Cortburg Speaks Retirement

Healthcare costs before Retirement

October 14, 2020 Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® Season 2020 Episode 5
Cortburg Speaks Retirement
Healthcare costs before Retirement
Chapters
0:00
Introduction
0:53
Weekly Educational Update
3:12
Week on Wall Street
6:50
Weekly Tax Tip
8:42
Healthy Lifestyle Advice
10:16
Green Living Idea
11:16
Quote of the Week
11:33
Conclusion
Cortburg Speaks Retirement
Healthcare costs before Retirement
Oct 14, 2020 Season 2020 Episode 5
Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1.Educational Update = Healthcare costs are cutting into retirement preparations
 
2.
Week on Wall Street

3.Tax Tip = 4 Facts About Capital Gains

 4.Healthy Lifestyle Advice = Eating To Your Heart’s Content

5.Green Living Idea = Upgrading to an Eco-Friendly Fridge

6. Quote of the Week

Show Notes Transcript Chapter Markers

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1.Educational Update = Healthcare costs are cutting into retirement preparations
 
2.
Week on Wall Street

3.Tax Tip = 4 Facts About Capital Gains

 4.Healthy Lifestyle Advice = Eating To Your Heart’s Content

5.Green Living Idea = Upgrading to an Eco-Friendly Fridge

6. Quote of the Week

INTRODUCTION

Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 

HOST

Hello and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   On this episode, I am going to help you understand your healthcare costs, review last week on Wall Street, and Review Capital Gains tax.  In addition, I will provide you with some helpful tips on keeping your heart healthy and upgrading to an eco-friendly fridge. 


 1st – weekly educational update
Health Care Costs Are Cutting into Retirement Preparations

You may have seen this statistic before or one resembling it: the average 65-year-old retiring couple can now expect to pay more than $250,000 in health care expenses during the rest of their lives.

In fact, Fidelity Investments now projects this cost at $285,000. The effort to prepare for these potential expenses is changing the big picture of retirement strategy.[i]

Individual retirement savings strategies have been altered. How many people retire with a dedicated account or lump sum meant to address future health costs? Probably very few. Many retirees end up winging it, paying their out-of-pocket costs from their incomes, Social Security benefits, and savings.

While couples can save together, individuals also have considerable health care costs as well. Fidelity estimates the costs as $150,000 for women and $135,000 for men. The costs can potentially take up a considerable amount of a retiree’s income – 9% to 14%, according to Fidelity. Per year, out-of-pocket costs, including dental and vision, could run from $3,000 to $8,000 during an average year.[ii]

While households have begun adjusting their retirement expectations, considering their projected health care expenses, businesses have also quietly made some changes. If you can take advantage of employer matching contributions to your workplace retirement account, take advantage of that benefit.

There is no easy answer for retirees preparing to address future health care costs. Staying active and fit may lead to health care savings over the long run, but some baby boomers and Gen Xers already have physical ailments. Barring some sort of unusual economic phenomenon or public policy shift, the question of how to pay for hundreds of thousands of dollars of medical and drug expenses after 65 will confound many of us.

 

2nd – Week on Wall Street

Stocks Rise, Stimulus Uncertain

Stocks staged a powerful rally last week, riding a wave of optimism over the prospect of the passage of a new fiscal stimulus bill.

The Dow Jones Industrial Average rose 3.27%, while the Standard & Poor’s 500 increased 3.84%. The Nasdaq Composite index gained 4.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, advanced 2.23%.[iii],[iv],[v]

Stimulus Stalemate?

The anticipation of lawmakers passing a new round of economic stimulus was a decisive driver of market action all week.

A mid-week tweet by President Trump announcing that he was ending stimulus negotiations sent stocks lower. Losses were exacerbated by sharp declines in some mega-cap technology companies as details emerged from a House Judiciary subcommittee report on its investigation into their competitive practices.[vi]

Stocks quickly reversed direction, climbing after the President tweeted that he would sign a limited stimulus bill, but lawmakers appeared to reject a piecemeal approach.

Stocks consolidated on Friday, helped by continuing stimulus talks and new election polls that suggested that the risk of a contested outcome appeared to be fading.

Small Cap Rally

The outperformance of large cap stocks relative to small cap stocks has been both wide and persistent during the last ten years. Last week’s action in small cap stocks, as represented by the Russell 2000 Index, indicates that smaller companies may finally be making up some ground.[vii]

Last week, the Russell 2000 Index rose 6.33%, outperforming the S&P 500 by 2.4%.[viii]

While this outperformance may be fleeting, a potential broadening of the stock market rally may be considered a healthy development.

Final Thoughts

This week begins the third-quarter earnings season, with companies from a variety of industry sectors reporting (see below). Early earnings reports start predominantly with the major banks, whose earnings results may provide insight into the general health of American consumers.

As is often the case, company guidance about the future earnings may be of greater interest to investors than past results. 


THIS WEEK: KEY ECONOMIC DATA

Tuesday: Consumer Price Index (CPI).

Thursday: Jobless Claims. 

Friday: Industrial Production. Consumer Sentiment. 

Source: Econoday, October 9, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.


THIS WEEK: COMPANIES REPORTING EARNINGS

Tuesday: Johnson & Johnson (JNJ), J.P. Morgan Chase (JPM), Citigroup (C), Blackrock (BLK)

Wednesday: Bank of America (BAC), UnitedHealth Group (UNH)

Thursday: Morgan Stanley (MS)

Friday: Schlumberger (SLB), J.B. Hunt Transport Services (JBHT), Kansas City Southern (KSU), V.F. Corporation (VFC)

Source: Zacks, October 9, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

 


 3rd – weekly tax tip
4 Facts About Capital Gains

When you sell a capital asset like an investment or a piece of property, the sale can result in a capital gain or loss. The IRS defines a capital asset as “most property you own for personal use or own as an investment.” Here are four facts you should know about capital gains:

1.    A capital gain or loss is the difference between what you originally paid for the asset (your basis) and the amount you get when you sell an asset.

2.    You must include all capital gains in your income, and you may be subject to the Net Investment Income Tax if your income is above certain amounts. Consult a qualified tax expert for help.

3.    The IRS allows you to deduct capital losses on the sale of investment property. You cannot deduct losses on the sale of property that you hold for personal use.

4.    If your total net capital loss is more than the limit you can deduct, you can carry it over to next year’s tax return.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[ix]

 

4th – healthy lifestyle advice
Eating To Your Heart’s Content

Deciding to change your diet can feel daunting. It can be difficult to figure out which one is “best” for you. Many fad diets come and go, but there are a few that have stuck around, the most popular being the Mediterranean diet. 

The Mediterranean diet is less of a traditional diet and more of a lifestyle shift toward healthier eating patterns. It’s modeled after principles of Italian and Greek cuisine, which have remained relatively unchanged since the 1960s. Consuming this diet has been correlated with lower rates of heart disease, type 2 diabetes, and other chronic illnesses. The diet emphasizes eating more fruits, vegetables, legumes, nuts, seeds, fatty fish, whole grains, and olive oil and fewer meats and dairy products. The diet is flexible. Elimination isn’t the intention, rather balance more toward nutrient-rich foods versus energy-dense ones. 

Food is life, and making healthy choices can help support a healthier life. While the Mediterranean diet could be a good option for someone, no single diet will fit everyone’s lifestyle, preferences, and health needs perfectly. So, be sure to discuss any dietary choices you make with your physician or registered dietitian first. 

Tip adapted from Healthline.com[x]

 

5th – Green Living Idea
Upgrading to an Eco-Friendly Fridge

Is your refrigerator running? If it’s more than 10 years old, it may be time to upgrade with a more eco-friendly model. Besides saving money on your electric bill, you’ll be reducing your carbon footprint at the same time.

The most efficient models, according to Energy Star, are refrigerators with freezers located on the top. It doesn’t seem like a small change, but models with freezers on the bottom use an average of 560kWh compared to 360kWh.

The other big energy saver is to buy a model with LED lights. LED lights are roughly 80% more efficient than traditional light bulbs, which will reduce your energy consumption even further.

Tip adapted from Green Living Ideas[xi]

 

6th – quote of the week

“Act as if what you do makes a difference. It does.”

– William James


 

Make sure to visit our website, www.CortburgRetirement.com.  Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Retirement Specialist and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational update.  

 

DISCLOSURES  

Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.


[i] https://www.fool.com/investing/2019/12/07/these-5-factors-will-tell-you-how-much-you-really.aspx
[ii] https://www.plansponsor.com/estimates-health-care-costs-retirement-continue-rise/
[iii] The Wall Street Journal, October 9, 2020
[iv] The Wall Street Journal, October 9, 2020
[v] The Wall Street Journal, October 9, 2020
[vi] CNBC.com, October 6, 2020
[vii] The Wall Street Journal, October 8, 2020
[viii] The Wall Street Journal, October 9, 2020
[ix] https://www.irs.gov/taxtopics/tc409
[x] https://www.healthline.com/nutrition/mediterranean-diet-meal-plan
[xi] https://greenlivingideas.com/2019/10/14/buying-a-new-refrigerator-heres-how-to-get-an-eco-friendly-one-to-save-money-and-pollution/ 

Introduction
Weekly Educational Update
Week on Wall Street
Weekly Tax Tip
Healthy Lifestyle Advice
Green Living Idea
Quote of the Week
Conclusion