Rx Blues! – September 2022
Melody had always been in good health and took only a few generic prescription medications, which were only a few dollars or even free on the drug plan she had for several years since enrolling in Medicare.
However, in mid-year 2021 she developed several medical issues that resulted in her taking more medications. Unfortunately, a few of these new medications had extremely high co-pays and even triggered the deductible on her plan. "There's got to be a better plan for me," she thought.
While checking her email the next day, she saw her annual email from American Retirement Advisors requesting her new current updated drug list. "Wow," she thought, "Talk about good timing."
The email was simple but important. It was a reminder of the Annual Election Period (AEP) that runs from Oct. 15th through Dec. 7th. It also asked her to provide a list of her current prescriptions so that we can complete the research on all the Part D drug plans available for next year and recommend the most appropriate plan for her.
She immediately got all her prescription bottles to complete the "Request for Information form" included in the email. She needed to provide the name of each drug, the strength of each medication, and how often she takes it. Once, twice or three times a day? After completing the form, she would send us her responses by hitting the "submit" button.
Towards the middle of October 2021, she received a recommendation and was pleasantly surprised at how much she would save in the new year. She didn't realize that drug plans change every year! So now you are reminded too!
So, whether you have a Medicare Part D stand-alone drug plan, or your Part D drug plan is included in your Medicare Advantage plan, be sure to respond to the email that will be arriving soon!
Success Story of the Month
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More for Less?
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By David Edge
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While recently meeting with a client who was a young grandmother with three beautiful grandchildren, she was lamenting the fact that she wished she had more to leave the grandkids when she passed. I pressed her for more information on exactly what was she concerned with? She replied that while she was OK with her retirement income she only had a small amount of money in a bank savings account and that each child would only get about $10,000 when she passed.
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I was glad she brought it up so that we could have the opportunity to help her with this dilemma.
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“How would you like to leave them $20,000 or maybe even $30,000 each?” I asked.
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“Impossible!” was her immediate reply. “Au contraire”, I said. “There are ways to make the money worth two or even three times the face amount”. I could tell I had her undivided attention.
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There are insurance products on the market that you can purchase with the cash in your savings account that are guaranteed to pay out upon your passing to any beneficiaries you direct. The cash in your saving account is paying you pennies on the dollar in a low -yield bank account while it just sits in your bank. Let’s look at some ways to make that cash more valuable.
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We then had a discussion on a Single-Premium life insurance policy. This is a product that will take your one-time payment, and guarantee you a payout larger than your one-time payment. There are factors that affect exactly how much of a multiple the payout will be upon your passing. These factors generally have to do with qualifying for the policy and usually only have a simple blood test by a nurse who usually comes to your office or home.
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But for a simple example, you take the $30,000 that’s in your savings account; purchase a single-premium life policy that would have a guaranteed death benefit of $60,000. This is what legacy planning is all about. You are making decisions now that will affect your family later. Your three grandchildren will get $20,000 each instead of $10,000. It would take your bank savings account around 30-35 years at 2% interest to grow to that amount of money. Instead, you’ve doubled the money by just purchasing a policy, instantly.
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What’s great about this policy is that the money is fully funded, it’s safe and secure, as an efficient way to transfer wealth. It’s flexible, as many of these policies have value added living benefits and liquidity features with access to the death benefit or cash values should the policy holders’ financial needs change.
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She was stunned that these products existed and her family financial planner had never discussed this with her before. I merely reminded her that at American Retirement Advisors we look as all aspects of your retirement and not just sell you products. Grace was more than just a little happy as we reviewed her new options.
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Concerned that the small amount of money in a savings account isn’t going to be very much to pass along to your family in the event something happens to you? Call us we can help!
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By David S Edge
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While assisting many folks and couples with their selections of retirement planning options, we often run into pre-conceived notions about retirement, especially misinformation about Medicare. We will hear things like, “Well, my neighbor told me that her mother…. Or my cousin’s sister told us…”
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At times we just have to shake our heads!
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Marge and George were just such folks. We spent the first thirty minutes of their appointment dispelling all the things they thought they knew about retirement. Here is a short list of items we discussed.
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Marge stated they could get full Social Security retirement benefits at age 62.
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Correct answer: Full retirement age for Social Security is age 66. The benefit amount will be approximately 8% less for each year taken earlier. But you can take the discounted amount as early as age 62.
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George thought that he didn’t have to get a Part D Prescription Drug Plan along with his Medigap plan because his HR department stated that Part D was voluntary.
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Correct answer: While Part D is voluntary, what his HR department rep didn’t explain was that for each month he didn’t have a Part D, he would be penalized later when he did add Part D. The penalty grows each month he doesn’t have his Part D, and this penalty never goes away!
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George’s HR department told him he had to turn on his Part A of Medicare when he turns age 65.
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Correct answer: If you continue to work with an employer coverage plan, you do not need to do anything.
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George also thought he could continue to contribute to his HSA
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