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Elaine Floyd

Episode 47: What Baby Boomer Women Need to Know About Social Security and Medicare, with Elaine Floyd

Good afternoon everyone, my name is Lynn S. Evans and I am host of Power Of The Purse podcast. There was a time in my life not too long ago when I believed three things about money. One, women are not supposed to talk about or be included in any conversations about money. Number two, women don’t have the natural ability to understand anything about money. Three, men know best how to manage money. Those truths I made up about money guided me for years until I realized money was not a foreign language or some other obscure academic exercise.

It was not only something I could understand but teach to other women. Too many times I’ve heard stories from women who ought to know better but didn’t until they were forced to because of divorce, widowhood, job loss or the approach of retirement. This podcast will add another chapter to a rich history of successful women who when faced with some personal challenges found the ability to step beyond them. We’ll examine some of the truths they made up about money from their life experiences and how that shaped the path they chose.

My mission is to help women have a healthy, positive relationship with money. With that in mind, my guest today is Elaine Floyd. Elaine is the director of retirement and life planning for horsesmouth.com. It’s a publication that I have subscribed to for well over 10 years and enjoyed immensely. She’s also the author of a few programs that were designed for financial advisors called Savvy Social Security Planning for Boomers and Savvy Medicare Planning for Boomers. Elaine started her career in 1981 as a major representative for a major wire house.

For some people listening they may not know what that means., that’s a very large financial services firm. She received her CFP designation in 1986. After 20 years as an independent writer of books, articles and white papers for the financial services industry, she joined Horsesmouth in 2008. She holds a bachelor’s degree in psychology from UCLA and currently resides in Bellingham, Washington. Welcome Elaine.

Thank you, I am very happy to be here.

I have so many things I want to talk to you about today and get information. I hope we can fit it all in. Let’s just jump in. One of the things I am most interested in knowing about is how you decided or why you decided to get started working in the world of personal finances. Not something that’s pretty standard operating procedure for women.

Right. I was listening to you delineate your truths that you grew up with. Actually I was lucky enough to have a father who was an accountant. I always liked math and so for me dealing with money was a very natural thing. What I learned growing up was, one of the most important things I learned growing up as the daughter of an accountant was money was something that you keep track of. That was the most important thing. Over my life I’ve had not very much money and some money.

If you don't know where to start, remember this: money is something you keep track of. Click To Tweet


It has varied over the years. Anyway, the way I got into is this. It’s interesting. I majored in psychology, I got married right out of college, I had a couple of kids, stayed home with my kids and then I got divorced after 11 years of marriage. That came as a complete surprise, I was completely unprepared to start earning a living on my own. I went on a game show and won $15,000 which bought me a little bit of time. During that time I explored different careers. My ex-husband had been a stockbroker.

I would have thought that because he was so different from me, he was a real hard driving sales type, I thought that’s something I could never do. At the same time a friend of mine had gone through Merrill Lynch training and she was a gentle soul in the world of personal finance. I thought, “Well maybe I can do this.” I entered the business in 1981, became a traditional stockbroker. In 1987 I became somewhat enchanted with the business model which was so focused on commissions and just deriving revenue from clients that I left the business.

Starting around 1984/85 I started producing a newsletter for my clients and I also was just writing a lot of memos in the office. I was developing my writing skills and getting a lot of positive feedback on my writing. So I thought, “Well this is a good thing. I can combine my writing and my knowledge of personal finance into a career as a freelance financial writer.” I quit the business, started my own business producing newsletters for other financial people. Wrote some books and white papers as you mentioned.

Horsesmouth, which was founded in around 1997, became one of my clients and I started writing articles for Horsesmouth and that eventually led to a full-time job at the firm.

Let’s roll this back. There’s a thousand things I wanted to jump in and say. First of all let’s talk about the game show. What game show was this? Was this a national game show?

It was Password Plus with Allen Ludden, and Sally Struthers was my partner.

Oh my gosh, I can’t believe it. That day you won the most money that you could win, was that the prize, $15,000?

It was over about four days. I won for three days. If you win on a day then they bring you back the next day and if you win they bring you back the next day. My run was three or four days.

But now really, I have to ask this question because I’ve always thought it was unusual. I’ve watched game shows that are on five days a week. They talk about coming back tomorrow, coming back tomorrow. Is it really tomorrow or do you tape four or five of them in a row and you just have to bring clothes to change?

You do, you tape four or five in a row, that’s exactly right. Then they do take a little break, and I think that’s what caused me to lose in the end, I lost my momentum there. I think subconsciously I thought, 15 grand, that’s a pretty good amount of money, I’ll let somebody else take over now.

Yeah at that time it was, it could have made a big difference.

Yeah, it did.

You got the 15 grand and then you said you were going to start something. I guess we didn’t have the compliance issues at that time that we do now, not as stringent. So when did you discover you had this writing talent?

To be honest I was mutual fund coordinator in my office. Which meant if any of the – there were 30 brokers in the office – if any of them had questions about mutual… I was basically the one who was the mutual fund expert in my office. My role was to promote different funds and to disseminate information about them. I started putting out these memos and I made them funny. They very different from the very dry financial writing that most of them were used to seeing. I had my assistant copy them onto goldenrod paper. Whenever the gold memos hit the baskets, everybody would grab them and read them. I just got—

My gosh.

Lots of very positive feedback on my writing. The writing I do now doesn’t have the humor that it did back then but basically I—

That’s too bad.

I know.

With the topics that we have to deal with, a little bit of humor might make a big difference.

It’s so true. Maybe I’ll rethink that.

Yeah, I think you should. I’m only saying that because I had been writing a column once a month for the regional business newspaper that came out monthly. It was a column on personal finance. I got to that point doing the same thing where it was pretty much, OK, you could inject some humor or more likely, I might call it personality into what you were writing.


But after a while I got so bored with it, I stopped it. I said, “10 years of doing this is enough.” Then we had things called blogs, which we never had before, where you could really say what you wanted to say with a very skeptical or satirical tone, whatever it was. I loved doing that. To me it’s a way of self-expression, and I certainly hope that you go back to that kind of writing. It’s just so refreshing.

It is. I’ll just say that I think the main benefit in my writing comes in my ability to explain things in a way that makes them easy to understand.

I will agree with that because I’ve read a lot of what you’ve written and I would say that’s one of the things that really has impressed me, that you can take very difficult topics and just chunk them down into things that you can grasp. All of a sudden you’ll finish it and go, “I get it.” You won’t start with a DOL rules or what.

You’re right, I don’t touch that.

That’s a little inside joke for people who are listening. It wouldn’t be worth it to try to explain it either. Okay, so then you started writing. At what point did you say to yourself, “Hey, I think I have enough skill here that I can let go of my job and rely one hundred percent on my writing”?

I did something that I probably would not recommend. I was of the camp and back in the 1980s that if you were going to do something with intention you had to jump into it with both feet. So that’s what I did. I prepared some marketing letters to go out to CPAs and lawyers and advisors in my community. The day before those letters went out I quit my job and I did it with the idea that once these letters hit everybody’s mailboxes they would beat a path to my door wanting me to produce their newsletters for them. I couldn’t be having my job while I was trying to produce all these newsletters. It was definitely magical thinking and it was probably the wrong thing to do.

Was the silence deafening?


Was the silence deafening?

No, actually what happened was I got one client, and I didn’t realize how steep the learning curve was going to be. Producing a newsletter for a client is very different from doing it for yourself. I had a very steep learning curve and it took all of my time that first month to actually produce that newsletter, so it’s a good thing I didn’t have them all beating a path to my door. That first year I ended up grossing $30,000 which wasn’t… I mean it was a drop in income for me for sure and it wasn’t enough to meet my expenses but it wasn’t too terrible as you know business startups go.

That’s pretty great.

The next year I made $45,000 and then it went up from there. It worked out okay, I’ll just say that.

Yeah, I would say so. Then when did you just make the decision then to go with Horsesmouth and why?

They had to talk me into it because I really loved working for Horsesmouth but I also like having a variety of clients because you never know. Having a job is like having one client. It was in discussions with Sean Bailey at Horsesmouth over a period of several months that I kind of got excited about what I could accomplish by being a full-time employee at Horsesmouth. Once I joined the firm you know I never looked back and I really am enjoying being an employee. Partly because now I don’t have to you know pound the pavement for you know freelance gigs all the time. I don’t have to worry about invoicing, I don’t have to worry about any of that stuff, I can really focus on the work itself.

Tell me how did you evolve into an expert on two of those…we talked about heavy topics, Social Security and Medicare. How is it that you developed the expertise the desire to even go there? What prompted you to do that?

When I was freelance writing I wrote about Social Security. I ghost-wrote several books on retirement planning and that’s when I started my study of Social Security. At that time even though I had been trained as a financial adviser, none of us knew very much about Social Security at that time. We didn’t get involved in it, we didn’t advise our clients on it, we just said when you turn 65, go down and apply for Social Security, that was all there was to it. When I started writing the book and writing the articles for Horsesmouth on Social Security, that’s when I learned that there was so much more to it than anybody realized.

That was one of the things that got me to join the Horsesmouth, was this idea that I could really get to work developing this program that would teach financial advisors all of the nuances of Social Security that I knew they needed to know but didn’t know. And I also know because I am a leading edge baby boomer myself, I was born in 1946 and so in 2008 when I joined the firm was the year I turned 62, so it’s like, “Okay, I want to learn this for myself!” That’s how it evolved. Number one, my own my own interest in it and then number two just the recognition that this knowledge was so needed out there in the advisory marketplace.

It would seem that that would be almost enough to take on just Social Security. Then you also added another huge, wide open gap in learning when you started with trying to have us understand Medicare. Why?

Again, I was approaching age 65, I needed to know about Medicare. I knew that financial advisors didn’t know about Medicare and I knew that their clients were not being properly advised. Actually advisors who had bought our Social Security program approached us and said, “When are you going to come up with a savvy Medicare planning program because my clients are asking about it?” That’s what drove it. I will tell you since we’ve had this program out there over the last five years it has become more and more apparent that people who are retiring from their jobs are not getting good advice on how to transition from employer insurance to Medicare.

The reason is that all the people all the HR people, all the insurance people who sell those group plans, they know the group plan market, they don’t understand Medicare. They don’t know how to advise people on as to how to get over to that Medicare system. There are definite rules and there are penalties associated with it if you don’t sign up on time. Some people are paying too much for their insurance. It’s full of land mines and we’re just seeing these stories every single day of people who are getting wrong advice from their HR departments and they’re confused and they don’t know what to do.

The world of Medicare is full of land mines. Click To Tweet

All valid points. Once someone completes these programs and learns what you are trying to teach them, is there any certification that comes out of that?

We have considered that issue over the years, offering a certification. We do offer CE credits, continuing education credits for certified financial advisors so there is that. We don’t offer a specific credential partly because, I don’t know, I just have a personal objection to credentials that are intended to maybe sway clients into thinking that advisors know more than they do. I don’t know, I don’t want to get to too much of that.

I hear you. I get what you’re saying. I know that a lot of my peers, our peers use these initials after their name for credibility that is really, there’s no way you can use that to equate that with ethics.

That’s right.

Somebody may have a lot of knowledge, it doesn’t mean that they’re going to use it to the client’s advantage. Many times it’s used for their own advantage just to try to get somebody through the door. I agree with you but I still think that the program is really good and I think that it’s some aspect of training and learning that the CFP program, which we’re both CFPs and we profited it a long time ago. I don’t know that they really get that involved in either of these two topics in the CFP program.


It really is a big gap in learning that we really need to address. People assume that we understand all this stuff.

Don't assume all financial planners truly understand Social Security and Medicare. Click To Tweet

For so many years advisors have just said, “That’s not my job. It’s just not my job, it’s too complicated.” What we are finding is that as the baby boomers are retiring, this is a whole different generation from the generation that advisors are used to working with. The older generation they would go to the advisor and say, “Tell me what to do and I’ll do it.” Baby boomers are approaching it entirely differently. They’ve been managing their 401K plans on their own for all these many years. Many of them have never even talked to an advisor until they approach retirement and then they realize how complicated everything is, and very often they start the whole process with Social Security and then Medicare.

Very often they are looking for an advisor who understands these subjects. Then they may or may not give them their retirement money to invest but they want to get their questions answered first. That’s really why we created these programs – this is where baby boomers start, they want to know about Social Security and Medicare first and then they will talk about their investments after that.

Well I think that I went to my personal financial advisor, meaning I looked in the mirror and okay, Lynn, you are approaching, this is last year, you’re approaching 65, you’ve got to make a decision about Social Security, you’ve got to make a decision about Medicare. When I turned 62 it didn’t even occur to me that I needed to even be thinking about Social Security because I had no intention of taking it at that point.


I’ll tell you it is a tremendous learning experience to go through it yourself and nobody can replicate that one.

That’s right.

When you’re talking to people who are advisors about these two topics you might want to think about the fact that, hey maybe somebody who’s been through it can even give me more information. I honestly say it was high drama. I just could not believe all of what was there, I just didn’t believe the choices and what I had to do. I think what you’re doing is really very well intentioned and it is needed.

Thank you.

I applaud you for that. Let’s talk about some of the ways that you know that you’ve seen some results of your knowledge and how it directly applies to people’s lives, what differences you’ve made in people’s lives. You mentioned something about—

Well, I’ll tell you…

…about an elderly widow who went from $700 a month to $2,000 because you told her about some benefits she didn’t know she had. Tell me more about that.

That was one example there. I’ll just tell you this work for me is so gratifying. Even though I am not working directly with the clients, I’m working with the financial advisors and each financial advisor has you know dozens or hundreds of clients. I feel like what I am, what I’m putting out there is really radiating out into the world and it really is changing people’s lives. The number one thing that we talk about is the lifetime value of Social Security benefits. So many people claim benefits early because they figure it won’t make a difference. Might as well claim at 62, it’s only a few hundred dollars less than I get if I claimed it 66 or at 70, so I might as well go ahead and get started.

One of the first things we did when we developed this program was developed a set of calculators that actually run it out over your life expectancy. You can set any life expectancy you want but you can see over your lifetime what the difference will be if you claim at 62 versus 66 or 70. That’s number one, it’s just really understanding the lifetime value of that income stream. Then as far as the individual clients are concerned, the story that you’re mentioning is that this was an advisor who called and just said… This just made our day. She had an elderly woman in her office, the woman was getting about $700 a month in Social Security. The advisor knew that she was divorced and knew about divorced spouse benefits.

She said to the woman, “Did you know that you could apply for divorce spouse benefits because you had been married more than 10 years?” They got on the phone to Social Security, it turns out yes she could get the benefit and it raised your benefit to something like $1,100 dollars a month from the 700. Then the advisor said, “You know what, if your ex-husband dies, that amount will double, because you will be eligible for a divorced spouse survivor benefit.” And wouldn’t you know just a few months later he did die and it doubled her amount.


Now people find a little humor in this and say, “Well in mysterious circumstances, huh.”

No, I didn’t even go there.

Good, good good good!

That is pretty funny.

It is true. This is something that women need to know about anyone who had… In this case this was a marriage that was way early in the woman’s life and so she never would have even thought about it. That’s a very important thing for women to understand, is that if you have been married more than 10 years, you can collect a benefit based on your ex-husband’s work record. Depending on your age you may be able to take that benefit while letting your own benefit grow. Now they changed that rule and you had to have turned 62 by the end of 2015 in order to take advantage of that. Still, there are probably some women listening here now who may have stayed home with their kids, they may have a rather low Social Security benefit. They can claim a spousal benefit based on their current husband if they’re still married or on an ex-husband if they are divorced and were married over 10 years.

Just to make the playing field equal we have to also say that that applies to ex-wives as well. Husbands can claim under ex-wives. If you were fortunate enough to have married a very wealthy or highly productive woman and then divorced, you might be able to get something from her.

I’ll tell you something to preserve the gender stereotype if you will. We’ve had high-earning men whose wives have died and so they are widowers. What they can do is receive a survivor benefit based on their deceased wife’s record while they let their own benefit grow to age 70. They can start that survivor benefit as early as age 60. We encounter a number of high-earning people whose spouses have died and they can take advantage of that survivor benefit.

What other wonderful stories can you think of?


How about on the Medicare side? Is there somewhere where you can think of some event where you helped somebody… You mentioned before about people paying really high premiums for benefits they’re never going to use or for programs that are just way too rich for what they need.

One example in the Medicare realm is somebody who retires and they have good pretty good health insurance at work. They retire, the HR representative tells them to go on to Cobra. Cobra is a way for people to continue their employer health insurance for another 18 months or so after they leave employment. They have to pay for it themselves but they can still continue on that plan. The problem is that once they leave employment they have eight months to sign up for Medicare. If they don’t sign up for Medicare during that eight-month period, they will be subject to late enrollment penalties when they finally do sign up.

Even worse, when they come off the Cobra after 18 months they can’t just sign up for Medicare at that time. They have to wait until Medicare’s general enrollment period which is from January to March of each year, with coverage starting the following July. What basically happens is they end up with no coverage for some period of time until the Medicare starts. HR directors are doing this because Cobra is what they understand. They are used to referring retiring employees to Cobra and they don’t understand that they’re actually doing them a disservice because it messes up the Medicare part of it.

I wonder what kind of corporate liability exposure people have in situations like that where it’s just an automatic thought you just go into Cobra without…

It’s a good question. Now we have pretty much blanket advice for anyone who turns 65, call Social Security, explain your health insurance situation. If you keep working after age 65 and you have a good plan and your company, your plan covers 20 or more employees, you don’t have to sign up for Medicare right away, you can defer it. But, mistakes get made. If you get wrong advice from anybody other than a representative of the Social Security department administration, you have no recourse. That’s why we advise everybody even if you think it’s clear what you should be doing at 65, call Social Security and make a record of that conversation.

If you go back at say 68 and say, “But my insurance agent or my HR person told me I didn’t have to sign up for Medicare yet,” and Medicare says, “Yes you did, we’re going to slap you with three years of penalties,” you have no recourse.

What are those penalties like?

10% of the part B premium. The part B premium this year $134 a month so it would be 10% added to that. It’s for every year that you went without Medicare and it continues for the rest of your life. It’s an easy charge to avoid if you do the right thing and know what you’re doing.

Wow. There’s incentive enough to say, “I think I better check this out.” Yeah, okay. Very helpful, a lot of very good stuff. Let me switch this around at this point because I’m interested in something that I think is very valid to get into this conversation. That is when you were younger, you mentioned the fact that your father was an accountant and taught you to be accountable for everything that you spent. Other than that, what was your first memory around money?

I would say the first memory was that we didn’t have enough of it. I remember not being able to get a new coat because there wasn’t enough money. I remember having to go another year without new shoes because there wasn’t enough money. My father had worked as a bookkeeper for a small business in town and then he did what I did you know many years prior, he went out on his own and formed his own business as an accountant with the clients. There were some very lean years in there. That’s pretty much what I remember about money. But then I will say as I got into high school he was doing better.

I was getting what I guess turned out to be a generous allowance because I ran into a friend at a recent reunion and she said the thing that she remembered about me in high school was that I had such a big allowance, whatever that means!

Was it the difference between a quarter and fifty cents?

You know what it was… I cooked up this scheme that if my parents would give me a larger allowance I would buy my own clothes. I think at the time most kids were getting about $5 a month for their allowance and I talked my parents into giving me $20 a month and I would buy my own clothes.

Wow, that’s impressive! I think I was the five dollars a month crowd.

Yeah, worked for me.

Wow. So you always had new clothes?

Yeah well, you know.

Well that’s probably what your friend saw and thought, “Wow, you must have a tremendous allowance…”

Could be. I don’t know, I think my parents were just so grateful to be doing better by then that they were happy to share it. I feel the same way. I share it with my kids, I’m not making them wait until I die for them to get their inheritance, I’m helping them out now. It’s just one of those things I want to do.

You said your mom was a stay-at-home mom?

She was a stay-at-home mom until I was about 11 or so and then she went to work in my father’s office. I remember them coming home from work and sitting around the kitchen table and talking about money and finances and taxes and all of that, which now I find is so rare.

It sure is. That’s amazing! Okay, so then you what did you do with all that information? You said you started being a stockbroker yourself. Prior to that, had you done any investing?

No, I had not. In fact, my father wanted nothing more than for me to go into business with him and I just didn’t want to do it. It was not appealing to me at all. By the way, my ex-husband was the exact opposite of my father in terms of keeping track of money, which he did not do at all. After I went through that, not only did I need to support my family but I really wanted to learn more about money and investing and how to make more of it. That was part of what drove me into the you know investment business at that time.

Did your ex-husband ever share any information with you about mutual funds or finances or any of that?

He was a trader, he was in a different area.

Okay, all right. I thought he was just standard stockbroker. Okay. So, do you ever see yourself being retired?

I love what I do so much. And because I feel like what I do is still so relevant and needed in the world that right now I definitely cannot see myself retired. I could see myself maybe going into another direction. I’m thinking about adding on some information on life planning. We’re talking about generation planning, which is you know certainly uppermost in my mind right now as I contemplate the last third quarter of my life. Just getting my affairs in order so to speak. I feel like a lot of people are going to need some help with that.

That sounds good, we all appreciate the fact that you are planning on doing that.

Are you not going to let me retire?

No, you have way too many important skills for the rest of us to look good. We need you to stay around. In your relationship with your daughters, have you taught them much about money yourself?

Probably not as much as I should have. A little bit you know in terms of, you guys should make your IRA contributions. I have one daughter who is a starving teacher. She’s a teacher for a private school system, she doesn’t make very much money at all, she can barely pay her bills… I did help her buy a house, which really was an important thing for her. The other daughter is following in my footsteps, she’s a freelance writer. She’s doing quite well and so I’m talking to her about the retirement planning and so on. I probably should be doing more in that area though. I should probably sit them down you know and talk about some of these investment instruments that can help them have their money make money.

That is another method that I would like to pass on to women in general is to not be afraid to take risks. One of the best things I’ve done with my own money is you know I bought some pretty good stocks that have done pretty well. I just see too many women especially who are just afraid to dip their toe into the stock market or into any investments that are you know that fluctuate in value and I think they should not be afraid to do that.

Well then I think you ought to get them both a copy of my book called Power Of The Purse.

I will do that!

Which is designed to help women who have no knowledge of this stuff to dip their toe in and say, “Oh look, this is how it works.” Okay, so one other question I wanted to ask you is, who is the most influential woman in your life and what advice did she give you?

I saw that question before this interview and I have racked my brain and I cannot think of anyone. I will mention one person and it was the author of the first financial planning book I ever read, which was around 1980. Her name was Venita Van Caspel. You remember her?

Yes, I read it too and I loved her.

Yeah, The Power of Money Dynamics I think it was. That I will say was my first introduction to the whole world of personal finance. I would have to name her.

Okay. She was a character. A very flamboyant woman. What I loved about her was the fact that she didn’t try to temper who she was by wrapping herself in all kind of masculine clothes and demeanor and everything else. She was who she was.


I think that’s part of the appeal, was that she didn’t give up anything to be who she was and I love it.

Yeah, I’m a woman and proud of it.

Yeah, exactly. That was really pretty cool. Well, I think we’re at a point here where I have to wrap this up, otherwise we’ll go on for hours.

It’s been great fun.

Which isn’t a bad thing. I want to say my thanks to my guest Elaine Floyd. To all of you in my Power Of The Purse community, I hope today’s podcast was helpful in enriching your understanding of money and how it can help you achieve your life goals. If you’d like to spend 15 minutes on a call with me and ask me questions about your personal finances, please go to my website powerofthepursepodcast.com, select the “Contact” tab and find time that works for you. Thanks again Elaine Floyd for sharing your time and your knowledge. Until the next time, thanks for listening. Remember money is not the enemy, your ignorance of it is. Goodbye for now.

More info:
Horsesmouth is hosting a two-day workshop for financial advisors on Social Security and Medicare on October 26-27 in San Francisco. Call 888-336-6884 or visit www.horsesmouth.com for more information.

How to contact Elaine:

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