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How to Compare Medigap Policies Side by Side

11/17/2020

Medicare Supplement Insurance (or Medigap) helps fill in the gaps in Original Medicare. It is sold by private insurance companies and ranges in price depending on how much coverage you need. Original Medicare pays for much of your healthcare services and supplies, but it doesn’t pay for everything.

Unfortunately, medical care is expensive, and what Medicare doesn’t cover can get out of hand quickly. This is why most people benefit from supplemental insurance. But how can you compare these policies to ensure you are getting the right coverage for your needs?

Side-by-Side Comparison of Medigap Plans

Here is a breakdown of Medigap plans. This is not a complete comparison, but it does give you an idea of what additional expenses will be covered.

Things to Know about Medigap Plans

To be eligible for Medigap, you must have Medicare Parts A and B. You can buy one of these policies from a private insurance company licensed in your state. It’s helpful to work with a financial planner in New Jersey who can help you pick the best plan for your needs and budget.

Once you purchase a supplemental plan, you will pay the insurance company a monthly premium, in addition to paying the premium for Part B. Additionally, keep in mind that a Medigap policy only covers one person. If your spouse wants this coverage, they will need their own policy.

Find Your Medigap Plan Today

If you’re ready to find a supplemental insurance plan, contact Leonard Financial Solutions today. As an independent financial advisor in NJ, we can find you the best policies and rates in your area. You’ve worked hard and paid your dues, so you deserve to get the high quality medical care you need to live a long and healthy life! With the right Medigap plan, you will!

How to Use Whole Life Insurance for Retirement

11/5/2020

You might not be thinking about your life insurance policy on a regular basis, but there are certainly additional benefits to this policy that you may not know about. Aside from paying your beneficiaries money upon your death, it can also be used for retirement planning in NJ. Now this is more worth thinking about, isn’t it?
Let’s explore how your permanent life insurance policy can be utilized as an additional source of income when you retire.

Build Cash Value

One of the main benefits of a permanent life insurance policy is its ability to build cash value. The cash value of a policy is the balance remaining after a portion of your payment has gone to the premium. Each month that you pay into your policy, some of the money goes toward the premium and some goes toward cash value.

Over time, the cash value account grows and can be used as a source of income when it comes time for retirement. And as long as the amount withdrawn isn’t more than the amount you’ve paid in premiums, you don’t have to pay taxes on it either.

Borrow from Yourself

Another option that you have is to use your cash value as a loan. It’s essentially a loan that you’re getting from yourself so you don’t have to deal with anyone else or their terms. You don’t technically have to pay this money back, but it’s a good idea to do so because it accrues interest and won’t take away from your death benefit. But this can be a nice cushion if you plan to purchase a second home in Florida or pay off your mortgage.

Save on Income Tax

There are some tax advantages to using your life insurance to fund your retirement. Let’s say that you have $50,000 coming out of your IRA account, along with $25,000 in Social Security. This full $75,000 would be taxable income. On the other hand, if you get the $50,000 from life insurance, you’re only taxed on the $25,000 from Social Security.

Not only do you reduce your taxable income this way, but also you lower the tax bracket you’re in. This means you pay less taxes on the $25,000 from Social Security. The only downside is that whole life insurance is expensive to invest in. This is one of the reasons why we recommend starting these policies early.

Start Planning for Retirement

So should you fund your entire retirement though a whole life insurance policy? Not necessarily. There are other vehicles you should invest in as well to build wealth. That said, we want you to know that permanent life insurance is one of the ways you can reach your retirement goals. To discuss your options for retirement planning in New Jersey, contact Leonard Financial Solutions today.

Can I Keep My Life Insurance When I Retire?

11/4/2020

For most of your adult life, you likely had a life insurance policy. Most people get their life insurance policy from their employer and don’t think much about it. These policies are generally offered as part of a benefits package for full-time employees. It’s also possible that you took out a life insurance policy once you had children so that they would be protected if you died unexpectedly.

However now that you’re about to retire, you might be wondering if you need to keep your life insurance in New Jersey. Once you retire, you won’t have benefits from your job anymore, so that means you have to take out a new policy or not have one at all. What’s the best option?

Life Insurance is for Your Beneficiaries

While there is no simple answer for everyone, we’ll do our best to explain the purpose of life insurance and why you may not need it anymore.

When you take out a life insurance policy in NJ, you’re not insuring your life. You are protecting family members from the loss of income if you were to pass away. That’s why life insurance is highly recommended for working adults, as their families probably couldn’t keep up with their bills if they were to die unexpectedly.

There are different types of life insurance depending on your needs and budget. Term life insurance offers coverage for a specific period of time, usually 10-30 years. Permanent life insurance is a lifetime policy that helps build cash value.

Do Your Children or Spouse Depend on Your Income?

If your spouse or partner will have a steady source of income if you die, then you probably don’t need life insurance. Many couples live off Social Security and their retirement savings so there’s no income to replace. But this isn’t the case for everyone. If your spouse will lose a substantial amount of your pension income, life insurance can help fill the gap.

Another instance where you may want to keep your life insurance policy is if you have a spouse or adult children who are dependent on you. Even if they aren’t, some people like having something to leave their children or grandchildren.

How Much Life Insurance Do I Need?

If you plan to keep your life insurance after retirement, you’ll probably need to review it because there will be some changes.

Think about your situation and the people who would experience a loss if you were to die today. What amount of money would allow them to keep living and paying the bills? This will help you determine how much life insurance you need. You’ll also likely find that a term insurance policy will fit your needs. We do recommend permanent insurance if you have a high net worth or a thriving business, as you could be subject to taxes.

While this doesn’t give you a simple yes or no answer, we hope it provides you with some insight as to who needs life insurance in NJ when they retire and who doesn’t. To learn more about your options for retirement, schedule a consultation with 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.

5 Times When You Should Hire a Financial Planner in NJ

9/28/2020

Financial advisors, also known as financial planners, are professionals who help their clients with wealth management and personal money matters. They can put together a retirement savings plan or simply answer questions about whole life insurance in New Jersey.

So how do you know when you should hire a financial advisor to assist with your financial planning? You can hire a financial advisor in NJ at any time, but these five situations are especially important.

1. You’re close to retirement age.

Some of your biggest money questions come when you’re getting close to retirement age. When should you file for social security? Do you need to apply for Medicare? Do you have enough money to retire?
A financial planner can help you set financial retirement goals and develop a plan to reach them. This is especially important if you plan on living off the income generated by your assets. Make sure you choose a professional who specializes in retirement planning, as not all do.

2. You received a large inheritance.

Receiving an inheritance can be a nice way to improve your life in the short-term, but you may also want to use this toward your long-term goals. By working with a financial advisor, you can put together a plan that maximizes this money. Financial planners can help determine where to invest your money, the different savings options you have and how to secure your financial wealth.

3. You’re going through a divorce.

Unless you’ve only been married for a few months, divorce is messy. Because you and your ex share assets, there is a lot to be divided. Who gets what? Should you sell the family home? How much will child support payments be?
Because divorces are emotional, it’s important to have non-biased parties helping you along. Divorce causes your short- and long-term goals to change, and a financial advisor can help you with both.

4. You’ve had a major life change.

Major life changes like marriage, a new income, a baby, buying a business, etc. are good reasons to speak with a financial advisor in NJ. It’s important to know about your options in terms of investments, setting up a college fund or tax planning. And, if you already have a plan in the works, you can have your advisor look it over and amend it based on your new circumstances.

5. You’re young and don’t know where to start.

Some people think that when they’re young and don’t have much money, they don’t need an advisor. But it’s actually the opposite. It’s much easier to start planning for retirement when you’re young and in your 20s. You can invest a small portion of your paycheck each month and watch your investments grow. Because you’ll be doing this for a long time, you can build up a nice nest egg, pay off debt and retire early.

These are some of the times in your life when you can benefit from speaking to a financial advisor. Advisors are flexible and you can hire them on a one-time basis or for long term needs. To learn more about how a financial advisor can assist with your financial planning and wealth management strategy, contact Leonard Financial Solutions today.

What are the Pros and Cons to Long-Term Care Insurance?

9/15/2020

Is long-term care (LTC) insurance in NJ a smart investment? That’s the million dollar question! On one hand, long-term care insurance protects your retirement assets and picks up healthcare costs not covered by health insurance. On the other hand, an LTC policy is expensive and has a relatively strict qualification process.

Purchasing long-term care insurance is a personal decision, but you are more likely than not to need it. Below our financial planners in New Jersey share the pros and cons to having an LTC insurance policy.

What is Long-Term Care Insurance?

Long-term care insurance covers long-term support services such as assisted living, adult daycare, respite care, hospice care, memory care, etc. These insurance policies reimburse you for long-term care costs, up to a predetermined limit. This way, you can get the quality services you need when you need them.

Long-term care insurance is a great option for many people. But with high premiums, strict requirements and some limitations, an LTC policy may not make sense for everyone.

Pros of Long-Term Care Insurance

Here are the advantages of taking out an LTC policy:

Peace of mind. LTC insurance lets you seek the care you need without having to rely on family, giving you the ultimate peace of mind.
You’re likely to need it. The American Association for Long Term Care Insurance (AALTCI) says that 68% of people who are 65 and older will need long-term care.
Have options. If you do need assisted living one day, long-term care insurance gives you options. You can choose a high-quality facility and maintain your financial independence.
Tax free benefits. LTC insurance benefits are tax free. The monthly premiums are also tax deductible.

Cons of Long-Term Care Insurance

Some things to keep in mind about LTC are:

Expensive. Long-term care insurance is not cheap, and because it’s relatively new, pricing is a major concern. As your health changes, premiums may increase.
You may not qualify. Between 15% and 20% of applicants are denied coverage. Some health concerns may also make your premiums higher.
You may not need it. It’s possible that you may not ever need long-term care. As an alternative, the insurance industry is introducing hybrid plans that combine LTC insurance and whole life insurance in NJ.

If you are considering long-term care insurance, schedule a consultation with Leonard Financial Solutions. Our financial advisors in NJ can help determine if this insurance is right for you based on your financial health. If we find that LTC is not the best option, we can suggest other solutions for long-term care planning.

Your Top Questions About Medicare Answered

9/9/2020

Medicare can be confusing! The good news is that most people report being satisfied with their health care coverage. But like other types of health insurance, Medicare is complicated and features a wide range of plans, coverage choices, premium levels and enrollment rules. If you are interested in applying for Medicare, your best bet is to contact a financial advisor in NJ who can walk you through your options.

In the meantime, here are the top six questions we hear from clients, along with our responses. For additional questions or concerns, feel free to contact Leonard Financial Solutions!

1. When can I get Medicare benefits?

Unless you are disabled, Medicare kicks in at 65 years old. A common misconception is that Americans can get Medicare once they apply for Social Security, which can be as early as 62. But this isn’t true. Even if you retire early, you’ll still have to wait until you are 65 to be eligible for Medicare.

2. How do I apply for Medicare?

If you are already receiving Social Security benefits, you don’t have to apply for Medicare. At age 65, you’ll be enrolled automatically in Parts A and B. However, if you’re not receiving Social Security, you’ll have to apply for Medicare. Your initial enrollment period starts three months before your 65th birthday and extends for three months after.

3. Can you explain what the different “parts” of Medicare are?

There are four parts of Medicare. It’s important to understand each part so that you can be properly covered.

- Part A is your hospital insurance that covers hospital stays and some stays in skilled nursing centers.
- Part B is your medical insurance that covers doctors’ visits, lab tests, outpatient procedures and more.
- Part C is Medicare Advantage - plans offered by private companies to provide Medicare benefits. You’ll still be enrolled in Medicare, but you’ll have extra coverage like vision, hearing and dental.
- Part D is your prescription drug coverage. These plans cover both name-brand and generic prescriptions.

4. How much does Medicare cost?

Medicare A is free for most Americans, though there is a deductible to account for as well as coinsurance for some hospital stays. Medicare B has a monthly premium that varies based on your income as well as a deductible. Part D also has a monthly premium of around $35. You can find updated costs for 2020 here.

5. Are there things Medicare doesn’t cover?

Yes, there are healthcare services that Medicare won’t cover. While this is not a complete list, here are some of the things excluded from Medicare:

- Long-term care
- Dental care
- Eye exams
- Glasses
- Dentures
- Acupuncture
- Hearing aids
- Foot care

6. What is Medigap insurance? Do I need it?

Since Medicare has many copays and deductibles, private insurers sell Medigap or Medicare Supplemental Insurance Plans. Whether you should get a Medigap plan depends on how much risk you’re willing to take on.

Medicare Parts A and B cover a lot but certainly not everything. A serious illness could cost you a significant amount of money if you only have Medicare. With Medigap insurance, you can set a limit on your medical costs and plan for your health care expenses more accurately.

If you have additional questions or concerns about Medicare and Medigap insurance, contact Leonard Financial Solutions today!