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Monday, November 25, 2013

Navigating the Affordable Care Act (ACA)

If you are reading this blog and are not familiar with the ACA, maybe you will recognize it as Obamacare. We have had a number of clients reach out to us for our opinion on this legislation and the effect it will have on their existing health insurance plans. There has been a one year delay on the implementation of this law for employers with over 50 employees, so if you work for a larger employer you get one more year before you will see the impact of this. If you currently have an individual plan or work for a small employer you are probably experiencing some changes right now. We have a client that is a self-employed individual and had her policy canceled as the plan was not ACA compliant. Finally after 31 days and working with a health insurance specialist she was able to obtain coverage through the exchange. If you are experiencing changes in your plans and have questions, please reach out to us and we can put you in contact with one of the health insurance specialists we use.

Tuesday, November 19, 2013

Paying for Health Care

Ugh! If you’re like me you are tired of hearing about health care reform. It is dominating the news and politics. Unfortunately, we can’t avoid it. We place great value on our health and understand that it is a major expense, now and in the future. I am not going to go into great detail in this blog post, but I wanted to make some observations based on what we have learned so far.
  •  In spite of the fact that you can no longer be turned down for health insurance due to a pre-existing condition, it still would be very risky to wait until you have a health problem to sign up for insurance. The new law only guarantees you coverage during the open enrollment period each year. You could have to wait many months for your coverage to kick in. In the meantime, you could run up thousands of dollars in bills.
  • In most situations, it is more cost-effective to keep your kids on your plan until they turn 26 years old. 
  • Calculating your cost for your health insurance will take into consideration your plan that you choose based on benefits and deductibles, your premium based on your age, and your tax credit (subsidy) based on your income. It is complicated. It will also become an important new tax consideration for those that may experience increases in their income.
  • Health insurance plans on the exchange have been standardized into four types, Bronze, Silver, Gold, and Platinum. All plans will provide preventive services with no out-of-pocket costs. Also, there are no annual or lifetime benefit limits. 
  •  All plans must provide 10 “Essential Health Benefits” however deductibles and out-of-pocket maximums can vary widely by plan.
One thing is for certain, you cannot go without health insurance. The risks are too great. Due to the complexity of the new law, it will take time to fully understand the impact on our clients and their planning.

Monday, November 11, 2013

How Work Affects Your Social Security Benefits

There seems to be a lot of confusion when it comes to earning an income and deciding on whether or not to start drawing retirement benefits from social security. This is a regular conversation topic with clients. There are a few things to remember when facing this important decision:

1) Find out when your full retirement age is for retirement insurance benefits. If you were born between 1943-1955 this is age 66.

2) If you are younger than full retirement age know your expected annual income for this year and future years up to your full retirement age.

3) The income limit you can earn for 2013 is $15,120 and not have your social security benefits reduced for making too much income.

4) There are special income rules for the year in which you start taking benefits.

5) Once you reach the age for full retirement insurance benefits there is no more income limit.

6) Benefits being reduced for income reasons and benefits being taxable are two separate issues.

7) If some of your retirement benefits are withheld because of your earnings, your benefits will be increased starting at full retirement. So in other words, you get the money that was withheld back.

The social security department has a great website where a lot of these types of questions can be answered. See this publication for details on this particular issue.

Monday, November 4, 2013

Estate Planning Is Not Only for the Rich

What comes to mind when someone says estate planning? Is it planning for someone with lots of money, houses, and toys? The big misconception is that estate planning is only for the wealthy.

Per Wikipedia the definition of estate planning is: “The process of anticipating and arranging for the disposal of an estate during your life. Estate planning typically attempts to eliminate uncertainties over the administration of a probate and maximize the value of the estate by reducing taxes and other expenses. Guardians are often designated for minor children and beneficiaries in incapacity.”

Let’s unpack this definition.  There are multiple reasons to complete an estate plan:

1. Anticipating and arranging your estate during your life - Who do you want to receive family heirlooms? Regardless of the dollar amount of your estate, do you want your children to inherit everything right now or a little bit now and some as they age?
2. Uncertainties of probate - Are your beneficiaries updated so the accounts transfer directly to them and avoid probate? If you do not have a beneficiary on an account, have you made the account a TOD (transfer on death) account?
3. Taxes and reduction of expenses are a portion of the reason too - Have you analyzed your assets to decide what to spend down in retirement and what to leave to your kids? For example, if your kids are in a higher tax bracket than you, maybe you should take more distributions from your IRA and pass on the brokerage accounts or Roth IRAs.
4. Naming of guardians and incapacity planning - Who would take your children if something happened? Would the people that become the guardians of your children also be in charge of the money that is left behind, or would you name a separate person? If you cannot make medical decisions for yourself, who is legally able to do this for you?

As you can see, there are many reasons to get your house in order when it comes to estate planning. Please contact anyone of us at Argus to get started on this process. We have extensive knowledge in this area and can refer you to attorneys that can help you execute your wishes.