Upticks: Medicare Changes, Retirement Spending, Amish Lessons, and 401(k) Super Catch-Up
By Jake Falcon on November 14, 2024
On this episode of Upticks, Jake and Cory discuss Vanguard’s nearing settlement in a target-date fund case and what it means for investors. They also address the potential cancellation of Medicare Advantage plans and the importance of annual health plan reviews.
Jake and Cory delve into retirement spending strategies, sharing insights on legacy planning and flexible withdrawals. They explore what the Amish can teach us about economic mobility and discuss the psychological challenges of retirement.
Thank you for joining us this week! If you have a topic that you would like Jake and Cory to discuss or debate live on Upticks, please email it directly to me at luke@falconwealthadvisors.com and I’ll be sure to ask them to bring it up on the show!
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Read a summary of the conversation below:
Vanguard Settlement in Target-Date Fund Case Could Come in a Week
Jake and Cory start the episode discussing Vanguard’s nearing settlement with investors over changes to target-date funds that led to unexpected tax bills. They emphasize the importance of understanding fee structures and tax implications when investing in such products. Jake compares buying into investment products to riding in a self-driving car, highlighting the potential loss of control and potential risks involved.
Your Medicare Advantage Plan Is Being Canceled. Why It’s Not the End of the World
Jake informs listeners that up to 1.5 million people may lose their Medicare Advantage plans in 2024 as some insurance carriers exit the market. He acknowledges that affected individuals can opt into another plan or revert to traditional Medicare. Jake and Cory stress the importance of annual health plan reviews and utilizing resources like the State Health Insurance Assistance Program for guidance.
We Need to Talk About Your Retirement ‘Spending’
Cory discusses an article from Morningstar about the importance of rethinking retirement spending and legacy planning. He shares a story about a couple who received early financial support from their parents, which significantly impacted their financial trajectory. Jake and Cory highlight the benefits of flexible withdrawal strategies and the importance of planning to avoid underspending in retirement.
What the Amish Can Teach America About Economic Mobility
Jake and Cory explore an article from the Wall Street Journal on the economic success of the Amish community. They discuss the Amish’s strong community support, apprenticeship and skill development, entrepreneurial spirit, frugality, and intergenerational wealth transfer. Jake suggests that everyone should try starting a business to understand the challenges and develop a more respectful workforce.
Retire Without Regrets
Cory shares insights from a Harvard Business Review article on the psychological and emotional challenges of retirement. He highlights the importance of alignment between self and life structure, awareness, agency, and adaptability for a fulfilling retirement. Jake and Cory emphasize the impact of thoughtful preparation and planning to navigate this significant life transition.
Older Workers Can Now Supersize Their 401(k) Savings
Jake discusses new legislation allowing workers aged 60-63 to make “super catch-up” contributions to their 401(k) plans starting in 2025. He and Cory question the rationale behind the specific age range but agree that the ability to save more for retirement is beneficial. They speculate that this might be a strategy to encourage people to work longer and delay claiming Social Security benefits.
Thank you for tuning in, we hope you have a great week!
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