Baby Boomers represent our largest most talked about generation and have now reached “retirement age”. Roughly 10,000 Baby Boomers will turn 65 today and about 10,000 tomorrow and so on, every day for the next 19 years! In 2015 approximately 44 million people in the US will be 65 or older and by 2050 that number is expected to double, also consider that this generation will live longer than any other generation. With new technology, advances in medicine and increased health awareness we are living longer healthier lives. This is great news right? Yes! We have more time to enjoy retirement after working for so many years, spend time with the family like we planned, finally catch up with old friends and let’s not forget traveling….for the next 30 years!
With retirement lasting so long and the expense of those “medical advances” it is critical that you make decisions with regards to Medicare and Social Security with the utmost care. Independently of each other these two systems play a vital role in most retirement budgets, together their importance is compounded.
Let’s look Medicare for a moment, as health care costs are one of the most significant expenses during retirement and are expected to increase. Medicare is a federal health insurance program for people that are 65 and older, certain younger people with disabilities, and some people with end-stage renal disease. Today, there are approximately 54 million people enrolled in Medicare and increasing by approximately 10,000 a day.
Medicare can be broken down into 4 parts, each covering specific services.
Helps pay for hospital stays, some skilled nursing, hospice and some home health care. This coverage is paid through payroll taxes and you must work 10 years or 40 quarters to qualify for this coverage or pay premiums.
Helps pay for physician’s services, outpatient care and surgery, medical supplies and preventative services. This coverage is often necessary before a supplement or Advantage plan can be purchased and there is a monthly premium. In 2015 the premium was $104.90 for most people. People that have higher incomes could have a higher premium.
Part C (Medicare Advantage)
This is private insurance that replaces Part A and Part B and must offer at least as good if not better benefits than Original Medicare. Often times it will include your drug coverage as well.
Helps cover prescription drugs and after January 2006 if you do not have Part D from initial enrollment you will pay a “late enrollment” penalty if you decide to get it later.
Medicare doesn’t pay for everything. You will face three types of costs while on Medicare.
- Cost sharing for covered services (Deductibles and cost sharing on Parts A, B and D).
- Costs for non-covered services
- Premiums for Medicare and any supplemental insurance
***** If you have been working, are over 65 and have been on an employer sponsored plan, you must retain your letter of credible coverage showing that you have had uninterrupted coverage. This is extremely important and can not only hold up your Part B but may cause penalties.
Hanson Financial Group has extensive knowledge in the Medicare supplement and Medicare Advantage markets and is contracted with many of the carriers in North Carolina. Please reach out to us to go into a more in depth conversation about your Medicare options and what the right fit for you might be.
If you would like more information on your own, Medicare information can be found at www.medicare.gov
Medicare + Social Security
With pensions disappearing, markets unpredictable and interest rates so low, Social Security is more critical than ever for providing you that lifetime income stream. How and when you elect Social Security will impact the rest of your assets as well as your monthly income. With 729 Social Security strategies just for married couples, finding the right combination that is unique to your particular set circumstance is absolutely essential. Most people don’t realize how important this one-time decision is and how much money is often left on the table and how it impacts their income for the rest of their life.
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