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A Woman’s Guide to Health Care in Retirement

At any age, health care is a priority. But when you retire, you should probably focus more on health care than ever before. That’s why it’s particularly important for women to factor in the cost of health care, including long-term care, as part of their retirement plan.

How much you’ll spend on health care during retirement generally depends on a number of variables including when you retire, how long you live, your relative health, and the cost of medical care in your area. Another important factor to consider is the availability of Medicare. Generally, you’ll be eligible for Medicare when you reach age 65. But what if you retire at a younger age?

You’ll need some way to pay for your health care until Medicare kicks in. Your employer may offer health insurance coverage to its retiring employees, but this is the exception rather than the rule. If your employer doesn’t extend health benefits, you may be able to get insurance coverage through your spouse’s plan. If that’s not an option, you may need to buy a private health insurance policy (which could be costly) or extend your employer-sponsored coverage through COBRA.


As mentioned, most Americans automatically become entitled to Medicare when they turn 65.

In fact, if you’re already receiving Social Security benefits when you’re 65, you won’t even have to apply—you’ll be automatically enrolled in Medicare. However, you will have to decide whether you need only Part A coverage (which is premium-free for most retirees) or if you want to also purchase Part B coverage.

Medicare Part A, B, C

Part A, commonly referred to as the hospital insurance portion of Medicare, can help pay for your inpatient hospital care, plus home health care and hospice care.

Part B helps cover other medical care such as physician services, laboratory tests, and physical therapy.

➢ You may also choose to enroll in a managed care plan or private fee-for-service plan under Medicare Part C (Medicare Advantage) if you want to pay fewer out-of-pocket health-care costs.

And if you don’t already have adequate prescription drug coverage or belong to a Medicare Advantage Plan, you should consider joining a Medicare prescription drug plan offered in your area by a private company or insurer that has been approved by Medicare.

Unfortunately, Medicare won’t cover all of your health-related expenses. For some types of care, you’ll have to satisfy a deductible and make co-payments. That’s why many retirees purchase a Medigap policy.


Unless you can afford to pay out of pocket for the things that Medicare doesn’t cover, including the annual co-payments and deductibles that apply to certain types of services, you may want to buy some type of Medigap policy when you sign up for Medicare Part B.

➢ In most states, there are 10 standard Medigap policies available. Each of these policies offers certain basic core benefits, and all but the most basic policy (Plan A) offer various combinations of additional benefits designed to cover what Medicare does not.

Although not all Medigap plans are available in every state, you should be able to find a plan that best meets your needs and your budget.

When you first enroll in Medicare Part B at age 65 or older, you have a six-month Medigap open enrollment period. During that time, you have a right to buy the Medigap policy of your choice from a private insurance company, regardless of any health problems you may have. The company cannot refuse you a policy or charge you more than other open enrollment applicants.

Long-term care

Long-term care refers to the ongoing services and support needed by people who have chronic health conditions or disabilities. Long-term care can be expensive. An important part of planning is deciding how to pay for these services.

Buying long-term care (LTC) insurance is an option. While premiums may be costly, having LTC insurance may allow you to elect where you receive your care, the type of care you receive, and who provides care to you. Many LTC insurance policies pay for the cost of care provided in a nursing home, assisted-living facility, or at home, but the cost of coverage generally depends on your age and the policy benefits and options you purchase. And premiums can increase if the insurer raises its overall rates.

Even with LTC insurance, you still may have some expenses not covered by LTC insurance.

For example:

➢ Not all policies provide coverage for care in your home. While the cost of in-home care may be less than the cost of care provided in a nursing home, it can still be quite expensive.

➢ Most policies allow for the selection of an elimination period of between 10 days and 1 year, during which time you are responsible for payment of care.

➢ The LTC insurance benefit is often paid based on a daily or monthly maximum amount, which may not be enough to cover all of the costs of care.

➢ While lifetime coverage may be selected, it can increase the premium cost significantly, and some policies may not offer that option. Another option that can be valuable, but also increase the premium expense considerably, is cost-of-living or inflation protection, which annually increases the daily insurance benefit based on a certain percentage.

➢ Most common LTC insurance benefit periods last from 1 year to 5 years, after which time the insurance coverage generally ends regardless of whether care is still being provided.

To encourage more individuals to buy long-term care insurance, many states have enacted Partnership programs that authorize private insurers to sell state-approved long-term care Partnership policies. Partnership policy owners, who expend policy benefits on long-term care services, will qualify for Medicaid without having to first spend all or most of their remaining assets (assuming they meet income and other eligibility requirements).

Medicaid and government benefits

Government benefits provided primarily through a state’s Medicaid program may be used to pay for long-term care. To qualify for Medicaid, however, assets and income must fall below certain limits, which vary from state to state. Often, this requires spending down assets, which may mean using savings to pay for care before qualifying for Medicaid.

If you are a veteran, you may be eligible for long-term care services for service-related disabilities and for other health programs such as nursing home care and at-home care through the Department of Veterans Affairs (VA). If you don’t have service-related disabilities, you may also be eligible for VA benefits if you are unable to pay for the cost of necessary care. Visit the Department of Veterans Affairs website ( for more information.

Other health-care factors to consider

It’s clear that health care is an important factor in retirement planning. Here are some tips to consider:

➢ Evaluate your present health and project your future medical needs. Considering your family’s health history may help you determine the type of care you might need in later years.

➢ Don’t presume Medicare and Medigap insurance will cover all your expenses. For example, Medicare (Parts A and B) does not cover the cost of routine eye exams, most eyeglasses or contact lenses, or routine hearing exams or hearing aids. Include potential out-of-pocket costs in your plan.

➢ Even if you have Medicare and Medigap insurance, there are premiums, deductibles, and co-payments to consider.

You may have already begun saving for your retirement, or you could be retired already, but if you fail to include the cost of health care as a retirement expense, you’re likely to find that health-care costs can sap retirement income in a hurry, potentially leaving you financially strapped.

Need help with your insurance and retirement planning? Click here for a no-obligation planning session. Our goal is to help make sure health care expenses do NOT deplete your hard-earned life savings! We’ve helped hundreds of women in the Los Angeles community against this growing problem.


VIDEO: Are Soaring Health Care Costs Hurting the U.S. Economy?

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Five Things to Watch Out for When Buying Long-Term Care Insurance

You’ve researched long-term care insurance (LTCI) and are seriously thinking of buying a policy. Just make sure you’re doing it for the right reasons–don’t be swayed by unsubstantiated sales pitches. Here are some claims you’ll want to think twice about.

A long-term care policy is a great tax write-off

Though it’s true that premiums paid on a tax-qualified LTCI policy can reduce your tax burden, you must itemize deductions to be eligible. When you’re older, perhaps you’ll no longer itemize deductions. And even if you do, LTCI premiums fall under the write-off for medical and dental expenses, which is limited to expenses that exceed 10 percent of your adjusted gross income. So, for example, if your adjusted gross income is $60,000, you are able to deduct only that portion of your unreimbursed medical and dental expenses (including LTCI premiums) that exceeds $6,000.

And there’s another caveat. Even if your LTCI premiums exceed 10 percent of your adjusted gross income, you can’t include all of the premiums in your deduction for medical and dental expenses. Instead, your premiums are deductible according to a sliding scale that depends on your age. So what might look like a great tax write-off at first glance may not be so great after all.

Note: The threshold is 7.5 percent for those age 65 and older until 2017, at which time it increases to 10 percent.

You should buy a policy now so you can lock in the price forever

With most LTCI policies, your age at the time you purchase the policy is a factor in determining your premiums. However, this doesn’t mean that your premiums will stay the same as long as you own the policy. In fact, your premiums can increase if your insurance company establishes a rate increase for everyone in your class, and that increase is approved by the state insurance commissioner.

As a relatively new type of insurance, LTCI may be particularly susceptible to rate increases, because insurance companies lack a sufficient amount of underwriting data to predict the number and size of claims they can expect in the future. And unfortunately for you, if your insurance company does raise your premium, it may not be so simple to take your business elsewhere. Any premium on a new LTCI policy will still be based on your age, which will be higher, and your health, which may be worse. So no matter when you buy your policy, make sure you can afford the premiums both now and in the future.

It doesn’t matter how the policy defines “facility”

Currently, there are no national standards on what constitutes a long-term care facility. This means that an “assisted-living facility” or “adult day-care facility” may mean one thing in a particular policy or state and another thing in a different policy or state. This can pose a problem if you buy the policy in one state and then retire to another state–there may be no facilities in your new state that match the definitions in your policy. To protect yourself, make sure you understand exactly what types of facilities the LTCI policy covers before you buy it.

It’s not necessary to check the financial rating of the insurance company

A large number of unexpected long-term care claims could potentially devastate an insurance company that isn’t financially strong. So before you buy an LTCI policy, it’s always a good idea to check the company’s financial rating by using a rating service like Standard & Poor’s, Moody’s, A. M. Best, or Fitch. You can also check with your state’s insurance department for more specific financial information on particular companies.

You should get rid of the policy you have now and buy a new one

Although in some cases a new LTCI policy might have an attractive added benefit that your old policy doesn’t, red flags should go up if an insurance agent encourages you to ditch your old policy for a new one without providing a clear explanation of the added benefits. For one thing, your premiums are based on your age and your health at the time you purchase the policy, so all other things being equal, your new policy will be more expensive. For another, you run the risk that a pre-existing condition won’t be covered under the new policy.

If you’re unhappy with your current policy, an alternative may be to upgrade it rather than replace it (though the agent earns a larger commission if you replace it). Unfortunately, there are unethical agents who make misleading comparisons of LTCI policies in an attempt to get you to switch policies for no reason other than their commission. If you’re considering switching policies, make sure you understand exactly what the new policy offers, whether this additional coverage is important to you, and what you’re giving up.


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Inflation Trends 101

When it comes to investing money in the stock market, there are no guarantees.

Even financial experts, who have devoted every waking hour to understanding the market, cannot promise a return on investment. If they could, they would never have to work another day in their lives. Instead, many experts look at many factors to try and anticipate what might happen, and then they invest accordingly.

Inflation is a Major Concern for Many Investors

This can be a tough reality for new investors who are trying to make a decent return on their retirement savings. Add elements like inflation to the mix and you may end up with people who don’t know what to do.

In fact, a recent report by the Society of Actuaries showed that 69 percent of pre-retirees polled cited inflation as a key concern – tied with long-term care.1

Stay Calm, Get the Facts

First thing’s first: don’t panic! People who panic are often vulnerable to bad advice and sometimes shady advisors who put their profit over yours.

➢ Here’s a smart rule to follow: learn as much as you can about your investments and the market, so when you talk to an advisor you understand how your money is being allocated.

It’s Anyone’s Guess!

If you’re keeping up with the financial news, you’re probably seeing a lot of speculation about whether or not inflation will rise. As with the stock market, there’s no guarantee when or if it will – there is just speculation based on many factors.

↳ For long-term investments, a diverse portfolio with stocks can be a good hedge against inflation. In the short-term, you may want to also consider bonds; this is because as inflation rises, you may be able to take advantage of climbing interest rates.

↳ Commodities, like gold, may also be an option for short-term investing. But, for long-term investments, their track record for performance has not been ideal. Gold has returned only 0.7 percentage point per year more than inflation over the past two hundred years2 – you can get a higher return than that with a simple savings account.

Talk to Your Advisor Regularly

The message here is that it’s important to understand the market and be sure your advisor is keeping up with current trends as well as your retirement goals. You should make sure your advisor reviews your portfolio if inflation does rise to be sure you adjust your investments to stay on target for your goals.

Remember, you can’t get a second opinion from the same advisor who gave you the first!


Inflation aside, it’s always a good idea to talk with your advisors at least twice yearly as you get closer to retiring. Never leave a meeting with unanswered questions or confusion – a good advisor will make sure you understand how your money is being invested, what fees you’re paying and the strategy he or she is employing in helping you plan your retirement income streams.




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One of The Worst Retirement Advice You Can Get (And The Secret to Spotting It)

Imagine saving your whole life for retirement. You sacrifice a better car, summer vacation and all the other bells and whistles your friends seem to be enjoying all in the name of a secure retirement.

You have accumulated a nice little nest egg – one big enough to afford you a comfortable, work-free lifestyle.

Now it’s time to retire. You might have to roll over your employer-sponsored 401k into an IRA. You have to figure out your budget and how much to withdraw each month. These are typical decisions retirees must make.

But then you get bad advice. Very bad advice.

The Mistake That Can Cost You Everything

Here’s where it all goes downhill: you talk to a financial advisor who tells you to put your money into XYZ investment. It’s great for the advisor, because XYZ has high commissions and high fees – so they are getting a nice little check from your money. The problem is that XYZ investment is a high risk stock – which means, if you’re retired, you have no time to recover from losses.

The 401k Rollover Crisis

This one bad investment decision is not unusual for so many Americans. They end up in the wrong advisor’s office and, with the stroke of a pen, lose their entire retirement savings – or a very big chunk of it. Now, you have to go back to work – without any chance of rebuilding what you worked so hard to create.

In fact, Vanguard founder Jack Bogle recently said that bad advice while rolling over 401ks is one of the top three retirement crises.1


The Fiduciary Rule

We talked about the Fiduciary Rule here, in one of our recent articles. This rule, adopted by the Department of Labor, requires financial advisors to put their clients’ financial well-being above their own. This means if there’s a better product for the client, but less commission for the advisor – the advisor will recommend that product.

➢ However, just because this rule is in place doesn’t mean you should get complacent.  

How to Spot Bad Financial Advice

  1. How Is Your Financial Advisor Earning Money?

Ask your advisor how he or she is getting paid. You want to be sure your advisor is offering you the best products for your goals – not the best product for their bank account.

  1. Is Your Financial Advisor Asking the Right Questions?

If your advisor doesn’t understand your retirement goals, then there is little chance he is going to create a solid financial strategy for you. A good advisor will ask questions.

➢ When do you want to retire?

➢ What will your income streams be? For example, do you have rental property or a pension?

Not only will your advisor ask questions, but he or she will also follow up with you regularly to adjust your investments as you near retirement.

An advisor who doesn’t understand your goals and just locks you into a payment plan, is not someone you may want to trust with your financial future.

  1. “I Can Outsmart the Market!”

If your advisor promises high returns or that they can beat the market, then you should run – not walk – out of their office. A respected advisor usually does not promise huge returns, without divulging the huge risks.

What to Look For In an Advisor 

Ask Around

A great first step in choosing an advisor is getting excellent recommendations from friends.


Do some research online and learn about their history – have they been in business long?

Do Some Digging

Next, you should run a background check. Find out if your advisor has ever been convicted of a crime or if he or she has been investigated by a regulatory body.

Here are two good resources:

➢ FINRA Broker Check – BrokerCheck tells you instantly whether a person or firm is registered, as required by law, to sell securities (stocks, bonds, mutual funds and more), offer investment advice or both. It also gives you a snapshot of a broker’s employment history, licensing information and regulatory actions, arbitrations and complaints.

➢SEC’s Investment Adviser Public Disclosure – You can search for an individual investment adviser representative and view that individual’s professional background and conduct, including current registrations, employment history, and disclosures about certain disciplinary events involving the individual.

Get Real Answers

Finally, ask questions – and get clear answers. If a potential advisor is using complicated jargon to explain his investment strategies, then you should keep moving. A good advisor will lay everything on the table. You should be crystal clear on what fees and commissions you’re paying, what the investment strategy is, how exposed you are to the market and what you can expect in returns.

Once you decide on an advisor, be sure to check on your investments regularly. As you get closer to retiring, you should check more often.



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Getting Divorced Checklist

General information Yes No N/A
1. Has relevant personal information been gathered?
• Each spouse’s name, date of birth, and Social Security number
• Names and birth dates of children
• Date and place of marriage and length of time in present state
• Information about prior marriages and children
• Date of separation and grounds for divorce
• Current occupation of spouses and name/address of employers
• Education and degrees of each spouse
• Name, address, and telephone number of attorney
2. Has financial situation been assessed?
• Each spouse’s name, date of birth, and Social Security number
• Names and birth dates of children
• Date and place of marriage and length of time in present state
• Information about prior marriages and children
• Date of separation and grounds for divorce
• Current occupation of spouses and name/address of employers
• Education and degrees of each spouse
• Name, address, and telephone number of attorney

1. Does prenuptial agreement exist?
2. Do spouses reside in a community property state?
3. Have all assets been listed, valued, and classified as joint or
4. Have the tax bases of all assets been determined?
5. If assets will be transferred or sold, have tax consequences been
calculated and explained to client?
6. Have loans and other liabilities on the properties (or otherwise) been
listed and considered?
7. Is there a family business?

1. Have tax consequences of classifying support as alimony or child support been reviewed?
2. Has physical custody of children been determined?
3. Has legal custody of children been determined?
4. Have visitation parameters been established for the noncustodial parent?
5. Will alimony be paid?

1. Will home be transferred to either spouse as part of settlement?
2. If yes, has cost basis been reviewed for improvements?
3. Has amount of outstanding mortgage been calculated?
4. Will the principal residence be sold to a third party?
5. If yes, has the tax cost (if any) been computed?

1. Have retirement plans been listed and interests in retirement plans been reviewed?
2. Will the divorce decree provide a payout from the plan? If so, will a qualified domestic relations order (QDRO) be used?
3. Should beneficiary designations be changed?
4. Will any IRS penalties apply?
5. Can retirement money be rolled over to IRA?

1. If already divorced, was divorce finalized by year-end?
2. If still married at year-end, agree to file jointly?
3. Have joint filing risks been discussed?
4. Has separate maintenance decree been obtained to permit filing as unmarried or head of household?
5. Have head of household conditions been met?
5. Has it been decided which spouse will get dependency exemption?

other Yes No N/A
1. Should will and trust be changed?
2. Should insurance policy beneficiaries be changed?
3. Should banks and other creditors be notified of divorce and signatures changed?
4. Will either spouse’s health insurance plan cover the children post-divorce? Cover spouse?
5. Has budget been revised to account for changes in income and liabilities?
5. Does credit need to be repaired or established?