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Five Money Moves

Dennis Friedman, 1:37 am ET

WHEN FOLKS TALK about their best financial decisions, they’ll often mention the investments they bought. But my list is quite different. Here are the five best money moves I’ve made during my dozen years in retirement:

1. Updating my estate plan. When I was my mother’s primary caregiver, she was the major beneficiary of my estate. If something happened to me, I wanted to make sure she could afford the care she needed.

My mother passed away in 2019. I was married in 2020. Afterward, I updated my living trust and changed the beneficiaries on all my retirement accounts. My wife is now financially secure if I should pass away before her. If I didn’t take these actions, it would have been a failure to fulfill my moral and financial obligation to my wife.

2. Consolidating financial accounts. If I was to give my wife a nickname, it would be JIT. My wife likes to buy things just-in-time—only when they’re needed. She also doesn’t like clutter. She likes her life orderly and easily understood.

In 2020, I consolidated all my financial accounts. I now have 95% of my money at Vanguard Group and the rest at a local credit union. My finances are now simple and transparent, which is just the way my wife likes her life. My heirs will have fewer accounts to deal with when I’m gone.

3. Choosing traditional Medicare. If you live long enough, you’re probably going to have a health scare. I’ve had two of them since I retired. The unknown is what’s so frightening about them. Not knowing what’s wrong with your failing body can turn your world upside down.

One good thing about traditional Medicare is that you don’t need approval for tests or to see a specialist. You can cut through the red tape and other nonsense to get to the root of your health problem fairly quickly. When my specialist recommended a CT scan, I made an appointment for the test before I left his office. I got a CT scan three days later. If I had Medicare Advantage, I’d probably still be waiting on the referral.

If you can afford the higher costs associated with traditional Medicare and a Medigap policy, they can expedite your medical care and put your world back together faster.

4. Delaying Social Security to age 70. The main reason I took my Social Security benefit at 70 is because it gives me a peace of mind. I wanted to make sure my wife and I are financially secure in our later years. If I should die before her, my larger check should cover her basic living expenses.

5. Taking a trip to La Jolla. After my wife and I got our COVID-19 vaccination shots in March 2021, we went on a weekend trip to La Jolla, California. We stayed at a hotel and ate at a good restaurant. It was a welcome break amid our long struggle with the pandemic.

The $400 we spent on this trip provided an emotional boost we truly needed. The change of scenery gave us a necessary reprieve from COVID-19. It was some of the best money I’ve spent in retirement.

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Steve Spinella
Steve Spinella
4 months ago

I originally chose a medicare advantage plan (Aetna PPO) when I turned 65 last year, but when I had health needs I discovered that they had not fully disclosed requirements for pre-authorization of procedures (even though it was a PPO) and that they are quick to deny authorization, leading to drawn out appeals at best or simply the unavailability of required care.* This works for them because it encourages sick people to leave their plans and healthy people to keep signing up. It also leads to negative expense reimbursement experiences for the government with these plans. I therefore saw the wisdom of signing up for medicare and a supplement, and did so without penalties of any kind. *I read one place that 80% of denied claims are overturned on appeal, but of course many people find appeal daunting or even impossible, and may even go without required medical care or may receive inferior medical care.

mytimetotravel
mytimetotravel
4 months ago
Reply to  Steve Spinella

Situations in which you can sign up for Medigap without the possibility of medical underwriting: https://www.medicare.gov/supplements-other-insurance/when-can-i-buy-medigap/guaranteed-issue-rights

Note that one of them is within a year of first signing up for Medicare.

mytimetotravel
mytimetotravel
4 months ago

I, too, have consolidated at Vanguard, and I, too, have original Medicare and Medigap. I started with UnitedHealth Plan F, but was able to switch to Plan G during a period when Humana wasn’t requiring medical underwriting. People starting with Medicare Advantage should be aware that they may not be able to afford to switch later.

I was recently able to get a second opinion from a specialist of my choice with no hassle.

UofODuck
UofODuck
4 months ago

Totally agree with your views on La Jolla, or Santa Barbara if you decide to head north. I likewise agree with your sentiments about traditional Medicare.

The best financial decision I made was to stop trying to pick individual stocks and instead focus on low cost ETF’s. I sleep better and my performance has been more than satisfactory.

Henry Hoyle
Henry Hoyle
4 months ago

Most Medicare Advantage plans are HMOs, which require referrals to see specialists, but NOT all. We are in a Medicare Advantage plan in Northern Virginia, which is not an HMO, and does not require referrals, and worked great through a serious illness that required seeing a number of specialists and having several surgeries.

Rick Connor
Rick Connor
4 months ago

Thanks for thoughtful article Dennis. I’m 8 months away form choosing Medicare plans, and your thoughts have been helpful. Stay well.

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