Part D is prescription drug coverage to supplement the coverage of Medicare Part A and Part B. It can be a standalone policy, or it can be included in a package with Part C. Medicare Part D is purchased through private insurers. While the premiums vary, they tend to range from $15- $150 a month. There was a maximum deductible of $360 for these plans in 2016, after which the insurer would trigger 75/25 coinsurance or something in that range. Continue reading...
It is difficult to forecast how much health care will cost in retirement, but J.P. Morgan research indicates that it’s a few thousand dollars a year. According to their research, the median amount spent each year on health care by 65 year old’s is $4,660. For those age 85 and older, the average amount spent each year is $18,030. At age 65, you can get covered by Medicare, but there are separate costs there, as well as in the optional Medigap policy. Continue reading...
Lifetime Reserve Days are part of the structure of Medicare Part A benefits. Medicare will cover up to 90 days in a hospital or skilled nursing facility per event, and each event is called a benefit period. After the benefit period has been used up, the client will then dip into a pool of lifetime reserve days if the insured requires additional inpatient care. There are only 60 additional days in the Reserve pool, and a person cannot reuse them. Continue reading...
Medicare is a medical insurance benefit for Americans 65 years of age or older, but it also provides coverage for those with severe disabilities, ALS (Lou Gehrig’s disease), and ESRD (end-stage kidney disease) at any age. The premiums for what is known as Part A are paid throughout the insured’s working career, with Part B available as a supplement at low cost. Once you’re over 65, this becomes your medical insurance unless you’re still on an employer’s plan. Medicare provides coverage for in-patient procedures and short stays in the hospital, as well as hospice care and a few other small benefits for home health care. That is just for Part A—the “free” portion of Medicare people pay into over their working lives as part of their FICA taxes. Continue reading...
Taxes pay for the entirety of Medicare part A. For the optional or supplemental policies which fall under the Medicare moniker, a regular premium may be due, but it’s still better than what premiums would look like if there were no Medicare. The Social Security Administration (website—here), which is funded by taxes deducted from your paycheck under FICA, or as part of the “self-employment tax,” administers both Social Security and Medicare. Continue reading...
Medicare and Medicaid are two very substantial government-run healthcare programs which you have no doubt heard of before. Medicare website — Found Here | Medicaid website — Found Here Medicare is the federal program available to people over age 65, while Medicaid is a federally subsidized state program that provides care to lower-income families. Medicare is a government insurance program created to help retirees and the disabled. Continue reading...
There are pros and cons to buying so-called Medigap coverage, and it can depend on how much medical care and services you anticipate needing. They cover all or nearly all of the out-of-pocket costs left over by Part A and Part B, but they don’t offer Part D coverage. Obviously, buying a Medigap policy will mean additional costs. If you have the means and you’re looking to extend your medical insurance to areas not covered by Medicare Part A and B (original Medicare), it might be a good option. Continue reading...
Some employers will offer legacy employees continued health care coverage even after retirement, but it is not very common these days. The costs of health care are rising too quickly for most corporations to keep up. Some corporations will continue to pay a percentage of premiums for their retirees, but more often than not it is up to the retiree to obtain their own health care. Following employment, most people are eligible for COBRA, and then later in life you can purchase plans through Medicare and Medicaid. Continue reading...
Medicare Part A is the standard, baseline hospital coverage that comes at no cost as part of everyone’s Medicare benefits. It will pay for inpatient stays at hospital and skilled care facilities, but only for a certain number of days. Medicare Part A is hospitalization and inpatient care insurance. It will pay fully for about 20 days of care, but only if there is an inpatient procedure first and the patient appears to be convalescing. If the patient is not gradually recovering, their Medicare benefits will be suspended. Continue reading...
Medicare Part B covers some doctors visits, outpatient care, and many other services not covered by Part A. There is a standard premium which is around $100/month for those receiving social security benefits at the same time. Medicare Part B covers outpatient procedures – visits to the doctor, regular checkups, physical therapy, etc. In other words, it covers medical expenses that don’t involve a hospital stay. Medicare Part A is free (if you’ve contributed to Social Security for at least 10 years), but Part B comes with a price tag. Continue reading...
Also known as the debt service ratio, The interest coverage ratio is a measure of how many times a company can pay the interest owed on its debt with EBIT. To calculate it, you simply divide EBIT (earnings before interest and taxes) by interest expense. A company with a low interest coverage ratio means it has fewer earnings available to make interest payments, which can imply solvency issues and could mean a company would be at risk if interest rates go up. Continue reading...
You and your spouse could be on the same health plan, especially if it is offered through your employer, COBRA, or Medicare and Medicaid. If you are purchasing long-term care insurance, you would generally get a separate policy for each person. Do I need Life Insurance for My Spouse? Will My Spouse and Children Receive Social Security Benefits if I Die? Continue reading...
Medicare Part C, also known as Medicare Advantage, is offered in a few variations by several third-party carriers. These plans are approved by Medicare and a person must still pay their Part B premiums to get them, but the Medicare Advantage plans are designed to be more appealing with their deductibles and copays than original Medicare Part A and Part B. Medicare Part C, is a private plan that is mandated to be at least equal in coverage to Part A and Part B. Continue reading...
Social Security benefits are streams of income available for retired workers, their spouses, children and dependents, and survivors. It provides insurance against longevity, disability, and, to some extent, the death of the primary contributor. Social Security benefits are available to a worker and their dependents if the worker has triggered eligibility, which usually calculated as earning over $5,040 for 10 years, but is modified if the worker dies or is disabled at a young age. Benefits can be paid to multiple people within a household (and an ex-spouse) based on one worker’s contributions to the system, up to a Maximum Family Limit, which is somewhere between 150-180% of a worker’s full benefit amount. Continue reading...
FICA (Federal Insurance Contributions Act) taxes are handled by the Social Security Administration, as they are payroll withholdings that go toward Social Security and Medicare funds. Most people will have half of their FICA paid by their employer, but self-employed people must pay it all on their own, which is called the “Self-Employment Tax.” FICA is a tax on employees and employers that funds the Social Security and Medicare programs of the United States. Continue reading...
It looks like the Social Security Trust Funds may be depleted by 2037. The system can most likely continue while paying reduced benefits that come directly from the current social security taxes to the workforce. Estimates are that the Social Security Administration could pay about 70% of its obligations at that point. There is enough money to pay Social Security benefits at the current rate until about 2037. Continue reading...
One of the largest and most influential groups in the country is the American Association of Retired Persons, or AARP. It is a nonprofit organization whose mission is the improvement of the quality of life for its members. The group is one of the largest entities in the country, and it’s free monthly magazine has a higher circulation than any other publication in the United States. Its membership consists of over 40 million American citizens over the age of 50. Members receive many benefits each year, including many discounts and coupons on food, lodging, travel, and so on, for dues around $20 per person per year. Continue reading...
Leverage is the use of borrowed capital or debt to try and increase the potential return of an investment. An individual might leverage an investment account by going on margin to purchase additional securities, whereas the amount of debt used to finance a company’s assets is considered to be that company’s level of leverage. A firm with significantly more debt than equity is considered to be highly leveraged. Continue reading...
A leveraged buyout occurs when members of management use outside borrowed capital to buy a controlling share in the company. Often times, the assets of the company being acquired are used as collateral for the borrowed capital. The purpose of leveraged buyouts is to acquire another company without having to commit a lot of working capital up front. In a typical leveraged buyout, you may see a ratio of 90% debt financing to 10% equity used to acquire the company. Continue reading...
A leveraged loan is a commercial loan that is generally created by a few participants, and packaged and offered by one or several investment banks. Leveraged loans are typically targeted at companies that already have a significant amount of debt and may be limited in their options to access capital elsewhere. They are considered on the higher end of the risk spectrum. Continue reading...