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 posted modest gains Monday, while U.S. markets also rose near the end of the day to kick off the week in the green.
Stocks were down earlier in the afternoon in part because of comments from U.S. Federal Reserve chair Jerome Powell, said Anish Chopra, managing director at Portfolio Management Corp.
Powell said Monday that more interest rate cuts are coming, but not quickly.
“We’re looking at it as a process that will play out over some time,” he said at a conference in Nashville, Tenn.
“It’ll depend on the data, the speed at which we actually go.”
The Fed isn’t in a hurry to cut its key interest rate, said Chopra, as it weighs the upside risks to inflation and the downside risks to the job market.
“Inflation could go up, it could go down, but they believe that if the data remains consistent with what they’ve seen, there will be two more rate cuts coming, but they will be smaller,” said Chopra.
Though the central bank has already signalled it expects to make two more quarter-percentage-point cuts this year, market watchers had been hoping for another outsized cut before the end of the year, he said.
“So I think Powell’s comments from this afternoon disappointed the markets and investors in the sense that if they were anticipating bigger rate cuts, that’s not the news they got.”
In New York, the Dow Jones industrial average was up 17.15 points at 42,330.15. The S&P 500 index was up 24.31 points at 5,762.48, while the Nasdaq composite was up 69.58 points at 18,189.17.
The S&P/TSX composite index closed up 41.31 points at 23,998.13.
At the end of this week, markets will get the latest report on the U.S. labour market, perhaps the most closely watched economic data right now after a couple of softer-than-expected reports prompted fears that higher rates were having too hard an impact on jobs.
If the report is weaker than expected this time, that could change the Fed’s thinking around its interest rate trajectory, said Chopra.
However, the Fed’s next rate decision is in November, he noted, so there’s still another labour report after this week’s release for the central bank to weigh.
Overseas, Asian markets had a frenzied start to the week, with Japanese markets down 4.8 per cent while stocks in China saw their best day in almost 16 years.
Japanese markets sank because investors are questioning whether the new government will be supportive of higher interest rates, said Chopra.
Meanwhile, Chinese markets rallied on the news of more stimulus to the country’s economy, he said.
The Canadian dollar traded for 73.93 cents US, according to XE.com, compared with 74.08 cents US on Friday.
The November crude oil contract was down a penny at US$68.17 per barrel and the November natural gas contract was up two cents at US$2.92 per mmBTU.
The December gold contract was down US$8.70 at US$2,659.40 an ounceand the December copper contract was down five cents at US$4.55 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 30, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index fell in late-morning trading, weighed down by losses in base metal stocks, while U.S. stock markets were mixed to start the trading week.
The S&P/TSX composite index was down 44.33 points at 23,912.49.
In New York, the Dow Jones industrial average was down 101.56 points at 42,211.44. The S&P 500 index was down 0.67 points at 5,737.50, while the Nasdaq composite was up 3.97 points at 18,123.56.
The Canadian dollar traded for 74.04 cents US compared with 74.08 cents US on Friday.
The November crude oil contract was up 66 cents at US$68.84 per barrel and the November natural gas contract was up two cents at US$2.93 per mmBTU.
The December gold contract was down US$14.90 at US$2,653.20 an ounce and the December copper contract was down seven cents at US$4.53 a pound.
This report by The Canadian Press was first published Sept. 30, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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.
National ceremony in Ottawa marks Truth and Reconciliation Day
National ceremony in Ottawa will mark Truth and Reconciliation Day
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Pete Rose, baseball’s banned hits leader, has died at age 83
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Gavin Creel, Tony Award winner and musical Broadway veteran, dies at 48
A list of Quebec language law sections that bilingual municipalities want struck down
B.C. Conservative Leader Rustad vows to ‘unleash potential’ for Indigenous prosperity
