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By Jason Stipp and Christine Benz | 09-05-2013 02:00 PM

Fourth-Quarter To-Dos for Retirees

Medicare enrollment, required minimum distributions, and fixed-income risks are just a few of the items retirees should check before year-end.

Jason Stipp: I'm Jason Stipp from Morningstar. As we approach the fourth quarter, retirees should begin to compile their Q4 checklists and to-do lists here to offer some tips is Morningstar's Christine Benz, our director of personal finance.

Thanks for joining me, Christine.

Christine Benz: Jason, great to be here.

Stipp: Retirees should compile very specific checklists. They have some more specific things than investors at large, and you say the first thing they should do is check out Medicare open enrollments. Even if there are already happy with their Medicare, they still should do a little bit of shopping?

Benz: Right. Mark Miller, who is a contributor to Morningstar.com and really focuses on Medicare and Social Security for us, says that retirees should reshop their Medicare Part D prescription drug coverage every year, in particular, just to make sure that they're in the right plan for them because prescription drugs that one might be on might change from year to year. What may have been covered perfectly in the past, may not be in the future. Just do your homework to make sure that the drugs that you're currently on will in fact be covered in 2014 under the plan that you choose.

Stipp: I know he's written about some variance in the fees for some of the policies and the Medigap policies. There can be substantial differences in some years so it just pays to tune in and shop around.

Benz: Exactly. You can reshop that supplemental coverage that you have as well just to make sure that your plan is cost-effective and as comprehensive as you can possibly afford.

Stipp: Also on the topic of health care, Christine, you say it's important to make sure you are tracking your health-care expenditures. This is important because you can write off a certain amount those expenditures that exceed a certain percentage of your AGI, or adjusted gross income, but that percentage has changed?

Benz: It did change, starting in 2013 for people under age 65. In the past, it had been anything of over 7.5% of your adjusted gross income could be deductible. It went to 10% for people under age 65 starting in 2013. But the good news is, if you are over age 65, you have a bit of a grace period until that higher threshold kicks and you'll have the next several years. For 2013 and the next several years, your threshold will remain 7.5%. If you have out-of-pocket health-care expenses that are over that threshold, you'll be able to deduct them. It's really a pretty broad basket; it includes insurance premiums and prescription drugs and even can include transport to and from medical care that you might need.

Make sure to document those expenditures. In my experience helping my parents with this, pharmacies are really good about providing a year-end statement of out-of-pocket drug costs. You may be able to get some help; you may not have to do all of the documentation yourself.

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