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Where Medicare Falls Short

Where Medicare Falls Short

Get wise about maintaining your health – and wealth – in retirement. Medicare provides a lot of coverage, but it doesn’t cover everything.

You may have a clear vision of your ideal retirement, but that dream could be challenged by unexpected healthcare costs. Even with Medicare, quality healthcare can come with a hefty price tag. There are still premiums, copayments, deductibles and other out-of-pocket expenses that must be accounted for.

To better estimate and plan for your future medical costs, take a look at what Medicare may not cover.

Hearing and vision

Hearing aids can range from $900 to more than $6,000 each, depending on the technology. They also need to be replaced every five years or so and require maintenance and batteries. Medicare covers hearing tests when medically necessary (think vertigo or injury), but otherwise you’re on your own. A typical hearing test can cost up to $250 without insurance; it’s about the same cost for a hearing aid fitting or consultation, too.

Traditional Medicare also doesn’t usually cover the cost of glasses, contact lenses, or eye exams, though there are some exceptions for those who have had cataract surgery.

Dental care

Routine dental care, including dentures, is not covered by Medicare or supplemental health insurance. The American Dental Association estimated that the average cost of two exams and cleanings and a set of X-rays is about $288. It’s estimated that an average retired couple will spend $18,590 out of pocket for dental services without additional insurance.

Mental health

Many retirees struggle with finding a sense of purpose when they transition into retirement, and this can lead to anxiety, stress or depression. Unfortunately, Medicare may not provide enough support. Part B allows for an annual health screening and therapy should you receive an official diagnosis. Medicare covers 80% of the cost after you meet your deductible; you’ll be responsible for the other 20%, which can range from $50 to $250 an hour with an approved provider.

Coverage abroad

Like to travel overseas? You might be under-covered. Traditional Medicare generally does not provide coverage for hospital or medical costs outside the United States. Residents of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Northern Mariana Islands are covered, and in some cases, inpatient hospital services in Canada or Mexico may also be covered.

If your wanderlust takes you further abroad, consider short-term travel insurance or a Medigap policy that covers foreign emergencies, such as plans C through J. Just be aware that the coverage applies for a limited time and doesn’t cover all expenses. A deductible and lifetime maximum apply.

Long-term care

Medicare, for the most part, doesn’t cover long-term or custodial care for help with everyday tasks like dressing or bathing. However, some 70% of us will need some form of long-term care either in a specialized facility or at home. The median cost of nursing home care in 2020 was $93,075 – even higher for a private room – according to the Genworth Cost of Care survey, and the median cost of a home health aide was $150 a day. Long-term care insurance can help you manage this risk by covering a range of nursing, social and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability. Talk to your advisor about when it makes sense to invest in a policy, what coverage you might need for skilled, intermediate and custodial care, and whether it makes sense to pay your LTC premiums from a health savings account (HSA). Of course, supplemental insurance might help in many cases, but even that comes at a cost, and the premiums are subject to inflation over time.

Covering your bases

You have several options when it comes to planning for the expenses mentioned above. A broad approach may be allocating a lump sum of money to cover the average lifetime healthcare costs. However, not everyone is able to set aside hundreds of thousands of dollars to fund future healthcare needs. Even if you can, it may take away from your general retirement savings, leaving you with a smaller pool of assets to fund the lifestyle you’ve worked so hard for.

It may be more practical to estimate your and your spouse’s projected health needs based on your family history and state of health. You and your advisor can start with a baseline for a person your age and adjust from there depending on how conservative you wish to be. Keep in mind, the longer you expect to live, the higher your costs could be, so you may want to use more aggressive numbers in your estimations.

You may also consider a hybrid approach, estimating costs, buying enough insurance to cover most of your anticipated needs and then setting aside a smaller cash reserve for the unexpected.

It may be advantageous to use a health savings account (HSA) while you can. HSAs are associated with high-deductible health insurance plans, and the money saved within them can be used for many of the costs outlined above as well as other qualifying health expenses. Distributions for qualified medical expenses are also tax-exempt. You can’t contribute once enrolled in Medicare, even if you’re still working – but you can use any HSA funds you already have and roll over unused amounts.

Think through, too, how life insurance could play a role. Most permanent life insurance policies allow partial withdrawals or loans for healthcare expenses. The caveat here is that any unpaid loan amounts will reduce the future benefit to your heirs.

If you’re still working, you may be covered by an employer-sponsored plan, but you’ll need to determine how your benefits work with Medicare and what your spouse may be entitled to. Some previous employers also extend insurance benefits to retirees.

To your health

It pays to understand what you can and can’t expect from Medicare so that unexpected medical expenses don’t eat into your retirement savings. Rely on your financial advisor to help clarify issues, add in contingency plans to your retirement income strategy and point you toward helpful resources.

Sources: Centers for Medicare & Medicaid Services; medicare.gov; aarp.com; time.com/money; kiplinger.com; "How Much Does Therapy or Counseling Cost?" Depression RSS2, March 29, 2016; costhelper.com

These policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Social Security Increases Benefits by 5.9% for 2022

Social Security Increases Benefits by 5.9% for 2022

More than 64 million Americans will see the increase in their payments beginning in January.

The Social Security Administration has announced a cost-of-living adjustment (COLA) to recipients’ monthly Social Security and Supplemental Security Income (SSI) benefits. More than 64 million Americans will see the 5.9% increase in their payments beginning in January of 2022.

The increase – significantly higher than last year’s 1.3% adjustment – is tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers and was put in place to ensure the purchasing power of these benefits isn’t eroded by inflation.

According to the Social Security Administration, on average, retired workers currently collect $1,565 per month in Social Security payments, or roughly $18,780 per year. The 5.9% COLA will add about $92 per month to those payments, or $1,104 for the year.

Keep in mind, all federal benefits must be direct deposited. So if you haven’t already started receiving benefits, you need to establish electronic transfers to your bank or financial institution. Contact your financial advisor for more information.

Source: Social Security Administration

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

From the Desk of Dale Crossley and Evan Shear

From the Desk of Dale Crossley and Evan Shear

We hope that you and your loved ones are staying well. For this edition of The Journey, you’ll find some timely articles on Medicare open enrollment and 529 Plans. We’ve also given our “From the Desk of Dale and Evan” a new title – “Déjà vu All Over Again.” In our last quarterly edition, we were essentially dealing with many of the same issues as we are now. Although the markets continue to do very well – and for that, we’re grateful – on the horizon, we have ongoing concerns about inflation and the potential for rising interest rates. The surge of cases due to the delta variant, not a concern last quarter, is the one new caveat. The surge may be starting to have a slowing effect on the economic recovery.

We’re continuing to see the greatest surge in U.S. inflation in 13 years, with most thought leaders affirming that it’s transitory and as supply chains are improving, inflation will settle down. While some sectors are meeting the demand for goods, others are experiencing shortages of labor and materials. At this point, we’re not sure how much of this might be caused by the delta variant surge and whether it has the potential to further affect the supply chain and, ultimately, the economy overall. 

With headlines continuing about the rise in inflation, concerns about the possibility of rising interest rates go hand-in-hand. There’s a delicate balance between keeping interest rates low, the Fed’s most powerful tool in helping the economy recover from the pandemic, and the need to keep inflation in check. However, the weak job reports from August, with lower than expected job creation, creates more complexity. The slowing may be due to several factors, including the summer season, but may also indicate that the delta variant is beginning to affect the economy. Nevertheless, in light of the slowing in the job market, experts believe the Feds will keep interest rates low and tolerate some inflation. For more detail, you can watch Raymond James’ Scott Brown, Chief Economist, brief but informative video here

We’re certainly hoping that the next quarterly issue will be “Déjà vu All Over Again” where market performance is concerned. As always, if you have questions or concerns, please reach out – that’s why we’re here.

We hope that you and your family continue to remain well. 

Take care,

Evan Shear                                                                                    Dale Crossley, JD
CERTIFIED FINANCIAL PLANNERTM                                  Financial Planner

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. All opinions are as of this date and are subject to change without notice. Past performance is not a guarantee of future results.

The Outlook for Vaccines, Variants and Elusive Herd Immunity

The Outlook for Vaccines, Variants and Elusive Herd Immunity

How do COVID-19 vaccines perform against the delta variant? When is FDA approval expected? And is herd immunity really achievable?

Raymond James Biotechnology Analyst Steve Seedhouse, Ph.D., addresses these questions and more in the latest episode of For What It’s Worth. Hear him discuss the latest data around vaccine effectiveness, the transition from pandemic to possible endemic and how COVID-prompted innovation may open the door for the prevention of other illnesses.



Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Grilled Halibut with Tomatoes and Hearts of Palm

Grilled Halibut with Tomatoes and Hearts of Palm

BY SEAMUS MULLEN

Cooking fish doesn't need to be intimidating. In fact, few things could be simpler—or more rewarding. For meaty steaks of swordfish, albacore, and halibut, all you need is a kiss of high heat from a grill or cast-iron pan and a simple vinaigrette. Zesting citrus directly onto your food means no wasted precious aromatic oils and zero chance of the zest drying out before you use it.

Ingredients
¼ cup olive oil, plus more for grill and drizzling
1 lemon
4 (5–6-ounce) skinless, boneless halibut fillets
Kosher salt, freshly ground pepper
2 pounds mixed heirloom tomatoes, sliced
½ cup sliced drained hearts of palm
Torn basil leaves (for serving)

Step 1
Prepare a grill for medium heat; oil grates. Finely grate 1 tsp. lemon zest directly onto halibut and lightly drizzle with oil; season with salt and pepper. Grill halibut, turning once, until browned on both sides and just opaque in the center, about 5 minutes.

Step 2
Meanwhile, combine tomatoes, hearts of palm, and ¼ cup oil in a medium bowl; squeeze in 2 Tbsp. juice from lemon and toss to combine. Season with salt and pepper.

Step 3
Toss basil into tomato salad. Serve halibut with tomatoes and dressing spooned over.

 

URL to article:  https://www.epicurious.com/recipes/food/views/grilled-fish-halibut-with-tomatoes-and-hearts-of-palm

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

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