THE NEW GRADUAL RETIREMENT

The New Gradual Retirement Working a little (or a lot) after 60 may become the norm. Do we really want to retire at 65? Not according to the latest annual retirement survey from the Transamerica Center for Retirement Studies which gauges the outlook of American workers. It found that 51% of us plan to work part-time once retired. Moreover, 64% of workers 60 and older wanted to work at least a little after 65 and 18% had no intention of retiring.1     Are financial needs shaping these responses? Not entirely. While 61% of all those polled in the Transamerica survey cited income and employer-sponsored health benefits as major reasons to stay employed in the "third act" of life, 34% of respondents said they wanted to keep working because they enjoy their occupation or like the social and mental engagement of the workplace.1   It seems "retirement" and "work" are no longer mutually exclusive. Not all of us have sufficiently large retirement nest eggs, so we strive to stay employed - to let our savings compound a little more, and to leave us with fewer years of retirement to fund. We want to keep working into our mid-sixties because of two other realities as well. If you are a baby boomer and you retire before age 66 (or 67, in the case of those born 1960 and later), your monthly Social Security benefits will be smaller than if you had worked until full retirement age. Additionally, we can qualify for Medicare at age 65.2,3   We are sometimes cautioned that working too much in retirement may result in our Social Security benefits being taxed - but is there really such a thing as "too much" retirement income? Income aside, there is another question we all face as retirement approaches. How much control will we have over our retirement transition? In the Transamerica survey, 41% of respondents saw themselves making a gradual entry into retirement, shifting from full-time employment to part-time employment or another kind of work in their sixties.1       Is that thinking realistic? It may or may not be. A recent Gallup survey of retirees found that 67% had left the workforce before age 65; just 18% had managed to work longer. Recent research from the Employee Benefit Retirement Institute fielded roughly the same results: 14% of retirees kept working after 65 and about half had been forced to stop working earlier than they planned due to layoffs, health issues or elder care responsibilities.3     If you do want to make a gradual retirement transition, what might help you do it? First of all, work on maintaining your health. The second priority: maintain and enhance your skill set, so that your prospects for employment in your sixties are not reduced by separation from the latest technologies. Keep networking. Think about Plan B: if you are unable to continue working in your chosen career even part-time, what prospects might you have for creating income through financial decisions, self-employment or in other lines of work? How can you reduce your monthly expenses?   Easing out of work & into retirement may be the new normal. Pessimistic analysts contend that many baby boomers will not be able to keep working past 65, no matter their aspirations. They may be wrong - just as this active, ambitious generation has changed America, it may also change the definition of retirement.   Sources: 1 - forbes.com/sites/laurashin/2015/05/05/why-the-new-retirement-involves-working-past-65/ [5/5/15] 2 - ssa.gov/retire2/agereduction.htm [6/11/15] 3 - money.usnews.com/money/blogs/planning-to-retire/2015/05/22/how-to-pick-the-optimal-retirement-age [5/22/15]

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc. Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO MARKETING PRO INC.

MUCH ADO ABOUT ABSOLUTELY NOTHING

Maybe you saw the alarming headline in the middle of the other stories on Yahoo! News, which told you that the U.S. dollar was about to collapse, as a result of H.R. 2847-or, sometimes, simply "the new currency law."  Write down this date, the frightening article said: July 1, 2014. More recently, you might have see/heard TV and radio advertisements or ubiquitous Internet warnings where Dr. Ron Paul urgently reveals "a real currency crisis"that will usher in the greatest economic meltdown this country has seen in 50 years-including civil unrest, pension fund collapses, the erosion of personal liberties, bank and brokerage closings and mass rejection of the U.S. dollar in favor of "non-paper alternatives."   In case you were wondering, the U.S. dollar did not collapse in July of last year, nor did it collapse in 2009, which is when Ron Paul began predicting doomsday.  But if you watch the 54-minute Ron Paul infomercial, you will eventually be offered a "survival blueprint"published by Stansberry & Associates Investment Research-interestingly, the same company that told us that the U.S. currency would melt down last year.  To avoid financial armageddon, you simply need to pay $49.50. Who is Stansberry & Associates?  The owner and publisher is Frank Porter Stansberry, who, among his credentials, has been prosecuted by the Securities & Exchange Commission for investment fraud, and fined $1.5 million for selling $1,000 reports with information that a panel of judges determined that he knew not to be true.  Using the pseudonym "Jay McDaniel,"Stansberry offered a "Super Insider Tip"telling gullible investors that on May 14, 2002, there would be a major announcement which would instantly double their money.  As it turned out, the uranium processing company that was being touted in the $1,000 report made no significant announcement on the date in question, and in fact investors testified that they lost 20-25% of their investment portfolio after purchasing the stock and options. In the judge's opinion, "The gravity of the harm in this case is not limited to the amount of money each purchaser spent for the Special Report.  Approximately 1,217 investors bought the Special Report with the expectations, as promised, by the Super Insider Solicitation."  Stansberry and his publisher were enjoyed from conducting any additional "deliberate fraud."  An investigative website also notes that he predicted the demise of AT&T, General Motors, the FNMA quasi-governmental guarantor of mortgages, Continental Airlines and GeneralElectric.  One thing these predictions have in common with the prediction of the collapse of the dollar: they never happened.  In 2011, Stansberry's online infomercial predicted "The End of America,"and also that Germany would leave the European Union.  To our knowledge, those things haven't happened yet either. In case you were wondering, H.R. 2847 is a provision that requires Americans living abroad to comply with tighter reporting requirements on their offshore income-and has very little to do with anything related to the dollar. Predicting disaster is a reliable way to make money, because the human mind is wired to pay more attention to threats than to the more benign elements in our environment.  In the future, you'll probably see Stansberry predicting all sorts of other scary things, and probably a few more "can't miss"investment opportunities.  What you won't see is any clear accounting of his track record. Write down this date about the collapse of America, the extinction of the dollar, the demise of senior members of the Fortune 500, the total breakup of the European Union and a great chance to double your money in a day: Not on Porter Stansberry's timetable. Sources: http://briandeer.com/vaxgen/stansberry-fraud.htm http://thecrux.com/porter-stansberry-predicts-the-next-major-company-to-go-bust/ http://wealthymatters.com/2011/09/20/porter-stansberry/ http://thecrux.com/dyncontent/ron-paul-one-step-prepare/?cid=MKT033949&eid=MKT057529 http://www.snopes.com/politics/conspiracy/hr2847.asp

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc. Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO BOB VERES.

Money in the (Foreign) Bank

You might have been reading worrisome comments in the financial press that corporate profits have come down from their highs, in part because unemployment is coming down and the labor markets are getting tighter.  None of this is really bad news, or particularly surprising, despite the breathless spin in the financial press and cable financial programs. But does that mean that Corporate America will be starved for cash?  Hardly.  A recent report by The Economist notes that U.S. non-financial companies-including technology, consumer products, energy and health care firms-are collectively holding $1.73 trillion (with a "t") in cash.  That's more than the total gross domestic product of all but 11 countries around the world, and roughly 10% of the total gross domestic product of the American economy. You might not see that money recycled into the American economy any time soon, however.  Moody's Investor Services estimates that 64% of the total (roughly $1.1 trillion) is being held overseas.  The Economist reports that many companies are taking advantage of cheap borrowing costs in the U.S. to fund their business operations and expansions, meanwhile avoiding U.S. taxes on the money held abroad.  This does mean, however, that if/when interest rates rise as the economy grows and companies need to expand their operations to take advantage, there will be available cash, and the higher borrowing rates may not have a significant impact on Corporate America's bottom line. Sources: http://www.economist.com/news/economic-and-financial-indicators/21651211-treasure-chests http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc. Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO BOB VERES.

THE RANSOMWARE THREAT

Cybercrime has reached a new level.    Imagine cybercriminals holding your files for ransom. It sounds like something out of a movie set in the distant future, but business owners and households are facing such a threat today. Hackers are now using ransomware to hijack computers and hold files hostage in exchange for payment. Malware programs like CryptoWall, CryptoLocker and CoinVault spring into action when you unsuspectingly click on a link in an email, encrypting all of the data on your hard drive in seconds. A "ransom note" appears telling you that you need to pay $500 (or more) to access your files again. If you fail to pay soon, they will be destroyed.1 Worldwide, more than a million computer users have been threatened by ransomware - individuals, small businesses, even a county sheriff's department in Tennessee. The initial version of CryptoLocker alone victimized 500,000 users, generating more than $3 million in payments along the way.2,3   The earliest ransomware demanded payments via prepaid debit cards, but hackers now prefer payment in bitcoin, even though few households or businesses have bitcoin wallets. (The emergence of bitcoin effectively aided the rise of ransomware; keeping the payment in virtual currency is a hacker's dream.)2,3 If your files are held hostage, should you pay the ransom? The Department of Homeland Security and most computer security analysts say no, because it may be pointless. By the time you get the note, your files may already be destroyed - that is, encrypted so deeply that you will never be able to read them again. Some people do pay a ransom and get their data back. As for prosecuting the crooks, that is a tall order. Much of this malware is launched overseas using Tor, an anonymous online network. That makes it difficult to discern who the victim is as well as the attacker - if one of your workers thoughtlessly clicks on a ransomware link, you cannot find, scold or even help that employee any more than you could locate the hacker behind the extortion.3 How do you guard against a ransomware attack? No one is absolutely immune from this, but there are some precautions you should take. First, back up your data frequently - and make sure that the storage volumes are not connected to your computer(s). Cloud storage or a flash drive that always stays in one of your computer's USB ports is inadequate. If you back up your files regularly enough, weathering a ransomware attack becomes easier.3 Keep your anti-virus software renewed and up to date. Those alerts you receive about the latest updates? Heed them. Never click on a mysterious link or attachment. This is common knowledge, but bears repeating - because even after years of warnings, enough people still click on mysterious links and attachments to keep malware profitable. Ransomware is a kind of cyberterrorism. This is why the Department of Homeland Security issues warnings about it. When you deal with terrorists, playing hardball has its virtues. As Symantec Security Response director Kevin Haley told NBC News: "If none of us paid the ransom, these guys would go out of business."2   Citations. 1 - rackspace.com/blog/dont-be-held-hostage-by-ransomware-hackers/ [1/15/15] 2 - nbcnews.com/nightly-news/security-experts-you-should-never-pay-ransomware-hackers-n299511 [2/4/15] 3 - tinyurl.com/n3rcrsm [12/8/14]

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc. Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO MARKETING PRO INC.

THE HARM IN FINANCIAL JOURNALISM

In most areas of our lives, the more information you get, and the more up-to-the-minute it is, the better we can do business and make astute decisions. It is interesting that investing is one area where the opposite is true.

We're not talking here about the second-by-second blips on a Bloomberg terminal that traders and computer algorithms use to make quick-twitch buys and sells. We're talking about the normal news reports, cable TV investment reports and investing articles that you're bombarded with on a daily basis. In general, the news and data supplied by consumer journalists is almost always harmful to your financial health.

How? Consider profiles of mutual funds and mutual fund managers. The quarterly profiles in Barron's and the articles in Money, Kiplinger's and the Wall Street Journal tend to focus a bright spotlight of attention on the hot funds-that is, funds that outperformed their peers (and the market) in the previous quarter. Three months worth of track record is statistical nonsense, but the hot fund manager is interviewed with breathless deference normally given to a certified genius. It is interesting that seldom if ever is the next quarter's genius the same as the last one. Anyone who invests with the fund of the hour is in grave danger of suffering a regression to the mean-which means losses when compared with the indices.

Even one-year and five-year rankings have no predictive value, particularly when the focus is on outliers who were well ahead of their peers. Meanwhile, when we aren't reading about hot managers, we're hearing about what the stock market did (or is doing) today. Today's price movements are, to a statistician, meaningless white noise, indicative of nothing remotely significant about the future. The markets go up today, down tomorrow, up for a week, down for a week, and during each of these time periods, analysts try to tell us the causes of these random bounces. They would be more productively employed trying to explain the "causes"behind each of the waves in the ocean, yet we can't help listening to their plausible explanations as to why this earnings report, that jobs report, or some other speculation on what the Federal Reserve Board will or will not do has affected our investment outlook.

And, of course, at market tops, when new money is chasing returns at the most dangerous possible time, the news reports are telling us how the markets have been going up, up, up. When markets are depressed, and it is the best possible time to put new money to work, the news reports are telling us all the bad news about months of market losses. Swimming against that tide is nearly impossible, even for professionals.

There may be meaningful information among this chatter, but it's unlikely that most of us will see it amid the noisy background. Back in the late 1990s, one analyst who couldn't believe how much people were paying for tech stocks finally broke through the background noise by pointing out that Amazon's share price had reached approximately the same level as the entire yearly economic output of the nation of Iceland, plus a few 747 cargo jets to carry it all back to the U.S. Of course, few listened, and the bursting tech bubble cost a lot of investors a fortune.

Today, we're being told that the current market rally is long in the tooth, that the Fed is going to raise rates soon, that market valuations are kind of high, and of course that certain fund managers did really well last quarter and yesterday's market was up or down. The problem is that we were hearing exactly the same things last year and the year before (remember?), and still the market churned ahead, cranking out new record highs.

Unlike just about any other activity you might pursue, the best, most astute way to invest is to turn off the noise and let the markets carry you where they must. The short-term drops tend to become buying opportunities in the long run, and over time, the U.S. and global economies reflect the underlying growth in value generated by millions of workers who go to work each day and build that value. Investor sentiment will swing around with the unhelpful prodding of journalists and pundits, but people who stay the course have always seen new market highs eventually, while people who react to every positive or negative report tend to fare much less well. When it comes to the markets, wisdom trumps up-to-the-minute knowledge every time.

Maybe somebody should tell that to the journalists.

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc.

Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net

PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO BOB VERES.

SAVING YOUR ELDERLY PARENTS FROM FINANCIAL FRAUD

Talk to them about their money (and those who could take it away). Elders are financially defrauded daily in this country.  Just a tiny percentage of these crimes are made public. In fact, the National Adult Protective Services Association (NAPSA) estimates that only 1 in 44 cases of elder financial abuse are reported. A recent NAPSA study found that 11% of seniors had been financially "abused, neglected or exploited" within the past year.1        Friends, family & caregivers perpetrate much of this financial abuse. They commit 90% of it, NAPSA estimates. Major damage may result to an elder's finances and physical and mental health: victims of elder financial exploitation are four times more likely to go into a nursing home than their peers, and nearly 10% of the victims end up relying on Medicaid.1   Frauds range from big scams to little schemes. You likely know about the common ones: the grandparent scam ("Grandpa, I'm in jail in _____ and I need $___ to make bail"), the utility company scam (one criminal keeps the elder busy in the yard as the other burglarizes their home), the lottery scam (a huge prize awaits, the elder need only pay a few thousand up front to take care of associated taxes). Others are subtler: home health aides severely overcharging an elder for their services, relatives or caregivers using a financial power of attorney to draw down an elder's bank or investment accounts.   Talking about all this may help to prevent it. Perhaps the best way to introduce the topic is by referring to what happened to someone else - a story coming up on the news or in the paper, an article online. AARP's Fraud Watch Network emails a monthly newsletter highlighting common scams; it also maintains a map showing per-state occurrences of such crimes.2   A 2014 Allianz Life survey discovered something very encouraging. Seniors who have talked about the issue of financial exploitation with others seem less likely to succumb to it, especially seniors who have talked about such risks in the company of a financial professional.2   The insurer asked more than 2,000 Americans about their awareness of financial fraud - men and women aged 65+, and select family members and friends aged 40-64. It found that 97% of seniors who talked about finances with a hired professional were likely to check their monthly credit and financial statements, while only 84% of those who talked about their finances with no one were likely to do so. It also found that 93% of seniors who communicated with a hired professional were likely to refrain from signing a financial document they could not fully understand; that was true for just 82% of seniors who had never addressed financial topics in the company of professionals, friends or family.2    Another pair of examples: 85% of elders who discussed personal finances consistently shredded or destroyed sensitive financial paperwork while just 69% of those who refrained from such discussion did. Thirty-seven percent of seniors who talked about their finances with a professional were also more likely to have a co-signer for their bank accounts, as opposed to 14% of those who were handling their personal finances solo.2   Have the conversation; have a look at Mom or Dad's financial situation. It is only prudent to do so. The National Center on Elder Abuse says that the average financial fraud perpetrated on an elder siphons $30,000 out of his or her finances. Think about how devastating that is, especially for a poorer retiree; that may equal a year's worth of medical expenses, a majority of an elder's yearly income, or a double-digit percentage of his or her remaining retirement savings. Elders rich and poor need to be warned about such crimes.3 Citations:      1 - napsa-now.org/policy-advocacy/exploitation/ [4/30/15] 2 - allianzlife.com/about/news-and-events/news-releases/preventing-elder-financial-abuse [4/20/15] 3 - tinyurl.com/p4y6pa7 [4/20/15]   Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc. Primary Office 425 Commercial St., Ste 203 Mount Vernon, WA 98273 Phone: (360) 336-6527 info@soundfinancialplanning.net Secondary Office 650 Mullis St., Ste 101 Friday Harbor, WA 98250 (360) 378-3022 www.soundfinancialplanning.net PLEASE READ THIS WARNING: All e-mail sent to or from this address will be received or otherwise recorded by the Sound Financial Planning, Inc. corporate e-mail system and is subject to archival, monitoring and/or review, by and/or disclosure to, someone other than the recipient. This message is intended only for the use of the person(s) ("intended recipient") to whom it is addressed. It may contain information that is privileged and confidential. If you are not the intended recipient, please contact the sender as soon as possible and delete the message without reading it or making a copy. Any dissemination, distribution, copying, or other use of this message or any of its content by any person other than the intended recipient is strictly prohibited. Sound Financial Planning, Inc. has taken precautions to screen this message for viruses, but we cannot guarantee that it is virus free nor are we responsible for any damage that may be caused by this message. Sound Financial Planning, Inc. only transacts business in states where it is properly registered or notice filed, or excluded or exempted from registration requirements. Follow-up and individualized responses that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state investment adviser and investment adviser representative registration requirements, or an applicable exemption or exclusion. This information should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. WE WOULD LIKE TO CREDIT THIS ARTICLE'S CONTENT TO MARKETING PRO INC.

THE A, B, C & D of Medicare

Breaking down the basics & what each part covers.

Whether your 65th birthday is on the horizon or decades away, you should understand the parts of Medicare - what they cover, and where they come from.
    
Parts A & B: Original Medicare.  America created a national health insurance program for seniors in 1965 with two components. Part A is hospital insurance. It provides coverage for inpatient stays at medical facilities. It can also help cover the costs of hospice care, home health care and nursing home care - but not for long, and only under certain parameters.1
 
Seniors are frequently warned that Medicare will only pay for a maximum of 100 days of nursing home care (provided certain conditions are met). Part A is the part that does so. Under current rules, you pay $0 for days 1-20 of skilled nursing facility (SNF) care under Part A. During days 21-100, a $157.50 daily coinsurance payment may be required of you.2
  
If you stop receiving SNF care for 30 days, you need a new 3-day hospital stay to qualify for further nursing home care under Part A. If you can go 60 days in a row without SNF care, the clock resets: you are once again eligible for up to 100 days of SNF benefits via Part A.2
  
If you have had Medicare taxes withheld from your paycheck for at least 40 calendar quarters during your lifetime, you will get Part A coverage for free.1
 
Part B is medical insurance and helps pick up some of the tab for outpatient care, physician services, expenses for durable medical equipment (scooters, wheelchairs), and other medical services such as lab tests and varieties of health screenings.1,3
 
Part B isn't free. You pay monthly premiums to get it and a yearly deductible (plus 20% of costs). The premiums vary according to the Medicare recipient's income level; in 2015, most Medicare recipients pay $104.90 a month for their Part B coverage. The current yearly deductible is $147. Some people automatically get Part B, but others have to sign up for it.2,4
 
Part C: Medicare Advantage plans. Insurance companies offer these Medicare-approved plans. Part C plans offer seniors all the benefits of Part A and Part B and a great deal more: most feature prescription drug coverage and many include hearing, vision, dental, and fitness benefits. To enroll in a Part C plan, you need to have Part A and Part B coverage in place. To keep up your Part C coverage, you must keep up your payment of Part B premiums as well as your Part C premiums.2
 
To say not all Part C plans are alike is an understatement. Provider networks, premiums, copays, coinsurance, and out-of-pocket spending limits can all vary widely, so shopping around is wise. During Medicare's annual Open Enrollment Period (Oct. 15 - Dec. 7), seniors can choose to switch out of Original Medicare to a Part C plan or vice versa, although any such move is much wiser with a Medigap policy already in place.5
 
How does a Medigap plan differ from a Part C plan? Medigap plans (also called Medicare Supplement plans) emerged to address the gaps in Part A and Part B coverage.  If you have Part A and Part B already in place, a Medigap policy can pick up some copayments, coinsurance and deductibles for you. Some Medigap policies can even help you pay for medical care outside the United States. You have to pay Part B premiums in addition to Medigap plan premiums to keep a Medigap policy in effect.6
 
Medigap plans don't feature prescription drug coverage anymore. Medigap policies have been sold without drug coverage since 2005.6
   
Part D: prescription drug plans. While Part C plans commonly offer prescription drug coverage, insurers also sell Part D plans as a standalone product to those with original Medicare. As per Medigap and Part C coverage, you need to keep paying Part B premiums in addition to premiums for the drug plan to keep Part D coverage going.1,2
 
Every Part D plan has a formulary, a list of medications covered under the plan. Most Part D plans rank approved drugs into tiers by cost. The good news is that Medicare's website will determine the best Part D plan for you. Go to medicare.gov/find-a-plan to start your search; enter your medications and the website will do the legwork for you.7
 
Part C & Part D plans are assigned ratings. Medicare annually rates these plans (one star being worst, five stars being best) according to member satisfaction, provider network(s) and quality of coverage. As you search for a plan at medicare.gov, you also have a chance to check out the rankings.8 
   

Citations. 1 - dailyfinance.com/2013/05/14/medicare-explained-part-a-b-c-d/ [5/14/13] 2 - medicare.gov/coverage/skilled-nursing-facility-care.html [3/30/15] 3 - info.tuftsmedicarepreferred.org/medicare-matters-blog/bid/74844/Medicare-Part-A-B-C-and-D-What-does-it-all-mean [10/1/13] 4 - medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html [3/30/15] 5 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/when-can-i-join-a-health-or-drug-plan.html#collapse-3192 [3/30/15] 6 - medicare.gov/supplement-other-insurance/medigap/whats-medigap.html [3/30/15] 7 - medicare.gov/part-d/coverage/part-d-coverage.html [3/30/15] 8 - medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/five-star-enrollment/5-star-enrollment-period.html [3/30/15]

Sincerely, Bill Morrissey, CFP® and Tammy Prouty, CFP® Sound Financial Planning, Inc.

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