Monthly Archives: October 2014

7 Facts to Absorb Before Enrolling in Medicare

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No matter where you are in life, the one event that you share with every other American is the obligation to enroll in Medicare. As mundane as that may sound on the surface, it is vital that you understand how the provisions and restrictions will impact your financial future. Without getting too technical, here are seven facts about Medicare that will help you plan for your future enrollment.

1. Age Matters: The age at which you need to apply for Medicare is 65, and you are allowed to enroll anywhere from three months prior to your birth month to three months following your birth month. That gives you seven full months to secure coverage, after which you can expect a penalty for failure to comply. And yes, you still have to sign up even if you are employed.
2. Existing Insurance: If you work full-time and your employer provides you with insurance, then that may become your primary insurance as long as your employer meets certain requirements. Medicare may serve as a secondary insurance to cover some or all of what the employer plan does not.
3. Supplemental Plans: Even if you have Medicare coverage, you may still need supplemental or replacement plans to pay for whatever Medicare does not pick up. (Note: These plans may only pay for services that Medicare approves.)
4. Income Parameters: If your household income exceeds $170K, then you may pay a higher premium for Medicare insurance.
5. Out-of-Pocket Expenses: Routine vision, dental, and hearing exams are typically not covered under Medicare or supplemental plans, so you will need to factor these costs into your budget.
6. Doctors and Prescriptions: Before you enroll in Medicare, it is important that you verify your providers will accept Medicare and that any prescription drugs you need are covered. You should also confirm that the supplemental insurance covers you if you become ill while traveling.
7. Premium Hikes: The Medicare Trust Fund is already experiencing a deficit, so we expect the baseline premiums on Medicare may increase.

This list certainly is not comprehensive, nor does it disclose all of the specifics of Medicare health coverage for those 65 and older. However, it does provide an overall view of what to expect so that you can start thinking about and preparing your finances for this transition.

Do you have questions about Medicare and its impact on your future? Contact Guidant Wealth Advisors so that we can review your plan.

How will medical technology affect long-term care costs?

Medical Technology - Long Term Care Effects

A walking cane that prevents a fall. A wheelchair that detects a potential accident. A hospital bed that alerts medical staff to an emergency before it even happens.

Yes, folks, this is a glimpse into the not-so-distant future of aging. As medical technology evolves before our very eyes, we can’t help but wonder how these advancements will impact the cost of long-term care.

Will we pay more money in our later years as these smart devices help us stay safer in our surroundings?

While there is no way to answer that question, what we do know is that the cost of long-term care is rising. According to a MetLife survey, the average annual cost for a private room in a U.S. nursing home in 2012 was more than $90,000. In 2002, the same accommodations would run a patient $66,000 per year.

As people continue to live longer than previous generations, we can only anticipate that long-term care costs will escalate in accordance. However, if the medical devices we described above become a mainstream component of health care, then we may see the costs associated with long-term care shift from a dependence on expensive medical care to the technology that can prevent them in the first place.

Life Insurance or Disability Insurance: Which One Do You Need?

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Most of us have grown up with the notion that life insurance is a must, especially as we go through the big milestones in our lives: marriage, children, and retirement. If something happens to us, we want our loved ones to be able to cover our expenses as well as maintain a certain lifestyle.

But what if the “something” that happens to us, isn’t a life-threatening or life-ending situation? What if we sustain an injury that allows us to keep on living, but without the ability to work or do the things we used to be able to do? How will we cover the costs we are responsible for, if we become disabled?

Unfortunately, these are the circumstances that life insurance does not cover, and research suggests that just over 1 in 4 of today’s 20-year-olds will become disabled before they retire. (U.S. Social Security Administration, Fact Sheet February 7, 2013)

Naturally, now we need an insurance that covers us in situations that are the most likely to happen and, consequently, impact our lives and families.

Enter disability insurance.

With disability insurance, you can get help with paying your mortgage, utility bills, car payments or other bills, even if you are no longer able to work. You can get help with the needs of your family and may even be able to save for retirement.

That isn’t to say that life insurance is less important than disability insurance, but you may want to consider which plan is most important right now and if you need both at this point in your life.

To figure out where disability and life insurance fits in your financial future, talk to a Certified Financial Planner (CFP®) who can guide you toward a decision that is in your best interest.