The One Mistake You Don’t Want to Make with Your Long Term Care Insurance

Contributed by: Sandra Adams, CFP®

If you’re reading this, you are likely among the few people who have planned ahead and purchased Long Term Care insurance. By doing this, you intend to protect yourself and your family and hedge your assets against the possible threat of a long-term care event (need for care in your home, assisted living or nursing home).

Given that only about 7-10% of Americans own Long Term Care insurance (AALTCI 2025 data) and 60-65% of Americans over the age of 65 will need some form of long-term care services (ConsumerAffairs 2025 data), you will likely need the insurance you’ve purchased. The question is, will you use your Long Term Care insurance when the time comes?

I have had several client experiences that looked like this: The client was at or near a point of qualifying for benefits under their Long Term Care insurance for either physical or cognitive reasons.

The client and/or the family made the decision to not begin the claim process. Why? They wanted to wait a while longer, continue to try to care for the client on their own, save the Long Term Care insurance benefits for later, when they really needed them.

The results in nearly all of these cases? The clients either never filed a claim or filed far too late, ended up in a long-term care facility, and ultimately passed away without ever receiving the policy benefits for which they had made years – even decades – of payments.

In my experience as a financial advisor, I have never had a client run out of a Long Term Care benefit pool. I am not here to tell you that it does not happen – it certainly can. But I am here to tell you that I do not believe it happens often. I have searched far and wide for statistics that would show how often it happens and cannot find a number!

Although your Long Term Care insurance company would prefer that you wait to put in your claim, I recommend that you consider doing so as soon as you are eligible. You can always stop the benefits if you no longer need them, then restart later. And if you max out your benefits, you have the satisfaction of knowing that you received 100% of your benefits and protected your assets to the greatest possible degree. Don’t lose out (or let your parents lose out) on the Long Term Care insurance benefits they have purchased!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Sandra D. Adams and not necessarily those of Raymond James.

Long term care policies have exclusions and/or limitations. Guarantees are based on the claims paying ability of the insurance company.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

3 Types of Practical Disability Coverage You Should Know

Contributed by: Josh Bitel, CFP®

According to the Social Security Administration, studies have shown close to 1 in 4 20-year-olds, will become disabled at some point before reaching age 67. Wow! This is a pretty staggering statistic – these odds are far greater than a premature death, which is what life insurance is typically purchased to protect against. However, often when we discuss disability insurance with clients, we find that it’s an area of confusion. Many aren’t even sure if they have coverage or they may believe that Social Security will kick in and be enough. For most of us, especially if you’re in the early stages of the “accumulation mode” of your career, your earnings power is most likely your largest asset both now and into the foreseeable future. A disability can wreak havoc on this “asset” which is essentially why disability insurance is purchased. Let’s look at the basic types of coverage:

1.  Short-Term Vs. Long-Term Disability

Long-term disability typically has what’s known as an “elimination period” of how many days must pass before benefits begin. This is often called the “time deductible” of the policy which in many cases is 90 days, though ranges can vary. Benefits can payout up until Normal Retirement Age, which can be 67 (depending on birth year), however, most policies have a stated period of time where benefits would be payable. To help bridge this gap of coverage, a short-term disability policy can come in handy because benefits will usually begin within a week or two of disability and continue for up to one year, although benefits typically last between three to six months. Short-term disability policies can be a great tool to preserve your emergency cash fund, typically at a somewhat reasonable cost.

2.  Group Coverage

As with life insurance, many employers offer a form of disability insurance to their employees as part of their benefits package. Sometimes the employer will pay for the premium in full and other times the employee will have the option to pay for premiums (fully or partially). You may be asking yourself, “Why would an employee want to pay for the group coverage instead of having the employer foot the bill?” Great question, with very important ramifications! If the employer pays your premiums in full, the entire amount of your benefit if needed (typically between 50% and 60% of your pay, some employers offering up to 70% coverage, up to certain limits) would be taxable. If you as the employee were paying for the premiums in full and you needed the coverage, benefits paid out would NOT be taxable. If you were only paying a portion of the total premium, say 20%, only 20% of the benefits paid would be non-taxable to you as the employee. The tax treatment of benefits will have a large impact on the net amount of benefit that hits your bank account so it’s important to understand who’s paying for what if you have access to a group disability policy at work.

3.  Individual Coverage

As the name implies, individual coverage is purchased by you through an insurance company – the policy is not offered through your employer. A major benefit of purchasing an individual policy is that the coverage is portable, meaning you can take it with you if you change jobs because it’s not tied to your company’s benefits package (most group policies are non-portable). Another advantage (or disadvantage depending on how you look at it), is that you are paying for the coverage in full so if benefits are needed, they will not be taxable to you. With an individual policy, you have control over selecting the definition of disability that your policy uses (any occupation, own occupation, etc.) and you’d also have the option to add any additional features to the policy, usually at an additional cost.

In this blog, we’ve merely scratched the surface on disability coverage. As I mentioned, it is often one of the most overlooked parts of a client’s financial plan and coverage types, despite its high probability and significant risk of long-term financial loss. At a minimum, check with your employer to see if group coverage is offered (both long-term and short-term) and consult with your financial planner on whether or not it is sufficient or if additional coverage would be recommended.

Josh Bitel, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.

What are The Hidden Costs of Buying a Home?

Contributed by: Robert Ingram, CFP®

When buying a home within your budget, it’s important to consider the costs beyond the mortgage.

Let’s begin with the costs to purchase a home.

Even while carrying a mortgage, you will need to make a down payment. While there are low down payment loans, try to put down at least 20% of the purchase price. Otherwise, your loan may have a higher interest rate and you could face additional monthly costs such as mortgage insurance.

You will have closing costs, which can include things such as loan origination fees for processing and underwriting the mortgage, appraisal costs, inspection fee, title insurance, pre-paid property taxes, and first year’s homeowner’s insurance. Generally, you should expect to pay between 3-5% of the mortgage amount.

Now, you will have ongoing costs to live in your home.

Annual property taxes average about 1% of the home value nationwide, but the tax rates can vary widely depending on the city or town. Keep property taxes top of mind when you are looking at different communities.

Homeowner’s insurance is another annual cost that not only depends on the value of the home and the contents within it you are covering, but also on the state and local community. This cost generally ranges between $2,000-3,000 per year, sometimes more.

If your home is a condominium or a single family home, you should expect annual or monthly homeowner’s association fees that cover the care of common areas, the grounds, clubhouses, or pools. Depending on the number of amenities and of course the location, average fees range from $200-400 per month.

While you may be used to paying some utilities as a renter, the size of your new home could significantly increase your utility rates. Going from an 800 square-foot apartment to a 2,500 square-foot house could double or triple the costs to heat it, cool it, and to keep

the lights on. Add your local area water and sewer fees and your utilities could easily reach $600–700 per month or more.

Going from renting to homeownership also means having to maintain the new home (both inside and out). Things can be regular ongoing maintenance like lawn care and landscaping, or larger projects like painting, roof repair, furnace, and appliance replacement. Consider the tools and equipment you would need to buy or the services you would hire to do the work.

Finally, there is another hidden cost that can put a dent in your budget, filling up the house. A home with more rooms can mean more spaces that “need” furniture and other decorative touches. The costs of furnishings can be several thousands of dollars to tens of thousands of dollars. Without proper planning, it can be all too easy to rack up those credit card statements and have a mountain of debt as you move into your new home.

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Can I Afford to Buy a Second Home?

Contributed by: Robert Ingram, CFP®

It’s a dream for many Americans as they envision retirement, having a second home as a vacation getaway, a seasonal escape, or a primary residence someday. Even with the relatively mild winter we’ve just experienced in Michigan It’s easy to appreciate the idea of living away during the cold months or enjoying a summer home up North. But before you can live the dream, do your due diligence and crunch the numbers.

Retirement income expenses include the daily cost of living and the things you want to enjoy. Making a large purchase, such as buying a second home, will take a significant chunk of your savings. If you’ve underestimated the cost, it will wreak havoc on your retirement income.

So, how realistic is your second home retirement plan? Factor in our suggestions below.

Purchasing Costs

If you plan to buy the home using a mortgage, you will of course have a monthly payment. While lower mortgage rates may help with the home’s affordability, even a smaller payment adds the extra expense that your retirement income sources will need to support. Calculate your withdrawal rate (the percentage of savings needed to be withdrawn each year) and determine if it’s sustainable over your retirement years.

Now, if you’re able to purchase the property without a mortgage, yes, you would avoid paying interest and you would have no monthly payment. On the other hand, using a portion of your retirement savings to purchase the home could mean that you have fewer assets reserved for other retirement spending needs. Consider the impact it may have on the sustainability of your retirement income and whether purchasing or financing the property is more advantageous.

Don’t forget about property taxes. They’re ongoing expenses that you must factor into your budget. They vary widely depending on the state and local community. Consider any difference in tax rates; non-homestead property is taxed higher than homestead property.

Additional Costs

Unfortunately, we know that the cost of owning a home doesn’t end with the purchase. This is certainly true with a second home as well. Depending on the property type, location, and climate/environment there may be additional costs that you aren’t used to with your current home. It’s vital that your plan supports these costs as well. Some examples include:

Insurance: You’ll pay annual premiums for homeowner’s insurance on two properties. Plus, homes with higher risk (e.g. hurricane prone southern states) often require additional flood or wind damage insurance. In some cases, this more than doubles the cost of the new policy.

Condo/Association Fees: Buying a condominium or a standalone house in a community with a neighborhood association will likely mean additional monthly fees. Homeowners associations may also impose special assessments during the time you own the property for maintenance projects, community amenities, etc. Understanding the previous history of assessments and the need for future projects can help you better prepare for those potential costs.

Maintenance on two properties: Now you have two homes to maintain. If your second property is far away or you won’t visit often, you may need to hire people locally to provide the maintenance services for you.

Home security: Especially for a home that is unoccupied for long periods of time, you want to protect it from vandalism, trespassing, and burglary. That could mean investing in security systems or working with local service providers to routinely check-in on the property.

Heating and cooling year-round: Unlike cottages or houses up North that you can close down and winterize, vacation homes in warm climates may require you to run the air conditioning when you’re not there. Issues like mold and mildew can be a problem when temperatures and humidity are too high, which is another reason you may need to hire local services to make sure everything is working properly.

Insect/pest control: Your second home may be in a region with insects or other critters that require more regular/aggressive pest control. Add this to your list of monthly or annual maintenance expenses.

What if I Plan to Rent Out my Second Home?

Renting out your second home could be an excellent way to generate additional income to offset the costs of ownership. However, you could face lifestyle compromises. Here are some considerations:

Local rules on renting: It’s critical to understand any local government ordinances or homeowners’ association restrictions on using your property as a rental. In some cases, short-term rentals are not allowed or there are limits on the total number of rentals.

Property management: The farther the distance between your rental and primary properties, the greater chance you’ll need to hire a property manager to provide on-site service for your vacation guests or long-term tenants. Property managers can advertise, book renters, and manage financial transactions. The cost to outsource these services is typically between 20–30% of the rental cost, depending on market.

Additional insurance coverage: Tenants may not be covered by your insurance. Homeowners insurance often covers incidents only when the property is owner-occupied. You may need to add a form of landlord insurance, depending on factors such as the frequency and amount of days you will have the property rented. Review your policy to be sure.

Extra maintenance and repair: You may face repairs and/or need to replace furniture. Studies suggest that the cost to maintain a vacation rental is 2–3% annually of the property value each year.

The decision to buy a second home involves a combination of both lifestyle and financial considerations. Build a sound plan by balancing your priorities. Consult with your financial planner as you work through these important life goals, and if we can be a resource for you, please reach out to us!

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

Medicare Premiums in 2026: What IRMAA Could Mean for Your Wallet

Contributed by: Nick Defenthaler, CFP®, RICP®

In 2026, Medicare Part B premiums for 95% Americans will be $206.50/mo. However, the other 5% will have to face what’s known as the Income Related Monthly Adjustment Amount or IRMAA and pay higher Part B and D premiums. Each year, the chart below (projection for 2026 – income parameters are based on 2024 Modified Adjusted Gross Income) is updated and in most cases, premiums increase gradually with inflation as do the income parameters associated with each premium tier.

Source: Kiplinger

Receiving communication that you’re subject to IRMAA and facing higher Medicare premiums is never a pleasant notification to receive. With proper planning, however, there are strategies to potentially avoid IRMAA both now and into the future.

But first, let’s do a quick refresher on the basics

Medicare bases your premium on your latest tax return filed with the IRS. For example, when your 2026 Part B and D premiums are determined, Medicare will use your 2024 tax return to track income. If you are married and your Modified Adjusted Gross Income (MAGI) was over $218,000 in 2026 ($109,000 for single filers), you’re paying more for Part B and D premiums aka subject to IRMAA. Unlike how our tax brackets function, Medicare income thresholds are a true cliff. You could be $1 over the $218,000 threshold and that’s all it takes to increase your premiums for the year! As mentioned previously, your Part B and D premiums are based off of your Modified Adjusted Gross Income or MAGI. The calculation for MAGI is slightly different and unique from the typical Adjusted Gross Income (AGI) calculation as MAGI includes certain income “add back” items such as tax-free municipal bond interest. Simply put, while muni bond interest might function as tax-free income on your return, it does get factored into the equation when determining whether or not you’re subject to IRMAA.

Navigating IRMAA with Roth IRA Conversion and Portfolio Income

Given our historically low tax environment, Roth IRA conversions are as popular as ever. Especially now, given the extension of our current tax rates as a result of the ‘One Big Beautiful Bill (OBBB)” that was passed in July 2025 (click HERE to read our comprehensive overview of the new legislation). When a Roth conversion occurs, a client moves money from his or her Traditional IRA to a Roth IRA for future tax-free growth. When the funds are converted to the Roth, a taxable event occurs, and the funds converted are considered taxable in the year the conversion takes place. Because Roth IRA conversions add to your income for the year, it’s quite common for the conversion to be the root cause of an IRMAA if proper planning does not take place. What makes this even trickier is the two-year lookback period on income. So, for clients considering Roth conversions, the magic age to begin being cognizant of the Medicare income thresholds is NOT at age 65 when Medicare begins, but rather age 63 because it’s that year’s tax return that will ultimately determine your Medicare premiums at age 65!

Now that there are no “do overs” with Roth conversions (Roth conversion recharacterizations went away in 2018), our preference in most cases is to do Roth conversions in November or December for clients who are age 63 and older. Reason being, by this time, we will have a very clear picture of total income for the year. I can’t tell you how many times we’ve seen situations where clients confidently believe their income will be a certain amount, but it ends up being much higher due to an unexpected income event.

Another way to navigate IRMAA is by being cognizant of income from after-tax investment/brokerage accounts. Things like capital gains, dividends, interest, etc. all factor into the MAGI calculation previously mentioned. Being intentional with the asset location of accounts can potentially help save thousands in Medicare premiums.

Ways to Reduce Income to Potentially Lower Part B and D Premiums

• Qualified Charitable Distribution (QCD)

  • If you’re subject to Required Minimum Distributions (RMD), gifting funds from your IRA directly to a charity prevents income from hitting your tax return. This reduction in income could help shield you from IRMAA. QCDs can begin as early as 70.5, however, they become especially powerful in reducing income tax when RMDs begin.

• Contributing to Tax Deductible Retirement Account such as a 401k or 403b Plan

  • Depositing funds into one of these retirement accounts reduces MAGI and could help prevent IRMAA.

• Deferring Income into Another Year

  • Whether it means drawing income from an after-tax investment account for cash flow needs or holding off on selling a stock that would create a capital gain towards year-end, being strategic with the timing of income generation could prove to be wise when navigating IRMAA.

• Accelerating Business Expenses to Reduce Income

  • Small business owners who could be facing higher Medicare premiums might consider accelerating expenses in certain years which in turn drives income lower if they’re flirting with IRMAA.

Putting IRMAA into Perspective

At the end of the day, higher Medicare premiums is essentially a form of additional tax, which can help us put things into perspective. For example, if a couple (both over 65) decides to do aggressive Roth IRA conversions to maximize the 22% tax bracket and MAGI ends up being $230,000, their federal tax bill will be approximately $29,000. This translates into an effective/average tax rate of 14.78% ($34,000 / $230,000). However, if you factor in the IRMAA the clients will face, which will end up being close to $2,000 (total for the couple between the higher Part B and D premiums), this additional “tax” ends up only pushing the effective tax rate to 15.65% - less than a 1% increase! I highlight this to not trivialize a $2,000 additional cost for the year, as this is real money we’re talking about here. That said, I do feel it’s appropriate to zoom out a bit and maintain perspective on the big picture. If we forgo savvy planning opportunities to save a bit on Medicare premiums, we could end up costing ourselves much more down the line. However, not taking IRMAA into consideration is a miss in our opinion as well. Just like anything in investment and financial planning, a balanced approach is prudent when it comes to navigating IRMAA – there is never a ‘one size fits all” solution.

Fighting back on IRMAA

If you’ve received notification that your Medicare Part B and D premiums are increasing due to IRMAA, there could be ways to reverse the decision. The most common situation is when a recent retiree starts Medicare and in the latest tax return on file with the IRS, is showing a much higher level of income. Retirement is one example of what Medicare would consider a “life changing event” in which case form SSA-44 (click HERE to complete the form online or download the PDF) can be completed and submitted with supporting documentation which could lead to lower premiums. Other “life changing events” would include:

• Marriage

• Divorce

• Death of a spouse

• Work stoppage

• Work reduction

• Loss of income producing property

• Loss of pension income

• Employer settlement payment

Medicare would not consider higher income in one given year due to a Roth IRA conversion or realizing a large capital gain a life changing event that would warrant a reduction in premium. This highlights the importance to plan accordingly with these items as discussed earlier.

If you disagree with Medicare’s decision in determining your premiums, you have the ability to have a right to appeal by filing a “request for reconsideration” using form SSA-561-U2 (https://www.ssa.gov/forms/ssa-561-u2.pdf)

As you can see, the topic of IRMAA is enough to make anyone’s head spin. To learn even more, visit the Social Security administration’s website dedicated to this topic - https://www.ssa.gov/benefits/medicare/medicare-premiums.html#anchor5.  Prudent planning around your Medicare premiums is just one example of many of the work we do for clients that extends well beyond managing investments, that we believe adds real value over time.

If you or someone you care about is struggling with how to put all of these pieces together to achieve a favorable outcome, we are here to help. Our team of Financial Planners offer a complimentary “second opinion meeting” to address your most pressing financial questions and concerns. In many cases, by the end of this 45–60-minute discussion, it will make sense to continue the conversation of possibly working together. Other times, it will not but our team can assure you that you will hang up the phone walking away with questions answered and a plan moving forward. We look forward to the conversation.

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) I the U.S. which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

Any opinions are those of Nick Defenthaler and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation.

The hypothetical case study is for illustrative purposes only. Individual cases will vary. Prior to making any investment decision, you should consult with your financial advisor about your individual situation.

Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.

Municipal Bonds May be subject to state, local, and alternative minimum tax.

Why Insurance Matters – And Why It Starts with You

Contributed by: Kelsey Arvai, CFP®, MBA

Life is unpredictable. While we can't foresee every twist and turn, we can prepare for what may lie ahead to help protect ourselves, our family, and our stuff. Insurance often serves as a crucial tool in this preparation, offering a safety net against unforeseen events. Before caring for loved ones, protecting your home, or building a legacy, you must take care of yourself because you are your most valuable asset.

Building wealth starts with taking care of your health. Medical costs remain the #1 cause of bankruptcy in the US, and rising medical expenses can feel overwhelming. Health insurance helps mitigate these costs, making healthcare more accessible and affordable. Even when health insurance does not seem worth the investment, it is hands down the most important one you will make over your lifetime. Being reactive with your health is often far more expensive, both financially and emotionally, than taking a proactive approach. Skipping annual check-ups, preventative screenings, or delaying addressing symptoms makes you susceptible to negative compounding effects on your overall financial well-being and future. The risk is clear—turning small, manageable health issues into major financial burdens. Without health coverage, the average cost of a three-day hospital stay in the US is over $30,000, not to mention the toll a hospital visit takes on other areas of your life. Health insurance isn't just about avoiding enormous costs; it's centered around making you the best and healthiest version of yourself. Building your financial plan around sustainable self-care is one of the most meaningful decisions you can make.

In essence, insurance is about risk management. It's a proactive approach to protect yourself and your loved ones from potential financial hardships. Disability insurance is often overlooked, yet it remains among the most critical insurance coverage, along with health and life insurance. Each is designed to ensure that you or your loved ones are provided for in the worst-case scenarios. Disability insurance provides financial support if you cannot work due to illness or injury, allowing you and your family to maintain your standard of living, despite challenging times. Regularly reviewing your insurance coverage, goals, and needs remains at the core of your financial strategy to ensure alignment.

Now that you and your loved ones are protected, we now turn our attention to your stuff and lifestyle. Stuff is everything from your home, car, vintage teacup collection, clothes, and personal belongings. When it comes to protecting your lifestyle and property, auto and homeowners' insurance/rental insurance are foundational—but the details matter. For our clients in Michigan and other no-fault states, please understand the importance of unlimited Personal Liability Protection (PIP) coverage. While recent legislation allows for lower coverage options, unlimited PIP remains the gold standard for safeguarding against catastrophic medical expenses following an accident—especially when considering lifelong care costs.

Whether you are a homeowner or renting, policy insurance requires intentional customization. Renters insurance is often overlooked, but it is an affordable way to protect your personal belongings and provide liability coverage if someone is injured in your rental—coverage your landlord's policy doesn't include. Standard policies often limit coverage on high-value items like fine art, wine, or other collectibles. To fully protect these, you'll need to itemize and schedule them separately, which may require formal appraisals and updated valuations every few years. Whether in Michigan or elsewhere, ensuring your policy reflects the full value of your lifestyle—not just your home or apartment's square footage—is a key part of holistic planning.

Umbrella insurance provides an extra layer of liability protection beyond your auto and homeowners/renters policies—offering you reassurance if you're ever involved in a major lawsuit. If you have significant assets, host guests frequently, or have young drivers in your household, consider implementing a policy. Property & Casualty insurance (auto, renters, umbrella, and homeowners) helps safeguard you, your family, and your stuff by ensuring your quality of life is not disrupted by unexpected damage or losses.

Lastly, let's discuss legacy and LTC coverage. According to the US Department of Health and Human Services, someone turning 65 today has nearly a 70% chance of needing some form of long-term care (LTC) services at the end of their life. Yet, it is very difficult and expensive to plan for. We often don't associate LTC with the legacy we hope to leave, but the two are deeply connected. Without a plan in place—whether through traditional LTC, a hybrid life/LTC policy, or a dedicated self-funding strategy—we leave ourselves vulnerable to preserving your financial legacy and easing the burden of your loved ones. Additionally, life insurance intended to cover legacy purposes offers comfort that your loved ones will be financially supported in the event of your passing. It can help cover funeral expenses and outstanding debts and provide ongoing income to your family.

The insurance hierarchy in your plan should reflect your values. Start by protecting yourself and your health, then protect your income and loved ones, your lifestyle and stuff, and finally, your legacy. Insurance isn't about fear—it's about caring deeply for the life you're building. Review your insurance coverage at least annually to identify if there are any gaps in your insurance coverage and assess where you are now. If there are gaps, strategize and implement coverage to ensure you are where you want to be.

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Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Kelsey Arvai, MBA, CFP® and not necessarily those of Raymond James.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Three Financial Planning To-Dos for New Parents

Contributed by: Lauren Adams, CFA®, CFP®

If you’ve recently become a new parent, maybe your first thoughts when meeting your new child were like mine: feelings of overwhelming joy and gratitude, but also immense responsibility for this new life. Not only do you need to feed, clothe, and shelter this child, but you are also responsible for providing for their health, mental, and financial well-being for the next 18+ years. Talk about a commitment!

Hopefully, you have some trusted people in your life to help you with the health and mental well-being part, but we want you to know we’re here to help you with the financial part of the equation. In addition to stocking up on diapers and assembling the crib, we want you to add three very important to-dos to your New Parent Checklist:

1. Review Your Life Insurance Coverage

First, ensure you have enough life insurance to care for your loved ones if something happens to you. Many of us are fortunate to receive some life insurance benefits from our employer through what is called “group term life insurance.” Often, this is equal to a certain dollar amount (for instance, one times your annual salary) and is available at little to no cost to you. The plus side of group term life insurance is that it is cost-effective and usually doesn’t require medical underwriting. The downside of group term life insurance is that it typically does not provide enough coverage that your family would need if you were gone, and it usually does not stay with you if you were to leave your employer.

That is why we frequently recommend that our clients consider getting their own term life insurance through an independent insurance agent. In most cases, term life insurance (as opposed to other kinds of permanent insurance) that provides financial coverage for a certain period of time is the best way to get the most death benefit for the least amount of premium dollars. The length of that term and the dollar amount of coverage can be dictated by financial needs as well as what is important to each client. For instance, some clients want to be able to pay off a mortgage, fund college costs, allow their spouse to hire childcare, and so on. Depending on the dollar amount, you may be required to go through medical underwriting to be approved for the death benefit you want. Your financial advisor can help you determine what time and dollar amount is right for you.

2. Meet with an Estate Planning Attorney

Everyone should have an estate plan in place, which is especially important for parents. An estate plan – that usually includes a Last Will & Testament, Durable Power of Attorney for Finances, Durable Power of Attorney for Healthcare/Advanced Medical Directive, and sometimes a Revocable Living Trust – can make sure all your wishes are correctly carried out in the event of your incapacity or death. This could include everything from who you want to make healthcare decisions on your behalf to at what ages your children should receive any inheritances you leave them. One of the most important things you specify in an estate plan is the guardian for minor children if something happens to you.

When choosing a guardian, parents should discuss who is the best person to care for their children’s needs. The guardian is often a relative or close friend near the same age. The guardian does not have to be the person who manages investments on the children’s behalf (in that case, parents may want to name a separate conservator—someone who handles money on behalf of their minor children). Many times, the guardian and conservator are the same people, but there are situations when the duties are best split (usually depending on the skills and strengths of the friends or family that they choose). In that case, the guardian and conservator work together to determine an appropriate monthly stipend for the guardian to care for their children.

3. Review Your Beneficiaries

Meeting with an estate planning attorney and drafting documents is only one piece of the puzzle. You’d be surprised to learn how often we meet with married couples, help them review their financial statements, and discover that their parents are still named as the primary beneficiaries on their accounts. It is surprising but understandable; between checking and savings accounts, workplace retirement accounts like 401(k)s, Individual Retirement Accounts, and a myriad of other investment account options, there is a lot to keep track of!

When this happens, beneficiaries could be required to go through probate court to obtain inheritances, resulting in additional expenses to settle the estate. Once a client is deceased, their account could be frozen, which delays accessing funds for family members who might rely on the assets (namely, spouses and minor children). Because of this, we regularly help clients keep track of their beneficiaries and account titling.

Now, I know life insurance, estate planning, and beneficiary designations are not the most exciting things to think about after you bring your new bundle of joy home. But knowing that you have a plan in place to care for your child regardless of what happens to you can be one of the greatest gifts you give them. Reach out to discuss your personal situation and let us help you through this process!

Lauren Adams, CFA®, CFP®, is a Partner, CERTIFIED FINANCIAL PLANNER™ professional, and Director of Operations at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Lauren Adams, CFA®, CFP® and not necessarily those of Raymond James. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc.

Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Financially Preparing to Become a Pet Parent

Contributed by: Kelsey Arvai, CFP®, MBA

Contributed by: Nick Errer and Ryan O'Neal

Typically, we celebrate National Pet Month in May and Pet Appreciation Week in the first week of June. Year-round, we acknowledge the love, joy, and companionship our furry, feathered, or shelled friends bring into our lives. We reflect on the importance of responsible pet ownership and acknowledge the profound impact that pets have on our well-being. 

To say that our pets make us happy is selling short the real physical and mental health benefits of pet ownership. The National Institute of Health (NIH) found that pet owners are encouraged by the motivation and social support provided by their pets and are more likely to adopt a physical exercise routine. Furthermore, pet ownership has been associated with lowered blood and cholesterol levels while increasing our levels of serotonin and dopamine. Although it is easy to focus on the positive effects our pets have on us, it is equally important to acknowledge the caretaking commitment and financial burden we are taking on. 

Be honest: Does your lifestyle allow room for a pet? Consider your lifestyle, work, family, financial, and housing situation. Does your situation support a healthy and happy environment for a pet?

According to the American Society for the Prevention of Cruelty to Animals, the average annual cost for dog and cat ownership lies at $1,391 and $1,149, respectively. This doesn't factor in other financial planning aspects, such as pet insurance and estate planning for your pets. Pet insurance can help cover the cost of medical care for your animals. Typical policies can cost around $60 per month for dogs and $30 per month for cats. Premiums will vary depending on your pet's age, breed, cost of services, where you live, and the policy you choose. Pet insurance isn't right for everyone, but it is helpful if you are struck with an unexpected medical expense which can cost over $1,000. Since most plans won't cover pre-existing conditions, starting as soon as possible is important. The alternative is to "self-insure" by paying out-of-pocket expenses that arise. As a guideline, an average pet insurance policy with a $5,000 annual coverage, a $250 deductible, and an 80% reimbursement level will cost about $50 per month in 2024, according to Forbes Advisor.

I always recommend that everyone have enough cash on hand in an emergency fund to cover a minimum of three to six months of living costs. Once you are a pet owner, you'll need to consider increasing the amount to include expenses for your pets. While pet ownership is a choice, once you have a pet, taking care of it is not.

According to a USA Today Blueprint Survey, some dog owners spend up to $376 per month on their dogs, or $4,512 per year. This includes all day-to-day expenses like food, supplies, grooming, routine vet care, insurance, training, and dog walking, but it also includes occasional costs such as boarding and vet care in case of illness.

Research breed characteristics – explore the unique needs of your potential pet and assess how it could impact your budget. Consider home insurance and rental fees (some home insurers may increase your premiums or choose not to cover you if you own certain dog breeds). If you become a dog owner, you may want to consider additional liability coverage in case of dog bites. If you rent, some landlords require additional "pet deposits" or "pet rent".

In support of National Pet Month, The Center partnered with two local nonprofits this past May to support rescue and caretaking efforts. As part of our commitment, we donated $1,000 each to Happy Paws Haven Co. and Almost Home Animal Rescue. These organizations provide care, comfort, and compassion to animals in need. We hope our contribution helps further their mission and brings comfort to our furry friends in search of forever homes.  

Kelsey Arvai, MBA, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® She facilitates back office functions for clients.

Opinions expressed in the attached article are those of the authors and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Center for Financial Planning, Inc.® Center for Financial Planning, Inc.® is not a registered broker/dealer and is independent of Raymond James Financial Services.

Can I Avoid IRMAA Surcharges on Medicare Part B and Part D?

Contributed by: Nick Defenthaler, CFP®, RICP®

In 2023, Medicare Part B premiums for 95% of Americans will be $164.90/mo. However, the other 5% will have to face what’s known as the Income Related Monthly Adjustment Amount or IRMAA and pay higher Part B and D premiums. Each year, the chart below is updated, and in most cases, premiums increase gradually with inflation, as do the income parameters associated with each premium tier.

Source: Medicare.gov

Receiving communication that you’re subject to IRMAA and facing higher Medicare premiums is never a pleasant notification. With proper planning, however, there are strategies to potentially avoid IRMAA both now and in the future.

But first, let’s do a quick refresher on the basics

Medicare bases your premium on your latest tax return filed with the IRS. For example, when your 2023 Part B and D premiums were determined (likely occurred in October/November 2022), Medicare used your 2021 tax return to track income. If you are married and your Modified Adjusted Gross Income (MAGI) was over $194,000 in 2021 ($97,000 for single filers), you’re paying more for Part B and D premiums aka subject to IRMAA. Unlike how our tax brackets function, Medicare income thresholds are a true cliff. You could be $1 over the $194,000 threshold and that’s all it takes to increase your premiums for the year! As mentioned previously, your Part B and D premiums are based off of your Modified Adjusted Gross Income or MAGI. The calculation for MAGI is slightly different and unique from the typical Adjusted Gross Income (AGI) calculation as MAGI includes certain income “add back” items such as tax-free municipal bond interest. Simply put, while muni bond interest might function as tax-free income on your return, it does get factored into the equation when determining whether or not you’re subject to IRMAA.

Navigating IRMAA with Roth IRA conversion and portfolio income 

Given our historically low tax environment, Roth IRA conversions are as popular as ever. Current tax rates are set to expire in 2026, but this could occur sooner, depending on our political landscape. When a Roth conversion occurs, a client moves money from their Traditional IRA to a Roth IRA for future tax-free growth. When the funds are converted to the Roth, a taxable event occurs, and the funds converted are considered taxable in the year the conversion takes place. Because Roth IRA conversions add to your income for the year, it’s common for the conversion to be the root cause of an IRMAA if proper planning does not occur. What makes this even trickier is the two-year lookback period. So, for clients considering Roth conversions, the magic age to begin being cognizant of the Medicare income thresholds is not at age 65 when Medicare begins, but rather age 63 because it’s that year’s tax return that will ultimately determine your Medicare premiums at age 65! 

Now that there are no “do-overs” with Roth conversions (Roth conversion re-characterizations went away in 2018), our preference in most cases is to do Roth conversions in November or December for clients who are age 63 and older. By that time, we will have a clear picture of total income for the year. I can’t tell you how often we’ve seen situations where clients confidently believe their income will be a certain amount but ends up being much higher due to an unexpected income event.

Another way to navigate IRMAA is by being cognizant of income from after-tax investment/brokerage accounts. Things like capital gains, dividends, interest, etc., all factor into the MAGI calculation previously mentioned. Being intentional with the asset location of accounts can potentially help save thousands in Medicare premiums.

Ways to reduce income to potentially lower part B and D premiums

Qualified Charitable Distribution (QCD) 

• If you’re over 70 ½ and subject to Required Minimum Distributions (RMD), gifting funds from your IRA directly to a charity prevents income from hitting your tax return. This reduction in income could help shield you from IRMAA. 

Contributing to a tax-deductible retirement account such as a 401k, 403b, IRA, SEP-IRA, etc.

• Depositing funds into one of these retirement accounts reduces MAGI and could help prevent IRMAA.

Deferring income into another year 

• Whether it means drawing income from an after-tax investment account for cash flow needs or holding off on selling a stock that would create a capital gain towards year-end, being strategic with the timing of income generation could prove to be wise when navigating IRMAA. 

Accelerating business expenses to reduce income 

• Small business owners who could be facing higher Medicare premiums might consider accelerating expenses in certain years, which in turn drives taxable income lower if they’re flirting with IRMAA. 

Putting IRMAA into perspective 

Higher Medicare premiums are essentially a form of additional tax, which can help us put things into perspective. For example, if a couple decides to do aggressive Roth IRA conversions to maximize the 22% tax bracket and MAGI ends up being $200,000, their federal tax bill will be approximately $30,000. This translates into an effective/average tax rate of 15% ($30,000 / $200,000). However, if you factor in the IRMAA, it will end up being about $1,700 total for the couple between the higher Part B and D premiums. This additional "tax" ends up only pushing the effective tax rate to 15.85% - less than a 1% increase! I highlight this not to trivialize a $1,700 additional cost for the year, as this is real money we're talking about here. That said, I do feel it's appropriate to zoom out a bit and maintain perspective on the big picture. If we forgo savvy planning opportunities to save a bit on Medicare premiums, we could end up costing ourselves much more down the line. However, not taking IRMAA into consideration is also a miss in our opinion. Like anything in investment and financial planning, a balanced approach is prudent when navigating IRMAA – there is never a "one size fits all" solution. 

Fighting back on IRMAA

If you've received notification that your Medicare Part B and D premiums are increasing due to IRMAA, there could be ways to reverse the decision. The most common situation is when a recent retiree starts Medicare and, in the latest tax return on file with the IRS, shows a much higher income level. Retirement is one example of what Medicare would consider a "life-changing event," in which case form SSA-44 can be completed, submitted with supporting documentation, and could lead to lower premiums. Other "life-changing events" would include:

• Marriage

• Divorce

• Death of a spouse 

• Work stoppage

• Work reduction

• Loss of income producing property 

• Loss of pension income 

• Employer settlement payment 

Medicare would not consider higher income in one given year due to a Roth IRA conversion or realizing a large capital gain a life-changing event that would warrant a reduction in premium. This highlights the importance of planning accordingly with these items.

If you disagree with Medicare's decision in determining your premiums, you have the ability to have a right to appeal by filing a "request for reconsideration" using form SSA-561-U2.

Conclusion

As you can see, the topic of IRMAA is enough to make anyone's head spin. To learn more, visit the Social Security Administration's website dedicated to this topic. Prudent planning around your Medicare premiums is just one example of much of the work we do for clients that extends well beyond managing investments that we believe add real value over time. 

If you or someone you care about is struggling with how to put all of these pieces together to achieve a favorable outcome, we are here to help. Our team of CERTIFIED FINANCIAL PLANNER™ professionals offers a complimentary "second opinion meeting" to address your most pressing financial questions and concerns. In many cases, by the end of this 30-45 minute discussion, it will make sense to continue the conversation of possibly working together. Other times, it will not, but our team can assure you that you will hang up the phone walking away with questions answered and a plan moving forward. We look forward to the conversation!

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) I the U.S. which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Nick Defenthaler, CFP®, RICP® and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.

Can I Avoid IRMAA Surcharges on Medicare Part B and Part D?

Contributed by: Nick Defenthaler, CFP®, RICP®

In 2023, Medicare Part B premiums for 95% of Americans will be $164.90/mo. However, the other 5% will have to face what’s known as the Income Related Monthly Adjustment Amount or IRMAA and pay higher Part B and D premiums. Each year, the chart below is updated, and in most cases, premiums increase gradually with inflation, as do the income parameters associated with each premium tier.

Source: Medicare.gov

Receiving communication that you’re subject to IRMAA and facing higher Medicare premiums is never a pleasant notification. With proper planning, however, there are strategies to potentially avoid IRMAA both now and in the future.

But first, let’s do a quick refresher on the basics

Medicare bases your premium on your latest tax return filed with the IRS. For example, when your 2023 Part B and D premiums were determined (likely occurred in October/November 2022), Medicare used your 2021 tax return to track income. If you are married and your Modified Adjusted Gross Income (MAGI) was over $194,000 in 2021 ($97,000 for single filers), you’re paying more for Part B and D premiums aka subject to IRMAA. Unlike how our tax brackets function, Medicare income thresholds are a true cliff. You could be $1 over the $194,000 threshold and that’s all it takes to increase your premiums for the year! As mentioned previously, your Part B and D premiums are based off of your Modified Adjusted Gross Income or MAGI. The calculation for MAGI is slightly different and unique from the typical Adjusted Gross Income (AGI) calculation as MAGI includes certain income “add back” items such as tax-free municipal bond interest. Simply put, while muni bond interest might function as tax-free income on your return, it does get factored into the equation when determining whether or not you’re subject to IRMAA.

Navigating IRMAA with Roth IRA conversion and portfolio income 

Given our historically low tax environment, Roth IRA conversions are as popular as ever. Current tax rates are set to expire in 2026, but this could occur sooner, depending on our political landscape. When a Roth conversion occurs, a client moves money from their Traditional IRA to a Roth IRA for future tax-free growth. When the funds are converted to the Roth, a taxable event occurs, and the funds converted are considered taxable in the year the conversion takes place. Because Roth IRA conversions add to your income for the year, it’s common for the conversion to be the root cause of an IRMAA if proper planning does not occur. What makes this even trickier is the two-year lookback period. So, for clients considering Roth conversions, the magic age to begin being cognizant of the Medicare income thresholds is not at age 65 when Medicare begins, but rather age 63 because it’s that year’s tax return that will ultimately determine your Medicare premiums at age 65! 

Now that there are no “do-overs” with Roth conversions (Roth conversion re-characterizations went away in 2018), our preference in most cases is to do Roth conversions in November or December for clients who are age 63 and older. By that time, we will have a clear picture of total income for the year. I can’t tell you how often we’ve seen situations where clients confidently believe their income will be a certain amount but ends up being much higher due to an unexpected income event.

Another way to navigate IRMAA is by being cognizant of income from after-tax investment/brokerage accounts. Things like capital gains, dividends, interest, etc., all factor into the MAGI calculation previously mentioned. Being intentional with the asset location of accounts can potentially help save thousands in Medicare premiums.

Ways to reduce income to potentially lower part B and D premiums

Qualified Charitable Distribution (QCD) 

• If you’re over 70 ½ and subject to Required Minimum Distributions (RMD), gifting funds from your IRA directly to a charity prevents income from hitting your tax return. This reduction in income could help shield you from IRMAA. 

Contributing to a tax-deductible retirement account such as a 401k, 403b, IRA, SEP-IRA, etc.

• Depositing funds into one of these retirement accounts reduces MAGI and could help prevent IRMAA.

Deferring income into another year 

• Whether it means drawing income from an after-tax investment account for cash flow needs or holding off on selling a stock that would create a capital gain towards year-end, being strategic with the timing of income generation could prove to be wise when navigating IRMAA. 

Accelerating business expenses to reduce income 

• Small business owners who could be facing higher Medicare premiums might consider accelerating expenses in certain years, which in turn drives taxable income lower if they’re flirting with IRMAA. 

Putting IRMAA into perspective 

Higher Medicare premiums are essentially a form of additional tax, which can help us put things into perspective. For example, if a couple decides to do aggressive Roth IRA conversions to maximize the 22% tax bracket and MAGI ends up being $200,000, their federal tax bill will be approximately $30,000. This translates into an effective/average tax rate of 15% ($30,000 / $200,000). However, if you factor in the IRMAA, it will end up being about $1,700 total for the couple between the higher Part B and D premiums. This additional "tax" ends up only pushing the effective tax rate to 15.85% - less than a 1% increase! I highlight this not to trivialize a $1,700 additional cost for the year, as this is real money we're talking about here. That said, I do feel it's appropriate to zoom out a bit and maintain perspective on the big picture. If we forgo savvy planning opportunities to save a bit on Medicare premiums, we could end up costing ourselves much more down the line. However, not taking IRMAA into consideration is also a miss in our opinion. Like anything in investment and financial planning, a balanced approach is prudent when navigating IRMAA – there is never a "one size fits all" solution. 

Fighting back on IRMAA

If you've received notification that your Medicare Part B and D premiums are increasing due to IRMAA, there could be ways to reverse the decision. The most common situation is when a recent retiree starts Medicare and, in the latest tax return on file with the IRS, shows a much higher income level. Retirement is one example of what Medicare would consider a "life-changing event," in which case form SSA-44 can be completed, submitted with supporting documentation, and could lead to lower premiums. Other "life-changing events" would include:

• Marriage

• Divorce

• Death of a spouse 

• Work stoppage

• Work reduction

• Loss of income producing property 

• Loss of pension income 

• Employer settlement payment 

Medicare would not consider higher income in one given year due to a Roth IRA conversion or realizing a large capital gain a life-changing event that would warrant a reduction in premium. This highlights the importance of planning accordingly with these items.

If you disagree with Medicare's decision in determining your premiums, you have the ability to have a right to appeal by filing a "request for reconsideration" using form SSA-561-U2.

Conclusion

As you can see, the topic of IRMAA is enough to make anyone's head spin. To learn more, visit the Social Security Administration's website dedicated to this topic. Prudent planning around your Medicare premiums is just one example of much of the work we do for clients that extends well beyond managing investments that we believe add real value over time. 

If you or someone you care about is struggling with how to put all of these pieces together to achieve a favorable outcome, we are here to help. Our team of CERTIFIED FINANCIAL PLANNER™ professionals offers a complimentary "second opinion meeting" to address your most pressing financial questions and concerns. In many cases, by the end of this 30-45 minute discussion, it will make sense to continue the conversation of possibly working together. Other times, it will not, but our team can assure you that you will hang up the phone walking away with questions answered and a plan moving forward. We look forward to the conversation!

Nick Defenthaler, CFP®, RICP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® Nick specializes in tax-efficient retirement income and distribution planning for clients and serves as a trusted source for local and national media publications, including WXYZ, PBS, CNBC, MSN Money, Financial Planning Magazine and OnWallStreet.com.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) I the U.S. which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Nick Defenthaler, CFP®, RICP® and not necessarily those of Raymond James.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Center for Financial Planning, Inc. Center for Financial Planning, Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services.