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Hey everybody. Welcome into the podcast. Thanks for hanging out with Jude Wilson and myself as we talk investing, finance, retirement. And this week, as I mentioned, we got a special guest. So I’m going to let Jude get in here and do some of the interviewing with Kerwin, and he’s going to join us as well. So guys, welcome in first, Jude, how are you? My friend? I’m doing excellent. I’m so excited about today. This is a topic that we don’t touch on very much, but it’s an important topic. Yeah, no, it definitely can be and it gets complicated. So that’s why we got Kerwin here. So Kerwin, my friend, thanks for joining us. How are you? I am doing fantastic. It’s a pleasure being with both of you. I look forward to the conversation as we move forward, absolutely. So Jude, take it away, my friend. I mean, there’s so many parts and you could start so I’ll let you kind of take off where you want to go, but let’s get into it. Let’s do it. First of all, current. Just tell us a little bit about about your background. Is when we have experts on the show, we want to highlight a little bit about who they are and and the experience that they have. So tell us a little bit about your background, specifically in this area of Medicare. Well, you know, I got into this industry as a result of a personal tragedy of mine, you know, my lost my dad back in 2018

 

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and it was my first introduction to the entire health insurance space. And prior to that, I spent some time in law enforcement, 2012, years in law enforcement altogether, had a brief stint in the military, but when I went through what I had gone through with my dad, after seeing him bedridden for five years and talking to doctors and so forth, I said, you know, life is so short. He passed away at 69 I said, Okay, it’s time for me to kind of do what I want to do, and step out and do something completely different. Wanted a little bit of freedom, so I decided to get into insurance, because I had to deal with insurance as a consequence of my dad’s situation. And so I got licensed back in 2019

 

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and slowly, I started off with health insurance helping folks under 65 and then I transitioned to helping the scenic community. So I’ve been licensed now since 2019 I’m licensed in over 15 states, based here in Florida, right here in winter, spring, Seminole County. And I enjoy what I do. I enjoy what I do. That’s an amazing background. There’s, in my opinion, nothing gives you more passion towards something that you’re doing other than having a personal experience that relates to that those type of experience gives you that that that passion that makes you, that it makes it more than just a job, because I assume, just from listening to you and hearing you speak about this, that this is something that you really want to help people. It’s not just about, you know, providing an insurance policy. It’s about helping people and coordinating

 

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absolutely, you know, Medicare is a very complex topic, and this is not a dig at the federal government, but I don’t think they do a good enough job of simplifying and explaining things to seniors. And so you have a wonderful group of folks who it’s their first introduction to Medicare. And so you have all kinds of moving parts there, and they just need some guidance and some help. And so it’s very, very important to provide that help. And it changes every year. You know, things change, laws change, so it’s important to have the kind of advocacy and information readily available to provide to those folks. Very, very important. I love that word advocacy, because here on the show, the show is titled the Roth guy, but it’s about tax efficient financial planning in all of the areas that affect financial planning. And I can’t think of one area that’s more important than Medicare, particularly when you know health insurance and taxes are going to be the two biggest expenses that most people face in their in their lifetime, but particularly in retirement. So let’s get into it. Let’s get into the Medicare piece. There’s so many fallacies and misconceptions people confuse sometimes saying Medicare with Medicaid. So I’m excited to have you on the show that we could talk about it and demystify it for people. Let’s start off with what exactly is Medicare and what it is not. Okay. So Medicare is really a federal program. It’s a federal program for health insurance for seniors, particularly for those turning 65 and beyond.

 

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The folks who have Medicare. Jude, that are under 65 are those who have been on disability for at least 24 months or more. You know when I come across somebody who’s younger than 65 immediately I know that they have disability. SS.

 

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Di, not to be mistaken with SSI, which is Social Security income SSDI, so those are the individuals who will be on Medicare prior to 65 but by and large, the greater populace of folks who are seniors, they are getting Medicare at 65 it’s a federal program, Medicaid, however, is a state run program. Every state in the United States have a Medicaid system, but that’s Medicaid, and that has to do with folks who fall into the category of low income. Okay, now you could have both, and a lot of people out there have both, but Medicare as a whole, to your question, are for those who are turning 65 and over for health insurance. Well, I love the fact that you brought up the age, because traditionally, in our financial planning, when we meet people, it’s usually right before they’re going to retire. The window between their working years and retirement years is coming close, and they’re asking me a lot of times one major question, hey, you know, Jude, do I have enough assets to retire, and I in return, ask them what their lifestyle is like, what their expenses are. And the one thing that most of financial advisors don’t take into account is the healthcare expense. And for a lot of people, retiring prior to the age of 65

 

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is out of the question, because they never took into account, oh, my God, I’ve got to cover the health care expense that my employer was covering before. So most people, they have that magical age of 65 in their head because they know that’s when Medicare is going to kick in. Tell us more about enrolling in Medicare and what’s involved around that age to prepare for enrollment.

 

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Well, just to underscore what you just said, a lot of people, unfortunately can or will not and cannot financially retire until they get to Medicaid age because they would not have the necessary resources to fund that health insurance, wherein their company, their employer, was able to do it. So a lot of people hold off. What they do is they take their company’s coverage, or they go on what we all know as Obamacare marketplace plan, you know, and those, of course, are some of the most of them are subsidized by the federal government, leaving a very small portion of that monthly premium, which would which would be the client’s responsibility. Now Medicare as a whole, you’re eligible to go on Medicare if you’re brand new to Medicare, if you’re brand new to Medicare, you’re turning 65 and this is your first experience going on to Medicare at least three months before you turn 65 so let’s say, for instance, I’m turning 65 in July, three months prior to July, I could effectively enroll into a plan and go on to Medicare. However, my coverage will not begin until the very first day of my birth month. So we’re talking May,

 

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April, May, June, I could effectively enroll into a plan, whether or not it’s a Medicare Advantage plan or a supplement plan,

 

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April 1, but again, it doesn’t go into effect until July 1, and then three months thereafter, I could also enroll. So it’s a window of seven months, right? That you could actually, that’s the window where you could actually enroll into Medicare. If you’re brand new to Medicare, and it’s really referred to the initial enrollment period, IEP, you know that’s what a lot of people know it as, IEP, the initial enrollment period. So you could enroll them. And what you’re typically doing is, you’re notifying social security medicare that you would like to activate Part A and Part B. What is part A? So part A has to do with your hospital related costs. Okay, anything that’s hospital related, you go into the hospital, you stay a couple days that’s hospital related items. Part B has to do with visiting your primary care doctor or visiting a specialist or going to an outpatient facility, etc, etc. Part D is actually a prescription drug coverage that is very, very important, and I’m sure that we’re going to discuss that later on. And then, of course, we have Part C. Part C is a combination of Part A, Part B and Part D. It’s referred to as Medicare Advantage, which the majority of seniors are on, quite frankly, throughout the United States.

 

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Yeah, this is what we lovingly refer to as the ABCs of Medicare. And people get so confused about, you know, the differences between all of the choices. So let’s talk a little bit about Medicare supplements and how that plays a role into the whole Medicare discussion. So Medicare supplements is also known as Medigap, and what it is is.

 

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Is you have Original Medicare which comprises Part A and Part B. Again, a is hospital and B is medical. Well, that only covers 80% of your overall cost, which leaves you with 20% that you’re going to be responsible for. Well, what you can do is you could get a Medicare supplement plan or a Medigap plan. It’s all one in the same to cover that remaining 20% and where do you get it from? When you get it from private insurance companies like United Healthcare, like Humana, like Cigna, like Aetna, and there are some smaller companies as well, but you basically get a supplement plan to cover the remaining 20% which Original Medicare does not cover anything that Original Medicare will pay for. That supplement will naturally follow and pay and pay for it.

 

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That is what that supplement plan is. Now it’s very, very important to understand what that does. Because, let’s say, fun. This is, this is how I explain this to my clients. Hey, you go to the hospital. You have a bill for 100,000

 

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Original Medicare will pay that 80,000 for you. The remaining 20% is what that supplement plan is going to cover. If you did not have that in place, that all of a sudden becomes your personal responsibility, you’re going to have to foot that bill. So it’s very, very important to understand those gaps and make sure you have the right coverage to cover them. That’s a great explanation, and I think it’s going to help a lot of people kind of consolidate and understand what’s going on. You know, one of the common things that we face when we’re doing holistic planning for the clients is, you know, how does this fit into overall retirement planning? One of the big issues that generally gets asked or missed is Irma. Can you talk a little bit about and, you know, Irma is not necessarily a person. So can you talk a little bit about what Irma is, and how does it relate to Medicare? I got to share that with him, Jude, since Kerwin on our show for the first time. So I surprised Jude a couple years ago, Kerwin and I said, the two people that have always got your hand or their hand in your pocket is our Uncle Sam and our aunt Irma.

 

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He’s like, who is? Who’s Irma? And I was like,

 

12:18

yeah, so, but it is. It’s it’s one that people don’t realize is out there. So give us a little bit of background on that, please. So Irma, it really sounds like a person’s name, I mean, to be honest with you, Irma is the acronym. Irma itself really stands for income related adjustment amount, monthly adjustment amount. And so what it is, it has to do with your modified adjusted gross income Medicare as a whole, when you transition onto Medicare, Medicare is looking back at least two years to determine what your permanent amount is. Okay, they have a two year look back. So

 

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this is where you guys, as the financial advisors and specialists really need to educate your clients on you know, Roth IRAs and taking those distributions in a very strategic manner, because when Medicare look back two years, depending on what your income was, your modified adjusted gross income two years ago, that is what they’re using to calculate your Medicare Part B premium. Okay.

 

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Numbers change it from year to year. But let’s talk about 2025 I mean, 2025 your Medicare Part B premium is $185

 

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if you earn up to $106,000

 

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as an individual, as an individual, okay,

 

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let’s say, for instance, you make more than that from anywhere past 1106 up until 133

 

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your Medicare Part B premium increases. So I have clients who make a lot of money, half a million dollars or more, they pay a higher Medicare Part B premium. So if you’re retiring at 65

 

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and for whatever reason you want to take a lump sum of money from your other investments. My my strong advice is to get with Jude, get with Jude and his company. I like that recommendation and and definitely have a consultation with him, because I’m sure they’re going to recommend a plan to strategically withdraw those funds in a systematic way, just so that you’re not hit with a very high earner amount. And it comes from Social Security. This is very, very important. So it’s not just getting onto Medicare. It’s really strategically planning how you’re going to retire and getting with the professionals who could advise you on doing that, because when you start taking those RMDs and so forth, or those big lump sum of money from your Roth, IRA, traditional IRA, it could really have a significant impact on what you’re going to be paying. Well, to your point, I’ll give you an example. In fact, I taught a seminar last night called taxes in retirement, and this is one of the areas that we cover. I had a client who came to the seminar that.

 

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Same seminar several years ago, and after the seminar, he decided to see me for consultation. And the gentleman and his wife, both of them were brilliant. They had saved up to $3 million in retirement accounts, IRAs, 401, KS, and his goal was to convert that $3 million over the next three years prior to retirement, he wasn’t 65 yet, and he was he had approached us about getting some consultation, talking about some of his scenarios, and we had to inform him that even though he was okay with paying the taxes on the conversion, because when you convert from a traditional IRA to a Roth obviously, you have to pay the taxes as income for that year. What he did not realize is the cost that Irma would have adjusted the Medicare premiums for. So we actually saved him 1000s of dollars by doing exactly what you said, strategically, doing Roth conversions to make sure that he wasn’t penalized on the back end from doing these, these conversions, we’re going to try to wrap things up by giving some the people some of the other things that they could possibly avoid in making some mistakes around Medicare. Here’s one of the basic mistakes that I recognize with a lot of folks turning 65 they simply do not seek consultation. Jude,

 

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they don’t ask questions. It’s very, very important, and it’s very, very important to understand, when you deal with Medicare brokers, then they cannot it is illegal. It is illegal for them to charge you a consultation fee. So in essence, when you choose to partner with a Medicare insurance agent or a broker, you’re getting their time, their knowledge, their experience and their competence level, all for free. The insurance companies are the ones who actually compensate us. So if I were somebody turning 65 I would leverage the opportunity to sit with somebody who obviously does this every day, studies it every day, and could save you a lot of time and headache and problems, because making a mistake could be a very costly mistake. I mean, things could be undone or reverse, but it could be avoided altogether by just seeking somebody either close to you or somebody, some trusted soul, who’ve been doing this for some time and obviously have a good reputation so not asking questions. Here’s another reason here. Here’s another

 

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area that a lot of people make mistakes. And that is, if you have Original Medicare A and B and you have a supplement plan, it is absolutely required to get a standalone Part D prescription drug plan. A lot of people think about the medical aspect of coverage, but what they forget to do is sign up for a a prescription drug plan. Not doing that is going to trigger what we call a LEP a late enrollment penalty

 

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and Social Security. With those things, it’s not like they slap you on your wrist for six months and they come back and they let it go. You’re going to have that related Enrollment Penalty for the rest of your life. Being on Medicare. It adds up incrementally over time. It’s the same way if you didn’t apply for Part B when you should have there’s going to be a fee. So over, over the course of time, the longer you stay without Part B, you could not have it for 12 months, for 12 years, when you, when you eventually choose to have that, there’s going to be a fee that you’re going to have to pay. And that p, that fee, it could be whatever it is, set by the Social Security at that time. My point is,

 

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you want to sign up and you want to act during the parameters and time frames set forth by Social Security. Again, it goes back to finding somebody who’s qualified, who know about these things, who could advise you accordingly. Sorry to stop you, but I gotta tell you, dude, I didn’t know that what I’ve talked about this stuff for years. I didn’t realize that they could stick you with a penalty like for life. Yeah? That that, that’s amazing. That’s, that’s a, if nothing else, folks, please take that nugget with you from this week’s episode. Yeah, yeah. That’s amazing. That’s, that’s a good nugget to learn. Yeah, anyway, go ahead, sir. Yeah. Um, those are just some of the those are just some of the main items. Here’s one more thing,

 

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and these are all rules set by Medicare, set by CMS, which is the governing body that oversees Medicare. Okay, if you work for a small company that has 20 employees or less,

 

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you have to sign up for Part A and Part B. If you don’t, you become the primary person who’s going to pay your medical bills, and your company will be the secondary person that can become very, very costly. Yeah. Wow. So you definitely want to sign up for Part A and Part B and then Original Medicare. They become primary.

 

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Property the company becomes secondary. And of course, you fall in after that. You do not want to be in the first position. Folks, yeah, no, no, yeah. As a small business owner, thank you for that nugget as well.

 

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So obviously, if it’s 20 employees or more, yeah, the company’s group coverage will be primary and Medicare will be secondary. So these are little things that a lot of people are unaware of. And again, it just takes a phone call to somebody who you trust. You know you got to get with you got to get with a professional. You got to get with an insurance professional who who specialize in Medicare. And of course, it’s going to save you a lot of time and headache at no cost to you all. It’s going to cost is just a little bit of your time, yeah? But, and I could not have said it any better, yeah, I could not have said it any better, because the the whole mission of the show is to educate people and let them know that financial planning is it’s a contact sport. It’s not just about investments or not just about taxes. It’s really a coordinated effort between you, the client, and coordinating with the experts in each one of these areas. And I love your energy that you bring to the table, because several times during the during this conversation, you’ve said, you know, we need to look at the other aspects that could affect your Medicare choices, and that’s why, you know, I love working with you, because when we’re looking at a client’s overall strategy, we’re looking at everything that could affect them financially. And this is a really big piece, so I can’t thank you enough for educating our listeners today. I hope that people got some value out of the show, and we’re definitely going to highlight your contact information, because you’re one of the experts I trust in this area. I really appreciate the time being here. Mark and Jude, you guys have been phenomenal. Thank you so much for doing what you do in helping those people transition from Medicare into financial planning, which obviously is going to be for the rest to be for the rest of your life. So you do a very, very important job as well. Jude, we appreciate you as well. Well, folks, thanks. Mark, anything else I was gonna say, No, that’s great. There’s some good stuff. I want to say, Thanks for your thanks for your time, folks. As always, we appreciate it here on the Roth guy, check the Show descriptions below. We’ll have links to get in contact with both Jude and Kerwin. So that way, if you would like to reach out and have a conversation, the guys will be here to help you. So again, check the Show descriptions below and click on the links, and that’ll just, you know, make that make life easy for you. As always, you can reach out to Jude at 800-779-4592

 

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800-779-4592

 

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don’t forget to subscribe to the podcast on Apple Spotify, and of course, here on YouTube, hit the subscribe button, thumbs up and the notification bell so you catch new episodes when they come out. It supports the channel and helps us bring content like this to you and hopefully learn something new, because we’ve been doing this for years, and we just learned something new. So I’m sure you guys did as well. So thanks for hanging out with us here on the Roth guy. Guys, appreciate your time. We’ll see you next time

 

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financial planning and advisory services are offered through prosperity Capital Advisors, PCA, an SEC registered investment advisor with its principal place of business in the state of Ohio, centrist financial strategies and PCA are separate non affiliated entities. PCA does not provide tax or legal advice. Insurance and tax services offered through centrist financial strategies are not affiliated with PCA. Information received from this podcast should not be viewed as individual investment advice. Product discussions and illustrations are hypothetical in nature and will vary based on many factors, including, but not limited to age, health product insurance carrier and product design, you should consult the insurance carrier website and policy for detailed information, for information pertaining to the registration status of PCA, please contact the firm or refer to the Investment Advisor public disclosure website, www.advisorinfo.sec.gov,

 

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you.