Category: Retirement

Medicare Insurance

by Jim Wahlberg

It’s that time again…mailboxes will be filling up, advertisements will be falling out of the newspaper, and every other commercial will announce it.  What is it?!? It’s Medicare enrollment season!  Ready or not, October 15th begins a new Annual Enrollment Period (AEP).  I get a lot of questions this time of year so I thought I would try to answer some of the most often asked questions in this post.

What is the Annual Enrollment Period?  The AEP is a timeframe that allows Medicare beneficiaries an opportunity to either enroll, disenroll, or change Medicare Advantage or Medicare Prescription drug plans.  This time period does not apply to Medicare Supplement plans.

What are the dates of the Annual Enrollment Period?  All changes need to occur between October 15th – December 7th.  We can begin meeting with people starting October 1st to discuss the benefits for the upcoming year.  However, we cannot accept any applications until October 15th and we cannot submit any applications after December 7th.  There are almost no exceptions to this rule.

Do I have to call or sign anything to keep my current coverage?  Generally, NO.  If your current plan is continuing into 2019, you’re satisfied with the way it worked, and you understand the upcoming changes in coverage, then you do not need to do anything.  A general rule of thumb is not sending your phone number to a mailer you have received unless you would like to receive calls from the source of that mailer.  If you do have question about Medicare coverage, feel free to call our office and we’ll be happy to answer any questions you have.

Is there any cost to meet with your office to sign up or make changes?  No!  You don’t pay anything to meet with us and you will not pay any more buying a product through our office compared to buying it directly from the company.  We are independent brokers representing most of the major insurance companies in our area.  We’re happy to discuss your current plan and make recommendations for change only when it benefits you.

Don’t let the Annual Enrollments Season overwhelm you.  Please give us a call if you would like a personal review of your coverage for 2019.

Retirement With A Purpose

by Ron Bare

Bare Wealth Advisors is making 2018 a year focused on purpose. One topic that should be discussed in this context is the subject of retirement. Many studies have shown that people who retire from work without a plan or purpose for the next phase of life are more likely to be discouraged, depressed, and disappointed about their life. Statistics also show that those who retire and have no purpose do not live as long as those who have a purpose clearly defined going into this transition. So this begs the question: How do I retire with a purpose?

Here are a few strategies that may help you plan for a purposeful retirement:

  1. Consider how to spend the extra time on hand: On average we spend about 25% of our time each day at work – that is a considerable amount of time. Rest and leisure are nice and can use some of this time but if all of it is used for rest and leisure you may find yourself in the statistics above.
    • Action Step:  Make a list of 5 – 10 areas of life you wish to be more intentional in such as health, family, travel, service, etc.   Then determine one or two ways to take a step to live  more intentionally and purposefully in these areas.
  2. Define your work: We were made to work.  In Genesis, God made Adam and Eve and put them in the garden to work and take care of what was created. God is the ultimate Creator and humans created in God’s image are sub- creators. We are designed to take what God has created on the earth, improve it, and build upon it. Each person has been created with unique gifts to be used in this creation work.  Part of our purpose is our work during our careers but even after “retirement” we can find work that fits our gifts and abilities which helps to improve the world around us. Ron Blue uses the term “re-hirement” to describe retirement.  Personally, I think this is a good way to look at retirement in that it signals a transition to a new phase rather than a complete stopping of work all together.
  3. Define “How much is enough?”:  After you know what your purpose and plans are for retirement, you should be able to determine how much money will be needed to fund your retirement planning goals. Saving and investing to be able to fund your goals is prudent planning and can help you live a “re-hirement” strategy of your dreams. In this process I have seen that determining how much is enough and setting personal financial finish lines can be part of an intentional plan and help you live retirement on purpose. Excess funds can be used to help you do more than you thought possible in some of the areas listed above. Wealth can be used in a variety of ways when you have an intentional plan for your family, ministry/service work, a new business, community improvement, health and education, etc. Part of your work in #2 above can  be strategically allocating financial resources to the areas that are your heart’s deepest desires – I have seen this to be very fun and fulfilling “work”.

Like most areas of life, retiring on purpose takes some planning and intentional work.  However the results of this work can lead you to a fulfilling and purposeful “re-hirement”. Many people in life start strong but only a few finish strong.  Let’s be a generation that finishes strong by living our remaining years on this earth on purpose!

Five Reasons to Have Money in a Savings Account

One financial recommendation clients sometimes think is boring and unnecessary is to have money in a savings account. We normally recommend that a working family have between three to six months of their living expenses in a savings account.  For a retired family, we recommend having up to one year of living expenses in a savings account. For a business or a nonprofit organization, we recommend they have at least one month of operating expenses in a savings account. With that in mind, here are five reasons why it makes sense to have money in a savings account:

1. For unexpected expenses

Whether you experience the loss of a job, unexpected healthcare costs, or an unexpected automobile repair, there always will be things that are unexpected financially.  If these costs are more then we can cover with our normal income, having money saved is a great way to cover these expenses.

2. To avoid borrowing

You may need a vehicle, want to go Christmas shopping, or just have some things that you want to fix up around your home.  If you don’t have money saved for these, you will need to borrow for these expenses.   By borrowing money for these expenses, you will have to pay for them over a number of months or years; and usually you will pay interest on the money borrowed. This may mean that a simple Christmas shopping trip could cost you a lot more then what you planned.

3.  To meet someone’s need by giving

Paul tells us in II Corinthians 9:8 that we should “have an abundance for every good deed”.  If your neighbor loses his job, the local fire company is having a fund drive, or your church asks you to consider helping a missionary that is in need, you can always be ready to give with money that is in a savings account.

4. Be able to take financial risks

Knowing that you have a surplus set aside in a savings account, allows you to take on the risk of losing money when initially opening a business, buying a real estate investment, or purchasing the stock of a company. Even if these investments lose value or fail, you can know that you have some stability by having money set aside in a savings account that is not at risk of being lost.

5.  God says that it’s wise to save

Proverbs 6:6-8  “Go to the ant, you sluggard; consider its ways and be wise!  It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”

The goal for money in a savings account is for it to be safe and available. That means the money is not at risk of being lost where it’s invested and you can get to it quickly if needed.  With that in mind, here are a few places to consider saving money.

1.  Your local bank savings or money market account

2.  An online bank savings or money market account

3.  A money market mutual fund

If you have questions on how much you should set aside in a savings account or where to invest it, please give our office a call. One of our advisors would be happy to talk with you.

by Ryan Kurtz

Medicare Insurance

Medicare insurance is a topic where a fence analogy works well.  You may be on the side of the fence saying “I’m too young to be thinking about Medicare”.  If that’s the case and you don’t read further, feel free to forward this to someone who may benefit.  You could also be on this same side of fence saying “I’m not ready to admit to turning 65 and all of this insurance stuff is overwhelming”.  That response is understandable.  Age 65 is a milestone birthday and the amount of mail that you receive reminding you of that can be daunting!

The other side of the fence has all the “seasoned” Medicare beneficiaries.  You may have been on Medicare for a few years now and while you continue getting all of the marketing information each October during the Annual Enrollment Period, overall you’re satisfied with your insurance plan.  Maybe, more accurate, is you just don’t want to think about changing your plan.

Finally, we have the middle of the fence sitters.  If you’re one of these individuals you may have resigned to the fact that you are now Medicare eligible.  You have read bits and pieces of the marketing information; you’ve talked to a few friends about their insurance plan; maybe you even attended an insurance company meeting discussing those plan details.  At this point, you’re looking back and forth wishing you didn’t have to make a decision or that the decision was already made.

Regardless of where you are sitting, feel free to give us a call to discuss this part of your insurance plan.  We can help make this process clearer so you can enjoy the green pastures of Spring weather and peace of mind!

-Jim Wahlberg

Preparing for Misfortune

by Ryan Kurtz

Right in middle of the Bible, there is a book called Ecclesiastes written by one of the wisest and wealthiest men that ever lived.  His name is Solomon.  In Ecclesiastes 11:2 Solomon gives us a very useful verse that is sometimes overlooked.  It says;

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.   

It is interesting to me that Solomon says that we do not know what misfortune will happen.  You mean we can’t predict it or see it coming?   Sometimes, we can’t.  How many people saw the dot com bubble burst coming in the late 90’s or the financial meltdown coming in 2008?  Those and a number of other times of “misfortune” are current examples of why Solomon tells us to divide our portion.

The word that is often used in the financial industry for divide is diversifying.

Let’s take a look at some of the places that people currently diversify their wealth.  None of these investments are bad places to invest, but as Solomon warns us, too much of your assets into any of these may be putting you at increased risk when “misfortune” occurs on the earth.

  • Money in the Bank – It is good to have some cash available. If your car breaks down or an unexpected expense arises, it is good to have money safe and available.

The risk to having too much cash is that you are constantly losing purchasing power to inflation.  We estimate that each year there is around a 3% increase in expenses due to inflation.  If you make 0.25% in a bank account, you are losing 2.75% of your money to inflation.  Having too much in cash sometimes can be a bad thing.

Most financial advisors recommend having 3 to 6 months of living or operating expenses in cash.  It is also advisable to have cash set aside for any purchases you may need to make in the next 3 years.

  • Real estate – Real estate has been a great long term investment. Not only can you collect income from owning real estate that someone else is using, you can increase the value of investment by the property growing in value over time.

The risk to owning real estate is the potential of the real estate market contracting or collapsing.  This has happened before and could happen sometime again.  Another risk to real estate is lack of liquidity.  If you need money and it is tied up in real estate, it could take several months or even years before you can sell it depending on the current state of the market.

Owning real estate should be done with resources that you can keep invested for the long term.  Avoid excessive amounts of debt when buying real estate and, if possible, don’t buy it all in the same location.

  • Stocks – Owning stocks has been a great investment for future growth. The risk to owning too much of one company is the potential to lose a lot of your money quickly.  A company could lose ½ of its value or more over short periods of time.

Buying stocks is often best done within mutual funds.  This way you can invest into stocks while not owning too much of any one company.

  • Mutual Funds – A great and relatively inexpensive way to invest is in a mutual fund. A mutual fund is where a number of investors pool their money together and pay someone to manage it for them.  You can use mutual funds to invest in different assets like stocks or bonds with someone else doing the work of looking for good investments for you.

A risk to owning a mutual fund is the potential loss of value of the investments that it is invested in and therefore, a loss to the investor.  Most mutual funds are not good short term investments for this reason.

  • Business – One of the places people often invest their wealth is into a business that they run or manage. Most people like investing into their business because it is what they understand and they can see firsthand how their money is being used. Sometimes they are forced to invest into their business because investing into the business may be what keeps the business going.

When possible, it is advisable to take money out of the business to invest in other businesses or real estate.  Since an income or salary often will come from a business they own or operate, it may make sense to make it a priority not to have all of your assets invested here.

So, what is the best investment to prepare for misfortune?  The best investment you can make may be to put some time and resources into putting together your own financial plan.  A financial plan will tell you which investment or combination of investments is best for you.  All of the investments listed are good ones.  A good financial plan will tell you how much you should invest into each so you are prepared when misfortune does occur on the earth.

If you need help putting together a financial plan for yourself, you are welcome to contact the Bare Wealth Advisor office to set up a meeting with one of our advisors.  We would be happy to help you.

Qualified Charitable Distributions

Qualified Charitable Distributions

In the past, we have helped several of our clients make distributions from their Traditional IRA accounts to charities.  The past several years, Congress waited and would then temporarily (and sometimes retroactively) pass laws that allowed these Qualified Charitable Distributions, which satisfies an account owner’s Required Minimum Distribution (RMD) in a given tax year without being taxed on the distribution.

On December 18, 2015, President Obama signed into law the Protecting Americans from Tax Hikes (PATH) Act of 2015, which reinstated the IRA Qualified Charitable Distribution permanently.   This gives you the opportunity to make a gift of up to $100,000 from your IRA to a public charity(s) without incurring a tax bill on the distribution.  For clarity sake, this distribution and gift cannot be then claimed as a deduction for tax purposes.   

Who qualifies?

Owners of Traditional IRAs (not SEP or Simple IRAs) who have attained the age of 70 ½ (on the date of distribution) may distribute directly from their IRA to a charity up to $100,000 per year and exclude the contributed amount from their gross income for tax purposes. This amount can be counted towards the IRA’s annual required minimum distribution.

Who can receive IRA distributions?

The IRS has stated that any organization who is eligible to receive tax-deductible contributions can receive these Qualified Charitable Distributions, but there are some exceptions including a donor-advised fund, a supporting organization, a private foundation, and any distribution in connection with a charitable gift annuity.

If you are interested in doing a Qualified Charitable Distribution or know of someone who is, please contact our office to schedule a meeting to discuss the concept in more detail with your specific account and objectives.

How Much Is Enough?

by Ryan Kurtz

This is a question that is asked over and over to financial advisors by their clients.  “How much money is enough”?  Most of us want to know what we need to do to plan to “have enough” for our lifetimes, but how much money is enough?

Amounts are very important to us; from “How much will my annual income be?” to “How much money I will owe in taxes this year?” amounts of money for different things in our lives are important.  So, what is the amount of money that is enough for us?

When John D. Rockefeller, who at the time was one of the richest men in the world, was asked how much enough is, his response was, “Just a little bit more”.  He must have been a very greedy wealthy man, right?  When you have as much as he did, why would you need more?

In Luke 19, we are told a story of a rich tax collector named Zacchaeus.  In the story, Jesus told Zacchaeus that he was going to his house that day.  After welcoming Jesus happily to come to his home, Zacchaeus stopped and talked to Jesus about amounts of money.   That is a very interesting response to Jesus telling him He is going to his house.   Zacchaeus then goes on to tell Jesus that he will give ½ of all he has to the poor and give back to anyone he has cheated 4 times what he cheated them.  After telling Jesus these amounts, Jesus said to Zacchaeus, “Salvation has come to your house today”.  One chapter before, in Luke 18, Jesus comes across another rich man who asked Jesus “What must I do to inherit eternal life?”  After a little discussion Jesus answers with an amount, “Sell ALL you possess and give it to the poor”.

So here is my question.

If Zacchaeus gives half of all he has to the poor and salvation comes to his house and one chapter before Jesus tells a rich man you need to give all you have to the poor to have eternal life, what’s the deal?  Why are the amounts different?  How much IS enough?   How much did Zacchaeus have left after he gave to the poor and paid back those he cheated anyway?  Ten dollars?  Ten million dollars?  We’re not told the amount but it’s more than the rich man who gives everything he has away and has nothing.  So, why are the amounts different?  How much is enough?

In Genesis, God commanded man to “Be fruitful, multiply and fill the earth”.  Does that mean its ok for my wealth to grow?  I mean it does say to be fruitful.  He says the same thing again to Noah in Genesis 9, to “be fruitful and multiply”.  In Jeremiah 29, God tells his people “not to decrease”.

So when John D. Rockefeller says that enough is “Just a little bit more”, that sounds a little bit more like a word from God who commands us to be fruitful then a word from a greedy rich man, doesn’t it?

I believe God’s heart for all believers in Him is to increase in every way possible.  Not to increase just for the benefit of increasing, but to increase for the benefit of being a blessing to others.

I believe God is looking for faithful people who will manage everything God gives them not just to see how much money we can accumulate in our lives, but to use it to be a blessing to others and accomplish all God has for the money and resources He has entrusted to each of us….No matter how much that is.

It’s amazing to me that even when standing before the Lord He will take into account all I have and what I have done with it.

 “Then the King will say to those on His right, ‘Come, you who are blessed of My Father, inherit the kingdom prepared for you from the foundation of the world.  For I was hungry, and you gave Me something to eat; I was thirsty, and you gave Me something to drink; I was a stranger, and you invited Me in; naked, and you clothed Me; I was sick, and you visited Me; I was in prison, and you came to Me.’   Matthew 25:34-36

So how much money is enough? Should I give half of what I have away like Zacchaeus?  Should I give all I have away like the rich man was told to do?

Here’s my definition.

Enough is when we have an amount of money or possessions that takes our trust off of God and places our trust in our amount of money or possessions, when that dollar amount is crossed, that is when we have enough.  For the rich man in Luke 18, he wasn’t able to handle one penny before that line was crossed, for Zacchaeus it seems his line was crossed at around half of all he had.  What amount is that for you?

I believe God’s heart for us is to be able to continue to increase in every way, including in our bank accounts, relationships, in our businesses and never cross the line to taking our trust off of Him. That has been God’s heart for His people since Genesis 1, continued increase in every area of our lives while always acknowledging with our lives and actions, the One who brings the increase.   I believe then, we can all live the most fulfilling lives possible and most fully advance the Kingdom of God during our time on earth.

So, how much is enough?  I hope for you, if you can handle it, “Just a little bit more.”

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