Let’s talk about Medicare


Medicare is a federal health insurance program for people who are 65 or older and certain younger people with disabilities.  Today, there are 57 million beneficiaries. 18% or almost one out of every five people in our country is on Medicare. By 2030 those will be at last 80 million people on Medicare or close to one out of every four Americans. Pretty soon the whole country will look like Florida!   Please remember that 70% of the Baby Boomers retire between 2022 and 2029.

The unfunded liability for Social Security is around $15 trillion. The unfunded liability for Medicare is around $100 trillion. Medicare is predicted to go bankrupt in 2029. If we have an economic downturn that date could move up to less than a decade from now. 

This problem of Medicare is amplified by life expectancy. When Medicare was enacted in 1965, the actuarial life expectancy of an American was 70 years old. For men reaching age 65, that life expectancy is now age 86 and for women reaching age 65 their life expectancy is age 88. The program was not designed for people to live that long. The entitlement of having access to quality health care for Americans over age 65 has created an economic disaster that no one in government seems to want to take on.

 Current statistics estimate that current retirees will face $400,000 to $600,000 in healthcare cost during their retirements. That will essentially consume all of their social security checks to pay for healthcare costs.   If 100% of your social security check is used for health care, what will people use for food, clothing and shelter? 

 As of today, only 10% of Americans have over $110,000 in assets.  ONLY 10%!  What will the other 90% of Americas do?  Do you think our politicians will let them starve, live on the streets, or deny access to health care?  How will our government pay for this? 

 The amount of money necessary to deal with all these issues is astonishing.   Remember, our government does not make money…they TAX to get money.  When the government needs more money to fund programs like Social Security, Medicare, Medicaid, Obama Care, Homeland Security, Defense, Interest on the debt, natural disasters, ect…will they get the money from the 90% of people who don’t have any money or the 10% that do? 

Planning is the key to success.  Understanding the future of our country should motivate you to take action today to protect your wealth in the future.  The best time to plant a tree was 20 years ago, the next best time is today!

 Today’s lesson – Health care in retirement will eat up an exorbitant amount of retirement assets even with Medicare as a supplement.    And, in Medicare’s current form, it is unsustainable.      


Social Security – how secure is it?

This month, the Trustees for Social Security and Medicare just released their annual report.  It was five months late.  The data is dismal.

 Social Security was established by President Franklin D. Roosevelt’s new deal plan in 1935.    It was created to provide a supplemental security income for the elderly or disabled people.  The program is funded through payroll taxes and is predominately a pay as you go program. 

 According to the trustee report, 171 million Americans paid $869 billion on Social Security taxes in 2016. The recipients received $922 billion in benefits or $53 billion more than was collected in taxes. Next year the trustees are reporting that they believe there will be a $60 billion shortfall. 

 Another way to look at social security:  there are less than three people paying for social security for every one person receiving social security benefits. The US Bureau of Labor Statistics says the fastest growing demographic in our country by 2024 will be people over age 65. We will have between 80 million and 100 million recipients by 2030. By 2030 we will have TWO taxpayers paying for every ONE recipient of benefits.

 Do you think this program is sustainable?  How can our government continue to spend more money than it brings in?

 Currently, the unfunded liability for Social Security is around $15 trillion.  Unfunded liabilities are the promises we have already made to Americas.  We need $15 trillion to just support the current recipients of Social Security.  This does not include the 10,000 baby boomers retiring everyday for the next 15 years. 

 The social security problem is further compromised by life expectancy.  In the trustee summary (page 4), the government admits to using age 75 as life expectancy for its social security calculations.  This is a total farce!  Today’s life expectancy statistics are significantly higher. A man that reaches the age of 65 has a life expectancy of age 86 and a women reaching age 65 can expect to life until age 88.  For every year of additional life expectancy, trillions in unfunded liabilities are added to the total.

 For the summary or full report, please Google “Social Security and Medicare Trustees Report 2017”. The top entry will be the Trustees Report Summary. That’s what you want. It summarizes the full 269 page report and does so in 25 pages. This is official as it comes right from the government and the trustees for those two programs.

 Early education is the key to financial success.  My goal is motivate you into action.  Now is the time to plan your financial future so you will be in-control of your financial future, not the government!

 Today’s lesson – Social Security is unsustainable in its current form.  This will not be the government program that gets you through retirement.    


Entitlements…Are you entitled to them?

The definition of entitlement is: “having a right to something”.  It also states: “a government program that provides benefits to any individual meeting certain eligibility requirements”.   In America, our entitlement programs include: Social Security, Medicare, Medicaid, The Affordable Care Act (Obama Care) and a few others. 

 This month, the Trustees for Social Security and Medicare just released their annual report.  It was five months late.  The data is so dismal that they pushed the information back to a time when many Americans are busy with vacations and returning back to school. 

 For the summary or full report, please Google “Social Security and Medicare Trustees Report 2017”. The top entry will be the Trustees Report Summary. That’s what you want. It summarizes the full 269 page report and does so in 25 pages. This is official as it comes right from the government and the trustees for those two programs.

 Are Americans really “Entitled” to these programs?  According to the constitution…NO! 

 The constitution prevents the government from infringing on individuals rights. The Constitution does not grant rights. The Declaration of Independence said individuals were endowed with certain unalienable rights which include: Life, Liberty and the pursuit of happiness. Rights are not given in the constitution. The Constitution is written to prevent infringement of individual rights by government.  This is backed up by the 1937 Supreme Court Ruling on Helvering vs. Davis.

Our Supreme Court ruled that Social Security isn’t a contributory insurance program. Both the employers and employees Social Security taxes will be paid to the US Treasury like any other revenue (tax) and WILL NOT BE EARMARKED IN ANY WAY.  It is completely legal for our politicians to use social security taxes in any way they choose.  

 Entitlements are really a promise that politicians and governments make to their constituents.  The law, ruled upon by the Supreme Court, backs this up.  Do you trust your politicians and government to keep their promises to provide these benefits?

 Over the next several blogs, I will discuss each program in detail so you can understand the financial health of each program and its sustainability.   As always, my goal is to educate you on the facts so you can make the best financial decisions for your future.    

 Today’s lesson…By law, you are not entitled to any government programs.  It’s at the government’s discretion to determine what you are “entitled to”. 


What is the key to Success? GRIT!

In Angela Duckworth’s book, “Grit” she talks about the predictors of success.  Surprisingly, it is not intelligence or IQ.  The key predictor of success is “Grit”.  She defines Grit as passion and persistence for long term goals.  Grit is having stamina, sticking to your future, day in and day out, for years at a time.  It is working really hard to make your dreams a reality.  Grit is a marathon not a sprint.

As we prepare to send our kids off to college, remind them that their success is not based on how smart they are but how much grit they have. There is no substitute for hard work.    

I found her 6 minute Ted Talk very empowering.  Enjoy! https://www.ted.com/talks/angela_lee_duckworth_grit_the_power_of_passion_and_perseverance/transcript#t-131591

Parents are getting crushed by their student’s college debt…

According to the WSJ article April 24, 2017; “The U.S. Makes It Easy for Parents to Get College Loans—Repaying Them Is another Story”

Millions of parents have taken out loans from the government to help their kids pay for college. The problem is now they aren’t paying them.  Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses, and lost portions of Social Security checks and tax refunds to their lender, the federal government.

As of September 2015, more than 330,000 people, or 11% of parents, had gone at least a year without making a payment on a Parent Plus loan.  That exceeds the default rate on U.S. mortgages at the peak of the housing crisis.

These are tragic stories that I hear over and over again.  College is expensive and you must plan early for this expense.   A public school, four year college, cost $100,000 today and is inflating at 5% each year. 

College is expensive and the earlier parents plan for this expense, the more successful they will be.  I teach alternative strategies to families on how to save and pay for college so parents don’t sacrifice their retirement.  Don’t fall into this horrible trap and sacrifice your future for your kids.  Plan today and I can help!

13 Things you need to give up if you want to be successful


Thank you Mr. Cvijetic!  So many articles about what we have to add…this one speaks to just giving up a few.  My personal favorites:

#4. Give up your excuses – I have met so many amazing people on my journey and not one is without hardship.  Let’s face it, life is difficult.  We will all face challenges.  No one gets through life unscathed.  So… get up, take responsibility, and make things happen.  You are accountable for your future and choices matter. 

#6.  There is no magic bullet – There is no substitute for hard work.  Trust me, I have tried short cuts but at the end of the day, hard work and perseverance are what makes success…nothing else. 

#9.  Give up your need to Control – If only I could have learned this earlier, I am confident my hair would not be so gray!   Focus on what you can control and in this life, it is only you.  You can only control you; your thoughts, behaviors, and actions.  Make them all count.

Life is short and I don’t want to meet anonymous definition of hell.  I want to become who I was called to be. 

Strategy or product…what’s more important?

I was in a meeting yesterday with a new prospect and she asked me “Are you a whole life insurance person”?  As many of you know, I do like whole life to solve various financial problems but the question struck me as interesting.  Whole life is just a product.  It is a financial tool with different benefits.  Whole life is no different than a stock, bond, real estate, mutual fund etc.  All of these products are tools with different financial benefits.  When executing a proper financial plan, financial products are used to implement a strategy.    The strategy comes first, than the products...

Unfortunately, people are so focused on the product that they miss the strategy/skill. how all the products work together to obtain the goal.   Investing more money in the market is a strategy but to what end?  So now you have $2 million dollars in your 401k, invested in the stock market, and your 65:

  • How do you get the money out?

  • How much money can you take out and not fear running out of money?

  • How much do you need to take out to pay your bills?

  • What are your taxes; how much of your money to you get to keep?

Now we are beginning to talk strategy.  If I can maximize your income in retirement, give you more money with benefits, and reduce your tax, do you care what products we use to implement the strategy? 

Strategy/skill is far more important than the products.  Just ask a professional golfer if their success is due to the type of golf clubs he/she plays with or is it their strategy/skill?  The answer is very clear and it’s no different in your financial life! 

How much tax do i pay?

Do you feel you pay to much tax?  Well, you do!  It is estimated that 40% of our income goes to taxes.  Remember, you pay far more than just state and federal taxes which are due today.  See below for the ABC’s of tax:

Accounts Receivable Tax

Breathing Tax

Building Permit Tax

Commercial Drivers License Tax

Cigarette Tax

Dog License Tax


Federal Income Tax

Federal Unemployment Tax

Fishing License Tax

Food License Tax

Fuel Permit Tax

Gasoline Tax

Hunting License Tax

Inheritance Tax

Inventory Tax

IRS Interest Charges

IRS Penalties



Liquor Tax

Luxury Tax

Marriage License Tax

Medicare Tax



Property Tax


Real Estate Tax

Recreational Vehicle Tax

Road Usage Tax

School Tax

Service charge taxes

Social Security Tax

Sales Taxes

State Income Tax

State Unemployment Tax

Telephone Federal Excise Tax

Telephone Federal Universal Service Fee Tax

Telephone Fed/State/Local Surcharge Tax

Telephone Min. Usage Surcharge Tax

Telephone Recurring and Nonrecurring Charges Tax

Telephone Usage Charge Tax

Utility Tax

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft Registration Tax

Well Permit Tax

Workers Compensation Tax




Would you like a few financial strategies to minimize your tax?  I can help!  Good luck today…

Bank (In)Security: Banks are not as Safe as You Think

 “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would a revolution before tomorrow morning.” 

 - Henry Ford

 We’ve all heard the expression, “It's like money in the bank!” What could be safer or more reliable than one of our long-standing financial institutions?

Ironically, in recent years, it's becoming clear that banks aren't the safe havens for our dollars that we imagine.


FDIC Insurance and the Illusion of Protection

 When the value of houses and stocks went into freefall in 2008, a few people began to become concerned about their bank savings. The FDIC, which insures bank accounts, was quick to give extra assurances. FDIC insurance limits on savings accounts were increased from $100k to $250k and Suze Orman was hired as a spokesperson for public service announcements. The public breathed a little easier, and banking went on as before.

In 2009, the FDIC also put out a pamphlet called, somewhat grandiosely, “No Safer Place in the World For Your Money.” The brochure bragged that, if necessary, they could access a $100 billion line of credit from directly from the US Treasury that “under federal law, can be expanded to $500 billion.”

Very impressive indeed, until you consider that the total deposits in US banks is about $5.37 trillion. This pencils out to a guarantee of about two cents on every dollar deposited, unless they raided the Treasury coffers. (And re-appropriating the defense fund budget or the social security trust fund would hardly be a solution.) Other analysts have estimated the reserves to be even less than 2% of deposits.

This highlights a common misconception about FDIC insurance, and banking in general, that your money is somehow "backed" be real-world assets. That is simply not the case. To understand how this really works, let’s take a look at the concept of Fractional Reserve Banking.

Fractional banking is a system where only a small percentage of bank deposits are covered by cash-on-hand. The actual reserve requirement for banks is only 3 – 10%. This means that a bank can loan out 10 to 33 times what its customers have deposited. When a loan or credit card is issued, the applicant’s qualifications give the bank permission to extend credit, and in this way, money is manufactured out of thin air!

Today, dollars (which are literally "banknotes" representing a promise to pay) are not backed by gold, printed money, or anything stored in a vault. The value of this conceptual cash is determined by the worth that people agree to assign to it in combination with whatever confidence society has in the banking institutions and the government.

The truth is that FDIC insurance would be nearly useless in a real economic crisis in which there was a run on banks of any size. Your cash would still be worth more than Monopoly money, but not much.

Even spokesperson Suze Orman confessed her own moment of panic. In a candid US News Money interview in which she discussed taping an Oprah show during the height of the financial crisis, Orman revealed, “I knew it was possible that by the time we came off that show that the entire United States economy could have collapsed. Our credit had frozen — I wasn’t sure we were going to be able to get money out of our A.T.M.’s."

Suze knows as well as anyone, people can't keep spending money that doesn't exist, whether it's from credit cards or a fractional reserve banking Ponzi scheme. Like Bernie Madoff, banks are betting that they'll never have to pay too many people back at once.

What you don’t know will hurt you.   There are safer places to put your money.   Next time we will look at a few places that are safer than banks.  Until then, buyer be aware!

Give Your Dollars a Lifetime Guarantee

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Not much in life is truly "guaranteed." We can't guarantee the weather, what other people will or won't do, the direction of the markets, or even if we'll be around to see tomorrow.

 And even most "guarantees" have exceptions.

 Your purchase is guaranteed - but only for 30 days, or unless you drop the item, get it wet, or use it in a way that invalidates the warranty.

 One company printed a tongue-in-cheek limitation about their own lifetime guarantee for their rugged luggage and phone cases: "Does Not Cover Sharkbite, Bear Attack, or Children Under 5."

 Sometimes you have to jump through hoops to claim a money-back guarantee. You might have to return the unused product or prove that you used it before you can even request a guarantee. One skin product company required customers to send pictures of themselves taken with the product and a newspaper showing the date, one at the beginning of the 90-day-trial period and another at the end.

 What's a guarantee worth, anyways?

 If the company making the guarantee has a solid track record, a guarantee is valuable! Guarantees give buyers confidence, reduce stress and provide assurance. They limit risk. And they help purchasers make decisions about who they can trust and where their money might be well spent.

 Oddly enough, people usually put their money in places with few if any guarantees. And without guarantees, even the most trusted places to store our cash can let us down.

 Mortgage bonds, previously thought of as reliable and boring, collapsed in the financial crisis. The housing market followed, with trillions of home equity lost. Muni-bonds, typically another safe haven for money, have been disrupted by bankruptcies. Enormous companies assumed to be stable drivers of the economy such as Enron and WorldCom collapsed with little warning. And the elite brokerage that performed so consistently turned out to be Ponzi scheme.

  Some financial products do come with guarantees. Banks have FDIC insurance and CDs offer guaranteed rates, although the current anemic rates "guarantee" your savings will not keep pace with inflation.

 Term life insurance provides a death benefit that is practically "guaranteed" not to be paid, since most term policies expire long before the insured does.

 But there IS a place where your money can provide you true "lifetime guarantees." Participating whole life insurance from a mutual life insurance company offers guarantees that should not be overlooked... especially if you're not the type of person who likes to gamble with your dollars!

 When you buy a whole life policy from a mutual life insurance company, you're purchasing a financial product known for its guarantees:

 A guaranteed death benefit. Since death is a "when" and not an "if" event, we think that's a pretty important guarantee! Term life policies can be useful, especially to young families on a budget, but they are designed to be temporary policies, not permanent life insurance. They're like appliance warrantees - they assure you of temporary protection, but you're not likely to need it while it's in force. With whole life, as long as the premiums are paid, a legacy benefit is assured.

 A guaranteed level premium. You premium will never go up with whole life insurance. Quotes for term life insurance increase dramatically as you age until they become cost-prohibitive. Premiums have risen on other types of permanent life insurance while policies were in force. However, your whole life policy premium will remain the same for life, or until the policy is paid up.

 Guaranteed cash value. Whole life policies have a guaranteed cash value that is net of all costs (mortality costs, company expenses, agent commissions). Additionally, that guaranteed cash value is guaranteed to rise every single year even if no dividends are paid. Your gains are locked in, and unless you withdraw from it, your cash value will only ever go up.

 Cash value can be guaranteed because of the following guarantees:

 A guaranteed mortality rate. This means that your cost of insurance inside the policy is pre-determined. No ugly surprises or "imploding" policies.

 A guaranteed expense factor. Policy expenses are guaranteed not to exceed a contractually determined amount.

 Guaranteed growth of your cash value. Whole life policies guarantee a minimum interest rate (typically 4%) subtract the internal costs of the policy. This growth does not include dividends, which have historically been paid, but are not guaranteed.

 Your cash value will not "roller coaster ride" with stocks, interest rates, real estate prices or politics, and your savings are guaranteed to grow even during market crashes and periods of rock-bottom interest rates.

 Perhaps you're hoping for more than the minimum guarantee? You'll love this next guarantee then...

 A guarantee of participation in any profits of the mutual company. Premiums are used to pay claims, cover operating expenses and policy costs, and fund required reserves. Profits over and above operating expenses are distributed back to policyholders in the form of dividends. This is because mutual insurance companies are "by definition... owned entirely by their policyholders," according to the National Association of Insurance Commissioners, and "profits earned are returned to policyholders...."

 Dividends, though not contractually guaranteed, have historically been paid in addition to the guaranteed minimum returns of whole life policies. Declared annually, dividends have been paid by major mutual life insurance companies every year for well over 100 years through every economy imaginable. Whole life dividends were paid even through the Great Depression and the Great Recession, which gives you an idea of how solid this guarantee is!

 By purchasing Paid-Up Additions with dividends, policyholders increase both their cash value and the amount of the death benefit. Through PUAs, dividends become part of the guaranteed cash value, guaranteed to rise every year. In this way, your dividends earn their own dividends!

 Your ability to borrow against your policy's cash value is also guaranteed by your policy contract. Typically you can borrow an amount equal to 90 or 95% of your cash value from the insurance company. And you won't ever have to justify your reason for borrowing or prove your "creditworthiness" to do so.  With many mutual life insurance companies, you can even lock in a guaranteed interest rate for any future policy loans.

 Customized guarantees. Depending on which riders are chosen, you can also be guaranteed:

  • the ability to purchase more insurance in the future, regardless of health,
  • that premiums will be paid for you in the event of disability, typically until the age of 60 or 65 (depending on your policy),
  • access to a portion of your death benefit for long-term care, if needed, and
  • the ability to accelerate your death benefit in the case of a terminal illness .

 Are guarantees right for you? You don't need to ask your doctor, just take the quick true/false quiz below:

 T/F  You understand the importance of having safe, liquid savings in addition to investments.

 T/F  You want a good, safe place to store cash where you can earn more than the banks are paying.

 T/F  If you could easily leverage more cash, you could capitalize on more opportunities.

 T/F  You enjoy sleeping at night and don't want to leave your financial future to chance.

 T/F  When you pass away, you want to leave a legacy (or an additional legacy) to loved ones and/or special causes you care about.  

 If you answered "True" to three or more questions, we guarantee you'll appreciate whole life insurance!

 To find out more about the power of whole life insurance when used as a replacement for other cash equivalents, you may wish to read Live Your Life Insurance, a book by my friend and colleague, Kim Butler. It explains how to use whole life insurance strategically so that YOU benefit from your own life insurance.

 And to find out how a whole life policy might perform for you... simply reach out and request a policy illustration. We would be happy to provide you with an illustration as well as additional information, and there's no obligation... guaranteed!