Retire Today

By Jeremy KeilBusiness Investing

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Typical duration
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Retire Today episodes

August 07, 2024 How to Stretch Your Money Until You’re 100
Breaking down the 4 steps of the "live to 100" strategy as life expectancy increases and conventional retirement wisdom struggles to keep up.
Average life expectancy in the United States rises with each generation, and with that trend comes a lengthening of years lived after average retirement. As age 100 becomes more realistic for many people, how can you make sure your finances are set up in a way that takes care of you through your entire lifetime? This discussion was sparked by our recent podcast episode with Steve Sanduski, where we explored how financial planning needs to adapt as people routinely live healthy lives into their 100s.
The Retirement Spending Smile
One intriguing concept is the "retirement spending smile." This theory suggests that you tend to spend more at the beginning of retirement, less in the middle, and potentially more again later on due to increased healthcare costs. If you stay healthy until 100, your expenses might not follow the traditional downward trajectory and could spike due to medical needs.
The AARP Article and Longevity
Shortly after our discussion with Steve, I came across an article in the AARP magazine about making your money last until age 100. It got me thinking: if you live to 100, it's crucial to ensure your money does too. With advancements in healthcare, it's becoming more likely that many of us will reach this milestone. Therefore, it's essential to approach both your expenses and income with this long-term perspective.
Managing Your Expenses
Let's start with managing your expenses if you anticipate a long life. Knowing your biggest costs in retirement is key. From my research, housing, taxes, and healthcare are typically your top three expenses.
Housing:
According to the Bureau of Labor Statistics, housing costs can be about 35% of your overall expenses, including utilities and maintenance. However, if we strip out the additional costs, the core expense of shelter itself averages around 20%.
Consider paying off your mortgage before retirement or downsizing to reduce these costs. But be cautious with downsizing, as it often leads to additional expenses for new furniture and adjustments to your new home.
Taxes:
Surprisingly, taxes are often overlooked in retirement cost analyses. On average, they constitute about 7% of your expenses. One way to manage this is by diversifying your tax status across various accounts (traditional, savings, Roth, and brokerage accounts). This strategy gives you flexibility to adapt to changing tax laws over the decades.
Healthcare:
Healthcare costs increase as you age, making it essential to plan ahead. When you turn 65, deciding between a Medicare supplement plan and a Medicare Advantage plan is crucial. While the supplement plan might be more expensive upfront, it could save you significant out-of-pocket costs in the long run.
Additionally, consider long-term care insurance to protect against the high costs of assisted living or nursing care, which can be financially devastating if unplanned.
Maximizing Your Income
Now, let's talk about your income strategy to make it last until 100.
Social Security:
When making decisions about Social Security, remember its full title: Social Security Old-Age, Survivors, and Disability Insurance. This program is designed to provide support in old age, for survivors, and in case of disability.
Delaying Social Security benefits can maximize your lifetime income. Although filing early gives you more money now, waiting could result in higher monthly benefits later, which is crucial for long-term financial stability.
Part-Time Work:
Consider working part-time in retirement. For instance, would you prefer working full-time from age 60 to 65, or half-time from 62 to 70? Theoretically, the financial outcomes might be similar, but the extended work period can provide a more stable income stream and help stretch your savings.
Annuities:
Explore different income sources like annuities. These can convert your savings into a steady income stream, similar to a pension, providing financial security and often making retirees feel more comfortable spending their money. An article by David Blanchett suggests that having an annuity might give you a "license to spend," enhancing your retirement enjoyment.
Conclusion
If you plan to live to 100, you'll need to manage both your expenses and income proactively. On the expense side, focus on reducing housing costs, diversifying your tax status, and planning for healthcare expenses. On the income side, consider delaying Social Security, working part-time, and exploring annuities for a reliable income stream.
By taking these steps, you can ensure that your money lasts as long as you do, providing a secure and fulfilling retirement. Remember, it's not just about surviving until 100 but thriving with financial peace of mind.
Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!
Subscribe to Retirement Revealed to get new episodes every Wednesday.
Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337
Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify
Additional Links:
Retirement Revealed Episode 200 with Steve Sanduski
“How to Make Your Money Last to Age 100”, AARP Magazine
“Guaranteed Income: A License to Spend”, David Blanchett & Michael Finke
U.S. Bureau of Labor and Statistics: https://www.bls.gov/cex/tables/cross-tab/mean/reference-person-age-by-income-65-or-older-2021-2022.pdf
LongevityIllustrator.org
Connect With Jeremy Keil:
Keil Financial Partners
LinkedIn: Jeremy Keil
Facebook: Jeremy Keil
LinkedIn: Keil Financial Partners
YouTube: Retirement Revealed
Book an Intro Call with Jeremy’s Team
===
Disclosures
Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.
All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.
This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.
The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past Performance is no guarantee of future results.
Legal & Tax Disclosure
Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.
Advisor Disclosures
Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.
Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at https://adviserinfo.sec.gov/firm/summary/333587 or by requesting Form ADV Part 2A.
The content of this media should not be reproduced or redistributed without the firm’s written consent. Any trademarks or service marks mentioned belong to their respective owners and are used for identification purposes only.
For important disclosures visit: https://keilfp.com/disclosures/
===
23 min
July 31, 2024 How Financial Planning Changes when People Routinely Live Healthy to 100 with Steve Sanduski
How would retirement planning change if life expectancy rose to age 100? Exploring how differently each generation approaches retirement saving and spending.
35 min
July 24, 2024 Remarriage & Social Security: What Happens Next!
Exploring the rules & options for how to handle the Social Security survivor benefit in the event of remarriage.
16 min
July 17, 2024 How Money Talk Can Transform Your Marriage and Retirement
5 steps to improve your money talks in marriage to set up a better retirement and financial plan with your spouse.
18 min
July 10, 2024 How to Decide the Right Time to Take Your Pension
Learn how to calculate the impact on your pension from changing your start date and evaluate the value of your pension based on your financial situation.
15 min
July 03, 2024 How Financial Advisors Make Money
Examining the different fee structures for financial advisors and the typical situations that people utilize them in, as well as the red flags to look out for when looking for an advisor.
11 min
June 26, 2024 Maximizing Your Spousal and Survivor Social Security Benefits
Discovering the link between Social Security benefits within a couple and breaking down the consequences of deciding when each person starts taking it.
14 min
June 19, 2024 How do Annuities Work? With David Lau
David Lau of DPL Financial Partners discusses the in’s and out’s of annuities, what to look for in a good annuity and how to utilize them properly in your retirement plan.
Annuities are a hot button topic among investors, but my guest in this week’s “Retirement Revealed” podcast, David Lau of DPL Financial Partners, sees the inherent problems with how annuities have been treated in the past. He shared his thoughts on how we can change the way annuities are purchased and perceived.
The Controversy of Annuities
Annuities often find themselves at the center of controversy in the financial world. On the one hand, Nobel Prize-winning economists and retirees alike appreciate the security and guaranteed income they provide. Yet, the mention of annuities can provoke strong negative reactions, mainly due to their high fees and the commissions they generate for salespeople. The irony is that while people might dislike annuities, they cherish their pensions and Social Security, both of which are essentially forms of annuities but without the hefty fees.
High Commissions: The Root of the Problem?
The high fees associated with annuities often stem from high commissions. This structure has led to situations where clients are sold products that might not be in their best interest, simply because they generate higher commissions for the advisor. For example, I had a client who was recommended to switch from one annuity to another. Upon review, the new annuity did not offer better guarantees, yet the advisor stood to earn a significant commission from the switch. This kind of practice erodes trust and tarnishes the reputation of annuities as a financial product.
The Long Surrender Periods
Another significant issue with many annuities is the long surrender periods. I recall a case where an annuity purchased in 2005 had a 17-year surrender period, with a penalty as high as 20% in the initial years. Such conditions can trap clients in unfavorable contracts, making it difficult for them to access their funds without substantial penalties. This lack of flexibility further contributes to the negative perception of annuities.
Evaluating the Real Benefits
Despite these drawbacks, annuities can be beneficial under the right circumstances. They offer tax deferral, guaranteed lifetime income, and downside protection, which can be valuable for certain individuals. However, it’s crucial to evaluate whether these benefits align with your financial goals. For instance, if you’re not seeking lifetime income or don’t need the tax deferral benefits, an annuity might not be the best choice for you.
The Importance of Tailored Financial Advice
What stands out in the annuity debate is the need for personalized financial advice. The Retirement Income Style Awareness (RISA) profile, for example, helps determine the best investment strategies based on your individual goals and risk tolerance. This approach contrasts with the one-size-fits-all mentality that sometimes pervades the industry. Everyone's financial situation is unique, and the right financial product should fit their specific needs, not the other way around.
The Role of Different Financial Advisors
Understanding the type of financial advisor you’re working with can also shed light on the recommendations you receive. Advisors affiliated with big brokerage firms, registered investment advisors, or insurance companies may have different biases and product offerings. For example, insurance company advisors might lean towards selling more insurance products, while registered investment advisors might not offer enough insurance options. Striking a balance and ensuring your advisor is independent and unbiased can help you receive more holistic and beneficial advice.
Moving Towards Fee-Based Models
One promising development is the shift towards fee-based models, which can eliminate the conflict of interest inherent in commission-based sales. By focusing on fee-based advice, advisors can recommend products that truly meet their clients' needs without the influence of commission incentives. This model promotes transparency and builds trust between advisors and clients.
Once you have a clearer picture about the risks and benefits of annuities, you can approach them as another avenue to round out your investment strategy.
Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!
Subscribe to Retirement Revealed to get new episodes every Wednesday.
Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337
Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify
Watch the full episode with David Lau on the Mr. Retirement YouTube Channel: https://youtu.be/poadpc9ngCA
Additional Links:
“The Ultimate Guide to Understanding Annuities” - Mr. Retirement
DPL Financial Partners
David Lau, LinkedIn: https://www.linkedin.com/in/david-lau-dpl/
Connect With Jeremy Keil:
Keil Financial Partners
LinkedIn: Jeremy Keil
Facebook: Jeremy Keil
LinkedIn: Keil Financial Partners
YouTube: Retirement Revealed
Book an Intro Call with Jeremy’s Team
===
Disclosures
Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.
All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.
This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.
The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past Performance is no guarantee of future results.
Legal & Tax Disclosure
Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.
Advisor Disclosures
Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.
Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at https://adviserinfo.sec.gov/firm/summary/333587 or by requesting Form ADV Part 2A.
The content of this media should not be reproduced or redistributed without the firm’s written consent. Any trademarks or service marks mentioned belong to their respective owners and are used for identification purposes only.
For important disclosures visit: https://keilfp.com/disclosures/
===
42 min
June 12, 2024 Key Findings from 2024 Retirement Survey You Can’t Miss
Identifying retirement sentiment from the Employee Benefit Research Institute (EBRI) retirement confidence survey and examining the strategies you can use to avoid unnecessary financial strain in retirement.
14 min
June 05, 2024 HSA Health Savings Accounts Strategies for 2024
Identifying the common health savings account mistakes, identifying key strategies to maximize your HSA and exploring some of the practical ways to utilize your HSA over your lifetime.
If you're like many people, you might not be getting the most out of your HSA. Let’s explore why that might be and how you can change it.
Understanding HSA Contributions and Limits
Firstly, let's clarify how much you can contribute to your HSA. The contribution limits for 2024 are $4,150 for individual coverage and $8,300 for family coverage. However, many people aren't maximizing these contributions. Why? One common misconception is that you can only contribute through payroll deductions. While this is the most common method, you are able to contribute outside of your payroll deductions all the way up to the max. This could significantly enhance your retirement savings due to the triple tax advantage HSAs offer.
HSA vs. FSA: Don't Confuse Them
Another mistake is treating your HSA like a Flexible Spending Account (FSA). Unlike FSAs, HSAs don’t have a “use it or lose it” rule. Funds in an HSA roll over year after year and can be invested, allowing your money to grow tax-free over time. This means you can contribute the maximum amount to your HSA and not worry about spending it within the same year.
The Power of Investing Your HSA
A significant error many people make is not investing their HSA funds. If you're only earning a meager 0.5% interest on your HSA balance, you're missing out on potential growth. In fact, I recently helped a client move their HSA to a provider offering a 5% interest rate, resulting in an additional $6,000 in interest annually. This change alone can make a substantial difference in your retirement funds.
Using HSAs for Qualified Medical Expenses
HSAs are often referred to as "medical IRAs" because they offer similar benefits but with added advantages. Contributions are tax-deductible, growth is tax-deferred, and withdrawals for qualified medical expenses are tax-free. This makes HSAs incredibly valuable for covering future healthcare costs, which are a significant concern for many retirees.
You can also use HSA funds for certain insurance premiums, such as long-term care insurance, COBRA, and Medicare Part B. This flexibility adds another layer of security for your retirement years.
Strategizing Your HSA Usage
Instead of viewing your HSA as a passive asset, you can get more out of it by taking a more strategic approach:
Max Out Contributions: Contribute the maximum allowable amount each year.
Invest Wisely: Choose an HSA provider that offers high-interest rates or investment options.
Delay Withdrawals: Pay for current medical expenses out-of-pocket if possible, and save the receipts. You can reimburse yourself later, allowing your HSA funds to grow.
Keep Detailed Records: Maintain a spreadsheet of your medical expenses to simplify future reimbursements.
Planning for Excess HSA Funds
If you find yourself with excess HSA funds later in life, there are several options. Once you reach 65, withdrawals for non-medical expenses are treated like distributions from a traditional IRA, subject to income tax but no penalties. If you pass away, your spouse can inherit your HSA and continue to use it for qualified medical expenses. For other beneficiaries, the HSA balance becomes taxable income. Consider leaving excess HSA funds to charity, which can provide a tax-efficient legacy.
Maximizing your HSA can significantly bolster your retirement savings and provide a buffer against future medical expenses. To get the most out of your HSA, ensure you're fully funding it, investing wisely, and using it strategically.
For more detailed guidance, check out my YouTube channel, Mr. Retirement, where I delve into the top HSA mistakes and strategies, and rank the best HSA providers based on interest rates and fees.
Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!
Subscribe to Retirement Revealed to get new episodes every Wednesday.
Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337
Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify
Additional Links:
“Top 3 Strategies to get More out of your HSA” - Mr. Retirement YouTube
“Ranking the 4 Biggest HSA Provider” - Mr. Retirement YouTube
“3 Biggest HSA Mistakes” - Mr. Retirement YouTube
“The Ultimate Guide to Health Savings Accounts (HSAs)” - KeilFP.com
Connect With Jeremy Keil:
Keil Financial Partners
LinkedIn: Jeremy Keil
Facebook: Jeremy Keil
LinkedIn: Keil Financial Partners
YouTube: Retirement Revealed
Book an Intro Call with Jeremy’s Team
===
Disclosures
Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.
All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.
This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.
The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past Performance is no guarantee of future results.
Legal & Tax Disclosure
Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.
Advisor Disclosures
Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.
Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at https://adviserinfo.sec.gov/firm/summary/333587 or by requesting Form ADV Part 2A.
The content of this media should not be reproduced or redistributed without the firm’s written consent. Any trademarks or service marks mentioned belong to their respective owners and are used for identification purposes only.
For important disclosures visit: https://keilfp.com/disclosures/
===
18 min

About Retire Today

From the publisher's feed

In the Retire Today podcast, Jeremy Keil, CFP®, CFA® shows you how to turn your retirement savings into retirement income. Listen in as Jeremy and his guests guide you towards making smarter…