I have been loosely following this thread and many of you seem very knowledgeable…So, I’m asking a question about health insurance for my sister. She is the widow of a retired military officer and is curious about their health care which I believe is called Tri-Care. She is still working and has very good benefits through her job. She is thinking about retirement in the next year or so and will need to obtain insurance for a couple of years prior to the onset of Medicare. Her employer will provide the same insurance for 2 years after she retires.
It is her understanding she will be/is eligible for Tri-Care as the widow of a retiree but she isn’t sure whether it is good insurance or if she should just continue on her employer’s insurance (or, perhaps, go out on the ACA exchange) for the 18 months (or so) prior to Medicare kicking in.
Does anyone here have experience with Tri-Care who could enlighten us/her? Thanks in advance.
It depends on where sister lives @rutgersmamma if Tri-Care is well accepted in community.
She should see what she would pay for employer’s insurance, what Tri-Care is available for her, and ACA exchange. Cost/benefit. Also depending on medical situation (very healthy, tolerant of copay/deductible varying amounts based on cost of insurance, sleeps well with higher level of coverage or can handle essentially catastrophic coverage).
Local/state/federal laws that can affect retirement plans are not static, just as where to invest money, personal health, etc are not static. Good to think about and keep on the radar. Will alert my sis in Iowa - her H and she may choose to slowly gift out to their offspring (to me that would be win/win anyhow because offspring could put some $$ into Roth IRA that they may not be doing now).
This discussion has, as it frequently does, stimulated me to think and then act. In this case, I started to read about how trust distributions are taxed. it turns out that distributions of principal are untaxed but distributions of income are taxed. But, what I haven’t figured out is if a trust receives income from principal and pays tax on that income, does the remaining income net of tax become part of the principal?
1.does Tricare or the job insurance cover traveling outside the USA? Does she plan on doing this?
2.does she want medicare part B coverage and a supplemental insurance eventually?
3.if she takes the job insurance for 2 years- then she will need to consider adding part B $ and a supplement $ in addition to the free medicare part A. Can the job insurance be also a supplement eventually? Can Tricare be a supplement? Costs?
I would look on the Tricare website and the other insurance website. Sometimes they answer the very scenario questions you are asking. It did for us with Fed BC/BS.
We chose to keep the federal employee insurance as a supplement. Medicare part B because of our income is pricey but we feel also was needed. Costly anyway you look at it. ( FIL -95-bills coming in are outrageous without his part B and supplemental he had from his prior work.)
This is the cost of retirement everyone talks about- that needs to be considered in the budget. This is why I stayed the amount of years I did at work to retire and to get the reduced cost for life health insurance. Of course there were other factors as to why I stayed but this was a pressing one.
With some trusts, (I am not talking about living trusts)income distributed is taxed at the individual’s tax rate. Income that is kept in the trust is taxed at a trust’s tax rate. The top tax rate of a trust (maybe 39.6%) starts around $12,000 in income after some deduction.
Income from trusts can be taxed more than income from individuals.
You should talk to an expert on this… An estate tax attorney.
Yes, income in trusts is taxed at a high rate. We had a trust while settling SisIL’s estate and made sure to take expenses from trust’s income so we didn’t have to pay tax on the income and it would net 0.
It is a good idea to work with professionals on these issues to avoid expensive mistakes and grief.
@dstark, @himom, and @notrichenough, thanks. Yup. I know that the rates are higher, but the trust is me for tax purposes, we’re paying the higher rates no matter what. I do have a crackerjack lawyer – I searched for the best in the country for the specific things I thought a trust should accomplish – and after I posted, I emailed him. He enlightened me about federal tax treatment, but said I ought to talk with accountants about tax treatments by state.
This is definitely arcane stuff that I would not do without pros. I actually did a very thorough search to find a creative, proactive accountant 20 years ago and he has been sensational (he has probably saved me over $10K per year for 20 years, though in some cases, I figured out the approach and he made sure it worked). I described to a number of people what I was looking for at that time and got the same name from several folks. When looking for the lawyer to help me realize meet my estate planning and asset protection objectives, I did something similar but different (I could use the internet as well as personal connections when I was looking for him). His work resulted in a dynasty trust, though that was not the pre-ordained outcome and other options did not involve trusts.
Although I thought about the the one-time fee for setting up a structure for this kind of work, but did not factor in all of the ongoing fees associated with the new structure (extra tax returns from pass-through entities, annual fees for various entities). These are recurring.
I think over 8,000 posts ago, I said futures returns are likely going to be lower so people need to save and invest more money.
I am posting this because McKinsey came out with a report and said something every close to what I said. If McKinsey came up with something different than what I said, I would have ignored this. Never would have posted this.
I think the McKinsey report is saying investors have to accumulate more assets because investors are going to make less in the future. It’s good to have a cushion.
For an example, if assets are compounding at 7 percent a year and the assets aren’t touched, the assets double in value in 10 years. If assets are compounding at 4 percent a year, it takes approximately 18 years to double.
If returns are going to be less in the future and this is important to an investor, an investor can compensate by saving and investing more. Working longer. Spending less.
Well, we are basically retired so there is not much to invest. We are in a position to not take much or any out so that helps. Certainly not what we planned on. With an illness or unexpected event we will have to eat at the principle.
However we have a history of bad timing in all our investments (buying that first house at 17%) for instance. So not a surprise by any means. Just same old, same old for the sax family.
We are some cash, stocks and bonds at Vanguard. However not feeling like the bonds are a hedge against the stocks anymore.
I downsized. Cut my expenses. I actually like where I live now better than before, but my other place is worth a lot more. Go figure.
I don’t think I really needed to downsize, but I like to look 30-60 years out. I figured if I downsized, my returns could be less. I don’t think it is that easy to get good returns these days.
I didn’t want to deal with a bigger place either. I hate taking care of places.
If you live in an area where you think home prices are going to appreciate, downsizing may not be the riight solution.
I look at bonds, if they yield 2 percent or so, as not a place to make money, but as a place to stay out of trouble if stocks get hit. (I don’t own bonds yielding 2 percent). Of course bonds have their own problems.
I don’t know anybody who hasn’t made bad investments…except liars.
I looked at the report. Not being omniscient, I don’t believe in anybody’s crystal ball. Although I haven’t checked, I’d bet that the same things have been said in the past.
However it is a good idea to assume the worse and plan for it. Of course as a pessimist, this is pretty easy for me to do.
