Steps to Safeguard Family before Retirement

Survival in the US market for us business owners has never been easy, in spite of it being one of the most lucrative markets in the world. Small businesses from tech to moms and pops keep popping up every now and then but they may vanish just as easily. As per statistics 28.8 million businesses in the US are small business i.e. having less than 100 employees with the looming threat of only 50% survival chances as their fifth year unfolds. This makes retirement plans for small business owners crucial step to safeguard their family before they plan to retire.

retirement plans for small business owners
Source: pacific united planning

To sustain, we need to set serious goals and be ready to adapt and evolve quickly to the changes around us. So, we often lose ourselves in drafting plans and implementing strategies for the business. Our business becomes our baby to be taken care of and nurtured with extreme devotion.

Meeting up with too many routine chores and stresses, and fighting the looming threat of survival, keeps us on our feet, and thus maybe along the way, we often forget that even while our business is our top priority to a secure future, retirement planning should simultaneously be considered on the same foothold.

family financial planning

Well, taking years to settle my business, by the time I got a chance to lift my head up I realized I was already standing on the threshold of 40. It had never really bothered me until then, as I was secure that I would be leaving behind a well-settled legacy for my family to inherit even though I had lost a good many years by not beginning my personal investments when I was in my 30’s.

Here is more information on retirement planning for small business owners.

But it was the struggle of the moms and pops business owners in their 60’s and 70’s which spurred on the need for an immediate and stringent retirement planning, within me. All their life these business owners had invested their assets and wealth thinking that their business sale would fund their retirement but when the time came, they were left disappointed. It was not easy for them or their children, who did not want to continue with their parent’s business, finding other sellers to take over and hand them liquidated asset in return.

retirement planning for small business owners
Source: kochie’s business builders

According to a survey by the Financial Planning Association/CNBC, it was found that almost 75 to 78% of the business owners targeted the funding of their families financial interest by the sale of their business. It invoked in me the need to establish an effective wealth plan so that my family could reap the benefits after my exit. This is when I learnt that expertise in the matters of retirement planning lay with skilled financial planners who had an array of strategies up their sleeves to help us with effective investments and schemes.

Here is an interesting article on why small business owners aren’t saving for retirement.

personal financial planning for small business owners
Source: woven capital

They recommended savings as per retirement calculator advising us on how much money we would be required to save annually and for how many years, they assisted in planning an exit plan depending on the changing markets, helped us in chalking out schemes which would cover family members and maximizing our investment returns as well as monitoring our investments to help us retire in grace and leave behind a smile on the faces of our family members.

Business owners in strive to maintain business often forget to invest for their retirement intelligently. Increasing awareness among the business class is gradually helping them to invest wisely and safeguard their family when they are no more. Do you want professional help and advise on this matter? You can get in touch with our service professionals at Flagship Financial. Contact Flagship Financial.

Medicare Costs Explained

Almost everyone is covered under a variety of health insurance plans these days. This means that the health insurance company will cover the costs of your medical needs such as surgery, procedures and hospitalization. There are legions of private and government run insurance plans. Today, we will discuss Medicare and the costs involved in being covered under this insurance plan.

medicare cost
Source: hint

What is Medicare? Medicare is the federal health insurance program created in 1965 and administered by CMS, a division of the U.S. Department of Health & Human Services (HHS). It covers the country’s senior citizen population; that is all people over the age of 65. It also covers certain young people with disabilities who are receiving SSDI (Social security disability Insurance) and people who have end stage renal disorders and amyotrophic lateral sclerosis also known as ALS. Medicare is further split into four coverage categories to help cover specific services.

senior health insurance program
Source: realtor

Medicare Part A: Hospital Coverage. Part A covers inpatient medical care, hospice care, nursing homestay services and other non ambulatory procedures.

Medicare Part B: Covers certain OPD services, Physician fees, preventative healthcare treatment and the purchase of medical supplies.

Medicare Part C: Advantage Plans. Medicare Advantage Plans provide all of your Part A and Part B benefits. This plan is offered by a private company that contracts with Medicare.

Medicare Part D: Covers Prescription Drugs and controlled substances.

It is important to pick the coverage that suits you best in order to minimize your co-pay costs and reap maximum benefits from the federal insurance program. For instance, the Original Medicare program is widely accepted by physicians and other caregivers in the country, as opposed to Medicare Advantage Plans that cover limited hospital networks under their wing.

What is medicare
Source: ritter insurance marketing

On the other hand, the Medicare Advantage plan covers procedures that involve routine dental care and visits to the ophthalmologist.

More information on Medicare 2018 costs

Out of pocket costs: Medicare will not pay for all of the beneficiary’s medical costs irrespective of which part you are enrolled under. It also excludes certain services and procedures from the coverage plan. For this, the beneficiary has to pay out of pocket.

  • Premiums: Most Americans do not have to pay monthly premiums for Medicare Part A because they have had over forty quarters in which they paid FICA (Federal Insurance Contributions Act) taxes. For the unlucky few who do not meet this criteria, CMS offers Part A enrollment for an annual adjusted monthly premium of $232.00 per month for those with 30–39 quarters of Medicare-covered employment, or $422.00 per month for those with fewer than 30 quarters of Medicare-covered employment. Here is how much you pay for Part A hospital inpatient deductible and coinsurance. $1,340 deductible for each benefit period. Day 1 to 60: $0 coinsurance. Day 61 – 90 $335 coinsurance per day. Day 91 and beyond $670 per day coinsurance for each lifetime reserve day.
medicare premiums
Source: health market

Medicare part B is a paid for insurance and comes at a premium of $104.90 – $335.70 per month. The premium increased to over $120 a month in 2016 but only for those who were not on Social Security in 2015. An income-based premium surtax schema demands that individuals with incomes exceeding $85,000 and married couples with incomes exceeding $170,000 pay higher premiums for Part B enrollments. The higher the income, the higher the premium. These Part B premiums are $139.90, $199.80, $259.70, or $319.70 with the highest premium paid by individuals earning more than $214,000, or married couples earning more than $428,000. One factor that may raise your Medicare Part B premium is the late enrollment penalty. Medicare Part B requires you to pay a yearly deductible of $183.

medicare part b premium
Source: senior financial group

Part C may or may not charge a premium as deemed suitable by CMS. Part D premiums are based upon the benefits included under ones enrollment and varies by plan. The annual deductible for a standard Medicare Part D Prescription Drug Plan is a maximum of $405 as of 2018.

Seeing as there are so many options to pick from, choosing the right plan for yourself can be a tough decision to make. Research. Look around and study all of the available options you can enroll under before you sign the deal. If you need professional help and advise, you can contact our experts at Flagship Financial and book a consultation.

What Medicare Part D Is All About

Medicare is a national/federal health insurance program in the United States. It has an enormous reach and covers four categorically defined plans under one umbrella. The insurance plans are divided into Part A, B, C and D. Today we will explore the advantages and costs of Medicare Part D.

what is medicare part D
Source: policy and medicine

Let’s start by understanding the advantages of enrolling for Medicare Part D and proceed into the premiums and costs to the beneficiaries. Medicare Part D went into effect on January 1, 2000. The plan was proposed by President Clinton and enacted as part of the Medicare Modernization Act of 2003. The MMA or Medicare Modernization Act established a standard drug benefit that all part D plans must offer. It states that all individuals who are signed up for Medicare Part A and/or Part B are eligible for mostly self administered prescription drug coverage.

The plan offers standalone Prescription Drug Plan (PDP) for drug coverage only or the beneficiary can join a public Part C health plan that jointly covers all hospital and medical services including but not limited to prescription drug coverage. Plan D covers different benefit structures and each plan chooses which drugs they wish to cover. The plans do however, cover at least two prescriptions drugs in the 148 categories of different drugs.

Medicare part D
Source: innovative insurance solutions

Premium: The average Plan D premium for the year 2018 is $34. This may however change based on your choice of drug coverage structure and on the State you live in. Also, if you don’t sign up for Part D when you’re first eligible, you may have to pay a Part D late enrollment penalty. There is an additional clause that higher income consumers may have to pay more as premium for Medicare Plan D.

More information on Medicare Part D

The table below will give you a visual of how much an individual must pay as part of the plan D premium based on his or her income as declared while filing his or her income tax returns.

Individual Income: Joint Income: Part D Monthly Premium:
$85,000 to $107,000 $170,000 to $214,000 $13
$107,000 to $133,000 $214,000 to $267,000 $33.60
$133,000 to $160,000 $267,000 to $320,000 $54.20
Over $160,000 Over $320,000 $74.80

Deductibles, copayments and coinsurance:

Most Part D plans also have an annual deductible. This is the sum you must pay out of your own pocket before the plan starts to cover your drugs. The maximum deductible amount is $405. Bear in mind that some plans have $0 deductibles, so one must choose wisely when enrolling under part D plans.

Some plans have a fixed dollar amount when it comes to copayments. Others make you pay a certain percentage. This is a sum you pay when you purchase the prescription drug from the pharmacy. This sum depends upon the drug you choose to buy. It depends upon factors such as whether or not the drug is a generic brand or if the drug has a specific brand name. In 2013, the standard benefit required a $325 deductible payment by the beneficiary, then required 25% coinsurance payment by the beneficiary of drug costs up to an initial coverage limit of $2,970. Once this initial coverage limit is reached, the beneficiary had to pay the full cost of his/her prescription drugs up until the total out-of-pocket expenses reached $5,000 (excluding premiums and any expense paid by the insurance company) minus a 52.5% discount in this gap, referred to as the “Donut Hole”.

Medicare part d donut hole
Source: medicare amarillo

Once the beneficiary reaches this threshold he or she is eligible for catastrophic coverage. During catastrophic coverage, the beneficiary pays the greater of 5% coinsurance, or $2.65 for generic drugs and $6.60 for brand-name drugs.

For instance, you may have to pay $5 for a generic drug, $25 for a preferred brand name drug and $40 for a non-preferred brand name drug.

Medicare part d cost
Source: multi brief

There are many plan structures under the part D program making the decision of choosing a plan for yourself slightly arduous. One must assess his or her drug needs carefully before signing up for specific programs under the Medicare Part D Plan.

Read more about the hows and whats of medicare part D. You can also contact our experts here at Flagship Financial for professional consultation on Medicare part D