Using a financial advisor for your investment needs is 100% on brand, but what about the other parts of your retirement life? For example, a third of people ages 64 and up have a financial advisor, but only 2% of them asked their advisor to help with their Medicare choices, according to a July 2022 report f rom health care consulting firm Sage Growth Partners.
But Medicare and other non-portfolio topics — like travel and long-term care — can affect your finances.
“We are actively bringing these ideas to our clients, but there are still plenty of advisors out there that are not,” says Crystal Cox , a certified financial planner in Madison, Wisconsin. “They’re still focused just on the investments and the portfolio.”
Here are some questions to ask at your next meeting.
1. WHAT RETIREMENT DECISIONS DO I NEED TO THINK ABOUT?
Your life in retirement may not continue as it has in the past. Do you plan to travel? Do you intend to move to a different state or downsize? How often will you want to buy a new vehicle?
“Most people just think, ‘I need a certain amount of money to live on,”‘ says Daniel Lash , a CFP in Vienna, Virginia. “What about all the ancillary things that come along with living? All the things you want to do?”
Mapping your retirement plans can help you and your advisor pinpoint when and how you’ll need cash.
“Do you have an idea of where you’re going to move, and what does real estate look like in that general area?” Lash says. “They’ve thought about retiring, not ‘What am I going to do when I retire?”‘
2. WHAT SHOULD I KNOW ABOUT MEDICARE?
Although you generally can’t sign up for Medicare until you’re closer to 65 years old, your income in the years beforehand will affect what you pay for coverage. Each year, both Medicare Part B and Medicare Part D base their premiums on your reported modified adjusted gross income from two years prior. So if you filed individually making more than $91,000, or filed jointly making more than $182,000, you’ll pay additional amounts each month.
“Because there’s a lookback on earnings for Medicare expenditures, we’ll adjust plans accordingly, because they might be paying considerably more the first couple of years in retirement than later in retirement,” Lash says.
It’s also wise to consider guidance on Medicare choices in general, because you sometimes can’t change coverage later if your health situation shifts — and Medicare is complicated. “We do an annual meeting with somebody that specializes in Medicare,” Lash says. “All clients are invited to attend.”
3. CAN I AFFORD TO SELF-INSURE FOR LONG-TERM CARE?
A person turning 65 now has about a 70% chance of needing some kind of long-term care, and costs are steep: It’s $54,000 a year for an assisted living facility and nearly $95,000 for a shared room in a nursing home, according to insurance company Genworth’s 2021 Cost of Care Survey.
“Some people are well enough off that they’re comfortable self-insuring,” says Kevin Brady , a CFP in New York City. “Others have more limited assets.”
No matter what is the case, it’s crucial to discuss potential costs and whether you have the savings to manage them. If you don’t, you’ll need to run the numbers on products like long-term care insurance or a hybrid policy that combines permanent life insurance with a long-term care rider.
“We’re always working with an expert to do projections and see what makes sense,” Brady says.
4. DO I HAVE ENOUGH MONEY TO HAVE SOME FUN?
A successful retirement isn’t always about the tangibles. For many, it’s a time to realize dreams of travel and other experiences, but spending too frugally can get in the way.
“Often clients are overly conservative for fear of running out of money, but in the process they shortchange the retirement experience,” says Kevin Lum, a CFP in Los Angeles. “By the time they realize their abundance, they’re too old to spend it.”
Talk to your advisor about your big-ticket wishes and whether you have enough money to splash out a little before you settle into quieter spending.
Actual retirement spending looks more like a smile than a straight line, Lum says, with more spending at the beginning on things like travel and more spending at the end on long-term care needs.
“I’m not saying people should spend irrationally,” Lum says. “But thinking about retirement spending as a fixed calculation that doesn’t change across the retirement life isn’t a smart idea.”
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This article was provided to The Associated Press by the personal finance website NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Kate Ashford is a writer at NerdWallet. Email: kashfordâ†*nerdwallet.com. Twitter: â†*kateashford.
RELATED LINKS:
NerdWallet: How do I sign up for Medicare? https://bit.ly/nerdwallet-how-do-i-sign-up-for-medicare
Sage Growth Partners: Hidden Crisis: The Medicare Enrollment Maze https://sage-growth.ftlbcdn.net/wp-content/uploads/2022/07/0242–SGP– https://sage-growth.ftlbcdn.net
Genworth Financial: Cost of Care Survey https://www.genworth.com/aging-and-you/finances/cost-of-care.html
The Sage Growth Partners poll was commissioned by Healthpilot and conducted in April 2022. The poll surveyed 1,142 Medicare-enrollment eligible seniors.
Genworth’s Cost of Care survey was conducted fr om June through November 2021 by CareScout, a Genworth company. CareScout contacted 67,742 providers by phone to complete 14,698 surveys of nursing homes, assisted living facilities, adult day health facilities and home care providers. Survey respondents represent all 50 states and the District of Columbia.
TORONTO – Canada’s main stock index dipped lower Friday despite strength in energy stocks, while U.S. markets were mixed as the Dow eked out another record but tech stocks dragged.
The mood Friday was mixed after a strong week for equities in both Canada and the U.S., said Andrew Buntain, vice-president and portfolio manager at Fiduciary Trust Canada.
The S&P/TSX composite index closed down 77.01 points at 23,956.82, one day after it . It closed over 24,000 for the first time on Thursday.
The strength this past week wasn’t just in North American markets, noted Buntain, as Chinese stocks enjoyed a rally after the country’s central banks announced a suite of measures intended to boost the economy.
Meanwhile, an undercurrent of broadening strength continued this week as investors spread out their interest beyond a narrow set of tech giants, said Buntain.
“Some of the sectors that have been ignored for several years have been some of the better performers this year,” he said.
“We’re very encouraged by that.”
In New York on Friday, the Dow Jones industrial average was up 137.89 points at 42,313. The S&P 500 index was down 7.20 points at 5,738.17 after setting an all-time high on Thursday, while the Nasdaq composite was down 70.70 points at 18,119.59.
A report Friday on one of the U.S. central bank’s preferred measures of inflation — the personal consumption expenditures price index — showed continued cooling.
The Federal Reserve started lowering its key interest rate last week, and is expected to keep going this fall and into 2025.
However, the Fed’s next interest rate decision isn’t until November, noted Buntain, so there’s plenty of data for the central bank to take in yet — including next week’s labour report.
The job market has been an increasingly key focus for the central bank after recent reports showed cooling in that area of the economy. Friday’s report also showed consumer spending in August didn’t meet economists’ expectations.
In Canada, where the Bank of Canada is set for its next rate decision later in October, Friday brought a GDP report that was a little stronger than expected, said Buntain.
“The Bank of Canada has already delivered three cuts and signalled maybe some further reductions,” he said.
If inflation continues to move lower, Buntain added, the Bank of Canada could even announce an outsized half-percentage-point cut, echoing the Fed’s move last week.
The Canadian dollar traded for 74.08 cents US compared with 74.22 cents US on Thursday.
The November crude oil contract was up 51 cents at US$68.18 per barrel and the November natural gas contract was up 15 cents at US$2.90 per mmBTU.
The December gold contract was down US$26.80 at US$2,668.10 an ounce and the December copper contract was down four cents at US$4.60 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 27, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index closed above 24,000 for the first time Thursday as strength in base metals and other sectors outweighed losses in energy, while U.S. markets also rose and the S&P 500 notched another record as well.
“Another day, another record,” said Angelo Kourkafas, senior investment strategist at Edward Jones.
“The path of least resistance continues to be higher.”
The S&P/TSX composite index closed up 127.95 points at 24,033.83.
In New York, the Dow Jones industrial average was up 260.36 points at 42,175.11. The S&P 500 index was up 23.11 points at 5,745.37, while the Nasdaq composite was up 108.09 points at 18,190.29.
Markets continue to be optimistic about an economic soft landing, said Kourkafas, after the U.S. Federal Reserve last week announced an outsized cut to its key interest rate following months of speculation about when it would start easing policy.
Economic data Thursday added to the story that the U.S. economy remains resilient despite higher rates, said Kourkafas.
The U.S. economy grew at a three-per-cent annual rate in the second quarter, one report said, picking up from the first quarter of the year. Another report showed fewer U.S. workers applied for unemployment benefits last week.
The data shows “the economy remains on strong footing while the Fed is pivoting now in a decisive way towards an easier policy,” said Kourkafas.
The Fed’s decisive move gave investors more reason to believe that a soft landing is still the “base case scenario,” he said, “and likely reduces the downside risks for a recession by having the Fed moving too late or falling behind the curve.”
North of the border, the TSX usually gets a boost from Wall St. strength, said Kourkafas, but on Thursday the index also reflected some optimism of its own as the Bank of Canada has already cut rates three times to address weakening in the economy.
“The Bank of Canada likely now will be emboldened by the Fed,” he said.
“They didn’t want to move too far ahead of the Fed, and now that the Fed moved in a bigger-than-expected way, that provides more room for the Bank of Canada to cut as aggressively as needed to support the economy, given that inflation is within the target range.”
The TSX has also been benefiting from strength in materials after China’s central bank announced several measures meant to support the company’s economy, said Kourkafas.
However, energy stocks dragged on the Canadian index as oil prices fell Thursday following a report that Saudi Arabia was preparing to abandon its unofficial US$100-per-barrel price target for crude as it prepares to increase its output.
The Canadian dollar traded for 74.22 cents US compared with 74.28 cents US on Wednesday.
The November crude oil contract was down US$2.02 at US$67.67 per barrel and the November natural gas contract was down seven cents at US$2.75 per mmBTU.
The December gold contract was up US$10.20 at US$2,694.90 an ounce and the December copper contract was up 15 cents at US$4.64 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 26, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in the base metal sector, while U.S. stock markets were also higher.
The S&P/TSX composite index was 143.00 points at 24,048.88.
In New York, the Dow Jones industrial average was up 174.22 points at 42,088.97. The S&P 500 index was up 10.23 points at 5,732.49, while the Nasdaq composite was up 30.02 points at 18,112.23.
The Canadian dollar traded for 74.23 cents US compared with 74.28 cents US on Wednesday.
The November crude oil contract was down US$1.68 at US$68.01 per barrel and the November natural gas contract was down six cents at US$2.75 per mmBTU.
The December gold contract was up US$4.40 at US$2,689.10 an ounce and the December copper contract was up 13 cents at US$4.62 a pound.
This report by The Canadian Press was first published Sept. 26, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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