All Things Financial Planning Blog


Health Care Reform and You

Your Personal Declaration of IndependenceThe Patient Protection and Affordable Care Act, or PPACA, has many facets to it and its implementation will be done over several years. Provisions of the Act have ramifications for businesses and individuals so we will focus on the Health Care Reform Act and its impact on you as an individual. Since we are at about mid-year 2013 I wanted to focus on the Act for this year and next. To summarize 2013 and 2014, I offer the following …

In 2013,

  • Medicare Part A tax rate on wages goes up from 1.45% to 2.35% for certain individuals making more than $200,000 and couples making more than $250,000.
  • ‘Investment Income’ will have an additional 3.8% tax imposed if you make more than the $200,000 or $250,000.
  • Your employer must provide employees with info on employer plans, health exchanges and subsidies.
  • Your flexible spending account ‘set-aside’ will be limited to $2,500 per individual.
  • Medical expense deductions will not be deductible until they exceed 10% of AGI rather than the current 7.5%.

Beginning in 2014,

  • Waiting periods before you can enroll in an employer sponsored plan cannot be more than 90 days.
  • Insurance carriers will be required to cover everyone, even those with preexisting medical conditions.
  • If you are not covered through an employer health plan and do not purchase minimum essential health coverage on your own, you will have to pay a yearly fine of $95 per person ($695 in 2016) or 1% of taxable income (2.5% in 2016), whichever is greater. Individuals who do not have affordable minimum essential coverage from their employer will be eligible for tax credit subsidies for their health insurance purchase on a state exchange if their income is below 400 percent of federal poverty level – about $46,000. Minimum essential coverage includes Medicare, Medicaid, CHIP, TRICARE, individual insurance, grandfathered plans, and eligible employer-sponsored plans. Workers compensation and limited-scope dental or vision benefits are not considered minimum essential health coverage.
  • Group health plans, including grandfathered plans, may not impose cost-sharing amounts (i.e., copays or deductibles) that are more than the maximum allowed for high-deductible health plans (currently these limits are $5,000 for an individual and $10,000 for a family coverage). After 2014, these amounts will be adjusted for health insurance premium inflation. Group health plans, including grandfathered plans, may no longer include more than restricted annual or any lifetime dollar limits on essential health benefits for participants. Limits may exist in and after 2014 for non-essential benefits.
  • Each State must establish health insurance exchanges for individuals and small businesses defined, federally, as employers with less than 100 employees

What will the health insurance exchanges and pricing look like?

Obviously, each State is different. Some States run their own exchanges others have opted to let the Federal government run their State programs. There has been a lot said and predicted about policy pricing given the mandates of coverage and benefits provided for in the Act.

In California, we got our first look at our health care plans to be offered on California’s exchange. Our State will have 19 rating regions which will have 13 health carriers offering four plan types to Californians – Platinum, Gold, Silver and Bronze. California’s Silver Plan will have region costs that will vary for a 40-year-old from the low $200’s per month to the low $400’s per month depending on the region you live in. This is similar to our ‘zip-code-pricing’ currently used by companies in our State. The silver plan, which is expected to cover 70% of an individual’s health care expenses, has a $2,000 deductible, $45 copay for primary care visits, a $250 emergency room co-pay and a maximum annual out-of-pocket expense of $6,350.

According to Chad Terhune of the LA Times, for our 40-year old purchasing a Silver Plan and living in the Los Angeles County region they will be paying somewhere between $242 and $325 a month whereas a similarly designed plan today would cost $321 albeit with more comprehensive benefits. Statewide, considering all counties, the average premium in the State is $177. So the results thus far seem pleasing given the chatter about price increases.

In Ohio they have opted for the Federal government administered program to run the Ohio exchange. Fourteen carriers have submitted 214 different plans to the federal administered exchange. The price ranges for minimum essential health benefits through the federal administered exchanges range from $282 and $577. According to Ohio officials that will be an 88% increase in individual health policy costs for its citizens. . Other preliminary pricing for the 40-year old purchasing a Silver Plan has come in at a low of $205 in one region of Oregon to a high of $413 in a region in Vermont. The Congressional Budget Office had projected nationwide average monthly costs for the second lowest Silver Plan to average about $433. Results are still coming in so stay tuned.

One of the other provisions of PPACA is that health insurance companies must issue rebates to individuals and small businesses if the health insurance company does not spend at least 80% of their annual premiums on medical care. In recent filings with regulators, Blue Shield of California said it owed $24.5 million in rebates to thousands of small firms and similarly Blue Cross of California will be rebating $12 million.

Comments and Planning Implications.

So there is a lot to be played out yet with respect to the law and its implementation and pricing. Businesses have a lot of hoops to jump through with larger companies, publicly traded for example, probably less (a relative term, obviously) impacted than the smaller businesses especially those with more than 50 employees and less than 200. How the pricing and number of carriers willing to provide policies in your state will pan out between now and the end of the year is still a work in progress. For those who do not have insurance currently, or those who have policies that do not provide minimum essential coverage, consult with your advisor to see how the blend of tax subsidies, tax penalties and other issues of PPACA impact you, your family and your financial plans. To your healthy and successful financial future!

David Bergmann, CFP®, EA, CLU, ChFC
Managing Principal
The David Bergmann Group
Marina Del Ray, CA


In Case of Emergency…Can You Help Your College Student?

Believe it or not, the summer is more than half over for most students across the U.S. Whether for the first time or a return engagement, that means getting serious about loading up the car with school supplies, furniture and clothing in preparation for heading off to college.

There are many schools of thought as to how much support, financial and otherwise, parents feel they should provide. Regardless of where you fall along that spectrum, most parents agree they at least want their young adult to have the tools they need to be safe.

More and more laws are in force that make it difficult if not impossible for a parent to share responsibility with a young adult when it comes to health care, legal & financial matters and educational records. While there may be differing opinions on how much, most parents and students desire some level of shared access. There are mitigating planning steps most parents and children either aren’t aware of or don’t place a priority on taking care of as a child turns 18.

Let’s take a look at the three primary impact areas, the issues involved, and the relatively simple steps that parents and young adults can take as part of a thoughtful estate plan to ensure that their true intentions are met in taking those first meaningful steps into adulthood.

Health Care

Most of us have heard of HIPAA, the Health Insurance Portability and Accountability Act, that sets rules around what medical information can be shared. Most of us have not, however, considered the impact of the Act on our young adults. Even if you provide for the students’ health insurance or they are your dependent, you may not have the right to receive updates on their status or the ability to make important decisions as to their care or well-being if a medical emergency occurred. Whether the simple release of medical records or making life altering decisions for a student in a non-responsive state, rules around privacy can make an already difficult situation that much more stressful.

Legal & Financial Matters

This can cover a wide array of scenarios, but the basic message is the same. A parent’s ability to intervene in even routine affairs often ends at that 18th birthday. Whether your student simply needs money transferred from a home account to another or has a legal situation that requires significant counseling or assistance, becoming an adult can make a parents’ access to assist that much more difficult.

Educational Records

Similar to HIPAA, the Family Educational Rights and Privacy Act (FERPA), was put in place to specify privacy rights over a students’ educational records. Here again, once a student turns 18, the bulk of the control is put in their hands. For many parents, especially those footing the bill for much of the child’s support, there’s an expectation that they have a right to see grade reports or potential disciplinary issues at the child’s university. In many cases, without express permission of some kind from your child, you could be blocked from these activities.


These are significant issues that parents and students need to discuss and come to some understanding as to how the transition from dependent to young adult will go and what expectations will be on both sides. To avoid many of the scenarios above, contact your estate planning attorney and ask about the following documents.

  • Durable Power of Attorney – this will allow a parent to take any legal or financial action on the students’ behalf
  • Health Care Power of Attorney – this will allow a parent to communicate with doctors, hospitals and other medical staff and to direct medical care in the event the student is unable
  • Living Will – this authorizes the parent to terminate life support based on criteria the student sets in the document
  • HIPAA Release – this form allows a parent to communicate with medical personnel without any privacy issues. It is not as sweeping as the powers given in the health care power of attorney.
  • FERPA Release – many universities will have their own version of this form readily available in their administration offices. It gives parents the right to inquire and view a students educational records.

While somewhat of a daunting list, most of these documents can be drawn up by an estate planning attorney using very basic language for relatively low cost. It might be a good time to do this while parents update their own estate plan as well.

These basic steps are a great way to add a layer of protection and ensure that your child is able to learn the ropes of adulthood and earn their education while not having potentially unwanted outcomes looming in the event of an emergency.

Chip Workman, CFP®, MBA
Lead Advisor
The Asset Advisory Group
Cincinnati, OH


5 Common Retirement Planning Mistakes (and How to Fix Them)

The timing could not have been worse. The largest generation of retirees in our nation’s history is entering their retirement years during the worst economic downturn since the Great Depression. Not only have baby boomers witnessed their retirement accounts shrink by as much as 50% during 2008, they also have to deal with anemic yields on bonds and CD’s, a decimated real estate market, and record high unemployment rate. Coupled with a significant increase in life expectancy thanks to modern medicine, retirees certainly have their work cut out for them.

Fortunately, it is never too late to start the retirement planning process. But retirees need to avoid many of the common mistakes because the acceptable margin of error is much smaller than ever. Here are 5 of the most common mistakes made by retirees, and how to fix them.

  1. Having a Plan with Outdated Assumptions. While most people who are near retirement age have a sense of how much assets they have accumulated, how much they will need to spend in retirement, and how long their money might last, most of people fail to have those numbers checked against different market conditions. As long as the world economy continues to struggle, one needs to challenge the conventional wisdom regarding expected annual rate of return, inflation rate, GDP growth, etc, because any one of these macroeconomic factors can easily derail a carefully crafted retirement plan. Therefore, potential retirees should consider updating their plans using a variety of market returns assumptions (both good and bad), rate of inflation (both benign and extreme), and other macro factors. If your numbers come up short, it’s time to consult a professional.
  2. Retiring Too Soon. Working even a few years beyond what you’ve planned can pay a surprisingly large bonus in retirement security. Social Security defines age 66 as the typical retirement age for most people, but about half of all Americans don’t wait that long. You can avoid the early-filing benefit reductions imposed by Social Security by working until your full retirement age (as defined by IRS). At the same time, you can keep contributing to your retirement-savings plan, building additional balances that can be put to work in the market. Every additional year of working income is a year in which you’re not supporting yourself by drawing down retirement balances. The upshot is that staying on the job a few additional years can boost your income in retirement by one-third or more.
  3. Underestimating Health Care Cost. Even for those on Medicare, health care costs can erode spending power and economic security for most retirees. Out-of-pocket expenses for people in retirement have jumped 50 percent since 2002–and that doesn’t include the possibility of needing long-term care insurance. Health care costs pose one of the most serious risks to retirement security, so it’s important to understand how to plan for this major expense, navigate the system and manage your spending. There are many public and private resources available to help you plan. Do not wait until retirement to seek advice.
  4. Not Diversifying Your Portfolio. It is not uncommon for a retiree who has worked at the same company for many years to accumulate a large amount of that company’s stock in his or her portfolio. Some retirees choose not to diversify because they feel that they “know their company the best”, and others simply neglect to do so. From a diversification and risk management perspective, a retiree’s investment portfolio should hold no more than 5% ~ 10% of any one particular stock, so that ones portfolio can be protected should an investment goes awry.
  5. Putting the Kids College Before Your Retirement. As I’ve told many of my clients, “there is always college aid for your kids. But there is no retirement aid for you other than yourself”. A retiree should never jeopardize his or her own retirement by either withdrawing, or borrowing from their retirement accounts to help fund their children’s college education (or home purchase, wedding, car, etc). Instead, they should focus on building and protecting their nest egg to last them through their golden years.

It is never too late to start planning for your retirement. If you find the task of mapping out your financial life for the next thirty years overwhelming, it might be time to lean on professionals to get a second opinion.

By Andrew Chou, CFP®
Special to FPA

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What Amount Should I be Saving – Part I

Over the past few months I have written several articles on this blog about what individuals need to do with respect to what the future will be like related to things like social security benefits and health care costs if there was a change in these programs as the Congress deals with the deficit and the debt on a national level. The key issue in those articles was that you need to be saving money now and investing it so that the money grows to provide a pool of money to cover your future needs.

This article is the first of several articles to help us understand the importance of saving now and how much we need to save each year in order to provide us with the lifestyle we want when we reach that golden age of retirement.  I am breaking this topic into several blog articles so that I can concentrate on different age brackets in each article.  This first article will deal with those of you in the 20 to 30 age bracket and future articles will cover the 30 to 40 age group and so forth.

If you are in the 20 to 30 age group, the best thing you have going for you is the value your youth has when it comes to the compounding of the money you save and the many years you have before you will need this money for its intended purpose of providing you a lifestyle you want when you retire. While the simplistic answer to this issue is you need to save money every year, the real question needs to be how much do I need to save now when I have no idea what I will need to live on in 40 or 50 or more years from now.

My approach is to take a look at different levels of income as a starting point and deal with what each level of income means to our lifestyle today.  I also tried to take into consideration how much of what is earned is really available for your lifestyle today after taking out what you pay in taxes for federal and state income tax, social security and Medicare taxes.  This leaves you with what you have to spend each month for food, clothing, shelter, etc.  For my calculations I have assumed each person is single and living on that one income.

So let’s start with someone who has an annual income of $20,000 today.  When you take out all the taxes, you have about $16,600 to meet your expenses. This may not be enough to enable you to live alone, so you may be living at home or sharing an apartment with one or more individuals.  But today that is what you have.  As you go forward, you should have an expectation that this amount of income will increase as you grow in your job, get more education, and even get some help with inflation (I used 3% annual inflation for my calculations).  I also assumed that when you retire there will be some program similar to today’s social security that will provide a safety net of income to you.  For these calculations, I assumed that the benefits you will receive will be based on what the current social security system provides using the income you earn adjusted for inflation.  These benefits will be enough to cover about 27% of the estimated living expenses when you are retired at the lower end of incomes and it drops as you earn/spend more.

In order to provide meaningful answers on how much to save, I also have to consider how long will you live.  While none of us know that answer as it is out of our control, we do know that we want to have enough money available to us to cover us for all the years we do live.  Each year more people are living to the age of 100 or more, perhaps you will be one of them!  Should that occur, we want to be sure that we have enough money to cover what it will cost us to live in our later years.

Lastly, I have assumed that the only money (other than social security) you will have will be from what you save out of your earnings rather than from your employer providing a pension or a contribution to some savings program. So let’s look at some results under several different scenarios.  If you have gross earnings today of $20,000 per year (net spendable income of $16,600 per year), and you saved $1,000 each year for the rest of your working life until you retire at age 66, and you earned 7.5% annually for all those years, your money would last you until about age 80.  If you increased the savings amount to $2,000 each year, the money would last you until age 100. Achieving a 7.5% return each year may seem rather aggressive to many people in today’s environment (that is a topic for some other time), so what if the annual return on your investments was 6% going forward?  You would need to save $2,000 each year to have your money last you until age 80 and you would have to ramp it up to $3,900 each year to have it last you until age 100.

Hopefully, the vast majority of you are or will be making more than the $20,000 annually in the above example.  What changes will occur if your income was $40,000 annually today.  After we take out the taxes, you have $31,200 to cover your lifestyle.  This is not quite twice as much as the above example and that is due to higher income taxes that you owe on the higher income. Using all the same assumptions we did for the first example, we see that you need to save about $3,900 each year, earning 7.5% annually in order to reach age 100 and live the same lifestyle that you are today on the $40,000 income.  At this income level, social security would cover about 24.5% of the estimated living expenses and the balance of your needs is coming from your savings. If you save less than the $3,900 each year and earn less than the 7.5% annual return, your savings will run out much sooner.  At a 6% return and $3,000 saved each year, the money runs out at about age 75.

Some of us that are in the 20-30 age range today earn much more than $40,000 today, so what do we see if the income is at $60,000 annually today.  If we save $5,700 each year and earn 7.5% annually, our money would last us until age 100 and the social security benefit would be covering about 23% of our lifestyle.  If the return on investment was only 7%, the amount we need to save annually is $7,000 to get us to age 100.

So what should our game plan be today if we want to live a retirement lifestyle that approaches what we have today:

  1. Be sure to save each year an amount that fits the numbers shown above for the wage bracket you are in and the lifestyle you want.
  2. If your employer has a match program in a tax deferred savings program where you work, be sure to contribute enough to get that free match each and every year.  This match money helps make up the annual amount you need to be saving at no cost to you.
  3. If there is not a match at work, seriously consider opening a Roth IRA to put money into your retirement pool each year.  The earnings on this program are not taxable when you take it out after age 59 ½ under the current rules.
  4. Understand the social security rules related to your work record.  The more you make each year the higher the annual benefit will be when you retire.  This is an easy way today to improve your retirement lifestyle in small increments each year, particularly for those who are earning in the wage brackets I used in this article.
  5. On the investment side, be sure to create a diversified portfolio for the long term among stock and bond mutual funds.  Take a long term view of these investments rather than worrying about the short term ups and downs.

In my next blog, I will provide information for the next age brackets, so stay tuned.


Francis St. Onge, CFP®
Total Financial Planning, LLC
Brighton, MI

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My Future Health Care Costs

In my blog on July 12, 2011, “What The Federal Budget Dilemma Means to You”, I identified 5 things that you could do to deal with what your future retirement would be like. The second of those items dealt with what the future cost of health care would be in 20 years when we are ready to retire. This blog will deal with some of the issues we may face in the future, including between now and when we retire.

When we think of retirement and our health care, we often think about being eligible for Medicare to be our health care insurer. Sometimes when I meet with a client, the date of retirement and the date of Medicare coverage do not always coincide. In the future, those dates may even be further apart then they are today.

For instance, the other day I met with a client who wants to “retire” in about four years when she will be 62. In her mind that meant starting Social Security and having Medicare to cover her health care costs. There were several issues to get corrected in what she was thinking. The first issue was that Medicare does not start covering her until she is 65 under the rules today. Given her current age, the Medicare program probably will not change this for her, but for those who have 20 years until they retire may find that the age of Medicare coverage may increase to 67 or some higher age.

The second issue we discussed was whether she would really want to start taking her Social Security benefits at age 62 or whether she should wait until her full retirement age (FRA) of 66 to start this benefit when the monthly benefit would be about $550 (30% higher) more than what it would be at age 62.

As we discussed these issues further, it was clear to me that the desire to “retire” at age 62 was due to the stresses of her current job working full time. She was already talking about working part-time now so that she would continue to have her health care coverage through her employer versus “retiring” now. In her mind the primary issue was being able to have the health care coverage until she “retired” as her reason for even working now.

So we discussed what the impact would be if she was not working now as it relates to her health care coverage. She knew that the full cost of her health care insurance today was about $6,000 per year which is what her coverage premiums would be under the COBRA provisions if she left her job. I indicated to her that amount would be increasing by probably 15% per year going forward and that she would be looking at paying this premium for up to 7 years until she was 65.

The client, Nancy, was rather unhappy to think she might have to work until age 65 just so she could have the health coverage from her employer rather than having to use $6,000 to $12,000 per year to buy the coverage if she was not working. These amounts would be in addition to the deductible and co-pays that she would have when she needed to get health care. Fortunately Nancy is a healthy woman with no current significant health issues that require frequent visits to the doctor, pharmacy, or hospital.

These issues have caused Nancy to rethink her plans for when she will retire or at least having to continue to work part time for the next 7 years. This discussion also impacted her thoughts about when she would be starting to receive her Social Security benefits, probably waiting until age 66 to start her benefits.

Now, for those of you who are thinking that you will retire before age 65 in about 20 years. The above example will provide you with some ideas to think about related to how you will be insured if you are not working for an employer during those years between when you “retire” and when you are covered under whatever Medicare program exists at that time.

If you wanted to retire 5 years before Medicare coverage took effect and you had to pay for the insurance coverage yourself, what would you be looking at in terms of premiums? We know that health care costs are going up faster than inflation (about 3% annually). Would it be reasonable to have them go up at 6% annually or 9% or 15%? No one really knows but let’s assume the worst. Nancy’s premiums for single coverage of $6,000 would grow to $18,154 at 6% and to $85,391 at 15% annually in the twentieth year from today. If you were going to insure two lives (you and your spouse), then double these amounts. If you were going to “retire” five years before Medicare coverage was going to be in effect, then multiply these numbers by 5 to get the full amount you would need to cover this one expense.

As you plan today for your future “retirement” and you want to do it sooner than when the federal programs will be covering you, then you need to be saving an additional amount each year in order to provide the amount you need to pay for this coverage.

Based on the above numbers, if you saved an additional $3,000 per year for 20 years and earned a 6% annual return on the invested amounts, you would have enough saved to cover 5 years of health care premiums for a single person if the cost of health increased at 8% annually. Saving $7,000 more each year for that same 20 years would cover the cost of the premiums if they increased at the rate of 15% per year.

Not covered in these numbers would be your cost for Medicare coverage in 20 years. Today, a Medicare covered beneficiary has to pay about $100 per month for the Part B coverage (for physician and outpatient services) and between $96 and $169 per month for the Part D drug coverage and the supplemental coverage plus the cost of co-pay amounts for each prescription and for physician office visits. What you will have to pay for this coverage in 20 years after whatever changes are made to this program in the coming years would be pretty hard to estimate at this time. But it would be important for you to be sure to save an amount each year that you have designated as the cost of your health care going from the age of “retirement” until your demise. This would be above and beyond what you want as your lifestyle costs in retirement.


Francis St. Onge, CFP®
Total Financial Planning, LLC
Brighton, MI


What The Federal Budget Dilemma Means to You

This past week I became aware of a website that allowed me to try to balance the federal budget. I decided I would see what this was all about and actually went through the challenge of doing this. You can participate as well by going to

I won’t bore you with the options I selected, but I will share with you that I was able to reduce the total deficit from the $14 Billion starting point to about $11 Billion when I was finished. There are 11 sections to this challenge and they cover all aspects of the budget. The first set of issues deal with items that are involved in our daily activities, like health care, education, transportation, government services before moving on to the longer term aspects of the federal deficit. The longer term issues are the so called third rails that no one wants to tackle like Medicare, social security, defense, and tax rates.

Every item that you can take a stand on has a cost associated with it and provides you with pros and cons about what the impact would be for what you select in each category. As you make your selections, there is a counter that shows how well you are doing with reducing the deficit. In my case, the early selections had very little impact on the deficit and in a few cases my choices actually increased the deficit (ouch!).

As I finished up the process and realized that the selections I made had consequences  to me and every one else, I started thinking about how would I communicate the real implications to clients and others about what changes we need to make in our financial lives if my changes would become what the Congress would enact and the President would sign.

As I had suspected before I even began the exercise, the real changes to our federal budget involve long term issues more than they involve the daily cost of running the government if we are really going to reduce the federal deficit.

So here is my attempt to provide some thoughts on what each one of us needs to do going forward from today if we are to have the life we want and still retire at an age that allows us to enjoy our senior years:

  1. Address the health side of our life by eating better and getting proper exercise that keeps us healthier than what we would be by not doing these things. What this should do is reduce our need for health care in 20 or more years from now and thus save us money by not having to go to the doctor and the hospital later in life.
  2. Identify what the increased cost of health care is going to be when we reach retirement age in 20 or more years and start a savings plan now that puts dollars away in an invested account to cover those increases in cost. While we do not know what changes will occur in the Medicare program of the future, it will no doubt cost each of us more in monthly premiums, co-pays, deductibles and maybe even non-covered services.
  3. Recognize that some changes to the social security program will reduce the benefits we will receive in 20 or more years from now. This might be in a higher retirement age or lower cost of living adjustments than what current retirees are getting  each year. Once you quantify this amount, start saving additional dollars each year so that you have the right amount saved to give you the same lifestyle you would have if they did not change anything in this program.
  4. Seriously look at what you have saved today in your tax deferred accounts and see how these will grow over the next 20 or more years. Be sure to include what you plan to save each year going forward, determine what you anticipate the investments to grow by based on how you have your money invested. If these amounts are not what you think you need, then you need to add to your current savings rate an amount that will get you to your desired level of savings at retirement in 20 or more years from now.
  5. Get a better understanding of how the tax laws impact what your tax liability will be when you retire and have pension, social security and withdrawals from your savings as the income that is on your tax return. The education will help you immensely in understanding whether you are saving money in the right buckets for the next 20 or more years. I can tell you from my experience as a financial planner and tax preparer, the results are totally under your control now – you do not need to wait until you reach retirement age to try and change the tax return to your advantage.

In each instance above, you will notice that I suggested you need to be thinking 20 or more years ahead as to what the consequences of your actions today will do to your retirement. This is very important to appreciate because the way you live today from a health and a financial perspective is really what is going to determine what type of life you will be living in 20 or more years when you are ready to enjoy the fruits of your labors.

While some of the above suggestions require the calculation of information that may require a financial professional to assist you, look at that as an investment in your retirement future and money well spent. The knowledge you gain from this exercise today will be significant in helping you to understand how you need to fine tune what you are doing now that will repay you immensely when you reach those retirement years in 20 or more years.

As a closing thought that I hope will bring this all together, in 1983 Congress changed the social security law in several ways. Those changes had little impact on the retirees at that time, but they had a tremendous impact on anyone who has retired in the past 20 years and everyone who will be retiring in the future. We have had this under our control for almost 30 years and yet most of the new clients I meet are looking at their retirement for the first time after saving money for 20 years with no idea if that was the right amount to save, have no idea of what their social security benefits will be in a few years, and have no idea how the tax laws are going to affect them when they go from earning a wage to living off their savings and benefits for the rest of their lives.


Francis St. Onge, CFP®
Total Financial Planning, LLC
Brighton, MI


Mom’s Personal Finance Course

Medical BillsMy mother is taking a crash course in personal finance. Not that she really wants to take the course. In fact, she doesn’t like it much. Unfortunately, she does not have much choice. Here’s what happened.

My parents grew up during a time when the roles of husband and wife were pretty well defined. He had his jobs. She had hers. Neither paid too much attention to the domain of the other. Seemed to work reasonably well, albeit with some of the difficulties inherent in such a strict division of labor. Turns out, their all-too-common arrangement did not serve them as well as they thought.

Earlier this year my father passed away after a battle with cancer. Thankfully, his battle was not overly-long. Not so thankfully, the full impact of my parent’s division of duties came crashing in on my mother. Now, she has to take responsibility for all my father’s duties, while at the same time maintaining her own. Mom’s pretty resourceful, but there are a few areas where she just feels completely out of her comfort zone. The biggest, and most significant of those areas is her finances.

Let me provide one example, along with some resources that may be helpful in your own situation.

Most seniors wind up working with Medicare to handle a large portion of their medical expenses. My mother is no different. Unfortunately, Medicare is not always the easiest to work with. There can be a maze of paperwork and hoops to jump through. Do something wrong, and you may find yourself in bureaucratic limbo. When you’re not used to managing financial matters, and you are still grieving over the loss of your partner, handling these issues can get overwhelming. Mom was overwhelmed.

Medical bills kept mounting. Claims were denied. Appeals had to be filed. The phone started ringing from providers that wanted their money. Calls had to be made to attending physicians to get necessary forms completed. Just navigating through the various departments in Medicare got to be a major chore.

Thankfully, my mother’s son is a financial planner, and I have been able to provide some help and guidance. It got me thinking though, about what Medicare-related resources are available to help other people.

One of the first things to know is Medicare has a website, and it’s a pretty good one: has a lot of useful information. One indispensible reference is Medicare and You. This is a very good place to start when you are trying to determine what benefits you may have. If you want a more personalized version of your benefits, create an account on Once your account is created, you can see your benefits, check on claims, take a look at medical providers, and see services that are available to you. Among the other information available on the site is a good listing of nursing homes, hospitals and doctors in your area. 

Not everything can be handled via the website, and you may just want to talk with someone. The Medicare help line number is 1-800-MEDICARE (1-800-633-4227). You can order Medicare publications, listen to recorded questions and answers, as well as talk with someone about your Medicare questions.

Medicare has an ombudsman’s office where you can request help with a claim or make a complaint about how something has been handled. You can use either the website or 800 number listed above to contact that office. 

Sometimes you may need extra help in getting a claim handled. That’s where a patient advocate may come in handy. Patient advocates can help address issues related to health care, medical debts, insurance claims and similar concerns. Many states and hospitals have patient advocates. There is also a national Patient Advocate Foundation that may be able to provide help. You can contact them on the web at or by phone at 1-800-532-5274.

From time-to-time, I will probably highlight some other parts of my mother’s financial journey. For now, may I make a suggestion? Regardless of what you have decided about the best ways to divide your household responsibilities, please work together on your finances. Both partners ought to have a working knowledge of household expenses, savings and investments, insurance, legal documents (such as your will), credit and loan accounts, and how much money you have to work with. It’s a great idea to have all this information in one location that both of you can easily access. It’s also a good practice to talk about your financial situation. This way, in the event one of you becomes incapacitated, or is no longer around, the other won’t be left to wonder about what to do.

Michael Snowdon Michael Snowdon, CFP®
Greenwood Village, CO