Your Health Matters

healthcare_costs_2[1]How are you feeling today?  At DWM, we hope you are feeling your best and enjoy robust good health every day.  As financial advisors, we certainly pay attention to your financial health and look for ways to maintain and improve your overall financial well-being.  And with the cost of health care these days, the state of your physical health has become inextricably linked with your financial well-being.  A recent WSJ article about health expenses in retirement noted that excellent health can actually raise an individual’s lifetime health spending needs because of the likelihood that they will live longer.  So good health may actually cost you more!  At DWM, we want to make sure we help you plan for these costs and analyze ways to save.

There are many changes occurring in the healthcare industry.  Aging populations and longer life-spans will strain the existing resources.  The industry is evolving to invent strategies and plans for preventive medicine and new technology to make healthcare more efficient.  As consumers, we are able to be pro-active in managing our own health care.  We can now download health apps, consult a medical practitioner by email and use strap on devices to monitor our own vitals.  Technological health advances in diagnostic tools and treatment options are ever-changing and, when we have medical questions, we will likely hit the internet and educate ourselves before calling the doctor.  As consumers in the marketplace, we can select from a vast menu of insurance options and many health care providers are offering innovative ways to finance even traditional medical services.  Welcome to the new health economy!

There is also a cost to new medicines, better technology and a shift from traditional strategies.  According to reports by the Centers for Medicare and Medicaid Services, which published its projections last August in the policy journal Health Affairs, spending on healthcare is expected to grow at an average annual rate of 5.8 % over the next decade.  Another report from the Pricewaterhouse Coopers (PwC) Health Research Institute estimates those costs growing at 6.5% per year.  Some estimates for Medicare Part B and Part D are over 7%!  WSJ quoted a report by HealthView Services Inc that says a healthy 65-year old couple can expect to pay, on average, $266,589 for insurance premiums and $128,365 for related expenses (dental, vision, copays and out-of-pocket bills) over their lifetime.  These figures show that healthcare costs are far outpacing cost-of-living increases of 1-3% and have made us take notice of how these increasing healthcare costs will affect your future financial health.

With these rising health care costs, mandatory Medicare premiums can account for a larger share of retirement spending than even recreation or housing.  And few people realize that your annual Medicare premiums are based on your retirement income, according to Mary Beth Franklin of Investment News.  It makes good financial sense, therefore, to understand your modified adjusted gross income (MAGI) and plan withdrawal strategies with income targets in mind.  Even moving one tax bracket can result in significant savings in Medicare costs.  You really need to put the ‘microscope’ on your health care expenses and make sure you are doing everything you can to minimize their impact on your financial plan.

Recently, we discussed the upgraded, newly released version of MoneyGuidePro – MGP4- and highlighted some of the new features in our blog (  MGP4 has added a new healthcare spending goal, a tool which allows us to isolate the rising health care spending needs in your financial plan results and make sure that your plan can successfully accommodate this spending.  There is a worksheet for including your actual expenses or estimates for Medicare Part B, Part D for prescriptions, supplemental or Medigap policies and out-of-pocket spending.  This will be a great tool for us to use to make sure our clients are prepared.

At DWM, we can help you manage and budget for a changing health care environment and the costs you will face in the future.  So get enough sleep, eat right and exercise…we want you to stay healthy and enjoy your life.  Your health matters!

MGP 4 – The Next Generation of Financial Planning

MGP logo onlyThe financial industry is seeing some interesting changes spurred by the recently-enacted DOL fiduciary rule (see our recent blog at ). At DWM, we welcome these changes as it now requires financial advisors to adhere to a rule that we have been following from the beginning…which is to make investment and planning recommendations with the client’s best interests in mind.  We always put the client first and always remain committed to this philosophy.


Last week, MoneyGuidePro, our chosen software provider, came out with a new version of their financial planning tool called MGP 4.  It is the next generation of financial planning software and the updates are specifically intended to help the financial advisor stay in line with the new rules.  The changes have made the software more “conversational” so advisor and client can spend more time discussing goals and retirement requirements, something we have always focused on.  We have spent some time reviewing the new features and there is a small learning curve with it.  We do think in the long run, it’s a nice update.  If you have recently logged on and were surprised or frustrated with it, you are not alone.  We want to describe some of the basics to you and, of course, we are always available for questions.


The biggest change is in the presentation and some of the familiar indexes are set up in new locations.  The updated format takes you to a My Plans landing page where you will have access to your financial plan.  Once the plan is selected, you will be on the page with personal information, similar to the previous version.  If you look at the top of this page, there is a progression line with three circles on it. The circle on the left is marked “About You” and is green at this stage. Once you click on the circle, the dropdown has all the items from the previous version grouped in four categories- Personal, Goals, Money and Risk and Allocation.  Click on each of these for details. ‘Personal’ shows personal information and has a new area for expectations and concerns.  ‘Goals’ has a retirement schedule and a place to include your goals, including one for health care, a newly-established feature to help us understand and track the costs that health care may have on your financial plan.  When you click on ‘Money’, you will see the familiar drop-down categories from the old version – including investments, retirement income and net worth.  Finally the ‘Risk and Allocation’ section will help us evaluate your risk tolerance and allocation strategy so we can see if they are in line with your goals.  You can always skip a category by returning to the “progression line” at the top and selecting your choice.   Everything is here, it just may take an extra step to get there.


*Tech Tip:  If you want to have an abbreviated look at your plan, you can select the ‘My Snapshot’ tab on the first page to have quick access to some of the most popular features like net worth, goals and results.


Once you finish ‘Risk & Allocation’, you are ready to move to the ‘Results’ circle.  You’ve seen these headings before. We suggest you click on ‘recommended scenario’.  Once on that page, look at the left side and you’ll see blue rectangles with personalized strategy tabs based on your goals.  One new, exciting feature is the Social Security tab which allows you to calculate your best strategy drawing benefits, if you haven’t already begun.  You can also choose the “What if Worksheet”. Here is where we modify certain predictors for the future like rates of return, inflation or living longer.  You can look under the recommended scenario or under the ‘What if worksheet’ Monte Carlo simulation graphs and you will see the blue rectangle “explore”.  Click on explore and then scroll down to “combined details.”    You’re now into the results page and graph, which all of our clients have seen before and shows the annual and linear progression of the value of your future portfolio.  This chart starts with the current value of your investment portfolio and shows how the additions, earnings, taxes and spending or goals might impact it going forward.  You can follow it to the wonderfully euphemized “end of your plan”!  We always find that amusing…


There are many other features hidden in this financial planning software and we invite you to “play” with this program any time. There is something for everyone in here.  In the play zone, you can add any number of crazy or exciting goals to see if you can make them come true.  Or if you want to prepare for the worst, you can stress test for challenges in the “what are you afraid of” feature. There are strategy tools, a budget feature and you can print your net worth report anytime. The ‘Finish’ tab includes the reports area which is not as intuitive as before, so if you have questions, please call us.  We are always glad to help…or run them for you!  And don’t worry, when you are finished playing with your plan, we always keep the original copy that is our constant.  DWM wants you to understand and participate in your financial planning and be as educated and knowledgeable as possible.  After all, that is our fiduciary responsibility and we always put our clients first!