"There's No Account With Your Name on It" — Chris Orestis Debunks Social Security's Biggest Myth

Paul Tyler (00:01) Hi, this is Paul Tyler and welcome to another episode of the L and A Hub podcast. And this can be a really interesting podcast, particularly in light of recent news on the solvency of the Social Security Trust Fund and a lot of the policy initiatives that have been proposed to solve our retirement crisis. And Chris Orestis is our guest.

President of Retirement Genius, and I think, you know, Chris, you gotta tell me — I would say you are a rare combination, okay. You're a Washington insider, spent decades lobbying for the life insurance industry. Then you turn around and you build — let's see, no, I'm probably wrong, you tell me — two companies that are putting tools in the hands of consumers to make them more educated and better understand how to use the products and policies we have. How did I do? Is that fair?

Chris Orestis (01:07) Yeah, yeah, yeah. No, absolutely. I'm a three-time founder. Three, three, three — and the third now, Retirement Genius. We launched in 2020. It's an information and resource hub for both agents, advisors, and the long-term care world. And by that I mean home care companies, assisted living practitioners, and consumers. And what I've focused on ever since coming into the business when I got out of college — as you said, I was in Washington, D.C., I was in the White House, I was on Capitol Hill working for the Senate Majority Leader — and then I moved downtown and worked for the old HIAA, which is now AHIP, and ACLI as well, the American Council of Life Insurance, as a lobbyist. And left D.C.

And started my rounds of companies where the mission was consistently this: how could we help seniors and their families better prepare for, but also better handle, the reality of what was going to happen to them as they entered retirement, as they were aging, and as their health was declining — particularly the impact of longevity risk, and how a long-term-care-type event, a health-related event, can very quickly wipe out somebody's retirement plans. The best of plans can very quickly go awry when it goes from "we're doing well, we're running errands, we're going on vacations" to "slip, fall, going into a rehab facility, and you're going to be discharged in 24 hours — what are you going to do now?"

And all of a sudden families are looking at each other trying to figure out one of the toughest equations in the world — how to crack and handle the long-term care industrial complex in the United States. That's an area we've really focused on for now 30 years.

Paul Tyler (03:14) Well, I think you call it the long-term care benefit account — industrial complex, yes. I listen — it's incredibly hard to navigate. I had to do it with, let's see, two parents and then two in-laws. This is hard.

Chris Orestis (03:37) Well, and imagine this, Paul. You're a professional in the insurance world — you've navigated it. Imagine an absolute civilian who has never thought about this, doesn't even really understand the difference between Medicare and Medicaid, what's covered, what's not, how do you qualify — just operating under an assumption: "well, either it's never going to happen to me, or when it does, it's all taken care of." And then you get a real rude awakening.

So you've navigated it. Imagine the people who've had no thought about this, no education about this, and then they're just thrown in the deep end wearing cement galoshes, and they've got to start swimming hard to figure out how they're going to handle this.

Paul Tyler (04:21) Yeah, well, I'll tell you the equation was tough for me. My parents had me when they were older, so I kind of faced a crisis a lot of my peers are going through or have gone through recently. My parents were out west — Utah and Idaho — and the cost of long-term care out there was a third of what it is if I'd pulled them to New York. But the challenge is, I have to watch my phone every day and get a pit in my stomach when I see an area code calling, because — what went wrong?

Chris Orestis (05:15) I would say anybody listening to this episode either has their own experience with trying to deal with this, or knows somebody very close to them who has. And if they haven't had it yet, it's going to come. Anybody who thinks it isn't going to happen to them — you are very wrong, because it happens to all of us.

Paul Tyler (05:36) Well, it does. I'll ask you the question and give you a little of my perspective — why hasn't our industry done a better job providing protections for long-term care? I started my career mostly at MetLife, and I think we had a lot of very committed executives focused on making this product work, and put a lot of money and energy into it. But the math just didn't work. I think the bulk of our long-term care policies assumed long-term interest rates were going to be 8%. What's the ten-year today — maybe 3-4% on a good day. And the lapse rate was assumed to be 2%, and it was zero.

Chris Orestis (06:44) Well, it's not for a lack of effort or trying. The industry has certainly been out there shouting into a silver tsunami hurricane about the need to plan, the need to have long-term care insurance or some kind of coverage in place. But it's a combination — the industry did have some very poor product design assumptions in the early days, and it's come back to bite them. A lot of carriers abandoned the market; there's only a handful still standing. We've seen an evolution in the market of standalone long-term care insurance policies, which are still out there. Short-term care insurance is on the rise. But a lot of the growth in long-term care insurance has come from hybrid policies — combining a life insurance policy and death benefit with long-term care insurance ability to switch, or even annuities. There's also been a lot of growth over the years in the use of life insurance settlements to be used for long-term care spending. So you've seen market innovations and market evolution, but in the end we're still sitting here with maybe 7 million in-force long-term care insurance policies across a population of 340 million people in this country.

And the flip side of the problem has been the consumers themselves. Families don't want to think about this, don't want to talk about this. There's an assumption it isn't going to happen to them. Then when problems arise, there starts to be "care creep" in the family — family members start becoming caregivers and don't even realize it. They just start thinking this is part of life they're living, and some become practically full-time home caregivers, not realizing this is the problem they should have been preparing for, because of the toll it can take on everybody in the family. Everybody gets hit by that circumstance.

Chris Orestis (09:01) So the question becomes: what can people do to plan, and what can people do to react when care is needed? Coming back to the topic we're covering today — Social Security, entitlements — it's important for people to understand: Medicare doesn't cover long-term care. If you have an incident and go to the hospital, you're discharged directly into a skilled rehabilitation facility, a nursing home. Medicare will cover that for 100 days — full coverage for 20 days, partial coverage with co-pays for 80 days. That's it. That's short-term rehabilitation coverage, not long-term care.

Social Security — if you're collecting it, you can start to divert that monthly income toward care costs, but it's not a long-term care insurance policy. So what ends up happening for many people is Medicaid becomes the default. People start a "Medicaid spend-down" to get themselves below the poverty level so they qualify. Medicaid is for the poor, the disabled, and children. But there's a cottage industry in place to help middle-class and upper-middle-class people who wouldn't otherwise qualify hide and spend down assets to get onto Medicaid. I've always said: Medicaid is the payer of last resort. It should not be your plan of first resort.

Because guess what — be careful what you wish for. If you're on Medicaid, you're not making the choices. Nine times out of ten or more, you're going into a nursing home, and you're sharing a room with one or two other people. You don't even get to pick the nursing home.

Chris Orestis (11:22) You get what's available — beds available in the regional area you're in, based on where you live. That's it. People get shocked — they get onto Medicaid thinking "great, now I'm ready to move into assisted living, I'm ready for home care." Nope — nursing home. That's where you're going. We've got to eliminate the misconceptions, and we also need to talk about the dicey, rocky future these entitlement programs are facing as we move forward, because insolvency is looming.

Paul Tyler (11:57) Let's talk more — we'll dive into the insolvency question. But before we move on from long-term care — it feels like the insurance industry said, "we can't actually guarantee long-term care, but we can help fund it when it happens." I look at some of the carriers I've worked with, where the solution isn't a huge guarantee but accelerated access to funds. And some of the bigger holders, like Genworth, have said, "what business are we actually in?" — and built something like Care Scout. How is that working? Is that helping strengthen the safety net for people who do have the policies?

Chris Orestis (13:09) Yeah, no, definitely. When you can marry the benefit that pays for care with care navigators and care providers, as opposed to them operating in separate silos — which happens a lot. Those selling long-term care insurance as a catch-all phrase often aren't really thinking about the care-provider side of it; it's just "let's get you into a policy." And the care providers are busy doing their thing and aren't necessarily thinking about the insurance side until it walks in the door, and then they don't know what to do with it — "let us know when you've activated your benefit, and if it qualifies, we don't know what to tell you."

So when you see an arrangement like what Genworth has done with Care Scout, or a company like Amada Senior Care — one of the nation's bigger home care franchises — actively training their people to help families activate and get on claim with long-term care insurance policies, working with insurance distribution and insurance carriers — that's a smart alignment of both sides of the coin, as opposed to operating in separate silos, which does a disservice to the person who needs care and the family impacted by the situation.

Paul Tyler (14:39) Interesting. Let's shift gears a little bit — a few years earlier — retirement, when you take Social Security. Since I got into the business, we've all been talking about 2035 — what happens when the Social Security Trust Fund is insolvent, what happens with Social Security. In the mid-2000s, 2035 sounded like a long time away. Now suddenly we're at 2026, and I was on a bike ride the other day with a friend about to turn 62 who asked if he should take Social Security early because it's going to be gone. Up until the last few years I would've said let's figure out how to delay taking Social Security. But with some of these headlines, looking at our political situation right now, I don't know. You were there when we made adjustments to retirement ages —

Chris Orestis (15:52) Yeah, the nineties into the early 2000s. I'll say this — there's an old saying Winston Churchill coined about the United States: America will always do the right thing after it's exhausted all other options. That's what we're looking at with entitlements, Social Security, Medicare.

We have a political environment right now — as of today's recording, we're looking at the midterms of 2026, with a presidential election in 2028. Nothing is going to happen that addresses this, although the rhetoric — I've started to see some proposals emerge, some early proponents saying we have to address this issue — but there really won't be anything that happens, certainly between now and the midterms. And the second the midterms are over, the presidential election is on. So we're in a perpetual election mode through 2028 and the start of a new administration. That's when you'll see some real, serious action toward addressing this pending financial insolvency — not just for Social Security, but Medicare too. Both trust funds are equally stressed, and because of the economic disruption we've been experiencing, the insolvency prediction has moved from 2035 now to 2032. So we have a shorter fuse to work with.

But come 2028, past the presidential election, I believe we'll see serious efforts toward a combination of potentially collecting more revenue — we have fewer workers feeding into the system.

Chris Orestis (18:09) There's always a misconception among those on Social Security that "I've paid into the system, so there's an account with my name on it, with all my money sitting there tucked away." You've paid in, and you can actually go to socialsecurity.gov and look up your Social Security dashboard — where you stand right now, from your first paycheck that had taxes taken out, to today. Everything you've paid in is there — how long you've paid in, what you'd qualify for at 62, through full retirement age, up to capping out at 70, which gets you the highest monthly income. The question of "should I take it at 62" — remember, if you do, you're locking in the lowest benefit amount for the rest of your life. At full retirement age, it's much higher, and if you wait to 70, it's almost twice as much — almost double the amount at 70 versus 62. That becomes a question of what you think your longevity is and your financial wherewithal. For me personally, I've mapped everything out so I don't start taking Social Security until 70.

Paul Tyler (19:32) Yeah. Well, here's the wrinkle — if they don't solve it, how do you make the numbers work? You either increase taxes on workers, or — and I think a lot of people think this is the more likely scenario — do some needs testing. If I start taking it at 62, what year is that in the election cycle? I may get twice as much as I would have, but maybe that got capped, and I should have started taking it early before they changed the rules.

Chris Orestis (20:22) Well, to solve this financial equation, it's going to be a combination of more revenue and some adjustments to spending — is there needs testing? Does Jeff Bezos need to collect Social Security? As well as maybe looking at longevity and whether we change what full retirement age is. Are there adjustments to age factors around qualifying? Not to mention survivor benefits, spousal, whether divorced or widowed, dependent children in terms of survivor benefits. There are factors there, but the vast majority really comes down to an aging population living longer, with access to more health care technology, extending life expectancies way beyond what Medicare or Social Security were ever initially designed for. No one was expecting people to be on those programs for 30 years, but we're at a point now where 20 to 30 years can easily happen for people on the benefit.

So a combination of bringing more revenue in through taxation, probably targeting high-income workers — I've seen a proposal that anybody earning $400,000 and above would continue to pay into Social Security, versus tapping out at around $165,000 paid in based on income. When you hit that limit, you're done for the year. A lot of people don't realize they stop paying somewhere around September, October, November.

Chris Orestis (22:46) For a higher-income person, that would just continue, maybe even at a higher rate, while also offsetting some expenditures. I do firmly believe — maybe it's residual optimism — that by 2028 a serious effort will have to be made, because the flip side is: if you get to insolvency, that's an immediate 20-25% cut to everybody on Social Security across the board. That's devastating for those people and their families, and devastating for our economy — all that spending power disappearing from 70 million people would be a massive hit. On top of it, there would be negative implications for Medicare too — higher premiums, fewer benefits, more restrictions. You have to solve both of these equations simultaneously, because they ride side by side. In retirement, the only difference is Medicare, you qualify at 65; Social Security, at 62.

Paul Tyler (24:19) Yeah, I guess here's a question — you'd think this would be a pivotal moment for the annuity industry, because there's probably never been a stronger case to say, "do you want to wait for Washington to solve this, or create your own retirement savings plan that will be there?" What should the industry be doing? Are we on the right course — stay the course, do what we're doing — or is it new products, or ancillary services like what Genworth put in place on the long-term care side?

Chris Orestis (25:01) Yeah, we've seen record numbers for annuity sales year after year since COVID, at least. But I do believe there needs to be more of a direct connection to annuities as part of the solution to these pending crises — protecting money in an environment that doesn't jeopardize its future, limits downside, gives some upside, and can be deployed toward retirement and long-term care costs. Making a more direct connection to the consumer, because I think many consumers look at annuities more as an investment vehicle and less as a vehicle that can address these pending concerns — particularly as a defensive hedge against the possibility of Social Security and Medicare cuts. That same message can be very beneficial to long-term care insurance sales, and frankly to life insurance sales too. The entire insurance industry is very well positioned to be a solution to the problem we're facing.

For advisors and agents in the market, they need to position themselves as well-informed solution providers, versus "I'm trying to sell annuities, I'm trying to sell long-term care insurance, I'm trying to sell life insurance." They should approach it as: these are all solutions in the toolbox that address the unique challenges that come from aging, declining health, and an unsteady entitlement environment with pending insolvency in the future.

Paul Tyler (26:58) That's great. Now pivoting slightly — if you were talking to a group of chief technology officers, chief information officers, what should be on their agenda? We've got AI, and I think there's a huge need for modernizing systems for customer experience. What would your recommendations be?

Chris Orestis (27:30) Two things. One, we're all seeing the backlash to AI with the consumer. I used to joke, two or three years ago, I'd be at industry meetings and see companies that weren't even tech companies putting "now with AI" on everything — everybody's got a "now with AI, as seen on TV." And there's a backlash — consumers are becoming very mistrustful of AI.

But AI used correctly, for carriers and for distribution, can help drive productivity and efficiency — but it cannot speak for or replace the human contact and human trust. Trust is so important between the consumer and the advisor, and I don't believe any consumer wants to communicate with, interact with, an AI agent, an AI bot. And let's also remember, AI can be used in a predatory manner against consumers — we're seeing an increase in senior scams and frauds that AI is enabling. AI can also be a protector — carriers using smart technology, verifying that agents are actually in good standing, that they're licensed, that they're actually humans. We're seeing all kinds of fraud where AI is impersonating actual humans and enrolling people in products — billions of dollars in senior fraud, partly driven by tech. So it's how do you use the tech for efficiency and for protection of the consumer, and how do we fight the predatory practices and the distrust and the knee-jerk negative response people are having to AI in the market now.

Paul Tyler (29:44) Interesting. On a positive note — what do you think the biggest opportunity is for growth in the market today? I mean the individual insurance and annuity market.

Chris Orestis (30:02) I think it's those able to position themselves and speak intelligently to what's going on in the market. We have a shifting demographic — by 2030, the last baby boomer turns 65 and the first Gen Xer starts turning 65. So the boom of retirement doesn't slow down, it just keeps going. The demographics are in favor of the insurance industry. The economics are in favor too — as people feel unsettled about economic conditions, insurance is a place of safety, a safe harbor. And politically, with the current chaotic environment — which won't last forever, this country's suffered through maelstroms before — coming out of the midterms and 2028, the political wind should be in the industry's favor too. The insurance industry has a very powerful political voice — insurance organizations, agents at the state level coming into Capitol Hill and state capitals are recognized and respected. Many insurance and financial advisors are elected officials. A unified voice speaking about the positive, safe-harbor practices of insurance, to both the consumer and political leaders, plays in our industry's favor. So demographically, economically, and politically, the wind should be at our sails going forward, with a real drive toward solutions and real deadlines facing us — 2030, 2032. Those sound like a long time away for a minute, but that's actually right around the corner. And we're well positioned to be the frontline tip of the spear of the solutions to these problems.

Paul Tyler (32:25) Chris, thanks so much. I love seeing your work appear and your opinion in a number of very prominent media outlets. If people want to learn more about what you're doing at Retirement Genius, what's the best way to follow you?

Chris Orestis (32:49) Absolutely — I'd always encourage people to connect with me on LinkedIn, just look up Chris Orestis. Check out our website, retirementgenius.com, and I'm always happy to take an email — chris@retirementgenius.com.

Paul Tyler (33:06) Great. Thanks so much, hope you enjoyed the show — leave us comments, love to get a review wherever you're listening. But most importantly, join us again next week for another great episode of the L and A Hub. Thanks.