Healthcare and Retirement Planning; an Interview with Peter Stahl Part 2

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In Part 1 of my interview with Peter Stahl, an expert on healthcare and financial planning, and author of the book, Top of the First – The Convergence of Healthcare and Financial Planning, we talked about what should be on the checklist to best prepare for retirement.

As our interview continued, I asked Peter if there was anything else he would like to share with our readers:

I always like to leave people with some actionable ideas that they can bring to their financial planning conversations and incorporate into their discussions with their financial advisors.

First, Tax Deferred Annuities. There are ways to reduce Medicare premiums and the taxation of your health care costs, with tax controls. A non IRA tax deferred annuity can offer some great ways to shelter income from taxes, and potentially reduce the overall tax liability on your Medicare premiums.

Another thing to consider is ROTH IRAs and ROTH 401ks. ROTH’s are terrific because the income during retirement, is completely tax free. You will want to discuss the ROTH with your tax advisor as well as with your financial advisor, to make sure that it’s suitable, but the concept of creating a tax free flow from a ROTH really can be extremely beneficial in reducing your overall health care costs. The time to act on that is during your accumulation years.

And then the whole Health Savings Account world is just exploding in growth. Health savings accounts are only available with certain high deductible health insurance plans, but this is the trend in our country. If you have a health insurance plan that offers a health savings account, start to think about using that health savings account as a retirement health savings account. In other words, forgo spending from that account today and look at it with more of a long term perspective. Get those monies invested to grow and build up for future needs. The financial planning community is really recognizing the unique tax saving benefits to seeing money go into these accounts on a pre-tax basis, grow tax free and come out for health care expenses tax free.

And the other piece of this is long term care. The people that will be providing care are usually the oldest daughters, Michael, or maybe the daughter that lives the closest, generally speaking. It’s going to have a big impact on their life if they are put in a situation where they need to find 10-30 hours a week to provide custodial care. Rather than just thinking about the cost of custodial care at home or in a nursing home, recognize that putting an income plan in place with either an asset based product or a long term care insurance policy, can really reap benefits, not just to you but to the care provider, to your children, to your spouse, the ones whose lives are so impacted by providing this care.

So that’s a lot to say, but sitting down with your advisor, to talk through annuities, to talk through ROTHs, to talk through health savings accounts, to talk about tax free cash flow or custodial care needs, are all critical parts of this discussion.

What really struck me as a creative idea, we do a lot of work in the long term care area for our clients, but health savings accounts was a great twist. Many people use these accounts, but as they fund them, they immediately take the money out to pay for unreimbursed medical expenses, deductibles, etc. The idea of having these accounts grow, compound and invest over time, so that we have a bucket to pay for these costs later on in life, when our income is lower, when we’re no longer working and we’re living off of our investments and savings, I just thought was terrific.

Peter, I thank you so much for taking the time to visit with me, again. Peter Stahl, author of Top of the First – The Convergence of Healthcare and Financial Planning, certainly worthwhile for everybody whether you’re a financial advisor or a client who’s looking to make good decisions regarding their retirement.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS. Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

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