Category: Uncategorized

2020 Medicare Update

by Jim Wahlberg

In a year that has been anything but routine and normal, I am glad to bring news of something that is staying the same in 2020.  The Medicare Annual Enrollment Period (AEP) is set to begin on October 15th and will continue through December 7th.  In the days and weeks ahead, I will be looking into the plans for the upcoming year to make sure that I am prepared to discuss any changes with you.

Below are a some important frequently asked questions to help make sense of the AEP:

What is the Annual Enrollment Period (AEP)?  The AEP is a timeframe that allows Medicare beneficiaries an opportunity to either enroll, disenroll, or make changes to your existing Medicare Advantage or Medicare Prescription drug plan.  Medicare Supplement plans have separate rules for change and are not necessarily tied to this enrollment season.

What are the dates of the Annual Enrollment Period? October 1st is the “magic date” that discussion can begin about any of the 2021 plans.  If you receive information about a 2021 plan prior to October 1st, please wait to call as I cannot discuss details until that date.  If a plan change is necessary, you can sign and submit applications beginning October 15th and we can accept an application only until December 7th.

Do I have to meet, call, or sign anything to keep my current coverage? Generally, NO.  If your current plan is continuing for 2021, you are satisfied with the way it worked, and you understand the upcoming changes in coverage, you do not need to do anything.  If you have questions about your plan for the next year it would generally be best to schedule a 5 or 10-minute phone call and I could review the upcoming changes with you.  If an in-person meeting is necessary, we can set that up during that phone call.

Finally, as a general rule, when you receive the many different pieces of Medicare marketing in the mail, you do not want to send your phone number or email address on a response card unless you would like to receive a lot of calls/emails from the unknown sender of that mailer. If you have question about your Medicare coverage, please feel free to call our office or email jim@barewealthadvisors.com and I will be happy to answer any questions you have.  I hope that each of you have a great Fall season!

The CARES Act

The CARES Act is an acronym for Coronavirus Aid, Relieve, and Economic Security Act.  Below are some thoughts specific to our industry that might be helpful to you:

  • 2019 IRA Contributions: The 2019 IRA contribution deadline has been extended with the tax-filing deadline until July 15th. Make sure that you communicate with us if your contributions are intended to be for prior-year.
  • Early Withdrawal Penalty Waiver: The CARES Act also waives the 10% early distribution on distribution of up $100,000 from IRAs and plans for individuals who meet the requirements of being affected by the coronavirus. The tax would still be due on pre-tax distributions, but could be spread evenly over three years, and the funds could be repaid anytime during the three years.
  • 2020 RMDs: The Act included a waiver for required minimum distributions (RMDs) for 2020. This waiver applies to company savings plans and Traditional and Inherited IRAs. If you would like to stop your 2020 RMDs, please contact our office.
  • Charitable deductions: The Act creates an above-the-line charitable deduction for 2020 (not to exceed $300) with a cash donation to charity, this particularly useful for those using the Standard Deduction on their tax return but still give. If you itemize your deductions, the bill also modifies the AGI limitations on charitable contributions for 2020, to 100% of AGI for individuals and 25% of taxable income for corporations. The bill also increases the food contribution limits to 25%.  The prior AGI limit was 60% for individuals.  Donor-Advised Fund Limits were unchanged, so if you are desiring to maximize the individual or corporate increases, the increased giving must be directly to a qualified charitable organization.

The Bill that was passed is over 800 pages long and covers many things from stimulus, to loan programs, to one-year changes in tax laws, and more.  Please stay close to your accountants, attorneys, and bankers for applicable opportunities this Act provides.  Feel free to reach out to us if you have questions as to how this Bill impacts you and if we don’t know the answer, we’ll point you to someone who does.

If you anticipate receiving a stimulus check, it would be a good time to prayerfully consider how best to use that money since it was not in anyone’s plans as the year started.  If you haven’t been financially impacted by the COVID-19, perhaps consider extra levels of generosity to help those who have needs.

Thank you again for trusting us to walk with you on your stewardship journey.

Video Update

Please take some time to watch this video blog from our Founder and President Ron Bare.  He provides perspective on the coronavirus, the financial markets, and how to implement some Biblical wisdom in times of uncertainty.  We hope that it will be a blessing and encouragement to you during this pandemic.  Please pass it on to others to whom you think it will benefit.

Year of Generosity in Review

2019 has been Bare Wealth Advisors’ Year of Generosity. We find it helpful to create a theme each year to help us be more intentional in a certain area of our financial lives. Without intentionality in our lives we are prone to coast along with life reacting to life events and circumstances. This is true in our financial lives as much as in any area of life. As we wrap up another year, I thought it would be good to make one last effort to emphasize the importance of generosity in our lives and in the lives of others around the world.

In 2 Corinthians 8:7, the Apostle Paul tells us to excel in our acts of giving – similar to how we would want to excel in other areas of life such as our knowledge, speech, faith etc. If you are alive more than 12 years, you probably know that to excel or get better in something you need to work at it and plan for it to actually improve. Think of a professional athlete such as Michael Jordan-the best basketball player ever to play the game (sorry, Lebron James fans). Although he was naturally gifted as an athlete and basketball player, he was also the one that put in the most hours a day practicing and mastering his game. The same is true for financial management as well as our generosity. We may be naturally generous, having a desire to help other people.  However, with unlimited options on how we spend our time and money, we are often pulled away from using our resources for others in efforts to “better” our own lives resulting in more things or time commitments.

The only way to improve or excel in our effort to live a generous life is to plan, set goals, and take steps towards generosity. Begin by asking yourself: “What does generosity look like for me considering what I have been given?” The Bible tells us that to whom much is given, much is expected.  This means we have a great responsibility with what we manage. Many in America have been given much and,  we are the most generous nation in the world by many statistics. However, a deeper look into this says we have room for improvement. The average American gives about 2% of their income.  While this is slightly better at 2.6% for someone who regularly attends a weekly worship service, it still falls short in many ways considering the wealth we have in our possession. During the Great Depression, average giving percentage was 3.5% of income, despite extremely difficult times. There are many studies that show as our income increases, we give a lower percent of our income to help other people. Why?

Perhaps because we do not think about being intentional or how we can improve in this area like we do areas such as fitness, our jobs, parenting, etc. Why not set giving or generosity goals each year that push us forward from the prior year? Think about giving a bit more to help others or possibly one percent more of your income than the prior year. Think about how we can use our time to help those in need around us such as volunteering an hour more per week so we can physically help someone in a tough situation. A good exercise is near the end of the year pull out your calendar and your checkbook (or online account) and reflect on how you spent your time and money in 2019, does it align with what you most value in life? If not, set some goals in both areas to be more generous and others focused in 2020.

I read recently that if the average church attender gave 10% of their income (a tithe or tenth is often taught in the Scriptures) there would be additional resources to solve problems such as:  world hunger,  deaths from preventable diseases, the world’s clean water and sanitation concerns, all world mission efforts would be funded, and all illiteracy concerns would be solved.  Not only would these problems be solved but there would also be $100 billion left over to fund local needs in our communities. With this in mind, I could argue that if we all pushed forward with more generosity, we could drastically improve the lives of people around the world! In addition, when we take part in generous acts there is a supernatural joy and fulfillment that comes that cannot be matched by any earthly possessions.

To wrap up Bare Wealth Advisors. Year of Generosity, let me encourage and invite you to take part of generous acts of service in 2020 and beyond. Together we can move the needle of generosity from where we are today to where we can leave a legacy well beyond what we can imagine if we are intentional in this area of our lives. After 23 years of working with families such as yours in the area of financial management and decision making, I can honestly say I have NEVER met an unhappy generous person.

Tell Your Story

As you know this is our Year of Generosity and one of the interesting things about generosity is that it’s always easier to tell someone else’s story of generosity than our own.  We are quick to quote Matthew 6 when Jesus said “But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret.”  We take that sentence out of the rest of the Sermon of the Mount and fear “losing our reward” if we tell someone about our giving.

Yet the sections of Matthew 6 on giving, prayer, fasting, treasures, and worry are all about the heart of why we do what we do.  In speaking about giving, Jesus said don’t be like those who do it “to be honored by men”.  What if our cheerful giving to the Glory of God included “spurring others on in love and good deeds”?   Generous Giving is on a mission to see the generosity of God displayed through the generosity of God’s people.   Since it’s football season we thought we’d include a story below of a Quarterback’s generosity journey.

 

A Season for Everything…

As you turn the calendar to October and we roll into the Fall season, the air is turning cooler and the farm fields are being harvested.  Pumpkins are filling the roadside stands and their flavor and smell is infused into everything possible…drinks, foods, candles.  Personally, I love the crisp cool air, the opportunity to open the windows in the house throughout the day, and sitting by a fire in the evenings over the weekend.  With all the above changes, we’re also brought to the Medicare Annual Enrollment Period.  Ready or not, if you’re eligible for Medicare you will soon have more kindling material that you can burn in those fire pits!

First of all, what is the Annual Enrollment Period (AEP)?  Well, each year between October 15th and December 7th is a time frame that allows those with Medicare a chance to sign up for, change, or disenroll from a Medicare Advantage plan or prescription drug plan.  During this 7 to 8 week period you are afforded the most flexibility to make changes.  If you desire to review your coverage or if you know a change is needed, then it is best to use this time frame to accomplish that.

What things may necessitate a meeting? In life the one constant is change.  If you had changes to your health, whether that is to prescriptions that you’re taking, seeing a new doctor, or even anticipating a procedure in the upcoming year, it would be a great time to review your current coverage.  Another consideration to keep in mind is how the plans themselves change.  If you have a Medicare Advantage plan or prescription drug plan you will receive an Annual Notice of Change booklet.  Though it isn’t the most exciting read, it is an important one!  I would suggest you review the booklet.  Also know that we would be happy to discuss those changes with you.

Do I have to call or sign anything to keep my current coverage?  Generally, NO.  If your current plan is continuing into 2020, you’re satisfied with the way it worked, and you understand the upcoming changes in coverage, then you do not need to do anything.  There are times that plans will be discontinued and you will be notified of your need to sign up for a new plan in the AEP.  If you do have questions about your existing coverage or about other plans that are available, please give our office a call and we will be happy to answer any questions that you have.

Is there any cost to meet with an agent to sign up or make changes?  No; even if you decide to keep your current plan there is no charge for a review meeting.  You also will not pay more if you were to sign up for insurance through an agent compared to buying it directly from the company.

This year don’t let the Annual Enrollments Season overwhelm you.  Please give me a call if you would like a personal review of your coverage for upcoming year and to be sure you are in a plan that makes sense for your situation.

You can reach me at 717-407-5200 or Jim@barewealthadvisors.com.

Financial Advisor is a Registered Representative of and offers securities through Securities America Inc., Member FINRA/SIPC. Financial advisory services are offered through Securities America Advisors Inc. Bare Financial Services, Inc. dba Bare Wealth Advisors and the Securities America companies are independently owned.

 

Generosity Video

2019 is the Year of Generosity at Bare Wealth Advisors. Throughout the upcoming year, we will be sending out several videos that we have found to be inspiring.  Please pass this along to others you know who will be inspired in their generosity.

This video is courtesy of Generous Giving. To learn more about Generous Giving, click here .

 

5 Steps to Succeeding at Business Succession

by Ryan Kurtz

In a 4×100 relay race in the summer Olympics, just because a team has the four fastest runners does not mean they will win the race.  If they spend their practice time only trying to get faster, they still may not have the winning team.  Most 4×100 relays are won or lost in the transition of the baton.  Similar to an Olympic racer, a business professional could spend their whole life “running” their business only to lose much of the value, if they are not prepared for the transition.

In working with a number of business owners through building and transitioning businesses over the years, we have found a number of things that can help you “Succeed at Business Succession”.

Here are 5 steps to take now to set yourself up for success:

  1. Begin Locating a Successor

This may seem very basic but we see many business owners that are unable to complete a transition of the business only because there is no one ready to transition the business to.  Here are a few places you can look for a successor.

  • Family members:

If you have a business, family members are often a natural way to transfer your business. A benefit of this type of transfer can be flexibility of the current owner to stay involved in the family business after it is sold.  Selling to a family member can also create a situation where the older generation will sell the business in some sort of installment sale.  This could benefit the buyer with favorable terms (i.e. low interest rate, reasonable payment schedule, etc.) and the seller with some possible tax benefits of receiving the sale proceeds over a period of time rather than all in one year.

 

  • Employees

One of the benefits of selling a business to your employee(s) is that it can be an incentive to keep your key employee(s) around.  Stock ownership could be structured in the employee(s) compensation package, which also is a creative way to give bonuses or pay increases.  This could happen in a way where a small portion of the company would be transferred to an employee each year.

 

  • Outside business party

Selling to an outside party is always a possibility.  Finding a competitor or someone looking to buy a business can be an option.  This often will bring more changes to the business than the previous two options discussed and sometimes can be difficult for current employees.

 

  1. Make your Business Transferrable

Even if you are years away from selling your business, one thing you can do now is to work towards making your business transferrable.  You should work towards having your business function without the owners involved.  For a gauge of this, ask yourself the following questions:

  • Do customers need the owners involved to conduct the day to day functions of the business?
  • How long can the owners be away before it affects the business?

Having a business operate successfully without the owners involved is a great benefit to the buyer of any business.  Remember, if you sell your business you will no longer be there, you just want to make sure the business still is.

Another key to making your business transferrable is having key employees that would stay with the business during a transition.  Having key employees in place and having low employee turnover should be a goal for any business owner

  1. Establish a Personal Financial Plan

Having a personal financial plan in place before transferring the business is important as you make transition plans.  This will help you to know what price as well as the timeframe in which you can sell your business. In addition, knowing if you need $10,000 versus $50,000 a year from the business for personal income is important.  Working on your personal financial plan can give you a lot of clarity in business transition decision making.

 

  1. Plan for the Unexpected

Most of us think of business transition as how do I sell my business?

But, what if you would have to transition the business because of an unexpected death or disability?  Having updated agreements in business partnerships is important in addition to having clear predetermined steps if something were to happen to the business owners.  These can include predetermined values of the company or even naming a certain person as someone who would have the first right to buy the business if the owner would to pass away.

Considering life insurance coverage is one possible option that can be an inexpensive way to plan for the unexpected.

It is good to also have all your personal estate documents updated as well as this could go in hand with any business agreements which you have in place.  These could include your Will, Financial Power of Attorney and Healthcare Power of Attorney documents.

It is good to remember: not planning for the unexpected could result in the forced sale of the business or loss of jobs for employees

 

  1. Consider a Consultant

Hiring a consultant that specializes in business transitions can be beneficial as you work through a business transition.

We recommend this person being someone who is not involved in the day to day work, has the ability to see your blind spots, and has experience working through relationship conflicts.  The same way it benefits an Olympic relay team to have a coach, it can benefit a business to have one as well.

 

So how can you start planning for your business succession now?

  • Begin looking for a successor.
  • Take time away from your business – can it still operate without you?
  • Prepare now before the possible event of a death or disability.
  • Create a personal financial plan.
  • Get help! Consider hiring a consultant.

Mid-Year Review

by  Curtis Burkholder

As we have reached the midpoint of 2018, it’s a good time to stop and reflect on the first half of the year and look ahead to the remaining six months.  The New Year brings clear vision of goals and plans but often we lose sight of these intentions as the year goes on.  However, if we want to see them become a reality, it’s important to review them before we reach the end of the year.

Our theme this year at Bare Wealth Advisors is a “Year of Purpose”.  An important part of successfully doing things with purpose is to pause and evaluate the current state of our life.  Our mission at Bare Wealth Advisors is to advise clients to intentionally manage their wealth in a way that aligns with their God-given purpose.  Intentional means “done on purpose; deliberate”. To intentionally manage something implies there has to be an end goal one is trying to accomplish.

I believe now is a good time to step back and reflect on how the year is going in all areas of life. Here are a few questions to help get started on evaluating the first half of the year.  Are you comfortable with the financial decisions you have made?  Have there been unexpected expenses?  What has been your greatest success?  What has been your biggest regret?  Is there a relationship that needs more time or energy?  All of these questions can help us evaluate where we are.

I heard the analogy used that if you want to figure out where you are going, you need to know where you currently are.  So, as we look ahead to the second half of the year, I believe this exercise in evaluating the first half of the year and our current status is important in setting the course for the upcoming months.  After reflecting on the past and where we are currently, I believe it’s important to use the information we have gathered to help determine where we want to go.

Life is full of change and unexpected events so even though we lay out our well thought plans, something is bound to happen that will cause us to adjust our original plan.  If we don’t make course corrections, we will end up far from where we originally intended to go.  As you consider the remaining six months of 2018 consider these questions:  What would need to happen for you to say the second half of 2018 was successful?  What conversations need to be had? Are there things you need to stop?  Are there things you need to start or restart?

Intentional choices are not only related to our finances.  As you consider your life spiritually, emotionally, relationally, financially, pick one thing to focus on in the next 2-6 months.  After this is accomplished, find another target.  As you make these deliberate choices, you will accomplish more than you expected and can have a greater impact in life.

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