Medicare Tips and Scams to Avoid During the Annual Enrollment Period

10.20.23: Audio automatically transcribed by Sonix

10.20.23: 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:
Well, good morning, Central Arkansas. Want to welcome you to Your American Retirement. I want to thank you for joining us this morning. This Saturday morning. I hope your day so far has been beautiful. I hope you've had your first cup of coffee or however many cups of coffee it takes you to get going. I hope you have that and you're ready to sit down and take some good notes. We got a jam packed show for you today, and don't want to forget to let you remind you to check out our show on podcast on Apple, Google, Spotify, or wherever you might get your favorite podcast. Watch us. Also, you can visit YouTube page as well, you know, go to youtube.com and search Your American Retirement. You'll see my smile and face. And folks, when you see us on YouTube, remember, it's not the complete show the podcast will be, but the complete show will be on the website. YourAmericanRetirement.com. The YouTube channel is just going to show you a short clip it of what we have on today's program or previous shows to got to get you an idea of what the program is about that day. All right. So that's kind of what we do. And if you're ready we got a jam packed show today. Again my name is Randy Sams. I am your host I am president of SMMG Financial. And you got to remember that at SMMG Financial Your American Retirement.

Randy Sams:
What do we do. We are focused on addressing the major Financial issues facing retirees and pre-retirees in America today by helping people understand and prepare for a secure retirement, not a risky retirement. So you'll hear me say that many, many times over, folks, we believe in guaranteed income. We believe in security. We believe in safe money investments. All right. We try to eliminate as much Financial risk for you going into retirement or into retirement. As we possibly can. We're going to ask you two questions. You know what those questions are. If you've listened. Number one is going to be how much guaranteed lifetime income do you have currently. And number two, have you taken the key risk in retirement off the table. Of course that key risk is longevity risk. That is the risk of you outliving your retirement funds. We want to take that off the table for you. So, you know you can give us a call (866) 990-7664. Or go to YourAmericanRetirement.com. Leave us your contact information. We'd love to be able to set up a free consultation with you and your spouse, you and your family, and let's go over what you currently have or what your retirement might look like if you meet with us now. So let's get this show started. Let's do a little Financial wisdom to start off today.

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

Randy Sams:
Financial wisdom quote of the week. We must all suffer from one of two pains. The pain of discipline or the pain of regret. The difference is discipline weighs ounces, while regret weighs tons. That makes a lot of sense, doesn't it? So the quote is given to us by Jim Rohn. And Jim was born in 1930, lived through 2009. He was a renowned American entrepreneur, author, motivational speaker. He was born in Yakima, Washington. He overcame early Financial challenges to become a mentor and motivator to millions. Roane's philosophy focuses on personal responsibility and self-discipline for. So again, our quote of the week we must all suffer from one of two pains the pain of discipline or the pain of regret. The difference is discipline. Bayes lbs's. While regret weighs tons. Thank you for that quote, Mr. Rone. All right. Got a little do a little public service announcement. Got a couple of things. Want to talk to you guys about today. But since the majority of you that listen y'all getting close to retirement, you have questions about Social Security. Some of you may have already turned on Social Security, but you're still working. So today I want to give you a little update. The Social Security cost of living adjustment that's known as cola. Cola is set for 2024. But our retirees really keeping up. So listen to this. Social security recipients will receive an annual cost of living adjustment in 2024 of 3.2% that was just announced, folks.

Randy Sams:
So it's a much smaller increase than the inflation fueled boost of the two of the past two years. The Social Security Administration announced this last Thursday. The lower adjustment reflects the fact that inflation, as moderated this year, so recipients have received increases of 8.7% for 2023 and 5.9% for last year. So that was 2022, okay, which were the largest since the early 1980s. So a little bit of a background very quickly. Again, 2024 3.2%, which was announced last Thursday, 2023 8.7% 2022 5.9 2021 5.9 2020 1.3 and that was set prior to Covid 19 pandemic. All right, so many people, especially those that senior Citizens League, remain critical and skeptical about these cost of living adjustments, accurately representing the real increases to cost of living in the United States, especially for seniors who spend more on services like health care. So an independent economic research group known as True Flation, you can go to true inflation. That's true inflation. Flatiron.com has determined that the real level of inflation since January 2020 is actually 23.9%. Are you keeping up? And folks, we're going to talk about inflation a little bit later on the show. But I've got another little announcement that I, that I want to put together for you. Uh, as you know, Medicare is starting their when you listen to this today on Saturday began October the 15th. That's the annual enrollment period.

Randy Sams:
That's the Medicare annual enrollment period. And that runs from October the 15th through December 7th. And so during that period of time, you can reevaluate your plans each year. You will likely find that you can save money, or you can make some changes and maybe save some money on your Medicare expenses. All right. So savvy retirees do a Medicare coverage check every year just in case they have the opportunity to save some extra money. So we're going to talk about AEP. We're going to talk about Medicare. This is something that I've been doing the first couple of segments of each show we've had the past couple of weeks, just because we're right in the middle of AEP, or I should say, we're right at the start of AEP. And a lot of folks that I meet with that are getting close to retirement. They start asking questions about Medicare. What's Medicare all about? What's part A, what's part B, what's part C? We go over that. I spend a couple of hours with my clients when we sit down and want to understand and review Medicare, what it is, what it is not. Okay, because I want you to get a very detailed understanding of what it is you're about to go into when you're leaving your employer's group health plan and you're moving over to a Medicare plan. All right, whether it be original Medicare or what.

Randy Sams:
But I need to make this announcement. But, folks, I'm not giving this out, this information out. This is public information. So I'm not doing anything that anybody doesn't already have access to. If you if you've looked or if you've done a little research. But the end of last week, October the 13th Baptist Health. That's in little Rock Baptist Health. They sent out a notice to their patients and providers. And I'm going to read this to you. I've got a couple of them I want to read. And folks, I'm I want to give this to you as information as public information. It's on their website. You can go to Baptist health.com. And this information is on their website. So I'm not trying to scare you. Hopefully what I'm about to cover is going to be resolved between Baptist Health and a couple of the insurance companies. But. You have to make a decision, or you're able to make a decision during a whether or not you need to change your Medicare advantage, or you need to change for Medicare original Medicare to a Medicare Advantage plan. Anyway, let me get into what they're saying. So Baptist Health is committed to helping ensure any disruption in continuity of care is limited. And those that Medicare participants have multiple options when it comes to their health insurance. While options can be good, not all Medicare Advantage plans are contracted with Baptist Health, which could limit a patient's access to Baptist Health and its affiliated health care providers.

Randy Sams:
They talk about. Medicare's annual and open enrollment again begin on October the 15th. And in an effort to keep you informed, we are providing a list of Medicare Advantage plans that are contracted with Baptist Health to be in-network in 2024. As of this date, which was October 13th. That's when they wrote that, remember started on October the 15th. Patients who have original Medicare or Medicare Advantage plan that is already in network for 2024 can continue to access Baptist health and affiliated health care providers. However, patients who choose a Medicare advantage plan that does that does not contract with Baptist Health could have their ability to access Baptist Health and affiliated providers disrupted starting January 1st, 2024. Now, folks, that was the first letter that was mailed out on October the 13th. On October the 16th, there was a letter that Baptist Health mailed out to physician partners. And this basically says that Medicare eligible patients and their parties, which in part concerns a potential network disruption for patients with United Health Care, Medicare Advantage, or AARP, Medicare Advantage insurance plans. I'm going to come right back. We're going to get right back into this because I want to update you on on what's going on with this. But again, you're listening to Your American Retirement on 101.1 FM. The Answer will be right back.

Producer:
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Randy Sams:
Hey, welcome back to Your American Retirement on 101.1 FM. The Answer where little Rock comes to talk. Don't forget to check out our YouTube page, visit youtube.com, and search for Your American Retirement and you'll be able to see my smiling face. So, folks, let's get right back into it. We just left off segment one talking about want to do a little public service announcement for those of you that are making thinking about making changes or might currently have a plan, and if you are currently, let's say that you get your care provided your hospital coverage through Baptist Health or one of the participating doctors, this could affect you. All right, now, I'm not doing this in order to put a scare into anybody. I'm doing this to notify you that maybe you should do a little checking. You can call me (866) 990-7664 or call whatever agent you might have your Medicare advantage through, but it's only effects. This particular company. Well, there's two companies, but mainly so again. When we ended, there was a letter that was written on October the 16th by Baptist Health sent to the physician partners. And it's being distributed to our Medicare eligible patients and other parties, which in part concerns a potential network disruption for patients with UnitedHealthCare, Medicare Advantage or AARP Medicare Advantage insurance plans. Okay. So, as you know, AARP Medicare Plans advantage plans are through UnitedHealthCare. All right.

Randy Sams:
So their goal is to have contracts finalized by Medicare's annual open enrollment period. Well, folks, that began on October 15th and this letter was written on October 16th. So as of and I received this on October the 17th. Okay. So patients are able to choose the best insurance plan for their health care needs. While negotiations between Baptist Health, Arkansas Health Group and UnitedHealthCare are ongoing, we feel it is appropriate to advise our community that we do not have a contract for 2024 at this time and are unsure if we will reach an agreement prior to January 1st. Okay. So folks, that's that's where the concern comes in. All right. That's why I wanted to let you folks know, um, why is Baptist Health sending out this notification? Um, they basically are trying to make sure everybody that has an opportunity to make a change during. October 15th, but that you were made aware of the possibility that UnitedHealthCare Medicare Advantage and AARP Medicare Advantage plans as of today, they're they're good through the end of 2023. But starting January 1st, 2024, right now, have not they not been able to negotiate a contract? Okay. So basically what that would mean you would not be in network if they are not able to negotiate that contract by January 1st, 2024. Starting January 1st, 2024, you would be considered out of network, not in network. Okay, so if you choose a Medicare Advantage plan that ultimately does not contract with Baptist Health, in most cases, starting January 1st, 2024, Baptist health and affiliated health care providers will not be able to treat you except for emergency or urgent conditions.

Randy Sams:
In some cases, your Medicare Advantage plan will request your care is transferred to another facility once you are stabilized. Okay, so. That's what I'm talking about, folks. I just want to make sure that you understand. That if you currently have United Health Care or you have AARP. Medicare Advantage plan. Both of those Medicare Advantage plans as of today. And again, I've received this information on October the 17th. When you're listening to this, it's going to be October the 21st. All right. If that changes, then we'll we'll let you know that. But as of the October 17th today of the recording of this show, they're still in negotiations with that. So if you go into 2024 with a UnitedHealthCare or AARP plan, just be aware that as of today. They were still in negotiations with Baptist Health. All right. So. Plan accordingly. I would definitely be making some phone calls to whoever your Medicare agent might be. Your Medicare Advantage agent might be, or you can call us (866) 990-7664. Again, I'm not doing this to try to solicit solicit your business. I'm doing this to inform you. But hey, you need to make sure that you are paying attention to what's going on during this period of time.

Randy Sams:
Okay, so let's talk about Medicare. And so parts of Medicare. We're going to go over original Medicare Part A and part B. So what is part A. Part A is hospital insurance helps cover inpatient care in hospitals skilled nursing facility care hospital hospice care and home health care. Folks remember. When you have original Medicare, you can look at that plan as basically being an 80 over 20 plan. 80% covered, 20% your responsibility. And that is on Medicare covered or eligible charges. All right. Medicare Part B. Medicare Part B helps cover services from doctors and other health care providers. Outpatient care. Home health care. Durable medical equipment like wheelchairs, walkers, hospital beds and other equipment. Many preventative services like screening shots or vaccines, and yearly wellness visits again. 80 over 20 plan 80% paid. 20% your responsibility. So original Medicare includes part A and part B, so you can join a separate Medicare drug plan. And we'll go with that in just a second. To get Medicare drug coverage that's known as part D. So you can use any doctor or hospital that takes Medicare anywhere in the United States. So you're not limited to just a particular group, a particular hospital, all right. Or a particular doctor, as long as they take or accept Medicare anywhere in the United States.

Randy Sams:
You're good. Help you to help pay your out-of-pocket expenses on original Medicare. Remember? Like. Like 20% co-insurance. You can also buy a supplemental coverage like Medicare supplement insurance known as Medigap, or have coverage from a former employer or a union or Medicaid. All right, now, Medicare Advantage, known as part C. And that's what we just talked about with what's going on with Baptist Health Care and, you know, United Healthcare, AARP. Anyway, Medicare Advantage is a Medicare approved plan from a private company that offers an alternative to original Medicare for your health and drug coverage. These bundled plans include part A, part B, and usually part D. They're known as Mapd plans Medicare Advantage prescription drug plans. In most cases, you'll need to use doctors who are in the plans network. That's known as an HMO or a PPO provider. Okay. Physician provider organization or HMO health maintenance organization. So a lot of times if you're in an HMO or a PPO, you are required to be able to only go to those doctors that are in that network. You might be able to go out of network, but it may cost you a higher out-of-pocket expense. Okay, so Medicare Advantage plans may have lower out of pocket costs than original Medicare. Plans also can offer some extra benefits that original Medicare doesn't cover, such as vision, hearing and dental services. Okay, so that's kind of an overview of Medicare.

Randy Sams:
Medicare Advantage Part C part D known as drug coverage. That is, your drug coverage helps cover the cost of prescription drugs, including many recommended shots or vaccines. You join a Medicare drug plan in addition to original Medicare, or you get it by joining a Medicare Advantage plan with drug coverage already included. Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare. Now, folks, I get asked this a lot, a lot of times, well, Randy, what happens if I'm getting ready to retire or I'm getting ready to move over into Medicare and I want to get a and I'm not taking a lot of drugs or I'm not taking any prescription medications. All right. So folks, here's the rule. You. It's not mandatory that you sign up for a prescription drug coverage plan when you first become eligible. Used emphasis on mandatory. All right. But. Right now, if you're not taking a lot of prescription drugs or you're not taking any prescription drugs and you say, well, Randy, why am I required to purchase a prescription drug plan? You're not. You don't have to. But if in the future, a year from now, two years from now, three years from now, however far out in the future it might be something happens to your health and you have to start taking a lot of prescription drugs.

Randy Sams:
Okay. And at that time you say, wow, my out-of-pocket expense for these, for these prescription drugs are is quite high. I should probably get a prescription drug plan. It's been three years since you've been first eligible, and you chose not to participate in your prescription drug plan when you first became eligible. You will pay a late enrollment fee or a penalty and focus. That penalty does not go away. So if that penalty after three years of not having prescription drug coverage, if that penalty ends up being $15 a month, that $15 a month is going to be paid forever, right? I shouldn't say that there are certain things that could happen Financially if you become if your income becomes so low that you qualify for less, then that would be going away. But majority of the people that I know that you have, that you've had to pay that late enrollment penalty because of the fact that you did not choose to join up when you first became eligible. They're still paying it today, whether it be two years ago or five years ago. All right. So remember. If you when you first become eligible. I would recommend you take out a prescription drug plan even if you're not taking any prescriptions. Okay, folks, I'm not taking any prescriptions. I have a prescription drug plan. My playing is very minimal. Cost me $7 a month.

Randy Sams:
All right, so my out of pocket. It's something I've got. But later on, if I have to have more medication, guess what? I can change my plan. But I'm not going to have to worry about that late enrollment penalty, because I've had a plan since I first became eligible. All right, let's finish up this segment with Medicare supplement. Or as a lot of folks refer to it as Medigap. Medigap is extra insurance you can buy. From a private company that helps pay your share of cost in the original Medicare. Policies are standardized. In other words, they're all the same, no matter what company that you may purchase it from. The plan is exactly the same through Mutual of Omaha or UnitedHealthCare or whoever it might be. Blue Cross Blue Shield plans like plans like the benefits of each lettered plan are the same no matter which insurance company sells it. But the premiums could be different because of the internal expenses. So, folks, that's why we need you to call us (866) 990-7664 or go to the website YourAmericanRetirement.com. Leave us your information. Tell me that you want to get together. And let's discuss Medicare options. If you're getting close to making Medicare or you're getting close to retirement and you got to switch from your group coverage to a Medicare plan, again, you're listening to Your American Retirement. We'll be right back.

Producer:
Are you interested in ways to protect and grow your hard earned money? Your American Retirement is here to help.

Producer:
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Sharon Epperson:
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Producer:
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Producer:
Visit YourAmericanRetirement.com to schedule a free consultation with Randy today. And now back to the show.

Randy Sams:
Hey, thanks for joining us on this week's edition of Your American Retirement. Be sure to check out the podcast version of our show on Apple, Google, Spotify, or wherever you get your podcasts. So again, thank you for joining us on today's show. So folks, let's talk about. If you just are tuning in. We've spent a couple of segments here talking about Medicare Medicare supplement. I've made a couple of public service announcement about the Cola for 2024. For those of you who are on Social Security, you're taking your retirement benefits. But let's kind of cover what it is, what it is, not what you can and cannot do. I'm not going into great detail, but just kind of give you an overview because a lot of people ask me, well, Randy, you know, this is the first year I've been in Medicare, what can I do? I hear about I hear about, I hear about Oep. There's a lot of different enrollment periods, okay. And they different. You can do different things through each enrollment period or each enrollment time. Some things you can do during, some things you can't do during. So let's cover EP. So. The annual enrollment period is from. That's the Medicare Advantage. Annual enrollment period is from October 15th, 2023 to December 7th, 2023. So after this point, the next opportunity to change is during the Medicare Advantage open enrollment period, which is from January 1st, 2024 to March 31st, 2024. So let's not get those two confused.

Randy Sams:
You got. Which is from October 15th, 2023 to December 7th, 2023. And then you have an open enrollment period, which begins January 1st, 2024 and runs through March 31st, 2024 and will cover. What's the difference between those two? So during the annual open enrollment period, again October 15th through December 7th, you can switch from a Medicare Advantage plan to original Medicare. So you can consider enrolling in a medigap plan as well. Switch from original Medicare to a Medicare Advantage plan. And switch from one Medicare Advantage plan to a different Medicare Advantage plan. So that's why I wanted to give you folks that are listening today an opportunity to to know if you currently have. Coverage through UnitedHealthCare or AARP. Medicare Advantage. That you've got some issues going on with Baptist Health. They're in negotiations as far as the contracts goes. Hopefully they'll get all that resolved by January 1st, 2024 and everything will be fine. But if they don't and you have a United Health Care Medicare Advantage plan or an AARP Medicare Advantage plan, and you like going to Baptist Health if that's your hospital of choice. Here in Central Arkansas, beginning January 1st, 2024, you would be considered out of network. If you go to Baptist Health, not trying to scare you, just trying to keep you informed of what's going on. So something to consider if you have one of those plans during this period, October 15th through December 7th, you can make a change from your current Medicare Advantage.

Randy Sams:
Coverage to a different Medicare Advantage coverage. What happens after AEP and then beginning January 1st, 2024 through March 31st, 2024? That's known as the Medicare Advantage open enrollment period. So what can you do during the open enrollment period? You can switch from a Medicare Advantage plan to original Medicare. You can switch from one Medicare Advantage plan to a another Medicare Advantage plan. So two different deals. So let's say that during let's say right now, between now and December 7th, you decide that you want to make a change. With your current Medicare Advantage provider. Uh, and then all of a sudden, somewhere between January 1st, 2024 and March 31st, 2024, you decide that the plan is not as good as what you might have been told it was. Okay, maybe you Answered one of those television ads on the TV that says, you get everything free and we're going to send you money back. Then all of a sudden you realize that that was not true. So during open enrollment period, you can switch from that Medicare Advantage plan that you changed during. You can change that plan to another Medicare Advantage plan. You can only do that one time during oep. Okay. Or you can switch from one Medicare Advantage plan to a different Medicare Advantage plan. All right. So that's what I mean. So if you make the change. Let's say, as an example, you currently have a UnitedHealthCare Medicare Advantage plan.

Randy Sams:
And you make a change just because you don't know whether Baptist Health is going to be in that network. In 2024, but you make the change during. For December 7th of this year and you make that change. Then all of a sudden it could be sometime in January, could be sometime in February. You find out that you're not a health care. And Baptist Health were able to come to an agreement, and they signed a contract. And now Baptist Health will now be in the United Health Care Network. If you want to switch back to the original get Out of Health Care Advantage plan you had, you can do that during oep. All right. So I'm not trying to make it sound too complicated, but it's it's. It's wise for us to understand what we can do during and what we cannot do, and what we can do during oep. So in other words, oep doesn't mean that I can. You know, I missed step and I want to change my Medicare Advantage plan. No, you can only change your Medicare Advantage plan during open enrollment period if you made a change during an annual enrollment period. Does that make sense? Okay. So during Oaep, again, you cannot during the open enrollment period again, which is January 1st, 2024 to March 31st, 2024, you cannot do the following. You cannot switch from original Medicare to a Medicare Advantage plan. You cannot join a prescription drug plan if you are in original Medicare, and you cannot switch from one Medicare prescription drug plan to another if you are in original Medicare.

Randy Sams:
All right. So hopefully that kind of clears that up as to what you can and cannot do. So let's. Can I help you guys out during. I know that you folks that are on Medicare or about to be on Medicare, and if you're watching television at all, you're inundated by mailers telling you how great their Medicare Advantage plan is from don't XYZ company name a company, you're getting them in the mail all the time. You're seeing these advertisements on television telling you how great their Medicare Advantage plan is versus this plan. What we can do for you that we're going to give you money back, all kinds of stuff, folks, but I want you to give you a little heads up. You need to avoid scams during this year's Medicare AEP. All right. Avoid scams. And let's talk about a couple of them. Number one, the biggest scam that I think of. And again, this is me. This is Randy Sam's opinion. Tv ads. Why would you respond to a television ad? Don't you understand that what they're trying to do is they're trying to bait that hook, and they throw that out there like a lot of people say, well, but they they said that I can get money back from my part. B okay, I get part of my part B premium back. Well, folks, you remember the old adage you don't get anything for free.

Randy Sams:
The folks that I've known that that that swallowed that bait. And switched from their current Medicare Advantage plan to one of those plans that they advertise, where you get money back for your from your part B premium. Your benefits are a lot worse. All right. They don't give you as much coverage. Again, you're not getting something for nothing. You're going to give up something to get that back. So 90% of the time when I'm speaking to someone and they say they made a mistake. Luckily, if they made that mistake and they realized it early. After Epe, they can take advantage of Epe and switch back to the plan they had before or go to a different plan. All right. So and again. Just think about this, folks. So you might have purchased your Medicare Advantage plan from a television ad you called a toll free number and you spoke to a rep. Thatrillionef is not local. Where are they at? They could be anywhere in the United States. Or they could be offshore somewhere. All right. But what happens when you take that coverage out and it's not the same? Are you ever going to be able to talk to that same rep? No. What happens if you take the coverage out and you begin to have issues with utilizing your plan claims, whatever it happens to be? Are you ever going to be able to talk to that same rep? No.

Randy Sams:
Who are you going to talk to? You're going to have to talk to somebody from the company. That's why I always advocate because I am one myself and independent agent. You should always work with an independent agent when it comes to anything to do with your health plans. Medicare Advantage, Medicare prescription drug plans. Number one is because you can look at me face to face. You can call me up any time, and I can. I'm available to help you if we're having issues with claims. All right. Or if you've got questions on how to utilize your plan. If you've got questions, how much is my vision coverage? How much is my dental coverage? What does it cover? What doesn't it cover. So you can pick up the phone and call me anytime you want to because I'm local. But you can't call that toll free number and talk to Joe that you bought the plane from six months ago, because Joe may not be there anymore. All right. So that's the biggest scam that I say is these television ads. It's not my decision to allow them to run, but I know they've had a lot of problems with them in the past. Number two. Beware of unsolicited contacts, folks. Unsolicited contact. Is a prohibited activity. All right, I can't do that. You got to be cautious of unsolicited phone calls, emails or door to door visits offering Medicare related services. So, folks, if Randy Sams comes to your door knocking on your door, let's say one day decide just to drive into Bryant, Arkansas and pick out a nice looking neighborhood.

Randy Sams:
And I just leave my car. I parked my car on the side of the road, and I just go up and down the street, knocking on doors, introducing myself and asking people if you'd like to talk about Medicare Advantage. And that is prohibited. All right, so if any agent comes to you unsolicited, if you did not invite me or any other agent to come to your house or to make a phone call. That's unsolicited. Do this first. Get their information. If they're knocking on your door and you go to your door and they're sitting there with a big smile on their face, and they've got a flyer that they want to give to you and talk to you about Medicare Advantage. Do yourself a favor. Get their information, write it down and then close the door. Okay. Or if they call you on the telephone, do the same thing. Do not share personal or Medicare information with anyone who contacts you first. All right. Research the plans that you are thinking about. Again, that's why I say you need a local agent, that you can sit down and go over everything with. Protect your Medicare card, keep your Medicare card secure, and avoid sharing your Medicare number. Medicare cards no longer display Social Security numbers to enhance security. You remember the old Medicare plan? For Medicare cards had your Social Security number, just like our old Social Security, you know? So.

Randy Sams:
Anyway. Protect that trust and verify. Regularly. Review your Medicare statements for any discrepancies or charges you don't recognize. Again, if you have a local agent, they're going to be able to help you report any potential fraud to Medicare or your state's senior Medicare patrol. All right. So, folks, be aware that during this period of time, the biggest reason that we as agents are under the microscope is because unfortunately, you have some people out there that are trying to take advantage of you. Do your homework. Give us a call (866) 990-7664 and let us work with you. Or call your local agent. But don't get scammed by some of these people who are unsolicited and just reaching out and trying to get in contact with you and talk about these kind of plans. You got too many people here in central Arkansas that are willing to sit down and spend as much time with you as you need to make sure that you have a Medicare supplement plan or a Medicare advantage plan, or a prescription drug plan, or original Medicare, whatever fits your needs the best. There's too many of us as independent agents that are available and would love to sit down and spend some time with you and make sure that you get the plan that's best for you. So, folks, hey, 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.

When I think about. I think about. Love. Darling, I don't live without you.

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

Randy Sams:
You're listening to Your American Retirement. Join us every Saturday at 10 a.m. right here on 101.1 FM. The Answer where little Rock comes to talk. So, folks, hopefully you've been taking some good notes. We're going to talk about RMDs. You all know what RMD is. Guess we could come up with all kinds of different things. But really an RMD is known as a required minimum distribution. And this is my RMD reminder segment. All right. We're getting close to the end of the year. We're in the last quarter of 2023. And for those of you who may have already started or have been required to take RMDs, you know that you have to take that RMD if you've been taking them for more than a year. If this is not your first time to take it, you have to take that RMD by December 31st, right at the end of this year. You can't let it roll over to 2024 if you've already been taking them. But basically, for your information, for those of you who might want to know already, what is an RMD? A required minimum distribution is from the government. All right. That means if you have a qualified plan, if you have a plan that you have been growing tax deferred, say a 401 K plan, an IRA, a 403 B, whatever type of plan that you've been able to have during your employment years that has been accumulating tax free, you can let that grow for as long as you want to up to.

Randy Sams:
It used to be age 70.5 and then they required you to start taking withdrawals. Then they changed it to 72 now beginning in 2023. It's 73 years old. It's 73. Okay, so this year it jumped up to 73. And then it's going to jump up to 75. And I think in somewhere in the 2020 like 2030 some some 2033 2034. Don't hold me to that. But it's right around that age or that, that time frame. But I do know right now. That if you turned 73 this year. Then you can postpone taking that RMD until you have to have it by April of 2024 for this year's RMD. But guess what? If you postpone this one since it's your first RMD. To 2024, you still have to take that second RMD. Your 2024 RMD by the end of December 31st, 2024. Does that make sense? Okay, anyway, as we repro as we approach the end of the year, it's important to remember that the deadline for taking your required minimum distributions, I refer to them as RMDs, is fast approaching. That is December 31st. Missing this deadline could result in significant penalties, so be sure to mark your and prioritize this important Financial task before it's too late. Required minimum distributions for employer based retirement plans and traditional individual retirement accounts. Iras will be due December 31st for most people.

Randy Sams:
72 and older. Don't forget those distributions are taxable. With one exception. Excuse me. I think I may have told you earlier, so I made a mistake. It moved up to 72 this year. All right, so forgive me for that. So beginning this year, it jumped up to 72. But you have to have those RMDs taken care of from your employer based retirement plans and traditional IRAs by December 31st. Don't forget again, they're taxable. So with one exception, you must take your RMD by December 31st and went over this a little bit. When you turn 72, if you turn 72 this year, you have until April 1st of next year, 2024, to take your RMD and pay taxes on it. Okay, so years ago, Congress determined that it would give people a three month grace period on their first RMD. But you're also have to make another RMD by December 31st of that same year. So remember my basically what that's going to cause you to do. You're going to have to make two RMD payments in 2024, possibly pushing you into a higher tax bracket. That would mean that if you delay taking your 2023 because you just turned 72 this year. And you want to delay taking your 2023 RMD until next year. You can do that and delay it until April 1st of 2024, but you're going to have to turn right back around by the end of 2024.

Randy Sams:
December 31st, 2024. You're going to have to take another RMD. So that's two RMD withdrawals that you would have to take if you delay taking your first one into next year. So how can we say goodbye to RMDs and divest the IRS from your retirement plan? You can help with a by Roth conversion. You got tax free withdrawals, Roth IRA conversions or contributions are made with after tax dollars. So all withdrawals, including earnings or tax free in retirement. Flexibility. Unlike traditional IRAs, you're not required to take required minimum distributions ever. Packs. Diversity. Roth conversions provides you the ability to diversify your tax liabilities, allowing you to have access to both tax free and taxable income sources in retirement. So folks, how can we take your current 401? So let me give you an example of how we can do a Roth conversion. All right. So let's say let's say you just turned 60 years old and you have a 401 K and you don't plan on retiring anytime soon. Let's say, Randy, I'm going to work till I'm 68 years old, maybe even to age 70, okay, whatever that target might be. But right now, you're 60 years old, and because you're 60 years old, you just passed the 59.5. Remember, when you have a 401 K, if you withdraw funds out of that 401 K, except for special occasions, or there are certain things that you can do early, but we're not going to talk about those right now.

Randy Sams:
But let's just say traditionally you have a 401 K and you say, Randy, I'd like to be able to when I start taking money out for income, I'd like for it to be tax free. But if I start taking money out of my 401 K in eight years or ten years, I'm going to have to pay taxes on it. So how can I avoid that? Good question. So let's do a Roth conversion. So how do we do a Roth conversion. So let's say you have $400,000 in your 401 K account. I'm just using that as an example. It's going to be easy math. So let's take 400,000. In your 401 K you're still going to work. You're still going to make contributions. Your employer is still going to make contributions, employer percentage, whatever that might be. But because of what's known as the in-service distribution, you can look that up in service distribution. You can take all or a percentage, whatever you decide of your 401 K and roll that over into a different type of product. So we're going to take as an example, we're going to take $200,000. So we're not taking all your 400,000 from your 401 k. We're going to take half of it. So we're going to take half of your 401 K, 200,000. And we're going to put that into an annuity a ten year annuity.

Randy Sams:
That gives this the ability to make 10% withdrawals on an annual basis. And then we're going to begin what's known as a Roth conversion. So each year beginning with year one. We're going to take 10% of the money that's in that annuity, and we're going to roll that into the Roth conversion. Now again, so if we take $20,000 out of that annuity, which is 10% of 200,000, we're going to pay taxes on that. You can pay the taxes out of whatever you if you've got it from a savings account, anything. It doesn't have to come from that 20,000. It's just that whatever taxes are due on that 20,000, that's what you have to pay taxes on. Okay. That's what you have to pay. But we take that 20,000, put that into the Roth conversion plan, and we're going to do that each year. We have to do that for a minimum of five years before we can even consider taking money out. But let's say we do that. So we've taken that 200,000, we've put that into an annuity and we've been taking out 10%. We've been paying the taxes on it, and even though we're taking it out, we're putting it into the Roth conversion. It's growing tax free. So in eight years or ten years, when you've completely taken the money out of the annuity, put it all 100% into the Roth conversion. When you decide that you want to start taking payments from that Roth conversion, guess what? It's tax free.

Randy Sams:
But let's say you decide to leave it in there. So, Randy, I'm just going to let it continue to grow. Well, when you hit age 72 or age 73 or whatever it might be ten years from now, that age might be 75. You're NOtrillionEQUIRED to take those RMDs because you've done that Roth conversion now. The other 200,000 that you left in your 401 K, hopefully it's continued to grow. And when you start taking money out of that, or if you haven't taken money out when you hit that RMD age, you will be required to take funds out of that 401 K and pay those RMD taxes. Okay. So hopefully that kind of clears it up for you how we can take and take some of your money out of your qualified plan. Your 401 IRA, put that into an annuity and begin a Roth conversion to where later on down the road, you're not going to be responsible for RMDs, and you're not going to be required to take any funds out if you choose not to. Okay, so talking about 401 KS, do you have a stray 401 K. Do you know what a stray 401 K is kind of like a stray cat. Stray dog. No. Many people neglect to roll over the funds from a previous employer's retirement plan, creating what we call a stray 401 K or an orphan 401 K.

Randy Sams:
So savvy pre-retirees and retirees take the funds from the previous employees retirement plan and roll it over into an annuity or an IRA for more investment options and lower fees. So you can even establish a personal pension by purchasing an annuity with these funds. So set it and forget it is often not a good strategy. We help people manage their hard earned and hard saved money in a more efficient way that fits their needs. So folks, if you've left an employer, you may have been there for 1015 years and you have a 401 K, it could have a substantial amount and run into people all the time. And they say, Randy, it's just sitting there. I can't make contributions. My employer is not making contributions any longer since I'm not there. What can I do with it? We can take that that money. That's going to be, I guess, still susceptible to volatility in the stock market depending on what you have and invested in. We take that funds and we can put it into the annuity and set you up a guaranteed lifetime income stream. So folks. I want to thank you for listening to Your American Retirement. If you missed any part of today's show, go back in the podcast archives on Apple, Google, Spotify, or whichever platform you get. Podcasts. You go out and you have a great week. We'll talk to you next weekend. 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. A married life 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.

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