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 May 20, 2024
Turning 65 in Retirement – What To Do for Medicare
Radon, Murs, and Shawn discuss Medicare planning for people nearing the age of 65. Shawn explains the timelines and eligibility criteria for the Initial Enrollment Period (IEP), Special Enrollment Period (SEP), and General Enrollment Period (GEP).
Turning 65 in Retirement – What To Do for Medicare
If you’re ready for Medicare and turning 65, there are a lot of complex topics that you must think about. In our latest episode of Secure Your Retirement, we had our very own Shawn Southard back on the show to help folks reaching the age of 65.We’re going to walk you through the entire process…
If you’re ready for Medicare and turning 65, there are a lot of complex topics that you must think about. In our latest episode of Secure Your Retirement, we had our very own Shawn Southard back on the show to help folks reaching the age of 65.
You’ll be able to go on Medicare at 65, but it’s overwhelming looking through plans and options.
We’re going to walk you through the entire process to help you start to understand Medicare, how it fits into your retirement planning, and the steps you can take to make the whole process easier on you.
What is the Initial Enrollment Period (IEP)?
IEP has a seven-month window, starting three months before turning 65, where you can enroll in a Medicare plan. You can apply for Part A, which is for in-patient care and Part B, which is for doctor visits and outpatient care.
Special Enrollment Period (SEP)
An SEP is becoming more common as more people are working past the age of 65. While you’re still working, you’ll forget about Medicare when turning 65 and remain on your health insurance plan until you retire.
Once you do retire, the IEP is likely to go by, so you’ll fall within the SEP.
You can fall into the SEP for a few reasons, but the most common is that you worked past your IEP and now need coverage because you’re off your group insurance plan.
Note: You have eight months from the time you retire to enroll in a plan within the SEP, or you will face penalties.
General Enrollment Period (GEP)
Imagine that you go to Cancun in your mind and aren’t paying attention to the IEP or SEP. You can still get into Medicare during the GEP, which is January 1st – March 31st each year. You can enroll in Parts A and B at this time.
Medicare also changed the rules a bit, and if you sign up in January, you’ll begin receiving your benefits on February 1st, not July 1st, which used to be the case.
Depending on when your IEP and SEP passed and your situation, you may receive a late enrollment penalty. Shawn works with folks to help navigate these situations on an individual basis.
Scenario: Still Working, turning 65, and Still Enrolled with My Employer’s Plan
If you’re approaching 65 and plan on working a few more years, you need to make sure that your company plan has 20 or more people actually enrolled in the plan. It’s not enough for 20 people to be working at the company – they need to be enrolled in the health plan.
In this case, Medicare will provide an exception and won’t need to do anything with Medicare.
Employees of employers with a health plan that has 19 enrollees or less will need to enroll with Medicare, even if they plan on continuing working past 65.
Scenario: Retired But with Health Coverage
In some cases, a person will retire before 65 and still receive benefits from their employer. For example, state employees of North Carolina can still receive their benefits until 65, but these benefits are considered secondary when you hit 65.
You will need to enroll in Part A and B of Medicare at 65, even if you want to keep your former employer’s health insurance.
Scenario: I’m Still Working, Approaching 65, But I Receive Social Security Retirement Benefits Already
If you’ve been receiving Social Security or Railroad retirement benefits for at least four months before you reach 65, you’ll automatically be enrolled in Medicare Part A and B when you hit 65.
You will want to send the coverage back to Medicare when you receive your Medicare card.
Why?
Medigap plans have no medical underwriting for the first six months of your Medicare coverage, and you’ll pass by the six-month period because of the automatic enrollment. Even if your coverage starts for one day, the time for Medigap plans will start ticking down.
How Do You Enroll in Medicare?
If you’re reading this and thinking, “I need to enroll,” you have a few ways to do this. An easy way to enroll is to:
You can also go down to any Social Security Administration office and enroll in Medicare in person.
For many people, the ideal solution is to go through the online portal.
What Forms and Documents Do I Need for This to Go Smoothly?
You should have a few things available:
Social Security number
W-2s
Proof of citizenship (Birth certificate, passport, etc.)
CMS Form (if you work past 65)
Shawn can help you obtain all of the forms you need when you work with him.
Penalties for Missing the Enrollment Period
If you miss the enrollment period, you will be penalized. Penalties cannot be undone, so they’re monthly, lifetime mistakes. For example, if you miss Part B coverage, you’ll pay 10% on top of the premium for every 12 months that you miss it.
You’ll be paying 10% more monthly for the rest of your life.
Let’s say that you didn’t enroll until 60 months after your enrollment period. This means that you’ll be paying an additional 50% on top of your premiums forever.
The Part D (for drug plans) late enrollment penalty is 1% for every month that you weren’t enrolled in one for the rest of your life. Shawn knows a client that didn’t enroll in a prescription drug plan at 65 because he didn’t need medication at the time. When he turned 70, he needed medication, and he now pays a 60% penalty on top of the normal plan price.
Anyone listening to this will want to avoid being penalized because it will impact you for the rest of your life.
You can handle Medicare on your own, but if you work with Peace of Mind Wealth Management to secure your retirement, Shawn is our Healthcare Professional Specializing in Medicare and is available to help all our clients.
Working With Shawn Using the K.I.S.S. Acronym
Shawn follows the Keep it Simple Shawn mindset, and he aims to provide a calm approach throughout the process. He will work with you wherever you are in the Medicare process, discuss your goals, and help you find the coverage and plan that is best for you.
He uses a flowchart to show people the:
Foundations of Medicare
Options of Medicare
You’ll also learn about Medicare plans, Medigap, payments, Income-related Monthly Adjustment Amount (IRMAA) and other aspects of Medicare. Shawn will also hop on calls with your employer to make the process as seamless as possible.
If you do want to talk to Shawn about Medicare and begin working with him, feel free to reach him at our office at (919) 787-8866 or email him at shawn@pomwealth.net.
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 February 20, 2024
Closing the Gap Strategies for Coping with Medicare’s Doughnut Hole in Retirement
In this Episode of the Secure Your Retirement Podcast, Radon and Murs have Shawn Southard, our in-house Medicare expert, talk about Medicare’s doughnut hole.
Learn about the four stages of how Medicare Part D works, plus strategies you can take yourself to avoid the doughnut hole.
Closing the Gap Strategies for Coping with Medicare’s Doughnut Hole in Retirement
A doughnut hole is part of Medicare prescription drug plans. It is found in either standalone Medicare Part D plans or Part D plans that are bundled within Medicare Advantage plans. The doughnut hole is a temporary limit on what the plan will pay for the cost of the drugs. Technically, the doughnut hole the “coverage gap” stage of Part D plans.
Shawn Southard, our in-house Medicare specialist, joined us on our latest podcast to discuss Medicare’s Doughnut Hole. If you don’t know what this means or how it relates to you, don’t worry – we’ll explain everything.
What is Medicare’s Doughnut Hole?
A doughnut hole is part of Medicare prescription drug plans. It is found in either standalone Medicare Part D plans or Part D plans that are bundled within Medicare Advantage plans. The doughnut hole is a temporary limit on what the plan will pay for the cost of the drugs. Technically, the doughnut hole the “coverage gap” stage of Part D plans.
What is Part D?
Medicare started in 1966, and up until 2003, there was no prescription coverage until Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act. Basically, the Act went into effect in 2006 to help beneficiaries cover the cost of prescription drugs.
As part of the Act, there is a penalty if you don’t enroll in a prescription drug plan when you turn 65 or retire.
There is a 1% penalty for every month that you didn’t enroll when you were supposed to be enrolled. The penalty is monthly for as long as you are enrolled in a Part D plan, which could be the rest of your life. For example, if you don’t enroll in a Part D drug plan for 2 years (when you were first eligible to enroll), you will have a 20% Part D late enrollment penalty. This penalty is monthly and will be in effect for as long as you are enrolled in a Part D plan. The 24% late enrollment penalty is based on the national average Part D premium, which in 2024, is $34.70. This penalty is added to your drug plan premium automatically by Medicare.
Even if you don’t take prescription drugs, be sure to enroll in a Part D prescription drug plan to avoid the late enrollment penalty.
Medicare Part D plans have 4 stages. Theses stages are the same for standalone Part D plans and Part D plans that are bundled into Medicare Advantage prescription drugs plans.
Deductible Stage. If your plan has a deductible, you start here. You are paying 100% of the drug cost up to your deductible amount. The maximum for Part D plans in 2024, is $545. Depending upon your zip code there could be several Part D plans that do not have a deductible.
Initial coverage Stage. The initial coverage stage is reached when your deductible has been met or if your plan does not have a deductible. In this stage, you pay roughly 25% of the cost with co-pays and co-insurance. The co-pay depends on one of the five tiers in the drug plan. Tier 1, the lowest tier, are drugs that are preferred generics that either have zero ($0) or a co-pay of a few dollars. Depending on your medications and their tier, you may be paying more. The initial coverage stage starts when your out-of-pocket costs reach $546 and goes to $5,030. Note: if your plan does not have a deductible, you start at the initial coverage page. You reach the doughnut hole stage after reaching the $5,030 out- of-pocket limit.
Coverage gap stage. This is the “doughnut hole”. It is reached when out-of-pocket drug costs exceed $5,031 and goes to $8,000. In this doughnut hole stage, for brand name drugs that you take, you’ll pay no more that 25% of drug costs and the drug manufacturer pays 70% of the drug costs. This 95% (25% paid by you and 95% paid by the drug manufacturer) goes towards getting you out of the doughnut hole quicker. 95 % is True Out Of Pocket (TrOOP). If you are doughnut hole stage and taking generic drugs, you pay no more than 25% of the drug costs. NOTE: only the amount you pay (25%) goes towards TrOOP.
Catastrophic Stage. This is the doughnut hole exit point. This state is reached when you have pay $8,000 out of pocket for your drugs. Moving forward, you pay $0 toward any additional prescription-related expenses. But, at the end of the plan year, out of pocket costs reset back to zero. Restarting at Stage 1 starts at the beginning of the year.
If you’re in Medicare’s doughnut hole for one year, and your drug regimen stays the same, there is a strong possibility you will be in the doughnut hole next year.
Inflation Reduction Act
Under the Inflation Reduction Act, there is some very promising news. One of the changes in 2023 was that you paid just 5% when you hit the catastrophic phase and now you pay 0% in 2024. In 2025, the next stage of the Inflation Reduction Act, it will put a cap on TrOOP at $2,000.
If the Act remains as it is, in 2025, people will reach the catastrophic phase when they spend $2,000 out of pocket. For Medicare Beneficiaries who reach the doughnut hole each year, this is a significant change that will provide immense financial relief.
In 2026, Medicare will begin negotiating the prices of 10 brand-name drugs downward. While manufacturers are fighting back against this, many Federal judges are siding with Medicare.
Are There Other Strategies to Navigate Medicare’s Doughnut Hole?
Yes, there are generics that your doctor may be able to offer you. Generics will help you save on costs. Doctors may be able to work with you to find drug alternatives that can push your costs down.
If you’re really struggling economically, you may be able to qualify for:
Extra help
Low-income subsidies
Anyone on these programs will never go into the doughnut hole and will have their costs significantly reduced.
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 8, 2024
Understanding Medicare Advantage Open Enrollment in Retirement
In this Episode of the Secure Your Retirement Podcast, Radon and Murs have our in-house Medicare specialist, Shawn Southard, discuss the Medicare Advantage open enrollment. With an education background and a servant’s heart, Shawn is passionate about helping people find the right Medicare plans. Listen in to learn about the benefits of a Medicare Advantage plan and the reasons for the Medicare Advantage open enrollment period.
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.
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
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.
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 September 18, 2023
This Week’s Podcast – Mastering Medicare Planning in Retirement
Learn how to evaluate your prescription drug needs and choose the right Medicare plan that caters to those needs. You will also learn about Medicare supplements and Medicare Advantage plans, plus how to join our Free Webinar to learn more about Medicare planning from experts.
Open enrollment for Medicare is right around the corner, and people on all points of the spectrum should begin planning for it. If you’re in one of the categories below, you’ll especially want to continue reading…
Open enrollment for Medicare is right around the corner, and people on all points of the spectrum should begin planning for it. If you’re in one of the categories below, you’ll especially want to continue reading:
You’re already enrolled in Medicare and want to make sure that you’re in the right plan
You’re eligible for Medicare and need to select your providers
We’re going to create a checklist of sorts for folks who are already enrolled in Medicare or need to sign up for a plan.
Note: We also have a webinar on this topic coming up, where we’ll go into all these points in far greater detail.
Prescription Drug Plans
Prescription drug plans are crucial for retirement planning because you may need very costly medicine in retirement. Each drug plan has different drugs that they cover, so you need to:
Review your individual medication needs
Find a list of prescription drugs that the plan covers
Have an idea of when you need to have prescriptions filled
If you’re not on any medication, your choice may be easier than someone who is on a few medications. You’ll want to read through the prescription drug plan to ensure that the medicine you’re taking now is all covered under the plan.
Anyone who is planning on switching plans must be extremely diligent to ensure that the desired plan covers the drugs you’re taking.
Comparing Part D Plans
Part D is the prescription portion of Medicare. You’ll have one plan that covers hospital visits, one for doctor’s visits and another for prescriptions. If you worked through our first point, then you’ll need to compare drug coverage and the costs you will cover.
Imagine one person with high blood pressure and cholesterol. Their medicine may be covered on one plan. However, what happens if you also have arthritis and are on blood thinners? You’ll need to consider all these factors when making a choice on which Part D plan to join.
But what if you’re not on any medication?
If you’re not on medication, you need to really look at your risk factors when choosing a plan. Perhaps there’s a history of high blood pressure in your family, so you’ll want to find a plan that covers related medications.
Evaluating Your Pharmacy Network
Next, you need to consider each plan’s pharmacy network. If you go to your local Walgreens to have your prescriptions filled, you may not be able to fill them at Walgreens if they’re not a part of the Walgreens pharmacynetwork.
You should consider cost and convenience.
Is the plan that you plan on entering ideal for your location? Most people don’t want to drive 30+ minutes away once or twice a month for their prescriptions. Online prescriptions are becoming more popular; however, you do have to wait for the medicine to arrive, which can be inconvenient or completely impractical for certain illnesses.
Everyone should evaluate what they’re comfortable with in terms of the pharmacy network each plan offers.
Cost Analysis
Medicare plans are not free. In most cases, you’ll still pay premium cost and out-of-pocket cost.
If you want to have 100% of everything covered, you’ll pay more in premiums. Instead, you need to consider your medications and what the cost is for each of them. What if you have a very simple scenario where your prescription drug cost is very low? In this case, you may not need the most expensive plan.
What we are really looking at here is the “coverage gap” or “donut hole.”
These two terms mean that you need to analyze:
Premium costs
Prescription costs
Income
If you do not have a lot of taxable income, this can work to your benefit and help you get into a more comprehensive prescription drug plan.
Annual Reviews
Annually, we recommend that you review your plan. One of the biggest Medicare mistakes we see is that people do not review their plans annually.
You might have been on the same plan for a decade, but switching plans can save you a lot of money. Some of the Medicare professionals that we work with have saved clients that we’ve worked with $2,000+ a year by simply reviewing and switching plans.
Dental, Vision and Hearing
Our second point revolves around parts of Medicare that are easy to overlook:
Dental
Vision
Hearing
In fact, a lot of health insurance providers are severely lacking in these three areas of coverage, which can cause you to pay out of pocket for any related expenses.
Medicare requires you to think about the dental coverage you need and find a plan that will better meet your needs. Dental issues can spill over into your overall health issues, and you certainly want to maintain your eyesight and hearing, too.
Each of these elements deteriorates faster as we age, so this is an area that you need to focus on heavily.
Vision Coverage
Do you want your:
Eye exams covered
Lenses or contacts covered
You may want to cover these costs and forget about a plan that offers them. Why? You may compare plans and find that your premiums for vision coverage are much higher, and it’s more cost effective to cover these expenses on your own.
Hearing Coverage
If you think there’s a chance that you’ll need a hearing aid or screening in the future, then you’ll want to consider coverage for hearing. Otherwise, you may be fine without having hearing coverage as a part of your plan.
Integrative Plans
Finally, an integrative plan is when you look at all these items and come across Medicare Advantage plans. There’s a lot to look at with an Advantage plan. You may even find that a Gap plan is better for you.
Unfortunately, there are a lot of things to consider with integrative plans, but it’s something we’ll discuss in greater detail in our upcoming webinar.
Individual Needs Assessment
An individual needs assessment is an integral part of Medicare planning because what works for your neighbor may not work for you. Medicare is very individualized and will help you better understand your needs, true coverage needs, and potential future needs.
Medicare Supplement and Advantage Plans
We do want you to attend the webinar because these plans are so important for you to secure your retirement. Medical expenses can rise rapidly, and you need to be prepared to cover these costs.
In the webinar, we plan to cover:
Medicare basics, such as supplements vs advantage plans
State-specific coverages and differences
Cost considerations
Out-of-pocket costs
Value of one plan to another
Restrictions of each type of plan
In-network and out-of-network differences
Additional benefits of Advantage plans and if they offer the most coverage
Getting access to personalized advice
We work with specialists who can help you make the best decision for your annual plan based on current and future medical needs.
During the webinar, we’ll be working with a Medicare expert who will answer all your questions and those that others have sent to us.
Want to learn more about Medicare planning?
Click Here to register for our “Medicare Webinar” on October 9th at 12:00pm EST. The webinar is 100% free, so feel free to invite your friends to listen to it, too
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 September 5, 2023
This Week’s Podcast – Integrated Wealth Management Experience in Retirement
Learn more about the elements of an integrated wealth management experience: a retirement financial plan, specific-to-the-client investment process, and tax planning. You will also learn how we’re involved in every step of the wealth management process, in-house or with a partner.
Integrated wealth management experiences are our way to help clients have the type of retirement planning assistance that is provided in a “family office.” If you don’t know what this term means or who it applies to, we’re going to cover that in great detail before explaining the concept of integrated wealth management to you.
Integrated wealth management experiences are our way to help clients have the type of retirement planning assistance that is provided in a “family office.” If you don’t know what this term means or who it applies to, we’re going to cover that in great detail before explaining the concept of integrated wealth management to you.
Note: Click here to listen to the podcast that this article was based on using Spotify, Apple Podcasts, Google Podcasts and Amazon Music.
What is a “Family Office?”
A “family office” caters to what can be considered ultra-high net worth. You have enough assets that you require an entire team to help manage your assets. These offices will help you with:
Family businesses
Taking care of budgets
Paying bills
Managing cash flow, credit cards, real estate
Individuals in a family office have assets of $50+ million. Anyone who falls into this category can be their “own client,” meaning that the entire team works for you to manage your wealth. Extensive assistance is offered, including tax and estate planning, to the degree that 99% of people will never require. You’ll also work with attorneys and CPAs.
All these employees work for you, they’re registered with the SEC, and they assist with managing your “family.” If a person has this high of a net worth, they may need to have a chief financial officer (CFO) who will handle hiring or working with certain experts to meet their family’s needs.
Often, with a family office, they have a CPA working with them full-time.
The family office works solely for the family and will handle all their financial and wealth management needs. If a lawyer needs to be hired to work on estate plans, that’s all handled for you behind the scenes.
Integrated Wealth Management Experience
In our office, our average client doesn’t have $100 – $200 million or a billion dollars. We can’t create a family office for these individuals, but we wanted to create a system that offered the same experience as a family office for all our clients.
What we devised is known as our integrated wealth management experience.
What Does an Integrated Wealth Management Experience Look Like?
Instead of working with one individual, we work with many and take on the role similar to a “CFO.” We look at the person’s entire financial picture and beyond to help you secure your retirement. We partner with multiple professionals on a range of services, in addition to in-house wealth management.
For simplicity, we’ll break this down into a few of our in-house and partnered services.
In-House Wealth Management
In-house, we specialize in wealth management. We are financial advisors, and fiduciaries- which means we’re required to put your best interests first. The majority of our clients are people close to or retirement, and we’re big on the retirement-focused financial plan.
In a few words, the retirement-focused financial plan:
Analyzes where you are today
Outlines retirement goals
Identifies changes that need to be made to reach your goals
Reaching your financial goals will often mean investing in some sort of return. We may invest in the market, bonds, annuities, or a wide range of other financial vehicles. We invest for a return that is comfortable for the client and is based on individual risk tolerance.
Next, we offer tax planning. Some of the tax planning is in-house and some of it is done by working with outside experts. We have checks and balances in place to understand:
What your taxes look like today
What strategies we can implement before the end of the year to lower the tax burden
What to do to save you money next year
We can also handle the tax return for you, and we have partnered with CPAs to lead this process. CPAs will also provide a stamp of approval for all the tax planning strategies that we prepare to ensure that everything moves along smoothly.
Our team helps clients understand where their income is coming from and ensures that their retirement-focused financial plan is operating to reach their goals.
Estate Planning
Estate planning is a crucial part of retirement planning that folks really struggle to talk and think about. However, we incorporate this planning into the experience because it provides you with peace of mind that your estate matters are all handled in a legal manner.
Without an up-to-date estate plan, it can be difficult for you to leave assets in your desired way for heirs and beneficiaries. If you’ve had a major life change since you’ve created or looked at your estate plan, it is a good idea to have your estate plan professionally reviewed and updated.
For our clients, we have a system in place for the state they live in to create a:
We believe this aspect of your retirement-focused financial plan is urgent, and strongly encourage our clients to review and update these documents on a regular basis.
Social Security
We work with a Social Security consultant, so our clients have an expert look at avoiding mistakes when filing for Social Security. Some clients have an easy process for Social Security, and we can help them apply for their benefits. However, other clients do not have as easy of a time.
Our consultant is on retainer and will help consider:
Complex decisions
Divorce
Optimizing for certain forms of income
Survivorship
She assists us when running the numbers for Social Security to help you make the best decision on when to take your benefits and how to reach your financial goals.
Insurances
Insurance includes many different options, but one of the major ones is health insurance. When you retire, you’re responsible for your own health insurance, which will be Medicare.
Medicare can be overwhelming when it comes to options, plans, and thresholds. We work with our clients and partners to help them find the best Medicare options for their health scenario and budget. We may be able to structure things to avoid IRMAA surcharges on Medicare, too.
Additionally, we help clients during open enrollment to find plans that may be more affordable or a better overall option for them.
Long-term Care Planning
Speaking of healthcare planning, we also dive into long-term care planning. Hopefully, you’ll never need this level of care, but you just never know what the future will hold for you. We recently had a podcast on long-term care planning.
We’ll analyze your long-term care options and even help you secure the insurance you need to pay for a nursing home or assisted living facility.
Life Insurance
We’ll work through the question of life insurance and how to structure it for you and your family.
These are just some of the insurance options that we can use to help build our clients retirement-focused financial plan. As we’ve outlined, we do our best to mimic the “family office” so that it works in your best interests.
What Getting Started with Our Integrated Wealth Management Experience Looks Like
If you call us to discuss your options, we already have:
Ongoing, up-to-date research to aid in building plan for your goals
Multiple estate planning methods in place
Many in-house Insurance and Wealth Management strategy options
We’re involved the entire time, working to have all your questions answered. We will do the research with the estate planner or Social Security expert to have your questions answered.
Since we work with the outside experts, you bypass the extra step to make sure your financial, tax, and estate planning professionals are all on the same page when it comes to your retirement-focused financial plan. We’re very much involved with every aspect of your plan to help you make sound financial decisions.
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 August 28, 2023
This Week’s Podcast – 5 Financial Planning Topics That Need to Be Discussed Annually
Listen in to learn about things to consider when doing tax strategy and planning before the end of the year to enable changes. You will also learn the importance of having a Medicare and healthcare planning, year-end investment review, estate planning update, and reviewing your RMDs.
This Week’s Blog – 5 Financial Planning Topics That Need to Be Discussed Annually
Annual financial planning topics evolve as you age. We believe that once you secure your retirement, or when you’re close to it, you should consider the following:
Annual financial planning topics evolve as you age. We believe that once you secure your retirement, or when you’re close to it, you should consider the following:
5 Annual Financial Planning Topics
1. Tax Planning
Why would you be doing your tax planning in September, October, or November? Several of the following strategies need to be employed before December 31, so if you wait until your tax return is being prepared around March or April of the next year, it will be too late.
We recommend:
Conducting a review of your earned income
Confirming distribution amounts from your IRA or 401(k)
Identifying any interest and capital gains you may have received in taxable accounts
In the years you have lower income than what you expect in the future, we recommend thinking about Roth conversions. Although you will likely pay more taxes in the year you convert to Roth, the ultimate goal with all tax planning strategies is to minimize lifetime taxation.
On the flipside, if you are expecting an influx of income in the future, you can plan ahead to minimize your tax liability by considering the following strategies:
Tax loss harvesting, which is selling securities at a loss to offset capital gains from securities sold at a profit in the same year.
Qualified Charitable Distributions (QCD) or other charitable giving and donor-advised funds
Verifying that you’re withholding a satisfactory amount of taxes on earned income and any retirement account distributions
Everyone must pay their dues, but if you take strategic steps today, you can lower your tax burden to ensure that you’re not paying a dime more than you owe.
2. Required Minimum Distributions (RMDs)
IRA contributions are typically tax deductible, meaning the contributor does not pay tax on those amounts. Instead, taxes are owed on distributions. Once the IRA account owner reaches a certain age, the IRS imposes required minimum distributions (RMDs) to ensure the taxes are eventually paid rather than allowing the owner to indefinitely defer their tax liability.
Your RMD start age depends on the year you were born. The age for these distributions was 70-and-a-half, and then the law changed to 72, and then 73. Some individuals will need to begin RMDs at 75. The IRS can assess a very hefty penalty if you miss your RMD. If you are charitably inclined, a QCD from your IRA will satisfy your RMD. We have a great article on this topic: How Do Required Minimum Distributions and QCDs Work?
3. Medicare and Healthcare Planning
Open enrollment happens in the last quarter of the year, somewhere at the beginning of October. You can move plans at this time without any underwriting. Everyone should look at:
What their plan includes
Options to change plans
Coverage you may need added
Everyone is different, and most people end up not changing their plans. However, it is still a good idea to review your plan around the last quarter, because if changes need to be made, open enrollment is the opportune time to do so.
Note: We can put you in contact with some of our partners who specialize in Medicare and healthcare planning. You may even be able to switch to an identical plan at another provider and pay lower premiums, which is always a great way to secure your retirement.
4. Year-end Investment Review
If you’ve been looking at your investments throughout the year, you know that your portfolio has gone up and down quite a bit. However, you might overlook a few things and really need to perform a year-end investment review. What is a year-end investment review?
It’s an annual best practice to consider:
Portfolio risk
Tax loss harvesting
Adjusting your allocations
You may want to rebalance your portfolio, depending on how one stock performs compared to others. Perhaps one stock is responsible for 60% of your gains. Unfortunately, this is a major risk that needs rebalancing because you risk the stock falling and your portfolio struggling as a result.
Additionally, you may be at the point in your retirement planning where you’re close to leaving your job and have enough money to live the life you want, but you have too much risk. Bonds, annuities, or other financial vehicles may need to make up more of your retirement strategy at this time.
Different age groups have differing risk tolerances.
Your risk tolerance at 50 will be much different than when you’re 60, and so on. Changes can be made based on how the markets performed, how the economy is doing and your feelings going into the coming year.
5. Estate Planning Update
Clients often drag their feet when it comes to estate planning because it’s a topic no one wants to think about. However, if you make it a routine, you will be sure that these documents are 100% in order and accurate.
You want to be sure that:
Every document is up to date
Beneficiaries (and their information) are up to date
Often, people come into our office, and they haven’t updated their plan in 10 years. Time goes by so fast, and if any major changes aren’t put down on paper, you may leave money or assets to someone who is no longer in your life.
Beneficiaries may be incorrect or no longer with us, and these documents are final once executed. A simple review is worth your peace of mind that all the hard work and energy that you put into retirement planning will help the individuals that you love when you pass on.
An annual update is a check and balance that your estate plan is in order.
If you check all these items off in September or October, you can go into the coming year knowing that you have your retirement plan in order.
Want to discuss any of these topics more?Schedule a call with us and we’ll do our best to help you.
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 August 7, 2023
This Week’s Podcast – 2023 IRMAA Update – Will You Have a Surcharge for Medicare Part B and D?
We explain the modified adjusted gross income and the 2023 surcharges if you earn more than $97k single or $194k married filing jointly.
Listen in to learn about the income-dropping circumstances the IRS considers when exempting anyone from the Medicare IRMMA surcharges. You will also learn you should be aware of your numbers when implementing any type of strategy.
This Week’s Blog – 2023 IRMAA Update – Will You Have a Surcharge for Medicare Part B and D?
A major part of retirement planning is ensuring that you have the healthcare insurance necessary to go to the doctor for checkups, treatment, or injuries. Medicare is one way to secure healthcare in your retirement, but youmay be spending more on surcharges in 2023 than you expect due to the Income-Related Monthly Adjustment Amount known as IRMAA.
We’re going to cover the 2023 IRMAA update and what it means for you if you have Medicare Part B and/or D.
A major part of retirement planning is ensuring that you have the healthcare insurance necessary to go to the doctor for checkups, treatment, or injuries. Medicare is one way to secure healthcare in your retirement, but youmay be spending more on surcharges in 2023 than you expect due to the Income-Related Monthly Adjustment Amount known as IRMAA.
We’re going to cover the 2023 IRMAA update and what it means for you if you have Medicare Part B and/or D.
Don’t know what IRMAA is or what surcharges you may face? Read through our guide on IRMAA Medicare Surcharges.
At its core, IRMAA is a surcharge that you’ll pay for your Medicare if you make over a certain amount of money each year. Updates to IRMAA will affect you because in most cases it means you’ll need to pay more for your Medicare.
Will You Avoid IRMAA Surcharges?
We’ve had quite a few clients who didn’t know about these surcharges and were surprised when they had to pay more for their Medicare. The baseline is based on the modified adjusted gross income (MAGI) of an individual or couple.
Based on the figures below, you will not have a surcharge if you meet the following income requirements:
Single person: $97,000/annually or less
Married filing jointly: $194,000/annually or less
If your modified adjusted gross income falls under these amounts, your monthly premiums will be $164.90.
Anyone who is still working will need to plan accordingly, because IRMAA is based on what you were earning two years ago. For example, if you are a single person and made $100,000 in modified adjusted gross income in 2021, you would be over the threshold in 2023, based on these earnings.
What to Do If You Made More Than $97,000/$194,000 in 2021?
If you exceed these figures when single or married and filing jointly, the IRS will recognize some nuances or life-changing events that can help offset the surcharge. If you or your spouse experienced the following, you would be considered for a life-changing event:
Retirement
Marriage
Divorce
Widowing
Layoff
Loss of pension
Loss of income-producing property
Retirement is one of the life-changing events that the Social Security Administration (SSA) will allow. If you can receive this exception, you will avoid the surcharge. We recommend looking into the life-changing events listed and understanding if you can avoid paying surcharges.
However, the rules are very specific, and the event must fall under one of the exceptions above.
With this in mind, if you believe that you have had a life-changing event and can show your income is under what it was two years ago, you can file form SSA-44. The form is relatively simple and allows you to explain:
Why your income is less
What the significant change is and why it happened
Again, if you have one of the exceptions above, we highly recommend filling out the form because it will allow you to avoid or reduce surcharges.
What to Expect if Your Modified Adjusted Gross Income Exceeds the Baseline
If you do not have exceptions and will need to pay additional surcharges on your Medicare premiums, you can expect the following monthly surcharges in 2023:
MAGI for single filer
MAGI for joint filer
Part B Surcharge
Part D Surcharge
$97,000 – $123,000
$194,000 – $246,000
$65.90
$12.20
$123,000.01 – $153,000
$246,000.01 – $306,000
$164.80
$31.50
$153,000.01 – $183,000
$306,000.01 – $366,000
$263.70
$50.70
$183,000.01 – $499,999
$366,000.01 – $749,999
$362.60
$70
$500,000 or more
$750,000 or more
$395.60
$76.40
Note: Remember, all these surcharges are in addition to the standard monthly premium of $164.90.
If you’re still working or you have events coming up that will add to your income, it’s important to plan the transactions with IRMAA in mind. For example, if you plan on selling an asset that would put you above these thresholds, it may be worthwhile to sell three years before qualifying for Medicare to avoid these additional charges.
Form SSA-44 and the exceptions it provides is almost a one-time deal with some exceptions.
We have had some folks try to apply and a nice representative at the SSA helps them out. However, the form and its exceptions do not help you if you had a one-time investment gain or were trying to follow a specific strategy for your retirement plan.
Tax strategy meetings are an important part of retirement planning because your income determines whether you will pay Medicare surcharges. We have clients who want to do Roth conversions for a variety of reasons, but Roth conversions will add to your MAGI. An increase in income means it’s important to consider both the additional tax you may owe on the Roth conversion and whether the conversion will infringe on the IRMAA thresholds, requiring you to pay a surcharge you might not have had otherwise.
To avoid these surcharges when converting to Roth, convert your accounts before you qualify for Medicare, or put specific strategies in place such as planning carefully around the thresholds.
You’re not stuck with high surcharges forever. Your premiums are recalculated from your tax return each year, so you may have to pay surcharges in 2023, but if your income in 2022 falls, the surcharges for 2024 will be based on the lower 2022 amount.
Do you have any questions about these figures, or do you need some guidance on your IRMAA surcharges?
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 May 22, 2023
This Week’s Podcast – Important Age Milestones in Retirement
Listen in to learn about the different financial milestones that happen in the life of a child from birth all the way to retirement. You will also learn when to work on your catch up contributions, the social security eligibility age, when to withdraw all your retirement assets and much more.
Important age milestones seem to come in waves, especially once you secure your retirement. A lot of rules around financial planning and tax issues impact people at different ages, which everyone should know about when retirement planning.
