Latest / Money In Motion with Klaas Financial / Various Types of Insurance Coverage

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Various Types of Insurance Coverage · Money In Motion with Klaas Financial

• 0:00
  Speaker 1: At our phone lines. They are open to you right now.
• 0:02
  Speaker 1: If you've got a question for our retirement playing professionals
• 0:05
  Speaker 1: from Class Financial. The telephone number to get on the
• 0:07
  Speaker 1: air six oh eight three two one thirteen ten. That's
• 0:10
  Speaker 1: six oh eight three two one thirteen ten. This week
• 0:12
  Speaker 1: we're going to be talking insurance, but if you have
• 0:15
  Speaker 1: any type of retirement related questions, we do have our
• 0:17
  Speaker 1: professionals here for you. Just got to keep a pickup
• 0:20
  Speaker 1: phone gifts call six oh eight three two one thirteen ten.
• 0:23
  Speaker 1: That's six oh eight three two one thirteen ten. You
• 0:25
  Speaker 1: can learn more about cost Financial on their website Coss
• 0:28
  Speaker 1: Financial dot com. That's Coss k l aas Financial dot com.
• 0:33
  Speaker 1: They're telephone number six oh eight four four two five
• 0:36
  Speaker 1: six three seven. No charge for that initial get to
• 0:38
  Speaker 1: know your appointment at Costs Financial. It will be complimentary
• 0:41
  Speaker 1: to you again their number six oh eight four four
• 0:43
  Speaker 1: two five six three seven. Joined this week by CJ.
• 0:46
  Speaker 1: Closs and Eric Schwartze of Klass Financial. Eric, how or
• 0:49
  Speaker 1: excuse me? CJ. I'll go to you first. How you
• 0:51
  Speaker 1: doing this morning?
• 0:53
  Speaker 2: I'm doing great? Sean? How are you?
• 0:55
  Speaker 1: I'm doing really good? Great talk with you. Eric, how
• 0:57
  Speaker 1: have you been.
• 0:58
  Speaker 3: I'm doing pretty well. You can you can do? You
• 1:01
  Speaker 3: can ask me first next time.
• 1:02
  Speaker 1: I well, I definitely will. I was worried because I'm
• 1:05
  Speaker 1: I was like, oh it is Katie may have CJ
• 1:08
  Speaker 1: up first and then bring Eric up after want to.
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  Speaker 1: I didn't want to cause I didn't want to cause confusion,
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  Speaker 1: but definitely worriestuf we've got We're talking insurance this week,
• 1:18
  Speaker 1: and various insurance coverages and things need to be aware of.
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  Speaker 2: Which is.
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  Speaker 1: It's going to be a really really good topic and
• 1:23
  Speaker 1: an important topic as well. And each and every week,
• 1:26
  Speaker 1: of course, we have a lot of fun on this program,
• 1:28
  Speaker 1: but there's also really important conversations had. And if you
• 1:30
  Speaker 1: ever missed part of the show go over. You can
• 1:32
  Speaker 1: always listen back to the podcast at class financial dot com.
• 1:35
  Speaker 1: You can also subscribe right online at the website colss
• 1:38
  Speaker 1: financial dot com that's k l a as financial dot com.
• 1:41
  Speaker 1: And before we get to this week's topic, one of
• 1:43
  Speaker 1: the cool features of the show each and every week
• 1:45
  Speaker 1: is the Class Quiz Question of the week. Your chance
• 1:47
  Speaker 1: to win a fantastic prize. This week, no exception, our
• 1:50
  Speaker 1: friends from class Financial have provided a twenty five dollars
• 1:53
  Speaker 1: gift card to Starbucks. Tell you a little bit later
• 1:55
  Speaker 1: on in the program, specifically how you can win Little
• 1:58
  Speaker 1: Tipto if you listen closely. Just about every week, the
• 2:00
  Speaker 1: question and answer come up during the show, and before
• 2:03
  Speaker 1: we start this week's conversation about insurance coverages and some
• 2:07
  Speaker 1: of the things you need to consider when you before
• 2:10
  Speaker 1: and when you're retired, let's actually take a look back
• 2:12
  Speaker 1: at last week's program and get the question and answer
• 2:15
  Speaker 1: to the class quiz question of the week.
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  Speaker 3: Eric, absolutely so, thank you to everybody for listening as always,
• 2:21
  Speaker 3: and special congratulations to Peter from WannaKey.
• 2:24
  Speaker 2: Who's our winner. Last week.
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  Speaker 3: The question was if you are under the age of
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  Speaker 3: fifty this year, what is the maximum that you can
• 2:31
  Speaker 3: contribute to your four oh one K or four h
• 2:33
  Speaker 3: three B And we had multiple choice. It was either
• 2:36
  Speaker 3: twenty thousand or twenty three thousand, five hundred, and Peter
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  Speaker 3: knew the correct answer was twenty three thousand, five hundred dollars.
• 2:43
  Speaker 1: Ooh, and it was a really informative program as we
• 2:46
  Speaker 1: talk about contributions and other things. A really important program
• 2:50
  Speaker 1: last week as well, as I mentioned, you can of
• 2:52
  Speaker 1: course subscribe to the podcast right at classfinancial dot com. Also,
• 2:54
  Speaker 1: while you're there you and get to know the team,
• 2:56
  Speaker 1: you can learn a little bit more about the separate
• 2:57
  Speaker 1: division set colass Financial. Also on a cool feature on
• 3:00
  Speaker 1: the website classfinancial dot com is the weekly Market Pulse newsletter.
• 3:03
  Speaker 1: You can subscribe right at classfinancial dot com. So today
• 3:06
  Speaker 1: we're going to be talking about various insurance coverages that
• 3:09
  Speaker 1: folks should be aware of. Are there specific changes to
• 3:13
  Speaker 1: policies that folks may want to consider before they retire?
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  Speaker 2: Yeah, good question, Sean.
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  Speaker 4: So for those who know who have listened to our
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  Speaker 4: show for a while, we do retirement planning, and so
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  Speaker 4: this show is just all about answering people's questions as
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  Speaker 4: they relate to preparing for and executing on a successful retirement,
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  Speaker 4: and certainly as financial advisors, financial planners, retirement planners, whatever terminology.
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  Speaker 2: You want to use.
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  Speaker 4: Insurance is a huge part of that. And so there's
• 3:44
  Speaker 4: different kind of pillars that make up your financial life.
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  Speaker 4: We often see them in the area of insurance, taxes,
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  Speaker 4: estate planning, investments, and maybe banking or lending, and these
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  Speaker 4: can if you get these wrong, these pillars can really
• 3:58
  Speaker 4: destabilize your overall financial life and So today we're talking
• 4:02
  Speaker 4: about insurance, and specifically four key areas of insurance. This
• 4:08
  Speaker 4: would be health insurance, life insurance, long term care insurance,
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  Speaker 4: and property and casualty. Now you could add a fifth
• 4:14
  Speaker 4: into here, called like disability insurance, but we're just not
• 4:17
  Speaker 4: talking about that today. So anybody who's an insurance agent,
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  Speaker 4: don't worry, we see you. We know there's more areas
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  Speaker 4: of insurance besides these four key areas, but these are
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  Speaker 4: some of the big ones that we want to discuss
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  Speaker 4: with our listeners today. Now, before we get into these
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  Speaker 4: four key areas, I do want to mention so class financial.
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  Speaker 4: We're a fee based retirement planning firm. We do have
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  Speaker 4: some individuals who are insurance license on our team, but
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  Speaker 4: we do not sell insurance. We maintain those licenses at
• 4:43
  Speaker 4: this point because of well number one, some legacy business
• 4:47
  Speaker 4: from generations ago. But number two so that we can
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  Speaker 4: speak with authority to this topic. So it's not me
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  Speaker 4: saying I'm not licensed to talk about this. The beauty
• 4:54
  Speaker 4: is that I actually am licensed to talk about this. Okay,
• 4:58
  Speaker 4: with that kind of disclaimer out of the way, So again,
• 5:00
  Speaker 4: these four key areas health insurance, life insurance, long term
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  Speaker 4: care insurance, and then P and C Property and casualty.
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  Speaker 4: I'm going to begin with health insurance considerations.
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  Speaker 2: Number one.
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  Speaker 4: When you think about health insurance, since we are retirement
• 5:13
  Speaker 4: planners for US, the number one category of health slash
• 5:17
  Speaker 4: medical insurance is Medicare. Medicare is a federal health insurance
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  Speaker 4: program for individuals sixty five and older. You can typically
• 5:26
  Speaker 4: enroll during a seven month window starting three months before.
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  Speaker 2: Your sixty fifth birthday.
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  Speaker 4: You can visit medicare dot gov for details, but you
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  Speaker 4: don't want to miss that enrollment deadline. So first category
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  Speaker 4: of health insurance is Medicare for people sixty five and older. Now,
• 5:43
  Speaker 4: if you're under sixty five, you can consider other options.
• 5:46
  Speaker 4: Check if your employer offers health insurance, if you have
• 5:49
  Speaker 4: a spouse who has employer sponsored health insurance. If you're
• 5:53
  Speaker 4: no longer employed but you were recently, you consider if
• 5:56
  Speaker 4: there's consider if they offer something called Cobra, which most
• 6:00
  Speaker 4: large group health insurance plans are required off for Cobra.
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  Speaker 2: Cobra.
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  Speaker 4: By the way, this is off the top of my head.
• 6:06
  Speaker 4: By the way, I think I believe that SUNDS for
• 6:07
  Speaker 4: consolidated I'm a budget Reconciliation Act. Eric might know anyway,
• 6:15
  Speaker 4: it doesn't matter. It's this weird, weird acronym for this
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  Speaker 4: weird statement that just has to do with the extension
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  Speaker 4: of the group coverage paid for out of pocket by
• 6:24
  Speaker 4: you after you leave an employer. Now, that is a
• 6:27
  Speaker 4: limited timeframe. I think it's typically eighteen to thirty six months.
• 6:30
  Speaker 4: It's the MAXI amount of time that you can get
• 6:32
  Speaker 4: extension of your group plan. Now, some of you are going,
• 6:36
  Speaker 4: but wait, what if I'm under sixty five, I don't
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  Speaker 4: have COBRA, I don't have a spouse's employer plan, and
• 6:42
  Speaker 4: I don't have my own group employer plan. Am I
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  Speaker 4: just you know SOL? And the answer is no. That's
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  Speaker 4: where kind of the Affordable Care Act and the marketplace
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  Speaker 4: comes in to impact you. And so certainly go to
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  Speaker 4: go to the website to look up Affordable Care Act
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  Speaker 4: and look at what might be available to you there. Typically,
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  Speaker 4: when you're dealing with the Affordable Care Actor, the marketplace,
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  Speaker 4: your what's called your modified adjusted gross income will have
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  Speaker 4: a huge impact on whether or not that is inexpensive
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  Speaker 4: or super expensive. And then finally, last kind of area
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  Speaker 4: here of health insurance to think about is again within
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  Speaker 4: the category of Medicare, but it would be Medicare supplements
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  Speaker 4: and prescription plans known as Part D plans. So within
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  Speaker 4: the traditional world of Medicare, you get Part A, which
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  Speaker 4: is a hospital insurance, Part B, which is medical insurance.
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  Speaker 4: That Part B is typically comes out of your Social
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  Speaker 4: Security if you're drawing social Security, otherwise you have to
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  Speaker 4: pay for it separately. But then there remains a gap,
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  Speaker 4: and so that's where those Medicare supplement plans can fill
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  Speaker 4: that gap. And then you often need a prescription plan
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  Speaker 4: as well in case you need a prescriptions as you
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  Speaker 4: go kind of further into retirement. So there's kind of
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  Speaker 4: three core areas of health insurance to be thinking about.
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  Speaker 1: You know, CJ, when you were talking mentioned coolbra there,
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  Speaker 1: I thought you were going to mention. I think for
• 7:59
  Speaker 1: a lot of folks that look into that as an option,
• 8:03
  Speaker 1: they suddenly really appreciate what their employer was because.
• 8:07
  Speaker 4: That's right Sean, Yeah, we we I listen. I'm one
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  Speaker 4: of the owners here at Class Financial along with Eric
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  Speaker 4: actually is another one of our owners on the show
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  Speaker 4: here today, and so we get the inside scoop on
• 8:19
  Speaker 4: these health insurance premiums and it's I mean, we are
• 8:22
  Speaker 4: proud and happy and just overjoyed that we can offer it,
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  Speaker 4: but it's often we just try to like hold it
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  Speaker 4: up in front of the entire team to say, hey,
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  Speaker 4: just your health insurance alone is darn near one thousand
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  Speaker 4: dollars a month, Like, let's at least acknowledge that as
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  Speaker 4: a benefit instead of like you know, shoving it down
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  Speaker 4: under the road.
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  Speaker 1: It's a pretty significant and it's important stuff. As we
• 8:42
  Speaker 1: talked this morning with CJ. Class and Eric Schwartz, our
• 8:45
  Speaker 1: retirement planning professionals from Class Financial. Of course you can
• 8:48
  Speaker 1: learn more online their website Class financial dot com. That's
• 8:51
  Speaker 1: coss k l a A S Financial dot com. And Eric,
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  Speaker 1: what about life insurance? Is is that something that you
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  Speaker 1: know if you're retired to it? Do I really need
• 9:00
  Speaker 1: to be thinking about that?
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  Speaker 3: You definitely need to be thinking about it. And before
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  Speaker 3: I jump into that, CJA, you were so close, it's
• 9:07
  Speaker 3: the Consolidated Omnibus Budget Reconciliation Act.
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  Speaker 2: It rolls right off the target.
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  Speaker 1: So you can you got it?
• 9:14
  Speaker 2: You bet? You bet?
• 9:16
  Speaker 3: Yeah? Shad your question though about life insurance. This is
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  Speaker 3: something we deal with with folks a lot because people
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  Speaker 3: generally purchase life insurance earlier in their life. You know,
• 9:26
  Speaker 3: maybe they have young kids, or they have a mortgage
• 9:28
  Speaker 3: or something like that, and then it's kind of something
• 9:31
  Speaker 3: that just sits in the background for many years. And
• 9:34
  Speaker 3: then you know, you come to retirement and you have
• 9:36
  Speaker 3: to start thinking about your expenses and you look at
• 9:39
  Speaker 3: that life insurance premium and you say, gosh, is this
• 9:41
  Speaker 3: something that I need to keep paying for?
• 9:44
  Speaker 2: And maybe not.
• 9:45
  Speaker 3: So you know, if your children are financially independent, your
• 9:48
  Speaker 3: mortgage is paid off, and your your savings can support
• 9:51
  Speaker 3: you and your spouse, your life insurance needs have definitely changed,
• 9:55
  Speaker 3: and in many cases, you know, they've gone down. So
• 9:58
  Speaker 3: what you want to be thinking about is take a
• 10:01
  Speaker 3: look at the policies you have. First of all, figure
• 10:03
  Speaker 3: out what type do you have. Are they are they term?
• 10:05
  Speaker 3: Are they are they whole life? Are they you know,
• 10:10
  Speaker 3: in the case of a term policy, are you just
• 10:12
  Speaker 3: paying for a certain number of years whole life? Do
• 10:14
  Speaker 3: you have a cash value in there that you could
• 10:17
  Speaker 3: that you could access, Take a look at the death benefits,
• 10:20
  Speaker 3: and then very importantly, make sure you know how much
• 10:23
  Speaker 3: you're paying in premiums. Oftentimes those are just drawn automatically
• 10:27
  Speaker 3: from your bank account, and kind of can can slide
• 10:31
  Speaker 3: under the radar. And one other really important point that
• 10:34
  Speaker 3: CJ can speak to as well, double check who the
• 10:37
  Speaker 3: listed beneficiaries are on these policies. Because they are taken
• 10:41
  Speaker 3: out early in life, the people that are important to
• 10:44
  Speaker 3: you may have changed in that time. So who want
• 10:47
  Speaker 3: to make sure that if anything happens to you, your
• 10:49
  Speaker 3: benefits actually go to the person that you person or
• 10:53
  Speaker 3: people that you intend. So those are the things we
• 10:56
  Speaker 3: want to be thinking about reviewing. And then from there
• 10:59
  Speaker 3: you have they have to make the decision do I
• 11:01
  Speaker 3: retain these life insurance policies. So I want to just
• 11:04
  Speaker 3: go through a few reasons here why you might want to. Okay,
• 11:08
  Speaker 3: so I said earlier, you know, if your mortgage is
• 11:11
  Speaker 3: paid off, if your kids are are launched successfully, and
• 11:15
  Speaker 3: and you know you have enough savings, you may not
• 11:17
  Speaker 3: need insurance. But the things in retirement people will often
• 11:22
  Speaker 3: keep life insurance around for are things like covering funeral expenses.
• 11:26
  Speaker 3: We talked about this a few weeks ago on the show.
• 11:29
  Speaker 3: We talked about that costing you know, somewhere between eight
• 11:32
  Speaker 3: and ten thousand dollars, if not more. They'll keep coverage
• 11:36
  Speaker 3: around to protect their spouse from financial strain, especially if
• 11:41
  Speaker 3: your death reduces social security or pension benefits, so providing
• 11:45
  Speaker 3: some spousal support. People use it to provide inheritance for
• 11:50
  Speaker 3: their children, so you know, upon your death there is
• 11:53
  Speaker 3: a there's a death benefit that can that can go
• 11:57
  Speaker 3: to your kids that really isn't in acted by your
• 12:00
  Speaker 3: retirement spending, especially if you go into like a long
• 12:03
  Speaker 3: term care facility. And then for state planning purposes, people
• 12:08
  Speaker 3: will use life insurance to pay a state or income
• 12:11
  Speaker 3: taxes on inherited I arrays or just any taxable portion
• 12:16
  Speaker 3: of your estate that exceeds the current federal exemption. Now
• 12:20
  Speaker 3: the federal exemption is quite high right now, it's a
• 12:23
  Speaker 3: thirteen point nine to nine million dollars or twenty seven
• 12:27
  Speaker 3: point nine eight million dollars per couple, So those those
• 12:30
  Speaker 3: numbers are pretty high. They are a lot higher than
• 12:32
  Speaker 3: they used to be. So, you know, for a lot
• 12:35
  Speaker 3: of people, life insurance doesn't always come into play in
• 12:38
  Speaker 3: that case. But as you begin making these decisions, just
• 12:43
  Speaker 3: really move cautiously before you make changes to your coverage.
• 12:46
  Speaker 3: Make sure you're talking to a financial professional before you
• 12:49
  Speaker 3: you know, stop making those premium payments or call up
• 12:52
  Speaker 3: the insurance company and tell them to send you your
• 12:54
  Speaker 3: cash value because it is it becomes much more difficult
• 12:57
  Speaker 3: to qualify for new policies as you age because let
• 13:01
  Speaker 3: the insurance company is looking at you know your health
• 13:04
  Speaker 3: and how likely you are to live for for a
• 13:09
  Speaker 3: long time. So just move slowly in this, but definitely
• 13:12
  Speaker 3: something we want to be addressing as we move in
• 13:14
  Speaker 3: on retirement.
• 13:15
  Speaker 1: Talking this morning with Eric Schwartz and CJ. Closs. They
• 13:18
  Speaker 1: are our retirement planning professionals from Class Financial website Class
• 13:21
  Speaker 1: Financial dot com. That's Coss k l aas Financial dot Com.
• 13:25
  Speaker 1: They're telephon number six oh eight four four two five
• 13:27
  Speaker 1: six three seven. No charge for that initial gets to
• 13:30
  Speaker 1: know your appointment at Coss Financial. It'll be complimentary to
• 13:33
  Speaker 1: you again. They're number six oh eight four four two
• 13:35
  Speaker 1: five six three seven. Talk a little bit more about insurance.
• 13:38
  Speaker 1: We'll get into things like long term care and other areas.
• 13:41
  Speaker 1: We will do that next. As Money in Motion with
• 13:43
  Speaker 1: Coss Financial continues right here on thirteen ten WIBA talking
• 13:47
  Speaker 1: with our retirement planning professionals from Class Financial, Eric Schwartz
• 13:50
  Speaker 1: and CJ. Closs. Of course, they're telephone number six oh
• 13:53
  Speaker 1: eight four four two five six three seven. No charge
• 13:56
  Speaker 1: for that initial get to know your appointment at COSS Financial.
• 13:59
  Speaker 1: It will be compliment entry to you again, they're telephone
• 14:01
  Speaker 1: number six O eight four four two five six three seven.
• 14:04
  Speaker 1: Of course, the website coss financial dot com. That's colss
• 14:07
  Speaker 1: k l a A S Financial dot com talking insurance
• 14:10
  Speaker 1: this week and the different types of products out there
• 14:13
  Speaker 1: and some of the things to keep in mind when
• 14:15
  Speaker 1: you are working through some of these decisions. And one
• 14:18
  Speaker 1: of those big decisions is long term care insurance and
• 14:23
  Speaker 1: CJ should people be looking into that or what's kind
• 14:26
  Speaker 1: of the guidance there?
• 14:28
  Speaker 4: Yeah, possibly, you know, in many of these categories, you
• 14:32
  Speaker 4: do have to be cautious. We did a show a
• 14:34
  Speaker 4: while ago as it related to just different ways the
• 14:37
  Speaker 4: different financial professionals you may engage get compensated, and one
• 14:40
  Speaker 4: of our commentaries at that time was there there will
• 14:44
  Speaker 4: always be inherently more potential conflicts of interest if people
• 14:49
  Speaker 4: are selling a product.
• 14:51
  Speaker 2: Versus a service.
• 14:53
  Speaker 4: I repeat that there's inherently more potential conflicts of interest
• 14:57
  Speaker 4: if people are selling a product instead of a service.
• 14:59
  Speaker 4: Now that that doesn't mean that life insurance is bad,
• 15:02
  Speaker 4: or that any form of insurance is bad. It just
• 15:04
  Speaker 4: means that typically the people who are selling it to
• 15:06
  Speaker 4: you are selling that product for a commission versus just
• 15:09
  Speaker 4: giving you advice for a fee as an example. So
• 15:13
  Speaker 4: that's one way that we act as a fiduciary in
• 15:16
  Speaker 4: behalf of our clients, as we say, Hey, I'm not
• 15:18
  Speaker 4: going to sell this to you. I'm not going to
• 15:19
  Speaker 4: get paid on this stuff, but I am going to
• 15:21
  Speaker 4: give you some guidance based on what I see in
• 15:24
  Speaker 4: your kind of global financial picture. This can be one
• 15:26
  Speaker 4: of the huge powers of working with a fiduciary advisor
• 15:30
  Speaker 4: if they are truly a fiduciary advisor, and that's a
• 15:33
  Speaker 4: big if, but if they are, it can be here's
• 15:36
  Speaker 4: what I see. You know Eric was talking about life insurance.
• 15:39
  Speaker 4: It could be Hey, I know you just got married
• 15:41
  Speaker 4: and I know you just had your first child here,
• 15:43
  Speaker 4: but like, you don't have any life insurance and if
• 15:46
  Speaker 4: something goes wrong, it's going to be a mess. So, like,
• 15:49
  Speaker 4: go get some insurance. The beauty is when Eric says
• 15:52
  Speaker 4: that to a couple, he gets paid nothing for that advice, right,
• 15:56
  Speaker 4: It's just his guidance based on his expertise and his experience.
• 16:01
  Speaker 4: So similarly, long term care insurance would fit this category
• 16:05
  Speaker 4: of like, you need to be educated and understand what
• 16:08
  Speaker 4: this is. So a couple things here, and these are
• 16:12
  Speaker 4: rules of thumb, So please talk to your insurance agent,
• 16:14
  Speaker 4: to your financial advisors you move towards this topic to
• 16:17
  Speaker 4: see what is right for you.
• 16:18
  Speaker 2: But some rules of.
• 16:19
  Speaker 4: Thumb would be Number one, consider this in the five
• 16:24
  Speaker 4: to ten year range before retirement or right after retirement. Again,
• 16:28
  Speaker 4: five to ten year range before retirement or right after retirement.
• 16:32
  Speaker 4: Now there can be some exceptions of that. If you're
• 16:34
  Speaker 4: retiring at seventy five, you should be looking at this
• 16:36
  Speaker 4: earlier than that. But I'm thinking if you're retiring somewhere
• 16:39
  Speaker 4: between sixty to sixty five, you might want to be
• 16:42
  Speaker 4: looking at or evaluating long term care between fifty and
• 16:45
  Speaker 4: sixty five, if that makes sense. So that's kind of
• 16:47
  Speaker 4: the window of time to evaluate. Secondarily, within the area
• 16:50
  Speaker 4: of long term care insurance, we often find it is
• 16:53
  Speaker 4: very difficult for you to buy it before you are retired,
• 16:57
  Speaker 4: or at least before you do a comprehensive retirement evaluation
• 17:01
  Speaker 4: with an advisor. And the reason is because listen, if
• 17:04
  Speaker 4: you're working. It's easy to say, sure, I've got three
• 17:07
  Speaker 4: thousand dollars a year to put towards long term care insurance,
• 17:10
  Speaker 4: but that's not going to be the majority of the
• 17:12
  Speaker 4: time that you're paying for it. The majority of the
• 17:14
  Speaker 4: time you're going to be paying for that policy is
• 17:16
  Speaker 4: when you're in retirement on more of a fixed income.
• 17:19
  Speaker 4: So you need to know if you can afford that three,
• 17:22
  Speaker 4: four or five thousand dollars a year in an annual premium.
• 17:25
  Speaker 4: So there's another kind of like tip or something to
• 17:27
  Speaker 4: be aware of. Number three would be insure yourself for
• 17:31
  Speaker 4: the gap, not for the entire cost. Now that's just advice.
• 17:36
  Speaker 4: That doesn't mean you have to do it that way.
• 17:38
  Speaker 4: But let me explain what I mean. Often people will
• 17:40
  Speaker 4: come back and say, I talk to a long term
• 17:42
  Speaker 4: care insurance specialist and they told me it could cost
• 17:44
  Speaker 4: me up to one hundred and twenty thousand dollars a
• 17:46
  Speaker 4: year to be in a memory care facility. And so
• 17:48
  Speaker 4: I got a policy for ten years up that pays
• 17:50
  Speaker 4: one hundred and twenty thousand dollars a year, And I go,
• 17:53
  Speaker 4: why why did you do that? Well, because that's the cost,
• 17:57
  Speaker 4: And I go, yeah, But you have seventy thousand dollars
• 18:00
  Speaker 4: a year between pensions and social security, you don't need
• 18:03
  Speaker 4: to ensure the full one twenty. You need to ensure
• 18:06
  Speaker 4: the gap. So you get the idea.
• 18:09
  Speaker 2: You need to be.
• 18:10
  Speaker 4: Nuanced and understanding kind of how this operates and what
• 18:15
  Speaker 4: kind of care you need. And by the way, you know,
• 18:18
  Speaker 4: people like to throw insurance agents under the bus saying, well,
• 18:20
  Speaker 4: it's their fault they oversold me. Not really, they're not
• 18:24
  Speaker 4: financial advisors. Their job is not to know all of
• 18:27
  Speaker 4: those details. Their job is just to tell you about
• 18:29
  Speaker 4: the risk and then try.
• 18:29
  Speaker 2: To ensure you appropriately.
• 18:31
  Speaker 4: So really you need to know, or your financial advisor
• 18:34
  Speaker 4: needs to know, and then you need to get into
• 18:36
  Speaker 4: the detail. So again, understand what long term care covers
• 18:41
  Speaker 4: what it doesn't cover, because different policies can cover different things. Also,
• 18:46
  Speaker 4: know your payment options. So most health and disability insurance
• 18:50
  Speaker 4: policies do not cover long term care. Medicare provides limited
• 18:54
  Speaker 4: coverage for long term care, and Medicaid will cover costs
• 18:58
  Speaker 4: of long term care only after most of your personal
• 19:01
  Speaker 4: assets are depleted. So know your options and that you
• 19:05
  Speaker 4: can't really say to me, oh, don't worry, I've got
• 19:07
  Speaker 4: disability insurance that'll cover it, or don't worry, I've got
• 19:09
  Speaker 4: Medicare that'll cover it, or I heard Medicaid will kick in. Listen,
• 19:13
  Speaker 4: these are like half truths, not even that, they're.
• 19:16
  Speaker 2: Like quarter truths.
• 19:17
  Speaker 4: You really need to become educated on what options are
• 19:21
  Speaker 4: available to you. And we'll just know that this is
• 19:23
  Speaker 4: not a This is not a concept for Eric or myself.
• 19:28
  Speaker 4: We live this every day, all day. The average age
• 19:31
  Speaker 4: of our client is sixty seven years old. We are
• 19:33
  Speaker 4: retirement planners. We know, both academically and through experience, what
• 19:41
  Speaker 4: risk long term care poses to certain estates. And Eric
• 19:45
  Speaker 4: can attest probably the number one risk to you and
• 19:48
  Speaker 4: your household of running out of money is living too
• 19:52
  Speaker 4: long with poor health. Now does that mean you should
• 19:56
  Speaker 4: get long term care insurance? No, that's not what I'm saying.
• 19:58
  Speaker 4: It means you need to know the number one risk
• 20:00
  Speaker 4: of running out of money, right, and it is living
• 20:03
  Speaker 4: too long with poor health. So you could set money
• 20:06
  Speaker 4: aside earmarked for long term care. You could buy a
• 20:08
  Speaker 4: long term care insurance policy, you could buy a life
• 20:11
  Speaker 4: insurance policy with a long term care writer. Or you
• 20:14
  Speaker 4: could just say screw it, if I run out of money,
• 20:16
  Speaker 4: and they put me in a medicaid facility. I don't mind.
• 20:19
  Speaker 4: We don't care how you address it. We just care
• 20:22
  Speaker 4: that you address it. So so a lot of things
• 20:24
  Speaker 4: that consider there. But again, talk to your financial advisor
• 20:27
  Speaker 4: and consider what's best for.
• 20:29
  Speaker 1: You a lot of very important stuff this morning, as always,
• 20:31
  Speaker 1: so we talk with CJ. Closs and Eric Schwartz. They
• 20:33
  Speaker 1: are our retirement planning professionals from COSS Financial. The website
• 20:36
  Speaker 1: class financial dot com. That's Coss Klaas financial dot com.
• 20:41
  Speaker 1: They're tell for number six oh eight four four two
• 20:43
  Speaker 1: five six three seven, no charge for that initial get
• 20:45
  Speaker 1: to know your appointment at costs financial. It will be
• 20:47
  Speaker 1: complimentary to you. Again their number six oh eight four
• 20:50
  Speaker 1: four two five six three seven, probably saying well, what
• 20:53
  Speaker 1: about things like homeowners insurance some other areas haven't touched
• 20:57
  Speaker 1: on that yet, Oh we will. We'll do that next
• 20:59
  Speaker 1: as Money in Motion and with Class Financial continues right
• 21:01
  Speaker 1: here on thirteen ten WIBA and we're talking with our
• 21:04
  Speaker 1: retirement planning professionals from Class Financial, CJ. Closs and Eric Schwartz.
• 21:07
  Speaker 1: Their website Colss financial dot com. That's Clause Klaas financial
• 21:12
  Speaker 1: dot com. You can learn more about Class Financial. There's
• 21:14
  Speaker 1: separate divisions. You can also listen back to this in
• 21:17
  Speaker 1: previous shows. Podcasts. Also cool feature that weekly Market Pulse newsletter.
• 21:21
  Speaker 1: You can sign up right online at classfinancial dot com.
• 21:24
  Speaker 1: They're telephon number six so eight four four two five
• 21:26
  Speaker 1: six three seven. No charge for that initially gets no
• 21:28
  Speaker 1: appoyment at Laws Financial. It will be complimentary to you
• 21:31
  Speaker 1: again their number six O eight four four two five
• 21:33
  Speaker 1: six three seven. Talking insurance this week and homeowners insurance
• 21:38
  Speaker 1: is something that I think we all obviously we've got
• 21:41
  Speaker 1: a home, you're gonna probably carry something like that. Also
• 21:43
  Speaker 1: other property related coverages. What are some of the the
• 21:46
  Speaker 1: uh considerations folks should be making eric when it comes
• 21:50
  Speaker 1: to homeowners insurance and other type of proper property related coverages.
• 21:55
  Speaker 1: Easier said than spelled out.
• 21:59
  Speaker 3: Yeah, Proper property and casualty insurance is another one of
• 22:02
  Speaker 3: those things, not unlike life insurance that sort of gets
• 22:05
  Speaker 3: put on the back burner, right. You get it put
• 22:07
  Speaker 3: in place and then renews every year, and you get
• 22:10
  Speaker 3: a letter now and then, and you hope you don't
• 22:12
  Speaker 3: have to use it. But in probably I would say
• 22:15
  Speaker 3: the last three to four years, it has come to
• 22:17
  Speaker 3: the surface a lot more because I'm sure listeners will
• 22:21
  Speaker 3: probably have this experience as well, opening that renewal letter
• 22:25
  Speaker 3: and saying, who's house or whose car are we insuring here?
• 22:29
  Speaker 3: Because it's certainly not mine. Mine isn't worth that much.
• 22:31
  Speaker 3: But insurance property and casualty insurance premiums have increased quite
• 22:37
  Speaker 3: a bit in the last Like I said, three to
• 22:40
  Speaker 3: four years, rates have risen significantly due to inflation and
• 22:45
  Speaker 3: climate related risks and increased catastrophic weather events. So we
• 22:52
  Speaker 3: want to make sure that we're checking in on this,
• 22:54
  Speaker 3: And I mean we're talking about this sort of as
• 22:56
  Speaker 3: a as it relates to retirees. But waiting your coverage
• 23:00
  Speaker 3: on a regular basis is a great idea. It can
• 23:03
  Speaker 3: save you money in the long run. It is a
• 23:05
  Speaker 3: little bit of legwork, but it is it is worth it.
• 23:09
  Speaker 3: So make sure that in the case of your home,
• 23:12
  Speaker 3: you are insured for the replacement cost of your property
• 23:17
  Speaker 3: rather than rather than just you know what what your
• 23:22
  Speaker 3: house would sell for. Right now, we are more looking
• 23:24
  Speaker 3: for what would it cost to rebuild your home if
• 23:27
  Speaker 3: you had a disaster. Check for something like well. Check
• 23:31
  Speaker 3: for discounts in general, but retiree discounts are available in
• 23:34
  Speaker 3: some cases, some insurers offer them, you know, due to
• 23:38
  Speaker 3: lower risk factors at times. So you know, not only
• 23:42
  Speaker 3: can you get can you get ten percent off of culvers,
• 23:44
  Speaker 3: but you might be able to get a discount on
• 23:46
  Speaker 3: your insurance as well. For for retirees specifically, we will
• 23:52
  Speaker 3: sometimes get people saying, well, you know, I don't I
• 23:54
  Speaker 3: don't have a mortgage on my house, so I don't
• 23:57
  Speaker 3: really need to have insurance on it. I can I
• 23:59
  Speaker 3: can self ensure. You can certainly do that. I'm going
• 24:04
  Speaker 3: to strongly encourage people in most cases, I say most
• 24:08
  Speaker 3: cases not to self ensure. Your home is often one
• 24:12
  Speaker 3: of your largest, if not your largest assets, and to
• 24:16
  Speaker 3: be to have some insurance to protect it makes makes
• 24:20
  Speaker 3: great sense. Now there are situations where where it may
• 24:25
  Speaker 3: may not make sense, depending on where you live and
• 24:28
  Speaker 3: weather and cost of insurance, but for most folks listening here,
• 24:33
  Speaker 3: I strongly encourage you not to not to self insure
• 24:36
  Speaker 3: your home. Moving on to auto insurance, that's another part
• 24:40
  Speaker 3: of property and casualty coverage. This is another place we
• 24:43
  Speaker 3: want to check for discounts, not only for retirees, but
• 24:46
  Speaker 3: you know, for bundling insurance and especially in the case
• 24:51
  Speaker 3: of retirees with reduced driving, you'll often see lower rates.
• 24:57
  Speaker 3: So this is an area where it makes sense to
• 24:58
  Speaker 3: shop around and try to get try to get a
• 25:02
  Speaker 3: better rate, you can do things like taking a defensive
• 25:05
  Speaker 3: driving course. These are offered by like AARP and TRIPLEA,
• 25:09
  Speaker 3: and insurance companies will sometimes give you a break on
• 25:12
  Speaker 3: your premiums for that. If your car is over ten
• 25:15
  Speaker 3: years old, you may want to evaluate whether it makes
• 25:18
  Speaker 3: sense to have comprehensive coverage on the car anymore. And finally,
• 25:23
  Speaker 3: downsizing to one car could save uninsurance and maintenance costs.
• 25:27
  Speaker 3: So we see this with couples as they move further
• 25:30
  Speaker 3: through retirement, I find they're not driving as much or
• 25:33
  Speaker 3: going places as much.
• 25:34
  Speaker 2: They they'll go down to one car.
• 25:38
  Speaker 3: The last part I want to talk about as it
• 25:40
  Speaker 3: relates to property and casualty insurance is umbrella insurance. I
• 25:44
  Speaker 3: would CG you may agree with me on this. I
• 25:46
  Speaker 3: would say this is in many cases one of the
• 25:51
  Speaker 3: one of the big risks we see that people face
• 25:56
  Speaker 3: because they don't have umbrella insurance and they don't know
• 25:58
  Speaker 3: that they should. Okay, So umbrella insurance is essentially liability coverage.
• 26:04
  Speaker 3: So the name umbrella is think of an umbrella kind
• 26:07
  Speaker 3: of going over the top of you and stopping water
• 26:10
  Speaker 3: from hitting you. This is sort of putting an umbrella
• 26:13
  Speaker 3: over you from a liability risk standpoint. For the for
• 26:17
  Speaker 3: the cost of coverage. I know we've been talking a
• 26:20
  Speaker 3: lot about, you know, reducing premiums and and now I'm saying, hey,
• 26:24
  Speaker 3: if you don't have umbrella insurance, you should add that.
• 26:27
  Speaker 3: The fact of the matter is for the risk of
• 26:29
  Speaker 3: liability that you have and the cost of umbrella coverage.
• 26:34
  Speaker 3: It's it's a very it's a very prudent financial decision
• 26:39
  Speaker 3: to make sure that you're protecting yourself from the risk
• 26:42
  Speaker 3: of liability. So my final thoughts here is if you're
• 26:46
  Speaker 3: evaluating and adjusting your insurance policies before retirement, that can
• 26:50
  Speaker 3: have a significant impact on your financial security. So work
• 26:54
  Speaker 3: with a professional and make sure that you're making informed
• 26:58
  Speaker 3: choices around these time.
• 27:00
  Speaker 1: Thanks really great to conversation this week about insurance. Don't
• 27:03
  Speaker 1: forget missed any part of the program. Head on over
• 27:05
  Speaker 1: to classfinancial dot com. That's coss klaasfinancial dot com. Also,
• 27:09
  Speaker 1: while you're there, you get an opportunity maybe submit a
• 27:11
  Speaker 1: question for our Money in Motion listener question corner. As
• 27:14
  Speaker 1: a matter of fact, Daniel took the time to write in.
• 27:15
  Speaker 1: He says, I'm sixty sixty years old, married with a
• 27:19
  Speaker 1: household income of over a three hundred and seventy five
• 27:22
  Speaker 1: thousand dollars per year. As I contribute to my four
• 27:24
  Speaker 1: oh one K? Should I be putting money into a
• 27:27
  Speaker 1: wrath or a traditional four oh one K? Which option
• 27:30
  Speaker 1: makes the most sense for my situation given that I
• 27:34
  Speaker 1: plan to work five more years. CJ, We'll put this
• 27:37
  Speaker 1: one on you.
• 27:39
  Speaker 2: Yeah.
• 27:39
  Speaker 4: Well, first off, Daniel, thanks thanks for submitting the question,
• 27:42
  Speaker 4: and as Sean said, anybody who's listening can do the
• 27:45
  Speaker 4: same thing on our website or certainly call into the
• 27:47
  Speaker 4: show and we can submit questions like this either live
• 27:49
  Speaker 4: on the air or after the show. Number two Daniel
• 27:53
  Speaker 4: high income earner. So congratulations there, You and your household
• 27:56
  Speaker 4: are certainly in higher income category earning three hundred and
• 27:59
  Speaker 4: seventy five thousand dollars a year. But your question is
• 28:01
  Speaker 4: a good one. Should I do ROTH or traditional? As
• 28:03
  Speaker 4: a reminder to our listeners, traditional four to one K
• 28:06
  Speaker 4: contributions or what are called pre tax or deductible contributions
• 28:10
  Speaker 4: from your income, They come off of the top of
• 28:13
  Speaker 4: your income, whereas ROTH contributions are post tax contributions that
• 28:17
  Speaker 4: grow tax free, but they do not reduce your taxable
• 28:21
  Speaker 4: income today. So the answer to your question is pretty intuitive, Daniel.
• 28:28
  Speaker 4: It's because your income is so high, which you know,
• 28:32
  Speaker 4: looking at twenty twenty five marginal income tax brackets, you
• 28:35
  Speaker 4: would be in the twenty four percent marginal income tax
• 28:38
  Speaker 4: Under most circumstances, we are going to suggest that you
• 28:41
  Speaker 4: should do pre tax. There certainly can be exceptions to that.
• 28:44
  Speaker 4: But if you can save today at the twenty four
• 28:47
  Speaker 4: percent marginal bracket, because again at three seventy five, taxes
• 28:50
  Speaker 4: in the United States are marginal, you're paying twenty four
• 28:52
  Speaker 4: percent on those dollars that could go into the four
• 28:55
  Speaker 4: to one K plan. If we can save that twenty
• 28:58
  Speaker 4: four percent today, not only do we get the compound
• 29:00
  Speaker 4: growth over the next five years before you retire, but additionally,
• 29:04
  Speaker 4: when you go to pull it out in retirement, even
• 29:06
  Speaker 4: if you needed one hundred and fifty thousand dollars a
• 29:09
  Speaker 4: year to live off of, that's going to be at
• 29:11
  Speaker 4: a lower marginal bracket than the twenty four percent. So
• 29:15
  Speaker 4: you get the idea save the twenty four get all
• 29:18
  Speaker 4: of the compound tax tax or TAXA for growth, then
• 29:23
  Speaker 4: pull it out into the future at a lower rate.
• 29:25
  Speaker 4: That's kind of a win win win. Again, there can
• 29:27
  Speaker 4: be exceptions to this, Daniel, but generally speaking we would
• 29:30
  Speaker 4: suggest pre tax.
• 29:31
  Speaker 2: So thank you for submitting the question.
• 29:34
  Speaker 1: Great question, Daniel, and again you two can be like Daniel.
• 29:36
  Speaker 1: You can of course email it in through Cossfinancial dot
• 29:39
  Speaker 1: com or give them a call at the office six
• 29:41
  Speaker 1: oh eight four four two five six three seven. Speaking
• 29:43
  Speaker 1: of that number, don't forget no charge for that initial
• 29:46
  Speaker 1: get to know your appointment tech costs Financial. It will
• 29:48
  Speaker 1: be complimentary to you again their number six oh eight
• 29:50
  Speaker 1: four four two five six three seven. You're also going
• 29:53
  Speaker 1: on hold on to that telephone number because it's time
• 29:55
  Speaker 1: now for the COSS Quiz question of the week. Whorks
• 29:57
  Speaker 1: like this. In just a moment, I'll ask you the
• 29:59
  Speaker 1: class quiz question. You will then have thirty minutes from
• 30:01
  Speaker 1: the in today's program to call the Class Financial office
• 30:03
  Speaker 1: right here in Madison and again that number six oh
• 30:06
  Speaker 1: eight four four two five six three seven. First call
• 30:09
  Speaker 1: with correct answer win this week's prize, which is a
• 30:11
  Speaker 1: twenty five dollars gift card to Starbucks. This week's class
• 30:15
  Speaker 1: quiz question Leek, is this true or false? As you
• 30:18
  Speaker 1: plan for retirement, you should review your beneficiaries on your
• 30:22
  Speaker 1: life insurance policies. Is that true or is that false?
• 30:26
  Speaker 1: Telephone number six oh eight four four two five, six
• 30:28
  Speaker 1: three seven first call. Correct answer in the twenty five
• 30:31
  Speaker 1: dollars gift card Starbucks Again, that's Loss Financials Office right
• 30:34
  Speaker 1: here in Madison. That number six oh eight four four
• 30:37
  Speaker 1: two five six three seven CJ Eric. Always great chatting
• 30:40
  Speaker 1: with both of you guys. Have a great day.
• 30:42
  Speaker 2: Thanks Sean.
• 30:42
  Speaker 1: Thanks Sean, Doctor Greaz next year. On thirteen ten, WIBA