Category: Medicare Workshop

Why You Should Consider Working In Retirement

Why You Should Consider Working In Retirement

(Even If You Don’t Need the Money)

Work? Retirement? The two words don’t even sound like they belong in the same sentence. After all, retirement is for relaxation. Retirement is for grandkids. Retirement is for vacations and bucketlisting.

 

But wait just a minute.

 

Although all of those things are true, studies show that regular work is also on the agenda, nestled in-between the couch sitting as well as babysitting. According to a Merill Lynch Retirement Study, 72% of pre-retirees age 50 and up will work in some capacity during their retirement.

 

This raises the question: Why are so many soon-to-be retirees planning to spend time working, the same thing they’ve likely been doing for the last 40 years?

 

It’s Not All About the Dollar Signs

As it turns out, there are a lot of reasons, and not all of them are financially related. Participants of the Merrill Lynch Study reported working in order to

  • Stay mentally active
  • Stay socially connected
  • Maintain a sense of identity and self worth

…as well as many other valid reasons. Surprisingly, staying mentally active was the number one cited reason. Money was still a consideration, especially considering that many retirees have not saved enough for a 20-year-or-more retirement, but those other motives definitely pulled their weight in the statistics.

 

And, fortunately, these desires were not left unfulfilled. The study also indicated that retirees who are working in retirement get out what they put in. As it turns out, working retirees reported feeling 10% prouder, 17% more connected to others, and 17% more stimulated than their non-working counterparts! It seems the sense of accomplishment, social interactions, and work environment provided a sense of overall well-being.

 

The Bottom Line

The point is today’s retirees and pre-retirees refuse to see retirement as the end. They are, instead, viewing it as a new horizon, a new beginning, a springboard instead of a landing pad. According to the study, many do take a 2.5 year break from work after retiring, but they are using that rest to recharge rather than wind down.

 

From working with my clients, I’ve heard some of their ideas for work. One client of mine does woodworking projects for people. Others give private music lessons. I even know a couple that travels down the east coast, selling kettle corn at local festivals during the summer. I remember them telling me all about the fun of traveling from year to year and the relationships they’ve built with some of the locals. Doesn’t that sound like fun?

 

You see, work and retirement only sound like they don’t belong in the same sentence if you consider work to be stressful or boring. However, if you can make money doing what you like, working will turn into a passion rather than a drag. In fact, you just might find that work and retirement is a match made in heaven.

 

Do You Have Retirement Questions?

Deciding whether or not to work is just one of many decisions you will have to make as you transition to retirement. Luckily, our Life After Work series of workshops seeks to cover the three critical areas of a successful retirement transition: Medicare, Social Security, and 401(k) planning. You can sign up for just one or all three. No high-pressure sales pitches here, just in-depth discussion about what you need to know as you approach retirement.   Our Welcome to Medicare workshop is Thursday, June 25, beginning at 5:30 on Zoom.  Call our office at 937-492-8800 or head on over to our web page and sign up for a free workshop today!

Will I Be Able to Afford Medicare?

Will I Be Able to Afford Medicare?

The shortest and most honest answer is “I don’t know”. But I know this doesn’t help you answer the most pressing questions weighing on your mind as you approach retirement age. Am I ready? Or Should I delay my retirement? And most of all—how am I going to afford health care without my employer insurance?

 

So here’s what I am going to do. Using my 20+ years of experience working with retirees, I am going to lay out a framework for what to expect when it comes to Medicare expenses. These will just be “in-the-ballpark” figures, but I believe they will help you come to a decision. You just might find that Medicare falls squarely into your budget.

 

So let’s get started with some good news.

 

Medicare Part A (Inpatient Care) Is Free

As long as you’ve paid into Social Security for at least 10 years, social security will return the favor with no associated Part A premium.

 

The Associated Part B (Outpatient Care) Monthly Premium is $134.00

This figure is adjusted for high income, but most people don’t fall into the high-income category. $144.60 will be your monthly premium unless you make $87,000 per year or more as an individual or $174,000 filing jointly.

 

From this point, the cost of Medicare is heavily affected by which path you take. You can boil down all the madness into two basic choices: Medicare Advantage or Original (traditional) Medicare.

 

The Traditional Medicare Route

If you choose the Traditional Medicare route, you will want Medicare Supplement Insurance to fill in the gaps of what Medicare doesn’t cover. Otherwise, there will be no limit to your out-of-pocket spending. The premiums for a Medicare Supplement range from $45-146 per month. However, we often recommend a plan G, which typically costs $110 per month. This is a fairly standard premium. It puts into perspective what you can expect a Medicare Supplement Plan to cost.

 

To cover your medications, you will also need a Part D prescription drug plan, which will cost in additional premium anywhere between $14 to $128 monthly. The average cost for a drug plan is $42 in 2020. The out-of-pocket costs associated with Part D vary greatly depending on your medications. It is impossible to estimate without knowing your specific situation.

 

The Medicare Advantage Route

Offered as an alternative to Traditional Medicare, Medicare Advantage is often the cheaper option when it comes to premiums. They are offered for prices within the range of $0-163 monthly with the average premium being approximately $23 per month. The Part D prescription drug plan is almost always rolled into the plan.

 

Caution: Check For Possible Out-of-pocket Costs

At first glance, it looks like the Medicare Advantage route is the obvious choice. But this fails to take into account the risk of out-of-pocket costs. With a Medicare Supplement (only available with Original Medicare), the maximum out-of-pocket (for Medicare approved expenses) is only $198 annually for Plan G. However, in an advantage plan, it is more of a pay-as-you-go approach. There are less monthly premiums; but copays, coinsurance, and deductibles are much higher. The potential out-of-pocket for an advantage plan can be as a high as $3500-6000 per year or more!

 

The Costs At a Glance


So there you have it! This should give you a good idea of what Medicare costs for the average 65-year old. But—as I said before—the cost of Medicare is different for every person. If you are still concerned about being able to afford Medicare, contact us for a free consultation. We will assess your financial and health situation to find an overall plan that meets your needs, concerns, and pocketbook. Ensuring you a successful and secure transition into retirement is our number one priority.

 

There are a lot circumstances that may prevent you from retiring. But I believe that the affordability of health insurance shouldn’t be one.

 

Disclaimer: Numbers are based on Ohio 45365.

 

Turning 65 soon and not sure what to do?  Our next workshop is quickly approaching on June 25.  Click here to sign up for our free Medicare workshop. No high-pressure sales pitches here, just in-depth discussion about the ins and outs of Medicare!

Top 5 Retirement Myths You Probably Believe

Top 5 Retirement Myths You Probably Believe

We only use ten percent of our brains. Napoleon was short. It takes seven years to digest a piece of gum.

 

Myths like these are pervasive and stubborn. Perhaps you are just now realizing the above statements are even myths at all! Regardless, whether you first heard them on an evening sitcom, around the dinner table, or as a warning before your mom gave you a stick of juicy fruit when you were a kid, they were easy to pick up and difficult to get rid of.

 

But unlike these common household myths, which are basically harmless, widely held false beliefs about retirement can lead to unexpected bills, sore disappointments, or missed opportunities.

 

That is why I’ve compiled some of the more common and destructive retirement myths, so you can let them go and grab ahold of a better, more secure retirement.

 

  1. “Health Insurance in Retirement? Won’t Medicare Take Care of All That?”

This is a big one. Many people think that, just because the government provides Medicare for those 65 and over, the program is designed to meet all of their healthcare needs. This is, unfortunately, not the case. In truth, it’s not even close.

 

You see, Medicare has very costly gaps, ranging from small, pesky copays to potentially devastating out-of-pocket spending. Firstly, Medicare simply doesn’t cover vision, hearing, dental, or long-term care. And then—in other areas such as skilled nursing, hospital stays, medications, and much more—the coverage is limited. These gaps will not always be overly expensive, but—since there is no out-of-pocket spending limit with Medicare—one major health crisis can quickly turn into a financial crisis as well.

 

That is why we recommend talking to an advisor about getting a Medicare Supplement Plan to fill in those gaps or, if that is too expensive, a Medicare Advantage Plan that will put a cap on your potential out-of-pocket spending.

 

  1. “Social Security Will Take Care of Most of My Income, Right?”

Although Social Security isn’t going broke and skipping out on promised benefits like some believe, the program is not (and was never) designed to provide anyone’s full retirement income.

 

In fact, according to Social Security’s website, the government program is only designed to replace about 40% of a person’s pre-retirement income. As a general rule of thumb, many financial advisors predict that retirees will need 70-80% of their pre-retirement income to live comfortably That leaves 30-40% up to your nest egg. Can your nest egg handle it? 

 

 

  1. “Work? Retirement? Those Two Words Don’t Belong in the Same Sentence.”

People are living longer, and living longer means having more time on your hands. When people only lived ten or so years after age 65, it made sense to think of retirement as a time to wind down and call it quits. But now that the average life expectancy is approximately 85 years, continuing to work (at least part time) makes a lot of sense.

 

According to a Merrill Lynch Retirement Study, 72% of pre-retirees 50 and older say that they plan to work at some point in their retirement. Additionally, the same study showed that 47% of current retirees have worked or plan to work sometime in retirement.

 

  1. “Starting a New Career is For Young People, Not Retirees.”

But perhaps you don’t want to go back to the stress of your former career. Or maybe you the whole reason you retired is because you weren’t physically capable of performing the backbreaking labor.

 

Well, in that case, why not bust another myth and start afresh? Why not take a hobby or a lifelong aspiration and make a new career out of it?

 

I think Christian writer and thinker, C.S. Lewis, said it best: “You’re never too old to set a new goal or dream a new dream.”

 

And, according the aforementioned Merrill Lynch Retirement Study, many agree. In fact, nearly three-fifths (58%) of working retirees believe retirement is a good time to switch careers. So dream big. There’s more room to take career risks when you have a nest egg to lean on.

 

Maybe you can even start your own business. Did you know that retirees are three times more likely to be business owners or self-employed than pre-retirees?

 

  1. “Retirement Consists of Two Steps: Clock Out and Walk Out.”

Unfortunately, that’s just how you quit working. It’s not how you truly retire. Retirement involves careful planning and a long list of to-dos. This list must include signing up for Medicare, purchasing supplemental coverage, deciding when and how to take Social Security, considering rolling over your 401(k), as well as other non-financial items such as travel plans or simply deciding how you are going to use your extra 40 plus hours a week.

 

Do You Need Some Expert Guidance Concerning Your Retirement Transition?

In that case, you are in the right place. In our Life After Work workshops, we discuss retirement transition.  Sign up today for our free workshop.

 

Our Workshop Promise To You

  1. There will be no high-pressure sales and no obligations, just insight about your retirement transition.
  2. You will feel less overwhelmed and anxious about your decisions and options.

 

Some may not think we will live up to our promises, but that is just another common retirement myth! Our next workshop will be held virtually on Zoom on June 25 at 5:30 pm.  We hope you will come to learn more.  The workshop is free!  Sign up today at https://seniormark.com/workshops/!

 

Aren’t All Medicare Supplements the Same?

Aren’t All Medicare Supplements the Same?

Yes.

Well…no.

Well— it’s at this point that I realize cut and dry answers don’t get along very well with Medicare. Or the federal government. Or really anything related to government for that matter.  And I am forced to give you the incredibly vague answer that sometimes isn’t an answer at all: yes and no. Allow me to expound.

 

Yes, they are all the same because…

 

Medicare Supplements Are Now Standardized.

Starting in 1992, the federal government came out with 11 plans labeled A through L, each with their own distinct coverage level and associated benefits. These 11 plans are identical no matter where you purchase them, which means that Plan F is still Plan F (offering the same coverage) whether you buy from AARP or Aetna or any other company.

 

However, just because the plans are standardized, that does NOT mean the prices are!

 

Which brings me to the inevitable…

No, they aren’t all the same because…

 

Prices Can Vary Dramatically—

As much as $100 a month.

And for the exact same benefits! Here’s an example. Let’s say you are a 65-year-old male from Sidney, Ohio who doesn’t use tobacco. If you purchased Plan F Supplement insurance from Banker’s Fidelity Life, it would cost $152.06 a month. However, if you purchased Plan F from Physicians Mutual Insurance, you would pay $294.33 a month. This is like having the option of identical minivans. Same make and model. Same gas mileage. Same features. Except one is almost twice as much. The choice is a no-brainer, right?  (Prices are current as of November, 2017).

 

 Now it’s time for something definite:

 

You should ALWAYS go to a trusted Independent Advisor (see my blog for reasons why here) for help.

 

They will get you into a plan that is right for you. Since they are independent, they are free to shop with a lot of companies to find the plan with the best benefits for the lowest cost.

 

Ahhh…the best value.

Now that is cut and dry.

 

Still have questions?  Sign up for our next workshop here:  workshop signup.

 

If you need help shopping for a Medicare Supplement plan, call us at 937-492-8800  for a free consultation!