We’ve all heard the rumors that Social Security is broke and that it may not be around for some of us when we retire. How do we know what’s right and whats just rumor? The most reliable information we can depend on must come from Social Security itself and of course take that with a large grain of salt.

If you’ve ever received or looked at your own or someone else’s statement from Social Security, there are two incredibly important sections that you need to pay attention to. The first states “Social Security benefits are not intended to be your only income source when you retire. On average, Social Security will replace about 40 percent of your annual pre-retirement earnings. You will need other savings, investments, pensions, or retirement accounts to live comfortably. Use this Statement as a tool for planning your financial future.” This is a clear warning that many people either don’t know or don’t pay attention to yet one of the most important statements to help us plan for our future ever publicized. Those who rely solely on Social Security benefits have either failed to plan or planned to fail… or both.

The second important statement tops them all and gives us a must more accurate prediction of what we can expect in the future and how bad things are going to get. Here it is folks: “* Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 79 percent of scheduled benefits.” This is very clearly saying that by 2034 we will no longer be receiving the full Social Security benefits we are entitle to. How or why is this happening? It’s simple really, Americans constantly complain about tax raises yet the simple economic laws of supply and demand are completely ignored. We cannot improve or maintain our benefits without increasing revenue. Perhaps people should stop trying to lower tax commitments and worry more about what the consequences are for their families futures.

Even scarier is that past statements stated 2041 and not 2034. If Social Security’s ability to pay has already diminished by 7 years, how much can we depend on this one? Here are the sample statements for those of you who haven’t seen them. Talk to a professional and start planning folks.

past SS statement


With a Medicare Advantage plan there’s always the possibility of being dropped from your plan. These plans are subsidized by the government and the government is slowly taking away these subsidies causing them to be increasingly expensive for major insurers such as healthnet, SCAN, Blue Cross Blue Shield, United healthcare, Cigna, Aetna and many more. If a plan gets to be unprofitable, insurers have the right to drop the entire plan. This will cause thousands of individuals to receive letters by their providers stating that their major medical plans are ending and it is up to the member to find a new one.
Obviously this can be quite catastrophic requiring members to find new doctors, change their benefits and most likely restart their plan of care which can also mean having to pony up for copays all over again. Most Americans don’t know that while this letter is terrifying and a potentially crippling blow to their healthcare needs, there is one very important opportunity that the government allows with this letter.
If you or someone you know is being INVOLUNTARILY dropped from their medical plan and received a letter stating so, Medicare will allow you a new Guaranteed Issue window in order to purchase a Medicare Supplement with NO health questions! However, there is a catch.. it MUST be a supplement plan F. If you want a different supplement, you will have to medically qualify.
For someone with serious health issues that is spending a great deal with copays and co-insurance costs, this is an incredible opportunity which you might never get again.
Besides being dropped because of a plan getting discontinued, members can also be involuntarily dropped for moving out of their service areas also causing a Guaranteed Issue window. If someone is receiving Tri-Care benefits and re marries they will also be dropped. There are many ways that individuals can be forced out of their medical plans, contact your agent if you’re unsure about your rights & options.

Below is an example of what a drop letter would look like. This one is from 2014 from Aetna and to the right is from 2015 from Cigna. As you can see these are not small companies.

Cigna Drop Letter

Cigna Drop Letter

Aetna Drop Letter

Aetna Drop Letter

Working “under the table” is all too common these days and poses an enormous risk to the individual, tax-payers and society as a whole. While there may be some immediate gratification of not paying any taxes, the cons far outweigh the pros. If you know someone working in this manner and they have a choice, please educate them on the consequences to their future. By generating income off the books you are contributing nothing to the tax payer system and therefore are essentially getting benefits that the rest of us pay for free such as education, recreation, infrastructure, healthcare and many more. They are essentially mooching like the friend on the couch that has overspent their welcome.

As far as their future is concerned, Social Security requires 40 credits (10 years) of work in order to qualify for any financial benefits. In addition, in order to qualify for Medicare you must receive or be eligible to receive Social Security benefits or eligible to receive railroad retirement benefits. Government employees that have not payed into Social Security may also qualify for Medicare by paying into Medicare payroll taxes.

Many retirees are living solely on the Social Security benefits and unfortunate for most of us that is not enough. If you’ve worked off the books long enough to not qualify for Social Security, this means it will be up to you to create your own savings and retirement plan. In my experience, those who work under the table are not financially secure or educated enough to plan for their own retirement. These folks may have a live day to day attitude and will most likely have to either live their entire lives or depend on the rest of us to support them when they get older through hand outs.

It is important to understand that Medicare Advantage is actually not part of Original Medicare. While most plans might be attractive thanks to a $0/mo. premium, you get what you pay for. It is important to look at what your exposure is which is most commonly in the form of copays found in your Evidence of Coverage book. Medicare Advantage plans are great until you have to use them, hence why many doctors call them “dis-advantage plans”. Most doctors prefer Medicare Supplements over Medicare Advantage plans for the simple reason that they pay better and they come with less red tape and bureaucracy. Medicare Advantage plans are steadily increasing in price or flat out dropping entire plans because of government subsidies being retracted. Many doctors, facilities and hospitals simply don’t accept Medicare Advantage plans while most of them take Medicare Assignment which means they take Medicare Supplements. All Medicare Advantage plans available for your state are listed in the back of the Medicare & You guide.

Supplements are letters from A-N with some missing in between. Supplements are intended to fill the gaps that Original Medicare leaves behind. Different supplements cover different things, and one of them covers EVERYTHING. That would be plan F. If you have a Medicare Supplement F you should never pay another medical for the rest of your life. Keep in mind prescriptions are completely independent from your healthcare costs with supplements. Unlike Medicare Advantage plans, supplements are guaranteed renewable meaning as long as you pay your premiums on time they can never be taken away from you. For example, the plan F is being discontinued in 2020 however anyone already on a plan F will be grandfathered for life. Below is a list of supplements and what they cover and a comparison of Medicare Advantage plans and Medicare Supplements.

Medicare Advantage Medicare Supplements
Govt. Subsidized Yes No
Premium approx. $0-$100 approx. $40-$200
Networked Yes No
Referrals Needed Yes No
Portability County-Restricted No Restrictions
Drug Plan Included Yes No
Vision/Dental Included Certain Plans No
Copays Hospital (per day)
Maximum Out of Pocket approx. $3,000-$10,000 per year 0
Step Therapy Yes No
Medically Underwritten No Yes*

*Unless you are in a Guaranteed Issue period.

Life insurance could be the most necessary and beneficial protection out there. There’s not much that’s guaranteed in life but dying certain is one of those guarantees. With death the question isn’t if but when. There are many forms of life insurance and one is not necessarily better than the other however each serves a purpose. Below you will find a simple chart of highlights with some important nuggets of knowledge along the way. There are three major types of life coverage and within each of them are endless ways to modify it. Life insurance needs is something that should be reviewed with a licensed agent and should be reviewed periodically as life changes such as new family additions, a change in income, assets or needs.

Type Whole Term Universal
Duration Permanent Temporary Permanent*
Premiums Highest Lowest Middle
Purpose Final Expense
Burial Expenses
Passing Money to Beneficiaries
Mortgage, Debt, Income or Loan protection All of the Above
Underwriting Easy-Moderate Moderate-Difficult Moderate-Difficult
Cash Value Yes No Yes
Tax-Free Benefit Yes Yes Yes
Avoids Probate Yes Yes Yes

For more information on Life Insurance, please contact us.

*As long as it is properly funded.

Original Medicare includes A & B. Both have out of pocket costs.
Part C actually takes over Parts A, B & D and creates it’s own rules.
Part D is prescriptions.

  Part A Part B Part C Part D
Covers Hospital
Skilled Nursing
Home Health Care
Medical Services & Supplies
Medicare Advantage
RX Prescription Drugs
Costs Payed with Payroll taxes all your working life* Monthly premium $121.80 in 2016 (was $104.90 previously) $0 to approx. $100/mo. Approx $18/mo. – $100/mo.
Penalties NA 10% of Part B premiums for each year you were eligible to enroll but didn’t** for the rest of your life None 1% of average Part D premiums added to your monthly premium costs for the rest of your life

*This is why working under the table can be extremely dangerous. If you don’t have enough quarters paying into Social Security & Medicare you may not qualify for benefits.
**If you do not have other creditable coverage.

While many of my clients have Long Term Care (LTC) insurance, the rising costs of Nursing and Custodial care has caused LTC policies to gradually increase in premiums. One of the most difficult conversations for me to have is when a client has had their LTC policies for 10+ years and has consistently seen their premiums increase. They are concerned that they will no longer be able to afford to keep the policy yet it seems outrageous for them to have to forfeit the policy after paying into it for so long. This dilemma has caused me to focus my attention on what I consider to be a much smarter investment Short Term Care.

Most Long Term care policies have an elimination period of 90 days before the policy will start to pay benefits. The reason for this 90 day waiting period is not only to keep the premiums down but also because Medicare covers up to 100 days of Skilled Nursing Care. Over the years however, Medicare has made it more and more difficult to qualify for these 100 days and if Medicare considers the care ‘custodial’ (meaning you’re not expected to get better) they will not pay 1 day or 1 penny of the care. Because of the increasing difficulty of qualification by Medicare standards, many people have had to pay of out pocket for the first 90 days which can cost in excess of $20,000.

When a need presents itself, so does an opportunity. Short Term care was designed to “fill the gap” between your health coverage and Long Term Care policy. Short Term Care has now grown and developed into a fully functional Long Term Care alternative. Not only can these be used to fill the gaps of LTC but they can also be designed with a large enough daily benefit and multiplier that they can provide a Nursing Care or Home Health Care benefit of well over $100,000 AND premiums NEVER increase on these policies.

Another major difficulty with LTC is its underwriting. It can be incredibly difficult to qualify for LTC because of the amount of money the policy needs to pay in the event of a claim. When going thru underwriting for LTC, the client will need to get a blood & urine test, full MIB and prescription check and even cognitive test. They are incredibly difficult to get approved. Short Term Care however is what we call “Easy Issue” meaning no blood or tests of any kind, just a list of questions.

For more information on Short Term Care, please contact us.

Most of you have heard of Child Whole Life Insurance policies such as the baby food brand but did you know there are way better kinds of policies out there? I’d like to take this opportunity to introduce you the IUL : Indexed Universal Life. While IUL policies can be extremely complex and incredibly customized, the standard policy has incredible potential. If I had to describe these policies in one sentence it would go something like this. An IUL is designed to act like a Whole Life policy without the Cash Value cap. What does that mean? Lets use an example where someone has a $10,000 Whole Life policy. The policy will endow at 100 or 121 and be worth $10,000. At this point the insurance company will most likely write a check for $10,000 and terminate the policy. By design a standard Whole Life policy’s cash value can never exceed the death benefit. An IUL however will raise the death benefit once the cash value starts to exceed the original death benefit.

This concept is an incredible benefit that has made the IUL one of the most popular policies sold today. These types of policies however are much more medically underwritten than standard Whole Life policies therefore they must be applied for while you’re young and healthy. Also, the younger you apply the lower your cost of insurance will be and also your premium. These policies can be used not only as high value death benefits for the insureds family but also as a way to generate tax-free money. Anyone and everyone who can medically qualify for such a policy should.

Unfortunately all too often I meet folks in their 70’s or 80’s who now realize they need Life Insurance and never imagined or prepared themselves for what a policy and that age can cost if they can even qualify. Just to give you an idea, a $10,000 Whole Life policy for someone in their 70’s can be anywhere from $60/mo. to well over $100/mo. depending on age, health and gender. Meanwhile if you start young, a $100,000 Whole Life policy can cost less than $50/mo. depending on age. This is why it’s crucial to start one for your kids as soon as you can. They will greatly benefit for the rest of their life without even understanding why you did this until they themselves grow old.


For more information on Index Universal Life or Child Whole Life policies please contact us.

At 70.5 years old, the government wants a piece of your tax-deferred savings and will force you to withdrawal a percentage of your money in order to generate revenue from taxation. Many retirees don’t need or want to take money from their IRA’s or other tax sheltered accounts but unfortunately we have no choice. However, this can be a good opportunity to start shift your money from the preservation phase to the distribution phase. You can read more about this here.


Having someone you can trust to help you create a proper plan is key. One isn’t better than the other it just depends what you’re looking for. I have personally heard of both being unreachable however I do tend to appreciate agents more than brokers for one simple reason: service.

Brokers represent many different companies and therefore can typically find you the lowest cost plan and offer a variety of different options. However this can also be a bad thing because they may not know the ins & outs of those plans or providers but just enough to sell you on it. They sell based on being able to provide the lowest cost plan.

Agents generally work for a single company which means they know their companies, products and plans a lot more thoroughly than most brokers would.  A good agent sells based on value. They may not have the lowest price but other value that they may bring to the table can be a huge benefit to the client.

When it comes to help with Medicare related issues, the most important feature should be that they are willing to come see you every year to review the plan changes. Whether or not you like your plan or have any changes in health or prescriptions, an annual review is still necessary. Make sure that your agent is local and that they give you their direct line. A referral from someone you know if helpful but don’t be afraid to get a second opinion. Just because your friend recommends someone doesn’t mean they know what they’re doing. Find someone that you connect with face to face and that is willing to educate you instead of just giving you prices.