. Sent them back to social security and they got back pay. 

April: Good. Okay, and we talked about this a little bit, but how are social security benefits taxed?

John: Well, the short answer is up to 50% or up to 85% of your benefit is considered to be ordinary income, and you add it to what other income you have. And when you do your taxes it's just added together. So it's based on an earnings cap. We can get into detail if you want to, but it gets complicated. Rather not do it on this. But just basically, if you are at a certain threshold is 50% of your benefit is determined, considered to be taxable income. If you're above another threshold, then 85% of it is treated as ordinary income.

April: Very good. And yes, we do go into more detail about that in our webinars and seminars. 

John: Yes, and one on one. So I would encourage people to participate in all three of those.

April: Good, okay. And so we've talked about your options for taking social security. You can take it early at 62, you can take it at your full retirement age, which is determined by the year you were born. And then you can also delay to age 70. What are the benefits of delaying to age 70?

John: Well in my case, at age 66, had I waited until 70, I would get an 8% increase each year I delayed. So at age 70, my benefit would be four times X 32. 32% higher. So why would I do that? If I'm working, I don't need the money, then that might be a good way to increase my benefit for the future. There's another reason to do it. We see some people who either did not have life insurance or canceled it when they retired. 

If they don't have life insurance or adequate, then this is a good way to provide a higher survivor benefit like we talked about a moment ago. Because if I did not have life insurance, in my case, I have a lot of it because I believe in it. But if I didn't that I definitely would have delayed. So that then when I die, there's a higher survivor benefit. 

April: Yes. Very good. Okay, and probably the most common, this is the last question we're going to talk on, discuss today. And it's probably the most common question that we get. So when should I take my benefits? Should I take it at 62? Should I take it at my full retirement age? Or should I wait till age 70?

Is There a One-Age-Fits-All to Start Collecting Benefits?

John: You know, I got a wise-cracker answer. Whenever you want to start spending the money. It's also the same answer I give when people say, well, when should I start taking my retirement benefits? From IRA? 401k? Whatever. I don't know. What do you mean you don't know? I don't know. When do you want to spend it? Do you want to go enjoy the money now? Or do you want to leave it behind so someone else can enjoy it? So these trips you keep talking about taking, why don't you take your social security benefits, and start funding some of those? 

In my case, a large portion of my social security benefit goes to pay life insurance premiums. I just thought of something pretty cool about taking a benefit each month and letting it funded my life insurance, which creates a big chunk of money coming in tax rate for my family, right for my kids, my grandkids and great-grandkids. I just thought that's pretty cool. That's some of it frankly, I just spend it on my grandkids, and great grandkids. So it really comes down to what are your other sources of income? What have you accumulated? Have you done a good job of saving? 

Good job of investing? Have you done a good job with your planning? And I would tell everybody that listens. I don't care where you are at this point in your financial life. Sit down with someone, it could be us, someone else but sit down and get some guidance in coordination of distribution planning. You've done a good job probably of saving money, earning money. That's just part of the ballgame. There's a second half. I was watching a football game last night. And it was amazing. came down to one point. And I was back and forth back and forth between just went blank on the teams now, 

Oh, the Raiders and, no, excuse me Houston Texans and the New Orleans Saints. And the game is not over until it's over. So in that second half of life is called the distribution side. So really, that's the long answer. I know that if you don't have other benefits to help you, you may be forced to take social security at an earlier age than you want because you may need the money. But on the other hand, you may be able to plan and delay it all at age 70 if you want to.

April: Yes, and it like we talked about earlier. It depends on are you still gonna be working in some sort of capacity in retirement? How's your health? Yes. Do you have life insurance? Or again, back to what you were mentioning about delaying so that your spouse has a greater benefit? Those are all the things that we look at when we're helping clients decide when to take social security.

John: And you may not have life insurance, but you may have other assets. That point you've determined, you decided by choice, I'm gonna let my assets my savings account, my CDs, my 401k, my IRA, my 457 plan, my Roth IRA. So you're making that serve the role giving you income and the spouse's income. And that's okay, that's what you do, as long as it's a conscious choice. But again, our plan is to look at everything and say okay. Were you aware of this? Or you're aware of this? And then put all the pieces together.

April: Yeah. And I like in our planning too with a look at the different options and say, Okay, here's what it looks like we can show people. Here's what retirements going to look like if you retire at 66, 68, 70, 62. Whatever the situation is. And we can look at each individual situation.

John: We test drive it. You wouldn't buy a car without test driving it. Although I should say that I bought two cars without ever driving it. But usually, you would not buy a car on a test driving it. And that's what we go back full circle to what I said earlier about the retirement rehearsal, where we can sit down and so which is better, clicking on 62, 66 or 67, or 70? Let's take a look at it and see what it looks like.

April: That's right. That's one of the most enjoyable parts I think of what we do, John, is I love working with clients and showing them what retirement looks like. And helping them realize they can retire today if they wanted to.

John: Absolutely. It's powerful. And you're bringing, you're helping reduce the stress that a lot of people have, let's just be honest. A lot of people, unfortunately, don't like their work. They don't like the fact that they have to go to work. You and I are blessed. We love what we do. We love our clients, we got a great team we work with. It's not a burden. It's not a chore to go to work. I have to remind myself to unplug and go home or go do something else and take those trips that you keep pushing me to do. And free the mind a little bit. But I think we're blessed. And we get to do something we enjoy doing with people we enjoy doing it with and you know, life's good.

April: It's very good. Well, John, thanks for taking the time today to go through some of these common questions that we get on social security. I hope everyone listening to this found this helpful and impactful.

John: I enjoyed it. And by the way, we have a seminar this evening we're going to be doing and I hope that people will come join us for some of our live events. I think you'll learn a lot and it's a lot of fun. But thank you for having the conversation with me because this has been different and I like it. So thank you for turning the tables on me.

April: You're welcome.

Voiceover: If you would like to know more about John Curry's services, you can request a complimentary information package by visiting johnhcurry.com/podcast. Again that is johnhcurry.com/podcast. Or you can call his office at 850-562-3000 again, that is 850-562-3000. John H. Curry, chartered life underwriter, chartered financial consultant, accredited estate planner, Masters in science and financial services, certified in long-term care. Registered representative and financial advisor of Park Avenue Securities LLC. 

Securities products and services and advisory services are offered through Park Avenue Securities, a registered broker-dealer and investment advisor. Financial representative of the Guardian Life Insurance Company of America New York New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian. North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue Securities. Park Avenue Securities is a member of FINRA and SIPC. This material is intended for general public use. 

By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and they lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal, tax or accounting advice. Please consult with your attorney, accountant and/or tax advisor for advice concerning your particular circumstances. 

Not affiliated with the Florida Retirement System. The Living Balance Sheet and the Living Balance Sheet logo are registered service marks of The Guardian Life Insurance Company of America, New York New York, Copyright 2005 to 2018. This podcast is for informational purposes only guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities or Guardian and opinions stated are their own.


2019-87864 Exp 10/21

Do You Have a Post-Retirement Plan?

It started with a segment on a TV show many years ago… and Becky Hollis was hooked. Since then she’s been crazy about bears. Yes, those furry woodland creatures. 

What does that have to do with retirement? Well, in your Golden Years you’re not working – so what do you do instead? If you don’t have a good answer – an activity you truly enjoy – you’ll be worse than bored… it can actually negatively impact your mental and physical well-being. 

Becky has found fulfillment working with bear programs in Minnesota that help keep them in harmony with the human world. 

She gives us all the details of her work, as well as…

  • Foods bears actually eat – and what they won’t touch

  • The rejuvenating power of being in nature

  • The unexpected benefits of following your passion in life

  • What to do if you don’t have any “hobbies”

  • Where to go and what to do if you want to learn more about bears and enjoy their company in person

Listen now…

Mentioned in this episode:

Transcript

John Curry: Hey folks. John Curry here for another episode of the Secure Retirement Podcast. This is going to be an interesting conversation today. Jay Wolf and I are sitting here with our friend Becky Hollis. Becky has a story that's going to blow your mind. She is involved in a bear project in Minnesota. And Becky, welcome.


Becky Hollis: Thank you,


John: Looking forward to hearing this story and dig deeper. But would you first please just share with our audience who you are, what you do in your day job, then I want to jump right into the bears that you love so much.


For the Love of Bears


Becky: I'm Becky Hollis, I work for Century Link. I have been in the telephony industry for 42 years and counting. And I am a supervisor over outside technicians.


John: So you're the person who makes all this stuff happen. So if something breaks down, you send the team out to fix it. Very good. Well, we thank you for that because you keep our phones working. Okay, let's get down to the real serious stuff here. You shared with Jay and me sometime back about you getting involved in a project following the life of a bear. Would you please, and I was I'm still intrigued about this, would you please just tell us how this all came about?


Becky: Back in 2010, I was watching the Today Show. And they had a segment on a bear biologist who was putting a den camera in a while bear's den. And they had a video of him with the bear. She was in her den, and I was hooked. There was something about that face, that bear just grabbed my heart. 


And I went on the website and started watching the videos from her live den cam. Watched during labor, watched to have that sweet cub. She only had one. And watched the den cam every day I got home from work that's the first thing I did was I put that computer on and watched them in the den until the end of March they left to go explore the world. 


John: Alright let's explore that. So first of all, some people might be asking why in the world are we having a conversation about bears and what that has to do with a secure retirement? Well, it has everything to do with it because people who are nearing retirement or in retirement or constantly asking the question, what's next? What should I be doing? And some people would see that TV show and not take action. You took action. So when you saw the show what prompted you to, as best you can explain it, what prompted you to want to learn more? What hooked you?


Becky: Well, I went on to the website for bearstudy.org, Dr. Lim Rogers is the bear biologist, and just read all about the clan that he has studied. He studied bears for over 45 years and these bears used to have radio collars on them. And he walked with them and just read all about his study and what he had done, and saw where he had courses that he offered every year where you could go stay at his research cabin and interact then observe bears. So I started planing, I started saving money, I started just reading all I could. I became a moderator for their Lily the Black Bear Facebook page and just learned everything. 


And the more I read the more I wanted to see. So I made all the plans, I could go to the bear study course. And they have a picnic all the, this thing just went wild. In no time they had over a million followers. This group of ladies got together and planned a picnic and they called it the Lily Pad Picnic after Lily the bear who had the cub. And people from all over the world descended upon Ealing Minnesota to go to this picnic. So it's just a group of people. I mean this phenomenon I can't describe it. I mean, it hit a lot of people.


John: Wow. Wow. You were telling us while we were having lunch, and Jay jumped in here with some of the questions you were asking earlier. You were talking about, actually I think you said sitting in a recliner and feeding bears right? So I got I just get this visual of you sitting out in the middle of the woods, got your recliner, you're sitting kick back and this bear comes up and says hey woman give me some food. So describe how it really was.


Feeding Wild Bears


Becky: In Minnesota, it's legal to feed wild bears. So Dr. Rogers had a steady on diversionary feeding and some of the local homeowners, they feed bears. They put out, you know, they have feeders. Some of them are the lids to garbage cans served upside down that they put feeding like nuts, they put berries, they put birdseed out for the bears. And the bears, you know, they know where there's food and they go to those houses. 


They don't bother anything and when they see people it's like, and I know this is gonna sound crazy, but it's like you're part of the environment so they ignore you. They literally just ignore you. The episode I told you about I was outside. I said a recliner but it was an outdoor chair, you know? And I was just sitting out there communing with nature. And some of the yearlings came up, and that's a bear that. 


Cubs stay with their mothers until they're 16 or 17 months old. And so then they have a family breakup. So you have all these yearlings that are separated from their mother and they're scared and they'll all get together and play and stuff like that. But I was sitting in this chair, and all of a sudden I feel something smelling of my arm. And it was one of the yearlings. And if I had not shooed him away, I think he would have climbed in my lap.


John: Just like a lapdog.


Becky: Yeah, yeah. And these are not, I want to stress, these are not tame bears. It's in the middle of the Superior National Forest. They come and go and do whatever. And you know, I never would have thought I would have done this because, you know, bears are, because of what you hear, you know? Bears don't growl. People talk about how they growl, they don't growl. They're like dogs. You know,  which ones you can be around, and you know which ones to stay clear of. They are just amazing. They are just amazing, the animals.


John: Folks, I wish you could see Becky's face as she's having this conversation. I mean it's just like, you just light up your eyes light up, you just this is a fascinating project for you. 


Jay: I find it interesting, Becky, that you were talking about how they put out feeders for the bears. And it seems like they do that to somewhat attract them, to bring them closer to where you guys are at. And living down in Florida, you know, we've had an issue here recently with bears getting into people's garbage cans, and a lot of people are kind of frustrated by it. 


Kind of elaborate more on the purpose of why they are doing that. Are they trying to bring the bears closer into human interaction to show that maybe it's okay for the bears to be close to us? Even though they get into our garbage and maybe make a mess. There's really no threat to the bears being around us. Kind of elaborate on that.


Becky: Well, it's a mixed bag about feeding. Up in Minnesota, hunters bait. They put out food for Bears. Right now, hunting season started on September 1. Now, I don't know I don't want to step on anybody's toes or anything but putting food out for a bear and waiting for them to come eat and then shoot it. That doesn't strike me as hunting. 


John: That's not hunting, that's just shooting, right? 


Becky: Right. But anyway. So you know, if it's legal to do that, it's legal for people to feed or whatever. Not everybody does it. There's a lot of people that are totally against it. There's a lot of people in this area that I'm talking about that do not feed. But Dr. Roger, he is the guy who started a diversionary feeding program. And you know, a lot of again, a lot of people agree with it, a lot of people didn't. 


But the study was to say, you know, if you take bears out and feed them in one location, they stay out of trouble. Especially yet that he has proved in him. Especially if there's a bad food year. Now you know, I don't, living in Florida. I don't know that much about the food crop here. But I know in Minnesota up in that area, the last few years, they've had a good berry crop and all and there really hasn't been a problem with bears looking for food now. 


Now they are because they've got going through the hyperphagia eating as much as they can. Because there's some that go to bed for six, seven months you know? So it's a mixed bag. It's been proven up there that they have stayed out of trouble. Now again, you'll hear stories that are opposite from what I'm saying but as being part of it reading on it, I know what I know so.


John: Becky, elaborate on what the bears eat. I know Jay asked about that earlier during lunch. What do they eat?


Becky: They eat berries. They leave certain types of leaves, Aspen leaves. They eat, of course, birdseed. You know, when you live in bear country don't put bird feeders out. They're not gonna make it. 


John: Oh, really? I didn't think about that. So if you had bird feeders out, they would come raid the bird feeder? Like squirrels.


Becky: Some of them eat, like, I didn't touch on this. But there's also a bear center in Minnesota where they have four bears that cannot be released in captivity because they were raised by humans. And they're habituated. Okay, so they are in this compound, I guess you would call it. It's a pretty big compound. It can be expanded, but there's the four resident bears. And now they eat grapes. They eat peaches. You know, fruit and stuff. But it's what people give them.


John: Interesting. Yeah. Interesting. Tell us about the courses. You said you've been there I think you said three or four times. Tell us a little about the courses. And then I want to come back and circle around and talk about the takeaways from this that I've gotten today. 


Become Educated About Bears


Becky: They offer bear courses. They start the first around the middle of July and goes through the end of August because like I said earlier hunting season starts September first. And you spend three days, four nights about. And you stay at the research cabin, which is in the middle of where all the bears there's, and you basically learn about bears. 


You used to when they had the radio collars on when he hit that steady going on, they would find the bears to make telemetry because they had GPS collars on am radio collars. But they don't have that anymore. So what they rely on are the bears that come to the cabin, which are usually the big males. The females with cubs stay away from the big males because there could be issues there. And you watch them. You will watch them in their habitat.


A neighbor may call and say hey, we've got bears here, and they'll jump in the van and drive over there and watch them and you know, Dr. Rogers has been doing this for so long. You know, he pretty much knows where the bears are. Some of the time you know, but you know the bears are not sitting there just waiting for you to come. You just happen up on them. That's just like those bears that come to the house and eat. I have gone out in the woods hiking behind where they come eat, and have never seen a bear in the woods.


John: Really? I've seen him a few times well, sitting in a deer stand. We were talking earlier, I'd sit in a deer stand and watch the critters and my brother and my son get mad at me because I didn't shoot a deer. But I remember one day watching this bear just come walking down the road. Little black bear. It wasn't very old. It was just cute to watch them. But I've never had the desire to go do what you're doing sit there and feed these knuckleheads.


Becky: These are, you know, I would like to say I don't know that you hit on it. But I want to reiterate, these are black bears. They're not grizzly bears. They're black bears.


Jay: What are you guys putting in the feeders when you try to draw them and closer to you? Are you putting things like bird feed? Are there specific things you're putting out?


Becky: It's a mixture. There's hazelnuts. The bears that are there seem to prefer hazelnuts. Of course, you know they grow wild there. We'll put hazelnuts, we'll put birdseed, we'll put berries. Blueberries. They love blueberries. Blueberries grow wild up there. It's just a mixture.


John:  I must be part bear because I love hazelnuts, and I love blueberries. So I guess I'm part bear Jay.


Becky: You haven't lived until you've seen a black bear eat a peanut in the shell. It's to watch them, you know, do their tongues and all. And they spit out the husk or whatever you call it. But they don't spit out the nut.


Jay: Like eating a sunflower seed.


Becky: Yeah.


John: All right, let's talk a little bit about what you were sharing with us about being in nature. That one of the things you love about is not just the bears, but also your words, you share what you told us.


Becky: Well, it's, I laugh at people out there because I talk about humidity. About how humid it is up there. And as I tell them, you just don't have a clue. You just don't know I mean, you can actually sit outside there in the middle of the day and breathe. And you know, it's just sitting out there and hearing the wind blow. It's just so calming. That is my go-to place. That's my happy place. That's where I want to be in the summer.


John: You've told us a few times in meetings that when you retire you want to do more of that. And just be going for like a few days at a time. So fast forward when you retire. What do you see happening is, and I call the bear project, Becky's bears I call it. So when the time comes that you have more time freedom because you'll have the money freedom with retirement planning you've done, so you have more time freedom. Tell us what that looks like as far as how much time you might be there what you'll be doing with the project.


Becky: What I want to do is I want to go out there probably in late April early May it's still cold then up there. And stay till August 31. I've been there one time during hunting season and I will not be there again. It's nerve wracking. It's not fun. But anyway I am I plan on being there. I plan o volunteering anywhere I can. Any way I can. I will be volunteering for sure at the North American bear center. That's where the four captive bears are. They have a nice facility there. Pictures, videos, everything about black bears that you could ever see. 


Actually any animal in the north woods. They have moose exhibits. They have, not live moose. Oh, but you know just all the animals that are family are, you know they have exhibits for them. They do have some fish tanks with walleye and all men. And if the different types of fish. The one thing I like about Minnesota, there's only two or three types of snakes. And they're not poisonous. Or the ones, I don't think any of them are poisonous it's the ones I've seen or not. I don't think that. There's no moccasins, there's no rattlesnakes.


John: So here's what I'm hearing, you don't share the same love of snakes as you do for bears. Okay.


Becky: I'll kiss a bear but you can forget about a snake.


John: Talk a little bit about you made a comment about bears being like dogs, you know which one to be wary of talk about that. Some people listeners and say this woman is nuts. You're out in the woods with bears that are wild. They're not domesticated. So what are the dangers that you have to be looking out for? And why the heck are you doing this? 


Safer Than Popular Belief


Beck: Well, like a bear when you're getting too close, or they are trying to warn you though clack. I can't do it, but they'll play their jaws. Or they'll stop the grand a lot. And that's just them saying you're getting close. Okay, cool. Now you have not lived until you're looking at a 530 ish pound female bear with four cubs. And you're looking at her in a with a zoom lens. And she does that to you. I had to go inside. That scared me.


John: How far away was a bear?


Becky: Hmm. Maybe 20 feet. Yeah. And that's when you just know. And you know, of course, during the bear study courses, you know, and these bears have unique features. Identifying features, you know, you after you've been to the study and all you can pretty much say well that's what I would know Lily anywhere. That's my bear. But anyway, she'll do that. 


Now, I've never seen a bear in all my time up there I have never seen one take after a person. I've seen them chase another bear off because you know, the females are territorial. But I think they get a bad rap. I mean, they're not little tame things. You have to be, you have to use your head which I know you don't think I use my head. But you know, it's just you just know if you're around them enough it's like, you learn them you. this one bear that left charged me last year, she slapped a nut out of my hand.


John: Tell us more about that.


Becky: Well, I was feeding her hazelnuts. They love hazelnuts. And again, I was stupid. I probably shouldn't have.


John: So your bare hands, a hazelnut's not that big. Like a marble. So you're holding your hand. 


Becky: They've got long sticky tongues. They don't they're not like dogs. I mean, like stick that tongue out and you know, and it's sticky. But anyway, I was given it to her. And I ran out. I didn't have any more so I was just like, Okay, here's a peanut and she looked at me. I knew it was six and a half.  And she, but let me tell you if she wanted to hurt me, she could have hurt me. 


John: But she literally slapped it as if to say I don't want that.


Becky: Yeah.


John: That's funny. Do you have any videos of you with feeding the bears? That's gotta be fascinating. I want to see that sometime. That'd be awesome.


Becky: I have pictures.


John: Alright, so let's do this. Let's talk about some takeaways here. So you see this TV show, I think it said it was the Today Show. Most people would watch a show, I would add watch a show that's nice. Maybe another person watches it so I think I'll go check that out learn more and they'll mean to do they don't do it. Then you watched the show, You learn something new but you didn't stop there. You took action. What do you think prompted you seeing this bear to get this involved? Would you ever have thought when you first saw that?


Becky: I tell people I found my passion at 43/44 years old. Wow. That's what I tell people because I've never seen a man of them smile off and everyone but nothing to this extreme for lack of a better word.


John: I think you told me this was like nine years ago. So you've been keeping track of this for nine years now?


Becky: Yeah. And it's just there was just something about it and I mean, I went off on my own you know, I'm like, I didn't know all these people. I didn't know any of these people. And I just there was something, it hit my heart. I mean it's just a passion.


John: What advice would you offer anyone listening who says you know, I don't really have any hobbies? I have nothing I really want to do now much less than retirement. What advice would you offer those people?


Find Your Passion


Becky:
Search for something. It, you know, I wasn't looking for this. I mean I just watched a show. And I mean, I love animals. I love dogs. But if you had ever told me that I would be going to look at wild bears I would have told you that you were crazy. But life's too short. You need to find something.


John: You know we're talking about retirement planning. We tell them make sure you're retiring to something, not retiring from something because if you're running away from something because you're miserable, you're gonna be miserable in retirement. So you're not going to be miserable in retirement because you have something that you're excited about. You have passion. You love sharing the story. 


And that's why I wanted to give you the opportunity to have this conversation and share this story because this is fascinating. And I'm looking forward to us doing an update in the future with some of the things that you do. Before we go anything you'd like to end with as far as giving people information about how to learn more about this project. How do people get involved if they want to learn more?


Becky: If you're interested, you can go to www.bearstudy.org. That will take you to the Wildlife Research Institute, which is where Dr. Rogers has these courses and all. The other website is for the North American Bear Center is www.bear.org. And there's all kinds of information there that tell you about the four bears that are there. One of them's Ted. He was raised by humans and he is the sweetest thing. He's my favorite male bear. He's the one that has kissed me.


John: You, so you kiss the bear. Kissed a bear.


Becky: But again, you know, these were bears that were raised by humans. And they cannot be released into the wild because they couldn't make it. But it's very, very interesting.


John: I love it. I love it.


Jay: Thank you, Becky, for sharing your passion for this. I think that's one of the most intriguing things about this is not just the dip of the extraordinary thing of you being involved with bears, but the passion that you have for it. 


I think that's what really comes out in this is showing your want to be a part of it. Your want to be part of the understanding between bears and humans and the relationships that they have. It's not always bad. It shows that it can be a good thing. But not only that, the bears are getting so much out of it and you are getting so much out of it as well. So it's very cool to see that.


John: Becky, thank you so much for sharing your story.


Becky: Oh, thank you.

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2019-87224 Exp 10/2/2021