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roper Fourth Quarter Financial Planning Can Cut Taxes

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Optimizing Medicare, just like optimizing your Social Security benefits is part of a smart retirement strategy! Should you replace an employer-provided health insurance plan with Medicare? When planning for retirement you need to understand the Medicare basics and seek the right help to get the right coverage. The choice you make will impact the premiums you pay, the care you receive, and the ability to choose providers. When an American citizen turns 65 years of age, they have the option to enroll in Medicare Part A. Some delay enrollment into Parts B and D because they have group coverage and don't want to pay the extra premium. If you don't have qualifying coverage, waiting to enroll may have monetary consequences and penalties further down the line. The annual window for Medicare open enrollment is here — October 15th through December 7th. You have a limited chance to enroll or to make changes that take effect January 1st. If already enrolled, your coverage automatically renews unless you make changes. BUT don’t pass up the opportunity to review your plan because it could cost you in 2020! During the annual fall enrollment period, you are able to: • Switch to an Advantage Plan from original Medicare, • Switch to original Medicare from an Advantage Plan, • Move from one Advantage Plan to another, and • Move from one prescription drug plan to another. Basic Medicare includes Parts A and B, and will cover most of your basic hospital, doctor, and outpatient care expenses. You can add a Part D prescription-drug plan at a separate cost. Due to the way the plans are structured though there are "gaps" in coverage. This is what Medicare Advantage Plans or Medicare Supplemental Insurance protects you against. A “Medi-gap” policy helps cover out-of-pocket expenses at an extra cost. Medicare does provide flexibility. You can go to any doctor or hospital in the United States that accepts Medicare, and you won’t need to get a referral to see a specialist or arrange prior authorization for services. Of Medicare’s 60 million or so beneficiaries, 22.4 million are expected to be enrolled in Advantage Plans in 2020. Medicare Advantage plans are administered by private insurers, and generally offer the same Part A and Part B benefits that you get with traditional Medicare. Shop around because some include prescription drug coverage, and some also offer dental, vision and hearing care. CONTACT US: TFGFA has independently contracted with multiple insurers, and can help you find a policy to match your benefit needs that is within your budget. There are plenty of choices on the market and Medicare Advantage plans that include additional benefits that go beyond dental and vision plans. There are new service options can target beneficiaries with more complex needs like home care, chronic disease management and transportation to the doctor. Even if your coverage worked well last year, another option may now be more suitable. Look beyond premiums and consider your total out-of-pocket spending, especially if a medical emergency should arise. Still have questions? We have answers. Proper planning and preparation can help you take control of your financial future. Michael J. Bytnar, Certified Financial Planner, Retirement Income Certified Professional Theodore G. Bytnar, Certified Financial Fiduciary, Licensed in Life and Health Insurance, Property and Casualty Insurance Contact us via the links below, or call Mike Bytnar at 561-316-7687 or Ted Bytnar at 561-316-7725. TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

If you plan properly, you have time between now and December 31st to do something about the taxes you will pay in April 2020.

For example:

• The fourth quarter is a perfect time to manage the tax impact of investment gains with tax loss harvesting to reduce your income tax liability and impact your Net Investment Income Tax of 3.8% as well.
• Can you hold onto an investment longer to avoid unnecessary capital gains? Gains recognized on stocks held for one year or less are taxed at ordinary income rates, but gains recognized on stocks held longer are taxed at the long-term capital gains rate. It may make sense to delay selling appreciated stocks until they qualify for long-term capital gains treatment.
• Consider switching to tax-efficient investments like tax-managed mutual funds known for their tax efficiency, as well as index funds and exchange-traded funds that passively track long-term investments in a target index.
• Consider charitable donations of cash or tangible assets for an income tax deduction, and especially appreciated stocks to avoid capital gains. Check out this article by our tax experts: “Charitable Giving Strategies and Solutions,” click here: https://www.fuoco.com/resources/tax-alerts/340-charitable-giving-strategies-and-solutions.
• Contribute the maximum to tax-efficient retirement accounts and into an H.S.A., if you are eligible, to reduce current and or future taxes.
• Review your last year’s return with your CPA and ask what changes might affect your liability or where opportunities for tax savings might arise.

The fourth quarter is also a good time to take a look at re-balancing your portfolio. Your risk tolerance and portfolio allocation should be based on your time horizon and willingness to sail through choppy market conditions. If your portfolio is properly invested, you will reach your goals over time regardless of market cycles. If you’re getting skittish, or feel like taking more risk, don’t be afraid to adjust your portfolio accordingly. Just be mindful there might be tax consequences.

CONTACT US: Fall is a good time to check your portfolio’s progress, reexamine your goals for 2020, and change course if necessary. Look at risk, look at fees, and learn what’s new! Don’t wait until the last day of December to decide on changes because the ability to execute last-minute transactions or tax-efficient financial strategies becomes more difficult when up against a short window of time and imminent deadline. Feel free to contact me, Cory Lyon, directly at 561-209-1120, with any questions regarding financial investment strategies. I act as a fiduciary for all my clients.

TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.

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