|
"Welcome To Autumn!" It's time for football, soccer, cooler evenings, changing leaves, apples, and pumpkins. Yes, it does seem that time is moving by very quickly. But if this is not your season, and you long for Spring once again, we think we may have the answer for you. We saw a billboard the other day that stated. "Autumn is a second Spring where every leaf is a flower". So, in that case, "Welcome to Your Second Spring!"
|
|
Take A Look At Fixed Index Annuities
| 
The S&P 500 has gone something like 975 plus days without a 10 percent decline. It is also the 5th longest stretch on record according to Birinyi Associates.
Many investors that have stuck with the stock market since the meltdown in late 2008 and early 2009 have large gains in their portfolios. The challenge is what to do with those gains. As many of my clients are in or near retirement just letting the gains go in hopes that trees do grow to the sky is not a prudent option.
There are not many sensible options for the Main Street investor. Money markets pay little or nothing in interest these days. Yes, you are out of the stock market but earning nothing. Can you afford to do that? Bonds, depending on the length of maturity, pay a more competitive rate of return. But, that comes with higher -- and some say a "much" higher -- risk than the yield warrants. Increasing interest rates along with inflation as we experienced in the 1980's can be devastating to an investors' bond portfolio.
So what's an investor to do?
That brings me to fixed "index" annuities. It is like the cousin of the good old fashion fixed annuity. The fixed annuity would offer a simple rate of return with tax deferral and a safety of principal guarantee. The insurance company (they issue annuities) would be able to put the monies received for the fixed annuity into investment vehicles that would allow it to cover its expenses, make a profit and give the client a competitive rate of return -- the spread if you will. With interest rates as low as they have been it became increasingly difficult for the insurance companies to create the "spread" they needed.
Enter the fixed "index" annuity:
The fixed "index" annuity uses a common stock index, often the S&P 500, to help it create the spread it needs. Without getting too complicated here, an example may be the client will be allowed to participate in the first 4 percent gain of the index. If the index goes up 3 percent for the year the client is credited 3 percent. If the next year, (we will assume the participation rate doesn't change each year), the index goes up only 2 percent the client receives 2 percent. That gets credited to his account. The next year the index goes up 17 percent. The client receives only the 4 percent. That gets credited to his account. The next year, now follow me here this is the really good part; let's say the index drops 17 percent. The client gets credited with 0 percent return. There is no gain for that year. But there is no loss as well. His money is guaranteed and tax deferred as with the simple fixed annuity.
Please, keep in mind that the above example is simple to help you to understand the annuity. The participation rate can and is changed by the insurance company annually. How one participates can also affect the return.
These are not considered securities even though the return is typically based on a stock market index of some kind. They do not show up on your brokerage statement because of this. The return is simply calculated once a year and is credited then. Once any indexed interest (or fixed interest) is credited to your annuity's values, it can never be lost to market index volatility. A downturn in the market will not reduce your contract values. Returns over the last several years, taken through a sampling of my clients that own them, have been on average between 4.5 percent to 8 percent annually. The crediting methods can and do make a difference in your returns. These can be adjusted each year.
Most fixed "index" annuities also include a fixed account that offers a stated rate of return. This could be a good benefit when interest rates rise. Most of these annuities allow a 10 percent penalty free withdrawal when in the surrender period.
Annuities can and are abused by commission hungry agents. Beware! Annuities should only be considered as part of your overall financial plan. Someone should not say to you "here's an annuity, it's good for you, buy it" without knowing your needs and tolerances and being able to work with all of your financial assets. Annuities are not considered liquid. They should be considered long term investments. The penalties for early withdrawal in the surrender period can be steep. A 10 percent decreasing penalty over a 10-year surrender period is common although there are surrender periods as short as 5 years.
I must say I have been impressed by fixed "index" annuities. It is a vehicle that has the potential for competitive yields at the same time it reduces exposure to the stock market.
If you find yourself with large stock market gains and want to reduce your exposure take a look at the fixed "index" annuity.
"Braderton Herald"
|
|
Medicare A, B, C, D - What You Need To Know
| 
Medicare was created through Title XVIII of the Social Security Act in 1965 and became effective in 1966. This program, administered by the federal government, was originally created to provide medical coverage for qualifying individuals 65 and older and the disabled. However, I suspect that no one at that time predicted the medical advancements which were to come and the longer life expectancies which ensued. In this article, we'll discuss the various parts of Medicare, some of its history, and the provisions of Medicare Parts A, B, C and D.
The History (and Side Effects) of Medicare
In the beginning, Medicare was a bit more than a social health insurance program. It also played a role in the racial desegregation of America because payment to medical providers was conditional. In short, if the medical provider refused to accept minorities, the government refused to pay the provider.
Over the past 48 years, Medicare has added several illnesses to its coverage including hospice care in 1982 (made permanent in 1984); speech, physical and chiropractic therapy in 1992; and ALS (i.e.; Lou Gehrig's disease) in 2001, to name but a few. However, as mentioned, with the longer life expectancies experienced by the population since its inception, Medicare and Medicaid (i.e.; state insurance for the poor) have become the largest item (combined) in the federal budget today, with an estimated cost of over $900 billion per year and rising. Medicare alone cost about $492 billion in 2013.
In 1967 when the House Ways and Means Committee published its projected cost of Medicare in 1990, it figured it would be $12 billion. The actual cost that year? A staggering $98 billion.
How to Qualify
Medicare covers those aged 65 and older, along with younger persons with disabilities and end-stage renal failure. To qualify at age 65, a person must have been a U.S. resident for at least five years and they or their spouse must have paid Medicare taxes for at least 10 years.
Medicare Part A
Medicare Part A covers in-patient hospital expenses (with limits); skilled nursing care and nursing home care (under certain circumstances and with limits), and hospice care. As for the limitations to coverage, there is a limit of 90 days per stay in a hospital, plus a coinsurance. During the first 60 days there is no coinsurance. However, from day 61 to 90, the individual is responsible for a co-pay of $304 per day. From the 91st day on, the coinsurance is $608 per each "lifetime reserve day" up to a maximum of 60 days total over the individual's lifetime.
To clarify, a lifetime reserve day is any day over the first 90 days of an individual's lifetime. For example, if a Medicare patient were in the hospital for 100 days during one hospital stay, the last 10 days would be considered "lifetime reserve days" leaving the person with 50 of these days to use over their lifetime. The point here is that Medicare Part A has some potentially expensive gaps which is why a person should purchase a Medicare supplement plan (or see Medicare Part C below).
Medicare Part B
Medicare Part B is optional and covers outpatient expenses such as lab tests, outpatient surgeries, doctor visits and limited outpatient prescription drugs (typically not drugs you would administer yourself). Coverage begins after meeting an annual deductible of $147 (2014). After meeting the deductible, the individual must also pay a coinsurance of 20% of the Medicare-approved charges for services and drugs.
Medicare Part C
Medicare Part C is not actually a separate coverage, but is the part of Medicare which allows private health insurers to create Medicare replacement policies. In short, an individual may elect to purchase one of these plans in lieu of Medicare and a supplement.
In the past, an individual with Medicare would often buy a Medicare supplement to cover procedures or illnesses which Medicare did not cover. However, when Congress passed the Balanced Budget Act of 1997 it included a provision to allow what was originally called Medicare +Choice or Part C plans.
When Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the name of these plans was changed to Medicare Advantage plans. Therefore, Medicare Part C created the Medicare Advantage plan which is an option that can be purchased in lieu of traditional Medicare. Normally, these plans are fairly comprehensive in coverage.
Medicare Part D
This is the newest part of the Medicare program and covers prescription drugs. Moreover, it is also available to anyone with Medicare. There are two ways to obtain Medicare Part D coverage. They are:
1) Join a plan run by an insurance company or other private company approved by Medicare; or
2) Purchase a Medicare Advantage plan which covers prescription drugs (see Medicare Part C above).
Medicare Part D covers prescription drugs up to a maximum of $2,970 per year.
To find a Medicare Part D program, you can view the Medicare choices online or call 800-633-4227.
Conclusion
Medicare has become an integral part of the American fabric. Millions of individuals rely on it to pay for what has become a significant expense in their budget. As health care costs continue to rise, and life expectancies lengthen, it's clear that some action will need to be taken to preserve this important program.
I don't think many of the original legislators from 1965 could have imagined how costly Medicare would become and I doubt many of us today can fully appreciate the coming mushroom this program will create as the baby boomers cycle through the retirement turnstile. One thing seems certain, no politician or political party wants to be known as the party that killed Medicare.
"Think Advisor"
|
Sincerely,
Mike Zimmer & Rebecca Thacker
Bay State Insurance Agency Limited
410-758-1680
1-877-411-3702
"Your Safe Money Team"
|
|
|
|
|
______________________________________
Quick Links |
Individual Health Insurance
_____________________________________
Well, It Had To Happen Sooner Or Later....Blond Men Jokes!!
A friend told the blond man, "Christmas is on a Friday this year."
The blond man then said, "Let's hope it's not the 13th."
---------------------------
A blond man shouts frantically into the phone, "My wife is pregnant and her contractions are only two minutes apart!" "Is this her first child?", asked the Doctor. "No", he shouted, "This is her husband!"
---------------------------------
OK....one more...
(But this one actually makes sense...sort of)
An Italian tourist asks a blond man, "Why do scuba divers always fall backwards off the boats?", To which the blond man replies, "If they fell forward, they'd still be in the boat!" Have a Great Day!!! 
|
_______________________________
A Sliver Lining for Your Retirement Account
If you transfer your IRA's, Annuities, old 401(k)s, or any other retirement account to us, one of our major insurance carriers will guarantee you an immediate 8% premium bonus ;
$50,000 becomes $ 54,000
$100,000 becomes $108,000
$250,000 becomes $270,000
In addition to your premium bonus, for folks age 40 and above, how would you like to learn how you can add an income rider with a guaranteed 6.25% income growth for up to 10 years with an option to extend for an additional 10 years. This is not a prediction, this is a guarantee. You simply need to take a lifetime income.
Isn't it time you stop gambling in the risky stock market and get a good night's sleep? If you would like to have guaranteed growth and an income you can count on, give us a call at 410-758-1680 to learn how to earn more.
___________________________________
| |
|
 Thanks to those you have served, who do serve, and most of all, to those who have made the ultimate sacrifice in service to America. Let Freedom Ring. |
|
______________________________
Thanks to YOU the word is spreading. Thanks to all of our clients and friends who graciously referred us to their friends and neighbors last month! There's no question we have the BEST clients on the entire planet. Our business is built on word of mouth advertising and we would like to thank everyone who has been kind enough to recommend our services to their friends. We promise to treat your friends just like we treated you, with respect and understanding. We promise to always do what is right for our clients.
______________________________ The purpose of this newsletter is to provide information of general interest to our clients, potential clients and other professionals. The information provided is general in nature and should not be considered complete information on any product or concept described. For complete information, please contact our office at 410-758-1680 or 1-877-411-3702. _____________________________
Supplementing Your Medicare Coverage At Bay State Insurance Agency Ltd, we can help you shop up to 25 different Medicare Supplement Companies with our Computer Quoting Service. For a Free No Obligation Comparison give us a call at 410-758-1680. _____________________________ |
|
|