Blog - Leonard Financial Solutions

Retirement Planning: 3 Things Everyone Should Do

10/30/2020

Retirement means something different for everyone. Maybe your dream is to retire on the beach, travel the world or spend more time with family. Whatever your passion is, you’ll need a nest egg and ways to protect it. Your savings will allow for fun things like dinners out and vacations, but you’ll also need this money to fall back on for healthcare, property taxes and other essentials.

Being proactive pays off when it comes to retirement planning in NJ! Here are three steps you can take to ensure you are financially ready to retire.

1. Determine When to Collect Social Security

Most people can start collecting Social Security once they turn 62, but this isn’t necessarily the best option. If you collect Social Security before your full retirement age, you’ll only get a portion of your benefits. If you can wait until your full retirement age (around 66 years), it’s probably best. This way, you’ll get 100% of your benefits.

Of course, we realize that not everyone can wait that long to claim their benefits, nor is that the right decision for everyone. There are many factors that play into this, so it’s helpful to sit down with a financial advisor in NJ who can help you determine what’s best. The Social Security Administration website also has a handy calculator you can use.

2. Know What Health Coverage You Need

It’s likely that your health insurance will change when you retire. Medical bills can add up quickly, so make sure that you have the right coverage at the right time. Missing important deadlines can leave you without insurance for an extended period of time.

Most people are automatically enrolled in Medicare when they turn 65 and get Social Security benefits. But in addition to Medicare, you may also want to consider supplemental insurance in NJ. Medicare supplemental insurance is private insurance that will help pay some of your remaining healthcare costs like coinsurance, copayments and deductibles.

Other options worth looking into are being added onto your spouse’s policy, participating in your employer’s retiree plan or obtaining temporary coverage through COBRA.

3. Decide Who’s Going to Manage Your Finances

When you leave your job, you’ll have several options for your 401K plan. For instance, you can leave your money in the account or roll it into an individual retirement plan (IRA). You won’t be taxed for moving your money over to an IRA and you may be able to grow your savings because you have more control for diversifying your investments.

In addition to your retirement account, you should also think about the funds in your Health Savings Account (HSA). You can use some of these funds to pay for your healthcare needs. Because this can be confusing, it’s best to work with a financial advisor in New Jersey who can gain a holistic picture of your retirement accounts and how to maximize them.

Leonard Financial Solutions is here to help you navigate your retirement planning! Contact us today for an appointment and let’s get the ball rolling on a robust wealth management strategy that will allow you to retire with confidence!

Original Medicare vs Medicare Advantage: What's the Best Option?

10/19/2020

When you enroll in Medicare for the first time, you can choose how you get your coverage. The two main ways are through Original Medicare or Medicare Advantage. The plan you choose will affect how much coverage you get, the doctors you can see and the quality of care you receive. This is why it’s such an important decision!

The good news is that you can make changes to your plan during fall open enrollment if you’re unhappy with your coverage. To help you navigate through Medicare quotes in NJ, let’s break down the two different coverage options and what to expect from each one.

Original Medicare vs Medicare Advantage: What’s the Best Option?

Original Medicare:

- Original Medicare includes Medicare Part A (hospital insurance) and Part B (medical insurance). If you want prescription drug coverage, you can add a Part D plan.

- You can choose any doctor or hospital that accepts Medicare.

- To help with your out-of-pocket costs, you can purchase Medigap supplement insurance.

Medicare Advantage:

- Medicare Advantage (also known as Part C) is an all-in-one alternative to Original Medicare, combining Part A, Part B and Part D.

- Advantage plans typically have lower out-of-pocket costs.

- You can only use doctor’s who are in your plan’s network.

- Most plans offer extra benefits that are not included with Original Medicare like vision, hearing and dental.

Is One Better than the Other?

There is no one-size-fits-all solution when it comes to Medicare. The best approach is to meet with a financial advisor in New Jersey who is knowledgeable in Medicare and Medigap plans. They can go over your options and help you determine the best fit for your needs, health status and budget. That said, here are some key points to consider.

- Doctor and hospital choice. Original Medicare allows you to go to any hospital or doctor that accepts Medicare. Medicare Advantage requires you to use doctors in your plan’s network and may ask for referrals to see a specialist.

- Cost. Out-of-pocket costs are usually lower with Medicare Advantage but you have a yearly limit on what you pay. You also can’t buy or use separate supplemental coverage. Original Medicare usually requires you to pay 20% after you meet your deductible. There’s no yearly limit and supplemental plans are allowed.

-Coverage. Original Medicare covers most medical necessities and supplies. You can also join Part D for prescription medications. Medicare Advantage includes prescription drug coverage, as well as extra benefits like vision, hearing and dental.

- Travel. If you travel outside the U.S., Original Medicare probably won’t cover your care. However, Medigap plans may. Medicare Advantage plans also won’t cover international healthcare expenses.

Looking to apply for Medicare in New Jersey? Contact Leonard Financial Solutions for a detailed look at your individual healthcare needs. Many clients find that they can get the best and most comprehensive healthcare coverage by combining Original Medicare with a supplemental plan. Let’s chat and find the best options for you!

3 Tips for Choosing a Medigap Plan in New Jersey

10/5/2020

Medigap is Medicare Supplement Insurance that fills in the “gaps” in Original Medicare. You have to buy and pay for Medigap on your own, but it’s well worth the price for many people. These are the years when you’re most likely to need medical care, so having complete coverage is important for your health and your pocketbook.
If you are considering adding supplemental coverage to your Medicare health insurance in NJ, here are some tips to follow.

1. Understand Your Coverage Needs

There is no one-size-fits-all Medicare supplement plan, so the first thing to do is understand your coverage needs. Medigap plans can help cover copayments, coinsurance and deductibles so that you pay less out of pocket. To compare your choices, visit medicare.gov.

Some questions to ask yourself are:

- Do I want basic coverage or extra coverage?
- Are there specific out-of-pocket costs I want help with?
- Do I want coverage when traveling overseas?
- Do I want a high-deductible plan?

2. Determine Your Budget

The next thing to consider is what you are comfortable spending each month. Medigap plans are priced differently, though most come with a monthly premium. Most insurance companies use one of these three pricing methods:

- Issue-age rated. Premiums are based on your current age and will not increase as you get older.
- Community-rated. All plan members pay the same premium regardless of their age.
- Attained-age rated. Monthly premiums are based on your current age, but your premiums rise as you get older.

3. Choose Your Plan Early

Signing up for Medigap during your Medicare Supplement Open Enrollment Period gives you the most options. This time period starts on the first month you turn 65 and are enrolled in Medicare Part B. The reasons why you’ll have the best options are because:

- You have “guaranteed-issue rights,” which essentially means you can’t be turned down for coverage.
- You can’t be charged more due to pre-existing conditions.
- The insurance companies can’t require medical underwriting.
- Once this period is over, you can still get supplemental insurance, but it may not be as easy. Insurance companies can refuse you coverage or charge more for pre-existing conditions.

Find the Best Medigap Plan for You!

Need Medicare help in New Jersey? Contact Leonard Financial Solutions for personalized assistance with Medicare and Medigap insurance.

What's New for Medicare in 2020

10/2/2020

The Centers of Medicare and Medicaid (CMS) are responsible for managing the 75 million people who receive this healthcare coverage. In order to ensure there is enough money, changes are made to the plans every so often. And - you guessed it - premiums often rise as a result.

Whether you’re a long-standing Medicare member, new to Medicare or approaching age 65, here’s what’s new for this healthcare coverage in 2020.

Higher Part A Premiums and Deductibles

Medicare Part A is the part of Medicare that pays for nursing home care, hospitalizations and healthcare services. Most people do not pay a deductible for Part A because they prepaid for it during their working years. But for those who do pay, premiums have gone up. Here’s what you need to know.

- People who worked for 30-39 quarters in their lifetime will pay $252/month, up $12/month since 2019.
- People who worked less than 30 quarters in their lifetime will pay $458/month, up $21/month since 2019.
- Deductibles for each benefit period are $1,408, up $44 from 2019.
- Part A charges participants a coinsurance of $352 per day (from days 61-90), up from $341 in 2019. After 90 days, you pay $704 per day, up from $682 in 2019.
- Daily coinsurance for skilled nursing facilities (for days 21-100) are $176 a day, up from $170.50 in 2019.

Higher Part B Premiums and Deductibles

Medicare Part B covers outpatient services, physician fees, home health care services, medical equipment and some medications. Most people pay a premium for this plan based on their income.

For individuals who make less than $87,000 per year and couples who make less than $174,000 per year, their monthly premium is $144.60, up $9.10 from last year. Deductibles also increased under Part B, going from $185 to $198.

Removal of “Donut Hole” in Medicare Part D

Part D is the prescription drug plan for Medicare. Your premium costs are adjusted based on your income. One big change in Part D is the closing of the “donut hole.” The donut hole is a gap in coverage that happens once the plan has paid out a certain amount of prescriptions for the year.

Once this limit is reached, you pay 25% of the cost of your medications until you reach your out-of-pocket max. Before the donut hole closure, you had to pay 40% of your drug costs before you could reach your out-of-pocket maximum, leaving a donut hole.

Change in Income Brackets

The income brackets for Medicare are also getting an update. Income brackets were introduced in 2007 and influence what you pay for Medicare, among other things. The bottom bracket is set at $85,000 for individuals and $170,000 for couples. However, this has been increased to $87,000 and $174,000, respectively, due to inflation.
Even though prices are increasing for Medicare, there are still ways to save money. Contact Leonard Financial Solutions in New Jersey to learn more about Medicare and the money it can save on essential healthcare services.