Stay Ahead of the Medicare Enrollment Period

9.29.23: Audio automatically transcribed by Sonix

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

Speaker1:
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.

Speaker2:
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.

Speaker3:
Well good morning. Hello again, Central Arkansas. Welcome to your American retirement. I want to thank you for joining me on this Saturday morning, the last Saturday of September. We got a jam packed show on tap for you today. And don't forget to check out the show on your favorite form of podcast, whether that be Apple, Google, Spotify again, or wherever you get your podcasts from. Also visit us on our YouTube page as well. Youtube.com is search for your American retirement. You'll see my smiling face. And as the Razorbacks play football again today against Texas A&M, I've got my Arkansas Razorback stuff on. So go hogs. So folks, I want to say hello to all my clients, all my listeners in Benton, Arkansas, Bryant, Arkansas, Saline County. Thank you for joining us. I've got a lot of good feedback from folks here in Saline County. Of course, you know, I'm located in in Benton, was born and raised in little Rock, Arkansas. As I was going to school in the great University of Arkansas in Fayetteville, my parents decided to retire and move to Benton. And, you know, I thought I was a big city boy growing up in little Rock until I had the chance to actually travel and actually see what a big city looked like, like Atlanta or New York or Los Angeles or Dallas, you can name them. So anyway, I want to thank all my folks, all my friends, all my clients in Saline County for joining us this morning.

Speaker3:
And for those of you, if you want to, for our listeners today, if you'll get in contact with me, you can receive our free report on tax free investments for a better retirement. We're all looking for that, right a better retirement. This report will help you make legal strategic investments so you can build tax free wealth. So this report is yours today. For those of you who are listening, if you'll just give me a call (866) 990-7664. Or you can go to the website Your American retirement.com. Leave me your contact information and say, hey Randy, I want that free report you spoke about on Saturday's show. Tax free investments for better retirement. So folks, people ask me. What we do at SMG financial folks. I've been in this business for 37 years now. I've seen a lot of changes come through the industry. I've had leadership executive roles in. Two very well known companies retired from that position from the corporate side in 2000. The end of 2014 and started SMG financial in 2015. Folks, we are focused kind of like what this show is about your retirement. All right. We live in America, so, hey, put them together. Your American retirement. That's what we do at SMG. We are focused on educating our clients, the people that we meet with. To make sure you understand what your options are. To make sure you understand what the risks are in retirement. So you will be able to put together a plan based on what you expect, what you need, what you want to make sure you have a safe and a secure retirement versus a risky retirement.

Speaker3:
So that, in a nutshell, is what we do at SMG financial. And part of that, folks. Is when we speak with folks, when we speak with our clients, when we have the free consultation. One of the things that we like to go over, especially if you're not 65, if you haven't hit the age of Medicare, or you may be past the age of Medicare, but you may still be working, but you plan on retiring very soon or within a certain number of years. And we want to talk about Medicare. So on the first part of today's show, we want to talk about Medicare. What is it? What are the options for Medicare. And when you're listening to this show, again, like I said earlier, this is the last Saturday of September. Tomorrow is October. In beginning October the 15th, we have the annual enrollment period. Some people refer to it as the Medicare open enrollment. So let's talk about that just for a little while. And then we'll go go over the annual enrollment period what it is and what you can some of the things you can do. And then we'll get into what Medicare is parts A, part B, and the different things. So anyway, Medicare open enrollment or as I refer to it, annual enrollment period.

Speaker3:
So it's every year Medicare's annual enrollment period is write this down October 15th through December 7th. So what is the annual enrollment period? So Medicare, health and drug plans can make changes each year. Things like cost coverage what providers and pharmacies are in their networks. So between October 15th to December 7th is when all the people in Medicare can change your Medicare health plans and prescription drug coverage for the following year to better meet your needs. So how do you know if you need to change your plans? Well, people listen. People in a Medicare, health and prescription drug plan should always review the materials their plans send them. So here you may have already received it, but very shortly you should receive something like evidence of coverage and annual notice of change if your plans are changing. So you should make sure that your plans will still meet your needs for the following year. If they're satisfied with your current plan, that your current plan will meet your needs for next year, it's still being offered. They don't need to do anything. So if right now today you have a you are on original Medicare, you have a Medicare advantage plan, or you have a prescription drug plan. And for some reason you're not happy with those plans. Maybe your doctor that has been in the network, maybe they're not in the network going into 2024, whatever it might be, you may be on a new medication and that medication may not be covered into your in your current prescription drug plan.

Speaker3:
All right. And you need to make a change. Well folks, those kind of changes you can switch from one Medicare Advantage plan to another Medicare plan. So you may have a Medicare Advantage plan with company X. And then you may see a Medicare Advantage plan with company A, and you may think Company A's plan is better. You can switch during October 15th through December 7th from your current Medicare Advantage plan to the other plan that you fit, you feel will meet your needs better than the current plan. All right, but you have to get it done between October 15th to December 7th. When can people when do you get your information about next year's Medicare plans? Information for next year's plans will be available beginning in October. So like I said, if you haven't already received something from your current plan about what changes or any, you know thing that they're making difference changes, there's going to be different going into 2024 than it was this year, 2023. That will be information will be given to you, and then you need to decide if you need to make a change or you're going to stay with who you have. So where can you find Medicare, plan information or compare plans? Pretty easy. You can call one 800 Medicare or go to medicare.gov and you can compare.

Speaker3:
Put in your location where you're at here in Arkansas, what city, what county you're in, and they will pull up automatically the plans that are available in your area. All right. So Medicare, I'm really surprised because I shouldn't be since I've been in the business for so long. But until you really get to the point where you need to make a decision on Medicare, do I stay with original Medicare? Do I go with a Medicare advantage? Do I have a Medicare supplement plan? Those are things that we are going to go over when we meet folks. I'm going to spend as much time as we need for you and or you and your spouse to understand exactly what Medicare Part A and part B, part C, part D is all about. All right, because we're making a decision that's going to affect you and your spouse for the remainder of your life through your retirement years. So we got to understand what the basics of Medicare is and refer to this as original Medicare Part A and part B. All right. So when you turn 65 or there are some other medical conditions or health conditions that you can get it earlier. But when you're 65, most people become eligible for Medicare at that age. Now if you're still working folks, if you're still working at age 65 and you don't plan on retiring, and your employer will allow you to stay on your current employer sponsored health coverage, and that's great.

Speaker3:
Because as long as you have what's known as credible coverage, it meets the requirements for Medicare for CMS. Then you can stay on your current plan. All right. So let's look at Medicare Part A very quickly. All right. Medicare Part A is hospital insurance. So Medicare Part A helps cover inpatient care in hospitals skilled nursing facility care hospice care and home health care. All right. That basically is part a in a nutshell. We can go into it a lot more detail. And we will probably in some of our upcoming shows, because I want everybody to be understanding what it is you're going to be making a decision on if this is your first time to go into Medicare, or if you're going to be making changes between October 15th and December 7th through. You need to be educated. Part B medical insurance 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, and many preventative services like screening shots, vaccines, or and including yearly wellness visits. All right. So folks, that's Medicare Part A and part B. So I hope you took some notes. We're going to go into a lot deeper. But you stay tuned because when we come back we're going to talk about the prescription drug plan part D and Medicare supplement. You're listening to your American Retirement on 101.1 FM. The answer?

Speaker2:
Are you interested in ways to protect and grow your hard earned money? Your American retirement is here to help. Visit your American retirement.com to schedule a free consultation with Randy today. And now back to the show.

Speaker3:
All right. Welcome back to your American retirement on 101.1 FM. The answer where little Rock comes to talk. Don't forget to check us out on your on our YouTube page, Your American retirement.com. So visit youtube.com and again, search for your American retirement. You'll see my smiling face. So folks, we just went over a little bit about what it is. It's from October 15th to December 7th. You have the ability to make changes to some of your Medicare plans, okay, Medicare Advantage prescription drugs, if you're on original Medicare and you want to go from that to a Medicare advantage. So there's a lot of things that we can talk about. We're not going to do it all today, but felt like over the next few weeks, the coming weeks, and probably into the open enrollment period or annual enrollment period, we're going to spend a little bit more time in depth on, you know, all the different types of coverages and what exactly they will do for you, what they can and cannot cover, what they will and will not cover. Because we don't like surprises, do we? So anyway, parts A and part B we just spoke about let's look at part D that is your prescription drug plan. Part D is 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 that's known as a Mapd Medicare Advantage prescription drug plan.

Speaker3:
Plans that offer Medicare drug coverage are run by private insurance companies that follow rules set by Medicare. All right. So we'll talk about that a little bit a little a little deeper here in just a little bit. But forget when it basically was. But under George Bush they they implemented the fact they made it. And I'm going to use the word mandatory okay. When I use that mandatory a lot of people get upset. But what they say is when you become eligible for Medicare Part A and part B, original Medicare, at that age, could it be 65? Could it be 68? Whatever that age is, they say that you are supposed to take a Medicare prescription drug plan, a part D plan, whether you need it or not, whether you're taking any prescriptions or not. They say that you're supposed to take it. You're supposed to purchase it. Now the reason guess the mindset behind that is they felt like if that everybody participated in prescription drug plans, that it would lower the overall cost. There are some people that get upset that they don't take many medications, or their medications are really not that that expensive on a monthly basis, but they just hate the fact that they're being told that you have to have a Medicare prescription drug plan. It's not me telling you, don't shoot the messenger. All right? But here's what happens. When you first become eligible for Prescription Drug Plan Part D, and you choose not to purchase a prescription drug plan a standalone prescription drug plan.

Speaker3:
All right. And later on in life, say, five years down the road and your health begins to deteriorate and you all of a sudden go from no medications or very few medications to a whole lot of medications. All right. And you decide, hey, it's probably going to be good for me to go get a part D plan a drug, a prescription drug plan. All right. Here's what's going to happen. You are going to pay a penalty for not enrolling in part D when you first became eligible. Now folks, that penalty is not a one time penalty. There's a formula. We'll go over that later on in a show later. You know upcoming show. But if you went five years without a prescription drug plan, then all of a sudden you said, I need to have one. You can enroll in a prescription drug plan, but starting then they will calculate. A penalty that you will pay for the rest of your life. It doesn't go away. It could be an additional $5 a month, could be an additional $1,520 a month, depending on how long you went without that prescription drug plan. All right. And that is just a penalty for not enrolling when you became eligible. So folks, here's what I do for my clients. If you are in good health right now, you're 65, 66, 67 years old, and you may not take any medications.

Speaker3:
And you said, well, Randy, I don't see why I need to have a prescription drug plan. The only reason I'm going to be able to give you is to avoid the penalty, the enrollment period, the late enrollment penalty later on in life. So we have prescription drug plans that are as little as $7 a month. All right. So it's worth making that $7 a month investment to avoid the late enrollment penalty later on in life. All right. So now. What if I've got original Medicare? Say Medicare part A, part D? And I'll want some help to pay for that. So what we have we have Medicare supplement insurance known as Medigap. I call it a med sub, but it's Medicare supplement insurance. This is extra insurance you can buy from a private company. That helps pay your share of cost in original Medicare policies or standardized folks, and in most states are named by letters. So you've got like a plan, a plan M, a plan F, a plan K. So the benefits in each of those plans, whether it be a plan G or a plan K, they are exactly the same no matter which insurance company sells them. All right. So a plan G is a plan G is a plan G. It doesn't make any difference what company you look. Look at. The plans are set. They're standardized. All right. But then people say well Randy, how come this company's plan G is this dollar amount.

Speaker3:
But this company's plan G is $50 less a month. Good question. That's called the internal expenses. That's they priced it that they felt like this is what their price needs to be. So that's why you need to get with someone like myself who is very familiar with Medicare, what's available, what it does and does not cover, and puts you in a plan that's going to fit your needs best, you and your spouse's need. All right. So we need to be able to make sure that if I can save $50 a month in premiums and the plans are exactly the same, why not save that $600 a year? All right, so when you go original Medicare with a Medicare supplement plan or a medigap plan, then what we do is we add a prescription drug plan with that. So that means you've got three cards, you've got your original Medicare Part A and part B card, and you've got your Medicare supplement card or your Medigap card, and you're going to have your prescription drug plan, because that could be your Medigap plan. And your prescription drug plan may not be by the same company. All right. Not trying to can confuse you. Just want to let you know what your options are. So. When you first sign up for Medicare. There are certain times during the year when you turn 65 or you know you're about to lose your employer covered health plan.

Speaker3:
You have a window of opportunity. All right. So your options are you can go to original Medicare which is part A and part B. You can join a separate Medicare drug plan that will be a standalone prescription drug plan. And you can use any doctor or hospital that takes Medicare anywhere in the US. That's why a lot of people like to do original Medicare with a Medicare supplement plan. So folks, Medicare Part A and B. If if we use. I'm going to make this simplistic, okay. Just look at Medicare Part A and part B as an 80% plan with 20% being your responsibility. All right. Sometimes it doesn't cover 80%, but I'm just using that for simple math so you can illustrate it in your mind. So if you have $100,000 hospital bill didn't take long to run up $100,000 in a hospital nowadays, but $100,000 hospital bill. And you've got Medicare Part A and B only. And it covers the 80%. That means they're going to take care of the $80,000, but who has to take care of the other 20%? That would be you or me. All right. So that's why people look at a Medicare supplement plan. Because a Medicare supplement plan, depending on which letter, which plan you choose. You're supposed to take care of that additional 20%. Now, there are co-pays sometimes and deductibles that are included in that. We'll go over that later on. All right. But just simple Medicare Part A, B 80% Medicare supplement should take care of the majority of the other 20%.

Speaker3:
Then you have a standalone prescription drug plan. Or your other option is to go with a Medicare advantage plan, also known as part C. All right. So 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. So in most cases you'll need to use doctors who are in the plans network. Remember, with original Medicare Part A and part B, you can go to any doctor that takes Medicare anywhere in the United States. Medicare supplement is the same way. But when you choose a Medicare Advantage plan. Most of the time. The majority of the time you'll need to use doctors who are in the plans network, and that's great if your doctors and hospital are in their network, that's great. But if you do a lot of traveling, what happens if you become ill? Now they cover emergencies, but that's something to think about. So plans may have lower out-of-pocket costs than original Medicare. So with a Medicare Advantage plan, folks. You have a maximum out of pocket expense. M o p maximum out of pocket. It could be $6,500. It could be 5000, depending on what plan you choose. Okay. What provider you choose. But it gives you the peace of mind knowing that if I have a $200,000 hospital bill now, my out of pocket expenses are going to be capped at whatever that maximum is 6000, 7000, 5000.

Speaker3:
All right. But you have copays that you pay when you have a Medicare advantage plan. All right. But the Medicare Advantage plan may also offer some extra benefits that that original Medicare doesn't cover. Like most of the Medicare Advantage plans that I see today, they offer a vision. Benefit, a hearing benefit and also dental services. So a lot of them will allow you to go get your eyes checked once a year. They'll pay for eyeglasses frames up to a certain dollar amount. You can go get your hearing checked. Say what I said, you can go get your hearing checked once a year and some of them have dental benefits, all right, that are included in the base plan. Some of them offer a dental benefits above and beyond that, a separate dental plan. But the majority of your Medicare Advantage plan have some type of dental benefit, i.e. they're going to pay you to get x rays once a year and to get your teeth cleaned. All right. But some of them have additional benefits up to like $1,000, $1,500 a year that you can use. For your coverage. So folks, that's going to cover it for Medicare. Come right back. We're going to talk about the Cola increases and Medicare Part B increasing for next year 2024. We'll be right back. You're listening to your American retirement.

Speaker2:
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. And.

Speaker4:
If inflation and living expenses are putting more of a financial strain on your bottom line, it may be time to explore canceling those unnecessary subscriptions. I'm Jim Tarabanko with the Retirement Radio Network, powered by a mirror life. In recent years, streaming and subscription services have dominated the digital space, according to a survey done by Chase Bank in February of last year. The study found that a whopping 71% of Americans waste over $50 a month on unwanted subscription fees, and it's becoming increasingly harder to cancel these subscriptions. Meanwhile, the Federal Trade Commission proposed a provision back in March targeting the struggles of customers to cancel their unwanted subscription payment plans. Under this new proposal, titled Click to Cancel, the sellers would face a requirement to make subscription cancellations as simple and as straightforward as possible. Axios technology reporter Ashley Gould was a guest recently on CBS news Moneywatch to break down this new proposal.

Speaker5:
Those little prompts you see that are like, are you sure you want to cancel? We can offer you this deal. We can offer you that deal or to cancel, you actually have to call us between these business hours or to cancel. You just show up in person and tell us why none of that's going to be allowed anymore. If what the FTC wants to do passes in its final form.

Speaker4:
So in the meantime, how can you keep your subscription prices from slashing further into your own personal bottom line? Review all of your monthly subscriptions from every sector on every device, and cancel the ones you don't need. Useful tools like Rocket Money and Pocket Guard can help you track down these unwanted subscriptions and clear them from your monthly expenses. Cutting back on your monthly subscriptions. It's an important factor to consider, and it's part of our 23 Retirement Cost Cutters of 2023 for the Retirement Radio Network. Powered by a life. I'm Jim Tarabukin.

Speaker2:
This part of today's show, Your American Retirement, is available wherever you listen to podcasts and online at your American retirement.com.

Speaker3:
Hey, thanks for joining us on this week's edition of Your American Retirement. Be sure to check out the podcast version of my show on Apple, Google, Spotify, or wherever you get your podcasts. So, folks, we've been talking about Medicare. We've been talking about the annual enrollment period, and a lot of you already have Medicare. You may have a Medicare supplement plan, you may have prescription drug plan. You may have a Medicare advantage plan. Well, the majority of you that are listening today, you also have Social Security. And there are going to be changes that are going to be implemented in 2024. So let's talk about those for a little while. How much is your Medicare Part B premium increasing next year. And what about that Cola increase for 2024. All right. So. As you know, the Social Security Administration annually assesses Medicare financial reports. Next year we will see alterations. In Medicare premium costs, with Medicare Part B expenses anticipated to rise, while Medicare Part D that's the prescription drug fees are predicted to decrease. So annually, the Social Security Administration assesses the financial aspects of the Medicare plan every year they do this. It then adjusts premiums and deductibles based on regulations outlined in the Social Security Act. While the Cola increase 2024. Will also lead to rising fees and payments and payouts in the USA. All right. So Cola increase in 2024 will lead to rising fees and payouts in the USA. Cola, as you all know stands for cost of living adjustment and is the way in which our government, US government calculates the cost of certain services.

Speaker3:
So with the Cola expected increase in 2024. Is around 3%. Could be a little bit less, maybe a little bit more. But the expected Cola increase for 2024 is expected to be around 3%. Now. How much is your Medicare Part B increasing in 2024? Now see, last year when we did this show we got to talk about a part B premium decrease. Because your part B premium for 2023 decreased where 2024 we're going to have an increase. All right. So due to the introduction of a new Alzheimer's disease a treatment called the Kimba may have pronounced that wrong. But it was developed by pharmaceutical companies Eisai and Biogen. Medicare beneficiaries are expected to shoulder a portion of the associated cost. Hello. That would be all of us that are on Medicare. Okay. Consequently, Medicare Part B premiums are expected to increase in 2024. Y'all got a pen? Y'all ready? The projected uptick or increase will see the cost rise from the current. $164.90 per month. Two, $174.80. All right. So we're going to jump from 164 $9,164.90 currently per month for part B premium. It's going to go up to $174.80 per month. That represents nearly a $10 monthly hike. Let's talk about a decrease though. Good news part D, which is your prescription drug? Playing art. So if you have a standalone prescription drug plan, it says you may have a decrease in 2024.

Speaker3:
So although the disparity in medical and Medicare Part D expenses may not be substantial, it is poised to have a decrease in 2024. So according to CMS, that's the centers for Medicare and Medicaid Services. The average total monthly part D premium is anticipated to drop from $56.49 in 2023 to $5055.50 in 2024, basically. It's going to be a it's not very much of a decrease, is it? So your anticipated drop is from $56.49 in 2023 to $55.50, so I'd like to say that was a $10 reduction each month. But it doesn't it doesn't sound that way, does it? Okay. What is that about a dollar? Decrease. So not a big one. But the the reduction can be attributed to premium stabilization, primarily stemming from the Inflation Reduction Act, which restructured Medicare Part D and established a mechanism to curtail premium increases for those of us who have part D. All right, so folks, when I saw the that's the average total monthly part D premium, folks, $56.49 a month is going to drop to $55.50 a month. That's still expensive. All right. So if you're now that's the average. So that tells me that there's plans that are what less. And there are plans that are more expensive. Well folks here in Arkansas, I'm not aware of a lot of plans that are, you know, very much higher than that. I'm sure there are. But the majority of the plans that we deal with, even your what you would call your premium plans, your premier plans, probably going to be in the 50 to $60 range.

Speaker3:
And that's going to be your maximum, not the average here in Arkansas. But I've got plans out there, like I said earlier, that are as little as $7 a month. But again, does a $7 a month plan fit everybody? No, those are going to be the plans that I'm going to suggest to folks that may not be taking medications now or taking very few medications. With very little out out-of-pocket expenses, but they want to avoid that late enrollment penalty later on in life. If something happens or something changes and they have to take more medication. All right. So, folks. Can expect a what looks like Arcola increase going into 2024. Is going to be around 3%. It looks like our part B Medicare Part B premium increase for 2024 is going to be around $10 a month. So you're going to jump back up to around $175 a month. For your part B premium. And folks, you pay that part B premium. Whether you have original Medicare alone or whether you have original Medicare with a Medicare supplement plan, or whether you have a Medicare advantage plan, that part B premium is going to be paid. All right. Now let's do this. I got a lot of good comments. Last week we implemented again. We played right or wrong.

Speaker2:
Come on down as we test your financial knowledge in right or wrong.

Speaker3:
So let's do that on today's show. Hopefully we've had some people that have been paying attention on the last couple of shows. So. Let's test your financial knowledge. Question number one. The Social Security trust fund. Oh, ISI that's old age anyway, is estimated to be depleted by 2033, which is one year shorter than the previous projection. Is that right or is that wrong? That is correct. The Old Age and Survivors Insurance OAS Trust Fund will be able to pay 100% of total scheduled benefits up until 2033, which is one year earlier than reported last year. So at that time, the fund's reserves will become depleted and continuing the program. Income. The continuing program income will be sufficient to pay 77% of scheduled benefits. Now folks, this comes from ssr.gov. All right. So why are we having those changes folks. When Social Security was created back in the 1930. For every beneficiary. For every one beneficiary. I believe you had five workers that were paying into it. It might even been seven, but let's just say five to be conservative. So for every one beneficiary, you had five people paying into it. All right. Today, for every one beneficiary that you have, that will be folks that are receiving Social Security benefits. You have two workers that are paying into it. So you see the big difference. We have fewer people working. Why? Good question. So few people are working. Fewer people are paying into it.

Speaker3:
Now, question number two. You really don't have to plan your retirement income until you retire. Now, folks, this is an easy one. That is wrong. Preparation equals success. So prepare now. Retirement planning is about securing a comfortable and fulfilling future. By setting achievable financial goals, building a nest egg, managing investment wisely, and accounting for various aspects of retirement life. It empowers individuals to enjoy their golden years with confidence and peace of mind. What is it that I've told you every time we open a show? What is it that we do at SMG? We like to educate our clients on what they're going to face, the financial risk, what they will face in retirement. And we want to prepare you. For a safe and a secure retirement. Not a risky retirement. So you really don't want to wait until you're about to retire to start planning for retirement? All right. You need to call us (866) 990-7664 or go to your American retirement.com and leave us that information as. Hey, Randy, I want to take advantage of that free consultation with you. And let's sit down and get a retirement plan set for me and my spouse today versus later on in life or when it's too late to start. All right, number three. Only two tax free investments are available to American investors are life insurance and Roth IRAs. So are there only two tax free investments available? Are they life insurance and Roth IRAs? That is correct.

Speaker3:
Roth IRAs are tax exempt, which means that they qualify. The qualified distributions are free of taxes and penalties. You will only pay. We will only be taxed on your contributions. So when you set up a Roth IRA, if you're taking money from a 401 K or any kind of a qualified plan, and you want to put that into a Roth IRA, you can do that, but you've got to pay the taxes that are due right now up front. But as it grows over the years, from that point in time, it grows tax free. And you can withdraw that money tax free. All right. So life insurance proceeds are generally tax free for the beneficiaries. The death benefits, meaning the beneficiaries do not have to pay federal income tax on the death benefit they receive from a life insurance policy. This applies to both term and permanent life insurance policies. So many people think municipal bonds are tax free. That's not true. But that's not the case because municipal bonds contribute to Medicare surcharges. Okay, so folks, most people believe taxes will go up in the future because of national debt and government spending policies. I'm going to give you that answer when we come back. So again, make sure you come back and we're going to get the answer to that question. Our tax is going to go up. You're listening to your American retirement on 101.1 FM. The answer.

You got to think about you I.

Speaker6:
Just can't live without.

You. I really want you. Let me.

Speaker6:
Your looks intoxicate me.

Speaker3:
A welcome, folks. 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, we finished up the Right of Wrong segment and we talked about the last question was our taxes going to go up? Of course they are. All right. That answer that that is right. If you said the question the answer to the question is taxes will go up. You are correct. All right. So. We need to start planning now. Tax cuts are expiring after 2025. So listen to this now. Very important. The Tax Cuts and Jobs Act that's tcja commonly known as the Trump tax cuts. I know a lot of y'all don't believe that. But President Trump did a great job cutting taxes and increasing what you were able to take home every month, every year. Okay. But those tax cuts are set to expire after 2025. So retirees who typically rely on fixed incomes experienced a relatively minor impact when the Tcja was first introduced, because it did not affect the taxation of social security and investment income, but. All seniors will soon need to reevaluate their financial plans and tax strategies as standard deductions, state tax deductions and charitable contribution deductions. Return to pre Tax Cuts and Jobs Act levels on January 1st, 2026. So folks newsflash. Who you vote for in 2024. Presidential election November 2024 will have an effect on your taxes.

Speaker3:
And your retirement. Standard of living. All right. So do you think that the current administration is going to lower what was in effect through Donald Trump's tax cuts? No you don't. Or do you think they're going to increase it? They love to get that tax money, don't they? So remember this when you hit that little switch I know we've got over a year to go. But again forget who was it that said this. But elections have consequences. So remember that who you vote for in November 2024 will have an effect on your taxes and your retirement standard of living. All right. So now let's look at this. The expiration of the Tax Cuts and Jobs Act. That's the Tcja can have significant implications for both retirees and pre-retirees in several areas. Let's talk about some of those tax rates and deductions. Tax rates may revert to pre tcja GJ sorry tcja levels potentially resulting in higher taxes for individuals, including retirees with fixed incomes and pre-retirees planning their finances. Standard deductions may decrease, affecting the amount that can be claimed and potentially resulting in a higher taxable income. It's going to have an effect on your retirement. Estate taxes. The estate tax exemption may decrease, potentially affecting the ability to transfer wealth tax free to heirs. This change could impact could impact estate planning strategies for retirees and pre-retirees with sizable estates.

Speaker3:
Now, folks, most of the people that I deal with. Do not have to worry about estate tax because the estates that you are going to leave, leave. To your families, to your children, to your grandchildren. Probably are not in the multiple millions. All right. I'm not saying anything. Folks. Mine. Mine aren't. All right, so when I pass away, unless I hit the lottery. Uh, I'm not going to have to worry about my children worrying about estate taxes. All right. Even though I may have a what I consider a, you know, a. A decent amount. It doesn't come close to the to the amount for the estate taxes to kick in, at least not right now. But if that changes, it could. So if they lower that amount, then that can affect what you leave to your kids and what they're going to have to pay in taxes. Some people want it to be 50%. All right. So let's just say you have $10 million. And some people are going to say, well, you know, 10 million. If you have worked your butt off all of your life and you've done a great job with your retirement funds, and you leave $10 million to your children as your estate, do you want them to have to pay 50% of it to the government? Of course not. That's not fair.

Speaker3:
It's not right. But again, not trying to get political, but let's go on to the next one. Charitable contributions. How many of y'all give to your church? How many of y'all give to, you know, organizations like during the tornado we had earlier in little Rock? How many of you all donated to Red cross or whoever it might be a local charity that was helping the people that were affected by the tornadoes that happened in March. All right. So charitable contributions, changes in deductions may influence the incentive for charitable giving, potentially affecting charitable organizations that seniors and pre-retirees often support. If deductions are reduced, it might impact the resources available for charitable activities. Okay, so what you're giving to your church right now, if you get that little notice at the end of the year saying, this is how much you gave to the church, and you're able to take all of it off, that's great. But what if they change that and you can't take it all off? Is that going to reduce what you give to your church? That's your decision. Okay. What if you're giving to the Red Cross or Goodwill, whoever name a charity. All right. The Cancer Society, the Heart Society, whatever it might be, if they change the contribution limits. Charitable contribution limits. It could affect some of these charities. Okay, so how about financial planning? So retirees and pre-retirees may need to revisit your financial plans considering potential changes in tax liabilities, deductions and estate planning strategies post Tcja expiration.

Speaker3:
That's why you need to call us (866) 990-7664, or go to your American retirement.com and leave us your information. And let's get a retirement plan in place. Where? We've got you covered. Day and in the future 2025, 2030, whatever it might be. All right? Budgeting and spending potential tax increases may require retirees to reassess their budget and spending habits to accommodate higher tax payments. So, folks, if your taxes go up, that's less money you're putting in your back pocket. And you know that the money that you retired on five years ago does not have the same buying power today as it did five years ago. So they're taking more of your retirement funds away. That means you're living on less and less and less. All right. So investment and income strategies. Changes in tax rates and deductions could influence investment and income distribution strategies for retirees, prompting them to reevaluate their portfolio allocation and withdrawal plans. Folks, this is where withdrawal risk comes into play. Okay, if the tax rates and deductions begin to influence your investment and the income distribution, if you've got a 401 K or an IRA, you've got your money in the stock market. Withdrawal risk is those people who are stressed out because they're concerned about withdrawing too much money.

Speaker3:
They're concerned about their retirement account hitting zero before their blood pressure does. That's what we do at SMG financial folks. We're going to make sure that we put you into a plan that fits your needs, fits your wants, and makes sure that you and your spouse are guaranteed an income for as long as you or he she lives. That's peace of mind. Folks, that's called a secure retirement, not a risky retirement. Now we talk about Social Security and other benefits. So a shift in tax rates could indirectly impact the taxation. Of Social Security benefits and other retirement benefits influencing the overall retirement income for seniors. So folks, that is what happens. We got to start planning now. All right. You got to start planning now for what's going to happen in the future. So we know that in 2025, Donald Trump's tax cuts are going to go away. And whoever has the white House at that time is going to decide whether or not those tax cuts continue or whether they are done away with. And your taxes go up more and more and more. All right. So. Remember this folks, retirees and pre-retirees should seek guidance from a financial advisor retirement planner like myself to help navigate the changing tax landscape. So we got to adjust your investment strategies. We got to optimize your financial plans accordingly. So call us at (866) 990-7664 or go to our website, Your American retirement.com and leave us your information.

Speaker3:
Because we want to be able to help you set yourself up for a secure retirement, not a risky retirement. How many times have I said that on today's show? You're going to hear me say it over and over, because that's what we do at SMG financial folks. Very quickly, I want to tell you a little story. We had a gentleman that I want to tell you about as we were able to help out. Very quickly, I'm not going to go into much detail, but this gentleman was one of our listeners. He called us because he was concerned he was too heavily invested in stock. Okay. So we worked with him. We took some of his stock money. We put that the stocks, we sold those, he sold those. We put that into a guaranteed lifetime income annuity. Left the rest of it alone. He put 75,000 into a guaranteed lifetime income annuity that in ten years, guaranteed him an income for the rest of his life, $33,000 a year. And that's income that he will never outlive. So, folks, thanks 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. Have a great week. We'll talk next weekend. God bless and go hogs.

Speaker2:
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 your American retirement.com today. That's your American retirement.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 merry 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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