Episodios

  • What is a Fiduciary Advisor and Why It Matters, #277

    What is a Fiduciary Advisor and Why It Matters, #277
    Oct 28 2025
    With the term “financial advisor” being used so broadly these days, it’s harder than ever for retirees and investors to make sense of who’s actually guaranteed to act in their best interest. So let’s talk about the key responsibilities of fiduciaries, explore the differences between fee-only advisors and those who earn commissions, and go through why full disclosure and ongoing advice matter so much in your financial planning relationship. I share practical tips on how to vet potential advisors, whether you’re unhappy with your current one or searching for the right fit for the first time, and discuss online resources designed to help you find an aligned, trustworthy professional. If you want to make sure your advisor is truly putting your interests first, this episode is for you. You will want to hear this episode if you are interested in... [00:00] What is a Fiduciary Advisor?[04:59] Fiduciary duty in financial advice.[10:14] Advisor compensation and fiduciary conflicts.[13:16] Financial advisor versus Fiduciary.[14:41] Choosing your Fiduciary Advisor.[16:22] How to find a potential Fiduciary Advisor. What Is a Fiduciary and Why Should You Care? A fiduciary is someone who is legally and ethically bound to act in your best interest. Professions such as attorneys, executors, and corporate officers have fiduciary obligations, but in wealth management and investing, this distinction is particularly critical. Registered investment advisory firms (RIA) and their representatives are fiduciary advisors, meaning their primary responsibility is you, the client, unlike brokers or insurance agents, whose loyalty is often to their employer. Because anyone can call themselves a “financial advisor,” the consumer’s challenge is identifying who’s truly working for you. How Fiduciary Financial Advisors Serve You 1. Duty of Care A fiduciary advisor must always put your interests first, providing recommendations and advice tailored for your benefit. This doesn’t automatically mean recommending the cheapest investment, it means recommending the most appropriate solution, factoring in cost, liquidity, and other key details. If an advisor recommends their own firm’s products, this must be clearly disclosed due to the potential conflict of interest. 2. Duty to Seek Best Execution When managing your investments, a fiduciary is responsible for choosing brokers and executing trades with your best interest in mind. It’s not just about low commissions; it's about balancing price, research, reliability, and responsiveness. 3. Ongoing Advice and Monitoring A true fiduciary doesn’t just sell you a product and disappear. They provide continuous advice, meet with you regularly, ideally at least annually or semi-annually, and adjust your strategy as your life and goals change. If you haven’t heard from your advisor in years, they’re likely not fulfilling their obligations. 4. Duty of Loyalty Advisors must actively avoid or disclose any conflicts of interest. Vague, general disclosures aren’t enough; specifics matter so you can make informed decisions. For example, any financial benefit your advisor receives from recommending a particular fund or insurance policy should be clear and transparent. How Fiduciary Advisors Get Paid and Why It Matters Fiduciary RIAs typically avoid commissions and instead rely on three main payment models: Hourly Fees: You pay for the advisor’s time, just as you would an attorney.Flat Fees: One-time fees for specific services, like a comprehensive financial plan.Assets Under Management (AUM): The most common method; you pay a percentage of the assets the advisor manages for you (often around 1% annually). The aim is to remove any incentive for the advisor to recommend products based on compensation rather than your best interest. Financial Advisor vs. Fiduciary: Spotting the Difference Many professionals use the title “financial advisor,” whether they are fiduciaries or not. The real question to ask: Are you a fee-only advisor? Fee-only advisors are paid solely by the fees their clients pay, not commissions or kickbacks from financial products. To do your own research, use the online tools I recommend to verify credentials, licenses, and complaint histories. Also think about asking your advisor to sign a fiduciary oath, confirming their commitment to act solely in your interest. A fiduciary promises ongoing advice, transparency, and loyalty, values that matter when your future is at stake. Remember: Ask questions, verify credentials, and always ensure your advisor is truly working in your best interest. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE BrokerCheck IAPD findmyfiduciary.com Fiduciary Oath CFP.net Connect With Morrissey Wealth Management www.MorrisseyWealthManagement.com/contact Subscribe to Retire With Ryan
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    18 m
  • Switching Plans and Saving Money During Medicare’s Annual Open Enrollment, #276

    Switching Plans and Saving Money During Medicare’s Annual Open Enrollment, #276
    Oct 21 2025
    Every year, Medicare Open Enrollment presents an important opportunity for retirees and individuals enrolled in Medicare to review, update, and make changes to their health and prescription drug coverage. If you’re on Medicare or approaching retirement, understanding the enrollment period and your options is crucial to ensuring comprehensive and cost-effective health care. I’m sharing the seven essential things you need to know to make the most of this important window. Whether you’re already enrolled in Medicare or want to stay ahead of your retirement planning, I explain key dates, your options for switching plans, how to review or update your prescription drug coverage, and what to do if your health or coverage needs have changed. Tune in to learn about navigating Medicare Advantage, Medigap, and everything you should consider before December 7th to keep your health and finances on track as you plan your ideal retirement. You will want to hear this episode if you are interested in... [01:56] Seven key things to know about Medicare open enrollment.[03:04] Making changes to your Medicare supplemental coverage.[04:30] Prescription drug plan options.[05:21] How to evaluate and change Medicare Advantage plans.07:30] Switching from a Medicare Advantage plan to a Medigap plan.[12:17] Effective dates for making Medicare Changes. What Is Medicare Open Enrollment? Medicare Open Enrollment occurs annually from October 15th to December 7th. During this time, anyone currently enrolled in Medicare has the chance to make changes to their coverage. This window allows you to switch plans, sign up for supplemental coverage, or alter your prescription drug benefits, flexibility that’s vital as your health needs or financial circumstances shift. It's important to note that this period is only for those already enrolled in Medicare, not for newly eligible individuals. This annual period matters for anyone with existing Medicare coverage. If you’re new to Medicare, say, your 65th birthday is coming up, your initial enrollment period is separate, and open enrollment won’t apply until the following year. Retirees and older people who have already navigated their initial sign-up should take advantage of open enrollment to ensure their health plan continues to meet their needs. Your Medicare Options Medicare coverage comes in several forms: Original Medicare (Parts A & B): Provides hospital and medical insurance.Medicare Advantage: All-in-one alternatives to Original Medicare, often with additional benefits and lower out-of-pocket costs.Medigap (Medicare Supplement): Offers extra coverage to help pay healthcare costs not covered by Original Medicare. Open enrollment is your chance to change from one type to another, such as moving from a Medicare Advantage plan to a Medigap policy or vice versa. Switching plans can bring savings or better coverage, depending on your health situation, but there are specific rules, like the six-month initial enrollment for Medigap and state-specific regulations, that you must navigate. Prescription Drug Plans: Reviewing and Updating Part D Prescription needs often change, and so do the offerings of Part D drug plans. This period lets you join, drop, or switch your drug coverage. If your current plan is discontinuing a medication you rely on or raising costs, research alternatives in your area. Lack of creditable drug coverage carries penalties, making it important to have either Part D or a Medicare Advantage plan with drug benefits. Switching Medicare Advantage Plans Medicare Advantage plans differ in costs, networks, and coverage options, and these can change each year. If your doctors are no longer covered or prescription benefits shift unfavorably, open enrollment is the time to shop for a better-fitting plan. Changes due to pricing or plan termination also allow you to choose a new plan that better fits your situation for the upcoming year. Understanding Medigap Eligibility and State Rules Switching from Medicare Advantage to Medigap isn’t always straightforward, especially after your initial six-month enrollment window. Some states, including Connecticut, New York, and Massachusetts, offer more flexibility, letting you change plans without penalties for pre-existing conditions. Outside of these areas and time frames, you may face higher premiums or coverage denial unless a “guaranteed issue period” applies, such as following a plan termination or a move to a different state. Timing and Next Steps Any changes you make during Medicare Open Enrollment become effective January 1st of the following year. It’s important to act before the December 7th deadline, so plan ahead, review notices, research alternatives, and consult with trusted advisors if you’re unsure. Keeping up annually ensures your coverage fits your evolving health needs and budget. Medicare Open Enrollment can feel overwhelming, but it’s a vital tool for retirees aiming for optimal care and cost ...
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    13 m
  • Key SECURE Act Insights on Avoiding 25 Percent Penalties on Inherited IRAs, #275

    Key SECURE Act Insights on Avoiding 25 Percent Penalties on Inherited IRAs, #275
    Oct 14 2025
    This episode is essential listening for anyone who’s inherited an IRA, especially in light of the game-changing SECURE Act. If you’ve inherited a retirement account from a non-spouse since 2020, this episode is packed with details you need to know to avoid unexpected tax bills and penalties. I explain the new rules for inherited IRAs, explaining the requirements and options for non-designated, non-eligible, and eligible designated beneficiaries. Whether you’re figuring out minimum distributions or seeking smart tax-planning strategies, you’ll get clear guidance on how these updates affect you, plus tips to steer clear of common mistakes in 2025 and beyond. You will want to hear this episode if you are interested in... [00:00] Inherited IRAs: key details explained.[02:36] SECURE Act and rule changes.[04:18] Retirement account beneficiary guidance.[07:13] IRA inheritance withdrawal rules.[10:31] IRA distribution rules explained.[13:36] Get in touch for more inherited IRA guidance & support. Inherited IRAs After the SECURE Act: What You Need to Know Before 2020, inherited IRAs were relatively simple: most non-spouse beneficiaries could "stretch" required minimum distributions (RMDs) over their lifetime, potentially lowering annual tax bills. The SECURE Act changed that. If you inherited an IRA from someone who passed away on or after January 1, 2020, new distribution rules likely apply to you, and ignorance could cost you in penalties. The law categorizes beneficiaries into three groups, and the rules differ based on which kind you are. 1. Non-Designated Beneficiaries Non-designated beneficiaries are not people; think estates, certain trusts (non-qualifying), or charities. Naming your estate as the beneficiary might not be the best move if you want your family to get the most options. Here’s why: If the original owner died before their required beginning date (generally April 1 of the year they turned 73), the account must be fully distributed within five years. If they died after that date, the estate can take distributions using the deceased owner's single life expectancy, but this is still less flexible than for individual beneficiaries. 2. Non-Eligible Designated Beneficiaries This is the category most adult children, grandchildren, and some trusts fall into. For these individuals, the rules are as follows: If the owner died before their required beginning date (age 73), you must drain the IRA within ten years, but there’s no mandate on interim distributions until year 10. Be careful, though, a massive, one-year withdrawal could push you into a higher tax bracket. If the owner died after their required beginning date, Annual RMDs start the year after death using the single life expectancy table, and the account must be completely emptied by the end of the tenth year. 3. Eligible Designated Beneficiaries This privileged group gets more flexibility, including: Surviving spouses (who can treat the IRA as their own or as inherited).Minor children (of the deceased owner, but only until age 21).Disabled and chronically ill individuals.Individuals no more than ten years younger than the deceased. They’re allowed to take stretch distributions based on their own life expectancy, often leading to much smaller annual withdrawals and lower taxes. Planning Opportunities and Tax Pitfalls The IRS wants its share, and waiting until year 10 to take out all the funds could mean a significant tax hit. Instead, you might consider spreading withdrawals over several years, especially if you know you’ll retire before year 10, lowering your tax rate in some of those years. Beneficiaries must also remember critical deadlines. Because the IRS allowed a moratorium on required distributions from 2021 to 2024 due to pandemic-related confusion, many will need to start withdrawing in 2025. Missing a required distribution can cost you 25% of the amount you should have taken, ouch! Practical Steps for Beneficiaries Review the decedent’s date of death: This will determine which rules apply.Identify what type of beneficiary you are.Plan withdrawals smartly: Don’t let inertia trigger a tax bomb in your tenth year.Consult a financial advisor: The rules are complex, and the stakes are high; personalized advice can help prevent costly mistakes.Don’t name your estate or a non-qualifying trust as your beneficiary if you want your heirs to have better options. Inherited IRAs under the SECURE Act require more attention than ever before. Get proactive: determine your beneficiary type, mark your calendar for required distributions, and develop a tax strategy that fits your situation. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE Connect With Morrissey Wealth Management www.MorrisseyWealthManagement.com/contact Subscribe to Retire With Ryan
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    15 m
  • Seven Essential Tips to Maximize Your Lifetime Social Security Benefits, #274

    Seven Essential Tips to Maximize Your Lifetime Social Security Benefits, #274
    Oct 7 2025
    You might have seen those viral articles promising a mysterious multi-thousand-dollar Social Security “bonus,” but are they actually legit? On the show this week, I separate fact from fiction, debunking the myths and sharing seven actionable strategies to help you get the most out of your Social Security over your lifetime. Whether you’re curious about how working longer, delaying your benefits, checking your earnings record, or understanding tax implications can impact your retirement paycheck, this episode is packed with valuable tips to help you make sure you’re not leaving money on the table. You will want to hear this episode if you are interested in... [00:00] Retirement Planning Misconceptions Explained.[03:25] Filling in or replacing "zero" or low-earning years boosts benefits.[04:26] Reasons for and against early collection.[06:48] Repay benefits within one year of starting to “reset” your claim.[08:15] Eligibility requirements for spousal benefits.[12:28] How to check your Social Security earnings.[13:00] Strategies to delay taxable distributions and reduce Social Security taxation. Debunking the Social Security "Bonus" Myth Many retirees have seen headlines promising a massive Social Security “bonus" that most people don’t collect. Let’s be real, this so-called "bonus" isn’t some sort of secret benefit; it’s a reference to the cumulative value you could gain over your lifetime by paying a little attention to your Social Security strategy and reducing your tax liability. In other words, there’s no one-time check or hidden program, just savvy planning that can add up to tens of thousands more in your pocket. 1. Work Longer, Maximize 35 Years of Earnings The Social Security Administration calculates your benefit using the highest 35 years of your working life. If you retire with fewer than 35 years of work, the missing years count as zero, lowering your benefit. Even for those with a full 35-year history, additional years of higher earnings (often later in your career) can replace lower-earning years, bumping up your monthly check. Working a little longer not only increases your benefit but may also put you in a better position for retirement overall. 2. Delay Claiming Benefits While you are eligible to start at age 62, waiting until your full retirement age (typically 66 or 67), or even delaying to age 70, can significantly increase your monthly benefit. For every year you wait past full retirement age (up to age 70), you receive an 8% credit, on top of any cost-of-living adjustments. There are some exceptions where it may make sense to claim early, such as serious health issues or unique family situations. 3. Unwind an Early Claim with Repayment If you’ve already claimed Social Security but then realize you made a mistake, there is a potential do-over option. If you started benefits within the past year, you can repay the benefits received (without interest) and reset your claiming strategy to earn a higher benefit later. This is a once-in-a-lifetime opportunity and includes repayment of any Medicare premiums withheld, so be sure this move fits your broader financial plan. 4. Don’t Miss Out on Spousal and Survivor Benefits If you’re married, you can claim a spousal benefit up to 50% of your spouse’s benefit at your full retirement age. This strategy can be a huge game-changer for non-working or lower-earning spouses. When a spouse passes away, the survivor can step up to the higher of the two benefits, which is why it’s important to maximize the higher earner’s benefit for long-term security. 5. Check Your Social Security Earnings Statement Regularly Mistakes happen, even with Social Security’s generally high record-keeping accuracy. Reviewing your annual earnings statement ensures all your income is being counted, and thus, your benefit is maximized. Errors not caught early can seriously reduce your benefit down the road. 6. Be Tax-Smart About Social Security Benefits By smartly timing IRA distributions, capital gains, and part-time work, you can potentially reduce or even eliminate the tax owed on your benefits for several years. For couples with a combined income under $32,000, none of the benefit is taxable, while at higher incomes, up to 85% can be taxed. Knowing these thresholds is key to tax-efficient retirement income planning. 7. Get Advice When Needed Social Security may be just one piece of your retirement puzzle, but it’s a critical one. Consulting with a financial advisor can help you coordinate claiming strategies, minimize taxes, and make the right decisions for your unique situation. While there’s no hidden "Social Security bonus" waiting to be claimed, a thoughtful approach to your Social Security strategy can result in thousands, even tens of thousands, of dollars more in your retirement years. Resources Mentioned Retirement Readiness ReviewSubscribe to the Retire with Ryan YouTube ChannelDownload my entire book for FREE ...
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    17 m
  • What Retirees Need to Know About The Social Security Fairness Act, #273

    What Retirees Need to Know About The Social Security Fairness Act, #273
    Sep 30 2025
    The Social Security Fairness Act, which was signed into law at the start of 2025, has been in effect for about nine months since this game-changing legislation repealed both the Windfall Elimination Provision and the Government Pension Offset, restoring and increasing Social Security benefits for millions of retirees, especially teachers and public employees who worked in jobs exempt from Social Security. In this episode, I discuss exactly who qualifies for these newly restored benefits, explain how the Social Security Administration is handling the rollout, and give you a step-by-step guide on what to do if you haven’t received your payment yet. I’ll also walk you through critical tax changes you’ll need to consider if you’re now receiving this extra income, and practical strategies to avoid any nasty tax surprises at the end of the year. You will want to hear this episode if you are interested in... [02:26] Social Security Fairness Act overview and impact.[05:57] Who is eligible for Windfall Elimination Provision (WEP) or Government Pension Offset (GPO).[07:35] Applying for your benefits.[08:16] How much Social Security becomes taxable.[11:09] Increasing withholding on pensions, IRA, 401(k), or earned income. What Is the Social Security Fairness Act? Signed into law by President Biden in January 2025, the Social Security Fairness Act has restored benefits for millions of retirees who were previously penalized due to their employment in jobs that were exempt from Social Security taxes. These roles frequently include teachers and certain municipal or state employees. For years, retirees in those positions received a reduced Social Security benefit due to provisions known as the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Windfall Elimination Provision (WEP): Affected individuals who worked in both Social Security-covered and non-covered jobs, resulting in a reduced Social Security benefit. Government Pension Offset (GPO): Reduced the spousal or survivor Social Security benefit for those receiving a government pension from non-covered employment (like teachers in Connecticut). With the repeal of these two provisions, retirees are now eligible to receive their full Social Security benefit, as well as the entirety of their eligible spousal or survivor benefits, regardless of their pension amount. Who Is Impacted? The Act primarily benefits retirees who worked in state or municipal jobs excluded from Social Security wage contributions (think teachers, police, firefighters, or other state employees in certain states). It also helps spouses or survivors of such retirees, who, under the GPO, were denied or saw dramatic reductions in their spousal/survivor benefits. As an example, if a teacher in Connecticut was receiving a $3,000/month pension, they were previously eligible for only a fraction of their spouse’s Social Security survivor benefit. Now, with the Act’s passage, they can receive the full amount, eliminating a significant hardship for many families. The Social Security Administration has processed around 3.1 million payments, exceeding prior estimates, and paid out approximately $17 billion. However, some eligible recipients have yet to see increases, particularly those who never filed because they believed they wouldn’t qualify. What Should You Do If You’re Eligible? If you haven’t received a payment adjustment, you might be missing out on thousands of dollars. File or Re-file: Eligible recipients should visit SSA.gov to update or submit a new application for benefits. Check Your Status: Even if you’re not currently receiving Social Security, consult the SSA to determine your eligibility for individual, spousal, or survivor benefits, especially once you reach full retirement age (typically between 66-67). Lots of people have been automatically credited and are receiving retroactive payments, but those who never applied in the first place due to WEP and GPO restrictions must now take proactive steps. Tax Implications of Increased Social Security Benefits More income is always welcome, but it may come with new tax responsibilities. Here’s what you need to know: Social Security Taxation Basics: Taxability depends on your total income: adjusted gross income (AGI), plus half of your Social Security benefit, plus tax-exempt interest. Generally, married couples with less than $32,000 combined income owe no tax on Social Security, and between $32,000 and $44,000, up to 50% of benefits may be taxable, then over $44,000, up to 85% of benefits can be taxable. For individuals, the thresholds are $25,000 and $34,000. Avoid Surprises by adjusting your tax withholding, either by filing IRS Form W-4V for Social Security, or updating withholdings on pensions or retirement accounts. You may also make quarterly estimated payments, especially if you live in a state with income tax. Social Security does not withhold state income taxes, so plan accordingly to ...
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    14 m
  • Is a Million Dollars Enough to Retire? #272

    Is a Million Dollars Enough to Retire? #272
    Sep 23 2025

    It’s one of the most frequently asked questions by my clients as they prepare for retirement. And while a million dollars may sound like a lot, the reality is a bit more complex.

    There are several key factors to consider when planning your retirement, including factoring in taxes, evaluating withdrawal strategies, and understanding the cost of living where you plan to retire.

    Let’s break down how you can determine whether your nest egg will support your ideal retirement.

    You will want to hear this episode if you are interested in...
    • [01:57] Evaluating if a million dollars is enough to retire.
    • [02:47] Tax Considerations on Retirement Withdrawals.
    • [05:04] Importance of Social Security as a retirement income supplement.
    • [06:12] putting together some type of a monthly budget as far as what you are spending money on now and what you plan to spend money on in retirement.
    • [08:37] Risk tolerance’s influence on expected returns and sustainable withdrawal rates.
    • [10:51] Risks of exceeding safe withdrawal rates (running out of money early).
    How Much Can You Live On?

    How much can you safely withdraw each year without depleting your funds too quickly? In this episode, I’m discussing a dynamic withdrawal strategy, which suggests you can withdraw 3% to 5% of your portfolio annually.

    Here’s a practical example:

    4% withdrawal from $1,000,000 = $40,000 per year.

    But it’s crucial to remember: most retirement savings are held in pre-tax accounts such as IRAs and 401(k)s. Distributions from these accounts are taxed as ordinary income. This means the real, spendable income you receive after taxes could be significantly lower.

    For example, factoring in roughly 15% in combined federal and state taxes, that $40,000 could shrink to about $34,000 per year.

    Factoring In Social Security and Pension Income

    Thankfully, your retirement income isn’t limited to withdrawals from your investment accounts. For most, Social Security provides a critical supplement—let’s say an average benefit of around $30,000 per year. Some retirees might also have pension income, though this is becoming less common.

    So, your total annual income might look like:

    $34,000 (after-tax retirement withdrawal)

    + $30,000 (Social Security)

    = $64,000 (before factoring in pension or additional income streams)

    Your personal retirement number isn’t “one size fits all”—it depends greatly on what you need to spend in retirement and your other income sources.

    Know Your Expenses

    Stop fixating on round numbers like “one million or two million dollars” as retirement goals. The real question is: What are your anticipated expenses in retirement? Start by creating a detailed budget of your expected housing, health, food, utilities, travel, and leisure costs.

    Once you know your likely annual expense, you can better estimate how much you’ll need to cover from savings versus other sources. If your post-tax retirement income falls short of your living expenses, you may need to adjust your plan by saving more, reducing spending, or considering a later retirement date.

    How far your savings go will also depend on your investment strategy. A well-balanced portfolio with an appropriate mix of stocks, bonds, and cash is essential. Being too conservative can hurt your portfolio’s growth potential. You also need to account for inflation.

    By following a thoughtful, tailored approach, you can make the most of your retirement—whether your nest egg is one million dollars or not.

    Resources Mentioned
    • Retirement Readiness Review
    • Subscribe to the Retire with Ryan YouTube Channel
    • Download my entire book for FREE
    • Find My Fiduciary
    Connect With Morrissey Wealth Management

    www.MorrisseyWealthManagement.com/contact

    Subscribe to Retire With Ryan
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    15 m
  • Avoid These Seven Medicare Enrollment Mistakes and Protect Your Finances, #271

    Avoid These Seven Medicare Enrollment Mistakes and Protect Your Finances, #271
    Sep 16 2025
    Are you turning 65 soon or starting to think seriously about healthcare in retirement? This week, I discuss the complicated world of Medicare—with a focus on the seven most costly mistakes people make when enrolling. From missing crucial deadlines and underestimating penalties, to overlooking the true costs Medicare doesn’t cover and getting tripped up by income-related surcharges, I give practical advice to help you avoid expensive pitfalls and make confident choices for your health and your wallet. Whether you’re working past 65, exploring Medicare Advantage and Medigap, or just want to sidestep penalties, this episode unpacks the essentials so you can enter retirement feeling prepared and protected. Let’s get into the key rules, deadlines, and decisions every retiring listener needs to know! You will want to hear this episode if you are interested in... [04:17] Medicare enrollment guidelines & penalties.[09:35] Understanding Medicare coverage gaps.[11:55] Medicare enrollment and switching plans.[17:15] Medicare premiums based on income.[19:50] Avoid high medicare costs.[23:16] How you can use HSA funds.[24:56] Medicare costs and supplemental plans. 7 Medicare Mistakes that Could Cost You Making the transition to Medicare at 65 is a big step for retirees. While the program does have plenty of benefits, it also comes with a few key complexities and deadlines that can trip up the unprepared. 1. Not Enrolling on Time Despite common belief, Medicare enrollment isn’t always automatic when you turn 65. You’re only auto-enrolled if you’ve begun collecting Social Security at least four months before your 65th birthday. Otherwise, you must actively sign up to avoid lifelong late enrollment penalties—10% annually for Medicare Part B and 1% per month for Part D, the prescription drug plan. Remember, if you’re not covered by qualifying employer insurance (typically from a company with 20 or more employees), you must enroll during your Initial Enrollment Period (IEP), which starts three months before and ends three months after your 65th birthday month. 2. Misunderstanding Late Enrollment Penalties Enrollment deadlines carry not just inconvenience, but long-term financial consequences. For every year you delay Part B, a 10% penalty is added to your premium—for life. For Part D, missing timely enrollment adds a 1% penalty per month delayed. Even if you don’t currently take prescription drugs, failing to enroll in Part D or lacking “creditable” drug coverage will trigger this penalty. Many people only find out about these charges after it’s too late, so mark your calendar and stay ahead of these key windows. 3. Not Comparing Original Medicare and Medicare Advantage Original Medicare doesn’t cover everything, leaving you responsible for 20% of costs and lacking extras like dental or vision. Medicare Advantage, on the other hand, often bundles additional services and may come with lower or even zero premiums, thanks to how the government pays private insurers. However, these plans have different provider networks and coverage rules, so compare carefully based on your health needs, preferred providers, and annual costs. 4. Waiting to Enroll in a Medigap Policy Failing to evaluate supplemental Medigap coverage during your initial eligibility window could lead to denial or much higher premiums later, especially if you develop health conditions. During the first six months after enrolling in Part B, you’re guaranteed acceptance into any Medigap plan regardless of health. Afterward, insurers can impose restrictions or deny coverage. States like Connecticut, New York, and Massachusetts offer more flexibility, but most don’t—making early action essential. 5. Ignoring IRMAA: Higher Premiums for Higher Incomes Many retirees are surprised by IRMAA—the Income-Related Monthly Adjustment Amount—which increases Part B and D premiums if your income exceeds certain thresholds. These adjustments are based on your tax returns from two years prior. Even a minor one-time income bump (like a large IRA withdrawal) could propel you into a higher bracket, doubling your premiums. Be proactive: monitor your adjusted gross income and consider strategies like Roth conversions, careful withdrawal timing, or appealing based on life-changing events like retirement. 6. Making HSA Contributions After Enrolling in Medicare Once you sign up for Medicare Part A or B, both you and your employer must stop making contributions to a Health Savings Account (HSA) six months before enrollment. Over-contributing subjects you to a 6% excise tax for every year the excess remains. However, you can continue to use existing HSA funds for eligible medical expenses tax-free throughout retirement. 7. Underestimating Out-of-Pocket Costs Even with Medicare, you’ll face deductibles, co-pays, and services not covered (like long-term care, dental, and vision). Part A hospital stays have significant deductibles per benefit ...
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    28 m
  • Education Planning After the One Big Beautiful Bill Act: Key 529 Plan Changes, #270

    Education Planning After the One Big Beautiful Bill Act: Key 529 Plan Changes, #270
    Sep 9 2025
    Paying for education is a major expense for many families, so I’m breaking down why 529 plans remain the preferred way to save for college, thanks to their tax advantages and flexible growth. I unpack updates, such as increased limits for K-12 tuition withdrawals, expanded uses for trade and vocational schools, and the new ability to roll funds into ABLE accounts for individuals with disabilities. Plus, learn about the new Trump accounts, the option to roll over leftover 529 funds into your child’s Roth IRA, and strategies to make the most of your education savings. Whether you’re a parent, grandparent, or simply curious about planning for future expenses, this episode is packed with actionable insights to help you build a successful financial future for your family. You will want to hear this episode if you are interested in... [00:00] The One Big Beautiful Bill Act and its impact.[03:00] The two types of 529 plans - prepaid tuition and savings plans.[04:06] Paying for K through 12 tuition and out of the 529 plan up to $20,000 per year.[04:31] Wider Usage for Post-Secondary Expenses.[06:20] 529 plan rollovers to ABLE accounts.[08:52] Comparison between TRUMP accounts and 529 plans.[09:33] 529 to Roth IRA conversions. Maximizing the Power of 529 Plans Education expenses, whether for college or trade school, are among the largest financial commitments families face. Recent changes under the “One Big Beautiful Bill Act” have brought new flexibility and opportunities to the popular 529 savings plans, making it easier for parents, grandparents, and guardians to invest in the futures of their loved ones. 529 plans are tax-advantaged investment accounts designed to help families save for future education costs. Investment growth within the account is tax-deferred, and withdrawals are tax-free when used for qualified education expenses. This compounding, tax-sheltered growth can make a huge difference over 15 to 18 years, leading up to a child’s college enrollment. There are two main types of 529 plans: Prepaid Tuition Plans: Lock in today’s tuition rates at specific colleges or state institutions to avoid the impact of future tuition increases, which often rise more than 5% per year. Savings Plans: Flexibly invest contributions with the ability to use funds at a wide range of educational institutions across the country. Key Legislative Updates in the One Big Beautiful Bill Act 1. Doubling K-12 Tuition Withdrawals Before the new legislation, families could withdraw up to $10,000 annually for K-12 tuition expenses. The One Big Beautiful Bill Act increases this limit to $20,000 per year starting January 1, 2026. 2. Expanding Qualified Expenses for K-12 The act now permits withdrawals for a broader range of K-12-related expenses, not just tuition. As of July 5th of this year, 529 account owners can use funds for: Books and instructional materialsOnline educational contentProfessional tutoringStandardized testing fees (e.g., SAT, ACT)Educational therapies for children with disabilities 3. Supporting Trade and Technical Education Not every rewarding career requires a four-year degree. The legislative updates now allow 529 withdrawals for accredited post-secondary programs like HVAC certifications, cosmetology, apprenticeships, or trade schools. These must be programs recognized by the Workforce Innovation and Opportunity Act, lead to a military credential, or carry federal/state government approval. This opens the door for practical, career-focused education to be funded just as efficiently as traditional college. Other Savings Options Also introduced under the act is the new “TRUMP account,” which may qualify children born between 2025 and 2028 for a $1,000 government contribution, with annual after-tax contributions up to $5,000. However, unlike a 529, a TRUMP account's assets are transferred directly to the child at age 18. Many may still prefer the flexibility and parental control of a 529, but the option to use both accounts and secure extra government funding adds another layer of planning potential. Perhaps one of the most exciting new features: If a 529 account has been open for at least 15 years, up to $35,000 can be rolled, subject to annual Roth IRA limits, into a Roth IRA in a child’s name. This brilliant move allows any leftover college savings to start building long-term, tax-free retirement wealth for your child, giving them a valuable head start. For families supporting someone with a disability, the ABLE (Achieving a Better Life Experience) account remains a vital tool, now bolstered by the ability to make permanent rollovers from 529 accounts. Eligible for those whose disability began before age 46 (up from age 26 next year), ABLE accounts protect benefit eligibility while allowing more robust financial support for care, therapy, and independence. Planning ahead isn’t just about numbers; it’s about opening doors for the next generation. Resources Mentioned Retirement...
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