#190 – Navigating the ABCs and D of Medicare with Mary Beth Franklin

Mary Beth Franklin [00:02:10]:
Only after you ran through all of your money. So this is not money buys you choices. And if you have money earmarked, that if you need to go into some sort of facility in your later years, if you have money to pay to get into the facility of your choice where your family members can come visit you and you are going to get excellent care, that’s a much better choice than saying I have no money left. If I can get into a nursing home facility that might be 250 miles from my nearest relative, but it’s going to be paid by Medicaid, my bills are going to be paid, but it’s going to be a very basic existence.

Wes Moss [00:02:55]:
Which, again, in the confusing part here, I think that you mentioned is that Medicaid pays for a lot of assisted living, right?

Mary Beth Franklin [00:03:04]:
Assisted living, nursing home, not assisted living.

Wes Moss [00:03:06]:
Usually nursing homes, nursing homes. Nursing homes. See, this is why it’s confusing. But Medicare doesn’t pay for any nursing homes whatsoever. It doesn’t pay for assisted living.

Mary Beth Franklin [00:03:17]:
Think of Medicare. The easiest way to think of Medicare is while most of us are working, we get health insurance through our employer. When you retire, most retirees are getting Medicare through the government, through Medicare. That’s their health insurance. But it’s like everything else. Medicare has gotten very complicated over the last few years. And let’s start with the basics, A-B-C and D. At Medicare, a covers your hospitalization.

Mary Beth Franklin [00:03:49]:
It’s, quote, premium free because you paid for it your whole life through your FICA taxes. When you’re working, Medicare Part B is what covers your doctor’s bills and your outpatient services, et cetera, that has a monthly premium. This year, most people will pay roughly $175 a month for their Medicare part B premium. And if you are receiving Social Security, that Medicare Part B premium is deducted directly from your Social Security check. Depending on your income, however, you might be paying a whole lot more for that exact same Medicare part B services because of something known as Irma that you mentioned. It stands for income related monthly adjustment amount. Irma. It’s a hurricane for your health care costs and retirement.

Wes Moss [00:04:44]:
Sounds like a hurricane. Yeah.

Mary Beth Franklin [00:04:48]:
And they look at your last available tax return. So this year, 2024, Social Security and Medicare are looking at your 2022 tax returns.

Wes Moss [00:04:59]:
And if you’re single, last available. Great point, because you haven’t filed for 2023 yet. You’re always looking back two years. Okay.

Mary Beth Franklin [00:05:08]:
And so for 2024, looking at your 2022 tax return, if you’re single, and your modified adjusted gross income, which is basically your AGI, everything on your tax return, plus any tax attempt interest, if you invested in muni bonds, if that combined is $103,000 or less, you’re good. You’re paying the standard monthly part B premium. Married couple twice that, your joint income is $206,000 or less, you’re good. You’re paying the standard premium. You go one dollars over 103 and 1206 and one. Now you’re into the first Irma bracket. There’s five brackets. Worst case scenario, you could be paying over $500 a month for Medicare part B per person.

Mary Beth Franklin [00:05:58]:
So if you’re both over 65, that’s times two. And that’s just for your Medicare part B. If you’re in traditional Medicare, you still have to pay a Medigap policy and you probably have a drug plan. And your Medicare part D drug plan also has an Irva surcharge on it. So for your really high income people, I’m talking with joint incomes of $750,000 a year or more, single incomes of 500,000 or more. These people are paying over $15,000 a year in premiums before they see a doctor or fill one prescription.

Wes Moss [00:06:34]:
That’s just Medicare part B. And D is Irma. Oh, it’s bnd. Okay.

Mary Beth Franklin [00:06:41]:
Right.

Wes Moss [00:06:41]:
So again, over 750 for a couple, that’s when you get almost $600 a month per person. So that’s where you get to almost one, $200 a month. But to your point, just looking at these categories and how much the expense jumps for retirees, you go from about $175 a month, which is the standard that most people pay to 244. So it’s $69 more per month. So that’s times twelve. That’s $800, $828 if you make one dollars above that cap.

Mary Beth Franklin [00:07:16]:
I always say when I do my taxes, I am very aware of the Irma brackets. And as a self employed person, I have flexibility with my taxes. For example, how much I put in my solo 401 plan that can bring my net income adjusted gross.

Wes Moss [00:07:34]:
Yeah, I wanted to quickly, you said something about municipal bond income.

Mary Beth Franklin [00:07:38]:
Uni bond interest is considered tax exempt except is added back with your AGI when it core to calculating your Irma premiums.

Wes Moss [00:07:50]:
Right. It’s not taxable, but it counts towards Irma. Do you count that in the 2700 plus rules? That’s not even part of the, that’s.

Mary Beth Franklin [00:07:58]:
Not even, yeah, it’s probably in there. Yeah.

Wes Moss [00:08:01]:
What about part c? So a is hospitalization, b doctors, office visits, et cetera. D, we can always remember that. D for the drug plan, drugs part C. Yeah.

Mary Beth Franklin [00:08:11]:
So think of it this way. If you’re in what they call regional or traditional Medicare, you have Medicare part a, Medicare part B. You can add a drug plan if you want, that’s d, and then you’re going to have a lot of deductible and co payments. So most people buy what they call a Medigap policy, private insurance to fill the gap, also known as a supplemental plan. Other people choose to get Medicare in a bundled situation. It used to be called Medicare C. It’s more commonly known as Medicare advantage. You still have to sign up for parts a and B, but at this point, rather than getting your Medicare services through the government, you’re getting them through a private health insurer.

Mary Beth Franklin [00:08:53]:
It tends to be a network. Medicare Advantage plans often will say there are zero premium plans. In other words, you’re still paying your part b premium that’s deducted from your Social Security check to the government directly. Any additional premium or very low premium for that Medicare Advantage plan. And the Medicare Advantage plans often have a lot of extra. Hey, we’re including your drug coverage in here. Hey, we’re going to cover your hearing aids, vision and dental that traditional Medicare doesn’t cover. Hey, we’re going to give you a silver sneaker membership to go to your local gym.

Mary Beth Franklin [00:09:29]:
But you have to use providers in our network and you have to get prior approval in most cases for specialists. And gee, I’m sorry you have cancer and you want to go to MD Anderson in Houston, but not in our network, you can’t. So that’s the trade off.

Wes Moss [00:09:47]:
So I usually, that’s the bundled Medicare Advantage through a healthcare provider that is, does that though if it’s in the plan, if it’s in the network, does that cover the 20% of the bills that don’t necessarily get paid? So isn’t it about an 80% coverage, the other 20 covered by that?

Mary Beth Franklin [00:10:10]:
Generally Medicare covers about 80% of approved costs. And then your Medigap policy or your Medicare Advantage plan will make up the difference. So in many cases having traditional Medicare and a Medigap plan may be more expensive on a monthly basis from a premium standpoint compared to a Medicare Advantage plan. But almost all your costs are going to be covered and your insurance is good. Almost any place in the country that’s going to accept Medicare.

Wes Moss [00:10:49]:
Your Medigap Medicare policy, is that synonymous with a Medicare supplemental plan? You use those two together?

Mary Beth Franklin [00:10:57]:
Yeah, correct. You’re filling the gaps with the supplemental plan so you can call it a Medigap plan, a Medicare supplement. Now Medicare Advantage plans, some of them are very good and comprehensive. They just differ wildly depending on where you live. It’s a very geographic specific plan.

Wes Moss [00:11:18]:
For example, who leads where? Like who’s in the southeast? Is there somebody on the west coast?

Mary Beth Franklin [00:11:24]:
I can’t answer that. There are people who just specialize in these plans. But the issue becomes if you say, hey, I’m going to go to a Medicare Advantage plan, but I go to Florida or Arizona for three months every winter, I want to make sure my Medicare advantage plans is covered there. It may, it may not. That’s a question you want to ask.

Wes Moss [00:11:47]:
For example, though, in the state of Georgia, and again, I don’t do Medicare or supplemental Medicare plans for a living, I talk to a lot of providers that help people figure this out because it is so complicated. But for example, in the state of Georgia you hear of the, I guess it would really be the part c that people are choosing. The supplemental part where you can go plan F-G-H-I-J. That’s the complicated part where sometimes it is really helpful for you to go and speak to called a Medicare consultant that can help you find the right choice there.

Mary Beth Franklin [00:12:25]:
I think it’s an excellent idea before people reach age 65 to reach out to a professional. But you also want to ask them questions. For example, some of these Medicare benefits specialists will only deal in Medicare Advantage plans and will not be able to tell you your choices under traditional Medicare. If you want a Medigap policy, a supplemental policy, you want someone who will be able to address your questions under both systems to see what’s the best for you. I usually tell people if you travel around the country a lot, when you make your initial Medicare decision, you’ve got this choice, I’m going to stick with original Medicare and a Medigap policy or am I going to go the Medicare Advantage route? I usually tell people if you can afford it, stick with original Medicare and buy the best Medigap policy you can afford, which right now is a G plan. It’s the most comprehensive, tends to be the most expensive because if things change in the future, gee, I can’t afford this monthly expense anymore. My prescription drugs have changed and things like that you can trade down in policy. It’s really hard to trade up.

Mary Beth Franklin [00:13:44]:
Gee, I’m going to start with Medicare Advantage because I’m really healthy now at 65 and then at 75 I have all these health problems. I want to go back to original Medicare. Well, now you have to medically qualify when you are first eligible for Medicare at 65, three months before your 65th birthday, your birthday month, three months afterwards. That’s called your initial enrollment period. You can choose any Medigap policy you want. They can’t turn you down. There is no medical underwriting in that initial enrollment period once, but only that.

Wes Moss [00:14:18]:
One time, the three months prior to the 65th birthday and the three months after as you’re signing up. And you can do it anywhere in that window. No medical qualification if you want to go out and get the full blown G plan for your Medicare supplement.

Mary Beth Franklin [00:14:33]:
And once that initial enrollment period has ended, you can try to switch policies, but now you’re subject to medical underwriting. Gee, you got diabetes. Yeah, you got a high cholesterol, high blood. We don’t want you. So I always tell people to buy the best insurance they can afford in the beginning and it’s going to be easier to trade down they’ll take you. Somebody will take you. But it might not be the plan of your choice.

Wes Moss [00:15:02]:
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Wes Moss [00:15:46]:
Let’s say it’s 75. If you’ve got some issues to go from a lower supplemental plan or a Medicare advantage plan and say, now I want the cream of the crop, now I want the Cadillac plan, which is g, then you have to medically qualify is what you’re saying, correct? Wow.

Mary Beth Franklin [00:16:04]:
So that’s why your initial enrollment period is so important. One, assuming you are not still working and have group health insurance at work, you must enroll in Medicare during that seven month initial enrollment period. Or if you delay and enroll in Medicare later, now you’re going to pay a lifetime delayed enrollment penalty every month for the rest of your life. That’s a whole nother story.

Wes Moss [00:16:28]:
Well, okay, say that one more time. Say the lifetime delayed enrollment. Say, that got you real quick. Again.

Mary Beth Franklin [00:16:36]:
When you turn 65, you have these seven month initial enrollment period three months before your 65th birthday, your birthday month three months afterwards. During that seven month initial enrollment period, you can enroll in Medicare. Sign up for a and b. If you’re going to go for a supplemental plan, you get a supplemental plan. You get a drug plan. If for some reason you waited, for whatever reason, gee, you didn’t know how to sign up and you sign up at 75 years late, there is a delayed enrollment penalty of 10% per year for every year you are eligible to enroll and did not. So if you waited till 75 years late, you’re going to pay an extra 50% per month every month for the rest of your life of your part b premium because you delayed enrolling.

Wes Moss [00:17:27]:
Whoa. So if you’re on a one year, round the world robin sabbatical and you just forget to sign up and you would do it the year later, it’ll be 10% more onto your Medicare part B and D premium, that’s the part b.

Mary Beth Franklin [00:17:43]:
The delayed enrollment penalty for part D is 1% per month, so it’s technically 12% a year.

Wes Moss [00:17:49]:
12%, mom.

Mary Beth Franklin [00:17:51]:
And by the way, if you’re on that round the world cruise, Medicare does not operate outside the US border. So now you’ve got the quandary of, okay, I’ll sign up for Medicare at 65 because I have to, but I can’t use it on the round the world cruise. So I still need some sort of travel insurance for that round the world cruise.

Wes Moss [00:18:12]:
So for the retirees that say I’m going to go to live in a quaint little town in the coast of Mexico and there’s 70, Medicare is not going to help from a healthcare perspective.

Mary Beth Franklin [00:18:25]:
Correct.

Wes Moss [00:18:26]:
What does that person typically want to be doing? And by the way, what if you moss a year? Well, let’s say you go abroad for two years, 69 to 71. If you’re living in another countries, you’re still paying your Medicare, but it doesn’t work if you’re in a quaint little town on the coast of Mexico. So you have to get some other.

Mary Beth Franklin [00:18:51]:
Coverage, usually because I used to write a lot about people retiring abroad and Mexico, for example, has excellent health care that’s very inexpensive. And usually people who are going to San Miguel Allende are going to either just pay out of pocket or be part of the Medicare, the part of the mexican health insurance plan where frankly, most of the doctors there were trade in the US.

Wes Moss [00:19:16]:
Anyway, I guess you really have no choice of stopping to pay because your Irma just takes it right out of your Social Security. So you can’t really press pause.

Mary Beth Franklin [00:19:30]:
Right. And also people say, well, I think I’ll sign up for Medicare Advantage because then I won’t have to pay the Irma, right? Wrong. If your income is higher, whether you’re in traditional Medicare or Medicare Advantage, you’re still paying that excess charges on top of your basic Medicare Part B premium.

Wes Moss [00:19:50]:
So again, if you don’t enroll, you’re going to pay a 10% penalty per year or 12% for drugs.

Mary Beth Franklin [00:19:56]:
And the one exception, there is an exception if you continue to work and have group health insurance through your current employer or are covered through your spouse’s current employer. We’re not talking retiree health benefits, but current group health insurance. You can delay enrolling in Medicare penalty free until after that group health insurance ends. So people who are still working and have health insurance, they don’t have to enroll in Medicare at 65.

Wes Moss [00:20:30]:
Are there any big changes coming to Medicare in the foreseeable future in 2024. Over the next several years, like we’re looking at maybe with Social Security, with tweaking the numbers of the tax. Do we see anything big coming with Medicare?

Mary Beth Franklin [00:20:45]:
They’ve been tweaking some of the benefits, like particularly in the Medicare Advantage plans. Gee, if you need a ride to the doctor, we can supply that as part of your plan. Know things around the edges, but nothing major that I’m aware. Again, I only, I don’t profess to be the Medicare expert. I know enough about Medicare as its costs relate to Social Security, but I would not be in the position to advise somebody of, gee, this is the Medicare supplemental plan you should buy, or this is the Medicare Advantage plan you should go into. You really do need a benefits expert for that.

Wes Moss [00:21:25]:
Biggest mistake for Medicare, biggest mistake for Social Security that people make, I think.

Mary Beth Franklin [00:21:34]:
Just not being informed. A lot of people will take Social Security at 62 because they can, and that’s what their parents did. And yet they didn’t realize, well, I could get so much bigger of a benefit if I waited or Jesus, doesn’t make sense because I’m still working Medicare. Frankly, it’s so complicated. I think it makes Social Security look streamlined. So many choices involved. And I think it really helps to work with a benefit specialist when you’re making that decision, and I do say buy the best coverage you can afford in the beginning, you can always trade down really hard to go in the.

Wes Moss [00:22:12]:
Other direction with Social Security. How readily available are the folks of the Social Security you mentioned? There’s something like 60,000 employees for Social. Do you recommend going in and sitting down looking at options with a Social Security person when you’re ready to do that? Or is that something that people.

Mary Beth Franklin [00:22:34]:
No. Okay, tell us why security has so much information available online. It’s like drinking from a fire hose. But if you’re just basically applying for retirement benefits, do it online. You go right to the homepage at SSA Gov and you’ll see start an application and you just follow the prompts. It’s your name, address, birth year, Social Security number, et cetera, and it will tell you everything you need to know. And then you’ll get a follow up phone call. I think that’s the cleanest way to do it.

Mary Beth Franklin [00:23:05]:
Now, if you’re a widow or widower and trying to collect survivor benefits, you can’t do that online. You’re going to have to contact Social Security and probably go in in person. There’s certain documents they need to see, death certificates, marriage license, all that sort of thing. Social Security has been struggling for the last, I’d say, decade with underfunding, understaffing, and increased demand. I mean, face it, you know, boomers are turning 65 at the rate of 10,000 people a day and have been since about 2010. At the same time, Social Security’s budget was virtually frozen and they have attrition. A lot of their employees are retirement age. They need more money to train.

Wes Moss [00:23:52]:
They’re retiring, too.

Mary Beth Franklin [00:23:53]:
Exactly. To answer all the questions of the public. And for about the last five or more years, we have had a series of acting commissioners who are like babysitting the agency. They’re doing the best they can, but they really don’t have that clout as leaders. We have, for the first time in many years, a Senate approved new Social Security commissioner that was sworn in on January 19. His name is Martin O’Malley. I’ve spoken to him. I think he’s a great appointment.

Mary Beth Franklin [00:24:28]:
He was a two time mayor of Baltimore. He was a former governor of the state of Maryland. His expertise is in data management and customer service, and that is his focus. Don’t ask this guy what are they going to do about the trust funds? That’s not his problem. Congress has to do it. His goal is to make sure that the 800 Social Security number, 807 721213, is answered in a timely fashion. He is there to make sure that the backlog of disability hearing cases will continue to diminish. He is all about getting the right people in the job to answer the public’s questions and get them the benefits they have paid for all their lives through their FICA taxes.

Mary Beth Franklin [00:25:17]:
And I am very excited that he’s in this position, and I expect great things from him.

Wes Moss [00:25:23]:
From Martin O’Malley, two other topics I want to briefly cover, taxes and disability insurance. Let’s start with Di. I do have families that I’ve worked with, I’ve worked with over the years that had things happen and they weren’t able to continue work through an injury or a sickness. But it seems like it can take a really long time for somebody to get Social Security disability insurance. What’s that process? What do those benefits typically look like? Percentage on a monthly amount?

Mary Beth Franklin [00:25:56]:
Well, think of Social Security as a three pronged system. If you die, there’s a benefits for your survivors. It’s like life insurance. If you retire, you get retirement income on a monthly basis, like an annuity. And if you become disabled due to an injury or an illness and you can no longer work and you are approved for Social Security disability benefits. Because this is on a case by case basis, retirement is straightforward. You apply for benefits, you get it based on your average lifetime earnings. And the age when you apply disability is, oh, let’s review the medical records.

Mary Beth Franklin [00:26:36]:
Let’s review the accident reports. It can take two years to get approved for disability. But if you are approved for disability, then they’re going to backdate those benefits to the time of when they approved you. Now, unfortunately, a lot of people die waiting to be approved for a disability benefit. If you are approved for disability, let’s say you’re 55 years old and had some sort of accident, you can’t work anymore. While I don’t know the ins and outs of all the formula calculations, the concept is roughly you would get the equivalent of your full retirement age benefit. Even though you’re in your, once you reach your full retirement age, your Social Security disability automatically changes into a Social Security retirement benefit, but the amount remains the same. But if you are approved for Social Security disability, in many ways it’s like Social Security retirement.

Mary Beth Franklin [00:27:39]:
If you have a spouse of retirement age who maybe has no work history of her own, but you’re collecting a disability benefit, she may be entitled to a spousal benefit based on your disability benefit. If you have minor dependent children in your household and you’re receiving disability, they would be able to receive a Social Security dependent benefit. So the bottom line is it’s there for people who can no longer work, who have to stop working before their full retirement age. But it’s highly personal as far as if you’ll be approved, how long it will take, how much.

Wes Moss [00:28:20]:
You’re definitely case by case basis, you’ve got to go in, you’ve got to apply, they review your file, and it can again take two years before they approve or disapprove.

Mary Beth Franklin [00:28:31]:
And that is one of the things Social Security has been working on, because you can imagine during the pandemic when all their 60,000 employees are working from home, there is this huge backlog in cases, and they’re trying to whittle away at that backlog.

Wes Moss [00:28:46]:
How about taxes? When I always think of one of the other determinations, and we didn’t talk much about this, is that I think about what is your tax rate when you start to collect Social Security? And if somebody in the house is working and you’re at a super high tax rate, then you’re not keeping as much of the Social Security because it does go ultimately to your overall income. Now, I know in certain states there’s different rules around state income tax and exemptions. But what is the general purview around your Social Security, intaxed or not?

Mary Beth Franklin [00:29:24]:
Well, Social Security benefits are taxable once your income crosses a certain threshold. But the thresholds are so incredibly low because they were set in 1983 and they were never indexed for inflation. So if you’re single and your combined income exceeds $25,000, now part of your Social Security benefits are going to be taxed. What is your combined income? It’s your adjusted gross income, which is essentially everything on your tax return. And that adjusted gross income includes half of your Social Security benefits. And now we’re going to add the other half of your Social Security benefits and any tax exempt interest you had on investing in muni bonds. And all that together is called your combined income or your provisional income. And if your combined income exceeds 25,000, if you’re single and 32,000 if you’re married, filing jointly.

Mary Beth Franklin [00:30:26]:
Now, you get into this formula of calculating how much of your Social Security benefits are going to be taxed at your ordinary tax bracket. And a worst case scenario, up to 85% of your Social Security benefits can be taxed.

Wes Moss [00:30:41]:
Right. So it’s, again, for most people, most of their Social Security benefit per month is going to be taxed, period. And then states are going to be different.

Mary Beth Franklin [00:30:53]:
The majority of states do not tax Social Security benefits, like 22, 23, whatever. And that’s been evolving over the years. There are about trying to think maybe 1214 states that do tax at the state level, and some of them are tied to income. Some of them, it’s a street tax.

Wes Moss [00:31:12]:
Again, this is such a, I always feel like we’re going to nail everything down. I always think of this as like we’ve got this tornado of information and we’re going to capture it all in this vitamix blender and we’re going to just keep it all here and it’s going to solve everyone’s Social Security questions and problems. And I think it will to some extent, or at least solve a portion of your questions and the big overview. And I think we absolutely did that today. The other thing that when I think about these rules is when you explain them, because you’re one of the greatest of all time in explaining Social Security in a way that we can digest it. It’s just that three days from now, I’m going to say to myself, wait, what did Mary Beth Franklin say about that piece? What was the rule around divorce? Second husband? Wait, what did she say? So what’s the resource where people can go find you 24/7 well, two things.

Mary Beth Franklin [00:32:15]:
One, my own website is marybethfranklin.com, pretty easy to remember. And on that website I have a lot of free articles that explain Social Security benefits, whether you’re single, married, divorced, widowed, families with minor children, that sort of thing. You can also buy my ebook there, which is called maximizing Social Security benefits. Or you could go directly to maximizingsosecuritybenefits.com to purchase my ebook. It’s 29 95 and it’s an ebook. It means you download it and if you choose to print it out. But I don’t believe anybody should have to read 300 pages about Social Security, where some of my colleagues have written extensive tomes on the subject. Mine’s about 50 pages.

Mary Beth Franklin [00:33:02]:
Tells you everything you need to know. And if you don’t want to read that many, you just go right to the section that says single, married, divorced, widowed and find the information that you need for you.

Wes Moss [00:33:14]:
Now that you’ve retired from investment news, you’re going to continue to do appearances, panels, interviews, slow down on the writing, or what’s part time work look like for you now in your happy well.

Mary Beth Franklin [00:33:27]:
I love the interaction with the audience, like podcasts, like with us, and the in person presentations and client events, that sort of thing. This is the first time in more than 40 years I have not had a writing deadline, and I have to say I’m enjoying it because it leaves more time for my passions of pickleball and skiing. Yes, I know you’re a pickleball player and traveling. My family and I celebrated with a few weeks in Italy earlier this year. So I am just hoping to live that retirement life that I’ve been telling people for decades of how to save for it. And I’m just thoroughly enjoying it. I leave from Vale, Colorado on Saturday for my first ski trip of the season.

Wes Moss [00:34:15]:
I’m hoping for some great snow. I’m praying for powder for you in is. It’s been a light year so far in the United States when it comes to fresh snow. Now, I know that the mountains are making snow, but there’s nothing like fresh snow. It’s really one of the most incredible joys in the world if you’re a skier or a snowboarder. We have a lot of snowboarders that listen to the retire sooner podcast. That’s actually what I do. I’ve snowboard.

Wes Moss [00:34:41]:
My wife, I snowboard. My wife skis. I’ve made all my kids learn to snowboard. All four boys snowboard now rank your favorite things you’re a skier. Where do you put pickleball? Travel. Rank your core pursuits in the world.

Mary Beth Franklin [00:35:02]:
Okay. I would say travel first. I love to travel. I would say pickleball second because I get to play two to three times a week. I would play skiing third just because I only get to do it a few times a year. I live on the east coast, so I’m generally traveling to Colorado or Utah to ski. I love it. I’ll never be a great skier because guess what? I didn’t start till I was 40.

Mary Beth Franklin [00:35:26]:
When I was 40, I declared it the me decade. I figured I’d been raising my two sons in my thirty s, so when I turned 40, I said I wanted to learn to ski, rollerblade, and play the piano. I learned to ski. I’ve never missed a season over the last 29 years. I took piano lessons for twelve years and I was pretty good for a while. I’d like to get back to that in retirement. And I rollerbladed every day as cross training for many years. I don’t do that so much anymore.

Mary Beth Franklin [00:35:57]:
Pickleball’s sort of taken up some of the slack. But I’m fortunate to be healthy and active, and that’s what I want to keep doing. As every time I go to a physical therapy session, I always hear motion is lotion. So that’s the key to healthy aging, motion.

Wes Moss [00:36:16]:
I don’t know if I’ve heard that phrase. I love that motion is lotion. Well, you’re going to have a little bit more time. So less writing, more pickleball, more skiing, more travel, which, those are all awesome. You’re. Where are you, New York. Where are you in the country?

Mary Beth Franklin [00:36:30]:
I’m outside of Washington, DC.

Wes Moss [00:36:33]:
Did you ever think about CNBC always runs these? They do such a good job of painting this amazing picture of this inexpensive retirement in a quaint little town somewhere outside of Mexico City or on the coast. It’s one of these things that’s often talked about, but very rarely do I see people really do it. You used to write about it a lot. Is it just more of a fantasy or do you know a lot of Americans that really do it?

Mary Beth Franklin [00:37:05]:
There’s a small percentages of Americans that do it for a variety of reasons. A lot of people just are satisfying that wonderlust. Others are looking for a lower cost of living. But there are trade offs. I remember when I was at Kiplinger’s personal finance magazine where I wrote and was a retirement editor for about 13 years there. And I went on an undercover mission to Belize because they were promoting that as a great place for retirees. So I did not go as a journalist. I went as a prospective home purchaser in Belize.

Mary Beth Franklin [00:37:43]:
And it was an eye opening experience. And I think I called my article, believe it or not. Yes, it would be cheaper if you want to live like a local, but those are buying the ham hawks in the open air market that have been sitting in the sun for 8 hours. And it means you’re siphoning the gas from your neighbor’s car who went across to Mexico to get it for cheaper. And it had this sort of sense of post colonial decay. Yes, there are a lot of drunk old retirees on some of the barrier islands. It was like Margaritaville on Metamusal. It was not my vision of retirement.

Wes Moss [00:38:28]:
Wasn’T as sexy as you were thinking. Wasn’t like out of a James Bond movie, was it?

Mary Beth Franklin [00:38:33]:
Somebody wants to do that for a year or two, particularly if maybe you’re retiring early, 62, 63. But you probably want to come back home by the time Medicare is kicking in at 65. Or maybe I am buying a place in Spain. There’s now a big new retirement community called Ambera that is designed like the villages in Florida just opened a couple of years ago. I actually talked to the developers at some point because Europe doesn’t have anything like retirement communities. And they thought, what a great idea we have. All these Europeans with pensions, they have money, they want to come and live in the sun. And they started to build this thing just as the COVID pandemic hit.

Mary Beth Franklin [00:39:21]:
So their development plans were a little delayed. But you know what? When you’re a us citizen, no matter where you live in the world, you still pay us taxes on all of your income. And that happens unless you choose to renounce your U. S. Citizenship, which most people don’t want to do. And when I was on this tour of Belize, I do remember one of the people on my tour raising his hand to ask a question whether the United States had an extradition agreement with Belize. I thought, this is not the next door neighbor I want.

Wes Moss [00:39:58]:
You get some natural selection on that, too. It’s funny when I’m googling that we’re talking here. This looks like a fake story that says 5 million american retirees, one of the six figures, now live abroad. That can’t be right. Here’s one from Kiplinger. Updated October 2023 that says about 450,000 people receive Social Security benefits outside the US, up from 307,000 in eight. So it’s like a half a million people total at the most.

Mary Beth Franklin [00:40:29]:
And many of those people were born outside the United States, spent their careers in the US, and then retired abroad. If you are a us citizen, you can receive your Social Security check virtually any place in the world except North Korea, Afghanistan and Iraq or something. If you’ve earned your Social Security benefit and you’re, say, a green card holder, you’re not a us citizen and you retire abroad, well, then it becomes a little problematic. It depends which country you go home to and what their individual Social Security agreement is. With the United States, no problem. If you’re in western Europe and Japan might be a problem in certain african and asian cities. So it’s, again, a very specific decision, and the person earned those benefits can collect them. Now, their dependent spouse or minor dependent children might not be able to get them if they’re out of the US for more than six months.

Mary Beth Franklin [00:41:29]:
Again, lots of.

Wes Moss [00:41:34]:
A, I really do think it is quite an adventure to think about doing that. A big part of me, though, thinks about all the places in the United States we don’t get to know, the many towns in the United States that we never visit. It’s impossible to do so. And then, of course, very few places we really get to know and every town, it’s not like going to the south of Sevilla and Spain and living on Caye Mino. But still, there’s so much richness in the United States that it’s hard for me to sell myself on going to another country. Now, it sounds like a one year adventure. I could see doing that, but I can’t see finding a better place outside the US because there’s almost infinitely amazing places here inside the US. But it’s an amazing thing to think about.

Wes Moss [00:42:30]:
It’s so adventurous to think about. All right, we’re going to find Marybeth Franklin@marybethfranklin.com. Of course, maximizingsoccialsecuritybenefits.com, and every once in a while, right here on the retire.

Mary Beth Franklin [00:42:45]:
Sooner podcast, let me add one more thing. I did a 1 hour special called Social Security nu for public television. It had aired in the Baltimore Washington Twin Cities markets over the last few months. It will now be available over the next two years for local public television stations around the country. So if you see Social Security in you with Mary Beth Franklin, tune in.

Wes Moss [00:43:13]:
That’s cool, too. You can’t not tune in to Mary Beth Franklin. All right, well, listen, enjoy this new life of slightly more core pursuit time. Still some work, some skiing, rollerblading, piano. So enjoy and have fun and stay healthy. Someone told me that motion is lotion, so keep it up and I pray for some fresh powder for you this ski season.

Mary Beth Franklin [00:43:42]:
Thank you, Wes.

Mallory Boggs [00:43:44]:
Hey y’all, this is Mallory with the retire sooner team. Please be sure to rate and subscribe to this podcast and share it with a friend. If you have any questions, you can find us@wesmoss.com that’s wesmoss.com. You can also follow us on Instagram and YouTube. You’ll find us under the handle Retire Sooner podcast. And now for our show’s disclosure. This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal.

Mallory Boggs [00:44:15]:
There is no guaranteed offer that investment return, yield, or performance will be achieved. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions for stocks paying dividends. Dividends are not guaranteed and can increase, decrease, or be eliminated without notice. Fixed income securities involve interest rate, credit inflation and reinvestment risks and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Past performance is not indicative of future results. When considering any investment vehicle, this information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Investment decisions should not be based solely on information contained here.

Mallory Boggs [00:44:59]:
This information is not intended to and should not form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment tax, estate or financial planning considerations or decisions. The information contained here is strictly an opinion and it is not known whether the strategies will be successful. The views and opinions expressed are for educational purposes only as of the date of production and may change without notice at any time based on numerous factors such as market and other conditions.