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2022 • Quarter 4 • Issue 4 |
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Robert Dumais
Principal, LBA
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Friends in Labor,
So here we are, with our fourth and final newsletter of 2022! Where has the time gone... I will admit that putting these newsletters out there quarterly has turned out to be a much larger effort than I originally anticipated. Choosing topics that are interesting, informative and timely is challenging and takes time, but I believe it’s worth the effort. I hope you agree!
As we approach the holiday season, it is a time to be thankful. At LBA, we are thankful for our clients and thankful for the Labor community for referring their retiring members to us. We appreciate the opportunity to help them through the retirement process.
Our ultimate goal at LBA is to always strive to be better. We are open-minded to constructive input and value your feedback. Please tell us how we can better serve you, your members, and your friends and family in the upcoming year.
Be well and be safe this holiday season!
Bob
Principal, LBA
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Free Retirement Planning Workshops |
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LBA 911
Medicare Open Enrollment Season Is Around the Corner
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If you are on Medicare, the timeframe between October 15th and December 7th is critical. This is Medicare Open Enrollment Season, and is the time of year when you should do an annual re-evaluation of your Medicare elections for the upcoming calendar year.
We suggest you consider the following questions in making your selections:
Health:
- Do you currently have any chronic health conditions?
- Do you have any medical procedures scheduled, or are you anticipating any?
- Are you taking any prescription drugs? Are they name brand or generic? How much are you spending on prescription drugs? Do you have a preferred pharmacy?
- When did you last compare Part D alternatives?
Lifestyle:
- What is your resident state?
- Where are your current healthcare providers located?
- If you faced a serious health diagnosis, would you consider going out of state for care?
- In the future, do you plan on spending extended periods in another state? In another country?
Budget:
- Do you prefer a higher premium plan with very little out of pocket costs beyond that, or a lower premium plan with higher out of pocket costs when you actually receive care?
- The premium range for Medicare coverage varies widely - at what price point are you most comfortable?
If your answers to any of these questions have changed over the years, it’s time for you to sit with an independent expert. The selections you've made in the past might not be the best choices moving forward. They might be costing you thousands of dollars and could even be limiting your access to care in the future.
Even if your status has not changed, you should still talk with an expert annually because the Medicare marketplace is dynamic and it is your responsibility to keep pace. The best example of why you should review annually is regarding prescription drugs, where the average savings from taking a second look at your Medicare coverage is more than $500 per year.
As a side note, the base cost of Part B will be dropping from $170.10 to $164.90 per month effective 1/1/2023.
Schedule time to meet with an LBA advisor. Our Labor friendly team's knowledge and integrity is second-to-none, and you will never pay a fee for their time.
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SOCIAL SECURITY NOT KEEPING UP WITH INFLATION DESPITE COLAs |
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Run-away inflation is wreaking havoc on the budgets of everyone. With everything from gasoline, to utilities, to apparel, to groceries costing more, consumers are struggling to make ends meet. Some feel that seniors collecting Social Security are getting hit the hardest and losing buying power each year despite cost-of-living-adjustments, or COLAs. According to AARP and ResumeBuilder.com, 1 out of 5 retirees say that they are likely to start working again this year, with 69% of those respondents citing the growing costs of living as their reason for going back.
Part of the reason for the gap between inflation and COLAs can be explained if you understand the way COLAs are calculated. Simply put, Social Security COLAs are based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The problem is that the CPI-W isn't really reflective of the costs and expenses that seniors commonly face because seniors spend their money differently than younger people.
The recently released Social Security COLA for 2023 is 8.7%. While that’s a significant number, if the particular items on the average senior’s shopping list are up 15%, the senior still comes up short despite the raise. For years, senior advocates have proposed using a senior specific index for calculating Social Security COLAs which would be more reflective of what seniors’ budgets look like. That idea, however, has yet to gain traction. So, while a large Social Security COLA is certainly welcome, it will likely still result in an income gap for the average senior.
Besides making policy changes to control inflation, both seniors and their allies should advocate for lawmakers to change the basis from which the Social Security COLAs are calculated. This will not only take into account the true cost of living for seniors, but help ensure their financial stability.
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When you partner with LBA, we help you to setup the best strategy to handle the woes of inflation and stabilize your retirement income. |
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The Inflation Reduction Act: Relief for Retirees? |
If you’re taking some expensive prescription medications, there is hope that one aspect of the Inflation Reduction Act (IRA) will provide some financial relief. While some of the changes brought about by the IRA will occur at a later date, some relief with the cost of expensive prescription drugs is scheduled to begin in 2023. |
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For 2023:
- Insulin copays will be capped at $35 per month
- All recommended adult vaccines will be free for Medicare beneficiaries
- Corporations will not be allowed to raise the price of prescription drugs faster than the rate of inflation, or they will be required to pay rebates to Medicare
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The Department of Health and Human Services will identify the 100 most expensive Part B and Part D medications, and begin a process of negotiating to lower the price of some of the drugs each year.
For 2024:
- The 5% coinsurance for Part D catastrophic coverage will be eliminated
- Qualifications for the low-income subsidy will be eased
For some, the prescription drug cost savings resulting from these changes will be truly significant. For others, the impact will be less, but it is a step in the right direction.
The LBA advisors keep current regarding changes which may impact you and your family, whether in a positive or negative way.
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TAKE CONTROL OF YOUR RETIREMENT ACCOUNTS |
Many folks have retirement accounts through their employers, or health and welfare funds. These accounts might be called 401(k), 403(B), or 457, as they come with lots of numbers and letters assigned to them depending on the type of institution. Some people have multiple retirement accounts, because they may have switched jobs a few times throughout their working career and have never consolidated them. What most of these accounts have in common, however, is that they are qualified accounts. That means that in most cases, dollars put in the accounts were put in before taxes, or “pretax.” |
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In many cases, these accounts perform very well on a long-term basis. However, sometimes they may fall short of your expectations. Maybe the sponsor’s goals no longer align with yours, or maybe you’re no longer comfortable with the volatility you’re experiencing. You might find comfort in knowing that in many instances, you have the opportunity to make changes and take control of these accounts.
If you are over 59 1/2, you likely have the opportunity to do what is called an “in-service distribution.” This means that even if you are still working, you have the opportunity to move all, or a portion, of your funds to an alternative investment that
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will better meet your expectations and goals, or as we say, be more “age-appropriate.”
These account changes and/or consolidations, when handled properly, will not change the qualified tax status or create a taxable event.
In the end, you will be in control of investments tailored to your needs with features that are important to you.
Talk with an LBA advisor soon to discuss your options, and take control of your hard-earned money.
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Free Retirement Planning Workshops |
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We host multiple free workshops each month, both virtual and in-person.
Visit our website below to see our calendar with all of our upcoming workshops.
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Click on the date and time that you're interested in, and then click the Eventbrite link to head over to the registration page.
Our workshops are for anyone who is thinking about retirement and wondering where to start, as well as those who may be semi- or fully-retired and need help maximizing their Medicare options, Social Security benefit, retirement income, and investments.
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If you'd like to learn more about the important considerations you should be making to ensure an enjoyable and stable retirement, we'd here to help. |
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LBA consultants are members of OPEIU Local |
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Robert Dumais, Principal
275 West Natick Road
Suite 450
Warwick, RI 02886
401-868-1400 (O)
774-991-3369 (M)
401-737-0330 (F)
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P.S. Add me to your contacts so we can continue to keep you in the "know" and don't hesitate to hit "reply" to contact us. |
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