Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA, SIPC. Investment advice FINRA, Finitive, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. This is Nate Kreinbrink. Have Mike Van Zuiden with me today. Fourth Wednesday of May. It is a-
Mike VanZuiden:
How did we get here?
Nate Kreinbrink:
I have no idea. I have no idea. It’s so crazy. We were talking on the way up here, it feels that vibe of summer feels officially here with these warmer temperatures maybe pushing 90 today, I think I saw.
Mike VanZuiden:
Absolutely. Yard work is in full swing. Being married to a school teacher reinforces to me very strongly that it definitely is summer, because summer break is upon her as well, so yeah.
Nate Kreinbrink:
I do like the cooler evenings. It cools things off a little bit, a little bearable when you go out in the morning and towards the evening, but you are correct. I think a lot of the area schools, maybe tomorrow with the final ones, maybe Friday I think too, but by the next two days, everybody will be out.
Mike VanZuiden:
School’s out for summer, right?
Nate Kreinbrink:
It is there. It is there, ready or not. And again, fun time. I mean, high school sports, summer sports are well underway, camps, activities, all that stuff for kids. It’s just a fun time, so hopefully weather gets out and they can… I did. The boys did get in the pool over the weekend.
Mike VanZuiden:
Oh, really?
Nate Kreinbrink:
It was chilly. It was chilly.
Mike VanZuiden:
Yeah. I remember when I was a little younger, it didn’t bother me how cool the water was. If the air temperature was warm enough, I was going to get in the water.
Nate Kreinbrink:
They dared me, and I did dive in.
Mike VanZuiden:
Did you really?
Nate Kreinbrink:
Yes.
Mike VanZuiden:
That ship’s sailed for me. I’m too old for that stuff.
Nate Kreinbrink:
I wasn’t in long, I’ll tell you that. But again, last Wednesday of the month, we usually try to talk Medicare, and today I know Mike was in my office a couple times, and we were going over a case together that we were working on, and I think there’s still a lot of questions as far as when should you file for Medicare and, more importantly, when you need to file for Medicare. And I think when you start looking at those different things, as people are pretty familiar with, they have that 65 in their mind, but if you have different options, you may not have to file for the full Medicare at age 65.
Mike VanZuiden:
Absolutely. For a lot of people when they get the age of 65, a spouse might still be working, so they have employer-sponsored coverage, and in most… I wouldn’t say most. In a lot of instances, it makes sense to just stay on that until that option isn’t available anymore. Then you have the opportunity to enroll in Medicare. So it’s not something that necessarily has to take place on your 65th birthday if you have other health coverage. So I think a lot of people just feel like that 65 number, “Oh, I’ve got to get this done,” and that may or may not be the case.
Nate Kreinbrink:
Right. And I think, too, when you start looking at that number… And again, people are excited to switch over to it, but it’s not necessarily always the most affordable or the best coverage. As Mike alluded to, if you have a chance to stay on a spouse’s plan at age 65 and older, a lot of times it may make sense to stay on that spouse plan.
And then, again, you can at age 65, if it makes you feel better, you can file for your Part A from Medicare. Your Part A is what you’ve been paying into with every paycheck that you’ve been working for your entire working career, so there’s technically no cost to it out of pocket at age 65, because you’ve already essentially prepaid for it, but then you just decline Part B, continue on with that spouse’s plan until you decide that you do want to switch over or your spouse retires and you no longer have that coverage. Then you have that enrollment period where you would then have to then go back on, file for your Part B premium and then any additional coverage, whether it be a supplement advantage or drug plan with that.
Mike VanZuiden:
Drug plan. Absolutely.
Nate Kreinbrink:
Again, a lot that goes into that, but I think, as Mike said, just because you turn that 65 doesn’t necessarily mean that you have to.
Mike VanZuiden:
Now, you do have a window, that initial enrollment period when you’re going to turn 65. If you don’t have access to coverage through a spouse’s plan or whatever and it’s time to enroll, you basically have a seventh-month window around that 65th birthday, three months before your 65th birthday, the month of your 65th birthday, and then three months after to make that election to get your Part A and Part B moving. So it’s important to remember that’s your initial enrollment window, if you don’t have options for other coverage, to get online or make a phone call and get enrolled in Part A and Part B.
Nate Kreinbrink:
And the other parts of that is just understanding where you get the different parts of Medicare from. I mean, your Part A, your Part B are considered original Medicare. If you are on Social Security, so if you turned 62 and you decided you were going to turn Social Security on, you will automatically be enrolled in Part A and B. You will get that card sent to you in the mail. “Well, I don’t want to stay… I don’t want Part B. I want to stay on my spouse’s one.” Well, you’re going to have to then decline and fill the form out and send it back in and say, “Hey, I want to decline Part B.” But if you are automatic, if you are enrolled in Social Security, filed at 62, 63, 64, whatever the case may be and you are on Social Security, you will be automatically sent your Medicare A and B card in the mail unless you physically decline it or send it back when you get it.
Mike VanZuiden:
Right. It’s your birthday card.
Nate Kreinbrink:
And if you are not enrolled in Social Security, you will have to go onto ssa.gov and sign in and physically apply for it. You need to have that Medicare number before you decide on a drug plan or a supplement plan or advantage plan. That is the first step. You’ve got to get that red and blue card with your Medicare number and that has your Part A and your Part B effective date. So it’s not like a sit down and let’s get this all done. Depending on where you’re at, depending on if you filed for Social Security benefits, it may be a couple steps because of, again, filing for that original Medicare, which I think sometimes people oftentimes overlook.
Mike VanZuiden:
Yep. I agree with that wholeheartedly. It could be a pretty daunting task, a daunting event to navigate, so certainly if you’re not sure, engage with someone to help give you some guidance through that process, because if you don’t do it right the first time, the difficulties in trying to square things around after the fact can be a little bit rough.
Nate Kreinbrink:
And I think, too, like when people start thinking of Medicare, nobody fully understands it. We do the NelsonCorp Nuggets thing in newspaper, and I did one the other day that of the 85% of individuals that are on Medicare, 80% of them felt underprepared for what they knew on Medicare.
Mike VanZuiden:
For the whole process.
Nate Kreinbrink:
Yeah. And that’s not new.
Mike VanZuiden:
No, it’s not.
Nate Kreinbrink:
For your main insurance thing. And I think, too, you need to understand what it is that your options are, what it is that your timeline is, and the unfortunate thing is that there’s a lot of misinformation that’s out there, whether it’s from an aunt or an uncle telling you, “Hey, this is what I heard, this is what I read,” or a friend, or something that you read that maybe is misinterpreted. There’s a lot of misinformation or halfway information out there where, well, that’s true, but here’s the other part of it. You’re forgetting that second part of it. And people are going on this misinformation and maybe not necessarily making the correct decisions at the correct times.
Mike VanZuiden:
I think you get to that point, that age, and I’ve had clients come in who came in with bags just full of mail that they’ve received from all these different companies that want to help them with their supplement or their drug plan or their advantage plan, but woven into all of that is just it breeds confusion to just the whole process of getting enrolled in Part A and B to begin with, and then all of the things that come after that. So certainly the time to ask a question if you’re not sure is before. After tends to, like I said, get a little bit messy trying to clean it up if we didn’t get it right the first time, so certainly encourage people to ask questions. Ask questions of not the person next door or my aunt, my uncle, whatever. Ask some questions of somebody that is familiar with the process, and make sure that you get on the right path that first time to simplify things down the road.
Nate Kreinbrink:
And I think, too, like when you look at it, it’s not that it is a one-time decision that you’re stuck with forever, but in some instances you may. And I think with that, no preexisting conditions, no health questions being able to be asked the first time that you sign up for Medicare, not that it’s a permanent one, but the way you’re going to get your coverage is more looking to not just what’s best for me today, but what may be best for me for years down the road too. Because, again, if you want to switch plans after that initial enrollment period, there’s more than likely going to be some health questions that you’re going to have to answer, and you may or may not answer yes or no to them. Don’t know. But again, usually we don’t get healthier the older we get, and that’s-
Mike VanZuiden:
Right, and I think it’s easy to make a decision based on, “Well, I’m pretty healthy now.” It’d be a beautiful world if we just maintained our health through our entire life until we just got tired, but it’s certainly not the case. So just considering all factors when making those decisions is very, very, very important.
Nate Kreinbrink:
And looking at the drug plans, that is the plan then that you can change every year if need be during that annual open enrollment period from October 15th to December 7th each year.
Mike VanZuiden:
Correct.
Nate Kreinbrink:
You can look at those drug plans and switch. But again, a lot that we went over, a lot of questions, a lot of what-ifs. The thing with all this stuff, and we’ve talked it with investing, we’ve talked it with Social Security and we’re talking it with Medicare, there’s not a one-size-fits-all answer to everybody’s question. It is so specific to the individual person, the individual situation that they have going on. So again, when we take this general stuff that we go over, please just take it, give you a little understanding, but again, as Mike alluded to, you need to talk with somebody and just to get some questions answered, make sure you’re understanding it the right way and make that best decision. So give us a holler. We’d be happy to sit down and help you out.
Before we run out of time here, I did want to mention that every month NelsonCorp is featuring a new charity of the month. For the month of May, we are focusing on the God’s Will Giving Center in Morrison. Mike, I appreciate you joining me this morning.
Mike VanZuiden:
Thanks for having me.
Nate Kreinbrink:
Again, Nate and Mike bringing you this week’s Financial Focus. Thanks for tuning in, and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker-dealer, member of FINRA, SIPC. Investment advisor representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.