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Medicare and Retirement

1-minute video: 5 Important Medicare Facts for Pre Retirees

 

Medicare and your Retirement.

Large medical bills is one of the greatest threats to financial security especially in retirement. Fortunately, most Americans qualify for some type of insurance. Here, we cover a few points about Medicare for those 65-years or older.

Medicare is govern run program to help seniors cover medical expense after age 65 and has several important and related parts, Parts A, B, C, and D. To be on Medicare you must enroll or you may be subject to stiff rate increases.

Part A Is free and is a form of hospital insurance. Part B covers outpatient care doctor’s visits, and preventative care. This has a premium that is adjusted with income. Part C covers areas of Parts A or B, but by a private insurer. There is a deductible and then a shared cost above the deductible. Prescription drugs cost are offset in Part D. Part D has income related premiums.

Several insurance companies offer plans that cover the cost gaps not covered by Medicare and it various parts.

One crucial fact is that Medicare does not cover lengthy stays for long-term care (LTC) costs. These cost can be very high, are likely to occur, and a prolonged stay in a nursing home facility can readily devastate a retirement.

This is a tricky area which requires expertise, time, and effort to figure out what meets your needs.

 

 

This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products and FAClient articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

 

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Social Security and Retirement Planning

1-minute video: How Can Social Security and Retirement Planning Work Together for Your Benefit?

 

Social Security and Retirement Planning

Social Security retirement benefits have been around for decades. Mistakenly, many have thought it would cover their costs in retirement. Sadly, this is highly unlikely, but it does not mean to ignore the potential benefits.

For most people, the normal social security age is greater than sixty-six years of age. This is age has been creeping upward from sixty-five for years in an attempt to keep the system solvent. Unfortunately, this age adjusting will not be enough, so there will be changes in the future on the benefits or the timing of those benefits.

For many, the current payout is a substantial part of their retirement income plan. Everyone needs to figure-out how they will pay for the difference between the cost of retirement and the shortfall of social security.

One variable is to delay retirement. This has the advantage of delaying the depletion of your asset “nest-egg.” It may also keep you on a medical plan one extra year. If you simultaneously delay retirement and drawing Social Security Benefits, the government actually raises the amount they pay to you by more than 7% each year you delay until age 70.

Drawing social security benefits early is rarely a good idea. First, the payout is lower – forever lower. Second, if you are still working, your benefits might be reduced depending upon how much you make. The more you make at a job, the less Social Security will pay out until you quit working or reach your normal retirement age.

Depending upon your marital status and income level, social security can be tax exempt or nearly fully subject to income tax. It is something to consider.

Social Security retirement benefits are here today and an integral part of millions of American’s retirement plan. However, it will change, and unlikely for the better, so make plans to self-support you retirement in a greater way than former generations.

 

This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

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When is the Worst Time to Retire

Minute video: Do not let timing ruin your retirement.

 

When is the worst time to retire.

Many people seek the optimal time to retire. Unfortunately, there is also a terrible time to retire.

Here we will cover a few factors to consider when deciding to retire to avoid the “worst” time to retire.

First, if you retire and you will not have medical coverage, this is a clue that it is not the time to retire. This is a huge risk. Without insurance, you are one accident away from insolvency or a severely underwhelming retirement. And if you retire and do get insurance on the open market, you may find the cost essentially unaffordable and cause a catastrophic meltdown of your assets.

Second, you have no real source of income to meet your critical needs. As mentioned in an earlier blog, Social Security retirements are unlikely to be enough. If that is the case, where is the rest coming from? It is incredibly surprising how fast a “nest-egg” can be depleted.

Investment returns go sour. Investments that can vary in value are subject to the risk that they will perform badly at the wrong time. So, while your investment nest egg loses value, you will compound the loss by drawing living expenses. This a double whammy from which your portfolio may never recover.

Imagine retiring in January 2000. Within 10 years the account could easily be down 50% in an all equity portfolio - and that does not include any withdraws along the way. If in your estimates you barely had enough to retire in 2000, then you surely are sunk in this scenario. So, the time to think twice about retirement is when the market is high.  Or if you elect to retire, make sure you planned on a low rate of return.

 

This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

 

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When is the Best time to Retire

1-minute video: When is the best time to retire?

 

When is the best time to retire?

The answer to this question is incredibly complex. Here we touch upon a few of the key issues.

One issue is how much and when will you spend in retirement. On the surface this may be a simple calculation, but when you factor in taxes, inflation, lifestyle choices, and potential health issues, it becomes less clear.

Another is issues is from where will you get the income to cover the expenses. If you have a pension, these figures may be fairly easily to calculated. Typically, pensions will not cover all of your needs especially later in life. So, you need to calculate how much you can expect your investments to generate in income whether in interest, dividends, or due to the sale of an assets. This is where this issue gets complicate since no knows just how well an investment will perform.

Mentioned above is health care cost. This is a growing issue as more Americans are living longer than before. Depending upon your current age, your life expectancy may exceed thirty years from the time you retire. That may mean you might work fewer years than you are retired. And many of you who are readying this article may live a decade beyond your life expectancy. Retiring too early can be a huge, irrecoverable risk.

Lifestyle issues can alter when you retire. Some people can simplify their lives by downsizing and abandoning the trappings of modern living. Others may want to enjoy the remaining active years they have. Either path will influence when you can retire.

Simply put, the decision to retire is one of the most complex, stress creating decisions you may ever make. There are the objective issues and the subjective issue that impinge on your choice. Make a good one.

 

This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

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Simple Method to Better Investment Results

1-minute video: How Dollar Cost Averaging Can Help You Make Smart Investments?

 

Simple Method to Better Investment Results

When investing in mutual funds or stocks, there are many issues to consider. Here we describe a simple method to boost long-term investment results with mutual funds that a novice or an expert investor in Columbia or Jefferson City, Missouri can use.

The fancy name for the method is Dollar-cost averaging and here is how it works. The investor contributes the same amount to their investment portfolio at regular intervals: weekly, monthly, quarterly, etc. This is a very common practice with a retirement account such as a 401(k), but can be done manually with an account not part of a 401(k). When the contributions are made, purchases of funds are made regardless of the price. As you might expect, as the price of the fund drops, it actually buys more share of the fund. As the price goes higher, the constant dollar contribution buys fewer shares. In this way, the simple process is following the old adage, “buy low, sell high” in that you are buying the most number of shares with your contribution at lower prices and fewer shares when the price is high. The investor is not actually selling shares in this method, but is not buying as many shares at high prices. As the market bounces up and down, the investor will accumulate more shares at cheaper prices to later be sold in retirement. When retirement arrives you will have a larger number of shares which translates into more wealth depending upon the price at retirement. It is a simple, automatic process for increasing the chance of buy when prices are low and fewer shares when prices are high.

 

This video and text is for information use only and is based on information believed to be true. Much of the information is readily available, but some is drawn from Advisor Products articles. The reader acts on these ideas at their discretion and should consider consulting an accountant, financial advisor, or attorney. No promise is made that an idea or concept is appropriate or would work well for the reader. This is not an offer to provide legal advice or act as an attorney. Contact Steven Erickson JD, MBA, CFP(R), Accredited Wealth Management Advisor, Chartered Retirement Planning Consultant at 573-874-3888 This email address is being protected from spambots. You need JavaScript enabled to view it. , if you have questions or to set an appointment. Serving Clients in Columbia, Jefferson City, and the surrounding counties.

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