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Tag: retirement

  • 7 Commonly Asked Medicare Questions (You’re Not the Only One Who’s Confused)

    7 Commonly Asked Medicare Questions (You’re Not the Only One Who’s Confused)

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    For most workers, retirement means an end to employer-sponsored health coverage. But your 65th birthday usually comes with a new type of health insurance: Medicare.

    But how does Medicare work, anyway?

    Whether you’re about to turn 65 or you’ve been enrolled in Medicare for years, now is a great time to brush up on the federal health insurance program, what it offers, what it costs and how to make changes to your coverage.

    7 Frequently Asked Questions About Medicare

    Medicare is the largest health insurance program in the United States, covering more than 60 million Americans.

    It’s also one of the most confusing and complex programs.

    Contrary to popular belief, Medicare isn’t free and it doesn’t cover all your health care costs, either.

    Here’s what you need to know to get the most out of your Medicare coverage.

    1. What Is Medicare?

    Medicare is the federal government’s health program for people age 65 and older, as well as some younger people with disabilities or kidney failure.

    If you’re at least 65 years old and entitled to Social Security benefits or Railroad Retirement benefits, you’re eligible for Medicare. You don’t need to be retired or taking benefits to qualify.

    Younger people who have been on Social Security Disability for at least 24 months or diagnosed with end-stage renal disease or ALS are also eligible.

    2. How Is Medicare Funded?

    Payroll taxes, general revenue and beneficiary premiums are the three main funding sources for Medicare.

    The program, which spent $888 billion on care in 2021, also draws money from taxes on Social Security benefits, payments from states and interest.

    Medicare Part A — which mostly covers hospital visits and hospice care — is funded via payroll taxes.

    Also known as FICA, these taxes are automatically withheld by your employer.

    FICA taxes include a 6.2% Social Security tax and a 1.45% Medicare tax on your earnings  — or 7.65% total.

    Medicare Part B — which covers outpatient care, doctor visits and medical equipment — is funded through a combination of general revenues (73% in 2021) and beneficiary premiums (25%), according to the Kaiser Family Foundation.

    3. How Does Medicare Work and What Are the Different Parts?

    Original Medicare, also known as traditional Medicare, includes Part A and Part B. Original Medicare covers hospital stays, doctor visits, durable medical equipment, home health care and other medical services.

    However, it doesn’t cover vision, dental, hearing or prescriptions.

    Medicare Part D is optional prescription drug coverage, and serves as a supplement to Original Medicare.

    Medicare Part C, better known as Medicare Advantage, is an alternative to Original Medicare. It’s provided by federally approved private insurance companies and bundles features of Part A, Part B and usually Part D drug coverage into a single plan.

    You can have other insurance — such as Medicaid or employer coverage — and Medicare at the same time. In this situation, Medicare pays first and your other insurance is the secondary payer.

    Part A: Hospital Coverage

    Medicare Part A is basically hospital insurance. It’s premium-free for most Medicare beneficiaries because you paid into it during your working years via those Medicare taxes.

    However, Part A isn’t completely free. You still have Part A deductibles and coinsurance costs.

    Medicare Part A covers:

    • In-patient hospital care
    • Skilled nursing facility care
    • Home health care
    • Hospice

    2023 Medicare Part A costs include:

    • $0 monthly premiums for most people.
    • A deductible of $1,600 per benefit period. (This is how much you pay out-of-pocket before Medicare picks up the rest of the bill).
    • $0 for the first 60 days in a hospital. Then $400 per day for days 61 through 90. After day 90, you can dip into a reserve of 60 days that you get over your lifetime, but you’ll pay $800 a day. Once you run out of lifetime reserve days, you’re responsible for the full cost.
    • $0 for the first 20 days in a skilled nursing facility following a hospitalization. Then ​​$200 per day for days 21 through 100. Beyond day 100, you pay all the costs.
    • $0 for hospice care and related services.

    A note about benefit periods: The clock for a benefit period begins when you’re admitted to the hospital or a skilled nursing facility as an in-patient. It ends once you haven’t had any in-patient care for 60 days.

    So if you had a 75-day hospitalization, you’d pay a $1,600 deductible, plus coinsurance of $6,000 (for days 61 through 75 at $400 per day).

    If you were hospitalized again six months later, you’d start a new benefit period. You’d owe another $1,600 deductible. So it’s possible to owe the Part A deductible multiple times in one calendar year if you’re hospitalized multiple times.

    However, so long as you didn’t remain hospitalized for more than 60 days during your second visit, you wouldn’t have any coinsurance costs.

    Some beneficiaries purchase Medicare supplement insurance policies, better known as Medigap, that help cover Part A deductibles and some other costs.

    Pro Tip

    Over 95% of people don’t pay a monthly premium for Part A. But if you worked less than 10 years prior to your 65th birthday, you may owe up to $506 in Part A monthly premiums.

    Part B: Medical Coverage

    Medicare Part B covers you for doctor’s services and outpatient care:

    Medicare Part B covers:

    • Doctor visits (including telehealth)
    • Lab work
    • Diagnostic tests and preventative care
    • Mental health coverage
    • Physical therapy
    • Chemotherapy
    • Durable medical equipment
    • Outpatient surgeries
    • Ambulance services

    Unlike Medicare Part A premiums, your Part B premiums aren’t free.

    Some people who are still working and covered by employer medical insurance or are covered under their spouse’s health insurance plan opt to postpone Medicare Part B coverage until their other coverage ends.

    2022 Medicare Part B costs include:

    • Monthly premium of $164.90. This amount is higher for single filers with an income above $97,000, and married couples with an income above $194,000. People with limited incomes may qualify for Medicaid or a Medicare Savings Program that helps cover this cost.
    • A $226 annual deductible.
    • 20% coinsurance for Medicare Part B services after your deductible is paid.
    • $0 for most preventive services.

    If you receive Social Security, your Medicare Part B premiums are automatically deducted from your benefit each month.

    Pro Tip

    Medicare determines your premiums using your tax returns from two years earlier, so your 2021 return will be used to determine your 2023 premiums.

    Part D: Drug Coverage

    Medicare Part D is an optional prescription drug coverage program for people enrolled in Original Medicare. This coverage is provided by a private insurance company that Medicare later reimburses.

    All Medicare prescription drug plans are required to cover certain categories of prescription drugs, but plans can vary widely in terms of what specific drugs they cover. Thus, your prescription drug costs can vary, depending on the Medicare Part D you choose.

    You can shop for a Part D plan by using the Medicare Plan Finder tool.

    Your Medicare Part D costs will depend on your income, your prescription drugs, the plan you select and the pharmacies you use.

    • Premiums: Vary by plan. The Centers for Medicare & Medicaid Services (CMS) estimates the average premium for basic Part D coverage is $31.50 a month in 2023.
    • Deductible: Most Part D prescription drug plans charge a deductible. The Part D deductible is capped at $505.
    • Income: High income earners — single filers making more than $97,000 or joint filers making $194,000 or more — pay an additional monthly surcharge of ​​$12.20 to $76.40 a month.
    Pro Tip

    The average Part D premium for 2023 is projected to be $31.50 a month.

    Medicare Advantage Plans (Part C)

    Medicare Part C, better known as Medicare Advantage, is an all-in-one alternative to Original Medicare.

    You can buy a Medicare Advantage plan offered by a Medicare-approved private insurance company.

    Most Medicare Advantage plans bundle in Part D prescription drug coverage, allowing you to get all your Medicare benefits in a single plan. Many include additional benefits Original Medicare doesn’t cover, like hearing, dental and vision coverage.

    Think of Medicare Advantage like this:

    Part C = Part A + Part B + Part D (usually) + some extra services

    Medicare Part C covers:

    • All the services covered by Original Medicare, including emergency and urgent medical care.
    • Vision, hearing and dental (usually).
    • Prescription drugs (usually).

    2023 Medicare Part C costs include:

    • Deductibles and coinsurance, which vary from plan to plan.
    • You may pay a premium for your Medicare Advantage plan in addition to your monthly Part B premium.
    • Some plans have a $0 premium or may help pay some of your Part B premiums.

    Unlike Original Medicare, Medicare Advantage plans restrict you to health care providers and services within the plan’s local network. You may also need to get prior authorization and approval from your plan for certain services and supplies.

    Pro Tip

    In 2023, the average monthly premium for a Medicare Advantage plan is projected to be $18 a month.

    Medigap (Medicare Supplement Insurance)

    Medigap policies help cover some out-of-pocket costs, such as deductibles and coinsurance, for Original Medicare beneficiaries.

    You can only purchase a Medigap policy if you’re enrolled in Original Medicare. Medicare Advantage enrollees can’t buy these supplement insurance policies.

    Medicare supplement insurance plans are sold by private insurance companies. You’ll pay an insurer a monthly premium for your Medigap coverage in addition to all your other Medicare costs.

    Pro Tip

    Funding a health savings account (HSA) before you’re eligible for Medicare is a good way to save for the costs Medicare won’t cover.

    4. What Doesn’t Medicare Cover?

    There are several major medical expenses that aren’t covered by Medicare Part A or Part B.

    But remember: You can get some of these services covered if you add a Part D plan or switch to a Medicare Advantage plan.

    • Long-term care: No part of Medicare — including Medicare Advantage plans — covers extended nursing home or assisted living facility stays. Medicare coverage for nursing care is mostly limited to short-term rehabilitative stays. Medicaid — which assists people with low income, regardless of age — can pick up the tab for long-term care, but only after you’ve depleted your financial resources.
    • Prescription drugs: Part D coverage is necessary.
    • Dental: Original Medicare doesn’t cover routine dental care, including cleanings, fillings, tooth extractions and dentures, but Part A may cover emergency dental work you incur during a hospital stay.
    • Vision: Original Medicare won’t pay for eye exams, glasses or contact lenses.
    • Hearing aids: Original Medicare doesn’t pay for hearing aids or exams for fitting hearing aids.

    Other services not covered by Medicare:

    • Most cosmetic surgery
    • Sterilization, including a hysterectomy (unless it’s considered medically necessary)
    • Medical marijuana
    • Massage therapy
    • Health care outside the United States

    5. How Do I Sign Up for Medicare?

    If you’re already receiving Social Security benefits, you’ll be automatically enrolled in Medicare. You don’t have to do anything.

    Otherwise, you’ll need to sign up for Medicare around your 65th birthday, and you have a seven-month window to enroll.

    This initial enrollment period begins three months before your birthday month, includes your birthday month and extends three months after that.

    So if you were born on Jan. 5, you could sign up between Oct. 1 and April 30.

    You can also sign up during Medicare’s general enrollment period between Jan. 1 and March 31 if you missed the seven-month window around your 65th birthday. But your benefits won’t start until July of that year.

    The Medicare enrollment process is handled by the Social Security Administration. If you’re not automatically enrolled, you can sign up for Medicare by visiting Social Security’s website, calling 800-772-1213 or visiting your local Social Security office.

    You can enroll in Medicare even if you don’t plan to retire right when you turn 65.

    Pro Tip

    Once you sign up, your Medicare card is your ticket to using your coverage. You’ll need to replace your Medicare card if yours gets lost, damaged or stolen.

    6. What Is Open Enrollment?

    Medicare open enrollment, also known as the annual election period, runs from Oct. 15 through Dec. 7 each year.

    It’s the time when people who are already enrolled in Medicare can make changes to their plans.

    If you’re happy with your coverage, you don’t need to do anything.

    During open enrollment, you can:

    • Switch from Original Medicare to Medicare Advantage, or vice versa.
    • Switch to a different Medicare Advantage plan.
    • Sign up for Part D if you didn’t enroll when you first became eligible.
    • Change to a different Part D plan.

    Whatever changes you make won’t go into effect until Jan. 1. So if you make changes during the 2022 open enrollment period, your new benefits will kick in January 2023.

    7. Is Signing Up for Medicare Mandatory?

    In some cases, yes.

    If you have coverage under the Affordable Care Act, COBRA through a past employer or TRICARE for retired military members, you’re required to enroll in Medicare when you turn 65.

    You may not have to sign up for Medicare right away if you’re still working and enrolled in your employer’s group health plan coverage or if your spouse is still working and you’re covered under their plan.

    But be sure to check with your employer. Some companies will require you to enroll in Part A and Part B and use your employer insurance as secondary coverage.

    Be sure you’re very clear on the rules. The penalties for late enrollment are steep and, in some cases, can increase your Medicare costs for the rest of your life.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected] or chat with her in The Penny Hoarder Community.

    Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.


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    robin@thepennyhoarder.com (Robin Hartill, CFP®)

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  • Before Natural Disasters Strike, Seniors Living Alone Need To Prepare

    Before Natural Disasters Strike, Seniors Living Alone Need To Prepare

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    The New York Times
    NYT
     profiled older storm victims facing an uncertain future after Hurricane Ian. The featured picture was an older couple with their arms around each other, comforting each other. The reporter then disclosed that the couple was unable to rebuild the lives they had enjoyed for 20-plus years in their adopted state of Florida because they didn’t have the resources to rebuild. That’s a tragedy for them and others in that same boat.

    The story went on to say that they had chosen to return to Kentucky, the far-less-expensive state from which they moved, to stay with their daughter and figure out their next steps. Sounds like a reasonable plan for them. But what about the millions of people in this country who don’t have children whose basement or garage apartment they can move into for a few months or years? What about people who don’t have a spouse with whom to share the emotional and logistical burden of rebuilding their lives?

    Solo agers, people without children or other family support, represent an increasingly large percentage of the older adult population in the United States. The childless, alone, number more than 12 million and when you add in those who are estranged from their children or live thousands of miles away, it becomes a very impressive picture in a very unsettling way.

    For a variety of reasons, retired cohorts in earlier decades included far fewer solo agers. The Baby Boomers, however — especially the later ones born between 1955 and 1964 — had more than double the rate of childlessness of all previous generations. This fact presents challenges for individuals, communities, and government services.

    One of the biggest challenges for individuals who consider themselves solo agers is developing a backup plan. No one likes to think about disaster striking where they live, but we live in turbulent times and natural disasters are becoming more and more common. If you consider yourself to be a solo ager, it’s important to take a realistic look at the kind of disaster that might happen in your area. In my own area it’s fire. Other parts of the country are threatened by tornadoes, hurricanes, flooding, or earthquakes.

    The Centers for Disease Control and Prevention recommends that all older adults create an emergency preparedness plan, and recommends taking the following measures:

    • Choose a contact person who will check on you during a disaster, and decide how you will communicate with each other (for instance, by telephone or knocking on doors). Consider speaking with your neighbors about developing a check-in system together.
    • Create a list of contact information for family members and friends. Leave a copy by your phone(s) and include one in your emergency supply kit.
    • Plan how you will leave and where you will go during an evacuation. If you are living in a retirement or assisted living community, learn what procedures are in place in case of emergencies. Keep a copy of exit routes and meeting places in an easy-to-reach place.
    • If you have medical, transportation, or other access needs during an emergency, consider signing up for SMART911, Code Red, or your local county registry, depending upon which service your area uses to helps first responders identify people who may need assistance right away.

    These days, most people rely on their cell phones, so make sure you have your ICE (in case of emergency) contact prominently displayed on your phone. You may even want to create a separate contact entry just for this purpose.

    One other preparatory action you might want to consider is creating a reciprocal shelter plan with a friend in a different geographic location. Here is an example: Jeanne lives in an area of Oklahoma considered to be part of “tornado alley.” Like most people in the area, she has a storm shelter, but Jeanne fears the day may come when she will emerge from the storm cellar to find that her home had been destroyed by the tornado.

    Jeanne’s friend, Alice, lives in Galveston, Texas which, being a coastal city, is vulnerable to hurricanes. Jeanne and Alice know each other from their college days, are both single solo agers and have become “shelter partners,” each agreeing to house the other for up to two years following a catastrophe which makes either of their homes unlivable. The statistical chances of either of these women becoming homeless because of a major catastrophe are quite slim, of course. But it does happen to thousands of people every year, so they have wisely chosen to be prepared.

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    Sara Zeff Geber, PhD, Contributor

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  • Capstone Planning Opens New Office to Provide Palm Coast Residents With a Better Retirement

    Capstone Planning Opens New Office to Provide Palm Coast Residents With a Better Retirement

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    Press Release
    –

    Oct 14, 2022


    PALM COAST, Fla., October 14, 2022 (Newswire.com)
    –
    Capstone Planning, an independent financial services firm, opened the doors to their brand-new location on Oct. 7, 2022. The 6,400 sq ft new office is located in Palm Coast Town Center. The multi-million dollar investment in the Palm Coast community is designed to service and aid the growing number of individuals and families that choose Palm Coast to be their retirement destination.

    The family-owned firm has served retirees and people approaching retirement in Palm Coast and Ormond Beach for 25 years. “We wanted to invest in our community in a bigger way,” said Timothy Wiltfong, Capstone Planning president and founder. “Our new location allows us to do even more for Palm Coast residents. We’re committed to making our community a great place to live, both before and after retirement.”

    “Retirement is what we do,” said Keith Wiltfong, CFP®. “The people we work with are usually looking for reassurance they will have enough money to last through retirement. They’re also looking for guidance, someone to help them make important decisions and put a clear financial plan in place to get them through their later years.”

    The firm achieves this through their proprietary process The Better Retirement Journey™, a comprehensive financial plan incorporating five key aspects of retirement planning: income, investments, taxes, health care and legacy. “We want our clients to live by design, not by default,” said Connie Wiltfong. “We want our clients to live with confidence and certainty, not worry and fear. They should be living out the dreams and desires they’ve worked for over the past three or four decades.”

    Kris Wiltfong agreed. “We’re known for helping our clients make life happen,” he said. “You get one shot at retirement. People wonder if they’re doing their planning right. We’ve helped hundreds of people get to and through the retirement finish line.”

    About Capstone Planning

    Capstone Planning is a full-service, family-owned independent financial services firm in Palm Coast and Ormond Beach. Since 1998, they have helped hundreds of people create a long-lasting and fulfilling retirement. Visit capstoneplanning.com to learn more about the Wiltfong family and their proprietary process The Better Retirement Journey™.

    Source: Capstone Planning

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  • New Affordable Over-The-Counter Hearing Aids Will Be Available Oct. 17

    New Affordable Over-The-Counter Hearing Aids Will Be Available Oct. 17

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    New over-the-counter hearing aids will be available without a prescription or medical exam as soon as Oct. 17, following a final ruling from the U.S. Food and Drug Administration in August.

    These devices will be available online, at pharmacies and in retail stores. Big names like Walgreens, Walmart and Best Buy have already announced plans to carry a selection of products this fall.

    The new class of OTC devices — available for adults with perceived mild to moderate hearing loss — will be equipped with the same basic technology as traditional hearing aids but at a fraction of the cost.

    Hearing aid devices can cost anywhere from $900 to $4,000 per ear. Many health insurance providers — including traditional Medicare — don’t cover the devices or hearing tests.

    The new rule also cuts the red tape plaguing many consumers. Hearing aids are currently only available with a prescription from an audiologist or a hearing health specialist. Multiple appointments are usually required, from consultations to fitting adjustments.

    So how are over-the-counter hearing aids different?

    Here’s what you need to know.

    How Much Will Over-the-Counter Hearing Aids Cost?

    Over-the-counter hearing aids are just starting to hit store shelves, so it’s hard to say how much they’ll cost. The White House said it anticipates OTC devices will save Americans as much as $3,000 per pair.

    Walgreens announced plans recently to start carrying Lexie Lumen hearing aids in stores nationwide starting Oct. 17 for $799.

    Consumers will also be able to purchase these hearing aids online through Walgreens Find Care for $39 per month for 24 months ($936 total).

    Each pair of hearing aids at Walgreens will also include batteries and accessories as well as a 45-day money-back guarantee.

    Walmart also told Reuters it will begin offering over-the-counter hearing aids to adults with mild to moderate hearing impairments without a medical exam starting Oct. 17 — but the major retailer declined to say how much they will cost.

    Competition from manufacturers is expected to drive prices down on OTC hearing aids. But by how much or how quickly is still anyone’s guess.

    Will OTC Hearing Aids Be HSA and FSA Eligible?

    You can use a health savings account (HSA) or a flexible spending account (FSA) to purchase OTC hearing aids.

    The new category of over-the-counter hearing aids is also expected to qualify.

    A health savings account is a tax-advantaged account you and your employer can contribute to that can pay for a long list of eligible medical expenses. An FSA offers similar tax-saving benefits but with different contribution limits and other rules.

    Pro Tip

    What’s the difference between an HSA and FSA? Learn the pros and cons of both.

    Are Over-the-Counter Hearing Aids Right For You?

    OTC hearing aids are intended for people 18 or older with mild to moderate hearing loss.

    They’re not meant for everyone or every situation, kind of like drugstore reading glasses.

    You might be a good candidate for an OTC hearing aid device if you experience the following symptoms, according to the National Institute on Deafness and Other Communication Disorders:

    • Speech or other sounds regularly seem muffled.
    • Having trouble hearing over background noise.
    • Struggling to understand speech in a phone call, on the television, or when you can’t see who is talking.
    • Difficulty hearing in noisy environments.
    • Trouble hearing loud sounds.
    • Regularly asking others to speak more slowly or clearly, to talk louder, or to repeat themselves.
    • Getting regular complaints from family or friends that you’ve turned the sound up too loud or aren’t hearing them properly.

    If you have severe hearing loss or a specific hearing issue — such as deafness in only one ear — you should consult an audiologist.

    Likewise, you should see a doctor right away if you experience dizziness, sudden hearing loss, pain or discomfort in your ear canal as these can be signs of a more serious medical condition.

    Visiting a hearing care professional can also be beneficial if you want advice on how to choose the right hearing aid or need help adjusting or repairing your OTC device.

    The Hearing Loss Association of America offers this tip sheet to help you decide if OTC hearing aids are right for you. It also includes questions to ask yourself when shopping around for a new device.

    How Do You Buy OTC Hearing Aids?

    Over-the-counter hearing aids will be advertised and sold in pharmacies, big-box stores, online and through the mail. You won’t need a prescription from a hearing specialist to buy them.

    You fit the devices yourself, and you might be able to control and adjust the settings in ways that people with prescription hearing aids cannot.

    An automated hearing test may be offered through a smartphone app so you can test your hearing at home.

    You’ll probably use a smartphone or computer to install and customize your hearing devices as well.

    Companies like Audicus, Bose, Eargo, Jabra, Lexie and Lively are all expected to be big players in the OTC market. Additional manufacturers and devices will also emerge over the next few years.

    More consumer guidance on how to buy and use OTC hearing aids is expected in the coming weeks.

    The Fight For Affordable Hearing Aids

    Lawmakers and advocacy groups like AARP have fought for years to lower the cost of hearing aids and make them more accessible.

    Under the current system, audiologists usually buy hearing aids wholesale from manufacturers and then set their own prices.

    Five manufacturers control about 90% of the hearing aid market, according to a Senate investigative report released in June. Many policy makers say this lack of competition among prescription devices contributes to higher retail prices.

    The actual devices usually account for just a fraction of the total cost. Hearing aids are typically bundled with multiple services, including a hearing exam, fittings, programming and repairs.

    The added expense of these professional audiology services is what really drives up the cost for many people, especially older Americans.

    Medicare beneficiaries spent an average of $914 out of pocket on hearing services in 2018, according to a report from the nonprofit Kaiser Family Foundation.

    Approval for OTC hearing aids has been years in the making.

    In 2017, Congress ordered the FDA to craft regulations for over-the-counter devices and the proposal was signed by former president Donald Trump.

    Little progress was made after that. In July 2021, President Joe Biden called on the FDA to take action “to promote the wide availability of low-cost hearing aids.”

    The FDA reviewed more than 1,000 public comments and tweaked the proposal before approving its final rule Aug. 16, 2022.

    Wait, Haven’t OTC Hearing Aids Been Around For a While?

    Devices known as personal sound amplification products, or PSAPs, have been on the market for years. The same goes for TV amplifiers, hearing assistive devices and hearing protection devices.

    These products help people with normal hearing amplify sounds in specific situations — but they’ve never been approved to help treat hearing loss.

    The quality of these consumer electronics also varies widely. Attorneys general in New York, California and Texas have warned consumers about low-quality amplifiers falsely marketed as over-the-counter hearing aids in recent years.

    The FDA said it is clamping down on this deceptive advertising.

    OTC hearing aids will be regulated as medical devices by the FDA, and must adhere to strict specifications and labeling guidelines.

    Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.


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    rachel.christian@thepennyhoarder.com (Rachel Christian, CEPF®)

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  • Social Security Benefits Will Increase by a Record 8.7% in 2023

    Social Security Benefits Will Increase by a Record 8.7% in 2023

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    If you’re on Social Security, you can expect your check to increase by 8.7% in January. That’s the biggest cost-of-living adjustment in four decades.

    The Social Security Administration made the announcement Oct. 13, the same day new inflation numbers were released.

    Here’s what that will look like for the average Social Security recipient:

    • Retired workers will get an extra $147 a month on average, bringing the average monthly benefit to $1,827.
    • Disabled workers will get an extra $119 a month on average, bringing the average monthly benefit to $1,483.
    • The maximum Supplemental Security Income (SSI) benefit for individuals will increase by $73 a month, bringing the maximum monthly benefit to $914.

    An 8.7% cost-of-living adjustment (COLA) sounds pretty generous, considering that Social Security benefits increased by 5.9% in 2022 — the largest boost in about 40 years.

    But as prices for everything from groceries to housing skyrocket, will an extra $147 a month really be enough for the average retiree?

    Why Is this Year’s COLA So High?

    Social Security’s annual cost-of-living adjustment is tied to inflation. And inflation has been stubbornly high for over a year now.

    The government uses the Consumer Price Index for Urban Wage Earners and Clerical Workers‌, or CPI-W, to measure inflation.

    Each year, Social Security averages the CPI-W figures from the third quarter and compares it to the previous year’s figure.

    Inflation has been at least 8.3% since July. That’s why this year’s Social Security COLA is so large: It needs to keep pace with inflation.

    Why a 8.7% COLA Isn’t Great News

    If you receive Social Security benefits, you may find that an extra $147 a month doesn’t stretch very far.

    While Social Security checks are getting bigger, the price of everyday items like food and housing is also going up.

    You’ll have a bigger check, but most of it will be eaten up by higher prices.

    Another potential drawback? The large COLA will push some retirees over income thresholds and require them to pay income taxes on part of their Social Security benefits.

    Retirees must pay taxes on their Social Security benefits if:

    • Half of their yearly Social Security benefits + other income = more than $25,000 for single filers or $32,000 for married couples filing jointly.

    If Social Security is your only income, you don’t need to worry about paying taxes on your benefits.

    However, if you receive income outside Social Security (like wages from a job or traditional 401(k) withdrawals), this year’s or next year’s cost-of-living adjustments could push you above the threshold of $25,000 for single filers or $32,000 for married couples filing jointly.

    “More Social Security recipients pay the tax on a portion of their benefits as incomes increase over time,” said Mary Johnson, an analyst with The Senior Citizen League.

    One Silver Lining: Medicare Part B Premiums Are Going Down

    The new COLA isn’t all bad news.

    The standard Part B premium, which is typically deducted from Social Security benefits, is going down next year by ​​$5.20 per month, or 3%. The annual Part B deductible is also decreasing by $7‌.

    It’s the first time in a decade that Part B premiums have decreased instead of increased.

    In years when the COLA is small — or the Part B increase is large — retirees may barely see a boost to their Social Security checks.

    But that’s not the case this year. The rising cost-of-living adjustment won’t be eaten up by rising Part B premiums, which means more money in the pockets of Social Security recipients.

    What if Your Social Security COLA Isn’t Enough?

    There are no easy fixes if your Social Security check won’t go far enough, even with a 8.7% COLA.

    If you’re struggling to pay for food, getting assistance from a food pantry or an organization like Meals on Wheels may be an option.

    If you have an emergency expense, like you’re facing eviction or an energy bill you can’t afford, try calling United Way’s 211 hotline, which can connect you with local resources.

    Here are some other resources:

    The 8.7% increase in Social Security benefits will certainly help seniors dealing with soaring costs. But it’s essential to be realistic about how far it will actually go in your retirement budget.

    Unfortunately, the average Social Security recipient will see most of their pay raise eaten up by rising living costs.

    Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.


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  • Dear Penny: Can I Take My Ex-Wife’s Social Security if I Already Get SSDI?

    Dear Penny: Can I Take My Ex-Wife’s Social Security if I Already Get SSDI?

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    Dear Penny,

    I am 63 years old, disabled and collect SSDI. My ex-wife currently pays me alimony ($360 per month) and will do so until I turn 65. I cannot work, and I’m worried I won’t be able to support myself solely on my SSDI monthly income without that additional $360.

    We were married from 1980 until 2017. She was the plaintiff in the divorce and filed on the basis of irreconcilable differences. I don’t have a copy of our marriage license, but I do have the divorce decree. I have no way of obtaining her Social Security number. She currently lives in Florida. (Her return address on the alimony checks is a Florida address.) She was born in 1959.

    She is currently, or had been self-employed as a licensed mental health counselor. I don’t know her current employment status now, as we have no contact with each other. Therefore, I don’t know if she has filed for Social Security benefits.

    I believe she inherited a significant amount of money when her mom passed away not long after the divorce which (I’m guessing) she has in a trust fund. I was told I don’t have any rights to any portion of that inheritance, despite the fact that we were married 36 years.

    Since she is in a much better position financially, I’m wondering if I have the right to claim a portion of her Social Security when she files, if she hasn’t already. 

    -R.

    Dear R.,

    You’d qualify for spousal benefits based on your ex-wife’s earnings. But that probably won’t do you much good. Social Security doesn’t allow for double-dipping. You can receive your own benefit or a spousal benefit, but not both. Social Security gives you whichever one is higher.

    Social Security Disability Insurance (SSDI) benefits are based on your own earnings. Essentially, your benefit is calculated as if you’d reached full retirement age. But the maximum spousal benefit is just 50% of the other person’s full retirement age benefit.

    Even if your ex-wife significantly outearned you, your SSDI benefit is probably more than you’d receive through spousal benefits. As of August 2022, the average Social Security disability benefit was about 63% higher than the average spousal benefit.

    This doesn’t have to be a guessing game, though. You can call Social Security and provide them with the information you have about your ex-wife. While having her Social Security number would make things easier, staff can still help you locate her earnings record without it. That way you’ll know with certainty that you’re not leaving money on the table.

    Unfortunately, I have to layer on more bad news: The person who told you that you have zero rights to your ex’s inheritance was correct. Even if you’d stayed married, you wouldn’t have been entitled to that money. Inheritances are generally treated as separate property, rather than marital property, meaning they belong exclusively to the inheriting spouse.

    So where does that leave you? You know that you’re facing a potential $360 budget shortfall. You know that the odds of squeezing more money out of Social Security are slim and that the hole won’t be filled by your wife’s inheritance. So you have two years to prepare.

    If you own your home and have significant equity, consider taking out a reverse mortgage. Otherwise, if you have an extra bedroom, perhaps you could take in a renter to generate extra income.

    You should also investigate whether you qualify for benefits beyond your SSDI payments. A good place to start is benefits.gov. For example, maybe you’d qualify for the Supplemental Nutrition Assistance Program (SNAP) or a Medicare Savings Program.

    Though you say that you’re unable to work, consider just how much work has changed in the last few years. Even if you’re not able to report to an on-site job with regular hours, might it be possible for you to earn extra money with gig work or a remote job?

    You only need to replace about $90 a week. You’re allowed to earn up to $1,350 a month (or $2,250 if you’re blind) while receiving Social Security disability in 2022. These limits will probably rise slightly in 2023. And once you reach full retirement age at 67, your disability will convert to retirement benefits, and you’ll have no income limits.

    You’re probably on a tight budget already. But if it’s possible to set aside any money from your alimony now — even if it’s just $25 or $50 a month — try to do so, in order to build yourself a cushion for when those checks end.

    Knowing that your alimony payments will eventually dry up has to be stressful, given that you’re on a fixed income. But at least you have time to prepare. Use the next two years to explore alternative sources of income and benefits.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].


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  • Forget to Roll Over Your 401(k)? Find It in This New ‘Lost & Found’

    Forget to Roll Over Your 401(k)? Find It in This New ‘Lost & Found’

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    Did you forget something when you left your last employer?

    Not the threadbare office sweater — your 401(k). Forgetting that could cost you.

    Many companies stop maintaining a former employee’s 401(k) if there’s less than $5,000 in the account. Although it might be tempting to get a check for the remaining amount right away, cashing out your 401(k) comes with financial penalties and taxes while reducing your retirement savings.

    But now a group of the largest 401(k) plan administrators, including Fidelity and Vanguard, are creating a way to change that — a sort of “lost and found” to make sure your old 401(k) accounts don’t slip out of your grasp.

    And as more of us change jobs more frequently, there are additional opportunities for more of these small 401(k) accounts to be hanging around.

    Here’s how you can track down your old 401(k) and hold onto more of your retirement savings.

    ‘Losing’ Your 401(k) Account

    To be fair, a lot of this money isn’t totally, totally lost. It’s a little more complicated than that.

    When you quit your job, you can’t contribute to your old 401(k) account anymore. But that money still belongs to you. You should roll it over into a new plan — either your new company’s 401(k) or an individual retirement account, aka an IRA.

    If you fail to roll over your old 401(k) account and it’s less than the company’s minimum amount required to maintain the account, your long-term retirement investments from that account may be liquidated into cash whether you want that or not.

    So instead of seamlessly continuing to invest that money for your golden years, you’ll eventually get a lump-sum check in your mailbox.

    Doesn’t sound like a big deal? The catch is that you’ll pay nasty financial penalties, and the loss of even a small 401(k) account can put a serious dent in your retirement plans down the line.

    If you’re younger than 59 when you cash out a retirement account, you’ll immediately pay a 10% penalty off the top. You’ll also have to pay income taxes on that money when you file your taxes.

    Picture a 25-year-old worker who changes jobs and rolls over a small, $5,000 retirement account instead of cashing it out. Thanks to the sweet, sweet magic of compound interest and long-term investments, that bright-eyed young worker could see that $5,000 grow by 14 times to a whopping $70,000 by the time they retire.

    If that same worker cashed out their $5,000, they’d incur a 10% penalty off the bat, which reduces their check to $4,500. Then they’d get stuck with a larger tax bill since that money will be counted as income.

    The lesson: Don’t cash out your 401(k) if you can help it.

    If You Don’t Pay Attention, They’ll Cash It Out for You

    Why aren’t people rolling over their 401(k) accounts? It’s because we’re all changing jobs more often. Also, more employers are automatically enrolling workers into company 401(k) plans, creating lots of small retirement accounts that job-hopping workers are barely aware of.

    If you don’t bother to roll over a small 401(k) account when you leave — an account holding $5,000 or less — here’s what happens:

    • If it’s less than $1,000, your old employer will probably liquidate your retirement investments and mail you a check. And you get to pay all those financial penalties, hooray!
    • If it’s between $1,000 and $5,000, your old employer will likely stick your money in an unmanaged IRA so the company’s 401(k) plan won’t have to pay the fees for it. But your money will just sit stupidly in that account as cash instead of being invested in stocks and bonds. You won’t pay any penalties, but your retirement money won’t grow like it should.

    The cashing out of 401(k) accounts is turning into a bigger and bigger problem, emptying nearly $100 billion a year out of Americans’ retirement savings, according to the Employee Benefit Research Institute.

    The new “lost and found” system we’re talking about will prevent this problem by automatically rolling over your retirement account — as long as your 401(k) plan is run by certain companies.

    How the ‘Lost and Found’ Works

    A coalition of big-time 401(k) plan administrators and IT companies, including Fidelity Investments, Vanguard Group, Alight Solutions and Retirement Clearinghouse created a consortium called Portability Services Network.

    If you quit a job with $5,000 or less in your 401(k) account, this new system will transfer your 401(k) money into your new company’s plan whenever possible. The network is expected to launch in early 2023. Participants whose workplace retirement accounts are transferred via auto portability through PSN are charged a one-time transaction fee of $30 or less, depending on the size of the account.

    Aside from 401(k) plans, they’ll also do the same thing for less-common 403(b), 401(a) and 457 plans.

    What Should You Do?

    This is important: Despite this cool new automatic system, it’s still probably your responsibility to make sure your old 401(k) account gets rolled over to your new plan — at least, for now.

    The large 401(k) plan administrators that are doing this? They still account for only about 40% of all 401(k) investors.

    At this point, that means about 60% of all 401(k) accounts are totally unaffected by all this. This new 401(k) “lost and found” system won’t find these accounts because it can’t see them.

    For now, it’s still on you to keep your retirement plans running smoothly whenever you change jobs. Down the road, you’ll be happy you made the effort.

    Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.


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  • Dear Penny: Who Gets My Dogs When I Die if I Have No Close Family?

    Dear Penny: Who Gets My Dogs When I Die if I Have No Close Family?

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    Dear Penny,

    I am a widow with a home, property and two large dogs. My health is fairly good, but I’m getting older and starting to question what moves I should make to secure my future. I have no will, as most of my relatives have passed away. I do have a few grandkids who live far away.

    I do not know where to start on securing my future in case I get ill, owning my home vs. renting (expensive), and whether I should move to another small, SAFE town with medical facilities. If I die, who would get my home, money and so on? My dogs are important, too.

    I’m undecided on what to do and where to start, as I’m not getting any younger and I have no spouse to help with any decisions.

    -C.

    Dear C.,

    Focus on the most pressing issue: You don’t have an estate plan. That’s something even healthy young adults should have, but it becomes more important as you age.

    There’s a saying in estate planning that if you don’t have a will, your state has one for you. In other words, when you don’t document your wishes, your state’s intestacy laws decide who gets what. If your grandchildren are your closest living relatives, they’d probably inherit your property after a drawn-out probate process. Likewise, if you become unable to make decisions on your own behalf, a court would also appoint someone — probably your closest living relative — to make decisions on your behalf.

    My two big concerns are: What would happen to your dogs if you died or became unable to care for them? And who would you want to make decisions for you if you become incapacitated?

    Before you create your estate plan, do a little homework. Is there anyone you think might be willing to care for your dogs if necessary? If so, ask them if you can leave your pups to them in your will.

    It’s important to note that even though pets are cherished family members for many of us, they’re considered property under the law. That means they can’t inherit money.

    If you find a willing caregiver, the best option would be to set up a pet trust. You can use this document to name a caretaker and leave instructions for the dogs’ care. The advantage of using a pet trust versus simply leaving your dogs to someone in your will is that you can set aside money to be used specifically for your dogs.

    If you can’t find a caregiver, you can look into perpetual pet care programs, like Peace of Mind Dog Rescue or the Perpetual Pet Care Program at the Kansas State University College of Veterinary Medicine. In exchange for a donation, they’ll ensure your pets have lifetime care.

    You should also think about whom you’d want to make medical decisions and manage your finances on your behalf if you become incapacitated. You can use a health care proxy to name someone to make health decisions for you, as well as a living will to outline your wishes for your care. You can also use a durable power of attorney document to name someone to handle your financial matters if you can’t. Be sure to ask someone if they’re willing to accept these responsibilities before naming them in a legal document.

    Finally, you need to decide whom you want to inherit your non-pet property and money. If you’re not close with your grandchildren, they don’t need to be your beneficiaries. You could choose a friend or a charity you admire to inherit your assets.

    Once you’ve made these decisions, it’s time to create a will and other estate planning documents. Ideally, you’ll do so with an attorney. Though plenty of websites let you draw up these documents for $100 or less, these options aren’t exactly airtight. However, they’re better than nothing.

    You have a lot of other big decisions you’re weighing, like whether to move to a new town and renting vs. remaining a homeowner. When you try to make too many decisions at once, you often wind up overwhelmed. Sometimes you don’t do anything as a result.

    That’s why I’d focus on making a will and determining who will care for your dogs first. Then you can start to weigh the other decisions you’re considering. Try taking baby steps.

    For example, you could research a few towns that meet the criteria you’re seeking. Make it a goal to visit at least one within a certain time frame — say, three months — to see if it better suits your needs.

    Estate planning is a task people put off for obvious reasons. No one likes to think about dying or becoming seriously ill. But it can also be clarifying to contemplate what you want for the end of your life. Once you’ve made those decisions, you may find the decisions that follow are easier as a result.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].


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  • Medicare Part B Premiums Decrease (Slightly) for the First Time in a Decade

    Medicare Part B Premiums Decrease (Slightly) for the First Time in a Decade

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    Medicare beneficiaries will pay less for their Part B premium next year, the first decrease in a decade.

    Other Medicare costs, like Part A deductibles, are on the rise.

    Here’s how it breaks down.

    Medicare Part B Premiums Will Decrease in 2023

    The standard Medicare Part B premium will be $164.90 a month in 2023, down from $170.10 in 2022.

    That’s $5.20 less per month, or a 3% decrease.

    It’s been a decade since Part B premiums decreased instead of increased.

    The Part B deductible — the cost enrollees pay out-of-pocket each year before Medicare starts paying its share — is also decreasing next year, from $233 in 2022 to $226 in 2023.

    Medicare Part B is a foundational part of the federal insurance program, covering doctor visits, outpatient surgeries, medical equipment and more. It charges beneficiaries a monthly premium for coverage and is usually deducted from Social Security checks.

    Decreasing premiums is good news — but it comes on the heels of the biggest Part B premium increase in Medicare history. From 2021 to 2022, Part B premiums jumped $21.60 — or 14.5%.

    Why Are Medicare Part B Premiums Going Down in 2023?

    In 2021, a pricey new Alzhimher’s medication called Aduhelm hit the market. The controversial infusion treatment came with a sticker price of nearly $56,000 a year.

    Medicare wasn’t sure if it would cover the new drug. Or how Medicare would pay for it.
    To create a revenue safety cushion, the Centers for Medicare & Medicaid Services (CMS) hiked everyone’s Part B premiums in 2022 to cover projected spending on the drug — just in case.

    Ultimately, CMS decided to only cover Aduhelm in very limited situations. Medicare didn’t need all that extra money from Part B premiums, after all.

    “Lower-than-projected spending on both Aduhelm and other Part B items and services resulted in much larger reserves,” noted a CMS press release from Sept. 27.

    In May 2022, CMS recommended that any extra revenue should go toward lowering Part B premiums for Medicare beneficiaries.

    Still, the modest reduction beneficiaries will see next year (down $5.20) is just a fraction of the increase they shouldered this year (up $21.60 from 2021).

    Other Medicare Costs Changing in 2023

    While costs for Medicare Part B are going down, costs for Medicare Part A are going up.

    Part A primarily covers hospital stays and skilled nursing facilities.

    Most enrollees don’t pay a monthly premium for Part A, but a deductible is charged for each hospital stay.

    The Part A deductible is increasing by $44, from $1,556 in 2022 to $1,600 in 2023.

    Coinsurance amounts for inpatient care are also rising.

    Patients who are hospitalized for between 61 and 90 days will now pay a daily coinsurance amount of $389, up from $400. After 90 days of hospitalization, they will owe a coinsurance amount of $800, up from $778.

    2023 Medicare Costs at a Glance

    Program 2023 Cost 2022 Cost Change
    Medicare Part B premium $164.90 per month $170.10 per month -$5.20
    Medicare Part B deductible $226 per year $233 per year -$7
    Medicare Part A deductible $1,600 per year $1,556 per year +$44

    Meanwhile, the projected average premiums for both Medicare Advantage plans and Part D plans are expected to decrease slightly in 2023.

    Medicare Surcharge Will Also Be Lower for High-Income Earners

    Higher-income Medicare beneficiaries will pay less in extra Medicare premium charges in 2023 than they did this year.

    Simply put, Part B and Part D premiums are tied to a beneficiary’s income. People with higher incomes pay more than the standard Medicare premiums through what’s known as income-related monthly adjustment amounts, or IRMAAs.

    Only about 7% of Medicare enrollees pay IRMAAs, according to CMS.

    In 2023, the income threshold for IRMAAs is rising and the monthly surcharge is going down.

    These additional charges kick in for beneficiaries earning $97,000 for single tax filers (up from $91,000) and $194,000 for joint filers (up from $182,000).

    Once you cross that threshold, an additional $65 is added to your Part B premium, a decrease of $3 from 2022.

    Meanwhile, the wealthiest older Americans — singles with $500,000 of income or more and couples with $750,000 of income or more — will pay an additional $395.60 per person, a $12.60 decrease over 2022.

    Medicare Open Enrollment Begins Oct. 15

    Each year, beneficiaries get a chance to compare plans and adjust their coverage during Medicare open enrollment. It runs from Oct. 15 to Dec. 7.

    CMS releases next year’s Medicare cost information ahead of open enrollment so you can make informed decisions about your coverage options.

    During open enrollment, you can:

    • Switch from Original Medicare to Medicare Advantage or vice versa.
    • Switch to a different Medicare Advantage plan.
    • Sign up for Part D if you didn’t enroll when you first became eligible.
    • Change to a different Part D plan.

    Whatever changes you make during open enrollment go into effect Jan. 1, 2023.

    If you’re happy with your Medicare coverage, you don’t need to do anything.

    But if your Medicare Advantage or Part D plan is changing next year — or you feel like you’re paying too much for your coverage — shopping around is a smart decision.

    You can compare your coverage options using the online Medicare Plan Finder tool.

    Have questions about signing up for a plan? The State Health Insurance Assistance Program, or SHIP, is a national network of trained volunteers who provide one-on-one assistance, counseling and education to Medicare beneficiaries and their families.

    Medicare is the nation’s largest federal health care program. In 2021, it covered roughly 64 million people ages 65 and older along with some younger people with long-term disabilities — 19.3% of the U.S. population based on census data.

    Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.


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  • 3 Easy Ways to Replace Your Medicare Card If It’s Lost, Damaged or Stolen

    3 Easy Ways to Replace Your Medicare Card If It’s Lost, Damaged or Stolen

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    Your Medicare card is a very important piece of identification. It’s proof of your health insurance benefits.

    You’re often required to present your Medicare card when seeking care. Without it, you could end up paying a lot more out of pocket.

    You’ll receive your card in the mail along with your “Welcome to Medicare” packet when you first enroll in the federal Medicare program.

    Medicare enrollment happens automatically if you already receive Social Security benefits when you turn 65. Otherwise, you need to sign up for Medicare on your own.

    But how do you get a replacement if your Medicare card is lost, stolen or damaged?

    The process is easy, so there’s no reason to put off getting your card replaced.

    Here’s how it works.

    Need a refresher on Medicare? Check out these seven frequently asked questions on how Medicare works.

    3 Ways to Get a Medicare Card Replacement

    There are three main ways to replace your Medicare card if your original is lost, stolen or damaged.

    • Log in to your MyMedicare account
    • Call 800-MEDICARE (800-633-4227)
    • Log in to your My Social Security Account

    1. Log in to Your MyMedicare Account

    This is the fastest way to order a replacement card. Simply login to your Medicare online account, then click Print my Medicare Card on the main page.

    You’ll get a temporary replacement Medicare card online to print, and you can also request a new card be mailed to you.

    If you don’t already have an online Medicare account, it’s easy to set one up. You’ll need your Medicare number, coverage start date, last name, zip code, birthday and email address.

    2. Call 800-MEDICARE (800-633-4227)

    Wait times may be long, but a customer service representative can order you a new card.

    3. Log in to Your My Social Security Account

    Once you’re logged in to your My Social Security account, go to the Medicare Enrollment Detail section and click on Replace Your Medicare Card. Then select Mail My Replacement Medicare Card.

    This is a good option if you don’t already have an online Medicare account and can’t remember your Medicare card number.

    If you receive Railroad Retirement Board benefits, you can call 877-722-5772 to get a replacement card.

    Once you receive your card in the mail, you can start using it right away — no activation required.

    Also, your Medicare card does not expire and you don’t need to “renew” it each year.

    How to Get Other Health Insurance Cards Replaced

    The methods above only apply to your red, white and blue Medicare card.

    To get a replacement card for your Part D, Medicare Advantage or Medicaid plans, you’ll need to contact those providers directly.

    You can find the contact information for your Medicare Advantage plan or Part D plan by logging into your online Medicare account.

    It’s smart to keep a copy of these other health insurance cards in a safe place at home alongside other important documents — like your Social Security card. This way you have a backup in case your wallet is lost or stolen.

    Make Sure Your Address Is Up to Date

    Your new Medicare card will be mailed to the address on file with the Social Security Administration.

    If you’ve moved recently, make sure you have accurate information on file with SSA. Otherwise, your new card will go to the wrong address.

    You’ll also miss other important documents from Medicare, like your summary notices, which details the doctor visits, services and supplies billed to Medicare in your name every three months.

    You can update your address in just a couple minutes through your My Social Security account.

    Don’t have an online Social Security account? You can also call SSA’s national customer service line at 800-772-1213 to update your mailing address.

    You’ll also need to update your address with the private insurance companies that administer other Medicare benefits:

    • Medicare supplement insurance policy, also known as Medigap
    • Part D prescription drug plan
    • Private insurance for specific areas such as dental, hearing and vision

    How Long Does it Take to Get a Medicare Card Replacement?

    It usually takes a month for your card to arrive in the mail at your address on file with the Social Security Administration.

    If you need your card sooner, you can always print it from your Medicare account in a just a few minutes.

    Pro Tip

    Write down your Medicare number in a safe place for future reference. You don’t always need the physical card to get care and benefits.

    Why Your Medicare Card Is Important

    Your Medicare card is your key to health insurance coverage. It verifies your benefits and also allows providers to submit claims for your treatment.

    You’ll need to present your card whenever you visit a health care provider, like your doctor or the ER.

    You’ll also need the information on your card to join a Medicare health plan or prescription drug plan, or to buy a Medigap policy.

    If you want to make changes to your coverage during Medicare open enrollment, you should have your Medicare card on hand.

    Your Medicare card displays the following information:

    • Your name.
    • Your Medicare ID number, also known as your Medicare beneficiary identifier (MBI).
    • Start dates of your Part A and Part B coverage.

    It’s important to keep your Medicare card safe. While Medicare cards no longer display your Social Security number, bad actors can still use your card number to commit Medicare identity theft.

    Pro Tip

    You can report Medicare identity theft and suspected fraud by calling the U.S. Health and Human Services hotline at 800-447-8477.

    Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.


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  • Many young people shouldn’t save for retirement, says research based on a Nobel Prize-winning theory

    Many young people shouldn’t save for retirement, says research based on a Nobel Prize-winning theory

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    Most financial planners advise young people to start saving early — and often — for retirement so they can take advantage of the so-called eighth wonder of the world – the power of compound interest.

    And many advisers routinely urge those entering the workforce to contribute to their 401(k), especially when their employer is matching some portion of the amount the worker is contributing. The matching contribution is – essentially – free money.

    New research, however, indicates that many young people should not save for retirement. 

    The reason has to do with something called the life-cycle model, which suggests that rational individuals allocate resources over their lifetimes with the aim of avoiding sharp changes in their standard of living.

    Put another way, individuals, according to the model which dates back to economists Franco Modigliani, a Nobel Prize winner, and Richard Brumberg in the early 1950s, seek to smooth what economists call their consumption, or what normal people call their spending.

    According to the model, young workers with low income dissave; middle-aged workers save a lot; and retirees spend down their savings.


    Source: Bogleheads.org

    The just-published research examines the life-cycle model even further by looking at high- and low-income workers, as well as whether young workers should be automatically enrolled in 401(k) plans. What the researchers found is this: 

    1. High-income workers tend to experience wage growth over their careers. And that’s the primary reason why they should wait to save. “For these workers, maintaining as steady a standard of living as possible therefore requires spending all income while young and only starting to save for retirement during middle age,” wrote Jason Scott, the managing director of J.S. Retirement Consulting; John Shoven, an economics professor at Stanford University; Sita Slavov, a public policy professor at George Mason University; and John Watson, a lecturer in management at the Stanford Graduate School of Business.

    2. Low-income workers, whose wage profiles tend to be flatter, receive high Social Security replacement rates, making optimal saving rates very low.

    Middle-aged workers will need to save more later

    In an interview, Scott discussed what some might view as a contrary-to-conventional wisdom approach to saving for retirement.

    Why does one save for retirement? In essence, Scott said, it’s because you want to have the same standard of living when you’re not working as you did while you were working.

    “The economic model would suggest ‘Hey, it’s not smart to live really high in the years when you’re working and really low when you’re retired,’” he said. “And so, you try to smooth that out. You want to save when you have relatively high income to support yourself when you have relatively low income. That’s really the core of the life-cycle model.” 

    But why would you spend all your income when you’re young and not save? 

    “In the life-cycle model, we are assuming you are getting the absolute most happiness you can out of income each year,” said Scott. “In other words, you are doing your best at age 25 with $25,000, and there is no way to live ‘cheaply’ and do better,” he said. “We also assume a given amount of money is more valuable to you when you are poor compared to when you are wealthy.” (Meaning $1,000 means a lot more at 25 than at 45.)

    Scott also said that young workers might also consider securing a mortgage to buy a house rather than save for retirement. The reasons? You’re borrowing against future earnings to help that consumption, plus, you’re building equity that could be used to fund future consumption, he said.

    Are young workers squandering the advantage of time?

    Many institutions and advisers recommend just the opposite of what the life-cycle model suggests. They recommend that workers should have a certain amount of their salary salted away for retirement at certain ages in order to fund their desired standard of living in retirement. T. Rowe Price, for instance, suggests that a 30-year-old should have half their salary saved for retirement; a 40-year-old should have 1.5 times to 2 times their salary saved; a 50-year-old should have 3 times to 5.5 times their salary saved; and a 65-year-old should have 7 times to 13.5 times their salary saved.

    Scott doesn’t disagree that workers should have savings benchmarks as a multiple of income. But he said a high-income worker who waits until middle age to save for retirement can easily reach the later-age benchmarks. “Savings for retirement probably is more in the zero range until 35 or so,” Scott said. “And then it is probably faster after that because you want to accumulate the same amount.”

    Plus, he noted, the home equity a worker has could count toward the savings benchmark as well.

    So, what about all the experts who say young people are best positioned to save because they have such a long timeline? Aren’t young workers just squandering that advantage?

    Not necessarily, said Scott. 

    “First: saving earns interest, so you have more in the future,” he said. “However, in economics, we assume that people prefer money today compared to money in the future. Sometimes this is called a time discount. These effects offset each other, so it depends on the situation as to which is more significant. Given interest rates are so low, we generally think time discounts exceed interest rates.”

    And second, Scott said, “early saving could have a benefit from the power of compounding, but the power of compounding is certainly irrelevant when after-inflation interest rates are 0% – as they have been for years.”

    In essence, Scott said, the current environment makes a front-loaded lifetime spending profile optimal.

    Low-income workers don’t need to save either

    As for those with low income, say in the 25th percentile, Scott said it’s less about the “income ramp that really moves saving” and more that Social Security is extremely progressive; it replaces a large percentage of one’s preretirement income. “The natural need to save is not there when Social Security replaces 70, 80, 90% (of one’s preretirement income),” he said.

    In essence, the more Social Security replaces of your preretirement income, the less you’ll need to save. The Social Security Administration and others are currently researching what percent of preretirement income Social Security replaces by income quintile, but previously published research from 2014 shows that Social Security represented nearly 84% of the lowest income quintile’s family income in retirement while it only represented about 16% of the highest income quintile’s family income in retirement.


    Source: Social Security Administration

    Is it worth auto-enrolling young workers in a 401(k) plan?

    Scott and his co-authors also show that the “welfare costs” of automatically enrolling younger workers in defined-contribution plans—if they are passive savers who do not opt-out immediately—can be substantial, even with employer matching. “If saving is suboptimal, saving by default creates welfare costs; you’re doing the wrong thing for this population,” he said.

    Welfare costs, according to Scott, are the costs of taking an action compared to the best possible action. “For example, suppose you wanted to go to restaurant A, but you were forced to go to restaurant B,” he said. “You would have suffered a welfare loss.” 

    In fact, Scott said young workers who are automatically enrolled into their 401(k) might consider when they’re in their early 30s taking the money out of their retirement plan, paying whatever penalty and taxes they might incur, and use the money to improve their standard of living. 

    “It’s optimal for them to take the money and use it to improve their spending,” said Scott. “It would be better if there weren’t penalties.”

    Why is this so? “If I didn’t understand that I was being defaulted into a 401(k) plan, and I didn’t want to save, then I suffered a welfare loss,” said Scott. “We assume people figure out after five years that they were defaulted. At that point, they want their money out of the 401(k), and they are optimally willing to pay the 10% penalty to get their money out.”

    Scott and his colleagues assessed welfare costs by figuring out how much they have to compensate young workers at that five-year point so that they are OK with having been inappropriately forced to save. Of course, the welfare costs would be lower if they didn’t have to pay the penalty to cash out their 401(k).

    And what about workers who are automatically enrolled in a 401(k)? Are they not creating a savings habit?

    Not necessarily. “The person who is confused and defaulted doesn’t really know it’s happening,” said Scott. “Maybe they’re getting a savings habit. They’re certainly living without the money.” 

    Scott also addressed the notion of giving up free money – the employer match — by not saving for retirement in an employer-sponsored retirement plan. For young workers, he said the match isn’t enough to overcome the cost of, say, five years of below-optimal spending. “If you think it’s for retirement, the match-improved benefit in retirement doesn’t overcome the cost of losing money when you’re poor,” said Scott. “I’m simply noting that if you are not consciously making the choice to save, it is hard to argue you are making a saving habit. You did figure out how to live on less, but in this case, you did not want to, nor do you intend to continue saving.”

    The research raises questions and risks that must be addressed

    There are plenty of questions the research raises. For instance, many experts say it’s a good idea to get in the habit of saving, to pay yourself first. Scott doesn’t disagree. For instance, a person might save to build an emergency fund or a down payment on a house.

    As for the folks who might say you’re losing the power of compounding, Scott had this to say: “I think the power of compounding is challenged when real interest rates are 0%.” Of course, one could earn more than 0% real interest but that would mean taking on additional risk.

    “The principle is about, ‘Should you save when you are relatively poor so you can have more when you are relatively rich?’ The life-cycle model says, ‘No way.’ This is independent of how you invest money between time periods,” Scott said. “For investing, our model does look at riskless interest rates. We argue that investment expected returns and risks are in equilibrium, so the core result is unlikely to change by introducing risky investments. However, it is definitely a limitation of our approach.”

    Scott agreed there are risks to be acknowledged, as well. It’s possible, for instance, that Social Security, because of cuts to benefits, might not replace a low-income worker’s preretirement salary as much as it does now. And it’s possible that a worker might not experience high wage growth. What about people having to buy into the life-cycle model? 

    “You don’t have to buy into all of it,” said Scott. “You have to buy into this notion: You want to save when you’re relatively rich in order to spend when you’re relatively poor.”

    So, isn’t this a big assumption to make about people’s career/pay trajectory?

    “We consider relatively rich wage profiles and relatively poor wage profiles,” said Scott. “Both suggest young people should not save for retirement. I think the vast majority of median wage or higher workers experience a wage increase over their first 20 years of working. However, there is certainly risk in wages. I think you could rightly argue that young people might want to save some as a precaution against unexpected wage declines. However, this would not be saving for retirement.”

    So, should you wait to save for retirement until you’re in your mid-30s? Well, if you subscribe to the life-cycle model, sure, why not? But if you subscribe to conventional wisdom, know that consumption might be lower in your younger years than it needs to be.

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  • 7 Ways to Squeeze More Money Out of Social Security for Life

    7 Ways to Squeeze More Money Out of Social Security for Life

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    The average monthly Social Security retirement benefit is $1,626 as of August 2022, so it’s not going to buy you a luxurious retirement. But those monthly checks can certainly make your golden years more comfortable.

    Deciding when to take Social Security is a complicated piece of retirement planning. Some people opt to start benefits sooner and take smaller checks, while others try to hold out for the biggest check. If you’re in the latter camp, we’ll discuss some strategies for how to maximize your Social Security benefits.

    7 Ways to Maximize Your Social Security Benefits

    We’re going to be honest: There are no easy shortcuts that will get you more Social Security. Any strategy that will boost your benefit boils down to: Work longer. Earn more money. Wait as long as possible.

    One thing we want to make clear, though: Don’t count on Social Security cost-of-living adjustments to make much difference. Benefits increase at a snail’s pace compared to the actual costs of living for older adults. The 2022 Social Security COLA was 5.9%, which may sound generous, but it came at a time of soaring inflation.

    1. Work at least 35 years.

    You typically need the equivalent of 10 years of full-time work to qualify for Social Security. But you’ll get the highest benefit if you stay on the job for at least 35 years.

    Social Security uses your 35 highest-earning years to calculate your benefit.

    If you worked only 32 years, they’d use your 32 years of earnings plus three zeroes to get your 35 years. Working more than 35 years can pay off if you’re making significantly more than you were in your early career because you get to replace some of those low-earning years with higher wages.

    2. Earn more money.

    We get it: If only you could snap your fingers and suddenly make more money. But we’re just explaining the rules here. If you’re able to find a better-paying job or boost your earnings with part-time or freelance work, you’ll get more money out of Social Security.

    There’s a limit, though. Social Security has an earnings cap. Money that you make above that amount isn’t taxed, and it also doesn’t affect your future benefits. In 2022, Social Security taxes only the first $147,000. If you make $200,000 or even $2 million, Social Security will still consider your income $147,000 for the year.

    3. Report all your earnings.

    If you’re a regular W-2 employee, you don’t have to worry about reporting your earnings to Social Security because your employer handles that and also deducts the payroll taxes that fund Social Security and Medicare on your behalf. But if you underreport income you earn from tips, freelancing or self-employment, you’re not just putting yourself at risk of troubles with the IRS. You could reduce the amount of Social Security you get later on.

    4. Wait as long as you can to take benefits.

    If your retirement funds are lacking, delaying Social Security payments for as long as possible is one of the best things you can do. Full retirement age is the age when you qualify for 100% of your benefit. For most workers, it’s between 66 and 67, depending on when you were born.

    You can take benefits as early as age 62. But every year you claim before your full retirement age reduces your benefit by 6.66%. Once you reach full retirement age, you can also wait even longer. You’ll get an extra 8% delayed retirement credit for each year until you hit 70. At that point, delayed retirement credits stop. Waiting until you reach age 70 can result in a monthly benefit that’s 77% higher than if you claimed at 62.

    Pro Tip

    Up to 85% of your Social Security benefits are taxable, depending on your income. Saving in a Roth IRA is a good way to limit your tax bill since distributions won’t count as taxable income.

    5. Avoid taking benefits early if you’re still working.

    If you take Social Security early while you’re still working, your benefits will be reduced by the following amounts in 2022:

    • $1 for every $2 you earn above $19,560 until the year you reach full retirement age.
    • $1 for every $3 you earn above $51,960 the year you reach full retirement age until your birthday.

    Working while claiming Social Security early can seriously reduce your benefit or eliminate it altogether. But once you reach your full retirement age, Social Security will give you credit for the benefits it withheld and recalculate your benefit at a higher amount. That means you could recoup all the money Social Security withheld if you live long enough. When you hit full retirement age, your earnings won’t affect your benefits.

    6. Marry someone who qualifies for a bigger benefit.

    If you don’t qualify for much Social Security based on your own record, you may be eligible for more based on your spouse’s record. You can get up to 50% of your spouse’s full retirement benefit once you reach your full retirement age provided that you’ve been married for at least a year.

    So if your full retirement age is 67 and your spouse’s full benefit is $2,000 a month, you’d qualify for a $1,000 a month spousal benefit if you started at 67. If you took benefits a year early, you’d get $934 a month, because you’d reduce your benefits by 6.66%. You can’t get those delayed retirement credits of 8% per year based on a spouse’s record, though, so you’ll get your maximum benefit at your full retirement age of 66 or 67.

    Divorced? If you’re not remarried, you could claim benefits based on your ex’s record under the above rules, provided that your marriage lasted at least 10 years. (No, you won’t affect their benefits.)

    If your current or ex-spouse dies, you could qualify for 100% of their benefit through survivor benefits, including any delayed retirement credits they earned. However, you can’t earn those 8% credits by waiting past your own full retirement age to claim.

    7. Stop your benefits if you claimed them too soon.

    If you claim your benefits and then regret it, you need to act fast. Social Security lets you withdraw your application if it’s been less than 12 months since you started your benefits. You’ll have to repay everything you received, including taxes and Medicare premiums that were withheld.

    Once you’ve reached your full retirement age, you can suspend your benefits to earn 8% delayed retirement credits. You’ll be able to restart them for a higher amount whenever you want. Social Security will automatically resume your payments once you’re 70.

    Can You Get the Maximum Social Security Benefit?

    Probably not. The maximum Social Security benefit in 2022 is $4,194. But very few people will actually get that amount. To get that much, you’d have to earn the maximum salary for the year ($147,000 in 2022) for 35 years and hold out until 70.

    Most people will have to make do with much less than the maximum benefit. The less you can rely on Social Security, the more comfortable you’ll be. If you’re still working, the best thing you can do is keep socking away as much as you can in a retirement account.

    Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected].


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    robin@thepennyhoarder.com (Robin Hartill, CFP®)

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  • New Survey From Sagewell Financial Reveals One-Third of Senior Women Have Less Than 10K Saved for Retirement, 70% of Seniors Willing to Work During Retirement

    New Survey From Sagewell Financial Reveals One-Third of Senior Women Have Less Than 10K Saved for Retirement, 70% of Seniors Willing to Work During Retirement

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    Data also reveals the significant toll the war in Ukraine, the pandemic, and rampant fraud have had on their retirement certainty

    Press Release
    –

    Jun 21, 2022


    CAMBRIDGE, Mass., June 21, 2022 (Newswire.com)
    –
    A new survey on senior finances shows that 33% of seniors have been victims of financial fraud, and 27% have less than $10K saved for retirement. These and other findings were revealed in The Sagewell Senior Certainty Index produced by Sagewell Financial, the first online banking platform designed specifically for digital seniors. 

    The survey also shined a light on the gender gap in retirement savings, as nearly one-third of women have less than $10K saved for retirement, and more than 60% are concerned they will run out of money. 

    Nearly three-quarters of all seniors were concerned that the war in Ukraine could impact their retirement planning and savings, while only 45% felt the same way about the pandemic. More than seven out of 10 are planning to or willing to work in retirement, and 29% are using or interested in crypto as an investment.

    Other Key Findings

    Digital Seniors Plan To Retire Differently Than Previous Generations

    • 39% plan to retire after 65.
    • 69% plan to or would like to age in place. 
    • 44% said their confidence about sticking to their retirement plan has changed over the past 12 months. 
    • Only 23% were confident they are prepared if Social Security runs out.

    “While the pandemic changed the way Americans work, the Baby Boomers have changed the way they retire,” said Jeffrey Wright, COO and co-founder of Sagewell Financial. “They are planning to retire later, and many are planning to work in some capacity. They’re concerned about Social Security being available to them and if it will be enough to cover their skyrocketing healthcare, housing, and cost of living expenses due to inflation.”

    Paying For Retirement

    • 27% have less than $10K saved for retirement, and 40% have less than $50K.
    • 57% are concerned that they will run out of money.
    • 82% do not feel confident about their access to cash or liquidity in retirement.
    • 73% said they welcome some income smoothing (receiving consistent income in the form of one or two consolidated monthly checks.)

    “It is disheartening to learn that more than a quarter of Baby Boomers have less than $10K saved for retirement — that number jumps to 32% among women,” said Sam Zimmerman, co-founder and CEO of Sagewell. “Nearly 60% of seniors expect to live on less than $3K a month in retirement. We are at a crisis point now, and it will worsen unless we take drastic steps to improve the way our seniors plan for and live in retirement.”

    Gender Inequity

    • 42% of women expect to receive less than $3K monthly in retirement (27% of men).  
    • 15% expect less than $1K (6% of men).
    • 32% have less than $10K saved for retirement (18% of men).
    • 47% have less than $50K saved for retirement (30% of men).
    • 15% have more than $500K saved for retirement (28% of men).

    “The disparities revealed in this survey are striking and clearly show the long-term implications of the four ‘women’s financial gaps,’” Marcia Mantell of Mantell Retirement Consulting, Inc. shares. “Most women on the cusp of retirement have faced a wage gap, mom gap, care gap, and/or widow gap. Each of these gaps results in significantly lower Social Security checks and fewer opportunities to save enough for a secure retirement.”

    The Sagewell Senior Certainty Index

    The Sagewell Senior Certainty Index is an online, random sample survey of 1,004 Americans between 55-67 who are approaching retirement or recently retired. The survey was conducted in May 2022 to gauge how seniors, particularly those who are online (“digital seniors”), view the certainty of their retirement planning in a post-pandemic world. 

    A complete copy of the survey results that include additional findings regarding seniors’ opinions on Social Security, the economy, financial technology, retirement income, planning, and savings can be found here: https://www.sagewellfinancial.com/sagewell-press-and-media/.

    About Sagewell Financial

    Based in Cambridge, Massachusetts, Sagewell is a team of technology and financial services professionals passionate about changing the financial lives of digital seniors in this country. Our team has created new products for some of the world’s biggest banks and insurance companies and even NASA. They’re using that experience to solve one of the most glaring problems of our time — the financial crisis faced every day by nearly 60 million Americans. Learn more at www.sagewellfinancial.com.    

    Media Contact: 
    Elizabeth Yekhtikian for Sagewell Financial
    ey@earnedmediaconsultants.com      

    Source: Sagewell Financial

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  • NCA Financial Planners and CEO Kevin Myeroff Named #3 Best-in-State Independent Wealth Advisor by Forbes

    NCA Financial Planners and CEO Kevin Myeroff Named #3 Best-in-State Independent Wealth Advisor by Forbes

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    NCA is an independent financial planning firm based in Cleveland, OH, that oversees $1.3 billion in client assets.

    Press Release
    –


    updated: Feb 23, 2021


    CLEVELAND, February 23, 2021 (Newswire.com)
    –
    NCA Financial Planners is proud to announce the firm and CEO Kevin Myeroff have been named to the 2021 Forbes Best-in-State Wealth Advisors list for the fourth consecutive year. NCA is an independent financial planning firm based in Cleveland, OH, that oversees $1.3 billion in client assets.

    Forbes evaluated over 32,000 advisors across the nation on industry experience, assets under management, compliance records, and advisors that demonstrate “best practices.” This year’s list spotlights more than 5,224 top advisors across the country, which included 161 for the state of Ohio. Forbes states their research has found: the very best advisors are laser-focused on having a positive impact on their clients’ lives, they want to add meaning, help them live better lives.

    “We are truly humbled to fit this description. We’re proud to be there for our clients and their families. We have the ability to alter our client’s lives, and we value the trust they have in our process and investment philosophy,” says Kevin Myeroff, CPA, CFP® CEO & President of NCA Financial Planners.

    For more information: https://bit.ly/2NuoHYe

    Or contact:

    Laurie Jackson
    Client Services, Marketing Manager
    E: ljackson@ncafinancial.com 
    P: (440) 473-1115
    NCA Financial Planners 
    6095 Parkland Blvd. Suite 210
    Mayfield Heights, OH 44124
    www.ncafinancial.com | F: (440) 473-0186

    Securities offered through Royal Alliance Associates, Inc. (RAA), Member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA. RAA does not provide tax or legal advice. Investment advisory services offered through NCA Financial Planners. P: (440) 473-1115 6095 Parkland Blvd, Suite 210 Mayfield Heights, OH 44124  F: (440) 473-0186. For more information, please visit www.ncafinancial.com

    Source: NCA Financial Planners

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  • Retirement Planning for Small Business Owners

    Retirement Planning for Small Business Owners

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    Press Release
    –


    updated: Oct 13, 2020


    NEW YORK, October 13, 2020 (Newswire.com)
    –
    ​​​​​Well-planned financial goals, whether they’re for the next week or 5 years from now, are integral to a person’s financial growth. These goals are what drive us to make savings plans, budget, and investment strategies in order to reach them. Without a proper plan in place, achieving these goals is nearly impossible. This is especially true when it comes to retirement planning. Zoe Financial understands that a comfortable retirement is one of the top financial goals a person will have in their lifetime.

    Everyone’s retirement plan will differ depending on their financial situation, age, and goals. For instance, retirement planning for small business owners will be much different than employees of big corporations. Since business owners won’t have as much access to traditional retirement accounts, they should familiarize themselves with the different options available. It’s essential to choose the retirement account that’s best for their unique situation.

    What are the different retirement plans available for small business owners?

    Each business owner’s situation is different. To better understand which retirement plan is ideal for each situation, it’s important to consider every option. These are the 5 main retirement plan options for those that are self-employed:

    1. Traditional or Roth IRA

    Individual Retirement Accounts (IRAs) are best for new business owners who don’t plan on saving more than $6,000 a year. In a Traditional IRA, individuals can contribute pre-taxed dollars. The money then grows tax-free and is taxed as income after the age of 59 1/2. Roth IRAs, on the other hand, contain taxed dollars that are able to grow tax-free in the account. They can then be withdrawn tax-free after the age of 59 1/2.

    2. SEP IRA

    Simplified Employee Pension Plans allow business owners to contribute to traditional IRAs (SEP-IRAs) that have been set up for their employees. This type of retirement account is ideal for business owners with few to no employees. An SEP IRA is similar to a traditional Roth IRA, except the owner can make larger contributions; up to 25% of an employees compensation.

    3. SIMPLE IRA

    A Savings Incentive Match Plan for Employees (SIMPLE) plan is beneficial for large business owners who have up to 100 employees. SIMPLE Plan contributions are made to an employees traditional IRA account. Contributions to employee’s SIMPLE IRA accounts are deductible as a business expense.

    4. Defined-Benefit Plan

    A Defined-Benefit Plan is beneficial for self-employed people with high income and no employees. Employee benefits within a Defined-Benefit Plan are calculated by taking into account several factors, such as employment length and salary history.Employees become eligible to withdraw defined-benefit plan funds as a lifetime annuity or in some cases as a lump-sum at an age defined by the plan’s parameters. A business is responsible for managing the plan’s investments, unless they hire an outside wealth manager to take on the task.

    5. Solo 401(k)

    A Solo 401(k) is best for business owners with no employees, not including their spouse. Business owners can contribute to this account both as an employee and an employer, therefore maximizing retirement contributions.

    What is the best retirement plan if you are self-employed?

    All of the accounts listed above can be great options depending on the dynamic of the individual’s business. One of the best options for small business owners is the solo 401(k). This account offers many advantages over other retirement accounts, such as high contribution limits.

    The other advantage is increased flexibility for an account owner regarding when they want to be taxed. Contributions made as an employer will be tax-deductible to the business. The money inside the account will then grow tax-free until it’s withdrawn.  Employee contributions, alternatively, have a different set of rules.  When the business owner makes a contribution as an employee, their taxable income for the year is typically reduced. These contributions can then grow tax-deferred and be taxed as ordinary income when they’re withdrawn during retirement.

    How much can I contribute to my 401(k) if I’m self-employed?

    As stated above, individual 401(k) plans have high contribution limits. This is because it allows individuals to make contributions as employees, as well as employers. As of 2020, contributions made as an employee cannot exceed $19,500 for anyone under 50 years old. Those that are 50 or older can contribute $26,000. Contributions made as an employer, though, allow the business owner to add 25% of their compensation from the business to this account. The yearly limit to this amount is $57,000, or $63,500 for individuals 50 or older.

    Planning for Retirement with Zoe Financial

    A comfortable retirement should be a goal for all business owners, whether you’re just getting started or quickly approaching retirement. Advisors in the Zoe Financial network help their clients build a large enough “nest egg” so  they can save and retire comfortably, in line with their financial goals.

    Zoe Financial helps small business owners plan for retirement by connecting them with top financial advisors. Since every situation is different, Zoe Financial takes the entirety of a business owner’s financial life into account during the matching process. Financial advisors in the Zoe Network are adept at helping clients choose retirement accounts that are ideal for their specific situation.

    About Zoe Financial

    Zoe Financial’s award-winning algorithm enables individuals to discover and connect with highly vetted, top fiduciary advisors in their area. All financial advisors in the Zoe Network are vetted and verified fiduciaries, along with having top credentials, education, and experience. Zoe’s service provides support from start to finish during an individual’s financial advisor search. All consultation calls and interviews with Zoe’s network of advisors are completely free and are offered via video chat or traditional phone call depending on an individual’s preference.

    Contact: press@zoefin.com

    Source: Zoe Financial

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  • Could you live on $16,000 a year? Here’s why you might have to

    Could you live on $16,000 a year? Here’s why you might have to

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    We’re told repeatedly how important it is to save independently for retirement, but a lot of us still aren’t listening.

    An estimated 33% of Americans have no money at all saved for retirement, but an even more frightening statistic is the fact that 30% of those 55 and older are in the same boat. And a big reason so many of us aren’t saving boils down to Social Security.

    In fact, according to the National Academy of Social Insurance, Social Security is the sole source of income for almost 25% of Americans 65 and older.

    But while it’s true that Social Security helps countless seniors stay afloat financially in retirement, there’s a real danger in relying on it too heavily. And if we don’t start taking matters into our own hands, a lot of us will risk coming up short when retirement rolls around.

    Can you live on Social Security alone?

    The problem with banking on Social Security is that your benefits are only designed to replace about 40% of your pre-retirement income. This isn’t just an educated estimate; the Social Security Administration even says so itself.

    Now you may be expecting your living costs to go down once you retire — so much so that you’ll be able to survive on Social Security alone — but in reality, that’s not likely to happen.

    For one thing, you’re going to have a lot more free time on your hands, which means you might wind up spending extra on leisure and entertainment. But more importantly, you’re going to have health care to worry about, and that’s where so many seniors get thrown for a loop.

    According to 2016 data from HealthView Services, a provider of healthcare cost-projection software, the average healthy 65-year-old couple retiring this year can expect to incur $377,000 in medical expenses over the course of retirement.

    Younger couples have it even worse. The average healthy 55-year-old couple today could spend as much as $466,000 on health care expenses throughout retirement, while a 45-year-old couple today in similar health might rack up $592,000 in health care costs. And those are the numbers healthy couples are facing. If your health isn’t great, your expenses could climb even more.

    When you think about it that way, Social Security probably won’t be enough, especially since the average recipient currently receives $1,341 in monthly benefits, or just over $16,000 a year. Even if you and your spouse each receive $16,000 a year in Social Security benefits for a total of $32,000, if you wind up spending $377,000 like the average healthy older couple over the course of a 20-year retirement, that’s $18,850 a year on medical costs alone. Subtract that figure from $32,000, and you’re left with just over $13,000 a year, or roughly $1,100 a month, to cover the rest of your expenses.

    And as much as you can try to keep your living costs down, there’s just no getting around the basics like food, electricity, transportation, and housing. In 2014, the average American spent $934 a month on rent alone. If you’re in a similar boat, that means you’d be left with less than $200 a month to cover the rest of your expenses if you were to rely solely on Social Security. And that’s just not enough.

    Time to start saving

    If $16,000 a year per person in retirement doesn’t sound adequate, then it’s time to start saving independently while you still have a chance. Even with retirement less than a decade away, there’s still time to amass some savings before you stop working for good. Anyone 50 or older can currently contribute up to $24,000 a year to a 401(k) and $6,500 a year to an IRA. If you can’t max out those contributions, do what you can. Saving just $250 a month over the course of 10 years will give you an extra $36,000 in retirement if your investments generate a relatively conservative 4% average annual return.

    If you’re still in your 30s or 40s, you have an even greater opportunity to catch up. Saving $250 a month over the course of 20 years will leave you with $137,000 for retirement, assuming your investments generate an average annual 8% return — a reasonable assumption for younger investors who are able to get more aggressive.

    Now if you’re already in your 60s and have yet to start saving, you might consider postponing retirement and working a few extra years to put some money aside. Though it may not be your ideal solution, some studies have shown that working longer could actually lead to a longer life. Another option? Work part-time in retirement to supplement your Social Security benefits.

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    • Kansas Man Turns $10,000 into $8 Million

    • Shark Tank Just Revealed a Trillion-Dollar Idea

    No matter what you do to generate extra retirement income, don’t make the mistake of depending on Social Security alone to fund your golden years. Social Security can and should play a strong role in your retirement budget, but without another source of income, you risk running out of money at a time when you just might need it the most.

    CNNMoney (New York) First published November 29, 2016: 11:45 AM ET

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  • Discovery Senior Living Commemorates Groundbreaking of New State-of-the-Art Independent Living Community

    Discovery Senior Living Commemorates Groundbreaking of New State-of-the-Art Independent Living Community

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    Press Release
    –


    updated: Aug 22, 2018


    BONITA SPRINGS, Fla., August 22, 2018 (Newswire.com)
    –
    Award-winning senior living developer and manager Discovery Senior Living hosted a groundbreaking event for its new Discovery Village At Naples Independent Living Community located at 8417 Sierra Meadows Boulevard in Naples, Florida.

    The all-inclusive Independent Living community will offer one-, two- and three-bedroom luxury apartment homes and a cutting-edge fitness center with highly specialized equipment designed for seniors. Residents will enjoy esteemed Lifestyle Programs including Sensations gourmet dining, Celebrations activities and events, Dimensions health and fitness, Impressions weekly housekeeping and more. The resort-style community will feature luxurious amenities including a Grand Clubhouse, Legends Club & Bar, Bailey’s Bistro & Ice Cream Parlor, Discovery Zone Media Center with Cognitive Brain Fitness, Discovery Silver Cinema Movie Theater with Digital Surround Sound, Heated Pool and Spa, Professional Beauty Salon & Barber Services and more.

    This groundbreaking signifies a new age in senior living communities. We want to provide first-class amenities, dining and activities where residents can truly celebrate every day while living an active, independent lifestyle. We are excited to see the Discovery Village At Naples Independent Living community progress and look forward to welcoming it to our world-class portfolio.

    Richard Hutchinson, CEO

    Richard Hutchinson, CEO, Discovery Senior Living, remarked: “This groundbreaking signifies a new age in senior living communities. We want to provide first-class amenities, dining and activities where residents can truly celebrate every day while living an active, independent lifestyle. We are excited to see the Discovery Village At Naples Independent Living community progress and look forward to welcoming it to our world-class portfolio.“

    Discovery Village At Naples Independent Living is scheduled to open in the Fall of 2020.

    About Discovery Senior Living
    Founded by Thomas J. Harrison and Richard J. Hutchinson, Discovery Senior Living consists of a family of companies specializing in improving senior living services for America’s aging population. With experience and a reputation that spans more than 25 years, as well as an award-winning team of experts at the helm, Discovery Senior Living develops and manages an array of senior living community brands across Texas, Florida, the South, Mid Atlantic and the Midwestern United States.

    MEDIA CONTACT
    Heidi Miller
    Director of Marketing
    239-908-2921
    hmiller@discoverymgt.com

    Source: Discovery Senior Living

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  • Groundbreaking Changes for Continuing Care Retirement Community Kendal at Lexington

    Groundbreaking Changes for Continuing Care Retirement Community Kendal at Lexington

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    The Kendal Corporation begins a $40M construction project to better serve Lexington community.

    Press Release
    –


    updated: Feb 20, 2018


    LEXINGTON, Virginia, February 20, 2018 (Newswire.com)
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    ​​In the picturesque Shenandoah Valley, a vibrant community of nearly 200 independent senior residents, medical and continuing care providers, and their Lexington, Virginia neighbors gathered Thursday for a highly celebrated groundbreaking ceremony that kicked off a $40M renovation and expansion initiative.

    The project was designed to make life brighter and more homelike for residents, to make facilities friendlier to those who suffer from cognitive decline and to provide a model work environment for Kendal’s highly skilled staff. When it is complete, the Borden Health Center will be the most up-to-date skilled care nursing facility in the region and will continue to provide care to residents and regional neighbors alike. Currently, 80 percent of Borden admissions come from the general community, 40 percent of those are supported by Medicaid.

    We are proud of our long legacy of partnering with, and caring for, both our full-time community residents and our Lexington area neighbors. After the renovations, the residents and staff living and working in the skilled care and assisted living centers will enjoy bright, home-like settings with modern amenities and comforts, and we really want to get the word out that our facility is open to everyone.

    Bob Glidden, Kendal at Lexington Board of Directors Chairman

    “We are proud of our long legacy of partnering with, and caring for, both our full-time community residents and our Lexington area neighbors,” Board Chair Bob Glidden said. “After the renovations, the residents and staff living and working in the skilled care and assisted living centers will enjoy bright, home-like settings with modern amenities and comforts and, our facilities are open to everyone.”

    Additionally, the Webster Assisted Living Center and the Anderson Dining room will both be upgraded to increase Kendal’s legendary neighborhood community feel. The architects have reworked the existing footprint to enhance natural light and remove structural obstacles.

    “In each planned renovation, we carefully considered the needs of our residents and seek to meet and exceed model care practices, even as expectations and opportunities for advancement continue to evolve. We work every day to ensure that Kendal at Lexington is the kind of place we would all choose as our home,” Mina Tepper, Executive Director at Kendal at Lexington said.

    In addition to the care facility upgrades, the phase three Kendal expansion will produce 30 new independent living cottages, increasing the number of residential living opportunities by 25 percent.

    “To see Kendal expand to meet our original vision is truly remarkable,” Dianne Herrick, one of Kendal at Lexington’s original founders and a current full-time resident, said. “There is so much we now know about what it takes to provide a positive aging experience, and Kendal is at the cutting edge, delivering fulfilling experiences to all its residents. I’m just so excited for what comes next.”

    More information: http://kalex.kendal.org/expansion/press

    Media Contact:

    Jennifer Eddy
    202-709-7509 (w) | 540-878-9681 (c)
    j.eddy@eddycommunications.com

    Source: Kendal at Lexington

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  • Market Advisory Group: The Biggest Mistakes Investors Make Before Retiring

    Market Advisory Group: The Biggest Mistakes Investors Make Before Retiring

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    Market Advisory Group founding partner Danny Goolsby discusses important details prior to retiring

    Press Release
    –


    updated: Jan 30, 2018


    WICHITA, Kan., January 30, 2018 (Newswire.com)
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    If decisions about where and what to invest in are keeping you up at night, it’s no wonder: retiring today has gotten more complicated. Our great-grandparents retired with a pension and an amount from Social Security with the confidence that their income needs would be guaranteed. Any earnings their investments made were like icing on the cake.

    Today, pensions have gone the way of the dinosaur, Social Security benefits are under threat and investors are left to figure out things on their own using the money in their retirement and brokerage accounts. Through no fault of their own, we’re seeing people make dire mistakes when it comes to the allocation of these resources. Given today’s longer life expectancies and the volatility of a global market, it’s even more important than ever before that you do the right thing at the right time with the money you’re relying on for retirement.

    Here are the biggest mistakes we see investors making, along with a suggestion about what you can do instead to make sure that you don’t run out of money before you run out of life.

    MISTAKE #1: Not Understanding What You Own

    There are many different ways you can be charged commissions and fees inside of an investment but typically speaking, you pay those fees whether the account earns money or not. Too many investors keep their account statements sealed in a drawer because they’re either too afraid to look or they don’t understand what they’re looking at. Here’s the thing, though: just because you’re not looking at the bad news doesn’t mean it goes away.

    High fees create an unnecessary drag on your returns and may prevent you from reaching your retirement goals. As fiduciaries, we’ve even seen some situations where, after adding up all the fees paid out over a period of years, there were more fees charged than what the consumer earned. Don’t keep your head in the sand. Get a second opinion. Ask a fiduciary professional to walk you through the fees you’re paying on the investments you own and find out if you have better options.

    MISTAKE #2: Not Knowing How Much Risk You’re Exposed To 

    It’s been said that convincing investors to stay in the market is the horsepower that drives the market. The more investors, the more the market grows. It’s easy to make money in the market when the markets are going up, the question is, how much of that money will you get to keep?

    There are several adages — such as buy and hold — that don’t necessarily apply to the investor who is at or near the time of retirement. If you are five or fewer years away from your full retirement age, for example, then you might be in what we call the retirement red zone. This is the time in your life when losing money matters the most; make a fumble now, and it could negatively affect the earning power of your portfolio over the long term. Instead of focusing on risk and growth, protect what you have before it’s gone.

    MISTAKE #3: Not Having a Plan

    A lot of people hear the term “protection” and instantly jump to the conclusion that they won’t earn any returns. This couldn’t be further from the truth. Having a plan in place is the process of coordinating the different aspects of a portfolio — including taxes, Social Security and Medicare decisions — along with your market investments to seek both growth and protection. This is how you can get a cohesive strategy with minimal fees and less risk for maximum returns. 

    If you’ve worked multiple decades to get your nest egg to where it’s at now, then you’ll want to take steps to ensure that what you need for retirement is protected. Protect first, grow second and build a plan around your goals. Do that and you’ll be able to achieve what we want for our all clients: peace of mind.

    Are you paying too much in fees? Worried about your exposure to risk? Ready to get your retirement ducks in a row? Schedule your complimentary consultation by filling out this simple form and one of our advisors will be happy to get back to you. We take this step seriously, as it is crucial that you understand your current situation based on facts, not persuasion or sales pressure. We look forward to helping you avoid these mistakes so that you can enjoy the retirement you deserve.

    Investment advisory services offered through Foundations Investment Advisors LLC, an SEC-registered investment adviser.

    Source: Market Advisory Group

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  • Planning for the Future Is Key in Retirement Years

    Planning for the Future Is Key in Retirement Years

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    Press Release
    –


    updated: Sep 21, 2017


    JENKINTOWN, Pa., September 21, 2017 (Newswire.com)
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    ​​When Dr. David and Barbara Junkin decided that their house was just too big for them now, they began looking at options for a community. They’ve been in their home for 40 years but know that the upkeep is just too much.

    “We are both still very independent and so started looking at options in our area that will give us the feel of a home, but with a health care component for later in life, should we ever need it,” said Dr. Junkin. In particular, the Junkins know they don’t want an apartment at a senior living community; rather, they prefer more of a cottage-style option.

    Life Plan communities do offer independence, where residents can come and go as they please; they’ve just got that extra level of security for health care, and that’s what planning is all about.

    Sarah Jolles, Executive Director of Sales and Marketing

    Presby’s Inspired Life recently announced expansion plans for a variety of cottages on its Rydal Park campus. That seemed like the perfect type of living option for the Junkins, and so they’ve become Priority Members of Rydal Waters. Being Priority Members means that they’re not committed to moving there just yet but are to be among the first to select locations of a cottage when the expansion project gets underway.

    “You could say I’ve always been a planner, and the timing for this is right,” added Dr. Junkin. “We want to be in charge of our own lives and don’t want to burden our children with having to make decisions for us later in life.”

    Recently, the Junkins attended the Rydal Waters Tent Event, where they were able to meet other Priority Members and view the area that will soon be developed into their new home. “It’s such a beautiful campus. As we enjoyed the entertainment and food, it was easy for us to envision life at Rydal Waters, with all of the amenities of Rydal Park included. It’s exactly the type of community we’ve been looking for.”

    Cindy Doyle-Avrigian and her husband Mason are also Priority Members of Rydal Waters. She’s a realtor in the Abington area and believes that it just makes sense at this point in their lives to start exploring options for the future.

    She’s very familiar with Rydal Park, as her parents lived at the community, and was very pleased with the continuum of care available there for them. She said that it’s just the prudent thing for her to investigate for herself and her husband now.

    Doyle-Avrigian noted that there are many options available in the area, but not many with the single-family cottages for the 62-and-over demographic. That’s what she finds appealing about Rydal Waters.

    “It really is an emotional decision to make when thinking about moving,” said Doyle-Avrigian. “However, it’s good to have a plan in place and not wait to make hasty decisions down the line.”

    Sarah Jolles, the executive director of sales & marketing at Presby’s Inspired Life, said that Rydal Waters is being developed for those who still want the feel of a single-family-type home, yet the security of knowing they’ve got a plan in place for future health care, if ever needed.

    “The lifestyle Rydal Waters will offer is one of complete independence, with access to the services and amenities that makes retirement living so desirable,” said Jolles. “This expansion project will include a clubhouse with a fitness center, multipurpose space with fireplace and audio/visual capabilities, prep kitchen, cocktail lounge, outdoor heated swimming pool, fire pit, outdoor grilling area and much more.”

    Jolles believes it is important for those in the 55+ demographic to begin exploring options early for where they’ll want to live in the future.

    “For some individuals, they may decide that living in their home is best, but when it comes down to it, really thinking about the future also includes the possibility of health care needs,” added Jolles. “Life Plan communities do offer independence, where residents can come and go as they please; they’ve just got that extra level of security for health care, and that’s what planning is all about.”

    Construction of Rydal Waters will begin once 70 percent of the residences are pre-sold.

    For more information, visit RydalWaters.org or call (215) 814-0338. 

    ABOUT PRESBY’S INSPIRED LIFE: Presby’s Inspired Life is a not-for-profit, faith-based organization that provides continuing care and Affordable Housing for more than 3,000 people 62 and better, across more than 30 communities throughout greater Philadelphia. www.PresbysInspiredLife.org ​

    ABOUT RYDAL PARK: Rydal Park is a Presby’s Inspired Life community located on a scenic 20-acre campus in Abington Township, Montgomery County. Rydal Park is a full Life Plan Community for people 62 and better. The community boasts 307 independent living apartment homes across four contiguous buildings. The community also offers personal care, skilled nursing and rehabilitative care. Known for its exceptional location and amenities, Rydal Park has become synonymous with healthy, elegant, quality retirement living. In total, Rydal Park offers 509 accommodations. www.RydalPark.org and www.RydalWaters.org

    Source: Presby’s Inspired Life

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