March 17, 2025 • 7 mins
We welcome Dan Lauraine from Drake and Associates for a Talk of the Town on some of the hidden costs of retirement.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is Talk of the Town on news Radio with
thirteen hundred and one oh six nine FM. It's Steve
Kelly and Brett Pikita from West Michigan's Morning News Here
with Dan, The Rain with Drake and Associates, and the
Retirement Ready radio show you hear Saturdays on Wood Radio. Dan,
thanks for doing this again today.
Speaker 2 (00:16):
Thank you guys for having me. I appreciate it.
Speaker 1 (00:18):
Let's talk a little bit about some of the hidden
costs that people may face in retirement. Where do we start?
Speaker 2 (00:24):
Yeah, I think you know, when people are thinking about
their retirement spending needs, typically they'll say they need seventy
to eighty percent of their pre retirement income. But that's,
you know, kind of underestimating the overall spending needs that
could happen throughout the retirement. Part of that's because of longevity.
You know, people are living longer today, more than ever before.
For example, a healthy sixty five year old may need
(00:46):
to fund thirty or more years of retirement. And when
you look at some research from Fidelity, it showed a
retired couple they're going to need probably about three hundred
and thirty thousand dollars for lifetime medical expenses. Over the
thirty years, so not all in one year, but it
can add up. On top of that, you got to
look at the cost of a potential long term care event,
(01:08):
which is you know, anywhere from two hundred and fifty
to five hundred thousand dollars if there's an event where
you need something like that. So many retirees, you know,
don't have that kind of long term care insurance. There's
a seventy percent chance they may need some of that care.
And then also you've got that thing called inflation that
erodes that a purchusing power over time, which is going
to cut into that retirement savings.
Speaker 3 (01:28):
And that's where I want to go Dan, because we
just did this recently with my father in law, and
you know, there's sticker shock. I think when it's your
first parent you put into assisted senior living or whatever,
and you're like, holy moly. And but my point being
is I see it similar to college education in the
fact of do you guys have statistics is it growing
(01:50):
like that where you know, we look at now Steve's
kids went through my kids as far as how much
a year of college cost depending on the college. Same
thing with senior living, depending on what they want as
far as amenities. Is it going up like that though?
I mean, should we prepare ourselves for that much of
an increase?
Speaker 2 (02:06):
Yeah? I mean it depends on where you're looking for
the statistics on that, but typically you're seeing anywhere from
three to seven percent increase on the long term care
costs year by year. Wow, you know so? I mean
and depending on Obviously it's a lot lower cost if
you're doing home care and then the assistan of living
care is another chunk. But if you go fullbloer nursing care,
you're looking at ten twelve thousand dollars a month in expenses.
Speaker 1 (02:29):
Yeah, and if you're using the house to sell for
a little of that, you're getting a little more for
the house.
Speaker 3 (02:34):
That's true.
Speaker 1 (02:35):
Yeah, difference treat my mother in law and my mother's
three years and your numbers are spot on. We're talking
to Dan Lorraine. The show's called Retirement Ready Radio Show.
You'll here at Saturdays at seven on Wood Radio and
you can call for more information to Drake at Associates
six six, six hundred seventy two forty seven. What age
do most people start receiving their Social Security benefits? I
(02:57):
know there's some some variation here.
Speaker 2 (02:59):
There is, And you know, that's a really good question.
I would say, for as long as it's been an option,
that social security earliest age they can claim is sixty two.
That's always been the most popular. You know, In some years,
more than half of those eligible to apply a sixty
two do so and start receiving benefits. Over the last
twenty years, that numbers slowly falling as people are starting
(03:20):
to get smarter about how to approach maximizing those soci
Security benefits. You know, I like to, you know, try
and coach the families we serve by looking at that
as a pot of money and not just an income stream.
And when you think about it as a pot of money,
you know, the longer you delay taking SOB security, the
bigger that pot of money grows. So there's a lot
of different variables to take into account when you start
(03:41):
drawing SO security. When do you need it from an
income stream? You know, how does that fit into your
overall retirement plan? But if you can delay it and
let that increase, you know, happen, most people are going
to benefit from that if they can do so.
Speaker 3 (03:53):
Do you see dan people in a married situation let's say,
like Steven say to you, you know they're thinking about
that they're getting close that one of them when they
if they're similar in age, one of them reaches sixty two,
that one of them takes it and the other one
drives to delay.
Speaker 2 (04:09):
Yeah, I mean often you'll see a staggering effect like that.
And we have some software that we use to help
kind of put the numbers in and calculate, like what
is the best overall strategy for a retired couple to
draw sob security you want to take things into account
if they're similar in age, but also what are their benefits,
Like if one of them has a much smaller benefit
than the other, Right, the longer you delay that one
(04:30):
with the higher benefit, the better overall retirement they could have.
Plus you got to start thinking about survivor benefits because
when one of the spouses passed, the higher of the
two so security incomes get to remain. So the longer
you can let that higher benefit grow and maybe maximize
that out and draw that maybe later on at seventy Now,
all of a sudden, the big picture of retirements can
(04:50):
be better for them while they're living together, and then
for the surviving spouse after that.
Speaker 1 (04:54):
It makes perfect sense. Yeah, why you're you and me?
It's Dan in the ring with dra and Associates again
the Retirement Ready Radio show Saturdays on wood Radio six
one six six hundred seven too for seven. With all
the volatility in the markets, what a couple of weeks
we've had, what can people do to make sure that
they're making the right decisions with their investments?
Speaker 2 (05:16):
Yeah, that's a really good question, and it has been
pretty volatile the last couple of weeks, and I think
we're in store for more volatility as we go forward,
especially with all the things that's going on in Washington.
You know, the changes that are going to be made.
I think the biggest thing that you know you try
to do when when you're dealing with this volatility is
not panic. And I think part of that starts with
(05:37):
first of all, you have to assess what your risk
comfort zone is, like, what's your comfort level? And then
how is your portfolio aligned within that level. I see
this all the time and conversations I have with couples
every day where they have a certain risk comfort zone
score and you look at their portfolio in detail, and
it might be twice as risky as what they say
they're comfortable with. So you've got to be careful that
(05:59):
you know you're not over pivoting or you're not, you know,
over your skis per se with your portfolio. The other
thing is have a plan. Have a retirement plan that
can point out and map out where you're going to
be going, so you know how your investments need to
be positioned and that can help you make better decisions.
Speaker 3 (06:16):
Here's one that I think people are very confused on.
Steve and I've talked about this. I've gone through this recently.
Like I said, with my father in law, is when
capital gains apply on a property and when they don't.
And I say that because two different sets of family. Right,
We ended up selling my father in law's condo and
there was no capital gains because that was his homestead,
(06:37):
that's where he was. On the other side, I have
my mother and she's got two different properties besides her
main property in Rockford. So if one of those properties,
let's say in Florida or a cottage up north, is sold,
whole different animal.
Speaker 2 (06:50):
Right. Absolutely, I mean, typically you know, to keep things simple.
If it's your primary residence, you're typically not going to
make capital gains on that when you sell it and
buy another home.
Speaker 3 (06:59):
Even if it was it's like your father in laws
or your mother in law, you're selling it for them, right,
You're saying because he was going into assisted living, because
he's the owner, he's.
Speaker 2 (07:07):
The one receiving it, you're helping with the transaction, absolutely correct,
you know. And if it's a if it's a rental
property or a second home, then typically there is no
you know, ExM exemption from the capital gains tax there
unless they were to take the proceeds from that and
put it into another piece of property. Got it.
Speaker 1 (07:26):
That's why you need a professional yep, like our friends
with Drake and associates, Dan Lorraine. The show is called
Retirement Ready Radio Show. You may hear it on Wood
Radio or call to find out more information and set
up an appointment. Six one six six hundred seventy two
forty seven Again six one, six six hundred seventy two
forty seven, Dan Lorraine, thanks for your time today.
Speaker 2 (07:47):
Guys, thanks for having me on. I appreciate it. Everybody,
have a wonderful day.
Speaker 1 (07:50):
This is Talk of the Town on Wood Radio.
This is Talk of the Town on news Radio with
thirteen hundred and one oh six nine FM. It's Steve
Kelly and Brett Pikita from West Michigan's Morning News Here
with Dan, The Rain with Drake and Associates, and the
Retirement Ready radio show you hear Saturdays on Wood Radio. Dan,
thanks for doing this again today.
Speaker 2 (00:16):
Thank you guys for having me. I appreciate it.
Speaker 1 (00:18):
Let's talk a little bit about some of the hidden
costs that people may face in retirement. Where do we start?
Speaker 2 (00:24):
Yeah, I think you know, when people are thinking about
their retirement spending needs, typically they'll say they need seventy
to eighty percent of their pre retirement income. But that's,
you know, kind of underestimating the overall spending needs that
could happen throughout the retirement. Part of that's because of longevity.
You know, people are living longer today, more than ever before.
For example, a healthy sixty five year old may need
(00:46):
to fund thirty or more years of retirement. And when
you look at some research from Fidelity, it showed a
retired couple they're going to need probably about three hundred
and thirty thousand dollars for lifetime medical expenses. Over the
thirty years, so not all in one year, but it
can add up. On top of that, you got to
look at the cost of a potential long term care event,
(01:08):
which is you know, anywhere from two hundred and fifty
to five hundred thousand dollars if there's an event where
you need something like that. So many retirees, you know,
don't have that kind of long term care insurance. There's
a seventy percent chance they may need some of that care.
And then also you've got that thing called inflation that
erodes that a purchusing power over time, which is going
to cut into that retirement savings.
Speaker 3 (01:28):
And that's where I want to go Dan, because we
just did this recently with my father in law, and
you know, there's sticker shock. I think when it's your
first parent you put into assisted senior living or whatever,
and you're like, holy moly. And but my point being
is I see it similar to college education in the
fact of do you guys have statistics is it growing
(01:50):
like that where you know, we look at now Steve's
kids went through my kids as far as how much
a year of college cost depending on the college. Same
thing with senior living, depending on what they want as
far as amenities. Is it going up like that though?
I mean, should we prepare ourselves for that much of
an increase?
Speaker 2 (02:06):
Yeah? I mean it depends on where you're looking for
the statistics on that, but typically you're seeing anywhere from
three to seven percent increase on the long term care
costs year by year. Wow, you know so? I mean
and depending on Obviously it's a lot lower cost if
you're doing home care and then the assistan of living
care is another chunk. But if you go fullbloer nursing care,
you're looking at ten twelve thousand dollars a month in expenses.
Speaker 1 (02:29):
Yeah, and if you're using the house to sell for
a little of that, you're getting a little more for
the house.
Speaker 3 (02:34):
That's true.
Speaker 1 (02:35):
Yeah, difference treat my mother in law and my mother's
three years and your numbers are spot on. We're talking
to Dan Lorraine. The show's called Retirement Ready Radio Show.
You'll here at Saturdays at seven on Wood Radio and
you can call for more information to Drake at Associates
six six, six hundred seventy two forty seven. What age
do most people start receiving their Social Security benefits? I
(02:57):
know there's some some variation here.
Speaker 2 (02:59):
There is, And you know, that's a really good question.
I would say, for as long as it's been an option,
that social security earliest age they can claim is sixty two.
That's always been the most popular. You know, In some years,
more than half of those eligible to apply a sixty
two do so and start receiving benefits. Over the last
twenty years, that numbers slowly falling as people are starting
(03:20):
to get smarter about how to approach maximizing those soci
Security benefits. You know, I like to, you know, try
and coach the families we serve by looking at that
as a pot of money and not just an income stream.
And when you think about it as a pot of money,
you know, the longer you delay taking SOB security, the
bigger that pot of money grows. So there's a lot
of different variables to take into account when you start
(03:41):
drawing SO security. When do you need it from an
income stream? You know, how does that fit into your
overall retirement plan? But if you can delay it and
let that increase, you know, happen, most people are going
to benefit from that if they can do so.
Speaker 3 (03:53):
Do you see dan people in a married situation let's say,
like Steven say to you, you know they're thinking about
that they're getting close that one of them when they
if they're similar in age, one of them reaches sixty two,
that one of them takes it and the other one
drives to delay.
Speaker 2 (04:09):
Yeah, I mean often you'll see a staggering effect like that.
And we have some software that we use to help
kind of put the numbers in and calculate, like what
is the best overall strategy for a retired couple to
draw sob security you want to take things into account
if they're similar in age, but also what are their benefits,
Like if one of them has a much smaller benefit
than the other, Right, the longer you delay that one
(04:30):
with the higher benefit, the better overall retirement they could have.
Plus you got to start thinking about survivor benefits because
when one of the spouses passed, the higher of the
two so security incomes get to remain. So the longer
you can let that higher benefit grow and maybe maximize
that out and draw that maybe later on at seventy Now,
all of a sudden, the big picture of retirements can
(04:50):
be better for them while they're living together, and then
for the surviving spouse after that.
Speaker 1 (04:54):
It makes perfect sense. Yeah, why you're you and me?
It's Dan in the ring with dra and Associates again
the Retirement Ready Radio show Saturdays on wood Radio six
one six six hundred seven too for seven. With all
the volatility in the markets, what a couple of weeks
we've had, what can people do to make sure that
they're making the right decisions with their investments?
Speaker 2 (05:16):
Yeah, that's a really good question, and it has been
pretty volatile the last couple of weeks, and I think
we're in store for more volatility as we go forward,
especially with all the things that's going on in Washington.
You know, the changes that are going to be made.
I think the biggest thing that you know you try
to do when when you're dealing with this volatility is
not panic. And I think part of that starts with
(05:37):
first of all, you have to assess what your risk
comfort zone is, like, what's your comfort level? And then
how is your portfolio aligned within that level. I see
this all the time and conversations I have with couples
every day where they have a certain risk comfort zone
score and you look at their portfolio in detail, and
it might be twice as risky as what they say
they're comfortable with. So you've got to be careful that
(05:59):
you know you're not over pivoting or you're not, you know,
over your skis per se with your portfolio. The other
thing is have a plan. Have a retirement plan that
can point out and map out where you're going to
be going, so you know how your investments need to
be positioned and that can help you make better decisions.
Speaker 3 (06:16):
Here's one that I think people are very confused on.
Steve and I've talked about this. I've gone through this recently.
Like I said, with my father in law, is when
capital gains apply on a property and when they don't.
And I say that because two different sets of family. Right,
We ended up selling my father in law's condo and
there was no capital gains because that was his homestead,
(06:37):
that's where he was. On the other side, I have
my mother and she's got two different properties besides her
main property in Rockford. So if one of those properties,
let's say in Florida or a cottage up north, is sold,
whole different animal.
Speaker 2 (06:50):
Right. Absolutely, I mean, typically you know, to keep things simple.
If it's your primary residence, you're typically not going to
make capital gains on that when you sell it and
buy another home.
Speaker 3 (06:59):
Even if it was it's like your father in laws
or your mother in law, you're selling it for them, right,
You're saying because he was going into assisted living, because
he's the owner, he's.
Speaker 2 (07:07):
The one receiving it, you're helping with the transaction, absolutely correct,
you know. And if it's a if it's a rental
property or a second home, then typically there is no
you know, ExM exemption from the capital gains tax there
unless they were to take the proceeds from that and
put it into another piece of property. Got it.
Speaker 1 (07:26):
That's why you need a professional yep, like our friends
with Drake and associates, Dan Lorraine. The show is called
Retirement Ready Radio Show. You may hear it on Wood
Radio or call to find out more information and set
up an appointment. Six one six six hundred seventy two
forty seven Again six one, six six hundred seventy two
forty seven, Dan Lorraine, thanks for your time today.
Speaker 2 (07:47):
Guys, thanks for having me on. I appreciate it. Everybody,
have a wonderful day.
Speaker 1 (07:50):
This is Talk of the Town on Wood Radio.
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