Today’s Podcast we have special guest Rosean Birch uncovering the confusing world of  Medicare. I talk about retirement income and the need to form a budget in financial planning.

Welcome to another edition of the 1715 Treasure Coast Financial Wellness Podcast. My name is Thomas Davies, I'm a wealth advisor here in Stewart, Florida, and good to see everybody and if you're on YouTube or listening on the podcast, welcome. It's been another interesting week in the market, more market volatility. This makes five weeks in a row, make it six weeks in a row, that we've had this volatility.

Have we had enough? I know I certainly have. Some interesting comments this week that have been made. Jamie Dimon came out and said that he thinks that the market's going to go down another 20%.

That would put us at losing half the stock market. What's your opinion? Let me know in the comments. Don't forget to like and subscribe and certainly let's hear those comments.

It's certainly very interesting. The volatility doesn't feel good and you know, it's just not good. It's not good at all. It doesn't feel good, it doesn't feel right.

We're down 600, 700 on the Dow one day and the next day we're up 600, 700 points. And so, how is your portfolio reacting to all this market volatility? Is it going down with the market? Is it going past what the market indexes are showing or is it going up when the market's going down?

And that would be a great thing. But the likelihood of it, unfortunately, all things are pointing down. The CPI number came out today, Thursday, and it's basically saying that we're going to see more Fed raises at 75 basis points here in November and probably another 75 in December. And you know, that certainly is going to knock things down a little more.

It's been an interesting day in the market so far today. We were down over 500 on the Dow and now we're up 500. So you know, it's certainly been a rocky boat. So this week we have a special guest.

We're going to have Roseanne Birch, a Medicare consultant broker on the show. She's going to talk all things Medicare. Very excited about that. We're going to talk a little bit about income planning in retirement and also budgeting, which goes right along the lines of the income planning and retirement.

So with that, here we go. Okay, so income planning in retirement. How do you do it? What do you do?

And how can you plan for it? Well, there's a lot of ways out there right now that you can plan for income and you can take your hard-earned dollars and invest them in a product, an ETF, an annuity, maybe a mutual fund, something that's going to pay you a higher yield. Certainly with the interest rates going up, it's created a little more income opportunity in the market. Now there are ways to do this and some of them will require risk of your principal.

And that's something that you have to consider is how much risk are you going to take with your principal. And then the next question is, is that income-producing product that you're purchasing, will that income be steady and stable? So those are two questions you want to ask is, is the income stable and is there any risk to my principal? I've long since joked that John Wayne the Duke always said, I don't care about my return on principal more than my return of principal.

So how do you do it? You look at those income-producing products and you make sure that those two questions are answered, whether it be an ETF, an index fund, or some type of annuity or insurance product. You know, those are a couple of things that we use here and we're looking at income replacement when you go into retirement. Because once you stop working, that income stops.

So how are you going to replace it? Most people, it's social security. If you're lucky enough to have a pension, maybe you'll get a pension and social security. But for a lot of us, it's going to be relying on the income that we have.

Now some have real estate and they have income-producing properties. That is another way to make income. I personally don't like to be a landlord. So I will look at something what is called a real estate investment trust.

And that is where the company holds the mortgages and the rents and I don't have to be a landlord. All I have to do is collect a check. And what that REIT is, is a collective group of mortgages and rent payers. And I don't have to worry about being the landlord.

So one of them is called a REIT, R-E-I-T, real estate investment trust. That is something that you can look at to produce income. Once again, there are ETFs. There are mutual funds that are specific to income.

Now I'm not going to go into specific products. Not to endorse any particular products. But give me a call and we can talk about some of them. Some of them I prefer.

Some of them I do not prefer. I mentioned last week Morningstar.com. If you have a symbol, you can go right in there. Put that symbol in Morningstar.com and do the research yourself.

And it will give you some history. It will tell you about those funds or stocks, whatever it is you're looking for income. And it will be a way for you to do some of that research. So that is a little bit about income planning and things that we do here.

The next thing I want to talk about is budgeting. Budgeting is such a big part of financial planning. You know, whether you have millions of dollars, whether you have $5,000. You need to know if you are in a surplus or a deficit.

And the only way you can do that is to sit down and find out exactly how much it is you're spending a month and how much income you have coming in, generally on a monthly basis. Now that doesn't have to be down to the dollar, right? I mean it can be within a few hundred bucks, depending on the size of your budget. It could be a few thousand dollars.

But regardless of your income and how big your budget is, you need to know how much you're spending on a monthly to annual basis and whether you have that surplus or deficit. Some people go, well, you know, I know that I make enough money and I really don't have to do that. Well, I think that's a bunch of malarkey. You have to do it.

It's something that you want to do. Have a plan on paper. Have something to look at that you can reference if things start to go south or a different way than maybe they have in the past. Certainly we're seeing a slowdown in the economy.

You know, the Fed has come out and they've said, we're going to slow down your business and we're going to make your real estate a little less valuable, or a correction is the term that he used. So in my description, I'm going to put a link to a simple Excel spreadsheet that you can It's very simple to plug and play. You don't have to be a computer wizard to use it. You just plug in your numbers.

You take out the numbers, the example that are in there, and it's going to give you a nice looking spreadsheet that you can use. So have a budget, you know, and know if you have that surplus or that deficit in your plan because it makes all the difference in the world. As you are growing and you are learning about financial planning, that next step, once you have a budget, is having an emergency backup funds. You know, you have to have some type of an emergency funds.

I call it the dishwasher, the refrigerator, the car breaks, something breaks, something goes wrong, make sure you have an emergency fund. Some people like three to six months worth of salary, generally a minimum of three, and if you can do six months worth of savings, that's great. You know, life happens, right, versus the alternative word. Have a plan, you know, have a backup.

So you have a budget and you have an emergency fund in case things go awry. So that's a little bit on budgeting, a little bit on financial planning. Hopefully you find that helpful. And with no further ado, we're going to go in and bring our special guest.

Well, Roseanne, thank you for coming to the broadcast. I appreciate having you on here. Roseanne Birch, she is our Medicare broker consultant or Medicare consultant broker. And with more than 15 years experience, Roseanne, welcome to the show.

Good morning, and we're going to talk a little bit about Medicare and, you know, what's out there and, you know, a lot of changes this year to Medicare. And I know that, like a lot of seniors or as they're turning 65 or even before that, it's just a barrage of mail that you get. And you know, it's really complicated if you know nothing about it, and there's so many options out there for everyone qualifies for Medicare. Nobody understands it.

That's why I decided to make it my level of expertise as an insurance agent. Before about six months before people turn 65, they start getting bulk mail from every single Medicare company. There are supplements, Part D plans, there's HMOs, PPOs, they can't make sense out of any of it. So what I do with my clients is I sit down with them a few months before they turn 65, I explain every single plan that's available to them and help them make a choice for whatever plan works best for them.

And so a lot of that mail that we get, you know, or I should say that, you know, you turn 65, you know, should they save that? Should they look at that and say, hey, this is something I got in the mail and, you know? Yeah, they can, you know, because they have questions about it, or they have, you know, they have newspaper ads that promise them things, or they see commercials, you know, saying you can get money back on your Medicare, you don't have to pay for Medicare, you get free benefits. I can explain all of those things.

Most of it is true. Most of those benefits are available to everyone. However, some of them are only available to a certain niche of people, that's people that are in a very low income. So I explain it, I explain that to everybody.

So, so, so everyone's available for, so regardless of income levels, you know, and that's a question that I'll get asked is, you know, gee, you know, do I make enough money? Do I make too much money? You know, am I still able to get Medicare? Right.

Okay. So basically the way Medicare works is that once you turn 65, you are eligible for Medicare as long as you or your spouse have worked at least 10 years in this country. If you haven't worked at least 10 years in this country, you can buy into Medicare. But if you've worked at least 10 years in this country, part A of Medicare, which covers 80% of hospitalization is free to you, then you sign up for part B of Medicare.

Now that currently isn't free, that currently is $170 a month. That covers 80% of doctor's visits, lab fees, and so on. There's basically four parts to Medicare. There's parts A, B, C, and D.

Part A is hospitalization. Part B is doctor's visits. Part C would be a supplemental plan to pay the 20% that parts A and B don't pay. And then part D is a prescription drug plan.

So basically you need all four parts of Medicare. Now there's certain ways to do this. You can purchase a part C supplement. That gets a little bit confusing because the part C plans are A, B, C, F, K, L, and N.

So depending on what plan you choose, you either pay for certain benefits or they're covered completely by the plan. Another option, which is very popular here in South Florida, is an advantage plan. The advantage plans cover parts A, B, C, and D, so you have full coverage. They have a zero monthly premium.

Most people can't understand how an insurance company can cover all of Medicare benefits with a zero monthly premium, but they do. And the way they do this is because that insurance company is taking you off of the Medicare rolls. That means they're taking you off of the federal government, and they are personally going to handle your Medicaid. And so one of the questions that I get also, so when you hear the word broker or consultant, it usually means you have to pay that person.

So maybe you can answer the question. So if someone wanted to reach out to you, are they going to have to directly pay you, or is that paid through the insurance? As a matter of fact, my fees are paid by the insurance company. So for example, when I sign a company, when I sign a client to a plan, they get approved by the plan, that plan pays me to sign them up.

And by law, every plan must pay me the same thing. So there's no reason when I sit down with a client, there's no reason for me to steer them towards one plan or another, whether they choose this company, that company, whatever plan they choose, that company will pay me. And every company must pay me the same thing. For the client, there are no fees for my service.

And so that's kind of how I work here on a best case scenario where what's best for the client. So basically, you work kind of in that fiduciary standard where it's what's best for the client and not necessarily on the commission standard. Yeah, and I think that's important. Once again, like I said, when people hear the word broker or consultant, they're like, okay, well, I'm gonna have to pay this person.

So you don't get paid directly from the person that it's the insurance companies. And so now, we've talked a little bit about getting started. So, you know, tell me how that process works. So I'm turning 65.

I've got a ton of this mail. I'm going to call you because you're the expert and the professional. And then tell me a little bit the process of what happens next after, you know, we've discussed and you're going to meet with us. Okay, well, the first thing people want to know is should they keep their company plan?

If they're working for a company that's offering them insurance, should they keep that plan? Or should they go to Medicare? Basically, some insurance, or I'm sorry, some companies would like you to come off of their group plans when you turn 65, because you are going to cost them more money. As long as you have a group plan, you can keep that group plan forever.

People feel that they must go on Medicare or there's a penalty. The only time there's a penalty, not choosing Medicare when you turn 65 is if you don't have other coverage. If you're on a group plan, and that plan will cover you till you're, you know, 70, 75. Sometimes it's best to stay on that plan.

Otherwise, if you're just looking for Medicare at the age of 65, I come sit down with you, I explain every plan that's available to you. I help you make a choice, fill out the paperwork, we send the paperwork in, or sometimes I do just a, you know, an online application for them. They will then get a call within 10 days asking, did the agent explain all of the benefits? And then usually the first, whatever day of the month your birthday is, your Medicare always starts the first of that month.

So the benefits start the first of the month, they have all of the benefits. But the good thing about those plans is that you get to try them out. You're not tied to anything. That means that if you have a Medicare plan that you've had four, five, six months, and you're not quite sure it's the right plan for you, you can make a change.

Every year, anyone on Medicare will get a letter telling them what the proposed changes are going to be for the next year. They have the choice of keeping the plan that they have or switching to another plan. And that's again where I come in. Because as a representative for all of the major insurance companies in South Florida, I can tell them, well, your plan is this, and that's great.

But if you'd rather have dental coverage, you might want to choose a different plan. If you would rather have a gym membership, you might want to choose a different plan. I can explain all of the basics of all the plans. I can facilitate the change for them.

That change becomes effective January 1st. And they've got a new plan. So that's wonderful information. And so one of the questions I know that I also get is, what is Medicare going to cost me?

And you talked about some changes. And so maybe we could talk a little bit about the current cost of Medicare. And are they going to go up? Certainly, everything that is going into my refrigerator has gone up.

So is Medicare going to go up along with it? Surprisingly, it's going down. The current cost for the Part B premium is $170.20. It's dropping down next year for 2023 to $163.

Now, in order to be a part of any Medicare supplemental plan or Advantage plan, you have to be entitled to Part A and you have to be enrolled in Part B. So you do have to pay that $163 to be a part of Medicare. Surprisingly, a lot of the companies in South Florida have give back plans. They will actually give you back either all or a portion of your Part B premium.

And again, it's hard to explain how the insurance companies can do this. But when you sign up with an insurance company to manage your Medicare, you're basically letting the federal government off the hook. So the federal government says, OK, here's the money that we're taking out of Social Security. We're going to give you that.

And now she's yours. You're going to manage her doctors, her hospitals, her prescriptions. You're going to take care of everything. And the insurance companies take this risk.

So they basically are taking you off of original Medicare, taking you off of the federal government. And now you have their plan, whether it's Florida Blue, Aetna, United, Humana, any of the major insurance companies. Now, so because we have listeners across the country, this is pretty specific to Florida and you're located in South Florida. But as we know, Medicaid or Medicare, excuse me, is a federal subsidy.

And is it state specific? Are there different rules for different states when it comes to Medicare? There are different rules because Medicare is a federal agency, but there are different plans and different states, actually different counties are able to offer different plans. So, for example, in South Florida, all of our Advantage plans, these Medicare Advantage plans have a zero monthly premium.

That's not true around the rest of the country. Because we have such a large aging population in South Florida, these insurance companies are able to do this with a zero premium. That's not always true in other states or other counties. All right, so we don't want to say it's great to retire in Florida.

The other thing, too, that's important to know is when you keep Parts A and B with the federal government and purchase a supplement, you're only supplementing what Medicare gives you. Medicare doesn't give you dental, vision, hearing. They're not going to give you transportation. They're not going to give you a gym membership.

They're not going to give you money to spend for over-the-counter items. These Advantage plans will do this. So, in many cases, joining up with an Advantage plan, you are getting so many more benefits than you would with even original Medicare. For example, these plans in South Florida will give you $300 towards eye care.

They'll give you dental benefits. Some of them are actually covering dental implants for next year. There's free transportation. There's a free gym membership.

There are cards where people can take these cards to grocery stores. They can get groceries. They can get over-the-counter items such as, you know, toothpaste. All these different benefits are available and they're only available for the Advantage plans.

So, people who choose to stay with original Medicare, purchase a supplement, purchase a Part D drug plan, they're paying all of this money every month. That's kind of like your car payment. At the end of the year, if you don't get into an accident, you don't get your car payment back. That's how it is with these Medicare supplements.

If you don't use it, you don't get anything back in return. And so, are these some of the new changes for this year? Or, you know, maybe we can talk a little bit about that. You know, I think I know you've mentioned that there's some big changes coming to Medicare.

And maybe we can talk about some of those changes that, you know, happened, you know, from last year to this year. And, you know, people that are currently on Medicare will probably tune into this and say, okay, you know, this is some great information that maybe I didn't even know. I could get a gym membership. I can get new teeth.

I mean, these are some big things to, you know, people that are on fixed or limited incomes. So, the thing about the changes that are really pretty amazing to me, is that these Advantage plans that do give back, you know, that they will give back $100, $150. The way they give this back is they put it back into your Social Security check. So, Medicare this year has taken out $170.20 out of my Medicare, out of my Social Security check to pay for my Medicare.

If I choose a give back plan, or a plan that's giving back $100, for example, as of January of 2023, I'm going to get an additional $100 put back into my Social Security check from that insurance company. Now, in the past, these give back plans have been available, but they've been available only on HMOs. And, you know, with an HMO, that's a health maintenance organization. That means you've got your primary care physician.

He maintains your health. If you want to see, you know, a specialist of any kind, you have to go to your primary doctor, get a referral. He refers you out. Some people like that.

Some people don't want to be bothered with that. The surprising thing for me is that next year, there are PTOs that are giving back the full amount of Medicare Part B. So, I could sign up with this plan. As of January, I'm going to get an extra $163 back into my Social Security check, and still have the option of any doctor, any hospital that will accept Medicare.

So, if you're a healthy person, and you don't go to the doctor a lot, maybe except for that once or twice a year checkup, this is a great thing because, you know, you're going to get that money back. Exactly. And I always tell people, you know, they give it to you with one hand, they take it back with the other. So, on the plans that don't give back, obviously, you have, you know, lower copayments.

On the give back plans, your copayments are a little bit higher. But, again, based on your medical history, and, you know, this is nothing that I choose. This is where I sit with a client, and this is where the consultation part comes in. I go through their, you know, their health history to help them make the right choice.

And the best thing is, regardless of what choice you make, but regardless of what plan starts January 1st, you have three months to sort of try out that plan. January, February, and all of March are the new open enrollment periods. This started in 2020. If you start a plan January 1st that you change to, and you get partway through the month, maybe you're into February, even as late as March, you're not quite happy with that plan, you can cancel that plan, switch back to the plan that you had previously, or any other advantage plan.

And I think probably one of the other questions I get, let's say I turn 65 in, you know, March. I don't have to wait till October to sign up for Medicare, right? It's based on my birth date, not necessarily open enrollment. I think…

Open enrollment is only for people who currently have a plan and are choosing to make a change. That's a good question because I had a client that was turning 65 in February. She was contacting me the previous October, she kept saying, we have to do this, we have to do this, time is running out. And I told her open enrollment is only for people who currently have a plan and are choosing to make a change.

Her Medicare wasn't even going to start. Say that one more time for our viewers and our listeners. Open enrollment is for who? Open enrollment is only for Medicare clients that are currently on a plan, choosing to make a change.

Perfect, perfect. So, and I know that's something that comes up. You know, people say, oh, well, you know, I've got to wait, or I'm turning, you know, 65 in the middle of the year or beginning of the year, and I've got to wait to get that plan. And they don't.

So that is great information. What do you see right now? You know, the biggest challenges when you sit with clients and you're going over the different plans, what are the biggest challenges you're seeing right now in that space? The two main questions I have with clients is, is my doctor covered by this plan?

Basically, if you're choosing an HMO, you must see doctors on that plan, unless it's an emergency. If it's a medical emergency, regardless of what type you have, you are covered everywhere in the world for medical emergency, regardless of the plan that you have. So if I'm on a cruise, and if I'm on a actual quick, if I'm on a cruise, you know, to Spain, and I get sick and I fall, I'm going to be covered. I have insurance.

Covered. Absolutely, you're covered. I have clients that took a world cruise and the husband got sick. Every port that he stopped in, he went and saw a doctor.

He paid the doctor. He got prescriptions. When he came back, he had bills that weren't French. He had some bills that were Italian.

He's had some bills that were Greek. We put all of it together, sent it to the insurance company. He was reimbursed for everything because it was an emergency. Yeah, I think that's a big concern too.

What a lot of retirees like to do is they love to travel, right? They worked all their lives and saved up money to maybe travel for the next few years, see family, friends, sometimes across the world, like you mentioned. And I think it's good to know that they can be covered under the Medicare plans. And for those people that are out there traveling, are there better plans than others that they should maybe look at?

And not to get too specific, but just are there ones better than other ones for people who necessarily travel? Well, I've talked a lot about the Advantage plans because they're very popular here in South Florida because they have a zero monthly premium. For people that travel, whether internationally or just around the country, for people that tell me I go and stay three months in Dallas with my daughter, then I go to Chicago to visit my son. Usually in that situation, a Medicare supplement is best for them.

When you have a Medicare supplement, you're keeping your Medicare coverage with the federal government. So they're going to cover everywhere in the country, actually everywhere in the world that will accept Medicare. And then your supplement will pick up the balance of it. So for people that travel a lot, that don't plan to be in their home state for maybe any more than half a year, usually a supplement would be a better choice for them.

Oh, that's perfect. And Roseanne, I'm going to have a link to your website, Roseanne, or we'll put your email address so people can reach out. Yes, and I will send that to you. You can add it to your website.

Yeah, we'll have that in the description on the link so people can reach out to you. And, you know, if there's anything that you can think of that, like I said, you know, the biggest challenges and, you know, you've been doing this for a few years, so, you know. Well, one of the biggest challenges is people tend to choose a plan based on whether or not their doctor currently accepts that plan. And I let them know that doctors come and go on these plans all the time.

A doctor can choose to drop a plan if they don't feel they're being paid enough. Often, a plan will drop a doctor's office if they don't think they're performing well enough. So choosing a plan based on whether or not your doctor accepts the plan isn't always the best idea. The best idea, I feel, is to choose the best plan that meets your needs financially and, you know, if you have to choose a doctor, switch doctors, switch a different eye doctor, for example, find a different dentist.

Choose the plan that's going to give you the best benefits because, in the end, the plan will be there for you. That doctor may not always be there for you. They can leave the plan at any time. Well, I'll tell you, that's invaluable information because, like you said, we talked about at the beginning here, you get barraged with all this different information of what to do, who to see.

And, you know, having a person like yourself that works on a fiduciary standard, you know, where, you know, the best interests are in the, you know, in the client's hands and you have their best interest, you know, it's an invaluable resource. And, you know, I appreciate having you on the show today. And you're welcome back anytime because it's always a hot topic. And I know, you know, certainly you're busy in October with open enrollment.

And those are for people who are already on plans and looking to make changes. You know, so thank you again and we'll talk to you in a little bit. So, thank you. Thank you.

All right, bye-bye. Well, I would also like to thank again our special guest this week, Roseanne Birch, our Medicare Consultant Broker. What a ton of information that was. And hopefully you found it useful.

And please feel free to reach out to her with any questions you may have. A link in the description will be to her email and phone number so you can contact her directly. Well, that's it for this week. Thanks again for tuning in to the 1715 Treasure Coast Financial Wellness Podcast.

My name is Thomas Davies. Don't forget to like and subscribe. And we will see you next week. We're out of here.

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