If You Fail to Plan, You Are Planning to Fail!

10.13.23: Audio automatically transcribed by Sonix

10.13.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Producer:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, Financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Producer:
Welcome to Your American Retirement with your host, Randy Sams. Get set for a full hour of Financial information and economic news affecting your bottom line. Randy works hard each day to educate Americans like you on how to reach the Financial freedom they've worked so hard for, and he can help you too. So now let's start the show. Here is your host, Randy Sams.

Randy Sams:
Hello again, Central Arkansas, welcome to Your American Retirement. My name is Randy Sams. I want to thank you for joining us on this Saturday morning crisp October morning. We've got a jam packed show for you on tap today. And don't forget to check us out on your favorite podcast form on Apple, Google or Spotify, or again, wherever you may get your podcast. You can also visit us on our YouTube page. YouTube.com and search for Your American Retirement. You'll see my smiling face again, folks. Our YouTube page just so you'll know we don't have the entire show. Own YouTube now the podcast does, but the YouTube channel just has little snippets. Maybe a minute and a half, two minutes worth of a segment of the show kind of give you an idea of what Today Show might be about, and then hopefully it will encourage you to go to the podcast or go to the website, YourAmericanRetirement.com and check us out, because we have all our previous recorded shows on the website. So again, hey, I want to welcome you to today's show. A lot of people are asking me, Randy, you know, what do you guys do? Of course, you know the name of the show, Your American Retirement. So you know what we focus on, right? We focus on helping folks prepare and understand what it's all about, what you're getting ready to go into in this little trip called a retirement.

Randy Sams:
A lot of folks think they're prepared for it, but when certain things come up. They're not prepared. So what we want to do our objective. Is to help people get prepared and face the major Financial issues that you're going to face in retirement. Or for those of you who are getting close to retirement. By helping people understand and prepare for a secure retirement, not a risky retirement. So folks, we do that by having consultations, free consultations. So what what do we do? So we're going to provide you with free comprehensive consultation again at no cost to our listeners. And again, there's no obligation. You only work with us if it's best for you. So we're going to help you analyze your Financial situation, your current Financial situation. We may help you discover exactly how much you're paying in fees in those 401 KS IRAs, any variable annuities and help you cut those unnecessary fees if possible. We're also going to help you with your Social Security planning and your Medicare. We'll talk about a little bit about Medicare again today. You know, we're getting close to a matter of fact, a couple of days after this show, 2023 starts, excuse me and your current situation to see what's possible if you work with us.

Randy Sams:
And again, it's your money, not ours. And we're going to do the best that we can to put you in a secure and a safe retirement, not a risky retirement. Two questions we're going to ask and we're going to answer when we have our consultation. Number one, how much guaranteed lifetime income do you have? And number two, have you taken the key risk of retirement off the table? All right. That key risk is what? Longevity. We want to make sure we set you up in a retirement plan for yourself and your spouse, your family. That sets you up for lifetime guaranteed income, a secure retirement, not a risky retirement. No what? No ifs, ands or buts, but a secure. So I always ask people, are you more apt to take a sure thing? Or a what if? Because with guaranteed income, you have a sure thing folks, that gives you a little bit of detail on what we do at SMMG Financial. Today's show we're going to start off Financial wisdom quote of the week. So let's play that music.

Producer:
And now wholesome Financial wisdom. It's time for the quote of the week.

Randy Sams:
The quote of the week. It takes as much energy to wish as it does to plan. I'll write that down. That's an easy one. It takes as much energy to wish as it does to plan, and that is given to us by Eleanor Roosevelt. Mrs. Roosevelt was an American political figure, a diplomat, and an activist. She was the First Lady of the United States from 1933 to 1945, during her husband, President Franklin D Roosevelt's four terms in office, making her the longest serving First Lady of the United States. So through her travels, public engagement, and advocacy, she largely redefined the role of First Lady. So again, Ms. Eleanor Roosevelt gives us the quote of the week. It takes as much energy to wish as it does to plan, and I'll agree with that, folks. Some people wish they would have prepared for retirement, but they just didn't plan right. In a matter of fact, that's kind of what we're going to talk about today. Today's show if you fail to plan, you plan to fail. So now you see where we got Ms. Roosevelt's Financial wisdom. So. Let's do a little survey, folks. Survey says that this is from nationwide. Americans have many concerns about retirement these days. According to 2023 Financial Advisor survey conducted by the Insured Retirement Institute. American's Financial concerns have increased in recent years. So listen to this.

Randy Sams:
79% are worried about inflation. Makes sense, doesn't it? Inflation is going to happen. 70% are worried about recession. All right I think that matters on who you vote for. Whether that who was it that said elections have consequences. Okay. But recession 65% are worried about losing a lot of money in the stock market. Folks, how do we tell you you've listened to the show in the past? How do we tell you to make sure you don't have too much money in the stock market? Again, I'm not a big believer having all your eggs in one basket. You remember the rule of 100. What is the rule of 100, Randy? I'm glad you asked. The rule of 100 is. Let's take your age. Subtract that from 100, and whatever's left over, you should have no more than that number in the stock market or at risk. So if you're 70 years old, 70 from 100 leaves, what, 30? You should have no more than 30% of your retirement funds invested in the stock market. All right or at risk. The other 70% should be in safe money investments annuities. All right. Bonds. So. That's how we take care of that. So 65% of people out there are worried about losing a lot of money in the stock market. That's how you make sure you don't. 57% are worried about their ability to maintain their lifestyle in retirement.

Randy Sams:
And how do we take care of that? How do we address that Financial. You already know that guaranteed lifetime income. It's what we're all about, folks. Again, let's take that sure thing. Let's stay away from the what ifs. So a separate survey from IRA I. That's the Insured Retirement Institute found that Pre-retirees are most interested in downside protection and guaranteed retirement income. In other words, most retirees want to get. To the guarantees when it comes to their golden years. All right. I've never met a retiree or a person, a pre retiree, who does not realize that you retire on income. It's all about income because assets can be lost. But I've got a little article. We'll take a little road down this trip. Trip down this road. I just said that wrong. But we're okay. This is kind of going to reinforce what I'm saying here, that pre-retirees and retirees are most interested in downside protection and guaranteed retirement income. All right. So here's the question. Would you rather not lose a $100, or would you rather find $100? If you like most people, you'd rather not lose $100. This is the concept of loss aversion. Loss. Loss aversion. One of the common biases with retirement planning. With loss aversion, individuals are more sensitive to a loss of value than they are happy about a gain.

Randy Sams:
So what's more valuable than your hard earned cash? Applying the concept to investing, it's natural to gravitate towards options shown to provide value, such as enhanced Financial security. So focusing on gain helps shift perspective perspective away from the perceived loss, which is why not losing money can feel better than gaining the same amount. So when it comes to annuities, most people think about them as a tool to provide income, to pay an insurance company a sum of money that earns a fixed. Guaranteed interest rate in exchange for regular income payments. In addition to income, annuities also offer opportunities to achieve more growth potential and boost your retirement savings. So we got to think holistically for the long term. Income is important for retirement and maximizing growth opportunities as you're saving in one way to secure more future income. As you accumulate money, you also want to safeguard what you have. But income and safety are only part of the picture. All right. So growth completes a picture. But we got to have that safety folks. So folks are interested. Retirees and pre-retirees are interested in not losing money. That's why we push the guaranteed income annuity folks. You guys come come right back. We're going to be getting back into how to do better than the 4% rule. You're listening to Your American Retirement on 101.1 FM. The Answer?

Producer:
Are you interested in ways to protect and grow your hard earned money? Your American Retirement is here to help. Are you anxious about retirement, concerned that you could outlive your money? Randy Sams is a Little Rock native who has nearly four decades of experience helping hundreds of Arkansans retire with confidence. If you want to get the most out of what you've worked so hard for, or if you're interested in learning how to maximize your Social Security, call Randy today at (501) 249-2343. That's (501) 249-2343. Or visit YourAmericanRetirement.com. Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.

Randy Sams:
Welcome back to Your American Retirement on 101.1. The Answer we're Little Rock comes to town. So don't forget to check us out on your tube page. On our YouTube page, visit YouTube.com and search for Your American Retirement and you'll see my smile and face. So, folks, many of you out there have heard of, you've been told about. You might be have a plan in place right now that's following the 4% rule. All right. So. I have a lot of discussions with people that they talk about. Well, my advisor or someone that they knew, someone at the coffee shop, you know, the world's problems are always solved at the donut shop, right? The coffee shop or whatever. Uh. Bad. We don't have a lot of politicians that that that join people at the, at the coffee shops because, you know, they solve all the world problems. And someone has said, you know, well, my friend. They they implement the 4% rule. So folks what is the 4% rule. So 4% rule has been used a long long time. It was used it created quite a while back. Not as not when the economy and the environment and the atmosphere was as volatile as what we're seeing today. But what it is, is when you retire. They came up with a rule called the 4% rule. That you take 4% right of whatever your income or your retirement plan, 401 K IRA investment, whatever. If it's in the stock market, you take 4% of your of that account value. And that's what you're supposed to live on. Okay. And guess that worked fantastically for a lot of people, especially, you know, if I'm taking out 4% and my and my account value is going up 5 or 6 or 7 or 8% a year, then my account value should all could, should still be going up.

Randy Sams:
All right. So if I start out with 100,000 and my account value is going up at 6 or 8% a year. But I'm only taken out 4%. That still means that my account value should still go up. But what they overlook and what they forget, is the years that your account value goes down and you're still taking that 4% out. It's very hard to catch that money up. But let's get let's talk about the 4% rule. All right. So the 4% rule is a popular rule of thumb for retirees to follow when it comes to managing their money. It suggests that retirees should withdraw 4% of their retirement savings each year in order to maintain their nest egg. This rule has been around for over two decades and is still widely used by many retirees and investment advisors today. But you may be able to do better for yourself by following a different strategy. And folks want to put this little side note. There are many, many articles out there that by economists and Financial advisors that will tell you that the 4% rule is not a safe rule for today. Actually, they say the safe withdrawal amount today is less than 3%. Okay, so, see, I don't want to put together a retirement plan, folks, that I can look at you and say, hey, Mr. Jones and Mrs. Jones, this retirement plan, I feel 90% certain that this is going to last till you're 85.

Randy Sams:
Okay. Don't think that's what you're asking for or what you'd be looking for either. All right. I want to put together a plan that gives you guarantees. A 100% guarantee. I cannot outlive this guaranteed income. All right. These Monte Carlo plans or Monte Carlo. Diagrams that they put together for you. All right. It runs thousands of different scenarios, and they can come out and say, well, Mr.. And Ms.. Smith, based on what you have, if we do this, if we implement the 4% rule and we do these kind of investments, that we've got a 92% probability. That this is going to last until you're 89 years old. Okay. Well, my question is, okay, well, that's only 92%. And what happens if I live to be 95? That plan not work. All right. So wouldn't you rather work with someone and have a discussion with someone that we can take a portion of your retirement plan, your funds, 401 K IRA, whatever it happens to be, and put that into a guaranteed income annuity where that income is guaranteed. It's a 100% probability. Folks, that's better than 85 or 90 or 92 or 95 to me. Okay. It's a 100% probability that you and your spouse will not and cannot outlive that guaranteed income stream. That's what we're all about. All right. So. But you may be able to do better than that 4% rule. So let's list a couple of things to look at. Consider investing in a fixed indexed annuity and defer taking income for 2 to 4 years.

Randy Sams:
We'll talk about that in just a little bit. That gives you the opportunity to let the linked index growth, the index growth, meaning a larger account value and more income during retirement, then take consistent withdrawals by annual penalty free withdrawals or annuities using your fixed annuity. All right. So folks. Two different options that we can talk about right now that will give you a higher income stream than just using 4%. All right. Number one. I just implemented this for a young lady in Tennessee. We did a major a multiyear guaranteed annuity. This is a fixed rate annuity. So it works like a CD. Folks it is not a CD. It's an annuity. So remember that. But for those of you who are familiar with CDs and CDs and you call them certificates of depression, you know how they work. You take your money to a bank, they tell you they're going to give you a certain percentage interest for a certain period of time, okay? And you leave the money in there. All right. Well, here's the feature that I like about the migas. This young lady. In Tennessee was able to take a portion of her funds, and we put that into a five year guaranteed annuity. And that guaranteed rate of return was 5.65%. All right, 5.65% guaranteed for five years. Now, she could have done longer if she wanted to, but she chose five years. All right. So now we put her into that annuity. And guess what she's able to do. So she is able to take out the interest payments on that annuity for the next five years.

Randy Sams:
She puts in $300,000 and her interest payments for the year are over $17,000, so she has a guaranteed income for the next five years of over $17,000 on that 300,000 that she put into the annuity. All right. So 5.65% sounds a lot better to me than 4%. All right. Plus guess what happens at the end of five years. She still has her initial investment waiting for her that we can take a look at and see what other options are available at that time. Okay. So that's using a fixed annuity. The other option that we can use. Get you a better return than 4%. Or 4% withdrawal rate is an indexed annuity with an income rider. To give you an example. So I have income annuities out here today that are guaranteeing me and you an 8% compound interest growth over the first ten years. All right. So those of you who are young right now, so let's say you just turned 60 years old and you're still working and you may not want to work. You may want to work for the next seven years, eight years, whatever you may want to retire at age 67 or 68. So that's your target retirement age. So we can take a portion of your 401 K while you're still working. Through the in-service distribution. You can look that up in service distribution, which means that you can take a percentage or all of your 401 K if you wanted to, but that's your decision, not mine, and put that into a guaranteed lifetime income annuity. We're going to let that thing grow at 8% compound interest for the next 7 to 8 years. And when you decide to retire at 67 or 68, boom, we turn on that income stream.

Randy Sams:
And that income stream, folks, is going to be based on your age at that time. So as an example, at age 68, your payout factor which all income annuities have a payout factor, your payout factor might be 6%, which means you're going to get 6% of whatever that income or your income balance might be, which is better than 4%. And that's guaranteed for your entire life, folks and yourself and your spouse. So that's why I like to work with annuities, because we're not locked into one type of annuity. We can utilize both types of annuity. And. Guaranteed interest rate annuity, or a fixed annuity, or the indexed annuity with the income rider. That gives us a guaranteed growth. So it takes gives you peace of mind knowing that if we have your money invested in the income annuity. The indexed annuity with the income rider that you've got a guaranteed 8% compound interest for as long as you leave that in there up to ten years. All right. Some go even farther than ten years. But that's why I like that, folks. So the 4% rule might have been good too. But to begin with, a long time ago, two decades ago. But right now, it's not what I consider to be your best option. And if you read the articles and you do your study like I have, you'll realize that they are saying that the 4% rule no longer is good for you to base your retirement funding on. It's less than 3% right now. Okay, so you need to learn more about that. You can call me at (866) 990-7664 or go to the website YourAmericanRetirement.com.

Randy Sams:
Leave me your contact information. I'll be glad to get in contact with you and go into a little bit more detail about the 4% rule. And let's look at your situation and see if we can't put you in a better situation than having to worry about. What's your withdrawal rate should be. All right. So. Folks, you know. That we are about to come up on. You know what stands for. That is the annual enrollment period, folks. So let's take a look at Medicare for you right now okay. A little bit of smart health. The enrollment A annual enrollment period starts October 15th and runs through December 7th. So let's take a look at Medicare and let's make sense of the different parts and the options available. So how many Americans are currently enrolled in Medicare? More than 61 million Americans are covered by Medicare health plans right now. The National Committee to Preserve Social Security and Medicare 2020. 18.5% of the US population is on Medicare. All right. Almost almost four out of ten Medicare consumers are also enrolled in Medicare Advantage plans for 2022. Medicare beneficiaries have access to 39 Medicare Advantage plans. And this is given to us by the Kaiser Family Foundation. 89% of Medicare Advantage plans offered in 2022 include prescription drug coverage. So, folks, again, it starts October 15th and runs through December 7th. And we want you to understand a little bit more detail what exactly Medicare is about. Medicare a b Medicare Medigap. So you come right back and we're going to get right into Medicare. What it is, what it is not. You're listening to Your American Retirement.

Producer:
Thanks for listening to Your American Retirement. If you like what you're hearing, subscribe to our YouTube channel to watch videos from this program and other recent episodes.

Producer:
The Taylor Swift effect has seeped into the NFL. I'm Jim Tarabukin. With the retirement radio network powered by Emperor Life, recent rumors suggest Kansas City Chiefs Pro Bowl tight end Travis Kelce and music icon Taylor Swift have been dating. Reuters sports correspondent Amy Tierney has more.

Producer:
With a global footprint, the multi-platinum Taylor Swift has an extraordinary influence and retail experts have seen an enormous uptick in jersey sales for Travis Kelce, not just in the United States, but internationally.

Producer:
Sports stars and celebrities from various industries have been romantically linked in the past, but this crossover has presented serious branding, marketing and Financial opportunities. Last Sunday night's game, for example, between the Chiefs and the New York Jets, drew 27 million viewers, the largest audience for a Sunday show since the Super Bowl last February. Nbc sports states further that viewership among teen girls, in particular, spiked 53% from the season to date average of the first three weeks of Sunday Night Football. The audience among women ages 18 to 24 was also up 24%. On the retail side, e-commerce site fanatics says sales of Kelsey's jersey spiked 400% following the Chiefs game against the Bears on September 24th, the first time Swift was spotted in the stands. Kelsey's podcast, New Heights, has also clinched the top spot on Apple's podcast charts. Nfl fans and Swifties an odd couple to say the least, but revenue generating opportunities abound for the retirement at Radio network powered by Emperor Life. I'm Jim Tabaka.

Producer:
Welcome back to Your American Retirement. Here's Randy Sams.

Randy Sams:
Again. Thanks for joining us on this week's edition of Your American Retirement. Be sure to check out the podcast version of the show on Apple, Google, Spotify, or wherever you get your podcast. You'll see my smiling face. All right, let's get into. And Medicare. All right, so what is the annual enrollment period. So Medicare, health and drug plans can make changes each year. All right. Those of you who have a Medicare plan or a prescription drug plan can make changes each year during the or known as open enrollment period. Things like cost coverage and what providers and pharmacies are in their network is what changes you might see again from October 15th to December 7th is when all people with Medicare can change your Medicare health plans and prescription drug coverage for the following year to better meet your needs. Okay. So if you have a Medicare or health plan or prescription drug plan, you should always review your material. You should have those materials for 2024. Like the evidence of coverage and the annual notice of change. So if your plans are changing. You should make sure that you're playing. You currently have still meets your needs for the following year. You know, you may have moved out of a a particular area, moved into a different area, and the plan you had may not cover you there. All right. So you need to make those changes. You may have additional prescription drugs that you started taking in 2023 that may not be covered in your current plan.

Randy Sams:
So if you need to make those changes going into next year, you need to do those during the October 15th through December 7th. Okay. So let's talk about Medicare. What is it Medicare Part A I know it can be confusing, but let's cover some of the basics. What is Medicare Part A? Basically it's a hospital insurance folks. All right. Go a little bit more detail in this. So Medicare Part A covers the following services. Inpatient hospital care. So this is care that received after you're formally admitted to a hospital by a physician. So you're covered up to 90 days each benefit period in a general hospital plus 60 lifetime reserve days. All right. So Medicare also covers up to 190 lifetime days in a Medicare certified security psychiatric hospital. You also covered for skilled nursing facility care. So they cover room and board and a range of services provided in a skilled nursing facility, including the administration of medications, tube feedings, wound care. You're covered up to 100 days each benefit period if you qualify for the coverage. Now, to qualify, you have to have have spent at least three consecutive days as a hospital inpatient within 30 days of admission to a skilled nursing facility. All right, so home health care Medicare covers services in your home. If you're a home bound and need skilled care. You're covered up to 100 days of daily care or an unlimited amount of intermittent care. To qualify for part coverage, you must have spent at least three consecutive days as a hospital inpatient within 14 days of receiving home health care.

Randy Sams:
Hospice care is covered under Medicare Part A. This is care you may elect to receive if a provider determines you are terminally ill, so you're covered for as long as your provider certifies that you need the care. So keep in mind, Medicare does not usually pay the full cost of your care, and you will likely be responsible for some portion of the cost sharing such as deductibles, Co insurances, co-payments for Medicare covered services. You got that? Medicare covered services. So. Most people do not pay part a premium because they or a spouse have 40 or more quarters of Medicare covered employment. In 2023, if a person has less than 30 quarters of Medicare covered employment. Part a premium is $506 per month. Why it's important to go to work, folks. If a person has 30 to 39 quarters of Medicare covered employment, part A premium is $278 per month. All right. So your Medicare Part A premium the majority of the time, because most people have worked and have qualified and have have accumulated the 40 quarters Medicare Part A premium, it doesn't cost you anything. But if you have not, those were the cost. All right. Medicare Part B. What is Medicare Part B? It is medical insurance. Medicare Part B provides outpatient medical coverage. And the list below. We're going to go over is kind of a summary of part B and the coverage rules. Provider services. Medically necessary services you receive from a licensed health.

Randy Sams:
Professional.

Randy Sams:
Durable medical equipment this is equipment that serves the medical purpose and is able to withstand repeated use and, if appropriate, for use in the house. Some examples are called wheelchairs, oxygen tanks, walkers. So you get those from a Medicare approved supplier. After your provider certifies that you need it. About home health services services covered if you are homebound and need skilled nursing therapy. Ambulance services this is emergency transportation folks, typically to and from hospitals. Coverage for non-emergency ambulance transportation is limited to situations where there is no safe alternative transportation available and where it's. Medically necessary preventative services. Listen to this. These are screenings and counselings intended to prevent illnesses, to detect conditions and keep you healthy. In most cases, preventative care is covered by Medicare with no co-insurance. It's a good news. Therapy services such as outpatient physical speech or occupational therapy, mental health services, x rays, and lab tests. Kilpatrick Chiropractic Care that's easy for me to say when manipulation of the spine is medically necessary to fix something wrong with your spine if you had an accident or something. Select prescription drugs, including immunosuppressant drugs, some anti-cancer drugs, some antiemetic drugs such as and some dialysis drugs. Drugs that are typically administered by a physician. So again remember keep in mind that Medicare does not usually pay for the full cost of your care. So Medicare Part A doesn't pay the full cost, and Medicare Part B does not.

Randy Sams:
Pay the full cost because you will likely be responsible for some portion of the cost sharing, such as deductibles, coinsurance, co-payments. For Medicare covered services. So in 2023, the part B premium was or is $164.90. The part B deductible is $233. In 2024. The part B premium. This is a monthly premium that you're going to pay for having. Medicare Part B is going up to $174.80, just basically say a $10 increase per month in 2024. And your deductible for part B is going from 233 up to 240. All right. So that's basically what your cost is going to be as far as your premium goes. You have Medicare. Just basic Medicare, original Medicare part A and part B. You're going to pay that $164 a month. Now it's going to be up to $174 next year. And your deductible for part B before it kicks in and pays anything this year is 233. Next year is going up to 240. All right. What is Medicare Part C better known for those of us in the business as Medicare Advantage plans. You can choose to get your Medicare coverage through a Medicare Advantage plan part C instead of through original Medicare Part A and part B. This is through an private insurance company, so Medicare Advantage plans must offer, at a minimum, the same benefits as original Medicare. So those covered. Those benefits covered under parts A and part B have to be at a minimum covered through a Medicare advantage plan, but can do so with different rules.

Randy Sams:
Cost and coverage restrictions. So you also a lot of Medicare Advantage plans typically include a prescription drug plan as part of your benefits package, known as an Mapd. Medicare Advantage prescription drug plan. Many different kinds of Medicare Advantage plans or advantages are available, and you pay a monthly premium. You may pay a monthly premium. Not always. This coverage in addition to your part B premium. So remember your part B premium is not going away. So if you have a Medicare advantage plan and they say it's a zero premium. All right. That's a zero premium. In other words you're not paying anything additional for that. But you're always going to pay that part B premium again. What is it this year 164 next year is $174.80. All right. So. If you join a Medicare Advantage plan, you will not use the red, white and blue Medicare card. When you go to the doctor or hospital, instead, you will use the membership card your private plan sends you to get health health services covered. You will also use the card at the pharmacy if your health plan. Has a Medicare prescription drug coverage. All right. So remember Medicare Advantage is pretty much. Medicare A and B with some additional benefits. But it's being provided through a private insurance company. You can name them Blue Cross Blue Shield United Health Care.

Randy Sams:
Go through the list. Okay. There's a bunch of them. And some people ask me, well, why does this company charge this rate for pretty much the same coverage? Well, that's because they are able to adjust their premiums as they see fit, as they need, based on their internal expenses. But they also are able through a Medicare advantage plan, you're able to get some additional benefits, ancillary benefits such as hearing, dental vision, additional benefits if you're diabetic. Gym memberships. So the Medicare Advantage has its pluses and minuses. There are a lot of out of pocket expenses, but you do have a maximum out of pocket with a Medicare advantage plan. Remember remember what I said Medicare A and B is not going to cover everything. As a rule of thumb, don't get locked into this. I always say it could be like a 70 over 30 plan or an 80 over 20 plan. Medicare may pay 70% of your hospital bill. You get to pay the other 30%. With a Medicare advantage plan. You still have a lot of out-of-pocket expenses. But you know what your maximum out-of-pocket expense is going to be. It could be 5000, could be 6000, 500, could be 7000. That's depending on the plan that you decide to choose. All right. Now. Medicare Part B, that is prescription drug coverage. That is part B and in part D, and it is part of Medicare that provides outpatient drug coverage.

Randy Sams:
So part B is provided only through private insurance companies that have contracts with the federal government. It's never provided directly by the government, unlike original Medicare. So if you want to get part D coverage, you have to choose enroll in a private Medicare prescription drug plan or a Medicare Advantage plan with drug coverage in Mapd. Enrollment is optional, though recommended to avoid incurring future penalties. So, folks, there is a penalty if you're eligible now to have a part D prescription drug plan and you choose not to at some point down the road, when you decide you want to take out that prescription drug plan. Maybe you don't take any medications today. But later on you might have to start taking some medications and you want to add that plan to you. There is a penalty. It's called a late enrollment penalty. All right. We want to avoid that. And if you have to be if you're eligible today, we want to put you in a plan that is going to fit your budget even if you don't need prescription drugs. So hey, come right back. We're going to talk about Medicare supplement plan, and we're going to do a little comparison. Just a short comparison on Medicare supplement versus Medicare Advantage. You're listening to Your American Retirement on 101.1 FM. The Answer we'll be right back.

Producer:
Like what you're hearing. You can watch the show to visit YouTube.com and search Your American Retirement to watch clips from this program.

Producer:
Are you concerned about market volatility, rising taxes, economic uncertainty and how it all could affect your future in retirement? Then tune in to Your American Retirement to learn how you can protect and grow your hard-earned money. Your American Retirement. Every Saturday at 10 a.m. right here on 101.1 FM. The Answer protect your retirement and schedule a free, no-obligation consultation now at YourAmericanRetirement.com. Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.

Randy Sams:
You're listening to Your American Retirement. Join us every Saturday morning at 10 a.m. right here on 101.1 The Answer where Little Rock comes to talk. So folks, we were talking about annual enrollment period again, which begins on October the 15th and runs through December the 7th. And this gives you the opportunity if you're currently on a Medicare plan, Medicare Advantage, original Medicare Part A, B, or a prescription drug plan, and you want to make any changes, you must make those changes during the enrollment period, okay. The annual enrollment period, a lot of things you can do during that period of time, if you want to change your prescription drug plan, you may be taking more, more drugs now than you were beginning of 2023. And you need a more robust plan to take care of you. That's what we want to do, folks. We want to make sure that we put you in a plan that's going to cover your prescription drug. You may have had a prescription drug plan that didn't cover the deductible. Could be $450 that you got to pay out of your pocket. But now, since you're taking more medications, you want a plan that's going to cover that prescription drug deductible. Okay, maybe you have a no deductible plan in 0 in 0 deductible plan for tier one and tier two. You may not have one now, but we can put you in one if that's what you need to have today. All right going into 2024.

Randy Sams:
But let's talk about Medicare supplement. Medicare supplement plans known as a medigap or Medigap plan. So what we call it Medigap for is because if you choose to go with a Medicare supplement plan, you will have two cards. All right. Just like myself. Most people that I deal with when they have the Medigap plan, will they? All people have. You're going to have your Medicare, your original Medicare part A, part B card, which is your red, white and blue card. And then you're going to have a plan from your insurance company that's providing you with your Medicare supplement plan. And you may also have a prescription drug card. All right. So a lot of people say, well, Randy, you mean I'm going to have three different insurance cards if I do Medicare supplement? Possibility. Yes. Okay. But that's okay. Because you have to make the decision that's based on your needs, what's best for you and your family, not what everybody else is doing. All right, so what is Medicare supplement, the Medicare supplement? Are plans or health insurance policies that offer standardized benefits to work with original Medicare, not with Medicare Advantage. So you can't have a Medicare advantage plan and a Medicare supplement plan. Folks can't do it. All right. If anybody ever tells you you have Medicare Advantage plan and they want to sell you a Medicare supplement, plan on top of that and walk away. So these plans are sold by private insurance companies.

Randy Sams:
So if you have a supplement plan, it pays part or all of certain remaining costs after original Medicare pays first. These plans may cover outstanding deductibles, co-insurance, and co-payments, and may also cover health care costs that Medicare does not cover at all, like care received when traveling abroad. So if you travel a lot overseas, you might want to look at a Medicare supplement plan. Remember, Medicare supplement plans only work with the original Medicare if you have a Medicare Advantage plan. You cannot buy a Medicare supplement plan. So depending on where you live, you have up to ten different Medicare supplement policies to choose from. Now listen to this. These are planned numbers A, B, C, D, E, F, G, K, L, m, and n. Kind of sounds like when I was in the first grade trying to learn my alphabet, didn't it? I left a few numbers or letters out of there. But listen. So plans or policies in Wisconsin, Massachusetts and Minnesota have different names, so each policy offers a different set of standardized benefits, meaning that policies with the same letter name, whether it be a plan A or a plan F or a plan G, they offer the same benefits, but premiums may vary from company to company. So what I mean by that, folks, listen. If I'm looking at the AARP plan, plan N and I'm looking at Mutual of Omaha Plan N. What's the difference between those two plans? The only difference, folks, is going to be the premium that AARP might charge.

Randy Sams:
Versus what? Mutual of Omaha. My charge. The plan in itself is exactly the same. They cover exactly the same, so it's standardized, so it doesn't make any difference. If you're looking at a plan in from Blue Cross Blue Shield or a plan in from AARP, or a plan in from whoever. Okay. Name a company. The plans are exactly the same. They cover the same benefits. The difference is going to be you got to look at the insurance company. What's their Financial ratings to me makes a big difference. And what's the premium going to be. All right. So that's the play. And the actual playing is going to be the same no matter what company. But the premiums could be different based on the company's expenses, what their claims paying abilities might be and what their claimed results have been. In other words, if they got hit with a lot of claims and that plan N or plan F or plan G makes a big difference, now a lot of you that are getting ready to retire, folks. You're getting ready to turn on Medicare, your age 65, and you're going to retire at age 65. This is why we need to spend some time together and go over what your options are. I want you to fully understand what Medicare Part A is all about. What Medicare Part B is all about. And then from there, we're going to look at whether a Medicare advantage plan is going to be a better fit for you.

Randy Sams:
Or should we stay with original Medicare A and B and add a Medicare supplement plan or a medigap plan, along with a standalone prescription drug plan? That's what we talk about. All right. So. If we look at Medicare or Medigap versus Medicare Advantage. So these types of insurance are designed to fill coverage gaps in part A and part B plans, you can't have both. About 81% of beneficiaries who have parts A and B supplement their coverage with Medigap, Medicaid, or employer-sponsored plans. Okay, so you're going to have Medicare plus Medigap plan. It's more expensive than other plans. But it covers any hospital or doctor that accepts Medicare anywhere in the United States. No need for prior authorization or referral from your primary doctor. And good for people who have specific doctors or hospitals they want to use. All right. So folks, if you don't want to have to be told what hospital you can go to or what doctor or what network, you have to go to that a Medicare. Original Medicare A and B plus a medigap plan might be the right fit for you. All right. I particularly have this type of setup. I have original Medicare Part A and B, and I have a medigap plan along with a standalone prescription drug plan. People ask me, well, Randy, why did you go that route? A lot of reasons, folks.

Randy Sams:
Number one is I was in good health and could qualify. I have a plan in myself and I'm going to go into a lot of details, but we can look at some of the plans, maybe later. Uh, but that's what we look at. Medigap versus Medicare. I like the Medigap plan. Medicare Advantage, also known as part C Medicare Advantage plans cover hospitals and doctors. And often include prescription drug coverage and other coverages not included in parts A and B. Remember Vision Dental hearing? Medicare Advantage Plan operates as a health maintenance organization, HMO, and limit people who are covered by this plan to doctors and hospitals in their network. So when you've got a Medicare Advantage plan, you're looking at either an HMO which mandates you go to those doctors or hospitals, or a PPO, which may tell you, you you need to go. You should go to our network of providers. But if you go outside of the provider network, we're going to pay less. That's known as a PPO. Okay. So I like the Medicare with the Medigap or Medicare supplement plan because it is go able to go anywhere you want to go to any doctor, to any hospital who takes original Medicare, whether you're traveling here in Arkansas or whether you're traveling in California, or whether you're traveling in Florida, they all take it. All right. So. Folks. That's what we do. We want to sit down with you. And again, how can we use an annuity?

Randy Sams:
We can put some.

Randy Sams:
Money into the annuity where you've got that guaranteed payout to help cover the cost for Medigap plans for that, for that supplement plan, plus any co-pays and deductibles. So we can help you with that today. If you want to cover those costs, you don't have to worry about it. So the annuity can be used. Ensuring that your health care needs will be met can give you peace of mind. So we can take money from an old 401 K, put it into an annuity, let that annuity grow, and use the annuity income to cover medical costs when you turn 65, or when you have the need to turn on that income stream to cover your part. B premium for original Medicare and any premiums that you may be charged for a Medicare Advantage plan or a Medicare supplement plan or a prescription drug plan. All right. So, folks, listen, I want to thank you for listening to today's show. You've been listening to Your American Retirement. If you've missed any part of today's show, go back in the podcast archives on Apple, Google, Spotify, or whichever platform you get your podcasts. I want you to go out and have a great rest of your Saturday. Go out and have a great week. We'll talk to you next week. God bless and go hogs.

Producer:
Thanks for listening to Your American Retirement. You deserve to work with licensed Financial insurance experts who can offer sound strategies for protecting and growing your hard-earned money. To schedule your free, no-obligation consultation, visit YourAmericanRetirement.com today. That's YourAmericanRetirement.com, not affiliated with the United States government. Randy Sams does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. AmeriLife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as-is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information. Are you anxious about retirement? Concerned that you could outlive your money? Randy Sams is a Little Rock native who has nearly four decades of experience helping hundreds of Arkansans retire with confidence. If you want to get the most out of what you've worked so hard for, or if you're interested in learning how to maximize your Social Security, call Randy today at (501) 249-2343. That's (501) 249-2343 or visit YourAmericanRetirement.com.

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