This document discusses lifestyle planning and factors that can affect one's lifestyle in retirement. It notes that healthcare costs are a top concern for retirees. Common sources of retirement income like Social Security may not keep up with rising healthcare premiums and costs. The document then outlines programs like Medicare and Medicaid that help cover healthcare costs. It emphasizes the importance of planning and limiting taxes to afford healthcare in retirement, as taxes can reduce one's standard of living. Various strategies are presented to reduce taxes and leverage resources like long-term care insurance that can help cover costs and keep income from being taxed.

1. Lifestyle
Planning
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2. Goal of Jester Financial
1. Focuses on YOUR goals for today
2. Prepares YOU for your goals of tomorrow
What is Lifestyle Planning?

3. Goal of Jester Financial
1. Housing
2. Leisure and Recreation
3. Transportation and Communication
4. Miscellaneous Goods and Services
5. Food and Beverages
6. Education
7. Clothing and Footwear
What’s YOUR Lifestyle?

4. 17%
1%
13%
11%
15%
2%
8%
Miscellaneous Goods & Services
Education
Leisure & Recreation
Transportation & Communication
Housing
Clothing & Footwear
Food & Beverages
The breakdown
Credit Suisse Euro Monitor
Average Lifestyle Expenditures
over the age of 60

5. What’s different about your
Lifestyle?
• Education?
• Housing?
• Clothing?
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6. What can effect your Lifestyle?
1. Interest Rates (Rate of Return)
2. Investment (Market Volatility)
3. Family (Help) Emergencies
4. Taxes
5. Healthcare
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7. The breakdown
Credit Suisse Euro Monitor
Something was Missing?
17%
1%
13%
11%
33%
15%
2%
8%
Miscellaneous Goods &
Services
Education
Leisure & Recreation
Transportation &
Communication
Health Goods & Services
Housing
Clothing & Footwear
Food & Beverages

8. The Facts

9. Goal of Jester Financial
“My ability to afford retirement, including post-retirement
health care” Deloitte Survey, 83% of respondents
“52% of workers have little or no confidence that they will
have enough money to pay for medical expenses in
retirement” ERBI 2013 confidence survey
“What concerns you?”
Employee Concerns

10. The FactsGallup survey, May 2013
Sources of expected income in retirement

11. Common Chacteristic?
Most are taxable sources of income

12. Health Care Programs
Medicare
Part A-Hospitalization coverage
Part B-Doctors, Lab and X-ray
Part C-Medicare Advantage Plans
Part D-Prescription Drug Coverage
Supplemental Coverage-Medi-Gap
“Since 2000, Social Security’s annual COLA has resulted in a cumulative benefit increase of about
36%, significantly less than the Part B premium growth of close to 120%.”*
Medicaid
Coverage for medical costs and long term care costs, provided to low
income individuals and those with little or no assets.
*congressional research service, June 11, 2013
Retiree Health Care Programs

13. Taxes
Taxes take away from your net spendable dollars in retirement,
leaving you with the potential for a lower standard of living.
Planning for or limiting the exposure to taxes enables families to better
afford expected and unexpected health care costs in retirement.
•The tax which has the potential to cost the most is also unknown to the
majority of people; Medicare means testing
•Taking income that subjects you to taxes on your social security
•The most overlooked opportunity to save taxes is the medical expense
deduction. It has a floor of 10%, meaning that the first 10% of medical
expenses as a percentage of your adjusted gross income cannot be
deducted.
By our estimates it is a $100 billion annual lost opportunity for those over
the age of 65.
Taxes

14. Income that triggers taxes
Modified adjusted gross income
(MAGI)
Income that triggers taxes

15. What is not Income (MAGI)
Current Solutions to Taxation
1. Health Savings Account (HSA’s) distributions*
2. VEBA distributions*
3. 401(h) plan distributions*
4. Long Term Care Planning-(Access to Care)
5. Critical Illness Insurance-(Access to Care)
6. Roth 401(k)/IRA’s/Sep’s distributions
7. Properly structured loans and withdrawals from life insurance policies
8. Reverse Mortgage Payments
9. Some Annuity Payments (SPIA, Long Term Care qualified or
longevity)
* Must be for qualified health care expenses otherwise penalties may apply
What is not considered Income(MAGI)

16. What is not Income (MAGI)
What happens when a parent gets sick?
Possible Solutions for Parents & Grandparents
1. Life insurance policies
2. Long Term Care Planning Solutions
3. Reverse Mortgage Payments
4. Annuities with Long Term Care Benefit
5. Longevity Annuities
Sandwich Generation

17. Medicare Means Testing
Income Part B (monthly) Part D (monthly)
Individuals MAGI
$85,000 < Premium of $104.90 Premium (varies)
$85,001 To $107,000 Premium + $42.00=$146.90 Premium + $11.60
$107,001 to $160,000 Premium + 104.90=$209.80 Premium + $29.90
$160,001 to $214,000 Premium + 167.80=$272.70 Premium + $48.10
Over $214,000 Premium + $230.80=$335.70 Premium + $66.40
For Couples the MAGI bracket is twice the amount with corresponding
increases based on total income.
Monthly Medicare premiums for 2013

18. Planning Solutions
Your income in retirement is going
to impact your income in
retirement!
What you don’t know will hurt you!