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Social Security Increases Benefits by 2.8% for 2019

Social Security Increases Benefits by 2.8% for 2019

The adjustment is the largest since 2012, and over 67 million Americans will see the increase in their payments beginning in January.

October 11, 2018
 
 
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 67 million Americans will see the 2.8% increase in their payments beginning in January of 2019. The increase – the largest seen since 2012 – 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.

This figure is an increase from last year's 2.0% adjustment. According to the Social Security Administration, on average, retired workers currently collect $1,420 a month in Social Security payments, or roughly $17,040 a year. The 2.8% COLA will add about $50 a month to those payments, or $600 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


Navigating Medicare

Review this roadmap to help you navigate through the Medicare enrollment process.

October 9, 2018
 


Making the Most of Medicare Open Enrollment Period

Making the Most of Medicare's Open Enrollment Period

With open enrollment season upon us, ask yourself a few questions to make sure you're getting the most from Medicare.

October 4, 2018
 
Medicare’s open enrollment season is upon us. That means between October 15 and December 7, you are able to make changes to your Medicare Advantage and prescription drug coverage.

During this time, you can change from Original Medicare to a Medicare Advantage plan or vice-versa or switch from one Medicare Advantage Plan to another Medicare Advantage Plan. You can also join a Medicare advantage or Medicare prescription drug plan for the first time or drop your drug coverage completely.

Even if you’re satisfied with your current plan, open enrollment presents a great opportunity to make sure you’re getting the most out of Medicare. Every year you should compare your current plan to other plans in your area in case another plan offers better health and/or drug coverage at more affordable prices.

The coverage provided by insurance companies often changes each year and could result in paying more out-of-pocket on healthcare expenses throughout the year. Here are some tips to help you get started.

1. Ask yourself some important questions. Have your needs changed? Is your current coverage adequate? Will the cost of your current plan be going up? Are there comparable, lower-cost plans available?

2. Review the annual notice of change from your current plan provider. You should receive this in September.

3. If you have a Medicare Advantage plan, make sure your doctor is still accepting your particular plan next year. If your doctor is out of network, you will have to choose a new plan or pay higher out-of-pocket costs.

4. Carefully review if your plan covers your prescription drugs and what those copayments and coinsurances costs are.

5. If you switch from a Medicare Advantage plan to Original Medicare, you will want to join a stand-alone Part D plan to get Medicare drug coverage.

6. Compare plans using medicare.gov’s Medicare Plan Finder.

7. Get one-on-one assistance from the State Health Insurance Assistance Program.

8. Call the Medicare Rights Center at 800.333.4114 for free counseling.

9. All changes to your Medicare plan will take effect January 1 of the next year.

Medicare decisions can be complicated. If you have any questions about open enrollment, or if you’d like to discuss how healthcare costs factor into your overall financial plan, please contact your financial advisor.


An Empty Nest Could Mean a Fuller Wallet

When children leave home, you may have extra resources to invest in yourself.

July 26, 2018
 
“Pomp and Circumstance” is streaming throughout the auditorium. You beam with pride as a dean confers a degree upon your child, and you watch her move the tassel from one side of the mortarboard to the other. Congratulations. Your baby just graduated from college. With any luck, she already has a promising job in her chosen field, and she’s all set to start paying her own bills. Your financial obligations have suddenly diminished. Now what? 

Well, you just got a raise, so to speak. The money once reserved for your child’s needs and wants is once again available to fulfill your own. While you may be tempted to splurge on a pricey vacation, consider these other uses first.

Be Realistic

You’ll never stop caring for your kids, both emotionally and financially. Many parents want to continue offering their children extra support, whether it’s a down payment on a house or college funds for future grandchildren. If you’d still like to help out financially, talk with your financial advisor about the most efficient way to accomplish this without losing track of your financial goals. 

Protect Your Legacy

This is also a good time to update your will. Chances are the previous iteration named guardians for your minor children, which may not be necessary now that they’re young adults. If you’re inclined to charitable giving, the extra money that once went to college tuition could be reallocated to a cause that’s near and dear to your heart.

You may also want to make one of your children the executor of your estate. And if you haven’t already, you should designate your spouse or one of your grown children to have powers of attorney for your healthcare and finances in case of incapacitation. Of course, whenever there’s a change in circumstances, you should review the beneficiaries on your retirement, savings and brokerage accounts, as well as your insurance policies.

Think About Insurance

Speaking of insurance, you may be over-covered as an empty nester. Take the time to review your policies now that your children are no longer financially dependent on you. If you’re overpaying for life insurance premiums, you may want to cut back on coverage and pocket the savings. You’ll need some professional guidance here to make sure you maintain adequate coverage going forward.

Your child can stay on your healthcare policy until the age of 26. But if your child is eligible for his or her own employer-sponsored coverage and leaves your plan as a result, you could save money. The same holds true for auto insurance. Removing your child from your policy could lower the cost as much as 50%, according to the Insurance Information Institute.

Regulations may prohibit medical providers from sharing information with you about the health of your now-adult child. Ask your child to carry a signed document that authorizes healthcare practitioners to discuss relevant information with you.

This is also the time to think about long-term care insurance, if you haven’t already discussed this with your planner or purchased a policy. Studies show that long-term care, which generally is not covered by Medicare, could deplete your retirement savings. Buying a policy in your 50s and 60s when you’re in good health will be easier than trying to purchase one as you get older.

Treat Yourself

When there’s newfound wiggle room in your finances, it’s tempting to want to splurge a little. Boston College’s Center for Retirement Research found that spending on non-durable goods, the fun things, jumped more than 50% per person for empty nesters. That’s understandable after years of paying for dance lessons and soccer dues. So if your budget allows, make plans to travel, return to school, start a business or do whatever you’ve dreamed of. Ask your advisor to help you set aside a certain percentage for the fun stuff.  

Move On

Next, consider where you’d like to live. Would you prefer a smaller house or a beachfront condo? Would you rather move to a less expensive home and invest the difference? If downsizing frees up some equity in your home, you could reallocate that money to other goals like starting a new career or funding retirement. 

Moving to a smaller home might provide additional resources for your later years, which could make up for a less-than-stellar savings track record. In addition to using that home equity to bolster your retirement savings, you could also benefit from lower cost of living, maintenance costs, property taxes and insurance premiums.

Focus on You

Now that you have more time and resources, you can prioritize your future. Talk about this life change with your professional advisors and make sure your financial plan reflects your new circumstances. For example, you may want to adjust your asset allocation to reflect your new goals or use the extra money to step up investments in your overall portfolio, potentially increasing your net worth.

Next Steps

Strategies mentioned may not be suitable for all investors. Please consult your financial advisor about your individual situation. Investing involves risk and investors may incur a profit or a loss. Asset allocation and diversification do not ensure a profit or protect against a loss.


Strive Toward Success This Summer

Take some time this summer to review your financial progress, set new goals and tie up loose ends.

June 26, 2018
 
Several financial deadlines are now behind you. Take a breath, and then take some time this summer to review your progress, set new goals and tie up loose ends. Tally up any recent life changes that may affect your estate plan – adjusting it as necessary – and evaluate your benefits and insurance.

Summer 2018 Market Closures

Wednesday, July 4: Independence Day
Monday, September 3: Labor Day

Planning To-Do's

Register with SSA.gov: Check your earnings history for accuracy and review your expected benefits through this site. If you’re close to retirement age, discuss with your advisor when and how you should file to maximize your benefits.

Enhance your estate plan: Check the beneficiaries of your IRAs, insurance policies, trusts and any other accounts, and update information that is no longer relevant. Ensure your plan protects you and your family in the case of an unexpected event.

Review insurance needs: Periodically review and update coverage to ensure proper protection.

Address life changes: Speak with your advisor about major life changes you’ve experienced and how your financial plan could be affected. These changes include marriages, births, deaths, divorces, a sudden windfall and more.

Download the complete checklist below and talk to your advisor to make sure you don't miss any important financial planning dates this summer. 

A-Plan-for-All-Seasons-Summer
A Plan for All Seasons: Summer 2018

Raymond James financial advisors do not render legal or tax advice. Please consult a qualified professional regarding legal or tax advice.


Material prepared by Raymond James for use by its advisors.