Personal Finance

What to know about selecting health plans

Published

1 month ago

February 24, 2025

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Although a broader window for Medicare enrollment has closed, some retirees have another opportunity to make changes to their coverage.

Medicare Advantage open enrollment is available from Jan. 1 through March 31.

Medicare Advantage plans are offered by private insurers as an alternative to original Medicare. Generally, Medicare Advantage may cover Medicare Parts A and B, as well as Medicare Part D prescription drug coverage and other potential extra benefits.

During this open enrollment period, individuals who are already enrolled in a Medicare Advantage plan may switch to another Medicare Advantage plan. Alternatively, they may drop their current Medicare Advantage plan and opt for Medicare original coverage.

To be sure, there will be more options later in the year during a broader open enrollment period that lasts from October to December, when Medicare original enrollees may also opt to change plans.

For beneficiaries who are eligible to make changes during this time, it’s important not to ignore this window, according to Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a provider of health policy research.

“Plans can change considerably from one year to the next,” Cubanski said. “If people don’t compare their coverage to other options, they may not know that they’re going to be faced with higher costs.”

Check for significant changes

In order to be confident that you’re getting the best deal, it helps to evaluate how your current Advantage plan may have changed since last year.

You may be faced with higher costs if your personal prescriptions have gone up, for example, or your preferred medical provider is no longer in network.

Digging into those plan changes now can help avoid “bad surprises” later, according to Cubanski.

“Make sure the coverage that you have is going to continue to be the coverage that works best for you,” Cubanski said.

Planning for long-term care: Here's what you need to know

Consider extra benefits

To be sure, Medicare Advantage plans have received negative attention because in some cases coverage was denied for necessary care.

Medicare Advantage plans are more likely than traditional Medicare to use prior authorization, approval needed before a patient can receive certain services or medications. However, because prior authorizations that have been denied are frequently overturned when they are appealed, that has prompted questions as to whether the plans are avoiding coverage obligations.

Medicare Advantage plans are more likely than original Medicare to offer extra benefits — such as dental, vision and hearing — that elderly beneficiaries need.

Most Medicare beneficiaries — 83% — consider supplemental benefits to be important to their coverage, according to a recent survey from The Commonwealth Fund, a provider of independent research on health care issues.

Notably, a larger share of Medicare Advantage enrollees — 89% — said supplemental benefits are important to them, versus 74% of traditional Medicare enrollees, The Commonwealth Fund found.

“People on Medicare, both older adults and those with disabilities, generally really need dental, hearing and vision services, as well as other benefits that are typically offered by Medicare Advantage plans,” said Gretchen Jacobson, vice president of Medicare at The Commonwealth Fund.

Beneficiaries who are in traditional Medicare may not have coverage for those same services unless they are able to purchase a supplemental plan or they qualify for Medicaid, Jacobson said.

Seek outside help

When it comes to comparing Advantage plans, beneficiaries do not have to go it alone, Cubanski noted.

State-based organizations — the State Health Insurance Program, or SHIP — provide assistance to Medicare beneficiaries to help sort through their plan options.

Unlike insurance brokers or other professionals, these organizations do not have a financial interest to sign people up for certain plans, Cubanski said.

Personal Finance

How to check eligibility to claim the $1,400 IRS stimulus check

Published

12 minutes ago

April 9, 2025

Business Finance News

The federal tax deadline is less than one week away — and there’s still time to collect a pandemic-era IRS stimulus check. It’s your final chance to do so.

If you’re unsure if you received the money, there’s a simple way to check via your IRS account online, tax experts say.

The 2021 stimulus payments were worth up to $1,400 per individual, or $2,800 per married couple. A family of four could receive up to $5,600 with two eligible dependents.

Filers who never received the funds could claim the recovery rebate credit on their 2021 federal return. The last chance for that credit is the 2024 tax deadline on April 15, according to the IRS.

You’re eligible for the full recovery rebate credit with up to $75,000 in adjusted gross income as a single filer or $150,000 for married couples filing jointly for 2021.

The phaseout begins with earnings above that and eligibility falls to zero once adjusted gross income reaches $80,000 for single filers or $160,000 for married couples filing together.

The ‘best place to look’ for stimulus checks

The IRS in December unveiled plans to send “special payments” to 1 million taxpayers who didn’t claim the 2021 recovery rebate credit on tax returns for that year.

Most payments should have arrived via direct deposit or mailed paper check by late January 2025, according to the agency.

You can create a login for your IRS online account to check the status of your economic impact payments, including the 2021 stimulus check.

“That’s the best place to look,” said Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

After logging into your account, you can find stimulus check information in the “tax records” section under the “records and status” toolbar.

You can also check the “tax records” section to see if you filed a return for 2021. While some taxpayers don’t earn enough to have a filing requirement, you must submit your 2021 return to claim the recovery rebate credit for your stimulus payment, Lucas explained.

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File your 2021 return if ‘there’s any doubt’

In some cases, online accounts show the IRS issued stimulus checks, but filers say they never received the money, said Syracuse University law professor Robert Nassau, director of the school’s low-income tax clinic.

“If there’s any doubt” about your payment, it’s better to file your 2021 return and claim the recovery rebate credit before April 15, he said. Otherwise, you could miss the deadline and lose your chance to collect the money, Nassau added.

Personal Finance

Here’s how to leverage tax-loss harvesting amid tariff volatility

Published

24 hours ago

April 8, 2025

Business Finance News

Sean Anthony Eddy | E+ | Getty Images

Amid stock market volatility, many investors are seeking portfolio protection. But they could be missing a prime tax planning opportunity, experts say.

The strategy, known as tax-loss harvesting, is selling losing assets from a brokerage account to offset other investing gains to lower taxes. Losses are typically used to offset gains, such as those from investment sales or capital gains distributions from mutual funds or exchange-traded funds.

Once losses exceed profits, you can subtract up to $3,000 from regular income. After that, you can carry excess losses into future tax years indefinitely.

“It’s looking for a silver lining on a pouring, rainy, cloudy day,” said certified financial planner Sean Lovison, founder of Philadelphia-area Purpose Built Financial Services.

Investors should weigh tax-loss harvesting opportunities anytime there’s stock market volatility, experts say.

“That should be throughout the year,” said Lovison, who is also a certified public accountant.

Tax-loss harvesting could be attractive with the S&P 500 Index still down more than 15% from an all-time high in February as of midday Tuesday. The index briefly entered bear market territory — more than 20% off its record — during Monday’s session amid tariff uncertainty.

Here are some key things to know about tax-loss harvesting, financial advisors say.

You need a ‘very granular’ strategy

While tax-loss harvesting sounds simple, the current market pullback requires a “very granular” approach, according to CFP Judy Brown at SC&H Group in the Washington, D.C., and Baltimore area.

After many years of market growth, investment losses could include more recent purchases, said Brown, who is also a certified public accountant. She has been busy identifying specific “tax lots,” which are transaction records showing an asset’s purchase date and price.

You need systems to “quickly find those lots” to sell for the tax-loss harvesting benefit, Brown said.

Seeking safety amid market volatility: Strategies to keep your money safe

Know the ‘wash sale’ rule

One of the perks of tax-loss harvesting is that you can sell assets for a loss and reinvest a similar investment to maintain exposure, Lovison said.

But you need to know about the “wash sale rule,” which blocks the tax break for buying a “substantially identical” asset within 30 days before or after the sale, according to the IRS.

While individual stocks may be easy, there’s less IRS guidance on how “substantially identical” applies to mutual funds and ETFs, experts say.

For example, you could sell one large cap fund family for another from a different family when the holdings are slightly different, Lovison said.

But if you’re repurchasing the same exact index holding identical funds, “that might not pass the [IRS] sniff test,” he said.

Personal Finance

529 college savings account tips as market roils

Published

1 day ago

April 8, 2025

Business Finance News

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It’s an uneasy time for the many families who rely on the stock market’s returns to send their children to college.

Stocks have been in the red amid President Donald Trump’s new tariff policy and worries of a global trade war. The S&P 500 dropped around 15% between when Trump took office on Jan. 20 and Apr. 7, according to Morningstar Direct.

The index shed almost 11% in the two days of trading ending Friday, and continued its decline Monday. It was little changed Tuesday afternoon.

State-sponsored 529 college savings plans, like other investment accounts, may see the market selloff reflected in their balances. These plans, which are named after Section 529 of the Internal Revenue Code, allow parents to invest money and then withdraw it tax-free to cover certain education expenses.

Fortunately, you have options if a college bill is due soon, financial experts say. Meanwhile, if your child is still young, it may actually be a good time to buy stocks at a discount.

“The stock market will eventually recover,” said higher education expert Mark Kantrowitz.

At least that’s what history has shown. If an investor put $10,000 into the S&P 500 index on Jan. 3, 2005, and left that money untouched until Dec. 31, 2024, they would have amassed $71,750, for a 10.4% annualized return over that time, according to JPMorgan Asset Management’s research.

Here’s what college savers should know during the market volatility.

Age-based risk should protect many investors

Many 529 plans use an age-based asset allocation — meaning the mix of investments is based on the beneficiary’s age and time horizon, and typically becomes more conservative as they approach college enrollment age. In other words, families likely have very little invested in stocks by the time college is around the corner, and more in investments like bonds and cash. That can help blunt their losses.

“A 5 year-old has a long time horizon, whereas someone entering [college] this fall should not have that much at risk,” said Barry Glassman, a certified financial planner and the founder and president of Glassman Wealth Services.

Another benefit of the age-based investment strategy is that the funds automatically rebalance to sell high and buy low, added Glassman, who is also a member of the CNBC Financial Advisor Council.

“So not only are they getting less risky over time, but they have been taking profits as stocks have soared to bring risk back into check,” he said.

Parents should check to see if their 529 plan account is invested in “a dynamic” portfolio, Kantrowitz said.

“The dynamic portfolios change the asset allocation either by age or enrollment date,” he said.

Typically, the age-based accounts start off at the time of the child’s birth with 80% to 90% in stocks, and gradually reduce that share to under 30% as college approaches, Kantrowitz said.

Short-term workarounds to preserve your 529

If you’re facing an imminent college bill and see that your 529 account balance has taken a big hit of late, you still have options to avoid drawing down the balance and to give stocks time to potentially recover, experts said.

You can use other potential cash savings or income to try to delay a 529 plan distribution until the market comes back, Kantrowitz said.

Another workaround would be to borrow federal student loans for now, with the aim of later taking a qualified distribution from the 529 plan to pay off the debt.

Families can potentially use their 529 college savings account to repay student debt for a beneficiary without incurring taxes or penalties, Kantrowitz explained. But the lifetime limit of the option is $10,000, he said.

‘Families should save more now’

Families with many years ahead of them before sending their child to college should see the current moment as investment opportunity, Glassman said.

“During market turmoil, they are scooping up bargains to invest for the future,” Glassman said.

Kantrowitz agreed.

“Pulling out funds now will lock in losses,” Kantrowitz said. “If anything, families should save more now that the market is down.”

Over longer periods, the stock market has historically given more than it takes.

Advisors say it’s best for investors, once they’ve set up a smart allocation strategy, to look away from headlines and let the market do its thing.

As stressful as the last few weeks may have been, such dips are not unusual, Kantrowitz pointed out. The stock market typically experiences at least three 10% drops and at least one 20% drop in any 17-year period, the typical timeline from birth to college, he added.