What if Health Ruins Your Retirement Plans?

Video Chapters & Transcript:

Well, howdy folks. Thank you once again. Uh, and welcome to uh Smarter Smarter Money Matters. Uh, you’re here, of course, with uh me, your wealth, Dr. Jeff Camarda, along with Anna Wonderlick, our super CFP, and we’re talking about, you know, an uncomfortable but important topic. Uh, Wall Street Journal headline was, “My wife and I planned our retirement perfectly and then she got sick.” And Anna, she didn’t just get sick, she got really sick, right? Yeah. So tell me what the fact pattern, you know, of the sad story was and what the, you know, what we can learn from it. Yeah. So this article was written by a editor and and writer with the Wall Street Journal. He’d been there for over 30 years, had retired. Um he and his wife, you know, he thinks he’s the financial expert. They’ve planned and mapped out this retirement, right, and what they wanted to do. And then pretty soon after they pulled the, you know, pulled the trigger, they retired, um, she found out that she had Alzheimer’s. And so it really changed the trajectory of their retirement. And, um, he talks a lot about, you know, how they plan. They planned for all these trips and travel and, you know, they’re just that’s not what retirement really looks like for them. And so what’s happened you know obviously you know you have financial considerations his you know freedom has been significantly truncated I’m sure you know that it’s very frustrating and and depressing you know so let’s get some more into it. Yeah. So I mean one thing that he mentioned in particular, right? And really he just goes into detail talking about caretaking, right? He had never really thought about that aspect of retirement, right? They had thought about all the positives. Um and he talks a lot about, you know, how he cares for his wife, how it really is a full-time job, right? Take caring for her. and he really goes into detail um about, you know, what their days look like and and he, you know, they have active days, they’re visiting with friends, they’re volunteering. Uh but it just is different because he has to do all of that, which is what they wanted to do with their time, but he’s also again doing everything for her. Yeah. In fact, quoting from the article, he says, you know, my part, you know, caring for my wife Karen is an honor. You know, a chance to keep the promise I made 50 years ago, which is touching. But he says, “That’s what my heart tells me.” But inside I’m going, “My god, am I going to be able to do this?” He says, “Fatigue is far and away my biggest problem. I’m always tired primarily from helping Carrie navigate each day, but also from losing sleep over what lies ahead, you know, and uh and now and how quickly will her symptoms worsen, what’s going on, obviously, he’s bearing, you know, a lot of emotional and uh and stress burdens.” and uh um and he’s he’s been able to keep her, you know, do be the primary caretaker, keep her in the home, which is what he wants to do, but he even discusses in the article at some point if she has to go into assisted living or they have to bring on a full-time caretaker. That’s something that he didn’t plan for in retirement when he was he as a Wall Street Journal writer that this is what he does and talks about all the time didn’t plan for this to to happen. Um especially so soon in retirement, right? Um and he talks about the impacts and the concerns. If he withdraws a lot in the first few years of their retirement to cover these expenses, how is that going to impact him later on? True. And then that’s really the critical financial lesson here is, you know, as you you you metriculate through retirement. Typically, there are three phases, right? There’s the active phase. We’re going to travel. We’re going to go Italy. We’re going to take the RV, whatever. We’re going to go to Burning Man, whatever you’re going to do. The second is we’re going to there’s a sedendary period, stay at home, watch TV, hang out. And then there the the final period, you know, requires significant health care and sometimes long-term care. And if you don’t model that, and again, when we do complicated retirement plans, you know, we look at those three phases of life and try to assess the risk, whether you buy long-term care insurance or not, which is really expensive, and I’m not still not sure it’s a good deal. The rules keep changing. Premiums always will go up. They’re not fixed. I mean, there’s a lot of hair on that. but to have some financial, you know, uh um vision of what if this happens and what bucket of money is going to pay for it. And I can tell you the emotional, you know, um damage is uh is significant. We’re going through this. My mother-in-law, Arlene, who I think is 92, 93 years old. Uh and we’re fortunate that we’re able to move her in with us, and we’ve got some caregivers there at the house, but Kim is obviously her mother. Um, and it’s a real roller coaster. Had a great day last night. A hugger. You’re such a good girl. She’s reading in bed. And today she blew up. I mean, just really blew up. And uh you saw Kim when she came in for the board meeting. You know, she was distraught. Um and that and the financial, you know, burden in in this case because of her social security and some other stuff she’s eligible for is fairly modest. But if you this poor guy not having planned the money to pay for it and being the primary caregiver, you know, an emotional support system for her and the family is just devastating. So, what lessons did you draw from reading the article, Anna? Yeah. Um, some things I drew that that I made me think, right? because sitting in my seat um we’re talking about the future. You know, we’re almost encouraging save as much as you can, but an article like this makes you think, you know, there’s a balance, right? You want to save for the future and be set up, but you also want to enjoy the here and now as much as you can. Um again, he he mentioned in particular they had a good few travel years. I think like three or four years where they were able to travel, but they had planned, okay, let’s you know, cut back in these our earning years. so then when we retire we can take all these bucket list trips and they just weren’t able to do it. And so, you know, again, now he’s got a bucket of a different sort. Yes. Yeah. Exactly. So, I think maybe, you know, he would have done things a little bit differently. Um, and this is probably why he took the time to write the article, you know, would have done more of those experiences when they were in good health and maybe worked a little bit longer to, you know, balance it out. sad story but a but but a very common you know story and you know we see it all the time in our work as you know our clients age and and help to counsel them and their and their children to get them through it. But the lesson is you know all of you and we all have this risk all of us um is to you know to have a plan B for what if this happens what are the resources what changes and and make sure your financial and retirement plan addresses this you know and as we talked about in the last episode most retirement plans really don’t they’re just kind of you know they they most people don’t have retirement they think they do they’ve got a slick sales presentation somebody from the bank or brokerage gave them in many cases, but it really doesn’t map out all these potential scenarios down the road, you know, with a robust cash flow analysis that kind of looks at where I’m going to be each year. What if this happens, what if that happens, how much money is here, you know, and so forth. It’s really complicated to do it properly. Most people don’t, but the results, like this guy, he’s a financial editor for the Wall Street Journal, and he thought he had it under control, and his financial plan just blew up right in his face. Most unfortunate. Please learn from it. um you know consider this and if you’re not getting really really sophisticated rigorous retirement planning advice and I’m projections with tables and this and different scenarios you know please make sure you have your advisor um if they’re able but if they’re up to it do that and if not maybe get somebody else and you those of you that are Kamarta clients which of course is our our primary audience and and interest in serving you know you have that resource from us constantly a whole quarter of the year our planning calendar is devoted to retirement plan in Q2. So, please make sure that you avail yourself of refined professionals like Anna and Lou and the others, you know, to get that mapped out, you know, so you know where you’re going. And on that bittersweet note, thank you so much for watching. Until next time, this is Dr. Jeff Camarda with our super CF and a wonder. Thanks so much for watching. Bye-bye.