BI-WEEKLY NEWSLETTER

The last few months have been an adventure here at the Korn household. With moving, a graduation party, and working on a house our daughter is going to live in, there has not been much time to relax. However, the biggest news is that we decided to start our own firm, K Financial LLC. Therefore, in this week’s email, I want to take some time to discuss why we felt that this was not only the best decision for our family, but for your family as well. From the beginning, working with clients like yourself, I have discovered that if I focus only on doing the best for my clients, that things will work out for everyone. What I mean by that, is that there is a lot of pressure in the insurance industry, to sell. From monthly sales meetings, to competitions with incentives, to yearly trip offerings for production, some people lose sight of the real goal—you. If they become too focused on the wrong things, they can stop looking out for their clients and simply focus on making that sale. When Jill and I started talking about moving, it just made sense for us to also look at having our own firm, here in our new community. The more we chatted, the more excited we got about the opportunity, and the more we discovered that it was definitely the right choice. I spend a ton of time thinking about what I do and how to best help my clients. Jill can certainly attest to that. What’s great, is that now I have the freedom to structure and implement ideas that I believe will best service my clients, as well as reflect upon what my role is your life. Whether it came from looking at our kids growing up, reflecting on our own lives and our own future, chatting with our parents about theirs, or from the many conversations we have had with clients, like yourself, over the years, it has really helped us to see what we hope to accomplish with our business; helping you to live your best life. To do this we want to build and maintain strong relationships with all of you. Quite honestly, I’ve always felt that my best meetings are the ones in which we talk about what excites you. I love hearing about the RV trips you’re planning, how you finally plan on buying your dream car, a Cobra Roadster, all of the countries that you want to visit, enjoying your grandkid’s activities, woodworking, and each and every one of the other hobbies and goals that you have for yourselves. You guys have amazing plans and I learn so much in those conversations, about what living your best life means. I spend many hours each week, studying all aspects of retirement, so that I can help you have the freedom to go live your best life. Jill has spent over seven years in the industry, understanding and learning all of the operational aspects, through many long calls and conversations, so that she can make sure we are equipped to make decisions that will serve you best. There will be bumps in the road, of course, like any new challenge, but our focus will always be to take care of our clients. We are focused on growing and strengthening relationships, not just making a sale, to grow assets. We recognize, and value the fact that you have chosen to put your trust in us. We will continue to earn that trust over and over again, each and every day. We look forward to continuing to serve you and we want to thank you for the opportunity to be a part of you, living your best life. If you would like to discuss any of this in more detail, please reach out to us. Enjoy the rest of the week. Talk to you soon. – Greg and Jill

I hope everyone had a safe and enjoyable Thanksgiving, even though the crowd may have been a bit smaller this year. I wanted to take the opportunity in this newsletter to thank everyone for the support and encouragement we have received from you in our new adventure with K Financial. It feels strange to say that 2020 has been a wonderful year, even with all that has been going on in the world. However, we consider ourselves blessed that we have been as fortunate as we have been in these times. We have been able to accomplish so much, personally and professionally. Much of our success has been due to the amazing clients, like yourselves, that have been a part of our journey. It is truly a pleasure to wake up every day and do the work that we do, not only because we love what we do, but because of the interactions we have with all of you. I am always excited to head out to my appointments because there is so much for me to learn from each of you. Just to name a few topics, I’ve learned about new age nuclear power, making homemade liquor, hunting, changes happening with WalMart, table shuffleboard, horse therapy for individuals with disabilities, and the list goes on. My family looks at me somewhat baffled during Sunday dinners, and are always asking, “Why do you know that?” My knowledge comes from all of the great conversations I get to have with clients throughout the week. I want you to know that we are here doing our best work for you in retirement, as we hope to bring extreme value to your lives. That being stated, we want you to know that YOU bring so much happiness into our lives as well. Starting down this road of running our own business was (and still is) a bit scary. However, the transition has been much less frightening because of the accolades we have received from you and all of the support we have received when we talk to you about the direction we are headed. It has meant the world to us and completely reinforced our decision to build this firm. The success of K Financial is inevitable if we can continue to bring on clients like yourselves. We cannot thank you enough for being a part of this journey and for allowing us to be a part of your journey, in this stage of your lives. Don’t forget to keep bringing those stories, not only so I can share in your happiness, but so that I can continue to impress my family at Sunday dinner.

Latest Formula Folios Blog

An Unfamiliar Holiday Spirit

It has been a long process, but we did have a very special Thanksgiving this year. Two days before the holiday, we were able to finalize the process of me adopting Amber, Jenna and Austin. Now the household is full of Korn’s. Having these three kids in my life over the past four years has brought me more joy than an old man (like myself) deserves. Their energy and ambition in life has definitely knocked off some rust in my joints and brought out the youth in me. I am so blessed to have (officially) gained three children in just one day, and look forward to the many years we have, going forward as a large family.

Enjoy the last month of 2020. Hopefully you can find pleasure and happiness in these crazy times. Talk to you in a couple of weeks.

The year that you will never forget is coming to a close. As year end gives us a chance to reflect, I thought this would be a great opportunity to highlight a few newsletters that you can revisit, as a reminder… or, if you missed them altogether, you can check them out for the first time. Instead of choosing them myself, I surveyed an unbiased crew to give me their thoughts:

Mom’s pick: Planning Ahead

“It was hard to choose just one newsletter but I’m choosing “Planning Ahead”. After rereading it I realized what good information it had for couples, families, and singles. Making sure someone knows where to find all the important information is, if and when a loved one is lost, is something that we have been working on. We are not fully there yet but almost. I need to follow up with changing your address on the beneficiary list so will start working on that in the new year.”

Dad’s pick: A Growing Family

“I will say “A Growing Family” was both enjoyable to read & informative. However, your “Thank You” newsletter was my favorite on a personal/family level.

Jill’s Dad’s pick: Filling the Healthcare Gap

“I got the most out of the September one on filling the healthcare gap. I talk to a lot of people outside the university and this is probably the number one reason they keep (kept) on working…fear of going bankrupt because of insurance costs or a major illness with inadequate coverage. Unfortunately, it was not the one that had the family photo that certainly had your clients scratching their heads wondering who that handsome man was on the right!!! Your newsletters in the latter part of this year were great and focused a lot on the supplemental insurance which I found quite interesting as well.”

Jill’s pick: Planning Ahead

“As far as information goes, I took a lot away from this one. I felt like this newsletter provided quite a bit of information on a topic that many of us do not like to think about. It even made me pause to reflect on what we need to do to get ourselves more organized. We certainly know that our kids are impatient, and if that fact remains constant through the years, they would be extremely disappointed if we sent them on a scavenger hunt.”

My pick: Fullfillment

I pulled one out from the past and feel it is one of the biggest themes I hear from clients starting retirement or in retirement: “Now that I am here how do I find fulfillment in retirement?”

It has been a fun couple of weeks, topped off by Jenna turning 16 and getting her driver’s permit. Therefore, Jill and I will be in the hands of a 16-year-old girl for the next six months, as we grip the door handle praying we’ll make it to our next destination. I see this a lot in interaction with clients, in that they seem to be grabbing on as they get to their retirement destination. However, they have no idea what to do once they get there, “Greg, I am bored,” they say. Retirement isn’t an end game; it’s freedom. What you do with the freedom can influence the quality of these next 30 years. I believe it is important to realize that we still have so much to offer the world. My wife and kids don’t realize it, but these last 48 years, I’ve learned a lot. However, I still do have a lot to learn. When you walk out of the job, it is a huge opportunity to take your knowledge and continue to give to the world in different ways. The next time you get a bucket of KFC chicken, realize Colonel Sanders was 65 when he started KFC. Julia Childs wrote her first cookbook at 50. (I must be hungry – I am focusing on food). Ronald Reagan had a pretty successful acting career, but his second act turned out nice also. My grandfather was a farmer, but I don’t remember that as much as I remember him being a furniture builder. He found something he loved to do every day once he stopped riding the tractor around the corn fields. Our family has many beautiful pieces to remind us of his presence in our lives. For me, these are the best conversations; clients talking about what they want to do now, and how much they look forward to their third act. Here’s a good article I found about having fulfillment in retirement:

https://www.nextavenue.org/big-problem-new-retirees-run/

Formula Folios Latest Blog: Curtain Call for 2020

Enjoy the last few days of 2020. Hopefully in 2021, we will have the opportunity to do what our souls like to do best; be with our friends and family without having to distance ourselves. Have a great New Year and see you in 2021.

Greg Korn President & Investment Advisor Representative

Toll Free: 833-788-0404

Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

I have a love-hate relationship with the words, “It depends.” I use that answer quite a bit, as do many individuals that strive to provide sound advice. The problem is that we all want certainty with the answers we receive to our questions. Certainty, however, only comes when we weed through all of the available information to get to the root of the issue and properly address questions. In my world, working with clients around retirement, “It depends,” is quite often my first response to questions. “Should I be in the market?” “It depends.” “Should I get a term or a whole life policy?” “It depends.” “Should I get a Medicare Supplement plan or a Medicare Advantage plan?” “It depends.” “Should I do a Roth conversion this year?” “It depends.” Then there’s the one I hear all the time; “If you were me, what would you do?” “Well, it depends.” This can be frustrating because we all just want the answer. The reality here is that we have to work through so many variables to get to the right answer for you. Unfortunately, there is not one right answer for everyone, as we all have different needs and plans for our lives.

I met with a financial advisor to help him figure out how to maximize his and his wife’s Social Security. That should have been the first red flag–you’re a financial advisor to other clients but you don’t understand Social Security? Then through conversation, I discovered that he gave all of his clients the same asset allocation for their investments, which, by the way, was exactly the same as his. He was essentially saying, “It does not matter what YOU are trying to accomplish. This is what you get.” There is certainly no “It depends,” in that situation. Rather, it would seem that those individuals are just being sold a solution that worked for that advisor.

Great advice comes from great understanding of you and your needs. Not having that understanding is like me showing up to work on one of our rental properties with just a hammer. To adequately address the problem, it would be safe to say that I would first need a lot more tools in my toolbox. It would also probably be wise for me to understand the problem before diving in. I just don’t think I would be prepared to fix a leak or an electrical issue with only my hammer.

Now, the frustrating part (and the part I hate), of “It depends,” is that you don’t have an answer to your question right away. “It depends,” can even leave wiggle room if things don’t go the way someone said they were going to go. I know it’s not satisfying to be on the receiving end of the advice, when things don’t work out the way I was told. It sometimes does not feel like there is any ownership in the advice I received. That is why at one point, “It depends,” needs to be moved aside and a stance needs to be laid out there. I work hard to get to the bottom of issues so that my clients can have solutions that best fit their situation. Those solutions can lead a couple of different directions, but at least you will have a solid foundation to start with, and you do have actual answers to the questions you’ve asked, from my perspective. This allows you to compare with others and then move forward by making the best decision for you. “It depends,” is something you should probably expect to hear from the professionals in your life, or there’s a possibility that they are focused solely on their own agenda, and not yours. We want the best information we can get from the experts we ask, but sometimes we will have to deal with “It depends,” for a bit, as they work on figuring out solutions that best fit our needs, so that they can provide us with good advice.

Formula Folios Latest Blog:

Your Pfizer Order Has Shipped

Today in Greg’s kitchen, a Spatchcock Turkey. I know, I had no idea what that was until last year when I began researching the best way to cook a turkey. Basically, with this method, you cut the back bone out of the turkey and flatten the turkey on a roasting pan before cooking. This allows the turkey to cook evenly from both sides, while shortening the time it will take to cook. It also helps to not dry out the turkey. I nailed it last year, so in my mind, there is no way I am not cooking the turkey like that every year. If you dare to try, I will offer a couple pieces of advice, stemming from my experience this year: First, make sure you allow enough time for the turkey to thaw COMPLETELY. This is especially important because cutting the back bone out and flattening a 25 pound, half-frozen turkey is a miserable task. Second, make sure you have something in the bottom of the oven to catch anything that may drip, so that you don’t smoke out your entire family for half the day. Also, just because the turkey takes less time to cook, that does not mean that you should wait until the last minute to throw the turkey in the oven. Make sure that you give yourself plenty of time so that your now red-eyed, hungry family isn’t just staring at you while you all wait on the turkey. If you manage to avoid those few mishaps, you should end up with a very tasty turkey.

Spatchcock Turkey

Please be safe out there, as we hunker down once again to keep the spread of the virus as low as possible. I wish everyone a wonderful Holiday Season!

Greg Korn President & Investment Advisor Representative

Toll Free: 833-788-0404

Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by
Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

I hope everyone’s AC is pumping out the cool air during these hot summer days! We enjoyed our first 4th of July at our new place. My initial observation is that it is a lot different being outside of a major town. The fireworks shows were plentiful, all around us, and went well into the night. A client of mine told me that he knew where everyone spent their stimulus money – fireworks! 2020 is going to be one of those years that we will remember for a very long time, and it will surely find its place in the history books. It will also have an effect on everyone’s foundation in retirement – Social Security. The pandemic had two major effects on Social Security Income that you should be aware of; the Cost of Living Adjustment (COLA) for 2021 is projected to be close to zero, and it could shave two to four years off the Social Security trust fund. First, of all COLA matters. Social Security is one of the only guaranteed monthly incomes that increases over time. The average monthly Social Security benefit for 2019 was $1,470 a month, or about $17,640 annually. The average historical COLA is around 2.5%. What does this mean in real dollars? That $17,640 (with COLA) grows into $28,905 annually, in 20 years, and $37,001 annually, in 30 years. That amounts to an extra $938 per month and an extra $1,613 per month! When we do not get any COLA, it affects the growth on both individuals receiving SSI, and the growth of everyone else that will receive SSI in the future. That means smaller checks across the board. I always start income planning with a client by figuring out how much Social Security they are going to get, and figuring out when the best time to take it would be, in order to maximize it for their situation. This is, after all, the foundation of your retirement income. For those receiving checks, it does not look like there will be much of a raise until 2022. Now, the other issue that is looming is the Trust Fund running out – currently projected to happen in 2035. This does not mean that you would not get a check; it means that everyone will get around a 21% cut in pay if nothing is done PRIOR to the trust fund running out. That $17,640 I mentioned, shrinks down to $13,582 annually, or $338 less per month! With low interest rates and record high unemployment, that means less going to pay current recipients of checks, therefore more out of the trust fund, causing it to deplete earlier. It could actually move that date up to 2032! You will hear talk about fixing it during this political season, but there has always been political talk about fixing this during an election year. The real question, after all this talk, is this: Does something that is 12-15 years away, put enough pressure on our friends in Washington to do something about it? We can only hope, because it is a lot easier to make changes now, than having to make major ones in six to ten years from now. For these reasons, and many others, it isn’t wise to jump into taking Social Security. Instead, you need to fit it into your overall plan, as it is just one of the many puzzle pieces. This stuff matters when it comes to all of your other sources of income, and it will really matter in 10, 20 or 30 years from now. How Big Will The Raise For Social Security Recipients Be In 2021? Coronavirus Could Shave 2-4 Years Off Social Security Trust Fund: Wharton Formula Folios Latest Blog Back To Baseline Who said having teenage boys is a tough thing? When we moved, it came with the chore of mowing about eight acres, which seems like a daunting task. Not the case if you have a 13-year-old boy that wants to drive anything he can get his hands on! Every day, Austin is either out there in the morning or evening (or both), knocking out a part of those eight acres. He has also discovered that the mower has lights, so darkness has not deterred him one bit. I am not sure if our neighbors have taken to his night mowing, but there is some distance between us, so hopefully they haven’t noticed. I motivate him in any way I can, pointing out that our 78-year-old neighbor keeps his lawn looking nice and cut. Who says competition is a bad thing? I know I only have a few more years until Austin has his license, and I might (will) have to be the one back on the mower, trying to keep up with our neighbor. At least with this heat wave, the grass will not be growing much at all. I guess that means we are going to have to find something else to fill Austin’s time. Do you think he’ll like pulling weeds as much? If there is anything you want to chat about, please reach out, especially if you’re planning on starting Social Security anytime soon. Have wonderful couple of weeks.

As I sat here thinking, trying to decide what to write about this week, I watched my daughter drive off after a short visit back home. It’s weird to not have her here every day, but she’s off to start her own life–a decision we did not see coming so quickly. We thought we had more time with her under our roof. There is something about her ability to make a decision to go in one direction, and then make a new decision to go in a different direction, that drives us nuts. In fact, I’m fairly certain I could fill several pages with my thoughts on her adolescent decision making. However, I must admit, that on some levels, I actually admire her for being able to alter her course with such ease. Change, for many of us, is not always easy, and because of that, it can prevent us from doing what is in our best interest. We tend to hang on to the last decision that we made, because if we change it, we may be admitting that it maybe wasn’t the best one, and then have to face the sunk cost. We lived this fairly recently, as Jill had taken a job helping to clean up a business, and get them going in the right direction, financially. At that same time, she was to help get our company up and running (yes, she is superwoman). However, after a month, it just didn’t feel right. The hardest part for me was that I was doing things that Jill would normally be doing, and trust me, I was not even close to doing them as well as she can. The hardest part for her, was probably me creating twice the work. Therefore, we had to make a change; she simply needed to be here every day. We didn’t necessarily feel like our initial decision was wrong. Rather, it was based on the information that we had available to us at that time. When presented with new information, we needed to re-evaluate and make a different decision. That month that we spent, playing out our initial decision, was what can be referred to as the “sunk cost”, (a cost that has already been incurred and can’t be recovered). In this case, the cost to us was the time that we had lost (and stressed). I often see this concept of sunk cost influence clients when they are making a decision about their investments and what to do at any given point. What I like to do when we’re evaluating where to invest, is to ask this question: If this money were in cash, just sitting in the bank, would you choose your current investment again? If the answer is yes, then you know you are invested in the right spot. However, if the answer is no, then we have to deal with the emotional ties to that investment. The emotional relationship to the investment you chose in the past, can get in the way of what is best for your future self. As you go into retirement, it’s important to recognize that your needs may have changed since you made that initial decision. Try not to focus on sunk costs and emotional ties to past decisions. Instead, allow yourself the freedom to make the best decision today, that can also be a gift to your future self. Since life can change over time, a different direction might be necessary to accomplish your goals, as new information and options might be available to you now. The resistance to change is a battle within ourselves, and the sunk costs can be our justification for resistance. Don’t let those thoughts prevent you from enjoying a better future.

The Lesson of Sunk Cost (Applied to Morning Habits)

While I am on the topic of new information and new decisions, the RIA I work under, Formula Folios, has announced its merger with Brookstone Capital Management. These are two similar sized RIAs merging into one. I’ve been through mergers with other companies in the past, and am therefore familiar with the effects they will have on my clients and myself. Because of this, I had to evaluate whether this is the place for my clients and myself, going forward. Some reasons why I do think it is the best place for us, are as follows: Brookstone Capital Management has the same values, and they are also focused on retirement based advisers; nothing in that aspect changes for my clients. Formula Folios continues as-is, but now offering enhanced resources, that will give us more investment options and platform choices, going forward. I chose to work with Formula Folios because of their focus on retirees, and the investment options that they have.That all being stated, there is nothing that I see with this merger, that will change any of that, going forward.

Press Release

Please reach out to me if you have any questions about the merger. Have a great couple of weeks and talk with you soon.
Greg Korn President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

I didn’t realize how much I would miss our annual trip to the beach. Oh, it’s a lot of work; getting ready to go, traveling there and back, being confined to a small living space with the kids and dogs, keeping them all busy throughout the trip, cleaning and packing up to come back, and all of the other less appealing parts of vacation. I will be the first to admit that I am one of the ones who needs a vacation from our vacation, when we return. Sadly, however, as much as I tried to sell myself on that list of negatives, (and believe me I tried this year), I didn’t realize how valuable getting away with family, and unplugging from everything, really is in our lives. The breaking up of the routine is a welcome change for me. I also don’t mind when the biggest decision of my day is what type of drink we are going to make with dinner. These moments seem to have come into focus even more over the last few months, as we all continue to try and navigate what is happening in the world. I think many of us could use a vacation now, more than ever. On top of all of this stress that we may be feeling from current events, I have recently had some clients lose loved ones, rather unexpectedly (not due to the pandemic). What I have come to discover, in working with my clients over the years, is somewhat of a pattern with the issues that arise, after losing a loved one. There are several small things that I invite you to take a few moments to figure out now, to make life easier for a loved one that is left behind. Finances are (of course) a major talking point here, especially for couples. Although one person may handle the finances now, it is important that you both understand where your money is, and how the bills are paid. I know that many couples like to split up duties, which often results in just one person taking on the task of finances–not generally a fun one for many people, even when you become systematic about it. Imagine diving in and not knowing where your funds are, how to access them, or how much is even there. Being unprepared can make this brand new task even more daunting. Another noteworthy topic is online passwords. I know Jill has logins to websites, just as I have logins to websites that are important in our lives. I also know that we would have a very difficult time figuring out each other’s usernames and passwords if we needed to. That guesswork can be avoided if you can find some time now, to come up with a system for storing those. Where are all of your documents, by the way? I know the kids probably loved scavenger hunts when they were younger, but they likely don’t want to be rummaging through the house, trying to find and collect needed documents. It may be helpful to let your loved ones know where they can locate these, should they need to. Speaking of documents, keeping beneficiaries up to date on all policies, is very much worth the short amount of time that it takes. I can’t tell you how many times I review beneficiary information with new clients, only to discover that the information isn’t correct, or that (much to their surprise), there are no beneficiaries listed at all. Believe me when I say that this can be a major hassle to deal with, after the fact. I encourage you to make the time now, to lessen the burden for your spouse, children, or any other important person in your life. They will have enough to deal with. On the other hand, maybe you’re the one who is just now realizing that you don’t know the answers to some of these questions. I urge you to really gain some understanding in these areas, to possibly make your life easier in the future. Again, even if you are not married, it is just as important that you sit down with loved ones, so that they know where and how to access things when you are not here. The pain of loss is truly enough; let’s try to avoid any added (and avoidable) stress. Below is a link to a checklist for your loved ones. Please take a moment and review all of the things that need to be done. You will feel much better knowing that the people in your life are prepared. Some of you may have some work to do, but I promise you, it will be worth it. I can feel a sense of pride in clients who have gone through this loss, but get to say, “Jim had everything taken care of, because he wanted to make sure I was taken care of.” To me, it feels like they are saying, “I know that I was loved, and it was one more way that they showed me.”

Surviving Spouse Financial Checklist

A Weak Week

Grilling season has been a blast around here. Extra propane tanks are a must have. One highlight here, is that Austin loves being the grill master. Unfortunately, it doesn’t always work out as he had planned. Just the other night, he was on hamburger duty, when I noticed a massive smoke cloud coming from the grill. I opened it up, and sure enough, there was a pretty large fire happening in there. After my successful mission of avoiding burning down the house, I brought in some lovely hockey pucks for dinner. Jill’s dad dove right in. I started thinking to myself, “he’s clearly just being supportive of his grandson.” Not the case. Jill pulls me aside and tells me that this is how burgers were made when she was growing up; extra dark and crispy! Perhaps not the best skill Austin could have learned from grandpa! Needless to say, I am on hamburger duty going forward. Here’s a list of 76 fantastic grill ideas for you to try. (I am a big California Chicken guy, in case anyone is looking for recommendations).

76 Best Grilling Ideas

Hopefully everyone can get away soon. Enjoy the heat, and I’ll talk to you in a couple of weeks

Greg Korn President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

I told Jill what I was going to write about Roths for the newsletter this week and she said, “Why are you going to write about rocks?”. She wasn’t that far off, I suppose, when I stopped to think about it. Most people would probably be equally as bored reading about either topic. Despite that, it is still important that we understand and take advantage of Roth IRAs, because they can be a very valuable resource in retirement. There are many benefits associated with Roths, but the main point I want to emphasize is the tax treatment. Every dollar you earn by working or investing is going to get taxed. The variables are when and how much. Both Traditional IRAs and Roth IRAs give you the control of when to pay the taxes, and to an extent, the rate at which you will pay taxes. Traditionally, many people thought it was best to defer, defer, defer taxes until they were in a lower tax bracket, once they reached retirement. Here’s the problem: If you were a good saver, built up a nice 401k or IRA, and followed this rule, you could never end up in a smaller tax bracket. Typically, when you get older, you do not need as much money to live on because you are less active, and have (hopefully) paid off many of your debts. However, as you age, Required Minimum Distributions get larger. That results in paying taxes on money you don’t necessarily need, to live. How can a Roth help? Simple–you pay the taxes when you put the money in and you will never pay tax on that money, or the money it earns. Let me say that again–never pay taxes again on this money AND have tax-free earnings! Those are some beautiful words in the tax code. To reiterate, that does mean that you will have to pay the taxes now. This begs the question, “Will I pay more on that dollar now, or will I pay more on that dollar in the future?” That’s at the heart of the matter, and the truth is that we really don’t know because so many things can change between now and then. This not only refers to the things in our lives, but also the fact that the rules can change, tax brackets can change, and the list goes on. Therefore, we have to focus on the information we have available to us now. For instance, in 2025 many provisions in the Tax Cuts and Jobs Act are set to expire, and if nothing is done, all tax rates will go back up. Let’s not forget those several trillion dollars in checks, that were just drawn on a bank account that has no money, or that the government is usually looking for ways to get revenue to pay bills anyway. Interestingly, in spite of all of this information that points to rising tax rates, the average balance of Traditional IRA accounts in the United States, is $168,000, while the average for Roth accounts is just $41,000 (Internal Revenue Service, SOI Tax Stats, Tax Year 2017, 2020). These facts lead me to believe that Roth IRAs are being underutilized. Given that tax rates will likely go up in the future, it leaves 401(k)s and IRAs vulnerable. Personally, I think we all need to take a hard look at paying some tax now, while tax rates are at historical lows, and consider moving some of our 401(k) and IRA money to a Roth. Then down the road, when you take that money out to live on, it will be yours, and yours alone, meaning you won’t have to write Uncle Sam a check. This discussion is definitely on the agenda for all fall meetings.

A Great Year For a Roth Conversion

All Time Highs

Well, we added another one to our family, a golden retriever puppy. (No, we don’t believe in a relaxing life.) Priscilla doesn’t believe in a good night of sleep either, but hopefully (soon) she will come to see the value for herself, and for her sleep-deprived parents. Sunny and Cher have enjoyed having another playmate, especially Sunny, who simply can not control her excitement. If Priscilla moves, she moves, if Priscilla gets a toy, she tries to take that toy. Watching her play keep away, outside with Priscilla, is absolutely priceless. It is a blast watching them have so much fun, and it has certainly brought us much joy and laughter.Do your best to finish your summer strong, in this strange year. Talk to you in a couple of weeks.

Greg Korn President & Investment Advisor Representative Toll Free: 833-788-0404
Fax: 814-357-9070

Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review

Summer has come to an end here in the Korn household and we are back in school mode. To prepare for this school year, we had a ton of annual doctors visits, allowing us to test out our new health insurance plan. Since we are self-employed, we had to dive into figuring out which health plan would work best for this large family. Health insurance plays a huge part in your retirement as well, and selecting the right plan for you is an important process. There is comfort in knowing that when you reach age 65, you’re going to have Medicare, and will likely be choosing between a Supplement and a Medicare Advantage plan, which I will talk about in a later newsletter, as that is its own animal. The question that often comes up is, what do you do to fill the gap from the time you retire until Medicare starts? Well, in general, you end up with four choices. If you are one of the lucky ones that worked for the federal, state or local governments, and have enough years in to qualify for the health care they provide until you are 65, life is good. There are some companies out there that have nice retirement plans that also include healthcare as part of your going away present, which can prove much more valuable than a gold watch. Now for the rest of us, we need to make a choice on how much and what type of coverage we will need. The good news is that COBRA is available to you; the bad news is that it can be very costly. With COBRA you get to continue the health insurance plan you have now, but you must pay the full cost of the health insurance, rather than the employer paying a portion. In the last two weeks, I had one client opt in to COBRA, and another say “No way”, to COBRA. It’s hit or miss. Your third option is the Marketplace (Obamacare). I’ve been helping clients navigate the Marketplace since it began and here are some my observations; prices have definitely gone up, navigating the website has gotten a lot easier, and you will want to shop for a new plan every year because your current plan will go up and you can find a new plan offered by the same company, that is very similar to the one you currently have, at a lower cost. Strange, right? Also, if your income puts you above the income limit to receive a subsidy, it is best to not go through the Marketplace. Instead, go straight to the insurance company to sign up for the plan you want. Since subsidies are based on your income that shows up on your tax return, some proper planning, prior to retiring, can significantly lower healthcare costs before getting to Medicare. Examples would be delaying Social Security, and living off of savings and non-qualified accounts, instead of IRA’s during these years. To shed some light here, I recently had a review with a client of mine, who was hoping to make a $10,000 withdrawal from her IRA. Had she done so, it would have caused her to have a $100 increase in monthly premiums for her health insurance. Instead of her being able to enjoy that $1,200 portion of her withdrawal, she would have ended up paying it out in premiums. Yikes. All of these years of working with retirees has taught me that planning is everything, and that every aspect of your retirement can have an impact on the money in your pocket. Finally, the last option is Health Sharing plans, which is where you don’t have health insurance, but you do have the commitment of others to pay your health costs as they are incurred. You commit to a monthly share amount to go into a pool to pay others healthcare needs, and they do the same. In essence, it is a community. You take on the responsibility of paying for your regular appointments, but have the commitment from the organization if you have larger healthcare needs, that the funds will be there for you. There are several Christian and non-Christian based health sharing plans available for you to choose from. Bottom line is that all of these options have pros and cons. They need to be explored in order to discover which is best for you. Like most topics we discuss, health insurance options are specific to a person and their situation, and not everyone will benefit by using just one approach.

Your Bridge to Medicare

Markets Sell Off

Well, remote learning has begun again, and we have been diving back into school for the last couple of weeks. Jenna, our overachiever, is attempting to graduate a year early so she has quite the workload. Fortunately, she has mastered online schooling. Austin, who hasn’t demonstrated the best studying skills in the past, got a dirt bike this summer that didn’t run. He has spent endless hours taking it apart, ordering parts, figuring out what is wrong with the bike, and putting it back together. He is doing this all on his own, because I am certainly of no help when it comes to engines. We still haven’t seen him cruising around the yard yet, but he does have it running! What has been great about this, is that he has developed new learning skills. Much to our surprise, he has transferred this new approach to his school work and has been getting A’s on most of what he completes so far. It seems as though he has gained some real confidence in his abilities, which has been great. Then we have Kyra, who is our steady Eddie and does all of her school work every day, without any issues. Not much to say there. Lastly, the youngest believes playing games on the computer is more important than attending mandatory live Zoom classes. For now, we seem to have that situation remedied. Luckily, we have them all in their own space so everyone can stay focused and get through this unusual school year. The real worry is Jill and I surviving with this much daily contact with our kids.

Looking forward to Fall meetings with everyone!

Greg Korn President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

Begin Your Retirement at kfi.life
I have prepared a very short newsletter this week because I have some big news…our website has been completed and is now live! We are hoping that everyone will take a few minutes to check it out and get to know us a little better. The process definitely took some time, as we had to figure out what we wanted to say, how to say it, how we wanted the site to look, and so on. Even after all of that, we had to get it approved by compliance. It took a bit longer than we anticipated, but we believe that it was worth the wait. We are excited about the end result and feel it is a very accurate reflection of who we are and what we are about. Let us know what you think!

kfi.life

We also wanted to provide you with the links to all of our social media accounts. We hope that you will follow and connect with us!

Facebook

K Financial

Linkedin

Greg’s Linkedin

Jill’s Linkedin

Formula Folios Latest Blog

A September Sell Off

I will be back in a couple of weeks with my usual newsletter. Until then, enjoy the beginning of football season!

Greg Korn President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070

Important Disclosures Regarding Email Communications

Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

I would like to start out by acknowledging that I am a day late on my newsletter this week. Jill and I took a trip to North Carolina to meet up with Jill’s sister and her husband, for a little getaway this past weekend. We took the dogs down also, so they could enjoy some beach time. The right vacation can really help fill the tank, plus it is always great to explore new places. The south is a little different than what we are used to, and we enjoyed seeing that part of the country. The trip really prompted me to reflect on the top places that I have visited in my lifetime. (I hope when we come out of this pandemic, you all find a place to go as well, since we’ve been confined to our homes for so long.) I will start out with our favorite place that we travel to every year – Watkins Glen on Seneca Lake. We’re not huge wine people, but we truly enjoy our long weekends around the lake, checking out the different wineries. We bring home one bottle from each place we visit, and still have not been to them all. We alternate between two different Airbnb’s when we visit. One is in town (next to an amazing Italian restaurant) and one is in the country, overlooking the water. Another place I truly enjoy going is the Rocky Mountains, both in the Winter and Summer. Back in the day, when I used to ski, Copper Mountain would be the place. It is a huge mountain with long runs. I always thought it was nice because it never felt too crowded. You also can’t go wrong checking out the Rocky Mountain National Park and seeing the many elk. Overseas, Rome would be my choice. After visiting my dad in Egypt, my mother, my sister and I stopped in Rome for a weekend on the way home. There is so much history and the architecture is absolutely beautiful. That would be the number one place I would love to revisit now. I remember walking through the catacombs and just being blown away by the fact that these were created so long ago. However, for now they will just have to be a memory because IF I were to ever get Jill on a plane, we will have to start out with MUCH shorter trips. I do have some hope that I will get her to Italy, simply because I can entice her with her favorite foods. Wish me luck. Now, for an all inclusive experience, Riviera Maya in Mexico would be the place I recommend. There are many great resorts along the coast to choose from. The best part is that you get to sit back and relax by the pool or beach like a king or queen. However, be careful because you might not come back with the beach body you left with. (I know this first hand.) Turns out, I simply cannot handle the unlimited food and drinks. After such a great trip this weekend, at North Carolina beaches, we are thinking that we might make more trips down that way. It is definitely a longer drive than we are used to, but we like the neighborhood feel of it, and the places are a little less crowded. For now though, Wildwood is the place for the kids because of the boardwalk, and of course the dogs love the beach and dog parks. This world is filled with beautiful, amazing places to visit and explore, so I hope that you get out there and can see them for yourselves, if you haven’t already. I would love to hear about your favorite places, as we are always looking to try something new. We have even started planning our next trip and are contemplating meeting up with Jill’s sister next year in Nashville; a new place for all of us to explore. Also, we don’t have to get on a plane. Enjoy the list I found below:Best Vacation Ideas and Destinations for Seniors Latest Blog from Formula Folios:October OptimismPlease make it stop – all of these election ads, that is. It will eventually end and someone will be elected. We will get back to not being bombarded with calls, text messages, ads and conversations about the election. No matter who is elected, there will be changes that affect you throughout your retirement. Being that many of us can easily focus on the short-term, but aren’t always as worried about the long-term, we can miss opportunities today that could have an effect on us 20 years from now. Congress changes things up all the time for us, with the Secure Act, Obamacare, Tax Cuts and Job Act and the list goes on. All of these had an effect on retirees and individuals planning to retire. I can’t emphasize enough, how important it is to maximize your opportunities each year because we never know when the rules might change, amongst other things. No matter who is elected, change is coming because, well, change is always coming.Enjoy the beautiful fall colors for the next couple of weeksGreg Korn President & Investment Advisor Representative Toll Free: 833-788-0404 Fax: 814-357-9070Important Disclosures Regarding Email CommunicationsAdvisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.

If I had to guess, I would say that you are getting bombarded with tv ads, mail and phone calls right about now, and I am not talking about the election stuff. Medicare companies are killing a small tree in your honor, just to get you to sign up for their plan. Therefore, over the next several newsletters, I am going to do my best to review your options, so that you can make the best decision for you. Let me be very clear in one thing; it is not wise to listen to anyone (who is not an expert in the field), that tells you they have the best option for a plan for you. That includes your family, friends and the happy go lucky salesman on the phone or at the front door. I have had over 700 meetings with clients about Medicare, and one fact that I know for certain, is that everyone’s situation is different and there is no single solution that would be best for everyone. This week, I am going to tackle an option that I am excited about, because it has returned to Pennsylvania; a Medical Saving Account (MSA).
I am excited because for the right individual, you have the opportunity to have zero medical costs during the year AND build up a savings account for medical costs in future years. “Greg, how is that possible? No medical costs for the year?” Well, I am glad you asked. See, Medicare Advantage plans receive a lump sum from Medicare for the year, for everyone that signs up for their plan. With an MSA, they deposit a portion of that lump sum ($2,000 or $3,000) into an account in your name. Here’s the rub; it is a high deductible plan, so you are responsible for the full cost of that deductible ($5,000 or $8,000) and then the plan would cover any medical expenses above the deductible that you incur. Simply put, if you have a healthy year and do not have any major medical expenses, you use the cash in the account they gave you and nothing out of your pocket. Huge win!! Zero medical expenses this year and guess what? You keep the balance in the account and it will be added to next year’s funds, giving you the ability to grow the funds for future medical expenses. Several healthy years and you might have enough to cover the whole deductible in the future. “Greg, have you seen the amount my doctor charges me…not to mention, the labs?? I’ll blow through that money in no time.” I know it’s crazy and it’s no wonder the insurance costs are going up. However, the great thing for you is that when you do go to the doctor, you will only get charged what Medicare reimburses the doctors. You pay Medicare rates, which are significantly lower than what you would normally be charged. You will probably be surprised how low the rates are. That is likely why you hear doctors threaten to get out of the Medicare business. “Ok Greg, I am interested,” (which you should be). “Does my doctor accept it?” If your doctor accepts Medicare, then you are set to go, which means you have no network and can see anybody in the county that accepts Medicare. “Greg, what’s the catch? How much do I have to pay for this?” Nothing; it’s a $0 premium. One of the hardest parts of an MSA, is to change your mindset when dealing with healthcare. You are used to having copays and coinsurance when you go to the doctor, but now you’re going to get a bill for the whole cost of the visit, which can be scary. Clients that have gotten over that mindset and have gotten through the first year, have been very happy with the MSA plan. Now, of course, this plan isn’t for everyone. It is best for individuals that are pretty healthy and/or have access to enough cash to cover their responsibility of the deductible, should they have a bad year and incur a ton of medical costs. This plan was offered in the past in Pennsylvania and clients loved it, so I am thrilled to have it in the toolbox again for this year’s Annual Enrollment period. If you are interested in talking more, let’s set up a time to review your options.

Lasso

Latest Blog from Formula Folios

Up In The Air

We met with a lawyer this week to discuss setting up an LLC for our rental properties. It reminded me that we should all have good professionals in our lives to rely on, to cover areas that we are not experts in, so that they can guide us when needed. I’ve come to realize that knowing someone that is great at their job, adds so much value to our lives and provides peace when we need to tackle something in their area of expertise. Here is my list of experts: By far, the most important, in my opinion, is a Financial Advisor. I may be biased here, but as advisors, we do work with all of the other professionals in your life, to coordinate those other aspects. Also, hopefully because you’re reading this newsletter, you can check that one off the list. The other essential professionals are an Accountant (Tax Preparer), Attorney and Independent Insurance Agent. Some others that are good to have as a resource, are a Real Estate Agent, Mechanic, HVAC expert and a Handyman. Hopefully you already have these in your contacts on your phone.

7 Types of Financial Advisors & Professionals and When To Hire Them

I hope you’re getting value out of these newsletters. If so, and you know someone who might also find them valuable, please forward them on. I hope you have a spooky and fun Halloween.

During an election cycle, you will likely hear a good deal about Medicare, which has a tendency to make people a bit nervous about its future. However, throughout history, Congress has done nothing but strengthen the Medicare program. Additionally, most of the talk surrounding Medicare involves plans to expand. In the 1980s for instance, Congress permitted individuals to purchase Medicare Supplements to cover the gap in expenses that Medicare alone will not pay for. They have revisited this many times over the years, in an effort to improve Medicare Supplements, and even excluded pre-existing conditions from affecting pricing upon initial enrollment. This allows those with pre-existing conditions, the same pricing as healthier individuals.

Supplements play a vital role in the Medicare system. They allow individuals to transfer the risk of major medical costs to an insurance company, by paying a monthly premium. Supplements work in conjunction with Medicare, paying the part that you would otherwise be responsible for when you see a doctor. How much the insurance company pays depends on which one of the ten Medigap plans you choose. Having so many choices can overwhelm people, and therefore complicate the selection process. Obviously, the more the insurance company covers, the higher your premium will be. There are a lot of factors that go into calculating what your premium will be, and it starts with where you live. Every area has a different overall average cost, relevant to the medical system, which is then reflected in your premium.

Two other factors are your age and gender. Sorry to be the bearer of bad news, but us males are more expensive because on average, we tend to not live as long as women. To add even more complexity to the situation, not all supplements are priced the same, and costs can vary widely for the exact same plan, offered through different companies. It is important that you shop around and get quotes from multiple insurers, or work with someone like myself, that does that part for you (I guess today was toot your own horn day). What you do need to be aware of, is that the supplement company you pick now, will most likely not be the supplement company you have in ten years. Prices will rise because you will inevitably get older, and the cost of insurance, in general, will likely rise. From my experience, in about five years, most people are able to cut their supplement costs significantly, by moving to another company for the same exact coverage. The caveat is that you have to be free from major health issues, such as cancer, heart problems, or kidney problems, to name a few. This is because when you switch from one company to another, you will need to go through underwriting. This time, your pre-existing conditions count against you and will affect your premiums.

Insurance companies exist for the purpose of mitigating risk, and since individuals with major health issues create a greater risk for higher healthcare costs in the future, the insurance companies, ultimately, would like to steer clear of those risks. One of the biggest factors in each insurance company’s premium differences, is the cost of insurance for the pool of individuals they insure, in each plan. The more unhealthy the pool is, the greater the cost for you and others, as this forces premium increases. Unfortunately, this is something that nobody can predict, simply because we can’t use past increases to determine future increases. Therefore, I am a big advocate for starting with a reputable company with the lowest premium. The reality is that all premiums are going to go up, so why pay more to start with? In my opinion, the best strategy is to review annually and change when it makes sense, in the future.

Now, what about drugs? Supplements do not cover prescriptions, so you will need to get a stand-alone prescription drug plan to accompany your supplement. I will cover Part D Medicare in a future newsletter. In the end, it is simply about finding the right plan for you. The clients that I have with supplements, are generally very happy with the way they work. One client of mine had some major medical issues last year, (and I mean major) from surgeries, to cancer and even kidney issues. She was so thankful to have her supplement because she did not have to worry about medical costs outside of her monthly premium and therefore, could just focus on getting well.

How to compare Medigap policies

Formula Folios latest blog

Election Week

I wanted to share a couple of podcasts that I enjoyed about Estate Planning. They both do a great job of explaining the importance of taking the proper steps now, to plan for what we will all ultimately face one day. By the way, these podcasts are not just geared toward advisors. The Truth About Estate Planning points out, in each podcast, important details for lawyers, advisors and you. Really, anything that can help us get serious about planning and stop saying “I will get to that,” is a plus. After all, our time here is not promised.

Complete Estate Planning

Now, sit back and enjoy a beverage–the election ads are FINALLY over! Talk to you in a couple of weeks.

Well, we are coming to the end of this year’s Annual Enrollment Period for Medicare Advantage Plans and Prescription Drug Plans. Therefore, this will be the last time that you have to read an email from me about Medicare Insurance–this year, anyway. (Trust me, I am thankful as well). The last area I wanted to address is Part C Medicare, better known as Medicare Advantage (MA) plans. Medicare Advantage plans are run by health insurance companies that are approved by Medicare. When you sign up for one of these plans, Medicare pays a lump sum to whichever one of the health insurance companies you choose. (In our Central PA area, it would be Geisinger, UPMC, Highmark or Aetna). One of these companies will become your primary insurance, and therefore you and your healthcare providers would not deal directly with Medicare anymore. The Medicare Advantage plans do make decisions on coverage, but they still have to follow the Medicare guidelines. There are five areas of importance you should be aware of when looking at these plans; monthly premiums, deductibles, copays, coinsurance and max out of pocket costs.

Medicare Advantage plans are very similar to the plans you may have had when you were working. The monthly premiums can range anywhere from 0 – $200 per month. I review over 40 different plans per year on average, and it is rare that I find a plan that provides enough value to justify paying a premium. These plans are so competitive now, that zero dollar premium plans are usually the best way to go. You see, a good strategy for these companies to generate more income, is to charge you a premium. However, a $5 savings here and $10 savings there on copays, doesn’t typically give you enough value to justify the premium. I strongly believe that you can (and want to) spend your money better than the insurance companies can.

The majority of MA plans have no deductible before your insurance kicks in, which is obviously a very appealing aspect. MA plans are a pay as you use system; you go to your healthcare provider and you have a co-pay for that visit. If you don’t spend much time at the doctor, then you’re not going to be spending much money. What is nice, is that you already know what the co-pay is going to be because all of the costs of visits and procedures are provided to you before you sign up. There are a few items that are a percentage of the total cost (coinsurance), like durable medical equipment, which is generally 20%.

The last important concept to understand is the Max Out Of Pocket (MOOP). This number reflects the most you would pay in copays and coinsurance in a single year. If you have a very bad health year, then you will spend a few thousand dollars (this year it was up to $7,550). Fortunately, the health insurance companies pick up all costs after that. The majority of my clients will not spend anywhere close to the MOOP, unless they end up dealing with something like cancer, or have a long stay in a Skilled Nursing Facility.

As I mentioned earlier, the MA companies receive a lump sum from Medicare when you sign up with them. That obviously entices these companies to appeal to you, so that you sign up with them. One way to do this, is to throw in some freebies that Medicare doesn’t cover. I’m sure you’ve seen the ads that mention those freebies, like routine dental, vision and hearing, and maybe even a fitness benefit. There is a relatively new one that has shown up in the last couple years as well, which is an allowance for over the counter items. Sure, these are nice benefits, but what I tell my clients is to make your decision based on your medical needs first, and if an MA plan is the best option, you can certainly take advantage of the freebies. In my experience, clients don’t really use these benefits to their fullest though, and there can also be some limitations. For instance, your dentist may not accept your insurance. My point is simply that you don’t want to cause yourself to incur larger medical costs chasing marketing hype.

MA plans have been evolving every year and are definitely improving as time goes on. There is also the benefit of being able to switch plans each year, to the one that best suits your needs, without any worry of pre-existing conditions. For this reason, Jill and I hunker down every September to go through all of the plans in order to figure out which ones are the best, so that you can focus on other things…like enjoying long hikes in the woods.

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Life is all about making the best decision that you can in a given moment, using all of the information available to you. Retirement doesn’t change that. You’ve still got to be focused on making good decisions to put yourself in the best possible position for success over the next several years. Therefore, when I came across this article about 6 Bad Moves That’ll Haunt Your Client’s Retirement, I felt that it could be a good read for everyone. (I wish I had limited my life to only 6 Bad Moves!)

Have a great Thanksgiving with your family and friends.

NEWSLETTERS 2020

BI-WEEKLY NEWSLETTER

Address

207 Main St
Ridgway, PA 15853

308 Walton Street, Suite 3
Philipsburg, PA 16866

214 W High St
Bellefonte, PA 16823

CONTACT US

Local: 814-248-3026

Toll Free: 833-788-0404

Fax: 814-357-9070

EMAIL

begin@kfi.life

NEWSLETTERS 2020

BI-WEEKLY NEWSLETTER

Address

207 Main St Ridgway, PA 15853

308 Walton Street, Suite 3Philipsburg, PA 16866

214 W High StBellefonte, PA 16823

CONTACT US

Local: 814-248-3026

Toll Free: 833-788-0404

Fax: 814-357-9070

EMAIL

begin@kfi.life

207 Main St
Ridgway, PA 15853

308 Walton Street, Suite 3
Philipsburg, PA 16866

214 W High St
Bellefonte, PA 16823