FINANCIaL
FIELd NOTES
The Changes to Medicare Part D in 2025
With Medicare open enrollment beginning last week, there are some significant changes coming to the prescription drug coverage (Medicare Part D) for 2025. These changes are part of an effort to make drug prices more affordable of the millions of retirees currently enrolled.
Knowing what these changes are can help you make an informed decision around what coverage to keep or change during enrollment, which last through December 7th...
Making Sense of Medicare – The 5 Pieces
Medicare is a confusing topic to navigate, in part because there are so many choices. In the first part of this series, I will discuss the various parts of Medicare. Next week I will discuss the cost of putting these pieces together.
There are 5 pieces to Medicare…
Maxing Out Your 401(k) Early Might Be Costing You
A new client recently asked me if they should max out their 401(k) early in the year to get the benefit of compounding growth earlier. If the market goes up most years, it makes sense to max out your 401(k) as early as possible so all those dollars can grow throughout the year.
I told them that we needed to take a closer look at their specific 401(k) summary plan description (SPD) – a document that tells you how the plan works and outlines and specific plan rules. One of those rules is how the company matching contribution is calculated. There are two ways that plans typically calculate the matching contributions...
Is the Stock Market Really Efficient?
For those in the financial advising field, one of the more controversial concepts is the “Efficient Market Hypothesis” developed by Eugene Fama in the 1970’s. The idea is that stock prices reflect all available information, so there is no way to consistently “beat the market” when adjusting for risk.
That doesn’t mean you can’t outperform other investors with good behavior by taking more risk when others are fearful and less risk when others are greedy. But it does mean that you are unlikely to outperform the broader market by trying to time the market or pick individual stocks...
Roth IRAs for Your Child or Grandchild
More clients have been reaching out in the past few years to discuss opening a Roth IRA for their minor children or grandchildren. You might imagine that I love this idea. It’s a great way to teach multiple financial lessons all at once –
(1) saving a portion of your income
(2) the magic of compounding returns over a long time and
(3) the power of tax-free income.
One of the big reasons I love getting started a little early is just how big of an impact an extra decade or two of compounding can make...
The Stock Market and Politics Since 1950
With the 2024 election approaching in November, many significant policy decisions are at stake, from the federal deficit to healthcare, immigration, and more. When I talk with clients during an election year, it’s normal to hear concerns about how the result may impact their portfolio. However, the mood of the conversation tends to be quite biased toward their expectations for the election.
In 2016, when Donald Trump was elected, I had many Democratic clients concerned about how the economy would implode. In 2020, I heard the same concerns from Republican clients when Joe Biden was elected...