Filling the Gap

James McGlynn

James McGlynn, CFA, RICP, is chief executive of Next Quarter Century LLC in Fort Worth, Texas, a firm focused on helping clients make smarter decisions about long-term-care insurance, Social Security and other retirement planning issues. He was a mutual fund manager for 30 years. When not writing or planning, James enjoys playing pickleball and dreaming of European train travel after the pandemic.

Filling the Gap

James McGlynn  |  May 4, 2020

REACHING AGE 65 is a financial relief for many folks—because they’re finally eligible for Medicare. But then disappointment often sets in.
Why? Medicare might cover just 80% of medical expenses, leaving the patient to handle the other 20%. How will you cover that 20%? The usual solution is to buy a Medigap policy. But there are so many choices that it can be overwhelming.
My goal today: Help you narrow that choice a little—by comparing two Medigap plans,

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Four Opportunities

James McGlynn  |  Mar 9, 2020

I FIRST STARTED managing mutual funds a few months before the 1987 stock market crash, and I’ve had to navigate a fair number of market declines since then. My advice: Instead of worrying about how far share prices will fall or how widely the coronavirus will spread, think about the opportunities. I spy four of them.
1. Buy the dip. If you have cash, you might slowly dollar-cost average into the market,

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Gifts That Give Back

James McGlynn  |  Feb 10, 2020

IF YOU’RE IN YOUR 70s or older and you are charitably inclined, it’s time to get acquainted with one of your best financial friends: the qualified charitable distribution, or QCD.
A QCD is a distribution that’s made directly from your IRA to an organization eligible to receive tax-deductible contributions. A QCD counts toward your annual required minimum distribution, or RMD. But unlike a regular RMD, the QCD won’t add to your taxable income for the year—a potentially huge advantage.

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Danger: Cliff Ahead

James McGlynn  |  Jan 29, 2020

MEET IRMAA. You won’t like her. IRMAA is short for income-related monthly adjustment amount. It’s a premium surcharge levied on those covered by Medicare Part B and Part D—and who have income above certain thresholds.
In 2020, the standard premium for Part B, which covers outpatient care, is $144.60 a month. That’s what you pay if you file taxes as a single individual and your modified adjusted gross income is $87,000 or less, or if you’re married filing jointly with annual income of $174,000 and below.

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Early and Often

James McGlynn  |  Dec 26, 2019

FUNDING A ROTH—and enjoying tax-free growth—may not have been an option for many high-income baby boomers when they were working. But these folks can still get money into a Roth IRA by converting their traditional retirement accounts—and often there’s a great opportunity to do so if they retire early and find themselves in a lower tax bracket.
The first thing to know: Converting from traditional tax-deferred accounts to a Roth IRA will generate ordinary income equal to the taxable sum converted.

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Don’t Get an F

James McGlynn  |  Nov 25, 2019

MEDICAL EXPENSES are a big worry for retirees—leading many to purchase supplemental insurance. But you need to think carefully about which Medigap policy you buy.
What does this insurance get you? Medicare Part B, which covers doctor’s visits and other outpatient care, typically only pays 80% of the expenses that retirees incur. To plug this and other coverage gaps, many folks buy a Medigap insurance plan. Want to keep your current doctors and not be restricted to the network of medical professionals offered in a Medicare Advantage plan,

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Late Fee

James McGlynn  |  Nov 11, 2019

I’M JUST A FEW YEARS from age 65—and being eligible for Medicare. One of my concerns: making a mistake that could trigger penalties.
If you file for Social Security before age 65, you’ll be automatically enrolled in Medicare Part A and B. What if you’re still working at 65? Ask your human resources department for advice. Your coverage at work will dictate whether you should file for Medicare.
If you aren’t covered by an employer’s health insurance plan and you aren’t yet collecting Social Security benefits,

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Where to Begin

James McGlynn  |  Sep 17, 2019

WHEN I STARTED working fulltime in 1980, there were very few retirement savings vehicles available to the average worker. I remember setting up my IRA and contributing the $2,000 annual maximum—at the time the only retirement account I could fund.
Today, by contrast, there’s a slew of retirement choices on offer. Where should those new to the workforce focus their dollars? If you have access to a 401(k) or similar retirement plan with an employer matching contribution,

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As the Years Go By

James McGlynn  |  Aug 7, 2019

YOU CAN THINK of retirement as having four phases. Want to make sure you make the right decisions at the right time? An age roadmap can help.
Phase No. 1 is the preretirement period beginning at age 55. Why start then? If you leave your employer after this age, you can access your 401(k) without the usual 10% tax penalty on retirement account withdrawals before age 59½. To have this option, keep your 401(k) at your old employer,

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Package Deals

James McGlynn  |  Jun 24, 2019

THE INSURANCE MARKET for long-term-care coverage has had a checkered history—and yet there’s an increasing need for LTC insurance among aging baby boomers. My advice: Forget the original standalone insurance products and instead focus on the new hybrid policies.
What went wrong with the original standalone products? They proved to be underpriced. With policyholders living longer, insurers found themselves paying out more than anticipated. Policyholders also didn’t drop their policies as often as insurers expected—and the low lapse rate meant insurance companies had less chance to book profits while incurring no LTC expenses.

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Last Call

James McGlynn  |  May 14, 2019

WERE YOU BORN between 1950 and 1953, have been or are currently married, and haven’t yet filed for Social Security benefits? There’s a loophole you may want to take advantage of—before it disappears.
For couples, settling on the right strategy for claiming Social Security benefits is critically important, because it affects the size of each spouse’s benefit or spousal benefit, as well as the survivor benefit. But the payoff can be especially large for the group I’m discussing here—those born between 1950 and 1953.

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