Understanding Medicare Advantage Open Enrollment in Retirement

Medicare is such an important part of your life as you age and secure your retirement, but it’s often overlooked in retirement planning. You may have to pay IRMAA surcharges and really need to begin planning to get the most out of your benefits.

We’re happy to have had Shawn Southard on our podcast this past week to discuss Medicare Advantage Open and what it means for our listeners and clients. Shawn works in-house for us and will be helping all our clients with their Medicare needs.

Throughout the year, there are a lot of Medicare-related things that pop up that we really need to focus on. 

Note: Every month, we plan on having Shawn on the show to discuss questions that our listeners may have.

Medicare Open Enrollment Period

Medicare has quite a few enrollment periods that are easy to overlook. You can enroll when:

  • You turn 65 years old
  • You’re working past 65, retire and leave your health plan.
  • Annually, from October 15 – December 7 (this is when 95% of beneficiaries make changes to their plans)
  • January 1 – March 31st for Medicare Advantage policyholders, who can change plans or disenroll if they wish.

Medicare Advantage Open enrollment is what anyone reading this blog or who watched our episode will need to think about in January until the end of March.

What is a Medicare Advantage Plan?

Medicare Advantage plans, at a very high level, are often organized into parts by letters. But before we go into that, original Medicare is broken into:

  • Part A: Hospital coverage
  • Part B: Medical coverage
  • Part D: Prescription Drug coverage, optional but will incur lifetime penalty if not enrolled when eligible.

Part C is the Medicare Advantage plan. Medicare Advantage helps round out your Medicare. These are private plans that go through the insurance companies and are approved by Medicare. Each plan must offer the same Part A and B coverage as your original Medicare plan, but it is a private plan.

The Advantage plan offers additional benefits, such as:

  • Preventative Dental 
  • Preventative Vision
  • Hearing Exams

An Advantage plan may also combine your prescription coverage into the plan, but you’ll need to review each plan to learn more about the coverage offered.

Why Join a Medicare Advantage Plan Over Original Medicare?

A lot of you may be thinking, “Why would I switch from original Medicare to an Advantage plan?” One of the main reasons to make the switch is that original Medicare is only for things that are deemed medically necessary.

Medicare Advantage plans add in coverage for:

  • Annual physical exams
  • Dental cleanings
  • Eye exams
  • Hearing exams

Original Medicare plus a Medigap plan is an option, but this option comes with a premium that ranges from $130 – $150 per month.

Medicare Advantage has many great plans that have $0 premiums.

For a retiree, an Advantage plan often makes a lot of sense because they’re on a fixed income. 

Why Someone May Not Choose a Medicare Advantage Plan

Advantage plans seem very advantageous, but they’re also not for everyone. A downside of Medicare Advantage is that they are network plans:

  • Health Maintenance Organizations (HMOs), smaller network
  • Preferred Provider Organizations (PPOs), larger networks

You’ll need to go to someone in your network if you have an Advantage Plan. Original Medicare doesn’t have networks, so it’s easier for you to travel. You don’t need to worry about the provider being in network as long as they accept Medicare.

Medicare Advantage HMO requires you to stay in network. A PPO does have out-of-network options, but you may pay more for the services.

You need to consider the following when choosing a Medicare path (Original Medicare/Medigap or MedAdvantage):

  • Health
  • Lifestyle
  • Budget

Medicare is complex, and it’s easy to make a costly mistake along the way because of the amount of misinformation that exists. It is in your best interest to consult with a Medicare specialist before making any changes to your plan.

Why Someone May Want to Switch Medicare Advantage Plans

Since we’re in the enrollment period where someone can switch Medicare Advantage plans, the question arises: why would you switch plans?

Often, a person wants to switch Advantage plans because:

  • Doctors that they have been going to are no longer in their network, so they switch to a plan that allows them to retain the same doctor that they know and trust.
  • They plan to move and the new service area does not have their providers in network.

Shawn helps our clients choose the right plan for their medical needs and lifestyles. He has a strong educational background as a high school teacher and corporate trainer. In fact, his background as an educator is why he joined our team. He aims to educate each client, based on their individual needs, to find the best Medicare path.

Shawn needs to know your health/medical conditions, any prescription drugs you are taking, and your lifestyle (such as traveling) to help you select the right type of Medicare plan for you. 

Medicare is complex – especially if it’s not something you work with every day.

If you want to have an in-depth discussion about your Medicare situation and ensure that you’re on the right pathway, feel free to reach out to Shawn.

Click here to schedule a 15-minute call with us.

January 2, 2024 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for January 2, 2024

What Are You Getting for the Fee You Are Paying in Retirement?

Listen in to learn about the three major types of financial advisors and what each offers you. You will also learn about categories of our Wealth Integrated Management System: specialized investment strategy, a retirement-focused financial plan, tax strategy, estate planning, and other ever-evolving elements to cater to our clients’ needs.

 

What Are You Getting for the Fee You Are Paying in Retirement?

You may already have a financial advisor or are shopping for one, but you may not know what you’re getting for the fee that you’re paying. We’re going to try our best to outline multiple categories of fees to help you get your head around what different advisors may charge and why.

Reviewing 2023 in your Retirement

Listen in to learn the different episodes with information about what you need in retirement, including a power of attorney, estate planning, retirement income strategies, and more. You will also learn about the episodes on long-term care planning options, plus the basics of continuing care retirement community (CCRC).

Reviewing 2023 in your Retirement

Every week, we have podcasts come out, and as new listeners find us, it can get very tedious to find all the resources we provide. This week we have prepared an End of 2023 wrap up to highlight some of the episodes from this year. 

Reviewing 2023’s Episode List

What Are You Getting for the Fee You Are Paying in Retirement?

You may already have a financial advisor or are shopping for one, but you may not know what you’re getting for the fee that you’re paying. We’re going to try our best to outline multiple categories of fees to help you get your head around what different advisors may charge and why.

What are You Getting for the Fee You Pay an Advisor?

Fees vary greatly from one type of advisor to another. We’re not going into this saying one fee is good or one is bad. For example, if I said I bought a $3,000 car, what would you think? You would assume it’s not the latest model on the market and doesn’t have a backup camera, lane assist, or any of the fancy features a higher-end vehicle might have.

A $50,000 car will have all the bells and whistles, but you may not need all those features.

Financial advisor fees are very similar. Lower fees often mean that you’re doing more, and the advisor is doing less for you. But if you don’t need some services or don’t mind having a hands-on approach to retirement planning, then the lower fees are perfect.

With this in mind, let’s dive into the meat of the fee world.

Fees in the World of Financial Advisors

You may come across the following fees when working with a financial advisor:

Transactional Fee

An hourly fee is exactly what it sounds like. You pay an hourly rate in a pay-as-you-go type of scenario. The planner may also have a set fee for certain services. In many cases, you’ll meet with this person once or twice per year, and then you are responsible for executing the plan.

If you’re the type of person who does the following, transactional fees may be good for you:

  1. Does their own taxes
  2. Paints their own house
  3. Does their own yard work

Many people don’t want to build their own portfolio and would rather spend time with their family, but for others, it makes more sense to have a transactional fee.

Assets Under Management Fee

In an assets under management fee structure, you’re charged a percentage of the assets that you entrust under the advisor’s management. Fees can range anywhere from .3 or .4% to 2 or 2.5%.

So, if you have $1 million in assets that the person controls, your fee at a 2.5% rate would be $25,000 per year. 

Fees vary by region, investment strategy, types of assets and advisor.

Commission-based

In some scenarios, the advisor may be paid a commission for insurance products that they sign their clients up for or for stock purchases.

Assets Under Management Fees are the Most Common

As a financial advisor, we see that assets under management is the most common fee structure. While the range can be great, we see most advisors charging 0.75% – 2% fees, and the more assets under management, the lower the fee percentage will be.

What do you get for these fees?

Full-service or Concierge Service

You’ll pay the highest fee for this type of service, but you enjoy the most hands-off experience possible. You’re working with a specialist who handles your retirement planning and strategy for you.

In our business, we call this the integrated wealth management system and cover things like:

  1. Investment-How do we invest for a return with good risk management in place?
  2. Retirement-focused financial plan-We cover where you are today, Social Security, and whether you will have the money you need to reach your retirement goals. 
  3. Tax strategy-As you accumulate wealth, you have money in multiple buckets, and we want to pay attention to withdrawals and how that will impact you today and in the future. Minimizing your tax burden is really the goal for us in this regard. We can save some clients thousands of dollars by finding tax mistakes or employing other tax-saving strategies.
  4. Estate planning– In this category, we’re talking about wills, trusts, power of attorney, life insurance and more.

We also cover things like continuous care scenarios or long-term care, and it just keeps evolving. Our in-house Medicare Specialist works with our clients to help them onboard for Medicare, find the best solutions for them and really ease our clients’ minds in the long term.

If you’re not sure which fee structure is best for you, consider the following:

  • Lower fees mean that you take a hands-on approach
  • Higher fees mean that you take more of a hands-off approach

For our fee, we try to cover everything for our clients, from tax planning to Medicare and estate planning. You may not need this high of a level of service, but it’s often the difference between 0.75% and 2%.

So, when searching for a financial advisor, be sure to know exactly what you’re getting for your fee because it can be substantial.

Schedule a call to talk to us about our financial planning services.

Reviewing 2023: Retirement Podcast Resource List

Every week, we have podcasts come out, and as new listeners find us, it can get very tedious to find all the resources we provide. This week we have prepared an End of 2023 wrap up to highlight some of the episodes from this year. 

Reviewing 2023’s Episode List 

Finding an episode on your respective listening platform will vary, so we’re going to provide: 

  • Title 
  • Episode number 
  • Date 

We’ll also link to the location on our website where you can listen to each podcast to make it a bit easier to find. 

Ep. 193 – Navigating The Decision to Retire Now or Work Longer – January 16, 2023 

If you’re wondering if you can retire or if you’re ready to retire, you’ll love this episode. It can be an overwhelming process, so we take some time to outline important considerations such as: 

  • Budgeting 
  • Health and Age 
  • Goal and Interests 

This episode helps you think through your financial readiness to secure your retirement. 

Listen to the episode here. 

Ep. 197 – 10 Reasons Everyone Needs a Power of Attorney in Retirement – February 13, 2023 

Anything can happen at any time. A Power of Attorney, particularly a Durable Power of Attorney, is one that we’ve seen come up a lot this year with clients. Disability or incapacitation can happen at any time. 

We outline 10 very important reasons to have your Power of Attorney documents in order, including: 

  • Protecting Privacy 
  • Dealing with Tax Matters 
  • Having Someone to Manage Your Finances 

A Power of Attorney is up there in importance with your will and HIPAA authorization. 

You’ll learn the ins and outs of Power of Attorney documents in this episode. 

Listen to the episode here. 

Ep. 201 – Do You Need a Trust in Retirement? – March 13, 2023 

We did quite a few episodes on trusts this year because they’re such an important part of retirement planning. We’ve partnered with professionals in this area so that our clients can easily have a trust put in place for them. 

In this episode, we interview Andres Mazabel at Trust & Will. He addresses the common question, “Do I Need a Trust?”, to really help you understand if a trust is right for you or not. 

Listen to the episode here. 

Ep. 204 – Social Security Spousal Benefit in Retirement – April 3, 2023 

Social Security has a lot of complications, which is why we brought Heather Schreiber on to explain how spousal benefits work. In our example scenario, one client has worked their entire life, and his spouse did not. 

His spouse assumed that without working, she wouldn’t have Social Security, but we explained how she would receive $1,700 a month in benefits. 

For many couples, an additional $1,700 in benefits is completely finance-altering. If you’re close to Social Security age, this is certainly a good episode to listen to. 

Listen to the episode here. 

Ep. 208 – Maximizing Tax Benefits by “Bunching” – May 1, 2023 

If you’re charitably inclined, you can leverage “bunching” and donor-advised funds to save money on your taxes. In the episode, we discuss how you can bunch multiple years of contributions into one so that you can take a larger deduction. 

Utilizing this strategy has saved some of our clients hundreds or thousands of dollars. 

Listen to the episode here. 

Ep. 217 – You Have Enough to Retire, but How Do You Create an Income – July 3, 2023 

Creating income is challenging when you’re in the accumulation phase of life transitioning into the retirement phase. In this episode, we discuss how to put assets into buckets and methods that you can follow to have a consistent income. 

We talk about sequence of return risks and how to really have fun in retirement. 

Listen to the episode here. 

Ep. 219 – Annuities or CDs – What You Should Consider – July 17, 2023 

Last year, interest rates rose. For annuities and CDs, interest rates were favorable and therefore quite attractive to many people. In this episode, we cover what you need to think about when deciding between an annuity and a CD. 

Listen to the episode here. 

Ep. 223 – Protecting Against Cybersecurity Threats – August 14, 2023 

Cybersecurity is something that you may not expect to see on this list, but it’s a crucial topic that demands attention. Around this time of year (the holiday season), threats increase dramatically. 

You may receive spam and phishing threats from many directions, including texts and emails. 

We outline 14 items for you to consider to help protect yourself from these threats going into 2024. 

Listen to the episode here. 

Ep. 224 – Long-Term Care Planning Options – August 21, 2023 

Long-term care planning is something no one wants to think about, but it’s something that you really must dive into before you need it. Our guest Jessica Iverson talks with us about how this form of planning has evolved, the breakdown of increasing costs, and alternative options that are available. 

You do have options where you’re not stuck in a “use it or lose it” scenario, which is what we cover in great detail in this episode. 

Listen to the episode here. 

Ep. 226 – Integrated Wealth Management Experience in Retirement – September 4, 2023 

In this episode, we look at what integrated wealth management means and how it works in our practice. You will be interested in this episode if you want to know how we address: 

  • Income and tax planning 
  • Estate planning 
  • Long-term care 
  • Social Security 
  • Medicare 

Listen to the episode here. 

Ep. 231 – Social Security Taxation – How it Works in Retirement – October 9, 2023 

Many people are shocked to learn that they must pay taxes on their Social Security. We had our enrolled agent, Taylor Wolverton, CFP® walk us through: 

  • The factors and math behind Social Security Taxation 
  • How Social Security Taxation can impact your Retirement Planning 
  • How to know if you’ll be taxed on Social Security 

Listen to the episode here. 

Ep. 234 – Roth IRA – 5-Year Rule – Your Retirement – Part 2 with Denise Appleby – October 30, 2023 

Denise Appleby was our special guest during this episode, and she discusses Roth IRAs in such great detail that it’s a must-listen. We go over the rules for Roth accounts and conversions from start to finish in a nice and easy manner. 

Listen to the episode here. 

Ep. 235 – The Art of a Risk-Adjusted Portfolio in Retirement – November 6, 2023 

Risk in retirement exists, but you can use a risk-adjusted portfolio to hedge those risks. We explore determining risk tolerance and some of the strategy behind investment styles. We also take some time to define terms like: 

  • Core 
  • Tactical 
  • Structured notes 
  • Fixed income 

Listen to the episode here. 

Ep. 236 – Rae Dawson – The Basics of a CCRC – November 13, 2023 

Note: Rae was also on for Episode 236 on November 27 (listen here) for Part 2. 

Rae teaches a class on Continuous Care Retirement Community (CCRCs) at Duke University, and joined us on the podcast to dive in on the basics, such as: 

  • When’s the best time to join a community? 
  • Should you do an upfront or rent-only scenario? 
  • What to think about when choosing a CCRC? 

Listen to the episode here. 

Ep. 239 – Anne Rhodes – Estate Planning– Simplified – December 4, 2023 

Anne Rhodes from wealth.com helped us simplify estate planning in retirement. She works closely with us and our clients to explain: 

  • Legal documents you need 
  • Reasons to have a trust vs a will 
  • What certain documents do  

Listen to the episode here. 

We look forward to our new schedule going into 2024 where we’ll continue to provide relevant insights every Monday with a more structured format. 

Click here to schedule a call with us to discuss any of the topics above in greater detail. 

December 11, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage. Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for December 11, 2023

End Of Year Issues to Consider in Retirement

In this Episode of the Secure Your Retirement Podcast, Radon and Murs discuss the retirement issues to consider as we approach the end of the year. As the year ends and another begins, it’s important to have a checklist to ensure you have things closed out for 2023 and things set up for 2024. Learn about tax planning strategies to look at, such as threshold tax brackets, qualified charitable distributions, donor-advised funds, and more. You will also learn the benefits of having a Health Savings Account (HSA) and contributing to 529 accounts at the end of the year.  

End Of Year Issues to Consider in Retirement

Can you believe that we’re close to the end of 2023 already? Before the year wraps up, it’s a good idea to address end-of-year items and work your way through a checklist of sorts. You can also reference this list in 2024, so if you’re seeing this post after the end of the year, it’s still going to be relevant to you.

End Of Year Issues to Consider in Retirement

Can you believe that we’re close to the end of 2023 already? Before the year wraps up, it’s a good idea to address end-of-year items and work your way through a checklist of sorts. You can also reference this list in 2024, so if you’re seeing this post after the end of the year, it’s still going to be relevant to you.

We’re going to walk you through:

  1. Things to do before the end of 2023
  2. Things to do for a good start of 2024

Note: We do have an actual checklist that you can work through. If you want to get that checklist, feel free to schedule a call with us or send us an email.

To Listen to this CLICK HERE

End-of-Year Issues to Handle Before 2023

You’ll want to work on your assets and debt issues. First, look at your unrealized investment losses. For example, perhaps you’re holding onto Apple stock and it’s a loss right now. You can sell the stock as a loss and leverage what is known as tax loss harvesting.

You can use these losses to:

  • Offset gains
  • Reduce your ordinary income by up to $3,000 a year
  • Losses beyond $3,000 will carry forward to offset income in future years

If you have capital gains, you can erase some of these gains by using tax loss harvesting. You can sell the stock and buy it back after a period of time. 

Required Minimum Distributions (RMDs)

RMDs are something we talk a lot about on our podcast, and we have quite a few articles on the topic that you can review:

That being said, you’ll want to do a few things in terms of retirement planning with your RMDs. Based on your age, typically, if you’re in your early 70s, you’ll want to take your distribution before the end of the year.

Not sure if you need to take an RMD?

Discuss it with your financial advisor because distribution ages will vary based on when you were born

If you inherited an IRA or 401(k), you automatically have RMDs that you need to consider. Anyone who recently inherited one of these accounts will need to be sure that the account is empty within 10 years. You will need to consider whether (or not) you want to take an RMD on these accounts before the end of the year.

Tax Planning

The end of the year signals a lot of tax planning items that you’ll need to check off your list. A few of the most important things to consider are:

Do you plan on your income increasing significantly in the next year?

You can consider maximizing your Roth contributions going into the end of the year. If you’re over the age of 50, Roth IRA contributions max out at $7,500, and the Roth 401(k) maxes out at $30,000 in 2023 and will go up in 2024.

If you’re 59 1/2 or older, you can consider accelerating your IRA withdrawals since you’re in a lower tax bracket this year. You may also want to consider converting some of this money into a Roth account to leverage tax-free growth.

The annual deadline for Roth conversions is December 31st, however, you should get started on these before the beginning of December to give plenty of time for the process to be completed in your intended year.

Threshold Tax Brackets

Your adjusted gross income can push you into a higher tax bracket or impact your Medicare surcharges. Going back to tax loss harvesting, you may be able to leverage these losses to keep charges lower or avoid going into a higher tax bracket.

You need to be aware of your potential adjusted gross income.

If you’re reading this, reach out to your financial advisor and:

  • Ask what your adjusted gross income may be
  • Plan ahead, because your income amount now impacts your surcharges in the future

Medicare IRMAA surcharges will certainly impact your budget because you’re required to pay more for Medicare if surcharges are higher.

Are you charitably inclined?

If you like to donate to charity, it’s also an opportunity to help offset your tax burden. A lot of unique strategies can be employed in this realm. People who give money to charity can leverage:

  • Qualified charitable distribution, for anyone who is over 70 1/2. You can use one of these distributions to lower your tax burden. For example, if you take money from your IRA and have the check written straight to an approved 501(c)(3) charity so that it is never deposited to your bank account, the donated amount will not be reported as taxable income to you.
  • Anyone who reaches the age of RMDs (70 ½ or older) can also use this strategy. For example, if your RMD is $20,000, you can funnel $10,000 to charity using the same method above and only have $10,000 of your RMD be taxable.
  • Bunching contributions or setting up a donor-advised fund is also an option. For example, if you donate $10,000 a year to charity, it’s possible that you may not exceed the standard deduction and therefore, will not receive any tax benefit for your $10,000 donation. So instead, you can combine multiple years of donations together. If you were to combine 3 years of donating $10,000 a year into a one-time donation of $30,000, you can deduct the entire $30,000 in the year the donation occurs. This would give you a greater chance of exceeding the standard deduction and receiving a greater tax benefit by doing so.

Did you in 2023 or will you in 2024 receive a windfall?

If you receive a windfall, such as inheritance, lump sum payment, stocks, Roth conversion or some other major influx of money, you may need to make an estimated tax payment. If you don’t make one of these payments, the IRS can assess a penalty against you.

An estimated tax payment alleviates the penalty because if you’re within a certain percentage of what you owe, the IRS will be satisfied, and you can make any remaining payments at the time your taxes are filed.

A tax or financial advisor can help you with these estimated taxes.

Have there been any changes to your marital status?

If you got married or divorced, or your spouse passed on, it can have an impact on your taxes. Married filing single and married filing jointly are two very different things. Consulting with a tax professional about your situation can help you decide on how to handle your filing status this year.

You Have a Little Extra Money in the Bank

If you’ve had a good year and have made more money than expected, you may want to save some money. One thing that’s common is to put money into a Health Savings Account (HSA) if you are on a high-deductible health insurance plan.

For 2023, you’ll be able to put money into an HSA up to:

  • $3,850 if you’re single
  • $7,750 if you have a family health insurance plan
  • $1,000 extra if you’re over 55

These numbers will change in 2024.

The beauty of an HSA is that you can let the money in the account grow tax-deferred and then use the money for your medical needs. If you leave the money in the account until you’re 65, it can also act as a retirement fund.

401(k)

If you didn’t max out your 401(k), you can put up to $22,500 in the account in 2023 and an extra $7,500 if you’re over 50.

Roth IRA

If you’re eligible, you can put money into a Roth account. You can pull the money out of this account if you need it in the future.

529 Account

If you have kids or grandchildren and want to fund their college education, you can put money into a 529 account for them. You can fund this account with a gift exclusion of $17,000. There’s also a strategy to get up to $85,000 out of your estate and into one of these accounts, but you should work with a tax professional on this strategy.

Insurance

If you met your deductible for your insurance this year, try to get any of your medical needs met now because you won’t be paying for it. Working to get these procedures done now before you must pay your deductible again is an efficient means of using your insurance.

Depending on when you read this, don’t forget that open enrollment takes place in November and December.

Evaluate your Medicare and Supplement programs because there may be advantages to switching.

Estate Planning

Whether it’s the beginning or end of the year, you’ll want to focus on your estate plan. Review all your beneficiaries, including on your:

  • 401(k)
  • IRA
  • Brokerage account
  • Savings account

Of course, this list isn’t exhaustive, but we’ve covered some main points that are really important going into the final weeks of the year.

Click here to request a checklist with all these key items.

December 4, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage.

Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for December 4, 2023

Anne Rhodes – Estate Planning in Retirement – Simplified

Listen in to learn about the importance of documents like the HIPAA form, certification of trust, and why you should consider a trust versus a will. You will also learn how wealth.com is set up to reduce estate planning friction and simplify estate planning for financial advisors and their clients.

 

Estate Planning in Retirement – Simplified

Estate planning is a topic we often discuss with our clients. If you’re in the middle of retirement planning and trying to secure your retirement, an estate plan is something you want on your “to-do” list. Anne Rhodes, the Chief Legal Officer of wealth.com, joined us on our latest podcast, where she provides a simplified rundown of estate planning for our audience.

Estate Planning – Simplified

Estate planning is a topic we often discuss with our clients. If you’re in the middle of retirement planning and trying to secure your retirement, an estate plan is something you want on your “to-do” list.

Anne Rhodes, the Chief Legal Officer of wealth.com, joined us on our latest podcast, where she provides a simplified rundown of estate planning for our audience.

What Core Documents Make Up an Estate Plan?

Everyone – no matter the size of the estate – can break their estate plan into two large buckets. 

  • Bucket 1: Passing Away and Death: Who will step into your shoes? Who will help distribute these assets? Where are these assets going?
  • Bucket 2: Incapacity: Incapacitation remains a serious question because if you’re no longer able to make decisions on your own, you can assign someone you trust to assist you in this area.

Documents in a standard estate package should include a will, even if you have a living trust. Both a will and a living trust are key components of an estate plan. Even if you have a living trust, you’ll need a pour-over will.

A pour-over will is what initiates your asset transfer into a living trust at the time of your death if they’re not already in the trust.

You have a whole other set of documents that you need to think about with incapacitation:

  • Financial Power of Attorney: A financial document that allows someone to have signature authority over your matters for any financial documents that you must sign.
  • Advanced Healthcare Directive: This document may be called something else, such as a healthcare proxy or healthcare power of attorney.

HIPAA Form Purpose

A HIPAA document is a great example of a healthcare directive. When it comes to medical privacy, your agent acting on your behalf with an advanced healthcare directive does not have the power to access your private medical records unless the HIPAA is signed.

If your doctor does not have a HIPAA release on file, they cannot share pertinent information with the person that you want to make medical decisions on your behalf.

As you can imagine, if the person handling your healthcare decisions cannot access your medical information, they cannot make the best decisions for you.

Certificate of Trust

A certification of trust, also known as a certificate of trust, accompanies a living trust. This certification accompanies a living or revocable trust. What this certification of trust does is allow your bank to know that:

  • Your trust exists
  • You’re the trustee
  • The trust is 100% legitimate 

A certificate of trust is very important for streamlining your trust and ensuring that there are no issues along the way.

Trust vs. a Will

A living trust and revocable trust are the two most common forms of a trust because they’re a substitute for a will.

If you die without a will, your estate will go through a process called “probate.” Even if you have a will, your estate may still go through probate. A judge will be assigned during probate and must sign off on asset transfers. As you can imagine, involving a judge in every decision can take a while – especially in some states.

Court systems are handling a lot of cases, and if you’re in one of these states, a trust can help you avoid probate.

Probate also goes through the public system, which allows anyone to dig in and find information on what transpired during the probate process. In terms of privacy, you can keep much of your estate planning private with the help of a trust.

You may also have a trust because:

  • You own multiple properties across many states
  • You want to avoid probate in each state where you own property

If you secure your retirement and want to keep your estate out of probate, a trust is one of the best ways to achieve this goal.

Attorney Estate Planning vs Wealth.com (or similar platforms)

Digital platforms allow us to offer a simplified process of estate planning to our clients. Some clients are unsure if using an online platform like wealth.com is the same as working with an estate planner.

Wealth.com provides access to financial planners and similar professionals, streamlining the way that people create an estate plan.

Most people in the US can use wealth.com and go through the entire estate plan on their own. You must fill in forms online, which can speed up the process to make it much faster than working with a lawyer one-on-one.

Anne’s company, wealth.com, has had 70+ platform reviews from legal professionals, ensuring everything is accurate.

You can create a trust in 36 minutes with a platform like wealth.com, breaking down barriers that exist with meeting with a lawyer.

 Can all families be helped with an online platform like wealth.com?

No. There are special case examples where we cannot serve certain families well, such as special needs children. Wealth.com is undergoing a survey to better help these clients. If, during the onboarding process, you answer that you have one of these situations, you will be prompted to find someone who specializes in these areas.

Do online platforms offer any personal help?

You may have one-off questions that you need answered when forming a trust, creating a will, and so on. Many platforms will not provide direct assistance in this area, but they may have an attorney network who will be available to you.

Wealth.com vs other platforms

We’ve seen many legal platforms that attempt to help in numerous areas of law, and this is where things can kind of get messy. Wealth.com focuses on estate planning only and has built a team that can help in complex estate matters, whereas many do-it-all platforms cannot.

Since you must connect with financial advisors to use the platform, you also receive additional help you wouldn’t otherwise.

Note: You need to work with a professional advisor, like Peace of Mind Wealth, who grants you access to Wealth.com and can walk you through the process. If you just go to the website, you won’t be able to access the wealth of tools available.

Once you’ve filled out all the estate planning documents, printed them out and notarized them as needed, your estate plan is in place.

If you’re interested in financial planning and want to add an estate plan into the mix, feel free to reach out to us.

Click here to schedule a call with us today.

November 27, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage. Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for November 27, 2023

Rae Dawson – The Basics About a CCRC in Retirement – Part 2

In this episode of the Secure Your Retirement Podcast, join Rae Dawson as she breaks down the fundamentals of CCRC, covering everything from costs and waitlists to choosing the right time to make the move. Ever wondered about the factors influencing CCRC expenses? Rae delves into that, offering insights on what to consider when evaluating the cost of a CCRC. Now, imagine this: How might being flexible in your requirements help you sidestep a potentially lengthy waitlist, which can stretch anywhere from 4 to 15 years?  

The Basics About a CCRC in Retirement – Part 2

How does the choice of location impact the cost of Continuing Care Retirement Communities (CCRC)?  The expenses associated with CCRC are influenced by the contract type and community location. Living in a sought-after real estate location may come with a higher price tag compared to a more rural setting. As you contemplate the costs of CCRC, it’s crucial to factor in…

The Basics About a CCRC in Retirement – Part 2

Rae Dawson is back with us this week to continue our series on CCRC (continuing care retirement community) and how it fits into your retirement planning. While much of this information is going to relate to your area, it is focused on Raleigh, NC.

Note: If you missed Part 1 of this series, click here to read it. You can also listen to the podcast version here.

To  listen to this Episode CLICK HERE

Triangle Area CCRC Costs

CCRC costs are driven by the type of contract and community location. If you’re in a popular real estate area, you can expect to pay more than if you’re in a rural area. When thinking about the cost of a CCRC, you need to consider:

  • Buy-in
  • Monthly fee

Rental CCRCs are different than traditional ones because they do not have a buy-in, and monthly fees are much higher. Today we will be doing a deeper dive into Traditional CCRC costs.

For a traditional CCRC, you’ll often have 2 contract options: a single occupant contract, or a double occupant contract. The second occupant is often a spouse, friend, or sibling. Typically, no more than two people can live in a residency. 

In the Triangle area, a buy-in for one of these communities ranges from $60,000 for a studio, and up to $990,000 for an extensive contract cottage. A higher buy-in rate for the extensive contract cottage because you’re paying for your higher level of care upfront. The buy-in is a one-time cost.

For double occupancy, your buy-in could be anywhere from $140,000 for a studio to $1,065,000 for a cottage. Why does the studio buy-in jump up for double occupancy? Most communities will not allow double occupancy in a studio.

Often, if your buy-in is on the lower end of the range, the community’s policy is if you leave the community after 15 months, your buy-in return is $0. However, if your buy-in is on the higher end, some communities offer a 100% return of the buy-in to your estate. If you secure your retirement and want to leave money to your heirs, it’s often best to pay the higher buy-in so that they receive the buy-in amount back.

What is a Cottage?

A cottage, in this sense, is a single-family home. The buy-in price is driven by square footage. A larger cottage may be 3,000 square feet, so a 600 square foot studio will cost significantly less. When moving to a CCRC, you have a lot of activities that you can engage in at the common area of the community. You’ll likely spend less time in a cottage by yourself, so downsizing is often a great option.

Different communities may have different names for types of homes. You may hear “duplex”, “triplex”, “apartment”, etc., in addition to studio and cottage. Keep in mind that the buy-in prices are driven by square footage if the different names for types of homes becomes confusing. 

Monthly CCRC Costs

On top of your buy-in costs, you also have monthly fees. For a Traditional CCRC, there are ranges for the monthly fees:

  • Single person studio is as little as $2,150 per month
  • Cottage can run as high as $8,000 per month
  • Double-occupancy, one-bedroom ranges from $4,580 to $9,840 per month

In most cases, some meals, cable television, most utilities, transportation to and from the doctor’s office, gym or pool access, and some other perks may be included in the monthly fee. It’s important to know what amenities are included in the monthly fee, as they vary between communities and are probably things you pay for on an individual basis before living in a CCRC. 

Qualifying for a CCRC

A general rule of thumb when pursuing a Traditional CCRC is that your monthly income should be at least 2 times the amount of the monthly fee. Your assets should be greater than 3 times the amount of your buy-in fee. If you’re moving into a $2,150 studio, your monthly income should be $5,000 to support this.

Traditional CCRCs will feel comfortable with allowing you to move in if you meet these income and asset requirements.

I’m Ready to Go. What’s the Waitlist on a CCRC?

CCRCs often have a waitlist because they’re in high demand and communities aren’t opening up at an adequate rate to meet the demand. It is not uncommon for a waitlist period to be 4 – 15 years. However, if you’re flexible with your floor plan requirements, you may be able to circumvent these long wait times.

In some communities, you can remain on the waitlist for your ideal floor plan and switch to your ideal unit in the future, but it’s often discouraged. What a lot of communities will do is allow you to downsize. Let’s say that you’re in a 3,000-square-foot cottage and one spouse dies. You would rather move to a smaller footprint, and the community may allow you to do this.

However, do not put all your eggs in one basket. Instead, you’ll want to be on multiple waitlists at a time. If you receive a serious diagnosis, you may be prohibited from entering a CCRC. It’s always best to have multiple options.

Joining a CCRC Waitlist

If you want to join a waitlist, there are steps that you’ll need to take to make all this work. You’ll need to:

  • Pay an application fee. It’s typically about $300, and it’s not refundable
  • Provide general financial and health information 
  • Moving from a waitlist to a ready list will involve providing your financial statements

Communities will run a financial assessment before accepting you onto a waitlist, knowing the waitlist period is 4-15 years. You will also need to pay a $1,000 – $5,000 waitlist fee, which is refundable if you choose not to move to that community. If you do move to that community, the fee will be applied to your buy-in.

What Age Should You Start Looking Into a CCRC?

Today, the average CCRC entry age is 75. People are moving into these communities earlier than in the past due to competition and the attractive convenient amenities. The average age of a community may be 80 – 85. People who live in CCRCs often live longer than the normal person, with some living until 90 – 100.

Most communities require 6 months to 3 years of being healthy to move into a CCRC, so you can live more independently for longer.

If you wait too long and fall into bad health, you may not be able to move into one of these communities. Entering a CCRC early allows you to build friends and relationships early on, which is a nice perk of living in any type of community.

How to Decide What to Do

If you decide that you want to move to a CCRC, now you’ll need to choose the right community for you. You’ll want to think about quite a few different points, such as:

  • Family health history. Have your relatives lived through age 90 with few health issues? If so, you may not want to pre-pay for an extensive stay with higher levels of care. 
  • Do you have long-term care insurance? Your insurance may help pay for a higher level of care.
  • Location. If all your friends and family are in one location, you’ll likely want to stay in their area.
  • Cost. It can be challenging to compare contract types and communities without a lot of organization first. 

However, you will find there is one thing that’s even more important than all these points: culture and community. Visit multiple communities and find one that fits you and makes you feel comfortable. If you’re not visiting multiple communities, you may miss out on finding the community culture that is best for you.

Want to reach out to Rae Dawson to learn more about CCRCs? Email rae01dawson@gmail.com.

Still working on your retirement?

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November 20, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage. Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for November 20, 2023

Andrew Opdyke – 2023 End-of-Year Economic Update

In this Episode of the Secure Your Retirement Podcast, Radon and Murs speak with Andrew Opdyke about a 2023 end-year economic update and the expected shift in the economy in 2024. Andrew is a Certified Financial Advisor and Economist at First Trust Advisor. Listen in to learn about the impact of the concentration of investments in the top ten companies and when the market broadening will happen. You will also learn about things to consider when expanding your investment portfolio in 2024…  

2023 End-of-Year Economic Update

Andrew Opdyke is back with us to get his insight on the broad economy. He’s been on our show multiple times, and he’s returned with his 2023 end-of-year economic update that everyone should listen to at least once. Whether you’re trying to secure your retirement or in the middle of retirement planning, it’s always important to keep a pulse on the market.

2023 End-of-Year Economic Update

Andrew Opdyke is back with us to get his insight on the broad economy. He’s been on our show multiple times, and he’s returned with his 2023 end-of-year economic update that everyone should listen to at least once.

Whether you’re trying to secure your retirement or in the middle of retirement planning, it’s always important to keep a pulse on the market.

October-November 2023 Economic Update

October was an interesting month due to the conflict between Israel and Palestine, and inflation remaining stubbornly high. Economic data came in stronger than anticipated, but there were still some concerns.

November 1st, the Fed’s meeting was a sigh of relief for many when they announced that maybe they’re “done” with trying to tame inflation. Perhaps rate hikes may remain on pause for now.

Rate easing may be ahead in 2024, which is what a lot of economists are hoping will occur.

However, as anyone who follows the market knows, just two weeks prior to these reports, there were just too many concerns that inflation may last a little longer. We just don’t have all the data yet to say if 2024 will see interest rates fall, stay the same, or even go a tad bit higher. Right now, as of mid-November, the New Year looks promising.

We’ll need to watch the data to better understand the ebbs and flows of the market right now.

Concerns of Investors Outside of the Magnificent 7 Stocks in the Market

When looking at the S&P 500, it has performed well this year when you include the stocks that are the “magnificent 7.” What are these stocks? They’re high performers that carry the market and include big names:

  1. Alphabet
  2. Amazon
  3. Apple
  4. Meta
  5. Microsoft
  6. Nvidia
  7. Tesla

If you remove these seven stocks from the market, you’ll notice that the market is down in an equal weight market. The percentage of companies beating the index is at a 20- or 30-year low. Equal weight provides a better picture of what’s transpiring in the market, which would show most stocks are either flat or slightly down.

How much are people paying for the top 10 companies in the index? Many investors are paying a multiple of 25 to 30 for these ten stocks and a multiple of 17 for others.

What does this all mean? The top stocks need to continue performing well for the overall market to recover. Andrew would like to see a broader market rise, in which dozens of stocks are lifting the market, and believes that it will take some time to materialize.

Will the Economy Land or Take Off?

Soft landing. Hard landing. A lot of terms are thrown around for the economy and how it will end up after the pandemic and the high level of inflation that we’ve seen. Some economists are of the mindset that the economy won’t land but will take off.

However, Andrew believes that we’re likely to see a soft landing.

What we saw in the third quarter is that companies have excess inventory, which is due to a slowdown in production after COVID. Companies purchased a lot of inventory due to supply chain issues and are likely to:

  • Slow spending over the next 3 – 9 months
  • Avoid some growth initiatives due to high-interest rates

Will we hit a recession? Who knows? A recession has been six months away for 18 months now. Companies are buying less, building is slowing and if we do go into a recession, there’s a good chance that it will be very shallow.

We need to get back to sustainable interest rates without outside influence and stimulus.

Entering into 2024, we should start to learn more about the strength of the markets and economy without any outside influence building it up.

Building an Investment Portfolio to be Recession-proof

If we enter a recession, will interest rates still remain high? Look at companies that have sustainable cash flow, because even Apple must pay the high interest rates of today when they take out a loan and they add tens of billions in free cash flow quarterly.

Investors will want to dive into balance sheets and see which companies can fund their own projects without loans.

You should also look at:

  • Smaller companies with healthy cash flow
  • Exposure to small- medium- and large-cap stocks
  • Potentially add international stocks

Recalibrating your portfolio to deal with the unknowns and still have exposure to potentially risky technology.

Hamas and Israel Conflict

The United States has been sending money to Ukraine and is now funneling money to Israel. Ongoing events like these play into how the economy will look in the future.

The main risk of this new conflict is in the energy markets.

If Iran or others enter the conflict, it can lead to higher energy markets and a further rise in inflation. Economic repercussions of the Israel and Hamas war are likely to be a lot less than even Ukraine and Russia.

Trade conflicts and fracturing are occurring, and the US is doing a good job by determining who our strong trade partners are and reallocating our investments to these countries. We’re importing less from China and are trading more with:

  • Canada
  • Mexico
  • Japan

We have shuffled back and pulled away from China, pushing them from the first to the third trade partner that we have.

AI and the Hype Around It

Cryptocurrency was a major trend in past years, followed by blockchain. Now, we’re seeing a lot of people harp on the idea of AI. We’re at a point where we were with the Internet first coming about, where companies knew that the landscape of the way we work was changing.

What does AI mean for us?

The environment and world are changing. Some professions may become obsolete, and some new jobs may be created. If you look at the top 10 companies in 1999 and today, only two remain: Microsoft and Exxon.

AI may be won by the biggest companies, but if history repeats itself, we’ll see some companies born out of AI that may change the world. We may see the next Facebook or Meta created, and it may be a company everyone is overlooking.

What are you Most Worried About?

Geopolitical issues that are popping up, and more are likely to be added, are a major risk to the economy right now. China is likely to see a more difficult path in the next 10 – 20 years. We’re also entering an election year, and the negative side of the election can cause market fluctuations.

Escalation of Russia and Poland, Iran entering the Israel and Hamas war or China invading Taiwan can all effect the economy. 

What are You Most Excited About?

AI excites Andrew, and he believes that while the technology is likely to change the world, in the next 24 – 36 months, we may see some major changes thanks to AI. Humanity is “fighting the fight,” with more people being literate and doing some amazing things.

We’re seeing how dementia has been in decline in the last decade, and as a whole, we have more people than ever trying to solve problems that have plagued the world around us.

Andrew is unbelievably excited to see how human potential is being unleashed.

Need help reviewing your retirement plan? Schedule a free 15-minute call with us today.

November 13, 2023 Weekly Update

We do love it when someone refers a family member or friend to us.  Sometimes the question is, “How can we introduce them to you?”   Well, there are multiple ways but a very easy way is to simply forward them a link to this webpage. Here are this week’s items:

Portfolio Update:  Murs and I have recorded our portfolio update for November 13, 2023

Rae Dawson – The Basics About a CCRC in Retirement

In this Episode of the Secure Your Retirement Podcast, Radon and Murs have Rae Dawson to discuss the basics of Continuous Care Retirement Communities (CCRC). Rae is a CCRC expert and spent her original career primarily managing people and projects in high-tech in Silicon Valley for many years before gaining an interest in CCRC. She explains what it means for a facility/community to be a CCRC and why most assisted care facilities are not CCRCs.  

The Basics About a CCRC

Rae Dawson was a special guest on our podcast this past week, and she was happy to talk to us about a very important topic: CCRC. If you don’t know what a CCRC is, don’t worry. We’re going to cover that in just a few seconds. But before we do, let’s learn more about Rae and why we’re so excited to have her on our show.