Yes, I know, Medicare, a topic younger people think is irrelevant. However, learning about Medicare is important for those who qualify for it as well as the younger generation, simply because the younger generation, perhaps decades away from needing it, should still understand their parents’ medical care.

Most Americans know that Medicare is the United States federal health insurance program primarily for senior citizens; but if asked, those same people would probably admit confusion or frustration when it comes to understanding all the associated parts.

Medicare can be like a giant jigsaw puzzle, but once you see how the pieces fit together, it’s easier to see the big picture. Medicare has several parts, each with its own rules and costs. That’s where it can be a little tricky.

Part A (Hospital Insurance): This covers inpatient care in hospitals, skilled nursing facilities, and limited home health care. It’s generally free if you’ve worked and paid into Medicare for at least 10 years. However, if you need to stay in a hospital for a while, get ready for some out-of-pocket costs, like deductibles and coinsurance.

Part B (Medical Insurance): This covers things like doctor visits, outpatient care, and preventive services. Unlike Part A, you do have to pay a monthly premium for Part B. It usually starts around $164.90 per month in 2025, but it can go up based on your income. Here’s where things can start to get a little confusing. There are deductibles and copays on top of the monthly premium, and it doesn't cover everything—like most dental, vision, and hearing care.

Part C (Medicare Supplement): This is like a bundle deal where private insurance companies take over your   Medicare benefits (including Parts A and B) and sometimes even Part D (the drug coverage). They often offer extra benefits (like dental, vision, hearing) but can come with higher premiums, rules, and network restrictions. It’s a way to get more coverage, but you have to pay attention to which doctors and hospitals are covered.

Part D (Prescription Drug Coverage): If you don’t have Part C, you can get Part D to cover prescription drugs, but not all Part D plans are the same. Some cover more meds, and others might have more affordable copays. The plan you pick can affect how much you’ll pay.

If that didn’t seem like enough puzzle pieces, there’s more! You’ll also have to navigate how to handle Medigap, or Medicare Supplement Insurance, which helps pay the costs that Original Medicare (Parts A and B) does not cover, like copays, coinsurance, and         deductibles. There’s an open enrollment period for this, if you miss it, you might get hit with penalties. You may be subject to medical underwriting instead of guaranteed issue or you might not be able to get the plan you want.

The complexity of this puzzle comes from balancing premiums, copays, rules, networks, and deadlines, all while figuring out whether you need additional coverage (like Medigap or a Medicare supplement insurance plan) and how to keep track of costs. It can start to feel like the small four part puzzle has grown to a 250 piece puzzle. 

Don’t let the complicated intricacies overwhelm you. Sometimes a second set of eyes and ears can be useful in helping to find the right pieces to complete your own personal picture. As always, we are here to help; give us a call and we can help you sort through all the pieces.

If you would like a copy of our Medicare Special Report email us at peaceofmind@yieldins.com

Image 1 by congerdesign

Image 2 by Marjon Besteman

Here we are, kicking off the tax season once again. Everyone knows you have to pay taxes on your income, but how familiar are you with the tax system?

The deadline for filing your 2024 tax returns for most taxpayers is April 15, however, you are able to request an extension, which gives you an additional six months to submit your return. It is important to remember that this extension does not apply to paying the taxes that you may owe.

Calculating income is the first challenge of a tax return. Income from all sources is added up to arrive at the adjusted gross income, commonly referred to as AGI.  This will include interest and dividend income, business income, (or losses) and other items that are  considered “above the line.” “The line” in this reference is the AGI. Everything else happens below this line.

Every taxpayer is entitled to a standard deduction, which reduces your taxable income, meaning you are only taxed on the income that exceeds this amount. For the 2024 tax year, the standard deduction amount is $14,600 for single filers and $29,200 for married couples filing  jointly. So, if you had $50,000 in adjusted gross income and you file as a single filer, you would subtract the standard deduction, leaving you with $35,400 in taxable income.

Tax Credits also help lessen the amount of tax you owe. Unlike a deduction, which reduces your taxable income, a tax credit directly reduces the tax you pay.

In the United States, the federal income tax system is  progressive, which means the rate you pay increases as your income rises. The IRS sets different tax rates for different ranges of income, called tax brackets. The tax brackets determine the rate at which different portions of your income are taxed. If your taxable income falls into a higher tax bracket, only the portion of your income that falls within that bracket is taxed at the higher rate.

Every year the IRS adjusts tax brackets to account for  inflation. For 2024, the tax brackets are slightly different than in previous years, which could affect how much tax you owe.

Taxes are calculated on a marginal tax rate. The rate is applied to the last dollar you earn in a given bracket, not your entire income. For example, if you are a single filer with a taxable income of $50,000, the first $11,600 of that will be taxed at 10%. The income from $11,601 to $47,150 will be taxed at 12%, the remaining $2,850 will be taxed at 22%. Your tax bill would be about $6,053. The highest tax rate you pay only applies to the top portion of your income.

Many people mistakenly think they didn’t pay taxes because they didn’t have to write a check after filing their return or they were due a refund. However, refunds are basically interest free loans to the government. If this is the case, you might consider adjusting your  withholdings. The goal of an accurate tax return would be to owe (after all withholdings) or receive less than $100.

The U.S. tax system can be complicated, marked by loopholes, disparities, and other inefficiencies. If you are ever confused about how to file your taxes or what you owe taxes on, reach out to us.

Despite the many “doom and gloom” predictions we faced at the start of 2024, the year ended on a bit of a high note. The economy was performing well, showing signs that it was on solid footing to start the new year. The data continued to show gradual, but growing strength, the GDP grew at a 3.1% in the third quarter of 2024. The year closed out with a healthy labor market, lower unemployment, and inflation  slowly starting to drop.

Reflecting back on last year, we can clearly see how our economy defied expectations, in spite of global challenges, inflation, geopolitical uncertainty, and other challenges. Our economy managed, with great resilience, to avoid the much-feared recession. There were many factors that played a role in bringing stability and recovery in many sectors.

After the pandemic, central banks around the world, particularly the U.S. Federal Reserve, initially ramped up interest rates to curb inflation, but by 2024 these institutions began to fine tune their policies. We saw the Fed lower interest rates three times last year. It was a difficult task trying to manage inflation without stifling growth but is largely credited for staving off the dreaded recession.

Consumer spending was also a key driver of the recovering economy. Because unemployment rates were below market expectation, it signaled a demand for workers, creating a stable income for many households. Several sectors, including technology and healthcare, saw higher wages. Having a reliable stream of income bolstered consumer spending, having a domino effect which fueled growth in industries like tech, real estate, and consumer goods. Consumer spending is the primary component of the increased GDP.

This isn’t to say that there weren’t any issues in our economy, it wasn’t all sunshine and roses. There were many people struggling against high inflation. For a good portion of Americans, grocery bills nearly doubled, which can account for a portion of the uptick in consumer spending. And while many people were able to find jobs, they weren’t necessarily high paying or reliable jobs.

So, while the numbers looked good on paper, there were still many Americans wondering if we really had avoided a recession. For a recession to be declared there needs to be  two successive quarters in which there is economic decline in which trade and industry are reduced. This is usually reflected in a drop in GDP. But you know how the old saying goes, “When your neighbor is out of work it’s a recession; when you’re out of work it’s a depression.”

Regardless of the difficulties that still exist, the continued growth we have seen in recent months gives hope for this coming year. According to current projections, the US economy is expected to see moderate growth with a projected GDP growth rate around 2.1%, cooling inflation, and lower unemployment. Here’s to a prosperous year!