<body><div>As every senior citizen in the U.S. knows, Medicare is one of the most important facets of life for retired Americans. Signing up for the program can feel like a finalization of retirement, permanently moving away from employer-provided health insurance.Many advisors, however, do not prioritize health insurance in their practices, forcing clients to find another professional or conduct their own research for one of their most important financial transitions. Having the ability and willingness to help clients transition to Medicare protects their finances at a critical time and boosts an advisor’s ability to deliver quality client services.<h2>Planning ahead</h2>Ideally, advisors should begin discussing Medicare with clients as part of general retirement planning five years before a client’s anticipated retirement date. This allows clients to properly plan for Medicare Part B premiums before they begin drawing on retirement income. These premiums are calculated every year, based on a client’s federal adjusted gross income (AGI) in the previous two years.This means that, for example, a client who sells their home in the two years before they retire could pay higher premiums for the first year or two of Medicare if they made enough in capital gains income from the sale.Enrollees can appeal these extra premiums, called IRMAA surcharges, based on job changes or temporary income. But these appeals can take 6-12 months to resolve, and both individuals in a marriage must complete them – even for married couples filing a joint tax return, each individual still has their own Part B premium. Scheduling one-off sources of income more than two years before retirement can help clients avoid them altogether.Part B premiums can also increase when clients draw income from traditional 401(k) and IRA accounts or from regular brokerage accounts, since all of that counts toward a client’s AGI. Income from Roth 401(k)s and IRAs, and cash from permanent life insurance policies, are not taxable, so drawing retirement income from these sources will not affect clients’ Part B premiums.For most clients, avoiding nontaxable income in retirement is not feasible. But knowing which sources of income will impact their Medicare costs can give clients a better sense of their overall financial situation in retirement.<h2>Managing logistics</h2>On top of retirement income considerations, signing up for Medicare is a beast all on its own. Clients, above all else, need objective guidance. Medicare does a terrible job of explaining itself to consumers, and seniors get buried in manipulative sales offers from policy providers, consultants and more. Advisors can fill this gap so long as they have the proper knowledge themselves.At the top of the logistics list are sign-up dates. Many seniors believe they are required to sign up for Medicare once they turn 65, but this is not true. People can wait, and it often is advantageous to do so if they are still working.However, new enrollees have a limited time range of about seven months to sign up for Medicare without paying a penalty: three months before the month they retire or turn 65, and three months after. Helping clients stay on top of these important dates is already a huge help.There are also specific considerations related to different portions, or Parts, of Medicare. Seniors must enroll in each Part individually: Part A for most hospital costs, Part B for ordinary healthcare, a supplemental policy (commonly called Medigap) and Part D for prescription coverage. Seniors may also opt for Medicare Advantage, which is a private sector policy that provides services covered by original Medicare. However, seniors must still be enrolled in Part A and Part B to purchase Medicare Advantage.Clients must consider the choice between Medicare Advantage and original Medicare with a supplemental policy carefully. Supplementals are more expensive, but they allow enrollees to see any doctor they want. During their initial sign-up period, seniors are guaranteed a supplemental if they opt for one.But if they want one after that initial enrollment, they will be subjected to a medical questionnaire. Finally, clients should know that once they sign up for Medicare Part A, they can no longer make additional contributions to a Health Savings Account.Advisors have a wide array of resources available to help them learn more about Medicare, from events offered by the Center for Medicare and Medicaid Services to educational materials from broker-dealers and professional organizations.By equipping themselves with this knowledge, advisors can not only spare their clients a headache but potentially save them thousands of dollars.<figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2kc9su_0wCDXNtQ00" alt="https://img.particlenews.com/image.php?url=2kc9su_0wCDXNtQ00" width="263" height="306" ></figure>About the AuthorPamela J. Sams, CRPC, is the president of Jackson Sams Wealth Strategies and has been helping women improve their personal and financial wealth for more than 20 years. Sams is a 4-year MDRT member.</div></body>

Mountain View, CA

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Helping clients make a smooth transition to Medicare

As every senior citizen in the U.S. knows, Medicare is one of the most important facets of life for retired Americans. Signing up for the program can feel like a finalization of retirement, permanently moving away from employer-provided health insurance. Many advisors, however, do not prioritize health insurance in their...