(Guest Lecture): November 2023 - Making the Most of Your Retirement Assets

So it's my pleasure to introduce Diana to you. She's our financial program manager, as I mentioned, and she's a BCPA. She specializes in financial help for multiple myeloma and acute myeloid leukemia patients. As a professional financial advisor and former caregiver of her husband who was diagnosed with multiple myeloma, Diana perfectly understands the financial issues facing cancer patients. And if you had a minute to listen to that video that I played before we got started today, you heard her passion for doing this and why she decided to get into this field. And so Diana, we're grateful that you take the time not only to research these topics, but then present on them. And I'll turn the time over to you for latest financial updates. Thank you, Audrey. Thanks to everyone who take the time to invest in themselves and their families and in their, ultimately their health. And so I am very grateful that you're here. Let's go for some of the latest financial updates, things that you may be hearing in the news or reading in newspapers. If you still keep it, get a newspaper. You're aware that right now we have the ongoing open enrollment for Medicare Advantage plans. That's going until the 7th of December, started on October 15th. I encourage everyone, everyone who has a Medicare Advantage plan or maybe thinking about a Medicare Advantage plan or maybe going into their initial enrollment based on their age and their qualifications for joining Medicare to please look at your plan. There are a lot of providers, hospitals, especially some of those out in some of the urban areas, some of the rural areas, I'm sorry, and some caregivers, both cancer centers as well, that may be dropping a Medicare Advantage because they're the time to get a pre-authorizations, whether they're denied or even to get them approved is taking too long. They're not getting the pay on the Medicare Advantage plans that they thought they were getting, so they're getting hit. And they are, a lot of them are dropping plans. I know Umana has been dropped in a lot of places. Aetna United Healthcare are being dropped and have been dropped. So please check your plan as well as check your prescription plan to make sure your prescriptions have not changed and they will continue to be covered. We've also found that in addition to those plans that are being dropped through Medicare Advantage, some providers are keeping some of the plans, but some of the criteria have changed drastically. So instead of them being, some of them, that's not all Medicare Advantage plans, but there's a lot going on, ongoing with what's happening in this arena. Is some of the places who are keeping some of the Medicare Advantage plans are making them look like they are now out of network versus in network. So you may find that the one that you have is in network, you think is a network, but they may now be treated as out of network, which means your financial responsibilities will change. Please call, please update, please do some comparison shopping before it's too late. I don't want you to go to the doctor's office and this happened, I've had people call me, they went in for their regular appointment and found out they are no longer covered. So that's very important. That's when your foundations of you getting your treatment is to be financially covered through your insurance. If you have any questions, please reach out to me. I'll be glad to answer those questions. So here's a big topic and I wanna qualify this as, I wear this hat of being a financial advisor when I'm talking to any of patients or caregivers, I try to uncover information that might derail them in the future and I don't want you to be derailed by anything. So one of the big things that have come up is making the most of your retirement assets in light of us being in an inflationary period. So you're eating more of your dollars to maintain your current standard of living, your cost of your healthcare has gone up. So I wanted to address this because there's a lot of things, no matter what your income level is, no matter what your savings level is, no matter what you're gonna have set aside for retirement, there's things you can benefit on this, whether you're reducing your tax liability and you can do that with stocks and with anything out there. So making sure that you are getting the most income in your pocket, you're being as efficient tax wise as possible and that you're looking at opportunities that you may not even thought of. So we're gonna go through some of these. I would encourage you to talk to your tax professional if you don't have one, call someone, talk to a financial advisor. Right now is the best time to talk to a financial advisor because there's really opportunities that you can take an advantage of right now that's gonna really propel you more financially secure in the future. So let's get started. So why is it important right now? So many patients find they need to take extended time off from work, short time or a long period of time or maybe multiple times. So when you do that, especially if you're pre-retirement age or not close to retirement, you're gonna end up not paying into your retirement plan and not, you know, a lot of things gonna happen. So you may need to go on self-security. We know there's a wait period before you can go on self-security. So that's lost income. How are you gonna cover that period? So it all comes at an expense, not only to you, but your family and your future as well. So loss of the income that you would have been getting if you're working, it's gonna affect your retirement expectations. How much you can save, how much you can use later on. So it's very important to review your savings program now when there are opportunities like better interest rates in some of your savings programs. So you can be prepared for any unexpected changes. If you're already prematurely retired as a result of your illness, being on social security disability, going to go on social security disability or not sure, don't despair. There are some things that I'm gonna, some things I'm going to address in this webinar that you can take advantage of as well. So the following are points to consider when you find yourself having to make a drastic change to your future retirement goals. Next slide. So we need to understand how illness is gonna affect your current future, current and future income needs and your savings programs. So there's a host of things you need to consider. So are you going to lose income from staying off of work short period of time or long period of time? Are you going to be able to continue your current insurance program? Or are you going to look at Cobra which costs a lot more or are you going to look at exchange program? Are you going to still be able to save for retirement if you leave work early due to illness? Chances are that's one of the first places that get cut because if you're no longer working, where's the money gonna come to for your retirement? Or conversely, are you going to have to go into retirement savings prior to retirement in order to meet your current expenses? Are the cost of your treatment still going to be covered without exhausting or spinning down retirement savings, whether it's going to a retirement savings early, you get penalties as a result of that and you had to pay taxes on everything you take out. If you're married, will your spouse still continue to work and save for retirement while you are off work? Or conversely, is your spouse got to stop working to be a caregiver to you? All of this is going to affect your current expenses, your current income and your future income. So we need to find ways to maximize your opportunities. Next slide. So have you saved enough to maintain the lifestyle you currently have? There's gonna be some numbers I'm gonna be throwing out later that might be shocking, but it's very important. And I know a lot of people when they get their retirement savings programs or their statements in the mail, they don't even open them up because they're scared to look. They hear what's going on in the economy, but you gotta understand if you don't take care of needs now or make changes now, you're just pushing it down the road and it's beginning more and more progressively difficult to manage. So have you anticipated market shifts in your current portfolio? If you're working with a financial advisor, they anticipate there's gonna be down markets. Are you working with a financial advisor who can help you manage your expenses? Make sure your risk reflects who you are, what your needs are, understand your financial goals, their cost and the associated timeframe for each of those goals, as well as your ongoing costs for your healthcare, which we know is exceeds the rate of inflation. Does your financial advisor know your health issues and the need for safety and possible access to assets? Here's where you need a financial advisor who is not just your traditional financial advisor, but they are specializing in this particular area. They're specializing in healthcare, the extreme needs for healthcare. Has your financial advisor reviewed estate planning needs as well as tax issues that may arise? Unfortunately, this is true across the board with anyone in healthcare or anyone in the financial industry, unless you are a estate planning attorney, very few advisors will talk about their estate plans. This is huge. I mean, you're losing not only current opportunities, but you're losing on opportunities to protect your family. Have they reviewed annually you and your spouse's insurance programs, employer benefits? Because if something happens, changes with one person, one spouse, the other person is gonna be affected and you maybe need to look at insurance programs for either one or outside of the private programs. Next slide. So retirees that are affected by a disability are more likely to start off retirement with fewer assets. Why? It's probably because they get to stop work early or the cost of their care was so expensive they had to stop saving in their retirement programs. So as a result, the values of your household assets can be significantly lower than non-disabled retirees. So here's some staggering statistics and these numbers never ever get better. I wish they did, but they don't. One in three Americans aged 65 or older have at least one disability. Now we know during the COVID period, there were, we understood there was comorbidities that people had multiple comorbidities and that has not changed. So consider the ramifications on the possible inability to continue to earn a living prior to the age of 65, as well as continue to save for retirement as a result of the disability or any other needs you may have. So add on that other possible burden of a spouse having to leave work early to be a caregiver, maybe not even a spouse, maybe an adult child who's now having to stop their work or may need to stop their work to assist you. That means they are now affecting their future needs as well. So this affects many aspects of retirement from preparedness to debt levels and monthly spending. And it's very important to look at your entire, I would say your life goals or how you want to live based on what assets you have in order to do what you need to do and what you want to do. Next slide. So key findings, according to an issue brief dated April 20th, 2023 by Bridget Bearden, the following are key findings. More than half or 61% of disability affected retirees said they saved less than was needed for retirement as compared to 41% of non-disability affected retirees. There's still non-disability affected retirees who are affected as well. Disability affected retirees were more likely to start off retirement with fewer people and retirement with fewer assets and subsequently have lower median average values of household financial assets than non-disability affected retirees. In fact, non-disability affected retirees have 2.3 times the average current assets of disability affected retirees. So disability affected retirees are less likely to report that they have an easily manageable level of debt, which means it's probably unmanageable, right? And more likely to report all having debt outstanding across all types of debt as compared to non-disability affected retirees. And that would include credit cards, medical debt, home debt, automobile, things like that. Their debt is generally higher. And unfortunately, they usually have less income to take care of that debt or those expenses. So here's an area that I think a lot of disability affected retirees can make a significant impact on their personal finances, especially debt. The less debt you have, the less money you have going out to take care of that debt, right? The less stress you'll have if you take care of that debt. So look at debt consolidation and hospital charity programs. A lot of people forget they're out there. Charity programs does not mean they're necessarily giving you money or writing off debt, but they have payment plans that you can participate in without affecting your credit or affecting your ability to continue to get care at those facilities. So we can look at ways to reduce discretionary spending. I know discretionary for people mean different things, but on the financial side, on the real world side, discretionary spending is when you have money and you don't worry about where it's going. It's not set aside for, I have to pay the electric bill, I have to pay the mortgage. It is money that you usually have and it goes and you never think about where it's going. That's discretionary spending. When you start thinking about that discretionary spending and where that money is going, you're more apt to realize, oh, I could be doing something better with this money, reducing my debt, reducing medical bills, saving for emergency funding, all of these things, and you'll be more in line with making sure you're gonna be more financially secure. So that's especially important in an inflationary economic environment that we are in now because a lot of your money is going, is spending more on the things that you have to do than you normally would. So your money's being used up quickly. Next slide. So here's some more options. Can you reduce your tax liability on social security? Oh, a lot of people don't think they can, but you can. Can you earn more social security? Yes, you can. Can you change the mix in your retirement portfolio, reduce risk and guarantee life income? Yes, you can. What financial resources do you have available to reduce your out-of-pocket expenses? You'll be surprised. Do you live in a state that has favorable tax on retirement assets? You need to know this because there's quite a few states that have favorable tax on retirement assets. Do you live in a state where you can have caregivers paid for their services? Possibly so. Have you taken advantage of all that Medicare offers, including the Medicare savings accounts? This could be huge. Are you paying for the right insurance to reduce the total overall out-of-pocket costs to you? Now I'm gonna pause here. A lot of people when they're looking at their insurance plans, especially when they're on Medicare, one of the first and only things they look at and they stop is the premium, the cost of the premium. If the premium seems like extremely high, they'll say, oh, that's gonna cost too much. I can't afford that. What they don't take into account is their max out-of-pocket in addition to those premiums. So when you look at your max out-of-pocket, including your premiums, you may realize that paying a higher premium gives you better coverage, which means you may be taking less out-of-pocket. So there's a lot of things you need to look at. And that's part of what you need to be doing right now, doing this open enrollment for Medicare Advantage. So be honest with your answers to all these questions. I encourage you to go back over these questions and answer them honestly. On the ones that are on here, can you reduce your tax liability on social security? Can you earn more social security? Can you change the mix of your retirement portfolio, whether it's still your 401k program or you have it outside of that? Can you look at your insurance programs? Can you do all these things to increase income, reduce tax liability? Most people can. And I'm not gonna go into specifics because those are personal questions, right? But I'll be glad to talk to anyone outside of this to answer some questions and give them some suggestions as you wish. And you have my email address, please reach out to me. Next slide. So I'm surprised at how many people wait until the year they retire or the year before they retire before they start considering what they can afford to do when they retire. In fact, a lot of people retire without knowing what they're gonna do when they retire, other than not go back to work. So more time is spent planning a vacation than planning for retirement. That's frightening, but it is so true. People seem to put it off, put it off, put it off. And while they're putting it off all this time, they're spending a lot of time planning for retirement. And while they're putting it off all this time, they can really be securing their retirement. Even in light of having a surprising illness, it comes and takes over or seems to be prevalent in their lives. And there's a lot you can do to prepare, anticipate an illness and plan accordingly. That means no planning for how inflation can affect your savings, how taxes on retirement income can affect income, and even more importantly, how the ongoing rise of the cost of healthcare can and will affect your retirement assets. People don't take that in consideration. So if you work with a financial advisor, especially one who specializes in healthcare, who understands the cost of that healthcare and include it in your plan years ahead of time, your investments could have been tailored to your current and future needs. Even if you plan to retire in five years or more, planning now can possibly boost savings, reduce risk to portfolio, and possibly allow you to have guaranteed income for life, no matter how long you live, and protect income for your family. So there's a lot, even if you are retired now, there's a lot you can still do. Next slide. So here's a general rule. There's, I say a general rule, a one general rule for saving that can help you understand the need for planning for retirement as early as possible. Simply put, the rule suggests that for every thousand dollars of monthly retirement income you want, you will need to have saved $240,000. So that goes to reason that if you want $4,000 a month in retirement income, you will need to have saved $1 million. It's frightening, right? How many people already have a million dollars saved? And if you're on disability or you have limited income and you have to leave work early, that is pretty hard to accomplish. Add to that the fact that a lot of companies no longer offer pensions. So a lot of the onus is on you to save for your retirement. So, and that $4,000 a month does not include social services, such as social security. So you can boost that number a little bit with your social security. It would include pensions, 401ks, LIRPs. A lot of people are not aware of this. This is a huge, please look at this, LIRP, life insurance retirement plans. There is a lot to be said about this. If anyone out there have life insurance and their needs have changed, they don't need as much life insurance, they need to change it instead of it just disappearing with what they've paid into it. There's a lot you can do to guarantee tax-free income with life insurance. So then once you have retired, a financial recommendation is to withdraw only 5%, 4% or 5% of your savings annually. But remember, your assets need to be still making money, growing, not just being depleted. So forget about putting it in a savings account or a CD making very little. Remember you have to beat inflation and make above the inflation mark to make it count. So, complicated, complex based on your goals, your needs, how you feel about money, that's where a financial advisor comes in. They look at everything, anticipate things you hadn't even thought about that's gonna protect you now and down the road. Next slide. So when you start planning, you need to think from a global perspective as financial advisors, and that's what I do. This means consider what you'll be spending your money on now and in retirement. Put a dollar amount on that if you're gonna travel more. Where's that travel gonna be? If you need additional things done to your house, if you wanna stay there, what is the cost to be done to your house? Are you gonna need a car in the future? Some people say at age 65, 60 or 65, I bought my final car, have you? Is that car gonna last another 20 years? There's things that you need to really consider when you're doing a plan. Assign a dollar to each goal or activity as well as a stop time, because for instance, your house is gonna be paid off and say your house is gonna be paid on 15 years. That's money that you can now address, put toward some other goals. So how much do you expect everything to cost? Like I said, vacations. What do you have in assets right now? And what can you change, like add to savings? What will your tax liability with your assets look like when you retire? You can change those things right now. You can manage, be more tax efficient. Can you make changes now to reduce your tax liability? Yes, you can. What debts will be paid off when you retire? Paying off debt can result in more income in your pocket for you. Does your portfolio take into account possible down markets, markets we're in right now? Does it take into account being in a position to take advantage of when the market goes up? Do you have a financial responsibility for anyone else? That's huge. What happens if your health changes for the worse? Will there be a possible need for long-term care in home or in-home assistance? How will your insurance costs change? What if you need to leave work early? How will you continue to save for retirement? What kind of cash reserves, very, very important, people forget about cash reserves, do you have in place to cover unexpected, immediate expenses? And when I say unexpected, immediate, it used to be three months of your expenses and a cash reserve. Because of down markets and everything happened in 2008, it's now become six to 12 months of your expenses in a cash reserve account. That protects you from everything. If you had to go on social security disability, it may take a while before you get social security disability, that money is there. You don't have to worry about, how am I gonna bridge that gap before the social security, if the social security disability is approved? So how many people out here right now listening can say you've got it all taken care of? You're certain that your needs will be met now and when you retire or if you're already retired, can you sleep saying that every single one of those questions are answered? If you find two of those questions can't be answered for those other things I mentioned earlier as well, then we need to sit down and talk, or you need to talk to someone because one thing can make the whole dominoes fall, the whole thing can come tumbling down. Next slide. So the savings rate in the United States, it's been fluctuating quite a bit the last couple of years. So this may surprise you, the monthly savings rate as a share of disposable income in the United States from 2015 to 2023, even during the COVID, the personal savings rate amounted to 4.1% up from 3.5% in July 2022. The reason for this is because, and the big portion of this came in 2020, is because, and the big portion of this came in 2020, 2021, when no one was spending money, right? They were saving money. So pretty interesting. So guess what happened in, that's what happened because of COVID. So people were saving their money. That's why people were spending a lot more on the markets for houses and that inflated the value of houses. In April, 2021, the rate was 12.3% of savings. Then we saw a precipitous fall to the current 3.5% in July because all of a sudden we're out of COVID, everybody's spending, they're making up for lost spending. So no longer are they saving as much. Inflated dollars helped to eat up income, therefore reducing your savings. Not saving, eating up more of your savings you currently have. So it's a domino effect. The repeated conversations around the continued viability of social security should get everyone, everybody pause to think. So even if it doesn't, social security doesn't go away completely, one must consider the possibility of benefits being reduced or more probably increasing the retirement age or both, combination of those. So any one of those can drastically reduce your income and your ability to retire and meet your expenses. So it's gonna, those are gonna affect the greater population and to a greater extent, those who are already financially challenged. Next slide. So a way to increase your discretionary income without having to worry about a lot of stuff. So according to SmartAsset, the discretionary income is the amount of a taxpayer's earnings that remain after subtracting income taxes and all other mandatory costs like rent, mortgage payment, food, transportation or insurance. So you can see that essential spending and non-essential spending is very subjective for everybody. When you do a budget and see where your financial weaknesses are, you will quickly see where your earnings are going. And if you really try to, you can find some wasteful spending. I know I can and I'm a financial advisor. I can find wasteful spending probably every week. Curtailing this wasteful or non-essential spending can open avenues for bang down debt, covering medical expenses the whole nine yards. And give you some much needed reliefs from financial stress. So possibilities of using or spending discretionary money is eating out too much, especially when you're going out to eat, when that going to let's say cheesecake factory used to be for two people, used to be maybe 50, $60 and it's now well over that. And you continue to eat out as much or more than you used to, you might wanna start looking at that. Unused subscriptions. I know I have them to streaming services, to gym memberships, all those things that you're spending money on, but you've never canceled, get rid of them. That's more money in your pocket immediately. Unnecessary groceries. How much do we spend on something because we are impulse buying. Don't ever go to the grocery store when you're hungry. I've done that because I feel like I can't, I'm not gonna go later on, I'm already out. And then buying things that have no nutritional value. It's not gonna satisfy me. And I just look at a table and say, this is junk. So wasteful spending. Personal and household items. If you're like me, you go out and you see something for your hair and you come back and you have a whole cabinet full of hair items to do hair for laundry or shampooing or for all kinds of things that you're not gonna use. Wasteful spending. We do, I think we all do it to a certain degree and we need to watch that because that's a lot of unused or ill used money. Next slide. So a big thing people don't consider when they're looking at your social security is when to take the social security. So I'm gonna go through some points that you consider if you haven't already taken social security at all or if you've only been taking social security for less than a year, you may have an option to change. Keep in mind that no matter what we talk about regarding savings, income or retirement, everyone has different needs, goals and concerns. This is just some things that you should take and look at and see if you can do better. So many take social security income early because they don't think it's going to be there. This scenario is not probable. That doesn't mean however, that benefits, like I said earlier, may not be reduced or retirement age extended. Taking advantage of a higher payout option, especially when you're continuing to work and or you do not need the income right now, it's probably a smart thing to do. Perhaps you are in a beneficiary, you are a beneficiary of a spousal benefit whose benefits now may be higher than yours. Consider taking theirs now. If you're continuing to work and you know your income and your social security benefit maybe later, maybe higher later on, switch to yours at a later date. You can do that. Of course, if you qualify for social security and need the income now, then your options are probably fewer. If you need the income, there's probably no question. Next slide, it becomes mute. Next slide. So be aware of the effect on your retirement income. If you take social security before full retirement age or at the age of 70, understand the tax implications on your social security benefits. So if you're continuing to work, you know you're limited on the income that you can take without being taxed on your social security. A social security benefit is reduced five ninths of 1% for each month before normal retirement age up to 36 months. If the number of months exceeds 36, then a benefit is further reduced 5 12th of 1% per month. So retiring early and taking social security benefits at age 62 can reduce your benefit as much as 30%. So 30% on, can be on your social security at full retirement age or until age 70 can be huge. Especially if you're 70 and you have your family with a long lifespan or you have a spouse who may need your benefits, that's huge. So delaying your benefit until age 70 will yield the highest benefit. After 70, you're not gonna get any additional credits. So delayed retirement credit is generally given for retirement after normal retirement age. Normal retirement age is based on your age and when you were born. To receive full credit, you must be insured. And insured means you have worked enough hours or quarters before your normal retirement age. Insured means you need at least one quarter of coverage for each calendar year after you turn 21 and the earliest of the following, the year you die or the year you reach retirement age. Hopefully you reach retirement age before you die so you take advantage of the social security. But spouses may have access to that. Next slide. So let's look at three income buckets. A lot of people don't understand what buckets mean. That means you have income here, you have savings here, you have savings here and you have savings here, three different buckets. And there should be needs or goals surrounding those buckets. Cash and short-term investments. This bucket should hold the money you need to cover your expenses for the next two to three years. These funds should be easily accessible if you need to go get it because your furnace broke down or your car broke down, you need to have access to that. They should be easily accessible and liquid in the event you need to get them quickly and frequently in order to cover living expenses. For example, in the event of a loss, job loss or a medical emergency. These could be some of those things as well. It would include savings accounts, money market funds and short-term bond funds. These are low risk investments which should provide a reliable source of income because they are low risk for the returns are modest but they provide some stability. Everybody should have this bucket. The next slide. So this is the intermediate bucket. This covers expenses from year three through year 10. So it's intermediate timeframe. So this is for in retirement. The money in this basket should continue to grow to keep pace with inflation. However, it should not be replaced in high risk investments. So you wanna keep pace with inflation but you wanna make sure it's kind of balanced so that if one thing tanks your whole thing is gonna tank. So this could include long maturity bonds and CDs, preferred stocks, convertible bonds, growth and income. That's your balance. You have the growth part of it and you have income for stability in there. Utility stocks, real estate investment trust and more. Working with a financial professional can help you determine the investments that will meet your financial goals and the allocations. How much you need to have in each bucket. Now the third bucket is, next slide. Your long-term bucket. So this bucket is a bucket of investments that should mimic historical market returns. By historical market returns, we're talking about the stock market. This bucket should grow your nest egg more than inflation. So if inflation, we know it was high here recently. If inflation is at six or 7%, if you only earn 6% on your investments and consider you probably have to pay taxes on it, you're actually below what you need to make. So you need to have them beat inflation while allowing you to refill your immediate and intermediate buckets, which means you're feeding from the third bucket into your second bucket and overflowing into your first bucket. So your first bucket will always have your emergency funds, your short-term needs there. And then you'll also be putting money into your intermediate bucket so you continue to have things filling up. So the long-term investments are invested at riskier assets that may be more volatile in the short-term, but have the growth potential over 10 years or more. So this is where you're gonna look at large growth stocks, large growth mutual funds, those kinds of things that's gonna, with the potential to have really good growth. So the investments in this bucket would generally include long-term investments such as growth funds, annuities, stocks, et cetera. But once you put them in there, I'll tell you, don't go away and don't look at it because you always need to be managing and keeping up with what's going on with your portfolio. So let's just talk about options for accessing your retirement funds. If you have a 401k, you saw, or annuity with, or some kind of pension plan, and they have you to withdraw money, what is gonna be the advantages and disadvantages of doing that? So the advantages of withdrawing retirement funds as assets available for current expenses is an advantage. Certain assets may be eligible for a net unrealized appreciation tax treatment when distributed from an employer plan, such as stocks, highly appreciated stocks, that is huge. If you work for a company, like a lot of people work for UPS or Ford, and they've bought a lot of the company stock, and the company stock is appreciated significantly, you need to look at the net unrealized appreciation tax treatment options that you have. Some of the disadvantages of taking money out in a lump sum is your distribution is subject to an immediate 20% federal tax withholding plus applicable state taxes and possibly a 10% early withdrawing penalty if you are under age 59 and you take it out. Or under 55 and separated from service, many owe additional taxes at filing. And you also lose potential for tax-referred growth. So that is why it's important to have that emergency fund. In event something happens, so you won't be going into your retirement plans prior to age 59 and a half, or if you're no longer working there and you take it immediately out of there, withdraw from there, not a good thing to do. Some of the other options may be to roll that money over into another retirement plan or IRA and take the money out of that. So you'll save that immediate 20% federal tax withholding at that time, you'll still have to pay taxes later on based on your income tax rate. Next slide. So leave assets, if you leave the assets in your former employer's plan, what are the advantages? You preserve your tax-referred compounding and growth potential, you postpone any tax payments, typically no fee for investment transactions if you buy or sell within your 401k plan, you have broad creditor protection, which means when it's in a 401k plan at your employer, then your creditors cannot get to that no matter how much money you have in there. You retain future distribution choices as to where you wanna take it out, if you wanna roll it over into another employer plan, or if you wanna roll into an individual IRA, you have a lot of future distribution choices. You may have access to investment and planning tools within your employer plan. If you're between ages of 55 and 59 and a half, you may be able to take early withdrawals free of a 10% penalty. Generally lower management costs than in an individual IRA plan, depending, and certain assets may be eligible for net unrealized appreciation tax treatment when distributed for an employer plan. So that's what I was talking about earlier. There's a lot of things that you can take advantage of, and I would suggest you look at your options, talk to a financial advisor prior to doing anything with a 401k in a plan that you are accompanying you're no longer working at. Next slide. So some of the disadvantages, you may have limited investment choices. If an employer plans, there's a cost associated with them. So the more investment choices used, the more cost is gonna be associated to that employer. So you may have 15, 20, 25 choices, but within that plan, if you're outside a plan in your own IRA, the world's available to you. There's no limits on a lot of things that you can do. You cannot make new contributions or take out loans if you're leaving assets and employer planning and you're no longer working for them. You may have to move the IRA if access values are under $5,000. A lot of plans, because there's a cost associated with each participant, they have a dollar amount to have that plan in place. So if your dollar amount's under $5,000, it's not cost effective for the employer. You may be required to move that out. Plan rules on distribution and beneficiary distribution may be restrictive. Access to investment and planning tools may be restrictive if you're no longer with them. Required minimum distribution beginning at age 72, age 73 in 2024 and 75 in years 2033. That gives you ability to push out, taking money out of your IRA qualified plans, 401Ks, qualified pension plans, so you don't have to take them out if you don't need that income. And so you push back, have to pay taxes. There may be associated fees for each distribution from an employer plan. As long as you keep it there and you're taking it out of the employer plan, there's going to be a fee attached to it. So that's a disadvantage. Next slide. So some of the advantages of rolling over all or a portion to a traditional IRA. IRA simply means individual retirement account. No taxes or early withdrawal of 10% penalty incurred for a direct roll over. That means coming from your employer plan to the IRA to where you choose to do that. You will preserve your tax deferred growth because you're not changing the actual status of that plan. Typically, you'll have wider investment choices available. You can access funds at any time subject to taxes including a potential 10% tax if you're younger than 59 years old, 59 and a half. More flexibility with naming non-spouse beneficiary. So a lot of employer plans, when you name a beneficiary in your 401Ks, a spouse has to sign off on that, that they are giving up their rights as beneficiary. If you have an IRA, you can name anyone to be the beneficiary, spouse, or you can skip over to spouse and make it children. You can make anyone the beneficiary of an IRA. You may have the ability to roll the assets into a future employer's plan. So if you go from one employer to another employer, you can do a direct roll over to that new employer you're with and continue to get the tax referral and there's no taxes associated with that. You may also be eligible for in-kind transfers of assets from a prior employer plan. So if one employer and another employer has some of the similar assets, you can directly transfer those into some of the same assets or they will accept some of those in-kind transfers without a sellout and buy again. Next slide. Some other advantages you may have with rolling over all or a portion of your assets to a traditional IRA is you may have access to investment and planning tools. A lot of times you do. You have investment advisors or consultants who can work with you on some of those transfers. Certain assets may be eligible again for net unrealized appreciation tax treatment when distributed from an employer plan, such as that stock, but you need to make sure you do this prior to taking money out. You need to make sure you try to preserve that ability to have that tax efficient treatment. Again, consult a tax professional for tax advice because I am not a tax professional. Next slide. So some of the disadvantages of rolling over all or a portion of your assets to a traditional IRA. You give up certain tax treatment for employer stock. You eliminate opportunity or early withdrawal without the 10% additional tax if separated from service at age 55 and not yet 59 and a half. So your income taxes will be due if you take it out. Loans are not permitted from an IRA. They are considered withdrawals and you may have penalties based on your age and you will be paying taxes or whatever was taken out. Protection from creditors and bankruptcy only. So if you file bankruptcy, you may be protected from creditors in that IRA. If you are still in your 401k, you are protected from creditors even in a bankruptcy. So possible high fees, higher fees, planning fees, management fees may be associated with a traditional IRA versus what's in your 401k. Requirement of distributions again, begins at age 72, age 73 and in 2024 and then later on in 23rd, older age in 2033. Additional fees such as transfers fees should be considered prior to meeting assets. Generally, that's not a lot, but a lot of people are not told about it. You should be told about any kind of fees that you may be incurring as a result of a transfer or a roll over before you do it. Next slide. So moving your assets to an employer retirement plan, your new employer plan. So many advantages of this is you avoid immediate taxes and 10% early withdrawal, additional tax weight, direct roll when in a direct roll over. You preserve tax deferral growth, preserve tax deferral growth because you're going from one qualified plan to another qualified plan. You continue to build your assets for your retirement. Typically, there's no fee for investment transactions to buy or sell within your plans. Broad protection from creditor claims under federal law that we've mentioned earlier. Loans may be available in your new employer plan. You may have access to investment and planning tools and you may be able to defer your requirement of distributions while you are still working even when you reach that RMD age. Next slide. So some of the disadvantage of making that move to a new employer's retirement plan. You may have limited investment choices. Again, anytime you're an employer plan, they only give you certain choices and types of things to invest in. There may be a waiting period before you can participate in your employer plan. So it may be sitting over at your old employer for a while. New employer plans may not accept rollovers. Some just don't want to have the additional expense associated. Depending on plan rules, you may not have access to access your assets again until you retire or separate from service or experience a qualified hardship, such as you may be losing your home, going through foreclosure or a medical hardship. You may have limited access to investment and planning tools. And the plan rules on distribution and beneficiary designations may be restrictive. Again, you may still be tied into, you have to leave it to your spouse, even though your spouse may have assets and may not need your assets, you may want to leave those to someone else. Are we running short on time? We are, and we have lots of questions. So I was wondering if you would feel comfortable hitting some questions and then we can- Sure, sure. I try to talk slowly. I hope it helps. Yeah, yeah. I think you, I thought you talked at a great pace. It's just hard to balance giving the information and then also answering questions. Right. I think the first time this ever happened to me, but go on. Okay, so let's start. Oh, hold on, honey. I'm in a meeting. Okay. Hold on. Okay. One of the questions here says, I don't qualify for SS because of work requirements. My husband did, but has passed away. Can I still apply? For husband's benefits, are we talking about social security income? Social security, just regular social security? If it's regular social security and your husband is deceased and he has social security, then you do have access to spousal benefits. Okay. Is there any part D plan that covers revlimit at an affordable price? I'm retiring this month and I'm shocked at the copays. Yeah, copays are high, but keep in mind, you need to call those part D plans. I encourage everybody to do that. Call them and verify that that is gonna be covered. But then remember, there's other resources available to help cover your revlimit cost. And remember, there's gonna be changes that are gonna affect in 2025. We're just gonna be caps on everything. So it's just gonna reach out to me. I can help answer those questions for you. We can get that taken care of. Yeah, it's complicated and a question that a lot of people share. I apologize for being loud over here. I have somebody blowing leaves. I can't hear it, thankfully. Zoom's pretty cool about that. Ken is saying, can you comment on Medicare Advantage plans versus traditional Medicare with a supplement? I think that's a bigger webinar, but again, it's something that he can connect with the financial coach about and get more information. Okay, if you have Medicare traditional part A and part B, and in your first year or when you're first eligible to sign up for Medicare, you can get the Medicare or supplemental Medigap plan. And you can do that without going through underwriting. You're guaranteed issue. Now, if you wait six months or more, they will probably deny you based on your illness. Medigap can be accepted anywhere in the country, right? And you can change Medigap plans at any time as long as you originally signed up for Medigap. Medicare Advantage, like I said, Medicare Advantage, you have HMO PPOs, HMOs, or generally if you have a series of chronic illness, it's not the way to go. I would get a PPO. That means you get broader coverage, broader network, but also still be aware of a lot of Medicare Advantage plans are being let go or not being accepted by a lot of providers. And that is ongoing. It's gonna be ongoing for a while. And that is the crux of the problem. Don't just look at the, again, don't just look at the premium. Look at your total cost and you can do a calculator based on what your total cost is gonna be. Sometimes the higher premium at the end of the year, you pay less out of pocket. Thank you. These financial topics are very complicated. So I appreciate everyone's patience and Diana, your expertise in being able to communicate these things. Just rehashing the retirement IRAs, things like that. Well, not the IRA, but the one with your, the 401k plans and stuff like that. So Deborah was just clarifying, are you suggesting leaving your plan with your, if it was your plan, would you leave it with your previous employer or would you move it? Again, this is all relative and subjective. If I were ill, I was disabled and because I had a really serious chronic illness and I know I have bills that are piling up or I know I was gonna have a hard time managing bills or creditors, then I would probably be more apt to keep my money in the 401k. If you needed more, a better allocation or better portfolio to generate more income, you may have a better option of taking it outside and put it into a 401 because you have different options that could put it into maybe some investments that can give you income for life, even if you extend or go over the money you had saved. So it's all subjective and it's not just based on that one thing, it's based on everything. Yeah. I know people have a tendency to not look at, they look at finances in these silos, but it's not in these individual silos. Yeah. Norm is wondering, what do we look for when we get a financial planner? You look for somebody who you ask the questions. How do they work? How much do they cost? How do they charge? How do they access your account? How do they come up with decisions? How involved are you in the decision-making process? And you should be completely involved. There should not be any discretionary trades or any discretionary accountability on that advisor. He should not be making decisions without you knowing about them or agreeing to them. And they need to have all of this stuff documented because you need to protect yourself. You can go into broker check and look at a pro, see if there's any, have been any issues with a broker. It's required to be documented there. Yeah. Let's hit these two more questions and then maybe jump back into one or two more slides if we have time. So Steve's wondering, this is a common question again, how can you pick a drug plan for next year if you don't know what meds you'll be on? Well, this is, I was talking to someone about this yesterday. If you don't know what meds you're gonna be on, you talk to your doctor of what they anticipated your next treatment plan would be and what the scenarios or changes around that could be. Cause if you anticipate what medicines you might be on, you find yourself, you're gonna be covered. If you choose accordingly. Yeah. That includes not just medicines, that includes your, if you end up doing stem cell transplant, if you end up doing CAR T, all those things, make sure you anticipate what available treatments may be coming, upcoming, and then plan accordingly. Which if your provider doesn't wanna give you next course of action, find a new provider. Thank you, right. You always wanna be prepared. And then last question here, I'm finding because of Medicare, I don't qualify for the grants and assistance programs. Is there a way to get around this? I don't know why you're not qualifying for grants or assistance programs. If you are looking for help for like an extremely expensive drug like Revlimid and you're calling Bristol-Meyer, you need to let them know that you're under Medicare, but you're under insured and they'll transfer you to a different portion, a different part of the company that handles Medicare beneficiaries to get help, get their Revlimid treated. But when you're talking to like nonprofits like Leukemia and Lymphoma Society, it doesn't mean it doesn't matter if you're on Medicare. You may be at income levels that's not qualifying you for some of those. Awesome, thank you. Okay, we're almost done. Thanks also for the audience's patience today. Okay, a couple more questions came in. So let's focus on those. Okay. How much can one earn while on social security income? It's less than $20,000. So I would be aware of that. And here's a big, big thing. If you are going on social security and they say you can still earn money, a lot of times it's unfortunate because social security department is gonna wanna deny, deny, deny, right? Even if you aren't even earning money. So if you are earning anything, even if it's substantially below their qualifications that you can earn money, a lot of times they will deny you saying, well, you're earning money now. So why, you know, that's just another reason for them to say no. So I'd be very careful on that. But yes, you can earn money. You just gotta be very careful. All right, I'll pull up the summary slide. There's three specific slides that we didn't get to, but again, these slides will be distributed to all registrants and you'll be able to review them via email. So Diana, if you wanna tackle this last summary slide and we can finish out with outro announcements. Thank you everyone for your questions. So understanding what to access and when to be accessing your income is very complex and it's very subjective. Consider the needs for assets. If you need additional income for, I can't see our faces are on there. Consider all tax implications of anything that you take out of retirement plans or future tax implications based on your allocations or your portfolio. Consider talking with fiduciary financial advisor. Fiduciary means somebody who has your best interest in mind versus just theirs. They're taking into consideration what your needs are now, anticipating what can happen to derail you and they're taking an acceleration, not just you, but your family as well. A fiduciary is always taking your needs above and beyond their goals or their needs and they'll give you personalized advice. It's not a financial plan that's cranked out with just one wording or something changed. It's specific advice tailored to what your goals, your needs, your understanding, your risk tolerance and all of that is. I was muted. I mute so that there's no background noise and then we get to unmute. Thank you, Diana, for all of your preparation and research and thank you again to our audience for providing excellent questions for the discussion. We're gonna be meeting again on January 9th. We'll again continue the meeting of the first Tuesday of every month, unless there's a holiday and then we'll adjust accordingly. Diana and I are currently working on topics based on your feedback. There's surveys that we ask you to take as you leave the Zoom meeting and we look at those surveys and the potential topics that you would like to speak on and based off of your suggestions, we come up with topics for the following webinars in the following year, et cetera. So just know that we value your input and your feedback. We would love you to continue taking those surveys and we will come up with a 2024 plan and then adjust accordingly if we see any pressing issues that aren't being met. Other events that we have upcoming, this Thursday we have a Northeast Myeloma Community meeting about stress and spirituality and how to manage your stress and tap into some mind-body exercises that can help you. On November 14th, we have our SoCal Myeloma Community Chapter. We're gonna be discussing Thanksgiving and receiving an opportunity to learn and share within our myeloma community. And then on Wednesday the 15th at 1 p.m. Eastern is our newly diagnosed myeloma chapter. We're gonna discuss the power of second opinions and why it's important to seek them. The link to sign up for any of these events and even more events that I didn't mention is found at the bottom of the slide and will be included in our follow-up email. I thank you to Adaptive, Amjhan Jansson, Abbi, GSK, BMS, and Regeneron and thank you to each of you for helping us build this financial myeloma community. We appreciate you. Hope you have a great rest of your day. Thank you everyone. Take care. There's one more question about Diana's email. I'll just put that in really quickly. You can reach her on the Coach website. So it's a free program that you can connect with her and then she can get in touch with you. So thank you everyone. We appreciate you. Bye-bye.