Business Innovators Radio - Interview with Rick Sechler, CFP Founder of USA Retirement Solutions Discussing Managing Healthcare Costs in Retirement

Episode Date: June 16, 2023

Rick Sechler is a Certified Financial Planner who truly appreciates the opportunity to serve clients planning for and enjoying their retirement.Based on over 30 years of experience and the ability to listen for the nuances that make every situation different, he believes in a collaborative process that results in solutions developed by gathering information that integrates personal and financial circumstances and goals. Communication is the most important ingredient to developing a plan that is right for you.Learn More: https://usaretirementsolutions.info/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-rick-sechler-cfp-founder-of-usa-retirement-solutions-discussing-managing-healthcare-costs-in-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Rick Seckler, who's the founder of USA Retirement Solutions, and we'll be talking about managing health care costs. in retirement. Rick, welcome back to the program. Hey, thanks, Mike. It's great to be with you today.

I really appreciate it. You're welcome, and I think this is quite the topic. We probably ought to spend about four hours at a time, three, four days in a row, you know, covering this big monster of a topic, which is managing healthcare costs alone is a big topic, but then how can you do it in retirement? So get us started with where do you start with your client when you start approaching this topic? The first thing we have to reach is a basic understanding that everything we're going to talk about is a maybe, except for the fact that the costs are going to be more than a person would think right away and that they're going to go up. if I may quote a fellow certified financial planner and appear, total lifetime health care costs, says Mary Beth Franklin, for a healthy 65-year-old couple, are projected to exceed $360,000. Wow.

That's not jump change, and the only certainty about that is it will go up over time. Wow. And I guess the old, the question that someone might think in their mind, why do I need to plan for health care retirement? Because of what you just said, because it's going to be a big chunk. We know it's going to happen. And if that's the case, man, that's a big chunk out of your retirement planning if you don't do it right. It's absolutely right. And the other thing that we have, the other understanding we have to reach is we're going to go forward on this basis.

We're going to pray for the very, very best, meaning great health and. Both of you live a good long time and stay healthy right to the end. But we're going to plan for the worst because the statistics, again, the longevity statistics are overwhelming. Just consider widowhood, whether it's male or female, the likelihood of widowhood is strongly related to age. By 85 and older, one in three men and three in four women are widowed. check that disparity out three in four women are widowed if you combine that with longevity statistics 85% of the folks who turn 100 in this country in this day and age are women okay yep so you know I've heard that those kind of stats before about women are typically living longer than men well

if three out of four are women are widowed that's a that's 75% that's a big number Well, and there they are on their own. Yeah. Quite often the income is down, and health care expenses are up just for the fact that there is no spousal caretaker in the household. You've got to have outside help or you've got to go somewhere else to get help. And fortunately, in this country, there are a lot of resources for that, but very few of them are free, and the ones are free are probably the ones that you don't want to necessarily be in. You know, it's like they always say you get what you pay for. Well, if you've ever been to a Medicaid nursing home, you know, for fact, there's, you know, there's eight or nine people lying around on cops all in the same room.

And it's not, it's not pretty. Yeah. So when you think about planning for health care and retirement, what are some of the factors that need to be initially thought of? because obviously it's kind of like onion. You go layer after layer and it gets more and more and then it gets deeper. But what are some of those main things that we should be thinking about? Well, back in the day, it was fashionable to talk about doing financial plans and they'd all scribble out to you've got to put away more money than you make

to meet all these exorbitant, you know. And I don't do that kind of thing. I don't artificially create a need. I just need for people to understand that it's best to start early. and it's particularly important to make sure that you're going to have funds that you absolutely can't outlive. And that's where the crossover happens between health care planning in retirement and general income planning in retirement. Either way, if you don't know how long you're going to live, you have to do something to make sure that you're still having an income, even if you live to be 90, 95, 100 years old. Yeah, that's a huge, huge point. Because we're all as Americans these days, we're taking better care of herself. The health care system is getting better. We're eating better. We're exercising. So maybe we are living longer. And that's going to extend out the amount of money that you need. And we definitely don't want to have health care, you know, chipping away at that big number.

Well, absolutely. And I mean, the biggest, I used to start my seminars by saying, you guys can make this all really easy for me, take. out a piece of paper really quick and tell me exactly how long you're going to live. Then I'll tell you how much you have to save and how much you can have till that exact point in time. Yeah, because then it's an easy math equation. Yeah, but life isn't like that. So we don't know. The greatest risk is not knowing for sure how long we're going to live. So again, it's very, very important to set yourself, your family up to where you have income that you can count on forever, meaning, until both of you are passed. You know, I remember in graduate school when I was doing my MBA, one of the things,

well, first of all, I hated all the numbers and accounting and all that kind of thing, but one of the things you learned was doing pro forma estimates. Like, okay, here's our business. And in five years, we should be doing this and this and this. And those are all conjecture numbers. But then once you put them down on paper, you have to measure against that and go, how did we stand this year against that five-year plan? And then year two.

So when you start thinking about health care costs, what is your guidance and advice on estimating what those are? Because like you said, it's going to change. It's going to get bigger. But you have to start somewhere house. So how do you estimate those costs? The best thing to do is put aside to the best of your ability, what you can put aside. I started in with the thing about you can't be too thin or too rich. And my point along that line is, whatever you can afford starting early, put it aside.

Put it into retirement plans. After you've fully filled up your retirement plans, then put something else aside for the future. Because believe me, if you end up with too much money, you're going to be a lot happier than if you end up with too little. So instead of saying, well, you've got to put away 12% of this and, you know, 18% of that or whatever. Let's just say, sit with a planner. Let's sit down and talk. We can talk on the phone. We can talk by Zoom. But let's get together and figure out realistically within your budget and your lifestyle what you can afford to put away for the future. Yes. And then I like your point that you

made a couple minutes ago. Plan for the worst. You know, plan for that big number. Plan for all of that because then you're ready and the numbers are fitting in the box, so to speak. And then if you didn't need all of those costs, good. You got more money to do something else with. So plan for the worst and then you're good to go. That's absolutely right, Mike, because I don't know anybody that got to be 99 and said, oh, darn, I have way too much money. I don't know anybody that that happens to.

So the idea is to do what you can. Don't feel bad if you can't do what the person across the street claims. or she is doing, just do the best that you can. And then the most important thing, another very important thing, let me say is as you get nearer to the 65, 67, 70 year old, going to retire age, make sure you're not going backwards. Make sure that the money you've put away is an investment choice where you're absolutely not going to lose your principle. You're still going to have some growth and it will guarantee you an income that you can't outlive. You know, that's a huge point, which is you don't want to have, it made me think of this analogy.

And, you know, guys love analogies. Women roll their eyes. But that, what you just said made me think of driving a car with your foot on the gas and the break at the same time. Because if health care costs are going to rise and if you have your money sitting in an account that could be volatile and lose money, wow, you're losing your money and the cost are going up. You're in a bad spot. So yeah, that's a great point is make sure that the money you do. have set aside is going to be in something that's guaranteed and can't lose money. Folks just have to be honest with themselves.

What steps have you taken realistically to protect your ardorne savings and your retirement accounts from the next market downturn? Don't go through a 2001 or a 2008 or a 2022 when you're getting close to retirement. The best way to go forward, pure and simple, is don't go backwards. Yep. Yep. It's kind of like Warren Buffett says, you know, two rules of investing. Number one, oh, I forget, I'm probably going to butcher it, but number one, never lose your principle. And rule number two, refer back to rule number one, you know, something like that. It's really close to that. And that's, you know, not the case for somebody that's 30, 35, 40 years old. They have all kinds of time for the market to do what's up and down and sideways and all that kind of stuff. But when you've worked your whole life, And you've put away money towards these extremely important goals.

That's when it's so painful to experience any loss. Yeah. And unnecessary. Now, I'm asking you this, Rick, as me hearing you through the ears of someone that's not an expert, because I don't know, you know this. But when you mentioned that number of $300-something,000, my mind went to, well, isn't Medicare, Medicaid, what I just checked? the box in. That's not going to cost that much. So what role does Medicare play in retirement planning

to help defray some of that, you know, $300-something thousand dollars of medical costs? That's a great question because it's very, very commonly misunderstood. Medicare in and of itself exposes a person and or a couple to virtually unlimited liability. It's a great 80-20 or close to 80-20 plan, but 20% of a really big number is still a big number. So it's critical that Medicare planning include either a Medicare supplement and a drug plan or a Medicare Advantage plan. Even when you do that, then you're going to run into the pure fact that Medicare doesn't cover. long-term care. If you go to the Medicare.gov website and look up, search for what does, what doesn't Medicare cover? The number one thing that comes up is long-term care. Medicare doesn't

cover long-term care. Yeah. And I know statistically, we don't need to get in to that, but statistically, long-term care is a high percentage change that you will need that, and it costs a pretty penny. So that's something to realize that Medicare is not going to cover it. You need to have that in place because that goes into then that planning for health care and retirement. Well, and in terms of the planning, then you have to come to the crossroads as far as the long-term care issue goes. Do you want the old-fashioned kind that's like an auto insurance policy where you pay your premium, you pay your premium, you pay your premium? You could do that for 30 years. If you don't ever use it, guess what? The insurance company is going to send you a nice

letter and say, thanks for being a great American. No, they're not. They're going to keep every penny you paid them, and that's just the way it goes. Or you can reposition some assets so that they're yours. They're always going to be yours. If you need them for long-term care, they're there. And if you don't need them for long-term care, they can add to the legacy, or you can use them for other things way later in life when it's clear that you're not going to need long-term care. Long-term care. Again, back to the point you made. Over plan, over prepare, have more than you need because if you need it, it's there. If you don't, it's great to have those options.

Well, and nobody wants another recurring monthly expense that you're not sure you're ever going to get any value out of. Yeah. Yeah. So what are some other things that we need to be thinking about option-wise for managing healthcare costs that maybe people don't even think about easily? Well, I'll chime in a little bit about stay height and weight proportionate if you can and lay off the alcohol occasionally at least and try like crazy not to become diabetic. When I go and visit with people and folks that are taking heart medication and medication for diabetes and maybe they have a kidney problem already, those are the folks whose expenses for health care

in retirement are way exorbitant because even with the best Medicare advantage and or Part D prescription drug plan, their drug costs can be outrageous. I sit with people sometimes where the drug costs for one person is up to $20,000 or $25,000 in a year. And it's only going to get worse with the Alzheimer's and the baby boom generation. The FDA just approved a drug again this morning. I saw a news release on it. It's $26,000 a year for a drug that helps to prevent the onset of Alzheimer's, but only by about six months. In other words, it gives you six months longer to be relatively cogent.

Wow. That doesn't sound like that big of a whoop-to-do to get excited about, huh? But they sure are. And the lady that's running CMS these days, She's all in. They're going to cover it. Medicare is going to cover it. So you can watch that will cause Medicare premiums and Medicare max out of pocket limits to go up over the next several years, almost for sure. You know, I think we've mentioned this before, but it's, it's obvious in the economy that we're in that deficit is a huge number. The only way to close the deficit is either

cut spending. The government won't do that. We know that. Or raise taxes. So we know taxes are going to go. up. And we also know that most probably the cost of health care will go up just because of the world we're living in. So if that is something that is concerning a pre-retiree or retiree and going, what do I do? Because it's like a moving target. And I need to plan for retirement. What are some of the things that someone would, what you would recommend that they start with first to think about? Of course, sit down with you or meet with you to have them, you look at their situation. But I think one of the pieces that, I really resonated that you mentioned is, you know, having your money and that protected and you don't need to get into, you know, specifics or what products, but just the value of peace mind that your money is not going to ever lose value so that you've got that fighting chance to close that gap on your health care plans. Talk a little bit more about that importance of just making sure that those accounts are set the right way to make sure you're not going to be losing your money and you have guaranteed returns.

Great question. And the other advantage on the non-retirement money side, on the non-qualified money side, is that you can defer the taxes on that money for years and years and years. In other words, if you are risk-averse and you decide that you want to keep your money in money market or in CDs in the bank, all fine and dandy, but you're going to be notified, as is the IRS, every single year, that you owe tax on the interest that you've earned. You can eliminate that and get yourself into an environment where you have triple compounding. The money you put away will earn interest. The money you would have paid taxes on will earn interest and the interest will earn interest.

That helps you hugely to get a lot closer to whatever your goal was when you started. You know, I like when you can do one thing and get two, three, four results with one action. So when I hear you say triple, I'm like, yeah, that's what I'm talking about. Let's get something where you're getting all kinds of benefits, all from one safe place. So that sounds so attractive. Well, Rick, this has been a real eye opener for me. Thank you for coming on. If someone is interested in learning some more and reaching out and connecting with you, what's the best way that they can do that?

please call me at 321-355-8-899 or text me at the same number or email me if you'd prefer at RTSCFP at gmail.com or go to the website, all one word here, USA Retirement Solutions, no spaces, dot info. USA Retirement Solutions. Info. Excellent. Well, Rick, thank you so much for your time today. It was a real pleasure talking with you. Mike, thanks again for having me on. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes,

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